exv4w2



 







EXHIBIT 4.2




NABORS INDUSTRIES, INC.,




as Issuer




NABORS INDUSTRIES LTD.,




as Guarantor




$2,500,000,000




0.94% SENIOR EXCHANGEABLE




NOTES DUE 2011




 






INDENTURE




Dated as of May 23, 2006




 






WELLS FARGO BANK, NATIONAL ASSOCIATION




as Trustee




 






 









 








CROSS REFERENCE TABLE*




	 	 	 	 	 	 	 	 	 
	TIA	 	 	 	 	 	INDENTURE
	SECTION	 	 	 	SECTION     
	310

	 	(a)(1)
	 	 	 	 	7.10	 
	 

	 	(a)(2)
	 	 	 	 	7.10	 
	 

	 	(a)(3)
	 	 	 	           N.A.**

	 

	 	(a)(4)
	 	 	 	 	N.A.	 
	 

	 	(b)
	 	 	 	 	7.08; 7.10	 
	 

	 	(c)
	 	 	 	 	N.A	 
	311

	 	(a)
	 	 	 	 	7.11	 
	 

	 	(b)
	 	 	 	 	7.11	 
	 

	 	(c)
	 	 	 	 	N.A.	 
	312

	 	(a)
	 	 	 	 	2.05	 
	 

	 	(b)
	 	 	 	 	13.03	 
	 

	 	(c)
	 	 	 	 	13.03	 
	313

	 	(a)
	 	 	 	 	7.06	 
	 

	 	(b)(1)
	 	 	 	 	N.A.	 
	 

	 	(b)(2)
	 	 	 	 	7.06	 
	 

	 	(c)
	 	 	 	 	13.02	 
	 

	 	(d)
	 	 	 	 	7.06	 
	314

	 	(a)
	 	 	 	 	4.02; 13.02	 
	 

	 	(b)
	 	 	 	 	N.A.	 
	 

	 	(c)(1)
	 	 	 	 	13.04	 
	 

	 	(c)(2)
	 	 	 	 	13.04	 
	 

	 	(c)(3)
	 	 	 	 	N.A.	 
	 

	 	(d)
	 	 	 	 	N.A.	 
	 

	 	(e)
	 	 	 	 	13.05	 
	 

	 	(f)
	 	 	 	 	4.03	 
	315

	 	(a)
	 	 	 	 	7.01	 
	 

	 	(b)
	 	 	 	 	7.05; 13.02	 
	 

	 	(c)
	 	 	 	 	7.01	 
	 

	 	(d)
	 	 	 	 	7.01	 
	 

	 	(e)
	 	 	 	 	6.11	 
	316

	 	(a)

	(last sentence)	 	 	 	2.08	 
	 

	 	(a)(1)(A)
	 	 	 	 	6.05	 
	 

	 	(a)(1)(B)
	 	 	 	 	6.04	 
	 

	 	(a)(2)
	 	 	 	 	N.A.	 
	 

	 	(b)
	 	 	 	 	6.07	 
	317

	 	(a)(1)
	 	 	 	 	6.08	 
	 

	 	(a)(2)
	 	 	 	 	6.09	 
	 

	 	(b)
	 	 	 	 	2.04	 
	318

	 	(a)
	 	 	 	 	13.01	 








 




			
	*	 	Note: This Cross Reference Table shall
not, for any purpose, be deemed to be part of the Indenture
	 
	**	 	Note: N.A. means Not Applicable.




 









 










TABLE OF CONTENTS




	 	 	 	 	 
	 	 	PAGE
	ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE
	 	 	1	 
	SECTION 1.01. Definitions
	 	 	1	 
	SECTION 1.02. Other Definitions
	 	 	5	 
	SECTION 1.03. Incorporation by Reference of Trust Indenture Act
	 	 	7	 
	SECTION 1.04. Rules of Construction
	 	 	7	 
	 
	 	 	 	 
	ARTICLE 2. The SECURITIES
	 	 	8	 
	SECTION 2.01. Form and Dating
	 	 	8	 
	SECTION 2.02. Execution and Authentication
	 	 	8	 
	SECTION 2.03. Registrar, Paying Agent and Exchange Agent
	 	 	9	 
	SECTION 2.04. Paying Agent to Hold Cash and Securities in Trust
	 	 	10	 
	SECTION 2.05. Holder Lists
	 	 	10	 
	SECTION 2.06. Exchange and Registration of Transfer of Securities; Restrictions on Transfers;
Depositary
	 	 	10	 
	SECTION 2.07. Replacement Securities
	 	 	15	 
	SECTION 2.08. Outstanding Securities; Determinations of Holders’ Action
	 	 	15	 
	SECTION 2.09. Temporary Securities
	 	 	16	 
	SECTION 2.10. Cancellation
	 	 	16	 
	SECTION 2.11. Persons Deemed Owners
	 	 	17	 
	SECTION 2.12. CUSIP Numbers
	 	 	17	 
	 
	 	 	 	 
	ARTICLE 3. PURCHASES
	 	 	17	 
	SECTION 3.01. Purchase at Option of the Holder Upon a Change in Control
	 	 	17	 
	SECTION 3.02. Effect of Change in Control Purchase Notice; Withdrawal
	 	 	20	 
	SECTION 3.03. Deposit of Change in Control Purchase Price
	 	 	21	 
	SECTION 3.04. Securities Purchased in Part
	 	 	21	 
	SECTION 3.05. Covenant to Comply with Securities Laws upon Purchase of Securities
	 	 	21	 
	SECTION 3.06. Repayment to the Company
	 	 	21	 
	 
	 	 	 	 
	ARTICLE 4. COVENANTS
	 	 	22	 
	SECTION 4.01. Payment of Securities
	 	 	22	 
	SECTION 4.02. Financial Information; SEC Reports
	 	 	22	 
	SECTION 4.03. Compliance Certificate
	 	 	23	 
	SECTION 4.04. Further Instruments and Acts
	 	 	23	 
	SECTION 4.05. Maintenance of Office or Agency
	 	 	23	 
	SECTION 4.06. Existence
	 	 	24	 
	SECTION 4.07. [Reserved]
	 	 	24	 
	SECTION 4.08. Registration Rights
	 	 	24	 
	SECTION 4.09. Payment of Additional Amounts
	 	 	25	 
	 
	 	 	 	 
	ARTICLE 5. SUCCESSOR CORPORATION
	 	 	27	 






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	 	 	PAGE
	SECTION 5.01. When the Company and the Guarantor May Merge or Transfer Assets
	 	 	27	 
	SECTION 5.02. Successors Substituted
	 	 	28	 
	 
	 	 	 	 
	ARTICLE 6. DEFAULTS AND REMEDIES
	 	 	28	 
	SECTION 6.01. Events of Default
	 	 	28	 
	SECTION 6.02. Acceleration
	 	 	30	 
	SECTION 6.03. Other Remedies
	 	 	30	 
	SECTION 6.04. Waiver of Past Defaults
	 	 	30	 
	SECTION 6.05. Control by Majority
	 	 	31	 
	SECTION 6.06. Limitation on Suits
	 	 	31	 
	SECTION 6.07. Rights of Holders to Receive Payment
	 	 	31	 
	SECTION 6.08. Collection Suit by Trustee
	 	 	32	 
	SECTION 6.09. Trustee May File Proofs of Claim
	 	 	32	 
	SECTION 6.10. Priorities
	 	 	32	 
	SECTION 6.11. Undertaking for Costs
	 	 	33	 
	SECTION 6.12. Waiver of Stay, Extension or Usury Laws
	 	 	33	 
	 
	 	 	 	 
	ARTICLE 7. TRUSTEE
	 	 	33	 
	SECTION 7.01. Duties of Trustee
	 	 	33	 
	SECTION 7.02. Rights of Trustee
	 	 	35	 
	SECTION 7.03. Individual Rights of Trustee
	 	 	36	 
	SECTION 7.04. Trustee’s Disclaimer
	 	 	36	 
	SECTION 7.05. Notice of Defaults
	 	 	37	 
	SECTION 7.06. Reports by Trustee to Holders
	 	 	37	 
	SECTION 7.07. Compensation and Indemnity
	 	 	37	 
	SECTION 7.08. Replacement of Trustee
	 	 	38	 
	SECTION 7.09. Successor Trustee by Merger
	 	 	39	 
	SECTION 7.10. Eligibility; Disqualification
	 	 	39	 
	SECTION 7.11. Preferential Collection of Claims Against Company
	 	 	39	 
	 
	 	 	 	 
	ARTICLE 8. DISCHARGE OF INDENTURE
	 	 	40	 
	SECTION 8.01. Discharge of Liability on Securities
	 	 	40	 
	SECTION 8.02. Repayment to the Company
	 	 	40	 
	 
	 	 	 	 
	ARTICLE 9. AMENDMENTS
	 	 	40	 
	SECTION 9.01. Without Consent of Holders
	 	 	40	 
	SECTION 9.02. With Consent of Holders
	 	 	41	 
	SECTION 9.03. Compliance with Trust Indenture Act
	 	 	42	 
	SECTION 9.04. Revocation and Effect of Consents, Waivers and Actions
	 	 	42	 
	SECTION 9.05. Notation on or Exchange of Securities
	 	 	42	 
	SECTION 9.06. Trustee to Sign Supplemental Indentures
	 	 	42	 
	SECTION 9.07. Effect of Supplemental Indentures
	 	 	43	 
	 
	 	 	 	 
	ARTICLE 10. GUARANTEE OF SECURITIES
	 	 	43	 
	SECTION 10.01. Unconditional Guarantee
	 	 	43	 
	SECTION 10.02. Execution and Delivery of Notation of Guarantee
	 	 	45	 






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	 	 	PAGE
	ARTICLE 11. EXCHANGE
	 	 	46	 
	SECTION 11.01. Exchange Privilege
	 	 	46	 
	SECTION 11.02. Exchange Procedure
	 	 	47	 
	SECTION 11.03. Fractional Shares
	 	 	48	 
	SECTION 11.04. Taxes on Exchange
	 	 	49	 
	SECTION 11.05. Payment Upon Exchange
	 	 	49	 
	SECTION 11.06. Adjustment for Change in Capital Stock
	 	 	50	 
	SECTION 11.07. Adjustment for Rights or Warrants
	 	 	50	 
	SECTION 11.08. Adjustment for Other Distributions
	 	 	51	 
	SECTION 11.09. Adjustment to Exchange Rate upon a Change in Control
	 	 	53	 
	SECTION 11.10. When No Adjustment Required
	 	 	56	 
	SECTION 11.11. Notice of Adjustment
	 	 	56	 
	SECTION 11.12. Notice of Certain Transactions
	 	 	56	 
	SECTION 11.13. Effect of Reclassification, Consolidation, Merger or Transfer
	 	 	56	 
	SECTION 11.14. Company Determination Final
	 	 	58	 
	SECTION 11.15. Trustee’s Adjustment Disclaimer
	 	 	58	 
	SECTION 11.16. Simultaneous Adjustments
	 	 	58	 
	SECTION 11.17. Successive Adjustments
	 	 	59	 
	SECTION 11.18. Rights Issued In Respect of Common Shares Issued Upon Exchange
	 	 	59	 
	SECTION 11.19. Guarantor to Provide Common Shares
	 	 	59	 
	SECTION 11.20. General Considerations
	 	 	60	 
	 
	 	 	 	 
	ARTICLE 12. INTEREST
	 	 	60	 
	SECTION 12.01. Interest Payments
	 	 	60	 
	SECTION 12.02. Defaulted Interest; Interest Rights Preserved
	 	 	61	 
	 
	 	 	 	 
	ARTICLE 13. MISCELLANEOUS
	 	 	62	 
	SECTION 13.01. Trust Indenture Act
	 	 	62	 
	SECTION 13.02. Notices
	 	 	62	 
	SECTION 13.03. Communication by Holders with Other Holders
	 	 	63	 
	SECTION 13.04. Certificate and Opinion as to Conditions Precedent
	 	 	63	 
	SECTION 13.05. Statements Required in Certificate or Opinion
	 	 	63	 
	SECTION 13.06. Separability Clause
	 	 	64	 
	SECTION 13.07. Rules by Trustee, Paying Agent, Exchange Agent and Registrar
	 	 	64	 
	SECTION 13.08. Governing Law
	 	 	64	 
	SECTION 13.09. No Recourse Against Others
	 	 	64	 
	SECTION 13.10. Record Date for Vote or Consent of Securityholders
	 	 	64	 
	SECTION 13.11. Submission to Jursidiction; Service of Process
	 	 	65	 
	SECTION 13.12. Successors
	 	 	65	 
	SECTION 13.13. Multiple Originals
	 	 	65	 
	 
	 	 	 	 
	EXHIBIT A            FORM OF SECURITY
	 	 	 	 






iii









 





     INDENTURE, dated as of May 23, 2006, among Nabors Industries, Inc., a Delaware corporation
(the “Company”), Nabors Industries Ltd., a Bermuda exempted company (the “Guarantor”), and Wells
Fargo Bank, National Association, a national banking association, as trustee (the “Trustee”).



     Each party agrees as follows for the benefit of the other parties and for the equal and
ratable benefit of the Holders of the Company’s 0.94% Senior Exchangeable Notes Due 2011:



ARTICLE 1.

DEFINITIONS AND INCORPORATION BY REFERENCE




     SECTION 1.01. Definitions.



     “Affiliate” of any specified Person means any other Person directly or indirectly controlling
or controlled by or under direct or indirect common control with such specified Person. For the
purposes of this definition, “control,” when used with respect to any specified Person, means the
power to direct or cause the direction of the management and policies of such Person, directly or
indirectly, whether through the ownership of voting stock, by contract or otherwise; and the terms
“controlling” and “controlled” have meanings correlative to the foregoing.



     “Agent” means any Registrar or Paying Agent.



     “Applicable Exchange Rate” means the Exchange Rate on any Trading Day, as adjusted in
accordance with Article 11. For purposes of determining the Exchange Value, the Applicable
Exchange Rate means the Exchange Rate on the Exchange Date.



     “Bankruptcy Law” means Title 11, United States Code, or any similar Federal or state law or
any similar Bermudian or other foreign law for the relief of debtors.



     “Board of Directors” means either the board of directors of the Company or the Guarantor, as
specified, or any duly authorized committee of such board.



     “Business Day” means each day of the year on which banking institutions are not required or
authorized to close in The City of New York, Houston, Texas, Chicago, Illinois, the State of Ohio
or the city in which the Corporate Trust Office is located.



     “Common Shares” means any capital stock of any class of the Guarantor which has no preference
in respect of dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Guarantor and which is not subject to redemption by
the Guarantor. Subject to the provisions of Section 11.13 hereof, however, shares issuable upon
exchange of the Securities shall include only Common Shares, par value of US $0.001 per share, of
the Guarantor as such class of shares exists on the date of this Indenture or shares of any class
or classes resulting from any reclassification or reclassifications thereof and which have no
preference in respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Guarantor and which are not subject to
redemption by the Guarantor; provided that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable pursuant to the terms



1









 





hereof shall be substantially in the proportion which the total number of shares of such class
resulting from all such reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.



     “Company” means the party named as the “Company” in the first paragraph of this Indenture
until a successor replaces it pursuant to the applicable provisions of this Indenture and,
thereafter, shall mean such successor. The foregoing sentence shall likewise apply to any
subsequent such successor or successors.



     “Company Request” or “Company Order” means a written request or order signed in the name of
the Company by its Chairman of the Board, a Vice Chairman, the Chief Executive Officer, its
President or a Vice President, and by its Treasurer, an Assistant Treasurer, its Controller, an
Assistant Controller, its Corporate Secretary or an Assistant Corporate Secretary, and delivered to
the Trustee.



     “Corporate Trust Office” means the designated office of the Trustee at which at any particular
time its corporate trust business shall be principally administered, which office is, at the date
as of which this Indenture is dated, located at 230 W. Monroe Street, Suite 2900, Chicago, IL
60606, Attn: Corporate Trust Services.



     “Custodian” shall mean the Trustee, as custodian with respect to the Securities in global
form, or any successor entity thereto.



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



     “Depositary” means, with respect to the Securities issuable or issued in whole or in part in
global form, the Person specified in Section 2.06 as the Depositary with respect to the Securities,
until a successor shall have been appointed and become such pursuant to the applicable provisions
of this Indenture, and thereafter, “Depositary” shall mean or include such successor.



     “Dollars” or “$” means the lawful currency of the United States of America.



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



     “Ex-Dividend Date” means the first date upon which a sale of the Common Shares will not
automatically transfer the right to receive a distribution described in Section 11.01 (b) or 11.08
hereof from the seller of the Common Shares to its buyer.



     “Guarantor” means the party named as the “Guarantor” in the first paragraph of this Indenture
until a successor replaces it pursuant to the applicable provisions of this Indenture, and
thereafter “Guarantor” shall mean such successor. The foregoing sentence shall likewise apply to
any subsequent such successor or successors.



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



2









 





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



     “Initial Purchasers” means Lehman Brothers, Inc. and Citigroup Global Markets Inc.



     “Interest Payment Date” shall have the meaning assigned to such term in paragraph 1 of the
securities.



     “Issue Date” of any Security means May 23, 2006.



     “Legal Holiday” is any day other than a Business Day. If any specified date (including a date
for giving notice) is a Legal Holiday, the action shall be taken on the next succeeding date that
is not a Legal Holiday, and to the extent applicable no interest, if any, shall accrue for the
intervening period.



     “Market Disruption Event” means the occurrence or existence for more than a one-half hour
period in the aggregate on any scheduled Trading Day for Common Shares of any suspension or
limitation imposed on trading (by reason of movements in price exceeding limits permitted by The
New York Stock Exchange or otherwise) in the Common Shares or in any options, contracts or futures
contracts relating to the Common Shares and such suspension or limitation occurs or exists at any
time before 1:00 p.m., (New York City time) on such day.



     “Market Price” means, as of any date of determination, the average of the Sale Prices of the
Common Shares for the five Trading Day period ending on the Business Day prior to the applicable
date of determination (if the Business Day prior to the applicable date of determination is a
Trading Day or, if it is not a Trading Day, then on the last Trading Day prior to such Business
Day), appropriately adjusted to take into account the occurrence, during the period commencing on
the first of such Trading Days during such five Trading Day period and ending on such date of
determination, of any event described in Section 11.06, 11.07 or 11.08 hereof. Notwithstanding the
foregoing, (a) for purposes of the adjustment to the Exchange Rate described in Section 11.08(c),
Market Price of the Common Shares means the average Sale Price of the Common Shares for the five
Trading Day period ending on the Trading Day prior to the Ex-Dividend Date, and (b) for purposes of
the adjustment to the Exchange Rate described in Section 11.08(d), Market Price of the Common
Shares means the average Sale Price of the Common Shares for the five Trading Day period beginning
on the Trading Day on which the tender or exchange offer expires.



     “NASDAQ National Market” means the electronic inter-dealer quotation system operated by The
Nasdaq Stock Market, Inc., a subsidiary of the National Association of Securities Dealers, Inc.



     “NYSE” means the New York Stock Exchange.



     “Officer” means the Chairman of the Board, any Vice Chairman, the Chief Executive Officer, the
President, any Vice President, the Chief Financial Officer, the Chief Accounting Officer, the
Treasurer, the Controller or the Secretary or any Assistant Treasurer or Assistant Secretary of a
Person or any other individual designated by that Person as an “Officer.”



3









 





     “Officer’s Certificate” means a written certificate signed in the name of a Person by two
Officers of a Person, one of whom must be the Person’s Chief Executive Officer, Chief Financial
Officer, Chief Accounting Officer or Vice President.



     “Opinion of Counsel” means a written opinion containing the information specified in Sections
13.04 and 13.05, from legal counsel who is acceptable to the Trustee. The counsel may be an
employee of, or counsel to, the Company or the Trustee.



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



     “Principal” or “Principal Amount” of a Security means the principal amount as set forth on the
face of such Security, or on Schedule A thereto in the case of a Security in global form.



     “QIB” means “qualified institutional buyer” as that term is defined in Rule 144A.



     “Registration Rights Agreement” means the Registration Rights Agreement dated as of May 23,
2006 among the Company, the Guarantor and the Initial Purchaser.



     “Rule 144” means Rule 144 as promulgated under the Securities Act.



     “Rule 144A” means Rule 144A as promulgated under the Securities Act.



     “Sale Price of the Common Shares” means, on any date, the closing sale price per Common Share,
or if no closing sale price is reported, the average bid and asked prices or, if more than one in
either case, the average of the average bid and average asked prices, on such date as reported in
transactions for the principal U.S. securities exchange on which the Common Shares are traded or,
if the Common Shares are not listed on a U.S. national or regional stock exchange, as reported by
the NASDAQ National Market, in each case without reference to after-hours or extended market
trading. If the Common Shares are not listed for trading on a U.S. national or regional securities
exchange and not reported by the NASDAQ National Market on the relevant date, the “sale price”
shall be the last quoted bid price for Common Shares in the over-the-counter market on the relevant
date as reported by Pink Sheets LLC or similar organization. If the Common Shares are not so
quoted, the “sale price” will be the average of the mid-point of the last bid and asked prices for
the Common Shares on the relevant date from each of at least three nationally recognized
independent investment banking firms selected by the Company for this purpose.



     “SEC” or “Commission” means the Securities and Exchange Commission or any successor entity.



     “Securities” means the Company’s 0.94% Senior Exchangeable Notes Due 2011 issued hereunder.



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



4









 





     “Stated Maturity,” when used with respect to any Security, means May 15, 2011.



     “Taxes” means any tax, duty, levy, impost, assessment or other governmental charge of whatever
nature imposed or levied by or on behalf of the Government of Bermuda or of any province or
territory thereof or by an authority or agency therein or thereof having the power to tax,
including any interest, penalties or other charges in respect thereof.



     “TIA” means the Trust Indenture Act of 1939, as amended, as in effect on the date of this
Indenture, except as provided in Section 9.03.



     “Trading Day” means a day during which (i) there is no Market Disruption Event and (ii) the
NYSE or, if the Common Shares are not quoted on the NYSE, the principal U.S. national or regional
securities exchange on which the Common Shares are listed, is open for trading or, if the Common
Shares are not so listed, admitted for trading or quoted, any Business Day. A “Trading Day” only
includes those days that have a scheduled closing time of 4:00 p.m. (New York City time) or the
then standard closing time for regular trading on the relevant exchange or trading system.



     “Trading Price” with respect to any Securities on any date of determination means the average
of the secondary market bid quotations per $1,000 principal amount of Securities obtained by the
Trustee for $5,000,000 principal amount of the Securities at approximately 3:30 p.m., New York City
time, on such determination date from three independent nationally recognized securities dealers
selected by the Company, provided that if three such bids cannot reasonably be obtained by the
Trustee, but two such bids are obtained, then the average of the two bids shall be used, and if
only one such bid can reasonably be obtained by the Trustee, this one bid shall be used. If the
Trustee cannot reasonably obtain at least one bid for $5,000,000 principal amount of the Securities
from a nationally recognized securities dealer, then the trading price per $1,000 principal amount
of the Securities will be deemed to be less than 95% of the product of the Sale Price of the Common
Shares and the then Applicable Exchange Rate.



     “Trust Officer” means the officer in the Institutional Trust Services department of the
Trustee having direct responsibility for administration of this Indenture.



     “Trustee” means the party named as the “Trustee” in the first paragraph of this Indenture
until a successor replaces it pursuant to the applicable provisions of this Indenture and,
thereafter, shall mean such successor. The foregoing sentence shall likewise apply to any
subsequent such successor or successors.



     “Voting Stock” means stock of any class or classes, however designated, having ordinary voting
power for the election of a majority of the board of directors of a corporation, other than stock
having such power only by reason of the occurrence of a contingency.



     SECTION 1.02. Other Definitions.



	 	 	 	 	 
	 	 	DEFINED
	TERM	 	IN SECTION
	“95% Trading Exception”
	 	 	11.01	 
	“Change in Control”
	 	 	3.01	(a)






5









 






	 	 	 	 	 
	 	 	DEFINED
	TERM	 	IN SECTION
	“Change in Control Purchase Date”
	 	 	3.01	(a)
	“Change in Control Purchase Notice”
	 	 	3.01	(b)
	“Change in Control Purchase Price”
	 	 	3.01	(a)
	“Change in Control Purchase Right”
	 	 	3.01	(a)
	“Clearstream”
	 	 	2.06	(c)
	“Daily Share Amount”
	 	 	11.05	 
	“Defaulted Interest”
	 	 	12.02	 
	“Distributed Securities”
	 	 	11.08	(a)
	“Euroclear”
	 	 	2.06	(c)
	“Event of Default”
	 	 	6.01	 
	“Exchange Agent”
	 	 	2.03	 
	“Exchange Date”
	 	 	11.02	 
	“Exchange Price”
	 	 	11.01	 
	“Exchange Property”
	 	 	11.13	(b)
	“Exchange Rate”
	 	 	11.05	 
	“Exchange Reference Period”
	 	 	11.05	 
	“Exchange Value”
	 	 	11.05	 
	“Excluded Holder”
	 	 	4.09	 
	“Expiration Time”
	 	 	11.08	(c)
	“Guarantee”
	 	 	10.01	(a)
	“Indenture Obligations”
	 	 	10.01	(a)
	“Liquidated Damages”
	 	 	4.08	(a)
	“Make-Whole Shares”
	 	 	11.09	(a)
	“Notice of Default”
	 	 	6.01	 
	“Offer Consideration”
	 	 	11.08	(c)
	“Option”
	 	 	2.02	 
	“Option to Elect Purchase Upon a Change in Control”
	 	 	3.01	(c)
	“Paying Agent”
	 	 	2.03	 
	“Purchase Agreement”
	 	 	2.02	 
	“Purchased Shares”
	 	 	11.08	(d)
	“Registrar”
	 	 	2.03	 
	“Required Cash Amount”
	 	 	11.02	 
	“Remaining Shares”
	 	 	11.05	(b)
	“Restricted Securities”
	 	 	2.06	(c)
	“Restricted Security Legend”
	 	 	2.06	(c)
	“Share Price”
	 	 	11.09	(a)
	“Shelf Registration Statement”
	 	 	4.08	(a)
	“Special Interest Record Date”
	 	 	12.02	 
	“Territory”
	 	 	4.09	 
	“Trigger Event”
	 	 	11.18	 
	“Volume Weighted Average Price”
	 	 	11.05	 






6









 






     SECTION 1.03. Incorporation by Reference of Trust Indenture Act.



     Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by
reference in and made a part of this Indenture. The following TIA terms used in this Indenture
have the following meanings:



     “Commission” means the SEC.



     “Indenture Securities” means the Securities and the Guarantee.



     “Indenture Security Holder” means a Holder.



     “Indenture to be Qualified” means this Indenture.



     “Indenture Trustee” or “Institutional Trustee” means the Trustee.



     “Obligor” on the indenture Securities means the Company.



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



     SECTION 1.04. Rules of Construction.



     Unless the context otherwise requires:




	 	(1)	 	a term has the meaning assigned to it;
	 
	 	(2)	 	an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles in
the United States of America as in effect from time to time;
	 
	 	(3)	 	“or” is not exclusive;
	 
	 	(4)	 	“including” means including, without limitation;
	 
	 	(5)	 	the term “merger” includes a statutory compulsory share
exchange and a conversion of a corporation into a limited liability company, a
partnership or other entity and vice versa;
	 
	 	(6)	 	references to statutes, rules or regulations include any
successor statute, rule or regulation, as the case may be;
	 
	 	(7)	 	the masculine gender includes the feminine and the neuter; and
	 
	 	(8)	 	words in the singular include the plural, and words in the
plural include the singular.










7









 











ARTICLE 2.

THE SECURITIES




     SECTION 2.01. Form and Dating.



     Other than as provided in Section 2.06, the Securities, any notations thereon relating to the
Guarantee and the Trustee’s certificate of authentication for the Securities shall be substantially
in the form of Exhibit A, which is a part of this Indenture. In addition to such legends as may be
required by Section 2.06, the Securities may have notations, legends or endorsements required by
law, stock exchange rule or usage, provided that any such notation, legend or endorsement required
by usage is in a form acceptable to the Company. The Company shall provide any such notations,
legends or endorsements to the Trustee in writing. Each Security shall be dated the date of its
authentication.



     Any Security in global form shall represent such of the outstanding Securities as shall be
specified therein and shall provide that it shall represent the aggregate amount of outstanding
Securities from time to time endorsed thereon and that the aggregate amount of outstanding
Securities represented thereby may from time to time be increased or reduced to reflect transfers
or exchanges permitted hereby. Any endorsement of a Security in global form to reflect the amount
of any increase or decrease in the Principal Amount of outstanding Securities represented thereby
shall be made by the Trustee or the Custodian, at the direction of the Trustee, in such manner and
upon instructions given by the Holder of such Security in accordance with this Indenture. Payment
of Principal Amount, interest, Change in Control Purchase Price, or Additional Amounts, if any, on
any Security in global form shall be made to the Holder of such Security.



     SECTION 2.02. Execution and Authentication.



     The Securities shall be executed on behalf of the Company by one Officer of the Company. The
signature of an Officer on the Securities may be manual or facsimile.



     Securities bearing the manual or facsimile signatures of individuals who were at any time the
proper Officers of the Company shall bind the Company, notwithstanding that such individuals or any
of them have ceased to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices at the date of authentication of such Securities.



     No Security shall be entitled to any benefit under this Indenture or be valid or obligatory
for any purpose unless there appears on such Security a certificate of authentication substantially
in the form provided for herein duly executed by the Trustee by manual signature of an authorized
signatory, and such certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered hereunder.



     The Trustee shall authenticate and deliver Securities (i) for original issue in an aggregate
Principal Amount of up to $2,500,000,000 upon a Company Order without any further action by the
Company (or an aggregate Principal Amount not to exceed $2,750,000,000 if the option (“Option”) set
forth in Section 2 of the Purchase Agreement dated May 18, 2006 (as amended from time to time, the
“Purchase Agreement”) by and among the Company, the Guarantor and



8









 





the Initial Purchasers is exercised in full), and (ii) any amount of additional Securities
specified by the Company after the Issue Date, in each case, upon a written order of the Company
signed by one Officer of the Company; provided, however, that no additional Securities may be
issued or guaranteed if a Default or Event of Default shall have occurred and be continuing. Such
order shall specify the amount of the Securities to be authenticated and the date of original issue
thereof. In authenticating such Securities, the Trustee shall be entitled to receive, and shall be
entitled to rely upon, an Opinion of Counsel substantially to the effect that such Securities, when
authenticated and delivered by the Trustee and issued by the Company in the manner and subject to
any conditions specified in such Opinion of Counsel, will constitute valid and legally binding
obligations of the Company enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors’ rights and to general equity principles.



     The aggregate Principal Amount of Securities outstanding at any time may not exceed the
aggregate Principal Amount of Securities authorized for issuance by the Company pursuant to one or
more written orders of the Company, except as provided in Section 2.07. Subject to the foregoing,
the aggregate principal amount of Securities that may be issued under this Indenture shall not be
limited.



     The Securities shall be issued only in registered form without coupons and only in
denominations of $1,000 Principal Amount and any integral multiple of $1,000.



     The Trustee may appoint an authenticating agent acceptable to the Company to authenticate
Securities. Unless limited by the terms of such appointment, an authenticating agent may
authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An authenticating agent has
the same rights as an Agent to deal with the Company, the Guarantor or any of their respective
Affiliates.



     SECTION 2.03. Registrar, Paying Agent and Exchange Agent.



     The Company shall maintain an office or agency where Securities may be presented for
registration of transfer or for exchange (“Registrar”), an office or agency where Securities may be
presented for purchase or payment (“Paying Agent”) and an office or agency where Securities may be
presented for exchange pursuant to Article 11 hereof (“Exchange Agent”). The Registrar shall keep
a register of the Securities and of their transfer and exchange. The Company may have one or more
co-registrars, one or more additional paying agents and one or more additional exchange agents.
The term Paying Agent includes any additional paying agent. The term Exchange Agent includes any
additional exchange agent, including any named in accordance with the provisions hereof.



     The Company shall enter into an appropriate agency agreement with any Registrar, Paying Agent,
Exchange Agent or co-registrar (if not the Trustee or an Affiliate of the Trustee). The agreement
shall implement the provisions of this Indenture that relate to such agent and the relevant
Security. The Company shall notify the Trustee of the name and address of any such agent. If the
Company fails to maintain a Registrar, Paying Agent or Exchange Agent, the Trustee shall act as
such and shall be entitled to appropriate compensation therefor pursuant to



9









 





Section 7.07 hereof. The Company, the Guarantor or an Affiliate of the Company or the
Guarantor may act as Paying Agent, Registrar, Exchange Agent or co-registrar.



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



     SECTION 2.04. Paying Agent to Hold Cash and Securities in Trust.



     Except as otherwise provided herein, prior to 10:00 a.m., New York City time, on each due date
of payments in respect of any Security, the Company shall deposit with the Paying Agent cash, or
Common Shares sufficient to make such payments when such payments are due. The Company shall
require the Paying Agent (if not the Trustee) to agree in writing that the Paying Agent shall hold
in trust for the benefit of Holders or the Trustee all cash and Common Shares held by the Paying
Agent for the making of payments in respect of the Securities and shall notify the Trustee of any
default by the Company in making any such payment. At any time during the continuance of any such
default, the Paying Agent shall, upon the written request of the Trustee, forthwith pay to the
Trustee all cash and Common Shares so held in trust. If the Company, the Guarantor or an Affiliate
of the Company or the Guarantor acts as Paying Agent, it shall segregate the cash and Common Shares
held by it as Paying Agent and hold it as a separate trust fund. The Company at any time may
require the Paying Agent to pay all cash and Common Shares held by it to the Trustee and to account
for any funds and Common Shares disbursed by it. Upon doing so, the Paying Agent shall have no
further liability for such cash or Common Shares.



     SECTION 2.05. Holder Lists.



     The Trustee shall preserve in as current a form as is reasonably practicable the most recent
list available to it of the names and addresses of Holders. If the Trustee is not the Registrar,
the Company shall cause to be furnished to the Trustee at least semiannually on April 26 and
October 26 a listing of Holders dated within ten days of the date on which the list is furnished
and at such other times as the Trustee may request in writing a list, in such form and as of such
date as the Trustee may reasonably require, of the names and addresses of Holders.



     SECTION 2.06. Exchange and Registration of Transfer of Securities; Restrictions on Transfers;
Depositary.



          (a) Upon surrender for registration of transfer of any Security at any office or agency of the
Company designated as Registrar or co-registrar pursuant to Section 2.03 hereof and satisfaction of
the requirements for such transfer set forth in this Section 2.06, the Company shall execute, and
the Trustee shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of any authorized denominations and of a like aggregate
Principal Amount and bearing such restrictive legends as may be required by this Indenture.




          Securities may be exchanged for a like aggregate Principal Amount of Securities of other
authorized denominations. Securities to be exchanged shall be surrendered at any office or agency
to be maintained by the Company designated as Registrar or co-registrar pursuant to Section 2.03
hereof and the Company shall execute and register, and the Trustee shall




10









 








authenticate and deliver in exchange therefor, the Security or Securities which the Holder
making the exchange shall be entitled to receive, bearing registration numbers not
contemporaneously outstanding.



          All Securities presented for registration or transfer or for exchange into like Securities,
purchase, or exchange pursuant to Article 11 hereof or payment shall (if so required by the
Company, the Trustee, the Registrar or any co-registrar) be duly endorsed by, or be accompanied by
a written instrument or instruments of transfer in form satisfactory to the Company and the
Trustee, duly executed by the Holder or such Holder’s attorney duly authorized in writing.




          No service charge shall be charged to the Holder for any exchange for like Securities or
registration of transfer of Securities, but the Company may require payment of a sum sufficient to
cover any tax, assessments or other governmental charges that may be imposed in connection
therewith.




          None of the Company, the Trustee, the Registrar or any co-registrar shall be required to
exchange for like Securities or register a transfer of (a) any Securities or portion thereof
surrendered for exchange pursuant to Article 11 hereof, or (b) any Securities or portion thereof
surrendered for purchase (and not withdrawn) pursuant to Section 3.01 hereof.




          All Securities issued upon any transfer or exchange for like Securities shall be valid
obligations of the Company, evidencing the same debt, and entitled to the same benefits under this
Indenture as the Securities surrendered upon such exchange or transfer.




          (b) So long as the Securities are eligible for book-entry settlement with the Depositary, or
unless otherwise required by law, all Securities that are so eligible may be represented by a
Security in global form registered in the name of the Depositary or the nominee of the Depositary,
except as otherwise specified below. The transfer and exchange of beneficial interests in such
Security in global form shall be effected through the Depositary in accordance with this Indenture
and the procedures of the Depositary therefor.




          Any Security in global form may be endorsed with or have incorporated in the text thereof such
legends or recitals or changes not inconsistent with the provisions of this Indenture as may be
required by the Custodian, the Depositary or by the National Association of Securities Dealers,
Inc. in order for the Securities to be tradeable on any market developed for trading securities
pursuant to Rule 144A or required to comply with any applicable law or any regulation thereunder or
with the rules and regulations of any securities exchange or automated quotation system upon which
the Securities may be listed or traded or to conform with any usage with respect thereto, or to
indicate any special limitations or restrictions to which any particular Securities are subject.




          (c) Every Security that bears or is required under this Section 2.06(c) to bear the Restricted
Securities Legend (together with any Common Shares issued upon exchange of the Securities and
required to bear the legend set forth in Section 2.06(d), collectively, the “Restricted
Securities”) shall be subject to the restrictions on transfer set forth in this Section 2.06(c)
(including those set forth in the legend set forth below) unless such restrictions




11









 





on transfer shall be waived by written consent of the Company, and the Holder of each such
Transfer Restricted Security, by such Holder’s acceptance thereof, agrees to be bound by all such
restrictions on transfer. As used in Sections 2.06(c) and 2.06(d), the term “transfer” encompasses
any sale, pledge, transfer or other disposition whatsoever of any Restricted Security.



          Until transferred under Rule 144(k) under the Securities Act (or any successor provision), any
certificate evidencing such Security (and all securities issued in exchange therefor or
substitution thereof, other than Common Shares issued upon exchange or purchase thereof, which
shall bear the legend set forth in Section 2.06(d) if applicable) shall bear a legend in
substantially the form set forth on the face of the Security in Exhibit A (the “Restricted Security
Legend”), unless such Security has been sold pursuant to a registration statement that has been
declared effective under the Securities Act (and which continues to be effective at the time of
such transfer), or unless otherwise agreed by the Company in writing, with written notice thereof
to the Trustee.




          Any Security (or security issued in exchange or substitution therefor) as to which the
conditions for removal of the Restricted Security Legend have been satisfied may, upon surrender of
such Security for exchange to the Registrar in accordance with the provisions of this Section 2.06,
be exchanged for a new Security or Securities, of like tenor and aggregate Principal Amount, which
shall not bear the Restricted Security Legend required by this Section 2.06(c).




          Notwithstanding any other provisions of this Indenture (other than the provisions set forth in
Section 2.06(b) and in this Section 2.06(c)), a Security in global form may not be transferred as a
whole or in part except by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such
nominee to a successor Depositary or a nominee of such successor Depositary.




          The Depositary shall be a clearing agency registered under the Exchange Act. The Company
initially appoints The Depository Trust Company to act as Depositary. Initially, one or more
Securities in global form shall be issued to the Depositary, registered in the name of Cede & Co.,
as the nominee of the Depositary, and deposited with the Custodian for Cede & Co.




          If at any time the Depositary for a Security in global form notifies the Company that it is
unwilling or unable to continue as Depositary for such Security, the Company may appoint a
successor Depositary with respect to such Security. If a successor Depositary is not appointed by
the Company within ninety (90) days after the Company receives such notice, the Company will
execute, and the Trustee, upon receipt of an Officers’ Certificate for the authentication and
delivery of Securities, will authenticate and deliver, Securities in certificated or definitive
form, in aggregate Principal Amount equal to the Principal Amount of the Security in global form,
in exchange for such Security in global form.




          Securities in certificated form issued in exchange for all or a part of a Security in global
form pursuant to this Section 2.06 shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from its direct or indirect participants
or otherwise, shall instruct the Trustee. Upon execution and authentication, the




12









 





Trustee shall deliver such Securities in certificated form to the persons in whose names such
Securities in certificated form are so registered.



          At such time as all interests in a Security in global form have been exchanged pursuant to
Article 11 hereof, canceled or purchased or exchanged for Securities in certificated form, or
transferred to a transferee who receives Securities in certificated form, such Security in global
form shall, upon receipt thereof, be canceled by the Trustee in accordance with standing procedures
and instructions existing between the Depositary and the Custodian. At any time prior to such
cancellation, if any interest in a Security in global form is exchanged for Securities in
certificated form, exchanged pursuant to Article 11 hereof, purchased or canceled, the Principal
Amount of the Security in global form shall, in accordance with the standing procedures and
instructions existing between the Depositary and the Custodian, be appropriately reduced and an
endorsement shall be made on such Security in global form, by the Trustee or the Custodian, at the
direction of the Trustee, to reflect such reduction.




          (d) Until transferred under Rule 144(k) under the Securities Act (or any successor provision),
any certificate representing Common Shares issued upon exchange of any Security shall bear a legend
in substantially the following form, unless such Common Shares have been originally issued upon
exchange of Securities that have been transferred pursuant to Rule 144 under the Securities Act or
sold pursuant to a registration statement that has been declared effective under the Securities Act
(and which continues to be effective at the time of such issuance or sale), or unless otherwise
agreed by the Company in writing with written notice thereof to the transfer agent for the Common
Shares:




THE COMMON SHARES EVIDENCED HEREBY WERE ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS COMMON SHARE IS HEREBY NOTIFIED THAT THE SELLER
OF THIS COMMON SHARE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION
5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.



THE HOLDER OF THIS COMMON SHARE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THE
NABORS’ COMMON SHARES ISSUABLE UPON EXCHANGE OF THE NOTES HEREOF MAY BE OFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO NABORS INDUSTRIES LTD. OR TO
NABORS INDUSTRIES, INC. OR ANY SUBSIDIARY THEREOF, (II) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT), (III) PURSUANT TO THE EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144A OR (IV) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF THE CASES (I) THROUGH
(IV) ABOVE IN


13









 








ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES,
AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER THE COMMON SHARES FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A)
ABOVE, AND IN EACH OF THE FOREGOING CASES (OTHER THAN A TRANSFER PURSUANT TO CLAUSE
(A)(IV) ABOVE), TO REQUIRE SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION
AS THE TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING
MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. IN ANY CASE, THE HOLDER HEREOF
WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTIONS WITH REGARD TO
THE SECURITIES EXCEPT AS PERMITTED UNDER THE SECURITIES ACT. THIS LEGEND WILL BE
REMOVED UPON THE EARLIER OF THE TRANSFER HEREOF PURSUANT TO CLAUSE (IV) ABOVE OR
UPON ANY TRANSFER HEREOF AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO
THE SALES OF THE SECURITIES EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES
ACT (OR ANY SUCCESSOR PROVISION).



          Any such Common Shares as to which such restrictions on transfer shall have expired in
accordance with their terms or as to which the conditions for removal of the foregoing legend set
forth therein have been satisfied may, upon surrender of the certificates representing such Common
Shares for exchange in accordance with the procedures of the Transfer Agent for the Common Shares,
be exchanged for a new certificate or certificates for a like number of Common Shares, which shall
not bear the restrictive legend required by this Section 2.06(d).




          (e) Any Security that, prior to the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act, is purchased or owned by the Company, the
Guarantor or any Affiliate of the Company or the Guarantor may not be resold by the Guarantor, the
Company or such Affiliate unless registered under the Securities Act or resold pursuant to an
exemption from the registration requirements of the Securities Act in a transaction which results
in such Security no longer being “restricted securities” (as defined under Rule 144).




          (f) Each Holder of a Security agrees to indemnify the Guarantor, the Company and the Trustee
against any liability that may result from the transfer, exchange or assignment of such Holder’s
Security in violation of any provision of this Indenture and/or applicable United States Federal or
state securities laws or foreign securities laws.




          The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance
with any restrictions on transfer imposed under this Indenture or under applicable law with respect
to any transfer of any interest in any Security (including any transfers between or among
Depositary participants or beneficial owners of interests in a Security in global form) other than
to require delivery of such certificates and other documentation or evidence as are





14









 






expressly required by, and to do so if and when expressly required by the terms of, this
Indenture, and to examine the same to determine substantial compliance as to form with the express
requirements hereof.




     SECTION 2.07. Replacement Securities.



     If (a) any mutilated Security is surrendered to the Trustee, or (b) the Company and the
Trustee receive evidence to their satisfaction of the destruction, loss or theft of any Security,
and there is delivered to the Company and the Trustee such security or indemnity as may be required
by them to save the Company and the Trustee harmless, then, in the absence of notice to the Company
or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall
execute and, upon its written request, the Trustee shall authenticate and deliver, in exchange for
any such mutilated Security or in lieu of any such destroyed, lost or stolen Security, a new
Security of like tenor and Principal Amount, bearing a number not contemporaneously outstanding.



     In case any such mutilated, destroyed, lost or stolen Security has become or is about to
become due and payable, or is about to be purchased by the Company pursuant to Article 3 hereof, or
exchanged pursuant to Article 11 hereof, the Company in its discretion may, instead of issuing a
new Security, pay or purchase such Security, or the Guarantor may issue the underlying Securities,
as the case may be.



     Upon the issuance of any new Securities under this Section 2.07, the Company may, as a
condition to such issuance, require the payment of a sum sufficient to cover any tax, assessment or
other governmental charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.



     Every new Security issued pursuant to this Section 2.07 in lieu of any mutilated, destroyed,
lost or stolen Security shall constitute an original additional contractual obligation of the
Company, whether or not the mutilated destroyed, lost or stolen Security shall be at any time
enforceable by anyone, and shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.



     The provisions of this Section 2.07 are exclusive and shall preclude (to the extent lawful)
all other rights and remedies with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities.



     SECTION 2.08. Outstanding Securities; Determinations of Holders’ Action.



     Securities outstanding at any time are all the Securities authenticated by the Trustee except
for those canceled by it, those delivered to it for cancellation, those paid pursuant to Section
4.01 hereof, those exchanged pursuant to Article 11 hereof, those replaced or paid pursuant to
Section 2.07 hereof and those described in this Section 2.08 as not outstanding. A Security does
not cease to be outstanding because the Company or an Affiliate thereof holds the Security;
provided, however, that in determining whether the Holders of the requisite Principal Amount of
Securities have given or concurred in any request, demand, authorization, direction, notice,
consent or waiver hereunder, Securities owned by the Company or any Affiliate of the Company shall
be disregarded and deemed not to be outstanding, except that, in determining



15









 




whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which the Trust Officer
actually knows to be so owned shall be so disregarded unless written notice of such ownership is
received by the Trustee at the Corporate Trust Office of the Trustee in accordance with Section
13.02 hereof and such notice references the Securities and this Indenture. Subject to the
foregoing, only Securities outstanding at the time of such determination shall be considered in any
such determination (including determinations pursuant to Articles 6 and 9 hereof).



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



     If the Paying Agent holds, in accordance with this Indenture, by 10:00 a.m., New York City
time, on the Business Day following a Change in Control Purchase Date, or on Stated Maturity, cash
or securities, if permitted hereunder, sufficient to pay all Securities payable on that date, then
on and after that date such Securities shall cease to be outstanding and interest and Additional
Amounts, if any, on such Securities shall cease to accrue.



     If a Security is exchanged in accordance with Article 11 hereof, then from and after such
exchange such Security shall cease to be outstanding and interest and Additional Amounts, if any,
shall cease to accrue on such Security.



     SECTION 2.09. Temporary Securities.



     Pending the preparation of definitive Securities, the Company may execute, and upon Company
Order the Trustee shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as conclusively evidenced by their execution of such
Securities.



     If temporary Securities are issued, the Company shall cause definitive Securities to be
prepared without unreasonable delay. After the preparation of definitive Securities, the temporary
Securities shall be exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of the Company designated for such purpose pursuant to Section
2.03 hereof, without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities, the Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a like Principal Amount of definitive Securities of authorized denominations.
Until so exchanged, the temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.



     SECTION 2.10. Cancellation.



     All Securities surrendered for payment, purchase, exchange pursuant to Article 11 hereof or
registration of transfer or exchange for the Securities shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and shall be promptly canceled by it. The Company
may at any time deliver to the Trustee for cancellation any Securities previously authenticated



16









 







and delivered hereunder which the Company may have acquired in any manner whatsoever, and all
Securities so delivered shall be promptly canceled by the Trustee. The Company may not issue new
Securities to replace Securities it has paid for or delivered to the Trustee for cancellation or
that any Holder has exchanged pursuant to Article 11 hereof. No Securities shall be authenticated
in lieu of or in exchange for any Securities canceled as provided in this Section 2.10, except as
expressly permitted by this Indenture. All canceled Securities held by the Trustee shall be
disposed of by the Trustee in accordance with its customary procedures.




     SECTION 2.11. Persons Deemed Owners.



     Prior to due presentment of a Security for registration of transfer, the Company, the Trustee
and any agent of the Company or the Trustee may treat the Person in whose name such Security is
registered as the owner of such Security for the purpose of receiving payment of Principal Amount,
interest, Change in Control Purchase Price and Additional Amounts, if any, in respect thereof, for
the purpose of exchange and for all other purposes whatsoever, whether or not such Security be
overdue, and none of the Company, the Guarantor, the Trustee or any agent of the Company, the
Guarantor or the Trustee shall be affected by notice to the contrary.



     SECTION 2.12. CUSIP Numbers.



     The Company in issuing the Securities may use CUSIP numbers (if then generally in use), and
the Company will promptly notify the Trustee of any change in the CUSIP numbers.



ARTICLE 3.

PURCHASES




     SECTION 3.01. Purchase at Option of the Holder Upon a Change in Control.



          (a) In the event any Change in Control (as defined below) shall occur prior to the Stated
Maturity, each Holder of Securities shall have the right (the “Change in Control Purchase Right”),
at the Holder’s option, to require the Company to purchase any or all of such Holder’s Securities
(or portions thereof that are integral multiples of $1,000 of Principal Amount), on a date selected
by the Company (the “Change in Control Purchase Date”), which Change in Control Purchase Date shall
be no later than 35 Trading Days after the date of the Change in Control Notice (as defined below)
and no earlier than 20 Trading Days after the date the Change in Control Purchase Notice is mailed
in accordance with Section 3.01(b), at a purchase price payable in cash (the “Change in Control
Purchase Price”) equal to 100% of the Principal Amount of the Notes to be Purchased plus any
accrued and unpaid interest, if any, and Additional Amounts, if any, to, but excluding, the Change
in Control Purchase Date; provided that if such Change in Control Purchase Date falls after an
Interest Record Date and on or prior to the corresponding Interest Payment Date, then the interest
payable on such Interest Payment Date shall be paid to the Holders of record of the Securities on
the preceding Interest Record Date instead of the holders surrendering the Securities for purchase.




     A “Change in Control” shall be deemed to have occurred at such time as either of the following
events shall occur:



17









 





          (a) any person or group, other than the Guarantor, its subsidiaries or any employee benefits
plan of the Guarantor or its subsidiaries, files a Schedule 13D or Schedule TO (or any successor
schedule, form or report) pursuant to the Exchange Act, disclosing that such person has become the
beneficial owner of shares with a majority of the total voting power of the Common Shares; unless
such beneficial ownership (a) arises solely as a result of a revocable proxy delivered in response
to a proxy or consent solicitation made pursuant to the applicable rules and regulations under the
Exchange Act, and (b) is not also then reportable on Schedule 13D (or any successor schedule) under
the Exchange Act; or




          (b) the Guarantor consolidates with or merges with or into another person (other than a
subsidiary of the Guarantor), or sells, conveys, transfers or leases all or substantially all of
its properties and assets to any person (other than a subsidiary of the Guarantor) or any person
(other than a subsidiary of the Guarantor) consolidates with or merges with or into the Guarantor,
and the outstanding Common Shares are reclassified into, converted for or converted into the right
to receive any other property or security, provided that none of these circumstances will be a
Change in Control if persons that beneficially own the Common Shares immediately prior to the
transaction own, directly or indirectly, Common Shares with a majority of the total voting power of
all outstanding common shares of the surviving or transferee person immediately after the
transaction in substantially the same proportion as their ownership of the Guarantor’s Voting Stock
immediately prior to the transaction.




     For purposes of defining a Change in Control:




          (x) the term “person” and the term “group” have the meanings given by Section 13(d) and
14(d) of the Exchange Act or any successor provisions;




          (y) the term “group” includes any group acting for the purpose of acquiring, holding or
disposing of securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act or any
successor provision; and




          (z) the term “beneficial owner” is determined in accordance with Rules 13d-3 and 13d-5
under the Exchange Act or any successor provisions, except that a person will be deemed to
have beneficial ownership of all shares that person has the right to acquire irrespective of
whether that right is exercisable immediately or only after the passage of time.



     Notwithstanding the foregoing, it will not constitute a Change in Control if at least 90% of
the consideration for the Common Shares (excluding cash payments for fractional shares and cash
payments made in respect of dissenter’s appraisal rights and cash payments of the Required Cash
Amount, if any) in the transaction or transactions constituting the Change in Control transaction
consists of common stock traded on a United States national securities exchange or approved for
quotation on The NASDAQ National Market, or which will be so traded or quoted when exchanged in
connection with the Change in Control transaction, and as a result of such transaction or
transactions the Securities become convertible solely into such common stock.



          (b) The Company, or at its request (which must be received by the Trustee at least three
Business Days prior to the date the Trustee is requested to give such notice as

18









 








described below) the Trustee in the name of and at the expense of the Company, shall mail to
all Holders of record of the Securities a notice (a “Change in Control Purchase Notice”) of the
occurrence of a Change in Control and of the purchase right arising as a result thereof on or
before the 30th day after the Change in Control Notice. The Company shall deliver a copy of the
Change in Control Purchase Notice to the Trustee.




     Each Change in Control Purchase Notice shall state:




          (1) briefly the event(s) causing the Change in Control;




          (2) the effective date of such Change in Control;




          (3) the Change in Control Purchase Date;




          (4) the last date on which a Holder may exercise its Change in Control Purchase Right
pursuant to this Section 3.01;




          (5) the Change in Control Purchase Price;




          (6) the names and addresses of the Paying Agent and the Exchange Agent;




          (7) a description of the procedures which a Holder must follow to exercise its Change
in Control Purchase Right;




          (8) the then-current Exchange Rate and any adjustments thereto, including the number of
Make-Whole Shares issuable with respect to such exchange;




          (9) that Securities with respect to which a Holder has elected to exercise its Change
in Control Purchase Right may be exchanged pursuant to Article 11 only if the Option to
Elect Purchase Upon a Change in Control has been withdrawn in accordance with Section 3.02;




          (10) that the Change in Control Purchase Price for any Security as to which an Option
to Elect Purchase Upon a Change in Control has been duly given and not withdrawn, together
with any accrued interest payable with respect thereto, will be paid on or prior to the
third Trading Day following the later of the Change in Control Purchase Date and the time of
surrender of such Security;




          (11) briefly, the exchange rights of the Securities;




          (12) the procedures for withdrawing an Option to Elect Purchase upon a Change in
Control;




          (13) that, unless the Company defaults in making payment of such Change in Control
Purchase Price and interest due, if any, interest on the Securities surrendered for purchase
will cease to accrue on and after the Change in Control Purchase Date; and



19









 






          (14) the CUSIP number or numbers, as the case may be, of the Securities.



     No failure of the Company to give a Change in Control Purchase Notice shall limit any Holder’s
right to exercise a Change in Control Purchase Right.



          (c) For a Security to be so purchased at the option of the Holder, the Paying Agent must
receive such Security with the form entitled “Option to Elect Purchase Upon a Change in Control” on
the reverse thereof duly completed, together with such Security duly endorsed for transfer, no
later than the close of business on the third Business Day immediately preceding the Change in
Control Purchase Date. All questions as to the validity, eligibility (including time of receipt)
and acceptance of any Security for purchase shall be determined by the Company, whose determination
shall be final and binding.




     SECTION 3.02. Effect of Change in Control Purchase Notice; Withdrawal.



     Upon receipt by the Paying Agent of the Option to Elect Purchase Upon a Change in Control
specified in Section 3.01(c) hereof, the Holder of the Security in respect of which such Option to
Elect Purchase Upon a Change in Control was given shall (unless such Option to Elect Purchase Upon
a Change in Control is withdrawn as specified in the following two paragraphs) thereafter be
entitled to receive solely the Change in Control Purchase Price with respect to such Security,
including accrued and unpaid interest, if any. Such Change in Control Purchase Price, including
accrued and unpaid interest, if any, subject to the provision at the end of Section 3.01(a), shall
be paid to such Holder no later than the third Trading Day following the later of (x) the Change in
Control Purchase Date with respect to such Security (provided the conditions in Section 3.01(c)
hereof have been satisfied) and (y) the time of delivery of such Security to the Paying Agent by
the Holder thereof in the manner required by Section 3.01(c) hereof. Securities in respect of
which an Option to Elect Purchase Upon a Change in Control has been given by the Holder thereof may
not be exchanged pursuant to Section 11 hereof or after the date of the delivery of such Option to
Elect Purchase Upon a Change in Control unless such Option to Elect Purchase Upon a Change in
Control has first been validly withdrawn as specified in the following two paragraphs.



     An Option to Elect Purchase Upon a Change in Control may be withdrawn by means of a written
notice of withdrawal delivered to the office of the Paying Agent at any time prior to the close of
business on the Change in Control Purchase Date to which it relates specifying:




          (1) the name of the Holder,




          (2) a statement that the Holder is withdrawing its Option to Elect Purchase upon a
Change in Control,




          (3) the certificate number of any certificated Security in respect of which such notice
of withdrawal is being submitted or notice compliant with relevant DTC procedures, if the
Securities are not certificated,




          (4) the Principal Amount of the Security with respect to which such notice of
withdrawal is being submitted, and



20









 






          (5) the Principal Amount, if any, of such Security which remains subject to the
original Option to Elect Purchase Upon a Change in Control and which has been or will be
delivered for purchase by the Company.



     There shall be no purchase of any Securities pursuant to Section 3.01 hereof if there has
occurred (prior to, on or after, as the case may be, the giving, by the Holders of such Securities,
of the required Option to Elect Purchase Upon a Change in Control) and is continuing an Event of
Default (other than a default in the payment of the Change in Control Purchase Price with respect
to such Securities).



     SECTION 3.03. Deposit of Change in Control Purchase Price.



     At or before 10:00 a.m., New York City time, on or prior to the third Business Day following a
Change in Control Purchase Date, the Company shall deposit with the Trustee or with the Paying
Agent (or, if the Company or an Affiliate of the Company is acting as the Paying Agent, shall
segregate and hold in trust as provided in Section 2.04 hereof) an amount of cash sufficient to pay
the aggregate Change in Control Purchase Price of all the Securities or portions thereof which are
to be purchased as of such Change in Control Purchase Date.



     SECTION 3.04. Securities Purchased in Part.



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



     SECTION 3.05. Covenant to Comply with Securities Laws upon Purchase of Securities.



     In connection with any purchase of Securities under 3.01 hereof (provided that such offer or
purchase constitutes an “issuer tender offer” for purposes of Rule 13e-4 (which term, as used
herein, includes any successor provision thereto) under the Exchange Act at the time of such offer
or purchase), and subject to any exemptions available under applicable law, the Company shall (i)
comply with Rule 13e-4 and Rule 14e-1 (or any successor provision) under the Exchange Act, (ii)
file related Schedule TO (or any successor schedule, form or report) under the Exchange Act, and
(iii) otherwise comply with all Federal and state securities laws so as to permit the rights and
obligations under Section 3.01 to be exercised in the time and in the manner specified in Section
3.01.



     SECTION 3.06. Repayment to the Company.



     The Trustee and the Paying Agent shall return to the Company any cash that remains unclaimed
as provided in paragraph 10 of the Securities, together with interest, if any, thereon, held by
them for the payment of a Change in Control Purchase Price; provided, however, that to



21









 




the extent that the aggregate amount of cash deposited by the Company pursuant to Section 3.03
hereof exceeds the aggregate Change in Control Purchase Price of the Securities or portions thereof
which the Company is obligated to purchase as of the Change in Control Purchase Date, then promptly
after the third Business Day following the Change in Control Purchase Date, the Trustee and the
Paying Agent shall return any such excess to the Company together with interest, if any, thereon.




ARTICLE 4.

COVENANTS




     SECTION 4.01. Payment of Securities.



     The Company shall promptly pay or cause to be paid all payments in respect of the Securities
on the dates and in the manner provided in the Securities or pursuant to this Indenture Principal
Amount, interest, Change in Control Purchase Price, and Additional Amounts, if any, shall be
considered paid on the applicable date due or, in the case of a Change in Control Purchase Price,
on the third Business Day following the applicable Change in Control Purchase Date, if by 10:00
a.m., New York City time, on such date the Trustee or the Paying Agent holds, in accordance with
this Indenture, cash or securities, if permitted hereunder, sufficient to pay all such amount then
due.



     The Company shall pay interest on overdue amounts at the rate set forth in paragraph 1 of the
Securities and it shall pay interest on overdue interest at the same rate compounded semiannually
(to the extent that the payment of such interest shall be legally enforceable), which interest on
overdue interest shall accrue from the date such amounts became overdue.



     SECTION 4.02. Financial Information; SEC Reports.



     The Guarantor will deliver to the Trustee (a) as soon as available and in any event within 90
days after the end of each fiscal year of the Guarantor (i) a consolidated balance sheet of the
Guarantor and its subsidiaries as of the end of such fiscal year and the related consolidated
statements of operations, stockholders’ equity and cash flows for such fiscal year, all reported on
by an independent public accountant of nationally recognized standing and (ii) a report containing
a management’s discussion and analysis of the financial condition and results of operations and a
description of the business and properties of the Guarantor and (b) as soon as available and in any
event within 45 days after the end of each of the first three quarters of each fiscal year of the
Guarantor (i) an unaudited consolidated financial report for such quarter and (ii) a report
containing a management’s discussion and analysis of the financial condition and results of
operations of the Guarantor; provided that the foregoing shall not be required for any fiscal year
or quarter, as the case may be, with respect to which the Guarantor files or expects to file with
the Trustee an annual report or quarterly report, as the case may be, pursuant to the third
paragraph of this Section 4.02.



     At any time when neither the Guarantor nor the Company is subject to either Section 13 or
15(d) of the Exchange Act, the Guarantor and the Company shall at the request of any Holder (or
holders of Common Shares issued upon exchange of the Securities) provide to such Holder (or holders
of such Common Shares) and any prospective purchaser designated by such Holders



22









 




(or holders of such Common Shares), as the case may be, such information, if any, required by
Rule 144A(d)(4) under the Securities Act.




     The Guarantor shall file with the Trustee, within 15 days after it files such annual and
quarterly reports, information, documents and other reports with the SEC, copies of its annual
report and of the information, documents and other reports (or copies of such portions of any of
the foregoing as the SEC may by rules and regulations prescribe) which the Guarantor is required to
file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act.



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



     SECTION 4.03. Compliance Certificate.



     The Company and the Guarantor shall each deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company, an Officers’ Certificate in which one of the two Officers
signing such certificate is either the Chief Executive Officer, Chief Financial Officer or Chief
Accounting Officer of the Company or the Guarantor, as applicable, stating whether or not to the
knowledge of the signers thereof the Company or the Guarantor, as applicable, is in default in the
performance and observance of any of the terms, provisions and conditions of this Indenture
(without regard to any period of grace or requirement of notice provided hereunder) and, if the
Company or the Guarantor, as applicable, shall be in default, specifying all such defaults and the
nature and status thereof of which the signers may have knowledge.



     The Company and the Guarantor will deliver to the Trustee, as soon as possible and in any
event within five days, upon becoming aware of any default or any Event of Default, an Officers’
Certificate specifying with particularity such Default or Event of Default and further stating what
action the Company and the Guarantor has taken, is taking or proposes to take with respect thereto.



     Any notice required to be given under this Section 4.03 shall be delivered to the Trustee at
its Corporate Trust Office.



     SECTION 4.04. Further Instruments and Acts.



     Upon request of the Trustee, the Company and the Guarantor will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or proper to carry out
more effectively the purposes of this Indenture.



     SECTION 4.05. Maintenance of Office or Agency.



     The Company will appoint in the Borough of Manhattan, The City of New York, an office or
agency where Securities may be presented or surrendered for payment, where Securities may be
surrendered for registration of transfer, purchase or exchange and where notices and demands to or
upon the Company in respect of the Securities and this Indenture may be served.



23









 




The office or agency of the Trustee in the Borough of Manhattan, The City of New York, which
on the date hereof is located at 45 Broadway, 12th floor, New York, NY 10006, shall be the office
or agency for all of the aforesaid purposes unless the Company shall appoint some other office or
agency for such purposes and shall give prompt written notice to the Trustee of the location, and
any change in the location, of such other office or agency. If at any time the Company shall fail
to maintain any such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office.




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



     SECTION 4.06. Existence.



     Subject to Article 5 hereof, each of the Company and the Guarantor will do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate existence under
the laws of its jurisdiction of incorporation and rights (charter and statutory); provided,
however, that neither the Company nor the Guarantor shall be required to preserve any such right if
the Company or the Guarantor shall determine that the maintenance thereof is no longer desirable in
the conduct of the business of the Company or the Guarantor and that the loss thereof is not
disadvantageous in any material respect to the Holders.



     SECTION 4.07. [Reserved].



     SECTION 4.08. Registration Rights.



          (a) The Company and the Guarantor agree that the Holders (and any Person that has a beneficial
interest in a Security) from time to time of Registrable Securities (as such term is defined in the
Registration Rights Agreement) are entitled to the benefits of the Registration Rights Agreement.
Pursuant to the Registration Rights Agreement, the Company and the Guarantor have agreed for the
benefit of the Holders from time to time of Registrable Securities, at the Company’s and the
Guarantor’s expense, to use all reasonable best efforts (i) to file within 90 days after the Issue
Date, a shelf registration statement (the “Shelf Registration Statement”) with the Commission with
respect to resales of the Restricted Securities and the issuance by the Guarantor or, to the extent
applicable, resale by the holders of the Common Shares issuable upon exchange of the Securities,
(ii) to cause such Shelf Registration Statement to be declared effective by the Commission not
later than 180 days after the Issue Date, and (iii) to maintain such Shelf Registration Statement
continuously effective under the Securities Act subject to and in accordance with the terms of the
Registration Rights Agreement. Liquidated damages (“Liquidated Damages”) with respect to the
Securities shall be assessed if a Registration Default (as defined in the Registration Rights
Agreement) occurs, in such amounts and at such times as provided in the Registration Rights
Agreement.




24









 








          (b) The Company shall pay Liquidated Damages due pursuant to clause (a) of this Section 4.08
to the Holders in cash in the amounts and on the dates specified in Section 3 of the Registration
Rights Agreement and in this Indenture.




     Whenever in this Indenture there is mentioned, in any context, any payment in respect of any
Security, such mention shall be deemed to include mention of the payment of Liquidated Damages
provided for in this Section to the extent that, in such context, Liquidated Damages are, were or
would be payable in respect thereof pursuant to the provisions of this Section 4.08, and express
mention of the payment of Liquidated Damages (if applicable) in any provisions hereof shall not be
construed as excluding Liquidated Damages in those provisions hereof where such express mention is
not made.



     If Liquidated Damages become payable to the Holders pursuant to the Registration Rights
Agreement, at least five Business Days prior to the date on which such Liquidated Damages are
payable, the Company shall deliver to the Trustee a certificate to that effect stating (i) the
amount of such Liquidated Damages that is payable and (ii) the date on which such amount is
payable. Unless and until a Trust Officer receives at the Corporate Trust Office such a
certificate, the Trustee may assume without inquiry that no such amount is payable.



     Liquidated Damages shall not be payable with respect to the Common Shares issuable upon
exchange of the Securities.



     SECTION 4.09. Payment of Additional Amounts.



     Unless otherwise required by Bermudan law, neither the Company nor the Guarantor will deduct
or withhold from payments made with respect to the Securities and the Guarantee on account of any
present or future Taxes. In the event that either the Company or the Guarantor is required to
withhold or deduct on account of any Taxes due from any payment made under or with respect to the
Securities or the Guarantee, as the case may be, the Company or the Guarantor, as the case may be,
will pay such additional amounts (“Additional Amounts”) as may be necessary so that the net amount
received by each Holder of Securities will equal the amount that the Holder would have received if
the Taxes had not been required to be withheld or deducted; provided that no Additional Amounts
will be payable with respect to a payment made to a Holder (an “Excluded Holder”) to the extent:
(i) that any Taxes would not have been so imposed but for the existence of any present or former
connection between the Holder and Bermuda, other than the mere receipt of the payment, the
acquisition, ownership or disposition of such Securities or the exercise or enforcement of rights
under the Securities, the Guarantee or this Indenture; (ii) of any estate, inheritance, gift,
sales, transfer or personal property Taxes imposed with respect to the Securities, except as
described below or as otherwise provided in this Indenture; (iii) that any such Taxes would not
have been imposed but for the presentation of the Securities, where presentation is required, for
payment on a date more than 30 days after the date on which the payment became due and payable or
the date on which payment thereof is duly provided for, whichever is later, except to the extent
that the beneficiary or Holder thereof would have been entitled to Additional Amounts had the
Securities been presented for payment on any date during such 30-day period; or (iv) that the
Holder would not be liable or subject to such withholding or deduction of Taxes but for the failure
to make a valid declaration of non-residence or other similar claim for exemption, if: (a) the
making of the declaration or claim is



25









 




required or imposed by statute, treaty, regulation, ruling or administrative practice of the
relevant taxing authority as a precondition to an exemption from, or reduction in, the relevant
Taxes; and (b) at least 60 days prior to the first payment with respect to which the Company or the
Guarantor shall apply this clause (iv), the Company or the Guarantor shall have notified all
Holders of the Securities in writing that they shall be required to provide this declaration or
claim. The Company and the Guarantor shall also (i) withhold or deduct such Taxes as required;
(ii) remit the full amount of Taxes deducted or withheld to the relevant taxing authority in
accordance with all applicable laws; (iii) use reasonable efforts to obtain from each relevant
taxing authority imposing the Taxes certified copies of tax receipts evidencing the payment of any
Taxes deducted or withheld; and (iv) upon request, make available to the Holders of the Securities,
within 60 days after the date the payment of any Taxes deducted or withheld is due pursuant to
applicable law, certified copies of tax receipts evidencing such payment by the Company or the
Guarantor and, notwithstanding the Company’s or the Guarantor’s efforts to obtain the receipts, if
the same are not obtainable, other evidence of such payments.




     In addition, the Company or the Guarantor will pay any stamp, issue, registration, documentary
or other similar taxes and duties, including interest, penalties and additional amounts with
respect thereto, payable in Bermuda or the United States, or any political subdivision or taxing
authority of or in the foregoing with respect to the creation, issue, offering, enforcement or
retirement of the Securities or the Guarantee.



     At least 30 days prior to each date on which any payment under or with respect to the
Securities is due and payable, if the Company or the Guarantor becomes obligated to pay Additional
Amounts with respect to such payment, the Company (or in respect of the Guarantee, the Guarantor)
shall deliver to the Trustee an Officers’ Certificate stating the fact that such Additional Amounts
will be payable, and the amounts so payable and will set forth such other information as is
necessary to enable the Trustee to pay such Additional Amounts to the Holders on the payment date.
Whenever in this Indenture there is mentioned, in any context, the payment of Principal Amount,
interest, Change in Control Purchase Price, or overdue interest, or any other amount payable on or
with respect to any of the Securities, such mention shall be deemed to include mention of the
payment of Additional Amounts provided for in this Section 4.09 to the extent that, in such
context, Additional Amounts are, were or would be payable in respect thereof pursuant to the
provisions of this Section 4.09 and express mention of the payment of Additional Amounts in those
provisions hereof shall not be construed as excluding Additional Amounts in those provisions hereof
where such express mention is not made (if applicable).



     If payments with respect of the Securities or the Guarantee become subject generally to the
taxing jurisdiction of any Territory or any political subdivision or taxing authority thereof or
therein having power to tax, other than or in addition to Bermuda or any political subdivision or
taxing authority therein or thereof having power to tax, immediately upon becoming aware thereof
the Company shall notify the Trustee of such event, and thereupon the Company or the Guarantor, as
the case may be, shall be obligated to pay Additional Amounts in respect thereof on terms
corresponding to the terms of the foregoing provisions of this Section 4.09 with the substitution
for (or, as the case may be, in addition to) the references herein to Bermuda or any political
subdivision or authority therein or thereof having power to tax or references to that other or
additional Territory or any political subdivision or authority therein or thereof having power to
tax to whose taxing jurisdiction such payments shall have become subject as aforesaid.



26









 




The term “Territory” means for this purpose any jurisdiction in which the Company or the
Guarantor, as the case may be, is incorporated or in which it has its place of central management
or central control.




     The obligations of the Company and the Guarantor under this Section 4.09 shall survive the
termination of this Indenture and the payment of all amounts under or with respect to this
Indenture and the Securities.



ARTICLE 5.

SUCCESSOR CORPORATION




     SECTION 5.01. When the Company and the Guarantor May Merge or Transfer Assets.



          (a) The Company shall not consolidate with or merge into any other Person or convey, transfer
or lease its properties and assets substantially as an entirety to any Person, unless:





          (1) the Person (if other than the Company) formed by such consolidation or into which
the Company is merged or the Person which acquires by conveyance, transfer or lease the
properties and assets of the Company substantially as an entirety shall be a corporation,
limited liability company, partnership or trust organized and validly existing under the
laws of the United States or any State thereof or the District of Columbia, and shall
expressly assume by an indenture supplemental hereto, executed and delivered to the Trustee
in form reasonably satisfactory to the Trustee, the due and punctual payment of the
Principal Amount, interest, Change in Control Purchase Price, Additional Amounts, if any,
and overdue interest, if any, on the Securities, according to their tenor, and the due and
punctual performance of all of the covenants and obligations of the Company under the
Securities and this Indenture, and shall have provided for exchange rights in accordance
with this Indenture;




          (2) if, as a result of such transaction, the Securities become convertible or
exchangeable into common shares or other securities issued by a third party, such third
party has fully and unconditionally guaranteed the obligations of the Company or such
successor hereunder and under the Securities;




          (3) immediately after giving effect to such transaction, no Default or Event of Default
shall have occurred and be continuing; and




          (4) the Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or
lease and, if a supplemental indenture is required in connection with such transaction, such
supplemental indenture, comply with this Article 5 and that all conditions precedent herein
provided for relating to such transaction have been satisfied.



          (b) The Guarantor shall not consolidate with or merge into any other Person or convey,
transfer or lease its properties and assets substantially as an entirety to any Person unless:




27









 









          (1) the Person (if other than the Guarantor) formed by such consolidation or into which
the Guarantor is merged or the Person which acquires by conveyance or transfer, or which
leases, the properties and assets of the Guarantor substantially as an entirety shall
expressly assume, by an indenture supplemental hereto, executed and delivered to the
Trustee, in form reasonably satisfactory to the Trustee, the due and punctual payment of all
obligations in respect of the Guarantee and the performance of every covenant of this
Indenture on the part of the Guarantor to be performed or observed;




          (2) if, as a result of such transaction, the Securities become convertible or
exchangeable into Common Shares or other securities issued by a third party, such third
party has fully and unconditionally guaranteed the obligations of the Company or such
successor hereunder and under the Securities;




          (3) immediately after giving effect to such transaction, no Default or Event of Default
shall have occurred and be continuing; and




          (4) the Guarantor has delivered to the Trustee an Officers’ Certificate and an Opinion
of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and,
if a supplemental indenture is executed in connection with such transaction, such
supplemental indenture comply with this Article 5 and that all conditions precedent herein
provided for relating to such transaction have been complied with.



     SECTION 5.02. Successors Substituted.



     Upon any consolidation of the Company or Guarantor with, or merger of the Company or Guarantor
into, any other Person, or any conveyance, transfer or lease of the properties and assets of the
Company or the Guarantor substantially as an entirety in accordance with Section 5.01, the
successor Person formed by such consolidation or into which the Company or the Guarantor is merged
or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Company or the Guarantor, as the case may be, under
this Indenture with the same effect as if such successor Person had been named as the Company or
the Guarantor, as the case may be, herein, and thereafter, except in the case of a lease to another
Person, the predecessor Person shall be relieved of all obligations and covenants under this
Indenture and the Securities.



ARTICLE 6.

DEFAULTS AND REMEDIES




     SECTION 6.01. Events of Default.



     An “Event of Default” occurs if:




          (1) there is a default in the payment of the Principal Amount or a Change in Control
Purchase Price on any Security when the same becomes due and payable at its Stated Maturity,
upon declaration, when due for purchase by the Company or otherwise, and such default
continues for a period of ten days;



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          (2) there is a default in the payment of interest, Liquidated Damages, if any, or
Additional Amounts, if any, on any Security when it becomes due and payable, and such
default continues for a period of 30 days;




          (3) failure of the Company or the Guarantor to perform or comply with their obligation
to deliver cash, Common Shares or other property upon exchange of the Securities pursuant to
Article 11 hereof, and such failure continues for a period of 20 days;




          (4) the Company or the Guarantor fails to comply with any of its agreements or
covenants in the Securities or this Indenture (other than those referred to in clauses (1)
through (3) above) and such failure continues for 90 days after receipt by the Company of a
Notice of Default (as defined below);




          (5) a decree or order by a court having jurisdiction in the premises shall have been
entered adjudging the Company or the Guarantor a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization of the Company or the Guarantor under any
Bankruptcy Law, and such decree or order shall have continued undischarged and unstayed for
a period of 90 consecutive days; or a decree or order of a court having jurisdiction in the
premises of the appointment of a receiver or liquidator or trustee or assignee in bankruptcy
or insolvency of the Company or the Guarantor or of its property, or for the winding-up or
liquidation of its affairs, shall have been entered, and such decree or order shall have
remained in force undischarged and unstayed of a period of 90 consecutive days;




          (6) the Company or the Guarantor shall institute proceedings to be adjudicated a
voluntary bankrupt, or shall consent to the filing of a bankruptcy proceeding against it, or
shall file a petition or answer or consent seeking reorganization under any Bankruptcy Law,
or shall consent to the filing of any such petition, or shall consent to the appointment of
a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of it or of its
property or shall make an assignment for the benefit of creditors, or shall admit in writing
its inability to pay its debts generally as they become due; or




          (7) the Guarantee ceases to be in full force and effect or becomes unenforceable or
invalid or is declared null and void (other than in accordance with the terms of the
Guarantee) or the Guarantor denies or disaffirms its obligations under the Guarantee.



     A Default under clause (4) above is not an Event of Default until the Trustee notifies the
Company, or the Holders of at least 25% in aggregate Principal Amount of the Securities at the time
outstanding notify the Company and the Trustee, of the Default and neither the Company nor the
Guarantor cures such Default (and such Default is not waived) within the time specified in clause
(4) above after actual receipt of such notice (a “Notice of Default”). Any such notice must
specify the Default, demand that it be remedied and state that such notice is a Notice of Default.



29









 





     SECTION 6.02. Acceleration.



     If an Event of Default (other than an Event of Default specified in Section 6.01(5) or (6)
hereof) occurs and is continuing, the Trustee by notice to the Company, or the Holders of at least
25% in aggregate Principal Amount of the Securities at the time outstanding by notice to the
Company and the Trustee, may declare the Principal Amount, interest and Additional Amounts, if any,
accrued and unpaid to the date of declaration on all the Securities to be immediately due and
payable. Upon such a declaration, such Principal Amount, interest and Additional Amounts, if any,
shall become and be due and payable immediately. If an Event of Default specified in Section
6.01(5) or (6) hereof occurs and is continuing, the Principal Amount, interest and Additional
Amounts, if any, accrued and unpaid to the date of such occurrence on all the Securities shall
become and be immediately due and payable without any declaration or other act on the part of the
Trustee or any Holders. The Holders of a majority in aggregate Principal Amount of the Securities
at the time outstanding, by notice to the Company and the Trustee (and without notice to any other
Holder), may rescind an acceleration and its consequences if the rescission would not conflict with
any judgment or decree and if all existing Events of Default have been cured or waived except
nonpayment of the Principal Amount that has become due solely as a result of acceleration and if
all amounts due to the Trustee under Section 7.07 hereof have been paid. No such rescission shall
affect any subsequent or other Default or Event of Default or impair any consequent right.



     SECTION 6.03. Other Remedies.



     If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy
to collect the payment of all amounts due on the Securities or to enforce the performance of any
provision of the Securities or this Indenture.



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



     SECTION 6.04. Waiver of Past Defaults.



     The Holders of a majority in aggregate Principal Amount of the Securities at the time
outstanding, by notice to the Company and the Trustee (and without notice to any other Holder), may
waive an existing Default or Event of Default and its consequences except (1) an Event of Default
described in Section 6.01(1) or (2) hereof, (2) a Default in respect of a provision that under
Section 9.02 hereof cannot be amended without the consent of each Holder affected or (3) a Default
that constitutes a failure to exchange any Security in accordance with the terms of Article 11
hereof. When a Default or Event of Default is waived, it is deemed cured, but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any consequent right.



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     SECTION 6.05. Control by Majority.



     The Holders of a majority in aggregate Principal Amount of the Securities at the time
outstanding may direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or of exercising any trust or power conferred on the Trustee. However,
the Trustee may refuse to follow any direction that conflicts with any law or this Indenture or
that the Trustee determines in good faith is unduly prejudicial to the rights of other Holders or
would involve the Trustee in personal liability unless the Trustee is offered indemnity reasonably
satisfactory to it.



     SECTION 6.06. Limitation on Suits.



     A Holder may not pursue any remedy with respect to this Indenture or the Securities unless:




          (1) the Holder gives to the Company and the Trustee written notice stating that an
Event of Default is continuing;




          (2) the Holders of at least 25% in aggregate Principal Amount of the Securities at the
time outstanding make a written request to the Trustee to pursue the remedy;




          (3) such Holder or Holders offer to the Trustee reasonable security or indemnity
against any loss, liability or expense satisfactory to the Trustee;




          (4) the Trustee does not comply with the request within 60 days after receipt of the
notice, the request and the offer of security or indemnity; and




          (5) the Holders of a majority in aggregate Principal Amount of the Securities at the
time outstanding do not give the Trustee a direction inconsistent with the request during
such 60 day period.



     A Holder may not use this Indenture to prejudice the rights of any other Holder or to obtain a
preference or priority over any other Holder.



     SECTION 6.07. Rights of Holders to Receive Payment.



     Notwithstanding any other provision of this Indenture, the right of any Holder to receive
payment of the Principal Amount, interest, Change in Control Purchase Price and Additional Amounts,
if any, in respect of the Securities held by such Holder, on or after the respective due dates
expressed in the Securities, to exchange the Securities in accordance with Article 11, or to bring
suit for the enforcement of any such payment on or after such respective dates or the right to
exchange the Securities in accordance with Article 11, shall not be impaired or affected adversely
without the consent of each such Holder.



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     SECTION 6.08. Collection Suit by Trustee.



     If an Event of Default described in Section 6.01(1) or (2) hereof occurs and is continuing,
the Trustee may recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount owing with respect to the Securities and the amounts provided for in
Section 7.07 hereof.



     SECTION 6.09. Trustee May File Proofs of Claim.



     In case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the
Company, the Guarantor or any other obligor upon the Securities or the property of the Company, of
the Guarantor or of such other obligor or their creditors, the Trustee (irrespective of whether the
Principal Amount, interest, Change in Control Purchase Price or Additional Amounts, if any, in
respect of the Securities shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on the Company or the
Guarantor for the payment of any such amount) shall be entitled and empowered, by intervention in
such proceeding or otherwise:




          (1) to file and prove a claim for the whole amount of the Principal Amount, interest,
Change in Control Purchase Price or Additional Amounts, if any, and to file such other
papers or documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel) and of the Holders allowed in such judicial
proceeding, and




          (2) to collect and receive any money or other property payable or deliverable on any
such claims and to distribute the same;


and any custodian, receiver, assignee, trustee, liquidator, sequestrator or similar official in any
such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments directly to the
Holders, to pay the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.07 hereof.




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



     SECTION 6.10. Priorities.



     If the Trustee collects any money pursuant to this Article 6, it shall pay out the money in
the following order:



     FIRST: to the Trustee for amounts due under Section 7.07 hereof;



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     SECOND: to Holders for amounts due and unpaid on the Securities for the Principal Amount,
interest, Change in Control Purchase Price, or Additional Amounts, if any, as the case may be,
ratably, without preference or priority of any kind, according to such amounts due and payable on
the Securities; and



     THIRD: the balance, if any, to the Company.



     The Trustee may fix a proposed record date and payment date for any payment to Holders
pursuant to this Section 6.10 and shall notify the Company in writing with respect to such proposed
record date and payment date. At least 15 days before such record date, the Company (or the
Trustee at the request of the Company) shall mail to each Holder and the Trustee a notice that
states the record date, the payment date and amount to be paid.



     SECTION 6.11. Undertaking for Costs.



     In any suit for the enforcement of any right or remedy under this Indenture or in any suit
against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant (other than the Trustee) in the suit of an undertaking to
pay the costs of the suit, and the court in its discretion may assess reasonable costs, including
reasonable attorneys’ fees and expenses, against any party litigant in the suit, having due regard
to the merits and good faith of the claims or defenses made by the party litigant. This Section
6.11 does not apply to a suit by the Trustee, any suit by a Holder for the enforcement of the
payment of the Principal Amount, interest, Change in Control Purchase Price, or Additional
Amounts, if any, or overdue interest, if any, on or after the due date expressed in such Security
or to any suit for the enforcement of the right to exchange the Security pursuant to Article 11, or
a suit by Holders of more than 10% in aggregate Principal Amount of the Securities at the time
outstanding.



     SECTION 6.12. Waiver of Stay, Extension or Usury Laws.



     The Company covenants (to the extent that it may lawfully do so) that it will not at any time
insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any
stay or extension law or any usury or other law wherever enacted, now or at any time hereafter in
force, which would prohibit or forgive the Company from paying all or any portion of the Principal
Amount, interest, Change in Control Purchase Price or Additional Amounts, if any, on any such
amounts, as contemplated herein, or which may affect the covenants or the performance of this
Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such laws and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.



ARTICLE 7.

TRUSTEE




     SECTION 7.01. Duties of Trustee.



          (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise the
rights and powers vested in it by this Indenture and use the same degree of care and

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skill in its exercise as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.




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





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




          (2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the requirements of this
Indenture. However, in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the Trustee shall examine
the certificates and opinions to determine whether or not they conform to the requirements
of this Indenture.


This Section 7.01(b) shall be in lieu of Section 315(a) of the TIA and such Section 315(a) is
hereby expressly excluded from this Indenture, as permitted by the TIA.




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





          (1) this paragraph (c) does not limit the effect of paragraph (b) of this Section 7.01;




          (2) the Trustee shall not be liable for any error of judgment made in good faith by a
Trust Officer unless it is proved that the Trustee was negligent in ascertaining the
pertinent facts; and




          (3) the Trustee shall not be liable with respect to any action it takes or omits to
take in good faith in accordance with a direction received by it pursuant to Section 6.05
hereof.


Subparagraphs (c)(1),(2) and (3) shall be in lieu of Sections 315(d)(1), 315(d)(2) and 315(d)(3) of
the TIA and such Sections 315(d)(1), 315(d)(2) and 315(d)(3) are hereby expressly excluded from
this Indenture, as permitted by the TIA.




          (d) Every provision of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), (c) and (e) of this Section 7.01.




          (e) The Trustee may refuse to perform any duty or exercise any right or power or extend or
risk its own funds or otherwise incur any financial liability unless it receives indemnity
reasonably satisfactory to it against any loss, liability or expense.




          (f) Money held by the Trustee in trust hereunder need not be segregated from other funds
except to the extent required by law.




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     SECTION 7.02. Rights of Trustee.



     Subject to Section 7.01:



          (a) The Trustee may conclusively rely on any document reasonably believed by it to be genuine
and to have been signed or presented by the proper Person. The Trustee need not investigate any
fact or matter stated in the document.




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




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




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




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




          (f) The Trustee shall be under no obligation to exercise any of the rights or powers vested in
it by this Indenture, unless the Holders shall have offered to the Trustee reasonable security or
indemnity reasonably satisfactory to it against the costs, expenses and liabilities which may be
incurred therein or thereby.




          (g) The Trustee shall not be bound to make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document,
but the Trustee, in its discretion, may make such further inquiry or investigation into facts or
matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises of the Company and
the Guarantor during normal business hours at reasonable frequencies, personally or by agent or
attorney at the sole cost of the Company and the Guarantor and shall incur no liability or
additional liability of any kind by reason of such inquiry or investigation.




          (h) The Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys and the Trustee shall not be
responsible for any negligent act on the part of any agent or attorney appointed with due care by
it hereunder.




          (i) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a
Trust Officer of the Trustee has actual knowledge thereof or unless written notice of any event
which is in fact such a default is received by the Trustee at the Corporate

35









 








Trust Office of the Trustee in accordance with Section 13.02 hereof, and such notice
references the Securities and this Indenture. In the absence of such notice, the Trustee may
conclusively assume that no such Default or Event of Default exists.




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




          (k) The Trustee shall be under no obligation to expend or risk its own funds or to exercise,
at the request or direction of any of the Holders, any of the rights or powers vested in it by this
Indenture pursuant to this Indenture.




          (l) The Trustee is not required to give any bond or surety with respect to the performance of
its duties or the exercise of its powers under this Indenture.




          (m) In the event the Trustee receives inconsistent or conflicting requests or indemnity from
two or more groups of Holders of Securities, each representing less than a majority in principal
amount of the Securities Outstanding, the Trustee, in its sole discretion, may determine what
action, if any, shall be taken.




          (n) The Trustee’s immunities and protections from liability and its right to indemnification
in connection with the performance of its duties under this Indenture shall extend to the Trustee’s
officers, directors, agents, attorneys and employees. Such immunities and protections, together
with the Trustee’s right to compensation, shall survive the Trustee’s resignation or removal, the
discharge of this Indenture and the final payment of the Securities.




          (o) The permissive right of the Trustee to take the actions permitted by this Indenture shall
not be construed as an obligation or duty to do so.




          (p) Except for information provided by the Trustee concerning the Trustee, the Trustee shall
have no responsibility for any information in any offering memorandum or other disclosure material
distributed with respect to the Securities, and the Trustee shall have no responsibility for
compliance with any state or federal securities in connection with the Securities.




     SECTION 7.03. Individual Rights of Trustee.



     The Trustee in its commercial banking or any other capacity may become the owner or pledgee of
Securities and may otherwise deal with the Company, the Guarantor or their Affiliates with the same
rights it would have if it were not Trustee. Any Paying Agent, Registrar, Exchange Agent or
co-registrar may do the same with the like rights. However, the Trustee must comply with Sections
7.10 and 7.11 hereof.



     SECTION 7.04. Trustee’s Disclaimer.



     The Trustee makes no representation as to the validity or adequacy of this Indenture or the
Securities; it shall not be accountable for the Company’s use of the proceeds from the



36









 




Securities; and it shall not be responsible for any statement in the offering memorandum for
the Securities or in this Indenture or the Securities (other than its certificate of
authentication), the acts of a prior Trustee hereunder, or the determination as to which beneficial
owners are entitled to receive any notices hereunder.




     SECTION 7.05. Notice of Defaults.



     If a Default occurs and is continuing and if it is actually known by a Trust Officer or if
written notice of any event which is in fact such a default is received by the Trustee at the
Corporate Trust Office of the Trustee in accordance with Section 13.02 hereof, and such notice
references the Securities and this Indenture, the Trustee shall give to each Holder notice of the
Default within 90 days after it is actually known to a Trust Officer. Except in the case of a
Default described in Section 6.01(1) or (2) hereof, the Trustee may withhold the notice if and so
long as a committee of its Trust Officers in good faith determines that withholding the notice is
in the interests of Holders. The second sentence of this Section 7.05 shall be in lieu of the
proviso to Section 315(b) of the TIA and such provision is hereby expressly excluded from this
Indenture, as permitted by the TIA. The Trustee shall not give notice of a Default pursuant to
Section 6.01(4) until at least 90 days have passed since its occurrence.



     SECTION 7.06. Reports by Trustee to Holders.



     Within 60 days after each May 1, beginning with the May 1 following the date of this
Indenture, the Trustee shall mail to each Holder a brief report dated as of such May 1 that
complies with TIA Section 313(a), if required by such Section 313(a). The Trustee also shall
comply with TIA Section 313(b).



     A copy of each report at the time of its mailing to Holders shall be filed with the SEC and
each securities exchange on which the Securities are listed. The Company agrees to promptly notify
the Trustee whenever the Securities become listed on any securities exchange and of any delisting
thereof.



     SECTION 7.07. Compensation and Indemnity.



     The Company agrees:



          (a) to pay to the Trustee from time to time such compensation as the Company and the Trustee
shall from time to time agree in writing for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);




          (b) to reimburse the Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision of this Indenture
(including the compensation and the expense, advances and disbursements of its outside agents and
counsel), except any such expense, disbursement or advance as may be attributable to its negligence
or bad faith; and




          (c) to indemnify the Trustee for, and to hold it harmless against, any and all loss, damage,
claims, liability or expense (including taxes other than taxes based upon, measured

37









 








by, or determined by the income of the Trustee) incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or administration of this trust,
including the costs and expenses of defending itself against any claim (whether asserted by the
Company, any Holder or any other Person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder.




     To secure the Company’s payment obligations in this Section 7.07, the Trustee shall have a
lien prior to the Securities on all money or property held or collected by the Trustee, except that
held in trust to pay the Principal Amount, interest, Change in Control Purchase Price, Additional
Amounts, if any, or overdue interest, if any, as the case may be, on particular Securities.



     The Company’s payment obligations pursuant to this Section 7.07 shall survive the discharge of
this Indenture. When the Trustee incurs expenses after the occurrence of a Default specified in
Section 6.01(5) or (6), the expenses are intended to constitute expenses of administration under
any Bankruptcy Law.



     SECTION 7.08. Replacement of Trustee.



     The Trustee may resign by so notifying the Company; provided, however, that no such
resignation shall be effective until a successor Trustee has accepted its appointment pursuant to
this Section 7.08. The Holders of a majority in aggregate Principal Amount of the Securities at
the time outstanding may remove the Trustee by so notifying the Trustee and may appoint a successor
Trustee. The Company shall remove the Trustee if:




          (1) the Trustee fails to comply with, or ceases to be eligible under, Section 7.10
hereof;




          (2) the Trustee is adjudged bankrupt or insolvent;




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




          (4) the Trustee otherwise in the Company’s reasonable judgment becomes incapable of
acting.



     If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any
reason, the Company shall promptly appoint, by resolution of its Board of Directors, a successor
Trustee.



     Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee; but, on the request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring
Trustee and shall duly assign, transfer and deliver to such successor Trustee all property



38









 




and money held by such retiring Trustee hereunder, subject to the lien provided for in Section
7.07 hereof. Upon request of any such successor Trustee, the Company shall execute any and all
instruments for more fully and certainly vesting in and confirming to such successor Trustee all
such rights, powers and trusts. No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be eligible under this Article.




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



     If the Trustee fails to comply with Section 7.10 hereof, any Holder may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.



     SECTION 7.09. Successor Trustee by Merger.



     If the Trustee consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business (including the trust created by this Indenture) or assets to,
another corporation, bank, banking association or trust company, the resulting, surviving or
transferee corporation bank, banking association or trust company, without any further act shall be
the successor Trustee hereunder, provided such corporation shall be otherwise eligible under this
Article, without the execution or filing of any paper or any further act on the part of any of the
parties hereto. As soon as practicable, the successor Trustee shall give written notice of its
succession to the Company. In case any Securities shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to
such authenticating Trustee may adopt such authentication and deliver the Securities so
authenticated with the same effect as if such successor Trustee had itself authenticated such
Securities.



     SECTION 7.10. Eligibility; Disqualification.



     The Trustee shall at all times satisfy the requirements of TIA Sections 310(a)(1) and 310(b).
The Trustee shall have a combined capital and surplus of at least $50,000,000 (or if the Trustee is
a member of a bank holding company system, its bank holding company shall have a combined capital
and surplus of at least $50,000,000) as set forth in its most recent published annual report of
conditions. Nothing herein contained shall prevent the Trustee from filing with the SEC the
application referred to in the penultimate paragraph of TIA Section 310(b). If at any time the
Trustee shall cease to be eligible in accordance with the provisions of this Section 7.10, it shall
correct such ineligibility or resign immediately in the manner and with the effect specified in
this Article 7.



     SECTION 7.11. Preferential Collection of Claims Against Company.



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




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ARTICLE 8.

DISCHARGE OF INDENTURE




     SECTION 8.01. Discharge of Liability on Securities.



     When (i) the Company delivers to the Trustee all outstanding Securities (other than Securities
replaced pursuant to Section 2.07 hereof) for cancellation or (ii) all outstanding Securities have
become due and payable and the Company deposits with the Trustee cash and/or securities, as
permitted by the terms hereof, sufficient to pay at Stated Maturity the Principal Amount of all
outstanding Securities (other than Securities replaced pursuant to Section 2.07 hereof), and if in
either case the Company pays all other sums payable hereunder by the Company, then this Indenture
shall, subject to Section 7.07 hereof, cease to be of further effect. The Trustee shall join in
the execution of a document prepared by the Company acknowledging satisfaction and discharge of
this Indenture on demand of the Company accompanied by an Officers’ Certificate and Opinion of
Counsel and at the cost and expense of the Company.



     SECTION 8.02. Repayment to the Company.



     The Trustee and the Paying Agent shall return to the Company upon written request any money or
securities held by them for the payment of any amount with respect to the Securities that remains
unclaimed for six months; provided, however, that the Trustee or such Paying Agent, before being
required to make any such return, shall, in the event that the Securities are no longer held in
global form, at the expense of the Company cause to be published once in a newspaper of general
circulation in The City of New York or mail to each such Holder notice that such money or
securities remains unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such publication or mailing, any unclaimed money or securities then
remaining will be returned to the Company. After return to the Company, Holders entitled to the
money or securities must look to the Company for payment as general creditors unless an applicable
abandoned property law designates another Person. In the absence of a written request from the
Company to return unclaimed funds to the Company, the Trustee shall from time to time deliver all
unclaimed funds to or as directed by applicable escheat authorities, as determined by the Trustee
in its sole discretion, in accordance with the customary practices and procedures of the Trustee.
Any unclaimed funds held by the Trustee pursuant to this section shall be held uninvested and
without any liability for interest.



ARTICLE 9.

AMENDMENTS




     SECTION 9.01. Without Consent of Holders.



     The Company, the Guarantor and the Trustee may amend this Indenture and the Securities without
the consent of any Holder:




          (1) to cure any ambiguity or to correct or supplement any provision contained herein or
in any supplemental indenture which may be defective or inconsistent with any other
provision contained herein or in any supplemental indenture, provided
that, in any case, such change shall not materially adversely affect the interests of
the Holders;



40









 






          (2) to provide for the assumption of the Company’s or the Guarantor’s obligations to
the Holders of the Securities in case of a merger or consolidation or conveyance, transfer
or lease of the Company’s or the Guarantor’s properties and assets substantially as an
entirety;




          (3) to provide for uncertificated Securities in addition to or in place of certificated
Securities so long as such uncertificated Securities are in registered form for purposes of
the Internal Revenue Code of 1986, as amended;




          (4) to make any change that does not adversely affect the right of any Holder; or




          (5) to make any change to comply with the TIA, or any amendment thereto, or to comply
with any requirement of the SEC in connection with the qualification, if any, of this
Indenture under the TIA.



     SECTION 9.02. With Consent of Holders.



     The Company, the Guarantor and the Trustee, with the written consent of the Holders of at
least a majority in aggregate Principal Amount of the Securities at the time outstanding, may amend
this Indenture or the Securities. However, without the consent of each Holder affected, an
amendment to this Indenture or the Securities may not:




          (1) make any change to the Principal Amount of Securities whose Holders must consent to
an amendment;




          (2) make any change to the manner or rate of accrual in connection with interest,
Additional Amounts, if any, or overdue interest, if any, reduce the rate of overdue interest
referred to in paragraph 1 of the Securities or extend the time for payment of interest,
Additional Amounts, if any, or overdue interest, if any, on any Security;




          (3) reduce the Principal Amount of or extend the Stated Maturity of any Security;




          (4) reduce the Change in Control Purchase Price of any Security;




          (5) make any Security payable in money or securities other than that stated in the
Security;




          (6) [intentionally omitted];




          (7) make any change in Section 6.04 or 6.07 hereof or this Section 9.02, except to
increase the percentage of Holders referenced in Section 6.04 or 6.07 hereof or this Section
9.02, as applicable;




          (8) make any change that adversely affects the right of Holders to exchange any
Security pursuant to Article 11; or



41









 






          (9) make any change that adversely affects the right of Holders to require the Company
to purchase the Securities upon a Change in Control, in accordance with the terms thereof
and this Indenture.



     It shall not be necessary for the consent of the Holders under this Section 9.02 to approve
the particular form of any proposed amendment, but it shall be sufficient if such consent approves
the substance thereof.



     After an amendment under this Section 9.02 becomes effective, the Company shall mail to each
Holder a notice briefly describing the amendment.



     SECTION 9.03. Compliance with Trust Indenture Act.



     Every supplemental indenture executed pursuant to this Article 9 shall comply with the TIA as
then in effect, if then required to so comply.



     SECTION 9.04. Revocation and Effect of Consents, Waivers and Actions.



     Until an amendment, waiver or other action becomes effective, a consent to it or any other
action by a Holder of a Security is a continuing consent by the Holder and every subsequent Holder
of that Security or portion of the Security that evidences the same obligation as the consenting
Holder’s Security, even if notation of the consent, waiver or action is not made on the Security.
However, any such Holder or subsequent Holder may revoke the consent, waiver or action as to such
Holder’s Security or portion of the Security if the Trustee receives the notice of revocation
before the date the amendment, waiver or action becomes effective. After an amendment, waiver or
action becomes effective, it shall bind every Holder.



     SECTION 9.05. Notation on or Exchange of Securities.



     Securities authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article 9 may, and shall if required by the Trustee, bear a notation in form
approved by the Trustee as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Securities so modified as to conform, in the opinion of the Trustee
and the Board of Directors of the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in exchange for outstanding
Securities.



     SECTION 9.06. Trustee to Sign Supplemental Indentures.



     The Trustee shall sign any supplemental indenture authorized pursuant to this Article 9 if the
amendment does not adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may, but need not, sign such supplemental indenture. In signing such
amendment the Trustee shall be entitled to receive, and (subject to the provisions of Section 7.01
hereof) shall be fully protected in relying upon, an Officers’ Certificate of the
Company and an Opinion of Counsel stating that such amendment is authorized or permitted by
this Indenture.



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     SECTION 9.07. Effect of Supplemental Indentures.



     Upon the execution of any supplemental indenture under this Article 9, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated
and delivered hereunder shall be bound thereby.



ARTICLE 10.

GUARANTEE OF SECURITIES




     SECTION 10.01. Unconditional Guarantee.



          (a) For value received, the Guarantor hereby fully, irrevocably, unconditionally and
absolutely guarantees to the Holders and to the Trustee the due and punctual payment of the
principal of, interest, and Additional Amounts, if any, on the Securities and all other amounts due
and payable under this Indenture and the Securities by the Company (including, without limitation,
all costs and expenses (including reasonable legal fees and disbursements) incurred by the Trustee
or the Holders in connection with the enforcement of this Indenture, the Securities and the
Guarantee) (collectively, the “Indenture Obligations”), when and as such principal, interest,
Additional Amounts, if any, and such other amounts shall become due and payable, whether at the
Stated Maturity, upon purchase or by declaration of acceleration or otherwise, according to the
terms of the Securities and this Indenture. The guarantee by the Guarantor set forth in this
Article 10 is referred to herein as the “Guarantee.” Without limiting the generality of the
foregoing, the Guarantor’s liability shall extend to all amounts that constitute part of the
Indenture Obligations and would be owed by the Company under this Indenture and the Securities but
for the fact that they are unenforceable, reduced, limited, impaired, suspended or not allowable
due to the existence of a bankruptcy, reorganization or similar proceeding involving the Company.



          (b) Failing payment when due of any amount guaranteed pursuant to the Guarantee, for whatever
reason, the Guarantor will be obligated to pay the same immediately to the Trustee, without set-off
or counterclaim or other reduction whatsoever (whether for taxes, withholding or otherwise). The
Guarantee is intended to be a general, unsecured, senior obligation of the Guarantor and will rank
pari passu in right of payment with all indebtedness of the Guarantor that is not, by its terms,
expressly subordinated in right of payment to the Guarantee. The Guarantor hereby agrees that its
obligations hereunder shall be full, irrevocable, unconditional and absolute, irrespective of the
validity, regularity or enforceability of the obligations and liabilities of any other obligor with
respect to the Securities, the Guarantee or this Indenture, the absence of any action to enforce
the same, any waiver or consent by any Holder with respect to any provisions hereof or thereof with
respect to the same, the recovery of any judgment against the Company, or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of the Guarantor.



     The Guarantor hereby agrees that in the event of a default in payment of the principal of,
interest, or Additional Amounts, if any, on the Securities or any other amounts payable under this
Indenture and the Securities by the Company, whether at the Stated Maturity, upon purchase or by
declaration of acceleration or otherwise, legal proceedings may be instituted by the Trustee



43









 




on behalf of the Holders or, subject to Section 6.06, by the Holders, on the terms and conditions set
forth in this Indenture, directly against the Guarantor to enforce the Guarantee without first
proceeding against the Company.




          (c) To the fullest extent permitted by applicable law, the obligations of the Guarantor under
this Article 10 shall be as aforesaid full, irrevocable, unconditional and absolute and shall not
be impaired, modified, discharged, released or limited by any occurrence or condition whatsoever,
including, without limitation, (i) any compromise, settlement, release, waiver, renewal, extension,
indulgence or modification of, or any change in, any of the obligations and liabilities of any
other obligor with respect to the Securities contained in any of the Securities or this Indenture,
(ii) any impairment, modification, release or limitation of the liability of the Company, the
Guarantor or any of their respective estates in bankruptcy, or any remedy for the enforcement
thereof, resulting from the operation of any present or future provision of any applicable
Bankruptcy Law, as amended, or other statute or from the decision of any court, (iii) the assertion
or exercise by the Company, the Guarantor or the Trustee of any rights or remedies under any of the
Securities or this Indenture or its delay in or failure to assert or exercise any such rights or
remedies, (iv) the assignment or the purported assignment of any property as security for any of
the Securities, including all or any part of the rights of the Company or the Guarantor under this
Indenture, (v) the extension of the time for payment by the Company or the Guarantor of any
payments or other sums or any part thereof owing or payable under any of the terms and provisions
of any of the Securities or this Indenture or of the time for performance by the Company or the
Guarantor of any other obligations under or arising out of any such terms and provisions or the
extension or the renewal of any thereof, (vi) the modification or amendment (whether material or
otherwise) of any duty, agreement or obligation set forth in this Indenture of any other obligor
with respect to the Securities, (vii) the voluntary or involuntary liquidation, dissolution, sale
or other disposition of all or substantially all of the assets, marshaling of assets and
liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of, or other similar proceeding affecting,
either the Company or the Guarantor or any of their respective assets, or the disaffirmance of any
of the Securities, the Guarantee or this Indenture in any such proceeding, (viii) the release or
discharge of the Company or the Guarantor from the performance or observance of any agreement,
covenant, term or condition contained in any of such instruments by operation of law, (ix) the
unenforceability of any of the obligations of any of the other obligors under the Securities, the
Guarantee or this Indenture, (x) any change in the name, business, capital structure, corporate
existence, or ownership of the Company or the Guarantor, or (xi) any other circumstance which might
otherwise constitute a defense available to, or a legal or equitable discharge of, a surety or the
Guarantor.



          (d) The Guarantor hereby (i) waives diligence, presentment, demand of payment, notice of
acceptance, filing of claims with a court in the event of the merger, insolvency or bankruptcy of
the Company or the Guarantor, and all demands and notices whatsoever, (ii) acknowledges that any
agreement, instrument or document evidencing the Guarantee may be transferred and that the benefit
of its obligations hereunder shall extend to
each holder of any agreement, instrument or document evidencing the Guarantee without notice
to them and (iii) covenants that its Guarantee will not be discharged except by complete
performance of the Guarantee or of the obligations guaranteed thereby. The Guarantor further
agrees that if at any time all or any part of any payment theretofore applied by any Person to the



44









 




Guarantee is, or must be, rescinded or returned for any reason whatsoever, including, without
limitation, the insolvency, bankruptcy or reorganization of the Guarantor, the Guarantee shall, to
the extent that such payment is or must be rescinded or returned, be deemed to have continued in
existence notwithstanding such application, and the Guarantee shall continue to be effective or be
reinstated, as the case may be, as though such application had not been made.




          (e) The Guarantor shall be subrogated to all rights of the Holders and the Trustee against the
Company in respect of any amounts paid by the Guarantor pursuant to the provisions of this
Indenture; provided, however, that the Guarantor shall not be entitled to enforce or to receive any
payments arising out of, or based upon, such right of subrogation with respect to any of the
Securities until all of the Securities and the Guarantee thereof shall have been paid in full or
discharged.



          (f) A director, officer, employee or stockholder, as such, of the Guarantor shall not have any
liability for any obligations of the Guarantor under this Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation.



          (g) No failure to exercise and no delay in exercising, on the part of the Trustee or the
Holders, any right, power, privilege or remedy under this Article 10 and the Guarantee shall
operate as a waiver thereof, nor shall any single or partial exercise of any rights, power,
privilege or remedy preclude any other or further exercise thereof, or the exercise of any other
rights, powers, privileges or remedies. The rights and remedies herein provided for are cumulative
and not exclusive of any rights or remedies provided in law or equity. Nothing contained in this
Article 10 shall limit the right of the Trustee or the Holders to take any action to accelerate the
maturity of the Securities pursuant to Article 6 or to pursue any rights or remedies hereunder or
under applicable law.



     SECTION 10.02. Execution and Delivery of Notation of Guarantee.



     To further evidence the Guarantee, the Guarantor hereby agrees that on the date of this
Indenture a notation of the Guarantee may be endorsed on each Security authenticated and delivered
by the Trustee and executed by either manual or facsimile signature of an Officer of the Guarantor.



     The Guarantor hereby agrees that the Guarantee shall remain in full force and effect
notwithstanding any failure to endorse on each Security a notation relating to the Guarantee
thereof.



     If an Officer of a Guarantor whose signature is on this Indenture or a Security no longer
holds that office, or if any other or additional Person shall have become a “Guarantor” hereunder
in accordance with Section 5.01 hereof, at the time the Trustee authenticates such Security or at
any time thereafter, the Guarantor’s Guarantee of such Security shall be valid nevertheless.



     The delivery of any Security by the Trustee, after the authentication thereof hereunder, shall
constitute due delivery of the Guarantee set forth in this Indenture on behalf of the Guarantor and
each other Person which may at such time constitute the “Guarantor” hereunder.



45









 





ARTICLE 11.

EXCHANGE




     SECTION 11.01. Exchange Privilege.



     A Holder of a Security may exchange, in accordance with this Article 11, such Security for
cash, and if applicable, Common Shares, in whole or in part, during the 30 calendar days ending at
the close of business on the Business Day immediately preceding the Stated Maturity (unless earlier
purchased), and prior thereto only upon the occurrence of one of the events set forth in this
Section 11.01. Upon such exchange, a Holder will be entitled to receive the consideration set
forth in this Article 11 based upon the exchange rate (the “Exchange Rate”) set forth in the next
sentence, subject to adjustment as herein set forth. The initial Exchange Rate is 21.8221 Common
Shares per $1,000 principal amount of Securities. The “Exchange Price” in effect at any time shall
be equal to $1,000 divided by the Exchange Rate.



     A Holder may exchange a portion of the Principal Amount of a Security if the portion is $1,000
or an integral multiple of $1,000. Provisions of this Indenture that apply to exchange of all of a
Security also apply to exchange of a portion of a Security.



     The Securities shall be exchangeable during the period specified above and pursuant hereto
only:



          (a) during any calendar quarter (and only during such calendar quarter) if the Sale Price of
the Common Shares for at least 20 Trading Days in the 30 consecutive Trading Day period ending on
the last Trading Day of the previous calendar quarter is greater than or equal to 130% of the
applicable Exchange Price on such last Trading Day;



          (b) the Guarantor distributes to all holders of its Common Shares (A) rights or warrants
entitling them (for a period expiring within 45 days after the record date for the determination of
the stockholders entitled to receive such distribution) to subscribe for or purchase Common Shares
at a price per share less than the Sale Price of the Common Shares on the Trading Day immediately
preceding the date such distribution is first publicly announced by the Guarantor, or (B) assets,
debt securities or rights to purchase its securities, where the value of such distribution per
Common Share, as determined by the Board of Directors of the Guarantor, exceeds 15% of the Sale
Price of the Common Shares on the Trading Day immediately preceding the declaration date of such
distribution, in either case, the Securities may be surrendered for exchange at any time on or
after the date that the Company gives notice of such distribution to the Holders, which shall be
not less than 20 Business Days prior to the Ex-Dividend Date for such distribution, until the
earlier of the close of business on the Business Day immediately preceding, but not including, the
Ex-Dividend Date or the date the Company publicly announces that such distribution will not take
place; provided that the Holder of a Security may not exchange such Security pursuant to this
provision if the Holder will otherwise participate in such distribution without exchange; or



          (c) the Guarantor proposes to engage in a transaction described in clause (ii) of the first
sentence of Section 11.13 hereof that is not a Change in Control, then the Securities may be
surrendered for exchange, at any time from and after the date 15 days prior to the



46









 




announced
anticipated effective date of the transaction and ending on and including the date five days after
the consummation of the transaction. The Guarantor’s Board of Directors shall determine the
anticipated effective date of any transaction described in clause (ii) of the first sentence of
Section 11.13 hereof and such determination shall be conclusive and binding on the Holders and
shall be publicly announced by the Guarantor and posted on its web site or notified to the Holders
by the Guarantor or, at the Guarantor’s request, the Trustee in the name and at the expense of the
Guarantor, in either case, not later than two Business Days prior to such 15th day; or




          (d) a Change in Control occurs, then the Securities may be surrendered for exchange at any
time during the period beginning on and including the date on which the Company issued the Change
in Control Purchase Notice pursuant to Section 3.01(b) hereof and ending on and including the
Change in Control Purchase Date for such Change in Control; or



          (e) during the five Business Day period immediately after any ten consecutive Trading Day
period in which the Trading Price per $1,000 Principal Amount of Securities, as determined
following a request by a Holder according to the procedures described below, for each day of such
ten Trading Day period was less than 95% of the product of the Sale Price of the Common Shares and
the Applicable Exchange Rate as of such Trading Day (the “95% Trading Exception”).



     The Company shall, within the first five Business Days of each calendar quarter, determine
whether the Securities shall be exchangeable during such calendar quarter as a result of the
occurrence of an event specified in clauses (a) – (d) above, and, if the Securities shall be so
exchangeable, the Company shall promptly deliver to the Trustee written notice thereof. Whenever
the Securities shall become exchangeable pursuant to this Section 11.01, the Company or, at the
Company’s request, the Trustee in the name and at the expense of the Company, shall notify the
Holders of the event triggering such exchangeability in the manner provided in Section 13.02.



     In connection with any exchange pursuant to the 95% Trading Exception specified in clause (e),
the Trustee shall not have any obligation to determine the Trading Price unless the Company has
requested such determination, and the Company shall have no obligation to make such request unless
a Holder provides the Company with reasonable evidence that the 95% Trading Exception will apply.
At such time, the Company shall instruct the Trustee to determine the Trading Price beginning on
the next Trading Day and on each successive Trading Day until the Trading Price per $1,000
Principal Amount of Securities is greater than or equal to 95% of the product of the Sale Price of
a Common Share and the Exchange Rate as of such Trading Day.



     SECTION 11.02. Exchange Procedure.



     To exchange a Security a Holder must satisfy the requirements in paragraph 7 of the
Securities. As soon as practicable following the date (the “Exchange Date”) on which the Holder
satisfies all such requirements, the Company shall deliver to the Holder, through the Exchange
Agent, in respect of each $1,000 principal amount of Securities being exchanged (all as
hereinafter provided): (i) the Required Cash Amount, (ii) certificate(s) for the number of
Remaining Shares issuable upon exchange, if any, and (iii) the amount of cash payable, if any, in



47









 




lieu of any fractional share. A Holder of Securities is not entitled to any rights of a holder of
Common Shares until such Holder has exchanged its Securities, and then only if Common Shares are
issuable upon such exchange. Upon exchange of a Security, such Holder shall no longer be a Holder
of such Security.




     No payment on the Securities or adjustment of the Exchange Rate will be made for dividends on
or other distributions with respect to any Common Shares except as provided in this Article 11. On
exchange of a Security, that portion of accrued and unpaid interest (except as provided below),
excluding Liquidated Damages and Additional Amounts, if any, to the Exchange Date with respect to
the exchanged Security shall be deemed to be paid in full and not canceled, extinguished and
forfeited, through delivery of the Required Cash Amount and the Remaining Shares (together with the
cash payment, if any, in lieu of fractional shares) in exchange for the Security being exchanged
pursuant to the provisions hereof.



     Notwithstanding the preceding paragraph, if the Exchange Date occurs after a Record Date but
on or prior to the corresponding Interest Payment Date, Holders of the Securities at the close of
business on the Record Date will receive any interest payable on such Securities on the
corresponding Interest Payment Date notwithstanding such exchange. Such Securities, upon surrender
for exchange, must be accompanied by funds equal to the amount of interest payable on the
Securities so exchanged; provided, however, that no such payment need be made (1) in connection
with any exchange following the Record Date immediately preceding the Final Interest Payment Date,
(2) if the Change in Control Purchase Date is during such period or (3) if any Defaulted Interest
exists at the time of exchange with respect to such Securities (to the extent of such Defaulted
Interest).



     If a Holder exchanges more than one Security at the same time, the delivery of the Required
Cash Amount and the Remaining Shares (together with the cash payment, if any, in lieu of fractional
shares) upon such exchange shall be based on the total Principal Amount of the Securities
exchanged.



     Upon surrender of a Security that is exchanged in part, the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder, a new Security in an authorized denomination
equal in Principal Amount to the unexchanged portion of the Security surrendered.



     If the last day on which a Security may be exchanged is a Legal Holiday in a place where an
Exchange Agent is located, the Security may be surrendered to that Exchange Agent on the next
succeeding day that it is not a Legal Holiday.



     SECTION 11.03. Fractional Shares.



     The Guarantor will not issue a fractional Common Share upon exchange of a Security. Instead
the Company will deliver cash for the current market value of the fractional share. The current
market value of a fractional share shall equal the arithmetic average of the Volume
Weighted Average Price of the Common Shares for each of the ten Trading Days of the Exchange
Reference Period, rounded to the nearest whole cent.



48









 





     SECTION 11.04. Taxes on Exchange.



     If a Holder exchanges a Security, the Company shall pay any documentary, stamp or similar
issue or transfer tax due on the issue of any Common Shares upon the exchange. However, the Holder
shall pay any such tax which is due because the Holder requests the shares to be issued in a name
other than the Holder’s name. The Exchange Agent may refuse to deliver the certificates
representing the Common Shares being issued in a name other than the Holder’s name until the
Exchange Agent receives a sum sufficient to pay any tax which will be due because the shares are to
be issued in a name other than the Holder’s name. Nothing herein shall preclude any tax
withholding required by law or regulations.



     SECTION 11.05. Payment Upon Exchange.



     Holders surrendering Securities for exchange will be entitled to receive, per $1,000 Principal
Amount of Securities being exchanged:



          (a) cash in an amount equal to the lesser of (1) $1,000 and (2) the Exchange Value (the
“Required Cash Amount”); and



          (b) if the Exchange Value is greater than $1,000, a number of Common Shares (the “Remaining
Shares”), equal to the sum of the Daily Share Amounts for each of the ten Trading Days in the
Exchange Reference Period.



     “Daily Share Amounts” means, for each Trading Day of the Exchange Reference Period and each
$1,000 Principal Amount of Securities surrendered for exchange, a number of Common Shares (but in
no event less than zero) determined by the following formula: ((Volume Weighted Average Price per
Common Share for such Trading Day x Exchange Rate in effect on such Trading Day) — $1,000) ÷
(Volume Weighted Average Price per Common Share for such Trading Day x 10).



     The “Exchange Reference Period” means (a) for Securities that are exchanged during the period
beginning on the 30th calendar day preceding the Stated Maturity and ending at the close
of business on the Business Day preceding the Stated Maturity, the ten consecutive Trading Days
beginning on the third Trading Day following the Stated Maturity and (b) in all other instances,
the ten consecutive Trading Days beginning on the third Trading Day following the Exchange Date.



     “Exchange Value” means the amount equal to the product of (a) the Applicable Exchange Rate
multiplied by (b) the average of the Volume Weighted Average Price per Common Share on each of the
ten Trading Days during the Exchange Reference Period.



     “Volume Weighted Average Price” per Common Share on any Trading Day means the volume weighted
average price on the NYSE for the period between 9:30 a.m. and 4:00 p.m. New York City Time, as
shown on Bloomberg (or any successor service) page NBR UN <EQUITY> VAP <GO>, or if such
page or its equivalent is not available, the (a) price of each
trade in Common Shares multiplied by the numbers of Common Shares in each such trade (b)
divided by the total Common Shares traded, in each case during such Trading Day between 9:30 a.m.
and 4:00 p.m., New York City Time, on the NYSE or if the Common Shares are not



49









 




traded on the NYSE,
the principal national securities exchange on which the Common Shares are listed, as determined by
a nationally recognized independent investment banking firm retained for this purpose by the
Company.




     SECTION 11.06. Adjustment for Change in Capital Stock.



     In case the Guarantor shall (i) pay a dividend, or make a distribution, in Common Shares, on
its Common Shares, (ii) subdivide its outstanding Common Shares into a greater number of shares, or
(iii) combine its outstanding Common Shares into a smaller number of shares, the Exchange Rate in
effect immediately prior thereto shall be adjusted so that the same shall equal the Exchange Rate
determined by multiplying the Exchange Rate in effect immediately prior to the occurrence of such
event by a fraction of which the numerator shall be the number of Common Shares outstanding
immediately after such event and the denominator shall be the number of Common Shares outstanding
immediately prior to such event. If any dividend or distribution of the type described in clause
(i) above is not so paid or made, the Exchange Rate shall again be adjusted to the Exchange Rate
which would then be in effect if such dividend as distribution had not been declared. An
adjustment made pursuant to this Section 11.06 shall become effective immediately after the record
date in the case of a dividend and shall become effective immediately after the effective date in
the case of a subdivision or combination.



     SECTION 11.07. Adjustment for Rights or Warrants.



     In case the Guarantor shall issue rights or warrants to all holders of its Common Shares
entitling them (for a period expiring within 45 days after the record date mentioned below) to
subscribe for or purchase Common Shares at a price per share less than the Market Price per Common
Share at the record date for the determination of shareholders entitled to receive such rights or
warrants, the Exchange Rate in effect immediately prior thereto shall be adjusted so that the same
shall equal the Exchange Rate determined by multiplying the Exchange Rate in effect immediately
prior to the date of issuance of such rights or warrants by a fraction of which the numerator shall
be the number of Common Shares outstanding on the date of issuance of such rights or warrants plus
the number of additional Common Shares offered to holders of Common Shares for subscription or
purchase, and of which the denominator shall be the number of Common Shares outstanding on the date
of issuance of such rights or warrants plus the number of Common Shares which the aggregate
offering price of the total number of shares so offered would purchase at such Market Price. 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 the shareholders entitled to receive such rights or warrants. To the extent
that Common Shares are not delivered after the expiration of such rights or warrants, the Exchange
Rate shall be readjusted to the Exchange Rate 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 Common Shares actually delivered. If such rights or warrants are not so issued, the
Exchange Rate shall again be adjusted to be the Exchange Rate 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
Common Shares at less than such Market Price of such Common Shares, and in determining the
aggregate offering price of such Common Shares, there shall be taken into account any



50









 




consideration
received by the Guarantor for such rights or warrants, the value of such consideration, if other
than cash, to be determined by the Guarantor’s Board of Directors.




     SECTION 11.08. Adjustment for Other Distributions.



          (a) In case the Guarantor shall distribute to all holders of its Common Shares (excluding any
distribution in connection with the liquidation, dissolution or winding up of the Guarantor,
whether voluntary or involuntary) any shares of any class of the Guarantor (other than Common
Shares), or evidences of indebtedness of the Guarantor or of assets (other than cash and other than
rights or warrants to subscribe for or purchase any of its securities referred to in Section 11.07
hereof) (any of the foregoing hereinafter in this Section 11.08(a) called the “Distributed
Securities”), then, the Exchange Rate shall be adjusted so that the same shall equal the Exchange
Rate determined by multiplying the Exchange Rate in effect immediately prior to the date of such
distribution by a fraction of which the numerator shall be the Market Price per Common Share on the
record date mentioned below, and the denominator shall be the Market Price per Common Share on such
record date less the fair market value on such record date (as determined by the Guarantor’s Board
of Directors, whose determination shall be conclusive, and described in an Officer’s Certificate
filed with the Trustee) of the Distributed Securities so distributed applicable to one Common
Share. Such adjustment shall become effective immediately after the record date for the
determination of shareholders entitled to receive such distribution. Notwithstanding the
foregoing, in the event that the then fair market value (as so determined) of the portion of the
Distributed Securities so distributed applicable to one Common Share is equal to or greater than
the Market Price of the Common Shares on the record date, in lieu of the foregoing adjustment, upon
exchange of any Securities thereafter the provisions of Section 11.13 shall apply to such exchange
mutatis mutandis; provided that for such application, any references in such provisions to the
“Exchange Property” shall be deemed references to a unit composed of (a) the number of Common
Shares equal to the Exchange Rate immediately prior to the relevant distribution and (b) the amount
of Distributed Securities such Holder would have received had such Holder held a number of Common
Shares equal to the Exchange Rate immediately prior to the relevant distribution. In the event
that such distribution is not so paid or made, the Exchange Rate shall again be adjusted to the
Exchange Rate which would then be in effect if such distribution had not been declared. If the
Guarantor’s Board of Directors determines the fair market value of any distribution for purposes of
this Section 11.08(a) by reference to the actual or when issued trading market for any securities,
it must in doing so consider the prices in such market over the same period used in computing the
Market Price of the Common Shares.



          (b) Notwithstanding the foregoing, in the event any such distribution consists of shares of
capital stock of, or similar equity interests in, one or more of the Guarantor’s Subsidiaries (a
“Spin-Off”), the Exchange Rate shall be increased so that the same shall be equal to the rate
determined by multiplying the Exchange Rate in effect immediately prior to the close of business on
the record date with respect to such distribution by a fraction the numerator of which shall be the
Market Price of the Common Shares, plus the Fair Market Value of the portion of the distributed
assets so distributed applicable to one Common Share (determined on
the basis of the number of Common Shares outstanding on the record date), determined as set
forth above, and the denominator of which shall be the Market Price on such Record Date. Such
increase shall become effective immediately prior to the opening of business on the day



51









 




following
the last Trading Day of the Spin-Off Valuation Period (as defined below). In the event that such
distribution is not so paid or made, the Exchange Rate shall again be adjusted to be the Exchange
Rate that would then be in effect if such distribution had not been declared. In the case of a
Spin-Off, the Fair Market Value of the securities to be distributed shall equal the average of the
closing sale prices of such securities on the principal securities market on which such securities
are traded for the five consecutive Trading Days commencing on and including the sixth day of
trading of those securities after the effectiveness of the Spin-Off (the “Spin-Off Valuation
Period”), and the Market Price shall be measured for the same period. In the event, however, that
an underwritten initial public offering of the securities in the Spin-Off occurs simultaneously
with the Spin-Off, Fair Market Value of the securities distributed in the Spin-Off shall mean the
initial public offering price of such securities and the Market Price shall mean the Sale Price of
the Common Shares on the same Trading Day.




          (c) In case the Guarantor shall, by dividend or otherwise, distribute to all holders of its
Common Shares cash (excluding any dividend or distribution in connection with the liquidation,
dissolution or winding up of the Guarantor, whether voluntary or involuntary), then, in such case,
the Exchange Rate shall be increased so that the same shall equal the Exchange Rate determined by
multiplying the Exchange Rate in effect immediately prior to the record date by a fraction of which
the numerator shall be the Market Price of the Common Shares and the denominator shall be the
Market Price of the Common Shares less the amount of cash so distributed (and not excluded as
provided above) applicable to one Common Share, such increase to be effective immediately prior to
the opening of business on the day following the record date; provided, however, that in the event
that the portion of the cash so distributed applicable to one Common Share is equal to or greater
than the Market Price of the Common Shares on the record date, in lieu of the foregoing adjustment,
upon exchange of any Securities thereafter, the provisions of Section 11.13 shall apply to such
exchange mutatis mutandis; provided further, that for such application, any references in such
provisions to the “Exchange Property” shall be deemed references to a unit composed of (a) the
number of Common Shares equal to the Exchange Rate immediately prior to the relevant distribution
and (b) the amount of cash such holder would have received had such holder held a number of Common
Shares equal to the Exchange Rate immediately prior to the relevant distribution. If such dividend
or distribution is not so paid or made, the Exchange Rate shall again be adjusted to be the
Exchange Rate which would then be in effect if such dividend or distribution had not been declared.



          (d) In case a tender or exchange offer made by the Guarantor or any subsidiary of the
Guarantor shall expire and such tender or exchange offer (as amended as of the expiration thereof)
shall require the payment to holders of Common Shares of consideration per Common Share, expressed
as an amount per Common Share validly tendered or exchanged, and not withdrawn, pursuant to such
tender offer or exchange offer (the “Offer Consideration”) having a fair market value (as
determined by the Guarantor’s Board of Directors, whose determination shall be conclusive and set
forth in an Officer’s Certificate filed with the Trustee) that as of the last time (the “Expiration
Time”) tenders or exchanges may be made pursuant to such tender or exchange offer exceeds the
Market Price of the Common Shares, then the Exchange Rate shall be increased so that the same shall
equal the Exchange Rate determined by
multiplying the Exchange Rate in effect immediately prior to the Expiration Time by a fraction
of which the numerator shall be the sum of (i) the product of (A) the Offer Consideration and (B)
the number of Common Shares validly tendered or exchanged (and not withdrawn), and



52









 




accepted for
purchase, pursuant to such tender offer or exchange offer (such Common Shares the “Purchased
Shares”) and (ii) the product of (A) the Market Price of the Common Shares as of the Expiration
Time and (B) an amount equal to (i) the number of Common Shares outstanding as of the Expiration
Time (including all Purchased Shares) less (ii) the Purchased Shares, and the denominator shall be
the product of (i) the number of Common Shares outstanding as of the Expiration Time (including all
Purchased Shares) and (ii) the Market Price of the Common Shares as of the Expiration Time. The
adjustment to the Exchange Rate set forth above shall become effective immediately prior to the
opening for business on the day following the Expiration Time. If the Guarantor or such subsidiary
making such tender or exchange offer is obligated to purchase shares pursuant to any such tender or
exchange offer, but the Guarantor or such subsidiary is permanently prevented by applicable law
from effecting any such purchases or all such purchases are rescinded, the Exchange Rate shall
again be adjusted to be the Exchange Rate that would then be in effect if the tender or exchange
offer had not been made.




          (e) In no event shall the Exchange Rate as adjusted pursuant to Sections 11.08(c) and (d)
exceed 28.3687 per $1,000 Principal Amount of Securities (as such Exchange Rate may be adjusted on
a proportional basis for any adjustment made pursuant to Sections 11.06, 11.07 or 11.08 (a) or
(b)).



     SECTION 11.09. Adjustment to Exchange Rate upon a Change in Control.



          (a) If and only to the extent a Holder elects to exchange a Security in connection with a
Change in Control, the Company will increase the Applicable Exchange Rate by a number of Common
Shares (the “Make-Whole Shares”) as set forth below. The number of Make-Whole Shares by which the
Exchange Rate is increased will be determined by reference to the table below, based on the date on
which the Change in Control becomes effective and the average of the Volume Weighted Average Price
of the Common Shares (the “Share Price”) over the five Trading Days immediately preceding the
effective date of such Change in Control transaction, except that if Holders of the Common Shares
receive only cash in such Change in Control transaction, the Share Price will be the cash amount
paid per share. Holders will be notified by the Company of the anticipated effective date of any
Change in Control at least 20 trading days prior to such date.



     An exchange of the Securities by a Holder will be deemed for these purposes to be “in
connection with” a Change in Control if the exchange notice is received by the Exchange Agent
following the effective date of the Change in Control but before the related Change in Control
Purchase Date.



          (b) The Share Prices and number of Make-Whole Shares set forth in the table below will be
adjusted as of any date on which the Exchange Rate is adjusted. On such date, the Share Prices
shall by adjusted by multiplying:




          (1) the Share Price applicable immediately prior to such adjustment, by




          (2) a fraction of which,



53









 






          (A) the numerator shall be the Applicable Exchange Rate immediately prior to
the adjustment giving rise to the Share Price adjustment, and




          (B) the denominator shall be the Applicable Exchange Rate as so adjusted.


The number of shares of Make-Whole Shares shall be correspondingly adjusted in the same manner as
the adjustments described under Sections 11.06, 11.07 and 11.08.




54









 








          (c) The following table sets forth the share price and number of Make-Whole Shares by which the
Exchange Rate shall be adjusted:



Effective Date




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Share Price on	 	 	 	 	 	 	 	 	 	 	 	 
	Effective Date	 	May 18, 2006	 	May 15, 2007	 	May 15, 2008	 	May 15, 2009	 	May 15, 2010	 	May 15, 2011
	$	35.25	 	 	 	6.5466	 	 	 	6.5466	 	 	 	6.5466	 	 	 	6.500	 	 	 	6.3397	 	 	 	0.000	 
	$	45.83	 	 	 	3.5350	 	 	 	3.4074	 	 	 	3.1935	 	 	 	2.8483	 	 	 	2.2335	 	 	 	0.000	 
	$	55.00	 	 	 	2.1993	 	 	 	2.0385	 	 	 	1.7985	 	 	 	1.4420	 	 	 	0.8675	 	 	 	0.000	 
	$	65.00	 	 	 	1.3702	 	 	 	1.2168	 	 	 	1.0034	 	 	 	0.7109	 	 	 	0.3052	 	 	 	0.0000	 
	$	75.00	 	 	 	0.8819	 	 	 	0.7509	 	 	 	0.5787	 	 	 	0.3617	 	 	 	0.1088	 	 	 	0.0000	 
	$	85.00	 	 	 	0.5802	 	 	 	0.4737	 	 	 	0.3412	 	 	 	0.1880	 	 	 	0.0398	 	 	 	0.0000	 
	$	95.00	 	 	 	0.3866	 	 	 	0.3024	 	 	 	0.2032	 	 	 	0.0981	 	 	 	0.0141	 	 	 	0.0000	 
	$	105.00	 	 	 	0.2585	 	 	 	0.1932	 	 	 	0.1202	 	 	 	0.0497	 	 	 	0.0032	 	 	 	0.0000	 
	$	115.00	 	 	 	0.1719	 	 	 	0.1220	 	 	 	0.0692	 	 	 	0.0228	 	 	 	0.0000	 	 	 	0.0000	 
	$	125.00	 	 	 	0.1124	 	 	 	0.0748	 	 	 	0.0373	 	 	 	0.0077	 	 	 	0.0000	 	 	 	0.0000	 
	$	135.00	 	 	 	0.0711	 	 	 	0.0433	 	 	 	0.0173	 	 	 	0.0002	 	 	 	0.0000	 	 	 	0.0000	 
	$	145.00	 	 	 	0.0424	 	 	 	0.0224	 	 	 	0.0052	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 
	$	155.00	 	 	 	0.0227	 	 	 	0.0088	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 
	$	165.00	 	 	 	0.0093	 	 	 	0.0009	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 






          (d) The exact Share Price and effective dates of the Change in Control transaction may
not be set forth on the table above, in which case, if the Share Price is:




     (i) between two Share Prices in the table or such effective date is between two dates
in the table, the number of Make-Whole Shares added to the Exchange Rate of the Securities
will be determined by a straight-line interpolation between the number of Make-Whole Shares
set forth for the higher and lower Share Prices and the two effective dates, as applicable,
based on a 360-day year;




     (ii) in excess of $165.00 per share (subject to adjustment as set forth in 11.09(b)),
the Exchange Rate shall not be increased; or




     (iii) less than $35.25 per share (subject to adjustment as set forth in 11.09(b)), no
Make-Whole Shares will be added to the Exchange Rate of the Securities.



55









 





          (e) Notwithstanding the foregoing, in no event will the Exchange Rate exceed 28.3687 per
$1,000 Principal Amount of the Securities, subject to adjustments to the Exchange Rate in the same
manner as set forth in Sections 11.06, 11.07 and 11.08.



     SECTION 11.10. When No Adjustment Required.



     No adjustment need be made for rights to purchase Common Shares pursuant to a Guarantor plan
for reinvestment of dividends or interest.



     No adjustment need be made for a change in the par value or no par value of the Common Shares.



     To the extent the Securities become exchangeable for cash, assets, property or securities
(other than capital stock), no adjustment need be made thereafter as to the cash, assets, property
or such securities. Interest will not accrue on the cash.



     SECTION 11.11. Notice of Adjustment.



     Whenever the Exchange Rate is adjusted, the Company shall promptly mail to Holders, a notice
of the adjustment and a certificate from the Company’s certified independent public accountants
briefly stating the facts requiring the adjustment and the manner of computing it. The Company
shall file with the Trustee and the Exchange Agent such notice. The certificate shall, absent
manifest error, be conclusive evidence that the adjustment is correct. Neither the Trustee nor any
Exchange Agent shall be under any duty or responsibility with respect to any such certificate
except to exhibit the same to any Holder desiring inspection thereof.



     SECTION 11.12. Notice of Certain Transactions.



     If (a) the Guarantor makes any distribution or dividend that would require an adjustment in
the Exchange Rate pursuant to Section 11.06, 11.07 or 11.08 hereof; (b) the Guarantor takes any
action that would require a supplemental indenture pursuant to Section 11.13 hereof; or (c) there
is a liquidation, dissolution or winding-up of the Guarantor; then the Company shall mail to
Holders and file with the Trustee and the Exchange Agent a notice stating the proposed record date
for a dividend or distribution or the proposed effective date of a subdivision, combination,
reclassification, consolidation, merger, conveyance, transfer, lease, dissolution, liquidation or
winding-up. The Company shall file and mail the notice at least ten days before such date.
Failure to file or mail the notice or any defect in it shall not affect the validity of the
transaction.



     SECTION 11.13. Effect of Reclassification, Consolidation, Merger or Transfer.



     If any of the following events occur, namely (i) any reclassification or change of the
outstanding Common Shares (other than a change in par value, or from par value to no par value, or
from no par value to par value, or as a result of a split, subdivision or combination), (ii) any
consolidation, merger or combination of the Guarantor with another Person as a result of which
Common Shares shall be converted into stock, securities or other property or assets (including
cash), or (iii) any conveyance, transfer or lease of the properties and assets of the Guarantor as,
or substantially as, an entirety to any other Person as a result of which holders of Common



56









 




Shares shall be entitled to receive stock, securities or other property or assets (including
cash) with respect to or in exchange for such Common Shares, then:




          (a) The Company and the Guarantor or the successor or purchasing Person, as the case may be,
shall execute with the Trustee a supplemental indenture (which shall comply with the Trust
Indenture Act as in force at the date of execution of such supplemental indenture if such
supplemental indenture is then required to so comply) providing for the exchange and settlement of
the Securities as set forth in this Indenture. Such supplemental indenture shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Article. If, in the case of any such reclassification, change, consolidation, merger,
combination, conveyance, transfer or lease, the Exchange Property includes shares of stock or other
securities or other property or assets of a Person other than the successor or purchasing Person,
as the case may be, in such reclassification, change, consolidation, merger, combination,
conveyance, transfer or lease, then such supplemental indenture shall also be executed by such
other Person and shall contain such additional provisions to protect the interests of the Holders
of the Securities as the Guarantor’s Board of Directors shall reasonably consider necessary by
reason of the foregoing, including to the extent required by the Guarantor’s Board of Directors and
practicable the provisions providing for the purchase rights set forth in Article 3 herein.



          (b) Notwithstanding the provisions of Section 11.05, the Exchange Value with respect to each
$1,000 Principal Amount of Securities exchanged following the effective date of any such
transaction, shall be calculated based on the kind and amount of shares of stock and other
securities or property or assets (including cash) received upon such reclassification, change,
consolidation, merger, combination, conveyance, transfer or lease by a holder of Common Shares
holding, immediately prior to the transaction, a number of Common Shares equal to the Exchange Rate
immediately prior to such transaction (the “Exchange Property”) and the Remaining Shares shall be
paid in such Exchange Property. For purposes of the foregoing, the definitions of Volume Weighted
Average Price and Trading Day would be modified to apply to such Exchange Property as applicable.



          (c) In the event holders of Common Shares have the opportunity to elect the form of
consideration to be received in such transaction, the Exchange Property shall consist of the
consideration that a majority of the holders of Common Shares who made such an election received in
such transaction. The Company and the Guarantor may not become a party to any such transaction
unless its terms are consistent with the foregoing.



          (d) The Exchange Value in respect of any Securities exchanged following the effective date of
any such transaction shall be calculated in accordance with Section 11.05 but substituting all
references to Common Shares with references to “Exchange Property”. For the purpose of determining
the value of any Exchange Property:




          (i) Any shares of common stock of the successor or purchasing Person or any other
Person that are included in the Exchange Property shall be valued as set forth in Section
11.05 as if such shares were “Common Shares”; and



57









 






          (ii) Any other property (other than cash) included in the Exchange Property shall be
valued in good faith by the Guarantor’s Board of Directors or by an NYSE member firm
selected by the Guarantor’s Board of Directors.



          (e) [Reserved].



          (f) The Company shall cause notice of the execution of such supplemental indenture to be
mailed to each Holder of Securities, at its address appearing on the Securities register provided
for in this Indenture, within twenty (20) days after execution thereof. Failure to deliver such
notice shall not affect the legality or validity of such supplemental indenture.



          (g) The above provisions of this Section shall similarly apply to successive
reclassifications, changes, consolidations, mergers, combinations, sales and conveyances.



          (h) If this Section applies, none of Sections 11.06, 11.07 and 11.08 hereof apply.



     SECTION 11.14. Company Determination Final.



     Any determination that the Company or its Board of Directors or the Guarantor or its Board of
Directors must make pursuant to Section 11.03, 11.06, 11.07, 11.08, 11.09, 11.10, 11.12, 11.13 or
11.17 hereof shall be conclusive in the absence of manifest error.



     SECTION 11.15. Trustee’s Adjustment Disclaimer.



     The Trustee has no duty to determine when an adjustment under this Article 11 should be made,
how it should be made or what it should be. The Trustee has no duty to determine whether a
supplemental indenture under Section 11.13 hereof need be entered into or whether any provisions of
any supplemental indenture are correct. The Trustee shall not be accountable for and makes no
representation as to the validity or value of any securities or assets issued upon exchange of
Securities. The Trustee shall not be responsible for the Company’s or the Guarantor’s failure to
comply with this Article 11, and shall not be deemed to have knowledge of any adjustment unless and
until it shall have received a notice of adjustment pursuant to Section 11.11 hereof. Each
Exchange Agent (other than the Company or one of its Affiliates) shall have the same protection
under this Section 11.15 as the Trustee.



     SECTION 11.16. Simultaneous Adjustments.



     In the event that this Article 11 requires adjustments to the Exchange Rate under more than
one of Section 11.06, 11.07, 11.08(a) or 11.08(b) hereof, and the record dates for the
distributions giving rise to such adjustments shall occur on the same date, then such adjustments
shall be made by applying, first, the provisions of Section 11.08(a) hereof, second, the provisions
of Section 11.08(b) hereof, third, the provisions of Section 11.06 hereof and, fourth, the
provisions of Section 11.07 hereof, provided that no adjustment shall be made more than once
pursuant to any such individual Section.



58









 





     SECTION 11.17. Successive Adjustments.



     After an adjustment to the Exchange Rate under this Article 11, any subsequent event requiring
an adjustment under this Article 11 shall cause an adjustment to the Exchange Rate as so adjusted.



     SECTION 11.18. Rights Issued In Respect of Common Shares Issued Upon Exchange.



     Notwithstanding any other provision hereof, in the event that the Guarantor implements a
shareholders’ rights plan, such rights plan shall provide that upon exchange of the Securities the
Holders will receive, in addition to the Common Shares issuable upon such exchange, if any, such
rights, whether or not such rights have separated from the Common Shares at the time of such
exchange.



     Rights or warrants distributed by the Guarantor to all holders of Common Shares entitling the
holders thereof to subscribe for or purchase shares of the Guarantor’s capital stock (either
initially or under certain circumstances), which rights or warrants, until the occurrence of a
specified event or events (“Trigger Event”):



          (a) are deemed to be transferred with such Common Shares,



          (b) are not exercisable, and



          (c) are also issued in respect of future issuances of Common Shares,


shall not be deemed distributed for purposes of Section 11.08(a) hereof until the occurrence of the
earliest Trigger Event. In addition, in the event of any distribution of rights or warrants, or
any Trigger Event with respect thereto, that shall have resulted in an adjustment to the Exchange
Rate under Section 11.08(a) hereof, (1) in the case of any such rights or warrants which shall all
have been redeemed or purchased without exercise by any holders thereof, the Exchange Rate shall be
readjusted upon such purchase to give effect to such distribution or Trigger Event, as the case may
be, as though it were a cash distribution, equal to the per share purchase price received by a
holder of Common Shares with respect to such rights or warrants (assuming such holder had retained
such rights or warrants), made to all holders of Common Shares as of the date of such purchase, and
(2) in the case of any such rights or warrants all of which shall have expired without exercise by
any holder thereof, the Exchange Rate shall be readjusted as if such issuance had not occurred.




     SECTION 11.19. Guarantor to Provide Common Shares.



     The Guarantor shall, prior to issuance of any Securities hereunder, and from time to time as
may be necessary, reserve out of its authorized but unissued Common Shares a sufficient number of
Common Shares to permit the exchange of the Securities. The Common Shares or other securities
issued upon exchange of the Securities shall bear any legend required by Section 2.06(d) hereof.



59









 





     All Common Shares delivered upon exchange of the Securities shall be newly issued shares or
treasury shares, shall be duly and validly issued and fully paid and nonassessable and shall be
free from preemptive rights and free of any lien or adverse claim.



     The Guarantor covenants that if any Common Shares to be provided for the purpose of exchange
of Securities hereunder require registration with or approval of any governmental authority under
any Bermudan, federal or state law before such shares may be validly issued upon exchange, the
Guarantor will in good faith and as expeditiously as possible endeavor to secure such registration
or approval, as the case may be.



     The Guarantor further covenants that if at any time the Common Shares shall be quoted or
listed on the NASDAQ National Market or the NYSE or any other automated quotation system or
national securities exchange, the Guarantor will, if permitted by the rules of such automated
quotation system or exchange, list and keep listed, so long as the Common Shares shall be so listed
on such automated quotation system or exchange, all Common Shares issuable upon exchange of the
Securities; provided, however, that if the rules of such automated quotation system or exchange
permit the Guarantor to defer the listing of such Common Shares until the first exchange of the
Securities into Common Shares in accordance with the provisions of this Indenture, the Guarantor
covenants to list such Common Shares issuable upon exchange of the Securities in accordance with
the requirements of such automated quotation system or exchange at such time.



     SECTION 11.20. General Considerations.



     Whenever successive adjustments to the Exchange Rate are called for pursuant to this Article
11, such adjustments shall be made to the Market Price of the Common Shares as may be necessary or
appropriate to effectuate the intent of this Article 11 and to avoid unjust or inequitable results
as determined in good faith by the Guarantor’s Board of Directors.



ARTICLE 12.

INTEREST




     SECTION 12.01. Interest Payments.



          (a) The Securities shall provide for payment of interest as specified in paragraph 1 of the
Securities.



          (b) Subject to any payments required as provided in §11.02, Holders of Securities at the close
of business on a Record Date will receive payment of interest, payable on the corresponding
Interest Payment Date notwithstanding the exchange of such Securities at any time after the close
of business on such Record Date.



          (c) In the event that any date on which interest or any other amount is payable on a Security
is not a Business Day, then a payment of the amount payable on such date will be made on the next
succeeding day which is a Business Day and (without any interest or other payment in respect of any
such delay) with the same force and effect as if made on the date the payment was originally
payable.



60









 





     SECTION 12.02. Defaulted Interest; Interest Rights Preserved.



     Except as otherwise specified with respect to the Securities, any interest on any Security
that is payable, but is not punctually paid or duly provided for, within 30 days following any
interest Payment Date (herein called “Defaulted Interest”) shall forthwith cease to be payable to
the registered Holder thereof on the relevant Interest Record Date by virtue of having been such
Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as
provided in clause (a) or (b) below:



          (a) The Company may elect to make payment of any Defaulted Interest to the Persons in whose
names the Securities are registered at the close of business on a special record date (herein
called “Special Interest Record Date”) for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Security and the date of the proposed payment (which
shall not be less than 20 days after such notice is received by the Trustee), and at the same time
the Company shall deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory
to the Trustee for such deposit on or prior to the date of proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as
in this clause provided. Thereupon the Trustee shall fix a Special Interest Record Date for the
payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days
prior to the date of the proposed payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of
such Special Interest Record Date and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the Special Interest Record Date
therefor to be mailed, first-class postage prepaid, to each Holder of Securities at his address as
it appears on the list of Holders maintained pursuant to Section 2.05 hereof not less than ten days
prior to such Special Interest Record Date. The Trustee may, in its discretion, in the name and at
the expense of the Company, cause a similar notice to be published at least once in an Authorized
Newspaper in each place of payment, but such publications shall not be a condition precedent to the
establishment of such Special Interest Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been mailed as aforesaid, such
Defaulted Interest shall be paid to the persons in whose names the Securities are registered at the
close of business on such Special Interest Record Date and shall no longer be payable pursuant to
the following clause (2).



          (b) The Company may make payment of any Defaulted Interest on the Securities in any other
lawful manner not inconsistent with the requirements of any securities exchange on which such
Securities may be listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such
manner of payment shall be deemed practicable by the Trustee.



     Subject to the foregoing provisions of this Section and Section 2.07 hereof, each Security
delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of
any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were
carried by such other Security.




61










 







ARTICLE 13.

MISCELLANEOUS




     SECTION 13.01. Trust Indenture Act.



     This Indenture is hereby made subject to, and shall be governed by, the provisions of the TIA
required to be part of and to govern indentures qualified under the TIA; provided, however that
this Section 13.01 shall not require this Indenture or the Trustee to be qualified under the TIA
prior to the time such qualification is in fact required under the terms of the TIA, nor shall it
constitute any admission or acknowledgment by any party that any such qualification is required
prior to the time such qualification is in fact required under the terms of the TIA. If any
provision hereof limits, qualifies or conflicts with another provision hereof which is required to
be included in an indenture qualified under the TIA, such required provision shall control.



     SECTION 13.02. Notices.



     Any request, demand, authorization, notice, waiver, consent or communication shall be in
writing in the English language and delivered in Person or mailed by first class mail, postage
prepaid, addressed as follows or transmitted by facsimile transmission (confirmed by overnight
courier) to the following facsimile numbers:



     if to the Company:


Nabors Industries, Inc.

c/o Nabors Corporate Services, Inc.

515 West Greens Road, Suite 1200

Houston, Texas 77067

Attn: General Counsel

Telephone Number: (281) 874-0035

Facsimile Number: (281) 775-8431




     if to the Guarantor:


Nabors Industries Ltd.

Mintflower Place

8 Par-La-Ville Road

Hamilton, HM08

Bermuda

Attn: Vice President-Administration

Telephone Number: (441) 292-1510

Facsimile Number: (441) 292-1334




62









 








     if to the Trustee:


Wells Fargo Bank, National Association

230 W. Monroe Street, Ste. 2900

Chicago, IL 60606

MAC E2616-293

Attn: Corporate Trust Services

Telephone Number: (312) 781-0724

Facsimile Number: (312) 726-2158




     Each of the Company, the Guarantor or the Trustee by notice to the others may designate
additional or different addresses for subsequent notices or communications. Notices to the Trustee
shall be effective only upon receipt.



     Any notice or communication given to a Holder shall be mailed to the Holder, by first class
mail, postage prepaid, at the Holder’s address as it appears on the registration books of the
Registrar and shall be sufficiently given if so mailed within the time prescribed.



     Failure to mail a notice or communication to a Holder or any defect in it shall not affect its
sufficiency with respect to other Holders. If a notice or communication is mailed in the manner
provided above, it is duly given, whether or not received by the addressee.



     If the Company or the Guarantor mails a notice or communication to the Holders, it shall mail
a copy to the Trustee and each Registrar, Paying Agent, Exchange Agent or co-registrar.



     SECTION 13.03. Communication by Holders with Other Holders.



     Holders may communicate pursuant to TIA Section 312(b) with other Holders with respect to
their rights under this Indenture or the Securities. The Company, the Guarantor, the Trustee, the
Registrar, the Paying Agent, the Exchange Agent and anyone else shall have the protection of TIA
Section 312(c).



     SECTION 13.04. Certificate and Opinion as to Conditions Precedent.



     Upon any request or application by the Company or the Guarantor to the Trustee to take any
action under this Indenture, the Company or the Guarantor shall furnish to the Trustee:



          (a) an Officers’ Certificate stating that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating to the proposed action have been
complied with; and




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




     SECTION 13.05. Statements Required in Certificate or Opinion.



     Each Officers’ Certificate or Opinion of Counsel with respect to compliance with a covenant or
condition provided for in this Indenture shall include:



63









 





          (a) a statement that each individual making such Officers’ Certificate or Opinion of Counsel
has read such covenant or condition;




          (b) a brief statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such Officers’ Certificate or Opinion of Counsel are
based;




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




          (d) a statement that, in the opinion of such individual, such covenant or condition has been
complied with.




     SECTION 13.06. Separability Clause.



     In case any provision in this Indenture or in the Securities shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.



     SECTION 13.07. Rules by Trustee, Paying Agent, Exchange Agent and Registrar.



     The Trustee may make reasonable rules for action by or a meeting of Holders. The Registrar,
Exchange Agent and the Paying Agent may make reasonable rules for their functions.



     SECTION 13.08. Governing Law.



     THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS INDENTURE AND THE SECURITIES.



     SECTION 13.09. No Recourse Against Others.



     A director, officer, employee or stockholder, as such, of the Company or the Guarantor shall
not have any liability for any obligations of the Company or the Guarantor under the Securities,
the Guarantee or this Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Holder shall waive and release all
such liability. The waiver and release shall be part of the consideration for the issue of the
Securities.



     SECTION 13.10. Record Date for Vote or Consent of Securityholders.



     The Company may set a record date for purposes of determining the identity of Holders entitled
to vote or consent to any action by vote or consent authorized or permitted under this Indenture,
which record date shall be the later of ten days prior to the first solicitation of such vote or
consent or the date of the most recent list of Holders furnished to the Trustee pursuant to Section
2.05 prior to such solicitation. If a record date is fixed, those Persons who were Holders at such
record date (or their duly designated proxies), and only those Persons, shall be entitled to



64









 







take such action by vote or consent or to revoke any vote or consent previously given, whether
or not such Persons continue to be Holders after such record date.



     SECTION 13.11. Submission to Jursidiction; Service of Process.



     The Guarantor hereby irrevocably submits, to the fullest extent permitted by law, to the
nonexclusive jurisdiction of the United States District Court for the Southern District of New York
and of any New York State Court sitting in the Borough of Manhattan in New York City for purposes
of all legal proceedings arising out of or relating to this Indenture, the Securities or Guarantee,
or the transactions contemplated hereby or thereby. The Guarantor irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter have to the laying of
the venue of any such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum. The Guarantor hereby
irrevocably designates and appoints the Company as its authorized agent to receive and forward on
its behalf service of any and all process which may be served in any such suit, action or
proceeding in any such court and agrees that service of process in accordance with applicable law
upon the Company (or any successor) at its office specified in Section 13.02 and written notice of
such service to the Guarantor, mailed or delivered to the Company at such address, shall be deemed
in every respect effective service of process upon the Guarantor in any such suit, action or
proceeding and shall be taken and held to be valid personal service upon the Guarantor. Such
designation and appointment shall be irrevocable. Nothing in this Section 13.11 shall affect the
right of any party hereto to service process in any manner permitted by law or limit the right of
any party hereto to bring proceeding against the Guarantor in the courts of any jurisdiction or
jurisdictions.



     SECTION 13.12. Successors.



     All agreements of the Company and the Guarantor in this Indenture and the Securities shall
bind their respective successors. All agreements of the Trustee in this Indenture shall bind its
successor.



     SECTION 13.13. Multiple Originals.



     The parties may sign any number of copies (including by facsimile) of this Indenture. Each
signed copy shall be an original, but all of them together represent the same agreement. One
signed copy is enough to prove this Indenture.



(Signature Page Follows)




65









 





     IN WITNESS WHEREOF, the undersigned, being duly authorized, have executed this Indenture on
behalf of the respective parties hereto as of the date first written above.



	 	 	 	 	 	 	 
	 	 	NABORS INDUSTRIES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By: 	 	 /s/ Bruce P. Koch	 	 
	 

	 	 	 	 	 
	 

	 	Name:	 Bruce P. Koch	 	 
	 

	 	Title:	 Vice President and Chief
Financial Officer	 	 






	 	 	 	 	 	 	 
	 	 	NABORS INDUSTRIES LTD.	 	 
	 
	 	 	 	 	 	 
	 

	 	By: 	 	 /s/ Bruce P. Koch	 	 
	 

	 	 	 	 	 
	 

	 	Name:	 Bruce P. Koch	 	 
	 

	 	Title:	 Vice President and Chief
Financial Officer	 	 






	 	 	 	 	 	 	 
	 	 	WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee
	 
	 	 	 	 	 	 
	 

	 	By: 	 	 /s/ Christina Faith	 	 
	 

	 	 	 	 	 
	 

	 	Name:	 Christina Faith	 	 
	 

	 	Title:	 Vice President	 	 






S-1












 






EXHIBIT A




[FORM OF LEGEND FOR GLOBAL SECURITY]



UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFERS,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE
& CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFER IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.




[RESTRICTED SECURITY LEGEND]



THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THIS NOTE
AND THE COMMON SHARES ISSUABLE UPON EXCHANGE HEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.



THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE AND THE NABORS’
COMMON SHARES ISSUABLE UPON EXCHANGE HEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) TO NABORS INDUSTRIES LTD. OR TO NABORS INDUSTRIES, INC. OR ANY SUBSIDIARY
THEREOF, (II) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER”
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 (IF AVAILABLE) OR ANOTHER AVAILABLE EXEMPTION OR (IV) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF THE CASES (I) THROUGH (IV) ABOVE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT
OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE. IN ANY


A-1









 






CASE, THE HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTIONS WITH
REGARD TO THE SECURITIES EXCEPT AS PERMITTED UNDER THE SECURITIES ACT.




NABORS INDUSTRIES, INC.




0.94% SENIOR EXCHANGEABLE NOTE DUE 2011




No.

Issue Date:     , 2006

Principal Amount: $




CUSIP: 629568AN6




     Nabors Industries, Inc., a Delaware corporation, promises to pay to                      or
registered assigns, on May 15, 2011 the Principal Amount of                                         
Dollars ($                    ) [or such greater or lesser Principal Amount as may be shown on Schedule
A hereto].1



     Interest Rate: 0.94% per annum.



     Interest Payment Dates: May 15 and November 15, commencing November 15, 2006.



     Regular Record Dates: May 1 and November 1.



     This Security is exchangeable as specified on the other side of this Security.



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



     Unless the certificate of authentication hereon has been executed by the Trustee referred to
on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under
the Indenture or be valid or obligatory for any purpose.





 




			
	1	 	For inclusion in the global Security only.




A-2









 










     IN WITNESS WHEREOF, Nabors Industries, Inc. has caused this instrument to be duly executed.



	 	 	 	 	 	 	 
	 	 	NABORS INDUSTRIES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By: 	 	 	 	 
	 

	 	 	 	 	 
	 

	 	Name: 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 
	 

	 	 	 	 	 	 





Dated:                                         




A-3









 








TRUSTEE’S CERTIFICATE OF AUTHENTICATION




     This is one of the Securities referred to in the within-mentioned Indenture.



Wells Fargo Bank, National Association, as Trustee




	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 

	 	 

Authorized Signatory
	 	 	 	 





Date of authentication:                     



A-4









 






[FORM OF REVERSE SIDE OF SECURITY]




NABORS INDUSTRIES, INC.




0.94% EXCHANGEABLE NOTE DUE 2023




1. Interest




     The Company will pay interest semiannually on May 15 and November 15 of each year commencing
on November 15, 2006 at the rate of 0.94% per annum. Interest will be paid to the holders of
record of the Securities at the close of business on the May 1 or November 1 immediately preceding
the relevant interest payment date (except as otherwise provided in the Indenture with respect to
Special Record Dates for Defaulted Interest). The Company will pay interest on overdue principal,
premium, if any, and, to the extent lawful, interest at a rate per annum that is 1% in excess of
0.94%. Interest on the Securities will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from May 23, 2006. Interest will be computed on the basis
of a 360-day year of twelve 30-day months. If a payment date is not a Business Day, payment will
be made on the next succeeding Business Day, and no additional interest will accrue in respect of
such payment by virtue of the payment being made on such later date.



2. Method of Payment




     Subject to the terms and conditions of the Indenture, the Company will make payments in
respect of the Securities to the Persons entitled thereto. Holders must surrender Securities to
the Paying Agent to collect payments in respect of the Principal Amount of the Securities. The
Company will make all cash payments due on the Securities (i) by wire transfer of immediately
available funds with respect to Securities held in book-entry form or Securities held in
certificated form with an aggregate Principal Amount in excess of $2,000,000 whose Holder has
requested such method of payment and provided wire transfer instructions to the Paying Agent or
(ii) by check payable in such money mailed to a Holder’s registered address with respect to any
other certificated Securities. The Company will pay cash amounts due on the Securities in money of
the United States that at the time of payment is legal tender for payment of public and private
debts.



3. Paying Agent, Exchange Agent and Registrar




     Initially, the Trustee will act as Paying Agent, Exchange Agent and Registrar. The Company
may appoint and change any Paying Agent, Exchange Agent, Registrar or co-registrar without notice,
other than notice to the Trustee. The Company, the Guarantor or any of their Subsidiaries or
Affiliates may act as Paying Agent, Exchange Agent, Registrar or co-registrar.



4. Indenture




     The Company issued the Securities under an Indenture (the “Indenture”), dated as of May 23,
2006, among the Company, the Guarantor and the Trustee. Capitalized terms used herein and not
defined herein have the meanings ascribed thereto in the Indenture. The



A-5









 




Securities are subject to all such terms, and Holders are referred to the Indenture for a
statement of those terms.




     The Securities are general unsecured obligations of the Company, and are fully and
unconditionally guaranteed as to payment by the Guarantor as provided in Article 10 of the
Indenture and as evidenced by the notation of Guarantee endorsed hereon. The Indenture does not
limit the indebtedness issued thereunder or other indebtedness of the Company or the Guarantor,
whether secured or unsecured.



5. Purchase at the Option of the Holder Upon a Change of Control




     Subject to the terms and conditions of the Indenture, in the event any Change in Control shall
occur, each Holder of Securities shall have the right, at the Holder’s option, to require the
Company to purchase any or all of such Holder’s Securities (or portions thereof that are integral
multiples of $1,000 of Principal Amount), on the Change in Control Purchase Date, which date is no
earlier than 20 Trading Days and no later than 35 Trading Days after the date notice of the Change
in Control is mailed in accordance with the Indenture and in no event prior to the date on which
the Change in Control occurs, at a price, payable in cash equal to the Principal Amount plus
accrued and unpaid interest, if any, and Additional Amounts, if any, to, but excluding, the Change
in Control Purchase Date.



6. Ranking




     The Securities and the Guarantee rank equally in contractual right of payment with all of the
other existing and future unsubordinated indebtedness of the Company and the Guarantor,
respectively.



7. Exchange




     A Holder of a Security may exchange this Security, in whole or in part, for cash and, if
applicable, Common Shares during the 30 calendar days ending at the close of business on the
Business Day immediately preceding the Stated Maturity (unless earlier purchased), and prior
thereto, only upon the occurrence of one of the events set forth in Section 11.01 of the Indenture.
A Security in respect of which a Holder has delivered a notice of exercise of the option to
require the Company to purchase such Security in the event of a Change in Control may be exchanged
only if the notice of exercise is withdrawn in accordance with the terms of the Indenture.



     In the event a Change in Control occurs and a Holder surrenders the Securities for exchange
pursuant to Section 11.01 of the Indenture during the period beginning on (and including) the
effective date of a Change in Control and ending on (and including) the Change in Control Purchase
Date in connection with such Change in Control, to the extent required pursuant to Article 11 of
the Indenture, the Exchange Rate will be adjusted as provided in Section 11.09 of the Indenture.



     The initial Exchange Rate is 21.8221 Common Shares per $1,000 Principal Amount, subject to
adjustment in certain events described in the Indenture. The Company will deliver cash or a check
in lieu of any fractional Common Share if Common Shares are issued upon such exchange.



A-6









 





     To exchange this Security a Holder must (1) complete and manually sign the exchange notice on
the back of this Security (or complete and manually sign a facsimile of such notice) and deliver
such notice to the Exchange Agent, (2) complete and manually sign the exchange notice to the
Company on the back of this Security (or complete and manually sign a facsimile of such notice) and
deliver such notice to the Company, (3) surrender this Security to the Exchange Agent, (4) furnish
appropriate endorsements and transfer documents if required by the Exchange Agent, the Company or
the Trustee, (5) pay any transfer or similar tax, if required, and (6) if required by Section 12.01
of the Indenture, pay funds equal to the interest payable on the next Interest Payment Date.



     A Holder may exchange a portion of this Security if the Principal Amount of such portion is
$1,000 or an integral multiple of $1,000. No payment or adjustment will be made for dividends on
the Common Shares except as provided in the Indenture. Except as provided in Section 12.01 of the
Indenture, on exchange of this Security, that portion of accrued but unpaid interest (excluding
Liquidated Damages), if any, and Additional Amounts, if any, to the Exchange Date with respect to
the exchanged portion of this Security shall be deemed to be paid in full and not canceled,
extinguished and forfeited through the delivery of the Settlement Amount in exchange for the
portion of this Security being exchanged pursuant to the terms hereof.



8. Denominations, Transfer; Exchange




     The Securities are in registered form, without coupons, in denominations of $1,000 of
Principal Amount and integral multiples of $1,000. A Holder may transfer or exchange Securities in
accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees required by law or
permitted by the Indenture. The Registrar need not transfer or exchange any Securities in respect
of which a Change in Control Purchase Notice has been given and not withdrawn (except, in the case
of a Security to be purchased in part, the portion of the Security not to be purchased).



9. Persons Deemed Owners




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



10. Unclaimed Monies or Securities




     The Trustee and the Paying Agent shall return to the Company upon written request any money or
securities held by them for the payment of any amount with respect to the Securities that remains
unclaimed for six months, provided, however, that the Trustee or such Paying Agent, before being
required to make any such return, shall in the event that the Securities are no longer held in
global form, at the expense of the Company cause to be published once in a newspaper of general
circulation in The City of New York or mail to each such Holder notice that such money or
securities remains unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such publication or mailing, any unclaimed money or securities then
remaining will be returned to the Company. After return to the Company,



A-7









 







Holders entitled to the money or securities must look to the Company for payment as general
creditors unless an applicable abandoned property law designates another Person.



11. Amendment; Waiver




     Subject to certain exceptions set forth in the Indenture, (i) the Indenture or the Securities
may be amended with the written consent of the Holders of at least a majority in aggregate
Principal Amount of the Securities at the time outstanding and (ii) certain Defaults and Events of
Defaults may be waived with the consent of the Holders of a majority in aggregate Principal Amount
of the Securities at the time outstanding. Subject to certain exceptions set forth in the
Indenture, without the consent of any Holder, the Company, the Guarantor and the Trustee may amend
the Indenture or the Securities to cure any ambiguity, defect or inconsistency, or to provide for
the assumption of the Company’s or the Guarantor’s obligations to the Holders of the Securities in
case of a merger or consolidation or sale of all or substantially all of the Company’s or the
Guarantor’s assets; to provide for uncertificated Securities in addition to or in place of
certificated Securities; or to make any change that does not adversely affect the rights of any
Holder or to comply with any requirement of the SEC in connection with the qualification of the
Indenture under the TIA.



12. Defaults and Remedies




     Under the Indenture, Events of Default include (i) the Company defaults in the payment of the
Principal Amount or a Change in Control Purchase Price on any Security when the same becomes due
and payable at its Stated Maturity, upon declaration, when due for purchase by the Company or
otherwise, and such default continues for ten days; (ii) the Company defaults in the payment of
interest, Liquidated Damages, if any, or Additional Amounts, if any, and such default continues for
30 days; (iii) failure of the Company or the Guarantor to perform or comply with their obligation
to deliver cash, Common Shares or other property upon Exchange of the Securities pursuant to
Article 11 of the Indenture, and such failure continues for a period of 20 days; (iv) the Company
or the Guarantor fails to comply with any of its agreements or covenants in this Security or the
Indenture (other than those referred to in clauses (i) through (iii) above) and such failure
continues for 90 days after receipt by the Company of a Notice of Default; (v) certain events of
bankruptcy or insolvency as set forth in the Indenture; and (vi) the failure to keep the Guarantee
in place. If an Event of Default occurs and is continuing, the Trustee, or the Holders of at least
25% in aggregate Principal Amount of the Securities at the time outstanding, may declare all the
Securities to be due and payable immediately. Certain events of bankruptcy or insolvency are
Events of Default which will result in the Securities being declared due and payable immediately
upon the occurrence of such Events of Default.



     Holders may not enforce the Indenture or the Securities except as provided in the Indenture.
The Trustee may refuse to enforce the Indenture or the Securities unless it receives reasonable
indemnity or security. Subject to certain limitations, Holders of a majority in aggregate
Principal Amount of the Securities at the time outstanding may direct the Trustee in its exercise
of any trust or power. The Trustee may withhold from Holders notice of any continuing Default
(except a Default in payment of amounts specified in clause (i) and (ii) above) if it determines
that withholding notice is in their interests.



A-8









 





13. Trustee Dealings with the Company




     The Trustee under the Indenture, in its individual or any other capacity, may become the owner
or pledgee of Securities and may otherwise deal with and collect obligations owed to it by the
Company, the Guarantor or their Affiliates and may otherwise deal with the Company, the Guarantor
or their Affiliates with the same rights it would have if it were not Trustee.



14. No Recourse Against Others




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



15. Authentication




     This Security shall not be valid until an authorized signatory of the Trustee manually signs
the Trustee’s Certificate of Authentication on the other side of this Security.



16. Abbreviations




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



17. Registration Rights




     The Holders of Restricted Securities are entitled to the benefits set forth in Registration
Rights Agreement relative to registration of the Securities.



18. Governing Law




     THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THIS SECURITY.



19. Indenture to Control




     In case of any conflict between the provisions of this Security and the Indenture, the
provisions of the Indenture shall control.



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


Nabors Industries, Inc.

515 West Greens Road, Suite 1200

Houston, Texas 77067




A-9









 







Attention: Legal Department




A-10









 








[FORM OF NOTATION ON SECURITY RELATING TO GUARANTEE]




     The Guarantor (which term includes any successor Person in such capacity under the Indenture),
has fully, unconditionally and absolutely guaranteed, to the extent set forth in the Indenture and
subject to the provisions in the Indenture, the due and punctual payment of the Principal Amount,
interest, and Additional Amounts, if any, on these Securities and all other amounts due and
payable under the Indenture and these Securities by the Company.



     The obligations of the Guarantor to the Holders of Securities and to the Trustee pursuant to
the Guarantee and the Indenture are expressly set forth in Article 10 of the Indenture and
reference is hereby made to the Indenture for the precise terms of the Guarantee.



	 	 	 	 	 	 	 
	 	 	Guarantor:	 	 
	 
	 	 	 	 	 	 
	 	 	NABORS INDUSTRIES LTD.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 






A-11









 






[FORM OF EXCHANGE NOTICE]




EXCHANGE NOTICE

TO THE EXCHANGE AGENT





			
	To:	 	Nabors Industries, Inc.

Nabors Industries Ltd.

c/o Exchange Agent





     The undersigned registered holder of this Security hereby irrevocably exercises the option to
exchange this Security, or portion hereof (which is $1,000 Principal Amount (as defined in the
Indenture to which this Security is subject) or an integral multiple thereof) below designated, in
accordance with the terms of the Indenture referred to in this Security, and directs that the
consideration issuable and deliverable upon such exchange, together with any check in payment for
fractional shares, if any, and any Securities representing any unexchanged Principal Amount hereof,
be issued and delivered to the registered holder hereof unless a different name has been indicated
below. If shares or any portion of this Security not exchanged are to be issued in the name of a
Person other than the undersigned, the undersigned will pay all transfer taxes payable with respect
thereto.



	 	 	 	 	 	 	 
	 

	 	Dated:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

Signature(s)
	 	 
	 
	 	 	 	 	 	 
	Fill in for payment of cash or other
property, registration of shares
if to be delivered, and Securities
if to be issued other than to and in
the name of the registered holder:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

(Name)
	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

(Street Address)
	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

(City, State and Zip Code)
	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Please print name and address	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Principal Amount to be exchanged	 	 
	 

	 	 	 	(if less than all):	 	 
	 

	 	 	 	$                    ,000	 	 
	 

	 	 	 	Social Security or Other Taxpayer	 	 
	 

	 	 	 	Identification Number:                     	 	 






A-12









 






[FORM OF EXCHANGE NOTICE]




CONFIRMING




EXCHANGE NOTICE




TO BE SENT TO THE COMPANY





			
	To:	 	Nabors Industries, Inc.

Nabors Industries Ltd.





     The undersigned registered holder of this Security hereby irrevocably exercises the option to
exchange this Security, or portion hereof (which is $1,000 Principal Amount (as defined in the
Indenture to which this Security is subject) or an integral multiple thereof) below designated in
accordance with the terms of the Indenture referred to in this Security, and directs that the
consideration issuable and deliverable upon such exchange, together with any check in payment for
fractional shares, if any, and any Securities representing any unexchanged Principal Amount hereof,
be issued and delivered to the registered holder hereof unless a different name has been indicated
below. If shares or any portion of this Security not exchanged are to be issued in the name of a
Person other than the undersigned, the undersigned will pay all transfer taxes payable with respect
thereto.



	 	 	 	 	 	 	 
	 

	 	Dated:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

Signature(s)
	 	 
	 
	 	 	 	 	 	 
	Fill in for payment of cash or other
property, registration of shares
if to be delivered, and Securities
if to be issued other than to and in
the name of the registered holder:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

(Name)
	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

(Street Address)
	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

(City, State and Zip Code)
	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Please print name and address	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Principal Amount to be exchanged	 	 
	 

	 	 	 	(if less than all):	 	 
	 

	 	 	 	$                    ,000	 	 
	 

	 	 	 	Social Security or Other Taxpayer	 	 
	 

	 	 	 	Identification Number:                     	 	 






A-13









 





[FORM OF OPTION TO ELECT PURCHASE




UPON A CHANGE IN CONTROL]




     To: Nabors Industries, Inc.



     The undersigned registered holder of this Security hereby acknowledges receipt of a notice
from Nabors Industries, Inc. (the “Company”) as to the occurrence of a Change in Control as defined
in the Indenture to which this Security is subject and requests and instructs the Company to
purchase this Security, or the portion hereof (which is $1,000 Principal Amount (as defined in the
Indenture to which this Security is subject) or an integral multiple thereof) below designated, in
accordance with the terms of the Indenture referred to in this Security.



	 	 	 	 	 
	Dated:
	 	 	 	 
	 

	 	 

Signature(s)
	 	 
	 

	 	Principal Amount to be purchased	 	 
	 

	 	(if less than all):	 	 
	 

	 	$                    ,000	 	 
	 

	 	Social Security or Other Taxpayer	 	 
	 

	 	Identification Number:                     	 	 






A-14









 






[FORM OF SCHEDULE FOR ENDORSEMENTS ON GLOBAL SECURITY

TO REFLECT CHANGES IN PRINCIPAL AMOUNT]




SCHEDULE A




Changes to Principal Amount of Global Security




	 	 	 	 	 	 	 
	 	 	PRINCIPAL AMOUNT OF	 	 	 	 
	 	 	SECURITIES BY WHICH THIS	 	 	 	 
	 	 	GLOBAL SECURITY IS TO BE	 	 	 	 
	 	 	REDUCED OR INCREASED,	 	REMAINING PRINCIPAL	 	 
	 	 	AND REASON FOR	 	AMOUNT OF THIS GLOBAL	 	NOTATION
	DATE	 	REDUCTION OR INCREASE	 	SECURITY	 	MADE BY
	 
	 

	 	 
	 	 
	 	 





A-15









 






TRANSFER NOTICE




     This Transfer Notice relates to $                     Principal Amount (as defined in the Indenture to
which the referenced Securities are subject) of the 0.94% Senior Exchangeable Notes Due 2011 of
Nabors Industries, Inc., a Delaware corporation, held by                      (the “Transferor”).



(I) or (we) assign and transfer this Security to



 



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



 



 



(Insert assignee’s social security or tax I.D. no.)




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



     Your Signature:


 




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



          Date:



 




          Signature Guarantee:2



 




     In connection with any transfer of any of the Securities evidenced by this certificate occurring
prior to the date that is two years after the later of the date of original issuance of such
Securities and the last date, if any, on which such Securities were owned by the Company or any
Affiliate of the Company, the undersigned confirms that such Securities are being transferred:



CHECK ONE BOX BELOW




          (1) [ ] to Nabors Industries Ltd., Nabors Industries, Inc. or any subsidiary thereof; or




          (2) [ ] pursuant to and in compliance with Rule 144A under the Securities Act of 1933; or






 




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




A-16









 










     (3) [ ] pursuant to another available exemption from the registration requirements of the
Securities Act of 1933 provided by Rule 144 thereunder; or



     (4) [ ] pursuant to an effective registration statement under the Securities Act of 1933.




Unless one of the boxes is checked, the Trustee will refuse to register any
of the Securities evidenced by this certificate in the name of any person
other than the registered holder thereof; provided, however, that if box (3)
or (4) is checked, the Trustee may require, prior to registering any such
transfer of the Securities such legal opinions, certifications and other
information as it has reasonably requested to confirm that such transfer is
being made pursuant to an exemption from, or in a transaction not subject
to, the registration requirements of the Securities Act of 1933.



     (5) [ ] The transferee is an Affiliate of the Company.



	 	 	 	 	 
	 

	 	 

Signature
	 	 
	 
	 	 	 	 
	 

	 	 

Date
	 	 
	 
	 	 	 	 
	 

	 	 

Signature Guarantee3
	 	 








 




			
	3	 	Signature must be guaranteed by a commercial
bank, trust company or member firm of the New York Stock Exchange.




A-17









 










TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.




     The undersigned represents and warrants that it is purchasing this Security for its own
account or an account with respect to which it exercises sole investment discretion and that it and
any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the
Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the undersigned has
requested pursuant to Rule 144A or has determined not to request such information and that it is
aware that the transferor is relying upon the undersigned’s foregoing representations in order to
claim the exemption from registration provided by Rule 144A.



	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	[Signature of executive officer of purchaser]
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 





A-18









 






[FORM OF SCHEDULE FOR ENDORSEMENTS ON GLOBAL SECURITY

TO REFLECT CHANGES IN PRINCIPAL AMOUNT]




SCHEDULE A




Changes to Principal Amount of Global Security




	 	 	 	 	 	 	 
	 	 	PRINCIPAL AMOUNT OF	 	 	 	 
	 	 	SECURITIES BY WHICH THIS	 	 	 	 
	 	 	GLOBAL SECURITY IS TO BE	 	 	 	 
	 	 	REDUCED OR INCREASED,	 	REMAINING PRINCIPAL	 	 
	 	 	AND REASON FOR	 	AMOUNT OF THIS GLOBAL	 	NOTATION
	DATE	 	REDUCTION OR INCREASE	 	SECURITY	 	MADE BY
	 

	 	 
	 	 
	 	 





A-19