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                                                                     EXHIBIT 4.7

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                               GRANT PRIDECO, INC.

                                    INDENTURE

                                   RELATING TO

                          9 5/8% SENIOR NOTES DUE 2007

                          DATED AS OF DECEMBER 4, 2000

                     UNITED STATES TRUST COMPANY OF NEW YORK

                                     TRUSTEE

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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                PAGE
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<S>                                                                                            <C>
ARTICLE 1.  DEFINITIONS AND INCORPORATION BY REFERENCE.........................................  1

   Section 1.01.   Definitions.................................................................  1

   Section 1.02.   Other Definitions........................................................... 18

   Section 1.03.   Incorporation by Reference of Trust Indenture Act........................... 19

   Section 1.04.   Rules of Construction....................................................... 20

ARTICLE 2.  THE NOTES.......................................................................... 20

   Section 2.01.   Form and Dating............................................................. 20

   Section 2.02.   Execution and Authentication................................................ 21

   Section 2.03.   Registrar and Paying Agent.................................................. 22

   Section 2.04.   Paying Agent to Hold Money in Trust......................................... 22

   Section 2.05.   Holder Lists................................................................ 22

   Section 2.06.   Transfer and Exchange....................................................... 23

   Section 2.07.   Replacement Notes........................................................... 38

   Section 2.08.   Outstanding Notes........................................................... 38

   Section 2.09.   Treasury Notes.............................................................. 39

   Section 2.10.   Temporary Notes............................................................. 39

   Section 2.11.   Cancellation................................................................ 39

   Section 2.12.   Defaulted Interest.......................................................... 40

   Section 2.13.   CUSIP Numbers............................................................... 40

ARTICLE 3.  REDEMPTION AND PREPAYMENT.......................................................... 40

   Section 3.01.   Notices to Trustee.......................................................... 40

   Section 3.02.   Selection of Notes to Be Redeemed........................................... 40

   Section 3.03.   Notice of Redemption........................................................ 41

   Section 3.04.   Effect of Notice of Redemption.............................................. 42

   Section 3.05.   Deposit of Redemption Price................................................. 42

   Section 3.06.   Notes Redeemed in Part...................................................... 42

   Section 3.07.   Optional Redemption......................................................... 43
</TABLE>

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<TABLE>
<S>                                                                                            <C>
   Section 3.08.   Repurchase at the Option of Holders......................................... 44

ARTICLE 4.  COVENANTS.......................................................................... 46

   Section 4.01.   Payment of Notes............................................................ 46

   Section 4.02.   Maintenance of Office or Agency............................................. 47

   Section 4.03.   Reports..................................................................... 47

   Section 4.04.   Compliance Certificate...................................................... 48

   Section 4.05.   Taxes....................................................................... 48

   Section 4.06.   Stay, Extension and Usury Laws.............................................. 49

   Section 4.07.   Restricted Payments......................................................... 49

   Section 4.08.   Dividend and Other Payment Restrictions Affecting Subsidiaries.............. 52

   Section 4.09.   Incurrence of Indebtedness and Issuance of Preferred Stock.................. 54

   Section 4.10.   Transactions with  Affiliates............................................... 56

   Section 4.11.   Liens....................................................................... 58

   Section 4.12.   Additional Subsidiary Guarantees............................................ 58

   Section 4.13.   Designation of Restricted and Unrestricted Subsidiaries..................... 58

   Section 4.14.   Corporate Existence......................................................... 59

   Section 4.15.   Asset Sales................................................................. 59

   Section 4.16.   Offer to Repurchase Upon Change of Control.................................. 61

   Section 4.17.   Limitations on Line of Business............................................. 62

   Section 4.18.   Sale and Leaseback Transactions............................................. 62

   Section 4.19.   Payments for Consent........................................................ 63

   Section 4.20.   Suspension of Covenants..................................................... 63

ARTICLE 5.  SUCCESSORS......................................................................... 64

   Section 5.01.   Merger, Consolidation, or Sale of Assets.................................... 64

   Section 5.02.   Successor Corporation Substituted........................................... 65

ARTICLE 6.  DEFAULTS AND REMEDIES.............................................................. 65

   Section 6.01.   Events of Default........................................................... 65

   Section 6.02.   Acceleration................................................................ 67

   Section 6.03.   Other Remedies.............................................................. 68

   Section 6.04.   Waiver of Past Defaults..................................................... 68

   Section 6.05.   Control by Majority......................................................... 68
</TABLE>

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<TABLE>
<S>                                                                                            <C>
   Section 6.06.   Limitation on Suits......................................................... 69

   Section 6.07.   Rights of Holders of Notes to Receive Payment............................... 69

   Section 6.08.   Collection Suit by Trustee.................................................. 69

   Section 6.09.   Trustee May File Proofs of Claim............................................ 70

   Section 6.10.   Priorities.................................................................. 70

   Section 6.11.   Undertaking for Costs....................................................... 71

   Section 6.12.   Restoration of Rights and Remedies.......................................... 71

   Section 6.13.   Rights and Remedies Cumulative.............................................. 71

   Section 6.14.   Delay or Omission Not Waiver................................................ 72

ARTICLE 7.  TRUSTEE............................................................................ 72

   Section 7.01.   Duties of Trustee........................................................... 72

   Section 7.02.   Rights of Trustee........................................................... 73

   Section 7.03.   Individual Rights of Trustee................................................ 74

   Section 7.04.   Trustee's Disclaimer........................................................ 74

   Section 7.05.   Notice of Defaults.......................................................... 75

   Section 7.06.   Reports by Trustee to Holders of the Notes.................................. 75

   Section 7.07.   Compensation and Indemnity.................................................. 75

   Section 7.08.   Replacement of Trustee...................................................... 76

   Section 7.09.   Successor Trustee by Merger, etc............................................ 77

   Section 7.10.   Eligibility; Disqualification............................................... 78

   Section 7.11.   Preferential Collection of Claims Against Company........................... 78

ARTICLE 8.  NOTE GUARANTEES.................................................................... 78

   Section 8.01.   Subsidiary Guarantees....................................................... 78

   Section 8.02.   Additional Guarantees....................................................... 80

   Section 8.03.   Limitation on Guarantor Liability........................................... 80

   Section 8.04.   Merger and Consolidation of Guarantors...................................... 81

   Section 8.05.   Release..................................................................... 82

ARTICLE 9.  AMENDMENT, SUPPLEMENT AND WAIVER................................................... 82

   Section 9.01.   Without Consent of Holders of Notes......................................... 82

   Section 9.02.   With Consent of Holders of Notes............................................ 83

   Section 9.03.   Compliance with Trust Indenture Act......................................... 85

   Section 9.04.   Revocation and Effect of Consents........................................... 85
</TABLE>

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<TABLE>
<S>                                                                                            <C>
   Section 9.05.   Notation on or Exchange of Notes............................................ 85

   Section 9.06.   Trustee to Sign Amendments, etc............................................. 85

ARTICLE 10. MISCELLANEOUS...................................................................... 86

   Section 10.01.  Trust Indenture Act Controls................................................ 86

   Section 10.02.  Notices..................................................................... 86

   Section 10.03.  Communication by Holders of Notes with Other Holders of Notes............... 87

   Section 10.04.  Certificate and Opinion as to Conditions Precedent.......................... 87

   Section 10.05.  Statements Required in Certificate or Opinion............................... 88

   Section 10.06.  Rules by Trustee and Agents................................................. 88

   Section 10.07.  No personal Liability of Directors, Officers, Employees and Stockholders.... 88

   Section 10.08.  Governing Law............................................................... 89

   Section 10.09.  No Adverse Interpretation of Other Agreements............................... 89

   Section 10.10.  Successors.................................................................. 89

   Section 10.11.  Severability................................................................ 89

   Section 10.12.  Counterpart Originals....................................................... 89

   Section 10.13.  Table of Contents, Headings, etc............................................ 89

   EXHIBITS

   Exhibit A:  FORM OF NOTE
   Exhibit B:  FORM OF CERTIFICATE OF TRANSFER
   Exhibit C:  FORM OF CERTIFICATE OF EXCHANGE
   Exhibit D:  FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
</TABLE>

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                             CROSS-REFERENCE TABLE*

                               TRUST INDENTURE ACT

<TABLE>
<CAPTION>
TIA Section                                                      Indenture Section
------------                                                     -----------------
<S>                                                                  <C>
310 (a)(1).......................................................... 7.10
     (a)(2) ........................................................ 7.10
     (a)(3)......................................................... N.A.
     (a)(4)......................................................... N.A.
     (a)(5)......................................................... 7.10
     (i)(b)......................................................... 7.10
     (ii)(c)........................................................ N.A.
311 (a)............................................................. 7.11
     (b)............................................................ 7.11
     (iii)(c)....................................................... N.A.
312 (a)............................................................. 2.06
     (b)............................................................ 10.03
     (iv)(c)........................................................ 10.03
313 (a)............................................................. 7.06
     (b)(2)......................................................... 7.07
     (v)(c)......................................................... 7.06;10.02
     (vi)(d)........................................................ 7.06
314 (a)............................................................. 4.03;
                                                                     4.04 (a);
                                                                     10.02
     (c)(1)......................................................... 10.04
     (c)(2)......................................................... 10.04
     (c)(3)......................................................... N.A.
     (vii)(e)....................................................... 10.05
     (f)............................................................ N.A.
315 (a)............................................................. 7.01
     (b)............................................................ 7.05,10.02
     (A)(c)......................................................... 7.01
     (d)............................................................ 7.01
     (e)............................................................ 6.11
316 (a)(last sentence).............................................. 2.10
     (a)(1)(A)...................................................... 6.05
     (a)(1)(B)...................................................... 6.04
     (a)(2)......................................................... N.A.
     (b)............................................................ 6.07
     (B)(c)......................................................... 2.12
317 (a)(1).......................................................... 6.08
     (a)(2)......................................................... 6.09
     (b)............................................................ 2.05
</TABLE>

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<TABLE>
<S>                                                                  <C>
318 (a)............................................................. 10.01
     (b)............................................................ N.A.
     (c)............................................................ 10.01
</TABLE>

   N.A. means not applicable.
   *This Cross-Reference Table is not part of this Indenture.

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                  INDENTURE, dated as of December 4, 2000 (the "Indenture"),
among Grant Prideco, Inc., a Delaware corporation (the "Company"), the
Subsidiary Guarantors identified herein and United States Trust Company of New
York, a New York corporation, as trustee (the "Trustee").

                  The Company, the Subsidiary Guarantors and the Trustee agree
as follows for the benefit of each other and for the equal and ratable benefit
of the Holders of the 9 5/8% Senior Notes due 2007 (the "Initial Notes") and the
9 5/8% Senior Notes due 2007 to be used in exchange for such Initial Notes in
the Exchange Offer (the "Exchange Notes" and, together with the Initial Notes
and any notes that may be issued in the future in accordance with Section
2.01(d), the "Notes"):

                                   ARTICLE 1.

                   DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01.     DEFINITIONS.

                  "144A Global Note" means a global note in substantially the
form of Exhibit A hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of, and registered in the name
of, the Depositary or its nominee that shall be issued in a denomination equal
to the outstanding principal amount of the Notes sold in reliance on Rule 144A.

                  "Additional Notes" means any additional notes that the Company
may issue pursuant to Section 2.01 of this Indenture.

                  "Acquired Debt" means, with respect to any specified person,
(1) Indebtedness of any other person existing at the time the other person is
merged with or into or became a Restricted Subsidiary of the specified person,
whether or not such Indebtedness is incurred in connection with, or in
contemplation of, such other person merging with or into or becoming a
Restricted Subsidiary of such specified person, and (2) Indebtedness secured by
a Lien encumbering any asset acquired by such specified person.

                  "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 purposes of this definition,
"control," as used with respect to any person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a person will be deemed to be controlling. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" have correlative meanings.

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                  "Applicable Procedures" means, with respect to any transfer or
exchange of or for any beneficial interests in any Global Note, the rules and
the procedures of the Depositary that apply to such transfer or exchange.

                  "Asset Sale" means (1) the sale, lease, conveyance or other
disposition of any assets or rights, other than sales of inventory or equipment
in the ordinary course of business consistent with past practices; provided that
the sale, conveyance or other disposition of all or substantially all of the
Company's assets and its Restricted Subsidiaries taken as a whole will be
governed by Section 4.16 and/or Section 5.01 and not by Section 4.15; and (2)
the issuance of Equity Interests in any of the Restricted Subsidiaries or the
sale of Equity Interests in any of the Restricted Subsidiaries.

                  Notwithstanding the preceding, the following items will not be
deemed to be Asset Sales (1) any single transaction or series of related
transactions that involves assets having a fair market value of less than $1.0
million; (2) a transfer of assets between or among the Company and its
Restricted Subsidiaries; (3) an issuance of Equity Interests by a Restricted
Subsidiary to the Company or to another Restricted Subsidiary; and (4) a
Restricted Payment or Permitted Investment that is permitted by 4.07.

                  "Attributable Debt" in respect of a sale and leaseback
transaction means, at the time of determination, the present value of the
obligation of the lessee for net rental payments during the remaining term of
the lease included in such sale and leaseback transaction including any period
for which such lease has been extended or may, at the option of the lessor, be
extended. Such present value shall be calculated using a discount rate equal to
the rate of interest implicit in such transaction, determined in accordance with
GAAP.

                  "Bankruptcy Law" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors.

                  "Beneficial Owner" has the meaning assigned to such term in
Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the
beneficial ownership of any particular "person" (as that term is used in Section
13(d)(3) of the Exchange Act), such "person" will be deemed to have beneficial
ownership of all securities that such "person" has the right to acquire by
conversion or exercise of other securities, whether such right is currently
exercisable or is exercisable only upon the occurrence of a subsequent
condition. The terms "Beneficially Owns" and "Beneficially Owned" have a
corresponding meaning.

                  "Board of Directors" means (1) with respect to a corporation,
the board of directors or a duly authorized committee of the board of directors
of the corporation; (2) with respect to a partnership, the board of directors or
a duly authorized committee of the board of directors of the general partner of
the partnership; and (3) with respect to any other person, the board or
committee of such person serving a similar function.

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                  "Board Resolution" means, with respect to any entity, a copy
of a resolution certified by the Secretary or Assistant Secretary of that entity
to have been duly adopted by the Board of Directors of that entity and to be in
full force and effect on the date of certification, and delivered to the
Trustee.

                  "Broker Dealer" has the meaning set forth in the Registration
Rights Agreement.

                  "Capital Lease Obligation" means, at the time any
determination is to be made, the amount of the liability in respect of a capital
lease that would at that time be required to be capitalized on a balance sheet
in accordance with GAAP.

                  "Capital Stock" means (1) in the case of a corporation,
corporate stock; (2) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents (however
designated) of corporate stock; (3) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited); and (4) any other interest or participation that confers on a person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing person.

                  "Cash Equivalents" means (1) United States dollars; (2)
securities issued or directly and fully guaranteed or insured by the United
States government or any agency or instrumentality of the United States
government (provided that the full faith and credit of the United States is
pledged in support of those securities) having maturities of not more than six
months from the date of acquisition; (3) certificates of deposit and eurodollar
time deposits with maturities of six months or less from the date of
acquisition, bankers' acceptances with maturities not exceeding six months and
overnight bank deposits, in each case, with any lender party to a Credit
Facility or with any domestic commercial bank having capital and surplus in
excess of $500.0 million and a Thomson Bank Watch Rating of "B" or better; (4)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (2) and (3) above entered into with
any financial institution meeting the qualifications specified in clause (3)
above; (5) commercial paper having the highest rating obtainable from Moody's or
S&P and in each case maturing within six months after the date of acquisition;
and (6) money market funds at least 95% of the assets of which constitute Cash
Equivalents of the kinds described in clauses (1) through (5) of this
definition, including any such funds of or to which the Trustee or any Affiliate
of the Trustee is the sponsor, an advisor, a trustee or a manager.

                  "Change of Control" means the occurrence of any of the
following (1) the direct or indirect sale, transfer, conveyance or other
disposition, other than by way of merger or consolidation, in one or a series of
related transactions, of all or substantially all of the properties or assets of
the Company and its Restricted Subsidiaries, taken as a whole, to any "person,"
as that term is used in Section 13(d)(3) of the Exchange Act; (2) the adoption
of a plan relating to the liquidation or dissolution of the Company; (3) the
consummation of any transaction, including, without limitation, any merger or

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consolidation, the result of which is that any "person," as defined in clause
(1) above becomes the ultimate Beneficial Owner, directly or indirectly, of more
than 50% of the Company's Voting Stock, measured by voting power rather than
number of shares; (4) the first day on which a majority of the members of the
Company's entire Board of Directors are not Continuing Directors; or (5) the
Company's consolidation or merger with or into, any person, or the consolidation
or merger of any person with or into, the Company, in any such event pursuant to
a transaction in which any of the Company's outstanding Voting Stock or such
other person is converted into or exchanged for cash, securities or other
property, other than any such transaction where the Company's Voting Stock
outstanding immediately prior to such transaction is converted into or exchanged
for Voting Stock (other than Disqualified Stock) of the surviving or transferee
person, or the direct parent company of the surviving or transferee person,
which, immediately after giving effect to such issuance, constitutes a majority
of the outstanding shares of such Voting Stock of such surviving or transferee
person, or the direct parent company of the surviving or transferee person.

                  For the purposes of this definition of "Change of Control,"
any transfer of any equity of an entity that was formed for the purpose of
acquiring the Company's Voting Stock will be deemed to be a transfer of an
Equity Interest in the Company.

                  "Change of Control Triggering Event" means, the occurrence of
a Change of Control, or if the Company is not subject to the Suspended
Covenants, there occurs both a Change of Control and a Rating Decline.

                  "Clearstream" means Clearstream Banking, societe anonyme,
Luxembourg.

                  "Closing Price" on any trading day with respect to the per
share price of any shares of common stock means the last reported sale price
regular way or, in case no such reported sale takes place on such day, the
average of the reported closing bid and asked prices regular way, in either case
on the New York Stock Exchange or, if the shares of common stock are not listed
or admitted to trading on that exchange, on the principal national securities
exchange on which the shares are listed or admitted to trading or, if not listed
or admitted to trading on any national securities exchange, on the National
Association of Securities Dealers Automated Quotations National Market System
or, if the shares are not listed or admitted to trading on any national
securities exchange or quoted on such automated quotation system but the Company
if a foreign issuer, as defined in Rule 3b-4(b) under the Exchange Act, and the
principal securities exchange on which the shares are listed or admitted to
trading is a Designated Offshore Securities Market, as defined in Rule 902(a)
under the Securities Act, the average of the reported closing bid and asked
prices regular way on that principal exchange, or, if the shares are not listed
or admitted to trading on any national securities exchange or quoted on that
automated quotation system and the Company and principal securities exchange do
not meet such requirements, the average of the closing bid and asked prices in
the over-the-counter marked as furnished by any New York Stock Exchange member
firm that is

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selected from time to time by the Company for that purpose and is
reasonably acceptable to the Trustee.

                  "Commission" means the Securities and Exchange Commission.

                  "common stock" means, with respect to any person, any and all
shares, interests, participations or other equivalents, however designated,
whether voting or non-voting, of that person's equity, other than preferred
stock of that person, whether now outstanding or issued after the date the Notes
are issued, including without limitation, all series and classes of that equity.

                  "Consolidated Cash Flow" means, with respect to any specified
person for any period, the Consolidated Net Income of such person for such
period, (1) plus an amount equal to any extraordinary loss plus any net loss
realized by such person or any of its Subsidiaries in connection with an Asset
Sale or in connection with a future write-down of the Company's or its
Restricted Subsidiaries' investment in Oil Country Tubular Limited in an amount
not to exceed $17.6 million, in either case to the extent such losses were
deducted in computing such Consolidated Net Income; (2) plus provision for taxes
based on income or profits of such person and its Restricted Subsidiaries for
such period, to the extent that such provision for taxes was deducted in
computing such Consolidated Net Income; (3) plus consolidated interest expense
of such person and its Restricted Subsidiaries for such period, whether paid or
accrued and whether or not capitalized (including, without limitation,
amortization of debt issuance costs and original issue discount, non-cash
interest payments, the interest component of any deferred payment obligations,
the interest component of all payments associated with Capital Lease
Obligations, imputed interest with respect to Attributable Debt, commissions,
discounts and other fees and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net of the effect of all payments made or
received pursuant to Hedging Obligations), to the extent that any such expense
was deducted in computing such Consolidated Net Income; (4) plus depreciation,
amortization (including amortization of goodwill and other intangibles but
excluding amortization of prepaid cash expenses that were paid in a prior
period) and other non-cash expenses (excluding any such non-cash expense to the
extent that it represents an accrual of or reserve for cash expenses in any
future period) of such person and its Restricted Subsidiaries for such period to
the extent that such depreciation, amortization and other non-cash expenses were
deducted in computing such Consolidated Net Income; (5) minus non-cash items
increasing such Consolidated Net Income for such period, other than the accrual
of revenue in the ordinary course of business, in each case, on a consolidated
basis and determined in accordance with GAAP.

                  "Consolidated Net Income" means, with respect to any specified
person for any period, the aggregate of the Net Income of such person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided, however, that, (1) the Net Income (but not loss)
of any person that is not a Restricted Subsidiary or that is accounted for by
the equity method of accounting will be included only to the extent of the
amount of dividends or distributions paid in

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cash to the specified person or a Restricted Subsidiary of the person; (2) the
Net Income of any Restricted Subsidiary will be excluded to the extent that the
declaration or payment of dividends or similar distributions by that Restricted
Subsidiary of that Net Income is not at the date of determination permitted
without any prior governmental approval (that has not been obtained) or,
directly or indirectly, by operation of the terms of its charter or any
agreement, instrument (other than those permitted under Section 4.08), judgment,
decree, order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its stockholders; (3) the Net Income of any person
acquired in a pooling of interests transaction for any period prior to the date
of such acquisition will be excluded; and (4) the cumulative effect of a change
in accounting principles will be excluded.

                  "Continuing Directors" means, as of any date of determination,
any member of the Company's Board of Directors who (1) was a member of such
Board of Directors on the date of this Indenture; or (2) was nominated for
election or elected to such Board of Directors with the approval of a majority
of the Continuing Directors who were members of such Board at the time of such
nomination or election.

                  "Corporate Trust Office of the Trustee" shall be at the
address of the Trustee specified in Section 10.02 hereof or such other address
as to which the Trustee may give notice to the Company.

                  "Credit Facilities" means, one or more debt facilities
(including, without limitation, the Revolving Credit Facility) or commercial
paper facilities, in each case with banks or other institutional lenders
providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
of credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time.

                  "Custodian" means the Trustee, as custodian with respect to
the Notes in global form, or any successor thereto.

                  "Default" means any event that is, or with the passage of time
or the giving of notice or both would be, an Event of Default.

                  "Definitive Note" means a certificated Note registered in the
name of the Holder thereof and issued in accordance with Section 2.06 hereof, in
substantially the form of Exhibit A hereto except that such Note shall not bear
the Global Note Legend and shall not have the "Schedule of Exchanges of
Interests in the Global Note" attached thereto.

                  "Depositary" means, with respect to the Notes issuable or
issued in whole or in part in global form, the person specified in Section 2.03
hereof as the Depositary with respect to the Notes, and any and all successors
thereto appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.

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                  "Disqualified Stock" means any Capital Stock that, by its
terms (or by the terms of any security into which it is convertible, or for
which it is exchangeable, in each case at the option of the holder of the
Capital Stock), or upon the happening of any event (other than upon an optional
redemption by the Company), matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
of the Capital Stock, in whole or in part, on or prior to the date that is 91
days after the date on which the Notes mature. Notwithstanding the preceding
sentence, any Capital Stock that would constitute Disqualified Stock solely
because the holders of the Capital Stock have the right to require the Company
to repurchase such Capital Stock upon the occurrence of a Change of Control or
an Asset Sale will not constitute Disqualified Stock if the terms of such
Capital Stock provide that the Company may not repurchase or redeem any such
Capital Stock pursuant to such provisions unless such repurchase or redemption
complies with Section 4.07.

                  "Domestic Subsidiary" means any one of the Company's
Subsidiaries that was formed under the laws of the United States or any state of
the United States or the District of Columbia.

                  "Equity Interests" means Capital Stock and all warrants,
options or other rights to acquire Capital Stock (but excluding any debt
security that is convertible into, or exchangeable for, Capital Stock).

                  "ERISA" means the Employee Retirement Income Security Act of
1974 and regulations promulgated thereunder.

                  "Euroclear" means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear System.

                  "Exchange Act" means the Securities and Exchange Act of 1934,
as amended.

                  "Exchange Notes" means the Notes to be issued in the Exchange
Offer pursuant to Section 2.06 hereof.

                  "Exchange Offer" has the meaning set forth in the Registration
Rights Agreement.

                  "Exchange Offer Registration Statement" has the meaning set
forth in the Registration Rights Agreement.

                  "Existing Indebtedness" means the Indebtedness of the Company
and its Subsidiaries (other than Indebtedness under the Revolving Credit
Facility) in existence on the Issue Date, until such amounts are repaid.

                  "Fixed Charges" means, with respect to any specified person
for any period, the sum, without duplication, of (1) the consolidated interest
expense of such

                                        7
<PAGE>   15

person and its Restricted Subsidiaries for such period, whether paid or accrued,
including, without limitation, amortization of debt issuance costs and original
issue discount, non-cash interest payments, the interest component of any
deferred payment obligations, the interest component of all payments associated
with Capital Lease Obligations, imputed interest with respect to Attributable
Debt, commissions, discounts and other fees and charges incurred in respect of
letter of credit or bankers' acceptance financings, and net of the effect of all
payments made or received pursuant to Hedging Obligations; plus (2) the
consolidated interest of such person and its Restricted Subsidiaries that was
capitalized during such period; plus (3) any interest expense on Indebtedness of
another person that is guaranteed by such person or one of its Restricted
Subsidiaries or secured by a Lien on assets of such person or one of its
Restricted Subsidiaries, whether or not such guarantee or Lien is called upon;
plus (4) the product of (a) all dividends, whether paid or accrued and whether
or not in cash, on any series of preferred stock of such person or any of its
Restricted Subsidiaries, other than dividends on Equity Interests payable solely
in the Company's Equity Interests (other than Disqualified Stock) or to the
Company or one of its Restricted Subsidiaries, times (b) a fraction, the
numerator of which is one and the denominator of which is one minus the then
current combined federal, state and local statutory tax rate of such person,
expressed as a decimal, in each case, on a consolidated basis and in accordance
with GAAP.

                  "Fixed Charge Coverage Ratio" means with respect to any
specified person for any period, the ratio of the Consolidated Cash Flow of such
person and its Restricted Subsidiaries for such period to the Fixed Charges of
such person and its Restricted Subsidiaries for such period. In the event that
the specified person or any of its Restricted Subsidiaries incurs, assumes,
guarantees, repays, repurchases or redeems any Indebtedness (other than ordinary
working capital borrowings) or issues, repurchases or redeems preferred stock
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated and on or prior to the date on which the event for
which the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio will be calculated
giving pro forma effect to such incurrence, assumption, guarantee, repayment,
repurchase or redemption of Indebtedness, or such issuance, repurchase or
redemption of preferred stock, and the use of the proceeds therefrom as if the
same had occurred at the beginning of the applicable four-quarter reference
period.

                  In addition, for purposes of calculating the Fixed Charge
Coverage Ratio, (1) acquisitions that have been made by the specified person or
any of its Restricted Subsidiaries, including through mergers or consolidations
and including any related financing transactions, during the four-quarter
reference period or subsequent to such reference period and on or prior to the
Calculation Date will be given pro forma effect (calculated in accordance with
Regulation S-X) as if they had occurred on the first day of the four-quarter
reference period and Consolidated Cash Flow for such reference period will be
calculated without giving effect to clause (3) of the proviso set forth in the
definition of Consolidated Net Income; (2) the Consolidated Cash Flow
attributable to discontinued operations, as determined in accordance with GAAP,
and operations or

                                        8
<PAGE>   16

businesses disposed of prior to the Calculation Date, will be excluded; and (3)
the Fixed Charges attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, will be excluded, but only to the extent that the obligations
giving rise to such Fixed Charges will not be obligations of the specified
person or any of its Restricted Subsidiaries following the Calculation Date.

                  "GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect on the date of this Indenture.

                  "Global Note Legend" means the legend set forth in Section
2.06(g)(ii), which is required to be placed on all Global Notes issued under
this Indenture.

                  "Global Notes" means, individually and collectively, each of
the Restricted Global Notes and the Unrestricted Global Notes in the form of
Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(iv), 2.06(c) or
2.06(f) hereof.

                  "guarantee" means a guarantee other than by endorsement of
negotiable instruments for collection in the ordinary course of business, direct
or indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.

                  "Guarantors" means each of (1) the Domestic Subsidiaries; and
(2) any other Subsidiary that executes a Subsidiary Guarantee in accordance with
the provisions of this Indenture; and their respective successors and assigns.

                  "Hedging Obligations" means, with respect to any specified
person, the obligations of such person incurred in the normal course of business
and consistent with past practices and not for speculative purposes under (1)
interest rate swap agreements, interest rate cap agreements and interest rate
collar agreements; (2) foreign exchange contracts and currency protection
agreements entered into with one or more financial institutions is designed to
protect the person or entity entering into the agreement against fluctuations in
interest rates or currency exchange rates with respect to Indebtedness incurred
and not for purposes of speculation; (3) any commodity futures contract,
commodity option or other similar agreement or arrangement designed to protect
against fluctuations in the price of commodities used by that entity at the
time; and (4) other agreements or arrangements designed to protect such person
against fluctuations in interest rates or currency exchange rates.

                  "incur" means create, incur, issue, assume, guarantee or
otherwise become liable, directly or indirectly, contingently or otherwise, for
any Indebtedness. The term

                                        9
<PAGE>   17

"incurrence" when used as a noun shall have a correlative meaning. The accretion
of principal of a non-interest bearing or other discount security shall not be
deemed the incurrence of Indebtedness.

                  "Indebtedness" means, with respect to any specified person,
any indebtedness of such person, whether or not contingent (1) in respect of
borrowed money; (2) evidenced by bonds, notes, debentures or similar instruments
or letters of credit (or reimbursement agreements in respect thereof); (3) in
respect of banker's acceptances; (4) representing Capital Lease Obligations; (5)
representing the balance deferred and unpaid of the purchase price of any
property, except any such balance that constitutes an accrued expense or trade
payable; or (6) representing any Hedging Obligations, if and to the extent any
of the preceding items (other than letters of credit and Hedging Obligations)
would appear as a liability upon a balance sheet of the specified person
prepared in accordance with GAAP. In addition, the term "Indebtedness" includes
all Indebtedness of others secured by a Lien on any asset of the specified
person (whether or not such Indebtedness is assumed by the specified person)
and, to the extent not otherwise included, the guarantee by the specified person
of any indebtedness of any other person.

                  The amount of any Indebtedness outstanding as of any date will
be (1) the accreted value of the Indebtedness, in the case of any Indebtedness
issued with original issue discount; and (2) the principal amount of the
Indebtedness, together with any interest on the Indebtedness that is more than
30 days past due, in the case of any other Indebtedness.

                  "Indenture" means this Indenture, as amended or supplemented
from time to time in accordance with Article 9 hereof.

                  "Indirect Participant" means a person who holds a beneficial
interest in a Global Note through a Participant.

                  "Initial Notes" means $200.0 million in aggregate principal
amount of Notes issued under this Indenture on the date hereof.

                  "Initial Purchasers" means Lehman Brothers Inc., Deutsche Bank
Securities Inc., UBS Warburg LLC and Simmons & Company International.

                  "Institutional Accredited Investor" means an "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act.

                  "Investment Grade Rating" means a rating equal to or higher
than Baa3 (or the equivalent) by Moody's or BBB- (or the equivalent) by S&P.

                  "Investments" means, with respect to any person, all direct or
indirect investments by such person in other persons (including Affiliates) in
the forms of loans (including guarantees or other obligations), advances or
capital contributions (excluding commission, travel and similar advances to
officers and employees made in the ordinary

                                       10
<PAGE>   18

course of business), purchases or other acquisitions for consideration of
Indebtedness, Equity Interests or other securities, together with all items that
are or would be classified as investments on a balance sheet prepared in
accordance with GAAP. If the Company or any of its Restricted Subsidiaries sells
or otherwise disposes of any Equity Interests of any of its direct or indirect
Subsidiaries such that, after giving effect to any such sale or disposition,
such person is no longer a Subsidiary of the Company, the Company shall be
deemed to have made an Investment on the date of any such sale or disposition
equal to the fair market value of the Equity Interests of such Restricted
Subsidiary not sold or disposed of in an amount determined as provided in
Section 4.07(d). The acquisition by the Company or any of its Restricted
Subsidiaries of a person that holds an Investment in a third person will be
deemed to be an Investment by the Company or such Restricted Subsidiary in such
third person in an amount equal to the fair market value of the Investment held
by the acquired person in such third person in an amount determined as provided
Section 4.07(d).

                  "Issue Date" means the date that any Notes are issued under
this Indenture.

                  "Letter of Transmittal" means the letter of transmittal to be
prepared by the Company and sent to all Holders of the Notes for use by such
Holders in connection with the Exchange Offer.

                  "Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law, including any conditional sale or other title retention agreement, any
lease in the nature thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction.

                  "Liquidated Damages" means all liquidated damages then owing
pursuant to the Registration Rights Agreement.

                  "Moody's" means Moody's Investors Service, Inc. or any
successor to the rating agency business thereof.

                  "Net Income" means, with respect to any specified person, the
net income (loss) of such person, determined in accordance with GAAP and before
any reduction in respect of preferred stock dividends, excluding, however, (1)
any gain (but not loss), together with any related provision for taxes on such
gain (but not loss), realized in connection with: (a) any Asset Sale; or (b) the
disposition of any securities by such person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such person or any of
its Restricted Subsidiaries; and (2) any extraordinary gain (but not loss),
together with any related provision for taxes on such extraordinary gain (but
not loss).

                                       11
<PAGE>   19

                  "Net Proceeds" means the aggregate cash proceeds received by
the Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale, including, without limitation,
legal, accounting and investment banking fees, and sales or brokerage
commissions, and any relocation expenses incurred as a result of the Asset Sale,
taxes paid or payable as a result of the Asset Sale, in each case, after taking
into account any available tax credits or deductions and any tax sharing
arrangements, and amounts required to be applied to the repayment of
Indebtedness secured by a Lien on the asset or assets that were the subject of
such Asset Sale, and any reserve for adjustment in respect of the sale price of
such asset or assets established in accordance with GAAP.

                  "Non-Recourse Debt" means Indebtedness (1) as to which neither
the Company nor any of its Restricted Subsidiaries (a) provides credit support
of any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable as a guarantor or
otherwise, or (c) constitutes the lender; (2) no default with respect to which
(including any rights that the holders thereof may have to take enforcement
action against an Unrestricted Subsidiary) would permit upon notice, lapse of
time of both any holder of any other Indebtedness (other than the Notes) of the
Company or any of its Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity; and (3) as to which the lenders have been notified in
writing that they will not have any recourse to the stock or assets of the
Company or any of its Restricted Subsidiaries.

                  "Notes" has the meaning assigned to it in the preamble to this
Indenture.

                  "Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.

                  "Offering" means the offering of the Notes by the Company
pursuant to the Company's Offering Memorandum, dated November 29, 2000.

                  "Officer" means, with respect to any person, the Chairman of
the Board, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, the Treasurer, and Assistant Treasurer,
the Controller, the Secretary, any Assistant Secretary or any Vice-President of
such person.

                  "Officers' Certificate" means a certificate signed on behalf
of the Company by at least two Officers of the Company, one of whom must be the
principal executive officer, the principal financial officer, the treasurer or
the principal accounting officer of the Company, that meets the requirements of
Sections 10.04 and 10.05.

                                       12
<PAGE>   20

                  "Opinion of Counsel" means an opinion of legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Sections
10.04 and 10.05 hereof. The counsel may be an employee of or counsel to the
Company, any Subsidiary of the Company or the Trustee.

                  "Participant" means, with respect to the Depositary, Euroclear
or Clearstream, a person who has an account with the Depositary, Euroclear or
Clearstream, respectively, and, with respect to the Depository Trust Company,
shall include Euroclear and Clearstream.

                  "Permitted Business" means the lines of business conducted by
the Company and its Restricted Subsidiaries on the date hereof and any business
incidental or reasonably related thereto or which is a reasonable extension
thereof as determined in good faith by the Company's Board of Directors and set
forth in an Officers' Certificate delivered to the Trustee.

                  "Permitted Investments" means (1) any Investment in the
Company or in any of its Restricted Subsidiaries; (2) any Investment in Cash
Equivalents; (3) any Investment by the Company or any of its Restricted
Subsidiaries in a person engaged in a Permitted Business, if as a result of such
Investment, (a) such person becomes one of the Company's Restricted
Subsidiaries; or (b) such person is merged, consolidated or amalgamated with or
into, or transfers or conveys substantially all of its assets to, or is
liquidated into, the Company or any of its Restricted Subsidiaries; (4) any
Investment made as a result of the receipt of non-cash consideration from an
Asset Sale that was made pursuant to and in compliance with Section 4.15; (5)
any acquisition of assets solely in exchange for the issuance of the Company's
Equity Interests (other than Disqualified Stock); (6) any Investments received
in compromise of obligations of such persons incurred in the ordinary course of
trade creditors or customers that were incurred in the ordinary course of
business, including pursuant to any plan of reorganization or similar
arrangement upon the bankruptcy or insolvency of any trade creditor or customer;
(7) Hedging Obligations permitted to be incurred under Section 4.09; and (8)
other Investments in any person having an aggregate fair market value (measured
on the date each such investment was made and without giving effect to
subsequent changes in value), when taken together with all other Investments
made pursuant to this clause (8) that are at the time outstanding, not to exceed
$15.0 million.

                  "Permitted Liens" means (1) Liens on assets of the Company and
any Guarantor securing Credit Facilities; (2) Liens in favor of the Company or
the Guarantors; (3) Liens on property of a person existing at the time such
person is merged with or into or consolidated with the Company or any of its
Subsidiaries; provided, however, that such Liens were in existence prior to the
contemplation of such merger or consolidation and do not extend to any assets
other than those of the person merged into or consolidated with the Company or
the Subsidiary; (4) Liens on property existing at the time of acquisition of the
property by the Company or any of its Subsidiaries; provided, however, that such
Liens were in existence prior to the contemplation of such acquisition; (5)
Liens to secure the performance of statutory obligations, surety or appeal
bonds,

                                       13
<PAGE>   21

performance bonds or other obligations of a like nature incurred in the ordinary
course of business; (6) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by Section 4.09(b)(iv) covering only the assets acquired
with such Indebtedness; (7) Liens existing on the date of this Indenture; (8)
Liens for taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate proceedings
promptly instituted and diligently concluded, provided that any reserve or other
appropriate provision as is required in conformity with GAAP has been made
therefor; and (9) Liens incurred by the Company or any of its Restricted
Subsidiaries in the ordinary course of business with respect to obligations that
do not exceed $5.0 million at any one time outstanding.

                  "Permitted Refinancing Indebtedness" means any Indebtedness of
the Company or any of its Restricted Subsidiaries issued in exchange for, or the
net proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided, however, that (1) the
principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount (or accreted
value, if applicable) of the Indebtedness extended, refinanced, renewed,
replaced, defeased or refunded (plus all accrued interest on the Indebtedness
and the amount of all expenses and premiums incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity date later than
the final maturity date of, and has a Weighted Average Life to Maturity equal to
or greater than the Weighted Average Life to Maturity of, the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; (3) if the
Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded
is subordinated in right of payment to the Notes, such Permitted Refinancing
Indebtedness has a final maturity date later than the final maturity date of,
and is subordinated in right of payment to, the Notes on terms at least as
favorable to the Holders of Notes as those contained in the documentation
governing the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; and (4) such Indebtedness is incurred either by the
Company or by the Restricted Subsidiary who is the obligor on the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded.

                  "person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company or government or other entity.

                  "preferred stock" means, with respect to any person, any and
all shares, interests, participations or other equivalents, however designated,
whether voting or non-voting, of that person's equity that have a preference as
to the payment of dividends or as to payments upon a liquidation of that person,
whether now outstanding or issued after the date hereof, including without
limitation, all series and classes of such equity.

                  "Private Placement Legend" means the legend set forth in
Section 2.06(g)(i) to be placed on all Notes issued under this Indenture except
where otherwise permitted by the provisions of this Indenture.

                                       14
<PAGE>   22

                  "Public Equity Offering" means an underwritten primary public
offering of Common Stock of the Company pursuant to an effective registration
statement under the Securities Act.

                  "QIB" means a "qualified institutional buyer" as defined in
Rule 144A.

                  "Rating Agency" means each of S&P and Moody's, or if S&P or
Moody's or both shall not make a rating on the Notes publicly available, a
nationally recognized statistical rating agency or agencies, as the case may be,
selected by the Company (as certified by a resolution of the Company's Board of
Directors) which shall be substituted for S&P or Moody's, or both, as the case
may be.

                  "Rating Category" means (1) with respect to S&P, any of the
following categories: AAA, AA, A, BBB, BB, B, CCC, CC, C and D (or equivalent
successor categories); (2) with respect to Moody's any of the following
categories: Aaa, Aa, A, Baa, Ba, B, Caa, Ca and C (or equivalent successor
categories) and (3) the equivalent of any such category of S&P and Moody's used
by another Rating Agency. In determining whether the rating of the Notes has
decreased by one or more gradations, gradations within Rating Categories (+ and
- for S&P: 1, 2 and 3 for Moody's; or the equivalent gradations for another
Rating Agency) shall be taken into account (e.g., with respect to S&P, a decline
in a rating from BB+ to BB, as well from BB- to B, will constitute a decrease of
one gradation).

                  "Rating Decline" means (1) a decrease of two or more
gradations (including gradations within Rating Categories as well as between
Rating Categories) in the rating of the Notes by either Rating Agency or (2) a
withdrawal of the rating of the Notes by either Rating Agency, provided,
however, that such decrease or withdrawal occurs on, or within 90 days
following, the date of public notice of the occurrence of a Change of Control or
of the intention by the Company to effect a Change of Control, which period
shall be extended so long as the rating of the Notes is under publicly announced
consideration for downgrade by either Rating Agency.

                  "Reference Period" means the latest two fiscal quarters for
which financial statements are publicly available.

                  "Registration Rights Agreement" means the Registration Rights
Agreement, dated as of December 4, 2000, by and among the Company and the
Initial Purchasers, as such agreement may be amended, modified or supplemented
from time to time and, with respect to any Additional Notes, one or more
registration rights agreements between the Company and the other parties
thereto, as such agreement(s) may be amended, modified or supplemented from time
to time, relating to rights given by the Company to the purchasers of Additional
Notes to register such Additional Notes under the Securities Act.

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

                                       15
<PAGE>   23

                  "Regulation S Global Note" means a Global Note in
substantially the form of Exhibit A hereto bearing the Global Note Legend and
the Private Placement Legend and deposited with or on behalf of and registered
in the name of the Depositary or its nominee, issued in a denomination equal to
the outstanding principal amount of the Notes initially sold in reliance on Rule
903 of Regulation S.

                  "Responsible Officer," when used with respect to the Trustee,
means any officer within the Corporate Trust Department of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his or her
knowledge of and familiarity with the particular subject.

                  "Restricted Definitive Note" means a Definitive Note bearing
the Private Placement Legend.

                  "Restricted Global Note" means a permanent Global Note in
substantially the form of Exhibit A attached hereto that bears the Global Note
Legend and that has the "Schedule of Exchanges of Interests in the Global Note"
attached thereto, and that is deposited with or on behalf of and registered in
the name of the Depositary or a nominee of the Depositary, representing a series
of Notes that bear the Private Placement Legend.

                  "Restricted Investment" means an Investment other than a
Permitted Investment.

                  "Restricted Period" means the 40-day distribution compliance
period as defined in Regulation S.

                  "Restricted Subsidiary" of a person means any Subsidiary of
such person that is not an Unrestricted Subsidiary.

                  "Revolving Credit Facility" means that certain Revolving
Credit and Letter of Credit Agreement, dated as of April 14, 2000, by and among
the Company and a syndicate of United States and Canadian banks, including any
related notes, guarantees, collateral documents, instruments and agreements
executed in connection therewith, and in each case as amended, modified,
renewed, refunded, replaced or refinanced from time to time.

                  "Rule 144" means Rule 144 promulgated under the Securities
Act.

                  "Rule 144A" means Rule 144A promulgated under the Securities
Act.

                  "Rule 903" means Rule 903 promulgated under the Securities
Act.

                  "Rule 904" means Rule 904 promulgated the Securities Act.

                                       16
<PAGE>   24

                  "S&P" means Standard & Poor's Ratings Group, a division of
McGraw-Hill Companies, Inc., or any successor to the rating agency business
thereof.

                  "sale and leaseback transaction" of any person means an
arrangement with any lender or investor or to which such lender or investor is a
party providing for the leasing by such person of any property or asset of such
person which has been or is being sold or transferred by such person more than
365 days after the acquisition thereof or the completion of construction or
commencement of operation thereof to such lender or investor or to any person to
whom funds have been or are to be advanced by such lender or investor on the
security of such property or asset. The stated maturity of such arrangement is
the date of the last payment of rent or any other amount due under such
arrangement prior to the first date on which such arrangement may be terminated
by the lessee without payment of a penalty.

                  "Securities Act" means the Securities Act of 1933, as amended.

                  "Shelf Registration Statement" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.

                  "Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.

                  "Securities Act" means the Securities Act of 1933, as amended.

                  "Stated Maturity" means, with respect to any installment of
interest or principal on any series of Indebtedness, the date on which the
payment of interest or principal was scheduled to be paid in the original
documentation governing such Indebtedness, and will not include any contingent
obligations to repay, redeem or repurchase any such interest or principal prior
to the date originally scheduled for the payment thereof.

                  "Subsidiary" means, with respect to any specified person (1)
any corporation, association or other business entity of which more than 50% of
the total voting power of shares of Capital Stock entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees of the corporation, association or other business entity is
at the time owned or controlled, directly or indirectly, by that person or one
or more of the other Subsidiaries of that person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the managing general partner
of which is such person or a Subsidiary of such person or (b) the only general
partners of which are that person or one or more Subsidiaries of that person (or
any combination thereof).

                  "Subsidiary Guarantee" means the guarantee of the Notes by
each of the Guarantors pursuant to this Indenture and in the form of the
guarantee endorsed on the

                                       17
<PAGE>   25

form of note attached as Exhibit A to this Indenture and any additional
guarantee of the Notes to be executed by any of the Company's Subsidiaries
pursuant to Section 8.02 hereof.

                  "Unrestricted Global Note" means a permanent Global Note in
substantially the form of Exhibit A attached hereto that bears the Global Note
Legend and that has the "Schedule of Exchanges of Interests in the Global Note"
attached thereto, and that is deposited with or on behalf of and registered in
the name of the Depositary or a nominee of the Depositary, representing a series
of Notes that do not bear the Private Placement Legend.

                  "Unrestricted Definitive Note" means one or more Definitive
Notes that do not bear and are not required to bear the Private Placement
Legend.

                  "Unrestricted Subsidiary" means any one of the Company's
Subsidiaries (or any successor to any of them) that is designated by the
Company's Board of Directors as an Unrestricted Subsidiary pursuant to a Board
Resolution, but only to the extent that such Subsidiary (1) has no Indebtedness
other than Non-Recourse Debt; (2) is not party to any agreement, contract,
arrangement or understanding with the Company or any of its Restricted
Subsidiaries unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such Restricted Subsidiary
than those that might be obtained at the time from persons who are not
Affiliates of the Company or such Restricted Subsidiary; (3) is a person with
respect to which neither the Company nor any of its Restricted Subsidiaries has
any direct or indirect obligation (a) to subscribe for additional Equity
Interests or (b) to maintain or preserve such person's financial condition or to
cause such person to achieve any specified levels of operating results; (4) has
not guaranteed or otherwise directly or indirectly provided credit support for
any Indebtedness of the Company or any of its Restricted Subsidiaries; and (5)
has at least one director on its Board of Directors that is not a director or
executive officer of the Company or any of its Restricted Subsidiaries and has
at least one executive officer that is not a director or executive officer of
the Company or any of its Restricted Subsidiaries.

                  "TIA" means the Trust Indenture Act of 1939, as amended.

                  "Voting Stock" of any person as of any date means the Capital
Stock of such person that is at the time entitled to vote in the election of the
Board of Directors of such person.

                  "Weatherford" means Weatherford International, Inc., a
Delaware corporation.

                  "Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (1) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect of the Indebtedness,
by (b) the number of years (calculated to

                                       18
<PAGE>   26

the nearest one-twelfth) that will elapse between such date and the making of
such payment; by (2) the then outstanding principal amount of such Indebtedness.

Section 1.02.     OTHER DEFINITIONS.

                                                                   Defined in
Term                                                                  Section
----                                                              ------------
"Additional Amounts"                                              Section 5.03
"Additional Notes"                                                Section 2.02
"Affiliate Transaction"                                           Section 4.10
"Asset Sale Offer"                                                Section 4.10
"Authentication Order                                             Section 2.02
"Benefited Party"                                                 Section 8.01
"Change of Control Offer"                                         Section 4.14
"Change of Control Payment"                                       Section 4.14
"Change of Control Payment Date"                                  Section 4.14
"Company"                                                             Preamble
"Event of Default"                                                Section 6.01
"Excess Proceeds"                                                 Section 4.15
"Holders"                                                             Preamble
"Indenture"                                                           Preamble
"Interest Payment Date"                                           Section 2.03
"Make-Whole Premium"                                              Section 3.07
"Offer Amount"                                                    Section 3.02
"Offer Period"                                                    Section 3.02
"Payment Default"                                                 Section 6.01
"Purchase Date"                                                   Section 3.02
"Regular Record Date"                                             Section 2.03
"Reinstatement Date"                                              Section 4.20
"Repurchase Offer"                                                Section 3.02
"Suspended Covenants"                                             Section 4.20
"Treasury Yield"                                                  Section 3.07
"Trustee"                                                             Preamble

Section 1.03.     INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.

                  (a) Whenever this Indenture refers to a provision of the TIA,
the provision is incorporated by reference in and made a part of this Indenture.

                  (b) The following TIA terms used in this Indenture have the
following meanings:

                      "indenture securities" means the Notes;

                      "indenture security holder" means a holder of a Note;

                      "indenture to be qualified" means this Indenture;

                                       19
<PAGE>   27

                      "indenture trustee" or "institutional trustee" means the
                      Trustee; and

                      "obligor" on the Notes means the Company and any successor
                      obligor upon the Notes.

                  (c) All other terms used in this Indenture that are defined by
the TIA, defined in the TIA by reference to another statute or defined by
Commission rule under the TIA have the meanings so assigned to them.

Section 1.04.     Rules of Construction.

                  Unless the context otherwise requires:

                  (a) a term has the meaning assigned to it;

                  (b) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;

                  (c) "or" is not exclusive;

                  (d) words in the singular include the plural, and in the
plural include the singular;

                  (e) "including" means "including without limitation";
provisions apply to successive events and transactions; and

                  (f) references to sections of or rules under the Securities
Act shall be deemed to include substitute, replacement or successor sections or
rules adopted by the Commission from time to time.

                  (g) References in this Indenture to "Article" and "Section"
shall be to the Articles and Sections of this Indenture unless expressly
indicated otherwise.

                                   ARTICLE 2.

                                    THE NOTES

Section 2.01.     FORM AND DATING.

                  (a) General. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto. The Notes
may have notations, legends or endorsements required by law, stock exchange rule
or usage. Each Note shall be dated the date of its authentication. The Notes
shall be in denominations of $1,000 and integral multiples thereof. The terms
and provisions contained in the Notes shall constitute, and are hereby expressly
made, a part of this Indenture and, to the extent applicable, the Company and
the Trustee, by their execution and delivery of this Indenture, expressly agree
to such terms and provisions and to be bound thereby.

                                       20
<PAGE>   28

However, to the extent any provision of any Note conflicts with the express
provisions of this Indenture, the provisions of this Indenture shall govern and
be controlling.

                  (b) Form of Notes. Notes issued in global form shall be
substantially in the form of Exhibit A attached hereto (including the Global
Note Legend thereon and the "Schedule of Exchanges of Interests in the Global
Note" attached thereto). Notes issued in definitive form shall be substantially
in the form of Exhibit A attached hereto (but without the Global Note Legend
thereon and without the "Schedule of Exchanges of Interests in the Global Note"
attached thereto). Each Global Note shall represent such of the outstanding
Notes as shall be specified therein and each shall provide that it shall
represent the aggregate principal amount of outstanding Notes from time to time
endorsed thereon and that the aggregate principal amount of outstanding Notes
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Note to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Notes represented thereby shall be made by the
Trustee or the Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof as required by Section 2.06 hereof.

                  (c) Euroclear and Clearstream Procedures Applicable. The
provisions of the "Operating Procedures of the Euroclear System" and "Terms and
Conditions Governing Use of Euroclear" and the equivalent procedures of
Clearstream shall be applicable to transfers of beneficial interests in Global
Notes that are held by Participants through Euroclear or Clearstream.

                  (d) Subject to compliance with the provisions of Section 4.09,
the Company may issue Additional Notes under this Indenture; provided, however,
that in no event may more than $400.0 million aggregate principal amount of
Notes be issued under this Indenture.

Section 2.02.     EXECUTION AND AUTHENTICATION.

                  (a) One Officer shall sign the Notes for the Company by manual
or facsimile signature. The Company's seal may be reproduced on the Notes and
may be in facsimile form.

                  (b) If an Officer whose signature is on a Note no longer holds
that office at the time a Note is authenticated, the Note shall nevertheless be
valid.

                  (c) A Note shall not be valid until authenticated by the
manual signature of a Responsible Officer of the Trustee. The signature of a
Responsible Officer of the Trustee in the certificate of authentication on a
Note shall be conclusive evidence that the Note has been authenticated under
this Indenture.

                  (d) The Trustee shall, upon a written order of the Company
signed by an Officer (an "Authentication Order"), authenticate Notes for
original issue up to the

                                       21
<PAGE>   29

aggregate principal amount stated in Section 2.01(d) and in paragraph 4 of the
Notes. The aggregate principal amount of Notes outstanding at any time may not
exceed such amount except as provided in Section 2.07 hereof.

                  (e) The Trustee may appoint an authenticating agent acceptable
to the Company to authenticate Notes. An authenticating agent may authenticate
Notes 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 Holders or an
Affiliate of the Company.

Section 2.03.     REGISTRAR AND PAYING AGENT.

                  (a) The Company shall maintain an office or agency where
Notes may be presented for registration of transfer or for exchange
("Registrar") and an office or agency where Notes may be presented for payment
("Paying Agent"). The Registrar shall keep a register of the Notes and of their
transfer and exchange. The Company may appoint one or more co-registrars and one
or more additional paying agents. The term "Registrar" includes any co-registrar
and the term "Paying Agent" includes any additional paying agent. The Company
may change any Paying Agent or Registrar without notice to any Holder. The
Company shall notify the Trustee in writing of the name and address of any Agent
not a party to this Indenture. If the Company fails to appoint or maintain
another entity as Registrar or Paying Agent, the Trustee shall act as such. The
Company or any of its Subsidiaries may act as Paying Agent or Registrar.

                  (b) The Company initially appoints The Depository Trust
Company ("DTC") to act as Depositary with respect to the Global Notes.

                  (c) The Company initially appoints the Trustee to act as the
Registrar and Paying Agent and to act as Custodian with respect to the Global
Notes.

                  (d) The Global Notes shall be initially registered in the name
of Cede & Co., nominee of DTC.

Section 2.04.     PAYING AGENT TO HOLD MONEY IN TRUST.

                  The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent shall hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of principal of, and premium, Liquidated Damages, if any, or interest
on, the Notes, and shall notify the Trustee of any default by the Company in
making any such payment. While any such default continues, the Trustee may
require a Paying Agent to pay all money held by it to the Trustee. The Company
at any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the
Company or a Subsidiary) shall have no further liability for the money. If the
Company or a Subsidiary acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any

                                       22
<PAGE>   30

bankruptcy or reorganization proceedings relating to the Company, the Trustee
shall serve as Paying Agent for the Notes.

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 all Holders and shall otherwise comply with TIA ss. 312(a). If the
Trustee is not the Registrar, the Company shall furnish to the Trustee at least
seven Business Days or such shorter time as the Trustee may allow before each
interest payment date 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 the Holders of Notes, including the
aggregate principal amount of Notes held by each Holder.

Section 2.06.     TRANSFER AND EXCHANGE.

                  (a) Transfer and Exchange of Global Notes. A Global Note may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. Global Notes
will be exchanged by the Company for Definitive Notes if (i) the Depositary (x)
notifies the Company that it is unwilling or unable to continue to act as
depositary for the Global Notes and the Company thereupon fails to appoint a
successor Depositary, or (y) has ceased to be a clearing agency registered under
the Exchange Act and the Company fails to appoint a successor, and, in either
case, a successor Depositary is not appointed by the Company within 90 days
after the date of such notice from the Depositary, (ii) the Company in its sole
discretion determines that the Global Notes should be exchanged for Definitive
Notes and delivers a written notice to such effect to the Trustee, or (iii)
there has occurred and is continuing a Default or Event of Default. Upon the
occurrence of any of the preceding events in (i), (ii) or (iii) above,
Definitive Notes shall be issued in such names as the Depositary shall instruct
the Trustee. Global Notes also may be exchanged or replaced, in whole or in
part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and
delivered in exchange for, or in lieu of, a Global Note or any portion thereof,
pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be
authenticated and delivered in the form of, and shall be, a Global Note. A
Global Note may not be exchanged for another Note other than as provided in
Sections 2.06(a), 2.07, 2.10 and 9.05 hereof, although beneficial interests in a
Global Note may be transferred and exchanged as provided in Section 2.06(b),
(c), (d) or (f) hereof.

                  (b) Transfer and Exchange of Beneficial Interests in the
Global Notes. The transfer and exchange of beneficial interests in the Global
Notes shall be effected through the Depositary, in accordance with the
provisions of this Indenture and the Applicable Procedures. Beneficial interests
in the Restricted Global Notes shall be subject to restrictions on transfer
comparable to those set forth herein to the extent required by the Securities
Act. Transfers of beneficial interests in the Global Notes also

                                       23
<PAGE>   31

shall require compliance with either subparagraph (i) or (ii) below, as
applicable, as well as one or more of the other following subparagraphs, as
applicable:

                       (i) Transfer of Beneficial Interests in the Same Global
                  Note. Beneficial interests in any Restricted Global Note may
                  be transferred to persons who take delivery thereof in the
                  form of a beneficial interest in the same Restricted Global
                  Note in accordance with the transfer restrictions set forth in
                  the Private Placement Legend; provided, however, that prior to
                  the expiration of the Restricted Period, transfers of
                  beneficial interests in the Regulation S Global Note may not
                  be made to a U.S. person or for the account or benefit of a
                  U.S. person (other than the Initial Purchasers). Beneficial
                  interests in any Unrestricted Global Note may be transferred
                  to persons who take delivery thereof in the form of a
                  beneficial interest in an Unrestricted Global Note. No written
                  orders or instructions shall be required to be delivered to
                  the Registrar to effect the transfers described in this
                  Section 2.06(b)(i).

                       (ii) All Other Transfers and Exchanges of Beneficial
                  Interests in Global Notes. In connection with all transfers
                  and exchanges of beneficial interests that are not subject to
                  Section 2.06(b)(i) above, the transferor of such beneficial
                  interest must deliver to the Registrar either (A) (1) a
                  written order from a Participant or an Indirect Participant
                  given to the Depositary in accordance with the Applicable
                  Procedures directing the Depositary to credit or cause to be
                  credited a beneficial interest in another Global Note in an
                  amount equal to the beneficial interest to be transferred or
                  exchanged and (2) instructions given in accordance with the
                  Applicable Procedures containing information regarding the
                  Participant account to be credited with such increase or (B),
                  subject to Section 2.06(a), (1) a written order from a
                  Participant or an Indirect Participant given to the Depositary
                  in accordance with the Applicable Procedures directing the
                  Depositary to cause to be issued a Definitive Note in an
                  amount equal to the beneficial interest to be transferred or
                  exchanged and (2) instructions given by the Depositary to the
                  Registrar containing information regarding the person in whose
                  name such Definitive Note shall be registered to effect the
                  transfer or exchange referred to in (1) above. Upon
                  consummation of an Exchange Offer by the Company in accordance
                  with Section 2.06(f) hereof, the requirements of this Section
                  2.06(b)(ii) shall be deemed to have been satisfied upon
                  receipt by the Registrar of the instructions contained in the
                  Letter of Transmittal delivered by the Holder of such
                  beneficial interests in the Restricted Global Notes. Upon
                  satisfaction of all of the requirements for transfer or
                  exchange of beneficial interests in Global Notes contained in
                  this Indenture and the Notes or otherwise applicable under the
                  Securities Act, the Trustee shall adjust the principal amount
                  of the relevant Global Note(s) pursuant to Section 2.06(h)
                  hereof.

                                       24
<PAGE>   32

                       (iii) Transfer of Beneficial Interests to Another
                  Restricted Global Note. A beneficial interest in any
                  Restricted Global Note may be transferred to a person who
                  takes delivery thereof in the form of a beneficial interest in
                  another Restricted Global Note if the transfer complies with
                  the requirements of Section 2.06(b)(ii) above and the
                  Registrar receives the following:

                                    (A)  if the transferee shall take
                           delivery in the form of a beneficial interest in the
                           144A Global Note, then the transferor must deliver a
                           certificate in the form of Exhibit B hereto,
                           including the certifications in item (1) thereof; or

                                    (B)  if the transferee shall take
                           delivery in the form of a beneficial interest in the
                           Regulation S Global Note, then the transferor must
                           deliver a certificate in the form of Exhibit B
                           hereto, including the certifications in item (2)
                           thereof.

                       (iv) Transfer and Exchange of Beneficial Interests in a
                  Restricted Global Note for Beneficial Interests in the
                  Unrestricted Global Note. A beneficial interest in any
                  Restricted Global Note may be exchanged by any Holder thereof
                  for a beneficial interest in an Unrestricted Global Note or
                  transferred to a person who takes delivery thereof in the form
                  of a beneficial interest in an Unrestricted Global Note if the
                  exchange or transfer complies with the requirements of Section
                  2.06(b)(ii) above and:

                                    (A)  such exchange or transfer is effected
                           pursuant to the Exchange Offer in accordance with the
                           Registration Rights Agreement and the Holder of the
                           beneficial interest to be transferred, in the case of
                           an exchange, or the transferee, in the case of a
                           transfer, certifies in the applicable Letter of
                           Transmittal that it is not (1) a broker-dealer, (2) a
                           person participating in the distribution of the
                           Exchange Notes or (3) a person who is an affiliate
                           (as defined in Rule 144) of the Company;

                                    (B)  such transfer is effected pursuant
                           to the Shelf  Registration  Statement in accordance
                           with the Registration Rights Agreement;

                                    (C)  such transfer is effected by a
                           Participating Broker-Dealer pursuant to the Exchange
                           Offer Registration Statement in accordance with the
                           Registration Rights Agreement; or

                                    (D)  the Registrar receives the following:

                                         (1) if the Holder of such beneficial
                                    interest in a Restricted Global Note
                                    proposes to exchange such

                                       25
<PAGE>   33

                                    beneficial interest for a beneficial
                                    interest in an Unrestricted Global Note, a
                                    certificate from such Holder in the form of
                                    Exhibit C hereto, including the
                                    certifications in item (1)(a) thereof; or

                                            (2)  if the Holder of such
                                    beneficial interest in a Restricted Global
                                    Note proposes to transfer such beneficial
                                    interest to a person who shall take delivery
                                    thereof in the form of a beneficial interest
                                    in an Unrestricted Global Note, a
                                    certificate from such Holder in the form of
                                    Exhibit B hereto, including the
                                    certifications in item (4) thereof;

                                    and, in each such case set forth in this
                                    subparagraph (D), if the Registrar, the
                                    Company or the Trustee so requests or if the
                                    Applicable Procedures so require, an Opinion
                                    of Counsel in form reasonably acceptable to
                                    the Registrar or the Company, if applicable,
                                    to the effect that such exchange or transfer
                                    is in compliance with the Securities Act and
                                    that the restrictions on transfer contained
                                    herein and in the Private Placement Legend
                                    are no longer required in order to maintain
                                    compliance with the Securities Act.

                  If any such transfer is effected pursuant to subparagraph (B)
or (D) above at a time when a Restricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.

                  Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to persons who take delivery thereof in the form
of, a beneficial interest in a Restricted Global Note.

                  (c) Transfer or Exchange of Beneficial Interests for
Definitive Notes.

                           (i) Beneficial Interests in Restricted Global Notes
                  to Restricted Definitive Notes. Restricted Global Notes and
                  beneficial interests therein shall be exchangeable for
                  Definitive Notes if (i) the Depositary (x) notifies the
                  Company that it is unwilling or unable to continue to act as
                  depositary for the Restricted Global Notes and the Company
                  thereupon fails to appoint a successor Depositary, or (y) has
                  ceased to be a clearing agency registered under the Exchange
                  Act and the Company fails to appoint a successor, and, in
                  either case, a successor Depositary is not appointed by the
                  Company within 90 days after the date of such notice from the
                  Depositary, (ii) the Company, at its option, notifies the
                  Trustee in writing that it elects to cause the issuance of the
                  Definitive Notes or (iii) there

                                       26
<PAGE>   34

                  shall have occurred and be continuing a Default with respect
                  to the Notes. In all cases, Definitive Notes delivered in
                  exchange for any Restricted Global Note or beneficial
                  interests therein shall be registered in the names, and issued
                  in any approved denominations, requested by or on behalf of
                  the Depositary (in accordance with the Applicable Procedures).

                  In such event, the Trustee shall cause the Restricted Global
Notes to be canceled accordingly pursuant to Section 2.11 hereof, and the
Company shall execute and the Trustee shall authenticate and deliver to the
person designated a Definitive Note in the appropriate principal amount. Any
Definitive Note issued in exchange for a beneficial interest in a Restricted
Global Note pursuant to this Section 2.06(c) shall be registered in such name or
names and in such authorized denomination or denominations as the Holder of such
beneficial interest shall instruct the Registrar through instructions from the
Depositary and the Participant or Indirect Participant. The Trustee shall
deliver such Definitive Notes to the persons in whose names such Notes are so
registered. Any Definitive Note issued in exchange for a beneficial interest in
a Restricted Global Note pursuant to this Section 2.06(c)(i) shall bear the
Private Placement Legend and shall be subject to all restrictions on transfer
contained therein.

                           (ii) Beneficial Interests in Restricted Global Notes
                  to Unrestricted Definitive Notes. A Holder of a beneficial
                  interest in a Restricted Global Note may exchange such
                  beneficial interest for an Unrestricted Definitive Note or may
                  transfer such beneficial interest to a person who takes
                  delivery thereof in the form of an Unrestricted Definitive
                  Note only if:

                                    (A)  such exchange or transfer is effected
                           pursuant to the Exchange Offer in accordance with the
                           Registration Rights Agreement and the Holder of such
                           beneficial interest, in the case of an exchange, or
                           the transferee, in the case of a transfer, certifies
                           in the Letter of Transmittal that it is not (1) a
                           broker-dealer, (2) a person participating in the
                           distribution of the Exchange Notes or (3) a person
                           who is an affiliate (as defined in Rule 144) of the
                           Company;

                                    (B)  such transfer is effected pursuant to
                           the Shelf Registration  Statement in accordance with
                           the Registration Rights Agreement;

                                    (C)  such transfer is effected by a
                           Broker-Dealer pursuant to the Exchange Offer
                           Registration Statement in accordance with the
                           Registration Rights Agreement; or

                                    (D)  the Registrar receives the following:

                                         (1)  if the Holder of such beneficial
                                    interest in a Restricted Global Note
                                    proposes to exchange such

                                       27
<PAGE>   35

                                    beneficial interest for a Definitive Note
                                    that does not bear the Private Placement
                                    Legend, a certificate from such Holder in
                                    the form of Exhibit C hereto, including the
                                    certifications in item (1)(b) thereof; or

                                            (2)  if the Holder of such
                                    beneficial interest in a Restricted Global
                                    Note proposes to transfer such beneficial
                                    interest to a person who shall take delivery
                                    thereof in the form of a Definitive Note
                                    that does not bear the Private Placement
                                    Legend, a certificate from such Holder in
                                    the form of Exhibit B hereto, including the
                                    certifications in item (4) thereof;

                           and, in each such case set forth in this subparagraph
                           (D), if the Registrar, the Company or the Trustee so
                           requests or if the Applicable Procedures so require,
                           an Opinion of Counsel in form reasonably acceptable
                           to the Registrar, the Trustee or the Company, if
                           applicable, to the effect that such exchange or
                           transfer is in compliance with the Securities Act and
                           that the restrictions on transfer contained herein
                           and in the Private Placement Legend are no longer
                           required in order to maintain compliance with the
                           Securities Act.

                       (iii) Beneficial Interests in Unrestricted Global Notes
                  to Unrestricted Definitive Notes. Unrestricted Global Notes
                  and beneficial interests therein shall be exchangeable for
                  Definitive Notes if (i) the Depositary (x) notifies the
                  Company that it is unwilling or unable to continue as
                  depositary for the Unrestricted Global Notes, or (y) has
                  ceased to be a clearing agency registered under the Exchange
                  Act and the Company fails to appoint a successor, and, in
                  either case, a successor Depositary is not appointed by the
                  Company within 90 days after the date of such notice from the
                  Depositary, (ii) the Company, at its option, notifies the
                  Trustee in writing that it elects to cause the issuance of the
                  Definitive Notes or (iii) there shall have occurred and be
                  continuing a Default or Event of Default with respect to the
                  Notes. In all cases, Definitive Notes delivered in exchange
                  for any Unrestricted Global Note or beneficial interests
                  therein will be registered in the names, and issued in any
                  approved denominations, requested by or on behalf of the
                  Depositary (in accordance with the Applicable Procedures). In
                  such event, the Trustee shall cause the Unrestricted Global
                  Notes to be canceled accordingly pursuant to Section 2.11
                  hereof, and the Company shall execute and, upon receipt of an
                  Authentication Order in accordance with Section 2.02 with
                  respect to such Note, the Trustee shall authenticate and
                  deliver to the person designated in the instructions a
                  Definitive Note in the appropriate principal amount. Any
                  Definitive Note issued in exchange for a beneficial interest
                  pursuant to this Section 2.06(c)(iii) shall be registered in
                  such

                                       28
<PAGE>   36

                  name or names and in such authorized denomination or
                  denominations as the Holder of such beneficial interest shall
                  instruct the Registrar through instructions from the
                  Depositary and the Participant or Indirect Participant. The
                  Trustee shall deliver such Definitive Notes to the persons in
                  whose names such Notes are so registered. Any Definitive Note
                  issued in exchange for a beneficial interest pursuant to this
                  Section 2.06(c)(iii) shall not bear the Private Placement
                  Legend.

                  (d) Transfer and Exchange of Definitive Notes for Beneficial
Interests.

                       (i) Restricted Definitive Notes to Beneficial Interests
                  in Restricted Global Notes. If any Holder of a Restricted
                  Definitive Note proposes to exchange such Note for a
                  beneficial interest in a Restricted Global Note or to transfer
                  such Restricted Definitive Notes to a person who takes
                  delivery thereof in the form of a beneficial interest in a
                  Restricted Global Note, then, upon receipt by the Registrar of
                  the following documentation:

                                    (A)  if the Holder of such Restricted
                           Definitive Note proposes to exchange such Note for a
                           beneficial interest in a Restricted Global Note, a
                           certificate from such Holder in the form of Exhibit C
                           hereto, including the certifications in item (2)(b)
                           thereof;

                                    (B)  if such Restricted Definitive Note
                           is being transferred to a QIB in accordance with Rule
                           144A under the Securities Act, a certificate to the
                           effect set forth in Exhibit B hereto, including the
                           certifications in item (1) thereof;

                                    (C)  if such Restricted Definitive Note
                           is being transferred to a Non-U.S. person in an
                           offshore transaction in accordance with Rule 903 or
                           Rule 904 under the Securities Act, a certificate to
                           the effect set forth in Exhibit B hereto, including
                           the certifications in item (2) thereof;

                                    (D)  if such Restricted Definitive Note
                           is being transferred pursuant to an exemption from
                           the registration requirements of the Securities Act
                           in accordance with Rule 144 under the Securities Act
                           to a person who is an affiliate (as defined in Rule
                           144) of the Company, a certificate to the effect set
                           forth in Exhibit B hereto, including the
                           certifications in item (3)(a) thereof;

                                    (E)  if such Restricted Definitive Note
                           is being transferred to an Institutional Accredited
                           Investor in reliance on an exemption from the
                           registration requirements of the Securities Act other
                           than those listed in subparagraphs (B) through (D)
                           above, a certificate to the effect set forth in
                           Exhibit B hereto, including the

                                       29
<PAGE>   37

                           certifications, certificates and Opinion of
                           Counsel required by item (3) thereof, if
                           applicable; or

                                    (F)  if such Restricted Definitive Note
                           is being transferred to the Company or any of its
                           Subsidiaries, a certificate to the effect set forth
                           in Exhibit B hereto, including the certifications in
                           item (3)(b) thereof,

the Trustee shall cancel the Restricted Definitive Note, and increase or cause
to be increased the aggregate principal amount of, in the case of clause (A)
above, the appropriate Restricted Global Note, in the case of clause (B) above,
the 144A Global Note, in the case of clause (C) above, the Regulation S Global
Note, in the case of clauses (D) through (F) above, the appropriate Restricted
Global Note in accordance with Section 2.11 hereof.

                       (ii) Restricted Definitive Notes to Beneficial Interests
                  in Unrestricted Global Notes. A Holder of a Restricted
                  Definitive Note may exchange such Note for a beneficial
                  interest in an Unrestricted Global Note or transfer such
                  Restricted Definitive Note to a person who takes delivery
                  thereof in the form of a beneficial interest in an
                  Unrestricted Global Note only if:

                                    (A)  such exchange or transfer is
                           effected pursuant to the Exchange Offer in accordance
                           with the Registration Rights Agreement and the
                           Holder, in the case of an exchange, or the
                           transferee, in the case of a transfer, certifies in
                           the applicable Letter of Transmittal that it is not
                           (1) a broker-dealer, (2) a person participating in
                           the distribution of the Exchange Notes or (3) a
                           person who is an affiliate (as defined in Rule 144)
                           of the Company;

                                    (B)  such transfer is effected pursuant to
                           the Shelf  Registration in accordance with the
                           Registration Rights Agreement;

                                    (C)  such transfer is effected by a
                           Broker-Dealer pursuant to the Exchange Offer
                           Registration Statement in accordance with the
                           Registration Rights Agreement; or

                                    (D)  the Registrar receives the following:

                                         (1)    if the Holder of such Definitive
                                    Notes proposes to exchange such Notes for a
                                    beneficial interest in the Unrestricted
                                    Global Note, a certificate from such Holder
                                    in the form of Exhibit C hereto, including
                                    the certifications in item (1)(c) thereof;
                                    or

                                       30
<PAGE>   38

                                            (2)    if the Holder of such
                                    Definitive Notes proposes to transfer such
                                    Notes to a person who shall take delivery
                                    thereof in the form of a beneficial interest
                                    in the Unrestricted Global Note, a
                                    certificate from such Holder in the form of
                                    Exhibit B hereto, including the
                                    certifications in item (4) thereof;

                                    and, in each such case set forth in this
                                    subparagraph (D), if the Registrar, the
                                    Trustee or the Company so requests or if the
                                    Applicable Procedures so require, an Opinion
                                    of Counsel in form reasonably acceptable to
                                    the Registrar, the Trustee or the Company,
                                    if applicable, to the effect that such
                                    exchange or transfer is in compliance with
                                    the Securities Act and that the restrictions
                                    on transfer contained herein and in the
                                    Private Placement Legend are no longer
                                    required in order to maintain compliance
                                    with the Securities Act.

                  Upon satisfaction of the conditions of any of the
subparagraphs in this Section 2.06(d)(ii), the Trustee shall cancel the
Definitive Notes and increase or cause to be increased the aggregate principal
amount of the Unrestricted Global Note.

                       (iii) Unrestricted Definitive Notes to Beneficial
                  Interests in Unrestricted Global Notes. A Holder of an
                  Unrestricted Definitive Note may exchange such Note for a
                  beneficial interest in an Unrestricted Global Note or transfer
                  such Definitive Notes to a person who takes delivery thereof
                  in the form of a beneficial interest in an Unrestricted Global
                  Note at any time. Upon receipt of a request for such an
                  exchange or transfer, the Trustee shall cancel the applicable
                  Unrestricted Definitive Note and increase or cause to be
                  increased the aggregate principal amount of one of the
                  Unrestricted Global Notes.

                  If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or
(iii) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of Definitive Notes so transferred.

                  (e) Transfer and Exchange of Definitive Notes for Definitive
Notes. Upon request by a Holder of Definitive Notes and such Holder's compliance
with the provisions of this Section 2.06(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by his attorney, duly authorized in writing. In addition, the

                                       31
<PAGE>   39

requesting Holder shall provide any additional certifications, documents and
information, as applicable, required pursuant to the following provisions of
this Section 2.06(e).

                       (i) Restricted Definitive Notes to Restricted Definitive
                  Notes. Any Restricted Definitive Note may be transferred to
                  and registered in the name of persons who take delivery
                  thereof in the form of a Restricted Definitive Note if the
                  Registrar receives the following:

                                    (A)   if the transfer shall be made
                           pursuant to Rule 144A under the Securities Act, then
                           the transferor must deliver a certificate in the form
                           of Exhibit B hereto, including the certifications in
                           item (1) thereof; and

                                    (B)   if the transfer shall be made
                           pursuant to Rule 903 or Rule 904, then the transferor
                           must deliver a certificate in the form of Exhibit B
                           hereto, including the certifications in item (2)
                           thereof; and

                                    (C)   if the transfer shall be made
                            pursuant to any other exemption from the
                            registration requirements of the Securities Act,
                            then the transferor must deliver a certificate in
                            the form of Exhibit B hereto, including the
                            certifications, certificates and Opinion of Counsel
                            required by item (3) thereof, if applicable.

                       (ii) Restricted Definitive Notes to Unrestricted
                  Definitive Notes. Any Restricted Definitive Note may be
                  exchanged by the Holder thereof for an Unrestricted Definitive
                  Note or transferred to a person or persons who take delivery
                  thereof in the form of an Unrestricted Definitive Note if:

                                    (A)   such exchange or transfer is
                           effected pursuant to the Exchange Offer in accordance
                           with the Registration Rights Agreement and the
                           Holder, in the case of an exchange, or the
                           transferee, in the case of a transfer, certifies in
                           the applicable Letter of Transmittal that it is not
                           (1) a broker-dealer, (2) a person participating in
                           the distribution of the Exchange Notes or (3) a
                           person who is an affiliate (as defined in Rule 144)
                           of the Company;

                                    (B)   any such transfer is effected
                           pursuant to the Shelf Registration Statement in
                           accordance with the Registration Rights Agreement;

                                    (C)   any such transfer is effected by a
                           Participating Broker-Dealer pursuant to the Exchange
                           Offer Registration Statement in accordance with the
                           Registration Rights Agreement; or

                                       32
<PAGE>   40

                                    (D)    the Registrar receives the following:

                                            (1)   if the Holder of such
                                    Restricted Definitive Notes proposes to
                                    exchange such Notes for an Unrestricted
                                    Definitive Note, a certificate from such
                                    Holder in the form of Exhibit C hereto,
                                    including the certifications in item (1)(d)
                                    thereof; or

                                            (2)   if the Holder of such
                                    Restricted Definitive Notes proposes to
                                    transfer such Notes to a person who shall
                                    take delivery thereof in the form of an
                                    Unrestricted Definitive Note, a certificate
                                    from such Holder in the form of Exhibit B
                                    hereto, including the certifications in item
                                    (4) thereof;

                           and, in each such case set forth in this subparagraph
                           (D), if the Registrar, the Trustee or the Company so
                           requests, an Opinion of Counsel in form reasonably
                           acceptable to the Registrar, the Trustee and the
                           Company, if applicable, to the effect that such
                           exchange or transfer is in compliance with the
                           Securities Act and that the restrictions on transfer
                           contained herein and in the Private Placement Legend
                           are no longer required in order to maintain
                           compliance with the Securities Act.

                       (iii) Unrestricted Definitive Notes to Unrestricted
                  Definitive Notes. A Holder of Unrestricted Definitive Notes
                  may transfer such Notes to a person who takes delivery thereof
                  in the form of an Unrestricted Definitive Note. Upon receipt
                  of a request to register such a transfer, the Registrar shall
                  register the transfer of the Unrestricted Definitive Notes
                  pursuant to the instructions from the Holder thereof.

                  (f) Exchange Offer. Upon the occurrence of the Exchange Offer
in accordance with the Registration Rights Agreement, the Company shall issue
and, upon receipt of an Authentication Order in accordance with Section 2.02,
the Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by persons that
certify in the applicable Letters of Transmittal that (x) they are not
broker-dealers, (y) they are not participating in a distribution of the Exchange
Notes and (z) they are not affiliates (as defined in Rule 144) of the Company,
and accepted for exchange in the Exchange Offer and (ii) Unrestricted Definitive
Notes in an aggregate principal amount equal to the principal amount of the
Restricted Definitive Notes accepted for exchange in the Exchange Offer.
Concurrently with the issuance of such Notes, the Trustee shall cause the
aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Company shall execute and, upon receipt of an
Authentication Order in accordance with Section 2.02 with respect to such Notes,
the Trustee shall authenticate and deliver to the persons

                                       33
<PAGE>   41

designated by the Holders of Definitive Notes so accepted Unrestricted
Definitive Notes in the appropriate principal amount.

                  (g) Legends. The following legends shall appear on the face of
all Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.

                       (i) Private Placement Legend.

                                    (A)   Except as permitted by
                           subparagraph (B) below, each Global Note and each
                           Definitive Note (and all Notes issued in exchange
                           therefor or substitution thereof) shall bear the
                           legend in substantially the following form:

                  "THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
         U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES ACT"), OR
         OTHER SECURITIES LAWS. NEITHER THIS NOTE NOR ANY INTEREST OR
         PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
         PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
         REGISTRATION UNLESS THE TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
         THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT. THE HOLDER OF
         THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A
         "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE U.S.
         SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
         NOTE IN AN "OFFSHORE TRANSACTION" PURSUANT TO RULE 904 OF REGULATION S
         UNDER THE U.S. SECURITIES ACT, (2) AGREES THAT IT WILL NOT PRIOR TO (X)
         THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS
         PERMITTED BY RULE 144(k) UNDER THE U.S. SECURITIES ACT OR ANY SUCCESSOR
         PROVISION THEREUNDER) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF
         (OR OF ANY PREDECESSOR OF THIS NOTE) OR THE LAST DAY ON WHICH THE
         ISSUER OR ANY AFFILIATE OF THE ISSUER WERE THE OWNERS OF THIS NOTE (OR
         ANY PREDECESSOR OF THIS NOTE) AND (Y) SUCH LATER DATE, IF ANY, AS MAY
         BE REQUIRED BY APPLICABLE LAW (THE "RESALE RESTRICTION TERMINATION
         DATE"), OFFER, SELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE
         COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
         DECLARED EFFECTIVE UNDER THE U.S. SECURITIES ACT, (C) FOR SO LONG AS
         THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT
         REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
         RULE 144A UNDER THE U.S. SECURITIES ACT THAT PURCHASES FOR ITS OWN
         ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM

                                       34
<PAGE>   42

         NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE
         144A, (D) TO CERTAIN INSTITUTIONAL ACCREDITED INVESTORS WITHIN THE
         MEANING OF SUBPARAGRAPHS (A)(1), (2) OR (3) OR (7) OF RULE 501 UNDER
         THE SECURITIES ACT THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
         ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR FOR INVESTMENT
         PURPOSES AND NOT WITH A VIEW OR FOR OFFER OR SALE IN CONNECTION WITH
         ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (E) PURSUANT TO
         OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED
         STATES WITHIN THE MEANING OF REGULATION S UNDER THE U.S. SECURITIES ACT
         OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
         REQUIREMENTS OF THE U.S. SECURITIES ACT, AND (3) AGREES THAT IT WILL
         GIVE TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE
         SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT THE COMPANY,
         THE TRUSTEE, AND THE REGISTRAR SHALL HAVE THE RIGHT PRIOR TO ANY SUCH
         OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (E) OR (F) TO REQUIRE THAT
         AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION
         SATISFACTORY TO THE COMPANY, THE TRUSTEE AND THE REGISTRAR IS COMPLETED
         AND DELIVERED BY THE TRANSFEROR. THIS LEGEND WILL BE REMOVED UPON THE
         REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. AS
         USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND
         "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
         U.S. SECURITIES ACT."

                                    (B)   Notwithstanding the foregoing, any
                           Global Note or Definitive Note issued pursuant to
                           subparagraphs (b)(iv), (c)(ii), (c)(iii), (d)(ii),
                           (d)(iii), (e)(ii) or (e)(iii) to this Section 2.06
                           (and all Notes issued in exchange therefor or
                           substitution thereof) shall not bear the Private
                           Placement Legend.

                       (ii) Global Note Legend. Each Global Note shall bear a
                  legend in substantially the following form:

         "THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
         INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE
         BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY
         PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE
         SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF
         THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT
         IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL
         NOTE MAY BE

                                       35
<PAGE>   43

         DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO
         SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE
         TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF
         THE COMPANY."

         "UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
         DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE 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. UNLESS THIS CERTIFICATE IS
         PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
         COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY
         OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
         CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH
         OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
         (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE
         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."

                  (h) Cancellation or Adjustment of Global Notes. At such time
as all beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
cancelled in whole and not in part, each such Global Note shall be returned to
or retained and cancelled by the Trustee in accordance with Section 2.11 hereof.
At any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for or transferred to a person who shall take delivery thereof
in the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a person who shall take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note shall be increased accordingly
and an endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.

                  (i) General Provisions Relating to Transfers and Exchanges.

                           (i) To permit registrations of transfers and
                  exchanges, the Company shall execute and, upon receipt of an
                  Authentication Order in

                                       36
<PAGE>   44

                  accordance with Section 2.02 with respect to such Notes,
                  the Trustee shall authenticate Global Notes and Definitive
                  Notes upon the Company's order or at the Registrar's request.

                           (ii)  No service charge shall be made to a Holder of
                  a beneficial interest in a Global Note or to a Holder of a
                  Definitive Note for any registration of transfer or exchange,
                  but the Company may require payment of a sum sufficient to
                  cover any transfer tax or similar governmental charge payable
                  in connection therewith (other than any such transfer taxes or
                  similar governmental charge payable upon exchange or transfer
                  pursuant to Sections 2.10, 3.06, 4.16 and 9.05 hereof).

                           (iii)  The Registrar shall not be required to
                  register the transfer of or exchange any Note selected for
                  redemption in whole or in part, except the unredeemed portion
                  of any Note being redeemed in part.

                           (iv)   All Global Notes and Definitive Notes issued
                  upon any registration of transfer or exchange of Global Notes
                  or Definitive Notes shall be the valid obligations of the
                  Company, evidencing the same debt, and entitled to the same
                  benefits under this Indenture, as the Global Notes or
                  Definitive Notes surrendered upon such registration of
                  transfer or exchange.

                           (v)    The Company shall not be required (A) to
                  issue, to register the transfer of or to exchange any Notes
                  during a period beginning at the opening of business 15 days
                  before the day of any selection of Notes for redemption under
                  Section 3.02 hereof and ending at the close of business on the
                  day of selection, (B) to register the transfer of or to
                  exchange any Note so selected for redemption in whole or in
                  part, except the unredeemed portion of any Note being redeemed
                  in part or (c) to register the transfer of or to exchange a
                  Note between a record date and the next succeeding interest
                  payment date.

                           (vi)   Prior to due presentment for the registration
                  of a transfer of any Note, the Trustee, any Agent and the
                  Company may deem and treat the person in whose name any Note
                  is registered on the registry relating to the Notes as the
                  absolute owner of such Note for the purpose of receiving
                  payment of principal of and interest on such Notes and for all
                  other purposes, and none of the Trustee, any Agent or the
                  Company shall be affected by notice to the contrary.

                           (vii)  The Trustee shall authenticate Global
                  Notes and Definitive Notes in accordance with the provisions
                  of Section 2.02 hereof.

                           (viii) All certifications, certificates and Opinions
                  of Counsel required to be submitted to the Registrar, the
                  Company and the Trustee pursuant to

                                       37
<PAGE>   45

                  this Section 2.06 to effect a registration of transfer or
                  exchange may be submitted by facsimile.

                  Notwithstanding anything herein to the contrary, as to any
certifications and certificates delivered to the Trustee or the Registrar
pursuant to this Section 2.06, the Trustee's and the Registrar's duties shall be
limited to confirming that any such certifications and certificates delivered to
it are in the form of Exhibits B or C hereto. Neither the Trustee nor the
Registrar shall be responsible for confirming the truth or accuracy of any
representations or warranties made in any such certifications or certificates.

Section 2.07.     REPLACEMENT NOTES.

                  (a)  If any mutilated Note is surrendered to the Trustee
or the Company and the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Note, the Company shall issue and the Trustee,
upon receipt of an Authentication Order in accordance with Section 2.02 with
respect to such Note, shall authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the Company, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Company may charge for its expenses in replacing a Note.

                  (b)  Every replacement Note is an additional obligation
of the Company and shall be entitled to all of the benefits of this Indenture
equally and proportionately with all other Notes duly issued hereunder.

Section 2.08.     OUTSTANDING NOTES.

                  (a)  The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation, those reductions in the interest in a Global Note
effected by the Trustee in accordance with the provisions hereof, and those
described in this Section 2.08 as not outstanding. Except as set forth in
Section 2.09 hereof, a Note does not cease to be outstanding because the Company
or an Affiliate of the Company holds the Note.

                  (b)  If a Note is replaced pursuant to Section 2.07
hereof, it ceases to be outstanding and interest on that Note ceases to accrue
unless the Trustee receives proof satisfactory to it that the replaced Note is
held by a bona fide purchaser.

                  (c)  If the principal amount of any Note is considered
paid under Section 4.01 hereof, it ceases to be outstanding and interest on it
ceases to accrue.

                  (d)  If the Paying Agent (other than the Company, a
Subsidiary or an Affiliate of any thereof) holds, on a redemption date or
maturity date, money sufficient to

                                       38
<PAGE>   46

pay Notes payable on that date, then on and after that date such Notes shall
be deemed to be no longer outstanding and shall cease to accrue interest.

Section 2.09.     TREASURY NOTES.

                  In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company, or by any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company, shall
be considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes that the Trustee knows are so owned
shall be so disregarded.

Section 2.10.     TEMPORARY NOTES.

                  Until certificates representing Notes are ready for delivery,
the Company may prepare and the Trustee, upon receipt of an Authentication Order
in accordance with Section 2.02 with respect to such Notes, shall authenticate
temporary Notes. Temporary Notes shall be substantially in the form of
Definitive Notes but may have variations that the Company considers appropriate
for temporary Notes and as shall be reasonably acceptable to the Trustee.
Without unreasonable delay, the Company shall prepare and, upon receipt of an
Authentication Order in accordance with Section 2.02 with respect to such Notes,
the Trustee shall authenticate definitive Notes in exchange for temporary Notes.
After the preparation of Definitive Notes, the temporary Notes shall be
exchangeable for Definitive Notes upon surrender of the temporary Notes at the
office or agency of the Company designated for such purpose pursuant to Section
4.02 without charge to the Holder. Upon surrender for cancellation of any one or
more temporary Notes, the Company shall execute and, upon receipt of an
Authentication Order in accordance with Section 2.02 with respect to such Notes,
the Trustee shall authenticate and deliver in exchange therefor a like principal
amount of Definitive Notes of authorized denominations.

                  Holders of temporary Notes shall be entitled to all of the
benefits of this Indenture.

Section 2.11.     CANCELLATION.

                  The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee, upon direction by the Company and no one else, shall cancel all Notes
surrendered for registration of transfer, exchange, payment, replacement or
cancellation and shall destroy cancelled Notes (subject to the record retention
requirements of the Exchange Act). Certification of the destruction of all
cancelled Notes shall be delivered to the Company. The Company may not issue new
Notes to replace Notes that it has paid or that have been delivered to the
Trustee for cancellation.

                                       39
<PAGE>   47

Section 2.12.     DEFAULTED INTEREST.

                  If the Company defaults in a payment of interest on the Notes,
it shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Notes and in Section 4.01 hereof. The Company shall notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note and
the date of the proposed payment. The Company shall fix or cause to be fixed
each such special record date and payment date; provided, however, that no such
special record date shall be less than 5 days prior to the related payment date
for such defaulted interest. At least 10 days before the special record date,
the Company (or, upon the written request of the Company, the Trustee in the
name and at the expense of the Company) shall mail or cause to be mailed to
Holders a notice that states the special record date, the related payment date
and the amount of such interest to be paid.

Section 2.13.     CUSIP NUMBERS.

                  The Company in issuing the Notes 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, however, that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Notes or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Notes, 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 PREPAYMENT

Section 3.01.     NOTICES TO TRUSTEE.

                  If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 45 days (unless a shorter period shall be agreed to by the Trustee in
writing) but not more than 75 days before a redemption date (but in any event
prior to the notice provided pursuant to Section 3.03 hereof), an Officers'
Certificate setting forth (i) the clause of this Indenture pursuant to which the
redemption shall occur, (ii) the redemption date, (iii) the principal amount of
Notes to be redeemed and (iv) the redemption price.

Section 3.02.     SELECTION OF NOTES TO BE REDEEMED.

                  If less than all of the Notes are to be redeemed or purchased
at any time, the Trustee shall select the Notes to be redeemed or purchased
among the Holders of the Notes in compliance with the requirements of the
principal national securities exchange, if any, on which the Notes are listed
or, if the Notes are not so listed, on a pro rata basis,

                                       40
<PAGE>   48

by lot or in accordance with any other method the Trustee considers fair and
appropriate. Any such determination by the Trustee shall be conclusive. In the
event of partial redemption by lot, the particular Notes to be redeemed shall be
selected, unless otherwise provided herein, not less than 30 nor more than 60
days prior to the redemption date by the Trustee from the outstanding Notes not
previously called for redemption.

                  The Trustee shall promptly notify the Company in writing of
the Notes selected for redemption and, in the case of any Note selected for
partial redemption, the principal amount thereof to be redeemed. Notes and
portions of Notes selected shall be in amounts of $1,000 or whole multiples of
$1,000; except that if all of the Notes of a Holder are to be redeemed, the
entire outstanding amount of Notes held by such Holder, even if not a multiple
of $1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.

Section 3.03.     NOTICE OF REDEMPTION.

                  Subject to the provisions of Sections 3.07 and 3.08 hereof, at
least 30 days but not more than 60 days before a redemption date, the Company
shall mail or cause to be mailed, by first class mail, a notice of redemption to
each Holder whose Notes are to be redeemed at its registered address.

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

                  (a) the redemption date;

                  (b) the redemption price;

                  (c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption date
upon surrender of such Note, a new Note or Notes in principal amount equal to
the unredeemed portion shall be issued upon cancellation of the original Note;

                  (d) the name and address of the Paying Agent;

                  (e) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;

                  (f) that, unless the Company defaults in making such
redemption payment, interest on Notes called for redemption ceases to accrue on
and after the redemption date;

                  (g) the paragraph of the Notes or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed, and;

                  (h) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on the
Notes.

                                       41
<PAGE>   49

                  At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee at least 30 days (unless a shorter
period shall be agreed to by the Trustee in writing) but not more than 60 days
prior to the redemption date, an Officers' Certificate requesting that the
Trustee give such notice and setting forth the information to be stated in such
notice as provided in the preceding paragraph.

Section 3.04.     EFFECT OF NOTICE OF REDEMPTION.

                  Once notice of redemption is mailed in accordance with Section
3.03 hereof, Notes called for redemption shall become irrevocably due and
payable on the redemption date at the redemption price. A notice of redemption
may not be conditional.

                  A notice of redemption shall be deemed to be given when
mailed, whether or not the Holder receives the notice. In any event, failure to
give such notice, or any defect in such notice, shall not affect the validity of
the proceedings for the redemption of the Notes held by Holders to whom such
notice was properly given.

Section 3.05.     DEPOSIT OF REDEMPTION PRICE.

                  On or prior to the redemption date, the Company shall deposit
with the Trustee or with the Paying Agent money sufficient to pay the redemption
price of and accrued interest on all Notes to be redeemed on that date. The
Trustee or the Paying Agent shall promptly return to the Company any money
deposited with the Trustee or the Paying Agent by the Company in excess of the
amounts necessary to pay the redemption price of, and accrued interest on, all
Notes to be redeemed.

                  If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest shall be paid to the person
in whose name such Note was registered at the close of business on such record
date. If any Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal from the redemption
date until such principal is paid, and to the extent lawful on any interest not
paid on such unpaid principal, in each case at the rate provided in the Notes
and in Section 4.01 hereof.

Section 3.06.     NOTES REDEEMED IN PART.

                  Upon surrender of a Note that is redeemed in part, the Company
shall issue and, upon receipt of an Authentication Order in accordance with
Section 2.02 with respect to such Notes, the Trustee shall authenticate for the
Holder at the expense of the Company a new Note equal in principal amount to the
unredeemed portion of the Note surrendered.

                                       42
<PAGE>   50

Section 3.07.     OPTIONAL REDEMPTION.

                  The Company may redeem the Notes, at its option, in whole or
in part, at any time or from time to time prior to their maturity at a
redemption price equal to 100% of the principal amount thereof, plus accrued and
unpaid interest to the redemption date, plus a premium (the "Make-Whole
Premium"), if any. In no event will the redemption price be less than 100% of
the principal amount of the Notes plus accrued and unpaid interest, if any, to
the date of redemption.

                  The Make-Whole Premium with respect to any Note (or portion
thereof) to be redeemed shall be an amount equal to the excess, if any, of (1)
the sum of the present values, calculated as of the date of redemption, of (a)
each interest payment that, but for such redemption, would have been payable on
such Note (or portion thereof) on each payment date occurring after the
redemption date, and (b) the principal amount that, but for such redemption,
would have been payable at the final maturity of such Note (or portion thereof),
over (2) the principal amount of the Note (or portion thereof).

                  The present values of the interest and principal payments
referred to in clause (1) above will be determined in accordance with generally
accepted principles of financial analysis. These present values will be
calculated by discounting the amount of each payment of interest or principal
from the date that each such payment would have been payable, but for the
redemption, to the date of redemption at a discount rate equal to the treasury
yield described below (the "Treasury Yield") plus 50 basis points.

                  The Make-Whole Premium will be calculated by an independent
investment banking institution of national standing appointed by the Company;
provided, however, that if the Company fails to make such appointment at least
30 days prior to the date of redemption, or if the institution so appointed is
unwilling or unable to make the calculation, the calculation will be made by an
independent investment banking institution of national standing appointed by the
Trustee.

                  For purposes of determining the Make-Whole Premium, the
Treasury Yield shall be a rate of interest per annum equal to the weekly average
yield to maturity of United States Treasury Notes that have a constant maturity
that corresponds to the remaining term to maturity of the Notes, calculated to
the nearest 1/12th of a year. The Treasury Yield will be determined as of the
third Business Day immediately preceding the applicable date of redemption.

                  The weekly average yields of United States Treasury Notes will
be determined by reference to the most recent statistical release published by
the Federal Reserve Bank of New York and designated "H.15 (519) Selected
Interest Rates" or any successor release (the "H.15 Statistical Release"). If
the H.15 Statistical Release sets forth a weekly average yield for United States
Treasury Notes having a constant maturity that is the same as the remaining term
of the Notes, then the Treasury Yield will be equal to such weekly average
yield. In all other cases, the Treasury Yield will be calculated by
interpolation, on a straightline basis, between the weekly average yields on the
United

                                       43
<PAGE>   51

States Treasury Notes that have a constant maturity closest to and greater than
the remaining term of the Notes and the United States Treasury notes that have a
constant maturity closest to and less than the remaining term of the Notes (in
each case as set forth in the H.15 Statistical Release). Any weekly average
yields so calculated by interpolation will be rounded to the nearest 1/100th of
1%, with any figure of 1/200th of 1% or above being rounded upward. If weekly
average yields for United States Treasury Notes are not available in the H.15
Statistical Release or otherwise, then the Treasury Yield will be calculated by
interpolation of comparable rates selected by the independent investment banking
institution.

Section 3.08.     REPURCHASE AT THE OPTION OF HOLDERs.

                  In the event that, pursuant to Section 4.15 or Section 4.16
hereof, the Company shall be required to commence an offer to all Holders to
purchase Notes (a "Repurchase Offer"), and they shall follow the procedures
specified below.

                  The Repurchase Offer shall remain open for a period of 20
Business Days following its commencement and no longer, except to the extent
that a longer period is required by applicable law (the "Offer Period"). No
later than five Business Days after the termination of the Offer Period (the
"Purchase Date"), the Company shall purchase at the purchase price (as
determined in accordance with Section 4.15 hereof), the principal amount of
Notes required to be purchased pursuant to Section 4.15 hereof, in the aggregate
(the "Offer Amount") or, if less than the Offer Amount has been tendered, all
Notes tendered in response to such Repurchase Offer. Payment for any Notes so
purchased shall be made in the same manner as interest payments are made.

                  If the Purchase Date is on or after an interest record date
and on or before the related interest payment date, any accrued and unpaid
interest shall be paid to the person in whose name a Note is registered at the
close of business on such record date, and no additional interest shall be
payable to Holders who tender Notes pursuant to such Repurchase Offer.

                  Upon the commencement of a Repurchase Offer, the Company shall
send, by first class mail, a notice to the Trustee and each of the Holders, with
a copy to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to such Repurchase
Offer. The Repurchase Offer shall be made to all Holders. The notice, which
shall govern the terms of such Repurchase Offer, shall state:

                  (a) that the Repurchase Offer is being made pursuant to this
          Section 3.08 and Section 4.15 or Section 4.16, as the case may be,
          hereof, and the length of time the Repurchase Offer shall remain open;

                  (b) the Offer Amount, the purchase price and the Purchase
          Date;

                                       44
<PAGE>   52

                  (c) that any Note not tendered or accepted for payment shall
          continue to accrue interest;

                  (d) that, unless the Company default in making such payment,
          any Note accepted for payment pursuant to the Repurchase Offer shall
          cease to accrue interest after the Purchase Date;

                  (e) that Holders electing to have a Note purchased pursuant to
          any Repurchase Offer may elect to have Notes purchased in integral
          multiples of $1,000 only;

                  (f) that Holders electing to have a Note purchased pursuant to
          any Repurchase Offer shall be required to surrender the Note, with the
          form entitled "Option of Holder to Elect Purchase" on the reverse of
          the Note completed, or transfer by book-entry transfer, to the
          Company, a Depositary, if appointed by the Company, or a Paying Agent
          at the address specified in the notice before the Purchase Date;

                  (g) that Holders shall be entitled to withdraw their election
          if the Company, the Depositary or the Paying Agent, as the case may
          be, receives, not later than the expiration of the Offer Period, a
          telegram, telex, facsimile transmission or letter setting forth the
          name of the Holder, the principal amount of the Notes the Holder
          delivered for purchase and a statement that such Holder is withdrawing
          his election to have such Notes purchased; and

                  (h) that, if the aggregate principal amount of Notes
          surrendered by Holders exceeds the Offer Amount, the Notes shall be
          selected for purchase pursuant to the terms of this Section 3.08, and
          that Holders whose Notes were purchased only in part shall be issued
          new Notes equal in principal amount to the unpurchased portion of the
          Notes surrendered (or transferred by book-entry transfer).

                  On or before the Purchase Date, the Company shall, to the
extent lawful, accept for payment, pursuant to the terms of this Section 3.08,
the Offer Amount of Notes or portions thereof tendered pursuant to the
Repurchase Offer, or if less than the Offer Amount has been tendered, all Notes
tendered, and shall deliver to the Trustee an Officers' Certificate stating that
such Notes or portions thereof were accepted for payment by the Company in
accordance with the terms of this Section 3.08. The Company, the Depositary or
the Paying Agent, as the case may be, shall promptly (but in any case not later
than five Business days after the Purchase Date) mail or deliver to each
tendering Holder an amount equal to the purchase price of the Notes tendered by
such Holder and accepted by the Company for purchase, and the Company shall
promptly issue a new Note, and the Trustee, upon receipt of an Authentication
Order in accordance with Section 2.02 with respect to such Note, shall
authenticate and mail or deliver such new Note to such Holder, in a principal
amount equal to any unpurchased portion of the Note surrendered. Any Note not so
accepted shall be promptly mailed or delivered by the

                                       45
<PAGE>   53

Company to the Holder thereof. The Company shall publicly announce through PR
Newswire, Dow Businesswire or any comparable wire service that distributes
releases to the broad financial and investor media, the results of the
Repurchase Offer on the Purchase Date.

                  The Company shall comply with the requirements of Rule 14e-1
under the Exchange Act, and any other securities laws and regulations thereunder
to the extent that such laws or regulations are applicable in connection with
the repurchase of the Notes pursuant to the Repurchase Offer. To the extent that
the provisions of Rule 14e-1 under the Exchange Act or any securities laws or
regulations conflict with the provisions of this Section 3.08 or with Section
4.15 hereof, the Company will comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations under those
sections of this Indenture.

                  Any redemption pursuant to Article 3 hereof shall be subject
to the provisions of Section 2.01. Notes called for redemption become due and
payable on the date fixed for redemption. Interest will cease to accrue on the
Notes or portions thereof being redeemed on and after the redemption date,
unless the Company defaults in the payment of the redemption or repurchase
price.

                                   ARTICLE 4.

                                    COVENANTS

Section 4.01.     PAYMENT OF NOTES.

                  (a) The Company shall pay or cause to be paid the principal
of, premium, if any, Liquidated Damages, if any, and interest on the Notes on
the dates and in the manner provided in the Notes. Principal, premium, if any,
Liquidated Damages, if any, and interest shall be considered paid on the date
due if the Paying Agent, if other than the Company or a Subsidiary thereof,
holds as of 10:00 a.m. Eastern Time on the due date money deposited by the
Company in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest then due. The Company shall pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement.

                  (b) The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal and
premium, if any, at the rate equal to 1% per annum in excess of the then
applicable interest rate on the Notes to the extent lawful; it shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages
(without regard to any applicable grace period) at the same rate to the extent
lawful.

                                       46
<PAGE>   54

Section 4.02.     MAINTENANCE OF OFFICE OR AGENCY.

                  (a) The Company shall maintain in the Borough of Manhattan,
The City of New York, an office or agency (which may be an office of the Trustee
or an affiliate of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for payment, registration of transfer or for exchange and where
notices and demands to or upon the Company in respect of the Notes and this
Indenture may be served. The Company shall give prompt written notice to the
Trustee of the location, and any change in the location, of such 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 of the Trustee.

                  (b) The Company may also from time to time designate one or
more other offices or agencies where the Notes 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. The Company
shall give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.

                  (c) The Company hereby designates the Trustee's office at 30
Broad Street, 14th Floor, New York, NY 10004 as one such office or agency of the
Company in accordance with Section 2.03.

Section 4.03.     REPORTS.

                  (a) Whether or not the Company is required to do so by the
rules and regulations of the Commission, so long as any Notes are outstanding,
the Company will file with the Commission all reports, statements and other
information as the Company would be required to file with the Commission by
Section 13(a) or 15(d) of the Exchange Act. The Company shall deliver to the
Trustee and furnish each Holder, without cost to such Holder, copies of such
reports and other information.

                  (b) For so long as any Notes remain outstanding, the Company
shall furnish to the Holders and to securities analysts and prospective
purchasers of Notes, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.

                  (c) After the Exchange Offer or the effectiveness of the Shelf
Registration Statement, whether or not required by the rules and regulations of
the Commission, the Company shall file a copy of all of the information and
reports required to be delivered pursuant to clause (a) of this Section 4.03
with the Commission for public availability, unless the Commission shall not
accept such a filing, and from and after the date hereof will make this
information available to securities analysts and prospective

                                       47
<PAGE>   55

investors upon request. In addition, for so long as any Notes remain
outstanding, the Company shall file with the Trustee and the Commission (unless
the Commission shall not accept such filing) the information required to be
delivered pursuant to clause (a) of this Section 4.03 within the time periods
specified in the Commission's rules and regulations and furnish that information
to Holders of the Notes, securities analysts and prospective investors upon
their request.

Section 4.04.     COMPLIANCE CERTIFICATE.

                  (a) The Company shall deliver to the Trustee, within 90 days
after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Restricted Subsidiaries during
the preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether each of the Company and its
Restricted Subsidiaries has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge the Company
has kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action the Company is
taking or proposes to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.

                  (b) So long as not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
year-end financial statements delivered pursuant to Section 4.03(a) above shall
be accompanied by a written statement of the Company's independent public
accountants (who shall be a firm of established national reputation) that in
making the examination necessary for certification of such financial statements,
nothing has come to their attention that would lead them to believe that the
Company has violated any provisions of Article 4 or Article 5 hereof or, if any
such violation has occurred, specifying the nature and period of existence
thereof, it being understood that such accountants shall not be liable directly
or indirectly to any person for any failure to obtain knowledge of any such
violation.

                  (c) The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware
of any Default or Event of Default, an Officers' Certificate specifying such
Default or Event of Default and what action the Company is taking or proposes to
take with respect thereto.

Section 4.05.     TAXES.

                  The Company shall pay, and shall cause each of its
Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and
governmental levies except such

                                       48
<PAGE>   56

as are contested in good faith and by appropriate proceedings or where the
failure to effect such payment is not adverse in any material respect to the
Holders of the Notes.

Section 4.06.     STAY, EXTENSION AND USURY LAWS.

                  The Company covenants (to the extent that it may lawfully do
so) that it shall not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, extension or
usury law wherever enacted, now or at any time hereafter in force, that 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 law, and covenants that it shall not, by resort to any
such law, hinder, delay or impede the execution of any power herein granted to
the Trustee, but shall suffer and permit the execution of every such power as
though no such law has been enacted.

Section 4.07.     RESTRICTED PAYMENTS.

                  (a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly:

                           (i) declare or pay any dividend or make any other
                  payment or distribution on account of the Company's or any of
                  its Restricted Subsidiaries' Equity Interests, including,
                  without limitation, any payment in connection with any merger
                  or consolidation involving the Company or any of its
                  Restricted Subsidiaries, or to the direct or indirect holders
                  of the Company or any of its Restricted Subsidiaries' Equity
                  Interests in their capacity as such, except for dividends or
                  distributions that are payable in the Company's Equity
                  Interests (other than Disqualified Stock) or payable to the
                  Company or any of its Restricted Subsidiaries;

                           (ii) purchase, redeem or otherwise acquire or retire
                  for value, including, without limitation, in connection with
                  any merger or consolidation involving the Company, any of the
                  Company's Equity Interests;

                           (iii)  make any payment on or with respect to, or
                  purchase, redeem, defease or otherwise acquire or retire for
                  value any Indebtedness that is subordinated to the Notes or
                  the Subsidiary Guarantees, except a payment of interest or
                  principal at the Stated Maturity thereof; or

                           (iv)  make any Restricted Investment;

all such payments and other actions set forth in these clauses (i) through (iv)
above being collectively referred to as "Restricted Payments."

                                       49
<PAGE>   57

                  (b) Notwithstanding clause (a) of this Section 4.07, the
Company shall be permitted to engage in, and to cause or allow any of its
Restricted Subsidiaries to engage in, a Restricted Payment, so long as, at the
time of and after giving effect to such Restricted Payment:

                           (i) no Default or Event of Default has occurred and
                  is continuing  or would occur as a  consequence  of such
                  Restricted Payment; and

                            (ii)  the Company would, at the time of such
                  Restricted Payment and after giving pro forma effect thereto
                  as if such Restricted Payment had been made at the beginning
                  of the applicable four-quarter period, have been permitted to
                  incur at least $1.00 of additional Indebtedness pursuant to
                  the Fixed Charge Coverage Ratio test set forth in clause (a)
                  of Section 4.09; and

                           (iii)   the aggregate amount of that Restricted
                  Payment and all other Restricted Payments made by the Company
                  and its Restricted Subsidiaries after the Issue Date,
                  excluding Restricted Payments permitted by clauses (ii),
                  (iii), (iv), (vi) and (vii) of Section 4.07(c), is less than
                  or equal to the sum, without duplication, of:

                                    (A)  50% of the Company's Consolidated
                           Net Income for the period (taken as one accounting
                           period) from the beginning of the Company's fiscal
                           quarter commenced immediately prior to the Issue Date
                           to the end of the Company's most recently ended
                           fiscal quarter for which the Company has filed
                           financial statements with the Commission (or, if such
                           Consolidated Net Income for such period is a deficit,
                           less 100% of such deficit), plus

                                    (B)   100% of the aggregate net cash
                           proceeds received by the Company since the Issue Date
                           as a contribution to the Company's common equity
                           capital or from the issue or sale (other than to a
                           Subsidiary) of the Company's or any of its Restricted
                           Subsidiaries' Equity Interests (other than
                           Disqualified Stock) or from the issue or sale (other
                           than to a Subsidiary) of the Company's convertible or
                           exchangeable Disqualified Stock or the Company's
                           convertible or exchangeable debt securities that have
                           been converted into or exchanged for Equity Interests
                           (other than Disqualified Stock), plus

                                    (C)   to the extent that any Restricted
                           Investment that the Company or any of its Restricted
                           Subsidiaries makes after the Issue Date is sold for
                           cash or otherwise liquidated or repaid for cash, an
                           amount equal to the lesser of (1) the cash return of
                           capital with respect to any such Restricted
                           Investment (less the cost of

                                       50
<PAGE>   58

                           disposition, if any) and (2) the initial amount of
                           such Restricted Investment, plus

                                    (D)   if the Company redesignates any
                           Unrestricted Subsidiary as a Restricted Subsidiary
                           after the Issue Date, an amount equal to the lesser
                           of (1) the net book value of the Company's Investment
                           in the Unrestricted Subsidiary at the time the
                           Unrestricted Subsidiary was designated as such and
                           (2) the fair market value of the Company's Investment
                           in the Unrestricted Subsidiary at the time of the
                           redesignation.

                  (c) Notwithstanding clauses (a) and (b) of this Section 4.07,
the Company shall be permitted to effect, and to cause or allow any of its
Restricted Subsidiaries to effect:

                       (i) the payment of any dividend within 60 days after the
                  date of declaration of the dividend, if at the date of
                  declaration the dividend payment would have complied with the
                  provisions of this Indenture;

                       (ii) the redemption, repurchase, retirement, defeasance
                  or other acquisition of any of (a) the Company's Indebtedness
                  or any Indebtedness of any Guarantor that is subordinated to
                  the Notes or the Subsidiary Guarantees, or (b) the Company's
                  Equity Interests or any Equity Interests of any of the
                  Company's Restricted Subsidiaries, in either case in exchange
                  for, or out of the net cash proceeds of the substantially
                  concurrent sale (other than to one of the Company's
                  Subsidiaries) of, the Company's Equity Interests (other than
                  Disqualified Stock); provided, however, that the amount of any
                  such net cash proceeds that are utilized for any such
                  redemption, repurchase, retirement, defeasance or other
                  acquisition will be excluded from clause (b)(iii)(B) of this
                  Section 4.7;

                       (iii) the defeasance, redemption, repurchase or other
                  acquisition of the Company's Indebtedness or Indebtedness of
                  any Guarantor that is subordinated to the Notes or the
                  Subsidiary Guarantees with the net cash proceeds from an
                  incurrence of Permitted Refinancing Indebtedness;

                       (iv) the payment of any dividend by one of the Company's
                  Restricted Subsidiaries to the holders of that Restricted
                  Subsidiary's common Equity Interests on a pro rata basis, so
                  long as the Company or one of its Restricted Subsidiaries
                  receives at least a pro rata share (and in like form) of the
                  dividend or distribution in accordance with its common Equity
                  Interests;

                       (v) the repurchase, redemption or other acquisition or
                  retirement for value of any of the Company's or any of its
                  Restricted Subsidiaries' Equity Interests held by any member
                  of the Company's or any of its

                                       51
<PAGE>   59

                  Restricted Subsidiaries' management pursuant to any management
                  equity subscription agreement, stock option agreement or
                  similar agreement, provided, however, that the aggregate price
                  paid for all such repurchased, redeemed, acquired or retired
                  Equity Interests may not exceed $1.0 million in any
                  twelve-month period;

                       (vi) in connection with an acquisition by the Company or
                  any of its Restricted Subsidiaries, the return to the Company
                  or such Restricted Subsidiary of Equity Interests of the
                  Company or such Restricted Subsidiary constituting a portion
                  of the purchase consideration in settlement of indemnification
                  claims;

                       (vii) the purchase by the Company of fractional shares
                  arising out of stock dividends, splits or combinations or
                  business combinations;

                       (viii) the acquisition in open-market purchases of the
                  Company's common Equity Interests for matching contributions
                  to the Company's employee stock purchase and deferred
                  compensation plans in the ordinary course of business and
                  consistent with past practices; or

                       (ix) other Restricted Payments in an aggregate amount
                  since the Issue Date not to exceed $10.0 million,

provided, however, that, with respect to clauses (ii), (iii), (v), (viii) and
(ix) above, no Default or Event of Default shall have occurred and be continuing
immediately after such transaction.

                  (d) The amount of all Restricted Payments (other than cash)
will be the fair market value on the date of the Restricted Payment of the
asset(s) or securities proposed to be transferred or issued by the Company or a
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any assets or securities that are required to be valued
by this Section 4.07 will be determined by the Company's Board of Directors
whose resolution with respect thereto will be delivered to the Trustee. The
Board of Directors' determination must be based upon an opinion or appraisal
issued by an accounting, appraisal or investment banking firm of national
standing if the fair market value exceeds $10.0 million. Not later than the date
of making any Restricted Payment, the Company shall deliver to the Trustee an
Officers' Certificate stating that such Restricted Payment is permitted and
setting forth the basis upon which the calculations required by this Section
4.07 were computed, together with a copy of any fairness opinion or appraisal
required by the indenture.

Section 4.08.    DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.

                  (a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any consensual encumbrance or restriction on
the ability of any

                                       52
<PAGE>   60

Restricted Subsidiary of the Company to (i)(A) pay dividends or make any other
distributions permitted by applicable law on any Capital Stock of such
Restricted Subsidiary to the Company or any other Restricted Subsidiary, or with
respect to any other interest or participation in, or measured by, the profits
of such Restricted Subsidiary, or (B) pay any Indebtedness owed to the Company
or any other Restricted Subsidiary, (ii) make loans or advances to the Company
or any other Restricted Subsidiary or (iii) transfer any of its properties or
assets to the Company or any other Restricted Subsidiary.

                  (b) The provisions of Section 4.08(a) above shall not apply to
encumbrances or restrictions existing under or by reason of:

                       (i) agreements governing Existing Indebtedness, or any
                  Credit Facilities, as in effect on the Issue Date and any
                  amendments, modifications, restatements, renewals, increases,
                  supplements, refundings, replacements or refinancings of those
                  agreements, provided that the amendments, modifications,
                  restatements, renewals, increases, supplements, refundings,
                  replacement or refinancings of any of the foregoing are no
                  more restrictive, taken as a whole, with respect to such
                  dividend and other payment restrictions than those contained
                  in those agreements on the date hereof;

                       (ii) this Indenture, the Notes and the Subsidiary
                  Guarantees, or any other indenture governing debt securities
                  that are no more restrictive, taken as a whole, with respect
                  to dividend and other payment restrictions than those
                  contained in this Indenture and the Notes;

                       (iii) applicable law or any applicable rule, regulation
                  or order; (iv)any instrument governing Indebtedness or Capital
                  Stock of a person acquired by the Company or any of its
                  Restricted Subsidiaries as in effect at the time of such
                  acquisition (except to the extent such Indebtedness or Capital
                  Stock was incurred in connection with or in contemplation of
                  such acquisition), which encumbrance or restriction is not
                  applicable to any person, or the properties or assets of any
                  person, other than the person, or the property or assets of
                  the person, so acquired, provided that, in the case of
                  Indebtedness, such Indebtedness was permitted by the terms of
                  this Indenture to be incurred;

                       (v) customary non-assignment provisions in leases entered
                  into in the ordinary course of business and consistent with
                  past practices;

                       (vi) purchase money obligations for property acquired in
                  the ordinary course of business that impose restrictions on
                  that property of the nature described in clause (a)(iii) of
                  this Section 4.08;

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<PAGE>   61

                           (vii) any agreement (A) for the sale or other
                  disposition of all of the Equity Interests in or all or
                  substantially all of the assets of one of the Company's
                  Restricted Subsidiaries that restricts distributions or asset
                  transfers by that Restricted Subsidiary pending that sale or
                  other disposition or (B) for the sale of a particular asset or
                  line of business of a Restricted Subsidiary that imposes
                  restrictions on the property subject to an agreement of the
                  nature described in clause (a)(iii) of this Section 4.08; or

                           (viii) Permitted Refinancing Indebtedness, provided,
                  however, that any restrictions contained in the agreements
                  governing such Permitted Refinancing Indebtedness are not
                  materially more restrictive, taken as a whole, than those
                  contained in the agreements governing the Indebtedness being
                  refinanced and that such Permitted Refinancing Indebtedness
                  was permitted to be incurred under Section 4.09 hereof;

                           (ix) Liens securing Indebtedness otherwise permitted
                  to be incurred under the provisions of Section 4.11 that limit
                  the right of the debtor to dispose of the assets subject to
                  such Liens; and

                           (x) provisions with respect to the disposition of
                  specific assets or property in asset sale agreements entered
                  into in the ordinary course of business.

Section 4.09.     INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.

                  (a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, incur any Indebtedness (including Acquired Debt),
and the Company shall not issue any Disqualified Stock, and shall not permit any
of its Restricted Subsidiaries to issue any shares of preferred stock; provided,
however, that (1) the Company and any Guarantor may incur Indebtedness
(including Acquired Debt) and (b) the Company may issue Disqualified Stock, if,
in each case, the Fixed Charged Coverage Ratio for the Company's most recently
ended fiscal four full fiscal quarters for which the Company has filed financial
statements with the Commission preceding the date on which such Indebtedness is
incurred or such Disqualified Stock is issued, as the case may be, would have
been at least 2.25 to 1.0, determined on a pro forma basis (including a pro
forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred or the Disqualified Stock had been issued, as the
case may be, at the beginning of such four-quarter period.

                  (b) In addition to the foregoing, the Company and any
Restricted Subsidiary (except as specified below) may incur the following types
of Indebtedness:

                       (i) the incurrence by the Company or any Guarantor of
                  additional Indebtedness and letters of credit under one or
                  more Credit Facilities and guarantees thereof by the
                  Guarantors; provided, however, that the

                                       54
<PAGE>   62

                  aggregate principal amount of all Indebtedness incurred by the
                  Company and the Guarantors pursuant to this clause (i) (with
                  letters of credit being deemed to have a principal amount
                  equal to the maximum potential liability of the Company and
                  its Restricted Subsidiaries thereunder) outstanding at any one
                  time does not exceed $125.0 million;

                       (ii) the incurrence by the Company and the Restricted
                  Subsidiaries of the Existing Indebtedness;

                       (iii) the incurrence by the Company of Indebtedness
                  represented by the Notes and the incurrence by the Guarantors
                  of the Subsidiary Guarantees of those Notes;

                       (iv) the incurrence by the Company, or by any Restricted
                  Subsidiary that is a Guarantor, of Indebtedness represented by
                  Capital Lease Obligations, mortgage financings or purchase
                  money obligations, in each case incurred for the purpose of
                  financing all or any part of the purchase price or cost of
                  construction or improvement of property, plant or equipment
                  used in the Company's business or the business of that
                  Restricted Subsidiary, in an aggregate principal amount not to
                  exceed $10.0 million at any time outstanding;

                       (v) the incurrence by the Company or any of its
                  Restricted Subsidiaries of Permitted Refinancing Indebtedness
                  in exchange for, or the net proceeds of which are used to
                  refund, refinance or replace Indebtedness (other than
                  intercompany Indebtedness) that was incurred under clause (a)
                  of this Section 4.09 or clauses (ii), (iii) or (iv) of this
                  Section 4.09(b); provided, however, that no Restricted
                  Subsidiary that is not a Guarantor may refund, refinance or
                  replace Indebtedness previously incurred by the Company or by
                  any Restricted Subsidiary that is a Guarantor;

                       (vi) the incurrence by the Company or any of its
                  Restricted Subsidiaries of intercompany Indebtedness between
                  or among the Company and any of its Restricted Subsidiaries;
                  provided, however, that:

                                    (A)  if the Company or a Guarantor is
                           the obligor on such intercompany Indebtedness, such
                           intercompany Indebtedness must be expressly
                           subordinated to the prior payment in full in cash of
                           all Obligations with respect to, in the case of the
                           Company, the Notes, and, in the case of a Guarantor,
                           the Subsidiary Guarantees; and

                                    (B)   (1) any subsequent issuance or
                           transfer of Equity Interests that results in any such
                           Indebtedness being held by a person other than the
                           Company or a Restricted Subsidiary that is a

                                       55
<PAGE>   63

                           Guarantor and (2) any sale or other transfer of any
                           such Indebtedness to a person that is not either the
                           Company or a Restricted Subsidiary that is a
                           Guarantor shall be deemed, in each case, to
                           constitute an incurrence of such Indebtedness by the
                           Company or such Restricted Subsidiary, as the case
                           may be, that was not permitted by this clause (vi);

                       (vii) the incurrence by the Company or any of its
                  Restricted Subsidiaries of Hedging Obligations;

                       (viii) the guarantee by the Company or any of the
                  Guarantors of Indebtedness of the Company or of any of the
                  Guarantors that was permitted to be incurred by another
                  provision of this Section 4.09; and

                       (ix) the incurrence by the Company or a Restricted
                  Subsidiary of additional Indebtedness in an aggregate
                  principal amount (or accreted value, as applicable) at any
                  time outstanding, including all Permitted Refinancing
                  Indebtedness incurred to refund, refinance or replace any
                  Indebtedness incurred pursuant to this clause (ix), not to
                  exceed $35.0 million.

                  (c) The maximum amount of Indebtedness that the Company or a
Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be
deemed to be exceeded, with respect to any outstanding Indebtedness, due solely
to fluctuations in the exchange rates of currencies.

                  (d) For purposes of determining compliance with this covenant,
in the event that an item of proposed Indebtedness, including Acquired Debt,
meets the criteria of more than one of the categories of Permitted Debt
described in clauses (b)(i) through (ix) of this Section 4.09 as of the date of
incurrence thereof, or is entitled to be incurred pursuant to clause (a) of this
Section 4.09 as of the date of incurrence thereof or pursuant to any combination
of the foregoing as of the date of incurrence thereof, the Company shall, in its
sole discretion, classify (or later classify or reclassify) in whole or in part,
such item of Indebtedness in any manner that complies with this Section 4.09.
Accrual of interest or dividends, the accretion of accreted value or liquidation
preference and the payment of interest or dividends in the form of additional
Indebtedness or Disqualified Stock will not be deemed to be an incurrence of
Indebtedness or an issuance of Disqualified Stock for purposes of this Section
4.09.

Section 4.10.     TRANSACTIONS WITH  AFFILIATES.

                  (a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or
otherwise dispose of any properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each, an "Affiliate Transaction"), unless:

                                       56
<PAGE>   64

                       (i) the Affiliate Transaction is on terms that are no
                  less favorable to the Company or the relevant Restricted
                  Subsidiary than those that would have been obtained in a
                  comparable transaction by the Company or such Restricted
                  Subsidiary with an unrelated person; and

                       (ii) the Company delivers to the Trustee:

                                    (A)  with respect to any Affiliate
                           Transaction or series of related Affiliate
                           Transactions involving aggregate consideration in
                           excess of $1.0 million, a resolution of the Company's
                           Board of Directors set forth in an Officers'
                           Certificate certifying that such Affiliate
                           Transaction complies with this Section 4.10 and that
                           such Affiliate Transaction has been approved by a
                           majority of the disinterested members of the
                           Company's Board of Directors; and

                                    (B)  with respect to any Affiliate
                           Transaction or series of related Affiliate
                           Transactions involving aggregate consideration in
                           excess of $5.0 million, an opinion as to the fairness
                           to the Holders of such Affiliate Transaction from a
                           financial point of view issued by an accounting,
                           appraisal or investment banking firm of national
                           standing.

                  (b) The following items will not be deemed to be Affiliate
Transactions and, therefore, will not be subject to the provisions of clause (a)
of this Section 4.10:

                       (i) any employment agreement entered into by the Company
                  or a Restricted Subsidiary in the ordinary course of business
                  and consistent with the past practice of the Company or such
                  Restricted Subsidiary;

                       (ii) transactions between or among the Company and/or its
                  Restricted Subsidiaries;

                       (iii) transactions with a person that is an Affiliate of
                  the Company solely because the Company owns an Equity Interest
                  in such person;

                       (iv) payment of reasonable directors fees and reasonable
                  indemnitees to persons who are not otherwise Affiliates of the
                  Company;

                       (v) sales of Equity Interests (other than Disqualified
                  Stock) to Affiliates of the Company;

                       (vi) transactions with Weatherford (A) to repay $100.0
                  million of outstanding Indebtedness, plus accrued and unpaid
                  interest, to Weatherford with the proceeds of the Offering,
                  (B) pursuant to agreements as in effect on the Issue Date, and
                  (C) in commercial transactions in the

                                       57
<PAGE>   65

                  ordinary course of business on terms no less favorable to the
                  Company or the relevant Restricted Subsidiary than the Company
                  could obtain in an arm's length transaction with an unrelated
                  person;

                       (vii) Restricted Payments or Permitted Investments that
                  are permitted by Section 4.07

Section 4.11.     LIENS.

                  The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
suffer to exist any Lien securing Indebtedness, Attributable Debt or trade
payables, except Permitted Liens, upon any of the Company's, or a Restricted
Subsidiary's, property or assets, now owned or acquired after the Issue Date,
unless all payments due under this Indenture and the Notes, or the Subsidiary
Guarantees, as applicable, are secured on an equal and ratable basis with (or if
the obligations being secured rank junior in right of payment to the Notes, on a
senior basis to) the obligations so secured until such time as such obligations
are no longer secured by a Lien.

Section 4.12.     ADDITIONAL SUBSIDIARY GUARANTEES.

                  If the Company or any Restricted Subsidiary acquires or
creates another Domestic Subsidiary after the date of this Indenture, then that
newly acquired or created Domestic Subsidiary will become a Guarantor and
execute a supplemental indenture and deliver an Opinion of Counsel satisfactory
to the Trustee within ten Business Days of the date on which it was acquired or
created; provided, however, that the foregoing shall not apply to Subsidiaries
that have properly been designated as Unrestricted Subsidiaries in accordance
with this Indenture for so long as they continue to constitute Unrestricted
Subsidiaries; provided further, however, that if a Subsidiary that is not a
Guarantor guarantees any of the Company's or a Guarantor's Indebtedness, that
Subsidiary will be required to provide the Company with a guarantee that ranks
pari passu with (or, if that Indebtedness is subordinated Indebtedness, prior
to) that Indebtedness.

Section 4.13.     DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES.

                  (a) The Board of Directors of the Company may designate any
Restricted Subsidiary (or any person that upon its acquisition otherwise would
become a Restricted Subsidiary) to be an Unrestricted Subsidiary if that
designation would not cause a Default. If a Restricted Subsidiary is designated
as an Unrestricted Subsidiary, the aggregate fair market value of all
outstanding Investments owned by the Company and the Restricted Subsidiaries in
the Subsidiary properly designated will be deemed to be an Investment made as of
the time of the designation and will reduce the amount available for Restricted
Payments under Section 4.07(a) or Permitted Investments, as determined by the
Company. That designation will only be permitted if the Investment would be
permitted at that time and if the Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary. The Board of Directors of the Company
may

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<PAGE>   66

redesignate any Unrestricted Subsidiary to be a Restricted Subsidiary if the
redesignation would not cause a Default.

                  (b) Any designation of any of the Company's Subsidiaries as an
Unrestricted Subsidiary pursuant to this Section 4.13 shall be evidenced to the
Trustee by filing with the Trustee a certified copy of the Board Resolution
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the preceding conditions and was permitted by
Section 4.07. If, at any time, any Unrestricted Subsidiary would fail to meet
the preceding requirements as an Unrestricted Subsidiary, it shall thereafter
cease to be an Unrestricted Subsidiary for purposes of this Indenture and any
Indebtedness of such Subsidiary shall be deemed to be incurred by one of the
Company's Restricted Subsidiaries as of such date and, if such Indebtedness is
not permitted to be incurred as of such date under Section 4.09, the Company
shall be in default of such Section 4.09. The Company's Board of Directors may
at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
provided, however, that such designation will be deemed to be an incurrence of
Indebtedness by one of the Company's Restricted Subsidiaries of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation will only be
permitted if (1) such Indebtedness is permitted under Section 4.09 calculated on
a pro forma basis as if such designation had occurred at the beginning of the
four-quarter reference period; and (2) no Default or Event of Default would be
in existence following such designation.

Section 4.14.     CORPORATE EXISTENCE.

                  Subject to Article 5 hereof, the Company shall do or cause to
be done all things necessary to preserve and keep in full force and effect (i)
its corporate existence, and the corporate, partnership or other existence of
each of its Restricted Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time to time) of the
Company or any such Restricted Subsidiary and (ii) the rights (charter and
statutory), licenses and franchises of the Company and its Restricted
Subsidiaries; provided, however, that the Company shall not be required to
preserve any such right, license or franchise, or the corporate, partnership or
other existence of any of its Restricted Subsidiaries, if the Board of Directors
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and its Restricted Subsidiaries, taken as
a whole, and that the loss thereof is not adverse in any material respect to the
Holders of the Notes.

Section 4.15.     ASSET SALES.

                  (a) The Company will not, and will not permit any of its
Restricted Subsidiaries to, consummate an Asset Sale unless:

                       (i) the Company, or the Restricted Subsidiary, as the
                  case may be, receives consideration at the time of the Asset
                  Sale at least equal to the fair market value of the assets or
                  Equity Interests issued or sold or otherwise disposed of;

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<PAGE>   67

                       (ii) in the case of Asset Sales for consideration
                  exceeding $5.0 million, the fair market value is determined by
                  the Company's Board of Directors and evidenced by a resolution
                  of the Company's Board of Directors set forth in an officer's
                  certificate delivered to the Trustee; and

                       (iii) at least 75% of the consideration received in the
                  Asset Sale by the Company or such Subsidiary is in the form of
                  cash. For purposes of this provision, each of the following
                  will be deemed to be cash:

                                    (A)  any secured Indebtedness of the
                           Company or a Guarantor and any Indebtedness of a
                           Restricted Subsidiary that is not a Guarantor that
                           are assumed by the transferee of any such assets
                           pursuant to a customary novation agreement that
                           releases the Company or such Restricted Subsidiary
                           from further liability; and

                                    (B)  any securities, notes or other
                           obligations received by the Company or any Restricted
                           Subsidiary from such transferee that the Company or
                           such Restricted Subsidiary contemporaneously, subject
                           to ordinary settlement periods, converts into cash,
                           to the extent of the cash received, in that
                           conversion.

                  (b) Within 365 days after the receipt of any Net Proceeds from
an Asset Sale, the Company may apply those Net Proceeds at its option:

                       (i) to permanently repay any secured Indebtedness of the
                  Company or a Guarantor, or any Indebtedness of a Restricted
                  Subsidiary that is not a Guarantor and, if any Indebtedness
                  repaid under this clause (i) is revolving credit Indebtedness,
                  to correspondingly reduce commitments with respect thereto;
                  provided, however, that for purposes of this clause (i) only,
                  Indebtedness shall include accrued but unpaid interest
                  thereon;

                       (ii) to acquire all or substantially all of the assets
                  of, or a majority of the Voting Stock of, another Permitted
                  Business;

                       (iii) to make a capital expenditure; or

                       (iv) to acquire other long-term assets that are used or
                  useful in a Permitted Business.

Pending the final application of any Net Proceeds, the Company may temporarily
reduce revolving credit borrowings or otherwise invest the Net Proceeds in any
manner that is not prohibited by this Indenture.

                  (c) Any Net Proceeds from Asset Sales that are not applied or
invested as provided in the preceding paragraph shall constitute "Excess
Proceeds." When the

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<PAGE>   68

aggregate amount of Excess Proceeds exceeds $10.0 million, the Company shall
make a pro rata offer to purchase (an "Asset Sale Offer") to all Holders of
Notes and all holders of other Indebtedness that is pari passu with the Notes
containing provisions similar to those set forth in this Indenture with respect
to offers to purchase or redeem with the proceeds of sales of assets to purchase
the maximum principal amount of Notes and such other pari passu Indebtedness
that may be purchased out of the Excess Proceeds. The offer price in any Asset
Sale Offer will be equal to 100% of principal amount plus accrued and unpaid
interest to the date of purchase, and will be payable in cash. If any Excess
Proceeds remain after consummation of an Asset Sale Offer, the Company may use
those Excess Proceeds for any purpose not otherwise prohibited by this
Indenture. If the aggregate principal amount of Notes and other pari passu
Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess
Proceeds, the Trustee shall select the Notes and such other pari passu
Indebtedness to be purchased on a pro rata basis (based upon the aggregate
principal amount of the Notes and such other pari passu Indebtedness tendered).
Upon completion of each Asset Sale Offer, the amount of Excess Proceeds will be
deemed to have been reset at zero.

                  (d) The Company shall comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent those laws and regulations are applicable in connection
with repurchases of Notes pursuant to an Asset Sale Offer. To the extent that
the provisions of any securities laws or regulations conflict with this Section
4.15, the Company shall comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations under this
Section 4.15 by virtue of that conflict.

Section 4.16.     OFFER TO REPURCHASE UPON CHANGE OF CONTROL.

                  (a) Upon the occurrence of a Change of Control Triggering
Event, each Holder shall have the right to require the Company to make an offer
(a "Change of Control Offer") to each Holder to repurchase all or any part,
equal to $1,000 or an integral multiple of $1,000, of the Holder's Notes at an
offer price in cash equal to 101% of the aggregate principal amount of Notes
repurchased, plus accrued and unpaid interest and Liquidated Damages, if any, on
Notes repurchased to the date fixed for repurchase (the "Change of Control
Payment").

                  (b) Within 15 Business Days following a Change of Control
Triggering Event, the Company shall mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control Triggering
Event and offering to repurchase the Notes on the date specified in the notice,
which date shall be no earlier than 30 days and no later than 60 days from the
date the notice is mailed (the "Change of Control Payment Date") pursuant to the
procedures set forth in Section 3.08 and described in the notice. The Company
shall comply with the requirements of Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent those laws and
regulations are applicable to the repurchase of the Notes as a result of a
Change of Control Triggering Event. To the extent that the provisions of any
securities laws or regulations conflict with this Section 4.16, the Company
shall comply

                                       61
<PAGE>   69

with the applicable securities laws and regulations and will not be deemed to
have breached its obligations under this Section 4.16 by virtue of such
conflict.

                  (c)  On the Change of Control Payment Date, the Company
shall, to the extent lawful, (i) accept for payment all Notes or portions of
Notes properly tendered under the Change of Control Offer; (ii) deposit with the
Paying Agent an amount equal to the Change of Control Payment in respect of all
Notes or portions of the Notes so tendered; and (iii) deliver or cause to be
delivered to the Trustee the Notes so accepted together with an Officers'
Certificate stating the aggregate principal amount of Notes or portions of the
Notes being purchased by the Company.

                  (d)  The Paying Agent shall deliver promptly to each
Holder of Notes so tendered the Change of Control Payment for such Notes, and,
upon receipt of an Authentication Order in accordance with Section 2.02 with
respect to such Notes, the Trustee shall promptly authenticate and deliver, or
cause to be transferred by book entry, to each Holder a new Note equal in
principal amount to any unpurchased portion of the Notes surrendered, provided,
however, that each new Note shall be in a principal amount of $1,000 or an
integral multiple of $1,000.

                  (e)  The Change of Control provisions described in this
Section 4.16 shall be applicable whether or not any other provisions of this
Indenture are applicable.

                  (f)  The Company shall not be required to make a Change
of Control Offer following a Change of Control Triggering Event if a third party
makes the Change of Control Offer in the manner, at the times and otherwise in
compliance with the requirements set forth in this Section 4.16 and purchases
all Notes properly tendered and not withdrawn under the Change of Control Offer.

Section 4.17.     LIMITATIONS ON LINE OF BUSINESS.

                  The Company shall not, and shall not permit any Restricted
Subsidiary to, engage in any business other than a Permitted Business, except to
such extent as is not material to the Company and its Restricted Subsidiaries,
taken as a whole.

Section 4.18.     SALE AND LEASEBACK TRANSACTIONS.

                  The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, enter into any sale and leaseback transaction;
provided that the Company and its Restricted Subsidiaries may enter into a sale
and leaseback transaction if

                  (a)  the Company or the relevant Restricted Subsidiary
could have (i) incurred Indebtedness in an amount equal to the Attributable Debt
relating to such sale and leaseback transaction under the Fixed Charge Coverage
Ratio test in Section 4.09(a) and (ii) incurred a Lien to secure such
Indebtedness pursuant to Section 4.11; provided, however, that clause (i) of
this clause (a) shall be suspended during any period in which the Company and
its Restricted Subsidiaries are not subject to the Suspended Covenants;

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<PAGE>   70

                  (b) the gross cash proceeds of the sale and leaseback
transaction are at least equal to the fair market value, as determined in good
faith by the Company and set forth in an Officers' Certificate delivered to the
Trustee, of the property that is the subject of the sale and leaseback
transaction; provided, however, that in the case of any sale and leaseback
transaction for consideration exceeding $5.0 million, the fair market value
shall be determined by the Company's Board of Directors and set forth in an
Officers' Certificate delivered to the Trustee; and

                  (c) the transfer of assets in the sale and leaseback
transaction is permitted by, and the Company or the relevant Restricted
Subsidiary applies the proceeds of the transaction in compliance with, Section
4.11 hereof; provided, however, that, in the event that the Company or any of
its Restricted Subsidiaries consummates a sale and leaseback transaction during
a period in which the Company is not subject to the Suspended Covenants, within
twelve months of that sale and leaseback transaction, the Company shall apply
the Net Cash Proceeds thereof to permanently repay secured Indebtedness of the
Company or a Guarantor, or any Indebtedness of any of the Company's Restricted
Subsidiaries that is not a Guarantor, and if any Indebtedness repaid under this
clause (c) is revolving credit Indebtedness, to correspondingly reduce
commitments with respect thereto.

Section 4.19.     PAYMENTS FOR CONSENT.

                  Neither the Company nor any of its Restricted Subsidiaries
shall, directly or indirectly, pay or cause to be paid any consideration,
whether by way of interest, fee or otherwise, to any Holder for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Notes unless such consideration is offered to be paid
or is paid to all Holders that consent, waive or agree to amend in the time
frame set forth in the solicitation documents relating to such consent, waiver
or agreement.

Section 4.20.     SUSPENSION OF COVENANTS.

                  (a) During any period of time that the Notes have an
Investment Grade Rating from either of the Rating Agencies and no Default has
occurred and is continuing, the Company and its Restricted Subsidiaries shall
not be subject to Sections 4.07, 4.08, 4.09, 4.10, 4.15, 4.17, 4.18(a)(i) and
5.01(a)(iv) (collectively, the "Suspended Covenants"), provided, however, that
if the Company and its Restricted Subsidiaries are not subject to the Suspended
Covenants for any period of time as a result of this Section 4.20 and,
subsequently, either of the Rating Agencies withdraws its ratings or downgrades
the ratings assigned to the Notes below the Investment Grade Ratings so that the
Notes do not have an Investment Grade Rating from either Rating Agency, or a
Default (other than with respect to the Suspended Covenants) occurs and is
continuing, the Company and its Restricted Subsidiaries will thereafter again be
subject to the Suspended Covenants, subject to the terms, conditions and
obligations set forth in this Indenture (each such date of reinstatement being
the "Reinstatement Date"). Compliance with the Suspended Covenants with respect
to Restricted Payments made after the

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Reinstatement Date will be calculated in accordance with Section 4.07 as though
Section 4.07 had been in effect during the entire period of time from the Issue
Date.

                                   ARTICLE 5.

                                   SUCCESSORS

Section 5.01.     MERGER, CONSOLIDATION, OR SALE OF ASSETS.

                  (a) The Company shall not consolidate or merge with or into
another person (whether or not the Company is the surviving corporation), or
sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of the properties or assets of the Company and its Restricted
Subsidiaries, taken as a whole, in one or more related transactions, to another
person unless:

                       (i) either: (A) the Company is the surviving corporation
                  or (B) the person formed by or surviving any such
                  consolidation or merger (if other than the Company) or to
                  which such sale, assignment, transfer, conveyance or other
                  disposition has been made is a corporation organized or
                  existing under the laws of the United States, any state of the
                  United States or the District of Columbia;

                       (ii) the person formed by or surviving any such
                  consolidation or merger (if other than the Company) or the
                  person to which such sale, assignment, transfer, conveyance or
                  other disposition has been made assumes all of the Company's
                  obligations under the Notes and this Indenture pursuant to
                  agreements reasonably satisfactory to the Trustee;

                       (iii) immediately before and after giving effect to such
                  transaction, no Default or Event of Default exists;

                       (iv) the Company or the person formed by or surviving any
                  such consolidation or merger (if other than the Company), or
                  to which such sale, assignment, transfer, conveyance or other
                  disposition has been made will, on the date of such
                  transaction after giving pro forma effect thereto and any
                  related financing transactions as if the same had occurred at
                  the beginning of the applicable four-quarter period, be
                  permitted to incur at least $1.00 of additional Indebtedness
                  pursuant to the Fixed Charge Coverage Ratio test set forth in
                  Section 4.09(a); provided, however, that the Company delivers
                  to the Trustee an Officers' Certificate, attaching the
                  arithmetic computations to demonstrate compliance with this
                  clause (a)(iv), and an Opinion of Counsel, in each case
                  stating that such consolidation, merger or transfer complies
                  with this provision and that all conditions precedent provided
                  for herein relating to such transaction have been complied
                  with; and provided further, that this clause (a)(iv) shall not
                  apply (A) pursuant to Section 4.20, during any period in which
                  the

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                  Company and its Restricted Subsidiaries are not subject to the
                  Suspended Covenants, and (B) if, in the good faith
                  determination of the Board of Directors, the principal purpose
                  of the transaction is to change the Company's state of
                  incorporation and the transaction does not have as one of its
                  purposes the evasion of the foregoing limitations.

                  (b) The Company shall not, directly or indirectly, lease all
or substantially all of its properties or assets, in one or more related
transactions, to any other person.

Section 5.02.     SUCCESSOR CORPORATION SUBSTITUTED.

                  Upon any consolidation or merger, or any sale, assignment,
transfer, lease, conveyance or other disposition of all or substantially all of
the assets of the Company in accordance with Section 5.01 hereof, the successor
corporation formed by such consolidation or into or with which the Company is
merged or to which such sale, assignment, transfer, lease, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, lease, conveyance or other
disposition, the provisions of this Indenture referring to the "Company" shall
refer instead to the successor corporation and not to the Company), and may
exercise every right and power of the Company under this Indenture with the same
effect as if such successor person had been named as the Company herein;
provided, however, that the predecessor Company shall not be relieved from the
obligation to pay the principal of and interest on the Notes or any other
amounts owing hereunder or under the Notes in the case of a sale or lease of all
or substantially all of the Company's assets that meets the requirements of
Section 5.01 hereof.

                                   ARTICLE 6.

                              DEFAULTS AND REMEDIES

Section 6.01.     EVENTS OF DEFAULT.

                  Each of the following events constitutes an "Event of
Default":

                  (a) default in the payment when due of principal of or
premium, if any, on any Note when the same becomes due and payable at maturity,
upon acceleration, upon redemption or otherwise;

                  (b) default in the payment when due of interest on, or
Liquidated Damages with respect to, any Note, and such default continues for a
period of 30 days;

                  (c) default in the performance or breach of the provisions by
the Company or any of its Restricted Subsidiaries of 4.07, 4.09 or Section 5.01
hereof;

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                  (d) default in the performance by the Company or any of its
Restricted Subsidiaries of Sections 4.15 or 4.16 hereof, and such default
continues for a period of 30 days after written notice;

                  (e) default in the performance of or breaches any other
covenant or agreement of the Company in this Indenture or under the Notes (other
than a default specified in clause (a), (b), (c) or (d) above) by the Company or
any of its Restricted Subsidiaries and such default or breach continues for a
period of 60 days after written notice by the Trustee to the Company or by the
Holders of 25% or more in aggregate principal amount of the Notes to the Company
and the Trustee;

                  (f) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any of its
Restricted Subsidiaries) whether such Indebtedness or guarantee now exists, or
is created after the date hereof, if that default:

                       (i) is caused by a failure to pay principal of, or
                  interest or premium, if any, on such Indebtedness prior to the
                  expiration of the grace period provided in such Indebtedness
                  on the date of such default (a "Payment Default"); or

                       (ii) results in the acceleration of such Indebtedness
                  prior to its express maturity,

                  and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such Indebtedness
under which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates $10.0 million or more;

                  (g) default by the Company or any of its Subsidiaries in the
payment of final judgments aggregating in excess of $10.0 million, which
judgments are not paid, discharged or stayed for a period of 60 days;

                  (h) except as permitted by this Indenture, any Subsidiary
Guarantee shall be held in any judicial proceeding to be unenforceable or
invalid or shall cease for any reason to be in full force and effect or any
Guarantor, or any person acting on behalf of any Guarantor, shall deny or
disaffirm its obligations under its Subsidiary Guarantee;

                  (i) a court having jurisdiction in the premises enters a
decree or order for

                       (i) relief in respect of the Company or any of its
                  Restricted Subsidiaries in an involuntary case under any
                  applicable bankruptcy, insolvency or other similar law now or
                  hereafter in effect,

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                       (ii) appointment of a receiver, liquidator, assignee,
                  custodian, trustee, sequestrator or similar official of the
                  Company or any of its Restricted Subsidiaries or for all or
                  substantially all of the property and assets of the Company or
                  any of its Restricted Subsidiaries, or

                       (iii) the winding up or liquidation of the affairs of the
                  Company or any of its Restricted Subsidiaries and,

                  in each case, such decree or order shall remain unstayed and
                  in effect for a period of 30 consecutive days; or

                  (j) the Company or any of its Restricted Subsidiaries:

                       (i) commences a voluntary case under any applicable
                  bankruptcy, insolvency or other similar law now or hereafter
                  in effect, or consents to the entry of an order for relief in
                  an involuntary case under any such law,

                       (ii) consents to the appointment of or taking possession
                  by a receiver, liquidator, assignee, custodian, trustee,
                  sequestrator or similar official of the Company or such
                  Restricted Subsidiary or for all or substantially all of the
                  property and assets of the Company or such Restricted
                  Subsidiary, or

                       (iii) effects any general assignment for the benefit of
                  creditors.

Section 6.02.     ACCELERATION.

                  (a) If any Event of Default (other than an Event of Default
specified in clause (i) or (j) of Section 6.01 hereof), occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes, by written notice to the Company (and, if such
notice is given by such Holders, to the Trustee), may, and the Trustee at the
request of such Holders shall, declare the principal of, premium, if any, and
accrued interest on the Notes to be due and payable immediately. Upon such
declaration of acceleration, such principal of, premium, if any, and accrued and
unpaid interest and Liquidated Damages, if any, shall be immediately due and
payable.

                  (b) Notwithstanding the foregoing, if an Event of Default
specified in clause (i) or (j) of Section 6.01 hereof occurs with respect to the
Company, any Restricted Subsidiary that is a Significant Subsidiary or any group
of Restricted Subsidiaries that, taken together, would constitute a Significant
Subsidiary, the principal of, premium, if any, and accrued and unpaid interest
and Liquidated Damages, if any, on the Notes then outstanding shall be due and
payable immediately without further action or notice on the part of the Trustee
or any Holder.

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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 principal, premium, if
any, and interest on the Notes or to enforce the performance of any provision of
the Notes or this Indenture.

                  The Trustee may maintain a proceeding to enforce its rights
and to pursue its remedies under the Notes and this Indenture even if the
Trustee does not possess any of the Notes or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Holder of a Note 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. All remedies are cumulative to the extent permitted by law.

Section 6.04.     WAIVER OF PAST DEFAULTS.

                  At any time after declaration of acceleration, but before a
judgment or decree for the payment of the money due has been obtained by the
Trustee, the Holders of at least a majority in principal amount of the
outstanding Notes by written notice to the Company and to the Trustee, may waive
all past defaults, except a Default in the payment of principal of premium, if
any, or interest on any Note as specified in clause (a) or (b) of Section 6.01
or in respect of a covenant or provision of this Indenture which cannot be
modified or amended without the consent of the Holder of each outstanding Note
affected, and rescind and annul a declaration of acceleration and its
consequences if:

                  (a) all existing Events of Default, other than the nonpayment
          of the principal of, premium, if any, and interest on the Notes that
          have become due solely by such declaration of acceleration, have been
          cured or waived; and

                  (b) such rescission would not conflict with any judgment or
          decree of a court of competent jurisdiction.

                  Upon any such waiver, such Default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereto.

Section 6.05.     CONTROL BY MAJORITY.

                  Holders of a majority in principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for enforcing any rights and exercising any remedy available to the
Trustee or exercising any trust or power conferred on it. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture
that the Trustee determines may involve the Trustee in personal liability or
that the Trustee determines in good faith may be unduly prejudicial to the
rights of other Holders of Notes not joining in the giving of such direction and
may

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take any other action it deems proper that is not inconsistent with any such
direction received for Holders of Notes.

Section 6.06.     Limitation on Suits.

                  A Holder of a Note may pursue a remedy with respect to this
Indenture or the Notes only if:

                  (a) the Holder of a Note gives to the Trustee written notice
         of a continuing Event of Default;

                  (b) the Holders of at least 25% in principal amount of the
         then outstanding Notes make a written request to the Trustee to pursue
         the remedy;

                  (c) such Holder of a Note or Holders of Notes offer and, if
         requested, provide to the Trustee indemnity satisfactory to the Trustee
         against any loss, liability or expense;

                  (d) the Trustee does not comply with the request within 60
         days after receipt of the request and the offer and, if requested, the
         provision of indemnity; and

                  (e) during such 60-day period the Holders of a majority in
         principal amount of the then outstanding Notes do not give the Trustee
         a direction inconsistent with the request.

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

Section 6.07.     RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.

                  Notwithstanding any other provision of this Indenture, the
right of any Holder of a Note to receive payment of principal, premium and
Liquidated Damages, if any, and interest on the Note, on or after the respective
due dates expressed in the Note (including in connection with an offer to
purchase), or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent of
such Holder.

Section 6.08.     COLLECTION SUIT BY TRUSTEE.

                  If an Event of Default specified in Section 6.01(a) or (b)
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as Trustee of an express trust against the Company for the whole
amount of principal of, premium and Liquidated Damages, if any, and interest
remaining unpaid on the Notes and interest on overdue principal and, to the
extent lawful, interest and such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable

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compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.

Section 6.09.     TRUSTEE MAY FILE PROOFS OF CLAIM.

                  The Trustee is authorized to file such proofs of claim and
other papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel) and
the Holders of the Notes allowed in any judicial proceedings relative to the
Company (or any other obligor upon the Notes), its creditors or its property and
shall be entitled and empowered to collect, receive and distribute any money or
other property payable or deliverable on any such claims and any custodian 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 to the Trustee any
amount due to 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. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof out
of the estate in any such proceeding, shall be denied for any reason, payment of
the same shall be secured by a Lien on, and shall be paid out of, and to secure
the payment of same, the Trustee is hereby granted an interest security in, any
and all distributions, dividends, money, securities and other properties that
the Holders may be entitled to receive in such proceeding whether in liquidation
or under any plan of reorganization or arrangement or otherwise. 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 Notes or the rights of any Holder, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.

Section 6.10.     PRIORITIES.

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

                  First: to the Trustee, its agents and attorneys for amounts
due under Sections 6.09 and 7.07 hereof, including payment of all compensation,
expense and liabilities incurred, and all advances made, by the Trustee, its
agents or attorneys and the costs and expenses of collection;

                  Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium and Liquidated Damages, if any, and interest,
ratably, without preference or priority of any kind, according to the amounts
due and payable on the Notes for principal, premium and Liquidated Damages, if
any and interest, respectively; and

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                  Third: to the Company or to such party as a court of competent
jurisdiction shall direct.

                  The Trustee may fix a record date and payment date for any
payment to Holders of Notes pursuant to this Section 6.10.

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 a Trustee, a court in its discretion may require the filing by
any party litigant 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 disbursements 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 does not apply to a suit by the
Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit
by Holders of more than 10% in principal amount of the then outstanding Notes.

Section 6.12.     RESTORATION OF RIGHTS AND REMEDIES.

                  If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then, and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Company, Trustee and the Holders shall
continue as though no such proceeding had been instituted, except that the
rights of the Trustee to receive compensation, reimbursement of any of its
expenses or indemnification from the Holders in connection with such proceeding
in accordance with the terms of the Indenture or any separate agreement or
understanding between the Trustees and the Holders shall not be affected by this
Section 6.12.

Section 6.13.     RIGHTS AND REMEDIES CUMULATIVE.

                  Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or wrongfully taken Notes in Section
2.07, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.

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Section 6.14.     DELAY OR OMISSION NOT WAIVER.

                  No delay or omission of the Trustee or of any Holder to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article 6 or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.

                                   ARTICLE 7.

                                     TRUSTEE

Section 7.01.     DUTIES OF TRUSTEE.

                  (a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers of which the Trustee has
actual knowledge 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 of
which the Trustee has actual knowledge:

                       (i) the duties of the Trustee shall be determined solely
                  by the express provisions of this Indenture and the Trustee
                  undertakes to perform, and need perform, only those duties
                  that are specifically set forth in this Indenture and no
                  others, and no implied covenants or obligations shall be read
                  into this Indenture against the Trustee; and

                       (ii) 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, the
                  Trustee shall examine the certificates and opinions to
                  determine whether or not they conform to the requirements of
                  this Indenture.

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

                       (i) this paragraph does not limit the effect of paragraph
                  (b) of this Section;

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

                       (iii) 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.

                  (d) Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), (c), (e) and (f) of this Section and Section 7.02.

                  (e) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or incur any liability. The Trustee shall be
under no obligation to exercise any of its rights and powers under this
Indenture at the request of any Holders, unless such Holder shall have offered
to the Trustee security and indemnity satisfactory to the Trustee against any
loss, liability or expense.

                  (f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.

Section 7.02.     RIGHTS OF TRUSTEE.

                  (a)  In connection with its rights and duties under this
Indenture, the Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, Note, or other
document 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 an Officers' Certificate or an Opinion of Counsel or both. The
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officers' Certificate or Opinion of Counsel. The
Trustee may consult with counsel and the written advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and protection from
liability in respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon.

                  (c)  The Trustee may act through its attorneys and 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 that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture or takes or omits to take
in accordance with the written direction

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of the Holders of a majority in principal amount of the outstanding Notes
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Indenture.

                  (e) Unless otherwise specifically provided in this Indenture,
any demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.

                  (f) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders unless such Holders shall have offered to the
Trustee security or indemnity reasonably satisfactory to it against the costs,
expenses and liabilities that might be incurred by it in compliance with such
request or direction.

                  (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 such 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 personally or by agent or
attorney.

                  (h) Except with respect to Section 4.01, the Trustee sall have
no duty to inquire as to the performance of the Company's covenants set forth in
Article 4. The Trustee shall not be deemed to have knowledge of any Default or
Event of Default except (i) any Event of Default occurring pursuant to Sections
6.01(a), 6.01(b) and 4.01 or (ii) any Default or Event of Default of which the
Trustee shall have received written notification in the manner set forth in this
Indenture or a Responsible Officer of the Trustee shall have obtained actual
knowledge of the Default or Event of Default.

Section 7.03.     INDIVIDUAL RIGHTS OF TRUSTEE.

                  The Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the Commission
for permission to continue as Trustee or resign. Any Agent may do the same with
like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11
hereof.

Section 7.04.     TRUSTEE'S DISCLAIMER.

                  The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes, it
shall not be accountable for the

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Company's use of the proceeds from the Notes or any money paid to the Company or
upon the Company's direction under any provision of this Indenture, it shall not
be responsible for the use or application of any money received by any Paying
Agent other than the Trustee, and it shall not be responsible for any statement
or recital herein or any statement in the Notes or any other document in
connection with the sale of the Notes or pursuant to this Indenture other than
its certificate of authentication.

Section 7.05.     NOTICE OF DEFAULTS.

                  If a Default or Event of Default occurs and is continuing and
if it is known to the Trustee, the Trustee shall mail to Holders of Notes a
notice of the Default or Event of Default within 90 days after it occurs. Except
in the case of a Default or Event of Default in payment of principal of,
premium, if any, or interest on any Note, the Trustee may withhold the notice if
and so long as a committee of its Responsible Officers in good faith determines
that withholding the notice is in the interests of the Holders of the Notes.

Section 7.06.     REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.

                  Within 60 days after each May 15 beginning with May 15, 2001,
and for so long as Notes remain outstanding, the Trustee shall mail to the
Holders of the Notes a brief report dated as of such reporting date that
complies with TIA ss. 313(a) (but if no event described in TIA ss. 313(a) has
occurred within the twelve months preceding the reporting date, no report need
be transmitted). The Trustee also shall comply with TIA ss. 313(b)(2). The
Trustee shall also transmit by mail all reports as required by TIA ss. 313(c).

                  A copy of each report at the time of its mailing to the
Holders of Notes shall be mailed to the Company and filed with the Commission
and each stock exchange on which the Notes are listed in accordance with TIA ss.
313(d). The Company shall promptly notify the Trustee when the Notes are listed
on any stock exchange.

Section 7.07.     COMPENSATION AND INDEMNITY.

                  The Company shall pay to the Trustee from time to time such
compensation for its acceptance of this Indenture and services hereunder as
shall be agreed upon in writing by the Company and the Trustee. The Trustee's
compensation shall not be limited by any law on compensation of a Trustee of an
express trust. The Company shall reimburse the Trustee promptly upon request for
all reasonable disbursements, advances and expenses incurred or made by it in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation, disbursements and expenses of the Trustee's agents and
counsel.

                  The Company shall indemnify, defend and hold harmless the
Trustee and its shareholders, incorporators, directors, officers, employees,
representatives and agents (each an "Indemnitee") against any and all losses,
liabilities or expenses (including reasonable fees and disbursements of counsel)
incurred by any of them arising out of or

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<PAGE>   83

in connection with the acceptance or administration of the Trustee's duties
under this Indenture, including the costs and expenses of enforcing this
Indenture against the Company (including this Section 7.07) and defending any of
themselves against any claim (whether asserted by the Company or any Holder or
any other person) or liability in connection with the exercise or performance of
any of the Trustee's powers or duties hereunder, except to the extent any such
loss, liability or expense or a portion thereof may be attributable to the
Trustee's negligence or bad faith. An Indemnitee shall notify the Company
promptly of any claim for which that Indemnitee may seek indemnity. Failure by
the Indemnitee to so notify the Company shall not relieve the Company of its
obligations hereunder. Subject to receipt of the consent of the party to be
defended, which consent shall not be unreasonable withheld or delayed, the
Company shall defend the claim and the Trustee shall cooperate in the defense.
The Indemnitees may have separate counsel and the Company shall pay the
reasonable fees and expenses of such counsel. The Company need not pay for any
settlement made without its consent, which consent shall not be unreasonably
withheld or delayed. The Company need not reimburse any expense or indemnify
against any loss, liability or expense incurred by an Indemnitee through that
Indemnitee's own willful misconduct, negligence or bad faith.

                  The obligations of the Company under this Section 7.07 shall
survive the resignation or removal of the Trustee and the satisfaction and
discharge of this Indenture.

                  To secure the Company's payment obligations in this Section,
the Trustee shall have a Lien and is hereby granted a security interest prior in
right of payment prior to the Notes on all money or property held or collected
by the Trustee, except that held in trust to pay principal and interest on
particular Notes. Such Lien shall survive the satisfaction and discharge of this
Indenture.

                  When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(g) or (h) hereof occurs, the expenses
and the compensation for the services (including the fees, disbursements and
expenses of its agents and counsel) are intended to constitute expenses of
administration under any Bankruptcy Law.

                  The Trustee shall comply with the provisions of TIA ss.
313(b)(2) to the extent applicable.

Section 7.08.     REPLACEMENT OF TRUSTEE.

                  A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.

                  The Trustee may resign in writing at any time and be
discharged from the trust hereby created by so notifying the Company. The
Holders of Notes of a majority in principal amount of the then outstanding Notes
may remove the Trustee by so notifying the Trustee and the Company in writing.
The Company may remove the Trustee if:

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<PAGE>   84

                  (a) the Trustee fails to comply with Section 7.10 hereof;

                  (b) the Trustee is adjudged a bankrupt or an insolvent or an
          order for relief is entered with respect to the Trustee under any
          Bankruptcy Law;

                  (c) a custodian or public officer takes charge of the Trustee
          or its property; or

                  (d) the Trustee 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 a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.

                  If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company, or the Holders of Notes of at least 10% in principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.

                  If the Trustee, after written request by any Holder of a Note
who has been a Holder of a Note for at least six months, fails to comply with
Section 7.10, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.

                  A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. Subject to the Lien provided for in Section
7.07 hereof, the retiring Trustee shall promptly transfer all property held by
it as Trustee to the successor Trustee; provided, however, that all sums owing
to the retiring Trustee hereunder shall have been paid and the property so
transferred shall remain subject to the Lien provided for in Section 7.07.
Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the
Company's obligations under Section 7.07 hereof shall continue for the benefit
of the retiring Trustee.

Section 7.09.     SUCCESSOR TRUSTEE BY MERGER, ETC.

                  If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation or national banking corporation, the successor corporation or
national banking corporation without any further act shall be the successor
Trustee.

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<PAGE>   85

Section 7.10.     ELIGIBILITY; DISQUALIFICATION.

                  There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate Trustee power, that is subject to supervision or examination by
federal or state authorities and that has (or the bank holding company of which
it is an Affiliate has) a combined capital and surplus of at least $50 million
as set forth in its most recent published annual report of condition.

                  This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA
ss. 310(b) provided, however, that there shall be excluded from the operation of
TIA Section 310(b)(1) any indenture or indentures under which other securities
or certificates of interest or participation in other securities of the Company
are outstanding if the requirements for such exclusions set forth in TIA Section
310(b)(1) are met.

Section 7.11.     PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.

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

                                   ARTICLE 8.

                                 NOTE GUARANTEES

Section 8.01.     SUBSIDIARY GUARANTEES.

                  (a) Subject to this Article 8, each of the Guarantors hereby,
jointly and severally, unconditionally guarantees to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, irrespective of the validity and enforceability of this Indenture,
the Notes or the obligations of the Company hereunder or thereunder, that: (i)
the principal of premium, if any, and interest on the Notes will be promptly
paid in full when due, whether at maturity, by acceleration, redemption or
otherwise, and interest on the overdue principal of and interest on the Notes,
if any, if lawful, and all other obligations of the Company to the Holders or
the Trustee hereunder or thereunder will be promptly paid in full or performed,
all in accordance with the terms hereof and thereof; and (ii) in case of any
extension of time of payment or renewal of any Notes or any of such other
obligations, that same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration pursuant to Section 6.02 hereof or otherwise. Failing
payment when due of any amount so guaranteed or any performance so guaranteed
for whatever reason, the Guarantors shall be jointly and severally obligated to
pay the same immediately. Each Guarantor agrees that this is a guarantee of
payment and not a guarantee of collection.

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<PAGE>   86

                  (b) Each Guarantor hereby agrees that its obligations with
regard to such Subsidiary Guarantee shall be joint and several, unconditional,
irrespective of the validity or enforceability of the Notes or the obligations
of the Company under this Indenture, the absence of any action to enforce the
same, the recovery of any judgment against the Company or any other obligor with
respect to this Indenture, the Notes or the obligations of the Company under
this Indenture or the Notes, any action to enforce the same or any other
circumstances (other than complete performance) which might otherwise constitute
a legal or equitable discharge or defense of a Guarantor. Each Guarantor
further, to the extent permitted by law, waives and relinquishes all claims,
rights and remedies accorded by applicable law to guarantors and agrees not to
assert or take advantage of any such claims, rights or remedies, including but
not limited to: (i) any right to require any of the Trustee, the Holders or the
Company (each a "Benefited Party"), as a condition of payment or performance by
such Guarantor, to (A) proceed against the Company, any other guarantor
(including any other Guarantor) of the obligations under the Subsidiary
Guarantees or any other person, (B) proceed against or exhaust any security held
from the Company, any such other guarantor or any other person, (C) proceed
against or have resort to any balance of any deposit account or credit on the
books of any Benefited Party in favor of the Company or any other person, or (D)
pursue any other remedy in the power of any Benefited Party whatsoever; (ii) any
defense arising by reason of the incapacity, lack of authority or any disability
or other defense of the Company including any defense based on or arising out of
the lack of validity or the unenforceability of the obligations under the
Subsidiary Guarantees or any agreement or instrument relating thereto or by
reason of the cessation of the liability of the Company from any cause other
than payment in full of the obligations under the Subsidiary Guarantees; (iii)
any defense based upon any statute or rule of law which provides that the
obligation of a surety must be neither larger in amount nor in other respects
more burdensome than that of the principal; (iv) any defense based upon any
Benefited Party's errors or omissions in the administration of the obligations
under the Subsidiary Guarantees, except behavior which amounts to bad faith;
(v)(A) any principles or provisions of law, statutory or otherwise, which are or
might be in conflict with the terms of the Subsidiary Guarantees and any legal
or equitable discharge of such Guarantor's obligations hereunder, (B) the
benefit of any statute of limitations affecting such Guarantor's liability
hereunder or the enforcement hereof, (C) any rights to set-offs, recoupments and
counterclaims and (D) promptness, diligence and any requirement that any
Benefited Party protect, secure, perfect or insure any security interest or lien
or any property subject thereto; (vi) notices, demands, presentations, protests,
notices of protest, notices of dishonor and notices of any action or inaction,
including acceptance of the Subsidiary Guarantees, notices of default under the
Notes or any agreement or instrument related thereto, notices of any renewal,
extension or modification of the obligations under the Subsidiary Guarantees or
any agreement related thereto, and notices of any extension of credit to the
Company and any right to consent to any thereof; (vii) to the extent permitted
under applicable law, the benefits of any "One Action" rule and (viii) any
defenses or benefits that may be derived from or afforded by law which limit the
liability of or exonerate guarantors or sureties, or which may conflict with the
terms of the Subsidiary Guarantees. Except as set forth in Section 8.6, each
Guarantor hereby

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covenants that its Subsidiary Guarantee will not be discharged except by
complete performance of the obligations contained in its Guarantee and this
Indenture.

                  (c) If any Holder or the Trustee is required by any court or
otherwise to return to the Company, the Guarantors or any custodian, trustee,
liquidator or other similar official acting in relation to either the Company or
the Guarantors, any amount paid by either to the Trustee or such Holder, any
Subsidiary Guarantee, to the extent theretofore discharged, shall be reinstated
in full force and effect.

                  (d) Each Guarantor agrees that it shall not be entitled to any
right of subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed hereby.
Each Guarantor further agrees that, as between the Guarantors, on the one hand,
and the Holders and the Trustee, on the other hand, (i) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Section 6.02
hereof for the purposes of any Subsidiary Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby and (ii) in the event of any declaration of
acceleration of such obligations as provided in Section 6.02 hereof, such
obligations (whether or not due and payable) shall forthwith become due and
payable by the Guarantors for the purpose of any such Subsidiary Guarantee. The
Guarantors shall have the right to seek contribution from any non-paying
Guarantor so long as the exercise of such right does not impair the rights of
the Holders under the applicable Subsidiary Guarantee.

Section 8.02.     ADDITIONAL GUARANTEES.

                  If any Restricted Subsidiary becomes obligated pursuant to
Section 4.10 hereof, then the Company shall cause any such Restricted Subsidiary
to, within five Business Days of the date on which any such Restricted
Subsidiary became so obligated, (a) execute and deliver to the Trustee a
Supplemental Indenture in form reasonably satisfactory to the Trustee pursuant
to which such Restricted Subsidiary shall unconditionally guarantee, on a senior
unsecured basis, all of the Company's obligations under the Notes and this
Indenture on the terms set forth herein and therein and (b) deliver to the
Trustee an Opinion of Counsel that, subject to customary assumptions and
exclusions, such supplemental indenture has been duly executed and delivered by
such Restricted Subsidiary. Any Restricted Subsidiary that becomes a Guarantor
shall remain a Guarantor unless (i) designated an Unrestricted Subsidiary by the
Company in accordance with this Indenture; (ii) is otherwise released from its
obligations as a Guarantor pursuant to Section 8.05 hereof; or (iii) the
circumstances giving rise to the obligation to provide a guarantee under Section
4.10 no longer exist.

Section 8.03.     LIMITATION ON GUARANTOR LIABILITY.

                  Each Guarantor, and by its acceptance of Notes, each Holder,
hereby confirms that it is the intention of all such parties that the Subsidiary
Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance
for purposes of Bankruptcy

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<PAGE>   88

Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act
or any similar federal or state law to the extent applicable to any Subsidiary
Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and
the Guarantors hereby irrevocably agree that the obligations of such Guarantor
under this Article 8 shall be limited to the maximum amount as will, after
giving effect to such maximum amount and all other contingent and fixed
liabilities of such Guarantor that are relevant under such laws, and after
giving effect to any collections from, rights to receive contribution from or
payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under this Article 8, result in the
obligations of such Guarantor under its Subsidiary Guarantee not constituting a
fraudulent transfer or conveyance.

Section 8.04.     MERGER AND CONSOLIDATION OF GUARANTORS.

                  Except as otherwise provided in Section 8.05 hereof, no
Guarantor may sell or otherwise dispose of all or substantially all of its
assets to, or consolidate with or merge with or into (whether or not such
Guarantor is the surviving person) another person, other than the Company or
another Guarantor unless:

                  (a) immediately after giving effect to such transaction, no
         Default or Event of Default exists; and

                  (b) either (i) the person acquiring the property in any such
         sale or disposition or the person formed by or surviving any such
         consolidation or merger, assumes all the obligations of that Guarantor
         under this Indenture and the Subsidiary Guarantee of such Guarantor
         pursuant to a supplemental indenture reasonably satisfactory to the
         Trustee, or (ii) in the case of a sale or other disposition of all or
         substantially all of the assets of such Guarantor's assets, the Net
         Proceeds of such sale of other disposition are applied in accordance
         with Section 4.15.

                  In case of any such sale or other disposition, consolidation,
merger, sale or conveyance and upon the assumption by the successor person, by
supplemental indenture, executed and delivered to the Trustee and satisfactory
in form to the Trustee, of the Subsidiary Guarantee endorsed upon the Notes and
the due and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Guarantor, such successor person shall succeed
to and be substituted for the Guarantor with the same effect as if it had been
named herein as a Guarantor. Such successor person thereupon may cause to be
signed any or all of the Subsidiary Guarantees to be endorsed upon all of the
Notes issuable hereunder which theretofore shall not have been signed by the
Company and delivered to the Trustee. All the Subsidiary Guarantees so issued
shall in all respects have the same legal rank and benefit under this Indenture
as the Subsidiary Guarantees theretofore and thereafter issued in accordance
with the terms of this Indenture as though all of such Subsidiary Guarantees had
been issued at the date of the execution hereof.

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<PAGE>   89

                  Except as set forth in Articles 4 and 5 hereof, and
notwithstanding clauses (a) and (b) of this Section 8.04, nothing contained in
this Indenture or in any of the Notes shall prevent any consolidation or merger
of a Guarantor with or into an Company or another Guarantor, or shall prevent
any sale or conveyance of the property of a Guarantor as an entirety or
substantially as an entirety to an Company or another Guarantor.

Section 8.05.     RELEASE.

                  (a) In the event of (i) a sale or other disposition of all or
substantially all of the assets of any Guarantor, by way of merger,
consolidation or otherwise, or a sale or other disposition of all to the Capital
Stock of any Guarantor, in each case to a person that is not (either before or
after giving effect to such transactions) a Subsidiary of the Company, so long
as the Net Proceeds of such sale or other disposition are applied in accordance
with the applicable provisions of this Indenture, including without limitation
Section 4.15 hereof, or (ii) a designation by the Company of any Restricted
Subsidiary that is a Guarantor as an Unrestricted Subsidiary in accordance with
Section 4.13, such Guarantor or, in the case of a sale or other disposition of
all or substantially all of the assets of such Guarantor, the corporation
acquiring such property, will be released and relieved of any obligations under
its Subsidiary Guarantee.

                  (b) Upon delivery by the Company to the Trustee of an
Officers' Certificate and an Opinion of Counsel to the effect that such sale or
other disposition was made by the Company in accordance with the provisions of
this Indenture, including without limitation Section 4.07 hereof, or such
designation was made in accordance with Section 4.13 hereof, as the case may be,
the Trustee shall execute any documents reasonably required in order to evidence
the release of any Guarantor from its obligations under its Subsidiary
Guarantee.

                  (c) Any Guarantor not released from its obligations under its
Subsidiary Guarantee shall remain liable for the full amount of principal of and
interest on the Notes and for the other obligations of any Guarantor under this
Indenture as provided in this Article 8.

                                   ARTICLE 9.

                        AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01.     WITHOUT CONSENT OF HOLDERS OF NOTES.

                  Notwithstanding Section 9.02 of this Indenture, the Company
and the Trustee may amend or supplement this Indenture or the Notes without the
consent of any Holder of a Note:

                  (a) to cure any ambiguity, defect or inconsistency;

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<PAGE>   90
                  (b) to provide for uncertificated Notes in addition to or in
          place of certificated Notes;

                  (c) to provide for the assumption of the Company's obligations
          to the Holders of the Notes by a successor to the Company pursuant to
          Article 5 hereof;

                  (d) to make any change that would provide any additional
          rights or benefits to the Holders of the Notes or that does not
          adversely affect the legal rights hereunder of any Holder of the Note;
          or

                  (e) to comply with requirements of the Commission in order to
          effect or maintain the qualification of this Indenture under the TIA.

                  Upon the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon receipt by the Trustee of the documents
described in Section 7.02 hereof, the Trustee shall join with the Company in the
execution of any amended or supplemental Indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into such amended or supplemental Indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.

Section 9.02.     WITH CONSENT OF HOLDERS OF NOTES.

                  (a) Except as provided below in this Section 9.02, this
Indenture and the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the Notes including
Additional Notes, if any, then outstanding voting as a single class (including
consents obtained in connection with a tender offer or exchange offer for, or
purchase of, the Notes), and, subject to Sections 6.04 and 6.07 hereof, any
existing Default or Event of Default (other than a Default or Event of Default
in the payment of the principal of, premium, if any, or interest on the Notes,
except a payment default resulting solely from an acceleration that has been
rescinded) or compliance with any provision of this Indenture or the Notes may
be waived with the consent of the Holders of a majority in principal amount of
the then outstanding Notes, including Additional Notes, if any, voting as a
single class (including consents obtained in connection with a tender offer or
exchange offer for, or purchase of, the Notes). However, without the consent of
each Holder affected, an amendment or waiver under this Section 9.02 may not
(with respect to any Notes held by a non-consenting Holder):

                       (i) reduce the principal amount of Notes whose Holders
                  must consent to an amendment, supplement or waiver;

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                       (ii) reduce the principal of or change the fixed maturity
                  of any Note or alter the provisions with respect to the
                  redemption of the Notes, other than Sections 4.15 and 4.16;

                       (iii) reduce the rate of or change the time for payment
                  of interest on any Note;

                       (iv) waive a Default or Event of Default in the payment
                  of principal of, or interest or premium, if any, on the Notes
                  (except a rescission of acceleration of the notes by the
                  Holders of at least a majority in aggregate principal amount
                  of the Notes and a waiver of the payment default that resulted
                  from such acceleration);

                       (v) make any Note payable in money other than that stated
                  in the Notes;

                       (vi) make any change in the provisions of this Indenture
                  relating to waivers of past Defaults, including Section 6.04,
                  or the rights of holders of notes to receive payments of
                  principal of, or interest or premium, if any, on the Notes;

                       (vii) waive a redemption payment with respect to any
                  Note, other than a payment required under Section 4.15 or
                  4.16;

                       (viii) release any Guarantor from any of its obligations
                  under its Subsidiary Guarantee or this Indenture, except in
                  accordance with the terms of this Indenture; or

                       (ix) make any change in the preceding amendment and
                  waiver provisions.

                  (b) Upon the request of the Company accompanied by a
resolution of its Board of Directors authorizing the execution of any such
amended or supplemental Indenture, and upon the filing with the Trustee of
evidence satisfactory to the Trustee of the consent of the Holders of Notes as
aforesaid, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee shall join with the Company in the execution of such
amended or supplemental Indenture unless such amended or supplemental Indenture
directly affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such amended or supplemental Indenture.

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

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<PAGE>   92

                  (d) After an amendment, supplement or waiver under this
Section becomes effective, the Company shall mail to the Holders of Notes
affected thereby a notice briefly describing the amendment, supplement or
waiver. Any failure of the Company to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such amended
or supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof,
the Holders of a majority in aggregate principal amount of the Notes, including
Additional Notes, if any, then outstanding voting as a single class may waive
compliance in a particular instance by the Company with any provision of this
Indenture or the Notes.

Section 9.03.     COMPLIANCE WITH TRUST INDENTURE ACT.

                  Every amendment or supplement to this Indenture or the Notes
shall be set forth in an amended or supplemental Indenture that complies with
the TIA as then in effect.

Section 9.04.     REVOCATION AND EFFECT OF CONSENTS.

                  Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder of a
Note and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
is not made on any Note. However, any such Holder of a Note or subsequent Holder
of a Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.

Section 9.05.     NOTATION ON OR EXCHANGE OF NOTES.

                  The Trustee may place an appropriate notation about an
amendment, supplement or waiver on any Note thereafter authenticated. The
Company in exchange for all Notes may issue and the Trustee shall, upon receipt
of an Authentication Order, in accordance with Section 2.02 with respect to
those Notes, authenticate new Notes that reflect the amendment, supplement or
waiver.

                  Failure to make the appropriate notation or issue a new Note
shall not affect the validity and effect of such amendment, supplement or
waiver.

Section 9.06.     TRUSTEE TO SIGN AMENDMENTS, ETC.

                  The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article Nine if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental Indenture until the Board
of Directors approves it. In executing any amended or supplemental indenture,
the Trustee shall be entitled to receive and (subject to Section 7.01 hereof)
shall be fully protected in relying upon, in addition to

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the documents required by Section 10.04 hereof, an Officer's Certificate and an
Opinion of Counsel stating that the execution of such amended or supplemental
indenture is authorized or permitted by this Indenture.

                                   ARTICLE 10.

                                  MISCELLANEOUS

Section 10.01.    TRUST INDENTURE ACT CONTROLS.

                  If any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by TIA ss. 318(c), the imposed duties shall
control.

Section 10.02.    NOTICES.

                  Any notice or communication by the Company or the Trustee to
the others is duly given if in writing and delivered in person or mailed by
first class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next-day delivery, to the
others' address.

                  If to the Company:

                  Grant Prideco, Inc.
                  1450 Lake Robbins Drive, Suite 600
                  The Woodlands, Texas 77380
                  Attention: Chief Financial Officer

                  With a copy to:
                  Fulbright & Jaworski L.L.P.
                  1301 McKinney, Suite 5100
                  Houston, Texas 77010-3095
                  Attention: Charles H. Still

                  If to the Trustee:

                  United States Trust Company of New York
                  2001 Ross Avenue
                  Suite 2700
                  Dallas, Texas 75201-2936
                  Attention:  Corporate Trust Administration

                  The Company or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.

                  All notices and communications (other than those sent to
Holders) shall be deemed to have been duly given: at the time delivered by hand,
if personally delivered;

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five Business Days after being deposited in the mail, postage prepaid, if
mailed; when answered back, if telexed; when receipt acknowledged, if
telecopied; and the next Business Day after timely delivery to the courier, if
sent by overnight air courier guaranteeing next day delivery.

                  Any notice or communication to a Holder shall be mailed by
first class mail, certified or registered, return receipt requested, or by
overnight air courier guaranteeing next day delivery to its address shown on the
register kept by the Registrar. Any notice or communication shall also be so
mailed to any person described in TIA ss. 313(c), to the extent required by the
TIA. 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.

                  Except for a notice to the Trustee, which is deemed given only
when received, and except as otherwise provided in this Indenture, if a notice
or communication is mailed in the manner provided above within the time
prescribed, it is duly given, whether or not the addressee receives it.

                  If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.

                  Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.

                  In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.

Section 10.03.    COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.

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

Section 10.04.    CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.

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

                  (a)  an Officers' Certificate in form and substance
         reasonably satisfactory to the Trustee (which shall include the
         statements set forth in Section 10.05 hereof) stating that, in the
         opinion of the signers, all conditions precedent

                                       87
<PAGE>   95

         and covenants, if any, provided for in this Indenture relating to the
         proposed action have been satisfied; and

                  (b)  an Opinion of Counsel in form and substance
         reasonably satisfactory to the Trustee (which shall include the
         statements set forth in Section 10.05 hereof) stating that, in the
         opinion of such counsel, all such conditions precedent and covenants
         have been satisfied.

Section 10.05.    STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.

                  Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA ss. 314(a)(4)) shall comply with the provisions of TIA
ss. 314(e) and shall include:

                  (a) a statement that the person making such certificate or
         opinion has read such covenant or condition;

                  (b) a brief statement as to the nature and scope of the
         examination or investigation upon which the statements or opinions
         contained in such certificate or opinion are based;

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

                  (d) a statement as to whether or not, in the opinion of such
         person, such condition or covenant has been satisfied.

Section 10.06.    RULES BY TRUSTEE AND AGENTS.

                  The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.

Section 10.07.    NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
                  STOCKHOLDERS.

                  No recourse for the payment of the principal of, premium, if
any, or interest or Liquidated Damages, if any, on any of the Notes, or for any
claim based thereon or otherwise in respect thereof, and no recourse under or
upon any obligation, covenant or agreement of the Company or of any Guarantor
contained in this Indenture or in any of the Notes, or because of the creation
of any Indebtedness represented thereby, shall be had against any incorporator
or past, present or future director, officer, employee, controlling person or
stockholder of the Company or of any Guarantor. Each Holder by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. Such waiver may not be effective to
waive

                                       88
<PAGE>   96

liabilities under the federal securities laws and it is the view of the
Commission that such a waiver is against public policy.

Section 10.08.    GOVERNING LAW.

                  THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE
USED TO CONSTRUE THIS INDENTURE AND THE NOTES WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

Section 10.09.    NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.

                  This Indenture may not be used to interpret any other
indenture, loan or debt agreement of the Company or its Subsidiaries or of any
other person. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.

Section 10.10.    SUCCESSORS.

                  All agreements of the Company in this Indenture and the Notes
shall bind its successors. All agreements of the Trustee in this Indenture shall
bind its successors.

Section 10.11.    SEVERABILITY.

                  In case any provision in this Indenture or in the Notes 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 10.12.    COUNTERPART ORIGINALS.

                  The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.

Section 10.13.    TABLE OF CONTENTS, HEADINGS, ETC.

                  The Table of Contents, Cross-Reference Table and Headings of
the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part of this Indenture and shall
in no way modify or restrict any of the terms or provisions hereof.

                         [Signatures on following page]

                                       89
<PAGE>   97

                                   SIGNATURES

Dated as of December 4, 2000

                                       UNITED STATES TRUST COMPANY OF NEW YORK
                                       as Trustee

                                       By: /s/ John Stohlman
                                          --------------------------------------
                                          John Stohlman
                                          Vice President

                                       GRANT PRIDECO, INC.

                                       By: /s/ John C. Coble
                                          --------------------------------------
                                          John C. Coble, President and
                                          Chief Executive Officer

                                       GP EXPATRIATE SERVICES, INC.

                                       By: /s/ John C. Coble
                                          --------------------------------------
                                          John C. Coble, President and
                                          Chief Executive Officer

                                       GRANT PRIDECO HOLDING, LLC

                                       By: /s/ John C. Coble
                                          --------------------------------------
                                          John C. Coble, President and
                                          Chief Executive Officer

<PAGE>   98

                                       GRANT PRIDECO, LP

                                       By: Grant Prideco Holding, LLC

                                       By: /s/ John C. Coble
                                          --------------------------------------
                                          John C. Coble, President and
                                          Chief Executive Officer

                                       GRANT PRIDECO USA, LLC

                                       By: /s/ Authorized Signatory
                                          --------------------------------------
                                          Name:
                                          Title:

                                       STAR OPERATING COMPANY

                                       By: /s/ John C. Coble
                                          --------------------------------------
                                          John C. Coble, President and
                                          Chief Executive Officer

                                       TA INDUSTRIES, INC.

                                       By: /s/ John C. Coble
                                          --------------------------------------
                                          John C. Coble, President and
                                          Chief Executive Officer

                                       TEXAS ARAI, INC.

                                       By: /s/ John C. Coble
                                          --------------------------------------
                                          John C. Coble, President and
                                          Chief Executive Officer

                                       2
<PAGE>   99

                                       TUBE-ALLOY CAPITAL CORPORATION

                                       By: /s/ John C. Coble
                                          --------------------------------------
                                          John C. Coble, President and
                                          Chief Executive Officer

                                       TUBE-ALLOY CORPORATION

                                       By: /s/ John C. Coble
                                          --------------------------------------
                                          John C. Coble, President and
                                          Chief Executive Officer

                                       XL SYSTEMS INTERNATIONAL, INC.

                                       By: /s/ John C. Coble
                                          --------------------------------------
                                          John C. Coble, President and
                                          Chief Executive Officer

                                       XL SYSTEMS, L.P.

                                       By: /s/ John C. Coble
                                          --------------------------------------
                                          Grant Prideco Holding, LLC

                                       By: /s/ John C. Coble
                                          --------------------------------------
                                          John C. Coble, President and
                                          Chief Executive Officer

                                       3
<PAGE>   100

                                    EXHIBIT A
                                 (Face of Note)

                          9 5/8% SENIOR NOTES DUE 2007

CUSIP  38821G AA 9

NO. 144A-1                                                    UP TO $200,000,000

                               GRANT PRIDECO, INC.

promises to pay to Cede & Co. or registered assigns, the principal sum set forth
in the Schedule of Increases and Decreases attached to this Security on December
1, 2007.

Interest Payment Dates:  June 1 and December 1, commencing June 1, 2001.

Record Dates:  May 15 and November 15.

                                       GRANT PRIDECO, INC.

                                       By: ____________________________
                                            Name:
                                            Title:

                                       By: ____________________________
                                            Name:
                                            Title:

This is one of the Global
Notes referred to in the
within-mentioned Indenture

UNITED STATES TRUST COMPANY
OF NEW YORK,
as Trustee

By: ____________________________________
     Authorized Signatory

Dated: December 4, 2000

================================================================================

                                      A-1
<PAGE>   101

                                 (Back of Note)

                          9 5/8% Senior Notes due 2007

         [THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
         INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE
         BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY
         PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE
         SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF
         THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT
         IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL
         NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO
         SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE
         TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF
         THE COMPANY.

         UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
         DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE 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. UNLESS THIS CERTIFICATE IS
         PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
         COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY
         OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
         CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH
         OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
         (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE
         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.](1)

         THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S.
         SECURITIES ACT OF 1933, AS AMENDED (THE "U.S.

-----------------------------
(1) Used on Global Note only.

                                      A-2
<PAGE>   102

         SECURITIES ACT"), OR OTHER SECURITIES LAWS. NEITHER THIS NOTE NOR ANY
         INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
         TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
         ABSENCE OF SUCH REGISTRATION UNLESS THE TRANSACTION IS EXEMPT FROM, OR
         NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES
         ACT. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1)
         REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
         IN RULE 144A UNDER THE U.S. SECURITIES ACT) OR (B) IT IS NOT A U.S.
         PERSON AND IS ACQUIRING THIS NOTE IN AN "OFFSHORE TRANSACTION" PURSUANT
         TO RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT, (2) AGREES
         THAT IT WILL NOT PRIOR TO (X) THE DATE WHICH IS TWO YEARS (OR SUCH
         SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) UNDER THE U.S.
         SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER) AFTER THE LATER
         OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY PREDECESSOR OF THIS NOTE)
         OR THE LAST DAY ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WERE
         THE OWNERS OF THIS NOTE (OR ANY PREDECESSOR OF THIS NOTE) AND (Y) SUCH
         LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW (THE "RESALE
         RESTRICTION TERMINATION DATE"), OFFER, SELL OR OTHERWISE TRANSFER THIS
         NOTE EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
         STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE U.S. SECURITIES
         ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO
         RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
         INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE U.S. SECURITIES
         ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
         QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER
         IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO CERTAIN INSTITUTIONAL
         ACCREDITED INVESTORS WITHIN THE MEANING OF SUBPARAGRAPHS (A)(1), (2) OR
         (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS PURCHASING FOR
         ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED
         INVESTOR FOR INVESTMENT PURPOSES AND NOT WITH A VIEW OR FOR OFFER OR
         SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES
         ACT, (E) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR
         OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
         U.S. SECURITIES ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION
         FROM THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT, AND (3)
         AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS NOTE IS
         TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS

                                      A-3
<PAGE>   103

         LEGEND; PROVIDED THAT THE COMPANY, THE TRUSTEE, AND THE REGISTRAR SHALL
         HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
         CLAUSE (E) OR (F) TO REQUIRE THAT AN OPINION OF COUNSEL, CERTIFICATIONS
         AND/OR OTHER INFORMATION SATISFACTORY TO THE COMPANY, THE TRUSTEE AND
         THE REGISTRAR IS COMPLETED AND DELIVERED BY THE TRANSFEROR. THIS LEGEND
         WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
         RESTRICTION TERMINATION DATE. AS USED HEREIN, THE TERMS "OFFSHORE
         TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN
         TO THEM BY REGULATION S UNDER THE U.S. SECURITIES ACT.

         Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.

         1. INTEREST. Grant Prideco, Inc., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at
9 5/8% per annum until maturity and shall pay the Liquidated Damages, if any,
payable pursuant to Section 5 of the Registration Rights Agreement referred to
below. The Company shall pay interest and Liquidated Damages, if any,
semi-annually on June 1 and December 1 of each year, or if any such day is not a
Business Day, on the next succeeding Business Day (each an "Interest Payment
Date"). Interest on the Notes shall accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from December 4, 2000;
provided, however, that if there is no existing Default in the payment of
interest, and if this Note is authenticated between a record date referred to on
the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided, further, that
the first Interest Payment Date shall be June 1, 2001. The Company shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand at a rate that is 1% per annum in excess of the rate then in effect; it
shall pay interest (including post-petition interest in any, proceeding under
any Bankruptcy Law) on overdue installments of interest and Liquidated Damages,
if any (without regard to any applicable grace periods) from time to time on
demand at the same rate to the extent lawful. Interest shall be computed on the
basis of a 360-day year of twelve 30-day months.

         2. METHOD OF PAYMENT. The Company shall pay principal, premium, if any,
interest and Liquidated Damages, if any, on the Notes to the persons who are
registered Holders of Notes at the close of business on the May 15 or November
15 next preceding the interest payment date, even if such Notes are cancelled
after such record date and on or before such interest payment date, except as
provided in Section 2.12 of the Indenture with respect to defaulted interest.
The Notes shall be payable by wire transfer of immediately available funds to
the registered Holder of the relevant Global Note and, with respect to
certificated Notes, by wire transfer of immediately available funds in
accordance with instructions provided by the registered holders of

                                      A-4
<PAGE>   104

certificated Notes or, if no such instructions are specified, by mailing a check
to each such Holder's registered address. Such payment shall be in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.

         3. PAYING AGENT AND REGISTRAR. Initially, United States Trust Company
of New York, the Trustee under the Indenture, shall act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.

         4. INDENTURE. The Company issued the Notes under an Indenture dated as
of December 4, 2000 ("Indenture") between the Company and the Trustee. The terms
of the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S.
Code ss.ss. 77aaa-77bbbb). The Notes are subject to all such terms, and Holders
are referred to the Indenture and such Act for a statement of such terms. To the
extent any provision of this Note conflicts with the express provisions of the
Indenture, the provisions of the Indenture shall govern and be controlling. The
Notes are obligations of the Company limited to $200.0 million in aggregate
principal amount.

         5. OPTIONAL REDEMPTION.

         The Company may redeem the Notes, at its option, in whole or in part,
at any time or from time to time prior to their maturity at a redemption price
equal to 100% of the principal amount thereof, plus accrued and unpaid interest
to the redemption date, plus a premium (the "Make-Whole Premium"), if any. In no
event will the redemption price be less than 100% of the principal amount of the
Notes plus accrued and unpaid interest, if any, to the date of redemption.

         The Make-Whole Premium with respect to any Note (or portion thereof) to
be redeemed shall be an amount equal to the excess, if any, of (1) the sum of
the present values, calculated as of the date of redemption, of (a) each
interest payment that, but for such redemption, would have been payable on such
Note (or portion thereof) on each payment date occurring after the redemption
date, and (b) the principal amount that, but for such redemption, would have
been payable at the final maturity of such Note (or portion thereof), over (2)
the principal amount of the Note (or portion thereof).

         6. MANDATORY REDEMPTION.

         Except as set forth in paragraph 7 below, the Company shall not be
required to make mandatory redemption payments with respect to the Notes.

         7. REPURCHASE AT OPTION OF HOLDER.

         (a) Upon the occurrence of a Change of Control Triggering Event, each
Holder shall have the right to require the Company to make an offer (a "Change
of

                                      A-5
<PAGE>   105

Control Offer") to each Holder to repurchase all or any part, equal to $1,000 or
an integral multiple of $1,000, of the Holder's Notes at an offer price in cash
equal to 101% of the aggregate principal amount of Notes repurchased, plus
accrued and unpaid interest and Liquidated Damages, if any, on Notes repurchased
to the date fixed for repurchase (the "Change of Control Payment").

         (b) If the Company or a Restricted Subsidiary consummates any Asset
Sales, when the aggregate amount of Excess Proceeds exceeds $10.0 million in any
calendar year, the Company shall make a pro rata offer to purchase (an "Asset
Sale Offer") to all Holders of Notes and all holders of other Indebtedness that
is pari passu with the Notes containing provisions similar to those set forth in
the Indenture with respect to offers to purchase or redeem with the proceeds of
sales of assets to purchase the maximum principal amount of Notes and such other
pari passu Indebtedness that may be purchased out of the Excess Proceeds. The
offer price in any Asset Sale Offer will be equal to 100% of principal amount
plus accrued and unpaid interest to the date of purchase, and will be payable in
cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer,
the Company may use those Excess Proceeds for any purpose not otherwise
prohibited by the Indenture. If the aggregate principal amount of Notes and
other pari passu Indebtedness tendered into such Asset Sale Offer exceeds the
amount of Excess Proceeds, the Trustee shall select the Notes and such other
pari passu Indebtedness to be purchased on a pro rata basis. Upon completion of
each Asset Sale Offer, the amount of Excess Proceeds will be deemed to have been
reset at zero.

         8. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at least
30 days but not more than 60 days before the redemption date to each Holder
whose Notes are to be redeemed at its registered address. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. On and after the redemption date interest ceases to
accrue on Notes, or portions thereof called for redemption.

         9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Company
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding interest payment date.

         10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.

                                      A-6
<PAGE>   106

         11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the then outstanding
Notes voting as a single class, and any existing default or compliance with any
provision of the Indenture or the Notes may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Notes voting
as a single class. Without the consent of any Holder of a Note, the Indenture or
the Notes may be amended or supplemented to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Notes in addition to or in place of
certificated Notes, to provide for the assumption of the Company's obligations
to Holders of the Notes in case of a merger or consolidation, or sale of
substantially all of the Company's assets, to make any change that would provide
any additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, or to
comply with the requirements of the Commission in order to effect or maintain
the qualification of the Indenture under the Trust Indenture Act.

         12. DEFAULTS AND REMEDIES. Events of Default include, in summary form:
(a) default in the payment when due of principal of or premium, if any, on any
Note when the same becomes due and payable at maturity, upon acceleration,
redemption or otherwise; (b) default in the payment when due of interest on, or
Liquidated Damages with respect to, any Note, and such default continues for a
period of 30 days; (c) default in the performance or breach of the provisions by
the Company or any of its Restricted Subsidiaries of 4.07, 4.09 or Section 5.01
of the Indenture; (d) default in the performance by the Company or any of its
Restricted Subsidiaries of Sections 4.15 or 4.16 of the Indenture, and such
default continues for a period of 30 days after written notice; (e) default in
the performance of or breaches any other covenant or agreement of the Company in
the Indenture or under the Notes (other than a default specified in clause (a),
(b), (c) or (d) above) by the Company or any of its Restricted Subsidiaries and
such default or breach continues for a period of 60 days after written notice by
the Trustee to the Company or by the Holders of 25% or more in aggregate
principal amount of the Notes to the Company and the Trustee; (f) certain
defaults under any mortgage, indenture or instrument under which there may be
issued or by which there may be secured or evidenced any Indebtedness for money
borrowed by the Company or any of its Restricted Subsidiaries (or the payment of
which is guaranteed by the Company or any of its Restricted Subsidiaries)
whether such Indebtedness or guarantee now exists, or is created after the date
of the Indenture; (g) default by the Company or any of its Subsidiaries in the
payment of final judgments aggregating in excess of $10.0 million, which
judgments are not paid, discharged or stayed for a period of 60 days; (h) except
as permitted by the Indenture, any Subsidiary Guarantee shall be held in any
judicial proceeding to be unenforceable or invalid or shall cease for any reason
to be in full force and effect or any Guarantor, or any person acting on behalf
of any Guarantor, shall deny or disaffirm its obligations under its Subsidiary
Guarantee; and (i) certain events of bankruptcy or insolvency with respect to
the Company or any of its Restricted Subsidiaries. If any Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and

                                      A-7
<PAGE>   107

payable, subject to certain conditions. Notwithstanding the foregoing, in the
case of an Event of Default arising from certain events of bankruptcy or
insolvency, all outstanding Notes shall become due and payable without further
action or notice. Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. Subject to certain limitations, Holders of a majority
in aggregate principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of the Notes notice of any continuing Default or Event of Default
(except a Default or Event of Default relating to the payment of principal or
interest) if it determines that withholding notice is in their interest. The
Holders of a majority in aggregate principal amount of the Notes then
outstanding by notice to the Trustee may on behalf of the Holders of all of the
Notes waive any existing Default or Event of Default and its consequences under
the Indenture except a continuing Default or Event of Default in the payment of
interest and premium, if any, on, or the principal of, the Notes. The Company is
required to deliver to the Trustee annually a statement regarding compliance
with the Indenture, and the Company is required upon becoming aware of any
Default or Event of Default, to deliver to the Trustee a statement specifying
such Default or Event of Default.

         13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.

         14. NO RECOURSE AGAINST OTHERS. No recourse for the payment of the
principal of, premium, if any, or interest or Liquidated Damages, if any, on any
of the Notes, or for any claim based thereon or otherwise in respect thereof,
and no recourse under or upon any obligation, covenant or agreement of the
Company contained in the Indenture or in any of the Notes, or because of the
creation of any Indebtedness represented thereby, shall be had against any
incorporator or past, present or future director, officer, employee, controlling
person or stockholder of the Company. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.

         15. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.

         16. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
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 Gifts
to Minors Act).

         17. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of
Notes under the Indenture, Holders of Restricted Global Notes and Restricted
Definitive Notes

                                      A-8
<PAGE>   108

shall have all the rights set forth in the Registration Rights Agreement dated
as of December 4, 2000, between the Company and the parties named on the
signature pages thereof (the "Registration Rights Agreement").

         18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.

         The Company shall furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:

         Grant Prideco, Inc.
         1450 Lake Robbins Drive, Suite 600
         The Woodlands, Texas 77380
         Attention: Chief Financial Officer

                                      A-9
<PAGE>   109

                                 ASSIGNMENT FORM

To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to

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

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

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

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

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

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

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

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

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

Date: _____________________

                                       Your Signature: _________________________

                                       (Sign exactly as your name appears on the
                                       face of this Note)

                                       Signature Guarantee: ____________________

                                      A-10
<PAGE>   110

                       OPTION OF HOLDER TO ELECT PURCHASE

                  If you want to elect to have this Note purchased by the
Company pursuant to Section 4.15 or 4.16 of the Indenture, check the box below:

                  [ ] Section 4.15            [ ] Section 4.16

                  If you want to elect to have only part of the Note purchased
by the Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state
the amount you elect to have purchased: $________

Date: _______________

                                       Your Signature: _________________________

                                       (Sign exactly as your name appears on the
                                        Note)

                                        Signature Guarantee:____________________

                                        Tax Identification No: _________________

                                      A-11
<PAGE>   111

              SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE

                  The initial principal amount of this Global Note is Two
Hundred Million Dollars ($200,000,000). The following exchanges of a part of
this Global Note for an interest in another Global Note or for a Definitive
Note, or exchanges of a part of another Global Note or Definitive Note for an
interest in this Global Note, resulting in increases or decreases of the
principal amount of this Global Note, have been made:

Date of       Amount of         Amount of      Principal Amount    Signature of
Exchange     decrease in       increase in      of this Global      authorized
           Principal Amount  Principal Amount   Note following       officer
               of this           of this        such decrease      of Trustee or
             Global Note       Global Note      (or increase)        Custodian
--------------------------------------------------------------------------------

                                      A-12
<PAGE>   112

                                    EXHIBIT B

                         FORM OF CERTIFICATE OF TRANSFER

Grant Prideco, Inc.
1450 Lake Robbins Drive, Suite 600
The Woodlands, Texas 77380

United States Trust Company of New York
114 West 47th Street
New York, New York 10036

             Re:    9-5/8% Senior Notes due 2007 of Grant Prideco, Inc.
                    ---------------------------------------------------

                  Reference is hereby made to the Indenture, dated as of
December 4, 2000 (the "Indenture"), between Grant Prideco, Inc., as issuer (the
"Company"), and United States Trust Company of New York, as trustee. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Indenture.

                  ______________, (the "Transferor") owns and proposes to
transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in
the principal amount of $___________ in such Note[s] or interests (the
"Transfer"), to __________ (the "Transferee"), as further specified in Annex A
hereto. In connection with the Transfer, the Transferor hereby certifies that:

A.   [CHECK ALL THAT APPLY]

1. [ ]  Check if Transferee shall take delivery of a beneficial interest in
the 144A Global Note or a Definitive Note Pursuant to Rule 144A. The Transfer is
being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933 (the "Securities Act"), and, accordingly, the
Transferor hereby further certifies that the beneficial interest or Definitive
Note is being transferred to a person that the Transferor reasonably believed
and believes is purchasing the beneficial interest or Definitive Note for its
own account, or for one or more accounts with respect to which such person
exercises sole investment discretion, and such person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A in a transaction
meeting the requirements of Rule 144A and such Transfer is in compliance with
any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note shall be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the 144A Global Note or the Definitive Note and in the
Indenture and the Securities Act.

                                      B-1
<PAGE>   113

2. [ ] Check if Transferee shall take delivery of a beneficial interest in
the Regulation S Global Note or a Definitive Note pursuant to Regulation S. The
Transfer is being effected pursuant to and in accordance with Rule 904 under the
Securities Act and, accordingly, the Transferor hereby further certifies that
(i) the Transfer is not being made to a person in the United States and (x) at
the time the buy order was originated, the Transferee was outside the United
States or such Transferor and any person acting on its behalf reasonably
believed and believes that the Transferee was outside the United States or (y)
the transaction was executed in, on or through the facilities of a designated
offshore securities market and neither such Transferor nor any person acting on
its behalf knows that the transaction was prearranged with a buyer in the United
States, (ii) no directed selling efforts have been made in contravention of the
requirements of Rule 904(b) of Regulation S under the Securities Act, (iii) the
transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act and (iv) if the proposed transfer is being
made prior to the expiration of the Restricted Period, the transfer is not being
made to a U.S. person or for the account or benefit of a U.S. person (other than
an Initial Purchaser). Upon consummation of the proposed transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note shall be subject to the restrictions on Transfer enumerated in
the Private Placement Legend printed on the Regulation S Global Note and/or the
Definitive Note and in the Indenture and the Securities Act.

3. [ ] Check and complete if Transferee shall take delivery of a
beneficial interest in a Definitive Note pursuant to any provision of the
Securities Act other than Rule 144A or Regulation S. The Transfer is being
effected in compliance with the transfer restrictions applicable to beneficial
interests in Restricted Global Notes and Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act and any applicable blue
sky securities laws of any state of the United States, and accordingly the
Transferor hereby further certifies that (check one):

         (a) such Transfer is being effected pursuant to and in accordance with
Rule 144 under the Securities Act;

                                       or

         (b) such Transfer is being effected to the Company or a subsidiary
thereof;

                                       or

         (c) such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act;

                                       or

         (d) such Transfer is being effected to an Institutional Accredited
Investor and pursuant to an exemption from the registration requirements of the
Securities Act other than Rule

                                      B-2
<PAGE>   114

144A, Rule 144 or Rule 904, and the Transferor hereby further certifies that it
has not engaged in any general solicitation within the meaning of Regulation D
under the Securities Act and the Transfer complies with the transfer
restrictions applicable to beneficial interests in a Restricted Global Note or
Restricted Definitive Notes and the requirements of the exemption claimed, which
certification is supported by (1) a certificate executed by the Transferee in
the form of Exhibit D to the Indenture, and (2) an Opinion of Counsel provided
by the Transferor or the Transferee (a copy of which the Transferor has attached
to this certification), to the effect that such Transfer is in compliance with
the Securities Act. Upon consummation of the proposed transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note shall be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Definitive Notes and in the
Indenture and the Securities Act.

5. [ ] CHECK IF TRANSFEREE SHALL TAKE DELIVERY OF A BENEFICIAL INTEREST IN AN
UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.

         (a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note shall no longer be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Restricted Global Notes, on
Restricted Definitive Notes and in the Indenture.

         (b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer
is being effected pursuant to and in accordance with Rule 903 or Rule 904 under
the Securities Act and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any state of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note shall no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on Restricted Definitive Notes and in the Indenture.

         (c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The
Transfer is being effected pursuant to and in compliance with an exemption
from the registration requirements of the Securities Act other than Rule 144,
Rule 903 or Rule 904 and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of any
State of the United States and (ii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note shall not be subject

                                      B-3
<PAGE>   115

to the restrictions on transfer enumerated in the Private Placement Legend
printed on the Restricted Global Notes or Restricted Definitive Notes and in the
Indenture.

                  This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.

                                       [Insert Name of Transferor]

                                       By: _________________________________
                                            Name:
                                            Title:

Dated: ________________ , _________

                       ANNEX A TO CERTIFICATE OF TRANSFER

1.       The Transferor owns and proposes to transfer the following:

                                   [CHECK ONE]

         (a) [ ]  a beneficial interest in the:

                  (i)   [ ]  144A Global Note (CUSIP ______ ), or

                  (ii)  [ ]  Regulation S Global Note (CUSIP ______ ), or

         (b) [ ]  a Restricted Definitive Note.

2.       After the Transfer the Transferee shall hold:

                                   [CHECK ONE]

         (a) [ ]  a beneficial interest in the:

                  (i)   [ ]  144A Global Note (CUSIP ______ ), or

                  (ii)  [ ]  Regulation S Global Note (CUSIP ______ ), or

                  (iii) [ ]  Unrestricted Global Note (CUSIP ______ ); or

         (b) [ ]  a Restricted Definitive Note; or

         (c) [ ]  an Unrestricted Definitive Note,

         in accordance with the terms of the Indenture.

                                      B-4
<PAGE>   116

                                    EXHIBIT C
                         FORM OF CERTIFICATE OF EXCHANGE

Grant Prideco, Inc.
1450 Lake Robbins Drive, Suite 600
The Woodlands, Texas 77380

United States Trust Company of New York
114 West 47th Street
New York, New York 10036

             Re:  9-5/8% Senior Notes due 2007 of Grant Prideco, Inc.
                  ---------------------------------------------------

                              (CUSIP______________)

         Reference is hereby made to the Indenture, dated as of December 4, 2000
(the "Indenture"), between Grant Prideco, Inc., as issuer (the "Company"), and
United States Trust Company of New York, as trustee. Capitalized terms used but
not defined herein shall have the meanings given to them in the Indenture.

         ____________, (the "Owner") owns and proposes to exchange the Note[s]
or interest in such Note[s] specified herein, in the principal amount of
$____________ in such Note[s] or interests (the "Exchange"). In connection with
the Exchange, the Owner hereby certifies that:

1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN AN UNRESTRICTED GLOBAL NOTE

         (a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the United States Securities Act of
1933 (the "Securities Act"), (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest in an
Unrestricted Global Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.

         (b) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an

                                      C-1
<PAGE>   117

Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Definitive Note is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.

         (c) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.

         (d) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.

2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED
GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES

         (a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued shall continue
to be subject to the

                                      C-2
<PAGE>   118

restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Definitive Note and in the Indenture and the Securities Act.

         (b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the
[CHECK ONE]

         [ ] 144A Global Note,

         [ ] Regulation S Global Note,

         with an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer and (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and pursuant to
and in accordance with the Securities Act, and in compliance with any applicable
blue sky securities laws of any state of the United States. Upon consummation of
the proposed Exchange in accordance with the terms of the Indenture, the
beneficial interest issued shall be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the relevant Restricted
Global Note and in the Indenture and the Securities Act.

                                      C-3
<PAGE>   119

         This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.

                                       -----------------------------------
                                       [Insert Name of Owner]

                                       By: _______________________________
                                            Name:
                                            Title:

Dated: ________________ , ____

                                      C-4
<PAGE>   120

                                    EXHIBIT D

                            FORM OF CERTIFICATE FROM
                   ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

Grant Prideco, Inc.
1450 Lake Robbins Drive, Suite 600
The Woodlands, Texas 77380

United States Trust Company of New York
114 West 47th Street
New York, New York 10036

                  Re:  9-5/8% Senior Notes due 2007
                       ----------------------------

         Reference is hereby made to the Indenture, dated as of December 4, 2000
(the "Indenture"), by and between Grant Prideco, Inc. as issuer (the "Company"),
and United States Trust Company of New York, as trustee. Capitalized terms used
but not defined herein shall have the meanings given to them in the Indenture.

         In connection with our proposed purchase of $____________ aggregate
principal amount of:

         (a) [ ]  a beneficial interest in a Global Note, or

         (b) [ ]  a Definitive Note,

          we confirm that:

         1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").

         2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter, (D) outside the United States in
accordance with Rule 904 of

                                      S-1
<PAGE>   121

Regulation S under the Securities Act, (E) pursuant to the provisions of Rule
144(k) under the Securities Act or (F) pursuant to an effective registration
statement under the Securities Act, and we further agree to provide to any
person purchasing the Definitive Note or beneficial interest in a Global Note
from the Company in a transaction meeting the requirements of clauses (A)
through (E) of this paragraph a notice advising such purchaser that resales
thereof are restricted as stated herein.

         3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by
the Company will bear a legend to the foregoing effect.

         4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.

         5. We are acquiring the Notes or beneficial interest therein purchased
by the Company for our own account or for one or more accounts (each of which is
an institutional "accredited investor") as to each of which we exercise sole
investment discretion.

         You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.

                                        ----------------------------------------
                                         [Insert Name of Accredited Investor]

                                        By:  ___________________________________
                                              Name:
                                              Title:

Dated: _____________________________

                                      C-2<PAGE>   1

                                                                   EXHIBIT 10.13

                   EXCHANGE AND REGISTRATION RIGHTS AGREEMENT

                          Dated as of December 4, 2000

                                      among

                              Grant Prideco, Inc.,

               The Guarantors from time to time party hereto, and

            Lehman Brothers Inc., on behalf of the Initial Purchasers

<PAGE>   2

                   EXCHANGE AND REGISTRATION RIGHTS AGREEMENT

                  This Exchange and Registration Rights Agreement (this
"Agreement") is made and entered into as of December 4, 2000 by and among Grant
Prideco, Inc., a Delaware corporation (the "Company"), the Guarantors (as
defined herein) and Lehman Brothers Inc. on behalf of Deutsche Bank Securities
Inc., UBS Warburg LLC and Simmons & Company International (collectively, the
"Initial Purchasers").

                  This Agreement is made pursuant to the Purchase Agreement,
dated November 29, 2000 (the "Purchase Agreement"), by and among the Company,
the Existing Guarantors (as defined herein) and the Initial Purchasers, which
provides for the sale by the Company to the Initial Purchasers of $200,000,000
aggregate principal amount of the Company's 9 5/8% Senior Notes due 2007 (the
"Notes"). The Notes are, and the Exchange Notes (as defined herein) will be,
guaranteed on a senior basis by the Guarantors (as defined herein). In order to
induce the Initial Purchasers to purchase the Notes, the Company and the
Existing Guarantors have agreed to provide the registration rights set forth in
this Agreement. The execution and delivery of this Agreement is a condition to
the obligations of the Initial Purchasers set forth in Section 7 of the Purchase
Agreement.

                  The parties hereby agree as follows:

     SECTION 1.        DEFINITIONS

                  As used in this Agreement, the following capitalized terms
shall have the following meanings:

                  Additional Guarantor: Any subsidiary of the Company that
executes a Guarantee under the Indenture after the date of this Agreement.

                  Advice: As defined in Section 6(e) hereof.

                  Blackout Period: As defined in Section 5(a) hereof.

                  Blue Sky Application: As defined in Section 8(a) hereof.

                  Broker-Dealer: Any broker or dealer registered under the
Exchange Act.

                  Closing Date: The date of this Agreement.

                  Commission: The U.S. Securities and Exchange Commission.

                  Consummate: A Registered Exchange Offer shall be deemed
"Consummated" for purposes of this Agreement upon the occurrence of (i) the
filing and effectiveness under the Securities Act of the Exchange Offer
Registration Statement relating to the Exchange Notes to be issued in the
Exchange Offer, (ii) the maintenance of such Registration Statement continuously
effective and the keeping of the Exchange

<PAGE>   3

Offer open for a period not less than the minimum period required pursuant to
Section 3(b) hereof, and (iii) the delivery by the Company to the Registrar
under the Indenture of Exchange Notes in the same aggregate principal amount as
the aggregate principal amount of Notes that were tendered by Holders thereof
pursuant to the Exchange Offer.

                  Damages Payment Date: With respect to the Notes, each Interest
Payment Date.

                  Exchange Act: The U.S. Securities Exchange Act of 1934, as
amended.

                  Exchange Notes: The Company's 9 5/8% Senior Notes due 2007 to
be issued pursuant to the Indenture in the Exchange Offer, together with the
related Guarantees.

                  Exchange Offer: The registration by the Company under the
Securities Act of the Exchange Notes pursuant to a Registration Statement
pursuant to which the Company offers the Holders of all outstanding Transfer
Restricted Securities the opportunity to exchange all such outstanding Transfer
Restricted Securities held by such Holders for Exchange Notes in an aggregate
principal amount equal to the aggregate principal amount of the Transfer
Restricted Securities validly tendered in such exchange offer by such Holders.

                  Exchange Offer Registration Statement: The Registration
Statement relating to the Exchange Offer, including the related Prospectus.

                  Existing Guarantors: GP Expatriate Services, Inc.; Grant
Prideco Holding, LLC; Grant Prideco, L.P.; Grant Prideco USA, LLC; Star
Operating Company; TA Industries, Inc.; Texas Arai, Inc.; Tube-Alloy Capital
Corporation; Tube-Alloy Corporation; XL Systems International, Inc.; and XL
Systems, L.P.

                  Guarantee: Guarantees by the Guarantors of the Company's
obligations under the Notes, the Exchange Notes and the Indenture.

                  Guarantors: The Additional Guarantors and the Existing
Guarantors.

                  Holders: As defined in Section 2(b) hereof.

                  Indenture: The Indenture, dated as of the date hereof, among
the Company, the Existing Guarantors and United States Trust Company of New
York, as trustee (the "Trustee"), pursuant to which the Notes and the Exchange
Notes are to be issued, as such Indenture may be amended or supplemented from
time to time in accordance with the terms thereof.

                  Initial Purchasers: As defined in the preamble hereto.

                  Interest Payment Date: As defined in the Indenture and the
Notes.

                                       2
<PAGE>   4

                  NASD: National Association of Securities Dealers, Inc.

                  Person: An individual, partnership, corporation, limited
liability company, unincorporated organization, association, joint-stock
company, trust, joint venture, government or any agency or political subdivision
thereof or any other entity.

                  Prospectus: The prospectus included in a Registration
Statement as amended or supplemented by any prospectus supplement and by all
other amendments thereto, including post-effective amendments, and all material
incorporated by reference into such Prospectus.

                  Record Holder: With respect to any Damages Payment Date
relating to Notes, each Person who is a Holder of Notes on the record date with
respect to the Interest Payment Date on which such Damages Payment Date shall
occur.

                  Registration Default: As defined in Section 5(a) hereof.

                  Registration Statement: Any Registration Statement of the
Company relating to (a) an offering of Exchange Notes pursuant to an Exchange
Offer or (b) the registration for resale of Transfer Restricted Securities
pursuant to the Shelf Registration Statement, which is filed pursuant to the
provisions of this Agreement, in each case including the Prospectus included
therein, all amendments and supplements thereto (including post-effective
amendments) and all exhibits and material incorporated by reference therein.

                  Securities Act: The U.S. Securities Act of 1933, as amended.

                  Shelf Filing Deadline: As defined in Section 4(a) hereof.

                  Shelf Registration Statement: As defined in Section 4(a)
hereof.

                  TIA: The U.S. Trust Indenture Act of 1939 (15 U.S.C. Section
77aaa-77bbbb) as in effect on the date of the Indenture.

                  Transfer Restricted Securities: Each Note or Exchange Note
(including the related Guarantees), as applicable, until the earliest to occur
of (a) the date on which such Note is exchanged by a person other than a
Broker-Dealer in the Exchange Offer in exchange for an Exchange Note, so long as
such person is not prohibited from reselling such Exchange Notes to the public
without delivering a prospectus and the Prospectus in the Exchange Offer
Registration Statement is not sufficient for such purpose, (b) following the
exchange by a Broker-Dealer in the Exchange Offer of a Note for an Exchange
Note, the date on which that Exchange Note is sold to a purchaser who receives
from that Broker-Dealer on or prior to the date of such sale a copy of the
Prospectus contained in the Exchange Offer Registration Statement, (c) the date
on which such Note or Exchange Note has been effectively registered under the
Securities Act and

                                       3
<PAGE>   5

disposed of in accordance with a Shelf Registration Statement and (d) the date
on which such Note is sold by the Holder pursuant to Rule 144 under the
Securities Act.

                  Underwritten Registration or Underwritten Offering: A
registration in which securities of the Company are sold to an underwriter for
reoffering to the public.

     SECTION 2.        SECURITIES SUBJECT TO THIS AGREEMENT

                  (a) Transfer Restricted Securities. The securities entitled to
the benefits of this Agreement are the Transfer Restricted Securities.

                  (b) Holders of Transfer Restricted Securities. A Person is
deemed to be a holder of Transfer Restricted Securities (each, a "Holder")
whenever such Person owns Transfer Restricted Securities.

     SECTION 3.        REGISTERED EXCHANGE OFFER

                  (a) Unless the Exchange Offer shall not be permissible under
applicable law or Commission policy (after the procedures set forth in Section
6(a) below have been complied with), the Company and the Guarantors shall use
(i) their reasonable best efforts to cause to be filed with the Commission as
soon as practicable after the Closing Date, but in no event later than 90 days
after the Closing Date, a Registration Statement under the Securities Act
relating to the Exchange Notes and the Exchange Offer, (ii) their reasonable
best efforts to cause such Registration Statement to be declared effective on or
prior to 180 days after the Closing Date, (iii) in connection with the
foregoing, file (A) all pre-effective amendments to such Registration Statement
as may be necessary in order to cause such Registration Statement to become
effective, (B) if applicable, a post-effective amendment to such Registration
Statement pursuant to Rule 430A under the Securities Act and (C) cause all
necessary filings in connection with the registration and qualification of the
Exchange Notes to be made under the blue sky laws of such jurisdictions as are
necessary to permit Consummation of the Exchange Offer and (iv) upon the
effectiveness of such Registration Statement, commence the Exchange Offer. The
Exchange Offer shall be on the appropriate form permitting registration of the
Exchange Notes to be offered in exchange for the Transfer Restricted Securities
and to permit resales of Exchange Notes held by Broker-Dealers as contemplated
by Section 3(c) below.

                  (b) The Company and the Guarantors shall use their reasonable
best efforts to cause the Exchange Offer Registration Statement to be effective
continuously and shall keep the Exchange Offer open for a period of not less
than the minimum period required under applicable U.S. Federal and state
securities laws to Consummate the Exchange Offer; provided, however, that in no
event shall such period be less than 20 business days. The Company and the
Guarantors shall cause the Exchange Offer to comply with all applicable U.S.
federal and state securities laws. No securities other than the Exchange Notes
and the Guarantees shall be included in the Exchange Offer Registration
Statement. The Company and the Guarantors shall use their reasonable best

                                       4
<PAGE>   6

efforts to cause the Exchange Offer to be Consummated on the earliest
practicable date after the Exchange Offer Registration Statement has become
effective, but in any event on or prior to the 210th day after the Closing Date.

                  (c) The Company and the Guarantors shall indicate in a "Plan
of Distribution" section of the Prospectus contained in the Exchange Offer
Registration Statement that any Broker-Dealer who holds Notes that are Transfer
Restricted Securities and that were acquired for its own account as a result of
market-making activities or other trading activities (other than Transfer
Restricted Securities acquired directly from the Company), may exchange such
Notes pursuant to the Exchange Offer; however, such Broker-Dealer may be deemed
to be an "underwriter" within the meaning of the Securities Act and must,
therefore, deliver a Prospectus meeting the requirements of the Securities Act
in connection with any resales of the Exchange Notes received by such
Broker-Dealer in the Exchange Offer, which Prospectus delivery requirement may
be satisfied by the delivery by such Broker-Dealer of the Prospectus contained
in the Exchange Offer Registration Statement. Such "Plan of Distribution"
section shall also contain all other information with respect to such resales by
Broker-Dealers that the Commission may require in order to permit such resales
pursuant thereto, but such "Plan of Distribution" shall not name any such
Broker-Dealer or disclose the amount of Notes held by any such Broker-Dealer
except to the extent required by the Commission.

                  The Company and the Guarantors shall use their reasonable best
efforts to keep the Exchange Offer Registration Statement continuously
effective, supplemented and amended as required by the provisions of Section
6(c) below to the extent necessary to ensure that it is available for resales of
Exchange Notes acquired by Broker-Dealers for their own accounts as a result of
market-making activities or other trading activities, and to ensure that it
conforms with the requirements of this Agreement, the Securities Act and the
policies, rules and regulations of the Commission as announced from time to
time, for a period of at least 90 days after the Consummation of the Exchange
Offer.

                  The Company and the Guarantors shall provide sufficient copies
of the latest version of such Prospectus to Broker-Dealers promptly upon request
at any time during such 90-day period in order to facilitate such resales.

     SECTION 4.        SHELF REGISTRATION

                  (a) Shelf Registration. If (i) the Company and the Guarantors
are not required to file an Exchange Offer Registration Statement or to
Consummate the Exchange Offer because the Exchange Offer is not permitted by
applicable U.S. law or Commission policy (after the procedures set forth in
Section 6(a) below have been complied with) or (ii) if any Holder of Transfer
Restricted Securities shall notify the Company prior to the 20th day following
the Consummation of the Exchange Offer that such Holder (A) is prohibited by
applicable U.S. law or Commission policy from participating in the Exchange
Offer, (B) may not resell the Exchange Notes acquired by it in the Exchange
Offer to the public without delivering a prospectus and that the Prospectus
contained in the Exchange Offer Registration Statement is not appropriate or

                                       5
<PAGE>   7

available for such resales by such Holder or (C) is a Broker-Dealer and holds
Notes acquired directly from the Company or one of its affiliates, then the
Company and the Guarantors shall:

                           (x) use their reasonable best efforts to cause to be
                  filed a Registration Statement pursuant to Rule 415 under the
                  Securities Act, which may be an amendment to the Exchange
                  Offer Registration Statement if permitted by the rules and
                  regulations of the Commission (in either event, the "Shelf
                  Registration Statement") on or prior to the earliest to occur
                  of (1) the 60th day after the date on which the Company
                  determine that they are not required to file the Exchange
                  Offer Registration Statement, or permitted to Consummate the
                  Exchange Offer and (2) the 60th day after the date on which
                  the Company receive notice from a Holder of Transfer
                  Restricted Securities as contemplated by clause (ii) of
                  paragraph (a) above (such earliest date being the "Shelf
                  Filing Deadline"), which Shelf Registration Statement shall
                  provide for resales of all Transfer Restricted Securities by
                  the Holders which shall have provided the information required
                  pursuant to Section 4(b) hereof; and

                           (y) use their reasonable best efforts to cause such
                  Shelf Registration Statement to be declared effective by the
                  Commission on or before the later of the 90th day after the
                  Shelf Filing Deadline and the 180th day after the Closing
                  Date.

Subject to Section 5(b), the Company and the Guarantors shall use their
reasonable best efforts to keep such Shelf Registration Statement continuously
effective, supplemented and amended as required by the provisions of Sections
6(b) and (c) hereof to the extent necessary to ensure that it is available for
resales of Notes or Exchange Notes by the Holders of Transfer Restricted
Securities entitled to the benefit of this Section 4(a), and to ensure that it
conforms with the requirements of this Agreement, the Securities Act and the
policies, rules and regulations of the Commission as announced from time to
time, for a period of at least two years following the Closing Date or such
shorter period that will terminate when all Notes or Exchange Notes covered by
the Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement.

                  (b) Provision by Holders of Certain Information in Connection
with the Shelf Registration Statement. No Holder of Transfer Restricted
Securities may include any of its Transfer Restricted Securities in any Shelf
Registration Statement pursuant to this Agreement unless and until such Holder
furnishes to the Company in writing, within 20 days after receipt of a request
therefor, such information as the Company may reasonably request for use in
connection with any Shelf Registration Statement or Prospectus or preliminary
Prospectus included therein. No Holder of Transfer Restricted Securities shall
be entitled to Additional Interest pursuant to Section 5 hereof unless and until
such Holder shall have used its reasonable best efforts to provide all such
reasonably requested information. Each Holder as to which any Shelf Registration
Statement is being effected agrees to furnish promptly to the Company all
information required to be disclosed in order to make the information previously
furnished to the Company by such Holder not materially misleading.

                                       6
<PAGE>   8

     SECTION 5.        ADDITIONAL INTEREST

                  (a) If (i) any of the Registration Statements required by this
Agreement are not filed with the Commission on or prior to the date specified
for such filing in Sections 3(a) and 4(a), as applicable, (ii) any of such
required Registration Statements have not been declared effective by the
Commission on or prior to the date specified for such effectiveness in Sections
3(a) and 4(a), as applicable, (iii) the Exchange Offer has not been Consummated
within 210 days after the Closing Date, or longer if required by applicable U.S.
Federal and state securities laws, with respect to the Exchange Offer
Registration Statement or (iv) any Registration Statement required by this
Agreement is filed and declared effective but shall thereafter cease to be
effective or fail to be usable in connection with resales of Transfer Restricted
Securities without being succeeded immediately by a post-effective amendment to
such Registration Statement that cures such failure and that is itself
immediately declared effective (except as permitted in paragraph (b); such
period of time during which any such Registration Statement is not effective or
any such Registration Statement or the related Prospectus is not usable being
referred to as a "Blackout Period") (each such event referred to in clauses (i)
through (iv), a "Registration Default"), the Company and the Guarantors jointly
and severally agree to pay additional interest ("Additional Interest") to each
Holder of Transfer Restricted Securities adversely affected by such Registration
Default, in an amount equal to 0.25% per year of the principal amount of
Transfer Restricted Securities held by such Holder with respect to the first
90-day period immediately following the occurrence of such Registration Default.
The amount of Additional Interest shall increase by an additional 0.25% per year
of the principal amount of Transfer Restricted Securities with respect to each
subsequent 90-day period (or portion thereof) until all Registration Defaults
have been cured, up to a maximum amount of Additional Interest of 1.00% of the
principal amount of Transfer Restricted Securities. All accrued Additional
Interest shall be paid to Record Holders by the Company and the Guarantors in
the same manner as interest is paid under the Notes. Following the cure of all
Registration Defaults relating to any particular Transfer Restricted Securities,
the accrual of Additional Interest with respect to such Transfer Restricted
Securities will cease.

                  (b) A Registration Default referred to in Section 5(a)(iv)
shall be deemed not to have occurred and be continuing in relation to a
Registration Statement or the related Prospectus if (i) the Blackout Period has
occurred solely as a result of (x) the filing of a post-effective amendment to
such Shelf Registration Statement to incorporate annual audited financial
information with respect to the Company where such post-effective amendment is
not yet effective and needs to be declared effective to permit Holders to use
the related Prospectus or (y) the occurrence of other material events with
respect to the Company that would need to be described in such Registration
Statement or the related Prospectus and (ii) in the case of clause (y), the
Company is proceeding promptly and in good faith to amend or supplement
(including by way of filing documents under the Exchange Act which are
incorporated by reference into the Registration Statement) such Registration
Statement and the related Prospectus to describe such events; provided, however,
that in any case if such Blackout Period occurs

                                       7
<PAGE>   9

for a continuous period in excess of 30 days, a Registration Default shall be
deemed to have occurred on the 31st day of such Blackout Period and Additional
Interest shall be payable in accordance with the above paragraph from the day
such Registration Default occurs until such Registration Default is cured or
until the Company is no longer required pursuant to this Agreement to keep such
Registration Statement effective or such Registration Statement or the related
Prospectus usable; provided, further, that in no event shall the total of all
Blackout Periods exceed 45 days in the aggregate of any 12-month period.

                  All payment obligations of the Company and the Guarantors set
forth in this section that are outstanding with respect to any Transfer
Restricted Security at the time such security ceases to be a Transfer Restricted
Security shall survive until such time as all such payment obligations with
respect to such security shall have been satisfied in full.

SECTION 6.        REGISTRATION PROCEDURES

                  (a) Exchange Offer Registration Statement. In connection with
the Exchange Offer, the Company and the Guarantors shall comply with all of the
provisions of Section 6(c) below, shall use their reasonable best efforts to
effect such exchange to permit the sale of Transfer Restricted Securities being
sold in accordance with the intended method or methods of distribution thereof,
and shall comply with all of the following provisions:

                           (i) As a condition to its participation in the
                  Exchange Offer pursuant to the terms of this Agreement, each
                  Holder of Transfer Restricted Securities shall furnish, upon
                  the request of the Company, prior to the Consummation thereof,
                  a written representation to the Company and the Guarantors
                  (which may be contained in the letter of transmittal
                  contemplated by the Exchange Offer Registration Statement) to
                  the effect that (A) it is not an affiliate of the Company, (B)
                  it is not engaged in, and does not intend to engage in, and
                  has no arrangement or understanding with any Person to
                  participate in, a distribution of the Exchange Notes to be
                  issued in the Exchange Offer and (C) it is acquiring the
                  Exchange Notes in its ordinary course of business. In
                  addition, all such Holders of Transfer Restricted Securities
                  shall otherwise cooperate in the Company's and the Guarantors'
                  preparations for the Exchange Offer. Each Holder hereby
                  acknowledges and agrees that any Broker-Dealer and any such
                  Holder using the Exchange Offer to participate in a
                  distribution of the securities to be acquired in the Exchange
                  Offer (1) could not under Commission policy as in effect on
                  the date of this Agreement rely on the position of the
                  Commission enunciated in Exxon Capital Holdings Corporation
                  (available May 13, 1988) and Morgan Stanley and Co., Inc.
                  (available June 5, 1991), as interpreted in the Commission's
                  letter to Shearman & Sterling dated July 2, 1993, and similar
                  no-action letters, and (2) must comply with the registration
                  and prospectus delivery requirements of the Securities Act in
                  connection with a secondary resale transaction and that such a
                  secondary resale transaction should be covered by an

                                       8
<PAGE>   10

                  effective Registration Statement containing the selling
                  security holder information required by Item 507 or 508, as
                  applicable, of Regulation S-K if the resales are of Exchange
                  Notes obtained by such Holder in exchange for Notes acquired
                  by such Holder directly from the Company.

                           (ii) Prior to effectiveness of the Exchange Offer
                  Registration Statement, the Company and the Guarantors shall
                  state to the Commission that the Company and the Guarantors
                  are registering the Exchange Offer in reliance on the position
                  of the Commission enunciated in Exxon Capital Holdings
                  Corporation (available May 13, 1988) and Morgan Stanley and
                  Co., Inc. (available June 5, 1991) and shall represent to the
                  Commission that neither the Company nor any Guarantor has
                  entered into any arrangement or understanding with any Person
                  to distribute the Exchange Notes to be received in the
                  Exchange Offer and that, to the best of the Company's and each
                  Guarantor's information and belief, each Holder participating
                  in the Exchange Offer is acquiring the Exchange Notes in its
                  ordinary course of business and has no arrangement or
                  understanding with any Person to participate in the
                  distribution of the Exchange Notes received in the Exchange
                  Offer; and

                           (iii) shall issue, upon the request of any Holder of
                  Notes covered by the Exchange Offer, Exchange Notes, having an
                  aggregate principal amount equal to the aggregate principal
                  amount of Notes surrendered to the Company by such Holder in
                  exchange therefor or being sold by such Holder; such Exchange
                  Notes to be registered in the name of such Holder or in the
                  name of the purchaser(s) of such Exchange Notes, as the case
                  may be; in return, the Notes held by such Holder shall be
                  surrendered to the Company for cancellation.

                  (b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company and the Guarantors shall comply with all the
provisions of Section 6(c) below and shall use their reasonable best efforts to
effect such registration to permit the sale of the Transfer Restricted
Securities being sold in accordance with the intended method or methods of
distribution thereof, and pursuant thereto the Company and the Guarantors will
as expeditiously as possible prepare and file with the Commission a Registration
Statement relating to the registration on any appropriate form under the
Securities Act, which form shall be available for the sale of the Transfer
Restricted Securities in accordance with the intended method or methods of
distribution thereof.

                  (c) General Provisions. In connection with any Registration
Statement and any Prospectus required by this Agreement to permit the sale or
resale of Transfer Restricted Securities (including, without limitation, any
Registration Statement and the related Prospectus required to permit resales of
Notes and Exchange Notes by Broker-Dealers), the Company and the Guarantors
shall:

                           (i) use their reasonable best efforts to keep such
                  Registration Statement continuously effective and provide all
                  requisite financial statements

                                       9
<PAGE>   11

                  (including, if required by the Securities Act or any
                  regulation thereunder, financial statements of any Guarantors)
                  for the period specified in Sections 3 or 4 of this Agreement,
                  as applicable; upon the occurrence of any event that would
                  cause any such Registration Statement or the Prospectus
                  contained therein (A) to contain a material misstatement or
                  omission or (B) not to be effective and usable for resale of
                  Transfer Restricted Securities during the period required by
                  this Agreement, the Company and the Guarantors shall file
                  promptly an appropriate amendment to such Registration
                  Statement, in the case of clause (A), correcting any such
                  misstatement or omission, and, in the case of either clause
                  (A) or (B), use their reasonable best efforts to cause such
                  amendment to be declared effective and such Registration
                  Statement and the related Prospectus to become usable for
                  their intended purpose(s) as soon as practicable thereafter.
                  Notwithstanding the foregoing, the Company and the Guarantors
                  may allow the Shelf Registration Statement to cease to become
                  effective and usable if (x) the board of directors of the
                  Company determines in good faith that it is in the best
                  interests of the Company not to disclose the existence of or
                  facts surrounding any proposed or pending material corporate
                  transaction involving the Company or the Guarantors, and the
                  Company notifies the Holders within two business days after
                  such boards of directors make such determination or (y) the
                  Prospectus contained in the Shelf Registration Statement
                  contains an untrue statement of a material fact or omits to
                  state a material fact necessary in order to make the
                  statements made therein, in the light of the circumstances
                  under which they were made, not misleading; provided that the
                  two-year period referred to in Section 4(a) hereof during
                  which the Shelf Registration Statement is required to be
                  effective and usable shall be extended by the number of days
                  during which such Registration Statement was not effective or
                  usable pursuant to the foregoing provisions; and provided
                  further that Additional Interest shall accrue on the Notes as
                  provided in Section 5 hereof;

                           (ii) prepare and file with the Commission such
                  amendments and post-effective amendments to the Registration
                  Statement as may be necessary to keep the Registration
                  Statement effective for the applicable period set forth in
                  Sections 3 or 4 hereof, as applicable; cause the Prospectus to
                  be supplemented by any required Prospectus supplement, and as
                  so supplemented to be filed pursuant to Rule 424 under the
                  Securities Act, and to comply fully with the applicable
                  provisions of Rules 424 and 430A under the Securities Act in a
                  timely manner; and comply with the provisions of the
                  Securities Act with respect to the disposition of all
                  securities covered by such Registration Statement during the
                  applicable period in accordance with the intended method or
                  methods of distribution by the sellers thereof set forth in
                  such Registration Statement or supplement to the Prospectus;

                           (iii) cooperate with the selling Holders of Transfer
                  Restricted Securities and the underwriter(s), if any, to
                  facilitate the timely preparation and delivery of certificates
                  representing Transfer Restricted Securities to be sold and not
                  bearing any restrictive legends; and enable such Transfer
                  Restricted Securities

                                       10
<PAGE>   12

                  to be in such denominations and registered in such names as
                  the Holders or the underwriter(s), if any, may request at
                  least two business days prior to any sale of Transfer
                  Restricted Securities made by such underwriter(s);

                           (iv) use their reasonable best efforts to cause the
                  Transfer Restricted Securities covered by the Registration
                  Statement to be registered with or approved by such other
                  governmental agencies or authorities as may be necessary to
                  enable the seller or sellers thereof or the underwriter(s), if
                  any, to consummate the disposition of such Transfer Restricted
                  Securities, subject to the proviso contained in clause (c)(ix)
                  below;

                           (v) if any fact or event contemplated by clause
                  (d)(i)(D) below shall exist or have occurred, prepare a
                  supplement or post-effective amendment to the Registration
                  Statement or related Prospectus or any document incorporated
                  therein by reference or file any other required document so
                  that, as thereafter delivered to the purchasers of Transfer
                  Restricted Securities, the Prospectus will not contain an
                  untrue statement of a material fact or omit to state any
                  material fact necessary to make the statements made therein,
                  in the light of the circumstances under which they were made,
                  not misleading;

                           (vi) provide a CUSIP, CINS or ISIN number, as
                  applicable, for all Transfer Restricted Securities not later
                  than the effective date of the Registration Statement and
                  provide the Trustee under the Indenture with printed
                  certificates for the Transfer Restricted Securities which are
                  in a form eligible for deposit with the depositary;

                           (vii) cooperate and assist in any filings required to
                  be made with the NASD and in the performance of any due
                  diligence investigation by any underwriter (including any
                  "qualified independent underwriter") that is required to be
                  retained in accordance with the rules and regulations of the
                  NASD;

                           (viii) otherwise use their best efforts to comply
                  with all applicable rules and regulations of the Commission,
                  and make generally available to its security holders, as soon
                  as practicable, a consolidated earnings statement meeting the
                  requirements of Rule 158 (which need not be audited) for the
                  twelve-month period (A) commencing at the end of any fiscal
                  quarter in which Transfer Restricted Securities are sold to
                  underwriters in a firm or best efforts Underwritten Offering
                  or (B) if not sold to underwriters in such an offering,
                  beginning with the first month of the Company's first fiscal
                  quarter commencing after the effective date of the
                  Registration Statement;

                           (ix) cause the Indenture to be qualified under the
                  TIA not later than the effective date of the first
                  Registration Statement required by this Agreement, and, in
                  connection therewith, cooperate with the Trustee and the
                  Holders of Notes and Exchange Notes to effect such changes to
                  the Indenture as may be required for such Indenture to be so
                  qualified in accordance with the terms

                                       11
<PAGE>   13

                  of the TIA; and execute, and use their best efforts to cause
                  the Trustee to execute, all documents that may be required to
                  effect such changes and all other forms and documents required
                  to be filed with the Commission to enable such Indenture to be
                  so qualified in a timely manner; and

                           (x) provide promptly to any Holder upon such Holder's
                  written request each document filed with the Commission
                  pursuant to the requirements of Section 13 and Section 15 of
                  the Exchange Act.

                 (d) Additional Provisions Applicable to Shelf Registration
Statements. In connection with each Shelf Registration Statement the Company and
the Guarantors shall:

                           (i) advise the underwriter(s), if any, and selling
                  Holders of Transfer Restricted Securities promptly and, if
                  requested by such Persons, to confirm such advice in writing,
                  (A) when the Prospectus or any Prospectus supplement or
                  post-effective amendment has been filed, and, with respect to
                  the Shelf Registration Statement or any post-effective
                  amendment thereto, when the same has become effective, (B) of
                  any request by the Commission for amendments to the Shelf
                  Registration Statement or amendments or supplements to the
                  Prospectus or for additional information relating thereto, (C)
                  of the issuance by the Commission of any stop order suspending
                  the effectiveness of the Registration Statement under the
                  Securities Act, of the suspension by any state securities
                  commission of the qualification of the Transfer Restricted
                  Securities for offering or sale in any jurisdiction or of the
                  initiation of any proceeding for any of the preceding purposes
                  and (D) of the existence of any fact or the happening of any
                  event that requires the making of any additions to or changes
                  in the Shelf Registration Statement or the Prospectus in order
                  that the Shelf Registration Statement and the Prospectus do
                  not contain an untrue statement of a material fact or omit to
                  state a material fact necessary to make the statements made
                  therein, in the light of the circumstances under which they
                  were made, not misleading. If at any time the Commission shall
                  issue any stop order suspending the effectiveness of the Shelf
                  Registration Statement, or any U.S. state securities
                  commission or other regulatory authority shall issue an order
                  suspending the qualification or exemption from qualification
                  of the Transfer Restricted Securities under U.S. state
                  securities or blue sky laws, the Company and the Guarantors
                  shall use their reasonable best efforts to obtain the
                  withdrawal or lifting of such order at the earliest possible
                  time;

                           (ii) if requested in writing, furnish to each of the
                  selling Holders of Transfer Restricted Securities and each of
                  the underwriter(s), if any, before filing with the Commission,
                  copies of any Shelf Registration Statement or any Prospectus
                  included therein or any amendments or supplements to any such
                  Shelf Registration Statement or Prospectus (including all
                  documents incorporated by reference after the initial filing
                  of such Shelf Registration Statement), which documents will be
                  subject to the review of such Holders and underwriter(s), if

                                       12
<PAGE>   14

                  any, for a period of at least five business days, and the
                  Company and the Guarantors will not file any such Shelf
                  Registration Statement or Prospectus or any amendment or
                  supplement to any such Shelf Registration Statement or
                  Prospectus (including all such documents incorporated by
                  reference) if a selling Holder of Transfer Restricted
                  Securities covered by such Shelf Registration Statement or the
                  underwriter(s), if any, shall not have had an opportunity to
                  participate in the preparation thereof; such Holders and
                  underwriter(s) shall be deemed to have reasonably objected to
                  such filing if such Shelf Registration Statement, amendment,
                  Prospectus or supplement, as applicable, as proposed to be
                  filed, contains an untrue statement of a material fact or
                  omits to state any material fact necessary to make the
                  statements therein, in the light of the circumstances under
                  which they were made, not misleading, or fails to comply with
                  the applicable requirements of the Securities Act;

                           (iii) promptly prior to the filing of any document
                  that is to be incorporated by reference into a Shelf
                  Registration Statement or Prospectus, provide copies of such
                  document to the selling Holders and to the underwriter(s), if
                  any, make the Company's and the Guarantors' representatives
                  available for discussion of such document and other customary
                  due diligence matters, and include such information in such
                  document prior to the filing thereof as such selling Holders
                  or underwriter(s), if any, reasonably may request;

                           (iv) make available for inspection at reasonable
                  times at each of the Company's principal place of business by
                  the Holders of Transfer Restricted Securities, any underwriter
                  participating in any disposition pursuant to such Shelf
                  Registration Statement, and any attorney or accountant
                  retained by such selling Holders or any of the underwriter(s)
                  who shall certify to the Company and the Guarantors that they
                  have a current intention to sell Transfer Restricted
                  Securities pursuant to a Shelf Registration Statement, and,
                  such relevant financial and other records, pertinent corporate
                  documents and properties of the Company and the Guarantors as
                  reasonably requested and cause the Company's and the
                  Guarantors' officers, directors and employees to respond to
                  such inquiries as shall be reasonably necessary, in the
                  reasonable judgment of counsel to such Holders, to conduct a
                  reasonable investigation; provided, however, that the
                  foregoing inspection and information gathering shall be
                  coordinated on behalf of the selling Holders by one counsel
                  designated by and on behalf of such Holders and, provided,
                  further, that each such party shall be required to maintain in
                  confidence and not disclose to any other Person any
                  information or records reasonably designated by the Company in
                  writing as being confidential, until such time as (A) such
                  information becomes a matter of public record (whether by
                  virtue of its inclusion in such Shelf Registration Statement
                  or otherwise), (B) such Person shall be required so to
                  disclose such information pursuant to a subpoena or order of
                  any court or other governmental agency or body having
                  jurisdiction over the matter (subject to the requirements of
                  such order, and only after such Person shall have given the
                  Company prompt prior written notice of such requirement) or
                  (C)

                                       13
<PAGE>   15

                  such information is required to be set forth in such Shelf
                  Registration Statement or the Prospectus included therein or
                  in an amendment to such Shelf Registration Statement or an
                  amendment or supplement to such Prospectus in order that such
                  Shelf Registration Statement, Prospectus, amendment or
                  supplement, as the case may be, does not contain an untrue
                  statement of a material fact or omit to state therein a
                  material fact required to be stated therein or necessary to
                  make the statements made therein not misleading;

                           (v) if requested by any selling Holders of Transfer
                  Restricted Securities or the underwriter(s), if any, promptly
                  incorporate in any Shelf Registration Statement or Prospectus
                  pursuant to a supplement or post-effective amendment if
                  necessary, such information as such selling Holders and
                  underwriter(s), if any, may reasonably request to have
                  included therein, including, without limitation, information
                  relating to the "Plan of Distribution" of the Transfer
                  Restricted Securities information with respect to the
                  principal amount of Transfer Restricted Securities being sold
                  to such underwriter(s), the purchase price being paid therefor
                  and any other terms of the offering of the Transfer Restricted
                  Securities to be sold in such offering; and make all required
                  filings of such Prospectus supplement or post-effective
                  amendment as soon as practicable after the Company are
                  notified of the matters to be incorporated in such Prospectus
                  supplement or post-effective amendment; provided, however,
                  that the Company shall not be required to take any action
                  pursuant to this Section 6(d)(v) that would, in the opinion of
                  counsel for the Company reasonably satisfactory to the Initial
                  Purchasers, violate applicable law;

                           (vi) deliver to each selling Holder of Transfer
                  Restricted Securities and each of the underwriter(s), if any,
                  without charge, as many copies of the Prospectus (including
                  each preliminary Prospectus) and any amendment or supplement
                  thereto as such Persons reasonably may request; the Company
                  and the Guarantors hereby consent to the use of the Prospectus
                  and any amendment or supplement thereto by each of the selling
                  Holders and each of the underwriter(s), if any, in connection
                  with the offering and the sale of the Transfer Restricted
                  Securities covered by the Prospectus or any amendment or
                  supplement thereto;

                           (vii) furnish to each Holder whose Transfer
                  Restricted Securities have been included in a Shelf
                  Registration Statement in connection with such exchange or
                  sale, without charge, at least one copy of the Registration
                  Statement, as first filed with the Commission, and of each
                  amendment thereto, including all documents incorporated by
                  reference therein and all exhibits (including exhibits
                  incorporated therein by reference);

                           (viii) enter into an underwriting agreement on not
                  more than one occasion in the case of an offering pursuant to
                  a Shelf Registration, and make such representations and
                  warranties, and take all such other actions in connection
                  therewith in order to expedite or facilitate the disposition
                  of the Transfer Restricted Securities pursuant to any
                  Registration Statement contemplated by this

                                       14
<PAGE>   16

                  Agreement, all to such extent as may be reasonably requested
                  by any Holder or Holders of Transfer Restricted Securities who
                  hold at least 25% in aggregate principal amount of such class
                  of Transfer Restricted Securities; provided that the Company
                  and the Guarantors shall not be required to enter into any
                  such agreement more than once with respect to all of the
                  Transfer Restricted Securities and may delay entering into
                  such agreement if the board of directors of each of the
                  Company determines in good faith that it is in the best
                  interests of the Company and the Guarantors not to disclose
                  the existence of or facts surrounding any proposed or pending
                  material corporate transaction involving the Company and the
                  Guarantors; and whether or not an underwriting agreement is
                  entered into and whether or not the registration is an
                  Underwritten Registration, the Company and the Guarantors
                  shall:

                           (A) furnish to the Initial Purchasers, the Holders of
                  Transfer Restricted Securities who hold at least 25% in
                  aggregate principal amount of such class of Transfer
                  Restricted Securities and each underwriter, if any, in such
                  substance and scope as they may reasonably request and as are
                  customarily made in connection with an offering of debt
                  securities pursuant to a Shelf Registration Statement (i) upon
                  the effective date of the Shelf Registration Statement (and if
                  such Shelf Registration Statement contemplates an Underwritten
                  Offering of Transfer Restricted Securities upon the date of
                  the closing under the underwriting agreement related thereto)
                  and (ii) upon the filing of any amendment or supplement to the
                  Shelf Registration Statement or any other document that is
                  incorporated in the Shelf Registration Statement by reference
                  and includes financial data with respect to a fiscal quarter
                  or year:

                                    (1) a certificate, dated the date of
                           effectiveness of the Shelf Registration Statement
                           signed by (y) the respective chief executive officer,
                           the respective President or any Vice President and
                           (z) the respective chief financial officer of each of
                           the Company and each of the Guarantors confirming, as
                           of the date thereof, the matters set forth in Section
                           7(e) of the Purchase Agreement and such other matters
                           as such parties may reasonably request;

                                    (2) an opinion, dated the date of
                           effectiveness of such Shelf Registration Statement,
                           of securities counsel for the Company covering
                           matters similar to those set forth in Sections 7(d),
                           7(e) and 7(f) of the Purchase Agreement and such
                           other matters as such parties may reasonably request,
                           and in any event including a statement to the effect
                           that such counsel has participated in conferences
                           with officers and other representatives of the
                           Company, representatives of the independent public
                           accountants for the Company, the Initial Purchasers'
                           representatives and the Initial Purchasers' counsel
                           in connection with the preparation of such Shelf
                           Registration Statement and the related Prospectus
                           although such counsel has not independently verified
                           the accuracy, completeness or fairness of such
                           statements in such Shelf Registration Statement; and
                           that

                                       15
<PAGE>   17

                           such counsel advises that, on the basis of the
                           foregoing, such counsel's work in connection with
                           this work did not disclose information that gave such
                           counsel reason to believe that the Shelf Registration
                           Statement, at the time such Shelf Registration
                           Statement or any post-effective amendment thereto
                           became effective contained an untrue statement of a
                           material fact or omitted to state a material fact
                           required to be stated therein or necessary to make
                           the statements therein not misleading, or that the
                           Prospectus contained in such Shelf Registration
                           Statement as of its date contained an untrue
                           statement of a material fact or omitted to state a
                           material fact necessary in order to make the
                           statements made therein, in the light of the
                           circumstances under which they were made, not
                           misleading. Such counsel may state further that such
                           counsel assumes no responsibility for, and has not
                           independently verified, the accuracy, completeness or
                           fairness of the financial statements, notes and
                           schedules and other financial data included or
                           incorporated by reference in the Shelf Registration
                           Statement contemplated by this Agreement or the
                           related Prospectus; and

                                    (3) a customary comfort letter, dated as of
                           the date of effectiveness of the Shelf Registration
                           Statement from the Company's independent accountants,
                           in the customary form and covering matters of the
                           type customarily covered in comfort letters by
                           underwriters in connection with primary underwritten
                           offerings, and affirming the matters set forth in the
                           comfort letters delivered pursuant to Sections 7(l)
                           and 7(m) of the Purchase Agreement;

                           (B) set forth in full or incorporated by reference in
                  the underwriting agreement, if any, the indemnification
                  provisions and procedures of Section 8 hereof with respect to
                  all parties to be indemnified pursuant to said Section; and

                           (C) deliver such other documents and certificates as
                  may be reasonably requested by such parties to evidence
                  compliance with clause (A) above and with any customary
                  conditions contained in the underwriting agreement or other
                  agreement entered into by the Company and the Guarantors
                  pursuant to this clause (viii), if any.

If at any time the representations and warranties of the Company or the
Guarantors contemplated in clause (A)(1) above cease to be true and correct, the
Company or the Guarantors shall so advise the Initial Purchasers and the
underwriters, if any, and each selling Holder promptly and, if requested by such
Persons, shall confirm such advice in writing; and

                           (ix) prior to any public offering of Transfer
                  Restricted Securities cooperate with the selling Holders of
                  Transfer Restricted Securities the underwriter(s), if any, and
                  their respective counsel in connection with the registration
                  and qualification of the Transfer Restricted Securities under
                  the

                                       16
<PAGE>   18

                  securities or blue sky laws of such jurisdictions as the
                  selling Holders of Transfer Restricted Securities or
                  underwriter(s) may reasonably request and do any and all other
                  acts or things necessary or advisable to enable the
                  disposition in such jurisdictions of the Transfer Restricted
                  Securities covered by the Shelf Registration Statement filed
                  pursuant to Section 4 hereof; provided, however, that the
                  Company and the Guarantors shall not be obligated to qualify
                  as a foreign corporation in any jurisdiction in which it is
                  not now so qualified or to take any action that would subject
                  it to general consent to service of process, other than as to
                  matters and transactions relating to the Shelf Registration
                  Statement, in any jurisdiction where it is not now so subject.

                  (e) Each Holder agrees by acquisition of a Transfer Restricted
Security that, upon receipt of any notice from the Company of the existence of
any fact of the kind described in Section 6(d)(i) hereof, such Holder will
forthwith discontinue disposition of Transfer Restricted Securities pursuant to
the Shelf Registration Statement until such Holder's receipt of the copies of
the supplemented or amended Prospectus contemplated by Section 6(d)(vi) hereof,
or until it is advised in writing (the "Advice") by the Company that the use of
the Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus. If so
directed by the Company, each Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of such notice. In the event
the Company shall give any such notice, the time period regarding the
effectiveness of such Shelf Registration Statement set forth in Section 4
hereof, as applicable, shall be extended by the number of days during the period
from and including the date of the giving of such notice pursuant to Section
6(d)(i) hereof to and including the date when each selling Holder covered by
such Shelf Registration Statement shall have received the copies of the
supplemented or amended Prospectus contemplated by Section 6(d)(vi) hereof or
shall have received the Advice.

                  (f) The Company and the Guarantors may require each Holder of
Transfer Restricted Securities as to which any registration is being effected to
furnish to the Company such information regarding such Holder and such Holder's
intended method of distribution of the applicable Transfer Restricted Securities
as the Company may from time to time reasonably request in writing, but only to
the extent that such information is required in order to comply with the
Securities Act. Each such Holder agrees to notify the Company as promptly as
practicable of (i) any inaccuracy or change in information previously furnished
by such Holder to the Company or (ii) the occurrence of any event, in either
case, as a result of which any Prospectus relating to such registration contains
or would contain an untrue statement of a material fact regarding such Holder or
such Holder's intended method of distribution of the applicable Transfer
Restricted Securities or omits to state any material fact regarding such Holder
or such Holder's intended method of distribution of the applicable Transfer
Restricted Securities required to be stated therein or necessary to make the
statements made therein, in the

                                       17
<PAGE>   19

light of the circumstances under which they were made, not misleading and
promptly to furnish to the Company any additional information required to
correct and update any previously furnished information or required so that such
Prospectus shall not contain, with respect to such Holder or the distribution of
the applicable Transfer Restricted Securities 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 not misleading.

     SECTION 7.        REGISTRATION EXPENSES

                  (a) All expenses incident to the Company's and the Guarantors'
performance of or compliance with this Agreement will be borne by the Company
regardless of whether a Registration Statement becomes effective, including
without limitation and as applicable: (i) all Commission, securities exchange or
NASD registration and filing fees and expenses (including filings made by any
Initial Purchasers or Holder with the NASD (and, if applicable, the fees and
expenses of any "qualified independent underwriter" and its counsel that may be
required by the rules and regulations of the NASD)); (ii) all fees and expenses
of compliance with U.S. federal securities and state blue sky or securities laws
and compliance with the rules of the NASD (including reasonable fees and
disbursements of one counsel for Holders in connection with blue sky and/or NASD
qualification of the Exchange Notes); (iii) all expenses of printing (including
printing certificates for the Exchange Notes to be issued in the Exchange Offer
and printing of Prospectuses), messenger and delivery services; (iv) all fees
and disbursements of counsel for the Company and the Guarantors; (v) all fees
and disbursements of independent certified public accountants of the Company
(including the expenses of any special audit and comfort letters required by or
incident to such performance) and (vi) the reasonable fees and disbursements of
one firm of counsel designated by the Holders of a majority in principal amount
of Transfer Restricted Securities covered by the Shelf Registration Statement to
act as counsel for the Holders of those Transfer Restricted Securities in
connection therewith.

                  The Company will, in any event, bear their and the Guarantors'
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), the expenses
of any annual audit and the fees and expenses of any Person, including special
experts, retained by the Company or the Guarantors.

                  (b) Each Holder of Transfer Restricted Securities will pay all
underwriting discounts, if any, and commissions and transfer taxes, if any,
relating to the disposition of such Holder's Transfer Restricted Securities.

     SECTION 8.        INDEMNIFICATION

                  (a) The Company and each Guarantor shall, jointly and
severally, indemnify and hold harmless each Holder of Transfer Restricted
Securities, its officers and employees and each Person, if any, who controls any
such Holders, within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint

                                       18
<PAGE>   20

or several, or any action in respect thereof (including, but not limited to, any
loss, claim, damage, liability or action relating to purchases, sales and
registration of the Notes, the Guarantees and the Exchange Notes), to which that
Holder, officer, employee or controlling Person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon (i) any untrue statement or alleged
untrue statement of a material fact contained (A) in any Registration Statement
or preliminary Prospectus or Prospectus or in any amendment or supplement
thereto, (B) in any blue sky application or other document prepared or executed
by any Company or any Guarantor (or based upon any written information furnished
by any Company or any Guarantor) specifically for the purpose of qualifying any
or all of the Notes under the securities laws of any state or other jurisdiction
(any such application, document or information being hereinafter called a "Blue
Sky Application") or (C) in any materials or information provided to investors
by, or with the approval of, the Company in connection with the marketing of the
offering of the Exchange Notes ("Marketing Materials"), including any roadshow
or investor presentations made to investors by the Company (whether in person or
electronically); (ii) the omission or alleged omission to state in any
Registration Statement, preliminary Prospectus or Prospectus, or in any
amendment or supplement thereto, or in any Blue Sky Application or Marketing
Materials any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, or (iii) any act or failure to act or any alleged act or failure to act by
any Holder of Transfer Restricted Securities in connection with, or relating in
any manner to, the Notes, the Guarantees or the Exchange Notes or the offering
contemplated by any Registration Statement, and which is included as part of or
referred to in any loss, claim, damage, liability or action arising out of or
based upon matters covered by clause (i) or (ii) above (provided that the
Company and the Guarantors shall not be liable under this clause (iii) to the
extent that it is determined in a final judgment by a court of competent
jurisdiction that such loss, claim, damage, liability or action resulted
directly from any such acts or failures to act undertaken or omitted to be taken
by such Holder through its gross negligence or willful misconduct); and shall
reimburse each Holder and each such officer, employee or controlling Person
promptly upon demand for any legal or other expenses reasonably incurred by that
Holder, officer, employee or controlling Person in connection with investigating
or defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that the
Company and the Guarantors shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of, or is
based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in any Registration Statement, preliminary Prospectus or
Prospectus, or in any such amendment or supplement, or in any Blue Sky
Application or Marketing Materials, in reliance upon and in conformity with
written information concerning such Holder furnished to the Company by or on
behalf of any Holder specifically for inclusion therein; provided, further, that
with respect to any such untrue statement or omission made in any preliminary
Prospectus, the indemnity agreement contained in this Section 8(a) shall not
inure to the benefit of the Holder from whom the Person asserting any such
losses, claims, damages or liabilities purchased the Notes, Guarantees or
Exchange Notes

                                       19
<PAGE>   21

concerned if, to the extent that such sale was a sale by the Holder and any such
loss, claim, damage or liability of such Holder is a result of the fact that
both (A) a copy of the Prospectus (or the Prospectus as then amended or
supplemented) was not sent or given to such Person at or prior to written
confirmation of the sale of such Notes or Exchange Notes to such Person and (B)
the untrue statement or omission in the preliminary Prospectus was corrected in
the Prospectus (or the Prospectus as then amended or supplemented) unless such
failure to deliver the Prospectus was a result of noncompliance by the Company
with Section 6(d)(vi) hereof. The foregoing indemnity agreement is in addition
to any liability which the Company and the Guarantors may otherwise have to any
Holder or to any officer, employee or controlling Person of that Holder.

                  (b) Each Holder, severally and not jointly, shall indemnify
and hold harmless each of the Company, each of the Guarantors, their respective
directors, officers and employees, and each Person, if any, who controls either
of the Company or any of the Guarantors within the meaning of the Securities
Act, from and against any loss, claim, damage or liability, joint or several, or
any action in respect thereof, to which the Company, the Guarantors or any such
director, officer or controlling Person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon (i) any untrue statement or alleged untrue
statement of a material fact contained (A) in any Registration Statement,
preliminary Prospectus or Prospectus, or in any amendment or supplement thereto
or (B) in any Blue Sky Application or (ii) the omission or alleged omission to
state in any Registration Statement, preliminary Prospectus or Prospectus, or in
any amendment or supplement thereto, or in any Blue Sky Application any material
fact required to be stated therein or necessary to make the statements therein
not misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information concerning such Holders
furnished to the Company by or on behalf of that Holder specifically for
inclusion therein, which information consists of the information specified in
Section 8(e) of the Purchase Agreement, and shall reimburse each of the Company,
each of the Guarantors and each such director, officer, employee and controlling
Person for any legal or other expenses reasonably incurred by such Company, such
Guarantor or each such director, officer, employee or controlling Person in
connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses are incurred. The
foregoing indemnity agreement is in addition to any liability which any Holder
may otherwise have to either of the Company, any of the Guarantors or any such
director, officer, employee or controlling Person.

                  (c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not

                                       20
<PAGE>   22

relieve it from any liability which it may have under this Section 8 except to
the extent it has been materially prejudiced by such failure and; provided,
further, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have to an indemnified party otherwise than
under this Section 8. If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Section 8 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, any indemnified party shall have the
right to employ separate counsel in any such action and to participate in the
defense thereof but the fees and expenses of such counsel shall be at the
expense of the indemnified party unless (i) the employment of such counsel has
been specifically authorized by the indemnifying party in writing, or (ii) such
indemnified party shall have been advised by such counsel that there may be one
or more legal defenses available to it which are different from or additional to
those available to the indemnifying party and in the reasonable judgment of such
counsel it is advisable for such indemnified party to employ separate counsel or
(iii) the indemnifying party has failed to assume the defense of such action and
employ counsel reasonably satisfactory to the indemnified party, in which case,
if such indemnified party notifies the indemnifying party in writing that it
elects to employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to one local counsel) at any time for all such indemnified parties,
which firm shall be designated in writing by (x) Lehman Brothers Inc. if the
indemnified parties under this Section 8 consist of the Initial Purchasers or
any of their respective officers, employees or controlling Persons or (y) by the
Company, if the indemnified parties under this Section 8 consist of any of the
Company, any of the Guarantors or any of their respective directors, officers,
employees or controlling Persons. No indemnifying party shall (i) without the
prior written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the consent of
the indemnifying party or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees

                                       21
<PAGE>   23

to indemnify and hold harmless any indemnified party from and against any loss
or liability by reason of such settlement or judgment.

                  (d) If the indemnification provided for in this Section 8
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company and the Guarantors, on the one hand, and the Holders on
the other, from the sale of the Transfer Restricted Securities 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 Company and
the Guarantors, on the one hand and the Holders on the other with respect to the
statements or omissions which resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to whether
the untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the Company
or any of the Guarantors, on the one hand, or the Holders, on the other hand,
the intent of the parties and their relative knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company,
the Guarantors and the Holders agree that it would not be just and equitable if
contributions pursuant to this Section 8(d) were to be determined by pro rata
allocation (even if the Holders were treated as one entity for such purpose) or
by any other method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section shall be deemed to include, for
purposes of this Section 8(d), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8(d), no Holder
shall be required to contribute any amount in excess of the amount by which the
net proceeds received by it in connection with its sale of Notes exceeds the
amount of any damages which such Holder has otherwise paid or become liable to
pay by reason of the 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 Holders'
obligations to contribute as provided in this Section 8(d) are several and not
joint.

     SECTION 9.        RULE 144A

                  The Company and each Guarantor hereby agrees with each Holder
of Transfer Restricted Securities, during any period in which the Company or
such Guarantor is not subject to Section 13 or 15(d) of the Exchange Act within
the two-year period following the Closing Date, to make available to any Holder
or beneficial owner

                                       22
<PAGE>   24

of Transfer Restricted Securities, in connection with any sale thereof and any
prospective purchaser of such Transfer Restricted Securities from such Holder or
beneficial owner, the information required by Rule 144A(d)(4) under the
Securities Act in order to permit resales of such Transfer Restricted Securities
pursuant to Rule 144A.

     SECTION 10.       PARTICIPATION IN UNDERWRITTEN REGISTRATIONS

                  No Holder may participate in any Underwritten Registration
hereunder unless such Holder (a) agrees to sell such Holder's Transfer
Restricted Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (b)
completes and executes all reasonable questionnaires, powers of attorney,
indemnities, underwriting agreements, lock-up letters and other documents
required under the terms of such underwriting arrangements.

     SECTION 11.       SELECTION OF UNDERWRITERS

                  Subject to Section 6(d)(i), the Holders of Transfer Restricted
Securities covered by the Shelf Registration Statement who desire to do so may
sell such Transfer Restricted Securities in an Underwritten Offering at such
Holders' expense. In any such Underwritten Offering, the investment banker or
investment bankers and manager or managers that will administer the offering
will be selected by the Holders of a majority in aggregate principal amount of
the Transfer Restricted Securities included in such offering; provided that such
investment bankers and managers must be reasonably satisfactory to the Company.

     SECTION 12.       MISCELLANEOUS

                  (a) Remedies. The Company and the Guarantors agree that
monetary damages (including Additional Interest) would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Agreement and hereby agree to waive the defense in any action for
specific performance that a remedy at law would be adequate.

                  (b) No Inconsistent Agreements. Neither the Company nor any
Guarantor will, on or after the date of this Agreement, enter into any agreement
with respect to its securities that is inconsistent with the rights granted to
the Holders in this Agreement or otherwise conflicts with the provisions hereof.
Except as disclosed in the Offering Memorandum (as such term is defined in the
Purchase Agreement), neither the Company nor any Guarantor has previously
entered into any agreement granting any registration rights with respect to its
securities to any Person. The rights granted to the Holders hereunder do not in
any way conflict with and are not inconsistent with the rights granted to the
holders of the Company's or any Guarantor's securities under any agreement in
effect on the date hereof.

                  (c) Adjustments Affecting the Notes. The Company and the
Guarantors will not take any action, or permit any change to occur, with respect
to the

                                       23
<PAGE>   25

Notes that would materially and adversely affect the ability of the Holders to
Consummate any Exchange Offer.

                  (d) Amendments and Waivers. The provisions of this Agreement
may not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given unless the Company have
obtained the written consent of Holders of a majority of the outstanding
principal amount of the Transfer Restricted Securities affected by such
amendment, modification, supplement, waiver or consent. Notwithstanding the
foregoing, a waiver or consent to departure from the provisions hereof that
relates exclusively to the rights of Holders whose securities are being tendered
pursuant to the Exchange Offer and that does not affect directly or indirectly
the rights of other Holders whose securities are not being tendered pursuant to
such Exchange Offer may be given by the Holders of a majority of the outstanding
principal amount of Transfer Restricted Securities being tendered or registered.

                  (e) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, first-class
mail (registered or certified, return receipt requested), telex, facsimile or
air courier guaranteeing overnight delivery:

                           (i) if to a Holder, at the address set forth on the
                  records of the Registrar under the Indenture, with a copy to
                  the Registrar under the Indenture; and

                           (ii) if to the Company or the Guarantors to:

                                Grant Prideco, Inc.
                                1450 Lake Robbins Drive, Suite 600
                                The Woodlands, Texas 77380
                                Attention: Philip A. Choyce
                                Fax:    (281) 582-2895

                                with a copy to:

                                Fulbright & Jaworski L.L.P.
                                1301 McKinney, Suite 5100
                                Houston, Texas 77010
                                Attention:
                                Fax:

                  Any such notices and communications shall take effect at the
time of receipt thereof. The Company shall be entitled to act and rely upon any
notice or communication given or made by the Initial Purchasers.

                                       24
<PAGE>   26

                  Copies of all such notices, demands or other communications
shall be concurrently delivered by the Person giving the same to the Trustee at
the address specified in the Indenture.

                  (f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders; provided, however, that this Agreement shall not
inure to the benefit of or be binding upon a successor or assign of a Holder
unless and to the extent such successor or assign acquired Transfer Restricted
Securities from such Holder.

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

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

                  (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED, IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.

                  (j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.

                  (k) Entire Agreement. This Agreement together with the other
Operative Documents (as defined in the Purchase Agreement) is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted by the Company and the
Guarantors with respect to the Transfer Restricted Securities. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.

                             Signature pages follow.

                                       25
<PAGE>   27

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

                                       Very truly yours,

                                       THE COMPANY:

                                       GRANT PRIDECO, INC.

                                       By: /s/ John C. Coble
                                          --------------------------------------
                                          John C. Coble
                                          President and CEO

                                       THE GUARANTORS:

                                       GP EXPATRIATE SERVICES, INC.

                                       By: /s/ John C. Coble
                                          --------------------------------------
                                          John C. Coble
                                          President and CEO

                                       GRANT PRIDECO HOLDING, LLC

                                       By: /s/ John C. Coble
                                          --------------------------------------
                                          John C. Coble
                                          President and CEO

                                       GRANT PRIDECO, LP

                                       By:   Grant Prideco Holding, LLC, its
                                             general partner

                                       By: /s/ John C. Coble
                                          --------------------------------------
                                          John C. Coble
                                          President and CEO

                                       26
<PAGE>   28

                                       GRANT PRIDECO USA, LLC

                                       By: /s/ Authorized Signatory
                                          --------------------------------------
                                          Name:
                                          Title:

                                       STAR OPERATING COMPANY

                                       By: /s/ John C. Coble
                                          --------------------------------------
                                          John C. Coble
                                          President and CEO

                                       TA INDUSTRIES, INC.

                                       By: /s/ John C. Coble
                                          --------------------------------------
                                          John C. Coble
                                          President and CEO

                                       TEXAS ARAI, INC.

                                       By: /s/ John C. Coble
                                          --------------------------------------
                                          John C. Coble
                                          President and CEO

                                       TUBE-ALLOY CAPITAL CORPORATION

                                       By: /s/ John C. Coble
                                          --------------------------------------
                                          John C. Coble
                                          President and CEO

                                       27
<PAGE>   29

                                       TUBE-ALLOY CORPORATION

                                       By: /s/ John C. Coble
                                          --------------------------------------
                                          John C. Coble
                                          President and CEO

                                       XL SYSTEMS INTERNATIONAL, INC.

                                       By: /s/ John C. Coble
                                          --------------------------------------
                                          John C. Coble
                                          President and CEO

                                       XL SYSTEMS, L.P.

                                       By:    Grant Prideco Holding, LLC, its
                                              general partner

                                       By: /s/ John C. Coble
                                          --------------------------------------
                                          John C. Coble
                                          President and CEO

                                       28
<PAGE>   30

Accepted on behalf of the Initial Purchasers:

LEHMAN BROTHERS INC.

By: /s/ Authorized Signatory
   -----------------------------------
   Name:
   Title:

                                       29

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