Capital Securities Subscription Agreement

CAPITAL SECURITIES SUBSCRIPTION AGREEMENT


May 13, 2003


THIS CAPITAL SECURITIES SUBSCRIPTION AGREEMENT (this "Subscription Agreement") is made among Chandler Capital Trust I, a statutory trust created under the laws of the State of Delaware (the "Trust"), Chandler (U.S.A.), Inc. (the "Company" and, collectively with the Trust, the "Offerors") and InCapS Funding I, Ltd., a newly formed exempted company with limited liability established under the laws of the Cayman Islands (the "Purchaser").


RECITALS:


A. The Trust desires to issue $13,000,000 of its InCapS(SM) (the "Capital Securities"), with a liquidation amount of $1,000 per Capital Security, representing undivided beneficial interests in the assets of the Trust (the "Offering"), to be issued pursuant to an Amended and Restated Declaration of Trust (the "Declaration"), by the Company, as Sponsor, Wilmington Trust Company, as Institutional Trustee and Wilmington Trust Company, as Delaware Trustee, the Administrators named therein, and the holders, from time to time, of the Capital Securities, which Capital Securities are to be guaranteed by the Company with respect to distributions and payments upon liquidation, redemption and otherwise to the extent provided in and pursuant to the terms of a Guarantee Agreement (the "Guarantee") between the Company and Wilmington Trust Company, as Guarantee Trustee; and


B. The proceeds from the sale of the Capital Securities will be combined with the proceeds from the sale of the Common Securities by the Trust to the Company and will be used by the Trust to purchase an equivalent aggregate principal amount of Fixed Rate Junior Subordinated Debentures due 2033 of the Company (the "Debentures"), to be issued by the Company pursuant to an Indenture (the "Indenture") to be executed by the Company, as Issuer, and Wilmington Trust Company, as Debenture Trustee; and


C. The Purchaser intends to complete an offering of its securities (the "CBO Offering") on or about May 22, 2003 or such other business day as may be agreed upon by the Offerors and the placement agent ("Placement Agent") identified in the Placement Agreement (the "Closing Date") and to use the proceeds of the CBO Offering to, among other things, acquire the Capital Securities from the Trust and other capital securities, senior notes and surplus notes in a quantity and with other particular characteristics, in the aggregate, sufficient to permit the successful completion of the CBO Offering; and


D. In consideration of the premises and the mutual representations and covenants hereinafter set forth, the parties hereto agree as follows:


ARTICLE I


PURCHASE AND SALE OF CAPITAL SECURITIES


1.1. Upon the execution of this Subscription Agreement, subject to the conditions precedent set forth in Section 1.5, the Purchaser hereby agrees to purchase from the Trust 13,000 Capital Securities at a price equal to $1,000 per Capital Security (the "Purchase Price") and the


Trust agrees to sell 13,000 of Capital Securities with a liquidation amount of $1,000 per Capital Security to the Purchaser for the Purchase Price. The rights and preferences of the Capital Securities will be set forth in the Declaration in form and substance reasonably acceptable to the Purchaser. The Purchase Price is payable by the Purchaser on the Closing Date in immediately available funds to the account designated by Wilmington Trust Company against delivery of the aforementioned Capital Securities.


1.2. The certificate for the Capital Securities shall be authenticated by the Institutional Trustee and delivered in definitive form by the Trust on the Closing Date to the Purchaser or its designee, shall be registered in the name of the Purchaser and shall represent the aggregate liquidation amount of the Capital Securities being purchased by the Purchaser.


1.3. Each of the provisions of the Placement Agreement, dated May 13, 2003 (the "Placement Agreement"), including the definitions therein, are hereby incorporated by reference into this Subscription Agreement. In addition, to the extent provided for in the Placement Agreement, the Purchaser shall be entitled to the benefits of the Placement Agreement and shall be entitled to enforce such obligations of the Offerors under the Placement Agreement as fully as if the Purchaser were a party to such Placement Agreement, it being agreed between the parties that any and all representations, covenants and other agreements made by the Offerors to the Placement Agent in the Placement Agreement shall be deemed to have also been made to the Purchaser.


1.4. If any condition specified herein or in the Placement Agreement shall not have been fulfilled when and as required to be fulfilled by, on behalf of or in respect of the Offerors or the Capital Securities or the Subordinated Debt Securities, this Subscription Agreement may be terminated by the Purchaser by notice to the Offerors at any time at or prior to the Closing Date, and such termination shall be without liability of any party to any other party except as provided in Section 5(i) of the Placement Agreement and except that Sections 1, 7, and 8 of the Placement Agreement shall survive any such termination and remain in full force and effect.


1.5. If the CBO Offering is not successfully completed for any reason, including, without limitation, as a result of the inability of the Purchaser to acquire sufficient capital securities, senior notes and surplus notes from the Trust and other issuers and sellers in a quantity and with other particular characteristics, in the aggregate, sufficient to satisfy rating agency criteria with respect to expected ratings on the securities to be issued by the Purchaser and other criteria deemed necessary or advisable by the Purchaser, all obligations of the Purchaser hereunder and any claims against the Purchaser hereunder shall automatically terminate and be extinguished and ...