Document:

ex4-3.htm

     

    Exhibit
      4.3

     

     

     

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

       

      TRANSFERS
        OF THIS SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART,
        TO
        NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S
        NOMINEE.

       

      CSX
        CORPORATION

      

      

      $500,000,000

      6.250%
        NOTES DUE 2018

       

      
        
          	No.
                  R-1 	
                  CUSIP
                    No. 126408GM9 

                

        

      

       

       

      This
        security (the “Security”) is one
        of a duly authorized issue of securities (herein called the “Securities”) of CSX
        Corporation, a Virginia corporation (hereinafter called the “Company,” which
        term includes any successor corporation under the Indenture hereinafter referred
        to), issued and to be issued in one or more series under an indenture, unlimited
        as to aggregate principal amount, dated as of August 1, 1990 between the
        Company and The Bank of New York Trust Company, N.A., successor to JPMorgan
        Chase Bank, N.A., formerly known as The Chase Manhattan Bank, as Trustee
        (herein
        called the “Trustee,” which term includes any successor trustee under the
        Indenture (as hereinafter defined)), as supplemented by a First Supplemental
        Indenture dated as of June 15, 1991, a Second Supplemental Indenture dated
        as of
        May 6, 1997, a Third Supplemental Indenture dated as of April 22, 1998, a
        Fourth
        Supplemental Indenture dated as of October 30, 2001, a Fifth Supplemental
        Indenture dated as of October 27, 2003, a Sixth Supplemental Indenture dated
        as
        of September 23, 2004, and a Seventh Supplemental Indenture dated as of April
        25, 2007, to which indenture and all indentures supplemental thereto (the
        indenture, as supplemented being herein called the “Indenture”) reference is
        hereby made for a statement of the respective rights thereunder of the Company,
        the Trustee and the Holders of the Securities and of the terms upon which
        the
        Securities are, and are to be, authenticated and delivered.  This
        Security is one of the series designated on the face hereof, which series
        has
        been issued in an initial aggregate principal amount of $500,000,000 (FIVE
        HUNDRED MILLION DOLLARS). All Securities of this series need not be issued
        at
        the same time and such series may be reopened at any time, without the consent
        of any Holder, for issuances of additional Securities of this
        series.  Any such additional Securities of this series will have the
        same interest rate, maturity and other terms as those initially
        issued.  Further Securities of this series may also be authenticated
        and delivered as provided by Sections 304, 305, 306 or 906 of the Indenture.
        This Security represents an aggregate initial principal amount of $500,000,000
        (FIVE HUNDRED MILLION DOLLARS) (as adjusted from time to time in accordance
        with
        the terms and provisions hereof and as set forth on Exhibit A hereto, the
        “Principal Amount”) of the Securities of such series, with the Interest Payment
        Dates, date of original issuance, and date of Maturity specified herein and
        bearing interest on said Principal Amount at the interest rate specified
        herein.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      The
        Company, for value received, hereby
        promises to pay CEDE & CO., or its registered assigns, the principal sum of
        $500,000,000 (FIVE HUNDRED MILLION DOLLARS) on March 15, 2013 and to pay
        interest (computed on the basis of a 360-day year of twelve 30-day months)
        thereon from September 7, 2007 or from the most recent Interest Payment Date
        to
        which interest has been paid or duly provided for, or, if the date of this
        Security is an Interest Payment Date to which interest has been paid or duly
        provided for, then from the date hereof, semiannually in arrears on March
        15 and
        September 15 of each year, commencing March 15, 2008, and at Maturity at
        the
        rate of 6.250% per annum, until the principal hereof is paid or duly made
        available for payment.  The Company shall pay interest on overdue
        principal and premium, if any, and (to the extent lawful) interest on overdue
        installments of interest at the rate per annum borne by the
        Security.  The interest so payable, and punctually paid or duly
        provided for, on any Interest Payment Date will, as provided in such Indenture,
        be paid to the Person in whose name this Security (or one or more Predecessor
        Securities) is registered at the close of business on the Regular Record
        Date
        for such interest, which shall be the February 15 or August 15 (whether or
        not a
        Business Day), as the case may be, next preceding such Interest Payment
        Date.  Except as otherwise provided in the Indenture, any such
        interest not so punctually paid or duly provided for shall forthwith cease
        to be
        payable to the Holder on such Regular Record Date and may be paid to the
        Person
        in whose name this Security (or one or more Predecessor Securities) is
        registered at the close of business on a Special Record Date to be fixed
        by the
        Trustee for the payment of such Defaulted Interest, notice whereof shall
        be
        given to the Holder of this Security not less than 10 days prior to such
        Special
        Record Date, or may be paid at any time in any other lawful manner not
        inconsistent with the requirements of any securities exchange or automated
        quotation system on which the Securities of this series may be listed or
        quoted,
        and upon such notice as may be required by such exchange or system, all as
        more
        fully provided in such Indenture.  Notwithstanding the foregoing,
        interest payable on this Security at Maturity will be payable to the person
        to
        whom principal is payable.

       

      This
        Security is exchangeable in whole
        or from time to time in part for definitive Registered Securities of this
        series
        only as provided in this paragraph.  If (x) the Depository with
        respect to the Securities of this series (the “Depository”) notifies the Company
        that it is unwilling, unable or ineligible to continue as Depository for
        this
        Security or if at any time the Depository ceases to be a clearing agency
        registered under the Securities Exchange Act of 1934, as amended, and a
        successor Depository is not appointed by the Company within 90 days, (y)
        the
        Company in its sole discretion determines that this Security shall be
        exchangeable for definitive Registered Securities and executes and delivers
        to
        the Trustee a Company Order providing that this Security shall be so
        exchangeable or (z) there shall have happened and be continuing an Event
        of
        Default or any event which, after notice or lapse of time, or both, would
        become
        an Event of Default with respect to the Securities of the series of which
        this
        Security is a part, this Security or any portion hereof shall, in the case
        of
        clause (x) above, be exchanged for definitive Registered Securities of this
        series, and in the case of clauses (y) and (z) above, be exchangeable for
        definitive Registered Securities of this series, provided that the definitive
        Security so issued in exchange for this Security shall be in authorized
        denominations and be of like tenor and of an equal aggregate principal amount
        as
        the portion of the Security to be exchanged, and provided further that, in
        the
        case of clauses (y) and (z) above, definitive Registered Securities of this
        series will be issued in exchange for this Security, or any portion hereof,
        only
        if such definitive Registered Securities were requested by written notice
        to the
        Security Registrar by or on behalf of a Person who is a beneficial owner
        of an
        interest herein given through the Holder hereof.  Any definitive
        Registered Security of this series issued in exchange for this Security,
        or any
        portion hereof, shall be registered in the name or names of such Person or
        Persons as the Holder hereof shall instruct the Security
        Registrar.  Except as provided above, owners of beneficial interests
        in this Security will not be entitled to receive physical delivery of Securities
        in definitive form and will not be considered the Holders thereof for any
        purpose under the Indenture.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      Any
        exchange of this Security or
        portion hereof for one or more definitive Registered Securities of this series
        will be made at the New York office of the Security Registrar or at the office
        of any transfer agent designated by the Company for that
        purpose.  Upon exchange of any portion of this Security for one or
        more definitive Registered Securities of this series, the Trustee shall endorse
        Exhibit A of this Security to reflect the reduction of its Principal Amount
        by
        an amount equal to the aggregate principal amount of the definitive Registered
        Securities of this series so issued in exchange, whereupon the Principal
        Amount
        hereof shall be reduced for all purposes by the amount so exchanged and
        noted.  Except as otherwise provided herein or in the Indenture, until
        exchanged in full for one or more definitive Registered Securities of this
        series, this Security shall in all respects be subject to and entitled to
        the
        same benefits and conditions under the Indenture as a duly authenticated
        and
        delivered definitive Registered Security of this series.

       

      The
        principal and any interest in
        respect of any portion of this Security payable in respect of an Interest
        Payment Date or at the Stated Maturity thereof, in each case occurring prior
        to
        the exchange of such portion for a definitive Registered Security or Securities
        of this series, will be paid, as provided herein, to the Holder hereof which
        will undertake in such circumstances to credit any such principal and interest
        received by it in respect of this Security to the respective accounts of
        the
        Persons who are the beneficial owners of such interests on such Interest
        Payment
        Date or at Stated Maturity.  If a definitive Registered Security or
        Registered Securities of this series are issued in exchange for any portion
        of
        this Security after the close of business at the office or agency where such
        exchange occurs on (i) any Regular Record Date and before the opening of
        business at such office or agency on the relevant Interest Payment Date,
        or (ii)
        any Special Record Date and before the opening of business at such office
        or
        agency on the related proposed date for payment of Defaulted Interest, then
        interest or Defaulted Interest, as the case may be, will not be payable on
        such
        Interest Payment Date or proposed date for payment, as the case may be, in
        respect of such Registered Security, but will be payable on such Interest
        Payment Date or proposed date for payment, as the case may be, only to the
        Holder hereof, and the Holder hereof will undertake in such circumstances
        to
        credit such interest to the account or accounts of the Persons who were the
        beneficial owners of such portion of this Security on such Regular Record
        Date
        or Special Record Date, as the case may be.

       

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      Payment
        of the principal of and any
        such interest on this Security will be made at the offices of the Trustee
        as
        Paying Agent, in the Borough of Manhattan, The City of New York, or at such
        other office or agency of the Company as may be designated by it for such
        purpose in the Borough of Manhattan, The City of New York, in such coin or
        currency of the United States of America as at the time of payment shall
        be
        legal tender for the payment of public and private debts by check mailed
        to the
        registered Holders thereof; provided, however, that at the option
        of the Holder, payment of interest may be made by wire transfer of immediately
        available funds to an account of the Person entitled hereto as such account
        shall be provided to the Security Registrar and shall appear in the Security
        Register.

       

      The
        Securities shall be redeemable, in
        whole or in part, at the Company’s option at any time.  The Redemption
        Price for the Securities to be redeemed shall equal the greater of the following
        amounts, plus, in each case, accrued interest thereon to the Redemption
        Date:

      

      
        	
                 

              	
                ·

              	
                100%
                  of the principal amount of such Securities;
                  or

              

      

       

      
        	
                 

              	
                ·

              	
                As
                  determined by the Independent Investment Banker (as defined below),
                  the
                  sum of the present values of the remaining scheduled payments of
                  principal
                  and interest on the Securities (not including any portion of any
                  payments
                  of interest accrued from the most recent Interest Payment Date
                  to which
                  interest has been paid to the Redemption Date) discounted to the
                  Redemption Date on a semiannual basis at the Adjusted Treasury
                  Rate (as
                  defined below) plus 30 basis
                  points.

              

      

       

      The
        Redemption Price shall be calculated by the Independent Investment Banker
        assuming a 360-day year consisting of twelve 30-day months.

      

      “Adjusted
        Treasury Rate” means, with
        respect to any Redemption Date:

      

      
        	
                 

              	
                ·

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

              

      

       

      
        	
                 

              	
                ·

              	
                If
                  such release (or any successor release) is not published during
                  the week
                  preceding the calculation date or does not contain such yields,
                  the rate
                  per annum equal to the semiannual equivalent yield to maturity
                  of the
                  Comparable Treasury Issue, assuming a price for the Comparable
                  Treasury
                  Issue (expressed as a percentage of its principal amount) equal
                  to the
                  Comparable Treasury Price for such Redemption
                  Date.

              

      

       

       

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      The
        Adjusted Treasury Rate shall be
        calculated on the third Business Day preceding the Redemption
        Date.  The Company shall notify the Trustee, in an Officers’
Certificate, of the Redemption Price no later than the second Business Day
        preceding the Redemption Date. The Officers’ Certificate shall set forth the
        Redemption Price both as an aggregate amount for all the Securities to be
        redeemed and as an amount per $1,000.00 in principal amount of the Securities
        to
        be redeemed, subject to a minimum $2,000.00 denomination as set forth
        below.

      

      “Comparable
        Treasury Issue” means the
        U.S. Treasury security selected by the Independent Investment Banker as having
        a
        maturity comparable to the remaining term of the Securities to be redeemed
        that
        would be utilized, at the time of selection and in accordance with customary
        financial practice, in pricing new issues of corporate debt securities of
        comparable maturity to the remaining term of such Securities.

      

      “Comparable
        Treasury Price” means, with
        respect to any Redemption Date, (A) the average of five Reference Treasury
        Dealer Quotations for such Redemption Date, after excluding the highest and
        lowest such Reference Treasury Dealer Quotations, or (B) if the Independent
        Investment Banker obtains fewer than five such Reference Treasury Dealer
        Quotations, the average of all such quotations.

      

      “Independent
        Investment Banker” means
        Credit Suisse and its successors, or if that firm is unwilling or unable
        to
        serve in that capacity, an independent investment and banking institution
        of
        national standing appointed by the Company.

      

      “Reference
        Treasury Dealer”
means:

      

      
        	
                 

              	
                ·

              	
                Barclays
                  Capital, Credit Suisse and UBS Investment Bank and their successors;
                  provided that, if any ceases to be a primary U.S. Government securities
                  dealer in the United States (“Primary Treasury Dealer”), the Company will
                  substitute another Primary Treasury Dealer;
                  and

              

      

      
        	
                 

              	
                ·

              	
                Up
                  to four other Primary Treasury Dealers selected by the
                  Company.

              

      

      

      “Reference
        Treasury Dealer Quotation”
means, with respect to each Reference Treasury Dealer and any Redemption
        Date,
        the average, as determined by the Independent Investment Banker, of the bid
        and
        asked prices for the Comparable Treasury Issue (expressed in each case as
        a
        percentage of its principal amount) quoted in writing to the Independent
        Investment Banker by such Reference Treasury Dealer at 5:00 p.m. (New York
        City
        time) on the third business day preceding such Redemption Date.

      

      Notice
        of redemption shall be given as
        provided in Section 1104 of the Indenture; provided, that such notice shall
        not
        be required to include the Redemption Price but shall instead include the
        manner
        of calculation of the Redemption Price.  If the Company elects to
        partially redeem the Securities, the Trustee will select in a fair and
        appropriate manner the Securities to be redeemed.

       

       

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      

      Unless
        the Company defaults in payment
        of the Redemption Price, on and after the Redemption Date interest will cease
        to
        accrue on the Securities or portions thereof called for redemption.

      

      If
        an Event of Default with respect to
        Securities of this series shall occur and be continuing, the principal of
        the
        Securities of this series (including this Security and the interests represented
        hereby) may be declared due and payable in the manner and with the effect
        provided in the Indenture. Upon payment (i) of the amount of principal so
        declared due and payable and (ii) of interest on any overdue principal and
        overdue interest (in each case to the extent that the payment of such interest
        shall be legally enforceable), all of the Company’s obligations in respect of
        the payment of the principal of and any interest on the Securities of this
        series (including this Security and the interests represented hereby) shall
        terminate.

       

      If
        a Change of Control Repurchase Event
        occurs, unless the Company have exercised the Company’s right to redeem the
“Securities” as described above, the Company will be required to make an offer
        to each holder of the “Securities” to repurchase all or any part (equal to
        $2,000 or an integral multiple of $1,000 in excess thereof) of that holder’s
“Securities” at a repurchase price in cash equal to 101% of the aggregate
        principal amount of the “Securities” repurchased plus any accrued and unpaid
        interest on the “Securities” repurchased to, but not including, the date of
        repurchase.  Within 30 days following any Change of Control Repurchase
        Event or, at the Company’s option, prior to any Change of Control, but after the
        public announcement of the Change of Control, the Control will mail a notice
        to
        each holder, with a copy to the Trustee, describing the transaction or
        transactions that constitute or may constitute the Change of Control Repurchase
        Event and offering to repurchase the “Securities” on the payment date specified
        in the notice, which date will be no earlier than 30 days and no later than
        60
        days from the date such notice is mailed.  The notice shall, if mailed
        prior to the date of consummation of the Change of Control, state that the
        offer
        to purchase is conditioned on a Change of Control Repurchase Event occurring
        on
        or prior to the payment date specified in the notice.  The Company
        will comply with the requirements of Rule 14e-1 under the Exchange Act, and
        any
        other securities laws and regulations thereunder to the extent those laws
        and
        regulations are applicable in connection with the repurchase of the “Securities”
as a result of a Change of Control Repurchase Event.  To the extent
        that the provisions of any securities laws or regulations conflict with the
        Change of Control Repurchase Event provisions of the “Securities”, the Company
        will comply with the applicable securities laws and regulations and will
        not be
        deemed to have breached the Company’s obligations under the Change of Control
        Repurchase Event provisions of the “Securities” by virtue of such
        conflict.

       

      On
        the repurchase date following a
        Change of Control Repurchase Event, the Company will, to the extent
        lawful:

       

      
        	
                 

              	
                (1)

              	
                accept
                  for payment all the “Securities” or portions of the “Securities” properly
                  tendered pursuant to the Company’s
                  offer;

              

      

       

      
        	
                 

              	
                (2)

              	
                deposit
                  with the paying agent an amount equal to the aggregate purchase
                  price in
                  respect of all the “Securities” or portions of the “Securities” properly
                  tendered; and

              

      

       

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

       

      
        	
                 

              	
                (3)

              	
                deliver
                  or cause to be delivered to the Trustee the “Securities” properly
                  accepted, together with an officers’ certificate stating the aggregate
                  principal amount of the “Securities” being purchased by the
                  Company.

              

      

       

      The
        paying agent will promptly mail to
        each holder of the “Securities” properly tendered the purchase price for the
“Securities”, and the Trustee will promptly authenticate and mail (or cause to
        be transferred by book-entry) to each holder a new note equal in principal
        amount to any unpurchased portion of any “Securities” surrendered; provided that
        each new note will be in a principal amount of $2,000 or an integral multiple
        of
        $1,000 in excess thereof.

       

      The
        Company will not be required to
        make an offer to repurchase the “Securities” upon a Change of Control Repurchase
        Event if a third party makes such an offer in the manner, at the times and
        otherwise in compliance with the requirements for an offer made by the Company
        and such third party purchases all the “Securities” properly tendered and not
        withdrawn under its offer.

       

      For
        purposes of the foregoing
        description of a repurchase at the option of holders, the following definitions
        are applicable:

       

      “Below
        Investment Grade Ratings Event”
means that on any day within the 60-day period (which period shall be extended
        so long as the rating of the “Securities” is under publicly announced
        consideration for a possible downgrade by any of the Rating Agencies) after
        the
        earlier of (1) the occurrence of a Change of Control; or (2) public notice
        of
        the occurrence of a Change of Control or the intention by CSX to effect a
        Change
        of Control, the “Securities” are rated below Investment Grade by each of the
        Rating Agencies. Notwithstanding the foregoing, a Below Investment Grade
        Ratings
        Event otherwise arising by virtue of a particular reduction in rating shall
        not
        be deemed to have occurred in respect of a particular Change of Control (and
        thus shall not be deemed a Below Investment Grade Ratings Event for purposes
        of
        the definition of Change of Control Repurchase Event hereunder) if the Rating
        Agencies making the reduction in rating to which this definition would otherwise
        apply do not announce or publicly confirm or inform the Trustee in writing
        at
        its request that the reduction was the result, in whole or in part, of any
        event
        or circumstance comprised of or arising as a result of, or in respect of,
        the
        applicable Change of Control (whether or not the applicable Change of Control
        shall have occurred at the time of the ratings event).

       

      “Change
        of Control” means the
        consummation of any transaction (including, without limitation, any merger
        or
        consolidation) the result of which is that any “person” (as that term is used in
        Section 13(d)(3) of the Exchange Act), other than CSX or the Company’s
        subsidiaries, becomes the beneficial owner (as defined in Rules 13d-3 and
        13d-5
        under the Exchange Act), directly or indirectly, of more than 50% of the
        combined voting power of the Company’s Voting Stock or other Voting Stock into
        which the Company’s Voting Stock is reclassified, consolidated, exchanged or
        changed measured by voting power rather than number of shares.

       

      “Change
        of Control Repurchase Event”
means the occurrence of both a Change of Control and a Below Investment Grade
        Ratings Event.

       

      “Fitch”
means
        Fitch Ratings
        Ltd.

       

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      “Investment
        Grade” means a rating of
        Baa3 or better by Moody’s (or its equivalent under any successor rating
        categories of Moody’s); a rating of BBB- or better by S&P or Fitch (or its
        equivalent under any successor rating categories of S&P and Fitch); or the
        equivalent Investment Grade credit rating from any additional Rating Agency
        or
        Rating Agencies selected by the Company.

       

      “Moody’s”
means
        Moody’s Investors
        Service Inc.

       

      “Rating
        Agency” means (1) each of
        Moody’s, S&P and Fitch; and (2) if any of Moody’s, S&P or Fitch ceases
        to rate the “Securities” or fails to make a rating of the “Securities” publicly
        available for reasons outside of the Company’s control, a “nationally recognized
        statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F)
        under the Exchange Act, selected by the Company (as certified by a resolution
        of
        the Chief Executive Officer or Chief Financial Officer) as a replacement
        agency
        for Moody’s, S&P or Fitch, or all of them, as the case may be.

       

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

       

      “Voting
        Stock” of any specified
“person” (as that term is used in Section 13(d)(3) of the Exchange Act) as of
        any date means the capital stock of such person that is at the time entitled
        to
        vote generally in the election of the board of directors of such
        person.

       

      The
        Indenture contains provisions for
        defeasance at any time of (a) the entire indebtedness of the Company on this
        Security and (b) certain restrictive covenants and the related defaults and
        Events of Default, upon compliance with certain conditions set forth therein,
        which provisions shall apply to this Security.

       

      The
        provisions of Article Fourteen of
        the Indenture apply to Securities of this series.

       

      The
        Indenture permits, with certain
        exceptions as therein provided, the amendment thereof and the modification
        of
        the rights and obligations of the Company and the rights of the Holders of
        the
        Securities of each series to be affected under the Indenture at any time
        by the
        Company and the Trustee with the consent of the Holders of a majority in
        aggregate principal amount of the Securities at the time Outstanding of each
        series affected thereby.  The Indenture also contains provisions
        permitting the Holders of specified percentages in aggregate principal amount
        of
        the Securities of each series at the time Outstanding on behalf of the Holders
        of all Securities of such series to waive compliance by the Company with
        certain
        provisions of the Indenture and certain past defaults under the Indenture
        and
        their consequences.  Any such consent or waiver by the Holder of this
        Security shall be conclusive and binding upon such Holder and upon all future
        Holders of this Security  and the Persons who are beneficial owners of
        interests represented hereby, and of any Security issued in exchange herefor
        or
        in lieu hereof whether or not notation of such consent or waiver is made
        upon
        this Security.

       

      As
        set forth in, and subject to, the
        provisions of the Indenture, no Holder of any Security of this series will
        have
        any right to institute any proceeding with respect to the Indenture or for
        any
        remedy thereunder, unless such Holder shall have previously given to the
        Trustee
        written notice of a continuing Event of Default with respect to the Securities
        of this series, the Holders of not less than 25% in aggregate principal amount
        of the Outstanding Securities of this series shall have made written request,
        and offered reasonable indemnity, to the Trustee to institute such proceeding
        as
        trustee, and the Trustee shall not have received from the Holders of a majority
        in aggregate principal amount of the Outstanding Securities of this series
        a
        direction inconsistent with such request and shall have failed to institute
        such
        proceeding within 60 days; provided, however, that such limitations do not
        apply
        to a suit instituted by the Holder hereof for the enforcement of payment
        of the
        principal of (and premium, if any) or interest on this Security on or after
        the
        respective due dates expressed herein.

       

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      No
        reference herein to the Indenture
        and no provision of this Security or of the Indenture shall alter or impair
        the
        obligation of the Company, which is absolute and unconditional to pay the
        principal of (and premium, if any) and interest on this Security at the time,
        place and rate, and in the coin or currency, herein prescribed.

       

      As
        provided in the Indenture and
        subject to certain limitations therein and herein set forth, the transfer
        of
        Registered Securities of the series of which this Security is a part may
        be
        registered on the Security Register of the Company, upon surrender of such
        Securities for registration of transfer at the office of the Security Registrar,
        duly endorsed by, or accompanied by a written instrument of transfer in form
        satisfactory to the Company and the Security Registrar duly executed by the
        Holder thereof or his attorney duly authorized in writing, and thereupon
        one or
        two more new Securities of this Series and of like tenor, of authorized
        denominations and for the same aggregate principal amount, will be issued
        to the
        designated transferee or transferees.

       

      No
        service charge shall be made for any
        such registration of transfer or exchange of Securities as provided above,
        but
        the Company may require payment of a sum sufficient to cover any tax or other
        governmental charge payable in connection therewith.

       

      Prior
        to due presentment of this
        Security for registration of transfer, the Company, the Trustee and any agent
        of
        the Company or the Trustee may treat the Person in whose name this Security
        is
        registered as the owner hereof for all purposes, whether or not this Security
        be
        overdue, and neither the Company, the Trustee nor any such agent shall be
        affected by notice to the contrary.

       

      The
        Securities of this series of which
        this Security is a part are issuable only in registered form without coupons,
        in
        denominations of $2,000.00 and integral multiples of $1,000.00.  As
        provided in the Indenture and subject to certain limitations therein set
        forth,
        the Securities of this series are exchangeable for a like aggregate principal
        amount of Securities of this series and of like tenor of a different authorized
        denomination, as requested by the Holder surrendering the same.

       

      The
        Securities of this series shall be
        dated the date of their authentication.

       

      All
        terms used in this Security which
        are defined in the Indenture shall have the meanings assigned to them in
        the
        Indenture.

       

      Unless
        the certificate of
        authentication hereon has been executed by or on behalf of the Trustee under
        the
        Indenture, or its successor thereunder, by the manual signature of one of
        its
        authorized officers, this Security shall not be entitled to any benefit under
        the Indenture or be valid or obligatory for any purpose.

       

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      

      IN
        WITNESS WHEREOF, the Company has
        caused this instrument to be duly executed under its corporate
        seal.

       

      

      Dated:  September
        7,
        2007                                                                                                                     
CSX CORPORATION

       

       

       

      
        
          
            
              	 	 
	
                      By:

                    	 /s/
                      David
                      H. Baggs	 
	 	
                      Name:

                    	
                      David
                        H. Baggs

                    	 
	 	
                      Title:

                    	
                      Assistant
                        Vice President-Capital Markets

                    	 

            

          

           

        

      

      
 

      
 

      Attest:

       

          
/s/
        Nathan D. Goldman                        

      
                                           
          Assistant Corporate Secretary

      

      

      

       

      
        
          	STATE
                  OF  New York 	 
	 	)
                  ss.: 
	COUNTY/CITY
                  OF  New York 	 

        

      

       

       

      Before
        me, a Notary Public in and for
        said State and County/City, personally appeared Mr. David H. Baggs, personally
        known to me or proved to me on the basis of satisfactory evidence to be the
        person whose name is subscribed to the within instrument and acknowledged
        to me
        that he executed the same in his authorized capacity, and that by his signature
        on the instrument, the company on behalf of which he acted executed the
        instrument.

      

      WITNESS
        my hand and official seal this
        7th day of September, 2007, in the State and County/City aforesaid.

       

       

      
         

         ___________________________________________________

        Notary
          Public in and for the State and County/City aforesaid

      

      
         

        
 

        My
          commission
          expires:                                           
/s/ Brian M. Budnick        

         

        Printed
          Name of Notary
          Public:                           Brian
          M. Budnick

        Notary
          Public, State of New York

        No.
          01BU6158389

        Qualified
          in New York County

        Commission
          Expires January 2, 2011

        

      

       

       

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      

      TRUSTEE’S
        CERTIFICATE OF AUTHENTICATION

       

      This
        is one of the Securities of a
        series issued under the Indenture described herein.

       

      

                                                      
        THE BANK OF NEW YORK TRUST

                                                    COMPANY,
        N.A.

                                                      
        as Trustee

       

                                                      
        By:__________________________________________________

                                                                                       Authorized
        Officer

       

       

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      FORM
        OF
        TRANSFER NOTICE

       

      FOR
        VALUE RECEIVED the undersigned
        registered holder hereby sell(s), assign(s) and transfer(s) unto

       

      Insert
        Taxpayer Identification No.

       

      
        
          
            

          

        

        Please
          print or typewrite name and address including zip code of assignee

         

        
          
            

          

        

      

      the
        within Security and all rights thereunder, hereby irrevocably constituting
        and
        appointing

       

      
        _______________________________________________
          attorney to transfer said Security on the books of the Security Registrar
          with
          full power of substitution in the premises.

      

       

       

      
        
          	 Date:_________________________	 
	 	NOTICE:  The
                  signature to this assignment must correspond with the name as written
                  upon
                  the face of the within-mentioned instrument in every particular,
                  without
                  alteration or any change
                  whatsoever. 

        

      

       

       

       

       

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        A

       

      Schedule
        of Exchanges

       

       

       

       

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

       

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

      
         

        TRANSFERS
          OF THIS SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART,
          TO
          NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S
          NOMINEE.

         

        CSX
          CORPORATION

        

        

        $100,000,000

        6.250%
          NOTES DUE 2018

         

         

        
          	No.
                  R-2 	
                  CUSIP
                    No. 126408GM9 

                

        

         

         

        This
          security (the “Security”) is one
          of a duly authorized issue of securities (herein called the “Securities”) of CSX
          Corporation, a Virginia corporation (hereinafter called the “Company,” which
          term includes any successor corporation under the Indenture hereinafter
          referred
          to), issued and to be issued in one or more series under an indenture,
          unlimited
          as to aggregate principal amount, dated as of August 1, 1990 between the
          Company and The Bank of New York Trust Company, N.A., successor to JPMorgan
          Chase Bank, N.A., formerly known as The Chase Manhattan Bank, as Trustee
          (herein
          called the “Trustee,” which term includes any successor trustee under the
          Indenture (as hereinafter defined)), as supplemented by a First Supplemental
          Indenture dated as of June 15, 1991, a Second Supplemental Indenture dated
          as of
          May 6, 1997, a Third Supplemental Indenture dated as of April 22, 1998,
          a Fourth
          Supplemental Indenture dated as of October 30, 2001, a Fifth Supplemental
          Indenture dated as of October 27, 2003, a Sixth Supplemental Indenture
          dated as
          of September 23, 2004, and a Seventh Supplemental Indenture dated as of
          April
          25, 2007, to which indenture and all indentures supplemental thereto (the
          indenture, as supplemented being herein called the “Indenture”) reference is
          hereby made for a statement of the respective rights thereunder of the
          Company,
          the Trustee and the Holders of the Securities and of the terms upon which
          the
          Securities are, and are to be, authenticated and delivered.  This
          Security is one of the series designated on the face hereof, which series
          has
          been issued in an initial aggregate principal amount of $100,000,000 (ONE
          HUNDRED MILLION DOLLARS). All Securities of this series need not be issued
          at
          the same time and such series may be reopened at any time, without the
          consent
          of any Holder, for issuances of additional Securities of this
          series.  Any such additional Securities of this series will have the
          same interest rate, maturity and other terms as those initially
          issued.  Further Securities of this series may also be authenticated
          and delivered as provided by Sections 304, 305, 306 or 906 of the Indenture.
          This Security represents an aggregate initial principal amount of $100,000,000
          (ONE HUNDRED MILLION DOLLARS) (as adjusted from time to time in accordance
          with
          the terms and provisions hereof and as set forth on Exhibit A hereto, the
          “Principal Amount”) of the Securities of such series, with the Interest Payment
          Dates, date of original issuance, and date of Maturity specified herein
          and
          bearing interest on said Principal Amount at the interest rate specified
          herein.

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        The
          Company, for value received, hereby
          promises to pay CEDE & CO., or its registered assigns, the principal sum of
          $100,000,000 (ONE HUNDRED MILLION DOLLARS) on March 15, 2013 and to pay
          interest
          (computed on the basis of a 360-day year of twelve 30-day months) thereon
          from
          September 7, 2007 or from the most recent Interest Payment Date to which
          interest has been paid or duly provided for, or, if the date of this Security
          is
          an Interest Payment Date to which interest has been paid or duly provided
          for,
          then from the date hereof, semiannually in arrears on March 15 and September
          15
          of each year, commencing March 15, 2008, and at Maturity at the rate of
          6.250%
          per annum, until the principal hereof is paid or duly made available for
          payment.  The Company shall pay interest on overdue principal and
          premium, if any, and (to the extent lawful) interest on overdue installments
          of
          interest at the rate per annum borne by the Security.  The interest so
          payable, and punctually paid or duly provided for, on any Interest Payment
          Date
          will, as provided in such Indenture, be paid to the Person in whose name
          this
          Security (or one or more Predecessor Securities) is registered at the close
          of
          business on the Regular Record Date for such interest, which shall be the
          February 15 or August 15 (whether or not a Business Day), as the case may
          be,
          next preceding such Interest Payment Date.  Except as otherwise
          provided in the Indenture, any such interest not so punctually paid or
          duly
          provided for shall forthwith cease to be payable to the Holder on such
          Regular
          Record Date and may be paid to the Person in whose name this Security (or
          one or
          more Predecessor Securities) is registered at the close of business on
          a Special
          Record Date to be fixed by the Trustee for the payment of such Defaulted
          Interest, notice whereof shall be given to the Holder of this Security
          not less
          than 10 days prior to such Special Record Date, or may be paid at any time
          in
          any other lawful manner not inconsistent with the requirements of any securities
          exchange or automated quotation system on which the Securities of this
          series
          may be listed or quoted, and upon such notice as may be required by such
          exchange or system, all as more fully provided in such
          Indenture.  Notwithstanding the foregoing, interest payable on this
          Security at Maturity will be payable to the person to whom principal is
          payable.

         

        This
          Security is exchangeable in whole
          or from time to time in part for definitive Registered Securities of this
          series
          only as provided in this paragraph.  If (x) the Depository with
          respect to the Securities of this series (the “Depository”) notifies the Company
          that it is unwilling, unable or ineligible to continue as Depository for
          this
          Security or if at any time the Depository ceases to be a clearing agency
          registered under the Securities Exchange Act of 1934, as amended, and a
          successor Depository is not appointed by the Company within 90 days, (y)
          the
          Company in its sole discretion determines that this Security shall be
          exchangeable for definitive Registered Securities and executes and delivers
          to
          the Trustee a Company Order providing that this Security shall be so
          exchangeable or (z) there shall have happened and be continuing an Event
          of
          Default or any event which, after notice or lapse of time, or both, would
          become
          an Event of Default with respect to the Securities of the series of which
          this
          Security is a part, this Security or any portion hereof shall, in the case
          of
          clause (x) above, be exchanged for definitive Registered Securities of
          this
          series, and in the case of clauses (y) and (z) above, be exchangeable for
          definitive Registered Securities of this series, provided that the definitive
          Security so issued in exchange for this Security shall be in authorized
          denominations and be of like tenor and of an equal aggregate principal
          amount as
          the portion of the Security to be exchanged, and provided further that,
          in the
          case of clauses (y) and (z) above, definitive Registered Securities of
          this
          series will be issued in exchange for this Security, or any portion hereof,
          only
          if such definitive Registered Securities were requested by written notice
          to the
          Security Registrar by or on behalf of a Person who is a beneficial owner
          of an
          interest herein given through the Holder hereof.  Any definitive
          Registered Security of this series issued in exchange for this Security,
          or any
          portion hereof, shall be registered in the name or names of such Person
          or
          Persons as the Holder hereof shall instruct the Security
          Registrar.  Except as provided above, owners of beneficial interests
          in this Security will not be entitled to receive physical delivery of Securities
          in definitive form and will not be considered the Holders thereof for any
          purpose under the Indenture.

         

         

        
          
            
            

          

          
            2

            
              

            

          

          
            
            

          

        

         

        Any
          exchange of this Security or
          portion hereof for one or more definitive Registered Securities of this
          series
          will be made at the New York office of the Security Registrar or at the
          office
          of any transfer agent designated by the Company for that
          purpose.  Upon exchange of any portion of this Security for one or
          more definitive Registered Securities of this series, the Trustee shall
          endorse
          Exhibit A of this Security to reflect the reduction of its Principal Amount
          by
          an amount equal to the aggregate principal amount of the definitive Registered
          Securities of this series so issued in exchange, whereupon the Principal
          Amount
          hereof shall be reduced for all purposes by the amount so exchanged and
          noted.  Except as otherwise provided herein or in the Indenture, until
          exchanged in full for one or more definitive Registered Securities of this
          series, this Security shall in all respects be subject to and entitled
          to the
          same benefits and conditions under the Indenture as a duly authenticated
          and
          delivered definitive Registered Security of this series.

         

        The
          principal and any interest in
          respect of any portion of this Security payable in respect of an Interest
          Payment Date or at the Stated Maturity thereof, in each case occurring
          prior to
          the exchange of such portion for a definitive Registered Security or Securities
          of this series, will be paid, as provided herein, to the Holder hereof
          which
          will undertake in such circumstances to credit any such principal and interest
          received by it in respect of this Security to the respective accounts of
          the
          Persons who are the beneficial owners of such interests on such Interest
          Payment
          Date or at Stated Maturity.  If a definitive Registered Security or
          Registered Securities of this series are issued in exchange for any portion
          of
          this Security after the close of business at the office or agency where
          such
          exchange occurs on (i) any Regular Record Date and before the opening of
          business at such office or agency on the relevant Interest Payment Date,
          or (ii)
          any Special Record Date and before the opening of business at such office
          or
          agency on the related proposed date for payment of Defaulted Interest,
          then
          interest or Defaulted Interest, as the case may be, will not be payable
          on such
          Interest Payment Date or proposed date for payment, as the case may be,
          in
          respect of such Registered Security, but will be payable on such Interest
          Payment Date or proposed date for payment, as the case may be, only to
          the
          Holder hereof, and the Holder hereof will undertake in such circumstances
          to
          credit such interest to the account or accounts of the Persons who were
          the
          beneficial owners of such portion of this Security on such Regular Record
          Date
          or Special Record Date, as the case may be.

         

         

        
          
            
            

          

          
            3

            
              

            

          

          
            
            

          

        

         

        Payment
          of the principal of and any
          such interest on this Security will be made at the offices of the Trustee
          as
          Paying Agent, in the Borough of Manhattan, The City of New York, or at
          such
          other office or agency of the Company as may be designated by it for such
          purpose in the Borough of Manhattan, The City of New York, in such coin
          or
          currency of the United States of America as at the time of payment shall
          be
          legal tender for the payment of public and private debts by check mailed
          to the
          registered Holders thereof; provided, however, that at the option
          of the Holder, payment of interest may be made by wire transfer of immediately
          available funds to an account of the Person entitled hereto as such account
          shall be provided to the Security Registrar and shall appear in the Security
          Register.

         

        The
          Securities shall be redeemable, in
          whole or in part, at the Company’s option at any time.  The Redemption
          Price for the Securities to be redeemed shall equal the greater of the
          following
          amounts, plus, in each case, accrued interest thereon to the Redemption
          Date:

        

        
          	
                   

                	
                  ·

                	
                  100%
                    of the principal amount of such Securities;
                    or

                

        

         

        
          	
                   

                	
                  ·

                	
                  As
                    determined by the Independent Investment Banker (as defined below),
                    the
                    sum of the present values of the remaining scheduled payments
                    of principal
                    and interest on the Securities (not including any portion of
                    any payments
                    of interest accrued from the most recent Interest Payment Date
                    to which
                    interest has been paid to the Redemption Date) discounted to
                    the
                    Redemption Date on a semiannual basis at the Adjusted Treasury
                    Rate (as
                    defined below) plus 30 basis
                    points.

                

        

         

        The
          Redemption Price shall be calculated by the Independent Investment Banker
          assuming a 360-day year consisting of twelve 30-day months.

        

        “Adjusted
          Treasury Rate” means, with
          respect to any Redemption Date:

        

        
          	
                   

                	
                  ·

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

                

        

         

        
          	
                   

                	
                  ·

                	
                  If
                    such release (or any successor release) is not published during
                    the week
                    preceding the calculation date or does not contain such yields,
                    the rate
                    per annum equal to the semiannual equivalent yield to maturity
                    of the
                    Comparable Treasury Issue, assuming a price for the Comparable
                    Treasury
                    Issue (expressed as a percentage of its principal amount) equal
                    to the
                    Comparable Treasury Price for such Redemption
                    Date.

                

        

         

         

         

        
          
            
            

          

          
            4

            
              

            

          

          
            
            

          

        

         

        The
          Adjusted Treasury Rate shall be
          calculated on the third Business Day preceding the Redemption
          Date.  The Company shall notify the Trustee, in an Officers’
Certificate, of the Redemption Price no later than the second Business
          Day
          preceding the Redemption Date. The Officers’ Certificate shall set forth the
          Redemption Price both as an aggregate amount for all the Securities to
          be
          redeemed and as an amount per $1,000.00 in principal amount of the Securities
          to
          be redeemed, subject to a minimum $2,000.00 denomination as set forth
          below.

        

        “Comparable
          Treasury Issue” means the
          U.S. Treasury security selected by the Independent Investment Banker as
          having a
          maturity comparable to the remaining term of the Securities to be redeemed
          that
          would be utilized, at the time of selection and in accordance with customary
          financial practice, in pricing new issues of corporate debt securities
          of
          comparable maturity to the remaining term of such Securities.

        

        “Comparable
          Treasury Price” means, with
          respect to any Redemption Date, (A) the average of five Reference Treasury
          Dealer Quotations for such Redemption Date, after excluding the highest
          and
          lowest such Reference Treasury Dealer Quotations, or (B) if the Independent
          Investment Banker obtains fewer than five such Reference Treasury Dealer
          Quotations, the average of all such quotations.

        

        “Independent
          Investment Banker” means
          Credit Suisse and its successors, or if that firm is unwilling or unable
          to
          serve in that capacity, an independent investment and banking institution
          of
          national standing appointed by the Company.

        

        “Reference
          Treasury Dealer”
means:

        

        
          	
                   

                	
                  ·

                	
                  Barclays
                    Capital, Credit Suisse and UBS Investment Bank and their successors;
                    provided that, if any ceases to be a primary U.S. Government
                    securities
                    dealer in the United States (“Primary Treasury Dealer”), the Company will
                    substitute another Primary Treasury Dealer;
                    and

                

        

        
          	
                   

                	
                  ·

                	
                  Up
                    to four other Primary Treasury Dealers selected by the
                    Company.

                

        

        

        “Reference
          Treasury Dealer Quotation”
means, with respect to each Reference Treasury Dealer and any Redemption
          Date,
          the average, as determined by the Independent Investment Banker, of the
          bid and
          asked prices for the Comparable Treasury Issue (expressed in each case
          as a
          percentage of its principal amount) quoted in writing to the Independent
          Investment Banker by such Reference Treasury Dealer at 5:00 p.m. (New York
          City
          time) on the third business day preceding such Redemption Date.

        

        Notice
          of redemption shall be given as
          provided in Section 1104 of the Indenture; provided, that such notice shall
          not
          be required to include the Redemption Price but shall instead include the
          manner
          of calculation of the Redemption Price.  If the Company elects to
          partially redeem the Securities, the Trustee will select in a fair and
          appropriate manner the Securities to be redeemed.

         

         

        
          
            
            

          

          
            5

            
              

            

          

          
            
            

          

        

         

        Unless
          the Company defaults in payment
          of the Redemption Price, on and after the Redemption Date interest will
          cease to
          accrue on the Securities or portions thereof called for redemption.

        

        If
          an Event of Default with respect to
          Securities of this series shall occur and be continuing, the principal
          of the
          Securities of this series (including this Security and the interests represented
          hereby) may be declared due and payable in the manner and with the effect
          provided in the Indenture. Upon payment (i) of the amount of principal
          so
          declared due and payable and (ii) of interest on any overdue principal
          and
          overdue interest (in each case to the extent that the payment of such interest
          shall be legally enforceable), all of the Company’s obligations in respect of
          the payment of the principal of and any interest on the Securities of this
          series (including this Security and the interests represented hereby) shall
          terminate.

         

        If
          a Change of Control Repurchase Event
          occurs, unless the Company have exercised the Company’s right to redeem the
“Securities” as described above, the Company will be required to make an offer
          to each holder of the “Securities” to repurchase all or any part (equal to
          $2,000 or an integral multiple of $1,000 in excess thereof) of that holder’s
“Securities” at a repurchase price in cash equal to 101% of the aggregate
          principal amount of the “Securities” repurchased plus any accrued and unpaid
          interest on the “Securities” repurchased to, but not including, the date of
          repurchase.  Within 30 days following any Change of Control Repurchase
          Event or, at the Company’s option, prior to any Change of Control, but after the
          public announcement of the Change of Control, the Control will mail a notice
          to
          each holder, with a copy to the Trustee, describing the transaction or
          transactions that constitute or may constitute the Change of Control Repurchase
          Event and offering to repurchase the “Securities” on the payment date specified
          in the notice, which date will be no earlier than 30 days and no later
          than 60
          days from the date such notice is mailed.  The notice shall, if mailed
          prior to the date of consummation of the Change of Control, state that
          the offer
          to purchase is conditioned on a Change of Control Repurchase Event occurring
          on
          or prior to the payment date specified in the notice.  The Company
          will comply with the requirements of Rule 14e-1 under the Exchange Act,
          and any
          other securities laws and regulations thereunder to the extent those laws
          and
          regulations are applicable in connection with the repurchase of the “Securities”
as a result of a Change of Control Repurchase Event.  To the extent
          that the provisions of any securities laws or regulations conflict with
          the
          Change of Control Repurchase Event provisions of the “Securities”, the Company
          will comply with the applicable securities laws and regulations and will
          not be
          deemed to have breached the Company’s obligations under the Change of Control
          Repurchase Event provisions of the “Securities” by virtue of such
          conflict.

         

        On
          the repurchase date following a
          Change of Control Repurchase Event, the Company will, to the extent
          lawful:

         

        
          	
                   

                	
                  (1)

                	
                  accept
                    for payment all the “Securities” or portions of the “Securities” properly
                    tendered pursuant to the Company’s
                    offer;

                

        

         

        
          	
                   

                	
                  (2)

                	
                  deposit
                    with the paying agent an amount equal to the aggregate purchase
                    price in
                    respect of all the “Securities” or portions of the “Securities” properly
                    tendered; and

                

        

         

         

        
          
            
            

          

          
            6

            
              

            

          

          
            
            

          

        

         

        
          	
                   

                	
                  (3)

                	
                  deliver
                    or cause to be delivered to the Trustee the “Securities” properly
                    accepted, together with an officers’ certificate stating the aggregate
                    principal amount of the “Securities” being purchased by the
                    Company.

                

        

         

        The
          paying agent will promptly mail to
          each holder of the “Securities” properly tendered the purchase price for the
“Securities”, and the Trustee will promptly authenticate and mail (or cause to
          be transferred by book-entry) to each holder a new note equal in principal
          amount to any unpurchased portion of any “Securities” surrendered; provided that
          each new note will be in a principal amount of $2,000 or an integral multiple
          of
          $1,000 in excess thereof.

         

        The
          Company will not be required to
          make an offer to repurchase the “Securities” upon a Change of Control Repurchase
          Event if a third party makes such an offer in the manner, at the times
          and
          otherwise in compliance with the requirements for an offer made by the
          Company
          and such third party purchases all the “Securities” properly tendered and not
          withdrawn under its offer.

         

        For
          purposes of the foregoing
          description of a repurchase at the option of holders, the following definitions
          are applicable:

         

        “Below
          Investment Grade Ratings Event”
means that on any day within the 60-day period (which period shall be extended
          so long as the rating of the “Securities” is under publicly announced
          consideration for a possible downgrade by any of the Rating Agencies) after
          the
          earlier of (1) the occurrence of a Change of Control; or (2) public notice
          of
          the occurrence of a Change of Control or the intention by CSX to effect
          a Change
          of Control, the “Securities” are rated below Investment Grade by each of the
          Rating Agencies. Notwithstanding the foregoing, a Below Investment Grade
          Ratings
          Event otherwise arising by virtue of a particular reduction in rating shall
          not
          be deemed to have occurred in respect of a particular Change of Control
          (and
          thus shall not be deemed a Below Investment Grade Ratings Event for purposes
          of
          the definition of Change of Control Repurchase Event hereunder) if the
          Rating
          Agencies making the reduction in rating to which this definition would
          otherwise
          apply do not announce or publicly confirm or inform the Trustee in writing
          at
          its request that the reduction was the result, in whole or in part, of
          any event
          or circumstance comprised of or arising as a result of, or in respect of,
          the
          applicable Change of Control (whether or not the applicable Change of Control
          shall have occurred at the time of the ratings event).

         

        “Change
          of Control” means the
          consummation of any transaction (including, without limitation, any merger
          or
          consolidation) the result of which is that any “person” (as that term is used in
          Section 13(d)(3) of the Exchange Act), other than CSX or the Company’s
          subsidiaries, becomes the beneficial owner (as defined in Rules 13d-3 and
          13d-5
          under the Exchange Act), directly or indirectly, of more than 50% of the
          combined voting power of the Company’s Voting Stock or other Voting Stock into
          which the Company’s Voting Stock is reclassified, consolidated, exchanged or
          changed measured by voting power rather than number of shares.

         

        “Change
          of Control Repurchase Event”
means the occurrence of both a Change of Control and a Below Investment
          Grade
          Ratings Event.

         

        “Fitch”
means
          Fitch Ratings
          Ltd.

         

        
          
            
            

          

          
            7

            
              

            

          

          
            
            

          

        

         

        “Investment
          Grade” means a rating of
          Baa3 or better by Moody’s (or its equivalent under any successor rating
          categories of Moody’s); a rating of BBB- or better by S&P or Fitch (or its
          equivalent under any successor rating categories of S&P and Fitch); or the
          equivalent Investment Grade credit rating from any additional Rating Agency
          or
          Rating Agencies selected by the Company.

         

        “Moody’s”
means
          Moody’s Investors
          Service Inc.

         

        “Rating
          Agency” means (1) each of
          Moody’s, S&P and Fitch; and (2) if any of Moody’s, S&P or Fitch ceases
          to rate the “Securities” or fails to make a rating of the “Securities” publicly
          available for reasons outside of the Company’s control, a “nationally recognized
          statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F)
          under the Exchange Act, selected by the Company (as certified by a resolution
          of
          the Chief Executive Officer or Chief Financial Officer) as a replacement
          agency
          for Moody’s, S&P or Fitch, or all of them, as the case may be.

         

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

         

        “Voting
          Stock” of any specified
“person” (as that term is used in Section 13(d)(3) of the Exchange Act) as of
          any date means the capital stock of such person that is at the time entitled
          to
          vote generally in the election of the board of directors of such
          person.

         

        The
          Indenture contains provisions for
          defeasance at any time of (a) the entire indebtedness of the Company on
          this
          Security and (b) certain restrictive covenants and the related defaults
          and
          Events of Default, upon compliance with certain conditions set forth therein,
          which provisions shall apply to this Security.

         

        The
          provisions of Article Fourteen of
          the Indenture apply to Securities of this series.

         

        The
          Indenture permits, with certain
          exceptions as therein provided, the amendment thereof and the modification
          of
          the rights and obligations of the Company and the rights of the Holders
          of the
          Securities of each series to be affected under the Indenture at any time
          by the
          Company and the Trustee with the consent of the Holders of a majority in
          aggregate principal amount of the Securities at the time Outstanding of
          each
          series affected thereby.  The Indenture also contains provisions
          permitting the Holders of specified percentages in aggregate principal
          amount of
          the Securities of each series at the time Outstanding on behalf of the
          Holders
          of all Securities of such series to waive compliance by the Company with
          certain
          provisions of the Indenture and certain past defaults under the Indenture
          and
          their consequences.  Any such consent or waiver by the Holder of this
          Security shall be conclusive and binding upon such Holder and upon all
          future
          Holders of this Security  and the Persons who are beneficial owners of
          interests represented hereby, and of any Security issued in exchange herefor
          or
          in lieu hereof whether or not notation of such consent or waiver is made
          upon
          this Security.

         

        As
          set forth in, and subject to, the
          provisions of the Indenture, no Holder of any Security of this series will
          have
          any right to institute any proceeding with respect to the Indenture or
          for any
          remedy thereunder, unless such Holder shall have previously given to the
          Trustee
          written notice of a continuing Event of Default with respect to the Securities
          of this series, the Holders of not less than 25% in aggregate principal
          amount
          of the Outstanding Securities of this series shall have made written request,
          and offered reasonable indemnity, to the Trustee to institute such proceeding
          as
          trustee, and the Trustee shall not have received from the Holders of a
          majority
          in aggregate principal amount of the Outstanding Securities of this series
          a
          direction inconsistent with such request and shall have failed to institute
          such
          proceeding within 60 days; provided, however, that such limitations do
          not apply
          to a suit instituted by the Holder hereof for the enforcement of payment
          of the
          principal of (and premium, if any) or interest on this Security on or after
          the
          respective due dates expressed herein.

         

        
          
            
            

          

          
            8

            
              

            

          

          
            
            

          

        

         

        No
          reference herein to the Indenture
          and no provision of this Security or of the Indenture shall alter or impair
          the
          obligation of the Company, which is absolute and unconditional to pay the
          principal of (and premium, if any) and interest on this Security at the
          time,
          place and rate, and in the coin or currency, herein prescribed.

         

        As
          provided in the Indenture and
          subject to certain limitations therein and herein set forth, the transfer
          of
          Registered Securities of the series of which this Security is a part may
          be
          registered on the Security Register of the Company, upon surrender of such
          Securities for registration of transfer at the office of the Security Registrar,
          duly endorsed by, or accompanied by a written instrument of transfer in
          form
          satisfactory to the Company and the Security Registrar duly executed by
          the
          Holder thereof or his attorney duly authorized in writing, and thereupon
          one or
          two more new Securities of this Series and of like tenor, of authorized
          denominations and for the same aggregate principal amount, will be issued
          to the
          designated transferee or transferees.

         

        No
          service charge shall be made for any
          such registration of transfer or exchange of Securities as provided above,
          but
          the Company may require payment of a sum sufficient to cover any tax or
          other
          governmental charge payable in connection therewith.

         

        Prior
          to due presentment of this
          Security for registration of transfer, the Company, the Trustee and any
          agent of
          the Company or the Trustee may treat the Person in whose name this Security
          is
          registered as the owner hereof for all purposes, whether or not this Security
          be
          overdue, and neither the Company, the Trustee nor any such agent shall
          be
          affected by notice to the contrary.

         

        The
          Securities of this series of which
          this Security is a part are issuable only in registered form without coupons,
          in
          denominations of $2,000.00 and integral multiples of $1,000.00.  As
          provided in the Indenture and subject to certain limitations therein set
          forth,
          the Securities of this series are exchangeable for a like aggregate principal
          amount of Securities of this series and of like tenor of a different authorized
          denomination, as requested by the Holder surrendering the same.

         

        The
          Securities of this series shall be
          dated the date of their authentication.

         

        All
          terms used in this Security which
          are defined in the Indenture shall have the meanings assigned to them in
          the
          Indenture.

         

        Unless
          the certificate of
          authentication hereon has been executed by or on behalf of the Trustee
          under the
          Indenture, or its successor thereunder, by the manual signature of one
          of its
          authorized officers, this Security shall not be entitled to any benefit
          under
          the Indenture or be valid or obligatory for any purpose.

         

        
          
            
            

          

          
            9

            
              

            

          

          
            
            

          

        

         

        
           

          

          IN
            WITNESS WHEREOF, the Company has
            caused this instrument to be duly executed under its corporate
            seal.

           

          

          Dated:  September
            7,
            2007                                                                                                                     
CSX CORPORATION

           

           

           

          
            
              
                
                  	 	 
	
                          By:

                        	 /s/
                          David
                          H. Baggs	 
	 	
                          Name:

                        	
                          David
                            H. Baggs

                        	 
	 	
                          Title:

                        	
                          Assistant
                            Vice President-Capital Markets

                        	 

                

              

               

            

          

          
 

          Attest:

           

           

          
            
                   
                /s/ Nathan D.
                Goldman                                                                                   
 

                                                
                Assistant Corporate Secretary

            

          

           

          

          

          

           

          
            
              	STATE
                      OF  New York 	 
	 	)
                      ss.: 
	COUNTY/CITY
                      OF  New York 	 

            

          

           

           

          Before
            me, a Notary Public in and for
            said State and County/City, personally appeared Mr. David H. Baggs, personally
            known to me or proved to me on the basis of satisfactory evidence to
            be the
            person whose name is subscribed to the within instrument and acknowledged
            to me
            that he executed the same in his authorized capacity, and that by his
            signature
            on the instrument, the company on behalf of which he acted executed the
            instrument.

          

          WITNESS
            my hand and official seal this
            7th day of September, 2007, in the State and County/City aforesaid.

           

          
             

             ___________________________________________________

            Notary
              Public in and for the State and County/City
              aforesaid

          
             

             

            My
              commission
              expires:                                           
/s/ Brian M. Budnick        

             

            Printed
              Name of Notary
              Public:                           Brian
              M. Budnick

            Notary
              Public, State of New York

            No.
              01BU6158389

            Qualified
              in New York County

            Commission
              Expires January 2, 2011

          

           

          
            
              
              

            

            
              10

              
                

              

            

            
              
              

            

          

          
 

          TRUSTEE’S
            CERTIFICATE OF AUTHENTICATION

           

          This
            is one of the Securities of a
            series issued under the Indenture described herein.

           

          

                                              
                                                          
THE BANK OF NEW YORK TRUST

                                                        COMPANY,
            N.A.

                                                          
            as Trustee

           

                                                          
            By:__________________________________________________

                                                                                           Authorized
            Officer

           

           

           

          
            
              
              

            

            
              11

              
                

              

            

            
              
              

            

          

           

          FORM
            OF
            TRANSFER NOTICE

           

          FOR
            VALUE RECEIVED the undersigned
            registered holder hereby sell(s), assign(s) and transfer(s) unto

           

          Insert
            Taxpayer Identification No.

           

          
            
              
                

              

            

            Please
              print or typewrite name and address including zip code of assignee

             

            
              
                

              

            

          

          the
            within Security and all rights thereunder, hereby irrevocably constituting
            and
            appointing

           

          
            _______________________________________________
              attorney to transfer said Security on the books of the Security Registrar
              with
              full power of substitution in the premises.

          

           

           

          
            
              	 Date:_________________________	 
	 	NOTICE:  The
                      signature to this assignment must correspond with the name
                      as written upon
                      the face of the within-mentioned instrument in every particular,
                      without
                      alteration or any change
                      whatsoever. 

            

          

           

           

           

           

           

          
            
              
              

            

            
              12

              
                

              

            

            
              
              

            

          

           

          EXHIBIT
            A

           

          Schedule
            of Exchanges

           

           

           

           

           

           

          13clesb-2083007ex41.htm

    Exhibit
      4.1

    
 

    NEITHER
      THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE
      BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
      COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
      THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
      MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
      STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
      OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
      SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
      EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
      SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY
      AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED
      IN
      CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH
      SECURITIES.

    

    Original
      Issue Date: April 16, 2007

    Original
      Conversion Price (subject to adjustment herein):
$5,770.48

     

    $__________

     

    SERIES
      A CONVERTIBLE DEBENTURE

    DUE
      APRIL 16, 2010

    

    THIS
      SERIES A CONVERTIBLE DEBENTURE is one of a series of duly authorized and validly
      issued convertible debentures of SRS Energy, Inc., a Delaware corporation (the
      “Company”), designated as its Series A Convertible Debenture, due April
      16, 2010 (this debenture, the “Debenture” and collectively with the other
      such series of debentures, the “Debentures”).

    

    FOR
      VALUE
      RECEIVED, the Company promises to pay to ____________ or its registered assigns
      (the “Holder”), or shall have paid pursuant to the terms hereunder, the
      principal sum of $_________ by April 16, 2010, or such earlier date as this
      Debenture is required or permitted to be repaid as provided hereunder (the
      “Maturity Date”), and to pay interest to the Holder on the aggregate
      unconverted and then outstanding principal amount of this Debenture in
      accordance with the provisions hereof. This Debenture is subject to the
      following additional provisions:

    

    Section
      1.  Definitions.  For the purposes hereof, in addition
      to the terms defined elsewhere in this Debenture, capitalized terms not
      otherwise defined herein shall have the meanings set forth in the Purchase
      Agreement and the following terms shall have the following
      meanings:

    

    “Bankruptcy
      Event” means any of the following events: (a) the Company or any subsidiary
      thereof commences a case or other proceeding under any bankruptcy,
      reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
      insolvency or liquidation or similar law of any jurisdiction relating to the
      Company or any subsidiary thereof; (b) there is commenced against the Company
      or
      any subsidiary thereof any such case or proceeding that is not dismissed within
      60 days after commencement; (c) the Company or any subsidiary thereof is
      adjudicated insolvent or bankrupt or any order of relief or other order
      approving any such case or proceeding is entered; (d) the Company or any
      subsidiary thereof suffers any appointment of any custodian or the like for
      it
      or any substantial part of its property that is not discharged or stayed within
      60 calendar days after such appointment; (e) the Company or any subsidiary
      thereof makes a general assignment for the benefit of creditors; or (f) the
      Company or any Significant Subsidiary thereof, by any act or failure to act,
      expressly indicates its consent to, approval of or acquiescence in any of the
      foregoing or takes any corporate or other action for the purpose of effecting
      any of the foregoing.

    

    “Change
      of Control Transaction” means the occurrence after the date hereof of any of
      the following events: (a) an acquisition after the date hereof by an individual
      or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under
      the Exchange Act) of effective control (whether through legal or beneficial
      ownership of capital stock of the Company, by contract or otherwise) of in
      excess of 33% of the voting securities of the Company (other than by means
      of
      conversion or exercise of the Debentures and the Securities issued together
      with
      the Debentures); (b) the Company merges into or consolidates with any other
      Person, or any Person merges into or consolidates with the Company and, after
      giving effect to such transaction, the stockholders of the Company immediately
      prior to such transaction own less than 66% of the aggregate voting power of
      the
      Company or the successor entity of such transaction; (c) the Company sells
      or
      transfers all or substantially all of its assets to another Person and the
      stockholders of the Company immediately prior to such transaction own less
      than
      66% of the aggregate voting power of the acquiring entity immediately after
      the
      transaction; (d) a replacement at one time or within a three year period of
      more
      than one-half of the members of the Company’s board of directors that is not
      approved by a majority of those individuals who are members of the board of
      directors on the date hereof (or by those individuals who are serving as members
      of the board of directors on any date whose nomination to the board of directors
      was approved by a majority of the members of the board of directors who are
      members on the date hereof); or (e) the execution by the Company of an agreement
      to which the Company is a party or by which it is bound, providing for any
      of
      the events set forth in clauses (a) through (d) above.

    

    “Common
      Stock” means the common stock no par value of the Company and stock of any
      other class of securities into which such common stock may hereafter be
      reclassified or changed into.

    

    “Conversion
      Shares” means, collectively, the shares of Common Stock issuable upon
      conversion of this Debenture in accordance with the terms hereof.

    

    “Effectiveness
      Period” shall have the meaning set forth in the Registration Rights
      Agreement.

    

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

    

    “Interest
      Conversion Rate” means the lesser of (a) the Conversion Price or (b) the 90%
      of the lesser of (i) the average of the VWAPs for the 10 consecutive Trading
      Days ending on the Trading Day that is immediately prior to the applicable
      Interest Payment Date or (ii) the average of the VWAPs for the 10 consecutive
      Trading Days ending on the Trading Day that is immediately prior to the date
      the
      applicable Interest Conversion Shares are issued and delivered if after the
      Interest Payment Date.

    

    “Original
      Issue Date” means the date of the first issuance of the Debentures,
      regardless of any transfers of any Debenture and regardless of the number of
      instruments which may be issued to evidence such Debentures.

    

    “Person”
      means an individual or corporation, partnership, trust, incorporated or
      unincorporated association, joint venture, limited liability company, joint
      stock company, government (or an agency or subdivision thereof) or other entity
      of any kind.

     

    “Purchase
      Agreement” means the Debenture Purchase Agreement among the Company and the
      original Holders, dated as of April 16, 2007, as amended, modified or
      supplemented from time to time in accordance with its terms.

     

    “Registration
      Rights Agreement” means the Investors’ Rights Agreement among the Company
      and the original Holders, dated as of the date of the Purchase Agreement, as
      amended, modified or supplemented from time to time in accordance with its
      terms.

    

    “Registration
      Statement” means a registration statement that registers the resale of all
      Conversion Shares and Interest Conversion Shares of the Holder, who shall be
      named as a “selling stockholder” therein, and meets the requirements of the
      Registration Rights Agreement.

    

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

    

    “Trading
      Day” means a day on which the principal Trading Market is open for
      business.

    

    “Trading
      Market” means the following markets or exchanges on which the Common Stock
      is listed or quoted for trading on the date in question: the American Stock
      Exchange, the Nasdaq Capital Market, the Nasdaq National Market or the New
      York
      Stock Exchange.

    

    “VWAP”
      means, for any date, the price determined by the first of the following clauses
      that applies: (a) if the Common Stock is then listed or quoted on a Trading
      Market, the daily volume weighted average price of the Common Stock for such
      date (or the nearest preceding date) on the Trading Market on which the Common
      Stock is then listed or quoted for trading as reported by Bloomberg L.P. (based
      on a Trading Day from 8:30 a.m. (St. Louis, MO time) to 3:02 p.m. (St. Louis,
      MO
      time); (b)  if the OTC Bulletin Board is not a Trading Market, the volume
      weighted average price of the Common Stock for such date (or the nearest
      preceding date) on the OTC Bulletin Board; (c) if the Common Stock is not then
      quoted for trading on the OTC Bulletin Board and if prices for the Common Stock
      are then reported in the “Pink Sheets” published by Pink Sheets, LLC (or a
      similar organization or agency succeeding to its functions of reporting prices),
      the most recent bid price per share of the Common Stock so reported; or
      (d) in all other cases, the fair market value of a share of Common Stock as
      determined by an independent appraiser selected in good faith by the Holder
      and
      reasonably acceptable to the Company.

    

    Section
      2.  Interest.  

     

    (a)  Interest
      Accrual. Interest shall accrue on the outstanding principal balance hereof
      at an annual rate equal to six percent (6%). Interest shall be calculated on
      the
      basis of a 360-day year and the actual number of days elapsed, to the extent
      permitted by applicable law. Interest hereunder will be paid to the Holder
      or
      its assignee in whose name this Debenture is registered on the records of the
      Company regarding registration and transfers of Debentures (the “Debenture
      Register”).

    

    (b)  Interest
      Payment. The Company shall make payment of all outstanding and accrued
      interest at the Maturity Date in shares of the Company’s Common Stock or cash,
      at the Company’s election. If such Schedule Payment is made in Common
      Stock, such number of shares of the Company’s Common Stock due as payment shall
      be calculated based on the amount of interest due divided by the Conversion
      Price. Notwithstanding the foregoing, this Debenture shall become due and
      immediately payable, including all accrued but unpaid interest, upon an Event
      of
      Default.

     

    Section
      3.  No Prepayment. Except as otherwise set forth in this
      Debenture, the Company may not prepay any portion of the principal amount of
      this Debenture without the prior written consent of the Holder.

    

    Section
      4.  Conversion. 

    

    (a)  Voluntary
      Conversion. At any time after the Original Issue Date until this Debenture
      is no longer outstanding, this Debenture (principal and accrued and unpaid
      interest thereon) shall be convertible, in whole or in part, into shares of
      Common Stock at the option of the Holder, at any time and from time to time.
      The
      Holder shall effect conversions by delivering to the Company a Notice of
      Conversion, the form of which is attached hereto as Annex A (a “Notice
      of Conversion”), specifying therein the principal amount of this Debenture
      to be converted and the date on which such conversion shall be effected (a
      “Conversion Date”). If no Conversion Date is specified in a Notice of
      Conversion, the Conversion Date shall be the date that such Notice of Conversion
      is deemed delivered hereunder. To effect conversions hereunder, the Holder
      shall
      not be required to physically surrender this Debenture to the Company unless
      the
      entire principal amount of this Debenture, plus all accrued and unpaid interest
      thereon, has been so converted. Conversions hereunder shall have the effect
      of
      lowering the outstanding principal amount of this Debenture and accrued and
      unpaid interest thereon in an amount equal to the applicable conversion. The
      Holder and the Company shall maintain records showing the principal amount(s)
      converted and the date of such conversion(s). The Holder, and any
      assignee by acceptance of this Debenture, acknowledge and agree that, by reason
      of the provisions of this paragraph, following conversion of a portion of this
      Debenture, the unpaid and unconverted principal amount of this Debenture may
      be
      less than the amount stated on the face hereof.

    

    (b)  Conversion
      Price. The conversion price in effect on any Conversion Date shall be equal
      to $5,770.48 (subject to adjustment herein) (the “Conversion
      Price”).

    

    (c)  Mechanics
      of Conversion.

    

    (i)  Conversion
      Shares Issuable Upon Conversion of Principal Amount. The number of shares of
      Common Stock issuable upon a conversion hereunder shall be determined by the
      quotient obtained by dividing (A) the outstanding principal amount of this
      Debenture and accrued and unpaid interest thereon to be converted by (B) the
      Conversion Price.

    

    (ii)  Delivery
      of Certificate Upon Conversion. Not later than three Trading Days after each
      Conversion Date (the “Share Delivery Date”), the Company shall deliver,
      or cause to be delivered, to the Holder (A) a certificate or certificates
      representing the Conversion Shares representing the number of shares of Common
      Stock being acquired upon the conversion of this Debenture and (B) a bank check
      in the amount of accrued and unpaid interest (if the Company has elected or
      is
      required to pay accrued interest in cash).   On or after the
      Effective Date, the Company shall use its best efforts to deliver any
      certificate or certificates required to be delivered by the Company under this
      Section 4 electronically through the Depository Trust Company or another
      established clearing corporation performing similar functions.

    

    (iii)  Failure
      to Deliver Certificates. If in the case of any Notice of Conversion such
      certificate or certificates are not delivered to or as directed by the
      applicable Holder by the third Trading Day after the Conversion Date, the Holder
      shall be entitled to elect by written notice to the Company at any time on
      or
      before its receipt of such certificate or certificates, to rescind such
      Conversion, in which event the Company shall promptly return to the Holder
      any
      original Debenture delivered to the Company and the Holder shall promptly return
      the Common Stock certificates representing the principal amount of this
      Debenture tendered for conversion to the Company.

    

    (iv)  Obligation
      Absolute; Partial Liquidated Damages. The Company’s obligations to issue and
      deliver the Conversion Shares upon conversion of this Debenture in accordance
      with the terms hereof are absolute and unconditional, irrespective of any action
      or inaction by the Holder to enforce the same, any waiver or consent with
      respect to any provision hereof, the recovery of any judgment against any Person
      or any action to enforce the same, or any setoff, counterclaim, recoupment,
      limitation or termination, or any breach or alleged breach by the Holder or
      any
      other Person of any obligation to the Company or any violation or alleged
      violation of law by the Holder or any other Person, and irrespective of any
      other circumstance which might otherwise limit such obligation of the Company
      to
      the Holder in connection with the issuance of such Conversion Shares;
provided, however, that such delivery shall not operate as a
      waiver by the Company of any such action the Company may have against the
      Holder. In the event the Holder of this Debenture shall elect to convert any
      or
      all of the outstanding principal amount hereof, the Company may not refuse
      conversion based on any claim that the Holder or anyone associated or affiliated
      with the Holder has been engaged in any violation of law, agreement or for
      any
      other reason, unless an injunction from a court, on notice to Holder,
      restraining and or enjoining conversion of all or part of this Debenture shall
      have been sought and obtained. If the Company fails for any reason to deliver
      to
      the Holder such certificate or certificates pursuant to Section 4(c)(ii) by
      the
      Share Delivery Date, the Company shall pay to such Holder, in cash, as
      liquidated damages and not as a penalty, for each $1000 of principal amount
      being converted, $10 per Trading Day (increasing to $20 per Trading Day on
      the
      fifth Trading Day after such liquidated damages begin to accrue) for each
      Trading Day after the second Trading Day following the Share Delivery Date
      until
      such certificates are delivered. Nothing herein shall limit a Holder’s right to
      pursue actual damages or declare an Event of Default pursuant to Section 7
      hereof for the Company’s failure to deliver Conversion Shares within the period
      specified herein and such Holder shall have the right to pursue all remedies
      available to it hereunder, at law or in equity including, without limitation,
      a
      decree of specific performance and/or injunctive relief. The exercise of any
      such rights shall not prohibit the Holder from seeking to enforce damages
      pursuant to any other Section hereof or under applicable law.

    

    (v)  Compensation
      for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In
      addition to any other rights available to the Holder, if the Company fails
      for
      any reason to deliver to the Holder such certificate or certificates by two
      Trading Days following the Share Delivery Date pursuant to Section 4(c)(ii),
      and
      if after two Trading Days following such Share Delivery Date the Holder is
      required by its brokerage firm to purchase (in an open market transaction or
      otherwise) shares of Common Stock to deliver in satisfaction of a sale by such
      Holder of the Conversion Shares which the Holder was entitled to receive upon
      the conversion relating to such Share Delivery Date (a “Buy-In”), then
      the Company shall (A) pay in cash to the Holder (in addition to any other
      remedies available to or elected by the Holder) the amount by which (x) the
      Holder’s total purchase price (including any brokerage commissions) for the
      Common Stock so purchased exceeds (y) the product of (1) the aggregate number
      of
      shares of Common Stock that such Holder was entitled to receive from the
      conversion at issue multiplied by (2) the actual sale price at which the sell
      order giving rise to such purchase obligation was executed (including any
      brokerage commissions) and (B) at the option of the Holder, either reissue
      (if
      surrendered) this Debenture in a principal amount equal to the principal amount
      of the attempted conversion or deliver to the Holder the number of shares of
      Common Stock that would have been issued if the Company had timely complied
      with
      its delivery requirements under Section 4(c)(ii). The Holder shall provide
      the
      Company written notice indicating the amounts payable to the Holder in respect
      of the Buy-In and, upon request of the Company, evidence of the amount of such
      loss.

    

    (vi)  Reservation
      of Shares Issuable Upon Conversion. The Company covenants that it will at
      all times reserve and keep available out of its authorized and unissued shares
      of Common Stock for the sole purpose of issuance upon conversion of this
      Debenture and payment of interest on this Debenture, each as herein provided,
      free from preemptive rights or any other actual contingent purchase rights
      of
      Persons other than the Holder (and the other holders of the Debentures), not
      less than such aggregate number of shares of the Common Stock as shall (subject
      to the terms and conditions set forth in the Purchase Agreement) be issuable
      (taking into account the adjustments and restrictions of Section 5) upon the
      conversion of the outstanding principal amount of this Debenture and payment
      of
      interest hereunder. The Company covenants that all shares of Common Stock that
      shall be so issuable shall, upon issue, be duly authorized, validly issued,
      fully paid and nonassessable and, if the Registration Statement is then
      effective under the Securities Act, shall be registered for public sale in
      accordance with such Registration Statement.

    

    (vii)  Fractional
      Shares. Upon a conversion hereunder the Company shall not be required to
      issue stock certificates representing fractions of shares of Common Stock,
      but
      may if otherwise permitted, make a cash payment in respect of any final fraction
      of a share based on the VWAP at such time. If the Company elects not, or is
      unable, to make such a cash payment, the Holder shall be entitled to receive,
      in
      lieu of the final fraction of a share, 1 whole share of Common
      Stock.

    

    (viii)  Transfer
      Taxes. The issuance of certificates for shares of the Common Stock on
      conversion of this Debenture shall be made without charge to the Holder hereof
      for any documentary stamp or similar taxes that may be payable in respect of
      the
      issue or delivery of such certificates, provided that the Company shall not
      be
      required to pay any tax that may be payable in respect of any transfer involved
      in the issuance and delivery of any such certificate upon conversion in a name
      other than that of the Holder of this Debenture so converted and the Company
      shall not be required to issue or deliver such certificates unless or until
      the
      person or persons requesting the issuance thereof shall have paid to the Company
      the amount of such tax or shall have established to the satisfaction of the
      Company that such tax has been paid.

     

    Section
      5.  Certain Adjustments.

    

    (a)  Stock
      Dividends and Stock Splits. If the Company, at any time while this Debenture
      is outstanding: (i) pays a stock dividend or otherwise makes a distribution
      or
      distributions payable in shares of Common Stock on shares of Common Stock or
      rights, warrants, options or other securities or debt that are convertible
      into
      or exchangeable for shares of Common Stock (“Common Stock Equivalents”);
      (ii) subdivides outstanding shares of Common Stock into a larger number of
      shares; (iii) combines (including by way of a reverse stock split) outstanding
      shares of Common Stock into a smaller number of shares; or (iv) issues, in
      the
      event of a reclassification of shares of the Common Stock, any shares of capital
      stock of the Company, then the Conversion Price shall be multiplied by a
      fraction of which the numerator shall be the number of shares of Common Stock
      (excluding any treasury shares of the Company) outstanding immediately before
      such event and of which the denominator shall be the number of shares of Common
      Stock outstanding immediately after such event. Any adjustment made pursuant
      to
      this Section shall become effective immediately after the record date for the
      determination of stockholders entitled to receive such dividend or distribution
      and shall become effective immediately after the effective date in the case
      of a
      subdivision, combination or re-classification.

    

    (b)  Subsequent
      Equity Sales. If the Company or any subsidiary thereof, as applicable, at
      any time while this Debenture is outstanding, sells or grants any option to
      purchase or sells or grants any right to reprice its securities, or otherwise
      disposes of or issues (or announces any sale, grant or any option to purchase
      or
      other disposition) any Common Stock or Common Stock Equivalents entitling any
      Person to acquire shares of Common Stock at an effective price per share that
      is
      lower than the then Conversion Price (such lower price, the “Base Conversion
      Price” and such issuances collectively, a “Dilutive Issuance”) (if
      the holder of the Common Stock or Common Stock Equivalents so issued shall
      at
      any time, whether by operation of purchase price adjustments, reset provisions,
      floating conversion, exercise or exchange prices or otherwise, or due to
      warrants, options or rights per share which are issued in connection with such
      issuance, be entitled to receive shares of Common Stock at an effective price
      per share that is lower than the Conversion Price, such issuance shall be deemed
      to have occurred for less than the Conversion Price on such date of the Dilutive
      Issuance), then the Conversion Price shall be reduced to equal the Base
      Conversion Price. Such adjustment shall be made whenever such Common Stock
      or
      Common Stock Equivalents are issued. Notwithstanding the foregoing, no
      adjustment will be made under this Section 5(b) in respect of a conversion
      of
      any convertible debt existing at the Original Issue Date or the granting of
      securities to employees of the Company pursuant to an equity incentive plan
      adopted by the board of directors of the Company, provided that the
      fully-diluted aggregate number of shares of Common Stock issuable under such
      plans is equal to or less than 15% of the total issued and outstanding shares
      of
      Common Stock (collectively, “Exempt Issuances”). The Company shall notify
      the Holder in writing, no later than the business day following the issuance
      of
      any Common Stock or Common Stock Equivalents subject to this Section 5(b),
      indicating therein the applicable issuance price, or applicable reset price,
      exchange price, conversion price and other pricing terms (such notice, the
      “Dilutive Issuance Notice”). For purposes of clarification, whether or
      not the Company provides a Dilutive Issuance Notice pursuant to this Section
      5(b), upon the occurrence of any Dilutive Issuance, the Holder is entitled
      to
      receive a number of Conversion Shares based upon the Base Conversion Price
      on or
      after the date of such Dilutive Issuance, regardless of whether the Holder
      accurately refers to the Base Conversion Price in the Notice of
      Conversion.

    

    (c)  Subsequent
      Rights Offerings. If the Company, at any time while the Debenture is
      outstanding, shall issue rights, options or warrants to all holders of Common
      Stock (and not to Holders) entitling them to subscribe for or purchase shares
      of
      Common Stock at a price per share that is lower than the VWAP on the record
      date
      referenced below other than Exempt Issuances, then the Conversion Price shall
      be
      multiplied by a fraction of which the denominator shall be the number of shares
      of the Common Stock outstanding on the date of issuance of such rights or
      warrants plus the number of additional shares of Common Stock offered for
      subscription or purchase, and of which the numerator shall be the number of
      shares of the Common Stock outstanding on the date of issuance of such rights
      or
      warrants plus the number of shares which the aggregate offering price of the
      total number of shares so offered (assuming delivery to the Company in full
      of
      all consideration payable upon exercise of such rights, options or warrants)
      would purchase at such VWAP. Such adjustment shall be made whenever such rights
      or warrants are issued, and shall become effective immediately after the record
      date for the determination of stockholders entitled to receive such rights,
      options or warrants.

    

    (d)  Pro
      Rata Distributions. If the Company, at any time while this Debenture is
      outstanding, distributes to all holders of Common Stock (and not to the Holders)
      evidences of its indebtedness or assets (including cash and cash dividends)
      or
      rights or warrants to subscribe for or purchase any security (other than the
      Common Stock, which shall be subject to Section 5(b)), then in each such case
      the Conversion Price shall be adjusted by multiplying such Conversion Price
      in
      effect immediately prior to the record date fixed for determination of
      stockholders entitled to receive such distribution by a fraction of which the
      denominator shall be the VWAP determined as of the record date mentioned above,
      and of which the numerator shall be such VWAP on such record date less the
      then
      fair market value at such record date of the portion of such assets or evidence
      of indebtedness so distributed applicable to 1 outstanding share of the Common
      Stock as determined by the Board of Directors of the Company in good faith.
      In
      either case the adjustments shall be described in a statement delivered to
      the
      Holder describing the portion of assets or evidences of indebtedness so
      distributed or such subscription rights applicable to 1 share of Common Stock.
      Such adjustment shall be made whenever any such distribution is made and shall
      become effective immediately after the record date mentioned above.

    

    (e)  Fundamental
      Transaction. If, at any time while this Debenture is outstanding, (i) the
      Company effects any merger or consolidation of the Company with or into another
      Person, (ii) the Company effects any sale of all or substantially all of its
      assets in one transaction or a series of related transactions, (iii) any tender
      offer or exchange offer (whether by the Company or another Person) is completed
      pursuant to which holders of Common Stock are permitted to tender or exchange
      their shares for other securities, cash or property, or (iv) the Company effects
      any reclassification of the Common Stock or any compulsory share exchange
      pursuant to which the Common Stock is effectively converted into or exchanged
      for other securities, cash or property (in any such case, a “Fundamental
      Transaction”), then, upon any subsequent conversion of this Debenture, the
      Holder shall have the right to receive, for each Conversion Share that would
      have been issuable upon such conversion immediately prior to the occurrence
      of
      such Fundamental Transaction, the same kind and amount of securities, cash
      or
      property as it would have been entitled to receive upon the occurrence of such
      Fundamental Transaction if it had been, immediately prior to such Fundamental
      Transaction, the holder of 1 share of Common Stock (the “Alternate
      Consideration”). For purposes of any such conversion, the determination of
      the Conversion Price shall be appropriately adjusted to apply to such Alternate
      Consideration based on the amount of Alternate Consideration issuable in respect
      of 1 share of Common Stock in such Fundamental Transaction, and the Company
      shall apportion the Conversion Price among the Alternate Consideration in a
      reasonable manner reflecting the relative value of any different components
      of
      the Alternate Consideration. If holders of Common Stock are given any choice
      as
      to the securities, cash or property to be received in a Fundamental Transaction,
      then the Holder shall be given the same choice as to the Alternate Consideration
      it receives upon any conversion of this Debenture following such Fundamental
      Transaction. To the extent necessary to effectuate the foregoing provisions,
      any
      successor to the Company or surviving entity in such Fundamental Transaction
      shall issue to the Holder a new debenture consistent with the foregoing
      provisions and evidencing the Holder’s right to convert such debenture into
      Alternate Consideration. The terms of any agreement pursuant to which a
      Fundamental Transaction is effected shall include terms requiring any such
      successor or surviving entity to comply with the provisions of this Section
      5(e)
      and insuring that this Debenture (or any such replacement security) will be
      similarly adjusted upon any subsequent transaction analogous to a Fundamental
      Transaction.

    

    (f)  Calculations.
      All calculations under this Section 5 shall be made to the nearest cent or
      the
      nearest 1/100th of a share, as the case may be. For purposes of this Section
      5,
      the number of shares of Common Stock deemed to be issued and outstanding as
      of a
      given date shall be the sum of the number of shares of Common Stock (excluding
      any treasury shares of the Company) issued and outstanding.

    

    (g)  Notice
      to the Holder.

    

    (i)  Adjustment
      to Conversion Price. Whenever the Conversion Price is adjusted pursuant to
      any provision of this Section 5, the Company shall promptly mail to each Holder
      a notice setting forth the Conversion Price after such adjustment and setting
      forth a brief statement of the facts requiring such adjustment. If the Company
      issues a variable rate security, the Company shall be deemed to have issued
      Common Stock or Common Stock Equivalents at the lowest possible conversion
      or
      exercise price at which such securities may be converted or
      exercised.

    

    (ii)  Notice
      to Allow Conversion by Holder. If (A) the Company shall declare a dividend
      (or any other distribution in whatever form) on the Common Stock, (B) the
      Company shall declare a special nonrecurring cash dividend on or a redemption
      of
      the Common Stock, (C) the Company shall authorize the granting to all holders
      of
      the Common Stock of rights or warrants to subscribe for or purchase any shares
      of capital stock of any class or of any rights, (D) the approval of any
      stockholders of the Company shall be required in connection with any
      reclassification of the Common Stock, any consolidation or merger to which
      the
      Company is a party, any sale or transfer of all or substantially all of the
      assets of the Company, of any compulsory share exchange whereby the Common
      Stock
      is converted into other securities, cash or property or (E) the Company shall
      authorize the voluntary or involuntary dissolution, liquidation or winding
      up of
      the affairs of the Company, then, in each case, the Company shall cause to
      be
      filed at each office or agency maintained for the purpose of conversion of
      this
      Debenture, and shall cause to be delivered to the Holder at its last address
      as
      it shall appear upon the Debenture Register, at least 20 calendar days prior
      to
      the applicable record or effective date hereinafter specified, a notice stating
      (x) the date on which a record is to be taken for the purpose of such dividend,
      distribution, redemption, rights or warrants, or if a record is not to be taken,
      the date as of which the holders of the Common Stock of record to be entitled
      to
      such dividend, distributions, redemption, rights or warrants are to be
      determined or (y) the date on which such reclassification, consolidation,
      merger, sale, transfer or share exchange is expected to become effective or
      close, and the date as of which it is expected that holders of the Common Stock
      of record shall be entitled to exchange their shares of the Common Stock for
      securities, cash or other property deliverable upon such reclassification,
      consolidation, merger, sale, transfer or share exchange, provided that the
      failure to deliver such notice or any defect therein or in the delivery thereof
      shall not affect the validity of the corporate action required to be specified
      in such notice. The Holder is entitled to convert this Debenture during the
      20-day period commencing on the date of such notice through the effective date
      of the event triggering such notice.

    

    Section
      6.  Negative Covenants. As long as Debentures representing
      at least 51% of the aggregate principal amount of Debentures issued on the
      Original Issue Date are outstanding and without the prior written consent of
      Holders holding a majority of the then issued and outstanding Debentures, the
      Company shall not, and shall not permit any of its subsidiaries to, directly
      or
      indirectly:

    

    (a)  enter
      into, create, incur, assume, guarantee or suffer to exist any indebtedness
      for
      borrowed money senior to or having any priority over the Debentures, including
      but not limited to, a guarantee, on or with respect to any of its property
      or
      assets now owned or hereafter acquired or any interest therein or any income
      or
      profits therefrom;

    

    (b) 
      enter into, create, incur, assume or suffer to exist any liens, security
      interests or other encumbrances of any kind, on or with respect to any of its
      property or assets now owned or hereafter acquired or any interest therein
      or
      any income or profits therefrom;

    

    (c)  amend
      its charter documents, including without limitation, the certificate of
      incorporation and bylaws, in any manner that materially and adversely affects
      any rights of the Holder;

    

    (d)  repay,
      repurchase or offer to repay, repurchase or otherwise acquire more than a
deminimis number of shares of its Common Stock or Common Stock
      Equivalents;

    

    
      	
              (e)  

            	
              enter
                into any agreement with respect to any of the foregoing;
                or

            

    

    

    
      	
              (f)  

            	
              pay
                cash dividends or distributions on any equity securities of the
                Company.

            

    

    

    Section
      7.  Events of Default.

    

    (a)     “Event
      of Default” means, wherever used herein, any of the following events
      (whatever the reason for such event and whether such event shall be voluntary
      or
      involuntary or effected by operation of law or pursuant to any judgment, decree
      or order of any court, or any order, rule or regulation of any administrative
      or
      governmental body):

    

    (i)  any
      default in the payment of (A) the principal amount of any Debenture or (B)
      interest, liquidated damages and other amounts owing to a Holder on any
      Debenture, as and when the same shall become due and payable (whether on a
      Conversion Date or the Maturity Date or by acceleration or otherwise) which
      default, solely in the case of an interest payment or other default under clause
      (B) above, is not cured within three Trading Days;

    

    (ii)  the
      Company shall fail to observe or perform any other covenant or agreement
      contained in the Debentures (other than a breach by the Company of its
      obligations to deliver shares of Common Stock to the Holder upon conversion,
      which breach is addressed in clause (x) below) which failure is not cured,
      if
      possible to cure, within the earlier to occur of (A) five Trading Days after
      notice of such failure sent by the Holder or by any other Holder and (B) 10
      Trading Days after the Company has become or should have become aware of such
      failure;

    

    (iii)  a
      default or event of default (subject to any grace or cure period provided in
      the
      applicable agreement, document or instrument or any unanimous waiver thereof)
      shall occur under any other material agreement, lease, document or instrument
      to
      which the Company or any subsidiary is obligated;

    

    (iv)  any
      representation or warranty made in this Debenture, any written statement
      pursuant hereto or any other report, financial statement or certificate made
      or
      delivered to the Holder or any other Holder shall be untrue or incorrect in
      any
      material respect as of the date when made or deemed made;

    

    (v)  the
      Company or any subsidiary shall be subject to a Bankruptcy Event;

    

    (vi)    the
      Common Stock shall not be eligible for listing or quotation for trading on
      a
      Trading Market and shall not be eligible to resume listing or quotation for
      trading thereon within five Trading Days;

    

    (vii)   the
      Company
      shall be a party to any Change of Control Transaction or Fundamental Transaction
      or shall agree to sell or dispose of all or in excess of 33% of its assets
      in
      one transaction or a series of related transactions (whether or not such sale
      would constitute a Change of Control Transaction);

    

    (viii)  a
      Registration Statement shall not have been declared effective by the Commission
      on or prior to the 210th calendar
      day after
      the Closing Date;

    

    (ix)  if,
      during the Effectiveness Period (as defined in the Registration Rights
      Agreement), either (A) the effectiveness of the Registration Statement lapses
      for any reason or (B) the Holder shall not be permitted to resell Registrable
      Securities (as defined in the Registration Rights Agreement) under the
      Registration Statement for a period of more than 20 consecutive Trading Days
      or
      30 non-consecutive Trading Days during any 12 month period; provided,
however, that if the Company is negotiating a merger, consolidation,
      acquisition or sale of all or substantially all of its assets or a similar
      transaction and, in the written opinion of counsel to the Company, the
      Registration Statement would be required to be amended to include information
      concerning such pending transaction(s) or the parties thereto which information
      is not available or may not be publicly disclosed at the time, the Company
      shall
      be permitted an additional 10 consecutive Trading Days during any 12 month
      period pursuant to this Section 7(a)(ix);

    

    (x)  the
      Company shall fail for any reason to deliver certificates to a Holder prior
      to
      the tenth Trading Day after a Conversion Date pursuant to Section 4(c) or the
      Company shall provide at any time notice to the Holder, including by way of
      public announcement, of the Company’s intention to not honor requests for
      conversions of any Debentures in accordance with the terms hereof;
      or

    

    (xi)  any
      monetary judgment, writ or similar final process shall be entered or filed
      against the Company, any subsidiary or any of their respective property or
      other
      assets for more than $250,000, and such judgment, writ or similar final process
      shall remain unvacated, unbonded or unstayed for a period of 45 calendar
      days.

    

    (b)  Remedies
      Upon Event of Default. If any Event of Default occurs, the outstanding
      principal amount of this Debenture, plus accrued but unpaid interest, liquidated
      damages and other amounts owing in respect thereof through the date of
      acceleration, shall become, at the Holder’s election, immediately due and
      payable in cash at the Mandatory Default Amount. Commencing five days after
      the
      occurrence of any Event of Default that results in the eventual acceleration
      of
      this Debenture, the interest rate on this Debenture shall accrue at an interest
      rate equal to the lesser of 22% per annum or the maximum rate permitted under
      applicable law. Upon the payment in full of the Mandatory Default Amount, the
      Holder shall promptly surrender this Debenture to or as directed by the Company.
      In connection with such acceleration described herein, the Holder need not
      provide, and the Company hereby waives, any presentment, demand, protest or
      other notice of any kind, and the Holder may immediately and without expiration
      of any grace period enforce any and all of its rights and remedies hereunder
      and
      all other remedies available to it under applicable law. Such acceleration
      may
      be rescinded and annulled by Holder at any time prior to payment hereunder
      and
      the Holder shall have all rights as a holder of the Debenture until such time,
      if any, as the Holder receives full payment pursuant to this Section 7(b).
      No
      such rescission or annulment shall affect any subsequent Event of Default or
      impair any right consequent thereon.

    

    Section
      8.  Miscellaneous. 

    

    (a)  Notices.
      Any and all notices or other communications or deliveries to be provided by
      the
      Holder hereunder, including, without limitation, any Notice of Conversion,
      shall
      be in writing and delivered personally, by facsimile, or sent by a nationally
      recognized overnight courier service, addressed to the Company, at
      _____________________, facsimile number (____) _______, Attn:
      ____________ or such other facsimile number or address as
      the Company may specify for such purpose by notice to the Holder delivered
      in
      accordance with this Section 8. Any and all notices or other communications
      or
      deliveries to be provided by the Company hereunder shall be in writing and
      delivered personally, by facsimile, or sent by a nationally recognized overnight
      courier service addressed to each Holder at the facsimile number or address
      of
      such Holder appearing on the books of the Company, or if no such facsimile
      number or address appears, at the principal place of business of the Holder.
      Any
      notice or other communication or deliveries hereunder shall be deemed given
      and
      effective on the earliest of (i) the date of transmission, if such notice or
      communication is delivered via facsimile at the facsimile number specified
      in
      this Section 8 prior to 5:00 p.m. (St. Louis, MO time), (ii) the date
      immediately following the date of transmission, if such notice or communication
      is delivered via facsimile at the facsimile number specified in this Section
      8
      between 5:00 p.m. (St. Louis, MO time) and 11:59 p.m. (St. Louis, MO time)
      on
      any date, (iii) the second Business Day following the date of mailing, if sent
      by nationally recognized overnight courier service, or (iv) upon actual receipt
      by the party to whom such notice is required to be given.

    

    (b)  Absolute
      Obligation. Except as expressly provided herein, no provision of this
      Debenture shall alter or impair the obligation of the Company, which is absolute
      and unconditional, to pay the principal of, liquidated damages and accrued
      interest, as applicable, on this Debenture at the time, place, and rate, and
      in
      the coin or currency, herein prescribed. This Debenture is a direct debt
      obligation of the Company. This Debenture ranks paripassu with all
      other Debentures of the same series now or hereafter issued under the terms
      set
      forth herein.

    

    (c)  Lost
      or Mutilated Debenture. If this Debenture shall be mutilated, lost, stolen
      or destroyed, the Company shall execute and deliver, in exchange and
      substitution for and upon cancellation of a mutilated Debenture, or in lieu
      of
      or in substitution for a lost, stolen or destroyed Debenture, a new Debenture
      for the principal amount of this Debenture so mutilated, lost, stolen or
      destroyed, but only upon receipt of evidence of such loss, theft or destruction
      of such Debenture, and of the ownership hereof, reasonably satisfactory to
      the
      Company.

    

    (d)  Governing
      Law. All questions concerning the construction, validity, enforcement and
      interpretation of this Debenture shall be governed by and construed and enforced
      in accordance with the internal laws of the State of Delaware, without regard
      to
      the principles of conflict of laws thereof. If either party shall commence
      an
      action or proceeding to enforce any provisions of this Debenture, then the
      prevailing party in such action or proceeding shall be reimbursed by the other
      party for its attorneys’ fees and other costs and expenses incurred in the
      investigation, preparation and prosecution of such action or
      proceeding.

    

    (e)  Waiver.
      Any waiver by the Company or the Holder of a breach of any provision of this
      Debenture shall not operate as or be construed to be a waiver of any other
      breach of such provision or of any breach of any other provision of this
      Debenture. The failure of the Company or the Holder to insist upon strict
      adherence to any term of this Debenture on one or more occasions shall not
      be
      considered a waiver or deprive that party of the right thereafter to insist
      upon
      strict adherence to that term or any other term of this Debenture. Any waiver
      by
      the Company or the Holder must be in writing.

    

    (f)  Severability.
      If any provision of this Debenture is invalid, illegal or unenforceable, the
      balance of this Debenture shall remain in effect, and if any provision is
      inapplicable to any Person or circumstance, it shall nevertheless remain
      applicable to all other Persons and circumstances. If it shall be found that
      any
      interest or other amount deemed interest due hereunder violates the applicable
      law governing usury, the applicable rate of interest due hereunder shall
      automatically be lowered to equal the maximum rate of interest permitted under
      applicable law. The Company covenants (to the extent that it may lawfully do
      so)
      that it shall not at any time insist upon, plead, or in any manner whatsoever
      claim or take the benefit or advantage of, any stay, extension or usury law
      or
      other law which would prohibit or forgive the Company from paying all or any
      portion of the principal of or interest on this Debenture 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 the Company
      (to
      the extent it may lawfully do so) hereby expressly waives all benefits or
      advantage of any such law, and covenants that it will not, by resort to any
      such
      law, hinder, delay or impeded the execution of any power herein granted to
      the
      Holder, but will suffer and permit the execution of every such as though no
      such
      law has been enacted.

    

    (g)  Next
      Business Day. Whenever any payment or other obligation hereunder shall be
      due on a day other than a business day, such payment shall be made on the next
      succeeding business day.

    

    (h)  Headings.
      The headings contained herein are for convenience only, do not constitute a
      part
      of this Debenture and shall not be deemed to limit or affect any of the
      provisions hereof.

    

    (i)  Assumption. 
      Any successor to the Company or any surviving entity in a Fundamental
      Transaction shall (A) assume, prior to such Fundamental Transaction, all of
      the
      obligations of the Company under this Debenture, the Debenture Purchase
      Agreement and the other transaction documents pursuant to written agreements
      in
      form and substance satisfactory to the Holder (such approval not to be
      unreasonably withheld or delayed) and (B) issue to the Holder a new debenture
      of
      such successor entity evidenced by a written instrument substantially similar
      in
      form and substance to this Debenture, including, without limitation, having
      a
      principal amount and interest rate equal to the principal amount and the
      interest rate of this Debenture and having similar ranking to this Debenture,
      which shall be satisfactory to the Holder (any such approval not to be
      unreasonably withheld or delayed).  The provisions of this Section 8(i)
      shall apply similarly and equally to successive Fundamental Transactions and
      shall be applied without regard to any limitations of this
      Debenture.

    

    [Remainder
      of page intentionally left blank; signature page to follow]

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    IN
      WITNESS WHEREOF, the Company has caused this Debenture to be duly executed
      by a
      duly authorized officer as of the date first above indicated.

    

    
      	 	
              SRS
                ENERGY, INC.

            
	 	 
	 	 
	 	
              By:

            	 
	 	
              Name:

            	 
	 	
              Title:

            	 

    

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    ANNEX
      A

    

    NOTICE
      OF CONVERSION

    

    The
      undersigned hereby elects to convert principal under the Series A Convertible
      Debenture of SRS Energy, Inc., a Delaware corporation (the “Company”),
      due on April 16, 2010, into shares of common stock, par value $0.001 per share
      (the “Common Stock”), of the Company according to the conditions hereof,
      as of the date written below. If shares are to be issued in the name of a person
      other than the undersigned, the undersigned will pay all transfer taxes payable
      with respect thereto and is delivering herewith such certificates and opinions
      as reasonably requested by the Company in accordance therewith. No fee will
      be
      charged to the holder for any conversion, except for such transfer taxes, if
      any.

    

    The
      undersigned agrees to comply with the prospectus delivery requirements under
      the
      applicable securities laws in connection with any transfer of the aforesaid
      shares of Common Stock.

    

    Conversion
      Calculations:

    

    Date
      to
      Effect Conversion:

    

    Principal
      Amount of Debenture to be Converted:

    

    Number
      of
      shares of Common Stock to be issued:

    

    

    

    
      	 	
              Signature:

            	 
	 	 	 
	 	
              Name:

            	 
	 	 	 
	 	
              Address:

            	 
	 	 	 

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Schedule
      1

    

    The
      Series A Convertible Debentures due on April 16, 2010, in the aggregate
      principal amount of $____________ issued by SRS Energy, Inc. This Conversion
      Schedule reflects conversions made under Section 4 of the above referenced
      Debenture.

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