<PAGE>

                                                                    Exhibit 4.12



                            NABORS INDUSTRIES, INC.,

                                    as Issuer

                             NABORS INDUSTRIES LTD.,

                                  as Guarantor

                    SERIES B ZERO COUPON SENIOR EXCHANGEABLE

                                 NOTES DUE 2023


                                ----------------

                                    INDENTURE

                          Dated as of December 13, 2004

                             ----------------------

                J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION,

                                   as Trustee

                             ----------------------



<PAGE>




                             CROSS REFERENCE TABLE*

<TABLE>
<CAPTION>
TIA                                                                                          INDENTURE
SECTION                                                                                      SECTION
-------                                                                                      ---------
<S>           <C>                                                                            <C>
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
                 (d)..............................................................................7.06
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
</TABLE>

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

**    Note: N.A. means Not Applicable.


<PAGE>


                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               PAGE
<S>                                                                                                            <C>
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE.............................................................1
   SECTION 1.01.         DEFINITIONS..............................................................................1
   SECTION 1.02.         OTHER DEFINITIONS........................................................................6
   SECTION 1.03.         INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT........................................7
   SECTION 1.04.         RULES OF CONSTRUCTION....................................................................8

ARTICLE 2. THE SECURITIES.........................................................................................8
   SECTION 2.01.         FORM AND DATING..........................................................................8
   SECTION 2.02.         EXECUTION AND AUTHENTICATION.............................................................9
   SECTION 2.03.         REGISTRAR, PAYING AGENT AND EXCHANGE AGENT..............................................10
   SECTION 2.04.         PAYING AGENT TO HOLD CASH AND SECURITIES IN TRUST.......................................10
   SECTION 2.05.         HOLDER LISTS............................................................................11
   SECTION 2.06.         EXCHANGE AND REGISTRATION OF TRANSFER OF SECURITIES; RESTRICTIONS ON TRANSFERS;
                         DEPOSITARY..............................................................................11
   SECTION 2.07.         REPLACEMENT SECURITIES..................................................................15
   SECTION 2.08.         OUTSTANDING SECURITIES; DETERMINATIONS OF HOLDERS' ACTION...............................16
   SECTION 2.09.         TEMPORARY SECURITIES....................................................................17
   SECTION 2.10.         CANCELLATION............................................................................17
   SECTION 2.11.         PERSONS DEEMED OWNERS...................................................................17
   SECTION 2.12.         CUSIP NUMBERS...........................................................................18

ARTICLE 3. REDEMPTION AND REPURCHASES............................................................................18
   SECTION 3.01.         RIGHT TO REDEEM; NOTICES TO TRUSTEE.....................................................18
   SECTION 3.02.         SELECTION OF SECURITIES TO BE REDEEMED..................................................18
   SECTION 3.03.         NOTICE OF REDEMPTION....................................................................19
   SECTION 3.04.         EFFECT OF NOTICE OF REDEMPTION..........................................................20
   SECTION 3.05.         DEPOSIT OF REDEMPTION PRICE.............................................................20
   SECTION 3.06.         SECURITIES REDEEMED IN PART.............................................................21
   SECTION 3.07.         [RESERVED]..............................................................................21
   SECTION 3.08.         REPURCHASE OF SECURITIES AT OPTION OF THE HOLDER........................................21
   SECTION 3.09.         REPURCHASE AT OPTION OF THE HOLDER UPON A FUNDAMENTAL CHANGE............................23
   SECTION 3.10.         EFFECT OF REPURCHASE NOTICE OR FUNDAMENTAL CHANGE REPURCHASE NOTICE.....................25
   SECTION 3.11.         DEPOSIT OF PURCHASE PRICE OR FUNDAMENTAL CHANGE PURCHASE PRICE..........................26
   SECTION 3.12.         SECURITIES REPURCHASED IN PART..........................................................26
   SECTION 3.13.         COVENANT TO COMPLY WITH SECURITIES LAWS UPON  REPURCHASE OF SECURITIES..................26
</TABLE>


                                       i
<PAGE>

<TABLE>
<S>                                                                                                            <C>
   SECTION 3.14.         REPAYMENT TO THE COMPANY................................................................27

ARTICLE 4. COVENANTS.............................................................................................27
   SECTION 4.01.         PAYMENT OF SECURITIES...................................................................27
   SECTION 4.02.         FINANCIAL INFORMATION; SEC REPORTS......................................................28
   SECTION 4.03.         COMPLIANCE CERTIFICATE..................................................................28
   SECTION 4.04.         FURTHER INSTRUMENTS AND ACTS............................................................29
   SECTION 4.05.         MAINTENANCE OF OFFICE OR AGENCY.........................................................29
   SECTION 4.06.         EXISTENCE...............................................................................29
   SECTION 4.07.         [RESERVED]..............................................................................29
   SECTION 4.08.         REGISTRATION RIGHTS.....................................................................30
   SECTION 4.09.         PAYMENT OF ADDITIONAL AMOUNTS...........................................................30
   SECTION 4.10.         CONTINGENT DEBT TAX TREATMENT...........................................................32
   SECTION 4.11.         CALCULATION OF TAX ORIGINAL ISSUE DISCOUNT..............................................32

ARTICLE 5. SUCCESSOR CORPORATION.................................................................................33
   SECTION 5.01.         WHEN THE COMPANY AND THE GUARANTOR MAY MERGE OR TRANSFER ASSETS.........................33
   SECTION 5.02.         SUCCESSORS SUBSTITUTED..................................................................34

ARTICLE 6. DEFAULTS AND REMEDIES.................................................................................34
   SECTION 6.01.         EVENTS OF DEFAULT.......................................................................34
   SECTION 6.02.         ACCELERATION............................................................................35
   SECTION 6.03.         OTHER REMEDIES..........................................................................36
   SECTION 6.04.         WAIVER OF PAST DEFAULTS.................................................................36
   SECTION 6.05.         CONTROL BY MAJORITY.....................................................................36
   SECTION 6.06.         LIMITATION ON SUITS.....................................................................36
   SECTION 6.07.         RIGHTS OF HOLDERS TO RECEIVE PAYMENT....................................................37
   SECTION 6.08.         COLLECTION SUIT BY TRUSTEE..............................................................37
   SECTION 6.09.         TRUSTEE MAY FILE PROOFS OF CLAIM........................................................37
   SECTION 6.10.         PRIORITIES..............................................................................38
   SECTION 6.11.         UNDERTAKING FOR COSTS...................................................................38
   SECTION 6.12.         WAIVER OF STAY, EXTENSION OR USURY LAWS.................................................39

ARTICLE 7. TRUSTEE...............................................................................................39
   SECTION 7.01.         DUTIES OF TRUSTEE.......................................................................39
   SECTION 7.02.         RIGHTS OF TRUSTEE.......................................................................40
   SECTION 7.03.         INDIVIDUAL RIGHTS OF TRUSTEE............................................................42
   SECTION 7.04.         TRUSTEE'S DISCLAIMER....................................................................42
   SECTION 7.05.         NOTICE OF DEFAULTS......................................................................42
   SECTION 7.06.         REPORTS BY TRUSTEE TO HOLDERS...........................................................42
   SECTION 7.07.         COMPENSATION AND INDEMNITY..............................................................43
   SECTION 7.08.         REPLACEMENT OF TRUSTEE..................................................................44
   SECTION 7.09.         SUCCESSOR TRUSTEE BY MERGER.............................................................44
   SECTION 7.10.         ELIGIBILITY; DISQUALIFICATION...........................................................45
</TABLE>

<PAGE>

<TABLE>
<S>                                                                                                            <C>
   SECTION 7.11.         PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.......................................45

ARTICLE 8. DISCHARGE OF INDENTURE................................................................................45
   SECTION 8.01.         DISCHARGE OF LIABILITY ON SECURITIES....................................................45
   SECTION 8.02.         REPAYMENT TO THE COMPANY................................................................46

ARTICLE 9. AMENDMENTS............................................................................................46
   SECTION 9.01.         WITHOUT CONSENT OF HOLDERS..............................................................46
   SECTION 9.02.         WITH CONSENT OF HOLDERS.................................................................47
   SECTION 9.03.         COMPLIANCE WITH TRUST INDENTURE ACT.....................................................47
   SECTION 9.04.         REVOCATION AND EFFECT OF CONSENTS, WAIVERS AND ACTIONS..................................48
   SECTION 9.05.         NOTATION ON OR EXCHANGE OF SECURITIES...................................................48
   SECTION 9.06.         TRUSTEE TO SIGN SUPPLEMENTAL INDENTURES.................................................48
   SECTION 9.07.         EFFECT OF SUPPLEMENTAL INDENTURES.......................................................48

ARTICLE 10. GUARANTEE OF SECURITIES..............................................................................48
   SECTION 10.01.        UNCONDITIONAL GUARANTEE.................................................................48
   SECTION 10.02.        EXECUTION AND DELIVERY OF NOTATION OF GUARANTEE.........................................51

ARTICLE 11. EXCHANGE.............................................................................................51
   SECTION 11.01.        EXCHANGE PRIVILEGE......................................................................51
   SECTION 11.02.        EXCHANGE PROCEDURE......................................................................54
   SECTION 11.03.        FRACTIONAL SHARES.......................................................................55
   SECTION 11.04.        TAXES ON EXCHANGE.......................................................................55
   SECTION 11.05.        PAYMENT UPON EXCHANGE...................................................................55
   SECTION 11.06.        ADJUSTMENT FOR CHANGE IN CAPITAL STOCK..................................................60
   SECTION 11.07.        ADJUSTMENT FOR RIGHTS OR WARRANTS.......................................................60
   SECTION 11.08.        ADJUSTMENT FOR OTHER DISTRIBUTIONS......................................................61
   SECTION 11.09.        [RESERVED]..............................................................................62
   SECTION 11.10.        WHEN ADJUSTMENT MAY BE DEFERRED.........................................................62
   SECTION 11.11.        NOTICE OF ADJUSTMENT....................................................................63
   SECTION 11.12.        VOLUNTARY CHANGE........................................................................63
   SECTION 11.13.        NOTICE OF CERTAIN TRANSACTIONS..........................................................63
   SECTION 11.14.        EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR TRANSFER...........................64
   SECTION 11.15.        COMPANY DETERMINATION FINAL.............................................................66
   SECTION 11.16.        TRUSTEE'S ADJUSTMENT DISCLAIMER.........................................................66
   SECTION 11.17.        SIMULTANEOUS ADJUSTMENTS................................................................66
   SECTION 11.18.        SUCCESSIVE ADJUSTMENTS..................................................................66
   SECTION 11.19.        RIGHTS ISSUED IN RESPECT OF COMMON SHARES ISSUED UPON EXCHANGE..........................67
   SECTION 11.20.        GENERAL CONSIDERATIONS..................................................................67
</TABLE>


<PAGE>

<TABLE>
<S>                                                                                                            <C>
ARTICLE 12. CONTINGENT INTEREST..................................................................................68
   SECTION 12.01.        GENERAL.................................................................................68
   SECTION 12.02.        DEFAULTED CONTINGENT INTEREST; INTEREST RIGHTS PRESERVED................................68

ARTICLE 13. MISCELLANEOUS........................................................................................69
   SECTION 13.01.        TRUST INDENTURE ACT.....................................................................69
   SECTION 13.02.        NOTICES.................................................................................70
   SECTION 13.03.        COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.............................................71
   SECTION 13.04.        CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT......................................71
   SECTION 13.05.        STATEMENTS REQUIRED IN CERTIFICATE OR OPINION...........................................71
   SECTION 13.06.        SEPARABILITY CLAUSE.....................................................................72
   SECTION 13.07.        RULES BY TRUSTEE, PAYING AGENT, EXCHANGE AGENT AND REGISTRAR............................72
   SECTION 13.08.        GOVERNING LAW...........................................................................72
   SECTION 13.09.        NO RECOURSE AGAINST OTHERS..............................................................72
   SECTION 13.10.        RECORD DATE FOR VOTE OR CONSENT OF SECURITYHOLDERS......................................72
   SECTION 13.11.        [RESERVED.].............................................................................72
   SECTION 13.12.        SUCCESSORS..............................................................................72
   SECTION 13.13.        MULTIPLE ORIGINALS......................................................................73


EXHIBIT A                FORM OF SECURITY
EXHIBIT B                PROJECTED PAYMENT SCHEDULE
ANNEX I                  REGISTRATION RIGHTS OF HOLDERS
</TABLE>


<PAGE>

         INDENTURE, dated as of December 13, 2004, among Nabors Industries,
Inc., a Delaware corporation (the "COMPANY"), Nabors Industries Ltd., a Bermuda
exempted company (the "GUARANTOR"), and J.P. Morgan Trust Company, 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 Series B Zero
Coupon Senior Exchangeable Notes Due 2023:


                                   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 securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.

         "AGENT" means any Registrar or Paying Agent.

         "AMEX" means the American Stock Exchange.

         "BANKRUPTCY LAW" means Title 11, United States Code, or any similar
Federal or state law or any similar Bermudan 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 11.14 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


                                       1
<PAGE>

than one such resulting class, the shares of each such class then so issuable
pursuant to the terms 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.

         "CONTINGENT INTEREST" shall have the meaning assigned to such term in
paragraph 10 of the Securities.

         "CONTINGENT INTEREST PAYMENT DATE" shall have the meaning assigned to
such term in paragraph 10 of the Securities.

         "CONTINGENT INTEREST RECORD DATE" shall have the meaning assigned to
such term in paragraph 10 of the Securities.

         "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 Institutional Trust Services, 600 Travis Street, Suite 1150, Houston,
Texas 77002-3009.

         "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.


                                       2
<PAGE>

         "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 subparagraph (i) of the last paragraph of Section 11.01 hereof from
the seller of the Common Shares to its buyer.

         "FUNDAMENTAL CHANGE" means the occurrence of any transaction or event
in connection with which all or substantially all Common Shares shall be
exchanged for, converted into, acquired for or constitute solely the right to
receive (whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or
otherwise) any form of consideration which is not all or substantially all
common stock listed (or, upon consummation of or immediately following such
transaction or event, which will be listed) on a United States national
securities exchange or approved for quotation on the Nasdaq National Market or
any similar United States system of automated dissemination of quotations of
securities prices.

         "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.

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

         "ISSUE DATE" of any Security means December 13, 2004.

         "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 Contingent Interest, if any, shall accrue for the
intervening period.

         "MARKET PRICE" means, as of any Repurchase Date or date of
determination, the average of the Sale Prices of the Common Shares for the five
Trading Day period ending on the third Business Day prior to the applicable
Repurchase Date or date of determination (if the third Business Day prior to the
applicable Repurchase Date or date of determination is a Trading Day or, if it
is not a Trading Day, then on the last Trading Day prior to such third 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 Repurchase Date or date of determination, of any event
described in Section 11.06, 11.07 or 11.08 hereof; subject, however, to the
conditions set forth in Sections 11.09 and 11.10 hereof.

         "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.

         "NON-U.S. PERSON" means a Person that is not a U.S. Person.


                                       3
<PAGE>

         "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."

         "OFFICERS' 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.

         "ORIGINAL INDENTURE" means the Indenture dated as of June 10, 2003 by
and among the Company, the Guarantor and the trustee named therein, which sets
forth the terms of the Company's Zero Coupon Senior Exchangeable Notes Due 2023.

         "ORIGINAL SECURITIES" means the Company's Zero Coupon Senior
Exchangeable Notes Due 2023 issued pursuant to the Original Indenture.

         "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.

         "REDEMPTION DATE" means a date specified for redemption of the
Securities in accordance with the terms of the Securities and Section 3.01 of
this Indenture.

         "REDEMPTION PRICE" shall have the meaning set forth in paragraph 5 of
the Securities.

         "REGULATION S" means Regulation S as promulgated under the Securities
Act.

         "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 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


                                       4
<PAGE>

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
the National Quotation Bureau 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 Series B Zero Coupon Senior
Exchangeable Notes Due 2023.

         "SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.

         "STATED MATURITY," when used with respect to any Security, means the
date specified in such Security as the fixed date on which an amount equal to
the Principal of such Security is due and payable.

         "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.

         "TAX ORIGINAL ISSUE DISCOUNT" means the amount of ordinary interest
income on a Security that must be accrued as original issue discount for United
States Federal income tax purposes pursuant to U.S. Treasury Regulation Section
1.1275-4.

         "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 trading in securities generally
occurs on the AMEX or, if the applicable security is not listed on the AMEX, on
the principal other national or regional securities exchange on which the
applicable security is then listed or, if the applicable security is not listed
on a national or regional securities exchange, on the Nasdaq National Market, or
if the applicable security is not quoted on the Nasdaq National Market, on the
principal other market on which the applicable security is then traded.

         "TRADING PRICE PER $1,000 PRINCIPAL AMOUNT OF SECURITIES" or "TRADING
PRICE" means, on any Trading Day, the average of the secondary market bid
quotations (expressed as Dollars per $1,000 Principal Amount of Securities)
obtained by the Trustee for $5,000,000 principal amount of Securities at
approximately 3:30 p.m., New York City time, on such Trading Day from three
independent nationally recognized securities dealers selected by the Company;
provided that if at least three such bids cannot reasonably be obtained by the
Trustee, but two 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, one
bid shall be used; and provided


                                       5
<PAGE>

further that if the Trustee cannot reasonably obtain at least one such bid, then
for purposes of evaluating the 95% Trading Exception, the Trading Price per
$1,000 Principal Amount of Securities for such Trading Day shall be deemed to be
less than 95% of the product of (i) the Exchange Rate in effect as of such
Trading Day and (ii) the Sale Price of the Common Shares on such Trading Day.

         "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.

         "U.S. PERSON" has the meaning specified in Regulation S.

         "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.

<TABLE>
<CAPTION>
                                                                                                 DEFINED
TERM                                                                                            IN SECTION
-----                                                                                           ----------
<S>                                                                                             <C>
"ADDITIONAL AMOUNTS".........................................................................         4.09
"ALTERNATIVE CONSIDERATION"..................................................................     11.05(b)
"APPLICABLE PRICE"...........................................................................     11.05(b)
"CASH".......................................................................................      3.08(a)
"CHANGE IN CONTROL"..........................................................................      3.09(f)
"CLEARSTREAM"................................................................................      2.06(c)
"COMPANY NOTICE".............................................................................      3.08(c)
"COMPANY NOTICE DATE"........................................................................      3.08(b)
"DEFAULTED CONTINGENT INTEREST"..............................................................        12.02
"DETERMINATION DATE".........................................................................     11.05(a)
"DISTRIBUTED SECURITIES".....................................................................     11.08(a)
"EFFECTIVE DATE".............................................................................     11.05(b)
"EUROCLEAR"..................................................................................      2.06(c)
"EVENT OF DEFAULT"...........................................................................         6.01
"EXCHANGE AGENT".............................................................................         2.03
"EXCHANGE DATE"..............................................................................        11.02
"EXCHANGE PRICE".............................................................................        11.01
"EXCHANGE PROPERTY"..........................................................................     11.14(b)
"EXCHANGE PROPERTY VALUE"....................................................................     11.14(c)
"EXCHANGE PROPERTY WEIGHTED AVERAGE PRICE"...................................................     11.14(c)
"EXCHANGE RATE"..............................................................................        11.01
</TABLE>


                                       6

<PAGE>

<TABLE>
<S>                                                                                             <C>
"EXCHANGE VALUE".............................................................................     11.05(a)
"EXCLUDED HOLDER"............................................................................         4.09
"EXPIRATION TIME"............................................................................     11.08(c)
"FUNDAMENTAL CHANGE PURCHASE PRICE"..........................................................      3.09(f)
"FUNDAMENTAL CHANGE REPURCHASE DATE".........................................................      3.09(a)
"FUNDAMENTAL CHANGE REPURCHASE NOTICE".......................................................      3.09(b)
"FUNDAMENTAL CHANGE REPURCHASE RIGHT"........................................................      3.09(a)
"GUARANTEE"..................................................................................     10.01(a)
"INDENTURE OBLIGATIONS"......................................................................     10.01(a)
"LAST ORIGINAL SECURITY MEASUREMENT DATE"....................................................        11.01
"MAKE-WHOLE PREMIUM".........................................................................     11.05(b)
"NET EXCHANGE PROPERTY AMOUNT"...............................................................     11.14(d)
"NET SHARE AMOUNT"...........................................................................     11.05(a)
"NET SHARES".................................................................................     11.05(a)
"95% TRADING EXCEPTION"......................................................................        11.01
"NOTICE OF DEFAULT"..........................................................................         6.01
"OFFER CONSIDERATION"........................................................................     11.08(c)
"PAYING AGENT"...............................................................................         2.03
"PRINCIPAL RETURN"...........................................................................     11.05(b)
"PURCHASE PRICE".............................................................................      3.08(a)
"PURCHASED SHARES"...........................................................................     11.08(c)
"PRINCIPAL RETURN"...........................................................................     11.05(a)
"REGISTRAR"..................................................................................         2.03
"REPURCHASE DATE"............................................................................      3.08(a)
"REPURCHASE NOTICE"..........................................................................      3.08(a)
"RESTRICTED SECURITIES"......................................................................      2.06(c)
"RESTRICTED SECURITY LEGEND".................................................................      2.06(c)
"SPECIAL CONTINGENT INTEREST RECORD DATE"....................................................        12.02
"STOCK PRICE CAP"............................................................................     11.05(b)
"STOCK PRICE THRESHOLD"......................................................................     11.05(b)
"TEN DAY WEIGHTED AVERAGE PRICE".............................................................     11.05(a)
"TERMINATION OF TRADING".....................................................................      3.09(f)
"TERRITORY"..................................................................................         4.09
"TRIGGER EVENT"..............................................................................        11.19
"VOLUME WEIGHTED AVERAGE PRICE"..............................................................     11.05(a)
</TABLE>

                  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.


                                       7
<PAGE>

         "Indenture Security Holder" means a Holder.

         "Indenture to be Qualified" means this Indenture.

         "Indenture Trustee" or "Institutional Trustee" means the Trustee.

         All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute r 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.

                                   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.


                                       8
<PAGE>

         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 amount of
outstanding Security 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, Redemption Price, Purchase Price, Fundamental Change
Purchase Price, Additional Amounts, if any, or Contingent Interest, 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 $700,000,000 upon a Company
Order without any further action by the Company, 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


                                       9
<PAGE>

foregoing, the aggregate principal amount of Securities that may be issued under
this Indenture shall not be limited.

         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 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 securities 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 securities 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 securities so held in trust. If the Company, the


                                       10
<PAGE>

Guarantor or an Affiliate of the Company or the Guarantor acts as Paying Agent,
it shall segregate the cash and securities 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 securities held by it to the Trustee and to account
for any funds and securities disbursed by it. Upon doing so, the Paying Agent
shall have no further liability for such cash or securities.

                  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 May 26 and November 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 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 of transfer or for
exchange into like Securities, repurchase, redemption 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.


                                       11
<PAGE>

                  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 for a period of 15 days next preceding the
mailing of notice of Securities to be redeemed, or (b) any Securities or
portions thereof selected or called for redemption, or (c) any Securities or
portion thereof surrendered for exchange pursuant to Article 11 hereof, or (d)
any Securities or portion thereof surrendered for repurchase or redemption (and
not withdrawn) pursuant to Section 3.08 or 3.09 hereof, respectively.

                  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. or to comply with any applicable law or any regulation 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 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 repurchase 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.


                                       12
<PAGE>

         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. Each Security in
global form, to the extent that it represents the interests of Non-U.S. Persons,
will be held by Cede & Co. for the accounts of designated agents on behalf of
the Euroclear System ("EUROCLEAR") and Clearstream Banking, Societe Anonyme
("CLEARSTREAM").

         If at any time the Depositary for 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 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
redeemed, exchanged pursuant to Article 11 hereof, canceled or repurchased 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, redeemed,
exchanged pursuant to Article 11 hereof, repurchased 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.


                                       13
<PAGE>

                  (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 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 HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U. S. PERSONS EXCEPT AS SET
FORTH IN THE FOLLOWING SENTENCE. THE HOLDER HEREOF AGREES THAT UNTIL THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED
HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION),
(1) IT WILL NOT RESELL OR OTHERWISE TRANSFER THE COMMON SHARES EVIDENCED HEREBY
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OF, U. S. PERSONS EXCEPT (A)
TO NABORS INDUSTRIES LTD. OR TO NABORS INDUSTRIES, INC. OR ANY SUBSIDIARY
THEREOF, (B) TO A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT), (C) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED
IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) THAT PRIOR TO SUCH
TRANSFER, FURNISHES TO EQUISERVE, AS TRANSFER AGENT (OR A SUCCESSOR TRANSFER
AGENT, AS APPLICABLE), A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE COMMON SHARES
EVIDENCED HEREBY THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRANSFER
AGENT OR A SUCCESSOR TRANSFER AGENT, AS APPLICABLE), (D) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (E) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE
TIME OF SUCH TRANSFER); (2) PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE 1(E) ABOVE), IT WILL FURNISH TO EQUISERVE, AS TRANSFER AGENT
(OR A SUCCESSOR TRANSFER AGENT, AS APPLICABLE), 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,
AND (3) IT WILL DELIVER TO EACH PERSON TO WHOM THE COMMON SHARES EVIDENCED
HEREBY ARE TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(E) ABOVE) A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED
UPON THE EARLIER OF THE TRANSFER OF THE COMMON SHARES EVIDENCED HEREBY PURSUANT
TO CLAUSE 1(E) ABOVE OR UPON ANY TRANSFER OF THE COMMON SHARES EVIDENCED HEREBY
AFTER THE EXPIRATION OF THE HOLDING PERIOD


                                       14
<PAGE>

APPLICABLE TO SALES OF THE SECURITIES EVIDENCED HEREBY UNDER RULE 144(k)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION). AS USED HEREIN, THE
TERMS "UNITED STATES" AND "U. S. PERSON" HAVE THE MEANING GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT.

         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 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
Trustee such security or indemnity as may be required by it 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 repurchased or
redeemed by the Company pursuant to


                                       15
<PAGE>

Article 3 hereof, or exchanged pursuant to Article 11 hereof, the Company in its
discretion may, instead of issuing a new Security, pay, repurchase or redeem
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
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 a Redemption Date, or on the Business Day following
a Repurchase Date or a Fundamental Change Repurchase 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


                                       16
<PAGE>

Securities shall cease to be outstanding and Additional Amounts, if any, and
Contingent Interest, if any, on such Securities shall cease to accrue; PROVIDED,
that, if such Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made.

         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
Additional Amounts, if any, and Contingent Interest, 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, redemption
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 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


                                       17
<PAGE>

Principal Amount, Redemption Price, Purchase Price, Fundamental Change Purchase
Price, Additional Amounts, if any, and Contingent Interest, 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, if so, the Trustee shall use CUSIP numbers in notices of
redemption as a convenience to Holders; PROVIDED, that any such notice may state
that no representation is made as to the correctness of such numbers either as
printed on the Securities or as contained in any notice of redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company will promptly notify the Trustee of any
change in the CUSIP numbers.

                                   ARTICLE 3.
                           REDEMPTION AND REPURCHASES

                  SECTION 3.01. RIGHT TO REDEEM; NOTICES TO TRUSTEE.

         The Company, at its option, may redeem the Securities in accordance
with the provisions of paragraphs 5 and 7 of the Securities. If the Company
elects to redeem Securities pursuant to paragraph 5 of the Securities, it shall
notify the Trustee in writing of the Redemption Date, the Principal Amount of
Securities to be redeemed and the Redemption Price. The Company shall give the
notice to the Trustee provided for in this Section 3.01 in the case of any
redemption of the Securities, at least 20 days before the Redemption Date unless
a shorter notice shall be satisfactory to the Trustee.

         The Company may, upon at least 30 days' notice given to the Holders, on
one or more occasions, elect to extend the period during which the Company
cannot redeem any of the Securities pursuant to paragraph 5 of the Securities.
Such extension period will be as designated in such notice of extension. Each
such election, once made, shall be irrevocable.

                  SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED.

         If less than all the Securities held in definitive form are to be
redeemed pursuant to Section 3.01, the Trustee shall select the definitive
Securities to be redeemed pro rata or by lot or by another method the Trustee
considers fair and appropriate (as long as such method is not prohibited by the
rules of any securities exchange or quotation system on which the Securities are
then listed or quoted). The Trustee shall make the selection at least 18 days,
but not more than 65 days, before the Redemption Date from outstanding
definitive Securities not previously called for redemption. The Trustee may
select for redemption portions of the Principal Amount of Securities that have
denominations larger than $1,000. Securities and portions of them the Trustee
selects shall be in Principal Amounts of $1,000 or an integral multiple of
$1,000. Except as expressly stated otherwise, provisions of this Indenture that
apply to definitive Securities


                                       18
<PAGE>

called for redemption also apply to portions of definitive Securities called for
redemption. The Trustee shall notify the Company promptly of the definitive
Securities or portions of definitive Securities to be redeemed.

         Any interest in a Security held in global form by and registered in the
name of the Depositary or its nominee to be redeemed in whole or in part will be
redeemed in accordance with the procedures of the Depositary.

         If any Security selected for partial redemption is exchanged in part
before termination of the exchange right with respect to the portion of the
Security so selected, the exchanged portion of such Security shall be deemed (so
far as may be) to be the portion selected for redemption. Securities which have
been exchanged during a selection of Securities to be redeemed may be treated by
the Trustee as outstanding for the purpose of such selection.

                  SECTION 3.03. NOTICE OF REDEMPTION.

         At least 15 days but not more than 60 days before a Redemption Date,
the Company shall mail a notice of redemption by first-class mail, postage
prepaid, to each Holder of Securities to be redeemed.

         The notice shall identify the Securities to be redeemed and shall
state:

                  (1)   the Redemption Date;

                  (2)   the Redemption Price;

                  (3)   the Exchange Rate;

                  (4)   the name and address of the Paying Agent and Exchange
                        Agent;

                  (5)   that Securities called for redemption may be exchanged
                        at any time before the close of business on the last
                        Trading Day prior to the Redemption Date;

                  (6)   that Holders who want to exchange Securities must
                        satisfy the requirements set forth in paragraph 9 of the
                        Securities;

                  (7)   that Securities called for redemption must be
                        surrendered to the Paying Agent to collect the
                        Redemption Price;

                  (8)   if fewer than all the outstanding Securities are to be
                        redeemed, the certificate numbers and Principal Amounts
                        of the particular Securities to be redeemed;

                  (9)   that Additional Amounts, if any, Contingent Interest, if
                        any, and overdue interest, if any, on Securities called
                        for redemption will cease to accrue on and after the
                        Redemption Date; and

                  (10)  the CUSIP number or numbers for the Securities called
                        for redemption.


                                       19

<PAGE>


The notice, if mailed in the manner herein provided, shall be conclusively
presumed to have been duly given, whether or not the Holder receives such
notice. In any case, failure to give such notice by mail or any defect in the
notice to the Holder of any Security designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any
other Security.

         At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense.

                  SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.

         Once notice of redemption is given, pursuant to Section 3.03 hereof,
Securities called for redemption become due and payable on the Redemption Date
and at the Redemption Price stated in the notice, together with Additional
Amounts, if any, accrued and unpaid Contingent Interest, if any, and overdue
interest, if any, except for Securities which are exchanged in accordance with
the terms of this Indenture; PROVIDED that if the Redemption Date falls after a
Contingent Interest Record Date and on or prior to the corresponding Contingent
Interest Payment Date, then the Contingent Interest payable on such Contingent
Interest Payment Date shall be paid to the holders of record of the Securities
on the applicable Contingent Interest Record Date instead of the holders
surrendering the Securities for redemption.

         Upon the later of the Redemption Date or the date such Securities are
surrendered to the Paying Agent, such Securities shall be paid at the Redemption
Price stated in the notice.

                  SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.

         By 10 a.m., New York City time, on the Redemption Date, the Company
shall deposit with the Paying Agent (or if the Company or an Affiliate of the
Company is the Paying Agent, shall segregate and hold in trust) cash sufficient
to pay the Redemption Price of all Securities to be redeemed on that date other
than Securities or portions of Securities called for redemption which prior
thereto have been delivered by the Company to the Trustee for cancellation or
have been exchanged pursuant to Article 11 hereof, together with Additional
Amounts, if any, accrued and unpaid Contingent Interest, if any, and overdue
interest, if any, subject to the proviso at the end of Section 3.04. On or after
the Redemption Date (unless the Company shall default in the payment of the
Securities at the Redemption Price), Additional Amounts, if any, Contingent
Interest, if any, and overdue interest, if any, on the Securities or portion of
Securities called for redemption shall cease to accrue and such Securities shall
cease after the close of business on the Trading Day immediately preceding the
Redemption Date to be exchangeable pursuant to Article 11 hereof and, except as
provided in Section 8.02 hereof, to be entitled to any benefit or security under
this Indenture, and the Holders thereof shall have no right in respect of such
Securities except the right to receive the Redemption Price, and accrued and
unpaid Contingent Interest, if any, Additional Amounts, if any, and overdue
interest, if any, to (but excluding) the Redemption Date. The Paying Agent shall
as promptly as practicable return to the Company any money, with interest, if
any, thereon, not required for that purpose because of exchange of Securities.
If such money is then held by the Company in trust and is not required for such
purpose, it shall be discharged from such trust.


                                       20
<PAGE>

                  SECTION 3.06. SECURITIES REDEEMED IN PART.

         Upon surrender of a Security that is redeemed 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
unredeemed portion of the Security surrendered.

                  SECTION 3.07. [RESERVED]

                  SECTION 3.08. REPURCHASE OF SECURITIES AT OPTION OF THE
                                HOLDER.

                  (a) GENERAL. Securities shall be repurchased by the Company in
U.S. legal tender ("CASH") pursuant to paragraph 6 of the Securities as of June
15, 2008, June 15, 2013 and June 15, 2018 (each, a "REPURCHASE DATE"), at the
purchase price specified therein (the "PURCHASE PRICE"), together with accrued
and unpaid Contingent Interest, if any, Additional Amounts, if any, and overdue
interest, if any, at the option of the Holder thereof, upon:

                           (1) delivery to the Paying Agent by the Holder of a
         written notice of purchase (a "REPURCHASE NOTICE") at any time from the
         opening of business on the date that is 20 Business Days prior to a
         Repurchase Date until the close of business on such Repurchase Date,
         stating:

                      (A) the certificate number of any Security in certificated
form which the Holder will deliver to be repurchased;

                      (B) the portion of the Principal Amount of the Security
which the Holder will deliver to be repurchased, which portion must be $1,000 in
Principal Amount or a multiple thereof; and

                      (C) that such Security shall be repurchased as of the
Repurchase Date pursuant to the terms and conditions specified in paragraph 6 of
the Securities and in this Indenture, and

                           (2) delivery of such Security to the Paying Agent
         prior to, on or after the Repurchase Date (together with all necessary
         endorsements) at the offices of the Paying Agent, such delivery being a
         condition to receipt by the Holder of the Purchase Price therefor;
         PROVIDED, HOWEVER, that such Purchase Price shall be so paid pursuant
         to this Section 3.08 only if the Security so delivered to the Paying
         Agent shall conform in all respects to the description thereof in the
         related Repurchase Notice.

         The Company shall purchase from the Holder thereof, pursuant to this
Section 3.08, a portion of a Security if the Principal Amount of such portion is
$1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the purchase of all of a Security also apply to the repurchase of such
portion of such Security.

         Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.08 shall be consummated by the delivery of the consideration to
be received by the Holder promptly following the later of the Repurchase Date
and the time of delivery of the Security.


                                       21
<PAGE>


         Notwithstanding anything herein to the contrary, any Holder delivering
to the Paying Agent the Repurchase Notice contemplated by this Section 3.08(a)
shall have the right at any time prior to the close of business on the
Repurchase Date to withdraw such Repurchase Notice by delivery of a written
notice of withdrawal to the Paying Agent in accordance with Section 3.10 hereof.

         The Paying Agent shall promptly notify the Company of the receipt by it
of any Repurchase Notice or written notice of withdrawal thereof.

                  (b) REPURCHASE WITH CASH. The Purchase Price of Securities in
respect of which a Repurchase Notice pursuant to Section 3.08(a) has been given
shall be paid by the Company with cash equal to the aggregate Purchase Price of
such Securities. The Company Notice as provided in Section 3.08(c) shall be sent
to Holders (and to beneficial owners as required by applicable law) not less
than 20 Business Days (the "COMPANY NOTICE DATE") prior to the Repurchase Date.

                  (c) COMPANY NOTICE. The Company's notices shall be sent to the
Holders (and to beneficial owners as required by applicable law) in the manner
provided in Section 13.02 hereof at the time specified in Section 3.08(b) hereof
(each, a "COMPANY NOTICE"). Such Company Notices shall include a form of
Repurchase Notice to be completed by a Holder and shall state:

                           (i) the Purchase Price and Exchange Rate;

                           (ii) the name and address of the Paying Agent and the
Exchange Agent;

                           (iii) that Securities as to which a Repurchase Notice
has been given may be exchanged only if the applicable Repurchase Notice has
been withdrawn in accordance with the terms of this Indenture;

                           (iv) that Securities must be surrendered to the
Paying Agent to collect payment;

                           (v) that the Purchase Price for any Security as to
which a Repurchase Notice has been given and not withdrawn will be paid promptly
following the later of the Repurchase Date and the time of surrender of such
Security as described in clause (iv) above;

                           (vi) the procedures the Holder must follow under this
Section 3.08;

                           (vii) briefly, the exchange rights of the Securities;
and

                           (viii) the procedures for withdrawing a Repurchase
Notice.

         At the Company's request, the Trustee shall give the Company Notice in
the Company's name and at the Company's expense; PROVIDED, HOWEVER, that, in all
cases, the text of the Company Notice shall be prepared by the Company.


                                       22
<PAGE>

                  (d) PROCEDURE UPON PURCHASE. At or before 10:00 a.m., New York
City time, on the Business Day following the Repurchase Date, the Company shall
deposit with the Paying Agent cash sufficient to pay the aggregate Purchase
Price in respect of the Securities to be repurchased pursuant to this Section
3.08, plus accrued and unpaid Contingent Interest, if any, Additional Amounts,
if any, and overdue interest, if any, to (but excluding) the Repurchase Date.

                  SECTION 3.09. REPURCHASE AT OPTION OF THE HOLDER UPON A
                                FUNDAMENTAL CHANGE.

                  (a) In the event any Fundamental Change (as defined below)
shall occur, each Holder of Securities shall have the right (the "FUNDAMENTAL
CHANGE REPURCHASE RIGHT"), at the Holder's option, to require the Company to
repurchase 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 "FUNDAMENTAL CHANGE REPURCHASE DATE"), which Fundamental Change
Repurchase Date shall be no later than 35 Trading Days and no earlier than 20
Trading Days after the date the Fundamental Change Repurchase Notice (as defined
below) is mailed in accordance with Section 3.09(b) and in no event prior to the
date on which the Fundamental Change occurs, at a price payable in cash (the
"FUNDAMENTAL CHANGE PURCHASE PRICE") equal to the Principal Amount plus accrued
and unpaid Contingent Interest, if any, Additional Amounts, if any, and overdue
interest, if any, to, but excluding, the Fundamental Change Repurchase Date;
PROVIDED that if such Fundamental Change Repurchase Date falls after a
Contingent Interest Record Date and on or prior to the corresponding Contingent
Interest Payment Date, then the Contingent Interest payable on such Contingent
Interest Payment Date shall be paid to the holders of record of the Securities
on the applicable Contingent Interest Record Date instead of the holders
surrendering the Securities for repurchase.

                  (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 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 "FUNDAMENTAL CHANGE REPURCHASE NOTICE") of the occurrence
of a Fundamental Change and of the repurchase right arising as a result thereof
on or before the 30th day after the occurrence of such Fundamental Change. The
Company shall deliver a copy of the Fundamental Change Repurchase Notice to the
Trustee.

         Each Fundamental Change Repurchase Notice shall state:

                           (i)    the events causing the Fundamental Change;

                           (ii)   the date of such Fundamental Change;

                           (iii)  the Fundamental Change Repurchase Date;

                           (iv)   the last date on which a Holder may exercise
                                  its Fundamental Change Repurchase Right
                                  pursuant to this Section 3.09;

                           (v)    the Fundamental Change Purchase Price;


                                       23
<PAGE>

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

                           (vii)  a description of the procedures which a Holder
                                  must follow to exercise its Fundamental Change
                                  Repurchase Right;

                           (viii) the following additional information with
                                  respect to a Holder's right to exchange the
                                  Securities pursuant to Article 11 hereof:

                                       (A) the Exchange Rate and any adjustments
                                       to the Exchange Rate that will result
                                       from the Fundamental Change;

                                       (B) the Make-Whole Premium, if any,
                                       payable pursuant to Section 11.05(b)
                                       hereof if a Holder exchanges the
                                       Securities following such Fundamental
                                       Change and whether such Make-Whole
                                       Premium will be payable in cash, Common
                                       Shares or Alternative Consideration or a
                                       combination thereof; and

                                       (C) if a Make-Whole Premium is payable by
                                       the Company pursuant to Section 11.05
                                       hereof, that a Make-Whole Premium shall
                                       be paid by the Company on the Fundamental
                                       Change Repurchase Date to Holders of
                                       Securities who have exchanged their
                                       Securities during the period beginning on
                                       (and including) the date on which the
                                       Company gives the Fundamental Change
                                       Repurchase Notice pursuant to this
                                       Section 3.09(b) and ending on (and
                                       including) the Fundamental Change
                                       Repurchase Date;

                           (ix)   that Securities with respect to which an
                                  Option to Elect Repurchase Upon a Fundamental
                                  Change is given by a Holder may be exchanged
                                  pursuant to Article 11 only if such Option to
                                  Elect Repurchase Upon a Fundamental Change has
                                  been withdrawn in accordance with Section
                                  3.10; and

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

         No failure of the Company to give a Fundamental Change Notice shall
limit any Holder's right to exercise a Fundamental Change Repurchase Right.


                                       24
<PAGE>

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

                  (d) [Reserved].

                  (e) [Reserved].

                  SECTION 3.10. EFFECT OF REPURCHASE NOTICE OR FUNDAMENTAL
                                CHANGE REPURCHASE NOTICE.

         Upon receipt by the Company of the Repurchase Notice or Option to Elect
Repurchase Upon a Fundamental Change specified in Section 3.08(a) hereof or
Section 3.09(c) hereof, as applicable, the Holder of the Security in respect of
which such Repurchase Notice or Option to Elect Repurchase Upon a Fundamental
Change, as the case may be, was given shall (unless such Repurchase Notice or
Option to Elect Repurchase Upon a Fundamental Change is withdrawn as specified
in the following two paragraphs) thereafter be entitled to receive solely the
Purchase Price or Fundamental Change Purchase Price, as the case may be, with
respect to such Security, including accrued and unpaid Contingent Interest, if
any, Additional Amounts, if any, and overdue interest, if any. Such Purchase
Price or Fundamental Change Purchase Price, including accrued and unpaid
Contingent Interest, if any, Additional Amounts, if any, and overdue interest,
if any, subject to the proviso at the end of Section 3.09(a), shall be paid to
such Holder promptly following the later of (x) the Repurchase Date or the
Fundamental Change Repurchase Date, as the case may be, with respect to such
Security (provided the conditions in Section 3.08(a) hereof or Section 3.09(c)
hereof, as applicable, 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 3.08(a) hereof or Section 3.09(c) hereof, as applicable. Securities in
respect of which a Repurchase Notice or Option to Elect Repurchase Upon a
Fundamental Change, as the case may be, has been given by the Holder thereof may
not be exchanged pursuant to Article 11 hereof on or after the date of the
delivery of such Repurchase Notice (or Option to Elect Repurchase Upon a
Fundamental Change, as the case may be), unless such Repurchase Notice (or
Option to Elect Repurchase Upon a Fundamental Change, as the case may be) has
first been validly withdrawn as specified in the following two paragraphs.

         A Repurchase Notice or Option to Elect Repurchase Upon a Fundamental
Change, as the case may be, 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 Repurchase Date or the Fundamental Change Repurchase
Date, as the case may be, to which it relates specifying:

                  (1) the name of the Holder,

                  (2) a statement that the Holder is withdrawing its election to
require the Company to repurchase its Securities,


                                       25
<PAGE>

                  (3) the certificate number of any certificated Security in
respect of which such notice of withdrawal is being submitted,

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

                  (5) the Principal Amount, if any, of such Security which
remains subject to the original Repurchase Notice or Option to Elect Repurchase
Upon a Fundamental Change, as the case may be, and which has been or will be
delivered for purchase or redemption by the Company.

         There shall be no repurchase of any Securities pursuant to Section 3.08
hereof or repurchase pursuant to Section 3.09 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 Repurchase Notice or Option to Elect Repurchase Upon
a Fundamental Change, as the case may be) and is continuing an Event of Default
(other than a default in the payment of the Purchase Price or Fundamental Change
Purchase Price, as the case may be, with respect to such Securities).

                  SECTION 3.11. DEPOSIT OF PURCHASE PRICE OR FUNDAMENTAL CHANGE
                                PURCHASE PRICE.

         At or before 10 a.m., New York City time, on the Business Day following
a Repurchase Date or a Fundamental Change Repurchase Date, as the case may be,
the Company shall deposit with the Trustee or with the Paying Agent (or, if the
Company or 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 Purchase Price or Fundamental Change
Purchase Price, as the case may be, of all the Securities or portions thereof
which are to be purchased as of such Repurchase Date or Fundamental Change
Repurchase Date, as the case may be, including accrued and unpaid Contingent
Interest, if any, and Additional Amounts, if any, and overdue interest, if any.

                  SECTION 3.12. SECURITIES REPURCHASED IN PART.

         Any Security that is to be repurchased only in part shall be
surrendered at the office of the Paying Agent (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing) and the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
such Security, without service charge, 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 repurchased.

                  SECTION 3.13. COVENANT TO COMPLY WITH SECURITIES LAWS UPON
                                REPURCHASE OF SECURITIES.

         In connection with any repurchase of Securities under Section 3.08 or
3.09 hereof, the Company shall (i) comply with Rule 13e-4 (which term, as used
herein, includes any successor provision thereto) under the Exchange Act, if
applicable, (ii) file the related Schedule 13E-4 (or


                                       26
<PAGE>

any successor schedule, form or report) under the Exchange Act, if applicable,
and (iii) otherwise comply with all Federal and state securities laws so as to
permit the rights and obligations under Sections 3.08 and 3.09 to be exercised
in the time and in the manner specified in Sections 3.08 and 3.09.

                  SECTION 3.14. REPAYMENT TO THE COMPANY.

         The Trustee and the Paying Agent shall return to the Company any cash
that remains unclaimed as provided in paragraph 14 of the Securities, together
with interest, if any, thereon, held by them for the payment of a Purchase Price
or Fundamental Change Purchase Price, as the case may be, including Contingent
Interest, if any, and Additional Amounts, if any; PROVIDED, HOWEVER, that to the
extent that the aggregate amount of cash deposited by the Company pursuant to
Section 3.11 hereof exceeds the aggregate Purchase Price or Fundamental Change
Purchase Price, as the case may be, of the Securities or portions thereof which
the Company is obligated to repurchase as of the Repurchase Date or Fundamental
Change Repurchase Date, as the case may be, including Contingent Interest, if
any, and Additional Amounts, if any, then promptly after the Business Day
following the Repurchase Date or Fundamental Change Repurchase Date, as the case
may be, 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, Redemption Price,
Purchase Price, Fundamental Change Purchase Price, Contingent Interest, if any,
and Additional Amounts, if any, shall be considered paid on the applicable date
due or, in the case of a Purchase Price or Fundamental Change Purchase Price, on
the Business Day following the applicable Repurchase Date or Fundamental Change
Repurchase Date, as the case may be, 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.


                                       27
<PAGE>

                  SECTION 4.02. FINANCIAL INFORMATION; SEC REPORTS.

         The Guarantor will deliver to the Trustee (a) as soon as available and
in any event within 120 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
60 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 (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.


                                       28
<PAGE>

         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,
exchange, purchase, redemption or exchange and where notices and demands to or
upon the Company in respect of the Securities and this Indenture may be served.
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 J.P. Morgan Institutional Trust
Services, GIS Unit Trust Window, 4 New York Plaza, 1st Floor, New York, New York
10004, 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]


                                       29
<PAGE>

                  SECTION 4.08. REGISTRATION RIGHTS.

         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 ANNEX I hereto) are entitled to the
benefits of the terms and conditions set forth on ANNEX I hereto. By acceptance
of any interest in a Security, each Holder consents and agrees for the benefit
of the Company and the Guarantor to comply with the terms and conditions of
ANNEX I hereto.

                  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 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


                                       30
<PAGE>

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, redemption
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, Redemption Price,
Purchase Price, Fundamental Change Purchase Price, Contingent Interest, if any,
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 of 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. 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.


                                       31
<PAGE>

                  SECTION 4.10. CONTINGENT DEBT TAX TREATMENT.

         The Company agrees, and by acceptance of a Security or beneficial
interest in a Security, each Holder and beneficial holder of the Security is
deemed to have agreed, with respect to each of the matters set forth in (a) and
(b) below, as follows:

                                    (a) Tax Treatment:

                           (i) to treat the Securities as indebtedness of the
Company for all tax purposes;

                           (ii) to treat the Securities as indebtedness that is
subject to the special regulations governing contingent payment debt instruments
that are contained in U.S. Treasury Regulation section 1.1275-4; and

                           (iii) to treat any payment to and receipt by a holder
of Common Shares upon exchange of a Security as a contingent payment that may
result in an adjustment under U.S. Treasury Regulation section 1.1275-4(b).

                                    (b) Comparable Yield and Projected Payment
         Schedule. Solely for purposes of applying U.S. Treasury Regulation
         section 1.1275-4 to the Securities:

                           (i) for United States Federal Income Tax purposes,
the Company shall accrue interest with respect to outstanding Securities as Tax
Original Issue Discount according to the "noncontingent bond method," as set
forth in U.S. Treasury Regulation section 1.1275-4(b);

                           (ii) the Company has determined that the comparable
yield as defined in U.S. Treasury Regulation section 1.1275-4(b)(4)(i), for the
Securities is 5.53%, compounded semiannually;

                           (iii) the Company has determined that the projected
payment schedule, as defined in U.S. Treasury Regulation section
1.1275-4(b)(ii), for the Securities consists of the projected payment schedule
referred to in (v) below;

                           (iv) the Company acknowledges and agrees, and each
Holder and any beneficial holder of Securities, by its acceptance of a Security
or beneficial interest in a Security, shall be deemed to acknowledge and agree
that (A) the projected payment schedule is determined on a basis of an
assumption of linear growth of stock price, (B) the comparable yield and the
projected payment schedule are not determined for any purpose other than for the
purpose of applying U.S. Treasury Regulation section 1.1275-4(b) to the
Securities and (C) the comparable yield and the projected payment schedule do
not constitute a projection or representation regarding the actual amounts
payable on the Securities; and

                           (v) the projected payment schedule, as defined in
U.S. Treasury Regulation section 1.1275-4(b)(4)(ii), for the Securities is set
forth in EXHIBIT B hereto.


                                       32
<PAGE>

                  SECTION 4.11. CALCULATION OF TAX ORIGINAL ISSUE DISCOUNT.

         The Company shall file with the Trustee promptly at the end of each
calendar year (i) a written notice specifying the amount of Tax Original Issue
Discount (including daily rates and accrual periods) accrued on outstanding
Securities as of the end of such year and (ii) such other specific information
relating to such Tax Original Issue Discount as may then be relevant under the
Internal Revenue Code of 1986, as amended from time to time.

                                   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:

                           (i) 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, Redemption Price, Purchase Price, Fundamental
Change Purchase Price, Make-Whole Premium, if any, Contingent Interest, if any,
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;

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

                           (iii) 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:

                           (i) 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;


                                       33
<PAGE>

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

                           (iii) 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,
Redemption Price, Purchase Price or a Fundamental Change Purchase Price on any
Security when the same becomes due and payable at its Stated Maturity, upon
redemption, upon declaration, when due for repurchase by the Company or
otherwise, and such default continues for a period of ten days;

                  (2) there is a default in the payment of Contingent Interest,
if any, Additional Amounts, if any, or a Make-Whole Premium, 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 the provisions of Section 11.02 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 those set forth in
Section 4.08 and ANNEX I hereof) and such failure continues for 90 days after
receipt by the Company of a Notice of Default;

                  (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


                                       34
<PAGE>

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.

                  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, Make-Whole Premium, if any, Contingent
Interest, if any, 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 and Contingent Interest, if any, 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 and Contingent Interest, if any, 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


                                       35
<PAGE>

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.

                  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;


                                       36
<PAGE>

                  (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, Redemption Price, Purchase
Price, Fundamental Change Purchase Price, Contingent Interest, if any,
Additional Amounts, if any, overdue interest, if any, and Make-Whole Premium, 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.

                  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, Redemption Price, Purchase Price, Fundamental Change Purchase
Price, Contingent Interest, if any, Additional Amounts, if any, or overdue
interest, 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:

                  (a) to file and prove a claim for the whole amount of the
Principal Amount, Redemption Price, Purchase Price, Fundamental Change Purchase
Price, Contingent Interest, if any, Additional Amounts, if any, or overdue
interest, 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


                                       37
<PAGE>

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

                  (b) 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;

         SECOND: to Holders for amounts due and unpaid on the Securities for the
Principal Amount, Redemption Price, Purchase Price, Fundamental Change Purchase
Price, Contingent Interest, if any, or Additional Amounts, if any, or overdue
interest, 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


                                       38
<PAGE>

payment of the Principal Amount, Redemption Price, Purchase Price, Fundamental
Change Purchase Price, Contingent Interest, if any, 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, Redemption Price, Purchase Price or Fundamental Change Purchase Price in
respect of Securities, Contingent Interest, if any, or Additional Amounts, if
any, or any overdue interest 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 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.


                                       39
<PAGE>

                  (c) The Trustee may not be relieved from liability for its own
negligent action, its own 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.

                  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.


                                       40
<PAGE>

                  (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 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.


                                       41
<PAGE>

                  (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 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.


                                       42
<PAGE>

                  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 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, Redemption Price, Purchase Price, Fundamental Change Purchase Price,
Contingent Interest, if any, 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.


                                       43
<PAGE>

                  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 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.


                                       44
<PAGE>

                  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.

                                   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.


                                       45
<PAGE>

                  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;

                  (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.


                                       46
<PAGE>

                  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 Contingent Interest, if any, 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 Contingent
Interest, if any, 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 Redemption Price, Purchase Price or Fundamental
Change Purchase Price of any Security;

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

                  (6) reduce the Make-Whole Premium;

                  (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; or

                  (9) make any change that adversely affects the right of
Holders to require the Company to repurchase the Securities, or the right to
require the Company to repurchase the Securities upon a Fundamental Change, 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.


                                       47
<PAGE>

                  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.

                  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


                                       48
<PAGE>

payment of the principal of, Additional Amounts, if any, and Contingent
Interest, 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, Make-Whole Premium, if any,
Additional Amounts, if any, Contingent Interest, if any, and such other amounts
shall become due and payable, whether at the Stated Maturity, upon redemption or
repurchase 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, Make-Whole Premium, if any, Additional Amounts, if any, or
Contingent Interest, 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 redemption or repurchase or by declaration of acceleration or
otherwise, legal proceedings may be instituted by the Trustee 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


                                       49
<PAGE>
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 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.

                                       50
<PAGE>

                  (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.

                                   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 prior to the close
of business on the Business Day immediately preceding June 15, 2023 (unless
earlier redeemed or repurchased), but 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 paragraph 9 in the
Securities, subject to adjustment as herein set forth. The "EXCHANGE PRICE" in
effect at any time shall be equal to $1,000 divided by the Exchange Rate.

                                       51
<PAGE>
         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 only during the period specified
in paragraph 9 of the Securities and only:

                  (i) (A) during any calendar quarter of the Company ending
prior to July 1, 2008, for which the Sale Price of the Common Shares exceeded
120% of the Exchange Price for at least 20 Trading Days in the 30 consecutive
Trading Day period ending on the last Trading Day of the preceding calendar
quarter or (B) during any calendar quarter of the Company beginning on or after
July 1, 2008, for which the Sale Price of the Common Shares exceeded 110% of the
Exchange Price for at least 20 Trading Days in the 30 consecutive Trading Day
period ending on the last Trading Day of the preceding calendar quarter (it
being understood for purposes of this Section 11.01 that the Exchange Price in
effect at the close of business on each of the 30 consecutive Trading Days shall
be used);

                  (ii) as described below after the occurrence of the 95%
Trading Exception;

                  (iii) if such Security has been called for redemption, at any
time on or after the date the notice of redemption has been given until the
close of business on the Business Day immediately preceding the Redemption Date;
or

                  (iv) as described below after the occurrence of any of the
specified corporate transactions described below.

         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 clause
(i) 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.

         If the Issue Date occurs during a calendar quarter in which the
Original Securities are exchangeable pursuant to the first clause (i)(A) in
Section 11.01 of the Original Indenture, then the Securities shall be
exchangeable pursuant to clause (i)(A) above for the remainder of such calendar
quarter. If the Issue Date occurs during the 30 consecutive Trading Day period
ending on the last Trading Day of any calendar quarter, each Trading Day
occurring during such 30 Trading Day period and on or prior to the Issue Date
shall be considered in determining whether the condition for exchangeability set
forth in clause (i)(A) above has been met.

Exchange after the Occurrence of the 95% Trading Exception.

         Securities may be surrendered for exchange during the five Business Day
period (but only to the extent such five Business Day period occurs during the
period specified in paragraph 9 of the Securities) immediately after any ten
consecutive Trading Day period in which the

                                       52
<PAGE>
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 Exchange Rate as of such Trading Day (the
"95% TRADING EXCEPTION"); PROVIDED, HOWEVER, Securities may not be surrendered
for exchange pursuant to the 95% Trading Exception and such exchange privilege
shall not apply if the average of the Sale Prices of the Common Shares for such
ten consecutive Trading Day period is greater than (x) the then applicable
Exchange Price but less than (y) (i) 120% of such Exchange Price until June 15,
2008, or (ii) 110% of such Exchange Price from and after June 15, 2008.

         If the Issue Date occurs during a period in which the Original
Securities are exchangeable into pursuant to the paragraph following the heading
"Exchange after the Occurrence of the 95% Trading Exception" in Section 11.01 of
the Original Indenture, then the Securities shall be exchangeable pursuant to
the preceding paragraph for the remainder of the five Business Day period during
which the Original Securities would have been exchangeable pursuant to the
paragraph following the heading "Exchange after the Occurrence of the 95%
Trading Exception" in Section 11.01 of the Original Indenture had they not been
exchanged for Securities on the Issue Date. If the Trading Price per $ 1,000
Principal Amount of Original Securities on the Trading Day prior to the Issue
Date (the "LAST ORIGINAL SECURITY MEASUREMENT DAY") was less than ninety-five
percent (95%) of the product of Sale Price and the Exchange Rate in effect on
such Trading Day, then the Last Original Security Measurement Day, and any of
the four previous Trading Days on which the Trading Price per $1,000 Principal
Amount of Original Securities was less than ninety-five percent (95%) of the
product of Sale Price and the Exchange Rate in effect on such Trading Day, will
be deemed to be Trading Days on which the Trading Price per $1,000 principal
amount of the Securities was less than ninety-five percent (95%) of the product
of the Sale Price and the then current Exchange Rate for purposes of determining
whether the condition for exchangeability set forth in the preceding paragraph
has been met.

         In connection with any exchange pursuant to the 95% Trading Exception,
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.

Exchange after the Occurrence of Specified Corporation Transactions.

         If:

                  (i) (A) the Guarantor distributes to all holders of its Common
Shares 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


                                       53
<PAGE>

the Guarantor, or (B) the Guarantor distributes to all holders of its Common
Shares, 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 date such distribution is first
publicly announced by the Guarantor, then, 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 (but only to the extent such period
occurs during the period specified in paragraph 9 of the Securities); 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

                  (ii) the Guarantor proposes to engage in a transaction
described in clause (ii) of the first sentence of Section 11.14 hereof that is
not a Fundamental Change, then the Securities may be surrendered for exchange,
if during the period specified in paragraph 9 of the Securities, at any time
from and after the date 15 days prior to the 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 11.14 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

                  (iii) a Fundamental Change 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 Fundamental Change Repurchase
Notice pursuant to Section 3.09(b) hereof and ending on and including the
Fundamental Change Repurchase Date for such Fundamental Change.

                  SECTION 11.02. EXCHANGE PROCEDURE.

         To exchange a Security a Holder must satisfy the requirements in
paragraph 9 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 (i) cash in the
amount of Principal Return (as hereinafter provided), (ii) at the Company's
option (A) cash in the Net Share Amount, if any, (B) certificate(s) for the
number of Net Shares issuable upon exchange, as provided in paragraph 9 of the
Securities, if any, or (C) as provided pursuant to Section 11.05(a)(2), a
combination of cash and certificate(s) for the number of Net Shares issuable
upon exchange, as provided in paragraph 9 of the Securities, if any, and (iii)
that amount of cash payable, if any, in 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.

                                       54
<PAGE>
         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 Contingent Interest, if any, and Additional Amounts, if
any, to the Exchange Date with respect to the exchanged Security shall be deemed
to be canceled, extinguished and forfeited, through delivery of the Principal
Return and, if applicable, cash in the Net Share Amount or Net 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.

         If a Holder exchanges more than one Security at the same time, the
Principal Return and, if applicable, cash in the Net Share Amount or Net Shares
issuable 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 or in connection with payment of the Make-Whole Premium. Instead the
Company will deliver cash for the current market value of the fractional share.
The current market value of a fractional share shall be determined to the
nearest 1/10,000th of a share by multiplying the last reported Sale Price of the
Common Shares on the last Trading Day prior to the Exchange Date (or the Trading
Day immediately preceding the relevant Fundamental Change Repurchase Date in the
case of the Make-Whole Premium) by the fractional amount and rounding the
product to the nearest whole cent.

                  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.

         (a) Subject to certain exceptions described in Section 11.05(b) and
except as provided below, Holders surrendering Securities for exchange will be
entitled to receive, per

                                       55
<PAGE>
$1,000 principal amount of Securities, cash and, if applicable, Common Shares,
the aggregate value of which (the "EXCHANGE VALUE") will be equal to the product
of:

                  (i) the Exchange Rate then in effect; and

                  (ii) the average of the daily Volume Weighted Average Price
(as defined below) of Common Shares for each of the ten consecutive Trading Days
(appropriately adjusted to take into account the occurrence during such period
of stock splits, stock dividends and similar events) beginning on the second
Trading Day immediately following the day the Securities are surrendered for
exchange (the "Ten Day Weighted Average Price"). The "Volume Weighted Average
Price" per Common Share on any Trading Day will be the volume weighted average
price on the AMEX or, if the Common Shares are not listed on the AMEX, on the
principal exchange or over-the-counter market on which the Common Shares are
then listed or traded, from 9:30 a.m. to 4:00 p.m. (New York City time) on that
Trading Day as displayed by Bloomberg (or if such volume weighted average price
is not available, the market value of one share on such Trading Day as the
Company determines in good faith using a volume weighted method).

The Exchange Value of the Securities exchanged will be paid and delivered to the
exchanging Holders as follows:

                           (1) a cash amount (the "Principal Return") equal to
the lesser of (i) the aggregate Exchange Value of the Securities to be exchanged
or (ii) the aggregate Principal Amount of the Securities to be exchanged;

                           (2) if the aggregate Exchange Value of the Securities
to be exchanged is greater than the Principal Return, an amount, payable at the
option of the Company in (i) cash, (ii) whole shares ("Net Shares"), determined
as set forth below, or (iii) a combination of cash and Net Shares, determined as
set forth below, equal to such aggregate Exchange Value less the Principal
Return (the "Net Share amount"); and

                           (3) if the Company elects to pay any portion of the
Net Share Amount in Net Shares pursuant to Section 11.05(a)(2), an amount in
cash in lieu of any fractional Common Shares determined as provided in Section
11.03 hereof.

         The number of Net Shares to be paid will be determined by dividing (x)
the Net Share Amount, minus any cash paid in respect of the Net Share Amount, by
(y) the relevant Ten Day Weighted Average Price.

         The Exchange Value, Principal Return, Net Share Amount and the number
of Net Shares will be determined by the Company at the end of the ten
consecutive Trading Day period beginning on the second Trading Day immediately
following the day the Securities are surrendered for exchange (the
"Determination Date").

         (b) In the event a Fundamental Change occurs prior to June 15, 2008,
and a Holder surrenders the Securities for exchange pursuant to Section 11.01
hereof during the period

                                       56
<PAGE>
beginning on the date on which the Company issued the Fundamental Change
Repurchase Notice pursuant to Section 3.09(b) hereof and ending on the
Fundamental Change Repurchase Date in connection with such Fundamental Change,
to the extent required pursuant to this Article 11, the Holder will receive, in
addition to the payment of the Exchange Value of the Securities as provided in
Section 11.05(a), a Make-Whole Premium, if any, as described below. The
Make-Whole Premium payable to a Holder may be paid, at the Company's option, in
(i) cash, (ii) Common Shares, or (iii) the same form of consideration which the
Common Shares are exchanged for, converted into, acquired for or constitutes
solely the right to receive, as a result of the transaction or transactions
constituting the Fundamental Change, assuming that the holder of such Common
Shares would not have exercised any rights of election that such would have as a
holder of Common Shares to select a particular form of consideration (the
"ALTERNATIVE CONSIDERATION"), or in any combination of cash, Common Shares or
Alternative Consideration. The Make-Whole Premium shall be paid on the Business
Day immediately following the relevant Fundamental Change Repurchase Date.

         If the Company elects to pay the Make-Whole Premium in whole or in part
in Common Shares, the value of its Common Shares to be delivered in respect of
the Make-Whole Premium shall be deemed to be equal to 98% of the average Sale
Price of the Common Shares over the ten Trading Day period ending on the Trading
Day immediately preceding the Fundamental Change Repurchase Date.
Notwithstanding the foregoing, in no event shall the value of each Common Share
be deemed to be equal to less than 50% of the Applicable Price used to determine
the amount of the Make-Whole Premium. If the Company elects to pay the
Make-Whole Premium in whole or in part in Common Shares, the Company shall not
issue any fractional shares but shall instead pay an amount in cash in lieu of
any fractional Common Share determined as provided in Section 11.03 hereof.

         If the Company elects to pay the Make-Whole Premium in whole or in part
in Alternative Consideration, such Alternative Consideration shall be valued as
follows:

                  (i) if all or a portion of such Alternative Consideration
consists of securities that are traded on a U.S. national securities exchange or
approved for quotation on the Nasdaq National Market or any similar system of
automated dissemination of quotations of securities prices, such securities
shall have a value equal to the average of the closing price or last sale price,
as applicable, for the 10 consecutive Trading Days ending on, and excluding, the
Trading Day immediately preceding the Fundamental Change Repurchase Date;

                  (ii) if all or a portion of such Alternative Consideration
consists of securities (other than securities referred to in the immediately
preceding clause (i)), assets or property (other than cash), such securities,
assets or property shall be valued based on 98.0% of the average of the fair
market value of such securities, assets or property, as determined by two
independent, nationally recognized investment banks selected by the Trustee; and

                  (iii) if all or a portion of such Alternative Consideration
consists of cash, 100% of such cash.

                                       57
<PAGE>
         The make-whole premium (the "MAKE-WHOLE PREMIUM") will be equal to an
amount that is derived by multiplying each $1,000 Principal Amount of Securities
by a specified percentage. Such percentage will be determined by reference to
the table below and will be based on the date on which the Fundamental Change
becomes effective (the "EFFECTIVE DATE") and the price (the "APPLICABLE PRICE")
paid per Common Share in the transaction constituting the Fundamental Change. If
holders of Common Shares receive only cash in the Fundamental Change, the
Applicable Price shall be the cash amount paid per share. In all other cases,
the Applicable Price shall be the average of the Sale Price of Common Shares for
the five Trading Days up to but not including the Effective Date.

         The following table sets forth the percentages to be used to determine
the Make-Whole Premium to be paid by the Company. The Applicable Prices set
forth in the first column of the table below, the Stock Price Threshold (as
hereinafter defined) and the Stock Price Cap (as hereinafter defined) will be
adjusted as of any date on which the Exchange Rate is adjusted. The adjusted
Applicable Prices, Stock Price Threshold and Stock Price Cap will equal the
Applicable Prices, Stock Price Threshold and Stock Price Cap, respectively,
applicable immediately prior to such adjustment, multiplied by a fraction, the
numerator of which is the Exchange Rate immediately prior to the adjustment
giving rise to the adjustment and the denominator of which is the Exchange Rate
as so adjusted.

                               MAKE-WHOLE PREMIUM
                           (% OF THE PRINCIPAL AMOUNT)

<Table>
<Caption>
================================================++===================================================================
                                                              EFFECTIVE DATE
---------------------------------------------------------------------------------------------------------------------
  APPLICABLE PRICE     DECEMBER 13, 2004      JUNE 15, 2005      JUNE 15, 2006      JUNE 15, 2007      JUNE 15, 2008
---------------------------------------------------------------------------------------------------------------------
<S>                         <C>                   <C>                <C>                <C>                <C>
       $ 50.00              26.02%                25.85%             25.85%             26.24%             28.67%
---------------------------------------------------------------------------------------------------------------------
       $ 55.00              22.36%                22.00%             21.45%             20.85%             21.54%
---------------------------------------------------------------------------------------------------------------------
       $ 60.00              19.18%                18.66%             17.65%             16.21%             14.41%
---------------------------------------------------------------------------------------------------------------------
       $ 65.00              16.41%                15.78%             14.43%             12.35%              7.28%
---------------------------------------------------------------------------------------------------------------------
       $ 70.00              14.02%                13.30%             11.71%              9.24%              0.14%
---------------------------------------------------------------------------------------------------------------------
       $ 75.00              11.96%                11.19%              9.46%              6.78%              0.00%
---------------------------------------------------------------------------------------------------------------------
       $ 80.00              10.18%                 9.38%              7.59%              4.90%              0.00%
---------------------------------------------------------------------------------------------------------------------
       $ 85.00               8.64%                 7.85%              6.05%              3.48%              0.00%
---------------------------------------------------------------------------------------------------------------------
       $ 90.00               7.32%                 6.54%              4.80%              2.43%              0.00%
---------------------------------------------------------------------------------------------------------------------
       $ 95.00               6.19%                 5.43%              3.78%              1.66%              0.00%
---------------------------------------------------------------------------------------------------------------------
       $100.00               5.22%                 4.50%              2.95%              1.10%              0.00%
---------------------------------------------------------------------------------------------------------------------
       $105.00               4.38%                 3.70%              2.28%              0.71%              0.00%
---------------------------------------------------------------------------------------------------------------------
       $110.00               3.66%                 3.03%              1.74%              0.44%              0.00%
---------------------------------------------------------------------------------------------------------------------
       $115.00               3.04%                 2.46%              1.31%              0.25%              0.00%
---------------------------------------------------------------------------------------------------------------------
       $120.00               2.52%                 1.99%              0.97%              0.13%              0.00%
---------------------------------------------------------------------------------------------------------------------
       $125.00               2.06%                 1.59%              0.70%              0.05%              0.00%
---------------------------------------------------------------------------------------------------------------------
       $130.00               1.68%                 1.25%              0.49%              0.01%              0.00%
================================================++===================================================================
</Table>

The exact Applicable Price and Effective Dates may not be as set forth in the
table, in which case, if the Applicable Price is between two Applicable Prices
in the table or the Effective Date is between two Effective Dates on the table
(or both), the relevant percentages will be determined by straight line
interpolation between the percentages set forth for the higher and lower

                                       58
<PAGE>
Applicable Prices and the two Effective Dates based on a three hundred sixty
five (365) day year (or both).

         If the Applicable Price is greater than $130.00 per share (the "STOCK
PRICE CAP") (subject to adjustment), no Make-Whole Premium will be paid.

         If the Applicable Price is less than or equal to $50.00 per share (the
"STOCK PRICE THRESHOLD") (subject to adjustment), no Make-Whole Premium will be
paid.

         If a Fundamental Change has occurred, a calculation agent, (who may be
the trustee) appointed from time to time by the Company, shall, on behalf of and
on request by the Company, calculate (A) the Applicable Price, and (B) the
Make-Whole Premium with respect to such Applicable Price, based on the Effective
Date specified by the Company, and shall deliver its calculation of the
Applicable Price and Make-Whole Premium to the Company and the Trustee within
three Business Days of the request by the Company or the Trustee. In addition,
the calculation agent shall, on behalf of and upon request by the Company or the
Trustee make the determinations described above in this Section 11.05(b) above
and deliver its calculations to the Company or the Trustee by 9:00 p.m., New
York City time, on the day prior to the Fundamental Change Repurchase Date. The
Company, or at the Company's request, the Trustee in the name and at the expense
of the Company, (X) shall notify the Holders of the Applicable Price and
Make-Whole Premium per $1,000 principal amount of Securities with respect to a
Fundamental Change as part of the Fundamental Change Repurchase Notice and (Y)
shall notify the Holders, by registered first-class mail, sent promptly upon the
opening of business on the Fundamental Change Repurchase Date of the number of
Common Shares or the amount of cash or Alternative Consideration, as the case
may be, to be paid in respect of the Make-Whole Premium in connection with such
Fundamental Change, in the manner provided in this Indenture, and the Company
shall also publicly announce such information. Any notice so given shall be
conclusively presumed to have been duly given, whether or not the Holder
receives such notice. The Company shall verify, in writing, all calculations
made by the calculation agent pursuant to this Section 11.05.

         On or prior to the Business Day immediately following the Fundamental
Change Repurchase Date, the Company shall deposit with the Trustee or with one
or more paying agents a number of Common Shares or the amount of cash or
Alternative Consideration, or a combination thereof, as the case may be,
sufficient to pay the Make-Whole Premium with respect to all Securities to be
exchanged in connection with such Fundamental Change; PROVIDED that if such
deposit is made on the Business Day immediately following the Fundamental Change
Repurchase Date it must be received by the Trustee or paying agent, as the case
may be, by 12:00 p.m., New York City time, on such date. Payment of the
Make-Whole Premium for Securities surrendered for exchange within the period
described in the first paragraph of this Section 11.05(b), shall be made
promptly following the Fundamental Change Repurchase Date by mailing checks in
respect of cash (or if the Securities are represented by a Global Security, by
wire transfer of immediately available funds to the Depositary or its nominee)
and otherwise delivering entitlements to securities, other assets or property
for the amount payable to the Holders of such Securities entitled thereto as
they shall appear in the register kept by the Registrar.

                                       59
<PAGE>

                  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 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.

                                       60
<PAGE>

                  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 capital stock of the Guarantor (other
than Common Shares), or evidences of indebtedness of the Guarantor or of assets
(other than cash and other than dividends, distributions or 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 a 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 11.14 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) 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 such Market Price of
the Common Shares and the denominator shall be the Market Price of the Common
Shares on the record date 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 11.14 shall apply to such exchange mutatis

                                       61
<PAGE>
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.

                  (c) 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
common shareholders 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 a 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
per Common Share, 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 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 per Common Share 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 per Common Share 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.

                  (d) Notwithstanding Sections 11.08(b) and (c), in no event
shall the Exchange Rate as adjusted pursuant to Sections 11.08(b) and (c) exceed
22.3964 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)).

                  SECTION 11.09. [RESERVED]

                  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.

                                       62
<PAGE>
         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 of the Guarantor), 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. 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. VOLUNTARY CHANGE.

         The Guarantor may make such increases or decreases, in one or more
increments, in the Exchange Rate, in addition to those required by Sections
11.06, 11.07 and 11.08 hereof, as the Guarantor's Board of Directors considers
to be advisable to avoid or diminish any income tax to holders of Common Shares
or rights to purchase Common Shares resulting from any dividend or distribution
of stock (or rights to acquire stock) or from any event treated as such for
income tax purposes. To the extent permitted by applicable law, the Guarantor
may from time to time increase, in one or more increments, the Exchange Rate by
any amount for any period of time if the period is at least 20 Business Days,
the increase is irrevocable during the period and the Guarantor's Board of
Directors shall have made a determination that such increase would be in the
best interests of the Guarantor, which determination shall be conclusive.
Subsequent to any such increase, the Guarantor may from time to time lower the
Exchange Rate to any rate that is not lower than the Exchange Rate that would
have been applicable had any such increase not occurred, if the Guarantor's
Board of Directors has determined that the decrease would be in the Guarantor's
best interests. Whenever the Exchange Rate is changed pursuant to this Section
11.12, the Company shall mail to Holders and file with the Trustee and the
Exchange Agent a notice of such increase. The Company shall mail such notice at
least seven days before the date the increased or decreased Exchange Rate takes
effect. The notice shall state the increased or decreased Exchange Rate and the
period it will be in effect.

                  SECTION 11.13. NOTICE OF CERTAIN TRANSACTIONS.

         If:

                  (1) 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; or

                  (2) the Guarantor takes any action that would require a
supplemental indenture pursuant to Section 11.14 hereof; or

                  (3) there is a liquidation, dissolution or winding-up of the
Guarantor;

                                       63
<PAGE>
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 11.14. 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 holders
of Common 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, 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 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 and 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 Company's Board of Directors shall reasonably consider necessary by
reason of the foregoing, including to the extent required by the Company's Board
of Directors and practicable the provisions providing for the repurchase rights
set forth in Article 3 herein.

         (b) Notwithstanding the provisions of Section 11.05(a), 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 (as
provided in clause (d) below) 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") assuming such holder of
Common Shares did not exercise his rights of election, if any, as to the kind or
amount of securities, cash or other property receivable upon such consolidation,
merger, statutory exchange, conveyance, transfer or lease.

                                       64
<PAGE>
         (c) The Exchange Value in respect of any Securities exchanged following
the effective date of any such transaction shall be equal to the average of the
daily values of the Exchange Property pertaining to such Securities as
determined in the next sentence (the "EXCHANGE PROPERTY VALUE") for each of the
ten consecutive Trading Days (appropriately adjusted to take into account the
occurrence during such period of stock splits and similar events) beginning on
the later of (A) the second Trading Day immediately following the day the
Securities are tendered for exchange and (B) the effective date of such
transaction (the "EXCHANGE PROPERTY WEIGHTED AVERAGE PRICE"). 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

                           (ii) Any other property (other than cash) included in
                  the Exchange Property shall be valued in good faith by the
                  Company's Board of Directors or by a AMEX member firm selected
                  by the Company's Board of Directors.

         (d) The Company shall deliver such Exchange Value to Holders of
Securities so exchanged as follows:

                           (i) An amount equal to the Principal Return,
                  determined as set forth in Section 11.05(a)(ii)(1); and

                           (ii) If the Exchange Value of the Securities so
                  exchanged is greater than the Principal Return, an amount of
                  Exchange Property, cash or any combination thereof, determined
                  as set forth below, equal to such aggregate Exchange Value
                  less the Principal Return (the "NET EXCHANGE PROPERTY
                  AMOUNT").

         The amount of Exchange Property to be delivered shall be determined by
dividing the Net Exchange Property Amount, minus any cash paid by the Company in
respect of the Net Exchange Property Amount, by the Exchange Property Weighted
Average Price. If the Exchange Property includes more than one kind of property,
the amount of Exchange Property of each kind to be delivered shall be in the
proportion that the Exchange Property Value of such kind of Exchange Property
bears to the Exchange Property Value of all the Exchange Property. If the
foregoing calculations would require the Company to deliver a fractional share
or unit of Exchange Property to a Holder of Securities being exchanged, the
Company shall deliver cash in lieu of such fractional share or unit based on its
Exchange Property Weighted Average Price.

         (e) Notwithstanding clauses (b), (c) and (d) above, if the Securities
are tendered for exchange prior to the effective date of any such transaction
pursuant to Section 11.05(b) above, and the Principal Return and Net Shares, if
any, have been determined as of the effective date of such transaction, then the
Company shall (i) pay the Principal Return in cash and (ii) instead of
delivering Net Shares, if applicable, deliver an amount of Exchange Property
that a holder of Common Shares, holding, immediately prior to the transaction, a
number of Common Shares equal to the Net Shares, would receive, assuming such
holder of Common Shares did not exercise his rights of election, if any, as to
the kind or amount of securities, cash or other

                                       65
<PAGE>
property receivable upon such consolidation, merger, statutory exchange,
conveyance, transfer or lease, cash, or a combination thereof at the Company's
option. If the foregoing calculation would require the Company to deliver a
fractional share or unit of Exchange Property to a Holder of Securities being
exchanged, the Company shall deliver cash in lieu of such fractional share or
unit based on the Exchange Property Value (as so determined).

         (f) [Reserved].

         (g) The Company shall cause notice of the execution of such
supplemental indenture to be mailed to each Holder of Securities, at his 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.

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

         (i) If this Section applies, none of Sections 11.06, 11.07 nor
11.08 hereof apply.

                  SECTION 11.15. 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, 11.14 or 11.17 hereof shall be conclusive in
the absence of manifest error.

                  SECTION 11.16. 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
11.14 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 11.16 as the Trustee.

                  SECTION 11.17. 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.



                                       66
<PAGE>
                  SECTION 11.18. 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 11.19. 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"):

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

                  (ii)  are not exercisable, and

                  (iii) 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 repurchased without exercise by any holders thereof, the
Exchange Rate shall be readjusted upon such final redemption or repurchase 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 redemption or repurchase
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 redemption or repurchase,
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 11.20. 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
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.

                                       67
<PAGE>
                                   ARTICLE 12.
                              CONTINGENT INTEREST

                  SECTION 12.01. GENERAL.

                  (a) The Securities shall provide for payment of Contingent
Interest in certain circumstances as specified in paragraph 10 of the
Securities.

                  (b) Holders of Securities at the close of business on a
Contingent Interest Record Date will receive payment of Contingent Interest,
payable on the corresponding Contingent Interest Payment Date notwithstanding
the exchange of such Securities at any time after the close of business on such
Contingent Interest Record Date. Securities surrendered for exchange by a Holder
during the period from the close of business on any Contingent Interest Record
Date to the opening of business on the immediately following Contingent Interest
Payment Date must be accompanied by payment of an amount equal to the Contingent
Interest that the Holder is to receive on the Securities; PROVIDED, HOWEVER,
that no such payment need be made if (1) the Company has specified a Redemption
Date that is after a Contingent Interest Record Date and on or prior to the
immediately following Contingent Interest Payment Date, (2) the Company has
specified a Fundamental Change Repurchase Date following a Fundamental Change
that is during such period or (3) any overdue Contingent Interest exists at the
time of exchange with respect to such Securities to the extent of such overdue
Contingent Interest.

                  (c) In the event that any date on which Contingent 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.

                  SECTION 12.02. DEFAULTED CONTINGENT INTEREST; INTEREST RIGHTS
                                 PRESERVED.

         Except as otherwise specified with respect to the Securities, any
Contingent Interest on any Security that is payable, but is not punctually paid
or duly provided for, within 30 days following any Contingent Interest Payment
Date (herein called "DEFAULTED CONTINGENT INTEREST") shall forthwith cease to be
payable to the registered Holder thereof on the relevant Contingent Interest
Record Date by virtue of having been such Holder, and such Defaulted Contingent
Interest may be paid by the Company, at its election in each case, as provided
in clause (1) or (2) below:

                           (1) The Company may elect to make payment of any
         Defaulted Contingent Interest to the Persons in whose names the
         Securities are registered at the close of business on a special record
         date (herein called "SPECIAL CONTINGENT INTEREST RECORD DATE") for the
         payment of such Defaulted Contingent 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

                                       68
<PAGE>
         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
         Contingent 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 Contingent Interest as in this
         clause provided. Thereupon the Trustee shall fix a Special Contingent
         Interest Record Date for the payment of such Defaulted Contingent
         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
         Contingent Interest Record Date and, in the name and at the expense of
         the Company, shall cause notice of the proposed payment of such
         Defaulted Contingent Interest and the Special Contingent 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 Contingent 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 Contingent
         Interest Record Date. Notice of the proposed payment of such Defaulted
         Contingent Interest and the Special Record Date therefor having been
         mailed as aforesaid, such Defaulted Contingent Interest shall be paid
         to the persons in whose names the Securities are registered at the
         close of business on such Special Contingent Interest Record Date and
         shall no longer be payable pursuant to the following clause (2).

                           (2) The Company may make payment of any Defaulted
         Contingent 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 Contingent Interest accrued and unpaid, and to accrue, which were
carried by such other Security.

                                   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

                                       69
<PAGE>
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.
                           2nd Fl., International Trading Centre
                           P.O. Box 905E
                           Warrens
                           St. Michael, Barbados
                           Attn: Vice President-Administration
                           Telephone Number: (246) 421-9471
                           Facsimile Number: (246) 421-9472

         if to the Trustee:

                           J.P. Morgan Trust Company, National Association
                           Institutional Trust Services
                           600 Travis Street, Suite 1150
                           Houston, Texas 77002-3009
                           Telephone Number: (713) 216-5651
                           Facsimile Number: (713) 216-6590

         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.

                                       70
<PAGE>
         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:

                           (1) 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

                           (2) 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:

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

                           (2) 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;

                           (3) a statement that, in the opinion of each such
         individual, he or she has made such examination or investigation as is
         necessary to enable

                                       71
<PAGE>
         him or her to express an informed opinion as to whether or not such
         covenant or condition has been complied with; and

                           (4) 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 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. [RESERVED]



                                       72
<PAGE>

                  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)

                                       73
<PAGE>
         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:
                                           Title:



                                       NABORS INDUSTRIES LTD.



                                       By: /s/ Daniel McLachlin
                                           -------------------------------------
                                           Name:  Daniel McLachlin
                                           Title: Vice President Administration
                                                  and Secretary




                                       J.P. MORGAN TRUST COMPANY,
                                       NATIONAL ASSOCIATION, as Trustee



                                       By: /s/ Mary Jane Henson
                                           -------------------------------------
                                           Name:
                                           Title: Vice President

                                       74
<PAGE>

                                    EXHIBIT A

                           [FORM OF FACE OF SECURITY]

FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE CODE, THIS
SECURITY IS A CONTINGENT PAYMENT DEBT INSTRUMENT AND WILL ACCRUE ORIGINAL ISSUE
DISCOUNT AT THE ISSUER'S "COMPARABLE YIELD" FOR UNITED STATES FEDERAL INCOME TAX
PURPOSES. PURSUANT TO SECTION 4.10 OF THE INDENTURE, THE COMPANY AGREES, AND BY
ACCEPTANCE OF A BENEFICIAL OWNERSHIP INTEREST IN THE SECURITY, EACH BENEFICIAL
HOLDER OF THE SECURITIES WILL BE DEEMED TO HAVE AGREED, FOR UNITED STATES
FEDERAL INCOME TAX PURPOSES, (i) TO TREAT THE SECURITIES AS INDEBTEDNESS THAT IS
SUBJECT TO THE CONTINGENT PAYMENT DEBT INSTRUMENT REGULATIONS UNDER SECTION
1.1275-4 OF THE UNITED STATES TREASURY REGULATIONS (THE "CPDI REGULATIONS"),
AND, FOR PURPOSES OF THE CPDI REGULATIONS, TO TREAT THE FAIR MARKET VALUE OF
COMMON SHARES RECEIVED BY A BENEFICIAL HOLDER UPON ANY EXCHANGE OF THE
SECURITIES AS A CONTINGENT PAYMENT AND (ii) TO BE BOUND BY THE COMPANY'S
DETERMINATION OF THE "COMPARABLE YIELD" AND "PROJECTED PAYMENT SCHEDULE" WITHIN
THE MEANING OF THE CPDI REGULATIONS, WITH RESPECT TO THE SECURITIES AND TO
ACCRUE ORIGINAL ISSUE DISCOUNT AT THE COMPARABLE YIELD AS DETERMINED BY THE
COMPANY. THE COMPANY'S DETERMINATION OF THE "COMPARABLE YIELD" IS 5.53% PER
ANNUM, COMPOUNDED SEMIANNUALLY. THE PROJECTED PAYMENT SCHEDULE, DETERMINED BY
THE COMPANY, IS ATTACHED TO THE INDENTURE AS ANNEX 1. YOU MAY OBTAIN THE AMOUNT
OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE, COMPARABLE YIELD AND PROJECTED PAYMENT
SCHEDULE FOR THE SECURITY BY TELEPHONING THE COMPANY'S TREASURY DEPARTMENT AT
(281) 874-0035 OR SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO: NABORS
INDUSTRIES, INC., 515 W. GREENS ROAD, SUITE 1200, HOUSTON, TEXAS 77067,
ATTENTION: TREASURY DEPARTMENT.

                      [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.

                                       A-1

<PAGE>
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 HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR
THE ACCOUNT OR BENEFIT OF, U. S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE.

THE HOLDER HEREOF AGREES THAT UNTIL THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THIS NOTE UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR
ANY SUCCESSOR PROVISION), (1) IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OF, U. S. PERSONS EXCEPT (A)
TO NABORS INDUSTRIES LTD. OR TO NABORS INDUSTRIES, INC. OR ANY SUBSIDIARY
THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT), (C) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED
IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) THAT PRIOR TO SUCH
TRANSFER, FURNISHES TO EQUISERVE, AS TRANSFER AGENT (OR A SUCCESSOR TRANSFER
AGENT, AS APPLICABLE), A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE THE FORM OF
WHICH LETTER CAN BE OBTAINED FROM SUCH TRANSFER AGENT OR A SUCCESSOR TRANSFER
AGENT, AS APPLICABLE), (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED
BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (E) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); (2)
PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(E) ABOVE), IT
WILL FURNISH TO EQUISERVE, AS TRANSFER AGENT (OR A SUCCESSOR TRANSFER AGENT, AS
APPLICABLE), 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 AND (3) IT WILL DELIVER TO EACH
PERSON TO WHOM THIS NOTE IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO
CLAUSE 1(E) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS
LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THIS NOTE PURSUANT TO
CLAUSE 1(E) ABOVE OR UPON ANY TRANSFER OF THIS NOTE AFTER THE EXPIRATION OF THE
HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITIES EVIDENCED HEREBY UNDER RULE

                                       A-2

<PAGE>
144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION). AS USED HEREIN,
THE TERMS "UNITED STATES" AND "U. S. PERSON" HAVE THE MEANING GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT.







                                       A-3

<PAGE>
                             NABORS INDUSTRIES, INC.

             SERIES B ZERO COUPON SENIOR EXCHANGEABLE NOTE DUE 2023



No.
Issue Date:  December [ ], 2004
Principal Amount:  $

                                                                      CUSIP: [ ]

         Nabors Industries, Inc., a Delaware corporation, promises to pay to
______________________ or registered assigns, on June 15, 2023 the Principal
Amount of __________________________________ Dollars ($________________)
[or such greater or lesser Principal Amount as may be shown on Schedule A
hereto].(1)

         This Security shall not bear interest except as specified on the other
side of this Security. 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.

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


                                       NABORS INDUSTRIES, INC.


                                       By:
                                           -------------------------------------
                                       Name:
                                             -----------------------------------
                                       Title:
                                              ----------------------------------

Dated:
      -----------------




-----------------------
(1) For inclusion in the global Security only.




                                      A-4
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION


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

J.P. Morgan Trust Company, National Association, as Trustee


By:
    -------------------------------------
   Authorized Signatory


Date of authentication:
                        -----------------






                                      A-5

<PAGE>
                       [FORM OF REVERSE SIDE OF SECURITY]

                             NABORS INDUSTRIES, INC.

             SERIES B ZERO COUPON SENIOR EXCHANGEABLE NOTE DUE 2023

1. INTEREST

         This Security shall not bear interest except as specified in this
paragraph or in paragraph 10 hereof. If the Principal Amount hereof or any
portion of such Principal Amount is not paid when due (whether upon acceleration
pursuant to Section 6.02 of the Indenture, upon the date set for payment of the
Redemption Price pursuant to paragraph 5 hereof, upon the date set for payment
of a Purchase Price or Fundamental Change Purchase Price pursuant to paragraph 6
hereof or upon the Stated Maturity of this Security), or if Contingent Interest,
if any, due hereon is not paid when due in accordance with paragraph 10 hereof,
then in each such case the overdue amount shall bear interest at the rate of
1.0% per annum, compounded semiannually (to the extent that the payment of such
interest shall be legally enforceable), which interest shall accrue from the
date such overdue amount was due to the date payment of such amount, including
interest thereon, has been made or duly provided for. All such interest shall be
payable on demand.

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, J.P. Morgan Trust Company, National Association, a national
banking association (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 December 13, 2004, among the Company, the Guarantor and the Trustee.
Capitalized terms used

                                      A-6


<PAGE>
herein and not defined herein have the meanings ascribed thereto in the
Indenture. The 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. REDEMPTION AT THE OPTION OF THE COMPANY

         No sinking fund is provided for the Securities. The Securities are
redeemable as a whole, or from time to time in part, at any time at the option
of the Company at the Principal Amount plus accrued and unpaid Contingent
Interest, if any, and Additional Amounts, if any, and overdue interest, if any,
provided that the Securities are not redeemable prior to June 15, 2008. The
Company may, upon at least 30 days' notice to the Holders, on one or more
occasions, elect to extend the period in which it cannot redeem the Securities.

6. REPURCHASE BY THE COMPANY AT THE OPTION OF THE HOLDER; REPURCHASE AT THE
   OPTION OF THE HOLDER UPON A FUNDAMENTAL CHANGE

                  (a) Subject to the terms and conditions of the Indenture, the
Company shall become obligated to repurchase, at the option of the Holder, all
or any portion of the Securities held by such Holder on June 15, 2008, June 15,
2013 and June 15, 2018 at a Purchase Price equal to the Principal Amount
thereof, together with accrued and unpaid Contingent Interest, if any,
Additional Amounts, if any, and overdue interest, if any, upon delivery of a
Repurchase Notice containing the information set forth in the Indenture, at any
time during the period from the opening of business on the date that is 20
Business Days prior to such Repurchase Date until the close of business on such
Repurchase Date and upon delivery of the Securities to the Paying Agent by the
Holder as set forth in the Indenture.

         Securities in denominations larger than $1,000 of Principal Amount may
be repurchased in part, but only in integral multiples of $1,000 of Principal
Amount.

                  (b) Subject to the terms and conditions of the Indenture, in
the event any Fundamental Change shall occur, each Holder of Securities shall
have the right, at the Holder's option, to require the Company to repurchase 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
"Fundamental Change Repurchase Date"), which date is no later than 35 Trading
Days and no earlier than 20 Trading Days after the date notice of the
Fundamental Change is mailed in accordance with the Indenture and in no event
prior to the date on which the Fundamental Change occurs, at a price, payable in
cash equal to the Principal Amount plus accrued and unpaid Contingent Interest,
if any, Additional Amounts, if any, and overdue interest, if any to, but
excluding, the Fundamental Change Repurchase Date.

                                      A-7
<PAGE>
         Within 30 days after the occurrence of a Fundamental Change, the
Company shall mail, or cause to be mailed, notice of the occurrence of such
Fundamental Change to each Holder. Such notice shall include, among other
things, a description of the procedures which a Holder must follow to exercise
its Fundamental Change Repurchase Right. For a Security to be so repurchased at
the option of the Holder, the Paying Agent must receive such Security with the
form entitled "Option to Elect Repurchase Upon a Fundamental Change" on the
reverse thereof duly completed, together with such Security duly endorsed for
transfer, no later than the close of business on the Business Day immediately
preceding the Fundamental Chance Repurchase Date. All questions as to the
validity, eligibility (including time of receipt) and acceptance of any Security
for repurchase shall be determined by the Company, whose determination shall be
final and binding.

                  (c) If cash sufficient to pay a Purchase Price or Fundamental
Change Purchase Price, as the case may be, of all Securities or portions thereof
to be repurchased as of the Repurchase Date or the Fundamental Change Repurchase
Date, as the case may be, is deposited with the Paying Agent by 10:00 a.m., New
York City time, on the Business Day following the Repurchase Date or the
Fundamental Change Repurchase Date, as the case may be, Contingent Interest, if
any, Additional Amounts, if any, and overdue interest, if any, cease to accrue
on such Securities (or portions thereof) on and after such date, and the Holder
thereof shall have no other rights as such (other than the right to receive the
Purchase Price or Fundamental Change Purchase Price, as the case may be, upon
surrender of such Security).

7. NOTICE OF REDEMPTION AT THE OPTION OF THE COMPANY

         Notice of redemption at the option of the Company will be mailed at
least 15 days but not more than 60 days before the Redemption Date to each
Holder of Securities to be redeemed at the Holder's registered address. If money
sufficient to pay the Redemption Price of all Securities (or portions thereof)
to be redeemed on the Redemption Date is deposited with the Paying Agent by
10:00 a.m., New York City time, on the Redemption Date, on and after such date
Contingent Interest, if any, Additional Amounts, if any, and overdue interest,
if any, cease to accrue on such Securities or portions thereof. Securities in
denominations larger than $1,000 of Principal Amount may be redeemed in part but
only in multiples of $1,000 of Principal Amount.

8. 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.

9. EXCHANGE

         Subject to the next two succeeding sentences, a Holder of a Security
may exchange this Security for cash and, if applicable, Common Shares prior to
the close of business on the Business Day immediately preceding June 15, 2023
(unless earlier redeemed or repurchased), but only upon the occurrence of one of
the four events set forth in Section 11.01 of the Indenture. If this Security is
called for redemption, the Holder may exchange it at any time before the close
of the last Trading Day prior to the Redemption Date. A Security in respect of
which a Holder

                                      A-8



<PAGE>
has delivered a notice of exercise of the option to require the Company to
repurchase such Security or to repurchase such Security in the event of a
Fundamental Change may be exchanged only if the notice of exercise is withdrawn
in accordance with the terms of the Indenture.

         In the event a Fundamental Change occurs prior to June 15, 2008, and a
Holder surrenders the Securities for exchange pursuant to Section 11.01 of the
Indenture during the period beginning on (and including) the date on which the
Company issued the Fundamental Change Repurchase Notice pursuant to Section
3.09(b) of the Indenture and ending on (and including) the Fundamental Change
Repurchase Date in connection with such Fundamental Change, to the extent
required pursuant to Article 11 of the Indenture, the Holder will receive, in
addition to the payment of the Exchange Value of the Securities as provided in
Section 11.05(a) of the Indenture, a Make-Whole Premium, if any, as described in
the Indenture. The Make-Whole Premium payable to a Holder may be paid, at the
Company's option, in (i) cash, (ii) Common Shares, or (iii) the same form of
consideration which the Common Shares are exchanged for, converted into,
acquired for or constitutes solely the right to receive, as a result of the
transaction or transactions constituting the Fundamental Change, assuming that
the holder of such Common Shares would not have exercised any rights of election
that such would have as a holder of Common Shares to select a particular form of
consideration (the "ALTERNATIVE CONSIDERATION"), or in any combination of cash,
Common Shares or Alternative Consideration. If the Company elects to pay the
Make-Whole Premium in whole or in part in Common Shares or Alternative
Consideration, such Common Shares and Alternative Consideration shall be valued
as provided in the Indenture.

         The make-whole premium (the "MAKE-WHOLE PREMIUM") will be equal to an
amount that is derived by multiplying each $1,000 Principal Amount of Securities
by a specified percentage. Such percentage will be determined by reference to
the table in Section 11.05 of the Indenture and subject to the terms and
conditions set forth in the Indenture.

         The initial Exchange Rate is 14.2653 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.

         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 Contingent Interest payable on the next Contingent
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

                                      A-9

<PAGE>
Contingent Interest, if any, and Additional Amounts, if any, to the Exchange
Date with respect to the exchanged portion of this Security shall be deemed
canceled, extinguished and forfeited through the delivery of the Principal
Return and, if applicable, cash in the Net Share Amount or Net Shares (together
with any cash payment, if any, in lieu of fractional shares) in exchange for the
portion of this Security being exchanged pursuant to the terms hereof.

10. CONTINGENT INTEREST

                  (a) The Company will pay Contingent Interest ("CONTINGENT
INTEREST") to the Holders of the Securities in respect of any six-month interest
period from June 15 to December 14 or December 15 to June 14 commencing on or
after June 15, 2008 for which the average Trading Price of a Security for the
applicable five Trading Day reference period equals or exceeds 120% of $1,000
per $1,000 Principal Amount of Securities as of the day immediately preceding
the first day of the applicable six-month interest period. The "five Trading Day
reference period" means the five Trading Days ending on the second Trading Day
immediately preceding the relevant six-month interest period. For any six-month
interest period in respect of which Contingent Interest is payable, the
Contingent Interest payable on each Security shall equal 0.185% of the Principal
Amount of the Security.

         Any Contingent Interest will be payable on the June 15 or December 15
(each a "CONTINGENT INTEREST PAYMENT DATE") immediately following the relevant
six-month interest period to the Persons in whose names the Securities are
registered at the close of business on the June 1 or December 1 (each a
"CONTINGENT INTEREST RECORD DATE") immediately preceding the applicable
Contingent Interest Payment Date, except that Contingent Interest payable upon
redemption or repurchase will be paid to the Person to whom the Principal Amount
is payable unless the Redemption Date or Repurchase Date or Fundamental Change
Repurchase Date, as the case may be, is a Contingent Interest Payment Date.
Contingent Interest will be computed on the basis of a 360-day year composed of
twelve 30-day months.

         Upon determination that Holders will be entitled to receive Contingent
Interest which may become payable, the Company shall notify the Holders. In
connection with providing such notice, the Company will issue a press release
and publish a notice containing information regarding the Contingent Interest
determination in a newspaper of general circulation in The City of New York or
publish such information on the Company's then existing Web site or through such
other public medium as the Company shall determine.

                  (b) Except as otherwise specified with respect to the
Securities, any Contingent Interest on any Security that is payable, but is not
punctually paid or duly provided for, on any Contingent Interest Payment Date
(herein called "DEFAULTED CONTINGENT INTEREST") shall forthwith cease to be
payable to the Holder thereof on the relevant Contingent Interest Record Date by
virtue of having been such Holder, and such Defaulted Contingent Interest may be
paid by the Company as provided for in Section 12.02 of the Indenture.

                  (c) Contingent Interest shall cease to accrue on the
Securities after declaration of acceleration of the Securities as provided in
Section 6.02 of the Indenture.

                                      A-10

<PAGE>

11. [RESERVED]

12. 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 selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities in respect of which a Repurchase Notice or Fundamental Change
Repurchase 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) or any Securities for a period of 15 days before the mailing of
notice of Securities to be redeemed.

13. PERSONS DEEMED OWNERS

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

14. UNCLAIMED MONEY 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, 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.

15. 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

                                      A-11


<PAGE>
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.

16. DEFAULTS AND REMEDIES

         Under the Indenture, Events of Default include (i) the Company defaults
in the payment of the Principal Amount, Redemption Price, Purchase Price or a
Fundamental Change Purchase Price on any Security when the same becomes due and
payable at its Stated Maturity, upon redemption, upon declaration, when due for
repurchase by the Company or otherwise, and such default continues for ten days;
(ii) the Company defaults in the payment of Contingent Interest, if any,
Additional Amounts, if any, or a Make-Whole Premium, if any, and such default
continues for 30 days; (iii) failure of the Company or the Guarantor to perform
or comply with the provisions of Section 11.02 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
those set forth in Section 4.08 of the Indenture and Annex I to the Indenture)
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.

17. 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.

18. 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.

                                      A-12
<PAGE>
19. 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.

20. 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).

21. REGISTRATION RIGHTS

         The Holders of Restricted Securities are entitled to the benefits set
forth in ANNEX I to the Indenture relative to registration of the Securities.

22. GOVERNING LAW

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

23. 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
                           Attention:  Legal Department




                                      A-13

<PAGE>
                          [FORM OF NOTATION ON SECURITY

                             RELATING TO GUARANTEE]

         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, Contingent
Interest, if any, 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-14


<PAGE>
                            [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-15
<PAGE>
                            [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.

                                          --------------------------------------


                                          --------------------------------------
                                                     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-16
<PAGE>
                       [FORM OF OPTION TO ELECT REPURCHASE

                           UPON A FUNDAMENTAL CHANGE]

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 Fundamental Change with respect to the Company and requests and
instructs the Company to repurchase 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 repurchased
                                      (if less than all):
                                      $_________,000
                                      Social Security or Other Taxpayer
                                      Identification Number:
                                                             -----------------




                                      A-17


<PAGE>
                                 TRANSFER NOTICE

         This Transfer Notice relates to $__________ Principal Amount (as
defined in the Indenture to which the referenced Securities are subject) of the
Series B Zero Coupon Senior Exchangeable Notes Due 2023 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

--------------
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-18
<PAGE>

         (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


         (3) [ ] pursuant to and in compliance with Regulation S under the
Securities Act of 1933; or


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

         (5) [ ] 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.

                                    --------------------------------------------
                                    Signature

                                    --------------------------------------------
                                    Date

                                    --------------------------------------------
                                    Signature Guarantee(3)


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



                                      A-19
<PAGE>
              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-20
<PAGE>
              [FORM OF SCHEDULE FOR ENDORSEMENTS ON GLOBAL SECURITY
                     TO REFLECT CHANGES IN PRINCIPAL AMOUNT]

                                   SCHEDULE A

                 Changes to Principal Amount of Global Security

<Table>
<Caption>
                                  PRINCIPAL AMOUNT OF
                               SECURITIES BY WHICH THIS
                               GLOBAL SECURITY IS TO BE
                               REDUCED OR INCREASED, AND
                                REASON FOR REDUCTION OR      REMAINING PRINCIPAL AMOUNT
           DATE                        INCREASES               OF THIS GLOBAL SECURITY         NOTATION MADE BY
----------------------------------------------------------------------------------------------------------------------
<S>                            <C>                             <C>                            <C>




</Table>



                                      A-21
<PAGE>

                                                                         ANNEX I

                         REGISTRATION RIGHTS OF HOLDERS

         1. Definitions

         Capitalized terms used and not defined in this ANNEX I shall have the
meanings ascribed to such terms in the Indenture. In addition, for the purposes
of this ANNEX I only, the following terms shall have the following meanings:

         Amendment Effectiveness Deadline Date: See Section 2(d)(i).

         Amount of Registrable Securities: (a) With respect to Securities
constituting Registrable Securities, the aggregate principal amount of all such
Securities outstanding, (b) with respect to Underlying Shares constituting
Registrable Securities, the aggregate number of such Underlying Shares that may
be issuable from time to time pursuant to the terms of the Indenture and (c)
with respect to combinations thereof, the sum of (a) and (b) for the relevant
Registrable Securities.

         Board: The Board of Directors of the Guarantor.

         Business Day: Any day that is not a Saturday, Sunday or a day on which
banking institutions in New York, Texas or Bermuda are authorized or required by
law to be closed.

         Deferral Period: See Section 2(d).

         Depositary: The Depository Trust Company until a successor is appointed
by the Company.

         Effectiveness Date: The 180th day after the Issue Date.

         Effectiveness Period: The period commencing on the date that the
Initial Shelf Registration Statement is declared effective under the Securities
Act and ending on the date that all Securities, related Guarantees and
Underlying Shares have ceased to be Registrable Securities.

         Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder and any successor act,
rules and regulations.

         Filing Date: The 90th day after the Issue Date.

         Holder: Any holder or owner of a beneficial interest in Registrable
Securities.

         Indemnified Holder: See Section 6 hereof.

         Indemnified Person: See Section 6 hereof.

         Indemnifying Person: See Section 6 hereof.

                                       I-1

<PAGE>
         Initial Shelf Registration: See Section 2(a) hereof.

         NASD: The National Association of Securities Dealers, Inc.

         Notice and Questionnaire: A written notice delivered to the Company
requesting the information necessary for the Company and the Guarantor to
prepare a Registration Statement, as such notice may be amended by the Company
to the extent necessary to ensure compliance with applicable law.

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

         Prospectus: The prospectus included in any Registration Statement
(including, without limitation, any prospectus subject to completion and a
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by any
prospectus supplement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.

         Registrable Securities: All Securities and all Underlying Shares upon
original issuance thereof and at all times subsequent thereto until the earliest
to occur of (i) a Registration Statement or Registration Statements covering
such Securities and Underlying Shares having been declared effective by the SEC
and remaining effective until such Securities and Underlying Shares having been
disposed of or issued and sold, as the case may be, in accordance with such
effective Registration Statement, (ii) such Securities and Underlying Shares
having been sold in compliance with Rule 144 or (except with respect to
affiliates of the Company within the meaning of the Securities Act) are eligible
for sale in compliance with Rule 144(k), or (iii) such Securities and any
Underlying Shares ceasing to be outstanding.

         Registration Statement: Any registration statement of the Company or
the Guarantor that covers the Registrable Securities filed with the SEC pursuant
to the provisions of this ANNEX I, including the Prospectus, amendments and
supplements to such registration statement, including post-effective amendments,
all exhibits and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.

         Rule 144: Rule 144 promulgated under the Securities Act, as such Rule
may be amended from time to time, or any similar rule (other than Rule 144A) or
regulation hereafter adopted by the SEC providing for offers and sales of
securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of an issuer of such securities being
free of the registration and prospectus delivery requirements of the Securities
Act.

         Rule 144A: Rule 144A promulgated under the Securities Act, as such Rule
may be amended from time to time, or any similar rule (other than Rule 144) or
regulation hereafter adopted by the SEC.

         Rule 415: Rule 415 promulgated under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.

                                       I-2

<PAGE>
         SEC: The Securities and Exchange Commission.

         Securities Act: The Securities Act of 1933, as amended, and the rules
and regulations of the SEC promulgated thereunder and any successor act, rules
and regulations.

         Shelf Registration: See Section 2(b) hereof.

         Shelf Registration Statement: See Section 2(b) hereof.

         Subsequent Shelf Registration: See Section 2(b) hereof.

         TIA: The Trust Indenture Act of 1939, as amended, and the rules and
regulations of the SEC promulgated thereunder and any successor act, rules and
regulations.

         Trustee: Has the meaning given such term in the Recitals.

         Underlying Shares: Means common shares of the Guarantor, par value
$0.001 per share.

         2. Shelf Registration

         (a) Shelf Registration. To the extent not prohibited by any applicable
law or applicable interpretation of the staff of the SEC, the Company and the
Guarantor shall use their respective reasonable best efforts to file with the
SEC a Registration Statement or Registration Statements for an offering to be
made on a continuous basis pursuant to Rule 415 (or, in the event Rule 415 shall
not be available for any of the Registrable Securities for an offering to be
made as permitted under the terms of the Securities and this Agreement,
including the offering of the Underlying Shares upon the exchange of the
Securities) for an offering covering all of the Registrable Securities (the
"INITIAL SHELF REGISTRATION") on or prior to the Filing Date.

         The Initial Shelf Registration shall be on Form S-3 or another
appropriate form permitting registration of such Registrable Securities for (i)
in the case of the Securities constituting Registrable Securities, resale by
Holders, and (ii) in the case of Underlying Shares constituting Registrable
Securities, (x) the issuance and sale by the Guarantor, or (y) the resale by
Holders, as the case may be, in each case in the manner or manners set forth in
such Registration Statement and in Rule 415 (if such rule is available for the
Initial Shelf Registration).

         The Company and the Guarantor shall use their respective reasonable
best efforts to cause the Initial Shelf Registration to be declared effective
under the Securities Act on or prior to the Effectiveness Date and to keep such
Initial Shelf Registration continuously effective under the Securities Act until
the expiration of the Effectiveness Period. To the extent permitted by
applicable law and the interpretations of the staff of the SEC, the Initial
Registration Statement may be terminated with respect to either the Securities
or the Underlying Securities, as the case may be, on the date the Effectiveness
Period expires. At the time the Initial Shelf Registration is declared
effective, each Holder that became a Notice Holder on or prior to the date five
(5) Business Days prior to such time of effectiveness shall be named as a
selling securityholder in the Initial Shelf Registration Statement and the
related Prospectus in such a manner as to permit such Holder to deliver such
Prospectus to purchasers of Registrable Securities in accordance with applicable
law.

                                       I-3



<PAGE>
         (b) Subsequent Shelf Registrations. If the Initial Shelf Registration
or any Subsequent Shelf Registration ceases to be effective for any reason at
any time during the Effectiveness Period (other than because of the sale of all
of the securities registered thereunder), the Company and the Guarantor shall
use their respective reasonable best efforts to obtain the prompt withdrawal of
any order suspending the effectiveness thereof, and in any event shall within 15
days of such cessation of effectiveness amend the Initial Shelf Registration in
a manner to obtain the withdrawal of the order suspending the effectiveness
thereof, or file an additional "shelf" Registration Statement pursuant to Rule
415 covering all of the Registrable Securities (or, in the event Rule 415 shall
not be available for any of the Registrable Securities, covering an offering to
be made as permitted under the terms of the Securities and this Agreement,
including the offering of the Underlying Shares upon exchange, repurchase or
redemption of the Securities) (each, a "SUBSEQUENT SHELF REGISTRATION"). If a
Subsequent Shelf Registration is filed, the Company and the Guarantor shall use
their respective reasonable best efforts to cause the Subsequent Shelf
Registration to be declared effective under the Securities Act as soon as
practicable after such filing and to keep such Registration Statement
continuously effective until the termination of the Effectiveness Period. As
used herein the term "SHELF REGISTRATION" means the Initial Shelf Registration
and any Subsequent Shelf Registration and the term "SHELF REGISTRATION
STATEMENT" means any Registration Statement or Registration Statements filed in
connection with a Shelf Registration.

         (c) Supplements and Amendments. The Company and the Guarantor shall
promptly use their respective reasonable best efforts to supplement and amend
the Shelf Registration if required by the rules, regulations or instructions
applicable to the registration form used for such Shelf Registration, if
required by the Securities Act, or if reasonably requested by the Holders of the
majority in Amount of Registrable Securities covered by such Registration
Statement.

         (d) Notice Holders. Each Holder agrees that if such Holder wishes to
sell Registrable Securities pursuant to a Shelf Registration Statement and
related Prospectus, it will do so only in accordance with this Section 2(d) and
Section 4. Following the date that the Initial Shelf Registration Statement is
declared effective, each Holder wishing to sell Registrable Securities pursuant
to a Shelf Registration Statement and related Prospectus agrees to deliver a
Notice and Questionnaire to the Company at least three (3) Business Days prior
to any intended distribution of Registrable Securities under the Shelf
Registration Statement. The Guarantor shall promptly provide a Notice and
Questionnaire to any Holder requesting the same; provided that neither the
Guarantor nor the Company shall be under any obligation to circulate Notice and
Questionnaires generally to Holders. Each Holder who elects to sell Registrable
Securities pursuant to a Shelf Registration Statement agrees by submitting a
Notice and Questionnaire to the person specified therein, it will be bound by
the terms and conditions of the Notice and Questionnaire and the terms of the
Indenture set forth in this ANNEX I. From and after the date the Initial Shelf
Registration Statement is declared effective, the Company shall, as promptly as
practicable after the date a Notice and Questionnaire is delivered to the
address specified in the Notice and Questionnaire, and in any event upon the
later of (x) ten (10) Business Days after such date or (y) ten (10) Business
Days after the expiration of any period in which the Guarantor and the Company
shall have suspended the effectiveness of the Shelf Registration Statement
pursuant to Section 3(b) hereof (each, a "DEFERRAL Period") in effect when the
Notice and Questionnaire is delivered or put into effect within ten (10)
Business Days of such delivery date:

                                       I-4

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

                  (ii) provide such Holder copies of any documents filed
pursuant to Section 2(d)(i); and

                  (iii) notify such Holder as promptly as practicable after the
effectiveness under the Securities Act of any post-effective amendment filed
pursuant to Section 2(d)(i);

         provided, that if such Notice and Questionnaire is delivered during a
Deferral Period, the Company shall so inform the Holder delivering such Notice
and Questionnaire and shall take the actions set forth in clauses (i), (ii) and
(iii) above upon expiration of the Deferral Period in accordance with Section
3(b). Notwithstanding anything contained herein to the contrary, (i) neither the
Company nor the Guarantor shall be under any obligation to name any Holder that
is not a Notice Holder as a selling securityholder in any Registration Statement
or related Prospectus and (ii) the Amendment Effectiveness Deadline Date shall
be extended by up to ten (10) Business Days from the expiration of a Deferral
Period if such Deferral Period shall be in effect on the Amendment Effectiveness
Deadline Date.

         3. Registration Procedures

         In connection with the filing of any Registration Statement or
Registration Statements pursuant to Section 2 hereof, the Company and the
Guarantor shall effect such registrations to permit the sale of the securities
covered thereby in accordance with the intended method or methods of disposition
thereof, and pursuant thereto and in connection with any Registration Statement
filed by the Company or the Guarantor hereunder the Company and the Guarantor
shall:

         (a) Prepare and file with the SEC on or prior to the Filing Date, a
Registration Statement or Registration Statements as prescribed by Section 2
hereof, and use their reasonable best efforts to cause each such Registration
Statement(s) to become effective and remain effective as provided herein.
Neither the Company nor the Guarantor shall file any Registration Statement or
Prospectus or any amendments or supplements thereto if the Notice Holders of a
majority in Amount of Registrable Securities covered by such Registration
Statement or, in the case of the Initial Shelf Registration Statement, the
Initial Purchaser, shall reasonably object.

                                       I-5

<PAGE>

         (b) Prepare and file with the SEC such amendments and post-effective
amendments to each Shelf Registration, as may be necessary to keep such
Registration Statement continuously effective for its Effectiveness Period;
cause the related Prospectus to be supplemented by any Prospectus supplement
required by applicable law, and as so supplemented to be filed pursuant to Rule
424 (or any similar provisions then in force) promulgated under the Securities
Act; and comply with the provisions of the Securities Act and the Exchange Act
applicable to it with respect to the disposition of all securities covered by
such Registration Statement as so amended or in such Prospectus as so
supplemented except as provided in Section 3(b).

         (c) Notify the Notice Holders promptly (but in any event within two
Business Days), (i) when a Prospectus or any prospectus supplement or
post-effective amendment has been filed, and, with respect to a Registration
Statement or any post-effective amendment, when the same has become effective
under the Securities Act (including in such notice a written statement that any
Notice Holder may, upon request, obtain, at the sole expense of the Company, one
conformed copy of such Registration Statement or post-effective amendment
including financial statements and schedules, documents incorporated or deemed
to be incorporated by reference and exhibits), (ii) of the issuance by the SEC
of any stop order suspending the effectiveness of a Registration Statement or of
any order preventing or suspending the use of any preliminary Prospectus or the
initiation of any proceedings for that purpose, (iii) of the happening of any
event, the existence of any condition or any information becoming known that
makes any statement made in such Registration Statement or related Prospectus or
any document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires the making of any changes in or
amendments or supplements to such Registration Statement, Prospectus or
documents so that, in the case of the Registration Statement, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, and that in the case of the Prospectus, it will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, (iv) of the
Company's determination that a post-effective amendment to a Registration
Statement would be appropriate, or (v) that the effectiveness of the Shelf
Registration Statement is suspended pursuant to Section 3(b) hereof.

         (d) Use their reasonable best efforts to prevent the issuance of any
order suspending the effectiveness of a Registration Statement or of any order
preventing or suspending the use of a Prospectus and, if any such order is
issued, to use its reasonable best efforts to obtain the withdrawal of any such
order at the earliest possible moment.

         (e) If requested, furnish to each Notice Holder, at the sole expense of
the Company, one conformed copy of the Registration Statement or Registration
Statements and each post-effective amendment thereto, including financial
statements and schedules, and, if requested, all documents incorporated or
deemed to be incorporated therein by reference and all exhibits.

         (f) Deliver to each Holder, at the sole expense of the Company, as many
copies of the Prospectus (including each form of preliminary Prospectus) and
each amendment or

                                       I-6


<PAGE>
supplement thereto and any documents incorporated by reference therein as such
Persons may reasonably request; and, subject to the second paragraph of Section
4 hereof, the Company and the Guarantor hereby consent to the use of such
Prospectus and each amendment or supplement thereto by the Notice Holders in
connection with the offering and sale of the Registrable Securities covered by
such Prospectus and any amendment or supplement thereto in the manner set forth
therein.

         (g) Prior to any public offering of Registrable Securities, to use
their reasonable best efforts to register or qualify, to the extent required by
applicable law, and to cooperate with the Notice Holders in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities or offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States as
any Notice Holder may reasonably request in writing; keep each such registration
or qualification (or exemption therefrom) effective during the period such
Registration Statement is required to be kept effective and do any and all other
acts or things reasonably necessary or advisable to enable the disposition in
such jurisdictions of the Registrable Securities covered by the applicable
Registration Statement; provided further, however, that neither the Company nor
the Guarantor shall be required to (A) qualify generally to do business in any
jurisdiction where it is not then so qualified, (B) take any action that would
subject it to general service of process in any such jurisdiction where it is
not then so subject or (C) subject itself to taxation in excess of a nominal
dollar amount in any such jurisdiction where it is not then so subject.

         (h) Cooperate with each Notice Holder to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be sold, which certificates shall not bear any restrictive legends (unless
required by applicable law) and shall be in a form eligible for deposit with the
Depositary; and enable such Registrable Securities to be in such denominations
and registered in such names as such Notice Holder may reasonably request.

         (i) Use their reasonable best efforts to cause the Registrable
Securities covered by any Shelf Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be reasonably
necessary to enable the Notice Holder or Notice Holders thereof to consummate
the disposition of such Registrable Securities, except as may be required solely
as a consequence of the nature of such Notice Holder's business, in which case
the Company and the Guarantor will cooperate in all reasonable respects with the
filing of such Registration Statement and the granting of such approvals.

         (j) Upon the occurrence of any event contemplated by Section 3(c)(ii),
3(c)(iii) or 3(c)(iv) hereof, as promptly as practicable prepare and (subject to
Section 3(a) hereof) use their reasonable best efforts to file with the SEC, at
the expense of the Company and the Guarantor, a supplement or post-effective
amendment to the Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be incorporated therein by
reference, or file any other required document so that, as thereafter delivered
to the purchasers of the Registrable Securities being sold thereunder, any such
Prospectus will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.

                                       I-7
<PAGE>
         (k) Prior to the effective date of the Initial Registration Statement,
(i) provide the Trustee with certificates for the Securities in a form eligible
for deposit with the Depositary and (ii) provide a CUSIP number for the
Securities.

         (l) Prior to the effective date of the Initial Registration Statement
relating to the Underlying Shares, provide a CUSIP number for the Underlying
Shares.

         (m) Comply with all applicable rules and regulations of the SEC and
make generally available to its securityholders earning statements (which need
not be audited) satisfying the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder (or any similar rule promulgated under the Securities
Act) for a 12-month period commencing on the first day of the first fiscal
quarter of the Guarantor commencing after the effective date of a Registration
Statement, which statements shall be made available no later than 45 days after
the end of any 12-month period or 90 days after the end of any 12-month period
if such period is a fiscal year of the Guarantor.

         (n) Cooperate with each Notice Holder of the Registrable Securities
covered by any Registration Statement and their counsel in connection with any
filings required to be made with the NASD, including, if the Conduct Rules of
the NASD or any successor thereto as amended from time to time so require,
engaging a "qualified independent underwriter" ("QIU") as contemplated therein
and otherwise applying the provisions of this ANNEX I to such QIU as though it
were a participating underwriter.

         (o) Cause the Indenture to be qualified under the TIA not later than
the effective date of the first Registration Statement relating to the
Securities; and in connection therewith, cooperate with the Trustee and the
Notice Holders to effect such changes to the Indenture as may be required for
the Indenture to be so qualified in accordance with the terms of the TIA; and
execute, and use their reasonable best efforts to cause the Trustee to execute,
all documents as may be required to effect such changes and all other forms and
documents required to be filed with the SEC to enable the Indenture to be so
qualified in a timely manner.

         (p) Use their reasonable best efforts to take all other steps necessary
or advisable to effect the registration of the Registrable Securities covered by
a Registration Statement or Registration Statements, as contemplated hereby.

         4. Holder's Obligations

         Each Holder agrees, by acquisition of the Registrable Securities, that
no Holder shall be entitled to sell any of such Registrable Securities pursuant
to a Registration Statement or to receive a Prospectus relating thereto, unless
such Holder has furnished the Company and the Guarantor with a Notice and
Questionnaire as required pursuant to Section 2(d) hereof (including the
information required to be included in such Notice and Questionnaire) and the
information set forth in the next sentence. Each Notice Holder agrees promptly
to furnish to the Company all information required to be disclosed in order to
make the information previously furnished to the Company and the Guarantor by
such Notice Holder not misleading and any other information regarding such
Notice Holder and the distribution of such Registrable Securities as the Company
and or the Guarantor may from time to time reasonably request. Any sale of any
Registrable

                                       I-8

<PAGE>
Securities by any Holder shall constitute a representation and warranty by such
Holder that the information relating to such Holder and its plan of distribution
is as set forth in the Prospectus delivered by such Holder in connection with
such disposition, that such Prospectus does not as of the time of such sale
contain any untrue statement of a material fact relating to or provided by such
Holder or its plan of distribution and that such Prospectus does not as of the
time of such sale omit to state any material fact relating to or provided by
such Holder or its plan of distribution necessary to make the statements in such
Prospectus, in the light of the circumstances under which they were made, not
misleading.

         Each Holder agrees by acquisition of its Registrable Securities that,
upon actual receipt of any notice from the Company and the Guarantor of the
happening of any event of the kind described in Section 3(c)(ii), 3(c)(iii) or
3(c)(iv) hereof, or of a Deferral Period pursuant to Section 2(b) hereof, such
Holder will forthwith discontinue disposition of such Registrable Securities
covered by such Registration Statement or Prospectus until such Holder's receipt
of the copies of the supplemented or amended Prospectus contemplated by Section
3(j) hereof, or until it is advised in writing by the Company and the Guarantor
that the use of the applicable Prospectus may be resumed, and has received
copies of any amendments or supplements thereto.

         Notwithstanding anything to the contrary contained herein, neither the
Company nor the Guarantor shall have any liability for any incremental expenses
incurred as a result of an underwritten offering of any Registrable Securities.

         5. Registration Expenses

         (a) All fees and expenses incident to the performance of or compliance
with this ANNEX I by the Company and the Guarantor shall be borne by the Company
and the Guarantor. Notwithstanding anything in this ANNEX I to the contrary,
each Holder shall pay all underwriting discounts and brokerage commissions with
respect to any Registrable Securities sold by it and be solely responsible for
any and all fees and disbursements of counsel of such Holder with respect to the
Registrable Securities and continue with the obligations of Holders set forth in
this ANNEX I.

         6. Indemnification

         The Company and the Guarantor, jointly and severally, agree to
indemnify and hold harmless (i) each Notice Holder, (ii) each Person, if any,
who controls (within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act) any Notice Holder (any of the Persons referred
to in this clause (ii) being hereinafter referred to as a "controlling person"),
and (iii) the respective officers, directors, partners, employees,
representatives and agents of the Notice Holders (including predecessor Notice
Holders) or any controlling person (any person referred to in clause (i), (ii)
or (iii) may hereinafter be referred to as an "Indemnified Holder"), from and
against any and all losses, claims, damages, liabilities and judgments
(including, without limitation, reasonable legal fees and other expenses
incurred in connection with any suit, action or proceeding or any claim
asserted) caused by any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement or Prospectus, or any
amendment or supplement thereto or any related preliminary Prospectus, or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or

                                       I-9

<PAGE>
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with information relating to any Indemnified Holder furnished to the
Company or the Guarantor in writing by such Indemnified Holder expressly for use
in therein; provided, however, neither the Company nor the Guarantor shall be
liable to any Indemnified Holder under the indemnity agreement of this paragraph
with respect to any preliminary Prospectus to the extent that any such loss,
claim, damage, liability, judgment or expense of such Indemnified Holder results
from the fact that such Indemnified Holder sold Registrable Securities under a
Registration Statement to a Person as to whom it shall be established that there
was not sent or given, at or prior to the written confirmation of such sale, a
copy of the Prospectus (or of the preliminary Prospectus as then amended or
supplemented if the Company or the Guarantor shall have furnished such
Indemnified Holder with such amendment or supplement thereto on a timely basis),
in any case where such delivery is required by applicable law and the loss,
claim, damage, liability or expense of such Indemnified Holder results from an
untrue statement or omission of a material fact contained in the preliminary
Prospectus which was corrected in the Prospectus (or in the preliminary
Prospectus as then amended or supplemented if the Company or the Guarantor shall
have furnished such Indemnified Holder with such amendment or supplement
thereto, as the case may be, on a timely basis). The Company and the Guarantor
shall notify such Indemnified Holder promptly of the institution, threat or
assertion of any claim, proceeding (including any governmental investigation) or
litigation in connection with the matters addressed by this Agreement which
involves the Company, the Guarantor or such Indemnified Holder.

         (a) Each Holder agrees, severally and not jointly, to indemnify and
hold harmless the Company and the Guarantor, each of their respective directors,
officers and each Person who controls the Company or the Guarantor within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act to the same extent as the foregoing indemnity from the Company and the
Guarantor to each Holder, but only with reference to such losses, claims,
damages or liabilities which are caused by any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with information relating to a Holder furnished to the Company or the Guarantor
in writing by such Holder expressly for use in any Registration Statement or
Prospectus, or any amendment or supplement thereto or any related preliminary
Prospectus.

         If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any Person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such Person (the "INDEMNIFIED PERSON") shall promptly
notify the Person or Persons against whom such indemnity may be sought (each an
"INDEMNIFYING PERSON") in writing, and such Indemnifying Person, upon request of
the Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others entitled
to indemnification pursuant to this Section 6 that the Indemnifying Person may
designate in such proceeding and shall pay the fees and expenses of such counsel
related to such proceeding. In any such proceeding, the Indemnifying Person
shall be able to participate in such proceeding and, to the extent that it so
elects, jointly with any other similarly situated Indemnifying Person, to assume
the defense thereof, subject to the right of the Indemnified Person to be
separately

                                      I-10

<PAGE>
represented and to direct its own defense if the named parties to any such
proceeding include both the Indemnified Person and the Indemnifying Person and
the Indemnified Person has been advised by counsel that representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. In any such proceeding, any Indemnified Person
shall have the right to retain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Person unless (i) such
Indemnifying Person and the Indemnified Person shall have mutually agreed to the
contrary or (ii) the named parties in any such proceeding (including any
impleaded parties) include an Indemnifying Person and an Indemnified Person and
representation of both parties by the same counsel would be inappropriate due to
actual or potential differing interests between them. It is understood that an
Indemnifying Person shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all
Indemnified Persons, and that all such fees and expenses shall be reimbursed as
they are incurred. Any such separate firm for the Indemnified Holders shall be
designated in writing by the Holders of the majority in Amount of Registrable
Securities, and any such separate firm for the Company, its directors,
respective officers and such control Persons of the Company shall be designated
in writing by the Company, and any such separate firm for the Guarantor, its
directors, respective officers and such control Persons of the Guarantor shall
be designated in writing by the Guarantor. The Indemnifying Person shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, such Indemnifying Person agrees to indemnify any Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. No Indemnifying Person shall, without the prior written consent of the
Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Person,
unless such settlement includes an unconditional release of such Indemnified
Person from all liability on claims that are the subject matter of such
proceeding.

         If the indemnification provided for in the first and second paragraphs
of this Section 6 is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Indemnifying Person on the one hand and the Indemnified
Person on the other hand pursuant to the Purchase Agreement or from the offering
of the Registrable Securities pursuant to any Shelf Registration or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Indemnifying
Person on the one hand and the Indemnified Person on the other in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Guarantor shall be deemed to
be equal to the total net proceeds from the initial offering and sale of the
Registrable Securities to which such losses, claims, damages or liabilities
relate. The relative benefits received by any Holder shall be deemed to be equal
to the value of receiving registration rights under this Annex for the
Registrable Securities. The relative fault of the parties shall be determined by
reference to,

                                      I-11

<PAGE>
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Guarantor or such Indemnified Holder
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.

         Each of the Company, the Guarantor and Notice Holders agree that it
would not be just and equitable if contribution pursuant to this Section 6 were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an Indemnified Person as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses incurred by such
Indemnified Person in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 6, in no event shall
any Holder be required to contribute any amount in excess of the amount by which
the net proceeds received by such Holder from the sale of the Registrable
Securities pursuant to a Shelf Registration Statement exceeds the amount of
damages which such Holder would have otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.

         The remedies provided for in this Section 6 are not exclusive and shall
not limit any rights or remedies that may otherwise be available to any
indemnified party at law or in equity.

         The indemnity and contribution agreements contained in this Section 6
shall remain operative and in full force and effect regardless of (i) any
termination of this ANNEX I or the discharge of the Indenture, (ii) any
investigation made by or on behalf of any Holder or any Person controlling any
Holder or by or on behalf of the Company or the Guarantor, their respective
officers or directors or any other Person controlling any of the Company or the
Guarantor and (iii) acceptance of and payment for any of the Registrable
Securities.

         7. Rules 144 and 144A

         The Company and the Guarantor covenant that they will file the reports
required to be filed by them under the Securities Act and the Exchange Act, if
any, in a timely manner in accordance with the requirements of the Securities
Act and the Exchange Act and, for so long as any Registrable Securities remain
outstanding, if at any time neither the Company nor the Guarantor are not
required to file such reports, they will, upon the request of any Holder, make
available such information necessary to permit sales pursuant to Rule 144A. The
Company and the Guarantor further covenant that, for so long as any Registrable
Securities remain outstanding, they will use their reasonable best efforts to
take such further action as any Holder may reasonably request in writing, all to
the extent required from time to time to enable such holder to sell Securities
without registration under the Securities Act within the limitation of the
exemptions provided by (a) Rule 144(k) and Rule 144A, or (b) any similar rule or
regulation hereafter adopted by the SEC. Notwithstanding the foregoing, nothing
in this Section 7 shall be

                                      I-12

<PAGE>
deemed to require the Company or the Guarantor to register any of their
securities pursuant to the Exchange Act.

         8. Indenture to Control. In the event of any conflict between the terms
of this Indenture (excluding this ANNEX I) and this ANNEX I, the terms of the
Indenture shall control.






                                      I-13