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CONVERTIBLE NOTES INDENTURE

Convertible Promissory Note
CONVERTIBLE NOTES INDENTURE | Document Parties: CHESAPEAKE ENERGY CORP | CARMEN ACQUISITION, LLC | CHESAPEAKE APPALACHIA, LLC | CHESAPEAKE ENERGY CORPORATION | CHESAPEAKE ENERGY LOUISIANA CORPORATION | CHESAPEAKE ENERGY MARKETING, INC | CHESAPEAKE EXPLORATION, LLC You are currently viewing:
This Convertible Promissory Note involves

CHESAPEAKE ENERGY CORP | CARMEN ACQUISITION, LLC | CHESAPEAKE APPALACHIA, LLC | CHESAPEAKE ENERGY CORPORATION | CHESAPEAKE ENERGY LOUISIANA CORPORATION | CHESAPEAKE ENERGY MARKETING, INC | CHESAPEAKE EXPLORATION, LLC

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Title: CONVERTIBLE NOTES INDENTURE
Governing Law: New York     Date: 5/29/2008
Industry: Oil and Gas Operations     Sector: Energy

CONVERTIBLE NOTES INDENTURE, Parties: chesapeake energy corp , carmen acquisition llc , chesapeake appalachia llc , chesapeake energy corporation , chesapeake energy louisiana corporation , chesapeake energy marketing inc , chesapeake exploration llc
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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

 
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