Document:

<PAGE>

                                                                   Exhibit 10.75

                         HANOVER EQUIPMENT TRUST 2001B,

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

                     THE HANOVER GUARANTORS PARTIES HERETO,

                                       AND

                              WILMINGTON TRUST FSB,
                         AS TRUSTEE AND COLLATERAL AGENT

                       8.75% Senior Secured Notes due 2011

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

                                    INDENTURE

                           Dated as of August 30, 2001

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

<TABLE>
<CAPTION>
                                Table of Contents

                                                                                            Page
                                                                                            ----
<S>             <C>                                                                         <C>
                     ARTICLE I Definitions and Incorporation by Reference

        SECTION 1.1.   Definitions...........................................................1
        SECTION 1.2.   Other Definitions.....................................................1
        SECTION 1.3.   Incorporation by Reference of Trust Indenture Act.....................2
        SECTION 1.4.   Rules of Construction.................................................3

                                   ARTICLE II The Securities

        SECTION 2.1.   Form, Dating and Terms................................................3
        SECTION 2.2.   Execution and Authentication..........................................9
        SECTION 2.3.   Registrar and Paying Agent...........................................10
        SECTION 2.4.   Paying Agent To Hold Money in Trust..................................11
        SECTION 2.5.   Securityholder Lists.................................................11
        SECTION 2.6.   Transfer and Exchange................................................11
        SECTION 2.7.   Form of Certificate to be Delivered in Connection with
                          Transfers to Institutional Accredited Investors...................14
        SECTION 2.8.   Form of Certificate to be Delivered in Connection with
                          Transfers Pursuant to Regulation S................................17
        SECTION 2.9.   Mutilated, Destroyed, Lost or Stolen Securities......................18
        SECTION 2.10.  Outstanding Securities...............................................19
        SECTION 2.11.  Temporary Securities.................................................19
        SECTION 2.12.  Cancellation.........................................................19
        SECTION 2.13.  Payment of Interest; Defaulted Interest..............................20
        SECTION 2.14.  Computation of Interest..............................................21
        SECTION 2.15.  CUSIP Numbers........................................................21
        SECTION 2.16.  Taxes................................................................21

                              ARTICLE III Covenants of the Issuer

        SECTION 3.1.   Payment of Securities................................................22
        SECTION 3.2.   SEC Reports and Available Information................................22
        SECTION 3.3.   Asset Disposition Offer..............................................23
        SECTION 3.4.   Change of Control....................................................24
        SECTION 3.5.   Protection of Collateral.............................................25
        SECTION 3.6.   Negative Covenants Regarding Collateral..............................26
        SECTION 3.7.   Non-Consolidation of the Issuer......................................26
        SECTION 3.8.   No Bankruptcy Petition...............................................26
        SECTION 3.9.   Limitation on Liens; Fixtures........................................27
        SECTION 3.10.  Other Indebtedness...................................................27
        SECTION 3.11.  Guarantees, Loans, Advances and Other Obligations....................27
        SECTION 3.12.  Consolidation, Merger and Sale of Assets.............................27
        SECTION 3.13.  Capital Expenditures.................................................27
        SECTION 3.14.  Payments of Collateral...............................................28
        SECTION 3.15.  No Subsidiaries......................................................28

                                              i
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
                                                                                            Page
                                                                                            ----

<S>             <C>                                                                        <C>
        SECTION 3.16.   Investments.........................................................28
        SECTION 3.17.   Use of Proceeds.....................................................28
        SECTION 3.18.   Impairment of Security Interest.....................................28
        SECTION 3.19.   Compliance with Operative Agreements................................28
        SECTION 3.20.   Compliance with Laws................................................28
        SECTION 3.21.   Maintenance of Office or Agency.....................................29
        SECTION 3.22.   Limitations on Lines of Business; Existence.........................29
        SECTION 3.23.   Payment of Taxes and Other Claims...................................29
        SECTION 3.24.   Payments for Consent................................................30
        SECTION 3.25.   Compliance Certificate..............................................30
        SECTION 3.26.   Further Instruments and Acts........................................30
        SECTION 3.27.   Statement by Officers as to Default.................................30

                        ARTICLE IV Covenants of the Hanover Guarantors

                              ARTICLE V Redemption of Securities

        SECTION 5.1.   Optional Redemption..................................................30
        SECTION 5.2.   Applicability of Article.............................................31
        SECTION 5.3.   Election to Redeem; Notice to Trustee................................31
        SECTION 5.4.   Selection by Trustee of Securities to Be Redeemed....................31
        SECTION 5.5.   Notice of Redemption.................................................31
        SECTION 5.6.   Deposit of Redemption Price..........................................32
        SECTION 5.7.   Securities Payable on Redemption Date................................33
        SECTION 5.8.   Securities Redeemed in Part..........................................33

                               ARTICLE VI Defaults and Remedies

        SECTION 6.1.   Events of Default....................................................33
        SECTION 6.2.   Acceleration.........................................................36
        SECTION 6.3.   Other Remedies.......................................................36
        SECTION 6.4.   Waiver of Past Defaults..............................................37
        SECTION 6.5.   Control by Majority..................................................37
        SECTION 6.6.   Limitation on Suits..................................................37
        SECTION 6.7.   Rights of Holders to Receive Payment.................................38
        SECTION 6.8.   Collection Suit by Trustee...........................................38
        SECTION 6.9.   Trustee May File Proofs of Claim.....................................38
        SECTION 6.10.  Priorities...........................................................38
        SECTION 6.11.  Undertaking for Costs................................................39
        SECTION 6.12.  Additional Payments..................................................39
        SECTION 6.13.  Certain Remedial Matters.............................................39

                                      ARTICLE VII Trustee

        SECTION 7.1.   Duties of Trustee....................................................40
        SECTION 7.2.   Rights of Trustee....................................................41
        SECTION 7.3.   Individual Rights of Trustee.........................................42
        SECTION 7.4.   Trustee's Disclaimer.................................................42
        SECTION 7.5.   Notice of Defaults...................................................42
        SECTION 7.6.   Reports by Trustee to Holders........................................42

                                              ii
</TABLE>
<PAGE>

<TABLE>
<CAPTION>

                                                                                            Page
                                                                                            ----
<S>                                                                                         <C>
        SECTION 7.7.   Compensation and Indemnity...........................................43
        SECTION 7.8.   Replacement of Trustee...............................................43
        SECTION 7.9.   Successor Trustee by Merger..........................................44
        SECTION 7.10.  Eligibility; Disqualification........................................44
        SECTION 7.11.  Preferential Collection of Claims Against Issuer.....................45
        SECTION 7.12.  Trustee's Application for Instruction from the Issuer................45
        SECTION 7.13.  Proceeds of Collateral; Proceeds Remaining in Account................45

                 ARTICLE VIII Discharge of Indenture; Defeasance; The Account

        SECTION 8.1.   Discharge of Liability on Securities; Defeasance.....................46
        SECTION 8.2.   Conditions to Defeasance.............................................47
        SECTION 8.3.   Application of Trust Money...........................................49
        SECTION 8.4.   The Account..........................................................49
        SECTION 8.5.   Repayment to Issuer..................................................51
        SECTION 8.6.   Indemnity for U.S. Government Obligations............................52
        SECTION 8.7.   Reinstatement........................................................52
        SECTION 8.8.   Other Prepayment Matters.............................................52

                                     ARTICLE IX Amendments

        SECTION 9.1.   Without Consent of Holders...........................................52
        SECTION 9.2.   With Consent of Holders..............................................53
        SECTION 9.3.   Compliance with Trust Indenture Act..................................54
        SECTION 9.4.   Revocation and Effect of Consents and Waivers........................54
        SECTION 9.5.   Notation on or Exchange of Securities................................55
        SECTION 9.6.   Trustee To Sign Amendments...........................................55
        SECTION 9.7.   Acknowledgement of Certain Other Matters Requiring Consent...........55
        SECTION 9.8.   Nonrecourse..........................................................56
        SECTION 9.9.   Subordination........................................................56

                                    ARTICLE X Miscellaneous

        SECTION 10.1.   Trust Indenture Act Controls........................................57
        SECTION 10.2.   Notices.............................................................57
        SECTION 10.3.   Communication by Holders with other Holders.........................58
        SECTION 10.4.   Certificate and Opinion as to Conditions Precedent..................58
        SECTION 10.5.   Statements Required in Certificate or Opinion.......................58
        SECTION 10.6.   When Securities Disregarded.........................................59
        SECTION 10.7.   Rules by Trustee, Paying Agent and Registrar........................59
        SECTION 10.8.   Legal Holidays......................................................59
        SECTION 10.9.   GOVERNING LAW.......................................................59
        SECTION 10.10.  No Recourse Against Others..........................................59
        SECTION 10.11.  Successors..........................................................59
        SECTION 10.12.  Multiple Originals..................................................60
        SECTION 10.13.  Variable Provisions.................................................60
        SECTION 10.14.  Qualification of Indenture..........................................60
        SECTION 10.15.  Table of Contents; Headings.........................................60
        SECTION 10.16.  Non-Exclusion of the Issuer.........................................60
        SECTION 10.17.  Third Party Beneficiaries...........................................60

                                             iii
</TABLE>
<PAGE>

<TABLE>
<S>                                                                                      <C>
                              ARTICLE XI Collateral and Security

        SECTION 11.1.   Collateral and Security Documents; Future Guarantees................60
        SECTION 11.2.   Recording and Opinions..............................................61
        SECTION 11.3.   Release of Collateral...............................................63
        SECTION 11.4.   Possession and Use of Collateral....................................63
        SECTION 11.5.   Specified Releases of Collateral....................................63
        SECTION 11.6.   Purchaser Protected.................................................63
        SECTION 11.7.   Authorization of Actions To Be Taken by The Trustee
                           Under the Security Documents ....................................64
        SECTION 11.8.   Authorization of Receipt of Funds by the Trustee Under the
                           Security Documents ..............................................64

                              ARTICLE XII Collateral and Security

        SECTION 12.1.   Appointment of Collateral Agent....................................604
        SECTION 12.2.   Delegation of Duties................................................61
        SECTION 12.3.   Exculpatory Provisions..............................................63
        SECTION 12.4.   Reliance by Collateral Agent.......................................635
</TABLE>
                                              iv
<PAGE>

EXHIBIT A      Form of the Initial Security

EXHIBIT B      Form of the Exchange Security

                                              v
<PAGE>

<TABLE>
<CAPTION>

                              CROSS-REFERENCE TABLE
TIA                                                                                    Indenture
Section                                                                                Section
-------                                                                                -------

<S>   <C>                                                                              <C>
310(a)(1)                 .......................................................      7.10
(a)(2)                    .......................................................      7.10
(a)(3)                    .......................................................      N.A.
(a)(4)                    .......................................................      N.A.
(b)                       .......................................................      7.8; 7.10
(c)                       .......................................................      N.A.
311(a)                    .......................................................      7.11
(b)                       .......................................................      7.11
(c)                       .......................................................      N.A.
312(a)                    .......................................................      2.5
(b)                       .......................................................      13.3
(c)                       .......................................................      13.3
313(a)                    .......................................................      7.6
(b)(1)                    .......................................................      N.A.
(b)(2)                    .......................................................      7.6
(c)                       .......................................................      7.6
(d)                       .......................................................      7.6
314(a)                    .......................................................      3.2; 3.19;
                                                                                       13.2
(b)                       .......................................................      N.A.
(c)(1)                    .......................................................      13.4
(c)(2)                    .......................................................      13.4
(c)(3)                    .......................................................      N.A.
(d)                       .......................................................      N.A.
(e)                       .......................................................      13.5
315(a)                    .......................................................      7.1
(b)                       .......................................................      7.5; 13.2
(c)                       .......................................................      7.1
(d)                       .......................................................      7.1
(e)                       .......................................................      6.11
316(a)(last sentence)     .......................................................      13.6
(a)(1)(A)                 .......................................................      6.5
(a)(1)(B)                 .......................................................      6.4
(a)(2)                    .......................................................      N.A.
(b)                       .......................................................      6.7
317(a)(1)                 .......................................................      6.8
(a)(2)                    .......................................................      6.9
(b)                       .......................................................      2.4
318(a)                    .......................................................      13.1

N.A. means Not Applicable.

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

                                              vi
</TABLE>
<PAGE>

               INDENTURE dated as of August 30, 2001, among HANOVER EQUIPMENT
TRUST 2001B, a Delaware business trust (the "Issuer"), the Hanover Guarantors
(as defined) and WILMINGTON TRUST FSB, as trustee and as Collateral Agent (as
defined) (the "Trustee").

               Each party agrees as follows for the benefit of the other parties
and for the equal and ratable benefit of the Holders of (i) the Issuer's 8.75%
Senior Secured Notes due 2011 on the date hereof (the "Original Securities" or
"Initial Securities"), and (ii) if and when issued in exchange for Initial
Securities as provided in the Exchange and Registration Rights Agreement or a
similar agreement relating to Initial Securities, the Issuer's 8.75% Senior
Secured Notes due 2011 (the "Exchange Securities"; together with Initial
Securities, the "Securities").

                                    ARTICLE I

                   Definitions and Incorporation by Reference
                   ------------------------------------------

               SECTION 1.1. Definitions.

               Capitalized Terms not defined herein shall have the meaning given
to such terms in the Participation Agreement in the form attached hereto as
Annex A (the "Participation Agreement"), among the Issuer, Hanover Compression
Limited Partnership, a Delaware limited partnership (the "Lessee"), the
certificate holders and guarantors named therein, Wilmington Trust Company and
the Trustee, as such Participation Agreement may be amended, supplemented or
otherwise modified from time to time.

               SECTION 1.2. Other Definitions.

                                                                    Defined in
Term                                                                  Section
----                                                              --------------

"2001B Available Excess Proceeds"..................................    8.4(a)
"Account"      ....................................................    8.4(a)
"Agent Member" ....................................................    2.1(d)
"Available Excess Proceeds"........................................    3.3(a)
"Asset Disposition Offer"..........................................    3.3
"Asset Disposition Offer Amount"...................................    3.3
"Asset Disposition Offer Period"...................................    3.3
"Asset Disposition Purchase Date"..................................    3.3
"Authenticating Agent".............................................    2.2
"Bankruptcy Law"...................................................    6.1
"Change of Control"................................................    3.4
"Change of Control Offer"..........................................    3.4
"Change of Control Payment"........................................    3.4
"Change of Control Payment Date"...................................    3.4
"Issuer Order" ....................................................    2.2
"Corporate Trust Office"...........................................    3.21

                                       1
<PAGE>

                                                                               2

"covenant defeasance option".......................................    8.1(b)
"cross acceleration provision".....................................    6.1
"Custodian"    ....................................................    6.1
"Defaulted Interest"...............................................    2.13
"Event of Default".................................................    6.1
"Excess Proceeds"..................................................    3.3(a)
"Excess Sale Proceeds".............................................    8.4(b)
"Exchange Global Note".............................................    2.1(a)
"Exculpated Person"................................................    9.8
"Global Securities"................................................    2.1(a)
"IAI"   ...........................................................    2.1(a)
"Institutional Accredited Investor Global Note"....................    2.1(a)
"Issuer Obligations"...............................................   11.1(a)
"Issuer Order" ....................................................    2.2
"Judgment Default Provision........................................    6.1
"legal defeasance option"..........................................    8.1(b)
"Legal Holiday"....................................................   10.8
"Net Sale Proceeds"................................................    8.4(b)
"Note Register"....................................................    2.3
"Non-Excluded Taxes"...............................................    2.16(a)
"Paying Agent" ....................................................    2.3
"Payment Default"..................................................    6.1
"Private Placement Legend".........................................    2.1(c)
"Registrar"    ....................................................    2.3
"Regulation S" ....................................................    2.1(a)
"Regulation S Global Note".........................................    2.1(a)
"Regulation S Legend"..............................................    2.1(c)
"Regulation S Note"................................................    2.1(a)
"Resale Restriction Termination Date"..............................    2.6
"Rule 144A"    ....................................................    2.1(a)
"Rule 144A Global Note"............................................    2.1(a)
"Rule 144A Note"...................................................    2.1(a)
"Special Interest Payment Date"....................................    2.13
"Special Record Date"..............................................    2.13
"QIB"          ....................................................    2.1
"Wear and Tear Payment"............................................    8.8(a)

               SECTION 1.3. Incorporation by Reference of Trust Indenture Act.
This Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:

               "Commission" means the SEC.

               "indenture securities" means the Securities.
<PAGE>

                                                                               3

               "indenture security holder" means a Security holder.

               "indenture to be qualified" means this Indenture.

               "indenture trustee" or "institutional trustee" means the Trustee.

               "obligor" on the indenture securities means the Issuer and any
other obligor on the indenture securities.

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

               SECTION 1.4. Rules of Construction. Unless the context otherwise
requires:

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

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

               (3) "or" is not exclusive;

               (4) "including" means including without limitation;

               (5) words in the singular include the plural and words in the
         plural include the singular;

               (6) unsecured Indebtedness shall not be deemed to be subordinate
         or junior to Secured Indebtedness merely by virtue of its nature as
         unsecured Indebtedness;

               (7) the principal amount of any noninterest bearing or other
         discount security at any date shall be the principal amount thereof
         that would be shown on a balance sheet of the issuer dated such date
         prepared in accordance with GAAP; and

               (8) the principal amount of any Preferred Stock shall be (i) the
         maximum liquidation value of such Preferred Stock or (ii) the maximum
         mandatory redemption or mandatory repurchase price with respect to such
         Preferred Stock, whichever is greater.

                                   ARTICLE II

                                 The Securities
                                 --------------

               SECTION 2.1. Form, Dating and Terms. (a) Original Securities are
being offered and sold by the Issuer pursuant to a Purchase Agreement, dated
August 30, 2001, among the Issuer, the Hanover Guarantors and Goldman Sachs &
Co., as representatives of the several initial purchasers named therein. The
Original Securities will be resold initially only to (A) qualified institutional
buyers (as defined in Rule 144A under the Securities Act ("Rule 144A"))
<PAGE>

                                                                               4

in reliance on Rule 144A ("QIBs") and (B) Persons other than U.S. Persons (as
defined in Regulation S under the Securities Act ("Regulation S")) in reliance
on Regulation S. Such Original Securities may thereafter be transferred to,
among others, QIBs, purchasers in reliance on Regulation S and IAIs in
accordance with Rule 501 of the Securities Act, in each case in accordance with
the procedure described herein.

               Initial Securities offered and sold to qualified institutional
buyers in the United States of America in reliance on Rule 144A (the "Rule 144A
Note") will be issued on the Issue Date in the form of a permanent global
Security, without interest coupons, substantially in the form of Exhibit A,
which is hereby incorporated by reference and made a part of this Indenture,
including appropriate legends as set forth in Section 2.1(c) (the "Rule 144A
Global Note"), deposited with the Trustee, as custodian for DTC, duly executed
by the Issuer and authenticated by the Trustee as hereinafter provided. The Rule
144A Global Note may be represented by more than one certificate, if so required
by DTC's rules regarding the maximum principal amount to be represented by a
single certificate. The aggregate principal amount of the Rule 144A Global Note
may from time to time be increased or decreased by adjustments made on the
records of the Trustee, as custodian for DTC or its nominee, as hereinafter
provided.

               Initial Securities offered and sold outside the United States of
America (the "Regulation S Note") in reliance on Regulation S shall be issued in
the form of a permanent global Security substantially in the form of Exhibit A
(the "Regulation S Global Note") deposited with the Trustee, as custodian for
DTC, duly executed by the Issuer and authenticated by the Trustee as hereinafter
provided. The Regulation S Global Note may be represented by more than one
certificate, if so required by DTC's rules regarding the maximum principal
amount to be represented by a single certificate. The aggregate principal amount
of the Regulation S Global Note may from time to time be increased or decreased
by adjustments made on the records of the Trustee, as custodian for DTC or its
nominee, as hereinafter provided.

               Initial Securities resold to institutional "accredited investors"
(as defined in Rules 501(a)(1), (2), (3) and (7) under the Securities Act) who
are not QIBs ("IAIs") in the United States of America will be issued in the form
of a permanent global Security substantially in the form of Exhibit A (the
"Institutional Accredited Investor Global Note") deposited with the Trustee, as
custodian for DTC, duly executed by the Issuer and authenticated by the Trustee
as hereinafter provided. The Institutional Accredited Investor Global Note may
be represented by more that one certificate, if so required by DTC's rules
regarding the maximum principal amount to be represented by a single
certificate. The aggregate principal amount of the Institutional Accredited
Investor Global Note may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for DTC or its
nominee, as hereinafter provided.

               Exchange Securities exchanged for interests in the Rule 144A
Note, the Regulation S Note and the Institutional Accredited Investor Global
Note will be issued in the form of a permanent global Security substantially in
the form of Exhibit B, which is hereby incorporated by reference and made a part
of this Indenture, deposited with the Trustee as hereinafter provided, including
the appropriate legend set forth in Section 2.1(c) (the "Exchange Global Note").
The Exchange Global Note may be represented by more than one certificate, if
<PAGE>

                                                                               5

so required by DTC's rules regarding the maximum principal amount to be
represented by a single certificate.

               The Rule 144A Global Note, the Regulation S Global Note, the
Institutional Investor Global Note and the Exchange Global Note are sometimes
collectively herein referred to as the "Global Securities."

               The principal of (and premium, if any) and interest on the
Securities shall be payable at the office or agency of the Issuer maintained for
such purpose in Wilmington, Delaware, or at such other office or agency of the
Issuer as may be maintained for such purpose pursuant to Section 2.3; provided,
however, that, at the option of the Issuer, each installment of interest may be
paid by (i) check mailed to addresses of the Persons entitled thereto as such
addresses shall appear on the Note Register or (ii) wire transfer to an account
located in the United States maintained by the payee. Payments in respect of
Securities represented by a Global Security (including principal, premium and
interest) will be made by wire transfer of immediately available funds to the
accounts specified by DTC.

               The Securities may have notations, legends or endorsements
required by law, stock exchange rule or usage, in addition to those set forth on
Exhibits A and B and in Section 2.1(c). The Issuer and the Trustee shall approve
the forms of the Securities and any notation, endorsement or legend on them.
Each Security shall be dated the date of its authentication. The terms of the
Securities set forth in Exhibit A and Exhibit B are part of the terms of this
Indenture and, to the extent applicable, the Issuer and the Trustee, by their
execution and delivery of this Indenture, expressly agree to be bound by such
terms.

               (b) Denominations. The Securities shall be issuable only in fully
registered form, without coupons, and only in denominations of $1,000 and any
integral multiple thereof.

               (c) Restrictive Legends. Unless and until (i) an Initial Security
is sold under an effective registration statement or (ii) an Initial Security is
exchanged for an Exchange Security in connection with an effective registration
statement, in each case pursuant to the Exchange and Registration Rights
Agreement or a similar agreement,

               (A) the Rule 144A Global Note and the Institutional Accredited
         Investor Global Note shall bear the following legend (the "Private
         Placement Legend") on the face thereof:

         "THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
         1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY
         STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY 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 SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
         SUCH REGISTRATION.

         THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES, ON ITS OWN
         BEHALF AND ON BEHALF OF ANY INVESTOR
<PAGE>

                                                                               6

         ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR
         OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
         RESTRICTION TERMINATION DATE") THAT IS TWO YEARS AFTER THE LATER OF THE
         ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY
         AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY
         PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE ISSUER, (B) PURSUANT TO
         A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
         SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR
         RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT
         REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
         RULE 144A UNDER THE 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)
         PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES
         WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
         INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE
         501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS ACQUIRING
         THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
         INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A TRANSACTION
         INVOLVING A MINIMUM PRINCIPAL AMOUNT OF $250,000 OF SECURITIES, FOR
         INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN
         CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR
         (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
         REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER'S AND THE
         TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
         CLAUSES (D), (E) AND (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
         COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
         THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER
         THE RESALE RESTRICTION TERMINATION DATE." and

               (B) the Regulation S Global Note shall bear the following legend
         (the "Regulation S Legend") on the face thereof:

        "THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
        1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
        OFFERED OR SOLD WITHIN THE UNITED STATES OR TO OR FOR THE ACCOUNT OR
        BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE.
        BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS NOT A
        U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A
<PAGE>

                                                                               7

         U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION
         IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT ("REGULATION
         S"), (2) BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE
         TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION
         TERMINATION DATE") THAT IS TWO YEARS AFTER THE LATER OF THE ORIGINAL
         ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY
         AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY
         PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE ISSUER, (B) PURSUANT TO
         A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
         SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR
         RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT
         REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
         RULE 144A UNDER THE 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)
         PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES
         WITHIN THE MEANING OF REGULATION S, (E) TO AN INSTITUTIONAL "ACCREDITED
         INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER
         THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT,
         OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN
         EACH CASE IN A TRANSACTION INVOLVING A MINIMUM PRINCIPAL AMOUNT OF
         $250,000 OF SECURITIES, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO
         OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION
         OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION
         FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
         THE ISSUER'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
         TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF
         AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
         SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED AFTER 40
         CONSECUTIVE DAYS BEGINNING ON AND INCLUDING THE LATER OF (A) THE DAY ON
         WHICH THE SECURITIES ARE OFFERED TO PERSONS OTHER THAN DISTRIBUTORS (AS
         DEFINED IN REGULATION S) AND (B) THE DATE OF THE CLOSING OF THE
         ORIGINAL OFFERING. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION,"
         "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
         REGULATION S UNDER THE SECURITIES ACT."

               (C) The Global Securities, whether or not an Initial Security,
         shall bear the following legend on the face thereof:
<PAGE>

                                                                               8

        "UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
        THE DEPOSITORY TRUST ISSUER, A NEW YORK CORPORATION ("DTC"), NEW YORK,
        NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
        EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
        NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
        AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
        OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
        OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
        BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF,
        CEDE & CO., HAS AN INTEREST HEREIN.

        TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
        WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR
        SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
        SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
        RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE
        HEREOF."

               (d) Book-Entry Provisions. (i) This Section 2.1(d) shall apply
         only to Global Securities deposited with the Trustee, as custodian for
         DTC.

               (ii) Each Global Security initially shall (x) be registered in
         the name of DTC for such Global Security or the nominee of DTC, (y) be
         delivered to the Trustee as custodian for DTC and (z) bear legends as
         set forth in Section 2.1(c).

               (iii) Members of, or participants in, DTC ("Agent Members") shall
         have no rights under this Indenture with respect to any Global Security
         held on their behalf by DTC or by the Trustee as the custodian of DTC
         or under such Global Security, and DTC may be treated by the Issuer,
         the Trustee and any agent of the Issuer or the Trustee as the absolute
         owner of such Global Security for all purposes whatsoever.
         Notwithstanding the foregoing, nothing herein shall prevent the Issuer,
         the Trustee or any agent of the Issuer or the Trustee from giving
         effect to any written certification, proxy or other authorization
         furnished by DTC or impair, as between DTC and its Agent Members, the
         operation of customary practices of DTC governing the exercise of the
         rights of a Holder of a beneficial interest in any Global Security.

               (iv) In connection with any transfer of a portion of the
         beneficial interest in a Global Security pursuant to subsection (e) of
         this Section to beneficial owners who are required to hold Definitive
         Securities, the Securities Custodian shall reflect on its books and
         records the date and a decrease in the principal amount of such Global
         Security in an amount equal to the principal amount of the beneficial
         interest in the Global Security to be transferred, and the Issuer shall
         execute, and the Trustee shall authenticate and deliver, one or more
         Definitive Securities of like tenor and amount.
<PAGE>

                                                                               9

               (v) In connection with the transfer of an entire Global Security
         to beneficial owners pursuant to subsection (e) of this Section, such
         Global Security shall be deemed to be surrendered to the Trustee for
         cancellation, and the Issuer shall execute, and the Trustee shall
         authenticate and deliver, to each beneficial owner identified by DTC in
         exchange for its beneficial interest in such Global Security, an equal
         aggregate principal amount of Definitive Securities of authorized
         denominations.

               (vi) The registered Holder of a Global Security may grant proxies
         and otherwise authorize any person, including Agent Members and persons
         that may hold interests through Agent Members, to take any action which
         a Holder is entitled to take under this Indenture or the Securities.

               (e) Definitive Securities. (i) Except as provided below, owners
         of beneficial interests in Global Securities will not be entitled to
         receive Definitive Securities. If required to do so pursuant to any
         applicable law or regulation, beneficial owners may obtain Definitive
         Securities in exchange for their beneficial interests in a Global
         Security upon written request in accordance with DTC's and the
         Registrar's procedures. In addition, Definitive Securities shall be
         transferred to all beneficial owners in exchange for their beneficial
         interests in a Global Security if (a) DTC notifies the Issuer that it
         is unwilling or unable to continue as depositary for such Global
         Security or DTC ceases to be a clearing agency registered under the
         Exchange Act, at a time when DTC is required to be so registered in
         order to act as depositary, and in each case a successor depositary is
         not appointed by the Issuer within 90 days of such notice or, (b) the
         Issuer executes and delivers to the Trustee and Registrar an Officers'
         Certificate stating that such Global Security shall be so exchangeable
         or (c) an Event of Default has occurred and is continuing and the
         Registrar has received a request from DTC.

               (ii) Any Definitive Security delivered in exchange for an
         interest in a Global Security pursuant to Section 2.1(d)(iv) or (v)
         shall, except as otherwise provided by Section 2.6(c), bear the
         applicable legend regarding transfer restrictions applicable to the
         Definitive Security set forth in Section 2.1(c).

               (iii) In connection with the exchange of a portion of a
         Definitive Security for a beneficial interest in a Global Security, the
         Trustee shall cancel such Definitive Security, and the Issuer shall
         execute, and the Trustee shall authenticate and deliver, to the
         transferring Holder a new Definitive Security representing the
         principal amount not so transferred.

               SECTION 2.2. Execution and Authentication. One Officer shall sign
the Securities for the Issuer by manual or facsimile signature. If an Officer
whose signature is on a Security no longer holds that office at the time the
Trustee authenticates the Security, the Security shall be valid nevertheless.

               A Security shall not be valid until an authorized signatory of
the Trustee manually authenticates the Security. The signature of the Trustee on
a Security shall be conclusive evidence that such Security has been duly and
validly authenticated and issued under this Indenture. A Security shall be dated
the date of its authentication.
<PAGE>

                                                                              10

               At any time and from time to time after the execution and
delivery of this Indenture, the Trustee shall authenticate and make available
for delivery: (1) Original Securities for original issue on the Issue Date in an
aggregate principal amount of $250,000,000 million and (2) Exchange Securities
for issue only in a Registered Exchange Offer pursuant to the Exchange and
Registration Rights Agreement, and only in exchange for Initial Securities of an
equal principal amount, in each case upon a written order of the Issuer signed
by two Officers or by an Officer and either an Assistant Treasurer or an
Assistant Secretary of the Issuer (the "Issuer Order"). Such Issuer Order shall
specify the amount of the Securities to be authenticated and the date on which
the original issue of Securities is to be authenticated and whether the
Securities are to be Initial Securities or Exchange Securities. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is limited to $250 million outstanding, except for Securities
authenticated and delivered upon registration or transfer of, or in exchange
for, or in lieu of, other Securities of the same class pursuant to Section 2.6,
Section 2.9, Section 2.11, Section 5.8 or Section 9.5 and except for
transactions similar to the Registered Exchange Offer. All Securities issued on
the Issue Date shall be identical in all respects other than issue dates, the
date from which interest accrues and any changes relating thereto.
Notwithstanding anything to the contrary contained in this Indenture, all
Securities issued under this Indenture shall vote and consent together on all
matters as one class and no series of Securities will have the right to vote or
consent as a separate class on any matter.

               The Trustee may appoint an agent (the "Authenticating Agent")
reasonably acceptable to the Issuer to authenticate the Securities. Unless
limited by the terms of such appointment, any such Authenticating Agent may
authenticate Securities whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by the
Authenticating Agent.

               SECTION 2.3. Registrar and Paying Agent. The Issuer shall
maintain an office or agency where Securities may be presented for registration
of transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Issuer shall
cause each of the Registrar and the Paying Agent to maintain an office or agency
in Wilmington, Delaware. The Registrar shall keep a register of the Securities
and of their transfer and exchange (the "Note Register"). The Issuer may have
one or more co-registrars and one or more additional paying agents. The term
"Paying Agent" includes any additional paying agent. Any transfer of a Security
shall be effective only upon appropriate entries with respect thereto being made
in the Note Register. Any assignment or transfer of all or part of a Security
shall be registered on the Note Register only upon surrender for registration of
assignment or transfer of the Security, accompanied by a duly executed form of
assignment, and thereupon one or more new Securities shall be issued to the
designated transferee. Any Security surrendered pursuant to this Section 2.3
shall be returned by the Registrar to the Issuer marked "cancelled."

               The Issuer shall enter into an appropriate agency agreement with
any Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Issuer shall notify
the Trustee of the name and address of each such agent. If the Issuer fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
<PAGE>

                                                                              11

entitled to appropriate compensation therefor pursuant to Section 7.7. The
Issuer may act as Paying Agent, Registrar, co-registrar or transfer agent.

               The Issuer initially appoints the Trustee as Registrar and Paying
Agent for the Securities.

               SECTION 2.4. Paying Agent To Hold Money in Trust. By no later
than 10:00 a.m (New York City time) on the date on which any principal of or
interest on any Security is due and payable, the Issuer shall deposit with the
Paying Agent a sum sufficient to pay such principal or interest when due. The
Issuer shall require each Paying Agent (other than the Trustee) to agree in
writing that such Paying Agent shall hold in trust for the benefit of Security
holders or the Trustee all money held by such Paying Agent for the payment of
principal of or interest on the Securities and shall notify the Trustee in
writing of any default by the Issuer or any Hanover Guarantor in making any such
payment. If the Issuer acts as Paying Agent, it shall segregate the money held
by it as Paying Agent and hold it as a separate trust fund. The Issuer at any
time may require a Paying Agent (other than the Trustee) to pay all money held
by it to the Trustee and to account for any funds disbursed by such Paying
Agent. Upon complying with this Section, the Paying Agent (if other than the
Issuer) shall have no further liability for the money delivered to the Trustee.
Upon any bankruptcy, reorganization or similar proceeding with respect to the
Issuer, the Trustee shall serve as Paying Agent for the Securities.

               SECTION 2.5. Securityholder 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 Securityholders. If the Trustee is not the
Registrar, or to the extent otherwise required under the TIA, the Issuer shall
furnish to the Trustee, in writing at least seven Business Days 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 Securityholders.

               SECTION 2.6. Transfer and Exchange.

                      (a) The following provisions shall apply with respect to
         any proposed transfer of a Rule 144A Note or an Institutional
         Accredited Investor Global Note prior to the date which is two years
         after the later of the date of its original issue and the last date on
         which the Issuer or any affiliate of the Issuer was the owner of such
         Securities (or any predecessor thereto) (the "Resale Restriction
         Termination Date"):

                      (i) a transfer of a Rule 144A Note or an Institutional
               Accredited Investor Global Note or a beneficial interest therein
               to a QIB shall be made upon the representation of the transferee
               in the form as set forth on the reverse of the Security that it
               is purchasing for its own account or an account with respect to
               which it exercises sole investment discretion and that it and any
               such account is a "qualified institutional buyer" within the
               meaning of Rule 144A, and is aware that the sale to it is being
               made in reliance on Rule 144A and acknowledges that it has
               received such information regarding the Issuer as such transferee
               has requested pursuant to Rule 144A or has determined not to
               request such information and that
<PAGE>

                                                                              12

               it is aware that the transferor is relying upon its foregoing
               representations in order to claim the exemption from registration
               provided by Rule 144A;

                      (ii) a transfer of a Rule 144A Note or an Institutional
               Accredited Investor Global Note or a beneficial interest therein
               to an IAI shall be made upon receipt by the Trustee or its agent
               of a certificate substantially in the form set forth in Section
               2.7 from the proposed transferee and, if requested by the Issuer
               or the Trustee, the delivery of an opinion of counsel,
               certification and/or other information satisfactory to each of
               them; and

                      (iii) a transfer of a Rule 144A Note or an Institutional
               Accredited Investor Global Note or a beneficial interest therein
               to a Non-U.S. Person shall be made upon receipt by the Trustee or
               its agent of a certificate substantially in the form set forth in
               Section 2.8 from the proposed transferee and, if requested by the
               Issuer or the Trustee, the delivery of an opinion of counsel,
               certification and/or other information satisfactory to each of
               them.

                      (b) The following provisions shall apply with respect to
         any proposed transfer of a Regulation S Note prior to the expiration of
         the Restricted Period:

                      (i) a transfer of a Regulation S Note or a beneficial
               interest therein to a QIB shall be made upon the representation
               of the transferee, in the form of assignment on the reverse of
               the certificate, that it is purchasing the Security for its own
               account or an account with respect to which it exercises sole
               investment discretion and that it and any such account is a
               "qualified institutional buyer" within the meaning of Rule 144A,
               and is aware that the sale to it is being made in reliance on
               Rule 144A and acknowledges that it has received such information
               regarding the Issuer as such transferee has requested pursuant to
               Rule 144A or has determined not to request such information and
               that it is aware that the transferor is relying upon its
               foregoing representations in order to claim the exemption from
               registration provided by Rule 144A;

                      (ii) a transfer of a Regulation S Note or a beneficial
               interest therein to an IAI shall be made upon receipt by the
               Trustee or its agent of a certificate substantially in the form
               set forth in Section 2.7 from the proposed transferee and, if
               requested by the Issuer or the Trustee, the delivery of an
               opinion of counsel, certification and/or other information
               satisfactory to each of them; and

                      (iii) a transfer of a Regulation S Note or a beneficial
               interest therein to a Non-U.S. Person shall be made upon receipt
               by the Trustee or its agent of a certificate substantially in the
               form set forth in Section 2.8 hereof from the proposed transferee
               and, if requested by the Issuer or the Trustee, receipt by the
               Trustee or its agent of an opinion of counsel, certification
               and/or other information satisfactory to each of them.
<PAGE>

                                                                              13

               After the expiration of the Restricted Period, interests in the
Regulation S Note may be transferred without requiring certification set forth
in Section 2.7, Section 2.8 or any additional certification.

                      (c) Restricted Securities Legend. Upon the transfer,
         exchange or replacement of Securities not bearing a Restricted
         Securities Legend, the Registrar shall deliver Securities that do not
         bear a Restricted Securities Legend. Upon the transfer, exchange or
         replacement of Securities bearing a Restricted Securities Legend, the
         Registrar shall deliver only Securities that bear a Restricted
         Securities Legend unless there is delivered to the Registrar an Opinion
         of Counsel to the effect that neither such legend nor the related
         restrictions on transfer are required in order to maintain compliance
         with the provisions of the Securities Act.

                      (d) The Registrar shall retain copies of all letters,
         notices and other written communications received pursuant to Section
         2.1 or this Section 2.6. The Issuer shall have the right to inspect and
         make copies of all such letters, notices or other written
         communications at any reasonable time upon the giving of reasonable
         prior written notice to the Registrar.

                      (e) Obligations with Respect to Transfers and Exchanges of
         Securities.

                      (i) To permit registrations of transfers and exchanges,
               the Issuer shall, subject to the other terms and conditions of
               this Article II, execute and the Trustee shall authenticate
               Definitive Securities and Global Securities at the Registrar's or
               co-registrar's request.

                      (ii) No service charge shall be made to a Holder for any
               registration of transfer or exchange, but the Issuer may require
               payment of a sum sufficient to cover any transfer tax,
               assessments, or similar governmental charge payable in connection
               therewith (other than any such transfer taxes, assessments or
               similar governmental charges payable upon exchange or transfer
               pursuant to Sections 3.3, 3.4 or 9.5).

                      (iii) The Registrar or co-registrar shall not be required
               to register the transfer of or exchange of any Security for a
               period beginning (1) 15 days before the mailing of a notice of an
               offer to repurchase or redeem Securities and ending at the close
               of business on the day of such mailing or (2) 15 days before an
               interest payment date and ending on such interest payment date.

                      (iv) Prior to the due presentation for registration of
               transfer of any Security, the Issuer, the Trustee, the Paying
               Agent, the Registrar or any co-registrar may deem and treat the
               person in whose name a Security is registered as the absolute
               owner of such Security for the purpose of receiving payment of
               principal of and interest on such Security and for all other
               purposes whatsoever, whether or not such Security is overdue, and
               none of the Issuer, the Trustee, the Paying Agent, the Registrar
               or any co-registrar shall be affected by notice to the contrary.
<PAGE>

                                                                              14

                      (v) Any Definitive Security delivered in exchange for an
               interest in a Global Security pursuant to Section 2.1(d) shall,
               except as otherwise provided by Section 2.6(c), bear the
               applicable legend regarding transfer restrictions applicable to
               the Definitive Security set forth in Section 2.1(c).

                      (vi) All Securities issued upon any transfer or exchange
               pursuant to the terms of this Indenture shall evidence the same
               debt and shall be entitled to the same benefits under this
               Indenture as the Securities surrendered upon such transfer or
               exchange.

                      (f) No Obligation of the Trustee. (i) The Trustee shall
         have no responsibility or obligation to any beneficial owner of a
         Global Security, a member of, or a participant in, DTC or other Person
         with respect to the accuracy of the records of DTC or its nominee or of
         any participant or member thereof, with respect to any ownership
         interest in the Securities or with respect to the delivery to any
         participant, member, beneficial owner or other Person (other than DTC)
         of any notice (including any notice of redemption) or the payment of
         any amount or delivery of any Securities (or other security or
         property) under or with respect to such Securities. All notices and
         communications to be given to the Holders and all payments to be made
         to Holders in respect of the Securities shall be given or made only to
         or upon the order of the registered Holders (which shall be DTC or its
         nominee in the case of a Global Security). The rights of beneficial
         owners in any Global Security shall be exercised only through DTC
         subject to the applicable rules and procedures of DTC. The Trustee may
         rely and shall be fully protected in relying upon information furnished
         by DTC with respect to its members, participants and any beneficial
         owners.

                      (ii) The Trustee shall have no obligation or duty to
               monitor, determine or inquire as to compliance with any
               restrictions on transfer imposed under this Indenture or under
               applicable law with respect to any transfer of any interest in
               any Security (including any transfers between or among DTC
               participants, members or beneficial owners in any Global
               Security) other than to require delivery of such certificates and
               other documentation or evidence as are expressly required by, and
               to do so if and when expressly required by, the terms of this
               Indenture, and to examine the same to determine substantial
               compliance as to form with the express requirements hereof.

               SECTION 2.7. Form of Certificate to be Delivered in Connection
with Transfers to Institutional Accredited Investors.

                                                                          [Date]

Hanover Equipment Trust 2001B
c/o Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
<PAGE>

                                                                              15

Attention:  Corporate Trust Administration

Dear Sirs:

               This certificate is delivered to request a transfer of $_________
principal amount of the 8.75% Senior Secured Notes due 2011 (the "Notes") of
Hanover Equipment Trust 2001B(the "Issuer").

               Upon transfer, the Notes would be registered in the name of the
new beneficial owner as follows:

               Name: ___________________________________
               Address: ________________________________
               Taxpayer ID Number: _____________________
               The undersigned represents and warrants to you that:

               1. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended
(the "Securities Act")) purchasing for our own account or for the account of
such an institutional "accredited investor" at least $250,000 principal amount
of the Notes, and we are acquiring the Notes not with a view to, or for offer or
sale in connection with, any distribution in violation of the Securities Act. We
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risk of our investment in the Notes and we
invest in or purchase securities similar to the Notes in the normal course of
our business. We and any accounts for which we are acting are each able to bear
the economic risk of our or its investment.

               2. We understand that the Notes have not been registered under
the Securities Act and, unless so registered, may not be sold except as
permitted in the following sentence. We agree on our own behalf and on behalf of
any investor account for which we are purchasing Notes to offer, sell or
otherwise transfer such Notes prior to the date that is two years after the
later of the date of original issue and the last date on which the Issuer or any
affiliate of the Issuer was the owner of such Notes (or any predecessor thereto)
(the "Resale Restriction Termination Date") only (a) to the Issuer, (b) pursuant
to a registration statement which has been declared effective under the
Securities Act, (c) in a transaction complying with the requirements of Rule
144A under the Securities Act, to a person we reasonably believe is a qualified
institutional buyer under Rule 144A (a "QIB") that purchases for its own account
or for the account of a QIB and to whom notice is given that the transfer is
being made in reliance on Rule 144A, (d) pursuant to offers and sales that occur
outside the United States within the meaning of Regulation S under the
Securities Act, (e) to an institutional "accredited investor" (within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act) that is
purchasing for its own account or for the account of such an institutional
"accredited investor," in each case in a minimum principal amount of Notes of
$250,000 or (f) pursuant to any other available exemption from the registration
requirements of the Securities Act, subject in each of the foregoing cases to
any requirement of law that the disposition of our property or the property of
such investor account or accounts be at all times within our or their control
and in compliance with any applicable state securities laws. The foregoing
restrictions on resale will not apply subsequent to the Resale Restriction
Termination Date. If any resale or other transfer of the
<PAGE>

                                                                              16

Notes is proposed to be made pursuant to clause (e) above prior to the Resale
Restriction Termination Date, the transferor shall deliver a letter from the
transferee substantially in the form of this letter to the Issuer and the
Trustee, which shall provide, among other things, that the transferee is an
institutional "accredited investor" (within the meaning of Rule 501(a)(1), (2),
(3) or (7) under the Securities Act) and that it is acquiring such Notes for
investment purposes and not for distribution in violation of the Securities Act.
Each purchaser acknowledges that the Issuer and the Trustee reserve the right
prior to any offer, sale or other transfer prior to the Resale Termination Date
of the Securities pursuant to clauses (d), (e) or (f) above to require the
delivery of an opinion of counsel, certifications and/or other information
satisfactory to the Issuer and the Trustee.

               3. We represent that either: (a) no portion of the assets used to
acquire and hold the Notes or any interest therein constitutes assets of any (i)
employee benefit plan that is subject to Title I of the U.S. Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), (ii) plan, individual
retirement account and other arrangement that is subject to Section 4975 of the
Code or provisions under any federal, state, local, non-U.S. or other laws or
regulations that are similar to such provisions of the Code or ERISA
(collectively, "Similar Laws"), and (iii) other entity whose underlying assets
are considered to include "plan assets" of such plans, accounts and arrangements
(each, a "Plan"); or (b) the purchase and holding of the Notes or any interest
therein will not constitute a non-exempt prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Code or similar violation
under any applicable Similar Laws.

                                            TRANSFEREE:______________________

                                            BY:________________________________
<PAGE>

                                                                              17

               SECTION 2.8. Form of Certificate to be Delivered in Connection
with Transfers Pursuant to Regulation S.

                                                                          [Date]

Hanover Equipment Trust 2001B
c/o Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention:  Corporate Trust Administration

               Re:    Hanover Equipment Trust 2001B
                      8.75% Senior Secured Notes due 2011 (the "Securities")

Ladies and Gentlemen:

               In connection with our proposed sale of $________ aggregate
principal amount of the Securities, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the United States
Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, we
represent that:

               (a) the offer of the Securities was not made to a person in the
         United States;

               (b) either (i) at the time the buy order was originated, the
         transferee was outside the United States or we and any person acting on
         our behalf reasonably believed that the transferee was outside the
         United States or (ii) the transaction was executed in, on or through
         the facilities of a designated off-shore securities market and neither
         we nor any person acting on our behalf knows that the transaction has
         been pre-arranged with a buyer in the United States;

               (c) no directed selling efforts have been made in the United
         States in contravention of the requirements of Rule 903(b) or Rule
         904(b) of Regulation S, as applicable; and

               (d) the transaction is not part of a plan or scheme to evade the
         registration requirements of the Securities Act.

               In addition, if the sale is made during a restricted period and
the provisions of Rule 903(c)(3) or Rule 904(c)(1) of Regulation S are
applicable thereto, we confirm that such sale has been made in accordance with
the applicable provisions of Rule 903(c)(3) or Rule 904(c)(1), as the case may
be.
<PAGE>

                                                                              18

               You and the Issuer 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. Terms used in this certificate have the
meanings set forth in Regulation S.

                                Very truly yours,

                                [Name of Transferor]

                                By:____________________________

                                -------------------------------
                                  Authorized Signature

               SECTION 2.9. Mutilated, Destroyed, Lost or Stolen Securities. If
a mutilated Security is surrendered to the Registrar or if the Holder of a
Security claims that the Security has been lost, destroyed or wrongfully taken,
the Issuer shall issue and the Trustee shall authenticate a replacement Security
if the requirements of Section 8-405 of the Uniform Commercial Code are met and
the Holder satisfies any other reasonable requirements of the Trustee. If
required by the Trustee or the Issuer, such Holder shall furnish an indemnity
bond sufficient in the judgment of the Issuer and the Trustee to protect the
Issuer, the Trustee, the Paying Agent, the Registrar and any co-registrar from
any loss which any of them may suffer if a Security is replaced, and, in the
absence of notice to the Issuer, any Hanover Guarantor or the Trustee that such
Security has been acquired by a bona fide purchaser, the Issuer shall execute
and upon Issuer Order the Trustee shall authenticate and make available for
delivery, in exchange for any such mutilated Security or in lieu of any such
destroyed, lost or stolen Security, a new Security of like tenor and principal
amount, bearing a number not contemporaneously outstanding.

               In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Issuer in its discretion
may, instead of issuing a new Security, pay such Security.

               Upon the issuance of any new Security under this Section, the
Issuer may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) in connection
therewith.

               Every new Security issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Issuer and any other obligor upon the
Securities and a Security Obligation under the Hanover Guarantee, whether or not
the mutilated, destroyed, lost or stolen Security shall be at any time
enforceable by anyone, and shall be entitled to all benefits of this Indenture
equally and proportionately with any and all other Securities duly issued
hereunder.
<PAGE>

                                                                              19

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

               SECTION 2.10. Outstanding Securities. Securities outstanding at
any time are all Securities authenticated by the Trustee except for those
canceled by it, those delivered to it for cancellation and those described in
this Section as not outstanding. A Security ceases to be outstanding in the
event the Issuer holds the Security, provided, however, that (i) for purposes of
determining which are outstanding for consent or voting purposes hereunder,
Securities shall cease to be outstanding in the event the Issuer or an Affiliate
of the Issuer holds the Security and (ii) in determining whether the Trustee
shall be protected in making a determination whether the Holders of the
requisite principal amount of outstanding Securities are present at a meeting of
Holders of Securities for quorum purposes or have consented to or voted in favor
of any request, demand, authorization, direction, notice, consent, waiver,
amendment or modification hereunder, or relying upon any such quorum, consent or
vote, only Securities which a Trust Officer of the Trustee actually knows to be
held by the Issuer or an Affiliate of the Issuer shall not be considered
outstanding.

               If a Security is replaced pursuant to Section 2.9, it ceases to
be outstanding unless the Trustee and the Issuer receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.

               If the Paying Agent segregates and holds in trust, in accordance
with this Indenture, on a redemption date or maturity date money sufficient to
pay all principal and interest payable on that date with respect to the
Securities (or portions thereof) to be redeemed or maturing, as the case may be,
and the Paying Agent is not prohibited from paying such money to the
Securityholders on that date pursuant to the terms of this Indenture, then on
and after that date such Securities (or portions thereof) cease to be
outstanding and interest on them ceases to accrue.

               SECTION 2.11. Temporary Securities. Until Definitive Securities
are ready for delivery, the Issuer may prepare and the Trustee shall
authenticate temporary Securities. Temporary Securities shall be substantially
in the form of Definitive Securities but may have variations that the Issuer
considers appropriate for temporary Securities. Without unreasonable delay, the
Issuer shall prepare and the Trustee shall authenticate Definitive Securities.
After the preparation of Definitive Securities, the temporary Securities shall
be exchangeable for Definitive Securities upon surrender of the temporary
Securities at any office or agency maintained by the Issuer for that purpose and
such exchange shall be without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities, the Issuer shall execute,
and the Trustee shall authenticate and make available for delivery in exchange
therefor, one or more Definitive Securities representing an equal principal
amount of Securities. Until so exchanged, the Holder of temporary Securities
shall in all respects be entitled to the same benefits under this Indenture as a
holder of Definitive Securities.

               SECTION 2.12. Cancellation. The Issuer at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The
<PAGE>

                                                                              20

Trustee and no one else shall cancel all Securities surrendered for registration
of transfer, exchange, payment or cancellation and dispose of such Securities in
accordance with its internal policies including delivery of a Certificate of
Destruction describing such Securities. The Issuer may not issue new Securities
to replace Securities it has paid or delivered to the Trustee for cancellation
for any reason other than in connection with a transfer or exchange.

               SECTION 2.13. Payment of Interest; Defaulted Interest. Interest
on any Security which is payable, and is punctually paid or duly provided for,
on any interest payment date shall be paid to the Person in whose name such
Security (or one or more predecessor Securities) is registered at the close of
business on the regular record date for such interest at the office or agency of
the Issuer maintained for such purpose pursuant to Section 2.3.

               Any interest on any Security which is payable, but is not paid
when the same becomes due and payable and such nonpayment continues for a period
of 30 days shall forthwith cease to be payable to the Holder on the regular
record date by virtue of having been such Holder, and such defaulted interest
and (to the extent lawful) interest on such defaulted interest at the rate borne
by the Securities (such defaulted interest and interest thereon herein
collectively called "Defaulted Interest") shall be paid by the Issuer, at its
election in each case, as provided in clause (a) or (b) below:

                      (a) The Issuer may elect to make payment of any Defaulted
         Interest to the Persons in whose names the Securities (or their
         respective predecessor Securities) are registered at the close of
         business on a Special Record Date (as defined below) for the payment of
         such Defaulted Interest, which shall be fixed in the following manner.
         The Issuer shall notify the Trustee in writing of the amount of
         Defaulted Interest proposed to be paid on each Security and the date
         (not less than 30 days after such notice) of the proposed payment (the
         "Special Interest Payment Date"), and at the same time the Issuer shall
         deposit with the Trustee an amount of money equal to the aggregate
         amount proposed to be paid in respect of such Defaulted Interest or
         shall make arrangements satisfactory to the Trustee for such deposit
         prior to the date of the proposed payment, such money when deposited to
         be held in trust for the benefit of the Persons entitled to such
         Defaulted Interest as in this clause provided. Thereupon the Trustee
         shall fix a record date (the "Special Record Date") for the payment of
         such Defaulted Interest which shall be not more than 15 days and not
         less than 10 days prior to the Special Interest Payment Date and not
         less than 10 days after the receipt by the Trustee of the notice of the
         proposed payment. The Trustee shall promptly notify the Issuer of such
         Special Record Date, and in the name and at the expense of the Issuer,
         shall cause notice of the proposed payment of such Defaulted Interest
         and the Special Record Date and Special Interest Payment Date therefor
         to be given in the manner provided for in Section 10.2, not less than
         10 days prior to such Special Record Date. Notice of the proposed
         payment of such Defaulted Interest and the Special Record Date and
         Special Interest Payment Date therefor having been so given, such
         Defaulted Interest shall be paid on the Special Interest Payment Date
         to the Persons in whose names the Securities (or their respective
         predecessor Securities) are registered at the close of business on such
         Special Record Date and shall no longer be payable pursuant to the
         following clause (b).
<PAGE>

                                                                              21

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

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

               SECTION 2.14. Computation of Interest. Interest on the Securities
shall be computed on the basis of a 360-day year of twelve 30-day months.

               SECTION 2.15. CUSIP Numbers. The Issuer in issuing the Securities
may use "CUSIP" numbers (if then generally in use) and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided, however, that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Securities or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such CUSIP
numbers. The Issuer shall promptly notify the Trustee of any change in the CUSIP
numbers.

               SECTION 2.16. Taxes. All payments made by the Issuer under this
Indenture and the Securities shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future income,
stamp or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any governmental authority in the event that the Securities are determined
not to be debt for income tax purposes, excluding net income taxes and franchise
taxes (imposed in lieu of net income taxes) imposed on a Securityholder as a
result of a present or former connection between the jurisdiction of the
government or taxing authority imposing such tax and such Securityholder
(excluding a connection arising solely from such Securityholder having executed,
delivered, performed its obligations or received a payment under, or enforced,
this Indenture or the Securities) or any political subdivision or taxing
authority thereof or therein (all such non-excluded taxes, levies, imposts,
duties, charges, fees, deductions and withholdings being hereinafter called
"Non-Excluded Taxes"). If any Non-Excluded Taxes are required to be withheld
from any amounts payable to Securityholder hereunder or under the Securities,
the amounts so payable to such Securityholder shall be increased to the extent
necessary to yield to such Securityholder (after payment of all Non-Excluded
Taxes) interest or any such other amounts payable hereunder at the rates or in
the amounts specified in this Indenture and the Securities. Whenever any
Non-Excluded Taxes are payable by the Issuer, as promptly as possible thereafter
the Issuer shall send to such Securityholder a certified copy of an original
official receipt received by the Issuer showing payment thereof. If the Issuer
fails to pay any Non-Excluded Taxes when due to the appropriate taxing authority
or fails to remit the required receipts or other required documentary evidence,
the Issuer shall indemnify the Securityholders for any incremental taxes,
interest or penalties that may become payable by Certificate Holder as
<PAGE>

                                                                              22

a result of any such failure. The agreements in this subsection shall survive
the termination of this Indenture and the payment of the Securities and all
other amounts payable hereunder.

               It is the intent of the parties hereto that the Securities will
be treated as debt for United States federal income tax purposes.

                                   ARTICLE III

                             Covenants of the Issuer
                             -----------------------

               SECTION 3.1. Payment of Securities. The Issuer shall promptly pay
the principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on such date the Trustee or the Paying
Agent holds in accordance with this Indenture money sufficient to pay all
principal and interest then due and the Trustee or the Paying Agent, as the case
may be, is not prohibited from paying such money to the Securityholders on that
date pursuant to the terms of this Indenture.

               The Issuer shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.

               Notwithstanding anything to the contrary contained in this
Indenture, the Issuer may, to the extent it is required to do so by law, deduct
or withhold income or other similar taxes imposed by the United States of
America from principal or interest payments hereunder.

               SECTION 3.2. SEC Reports and Available Information. (a)
Notwithstanding that the Issuer may not be subject to the reporting requirements
of Section 13 or 15(d) of the Exchange Act, to the extent permitted by the
Exchange Act, the Issuer will file with the Commission, and provide the Trustee
and the Holders of the Securities with, the annual reports and the information,
documents and other reports (or copies of such portions of any of the foregoing
as the Commission may by rules and regulations prescribe) that are specified in
Sections 13 and 15(d) of the Exchange Act within the time periods specified
therein. In the event that the Issuer is not permitted to file such reports,
documents and information with the Commission pursuant to the Exchange Act, the
Issuer will nevertheless provide such Exchange Act information to the Trustee
and the Holders of the Securities as if the Issuer were subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act within the time periods
specified therein. The Issuer shall also comply with the other provisions of TIA
ss. 314(a). Delivery of such reports, information and documents to the Trustee
is for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Issuer's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
<PAGE>

                                                                              23

               SECTION 3.3. Asset Disposition Offer. (a) To the extent that
Hanover or any of its Restricted Subsidiaries makes any Asset Disposition
pursuant to Section 9.6(a) of the Participation Agreement, any Net Available
Cash from such Asset Dispositions that are not applied or invested as provided
in Section 9.6(a) of the Participation Agreement will be deemed to constitute
"Excess Proceeds." On the 361st day after an Asset Disposition, if the aggregate
amount of Excess Proceeds exceeds $25.0 million, Hanover will notify the Issuer
that it will, upon notice by the Trustee, cause the Lessee to purchase Equipment
having a Termination Value equal to or less than the amount (the "2001B
Available Excess Proceeds"), if any, by which such excess amount (the "Available
Excess Proceeds") exceeds the portion of such Available Excess Proceeds made
available for an "Asset Disposition Offer" pursuant to the 2001A Indenture. The
Issuer shall promptly make an offer ("Asset Disposition Offer") to all holders
of Securities to purchase the maximum principal amount of Securities that may be
purchased out of the 2001B Available Excess Proceeds, taking into account the
proportionate amount of Certificate Holder Contributions to be repaid, at an
offer price in cash in an amount equal to 100% of the principal amount of the
Securities, plus accrued and unpaid interest to the date of purchase, in
accordance with the procedures set forth in this Indenture, in each case in
multiples of $1,000. To the extent that the aggregate amount of Securities so
validly tendered and not properly withdrawn pursuant to an Asset Disposition
Offer and the proportionate amount of Certificate Holder Contributions to be
repaid is less than the 2001B Available Excess Proceeds, Hanover may use any
remaining 2001B Available Excess Proceeds for general corporate purposes,
subject to the other covenants contained in this Indenture and the Participation
Agreement. If the aggregate principal amount of Securities surrendered by
holders thereof and the proportionate amount of Certificate Holder Contributions
to be repaid exceeds the amount of 2001B Available Excess Proceeds, the
Securities and the corresponding amount of Certificate Holder Contributions
shall be purchased and repaid, as applicable, on a pro rata basis. Upon
completion of such Asset Disposition Offer, the amount of Excess Proceeds shall
be reset at zero.

               (b) The Asset Disposition Offer will remain open for a period of
20 Business Days following its commencement, except to the extent that a longer
period is required by applicable law (the "Asset Disposition Offer Period"). No
later than five Business Days after the termination of the Asset Disposition
Offer Period (the "Asset Disposition Purchase Date"), the Issuer will purchase
the principal amount of Securities required to be purchased pursuant to this
Section 3.2 (the "Asset Disposition Offer Amount") or, if less than the Asset
Disposition Offer Amount has been so validly tendered, all Securities validly
tendered in response to the Asset Disposition Offer.

               (1) If the Asset Disposition Purchase Date is on or after an
         interest record date and on or before the related interest payment
         date, any accrued and unpaid interest will be paid to the Person in
         whose name a Security is registered at the close of business on such
         record date, and no additional interest will be payable to Holders who
         tender Securities pursuant to the Asset Disposition Offer.

               (2) On or before the Asset Disposition Purchase Date, the Issuer
         will, to the extent lawful, accept for payment, on a pro rata basis to
         the extent necessary, the Asset Disposition Offer Amount of Securities
         or portions of Securities so validly tendered and not properly
         withdrawn pursuant to the Asset Disposition Offer, or if less than the
         Asset
<PAGE>

                                                                              24

         Disposition Offer Amount has been validly tendered and not properly
         withdrawn, all Securities so validly tendered and not properly
         withdrawn, in each case in integral multiples of $1,000. The Issuer
         will deliver to the Trustee an Officers' Certificate stating that such
         Securities or portions thereof were accepted for payment by the Issuer
         in accordance with the terms of this Section 3.3. The Issuer or the
         Paying Agent, as the case may be, will promptly (but in any case not
         later than five Business Days after the termination of the Asset
         Disposition Offer Period) mail or deliver to each tendering Holder of
         Securities an amount equal to the purchase price of the Securities so
         validly tendered and not properly withdrawn by such Holder and accepted
         by the Issuer for purchase, and the Issuer will promptly issue a new
         Security, and the Trustee, upon delivery of an Officers' Certificate
         from the Issuer will authenticate and mail or deliver such new Security
         to such Holder, in a principal amount equal to any unpurchased portion
         of the Security surrendered; provided that each such new Security will
         be in a principal amount of $1,000 or an integral multiple of $1,000.
         Any Security not so accepted will be promptly mailed or delivered by
         the Issuer to the Holder thereof. The Issuer will publicly announce the
         results of the Asset Disposition Offer on the Asset Disposition
         Purchase Date.

               (c) The Issuer will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Indenture. To the extent that the provisions of any securities laws or
regulations conflict with this Section 3.3, the Issuer will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under this Indenture by virtue of complying with such
securities laws and regulations.

               SECTION 3.4. Change of Control. If a Change of Control with
respect to Hanover occurs, each registered holder of Securities will have the
right to require the Issuer to repurchase all or any part (equal to $1,000 or an
integral multiple thereof) of such Holder's Securities at a purchase price in
cash equal to 101% of the principal amount of the Securities plus accrued and
unpaid interest, if any, to the date of purchase (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date). The Issuer will redeem the Securities with the
proceeds from an Equipment Purchase plus any Supplemental Rent paid in
conjunction therewith by the Lessee pursuant to, and in accordance with, Section
20.1(c) of the Lease. A proportionate amount of Certificate Holder
Contributions, including the Certificate Holder Yield on each Certificate so
repaid, shall be repaid by the Issuer.

               Within 30 days following any Change of Control, the Issuer, at
the direction of Hanover or the Lessee, will mail a notice (the "Change of
Control Offer") to each registered Holder, with a copy to the Trustee and to
each Certificate Holder, stating: (i) that a Change of Control has occurred and
that such Holder has the right to require the Issuer pursuant to this Section
3.4 to purchase such Holder's Securities at a purchase price in cash equal to
101% of the principal amount thereof plus accrued and unpaid interest, if any,
to the date of purchase (subject to the right of Holders of record on a record
date to receive interest on the relevant interest payment date) (the "Change of
Control Payment"); (ii) the repurchase date (which shall be no earlier than 30
days nor later than 60 days from the date such notice is mailed) (the "Change of

<PAGE>

                                                                              25

Control Payment Date"); and (iii) the procedures determined by the Issuer,
consistent with this Indenture, that a Holder must follow in order to have its
Securities repurchased.

               On the Change of Control Payment Date, the Issuer will, to the
extent lawful, (i) accept for payment all Securities or portions of Securities
(in integral multiples of $1,000) 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 the Securities or portions of Securities so
tendered; and (iii) deliver or cause to be delivered to the Trustee the
Securities so accepted together with an Officers' Certificate stating the
aggregate principal amount of Securities or portions of Securities being
purchased by the Issuer. The Paying Agent will promptly mail to each Holder of
the Securities so tendered the Change of Control Payment for such Securities,
and the Trustee will promptly authenticate and mail (or cause to be transferred
by book entry) to each Holder a new Security equal in principal amount to any
unpurchased portion of the Securities surrendered, if any; provided that each
such new Security will be in a principal amount of $1,000 or an integral
multiple of $1,000.

               If the Change of Control Payment Date is on or after an interest
record date and on or before the related interest payment date, any accrued and
unpaid interest, if any, will be paid to the Person in whose name a Security is
registered at the close of business on such record date, and no additional
interest will be payable to Holders who tender pursuant to the Change of Control
Offer.

               The Issuer will not be required to make a Change of Control Offer
upon a Change of Control 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 Indenture applicable to a Change of Control Offer made by the
Issuer and purchases all Securities validly tendered and not withdrawn under
such Change of Control Offer.

               The Issuer will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section 3.4. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Indenture, the Issuer will comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations described in this Indenture by virtue of its
compliance with applicable law.

               SECTION 3.5. Protection of Collateral. The Issuer will from time
to time execute and deliver all amendments hereto and all such financing
statements, continuation statements, instruments of further assurance and other
instruments, and will take such other action reasonably necessary or advisable
to:

        (1)    grant more effectively the security interest in all or any
               portion of the Collateral;

        (2)    maintain or preserve the Lien of this Indenture (and the priority
               thereof) or carry out more effectively the purposes hereof;

        (3)    perfect, publish notice of, or protect the validity of the
               security interest in the Collateral created pursuant to the
               Operative Agreements;
<PAGE>

                                                                              26

        (4)    enforce any of the items of the Collateral;

        (5)    preserve and defend its right, title and interest to the
               Collateral and the rights of the Trustee in such Collateral
               against the claims of all Persons (other than the Holders or any
               Person claiming through the Holders), including any claims that
               any Unit of Equipment is a fixture; or

        (6)    pay any and all taxes levied or assessed upon all or any part of
               the Collateral.

               SECTION 3.6. Negative Covenants Regarding Collateral. The Issuer
will not, without, the prior written consent of the Trustee (acting at the
direction of the Required Holders)

               (a) except as otherwise permitted by this Indenture, take or fail
to take, any action, and will use its reasonable best efforts not to permit any
action to be taken by others, which would release any Person from any of such
Person's covenants or obligations under any agreement or instrument included in
the Collateral, or which would result in the amendment, hypothecation,
subordination, termination or discharge or, or impair the validity or the
effectiveness of, any such agreement or instrument. In furtherance of the
effectiveness of the foregoing, the Issuer will not amend, modify or terminate
the Lease and/or the Security Agreement or grant any waiver or consent from
compliance with the express terms thereof;

               (b) (i) permit the validity or effectiveness of this Indenture to
be impaired, (ii) permit the Lien of any Security Document to be subordinated,
terminated or discharged, except as permitted in accordance with the terms of
Article VIII or Section 11.1 hereof, or (iii) permit any Person to be released
from any covenants or obligations with respect to such Collateral, except as may
be expressly permitted by the Operative Agreements.

               SECTION 3.7. Non-Consolidation of the Issuer. The Issuer shall be
operated in such a manner that it shall not be substantively consolidated with
the trust estate of any other Person in the event of the bankruptcy or
insolvency of the Issuer or such other Person. Without limiting the foregoing,
the Issuer shall (a) conduct its business in its own name, (b) maintain its
books and records separately from those of any other Person, (c) maintain its
bank accounts separately from those of any other Person, (d) maintain separate
financial statements, showing its assets and liabilities separate and apart from
those of any other Person, (e) pay its own liabilities and expenses only out of
its own funds, (f) enter into a transaction with an Affiliate only if such
transaction is commercially reasonably and on the same terms as would be
available in an arms' length transaction with a Person that is not an Affiliate,
(g) allocate fairly and reasonably any overhead expenses that are shared with an
Affiliate, (h) hold itself out as a separate entity, (i) maintain adequate
capital in light of its contemplated business operations and (i) observe all
other appropriate trust and other organizational formalities.

               SECTION 3.8. No Bankruptcy Petition. The Issuer shall not (a)
commence any insolvency proceeding seeking to have an order for relief entered
with respect to it, or seeking reorganization, arrangement, adjustment, wind-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, (b) seek appointment of a receiver, trustee, custodian or other similar
official for it or any part of its assets, (c) make a general assignment for the
benefit of
<PAGE>

                                                                              27

creditors, or (d) take any action in furtherance of, or consenting or
acquiescing in, any of the foregoing.

               SECTION 3.9. Limitation on Liens; Fixtures. The Issuer shall not
(i) directly or indirectly create, Incur or suffer to exist any Lien (other than
Permitted Liens) on any of its property or assets, including the Collateral, or
any part thereof or any interest therein or the proceeds thereof; (ii) permit
the Lien of the Security Documents not to constitute a valid first priority
perfected security interest in the Collateral or (iii) permit any Equipment to
be considered a fixture under applicable local law. The Issuer shall duly pay
and discharge (i) immediately upon the attachment thereof, all Liens (other than
Permitted Liens) on any Collateral, (ii) as and when due, all of its
Indebtedness and other obligations before the time that any Lien attaches unless
and only to the extent that any such amounts are not yet due and payable or the
validity thereof is being contested in good faith by appropriate proceedings so
long as such proceedings do not involve any danger of the sale, forfeiture or
loss of the items of Equipment or any interest therein and the Issuer maintains
or causes Hanover and the Lessee to maintain appropriate reserves with respect
thereto or has made adequate provision for the payment thereof, in accordance
with GAAP and approved by the Administrative Agent and (iii) all taxes imposed
upon or against it or its property or assets, or upon any property leased by it,
prior to the date on which penalties attach thereto.

               SECTION 3.10. Other Indebtedness. The Issuer shall not contract
for, create, Incur, assume or suffer to exist any Indebtedness other than (i)
the Securities issued pursuant to this Indenture, (ii) any fees and all other
amounts payable pursuant to the provisions of the Participation Agreement, and
(iii) trade payables and expense accruals Incurred in the ordinary course of
business and which are incidental to the purposes permitted pursuant to the
Trust Agreement.

               SECTION 3.11. Guarantees, Loans, Advances and Other Obligations.
The Issuer will not make any loan, advance or credit to, or guarantee (directly
or indirectly or by an instrument having the effect of assuring another's
payment or performance on any obligation or capability of so doing, or
otherwise), endorse (except for the endorsement of checks for collection or
deposit) or otherwise become contingently liable, directly or indirectly, in
connection with the obligations, stock or dividends of, or own, purchase,
repurchase or acquire (or agree contingently to do so) any stock, obligations or
securities of, or any other interest in, or make any capital contribution to,
any other Person.

               SECTION 3.12. Consolidation, Merger and Sale of Assets. The
Issuer shall not consolidate with or merge with or into any other Person or
sell, convey, transfer or lease any of its assets (including the Collateral),
whether in a single transaction or a series of related transactions, to any
Person, except for (i) any such sale, conveyance or transfer contemplated in
this Indenture or the Operative Agreements and (ii) any lease of Equipment in
accordance with the terms of the Lease.

               SECTION 3.13. Capital Expenditures. The Issuer will not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(both realty and personalty), except for (a) acquisition of additional Equipment
from the Lessee pursuant to the Bill of Sale or
<PAGE>

                                                                              28

(b) overhaul expenses or capital improvements to the Equipment made in the
ordinary course of business and in accordance with the terms of the
Participation Agreement.

               SECTION 3.14. Payments of Collateral. In the event that the
Issuer receives from any Person any payments with respect to the Collateral (to
the extent such Collateral has not been released from the Lien of the Security
Documents in accordance with Section 11.1 hereof), the Issuer shall receive such
payment in trust for the Trustee and subject to the Trustee's security interest
and shall immediately deposit such payment in the Account.

               SECTION 3.15. No Subsidiaries. The Issuer shall not create any
Subsidiaries.

               SECTION 3.16. Investments. The Issuer shall not make or permit to
exist any Investment in any Person.

               SECTION 3.17. Use of Proceeds. The Issuer shall use the proceeds
of the Securities solely to finance the Issuer's acquisition of Equipment and
related Collateral in accordance with the terms of the Operative Agreements and
for costs related to such transactions. The Issuer shall not permit any proceeds
of the Securities to be used, either directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of "purchasing or carrying any margin
stock" within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System, as amended from time to time, and shall furnish each
Holder, upon such Holder's request, a statement in conformity with the
requirements of Regulation U.

               SECTION 3.18. Impairment of Security Interest. The Issuer shall
not take or omit to take any action, which action or omission might or would
have the result of affecting or impairing the security interest in favor of the
Trustee on behalf of the Holders with respect to the Collateral, and the Issuer
shall not grant to any Person (other than the Trustee on behalf of the Holders)
any interest whatsoever in the Collateral, except, in either case, as expressly
permitted by the terms of the Security Agreement.

               SECTION 3.19. Compliance with Operative Agreements. The Issuer
shall at all times (a) observe and perform all covenants, conditions and
obligations required to be performed by it under each Operative Agreement to
which it is a party and (b) observe and perform, or cause to be observed and
performed all the covenants, conditions and obligations of the Lessee under the
Lease, even in the event the Lease is terminated at its stated expiration,
following a Lease Event of Default or otherwise. The Issuer shall not enter
into, or be a party to, any transaction with any Person, except the transactions
set forth in this Indenture, the Participation Agreement or the Lease, as
applicable, and as expressly permitted thereby.

               SECTION 3.20. Compliance with Laws. The Issuer shall comply with
all applicable statutes, rules, regulations, orders and restrictions of the
United States of America, all states and municipalities thereof and of any
governmental department, commission, board, regulatory authority, bureau, agency
and instrumentality of the foregoing, in respect of the conduct of its business
and the ownership of its property. The Issuer shall promptly take, and maintain
the effectiveness of, all action to effectuate the Participation Agreement, this
Indenture or the Lease, as applicable, or otherwise that may, from time to time,
be necessary or appropriate under applicable law in connection with the
performance by the Issuer of its obligations under
<PAGE>

                                                                              29

the Participation Agreement, this Indenture or the Lease, as applicable, or the
taking of any action hereby or thereby contemplated, or necessary for the
legality, validity, binding effect or enforceability of the Participation
Agreement, this Indenture or the Lease, as applicable, or for the making of any
payment or transfer or remittance of any funds by the Issuer under the
Participation Agreement, this Indenture or the Lease, as applicable.

               SECTION 3.21. Maintenance of Office or Agency. The Issuer will
maintain in Wilmington, Delaware, an office or agency where the Securities may
be presented or surrendered for payment, where, if applicable, the Securities
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Issuer in respect of the Securities and this
Indenture may be served. The principal corporate trust office of the Trustee, or
if the Trustee's principal corporate trust office is not located in Wilmington,
Delaware, any other office or agency maintained by the Trustee in Wilmington,
Delaware (the "Corporate Trust Office"), shall be such office or agency of the
Issuer, unless the Issuer shall designate and maintain some other office or
agency for one or more of such purposes. The Issuer will give prompt written
notice to the Trustee of any change in the location of any such office or
agency. If at any time the Issuer 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, and the Issuer hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.

               The Issuer may also from time to time designate one or more other
offices or agencies (in or outside of Wilmington, Delaware) where the Securities
may be presented or surrendered for any or all such purposes and may from time
to time rescind any such designation; provided, however, that no such
designation or rescission shall in any manner relieve the Issuer of its
obligation to maintain an office or agency in Wilmington, Delaware for such
purposes. The Issuer will give prompt written notice to the Trustee of any such
designation or rescission and any change in the location of any such other
office or agency.

               SECTION 3.22. Limitations on Lines of Business; Existence. The
Issuer will not enter into any business other than the maintenance of its
existence, the acquisition, leasing, financing and sale of the Equipment and the
taking of such actions as are required to comply with the other covenants of the
Issuer under the Operative Agreements and the Exchange and Registration Rights
Agreement. The Issuer will do or cause to be done all things necessary to
preserve and keep in full force and effect its existence, rights (both under the
certificate of trust of the Issuer and by statute) and franchises.

               SECTION 3.23. Payment of Taxes and Other Claims. The Issuer will
pay or discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all material taxes, assessments and governmental charges levied
or imposed upon the Issuer or upon the income, profits or property of the Issuer
and (ii) all lawful claims for labor, materials and supplies, which, if unpaid,
might by law become a material liability or lien upon the property of the
Issuer; provided, however, that the Issuer shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings and for which appropriate reserves, if necessary (in
the good faith judgment of management of the Issuer), are being
<PAGE>

                                                                              30

maintained in accordance with GAAP or where the failure to effect such payment
will not be disadvantageous to the Holders.

               SECTION 3.24. Payments for Consent. The Issuer will not, directly
or indirectly, pay or cause to be paid any consideration, whether by way of
interest, fees or otherwise, to any Holder of any Securities for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Securities unless such consideration is offered to be
paid or is paid to all Holders of the Securities that consent, waive or agree to
amend in the time frame set forth in the solicitation documents relating to such
consent, waiver or amendment.

               SECTION 3.25. Compliance Certificate. The Issuer shall deliver to
the Trustee within 120 days after the end of each Fiscal Year of the Issuer an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Issuer they would normally have
knowledge of any Default or Event of Default and whether or not the signers know
of any Default or Event of Default that occurred during such period. If they do,
the certificate shall describe the Default or Event of Default, its status and
what action the Issuer is taking or proposes to take with respect thereto. The
Issuer also shall comply with TIA (S) 314(a)(4).

               SECTION 3.26. Further Instruments and Acts. Upon request of the
Trustee, the Issuer will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture and the Operative Agreements.

               SECTION 3.27. Statement by Officers as to Default. The Issuer
shall deliver to the Trustee, as soon as possible and in any event within five
days after the Issuer becomes aware of the occurrence of any Event of Default or
an event which, with notice or the lapse of time or both, would constitute an
Event of Default, an Officers' Certificate setting forth the details of such
Event of Default or default and the action which the Issuer proposes to take
with respect thereto.

                                   ARTICLE IV

                       Covenants of the Hanover Guarantors
                       -----------------------------------

               Each of the Hanover Guarantors hereby agrees that so long as this
Indenture is in effect, such guarantor shall comply with the covenants set forth
in Section 9 of the Participation Agreement in the form attached hereto as Annex
A.

                                   ARTICLE V

                            Redemption of Securities
                            ------------------------

               SECTION 5.1. Optional Redemption. (a) The Issuer may redeem all
or, from time to time, a part, of the Securities subject to the conditions and
at the redemption prices
<PAGE>

                                                                              31

specified in the form of Securities set forth in Exhibits A and B hereto, which
are hereby incorporated by reference and made a part of this Indenture, together
with accrued and unpaid interest to the Redemption Date. Payments pursuant to
any such redemption shall be applied in accordance with the provisions of
Section 8.4(b)(9).

               (b) The Issuer shall only be permitted to redeem the Securities
pursuant to Section 5.1(a) if simultaneously with such prepayment the Issuer
distributes to the Certificate Holders an amount equal to the proportionate
Certificate Holder Contribution, together with accrued Certificate Holder Yield
thereon. Such payments shall be made to the Issuer to be distributed in
accordance with the terms of the Trust Agreement.

               SECTION 5.2. Applicability of Article. Redemption of Securities
at the election of the Issuer or otherwise, as permitted or required by any
provision of this Indenture, shall be made in accordance with such provision and
this Article.

               SECTION 5.3. Election to Redeem; Notice to Trustee. The election
of the Issuer to redeem any Securities pursuant to Section 5.1 shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Issuer, the Issuer shall, upon not later than the earlier of the date that
is 30 (or 10, in the case of a Special Redemption (as defined in Exhibit A)),
days prior to the Redemption Date fixed by the Issuer or the date on which
notice is given to the Holders (except as provided in Section 5.5 or unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Securities to be redeemed and
shall deliver to the Trustee such documentation and records as shall enable the
Trustee to select the Securities to be redeemed pursuant to Section 5.4.

               SECTION 5.4. Selection by Trustee of Securities to Be Redeemed.
In the case of any partial redemption, the Trustee will select the Securities
for redemption in compliance with the requirements of the principal national
securities exchange, if any, on which the Securities are listed or, if the
Securities are not listed, then on a pro rata basis, by lot or by such other
method as the Trustee in its sole discretion will deem to be fair and
appropriate, although no Security of $1,000 in original principal amount or less
will be redeemed in part. If any Security is to be redeemed in part only, the
notice of redemption relating to that Security will state the portion of the
principal amount thereof to be redeemed. A new Security in principal amount
equal to the unredeemed portion thereof will be issued in the name of the holder
thereof upon cancellation of the original Security.

               The Trustee shall promptly notify the Issuer in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.

               For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Securities shall relate, in
the case of any Security redeemed or to be redeemed only in part, to the portion
of the principal amount of such Security which has been or is to be redeemed.

               SECTION 5.5. Notice of Redemption. Notice of redemption shall be
given in the manner provided for in Section 10.2 not less than 30 (or 10, in the
case of a Special
<PAGE>

                                                                              32

Redemption (as defined in Exhibit A)) nor more than 60 days prior to the
Redemption Date, to each Holder of Securities to be redeemed. The Trustee shall
give notice of redemption in the Issuer's name and at the Issuer's expense;
provided, however, that the Issuer shall deliver to the Trustee, at least 45 (or
15, in the case of a Special Redemption (as defined in Exhibit A)) 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 following items.

               All notices of redemption shall state:

               (1) the Redemption Date,

               (2) the redemption price and the amount of accrued interest to
         the Redemption Date payable as provided in Section 5.7, if any,

               (3) if less than all outstanding Securities are to be redeemed,
         the identification of the particular Securities (or portion thereof) to
         be redeemed, as well as the aggregate principal amount of Securities to
         be redeemed and the aggregate principal amount of Securities to be
         outstanding after such partial redemption,

               (4) in case any Security is to be redeemed in part only, the
         notice which relates to such Security shall state that on and after the
         Redemption Date, upon surrender of such Security, the Holder will
         receive, without charge, a new Security or Securities of authorized
         denominations for the principal amount thereof remaining unredeemed,

               (5) that on the Redemption Date the redemption price (and accrued
         interest, if any, to the Redemption Date payable as provided in Section
         5.7) will become due and payable upon each such Security, or the
         portion thereof, to be redeemed, and, unless the Issuer defaults in
         making the redemption payment, that interest on Securities called for
         redemption (or the portion thereof) will cease to accrue on and after
         said date,

               (6) the place or places where such Securities are to be
         surrendered for payment of the Redemption Price and accrued interest,
         if any,

               (7) the name and address of the Paying Agent,

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

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

               (10) the paragraph of the Securities pursuant to which the
         Securities are to be redeemed.

               SECTION 5.6. Deposit of Redemption Price. Prior to any Redemption
Date, the Issuer shall deposit with the Trustee or with a Paying Agent (or, if
the Issuer is acting as its own
<PAGE>

                                                                              33

Paying Agent, segregate and hold in trust as provided in Section 2.4) an amount
of money sufficient to pay the redemption price of, and accrued interest on, all
the Securities which are to be redeemed on that date.

               SECTION 5.7. Securities Payable on Redemption Date. Notice of
redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the Redemption Date, become due and payable at the redemption price
therein specified (together with accrued interest, if any, to the Redemption
Date), and from and after such date (unless the Issuer shall default in the
payment of the Redemption Price and accrued interest) such Securities shall
cease to bear interest. Upon surrender of any such Security for redemption in
accordance with said notice, such Security shall be paid by the Issuer at the
redemption price, together with accrued interest, if any, to the Redemption Date
(subject to the rights of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date).

               If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Securities.

               SECTION 5.8. Securities Redeemed in Part. Any Security which is
to be redeemed only in part (pursuant to the provisions of this Article) shall
be surrendered at the office or agency of the Issuer maintained for such purpose
pursuant to Section 3.10 (with, if the Issuer or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Issuer and the Trustee duly executed by, the Holder thereof or such Holder's
attorney duly authorized in writing), and the Issuer shall execute, and the
Trustee shall authenticate and make available for delivery to the Holder of such
Security at the expense of the Issuer, a new Security or Securities, of any
authorized denomination as requested by such Holder, in an aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered, provided that each such new Security will be in a
principal amount of $1,000 or integral multiple thereof.

                                   ARTICLE VI

                              Defaults and Remedies
                              ---------------------

               SECTION 6.1. Events of Default. An "Event of Default" occurs if:

               (1) the Issuer defaults in any payment of interest or additional
interest (as required by the Exchange and Registration Rights Agreement) on any
Security when due continued for 30 days;

               (2) the Issuer defaults in the payment of the principal or
premium, if any, of any Security when due at its Stated Maturity, upon optional
redemption, upon required repurchase, upon declaration or otherwise;

               (3) Hanover or any Hanover Guarantor fails to comply with its
obligations under (i) Section 9.10 of the Participation Agreement or (ii), prior
to the execution and delivery
<PAGE>

                                                                              34

         of the Participation Agreement, Article IV hereof, which default shall
         continue unremedied for a period of 30 days after receipt of notice
         thereof;

               (4) (A) the Issuer fails to comply with any of Sections 3.2
through 3.27 inclusive (in each case other than a failure to repurchase
Securities when required pursuant to Section 3.3 or 3.4, which failure shall
constitute an Event of Default under Section 6.1(2)) and (B) such failure
continues for 30 days after the notice specified below (with such notice only
given after the expiry of the periods permitted to perform an obligation);

               (5) the Issuer defaults in the performance of or a breach by the
Issuer of any other covenant or agreement in this Indenture or under the
Securities (other than those referred to in (1), (2), (3) or (4) above) or any
covenant, representation or warranty under the Lease, the Participation
Agreement or any other Operative Agreement, or contained in any document
delivered pursuant to any of the foregoing (in each case other than a covenant,
representation or warranty a default in whose performance or whose breach is
elsewhere in this Section specifically dealt with) and such default continues
for 60 days after the notice specified below (with such notice only given after
the expiry of the periods permitted to perform an obligation);

               (6) the occurrence and continuation of a Lease Event of Default;

               (7) the Operative Agreements no longer create a first priority
lien on all the Collateral for the benefit of the Trustee, in its capacity as
Collateral Agent (subject to Permitted Exceptions);

               (8) there is a 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 Hanover or any of its
Restricted Subsidiaries (or the payment of which is guaranteed by Hanover or any
of its Restricted Subsidiaries), other than Indebtedness owed to Hanover or a
Restricted Subsidiary, whether such Indebtedness or guarantee now exists, or is
created after the date of this Indenture, which default (a) 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 ("Payment Default") or (b) results in the acceleration of such
Indebtedness prior to its maturity (the "cross acceleration provision") 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
$20.0 million or more;

               (9) (A) the Issuer, Hanover or any Significant Subsidiary or a
group of Restricted Subsidiaries that, taken together (as of the latest audited
consolidated financial statements for Hanover and its Restricted Subsidiaries),
would constitute a Significant Subsidiary, pursuant to or within the meaning of
any Bankruptcy Law (as defined below):

               (i) commences a voluntary case;

               (ii) consents to the entry of an order for relief against it in
         an involuntary case;

               (iii) consents to the appointment of a Custodian (as defined
         below) of it or for any substantial part of its property; or
<PAGE>

                                                                              35

               (iv) makes a general assignment for the benefit of its creditors;
         or takes any comparable action under any foreign laws relating to
         insolvency;

               (B) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:

               (i) is for relief against the Issuer, Hanover or any Significant
         Subsidiary or any group of Restricted Subsidiaries that, taken together
         (as of the latest audited consolidated financial statements for Hanover
         and its Restricted Subsidiaries) would constitute a Significant
         Subsidiary in an involuntary case;

               (ii) appoints a Custodian of the Issuer, Hanover or any
         Significant Subsidiary or any group of Restricted Subsidiaries that,
         taken together (as of the latest audited consolidated financial
         statements for Hanover and its Restricted Subsidiaries) would
         constitute a Significant Subsidiary or for any substantial part of
         their property; or

               (iii) orders the winding up or liquidation of the Issuer, Hanover
         or any Significant Subsidiary or any group of Restricted Subsidiaries
         that, taken together (as of the latest audited consolidated financial
         statements for Hanover and its Restricted Subsidiaries) would
         constitute a Significant Subsidiary;

or any similar relief is granted under any foreign laws and the order, decree or
relief remains unstayed and in effect for 60 days;

               (10) failure by the Issuer, Hanover or any of its Restricted
Subsidiaries to pay final judgments aggregating in excess of $20.0 million or
its foreign currency equivalent at the time (net of any amounts with respect to
which a reputable and creditworthy insurance company has acknowledged liability
in writing), which judgments are not paid, discharged or stayed for a period of
60 days (the "Judgment Default Provision"); or

               (11) any respective Guarantee of any of the Hanover Guarantors
ceases to be in full force and effect (except as contemplated by the terms of
this Indenture and the Participation Agreement), or is declared in a judicial
proceeding to be null and void, or any Hanover Guarantor denies or disaffirms
its obligations under the terms of this Indenture, the Participation Agreement
or its Hanover Guarantee.

               The foregoing will constitute Events of Default whatever the
reason for any such Event of Default and whether it is voluntary or involuntary
or is effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body.

               The term "Bankruptcy Law" means Title 11, United States Code, or
any similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.

               Notwithstanding the foregoing, a Default under clause (4) or (5)
of this Section 6.1 will not constitute an Event of Default until the Trustee or
the Holders of at least 25% in principal amount of the outstanding Securities
notify the Issuer of the Default and the Issuer does
<PAGE>

                                                                              36

not cure such Default within the time specified in said clause (4) or (5) after
receipt of such notice. Such notice must specify the Default, demand that it be
remedied and state that such notice is a "Notice of Default".

               The Issuer shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Default or Event of Default under clauses (3), (4), (5), (6), (7), (8), (9),
(10) or (11) of this Section 6.1, which such notice shall contain the status
thereof and a description of the action being taken or proposed to be taken by
the Issuer in respect thereof.

               SECTION 6.2. Acceleration. If an Event of Default (other than an
Event of Default specified in Section 6.1(9)) occurs and is continuing, the
Trustee by notice to the Issuer, or the Holders of at least 25% in principal
amount of the outstanding Securities by notice to the Issuer and the Trustee,
may, and the Trustee at the request of such Holders shall, declare the principal
of, premium, if any, and accrued and unpaid interest, on all the Securities to
be due and payable; provided, however, that so long as any Bank Indebtedness
remains outstanding, no such acceleration shall be effective until the earlier
of (i) two business days after delivery of written notice to Hanover, the Lessee
and the Representative under such Bank Indebtedness and (ii) the day on which
any Bank Indebtedness is accelerated. Upon such a declaration, such principal,
premium, if any, and accrued and unpaid interest will be due and payable
immediately. In the event of a declaration of acceleration because an Event of
Default set forth in Section 6.1(8) above has occurred and is continuing, the
declaration of acceleration shall be automatically annulled if the event of
default or payment default triggering such Event of Default pursuant to Section
6.1(8) shall be remedied or cured by Hanover or a Restricted Subsidiary of
Hanover or waived by the holders of the relevant Indebtedness within 20 days
after the declaration of acceleration with respect thereto and if (i) the
annulment of the acceleration of the Securities would not conflict with any
judgment or decree of a court of competent jurisdiction and (ii) all existing
Events of Default, except nonpayment of principal, premium or interest on the
Securities that became due solely because of such acceleration, have been cured
or waived. If an Event of Default described in Section 6.1(9) occurs and is
continuing, the principal of, premium, if any, and accrued and unpaid interest
on all the Securities will become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holders. No such
rescission shall affect any subsequent Default or Event of Default or impair any
right consequent thereto.

               SECTION 6.3. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of (or premium, if any) or interest on the Securities or to enforce
the performance of any provision of the Securities or this Indenture.

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

                                                                              37

               SECTION 6.4. Waiver of Past Defaults. The Holders of a majority
in principal amount of the outstanding Securities by notice to the Trustee may
(a) waive, by their consent (including, without limitation consents obtained in
connection with a purchase of, or tender offer or exchange offer for,
Securities), an existing Default or Event of Default and its consequences except
(i) a Default or Event of Default in the payment of the principal of, or
premium, if any, or interest on a Security or (ii) a Default or Event of Default
in respect of a provision that under Section 9.2 cannot be amended without the
consent of each Securityholder affected and (b) rescind any such acceleration
with respect to the Securities and its consequences if (1) rescission would not
conflict with any judgment or decree of a court of competent jurisdiction and
(2) all existing Events of Default, other than the nonpayment of the principal
of, premium, if any, and interest on the Securities that have become due solely
by such declaration of acceleration, have been cured or waived. When a Default
or Event of Default is waived, it is deemed cured, but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
consequent right.

               SECTION 6.5. Control by Majority. The Holders of a majority in
principal amount of the outstanding Securities may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. This Indenture provides
that in the event an Event of Default has occurred and is continuing, the
Trustee will be required in the exercise of its powers to use the degree of care
that a prudent person would use in the conduct of its own affairs. However, the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture or, subject to Sections 7.1 and 7.2, that the Trustee determines is
unduly prejudicial to the rights of other Securityholders or would involve the
Trustee in personal liability; provided, however, that the Trustee may take any
other action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be entitled
to indemnification satisfactory to it in its sole discretion against all losses
and expenses caused by taking or not taking such action.

               SECTION 6.6. Limitation on Suits. Subject to the provisions of
this Indenture relating to the duties of the Trustee, if an Event of Default
occurs and is continuing, the Trustee will be under no obligation to exercise
any of the rights or powers under this Indenture at the request or direction of
any of the holders unless such holders have offered to the Trustee reasonable
indemnity or security against any loss, liability or expense. Except to enforce
the right to receive payment of principal, premium, if any, or interest when
due, no holder may pursue any remedy with respect to the Indenture or the
Securities unless:

               (1) such Holder has previously given to the Trustee written
         notice stating that an Event of Default is continuing;

               (2) Holders of at least 25% in outstanding principal amount of
         the Securities have requested the Trustee to pursue the remedy;

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

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

                                                                              38

               (5) the Holders of a majority in principal amount of the
         outstanding Securities have not given the Trustee a direction that, in
         the opinion of the Trustee, is inconsistent with such request within
         such 60-day period.

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

               SECTION 6.7. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture (including, without
limitation, Section 6.6), the right of any Holder to receive payment of
principal of, premium (if any) or interest on the Securities held by such
Holder, on or after the respective due dates expressed in the Securities, 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 6.8. Collection Suit by Trustee. If an Event of Default
specified in Section 6.1(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Issuer for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
7.7.

               SECTION 6.9. Trustee May File Proofs of Claim. The Trustee may
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 and the Securityholders
allowed in any judicial proceedings relative to the Issuer or its creditors or
properties and, unless prohibited by law or applicable regulations, may vote on
behalf of the Holders in any election of a trustee in bankruptcy or other Person
performing similar functions, and any Custodian in any such judicial proceeding
is hereby authorized by each Holder to make 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 it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel, and any other amounts due the Trustee under Section 7.7.

               SECTION 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article VI, it shall pay out the money or property in
the following order:

               FIRST: to the Trustee for amounts due under Section 7.7;

               SECOND: to Securityholders for amounts due and unpaid on the
         Securities for principal, premium, if any, and interest, ratably,
         without preference or priority of any kind, according to the amounts
         due and payable on the Securities for principal and interest,
         respectively; and

               THIRD: to the Issuer for distribution as provided for in the
         Trust Agreement.
<PAGE>

                                                                              39

               The Trustee may fix a record date and payment date for any
payment to Securityholders pursuant to this Section. At least 15 days before
such record date, the Issuer shall mail to each Securityholder and the Trustee a
notice that states the record date, the payment date and amount to be paid.

               SECTION 6.11. Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant 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, 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 the Issuer, a suit by a Holder pursuant to
Section 6.7 or a suit by Holders of more than 10% in outstanding principal
amount of the Securities.

               SECTION 6.12. Additional Payments. In the case of any Event of
Default occurring by reason of any willful action (or inaction) taken (or not
taken) by or on behalf of the Issuer with the intention of avoiding payment of
the premium that the Issuer would have had to pay if the Issuer then had elected
to redeem the Securities pursuant to the optional redemption provisions of this
Indenture or was required to repurchase the Securities, an equivalent premium
shall also become and be immediately due and payable to the extent permitted by
law upon the acceleration of the Securities. If an Event of Default occurs prior
to September 1, 2005 by reason of any willful action (or inaction) taken (or not
taken) by or on behalf of the Issuer with the intention of avoiding the
prohibition on redemption of the Securities prior to September 1, 2005, the
premium specified in this Indenture for optional redemptions occurring in the
twelve-month period beginning September 1, 2005 shall also become immediately
due and payable to the extent permitted by law upon the acceleration of the
Securities.

               SECTION 6.13. Certain Remedial Matters. Notwithstanding any other
provision of this Indenture or any other Operative Agreement:

               (i) the Issuer shall at all times, to the exclusion of the
Collateral Agent, retain (A) all rights to Excepted Payments and to demand,
collect or commence an action at law to obtain such payments and to enforce any
judgment with respect thereto and (B) all of its rights under the Participation
Agreement; and

               (ii) the Issuer shall at all times retain the right, but not to
the exclusion of the Collateral Agent, (A) to receive from the Lessee all
notices, certificates and other documents and all information that the Lessee is
permitted or required to give or furnish to the "Lessor" pursuant to the Lease,
the Participation Agreement or any other Operative Document, (B) to inspect the
Equipment, (C) to retain all rights with respect to insurance that Section 14 of
the Lease specifically confers upon the "Lessor", (D) to provide such insurance
as the Lessee shall have failed to maintain or as the Issuer may desire and (E)
to enforce compliance by the Lessee with the provisions of Sections 8, 9, 10, 11
and 14 of the Lease.
<PAGE>

                                                                              40

                                  ARTICLE VII

                                     Trustee
                                     -------

               SECTION 7.1. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs; provided that if an Event of
Default occurs and is continuing, the Trustee will be under no obligation to
exercise any of the rights or powers under this Indenture at the request or
direction of any of the Holders unless such Holders have offered to the Trustee
reasonable indemnity or security against loss, liability or expense.

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

               (1) the Trustee undertakes to perform such duties and only such
         duties as are specifically set forth in this Indenture and no implied
         covenants or obligations shall be read into this Indenture against the
         Trustee; and

               (2) in the absence of bad faith on its part, the Trustee may
         conclusively rely, as to the truth of the statements and the
         correctness of the opinions expressed therein, upon certificates or
         opinions furnished to the Trustee and conforming to the requirements of
         this Indenture. However, in the case of any such certificates or
         opinions which by any provisions hereof are specifically required to be
         furnished to the Trustee, the Trustee shall examine such certificates
         and opinions to determine whether or not they conform on their face to
         the requirements of this Indenture (but need not confirm or investigate
         the accuracy of mathematical calculations or other facts stated
         therein).

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

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

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

               (3) the Trustee shall not be liable with respect to any action it
         takes or omits to take in good faith in accordance with a direction
         received by it pursuant to Section 6.5.

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

               (c)    The Trustee shall not be liable for interest on any money
                      received by it except as the Trustee may agree in writing
                      with the Issuer.
<PAGE>

                                                                              41

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

               (e)    No provision of this Indenture shall require the Trustee
                      to expend or risk its own funds or otherwise incur
                      financial liability in the performance of any of its
                      duties hereunder or in the exercise of any of its rights
                      or powers, if it shall have reasonable grounds to believe
                      that repayment of such funds or adequate indemnity against
                      such risk or liability is not reasonably assured to it.

               (f)    Every provision of this Indenture relating to the conduct
                      or affecting the liability of or affording protection to
                      the Trustee shall be subject to the provisions of this
                      Section and to the provisions of the TIA.

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

               (h)    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 reasonable
                      security or indemnity satisfactory to it against the
                      costs, expenses (including reasonable attorneys' fees and
                      expenses) and liabilities that might be incurred by it in
                      compliance with such request or direction.

               SECTION 7.2. Rights of Trustee. Subject to Section 7.1, (a) The
Trustee may conclusively rely on any document (whether in its original or
facsimile form) reasonably believed by it to be genuine and to have been signed
or presented by the proper person. The Trustee need not investigate any fact or
matter stated in the document.

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

                      (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 which it believes to be authorized
         or within its rights or powers, unless the Trustee's conduct
         constitutes willful misconduct or negligence.

                      (e) The Trustee may consult with counsel of its selection,
         and the advice or opinion of counsel with respect to legal matters
         relating to this Indenture and the Securities shall be full and
         complete authorization and protection from liability in respect to any
         action taken, omitted or suffered by it hereunder in good faith and in
         accordance with the advice or opinion of such counsel.
<PAGE>

                                                                              42

               SECTION 7.3. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Issuer or its Affiliates with the same rights it
would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar or
co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.

               SECTION 7.4. 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 Securities, it shall not be accountable for the Issuer's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Issuer in this Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication.

               SECTION 7.5. Notice of Defaults. If a Default or Event of Default
occurs and is continuing and if a Trust Officer has actual knowledge thereof,
the Trustee shall mail to each Securityholder 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
Security (including payments pursuant to the optional redemption or required
repurchase provisions of such Security, if any), the Trustee may withhold the
notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interests of Securityholders.

               SECTION 7.6. Reports by Trustee to Holders. As promptly as
practicable after each May 15 beginning with the May 15, following the date of
this Indenture, and in any event prior to July 15 in each year, the Trustee
shall mail to each Securityholder a brief report dated as of such May 15 that
complies with TIA ss. 313(a). The Trustee also shall comply with TIA ss. 313(b).
The Trustee shall also transmit by mail all reports required by TIA ss. 313(c).

               A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange (if any) on
which the Securities are listed. The Issuer agrees to notify promptly the
Trustee whenever the Securities become listed on any stock exchange and of any
delisting thereof.
<PAGE>

                                                                              43

               SECTION 7.7. Compensation and Indemnity. The Issuer shall pay to
the Trustee from time to time reasonable compensation for its acceptance of this
Indenture and services hereunder as the Issuer and the Trustee shall from time
to time agree in writing. The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Issuer shall reimburse
the Trustee upon request for all reasonable out-of-pocket expenses incurred or
made by it, including costs of collection, costs of preparing and reviewing
reports, certificates and other documents, costs of preparation and mailing of
notices to Securityholders and reasonable costs of counsel retained by the
Trustee in connection with the delivery of an Opinion of Counsel or otherwise,
in addition to the compensation for its services. Such expenses shall include
the reasonable compensation and expenses, disbursements and advances of the
Trustee's agents, counsel, accountants and experts. The Issuer shall indemnify
the Trustee against any and all loss, liability, damages, claims or expense
(including reasonable attorneys' fees and expenses) incurred by it without
negligence or willful misconduct on its part in connection with the
administration of this trust and the performance of its duties hereunder,
including the costs and expenses of enforcing this Indenture (including this
Section 7.7) and of defending itself against any claims (whether asserted by any
Securityholder, the Issuer or otherwise). The Trustee shall notify the Issuer
promptly of any claim for which it may seek indemnity. Failure by the Trustee to
so notify the Issuer shall not relieve the Issuer of its obligations hereunder.
The Issuer shall defend the claim and the Trustee may have separate counsel and
the Issuer shall pay the fees and expenses of such counsel provided that the
Issuer shall not be required to pay such fees and expenses if it assumes the
Trustee's defense, and, in the reasonable judgment of outside counsel to the
Trustee, there is no conflict of interest between the Issuer and the Trustee in
connection with such defense. The Issuer need not reimburse any expense or
indemnify against any loss, liability or expense incurred by the Trustee through
the Trustee's own willful misconduct or negligence.

               To secure the Issuer's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities. The Trustee's right to
receive payment of any amounts due under this Section 7.7 shall not be
subordinate to any other liability or Indebtedness of the Issuer.

               The Issuer's payment obligations pursuant to this Section shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.1(9) or (10) with respect to
the Issuer, the expenses are intended to constitute expenses of administration
under any Bankruptcy Law.

               SECTION 7.8. Replacement of Trustee. The Trustee may resign at
any time by so notifying the Issuer. The Holders of a majority in principal
amount of the Securities may remove the Trustee by so notifying the Trustee and
may appoint a successor Trustee. The Issuer shall remove the Trustee if:

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

                      (b) the Trustee is adjudged bankrupt or insolvent;
<PAGE>

                                                                              44

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

                      (d) the Trustee otherwise becomes incapable of acting.

               If the Trustee resigns or is removed by the Issuer or by the
Holders of a majority in principal amount of the Securities and such Holders do
not reasonably promptly appoint a successor Trustee, or if a vacancy exists in
the office of the Trustee for any reason (the Trustee in such event being
referred to herein as the retiring Trustee), the Issuer shall promptly appoint a
successor Trustee.

               A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuer. 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
Securityholders. The retiring Trustee shall promptly transfer all property held
by it as Trustee to the successor Trustee, subject to the lien provided for in
Section 7.7.

               If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee or the Holders
of 10% in principal amount of the Securities may petition, at the Issuer's
expense, any court of competent jurisdiction for the appointment of a successor
Trustee.

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

               Notwithstanding the replacement of the Trustee pursuant to this
Section, the Issuer's obligations under Section 7.7 shall continue for the
benefit of the retiring Trustee.

               SECTION 7.9. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.

               In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture, any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; provided that the right to adopt the certificate of
authentication of any predecessor Trustee or authenticate Securities in the name
of any predecessor Trustee shall only apply to its successor or successors by
merger, consolidation or conversion.

               SECTION 7.10. Eligibility; Disqualification. The Trustee shall at
all times satisfy the requirements of TIA (S) 310(a). The Trustee shall have a
combined capital and surplus

<PAGE>

                                                                              45

of at least $100 million as set forth in its most recent published annual report
of condition. The Trustee shall comply with TIA ss. 310(b); provided, however,
that there shall be excluded from the operation of TIA ss. 310(b)(1) any
indenture or indentures under which other securities or certificates of interest
or participation in other securities of the Issuer are outstanding if the
requirements for such exclusion set forth in TIA (S) 310(b)(1) are met.

               SECTION 7.11. Preferential Collection of Claims Against Issuer.
The Trustee shall comply with 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 (S) 311(a) to the extent indicated.

               SECTION 7.12. Trustee's Application for Instruction from the
Issuer. Any application by the Trustee for written instructions from the Issuer
may, at the option of the Trustee, set forth in writing any action proposed to
be taken or omitted by the Trustee under this Indenture and the date on and/or
after which such action shall be taken or such omission shall be effective. The
Trustee shall not be liable for any action taken by, or omission of, the Trustee
in accordance with a proposal included in such application on or after the date
specified in such application (which date shall not be less than three Business
Days after the date any officer of the Issuer actually receives such
application, unless any such officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of an omission), the Trustee shall have received written instructions
in response to such application specifying the action to be taken or omitted.

               SECTION 7.13. Proceeds of Collateral; Proceeds Remaining in
Account. All moneys (a) collected by the Trustee (and the Collateral Agent)
under the Hanover Guarantee, upon any sale or disposition of the Trust Estate
pursuant to Section 17.3 of the Lease (together with all other moneys received
by the Trustee thereunder) or pursuant to any other Operative Agreement and (b)
contained in the Account on the date of an acceleration of the Securities or on
the Stated Maturity (excluding, in the case of any application made pursuant to
this Section 7.13 on the Stated Maturity, an amount equal to the aggregate
amount of Excess Sale Proceeds or Final Rent Payment deposited in the Account on
or prior to such date, which amount shall instead be applied at the Stated
Maturity in accordance with Section 8.4(b)(4) or Section 8.4(b)(5),
respectively), or deposited in the Account thereafter, shall be applied as
follows:

               First, to the payment of (i) any and all sums advanced by the
        Trustee in order to preserve the Trust Estate or preserve its security
        interest therein and (ii) the expenses of retaking, holding, preparing
        for sale, charter or lease, selling or otherwise disposing or realizing
        on the Trust Estate, or of any exercise by the Trustee of its rights
        under the Operative Agreements, together with reasonable attorneys' fees
        and court costs;

               Second, to the payment of the amounts then due and unpaid for
        principal of and interest on the Securities, together with any
        applicable premiums with respect to the Securities and all other amounts
        then due the Holders under the Operative Agreements, ratably to all the
        Holders according to the amounts due and payable on the Securities in
        respect of principal, interest and any applicable premium and all other
        amounts due the Holders under the Operative Agreements;
<PAGE>

                                                                              46

               Third, to each Person indemnified by the Issuer, other than the
         Certificate Holders, for all amounts then due, on a pari passu basis;

               Fourth, to the Issuer for all amounts then due the Issuer under
         Section 13 of the Participation Agreement;

               Fifth, to the Issuer, for distribution to the Certificate Holders
         as provided for in the Trust Agreement of an amount equal to the
         aggregate outstanding Certificate Holder Contributions and all amounts
         then due and payable on account of the Certificate Holder Yield
         together with any applicable premium with respect to the Certificates;
         and

               Sixth, to the extent moneys remain after application pursuant to
         clauses First through Fifth above, to the Lessee or to whomever may be
         lawfully entitled to receive such surplus.

                                  ARTICLE VIII

                 Discharge of Indenture; Defeasance; The Account
                 -----------------------------------------------

               SECTION 8.1. Discharge of Liability on Securities; Defeasance.
(a) Subject to Section 8.1(c), when (i)(x) the Issuer delivers to the Trustee
all outstanding Securities (other than Securities replaced pursuant to Section
2.9) for cancellation or (y) all outstanding Securities not theretofore
delivered for cancellation have become due and payable, whether at maturity or
upon redemption or will become due and payable within one year or are to be
called for redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the name and at
the expense of the Issuer and the Issuer or any Hanover Guarantor irrevocably
deposits or causes to be deposited with the Trustee as trust funds in trust
solely for the benefit of the Holders money in U.S. dollars, non-callable U.S.
Government Obligations, or a combination thereof, in such amounts as will be
sufficient without consideration of any reinvestment of interest to pay and
discharge the entire indebtedness on such Securities not theretofore delivered
to the Trustee for cancellation for principal, premium, if any, and accrued
interest to the date of maturity or redemption, (ii) no Default or Event of
Default shall have occurred and be continuing on the date of such deposit or
shall occur as a result of such deposit and such deposit will not result in a
breach or violation of, or constitute a default under, any other instrument to
which the Issuer or any Hanover Guarantor is a party or by which the Issuer or
any Hanover Guarantor is bound; (iii) the Issuer or any Hanover Guarantor has
paid or caused to be paid all sums payable by it under this Indenture and the
Securities; and (iv) the Issuer has delivered irrevocable instructions to the
Trustee under this Indenture to apply the deposited money toward the payment of
such Securities at maturity or the Redemption Date, as the case may be, then the
Trustee shall acknowledge satisfaction and discharge of this Indenture on demand
of the Issuer (accompanied by an Officers' Certificate and an Opinion of Counsel
stating that all conditions precedent specified herein relating to the
satisfaction and discharge of this Indenture have been complied with) and at the
cost and expense of the Issuer.

               (b) Subject to Sections 8.1(c) and 8.2, the Issuer at any time
may terminate (i) all its obligations under the Securities and this Indenture
("legal defeasance option"), and after
<PAGE>

                                                                              47

giving effect to such legal defeasance, any omission to comply with such
obligations shall no longer constitute a Default or Event of Default or (ii) its
obligations under Sections 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11,
3.12, 3.13, 3.14, 3.15, 3.16, 3.18, 3.19, 3.20, 3.22 (with respect to the first
sentence thereof) and 3.24 and the Issuer may omit to comply with and shall have
no liability in respect of any term, condition or limitation set forth in any
such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply with such covenants shall no longer constitute a Default or
an Event of Default under Section 6.1(4) and the operation of Sections 6.1(3),
6.1(8), 6.1(9) (but only with respect to a Significant Subsidiary), 6.1(10) (but
only with respect to a Restricted Subsidiary) and 6.1(11), and the events
specified in such Sections shall no longer constitute an Event of Default (this
clause (ii) being referred to as the "covenant defeasance option"), but except
as specified above, the remainder of this Indenture and the Securities shall be
unaffected thereby. The Issuer may exercise its legal defeasance option
notwithstanding its prior exercise of its covenant defeasance option. If the
Issuer exercises its covenant defeasance option, the Issuer may elect to have
any Subsidiary Guarantees in effect at such time terminate.

               If the Issuer exercises its legal defeasance option, payment of
the Securities may not be accelerated because of an Event of Default, and the
Hanover Guarantees in effect at such time shall terminate. If the Issuer
exercises its covenant defeasance option, payment of the Securities may not be
accelerated because of an Event of Default specified in Section 6.1(4) (as such
Section relates to Sections 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11,
3.12, 3.13, 3.14, 3.15, 3.16, 3.18, 3.19, 3.20, 3.22 (with respect to the first
sentence thereof), 3.24, 6.1(3), 6.1(8), 6.1(9) (but only with respect to a
Restricted Subsidiary), 6.1(10) (but only with respect to a Restricted
Subsidiary) or 6.1(11).

               Upon satisfaction of the conditions set forth herein and upon
request of the Issuer, the Trustee shall acknowledge in writing the discharge of
those obligations that the Issuer terminates.

               (c) Notwithstanding the provisions of Sections 8.1(a) and (b),
the Issuer's obligations in Sections 2.1(d), 2.1(e), 2.2, 2.3, 2.4, 2.5, 2.6,
2.9, 2.10, 2.11, 2.12, 2.16, 3.1, 3.21, 3.22 (with respect to the second
sentence thereof), 3.23, 3.25, 3.26, 3.27, 7.7, and 7.8 and in this Article 8
shall survive until the Securities have been paid in full. Thereafter, the
Issuer's obligations in Sections 7.7, 8.4, 8.5 and 8.6 shall survive.

               SECTION 8.2. Conditions to Defeasance. The Issuer may exercise
its legal defeasance option or its covenant defeasance option only if:

                      (a) the Issuer irrevocably deposits in trust with the
         Trustee for the benefit of the Holders money in U.S. dollars or U.S.
         Government Obligations or a combination thereof for the payment of
         principal, premium, if any, and interest on the Securities to maturity
         or redemption, as the case may be;

                      (b) the Issuer delivers to the Trustee a certificate from
         a nationally recognized firm of independent accountants expressing
         their opinion that the payments of principal and interest when due and
         without reinvestment on the deposited U.S.
<PAGE>

                                                                              48

Government Obligations plus any deposited money without investment will provide
cash at such times and in such amounts as will be sufficient to pay principal
and interest when due on all the Securities to maturity;

               (c) no Default or Event of Default shall have occurred and be
         continuing on the date of such deposit or, with respect to certain
         bankruptcy or insolvency Events of Default, on the 91st day after such
         date of deposit;

               (d) such legal defeasance or covenant defeasance shall not result
         in a breach or violation of, or constitute a Default under, this
         Indenture or any other material agreement or instrument to which the
         Issuer is a party or by which the Issuer is bound;

               (e) the Issuer shall have delivered to the Trustee an Opinion of
         Counsel (subject to customary assumptions and exclusions) to the effect
         that (A) the Securities and (B) assuming no intervening bankruptcy of
         the Issuer between the date of deposit and the 91st day following the
         deposit and that no Holder of the Securities is an insider of the
         Issuer, after the 91st day following the deposit, the trust funds will
         not be subject to the effect of any applicable bankruptcy, insolvency,
         reorganization or similar laws affecting creditors' right generally;

               (f) the deposit does not constitute a default under any other
         agreement binding on the Issuer;

               (g) the Issuer delivers to the Trustee an Opinion of Counsel
         (subject to customary assumptions and exclusions) to the effect that
         the trust resulting from the deposit does not constitute, or is
         qualified as, a regulated investment company under the Investment
         Issuer Act of 1940;

               (h) in the case of the legal defeasance option, the Issuer shall
         have delivered to the Trustee an Opinion of Counsel (subject to
         customary assumptions and exclusions) in the United States stating that
         (i) the Issuer has received from, or there has been published by, the
         Internal Revenue Service a ruling, or (ii) since the date of this
         Indenture there has been a change in the applicable federal income tax
         law, in either case to the effect that, and based thereon such Opinion
         of Counsel shall confirm that, the Securityholders will not recognize
         income, gain or loss for federal income tax purposes as a result of
         such defeasance and will be subject to federal income tax on the same
         amounts, in the same manner and at the same times as would have been
         the case if such legal defeasance had not occurred;

               (i) in the case of the covenant defeasance option, the Issuer
         shall have delivered to the Trustee an Opinion of Counsel (subject to
         customary assumptions and exclusions) in the United States to the
         effect that the Securityholders will not recognize income, gain or loss
         for federal income tax purposes as a result of such deposit and
         covenant defeasance and will be subject to federal income tax on the
         same amount, in the same manner and at the same times as would have
         been the case if such deposit and covenant defeasance had not occurred;
         and
<PAGE>

                                                                              49

          (j) the Issuer delivers to the Trustee an Officers' Certificate and an
        Opinion of Counsel, each stating that all conditions precedent to the
        defeasance and discharge of the Securities and this Indenture as
        contemplated by this Article VIII have been complied with.

               SECTION 8.3. Application of Trust Money. The Trustee shall hold
in trust money or U.S. Government Obligations deposited with it pursuant to this
Article VIII. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with the terms
of this Indenture to the payment of principal of and interest on the Securities.

               SECTION 8.4. The Account. (a) The Trustee shall establish an
account (the "Account") into which the Trustee and the Collateral Agent shall
deposit all payments, receipts and other consideration of any kind whatsoever
paid under the Lease and received by the Trustee, in its capacity as Collateral
Agent, pursuant to the Assignment of Lease.

               (b) Payments deposited from time to time in the Account shall be
paid out as follows:

               (1) Any such payment identified by the Lessee as Basic Rent shall
        be paid out of the Account by the Trustee on the relevant Payment Date,
        and shall be applied, first, ratably to the payment of interest and
        principal then due and payable on the Securities until such amounts are
        paid in full, second, to the payment to the Issuer, for distribution to
        the Certificate Holders as provided for in the Trust Agreement, of an
        amount equal to the Certificate Holder Yield then due and payable under
        the Operative Agreements until such amount is paid in full, and, third,
        the remainder of such amount shall be paid out of the Account by the
        Trustee to such Person or Persons as the Issuer may designate.

               (2) Any payment identified by the Lessee as a payment in respect
        of the Termination Value of any Equipment pursuant to Section 16 of the
        Lease or of the Termination Value of any piece of Equipment pursuant to
        Section 20 of the Lease shall be paid out of the Account by the Trustee
        promptly after receipt, and shall be applied, first, ratably to the
        payment of the principal of the Securities that are redeemed in an
        amount equal to the product of (x) Termination Value in respect of such
        piece or pieces of Equipment and (y) the Debt Percentage, together with
        any applicable premium and all accrued and unpaid interest due and
        payable on such Securities in the form of Supplemental Rent under the
        Lease, and second, to the payment to the Issuer, for distribution to the
        Certificate Holders as provided for in the Trust Agreement, of an amount
        equal to the product of (x) the Termination Value in respect of such
        piece or pieces of Equipment and (y) the Contribution Percentage,
        together with any applicable premium and all Certificate Holder Yield
        due and payable with such amount in the form of Supplemental Rent under
        the Lease.

               (3) Any payment identified by the Lessee as proceeds of the sale
        of any Equipment pursuant to Section 21 of the Lease (but in any event
        excluding costs and expenses described in Section 21.2(i) of the Lease)
        ("Net Sale Proceeds") shall be paid out of the Account by the Trustee
        promptly after receipt, and shall be applied, first,
<PAGE>

                                                                              50

         ratably to the payment of the principal on the outstanding Securities,
         second, to the payment to the Issuer, for distribution to the
         Certificate Holders as provided for in the Trust Agreement, of an
         amount not to exceed the unpaid Certificate Holder Contribution, and
         third, the remainder of such amount ("Excess Sale Proceeds") shall be
         held in the Account until the Stated Maturity (or, if earlier, the date
         of an acceleration) for application in accordance with Section
         8.4(b)(4).

               (4) On the Stated Maturity, any Excess Sale Proceeds contained in
        the Account shall be applied as follows: first, ratably to the payment
        of the principal and interest on the outstanding Securities, second, to
        the payment to the Issuer, for distribution to the Certificate Holders
        as provided for in the Trust Agreement, of an amount not to exceed the
        Certificate Holder Contribution (whether or not the Lease has terminated
        with respect to any such Equipment), and the Certificate Holder Yield
        due and payable under the Operative Agreements, and third, to the extent
        monies remain, to the Lessee subject to the rights of any other person
        who may be lawfully entitled to receive such surplus.

               (5) Any payment identified by the Lessee as the Final Rent
        Payment in respect of any piece of Equipment shall be paid out of the
        Account by the Trustee promptly after receipt and shall be applied to
        the payment of the principal of outstanding Securities.

               (6) Any payment identified by the Lessee as a Wear and Tear
        Payment or any Net Sale Proceeds Shortfall pursuant to Section 21.3 of
        the Lease shall be paid out of the Account by the Trustee promptly after
        receipt as follows: first, ratably to the payment of the principal and
        interest on the outstanding Securities, and second, to the payment to
        the Issuer for distribution to the Certificate Holders as provided for
        in the Trust Agreement.

               (7) Any payment identified by the Lessee as Supplemental Rent
        (other than any payment of Final Rent Payment) (but in any event
        excluding all Excepted Payments which shall not be paid into the
        Account) shall be paid out of the Account by the Trustee promptly after
        receipt, and shall be applied to the payment of any amounts then owing
        to the Trustee, the Holders, the Certificate Holders and the other
        parties to the Operative Agreements (or any of them) (other than any
        such amounts payable pursuant to the preceding provisions of this
        Section 8.4(b)) as shall be designated by the Lessee (or, in the absence
        of such designation, ratably according to the respective amounts so
        owing of which the Trustee has received written notice).

               (8) Any payment of insurance proceeds in connection with a
        Significant Casualty or Significant Condemnation shall be paid to the
        Lessee upon the affected piece of Equipment being replaced with
        Replacement Equipment in accordance with the terms of the Lease.

               (9) Any payment identified by the Lessee as a payment being made
        pursuant to Section 5.1(a) shall be paid out of the Account by the
        Trustee on the relevant Redemption Date, and shall be applied first,
        ratably to the payment of interest then due and payable on the
        Securities until such amounts are paid in full, second, ratably to the
        payment of principal then due and payable on the Securities until such
        amounts are paid in full, and third, ratably to the payment of any
        applicable premium owing on the Securities, if any.
<PAGE>

                                                                              51

               (10) Any such payment identified by the Lessee as a payment being
        made pursuant to Section 5.1(b) shall be paid out of the Account by the
        Trustee on the relevant Redemption Date, and shall be applied first,
        ratably to the payment of Certificate Holder Yield then due and payable
        on the Certificates until such amounts are paid in full, second, ratably
        to the payment of Certificate Holder Contributions then outstanding, and
        third, ratably to the payment of any applicable premium owing on the
        Certificates, if any.

               In the event that the Lessee shall fail to identify the nature of
any payment deposited by it in the Account, or the Trustee in its reasonable
judgment shall determine that the identification made by the Lessee is incorrect
or inappropriate, the nature of such payment shall instead be identified by the
Trustee in its reasonable judgment and applied in the manner specified above
after notifying the Issuer, the Lessee and the Certificate Holders; provided
that, in the event that the Trustee identifies such payment as an Excepted
Payment, such payment shall be paid out of the Account by the Trustee to such
Person or Persons as the Issuer may designate.

               (c) Upon the satisfaction and discharge of this Indenture
pursuant to Section 8.1, any moneys remaining in the Account shall be paid to
such Person or Persons as the Issuer may direct in writing.

               (d) Within 30 days after each Payment Date, the Trustee shall
provide the Issuer with an accounting in reasonable detail showing all receipts
and disbursements to and from the Account since the date of the last such
accounting.

               (e) Notwithstanding anything to the contrary otherwise set forth
in this Indenture or in the Assignment of Lease, Excepted Payments shall not be
paid to the Trustee and shall not be deposited in the Account, but shall be made
at all times directly to the Issuer.

               (f) To the extent that any monies in the Account represent Excess
Sales Proceeds, the Trustee shall invest such monies at the direction of the
Issuer (or the Issuer's designee, including the Lessee to the extent provided in
Section 11.1 of the Participation Agreement) in securities that are U.S.
Government Obligations or (ii) interest in a money market fund registered under
the Investment Company Act of 1940, as amended, including, without limitation,
the Chase Vista Money Market Mutual Funds or any other mutual fund for which the
Trustee or an Affiliate of the Trustee serves as investment manager,
administrator, shareholder servicing agent, and/or custodian or subcustodian,
notwithstanding that (A) the Trustee or an Affiliate of the Trustee receives
fees from such funds for services rendered, (B) the Trustee charges and colleges
fees for services rendered pursuant to the Indenture, which fees are separate
from the fees received from such funds, and (C) services performed for such
funds and pursuant to this Indenture may at times duplicate those provided to
such funds by the Trustee or its Affiliates.

               SECTION 8.5. Repayment to Issuer. The Trustee and the Paying
Agent shall promptly turn over to the Issuer upon request any excess money or
securities held by them upon payment of all the obligations under this
Indenture.
<PAGE>

                                                                              52

               Subject to any applicable abandoned property law, the Trustee and
the Paying Agent shall pay to the Issuer upon request any money held by them for
the payment of principal of or interest on the Securities that remains unclaimed
for two years, and, thereafter, Securityholders entitled to the money must look
to the Issuer for payment as general creditors.

               SECTION 8.6. Indemnity for U.S. Government Obligations. The
Issuer shall pay and shall indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against deposited U.S. Government Obligations or
the principal and interest received on such U.S. Government Obligations.

               SECTION 8.7. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with this
Article VIII by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the obligations of the Issuer under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article VIII until such time as the
Trustee or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article VIII; provided, however, that, if
the Issuer has made any payment of interest on or principal of any Securities
because of the reinstatement of its obligations, the Issuer shall be subrogated
to the rights of the Holders of such Securities to receive such payment from the
money or U.S. Government Obligations held by the Trustee or Paying Agent.

               SECTION 8.8. Other Prepayment Matters (a) If on any date the
Trustee or the Issuer shall receive, with respect to any piece of Equipment, any
payment in respect of excess wear and tear pursuant to Section 21.3 of the Lease
(a "Wear and Tear Payment") or any Net Sale Proceeds Shortfall pursuant to
Section 21.3 of the Lease, such payment shall be applied in accordance with
Section 8.4(b)(6).

               (b) (i)On any date on which the Lessee is obligated to pay the
Issuer an amount equal to the Termination Value of any Equipment in connection
with the exercise of a Purchase Option or in connection with an Equity Proceeds
Purchase, Control Purchase or Excess Proceeds Purchase, such amount shall be
applied to prepay the Securities on such date in accordance with Section
8.4(b)(2), and (ii) on any date on which any Equipment shall have been sold
pursuant to Section 21 of the Lease, the Issuer shall prepay the Securities on
such date in an amount equal to the proceeds of such sale (net of costs and
expenses described in Section 21.2(i) of the Lease) in accordance with Section
8.4(b)(3).

                                   ARTICLE IX

                                   Amendments
                                   ----------

               SECTION 9.1. Without Consent of Holders. The Issuer, the Hanover
Guarantors and the Trustee may amend this Indenture or the Securities without
notice to or consent of any Securityholder:
<PAGE>

                                                                              53

               (a) to cure any ambiguity, omission, defect or inconsistency that
         does not materially adversely affect the rights of any Holder;

               (b) to provide for uncertificated Securities in addition to or in
         place of certificated Securities; provided, however, that the
         uncertificated Securities are issued in registered form for purposes of
         Section 163(f) of the Code or in a manner such that the uncertificated
         Securities are described in Section 163(f)(2)(B) of the Code;

               (c) to add Guarantees with respect to the Securities or release a
         Hanover Guarantor upon its sale or disposition or designation as an
         Unrestricted Subsidiary; provided, however, that the designation or
         sale or disposition is in accord with the applicable provisions of the
         Indenture;

               (d) to further secure the Securities;

               (e) to add to the covenants of the Issuer for the benefit of the
         Holders or surrender any right or power conferred upon the Issuer;

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

               (g) to comply with any requirement of the Commission in
         connection with the qualification of this Indenture under the TIA;

provided, however, that Sections 7.13 and 8.4 shall not be amended without the
consent of the Required Certificate Holders.

               After an amendment under this Section becomes effective, the
Issuer shall mail to Securityholders a notice briefly describing such amendment.
The failure to give such notice to all Securityholders, or any defect therein,
shall not impair or affect the validity of an amendment under this Section.

               SECTION 9.2. With Consent of Holders. The Issuer, the Hanover
Guarantors and the Trustee may amend this Indenture or the Securities without
notice to any Securityholder but with the written consent of the Required
Holders (including, without limitation, consents obtained in connection with a
purchase of, or tender offer or exchange offer for, Securities); provided,
however, that Sections 7.13 and 8.4 shall not be amended without the consent of
the Required Certificate Holders. However, without the consent of each
Securityholder affected, an amendment may not:

               (a) reduce the amount of Securities whose Holders must consent to
         an amendment;

               (b) reduce the stated rate of or extend the stated time for
         payment of interest on any Security;

               (c) reduce the principal of or extend the Stated Maturity of any
         Security;
<PAGE>

                                                                              54

               (d) reduce the premium payable upon the redemption or repurchase
         of any Security or change the time at which any Security may or shall
         be redeemed or repurchased as described above under Section 3.3,
         Section 3.4 (including an amendment to the definition of "Change of
         Control") or Article V or any similar provision, whether through an
         amendment to or waiver of Section 3.3, Section 3.4 or Article V, a
         definition or otherwise;

               (e) make any Security payable in money other than that stated in
         the Security;

               (f) impair the right of any Holder to receive payment of
         principal of, premium, if any, and interest on such Holder's Securities
         on or after the due dates therefor or to institute suit for the
         enforcement of any payment on or with respect to such Holder's
         Securities; or

               (g) make any change to the amendment provisions which require
         each Holder's consent or to the waiver provisions.

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

               After an amendment under this Section becomes effective, the
Issuer shall mail to Securityholders a notice briefly describing such amendment.
The failure to give such notice to all Securityholders, or any defect therein,
shall not impair or affect the validity of an amendment under this Section.

               SECTION 9.3. Compliance with Trust Indenture Act. Every amendment
to this Indenture or the Securities shall comply with the TIA as then in effect.

               SECTION 9.4. Revocation and Effect of Consents and Waivers. A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such Holder's
Security or portion of the Security if the Trustee receives the notice of
revocation before the date the amendment or waiver becomes effective. After an
amendment or waiver becomes effective, it shall bind every Securityholder. An
amendment or waiver shall become effective upon receipt by the Trustee of the
requisite number of written consents under Section 9.1 or 9.2 as applicable.

               The Issuer may, but shall not be obligated to, fix a record date
for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any
<PAGE>

                                                                              55

such action, whether or not such Persons continue to be Holders after such
record date. No such consent shall become valid or effective more than 120 days
after such record date.

               SECTION 9.5. Notation on or Exchange of Securities. If an
amendment changes the terms of a Security, the Trustee may require the Holder of
the Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Issuer or the Trustee so determines, the Issuer in
exchange for the Security shall issue and the Trustee shall authenticate a new
Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.

               SECTION 9.6. Trustee To Sign Amendments. The Trustee shall sign
any amendment authorized pursuant to this Article IX if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Sections 7.1 and 7.2) shall be fully protected in
relying upon an Officers' Certificate and an Opinion of Counsel stating that
such amendment is authorized or permitted by this Indenture.

               SECTION 9.7. Acknowledgement of Certain Other Matters Requiring
Consent.

               The parties hereby acknowledge that:

                      (a) pursuant to the terms of the Participation Agreement,
        the material terms of the Participation Agreement, the Lease (subject to
        certain exceptions set forth below), the Hanover Guarantee and the
        Assignment of Lease may not be amended, supplemented, waived or modified
        without the written agreement and consent of, among others, the Trustee
        with the written consent of the Required Holders (including, without
        limitation, consents obtained in connection with a purchase of, or
        tender offer or exchange offer for, Securities); provided, however, that
        the Issuer, the Lessee and Hanover, the Trustee may amend, supplement,
        waive or modify without the written consent of the Required Holders
        certain provisions of the Lease which relate to, among other items, the
        return and redelivery of the Equipment at the expiration of the Lease
        term, the use of the Equipment and the subleasing of the Equipment;

                      (b) notwithstanding the provisions of Section 9.7(a), no
        party may, without the written consent of each Securityholder affected,
        amend, change or modify in any material respect the obligations of the
        Lessee and/or Hanover (or any of the material provisions or definitions
        with respect thereto) to (i) make payments of rent under the Lease or
        (ii) purchase Equipment yielding proceeds sufficient to enable the
        Issuer to make and consummate a Change of Control Offer; and

               (c) certain provisions of the Lease, the Participation Agreement
and other Operative Agreements which are material to the Certificate Holders of
the Issuer may not be amended, supplemented, waived or modified without their
consent if such amendment, waiver, supplement or modification would materially
adversely affect the Certificate Holders.
<PAGE>

                                                                              56

               SECTION 9.8. Nonrecourse. Anything to the contrary contained in
this Indenture or in any other Operative Agreement notwithstanding, neither the
Certificate Holders, the Trust Company, nor any officer, director or shareholder
thereof, nor any of the Issuer's or the Trust Company's successors or assigns
(all such Persons being hereinafter referred to collectively as the "Exculpated
Person"), shall be personally liable in any respect for any liability or
obligation hereunder or under any other Operative Agreement including the
payment of the principal of, or interest on, the Securities, or for monetary
damages for the breach of performance of any of the representations, warranties,
agreements, undertakings or covenants of the Issuer contained in this Indenture
or any of the other Operative Agreements, and the Trustee and each Holder, by
accepting a Security, agree that, in the event any of them pursues any remedies
available to them under this Indenture or any other Operative Agreement, neither
the Trustee nor the Holders shall have any recourse against the Certificate
Holders, the Trust Company, nor any other Exculpated Person, for any deficiency,
loss or claim for monetary damages or otherwise resulting therefrom and recourse
shall be had solely and exclusively against the Issuer and the Collateral and,
to the extent provided therefore in the Hanover Guarantee, the Hanover
Guarantors; provided, however, each Exculpated Person shall remain liable for
its own gross negligence or willful misconduct and for any breach by such
Exculpated Person of any covenant or representation undertaken or made by it in
its individual capacity as provided herein or in the other Operative Agreements.
Nothing contained herein shall be taken to prevent recourse against the
enforcement of remedies against the Collateral in respect of any and all
liabilities, obligations and undertakings contained in this Indenture or any
other Operative Agreement. Notwithstanding the foregoing provisions of this
Section 9.8, nothing in this Indenture or any other Operative Agreement shall
(a) constitute a waiver, release or discharge of any obligation evidenced or
secured by this Indenture or any other Security Document, (b) limit the right of
the Trustee or any Holder to name the Issuer as a party defendant in any action
or suit for judicial foreclosure and sale under any Security Document, or (c)
affect in any way the validity or enforceability of the Hanover Guarantee or any
other guaranty (whether of payment and/or performance) given to the Trustee or
the Holders, or of any indemnity agreement given by the Issuer, in connection
with the Securities issued hereunder.

               SECTION 9.9. Subordination. The obligations of each Hanover
Guarantor under this Indenture shall be subordinated in right of payment to the
prior payment of Senior Indebtedness and Guarantor Senior Indebtedness of such
Hanover Guarantor to the same extent as such Hanover Guarantor's payment
obligations under the Guarantee are subordinated to prior payment of Senior
Indebtedness and Guarantor Senior Indebtedness, mutatis mutandis.
<PAGE>

                                                                              57

                                   ARTICLE X

                                  Miscellaneous
                                  -------------

               SECTION 10.1. Trust Indenture Act Controls. If any provision of
this Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the provision required by
the TIA shall control. Each Hanover Guarantor in addition to performing its
obligations under its Hanover Guarantee shall perform such other obligations as
may be imposed upon it with respect to this Indenture under the TIA.

               SECTION 10.2. Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:

                      if to the Issuer:

                      Hanover Equipment Trust 2001B
                      c/o Wilmington Trust Company
                      Rodney Square North
                      1100 North Market Street
                      Wilmington, Delaware 19890
                      Attention: Corporate Trust Administration
                      Telecopy No.: 302-651-8882

                      With a copy to:

                      Morris, James, Hitchens & Williams LLP
                      222 Delaware Avenue
                      10th Floor
                      P. O. Box 2306
                      Wilmington, Delaware 19899
                      Attention: Lewis C. Ledyard III
                      Telecopy No.: (302) 571-1750

                      if to the Trustee:

                      Wilmington Trust FSB
                      Rodney Square North
                      1100 North Market Street
                      Wilmington, Delaware 19890
                      Attention:  Corporate Trust Administration
                      Telecopy No.: (302) 651-8882

                      and

                      Wilmington Trust FSB
<PAGE>

                                                                              58
                      3773 Howard Hughes Parkway, Suite 300N
                      Las Vegas, Nevada  89109
                      Attention:  Corporate Trust Department
                      Telecopy No.:  (702) 866-2244

               The Issuer or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.

               Any notice or communication mailed to a registered Securityholder
shall be mailed to the Securityholder at the Securityholder's address as it
appears on the registration books of the Registrar and shall be sufficiently
given if so mailed within the time prescribed.

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

               SECTION 10.3. Communication by Holders with other Holders.
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Issuer, the Trustee, the Registrar and anyone else shall have
the protection of TIA ss. 312(c).

               SECTION 10.4. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Issuer to the Trustee to take or refrain
from taking any action under this Indenture, the Issuer shall furnish to the
Trustee:

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

               (b)    an Opinion of Counsel in form and substance reasonably
                      satisfactory to the Trustee stating that, in the opinion
                      of such counsel, all such conditions precedent have been
                      complied with.

               SECTION 10.5. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:

                      (a) a statement that the individual 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;
<PAGE>

                                                                              59

                      (c) a statement that, in the opinion of such individual,
         he 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 complied with; and

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

               In giving such Opinion of Counsel, counsel may rely as to factual
matters on an Officers' Certificate or on certificates of public officials.

               SECTION 10.6. When Securities Disregarded. In determining whether
the Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Issuer or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Issuer shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which the Trustee knows are so owned shall be so disregarded. Also,
subject to the foregoing, only Securities outstanding at the time shall be
considered in any such determination.

               SECTION 10.7. Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by, or a meeting of,
Securityholders. The Registrar and the Paying Agent may make reasonable rules
for their functions.

               SECTION 10.8. Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or other day on which commercial banking institutions are authorized or
required to be closed in New York City. If a payment date is a Legal Holiday,
payment shall be made on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period. If a regular record
date is a Legal Holiday, the record date shall not be affected.

               SECTION 10.9. GOVERNING LAW. THIS INDENTURE AND THE SECURITIES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.

               SECTION 10.10. No Recourse Against Others. An incorporator,
director, officer, employee, stockholder or controlling person, as such, of the
Issuer or any Hanover Guarantor shall not have any liability for any obligations
of the Issuer under the Securities, this Indenture or the Hanover Guarantees or
for any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder shall waive and release
all such liability. The waiver and release shall be part of the consideration
for the issue of the Securities.

               SECTION 10.11. Successors. All agreements of the Issuer in this
Indenture and the Securities shall bind their respective successors. All
agreements of the Trustee in this Indenture shall bind its successors.
<PAGE>

                                                                              60

               SECTION 10.12. Multiple 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. One signed copy is enough to
prove this Indenture.

               SECTION 10.13. Variable Provisions. The Issuer initially appoints
the Trustee as Paying Agent and Registrar and custodian with respect to any
Global Securities.

               SECTION 10.14. Qualification of Indenture. The Issuer shall
qualify this Indenture under the TIA in accordance with the terms and conditions
of the Exchange and Registration Rights Agreement and shall pay all reasonable
costs and expenses (including attorneys' fees and expenses for the Issuer, the
Trustee and the Holders) incurred in connection therewith, including, but not
limited to, costs and expenses of qualification of this Indenture and the
Securities and printing this Indenture and the Securities. The Trustee shall be
entitled to receive from the Issuer any such Officers' Certificates, Opinions of
Counsel or other documentation as it may reasonably request in connection with
any such qualification of this Indenture under the TIA.

               SECTION 10.15. Table of Contents; Headings. The table of
contents, cross-reference sheet and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not
intended to be considered a part hereof and shall not modify or restrict any of
the terms or provisions hereof.

               SECTION 10.16. Non-Exclusion of the Issuer. The Issuer and the
Trustee (a) acknowledge that various provisions of the Lease and the
Participation Agreement require the delivery by Lessee of various instruments
and documents to both the Trustee and to the Issuer and (b) agree that such
provisions shall in no event be read to limit or modify the rights of the Issuer
set forth in Section 7.12. The Issuer and the Trustee further acknowledge and
agree that any provisions of the Assignment of Lease and of this Indenture that
purportedly assign to the Trustee the Issuer's rights to receive any such
instruments or documents shall not create any inference that such deliveries
will be made to the Trustee to the exclusion of the Issuer, and the Issuer shall
in all events retain the right to receive such deliveries.

               SECTION 10.17. Third Party Beneficiaries. The Certificate Holders
shall be third-party beneficiaries of this Indenture.

                                   ARTICLE XI

                             Collateral and Security
                             -----------------------

               SECTION 11.1. Collateral and Security Documents; Future
Guarantees. (a) In order to secure the due and punctual payment of the principal
of and interest and premium, if any, on the Securities of each series and the
Certificate Holder Contributions and the Certificate Holder Yield and premium,
if any, on the Certificates when and as the same shall be due and payable,
whether on a Payment Date, Stated Maturity, by acceleration, redemption or
otherwise, and interest on the overdue principal of and interest (to the extent
permitted by law), if any, on the Securities of each series, the Certificate
Holder Contribution and the Certificate
<PAGE>

                                                                              61

Holder Yield and the performance of all other obligations of the Issuer to the
Holders or the Trustee under this Indenture and the Securities of each series
(the "Issuer Obligations"), the Issuer and the Trustee have simultaneously with
the execution of this Indenture entered into the Security Agreement pursuant to
which the Issuer has granted to the Trustee, in its capacity as Collateral
Agent, for the benefit of the Holders of Securities of each series and the
Certificate Holders, a first priority Lien on and security interest in the
Collateral described therein, subject to the exceptions permitted by Section
3.9. Each Hanover Guarantor, by executing its respective Hanover Guarantee and
this Indenture, shall Guarantee the Issuer Obligations. Each Subsidiary of
Hanover that becomes a Material Subsidiary and becomes a guarantor under the
Senior Credit Agreement shall enter into a supplement to the Hanover Guarantee
and an assumption agreement supplemental to the Participation Agreement.
Subsequent to the date of this Indenture, the Issuer and the Hanover Guarantors
shall execute, as soon as practicable, any further security agreements
(substantially in the form of the Security Agreement) or other agreements
necessary and take such other actions as necessary to create and maintain an
effective security interest in the Equipment and all proceeds and products of
any and all of the foregoing.

               The Trustee, the Issuer and the Hanover Guarantors hereby agree
that the Trustee, in its capacity as Collateral Agent, holds the Collateral in
trust for the benefit of the Holders and the Certificate Holders pursuant to the
terms of the Security Documents.

               (b) Each Holder, by accepting a Security, agrees to all of the
terms and provisions of the Security Documents, as the same may be amended from
time to time pursuant to the provisions of the Security Documents and this
Indenture.

               SECTION 11.2. Recording and Opinions. (a) The Issuer and the
Hanover Guarantors as soon as practicable shall take or cause to be taken all
action required to perfect, maintain, preserve and protect the first priority
Lien on and security interest in the Collateral, subject to the exceptions set
forth in Section 3.9, granted by the Security Documents, including without
limitation, the filing of financing statements, continuation statements and any
instruments of further assurance, in such manner and in such places as may be
required by law fully to preserve and protect the rights of the Holders and the
Trustee, as in its capacity as Collateral Agent, under this Indenture and the
Security Documents to all property now and hereafter comprising the Collateral.
The Issuer shall from time to time promptly pay all financing and continuation
statement recording and/or filing fees, charges and taxes relating to this
Indenture and the Security Documents, any amendments thereto and any other
instruments of further assurance required pursuant to the Security Documents.

               (b) The Issuer shall furnish to the Trustee promptly after the
time of execution and delivery of this Indenture, Opinion(s) of Counsel either
(i) substantially to the effect that, in the opinion of such Counsel, this
Indenture and the grant of a security interest in the Collateral intended to be
made by the Security Documents and all other instruments of further assurance,
including, without limitation, financing statements, have been properly recorded
and filed to the extent necessary to perfect the security interests in the
Collateral created by the Security Documents and reciting the details of such
action, and stating that as to the security interests created pursuant to the
Security Documents, such recordings and filings are the only recordings and
filings necessary to give notice thereof and that no re-recordings or refilings
are necessary to maintain such notice (other than as stated in such opinion) or
(ii) to the effect that, in the opinion
<PAGE>

                                                                              62

of such counsel, no such action is necessary to perfect such security interests.
To the extent not required by the preceding sentence, the Issuer shall deliver
the opinion(s) required by Section 314(b) of the TIA. Subsequent to the date of
this Indenture, at the time of the execution of any Security Document,
Opinion(s) of Counsel with respect to the identical matters set forth in this
paragraph (ii) and an Opinion of Counsel to the effect that the Security
Documents executed on such date constitute the legally valid, binding and
enforceable obligation of the Issuer, subject to acceptable bankruptcy and
similar exceptions, shall be delivered to the Trustee.

               (c) The Issuer shall furnish to the Trustee as promptly as
practicable after each May 15, beginning with the May 15 following the date of
this Indenture, and in any event prior to July 15 in each year, an Opinion of
Counsel, dated as of such date, either (i)(A) stating that, in the opinion of
such counsel, action has been taken with respect to the recording, filing,
re-recording and refiling of all supplemental indentures, financing statements
and continuation statements as is necessary to maintain the Lien of the Security
Documents and reciting with respect to the security interests in the Collateral
the details of such action or referring to prior Opinions of Counsel in which
such details are given, and (B) stating that, based on relevant laws as in
effect on the date of such Opinion of Counsel, all financing statements and
continuation statements have been executed and filed that are necessary as of
such date and during the succeeding 12 months fully to maintain the security
interest of the Holders and the Trustee hereunder and under the Security
Documents with respect to the Collateral, or (ii) stating that, in the opinion
of such Counsel, no such action is necessary to maintain such Lien.

               (d) If the Lessee shall at any time purchase all or any portion
of the Equipment pursuant to Section 16.2 of the Lease or exercise its Purchase
Option or its Maturity Date Purchase Option or make a Control Purchase or Excess
Proceeds Purchase with respect to any of the Equipment under Section 20 of the
Lease, or if the Equipment shall be sold in accordance with Section 21 of the
Lease, then, upon satisfaction of the Issuer's obligation (i) to prepay the
applicable portion of the Securities pursuant to Section 8.8(c) and to pay the
applicable portion of the accrued and unpaid interest on the Securities so
prepaid and any premium, if applicable, and (ii) to prepay the Certificate
Holder Contributions and the Certificate Holder Yield and any applicable premium
when due, the Trustee, in its capacity as Collateral Agent, shall release the
applicable Equipment from the Liens created by the Security Documents. In
addition, upon the payment in full of the Securities and all other amounts owing
by the Issuer or the Lessee hereunder or under any other Operative Agreement,
the Trustee, in its capacity as Collateral Agent, shall release all the
Equipment from the Liens created by the Security Documents. Upon request of the
Issuer following any such release, the Trustee, in its capacity as Collateral
Agent, shall, at the sole cost and expense of the Issuer, execute and deliver to
the Issuer or the Lessee such documents as the Issuer shall reasonably request
to evidence such release.

               (e) Notwithstanding anything to the contrary herein, upon the
payment in full of (i) the Securities and all other amounts owing by the Issuer
or the Lessee hereunder or under any other Operative Agreement, (ii) the
Certificates and all other amounts due to the Certificate Holders, and (iii) all
amounts owing by the Lessee to the Issuer or to any other Person under the
Operative Agreements, all remaining moneys in the Account shall be paid out to
the Lessee.
<PAGE>

                                                                              63

               SECTION 11.3. Release of Collateral. (a) The Trustee, in its
capacity as Collateral Agent under the Security Documents, shall not at any time
release Collateral from the security interest created by this Indenture and the
Security Documents unless such release is in accordance with the provisions of
this Indenture and the Security Documents.

               (b) At any time when an Event of Default shall have occurred and
be continuing, no release of Collateral pursuant to the provisions of this
Indenture and the Security Documents shall be effective as against the Holders
of the Securities of any series.

               (c) The release of any Collateral from the terms of the Security
Documents shall not be deemed to impair the security under this Indenture in
contravention of the provisions hereof if and to the extent the Collateral is
released in accordance with this Indenture and the Security Documents. To the
extent applicable, the Issuer shall cause Section 314(d) of the TIA relating to
the release of property from the Lien of the Security Documents and relating to
the substitution therefor of any property to be subjected to the Lien of the
Security Documents to be complied with. Any certificate or opinion required by
Section 314(d) of the TIA may be made by a Responsible Officer of the Issuer,
except in cases where Section 314(d) of the TIA requires that such certificate
or opinion be made by an Independent Person, which Person shall be an
independent engineer, or other expert selected or approved by the Trustee in the
exercise of reasonable care.

               SECTION 11.4. Possession and Use of Collateral. Subject to and in
accordance with the provisions of this Indenture and the Security Documents, so
long as no Event of Default shall have occurred and be continuing the Issuer
shall have the right to remain in possession and retain control of the
Collateral other than Trust Moneys held by the Trustee, to operate, manage,
develop, lease, use, consume and enjoy the Collateral (other than Trust Moneys
and other personal property held by, or required to be deposited or pledged
with, the Trustee in its capacity as Collateral Agent under the Indenture or any
Security Document), to alter or repair any Collateral consisting of vehicles,
machinery or equipment so long as such alterations and repairs do not diminish
the value thereof or impair the Lien of the Security Documents thereon and to
collect, receive, use, invest and dispose of the reversions, remainders,
interest, rents, lease payments, issues, profits, revenues, proceeds and other
income thereof.

               SECTION 11.5. Specified Releases of Collateral. The Issuer shall
be entitled to obtain a full release of all of the Collateral from the Liens of
this Indenture and of the Security Documents upon compliance with the conditions
precedent set forth in Article VIII for satisfaction and discharge of this
Indenture or for legal defeasance of the outstanding Securities of all series
pursuant to Section 8.2. Upon delivery by the Issuer to the Trustee of an
Officers' Certificate and Opinion of Counsel, each to the effect that such
conditions precedent have been complied with (and which may be the same
Officers' Certificate and Opinion of Counsel required by Section 8.2), the
Trustee, in its capacity as Collateral Agent, shall forthwith take all necessary
action (at the request of and the expense of the Issuer) to release and reconvey
to the Issuer all the Collateral, and shall deliver such Collateral in its
possession to the Issuer including, without limitation, the execution and
delivery of releases and satisfactions whenever required.

               SECTION 11.6. Purchaser Protected. No purchaser or grantee of any
property or rights purporting to be released herefrom shall be bound to
ascertain the authority of the
<PAGE>

                                                                              64

Trustee to execute the release or to inquire as to the existence of any
conditions herein prescribed for the exercise of such authority; nor shall any
purchaser or grantee of any property or rights permitted by this Indenture to be
sold or otherwise disposed of by the Issuer be under any obligation to ascertain
or inquire into the authority of the Issuer to make such sale or other
disposition.

               SECTION 11.7. Authorization of Actions To Be Taken by The Trustee
Under the Security Documents. Subject to the provisions of the Security
Documents, (a) the Trustee may, in its sole discretion and without the consent
of the Holders or the Certificate Holders, take all actions it deems necessary
or appropriate in order to (i) enforce any of the terms of the Security
Documents and (ii) to collect and receive any and all amounts payable in respect
of the obligations of the Issuer hereunder or of the Hanover Guarantors under
their respective Hanover Guarantees and (b) the Trustee shall have power to
institute and to maintain such suits and proceedings as it may deem expedient to
prevent any impairment of the Collateral by any acts that may be unlawful or in
violation of the Security Documents or this Indenture, and such suits and
proceedings as the Trustee may deem expedient to preserve or protect its
interests and the interests of the Holders and the Certificate Holders in the
Collateral (including the power to institute and maintain suits or proceedings
to restrain the enforcement of or compliance with any legislative or other
governmental enactment, rule or order that may be unconstitutional or otherwise
invalid if the enforcement of, or compliance with, such enactment, rule or order
would impair the security interest thereunder or be prejudicial to the interests
of the Holders or the Certificate Holders of the Trustee).

               SECTION 11.8. Authorization of Receipt of Funds by the Trustee
Under the Security Documents. The Trustee is authorized to receive any funds for
the benefit of Holders and the Certificate Holders distributed under the
Security Documents, and to make further distributions of such funds to the
Holders and to the Issuer, for distribution to the Certificate Holders, in
accordance with the provisions of Article VIII and the other provisions of this
Indenture.

                                  ARTICLE XII

                                Collateral Agent
                                ----------------

               SECTION 12.1. Appointment of Collateral Agent.

               (a) The Trustee is hereby irrevocably designated and appointed as
Collateral Agent for the Holders and the Certificate Holders under this
Indenture and the Security Documents and is irrevocably authorized to take such
action on behalf of the Holders and the Certificate Holders under the provisions
of the Security Documents and the other Operative Agreements and to exercise
such powers and perform such duties as are expressly delegated to the Collateral
Agent by the terms of the Security Documents and the other Operative Agreements,
together with such other powers as are reasonably incidental thereto.
<PAGE>

                                                                              65

               (b) Notwithstanding any provision to the contrary elsewhere in
this Indenture, the Trustee, in its capacity as Collateral Agent, shall not have
any duties or responsibilities to the Holders or the Certificate Holders, except
those expressly set forth herein or in any other Security Document or Operative
Agreement, or any fiduciary relationship with any Holder or Certificate Holder,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into the Security Documents or any other Operative
Agreements or otherwise exist against the Trustee, in its capacity as Collateral
Agent.

               SECTION 12.2. Delegation of Duties. The Trustee, as Collateral
Agent, may execute any of its duties or powers under this Indenture and each of
the other Security Documents and Operative Agreements by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties and powers. The Trustee, as Collateral Agent,
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care, except as otherwise
provided in subsection 12.3.

               SECTION 12.3. Exculpatory Provisions. Neither the Trustee, as
Collateral Agent, nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates shall be (a) liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection with
the Security Documents or any other Operative Agreements (except for its or such
Person's own gross negligence or willful misconduct or any breach of any
representation or covenant made by it in its individual capacity in the
Operating Agreements) of its representations or covenants in the Operating
Agreements), or (b) responsible in any manner to any of the Holders or
Certificate Holders for any recitals, statements, representations or warranties
made by the Trustee, as Collateral Agent, or any officer of it contained in the
Security Documents, any other Operative Agreements or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Trustee, as Collateral Agent, under or in connection with, the Security
Documents or any other Operative Agreements or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of the Security
Documents or any other Operative Agreements. The Trustee, as Collateral Agent,
shall not be under any obligation to any Holder or Certificate Holder to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, any Security Document or any other
Operative Agreements, or to inspect the properties, books or records of the
Issuer.

               SECTION 12.4. Reliance by Collateral Agent. The Trustee, as
Collateral Agent, shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate, affidavit,
letter, cablegram, telegram, telecopy, telex or teletype message, statement,
order or other document or conversation believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including, without limitation, counsel
to the Issuer), independent accountants and other experts selected by the
Trustee, as Collateral Agent.
<PAGE>

                                                                              66

               IN WITNESS WHEREOF, the parties have caused this Indenture to be
duly executed as of the date first written above.

                                       HANOVER EQUIPMENT TRUST 2001B

                                       By:    WILMINGTON TRUST COMPANY,
                                              not individually but solely
                                              as trustee of the Issuer

                                              By ____________________________
                                                 Name:
                                                 Title:

                                       WILMINGTON TRUST FSB

                                       By ____________________________
                                       Name:
                                       Title:

                                       HANOVER GUARANTORS (signing solely
                                       for the purposes of Section 2.9,
                                       Article IV, Article IX, Article X
                                       and Article XI hereof)

                                       HANOVER COMPRESSOR COMPANY

                                       By ____________________________
                                       Name:
                                       Title:

                                       HANOVER COMPRESSION LIMITED PARTNERSHIP

                                       By ____________________________
                                       Name:
                                       Title:
<PAGE>

                                                                              67

                                       HANOVER COMPRESSOR LIMITED HOLDINGS, LLC

                                       By ____________________________
                                       Name:
                                       Title:

                                       HANOVER LAND LIMITED PARTNERSHIP

                                       By ____________________________
                                       Name:
                                       Title:

                                       HANOVER/SMITH LIMITED PARTNERSHIP

                                       By ____________________________
                                       Name:
                                       Title:

                                       HANOVER MAINTECH LIMITED PARTNERSHIP

                                       By ____________________________
                                       Name:
                                       Title:

                                       HANOVER ACQUISITION LIMITED PARTNERSHIP

                                       By ____________________________
                                       Name:
                                       Title:
<PAGE>

                                                                              68

                                       EUREKA ENERGY LIMITED PARTNERSHIP

                                       By ____________________________
                                       Name:
                                       Title:

                                       HANOVER APPLIED PROCESS SOLUTIONS, INC.

                                       By ____________________________
                                       Name:
                                       Title:

                                       HANOVER OEC COMPRESSION CORPORATION

                                       By ____________________________
                                       Name:
                                       Title:
<PAGE>

                                                                              69

                                                                       EXHIBIT A

                       [FORM OF FACE OF INITIAL SECURITY]

                    [Applicable Restricted Securities Legend]
                       [Depository Legend, if applicable]

No. [___]                          Principal Amount $250,000,000, as
                                   revised by the Schedule of Increases and
                                   Decreases in Global Security attached hereto

                       8.75% Senior Secured Notes due 2011

               Hanover Equipment Trust 2001B, a Delaware business trust,
promises to pay to [__________], or registered assigns, the principal sum of
$250,000,000 Dollars, as revised by the Schedule of Increases and Decreases in
Global Security attached hereto, on September 1, 2011.

               Interest Payment Dates:      March 1 and September 1
               Record Dates:                February 15 and August 15

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

                                      HANOVER EQUIPMENT TRUST 2001B

                                      By:______________________________________
                                         Name:
                                         Title:
TRUSTEE'S CERTIFICATE OF
  AUTHENTICATION

WILMINGTON TRUST FSB, as Trustee, certifies that this is one of the Securities
referred to in the Indenture.

By:______________________________________
    Authorized Signatory                                  Date: _______ __, 2001
<PAGE>

                   [FORM OF REVERSE SIDE OF INITIAL SECURITY]

                       8.75% Senior Secured Note due 2011

1.      Interest

               Hanover Equipment Trust 2001B, a Delaware business trust (such
business trust, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Issuer"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above.

               The Issuer will pay interest semiannually in arrears on March 1
and September 1 of each year commencing March 1, 2002. Interest on the
Securities will accrue from the most recent date to which interest has been paid
on the Securities or, if no interest has been paid, from September 1, 2001. The
Issuer shall pay interest on overdue principal or premium, if any (plus interest
on such interest to the extent lawful), at the rate borne by the Securities to
the extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.

2.      Method of Payment

               By at least 10:00 a.m. (New York City time) on the date on which
any principal of or interest on any Security is due and payable, the Issuer
shall irrevocably deposit with the Trustee or the Paying Agent money sufficient
to pay such principal, premium, if any, and/or interest. The Issuer will pay
interest (except Defaulted Interest) to the Persons who are registered Holders
of Securities at the close of business on the February 15 or August 15 next
preceding the interest payment date even if Securities are cancelled,
repurchased or redeemed after the record date and on or before the interest
payment date. Holders must surrender Securities to a Paying Agent to collect
principal payments. The Issuer will pay principal and interest in money of the
United States that at the time of payment is legal tender for payment of public
and private debts. Payments in respect of Securities represented by a Global
Security (including principal, premium, if any, and interest) will be made by
the transfer of immediately available funds to the accounts specified by The
Depository Trust Company. The Issuer will make all payments in respect of a
Definitive Security (including principal, premium, if any, and interest) by
mailing a check to the registered address of each Holder thereof; provided,
however, that payments on the Securities may also be made, in the case of a
Holder of a least $1,000,000 aggregate principal amount of Securities, by wire
transfer to a U.S. dollar account maintained by the payee with a bank in the
United States if such Holder elects payment by wire transfer by giving written
notice to the Trustee or the Paying Agent to such effect designating such
account no later than 15 days immediately preceding the relevant due date for
payment (or such other date as the Trustee may accept in its discretion).

3.      Paying Agent and Registrar

               Initially, Wilmington Trust FSB (the "Trustee"), will act as
Trustee, Paying Agent and Registrar. The Issuer may appoint and change any
Paying Agent, Registrar or co-registrar without notice to any Securityholder.
The Issuer or any of its Restricted Subsidiaries may act as Paying Agent,
Registrar or co-registrar.

                                       1
<PAGE>

                                                                               2

4.      Indenture

               The Issuer issued the Securities under an Indenture dated as of
August 30, 2001 (as it may be amended or supplemented from time to time in
accordance with the terms thereof, the "Indenture"), among the Issuer, the
Hanover Guarantors and the Trustee, and a Participation Agreement dated as of
August 30, 2001 (the "Participation Agreement") among the Issuer, the Lessee,
the Certificate Holders named therein, the Hanover Guarantors, the Trustee and
Wilmington Trust Company. The terms of the Securities include those stated in
the Indenture and the Participation Agreement and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) as in effect on the date of the Indenture (the "Act"). Capitalized
terms used herein and not defined herein have the meanings ascribed thereto in
the Indenture. The Securities are subject to all such terms, and Securityholders
are referred to the Indenture and the Act for a statement of those terms.

               The Securities are secured senior obligations of the Issuer
limited to $250 million aggregate principal amount (subject to Section 2.2 of
the Indenture). This Security is one of the Original Securities (also referred
to as Initial Securities) referred to in the Indenture. The Initial Securities
and the Exchange Securities will be treated as a single class of securities
under the Indenture. The Indenture and the Participation Agreement impose
certain limitations on, among other things: the Incurrence of Indebtedness by
the Issuer or Hanover or its Restricted Subsidiaries, the purchase or redemption
of Capital Stock of Hanover, the Incurrence of Liens by the Issuer or Hanover or
its Restricted Subsidiaries, the sale or transfer of assets and Capital Stock of
Restricted Subsidiaries of Hanover, the issuance or sale of Capital Stock of
Restricted Subsidiaries of Hanover, the business activities and investments of
the Issuer, mergers and consolidation of Hanover, and transactions with
Affiliates of Hanover and its Restricted Subsidiaries. In addition, the
Participation Agreement limits the ability of Hanover and its Restricted
Subsidiaries to restrict distributions and dividends from Restricted
Subsidiaries.

               To guarantee the due and punctual payment of the principal,
premium, if any, and interest on the Securities and all other amounts payable by
the Issuer under the Indenture and the Securities when and as the same shall be
due and payable, whether at maturity, by acceleration or otherwise, according to
the terms of the Securities and the Indenture, the Hanover Guarantors will have
unconditionally guaranteed, upon the release of escrowed funds pursuant to an
Escrow Agreement, dated as of August 30, 2001 (the "Escrow Agreement"), among
the Issuer, Hanover Equipment Trust 2001B and Wilmington Trust Company, as
escrow agent, (and future Hanover Guarantors, together with the Hanover
Guarantors, will unconditionally guarantee) jointly and severally, upon the
occurrence of and during a Lease Event of Default, such obligations on a senior
subordinated basis pursuant to the terms of a Guarantee, to be dated as of the
date the escrowed funds are released pursuant to the Escrow Agreement, by the
Hanover Guarantors.

5.      Redemption

               Except as set forth below, the Securities will not be redeemable
at the option of the Issuer prior to September 1, 2006. On and after such date,
the Issuer may redeem all or, from time to time, a part of the Securities upon
not less than 30 nor more than 60 days' prior notice mailed by first-class mail
to each Holder's registered address and in accordance with the provisions of
Section 20.1 of the Lease, at the following redemption prices (expressed in

                                       2
<PAGE>

                                                                               3

percentages of principal amount), plus accrued and unpaid interest, if any, to
the redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date), if
redeemed during the 12-month period commencing on September 1 of the years set
forth below:

                                                                    Redemption
Period                                                              Price
------                                                              ----------
2006                                                                104.375%
2007                                                                102.917%
2008                                                                101.458%
2009 and thereafter                                                 100.000%

               Prior to September 1, 2004, to the extent that Hanover raises Net
Cash Proceeds from one or more Public Equity Offerings and such Net Cash
Proceeds are contributed toward an Equipment Purchase (as defined below), the
Issuer may on any one or more occasions redeem up to 35% of the original
principal amount of the Securities with the proceeds from an Equipment Purchase
in accordance with the provisions of Section 20.1(b) of the Lease at a
redemption price (expressed as a percentage of principal amount) of 108.75% plus
accrued and unpaid interest, if any, to the redemption date (subject to the
right of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date); provided, however, that at least 65% of
the original principal amount of the Securities must remain outstanding after
each such redemption; provided further, that each such redemption occurs within
60 days of the date of closing of such Public Equity Offering.

               In each case, the Issuer will redeem the Securities with the
proceeds from the Lessee's purchase of the Issuer's Equipment (the "Equipment
Purchase"), in accordance with Sections 20.1(a) or 20.1(b), as applicable, of
the Lease.

               In the case of any partial redemption, selection of the
Securities for redemption will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which the
Securities are listed or, if the Securities are not listed, then on a pro rata
basis, by lot or by such other method as the Trustee in its sole discretion
shall deem to be fair and appropriate, although no Securities of $1,000 in
original principal amount or less will be redeemed in part. If any Security is
to be redeemed in part only, the notice of redemption relating to such Security
shall state the portion of the principal amount thereof to be redeemed. A new
Security in principal amount equal to the unredeemed portion thereof will be
issued in the name of the Holder thereof upon cancellation of the original
Security. On and after the redemption date, interest will cease to accrue on
Securities or portions thereof called for redemption as long as the Issuer has
deposited with the Paying Agent funds in satisfaction of the applicable
redemption price pursuant to the Indenture.

               If, in the sole judgment of the trustee of the Issuer prior to
the POI Acquisition (defined below), the acquisition by the Lessee and its
affiliates of Production Operators Corporation and certain other assets of
Schlumberger Limited ("Schlumberger") and its affiliates, pursuant to that
certain Purchase Agreement dated as of June 28, 2001 by and among Hanover
Compression Limited Partnership, Schlumberger and the other parties named
therein (the "POI Acquisition"), will not be consummated by November 15, 2001,
the Issuer may at its

                                       3
<PAGE>

                                                                               4

option at any time before November 1, 2001 redeem all, but not less than all, of
the Securities then Outstanding at a redemption price (expressed as a percentage
of principal amount) of 101%, plus accrued and unpaid interest to the redemption
date ("Special Optional Redemption").

               In the event that there has been no Special Optional Redemption
and the POI Acquisition has not been consummated by November 15, 2001, on
November 30, 2001 the Issuer shall redeem all Securities then Outstanding at a
redemption price (expressed as a percentage of principal amount ) of 101%, plus
accrued and unpaid interest to the redemption date ("Special Mandatory
Redemption", and together with Special Optional Redemption, "Special
Redemption").

               If a redemption date is on or after an interest record date and
on or before the related interest payment date, the accrued and unpaid interest,
if any, will be paid to the Person in whose name the Security is registered at
the close of business on such record date, and no additional interest will be
payable to Holders whose Securities will be subject to redemption by the Issuer.

6.      Repurchase Provisions

               (a) Upon a Change of Control with respect to Hanover, any Holder
of Securities will have the right to cause the Issuer to repurchase all or any
part of the Securities of such Holder at a purchase price in cash equal to 101%
of the principal amount thereof, plus accrued and unpaid interest, if any, to
the date of repurchase (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date) as provided in, and subject to the terms of, the Indenture. The Issuer
will repurchase the Securities with the proceeds from an Equipment Purchase in
accordance with Section 20.1(c) of the Lease.

               (b) In the event of an Asset Disposition that requires the
purchase of Securities pursuant to Section 9.6 of the Participation Agreement
and Section 3.3 of the Indenture, the Issuer will be required to apply such
Excess Proceeds to the repayment of the Securities in accordance with the
procedures set forth in Section 3.3 of the Indenture. The Issuer will repurchase
the Securities with the proceeds from an Equipment Purchase in accordance with
Section 20.1(d) of the Lease.

7.      Denominations; Transfer; Exchange

               The Securities are in registered form without coupons in
denominations of principal amount of $1,000 and whole multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register the transfer of
or exchange (i) any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
for a period beginning 15 days before the mailing of a notice of Securities to
be redeemed and ending on the date of such mailing or (ii) any Securities for a
period beginning 15 days before an interest payment date and ending on such
interest payment date.

                                       4
<PAGE>

                                                                               5

8.      Persons Deemed Owners

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

9.      Unclaimed Money

               If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Issuer at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Issuer and not to the Trustee for payment.

10.     Defeasance

               Subject to certain conditions set forth in the Indenture, the
Issuer at any time may terminate some or all of its obligations under the
Securities and the Indenture if the Issuer deposits with the Trustee money or
U.S. Government Obligations for the payment of principal and interest on the
Securities to redemption or maturity, as the case may be.

11.     Amendment, Waiver

               Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount of the then outstanding
Securities and (ii) any default (other than with respect to nonpayment or in
respect to a provision that cannot be amended without the written consent of
each Securityholder affected) or noncompliance with any provision may be waived
with the written consent of the Holders of a majority in principal amount of the
then outstanding Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Securityholder, the Issuer and the Trustee
may amend the Indenture or the Securities to cure any ambiguity, omission,
defect or inconsistency, or to provide for uncertificated Securities in addition
to or in place of certificated Securities, or to add guarantees with respect to
the Securities or to secure the Securities, or to add additional covenants of
the Issuer and the Hanover Guarantors, or surrender rights and powers conferred
on the Issuer, or to comply with any request of the SEC in connection with
qualifying the Indenture under the Act, or to make any change that does not
adversely affect the rights of any Securityholder, or to provide for the
issuance of Exchange Securities.

12.     Defaults and Remedies

               Under the Indenture, Events of Default include (i) default for 30
days in payment of interest when due on the Securities; (ii) default in payment
of principal or premium, if any, on the Securities at Stated Maturity, upon
required repurchase or upon optional redemption pursuant to paragraphs 5 and 6
of the Securities, upon declaration or otherwise; (iii) the failure by Hanover
or any Hanover Guarantor to comply with its obligations under (x) Section 9.10
of the Participation Agreement or (y) prior to the execution and delivery of the
Participation Agreement, Article IV of the Indenture, which default shall
continue unremedied for a period of 30 days after receipt of notice thereof;
(iv) failure by the Issuer to comply for 30 days after notice with any of its
obligations under the covenants described under Sections 3.2 through 3.27
inclusive of the Indenture (in each case, other than a failure to purchase
Securities when required pursuant to Section 3.3 or 3.4, which failure shall
constitute an Event of Default under clause (ii)

                                       5
<PAGE>

                                                                               6

above); (v) the failure by the Issuer to comply for 60 days after notice with
its other agreements contained in the Indenture or under the Securities (other
than those referred to in (i), (ii), (iii) or (iv) above) or any covenant,
representation or warranty under any of the Operative Agreements; (vi) the
occurrence and continuation of a Lease Event of Default; (vii) the Operative
Agreements no longer create a first priority lien on all the Collateral for the
benefit of the Trustee, in its capacity as Collateral Agent; (viii) 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 Hanover or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by Hanover or any of its Restricted Subsidiaries), other than
Indebtedness owed to Hanover or a Restricted Subsidiary, whether such
Indebtedness or guarantee now exists, or is created after the date of the
Indenture, which default (a) is caused by a failure to pay principal of, or
interest or premium, if any, on such Indebtedness before the expiration of the
grace period provided in such Indebtedness ("Payment Default") or (b) results in
the acceleration of such Indebtedness prior to its maturity (the "cross
acceleration provision") 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 $20.0 million or more; (ix) certain events of
bankruptcy, insolvency or reorganization of the Issuer, Hanover or a Significant
Subsidiary or group of Restricted Subsidiaries that, taken together (as of the
latest audited consolidated financial statements for Hanover and its Restricted
Subsidiaries), would constitute a Significant Subsidiary (the "bankruptcy
provisions"); (x) failure by the Issuer, Hanover or any Restricted Subsidiary to
pay final judgments aggregating in excess of $20.0 million or its foreign
currency equivalent at the time (net of any amounts with respect to which a
reputable and creditworthy insurance company has acknowledged liability in
writing), which judgments are not paid, discharged or stayed for a period of 60
days (the "judgment default provision") or (xi) any respective Guarantee of any
of the Hanover Guarantors ceases to be in full force and effect (except as
contemplated by the terms of the Indenture) or is declared null and void in a
judicial proceeding or any Hanover Guarantor denies or disaffirms its
obligations under the Indenture, the Participation Agreement or its Hanover
Guarantee. However, a default under clauses (iv) and (v) will not constitute an
Event of Default until the Trustee or the Holders of at least 25% in principal
amount of the outstanding Securities notify the Issuer of the default and the
Issuer does not cure such default within the time specified in clauses (iv) and
(v) hereof after receipt of such notice.

               If an Event of Default (other than an Event of Default described
in clause (ix) above) occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the Securities may declare all the Securities
to be due and payable immediately. Events of Default described in clause (ix)
above will result in the Securities being due and payable immediately upon the
occurrence of such Events of Default.

               Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Securities unless it receives reasonable indemnity or security.
Subject to certain limitations, Holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing Default or
Event of Default (except a Default or Event of Default in payment of principal
or interest) if it determines that withholding notice is in their interest.

                                       6
<PAGE>

                                                                               7

13.     Trustee Dealings with the Issuer

               Subject to certain limitations set forth in the Indenture, the
Trustee under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Issuer or its Affiliates and may otherwise deal
with the Issuer or its affiliates with the same rights it would have if it were
not Trustee.

14.     No Recourse Against Others

               An incorporator, director, officer, employee, stockholder or
controlling person, as such, of each of the Issuer, or any Hanover Guarantor
shall not have any liability for any obligations of the Issuer under the
Securities, the Indenture, the Participation Agreement or any Hanover Guarantees
or for any claim based on, in respect of or by reason of such obligations or
their creation. By accepting a Security, each Securityholder waives and releases
all such liability. The waiver and release are part of the consideration for the
issue of the Securities.

15.     Authentication

               This Security shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Security.

16.     Abbreviations

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

17.     CUSIP Numbers

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

18.     Governing Law

               This Security shall be governed by, and construed in accordance
with, the laws of the State of New York.

               The Issuer will furnish to any Securityholder upon written
request and without charge to the Securityholder a copy of the Indenture which
has in it the text of this Security in larger type. Requests may be made to:

                                       7
<PAGE>

                                                                               8

                      Hanover Equipment Trust 2001B
                      c/o Wilmington Trust Company
                      Rodney Square North
                      1100 North Market Street
                      Wilmington, Delaware 19890
                      Attention: Corporate Trust Administration
                      Telecopy No.: 302-651-8882

                      with a copy to:

                      Hanover Compressor Company
                      Hanover Compression Limited Partnership
                      12001 North Houston Rossyln
                      Houston, Texas  77806
                      Attention: Chief Financial Officer

                                       8
<PAGE>

                                                                               9

                                 ASSIGNMENT FORM

               To assign this Security, fill in the form below:

               I or we assign and transfer this Security to

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

                  -----------------------------------------------------
                    (Insert assignee's soc. sec. or tax I.D. No.)

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

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

Date:                                       Your signature:
     -------------------------                             ---------------------

Signature Guarantee:
                    ------------------------------------------------------------
                         (Signature must be guaranteed)

--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.

The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.

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

CHECK ONE BOX BELOW:

          [1]  acquired for the undersigned's own account, without transfer; or

          [2]  transferred to the Issuer; or

          [3]  transferred pursuant to and in compliance with Rule 144A under
               the Securities Act of 1933, as amended (the "Securities Act"); or

          [4]  transferred pursuant to an effective registration statement under
               the Securities Act; or

          [5]  transferred pursuant to and in compliance with Regulation S under
               the Securities Act; or

                                       9
<PAGE>

                                                                              10

          [6]  transferred to an institutional "accredited investor" (as defined
               in Rule 501(a)(1), (2), (3) or (7) under the Securities Act),
               that has furnished to the Trustee a signed letter containing
               certain representations and agreements (the form of which letter
               appears as Section 2.7 of the Indenture); or

          [7]  transferred pursuant to another available exemption from the
               registration requirements of the Securities Act of 1933.

Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any person other
than the registered Holder thereof; provided, however, that if box (5), (6) or
(7) is checked, the Trustee or the Issuer may require, prior to registering any
such transfer of the Securities, in their sole discretion, such legal opinions,
certifications and other information as the Trustee or the Issuer may reasonably
request to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act of 1933, such as the exemption provided by Rule 144 under such
Act.

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

Signature Guarantee:

------------------------------      --------------------------------------------
(Signature must be guaranteed)      Signature

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

The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.

TO BE COMPLETED BY PURCHASER IF (1) OR (3) ABOVE IS CHECKED.

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

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

                                      10
<PAGE>

                                                                              11

                      [TO BE ATTACHED TO GLOBAL SECURITIES]
              SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY

               The following increases or decreases in this Global Security have
been made:

<TABLE>
<CAPTION>
                                                                              Signature of
                                   Amount of                                  authorized
              Amount of decrease   increase in         Principal Amount of    signatory of
              in Principal         Principal Amount    this Global Security   Trustee or
Date of       Amount of this       of this Global      following such         Securities
Exchange      Global Security      Security            decrease or increase   Custodian
-------       --------------       ----------          ------------           -------------
<S>           <C>                 <C>                  <C>                    <C>
</TABLE>

                                      11
<PAGE>

                                                                              12

                       OPTION OF HOLDER TO ELECT PURCHASE

               If you want to elect to have this Security purchased by the
Issuer pursuant to Section 3.3 or 3.4 of the Indenture, check either box:

                                    [ ]     [ ]
                                    3.3     3.4

               If you want to elect to have only part of this Security purchased
by the Issuer pursuant to Section 3.3 or 3.4 of the Indenture, state the amount
in principal amount (must be integral multiple of $1,000): $

Date: ____________ Your Signature ______________________________________________
                                  (Sign exactly as your name appears on the
                                          other side of the Security)

Signature Guarantee:____________________________________________________________
                                  (Signature must be guaranteed)

The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.

                                      12
<PAGE>

                                                                       EXHIBIT B

                       [FORM OF FACE OF EXCHANGE SECURITY]

                       [Depository Legend, if applicable]

No. [_____]                                  Principal Amount $250,000,000,
                                             as revised by the Schedule of
                                             Increases and Decreases in Global
                                             Security attached hereto

                                                      CUSIP NO. ________________
                                                          ISIN: ________________

                       8.75% Senior Secured Notes due 2011

               Hanover Equipment Trust 2001B, a Delaware business trust,
promises to pay to [______________], or registered assigns, the principal sum of
250,000,000 Dollars, as revised by the Schedule of Increases and Decreases in
Global Security attached hereto, on September 1, 2011.

               Interest Payment Dates:      March 1 and September 1
               Record Dates:                February 15 and August 15

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

                                            HANOVER EQUIPMENT TRUST 2001V

                                            By:
                                               ---------------------------------

TRUSTEE'S CERTIFICATE OF
  AUTHENTICATION

WILMINGTON TRUST FSB,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.

By:_________________________________
   Authorized Signatory                   Date: _______ __, 2001

                                       1
<PAGE>

                                                                               2

                   [FORM OF REVERSE SIDE OF EXCHANGE SECURITY]

                       8.75% Senior Secured Note due 2011

1.      Interest

               Hanover Equipment Trust 2001B, a Delaware business trust (such
business trust, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Issuer"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above.

               The Issuer will pay interest semiannually in arrears on March 1
and September 1 of each year commencing March 1, 2002. Interest on the
Securities will accrue from the most recent date to which interest has been paid
on the Securities or, if no interest has been paid, from September 1, 2001. The
Issuer shall pay interest on overdue principal or premium, if any (plus interest
on such interest to the extent lawful), at the rate borne by the Securities to
the extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.

2.      Method of Payment

               By at least 10:00 a.m. (New York City time) on the date on which
any principal of or interest on any Security is due and payable, the Issuer
shall irrevocably deposit with the Trustee or the Paying Agent money sufficient
to pay such principal, premium, if any, and/or interest. The Issuer will pay
interest (except Defaulted Interest) to the Persons who are registered Holders
of Securities at the close of business on the February 15 or August 15 next
preceding the interest payment date even if Securities are cancelled,
repurchased or redeemed after the record date and on or before the interest
payment date. Holders must surrender Securities to a Paying Agent to collect
principal payments. The Issuer will pay principal and interest in money of the
United States that at the time of payment is legal tender for payment of public
and private debts. Payments in respect of Securities represented by a Global
Security (including principal, premium, if any, and interest) will be made by
the transfer of immediately available funds to the accounts specified by The
Depository Trust Company. The Issuer will make all payments in respect of a
Definitive Security (including principal, premium, if any, and interest) by
mailing a check to the registered address of each Holder thereof; provided,
however, that payments on the Securities may also be made, in the case of a
Holder of a least $1,000,000 aggregate principal amount of Securities, by wire
transfer to a U.S. dollar account maintained by the payee with a bank in the
United States if such Holder elects payment by wire transfer by giving written
notice to the Trustee or the Paying Agent to such effect designating such
account no later than 15 days immediately preceding the relevant due date for
payment (or such other date as the Trustee may accept in its discretion).

3.      Paying Agent and Registrar

               Initially, Wilmington Trust FSB (the "Trustee"), will act as
Trustee, Paying Agent and Registrar. The Issuer may appoint and change any
Paying Agent, Registrar or co-registrar without notice to any Securityholder.
The Issuer or any of its Restricted Subsidiaries may act as Paying Agent,
Registrar or co-registrar.

                                       2
<PAGE>

                                                                               3

4.      Indenture

               The Issuer issued the Securities under an Indenture dated as of
August 30, 2001 (as it may be amended or supplemented from time to time in
accordance with the terms thereof, the "Indenture"), among the Issuer, the
Hanover Guarantors and the Trustee, and a Participation Agreement dated as of
August 30, 2001 (the "Participation Agreement") among the Issuer, the Lessee,
the Certificate Holders named therein, the Hanover Guarantors, the Trustee and
Wilmington Trust Company. The terms of the Securities include those stated in
the Indenture and the Participation Agreement and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) as in effect on the date of the Indenture (the "Act"). Capitalized
terms used herein and not defined herein have the meanings ascribed thereto in
the Indenture. The Securities are subject to all such terms, and Securityholders
are referred to the Indenture and the Act for a statement of those terms.

               The Securities are secured senior obligations of the Issuer
limited to $250 million aggregate principal amount (subject to Section 2.2 of
the Indenture). This Security is one of the Original Securities (also referred
to as Initial Securities) referred to in the Indenture. The Initial Securities
and the Exchange Securities will be treated as a single class of securities
under the Indenture. The Indenture and the Participation Agreement impose
certain limitations on, among other things: the Incurrence of Indebtedness by
the Issuer or Hanover or its Restricted Subsidiaries, the purchase or redemption
of Capital Stock of Hanover, the Incurrence of Liens by the Issuer or Hanover or
its Restricted Subsidiaries, the sale or transfer of assets and Capital Stock of
Restricted Subsidiaries of Hanover, the issuance or sale of Capital Stock of
Restricted Subsidiaries of Hanover, the business activities and investments of
the Issuer, mergers and consolidation of Hanover, and transactions with
Affiliates of Hanover and its Restricted Subsidiaries. In addition, the
Participation Agreement limits the ability of Hanover and its Restricted
Subsidiaries to restrict distributions and dividends from Restricted
Subsidiaries.

               To guarantee the due and punctual payment of the principal,
premium, if any, and interest on the Securities and all other amounts payable by
the Issuer under the Indenture and the Securities when and as the same shall be
due and payable, whether at maturity, by acceleration or otherwise, according to
the terms of the Securities and the Indenture, the Hanover Guarantors will have
unconditionally guaranteed, upon the release of escrowed funds pursuant to an
Escrow Agreement, dated as of August 30, 2001 (the "Escrow Agreement"), among
the Issuer, Hanover Equipment Trust 2001B and Wilmington Trust Company, as
escrow agent, (and future Hanover Guarantors, together with the Hanover
Guarantors, will unconditionally guarantee) jointly and severally, upon the
occurrence of and during a Lease Event of Default, such obligations on a senior
subordinated basis pursuant to the terms of a Guarantee, to be dated as of the
date the escrowed funds are released pursuant to the Escrow Agreement, by the
Hanover Guarantors.

5.      Redemption

               Except as set forth below, the Securities will not be redeemable
at the option of the Issuer prior to September 1, 2006. On and after such date,
the Issuer may redeem all or, from time to time, a part of the Securities upon
not less than 30 nor more than 60 days' prior notice mailed by first-class mail
to each Holder's registered address and in accordance with the provisions of
Section 20.1 of the Lease, at the following redemption prices (expressed in

                                       3
<PAGE>

                                                                               4

percentages of principal amount), plus accrued and unpaid interest, if any, to
the redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date), if
redeemed during the 12-month period commencing on September 1 of the years set
forth below:

                                                                   Redemption
Period                                                             Price
------                                                             -----------
2006                                                                104.375%
2007                                                                102.917%
2008                                                                101.458
2009 and thereafter                                                 100.000%

               Prior to September 1, 2004, to the extent that Hanover raises Net
Cash Proceeds from one or more Public Equity Offerings and such Net Cash
Proceeds are contributed toward an Equipment Purchase (as defined below), the
Issuer may on any one or more occasions redeem up to 35% of the original
principal amount of the Securities with the proceeds from an Equipment Purchase
in accordance with the provisions of Section 20.1(b) of the Lease at a
redemption price (expressed as a percentage of principal amount) of 108.75% plus
accrued and unpaid interest, if any, to the redemption date (subject to the
right of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date); provided, however, that at least 65% of
the original principal amount of the Securities must remain outstanding after
each such redemption; provided further, that each such redemption occurs within
60 days of the date of closing of such Public Equity Offering.

               In each case, the Issuer will redeem the Securities with the
proceeds from the Lessee's purchase of the Issuer's Equipment (the "Equipment
Purchase"), in accordance with Sections 20.1(a) or 20.1(b), as applicable, of
the Lease.

               In the case of any partial redemption, selection of the
Securities for redemption will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which the
Securities are listed or, if the Securities are not listed, then on a pro rata
basis, by lot or by such other method as the Trustee in its sole discretion
shall deem to be fair and appropriate, although no Securities of $1,000 in
original principal amount or less will be redeemed in part. If any Security is
to be redeemed in part only, the notice of redemption relating to such Security
shall state the portion of the principal amount thereof to be redeemed. A new
Security in principal amount equal to the unredeemed portion thereof will be
issued in the name of the Holder thereof upon cancellation of the original
Security. On and after the redemption date, interest will cease to accrue on
Securities or portions thereof called for redemption as long as the Issuer has
deposited with the Paying Agent funds in satisfaction of the applicable
redemption price pursuant to the Indenture.

               If a redemption date is on or after an interest record date and
on or before the related interest payment date, the accrued and unpaid interest,
if any, will be paid to the Person in whose name the Security is registered at
the close of business on such record date, and no additional interest will be
payable to Holders whose Securities will be subject to redemption by the Issuer.

                                       4
<PAGE>

                                                                               5

6.      Repurchase Provisions

               (a) Upon a Change of Control with respect to Hanover, any Holder
of Securities will have the right to cause the Issuer to repurchase all or any
part of the Securities of such Holder at a purchase price in cash equal to 101%
of the principal amount thereof, plus accrued and unpaid interest, if any, to
the date of repurchase (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date) as provided in, and subject to the terms of, the Indenture. The Issuer
will repurchase the Securities with the proceeds from an Equipment Purchase in
accordance with Section 20.1(c) of the Lease.

               (b) In the event of an Asset Disposition that requires the
purchase of Securities pursuant to Section 9.6 of the Participation Agreement
and Section 3.3 of the Indenture, the Issuer will be required to apply such
Excess Proceeds to the repayment of the Securities in accordance with the
procedures set forth in Section 3.3 of the Indenture. The Issuer will repurchase
the Securities with the proceeds from an Equipment Purchase in accordance with
Section 20.1(d) of the Lease.

7.      Denominations; Transfer; Exchange

               The Securities are in registered form without coupons in
denominations of principal amount of $1,000 and whole multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register the transfer of
or exchange (i) any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
for a period beginning 15 days before the mailing of a notice of Securities to
be redeemed and ending on the date of such mailing or (ii) any Securities for a
period beginning 15 days before an interest payment date and ending on such
interest payment date.

8.      Persons Deemed Owners

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

9.      Unclaimed Money

               If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Issuer at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Issuer and not to the Trustee for payment.

10.     Defeasance

               Subject to certain conditions set forth in the Indenture, the
Issuer at any time may terminate some or all of its obligations under the
Securities and the Indenture if the Issuer

                                       5
<PAGE>

                                                                               6

deposits with the Trustee money or U.S. Government Obligations for the payment
of principal and interest on the Securities to redemption or maturity, as the
case may be.

11.     Amendment, Waiver

               Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount of the then outstanding
Securities and (ii) any default (other than with respect to nonpayment or in
respect of a provision that cannot be amended without the written consent of
each Securityholder affected) or noncompliance with any provision may be waived
with the written consent of the Holders of a majority in principal amount of the
then outstanding Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Securityholder, the Issuer and the Trustee
may amend the Indenture or the Securities to cure any ambiguity, omission,
defect or inconsistency, or to provide for uncertificated Securities in addition
to or in place of certificated Securities, or to add guarantees with respect to
the Securities or to secure the Securities, or to add additional covenants of
the Issuer and the Hanover Guarantors, or surrender rights and powers conferred
on the Issuer, or to comply with any request of the SEC in connection with
qualifying the Indenture under the Act, or to make any change that does not
adversely affect the rights of any Securityholder, or to provide for the
issuance of Exchange Securities.

12.     Defaults and Remedies

               Under the Indenture, Events of Default include (i) default for 30
days in payment of interest when due on the Securities; (ii) default in payment
of principal or premium, if any, on the Securities at Stated Maturity, upon
required repurchase or upon optional redemption pursuant to paragraphs 5 and 6
of the Securities, upon declaration or otherwise; (iii) the failure by Hanover
or any Hanover Guarantor to comply with its obligations under Section 9.10 of
the Participation Agreement which default shall continue unremedied for a period
of 30 days after receipt of notice thereof; (iv) failure by the Issuer to comply
for 30 days after notice with any of its obligations under the covenants
described under Sections 3.2 through 3.27 inclusive of the Indenture (in each
case, other than a failure to purchase Securities when required pursuant to
Section 3.3 or 3.4, which failure shall constitute an Event of Default under
clause (ii) above; (v) the failure by the Issuer to comply for 60 days after
notice with its other agreements contained in the Indenture or under the
Securities (other than those referred to in (i), (ii), (iii) or (iv) above) or
any covenant, representation or warranty under any of the Operative Agreements;
(vi) the occurrence and continuation of a Lease Event of Default; (vii) the
Operative Agreements no longer create a first priority lien on all the
Collateral for the benefit of the Trustee, in its capacity as Collateral Agent;
(viii) 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 Hanover or any of its Restricted Subsidiaries (or the payment
of which is guaranteed by Hanover or any of its Restricted Subsidiaries), other
than Indebtedness owed to Hanover or a Restricted Subsidiary, whether such
Indebtedness or guarantee now exists, or is created after the date of the
Indenture, which default (a) is caused by a failure to pay principal of, or
interest or premium, if any, on such Indebtedness before the expiration of the
grace period provided in such Indebtedness ("Payment Default") or (b) results in
the acceleration of such Indebtedness prior to its maturity (the "cross
acceleration provision") and, in each case, the

                                       6
<PAGE>

                                                                               7

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 $20.0 million or more;
(ix) certain events of bankruptcy, insolvency or reorganization of the Issuer,
Hanover or a Significant Subsidiary or group of Restricted Subsidiaries that,
taken together (as of the latest audited consolidated financial statements for
Hanover and its Restricted Subsidiaries), would constitute a Significant
Subsidiary (the "bankruptcy provisions"); (x) failure by the Issuer, Hanover or
any Restricted Subsidiary to pay final judgments aggregating in excess of $20.0
million or its foreign currency equivalent at the time (net of any amounts with
respect to which a reputable and creditworthy insurance company has acknowledged
liability in writing), which judgments are not paid, discharged or stayed for a
period of 60 days (the "judgment default provision") or (xi) any respective
Guarantee of any of the Hanover Guarantors ceases to be in full force and effect
(except as contemplated by the terms of the Indenture) or is declared null and
void in a judicial proceeding or any Hanover Guarantor denies or disaffirms its
obligations under the Indenture, the Participation Agreement or its Hanover
Guarantee. However, a default under clauses (iv) and (v) will not constitute an
Event of Default until the Trustee or the Holders of at least 25% in principal
amount of the outstanding Securities notify the Issuer of the default and the
Issuer does not cure such default within the time specified in clauses (iv) and
(v) hereof after receipt of such notice.

               If an Event of Default (other than an Event of Default described
in clause (ix) above) occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the Securities may declare all the Securities
to be due and payable immediately. Events of Default described in clause (ix)
above will result in the Securities being due and payable immediately upon the
occurrence of such Events of Default.

               Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Securities unless it receives reasonable indemnity or security.
Subject to certain limitations, Holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing Default or
Event of Default (except a Default or Event of Default in payment of principal
or interest) if it determines that withholding notice is in their interest.

13.     Trustee Dealings with the Issuer

               Subject to certain limitations set forth in the Indenture, the
Trustee under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Issuer or its Affiliates and may otherwise deal
with the Issuer or its affiliates with the same rights it would have if it were
not Trustee.

14.     No Recourse Against Others

               An incorporator, director, officer, employee, stockholder or
controlling person, as such, of each of the Issuer, or any Hanover Guarantor
shall not have any liability for any obligations of the Issuer under the
Securities, the Indenture, the Participation Agreement or any Hanover Guarantees
or for any claim based on, in respect of or by reason of such obligations or

                                       7
<PAGE>

                                                                               8

their creation. By accepting a Security, each Securityholder waives and releases
all such liability. The waiver and release are part of the consideration for the
issue of the Securities.

15.     Authentication

               This Security shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Security.

16.     Abbreviations

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

17.     CUSIP Numbers

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

18.     Governing Law

               This Security shall be governed by, and construed in accordance
with, the laws of the State of New York.

               The Issuer will furnish to any Securityholder upon written
request and without charge to the Securityholder a copy of the Indenture which
has in it the text of this Security in larger type. Requests may be made to:

                      Hanover Equipment Trust 2001B
                      c/o Wilmington Trust Company
                      Rodney Square North
                      1100 North Market Street
                      Wilmington, Delaware 19890
                      Attention: Corporate Trust Administration
                      Telecopy No.: 302-651-8882

                      with a copy to:

                      Hanover Compressor Company
                      Hanover Compression Limited Partnership
                      12001 North Houston Rossyln
                      Houston, Texas  77806

                                       8
<PAGE>

                                                                               9

                      Attention: Chief Financial Officer

                                       9
<PAGE>

                                                                              10

                                 ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this Security to

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

                  ---------------------------------------------
                  (Insert assignee's soc. sec. or tax I.D. No.)

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

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

Date:                          Your signature:
     -------------------------                ----------------------------------

Signature Guarantee:
                    ------------------------------------------------------------
                                (Signature must be guaranteed)

--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.

The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.

                                      10
<PAGE>

                                                                              11

                      [TO BE ATTACHED TO GLOBAL SECURITIES]
              SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY

               The following increases or decreases in this Global Security have
been made:
<TABLE>
<CAPTION>

                                                                              Signature of
                                   Amount of                                  authorized
              Amount of decrease   increase in         Principal Amount of    signatory of
              in Principal         Principal Amount    this Global Security   Trustee or
Date of       Amount of this       of this Global      following such         Securities
Exchange      Global Security      Security            decrease or increase   Custodian
-------       --------------       ----------          ------------           -------------
<S>           <C>                  <C>                 <C>                    <C>
</TABLE>

                                      11
<PAGE>

                       OPTION OF HOLDER TO ELECT PURCHASE

               If you want to elect to have this Security purchased by the
Issuer pursuant to Section 3.3 or 3.4 of the Indenture, check either box:

                                    [ ]     [ ]
                                    3.3     3.4

               If you want to elect to have only part of this Security purchased
by the Issuer pursuant to Section 3.3 or 3.4 of the Indenture, state the amount
in principal amount (must be integral multiple of $1,000): $

Date: ____________ Your Signature ______________________________________________
                                    (Sign exactly as your name appears on the
                                            other side of the Security)

Signature Guarantee:
                     -----------------------------------------------------------
                                  (Signature must be guaranteed)

The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.

                                      12
<PAGE>

                                                                              13

                                                                         ANNEX A

                        [FORM OF PARTICIPATION AGREEMENT]Prepared by MERRILL CORPORATION

QuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 4.2    
  

 
  REGISTRATION RIGHTS AGREEMENT    

    Dated
as of July 1, 1999 

between 

PLUM
CREEK TIMBER COMPANY, INC. 

and 

THE
PARTIES NAMED HEREIN 

 
 
 

TABLE OF CONTENTS    
  

	 
	 	 
	 	PAGE

	Section 1.	 	Definitions	 	1
	

Section 2.	
 	
Demand Registrations	
 	

2
	

Section 3.	
 	
Piggyback Registrations	
 	

4
	

Section 4.	
 	
Hold-back Agreements	
 	

5
	

Section 5.	
 	
Registration Procedures	
 	

6
	

Section 6.	
 	
Registration Expenses	
 	

9
	

Section 7.	
 	
Indemnification	
 	

9
	

Section 8.	
 	
Rules 144 and 144	
 	

12
	

Section 9.	
 	
Underwritten Registrations	
 	

12
	

Section 10.	
 	
Covenants of Holders	
 	

12
	

Section 11.	
 	
Miscellaneous	
 	

12

i

 
 

REGISTRATION RIGHTS AGREEMENT    
  

    THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered into as of July 1, 1999, by and among PLUM CREEK TIMBER COMPANY, INC., a
Delaware corporation (the "Company"), and each of the parties from time to time executing a signature page hereto (each an "Investor" and collectively the "Investors"). 

    WHEREAS,
pursuant to an Amended and Restated Agreement and Plan of Conversion, dated as of July 17, 1998 (the "Conversion Agreement"), by and among the Company, Plum Creek
Timber Company, L.P., and Plum Creek Management Company, L.P., the Company has agreed to issue to the Investors, upon the terms and subject to the conditions set forth in the Conversion Agreement,
shares of common stock, par value $.01 per share, of the Company and shares of special voting stock, par value $.01 per share, of the Company (the "Special Voting Stock"); 

    WHEREAS,
in the Conversion Agreement, the Company has agreed to provide the registration rights set forth in this Agreement; and 

    WHEREAS,
the execution and delivery of this Agreement is a condition to the Closing (as defined in the Conversion Agreement). 

    NOW
THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows: 

    Section 1.  Definitions.

    As
used in this Agreement, the following terms shall have the meanings set forth below: 

    "Charter"
means the Certificate of Incorporation of the Company, as amended from time to time. 

    "Commission"
means the Securities and Exchange Commission or any other Federal agency at the time administering the Securities Act. 

    "Common
Stock" means the Company's common stock, par value $.01 per share, or any other shares of capital stock or other securities of the Company into which such shares of Common
Stock shall be reclassified or changed, including, by reason of a merger, consolidation, reorganization or recapitalization. If the Common Stock has been so reclassified or changed, or if the Company
pays a dividend or makes a distribution on the Common Stock in shares of capital stock, or subdivides (or combines) its outstanding shares of Common Stock into a greater (or smaller) number of shares
of Common Stock, a share of Common Stock shall be deemed to be such number of shares of stock and amount of other securities to which a holder of a share of Common Stock outstanding immediately prior
to such change, reclassification, exchange, dividend, distribution, subdivision or combination would be entitled. 

    "Delay
Period" has the meaning set forth in Section 2(d) of this Agreement. 

    "Demand
Notice" has the meaning set forth in Section 2(a) of this Agreement. 

    "Demand
Registration" has the meaning set forth in Section 2(a) of this Agreement. 

    "Effectiveness
Period" has the meaning set forth in Section 2(d) of this Agreement. 

    "Exchange
Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder. 

    "Holder"
means a person who owns Registrable Securities and is either (i) an Investor or a Permitted Transferee of an Investor that has agreed to be bound by the terms of this
Agreement as if such person were an Investor, (ii) upon the death of any Holder, the executor of the estate of such Holder or such Holder's heirs, devisees, legatees or assigns or
(iii) upon the disability of any Holder, any guardian or conservator of such Holder. 

    "Interruption
Period" has the meaning set forth in Section 5(o) of this Agreement. 

 

    "Losses" has the meaning set forth in Section 7(a) of this Agreement. 

    "Misstatement/Omission"
has the meaning set forth in Section 7(a) of this Agreement. 

    "NASD"
means the National Association of Securities Dealers, Inc. 

    "Other
Security Holders" has the meaning set forth in Section 2(b) of this Agreement. 

    "Permitted
Transferee" means, with respect to any Person or Persons, (i) any natural person who is related by blood or marriage to any such Person, (ii) any trust or
partnership of which there are no principal beneficiaries or partners, as the case may be, other than any such Person or Permitted Transferees of such Person, (iii) any charitable foundation
over which any such Person has discretionary authority, (iv) any other Person that directly or indirectly controls or is controlled by or is under common control with such Person,
(v) any partners or members of such Person, and (vi) any heirs or executors of any such Person. 

    "Person"
means any natural person, corporation, partnership, firm, association, trust, government, governmental agency, limited liability company or any other entity, whether acting
in an individual, fiduciary or other capacity. 

    "Piggyback
Registration" has the meaning set forth in Section 3(a) of this Agreement. 

    "Registrable
Securities" means (i) the shares of Common Stock issued to the Investors pursuant to the Conversion Agreement, (ii) the shares of Common Stock issuable upon
Conversion of the Special Voting Stock and (iii) any Common Stock issued or issuable with respect to such Common Stock referred to above by way of stock dividends or stock splits or in
connection with a combination of shares, recapitalization, merger, consolidation, or other reorganization or otherwise. As to any particular Registrable Securities, such securities will cease to be
Registrable Securities when (i) they have been distributed to the public pursuant to an offering registered under the Securities Act, (ii) they have been distributed to the public
pursuant to Rule 144 (or any successor provision) under the Securities Act or (iii) they are eligible for immediate sale pursuant to Rule 144(k) under the Securities Act. 

    "Registration
Statement" means any registration statement under the Securities Act of the Company that covers any of the Registrable Securities pursuant to the provisions of this
Agreement, including the
related prospectus and any information deemed to be a part of such prospectus pursuant to Rule 430A under the Securities Act, all amendments and supplements to such registration statement or
prospectus, including pre- and post-effective amendments (including any registration statement filed pursuant to Rule 462(b) under the Securities Act), all exhibits
thereto and all material incorporated by reference or deemed to be incorporated by reference in such registration statement. 

    "Required
Investors" means Holders of at least 25% of the aggregate amount of all Registrable Securities. 

    "Securities
Act" means the Securities Act of 1933, as amended, or any similar Federal statute, and the rules and regulations of the Commission promulgated thereunder. 

    "Special
Voting Stock" has the meaning set forth in the recitals hereto. 

    Unless
otherwise stated, other capitalized terms contained herein have the meanings set forth in the Conversion Agreement. 

    Section 2.  Demand Registrations.

    (a) The
Holders shall have the right, commencing on the first anniversary of the date hereof by written notice (the "Demand Notice") given to the Company, to request
the Company to register under and in accordance with the provisions of the Securities Act all or part of the Registrable Securities designated by such Holders (a "Demand Registration"). Upon receipt
of any 

2

 

such Demand Notice from any Holder, the Company will promptly notify all other Holders of the receipt of such Demand Notice and allow them the opportunity to include Registrable Securities held by
them in the proposed registration by submitting their own Demand Notice. Notwithstanding anything herein to the contrary, the Company shall not be required to honor a request for a Demand Registration
if the Registrable Securities requested by the initiating Holders to be so registered does not constitute at least one million shares (or any lesser number constituting all of the
then-remaining shares) of Common Stock (subject to adjustment in the event of any reclassification, recapitalization, stock split, combination or exchange of the Common Stock, or any
dividend on the Common Stock payable in stock or other securities). The Holders shall not be entitled to make a Demand Notice prior to six months following the last date the Company is required to
keep a previously demanded Registration Statement effective pursuant to Section 2(d) hereof. 

    (b) Subject
to paragraph (a) above, as soon as practicable, but in any event within 60 days of the date on which the Company first receives a Demand
Notice pursuant to Section 2(a) hereof, the Company shall file with the Commission a Registration Statement on the appropriate form for the registration and sale of the total number of
Registrable Securities specified in such Demand Notice in accordance with the intended method or methods of distribution specified by the Holders in such Demand Notice. Subject to paragraph (h)
below, the Company may include in such registration other securities for sale for its own account or for the account of any other holders of Common Stock ("Other Security Holders"). The Company shall
use reasonable best efforts to cause such Registration Statement to be declared effective by the Commission as soon as reasonably practicable. 

    (c) Subject
to Section 2(d), upon the occurrence of any event that would cause the Registration Statement (A) to contain a material misstatement or
omission or (B) to be not effective and usable for resale of Registrable Securities during the period that such Registration Statement is required to be effective and usable, the Company shall
file an amendment to the Registration Statement as soon as reasonably practicable, in the case of clause (A), correcting any such misstatement or omission and, in the case of either
clause (A) or (B), use reasonable best efforts to cause such amendment to be declared effective and such Registration Statement to become usable as soon as reasonably practicable thereafter. 

    (d) The
Company agrees to use reasonable best efforts to keep any Registration Statement filed pursuant to this Section 2 continuously effective and usable for
the sale of Registrable Securities (i) until 180 days from the date on which the Commission declares such Registration Statement effective, or (ii) until all the Registrable
Securities covered by such Registration Statement have been sold pursuant to such Registration Statement, if earlier, in either case as such period may be extended pursuant to this Section 2.
Notwithstanding the foregoing, the Company shall have the right to delay the filing of any Registration Statement otherwise required to be prepared and filed by the Company pursuant to this
Section 2, or to suspend the use of any Registration Statement, for a period not in excess of 90 days (a "Delay Period") if any executive officer of the Company determines that in such
executive officer's reasonable judgment and good faith the registration and distribution of the Registrable Securities covered or to be covered by such Registration Statement would materially
interfere with any pending financing, acquisition, reorganization or other material transaction involving the Company or any of its subsidiaries or would require disclosure of any other material
corporate development that the Company is not otherwise required or prepared to disclose. The Company will promptly give the Holders written notice of such determination and an approximation of the
period of the anticipated delay; provided, however, that the aggregate number of days included in all Delay Periods during any consecutive
12 months shall not exceed the aggregate of (x) 180 days minus (y) the number of days occurring during all Interruption Periods (as defined in Section 5(o) hereof)
during such 

3

 

consecutive 12 months. Each Holder agrees to cease all public disposition efforts under such Registration Statement with respect to Registrable Securities held by such Holder immediately upon
receipt of notice of the beginning of any Delay Period. The Company shall provide written notice to the Holders of the end of each Delay Period. The time period for which the Company is required to
maintain the effectiveness of a Registration Statement referred to above shall be extended by the
aggregate number of days of all Delay Periods and Interruption Periods affecting such Registration, and such period and any extension thereof is hereinafter referred to as the "Effectiveness Period." 

    (e) The
Company shall not enter into any agreement granting any Other Security Holder piggyback rights to include such Other Security Holder's securities in any
registration in which the Holders have the right to include Registrable Securities on a priority basis more favorable to such Other Security Holder than is provided to the Holders pursuant to
Section 3(b). 

    (f)  Holders
of a majority in number of the Registrable Securities to be included in a Demand Registration pursuant to this Section 2 may, at any time prior to
the effective date of the Registration Statement in respect thereof, revoke such request by providing a written notice to the Company to such effect; provided,
however, that any such revocation shall be counted as a demand under this section if such revocation occurs after the Company has filed a registration statement. 

    (g) Preemption of Demand Registration. Notwithstanding anything to the contrary contained herein, after
receiving a written request for a Demand Registration, the Company may elect to effect an underwritten primary registration in lieu of the Demand Registration if the Company's Board of Directors
believes that such primary registration would be in the best interests of the Company. If the Company so elects to effect a primary registration, the Company shall give prompt written notice (which
shall be given not later than 20 days after the date of the Demand Notice) to all holders of the Registrable Securities of its intention to effect such a registration and shall afford the
holders of the Registrable Securities the rights contained in Section 3 with respect to Piggyback Registrations. In the event that the Company so elects to effect a primary registration after
receiving a request for a Demand Registration, the Company shall use reasonable best efforts to have the Registration Statement declared effective by the Commission as soon as reasonably practicable.
In addition, the request for a Demand Registration shall be deemed to have been withdrawn and such primary registration shall not be deemed to be a Demand Registration. 

    (h) Priority in Cutback. If a Demand Registration is an underwritten offering and includes securities for
sale by the Company, and the managing underwriter (such underwriters to be chosen by the Holders included in such registration, subject to the Company's reasonable approval) advises the Company, in
writing, that, in its good faith judgment, the number of securities requested to be included in such registration exceeds the number which can be sold in such offering without materially and adversely
affecting the marketability of the offering, then the Company will include in any such registration the maximum number of shares which the managing underwriter advises the Company can be sold in such
offering allocated as follows: first the Registrable Securities requested to be included in such registration by the Holders, pro rata on the basis of the number of Registrable Securities requested to
be included by such Holders, second the securities requested to be included in such registration by the Company for its own account, and third the securities requested to be included in such
registration by the Company for the account of Other Security Holders. 

    Section 3.  Piggyback Registrations.

    (a) Right to Piggyback. Whenever the Company proposes to register any of its equity securities under the
Securities Act (other than a registration on Form S-4 relating solely to a transaction described in Rule 145 of the Securities Act or a registration on
Form S-8 or any successor forms thereto), whether or not for sale for its own account, the Company will give 

4

 

prompt written notice of such proposed filing to all Holders at least 30 days before the anticipated filing date. Such notice shall offer such Holders the opportunity to register such amount of
Registrable Securities as they shall request (a "Piggyback Registration"). Subject to Sections 3(b) and 3(c) hereof, the Company shall include in each such Piggyback Registration all Registrable
Securities with respect to which the Company has received written requests for inclusion therein within 28 days after such notice has been given by the Holders to the Company. If the
Registration Statement relating to the Piggyback Registration is to cover an underwritten offering, such Registrable Securities shall be included in the underwriting on the same terms and conditions
as the securities otherwise being sold through the underwriters. Each Holder shall be permitted to withdraw all or part of the Registrable Securities from a Piggyback Registration at any time prior to
the effective time of such Piggyback Registration. 

    (b) Priority on Primary Registrations. If a Piggyback Registration is an underwritten primary
registration on behalf of the Company, by or through one or more underwriters of recognized standing and the managing underwriters advise the Company in writing that in their good faith judgment the
number of securities requested to be included in such registration exceeds the number which can be sold in such offering without materially and adversely affecting the marketability of the offering,
then the Company will include in the Registration Statement relating to such registration (i) first, the securities the Company proposes to sell, (ii) second, the Registrable Securities
requested to be included in such registration by the Holders thereof, reduced, if necessary, on a pro rata basis, based on the amount of Registrable
Securities requested to be included therein, and (iii) third, if no Registrable Securities were excluded pursuant to this Section 3(b), securities other than Registrable Securities
requested to be included in such registration by Other Security Holders; provided, that if such registration contemplates an "over-allotment
option" on the part of underwriters, to the extent such over-allotment option is exercised and Holders were excluded from registering any Registrable Securities pursuant to the priority
provisions of this Section 3(b), then the over-allotment option shall be exercised first with respect to the Registrable Securities and the Principal Securities on a pro rata basis
to the extent of any exclusion. 

    (c) Priority on Secondary Registrations. If a Piggyback Registration is an underwritten secondary
registration on behalf of Other Security Holders, by or through one or more underwriters of recognized standing and the managing underwriter(s) advise the Company in writing that in their good faith
judgment the number of securities requested to be included in such registration exceeds the number which can be sold in such offering without materially and adversely affecting the marketability of
the offering, the Company will include in such registration, the securities owned by such Other Security Holders and the Registrable Securities requested to be included in such registration by the
Holders thereof, reduced, in each case, on a pro rata basis, based on the amount of Registrable Securities owned by each such other Security Holder or
Holder. 

    Section 4.  Hold-back Agreements.

    (a) The
Company agrees (i) if so required by the managing underwriter of an underwritten offering effected pursuant to a Registration under Section 2 or 3
hereof, not to effect any public or private sale or distribution of securities of the same type (including any underlying securities) as the Registrable Securities included in such underwritten
registration, or any securities convertible into or exchangeable or exercisable for such securities, during the seven days prior to the pricing of such offering and until the earlier of (A) the
end of the 180-day period beginning on the date of pricing of such offering (except as part of such underwritten offering and except pursuant to registrations on
Form S-4 or Form S-8 (or any successor form to such Form)), unless the managing underwriter for such offering otherwise agrees, and (B) the abandonment of
such offering, and (ii) to use reasonable best efforts to cause each holder of securities of the same type as the 

5

 

securities included in such underwritten offering, or any securities convertible into or exchangeable or exercisable for such securities, in each case purchased from the Company at any time after the
date of this Agreement (other than in a registered public offering) to agree not to effect any public or private sale or distribution or otherwise dispose (including sales pursuant to Rule 144
under the Securities Act) of any such securities during such period (except as part of such underwritten registration, if otherwise permitted), unless the managing underwriter for such offering
otherwise agrees. 

    (b) If
the Company registers securities of the Company in connection with an underwritten public offering of Common Stock solely by the Company, the Holders, if so
requested by the managing underwriter of such underwritten offering, agree not to effect any public sale or distribution of any of the Registrable Securities, including any sale pursuant to
Rule 144 under the Securities Act (other than as a part of such underwritten public offering) without the consent of the Company or such managing underwriter during the period commencing on a
date specified by the underwriter, such date not to exceed seven days prior to the effective date of such registration statement, and ending on the earlier of (A) 180 days after the
pricing of such offering, (B) the abandonment of such offering and (C) the first date on which the Company or any affiliate or executive officer of the Company is permitted to sell
shares of Common Stock of the Company. 

    Section 5.  Registration Procedures.

    Whenever
the Company is required to register Registrable Securities pursuant to Section 2 or 3 hereof, the Company will use reasonable best efforts to effect the registration
to permit the sale of such Registrable Securities in accordance with the intended method or methods of disposition thereof, and pursuant thereto the Company will as expeditiously as possible: 

    (a) prepare
and file with the Commission a Registration Statement with respect to such Registrable Securities as prescribed by Section 2 or 3 on a form available
for the sale of the Registrable Securities by the holders thereof in accordance with the intended method or methods of distribution thereof and use reasonable best efforts to cause each such
Registration Statement to become and remain effective within the time periods and otherwise as provided herein; 

    (b) prepare
and file with the Commission such amendments, (including post-effective amendments) to the Registration Statement and such supplements to the
Prospectus as may be necessary to keep such Registration Statement effective and to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such
Registration Statement until such time as all of such securities have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof set forth in such
Registration Statement; 

    (c) furnish
to each selling Holder of Registrable Securities covered by a Registration Statement and to each underwriter, if any, such number of copies of such
Registration Statement, each amendment and post-effective amendment thereto, the Prospectus included in such Registration Statement (including each preliminary prospectus and any
supplement to such Prospectus and any other prospectus filed under Rule 424 of the Securities Act), in each case including all exhibits, and such other documents as such Holder may reasonably
request in order to facilitate the disposition of the Registrable Securities owned by such Holder or to be disposed of by such underwriter (the Company hereby consenting to the use in accordance with
all applicable law of each such Registration Statement (or amendment or post-effective amendment thereto) and each such Prospectus (or preliminary prospectus or supplement thereto) by each
such Holder and the underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by such Registration Statement or Prospectus); 

6

 

    (d) use reasonable best efforts to register or qualify and, if applicable, to cooperate with the selling Holders, the underwriters, if any, and their respective counsel
in connection with the registration or qualification (or exemption from such registration or qualification) of, the Registrable Securities for offer and sale under the securities or blue sky laws of
such jurisdictions as any selling Holder or managing underwriters (if any) shall reasonably request, to keep each such registration or qualification (or exemption therefrom) effective during the
period such Registration Statement is required to be kept effective and to do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Securities
covered by the applicable Registration Statement; provided, that the Company will not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this paragraph or (ii) consent to general service of process or taxation in any such jurisdiction where it is not so
subject; 

    (e) use
reasonable best efforts to cause all such Registrable Securities to be listed on each securities exchange on which securities of the same class as the
Registrable Securities are then listed and, if not so listed, to be listed on the NASD automated quotation system and, if listed on the NASD automated quotation system, use reasonable best efforts to
secure designation of all such Registrable Securities
covered by such Registration Statement as a NASDAQ Security within the meaning of Rule 11Aa3-l under the Exchange Act or, failing that, to secure NASDAQ authorization for such
Registrable Securities and, without limiting the generality of the foregoing, to arrange for at least two market makers to register as such with respect to such Registrable Securities with the NASD; 

    (f)  provide
a transfer agent and registrar for all such Registrable Securities and a CUSIP number for all such Registrable Securities not later than the effective date
of such Registration Statement; 

    (g) comply
with all applicable rules and regulations of the Commission, and make available to its security holders an earnings statement satisfying the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the Securities Act) no later than 45 days after the end of any
12-month period (or 90 days after the end of any 12-month period if such period is a fiscal year) (or in each case within such extended period of time as may be
permitted by the Commission for filing the applicable report with the Commission) (i) commencing at the end of any fiscal quarter in which Registrable Securities are sold to underwriters in an
underwritten offering or (ii) if not sold to underwriters in such an offering, commencing on the first day of the first fiscal quarter of the Company after the effective date of a Registration
Statement, which earnings statement shall cover said 12-month periods; 

    (h) use
reasonable best efforts to prevent the issuance of any order suspending the effectiveness of a Registration Statement or suspending the qualification (or
exemption from qualification) of any of the Registrable Securities included therein for sale in any jurisdiction, and, in the event of the issuance of any stop order suspending the effectiveness of a
Registration Statement, or of any order suspending the qualification of any Registrable Securities included in such Registration Statement for sale in any jurisdiction, the Company will use reasonable
best efforts promptly to obtain the withdrawal of such order at the earliest possible moment; 

    (i)  obtain
"cold comfort" letters and updates thereof (which letters and updates (in form, scope and substance) shall be reasonably satisfactory to the managing
underwriters, if any, and the Holders) from the independent certified public accountants of the Company (and, if necessary, any other independent certified public accountants of any subsidiary of the
Company or of any business acquired by the Company for which financial statements and financial data are, or are required to be, included in the Registration Statement), addressed to each of the
underwriters, if any, and each selling Holder of Registrable Securities, such letters to be in customary form and 

7

 

covering matters of the type customarily covered in "cold comfort" letters in connection with underwritten offerings and such other matters as the underwriters, if any, or the Holders of a majority of
the Registrable Securities being sold may reasonably request; 

    (j)  obtain
opinions of independent counsel to the Company and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to the managing underwriters, if any, and the Holders of a majority of the Registrable Securities being sold), addressed to each selling Holder and each of the underwriters, if any,
covering the matters customarily covered in opinions of issuer's counsel requested in underwritten offerings, such as the effectiveness of the Registration Statement and such other matters as may be
requested by such counsel and underwriters, if any; 

    (k) promptly
notify the selling Holders and the managing underwriters, if any, and confirm such notice in writing, 

    (1) when
a Prospectus or any supplement or post-effective amendment to such Prospectus has been filed, and, with respect to a Registration Statement or any
post-effective amendment thereto, when the same has become effective, 

    (2) of
any request by the Commission or any other Federal or state governmental authority for amendments or supplements to a Registration Statement or related
Prospectus or for additional information, 

    (3) of
the issuance by the Commission of any stop order suspending the effectiveness of a Registration Statement or of any order preventing or suspending the use of any
Prospectus or the initiation of any proceedings by any Person for that purpose, 

    (4) of
the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of a Registration Statement or
any of the Registrable Securities for offer or sale under the securities or blue sky laws of any jurisdiction, or the contemplation, initiation or threatening, of any proceeding for such purpose, and 

    (5) of
the happening of any event or the existence of any facts that make any statement made in such Registration Statement or Prospectus untrue in any material respect
or that require the making of any changes in such Registration Statement or Prospectus so that it will not contain any untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made (in the case of any Prospectus), not misleading (which notice shall be
accompanied by an instruction to the selling Holders and the managing underwriters, if any, to suspend the use of the Prospectus until the requisite changes have been made); 

    (l)  if
requested by the managing underwriters, if any, or a Holder of Registrable Securities being sold, promptly incorporate in a prospectus, supplement or
post-effective amendment such information as the managing underwriters, if any, and the Holders of a majority of the Registrable Securities being sold reasonably request to be included
therein relating to the sale of the Registrable Securities, including,
without limitation, information with respect to the number of shares of Registrable Securities being sold to underwriters, the purchase price being paid therefor by such underwriters and with respect
to any other terms of the underwritten offering of the Registrable Securities to be sold in such offering, and make all required filings of such prospectus, supplement or post-effective
amendment promptly following notification of the matters to be incorporated in such supplement or post-effective amendment; 

    (m) furnish
to each selling Holder of Registrable Securities and the managing underwriter, without charge, at least one signed copy of the Registration Statement; 

8

 

    (n) as promptly as practicable upon the occurrence of any event contemplated by clause 5(k)(5) above, prepare a supplement or post-effective
amendment to the Registration Statement or the Prospectus, or any document incorporated therein by reference, or file any other required document so that, as thereafter delivered to the purchasers of
the Registrable Securities being sold hereunder, the Prospectus will not contain an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration
Statement or Prospectus or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and 

    (o) if
such offering is an underwritten offering, enter into such agreements (including an underwriting agreement in form, scope and substance as is customary in
underwritten offerings) and take all such other appropriate and reasonable actions requested by the Holders owning a majority of the Registrable Securities being sold in connection therewith or by the
managing underwriters (including cooperating in reasonable marketing efforts, including participation by senior executives of the Company in any "roadshow" or similar meeting with potential investors)
in order to expedite or facilitate the disposition of such Registrable Securities, and in such connection, provide indemnification provisions and procedures substantially to the effect set forth in
Section 7 hereof with respect to all parties to be indemnified pursuant to said Section. The above shall be done at each closing under such underwriting or similar agreement, or as and to the
extent required thereunder. 

    Each
Holder agrees by acquisition of such Registrable Securities that, upon receipt of written notice from the Company of the happening of any event of the kind described in
Section 5(k), such Holder will forthwith discontinue disposition of such Registrable Securities covered by such Registration Statement until such Holder's receipt of the copies of the
supplemented or amended Registration Statement contemplated by Section 5(n), or until it is advised in writing by the Company that the use of the applicable Prospectus may be resumed, and has
received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such prospectus (such period during which disposition is discontinued being
an "Interruption Period"), and, if so directed by the Company, such Holder will deliver to the Company all copies of the Prospectus covering such Registrable Securities current at the time of receipt
of such notice. 

    Section 6.  Registration Expenses.

    The
Company shall bear all expenses incurred in connection with the registration or attempted registration of the Registrable Securities pursuant to Sections 2 and 3 of this Agreement
as provided herein. Such expenses shall include, without limitation, all printing, legal and accounting expenses incurred by the Company and all registration and filing fees imposed by the Commission,
any state securities commission or the New York Stock Exchange or, if the Common Stock is not then listed on the New York Stock Exchange, the principal national securities exchange or national market
system on which the Common Stock is then traded or quoted. Notwithstanding the foregoing sentence, Holders shall be responsible for any pro rata share of brokerage or underwriting commissions and
taxes of any kind (including, without limitation, transfer taxes) with respect to any disposition, sale or transfer of Registrable Securities and for any legal, accounting and other expenses incurred
by them in connection with any Registration Statement. 

    Section 7.  Indemnification.

    (a) Indemnification by the Company. The Company agrees to indemnify, to the fullest extent permitted by
law, each Holder, each affiliate of a Holder and each officer, director, employee, counsel, agent or representative of such Holder and its affiliates and each Person who controls any such Person
(within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act) against, and hold it and them harmless from, all losses, claims, damages, liabilities,
costs (including, without limitation, costs of preparation and attorneys' fees and disbursements) 

9

 

and expenses, including expenses of investigation (collectively, "Losses") arising out of, caused by or based upon any untrue or alleged untrue statement of material fact contained in any Registration
Statement, or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading (a "Misstatement/Omission"), or any violation
or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state
securities law, except that the Company shall not be liable insofar as such Misstatement/Omission or violation is made in reliance upon and in conformity with information furnished in writing to the
Company by such Holder expressly for use therein; provided, further that the Company shall not be liable for a Holder's failure to deliver or cause to be delivered (to the extent such delivery is
required under the Securities Act) the Prospectus contained in the Registration Statement, furnished to it by the Company at or prior to the time such action is required by the Securities Act to the
person claiming a Misstatement/Omission if such Misstatement/Omission was corrected in such Registration Statement. In connection with an underwritten offering, the Company will indemnify such
underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution, their officers and directors and each Person who controls such
underwriters (within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act) to the same extent as provided above with respect to the indemnification of
the Holders. This indemnity shall be in addition to any other indemnification arrangements to which the Company may otherwise be party. 

    (b) Indemnification by the Holders. In connection with any Registration Statement in which a Holder is
participating, each such Holder agrees to indemnify, to the fullest extent permitted by law the Company and each affiliate, employee, counsel, agent, representative, director or officer of the Company
and each Person who controls the Company (within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act) against, and hold it harmless from, any Losses
arising out of or based upon (i) any Misstatement/Omission contained in the Registration Statement, if and to the extent that such Misstatement/Omission arose out of or was based upon
information furnished in writing by such Holder for use therein, or (ii) the failure by the Holder to deliver or cause to be delivered (to the extent such delivery is required under the
Securities Act) the Prospectus contained in the Registration Statement, furnished to it by the Company at or prior to the time such action is required by the Securities Act to the person claiming a
Misstatement/Omission if such Misstatement/Omission was corrected in such Registration Statement. Notwithstanding the foregoing, the obligation to indemnify will be individual (several and not joint)
to each Holder and will be limited to the net amount of proceeds (net of payment of all expenses) received by such Holder from the sale of Registrable Securities pursuant to such Registration
Statement giving rise to such indemnification obligation. 

    (c) Conduct of Indemnification Proceedings. In case any action, claim or proceeding shall be brought
against any Person entitled to indemnification hereunder, such indemnified party shall promptly notify each indemnifying party in writing, and such indemnifying party shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to such indemnified party and payment of all fees and expenses incurred in connection with the defense thereof. The failure to so notify
such indemnifying party shall not affect any obligation it may have to any indemnified party under this Agreement or otherwise except to the extent that (as finally determined by a court of competent
jurisdiction (which determination is not subject to review or appeal)) such failure materially prejudiced such indemnifying party. Each indemnified party shall have the right to employ separate
counsel in such action, claim or proceeding and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of each indemnified party unless: (i) such
indemnifying party has agreed to pay such expenses; (ii) such indemnifying party has failed promptly to assume the defense and employ counsel reasonably satisfactory to such indemnified party;
or (iii) the named parties to any such action, claim or 

10

 

proceeding (including any impleaded parties) include both such indemnified party and such indemnifying party or an affiliate or controlling person of such indemnifying party, and such indemnified
party shall have been advised in writing by counsel that either (x) there may be one or more legal defenses available to it which are different from or in addition to those available to such
indemnifying party or such affiliate or controlling person or (y) a conflict of interest may exist if such counsel represents such indemnified party and such indemnifying party or its affiliate
or controlling person; provided, however, that such indemnifying party shall not, in connection with any one such action or proceeding or separate but
substantially similar or related actions or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be responsible hereunder for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel), which counsel shall be designated by such indemnified party. 

    No
indemnified party shall be liable for any settlement effected without its written consent. Each indemnifying party agrees, jointly and severally, that it will not, without the
indemnified party's prior written consent, consent to entry of any judgment or settle or compromise any pending or threatened claim, action or proceeding in respect of which indemnification or
contribution may be sought hereunder unless the foregoing contains an unconditional release, in form and substance reasonably satisfactory to the indemnified parties, of the indemnified parties from
all liability and obligation arising therefrom. The indemnifying party's liability to any such indemnified party hereunder shall not be extinguished solely because any other indemnified party is not
entitled to indemnity hereunder. 

    (d) Survival. The indemnification provided for under this Agreement will (i) remain in full force
and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling Person of such indemnified party, (ii) survive the transfer of
securities and (iii) survive the termination of this Agreement. 

    (e) Right to Contribution. If the indemnification provided for in this Section 7 is unavailable
to, or insufficient to hold harmless, an indemnified party under Section 7(a) or Section 7(b) above in respect of any Losses referred to in such Sections, then each applicable
indemnifying party shall have an obligation to contribute to the amount paid or payable by such indemnified party as a result of such Losses in such proportion as is appropriate to reflect the
relative fault of the Company, on the one hand, and of the Holder, on the other, in connection with the Misstatement/Omission which resulted in such Losses, taking into account any other relevant
equitable considerations. The amount paid or payable by a party as a result of the Losses referred to above shall be deemed to include, subject to the limitations set forth in Section 7(c)
above, any legal or other fees or expenses reasonably incurred by such party in connection with any investigation, lawsuit or legal or administrative action or proceeding. 

    The
relative fault of the Company, on the one hand, and of the Holder, on the other, shall be determined by reference to, among other things, whether the relevant
Misstatement/Omission relates to information supplied by the Company or by the Holder and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such
Misstatement/Omission. 

    The
Company and each Holder agree that it would not be just and equitable if contribution pursuant to this Section 7(e) were determined by pro
rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this
Section 7(e), a Holder shall not be required to contribute any amount in excess of the amount by which (i) the amount (net of payment of all expenses) at which the securities that were
sold by such Holder and distributed to the public were offered to the public exceeds (ii) the amount of any damages which such Holder has otherwise been required to pay by reason of such
Misstatement/Omission. 

11

 

    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. 

    Section 8.  Rules 144 and 144A. 

    The
Company shall timely file the reports required to be filed by it under the Securities Act and the Exchange Act (including but not limited to the reports under sections 13 and
15(d) of the Exchange Act referred to in subparagraph (c) of Rule 144 adopted by the Commission under the Securities Act) and the rules and regulations adopted by the Commission
thereunder (or, if the Company is not required to file such reports, it will, upon the request of any holder of Registrable Securities, make publicly available other information) and will take such
further action as any holder of Registrable Securities may reasonably request, all to the extent required from time to time to enable such Holder to sell Registrable Securities without registration
under the Securities Act within the limitation of the exemptions provided by (a) Rule 144 and Rule 144A under the Securities Act, as such Rules may be amended from time to time,
or (b) any similar rule or regulation hereafter adopted by the Commission. 

    Section 9.  Underwritten Registrations.

    In
the case of any underwritten offering pursuant to a Demand Registration under Section 2, the managing or lead underwriter or underwriters thereof shall be selected by the
Holders included in such registration, subject to the Company's reasonable approval. No Person may participate in any registration hereunder which is underwritten unless such Person (i) agrees
to sell such Person's securities on the basis provided in any underwriting arrangements approved by the Person or Persons entitled hereunder to approve such arrangements and (ii) completes and
executes all questionnaires, powers of attorney, customary indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements;  provided, that no Holder
included in any underwritten registration shall be required to make any representations or warranties to the Company or the
underwriters other than representations and warranties regarding such Holder and such Holder's intended method of distribution. 

    Section 10.  Covenants of Holders.

    Each
of the Holders hereby agrees (a) to cooperate with the Company and to furnish to the Company all such information in connection with the preparation of the Registration
Statement and any filings with any state securities commissions as the Company may reasonably request, (b) to the extent required by the Securities Act, to deliver or cause delivery of the
prospectus contained in the Registration Statement, any amendment or supplement thereto, to any purchaser of the Registrable Securities covered by the Registration Statement from the Holder and
(c) to notify the Company within three months after any sale of Registrable Securities by such Holder or, in the case of a sale of all or substantially all of the Registrable Securities owned
by a Holder, within ten days after such sale. 

    Section 11.  Miscellaneous.

    (a) No Inconsistent Agreements. The Company will not hereafter enter into any agreement with respect to
its securities which is inconsistent with, adversely effects or violates the rights granted to the Holders in this Agreement. 

    (b) Remedies. Any Person having rights under any provision of this Agreement will be entitled to enforce
such rights specifically to recover damages caused by reason of any breach of any provision of this Agreement and to exercise all other rights provided in the Conversion Agreement or granted by law.
The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Agreement and hereby agree to waive the defense in any action for
specific performance or injunctive relief that a remedy at 

12

 

law would be adequate. Accordingly, any party may in its sole discretion apply to any court of law or equity of competent jurisdiction (without posting any bond or other security) for specific
performance and for other injunctive relief in order to enforce or prevent violation of the provisions of this Agreement. 

    (c) Amendments and Waivers. Except as otherwise provided herein, the provisions of this Agreement,
including the provisions of this sentence, may be amended, modified, supplemented or waived only upon the prior written consent of the Company and Holders of a majority of the outstanding Registrable
Securities. 

    (d) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the
successors and assigns of the Company. This Agreement may only be assigned by any Holder to any other Holder, unless otherwise consented to by the Company (such consent not to be unreasonably
withheld) and any other attempted assignment hereof by any Holder will be void and of no effect and shall terminate all obligations of the Company hereunder with respect to such Holder. None of the
rights of any Investor or Holder may be assigned other than to a Holder who agrees in writing to be bound by this Agreement. The Company shall be given written notice by the transferring Investor or
Holder at the time of the transfer stating the name and address of the transferee and identifying the Registrable Securities transferred, provided, that  failure to give such notice shall not affect the
validity of such transfer or assignment. 

    (e) Severability. In the event that any one or more of the provisions contained herein, or the
application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other
respect and of the remaining
provisions hereof shall not be in any way impaired or affected, it being intended that the rights and privileges of the parties hereto shall be enforceable to the fullest extent permitted by law. 

    (f)  Counterparts. This Agreement may be executed in any number of counterparts, any one of which need
not contain the signatures of more than one party, but each of which when so executed shall be deemed to be an original and all such counterparts taken together shall constitute one and the same
Agreement. 

    (g) Descriptive Headings: Interpretation. The descriptive headings of this Agreement are inserted for
convenience of reference only and shall not limit or otherwise affect the meaning hereof. The use of the word "including" in this Agreement shall be by way of example rather than by limitation. 

    (h) Notices. All notices, demands or other communications to be given or delivered under or by reason of
the provisions of this Agreement shall be in writing and shall be deemed to have been given when delivered personally to the recipient, sent to the recipient by reputable air courier guaranteeing
overnight delivery (charges prepaid), mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid or sent by telecopier. Such notices, demands and other
communications shall be sent to each Investor at the address indicated below such Investor's name on the signature pages to the Purchase Agreement and to the Company at the address indicated below: 

13

 

Plum
Creek Timber Company, Inc.

999 Third Avenue, Suite 2300

Seattle, Washington 98104

(206) 467-3799 (fax)

Attention: President and Chief Executive Officer 

with
a copy (which shall not constitute notice) to: 

Skadden,
Arps, Slate, Meagher & Flom LLP

300 South Grand Avenue, Suite 3400

Los Angeles, California 90071

(213) 687-5600 (fax)

Attention: Jonathan H. Grunzweig, Esq. 

or
to such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party. Any notice, demand or other communication given
hereunder will be deemed to have been given as of the date so delivered; as of the first business day after being delivered to an overnight air courier guaranteeing overnight delivery; on the fifth
business day after being mailed; or when transmission completed, if telecopied; as the case may be. 

    (i)  GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK. THE COMPANY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY WASHINGTON STATE COURT SITTING IN THE CITY OF SEATTLE OR ANY
FEDERAL COURT SITTING IN THE CITY OF SEATTLE IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE REGISTRABLE SECURITIES, AND IRREVOCABLY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. EACH PARTY AGREES THAT IT WILL NOT COMMENCE ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY OTHER
JURISDICTION. EACH PARTY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY
SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. 

    (j)  Entire Agreement. This 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. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject matter. 

    (k) Attorneys' Fees. In any action or proceeding brought to enforce any provision of this Agreement, or
where any provision hereof is validly asserted as a defense, the prevailing party, as determined by the court, shall be entitled to recover reasonable attorneys' fees in addition to any other
available remedy. 

14

    IN
WITNESS WHEREOF the parties hereto have or have caused this Registration Rights Agreement to be duly executed as of the date first above written. 

	 	 	 	 
	 	 	THE COMPANY:
	

 	
 	

 	

 
	 	 	PLUM CREEK TIMBER COMPANY, INC.
	

 	
 	

 	

 
	 	 	By:	/s/ JAMES A. KRAFT

	 	 	Name:	James A. Kraft
	 	 	Title:	Vice President, Gen. Counsel and Secretary
	

 	
 	

 	

 
	 	 	THE INVESTORS:
	

 	
 	

 	

 
	 	 	PC ADVISORY PARTNERS I, L.P.
	

 	
 	

 	

 
	 	 	By:	/s/ WILLIAM J. PATTERSON

	 	 	Name:	William J. Patterson
	 	 	Title:	 
	

 	
 	

 	

 
	 	 	Address for notices:

c/o SPO Partners Co.

591 Redwood Highway

Suite 3215

Mill Valley, California 94941

(415) 383-5126 (fax)

Attention: President and Chief Executive Officer
	

 	
 	

 	

 
	 	 	With a copy (which shall not constitute notice) to:

Sullivan & Cromwell

1888 Century Park East

21st Floor

Los Angeles, California 90067

(310) 712-8800 (fax)

Attention: Alison Ressler, Esq.
	

 	
 	

 	

 
	 	 	PCMC INTERMEDIATE HOLDINGS, L.P.
	

 	
 	

 	

 
	 	 	By:	/s/ WILLIAM J. PATTERSON

	 	 	Name:	William J. Patterson
	 	 	Title:	 
	

 	
 	

 	

 
	 	 	Address for Notices:

c/o SPO Partners Co.

591 Redwood Highway

Suite 3215

Mill Valley, California 94941

(415) 383-5126 (fax)

Attention: President and Chief Executive Officer
	

 	
 	

 	

 
	 	 	With a copy (which shall not constitute notice) to:

Sullivan & Cromwell

1888 Century Park East

21st Floor

Los Angeles, California 90067

(310) 712-8800 (fax)

Attention: Alison Ressler, Esq.

 
 

Registration Rights Agreement
  Holder Signature Page    
  

	 	 	 
	 	 	HOLDER
	

 	
 	

 
	

 	
 	

 
	 	 	
 Name:
	

 	
 	

 
	 	 	Address for Notice:
	

 	
 	

 
	 	 	

	

 	
 	

	

 	
 	

	

 	
 	

	

 	
 	

 

QuickLinks

Exhibit 4.2

REGISTRATION RIGHTS AGREEMENT

TABLE OF CONTENTS

REGISTRATION RIGHTS AGREEMENT

Registration Rights Agreement Holder Signature Page

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00031-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00031-of-00352.parquet"}]]