Document:

chk05282008_ex42.htm

     

     

    EXHIBIT 4.2

    
 

    
      	
               

              CHESAPEAKE
      ENERGY CORPORATION

              as
      Issuer,

              THE
      SUBSIDIARY GUARANTORS,

              as
      Guarantors,

              AND

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

              as
      Trustee

              ____________________________

              INDENTURE

              DATED
      AS OF MAY 27, 2008

              ____________________________

              2.25%
      CONTINGENT CONVERTIBLE SENIOR NOTES DUE 2038

              ____________________________

               

               

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    CROSS-REFERENCE
TABLE

     

    
      	
              TIA
      SECTION

            	 
      	
              INDENTURE
      SECTION

            
	
              310

            	
              (a)(1)                                                                                      

            	
              8.10

            
	 
      	
              (a)(2)                                                                                      

            	
              8.10

            
	 
      	
              (a)(3)                                                                                      

            	
              N.A.

            
	 
      	
              (a)(4)                                                                                      

            	
              N.A.

            
	 
      	
              (a)(5)                                                                                      

            	
              8.08

            
	 
      	
              (b)                                                                                      

            	
              8.10

            
	 
      	
              (c)                                                                                      

            	
              N.A.

            
	
              311

            	
              (a)                                                                                      

            	
              8.11

            
	 
      	
              (b)                                                                                      

            	
              8.11

            
	 
      	
              (c)                                                                                      

            	
              N.A.

            
	
              312

            	
              (a)                                                                                      

            	
              2.05

            
	 
      	
              (b)                                                                                      

            	
              12.03

            
	 
      	
              (c)                                                                                      

            	
              12.03

            
	
              313

            	
              (a)                                                                                      

            	
              8.06

            
	 
      	
              (b)(1)                                                                                      

            	
              N.A.

            
	 
      	
              (b)(2)                                                                                      

            	
              8.06

            
	 
      	
              (c)                                                                                      

            	
              8.06;
      12.02

            
	 
      	
              (d)                                                                                      

            	
              8.06

            
	
              314

            	
              (a)                                                                                      

            	
              5.02;
      5.03; 12.02

            
	 
      	
              (b)                                                                                      

            	
              N.A.

            
	 
      	
              (c)(1)                                                                                      

            	
              12.04

            
	 
      	
              (c)(2)                                                                                      

            	
              12.04

            
	 
      	
              (c)(3)                                                                                      

            	
              N.A.

            
	 
      	
              (d)                                                                                      

            	
              N.A.

            
	 
      	
              (e)                                                                                      

            	
              12.05

            
	 
      	
              (f)                                                                                      

            	
              N.A.

            
	
              315

            	
              (a)                                                                                      

            	
              8.01(b)

            
	 
      	
              (b)                                                                                      

            	
              8.05;
      12.02

            
	 
      	
              (c)                                                                                      

            	
              8.01(a)

            
	 
      	
              (d)                                                                                      

            	
              8.01(c)

            
	 
      	
              (e)                                                                                      

            	
              7.11

            
	
              316

            	
              (a)(last
      sentence)                                                                                      

            	
              2.08

            
	 
      	
              (a)(1)(A)                                                                                      

            	
              7.05

            
	 
      	
              (a)(1)(B)                                                                                      

            	
              7.02;
      7.04;

            
	 
      	
              (a)(2)                                                                                      

            	
              N.A.

            
	 
      	
              (b)                                                                                      

            	
              7.07

            
	 
      	
              (c)                                                                                      

            	
              N.A.

            
	
              317

            	
              (a)(1)                                                                                      

            	
              7.08

            
	 
      	
              (a)(2)                                                                                      

            	
              7.09

            
	 
      	
              (b)                                                                                      

            	
              2.04

            
	
              318

            	
              (a)                                                                                      

            	
              12.01

            
	
              318

            	
              (c)                                                                                      

            	
              12.01

            

    

    

     

                                       

     

    N.A.
means Not Applicable

     

    NOTE:
This Cross-Reference table shall not, for any purpose, be deemed part of this
Indenture.

     

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

      
        	
                TABLE
      OF CONTENTS

              	 
      
	 
      	
                Page

              
	 
      	 
      
	
                ARTICLE
      ONE

              	 
      
	 
      	 
      
	
                DEFINITIONS
      AND INCORPORATION BY REFERENCE

              	 
      
	 	 
	
                SECTION
      1.01.  Definitions.

              	
                1

              
	
                SECTION
      1.02.  Other Definitions.

              	
                11

              
	
                SECTION
      1.03.  Incorporation by Reference of Trust Indenture
      Act

              	
                12

              
	
                SECTION
      1.04.  Rules of Construction.

              	
                13

              
	 	 
	
                ARTICLE
      TWO

              	 
      
	 
      	 
      
	
                THE
      SECURITIES

              	 
      
	 	 
	
                SECTION
      2.01.  Form and Dating

              	
                13

              
	
                SECTION
      2.02.  Execution and Authentication

              	
                13

              
	
                SECTION
      2.03.  Registrar, Paying Agent and Conversion
    Agent

              	
                14

              
	
                SECTION
      2.04.  Paying Agent to Hold Money in Trust

              	
                15

              
	
                SECTION
      2.05.  Holder Lists

              	
                15

              
	
                SECTION
      2.06.  Transfer and Exchange

              	
                15

              
	
                SECTION
      2.07.  Replacement Securities

              	
                15

              
	
                SECTION
      2.08.  Outstanding Securities

              	
                15

              
	
                SECTION
      2.09.  Temporary Securities

              	
                16

              
	
                SECTION
      2.10.  Cancelation

              	
                16

              
	
                SECTION
      2.11.  Defaulted Interest

              	
                16

              
	
                SECTION
      2.12.  CUSIP Numbers

              	
                16

              
	
                SECTION
      2.13.  Issuance of Additional Securities

              	
                17

              
	 	 
	
                ARTICLE
      THREE

              	 
      
	 
      	 
      
	
                REDEMPTION
      AND REPURCHASES

              	 
      
	 	 
	
                SECTION
      3.01.  Notice to Trustee

              	
                17

              
	
                SECTION
      3.02.  Selection of Securities to Be Redeemed

              	
                17

              
	
                SECTION
      3.03.  Notice of Redemption

              	
                18

              
	
                SECTION
      3.04.  Effect of Notice of Redemption

              	
                19

              
	
                SECTION
      3.05.  Deposit of Redemption Price

              	
                19

              
	
                SECTION
      3.06.  Securities Redeemed in Part

              	
                19

              
	
                SECTION
      3.07.  Optional Redemption

              	
                19

              
	
                SECTION
      3.08.  Repurchase of Securities at Option of the Holder on
      Specified Dates

              	
                20

              
	
                SECTION
      3.09.  Repurchase of Securities at Option of the Holder Upon a
      Fundamental Change

              	
                22

              
	
                SECTION
      3.10.  Effect of Repurchase Notice or Fundamental Change
      Repurchase Notice

              	
                25

              
	
                SECTION
      3.11.  Deposit of Repurchase Price or Fundamental Change
      Repurchase Price

              	
                27

              
	
                SECTION
      3.12.  Securities Repurchased in Part

              	
                27

              
	
                SECTION
      3.13.  Covenant to Comply with Securities Laws upon Repurchase
      of Securities

              	
                27

              
	
                SECTION
      3.14.  Repayment to the Company

              	
                27

              
	
                SECTION
      3.15.  Sinking Fund

              	
                28

              
	 	 
	
                ARTICLE
      FOUR

              	 
      
	 
      	 
      
	
                CONTINGENT
      INTEREST

              	 
      
	 	 
	
                SECTION
      4.01.  Contingent Interest

              	
                28

              
	
                SECTION
      4.02.  Payment of Contingent Interest

              	
                28

              
	
                SECTION
      4.03.  Contingent Interest Notification

              	
                28

              
	 	 
	
                ARTICLE
      FIVE

              	 
      
	 
      	 
      
	
                COVENANTS

              	 
      
	 	 
	
                SECTION
      5.01.  Payment of Securities

              	
                29

              
	
                SECTION
      5.02.  SEC Reports

              	
                29

              
	
                SECTION
      5.03.  Compliance Certificates

              	
                30

              
	
                SECTION
      5.04.  Maintenance of Office or Agency

              	
                30

              
	
                SECTION
      5.05.  Corporate Existence

              	
                31

              
	
                SECTION
      5.06.  Waiver of Stay, Extension or Usury Laws

              	
                31

              
	
                SECTION
      5.07.  Payment of Taxes and Other Claims

              	
                31

              
	
                SECTION
      5.08.  Maintenance of Properties and Insurance

              	
                32

              
	
                SECTION
      5.09.  Tax Treatment of Securities and Right to Set Off

              	
                32

              
	 	 
	
                ARTICLE
      SIX

              	 
      
	 
      	 
      
	
                SUCCESSOR
      CORPORATION

              	 
      
	 	 
	
                SECTION
      6.01.  When Company May Merge, etc

              	
                33

              
	
                SECTION
      6.02.  Successor Corporation Substituted

              	
                34

              
	 	 
	
                ARTICLE
      SEVEN

              	 
      
	 
      	 
      
	
                DEFAULTS
      AND REMEDIES

              	 
      
	 	 
	
                SECTION
      7.01.  Events of Default

              	
                34

              
	
                SECTION
      7.02.  Acceleration

              	
                36

              
	
                SECTION
      7.03.  Other Remedies

              	
                37

              
	
                SECTION
      7.04.  Waiver of Past Defaults

              	
                37

              
	
                SECTION
      7.05.  Control by Majority

              	
                37

              
	
                SECTION
      7.06.  Limitation on Remedies

              	
                38

              
	
                SECTION
      7.07.  Rights of Holders to Receive Payment and to
      Convert

              	
                38

              
	
                SECTION
      7.08.  Collection Suit by Trustee

              	
                38

              
	
                SECTION
      7.09.  Trustee May File Proofs of Claim

              	
                39

              
	
                SECTION
      7.10.  Priorities

              	
                39

              
	
                SECTION
      7.11.  Undertaking for Costs

              	
                39

              
	 	 
	
                ARTICLE
      EIGHT

              	 
      
	 
      	 
      
	
                TRUSTEE

              	 
      
	 	 
	
                SECTION
      8.01.  Duties of Trustee

              	
                39

              
	
                SECTION
      8.02.  Rights of Trustee

              	
                40

              
	
                SECTION
      8.03.  Individual Rights of Trustee

              	
                41

              
	
                SECTION
      8.04.  Trustee’s Disclaimer

              	
                42

              
	
                SECTION
      8.05.  Notice of Defaults

              	
                42

              
	
                SECTION
      8.06.  Reports by Trustee to Holders

              	
                42

              
	
                SECTION
      8.07.  Compensation and Indemnity

              	
                42

              
	
                SECTION
      8.08.  Replacement of Trustee

              	
                43

              
	
                SECTION
      8.09.  Successor Trustee by Merger, etc

              	
                44

              
	
                SECTION
      8.10.  Eligibility Disqualification

              	
                44

              
	
                SECTION
      8.11.  Preferential Collection of Claims Against
      Company

              	
                44

              
	 	 
	
                ARTICLE
      NINE

              	 
      
	 
      	 
      
	
                CONVERSION
      OF THE SECURITIES

              	 
      
	 	 
	
                SECTION
      9.01.  Conversion Privilege

              	
                44

              
	
                SECTION
      9.02.  Conversion Procedure

              	
                47

              
	
                SECTION
      9.03.  Taxes on Conversion

              	
                48

              
	
                SECTION
      9.04.  Company to Provide Stock

              	
                48

              
	
                SECTION
      9.05.  Adjustment of Base Conversion Price, the Base Conversion
      Rate and the Incremental Share Factor

              	
                49

              
	
                SECTION
      9.06.  No Adjustment

              	
                55

              
	
                SECTION
      9.07.  Equivalent Adjustments

              	
                56

              
	
                SECTION
      9.08.  Adjustment for Tax Purposes

              	
                56

              
	
                SECTION
      9.09.  Notice of Adjustment

              	
                57

              
	
                SECTION
      9.10.  Notice of Certain Transactions

              	
                57

              
	
                SECTION
      9.11.  Effect of Reclassification, Consolidation, Merger, Share
      Exchange or Sale on Conversion Privilege

              	
                58

              
	
                SECTION
      9.12.  Trustee’s Disclaimer

              	
                59

              
	
                SECTION
      9.13.  Voluntary Reduction

              	
                60

              
	
                SECTION
      9.14.  Payment Upon Conversion

              	
                60

              
	 	 
	
                ARTICLE
      TEN

              	 
      
	 
      	 
      
	
                AMENDMENTS,
      SUPPLEMENTS AND WAIVERS

              	 
      
	 	 
	
                SECTION
      10.01.  Without Consent of Holders.

              	
                61

              
	
                SECTION
      10.02.  With Consent of Holders

              	
                62

              
	
                SECTION
      10.03.  Compliance with Trust Indenture Act

              	
                64

              
	
                SECTION
      10.04.  Revocation and Effect of Consents

              	
                64

              
	
                SECTION
      10.05.  Notation on or Exchange of Securities

              	
                64

              
	
                SECTION
      10.06.  Trustee Protected

              	
                65

              
	 	 
	
                ARTICLE
      ELEVEN

              	 
      
	 
      	 
      
	
                GUARANTEES

              	 
      
	 	 
	
                SECTION
      11.01.  Unconditional Guarantee

              	
                65

              
	
                SECTION
      11.02.  Subsidiary Guarantors May Consolidate, etc., on Certain
      Terms

              	
                66

              
	
                SECTION
      11.03.  Addition of Subsidiary Guarantors

              	
                66

              
	
                SECTION
      11.04.  Release of a Subsidiary Guarantor

              	
                67

              
	
                SECTION
      11.05.  Limitation of Subsidiary Guarantor’s
      Liability

              	
                67

              
	
                SECTION
      11.06.  Contribution

              	
                68

              
	
                SECTION
      11.07.  [Intentionally Omitted.]

              	
                68

              
	
                SECTION
      11.08.  Severability

              	
                68

              
	 	 
	
                ARTICLE
      TWELVE

              	 
      
	 
      	 
      
	
                MISCELLANEOUS

              	 
      
	 	 
	
                SECTION
      12.01.  Trust Indenture Act Controls

              	
                68

              
	
                SECTION
      12.02.  Notices

              	
                68

              
	
                SECTION
      12.03.  Communication by Holders with Other
    Holders

              	
                69

              
	
                SECTION
      12.04.  Certificate and Opinion as to Conditions
      Precedent

              	
                69

              
	
                SECTION
      12.05.  Statements Required in Certificate or
      Opinion

              	
                70

              
	
                SECTION
      12.06.  Rules by Trustee and Agents

              	
                70

              
	
                SECTION
      12.07.  Legal Holidays

              	
                70

              
	
                SECTION
      12.08.  Governing Law

              	
                70

              
	
                SECTION
      12.09.  No Adverse Interpretation of Other
      Agreements

              	
                71

              
	
                SECTION
      12.10.  No Recourse Against Others

              	
                71

              
	
                SECTION
      12.11.  Successors

              	
                71

              
	
                SECTION
      12.12.  Duplicate Originals

              	
                71

              
	
                SECTION
      12.13.  Severability

              	
                71

              
	
                SECTION
      12.14.  Force Majeure

              	
                71

              
	 	 
	
                ARTICLE
      THIRTEEN

              	 
      
	 
      	 
      
	
                DISCHARGE
      OF INDENTURE

              	 
      
	 	 
	 
      	 
      
	
                SECTION
      13.01.  Discharge of Liability on Securities

              	
                71

              
	
                SECTION
      13.02.  Repayment to the Company

              	
                72

              
	 
      	 
      
	 
      	 
      
	 
      	 
      
	
                SIGNATURES

              	 
      
	
                APPENDIX

              	
                A-1

              
	
                EXHIBIT
      1 TO THE APPENDIX –

              	 
      
	
                FORM
      OF SECURITY

              	
                B-1

              
	
                SCHEDULE A
      – ADDITIONAL SHARES TABLE

              	 
      
	
                SCHEDULE B
      – PROJECTED PAYMENT SCHEDULE

              	 
      
	
                _________________

              	 
      
	
                NOTE:  This
      Table of Contents shall not, for any purpose, be deemed to be a part of
      this Indenture.

              	 
      
	 
      	 
      

      

       

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    INDENTURE,
dated as of May 27, 2008, among CHESAPEAKE ENERGY CORPORATION, an Oklahoma
corporation (the “Company”), the SUBSIDIARY GUARANTORS listed as signatories
hereto and THE BANK OF NEW YORK TRUST COMPANY, N.A., a national banking
association, as Trustee.

     

    Each
party agrees as follows for the benefit of the other parties and for the equal
and ratable benefit of the Holders of the Company’s 2.25% Contingent Convertible
Senior Notes due 2038:

     

    ARTICLE
ONE

    \

    DEFINITIONS
AND INCORPORATION BY REFERENCE

     

    SECTION
1.01. Definitions.

     

    “Acquirer
Common Stock” shall have the meaning set forth in the definition of “Public
Acquirer Change in Control”.

     

    “Acquisition
Value” of the Common Stock means, for each Trading Day in the Valuation Period,
the value of the consideration paid per share of Common Stock in connection with
a Public Acquirer Change in Control, (i) for any cash, 100% of the face
amount of such cash; (ii) for any Acquirer Common Stock, 100% of the
Closing Sale Price of such Acquirer Common Stock on each such Trading Day; and
(iii) for any other securities, assets or property, 102% of the fair market
value of such security, asset or property on each such Trading Day, as
determined by two independent nationally recognized investment banks selected by
the Trustee for this purpose.

     

    “Additional
Securities” means 2.25% Contingent Convertible Senior Notes due 2038 issued from
time to time after the Issue Date under the terms of this Indenture (other than
pursuant to Sections 2.06, 2.07, 2.09, 3.06, 3.12 or 9.02(d) of this
Indenture).

     

    “Adjusted
Consolidated Net Tangible Assets” or “ACNTA” means (without duplication), as of
the date of determination, (a) the sum of (i) discounted future net
revenue from proved oil and gas reserves of the Company and its Subsidiaries
calculated in accordance with SEC guidelines before any state or federal income
taxes, as estimated by petroleum engineers (which may include the Company’s
internal engineers) in a reserve report prepared as of the end of the Company’s
most recently completed fiscal year, as increased by, as of the date of
determination, the discounted future net revenue of (A) estimated proved
oil and gas reserves of the Company and its Subsidiaries attributable to any
acquisition consummated since the date of such year-end reserve report, and
(B) estimated proved oil and gas reserves of the Company and its
Subsidiaries attributable to extensions, discoveries and other additions and
upward revisions of estimates of proved oil and gas reserves due to exploration,
development or exploitation, production or other activities conducted or
otherwise occurring since the date of such year-end reserve report, which, in
the case of sub-clauses (A) and (B), would, in accordance with standard
industry practice, result in such increases as calculated in accordance with SEC
guidelines (utilizing the prices utilized in such year-end reserve report), and
decreased by, as of the date of determination, the discounted future net revenue
of (C) estimated proved oil and gas reserves of the Company and its
Subsidiaries produced or disposed of since the date of such year-end reserve
report and (D) reductions in the estimated oil and gas reserves of the
Company and its Subsidiaries since the date of such year-end reserve report
attributable to downward revisions of estimates of proved oil and gas reserves
due to exploration, development or exploitation, production or other activities
conducted or otherwise occurring since the date of such year-end reserve report
which, in the case of sub-clauses (C) and (D), would, in accordance with
standard industry practice, result in such decreases as 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 engineers,
(ii) the capitalized costs that are attributable to oil and gas properties
of the Company and its 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,
(iii) the Net Working Capital on a date no earlier than the date of the
Company’s latest annual or quarterly financial statements and (iv) the
greater of (I) the net book value on a date no earlier than the date of the
Company’s latest annual or quarterly financial statements and (II) the
appraised value, as estimated by independent appraisers, of other tangible
assets (including Investments in unconsolidated Subsidiaries) of the Company and
its Subsidiaries, as of a date no earlier than the date of the Company’s latest
audited financial statements, minus (b) the sum of (i) minority
interests, (ii) any gas balancing liabilities of the Company and its
Subsidiaries reflected as a long-term liability in the Company’s latest annual
or quarterly financial statements, (iii) the discounted future net revenue,
calculated in accordance with SEC guidelines (utilizing the prices utilized in
the Company’s year-end reserve report), attributable to reserves which are
required to be delivered to third parties to fully satisfy the obligations of
the Company and its Subsidiaries with respect to Volumetric Production Payments
on the schedules specified with respect thereto, (iv) the discounted future
net revenue, calculated in accordance with SEC guidelines, attributable to
reserves subject to Dollar-Denominated Production Payments which, based on the
estimates of production included in determining the discounted future net
revenue specified in (a) (i) above (utilizing the same prices utilized in
the Company’s year-end reserve report), would be necessary to fully satisfy the
payment obligations of the Company and its Subsidiaries with respect to
Dollar-Denominated Production Payments on the schedules specified with respect
thereto and (v) the discounted future net revenue, calculated in accordance
with SEC guidelines (utilizing the same prices utilized in the Company’s
year-end reserve report), attributable to reserves subject to participation
interests, overriding royalty interests or other interests of third parties,
pursuant to participation, partnership, vendor financing or other agreements
then in effect, or which otherwise are required to be delivered to third
parties.  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
Net Assets of a Subsidiary Guarantor” at any date shall mean the lesser of
(i) the amount by which the fair value of the property of such Subsidiary
Guarantor exceeds the total amount of liabilities, including, without
limitation, contingent liabilities (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date), but excluding
liabilities under the Guarantee of such Subsidiary Guarantor at such date and
(ii) the amount by which the present fair saleable value of the assets of
such Subsidiary Guarantor at such date exceeds the amount that will be required
to pay the probable liability of such Subsidiary Guarantor on its debts (after
giving effect to all other fixed and contingent liabilities incurred or assumed
on such date and after giving effect to any collection from any Subsidiary of
such Subsidiary Guarantor in respect of the obligations of such Subsidiary under
the Guarantee), excluding debt in respect of the Guarantee, as they become
absolute and matured.

     

    “Affiliate”
of any specified Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such specified Person. For the purposes of this definition, “control” when used
with respect to any 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.

     

    “Agent”
means any Registrar, Paying Agent, Conversion Agent or
co-registrar.

     

    “Applicable
Conversion Rate” means, for each $1,000 principal amount of Securities to be
converted (i) if the Applicable Stock Price for such Securities is less
than or equal to the Base Conversion Price, the Base Conversion Rate and
(ii) if the Applicable Stock Price for such Securities is greater than the
Base Conversion Price, a number determined in accordance with the following
formula:

     

    
      	
              Base
      Conversion Rate  +

            	
              [

            	
              (Applicable Stock Price-Base Conversion Price) x
      Incremental Share Factor

            	
              ]

            
	 
      	
              Applicable
      Stock Price

            

    

    

    “Applicable
Procedures” means, with respect to any transfer or transaction involving a
Global Security or beneficial interests therein, the rules and procedures of the
Depository for such Global Security, in each case to the extent applicable to
such transaction and as in effect from time to time.

     

    “Applicable
Stock Price” means, for any Securities to be converted, the average of the
Closing Sale Prices of the Common Stock over the applicable Cash Settlement
Averaging Period.

     

    “Base
Conversion Price” means, in respect of each $1,000 principal amount of
Securities, $85.89, subject to adjustments set forth in Section 9.05
hereof.

     

    “Base
Conversion Rate” means, in respect of each $1,000 principal amount of
Securities, a number of shares of Common Stock (initially approximately 11.6428)
determined by dividing $1,000 by the Base Conversion Price, subject to
adjustments set forth in Section 9.05 hereof.

     

    “Board of
Directors” means, with respect to any Person, the Board of Directors of such
Person or any committee of the Board of Directors of such Person duly authorized
to act on behalf of the Board of Directors of such Person.

     

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

     

    “Business
Day” means any day on which the New York Stock Exchange, Inc. is open for
trading and which is not a Legal Holiday.

     

    “Capital
Stock” means, with respect to any Person, any and all shares, interests,
participations or other equivalents (however designated) of corporate stock or
partnership or limited liability company interests and any and all warrants,
options and rights with respect thereto (whether or not currently exercisable),
including each class of common stock and preferred stock of such
Person.

     

    “Capitalized
Lease Obligations” of any Person means the obligations of such Person to pay
rent or other amounts under a lease of property, real or personal, that is
required to be capitalized for financial reporting purposes in accordance with
GAAP, and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.

     

    “Closing
Sale Price” on any date of common stock means the closing sale price per share
(or if no closing sale price is reported, the average of the closing bid and ask
prices or, if more than one in either case, the average of the average closing
bid and the average closing ask prices) on such date as reported on the
principal United States securities exchange on which the applicable common stock
is traded or, if the common stock is not listed on a United States national or
regional securities exchange, as reported by the NASDAQ Global Market or NASDAQ
Global Select Market or by the National Quotation Bureau Incorporated. In the
absence of such a quotation, the Closing Sale Price of the relevant common stock
will be an amount determined in good faith by the Company’s Board of Directors
to be the fair value of the relevant common stock.  The Closing Sale
Price of any Acquirer Common Stock shall be determined in the same
manner.

     

    “Common
Stock” shall mean the common stock, par value $0.01 per share, of the Company,
or any other class of stock resulting from successive changes or
reclassifications of such common stock consisting solely of changes in par
value, or from par value to no par value, or as a result of a subdivision,
combination, merger, consolidation or similar transaction in which the Company
is a constituent corporation.

     

    “Company”
means the party named as such above, until a successor replaces such Person in
accordance with the terms of this Indenture, and thereafter means such
successor.

     

    “Corporate
Trust Office” means the principal office of the Trustee at which at any time its
corporate trust business shall be administered, which office at the dated hereof
is located at 2 N. LaSalle Street, Suite 1020, Chicago, IL 60602,
Attention:  Corporate Trust Administration, or such other address as
the Trustee may designate from time to time by notice to the Holders and the
Company, or the principal corporate trust office of any successor Trustee (or
such other address as such successor Trustee may designate from time to time by
notice to the Holders and the Company).

     

    “Credit
Facilities” means, one or more debt facilities (including, without limitation,
the Company’s existing credit facility) or commercial paper facilities, in each
case with banks, investment banks, insurance companies, mutual funds and/or
other institutional lenders providing for revolving credit loans, term loans,
receivables financing (including through the sale of receivables to such lenders
or to special purpose entities formed to borrow from (or sell receivables to)
such lenders against such receivables) or letters of credit, in each case, as
amended, extended, restated, renewed, refunded, replaced or refinanced (in each
case with Credit Facilities), supplemented or otherwise modified (in whole or in
part and without limitation as to amount, terms, conditions, covenants and other
provisions) from time to time.

     

    “Currency
Hedge Obligations” means, at any time as to the Company and its Subsidiaries,
the obligations of any such Person at such time that were incurred in the
ordinary course of business pursuant to any foreign currency exchange agreement,
option or futures contract or other similar agreement or arrangement designed to
protect against or manage such Person’s or any of its Subsidiaries’ exposure to
fluctuations in foreign currency exchange rates.

     

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

     

    “De
Minimis Guaranteed Amount” means a principal amount of Indebtedness that does
not exceed $5,000,000.

     

    “Disqualified
Stock” means any Capital Stock of the Company or any Subsidiary of the Company
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any event
or with the passage of time, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or is redeemable at the option of the
holder thereof, in whole or in part, on or prior to the Maturity Date or which
is exchangeable or convertible into debt securities of the Company or any
Subsidiary of the Company, except to the extent that such exchange or conversion
rights cannot be exercised prior to the Maturity Date.

     

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

     

    “Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the SEC thereunder.

     

    “Fundamental
Change” means any of the following events:  (i) the sale, lease
or transfer, in one or a series of related transactions, of all or substantially
all of the Company’s assets to any Person or group (as such term is used in
Section 13(d)(3) of the Exchange Act); (ii) the adoption of a plan,
relating to the liquidation or dissolution of the Company; (iii) the
acquisition, directly or indirectly, by any Person or group (as such term is
used in Section 13(d)(3) of the Exchange Act) of beneficial ownership (as
defined in Rule 13d-3 under the Exchange Act, except that such Person shall
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 passage of time) of more than 50% of the aggregate voting power of the
Voting Stock of the Company (for the purposes of this definition, such other
Person or group shall be deemed to beneficially own any Voting Stock of a
specified corporation held by a parent corporation, if such other Person or
group is the beneficial owner (as defined above), directly or indirectly, of
more than 35% of the voting power of the Voting Stock of such parent
corporation); (iv) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of Directors of the
Company (together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of the Company
was approved by a vote of 66 2/3% of the directors of the Company then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of the Company then in
office; or (v) the Common Stock ceases to be listed on a national
securities exchange or quoted on the NASDAQ Global Market or NASDAQ Global
Select Market or another over-the-counter market in the United States; provided, however, that a
Fundamental Change will not be deemed to have occurred in the case of a merger
or consolidation, if (i) at least 90% of the consideration (excluding cash
payments for fractional shares and cash payments pursuant to dissenters’
appraisal rights) in the merger or consolidation consists of common stock (or
depositary receipts or shares in respect thereof) of a United States company
traded on a national securities exchange or quoted on the NASDAQ Global Market
or NASDAQ Global Select Market (or which will be so traded or quoted when issued
or exchanged in connection with such transaction) and (ii) as a result of
such merger or consolidation the Securities are convertible into cash and, if
applicable, the consideration received by holders of Common Stock.

     

    “GAAP”
means generally accepted accounting principles as in effect in the United States
of America as of the Issue Date.

     

    “Guarantee”
means, individually and collectively, the guarantees given by the Subsidiary
Guarantors pursuant to Article Eleven hereof.

     

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

     

    “Incremental
Share Factor” means 5.8214, subject to adjustments set forth in
Section 9.05 hereof.

     

    “Indebtedness”
means, without duplication, with respect to any Person, (a) all obligations
of such Person (i) in respect of borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such Person or only to a
portion thereof), (ii) evidenced by bonds, notes, debentures or similar
instruments, (iii) representing the balance deferred and unpaid of the
purchase price of any property or services (other than accounts payable or other
obligations arising in the ordinary course of business), (iv) evidenced by
bankers’ acceptances or similar instruments issued or accepted by banks,
(v) for the payment of money relating to a Capitalized Lease Obligation, or
(vi) evidenced by a letter of credit or a reimbursement obligation of such
Person with respect to any letter of credit; (b) all net obligations of
such Person under Interest Rate Hedging Agreements, Oil and Gas Hedging
Contracts and Currency Hedge Obligations, except to the extent such net
obligations are taken into account in the determination of future net revenues
from proved oil and gas reserves for purposes of the calculation of Adjusted
Consolidated Net Tangible Assets; (c) all liabilities of others of the kind
described in the preceding clauses (a) or (b) that such Person has guaranteed or
that are otherwise its legal liability (including, with respect to any
Production Payment, any warranties or guaranties of production or payment by
such Person with respect to such Production Payment but excluding other
contractual obligations of such Person with respect to such Production Payment);
(d) Indebtedness (as otherwise defined in this definition) of another
Person secured by a Lien on any asset of such Person, whether or not such
Indebtedness is assumed by such Person, the amount of such obligations being
deemed to be the lesser of (1) the full amount of such obligations so
secured, and (2) the fair market value of such asset, as determined in good
faith by the Board of Directors of such Person, which determination shall be
evidenced by a Board Resolution, (e) with respect to such Person, the
liquidation preference or any mandatory redemption payment obligations in
respect of Disqualified Stock; (f) the aggregate preference in respect of
amounts payable on the issued and outstanding shares of Preferred Stock of any
of such Person’s Subsidiaries in the event of any voluntary or involuntary
liquidation, dissolution or winding up (excluding any such preference
attributable to such shares of Preferred Stock that are owned by such Person or
any of its Subsidiaries; provided that if such
Person is the Company, such exclusion shall be for such preference attributable
to such shares of Preferred Stock that are owned by the Company or any of its
Subsidiaries); and (g) any and all deferrals, renewals, extensions,
refinancings and refundings (whether direct or indirect) of, or amendments,
modifications or supplements to, any liability of the kind described in any of
the preceding clauses (a), (b), (c), (d), (e), (f) or this clause (g),
whether or not between or among the same parties.  Subject to clause
(c) of the preceding sentence, neither Dollar-Denominated Production
Payments nor Volumetric Production Payments shall be deemed to be
Indebtedness.

     

    “Indenture”
means this Indenture, as amended or supplemented from time to time in accordance
with the terms hereof.

     

    “Interest
Rate Hedging Agreements” means, with respect to the Company and its
Subsidiaries, the obligations of such Persons under (i) interest rate swap
agreements, interest rate cap agreements and interest rate collar agreements and
(ii) other agreements or arrangements designed to protect any such Person
or any of its Subsidiaries against fluctuations in interest rates.

     

    “Investment”
of any Person means (i) all investments by such Person in any other Person
in the form of loans, advances or capital contributions, (ii) all
guarantees of Indebtedness or other obligations of any other Person by such
Person, (iii) all purchases (or other acquisitions for consideration) by
such Person of assets, Indebtedness, Capital Stock or other securities of any
other Person and (iv) all other items that would be classified as
investments (including, without limitation, purchases of assets outside the
ordinary course of business) or advances on a balance sheet of such Person
prepared in accordance with GAAP.

     

    “Issue
Date” means May 27, 2008.

     

    “Lien”
means, with respect to any Person, any mortgage, pledge, lien, encumbrance,
easement, restriction, covenant, right-of-way, charge or adverse claim affecting
title or resulting in an encumbrance against real or personal property of such
Person, or a security interest of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, any option,
right of first refusal or other similar agreement to sell, in each case securing
obligations of such Person and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statute or statutes)
of any jurisdiction).

     

    “Market
Disruption Event” means the occurrence or existence during the one-half hour
period ending on the scheduled close of trading on any Trading Day for the
Common Stock of any material suspension or limitation imposed on trading (by
reason of movements in price exceeding limits permitted by the stock exchange or
otherwise) in the Common Stock or in any options, contracts or future contracts
relating to the Common Stock.

     

    “Market
Value” means the average Closing Sale Price of the Common Stock for a five
consecutive Trading-Day period ending immediately prior to the date of
determination.

     

    “Maturity
Date” means December 15, 2038.

     

    “Net
Working Capital” means (i) all current assets of the Company and its
Subsidiaries, minus (ii) all current liabilities of the Company and its
Subsidiaries, except current liabilities included in Indebtedness.

     

    “NYSE”
means the New York Stock Exchange, Inc.

     

    “Officer”
means, with respect to any Person, the Chairman of the Board, the President, any
Vice President, the Chief Financial Officer or the Treasurer of such
Person.

     

    “Officers’
Certificate” means, with respect to any Person, a certificate signed by two
Officers or by an Officer and either the Secretary, or an Assistant Secretary or
Assistant Treasurer of such Person.  One of the Officers signing an
Officers’ Certificate given pursuant to Section 5.03(a) shall be the principal
executive, financial or accounting officer of the Person delivering such
certificate.

     

    “Oil and
Gas Hedging Contracts” means any oil and gas purchase or hedging agreement, and
other agreement or arrangement, in each case, that is designed to provide
protection against price fluctuations of oil, gas or other
commodities.

     

    “Opinion
of Counsel” means a written opinion from legal counsel.  The counsel
may be an employee of or counsel to the Company (or any Subsidiary Guarantor, if
applicable).

     

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

     

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

     

    “Production
Payments” means, collectively, Dollar-Denominated Production Payments and
Volumetric Production Payments.

     

    “Public
Acquirer Change in Control” means any transaction described in clause (iii) of
the definition of Fundamental Change where the acquirer, or any entity that is a
direct or indirect “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act) of more than 50% of the aggregate ordinary voting power of all
shares of such acquirer’s Capital Stock that are entitled to vote generally in
the election of directors, but in each case other than the Company, has a class
of common stock (or depositary shares or receipts in respect thereof) traded on
a United States national securities exchange or quoted on the NASDAQ Global
Market or NASDAQ Global Select Market or which will be so traded or quoted when
issued or exchanged in connection with such Fundamental
Change.  “Acquirer Common Stock” means, with respect to a Public
Acquirer Change in Control, such acquirer’s or other entity’s class of common
stock (or depositary shares or receipts in respect thereof) traded on a United
States national securities exchange or quoted on the NASDAQ Global Market or
NASDAQ Global Select Market or which will be so traded or quoted when issued or
exchanged in connection with such change in control.

     

    “Quarter”
shall mean any three month period ending March 31, June 30,
September 30 or December 31 in any year.

     

    “SEC”
means the Securities and Exchange Commission.

     

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

     

    “Significant
Subsidiary” means any subsidiary that would constitute a “significant
subsidiary” within the meaning of Article 1 of Regulation S-X
promulgated under the Exchange Act.

     

    “Subsidiary”
means any subsidiary of the Company.  A “subsidiary” of any Person
means (i) a corporation a majority of whose Voting Stock is at the time,
directly or indirectly, owned by such Person, by one or more subsidiaries of
such Person or by such Person and one or more subsidiaries of such Person,
(ii) a partnership in which such Person or a subsidiary of such Person is,
at the date of determination, a general or limited partner of such partnership,
but only if such Person or its subsidiary is entitled to receive more than 50
percent of the assets of such partnership upon its dissolution, or
(iii) any other Person (other than a corporation or partnership) in which
such Person, directly or indirectly, at the date of determination thereof, has
(x) at least a majority ownership interest or (y) the power to elect
or direct the election of a majority of the directors or other governing body of
such Person.

     

    “Subsidiary
Guarantor” means (i) each of the Subsidiaries who executes this Indenture
as a subsidiary guarantor on the Issue Date; and (ii) each of the other
Subsidiaries that becomes a guarantor of the Securities in compliance with the
provisions of Article Eleven of this Indenture.

     

    “TIA”
means the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb) as in effect on the date of this Indenture,
except as provided in Section 10.03.

     

    “Trading
Day” means a day during which (i) trading in securities generally occurs on the
New York Stock Exchange or, if the Common Stock is not listed on the New York
Stock Exchange, on the principal other national or regional securities exchange
on which the Common Stock is then listed or, if the Common Stock is not listed
on a national or regional securities exchange, on the NASDAQ Global Market or
NASDAQ Global Select Market or, if the Common Stock is not quoted on the NASDAQ
Global Market or NASDAQ Global Select Market, on the principal other market on
which the Common Stock is then traded and (ii) there is no Market Disruption
Event.

     

    “Trading
Price” of the Securities on any date of determination means the average of the
secondary market bid quotations per $1,000 principal amount of Securities
obtained by the Trustee for $5,000,000 principal amount of the Securities at
approximately 3:30 p.m., New York time, on such determination date from two
independent nationally recognized securities dealers the Company selects, which
may include one or more of the Underwriters of the Securities, provided that if at
least two such bids cannot reasonably be obtained by the Trustee, but one such
bid can reasonably be obtained by the Trustee, such one bid will be used and
provided further that if the
Trustee cannot reasonably obtain at least one such bid or in the reasonable
judgment of the Company the bid quotations are not indicative of the secondary
market value of the Securities, then (a) for purposes of Article Four, the
Trading Price of the Securities shall equal (i) the Applicable Conversion
Rate of the Securities multiplied by (ii) the Closing Sale Price of the Common
Stock on such determination date and (b) for purposes of Section 9.01, the
Trading Price of the Securities shall be deemed to be less than 95% of the
Applicable Conversion Rate of the Securities multiplied by the Closing Sale
Price of the Common Stock on such determination date.

     

    “Trust
Officer” means any officer within the corporate trust department of the Trustee,
including any vice president, assistant vice president, assistant secretary,
assistant treasurer, trust officer or any other officer of the Trustee who
customarily performs functions similar to those performed by the Persons who at
the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of such person’s knowledge of and familiarity with
the particular subject and who shall have direct responsibility for the
administration of this Indenture.

     

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

     

    “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” means, with respect to any Person, securities of any class or classes of
Capital Stock in such Person entitling the holders thereof (whether at all times
or only so long as no senior class of stock has voting power by reason of
contingency) to vote in the election of members of the Board of Directors or
other governing body of such Person.

     

    SECTION
1.02. Other
Definitions.

     

    Other
terms used in this Indenture are defined in the Appendix or in the Section
indicated below:

     

    

    
      	
              Term

            	
              Defined in
      Section

            
	
              “Additional
      Shares”                                                                                             

            	
              9.05

            
	
              “Appendix”                                                                                             

            	
              2.01

            
	
              “Bankruptcy
      Law”                                                                                             

            	
              7.01

            
	
              “Cash
      Settlement Averaging
      Period”                                                                                             

            	
              9.14

            
	
              “Certificated
      Common
      Stock”                                                                                             

            	
              9.04

            
	
              “Company
      Fundamental Change Repurchase Notice”

            	
              3.09

            
	
              “Company
      Repurchase
      Notice”                                                                                             

            	
              3.08

            
	
              “Contingent
      Interest”                                                                                             

            	
              4.01

            
	
              “Contingent
      Payment
      Regulations”                                                                                             

            	
              5.09

            
	
              “Conversion
      Agent”                                                                                             

            	
              2.03

            
	
              “Conversion
      Date”                                                                                             

            	
              9.02

            
	
              “Custodian”                                                                                             

            	
              7.01

            
	
              “Daily
      Conversion
      Value”                                                                                             

            	
              9.14

            
	
              “Daily
      Settlement
      Amount”                                                                                             

            	
              9.14

            
	
              “Distribution
      Threshold
      Amount”                                                                                             

            	
              9.05

            
	
              “Effective
      Date”                                                                                             

            	
              9.05

            
	
              “Event
      of
      Default”                                                                                             

            	
              7.01

            
	
              “Ex-Dividend
      Date”                                                                                             

            	
              9.01

            
	
              “Fundamental
      Change Repurchase
      Date”                                                                                             

            	
              3.09

            
	
              “Fundamental
      Change Repurchase
      Notice”                                                                                             

            	
              3.09

            
	
              “Fundamental
      Change Repurchase
      Price”                                                                                             

            	
              3.09

            
	
              “Funding
      Guarantor”                                                                                             

            	
              11.06

            
	
              “Guarantee”                                                                                             

            	
              11.01

            
	
              “Legal
      Holiday”                                                                                             

            	
              12.07

            
	
              “Merger
      Event”                                                                                             

            	
              9.11

            
	
              “Non-Stock
      Change in
      Control”                                                                                             

            	
              9.05

            
	
              “Paying
      Agent”                                                                                             

            	
              2.03

            
	
              “Payment
      Default”                                                                                             

            	
              7.01

            
	
              “Reference
      Property”                                                                                             

            	
              9.11

            
	
              “Registrar”                                                                                             

            	
              2.03

            
	
              “Repurchase
      Date”                                                                                             

            	
              3.08

            
	
              “Repurchase
      Notice”                                                                                             

            	
              3.08

            
	
              “Repurchase
      Price”                                                                                             

            	
              3.08

            
	
              “Securities”                                                                                             

            	
              Appendix

            
	
              “Settlement
      Amount”                                                                                             

            	
              9.14

            
	
              “Share
      Price”                                                                                             

            	
              9.05

            
	
              “Underwriters”                                                                                             

            	
              Appendix

            
	
              “Valuation
      Period”                                                                                             

            	
              9.05

            

    

    

     

    SECTION
1.03. Incorporation by Reference
of Trust Indenture Act.  Whenever this Indenture refers to a
provision of the TIA, the provision is incorporated by reference in and made a
part of this Indenture. The following TIA terms, if used in this Indenture, have
the following meanings:

     

    “Commission”
means the SEC.

     

    “indenture
securities” means the Securities and the Guarantees.

     

    “indenture
security holder” means a Holder.

     

    “indenture
to be qualified” means this Indenture.

     

    “indenture
trustee” or “institutional trustee” means the Trustee.

     

    “obligor”
on the indenture securities means the Company, the Subsidiary Guarantors and any
other obligor on the Securities or the Guarantees.

     

    All other
TIA terms used in this Indenture that are defined by the TIA, defined by TIA
reference to another statute or defined by SEC rule have the meanings assigned
to them therein.

     

    SECTION
1.04. Rules of
Construction.

     

    Unless
the context otherwise requires:

     

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

     

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

     

    (3) “or” is
not exclusive;

     

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

     

    (5) any
gender used in this Indenture shall be deemed to include the neuter, masculine
or feminine genders;

     

    (6) provisions
apply to successive events and transactions; and

     

    (7) “herein,”
“hereof” and other words of similar import refer to this Indenture as a whole
and not to any particular Article, Section or other Subdivision.

     

    ARTICLE
TWO

     

    THE
SECURITIES

     

    SECTION
2.01. Form and
Dating.  Provisions relating to the Securities are set forth in
the Appendix attached hereto (the “Appendix”) which is hereby incorporated in
and expressly made part of this Indenture.  The Securities and the
Trustee’s certificate of authentication shall be substantially in the form of
Exhibit 1 to the Appendix, which is hereby incorporated in and expressly made a
part of this Indenture.  The Securities may have notations, legends or
endorsements required by law, stock exchange rule, agreements to which the
Company is subject, if any, or usage (provided that any
such notation, legend or endorsement is in a form acceptable to the Company and
to the Trustee).  Each Security shall be dated the date of its
authentication.  The terms of the Securities set forth in the
Appendix and Exhibit 1 are part of the terms of this
Indenture.

     

    SECTION
2.02. Execution and
Authentication.  Two Officers shall sign the Securities for the
Company by manual or facsimile signature.

     

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

     

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

     

    On the
Issue Date, the Trustee shall authenticate and deliver $1,380,000,000 of
Securities and, at any time and from time to time thereafter, the Trustee shall
authenticate and deliver Securities for original issue in an aggregate principal
amount specified in such order, in each case upon a written order of the Company
signed by two Officers or by an Officer and either an Assistant Treasurer or an
Assistant Secretary of the Company.  Such order shall specify the
amount of the Securities to be authenticated and the date on which the original
issue of Securities is to be authenticated.

     

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

     

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

     

    The
Company shall enter into an appropriate agency agreement with any Registrar,
Paying Agent, Conversion Agent or co-registrar not a party to this Indenture,
which shall incorporate the terms of the TIA.  The agreement shall
implement the provisions of this Indenture that relate to such
agent.  The Company shall notify the Trustee of the name and address
of any such agent and shall furnish the Trustee with an executed counterpart of
any such agency agreement.  If the Company fails to maintain a
Registrar, Paying Agent or Conversion Agent, the Trustee shall act as such and
shall be entitled to appropriate compensation therefor pursuant to Section
8.07.  The Company or any wholly owned Subsidiary incorporated or
organized within The United States of America may act as Paying Agent,
Registrar, Conversion Agent, co-registrar or transfer agent.

     

    The
Company initially appoints the Trustee as Registrar, Paying Agent and Conversion
Agent in connection with the Securities.

     

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

     

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

     

    SECTION
2.06. Transfer and
Exchange.  The Securities shall be issued in registered form
and shall be transferable only upon the surrender of a Security for registration
of transfer.  When a Security is presented to the Registrar or a
co-registrar with a request to register a transfer, the Registrar shall register
the transfer as requested if the requirements of this Indenture and
Section 8-401(a) of the Uniform Commercial Code are met.  When
Securities are presented to the Registrar or a co-registrar with a request to
exchange them for an equal principal amount of Securities of other
denominations, the Registrar shall make the exchange as requested if the same
requirements are met.

     

    SECTION
2.07. Replacement
Securities.  If a mutilated Security is surrendered to the
Registrar or if the Holder of a Security claims that the Security has been lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee shall
authenticate a replacement Security if the requirements of Section 8-405 of
the Uniform Commercial Code are met and the Holder satisfies any other
reasonable requirements of the Trustee.  Such Holder shall furnish an
indemnity bond sufficient in the judgment of the Company and the Trustee to
protect the Company, the Trustee, the Paying Agent, the Registrar and any
co-registrar from any loss which any of them may suffer if a Security is
replaced.  The Company and the Trustee may charge the Holder for their
expenses in replacing a Security.

     

    Every
replacement Security is an additional obligation of the Company.

     

    SECTION
2.08. Outstanding
Securities.  Securities outstanding at any time are all
Securities authenticated by the Trustee except for those canceled by it, those
delivered to it for cancelation and those described in this Section as not
outstanding.  A Security does not cease to be outstanding because the
Company or an Affiliate of the Company holds the Security.

     

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

     

    If the
Paying Agent segregates and holds in trust, in accordance with this Indenture,
on a redemption date or the Maturity Date money sufficient to pay all principal
and interest payable on that date with respect to the Securities (or portions
thereof) to be redeemed or maturing, as the case may be, then on and after that
date such Securities (or portions thereof) cease to be outstanding and interest
on them ceases to accrue.

     

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

     

    SECTION
2.10. Cancelation.  The
Company at any time may deliver Securities to the Trustee for
cancelation.  The Registrar and the Paying Agent shall forward to the
Trustee any Securities surrendered to them for registration of transfer,
exchange or payment.  The Trustee and no one else shall cancel and
dispose of (subject to the record retention requirements of the Exchange Act)
all Securities surrendered for registration of transfer, exchange, payment or
cancelation in its customary manner and upon request shall deliver a certificate
of such disposal to the Company unless the Company directs the Trustee to
deliver canceled Securities to the Company.  Any Securities purchased
by the Company may, to the extent permitted by law, be reissued or resold or
may, at its option, be surrendered to the Trustee for
cancelation.  The Company may not issue new Securities to replace
Securities it has delivered to the Trustee for cancelation.

     

    SECTION
2.11. Defaulted
Interest.  If the Company defaults in a payment of interest on
the Securities, the Company shall pay defaulted interest (plus interest on such
defaulted interest to the extent lawful) at the rate borne by the Securities in
any lawful manner.  The Company may pay the defaulted interest to the
persons who are Holders on a subsequent special record date.  The
Company shall fix or cause to be fixed any such special record date and payment
date to the reasonable satisfaction of the Trustee and shall promptly mail to
each Holder a notice that states the special record date, the payment date and
the amount of defaulted interest to be paid.

     

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

     

    SECTION
2.13. Issuance of Additional
Securities.  The Company shall be entitled to issue Additional
Securities under this Indenture which shall have identical terms as the
Securities issued on the Issue Date, other than with respect to the date of
issuance and issue price.  The Securities issued on the Issue Date and
any Additional Securities shall be treated as a single class for all purposes
under this Indenture.

     

    With
respect to any Additional Securities, the Company shall set forth in a
resolution of the Board of Directors and an Officers’ Certificate, a copy of
each which shall be delivered to the Trustee, the following
information:

     

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

     

    (2) the issue
price, the issue date and the CUSIP number of such Additional Securities; provided, however, that no
Additional Securities may be issued unless such Additional Securities are (a)
fungible with the Securities initially issued hereunder for U.S. tax purposes or
(b) issued under a different CUSIP number from that of the Securities initially
issued hereunder.

     

    ARTICLE
THREE

     

    REDEMPTION
AND REPURCHASES

     

    SECTION
3.01. Notice to
Trustee.  If the Company elects to redeem Securities pursuant
to the optional redemption provisions of Section 3.07 and Paragraph 5 of
the Securities, it shall furnish to the Trustee and the Registrar, at least 45
days but not more than 60 days before the redemption date (unless the Trustee
consents to a shorter period in writing), an Officers’ Certificate setting forth
the redemption date, the principal amount of Securities to be redeemed and the
redemption price.

     

    SECTION
3.02. Selection of Securities to
Be Redeemed.  If less than all of the Securities are to be
redeemed at any time, the Trustee shall select the Securities to be redeemed pro
rata, by lot or, if the Securities are listed on any securities exchange, by any
other method that the Trustee considers fair and appropriate and that complies
with the requirements of such exchange; provided, however, that no
Securities with a principal amount of $1,000 or less will be redeemed in
part.  The Trustee shall make the selection from outstanding
Securities not previously called for redemption not less than 30 nor more than
60 days prior to the redemption date. Securities and portions of them it selects
shall be in amounts of $1,000 or whole multiples of
$1,000.  Provisions of this Indenture that apply to Securities called
for redemption also apply to portions of Securities called for redemption. The
Trustee shall notify the Company promptly of the Securities or portions of
Securities selected for redemption.

     

    SECTION
3.03. Notice of
Redemption.  (a)  At least 30 days but not more than
60 days before a redemption date, the Company shall mail a notice of redemption
by first-class mail to each Holder of Securities to be redeemed at such Holder’s
registered address.

     

    The
notice shall identify the Securities (including CUSIP numbers) to be redeemed
and shall state:

     

    (1) the
redemption date;

     

    (2) the
redemption price, the Base Conversion Rate, the Applicable Conversion Rate
estimated as of a recent date and, to the extent known at the time of such
notice, the amount of accrued but unpaid interest payable with respect to each
$1,000 principal amount of the Securities on the redemption date;

     

    (3) the name
and address of the Paying Agent and Conversion Agent;

     

    (4) that
Securities called for redemption may be converted at any time before the close
of business on the Business Day immediately preceding the redemption
date;

     

    (5) that
Holders who want to convert Securities must satisfy the requirements set forth
in the Securities and this Indenture;

     

    (6) the
aggregate principal amount of Securities being redeemed;

     

    (7) that
Securities called for redemption must be surrendered to the Paying Agent at the
address specified in such notice to collect the redemption price, together with
accrued but unpaid interest thereon;

     

    (8) that,
unless the Company defaults in the payment of the redemption price or accrued
interest, interest on Securities called for redemption ceases to accrue on and
after the redemption date and the only remaining right of the Holders is to
receive payment of the redemption prices in respect of the Securities upon
surrender to the Paying Agent of the Securities;

     

    (9) if any
Security is being redeemed in part, the portion of the principal amount of such
Security to be redeemed and that, after the redemption date, upon surrender of
such Security, a new Security or Securities in principal amount equal to the
unredeemed portion will be issued in the name of the Holder thereof upon
cancelation of the Security or Securities being redeemed; and

     

    (10) the CUSIP
number of the Securities.

     

    (b) At the
Company’s written request, the Trustee shall give the notice of redemption
required in Section 3.03(a) in the Company’s name and at the Company’s expense;
provided, however, that the
Company shall deliver to the Trustee, at least 15 days prior to the date on
which the Company requests that the Trustee give such notice (unless the Trustee
consents to a shorter notice period in writing), an Officers’ Certificate
requesting that the Trustee give such notice and setting forth the information
to be stated in such notice as provided in Section 3.03(a).

     

    SECTION
3.04. Effect of Notice of
Redemption.  Once notice of redemption is mailed in accordance
with Section 3.03, Securities called for redemption become due and payable on
the redemption date at the redemption price, together with accrued but unpaid
interest thereon, except for Securities which are converted in accordance with
the terms of this Indenture.  Upon surrender to the Paying Agent, such
Securities shall be paid at the redemption price, plus accrued and unpaid
interest up to but not including the redemption date (subject to the right of
Holders of record on the relevant record date to receive interest due on the
related interest payment date).  Failure to give notice or any defect
in the notice to any Holder shall not affect the validity of the notice to any
other Holder.

     

    SECTION
3.05. Deposit of Redemption
Price.  Prior to 11:00 a.m., New York time, on the
redemption date, the Company shall deposit with the Paying Agent (or if the
Company or a Subsidiary is the Paying Agent, shall segregate and hold in trust)
funds available on the redemption date sufficient to pay the redemption price
of, and accrued and unpaid interest on, the Securities to be redeemed on that
date.  The Paying Agent shall promptly return to the Company any money
so deposited which is not required for that purpose upon the written request of
the Company, except with respect to monies owed as obligations to the Trustee
pursuant to Article Eight.

     

    If any
Security called for redemption shall not be so paid upon redemption because of
the failure of the Company to comply with the preceding paragraph, interest will
continue to be payable on the unpaid principal and premium, if any, including
from the redemption date until such principal and premium, if any, is paid, and,
to the extent lawful, on any interest not paid on such unpaid principal, in each
case at the rate provided in the Securities and in Section 4.01
hereof.

     

    SECTION
3.06. Securities Redeemed in
Part.  Upon surrender of a Security that is to be redeemed in
part, the Company shall issue and the Trustee shall authenticate for the Holder,
at the expense of the Company, a new Security equal in aggregate amount to the
unredeemed portion of the Security surrendered.

     

    SECTION
3.07. Optional
Redemption.  On or after December 15, 2018, the Company, at its
option, may redeem the Securities in whole at any time or in part from time to
time, in any integral multiple of $1,000, for cash at a price equal to 100% of
the principal amount of the Securities to be redeemed, together with accrued but
unpaid interest thereon, up to but not including the redemption date; provided that if the
redemption date is between the close of business on a record date and the
opening of business on the related interest payment date, accrued but unpaid
interest will be payable to the Holders in whose names the Securities are
registered at the close of business on the relevant record date.

     

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

     

    SECTION
3.08. Repurchase of Securities at
Option of the Holder on Specified Dates.  (a)  At the
option of the Holder, the Company shall repurchase on December 15, 2018, 2023,
2028 and 2033 (each, a “Repurchase Date”) all or a portion of the Securities
held by such Holder for cash at a price per Security equal to 100% of the
aggregate principal amount of the Security (the “Repurchase Price”), together
with accrued but unpaid interest thereon, up to but not including the Repurchase
Date; provided
that if the redemption date is between the close of business on a record date
and the opening of business on the related interest payment date, accrued but
unpaid interest will be payable to the Holders in whose names the Securities are
registered at the close of business on the relevant record date.

     

    (b) Company Repurchase
Notice.  The Company shall give written notice of the
Repurchase Date to the Holders and the Trustee (the “Company Repurchase
Notice”).  The Company Repurchase Notice shall be sent by first-class
mail to the Trustee and to each Holder not less than 30 Business Days prior to
any Repurchase Date.  Each Company Repurchase Notice shall include a
form of Repurchase Notice to be completed by a Holder and shall
state:

     

    (i) the
Repurchase Date;

     

    (ii) the
Repurchase Price, the Base Rate, the Applicable Conversion Rate estimated as of
a recent date and, to the extent known at the time of such notice, the amount of
accrued but unpaid interest that will be payable with respect to each $1,000
principal amount of the Securities on the Repurchase Date;

     

    (iii) the name
and address of the Paying Agent and the Conversion Agent;

     

    (iv) that the
Paying Agent must receive the Holder’s Repurchase Notice on or before the close
of business on the third Business Day prior to the Repurchase Date;

     

    (v) that
Securities as to which a Repurchase Notice has been given may be converted only
if (x) the applicable Repurchase Notice has been withdrawn in accordance with
the terms of this Indenture and (y) the Securities may otherwise be converted
pursuant to Article Nine of this Indenture;

     

    (vi) that
Securities must be surrendered to the Paying Agent at the address specified in
such notice to collect payment of the Repurchase Price and accrued but unpaid
interest;

     

    (vii) that the
Repurchase Price for any Securities as to which a Repurchase Notice has been
given and not withdrawn, together with accrued but unpaid interest payable with
respect thereto, shall be paid promptly following the later of the Repurchase
Date and the time of surrender of such Securities as described in clause
3.08(b)(vi);

     

    (viii) the
procedures the Holder must follow under this Section 3.08;

     

    (ix) the
conversion rights of the Securities;

     

    (x) that,
unless the Company defaults in making payment of such Repurchase Price, interest
on Securities covered by any Repurchase Notice will cease to accrue on and after
the Repurchase Date;

     

    (xi) the CUSIP
number of the Securities; and

     

    (xii) the
procedures for withdrawing a Repurchase Notice (as specified in
Section 3.10).

     

    At the
Company’s written request, which shall be made at least three Business Days
prior to the date by which the Company Repurchase Notice is to be given to the
Holders in accordance with this Section 3.08, and at the Company’s expense,
the Trustee shall give the Company Repurchase Notice in the Company’s name;
provided that, in all cases, the
text of the Company Repurchase Notice shall be prepared by the
Company.

     

    (c) Securities
shall be repurchased pursuant to this Section 3.08 at the option of the
Holder thereof upon:

     

    (i) delivery
to the Paying Agent by the Holder of a duly completed written notice in the form
set forth on the reverse of the Security (a “Repurchase Notice”) at any time
from the opening of business on the date that is 30 Business Days prior to the
Repurchase Date and on or before the close of business on the third Business Day
prior to the Repurchase Date (subject to extension to comply with applicable
law) stating:

     

    (A) the
relevant Repurchase Date;

     

    (B) if
certificated, the certificate numbers of the Securities which the Holder shall
deliver to be repurchased;

     

    (C) the
portion of the principal amount of the Securities that the Holder shall deliver
to be repurchased, which portion must be $1,000 or an integral multiple
thereof;

     

    (D) that such
Security shall be repurchased as of the Repurchase Date pursuant to the terms
and conditions specified in this Indenture; and

     

    (ii) delivery
or book-entry transfer of such Security to the Paying Agent simultaneously with
or at any time after delivery of the Repurchase Notice (together with all
necessary endorsements) at the offices of the Paying Agent, such delivery or
transfer being a condition to receipt by the Holder of the Repurchase Price
therefor, together with accrued but unpaid interest; provided that the
Repurchase Price, together with accrued but unpaid interest thereon, shall be so
paid pursuant to this Section 3.08 only if the Security so delivered to the
Paying Agent shall conform in all respects to the description thereof in the
related Repurchase Notice.  All questions as to the validity,
eligibility (including time of receipt) and acceptance of any Security for
repurchase shall be determined by the Company, whose determination shall be
final and binding absent manifest error.

     

    If the
Securities are not in certificated form, Holders must provide notice of their
election in accordance with the Applicable Procedures of the
Depository.

     

    The
Company shall repurchase from the Holder thereof, pursuant to this
Section 3.08, a portion of a Security if the principal amount of such
portion is $1,000 or an integral multiple of $1,000.  Provisions of
this Indenture that apply to the repurchase of all of a Security also apply to
the repurchase of a portion of a Security.

     

    Any
repurchase by the Company contemplated pursuant to the provisions of this
Section 3.08 shall be consummated by the delivery to the Paying Agent of
the Repurchase Price, together with accrued but unpaid interest thereon, to be
received by the Holder promptly following the later of the Repurchase Date and
the time of delivery or book-entry transfer of the Security to the Paying Agent
in accordance with this Section 3.08.

     

    Notwithstanding
anything herein to the contrary, any Holder delivering to the Paying Agent the
Repurchase Notice contemplated by this Section 3.08 shall have the right to
withdraw such Repurchase Notice at any time prior to the close of business on
the Business Day preceding the Repurchase Date by delivery of a written notice
of withdrawal to the Paying Agent at the principal office of the Paying Agent in
accordance with Section 3.10.

     

    The
Paying Agent shall promptly notify the Company of the receipt by it of any
Repurchase Notice or written notice of withdrawal thereof.

     

    SECTION
3.09. Repurchase of Securities at
Option of the Holder Upon a Fundamental
Change.  (a)  If at any time that Securities remain
outstanding there shall have occurred a Fundamental Change, Securities shall be
repurchased by the Company, at the option of the Holder thereof, at a price in
cash (the “Fundamental Change Repurchase Price”) equal to 100% of the aggregate
principal amount of such Securities plus accrued but unpaid interest thereon, up
to but not including the date (the “Fundamental Change Repurchase Date”) fixed
by the Company that is not less than 30 days nor more than 45 days after the
date the Company Fundamental Change Repurchase Notice (as defined below) is
given, subject to satisfaction by or on behalf of the Holder of the requirements
set forth in Section 3.09(c); provided that if the
Fundamental Change Repurchase Date is between the close of business on a record
date and the opening of business on the related interest payment date, accrued
but unpaid interest will be payable to the Holders in whose names the Securities
are registered at the close of business on the relevant record
date.

     

    (b) Company Fundamental Change
Repurchase Notice.  In connection with any repurchase of
Securities pursuant to this Section 3.09, the Company shall give written
notice of the occurrence of a Fundamental Change, the repurchase right arising
as a result thereof and the Fundamental Change Repurchase Date to the Holders
and the Trustee (the “Company Fundamental Change Repurchase
Notice”).  The Company Fundamental Change Repurchase Notice shall be
sent by first-class mail to the Trustee and to each Holder not more than 30 days
after the occurrence of a Fundamental Change.  Each Company
Fundamental Change Repurchase Notice shall include a form of Fundamental Change
Repurchase Notice to be completed by a Holder and shall state:

     

    (i) the
Fundamental Change Repurchase Date;

     

    (ii) the
Fundamental Change Repurchase Price, the Base Conversion Rate, the Applicable
Conversion Rate estimated as of a recent date and, to the extent known at the
time of such notice, the amount of accrued but unpaid interest that will be
payable with respect to each $1,000 principal amount of the Securities on the
Fundamental Change Repurchase Date;

     

    (iii) the name
and address of the Paying Agent and the Conversion Agent;

     

    (iv) that the
Company must receive the Holder’s Fundamental Change Repurchase Notice on or
before the close of business on the third Business Day prior to the Fundamental
Change Repurchase Date;

     

    (v) that
Securities as to which a Fundamental Change Repurchase Notice has been given may
be converted only if (x) the applicable Fundamental Change Repurchase Notice has
been withdrawn in accordance with the terms of this Indenture and (y) the
Securities may otherwise be converted pursuant to Article Nine of this
Indenture;

     

    (vi) that
Securities must be surrendered to the Paying Agent at the address specified in
such notice to collect payment of the Fundamental Change Repurchase Price and
accrued but unpaid interest;

     

    (vii) that the
Fundamental Change Repurchase Price for any Securities as to which a Fundamental
Change Repurchase Notice has been given and not withdrawn, together with any
accrued but unpaid interest payable with respect thereto, shall be paid promptly
following the later of the Fundamental Change Repurchase Date and the time of
surrender of such Securities as described in
clause 3.09(b)(vi);

     

    (viii) the
procedures the Holder must follow under this Section 3.09;

     

    (ix) the
conversion rights of the Securities;

     

    (x) that,
unless the Company defaults in making payment of such Fundamental Change
Repurchase Price, interest on Securities covered by any Fundamental Change
Repurchase Notice will cease to accrue on and after the Fundamental Change
Repurchase Date;

     

    (xi) the CUSIP
number of the Securities; and

     

    (xii) the
procedures for withdrawing a Fundamental Change Repurchase Notice (as specified
in Section 3.10).

     

    At the
Company’s written request, which shall be made at least three Business Days
prior to the date by which the Company Fundamental Change Repurchase Notice is
to be given to the Holders in accordance with this Section 3.09, and at the
Company’s expense, the Trustee shall give the Company Fundamental Change
Repurchase Notice in the Company’s name; provided that, in all cases, the
text of the Company Fundamental Change Repurchase Notice shall be prepared by
the Company.

     

    (c) Securities
shall be repurchased pursuant to this Section 3.09 at the option of the Holder
upon:

     

    (i) delivery
to the Paying Agent by a Holder of a duly completed written notice in the form
set forth on the reverse of the Security (a “Fundamental Change Repurchase
Notice”) at any time on or before the close of business on the third Business
Day prior to the Fundamental Change Repurchase Date (subject to extension to
comply with applicable law) stating:

     

    (A) the
relevant Fundamental Change Repurchase Date;

     

    (B) if
certificated, the certificate numbers of the Securities which the Holder shall
deliver to be repurchased;

     

    (C) the
portion of the principal amount of the Securities that the Holder shall deliver
to be repurchased, which portion must be $1,000 or an integral multiple thereof;
and

     

    (D) that such
Security shall be repurchased as of the Fundamental Change Repurchase Date
pursuant to the terms and conditions specified in the Securities and in this
Indenture; and

     

    (ii) delivery
or book-entry transfer of the Securities to the Paying Agent simultaneously with
or at any time after delivery of the Fundamental Change Repurchase Notice
(together with all necessary endorsements) at the office of the Paying Agent,
such delivery or transfer being a condition to receipt by the Holder of the
Fundamental Change Repurchase Price therefor, together with accrued but unpaid
interest; provided that such
Fundamental Change Repurchase Price, together with accrued but unpaid interest,
shall be so paid pursuant to this Section 3.09 only if the Securities so
delivered or transferred to the Paying Agent shall conform in all respects to
the description thereof in the related Fundamental Change Repurchase Notice. All
questions as to the validity, eligibility (including time of receipt) and
acceptance of any Security for repurchase shall be determined by the Company,
whose determination shall be final and binding absent manifest
error.

     

    If the
Securities are not in certificated form, Holders must provide notice of their
election in accordance with the Applicable Procedures of the
Depository.

     

    The
Company shall repurchase from the Holder thereof, pursuant to this
Section 3.09, a portion of a Security if the principal amount of such
portion is $1,000 or an integral multiple of $1,000.  Provisions of
this Indenture that apply to the repurchase of all of a Security also apply to
the repurchase of a portion of a Security.

     

    Any
repurchase by the Company contemplated pursuant to the provisions of this
Section 3.09 shall be consummated by the delivery to the Paying Agent of
the Fundamental Change Repurchase Price, together with accrued but unpaid
interest thereon, to be received by the Holder promptly following the later of
the Fundamental Change Repurchase Date and the time of delivery or book-entry
transfer of the Security to the Paying Agent in accordance with this
Section 3.09.

     

    Notwithstanding
anything herein to the contrary, any Holder delivering to the Paying Agent the
Fundamental Change Repurchase Notice contemplated by Section 3.09(c) shall
have the right to withdraw such Fundamental Change Repurchase Notice at any time
prior to the close of business on the Business Day preceding the Fundamental
Change Repurchase Date by delivery of a written notice of withdrawal to the
Paying Agent at the principal office of the Paying Agent in accordance with
Section 3.10.

     

    The
Paying Agent shall promptly notify the Company of the receipt by it of any
Fundamental Change Repurchase Notice or written withdrawal thereof.

     

    Notwithstanding
anything herein to the contrary, the Company’s obligations pursuant to this
Section 3.09 shall be satisfied if a third party makes an offer to
repurchase outstanding Securities after a Fundamental Change in the manner and
at the times and otherwise in compliance in all material respects with the
requirements of this Section 3.09 and such third party purchases all Securities
properly tendered and not withdrawn pursuant to the requirements of this
Section 3.09.

     

    SECTION
3.10. Effect of Repurchase Notice
or Fundamental Change Repurchase Notice.  Upon receipt by the
Paying Agent of a Repurchase Notice or Fundamental Change Repurchase Notice, the
Holder of the Security in respect of which such Repurchase Notice or Fundamental
Change Repurchase Notice, as the case may be, was given shall (unless such
Repurchase Notice or Fundamental Change Repurchase Notice is withdrawn as
specified in the following two paragraphs) thereafter be entitled to receive
solely the Repurchase Price or Fundamental Change Repurchase Price, together
with accrued but unpaid interest thereon, up to but not including the Repurchase
Date or Fundamental Change Repurchase Date, as the case may be, with respect to
such Security; provided that if the
Fundamental Change Repurchase Date is between the close of business on a record
date and the opening of business on the related interest payment date, accrued
and unpaid interest will be payable to the Holders in whose names the Securities
are registered at the close of business on the relevant record
date.  Such Repurchase Price or Fundamental Change Repurchase Price,
together with accrued but unpaid interest thereon, shall be paid to such Holder,
subject to receipt of funds by the Paying Agent, promptly following the later of
(x) the Repurchase Date or the Fundamental Change Repurchase Date, as the case
may be, with respect to such Security (provided that the
conditions in Section 3.08 or Section 3.09, as applicable, have been
satisfied) and (y) the time of delivery or book-entry transfer of such Security
to the Paying Agent by the Holder thereof in the manner required by
Section 3.08(c) or Section 3.09(c), as
applicable.  Securities in respect of which a Repurchase Notice or
Fundamental Change Repurchase Notice, as the case may be, has been given by the
Holder thereof may not be converted pursuant to Article Nine hereof on or after
the date of the delivery of such Repurchase Notice or Fundamental Change
Repurchase Notice, as the case may be, unless such Repurchase Notice or
Fundamental Change Repurchase Notice, as the case may be, has first been validly
withdrawn as specified in the following two paragraphs.

     

    A
Repurchase Notice or Fundamental Change Repurchase Notice, as the case may be,
may be withdrawn by means of a written notice of withdrawal delivered to the
office of the Paying Agent in accordance with the Repurchase Notice or
Fundamental Change Repurchase Notice, as the case may be, at any time prior to
the close of business on the Business Day prior to the Repurchase Date or the
Fundamental Change Repurchase Date, as the case may be, specifying:

     

    (i) if the
Security with respect to which such notice of withdrawal is certificated, the
certificate number of such Security, or if such Security is a Global Security,
the notice must comply with the Applicable Procedures;

     

    (ii) the
principal amount of the Security with respect to which such notice of withdrawal
is being submitted; and

     

    (iii) the
principal amount, if any, of such Security which remains subject to the original
Repurchase Notice or Fundamental Change Repurchase Notice, as the case may be,
and which has been or will be delivered for repurchase by the
Company.

     

    There
shall be no repurchase of any Securities pursuant to Section 3.08 if an
Event of Default (other than a default in the payment of the Repurchase Price)
has occurred prior to, on or after, as the case may be, the giving by the
Holders of such Securities the required Repurchase Notice and such Event of
Default is continuing.  The Paying Agent will promptly return to the
respective Holders thereof any Securities (x) with respect to which a Repurchase
Notice has been withdrawn in compliance with this Indenture, or (y) held by it
during the continuance of an Event of Default (other than a default in the
payment of the Repurchase Price) in which case, upon such return, the Repurchase
Notice with respect thereto shall be deemed to have been withdrawn.

     

    SECTION
3.11. Deposit of Repurchase Price
or Fundamental Change Repurchase Price.  Prior to
11:00 a.m., New York time, on the Business Day immediately following the
Repurchase Date or the Fundamental Change Repurchase Date, as the case may be,
the Company shall deposit with the Trustee or with the Paying Agent (or, if the
Company or a Subsidiary is acting as the Paying Agent, shall segregate and hold
in trust as provided in Section 2.04 an amount of money (in immediately
available funds if deposited on such Business Day) sufficient to pay the
aggregate Repurchase Price or Fundamental Change Repurchase Price, as the case
may be, together with accrued but unpaid interest thereon, up to but not
including the Repurchase Date or Fundamental Change Repurchase Date, as the case
may be, of all the Securities or portions thereof which are to be repurchased as
of the Repurchase Date or Fundamental Change Repurchase Date, as the case may
be.

     

    SECTION
3.12. Securities Repurchased in
Part.  Any Security in definitive form that is to be
repurchased only in part shall be surrendered at the office of the Paying Agent
(with, if the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by the Holder thereof or such Holder’s attorney duly
authorized in writing) and the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security, without service charge,
one or more new Securities in definitive form, of any authorized denomination as
requested by such Holder in aggregate principal amount equal to, and in exchange
for, the portion of the principal amount of the Security in definitive form so
surrendered which is not repurchased.

     

    SECTION
3.13. Covenant to Comply with
Securities Laws upon Repurchase of Securities.  When complying
with the provisions of Sections 3.08 or 3.09 hereof (so long as such offer
or repurchase constitutes an “issuer tender offer” for purposes of Rule 13e-4
(which term, as used herein, includes any successor provision thereto) under the
Exchange Act at the time of such offer or repurchase), the Company shall (i)
comply in all material respects with Rule 13e-4 and Rule 14e-1 under the
Exchange Act, (ii) file the related Schedule TO (or any successor schedule, form
or report) under the Exchange Act and (iii) otherwise comply in all material
respects with all federal and state securities laws so as to permit the rights
and obligations under Sections 3.08 or 3.09 to be exercised in the time and
in the manner specified in Sections 3.08 or 3.09.

     

    SECTION
3.14. Repayment to the
Company.  To the extent that the aggregate amount of cash
deposited by the Company pursuant to Section 3.11 exceeds the aggregate
Repurchase Price or Fundamental Change Repurchase Price, as the case may be, of
the Securities or portions thereof which the Company is obligated to repurchase
as of the Repurchase Date or Fundamental Change Repurchase Date, as the case may
be, together with accrued but unpaid interest thereon, then, unless otherwise
agreed in writing with the Company, promptly after the Business Day following
the Repurchase Date or Fundamental Change Repurchase Date, as the case may be,
the Trustee shall return any such excess to the Company together with interest,
if any, thereon (subject to the provisions of Section 8.01(f)).

     

    SECTION
3.15. Sinking
Fund.  There shall be no sinking fund provided for the
Securities.

     

    ARTICLE
FOUR

     

     

    CONTINGENT
INTEREST

     

    SECTION
4.01. Contingent
Interest.  Beginning with the six-month interest period ending
June 14, 2019, the Company will pay contingent interest (“Contingent Interest”)
to the Holders of Securities for any six-month interest period from and
including an interest payment date to but excluding the next interest payment
date, if the average Trading Price of the Securities for each of the five
Trading Days ending on the third day immediately preceding the first day of the
applicable six-month interest period equals or exceeds 120% of the principal
amount of the Securities. For any six-month interest period when Contingent
Interest is payable, the Contingent Interest payable on each $1,000 principal
amount of Securities shall equal 0.50% per annum of the average Trading Price
for $1,000 principal amount of Securities during the five Trading-Day measuring
period ending on the third day immediately preceding the first day of applicable
six-month interest period used to determine whether Contingent Interest must be
paid.

     

    The
Trustee’s sole responsibility pursuant to this Section 4.01 hereof shall be to
obtain the Trading Price of the Securities for each of the five Trading Days
immediately preceding the first day of each applicable six-month interest period
and to provide such information to the Company. The Company shall determine
whether Holders are entitled to receive Contingent Interest, and if so, provide
notice pursuant to Section 4.03 and to the Trustee setting forth the amount
of Contingent Interest per $1,000 principal amount of Securities.
Notwithstanding any term contained in this Indenture or any other document to
the contrary, the Trustee shall have no responsibilities, duties or obligations
for or with respect to (i) determining whether the Company must pay Contingent
Interest or (ii) determining the amount of Contingent Interest, if any,
payable by the Company.

     

    SECTION
4.02. Payment of Contingent
Interest.  Contingent Interest for any six-month interest
period shall be paid on the applicable interest payment date to the Person in
whose name any Security is registered on the corresponding record date.
Contingent Interest due under this Article Four shall be treated for all
purposes of this Indenture like any other interest accruing on the
Securities.

     

    SECTION
4.03. Contingent Interest
Notification.  By the first Business Day of a six-month
interest period for which Contingent Interest will be paid, the Company will
disseminate a press release through Dow Jones & Company, Inc. or Bloomberg
Business News or a similarly broad public medium that is customary for such
press releases stating that Contingent Interest will be paid on the Securities
and identifying such six-month interest period as the six-month interest period
for which such Contingent Interest will be paid.

     

    ARTICLE
FIVE

     

    COVENANTS

     

    SECTION
5.01. Payment of
Securities.  The Company shall pay the principal of, premium,
if any, and interest on the Securities on the dates and in the manner provided
in the Securities and this Indenture.  All such amounts shall be
considered paid on the date due if the Trustee or Paying Agent holds on that
date money deposited by the Company designated for and sufficient to pay the
amount then due with respect to the Securities.  All references to
interest in this Indenture shall for all purposes be deemed to include any
contingent interest.

     

    The
Company shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue principal, and premium, if any, at the rate
borne by the Securities to the extent lawful; and it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest (without regard to any applicable grace period)
at the same rate to the extent lawful.

     

    SECTION
5.02. SEC
Reports.  (a)  The Company, within 15 days after it
files the same with the SEC, shall deliver to the Trustee and Holders, copies of
the annual reports and the information, documents and other reports (or copies
of any such portions of any of the foregoing as the SEC may by rules and
regulations prescribe) that the Company is required to file with the SEC
pursuant to Section 13 or 15(d) of the Exchange Act.  Notwithstanding
that the Company may not be required to remain subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, the Company shall file
with the SEC and provide the Trustee and Holders with such annual reports and
such information, documents and other reports specified in Sections 13 and 15(d)
of the Exchange Act.  The Company and each Subsidiary Guarantor shall
also comply with the provisions of TIA Section 314(a).

     

    (b) The
Company may request the Trustee on behalf of the Company at the Company’s
expense to mail the foregoing to Holders.  In such case, the Company
shall provide the Trustee with a sufficient number of copies of all reports and
other documents and information that the Trustee may be required to deliver to
Holders under this Section.

     

    (c) Delivery
of such reports, documents and information to the Trustee is for informational
purposes only and the Trustee’s receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Company’s compliance with any of
its covenants hereunder (as to which the Trustee is entitled to rely exclusively
on Officers’ Certificates).

     

    SECTION
5.03. Compliance
Certificates.  (a)  The Company shall deliver to the
Trustee, within 90 days after the end of each fiscal year of the Company, an
Officers’ Certificate, stating that a review of the activities of the Company
and the Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under this
Indenture, and further stating, as to each such Officer signing such
certificate, that, to the best of such Officers' knowledge, the Company and each
Subsidiary Guarantor has kept, observed, performed and fulfilled each and every
covenant contained in this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions hereof (or, if a
Default or Event of Default shall have occurred, describing all such Defaults or
Events of Default of which such Officers may have knowledge and what action the
Company is taking or proposes to take with respect thereto) and that to the best
of such Officers' knowledge, after reasonable inquiry, no event has occurred and
remains in existence by reason of which payments on account of any amount (or
delivery of shares of Common Stock (or other property)) with respect to the
Securities are prohibited or, if such event has occurred, a description of the
event and what action the Company and the Subsidiary Guarantors are taking or
propose to take with respect thereto.  Such Officers’ Certificate
shall comply with TIA Section 314(a)(4).  The Company hereby
represents that, as of the Issue Date, its fiscal year ends December 31, and
hereby covenants that it shall notify the Trustee at least 30 days in advance of
any change in its fiscal year.

     

    (b) So long
as not contrary to the then current recommendations of the American Institute of
Certified Public Accountants, the year-end financial statements delivered
pursuant to Section 5.02 shall be accompanied by a written statement of the
Company’s independent public accountants (which shall be a firm of established
national reputation) that in making the examination necessary for certification
of such financial statements nothing has come to their attention that would lead
them to believe that the Company has violated any provisions of Section 5.07 of
this Indenture (to the extent such provision relates to accounting matters) or,
if any such violation has occurred, specifying the nature and period of
existence thereof.  Where such financial statements are not
accompanied by such a written statement, the Company shall furnish the Trustee
with an Officers’ Certificate stating that any such written statement would be
contrary to the then current recommendations of the American Institute of
Certified Public Accountants.

     

    (c) The
Company and the Subsidiary Guarantors will, so long as any of the Securities are
outstanding, deliver to the Trustee forthwith upon any Officer becoming aware of
any Default or Event of Default or default in the performance of any covenant,
agreement or condition contained in this Indenture, an Officers’ Certificate
specifying such Default or Event of Default and what action the Company or any
Subsidiary Guarantor proposes to take with respect thereto.

     

    SECTION
5.04. Maintenance of Office or
Agency.  The Company will maintain in the Borough of Manhattan,
The City of New York, an office or agency where Securities may be surrendered
for registration of transfer, exchange, presentation for payment, repurchase,
redemption or conversion and where notices and demands to or upon the Company in
respect of the Securities and this Indenture may be served.  The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency.  If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the address of the Trustee set
forth in Section 12.02 or at the Corporate Trust Office of the
Trustee.

     

    Subject
to Section 2.03, the Company may also from time to time designate one or more
other offices or agencies where the Securities may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations; provided that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in the Borough of Manhattan, The City
of New York, for such purposes.  The Company will give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.

     

    SECTION
5.05. Corporate
Existence.  Except as permitted by Article Six hereof, the
Company will do or cause to be done all things necessary to preserve and keep in
full force and effect its corporate existence and the corporate, partnership or
other existence of each Subsidiary and all rights (charter and statutory) and
franchises of the Company and the Subsidiaries; provided that the
Company shall not be required to preserve the corporate existence of any
Subsidiary, or any such right or franchise, if the Company shall determine that
the preservation thereof is no longer desirable in the conduct of the business
of the Company and that the loss thereof is not disadvantageous in any material
respect to the Holders.

     

    SECTION
5.06. Waiver of Stay, Extension or
Usury Laws.  The Company and each Subsidiary Guarantor
covenants (to the extent that each may lawfully do so) that it will not at any
time insist upon, plead, or in any manner whatsoever claim or take the benefit
or advantage of, any stay, extension, or usury law or other law, which would
prohibit or forgive the Company or any Subsidiary Guarantor from paying all or
any portion of any amount on the Securities as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) each of the Company and the Subsidiary Guarantors hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.

     

    SECTION
5.07. Payment of Taxes and Other
Claims.  The Company shall pay or discharge or cause to be paid
or discharged, before the same shall become delinquent, (a) all taxes,
assessments and governmental charges levied or imposed upon the Company or any
Subsidiary or upon the income, profits or property of the Company or any
Subsidiary and (b) all lawful claims for labor, materials and supplies
which, if unpaid, might by law become a Lien upon the property of the Company or
any Subsidiary; provided, however, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate
proceedings.

     

    SECTION
5.08. Maintenance of Properties
and Insurance.  (a)  The Company shall cause all
properties used or held for use in the conduct of its business or the business
of any Subsidiary to be maintained and kept in good condition, repair and
working order (ordinary wear and tear excepted) and supplied with all necessary
equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided, however, that nothing
in this Section shall prevent the Company from discontinuing the operation or
maintenance of any such property, or disposing of it, if such discontinuance or
disposal is, in the judgment of the Company, desirable in the conduct of its
business and not disadvantageous in any material respect to the
Holders.

     

    (b) The
Company shall provide or cause to be provided, for itself and each of its
Subsidiaries, insurance (including appropriate self-insurance) against loss or
damage of the kinds that, in the reasonable, good faith opinion of the Company,
are adequate and appropriate for the conduct of the business of the Company and
such Subsidiaries in a prudent manner, with reputable insurers or with the
government of the United States or an agency or instrumentality thereof, in such
amounts, with such deductibles, and by such methods as shall be customary, in
the reasonable, good faith opinion of the Company, for corporations similarly
situated in the industry.

     

    SECTION
5.09. Tax Treatment of
Securities and
Right to Set Off.  The
Company and the Holders, by purchasing a beneficial ownership interest in the
Securities, agree that (i) the Securities are contingent payment debt
instruments as described in Section 1.1275-4 of the Treasury regulations
promulgated by the Department of Treasury pursuant to the Internal Revenue Code
of 1986, amended (the “Contingent Payment Regulations”), (ii) each Holder
shall be bound by the Company’s application of the Contingent Payment
Regulations to the Securities, including the Company’s determination that the
rate at which interest will be deemed to accrue on the Securities for U.S.
federal income tax purposes, will be 8.00% compounded semiannually, which is the
rate comparable to the rate at which the Company would borrow on a
noncontingent, nonconvertible borrowing with no contingent payments, but with
terms and conditions otherwise comparable to the Securities (the “comparable
yield”), (iii) each Holder shall use the projected payment schedule with respect
to the Securities provided by the Company to the Holder, as provided in the
Contingent Payment Regulations, to determine its interest accruals and
adjustments as provided in the Contingent Payment Regulations, (iv) for purposes
of the Contingent Payment Regulations, to treat cash and the fair market value
of any Common Stock (or other property) received upon any conversion of the
Securities as a contingent payment, and (v) the Company and each Holder will not
take any position on a tax return inconsistent with clauses (i), (ii), (iii) or
(iv) of this Section 5.09, unless required by applicable law.

     

    The
comparable yield and the schedule of projected payments are not determined for
any purpose other than for the determination of interest accruals and adjustment
thereof in respect of the Securities for U.S. federal income tax
purposes.  The comparable yield and the schedule of projected payments
do not constitute a projection or representation regarding the future stock
price or the amount payable on the Securities.  A Holder may obtain
the issue date, comparable yield and projected payment schedule (which schedule
is attached as Schedule B) by submitting a written request for such information
to Chesapeake Energy Corporation, Investor Relations, 6100 North Western Avenue,
Oklahoma City, Oklahoma 73118.

     

    On
conversion of the Securities, that portion of accrued interest including accrued
Contingent Interest with respect to the converted Securities shall not be
canceled, extinguished or forfeited, but rather shall be deemed to be paid in
full to the Holder thereof through delivery of cash and any shares of Common
Stock (or other property) received in exchange for the Securities being
converted pursuant to the provisions hereof, and cash and the fair market value
of any shares of Common Stock (or other property) received shall be treated as
issued, to the extent thereof, first in exchange for interest accrued and unpaid
through the conversion date and accrued and unpaid Contingent Interest, and the
balance, if any, shall be treated as issued in exchange for the principal amount
of the Securities being converted pursuant to the provisions
hereof.

     

    Notwithstanding
any provision herein to the contrary, the Company, the Trustee or any
third-party withholding agent may set off any U.S. withholding tax that the
Company, the Trustee or such third-party withholding agent is required to
collect with respect to any deemed distribution resulting from certain
adjustments, or failure to make adjustments, to the Conversion Rate pursuant to
Section 9.05 against cash payments of interest or from cash or shares of Common
Stock deliverable to a Holder upon conversion, redemption or repurchase of any
Securities.

     

    ARTICLE
SIX

     

    SUCCESSOR
CORPORATION

     

    SECTION
6.01. When Company May Merge,
etc.  The Company shall not consolidate with or merge with or
into any Person or sell, convey, lease, transfer or otherwise dispose of all or
substantially all of its assets to any Person, unless:

     

    (1) the
Company survives such merger or the Person formed by such consolidation or into
which the Company is merged or that acquires by sale, conveyance, transfer or
other disposition, or which leases, all or substantially all of the assets of
the Company is a corporation, limited liability company or limited partnership
organized and existing under the laws of the United States of America, any state
thereof or the District of Columbia, or Canada or any province thereof (a
"Successor"), and expressly assumes, by supplemental indenture, the due and
punctual payment of the principal of, premium, if any, and interest on, all the
Securities and the performance of every other covenant and obligation of the
Company under this Indenture; provided that unless
the Successor is a corporation, a corporate co-issuer of the Securities shall be
added hereto by the execution and delivery of a supplemental indenture by such
co-issuer; and

     

    (2) immediately
before and after giving effect to such transaction no Default or Event of
Default exists.

     

    In
connection with any consolidation, merger, sale, conveyance, lease, transfer or
other disposition contemplated by this Section 6.01, the Company shall deliver
to the Trustee prior to the consummation of the proposed transaction an
Officers’ Certificate to the foregoing effect and an Opinion of Counsel stating
that the proposed transaction and such supplemental indenture comply with this
Indenture.

     

    SECTION
6.02. Successor Corporation
Substituted.  Upon any consolidation, merger, lease, conveyance
or transfer in accordance with Section 6.01, the Trustee shall be notified by
the Company and the Successor, and the Successor formed by such consolidation or
into which the Company is merged or to which such lease, conveyance or transfer
is made shall succeed to, and be substituted for, and may exercise every right
and power of, the Company under this Indenture with the same effect as if such
Successor had been named as the Company herein and thereafter (except in the
case of a lease) the predecessor corporation will be relieved of all further
obligations and covenants under this Indenture and the Securities.

     

    ARTICLE
SEVEN

     

    DEFAULTS
AND REMEDIES

     

    SECTION
7.01. Events of
Default.  An “Event of Default” occurs upon:

     

    (1) default
by the Company or any Subsidiary Guarantor in the payment of principal of, or
premium, if any, on the Securities when due and payable at maturity, upon
acceleration or otherwise (including the failure to make cash payments due upon
conversion or a payment to repurchase Securities tendered pursuant to a
Repurchase Notice or Fundamental Change Repurchase Notice);

     

    (2) failure
on the part of the Company to deliver within the time period required by this
Indenture shares of Common Stock or any cash in lieu of fractional shares, as
the case may be, or any other property other than cash, upon conversion of the
Securities and continuance of such failure for five days;

     

    (3) default
by the Company or any Subsidiary Guarantor in the payment of any interest on the
Securities when due and payable and continuance of such default for 30
days;

     

    (4) default
on any other Indebtedness of the Company, any Subsidiary Guarantor or any other
Subsidiary if either (A) such default results in the acceleration of the
maturity of any such Indebtedness having a principal amount of $50,000,000 or
more individually or, taken together with the principal amount of any other such
Indebtedness the maturity of which has been so accelerated, in the aggregate, or
(B) such default results from the failure to pay when due principal of,
premium, if any, or interest on, any such Indebtedness, after giving effect to
any applicable grace period (a “Payment Default”), having a principal amount of
$50,000,000 or more individually or, taken together with the principal amount of
any other Indebtedness under which there has been a Payment Default, in the
aggregate; provided that if any
such default is cured or waived or any such acceleration is rescinded, or such
Indebtedness is repaid, within a period of 30 days from the continuation of
such default beyond any applicable grace period or the occurrence of such
acceleration, as the case may be, such Event of Default and any consequent
acceleration of the Securities shall be rescinded, so long as any such
rescission does not conflict with any judgment or decree or applicable provision
of law;

     

    (5) default
in the performance, or breach of, the covenant set forth in Article Six, or in
the performance, or breach of, any other covenant or agreement of the Company or
any Subsidiary Guarantor in this Indenture and failure to remedy such default
within a period of 45 days after written notice thereof from the Trustee or
Holders of 25% of the principal amount of the outstanding Securities; provided, however, that the
Company shall have 90 days after the receipt of such notice to remedy, or
receive a waiver for, any failure to comply with its obligations under Section
5.02 so long as the Company is attempting to cure such failure as promptly as
reasonably practicable;

     

    (6) the entry
by a court of one or more judgments or orders for the payment of money against
the Company or any Significant Subsidiary in an aggregate amount in excess of
$50,000,000 (net of applicable insurance coverage by a third party insurer which
is acknowledged in writing by such insurer) that has not been vacated,
discharged, satisfied or stayed pending appeal within 60 days from the entry
thereof;

     

    (7) a
Guarantee by a Subsidiary Guarantor shall cease to be in full force and effect
(other than a release of a Guarantee in accordance with Section 11.04) or
any Subsidiary Guarantor shall deny or disaffirm its obligations with respect
thereto;

     

    (8) the
Company or any Significant Subsidiary pursuant to or within the meaning of any
Bankruptcy Law:

     

    (A) commences
a voluntary case or proceeding,

     

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

     

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

     

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

     

    (E) admits in
writing that it generally is unable to pay its debts as the same become due;
or

     

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

     

    (A) is for
relief (with respect to the petition commencing such case) against the Company
or any Significant Subsidiary in an involuntary case or proceeding,

     

    (B) appoints
a Custodian of the Company or any Significant Subsidiary or for all or
substantially all of its property, or

     

    (C) orders
the liquidation of the Company or any Significant Subsidiary, and the order or
decree remains unstayed and in effect for 60 days.

     

    The term
“Bankruptcy Law” means Title 11, U.S. Code or any similar federal or state law
for the relief of debtors.  The term “Custodian” means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy
Law.

     

    SECTION
7.02. Acceleration.  If
an Event of Default (other than an Event of Default specified in clauses (8) or
(9)) under Section 7.01 occurs and is continuing, then and in every such case
the Trustee or the Holders of not less than 25% of the principal amount of the
outstanding Securities may declare the unpaid principal of and premium, if any,
and accrued and unpaid interest on, all the Securities then outstanding to be
due and payable, by a notice in writing to the Company (and to the Trustee, if
given by Holders), and upon any such declaration such principal, premium, if
any, and accrued and unpaid interest shall become immediately due and payable,
notwithstanding anything contained in this Indenture or the Securities to the
contrary.  If an Event of Default specified in clauses (8) or (9) of
Section 7.01 occurs, all unpaid principal of, and premium, if any, and accrued
and unpaid interest on, the Securities then outstanding will become due and
payable, without any declaration or other act on the part of the Trustee or any
Holder.

     

    The
Holders of a majority of the principal amount of the outstanding Securities, by
written notice to the Company, the Subsidiary Guarantors and the Trustee, may
rescind and annul a declaration of acceleration and its consequences if
(1) the Company or any Subsidiary Guarantor has paid or deposited with such
Trustee a sum sufficient to pay (A) all overdue installments of interest on
all the Securities, (B) the principal of, and premium, if any, on any
Securities that have become due otherwise than by such declaration of
acceleration and interest thereon at the rate or rates prescribed therefor in
the Securities, (C) to the extent that payment of such interest is lawful,
interest on the defaulted interest at the rate or rates prescribed therefor in
the Securities, and (D) all money paid or advanced by the Trustee
thereunder and the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel; (2) all Events of Default, other
than the non-payment of the principal of any Securities that have become due
solely by such declaration of acceleration, have been cured or waived as
provided in this Indenture; and (3) the rescission would not conflict with
any judgment or decree of a court of competent jurisdiction.  No such
rescission will affect any subsequent Event of Default or impair any right
consequent thereon.

     

    SECTION
7.03. Other
Remedies.  If an Event of Default occurs and is continuing, the
Trustee may, but is not obligated to, pursue, in its own name and as trustee of
an express trust, any available remedy by proceeding at law or in equity to
collect the payment of principal or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.  If
an Event of Default specified under clauses (8) or (9) of Section 7.01 occurs
with respect to the Company at a time when the Company is the Paying Agent, the
Trustee shall automatically assume the duties of Paying Agent.

     

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

     

    SECTION
7.04. Waiver of Past
Defaults.  Subject to Sections 7.07 and 10.02, the Holders of
at least a majority of the principal amount of the outstanding Securities by
notice to the Trustee may waive an existing Default or Event of Default and its
consequences, except a Default or Event of Default in payment of principal or
interest on the Securities, including a payment of any redemption price,
Repurchase Price or Fundamental Change Repurchase Price, a Default or Event of
Default in respect of a provision of this Indenture that cannot be amended
without the consent of each Holder affected thereby, or a Default or Event of
Default that constitutes a failure to convert any Security in accordance with
the terms hereof.  

     

    SECTION
7.05. Control by
Majority.  The Holders of a majority in principal amount of the
Securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on such Trustee, provided that
(1) such direction is not in conflict with any rule of law or with this
Indenture and (2) the Trustee may take any other action deemed proper by
such Trustee that is not inconsistent with such direction.

     

    SECTION
7.06. Limitation on
Remedies.  No Holder of any of the Securities will have any
right to institute any proceeding, judicial or otherwise, to appoint a receiver
or trustee or to pursue any remedy under this Indenture, unless:

     

    (1) such
Holder has previously given notice to the Trustee of a continuing Event of
Default,

     

    (2) the
Holders of not less than 25% of the principal amount of the outstanding
Securities have made written request to such Trustee to institute proceedings in
respect of such Event of Default in its own name as Trustee under this
Indenture,

     

    (3) such
Holder or Holders have offered to such Trustee indemnity reasonably satisfactory
to it against the costs, expenses and liabilities to be incurred in compliance
with such request,

     

    (4) such
Trustee for 60 days after its receipt of such notice, request and offer of
indemnity has failed to institute any proceeding, and

     

    (5) no
direction inconsistent with such written request has been given to such Trustee
during such 60-day period by the Holders of a majority of the principal amount
of the outstanding Securities.

     

    A Holder
may not use this Indenture to prejudice the rights of another Holder or to
obtain a preference or priority over other Holders (it being understood that the
Trustee does not have an affirmative duty to ascertain whether or not such
actions or forbearances are unduly prejudicial to such Holders).

     

    SECTION
7.07. Rights of Holders to Receive
Payment and to Convert.  Notwithstanding any other provision of
this Indenture, the Holder of any Securities will have the right, which is
absolute and unconditional, to receive payment of the principal of and interest
on such Securities on the respective due dates therefor (including, in the case
of redemption or repurchase, on the redemption date, Repurchase Date or
Fundamental Change Repurchase Date, as the case may be), to convert the
Securities in accordance with Article Nine and to institute suit for the
enforcement of any such payment or right to convert, and such right may not be
impaired without the consent of such Holder.

     

    SECTION
7.08. Collection Suit by
Trustee.  If an Event of Default in payment of any amount or
shares of Common Stock (or other property) specified in Section 7.01(1),
7.01(2) or 7.01(3) occurs and is continuing, the Trustee may recover judgment in
its own name and as trustee of an express trust against the Company or any
Subsidiary Guarantor for the whole amount due with respect to the Securities,
and interest on overdue principal and premium, if any, and, to the extent
lawful, interest on overdue interest, and such further amounts as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation and expenses of the Trustee, its agents and
counsel.

     

    SECTION
7.09. Trustee May File Proofs of
Claim.  (a)  The Trustee may file such proofs of
claim and other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee and the Holders allowed in any judicial
proceedings relative to the Company, the Subsidiary Guarantors, their creditors
or their property and may collect and receive any money or securities or other
property payable or deliverable on any such claims and to distribute the
same.

     

    (b) Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.

     

    SECTION
7.10. Priorities.  If
the Trustee collects any money pursuant to this Article Seven, it shall pay out
the money in the following order:

     

    First:  to
the Trustee for amounts due under Section 8.07;

     

    Second:  to
Holders for all amounts due and unpaid on the Securities, ratably, without
preference or priority of any kind, according to the amounts due and payable on
the Securities; and

     

    Third:  to
the Company.

     

    The
Trustee may fix a record date and payment date for any payment to Holders
pursuant to this Section 7.10.

     

    SECTION
7.11. Undertaking for
Costs.  In any suit for the enforcement of any right or remedy
under this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys’ fees and expenses, against any party litigant in the suit,
having due regard to the merits and good faith of the claims or defenses made by
the party litigant.  This Section 7.11 does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 7.07, or a suit by Holders of
more than 10% in principal amount of the then outstanding
Securities.

     

    ARTICLE
EIGHT

     

    TRUSTEE

     

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

     

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

     

    (1) The
Trustee need perform only those duties that are specifically set forth (or
incorporated by reference) in this Indenture and no implied covenants or
obligations shall be read into this Indenture against the Trustee.

     

    (2) In the
absence of bad faith on its part, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein,
upon certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. However, in the case of certificates or opinions
specifically required by any provision hereof to be furnished to it, the Trustee
shall examine such certificates and opinions to determine whether or not they
conform to the requirements of this Indenture (but need not confirm or
investigate the accuracy of mathematical calculations or other facts stated
therein).

     

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

     

    (1) This
paragraph (c) does not limit the effect of paragraph (b) of this
Section.

     

    (2) The
Trustee shall not be liable for any error of judgment made in good faith by an
officer of the Trustee, unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts.

     

    (3) The
Trustee shall not be liable with respect to action it takes or omits to take in
good faith in accordance with a direction received by it pursuant to Section
7.05, and the Trustee shall be entitled from time to time to request such a
direction.

     

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

     

    (e) The
Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request or direction of any of the Holders
pursuant to the Indenture, unless such Holders shall have offered to the Trustee
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities which might be incurred by it in compliance with such request or
direction.

     

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

     

    SECTION
8.02. Rights of
Trustee.  Subject to Section 8.01:

     

    (a) The
Trustee may conclusively rely on and shall be fully protected in acting or
refraining from acting upon any document believed by it to be genuine and to
have been signed or presented by the proper person.  The Trustee shall
not be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture or other paper or document,
but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company, personally
or by agent or attorney, to the extent reasonably required by such inquiry or
investigation at the expense of the Company and shall incur no liability of any
kind by reason of such inquiry or investigation.

     

    (b) Before
the Trustee acts or refrains from acting, it may require an Officers’
Certificate or an Opinion of Counsel or both.  The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such certificate or opinion.

     

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

     

    (d) The
Trustee shall not be liable for any action it takes or omits to take in good
faith which it believes to be authorized or within its rights or
powers.

     

    (e) The
Trustee may consult with counsel of its selection and the advice of such counsel
or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and reliance thereon.

     

    (f) In no
event shall the Trustee be responsible or liable for special, indirect, or
consequential loss or damage of any kind whatsoever (including, but not limited
to, loss of profit) irrespective of whether the Trustee has been advised of the
likelihood of such loss or damage and regardless of the form of
action.

     

    (g) The
Trustee shall not be deemed to have notice of any Default or Event of Default
unless a Trust Officer has actual knowledge thereof or unless written notice of
any event which is in fact such a default is received by the Trustee at the
Corporate Trust Office of the Trustee, and such notice references the Securities
and this Indenture.

     

    (h) The
rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to, and
shall be enforceable by, the Trustee in each of its capacities hereunder, and
each agent, custodian and other Person employed to act hereunder.

     

    (i) The
Trustee may request that the Company deliver a certificate setting forth the
names of individuals and/or titles of officers authorized at such time to take
specified actions pursuant to this Indenture.

     

    SECTION
8.03. Individual Rights of
Trustee.  The Trustee in its individual or any other capacity
may become the owner or pledgee of Securities and may otherwise deal with the
Company or its Subsidiaries or Affiliates with the same rights it would have if
it were not Trustee.  Any Agent may do the same with like
rights.  However, the Trustee must comply with Sections 8.10 and
8.11.

     

    SECTION
8.04. Trustee’s
Disclaimer.  The Trustee makes no representation as to the
validity or adequacy of this Indenture or the Securities, it shall not be
accountable for the Company’s use of the proceeds from the Securities or any
prospectus, offering or solicitation documents, and it shall not be responsible
for any statement in the Securities other than its certificate of
authentication.

     

    SECTION
8.05. Notice of
Defaults.  If a Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to each Holder pursuant to
Section 12.02 a notice of the Default within 90 days after it
occurs.  Except in the case of a Default in any payment on any
Security, the Trustee may withhold the notice if and so long as the board of
directors, executive committee or a trust committee of officers in good faith
determines that withholding the notice is in the interests of
Holders.

     

    SECTION
8.06. Reports by Trustee to
Holders.  Within 60 days after each April 1, beginning
with the April 1 following the date of this Indenture, the Trustee shall
mail to each Holder a brief report dated as of such April 1 that complies with
TIA Section 313(a), but only if such report is required in any year under TIA
Section 313(a).  The Trustee also shall comply with TIA Sections
313(b) and 313(c). A copy of each report at the time of its mailing to Holders
shall be filed with the SEC and each stock exchange on which the Securities are
listed.  The Company shall promptly notify the Trustee in writing when
the Securities become listed on any national securities exchange or of any
delisting thereof.

     

    SECTION
8.07. Compensation and
Indemnity.  The Company and the Subsidiary Guarantors jointly
and severally agree to pay the Trustee from time to time such compensation for
its services as shall be agreed upon from time to time in writing among the
Company, the Subsidiary Guarantors and the Trustee (which compensation shall not
be limited by any provision of law in regard to the compensation of a trustee of
an express trust).  The Company and the Subsidiary Guarantors jointly
and severally agree to reimburse the Trustee upon request for all reasonable
out-of-pocket expenses, disbursements and advances incurred by
it.  Such expenses shall include when applicable the reasonable
compensation and expenses of the Trustee’s agents and counsel.

     

    The
Trustee shall not be under any obligation to institute any suit, or take any
remedial action under this Indenture, or to enter any appearance or in any way
defend any suit in which it may be a defendant, or to take any steps in the
execution of the trusts created hereby or thereby or in the enforcement of any
rights and powers under this Indenture, until it shall be indemnified to its
satisfaction against any and all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provisions of this
Indenture, including compensation for services, costs, expenses, outlays,
counsel fees and other disbursements, and against all liability (including fees
and expenses incurred by the Trustee pursuant to the penultimate paragraph of
Section 8.08) not caused by its own negligence or willful
misconduct.  The Company and the Subsidiary Guarantors jointly and
severally agree to indemnify the Trustee against any loss, liability, claim,
damage or expenses incurred by it arising out of or in connection with the
acceptance and administration of the trust and its duties hereunder as Trustee,
Registrar, Paying Agent and/or Conversion Agent, including the costs and
expenses of enforcing this Indenture against the Company (including with respect
to this Section 8.07) and of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder.  The Trustee shall notify the Company and the Subsidiary
Guarantors of any claim of which a Trust Officer has received written notice for
which it may seek indemnity; however, unless the position of the Company is
prejudiced by such failure and the Company did not otherwise receive notice of
any such claim, the failure of the Trustee to promptly notify the Company shall
not limit its right to indemnification.  The Company shall defend each
such claim and the Trustee shall cooperate in the defense.  The
Trustee may retain separate counsel and the Company shall reimburse the Trustee
for the reasonable fees and expenses of such counsel.  The Company
need not pay for any settlement made without its consent (which consent shall
not be unreasonably withheld).

     

    Neither
the Company nor the Subsidiary Guarantors shall be obligated to reimburse any
expense or indemnify against any loss or liability determined to have been
caused by the Trustee through the Trustee’s own negligence or willful
misconduct. To secure the payment obligations of the Company and the Subsidiary
Guarantors in this Section, the Trustee shall have a claim prior to that of the
Holders of the Securities on all money or property held or collected by the
Trustee, except that held in trust to pay principal of or interest on any
particular Securities, including any payment of the redemption price, Repurchase
Price or Fundamental Change Repurchase Price.  The Trustee’s right to
receive payment of any amounts due under this Section 8.07 shall not be
subordinate to any other liability or Indebtedness of the Company.

     

    When the
Trustee incurs expenses or renders services after the occurrence of any Event of
Default specified in Sections 7.01(8) or 7.01(9), the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.

     

    The
benefits of this section shall survive termination of this Indenture and
resignation or removal of the Trustee.

     

    SECTION
8.08. Replacement of
Trustee.  The Trustee may resign by so notifying the Company
and the Subsidiary Guarantors.  The Holders of a majority in principal
amount of the Securities may remove the Trustee by so notifying the Trustee, in
writing.  The Company may remove the Trustee if:

     

    (1) the
Trustee fails to comply with Section 8.10;

     

    (2) the
Trustee is adjudged a bankrupt or an insolvent;

     

    (3) a
receiver or other public officer takes charge of the Trustee or its property;
or

     

    (4) the
Trustee becomes incapable of acting as Trustee hereunder.

     

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

     

    A
successor Trustee shall deliver a written acceptance of its appointment to the
retiring Trustee and to the Company and the Subsidiary
Guarantors.  Immediately after that and upon payment of its charges
hereunder, the retiring Trustee shall transfer all property held by it as
Trustee to the successor Trustee, subject to the lien provided for in Section
8.07, the resignation or removal of the retiring Trustee shall become effective,
and the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture.  A successor Trustee shall mail notice
of its succession to each Holder.

     

    If a
successor Trustee does not take office within 30 days after the retiring Trustee
resigns or is removed, the retiring Trustee, the Company or the Holders of a
majority in principal amount of the Securities may petition, at the expense of
the Company, any court of competent jurisdiction for the appointment of a
successor Trustee.

     

    If the
Trustee fails to comply with Section 8.10, any Holder may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.  Any successor Trustee shall comply with TIA
Section 310(a)(5).

     

    SECTION
8.09. Successor Trustee by Merger,
etc.  If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust assets to, another
corporation or national association, the successor corporation or national
association without any further act shall be the successor Trustee; provided that such
corporation or national association shall be otherwise eligible and qualified
under this Article and shall notify the Company of its successor
hereunder.

     

    SECTION
8.10. Eligibility
Disqualification.  This Indenture shall always have a Trustee
which satisfies the requirements of TIA Section 310(a)(1).  The
Trustee shall always have a combined capital and surplus of at least $50,000,000
as set forth in its most recent published annual report of
condition.  The Trustee shall also comply with TIA Section
310(b).

     

    SECTION
8.11. Preferential Collection of
Claims Against Company.  The Trustee shall comply with TIA
Section 311(a), excluding any creditor relationship listed in TIA Section
311(b).  A Trustee who has resigned or been removed shall be subject
to TIA Section 311(a) to the extent indicated therein.

     

    ARTICLE
NINE

     

    CONVERSION
OF THE SECURITIES

     

    SECTION
9.01. Conversion
Privilege.  (a)  Subject to the provisions of this
Article Nine, the Securities will be convertible into cash, and, if applicable,
Common Stock or other property as provided herein, only in the circumstances
described below in clauses (i)-(iv), and prior to the close of business on the
Maturity Date, unless such Securities have been previously redeemed or
repurchased.  A Holder’s right to convert a Security called for
redemption or delivered for repurchase will terminate at the close of business
on the Business Day immediately preceding the redemption date or repurchase date
for the Security, unless the Company defaults in making the payment due upon
redemption or repurchase.  In addition, if a Holder has exercised its
right to require the Company to repurchase Securities, such Holder may convert
its Securities only if it withdraws its notice and converts its Securities
before the close of business on the Business Day immediately preceding such
repurchase date.  Subject to the foregoing, the Securities are
convertible if any of the following conditions is satisfied:

     

    (i) Conversion Upon Satisfaction of
Common Stock Price Condition.  (A) Prior to December 15,
2036, during any Quarter commencing after the Issue Date, and only during such
Quarter, if the Closing Sale Price of the Common Stock for at least 20 Trading
Days during the period of 30 consecutive Trading Days ending on the last Trading
Day of the Quarter immediately preceding such Quarter (appropriately adjusted to
take into account the occurrence, during such 30 consecutive Trading-Day period,
of any event requiring adjustment of the Base Conversion Price under this
Indenture) is more than 125% of the Base Conversion Price on such 30th Trading
Day;

     

    
      	
              (B)  

            	
              on
      or after December 15, 2036, at all times on or after any date
      thereafter;

            

    

     

    (ii) Conversion Upon Satisfaction of
Trading Price Condition.  During the five consecutive
Business-Day period after any five consecutive Trading-Day period in which the
Trading Price per $1,000 principal amount of Securities, as determined following
a request by a Holder in accordance with the procedures described below in
Section 9.01(c), for each Trading Day of such five Trading-Day period was less
than 95% of the product of the average of the Closing Sale Prices of the Common
Stock for such five Trading-Day period and the Applicable Conversion Rate; provided that, for
purposes of this Section 9.01(a)(ii), the Applicable Stock Price shall be
equal to the Closing Sale Price on such day;

     

    (iii) Conversion Upon Notice of
Redemption.  Such Security has been called for redemption by
the Company pursuant to Section 3.07 and the redemption has not yet occurred, so
long as the Holder surrenders such Security for conversion (or if the Security
is held in book-entry form, complete and deliver to the Depository appropriate
instructions in accordance with the Applicable Procedures) prior to the close of
business on the date that is one Business Day prior to the applicable Redemption
Date (provided,
that if the Company shall default in paying the Redemption Price when due, the
conversion right shall continue until such time as such default is cured and
such Security is redeemed), whether or not the Security is otherwise convertible
at such time;

     

    (iv) Conversion Upon Specified Corporate
Transactions.  (A) a distribution to all or substantially all
holders of Common Stock of rights, warrants or options entitling them (for a
period commencing no earlier than the date of distribution and expiring not more
than 60 days after the date of distribution) to subscribe for or purchase shares
of Common Stock at a price less than the average Closing Sale Prices of the
Common Stock for the 10 Trading Days immediately preceding the date such
distribution was first publicly announced; or

     

    (B) a
distribution to all or substantially all holders of Common Stock of cash or
other assets, evidences of Company indebtedness, rights or warrants to purchase
or subscribe for Capital Stock or other securities of the Company, where the
fair market value of such distribution per share of Common Stock (as determined
by the Board of Directors, whose determination shall be conclusive evidence of
such fair market value) exceeds 10% of the Closing Sale Price of the Common
Stock on the Trading Day immediately preceding the date such distribution was
first publicly announced;

     

    provided that any Holder of a
Security shall have no right to convert any Security pursuant to this Section
9.01(a)(iv) if such Holder otherwise participates in the distribution described
in this Section 9.01(a)(iv) on an as-converted basis solely into Common Stock at
the Applicable Conversion Rate without conversion of such Holder’s Securities;
or

     

    (C) if the
Company is party to a consolidation, merger, share exchange, sale of all or
substantially all of its assets or other similar transaction, in each case
pursuant to which the Common Stock is subject to conversion into (or holders of
Common Stock are entitled to receive) cash, securities or other property, from
and after the effective date of such transaction until and including the date
that is 30 days after the effective date of such transaction.  The
Company shall give notice to all Holders and the Trustee prior to the
anticipated effective date of such transaction.

     

    In the
case of the foregoing Sections 9.01(a)(iv)(A) and 9.01(a)(iv)(B), the Company
shall cause a notice of such distribution to be filed with the Trustee and the
Conversion Agent and to be mailed to each Holder of Securities no later than 20
days prior to the Ex-Dividend Date for such distribution.  Once the
Company has given such notice, Holders may surrender their Securities for
conversion at any time thereafter until the earlier of the close of business on
the Business Day immediately preceding the Ex-Dividend Date or the Company’s
announcement that such distribution will not take place.  The
“Ex-Dividend Date” for any such issuance or distribution means the first date on
which a sale of the Common Stock does not automatically transfer the right to
receive the relevant distribution from the seller of the Common Stock to the
buyer of the Common Stock.

     

    (b) For each
Quarter of the Company commencing prior to December 15, 2036, the Conversion
Agent, on behalf of the Company, shall determine, on the first Business Day
following the last Trading Day of the immediately preceding Quarter, whether the
Securities are convertible pursuant to clause (i) of Section 9.01(a), and, if
so, shall notify the Trustee and the Company in writing.  If the
conditions set forth in clause (i) of Section 9.01(a) have been met, the Company
shall so notify the Holders.

     

    (c) The
Trustee shall have no obligation to determine the Trading Price of the
Securities pursuant to clause (ii) of Section 9.01(a) unless the
Company has requested such determination in writing; and the Company shall have
no obligation to make such request unless a Holder of the Securities provides
the Company with reasonable evidence that the Trading Price per $1,000 principal
amount of Securities is reasonably likely to be less than 95% of the product of
the Closing Sale Price and the Applicable Conversion Rate then in effect per
$1,000 principal amount of Securities.  If a Holder provides such
evidence or if the Company otherwise elects to require such determination, the
Company shall instruct the Trustee to determine the Trading Price of the
Securities beginning on the next Trading Day and on each successive Trading Day
until the Trading Price of the Securities is greater than or equal to 95% of the
product of the Closing Sale Price of the Common Stock and the Applicable
Conversion Rate.  The Trustee shall promptly notify the Company of its
determination on each such day.  If the condition set forth in clause
(ii) of Section 9.01(a) has been met, the Company shall so notify the
Holders.

     

    (d) A Holder
of Securities is not entitled to any rights of a holder of Common Stock until
such Holder has tendered its Securities for conversion and, if applicable, has
received shares of Common Stock as provided herein.

     

    SECTION
9.02. Conversion
Procedure.  (a)  To convert a Security, a Holder must
(i) if the Security is held in book-entry form, complete and deliver to the
Depository appropriate instructions pursuant to the Applicable Procedures or
(ii) if the Security is in definitive form, (A) complete and manually
sign the irrevocable conversion notice on the back of the Security and deliver
such notice to the Conversion Agent, (B) surrender the Security to the
Conversion Agent and (C) furnish appropriate endorsements and transfer
documents if required by the Registrar or the Conversion Agent, and pay any
transfer or other tax, if required by Section 9.03.  The “Conversion
Date” shall be the Business Day on which the Holder satisfies all of the
requirements set forth in the immediately preceding sentence, if all such
requirements shall have been satisfied by 11:00 a.m., New York time, on such
day, and in all other cases, the Conversion Date shall be the next succeeding
Business Day.

     

    (b) The
Person in whose name the Security is registered shall be deemed to be a holder
of Common Stock of record on the Conversion Date; provided that no
surrender of a Security on any date when the stock transfer books of the Company
shall be closed shall be effective to constitute the Person or Persons entitled
to receive the shares of Common Stock upon such conversion as the record holder
or holders of such shares of Common Stock on such date, but such surrender shall
be effective to constitute the Person or Persons entitled to receive such shares
of Common Stock as the record holder or holders thereof for all purposes at the
close of business on the next succeeding day on which such stock transfer books
are open; provided further that such
conversion shall be at the Applicable Conversion Rate in effect on the date that
such Security shall have been surrendered for conversion, as if the stock
transfer books of the Company had not been closed.  Upon conversion of
a Security, such Person shall no longer be a Holder of such
Security.

     

    (c) No
payment or adjustment shall be made for accrued but unpaid interest on a
converted Security or for dividends or distributions on shares of Common Stock
issued upon conversion of a Security.  The Company shall not adjust
the Base Conversion Price to account for the accrued but unpaid
interest.  Notwithstanding the foregoing, if Securities are converted
after the close of business on a regular record date and prior to the opening of
business on the next interest payment date, including the Maturity Date, Holders
of such Securities at the close of business on such regular record date shall
receive the accrued but unpaid interest payable on such Securities on the
corresponding interest payment date notwithstanding the
conversion.  In such event, such Security, when surrendered for
conversion, must be accompanied by delivery of payment to the Conversion Agent
in an amount equal to the accrued but unpaid interest payable on such interest
payment date on the portion so converted.  If such payment does not
accompany such Security, the Security shall not be converted; provided that no such payment
shall be required if such Security has been called for redemption on a
redemption date within the period between the close of business on such record
date and the opening of business on such interest payment date, or if such
Security is surrendered for conversion on the interest payment
date.  If the Company defaults in the payment of interest payable on
the interest payment date, the Conversion Agent shall promptly repay such funds
to the Holder.

     

    (d) A Holder
may convert a portion of a Security equal to $1,000 or any integral multiple
thereof.  Provisions of this Indenture that apply to conversion of all
of a Security also apply to conversion of a portion of a
Security.  Upon surrender of a Security that is converted in part, the
Company shall execute, and the Trustee shall, upon receipt of an order from the
Company, authenticate and deliver to the Holder, a new Security equal in
principal amount to the unconverted portion of the Security
surrendered.

     

    SECTION
9.03. Taxes on
Conversion.  If a Holder converts a Security, the Company shall
pay any documentary, stamp or similar issue or transfer tax that may be imposed
by the United States or any political subdivision thereof or taxing authority
thereof or therein due on the issue of shares of Common Stock upon such
conversion; provided that the Holder shall pay any tax which is due because the
Holder requests the shares of Common Stock to be issued in a name other than the
Holder’s name.  The Conversion Agent may refuse to deliver the
certificates representing the Common Stock being issued in a name other than the
Holder’s name until the Conversion Agent receives a sum sufficient to pay any
tax which will be due because the shares are to be issued in a name other than
the Holder’s name.  Nothing herein shall preclude any tax withholding
required by law or regulations.

     

    SECTION
9.04. Company to Provide
Stock.  The Company shall at all times reserve and keep
available for issuance upon the conversion of the Securities such number of its
authorized but unissued shares of Common Stock as will from time to time be
sufficient to permit the conversion of all outstanding Securities, and shall
take all action required to increase the authorized number of shares of Common
Stock if at any time there shall be insufficient unissued shares of Common Stock
to permit such reservation or to permit the conversion of all outstanding
Securities.  All shares of Common Stock that may be issued upon
conversion of the Securities shall be issued in global or fully registered
certificated form (“Certificated Common Stock”).  Certificates of
Certificated Common Stock will be mailed or made available at the office of the
Conversion Agent as soon as reasonably practicable after the relevant Conversion
Date to the converting Holder.

     

    The
Company covenants that all shares of Common Stock delivered upon conversion of
the Securities shall be newly issued shares or treasury shares, shall be duly
authorized, validly issued, fully paid and non-assessable and shall be free from
preemptive rights and free of any lien or adverse claim.

     

    The
Company will endeavor promptly to comply with all federal and state securities
laws regulating the offer and delivery of shares of Common Stock upon conversion
of Securities, if any, and will list or cause to have quoted such shares of
Common Stock on each national securities exchange or in the over-the-counter
market or such other market on which the Common Stock is then listed or
quoted.

     

    SECTION
9.05. Adjustment of Base
Conversion Price, the Base Conversion Rate and the Incremental Share
Factor.  (a)  The Base Conversion Price shall be
subject to adjustment (and the Base Conversion Rate and Incremental Share Factor
shall be adjusted on an inversely proportionate basis as provided in
Section 9.05(d)) as follows:

     

    (i) In case
the Company shall at any time or from time to time (A) pay a dividend (or
other distribution) payable in shares of Common Stock on any class of Capital
Stock (which, for purposes of this Section 9.05 shall include, without
limitation, any dividends or distributions in the form of options, warrants or
other rights to acquire Capital Stock) of the Company (other than any issuance
of shares of Common Stock in connection with the conversion of Securities);
(B) subdivide the outstanding shares of Common Stock into a larger number
of shares; (C) combine the outstanding shares of Common Stock into a
smaller number of shares; (D) issue any shares of its Capital Stock in a
reclassification of the Common Stock; or (E) pay a dividend or make a
distribution to all holders of shares of Common Stock (other than a dividend or
distribution subject to Section 9.05(a)(iii)) pursuant to a stockholder
rights plan, “poison pill” or similar arrangement, then in each such case, the
Base Conversion Price in effect immediately prior to such event shall be
adjusted (and any other appropriate actions shall be taken by the Company) so
that the Holder of any Securities thereafter surrendered for conversion shall be
entitled to receive cash and, if applicable, the number of shares of Common
Stock that such Holder would have owned or would have been entitled to receive
upon or by reason of any of the events described above, had such Securities been
converted immediately prior to the occurrence of such event.  For the
purposes of calculating the Base Conversion Price adjustment pursuant to this
Section 9.05(a)(i), Holders of a Security shall be treated as if they had
the right to convert the Security solely into Common Stock at the then
applicable Base Conversion Rate.  An adjustment made pursuant to this
Section 9.05(a)(i) shall become effective retroactively (x) in the
case of any such dividend or distribution, to the day immediately following the
close of business on the record date for the determination of holders of Common
Stock entitled to receive such dividend or distribution or (y) in the case
of any such subdivision, combination or reclassification, to the close of
business on the day upon which such corporate action becomes
effective.

     

    (ii) In case
the Company shall at any time or from time to time issue to all holders of
Common Stock rights, options or warrants entitling the holders thereof to
subscribe for or purchase, for a period expiring not more than 60 days after the
date of distribution, shares of Common Stock at a price per share less than the
average of the Closing Sale Prices of Common Stock for the ten Trading Days
immediately preceding the date such distribution was first publicly announced
(treating the price per share of any security convertible or exchangeable or
exercisable into Common Stock as equal to (A) the sum of the price paid to
acquire such security convertible, exchangeable or exercisable into Common Stock
plus any additional consideration payable (without regard to any anti-dilution
adjustments) upon the conversion, exchange or exercise of such security into
Common Stock divided by (B) the number of shares of Common Stock into which
such convertible, exchangeable or exercisable security is initially convertible,
exchangeable or exercisable), then, and in each such case, the Base Conversion
Price then in effect shall be adjusted by dividing the Base Conversion Price in
effect on the day immediately prior to the record date of such issuance by a
fraction (y) the numerator of which shall be the sum of the number of shares of
Common Stock outstanding on such record date plus the number of additional
shares of Common Stock issued or to be issued upon or as a result of the
issuance of such rights, options or warrants (or the maximum number into or for
which such convertible or exchangeable securities initially may convert or
exchange or for which such options, warrants or other rights initially may be
exercised) and (z) the denominator of which shall be the sum of the number
of shares of Common Stock outstanding on such record date plus the number of
shares of Common Stock which the aggregate consideration for the total number of
such additional shares of Common Stock so issued (or into or for which such
convertible or exchangeable securities may convert or exchange or for which such
options, warrants or other rights may be exercised plus the aggregate amount of
any additional consideration initially payable upon the conversion, exchange or
exercise of such security) would purchase at such average of the Closing Sale
Prices of the Common Stock over such ten Trading Days, provided that no
adjustment will be made if Holders of the Securities are entitled to participate
in the distribution on substantially the same terms as holders of the Common
Stock as if such Holders had converted their Securities solely into Common Stock
immediately prior to such distribution at the Applicable Conversion
Rate.  Such adjustments shall be made successively whenever any such
rights, warrants or options are issued, and shall become effective immediately
after such record date.  If at the end of the period during which such
rights, warrants or options are exercisable not all rights, warrants or options
shall have been exercised, the adjusted Base Conversion Price shall be
immediately readjusted to what it would have been upon application of the
foregoing adjustment substituting the number of additional shares of Common
Stock actually issued (or the number of shares of Common Stock issuable upon
conversion of convertible securities actually issued) for the total number of
shares of Common Stock offered (or convertible securities offered).

     

    (iii) If the
Company shall at any time make a distribution, by dividend or otherwise, to all
holders of shares of its Common Stock consisting exclusively of cash (excluding
any cash portion of distributions referred to in clause (E) of
paragraph (i) above and cash distributed upon a merger or consolidation to
which Section 9.11 below applies) in an amount per share of Common Stock that,
when combined with the per share amounts of all other all-cash distributions to
all holders of shares of its Common Stock made within the 90-day period ending
on the record date for the distribution giving rise to an adjustment pursuant to
this Section 9.05(a)(iii), exceeds $0.075 per share of Common Stock (the
“Distribution  Threshold Amount”), then the Base Conversion Price will
be adjusted by multiplying:

     

    (1) the Base
Conversion Price in effect immediately prior to the close of business on the
record date fixed for the determination of holders of Common Stock entitled to
receive such distribution by

     

    (2) a
fraction, the numerator of which will be the Market Value on the fourth trading
day on the NYSE prior to such record date minus the amount of cash per share of
Common Stock so distributed in excess of the Dividend Threshold Amount for which
an adjustment has not otherwise been made pursuant to this Section 9.05(a)(iii)
and the denominator of which will be the Market Value on the fourth trading day
on the NYSE prior to such record date.

     

    Subject
to Section 9.06(b), such adjustment shall become effective immediately after the
record date for the determination of holders of Common Stock entitled to receive
the distribution giving rise to an adjustment pursuant to this
Section 9.05(a)(iii).  If an adjustment is required to be made
under this Section 9.05 as a result of a cash dividend in any quarterly
period that exceeds the Distribution Threshold Amount, the adjustment shall be
based upon the amount by which the distribution exceeds the Distribution
Threshold Amount.  If an adjustment is otherwise required to be made
under this Section 9.05, the adjustment shall be based upon the full amount of
the distribution.  The Distribution Threshold Amount is subject to
adjustment under the same circumstances under which the Base Conversion Price is
subject to adjustment pursuant to Section 9.05(a)(i) or Section
9.05(a)(ii).

     

    (iv) If the
Company shall at any time or from time to time:  (A) complete a
tender or exchange offer by the Company or any of its subsidiaries for shares of
Common Stock that involves an aggregate consideration that, together with
(1) any cash and other consideration payable in a tender or exchange offer
by the Company or any of its subsidiaries for shares of Common Stock expiring
within the then-preceding 12 months in respect of which no adjustment
pursuant to this Section 9.05 has been made and (2) the aggregate
amount of any such all-cash distributions referred to in paragraph (iii)
above to all holders of shares of Common Stock within the then-preceding
12 months in respect of which no adjustments pursuant to this
Section 9.05 have been made, exceeds 15% of the Company’s market
capitalization (defined as the product of the Market Value on the record date of
such distribution times the number of shares of Common Stock outstanding on such
record date) on the expiration of such tender offer; or (B) make a
distribution to all holders of its Common Stock consisting of evidences of
indebtedness, shares of its Capital Stock other than Common Stock or other
assets (including securities, but excluding those dividends, rights, options,
warrants and distributions referred to in paragraphs (i), (ii), (iii) above
or clause (A) of this (iv)), then, and in each such case, the Base Conversion
Price then in effect shall be adjusted by dividing the Base Conversion Price in
effect immediately prior to the date of such distribution or completion of such
tender or exchange offer, as the case may be, by a fraction (x) the
numerator of which shall be the Market Value on the record date referred to
below, or, if such adjustment is made upon the completion of a tender or
exchange offer, on the payment date for such offer, and (y) the denominator
of which shall be such Market Value less the then fair market value (as
determined by the Board of Directors of the Company) of the portion of the cash,
evidences of indebtedness, securities or other assets so distributed or paid in
such tender or exchange offer, applicable to one share of Common Stock (but such
denominator shall not be less than one); provided, however, that no
adjustment shall be made with respect to any distribution of rights to purchase
securities of the Company if Holders of the Securities are entitled to
participate in such distribution on substantially the same terms as holders of
the Common Stock as if such Holders had converted their Securities solely into
Common Stock immediately prior to such distribution at the then Applicable
Conversion Rate.  Such adjustment shall be made whenever any such
distribution is made or tender or exchange offer is completed, as the case may
be, and shall become effective retroactively to a date immediately following the
close of business on the record date for the determination of stockholders
entitled to receive such distribution.

     

    (v) If the
Company at any time or from time to time shall take any action affecting its
Common Stock (it being understood that the issuance or sale of shares of Common
Stock (or securities convertible into or exchangeable for shares of Common
Stock, or any options, warrants or other rights to acquire shares of Common
Stock) to any Person at a price per share less than the Base Conversion Price
then in effect shall not be deemed such an action), other than an action
described in any of Section 9.05(a)(i)  through
Section 9.05(a)(iv), inclusive, or Section 9.11, then the Base Conversion
Price shall be adjusted in such manner and at such time as the Board of
Directors of the Company in good faith determines to be equitable in the
circumstances (such determination to be evidenced in a resolution, a certified
copy of which shall be mailed to the Holders of the Securities).

     

    (b) (i)  If
a Holder elects to convert its Securities in connection with a specified
corporate transaction pursuant to Section 9.01(a)(iv)(C) that occurs on or
prior to December 15, 2018, and that constitutes a Fundamental Change (other
than relating to the composition of our Board of Directors as described in
clause (iv) of the definition of Fundamental Change in Section 1.01), and
10% or more of the fair market value of the consideration for the Common Stock
(as determined by the Board of Directors of the Company, whose determination
shall be conclusive evidence of such fair market value) in the corporate
transaction consists of (A) cash (not including cash payments for
fractional shares and cash payments pursuant to dissenters’ appraisal rights),
(B) other property or (C) securities that are not traded or scheduled
to be traded immediately following such transaction on a U.S. national
securities exchange or the NASDAQ Global Market or NASDAQ Global Select Market
(a “Non-Stock Change in Control”), then the Applicable Conversion Rate will be
increased (with respect only to Securities that are converted in connection with
such transaction as set forth in Section 9.05(b)(vi) below) by a number of
shares (the “Additional Shares”) determined in the manner set forth
below.

     

    (ii) The
increase in the Applicable Conversion Rate shall be expressed as a number of
Additional Shares per $1,000 principal amount of Securities and shall be
determined by the Company by reference to the table attached as Schedule A
hereto, based on the date the corporate transaction constituting a Non-Stock
Change in Control becomes effective (the “Effective Date”) and the share price
paid per share of Common Stock in such corporate transaction (the “Share
Price”); provided that
(x) if holders of the Common Stock receive only cash in such corporate
transaction, the Share Price shall be the cash amount paid per share and
(y) in all other cases, the Share Price shall be the average of the Closing
Sale Prices of the Common Stock on the five Trading Days prior to but not
including the Effective Date of the Non-Stock Change in Control.

     

    (iii) The exact Share Prices and Effective
Dates may not be set forth in the table attached as Schedule A hereto, in which
case:

     

    (A) if the
Share Price is between two Share Price amounts in the table attached as Schedule
A hereto, or the Effective Date is between two dates in the table, the Company
shall determine the number of Additional Shares by a straight-line interpolation
between the numbers of Additional Shares set forth for the higher and lower
Share Price amounts and/or the two dates, as applicable, based on a 365-day
year;

     

    (B) if the
Share Price is in excess of $400.00 per share (subject to adjustment in the same
manner as the Base Conversion Price as set forth in this Indenture), no increase
in the Applicable Conversion Rate shall be made; and

     

    (C) if the
Share Price is less than $57.26 per share (subject to adjustment in the same
manner as the Base Conversion Price as set forth in this Indenture), no increase
in the Applicable Conversion Rate shall be made.

     

    (iv) The Share
Prices set forth in the first row of the table (i.e., column headers)
in Schedule A hereto shall be adjusted as of any date on which the Base
Conversion Price of the Securities is adjusted pursuant to this
Indenture.  The adjusted Share Prices shall equal the Share Prices
applicable immediately prior to such adjustment, divided by a fraction, the
numerator of which is the Base Conversion Price immediately prior to the
adjustment giving rise to the Share Price adjustment and the denominator of
which is the Base Conversion Price as so adjusted.  The number of
Additional Shares shall be adjusted in the same manner as the Base Conversion
Rate as set forth in this Indenture.

     

    (v) Notwithstanding
the foregoing, in no event shall the Applicable Conversion Rate exceed 17.4642
per $1,000 principal amount of Securities (subject to adjustment in the same
manner as the Base Conversion Rate as set forth in this Indenture).

     

    (vi) For the
avoidance of doubt, the adjustment provided for in this Section 9.05(b)
shall be made only with respect to the Securities being converted in connection
with such Fundamental Change and shall not be effective as to any Securities not
so converted; provided, however, that after
any adjustment of the Applicable Conversion Rate pursuant to this
Section 9.05(b), the Applicable Conversion Rate shall be subject to further
adjustments in the event that any of the events set forth in this Section 9.05
occur thereafter.  A conversion will be deemed to be “in connection
with” a Fundamental Change only if the conversion is effected from and after the
effective date of the Fundamental Change until and including the date that is 30
days thereafter.

     

    (c) Notwithstanding
Section 9.05(b), in the case of a Non-Stock Change in Control constituting
a Public Acquirer Change in Control, the Company may, in lieu of adjusting the
Applicable Conversion Rate as set forth in Section 9.05(b), elect to adjust the
related conversion obligation such that, from and after the Effective Date of
such Public Acquirer Change in Control, the right to convert a Security will be
changed into a right to convert a Security into cash and Acquirer Common Stock
as provided below.  The Company may make such election at any time
prior to the twentieth day immediately preceding the proposed Effective Date of
the Public Acquirer Change in Control, and if made, such election shall be
irrevocable.  In the event the Company makes such election, upon
conversion the Company shall deliver cash and shares of Acquirer Common Stock,
if any, in the same manner described in Section 9.14.  If the
Company makes such an election, on and following the Effective Date of such
transaction:

     

    (i) the Base
Conversion Rate will be adjusted by multiplying (A) the Base Conversion
Rate in effect immediately prior to the Effective Date of such Public Acquirer
Change in Control, by (B) a fraction equal to the average of the quotients
obtained, for each Trading Day in the 10 consecutive Trading-Day period
commencing on the Trading Day next succeeding the Effective Date of such Public
Acquirer Change in Control (the ‘‘Valuation Period’’) by dividing (i) the
Acquisition Value of our Common Stock on each such Trading Day in the Valuation
Period, by (ii) the Closing Sale Price of the Acquirer Common Stock on each
such Trading Day in the Valuation Period;

     

    (ii) the
Incremental Share Factor will be adjusted by proportionally adjusting the
Incremental Share Factor immediately prior to such transaction on the same basis
as the Base Conversion Rate; and

     

    (iii) the
Applicable Stock Price will be based on the Closing Sale Price of the Acquirer
Common Stock.

     

    (d) (i)  Whenever
the Base Conversion Price shall be adjusted in accordance with any provision of
this Section 9.05 (other than clause (ii) of this Section 9.05(d)), the
Base Conversion Rate shall be adjusted (unless it otherwise adjusted at such
time pursuant to the provision giving rise to such adjustment of the Base
Conversion Price) so as to be equal to the quotient obtained by dividing $1,000
by the Base Conversion Price as so adjusted.

     

    (ii) Whenever
the Base Conversion Rate shall be adjusted in accordance with
Section 9.05(c), then the Base Conversion Price shall be adjusted so as to
be equal to the quotient obtained by dividing $1,000 by the Base Conversion Rate
as so adjusted.

     

    (iii) Whenever
the Base Conversion Rate shall be adjusted in accordance with this Section 9.05,
the Incremental Share Factor shall be adjusted (unless it is so otherwise
adjusted at such time pursuant to the provision giving rise to such adjustment
of the Base Conversion Price) by multiplying the Incremental Share Factor prior
to such adjustments by a fraction, the numerator or which is the Base Conversion
Rate as so adjusted and the denominator or which is the Base Conversion Rate
prior to adjustment.

     

    (e) Notwithstanding
the foregoing, in no event will the Base Conversion Price be less than $57.26,
subject to adjustment under the same circumstances under which the Base
Conversion Price is subject to adjustment pursuant to Section 9.05(a)(i),
(ii), (iv) and (v).

     

    SECTION
9.06. No
Adjustment.  (a)  Notwithstanding anything herein to
the contrary, no adjustment under Section 9.05 need be made to the Base
Conversion Price unless such adjustment would require an increase or decrease of
at least 1% of the Base Conversion Price (or the Base Conversion Rate or the
Incremental Share Factor) then in effect.  Any lesser adjustment shall
be carried forward and shall be made at the time of and together with the next
subsequent adjustment, if any, which, together with any adjustment or
adjustments so carried forward, shall amount to an increase or decrease of at
least 1% of such Conversion; provided, however, that with respect to
adjustments to be made to the Base Conversion Price in connection with cash
dividends paid by the Company,  the Company shall make such
adjustments, regardless of whether such aggregate adjustments amount to 1% or
more of the Base Conversion Price, no later than December 15 of each calendar
year.

     

    (b) If the
Company shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend or other distribution, and shall
thereafter (and before the dividend or distribution has been paid or delivered
to stockholders) legally abandon its plan to pay or deliver such dividend or
distribution, then thereafter no adjustment in the Base Conversion Price (or the
Base Conversion Rate or the Incremental Share Factor) then in effect shall be
required by reason of the taking of such record.

     

    (c) No
adjustment need be made upon the issuance of Common Stock under any present or
future employee benefits plan or program of the Company or in connection with an
acquisition made by the Company.

     

    (d) No
adjustment need be made upon the issuance of Common Stock pursuant to (i) the
exercise of any options, warrants or rights to purchase such Common Stock, (ii)
the exchange of any exchangeable securities for such Common Stock or
(iii) the conversion of any convertible securities into such Common Stock
(except as expressly set forth herein).

     

    (e) No
adjustment need be made to account for accrued but unpaid interest.

     

    (f) No
adjustment need be made for a change in the par value or a change to no par
value of the Common Stock.

     

    (g) To the
extent that the Securities become convertible into cash, no adjustment need be
made thereafter as to the cash.  Interest will not accrue on the
cash.

     

    SECTION
9.07. Equivalent
Adjustments.  If, as a result of an adjustment made pursuant to
Section 9.05 above, the Holder of any Security thereafter surrendered for
conversion shall become entitled to receive any shares of Capital Stock of the
Company other than shares of Common Stock, thereafter the Base Conversion Price
of such other shares so receivable upon conversion of any Securities shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to Common Stock
contained in this Article Nine.

     

    SECTION
9.08. Adjustment for Tax
Purposes.  The Company reserves the right to make such
reductions in the Base Conversion Price in addition to those required in the
foregoing provisions as it considers advisable in order that any event treated
for federal income tax purposes as a dividend of stock or stock rights will not
be taxable to the recipients.  In the event the Company elects to make
such a reduction in the Base Conversion Price, the Company will comply with the
requirements of Rule 14e-1 under the Exchange Act, and any other securities
laws and regulations thereunder if and to the extent that such laws and
regulations are applicable in connection with the reduction of the Base
Conversion Price.

     

    SECTION
9.09. Notice of
Adjustment.  Upon any increase or decrease in the Base
Conversion Price, the Base Conversion Rate and the Incremental Share Factor,
then, and in each such case, the Company promptly shall deliver a notice of
adjustment to each Holder of Securities and an Officers’ Certificate to the
Trustee setting forth in reasonable detail the event requiring the adjustment
and the method by which such adjustment was calculated and specifying the
increased or decreased Base Conversion Price, Base Conversion Rate and
Incremental Share Factor then in effect following such
adjustment.  The certificate shall be conclusive evidence of the
correctness of such adjustment, absent manifest error, and the Trustee may
conclusively assume that, unless and until such certificate is received by it,
no such adjustment is required.

     

    SECTION
9.10. Notice of Certain
Transactions.  In case:

     

    (i) the
Company shall declare a dividend (or any other distribution) on the Common Stock
that would require an adjustment in the Base Conversion Price pursuant to
Section 9.05; or

     

    (ii) the
Company shall authorize the granting, generally, to the holders of Common Stock
of rights, warrants or options to subscribe for or purchase any share of any
class or any other rights, warrants or options; or

     

    (iii) of any
reclassification of the Common Stock of the Company (other than a subdivision or
combination of its outstanding Common Stock, or a change in par value, or from
par value to no par value, or from no par value to par value), or of any
consolidation, merger, or share exchange to which the Company is a party and for
which approval of any holders of Common Stock is required, or of the sale or
transfer of all or substantially all of the assets of the Company;
or

     

    (iv) of the
voluntary or involuntary dissolution, liquidation or winding-up of the
Company;

     

    the
Company shall cause to be filed with the Trustee and the Conversion Agent and to
be mailed to each Holder of Securities at its address appearing on the list
provided for in Section 2.05, as promptly as possible but in any event at least
ten days prior to the applicable date hereinafter specified, a notice stating
(x) the date on which a record is to be taken for the purpose of such dividend,
distribution or rights, warrants or options, or, if a record is not to be taken,
the date as of which the holders of Common Stock of record to be entitled to
such dividend, distribution or rights are to be determined, or (y) the date on
which such reclassification, consolidation, merger, share exchange, sale,
transfer, dissolution, liquidation or winding-up is expected to become effective
or occur, and the date as of which it is expected that holders of Common Stock
of record shall be entitled to exchange their Common Stock for securities or
other property deliverable upon such reclassification, consolidation, merger,
share exchange, sale, transfer, dissolution, liquidation or
winding-up.  Failure to give such notice, or any defect therein, shall
not affect the legality or validity of such dividend, distribution,
reclassification, consolidation, merger, sale, share exchange, transfer,
dissolution, liquidation or winding-up.

     

    SECTION
9.11. Effect of Reclassification,
Consolidation, Merger, Share Exchange or Sale on Conversion
Privilege.  Upon (i) any reclassification or change of the
outstanding shares of Common Stock (other than a change in par value, or from
par value to no par value, or from no par value to par value, or as a result of
a split, subdivision or combination), (ii) any consolidation, merger or
combination of the Company with another Person as a result of which holders of
shares of Common Stock shall be entitled to receive cash, stock, securities or
other property or assets with respect to or in exchange for such shares of
Common Stock (other than a merger in which the Company is the continuing
corporation and which does not result in any reclassification of, or change
(other than a change in name, or par value, or from par value to no par value,
or from no par value to par value or as a result of a subdivision or
combination) in, the Common Stock), or (iii) any sale, lease, transfer or
conveyance of all or substantially all of the assets of the Company and its
subsidiaries substantially as an entirety to any other Person, or any statutory
share exchange, as a result of which holders of Common Stock shall be entitled
to receive cash, stock, securities or other property or assets (including any
combination thereof) with respect to or in exchange for such Common Stock (any
such event a “Merger Event”), then:

     

    (a) the
Company or the successor or purchasing corporation, as the case may be, shall
execute with the Trustee a supplemental indenture (which shall comply with the
TIA as in force at the date of execution of such supplemental indenture if such
supplemental indenture is then required to so comply) permitted under
Section 10.01(6) providing for the conversion and settlement of the
Securities as set forth in this Indenture.  Such supplemental
indenture shall provide for adjustments which shall be as nearly equivalent as
may be practicable to the adjustments provided for in this
Article Nine.  If, in the case of any Merger Event, the Reference
Property includes shares of stock or other securities and assets of a
corporation other than the successor or purchasing corporation, as the case may
be, in such reclassification, change, consolidation, merger, combination, sale
or conveyance, then such supplemental indenture shall also be executed by such
other corporation and shall contain such additional provisions to protect the
interests of the Holder of the Securities as the Board of Directors of the
Company shall reasonably consider necessary by reason of the foregoing,
including to the extent required by the Board of Directors of the Company and
practicable the provisions providing for the repurchase rights set forth in
Article Three herein.

     

    In the
event the Company shall execute a supplemental indenture pursuant to this
Section 9.11, the Company shall promptly file with the Trustee an Officers’
Certificate briefly stating the reasons therefor, the kind or amount of cash,
shares of stock or other securities or property that will constitute the
Reference Property after any such Merger Event, any adjustment to be made with
respect thereto and shall promptly mail notice thereof to all
Holders.

     

    (b) Notwithstanding
the provisions of Section 9.02, and subject to the provisions
Section 9.05(c) in the case of a Public Acquirer Change in Control, at the
effective time of such Merger Event, (i) the right to convert each $1,000
principal amount of Securities will be changed to a right to convert such
Security into cash (up to the aggregate principal amount thereof) and, if
applicable, the kind and amount of shares of stock, securities or other property
or assets (including any combination thereof) that a holder of a number of
shares of Common Stock immediately prior to such transaction would have owned or
been entitled to receive (the “Reference Property”) based on the Daily
Conversion Values of the Reference Property and (ii) the related conversion
obligation of the Company shall be settled at the times and otherwise as set
forth under clause (c) below.  In the event holders of shares of
Common Stock have the opportunity to elect the form of consideration to be
received in such Merger Event, the type and amount of consideration that Holders
of Securities would have been entitled to receive shall be deemed to be the
weighted average of the types and amounts of consideration received by holders
of shares of Common Stock that affirmatively make an election.  The
Company shall not become a party to any such transaction unless its terms are
consistent with the preceding.  None of the foregoing provisions shall
affect the right of a Holder of Securities to convert its Securities into cash
and shares of Common Stock, as set forth in Section 9.01 prior to the
effective date of such Merger Event.

     

    (c) If the
Securities shall be convertible into Reference Property as set forth above, the
related conversion obligation of the Company, with respect to each $1,000
principal amount of Securities tendered for conversion after the effective time
of any such Merger Event, shall be settled in cash and, if applicable, units of
Reference Property in the manner contemplated in Section 9.14; provided that for
purposes of determining the conversion consideration, amounts shall be based on
the per unit average value of the Reference Property during the applicable
period, such per unit value shall be (i) for any shares of common stock
that are included in the Reference Property, the value using the procedures set
forth in the definition of “Closing Sale Price”; (ii) for any other
property (other than cash) included in the Reference Property, the value as
determined in good faith by two independent nationally recognized investment
banks as of the effective date of the Merger Event and (iii) for any cash,
the face amount of such cash.

     

    (d) The
Company shall cause notice of the execution of such supplemental indenture to be
mailed to each Holders of Securities, at its last address appearing on the list
of names and addresses of Holders provided for in Section 2.05, within
20 days after execution thereof.  Failure to deliver such notice
shall not affect the legality or validity of such supplemental
indenture.

     

    (e) The above
provisions of this Section shall similarly apply to successive Merger
Events.

     

    SECTION
9.12. Trustee’s
Disclaimer.  The Trustee and any Conversion Agent shall not at
any time be under any duty or responsibility to any Holder of Securities to
determine whether any facts exist which may require any adjustment of the Base
Conversion Price, Base Conversion Rate or Incremental Share Factor or to
determine the Base Conversion Price, Base Conversion Rate or Incremental Share
Factor or with respect to the nature or intent of any such adjustments when
made, or with respect to the method employed, as set forth herein or in any
supplemental indenture.  Neither the Trustee nor any Conversion Agent
shall be accountable with respect to the validity or value (of the kind or
amount) of any Common Stock or to monitor the price of the Common Stock, or of
any other securities or property, which may at any time be issued or delivered
upon the conversion of any Security; and it or they do not make any
representation with respect thereto.  Neither the Trustee nor any
Conversion Agent shall be responsible for any failure of the Company to make any
cash payment or to issue, transfer or deliver any shares of stock or share
certificates or other securities or property upon the surrender of any Security
for the purpose of conversion; and the Trustee and any Conversion Agent shall
not be responsible or liable for any failure of the Company to comply with any
of the covenants of the Company contained in this Article.

     

    SECTION
9.13. Voluntary
Reduction.  The Company from time to time may reduce the Base
Conversion Price by any amount for any period of time if such period is at least
20 Trading Days or such longer period as may be required by law and if the
reduction is irrevocable during such period; if the Board of Directors of the
Company determines, in good faith, that such decrease would be in the best
interests of the Company; provided that in no
event may the Base Conversion Price be less than the par value of a share of
Common Stock.  Any such determination by the Board of Directors of the
Company shall be conclusive.

     

    SECTION
9.14. Payment Upon
Conversion.  (a)  In the event that the Company
receives a Holder’s conversion notice, for each $1,000 aggregate principal
amount of Securities surrendered for conversion, the Company shall be required
to pay to such Holder the aggregate of the Daily Settlement Amounts for each of
the 20 consecutive Trading Days during the Cash Settlement Averaging Period (the
“Settlement Amount”).

     

    (b) The
following terms shall have the following meanings:

     

    (i) “Daily
Settlement Amount” for each of the 20 consecutive Trading Days during a Cash
Settlement Averaging Period shall consist of:

     

    (A) cash
equal to the lesser of $50 and the Daily Conversion Value; and

     

    (B) to the
extent the Daily Conversion Value exceeds $50, a number of shares equal to (A)
the difference between the Daily Conversion Value and $50, divided by (B) the
Closing Sale Price of Common Stock for such day.

     

    (ii) “Daily
Conversion Value” means, for each of the 20 consecutive Trading Days during a
Cash Settlement Averaging Period, one-twentieth (1/20) of the product of (A) the
Applicable Conversion Rate on such day and (B) the Closing Sale Price of the
Common Stock on such day.

     

    (iii) “Cash
Settlement Averaging Period” with respect to any Security being
converted  means the 20 consecutive Trading-Day period beginning on
and including the second Trading Day after a notice of conversion in respect of
such Security is delivered to the Conversion Agent, except that with respect to
any notice of conversion received after the date of issuance of a notice of
redemption pursuant to Section 3.03, the “Cash Settlement Averaging Period”
means the 20 consecutive Trading Days beginning on and including the day which
is the twenty-third scheduled Trading Day prior to the applicable redemption
date.

     

    (c) The
Company will deliver the Settlement Amount on the third Business Day immediately
following the last day of the Cash Settlement Averaging Period in respect of
converted Securities.

     

    (d) No
fractional shares of Common Stock or securities representing fractional shares
of Common Stock will be issued upon conversion.  Any fractional
interest in a share of Common Stock resulting from conversion will be paid in
cash based on the average of the Closing Sale Prices on each day during the
relevant Cash Settlement Averaging Period.  For purposes of the
foregoing, fractional shares arising from the calculation of the Daily
Settlement Amount for any day in the Cash Settlement Averaging Period shall be
aggregated with fractional shares for all other days in such period in
determining the Settlement Amount, and any whole shares resulting therefrom
shall be issued, and any remaining fractional shares shall be paid in
cash.

     

    (e) Except as
provided in Section 9.02(c), delivery of the Settlement Amount and cash in lieu
of fractional shares will be deemed to satisfy the Company’s obligation to pay
the principal amount of a converted Security and accrued but unpaid interest
thereon.   Any accrued interest payable on a converted Security
will be deemed paid in full rather than canceled, extinguished or forfeited. The
Company will not adjust the Base Conversion Price to account for accrued and
unpaid interest.

     

    ARTICLE
TEN

     

    AMENDMENTS,
SUPPLEMENTS AND WAIVERS

     

    SECTION
10.01. Without Consent of
Holders.

     

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

     

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

     

    (2) to comply
with Section 6.01 or 11.02;

     

    (3) to
reflect the addition or release of any Subsidiary Guarantor, as provided for by
this Indenture;

     

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

     

    (5) to make
any change that would provide any additional benefit or rights to the Holders or
that does not adversely affect the rights of any Holder in any material respect;
or

     

    (6) to make
provisions with respect to the conversion right of the Holders pursuant to the
requirements in this Indenture.

     

    Upon the
request of the Company and the Subsidiary Guarantors, accompanied by a Board
Resolution of the Company and of each Subsidiary Guarantor authorizing the
execution of any such supplemental indenture, and upon receipt by the Trustee of
the documents described in Section 10.06, the Trustee shall join with the
Company and the Subsidiary Guarantors in the execution of any supplemental
indenture authorized or permitted by the terms of this Indenture and make any
further appropriate agreements and stipulations that may be therein
contained.  After an amendment or supplement under this Section
becomes effective, the Company shall mail to the Holders of each Security
affected thereby a notice briefly describing the amendment or
supplement.  Any failure of the Company to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture.

     

    SECTION
10.02. With Consent of
Holders.  Except as provided below in this Section 10.02,
the Company, the Subsidiary Guarantors and the Trustee may amend or supplement
this Indenture or the Securities with the written consent (including consents
obtained in connection with a tender offer or exchange offer for Securities or a
solicitation of consents in respect of Securities, provided that in each
case such offer or solicitation is made to all Holders of then outstanding
Securities on equal terms) of the Holders of at least a majority of the
principal amount of the outstanding Securities.

     

    For
purposes of this Indenture, the consent of the Holder of a Global Security shall
be deemed to include any consent delivered by any member of, or participant in,
the Depository or such other depositary institution hereinafter appointed by the
Company by electronic means in accordance with the Automated Tender Offer
Procedures system or other customary procedures of, and pursuant to
authorization by, such entity.

     

    Upon the
request of the Company and the Subsidiary Guarantors, accompanied by a Board
Resolution of the Company and each Subsidiary Guarantor authorizing the
execution of any such supplemental indenture, and upon the filing with the
Trustee of evidence of the consent of the Holders as aforesaid, and upon receipt
by the Trustee of the Opinion of Counsel described in Section 10.06, the
Trustee shall join with the Company and the Subsidiary Guarantors in the
execution of such supplemental indenture.

     

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

     

    The
Holders of a majority of the principal amount of the outstanding Securities may
waive compliance in a particular instance by the Company or the Subsidiary
Guarantors with any provision of this Indenture or the Securities (including
waivers obtained in connection with a tender offer or exchange offer for
Securities or a solicitation of consents in respect of Securities, provided that in each
case such offer or solicitation is made to all Holders of the then outstanding
Securities on equal terms).  However, without the consent of each
Holder affected, an amendment, supplement or waiver under this Section may
not:

     

    (1) reduce
the percentage of principal amount of Securities whose Holders must consent to
an amendment, supplement or waiver of any provision of this Indenture or the
Securities;

     

    (2) reduce
the rate or change the time for payment of interest, including default interest,
on the Securities;

     

    (3) reduce
the principal amount of any Security or change the Maturity Date of the
Securities;

     

    (4) reduce
the redemption price, including premium, if any, payable upon the redemption of
any Security or change the time at which any Security may be
redeemed;

     

    (5) modify
the provisions of this Indenture requiring the Company to make an offer to
repurchase Securities upon a Fundamental Change pursuant to Section 3.09, or to
repurchase the Securities at the option of the Holders pursuant to Section
3.08;

     

    (6) adversely
affect the conversion rights provided in Article Nine;

     

    (7) waive a
Default or Event of Default in the payment of any amount or shares of Common
Stock (or other property) with respect to the Securities due in connection with
any Security;

     

    (8) make any
Security payable in money other than that stated in the Security;

     

    (9) impair
the right to institute suit for the enforcement of the payment of any amount or
shares of Common Stock (or other property) with respect to any Security pursuant
to Sections 7.07 or 7.08, except as limited by Section 7.06;
or

     

    (10) make any
change in Section 7.04 or Section 7.07 or in this sentence of this
Section 10.02.

     

    The right
of any Holder to participate in any consent required or sought pursuant to any
provision of this Indenture (and the obligation of the Company to obtain any
such consent otherwise required from such Holder) may be subject to the
requirement that such Holder shall have been the Holder of record of any
Securities with respect to which such consent is required or sought as of a date
identified by the Trustee in a notice furnished to Holders in accordance with
the terms of this Indenture.

     

    SECTION
10.03. Compliance with Trust
Indenture Act.  Every amendment to or supplement of this
Indenture or the Securities shall comply with the TIA as then in
effect.

     

    SECTION
10.04. Revocation and Effect of
Consents.  A consent to an amendment, supplement or waiver by a
Holder of a Security shall bind the Holder and every subsequent Holder of a
Security or portion of a Security that evidences the same debt as the consenting
Holder’s Security, even if notation of the consent is not made on any Security.
However, until an amendment, supplement or waiver becomes effective, any such
Holder or subsequent Holder may revoke the consent as to its Security or portion
of a Security.  For such revocation to be effective, the Trustee must
receive the notice of revocation before the date the amendment, supplement or
waiver becomes effective.

     

    The
Company may, but shall not be obligated to, fix a record date for the purpose of
determining the Holders entitled to consent to any amendment, supplement or
waiver.  If the Company elects to fix a record date for such purpose,
the record date shall be fixed at (i) the later of 30 days prior to the
first solicitation of such consent or the date of the most recent list of
Holders furnished to the Trustee prior to such solicitation pursuant to
Section 2.05, or (ii) such other date as the Company shall
designate.  If a record date is fixed, then notwithstanding the
provisions of the immediately preceding paragraph, those Persons who were
Holders at such record date (or their duly designated proxies), and only those
Persons, shall be entitled to consent to such amendment or waiver or to revoke
any consent previously given, whether or not such Persons continue to be Holders
after such record date.  No consent shall be valid or effective for
more than 90 days after such record date unless consent from the Holders of the
principal amount of Securities required hereunder for such amendment or waiver
to be effective also shall have been given and not revoked within such 90-day
period.

     

    After an
amendment, supplement or waiver becomes effective, it shall bind every Holder
unless it makes a change described in any of clauses (1) through (10) of
Section 10.02.  In that case the amendment, supplement or waiver
shall bind each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder’s Security.

     

    SECTION
10.05. Notation on or Exchange of
Securities.  If an amendment, supplement or waiver changes the
terms of a Security, the Trustee may require the Holder of the Security to
deliver it to the Trustee.  The Trustee may place an appropriate
notation on the Security about the changed terms and return it to the
Holder.  Alternatively, if the Company or the Trustee so determines,
the Company in exchange for the Security shall issue and the Trustee shall
authenticate a new Security that reflects the changed terms.

     

    SECTION
10.06. Trustee
Protected.  The Trustee shall sign any amendment or supplement
or waiver authorized pursuant to this Article if the amendment or supplement or
waiver does not adversely affect the rights of the Trustee.  If it
does adversely affect the rights of the Trustee, the Trustee may but need not
sign it.  In signing such amendment or supplement or waiver the
Trustee shall be provided with, and (subject to Article Eight) shall be fully
protected in relying upon, an Officers’ Certificate and Opinion of Counsel
stating that such amendment or supplement or waiver is authorized or permitted
by and complies with this Indenture and all conditions precedent to the
execution of such amendment, supplement or waiver have been met.  The
Company may not sign an amendment or supplement until the Boards of Directors of
the Company and the Subsidiary Guarantors approve it.

     

    ARTICLE
ELEVEN

     

    GUARANTEES

     

    SECTION
11.01. Unconditional
Guarantee.  Each Subsidiary Guarantor hereby, jointly and
severally, fully and unconditionally guarantees, as principal obligor and not
only as surety (such guarantee to be referred to herein as the “Guarantee”), to
each Holder and to the Trustee the due and punctual payment of the principal of,
premium, if any, and interest on the Securities and all other amounts due and
payable under this Indenture and the Securities by the Company whether at
maturity, by acceleration, redemption, repurchase or otherwise, including,
without limitation, interest on the overdue principal of, premium, if any, and
interest on the Securities, to the extent lawful, all in accordance with the
terms hereof and thereof; subject, however, to the limitations set forth in
Section 11.05.

     

    Failing
payment when due of any amount so guaranteed for whatever reason, the Subsidiary
Guarantors will be jointly and severally obligated to pay the same
immediately.  Each Subsidiary Guarantor hereby agrees that its
obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of the Securities or this Indenture, the absence of
any action to enforce the same, any waiver or consent by any Holder of the
Securities with respect to any provisions hereof or thereof, the recovery of any
judgment against the Company, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor.  Each Subsidiary Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenants that this Guarantee will not be discharged except by complete
performance of the obligations contained in the Securities, this Indenture and
in this Guarantee.  If any Holder or the Trustee is required by any
court or otherwise to return to the Company, any Subsidiary Guarantor, or any
custodian, trustee, liquidator or other similar official acting in relation to
the Company or any Subsidiary Guarantor, any amount paid by the Company or any
Subsidiary Guarantor to the Trustee or such Holder, this Guarantee, to the
extent theretofore discharged, shall be reinstated in full force and effect.
Each Subsidiary Guarantor agrees it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed
hereby.  Each Subsidiary Guarantor further agrees that, as between
each Subsidiary Guarantor, on the one hand, and the Holders and the Trustee, on
the other hand, (x) the maturity of the obligations guaranteed hereby may
be accelerated as provided in Article Seven for the purposes of this Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in
the event of any acceleration of such obligations as provided in Article Seven,
such obligations (whether or not due and payable) shall forthwith become due and
payable by each Subsidiary Guarantor for the purpose of this
Guarantee.

     

    SECTION
11.02. Subsidiary Guarantors May
Consolidate, etc., on Certain Terms.  (a)  Subject to
paragraph (b) of this Section 11.02, no Subsidiary Guarantor may
consolidate or merge with or into (whether or not such Subsidiary Guarantor is
the surviving Person) another Person unless (i) the Person formed by or
surviving any such consolidation or merger (if other than such Subsidiary
Guarantor) assumes all the obligations of such Subsidiary Guarantor under this
Indenture and the Securities pursuant to a supplemental indenture, in a form
reasonably satisfactory to the Trustee and (ii) immediately after such
transaction, no Default or Event of Default exists.  In connection
with any consolidation or merger contemplated by this Section 11.02, the
Company shall deliver to the Trustee prior to the consummation of the proposed
transaction an Officers’ Certificate to the foregoing effect and an Opinion of
Counsel stating that the proposed transaction and such supplemental indenture
comply with this Indenture.  This Section 11.02(a) will not
prohibit a merger between Subsidiary Guarantors or a merger between the Company
and a Subsidiary Guarantor.

     

    (b) In the
event of a sale or other disposition of all or substantially all of the assets
of any Subsidiary Guarantor or a sale or other disposition of all of the Capital
Stock of such Subsidiary Guarantor, in any case by way of merger, consolidation
or otherwise, then such Subsidiary Guarantor (in the event of a sale or other
disposition, by way of such a merger, consolidation or otherwise, of all of the
Capital Stock of such Subsidiary Guarantor) or the Person acquiring the assets
(in the event of a sale or other disposition, by way of a merger, consolidation
or otherwise, of all or substantially all of the assets of such Subsidiary
Guarantor) will be released and relieved of any obligations under its
Guarantee.

     

    SECTION
11.03. Addition of Subsidiary
Guarantors.  (a)  The Company agrees to cause each
Subsidiary that shall become a Subsidiary after the Issue Date and that
guarantees any other Indebtedness of the Company or a Subsidiary Guarantor in
excess of a De Minimis Guaranteed Amount to execute and deliver a supplemental
indenture pursuant to which such Subsidiary shall guarantee the payment of the
Securities pursuant to the terms hereof within 180 days after the later of
(i) the date that Subsidiary becomes a Subsidiary and (ii) the date
that Subsidiary guarantees such other Indebtedness; provided that no
guarantee shall be required if the Subsidiary merges into the Company or an
existing Subsidiary Guarantor and the surviving entity remains a Subsidiary
Guarantor.

     

    (b) Any
Person that was not a Subsidiary Guarantor on the Issue Date may become a
Subsidiary Guarantor by executing and delivering to the Trustee (i) a
supplemental indenture in form and substance satisfactory to the Trustee, which
subjects such Person to the provisions (including the representations and
warranties) of this Indenture as a Subsidiary Guarantor and (ii) an Opinion
of Counsel and Officers’ Certificate to the effect that such supplemental
indenture has been duly authorized and executed by such Person and constitutes
the legal, valid and binding obligation of such Person (subject to such
customary exceptions concerning creditors’ rights and equitable principles as
may be acceptable to the Trustee in its discretion and provided that no opinion
need be rendered concerning the enforceability of the Guarantee).

     

    SECTION
11.04. Release of a Subsidiary
Guarantor.  Upon (i) the sale or disposition of a
Subsidiary Guarantor (or all or substantially all of its assets), (ii) the
cessation by a Subsidiary Guarantor to guarantee any other Indebtedness of the
Company or any other Subsidiary Guarantor other than a De Minimis Guaranteed
Amount or (iii) the discharge of this Indenture pursuant to Article
Thirteen, in each case which is otherwise in compliance with the terms of this
Indenture, including but not limited to the provisions of Section 11.02,
such Subsidiary Guarantor shall be deemed released from all of its Guarantee and
related obligations in this Indenture without any further action by the Trustee,
the Company or such Subsidiary Guarantor.  The Trustee shall deliver
an appropriate instrument evidencing such release upon receipt of a request by
the Company accompanied by an Officers’ Certificate and, in the case of the
release of a Subsidiary Guarantor pursuant to clause (i) of the first sentence
of this Section 11.04, an Opinion of Counsel certifying that such sale or other
disposition was made by the Company in accordance with the provisions of this
Indenture.  Any Subsidiary Guarantor not so released remains liable
for the full amount of principal of and interest on the Securities as provided
in this Article Eleven.

     

    SECTION
11.05. Limitation of Subsidiary
Guarantor’s Liability.  Each Subsidiary Guarantor, and by its
acceptance hereof each Holder, hereby confirms that it is the intention of all
such parties that the guarantee by such Subsidiary Guarantor pursuant to its
Guarantee not constitute a fraudulent transfer or conveyance for purposes of any
federal, state or foreign law.  To effectuate the foregoing intention,
the Holders and each Subsidiary Guarantor hereby irrevocably agree that the
obligations of each Subsidiary Guarantor under the Guarantee shall be limited to
the maximum amount as will, after giving effect to all other contingent and
fixed liabilities of such Subsidiary Guarantor and after giving effect to any
collections from or payments made by or on behalf of any other Subsidiary
Guarantor in respect of the obligations of such other Subsidiary Guarantor under
its Guarantee or pursuant to Section 11.06, result in the obligations of
such Subsidiary Guarantor under the Guarantee not constituting a fraudulent
conveyance or fraudulent transfer under federal, state or foreign
law.  This Section 11.05 is for the benefit of the creditors of
each Subsidiary Guarantor, and, for purposes of applicable fraudulent transfer
and fraudulent conveyance law, any Indebtedness of a Subsidiary Guarantor
pursuant to Credit Facilities shall be deemed to have been incurred prior to the
incurrence by such Subsidiary Guarantor of its liability under the
Guarantee.

     

    SECTION
11.06. Contribution.  In
order to provide for just and equitable contribution among the Subsidiary
Guarantors, the Subsidiary Guarantors agree, inter se, that in the event any
payment or distribution is made by any Subsidiary Guarantor (a “Funding
Guarantor”) under the Guarantee, such Funding Guarantor shall be entitled to a
contribution from each other Subsidiary Guarantor in a pro rata amount based on
the Adjusted Net Assets of each Subsidiary Guarantor (including the Funding
Guarantor) for all payments, damages and expenses incurred by the Funding
Guarantor in discharging the Company’s obligations with respect to the
Securities or any other Subsidiary Guarantor’s obligations with respect to the
Guarantee.

     

    SECTION
11.07. [Intentionally
Omitted.]

     

    SECTION
11.08. Severability.  In
case any provision of this Guarantee shall be invalid, illegal or unenforceable,
that portion of such provision that is not invalid, illegal or unenforceable
shall remain in effect, and the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired
thereby.

     

    ARTICLE
TWELVE

     

    MISCELLANEOUS

     

    SECTION
12.01. Trust Indenture Act
Controls.  Whether prior to or following the qualification of
this Indenture under the TIA, if any provision of this Indenture limits,
qualifies, or conflicts with the duties imposed by operation of TIA
Section 318(c) upon an indenture qualified under the TIA, the imposed
duties shall control under this Indenture.

     

    SECTION
12.02. Notices.  Any
notice or communication shall be sufficiently given if in writing and delivered
in person or mailed by certified or registered mail (return receipt requested),
facsimile, telecopier or overnight air courier guaranteeing next day delivery,
addressed as follows:

     

    If to the
Company or any Subsidiary Guarantor:

     

    Chesapeake
Energy Corporation

    6100
North Western Avenue

    Oklahoma
City, Oklahoma 73118

    

    Attention:  Treasurer

    Fax:  (405)
879-9572

     

    If to the
Trustee:

     

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

                    2 N. LaSalle
Street

                    Suite
1020

                    Chicago, IL
60602

     

    Attention:  Corporate
Trust Administration

    Fax:  (312)
827-8542

     

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

     

    All
notices and communications shall be deemed to have been duly given: at the time
delivered by hand, if personally delivered; five Business Days after being
deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if
faxed or telecopied; and the next Business Day after timely delivery to the
courier, if sent by overnight air courier guaranteeing next day
delivery.

     

    Any
notice or communication mailed to a Holder shall be mailed by first-class mail
to the address for such Holder appearing on the registration books of the
Registrar and shall be sufficiently given to such Holder if so mailed within the
time prescribed.  Failure to mail a notice or communication to a
Holder or any defect in it shall not affect its sufficiency with respect to
other Holders.

     

    If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.  If the Company or
any Subsidiary Guarantor mails notice or communications to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.

     

    Notwithstanding
any other provision of this Indenture or any Security, where this Indenture or
any Security provides for notice of any event (including any notice of
redemption) to a Holder of a Global Security (whether by mail or otherwise),
such notice shall be sufficiently given if given to the Depositary for such
Security (or its designee), pursuant to the customary procedures of such
Depositary, not later than the latest date (if any), and not earlier than the
earliest date (if any), prescribed for the giving of such notice.

     

    SECTION
12.03. Communication by Holders
with Other Holders.  Holders may communicate pursuant to TIA
Section 312(b) with other Holders with respect to their rights under this
Indenture or the Securities.  The Company, the Subsidiary Guarantors,
the Trustee, the Registrar and anyone else shall have the protection of TIA
Section 312(c).

     

    SECTION
12.04. Certificate and Opinion as
to Conditions Precedent.  Upon any request or application by
the Company or any Subsidiary Guarantor to the Trustee to take any action under
this Indenture, the Company or such Subsidiary Guarantor, as the case may be,
shall furnish to the Trustee:

     

    (1) an
Officers’ Certificate (which shall include the statements set forth in
Section 12.05) stating that, in the opinion of the signers, the conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with; and

     

    (2) an
Opinion of Counsel stating that, in the opinion of such counsel, such conditions
precedent have been complied with.

     

    SECTION
12.05. Statements Required in
Certificate or Opinion.  Each certificate or opinion with
respect to compliance with a condition or covenant provided for in this
Indenture shall include:

     

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

     

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

     

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

     

    (4) a
statement as to whether or not, in the opinion of each such person, such
covenant or condition has been complied with.

     

    SECTION
12.06. Rules by Trustee and
Agents.  The Trustee may make reasonable rules for actions
taken by, or meetings or consents of, Holders.  The Registrar or
Paying Agent may make reasonable rules for its functions.

     

    SECTION
12.07. Legal
Holidays.  A “Legal Holiday” is a Saturday, a Sunday, or a day
on which banks and trust companies in the City of New York are not required by
law or executive order to be open.  If a payment date is a Legal
Holiday at a place of payment, payment may be made at the place on the next
succeeding day that is not a Legal Holiday, without additional
interest.

     

    SECTION
12.08. Governing
Law.  THIS INDENTURE AND THE SECURITIES AND THE GUARANTEES
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 SECURITIES.

     

    SECTION
12.09. No Adverse Interpretation of
Other Agreements.  This Indenture may not be used to interpret
another indenture, loan or debt agreement of the Company, any Subsidiary
Guarantor or any other Subsidiary.  Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.

     

    SECTION
12.10. No Recourse Against
Others.  All liability described in Paragraph 18 of the
Securities of any director, officer, employee or stockholder, as such, of the
Company, the Subsidiary Guarantors or the Trustee is waived and
released.

     

    SECTION
12.11. Successors.  All
agreements of the Company and the Subsidiary Guarantors in this Indenture, the
Securities and the Guarantees shall bind their respective
successors.  All agreements of the Trustee in this Indenture shall
bind its successor.

     

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

     

    SECTION
12.13. Severability.  In
case any provision in this Indenture or in the Securities shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby, and a
Holder shall have no claim therefor against any party hereto.

     

    SECTION
12.14. Force
Majeure.  In no event shall the Trustee be responsible or
liable for any failure or delay in the performance of its obligations hereunder
arising out of or caused by, directly or indirectly, forces beyond its control,
including, without limitation, strikes, work stoppages, accidents, acts of war
or terrorism, civil or military disturbances, nuclear or natural catastrophes or
acts of God, and interruptions, loss or malfunctions of utilities,
communications or computer (software and hardware) services; it being understood
that the Trustee shall use reasonable efforts which are consistent with accepted
practices in the banking industry to resume performance as soon as practicable
under the circumstances.

     

    ARTICLE
THIRTEEN

     

    DISCHARGE
OF INDENTURE

     

    SECTION
13.01. Discharge of Liability on
Securities.  When (a) the Company delivers to the Trustee all
outstanding Securities (other than Securities replaced pursuant to Section 2.07)
for cancellation or (b) all outstanding Securities have become due and payable
and the Company deposits with the Trustee, the Paying Agent or the Conversion
Agent, as applicable, cash and shares of Common Stock or other property (as
applicable under the terms of this Indenture) sufficient to pay all amounts due
and owing on all outstanding Securities (other than Securities replaced pursuant
to Section 2.07), and if in either case the Company pays all other sums payable
hereunder by the Company, then this Indenture shall, subject to Section 8.07,
cease to be of further effect.  The Trustee shall join in the
execution of a document prepared by the Company acknowledging satisfaction and
discharge of this Indenture on demand at the cost and expense of the Company and
accompanied by an Officers’ Certificate and Opinion of Counsel.

     

    SECTION
13.02. Repayment to the
Company.  The Trustee, the Paying Agent and the Conversion
Agent shall return to the Company upon written request any money or shares of
Common Stock or other property held by them for the payment of any amount with
respect to the Securities that remain unclaimed for two years, subject to
applicable unclaimed property law.  After return to the Company,
Holders entitled to the money or shares of Common Stock or other property must
look to the Company for payment as general creditors unless an applicable
abandoned property law designates another person, and the Trustee, the Paying
Agent and the Conversion Agent shall have no further liability to the Holders
with respect to such money or shares of Common Stock or other property for that
period commencing after the return thereof.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SIGNATURES

     

    IN
WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
executed as of the date first written above.

     

    
      
        	
                CHESAPEAKE
      ENERGY CORPORATION

              	 
	 	 	 
	
                By:
      

              	/s/ Jennifer
      M. Grigsby            	 
	 	
                Name:
      Jennifer M. Grigsby

              	 
	 	
                Title:
      Senior Vice President, Treasurer

                and
      Corporate Secretary

              	 
	 	 	 

      

    

     

    

    
      	
              SUBSIDIARY
      GUARANTORS:

               

              ARKANSAS
      MIDSTREAM GAS SERVICES CORP.,

              CHESAPEAKE
      ENERGY LOUISIANA CORPORATION,

              CHESAPEAKE
      ENERGY MARKETING, INC.,

              CHESAPEAKE
      OPERATING, INC.,

              DIAMOND
      Y ENTERPRISE, INCORPORATED,

              GENE
      D. YOST & SON, INC.,

              BLUESTEM
      GAS SERVICES, L.L.C.,

              CARMEN
      ACQUISITION, L.L.C.,

              CHESAPEAKE
      APPALACHIA, L.L.C.,

              CHESAPEAKE
      LAND COMPANY, L.L.C.,

              CHESAPEAKE
      EXPLORATION, L.L.C.,

              CHESAPEAKE
      ROYALTY, L.L.C.,

              CHK
      HOLDINGS, L.L.C.,

              GOTHIC
      PRODUCTION, L.L.C.,

              HODGES
      TRUCKING COMPANY, L.L.C.,

              MC
      MINERAL COMPANY, L.L.C.,

              MIDCON
      COMPRESSION, L.L.C.,

              TEXAS
      MIDSTREAM GAS SERVICES, L.L.C.,

              NOMAC
      DRILLING, L.L.C.,

              By:  Chesapeake
      Operating, Inc., its Sole Manager

              HAWG
      HAULING & DISPOSAL, LLC,

              By:  Diamond Y
      Enterprise, Incorporated, its Sole Member

              CHESAPEAKE
      LOUISIANA, L.P.,

              By:  Chesapeake
      Operating, Inc., its General Partner

               

            	 
      
	
                   By:

            	/s/
      Jennifer M. Grigsby            
	 
      	
              Name: Jennifer
      M. Grigsby

            	 
      
	 
      	
              Title
      : Senior Vice President, Treasurer

              and Corporate
      Secretary

            	 
      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    

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

            
	 
      
	
              By:

            	 /s/ Linda Garcia                 
	 
      	
              Name: 
      Linda Garcia

            
	 
      	
              Title:    Authorized
      Signatory

            

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    APPENDIX

     

    PROVISIONS RELATING TO THE
SECURITIES

     

    1.           Definitions

     

    1.1           Definitions

     

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

     

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

     

    “Underwriters”
means (1) with respect to the Securities issued on the Issue Date, Banc of
America Securities LLC, Barclays Capital Inc., Credit Suisse Securities (USA)
LLC, Goldman, Sachs & Co., UBS Securities LLC, Calyon Securities (USA) Inc.,
Deutsche Bank Securities Inc., J.P. Morgan Securities Inc., Lehman Brothers
Inc., Morgan Stanley & Co. Incorporated, Greenwich Capital Markets, Inc.,
Wachovia Capital Markets, LLC, Wells Fargo Securities, LLC, BBVA Securities,
Inc., BMO Capital Markets Corp., BNP Paribas Securities Corp., BOSC, Inc.,
Comerica Securities, Inc., Fortis Securities LLC, Natixis Bleichroeder Inc.,
Scotia Capital (USA) Inc., SunTrust Robinson Humphrey, Inc., TD Securities (USA)
LLC, UMB Financial Services, Inc. and Wedbush Morgan Securities Inc. and (2)
with respect to each issuance of Additional Securities, the Persons purchasing
such Additional Securities under the related Underwriting
Agreement.

     

    “Securities”
means (1) $1,380,000,000 aggregate principal amount of 2.25% Contingent
Convertible Senior Notes due 2038 issued on the Issue Date and
(2) Additional Securities, if any, issued in one or more
transactions.

     

    “Underwriting
Agreement” means (1) with respect to the Securities issued on the Issue
Date, the Underwriting Agreement dated May 20, 2008, among the Company, the
Subsidiary Guarantors and the Underwriters and (2) with respect to each
issuance of Additional Securities, the underwriting agreement among the Company,
the Subsidiary Guarantors and the Persons purchasing such Additional
Securities.

     

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

     

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

     

    1.2           Other
Definitions.

     

    

    
      	
              Term

            	
              Defined in

              Section:

            
	
              “Agent
      Members”                                                                                                           

            	
              2.1(b)

            
	
              “Global
      Security”                                                                                                           

            	
              2.1(a)

            

    

    

    2.           The
Securities.

     

    2.1           (a)  Form and
Dating.  The Securities shall be issued initially in the form
of one or more permanent global Securities (each, a “Global Security”) in
definitive, fully registered form without interest coupons with the global
securities legend set forth in Exhibit 1 hereto, which shall be deposited
on behalf of the purchasers of the Securities represented thereby with the
Trustee, at its Corporate Trust Office, as Securities Custodian, and registered
in the name of the Depository or a nominee of the Depository, duly executed by
the Company and authenticated by the Trustee as hereinafter
provided.  The aggregate principal amount of the Global Securities may
from time to time be increased or decreased by adjustments made on the records
of the Trustee and the Depository or its nominee as hereinafter
provided.

     

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

     

    The
Company shall execute and the Trustee shall, in accordance with this
Section 2.1(b), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depository for
such Global Security or Global Securities or the nominee of such Depository and
(b) shall be delivered by the Trustee to such Depository or pursuant to
such Depository’s instructions or held by the Trustee as Securities
Custodian.

     

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

     

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

     

    2.2           Authentication.  The
Trustee shall authenticate and deliver:  (1) on the Issue Date,
an aggregate principal amount of $1,380,000,000 of 2.25% Contingent Convertible
Senior Notes due 2038 and (2) from time to time after the Issue Date, any
Additional Securities for an original issue in an aggregate principal amount
specified in the written order of the Company pursuant to Section 2.02 of
the Indenture, in each case upon a written order of the Company signed by two
Officers or by an Officer and either the Secretary, an Assistant Treasurer or an
Assistant Secretary of the Company.  Such order shall specify the
amount of the Securities to be authenticated and the date on which the original
issue of Securities is to be authenticated.

     

    2.3           Transfer and
Exchange.

     

    (a)  Transfer and Exchange of
Global Securities.

     

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

     

    (ii)  Notwithstanding
any other provisions of this Appendix (other than the provisions set forth in
Section 2.4), a Global Security may not be transferred as a whole except by
the Depository to a nominee of the Depository or by a nominee of the Depository
to the Depository or another nominee of the Depository or by the Depository or
any such nominee to a successor Depository or a nominee of such successor
Depository.

     

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

     

    (c)  Obligations with Respect to
Transfers and Exchanges of Securities.

     

    (i)  To
permit registrations of transfers and exchanges, the Company shall execute and
the Trustee shall authenticate certificated Securities and Global Securities at
the Registrar’s or co-registrar’s request.

     

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

     

    (iii)  The
Registrar or co-registrar shall not be required to register the transfer of or
exchange of any Security for a period beginning 15 Business Days before the
mailing of a notice of an offer to repurchase or redeem Securities or 15
Business Days before an interest payment date.

     

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

     

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

     

    (d)  No Obligation of the
Trustee.

     

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

     

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

     

    2.4           Certificated
Securities.

     

    (a)  A
Global Security deposited with the Depository or with the Trustee as Securities
Custodian pursuant to Section 2.1 shall be transferred to the beneficial
owners thereof in the form of certificated Securities in an aggregate principal
amount equal to the principal amount of such Global Security, in exchange for
such Global Security, only if (i) the Depository notifies the Company that
it is unwilling or unable to continue as Depository for such Global Security or
if at any time such Depository ceases to be a “clearing agency” registered under
the Exchange Act and a successor Depository is not appointed by the Company
within 90 days of such notice or (ii) at any time the Company, in its
sole discretion, notifies the Trustee in writing that it elects to cause the
issuance of certificated Securities under this Indenture.

     

    (b)  Any
Global Security that is transferable to the beneficial owners thereof pursuant
to this Section shall be surrendered by the Depository to the Trustee located at
its Corporate Trust Office in the Borough of Manhattan, The City of New York, to
be so transferred, in whole or from time to time in part, without charge, and
the Trustee shall authenticate and deliver, upon such transfer of each portion
of such Global Security, an equal aggregate principal amount of certificated
Securities of authorized denominations.  Any portion of a Global
Security transferred pursuant to this Section shall be executed, authenticated
and delivered only in denominations of $1,000 principal amount and any integral
multiple thereof and registered in such names as the Depository shall
direct.

     

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

     

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

     

    
      
        
          A-

          

        

         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
1

     

    to

     

    APPENDIX

     

    [FACE OF
SECURITY]

     

    [Global
Securities
Legend]

     

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

     

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

     

    FOR
PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED, THIS SECURITY IS A CONTINGENT PAYMENT DEBT INSTRUMENT AND WILL ACCRUE
ORIGINAL ISSUE DISCOUNT AT THE ISSUER’S “COMPARABLE YIELD” FOR U.S. FEDERAL
INCOME TAX PURPOSES.  PURSUANT TO SECTION 5.09 OF THE INDENTURE, THE
COMPANY AGREES, AND BY ACCEPTANCE OF A BENEFICIAL OWNERSHIP INTEREST IN THE
SECURITY, EACH BENEFICIAL HOLDER OF THE SECURITIES WILL BE DEEMED TO HAVE
AGREED, FOR U.S. FEDERAL INCOME TAX PURPOSES, (I) TO TREAT THE SECURITIES AS
INDEBTEDNESS THAT IS SUBJECT TO SECTION 1.1275-4 OF THE UNITED STATES TREASURY
REGULATIONS (THE “CONTINGENT PAYMENT REGULATIONS”), AND, FOR PURPOSES OF THE
CONTINGENT PAYMENT REGULATIONS, TO TREAT THE FAIR MARKET VALUE OF COMMON STOCK,
IF ANY, RECEIVED BY A BENEFICIAL HOLDER UPON ANY CONVERSION OF THE SECURITIES AS
A CONTINGENT PAYMENT AND (II) TO BE BOUND BY THE ISSUER’S DETERMINATION OF THE
“COMPARABLE YIELD” AND “PROJECTED PAYMENT SCHEDULE,” WITHIN THE MEANING OF THE
CONTINGENT PAYMENT REGULATIONS, WITH RESPECT TO THE SECURITIES.  THE
ISSUER’S DETERMINATION OF THE COMPARABLE YIELD IS 8.00% PER ANNUM, COMPOUNDED
SEMIANNUALLY.  THE PROJECTED PAYMENT SCHEDULE, DETERMINED BY THE
ISSUER, IS ATTACHED TO THE INDENTURE AS SCHEDULE B.  YOU MAY OBTAIN
THE ISSUE DATE, COMPARABLE YIELD AND PROJECTED PAYMENT SCHEDULE FOR THIS
SECURITY BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO CHESAPEAKE
ENERGY CORPORATION, INVESTOR RELATIONS, 6100 NORTH WESTERN AVENUE, OKLAHOMA
CITY, OKLAHOMA 73118.

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Certificate
No.                                                                                         CUSIP
NO.

     

    $ ISIN
NO.

     

    2.25%
Contingent Convertible Senior Note due 2038

     

    Chesapeake
Energy Corporation, an Oklahoma corporation, promises to pay to CEDE &
CO., or registered assigns, the principal sum of  __________________
Dollars on December 15, 2038.

     

    Interest
Payment Dates:  June 15 and December 15 (commencing December 15,
20081)

     

    Record
Dates:  June 1 and December 1

     

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

     

    Dated:  ________________

    
      	 	
              CHESAPEAKE
      ENERGY CORPORATION,

            
	 	 
      
	 	
              By

            	 
      
	 	 
      	
              Name:

            
	 	 
      	
              Title:

            

    

    

    
      	
               

            	
              By 

            	 
      
	 
      	 	
              Name:

            
	 
      	 	
              Title:

            

    

     

    TRUSTEE’S
CERTIFICATE OF

     

     

    AUTHENTICATION

     

    
      	
              THE
      BANK OF NEW YORK TRUST COMPANY, N.A., AS TRUSTEE, CERTIFIES THAT THIS IS
      ONE OF THE SECURITIES REFERRED TO IN THE INDENTURE.

            
	 
      	 
	
              by

            	 
      	 
	 
      	
              Authorized
      Signatory

            	 

    

    

     

    

      

    

     

      1 Or such
later date as is appropriate in the case of Additional Securities.

       

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    [REVERSE
SIDE OF SECURITY]

     

    2.25%
Contingent Convertible Senior Note due 2038

     

    1.           Interest

     

    Chesapeake
Energy Corporation, an Oklahoma corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called the “Company”), promises to pay interest on the principal amount of this
Security at the rate of 2.25% per annum.  Interest on the Securities
will accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from May 27, 2008.2  Interest will
be computed on the basis of a 360-day year of twelve 30-day
months.  Contingent interest, if any, will accrue for any six-month
interest period under the circumstances set forth below, commencing with the
six-month interest period ending June 14, 2019, and shall be payable to Holders
of this Security on the applicable interest payment date to the person is whose
name this Security is registered on the corresponding record
date.  The Company will pay interest semiannually on June 15 and
December 15 of each year, commencing December 15, 2008. 3

     

     Subject to the terms and
conditions of the Indenture, beginning with the six-month interest period ending
June 14, 2019, the Company will pay Contingent Interest to the Holders of
Securities for any six-month interest period from and including an interest
payment date to but excluding the next interest payment date, if the average
Trading Price of the Securities for each of the five Trading Days ending on the
third day immediately preceding the first day of the applicable six-month
interest period equals or exceeds 120% of the principal amount of the
Securities, which shall be determined as set forth in the Indenture. For any
six-month interest period when Contingent Interest is payable, the Contingent
Interest payable on each $1,000 principal amount of Securities shall equal 0.50%
per annum of the average Trading Price for $1,000 principal amount of Securities
during the five Trading-Day measuring period ending on the third day immediately
preceding the first day of the applicable six-month interest period used to
determine whether Contingent Interest must be paid.  By the first
Business Day of a six-month interest period for which Contingent Interest will
be paid, the Company will disseminate a press release through Dow Jones &
Company, Inc. or Bloomberg Business News or a similarly broad public medium that
is customary for such press releases stating that Contingent Interest will be
paid on the Securities and identifying such six-month interest period as the
six-month interest period for which such Contingent Interest will be
paid.  All references in this Security to interest shall include any
applicable additional interest and Contingent Interest unless otherwise
stated.

     

    2.           Method of
Payment

     

    The
Company will pay interest on the Securities (except defaulted interest) to the
Persons who are registered Holders of Securities at the close of business on the
June 1 or December 1 next preceding the interest payment date even if Securities
are canceled after the record date and on or before the interest payment
date.  Holders must surrender Securities to a Paying Agent to collect
principal payments.  The Company will pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts.  Payments in respect of the
Securities represented by a Global Security (including principal, premium and
interest) will be made by wire transfer of immediately available funds to the
accounts specified by The Depository Trust Company.  The Company will
make all payments in respect of a certificated Security (including principal,
premium, if any, and interest) by mailing a check to the registered address of
each Holder thereof; provided, however, that
payments on a certificated Security will be made by wire transfer to a U.S.
dollar account maintained by the payee with a bank in the United States if such
Holder elects payment by wire transfer by giving written notice to the Trustee
or the Paying Agent to such effect designating such account no later than
30 days immediately preceding the relevant due date for payment (or such
other date as the Trustee may accept in its discretion).

     

    3.           Registrar, Paying Agent and
Conversion Agent

     

    Initially,
The Bank of New York Trust Company, N.A., a national banking association
(the “Trustee”), will act as Registrar, Paying Agent and Conversion
Agent.  The Company may appoint and change any Registrar, Paying Agent
and Conversion Agent or co-registrar without notice.  The Company or
any of its domestically incorporated wholly owned Subsidiaries may act as
Registrar, Paying Agent and Conversion Agent or co-registrar.

     

    4.           Indenture

     

    The
Company issued the Securities under an Indenture dated as of May 27, 2008
(“Indenture”), among the Company, the Subsidiary Guarantors and the
Trustee.  The terms of the Securities include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C.
§§ 77aaa-77bbbb) as in effect on the date of the Indenture (the
“Act”).  Terms defined in the Indenture and not defined herein have
the meanings ascribed thereto in the Indenture.  The Securities are
subject to all such terms, and Holders are referred to the Indenture and the Act
for a statement of those terms.

     

    The
Company shall be entitled to issue Additional Securities pursuant to
Section 2.13 of the Indenture.  The Securities issued on the
Issue Date and any Additional Securities will be treated as a single class for
all purposes under the Indenture.

     

    5.           Optional
Redemption

     

    No
sinking fund is provided for the Securities.  Beginning on December
15, 2018, and during the periods thereafter to maturity, the Securities are
redeemable, in whole at any time, or in part from time to time, for cash at a
price equal to 100% of the principal amount of the Securities plus accrued and
unpaid interest up to but not including the date of redemption; provided that if the
redemption date is between the close of business on a record date and the
opening of business on the related interest payment date, interest will be
payable to the Holders in whose names the Securities are registered at the close
of business on the relevant record date.  Any redemption pursuant to
this paragraph 5 shall be made, to the extent applicable, pursuant to the
provisions of Sections 3.01 through 3.06 of the Indenture.

     

    6.           Notice of
Redemption

     

    Notice of
redemption will be mailed to the Holder’s registered address at least 30 days
but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed. If less than all Securities are to be redeemed, the
Trustee shall select pro rata, by lot or, if the Securities are listed on any
securities exchange, by any other method that the Trustee considers fair and
appropriate and that complies with the requirements of such exchange, the
Securities to be redeemed in multiples of $1,000; provided, however, that no
Securities with a principal amount of $1,000 or less will be redeemed in
part.  Securities in denominations larger than $1,000 may be redeemed
in part.  On and after the redemption date, interest ceases to accrue
on Securities or portions of them called for redemption (unless the Company
shall default in the payment of the redemption price or accrued
interest).

     

    
      	
              7.

            	
              Repurchase at Option
      of the Holder on Specified Dates; Repurchase at Option of the Holder Upon
      a Fundamental Change

            

    

     

    Subject
to the terms and conditions of the Indenture, the Company shall become obligated
to repurchase, at the option of the Holder, on December 15, 2018, 2023, 2028 and
2033, all or a portion of the Securities held by such Holder, in any integral
multiple of $1,000, for cash at a price per Security equal to 100% of the
aggregate principal amount of the Security, together with accrued but unpaid
interest thereon, up to but not including the Repurchase Date upon delivery of a
Repurchase Notice containing the information set forth in the Indenture,
together with the Securities subject thereto, at any time from the opening of
business on the date that is 30 Business Days prior to such Repurchase Date
until the close of business on the third Business Day prior to the Repurchase
Date, and upon delivery of the Securities to the Paying Agent by the Holder as
set forth in the Indenture; provided that accrued
but unpaid interest will be payable to the Holders in whose names the Securities
are registered at the close of business on the relevant record
date.

     

    At the
option of the Holder and subject to the terms and conditions of the Indenture,
the Company shall become obligated to repurchase the Securities held by such
Holder after the occurrence of a Fundamental Change for cash at a price equal to
100% of the principal amount thereof plus accrued but unpaid interest thereon,
up to but not including the Fundamental Change Repurchase Date; provided that if the
Fundamental Change Repurchase Date is between the close of business on a record
date and the opening of business on the related interest payment date, accrued
but unpaid interest will be payable to the Holders in whose names the Securities
are registered at the close of business on the relevant record
date.  Holders have the right to withdraw any Repurchase Notice or
Fundamental Change Repurchase Notice, as the case may be, by delivering to the
Paying Agent a written notice of withdrawal in accordance with the provisions of
the Indenture.

     

    If cash
sufficient to pay the Repurchase Price or Fundamental Change Repurchase Price,
as the case may be, and accrued but unpaid interest on all Securities or
portions thereof to be repurchased as of the Repurchase Date or the Fundamental
Change Repurchase Date, as the case may be, is held by the Paying Agent by
11:00 a.m., New York time, on the Business Day immediately following the
Repurchase Date or the Fundamental Change Repurchase Date, interest shall cease
to accrue on such Securities (or portions thereof) as of such Repurchase Date or
Fundamental Change Repurchase Date, and the Holder thereof shall have no other
rights as such, other than the right to receive the Repurchase Price or
Fundamental Change Repurchase Price, as the case may be, and interest upon
surrender of such Security.

     

    8.           Conversion

    

     

    Subject
to the occurrence of certain events as set forth in the Indenture and in
compliance with the terms and conditions of the Indenture, prior to the Maturity
Date, the Holder has the right, at its option, to convert each $1,000 principal
amount, or any integral multiple thereof, of the Securities into cash and, if
applicable, shares of Common Stock as described in the Indenture.  The
Base Conversion Price shall as of the date of the Indenture initially be $85.89
per share of Common Stock, and the Base Conversion Rate shall, as of the date of
the Indenture, initially be approximately 11.6428 shares of Common Stock
per $1,000 principal amount of Securities, subject to adjustment from time to
time as provided in the Indenture.  To convert a Security, the Holder
must deliver this Security (if certificated) with the form entitled “Form of
Conversion Notice” on the reverse hereof duly completed and manually signed, to
the Company at the office or agency of the Conversion Agent, together with any
funds required pursuant to the Indenture, and, unless any shares that may be
issuable on conversion are to be issued in the same name as this Security, duly
endorsed by, or accompanied by instruments of transfer in form satisfactory to
the Company duly executed by, the Holder or by its duly authorized
attorney.  The Company will notify the Holder of any event triggering
the right to convert the Securities as specified above in accordance with the
Indenture.  If the Securities are not in certificated form, Holders
must provide notice of their election in accordance with the Applicable
Procedures of the Depository.

     

    If the
Company reclassifies its outstanding shares of Common Stock, is a party to a
consolidation or merger, or sells or disposes to another Person all or
substantially all of the assets of the Company, the right to convert a Security
into cash and shares of Common Stock will be changed into a right to convert it
into cash and the kind or amount of cash, securities or other property
receivable upon such event, in each case in accordance with and subject to the
terms and conditions of the Indenture.

     

    In
addition, following certain transactions described in the Indenture (subject to
the requirements of Section 9.05(b) of the Indenture) that occur on or prior to
December 15, 2018, that constitute a Fundamental Change, a Holder who elects to
convert its Securities in connection with such transaction will be entitled to
receive Additional Shares upon conversion. In certain circumstances involving a
Public Acquirer Change in Control, the Company may elect, in lieu of issuing
Additional Shares, to provide for the conversion of the Securities into shares
of Acquirer Common Stock as set forth in Section 9.05(c) of the
Indenture.

     

    If a
Securities are converted after the close of business on the record date and
prior to the opening of business on the next interest payment date, the
Securities must be accompanied by payment of an amount equal to the interest
payable on such interest payment date on the principal amount of the Securities
or portion thereof then converted; provided that no such payment
shall be required if such Securities have been called for redemption on a
redemption date within the period between close of business on such record date
and the opening of business on such interest payment date, or if such Securities
are surrendered for conversion on the interest payment date.

     

    No
fractional shares will be issued upon any conversion, but an adjustment and
payment in cash will be made, as provided in the Indenture, in respect of any
fraction of a share which would otherwise be issuable upon the surrender of any
Security or Securities for conversion.

     

    A
Security in respect of which a Holder is exercising its right to require
repurchase upon a Fundamental Change or repurchase on a Repurchase Date may be
converted only if such Holder withdraws its election to exercise such right in
accordance with the terms of the Indenture.

     

    9.           Restrictive
Covenants

     

    The
Indenture imposes certain limitations on, among other things, the ability of the
Company to merge or consolidate with any other Person, all subject to certain
limitations described in the Indenture.

     

    10.           Ranking and
Guarantees

     

    The
Securities are general senior unsecured obligations of the
Company.  The Company’s obligation to pay principal, premium, if any,
and interest with respect to the Securities is unconditionally guaranteed on a
senior basis, jointly and severally, by the Subsidiary Guarantors pursuant to
Article Eleven of the Indenture.  Certain limitations to the
obligations of the Subsidiary Guarantors are set forth in further detail in the
Indenture.

     

    11.           Denominations; Transfer;
Exchange

     

    The
Securities are in registered form without coupons in denominations of $1,000
principal amount and whole multiples of $1,000.  A Holder may transfer
or exchange Securities in accordance with the Indenture.  The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture.  The Registrar need not register the
transfer of or exchange of any Securities selected for redemption (except, in
the case of a Security to be redeemed in part, the portion of the Security not
to be redeemed) or any Securities for a period of 15 Business Days before
the mailing of a notice of an offer to repurchase or redeem Securities or 15
Business Days before an interest payment date.

     

    12.           Persons Deemed
Owners

     

    The
registered Holder of this Security may be treated as the owner of it for all
purposes.

     

    13.           Unclaimed
Money

     

    If money
for the payment of principal or interest remains unclaimed for two years, the
Trustee or Paying Agent shall pay the money back to the Company at its request
unless an abandoned property law designates another Person.  After any
such payment, Holders entitled to the money must look only to the Company and
not to the Trustee for payment.

     

    14.           Amendment, Supplement,
Waiver

     

    Subject
to certain exceptions, the Indenture or the Securities may be amended or
supplemented with the consent of the Holders of at least a majority of the
outstanding principal amount of the Securities, and any past default or
noncompliance with any provision may be waived with the consent of the Holders
of a majority in principal amount of the Securities.  Without the
consent of any Holder, the Company may amend or supplement the Indenture or the
Securities to, among other things, cure any ambiguity, defect or inconsistency
or to make any change that does not adversely affect the rights of any Holder in
any material respect.

     

    15.           Successor
Corporation

     

    When a
successor corporation assumes all the obligations of its predecessor under the
Securities and the Indenture, the predecessor corporation will be released from
those obligations.

     

    16.           Defaults and
Remedies

     

    Subject
to certain limitations in the Indenture, if an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Securities may declare all the Securities to be due and
payable immediately, except that in the case of an Event of Default arising from
certain events of bankruptcy, insolvency or reorganization, all outstanding
Securities shall become due and payable immediately without further action or
notice.  Holders may not enforce the Indenture or the Securities
except as provided in the Indenture.  The Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the
Securities.  Subject to certain limitations, Holders of a majority in
principal amount of the Securities may direct the Trustee in its exercise of any
trust or power.  The Company must furnish an annual compliance
certificate to the Trustee.

     

    17.           Trustee Dealings with
Company and Subsidiary Guarantors

     

    The
Trustee under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Securities and may otherwise deal with the Company, the
Subsidiary Guarantors or their respective Subsidiaries or Affiliates with the
same rights it would have if it were not Trustee.

     

    18.           No Recourse Against
Others

     

    A
director, officer, employee or stockholder, as such, of the Company, any
Subsidiary Guarantor or the Trustee shall not have any liability for any
obligations of the Company, any Subsidiary Guarantor or the Trustee under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of, such obligations or their creation.  Each Holder by
accepting a Security waives and releases all such liability.  The
waiver and release are part of the consideration for the issue of the
Security.

     

    19.           Authentication

     

    This
Security shall not be valid until the Trustee or an authenticating agent signs
the certificate of authentication on the other side of this
Security.

     

    20.           Abbreviations

     

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

     

    21.           CUSIP
Numbers

     

    Pursuant
to a recommendation promulgated by the Committee on Uniform Security
Identification Procedures, the Company will cause CUSIP numbers to be printed on
the Securities as a convenience to Holders of the Securities.  No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.

     

    22.           Governing
Law

     

    THIS
SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS 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 SECURITIES.

     

    

      

    

     

      2 Or such
later date as is appropriate in the case of Additional Securities.

       

    

     

      3 Or such
later date as is appropriate in the case of Additional Securities.

       

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

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

     

    Chesapeake
Energy Corporation

     

    6100
North Western Avenue

     

    Oklahoma
City, OK 73118

     

    

     

    Attention:  Treasurer

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ASSIGNMENT
FORM

     

    To assign
this Security, fill in the form below:

     

    I or we
assign and transfer this Security to

     

    

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

     

    

    (Insert
assignee’s Social Security or tax I.D. No.)

     

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

     

    _______________________________________________________________________

     

    
      	
              Dated:

            	 
      	
              Your
      Signature:

            	 
      

    

    

    _______________________________________________________________________

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

     

    
      	 
      
	
              Signature

            

    

    

    

    
      	 
      	 
      	
              Signature
      Guarantee:

            
	 
      	 
      	
              Signature

            
	 
      	 
      

    

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

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    FORM
OF CONVERSION NOTICE

    

    To:  Chesapeake
Energy Corporation

     

    The
undersigned registered holder of this Security hereby irrevocably exercises the
option to convert this Security, or the portion thereof (which is $1,000
principal amount or a multiple thereof) below designated, into cash and, if
applicable, shares of common stock of Chesapeake Energy Corporation (or other
property), as the case may be, in accordance with the terms of the Indenture
referred to in this Security, and directs that any cash, any shares of common
stock and/or any other property that may be issuable and deliverable upon such
conversion and Securities representing any unconverted principal amount hereof,
be issued and delivered to the registered holder hereof unless a different name
has been indicated below.  Capitalized terms used herein but not
defined shall have the meanings ascribed to such terms in the Indenture. If
funds, shares and/or any other property or any portion of this Security not
converted are to be issued in the name of a person other than the undersigned,
the undersigned will provide the appropriate information below and pay all
transfer taxes payable with respect thereto.  Any amount required to
be paid by the undersigned on account of interest, if any, accompanies this
Security.

     

    Dated:
_____________________

     

    ______________________________

    ______________________________

    Signature(s)

    (Sign
exactly as your name(s) appear(s) on the other side of this
Security)

     

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

     

    ______________________________

    Signature
Guarantee

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Fill in
for registration of shares of common stock, if any, to be issued, and
Securities, if any, to be delivered, other than to and in the name of the
registered holder:

     

    
      	 
      
	
              (Name)

            
	 
      
	
              (Street
      Address)

            
	 
      
	
              (City,
      state and zip code)

            

    

    

    

     

    Please
print name and address

     

    Principal
amount to be converted (if less than all):
$__________________________

     

    Social
Security or Other Taxpayer Identification
Number:_____________________

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    FORM
OF REPURCHASE NOTICE

     

    To:           Chesapeake
Energy Corporation

     

    The
undersigned registered holder of this Security requests and instructs Chesapeake
Energy Corporation (the “Company”) to repurchase this Security, or the portion
hereof (which is $1,000 principal amount or a multiple thereof) designated
below, on the date specified below under “Date of Requested Repurchase”, in
accordance with the terms and conditions specified in paragraph 7 of this
Security and the Indenture referred to in this Security and directs that the
check in payment for this Security or the portion thereof and any Securities
representing the portion of principal amount hereof not to be so repurchased, be
issued and delivered to the registered holder hereof unless a different name has
been indicated below.  If any portion of this Security not repurchased
is to be issued in the name of a Person other than the undersigned, the
undersigned shall pay all transfer taxes payable with respect
thereto.

     

    Dated:

     

    
      	 
      
	
              Signature(s)

            

    

    

    Fill in
for registration of Securities not

     

    repurchased
if to be issued other than to and in

     

    the name
of the registered holder:

     

    
      	 
      
	
              (Name)

            
	 
      
	
              (Street
      Address)

            
	 
      
	
              (City,
      state and zip code)

            

    

    

     

    Please
print name and address

     

    

     

    Principal
amount to be repurchased (if less than
all):  $___________________

     

    Date of
Requested Repurchase:  December 15, 20___

     

    (specify either December 15, 2018,
2023, 2028 or 2033)

     

    Certificate
number (if applicable): ____________________

     

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    FORM
OF FUNDAMENTAL CHANGE REPURCHASE NOTICE

     

    To:  Chesapeake
Energy Corporation

     

    The
undersigned registered holder of this Security hereby acknowledges receipt of a
notice from Chesapeake Energy Corporation. (the “Company”) as to the occurrence
of a Fundamental Change with respect to the Company and requests and instructs
the Company to repurchase this Security, or the portion hereof (which is $1,000
principal amount or a multiple thereof) designated below, in accordance with the
terms of the Indenture referred to in this Security and directs that the check
in payment for this Security or the portion thereof and any Securities
representing any unrepurchased principal amount hereof, be issued and delivered
to the registered holder hereof unless a different name has been indicated
below. If any portion of this Security not repurchased is to be issued in the
name of a Person other than the undersigned, the undersigned shall pay all
transfer taxes payable with respect thereto.

     

    Dated:

     

    
      	 
      
	
              Signature(s)

            

    

    

     

    Fill in
for registration of Securities not

     

    repurchased
if to be issued other than to and in

     

    the name
of the registered holder:

     

    
      	 
      
	
              (Name)

            
	 
      
	
              (Street
      Address)

            
	 
      
	
              (City,
      state and zip code)

            

    

    

     

    Please
print name and address

    

    Principal
amount to be repurchased (if less than
all):  $________________________

    

    Fundamental
Change Repurchase
Date:                                                                                                                         

    

    Certificate
Number (if
applicable):                                                                                                                         

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SCHEDULE
OF INCREASES OR DECREASES IN GLOBAL SECURITY

     

    The
following increases or decreases in this Global Security have been
made:

     

    
      	
              
                Date
      of

                Exchange

              

            	
              
                Amount
      of Decrease in Principal Amount of this Global
    Security

              

            	
              
                Amount
      of Increase in Principal Amount of this Global
    Security

              

            	
              
                Principal
      Amount of this Global Security Following such Decrease or
      Increase

              

            	
              
                Signature
      of Authorized Signatory of Trustee or Securities
      Custodian

              

            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      

    

    

     

    
      
         

      

      
         

        
          

        

      

      
         

        
          SCHEDULE
A

        

      

    

    ADDITIONAL
SHARES TABLE

     

    The
following table sets forth the increase in the Applicable Conversion Rate,
expressed as a number of Additional Shares to be received per $1,000 principal
amount of Securities.

     

    
      	 
      	 	
              Share
      Price

            	 
	 
      	 	$	57.26	 	 	$	65.00	 	 	$	75.00	 	 	$	85.89	 	 	$	95.00	 	 	$	105.00	 	 	$	115.00	 	 	$	125.00	 	 	$	150.00	 	 	$	175.00	 	 	$	200.00	 	 	$	250.00	 	 	$	400.00	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Effective
      date

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              May 20,
      2008

            	 	 	5.8214	 	 	 	5.3572	 	 	 	4.9812	 	 	 	4.7677	 	 	 	4.0895	 	 	 	3.5282	 	 	 	3.0784	 	 	 	2.7270	 	 	 	2.0818	 	 	 	1.6529	 	 	 	1.3468	 	 	 	0.9426	 	 	 	0.3858	 
	
              December 15,
      2009

            	 	 	5.8214	 	 	 	5.1295	 	 	 	4.7399	 	 	 	4.5127	 	 	 	3.8726	 	 	 	3.3206	 	 	 	2.8915	 	 	 	2.5518	 	 	 	1.9425	 	 	 	1.5409	 	 	 	1.2563	 	 	 	0.8826	 	 	 	0.3696	 
	
              December 15,
      2010

            	 	 	5.8214	 	 	 	4.9141	 	 	 	4.5012	 	 	 	4.2915	 	 	 	3.6526	 	 	 	3.1063	 	 	 	2.7001	 	 	 	2.3702	 	 	 	1.7965	 	 	 	1.4227	 	 	 	1.1603	 	 	 	0.8178	 	 	 	0.3462	 
	
              December 15,
      2011

            	 	 	5.8214	 	 	 	4.7310	 	 	 	4.3119	 	 	 	4.0936	 	 	 	3.4537	 	 	 	2.9187	 	 	 	2.5271	 	 	 	2.2053	 	 	 	1.6636	 	 	 	1.3147	 	 	 	1.0719	 	 	 	0.7570	 	 	 	0.3225	 
	
              December 15,
      2012

            	 	 	5.8214	 	 	 	4.5314	 	 	 	4.0652	 	 	 	3.8282	 	 	 	3.1825	 	 	 	2.6748	 	 	 	2.2909	 	 	 	1.9902	 	 	 	1.4847	 	 	 	1.1707	 	 	 	0.9563	 	 	 	0.6770	 	 	 	0.2911	 
	
              December 15,
      2013

            	 	 	5.8214	 	 	 	4.3137	 	 	 	3.7879	 	 	 	3.5278	 	 	 	2.8886	 	 	 	2.4006	 	 	 	2.0254	 	 	 	1.7534	 	 	 	1.2920	 	 	 	1.0152	 	 	 	0.8293	 	 	 	0.5758	 	 	 	0.2556	 
	
              December 15,
      2014

            	 	 	5.8214	 	 	 	4.0264	 	 	 	3.4039	 	 	 	3.1110	 	 	 	2.5074	 	 	 	2.0219	 	 	 	1.6728	 	 	 	1.4340	 	 	 	1.0411	 	 	 	0.8158	 	 	 	0.6678	 	 	 	0.4782	 	 	 	0.2121	 
	
              December 15,
      2015

            	 	 	5.8214	 	 	 	3.7995	 	 	 	3.0812	 	 	 	2.7593	 	 	 	2.1369	 	 	 	1.6577	 	 	 	1.3532	 	 	 	1.1331	 	 	 	0.8091	 	 	 	0.6324	 	 	 	0.5193	 	 	 	0.3746	 	 	 	0.1683	 
	
              December 15,
      2016

            	 	 	5.8214	 	 	 	3.7726	 	 	 	2.6585	 	 	 	2.2465	 	 	 	1.5965	 	 	 	1.1639	 	 	 	0.9097	 	 	 	0.7278	 	 	 	0.5131	 	 	 	0.4055	 	 	 	0.3358	 	 	 	0.2454	 	 	 	0.1106	 
	
              December 15,
      2017

            	 	 	5.8214	 	 	 	3.7572	 	 	 	1.9959	 	 	 	1.3704	 	 	 	0.7442	 	 	 	0.4444	 	 	 	0.2880	 	 	 	0.2286	 	 	 	0.1745	 	 	 	0.1438	 	 	 	0.1208	 	 	 	0.0882	 	 	 	0.0396	 
	
              December 15,
      2018

            	 	 	5.8214	 	 	 	3.7418	 	 	 	1.6905	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 

    

    

    In no
event will the Applicable Conversion Rate exceed 17.4642 per $1,000 principal
amount of Notes, subject to adjustment.  No adjustments will be made
if share prices is above $400.00 or below $57.26.

     

    
      
         

      

      
         

        
          

        

      

      
         

        
          SCHEDULE B

          

          

        

      

    

    PROJECTED
PAYMENT SCHEDULE

     

    (per
$1,000 principal amount)

     

    
      	
              
                Period

              

            	
              
                Period

                End
      date

              

            	
              
                Projected
      Payment Schedule

              

            
	
              1.00

            	
              December
      15, 2008

            	
              $12.38

            
	
              2.00

            	
              June
      15, 2009

            	
              $11.25

            
	
              3.00

            	
              December
      15, 2009

            	
              $11.25

            
	
              4.00

            	
              June
      15, 2010

            	
              $11.25

            
	
              5.00

            	
              December
      15, 2010

            	
              $11.25

            
	
              6.00

            	
              June
      15, 2011

            	
              $11.25

            
	
              7.00

            	
              December
      15, 2011

            	
              $11.25

            
	
              8.00

            	
              June
      15, 2012

            	
              $11.25

            
	
              9.00

            	
              December
      15, 2012

            	
              $11.25

            
	
              10.00

            	
              June
      15, 2013

            	
              $11.25

            
	
              11.00

            	
              December
      15, 2013

            	
              $11.25

            
	
              12.00

            	
              June
      15, 2014

            	
              $11.25

            
	
              13.00

            	
              December
      15, 2014

            	
              $11.25

            
	
              14.00

            	
              June
      15, 2015

            	
              $11.25

            
	
              15.00

            	
              December
      15, 2015

            	
              $11.25

            
	
              16.00

            	
              June
      15, 2016

            	
              $11.25

            
	
              17.00

            	
              December
      15, 2016

            	
              $11.25

            
	
              18.00

            	
              June
      15, 2017

            	
              $11.25

            
	
              19.00

            	
              December
      15, 2017

            	
              $11.25

            
	
              20.00

            	
              June
      15, 2018

            	
              $11.25

            
	
              21.00

            	
              December
      15, 2018

            	
              $11.25

            
	
              22.00

            	
              June
      15, 2019

            	
              $15.11

            
	
              23.00

            	
              December
      15, 2019

            	
              $15.29

            
	
              24.00

            	
              June
      15, 2020

            	
              $15.47

            
	
              25.00

            	
              December
      15, 2020

            	
              $15.66

            
	
              26.00

            	
              June
      15, 2021

            	
              $15.86

            
	
              27.00

            	
              December
      15, 2021

            	
              $16.06

            
	
              28.00

            	
              June
      15, 2022

            	
              $16.27

            
	
              29.00

            	
              December
      15, 2022

            	
              $16.48

            
	
              30.00

            	
              June
      15, 2023

            	
              $16.71

            
	
              31.00

            	
              December
      15, 2023

            	
              $16.94

            
	
              32.00

            	
              June
      15, 2024

            	
              $17.18

            
	
              33.00

            	
              December
      15, 2024

            	
              $17.43

            
	
              34.00

            	
              June
      15, 2025

            	
              $17.68

            
	
              35.00

            	
              December
      15, 2025

            	
              $17.95

            
	
              36.00

            	
              June
      15, 2026

            	
              $18.22

            
	
              37.00

            	
              December
      15, 2026

            	
              $18.50

            
	
              38.00

            	
              June
      15, 2027

            	
              $18.80

            
	
              39.00

            	
              December
      15, 2027

            	
              $19.10

            
	
              40.00

            	
              June
      15, 2028

            	
              $19.42

            
	
              41.00

            	
              December
      15, 2028

            	
              $19.74

            
	
              42.00

            	
              June
      15, 2029

            	
              $20.08

            
	
              43.00

            	
              December
      15, 2029

            	
              $20.42

            
	
              44.00

            	
              June
      15, 2030

            	
              $20.78

            
	
              45.00

            	
              December
      15, 2030

            	
              $21.15

            
	
              46.00

            	
              June
      15, 2031

            	
              $21.54

            
	
              47.00

            	
              December
      15, 2031

            	
              $21.94

            
	
              48.00

            	
              June
      15, 2032

            	
              $22.35

            
	
              49.00

            	
              December
      15, 2032

            	
              $22.78

            
	
              50.00

            	
              June
      15, 2033

            	
              $23.22

            
	
              51.00

            	
              December
      15, 2033

            	
              $23.67

            
	
              52.00

            	
              June
      15, 2034

            	
              $24.14

            
	
              53.00

            	
              December
      15, 2034

            	
              $24.63

            
	
              54.00

            	
              June
      15, 2035

            	
              $25.14

            
	
              55.00

            	
              December
      15, 2035

            	
              $25.66

            
	
              56.00

            	
              June
      15, 2036

            	
              $26.20

            
	
              57.00

            	
              December
      15, 2036

            	
              $26.76

            
	
              58.00

            	
              June
      15, 2037

            	
              $27.34

            
	
              59.00

            	
              December
      15, 2037

            	
              $27.93

            
	
              60.00

            	
              June
      15, 2038

            	
              $28.55

            
	
              61.00

            	
              December
      15, 2038

            	
              $7,470.82ha8kex10_1.htm

     

     

    
      

      Exhibit
10.1

      

      TRANSATLANTIC
HOLDINGS, INC.

      EXECUTIVE
SEVERANCE PLAN

      

      Transatlantic Holdings, Inc., a
Delaware corporation (the “Company”), has adopted this
Transatlantic Holdings, Inc. Executive Severance Plan (the “Plan”), first effective as of
May 22, 2008 (the “Effective
Date”).

      

      I.  Purpose

      

      The Plan is maintained for the purpose
of providing severance payments and benefits for a select group of management or
highly compensated employees covered by this Plan whose employment is terminated
under the circumstances set forth in this Plan.

      

      II.  Term

      

      The Plan shall be effective as of the
Effective Date and continue until terminated by the Compensation Committee of
the Board of Directors of the Company (the “Compensation Committee”) with
12 months’ notice to Eligible Employees (as defined in Section III below) in
accordance with Section VIII below; provided that this Plan shall
in no event terminate before the second anniversary of the Effective
Date.

      

      III.  Eligibility

      

      The
employees eligible to participate in this Plan at any time (together, the “Eligible Employees”) shall be
comprised of each employee who at the time of the termination of his or her
employment is a participant in the Company’s Partners Plan (the “Partners Plan”) or the
Company’s Senior Partners Plan (the “Senior Partners Plan”); provided that if an employee
has an employment agreement (or other agreement or arrangement) that provides
for payment of severance in connection with a "Covered Termination" (as defined
in Section IV below), the employee will not be an Eligible
Employee.

      

      For
purposes of this Plan, an employee shall be deemed to be a participant in the
Partners Plan only if such employee received an award with respect to the most
recently commenced Performance Period of the Partners Plan (as defined
therein).

      

      IV.  Severance

      

      An Eligible Employee shall be entitled
to receive the benefits described in this Section IV if he or she experiences a
“Covered Termination.”

      

      A “Covered Termination” shall be:

      

      (1)  For
all Eligible Employees, an Eligible Employee’s termination of service during the
term of this Plan for any reason other than the Eligible Employee’s: (a) death;
(b) “Disability” (as defined in Section IV.K below); (c) resignation
(including any resignation that an Eligible Employee may assert was a
constructive discharge); or (d) termination by the Company or its subsidiaries
for “Cause” (as defined in Section IV.K below); and

      

      (2)  In
the case of the Chief Executive Officer of the Company and each other Eligible
Employee who is both a participant in the Senior Partners Plan and has a rank of
Senior Vice President or higher of the Company, a Covered Termination shall also
include such Eligible Employee’s termination of service during the term of this
Plan as a result of resignation from his or her employment for “Good Reason” (as
defined in Section IV.K below).

      

      For
purposes of this Plan, an employee shall be deemed to be a participant in the
Senior Partners Plan only if such employee has an award outstanding under the
Senior Partners Plan with respect to the Performance Period of the Senior
Partners Plan (as defined therein) ending in the year of
termination.  Unless otherwise stated in this Plan, for purposes of an
Eligible Employee’s employment, “termination” of employment or service shall
mean the date upon which the Eligible Employee ceases to perform his or her
employment duties and responsibilities for the Company and/or each of its
subsidiaries, as such termination is defined in Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”).

      

      A.  Accrued Wages and Expense
Reimbursements

      

      If an Eligible Employee experiences a
Covered Termination, the Eligible Employee shall receive: (1) accrued wages due
through the date of termination in accordance with the Eligible Employee’s
employer’s normal payroll practices; (2) reimbursement for any unreimbursed
business expenses properly incurred by the Eligible Employee prior to the date
of termination in accordance with Company policy (and for which the Eligible
Employee has submitted proper documentation as may be required by the Company)
and (3) any accrued but unused vacation pay in a lump sum.

      

      B.  Severance
Installments

      

      If an
Eligible Employee experiences a Covered Termination, the Eligible Employee shall
receive severance equal to the sum of the following, divided by 12, and then
multiplied by the number of months in the “Severance Period” (as defined below)
applicable to the Eligible Employee:

      

      (1)  Annual
base salary as of the date of termination; plus

      

      (2)  The
total of any payments designated as a “supplemental bonus” or “quarterly cash”
that would have been payable in respect of the year of termination (but not
including any spot bonus or other discretionary bonus); plus

      

      (3)  The
average of the Eligible Employee’s “Annual Cash Bonuses” (as defined below)
awarded and paid with respect to the three most recently completed calendar
years preceding the calendar year in which termination occurs (including any
year in which the bonus was zero); provided that: (a) if the
date of termination occurs during a calendar year before the time that Annual
Cash Bonuses have generally been paid out to employees for the prior calendar
year's performance, the average shall be computed based on the second, third and
fourth calendar years prior to the calendar year in which the termination
occurs, (b) if the Eligible Employee was not employed for all years that would
otherwise be included in the average, the average shall be computed based on
each such year in which the Eligible Employee was employed and (c) if the
Eligible Employee earns or is awarded no bonus for one of the years that would
otherwise be included in the average as a result of an approved leave of
absence, the average shall be computed by using the three most recently
completed calendar years preceding the calendar year of termination in which
such condition did not apply.  “Annual Cash Bonus” means
any performance
based, year-end cash bonus or a cash bonus in lieu of a year-end cash bonus, and
the amount of any Annual Cash Bonus awarded and paid shall include any amount of
such bonus voluntarily deferred by the Eligible Employee.

      

      Such
severance amount shall be paid over the number of months in the Severance Period
in equal weekly, biweekly, or monthly installments (each, a “Severance Installment”) in
accordance with the Eligible Employee’s employer’s normal payroll
practices.  Notwithstanding anything in this Plan to the contrary, the
cash payable and benefits receivable hereunder, to the extent necessary to avoid
duplication of payments and benefits, shall be reduced by any payments or
benefits which the Eligible Employee receives pursuant to any other plan,
agreement or arrangement providing severance payments or benefits, including but
not limited to, collectively bargained agreements and any state sponsored,
mandated or similar severance program.

      

      The
“Severance Period”
shall be:

      

      (1)  For
the Chief Executive Officer of the Company, 30 months;

      

      (2)  For
Eligible Employees who are both Senior Vice Presidents or higher of the Company
and participants in the Senior Partners’ Plan (as such participation is set
forth in Section IV above), 24 months; and

      

      (3)  For
all other Eligible Employees, one month per year of service with the Company up
to a maximum of 12 months, except that no Eligible Employee shall have a
Severance Period of less than six months regardless of years of
service.

      

      C.  Equity and Senior
Partners Plan Vesting

      

      If an
Eligible Employee experiences a Covered Termination, the Eligible Employee’s
Severance Period will be treated as continued employment for the purpose of
outstanding restricted stock units (“RSUs”), Performance RSUs that
are earned but unvested under the Partners Plan (but excluding any performance
RSUs for performance periods ending on or after the year of termination), Senior
Performance RSUs that are earned but unvested under the Senior Partners Plan
(but excluding any performance RSUs for performance periods ending on or after
the year of termination) and options, in each case that would otherwise have
vested or become exercisable during the Severance Period had the Eligible
Employee’s employment not terminated.  Such awards shall otherwise
continue to be subject to the terms and conditions of the applicable plan and
award agreement, provided
that, for purposes of the commencement and measurement of the
post-termination exercise period (if any as approved in accordance with the plan
and award agreement) applicable to any stock options held by the Eligible
Employee as of the date of termination, the last day of the Severance Period
will be considered the date of termination.  To the extent an RSU or
option does not vest upon the last day of the Severance Period such award shall
be forfeited for no consideration.

      

      D.  Continued Health
Coverage and Participation in Retiree Health

      

      If an
Eligible Employee experiences a Covered Termination, the Eligible Employee shall
be entitled to participate during the Severance Period in the applicable
Company-provided health plan for active employees in which the Eligible Employee
participated prior to termination by paying on an after-tax basis the applicable
employee contribution charged to active employees receiving similar
coverage.  If the Eligible Employee participates in such plan, the
actuarial cost of such coverage in excess of the applicable employee
contribution paid by the Eligible Employee, as determined by the Company, shall
be imputed as taxable income to the Eligible Employee.  Upon the last
day of the Severance Period, the Eligible Employee shall be treated as having
had a termination event as of the date that the Severance Period ends for
purposes of continuing coverage requirements under the Consolidated Omnibus
Budget Reconciliation Act of 1985 (“COBRA”).

      

      If an
Eligible Employee experiences a Covered Termination, the Eligible Employee’s
Severance Period (but not including any period of coverage under COBRA) shall be
treated as a period of employment service (in connection with both the age and
service requirements) for purposes of determining the Eligible Employee’s
eligibility to participate, in and to calculate the amount of, the Company
contribution towards any Company retiree health plan.  For these
purposes, the Eligible Employee’s deemed period of employment service shall end
as of the last day of the Severance Period.  If the Eligible Employee
would not have satisfied the eligibility requirements to participate in any
Company retiree health plan but for the preceding treatment of the Severance
Period as a period of employment service, the actuarial cost of such retiree
health coverage in excess of any contribution paid by the Eligible Employee, as
determined by the Company, shall be imputed as income for all periods in which
such retiree health coverage is provided.  If, however, the Eligible
Employee satisfies the eligibility requirements to participate in any Company
retiree health plan on the basis of the Eligible Employee’s age and years of
service on or before the date of termination, then no such income imputation
shall occur with respect to retiree health coverage.

      

      E.  Additional Non-qualified Pension
Credits

      

      If an Eligible Employee experiences a
Covered Termination, the Eligible Employee shall be entitled to additional
service credit and credit for additional age, in each case in an amount equal to
the length of the Severance Period, for purposes of calculating the Eligible
Employee’s benefit amounts, and determining vesting and eligibility for
retirement (including early retirement), under the Company’s non-qualified
pension plans (plans that are not intended to be qualified under the provisions
of Code section 401) in which such Eligible Employee was actively participating
immediately prior to his or her date of termination.  For the
avoidance of doubt, no Severance Installments pursuant to Section IV.B of this
Plan shall be included in the calculation of any benefits of an Eligible
Employee under any non-qualified pension plan of the
Company.  Eligible Employees shall commence payments under such
non-qualified pension plans at the time specified in the applicable plan,
determined as if payment of “Qualified Plan Retirement Income” (as defined in
the applicable plan) began to be paid immediately following the Eligible
Employee’s date of termination.

      

      F.  Continued
Life Insurance and Participation in Retiree Life

      

      If an Eligible Employee experiences a
Covered Termination, the Eligible Employee shall be entitled to participate
during the Severance Period in the group life insurance benefits generally
available to active employees of the Company.  The Eligible Employee
shall be required to pay the costs of such coverage on the same basis as prior
to the date of termination.  Any portion of the premium paid by the
Company shall be imputed as taxable income to the Eligible
Employee.  If an Eligible Employee experiences a Covered Termination,
the Eligible Employee’s Severance Period shall be treated as a period of
employment service (in connection with both the age and service requirements)
for purposes of determining the Eligible Employee’s eligibility to participate
in and to calculate the amount of a Company contribution towards any Company
retiree life insurance coverage.  The Eligible Employee’s deemed
period of employment service shall end as of the close of the Severance
Period.  If the Eligible Employee would not have satisfied the
eligibility requirements to participate in any Company retiree life insurance
plan but for the treatment of the Severance Period as a period of employment
service, the actuarial cost of such retiree life insurance coverage in excess of
any contribution paid by the Eligible Employee, as determined by the Company,
shall be imputed as income for all periods in which such retiree life insurance
coverage is provided.  If, however, the Eligible Employee satisfies
the eligibility requirement to participate in any Company retiree life insurance
plan on the basis of the Eligible Employee’s age and years of service on or
before the date of termination, no such income imputation shall occur with
respect to retiree life insurance coverage.

      

      G.  Limitations on
Severance

      

      The amounts described in
Subsections B through F of this Section IV (collectively referred to as
“Severance”) are
subject to the Eligible Employee’s continued compliance with any applicable
release and/or restrictive covenant agreement (referred to generically as the
“Release”) that the
Company may require under other compensation arrangements  (including
but not limited to the Partners Plan, the Senior Partners Plan and the Company’s
Deferred Compensation Profit Participation Plan), any applicable employment
agreement or the release pursuant to Section VI below.  Failure to
execute or adhere to such a Release by the Eligible Employee shall result in a
forfeiture of all Severance under this Plan.  (For the avoidance of
doubt, any Severance Installment or other Severance benefit due under the terms
of this Plan shall be forfeited to the extent such payment would have otherwise
been due but for the Eligible Employee’s failure to provide the Company with a
duly executed and effective Release.)  Nothing herein shall preclude
the Company in its sole discretion from requiring the Eligible Employee to enter
into other such releases or agreements as a condition to receiving Severance
under this Plan.

      

      H.  Timing
of Payments and Delay for Specified Employees

      

      Severance
Installments shall commence on a payroll date of the Eligible Employee’s
employer within 90 days following the Eligible Employee’s termination of
employment.  For purposes of Code section 409A, each Severance
Installment shall be treated as a separate payment.  If the Plan
Administrator determines that the Eligible Employee is a “specified employee”
for purposes of Code section 409A, any Severance Installment or other Severance
benefit that would otherwise be payable or due under Section IV of this Plan
shall be delayed for six months to the extent that such Severance is determined
to constitute deferred compensation under Code section 409A (taking into account
any regulatory exceptions that may be applicable, such as short-term deferral
and separation under Code section 409A).  In such case, the Eligible
Employee shall not receive such Severance Installment or benefit that is subject
to the six-month delay until the first scheduled payroll date that occurs more
than six months following the date of termination (the “First Payment Date”) and, on
the First Payment Date, the Company shall pay the Eligible Employee an amount
equal to the sum of the Severance Installments that would have been payable in
respect of the period preceding the First Payment Date but for the delay imposed
on account of Code section 409A.

      

      I.  Covenants and for “Cause”
Terminations

      

      Notwithstanding anything to the
contrary in this Plan, if at any time (a) the Eligible Employee breaches any of
the provisions of a Release or (b) the Plan
Administrator determines that grounds existed, on or prior to the date of
termination of the Eligible Employee’s employment with the Company, including
prior to the Effective Date, for the Company to terminate the Eligible
Employee’s employment for “Cause”:

      

      (1)  No
further payments or benefits shall be due under this Section IV;
and

      

      (2)  The
Eligible Employee shall be obligated to repay to the Company, immediately and in
a cash lump sum, the amount of any Severance Installments and other Severance
benefits (other than any amounts received by the Eligible Employee under
Sections IV.D, E or F) previously received by the Eligible Employee (which
shall, for the avoidance of doubt, be calculated on a pre-tax
basis);

      

      provided that the Eligible
Employee shall in all events be entitled to receive accrued wages, expense
reimbursement and accrued but unused vacation pay as set forth in Section IV.A
above.

      

      J.  No Rights

      

      Other than as provided in this Section
IV, an Eligible Employee shall have no rights to any compensation or any other
benefits under this Plan.  All other benefits, if any, due to the
Eligible Employee following the date of termination shall be determined in
accordance with the plans, policies and practices of the Company or any
subsidiary of the Company. Whether the Eligible
Employee’s employment has terminated for purposes of any Company plan or
arrangement shall be determined on the basis of the applicable terms of the plan
or arrangement.

      

      K.  Definitions

      

      “Cause” shall mean, whether
occurring prior to, or on or after the Effective Date:

      

      (1)  The
Eligible Employee’s failure to perform substantially his or her duties with the
Company or any subsidiary of the Company (other than any such failure resulting
from the Eligible Employee’s incapacity due to physical or mental
illness);

      

      (2)  The
Eligible Employee’s malfeasance or misconduct;

      

      (3)  The
Eligible Employee’s knowing and material violation of a provision of the
Company’s Code of Conduct or the Director, Executive Officer and Senior
Financial Officer Code of Business Conduct and Ethics, as such codes of conduct
may be in effect from time to time, or other policies regarding behavior of
employees; or

      

      (4)  The
conviction of, or entry of a plea of guilty or no contest by the Eligible
Employee with respect to, a felony or any lesser crime of which fraud or
dishonesty is a material element.

      

      “Disability” shall mean a
period of medically determined physical or mental impairment that is expected to
result in death or last for a period of not less than 12 months during which an
Eligible Employee qualifies for income replacement benefits under the Company’s
long-term disability plan for at least 3 months, or, if an Eligible Employee
does not participate in such a plan, a period of disability during which the
Eligible Employee is unable to engage in any substantial gainful activity by
reason of any medically determined physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months.

      

      “Good Reason” shall
mean:

      

      (1)  A
diminution in the Eligible Employee’s duties or responsibilities such that they
are (or the assignment to the Eligible Employee of any duties or
responsibilities that are) inconsistent in any material and adverse respect with
the Eligible Employee’s then title or offices;

      

      (2)  A
diminution in the Eligible Employee’s titles or offices (including, if
applicable, membership on the Board) that is material and adverse to the
Eligible Employee;

      

      (3) A
material reduction by the Company in the Eligible Employee’s rate of annual base
salary; or

      

      (4) A
material reduction by the Company in the Eligible Employee’s annual target bonus
opportunity.

      

      Notwithstanding
the foregoing, a termination for Good Reason shall not have occurred unless (a)
the Eligible Employee gives written notice to the Company of termination of
employment within 30 days after the Eligible Employee first becomes aware of the
occurrence of the circumstances constituting Good Reason, specifying in detail
the circumstances constituting Good Reason, and the Company has failed within 30
days after receipt of such notice to cure the circumstances constituting Good
Reason, and (b) the Eligible Employee’s “separation from service” (within the
meaning of Code section 409A) occurs no later than two years following the
initial existence of one or more of the circumstances giving rise to Good
Reason.

      

      V.  No
Duplication/No Mitigation

      

      A.  No Duplication

      

      This Plan is not intended to, and shall
not, result in any duplication of payments or benefits to any Eligible
Employee.  The Compensation Committee shall be authorized to interpret
this Plan to give effect to the preceding sentence.

      

      B.  No Mitigation

      

      In order for an Eligible Employee to
receive the Severance described in this Plan, the Eligible Employee shall be
under no obligation to seek other employment or otherwise mitigate the
obligations of the Company under this Plan, and there shall be no offset against
any amounts due under this Plan on account of any remuneration attributable to
any subsequent employment that the Eligible Employee may obtain.

      

      VI.  Release
and Restrictive Covenant Agreement

      

      Subject to Section IV.G above, the
Company may require and condition payment of the Severance on the Eligible
Employee’s execution of a Release in the form attached to this Plan as Exhibit
A; provided, however,
that such Release must be executed within 60 days after the date of termination;
provided, further, that
if the local laws of a country or non-U.S. jurisdiction in which an Eligible
Employee works would not permit all or a portion of the Release to be structured
or executed in the form attached hereto, the General Counsel of the Company or
his or her designee shall have the discretion to create a release that
incorporates as much of the Release as possible while also complying with such
local laws.

      

      VII.  Plan
Administration

      

      A.  Compensation
Committee

      

      The Plan shall be interpreted,
administered and operated by the Compensation Committee, which shall have the
complete authority, in its sole discretion, subject to the express provisions of
this Plan, to interpret this Plan, adopt any rules and regulations for carrying
out this Plan as may be appropriate and decide any and all matters and make any
and all determinations arising under or otherwise necessary or advisable for the
administration of this Plan.  All interpretations and decisions by the
Compensation Committee shall be final, conclusive and binding on all parties
affected thereby.  Notwithstanding the foregoing, the Compensation
Committee shall have the right to delegate to any individual member of the
Compensation Committee or to any executive of the Company any of the
Compensation Committee’s authority under this Plan; provided that no person shall
act as Plan Administrator in any matter directly relating to his or her
eligibility or amount of Severance under this Plan.  The Compensation
Committee and/or the member of the Compensation Committee or the executive of
the Company delegated any authority under this Plan shall be referred to in this
Plan as the “Plan Administrator.”

      

      B.  Expenses and
Liabilities

      

      All expenses and liabilities that the
Plan Administrator and the Claims Administrator incur in connection with the
administration of this Plan shall be borne by the Company.  The Plan
Administrator may employ attorneys, consultants, accountants, appraisers,
brokers or other persons in connection with such administration, and the Plan
Administrator, the Company and the Company’s officers and directors shall be
entitled to rely upon the advice, opinions or valuations of any such persons. No
member of the Compensation Committee or any executive delegated by the
Compensation Committee as Plan Administrator shall be personally liable for any
action, determination or interpretation made in good faith with respect to this
Plan, and all members of the Compensation Committee and any executive delegated
by the Compensation Committee as the Plan Administrator shall be fully protected
by the Company in respect of any such action, determination or interpretation to
the extent permitted by (a) the Company’s charter; (b) the Company’s bylaws and
(c) applicable law.

      

      VIII.
Termination and Amendment

       

      A.  Termination

       

      The
Compensation Committee may terminate this Plan
in accordance with Section II of this Plan, provided that no termination
shall adversely affect the payments or benefits to which any Eligible Employee
has become entitled by virtue of a Covered Termination occurring before the time
of termination of this Plan.  Any notice of termination shall be in
accordance with Section VIII.C below.

      

      B.  Amendment

      

      The Compensation Committee may amend
this Plan in any manner, provided that, in the event
an amendment is determined by the Compensation Committee to be, in the
aggregate, material and adverse to an Eligible Employee (taking into account any
aspects of such amendments that are beneficial to the Eligible Employee), the
Compensation Committee shall provide 12 months’ notice to such Eligible Employee
in accordance with Section VIII.C below (and no such change shall be effective
before the second anniversary of the Effective Date).  In addition,
the Compensation Committee may, at any time, amend this Plan in any manner it
determines in good faith is necessary or appropriate (1) to comply with
applicable law or (2) to comply with Code section 409A.

      

      For the avoidance of doubt, amendments
under the preceding sentence may be material and adverse to Eligible
Employees.  In addition, if an employee was not an Eligible Employee
because he or she had an employment agreement (or other agreement or
arrangement) that contemplated payment of severance with respect to any
termination, the Compensation Committee may amend this Plan to exclude such
employee without notice to such employee (notwithstanding the expiration of such
agreement or arrangement) if it determines that in good faith that such
exclusion is necessary to comply with Code section 409A.  Any notice
of amendment shall be in accordance with Section VIII.C below.

      

      C.  Notice of Termination or
Amendment

      

      The Company shall be deemed to have
provided any notice required by this Section VIII if the Company makes a
reasonable, good faith effort to email or otherwise contact all Eligible
Employees.  For the avoidance of doubt, notice shall be deemed to have
been validly delivered to every Eligible Employee notwithstanding that certain
individual Eligible Employees do not receive actual notice, if the Company makes
reasonable, good faith efforts as provided in the preceding
sentence.

      

      D.  Participation in Partners
Plan and Senior Partners Plan

      

      The
Compensation Committee may from time to time designate successor or alternative
plans to the Partners Plan and/or the Senior Partners Plan (including levels of
participation in any such successor or alternative plan) by reference to which
status as an Eligible Employee (or benefit levels under this Plan) is
established.  This Plan shall in no way limit the ability of the
Company or Compensation Committee to change or terminate an employee’s
participation in the Partners Plan and/or the Senior Partners Plan (or any
successor or alternative plan), which may in turn cause such employee to cease
to be an Eligible Employee.

      

      IX.  Withholding
Taxes

      

      The Company may withhold from any
amounts payable under this Plan such federal, state, local or other taxes as may
be required to be withheld pursuant to any applicable law or
regulation.

      

      X.  Miscellaneous

      

      A.  No Effect on Other
Benefits

      

      Any Severance received by an Eligible
Employee under this Plan shall not be counted as compensation for purposes of
determining benefits under other benefit plans, programs, policies and
agreements, except to the extent expressly provided therein or in this
Plan.

      

      B.  Unfunded
Obligation

      

      Any Severance and benefits provided
under this Plan shall constitute an unfunded obligation of the
Company.  Severance Installments and other benefits paid under this
Plan will be made, when due, entirely by the Company from its general
assets.  This Plan shall constitute solely an unsecured promise by the
Company to provide Severance to Eligible Employees to the extent provided
herein.  For the avoidance of doubt, any pension, health or life
insurance benefits to which an Eligible Employee may be entitled under this Plan
shall be provided under other applicable employee benefit plans of the
Company.  This Plan does not provide the substantive benefits under
such other employee benefit plans, and nothing in this Plan shall restrict the
Company’s ability to amend, modify or terminate such other employee benefit
plans.

      

      C.  Employment Status

      

      The Plan is not a contract of
employment, does not guarantee the Eligible Employee employment for any
specified period and does not limit the right of the Company or any subsidiary
of the Company to terminate the employment of the Eligible Employee at any time
for any reason or no reason or to change the status of any Eligible Employee’s
employment or to change any employment policies.

      

      D.  Section Headings

      

      The section headings contained in this
Plan are included solely for convenience of reference and shall not in any way
affect the meaning of any provision of this Plan.

      

      E.  Governing Law

      

      The Plan shall be governed by the laws
of the State of New Yor.

      

      F.  Assignment

      

      This Plan shall inure to the benefit of
and shall be enforceable by an Eligible Employee’s personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.  If an Eligible Employee should die while any
amount is still payable to the Eligible Employee under this Plan had the
Eligible Employee continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Plan, or as
determined by the Compensation Committee, to the Eligible Employee’s
estate.  An Eligible Employee’s rights under this Plan shall not
otherwise be transferable or subject to lien or attachment.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      EXHIBIT
A

      

      TRANSATLANTIC
HOLDINGS, INC.

      RELEASE
AND RESTRICTIVE COVENANT AGREEMENT

      

      This Release and Restrictive Covenant
Agreement (the “Agreement”) is entered into by and between
___­_____________________ (the “Employee”) and Transatlantic Holdings, Inc.,
a Delaware Corporation (the “Company”).

      

      Unless
the context otherwise requires each term defined in the Transatlantic Holdings,
Inc. Executive Severance Plan (the “Plan”) has the same meaning when used in
this Agreement.

       

      I.           Termination
of Employment

       

       The Employee’s employment with
the Company and each of its subsidiaries and controlled affiliates (collectively
“TRH”) shall terminate on _______________ (the “Termination Date”) and, as of
that date, the Employee shall cease performing the Employee’s employment duties
and responsibilities for TRH and shall no longer report to work for
TRH.  For purposes of this Agreement, the term “controlled affiliates”
means an entity of which the Company directly or indirectly owns or controls a
majority of the voting shares.

      

      II.           Severance

      

      The Employee shall receive Severance
Installments (as defined in the Plan) in the gross amount of $_______________,
less applicable tax and benefit withholdings paid out over ________ months (in
equal weekly, biweekly, or monthly installments) in accordance with Section IV.B
of the Plan and the Company’s normal payroll practices.  The Employee
shall also be paid accrued wages, reimbursed expenses and ________ days of
accrued, unused vacation pay as set forth in Section IV.A of the
Plan.

      

      III.    Other
Benefits

      

      Nothing in this Agreement modifies or
affects any of the terms of any benefit plans or programs (including, without
limitation, the Company’s right to alter the terms of such plans or
programs).  No further contributions or employer matching
contributions shall be made on behalf of the Employee to any Company 401(k) or
other savings or thrift plan after the Termination Date and Employee shall no
longer be eligible for coverage under the short-term and long-term disability
programs or the Employee Stock Purchase Plan after the Termination
Date.  The Employee shall not accrue vacation after the Termination
Date. Except as set forth in this Agreement, there are no other payments or
benefits due to the Employee from the Company (except those benefits as set
forth in Sections IV.C through F of the Plan); the items set forth on Schedule 1
of this Agreement are the only payments due to the Employee under Sections IV.B
through F of the Plan.  The Employee acknowledges and agrees that the
Company has made no representations to the Employee as to the applicability of
Section 409A of the Internal Revenue Code to any of the payments or benefits
provided to the Employee pursuant to the Plan or this Agreement.

      

       IV.    Release of
Claims

      

      In partial consideration of the
payments and benefits described in Section IV of the Plan, to which the Employee
agrees the Employee is not entitled until and unless he executes this Agreement,
the Employee, for and on behalf of the Employee and the Employee’s heirs and
assigns, subject to the following two sentences hereof, hereby waives and
releases any common law, statutory or other complaints, claims, charges or
causes of action of any kind whatsoever, both known and unknown, in law or in
equity, which the Employee ever had, now has or may have against TRH and its
shareholders (other than C.V. Starr & Co., Inc. and Starr International
Company, Inc.), successors, assigns, directors, officers, partners, members,
employees or agents (collectively, the “Releasees”), including, without
limitation, any complaint, charge or cause of action arising under federal,
state or local laws pertaining to employment, including the Age Discrimination
in Employment Act of 1967 (“ADEA,” a law which prohibits discrimination on the
basis of age), the National Labor Relations Act, the Civil Rights Act of 1991,
the Americans With Disabilities Act of 1990, Title VII of the Civil Rights Act
of 1964, all as amended; and all other federal, state and local laws and
regulations. By signing this Agreement, the Employee acknowledges that the
Employee intends to waive and release any rights known or unknown that the
Employee may have against the Releasees under these and any other laws; provided, that the Employee
does not waive or release claims with respect to the right to enforce the
Employee’s rights under this Agreement (the “Unreleased Claims”).  In
addition, the Employee agrees the Employee waives any claim to reinstatement or
re-employment with TRH, the Employee shall not seek or accept employment with
TRH after the Termination date and the Employee agrees not to bring any claim
based upon the failure or refusal of TRH to employ the Employee
hereafter.

      

      V.
Proceedings

      

      The Employee acknowledges that the
Employee has not filed any complaint, charge, claim or proceeding, except with
respect to an Unreleased Claim, if any, against any of the Releasees before any
local, state or federal agency, court or other body (each individually a
“Proceeding”).  The Employee represents that the Employee is not aware
of any basis on which such a Proceeding could reasonably be
instituted.  By signing this Agreement the Employee:

      

      (a)  Acknowledges that the
Employee shall not initiate or cause to be initiated on his behalf any
Proceeding and shall not participate in any Proceeding, in each case, except as
required by law;

      

      (b)  Waives any right he may
have to benefit in any manner from any relief (whether monetary or otherwise)
arising out of any Proceeding, including any Proceeding conducted by the Equal
Employment Opportunity Commission (“EEOC”); and

      

      (c)  Acknowledges that the
Employee shall be limiting the availability of certain remedies that the
Employee may have against TRH and limiting also the Employee’s ability to pursue
certain claims against the Releasees.

      

      Notwithstanding
the above, nothing in Section V of this Agreement shall prevent the Employee
from:

      

      (x)  Initiating or causing to
be initiated on his or her behalf any complaint, charge, claim or proceeding
against the Company before any local, state or federal agency, court or other
body challenging the validity of the waiver of his or her claims under the ADEA
contained in Section IV of this Agreement (but no other portion of such waiver),
or

      

      (y)  Initiating or
participating in an investigation or proceeding conducted by the
EEOC.

      

      VI.
Time to Consider

      

      The payments and benefits payable to
the Employee under this Agreement include consideration provided to Employee
over and above anything of value to which the Employee already is
entitled.  The Employee acknowledges that the Employee has been
advised that the Employee has 21 days from the date of the Employee’s receipt of
this Agreement to consider all the provisions of this Agreement.

      

      THE EMPLOYEE FURTHER ACKNOWLEDGES THAT
THE EMPLOYEE HAS READ THIS AGREEMENT CAREFULLY, HAS BEEN ADVISED BY THE COMPANY
TO, CONSULT AN ATTORNEY, AND FULLY UNDERSTANDS THAT BY SIGNING BELOW THE
EMPLOYEE IS GIVING UP CERTAIN RIGHTS WHICH THE EMPLOYEE MAY HAVE TO SUE OR
ASSERT A CLAIM AGAINST ANY OF THE RELEASEES, AS DESCRIBED IN SECTION IV OF THIS
AGREEMENT AND THE OTHER PROVISIONS HEREOF. THE EMPLOYEE ACKNOWLEDGES THAT THE
EMPLOYEE HAS NOT BEEN FORCED OR PRESSURED IN ANY MANNER WHATSOEVER TO SIGN THIS
AGREEMENT, AND THE EMPLOYEE AGREES TO ALL OF ITS TERMS VOLUNTARILY.

      

      VII.
Revocation

      

      The Employee hereby acknowledges and
understands that the Employee shall have seven days from the date of the
Employee’s execution of this Agreement to revoke this Agreement (including,
without limitation, any and all claims arising under the ADEA) by providing
written notice of revocation delivered to the General Counsel of the Company no
later than 5:00 p.m. on the seventh day after the Employee has signed the
Agreement.  Neither the Company nor any other person is obligated to
provide any benefits to the Employee pursuant to Section IV of the Plan until
eight days have passed since the Employee’s signing of this Agreement without
the Employee having revoked this Agreement.   If the Employee
revokes this Agreement pursuant to this Section, the Employee shall be deemed
not to have accepted the terms of this Agreement, and no action shall be
required of TRH under any section of this Agreement.

      

      VIII.
No Admission

      

      This Agreement does not constitute an
admission of liability or wrongdoing of any kind by the Employee or
TRH.

      

      IX.
Restrictive Covenants

      

      A. 
Non-Competition/Non-Solicitation

      

      The Employee acknowledges and
recognizes the highly competitive nature of the businesses of TRH and
accordingly agrees as follows:

      

      1. During the period commencing on the
Employee’s Termination Date and ending on the earlier of the (i) the one-year
anniversary of such date and (ii) the expiration of the “Severance Period” (as
defined in the Plan) (the “Restricted
Period”).  The Employee shall not, directly or
indirectly:

      

      (a)  Engage in any
“Competitive Business” (defined below) for the Employee’s own
account;

      

      (b)  Enter the employ of, or
render any services to, any person engaged in any Competitive
Business;

      

      (c)  Acquire a financial
interest in, or otherwise become actively involved with, any person engaged in
any Competitive Business, directly or indirectly, as an individual, partner,
shareholder, officer, director, principal, agent, trustee or consultant;
or

      

      (d)  Interfere with business
relationships between TRH and customers or suppliers of, or consultants to
TRH.

      

      2. For purposes of this Section IX, a
“Competitive Business”
means, as of any date, including during the Restricted Period, any person or
entity (including any joint venture, partnership, firm, corporation or limited
liability company) that engages in or proposes to engage in the following
activities in any geographical area in which TRH does business:

      

      (a)  The property and
casualty insurance business, including commercial insurance, business insurance,
personal insurance and specialty insurance;

      

      (b)  The life and accident
and health insurance business;

      

      (c)  The underwriting,
reinsurance, marketing or sale of (y) any form of insurance of any kind that TRH
as of such date does, or proposes to, underwrite, reinsure, market or sell (any
such form of insurance, an “TRH Insurance Product”), or
(z) any other form of insurance that is marketed or sold in competition with any
TRH Insurance Product;

      

      (d)  The investment and
financial services business, including retirement services and mutual funds
services; or

      

      (e)  Any other business that
as of such date is a direct and material competitor of one of TRH’s
businesses.

      

      3.  Notwithstanding anything
to the contrary in this Agreement, the Employee may directly or indirectly, own,
solely as an investment, securities of any person engaged in the business of TRH
which are publicly traded on a national or regional stock exchange or on the
over-the-counter market if the Employee (a) is not a controlling person of, or a
member of a group which controls, such person and (b) does not, directly or
indirectly, own one percent or more of any class of securities of such
person.

      

      4.  During the Restricted
Period, the Employee shall not, directly or indirectly, without TRH’s written
consent, hire, solicit or encourage to cease to work with TRH or any employee of
TRH

      

      5.  The Employee understands
that the provisions of this Section IX.A may limit the Employee’s ability to
earn a livelihood in a business similar to the business of TRH but the Employee
nevertheless agrees and hereby acknowledges that:

      

      (a)  Such provisions do not
impose a greater restraint than is necessary to protect the goodwill or other
business interests of TRH;

      

      (b)  Such provisions contain
reasonable limitations as to time and scope of activity to be
restrained;

      

      (c)  Such provisions are not
harmful to the general public; and

      

      (d)  Such provisions are not
unduly burdensome to the Employee.  In consideration of the foregoing
and in light of the Employee’s education, skills and abilities, the Employee
agrees that he shall not assert that, and it should not be considered that, any
provisions of Section IX.A otherwise are void, voidable or unenforceable or
should be voided or held unenforceable.

      

      6.  It is expressly
understood and agreed that, although the Employee and the Company consider the
restrictions contained in this Section IX.A to be reasonable, if a judicial
determination is made by a court of competent jurisdiction that the time or
territory or any other restriction contained in this Section IX.A or elsewhere
in this Agreement is an unenforceable restriction against the Employee, the
provisions of the Agreement shall not be rendered void but shall be deemed
amended to apply as to such maximum time and territory and to such maximum
extent as such court may judicially determine or indicate to be
enforceable.  Alternatively, if any court of competent jurisdiction
finds that any restriction contained in this Agreement is unenforceable, and
such restriction cannot be amended so as to make it enforceable, such finding
shall not affect the enforceability of any of the other restrictions contained
herein.

      

      B.  Nondisparagement

      

      The Employee agrees (whether during or
after the Employee’s employment with TRH) not to issue, circulate, publish or
utter any false or disparaging statements, remarks or rumors about TRH or the
officers, directors or managers of TRH other than to the extent reasonably
necessary in order to (a) assert a bona fide claim against TRH arising out of
the Employee’s employment with TRH, or (b) respond in a truthful and appropriate
manner to any legal process or give truthful and appropriate testimony in a
legal or regulatory proceeding.

      

      C.  Code of Conduct

      

      The Employee agrees to abide by all of
the terms of the Company’s Code of Conduct or the Director, Executive Officer
and Senior Financial Officer Code of Business Conduct and Ethics that continue
to apply after termination of employment.

      

      D.  Confidentiality/Company
Property

      

      The
Employee acknowledges that the disclosure of this Agreement or any of the terms
hereof could prejudice TRH and would be detrimental to TRH’s continuing
relationship with its employees.  Accordingly, the Employee agrees not
to discuss or divulge either the existence or contents of this Agreement to
anyone other than the Employee’s immediate family, attorneys or tax advisors,
and further agrees to use the Employee’s best efforts to ensure that none of
those individuals will reveal its existence or contents to anyone
else.  The Employee shall not, without the prior written consent of
TRH, use, divulge, disclose or make accessible to any other person, firm,
partnership, corporation or other entity, any “Confidential Information” (as
defined below), or any “Personal Information” (as defined below); provided that the Employee
may disclose such information when required to do so by a court of competent
jurisdiction, by any governmental agency having supervisory authority over the
business of TRH, as the case may be, or by any administrative body or
legislative body (including a committee thereof) with jurisdiction to order the
Employee to divulge, disclose or make accessible such information; provided, further, that in
the event that the Employee is ordered by a court or other government agency to
disclose any Confidential Information or Personal Information, the Employee
shall:

      

      (a) Promptly notify TRH of such
order;

      

      (b)  At the written request
of TRH, diligently contest such order at the sole expense of TRH;
and

      

      (c)  At the written request
of TRH, seek to obtain, at the sole expense of TRH, such confidential treatment
as may be available under applicable laws for any information disclosed under
such order.

      

      Upon the
Termination Date the Employee shall return TRH property, including, without
limitation, files, records, disks and any media containing Confidential
Information or Personal Information. For purposes of this Section
IX.D:

      

       “Confidential Information”
shall mean information concerning the financial data, strategic business plans,
product development (or other proprietary product data), customer lists,
marketing plans and other, proprietary and confidential information relating to
the business of TRH or customers, that, in any case, is not otherwise available
to the public (other than by the Employee’s breach of the terms
hereof).

      

      “Personal Information” shall
mean any information concerning the personal, social or business activities of
the officers or directors of the Company.

      

      E.  Developments

      

      Developments shall be the sole and
exclusive property of TRH. The Employee agrees to, and hereby does, assign to
TRH, without any further consideration, all of the Employee’s right, title and
interest throughout the world in and to all Developments. The Employee agrees
that all such Developments that are copyrightable may constitute works made for
hire under the copyright laws of the United States and, as such, acknowledges
that TRH is the author of such Developments and owns all of the rights comprised
in the copyright of such Developments.  The Employee hereby assigns to
TRH without any further consideration all of the rights comprised in the
copyright and other proprietary rights the Employee may have in any such
Development to the extent that it might not be considered a work made for hire.
The Employee shall make and maintain adequate and current written records of all
Developments and shall disclose all Developments promptly, fully and in writing
to the Company promptly after development of the same, and at any time upon
request.

      

      “Developments” shall mean all
discoveries, inventions, ideas, technology, formulas, designs, software,
programs, algorithms, products, systems, applications, processes, procedures,
methods and improvements and enhancements conceived, developed or otherwise made
or created or produced by the Employee alone or with others, and in any way
relating to the business or any proposed business of TRH of which the Employee
has been made aware, or the products or services of TRH of which the Employee
has been made aware, whether or not subject to patent, copyright or other
protection and whether or not reduced to tangible form, at any time during the
Employee’s employment with TRH.

      

      F.  Cooperation

      

      The Employee agrees (whether during or
after the Termination Date) to cooperate:

      

      (a) With TRH in connection with any
litigation or regulatory matters in which the Employee may have relevant
knowledge or information, and

      

      (b) With all government authorities on
matters pertaining to any investigation, litigation or administrative proceeding
pertaining to TRH.

      

      This
cooperation shall include, without limitation, the following:

      

      (x) To
meet and confer, at a time mutually convenient to the Employee and TRH, with
TRH’s designated in-house or outside attorneys for trial preparation purposes,
including answering questions, explaining factual situations, preparing to
testify, or appearing for deposition;

      

      (y) To
appear for trial and give truthful trial testimony without the need to serve a
subpoena for such appearance and testimony; and

      

      (z) To
give truthful sworn statements to TRH’s attorneys upon their request and, for
purposes of any deposition or trial testimony, to adopt TRH’s attorneys as
Employee’s own (provided that there is no
conflict of interest that would disqualify the attorneys from representing
Employee), and to accept their record instructions at deposition.

      

      The
Company agrees to reimburse Employee for reasonable out-of-pocket expenses
necessarily incurred by Employee in connection with the cooperation set forth in
this paragraph.

      

      X.
Enforcement

      

      If at any
time (a) the Employee breaches any of the provisions of this Agreement or (b)
the Plan Administrator of the Plan determines that grounds existed, on or prior
to the Termination Date, including prior to the Effective Date of the Plan, for
TRH to terminate the Employee’s employment for “Cause” (as defined in the Plan),
(y) no further payments or benefits shall be due to the Employee under this
Agreement and/or the Plan; and (z) the Employee shall be obligated to repay to
TRH, immediately and in a cash lump sum, the amount of any Severance
Installments and other Severance benefits (other than any amounts received by
the Employee under Section IV.D, E or F) previously received by the Employee
under this Agreement and/or the Plan (which shall, for the avoidance of doubt,
be calculated on a pre-tax basis); provided that the Employee
shall in all events be entitled to receive accrued wages and expense
reimbursement and accrued but unused vacation pay as set forth in Section IV.A
of the Plan.

      

      The
Employee acknowledges and agrees that TRH’s remedies at law for a breach or
threatened breach of any of the provisions of Sections IX.A, B, D and E of this
Agreement would be inadequate, and, in recognition of this fact, the Employee
agrees that, in the event of such a breach or threatened breach, in addition to
any remedies at law, TRH, without posting any bond, shall be entitled to obtain
equitable relief in the form of specific performance, temporary restraining
order, temporary or permanent injunction or any other equitable remedy which may
then be available. In addition, TRH shall be entitled to immediately cease
paying any amounts remaining due or providing any benefits to the Employee
pursuant to Section IV of the Plan upon a determination by the “Plan
Administrator” (as defined in the Plan) that the Employee has violated any
provision of Section IX of this Agreement, subject to payment of all such
amounts upon a final determination, by a court of competent jurisdiction, that
the Employee had not violated Section IX of this Agreement.

      

      XI.
General Provisions

      

      A.  No Waiver;
Severability

      

      A failure of the Company or any of the
Releasees to insist on strict compliance with any provision of this Agreement
shall not be deemed a waiver of such provision or any other provision hereof. If
any provision of this Agreement is determined to be so broad as to be
unenforceable, such provision shall be interpreted to be only so broad as is
enforceable, and in the event that any provision is determined to be entirely
unenforceable, such provision shall be deemed severable, such that all other
provisions of this Agreement shall remain valid and binding upon the Employee
and the Releasees.

      

      B.  Governing Law

      

      THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE WHOLLY PERFORMED WITHIN THAT STATE, WITHOUT REGARD TO
ITS CONFLICT OF LAWS PROVISIONS OR THE CONFLICT OF LAWS PROVISIONS OF ANY OTHER
JURISDICTION WHICH WOULD CAUSE THE APPLICATION OF ANY LAW OTHER THAN THAT OF THE
STATE OF NEW YORK. THE EMPLOYEE CONSENTS TO THE EXCLUSIVE JURISDICTION OF THE
FEDERAL AND STATE COURTS IN NEW YORK.

      

      C.  Entire
Agreement/Counterparts

      

      This Agreement constitutes the entire
understanding and agreement between the Company and the Employee with regard to
all matters herein. There are no other agreements, conditions, or
representations, oral or written, express or implied, with regard
thereto.  This Agreement may be amended only in writing, signed by the
parties hereto.  This Agreement may be signed in counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.

      

      D.  Notice

      

      For the purpose of this Agreement,
notices and all other communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given if delivered: (a)
personally; (b) by overnight courier service; (c) by facsimile transmission; or
(d) by United States registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses, as set forth below, or to such other
address as either party may have furnished to the other in writing in accordance
herewith; provided that
notice of change of address shall be effective only upon
receipt.  Notices shall be deemed given as follows: (x) notices sent
by personal delivery or overnight courier shall be deemed given when delivered;
(y) notices sent by facsimile transmission shall be deemed given upon the
sender’s receipt of confirmation of complete transmission; and (z) notices sent
by United States registered mail shall be deemed given two days after the date
of deposit in the United States mail.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      If to
Executive, to the address as shall most currently appear on the records of the
Company.

      

      

      If to the
Company, to:

      

      Transatlantic
Holdings, Inc.

      80 Pine
Street

      New York,
NY 10005

      Fax:
212-248-0965

      Attn:
General Counsel

      

      Attn:
______________________________

      

      IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the
day and year first above written.

      

      EMPLOYEE

       

      
        

        
          	
                  By:

                	
                  ______________________________

                

        

        
          	
                   
      

                	
                  Name:

                

        

        
          	
                   
      

                	
                  Title:

                

TRANSATLANTIC
HOLDINGS, INC.

      

      

      
        

        
          	
                  By:

                	
                  ______________________________

                

        

        
          	
                   
      

                	
                  Name:

                

        

        
          	
                   
      

                	
                  Title:

                

      

      
      

      
      

      
      

       

      
        	
                By:

              	
                ______________________________

              

      

      
        	
                 
      

              	
                Name:

              

      

      
        	
                 
      

              	
                Title:

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