Document:

sfy_ex41-06012007.htm

    
      

    

    SWIFT
      ENERGY COMPANY,

     

    as
      Issuer

     

    SWIFT
      ENERGY OPERATING, LLC,

     

    as
      Subsidiary Guarantor

     

    and

     

    WELLS
      FARGO BANK,

     

    NATIONAL
      ASSOCIATION

     

    as
      Trustee

     

    FIRST
      SUPPLEMENTAL INDENTURE

     

    Dated
      as of June 1, 2007

     

    To
      Indenture Dated as of May 16, 2007

     

    

     

    

     

    Providing
      for Issuance of

     

    71⁄8%
      Senior Notes due 2017

     

    
      
              

                  

        

         

      

      
         

        
          

        

      

      
         

      

    

    TABLE
      OF CONTENTS

     

    Page

    

      
        	
                SECTION
                  1.

              	
                Creation
                  of 71⁄8% Notes 

              	
                2

              
	
                SECTION
                  2.

              	
                Definitions 

              	
                3

              
	
                SECTION
                  3.

              	
                Amendments
                  to Article III of the Original Indenture

              	
                33

              
	
                SECTION
                  4.

              	
                Amendments
                  to Article IV of the Original Indenture

              	
                35

              
	
                SECTION
                  5.

              	
                Amendments
                  to Article V of the Original Indenture

              	
                49

              
	
                SECTION
                  6.

              	
                Amendments
                  to Article VI of the Original Indenture

              	
                49

              
	
                SECTION
                  7.

              	
                Amendments
                  to Article VII of the Original Indenture

              	
                51

              
	
                SECTION
                  8.

              	
                Amendments
                  to Article IX of the Original Indenture

              	
                51

              
	
                SECTION
                  9.

              	
                Amendments
                  to Article X of the Original Indenture

              	
                52

              
	
                SECTION
                  10.

              	
                Applicability
                  of and Amendments to Article XI of the Original
                  Indenture 

              	
                53

              
	
                SECTION
                  11.

              	
                Inapplicability
                  of Article XII of the Original Indenture 

              	
                55

              
	
                SECTION
                  12.

              	
                Governing
                  Law. 

              	
                55

              
	
                SECTION
                  13.

              	
                Subsidiary
                  Guaranties 

              	
                55

              
	
                SECTION
                  14.

              	
                Governing
                  Law 

              	
                58

              
	SECTION
                15.	Counterparts	58
	SECTION
                16. 	Supplemental
                Indenture Controls 	59
	
                Exhibit
                  A

              	
                Form
                  of the 71⁄8% Notes

              	
                A-1

              
	
                Exhibit
                  B

              	
                Form
                  of Supplemental Indenture

              	
                B-1

              

      

    

    
      
        
           

        

      

      
         

        
          

        

      

      
         

      

    

    THIS
      FIRST SUPPLEMENTAL INDENTURE, dated as of June 1, 2007 (this “First Supplemental
      Indenture”), to the Indenture dated as of May 16, 2007 (the “Original
      Indenture”) is among SWIFT ENERGY COMPANY, a Texas corporation, as issuer (the
“Company”), SWIFT ENERGY OPERATING, LLC, a Texas limited liability company
      (“Opco”), as Subsidiary Guarantor, and WELLS FARGO BANK, NATIONAL ASSOCIATION,
      as trustee (the “Trustee”).

     

    WHEREAS,
      the Company and the Trustee have heretofore executed and delivered the Original
      Indenture to provide for the issuance of its securities to be issued in one
      or
      more registered series;

     

    WHEREAS,
      Section 9.01 of the Original Indenture provides, among other things, that the
      Company and the Trustee may without the consent of Holders enter into indentures
      supplemental to the Original Indenture to, among other things, (a) add to,
      change or eliminate any of the provisions of the Original Indenture in respect
      of one or more series of Debt Securities; provided, however, that any such
      addition, change or elimination not otherwise permitted under Section 9.01
      shall
      (i) neither (A) apply to any Debt Security of any series created prior to the
      execution of such supplemental indenture and entitled to the benefit of such
      provision nor (B) modify the rights of the Holder of any such previously issued
      Debt Security with respect to such provision or (ii) shall become effective
      only
      when there is no such Debt Security Outstanding, (b) add Guarantees with respect
      to the Debt Securities and (c) establish the form or terms of Debt Securities
      of
      any series as permitted by Sections 2.01 and 2.03;

     

    WHEREAS,
      the Company desires to provide for the issuance of a new series of Debt
      Securities to be designated as the “71⁄8% Senior Notes due 2017” (the “71⁄8%
      Notes”), to be guaranteed by Opco, and to set forth the terms that will be
      applicable thereto;

     

    WHEREAS,
      all action on the part of the Company necessary to authorize the issuance of
      the
      71⁄8% Notes under the Original Indenture and this First Supplemental Indenture
      (the Original Indenture, as amended and supplemented by this First Supplemental
      Indenture, being hereinafter called the “Indenture”) has been duly taken;
      and

     

    WHEREAS,
      all acts and things necessary to make the 71⁄8% Notes, when executed by the
      Company and authenticated and delivered by the Trustee as provided in the
      Original Indenture, the legal, valid and binding obligations of the Company,
      and
      to constitute these presents a valid and binding supplemental indenture
      according to its terms binding on the Company and Opco, have been done and
      performed, and the execution of this First Supplemental Indenture and the
      creation and issuance under the Indenture of the 71⁄8% Notes have in all respects
      been duly authorized, and the Company in the exercise of the legal right and
      power vested in it, executes this First Supplemental Indenture and proposes
      to
      create, execute, issue and deliver the 71⁄8% Notes.

     

    NOW,
      THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:

     

    That,
      in
      order to establish the designation, form, terms and provisions of, and to
      authorize the authentication and delivery of the 71⁄8% Notes and in consideration
      of the acceptance of the

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    71⁄8%
      Notes
      by the Holders thereof and of other good and valuable consideration, the receipt
      and sufficiency of which are hereby acknowledged, the parties hereto hereby
      agree as follows:

     

    SECTION
      1.   Creation of 71⁄8% Notes.  Pursuant to
      Sections 2.01 and 2.03 of the Original Indenture, there is hereby created a
      new
      series of Debt Securities designated as the “71⁄8% Senior Notes due 2017”, limited
      in aggregate principal amount to $250,000,000 (which are hereinafter defined
      as
      the “71⁄8% Notes” for purposes this First Supplemental Indenture).  The
      Trustee shall authenticate 71⁄8% Notes for original issue in the aggregate
      principal amount of $250,000,000 (the “Original 71⁄8% Notes”).  The
      Original 71⁄8% Notes shall be in the form specified in Exhibit A to this First
      Supplemental Indenture, shall have the terms set forth therein and shall be
      entitled to the benefits of the other provisions of the Original Indenture
      as
      modified by this First Supplemental Indenture and specified herein.

     

    The
      Place
      of Payment with respect to the Notes, in addition to the corporate trust office
      of the Trustee, shall be New York, New York, and at such time, if ever, the
      71⁄8%
      Notes are no longer represented by one or more Global Securities, the Company
      shall appoint and maintain a paying agent for the 71⁄8% Notes in New York, New
      York, the intention of the Company being that, after giving effect to the
      procedures of the Depositary respecting payments on Global Securities, the
      71⁄8%
      Notes shall at all times be payable in New York, New York.

     

    With
      respect to any 71⁄8% Notes issued after the Issue Date (except for 71⁄8% Notes
      authenticated and delivered upon registration of transfer of, or in exchange
      for, or in lieu of, other 71⁄8% Notes pursuant to Section 2.07, 2.08, 2.09, 2.15,
      3.03 or 9.04 of the Original Indenture) (the “Additional 71⁄8% Notes”), there
      shall be established in or pursuant to a resolution of the Board of Directors
      of
      the Company:

     

    (a)           that
      such Additional 71⁄8% Notes shall be issued as part of the same or a different
      series as the Original 71⁄8% Notes;

     

    (b)           the
      aggregate principal amount of such Additional 71⁄8% Notes which may be
      authenticated and delivered under the Indenture, which, subject to compliance
      with Article IV of the Original Indenture, may be in an unlimited aggregate
      principal amount or which may be in a limited principal amount (except for
      Additional 71⁄8% Notes authenticated and delivered upon registration of transfer
      of, or in exchange for, or in lieu of, other 71⁄8% Notes pursuant to Section 2.07,
      2.08, 2.09, 2.15, 3.03 or 9.04 of the Original Indenture);

     

    (c)           the
      issue price and issuance date of such Additional 71⁄8% Notes, including the date
      from which interest on such Additional 71⁄8% Notes shall accrue;

     

    (d)           if
      applicable, that such Additional 71⁄8% Notes shall be issuable in whole or in part
      in the form of one or more Global Securities and, in such case, the respective
      Depositaries for such Global Securities, the form of any legend or legends
      that
      shall be borne by any such Global Security in addition to or in lieu of that
      set
      forth in Section 2.15 or Exhibit A and any circumstances in addition to or
      in
      lieu of those set forth in the Indenture in which any such Global Security
      may
      be exchanged in whole or in part for 71⁄8% Notes registered, and any

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    transfer
      of such Global Security in whole or in part may be registered, in the name
      or
      names of Persons other than the Depositary for such Global Security or a nominee
      thereof; and

     

    (e)           if
      applicable, that such Additional 71⁄8% Notes shall not be registered under the
      Securities Act, but shall be issued pursuant to an exemption from registration
      under the Securities Act bearing additional appropriate legends and shall have
      the benefit of registration rights.  Except as set forth above, such
      Additional 71⁄8% Notes shall have the terms set forth in Exhibit A to this First
      Supplemental Indenture and shall be entitled to the benefits of the other
      provisions of the Original Indenture as modified by this First Supplemental
      Indenture and as specified herein.

     

    SECTION
      2.      Definitions

     

    (a)           Capitalized
      terms used herein and not otherwise defined shall have the respective meanings
      assigned thereto in the Original Indenture.

     

    (b)           Section
      1.01 of the Original Indenture is amended and supplemented by inserting or
      restating, as the case may be, in their appropriate alphabetical position,
      the
      following definitions:

     

    “Additional
      Assets” means:

     

    (a)           any
      Property (other than cash, Permitted Short-Term Investments or securities)
      used
      in the Oil and Gas Business or any business ancillary thereto;

     

    (b)           Investments
      in any other Person engaged in the Oil and Gas Business or any business
      ancillary thereto (including the acquisition from third parties of Capital
      Stock
      of such Person) as a result of which such other Person becomes a Restricted
      Subsidiary in compliance with Section 4.19;

     

    (c)           the
      acquisition from third parties of Capital Stock of a Restricted Subsidiary;
      or

     

    (d)           Permitted
      Business Investments.

     

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

     

    (a)           the
      sum of:

     

    (1)           discounted
      future net revenues from proved oil and gas reserves of the Company and its
      Restricted Subsidiaries calculated in accordance with SEC guidelines before
      any
      state, federal or foreign income taxes, as estimated by the Company and
      confirmed by a nationally recognized firm of independent petroleum engineers
      in
      a reserve report prepared as of the end of the Company’s most recently completed
      fiscal year for which audited financial statements are available, as increased
      by, as of the date of determination, the estimated discounted future net
      revenues from:

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    (A)           estimated
      proved oil and gas reserves acquired since such year end, which reserves were
      not reflected in such year end reserve report, and

     

    (B)           estimated
      oil and gas reserves attributable to upward revisions of estimates of proved
      oil
      and gas reserves since such year end due to exploration, development or
      exploitation activities, 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 estimated discounted future
      net revenues from:

     

    (C)           estimated
      proved oil and gas reserves produced or disposed of since such year end,
      and

     

    (D)           estimated
      oil and gas reserves attributable to downward revisions of estimates of proved
      oil and gas reserves since such year end due to changes in geological conditions
      or other factors that would, in accordance with standard industry practice,
      cause such revisions, in each case calculated in accordance with SEC guidelines
      (utilizing the prices utilized in such year end reserve report),

     

    provided
      that, in the case of each of the determinations made pursuant to clauses (A)
      through (D), such increases and decreases shall be as estimated by the Company’s
      petroleum engineers, unless there is a Material Change as a result of such
      acquisitions, dispositions or revisions, in which event the discounted future
      net revenues utilized for purposes of this clause (a)(1) shall be confirmed
      in
      writing by a nationally recognized firm of independent petroleum
      engineers,

     

    (2)           the
      capitalized costs that are attributable to oil and gas properties of the Company
      and its Restricted Subsidiaries to which no proved oil and gas reserves are
      attributable, 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,

     

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

     

    (4)           the
      greater of the net book value or the appraised value as estimated by independent
      appraisers of other tangible assets (including, without duplication, Investments
      in unconsolidated Restricted Subsidiaries) of the Company and its Restricted
      Subsidiaries, as of a date no earlier than the date of the Company’s latest
      audited financial statements.  For these purposes, net book value
      shall be determined as of a date no earlier than the date of the Company’s
      latest annual or quarterly financial statements, and on a date no earlier than
      the date of the Company’s latest annual or quarterly financial
      statements;

     

    (b)           minus
      the sum of:

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    (1)           minority
      interests,

     

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

     

    (3)           to
      the extent included in (a)(1) above, the discounted future net revenues,
      calculated in accordance with SEC guidelines (utilizing the 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 (determined, if applicable, using the schedules specified
      with respect thereto), and

     

    (4)           the
      discounted future net revenues, 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 revenues specified in (a)(1) above, would
      be necessary to fully satisfy the payment obligations of the Company and its
      Restricted Subsidiaries with respect to Dollar-Denominated Production Payments
      (determined, if applicable, using the schedules specified with respect
      thereto).

     

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

     

    “Adjusted
      Treasury Rate” means, with respect to any redemption date:

     

    (a)           (1)           the
      yield, under the heading which represents the average for the immediately
      preceding week, appearing in the most recently published statistical release
      designated “H.15(519)” or any successor publication which is published weekly by
      the Board of Governors of the Federal Reserve System and which establishes
      yields on actively traded United States Treasury securities adjusted to constant
      maturity under the caption “Treasury Constant Maturities,” for the maturity
      corresponding to the Comparable Treasury Issue (if no maturity is within three
      months before or after June 1, 2012, yields for the two published maturities
      most closely corresponding to the Comparable Treasury Issue shall be determined
      and the Adjusted Treasury Rate shall be interpolated or extrapolated from such
      yields on a straight line basis, rounding to the nearest month) or

     

    (2)           if
      such release (or any successor release) is not published during the week
      preceding the calculation date or does not contain such yields, the rate per
      year equal to the semi-annual equivalent yield to maturity of the Comparable
      Treasury Issue (expressed as a percentage of its principal amount) equal to
      the
      Comparable Treasury Price for such redemption date, in each case calculated
      on
      the third Business Day immediately preceding the redemption date,
      plus

     

    (b)           0.50%.

     

    “Affiliate”
      of any specified Person means any other Person:

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    (a)           that
      directly or indirectly through one or more intermediaries controls, or is
      controlled by, or is under common control with, such specified Person;
      or

     

    (b)           that
      beneficially owns or holds directly or indirectly 10% or more of any class
      of
      the Voting Stock of such specified Person or of any Subsidiary of such specified
      Person.

     

    For
      the
      purposes of this definition, “control,” when used with respect to any specified
      Person, means the power to direct the management and policies of such Person
      directly or indirectly, whether through the ownership of Voting Stock, by
      contract or otherwise; and the terms “controlling” and “controlled” have
      meanings correlative to the foregoing.

     

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

     

    (a)           1.0%
      of the principal amount of such Note and

     

    (b)           the
      excess of (1) the present value at such redemption date of (A) the redemption
      price of such Note on June 1, 2012 (such redemption price being described in
      the
      first paragraph and accompanying table of Section 3.06, exclusive of any accrued
      interest) plus (B) all required remaining scheduled interest payments due on
      such Note through June 1, 2012, computed using a discount rate equal to the
      Adjusted Treasury Rate, over (2) the principal amount of such Note on such
      redemption date.

     

    “Asset
      Sale” means, with respect to any Person, any transfer, conveyance, sale,
      lease or other disposition (collectively, “dispositions,” and including
      dispositions pursuant to any consolidation or merger) by such Person or any
      of
      its Restricted Subsidiaries in any single transaction or series of transactions
      of:

     

    (a)           shares
      of Capital Stock or other ownership interests of another Person (including
      Capital Stock of Restricted Subsidiaries and Unrestricted Subsidiaries);
      or

     

    (b)           any
      other Property of such Person or any of its Restricted
      Subsidiaries;

     

    provided,
      however, that the term “Asset Sale” shall not include:

     

    (1)           the
      disposition of Permitted Short-Term Investments, inventory, accounts receivable,
      surplus or obsolete equipment or other Property (excluding the disposition
      of
      oil and gas in place and other interests in real property unless made in
      connection with a Permitted Business Investment) in the ordinary course of
      business;

     

    (2)           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;

     

    (3)           the
      disposition of Property received in settlement of debts owing to the Company
      or
      any Restricted Subsidiary as a result of foreclosure, perfection or enforcement
      of any Lien or debt, which debts were owing to the Company or any

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    Restricted
      Subsidiary in the ordinary course of business of the Company or such Restricted
      Subsidiary;

     

    (4)           any
      disposition that constitutes a Restricted Payment made in compliance with
      Section 4.12;

     

    (5)           when
      used with respect to the Company, any disposition of all or substantially all
      of
      the Property of the Company and its Restricted Subsidiaries taken as a whole
      permitted pursuant to Article X;

     

    (6)           the
      disposition of any Property by the Company or a Restricted Subsidiary to the
      Company or a Wholly Owned Subsidiary;

     

    (7)           the
      disposition of any Property with a Fair Market Value of less than $5.0 million;
      or

     

    (8)           any
      Production Payments and Reserve Sales, provided that any such Production
      Payments and Reserve Sales, other than incentive compensation programs on terms
      that are reasonably customary in the Oil and Gas Business for geologists,
      geophysicists and other providers of technical services to the Company or a
      Restricted Subsidiary, shall have been created, Incurred, issued, assumed or
      Guaranteed in connection with the financing of, and within 60 days after the
      acquisition of, the Property that is subject thereto.

     

    “Average
      Life” means, with respect to any Indebtedness, at any date of
      determination, the quotient obtained by dividing:

     

    (a)           the
      sum of the products of:

     

    (1)           the
      number of years (and any portion thereof) from the date of determination to
      the
      date or dates of each successive scheduled principal payment (including any
      sinking fund or mandatory redemption payment requirements) of such Indebtedness,
      multiplied by

     

    (2)           the
      amount of each such principal payment,

     

    (b)           by
      the sum of all such principal payments.

     

    “Bank
      Credit Facilities” means, with respect to any Person, one or more debt
      facilities or commercial paper facilities with banks or other institutional
      lenders providing for revolving credit loans, term loans, receivables or
      inventory financing (including through the sale of receivables or inventory
      financing to such lenders or to special purpose entities formed to borrow from
      such lenders against such receivables or inventory) or trade or standby letters
      of credit, in each case together with any extensions, revisions, refinancings
      or
      replacements thereof by a lender or syndicate of lenders.

     

    “Capital
      Lease Obligations” means any obligation that is required to be classified
      and accounted for as a capital lease obligation in accordance with GAAP, and
      the
      amount of

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    Indebtedness
      represented by such obligation shall be the capitalized amount of such
      obligation determined in accordance with GAAP, and the Stated Maturity thereof
      shall be the date of the last payment date of rent or any other amount due
      in
      respect of such obligation.

     

    “Capital
      Stock” means, with respect to any Person, any shares or other equivalents
      (however designated) of any class of corporate stock or partnership interests
      or
      any other participations, rights, warrants, options or other interests in the
      nature of an equity interest in such Person, including Preferred Stock, but
      excluding any debt security convertible or exchangeable into such equity
      interest.

     

    “Change
      of Control” means the occurrence of any of the following, if followed by a
      Rating Decline within 90 days thereof:

     

    (a)           any
      “person” or “group” (within the meaning of Section 13(d)(3) and 14(d)(2) of the
      Exchange Act or any successor provision to either of the foregoing, including
      any group acting for the purpose of acquiring, holding or disposing of
      securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act)
      becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
      Exchange Act, except that a Person will be deemed to have “beneficial ownership”
of all shares that any such Person has the right to acquire, whether such right
      is exercisable immediately or only after the passage of time) of 40 percent
      or
      more of the total voting power of all classes of the Voting Stock of the
      Company;

     

    (b)           the
      sale, lease, transfer or other disposition, directly or indirectly, of all
      or
      substantially all the Property of the Company and the Restricted Subsidiaries
      taken as a whole (other than a disposition of such Property as an entirety
      or
      virtually as an entirety to any Wholly Owned Subsidiary) shall have
      occurred;

     

    (c)           the
      shareholders of the Company shall have approved any plan of liquidation or
      dissolution of the Company;

     

    (d)           the
      Company consolidates with or merges into another Person or any Person
      consolidates with or merges into the Company in any such event pursuant to
      a
      transaction in which the outstanding Voting Stock of the Company is reclassified
      into or exchanged for cash, securities or other Property, other than any such
      transaction where the outstanding Voting Stock of the Company is reclassified
      into or exchanged for Voting Stock of the surviving Person and the holders
      of
      the Voting Stock of the Company immediately prior to such transaction own,
      directly or indirectly, not less than a majority of the Voting Stock of the
      surviving Person immediately after such transaction in substantially the same
      proportion as before the transaction; or

     

    (e)           during
      any period of two consecutive years, individuals who at the beginning of such
      period constituted the Company’s Board of Directors (together with any new
      directors whose election or appointment by such Board of Directors or whose
      nomination for election by the shareholders of the Company was approved by
      a
      vote of a majority of the directors then still in office who were either
      directors at the beginning of such period or whose election or nomination for
      election was previously approved by

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    such
      vote) cease for any reason to constitute a majority of the Company’s Board of
      Directors then in office.

     

    “Comparable
      Treasury Issue” means the United States Treasury security selected by the
      Quotation Agent as having a maturity comparable to the remaining term from
      the
      redemption date to June 1, 2012, that would be utilized, at the time of
      selection and in accordance with customary financial practice, in pricing new
      issues of corporate debt securities of a maturity most nearly equal to June
      1,
      2012.

     

    “Comparable
      Treasury Price” means, with respect to any redemption date, if clause
      (a)(2) of the Adjusted Treasury Rate is applicable, the average of three, or
      such lesser number as is obtained by the Trustee, Reference Treasury Dealer
      Quotations for such redemption date.

     

    “Consolidated
      Interest Coverage Ratio” means, as of the date of the transaction (the
“Transaction Date”) giving rise to the need to calculate the Consolidated
      Interest Coverage Ratio, the ratio of:

     

    (a)           the
      aggregate amount of EBITDA of the Company and its consolidated Restricted
      Subsidiaries for the four full fiscal quarters immediately prior to the
      Transaction Date for which financial statements are available; to

     

    (b)           the
      aggregate Consolidated Interest Expense of the Company and its Restricted
      Subsidiaries that is anticipated to accrue during a period consisting of the
      fiscal quarter in which the Transaction Date occurs and the three fiscal
      quarters immediately subsequent thereto (based upon the pro forma amount and
      maturity of, and interest payments in respect of, Indebtedness of the Company
      and its Restricted Subsidiaries expected by the Company to be outstanding on
      the
      Transaction Date), assuming for the purposes of this measurement the
      continuation of market interest rates prevailing on the Transaction Date and
      base interest rates in respect of floating interest rate obligations equal
      to
      the base interest rates on such obligations in effect as of the Transaction
      Date; provided, that if the Company or any of its Restricted Subsidiaries is
      a
      party to any Interest Rate Protection Agreement that would have the effect
      of
      changing the interest rate on any Indebtedness of the Company or any of its
      Restricted Subsidiaries for such four quarter period (or a portion thereof),
      the
      resulting rate shall be used for such four quarter period or portion thereof;
      provided further that any Consolidated Interest Expense with respect to
      Indebtedness Incurred or retired by the Company or any of its Restricted
      Subsidiaries during the fiscal quarter in which the Transaction Date occurs
      shall be calculated as if such Indebtedness was so Incurred or retired on the
      first day of the fiscal quarter in which the Transaction Date
      occurs.

     

    In
      addition, if at any time since the beginning of the four full fiscal quarter
      period preceding the Transaction Date through and including the Transaction
      Date:

     

    (a)           the
      Company or any of its Restricted Subsidiaries shall have engaged in any Asset
      Sale, EBITDA for such period shall be reduced by an amount equal to the EBITDA
      (if positive), or increased by an amount equal to the EBITDA (if negative),
      directly attributable to the Property that is the subject of such Asset Sale
      for
      such period calculated on a pro forma basis

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    as
      if
      such Asset Sale and any related retirement of Indebtedness had occurred on
      the
      first day of such period; or

     

    (b)           (1)           the
      Company or any of its Restricted Subsidiaries shall have acquired or made any
      Investment in any material assets, or

     

    (2)           the
      transaction giving rise to the need to calculate the Consolidated Interest
      Coverage Ratio is such an Investment or acquisition.

     

    EBITDA
      shall be calculated on a pro forma basis as if such Investments or asset
      acquisitions had occurred on the first day of such four fiscal quarter
      period.

     

    “Consolidated
      Interest Expense” means, with respect to any Person for any period, without
      duplication:

     

    (a)           the
      sum of:

     

    (1)           the
      aggregate amount of cash and noncash interest expense (including capitalized
      interest) of such Person and its Restricted Subsidiaries for such period as
      determined on a consolidated basis in accordance with GAAP in respect of
      Indebtedness, including:

     

    (A)           any
      amortization of debt discount,

     

    (B)           net
      costs associated with Interest Rate Protection Agreements (including any
      amortization of discounts),

     

    (C)           the
      interest portion of any deferred payment obligation,

     

    (D)           all
      accrued interest, and

     

    (E)           all
      commissions, discounts, commitment fees, origination fees and other fees and
      charges owed with respect to Bank Credit Facilities and other Indebtedness
      paid
      , accrued or scheduled to be paid or accrued during such period,

     

    (2)           Disqualified
      Stock Dividends of such Person (and of its Restricted Subsidiaries if paid
      to a
      Person other than such Person or its Restricted Subsidiaries) and Preferred
      Stock Dividends of such Person’s Restricted Subsidiaries if paid to a Person
      other than such Person or its other Restricted Subsidiaries,

     

    (3)           the
      portion of any obligation of such Person or its Restricted Subsidiaries in
      respect of any Capital Lease Obligation allocable to interest expense in
      accordance with GAAP,

     

    (4)           the
      portion of any rental obligation of such Person or its Restricted Subsidiaries
      in respect of any Sale and Leaseback Transaction that is
      Indebtedness

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    allocable
      to interest expense (determined as if such obligation were treated as a Capital
      Lease Obligation), and

     

    (5)           to
      the extent any Indebtedness of any other Person (other than Restricted
      Subsidiaries) is Guaranteed by such Person or any of its Restricted
      Subsidiaries, the aggregate amount of interest paid, accrued or scheduled to
      be
      paid or accrued by such other Person during such period attributable to any
      such
      Indebtedness;

     

    less

     

    (b)           to
      the extent included in (a) above, amortization or write-off of deferred
      financing costs (other than debt discounts) of such Person and its Restricted
      Subsidiaries during such period;

     

    in
      the
      case of both (a) and (b) above, after elimination of intercompany accounts
      among
      such Person and its Restricted Subsidiaries and as determined in accordance
      with
      GAAP.

     

    “Consolidated
      Net Income” of any Person means, for any period, the aggregate net income
      (or net loss, as the case may be) of such Person and its Restricted Subsidiaries
      for such period on a consolidated basis, determined in accordance with GAAP;
      provided that there shall be excluded therefrom, without
      duplication:

     

    (a)           items
      classified as extraordinary gains or losses net of tax (less all fees and
      expenses relating thereto);

     

    (b)           any
      gain or loss net of taxes (less all fees and expenses relating thereto) realized
      on the sale or other disposition of Property, including the Capital Stock of
      any
      other Person (but in no event shall this clause (b) apply to any gains or losses
      on the sale in the ordinary course of business of oil, gas or other hydrocarbons
      produced or manufactured);

     

    (c)           the
      net income of any Restricted Subsidiary of such specified Person to the extent
      the transfer to that Person of that income is restricted by contract or
      otherwise, except for any cash dividends or cash distributions actually paid
      by
      such Restricted Subsidiary to such Person during such period;

     

    (d)           the
      net income (or loss) of any other Person in which such specified Person or
      any
      of its Restricted Subsidiaries has an interest (which interest does not cause
      the net income of such other Person to be consolidated with the net income
      of
      such specified Person in accordance with GAAP or is an interest in a
      consolidated Unrestricted Subsidiary), except to the extent of the amount of
      cash dividends or other cash distributions actually paid to such Person or
      its
      consolidated Restricted Subsidiaries by such other Person during such
      period;

     

    (e)           any
      gain or loss, net of taxes, realized on the termination of any employee pension
      benefit plan;

     

    (f)           any
      adjustments of a deferred tax liability or asset pursuant to Statement of
      Financial Accounting Standards No. 109 that result from changes in enacted
      tax
      laws or rates;

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    (g)           the
      cumulative effect of a change in accounting principles;

     

    (h)           any
      write-downs of non-current assets, provided that any ceiling limitation
      write-downs under SEC guidelines shall be treated as capitalized costs, as
      if
      such write-downs had not occurred; and

     

    (i)           any
      non-cash compensation expense realized upon issuance of stock under an employee
      stock purchase plan or for grants of performance shares, stock options or stock
      awards to officers, directors and employees of the Company or any of its
      Restricted Subsidiaries.

     

    In
      addition, notwithstanding the preceding, there shall be excluded from
      Consolidated Net Income, for purposes of Section 4.12, any nonrecurring charges
      relating to any premium or penalty paid or write off of deferred finance costs
      or original issue discount in connection with redeeming or otherwise retiring
      any Indebtedness prior to its Stated Maturity.

     

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

     

    “Disqualified
      Stock” means, with respect to any Person, any Capital Stock that by its
      terms (or by the terms of any security into which it is convertible or for
      which
      it is exchangeable, in either case at the option of the holder thereof) or
      otherwise:

     

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

     

    (b)           is
      or may become redeemable or repurchasable at the option of the holder thereof,
      in whole or in part; or

     

    (c)           is
      convertible or exchangeable at the option of the holder thereof for debt or
      any
      other Disqualified Stock;

     

    in
      each
      case on or prior to the first anniversary of the Stated Maturity of the 71⁄8%
      Notes.

     

    “Disqualified
      Stock Dividends” means all dividends with respect to Disqualified Stock of
      the Company held by Persons other than a Wholly Owned Subsidiary.  The
      amount of any such dividend shall be equal to the quotient of such dividend
      divided by the difference between one and the maximum statutory federal income
      tax rate (expressed as a decimal number between 1 and 0) then applicable to
      the
      Company.

     

    “Dollar-Denominated
      Production Payments” means production payment obligations recorded as
      liabilities in accordance with GAAP, together with all undertakings and
      obligations in connection therewith.

     

    “EBITDA”
      means with respect to any Person for any period, the Consolidated Net Income
      of
      such Person for such period:

     

    (a)           plus
      the sum of, to the extent reflected in the consolidated income statement of
      such
      Person and its Restricted Subsidiaries for such period from which

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    Consolidated
      Net Income is determined and deducted in the determination of such Consolidated
      Net Income, without duplication:

     

    (1)           income
      tax expense (but excluding income tax expense relating to sales or other
      dispositions of Property, including the Capital Stock of any other Person,
      the
      gains from which are excluded in the determination of such Consolidated Net
      Income),

     

    (2)           Consolidated
      Interest Expense,

     

    (3)           depreciation
      and depletion expense,

     

    (4)           amortization
      expense,

     

    (5)           exploration
      expense (if applicable to the Company after the Issue Date), and

     

    (6)           any
      other noncash charges including unrealized foreign exchange losses (excluding,
      however, any such other noncash charge that requires an accrual of or reserve
      for cash charges for any future period);

     

    (b)           less
      the sum of, to the extent reflected in the consolidated income statement of
      such
      Person and its Restricted Subsidiaries for such period from which Consolidated
      Net Income is determined and added in the determination of such Consolidated
      Net
      Income, without duplication:

     

    (1)           income
      tax recovery (excluding, however, income tax recovery relating to sales or
      other
      dispositions of Property, including the Capital Stock of any other Person,
      the
      losses from which are excluded in the determination of such Consolidated Net
      Income), and

     

    (2)           unrealized
      foreign exchange gains.

     

    “Equity
      Offering” means a bona fide underwritten sale to the public of common stock
      of the Company pursuant to an effective registration statement (other than
      a
      Form S-8 or any other form relating to securities issuable under any employee
      benefit plan of the Company) that is filed with the SEC following the Issue
      Date.

     

    “Exchanged
      Properties” means Properties used or useful in the Oil and Gas Business
      received by the Company or a Restricted Subsidiary in trade or as a portion
      of
      the total consideration for other such Properties.

     

    “Exchange
      Rate Contract” means, with respect to any Person, any currency swap
      agreements, forward exchange rate agreements, foreign currency futures or
      options, exchange rate collar agreements, exchange rate insurance and other
      agreements or arrangements, or any combination thereof, entered into by such
      Person in the ordinary course of its business for the purpose of limiting or
      managing exchange rate risks to which such Person is subject.

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    “Exempt
      Foreign Subsidiary” means any Restricted Subsidiary that is a foreign
      corporation if more than 50% of the

     

    (a)           total
      combined voting power of all Voting Stock of the corporation, or

     

    (b)           the
      total value of all Capital Stock of the corporation is owned or is considered
      as
      owned by United States shareholders on any day during the taxable year of the
      foreign corporation,

     

    and,
      that, in any case, is so designated by the Company in an Officers’ Certificate
      delivered to the Trustee, and which Restricted Subsidiary is not a guarantor
      of,
      and has no Lien (other than a Lien with respect to less than two-thirds of
      the
      Capital Stock of an Exempt Foreign Subsidiary) to secure the Bank Credit
      Facilities or any other Indebtedness of the Company or any Restricted Subsidiary
      other than an Exempt Foreign Subsidiary.  A United States shareholder,
      as used in this definition, means any Person who owns or is considered as owning
      10% or more of the total combined voting power of all Voting Stock of the
      foreign corporation.  Ownership is determined by applying the
      attribution rules of ownership in Internal Revenue Code Section
      958.  References to Internal Revenue sections in this definition
      include such sections as amended or superceded, including Treasury regulations
      promulgated thereunder.  The Company may revoke the designation of
      any  Exempt Foreign Subsidiary by notice to the Trustee.

     

    “Fair
      Market Value” means, with respect to any Property to be transferred
      pursuant to any Asset Sale or Sale and Leaseback Transaction or any noncash
      consideration or Property transferred or received by any Person, the fair market
      value of such consideration or other Property as determined by:

     

    (a)           any
      officer of the Company if such fair market value is greater than $2.0 million
      but less than $10.0 million; and

     

    (b)           the
      Board of Directors of the Company as evidenced by a certified resolution
      delivered to the Trustee if such fair market value is equal to or in excess
      of
      $10.0 million.

     

    “GAAP”
      means United States generally accepted accounting principles as in effect on
      the
      Issue Date, unless stated otherwise.

     

    “Guarantee”
      by any Person means any obligation, contingent or otherwise, of such Person
      guaranteeing or having the economic effect of guaranteeing any Indebtedness
      of
      any other Person (a “primary obligor”) in any manner, whether directly or
      indirectly, and including any Lien on the assets of such Person securing
      obligations to pay Indebtedness of the primary obligor, and any obligation
      of
      such Person:

     

    (a)           to
      purchase or pay (or advance or supply funds for the purchase or payment of)
      such
      Indebtedness or any security for the payment of such Indebtedness;

     

    (b)           to
      purchase Property, securities or services for the purpose of assuring the holder
      of such Indebtedness of the payment of such Indebtedness; or

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    (c)           to
      maintain working capital, equity capital or other financial statement condition
      or liquidity of the primary obligor so as to enable the primary obligor to
      pay
      such Indebtedness (and “Guaranteed”, “Guaranteeing” and “Guarantor” shall have
      meanings correlative to the foregoing);

     

    provided,
      however, that a Guarantee by any Person shall not include:

     

    (a)           endorsements
      by such Person for collection or deposit, in either case, in the ordinary course
      of business; or

     

    (b)           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
      under clause (b) of the definition of Permitted Investments.

     

    “Holder”
      means the Person in whose name a Note is registered on the Securities
      Register.

     

    “Incur”
      means, with respect to any Indebtedness or other obligation of any Person,
      to
      create, issue, incur (by conversion, exchange or otherwise), assume, Guarantee
      or become liable (including by reason of a merger or consolidation) in respect
      of such Indebtedness or other obligation or the recording, as required pursuant
      to GAAP or otherwise, of any such Indebtedness or obligation on the balance
      sheet of such Person (and “Incurrence,” “Incurred,” “Incurrable” and “Incurring”
shall have meanings correlative to the foregoing); provided, however,
      that a change in GAAP that results in an obligation of such Person that exists
      at such time, and is not theretofore classified as Indebtedness, becoming
      Indebtedness shall not be deemed an Incurrence of such Indebtedness;
provided further, however, that solely for purposes of determining
      compliance with Section 4.11 amortization of debt discount shall not be deemed
      to be the Incurrence of Indebtedness, provided that in the case of
      Indebtedness sold at a discount, the amount of such Indebtedness shall at all
      times be the aggregate principal amount at Stated Maturity.  For
      purposes of this definition, Indebtedness of the Company or a Restricted
      Subsidiary held by a Wholly Owned Subsidiary shall be deemed to be Incurred
      by
      the Company or such Restricted Subsidiary in the event such Indebtedness is
      transferred to a Person other than the Company or a Wholly Owned
      Subsidiary.

     

    “Indebtedness”
      means at any time (without duplication), with respect to any Person, whether
      recourse is to all or a portion of the assets of such Person, and whether or
      not
      contingent:

     

    (a)           any
      obligation of such Person for borrowed money;

     

    (b)           any
      obligation of such Person evidenced by bonds, debentures, notes, Guarantees
      or
      other similar instruments, including any such obligations Incurred in connection
      with the acquisition of Property, assets or business;

     

    (c)           any
      reimbursement obligation of such Person with respect to letters of credit,
      bankers’ acceptances or similar facilities issued for the account of such
      Person;

     

    (d)           any
      obligation of such Person issued or assumed as the deferred purchase price
      of
      Property or services (other than Trade Accounts Payable);

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    (e)           any
      Capital Lease Obligation of such Person;

     

    (f)           the
      maximum fixed redemption or repurchase price of Disqualified Stock of such
      Person at the time of determination;

     

    (g)           any
      Preferred Stock of any Restricted Subsidiary, provided that such Restricted
      Subsidiary is not a Subsidiary Guarantor;

     

    (h)           any
      payment obligation of such Person under Exchange Rate Contracts, Interest Rate
      Protection Agreements, Oil and Gas Hedging Contracts or under any similar
      agreements or instruments;

     

    (i)           any
      obligation to pay rent or other payment amounts of such Person with respect
      to
      any Sale and Leaseback Transaction to which such Person is a party;

     

    (j)           any
      obligation of the type referred to in clauses (a) through (h) of this definition
      of another Person and all dividends of another Person the payment of which,
      in
      either case, such Person has Guaranteed or is responsible or liable, directly
      or
      indirectly, as obligor, Guarantor or otherwise; and

     

    (k)           all
      obligations of the type referred to in clauses (a) through (i) of this
      definition of another Person secured by any Lien on any Property of such Person
      (whether or not such obligation is assumed by such Person), the amount of such
      obligation being deemed to be the lesser of the value of such Property or the
      amount of the obligation so secured;

     

    provided,
      however, that Indebtedness shall not include Production Payments and
      Reserve Sales.  For purposes of this definition, the maximum fixed
      repurchase price of any Disqualified Stock that does not have a fixed repurchase
      price shall be calculated in accordance with the terms of such Disqualified
      Stock as if such Disqualified Stock were repurchased on any date on which
      Indebtedness shall be required to be determined pursuant to this Indenture;
      provided, however, that if such Disqualified Stock is not then permitted to
      be
      repurchased, the repurchase price shall be the book value of such Disqualified
      Stock.  The amount of Indebtedness of any Person at any date shall be
      the outstanding balance at such date of all unconditional obligations as
      described above and the maximum liability at such date in respect of any
      contingent obligations described above.

     

    “Interest
      Rate Protection Agreement” means, with respect to any Person, any interest
      rate swap agreement, forward rate agreement, interest rate cap or collar
      agreement or other financial agreement or arrangement entered into by such
      Person in the ordinary course of its business for the purpose of limiting or
      managing interest rate risks to which such Person is subject.

     

    “Investment”
      means, with respect to any Person:

     

    (a)           any
      amount paid by such Person, directly or indirectly, to any other Person for
      Capital Stock of, or as a capital contribution to, any other Person;
      or

     

    (b)           any
      direct or indirect loan or advance to any other Person (other than accounts
      receivable of such Person arising in the ordinary course of
      business);

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    provided,
      however, that Investments shall not include:

     

    (1)           in
      the case of clause (a) as used in the definition of “Restricted Payments” only,
      any such amount paid through the issuance of Capital Stock of the Company (other
      than Disqualified Stock); and

     

    (2)           in
      the case of clause (a) or (b), extensions of trade credit on commercially
      reasonable terms in accordance with normal trade practices and any increase
      in
      the equity ownership in any Person resulting from retained earnings of such
      Person.

     

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

     

    “Issue
      Date” means the date on which the Original 71⁄8% Notes first were issued
      under this Indenture.

     

    “Lien”
      means, with respect to any Property, any mortgage or deed of trust, pledge,
      hypothecation, assignment, deposit arrangement, security interest, lien
      (statutory or other), charge, easement, encumbrance, preference, priority or
      other security or similar agreement or preferential arrangement of any kind
      or
      nature whatsoever on or with respect to such Property (including any conditional
      sale or other title retention agreement having substantially the same economic
      effect as any of the foregoing).  For purposes of Section 4.10, a
      Capital Lease Obligation shall be deemed to be secured by a Lien on the Property
      being leased.

     

    “Liquid
      Securities” means securities:

     

    (a)           of
      an issuer that is not an Affiliate of the Company;

     

    (b)           that
      are publicly traded on the New York Stock Exchange, the American Stock Exchange
      or the Nasdaq National Market; and

     

    (c)           as
      to which the Company is not subject to any restrictions on sale or transfer
      (including any volume restrictions under Rule 144 under the Securities Act
      or
      any other restrictions imposed by the Securities Act) or as to which a
      registration statement under the Securities Act covering the resale thereof
      is
      in effect for as long as the securities are held;

     

    provided
      that securities meeting the requirements or clauses (a), (b) and (c) above
      shall be treated as Liquid Securities from the date of receipt thereof until
      and
      only until the earlier of:

     

    (1)           the
      date on which such securities are sold or exchanged for cash or Permitted
      Short-Term Investments, and

     

    (2)           240
      days following the date of receipt of such securities.  If such
      securities are not sold or exchanged for cash or Permitted Short-Term
      Investments within 240 days of receipt thereof, for purposes of determining
      whether the transaction pursuant to which the Company or the Restricted
      Subsidiary received the securities was in

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    compliance
      with Section 4.14 such securities shall be deemed not to have been Liquid
      Securities at any time.

     

    “Material
      Change” means an increase or decrease (except to the extent resulting from
      changes in prices) of more than 30% during a fiscal quarter in the estimated
      discounted future net revenues from proved oil and gas reserves of the Company
      and its Restricted Subsidiaries, calculated in accordance with clause (a)(1)
      of
      the definition of Adjusted Consolidated Net Tangible Assets; provided,
      however, that the following will be excluded from the calculation of
      Material Change:

     

    (a)           any
      acquisitions during the quarter of oil and gas reserves with respect to which
      the Company’s estimate of the discounted future net revenues from proved oil and
      gas reserves has been confirmed by independent petroleum engineers;
      and

     

    (b)           any
      dispositions of Properties during such quarter that were disposed of in
      compliance with Section 4.14.

     

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

     

    “Net
      Available Cash” from an Asset Sale means cash proceeds received therefrom,
      including:

     

    (a)           any
      cash proceeds received by way of deferred payment of principal pursuant to
      a
      note or installment receivable or otherwise, but only as and when received;
      and

     

    (b)           the
      Fair Market Value of Liquid Securities and Permitted Short-Term Investments,
      and
      excluding:

     

    (1)           any
      other consideration received in the form of assumption by the acquiring Person
      of Indebtedness or other obligations relating to the Property that is the
      subject of such Asset Sale, and

     

    (2)           except
      to the extent converted within 240 days after such Asset Sale to cash, Liquid
      Securities or Permitted Short-Term Investments, consideration constituting
      Exchanged Properties or consideration other than as identified in the
      immediately preceding clauses (a) and (b),

     

    in
      each
      case net of:

     

    (a)           all
      legal, title and recording expenses, commissions and other fees and expenses
      Incurred, and all federal, state, foreign and local taxes required to be paid
      or
      accrued as a liability under GAAP as a consequence of such Asset
      Sale;

     

    (b)           all
      payments made on any Indebtedness (but specifically excluding Indebtedness
      of
      the Company and its Restricted Subsidiaries assumed in connection with or in
      anticipation of such Asset Sale) that is secured by any assets subject to such
      Asset Sale, in accordance with the terms of any Lien upon such assets, or that
      must by its terms, or in order to obtain a necessary consent to such Asset
      Sale
      or by applicable law, be repaid out of the proceeds

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    from
      such
      Asset Sale, provided that such payments are made in a manner that results in
      the
      permanent reduction in the balance of such Indebtedness and, if applicable,
      a
      permanent reduction in any outstanding commitment for future Incurrences of
      Indebtedness thereunder;

     

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

     

    (d)           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 Sale and retained by the Company or any Restricted
      Subsidiary after such Asset Sale;

     

    provided,
      however, that if any consideration for an Asset Sale (which would otherwise
      constitute Net Available Cash) is required to be held in escrow pending
      determination of whether a purchase price adjustment will be made, such
      consideration (or any portion thereof) shall become Net Available Cash only
      at
      such time as it is released to such Person or its Restricted Subsidiaries from
      escrow.

     

    “Net
      Working Capital” means:

     

    (a)           all
      current assets of the Company and its Restricted Subsidiaries; less

     

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

     

    in
      each
      case as set forth in consolidated financial statements of the Company prepared
      in accordance with GAAP.

     

    “Non-recourse
      Purchase Money Indebtedness” means Indebtedness (other than Capital Lease
      Obligations) of the Company or any Restricted Subsidiary Incurred in connection
      with the acquisition by the Company or such Restricted Subsidiary in the
      ordinary course of business of fixed assets used in the Oil and Gas Business
      (including office buildings and other real property used by the Company or
      such
      Restricted Subsidiary in conducting its operations) with respect to
      which:

     

    (a)           the
      holders of such Indebtedness agree that they will look solely to the fixed
      assets so acquired that secure such Indebtedness, and neither the Company nor
      any Restricted Subsidiary:

     

    (1)           is
      directly or indirectly liable for such Indebtedness, or

     

    (2)           provides
      credit support, including any undertaking, Guarantee, agreement or instrument
      that would constitute Indebtedness (other than the grant of a Lien on such
      acquired fixed assets); and

     

    (b)           no
      Default or Event of Default with respect to such Indebtedness would cause,
      or
      permit (after notice or passage of time or otherwise), any holder of any
      other

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    Indebtedness
      of the Company or a Restricted Subsidiary to declare a default on such other
      Indebtedness or cause the payment, repurchase, redemption, defeasance or other
      acquisition or retirement for value thereof to be accelerated or payable prior
      to any scheduled principal payment, scheduled sinking fund payment or
      maturity.

     

    “Oil
      and Gas Business” means the business of exploiting, exploring for,
      developing, acquiring, operating, producing, processing, gathering, marketing,
      storing, selling, hedging, treating, swapping, refining and transporting
      hydrocarbons and other related energy businesses.

     

    “Oil
      and Gas Hedging Contract” means, with respect to any Person, any agreement
      or arrangement, or any combination thereof, relating to oil and gas or other
      hydrocarbon prices, transportation or basis costs or differentials or other
      similar financial factors, that is customary in the Oil and Gas Business and
      is
      entered into by such Person in the ordinary course of its business for the
      purpose of limiting or managing risks associated with fluctuations in such
      prices, costs, differentials or similar factors.

     

    “Oil
      and Gas Liens” means:

     

    (a)           Liens
      on any specific Property or any interest therein, construction thereon or
      improvement thereto to secure all or any part of the costs incurred for
      surveying, exploration, drilling, extraction, development, operation,
      production, construction, alteration, repair or improvement of, in, under or
      on
      such Property and the plugging and abandonment of wells located thereon (it
      being understood that, in the case of oil and gas producing properties, or
      any
      interest therein, costs incurred for “development” shall include costs incurred
      for all facilities relating to such properties or to projects, ventures or
      other
      arrangements of which such properties form a part or which relate to such
      properties or interests);

     

    (b)           Liens
      on an oil or gas producing property to secure obligations incurred or guarantees
      of obligations incurred in connection with or necessarily incidental to
      commitments for the purchase or sale of, or the transportation or distribution
      of, the products derived from such Property;

     

    (c)           Liens
      arising under partnership agreements, oil and gas leases, overriding royalty
      agreements, net profits agreements, production payment agreements, royalty
      trust
      agreements, incentive compensation programs for geologists, geophysicists and
      other providers of technical services to the Company or a Restricted Subsidiary,
      master limited partnership agreements, farm-out agreements, farm-in agreements,
      division orders, contracts for the sale, purchase, exchange, transportation,
      gathering or processing of oil, gas or other hydrocarbons, unitizations and
      pooling designations, declarations, orders and agreements, development
      agreements, operating agreements, production sales contracts, area of mutual
      interest agreements, gas balancing or deferred production agreements, injection,
      repressuring and recycling agreements, salt water or other disposal agreements,
      seismic or geophysical permits or agreements, and other agreements that are
      customary in the Oil and Gas Business; provided, however, in all instances
      that
      such Liens are limited to the assets that are the subject of the relevant
      agreement, program, order or contract;

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    (d)           Liens
      arising in connection with Production Payments and Reserve Sales;
      and

     

    (e)           Liens
      on pipelines or pipeline facilities that arise by operation of law.

     

    “Permitted
      Business Investments” means Investments and expenditures 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 actively engaging therein through
      agreements, transactions, interests or arrangements that permit one to share
      risks or costs, comply with regulatory requirements regarding local ownership
      or
      satisfy other objectives customarily achieved through the conduct of Oil and
      Gas
      Business jointly with third parties, including:

     

    (a)           ownership
      interests in oil and gas properties or gathering, transportation, processing,
      storage or related systems; and

     

    (b)           Investments
      and expenditures in the form of or pursuant to operating agreements, processing
      agreements, farm-in agreements, farm-out agreements, development agreements,
      area of mutual interest agreements, unitization agreements, pooling
      arrangements, joint bidding agreements, service contracts, joint venture
agreements, partnership agreements (whether general or limited) and other
      similar agreements (including for limited liability companies) with third
      parties, excluding, however, Investments in corporations other than Restricted
      Subsidiaries.

     

    “Permitted
      Hedging Agreements” means:

     

    (a)           Exchange
      Rate Contracts and Oil and Gas Hedging Contracts; and

     

    (b)           Interest
      Rate Protection Agreements but only to the extent that the stated aggregate
      notional amount thereunder does not exceed 100% of the aggregate principal
      amount of the Indebtedness of the Company or a Restricted Subsidiary covered
      by
      such Interest Rate Protection Agreements at the time such agreements were
      entered into.

     

    “Permitted
      Indebtedness” means any and all of the following:

     

    (a)           Indebtedness
      arising under this Indenture with respect to the Original 71⁄8% Notes and any
      Subsidiary Guaranties relating thereto;

     

    (b)           Indebtedness
      under Bank Credit Facilities, provided that the aggregate principal amount
      of
      all Indebtedness under Bank Credit Facilities, at any one time outstanding
      does
      not exceed the greater of:

     

    (1)           $300.0
      million and

     

    (2)           an
      amount equal to the sum of:

     

    (A)           $150.0
      million, and

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    (B)           25%
      of Adjusted Consolidated Net Tangible Assets determined as of the date of
      Incurrence of such Indebtedness,

     

    and,
      in
      the case of either (1) or (2), plus all interest and fees and other obligations
      thereunder and any Guarantee of such Indebtedness;

     

    (c)           Indebtedness
      of the Company owing to and held by any Wholly Owned Subsidiary and Indebtedness
      of a Restricted Subsidiary owing to and held by the Company or any Wholly Owned
      Subsidiary; provided, however, that any subsequent issue or transfer of Capital
      Stock or other event that results in any such Wholly Owned Subsidiary ceasing
      to
      be a Wholly Owned Subsidiary or any subsequent transfer of any such Indebtedness
      (except to the Company or a Wholly Owned Subsidiary) shall be deemed, in each
      case, to constitute the Incurrence of such Indebtedness by the issuer
      thereof;

     

    (d)           Indebtedness
      in respect of bid, performance, reimbursement or surety obligations issued
      by or
      for the account of the Company or any Restricted Subsidiary in the ordinary
      course of business, including Guarantees and letters of credit functioning
      as or
      supporting such bid, performance, reimbursement or surety obligations (in each
      case other than for an obligation for money borrowed);

     

    (e)           Indebtedness
      under Permitted Hedging Agreements;

     

    (f)           in-kind
      obligations relating to oil or gas balancing positions arising in the ordinary
      course of business;

     

    (g)           Indebtedness
      outstanding on the Issue Date not otherwise permitted in clauses (a) through
      (f)
      above;

     

    (h)           Non-recourse
      Purchase Money Indebtedness;

     

    (i)           Indebtedness
      not otherwise permitted to be Incurred pursuant to this definition (excluding
      any Indebtedness Incurred pursuant to clause (a) of Section 4.11), provided
      that
      the aggregate principal amount of all Indebtedness Incurred pursuant to this
      clause (i), together with all Indebtedness Incurred pursuant to clause (j)
      of
      this definition in respect of Indebtedness previously Incurred pursuant to
      this
      clause (i), at any one time outstanding does not exceed the greater of (1)
      $50.0
      million and (2) 2.0% of Adjusted Consolidated Net Tangible Assets determined
      as
      of the date of Incurrence of such Indebtedness;

     

    (j)           Indebtedness
      Incurred in exchange for, or the proceeds of which are used to
      refinance:

     

    (1)           Indebtedness
      referred to in clauses (a), (g), (h), (i) and (l) of this definition (including
      Indebtedness previously Incurred pursuant to this clause (j)), and

     

    (2)           Indebtedness
      Incurred pursuant to clause (a) of Section 4.11,

     

    provided
      that, in the case of each of the foregoing clauses (1) and (2), such
      Indebtedness is Permitted Refinancing Indebtedness;

     

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    (k)           Indebtedness
      consisting of obligations in respect of purchase price adjustments, indemnities
      or Guarantees of the same or similar matters in connection with the acquisition
      or disposition of Property; and

     

    (l)           Acquired
      Debt Incurred in connection with a transaction meeting either one of the
      financial tests set forth in clause (d) of Section 10.01.

     

    “Permitted
      Investments” means any and all of the following:

     

    (a)           Permitted
      Short-Term Investments;

     

    (b)           Investments
      in property, plant and equipment used in the ordinary course of business and
      Permitted Business Investments;

     

    (c)           Investments
      by any Restricted Subsidiary in the Company;

     

    (d)           Investments
      by the Company or any Restricted Subsidiary in any Restricted
      Subsidiary;

     

    (e)           Investments
      by the Company or any Restricted Subsidiary:

     

    (1)           in
      any Person that will, upon the making of such Investment, become a Restricted
      Subsidiary, or

     

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

     

    (f)           Investments
      in the form of securities received from Asset Sales, provided that such Asset
      Sales are made in compliance with Section 4.14;

     

    (g)           Investments
      in negotiable instruments held for collection; lease, utility and other similar
      deposits; and stock, obligations or other securities received in settlement
      of
      debts (including under any bankruptcy or other similar proceeding) owing to
      the
      Company or any of its Restricted Subsidiaries as a result of foreclosure,
      perfection or enforcement of any Liens or Indebtedness, in each of the foregoing
      cases in the ordinary course of business of the Company or such Restricted
      Subsidiary;

     

    (h)           relocation
      allowances for, and advances and loans in compliance with the Sarbanes-Oxley
      Act
      of 2002 to, officers, directors and employees of the Company or any of its
      Restricted Subsidiaries made in the ordinary course of business, provided such
      items do not exceed in the aggregate $2.0 million at any one time
      outstanding;

     

    (i)           Investments
      intended to promote the Company’s strategic objectives in the Oil and Gas
      Business in an amount not to exceed 6.0% of Adjusted Consolidated Net Tangible
      Assets (determined as of the date of the making of any such Investment) at
      any
      one time outstanding, which Investments shall be deemed to be no longer
      outstanding only to the extent of dividends, repayments of loans or advances
      or
      other transfers of Property or returns of capital

     

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    received
      by the Company or any Restricted Subsidiary from such Persons, provided that,
      for purposes of Section 4.12 the receiving of such amounts by the Company or
      its
      Restricted Subsidiaries does not increase the amount of Restricted Payments
      that
      the Company and its Restricted Subsidiaries may make pursuant to Section
      4.12(c)(5)(A);

     

    (j)           Investments
      made pursuant to Permitted Hedging Agreements of the Company and its Restricted
      Subsidiaries; and

     

    (k)           Investments
      pursuant to any agreement or obligation of the Company or any of its Restricted
      Subsidiaries as in effect on the Issue Date (other than Investments described
      in
      clauses (a) through (j) above), provided that Investments made pursuant to
      this
      clause (k) shall be included in the calculation of Restricted
      Payments.

     

    “Permitted
      Liens” means any and all of the following:

     

    (a)           Liens
      on any Property of the Company and any Subsidiary Guarantor securing
      Indebtedness and other obligations under Bank Credit Facilities that are
      permitted to be Incurred by clause (b) of the definition of Permitted
      Indebtedness;

     

    (b)           Liens
      existing as of the Issue Date;

     

    (c)           Liens
      securing the 71⁄8% Notes, any Subsidiary Guaranties and other obligations arising
      under this Indenture;

     

    (d)           any
      Lien existing on any Property of a Person at the time such Person is merged
      or
      consolidated with or into the Company or a Restricted Subsidiary or becomes
      a
      Restricted Subsidiary (and not incurred in anticipation of or in connection
      with
      such transaction), provided that such Liens are not extended to other Property
      of the Company or the Restricted Subsidiaries;

     

    (e)           any
      Lien existing on any Property at the time of the acquisition thereof (and not
      incurred in anticipation of or in connection with such transaction), provided
      that such Lien is not extended to other Property of the Company or the
      Restricted Subsidiaries;

     

    (f)           any
      Lien incurred in the ordinary course of business incidental to the conduct
      of
      the business of the Company or the Restricted Subsidiaries or the ownership
      of
      their Property, including:

     

    (1)           easements,
      rights of way and similar encumbrances,

     

    (2)           rights
      or title of lessors under leases (other than Capital Lease
      Obligations),

     

    (3)           rights
      of collecting banks having rights of setoff, revocation, refund or chargeback
      with respect to money or instruments of the Company or the Restricted
      Subsidiaries on deposit with or in the possession of such banks,

     

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    (4)           Liens
      imposed by law, including Liens under workers’ compensation or similar
      legislation and mechanics’, carriers’, warehousemen’s, materialmen’s, suppliers’
and vendors’ Liens,

     

    (5)           Liens
      incurred to secure performance of obligations with respect to statutory or
      regulatory requirements, performance or return-of-money bonds, surety bonds
      or
      other obligations of a like nature and incurred in a manner consistent with
      industry practice, and

     

    (6)           Oil
      and Gas Liens,

     

    in
      each
      case that are not incurred in connection with the borrowing of money, the
      obtaining of advances or credit or the payment of the deferred purchase price
      of
      Property (other than Trade Accounts Payable);

     

    (g)           Liens
      for taxes, assessments and governmental charges not yet due or the validity
      of
      which is being contested in good faith by appropriate proceedings, promptly
      instituted and diligently conducted, and for which adequate reserves have been
      established to the extent required by GAAP as in effect at such
      time;

     

    (h)           Liens
      incurred to secure appeal bonds and judgment and attachment Liens, in each
      case
      in connection with litigation or legal proceedings that are being contested
      in
      good faith by appropriate proceedings so long as reserves have been established
      to the extent required by GAAP as in effect at such time and so long as such
      Liens do not encumber assets by an aggregate amount (together with the amount
      of
      any unstayed judgments against the Company or any Restricted Subsidiary but
      excluding any such Liens to the extent securing insured or indemnified judgments
      or orders) in excess of $20.0 million;

     

    (i)           Liens
      securing Permitted Hedging Agreements of the Company and its Restricted
      Subsidiaries;

     

    (j)           Liens
      securing Capital Lease Obligations, provided that such Capital Lease Obligations
      are permitted under Section 4.11 and the Liens attach only to the Property
      acquired with the proceeds of such Capital Lease Obligations;

     

    (k)           Liens
      securing Non-recourse Purchase Money Indebtedness granted in connection with
      the
      acquisition by the Company or any Restricted Subsidiary in the ordinary course
      of business of fixed assets used in the Oil and Gas Business (including office
      buildings and other real property used by the Company or such Subsidiary
      Guarantor in conducting its operations), provided that:

     

    (1)           such
      Liens attach only to the fixed assets acquired with the proceeds of such
      Non-recourse Purchase Money Indebtedness, and

     

    (2)           such
      Non-recourse Purchase Money Indebtedness is not in excess of the purchase price
      of such fixed assets;

     

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    (l)           Liens
      resulting from the deposit of funds or evidences of Indebtedness in trust for
      the purpose of decreasing or legally defeasing Indebtedness of the Company
      or
      any of its Subsidiaries so long as such deposit of funds is permitted under
      Section 4.12;

     

    (m)           Liens
      resulting from a pledge of Capital Stock of a Person that is not a Restricted
      Subsidiary to secure obligations of such Person and any refinancings
      thereof;

     

    (n)           Liens
      to secure any permitted extension, renewal, refinancing, refunding or exchange
      (or successive extensions, renewals, refinancings, refundings or exchanges),
      in
      whole or in part, of or for any Indebtedness secured by Liens referred to in
      clauses (a), (b), (c), (d), (i) and (j) above; provided, however,
      that:

     

    (1)           such
      new Lien shall be limited to all or part of the same Property (including future
      improvements thereon and accessions thereto) subject to the original Lien,
      and

     

    (2)           the
      Indebtedness secured by such Lien at such time is not increased to any amount
      greater than the sum of:

     

    (A)           the
      outstanding principal amount or, if greater, the committed amount of the
      Indebtedness secured by such original Lien immediately prior to such extension,
      renewal, refinancing, refunding or exchange, and

     

    (B)           an
      amount necessary to pay any fees and expenses, including premiums, related
      to
      such refinancing, refunding, extension, renewal or replacement;

     

    (o)           Liens
      in favor of the Company or a Restricted Subsidiary; and

     

    (p)           Liens
      not otherwise permitted by clauses (a) through (o) above incurred in the
      ordinary course of business of the Company and its Restricted Subsidiaries
      and
      encumbering Property having an aggregate Fair Market Value not in excess of
      the
      greater of (1) $10.0 million and (2) 0.5% of Adjusted Consolidated Net Tangible
      Assets as of the date of Incurrence of any such Lien.

     

    Notwithstanding
      anything in this definition to the contrary, the term “Permitted Liens” does not
      include Liens resulting from the creation, incurrence, issuance, assumption
      or
      Guarantee of any Production Payments and Reserve Sales other than:

     

    (a)           any
      such Liens existing as of the Issue Date;

     

    (b)           Production
      Payments and Reserve Sales in connection with the acquisition of any Property
      after the Issue Date, provided that any such Lien created in connection
      therewith is created, incurred, issued, assumed or guaranteed in connection
      with
      the financing of, and within 60 days after the acquisition of, such
      Property;

     

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

    (c)           Production
      Payments and Reserve Sales, other than those described in clauses (a) and (b)
      of
      this sentence, to the extent such Production Payments and Reserve Sales
      constitute Asset Sales made pursuant to and in compliance with Section 4.14;
      and

     

    (d)           incentive
      compensation programs for geologists, geophysicists and other providers of
      technical services to the Company or a Restricted Subsidiary;

     

    provided,
      however, that, in the case of the immediately foregoing clauses (a), (b),
      (c) and (d), any Lien created in connection with any such Production Payments
      and Reserve Sales shall be limited to the Property that is the subject of such
      Product Payments and Reserve Sales.

     

    “Permitted
      Refinancing Indebtedness” means Indebtedness (“New Indebtedness”) Incurred
      in exchange for, or proceeds of which are used to refinance, other Indebtedness
      (“Old Indebtedness”); provided, however, that:

     

    (a)           such
      New Indebtedness is in an aggregate principal amount not in excess of the sum
      of:

     

    (1)           the
      aggregate principal amount then outstanding of the Old Indebtedness (or, if
      such
      Old Indebtedness provides for an amount less than the principal amount thereof
      to be due and payable upon a declaration of acceleration thereof, such lesser
      amount as of the date of determination), and

     

    (2)           an
      amount necessary to pay any fees and expenses, including premiums, related
      to
      such exchange or refinancing;

     

    (b)           such
      New Indebtedness has a Stated Maturity no earlier than the Stated Maturity
      of
      the Old Indebtedness;

     

    (c)           such
      New Indebtedness has an Average Life at the time such New Indebtedness is
      Incurred that is equal to or greater than the Average Life of the Old
      Indebtedness at such time;

     

    (d)           such
      New Indebtedness is subordinated in right of payment to the 71⁄8% Notes (or, if
      applicable, the Subsidiary Guaranties) to at least the same extent, if any,
      as
      the Old Indebtedness; and

     

    (e)           if
      such Old Indebtedness is Non-recourse Purchase Money Indebtedness or
      Indebtedness that refinanced Non-recourse Purchase Money Indebtedness, such
      New
      Indebtedness satisfies clauses (a) and (b) of the definition of “Non-recourse
      Purchase Money Indebtedness.”

     

    “Permitted
      Short-Term Investments” means:

     

    (a)           Investments
      in U.S.  Government Obligations maturing within one year of the date
      of acquisition thereof;

     

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

    (b)           Investments
      in demand accounts, time deposit accounts, certificates of deposit, bankers’
acceptances and money market deposits maturing within one year of the date
      of
      acquisition thereof issued by a bank or trust company that is organized under
      the laws of the United States of America or any State thereof or the District
      of
      Columbia that is a member of the Federal Reserve System having capital, surplus
      and undivided profits aggregating in excess of $500.0 million and whose
      long-term Indebtedness is rated “A” (or higher) according to
      Moody’s;

     

    (c)           Investments
      in deposits available for withdrawal on demand with any commercial bank that
      is
      organized under the laws of any country in which the Company or any Restricted
      Subsidiary maintains an office or is engaged in the Oil and Gas Business,
      provided that:

     

    (1)           all
      such deposits have been made in such accounts in the ordinary course of
      business, and

     

    (2)           such
      deposits do not at any one time exceed $15.0 million in the
      aggregate;

     

    (d)           repurchase
      and reverse repurchase obligations with a term of not more than seven days
      for
      underlying securities of the types described in clause (a) entered into with
      a
      bank meeting the qualifications described in clause (b);

     

    (e)           Investments
      in commercial paper or notes, maturing not more than one year after the date
      of
      acquisition, issued by a corporation (other than an Affiliate of the Company)
      organized and in existence under the laws of the United States of America or
      any
      State thereof or the District of Columbia with a short-term rating at the time
      as of which any Investment therein is made of “P-1” (or higher) according to
      Moody’s or “A-1” (or higher) according to S&P or a long-term rating at the
      time as of which any Investment is made of “A3” (or higher) according to Moody’s
      or “A-” (or higher) according to S&P;

     

    (f)           Investments
      in any money market mutual fund having assets in excess of $250.0 million all
      of
      which consist of other obligations of the types described in clauses (a), (b),
      (d) and (e) hereof; and

     

    (g)           Investments
      in asset-backed securities maturing within one year of the date of acquisition
      thereof with a long-term rating at the time as of which any Investment therein
      is made of “A3” (or higher) according to Moody’s or “A-” (or higher) according
      to S&P.

     

    “Person”
      means any individual, corporation, partnership, joint venture, limited liability
      company, unlimited liability company, trust, estate, unincorporated organization
      or government or any agency or political subdivision thereof.

     

    “Preferred
      Stock” of any Person means Capital Stock of such Person of any class or
      classes (however designated) that ranks prior, as to the payment of dividends
      or
      as to the distribution of assets upon any voluntary or involuntary liquidation,
      dissolution or winding up of such Person, to shares of Capital Stock of any
      other class of such Person.

     

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

    “Preferred
      Stock Dividends” means all dividends with respect to Preferred Stock of
      Restricted Subsidiaries held by Persons other than the Company or a Wholly
      Owned
      Subsidiary.  The amount of any such dividend shall be equal to the
      quotient of such dividend divided by the difference between one and the maximum
      statutory federal income rate (expressed as a decimal number between 1 and
      0)
      then applicable to the issuer of such Preferred Stock.

     

    “Production
      Payments and Reserve Sales” means the grant or transfer by the Company or a
      Restricted Subsidiary to any Person of a royalty, overriding royalty, net
      profits interest, production payment (whether volumetric or dollar denominated),
      partnership or other interest in oil and gas properties, reserves or the right
      to receive all or a portion of the production or the proceeds from the sale
      of
      production attributable to such properties where the holder of such interest
      has
      recourse solely to such production or proceeds of production, subject to the
      obligation of the grantor or transferor to operate and maintain, or cause the
      subject interests to be operated and maintained, in a reasonably prudent manner
      or other customary standard or subject to the obligation of the grantor or
      transferor to indemnify for environmental, title or other matters customary
      in
      the Oil and Gas Business, including any such grants or transfers pursuant to
      incentive compensation programs on terms that are reasonably customary in the
      Oil and Gas Business for geologists, geophysicists and other providers of
      technical services to the Company or a Restricted Subsidiary.

     

    “Property”
      means, with respect to any Person, any interest of such Person in any kind
      of
      property or asset, whether real, personal, or mixed, or tangible or intangible,
      including Capital Stock and other securities issued by any other Person (but
      excluding Capital Stock or other securities issued by such first mentioned
      Person).

     

    “Quotation
      Agent” means the Reference Treasury Dealer selected by the Trustee after
      consultation with the Company.

     

    “Rating
      Category” means:

     

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

     

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

     

    “Rating
      Decline” means a decrease in the rating of the 71⁄8% Notes by either Moody’s
      or S&P by one or more gradations (including gradations within Rating
      Categories as well as between Rating Categories).  In determining
      whether the rating of the 71⁄8% Notes has decreased by one or more gradations,
      gradations within Rating Categories, namely + or – for S&P, and 1, 2, and 3
      for Moody’s, will be taken into account; for example, in the case of S&P, a
      rating decline either from BB+ to BB or BB– to B+ will constitute a decrease of
      one gradation.

     

    “Reference
      Date” means April 1, 2004.

     

    “Reference
      Treasury Dealer” means J.P.Morgan Securities Inc. and its successors and
      assigns and Credit Suisse Securities (USA) LLC and its successors and assigns
      and one other

     

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

    nationally
      recognized investment banking firm selected by the Company that is a primary
      U.S.  Government securities dealer.

     

    “Reference
      Treasury Dealer Quotations” means, with respect to each Reference Treasury
      Dealer and any redemption date, the average, as determined by the Trustee,
      of
      the bid and asked prices for the Comparable Treasury Issue, expressed in each
      case as a percentage of its principal amount, quoted in writing to the Trustee
      by such Reference Treasury Dealer at 5:00 p.m., New York City Time, on the
      third
      Business Day immediately preceding such redemption date.

     

    “Restricted
      Payment” means:

     

    (a)           a
      dividend or other distribution declared or paid on the Capital Stock of the
      Company or to the Company’s shareholders (other than dividends, distributions or
      payments made solely in Capital Stock (other than Disqualified Stock of the
      Company) of the Company or in options, warrants or other rights to purchase
      or
      acquire Capital Stock (other than Disqualified Stock)), or declared and paid
      to
      any Person other than the Company or any of its Restricted Subsidiaries (and,
      if
      such Restricted Subsidiary is not a Wholly Owned Subsidiary, to the other
      shareholders of such Restricted Subsidiary on a pro rata basis or on a basis
      that results in the receipt by the Company or a Restricted Subsidiary of
      dividends or distributions of greater value than it would receive on a pro
      rata
      basis) on the Capital Stock of any Restricted Subsidiary;

     

    (b)           a
      payment made by the Company or any of its Restricted Subsidiaries (other than
      to
      the Company or any Restricted Subsidiary) to purchase, redeem, acquire or retire
      any Capital Stock, or any options, warrants or other rights to acquire Capital
      Stock, of the Company or of a Restricted Subsidiary;

     

    (c)           a
      payment made by the Company or any of its Restricted Subsidiaries to redeem,
      repurchase, legally defease or otherwise acquire or retire for value (including
      pursuant to mandatory repurchase covenants), prior to any scheduled maturity,
      scheduled sinking fund or scheduled mandatory redemption, any Subordinated
      Indebtedness of the Company or a Guarantor, provided that this clause (c) shall
      not include any such payment with respect to:

     

    (1)           any
      such Subordinated Indebtedness to the extent of Excess Proceeds (as defined
      in
      Section 4.14) remaining after compliance with Section 4.14 and to the extent
      required by this Indenture or other agreement or instrument pursuant to which
      such Subordinated Indebtedness was issued, or

     

    (2)           the
      purchase, repurchase or other acquisition of any such subordinated Indebtedness
      purchased in anticipation of satisfying a scheduled maturity, scheduled sinking
      fund or scheduled mandatory redemption, in each case due within one year of
      the
      date of acquisition; or

     

    (d)           an
      Investment (other than a Permitted Investment) by the Company or a Restricted
      Subsidiary in any Person.

     

    “Restricted
      Subsidiary” means any Subsidiary of the Company that has not been
      designated an Unrestricted Subsidiary pursuant Section 4.19.

     

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

    “71⁄8%
      Notes” means the 71⁄8% Senior Notes due 2017 of the Company.

     

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

     

    “Sale
      and Leaseback Transaction” means, with respect to any Person, any direct or
      indirect arrangement (excluding, however, any such arrangement between such
      Person and a Wholly Owned Subsidiary of such Person or between one or more
      Wholly Owned Subsidiaries of such Person) pursuant to which Property is sold
      or
      transferred by such Person or a Restricted Subsidiary of such Person and is
      thereafter leased back from the purchaser or transferee thereof by such Person
      or one of its Restricted Subsidiaries.

     

    “SEC”
      means the Securities and Exchange Commission.

     

    “Senior
      Indebtedness” when used with respect to the Company means the obligations
      of the Company with respect to Indebtedness of the Company, whether outstanding
      on the Issue Date or thereafter Incurred, and any renewal, refunding,
      refinancing, replacement or extension thereof, unless, in the case of any
      particular Indebtedness, the instrument creating or evidencing the same or
      pursuant to which the same is outstanding expressly provides that such
      Indebtedness shall be subordinate in right of payment to the 71⁄8% Notes;
      provided, however, that Senior Indebtedness of the Company shall not
      include:

     

    (a)           Indebtedness
      of the Company to a Subsidiary of the Company;

     

    (b)           Indebtedness
      Incurred in violation of this Indenture;

     

    (c)           amounts
      payable or any other Indebtedness to employees of the Company or any Subsidiary
      of the Company;

     

    (d)           any
      Indebtedness of the Company that, when Incurred and without regard to any
      election under Section 1111(b) of the United States Bankruptcy Code, was without
      recourse to the Company;

     

    (e)           Subordinated
      Indebtedness of the Company;

     

    (f)           obligations
      with respect to any Capital Stock of the Company; and

     

    (g)           in-kind
      obligations relating to net oil and gas balancing positions.

     

    “Senior
      Indebtedness” of any Subsidiary Guarantor has a correlative
      meaning.

     

    “Senior
      Indebtedness Offer” means an offer by us or a Subsidiary Guarantor to
      purchase all or a portion of Senior Indebtedness to the extent required by
      the
      indenture or other agreement or instrument pursuant to which such Senior
      Indebtedness was issued.

     

    “Significant
      Subsidiary” means, at any date of determination, 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.

     

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

    “Stated
      Maturity” when used with respect to any security or any installment of
      principal thereof or interest thereon, means the date specified in such security
      as the fixed date on which the principal of such security or such installment
      of
      principal or interest is due and payable, including pursuant to any mandatory
      redemption provision (but excluding any provision providing for the repurchase
      of such security at the option of the holder thereof upon the happening of
      any
      contingency unless such contingency has occurred).

     

    “Subordinated
      Indebtedness” means Indebtedness of the Company (or a Subsidiary Guarantor)
      that is subordinated or junior in right of payment to the 71⁄8% Notes (or a
      Subsidiary Guaranty, as appropriate) pursuant to a written agreement to that
      effect.

     

    “Subsidiary”
      of a Person means:

     

    (a)           another
      Person that is a corporation a majority of whose Voting Stock is at the time,
      directly or indirectly, owned or controlled by:

     

    (1)           the
      first Person,

     

    (2)           the
      first Person and one or more of its Subsidiaries, or

     

    (3)           one
      or more of the first Person’s Subsidiaries; or

     

    (b)           another
      Person that is not a corporation (x) at least 50% of the Capital Stock of which,
      and (y) the power to elect or direct the election of a majority of the directors
      or other governing body of which are controlled by Persons referred to in clause
      (1), (2) or (3) above.

     

    “Subsidiary
      Guarantors” means, unless released from their Subsidiary Guaranties as
      permitted by this Indenture, (i) Swift Energy Operating, LLC, (ii) any
      Restricted Subsidiary that becomes a guarantor of the 71⁄8% Notes in compliance
      with the provisions of this Indenture and executes a supplemental indenture
      agreeing to be bound by the terms of this Indenture, and (iii) their respective
      successors.

     

    “Subsidiary
      Guaranty” means an unconditional senior guaranty of the 71⁄8% Notes given by
      any Restricted Subsidiary pursuant to the terms of this Indenture.

     

    “Trade
      Accounts Payable” means accounts payable or other obligations of the
      Company or any Restricted Subsidiary to trade creditors created or assumed
      by
      the Company or such Restricted Subsidiary in the ordinary course of business
      in
      connection with the obtaining of goods or services.

     

    “Unrestricted
      Subsidiary” means:

     

    (a)           each
      Subsidiary of the Company that the Company has designated pursuant to Section
      4.19 as an Unrestricted Subsidiary; and

     

    (b)           any
      Subsidiary of an Unrestricted Subsidiary.

     

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

    “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 by the United
      States of America

     

    that,
      in
      either case, are not callable or redeemable at the option of the issuer thereof,
      and shall also include a depository 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 Obligation or a specific payment of principal of or interest
      on
      any such U.S. Government Obligation held by such custodian for the account
      of
      the holder of such depository receipt; provided, however, that (except as
      required by law) such custodian is not authorized to make any deduction from
      the
      amount payable to the holder of such depository receipt from any amount received
      by the custodian in respect of the U.S. Government Obligation or the specific
      payment or principal of or interest on the U.S. Government Obligation evidenced
      by such depository receipt.

     

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

     

    “Voting
      Stock” of any Person means Capital Stock of such Person that ordinarily has
      voting power for the election of directors (or persons performing similar
      functions) of such Person whether at all times or only so long as no senior
      class of securities has such voting power by reason of any
      contingency.

     

    “Wholly
      Owned Subsidiary” means, at any time, a Restricted Subsidiary of the
      Company all the Voting Stock of which (other than directors’ qualifying shares)
      is at such time owned, directly or indirectly, by the Company and its other
      Wholly Owned Subsidiaries.

     

    SECTION
      3.                                Amendments
      to Article III of the Original Indenture

     

    (a)           The
      second paragraph of Section 3.02 of the Original Indenture is amended by adding
      the words “(or, if the redemption price is not then determinable, the manner in
      which it will be determined)” immediately after the words “are to be redeemed”
in the second line thereof.

     

    (b)           The
      fourth paragraph of Section 3.02 of the Original Indenture is amended in its
      entirety to read as follows:

     

    “At
      or
      prior to 11:00 a.m., New York City time, on the redemption date for any
      Registered Securities, the Company shall deposit with the Trustee or with a
      paying agent (or, if the Company is acting as its own paying agent, segregate
      and hold in trust) an amount of money in the Currency in which such Debt
      Securities are denominated (except as provided pursuant to Section 2.03)
      sufficient to pay the redemption price of and accrued interest on (subject
      to
      the

     

    
      
         

      

      
        33

        
          

        

      

      
         

      

    

    right
      of
      Holders of record on the relevant record date to receive interest due on the
      relevant interest payment date) such Registered Securities or any portions
      thereof that are to be redeemed on that date.”

     

    (c)           The
      first sentence of the fifth paragraph of Section 3.02 of the Original Indenture
      is amended in its entirety with respect to the 71⁄8% Notes to read as
      follows:

     

    “If
      less
      than all the 71⁄8% Notes are to be redeemed at any time, selection of 71⁄8% Notes
      for redemption will be made by the Trustee in compliance with the requirements
      of the principal national securities exchange, if any, on which the 71⁄8% Notes
      are listed, or, if the 71⁄8% Notes are not so listed, on a pro rata
      basis.”

     

    (d)           The
      first paragraph of Section 3.03 of the Original Indenture is amended in its
      entirety to read as follows:

     

    “If
      notice of redemption has been given as provided in Section 3.02, the Debt
      Securities or portions of Debt Securities of the series with respect to which
      such notice has been given shall become due and payable on the date and at
      the
      Place or Places of Payment stated in such notice at the applicable redemption
      price, together with any interest accrued to the date fixed for redemption
      (subject to the right of Holders of record on the relevant record date to
      receive interest due on the related interest payment date that is on or prior
      to
      the date of redemption), and on and after said date (unless the Company shall
      default in the payment of such Debt Securities at the applicable redemption
      price, together with any interest accrued to said date) the interest on the
      Debt
      Securities or portions of Debt Securities of any series so called for redemption
      shall cease to accrue and any original issue discount in the case of Original
      Issue Discount Debt Securities shall cease to accrue.  On presentation
      and surrender of such Debt Securities at the Place or Places of Payment in
      said
      notice specified, the said Debt Securities or the specified portions thereof
      shall be paid and redeemed by the Company at the applicable redemption price,
      together with any interest accrued thereon to the date fixed for
      redemption.”

     

    (e)           Article
      III of the Original Indenture is amended with respect to the 71⁄8% Notes by adding
      Section 3.06 and Section 3.07 as follows:

     

    “SECTION
      3.06.  Optional Redemption.  Except as set forth in
      this Section 3.06 or in the final paragraph of Section 4.20, the 71⁄8% Notes will
      not be redeemable at the option of the Company prior to their Stated
      Maturity.  On or after June 1, 2012, the Company may redeem all or any
      portion of the 71⁄8% Notes, upon no less than 30 nor more than 60 days’ prior
      notice, at the redemption prices set forth below, 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 the relevant
      interest payment date).  The following prices are for 71⁄8% Notes
      redeemed during the 12-month period commencing on June 1 of the years set forth
      below, and are expressed as percentages of principal amount:

    

      
        	
                Year

              	
                 

              	
                Redemption
                  Price

              
	
                2012

              	
                 

              	
                103.563%

              
	
                2013

              	 	
                102.375%

              
	
                2014

              	 	
                101.188%

              
	
                2015
                  and thereafter

              	 	
                100.000%

              

      

       

    

    The
      Company may on any one or more occasions prior to June 1, 2010, redeem up to
      35%
      of the aggregate principal amount of the 71⁄8% Notes originally issued with the
      net proceeds of one or more Equity Offerings at a redemption price of 107.125%
      of the principal amount thereof, plus accrued and unpaid interest, if any,
      to
      the date of redemption, subject to the right of Holders of record on the
      relevant record date to receive interest due on the relevant interest payment
      date, provided that at least 65% of the aggregate principal amount of
      the 71⁄8% Notes originally issued remains Outstanding after the occurrence of such
      redemption.  Any such redemption shall occur not later than 90 days
      after the date of the closing of any such Equity Offering upon not less than
      30
      nor more than 60 days’ prior notice.  The redemption shall be made in
      accordance with procedures set forth in this Indenture.

     

    At
      any
      time prior to June 1, 2012, the Company will be entitled, at its option, to
      redeem all or any portion of the 71⁄8% Notes at a redemption price equal to 100%
      of the principal amount of the 71⁄8% Notes plus the Applicable Premium as of, and
      accrued and unpaid interest to, the redemption date (subject to the right of
      Holders on the relevant record date to receive interest due on the relevant
      interest payment date).  Notice of such redemption must be mailed by
      first-class mail to each Holder’s registered address, not less than 30 nor more
      than 60 days prior to the redemption date.”

     

    SECTION
      3.07.  No Mandatory Sinking Fund.  There will be no
      mandatory sinking fund payments for the 71⁄8% Notes.

     

    SECTION
      4.   Amendments to Article IV of the Original
      Indenture

     

    (a)           Sections
      4.07, 4.08 and 4.09 of the Original Indenture shall not be applicable to the
      71⁄8%
      Notes.

     

    (b)           Section
      4.10 of the Original Indenture is amended in its entirety with respect to the
      71⁄8% Notes to read as follows:

     

    “SECTION
      4.10.  Limitation on Liens.  The Company will not,
      and will not permit any Restricted Subsidiary to, directly or indirectly, enter
      into, create, Incur, assume or suffer to exist any Lien, other than Permitted
      Liens, on or with respect to any Property of the Company or such Restricted
      Subsidiary, whether owned on the Issue Date or acquired after the Issue Date,
      or
      any interest therein or any income or profits therefrom, unless the 71⁄8% Notes or
      any Subsidiary

     

    
      
         

      

      
        34

        
          

        

      

      
         

      

    

    Guaranty
      of such Restricted Subsidiary are secured equally and ratably with, or prior
      to,
      any and all other obligations secured by such Lien.”

     

    (c)           Article
      IV of the Original Indenture is amended with respect to the 71⁄8% Notes by adding
      Sections 4.11 through 4.20, inclusive, as follows:

     

    “SECTION
      4.11.  Limitation on Indebtedness.  The Company will
      not, and will not permit any of its Restricted Subsidiaries to, directly or
      indirectly, Incur any Indebtedness unless, after giving pro forma effect to
      the
      Incurrence of such Indebtedness and the receipt and application of the proceeds
      thereof, no Default or Event of Default would occur as a consequence of, or
      be
      continuing following, such Incurrence and application and either:

     

    (a)           after
      giving pro forma effect to such Incurrence and application, the Consolidated
      Interest Coverage Ratio would exceed 2.25 to 1.0; or

     

    (b)           such
      Indebtedness is Permitted Indebtedness.

     

    For
      purposes of determining compliance with this Section 4.11, in the event that
      an
      item of proposed Indebtedness meets the criteria of more than one of the
      categories of Permitted Indebtedness described in clauses (a) through (l) of
      the
      definition of Permitted Indebtedness, or is entitled to be Incurred pursuant
      to
      clause (a) of this Section 4.11, the Company will be permitted to classify
      such
      item of Indebtedness on the date of its Incurrence, or later reclassify all
      or a
      portion of such item of Indebtedness, in any manner that complies with this
      Section 4.11.

     

    SECTION
      4.12.  Limitation on Restricted Payments.  The
      Company will not, and will not permit any of its Restricted Subsidiaries to,
      directly or indirectly, make any Restricted Payment if, at the time of and
      after
      giving effect to the proposed Restricted Payment:

     

    (a)           any
      Default or Event of Default would have occurred and be continuing;

     

    (b)           the
      Company could not Incur at least $1.00 of additional Indebtedness pursuant
      to
      clause (a) of Section 4.11; or

     

    (c)           the
      aggregate amount expended or declared for all Restricted Payments from the
      Issue
      Date would exceed the sum of (without duplication):

     

    (1)           50%
      of the aggregate Consolidated Net Income of the Company accrued during the
      period (treated as one accounting period) commencing on the Reference Date
      and
      ending on the last day of the fiscal quarter immediately preceding the date
      of
      such proposed Restricted Payment (or, if such aggregate Consolidated Net Income
      shall be a loss, minus 100% of such loss),

     

    (2)           the
      aggregate net cash proceeds, or the Fair Market Value of Property other than
      cash (provided that, in the case of Property that is

     

    
      
         

      

      
        35

        
          

        

      

      
         

      

    

    Capital
      Stock, such Capital Stock falls within the meaning of clause (b) of the
      definition of “Additional Assets”), received by the Company from the issuance or
      sale (other than to a Subsidiary of the Company or an employee stock ownership
      plan or trust established by the Company or any such Subsidiary for the benefit
      of their employees) by the Company of its Capital Stock (other than Disqualified
      Stock) after the Reference Date, net of attorneys’ fees, accountants’ fees,
      underwriters’ or placement agents’ fees, discounts or commissions and brokerage,
      consultant and other fees actually Incurred in connection with such issuance
      or
      sale and net of taxes paid or payable as a result thereof,

     

    (3)           the
      aggregate net cash proceeds, or the Fair Market Value of Property other than
      cash, received by the Company as capital contributions to the Company (other
      than from a Subsidiary of the Company) on or after the Issue Date,

     

    (4)           the
      aggregate net cash proceeds received by the Company from the issuance or sale
      (other than to any Subsidiary of the Company or an employee stock ownership
      plan
      or trust established by the Company or any such Subsidiary for the benefit
      of
      their employees) on or after the Issue Date of convertible Indebtedness that
      has
      been converted into or exchanged for Capital Stock (other than Disqualified
      Stock) of the Company, together with the aggregate cash received by the Company
      at the time of such conversion or exchange or received by the Company from
      any
      conversion or exchange of convertible Indebtedness issued or sold (other than
      to
      any Subsidiary of the Company or an employee stock ownership plan or trust
      established by the Company or any such Subsidiary for the benefit of their
      employees) prior to the Issue Date, excluding:

     

    (A)           any
      such Indebtedness issued or sold to the Company or a Subsidiary of the Company
      or an employee stock ownership plan or trust established by the Company or
      any
      such Subsidiary for the benefit of their employees, and

     

    (B)           the
      aggregate amount of any cash or other Property distributed by the Company or
      any
      Restricted Subsidiary upon any such conversion or exchange,

     

    (5)           to
      the extent not otherwise included in the Company’s Consolidated Net Income, an
      amount equal to the net reduction in Investments made by the Company and its
      Restricted Subsidiaries subsequent to the Issue Date in any Person resulting
      from:

     

    (A)           payments
      of interest on debt, dividends, repayments of loans or advances or other
      transfers or distributions of Property, in each case to the Company or any
      Restricted Subsidiary from any

     

    
      
         

      

      
        36

        
          

        

      

      
         

      

    

    Person
      other than the Company or a Restricted Subsidiary, and in an amount not to
      exceed the book value of such Investments previously made in such Person that
      were treated as Restricted Payments, or

     

    (B)           the
      designation of any Unrestricted Subsidiary as a Restricted Subsidiary, and
      in an
      amount not to exceed the lesser of:

     

    (i)           the
      book value of all Investments previously made in such Unrestricted Subsidiary
      that were treated as Restricted Payments, and

     

    (ii)           the
      Fair Market Value of the Company’s and its Restricted Subsidiaries’ interest in
      such Unrestricted Subsidiary, and

     

    (6)           $30.0
      million.

     

    The
      limitations set forth in the preceding paragraph will not prevent the Company
      or
      any Restricted Subsidiary from making the following Restricted Payments so
      long
      as, at the time thereof, no Default or Event of Default shall have occurred
      and
      be continuing:

     

    (a)           the
      payment of any dividend on Capital Stock of the Company or any Restricted
      Subsidiary within 60 days after the declaration thereof, if at such declaration
      date such dividend could have been paid in compliance with the preceding
      paragraph;

     

    (b)           the
      repurchase, redemption or other acquisition or retirement for value of any
      Capital Stock of the Company or any of its Subsidiaries pursuant to the terms
      of
      agreements (including employment agreements) or plans (including employee stock
      ownership plans but excluding other plans to purchase such Capital Stock in
      open
      market transactions, together with, in the case of employee stock ownership
      plans, loans to or Investments therein in an amount sufficient to fund such
      repurchase, redemption or other acquisition or retirement by such plan) approved
      by the Company’s Board of Directors, including any such repurchase, redemption,
      acquisition or retirement of shares of such Capital Stock that is deemed to
      occur upon the exercise of stock options or vesting of restricted stock grants
      or similar rights if such shares represent all or a portion of the exercise
      price or are netted out or surrendered in connection with satisfying Federal
      income tax obligations; provided, however, that the aggregate amount of such
      repurchase, redemptions, acquisitions and retirements (but disregarding any
      transaction that does not result in the payment of cash by the Company or any
      Restricted Subsidiary to or on behalf of another Person) shall not exceed the
      sum of:

     

    (1)             $7.5
      million in any twelve-month period, and

     

    
      
         

      

      
        37

        
          

        

      

      
         

      

    

    (2)             the
      aggregate net proceeds, if any, received by the Company during such twelve-month
      period from any issuance of such Capital Stock pursuant to such agreements
      or
      plans;

     

    (c)           the
      purchase, redemption or other acquisition or retirement for value of any Capital
      Stock of the Company or any Restricted Subsidiary, in exchange for, or out
      of
      the aggregate net cash proceeds of, a substantially concurrent issuance and
      sale
      (other than to a Subsidiary of the Company or an employee stock ownership plan
      or trust established by the Company or any of its Subsidiaries, for the benefit
      of their employees) of Capital Stock of the Company (other than Disqualified
      Stock);

     

    (d)           the
      purchase, redemption, legal defeasance, acquisition or retirement for value
      of
      any Subordinated Indebtedness in exchange for, or out of the 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 a Subsidiary
      of the Company or an employee stock ownership plan or trust established by
      the
      Company or any such Subsidiary for the benefit of their employees);

     

    (e)           the
      making of any principal payment on or the repurchase, redemption, legal
      defeasance or other acquisition or retirement for value of any Subordinated
      Indebtedness in exchange for, or out of the net proceeds of a substantially
      concurrent Incurrence (other than a sale to a Subsidiary of the Company) of
      (i)
      any other Subordinated Indebtedness so long as such new Indebtedness is
      Permitted Refinancing Indebtedness or (ii) with respect only to the Company’s
      93⁄8% senior subordinated notes due 2012, Senior Indebtedness, so long as at the
      time of and after giving effect to such Incurrence, the Company could Incur
      at
      least $1.00 of Indebtedness pursuant to clause (a) of Section 4.11 of this
      Indenture.

     

    (f)           loans,
      in an aggregate principal amount at any one time outstanding of not more than
      $2.0 million, made to officers, directors or employees of the Company or any
      Restricted Subsidiary approved by the Board of Directors (or by a duly
      authorized officer) and in compliance with the Sarbanes-Oxley Act of 2002,
      the
      net cash proceeds of which are used solely:

     

    (1)           to
      purchase common stock of the Company in connection with a restricted stock
      or
      employee stock purchase plan, or to exercise stock options received pursuant
      to
      an employee or director stock option plan or other incentive plan, in a
      principal amount not to exceed the purchase price of such common stock or the
      exercise price of such stock options, or

     

    (2)           to
      refinance loans, together with accrued interest thereon, made pursuant to item
      (1) of this clause (f).

     

    
      
         

      

      
        38

        
          

        

      

      
         

      

    

    The
      actions described in clauses (a) and (b) of this paragraph shall be included
      in
      the calculation of the amount of Restricted Payments.  The actions
      described in clauses (c), (d), (e) and (f) of this paragraph shall be excluded
      in the calculation of the amount of Restricted Payments, provided that the
      net
      cash proceeds from any issuance or sale of Capital Stock or Indebtedness of
      the
      Company pursuant to such clause (c), (d) or (e) shall be excluded from any
      calculations pursuant to clause (2), (3) or (4) under the immediately preceding
      paragraph.

     

    SECTION
      4.13.  [This Section is intentionally omitted.]

     

    SECTION
      4.14.  Limitation on Asset Sales.  The Company will
      not, and will not permit any Restricted Subsidiary to, consummate any Asset
      Sale
      unless:

     

    (a)           the
      Company or such Restricted Subsidiary, as the case may be, receives
      consideration at the time of such Asset Sale at least equal to the Fair Market
      Value of the Property subject to such Asset Sale; and

     

    (b)           all
      of the consideration paid to the Company or such Restricted Subsidiary in
      connection with such Asset Sale is in the form of cash, Permitted Short-Term
      Investments, Liquid Securities, Exchange Properties or the assumption by the
      purchaser of liabilities of the Company (other than liabilities of the Company
      that are by their terms subordinated to the 71⁄8% Notes) or liabilities of any
      Subsidiary Guarantor that made such Asset Sale (other than liabilities of a
      Subsidiary Guarantor that are by their terms subordinated to such Subsidiary
      Guarantor’s Subsidiary Guaranty), in each case as a result of which the Company
      and its remaining Restricted Subsidiaries are no longer liable for such
      liabilities, such consideration being defined as “Permitted Consideration”;
      provided, however, that the Company and its Restricted Subsidiaries shall be
      permitted to receive Property other than Permitted Consideration, so long as
      the
      aggregate Fair Market Value of all such Property other than Permitted
      Consideration received from Asset Sales and held by the Company or any
      Restricted Subsidiary at any one time shall not exceed 10.0% of Adjusted
      Consolidated Net Tangible Assets.

     

    The
      Net
      Available Cash from Asset Sales by the Company or a Restricted Subsidiary may
      be
      applied by the Company or such Restricted Subsidiary, to the extent the Company
      or such Restricted Subsidiary elects (or is required by the terms of any Senior
      Indebtedness of the Company or a Subsidiary Guarantor), to:

     

    (a)           prepay,
      repay or purchase Senior Indebtedness of the Company or a Subsidiary Guarantor
      (in each case excluding Indebtedness owed to the Company or an Affiliate of
      the
      Company);

     

    
      
         

      

      
        39

        
          

        

      

      
         

      

    

    (b)           to
      reinvest in Additional Assets (including by means of an Investment in Additional
      Assets by a Restricted Subsidiary with Net Available Cash received by the
      Company or another Restricted Subsidiary);

     

    (c)           purchase
      71⁄8% Notes or purchase both 71⁄8% Notes and one or more series or issues of other
      Senior Indebtedness on a pro rata basis (excluding 71⁄8% Notes and Pari Passu
      Indebtedness owed to the Company or any of its Affiliates) in accordance with
      the next paragraph; or

     

    (d)           enter
      into a bona fide binding contract with a Person other than an Affiliate of
      the
      Company to apply the Net Available Cash pursuant to clause (b) above, provided
      that such binding contract shall be treated as a permitted application of the
      Net Available Cash from the date of such contract until the earlier
      of

     

    (1)             the
      date on which such reinvestment is consummated, and

     

    (2)             the
      90th day following the expiration of the 365-day period referred to in the
      next
      following sentence.

     

    Any
      Net
      Available Cash from an Asset Sale not applied in accordance with the preceding
      paragraph within 365 days from the date of such Asset Sale shall constitute
      “Excess Proceeds.” When the aggregate amount of Excess Proceeds exceeds $25.0
      million, the Company will be required to make an offer (a “Prepayment Offer”) to
      purchase 71⁄8% Notes having an aggregate principal amount equal to the aggregate
      amount of Excess Proceeds at a purchase price equal to 100% of the principal
      amount of such 71⁄8% Notes plus accrued and unpaid interest, if any, to the
      Purchase Date (as defined) in accordance with the procedures (including
      proration in the event of oversubscription) set forth in this Indenture, but,
      if
      the terms of any other Senior Indebtedness require that a Senior Indebtedness
      Offer be made contemporaneously with the Prepayment Offer, then the Excess
      Proceeds shall be prorated between the Prepayment Offer and such Senior
      Indebtedness Offer in accordance with the aggregate Outstanding principal
      amounts of the 71⁄8% Notes and such other Senior Indebtedness, and the aggregate
      principal amount of 71⁄8% Notes for which the Prepayment Offer is made shall be
      reduced accordingly.  If the aggregate principal amount of 71⁄8% Notes
      tendered by Holders thereof exceeds the amount of available Excess Proceeds,
      then such Excess Proceeds will be allocated pro rata according to the principal
      amount of the 71⁄8% Notes tendered and the Trustee will select the 71⁄8% Notes to be
      purchased in accordance with this Indenture.  To the extent that any
      portion of the amount of Excess Proceeds remains after compliance with the
      second sentence of this paragraph and provided that all Holders of 71⁄8% Notes
      have been given the opportunity to tender their 71⁄8% Notes for purchase as
      described in the following paragraph in accordance with this Indenture, the
      Company and its Restricted

     

    
      
         

      

      
        40

        
          

        

      

      
         

      

    

    Subsidiaries
      may use such remaining amount for purposes permitted by this Indenture and
      the
      amount of Excess Proceeds will be reset to zero.

     

    Within
      30
      days after the 365th day following the date of an Asset Sale, the Company shall,
      if it is obligated to make an offer to purchase the 71⁄8% Notes pursuant to the
      preceding paragraph, send a written Prepayment Offer notice, by first-class
      mail, to the Holders of the 71⁄8% Notes (the “Prepayment Offer Notice”),
      accompanied by such information regarding the Company and its Subsidiaries
      as
      the Company believes will enable such Holders of the 71⁄8% Notes to make an
      informed decision with respect to the Prepayment Offer.  The
      Prepayment Offer Notice will state, among other things:

     

    (a)           that
      the Company is offering to purchase 71⁄8% Notes pursuant to the provisions of this
      Indenture;

     

    (b)           that
      any 71⁄8% Note (or any portion thereof) accepted for payment (and duly paid on the
      Purchase Date) pursuant to the Prepayment Offer shall cease to accrue interest
      on the Purchase Date;

     

    (c)           that
      any 71⁄8% Notes (or portions thereof) not properly tendered will continue to
      accrue interest;

     

    (d)           the
      purchase price and purchase date, which shall be, subject to any contrary
      requirements of applicable law, no less than 30 days nor more than 60 days
      after
      the date the Prepayment Offer Notice is mailed (the “Purchase
      Date”);

     

    (e)           the
      aggregate principal amount of 71⁄8% Notes to be purchased;

     

    (f)           a
      description of the procedure that Holders of 71⁄8% Notes must follow in order to
      tender their 71⁄8% Notes for payment; and

     

    (g)           all
      other instructions and materials necessary to enable Holders to tender 71⁄8% Notes
      pursuant to the Prepayment Offer.

     

    The
      Company will comply, to the extent applicable, with the requirements of Section
      14(e) under the Exchange Act and any other securities laws or regulations
      thereunder to the extent such laws and regulations are applicable in connection
      with the purchase of 71⁄8% Notes as described above.  To the extent that
      the provisions of any securities laws or regulations conflict with the
      provisions relating to the Prepayment Offer, the Company will comply with the
      applicable securities laws and regulations and will not be deemed to have
      breached its obligations described above by virtue thereof.

     

    SECTION
      4.15.  Covenant Termination.  If at any time (a) the
      rating assigned to the 71⁄8% Notes by each of S&P and Moody’s is an Investment
      Grade Rating and (b) no Default has occurred and is continuing, the Company
      and
      its

     

    
      
         

      

      
        41

        
          

        

      

      
         

      

    

    Restricted
      Subsidiaries will no longer be subject to the covenants set forth in Sections
      4.11, 4.12, 4.14, 4.16, 4.17 and 4.18, and clause (d) of Section
      10.01.

     

    SECTION
      4.16.  Limitation on Transactions with
      Affiliates.  The Company will not, and will not permit any of its
      Restricted Subsidiaries to, directly or indirectly, conduct any business or
      enter into any transaction or series of transactions (including the sale,
      transfer, disposition, purchase, exchange or lease of Property, the making
      of
      any Investment, the giving of any Guarantee or the rendering of any service)
      with or for the benefit of any Affiliate of the Company (other than the Company
      or a Wholly Owned Subsidiary), unless:

     

    (a)           such
      transaction is set forth in writing;

     

    (b)           such
      transaction or series of transactions is on terms no less favorable to the
      Company or such Restricted Subsidiary than those that could be obtained in
      a
      comparable arm’s-length transaction with a Person that is not an Affiliate of
      the Company or such Restricted Subsidiary; and

     

    (c)           with
      respect to a transaction or series of transactions involving aggregate payments
      by or to the Company or such Restricted Subsidiary having a Fair Market Value
      equal to or in excess of:

     

    (1)             $15.0
      million but less than $25.0 million, the Board of Directors of the Company
      (including a majority of the disinterested members of such Board of Directors)
      approves such transaction or series of transactions and certifies that such
      transaction or series of transactions complies with clause (b) of this
      paragraph, as evidenced by a certified resolution delivered to the Trustee,
      or

     

    (2)             $25.0
      million,

     

    (A)           the
      Company receives from an independent, nationally recognized investment banking
      firm or appraisal firm, in either case specializing or having a specialty in
      the
      type and subject matter of the transaction (or series of transactions) at issue,
      a written opinion that such transaction (or series of transactions) is fair,
      from a financial point of view, to the Company or such Restricted Subsidiary,
      and

     

    (B)           such
      Board of Directors (including a majority of the disinterested members of the
      Board of Directors of the Company) approves such transaction or series of
      transactions and certifies that such transaction or series of transactions
      complies with clause (b) of this paragraph, as evidenced by a certified
      resolution delivered to the Trustee.

     

    
      
         

      

      
        42

        
          

        

      

      
         

      

    

    The
      preceding limitations of this Section 4.16 do not apply to:

     

    (a)           the
      payment of reasonable and customary regular fees to directors of the Company
      or
      any of its Restricted Subsidiaries who are not employees of the Company or
      any
      of its Restricted Subsidiaries;

     

    (b)           indemnities
      of officers and directors of the Company or any Subsidiary consistent with
      such
      Person’s charter, bylaws and applicable statutory provisions;

     

    (c)           any
      issuance of securities, or other payments, awards or grants in cash, securities
      or otherwise pursuant to, or the funding of, employment arrangements, stock
      options and employee stock purchase and ownership plans approved by the Board
      of
      Directors of the Company;

     

    (d)           loans
      made in compliance with the Sarbanes-Oxley Act of 2002:

     

    (1)             to
      officers, directors or employees of the Company or any Restricted Subsidiary
      approved by the Board of Directors of the Company, the net proceeds of which
      are
      used solely to purchase common stock of the Company in connection with a
      restricted stock or employee stock purchase plan, or to exercise stock options
      received pursuant to an employee or director stock option plan or other
      incentive plan, in a principal amount not to exceed the purchase price of such
      common stock or the exercise price of such stock options, or

     

    (2)             to
      refinance loans, together with accrued interest thereon, made pursuant to this
      clause (d);

     

    (e)           advances
      and loans made in compliance with the Sarbanes-Oxley Act of 2002 to officers,
      directors and employees of the Company or any Subsidiary in the ordinary course
      of business (including, without limitation, non-cash loans for the purchase
      of
      joint interests in exploratory and developmental oil and gas prospects or other
      similar ventures offered by the Company), provided such loans and advances
      (excluding loans or advances made pursuant to the preceding clause (d)) do
      not
      exceed $2.0 million at any one time outstanding;

     

    (f)           any
      Restricted Payment permitted to be paid pursuant to Section 4.12;

     

    (g)           any
      transaction or series of transactions between the Company and one or more
      Restricted Subsidiaries or between two or more Restricted Subsidiaries in the
      ordinary course of business, provided that no more than 10% of the total voting
      power of the Voting Stock of any such

     

    
      
         

      

      
        43

        
          

        

      

      
         

      

    

    Restricted
      Subsidiary is owned by an Affiliate of the Company (other than a Restricted
      Subsidiary); and

     

    (h)           any
      transaction or series of transactions pursuant to any agreement or obligation
      of
      the Company or any of its Restricted Subsidiaries in effect on the Issue
      Date.

     

    SECTION
      4.17.  Limitation on Restrictions on Distributions from Restricted
      Subsidiaries.  The Company will not, and will not permit any of
      its Restricted Subsidiaries to, directly or indirectly, create or otherwise
      cause or permit to exist or become effective any consensual encumbrance or
      restriction on the legal right of any Restricted Subsidiary to:

     

    (a)           pay
      dividends, in cash or otherwise, or make any other distributions on or in
      respect of its Capital Stock, or pay any Indebtedness or other obligation owed,
      to the Company or any other Restricted Subsidiary;

     

    (b)           make
      loans or advances to the Company or any other Restricted Subsidiary;
      or

     

    (c)           transfer
      any of its Property to the Company or any other Restricted
      Subsidiary.

     

    Such
      limitation will not apply:

     

    (1)             with
      respect to clauses (a), (b) and (c), to encumbrances and
      restrictions:

     

    (A)           in
      agreements and instruments (including any Bank Credit Facilities) as in effect
      on the Issue Date,

     

    (B)           relating
      to Indebtedness of a Restricted Subsidiary and existing at the time it became
      a
      Restricted Subsidiary if such encumbrance or restriction was not created in
      anticipation of or in connection with the transactions pursuant to which such
      Restricted Subsidiary became a Restricted Subsidiary, or

     

    (C)           that
      result from the renewal, refinancing, extension or amendment of an agreement
      that is the subject of clause (c)(1)(A) or (B) above or clause (c)(2)(A) or
      (B)
      below, provided that such encumbrance or restriction is not materially less
      favorable to the Holders of 71⁄8% Notes than those under or pursuant to the
      agreement so renewed, refinanced, extended or amended, as determined in good
      faith by the Board of Directors of the Company and,

     

    
      
         

      

      
        44

        
          

        

      

      
         

      

    

    (2)           with
      respect to clause (c) only, to:

     

    (A)           restrictions
      pursuant to Liens permitted to be Incurred and secured without also securing
      the
      71⁄8% Notes under Section 4.10 and that limit the right of the debtor to dispose
      of the Property subject to such Lien,

     

    (B)           any
      encumbrance or restriction applicable to Property at the time it is acquired
      by
      the Company or a Restricted Subsidiary, so long as such encumbrance or
      restriction relates solely to the Property so acquired and was not created
      in
      anticipation of or in connection with such acquisition,

     

    (C)           customary
      provisions restricting subletting or assignment of leases and customary
      provisions in other agreements that restrict assignment of such agreements
      or
      rights thereunder, and

     

    (D)           customary
      restrictions contained in asset sale agreements limiting the transfer of such
      assets pending the closing of such sale.

     

    SECTION
      4.18.  Future Subsidiary Guarantors.  The Company
      shall cause each Restricted Subsidiary (except an Exempt Foreign Subsidiary)
      that:

     

    (a)           Incurs
      Indebtedness or issues Preferred Stock following the Issue Date; or

     

    (b)           has
      Indebtedness or Preferred Stock outstanding on the date on which such Restricted
      Subsidiary becomes a Restricted Subsidiary,

     

    to
      execute and deliver to the Trustee a supplemental indenture providing for a
      Subsidiary Guaranty pursuant to Section 14.06 at the time such Restricted
      Subsidiary Incurs such Indebtedness or becomes a Restricted Subsidiary;
      provided, however, that such Restricted Subsidiary shall not be required to
      deliver a supplemental indenture providing for a Subsidiary Guaranty if the
      aggregate amount of such Indebtedness or Preferred Stock, together with all
      other Indebtedness and Preferred Stock then outstanding among Restricted
      Subsidiaries (including Exempt Foreign Subsidiaries) that are not Subsidiary
      Guarantors, is less than $10.0 million.

     

    Any
      Subsidiary Guarantor that no longer has any outstanding Indebtedness or
      Preferred Stock or that again qualifies as an Exempt Foreign Subsidiary shall
      be
      released from and relieved of its obligations under its Subsidiary Guaranty
      upon
      execution and delivery of a supplemental indenture in form satisfactory to
      the
      Trustee.

     

    
      
         

      

      
        45

        
          

        

      

      
         

      

    

    SECTION
      4.19.  Restricted and Unrestricted
      Subsidiaries.  Unless defined or designated as an Unrestricted
      Subsidiary, any Person that becomes a Subsidiary of the Company or any of its
      Restricted Subsidiaries shall be classified as a Restricted Subsidiary subject
      to the provisions of the next paragraph.  The Company may designate a
      Subsidiary (including a newly formed or newly acquired Subsidiary) of the
      Company or any of its Restricted Subsidiaries as an Unrestricted Subsidiary
      if:

     

    (a)           such
      Subsidiary does not at such time own any Capital Stock or Indebtedness of,
      or
      own or hold any Lien on any Property of, the Company or any other Restricted
      Subsidiary;

     

    (b)           such
      Subsidiary does not at such time have any Indebtedness or other obligations
      that, if in default, would result (with the passage of time or notice or
      otherwise) in a default on any Indebtedness of the Company or any Restricted
      Subsidiary; and

     

    (c)           (1)           such
      designation is effective immediately upon such Subsidiary becoming a Subsidiary
      of the Company or of a Restricted Subsidiary,

     

    (2)             the
      Subsidiary to be so designated has total assets of $1,000 or less,
      or

     

    (3)             if
      such Subsidiary has assets greater than $1,000, then such redesignation as
      an
      Unrestricted Subsidiary is deemed to constitute a Restricted Payment in an
      amount equal to the Fair Market Value of the Company’s direct and indirect
      ownership interest in such Subsidiary, and such Restricted Payment would be
      permitted to be made at the time of such designation under Section
      4.12.

     

    Except
      as
      provided in the immediately preceding sentence, no Restricted Subsidiary may
      be
      redesignated as an Unrestricted Subsidiary.  The designation of an
      Unrestricted Subsidiary or removal of such designation shall be made by the
      Board of Directors of the Company or a committee thereof pursuant to a certified
      resolution delivered to the Trustee and shall be effective as of the date
      specified in the applicable certified resolution, which shall not be prior
      to
      the date such certified resolution is delivered to the Trustee.  Any
      Subsidiary Guarantor that is designated an Unrestricted Subsidiary in accordance
      with the terms of this Section 4.19 shall be released from and relieved of
      its
      obligations under its Subsidiary Guaranty upon execution and delivery of a
      supplemental indenture in form satisfactory to the Trustee.

     

    SECTION
      4.20.  Change of Control.  Upon the occurrence of a
      Change of Control, each Holder of 71⁄8% Notes shall have the right to require the
      Company to repurchase all or any part (equal to $1,000 in principal amount
      or an
      integral

     

    
      
         

      

      
        46

        
          

        

      

      
         

      

    

    multiple
      thereof) of such Holder’s 71⁄8% Notes pursuant to the offer described below (the
“Change of Control Offer”) at a purchase price in cash (a “Change of Control
      Payment”) equal to 101% of the principal amount of the 71⁄8% Notes repurchased,
      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 the relevant interest payment date.

     

    Within
      30
      days following any Change of Control, the Company shall:

     

    (a)           cause
      a notice of the Change of Control Offer to be sent at least once to the Dow
      Jones News Service or similar business news service in the United States;
      and

     

    (b)           send,
      by first-class mail, with a copy to the Trustee, to each Holder of 71⁄8% Notes, at
      such Holder’s address appearing in the Debt Security Register, a notice stating,
      among other things:

     

    (1)             that
      a Change of Control has occurred and a Change of Control Offer is being made
      pursuant to this Indenture and that all 71⁄8% Notes (or portions thereof) properly
      tendered will be accepted for payment,

     

    (2)             the
      Change of Control Payment and the purchase date, which shall be, subject to
      any
      contrary requirements of applicable law, a business day no earlier than 30
      days
      nor later than 60 days from the date the Company mails such notice (the “Change
      of Control Payment Date”),

     

    (3)             that
      any 71⁄8% Note (or portion thereof) accepted for payment (and duly paid on the
      Change of Control Payment Date) pursuant to the Change of Control Offer shall
      cease to accrue interest on the Change of Control Payment Date,

     

    (4)             that
      any 71⁄8% Note (or portions thereof) not properly tendered will continue to accrue
      interest,

     

    (5)             a
      description of the transaction or transactions constituting the Change of
      Control,

     

    (6)             the
      procedures that the Holders of the 71⁄8% Notes must follow in order to tender
      their 71⁄8% Notes (or portions thereof) for payment and the procedures that
      Holders of 71⁄8% Notes must follow in order to withdraw an election to tender 71⁄8%
      Notes (or portions thereof) for payment, and

     

    (7)             all
      other instructions and materials necessary to enable Holders to tender 71⁄8% Notes
      pursuant to the Change of Control Offer.

     

    
      
         

      

      
        47

        
          

        

      

      
         

      

    

    The
      Company will comply, to the extent applicable, with the requirements of Section
      14(e) under the Exchange Act and any other securities laws and regulations
      thereunder to the extent such laws and regulations are applicable in connection
      with the purchase of 71⁄8% Notes pursuant to a Change of Control
      Offer.  To the extent that the provisions of any securities laws or
      regulations conflict with the provisions relating to the Change of Control
      Offer, the Company will comply with the applicable securities laws and
      regulations and will not be deemed to have breached its obligations under this
      Section 4.20 by virtue of such compliance.

     

    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 4.20 applicable to a Change of Control Offer made by the Company and
      purchases all 71⁄8% Notes validly tendered and not withdrawn under such Change of
      Control Offer.

     

    In
      the
      event that Holders of not less than 90% of the aggregate principal amount of
      the
      outstanding 71⁄8% Notes accept a Change of Control Offer and the Company purchases
      all of the 71⁄8% Notes held by such Holders, the Company will have the right, upon
      not less than 30 nor more than 60 days’ prior notice, given not more than 30
      days following the purchase pursuant to the Change of Control Offer referred
      to
      above, to redeem all of the 71⁄8% Notes that remain outstanding following such
      purchase at a redemption price equal to the Change of Control Payment plus,
      to
      the extent not included in the Change of Control Payment, accrued and unpaid
      interest on the 71⁄8% Notes that remain outstanding, to the date of redemption
      (subject to the right of Holders of record on the relevant record date to
      receive interest due on the relevant interest payment date).”

     

    SECTION
      5.  Amendments to Article V of the Original
      Indenture.  Section 5.03 of the Original Indenture is amended in
      its entirety with respect to the 71⁄8% Notes to read as follows:

     

    Notwithstanding
      that the Company may not be subject to the reporting requirements of Sections
      13
      and 15(d) of the Exchange Act, the Company shall file with the SEC and provide
      the Trustee and, upon their request, Holders with such annual reports and such
      information, documents and other reports as are specified in Sections 13 and
      15(d) of the Exchange Act and applicable to a United States corporation subject
      to such Sections, such information, documents and reports to be so filed and
      provided at the times specified for the filing of such information, documents
      and reports under such Sections; provided, however, that the Company shall
      not
      be so obligated to file such information, documents and reports with the SEC
      if
      the SEC does not permit such filings.  To the extent such reports are
      available to the public via the SEC’s EDGAR system, they will be deemed as being
      provided to the Trustee on the date they become available.

     

    SECTION
      6.    Amendments to Article VI of the Original
      Indenture

     

    
      
         

      

      
        48

        
          

        

      

      
         

      

    

    (a)                      Sections
      6.01(a) and 6.01(b) of the Original Indenture are amended with respect to the
      71⁄8% Notes by deleting in each the phrase “,whether or not such payment may have
      been prohibited by Article XII, if applicable;”.

     

    (b)           Section
      6.01(e) of the Original Indenture is amended with respect to the 71⁄8% Notes by
      deleting the number “60” and substituting the number “30” in its
      place.

     

    (c)           Section
      6.01(f) of the Original Indenture is amended in its entirety with respect to
      the
      71⁄8% Notes to read as follows: “(f) a default by the Company or any Restricted
      Subsidiary under any Indebtedness for borrowed money in an aggregate amount
      greater than $25.0 million (other than Non-recourse Purchase Money Indebtedness)
      that results in acceleration of the maturity of such Indebtedness, or failure
      to
      pay any such Indebtedness at maturity, if such Indebtedness is not discharged
      or
      such acceleration is not rescinded or annulled within 30 days after written
      notice as provided in this Indenture; or”.

     

    (d)           Sections
      6.01(g) and 6.01(h) of the Original Indenture are amended with respect to the
      71⁄8% Notes by deleting each reference to “Restricted Subsidiary” and “Restricted
      Subsidiaries” therein and substituting “Significant Subsidiary” or “Significant
      Subsidiaries”, respectively, in its place.

     

    (e)           Section
      6.01 of the Original Indenture is amended with respect to the 71⁄8% Notes by
      adding the following provisions after clause (i) of the first paragraph
      thereof:

     

    “(j)           one
      or more final judgments or orders by a court of competent jurisdiction are
      entered against the Company or any Restricted Subsidiary in an uninsured or
      unindemnified aggregate amount outstanding at any time in excess of $25.0
      million and such judgments or orders are not discharged, waived, stayed,
      satisfied or bonded for a period of 60 consecutive days; or

     

    (k)           a
      Subsidiary Guaranty ceases to be in full force and effect (other than in
      accordance with the terms of this Indenture and such Subsidiary Guaranty) or
      a
      Subsidiary Guarantor denies or disaffirms its obligations under its Subsidiary
      Guaranty.”

     

    (f)           Section
      6.01 of the Original Indenture is amended by adding the following sentence
      to
      the end of the first paragraph thereof:  “Notwithstanding anything to
      the contrary herein, if an Event of Default described under clause (g) or (h)
      of
      this paragraph shall occur, the principal amount of all Debt Securities of
      any
      series then Outstanding will automatically, and without any action by the
      Trustee or any Holder, become immediately due and payable.”

     

    (g)           Article
      VI of the Original Indenture is amended by adding Section 6.09 as
      follows:

     

    “SECTION
      6.09.  Waiver of
      Stay or Extension Laws.  The Company (to the extent it may
      lawfully do so) shall not at any time insist upon, or plead, or in any manner
      whatsoever claim or take the benefit or advantage of, any stay or extension
      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

     

    
      
         

      

      
        49

        
          

        

      

      
         

      

    

    advantage
      of any such law, and shall not hinder, delay or impede the execution of any
      power herein granted to the Trustee, but shall suffer and permit the execution
      of every such power as though no such law had been enacted.”

     

    SECTION
      7.   Amendments to Article VII of the Original
      Indenture

     

    (a)           Section
      7.08 of the Original Indenture is amended by deleting the number “25%” in the
      fourth paragraph thereof and substituting “10%” in its place.

     

    SECTION
      8.   Amendments to Article IX of the Original
      Indenture

     

    (a)           Section
      9.01 of the Original Indenture is amended with respect to the 71⁄8% Notes by (i)
      adding the words “in any material respect” to the end of the final clause of
      paragraph (c) thereof, (ii) deleting the word “and” from the end of clause (j)
      of the first paragraph thereof, (iii) substituting a “;” for the “.” at the end
      of clause (k) of the first paragraph thereof and (iv) adding the following
      provisions to the end of the first paragraph thereof:

     

    “(l)           to
      provide for uncertificated 71⁄8% Notes in addition to or in place of certificated
      71⁄8% Notes;

     

    (m)           to
      make any change that does not adversely affect the rights of any Holder of
      71⁄8%
      Notes in any material respect;

     

    (n)           to
      add or remove any Subsidiary Guarantors pursuant to the procedures set forth
      herein; and

     

    (o)           to
      provide for the issuance pursuant to an exemption from registration under the
      Securities Act of additional Debt Securities of a series after the original
      date
      of issuance of such series; provided that such additional Debt Securities bear
      appropriate legends and have the benefit of registration rights; provided,
      further, that the supplemental indenture pursuant to which such series was
      established provides for the issuance of additional Debt Securities of such
      series pursuant to an exemption from registration under the Securities
      Act.”

     

    (b)           Section
      9.01 of the Original Indenture is further amended by adding the words “in the
      Trustee’s opinion” immediately after the word “which” and immediately before the
      words “affects the Trustee’s own rights” in the first sentence of the second
      paragraph of Section 9.01.

     

    (c)           Section
      9.02 of the Original Indenture is amended with respect to the 71⁄8% Notes by
      deleting the word “or” from the end of clause (vii) of the first paragraph
      thereof, deleting the “.” at the end of clause (viii) of the first paragraph
      thereof and by adding the following provisions to the end of the first paragraph
      thereof:

     

    “;
      (ix) reduce the relative ranking of
      any 71⁄8% Notes; (x) at any time after a Change of Control has occurred, change
      the repurchase price or the time at which the Change of Control Offer relating
      thereto must be made or at which the 71⁄8% Notes must be repurchased pursuant to
      such Change of Control Offer or (xi)

     

    
      
         

      

      
        50

        
          

        

      

      
         

      

    

    impair
      the right of any Holder to receive payment of principal of and interest on
      such
      Holder’s Debt 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 Debt
      Securities or any Subsidiary Guaranty.”

     

    (d)           Section
      9.02 of the Original Indenture is further amended by adding the words “in the
      Trustee’s opinion” immediately after the third occurrence of the word
“Indenture” and immediately before the words “adversely affects the Trustee’s
      own rights” in the first sentence of the third paragraph of Section
      9.02.

     

    (e)           Article
      IX of the Original Indenture is amended by adding Section 9.05 as
      follows:

     

    “SECTION
      9.05.  Payment
      for Consent.  Neither the Company nor any Affiliate of the Company
      shall, directly or indirectly, pay or cause to be paid any consideration,
      whether by way of interest, fee or otherwise, to any Holder of Debt Securities
      of a series for or as an inducement to any consent, waiver or amendment of
      any
      of the terms or provisions of this Indenture or the Debt Securities of such
      series unless such consideration is offered to be paid to all Holders of such
      series that so consent, waive or agree to amend in the time frame set forth
      in
      solicitation documents relating to such consent, waiver or
      agreement.”

     

    (f)           The
      first sentences of both Section 9.01 and 9.02 of the Original Indenture are
      amended with respect to the 71⁄8% Notes by adding the words “any Subsidiary
      Guarantors” immediately before the words “and the Trustee.”

     

    SECTION
      9.    Amendments to Article X of the Original
      Indenture

     

    (a)           Section
      10.01 of the Original Indenture is amended in its entirety with respect to
      the
      71⁄8% Notes to read as follows:

     

    “SECTION
      10.01.  Consolidations and Mergers of the
      Company.  The Company shall not consolidate with or merge with or
      into any Person, or sell, transfer, lease or otherwise dispose of, in one
      transaction or series of transactions, all or substantially all of the Property
      of the Company and the Restricted Subsidiaries taken as whole,
      unless:

     

    (a)           the
      resulting, surviving or transferee Person (the “Successor Company”) shall be a
      Person organized or existing under the laws of the United States of America,
      any
      State thereof or the District of Columbia and the Successor Company (if not
      the
      Company) shall expressly assume, by a supplemental indenture, executed and
      delivered to the Trustee, in form satisfactory to the Trustee, all the
      obligations of the Company under the 71⁄8% Notes and this Indenture;

     

    (b)           in
      the case of a disposition of all or substantially all the Property of the
      Company and the Restricted Subsidiaries taken as a whole, such
      Property

     

    
      
         

      

      
        51

        
          

        

      

      
         

      

    

    shall
      have been so disposed of, as an entirety or virtually as an entirety to one
      Person;

     

    (c)           immediately
      after giving effect to such transaction (and treating, for purposes of this
      clause (c) and clause (d) below, any Indebtedness that becomes or is anticipated
      to become an obligation of the Successor Company or any Restricted Subsidiary
      as
      a result of such transaction as having been Incurred by such Successor Company
      or such Restricted Subsidiary at the time of such transaction), no Default
      or
      Event of Default shall have occurred and be continuing;

     

    (d)           either:

     

    (1)           the
      Successor Company will, on the date of such transaction after giving pro forma
      effect thereto and any related financing transactions as if the same had
      occurred at the beginning of the applicable four-quarter period, be permitted
      to
      Incur at least $1.00 of additional Indebtedness pursuant to the Consolidated
      Interest Coverage Ratio test set forth in clause (a) of Section 4.11;
      or

     

    (2)           immediately
      after giving effect to such transaction on a pro forma basis and any related
      financing transactions as if the same had occurred at the beginning of the
      applicable four-quarter period, the Consolidated Interest Coverage Ratio of
      the
      Successor Company will be equal to or greater than the Consolidated Interest
      Coverage Ratio of the Company immediately before such transaction;
      and

     

    (e)           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;

     

    provided,
      however, that clause (d) will not be applicable to (1) a Restricted Subsidiary
      consolidating with, merging with or into or selling, transferring, leasing
      or
      otherwise disposing of all or substantially all its Property to the Company
      or a
      Subsidiary Guarantor that is a Wholly Owned Subsidiary or (2) the Company
      merging with or into an Affiliate of the Company solely for the purpose and
      with
      the sole effect of reincorporating the Company in another
      jurisdiction.”

     

    (b)           Section
      10.02 of the Original Indenture is amended by deleting the period at the end
      of
      the first sentence of the first paragraph thereof and by substituting the
      following in its place:

     

    “;
      provided, however, that in the case
      of a lease of all or substantially all of the Company’s Property, the Company
      shall not be released from any of the obligations or covenants under this
      Indenture, including the obligation to pay the principal of and interest on
      the
      Debt Securities.”

     

    SECTION
      10.    Applicability of and Amendments to Article XI of
      the Original Indenture

     

    
      
         

      

      
        52

        
          

        

      

      
         

      

    

    (a)                      Article
      XI of the Original Indenture shall be applicable to the 71⁄8% Notes.

     

    (b)           Section
      11.02(b) of the Original Indenture is superseded with respect to the 71⁄8% Notes
      by the following provisions:

     

    “(b)
      Subject to Sections 11.02(c) and 11.03, the Company at any time may terminate
      (i) all its obligations under the 71⁄8% Notes and this Indenture with respect to
      the 71⁄8% Notes (“legal defeasance option”) or (ii) its obligations under Sections
      4.10, 4.11, 4.12, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19, 4.20 and 10.01(d), the
      operation of Sections 6.01(d) (to the extent relating to Section 10.01(d),
      6.01(e) (to the extent relating to Sections 4.10, 4.11, 4.12, 4.14, 4.15, 4.16,
      4.17, 4.18, 4.19 and 4.20), 6.01(f), 6.01(g) (to the extent relating to
      Significant Subsidiaries), 6.01(h) (to the extent relating to Significant
      Subsidiaries), 6.01(j) and 6.01(k) (“covenant defeasance
      option”).  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, payment of the 71⁄8% Notes may not
      be accelerated because of an Event of Default.  If the Company
      exercises its covenant defeasance option, payment of the 71⁄8% Notes may not be
      accelerated because of an Event of Default specified in Sections 6.01(d) and
      6.01(e) (with respect to the provisions of Articles IV and X referred to in
      the
      immediately preceding paragraph) and Sections 6.01(f), 6.01(g) and 6.01(h)
      (in
      each case to the extent relating to Significant Subsidiaries), 6.01(j) and
      6.01(k).  If the Company exercises its legal defeasance option or its
      covenant defeasance option, each Subsidiary Guarantor, if any, shall be released
      from all its obligations under its Subsidiary Guaranty.

     

    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)           Section
      11.02(c) of the Original Indenture is amended in its entirety with respect
      to
      the 71⁄8% Notes to read as follows:

     

    “(c)           Notwithstanding
      clauses (a) and (b) above, the Company’s obligations in Sections 2.07, 2.09,
      4.02, 4.04, 5.01, 7.06, 7.08, 7.10, 11.05, 11.06 and 11.07 shall survive until
      the 71⁄8% Notes have been paid in full.  Thereafter, the Company’s
      obligations in Sections 7.06, 11.05 and 11.06 shall survive.”

     

    (d)           (Section
      11.03(c) of the Original Indenture is amended by deleting each instance of
      the
      number “91” and substituting “123” in its place.

     

    (e)           Section
      11.03(g)(ii) of the Original Indenture is amended by deleting the words “date of
      this Indenture” and substituting the words “Issue Date” in their
      place.

     

    (f)           Section
      11.07 of the Original Indenture is amended by deleting the “.” at the end
      thereof and by substituting the following in its place:

     

    
      
         

      

      
        53

        
          

        

      

      
         

      

    

    “;
      provided, however, that, if the Company has made any payment of interest on
      or
      principal of any Debt Securities because of the reinstatement of its
      obligations, the Company shall be subrogated to the rights of the Holders of
      such Debt Securities to receive such payment from the money or
      U.S.  Government Obligations held by the Trustee or paying
      agent.”

     

    SECTION
      11.   Inapplicability of Article XII of the Original
      Indenture

     

    Article
      XII of the Original Indenture shall not be applicable to the 71⁄8%
      Notes.  The Notes shall be Senior Indebtedness of the Company, and the
      Subsidiary Guaranties shall be Senior Indebtedness of each Subsidiary
      Guarantor.

     

    SECTION
      12.   Governing Law.

     

    The
      Original Indenture is amended with respect to the 71⁄8% Notes by revising Section
      13.04 to read as follows:

     

    This
      Indenture shall be governed by and construed in accordance with the laws of
      the
      State of New York without giving effect to applicable principles of conflicts
      of
      laws to the extent that the application of the law of another jurisdiction
      would
      be required thereby, except to the extent that the laws of the State of New
      York
      would require the application of the laws of another jurisdiction regarding
      the
      validity of the 71⁄8% Notes.

     

    SECTION
      13.   Subsidiary Guaranties

     

    (a)           The
      Original Indenture is amended with respect to the 71⁄8% Notes by adding Article
      XIV as follows:

     

    “ARTICLE
      XIV

     

    Subsidiary
      Guaranties

     

    SECTION
      14.01.  Subsidiary Guaranties.  Each Subsidiary
      Guarantor hereby unconditionally Guaranties, jointly and severally, to each
      Holder and to the Trustee and its successors and assigns (a) the full and
      punctual payment of principal of and interest on the 71⁄8% Notes when due, whether
      at Stated Maturity, by acceleration, by redemption or otherwise, and all other
      monetary obligations of the Company under this Indenture and the 71⁄8% Notes and
      (b) the full and punctual performance within applicable grace periods of all
      other obligations of the Company under this Indenture and the 71⁄8% Notes (all the
      foregoing being hereinafter collectively called the
“Obligations”).  Each Subsidiary Guarantor further agrees that the
      Obligations may be extended or renewed, in whole or in part, without notice
      or
      further assent from such Subsidiary Guarantor, and that such Subsidiary
      Guarantor will remain bound under this Article XIV notwithstanding any extension
      or renewal of any Obligation.

     

    Each
      Subsidiary Guarantor waives presentation to, demand of, payment from and protest
      to the Company of any of the Obligations and also waives notice of protest
      for
      nonpayment.  Each Subsidiary Guarantor waives notice of
      any

     

    
      
         

      

      
        54

        
          

        

      

      
         

      

    

    Default
      under the 71⁄8% Notes or the Obligations.  The obligations of each
      Subsidiary Guarantor hereunder shall not be affected by (a) 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 71⁄8%
      Notes or any other agreement or otherwise; (b) any extension or renewal of
      any
      thereof; (c) any rescission, waiver, amendment or modification of any of the
      terms or provisions of this Indenture, the 71⁄8% Notes or any other agreement; (d)
      the release of any security held by any Holder or the Trustee for the
      Obligations or any of them; (e) the failure of any Holder or the Trustee to
      exercise any right or remedy against any other Guarantor of the Obligations;
      or
      (f) any change in the ownership of such Subsidiary Guarantor.

     

    Each
      Subsidiary Guarantor further agrees that its Subsidiary Guaranty constitutes
      a
      Guarantee of payment, performance and compliance when due (and not a Guarantee
      of collection) and waives any right to require that any resort be had by any
      Holder or the Trustee to any security held for payment of the
      Obligations.

     

    Upon
      the
      sale or other disposition of all of the Capital Stock of a Subsidiary Guarantor
      (other than to the Company or an Affiliate thereof) in compliance with Section
      4.14, such Subsidiary Guarantor shall be released from all obligations under
      its
      Subsidiary Guaranty.  Except as expressly set forth in this Section
      14.01 and Sections 4.18, 4.19 and 11.02, the obligations of each Subsidiary
      Guarantor hereunder shall not be subject to any reduction, limitation,
      impairment or termination for any reason, including any claim of waiver,
      release, surrender, alteration or compromise, and shall not be subject to any
      defense of setoff, counterclaim, recoupment or termination whatsoever or by
      reason of the invalidity, illegality or unenforceability of the Guaranteed
      Obligations or otherwise.  Without limiting the generality of the
      foregoing, the obligations of each Subsidiary Guarantor herein shall not be
      discharged or impaired or otherwise affected by the failure of any Holder or
      the
      Trustee to assert any claim or demand or to enforce any remedy under this
      Indenture, the 71⁄8% Notes or any other agreement, by any waiver or modification
      of any thereof, by any Default, failure or delay, willful or otherwise, in
      the
      performance of the obligations, or by 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 such Subsidiary Guarantor or would otherwise operate
      as
      a discharge of such Subsidiary Guarantor as a matter of law or
      equity.

     

    Each
      Subsidiary Guarantor further agrees that its Subsidiary Guaranty shall continue
      to be effective or be reinstated, as the case may be, if at any time payment,
      or
      any part thereof, of principal of or interest on 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 any
      Subsidiary

     

    
      
         

      

      
        55

        
          

        

      

      
         

      

    

    Guarantor
      by virtue hereof, upon the failure of the Company to pay the principal of or
      interest on any Obligation when and as the same shall become due, whether at
      Stated Maturity, by acceleration, by redemption or otherwise, or to perform
      or
      comply with any other Obligation, each Subsidiary Guarantor hereby promises
      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 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.  Each Subsidiary Guarantor further agrees that, as between
      it, on the one hand, and the Holders and the Trustee, on the other hand, (x)
      the
      maturity of the Obligations Guaranteed hereby may be accelerated as provided
      in
      Article VI for the purposes of such Subsidiary Guarantor’s Subsidiary Guaranty,
      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 such Subsidiary Guarantor for the purposes of this
      Section.

     

    Each
      Subsidiary Guarantor also agrees 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 14.01.

     

    SECTION
      14.02.  Contribution.  Each of the Company and any
      Subsidiary Guarantor (a “Contributing Party”) agrees that, in the event a
      payment shall be made by any other Subsidiary Guarantor under any Subsidiary
      Guaranty (the “Claiming Guarantor”), the Contributing Party shall indemnify the
      Claiming Guarantor in an amount equal to the amount of such payment multiplied
      by a fraction, the numerator of which shall be the net worth of the Contributing
      Party on the date hereof and the denominator of which shall be the aggregate
      net
      worth of the Company and all the Subsidiary Guarantors on the date hereof (or,
      in the case of any Subsidiary Guarantor becoming a party hereto pursuant to
      Section 9.01(n), the determination of indemnification amounts shall be based
      upon net worth on the date of the supplemental indenture executed and delivered
      by such Subsidiary Guarantor.)

     

    SECTION
      14.03.  Successors and Assigns.  This Article XIV
      shall be binding upon each Subsidiary Guarantor and its successors and assigns
      and shall inure to the benefit of the successors and assigns of the Trustee
      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 71⁄8% Notes shall automatically extend to and be vested
      in such transferee or assignee, all subject to the terms and conditions of
      this
      Indenture.

     

    SECTION
      14.04.  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 XIV shall operate as a waiver thereof, nor shall
      a
      single or partial

     

    
      
         

      

      
        56

        
          

        

      

      
         

      

    

    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 XIV at
      law, in equity, by statute or otherwise.

     

    SECTION
      14.05.  Modification.  No modification, amendment or
      waiver of any provision of this Article XIV, nor the consent to any departure
      by
      any Subsidiary Guarantor 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 any Subsidiary Guarantor in
      any case shall entitle such Subsidiary Guarantor to any other or further notice
      or demand in the same, similar or other circumstances.

     

    SECTION
      14.06.  Execution of Supplemental Indenture for Future Subsidiary
      Guarantors.  Each Subsidiary which is required to become a
      Subsidiary Guarantor pursuant to Section 4.18 shall promptly execute and deliver
      to the Trustee a supplemental indenture in the form of Exhibit B hereto pursuant
      to which such Subsidiary shall become a Subsidiary Guarantor under this Article
      XIV and shall Guarantee the Obligations.  Concurrently with the
      execution and delivery of such supplemental indenture, the Company shall deliver
      to the Trustee an Opinion of Counsel to the effect that such supplemental
      indenture has been duly authorized, executed and delivered by such Subsidiary
      and that, subject to the application of bankruptcy, insolvency, moratorium,
      fraudulent conveyance or transfer and other similar laws relating to creditors’
rights generally and to the principles of equity, whether considered in a
      proceeding at law or in equity, the Subsidiary Guaranty of such Subsidiary
      Guarantor is a legal, valid and binding obligation of such Subsidiary Guarantor,
      enforceable against such Subsidiary Guarantor in accordance with its
      terms.”

     

    (b)           Opco
      shall guarantee the 71⁄8% Notes in accordance with the provisions of Article XIV
      of the Original Indenture.

     

    SECTION
      14.   Governing Law.  The 71⁄8% Notes shall be
      governed by and construed in accordance with the laws of the State of New
      York.  The Trustee, the Company and each of the Subsidiary Guarantors
      agree to submit to the non-exclusive jurisdiction of the competent courts of
      the
      State of New York sitting in New York City in any action or proceeding arising
      out of or relating to the Indenture or the 71⁄8% Notes.

     

    SECTION
      15.   Counterparts.  This First Supplemental
      Indenture may be executed in any number of counterparts, each of which shall
      be
      an original but such counterparts shall together constitute but one and the
      same
      instrument.

     

    SECTION
      16.   Supplemental Indenture Controls.  In the
      event there is any conflict or inconsistency between the Original Indenture
      and
      this First Supplemental Indenture, the provisions of this First Supplemental
      Indenture shall control.

     

    
      
         

      

      
        57

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this First Supplemental
      Indenture to be duly executed as of the day and year first above
      written.

     

     

     

    
      	
               

            	SWIFT
              ENERGY COMPANY	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/ 
Alton
              D.
              Heckaman, Jr.	 
	 	 	
              Alton
                D. Heckaman,
                Jr.  

            	
               

            
	 	 	Executive
              Vice
              President & Chief Financial Officer	 
	 	 	 	 

    

     

    
       

      
        	
                 

              	
                SWIFT
                  ENERGY OPERATING, LLC

              	 
	 	 	 	 
	
                 

              	
                By:
                  

              	/s/ 
Alton
                D.
                Heckaman, Jr.	 
	 	 	
                Alton
                  D. Heckaman,
                  Jr.  

              	
                 

              
	 	 	Executive
                Vice
                President & Chief Financial Officer	 
	 	 	 	 

      

       

      
        	
                 

              	WELLS
                FARGO BANK, NATIONAL ASSOCIATION, as Trustee	 
	 	 	 	 
	
                 

              	
                By:
                  

              	/s/ 
Patrick
                Giordano	 
	 	 	
                Patrick
                  Giordano  

              	
                 

              
	 	 	
                Vice
                  President

              	 
	 	 	 	 

      

    

     

    

     

     

     

    

     

    
      
         

      

      
        58Counsel

ATTENTION:

THIS RESTRICTED STOCK UNIT AWARD SHALL NOT BECOME EFFECTIVE

UNLESS AND UNTIL IT IS "ACCEPTED" BY THE DIRECTOR

IN THE MANNER DESCRIBED IN SECTION 1(b) BELOW.

 

RESTRICTED STOCK UNIT AWARD AGREEMENT

(Members of Alpharma Inc.'s Board of Directors)

This RESTRICTED STOCK UNIT AWARD Agreement (this "Agreement") is made as of the Grant Date (defined below), by and between Alpharma Inc., a Delaware (USA) corporation with an address at One Executive Drive, Fort Lee, New Jersey 07024 (the "Company"), and the Director (defined below), pursuant and subject to the Company's 2003 Omnibus Incentive Compensation Plan (the "Plan"), on the following terms and conditions:

	
 

DEFINITIONS:  The following terms shall have the following meanings when used in this Agreement.

	
"Director":

	 
	
"Grant Date":

	 
	
"Grant Price":

	 
	
"Number of Restricted Units":

	 

1.Grant and Acceptance of Restricted Unit Award.

(a)The Company hereby grants to the Director, subject to the restrictions, forfeiture risks, and other terms and conditions set forth herein and in the Plan, the "Restricted Unit Award", which shall consist of restricted units in the amount of that Number of Restricted Units (defined above) (each, a "Restricted Unit"), granted at the Grant Price (defined above).  Each Restricted Unit represents the Director's right to receive, under the terms and conditions described in this Agreement, payment of one share of the Company's Class A Common Stock (the "Common Stock") upon vesting of such Restricted Unit.

(b)The Restricted Unit Award shall not be considered granted unless and until the Director accepts the terms of this Agreement  by signing and returning a copy of this Agreement to the Company's Director, Compensation and Benefits.   By so accepting the Restricted Unit Award, the Director is memorializing that he or she has accepted the Restricted Unit Award as of the Grant Date.

2.Restrictions / Rights of Company and Director.

(a)Vesting of Restricted Units.  The Director shall become vested in the Restricted Units, and shall receive that number of shares of Common Stock represented by the Restricted Units (the "Director Common Stock"), on the date of the Director's Retirement (defined below) (the "Vesting Date"), subject to acceleration, forfeiture, deferral, and the other terms and conditions of this Agreement, including this Section 2.  This Restricted Unit Award shall be considered "Vested" for all purposes under this Agreement with respect to individual Restricted Units upon the first date the Restricted Unit Award is vested with respect to such Restricted Unit.

(b)Forfeiture Rights of the Company (Termination, Retirement, etc.).  Subject to the further provisions of this Agreement, and except as otherwise provided in Section 2(c) below, prior to the Vesting Date, in the event that the Director voluntarily resigns his or her position as a director of the Company, other than as a result of the Disability or Retirement of the Director, all Restricted Units shall be automatically forfeited by the Director. 

(c)Acceleration Rights of the Director / The Death or Disability of the Director.  In the event that the Director dies, or an event of Disability takes place, or a Change in Control shall have occurred prior to the Vesting Date, the Director (or his or her beneficiary) shall be immediately 100% vested in all of the Restricted Units granted hereunder and all of the Company's forfeiture rights under Section 2(b) above (the "Company's Forfeiture Rights") in such Restricted Units shall terminate and be of no further force and effect.

(d)Deferral of Vesting of Restricted Units.  The Director may defer receipt of the Director Common Stock beyond the Vesting Date by providing written notice to the Company in accordance with Section 13 hereof setting forth the Director's desire to so defer.  Such deferral must meet the requirements of all applicable federal, state and local (including non-United States) laws regarding deferral of director compensation.  If the Director chooses to defer receipt of the Common Stock, he or she must defer all of the Director Common Stock vesting on the Vesting Date.  Any deferrals made by a Director under this Agreement shall be made pursuant to the Company's Amended and Restated Deferred Compensation Plan, the terms of which are incorporated herein by reference.

3.Definitions.  For purposes of this Agreement: 

(a)An event of "Disability" shall mean a resignation from the Board of Directors of the Company (the "Board") for reasons of the Director's disability, as determined by the Board from time to time. 

(b)"Retirement" shall mean (i) declining to stand for re-election to the Board at the next Annual Meeting of Stockholders of the Company following the end of the Director's then-current term, (ii) a failure to be nominated for re-election by the Board at the end of the Director's then-current term, (iii) a failure to be elected as a director of the Company by a vote of the stockholders of the Company after being nominated to serve as a director of the Company or (iv) such other instance as may be determined by the Board. 

(c)"Change in Control" shall have that meaning set forth in the Company's Change in Control Plan, as amended from time to time (it being understood and agreed that such Change in Control Plan shall otherwise not apply to the Director).  

4.Voting and Other Rights.  The Director shall have no rights as a stockholder of the Company in respect of the Restricted Units, including the right to vote and to receive regular or special cash dividends, prior to the Vesting Date (or, if the Director has deferred receipt pursuant to Section 2(d) above, then such later date of receipt of the Director Common Stock). Notwithstanding the foregoing, prior to the Vesting Date, the Director shall receive dividend equivalents equal to the amount of the dividends attributable to the shares of Common Stock represented by the Restricted Stock Units.  The dividend equivalents shall be paid in cash on the date (or as soon as administratively practicable thereafter) that the related dividends are paid.

5.Prohibition on Transfer.  The Director is subject to Section 8.3 of the Plan, which sets forth restrictions on the transferability, sale, pledge, assignment, etc. of the Restricted Units.

6.Delivery of Certificates or Equivalent.  Upon the Vesting Date (or, if the Director has deferred receipt pursuant to Section 2(d) above, then upon such later date of elected receipt of the Director Common Stock), the Company shall, at its election, either (i) deliver to the Director a certificate representing the Director Common Stock, or (ii) establish a brokerage account for the Director and credit to that account the Director Common Stock plus, in either case, a cash payment equal to the value of any fractional Restricted Unit then Vested.

7.Additional Securities.  If the Company shall pay a stock dividend or declare a stock split on or with respect to any of its Common Stock, or otherwise distribute securities of the Company to the holders of its Common Stock, the number of Restricted Units subject to this award shall be adjusted to correspond to the change in the outstanding shares of Common Stock, subject to the Company's Forfeiture Rights.  If the Company shall distribute to its stockholders securities of another corporation, the securities of such other corporation, distributed with respect to the Restricted Units then subject to the restrictions contained in this Agreement, shall be added to the Restricted Units subject to the Company's Forfeiture Rights.  If the outstanding shares of the Company's Common Stock shall be subdivided into a greater number of shares or combined into a smaller number of shares, or in the event of a reclassification of the outstanding shares of the Company's Common Stock, or if the Company shall be a party to a merger, consolidation or capital reorganization, there shall be substituted for the Restricted Units then subject to this Agreement such amount and kind of securities (or cash) as are issued in such subdivision, combination, reclassification, merger, consolidation or capital reorganization in respect of the Restricted Units subject immediately prior thereto to the Company's Forfeiture Right pursuant to this Agreement.  Notwithstanding the foregoing, regular or special cash dividends paid by the Company on the Common Stock shall not affect the number of Restricted Units granted to the Director under this Agreement. 

8.Tax Matters.  In the event that the Director is subject to federal, state or local (including international) income tax and the Company becomes obligated to pay withholding of such taxes as a result of the expiration of any restrictions hereunder applicable to any share of Common Stock deliverable in connection with the Restricted Units, the Director or such other person entitled to receive such Common Stock deliverable in connection with the Restricted Units, shall pay to the Company (as a condition of delivery) an amount equal to the amount of such withholding payment.

9.Equitable Relief and Consent to Jurisdiction.  The Director specifically acknowledges and agrees that in the event of a breach or threatened breach of the provisions of this Agreement, including, without limitation, the attempted transfer of the Restricted Units by the Director in violation of this Agreement, monetary damages may not be adequate to compensate the Company, and, therefore, in the event of such a breach or threatened breach, in addition to any right to damages, the Company shall be entitled to equitable relief from any court having competent jurisdiction.  Nothing herein shall be construed as prohibiting the Company from pursuing any other remedies available to it for any such breach or threatened breach.

10.Registration.  The Company currently has an effective registration statement on file with the Securities and Exchange Commission with respect to the Director Common Stock.  The Company intends to maintain this registration but has no obligation to do so.  If the registration ceases to be effective, the Director will not be able to transfer or sell the Director Common Stock unless exemptions from registration are available.  Such exemptions from registration are very limited and might be unavailable.  The Director agrees that any resale by the Director of the Director Common Stock shall comply in all respects with the requirements of all applicable securities laws, rules and regulations (including, without limitation, the provisions of the Securities Act of 1933, as amended, the Exchange Act and the respective rules and regulations promulgated thereunder) and any other law, rule or regulation applicable thereto, as such laws, rules and regulations may be amended from time to time.  The Company shall not be obligated to either issue the Director Common Stock or permit the resale of any Director Common Stock if such issuance or resale would violate any such requirements.  

11.Consent.  The Director specifically acknowledges that the Company must use certain personal information of the Director for the limited purpose of granting and administering Restricted Units to the Director, including sharing such information with third party administrators, and that such use may include the transfer of the Director's personal information across international borders, and the Director hereby consents to the use of his or her personal information for such purpose.  

12.Administration.  This Agreement and the Director's rights hereunder are subject to all of the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations and administrative decisions that may be adopted thereunder.  The Company may terminate, amend or modify the Plan at any time; provided that no such action shall in any way adversely affect the Director's rights under this Agreement.  For the Director's reference, a copy of the Plan is available for the Director's review as publicly filed with the Company's securities filings, and with representative Company Human Resources personnel. 

13.Notices.  Any notice or other communication to be made, served or given to the Company under or pursuant to the terms hereof (a "Notice") shall be in writing and shall be addressed to the Company, in care of the Director, Compensation & Benefits, at One Executive Drive, Fort Lee, New Jersey 07024 USA, and any notice to be given to the Director shall be in writing and addressed to the Director's address maintained from time to time in the employment records of the Company or any affiliate, or at such other address as either party may hereafter designate in writing to the other.  Such Notice shall be sent by personal delivery or by registered or certified mail, return receipt requested, postage prepaid, or by a nationally known overnight courier (or internationally known courier if sent from outside of the United States), providing written proof of delivery.  Any Notice sent in the manner set forth above shall be deemed to have been given and received upon receipt if personally delivered, two (2) days after it has been delivered to a nationally (internationally) known overnight courier, and three (3) days after it has been deposited in the United States mail (or other non-United States government-sponsored mail system) if sent by mail.  If a Notice is delivered otherwise than as set forth above, it shall be deemed to have been given when received.  The substance of any Notice shall be deemed to have been fully acknowledged in the event of refusal of acceptance by the party to whom the notice is addressed.

14.Binding Effect.  This Agreement shall be binding upon, and shall inure to the benefit of, the Director and the Company and their respective permitted successors, assigns, heirs, beneficiaries and representatives.  This Agreement is personal to the Director and may not be assigned by him or her without the prior written consent of the Company.  Any attempted assignment in violation of this Section 14 shall be null and void.

15.Governing Law and Jurisdiction.  This Agreement shall be construed and enforced in accordance with the terms of Section 20.5 of the Plan providing for use of the internal laws of the State of New Jersey in the United States; provided, however, that, insofar as the Company is incorporated under the laws of the State of Delaware in the United States, the General Corporate Law of the State of Delaware (or any successor statute) shall govern those matters that apply to the internal governance of the Company.  Furthermore, the Director hereby irrevocably submits to the co-exclusive jurisdiction of (i) the Superior Court of New Jersey, and (ii) the United States District Court for the District of New Jersey, to resolve any and all issues that may arise out of or relate to this Agreement.  THE SECURITIES ISSUED HEREUNDER SHALL BE GOVERNED BY AND IN ACCORDANCE WITH THE CORPORATE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE NON-UNITED STATES LAWS.  Each of the parties hereto further agrees that service of any process, summons, notice or documents by United States registered mail, return receipt requested, or internationally-known courier, in accordance with the provisions of Section 13 above, shall be effective service of process for any action, suit or proceeding in New Jersey.

16.Severability.  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, but shall be interpreted as if it were written so as to be enforceable to the maximum extent permitted by applicable law, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  To the extent permitted by applicable law, the parties waive any provision of law that renders any provisions hereof prohibited or unenforceable in any respect.

17.Entire Agreement.  This Agreement constitutes the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior oral or written agreements and understandings relating to the subject matter hereof.  No statement, representation, warranty, covenant or agreement not expressly set forth in this Agreement or incorporated herein by reference shall affect or be used to interpret, change or restrict the express terms and provisions of this Agreement.

18.Modifications and Amendments; Waivers and Consents.  The terms and provisions of this Agreement may not be modified, amended, renewed, or terminated, nor may any term, condition or breach of any term or condition be waived, except by a writing signed by the Company and the Director.  Any waiver of any term, condition or breach hereof shall not be a waiver of any other term or condition or of the same term or condition for the future, or of any subsequent breach.

19.Consent of Spouse.  If the Director is married as of the date of this Agreement, the Director's spouse shall execute a Consent of Spouse in a form acceptable to the Company (a sample of which is included as Exhibit A hereto), effective as of the date hereof.  Such consent shall not be deemed to confer or convey to the spouse any rights in the Restricted Unit Award that do not otherwise exist by operation of law or the agreement of the parties.  If the Director marries or remarries subsequent to the date hereof, the Director shall, not later than sixty (60) days thereafter, obtain his or her new spouse's acknowledgment of and consent to the existence and binding effect of all restrictions contained in this Agreement by such spouse's executing and delivering a Consent of Spouse form.

20.Acceptance. By accepting this Agreement (as described in Section 1(b) above), the Director is accepting the Restricted Stock Unit Award as set forth in this Agreement and agreeing to the terms and conditions hereof, including all provisions of the Plan.  The Director is further acknowledging that a copy of the Plan is available for the Director's review as part of the information, as publicly filed with the Company's securities filings, and with representative Human Resources personnel.

IN WITNESS WHEREOF, this Agreement is executed as of the ___ day of ______, 20__.

 
ALPHARMA INC.

By:__________________________________

 

____________________________

[DIRECTOR]

End of Agreement.

 

 

EXHIBIT A

CONSENT OF SPOUSE

I, ____________________________, spouse of _____________________, acknowledge that I have read the Restricted Stock Unit Award Agreement dated as of __________, 20__ (the "Agreement") and that I know its contents.  Capitalized terms used and not defined herein shall have the meanings assigned to such terms in the Agreement.  I am aware that, by its provisions, the Restricted Units owned by my spouse are subject to forfeiture in favor of Alpharma Inc. (the "Company") and that, accordingly, the Restricted Units shall, upon a forfeiture event, be automatically forfeited to the Company, and this may include Restricted Units of which I may become possessed as a result of a court decree and/or any property settlement in any domestic litigation (or otherwise).

I hereby agree that my interest, if any, in the Restricted Units subject to the Agreement shall be irrevocably bound by the Agreement and I further understand and agree that any community property interest I may have in the Restricted Units shall be similarly bound by the Agreement.

I agree to the Company's forfeiture rights described in the Agreement and I hereby consent to the forfeiture of the Restricted Units to the Company in accordance with the provisions of the Agreement.  Further, as part of the consideration for the Agreement, I agree that, at my death, if I have not disposed of any interest of mine in the Restricted Units by an outright bequest of the Restricted Units to my spouse, then the Company shall have the same rights against my legal representative to exercise its rights of forfeiture with respect to any interest of mine in the Restricted Units as it would have had pursuant to the Agreement if I had acquired such interest pursuant to a court decree in domestic litigation.

I AM AWARE THAT THE LEGAL, FINANCIAL AND RELATED MATTERS CONTAINED IN THE AGREEMENT ARE COMPLEX AND THAT I AM FREE TO SEEK INDEPENDENT PROFESSIONAL GUIDANCE OR COUNSEL WITH RESPECT TO THIS CONSENT.  I HAVE EITHER SOUGHT SUCH GUIDANCE OF COUNSEL OR DETERMINED AFTER REVIEWING THE AGREEMENT CAREFULLY THAT I WILL WAIVE SUCH RIGHT.

Dated as of the _______ day of ________________, 20__.

______________________

Print name

________________________________________

Signature

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00124-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00124-of-00352.parquet"}]]