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                                                                     Exhibit 4.1

                   STATEMENT OF RESOLUTION ESTABLISHING SERIES
                                       OF
                      SERIES C CONVERTIBLE PREFERRED STOCK
                                       OF
                                   DYNEGY INC.

     Pursuant to and in accordance with Section 6.10 of the Illinois Business
Corporation Act of 1983, as amended (the "IBCA"), the undersigned corporation
hereby makes the following statement:

                                   ARTICLE I.

     The name of the corporation is Dynegy Inc. (the "Corporation").

                                  ARTICLE II.

     The Board of Directors of the Corporation (the "Board") on July 31, 2003,
duly adopted the following resolution establishing and designating a series of
preferred stock of the Corporation and fixing and determining the relative
rights and preferences thereof:

     RESOLVED, that pursuant to the authority vested in the Board by Article 4,
Paragraph 2B. of the Corporation's Amended and Restated Articles of
Incorporation (the "Articles of Incorporation"), a series of preferred stock of
the Corporation be, and it hereby is, created out of the authorized but unissued
shares of the capital stock of the Corporation, such series to be designated
"Series C Convertible Preferred Stock" (the "Series C Preferred Stock"), to
consist of 16,000,000 shares, no par value per share, of which the preferences
and relative and other rights, and the qualifications, limitations, and
restrictions thereof will be, in addition to those set forth in the Articles of
Incorporation, as follows:

     1. CERTAIN DEFINITIONS. (a) Unless otherwise stated herein or the context
otherwise requires, the terms defined in this Section 1 have the following
meanings:

     "Articles of Incorporation" is defined in the preamble to this Article II.

     "Board" is defined in the preamble to this Article II.

     "Cash Amount" is defined in Section 5(c)(iii)(C).

     "Cash Settlement Averaging Period" is defined in Section 5(c)(iii).

     "Cash Settlement Notice Period" is defined in Section 5(c)(iii).

     "Change of Control" means, any event or series of events by which:

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          (a) any "person" or "group" (as such terms are used in sections 13(d)
     and 14(d) of the Exchange Act, but excluding (i) any employee benefit plan
     of such person or its subsidiaries, and any person or entity acting in its
     capacity as trustee, agent or other fiduciary or administrator of any such
     plan and (ii) ChevronTexaco and/or any of its Affiliates) becomes the
     "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange
     Act, except that a person or group shall be deemed to have "beneficial
     ownership" of all securities that such person or group has the right to
     acquire (such right, an "option right"), whether such right is exercisable
     immediately or only after the passage of time), directly or indirectly, of
     35% or more (excluding securities acquired by such "person" or "group"
     directly or indirectly in one or more related transactions from
     ChevronTexaco and/or any of its Affiliates) or 50% or more (including
     securities acquired by such "person" or "group" directly or indirectly in
     one or more related transactions from ChevronTexaco and/or any of its
     Affiliates) of the equity securities of the Corporation entitled to vote
     for members of the Board or equivalent governing body of the Corporation on
     a fully-diluted basis (and taking into account all such securities that
     such person or group has the right to acquire pursuant to any option
     right);

          (b) Continuing Directors cease for any reason to constitute a majority
     of the Board; or

          (c) all or substantially all of the consolidated assets of the
     Corporation and its Subsidiaries, taken as whole, are sold, leased or
     otherwise transferred to any Person (other than the Corporation or one or
     more of the Corporation's Subsidiaries).

     "Change of Control Offer" is defined in Section 6(b).

     "Change of Control Payment" is defined in Section 6(b).

     "Change of Control Payment Date" is defined in Section 6(b)(ii).

     "ChevronTexaco" means ChevronTexaco Corporation, a Delaware corporation.

     "Class A Common Stock" means all shares now or hereafter authorized of
Class A Common Stock, no par value per share, of the Corporation.

     "Class B Common Stock" means all shares now or hereafter authorized of
Class B Common Stock, no par value, of the Corporation.

     "Closing Price" means, with respect to any security on any day, the closing
sale price, regular way, on such day or, in case no such sale takes place on
such day, the average of the reported closing bid and asked prices, regular way,
in each case as quoted on the New York Stock Exchange or, if such security is
not quoted or listed or admitted to trading on such New York Stock Exchange, on
the principal national securities exchange or quotation system on which such
security is quoted or listed or admitted to trading or, if not quoted or listed
or admitted to trading on any national securities exchange or quotation system,
the average of the closing bid and asked prices of such security on the
over-the-counter market on the day in question as reported by the National
Quotation Bureau Incorporated, or a similar generally accepted reporting
service, or if not so available, in such manner as furnished by any New York

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Stock Exchange member firm selected from time to time by the Board for that
purpose, or a price determined in good faith by the Board.

     "Common Stock" means all shares now or hereafter authorized of any class of
common stock of the Corporation and any other stock of the Corporation,
howsoever designated, authorized after the Issue Date, which has the right
(subject to prior rights of any class or series of preferred stock) to
participate in the distribution of the assets and earnings of the Corporation
without limit as to per share amount.

     "Compound Dividends" is defined in Section 2(c)(ii).

     "Continuing Directors" means, as of any date of determination, any member
of the Board who: (x) was a member of the Board on the Issue Date, or (y) was
appointed, elected or nominated for election to the Board with the approval of a
majority of the Continuing Directors who were members of the Board at the time
of the relevant appointment, nomination or election.

     "Conversion Date" is defined in Section 5(c).

     "Conversion Obligation" is defined in Section 5(c)(iii).

     "Conversion Price" means the price per share of Common Stock used to
determine the number of shares of Common Stock deliverable upon conversion of a
share of the Series C Preferred Stock, subject to adjustment in accordance with
the provisions of Section 5.

     "Corporation" is defined in Article I.

     "Cross-Over Date" means the first to occur of (i) the eighteenth (18) month
anniversary of the Issue Date and (ii) the date which is 120 days after the date
on which the Corporation shall have completed one or more public or private
sales of Qualified Capital Stock, or rights, warrants or options therefor, or
securities convertible into Qualified Capital Stock, resulting in an aggregate
amount of gross proceeds of at least $250 million (measured with reference to
such sales which are consummated subsequent to the Issue Date).

     "Deferral Period Event" shall occur when an Extended Dividend Period shall
have reached ten (10) Dividend Periods without the Deferred Dividend which gave
rise to such Extended Dividend Period having been paid (determined taking into
account the provisions of Section 2(f)) in full not later than the last day of
such Extended Dividend Period.

     "Deferred Dividend" is defined in Section 2(f).

     "Disqualified Capital Stock" means any class or series of capital stock of
the Corporation that is required to be redeemed or is redeemable at the option
of the holder of such class or series at any time on or prior to the anniversary
of the Issue Date which falls in 2013.

     "Distributed Assets or Notes" is defined in Section 5(e)(iv).

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     "Dividend Payment Date" means each of the semi-annual dates as follows: the
First Dividend Payment Date and each anniversary thereafter of the Issue Date
and the First Dividend Payment Date.

     "Dividend Period" means the semi-annual period between consecutive Dividend
Payment Dates.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any successor Federal statute, and the rules and regulations thereunder, all as
the same shall be in effect at the time. Reference to a particular section of,
or rule or regulation under, the Exchange Act shall include a reference to the
comparable section, rule or regulation, if any, and as the case may be, of or
under the successor Federal statute.

     "Extended Dividend Period" is defined in Section 2(f).

     "Extended Dividend Payment Date" is defined in Section 2(f).

     "Final Redemption Date" is defined in Section 4(f).

     "First Dividend Payment Date" means the date that is six months from the
Issue Date.

     "Forced Conversion Notice" is defined in Section 5(a)(ii).

     "IBCA" is defined in the introductory paragraph of this statement of
resolution.

     "Issue Date" means the date on which shares of Series C Preferred Stock are
first issued by the Corporation.

     "Junior Stock" means, for purposes of Section 2, the Common Stock and any
other class or series of capital stock of the Corporation issued after the Issue
Date not entitled to receive any dividends in any Dividend Period, unless all
dividends required to have been paid or declared and set apart for payment on
the Series C Preferred Stock have been paid or declared and set apart for
payment and, for purposes of Section 3, the Common Stock and any class or series
of capital stock of the Corporation issued after the Issue Date not entitled to
receive any assets upon the liquidation, dissolution, or winding up of the
affairs of the Corporation until the Series C Preferred Stock have received the
entire amount to which such stock is entitled upon such liquidation,
dissolution, or winding up.

     "Liquidation Date" is defined in Section 3.

     "Liquidation Value" means, as of any date, $50.00 per share of Series C
Preferred Stock (as adjusted for stock dividends, combinations or splits with
respect to such shares), plus any accrued but unpaid dividends (including
Compound Dividends, if any) thereon through such date.

     "Mandatory Conversion" is defined in Section 5(a)(ii).

     "Mandatory Redemption Date" is defined in Section 4(a).

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     "NYSE Requirements" means the rules and regulations of the New York Stock
Exchange applicable to the Corporation as a listed company thereon.

     "Optional Conversion" is defined in Section 5(a)(i).

     "Original Issuance Price" means $50.00 per share of Series C Preferred
Stock (as adjusted for stock dividends, combinations or splits with respects to
such shares).

     "Parity Stock" means, for purposes of Section 2, any other class or series
of capital stock of the Corporation issued after the Issue Date entitled to
receive payment of dividends on a parity with the Series C Preferred Stock and,
for purposes of Section 3, any other class or series of capital stock of the
Corporation issued after the Issue Date entitled to receive assets upon the
liquidation, dissolution, or winding up of the affairs of the Corporation on a
parity with the Series C Preferred Stock.

     "Paying Agent" is defined in Section 6(b)(v).

     "Qualified Capital Stock" means all shares of capital stock of the
Corporation that is not Disqualified Capital Stock.

     "Record Date" means the 15th day next preceding a Dividend Payment Date, or
such other date as may be designated by the Board.

     "Redemption Agent" is defined in Section 4(e).

     "Redemption Date" is defined in Section 4(d).

     "Redemption Price" means $50.00 per share of Series C Preferred Stock, plus
any accrued but unpaid dividends (including Compound Dividends, if any) thereon
through the Redemption Date.

     "Senior Stock" means for purposes of Section 2, any class or series of
capital stock of the Corporation issued after the Issue Date ranking senior to
the Series C Preferred Stock in respect of the right to receive dividends, and,
for purposes of Section 3, any class or series of capital stock of the
Corporation issued after the Issue Date ranking senior to the Series C Preferred
Stock in respect of the right to receive assets upon the liquidation,
dissolution, or winding up of the affairs of the Corporation.

     "Series C Preferred Stock" is defined in the preamble to this Article II.

     "Subsidiary" of any Person means (x) any corporation, association or other
business entity (other than a partnership, joint venture, limited liability
company or similar entity) of which more than 50% of the total outstanding
voting power entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof (or persons
performing similar functions) or (y) any partnership, joint venture, limited
liability company or similar entity of which more than 50% of the capital
accounts, distribution rights, total equity and voting interests or general or
limited partnership interests, as applicable, is, in the case of clauses (x) and
(y), at the time owned or controlled, directly or indirectly, by (1) such

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Person, (2) such Person and one or more Subsidiaries of such Person or (3) one
or more Subsidiaries of such Person.

     "Trading Day" shall mean (x) if the applicable security is quoted or listed
or admitted for trading on the New York Stock Exchange or another national
securities exchange or quotation system, a day on which the New York Stock
Exchange or such other national securities exchange or quotation system is open
for business or (y) if the applicable security is not so quoted, listed or
admitted for trading, any day other than a Saturday or Sunday or a day on which
banking institutions in the State of New York are authorized or obligated by law
or executive order to close.

     (b) The following terms have the respective meanings specified in the
indicated provision of Articles of Incorporation:

          .    Affiliate Art. 4; Para. 2(C).3(d)(ii); and

          .    Person Art. 4; Para. 2(C).3(d)(ii).

     2. DIVIDENDS.

          (a) Subject to the prior preferences and other rights of any Senior
     Stock, the holders of Series C Preferred Stock are entitled to receive, out
     of funds legally available for such purpose, cash dividends at the rate of
     $2.75 per annum per share of Series C Preferred Stock, and (subject to
     Sections 2(c) and 2(e)) no more. Such dividends are cumulative from the
     Issue Date and are payable semi-annually, in arrears, when and as declared
     by the Board on each Dividend Payment Date commencing on the first Dividend
     Payment Date after the Issue Date (subject to the rights of the Corporation
     pursuant to Section 2(f)). Each such dividend will be paid to the holders
     of record of the Series C Preferred Stock as their names appear on the
     share register of the Corporation on the Record Date immediately preceding
     such Dividend Payment Date. Dividends on account of arrears for any past
     Dividend Periods may be declared and paid at any time, without reference to
     any Dividend Payment Date, to holders of record on such date as may be
     fixed by the Board.

          (b) If full cash dividends, as provided for in Sections 2(a), 2(c)(ii)
     and 2(e), are not paid or made available to the holders of all outstanding
     shares of Series C Preferred Stock and any Parity Stock, and funds
     available are insufficient to permit such payment to all such holders of
     the preferential amounts to which they are then entitled, the entire amount
     available for payment of cash dividends remaining after the distributions
     to holders of any Senior Stock of the full amounts to which they may be
     entitled will be distributed among the holders of the Series C Preferred
     Stock and any Parity Stock ratably in proportion to the full amount to
     which they would otherwise be respectively entitled, and any remainder not
     paid to the holders of the Series C Preferred Stock will cumulate as
     provided in Section 2(c).

          (c) (i) If, on any Dividend Payment Date, the holders of the Series C
     Preferred Stock do not receive the full dividends provided for in Sections
     2(a), 2(c)(ii) and 2(e), then such dividends will cumulate, whether or not
     the Corporation has earnings

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     and/or profits, whether or not there are funds legally available for
     payment of such dividends, and whether or not such dividends are declared.

          (ii) During any periods when there are Deferred Dividends outstanding,
     the holders of the Series C Preferred Stock shall be entitled to receive
     additional dividends (payable only as and when the accumulated dividends
     may become payable) at the rate of 5.5% per annum (or at the rate of 10.0%
     per annum for any Deferred Dividends outstanding after the Corporation's
     failure to obtain the shareholders' approval set forth in Section 5(l)) on
     the aggregate amount of Deferred Dividends outstanding during such period,
     accruing semi-annually as of each regular Dividend Payment Date ("Compound
     Dividends").

          (d) So long as any shares of Series C Preferred Stock are outstanding,
     the Corporation will not, unless all dividends to which the holders of
     Series C Preferred Stock are entitled for all previous Dividend Periods
     have been paid or declared and a sum of money sufficient for the payment
     thereof set apart, (i) declare or pay on any Junior Stock any dividend or
     distribution whatsoever, whether in cash, property, or otherwise (other
     than dividends payable in shares of the class or series upon which such
     dividends are declared or paid, or payable in shares of Common Stock with
     respect to Junior Stock other than Common Stock, together with cash in lieu
     of fractional shares), (ii) purchase or redeem any Junior Stock, or (iii)
     pay or make available any monies for a sinking fund for the purchase or
     redemption of any Junior Stock.

          (e) In the event that, on or prior to the first anniversary of the
     Issue Date, the Series C Preferred Stock shall not have become convertible
     (i.e., that the limitation on conversion described in Section 5(l) remains
     in effect), then, from and after the first anniversary of the Issue Date,
     the dividend rate per share of Series C Preferred Stock otherwise
     applicable pursuant to Section 2(a) shall be increased to the rate of $5.00
     per annum from $2.75 per annum, and shall remain at such increased level
     for so long as the Series C Preferred Stock shall not be convertible as
     aforesaid; provided, however, that at such time as the Series C Preferred
     Stock shall become convertible (i.e., that the limitation on conversion
     described in Section 5(l) is no longer in effect) the dividend rate shall
     revert back to the rate otherwise applicable pursuant to Section 2(a).

          (f) Notwithstanding that funds are legally available for the purpose
     of paying cash dividends to the holders of Series C Preferred Stock, the
     Corporation may elect to defer payment of cash dividends on the Series C
     Preferred Stock for up to ten (10) consecutive Dividend Periods provided,
     that no deferral pursuant to this sentence may (A) extend beyond the
     Mandatory Redemption Date or (B) end on a date other than a regular
     Dividend Payment Date. Irrespective of the reason that a regular dividend
     is not paid on a regular Dividend Payment Date, in the event that the full
     regular dividend is not paid on a Dividend Payment Date (a "Deferred
     Dividend"), then such Dividend Payment Date shall commence an extended
     Dividend Period (an "Extended Dividend Period") that will continue until
     the earlier of (I) the Deferred Dividend shall have been paid in cash or
     (II) the Deferred Dividend shall not have been declared and paid in full by
     the tenth (10th) regular Dividend Payment Date next following the Dividend
     Payment Date on which the Deferred Dividend was originally scheduled to be
     paid. For purposes of determining

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     whether or not an Extended Dividend Period has ended, unless all dividends
     (including Compound Dividends) to which the holders of the Series C
     Preferred Stock are entitled for all previous Dividend Periods have been,
     or are simultaneously, paid or declared and a sum of money sufficient for
     payment thereof set apart, in the event that dividends are unpaid for more
     than one regular Dividend Period, any payment of cash dividends shall
     (irrespective of any action or statement of the Corporation or its Board to
     the contrary) be deemed to have been payment of unpaid regular dividends
     (including Compound Dividends) for previous Dividend Periods in reverse
     order of maturity. Prior to the end of an Extended Dividend Period, the
     Corporation may pay all or any portion of the accumulated dividends in the
     Series C Preferred Stock on any Extended Dividend Payment Date to holders
     of record on the regular Record Date for such Dividend Payment Date or from
     time to time extend such period; provided that such Extended Dividend
     Period, including such extension and all such further extensions thereof,
     shall not exceed ten (10) consecutive semi-annual Dividend Periods. Upon
     the termination of any Dividend Payment Period and upon the payment of all
     accumulated dividends, together with Compound Dividends, the Corporation
     may elect to begin a new Extended Dividend Period, subject to the foregoing
     requirements. No dividends shall be due and payable during an Extended
     Dividend Period, except on the last day thereof (an "Extended Dividend
     Payment Date"). On any Extended Dividend Payment Date, the Corporation
     shall pay all accumulated dividends (including any Compound Dividends)
     which shall be payable to the holders of the Series C Preferred Stock in
     whose names the Series C Preferred Stock are registered in the Series C
     Preferred Stock Register on the last Record Date prior to such Extended
     Dividend Payment Date.

          (g) The Corporation shall give the holders of the Series C Preferred
     Stock written notice of its election to commence an Extended Dividend
     Period at least five business days prior to the earlier of (i) the Record
     Date with respect to the next succeeding Dividend Payment Date or (ii) the
     date the Corporation is required to give notice of the record or payment
     date of such dividend payment to any national stock exchange or other
     self-regulatory organization on which the Series C Preferred Stock is
     listed or quoted or to holders of the Series C Preferred Stock. The
     Dividend Period in which any notice is given pursuant to this Section 2(g)
     shall be counted as one of the Dividend Periods permitted in determining
     the maximum Extended Dividend Period permitted under Section 2(f).

     3. DISTRIBUTIONS UPON LIQUIDATION, DISSOLUTION, OR WINDING UP. In the event
of any voluntary or involuntary liquidation, dissolution, or other winding up of
the affairs of the Corporation, subject to the prior preferences and other
rights of any Senior Stock, but before any distributions or payments are made to
the holders of Junior Stock, the holders of the Series C Preferred Stock will be
entitled to be paid the Liquidation Value of all outstanding shares of Series C
Preferred Stock, as of the date of such liquidation or dissolution or such other
winding up (the "Liquidation Date"), and no more, in cash or in property at its
fair value as determined by the Board, or both, at the election of the Board. If
such payment is made in full to the holders of the Series C Preferred Stock, and
if payment is made in full to the holders of any Senior Stock and Parity Stock
of all amounts to which such holders will be entitled, the remaining assets and
funds of the Corporation will be distributed among the holders of Junior Stock,
according to their respective shares and priorities. If, upon any such
liquidation,

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dissolution, or other winding up of the affairs of the Corporation, the assets
of the Corporation distributable among the holders of all outstanding shares of
the Series C Preferred Stock and any Parity Stock are insufficient to permit the
payment in full to such holders of the preferential amounts to which they are
entitled, then the entire assets of the Corporation remaining after the
distributions to holders of any Senior Stock of the full amounts to which they
may be entitled will be distributed among the holders of the Series C Preferred
Stock and any Parity Stock ratably in proportion to the full amounts to which
they would otherwise be respectively entitled. Neither the consolidation or
merger of the Corporation into or with another entity or entities nor the sale
of all or substantially all of the assets of the Corporation to any person or
persons will be deemed a liquidation, dissolution, or winding up of the affairs
of the Corporation within the meaning of this Section 3, unless such
consolidation, merger, or sale of assets is in connection with the complete
liquidation, dissolution, or winding up of the affairs of the Corporation.

     4. REDEMPTION BY THE CORPORATION.

          (a) The Corporation shall redeem all, and not less than all, of the
     then outstanding shares of Series C Preferred Stock at the Redemption Price
     on the Mandatory Redemption Date that have not been converted pursuant to
     Section 5. The "Mandatory Redemption Date" is the earlier to occur of (i)
     the anniversary of the Issue Date occurring in 2033 and (ii) a Deferral
     Period Event.

          (b) Except for any mandatory redemption pursuant to Section 4(a), the
     Series C Preferred Stock may not be redeemed by the Corporation, in whole
     or in part, prior to the tenth (10th) anniversary of the Issue Date. On and
     after the tenth (10th) anniversary of the Issue Date, the Series C
     Preferred Stock may be redeemed by the Corporation at any time and from
     time to time, in whole or in part, at the option of the Corporation, at the
     Redemption Price.

          (c) If less than all of the outstanding shares of the Series C
     Preferred Stock are to be redeemed by the Corporation, such shares will be
     redeemed pro rata as determined by the Board in its sole discretion.

          (d) Notice of each proposed redemption of the Series C Preferred Stock
     will be sent by or on behalf of the Corporation, by first class mail,
     postage prepaid, to holders of record of the shares of Series C Preferred
     Stock to be redeemed at such holders' addresses as they appear on the
     records of the Corporation, not less than 30 days or more than 60 days
     prior to the date fixed for redemption by the Corporation (the "Redemption
     Date") (i) notifying such holders of the redemption of such shares of
     Series C Preferred Stock and the Redemption Date, (ii) stating the date on
     which such shares of Series C Preferred Stock cease to be convertible and
     the Conversion Price, (iii) stating the place or places at which such
     shares of Series C Preferred Stock called for redemption will, upon
     presentation and surrender of the certificate or certificates evidencing
     such shares, be redeemed and the Redemption Price, and (iv) stating the
     name and address of the Redemption Agent selected in accordance with
     Section 4(e).

          (e) The Corporation may (i) act as the redemption agent or (ii)
     appoint as its agent, for the purpose of acting as the Corporation's
     redemption agent, a bank or trust

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     company in good standing, organized under the laws of the United States of
     America or any jurisdiction thereof and any replacement thereof or
     successors thereto. The Corporation or such appointed bank or trust company
     is hereinafter referred to as the "Redemption Agent." Following such
     appointment, if any, and prior to any redemption, the Corporation will
     deliver to the Redemption Agent irrevocable written instructions
     authorizing the Redemption Agent, on behalf and at the expense of the
     Corporation, to cause a notice of redemption to be duly mailed in
     accordance with Section 4(d), as soon as practicable after receipt of such
     irrevocable instructions. All funds necessary for the redemption will be
     deposited with the Redemption Agent, in trust, at least two business days
     prior to the Redemption Date, for the pro rata benefit of the holders of
     the shares of Series C Preferred Stock called for redemption. Neither
     failure to mail any such notice to one or more holders of Series C
     Preferred Stock nor any defect in any notice will affect the sufficiency of
     the proceedings for redemption as to other holders of Series C Preferred
     Stock.

          (f) If notice of redemption is given in accordance with Section 4(d)
     and the Corporation is not in default in the payment of the Redemption
     Price, then each holder of shares of Series C Preferred Stock called for
     redemption is entitled to all preferences and relative and other rights
     accorded by this resolution until and including the date prior to the
     Redemption Date. If the Corporation defaults in making payment on the
     Redemption Date, then each holder of the shares of Series C Preferred Stock
     called for redemption is entitled to all preferences and relative and other
     rights accorded by this resolution until and including the date prior to
     the date when the Corporation makes payment to the holders of the Series C
     Preferred Stock (the "Final Redemption Date"). From and after the
     Redemption Date, the shares of Series C Preferred Stock called for
     redemption will no longer be deemed to be outstanding and all rights of the
     holders of such shares of Series C Preferred Stock will cease and
     terminate, except the right of the holders of such shares of Series C
     Preferred Stock, upon surrender of the certificate or certificates
     therefor, to receive the Redemption Price. The deposit of monies in trust
     with the Redemption Agent by the Corporation will be irrevocable, except
     that the Corporation will be entitled to receive from the Redemption Agent
     the interest or other earnings, if any, earned on any monies so deposited
     in trust, and the holders of any shares of Series C Preferred Stock
     redeemed will have no claim to such interest or other earnings. Any balance
     of monies so deposited by the Corporation and unclaimed by the holders of
     the Series C Preferred Stock entitled thereto at the expiration of one year
     from the Redemption Date (or the Final Redemption Date, as applicable) will
     be repaid, together with any interest or other earnings thereon, to the
     Corporation, and after any such repayment, the holders of the shares of
     Series C Preferred Stock entitled to the funds so repaid to the Corporation
     will look only to the Corporation for payment of the Redemption Price,
     without interest.

     5. CONVERSION. The Series C Preferred Stock will be convertible into Common
Stock as follows:

          (a) (i) Conversion at Option of Holder. Subject to and upon compliance
     with the provisions of this Section 5 (including, but without limitation,
     Section 5(l)), the holder of any shares of Series C Preferred Stock will
     have the right at such holder's

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     option, at any time or from time to time, to convert any of such shares of
     Series C Preferred Stock into fully paid and nonassessable shares of Class
     A Common Stock at the Conversion Price in effect on the Conversion Date (an
     "Optional Conversion"); provided, however, no right of conversion afforded
     by this Section 5(a)(i) may be exercised unless the Closing Price of the
     Class A Common Stock for each of the 20 Trading Days immediately prior to
     the proposed Conversion Date is at least 100% of the Conversion Price in
     effect on the proposed Conversion Date. Each share of Series C Preferred
     Stock to be converted pursuant to this Section 5(a)(i) will be converted
     into a number of shares of Class A Common Stock determined by dividing (A)
     the Original Issuance Price by (B) the Conversion Price in effect on the
     Conversion Date. With respect to any share of Series C Preferred Stock
     called for redemption, the right of conversion described in this Section
     5(a)(i) will terminate at the close of business on the day prior to the
     Redemption Date or, if the Corporation defaults in the payment of the
     Redemption Price, at the close of business on the day prior to the Final
     Redemption Date.

               (ii) Mandatory Conversion. Subject to the limitations set forth
     in Section 5(l) below, on or after the third anniversary of the Cross-Over
     Date, the Corporation may, by giving notice to the holders of Series C
     Preferred Stock (the "Forced Conversion Notice"), convert each share of
     Series C Preferred Stock (the "Mandatory Conversion") into the number of
     shares of Common Stock determined by dividing (A) the Original Issuance
     Price per share of Series C Preferred Stock by (B) the Conversion Price in
     effect on the Conversion Date; provided, however, that this right to compel
     Mandatory Conversion shall only be exercisable if: (I) the Closing Price of
     a share of Class A Common Stock exceeds 130% of the Conversion Price in
     effect on the Conversion Date (relating to the Mandatory Conversion) for at
     least 20 Trading Days within the 30 consecutive Trading Days immediately
     prior to the delivery by the Corporation of the Forced Conversion Notice
     (including the last Trading Day of such period); and, (II) simultaneously
     with the Mandatory Conversion, holders of such Series C Preferred Stock
     shall receive a dividend payment of cash, shares of Common Stock, or any
     combination thereof, as the Corporation determines in its sole discretion,
     in an amount equal to any accrued and unpaid dividends on the Series C
     Preferred Stock as of the applicable Conversion Date (other than previously
     declared dividends on the Series C Preferred Stock payable to a holder of
     record as of a prior date), whether or not declared, out of legally
     available assets of the Corporation. To the extent that the Corporation
     pays some or all of such dividend in shares of Common Stock, the number of
     shares of Common Stock issuable to a holder in respect of such accrued and
     unpaid dividends shall equal (x) the amount of accrued and unpaid dividends
     on the Series C Preferred Stock on the applicable Conversion Date that the
     Corporation shall have determined to pay in shares of Common Stock divided
     by (y) the average of the Closing Price of shares of Class A Common Stock
     for the 5 Trading Days next preceding the applicable Conversion Date.

          (b) Conversion Price. The Conversion Price at which shares of Class A
     Common Stock will initially be issuable upon conversion of the shares of
     Series C Preferred Stock will be $5.78. The Conversion Price will be
     subject to adjustment as set forth in Section 5(e). No dividends will
     accrue or be paid on Series C Preferred Stock subsequent to conversion.

                                       11

<PAGE>

          (c) Mechanics of Conversion. (i) In the case of an Optional
     Conversion, the holder of any shares of Series C Preferred Stock shall
     exercise the conversion right by surrendering to the Corporation or the
     transfer agent of the Corporation the certificate or certificates for the
     shares to be converted, accompanied by written notice specifying the number
     of shares to be converted. Conversion will be deemed to have been effected
     on the date when delivery is made of notice of an election to convert and
     the certificate or certificates evidencing the Series C Preferred Stock
     shares to be converted and such date shall be the "Conversion Date."

          (ii) In the case of a Mandatory Conversion, the conversion shall be
     deemed to have been effective as of the date the Forced Conversion Notice
     is given by the Corporation and such date shall be the "Conversion Date,"
     and the holders of the Series C Preferred Stock shall promptly thereafter
     surrender their certificates evidencing their ownership of Series C
     Preferred Stock.

          (iii) Notwithstanding anything herein to the contrary, the Corporation
     may elect to satisfy all or any portion of its conversion obligation to a
     holder of shares of Series C Preferred Stock, whether arising pursuant to
     an Optional Conversion or a Mandatory Conversion (the "Conversion
     Obligation"), in cash or a combination of cash and Class A Common Stock.
     The Corporation will notify such holder of the dollar amount to be
     satisfied in cash (which must be expressed either as 100% of the Conversion
     Obligation or as a fixed dollar amount), in the case of an Optional
     Conversion, at any time on or before the date that is three business days
     following receipt of the written notice of conversion from the holder (such
     period, the "Cash Settlement Notice Period"), or, in the case of a
     Mandatory Conversion, in the Forced Conversion Notice. Settlement (in cash
     and/or shares) will occur on the business day following the final day of
     the five (5) Trading Day period beginning on, in the case of an Optional
     Conversion, the day after the final day of the Cash Settlement Notice
     Period, or, in the case of a Mandatory Conversion, the day after the date
     of the Forced Conversion Notice (the "Cash Settlement Averaging Period").
     Settlement amounts will be computed as follows:

                    (A) if the Corporation elects to satisfy the entire
          Conversion Obligation in shares of Class A Common Stock, the
          Corporation will deliver to such holder a number of full shares of
          Class A Common Stock to which such holder is entitled and a check or
          cash with respect to any fractional interest in a share of Class A
          Common Stock as provided in Section 5(d);

                    (B) if the Corporation elects to satisfy the entire
          Conversion Obligation in cash, the Corporation will deliver to such
          holder cash in an amount equal to the product of: (1) the number of
          full and fractional shares of Class A Common Stock to which such
          holder is entitled, and (2) the average Closing Price of the Class A
          Common Stock during the Cash Settlement Averaging Period; and

                    (C) if the Corporation elects to satisfy a fixed portion
          (other than 100%) of the Conversion Obligation in cash, the
          Corporation will deliver to such holder such cash amount ("Cash
          Amount") and a number of shares of Class A Common Stock equal to the
          greater of (1) one and (2) the excess, if any, of the

                                       12

<PAGE>

          number of shares calculated as set forth in clause (A) above (assuming
          for purposes of this calculation that the Corporation had elected to
          satisfy the entire Conversion Obligation in shares of Class A Common
          Stock) over the number of shares obtaining by dividing (x) the Cash
          Amount by (y) the average Closing Price of the Class A Common Stock
          during the Cash Settlement Average Period.

          (iv) Subject to the provisions of Section 5(e)(vi), the person in
     whose name the certificate or certificates for shares of Class A Common
     Stock are to be issued, if any, will be deemed to have become a holder of
     record of such Class A Common Stock on the applicable Conversion Date. Upon
     conversion of only a portion of the number of shares covered by a
     certificate representing shares of Series C Preferred Stock surrendered for
     conversion, the Corporation will issue and deliver to or upon the written
     order of the holder of the certificate so surrendered for conversion, at
     the expense of the Corporation, a new certificate covering the number of
     shares of Series C Preferred Stock representing the unconverted portion of
     the certificate so surrendered. Notwithstanding anything herein to the
     contrary, the Corporation will not be obligated to issue to any such holder
     the certificate or certificates evidencing the shares of Class A Common
     Stock issuable upon such conversion or deliver cash in lieu thereof, unless
     the certificate or certificates evidencing the shares of Series C Preferred
     Stock are either delivered to the Corporation or the transfer agent of the
     Corporation.

          (d) Fractional Shares. No fractional shares of Class A Common Stock or
     scrip will be issued upon conversion of shares of Series C Preferred Stock.
     If more than one share of Series C Preferred Stock is surrendered for
     conversion at any one time by the same holder, the number of full shares of
     Class A Common Stock issuable upon conversion thereof will be computed on
     the basis of the aggregate number of shares of Series C Preferred Stock so
     surrendered. Instead of any fractional shares of Class A Common Stock which
     would otherwise be issuable upon conversion of any shares of Series C
     Preferred Stock, the Corporation will pay a cash adjustment in respect of
     such fractional interest in an amount equal to that fractional interest
     based on the fair market value of the Class A Common Stock determined by
     the Corporation in its sole discretion.

          (e) Conversion Price Adjustments. The Conversion Price will be subject
     to adjustment from time to time as follows:

          (i) Stock Dividends, Subdivisions, Combinations, or Reclassifications.
     In case the Corporation shall (A) pay a dividend, or make a distribution,
     exclusively in shares of its capital stock on the Class A Common Stock; (B)
     subdivide or split its outstanding Class A Common Stock into a greater
     number of shares; (C) combine or reclassify its outstanding Class A Common
     Stock into a smaller number of shares; or (D) issue by reclassification of
     the shares of Class A Common Stock any shares of the Corporation's capital
     stock, the Conversion Price in effect immediately prior to the record date
     or effective date, as the case may be, for the adjustment pursuant to this
     Section 5(e)(i) as described below, shall be proportionately adjusted so
     that the holder of any Series C Preferred Stock thereafter surrendered for
     conversion shall be entitled to receive the number of shares of Class A
     Common Stock which such holder would have owned or have been entitled to
     receive after the happening of any of the

                                       13

<PAGE>

     events described above had such Series C Preferred Stock been converted
     immediately prior to such record date or effective date, as the case may
     be. An adjustment made pursuant to this Section 5(e)(i) shall become
     effective immediately after the applicable record date in the case of a
     dividend or distribution and shall become effective immediately after the
     applicable effective date in the case of subdivision, combination or
     reclassification of the Class A Common Stock. If any dividend or
     distribution of the type described in clause (A) above is not so paid or
     made, the Conversion Price shall again be adjusted to the Conversion Price
     that would then be in effect if such dividend or distribution had not been
     declared.

          (ii) Rights or Warrant Offerings. In case the Corporation shall issue
     rights or warrants to all holders of the Class A Common Stock entitling
     them (for a period expiring within 60 days after the date of issuance of
     such rights or warrants) to subscribe for or purchase Class A Common Stock
     at a price per share less than the Closing Price of Class A Common Stock on
     the record date fixed for determination of shareholders entitled to receive
     such rights or warrants, the Conversion Price in effect immediately after
     such record date shall be adjusted so that the same shall equal the
     Conversion Price determined by multiplying the Conversion Price in effect
     immediately after such record date by a fraction of which (i) the numerator
     shall be the number of shares of Class A Common Stock outstanding on such
     record date plus the number of shares which the aggregate offering price of
     the total number of shares so offered would purchase at the Closing Price
     of Class A Common Stock on the earlier of such record date or the Trading
     Day immediately preceding the ex date for such issuance of rights or
     warrants, and (ii) the denominator shall be the number of shares of Class A
     Common Stock outstanding on such record date plus the number of additional
     shares of Class A Common Stock offered for subscription or purchase. Such
     adjustment shall be made successively whenever any such rights or warrants
     are issued, and shall become effective immediately after the opening of
     business on the day following the record date for the determination of
     shareholders entitled to receive such rights or warrants. To the extent
     that shares of Class A Common Stock are not delivered after the expiration
     of such rights or warrants, the Conversion Price shall be readjusted to the
     Conversion Price which would then be in effect had the adjustments made
     upon the issuance of such rights or warrants been made on the basis of
     delivery of only the number of shares of Class A Common Stock actually
     delivered. If such rights or warrants are not so issued, the Conversion
     Price shall again be adjusted to be the Conversion Price which would then
     be in effect if such record date for the determination of shareholders
     entitled to receive such rights or warrants had not been fixed. In
     determining whether any rights or warrants entitle the holders to subscribe
     for or purchase shares of Class A Common Stock at less than such Closing
     Price, and in determining the aggregate offering price of such shares of
     Class A Common Stock, there shall be taken into account any consideration
     received by the Corporation for such rights or warrants, the value of such
     consideration, if other than cash, to be determined by the Board.

          (iii) Extraordinary Cash Dividends. In case the Corporation shall, by
     dividend or otherwise, distribute to all holders of its Class A Common
     Stock cash (excluding (x) any quarterly cash dividend on the Class A Common
     Stock for any fiscal quarter to the extent that the aggregate cash dividend
     per share of Class A Common

                                       14

<PAGE>

     Stock in such fiscal quarter does not exceed the greater of (A) the amount
     per share of Class A Common Stock of the next preceding quarterly cash
     dividend on the Class A Common Stock to the extent that such preceding
     quarterly dividend did not require any adjustment of the Conversion Price
     pursuant to this Section 5(e)(iii) (as adjusted to reflect subdivisions or
     combinations of the Class A Common Stock), and (B) 10% of the arithmetic
     average of the Closing Price per share on ten (10) Trading Days prior to
     the date of declaration of such dividend or distribution, and (y) any
     dividend or distribution in connection with the liquidation, dissolution or
     winding up of the Corporation, whether voluntary or involuntary), then, in
     such case, the Conversion Price in effect immediately prior to the close of
     business on the record date fixed for the determination of holders of Class
     A Common Stock entitled to receive such dividend or distribution shall be
     adjusted so that the same shall equal the Conversion Price determined by
     multiplying the Conversion Price in effect immediately before such record
     date by a fraction,

                         (a) the numerator of which shall be the Closing Price
               per share on such record date; and

                         (b) the denominator of which shall be the Closing Price
               per share on such record date plus the amount of cash so
               distributed (and not excluded as provided in this section)
               applicable to one share of the Class A Common Stock,

     such adjustment to be effective immediately prior to the opening of
     business on the day following such record date, provided that if the
     portion of the cash so distributed applicable to one share of Class A
     Common Stock is equal to or greater than the Closing Price on such record
     date, in lieu of the foregoing adjustment, adequate provision shall be made
     so that each holder of Series C Preferred Stock shall have the right to
     receive upon conversion the amount of cash such holder would have received
     had such holder converted each share of Series C Preferred Stock on such
     record date. If such dividend or distribution is not so paid or made, the
     Conversion Price shall again be adjusted to be the Conversion Price that
     would then be in effect if such dividend or distribution had not been
     declared. If any adjustment is required by this Section 5(e)(iii) as a
     result of a distribution that is a quarterly dividend, such adjustment
     shall be based upon the amount by which such distribution exceeds the
     amount of the quarterly cash dividend permitted to be excluded pursuant
     hereto. If an adjustment is required to be made as set forth in this
     Section 5(e)(iii) above as a result of a distribution that is not a
     quarterly dividend, such adjustment shall be based upon the full amount of
     the distribution.

          (iv) Other Distributions. In case the Corporation shall, by dividend
     or otherwise, distribute to all holders of Class A Common Stock any
     non-cash assets, debt securities, shares of capital stock of any class or
     series, or other securities (excluding any dividend, distribution or
     issuance covered by those referred to in Section 5(e)(i), 5(e)(ii) or
     5(e)(iii) hereof or in connection with a voluntary or involuntary
     liquidation, dissolution or winding up of the Corporation) (any of the
     foregoing hereinafter in this Section 5(e)(iv) called the "Distributed
     Assets or Notes"), then (unless the Corporation elects to reserve any such
     Distributed Assets or Notes for distribution to the holders of shares of
     Series C Preferred Stock upon the conversion of the shares of Series C
     Preferred Stock so

                                       15

<PAGE>

     that any such holder upon conversion will receive the amount and kind of
     such Distributed Assets or Notes which such holder would have received if
     such holder had converted its shares of Series C Preferred Stock
     immediately prior to the record date fixed for the determination of holders
     of Class A Common Stock entitled to receive such dividend or distribution)
     the Conversion Price shall be adjusted so that the same shall equal the
     Conversion Price determined by multiplying the Conversion Price in effect
     immediately prior to the close of business on the record date fixed for the
     determination of holders of Class A Common Stock entitled to receive such
     dividend or distribution by a fraction of which (A) the numerator shall be
     the Closing Price per share of the Class A Common Stock on the earlier of
     such record date or the Trading Day immediately preceding the ex date for
     such dividend or distribution, and (B) the denominator shall be (1) the
     Closing Price per share of the Class A Common Stock on the earlier of such
     record date or the Trading Day immediately preceding the ex date for such
     dividend or distribution plus (2) the fair market value on the earlier of
     such record date or the Trading Day immediately preceding the ex date for
     such dividend or distribution (as determined in good faith by the Board) of
     the Distributed Assets or Notes so distributed applicable to one share of
     Class A Common Stock. Such adjustment shall become effective immediately
     after such record date. In the event that such distribution is not so paid
     or made, the Conversion Price shall again be adjusted to the Conversion
     Price which would then be in effect if such distribution had not been
     declared.

          (v) Rounding of Calculations; Minimum Adjustment. All calculations
     under this Section 5(e) will be made to the nearest cent or to the nearest
     one hundredth (1/100th) of a share, as the case may be. Any provision of
     this Section 5 to the contrary notwithstanding, no adjustment in the
     Conversion Price will be made if the amount of such adjustment would be
     less than $0.05, but any such amount will be carried forward and an
     adjustment with respect thereto will be made at the time of and together
     with any subsequent adjustment which, together with such amount and any
     other amount or amounts so carried forward, will aggregate $0.05 or more.

          (vi) Timing of Issuance of Additional Class A Common Stock Upon
     Certain Adjustments. In any case in which the provisions of this Section
     5(e) requires that an adjustment be made in connection with any event, the
     Corporation may defer, until the occurrence of such event, (A) issuing to
     the holder of any share of Series C Preferred Stock converted after the
     relevant record date and before the occurrence of such event the additional
     shares of Class A Common Stock issuable upon such conversion by reason of
     the adjustment required by such event over and above the shares of Class A
     Common Stock issuable upon such conversion before giving effect to such
     adjustment and (B) paying to such holder any amount of cash in lieu of a
     fractional share of Class A Common Stock pursuant to Section 5(d);
     provided, however, that the Corporation upon request will deliver to such
     holder a due bill or other appropriate instrument evidencing such holder's
     right to receive such additional shares and such cash, upon the occurrence
     of the event requiring such adjustment.

          (f) Statement Regarding Adjustments. Whenever the Conversion Price is
     adjusted as provided in Section 5(e), the Corporation will file, at the
     office of any transfer agent for the Series C Preferred Stock and at the
     principal office of the Corporation, a

                                       16

<PAGE>

     statement showing in detail the facts requiring such adjustment and the
     Conversion Price in effect after such adjustment, and the Corporation will
     also cause a copy of such statement to be sent by mail, first class postage
     prepaid, to each holder of shares of Series C Preferred Stock at such
     holders address appearing on the Corporation's records. Each such statement
     will be signed by the Corporation's independent public accountants, if
     applicable. Where appropriate, such copy may be given in advance and may be
     included as part of a notice required to be mailed under the provisions of
     Section 6(c).

          (g) Conditional Conversion. If it is proposed that a registration of
     Class A Common Stock is intended to be filed, except on Form S-4 or S-8 (or
     any successor forms), which includes the secondary registration on behalf
     of holders of Class A Common Stock generally, the Corporation will notify
     the holders of Series C Preferred Stock of such proposed registration and
     such holders may conditionally exercise their right to convert any or all
     of such shares of Series C Preferred Stock so held in accordance with this
     Section 5 and participate in such proposed registration in accordance with
     the registration rights granted to such holder by the Corporation, if any.
     If such registration is not declared effective or is withdrawn, any
     conditional exercise pursuant to this Section 5(g) will be null and void ab
     initio. Only the number of shares of Class A Common Stock conditionally
     converted pursuant to this Section 5(g) that are actually sold under an
     effective registration statement will be deemed converted pursuant to
     Section 5(a) and the conditional conversion of such shares will be null and
     void ab initio upon the termination of the offering under such registration
     statement.

          (h) Costs. The Corporation will pay all documentary, stamp, transfer,
     or other transactional taxes attributable to the issuance or delivery of
     shares of Class A Common Stock upon conversion of any shares of Series C
     Preferred Stock; provided, however, that the Corporation will not be
     required to pay any taxes which may be payable in respect of any transfer
     involved in the issuance or delivery of any certificate for such shares in
     a name other than that of the holder of the shares of Series C Preferred
     Stock in respect of which such shares are being issued.

          (i) Reservation of Shares. The Corporation will reserve at all times
     so long as any shares of Series C Preferred Stock remain outstanding, free
     from preemptive rights, out of its treasury stock (if applicable) or its
     authorized but unissued shares of Common Stock, or both, solely for the
     purpose of effecting the conversion of the shares of Series C Preferred
     Stock, sufficient shares of Common Stock to provide for the conversion of
     all outstanding shares of Series C Preferred Stock.

          (j) Valid Issuance. All shares of Common Stock which may be issued
     upon conversion of the shares of Series C Preferred Stock will, upon
     issuance by the Corporation, be duly and validly issued, fully paid and
     nonassessable and free from all taxes, liens, and charges with respect to
     the issuance thereof, and the Corporation will take no action which will
     cause a contrary result (including, without limitation, any action which
     would cause the Conversion Price to be less than the par value, if any, of
     the Common Stock).

                                       17

<PAGE>

          (k) Automatic Conversion into Class B Common Stock in Certain
     Circumstances. All shares of Class A Common Stock which may be issued upon
     conversion of the Series C Preferred Stock are subject to automatic
     conversion into Shares of Class B Common Stock in the circumstances and
     with the effects specified in Article 4, Paragraphs 2C.(3)(d) and (e) of
     the Articles of Incorporation.

          (l) Shareholder Approval. Notwithstanding anything to the contrary
     contained herein, conversion of the Series C Preferred Stock may not occur
     unless and until either (i) the shareholders shall have, in accordance with
     the IBCA and NYSE Requirements, approved the issuance of shares of Common
     Stock into which the Series C Preferred Stock is convertible or (ii) (A)
     the Board (on advice of counsel) shall have determined that shareholder
     approval is not required by either the IBCA or NYSE Requirements in
     connection with such conversion, (B) representatives of the New York Stock
     Exchange shall have affirmatively agreed with the such determination, and
     (C) notice of such determination (accompanied by written advice of counsel
     addressed to the holders of Series C Preferred Stock as well as evidence of
     the agreement of the New York Stock Exchange) shall have been given to all
     holders of the Series C Preferred Stock.

     6. CORPORATE EVENTS.

          (a) Merger. In case of (i) any reclassification or change of
     outstanding shares of Common Stock (other than a change in par value or
     from par value to no par value or from no par value to par value, or as a
     result of a subdivision or combination), (ii) any consolidation or merger
     of the Corporation with one or more other corporations (other than any
     consolidation or merger in which the Corporation is the continuing
     corporation and which does not result in any reclassification, conversion,
     exchange or cancellation of outstanding shares of Common Stock issuable
     upon conversion of the Series C Preferred Stock), (iii) any sale or
     conveyance to another corporation or other entity of all or substantially
     all of the property of the Corporation, or (iv) any other transaction which
     would constitute a Change of Control of the Corporation, then the
     Corporation, or such successor corporation or other entity, as the case may
     be, shall make appropriate provision so that the holder of each share of
     the Series C Preferred Stock then outstanding shall have the right
     thereafter, to convert such share of the Series C Preferred Stock into the
     kind and amount of securities, cash and other property receivable upon such
     consolidation, merger, sale, reclassification, change or conveyance by a
     holder of the number of shares of Common Stock into which such share of the
     Series C Preferred Stock might have been converted immediately prior to
     such consolidation, merger, sale, reclassification, change or conveyance,
     subject to such adjustment which shall be as nearly equivalent as may be
     practicable to the adjustments provided in Section 5(e). The above
     provisions of this Section 6(a) shall similarly apply to successive
     consolidations, mergers, conveyances or transfers.

          (b) Offer to Repurchase. In addition to the foregoing, upon the
     occurrence of a Change of Control, the Corporation shall make an offer (a
     "Change of Control Offer") to each holder of shares of the Series C
     Preferred Stock to repurchase all or any part of each such holder's shares
     of the Series C Preferred Stock at an offer price in cash (the

                                       18

<PAGE>

     "Change of Control Payment") equal to 100% of the Liquidation Value - per
     share as of the Change of Control Payment Date. The Corporation shall
     comply with the requirements of Rule 14e-1 under the Exchange Act and any
     other securities laws and regulations thereunder to the extent such laws
     and regulations are applicable in connection with the repurchase of shares
     of the Series C Preferred Stock as a result of a Change of Control, and the
     Corporation shall not be in violation of this resolution by reason of any
     act, including any failure to act, required by such rule or other
     applicable law or regulation.

     Within 25 days following any Change of Control, the Corporation shall mail
     a notice to each holder of shares of the Series C Preferred Stock stating:

          (i) that the Change of Control Offer is being made pursuant to this
     Section 6 and that all shares of the Series C Preferred Stock tendered will
     be accepted for payment;

          (ii) the purchase price and the purchase date, which shall be at least
     30 but no more than 60 days from the date on which the Corporation mails
     notice of the Change of Control (the "Change of Control Payment Date");

          (iii) that any shares of the Series C Preferred Stock not tendered
     will continue to accrue dividends as provided in this resolution;

          (iv) that, unless the Corporation defaults in the payment of the
     Change of Control Payment, all shares of the Series C Preferred Stock
     accepted for payment pursuant to the Change of Control Offer shall cease to
     accrue dividends after the Change of Control Payment Date;

          (v) that holders of shares of the Series C Preferred Stock electing to
     have any shares of the Series C Preferred Stock purchased pursuant to a
     Change of Control Offer shall be required to surrender the shares of the
     Series C Preferred Stock to the Corporation or its designated agent (the
     "Paying Agent") for such purpose, at the address specified in the notice
     prior to the close of business on the third Business Day preceding the
     Change of Control Payment Date; and

          (vi) that holders of shares of the Series C Preferred Stock will be
     entitled to withdraw their election if the Corporation or the Paying Agent
     receives, not later than the close of business on the second Business Day
     preceding the Change of Control Payment Date, a telegram, telex, facsimile
     transmission or letter setting forth the name of the holder of shares of
     the Series C Preferred Stock, the number of shares of the Series C
     Preferred Stock delivered for purchase, and a statement that such holder is
     withdrawing his election to have such shares purchased.

     On the Change of Control Payment Date, the Corporation shall, to the extent
     lawful, (x) accept for payment all shares of the Series C Preferred Stock
     tendered pursuant to the Change of Control Offer, and (y) deposit with the
     Paying Agent an amount equal to the Change of Control Payment in respect of
     all shares of the Series C Preferred Stock so accepted for payment. The
     Corporation shall promptly mail to each holder of shares of

                                       19

<PAGE>

     the Series C Preferred Stock so tendered the Change of Control Payment for
     such shares. The Corporation shall publicly announce the results of the
     Change of Control Offer on or as soon as practicable after the Change of
     Control Payment Date.

          (c) Notice of Record Date. In case at any time or from time to time
     (i) the Corporation shall pay any stock dividend or make any other non-cash
     distribution to the holders of its Common Stock, or offer for subscription
     pro rata to the holders of its Common Stock any additional shares of stock
     of any class or any other right, or (ii) there shall be any capital
     reorganization or reclassification of the Common Stock of the Corporation
     or consolidation or merger of the Corporation with or into another
     corporation, or any sale or conveyance to another corporation of the
     property of the Corporation as an entirety or substantially as an entirety,
     or (iii) there shall be a voluntary or involuntary dissolution, liquidation
     or winding up of the Corporation, then, in any one or more of said cases
     the Corporation shall give at least 20 days' prior written notice (the time
     of mailing of such notice shall be deemed to be the time of giving thereof)
     to the registered holders of the Series C Preferred Stock at the addresses
     of each as shown on the books of the Corporation maintained by the transfer
     agent thereof of the date on which (A) a record shall be taken for such
     stock dividend, distribution or subscription rights or (B) such
     reorganization, reclassification, consolidation, merger, sale or
     conveyance, dissolution, liquidation or winding up shall take place, as the
     case may be; provided that, in the case of any transaction to which Section
     6(a) applies the Corporation shall give at least 30 days' prior written
     notice as aforesaid. Such notice shall also specify the date as of which
     the holders of the Common Stock of record shall participate in said
     dividend, distribution or subscription rights or shall be entitled to
     exchange their Common Stock for securities or other property deliverable
     upon such reorganization, reclassification, consolidation, merger, sale or
     conveyance or participate in such dissolution, liquidation or winding up,
     as the case may be. Such notice will also set forth such facts as will be
     reasonably necessary to indicate the effect of such corporate action (to
     the extent such effect may be known at the date of such notice) on the
     Conversion Price, if any, under Section 5(a), and the number, kind, or
     class of shares or other securities or property which will be deliverable
     upon conversion of shares of Series C Preferred Stock. Failure to give such
     notice shall not affect the legality or validity of any action so taken.

     7. VOTING RIGHTS. If the holders of shares of Series C Preferred Stock have
the right to vote separately as a class pursuant to the IBCA or Section 12
hereof, such holders will be entitled to one vote for each such share so held.
In all other cases, the holders of shares of Series C Preferred Stock will not
be entitled to vote.

     8. EXCLUSION OF OTHER RIGHTS. Except as may otherwise be required by law,
the shares of Series C Preferred Stock will not have any preferences or
relative, participating, optional, or other special rights, other than those
specifically set forth in this Statement of Resolution. The shares of Series C
Preferred Stock will have no preemptive or subscription rights.

                                       20

<PAGE>

     9. HEADINGS OF SUBDIVISIONS. The headings of the various subdivisions
hereof are for convenience of reference only and will not affect the
interpretation of any of the provisions hereof.

     10. SEVERABILITY OF PROVISIONS. If any right, preference, or limitation of
the Series C Preferred Stock set forth in this resolution (as such resolution
may be amended from time to time) is invalid, unlawful, or incapable of being
enforced by reason of any rule of law or public policy, all other rights,
preferences, and limitations set forth in this resolution (as so amended) which
can be given effect without the invalid, unlawful or unenforceable right,
preference, or limitation will, nevertheless, remain in full force and effect,
and no right, preference, or limitation herein set forth will be deemed
dependent upon any other such right, preference, or limitation unless so
expressed herein.

     11. STATUS OF REACQUIRED SHARES. Shares of Series C Preferred Stock which
have been issued and reacquired in any manner will (upon cancellation by the
Corporation and compliance with any applicable provisions of the laws of the
State of Illinois) have the status of authorized and unissued shares of
Preferred Stock issuable in series undesignated as to series and may be
redesignated and reissued.

     12. ISSUANCE OF ADDITIONAL SECURITIES. Nothing contained herein will be
deemed to any way prohibit, restrict, or inhibit the ability of the Corporation
to designate and/or issue additional securities of any kind, including, without
limitation, shares of Parity Stock or Junior Stock; provided that, the
Corporation may not designate and/or issue any shares of Senior Stock without
the consent of a majority of the shares of Series C Preferred Stock, other than
shares of Senior Stock designated and/or issued by the Corporation (i) in
connection with a bona fide transaction where the consideration paid for such
shares of Senior Stock consists primarily of cash or (ii) in connection with a
Board-approved acquisition (whether by stock sale, merger, recapitalization,
asset sale or otherwise) of any business or entity by the Corporation where such
Senior Stock comprises all or a portion of the purchase price thereof.

                                       21

<PAGE>

     The Corporation has caused this statement to be signed by its duly
authorized officers, each of whom affirms, under penalties of perjury, that the
facts stated herein are true.

Date: August 6, 2003                      DYNEGY INC.

                                          By: /s/ Bruce A. Williamson
                                              ----------------------------------
                                              Name: Bruce A. Williamson
                                              Title: President and CEO

                                          By: /s/ Carol Graebner
                                              ----------------------------------
                                              Name: Carol Graebner
                                              Title: EVP and General Counsel

                                       22<PAGE>

                                                                     Exhibit 4.2

                   EXCHANGE AND REGISTRATION RIGHTS AGREEMENT

                                (PREFERRED STOCK)

                                     BETWEEN

                                  DYNEGY INC.,

                                     ISSUER,

                                       AND

                              CHEVRON U.S.A. INC.,

                                 INITIAL HOLDER

                           DATED AS OF AUGUST 11, 2003

<PAGE>

     This EXCHANGE AND REGISTRATION RIGHTS AGREEMENT (PREFERRED STOCK) dated as
of August 11, 2003 (this "Agreement") is between Dynegy Inc., an Illinois
corporation (the "Company"), and Chevron U.S.A. Inc., a Pennsylvania corporation
(the "Initial Holder").

     The Company agrees with the Initial Holder, (i) for its benefit as Initial
Holder and (ii) for the benefit of the beneficial owners (including the Initial
Holder) from time to time of the Convertible Securities (as defined herein) and
the beneficial owners from time to time of the Underlying Common Stock (as
defined herein) issued upon conversion of the Convertible Securities (each of
the foregoing a "Holder" and together the "Holders"), as follows:

     SECTION 1. Definitions. As used in this Agreement, the following terms
shall have the following meanings:

     "144A Demand Notice" is defined in Section 2(a).

     "144A Marketing Assistance" means the Company's obligations under Section
2(a) with respect to a 144A Resale following receipt of a 144A Demand Notice.

     "144A Minimum Resale" means one or more 144A Resales by CUSA resulting in
the sale of more than 25% of the Convertible Securities initially held by CUSA
to one or more persons who are not Affiliates of CUSA.

     "144A Resale" is defined in Section 2(a).

     "144A Resale Attempt" means an attempt to market and/or consummate a 144A
Resale which shall be deemed to have been initiated upon the Company's receipt
of a 144A Demand Notice and shall be deemed to have been completed upon the
first to occur of (i) the termination of 144A Marketing Assistance in accordance
with Section 2(a) with respect to such 144A Resale Attempt or (ii) the
consummation of the subject 144A Resale.

     "Affiliate" means with respect to any specified person, an "affiliate," as
defined in Rule 144, of such person.

     "Amendment Effectiveness Deadline Date" has the meaning set forth in
Section 3(d)(i) hereof.

     "Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in The City of New York are
authorized or obligated by law or executive order to close.

     "Common Stock" means the shares of Class A common stock, no par value, of
the Company.

     "Common Stock Demand Registration" means any "Demand Registration," as
defined in the Common Stock Registration Rights Agreement, involving an
underwritten offering of Common Stock pursuant to the Common Stock Registration
Rights Agreement.

<PAGE>

     "Common Stock Registration Rights Agreement" means the Amended and Restated
Registration Rights Agreement (Common Stock) dated the date hereof between the
Company and CUSA.

     "Conversion Price" has the meaning assigned such term in the Statement of
Resolution.

     "Convertible Securities" means the Series C Convertible Preferred Stock of
the Company.

     "Cross-Over Date" has the meaning specified in the Statement of Resolution.

     "CUSA" means Chevron U.S.A., Inc, a Pennsylvania corporation.

     "Damages Accrual Period" has the meaning set forth in Section 3(e) hereof.

     "Damages Payment Date" means each February 1 and August 1, beginning
February 1, 2004.

     "Deferral Notice" has the meaning set forth in Section 4(h) hereof.

     "Deferral Period" has the meaning set forth in Section 4(h) hereof.

     "Effectiveness Deadline Date" has the meaning set forth in Section 3(a)
hereof.

     "Effectiveness Period" means the period commencing on the date hereof and
ending on the date that all Registrable Securities have ceased to be Registrable
Securities.

     "Event" has the meaning set forth in Section 3(e) hereof.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any successor Federal statue, and the rules and regulations thereunder, all as
the same shall be in effect at the time. Reference to a particular section of,
or rule or regulation under, the Exchange Act shall include a reference to the
comparable section, rule or regulation, if any, and as the case may be, of or
under the successor Federal statute.

     "Exchange Agreement" means the Series B Preferred Stock Exchange Agreement
dated July 28, 2003 between the Company and the Initial Holder.

     "Exchange Offer" is defined in Section 2(b)(i).

     "Exchange Offer Demand Date" means the date of the receipt by the Company
of an Exchange Offer Demand Notice.

     "Exchange Offer Demand Notice" is defined in Section 2(b)(i).

     "Exchange Offer Effectiveness Deadline Date" means the 180th day after the
Exchange Offer Demand Date.

     "Exchange Offer Filing Date" means the 90th day after the Exchange Offer
Demand Date.

                                       2

<PAGE>

     "Exchange Registration Statement" is defined in Section 2(b)(i).

     "Exchange Securities" is defined in Section 2(b)(i).

     "Filing Deadline Date" means the Cross-Over Date; provided, however, that
the Filing Deadline Date shall be extended by the aggregate number of days
during which the Company is obligated to provide 144A Marketing Assistance
pursuant to Section 2(a), plus a period of ninety (90) additional days.

     "Holder" has the meaning set forth in the second paragraph of this
Agreement.

     "indemnified Party" is defined in Section 7(c).

     "indemnifying Party" is defined in Section 7(c).

     "Initial Holder" means Chevron U.S.A. Inc.

     "Initial Shelf Registration Statement" has the meaning set forth in Section
3(a) hereof.

     "Liquidated Damages Amount" has the meaning set forth in Section 3(e)
hereof.

     "Material Event" has the meaning set forth in Section 4(h) hereof.

     "Notice and Questionnaire" means a written notice delivered to the Company
containing substantially the information called for by the Selling
Securityholder Notice and Questionnaire attached as Annex A hereto.

     "Notice Holder" means, on any date, any Holder that has delivered a Notice
and Questionnaire to the Company on or prior to such date.

     "Offering Document" means an offering memorandum of the Company prepared
for use in connection with a 144A Resale pursuant to Section 2(a) hereof that is
similar in form and substance to a Prospectus and also contains the information
required by subsection (d)(4) of Rule 144A (including, without limitation, any
Offering Document that is subject to completion and any Offering Document that
includes any information omitted from a previously distributed Offering
Document), as amended or supplemented, together with each document incorporated
by reference therein or that forms an exhibit, appendix, schedule or attachment
thereto.

     "Other 144A Demand Notice" is defined in Section 2(c).

     "Prospectus" means the prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any amendment or prospectus supplement, including
post-effective amendments, and all materials incorporated by reference or
explicitly deemed to be incorporated by reference in such Prospectus.

     "Record Holder" means with respect to any Damages Payment Date relating to
any Convertible Security or Underlying Common Stock as to which any Liquidated
Damages

                                       3

<PAGE>

Amount has accrued, the registered holder of such Convertible Security or
Underlying Common Stock on the January 15 or July 15, as the case may be,
immediately preceding a Damages Payment Date.

     "Registrable Securities" means any Convertible Securities until such
Convertible Securities have been converted into or exchanged for the Underlying
Common Stock and, at all times subsequent to any such conversion, the Underlying
Common Stock and any securities into or for which such Underlying Common Stock
has been converted or exchanged, and any security issued with respect thereto
upon any stock dividend, split or similar event until, in the case of any such
Convertible Security or Underlying Common Stock or other security, (A) the
earliest of (i) its effective registration under the Securities Act and resale
in accordance with the Registration Statement covering it, (ii) expiration of
the holding period that would be applicable thereto under Rule 144(k) or (iii)
its sale to the public pursuant to Rule 144 (or any similar provision then in
force, but not Rule 144A) under the Securities Act, and (B) as a result of the
event or circumstance described in any of the foregoing clauses (i) through
(iii), the legend with respect to transfer restrictions required under the
Exchange Agreement is removed or removable in accordance with the terms of the
Exchange Agreement or such legend, as the case may be; provided, however, that,
if upon a conversion of the Convertible Securities the Common Stock would
constitute "Registrable Common Stock" under the Common Stock Registration Rights
Agreement, then such Common Stock shall not be Registrable Securities hereunder.

     "Registration Statement" means any registration statement of the Company
that covers any of the Registrable Securities pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits and
all materials incorporated by reference or explicitly deemed to be incorporated
by reference in such registration statement.

     "Rule 144" means Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.

     "Rule 144A" means Rule 144A under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.

     "SEC" means the Securities and Exchange Commission.

     "Securities Act" means the Securities Act of 1933, as amended, or any
successor Federal statue, and the rules and regulations thereunder, all as the
same shall be in effect at the time. Reference to a particular section of, or
rule or regulation under, the Securities Act shall include a reference to the
comparable section, rule or regulation, if any, and as the case may be, of or
under the successor Federal statute.

     "Shelf Notice" has the meaning set forth in Section 2(b)(iii) hereof.

     "Shelf Registration Statement" has the meaning set forth in Section 3(a)
hereof.

     "Special Counsel" means Pillsbury Winthrop LLP or one such other successor
counsel as shall be specified by the Holders of a majority of the Registrable
Securities, but which may, with the written consent of the Initial Holder (which
shall not be unreasonably withheld), be another nationally recognized law firm
experienced in securities law matters designated by the Company,

                                       4

<PAGE>

the reasonable fees and expenses of which will be paid by the Company pursuant
to Section 6 hereof. For purposes of determining the holders of a majority of
the Registrable Securities in this definition, Holders of Convertible Securities
shall be deemed to be the Holders of the number of shares of Underlying Common
Stock into which such Convertible Securities are or would be convertible as of
the date the consent is requested.

     "Statement of Resolution" means the Statement of Resolution Establishing
Series C Convertible Preferred Stock adopted by the Company's Board of Directors
on July 31, 2003 and filed with the Illinois Secretary of State prior to the
date hereof establishing and designating the Series C Convertible Preferred
Stock and fixing and determining the relative rights and preferences thereof.

     "Subsequent Shelf Registration Statement" has the meaning set forth in
Section 3(b) hereof.

     "Underlying Common Stock" means the Common Stock into which the Convertible
Securities are convertible or issued upon any such conversion.

     SECTION 2. Resale Assistance. (a) 144A Marketing Assistance. At any time
following the date that is 45 days prior to the Filing Deadline Date and prior
to the date that is 15 days prior to the Filing Date Deadline, upon receipt of a
written request from CUSA (a "144A Demand Notice"), the Company will provide
reasonable and customary assistance to CUSA in completing a private resale of
the Securities pursuant to Rule 144A or another offering exempt from the
registration requirements of the Securities Act (a "144A Resale"), which
assistance will involve the customary efforts an issuer provides to initial
purchasers in a private resale of securities pursuant to Rule 144A; provided,
that (A) the Company will not be required to provide such assistance in
connection with more than three 144A Resale Attempts in aggregate, (B) the
Company will not be required to provide such assistance in connection with more
than one 144A Resale Attempt in any 270 day period, (C) the Company's
obligations pursuant to this Section 2(a) shall be suspended during any Deferral
Period, (D) CUSA and the Company shall each act in good faith to plan all
activities in connection with any 144A Resale Attempt so as not to materially
interfere with the Company's public financial reporting process or any Common
Stock Demand Registration, (E) CUSA shall retain, at its sole expense, a
nationally recognized investment banking firm reasonably acceptable to the
Company to act as the initial purchaser or underwriter of such 144A Resale on a
firm commitment basis (the "Underwriter"), it being understood that so long as
(I) CUSA and the Underwriter contemplate entering into a firm commitment
underwriting or purchase arrangement in connection with the subject 144A Resale
during the course of 144A Marketing Assistance and (II) if such 144A Resale is
consummated, it is consummated pursuant to such a firm commitment underwriting
or purchase arrangement, the Underwriter shall be deemed to be acting on a firm
commitment basis, and (F) prior to delivery of a 144A Demand Notice, CUSA shall
have been advised by its anticipated Underwriter in writing that it is
reasonably confident that there are potential purchasers of the Convertible
Securities at such time. Notwithstanding anything to the contrary contained
herein, (1) if two 144A Resales that are the subject of such 144A Resale
Attempts are consummated, the Company shall have no further obligation to
register Registrable Securities pursuant to this Agreement, other than pursuant
to Section 2(b), (2) the Company will not be required to provide such 144A
Marketing Assistance following the consummation of two 144A Resales or the
performance by the Company of its obligations pursuant to this Section 2(a) in
connection with three 144A

                                       5

<PAGE>

Resale Attempts, (3) at any time following delivery of a 144A Demand Notice,
CUSA may terminate the Company's obligation to provide 144A Marketing Assistance
in connection with such 144A Demand Notice by delivering written notice of such
termination to the Company and (4) upon the filing of a Shelf Registration
Statement pursuant to Section 3, the obligations of the Company under this
Section 2(a) shall terminate. In connection with such a 144A Resale, the
Company's assistance shall include:

               (i) The preparation of a preliminary Offering Document, omitting
     pricing related information, within 45 days of the Company's receipt of a
     properly given 144A Demand Notice; provided that before finalizing any such
     preliminary Offering Document the Company shall, if requested, furnish to
     and afford CUSA, its counsel and the Underwriter, a reasonable opportunity
     to review copies of such preliminary Offering Document at least five (5)
     Business Days prior to finalizing such document. CUSA shall not be
     obligated to accept any preliminary Offering Document as to which it, its
     counsel or the Underwriter shall reasonably object within five (5) Business
     Days of their receipt of such materials. Following the preparation of a
     preliminary Offering Document, within one Business Day of CUSA's written
     request therefor (if received prior to 4:00 p.m., New York time, or two
     Business Days otherwise), the Company shall use its reasonable best efforts
     to prepare a final Offering Document containing pricing information
     provided by CUSA previously omitted from the preliminary Offering Document.

               (ii) The notification of CUSA, its counsel and the Underwriter
     promptly (but in any event within three Business Days), in writing, (A) of
     the issuance by the SEC of any order preventing or suspending the use of
     any preliminary Offering Document or the initiation of any proceedings for
     that purpose; (B) of the receipt by the Company of any notification with
     respect to the suspension of the qualification or exemption from
     qualification of a preliminary Offering Document or any of the Convertible
     Securities for offer or sale in any jurisdiction, or the initiation or
     threatening of any proceeding for such purpose; and (C) of the happening of
     any event, the existence of any condition or any information becoming known
     that makes any statement made in such preliminary Offering Document untrue
     in any material respect or that requires the making of any changes in, or
     amendments or supplements to, such preliminary Offering Document so that it
     will not contain any untrue statement of a material fact or omit to state
     any material fact required to be stated therein or necessary to make the
     statements therein, in the light of the circumstances under which they were
     made, not misleading.

               (iii) The Company's use of its reasonable best efforts to prevent
     the issuance of any order preventing or suspending the use of an Offering
     Document or suspending the qualification (or exemption from qualification)
     of any of the Convertible Securities, for sale in any jurisdiction, and, if
     any such order is issued, the Company's use of its reasonable best efforts
     to obtain the withdrawal of any such order at the earliest possible date.

               (iv) At any time prior to the earlier of (x) consummation of a
     144A Resale of Convertible Securities covered by a final Offering Document
     or (y) the completion of the subject 144A Resale Attempt, upon the
     occurrence of any event contemplated by paragraph 2(a)(ii)(C) hereof, as
     promptly as practicable preparing an amendment or supplement to the final
     Offering Document so that the Offering

                                       6

<PAGE>

     Document, as thereafter delivered to the purchasers of the Convertible
     Securities being sold thereunder, will not contain an untrue statement of a
     material fact or omit to state a material fact required to be stated
     therein or necessary to make the statements therein, in the light of the
     circumstances under which they were made, not misleading.

               (v) The delivery to CUSA, its counsel, and the Underwriter of as
     many copies of the preliminary and final Offering Document as such persons
     may reasonably request. The Company hereby consents to the use of any such
     Offering Document by CUSA and the Underwriter and dealers (if any), in
     connection with the offering and sale of the Securities covered by such
     Offering Document.

               (vi) Prior to any 144A Resale of Convertible Securities covered
     by an Offering Document, the Company's use of its reasonable best efforts
     to register or qualify, and the cooperation with CUSA, its counsel and the
     Underwriter in connection with the registration or qualification (or
     exemption from such registration or qualification) of such Convertible
     Securities for offer and sale under the securities or Blue Sky laws of such
     state and local jurisdictions within the United States as CUSA or the
     Underwriter may reasonably request in writing; the maintenance of
     effectiveness of each such registration or qualification (or exemption
     therefrom) during the period it is required to be kept effective and the
     performance of all other acts or things reasonably necessary or advisable
     to enable the disposition in such jurisdictions of the Convertible
     Securities covered by the applicable Offering Document; provided that the
     Company shall not be required to (i) qualify generally to do business in
     any jurisdiction where it is not then so qualified; (ii) take any action
     that would subject it to general service of process in any such
     jurisdiction where it is not then so subject; or (iii) subject itself to
     taxation in excess of a nominal dollar amount in any such jurisdiction
     where it is not then so subject.

               (vii) The cooperation with CUSA and the Underwriter to facilitate
     the timely preparation and delivery of certificates representing
     Convertible Securities to be sold, which certificates shall be in a form
     eligible for deposit with The Depository Trust Company and otherwise in
     such denominations and registered in such names as the Underwriter or CUSA
     may reasonably request.

               (viii) Prior to the 144A Resale of the Convertible Securities
     covered by an Offering Document, (i) providing a transfer agent and
     registrar for such Convertible Securities, (ii) providing such transfer
     agent and registrar with certificates for such Convertible Securities in a
     form eligible for deposit with The Depository Trust Company, and (iii)
     providing a CUSIP number for such Convertible Securities.

               (ix) Entering into and performing customary underwriting or
     purchase agreements with any Underwriter selected as set forth above and
     making such representations (as are customarily made by issuers to
     underwriters) and taking such other actions in connection therewith in
     order to facilitate the 144A Resale of the Convertible Securities covered
     by an Offering Document as may be reasonably requested by CUSA.

               (x) Making available at reasonable times for inspection by CUSA,
     its counsel and the Underwriter participating in the 144A Resale all
     financial and other

                                       7

<PAGE>

     records, pertinent corporate documents and properties of the Company and
     its subsidiaries as shall be reasonably necessary to enable them to
     exercise their due diligence responsibility, and causing the Company's and
     its subsidiaries' officers, directors and employees, and the independent
     public accountants of the Company, to supply all information reasonably
     requested by any such persons in connection therewith; provided that such
     persons shall first agree in writing with the Company that any non-public
     information shall be kept confidential by such persons and shall be used
     solely for the purposes of exercising rights under this Agreement, unless
     (i) disclosure of such information is required by court or administrative
     order or is necessary to respond to inquiries of regulatory authorities,
     (ii) disclosure of such information is required by law (including any
     disclosure requirements pursuant to federal securities laws in connection
     with the filing of any Registration Statement or the use of any Prospectus
     or Offering Document referred to in this Agreement), (iii) such information
     becomes generally available to the public other than as a result of a
     disclosure or failure to safeguard by any such person or (iv) such
     information becomes available to any such person from a source other than
     the Company and such source is not bound by a confidentiality agreement,
     and provided further that the foregoing inspection and information
     gathering shall, to the greatest extent possible, be coordinated on behalf
     of all Underwriters and the other parties entitled thereto by its counsel.
     Any person legally compelled to disclose any such confidential information
     made available for inspection shall provide the Company with prompt prior
     written notice of such requirement so that the Company may seek a
     protective order or other appropriate remedy.

               (xi) Causing to be delivered to the Underwriter (i) "cold
     comfort" letters dated the date of the underwriting or purchase agreement
     and the date of the closing under the underwriting or purchase agreement
     from the Company's independent public accountants in form reasonably
     satisfactory to the Underwriters selected as set forth above and covering
     such matters of the type customarily covered by "cold comfort" letters (to
     the extent permitted by applicable accounting literature) as the
     Underwriter reasonably requests, (ii) one or more opinions of counsel,
     dated the date of consummation of such 144A Resale, addressing customary
     matters relating to the Company, such 144A Resale and the securities sold
     pursuant thereto, including, without limitation, a customary "10b-5"
     statement and (iii) such customary certificates from officers of the
     Company as the Underwriter may reasonably request.

               (xii) Making executive officers of the Company available, upon
     reasonable notice, to participate in customary road shows and other
     informational meetings and conference calls with prospective purchasers as
     may be reasonably requested by the Underwriter; provided, that such road
     show or series of informational meetings shall not extend beyond a period
     of three days and provided further that CUSA shall act in good faith to
     limit the duration and frequency of such activities such that they would
     not reasonably be expected to interfere with such executive officers'
     performance of their regular duties on behalf of the Company.

               (xiii) The Company's use of its reasonable best efforts to cause
     the Convertible Securities covered by an Offering Document to be rated with
     the one or more nationally recognized rating agencies, if so requested by
     the Underwriter.

                                       8

<PAGE>

               (xiv) Obtaining the approval of The Depository Trust Company for
     "book-entry" transfer of the Convertible Securities, and compliance with
     all of its agreements set forth in the representation letters of the
     Company to DTC relating to the approval of the Securities by DTC for
     "book-entry" transfer.

               (xv) The Company's use of its reasonable best efforts to effect
     the inclusion of Registrable Securities covered by an Offering Document in
     the Portal Market of the National Association of Securities Dealers, Inc.
     and to maintain such listing for so long as such Convertible Securities are
     Registrable Securities.

CUSA may at any time, by irrevocable written notice to the Company, elect to
terminate all further obligations of the Company under this Section 2(a). Upon
receipt of such notice, the Company shall have no further obligations under this
Section 2(a) or to provide any further 144A Marketing Assistance.

          (b) Exchange Offer. (i) At any time following the completion of a 144A
Minimum Resale, but not more than once, upon the written notice of CUSA (the
"Exchange Offer Demand Notice"), the Company shall file a registration statement
with the SEC no later than the Exchange Offer Filing Date, pursuant to which the
Company shall offer to all Holders to exchange (the "Exchange Offer") any and
all of the Convertible Securities for new securities (the "Exchange Securities")
identical in all material respects to the Convertible Securities, except that
the Exchange Securities shall have been registered pursuant to an effective
Registration Statement under the Securities Act, shall contain no restrictive
legend thereon, except as otherwise specifically required by the other
provisions of this Agreement, and shall contain no provision for Liquidated
Damages Amounts; provided that the Company shall not be required to extend the
Exchange Offer (which shall not be deemed to include the private exchange
referred to in clause (5) below) to CUSA unless CUSA delivers to the Company, at
least five Business Days prior to the effectiveness of the Exchange Registration
Statement, an opinion of outside counsel, reasonably acceptable to the Company,
to the effect that CUSA may participate in the Exchange Offer and receive
Exchange Securities on the date of the exchange that may be sold without
restriction under federal securities laws. The Company shall not be obligated to
effect more than one Exchange Offer. The Exchange Offer shall be registered
under the Securities Act on the appropriate form (the "Exchange Registration
Statement") and shall comply with all applicable tender offer rules and
regulations under the Exchange Act. The Company agrees to use its reasonable
best efforts to (1) file the initial Exchange Registration Statement with the
SEC on or prior to the Exchange Offer Filing Date; (2) cause the Exchange
Registration Statement to be declared effective under the Securities Act on or
before the Exchange Offer Effectiveness Deadline Date; (3) keep the Exchange
Offer open for at least 20 Business Days (or longer if required by applicable
law) after the date that notice of the Exchange Offer is first mailed to
Holders; (4) consummate the Exchange Offer within 220 days after the Exchange
Offer Demand Date; and (5) concurrently with the consummation of such Exchange
Offer privately exchange any Registrable Securities held by CUSA for Exchange
Securities (such exchange securities to contain any appropriate restrictive
legends required by law) having the same CUSIP number as the corresponding
Convertible Securities offered in the Exchange Offer to the extent CUSA complied
with the requests to participate in such Exchange Offer set forth above.
Notwithstanding the foregoing, all periods of time required hereunder may be
extended for any Deferral Period. If after such Exchange Registration Statement
is initially declared effective by the SEC, the Exchange Offer or the issuance
of the Exchange Securities thereunder

                                       9

<PAGE>

is interfered with by any stop order, injunction or other order or requirement
of the SEC or any other governmental agency or court, then such Exchange
Registration Statement shall be deemed not to have become effective for purposes
of this Agreement. Each Holder who participates in the Exchange Offer will be
required to represent that any Exchange Securities received by it will be
acquired in the ordinary course of its business, that at the time of the
consummation of the Exchange Offer such Holder will have no arrangement or
understanding with any person to participate in the distribution of the Exchange
Securities, that such Holder is not an Affiliate of the Company within the
meaning of the Securities Act and any additional representations that in the
written opinion of counsel to the Company are necessary under then-existing
interpretations of the SEC in order for the Exchange Registration Statement to
be declared effective. Upon consummation of the Exchange Offer in accordance
with this Section 2(b)(i), the Company shall have no further obligation to
register Registrable Securities pursuant to this Agreement except as provided in
Section 2(b)(iii). No securities other than the Exchange Securities shall be
included in the Exchange Registration Statement.

               (ii) In connection with the Exchange Offer, the Company shall:

                    (1) mail to each Holder a copy of the Prospectus forming
     part of the Exchange Registration Statement, together with an appropriate
     letter of transmittal and related documents;

                    (2) permit Holders to withdraw tendered Registrable
     Securities at any time prior to the close of business, New York time, on
     the last Business Day on which the Exchange Offer shall remain open; and

                    (3) otherwise comply in all material respects with all
     applicable laws.

     As soon as practicable after the close of the Exchange Offer, the Company
     shall:

                    (1) accept for exchange all Registrable Securities validly
     tendered and not validly withdrawn pursuant to the Exchange Offer;

                    (2) promptly cancel or deliver to the designated transfer
     agent and registrar for cancellation all Registrable Securities so accepted
     for exchange; and

                    (3) deliver promptly or cause the designated transfer agent
     and registrar to deliver promptly to each Holder tendering such Registrable
     Securities, Exchange Securities, equal in aggregate liquidation preference
     to the Convertible Securities of such Holder so accepted for exchange.

     The Exchange Securities will be issued subject to the terms of the
Statement of Resolution and the Company's Amended and Restated Articles of
Incorporation.

          (iii) In addition to conducting the Exchange Offer provided for in
Section 2(b)(i) above, if (1) because of any change in law or in currently
prevailing interpretations of the SEC, the Company reasonably determines in good
faith, based upon written advice of qualified outside counsel, that it is not
permitted to effect the Exchange Offer; (2) the Exchange Offer is not commenced
on or prior to the Exchange Offer Effectiveness Deadline Date; (3) the Exchange

                                       10

<PAGE>

Offer is, for any reason, not consummated on or prior to the 220th day after the
Exchange Offer Demand Date; (4) any Holder (excluding CUSA) validly tendering
Registrable Securities in an Exchange Offer who has accurately made the
representations called for in Section 2(b) causes to be delivered to the Company
an opinion of outside counsel to such Holder reasonably acceptable to the
Company to the effect that such Holder did not receive Exchange Securities on
the date of the exchange that may be sold without restriction under federal
securities laws; or (5) because of any applicable law or prevailing
interpretations of the SEC in effect as of the date hereof, the Company
reasonably determines in good faith, based upon the written opinion of
nationally recognized qualified outside counsel, that it is not permitted to
include the Registrable Securities of a Holder in such Exchange Offer, then the
Company shall (in the case of clause (iv) only, upon the written request of any
affected Holder (excluding CUSA) received within 30 days of the consummation of
the Exchange Offer) promptly deliver to the Holders a written notice thereof
(the "Shelf Notice") and shall file a Shelf Registration pursuant to Section
3(a) covering all Registrable Securities.

          (c) Assistance in Connection with Other 144A Resales. Upon reasonable
request and notice from CUSA ("Other 144A Demand Notice"), the Company will
provide reasonable assistance to CUSA from time to time in connection with 144A
Resales by CUSA not requiring the 144A Marketing Assistance provided for in
Section 2(a). Such reasonable assistance shall not count towards the maximum
number of 144A Resale Attempts with respect to which the Company is required to
provide 144A Marketing Assistance pursuant to Section 2(a) if CUSA promptly
reimburses the Company for the expenses incurred by the Company pursuant to
Section 6 in connection with rendering such assistance. Such reasonable
assistance shall include making executive officers of the Company available,
upon reasonable notice, to participate in conference calls with persons believed
by CUSA in good faith to be interested potential purchasers of the Convertible
Securities; provided that CUSA shall act in good faith to limit the duration and
frequency of such conference calls such that in the aggregate such activities
could not unreasonably interfere with such executive officers' performance of
their regular duties on behalf of the Company. In addition, in connection with
any 144A Marketing Assistance provided pursuant to this Section 2(c), (1) in the
event the Company is not subject to Section 13 or Section 15(d) of the Exchange
Act at such time (or at that time is not current in its reporting under such
sections), upon the request of CUSA or any interested potential purchaser
identified by CUSA, the Company shall as promptly as practicable (but in any
event within the time period specified in the Statement of Resolution) provide
the requesting person information of the type described in subsection (d)(4) of
Rule 144A and (2) prior to the effectiveness of the Exchange Registration
Statement, upon request and reasonable notice from CUSA, subject to compliance
with applicable law, the Company shall afford the benefits of Section 2(b) to
the Holders of any and all Convertible Securities eligible to participate in the
Exchange Offer, subject, in the case of CUSA, to the delivery of the opinion of
counsel required under Section 2(b)(i).

     SECTION 3. Shelf Registration. The Company shall prepare and file or cause
to be prepared and filed with the SEC, not later than the Filing Deadline Date,
a Registration Statement for an offering to be made on a delayed or continuous
basis pursuant to Rule 415 of the Securities Act (a "Shelf Registration
Statement") registering the resale from time to time by Holders thereof of all
of the Registrable Securities (the "Initial Shelf Registration Statement"). The
Initial Shelf Registration Statement shall be on Form S-3 or another appropriate
form permitting registration of such Registrable Securities for resale by such
Holders in accordance

                                       11

<PAGE>

with the methods of distribution elected by the Holders and set forth in the
Initial Shelf Registration Statement. The Company shall use its reasonable best
efforts to cause the Initial Shelf Registration Statement to be declared
effective under the Securities Act by the date that is 90 days after the Filing
Deadline Date (the "Effectiveness Deadline Date", which shall be extended by the
aggregate number of days during which the Company is obligated to provide 144A
Marketing Assistance under Section 2(a), plus a period of ninety (90) days), and
to keep the Initial Shelf Registration Statement (or any Subsequent Shelf
Registration Statement) continuously effective under the Securities Act until
the expiration of the Effectiveness Period. At the time the Initial Shelf
Registration Statement is declared effective, each Holder that became a Notice
Holder on or prior to the date ten (10) Business Days prior to such time of
effectiveness shall be named as a selling securityholder in the Initial Shelf
Registration Statement and the related Prospectus in such a manner as to permit
such Holder to deliver such Prospectus to purchasers of Registrable Securities
in accordance with applicable law. Notwithstanding the foregoing, the Company
shall have no further obligations under Section 3(a) or 3(b), (1) from and after
the delivery of a 144A Demand Notice or an Other 144A Demand Notice (other than
pursuant to Section 2(b)(iii)) until CUSA has delivered written notice of the
termination of the Company's assistance obligations with respect to such 144A
Demand Notice or Other 144A Demand Notice, as the case may be, (2) following the
consummation of two 144A Resales and (3) following the delivery of two 144A
Demand Notices unless, in the case of this clause (3), a 144A Resale was not
consummated and the Initial Holder has reimbursed the Company for all fees and
expenses incurred by the Company pursuant to Section 6 in connection with the
performance of its obligations under Section 2. None of the Company's security
holders (other than the Holders of Registrable Securities) shall have the right
to include any of the Company's securities in the Shelf Registration Statement.

          (b) If the Initial Shelf Registration Statement or any Subsequent
Shelf Registration Statement ceases to be effective for any reason at any time
during the Effectiveness Period (other than because all Registrable Securities
registered thereunder shall have been resold pursuant thereto or shall have
otherwise ceased to be Registrable Securities), the Company shall use its
reasonable best efforts to obtain the prompt withdrawal of any order suspending
the effectiveness thereof, and in any event shall within thirty (30) days of
such cessation of effectiveness amend the Shelf Registration Statement in a
manner reasonably expected to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional Shelf Registration Statement
covering all of the securities that as of the date of such filing are
Registrable Securities (a "Subsequent Shelf Registration Statement"). If a
Subsequent Shelf Registration Statement is filed, the Company shall use its
reasonable best efforts to cause the Subsequent Shelf Registration Statement to
become effective as promptly as is reasonably practicable after such filing and
to keep such Registration Statement (or Subsequent Shelf Registration Statement)
continuously effective until the end of the Effectiveness Period in the case of
the Initial Shelf Registration Statement or any Subsequent Shelf Registration
Statement. As used herein, "Shelf Registration Statement" means the Initial
Shelf Registration Statement and any Subsequent Shelf Registration Statement.

          (c) The Company shall supplement and amend the Shelf Registration
Statement if required by the rules, regulations or instructions applicable to
the registration form used by the Company for such Shelf Registration Statement,
if required by the Securities Act or as necessary to name a Notice Holder as a
selling securityholder pursuant to Section (e) below.

                                       12

<PAGE>

          (d) Each Holder agrees that if such Holder wishes to sell Registrable
Securities pursuant to a Shelf Registration Statement and related Prospectus, it
will do so only in accordance with this Section 3(d) and Section 4(h) and
Section 5 of this Agreement. Following the date that the Initial Shelf
Registration Statement is declared effective, each Holder wishing to sell
Registrable Securities pursuant to a Shelf Registration Statement and related
Prospectus agrees to deliver a Notice and Questionnaire to the Company at least
ten (10) Business Days prior to any intended distribution of Registrable
Securities under the Shelf Registration Statement. From and after the date the
Initial Shelf Registration Statement is declared effective, the Company shall,
as promptly as practicable after the date a Notice and Questionnaire is
delivered pursuant to Section 9(c), and in any event upon the later of (x)
fifteen (15) Business Days after such date or (y) fifteen (15) Business Days
after the expiration of any Deferral Period in effect when the Notice and
Questionnaire is delivered or put into effect within fifteen (15) Business Days
of such delivery date:

               (i) if required by applicable law or policy of the SEC staff,
     file with the SEC a post-effective amendment to the Shelf Registration
     Statement or file a subsequent Shelf Registration Statement or prepare and,
     if required by applicable law, file a supplement to the related Prospectus
     or a supplement or amendment to any document incorporated therein by
     reference or file any other required document so that the Holder delivering
     such Notice and Questionnaire is named as a selling securityholder in a
     Shelf Registration Statement and the related Prospectus in such a manner as
     to permit such Holder to deliver such Prospectus to purchasers of the
     Registrable Securities in accordance with applicable law and, if the
     Company shall file a post-effective amendment to the Shelf Registration
     Statement of file a subsequent Shelf Registration Statement, use its
     reasonable best efforts to cause such post-effective amendment or
     subsequent Shelf Registration Statement to be declared effective under the
     Securities Act as promptly as is reasonably practicable, but in any event
     by the date (the "Amendment Effectiveness Deadline Date") that is
     forty-five (45) days after the date such post-effective amendment or
     subsequent Shelf Registration Statement is required by this clause to be
     filed;

               (ii) provide such Holder copies of any documents filed pursuant
     to Section 3(d)(i); and

               (iii) notify such Holder as promptly as practicable after the
     effectiveness under the Securities Act of any post-effective amendment or
     subsequent Shelf Registration Statement filed pursuant to Section 3(d)(i);

provided, that if such Notice and Questionnaire is delivered during a Deferral
Period, the Company shall so inform the Holder delivering such Notice and
Questionnaire and shall, to the extent required, take the actions set forth in
clauses (i), (ii) and (iii) above upon expiration of the Deferral Period in
accordance with Section 4(h). Notwithstanding anything contained herein to the
contrary, (i) the Company shall be under no obligation to name any Holder that
is not a Notice Holder as a selling securityholder in any Registration Statement
or related Prospectus and (ii) the Amendment Effectiveness Deadline Date shall
be extended by up to ten (10) Business Days from the expiration of a Deferral
Period (and the Company shall incur no obligation to pay Liquidated Damages
during such extension) if such Deferral Period shall be in effect on the
Amendment Effectiveness Deadline Date.

                                       13

<PAGE>

          (e) The parties hereto agree that the Holders of Registrable
Securities will suffer damages, and that it would not be feasible to ascertain
the extent of such damages with precision, if, other than as permitted
hereunder,

               (i) the Exchange Registration Statement has not been filed by the
     Exchange Offer Filing Date,

               (ii) the Initial Shelf Registration Statement has not been filed
     by the Filing Deadline Date,

               (iii) the Exchange Registration Statement has not been declared
     or otherwise become effective under the Securities Act on or prior to the
     Exchange Offer Effectiveness Deadline Date,

               (iv) the Initial Shelf Registration Statement has not been
     declared or otherwise become effective under the Securities Act on or prior
     to the Effectiveness Deadline Date,

               (v) the Company has failed to perform its obligations set forth
     in Section 3(d)(i) within the time period required therein,

               (vi) the aggregate duration of Deferral Periods relating to a
     Shelf Registration in any period exceeds the number of days permitted in
     respect of such period pursuant to Section 4(h) hereof, or

               (vii) the number of Deferral Periods relating to a Shelf
     Registration in any period exceeds the number permitted in respect of such
     period pursuant to Section 4(h) hereof.

     Each event described in any of the foregoing clauses (i) through (vii) is
individually referred to herein as an "Event". For purposes of this Agreement,
each Event set forth above shall begin and end on the dates set forth in the
table below:

 Type of
Event by
 Clause              Beginning Date                       Ending Date
--------   ---------------------------------   ---------------------------------

   (i)     Exchange Offer Filing Date          the date the Exchange
                                               Registration Statement is filed

  (ii)     Filing Deadline Date                the date the Initial Shelf
                                               Registration Statement is filed

 (iii)     Exchange Offer Effectiveness        the date the Exchange
           Deadline Date                       Registration Statement becomes
                                               effective under the Securities
                                               Act

                                       14

<PAGE>

 Type of
Event by
 Clause              Beginning Date                       Ending Date
--------   ---------------------------------   ---------------------------------

  (iv)     Effectiveness Deadline Date         The date the Initial Shelf
                                               Registration Statement becomes
                                               effective under the Securities
                                               Act

   (v)     the date by which the Company is    the date the Company performs its
           required to perform its             obligations set forth in Section
           obligations under Section 3(d)(i)   3(d)(i)

  (vi)     the date on which the aggregate     termination of the Deferral
           duration of Deferral Periods        Period that caused the limit on
           relating to Shelf Registration      the aggregate duration of
           Statements in any period exceeds    Deferral Periods relating to
           the number of days permitted by     Shelf Registration Statements to
           Section 4(h)                        be exceeded

 (vii)     the date of commencement of a       termination of the Deferral
           Deferral Period that causes the     Period that caused the number of
           number of Deferral Periods          Deferral Periods relating to
           relating to Shelf Registration      Shelf Registration Statements to
           Statements to exceed the number     exceed the number permitted by
           permitted by Section 4(h)           Section 4(h)

     For purposes of this Agreement, Events shall begin on the dates set forth
in the table above and shall continue to, but exclude, the ending dates set
forth in the table above.

     Commencing on (and including) any date that an Event has begun and ending
on (but excluding) the next date on which there are no Events that have occurred
and are continuing (a "Damages Accrual Period"), the Company shall pay, as
liquidated damages and not as a penalty, to Record Holders of Registrable
Securities an amount (the "Liquidated Damages Amount") accruing, for each day in
the Damages Accrual Period, in respect of any Convertible Security, at a rate
per annum equal to 0.5% of the aggregate liquidation preference of such
Convertible Security; provided that in the case of a Damages Accrual Period that
is in effect solely as a result of an Event of the type described in clause (iv)
or (v) of the first paragraph of this Section 3(e), such Liquidated Damages
Amount shall be paid only to the Holders (as set forth in the succeeding
paragraph) that have delivered Notices and Questionnaires that caused the
Company to incur the obligations set forth in Section 3(d) the non-performance
of which is the basis of such Event. The Liquidated Damages Amount will be
determined by applying the applicable liquidated damages rate to the aggregate
liquidation preference of the Registrable Securities outstanding on a daily
basis during such period but utilizing a 360-day year of twelve 30-day months.
Notwithstanding the foregoing, no Liquidated Damages Amount shall accrue as to
any Registrable Security from and after the earlier of (x) the date such
security is no longer a Registrable Security and (y) expiration of the
Effectiveness Period. The rate of accrual of the Liquidated Damages Amount with
respect to any period shall not exceed the rate provided for in this paragraph
notwithstanding the occurrence of multiple concurrent Events.

     The Liquidated Damages Amount shall accrue from the first day of the
applicable Damages Accrual Period, and shall be payable on each Damages Payment
Date during the

                                       15

<PAGE>

Damages Accrual Period (and on the Damages Payment Date next succeeding the end
of the Damages Accrual Period if the Damage Accrual Period does not end on a
Damages Payment Date) to the Record Holders of the Registrable Securities
entitled thereto; provided that any Liquidated Damages Amount accrued with
respect to any Convertible Security or portion thereof redeemed by the Company
on a redemption date or converted into Underlying Common Stock on a conversion
date prior to the Damages Payment Date, shall, in any such event, be paid
instead to the Holder who submitted such Convertible Security or portion thereof
for redemption or conversion on the applicable redemption date or conversion
date, as the case may be, on such date (or promptly following the conversion
date, in the case of conversion); provided, further, that, in the case of an
Event of the type described in clause (iv) or (v) of the first paragraph of this
Section 3(e), such Liquidated Damages Amount shall be paid only to the Holders
entitled thereto pursuant to such first paragraph. Liquidated Damages Amounts
payable pursuant to this Agreement may be paid in the form of additional
Convertible Securities equal in liquidation preference to the Liquidated Damages
Amounts or, at the Company's option, such amounts may be paid in cash by check
mailed to the address set forth in the Notice and Questionnaire delivered by
such Holder; provided that Liquidated Damages Amounts paid upon redemption or
conversion of Convertible Securities shall be payable only in cash. The Holders
of Convertible Securities or Underlying Common Stock shall be entitled to seek
any available remedy for the enforcement of this Agreement, including for the
payment of such Liquidated Damages Amount. Notwithstanding the foregoing, the
parties agree that the sole damages payable for a violation of the terms of this
Agreement with respect to which liquidated damages are expressly provided shall
be the Liquidated Damages Amount. Nothing shall preclude any Holder from
pursuing or obtaining specific performance or other equitable relief with
respect to this Agreement.

     All of the Company's obligations set forth in this Section 3(e) that are
outstanding with respect to any Registrable Security at the time such security
ceases to be a Registrable Security shall survive until such time as all such
obligations with respect to such security have been satisfied in full
(notwithstanding termination of this Agreement pursuant to Section 9(k)).

     The parties hereto agree that the Liquidated Damages Amounts provided for
in this Section 3(e) constitute a reasonable estimate of the damages that may be
incurred by Holders of Registrable Securities by reason of the failure of any
Shelf Registration Statement or Exchange Registration Statement to be filed or
declared effective or available for effecting resales or exchanges of
Registrable Securities in accordance with the provisions hereof.

     SECTION 4. Registration Procedures. In connection with the registration
obligations of the Company under Sections 2 and 3 hereof, during the
Effectiveness Period, the Company shall:

          (a) Prepare and file with the SEC a Registration Statement or
Registration Statements on Form S-3, S-4 or another appropriate form under the
Securities Act available for the sale of the Registrable Securities by the
Holders thereof in accordance with the intended method or methods of
distribution thereof, and use its reasonable best efforts to cause each such
Registration Statement to become effective and remain effective as provided
herein; provided that before filing any Registration Statement or Prospectus or
any amendments or supplements thereto with the SEC, furnish to the Initial
Holder and the Special Counsel of such offering, if any, copies of all such
documents proposed to be filed at least 5 Business Days prior to the filing of
such Registration Statement or amendment thereto or Prospectus or supplement
thereto.

                                       16

<PAGE>

          (b) Subject to Section 4(h), prepare and file with the SEC such
amendments and post-effective amendments to each Registration Statement as may
be necessary to keep such Registration Statement continuously effective for the
applicable period specified in Section 2(a) or Section 3(a); cause the related
Prospectus to be supplemented by any required prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 (or any similar provisions then in
force) under the Securities Act; and use its reasonable best efforts to comply
with the provisions of the Securities Act applicable to it with respect to the
disposition of all securities covered by such Registration Statement during the
Effectiveness Period in accordance with the intended methods of disposition by
the sellers thereof set forth in such Registration Statement as so amended or
such Prospectus as so supplemented.

          (c) As promptly as practicable give notice to the Notice Holders, the
Initial Holder and the Special Counsel, (i) when any Prospectus, prospectus
supplement, Registration Statement or post-effective amendment to a Registration
Statement has been filed with the SEC and, with respect to a Registration
Statement or any post-effective amendment, when the same has been declared
effective, (ii) of any request, following the effectiveness of the Initial Shelf
Registration Statement under the Securities Act, by the SEC or any other federal
or state governmental authority for amendments or supplements to any
Registration Statement or related Prospectus or for additional information,
(iii) of the issuance by the SEC or any other federal or state governmental
authority of any stop order suspending the effectiveness of any Registration
Statement or the initiation or threatening of any proceedings for that purpose,
(iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, (v) of the occurrence of, but
not the nature of or details concerning, a Material Event and (vi) of the
determination by the Company that a post-effective amendment to a Registration
Statement will be filed with the SEC, which notice may, at the discretion of the
Company (or as required pursuant to Section 4(h)), state that it constitutes a
Deferral Notice, in which event the provisions of Section 4(h) shall apply.

          (d) Use its reasonable best efforts to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement or the lifting of
any suspension of the qualification (or exemption from qualification) of any of
the Registrable Securities for sale in any jurisdiction in which they have been
qualified for sale, in either case at the earliest possible moment, and provide
immediate notice to each Notice Holder and the Initial Holder of the withdrawal
of any such order.

          (e) As promptly as practicable furnish to each Notice Holder, the
Special Counsel and the Initial Holder, upon request and without charge, at
least one (1) conformed copy of the Registration Statement and any amendment
thereto, including exhibits and all documents incorporated or deemed to be
incorporated therein by reference.

          (f) During the Effectiveness Period, deliver to each Notice Holder,
the Special Counsel, if any, and the Initial Holder, in connection with any sale
of Registrable Securities pursuant to a Registration Statement, without charge,
as many copies of the Prospectus or Prospectuses relating to such Registrable
Securities (including each preliminary prospectus) and any amendment or
supplement thereto as such Notice Holder may reasonably request; and the Company
hereby consents (except during such periods that a Deferral Notice is
outstanding and

                                       17

<PAGE>

has not been revoked) to the use of such Prospectus or each amendment or
supplement thereto by each Notice Holder in connection with any offering and
sale of the Registrable Securities covered by such Prospectus or any amendment
or supplement thereto in the manner set forth therein.

          (g) Prior to any public offering of the Registrable Securities
pursuant to a Registration Statement, use its reasonable best efforts to
register or qualify or cooperate with the Notice Holders and the Special Counsel
in connection with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions within the United
States as any Notice Holder reasonably requests in writing (which request may be
included in the Notice and Questionnaire); prior to any public offering of the
Registrable Securities pursuant to the Shelf Registration Statement, use its
reasonable best efforts to keep each such registration or qualification (or
exemption therefrom) effective during the Effectiveness Period in connection
with such Notice Holder's offer and sale of Registrable Securities pursuant to
such registration or qualification (or exemption therefrom) and do any and all
other acts or things reasonably necessary or advisable to enable the disposition
in such jurisdictions of such Registrable Securities in the manner set forth in
the relevant Registration Statement and the related Prospectus; provided that
the Company will not be required to (i) qualify as a foreign corporation or as a
dealer in securities in any jurisdiction where it would not otherwise be
required to qualify but for this Agreement or (ii) take any action that would
subject it to general service of process in suits or to taxation in any such
jurisdiction where it is not then so subject.

          (h) Upon (A) the issuance by the SEC of a stop order suspending the
effectiveness of any Registration Statement or the initiation of proceedings
with respect to any Registration Statement under Section 9(d) or 9(e) of the
Securities Act, (B) the occurrence of any event or the existence of any fact (a
"Material Event") as a result of which any Registration Statement shall contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any Prospectus shall contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or (C) the occurrence or existence
of any pending corporate development that, in the sole judgment of the Company,
makes it appropriate to suspend the availability of any Registration Statement
and the related Prospectus:

          (i) in the case of clause (B) above, subject to the next sentence, as
     promptly as reasonably practicable prepare and file, if necessary pursuant
     to applicable law, a post-effective amendment to such Registration
     Statement or a supplement to the related Prospectus or any document
     incorporated therein by reference or file any other required document that
     would be incorporated by reference into such Registration Statement and
     Prospectus so that such Registration Statement does not contain any untrue
     statement of a material fact or omit to state any material fact required to
     be stated therein or necessary to make the statements therein not
     misleading, and such Prospectus does not contain any untrue statement of a
     material fact or omit to state any material fact required to be stated
     therein or necessary to make the statements therein, in the light of the
     circumstances under which they were made, not misleading, as thereafter
     delivered to the purchasers of the Registrable Securities being sold or
     exchanged thereunder, and, in the case of a post-effective amendment to a
     Registration Statement, subject to the next

                                       18

<PAGE>

     sentence, use its reasonable best efforts to cause it to be declared
     effective as promptly as is practicable, and

          (ii) give notice to the Notice Holders, and the Special Counsel, if
     any, that the availability of any Registration Statement is suspended (a
     "Deferral Notice") and, upon receipt of any Deferral Notice, each Notice
     Holder agrees not to sell any Registrable Securities pursuant to the
     Registration Statement until such Notice Holder's receipt of copies of the
     supplemented or amended Prospectus provided for in clause (i) above, or
     until it is advised in writing by the Company that the Prospectus may be
     used, and has received copies of any additional or supplemental filings
     that are incorporated or deemed incorporated by reference in such
     Prospectus.

     The Company will use its reasonable best efforts to ensure that the use of
the Prospectus may be resumed (x) in the case of clause (A) above, as promptly
as is reasonably practicable, (y) in the case of clause (B) above, as soon as,
in the sole judgment of the Company, public disclosure of such Material Event
would not be prejudicial to or contrary to the interests of the Company or, if
necessary to avoid unreasonable burden or expense, as soon as reasonably
practicable thereafter and (z) in the case of clause (C) above, as soon as in
the sole judgment of the Company, such suspension is no longer appropriate. The
Company shall be entitled to exercise its right under this Section 4(h) to
suspend the availability of any Registration Statement or any Prospectus,
without incurring or accruing any obligation to pay Liquidated Damages Amounts
pursuant to Section 3(e), and any such period during which the availability of
the Registration Statement and any Prospectus is suspended (the "Deferral
Period") shall, without incurring any obligation to pay Liquidated Damages
Amounts pursuant to Section 3(e), not exceed 45 days; provided that the
aggregate duration of any Deferral Periods shall not exceed 45 days in any
90-day period (or 75 days in any 90-day period in the event of a Material Event
pursuant to which the Company has delivered a second notice as permitted below)
or 90 days in any 360-day period; provided further that in the case of a
Material Event relating to an acquisition or a probable acquisition or
financing, recapitalization, business combination or other similar transaction,
the Company may, without incurring any obligation to pay Liquidated Damages
Amounts pursuant to Section 3(e), deliver to Notice Holders a second notice to
the effect set forth above, which shall have the effect of extending the
Deferral Period by up to an additional 30 days, or such shorter period of time
as is specified in such second notice. Each Notice Holder agrees to hold any
notice by the Company in respect of any Deferral Period or Material Event
described in the last clause of the preceding sentence in confidence.

          (i) If requested in writing in connection with an underwritten
disposition of Registrable Securities pursuant to a Registration Statement, make
reasonably available for inspection during normal business hours by a
representative for the underwriters of such Registrable Securities, any
attorneys and accountants retained by such underwriters all relevant financial
and other records and pertinent corporate documents and properties of the
Company and its subsidiaries, and cause the appropriate officers, directors and
employees of the Company and its subsidiaries to make reasonably available for
inspection during normal business hours on reasonable notice all relevant
information reasonably requested by such representative for such underwriters,
or any attorneys or accountants in connection with such disposition, in each
case as is customary for similar "due diligence" examinations; provided that
such persons shall first agree in writing with the Company that any non-public
information shall be kept confidential by such persons and shall be used solely
for the purposes of exercising rights under this Agreement,

                                       19

<PAGE>

unless (i) disclosure of such information is required by court or administrative
order or is necessary to respond to inquiries of regulatory authorities, (ii)
disclosure of such information is required by law (including any disclosure
requirements pursuant to federal securities laws in connection with the filing
of any Registration Statement or the use of any prospectus referred to in this
Agreement), (iii) such information becomes generally available to the public
other than as a result of a disclosure or failure to safeguard by any such
person or (iv) such information becomes available to any such person from a
source other than the Company and such source is not bound by a confidentiality
agreement, and provided further that the foregoing inspection and information
gathering shall, to the greatest extent possible, be coordinated on behalf of
all underwriters and the other parties entitled thereto by Special Counsel. Any
person legally compelled to disclose any such confidential information made
available for inspection shall provide the Company with prompt prior written
notice of such requirement so that the Company may seek a protective order or
other appropriate remedy.

          (j) Comply in all material respects with all applicable rules and
regulations of the SEC and make generally available to its securityholders
earning statements (which need not be audited) satisfying the provisions of
Section 1l(a) of the Securities Act and Rule 158 thereunder (or any similar rule
promulgated under the Securities Act) for a 12-month period commencing on the
first day of the first fiscal quarter of the Company commencing after the
effective date of a Registration Statement, which statements shall be made
available no later than 45 days after the end of the 12-month period or 90 days
if the 12-month period coincides with the fiscal year of the Company.

          (k) Cooperate with each Notice Holder to facilitate the timely
preparation and delivery of certificates representing Registrable Securities
sold or to be sold pursuant to a Registration Statement, which certificates
shall not bear any restrictive legends, and cause such Registrable Securities to
be in such denominations as are permitted by the Statement of Resolution and
registered in such names as such Notice Holder may request in writing at least
one (1) Business Day prior to any sale of such Registrable Securities.

          (l) Provide a CUSIP number for all Registrable Securities covered by
each Registration Statement not later than the effective date of such
Registration Statement and provide the transfer agent for the Underlying Common
Stock with printed certificates for the Registrable Securities that are in a
form eligible for deposit with The Depository Trust Company.

          (m) Cooperate and assist in any filings required to be made with the
National Association of Securities Dealers, Inc.

          (n) Upon (i) the filing of the Initial Shelf Registration Statement
and (ii) the effectiveness of the Initial Shelf Registration Statement, announce
the same, in each case by release to Reuters Economic Services and Bloomberg
Business News.

          (o) Use its reasonable best efforts to cause all Convertible
Securities held by CUSA at all times (i) to be of the same series as the
corresponding series of Convertible Securities held by all other Holders, (ii)
to bear the same CUSIP number as all Convertible Securities of the same series
held by other Holders and (iii) upon such Convertible Securities becoming
transferable without restriction pursuant to federal securities laws, to be
eligible (A) for deposit in, and book entry trading through, any depositary with
respect to which Convertible

                                       20

<PAGE>

Securities held by any other Holders are then eligible and (B) for trading on
any national securities exchange or quotation on any interdealer quotation
system with respect to which Convertible Securities held by all other Holders
are then listed or quoted; provided, that prior to such time as Convertible
Securities held by CUSA are transferable without restriction pursuant to federal
securities laws, Convertible Securities held by CUSA shall bear an appropriate
legend with respect to such restriction.

     SECTION 5. Holder's Obligations. Each Holder agrees, by acquisition of the
Registrable Securities, that no Holder shall be entitled to sell any of such
Registrable Securities pursuant to a Shelf Registration Statement or to receive
a Prospectus relating thereto, unless such Holder has furnished the Company with
a Notice and Questionnaire as required pursuant to Section 3(d) hereof
(including the information required to be included in such Notice and
Questionnaire and the information set forth in the next sentence and a sales
notice (a "Sales Notice") setting forth the amount of Registrable Securities to
be sold and the proposed sales date not later than 5 Business Days prior to the
proposed sales date).

     Each Notice Holder agrees promptly to furnish to the Company all
information required to be disclosed in order to make the information previously
furnished to the Company by such Notice Holder not misleading and any other
information regarding such Notice Holder and the distribution of such
Registrable Securities as the Company may from time to time reasonably request.

     Each Holder acknowledges and agrees that a Sales Notice will only be valid
for a period of five Business Days commencing with the proposed sales date and
that if any of the Registrable Securities to which such Sales Notice relates are
not sold during such period, a new Sales Notice will need to be submitted to the
Company not later than three Business Days prior to the new proposed sales date.
Notwithstanding the foregoing, no Sales Notice may be submitted, or if submitted
will be of no force and effect, and no Registrable Securities may be sold
pursuant to the Shelf Registration Statement if a Deferral Period is then in
effect.

     SECTION 6. Registration Expenses. The Company shall bear all fees and
expenses incurred in connection with the performance by the Company of its
obligations under Sections 2, 3 and 4 of this Agreement whether or not any
Registration Statement is declared effective. Such fees and expenses shall
include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses (x) with respect to filings required to be
made with the National Association of Securities Dealers, Inc. and (y) of
compliance with federal and state securities or Blue Sky laws (including,
without limitation, reasonable and documented fees and disbursements of the
Special Counsel in connection with Blue Sky qualifications of the Registrable
Securities and Exchange Securities under the laws of such jurisdictions as
Notice Holders may designate pursuant to Sections 2(a)(vi) and 4(g) of this
Agreement and any filings required to be made with the National Association of
Securities Dealers, Inc.), (ii) printing expenses (including, without
limitation, expenses of printing certificates for Registrable Securities and
Exchange Securities in a form eligible for deposit with The Depository Trust
Company), (iii) duplication expenses relating to copies of any Registration
Statement, Prospectus or Offering Document delivered to any Holders hereunder,
(iv) reasonable and documented fees and disbursements of counsel for the Company
and of Special Counsel in connection with any Registration Statement, (v)
reasonable and documented fees and disbursements of Special Counsel for CUSA in
connection with any 144A Marketing Attempt

                                       21

<PAGE>

pursuant to a 144A Demand Notice, (vi) reasonable and documented fees and
disbursements of the registrar and transfer agent for the Convertible Securities
or Underlying Common Stock, as applicable and (vii) any Securities Act liability
insurance obtained by the Company in its sole discretion. In addition, the
Company shall pay the internal expenses of the Company (including, without
limitation, all salaries and expenses of officers and employees performing legal
or accounting duties), the expense of any annual audit, the fees and expenses
incurred in connection with the listing by the Company of the Registrable
Securities or Exchange Securities on any securities exchange on which similar
securities of the Company are then listed and the fees and expenses of any
person, including special experts, retained by the Company. Nothing contained in
this Section 6 shall limit the reimbursement obligations of the Initial Holder
pursuant to Section 3(a)(3) to the extent such section is applicable.
Notwithstanding the provisions of this Section 6, each seller of Registrable
Securities or Exchange Securities shall pay selling expenses, including any
underwriting discount and commissions, and all registration expenses to the
extent required by applicable law.

     SECTION 7. Indemnification and Contribution.

          (a) Indemnification by the Company. The Company agrees to indemnify
and hold harmless each Holder, each person, if any, who controls any Holder
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, and each affiliate of any Holder within the meaning of Rule
405 under the Securities Act from and against any and all losses, claims,
damages and liabilities (including, without limitation, reasonable legal fees or
other expenses reasonably incurred in connection with defending or investigating
any such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement or any
amendment thereof, any preliminary Prospectus or preliminary Offering Document
or the Prospectus or Offering Document (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), caused by
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances in which they are made, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission or alleged untrue statement or omission based upon information
relating to any Holder furnished to the Company in writing by such Holder
expressly for use therein; provided that the indemnification contained in this
paragraph shall not inure to the benefit of any Holder (or to the benefit of any
such affiliate of such Holder) on account of any such losses, claims, damages or
liabilities caused by any untrue statement or alleged untrue statement or
omission or alleged omission made in any preliminary Prospectus or preliminary
Offering Document if the Company has performed its obligations under Section 4
hereof and if (x) such Holder failed to send or deliver a copy of the Prospectus
or Offering Document with or prior to the delivery of written confirmation of
the sale by such Holder to the person asserting the claim from which such
losses, claims, damages or liabilities arise and (y) the Prospectus or Offering
Document would have corrected such untrue statement or alleged untrue statement
or such omission or alleged omission.

          (b) Indemnification by Holders. Each Holder agrees severally and not
jointly to indemnify and hold harmless the Company and its directors, its
officers and each person, if any, who controls the Company (within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act)
and each affiliate of the Company within the meaning of Rule 405 under the
Securities Act or any other Holder, to the same extent as the foregoing
indemnity

                                       22

<PAGE>

from the Company to such Holder, but only with reference to information relating
to such Holder furnished to the Company in writing by such Holder expressly for
use in such Registration Statement, Prospectus or Offering Document or amendment
or supplement thereto. In no event shall the liability of any Holder hereunder
be greater in amount than the dollar amount of the net proceeds received by such
Holder upon the sale of the Registrable Securities or Exchange Securities
pursuant to the Registration Statement giving rise to such indemnification
obligation.

          (c) Conduct of Indemnification Proceedings. In case any proceeding
(including any governmental investigation) shall be instituted involving any
person in respect of which indemnity may be sought pursuant to Section 7(a) or
7(b) hereof, such person (the "indemnified party") shall promptly notify the
person against whom such indemnity may be sought (the "indemnifying party") in
writing and the indemnifying party, upon request of the indemnified party, shall
retain counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the reasonable fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified party shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by, in the case of
parties indemnified pursuant to Section 7(a), the Holders of a majority (with
Holders of Convertible Securities deemed to be the Holders, for purposes of
determining such majority, of the number of shares of Underlying Common Stock
into which such Convertible Securities are or would be convertible as of the
date on which such designation is made) of the Registrable Securities covered by
the Registration Statement held by Holders that are indemnified parties pursuant
to Section 7(a) and, in the case of parties indemnified pursuant to Section
7(b), the Company. The indemnifying party shall not be liable for any settlement
of any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment.

     Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such

                                       23

<PAGE>

indemnified party from all liability on claims that are the subject matter of
such proceeding and does not include a statement as to, or an admission of,
fault, culpability or a failure to act by or on behalf of any indemnified party.

          (d) Contribution. To the extent that the indemnification provided for
in Section 7(a) or 7(b) is unavailable to an indemnified party or insufficient
in respect of any losses, claims, damages or liabilities referred to therein,
then each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the indemnifying party or
parties on the one hand and of the indemnified party or parties on the other
hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company shall be deemed to
be equal to the aggregate value of the liquidation preference of Registrable
Securities to which such losses, claims, damages or liabilities relate. The
relative benefits received by any Holder shall be deemed to be equal to the
value of receiving Registrable Securities that are registered under the
Securities Act. The relative fault of the Holders on the one hand and the
Company on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Holders or by the Company, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Holders' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the respective number of
Registrable Securities they have sold pursuant to a Registration Statement, and
not joint.

     The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 7(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding this Section 7, no indemnifying party that is a selling Holder
shall be required to contribute any amount in excess of the amount by which the
total price at which the Registrable Securities sold by it and distributed to
the public were offered to the public exceeds the amount of any damages that
such indemnifying party has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 1l(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.

          (e) The remedies provided for in this Section 7 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to an
indemnified party at law or in equity, hereunder, under the Exchange Agreement
or otherwise.

                                       24

<PAGE>

          (f) The indemnity and contribution provisions contained in this
Section 7 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Holder, any person controlling any Holder or any Affiliate of any Holder
or by or on behalf of the Company, its officers or directors or any person
controlling the Company and (iii) the sale of any Registrable Securities by any
Holder.

     SECTION 8. Information Requirements. The Company covenants that, if at any
time before the end of the Effectiveness Period the Company is not subject to
the reporting requirements of the Exchange Act, it will cooperate with any
Holder and take such further commercially reasonable action as any Holder may
reasonably request in writing (including, without limitation, making such
reasonable representations as any such Holder may reasonably request), all to
the extent required from time to time to enable such Holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144 and Rule 144A under the Securities Act
and customarily taken in connection with sales pursuant to such exemptions. Upon
the written request of any Holder, the Company shall deliver to such Holder a
written statement as to whether it has complied with such filing requirements,
unless such a statement has been included in the Company's most recent report
filed pursuant to Section 13 or Section 15(d) of Exchange Act. Notwithstanding
the foregoing, nothing in this Section 8 shall be deemed to require the Company
to register any of its securities (other than the Common Stock) under any
section of the Exchange Act.

     SECTION 9. Miscellaneous.

          (a) No Conflicting Agreements. The Company is not, as of the date
hereof, a party to, nor shall it, on or after the date of this Agreement, enter
into, any agreement with respect to its securities that conflicts with the
rights granted to the Holders in this Agreement. The Company represents and
warrants that the rights granted to the Holders hereunder do not in any way
conflict with the rights granted to the holders of the Company's securities
under any other agreements.

          (b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of Holders
of a majority of the then outstanding Underlying Common Stock constituting
Registrable Securities (with Holders of Convertible Securities deemed to be the
Holders, for purposes of this Section, of the number of outstanding shares of
Underlying Common Stock into which such Convertible Securities are or would be
convertible as of the date on which such consent is requested). Notwithstanding
the foregoing, a waiver or consent to depart from the provisions hereof with
respect to a matter that relates exclusively to the rights of Holders whose
securities are being sold pursuant to a Registration Statement and that does not
directly or indirectly affect the rights of other Holders may be given by
Holders of at least a majority of the Registrable Securities being sold by such
Holders pursuant to such Registration Statement; provided that the provisions of
this sentence may not be amended, modified or supplemented except in accordance
with the provisions of the immediately preceding sentence. Notwithstanding the
foregoing sentence, this Agreement may be amended by written agreement signed by
the Company and the Initial Holder, without the consent of the Holders of
Registrable Securities, to cure any ambiguity or to correct or supplement any
provision contained herein that may be defective or inconsistent with any other
provision

                                       25

<PAGE>

contained herein, or to make such other provisions in regard to matters or
questions arising under this Agreement that shall not adversely affect the
interests of the Holders of Registrable Securities. Each Holder of Registrable
Securities outstanding at the time of any such amendment, modification,
supplement, waiver or consent or thereafter shall be bound by any such
amendment, modification, supplement, waiver or consent effected pursuant to this
Section 9(b), whether or not any notice, writing or marking indicating such
amendment, modification, supplement, waiver or consent appears on the
Registrable Securities or is delivered to such Holder.

          (c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, by telecopier, by
courier guaranteeing overnight delivery or by first-class mail, return receipt
requested, and shall be deemed given (i) when made, if made by hand delivery,
(ii) upon confirmation, if made by telecopier, (iii) one (1) Business Day after
being deposited with such courier, if made by overnight courier or (iv) on the
date indicated on the notice of receipt, if made by first-class mail, to the
parties as follows:

               (i) if to a Holder, at the most current address given by such
          Holder to the Company in a Notice and Questionnaire or any amendment
          thereto;

               (ii)  if to the Company, to:

                     Dynegy Inc.
                     1000 Louisiana Street
                     Suite 6700
                     Houston, Texas 77002
                     Attention: General Counsel
                     Telecopy No.: (713) 507-6808

                     With a copy to:

                     O'Melveny & Myers LLP
                     30 Rockefeller Plaza
                     New York, NY 10112
                     Attention: John J. Suydam, Esq.
                     Fax: (212) 408-2420

               (iii) if to the Initial Holder, to:

                     Chevron U.S.A. Inc.
                     c/o ChevronTexaco Corporation
                     6001 Bollinger Canyon Road
                     San Ramon, CA 94583
                     Attention: General Counsel
                     Tel: (925) 842-3232
                     Fax: (925) 842-7084

or to such other address as such person may have furnished to the other persons
identified in this Section 9(c) in writing in accordance herewith.

                                       26

<PAGE>

          (d) Approval of Holders. Whenever the consent or approval of Holders
of a specified percentage of Registrable Securities is required hereunder,
Registrable Securities held by the Company or its affiliates (as such term is
defined in Rule 405 under the Securities Act) (other than the Initial Holder or
subsequent Holders if such subsequent Holders are deemed to be such affiliates
solely by reason of their holdings of such Registrable Securities) shall not be
counted in determining whether such consent or approval was given by the Holders
of such required percentage.

          (e) Successors and Assigns. Any person who purchases any Registrable
Securities from the Initial Holder shall be deemed, for purposes of this
Agreement, to be an assignee of the Initial Holder. This Agreement shall inure
to the benefit of and be binding upon the successors and assigns of each of the
parties and shall inure to the benefit of and be binding upon each Holder of any
Registrable Securities, provided that nothing herein shall be deemed to permit
any assignment, transfer or other disposition of Registrable Securities in
violation of the terms of the Statement of Resolution. If any transferee of any
Holder shall acquire Registrable Securities, in any manner, whether by operation
of law or otherwise, such Registrable Securities shall be held subject to all of
the terms of this Agreement, and by taking and holding such Registrable
Securities, such person shall be conclusively deemed to have agreed to be bound
by and to perform all of the terms and provisions of this Agreement and such
person shall be entitled to receive the benefits hereof.

          (f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be original and all of which taken together
shall constitute one and the same agreement.

          (g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

          (h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS
MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT.

          (i) Severability. If any term, provision, covenant or restriction of
this Agreement is held to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated thereby, and the parties hereto shall use their reasonable best
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision,
covenant or restriction, it being intended that all of the rights and privileges
of the parties shall be enforceable to the fullest extent permitted by law.

          (j) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and is intended to be a complete and
exclusive statement of the

                                       27

<PAGE>

agreement and understanding of the parties hereto in respect of the registration
rights granted by the Company with respect to the Registrable Securities. This
Agreement supersedes all prior agreements and undertakings among the parties
with respect to such registration rights. No party hereto shall have any rights,
duties or obligations with respect to registration rights for the Registrable
Securities other than those specifically set forth in this Agreement.

          (k) Termination. This Agreement and the obligations of the parties
hereunder shall terminate upon the end of the Effectiveness Period, except for
any liabilities or obligations under Section 5, 6 or 7 hereof and the
obligations to make payments of and provide for Liquidated Damages Amounts under
Section 3(e) hereof to the extent such damages accrue prior to the end of the
Effectiveness Period, each of which shall remain in effect in accordance with
its terms.

                                       28

<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Exchange and
Registration Rights Agreement as of the date first written above.

                                        DYNEGY INC.

                                        By: /s/ Bruce A. Williamson
                                            ------------------------------------
                                                Name: Bruce A. Williamson
                                                Title: President and CEO

Confirmed and accepted as of the
date first above written:

By: CHEVRON U.S.A. INC.

By: /s/ Lydia Beebe
    ------------------------------------
        Name: Lydia Beebe
        Title: Vice President and Secretary

                                       29

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