Document:

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                                                                     Exhibit 4.2

                            PRIDE INTERNATIONAL, INC.

                                       and

                              JPMORGAN CHASE BANK,

                                       as Trustee

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

                          FIRST SUPPLEMENTAL INDENTURE

                            Dated as of July 7, 2004

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

                           Supplementing the Indenture
                                   dated as of
                                  July 1, 2004

                          7 3/8% SENIOR NOTES DUE 2014

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                                TABLE OF CONTENTS

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ARTICLE 1 SUPPLEMENT OF THE ORIGINAL INDENTURE......................................................        1

   Section 1.01.  Supplement to Article I of the Original Indenture.................................        1
   Section 1.02.  Supplement to Article II of the Original Indenture................................       27
   Section 1.03.  Supplement to Article III of the Original Indenture...............................       27
   Section 1.04.  Supplement to Article IV of the Original Indenture................................       32
   Section 1.05.  Supplement to Article V of the Original Indenture.................................       42
   Section 1.06.  Supplement to Article VI of the Original Indenture................................       43
   Section 1.07.  Supplement to Article VIII of the Original Identure...............................       44
   Section 1.08.  Supplement to Article IX of the Original Indenture................................       45
   Section 1.09.  New Article XI....................................................................       45
   Section 1.10.  Effect of Article 1...............................................................       49

ARTICLE 2 THE NOTES.................................................................................       49

   Section 2.01.  Form and Terms....................................................................       49
   Section 2.02.  Designation, Amount, etc..........................................................       50
   Section 2.03.  Transfer of Transfer Restricted  Securities.......................................       50
   Section 2.04.  Restrictive Legend................................................................       52

ARTICLE 3 REPRESENTATIONS OF THE COMPANY............................................................       53

   Section 3.01.  Authority of the Company..........................................................       53
   Section 3.02.  Truth of Recitals and Statements..................................................       53

ARTICLE 4 CONCERNING THE TRUSTEE....................................................................       53

   Section 4.01.  Acceptance of Trusts..............................................................       53
   Section 4.02.  No Responsibility of Trustee for Recitals, Etc....................................       54

ARTICLE 5 MISCELLANEOUS PROVISIONS..................................................................       54

   Section 5.01.  Relation to the Original Indenture................................................       54
   Section 5.02.  Meaning of Terms..................................................................       54
   Section 5.03.  Counterparts of Supplemental Indenture............................................       54
   Section 5.04.  Governing Law.....................................................................       54
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EXHIBIT A:    Form of Note

EXHIBIT B:    Form of Supplemental Indenture

EXHIBIT C:    Certificate  to be Delivered  Upon  Exchange or  Registration  of
              Transfer of Securities Pursuant to Rule 144A, Etc.

EXHIBIT D:    Certificate to be Delivered in Connection with Transfers of
              Securities Pursuant to Regulation S

APPENDIX A:   Form of Registration Rights Agreement

                                       i
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         THIS FIRST SUPPLEMENTAL INDENTURE, dated as of July 7, 2004 is between
Pride International, Inc., a Delaware corporation (the "Company"), and JPMorgan
Chase Bank, a New York state banking corporation, as Trustee (the "Trustee")
under the Indenture (as defined below).

                              W I T N E S S E T H:

         WHEREAS, the Company has duly authorized the issuance from time to time
of its unsecured debentures, notes or other evidences of indebtedness (the
"Securities"), which are to be issued in one or more series, and the Company has
heretofore made, executed and delivered to the Trustee its Indenture dated as of
July 1, 2004 (the "Original Indenture") pursuant to which the Securities are
issuable;

         WHEREAS, Sections 2.01, 2.03 and 9.01 of the Original Indenture provide
that the form or terms of any series of Securities may be established in an
Indenture supplemental thereto, and the Company desires to establish in this
First Supplemental Indenture both the form and terms of a series of Securities
designated as its 7 3/8% Senior Notes due 2014 (the "Notes"); and

         WHEREAS, all things necessary to authorize the execution and delivery
of this First Supplemental Indenture, to establish the Notes as provided for in
this First Supplemental Indenture, and to make the Original Indenture, as
supplemented by this First Supplemental Indenture and as it may otherwise be
supplemented thereafter with applicability to the Notes (the Original Indenture,
as so supplemented, being sometimes referred to herein as the "Indenture"), a
valid agreement of the Company, in accordance with its terms, have been done;

         NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH that for
and in consideration of the premises and the purchase of the Notes by the
Holders, the Company and the Trustee mutually covenant and agree, solely for the
equal and proportionate benefit of the respective Holders from time to time of
Notes, as follows:

                                    ARTICLE 1

                      SUPPLEMENT OF THE ORIGINAL INDENTURE

         SECTION 1.01. Supplement to Article I of the Original Indenture.
Section 1.01 of the Original Indenture is supplemented or superseded with
respect to the Notes, in the case of definitional paragraphs that may be
inconsistent, by inserting therein, in alphabetical order, the following
definitional paragraphs:

                  "Additional Interest" means any additional interest owing with
         respect to the Notes under a Registration Rights Agreement. Unless the
         context otherwise requires, all references to "interest" in relation to
         the Notes include any Additional Interest that may be payable thereon.

                  "Additional Notes" has the meaning specified in Section
         2.02(b) of the First Supplemental Indenture.

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                  "Adjusted Net Assets" of a Subsidiary Guarantor at any date
         shall mean the amount by which the Fair Value of the Properties of such
         Subsidiary Guarantor exceeds the total amount of liabilities,
         including, without limitation, contingent liabilities (after giving
         effect to all other fixed and contingent liabilities incurred or
         assumed on such date), but excluding liabilities under its Subsidiary
         Guarantee, of such Subsidiary Guarantor at such date.

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

                  "Asset Sale" means any direct or indirect sale, conveyance,
         transfer, lease or other disposition (including any disposition by
         means of a merger or consolidation) by the Company or any of its
         Subsidiaries to any Person other than the Company or a Wholly Owned
         Subsidiary, in one transaction or a series of related transactions, of:

                           (1)      any Capital Stock of any Subsidiary, except
         for directors' qualifying shares or certain minority interests sold to
         other Persons solely due to local law requirements that there be more
         than one stockholder, but which are not in excess of what is required
         for such purpose, or

                           (2)      any of the Company's or its Subsidiaries'
         other Property other than:

                                    (A)      sales of drill-string components or
                  obsolete or worn out equipment in the ordinary course of
                  business or other assets that, in the Company's reasonable
                  judgment, are no longer used or useful in the conduct of its
                  or its Subsidiaries' business,

                                    (B)      any drilling contract, charter
                  (bareboat or otherwise) or other lease of Property entered
                  into by the Company or any of its Subsidiaries in the ordinary
                  course of business, other than any Bargain Purchase Contract,

                                    (C)      a Permitted Investment or
                  Restricted Payment permitted under Section 4.10,

                                    (D)      a Change in Control,

                                    (E)      a consolidation, merger or
                  disposition of all or substantially all of the assets of the
                  Company and its Subsidiaries, taken as a whole, in compliance
                  with the provisions of Section 5.01,

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                                    (F)      any trade or exchange by the
                  Company or any of its Subsidiaries of one or more drilling
                  rigs or other vessels or equipment for one or more other
                  Replacement Assets owned or held by another Person, if:

                           -        the Fair Value of the Property traded or
                                    exchanged by the Company or such Subsidiary
                                    (including cash or cash equivalents to be
                                    delivered by the Company or such Subsidiary)
                                    is reasonably equivalent to the Fair Value
                                    of the asset (together with cash or cash
                                    equivalents to be received by the Company or
                                    such Subsidiary) acquired, as determined in
                                    good faith by the principal financial
                                    officer of the Company for Fair Values less
                                    than or equal to $25 million, in good faith
                                    by the Board of Directors for Fair Values
                                    greater than $25 million but less than or
                                    equal to $100 million and by written
                                    appraisal by a nationally (or industry)
                                    recognized investment banking firm or
                                    appraisal firm for Fair Values greater than
                                    $100 million, and

                           -        such exchange is approved by a majority of
                                    the Company's disinterested directors,

                                    (G)      transfers of the Pride Illinois,
                  Pride Kentucky, Pride West Virginia and Pride Pennsylvania,

                                    (H)      Securitization Transactions and
                  Sale and Lease-Back Transactions permitted under Section 4.15
                  and

                                    (I)      any transaction or series of
                  related transactions that, but for this clause (I), would be
                  Asset Sales, if:

                           -        the Company elects to designate such
                                    transaction or series of related
                                    transactions as not constituting an Asset
                                    Sale, and

                           -        the aggregate Net Available Proceeds from
                                    such transaction or any such series of
                                    related transactions so designated do not
                                    exceed $10,000,000.

                  An Asset Sale also includes the requisition of title to,
         seizure of or forfeiture of any Property, or any actual or constructive
         total loss or an agreed or compromised total loss of any Property.

                  "Asset Sale Offer" has the meaning specified in Section 4.14.

                  "Average Life" means, as of any date, with respect to any debt
         security or preferred stock, the quotient obtained by dividing (i) the
         sum of the products of (x) the number of years from such date to the
         date of each scheduled principal payment (including any sinking fund or
         mandatory redemption payment requirements) of such debt security or
         preferred stock multiplied in each case by (y) the amount of such
         principal payment by (ii) the sum of all such principal payments.

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                  "Bargain Purchase Contract" means a drilling contract, charter
         (bareboat or otherwise) or lease that provides for acquisition of
         Property by the other party to the agreement during or at the end of
         its term for less than Fair Market Value of the Property at the time
         such right to acquire the Property is granted.

                  "Capital Lease Obligation" means, at any time as to any Person
         with respect to any Property leased by such Person as lessee, the
         amount of the liability with respect to such lease that would be
         required at such time to be capitalized and accounted for as a capital
         lease on the balance sheet of such Person prepared in accordance with
         GAAP. For purposes of Section 4.16, a Capital Lease Obligation shall be
         deemed secured by a Lien on the Property being leased.

                  "Capital Stock" in any Person means any and all shares,
         interests, partnership interests, participations or other equivalents
         in the equity interest (however designated) in such Person and any
         rights (other than debt securities convertible into an equity
         interest), warrants or options to acquire an equity interest in such
         Person.

                  "Cash Proceeds" means, with respect to any Asset Sale or Sale
         and Lease-Back Transaction by any Person, the aggregate consideration
         received for such transaction by such Person in the form of cash or
         cash equivalents (including any amounts of insurance or other proceeds
         received in connection with an Asset Sale of the type described in the
         last sentence of the definition of "Asset Sale"), including payments
         for deferred payment obligations when received in the form of cash or
         cash equivalents (except to the extent that such obligations are
         financed or sold with recourse to such Person or any subsidiary
         thereof). For purposes of this definition, "cash or cash equivalents"
         shall be deemed to include noncash consideration received with respect
         to an Asset Sale to the extent that such noncash consideration consists
         of:

                           (1)      publicly traded debt securities rated as
         "BBB-" or higher by S&P and "Baa3" or higher by Moody's, or

                           (2)      other Indebtedness of a Person if:

                           -        the lowest rated long-term, unsecured debt
                                    obligation issued by such Person is rated
                                    "BBB-" or higher by S&P and "Baa3" or higher
                                    by Moody's, or

                           -        in the case of other Indebtedness, the
                                    payment of such other Indebtedness is
                                    secured by an irrevocable letter of credit
                                    issued by a commercial bank having capital
                                    and surplus in excess of $100 million and
                                    long-term, unsecured debt obligations rated
                                    at least "A-" by S&P and "A3" by Moody's, or

                           (3)      the items described in clauses (1), (2),
         (3), (4) and (5) under the definition of "Permitted Investments."

                  "Change in Control" means: (1) a determination by the Company
         that any Person or group (as defined in Section 13(d)(3) or 14(d)(2) of
         the Exchange Act) other than a

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         Parent Holding Company has become the direct or indirect beneficial
         owner (as defined in Rule 13d-3 under the Exchange Act) of more than
         50% of the Voting Stock of the Company; (2) the Company is merged with
         or into or consolidated with another Person and, immediately after
         giving effect to the merger or consolidation, less than 50% of the
         outstanding Voting Stock of the surviving or resulting Person is then
         beneficially owned (within the meaning of Rule 13d-3 of the Exchange
         Act) in the aggregate by (x) the stockholders of the Company
         immediately prior to such merger or consolidation, or (y) if the record
         date has been set to determine the stockholders of the Company entitled
         to vote on such merger or consolidation, the stockholders of the
         Company as of such record date, or (z) a Parent Holding Company; (3)
         the Company, either individually or in conjunction with one or more
         Subsidiaries, sells, conveys, transfers or leases, or the Subsidiaries
         sell, convey, transfer or lease, all or substantially all of the assets
         of the Company and the Subsidiaries, taken as a whole (either in one
         transaction or a series of related transactions), including Capital
         Stock of the Subsidiaries, to any Person (other than a Parent Holding
         Company or a Wholly Owned Subsidiary of the Company); (4) the
         liquidation or dissolution of the Company; or (5) the first day on
         which a majority of the individuals who constitute the Board of
         Directors are not Continuing Directors.

                  "Change in Control Purchase Date" has the meaning specified in
         Section 3.12(a).

                  "Change in Control Purchase Notice" has the meaning specified
         in Section 3.12(c).

                  "Change in Control Purchase Price" has the meaning specified
         in Section 3.12(a).

                  "Code" means the Internal Revenue Code of 1986, as amended,
         and any successor statute.

                  "Common Stock" means common stock, par value $.01 per share,
         of the Company as it exists on the Issue Date or any other Capital
         Stock of the Company into which such Common Stock shall be reclassified
         or changed.

                  "Consolidated Current Liabilities" of any Person means, as of
         any date, the total liabilities (including tax and other proper
         accruals) of such Person and its subsidiaries (other than Non-Recourse
         Subsidiaries) on a consolidated basis at such date which may properly
         be classified as current liabilities in accordance with GAAP, after
         eliminating (1) all intercompany items between such Person and its
         subsidiaries (other than Non-Recourse Subsidiaries) or between
         subsidiaries (other than between a subsidiary that is not a
         Non-Recourse Subsidiary and Non-Recourse Subsidiaries) and (2) all
         current maturities of long-term Indebtedness.

                  "Consolidated Interest Coverage Ratio" means, as of the date
         of the transaction giving rise to the need to calculate the
         Consolidated Interest Coverage Ratio (the "Transaction Date"), the
         ratio of:

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                           (1)      the Company's aggregate amount of EBITDA for
         the latest four fiscal quarters for which financial information is
         available immediately prior to the applicable Transaction Date (the
         "Determination Period") to

                           (2)      the Company's aggregate Consolidated
         Interest Expense that is anticipated to accrue during a period
         consisting of the fiscal quarter in which the Transaction Date occurs
         and the three subsequent fiscal quarters (based upon the pro forma
         amount and maturity of, and interest payments on, Indebtedness of the
         Company and its consolidated Subsidiaries expected by the Company to be
         outstanding on the Transaction Date and reasonably anticipated by it to
         be outstanding from time to time during such period), assuming for the
         purposes of this measurement the continuation of market interest rates
         prevailing on the Transaction Date and base interest rates on floating
         interest rate obligations equal to the base interest rates on such
         obligations in effect as of the Transaction Date.

                  This calculation is subject to the following qualifications:

                           (1)      if the Company or any of its consolidated
         Subsidiaries is a party to any Interest Swap Obligation that would have
         the effect of changing the interest rate on any Indebtedness of the
         Company or any of its consolidated Subsidiaries for such four-quarter
         period (or a portion thereof), the resulting rate will be used for such
         four-quarter period or portion thereof;

                           (2)      any Consolidated Interest Expense of the
         Company with respect to Indebtedness incurred or retired by the Company
         or any of its Subsidiaries during the fiscal quarter in which the
         Transaction Date occurs will be calculated as if such Indebtedness were
         so incurred or retired on the first day of the fiscal quarter in which
         the Transaction Date occurs; and

                           (3)      if the transaction giving rise to the need
         to calculate the Consolidated Interest Coverage Ratio would have the
         effect of increasing or decreasing EBITDA in the future and if such
         increase or decrease is readily quantifiable and is directly
         attributable to such transaction, EBITDA will be calculated on a pro
         forma basis as if the transaction had occurred on the first day of the
         Determination Period, and if, during the same four fiscal quarters:

                           -        the Company or any of its consolidated
                                    Subsidiaries shall have engaged in any Asset
                                    Sale, EBITDA for such period will be reduced
                                    by an amount equal to the EBITDA (if
                                    positive), or increased by an amount equal
                                    to the EBITDA (if negative), directly
                                    attributable to the Property that is the
                                    subject of the Asset Sale for such period
                                    calculated on a pro forma basis as if such
                                    Asset Sale and any related retirement of
                                    Indebtedness had occurred on the first day
                                    of such period or

                           -        the Company or any of its consolidated
                                    Subsidiaries shall have acquired any
                                    material assets other than in the ordinary
                                    course of

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                                    business, EBITDA and Consolidated Interest
                                    Expense (if Indebtedness is incurred or
                                    assumed in connection with such acquisition)
                                    will be calculated on a pro forma basis as
                                    if such acquisition and related financing
                                    had occurred on the first day of the period.

                  "Consolidated Interest Expense" means, with respect to any
         Person for any period, without duplication, the sum of:

                           (1)      the aggregate amount of cash and noncash
         interest expense (including capitalized interest) of such Person and
         its subsidiaries (other than Non-Recourse Subsidiaries) for such period
         as determined on a consolidated basis in accordance with GAAP for
         Indebtedness, including, without limitation:

                           -        any amortization of debt discount;

                           -        net costs associated with Interest Swap
                                    Obligations (including any amortization of
                                    discounts);

                           -        the interest portion of any deferred payment
                                    obligation;

                           -        all accrued interest; and

                           -        all commissions, discounts and other fees
                                    and charges owed with respect to letters of
                                    credit, bankers acceptances or similar
                                    facilities paid or accrued, or scheduled to
                                    be paid or accrued, during such period other
                                    than for Non-Recourse Indebtedness;

                           (2)      dividends on preferred stock of such Person
         (and preferred stock of its subsidiaries (other than Non-Recourse
         Subsidiaries) if paid to a Person other than such Person or its
         subsidiaries) declared and payable in cash;

                           (3)      the portion of any rental obligation of such
         Person or its subsidiaries (other than Non-Recourse Subsidiaries) for
         any Capital Lease Obligation allocable to interest expense in
         accordance with GAAP;

                           (4)      the portion of any rental obligation of such
         Person or its subsidiaries (other than Non-Recourse Subsidiaries) in
         respect of any Sale and Lease-Back Transaction allocable to interest
         expense (determined as if such were treated as a Capital Lease
         Obligation); and

                           (5)      to the extent any debt of any other Person
         is guaranteed by such Person or any of its subsidiaries (other than
         Non-Recourse Subsidiaries), the aggregate amount of interest paid,
         accrued or scheduled to be paid or accrued, by such other Person during
         such period attributable to any such debt.

         There shall be excluded from the calculation of Consolidated Interest
         Expense, to the extent included above, amortization or writeoff of
         deferred financing costs of such Person

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         and its subsidiaries during such period and any charge related to or
         any premium or penalty paid in connection with redeeming or retiring
         any Indebtedness of such Person and its subsidiaries prior to its
         stated maturity. In each case, Consolidated Interest Expense shall be
         calculated after elimination of intercompany accounts among such Person
         and its subsidiaries and as determined in accordance with GAAP.

                  "Consolidated Net Income" of any Person means, for any period,
         the aggregate net income (or net loss, as the case may be) of such
         Person and its subsidiaries for such period on a consolidated basis,
         determined in accordance with GAAP; provided however, there shall be
         excluded from the calculation the following, without duplication:

                           (1)      any net income of any Non-Recourse
         Subsidiary, except that the Company's or any Subsidiary's equity in the
         net income of such Non-Recourse Subsidiary for such period will be
         included in such Consolidated Net Income up to the aggregate amount of
         cash or cash equivalents actually distributed by such Non-Recourse
         Subsidiary during such period to the Company or such Subsidiary as a
         dividend or other distribution;

                           (2)      gains and losses from Asset Sales or
         reserves relating thereto;

                           (3)      items classified as extraordinary (other
         than the tax benefit, if any, of the utilization of net operating loss
         carryforwards or alternative minimum tax credits) and expenses for
         early retirement of debt;

                           (4)      in the case of any computation of
         Consolidated Net Income for purposes of determining compliance with
         Section 4.10, the net income of any Person acquired by such specified
         Person (other than a Non-Recourse Subsidiary) or any of its
         subsidiaries in a pooling-of-interests transaction for any period prior
         to the date of such acquisition;

                           (5)      any gain or loss, net of taxes, realized on
         the termination of any employee pension benefit plan;

                           (6)      the net income of any subsidiary of such
         specified Person to the extent that the transfer to that Person of that
         income is not at the time permitted, directly or indirectly, by any
         means (including by dividend, distribution, advance or loan or
         otherwise), by operation of the terms of its charter or any agreement
         with a Person other than with such specified Person, instrument held by
         a Person other than by such specified Person, judgment, decree, order,
         statute, law, rule or governmental regulations applicable to such
         subsidiary or its stockholders, except for any dividends or
         distributions actually paid during such period by such subsidiary to
         such Person;

                           (7)      the cumulative effect of changes in
         accounting principles; and

                           (8)      non-cash compensation expense for management
         stock options and other incentive or benefit plans.

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                  "Consolidated Net Tangible Assets" of any Person means, as of
         any date, Consolidated Tangible Assets of such Person at such date,
         after deducting therefrom (without duplication of deductions) all
         Consolidated Current Liabilities of such Person at such date.

                  "Consolidated Tangible Assets" of any Person means, as of any
         date, the consolidated assets of such Person and its subsidiaries
         (other than Non-Recourse Subsidiaries) at such date, after eliminating
         intercompany items between such Person and its subsidiaries (other than
         Non-Recourse Subsidiaries) or between subsidiaries (other than between
         a subsidiary that is not a Non-Recourse Subsidiary and Non-Recourse
         Subsidiaries) and after deducting from such total (i) the net book
         value of all assets that would be classified as intangibles under GAAP
         (including, without limitation, goodwill, organizational expenses,
         trademarks, trade names, copyrights, patents, licenses and any rights
         in any thereof) and (ii) any prepaid expenses, deferred charges and
         unamortized debt discount and expense, each such item determined in
         accordance with GAAP.

                  "Continuing Director" means an individual (i) who is a member
         of the Board of Directors and (ii) either (A) who was a member of the
         Board of Directors on the Issue Date or (B) whose nomination for
         election or election to the Board of Directors was approved by vote of
         at least a majority of the directors then still in office who were
         either directors on the Issue Date or whose election or nomination for
         election was previously so approved.

                  "Credit Facilities" means the one or more credit facilities to
         which the Company or one or more Subsidiaries is a party entered into
         from time to time, together with any related notes, guarantees,
         collateral documents and other instruments and other documents, in each
         case as amended, restated, supplemented, increased or otherwise
         modified from time to time, and any renewal, extension, refinancing,
         refund, repurchase or replacement (or successive extensions, renewals,
         refinancings, refundings, repurchases or replacements) of any of the
         foregoing.

                  "Currency Hedge Obligations" means, at any time as to any
         Person, the obligations of such Person at such time which were incurred
         in the ordinary course of business pursuant to any foreign currency
         exchange agreement, option or future contract or other similar
         agreement or arrangement designed to protect against or manage such
         Person's or any of its subsidiaries' exposure to fluctuations in
         foreign currency exchange rates.

                  "Determination Period" has the meaning specified under clause
         (1) of the definition of "Consolidated Interest Coverage Ratio."

                  "Distribution Compliance Period" has the meaning specified in
         Section 2.03(c) of the First Supplemental Indenture.

                  "EBITDA" means, with respect to any Person for any period, the
         Consolidated Net Income of such Person, for such period, plus to the
         extent reflected in the income

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         statement of such Person for such period from which Consolidated Net
         Income is determined, without duplication:

                           (1)      Consolidated Interest Expense,

                           (2)      income tax expense,

                           (3)      depreciation expense,

                           (4)      amortization expense,

                           (5)      any other non-cash charges, and

                           (6)      reasonable expenses related to financings,
         asset sales and other transactions outside the ordinary course of
         business.

                  "Equity Offering" means any public or private sale made after
         the Issue Date by the Company of its Common Stock for cash on a primary
         basis.

                  "Excess Proceeds" has the meaning specified in Section 4.14.

                  "Exchange Notes" means the Company's 7 3/8% Senior Notes due
         2014, issued pursuant to this Indenture in connection with an Exchange
         Offer.

                  "Exchange Offer" means an offer by the Company, pursuant to a
         Registration Rights Agreement, to certain Holders of Transfer
         Restricted Securities, to issue and deliver to such Holders, in
         exchange for such Transfer Restricted Securities, a like aggregate
         principal amount of Exchange Notes, which offer is registered under the
         Securities Act.

                  "Fair Market Value" means Fair Value as determined in good
         faith by (a) the principal financial officer of the Company if less
         than or equal to $25 million and (b) the Board of Directors if greater
         than $25 million.

                  "Fair Value" means the price that could be negotiated in an
         arm's-length free market transaction, for cash, between a willing
         seller and a willing buyer, neither of whom is under undue pressure or
         compulsion to complete the transaction.

                  "First Supplemental Indenture" means the First Supplemental
         Indenture, dated as of the Issue Date, between the Company and the
         Trustee, supplementing and amending the Original Indenture as set forth
         therein.

                  "Funding Subsidiary Guarantor" has the meaning specified in
         Section 11.01.

                  "GAAP" means, at any date of determination, United States
         generally accepted accounting principles, consistently applied, that
         are applicable to the circumstances as of such date; provided, however,
         that all calculations made for purposes of determining

                                     - 10 -
<PAGE>

         compliance with the provisions set forth in Sections 4.09 through 4.17
         shall utilize GAAP in effect at the Issue Date.

                  The term "incur" has the meaning specified in Section 4.11.

                  "Indebtedness" as applied to any Person means, at any time,
         without duplication:

                           (1)      any obligation of such Person, contingent or
         otherwise, for borrowed money;

                           (2)      any obligation of such Person evidenced by
         bonds, debentures, notes or other similar instruments;

                           (3)      any obligation of such Person upon which
         interest charges are customarily paid (other than accounts payable
         incurred in the ordinary course of business);

                           (4)      any obligation of such Person issued or
         assumed as the deferred purchase price of Property (other than accounts
         payable incurred in the ordinary course of business);

                           (5)      any Capital Lease Obligation;

                           (6)      any Indebtedness of any other Person secured
         by (or for which the obligee thereof has an existing right, contingent
         or otherwise, to be secured by) any Lien on Property owned or acquired,
         whether or not any Indebtedness secured thereby has been assumed, by
         such Person, the amount of such Indebtedness being deemed to be the
         lesser of the Fair Market Value of such Property or the amount of the
         Indebtedness so secured;

                           (7)      any reimbursement obligation of such Person
         in respect of any letter of credit or bankers acceptance;

                           (8)      the maximum fixed repurchase price of any
         Redeemable Stock of such Person (or, if such Person is a subsidiary,
         any preferred stock of such Person);

                           (9)      any Interest Swap Obligation or Currency
         Hedge Obligation of such Person; and

                           (10)     any obligation that is in economic effect a
         guarantee, regardless of its characterization (other than an
         endorsement in the ordinary course of business or any performance
         guarantee), with respect to any Indebtedness of another Person, to the
         extent guaranteed.

         For purposes of this definition, the maximum fixed repurchase price of
         any Redeemable Stock or subsidiary preferred stock that does not have a
         fixed repurchase price shall be calculated in accordance with the terms
         of such Redeemable Stock or subsidiary preferred stock as if such
         Redeemable Stock or subsidiary preferred stock were

                                     - 11 -
<PAGE>

         repurchased on any date on which Indebtedness shall be required to be
         determined pursuant to this Indenture; provided, however, that if such
         Redeemable Stock or subsidiary preferred stock is not then permitted to
         be repurchased, the repurchase price shall be the book value of such
         Redeemable Stock or subsidiary preferred stock. The amount of
         Indebtedness of any Person at any date shall be (x) the outstanding
         book value at such date of all unconditional obligations as described
         above and (y) the maximum liability at such date of all contingent
         obligations as described above.

                  "Indenture" has the meaning specified in the recitals to the
         First Supplemental Indenture.

                  "Initial Purchasers" means (1) with respect to the Notes
         issued on the Issue Date, Citigroup Capital Markets Inc., Banc of
         America Securities LLC, Deutsche Bank Securities Inc., Natexis
         Bleichroeder Inc., BNP Paribas Securities Corp. and Calyon Securities
         (USA) Inc. and (2) with respect to each issuance of Additional Notes,
         whether or not registered under the Securities Act, the Persons
         purchasing such Additional Notes under the related Purchase Agreement.

                  "Interest Swap Obligation" means, with respect to any Person,
         the obligation of such Person pursuant to any interest rate swap
         agreement, interest rate cap, collar or floor agreement or other
         similar agreement or arrangement designed to protect against or manage
         such Person's or any of its subsidiaries' exposure to fluctuations in
         interest rates.

                  "Investment" means, with respect to any Person, any investment
         in another Person, whether by means of a share purchase, capital
         contribution, loan, advance (other than advances to employees for
         moving and travel expenses, drawing accounts and similar expenditures
         or prepayments or deposits in the ordinary course of business) or
         similar credit extension constituting Indebtedness of such other Person
         or any guarantee of Indebtedness of any other Person; provided,
         however, that the term "Investment" shall not include any transaction
         involving the purchase or other acquisition (including by way of
         merger) of Property (including Capital Stock) by the Company or any
         Subsidiary in exchange for Capital Stock (other than Redeemable Stock)
         of the Company. The amount of any Person's Investment shall be the
         original cost of such Investment to such Person, plus the cost of all
         additions thereto paid by such Person, and minus the amount of any
         portion of such Investment repaid to such Person as a dividend,
         repayment of loan or advance, release or discharge of a guarantee or
         other obligation or other transfer of Property or return of capital, as
         the case may be, but without any other adjustments for increases or
         decreases in value, or writeups, writedowns or writeoffs with respect
         to such Investment. In determining the amount of any Investment
         involving a transfer of any Property other than cash, such Property
         shall be valued at its Fair Value at the time of such transfer as
         determined in good faith by the board of directors (or comparable body)
         of the Person making such transfer.

                                     - 12 -
<PAGE>

                  "Investment Grade Status" exists as of any time if at such
         time either:

                           -        the rating assigned to the Notes by Moody's
                                    is Baa3 (or the equivalent) or higher and by
                                    S&P is BB+ (or the equivalent) or higher, or

                           -        the rating assigned to the Notes by Moody's
                                    is Ba1 (or the equivalent) or higher and by
                                    S&P is BBB- (or the equivalent) or higher.

                  "Investment Grade Status Event" has the meaning specified in
         Section 4.19.

                  "Issue Date" means July 7, 2004, the date on which the Notes
         are first authenticated and delivered under this Indenture.

                  "Lien" means any mortgage, pledge, hypothecation, charge,
         assignment, deposit arrangement, encumbrance, security interest, lien
         (statutory or other), or preference, priority or other security or
         similar agreement or preferential arrangement of any kind or nature
         whatsoever (including, without limitation, any agreement to give or
         grant a Lien or any lease, conditional sale or other title retention
         agreement having substantially the same economic effect as any of the
         foregoing).

                  "Limited Recourse Indebtedness" means

                           (1)      Indebtedness with respect to the two
         drilling/workover barge rigs owned by the Company's Venezuelan
         Subsidiary as in effect on the Issue Date (the "Venezuelan Barge
         Financing"),

                           (2)      Indebtedness incurred under the facility
         agreement dated as of March 25, 2004 among Martin Maritime Ltd., Andre
         Maritime Ltd., certain other parties and the lenders thereunder and
         related instruments and other documents as in effect on the Issue Date
         (the "Angola/Africa Drillship Financing"),

                           (3)      Indebtedness incurred to finance all or a
         part of the purchase, acquisition, renovation or construction of
         capital assets and related items (including interest added to
         principal), or renewals, extensions, refinancings, refunds, repurchases
         or replacements (or successive extensions, renewals, refinancings,
         refundings, repurchases or replacements) thereof or of the Venezuelan
         Barge Financing or the Angola/Africa Drilling Financing,

                           -        for which the recourse of the holder of such
                                    Indebtedness is effectively limited to such
                                    capital assets and related items (including
                                    the Capital Stock of Persons that own,
                                    whether directly or indirectly, such capital
                                    assets and related items and no other
                                    significant Property), or

                                     - 13 -
<PAGE>

                           -        in which the recourse and security are
                                    similar to (or more favorable to the Company
                                    and its Subsidiaries than) the Venezuelan
                                    Barge Financing or the Angola/Africa
                                    Drillship Financing.

                  "Liquid Securities" means securities (1) of an issuer that is
         not an Affiliate of the Company, (2) that are publicly traded on the
         New York Stock Exchange, the American Stock Exchange, the Toronto Stock
         Exchange, the London Stock Exchange or the Nasdaq National Market and
         (3) as to which (a) the Company is not subject to any restrictions on
         sale or transfer (including any volume restrictions under Rule 144 or
         any other restrictions imposed by the Securities Act), (b) a
         registration statement under the Securities Act covering the resale
         thereof is in effect, (c) the Company or a Subsidiary is entitled to
         registration rights under the Securities Act, or (d) in the case of any
         securities traded on the Toronto Stock Exchange or London Stock
         Exchange, the Company or a Subsidiary has rights comparable to those
         referred to in subclauses (b) and (c) of this clause (3), in each case
         in this clause (3) for as long as the securities are held; provided,
         however, that securities meeting the requirements of clauses (1), (2)
         and (3) of this definition shall be treated as Liquid Securities from
         the date of receipt thereof until and only until the earlier of (x) the
         date on which such securities are sold or exchanged for cash or cash
         equivalents and (y) one year following the date of receipt of such
         securities. If such securities are not sold or exchanged for cash or
         cash equivalents within one year of receipt thereof, then, for purposes
         of determining whether the transaction pursuant to which the Company or
         a Subsidiary received the securities complied with the provisions of
         Section 4.14, such securities shall be deemed not to have been Liquid
         Securities at any time.

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

                  "Net Available Proceeds" means

                           (1)      as to any Asset Sale (other than a Bargain
         Purchase Contract) or Sale and Lease-Back Transaction, the Cash
         Proceeds therefrom, net of:

                           -        all legal and title expenses, commissions
                                    and other fees and expenses incurred,

                           -        all taxes payable as a consequence of such
                                    Asset Sale or Sale and Lease-Back
                                    Transaction,

                           -        all payments made to any Person other than
                                    the Company or a Subsidiary on any
                                    Indebtedness (a) in accordance with the
                                    terms of any Lien upon or with respect to
                                    such Property or (b) which must, by its
                                    terms or in order to obtain a necessary
                                    consent to such Asset Sale or Sale and
                                    Lease-Back Transaction or by applicable law,
                                    be repaid out of the proceeds from such
                                    Asset Sale or Sale and Lease-Back
                                    Transaction, excluding, however, any
                                    payments of revolving

                                     - 14 -
<PAGE>

                                    credit Indebtedness that are not accompanied
                                    by a permanent reduction of availability of
                                    revolving credit borrowings,

                           -        with respect to any Asset Sale or Sale and
                                    Lease-Back Transaction by a Subsidiary, the
                                    equity interest in such Cash Proceeds of any
                                    holder of Capital Stock of such Subsidiary
                                    (other than the Company or any other
                                    Subsidiary),

                           -        appropriate amounts to be provided by the
                                    Company or any Subsidiary, as the case may
                                    be, as a reserve required in accordance with
                                    GAAP against any liabilities associated with
                                    such Asset Sale or Sale and Lease-Back
                                    Transaction and retained by the Company or
                                    any Subsidiary, as the case may be, after
                                    such Asset Sale or Sale and Lease-Back
                                    Transaction including pension and other
                                    post- employment benefit liabilities,
                                    liabilities related to environmental matters
                                    and liabilities under any indemnification
                                    obligations associated with such Asset Sale
                                    or Sale and Lease-Back Transaction,

                           -        Cash Proceeds pursuant to the first bullet
                                    point of the third paragraph of Section
                                    4.14, and

                           (2)      as to any Bargain Purchase Contract, an
                                    amount equal to:

                           -        that portion of the rental or other payment
                                    stream arising under a Bargain Purchase
                                    Contract that represents an amount in excess
                                    of the Fair Market Value of the rental or
                                    other payments with respect to the pertinent
                                    Property, and

                           -        the Cash Proceeds from the sale of such
                                    Property, net of the amounts set forth in
                                    clause (1) above, in each case as and when
                                    received.

                  "1999 Issue Date" means May 26, 1999, the date of original
         issue of the 10% Senior Notes due 2009 of the Company.

                  "Non-Recourse Indebtedness" means Indebtedness or that portion
         of Indebtedness of a Non-Recourse Subsidiary as to which neither the
         Company nor any Subsidiary provides credit support constituting
         Indebtedness of the Company or any Subsidiary or is otherwise directly
         or indirectly liable (other than Indebtedness permitted to be incurred
         under the definition of Non-Recourse Subsidiary).

                  "Non-Recourse Subsidiary" means:

                           -        any subsidiary of the Company that at the
                                    time of determination will be designated a
                                    Non-Recourse Subsidiary by the Board of
                                    Directors as provided below, and

                                     - 15 -
<PAGE>

                           -        any subsidiary of a Non-Recourse Subsidiary.

                  The Board of Directors may designate any subsidiary of the
         Company as a Non-Recourse Subsidiary so long as:

                           (1)      neither the Company nor any Subsidiary is
         directly or indirectly liable pursuant to the terms of any Indebtedness
         of such subsidiary or has made an Investment in such subsidiary,
         subject to the proviso described below, and

                           (2)      such designation does not result in the
         creation or imposition of any Lien on any Property of the Company or
         any Subsidiary (other than any Permitted Lien or any Lien the creation
         or imposition of which is in compliance with Section 4.16).

                  With respect to clause (1) of this definition, however, the
         Company or a Subsidiary may be liable for Indebtedness of, and may have
         an Investment in, a Non-Recourse Subsidiary if:

                           -        such liability or Investment constituted a
                                    Permitted Investment or a Restricted Payment
                                    permitted by Section 4.10, in each case at
                                    the time of incurrence, or

                           -        the liability or Investment would be a
                                    Permitted Investment or a Restricted Payment
                                    permitted by Section 4.10, in each case at
                                    the time of designation of such Subsidiary
                                    as a Non-Recourse Subsidiary.

                  The Board of Directors may designate any Non-Recourse
         Subsidiary as a Subsidiary if, immediately after giving effect to such
         designation:

                           -        no Default or Event of Default has occurred
                                    and is continuing,

                           -        the Company could incur $1.00 of additional
                                    Indebtedness (not including the incurrence
                                    of Permitted Indebtedness) under Section
                                    4.11, and

                           -        if any Property of the Company or any of its
                                    Subsidiaries would, upon such designation,
                                    become subject to any Lien (other than a
                                    Permitted Lien), the creation or imposition
                                    of such Lien is in compliance with Section
                                    4.16.

                  "Notes" has the meaning specified in the recitals to the First
         Supplemental Indenture, and includes Additional Notes and Exchange
         Notes as well as both Transfer Restricted Securities and Notes that do
         not constitute Transfer Restricted Securities.

                  "Offering Memorandum" means any offering memorandum of the
         Company relating to the Notes, as the same may be amended or
         supplemented.

                                     - 16 -
<PAGE>

                  "Original Indenture" has the meaning specified in the recitals
         to the First Supplemental Indenture.

                  "Parent Holding Company" means (a) from and after the time the
         Common Stock is not listed on a United States or foreign national or
         regional securities exchange or traded through the National Association
         of Securities Dealers Automated Quotation System or similar system or
         another Person succeeds to and is substituted for the Company under
         this Indenture, a Person which, immediately after such time, had
         substantially the same stockholders, directly or indirectly, as the
         Company immediately prior to such time with holdings in substantially
         the same proportion as such stockholders' holdings in the Company
         immediately prior to such time, (b) from and after the sale,
         conveyance, assignment, transfer, lease or other disposition of all or
         substantially all of the Company's and the Subsidiaries' assets, taken
         as a whole, the Company (as determined prior to the transaction) and
         (c) each Wholly Owned Subsidiary of another Parent Holding Company.

                  "Permitted Indebtedness" means

                           (1)      Indebtedness of the Company under the Notes
         (excluding any Additional Notes but including any Exchange Notes),

                           (2)      Indebtedness of the Company or any
         Subsidiary incurred under one or more Credit Facilities (in addition to
         any such Indebtedness incurred in compliance with the Consolidated
         Interest Coverage Ratio under Section 4.11) in an aggregate principal
         amount at any one time outstanding not to exceed the greater of:

                           -        $800 million, and

                           -        an amount equal to 20% of the Company's
                                    Consolidated Net Tangible Assets determined
                                    as of the date of the incurrence of such
                                    Indebtedness (plus interest and fees under
                                    such Credit Facilities),

                           (3)      Indebtedness of the Company or any
         Subsidiary under Interest Swap Obligations if:

                           -        such Interest Swap Obligations are related
                                    to payment obligations on Indebtedness
                                    otherwise permitted under Section 4.11, and

                           -        the notional principal amount of such
                                    Interest Swap Obligations does not exceed
                                    the principal amount of the Indebtedness to
                                    which such Interest Swap Obligations relate,

                           (4)      Indebtedness of the Company or any
         Subsidiary under Currency Hedge Obligations if

                           -        such Currency Hedge Obligations are related
                                    to payment obligations on Indebtedness
                                    otherwise permitted under Section 4.11 or to
                                    the foreign currency cash flows reasonably

                                     - 17 -
<PAGE>

                                    expected to be generated by the Company and
                                    the Subsidiaries, and

                           -        the notional principal amount of such
                                    Currency Hedge Obligations does not exceed
                                    the principal amount of the Indebtedness and
                                    the amount of the foreign currency cash
                                    flows to which such Currency Hedge
                                    Obligations relate,

                           (5)      Indebtedness of the Company or any
         Subsidiary outstanding on the Issue Date,

                           (6)      any Subsidiary Guarantees or any guarantee
         by any Subsidiary of any other Indebtedness of the Company and any
         assumption of the obligations guaranteed thereby,

                           (7)      Indebtedness of the Company to any of its
         Wholly Owned Subsidiaries, but only so long as it remains a Wholly
         Owned Subsidiary of the Company,

                           (8)      Indebtedness of any Subsidiary to the
         Company or any of its Wholly Owned Subsidiaries, but only so long as it
         remains a Wholly Owned Subsidiary of the Company,

                           (9)      Indebtedness of the Company in connection
         with a purchase of the Notes as a result of a Change in Control if:

                           -        the aggregate principal amount of such
                                    Indebtedness does not exceed the aggregate
                                    Change in Control Purchase Price plus the
                                    related expenses of such purchase, and

                           -        such Indebtedness has an Average Life equal
                                    to or greater than the remaining Average
                                    Life of the Notes and does not mature prior
                                    to one year following the Stated Maturity of
                                    the Notes,

                           (10)     Indebtedness in respect of completion bonds,
         performance bonds, bid bonds, appeal bonds, surety bonds, bankers
         acceptances, letters of credit, insurance obligations or bonds and
         other similar bonds and obligations incurred by the Company or any
         Subsidiary that do not support any obligation for borrowed money,
         including any guarantees or letters of credit functioning as or
         supporting any of the foregoing bonds or obligations,

                           (11)     Permitted Refinancing Indebtedness incurred
         with respect to Indebtedness of the Company (excluding any Indebtedness
         described in clause (7) above) described in clause (1), (2), (5), (6)
         or (9) above, this clause (11) or the first sentence of Section 4.11,

                           (12)     Permitted Subsidiary Refinancing
         Indebtedness incurred with respect to Indebtedness of any Subsidiary
         (excluding any Indebtedness described in

                                     - 18 -
<PAGE>

         clause (8) above) described in clause (1), (2), (5), (6) or (9) above,
         this clause (12) or the first sentence of Section 4.11,

                           (13)     Indebtedness of the Company or any
         Subsidiary represented by Capital Lease Obligations, Indebtedness of
         the Company or any Subsidiary described in clause (5) of the definition
         of "Permitted Liens" and Permitted Refinancing Indebtedness and
         Permitted Subsidiary Refinancing Indebtedness incurred with respect to
         either of the foregoing (in addition to any such Indebtedness incurred
         in compliance with the Consolidated Interest Coverage Ratio under
         Section 4.11), in an aggregate principal amount that does not exceed 5%
         of the Company's Consolidated Net Tangible Assets determined as of the
         date of the incurrence thereof (plus imputed interest and fees with
         respect to such Capital Lease Obligations and interest and fees under
         such other Indebtedness), and

                           (14)     in addition to the items referred to in
         clauses (1) through (13) above, Indebtedness of the Company or any
         Subsidiary in an aggregate outstanding principal amount which, when
         taken together with the principal amount of all other Indebtedness
         described in this clause (14) and then outstanding, will not exceed
         $100 million at any one time outstanding.

         For purposes of determining compliance with Section 4.11, in the event
         that an item of Indebtedness meets the criteria of more than one of the
         categories of Permitted Indebtedness described in clauses (1) through
         (14) above, or is entitled to be incurred pursuant to the Consolidated
         Interest Coverage Ratio test of Section 4.11, the Company will be
         permitted to classify (or later classify or reclassify in whole or in
         part in its sole discretion) such item of Indebtedness in any manner
         that complies with Section 4.11. To avoid duplication in determining
         the amount of Permitted Indebtedness under any clause of this
         definition, guarantees of, or obligations for letters of credit
         supporting, Indebtedness otherwise included in the determination of
         such amount will not also be included.

                  "Permitted Investments" means

                           (1)      certificates of deposit, bankers
         acceptances, time deposits, Eurocurrency deposits and similar types of
         Investments routinely offered by commercial banks with final maturities
         of one year or less issued by commercial banks having capital and
         surplus in excess of $100 million,

                           (2)      commercial paper issued by any corporation,
         if such commercial paper has credit ratings of at least "A-l" by S&P
         and at least "P-l" by Moody's,

                           (3)      U.S. Government Obligations with a maturity
         of four years or less,

                           (4)      repurchase obligations for instruments of
         the type described in clause (3) of this definition,

                           (5)      shares of money market mutual or similar
         funds having assets in excess of $100 million,

                                     - 19 -
<PAGE>

                           (6)      payroll advances in the ordinary course of
         business,

                           (7)      other advances and loans to officers and
         employees of the Company or any Subsidiary, so long as the aggregate
         principal amount of such advances and loans does not exceed $2 million
         at any one time outstanding,

                           (8)      Investments represented by proceeds from
         Asset Sales,

                           (9)      Investments made by the Company in its
         Subsidiaries (or any Person that will be a Subsidiary as a result of
         such Investment) or by a Subsidiary in the Company or in one or more
         Subsidiaries (or any Person that will be a Subsidiary as a result of
         such Investment),

                           (10)     Investments in stock, obligations or
         securities received in settlement of debts owing to the Company or any
         Subsidiary as a result of bankruptcy or insolvency proceedings or upon
         the foreclosure, perfection or enforcement of any Lien in favor of the
         Company or any Subsidiary, in each case as to debt owing to the Company
         or any Subsidiary that arose in the ordinary course of business of the
         Company or any such Subsidiary; provided that, any stocks, obligations
         or securities received in settlement of debts that arose in the
         ordinary course of business (and received other than as a result of
         bankruptcy or insolvency proceedings or upon foreclosure, perfection or
         enforcement of any Lien) that are, within 30 days of receipt, converted
         into cash or cash equivalents will be treated as having been cash or
         cash equivalents at the time received, and

                           (11)     other Investments having an aggregate Fair
         Market Value (measured on the date each such Investment was made and
         without giving effect to subsequent changes in value) that, when taken
         together with all other Investments made pursuant to this clause (11)
         since the Issue Date, do not exceed 10% of the Company's Consolidated
         Net Tangible Assets determined as of the same date.

                  "Permitted Liens" means

                           (1)      Liens in existence on the Issue Date,

                           (2)      Liens created for the benefit of the Notes,

                           (3)      Liens on Property of a Person existing at
         the time such Person is merged or consolidated with or into, or
         acquired by, the Company or a Subsidiary or becomes a Subsidiary (and
         not incurred as a result of, or in anticipation of, such transaction),
         if such Liens relate solely to such Property and the proceeds thereof
         and accessories and upgrades thereto,

                           (4)      Liens on Property existing at the time of
         the acquisition thereof (and not incurred as a result of, or in
         anticipation of, such transaction), if such Liens relate solely to such
         Property and the proceeds thereof and accessories and upgrades thereto,

                                     - 20 -
<PAGE>

                           (5)      Liens to secure Indebtedness incurred for
         the purpose of financing all or a part of the purchase price or
         construction cost of Property (including the cost of upgrading or
         refurbishing rigs or drillships) acquired or constructed after the
         Issue Date, if:

                           -        the principal amount of Indebtedness secured
                                    by such Liens does not exceed 100% of the
                                    lesser of cost or Fair Market Value of the
                                    Property so acquired or constructed
                                    (including upgrade or refurbishment) plus
                                    transaction costs related thereto,

                           -        such Liens do not encumber any other
                                    Property of the Company or any Subsidiary
                                    (other than the proceeds thereof and
                                    improvements, accessions and upgrades
                                    thereto and the Capital Stock of Persons
                                    that own, whether directly or indirectly,
                                    principally such Property), and

                           -        such Liens attach to such Property within
                                    270 days of the later of commencement of
                                    commercial operations of such Property and
                                    completion of the acquisition or
                                    construction (including upgrade or
                                    refurbishment) of such Property,

                           (6)      Liens securing Indebtedness of the Company
         or a Subsidiary represented by Capital Lease Obligations in an
         aggregate principal amount not to exceed 5% of the Company's
         Consolidated Net Tangible Assets determined as of the date of the
         incurrence of such Liens (plus imputed interest and fees with respect
         to such Indebtedness),

                           (7)      Liens to secure any extension, renewal,
         refinancing, refunding, repurchase or replacement (or successive
         extensions, renewals, refinancings, refundings, repurchases or
         replacements), in whole or in part, of any Indebtedness secured by
         Liens permitted by this definition, if such Liens do not extend to any
         other Property of the Company or any Subsidiary (other than the
         proceeds thereof and accessions and upgrades thereto) and the principal
         amount of the Indebtedness secured by such Liens is not increased,

                           (8)      Liens granted by the Company to any of its
         Wholly Owned Subsidiaries, but only so long as it remains a Wholly
         Owned Subsidiary of the Company,

                           (9)      Liens granted by any Subsidiary to the
         Company or any of its Wholly Owned Subsidiaries, but only so long as it
         remains a Wholly Owned Subsidiary of the Company,

                           (10)     Liens securing Non-Recourse Indebtedness,

                           (11)     Liens securing Indebtedness incurred under
         one or more Credit Facilities,

                                     - 21 -
<PAGE>

                           (12)     Liens securing Permitted Indebtedness
         described in clauses (3), (4) and (10) of the definition of "Permitted
         Indebtedness,"

                           (13)     rights of set-off of banks and other
         Persons,

                           (14)     Liens or equitable encumbrances deemed to
         exist by reason of fraudulent conveyance or transfer laws or negative
         pledge or similar agreements to refrain from permitting Liens,

                           (15)     Liens in existence on the occurrence of an
         Investment Grade Status Event,

                           (16)     Liens in connection with any Securitization
         Transaction, and

                           (17)     Liens not otherwise permitted by clauses (1)
         -- (16) above securing up to $100 million of other Indebtedness at any
         one time outstanding.

                  "Permitted Refinancing Indebtedness" means Indebtedness of the
         Company incurred in exchange for, or the net proceeds of which are used
         to renew, extend, refinance, refund, repurchase or replace, outstanding
         Indebtedness of the Company or a Subsidiary, which outstanding
         Indebtedness was incurred in accordance with, or is otherwise permitted
         by, the terms of this Indenture, provided that:

                           (1)      if the Indebtedness being renewed, extended,
         refinanced, refunded, repurchased or replaced is equal or subordinated
         in right of payment to the Notes, then such new Indebtedness is equal
         or subordinated, as the case may be, in right of payment (without
         regard to its being secured) to the Notes at least to the same extent
         as the Indebtedness being renewed, extended, refinanced, refunded,
         repurchased or replaced,

                           (2)      such new Indebtedness is scheduled to mature
         later than the Indebtedness being renewed, extended, refinanced,
         refunded, repurchased or replaced,

                           (3)      such new Indebtedness has an Average Life at
         the time such Indebtedness is incurred that is greater than the Average
         Life of the Indebtedness being renewed, extended, refinanced, refunded,
         repurchased or replaced, and

                           (4)      such new Indebtedness is in an aggregate
         principal amount (or, if such Indebtedness is issued at a price less
         than the principal amount thereof, the aggregate amount of gross
         proceeds therefrom is) not in excess of the aggregate principal amount
         then outstanding of the Indebtedness being renewed, extended,
         refinanced, refunded, repurchased or replaced (or if the Indebtedness
         being renewed, extended, refinanced, refunded, repurchased or replaced
         was issued at a price less than the principal amount thereof, then not
         in excess of the amount of liability in respect thereof determined in
         accordance with GAAP) plus the amount of reasonable fees, expenses and
         any premium incurred by the Company or any Subsidiary in connection
         therewith.

                  "Permitted Subsidiary Refinancing Indebtedness" means
         Indebtedness of any Subsidiary incurred in exchange for, or the net
         proceeds of which are used to renew,

                                     - 22 -
<PAGE>

         extend, refinance, refund, repurchase or replace, outstanding
         Indebtedness of such Subsidiary or any other Subsidiary, which
         outstanding Indebtedness was incurred in accordance with or is
         otherwise permitted by the terms of this Indenture, provided that:

                           (1)      if the Indebtedness being renewed, extended,
         refinanced, refunded, repurchased or replaced is equal or subordinated
         in right of payment to the Subsidiary Guarantees, then such new
         Indebtedness is equal or subordinated, as the case may be, in right of
         payment (without regard to its being secured) to the Subsidiary
         Guarantees at least to the same extent as the Indebtedness being
         renewed, extended, refinanced, refunded, repurchased or replaced,

                           (2)      such new Indebtedness is scheduled to mature
         later than the Indebtedness being renewed, extended, refinanced,
         refunded, repurchased or replaced,

                           (3)      such new Indebtedness has an Average Life at
         the time such Indebtedness is incurred that is greater than the Average
         Life of the Indebtedness being renewed, extended, refinanced, refunded,
         repurchased or replaced, and

                           (4)      such new Indebtedness is in an aggregate
         principal amount (or, if such Indebtedness is issued at a price less
         than the principal amount thereof, the aggregate amount of gross
         proceeds therefrom is) not in excess of the aggregate principal amount
         then outstanding of the Indebtedness being renewed, extended,
         refinanced, refunded, repurchased or replaced (or if the Indebtedness
         being renewed, extended, refinanced, refunded, repurchased or replaced
         was issued at a price less than the principal amount thereof, then not
         in excess of the amount of liability in respect thereof determined in
         accordance with GAAP) plus the amount of reasonable fees, expenses and
         any premium incurred by the Company or such Subsidiary in connection
         therewith.

                  "Property" means, with respect to any Person, any interest of
         such Person in any kind of property or asset, whether real, personal or
         mixed, or tangible or intangible.

                  "Purchase Agreement" means (1) with respect to the Notes
         issued on the Issue Date, the Purchase Agreement dated June 22, 2004
         among the Company and the Initial Purchasers and (2) with respect to
         each issuance of Additional Notes, the purchase agreement or
         underwriting agreement among the Company and each Initial Purchaser
         purchasing such Additional Notes.

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

                  "Rating Decline" means that, at any time within 90 days (which
         period shall be extended so long as the rating of the Notes is under
         publicly announced consideration for possible downgrade by either
         Moody's or S&P) after the date of public notice of a Change in Control,
         or of public notice of the Company's intention or that of any other
         Person to effect a Change in Control, the rating of the Notes is
         decreased by both Moody's and S&P by one or more ratings categories and
         the Notes following such downgrade do not qualify for Investment Grade
         Status.

                                     - 23 -
<PAGE>

                  "Redeemable Stock" means, with respect to any Person, any
         equity security that by its terms or otherwise is required to be
         redeemed, or is redeemable at the option of the holder thereof, at any
         time prior to one year following the Stated Maturity of the Notes or is
         exchangeable into Indebtedness of such Person or any of its
         subsidiaries.

                  "Registration Rights Agreement" means (a) the Registration
         Rights Agreement among the Company and the Initial Purchasers dated the
         Issue Date relating to the Notes issued on such date, a form of which
         is attached as Appendix A to the First Supplemental Indenture, and (b)
         with respect to each issuance of Additional Notes issued in a
         transaction exempt from or not subject to the registration requirements
         of the Securities Act, the registration rights agreement, if any, among
         the Company and the Initial Purchasers purchasing such Additional Notes
         under the related Purchase Agreement, in each case as such agreement
         may be amended or modified from time to time.

                  "Regular Record Date" means each January 1 and July 1
         immediately preceding an Interest Payment Date with respect to the
         Notes.

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

                  "Regulation S Global Security" has the meaning specified in
         Section 2.02(b) of the First Supplemental Indenture.

                  "Related Business" means any business related, similar,
         ancillary or complementary to the business of the Company and its
         Subsidiaries on the Issue Date.

                  "Replacement Asset" means any Property that, as determined by
         the Board of Directors evidenced by a Board Resolution, is used or is
         useful in a Related Business.

                  "Resale Restriction Termination Date" means the date of
         expiration of the applicable holding period with respect to any
         Transfer Restricted Securities set forth in Rule 144(k) under the
         Securities Act (or any successor rule or regulations).

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

                  "Restricted Payment" means to

                           (1)      declare or pay any dividend on, or make any
         distribution in respect of, or purchase, redeem, retire or otherwise
         acquire for value any Capital Stock of the Company or any parent of the
         Company, or warrants, rights or options to acquire such Capital Stock,
         other than:

                           -        dividends payable solely in the Capital
                                    Stock (other than Redeemable Stock) of the
                                    Company, or in warrants, rights or options
                                    to acquire such Capital Stock and

                           -        dividends or distributions by a Subsidiary
                                    to the Company or to a Wholly Owned
                                    Subsidiary of the Company,

                                     - 24 -
<PAGE>

                           (2)      make any principal payment on, or redeem,
         repurchase, defease or otherwise acquire or retire for value, prior to
         any scheduled principal payment, scheduled sinking fund payment or
         other stated maturity, Subordinated Indebtedness of the Company or any
         Subsidiary Guarantor or

                           (3)      make any Restricted Investment in any
         Person.

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

                  "Rule 144A Global Security" has the meaning specified in
         Section 2.02(b) of the First Supplemental Indenture.

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

                  "Sale and Lease-Back Transaction" means, with respect to any
         Person, any direct or indirect arrangement pursuant to which Property
         is sold or transferred by such Person or a subsidiary of such Person
         and is thereafter leased back from the purchaser or transferee thereof
         by such Person or one of its subsidiaries.

                  "Securities Act" means the Securities Act of 1933, as amended,
         and any successor statute.

                  "Securitization Transaction" means any transaction in which
         the Company or any Subsidiary sells or otherwise transfers an interest
         in accounts receivable (i) to one or more third party purchasers or
         (ii) to a special purpose entity (including, without limitation, a
         Subsidiary) that borrows against such accounts receivable or sells such
         accounts receivable (or an undivided interest therein) to one or more
         third party purchasers, but only to the extent that amounts received in
         connection with the sale or other transfer of such accounts receivable
         would not under GAAP be accounted for as liabilities on a consolidated
         balance sheet of the Company.

                  "Senior Debt" means any Indebtedness incurred by the Company
         or any Subsidiary Guarantor, unless the instrument under which such
         Indebtedness is incurred expressly provides that it is subordinated in
         right of payment to the Notes or the Subsidiary Guarantees, as the case
         may be; provided, however, Senior Debt shall not include:

                           (1)      any liability for taxes owed or owing by the
         Company,

                           (2)      any Indebtedness owing to any Subsidiaries,

                           (3)      any obligations with respect to Capital
         Stock of the Company,

                           (4)      any trade payables, or

                           (5)      any Indebtedness that is incurred in
         violation of this Indenture.

                                     - 25 -
<PAGE>

                  "Significant Subsidiary" means any Subsidiary that would be a
         "significant subsidiary" as defined in Rule 1-02 of Regulation S-X
         promulgated by the SEC, as such Regulation is in effect on the Issue
         Date.

                  "Subordinated Indebtedness" means any Indebtedness of the
         Company or any Subsidiary Guarantor (other than intercompany
         Indebtedness) that is subordinated in right of payment to the Notes or
         the Subsidiary Guarantees, as the case may be, pursuant to a written
         agreement to that effect and does not mature prior to one year
         following the Stated Maturity of the Notes.

                  The term "subsidiary" means, with respect to any Person,

                           (1)      any corporation more than 50% of the
         outstanding Voting Stock of which is owned, directly or indirectly, by
         such Person, or by one or more other subsidiaries of such Person, or by
         such Person and one or more other subsidiaries of such Person,

                           (2)      any general partnership, limited liability
         company, joint venture or similar entity more than 50% of the
         outstanding partnership or similar interests of which is owned,
         directly or indirectly, by such Person, or by one or more other
         subsidiaries of such Person, or by such Person and one or more other
         subsidiaries of such Person and

                           (3)      any limited partnership of which such Person
         or any subsidiary of such Person is a general partner.

                  "Subsidiary" means a subsidiary of the Company other than a
         Non-Recourse Subsidiary.

                  "Subsidiary Guarantee" means any guarantee of the Notes by any
         Subsidiary Guarantor in accordance with the provisions of Article XI
         hereof.

                  "Subsidiary Guarantor" means (i) each of the Company's
         Subsidiaries, if any, executing this Indenture and (ii) any Person that
         becomes a successor guarantor of the Notes in compliance with the
         provisions described under Article XI hereof.

                  "Transaction Date" has the meaning specified in the definition
         of "Consolidated Interest Coverage Ratio."

                  "Transfer Restricted Securities" means Notes that are required
         to bear the restrictive legend set forth in Section 2.04 of the First
         Supplemental Indenture.

                  "U.S. Person" means a U.S. person as defined in Regulation S.

                  "Voting Stock" means, with respect to any Person, securities
         of any class or classes of Capital Stock of such Person entitling the
         holders thereof (whether at all times or at the times that such class
         of Capital Stock has voting power by reason of the happening of any
         contingency) to vote in the election of members of the board of
         directors or comparable body of such Person.

                                     - 26 -
<PAGE>

                  "Wholly Owned Subsidiary" means, with respect to a Person, any
         subsidiary of that Person to the extent

                           (1)      all of the Voting Stock of such subsidiary,
         other than any director's qualifying shares mandated by applicable law,
         is owned directly or indirectly by such Person or

                           (2)      such subsidiary is organized in a foreign
         jurisdiction and is required by the applicable laws and regulations of
         such foreign jurisdiction to be partially owned by the government of
         such foreign jurisdiction or individual or corporate citizens of such
         foreign jurisdiction in order for such subsidiary to transact business
         in such foreign jurisdiction, if such Person:

                           -        directly or indirectly owns the remaining
                                    Capital Stock of such subsidiary and

                           -        by contract or otherwise, controls the
                                    management and business of such subsidiary
                                    and derives the economic benefits of
                                    ownership of such subsidiary to
                                    substantially the same extent as if such
                                    subsidiary were a wholly owned subsidiary.

         SECTION 1.02. Supplement to Article II of the Original Indenture. The
Original Indenture is supplemented with respect to the Notes by revising the
third sentence within the third full paragraph of Section 2.17 to read as
follows:

         Securities in certificated form shall be transferred to all beneficial
         owners in exchange for their beneficial interests in a Global Security
         if, and only if, either (1) the Depositary (a) notifies the Company
         that it is unwilling or unable to continue as Depositary for the Global
         Security representing the Notes or (b) it has ceased to be a clearing
         agency registered under the Exchange Act and in either event a
         successor Depositary is not appointed by the Company within 90 days or
         (2) an Event of Default has occurred with respect to the Notes and is
         continuing and the Trustee or the Registrar has received a request from
         the Depositary to issue Securities in certificated form (in which case
         the Company shall deliver Securities in certificated form within 30
         days of such request).

         SECTION 1.03. Supplement to Article III of the Original Indenture.

         (a)      New Sections 3.12 through 3.18 are hereby added to Article III
of the Original Indenture, but only with respect to the Notes, as follows:

         SECTION 3.12. Purchase of Notes at Option of the Holder upon Change in
         Control.

                  (a)      If there shall have occurred a Change in Control
         resulting in a Rating Decline, the Company shall, at the option of the
         Holder, become obligated to repurchase the Notes held by such Holder
         for cash at the purchase price specified in paragraph 6 of the Notes
         (the "Change in Control Purchase Price") as

                                     - 27 -
<PAGE>

         of the date that is 35 Business Days after the occurrence of the Change
         in Control (the "Change in Control Purchase Date"), subject to
         satisfaction by or on behalf of the Holder of the requirements set
         forth in this Section 3.12.

                  (b)      Within 15 Business Days after the Change in Control
         resulting in a Rating Decline, the Company shall mail a written notice
         of such Change in Control by first-class mail to the Trustee and to
         each Holder (and to beneficial owners if required by applicable law).
         The notice shall include a form of Change in Control Purchase Notice
         (substantially in the form of the Option of Holder to Elect Purchase
         Upon Change in Control attached to the form of Note in Exhibit A to the
         First Supplemental Indenture) to be completed by the Holder and shall
         state:

                  (1)      briefly, the events causing a Change in Control and
         the date such Change in Control is deemed to have occurred for purposes
         of this Section 3.12;

                  (2)      the date by which the Change in Control Purchase
         Notice pursuant to this Section 3.12 must be given;

                  (3)      the Change in Control Purchase Date;

                  (4)      the Change in Control Purchase Price;

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

                  (6)      that Notes must be surrendered to the Paying Agent to
         collect payment;

                  (7)      that the Change in Control Purchase Price for any
         Note as to which a Change in Control Purchase Notice has been duly
         given and not withdrawn will be paid promptly following the later of
         the Change in Control Purchase Date and the time of surrender of such
         Note as described in clause (6) above;

                  (8)      any other procedures the Holder must follow to
         exercise rights under this Section 3.12 and a brief description of
         those rights; and

                  (9)      the procedures for withdrawing a Change in Control
         Purchase Notice.

                  (c)      A Holder may exercise its rights specified in Section
         3.12(a) upon delivery of a written notice of purchase (a "Change in
         Control Purchase Notice") to the Paying Agent at any time prior to the
         close of business on the Change in Control Purchase Date, stating:

                  (1)      the certificate number of any Note in certificated
         form which the Holder will deliver to be purchased;

                                     - 28 -
<PAGE>

                  (2)      the portion of the principal amount of each Note
         which the Holder will deliver to be purchased, which portion must be
         $1,000 or an integral multiple thereof; and

                  (3)      that such Note shall be purchased as of the Change in
         Control Purchase Date pursuant to the terms and conditions specified in
         paragraph 6 of the Notes and in this Indenture.

                  Receipt of the Note, prior to, on or after the Change in
         Control Purchase Date (together with all necessary endorsements), by
         the Paying Agent shall be a condition to the receipt by the Holder of
         the Change in Control Purchase Price therefor; provided, however, that
         such Change in Control Purchase Price shall be so paid pursuant to this
         Section 3.12 only if each Note so delivered to the Paying Agent shall
         conform in all respects to the description thereof set forth in the
         related Change in Control Purchase Notice.

                  The Company shall purchase from the Holder thereof, pursuant
         to this Section 3.12, a portion of a Note if the principal amount of
         such portion is $1,000 or an integral multiple of $1,000. Provisions of
         this Indenture that apply to the purchase of all of a Note also apply
         to the purchase of such portion of such Note.

                  Any purchase by the Company contemplated pursuant to the
         provisions of this Section 3.12 shall be consummated by the payment of
         cash to the Holder according to the second sentence of the first
         paragraph of Section 3.13.

                  Notwithstanding anything herein to the contrary, any Holder
         delivering to the Paying Agent the Change in Control Purchase Notice
         contemplated by this Section 3.12(c) shall have the right to withdraw
         such Change in Control Purchase Notice at any time prior to the close
         of business on the Change in Control Purchase Date by delivery of a
         written notice of withdrawal to the Paying Agent in accordance with
         Section 3.13.

                  The Paying Agent shall promptly notify the Company of the
         receipt by it of any Change in Control Purchase Notice or written
         withdrawal thereof.

         SECTION 3.13. Effect of Change in Control Purchase Notice.

                  Upon receipt by the Paying Agent of the Change in Control
         Purchase Notice according to Section 3.12, the Holder of the Note in
         respect of which such Change in Control Purchase Notice was given shall
         (unless such Change in Control Purchase Notice is withdrawn as
         specified in the following paragraph) thereafter be entitled to receive
         solely the Change in Control Purchase Price with respect to such Note.
         Such Change in Control Purchase Price shall be paid to such Holder
         promptly following the later of (x) the Business Day following the
         Change in Control Purchase Date with respect to such Note and (y) the
         time of delivery of such Note to the Paying Agent by the Holder thereof
         in the manner required by Section 3.12.

                                     - 29 -
<PAGE>

                  A Change in Control Purchase Notice may be withdrawn by means
         of a written notice of withdrawal delivered to the Paying Agent at any
         time prior to the close of business on the Change in Control Purchase
         Date, specifying:

                  (1) the certificate number of the Note in certificated form in
         respect of which such notice of withdrawal is being submitted;

                  (2) the principal amount of the Note with respect to which
         such notice of withdrawal is being submitted; and

                  (3) the principal amount, if any, of such Note (which must be
         $1,000 or an integral multiple thereof) which remains subject to the
         original Change in Control Purchase Notice and which has been or will
         be delivered for purchase by the Company.

                  There shall be no purchase of any Notes pursuant to Section
         3.12 if there has occurred (prior to, on or after, as the case may be,
         the giving, by the Holders of such Notes, of the required Change in
         Control Purchase Notice) and is continuing an Event of Default (other
         than a default in the payment of the Change in Control Purchase Price
         with respect to such Notes). The Paying Agent will promptly return to
         the respective Holders thereof any Notes (x) with respect to which a
         Change in Control Purchase Notice has been withdrawn in compliance with
         this Indenture, or (y) held by it during the continuance of an Event of
         Default (other than a default in the payment of the Change in Control
         Purchase Price with respect to such Notes) in which case, upon such
         return, the Change in Control Purchase Notice with respect thereto
         shall be deemed to have been withdrawn.

         SECTION 3.14. Deposit of Change in Control Purchase Price.

                  By 11:00 a.m., New York City time, on the Business Day
         following the Change in Control Purchase Date, the Company shall
         deposit with the Paying Agent (or, if the Company is acting as Paying
         Agent, shall segregate and hold in trust as provided in Section 2.06)
         an amount of cash in immediately available funds sufficient to pay the
         aggregate Change in Control Purchase Price of all the Notes or portions
         thereof which are to be purchased as of the Change in Control Purchase
         Date.

         SECTION 3.15. Notes Purchased in Part.

                  Any Note which is to be purchased under Section 3.12 only in
         part shall be surrendered at the office of the Paying Agent (with, if
         the Company or the Trustee so requires, due endorsement, or a written
         instrument of transfer in form satisfactory to the Company and the
         Trustee executed by the Holder or such Holder's attorney duly
         authorized in writing), and the Company shall execute and the Trustee
         shall authenticate and deliver to the Holder of such Note, without
         service charge, a new Note or Notes, of any authorized denomination as
         requested by such Holder in aggregate principal amount equal to, and in
         exchange for, the

                                     - 30 -
<PAGE>

         portion of the principal amount of the Note so surrendered which is not
         purchased.

         SECTION 3.16. Covenant to Comply with Securities Laws upon Purchase of
         Notes.

                  In connection with any offer to purchase or purchase of Notes
         under Section 3.12, the Company shall (i) comply with the provisions of
         the Exchange Act that may then be applicable, and (ii) file the related
         Schedule TO (or any successor schedule, form or report) under the
         Exchange Act, if required.

         SECTION 3.17. Repayment to the Company.

                  The Trustee and the Paying Agent shall return to the Company,
         upon written request, any cash, together with interest on such cash as
         hereinafter provided (subject to the provisions of Section 7.01(b)),
         held by them for the payment of a Change in Control Purchase Price or
         Redemption Price that remains unclaimed as provided in Section 8.03,
         provided, however, that to the extent that the aggregate amount of cash
         so deposited by the Company exceeds the aggregate Change in Control
         Purchase Price or Redemption Price, respectively, of the Notes or
         portions thereof to be purchased or redeemed, then promptly after the
         Business Day following the Change in Control Purchase Date or
         Redemption Date, as the case may be, the Trustee or the Paying Agent,
         as the case may be, shall return any such excess to the Company
         together with interest on any cash as hereinafter provided (subject to
         the provisions of Section 7.01(b)). Any cash deposited with the Trustee
         or with the Paying Agent pursuant to this Article III shall be invested
         by the Trustee or Paying Agent, as applicable, in short-term
         obligations of, or fully guaranteed by, the United States of America,
         or commercial paper rated A-1 or better by S&P or P-1 or better by
         Moody's as specifically directed in writing by the Company. Interest
         earned on such investments shall be repaid to the Company pursuant to
         this Section 3.17. Except as provided for in this Section 3.17, neither
         the Paying Agent nor the Trustee shall be under any liability for
         interest on any money received by it pursuant to this Indenture.

         SECTION 3.18. Outstanding Notes.

                  If the Paying Agent holds, in accordance with this Indenture,
         by 11:00 a.m., New York City time, on the Business Day following a
         Change in Control Purchase Date, money sufficient to pay the Change in
         Control Purchase Price of the Notes to be purchased as of the Change in
         Control Purchase Date, then (i) the Change in Control Purchase Price
         for such Notes shall be deemed paid and (ii) after such Change in
         Control Purchase Date, such Notes shall cease to be outstanding,
         interest on such Notes shall cease to accrue and all other rights of
         the Holder shall terminate (other than the right to receive the Change
         in Control Purchase Price upon delivery of the Note in accordance with
         the terms of this Indenture), whether or not such Notes are delivered
         to the Paying Agent.

                                     - 31 -
<PAGE>

         SECTION 1.04. Supplement to Article IV of the Original Indenture.

         (a)      Article IV of the Original Indenture is supplemented with
respect to the Notes by inserting the following new Sections at the end thereof:

         SECTION 4.08. [Reserved].

         SECTION 4.09. Transactions with Affiliates.

                  The Company shall, and shall permit any Subsidiary to, conduct
         any business or enter into any transaction or series of related
         transactions, including the purchase, sale or exchange of Property, the
         making of any Investment, the giving of any guarantee or the rendering
         of any service with any of the Company's Affiliates (other than
         transactions among the Company and any of its Wholly Owned Subsidiaries
         or among its Wholly Owned Subsidiaries) only if:

                  (1)      the transaction or series of related transactions is
         on terms which are no less favorable in all material respects to the
         Company or the Subsidiary than those that could be obtained in a
         comparable arm's length transaction with a Person that is not such an
         Affiliate, and

                  (2)      if the transaction or series of related transactions
         has a Fair Market Value:

                  -        in excess of $10 million per year but less than $25
                           million per year, the Company certifies to the
                           Trustee that the transaction or series of related
                           transactions complies with clause (1) of this Section
                           4.09, or

                  -        in excess of $25 million per year, then:

                           (a) the transaction or series of related transactions
                  is approved by a majority of the Board of Directors, including
                  a majority of the disinterested directors, which approval is
                  evidenced by a Board Resolution that the transaction or series
                  of related transactions complies with clause (1) of this
                  Section 4.09, or

                           (b) the Company receives a favorable opinion from a
                  nationally recognized investment banking or similar firm of
                  its choice (having expertise in the specific area which is the
                  subject of the opinion) that the payments to be made are fair
                  consideration for the transaction or series of related
                  transactions.

         The preceding sentence of this Section 4.09 shall not apply to the
following:

         -        sales by the Company of its Common Stock to any of its
                  Affiliates,

                                     - 32 -
<PAGE>

         -        reasonable compensation (including amounts paid pursuant to
                  employee benefit plans) and indemnification paid or made
                  available to an officer, director or employee of the Company
                  or a Subsidiary for services rendered in that person's
                  capacity as an officer, director or employee, or

         -        the making of any Restricted Payment otherwise permitted by
                  this Indenture.

         SECTION 4.10. Limitation on Restricted Payments.

                  The Company shall, and shall permit any Subsidiary to, make
         any Restricted Payment only if, at the time of and after giving effect
         to the proposed Restricted Payment:

                  (1) no Default or Event of Default has occurred and is
         continuing or would result from the Restricted Payment,

                  (2) the Company could incur at least $1.00 of additional
         Indebtedness under the Consolidated Interest Coverage Ratio test
         described in the first sentence of Section 4.11, and

                  (3) the aggregate amount of such Restricted Payment and all
         Restricted Payments (the amount of any Restricted Payment not made in
         cash shall be based on Fair Market Value) declared or made on or after
         the 1999 Issue Date by the Company or any Subsidiary does not exceed
         the sum of:

         -        50% of the Company's aggregate Consolidated Net Income accrued
                  during the period beginning on April 1, 1999 and ending on the
                  last day of the fiscal quarter ending immediately prior to the
                  date of such proposed Restricted Payment (or if such
                  Consolidated Net Income is a deficit, minus 100% of the
                  deficit), plus

         -        an amount equal to (a) the aggregate net cash proceeds and the
                  Fair Market Value of securities or other Property other than
                  cash the Company has received, after the 1999 Issue Date, from
                  the issuance or sale (other than to a Subsidiary or an
                  employee stock ownership plan or trust established by the
                  Company for the benefit of its employees) of shares of its
                  Capital Stock, excluding Redeemable Stock but including the
                  Capital Stock issued upon the exercise of options, warrants or
                  rights to purchase its Capital Stock (other than Redeemable
                  Stock) and (b) the liability (expressed as a positive number)
                  in accordance with GAAP for any of its Indebtedness or
                  carrying value of Redeemable Stock that has been issued after
                  the 1999 Issue Date and converted into, exchanged for or
                  satisfied by the issuance of shares of its Capital Stock
                  (other than Redeemable Stock) after the 1999 Issue Date, plus

                                     - 33 -
<PAGE>

         -        to the extent not otherwise included in Consolidated Net
                  Income, the net reduction in Investments in Non-Recourse
                  Subsidiaries or joint ventures or other Persons resulting from
                  dividends, repayments of loans or advances, releases or
                  discharges of guarantees or other obligations or other
                  transfers of Property or return of capital, in each case to or
                  in favor of the Company or a Subsidiary after the 1999 Issue
                  Date from any Non-Recourse Subsidiary or joint venture or
                  other Person or from the redesignation of a Non-Recourse
                  Subsidiary as a Subsidiary (valued in each case as provided in
                  the definition of Investment), not to exceed, in the case of
                  any Non-Recourse Subsidiary or joint venture or other Person,
                  the total amount of Investments (other than Permitted
                  Investments permitted by clauses (1)-(10) of the definition of
                  "Permitted Investments") in such Non-Recourse Subsidiary or
                  joint venture or other Person made by the Company and its
                  Subsidiaries in such Non-Recourse Subsidiary or joint venture
                  or other Person existing on or made after the 1999 Issue Date,
                  plus

         -        to the extent not otherwise included in the Company's
                  Consolidated Net Income or in the previous bullet point, the
                  total amount of Investments existing on or made after the 1999
                  Issue Date in Persons which have become Subsidiaries
                  subsequent to the 1999 Issue Date (calculated as of the date
                  they become Subsidiaries), plus

         -        $50 million.

         The preceding sentence of this Section 4.10 shall not prevent:

                  (A) the payment of any dividend on the Capital Stock of any
         class within 60 days after the date of its declaration if at the date
         of declaration the payment would be permitted by this Indenture,
         provided that at the time of the declaration of such dividend, no
         Default shall have occurred and be continuing,

                  (B) any repurchase or redemption of the Company's Capital
         Stock or Subordinated Indebtedness made by exchange for its Capital
         Stock (other than Redeemable Stock), or out of the net cash proceeds
         from the substantially concurrent issuance or sale (other than to a
         Subsidiary) of its Capital Stock (other than Redeemable Stock), if the
         net cash proceeds from the sale are excluded from computations under
         the second bullet point under (3) above to the extent such proceeds are
         applied to purchase or redeem such Capital Stock or Subordinated
         Indebtedness, and

                  (C) any repurchase or redemption of Subordinated Indebtedness
         solely in exchange for, or out of the net cash proceeds from the
         substantially concurrent sale of, new Subordinated Indebtedness, so
         long as the new Subordinated Indebtedness:

                                     - 34 -
<PAGE>

         -        is subordinated to the Notes or the Subsidiary Guarantees, as
                  the case may be, at least to the same extent as the
                  Subordinated Indebtedness so exchanged, purchased or redeemed,

         -        has a stated maturity later than the stated maturity of the
                  Subordinated Indebtedness so exchanged, purchased or redeemed,
                  and

         -        has an Average Life at the time incurred that is greater than
                  the remaining Average Life of the Subordinated Indebtedness so
                  exchanged, purchased or redeemed.

         Restricted Payments permitted to be made as described in clauses (B)
         and (C) of the immediately preceding sentence shall be excluded in
         calculating the amount of Restricted Payments thereafter; however,
         Restricted Payments made as described in (A) of the immediately
         preceding sentence shall be included.

         SECTION 4.11. Limitation on Indebtedness.

                  The Company shall, and shall permit any Subsidiary to, create,
         incur, assume, suffer to come into existence, guarantee or otherwise
         become liable with respect to the payment of (collectively, "incur")
         any Indebtedness only if, after giving effect to the incurrence of that
         Indebtedness, no Default or Event of Default would occur and the
         Consolidated Interest Coverage Ratio for the Determination Period
         preceding the applicable Transaction Date is at least 2.0 to 1.0.
         Notwithstanding the foregoing, the Company or any Subsidiary may incur
         Permitted Indebtedness. Any Indebtedness of a Person existing at the
         time that Person becomes a Subsidiary (or is consolidated or merged
         with or into a Subsidiary or the Company) shall be deemed to be
         incurred at the time such Person becomes a Subsidiary (or the merger or
         consolidation occurs).

         SECTION 4.12. Limitations on Dividends and Other Payment Restrictions
         Affecting Subsidiaries.

                  The Company shall not, and shall not permit any Subsidiary to,
         create, enter into any agreement with any Person or otherwise cause or
         suffer to exist or become effective any consensual encumbrance or
         restriction of any kind that by its terms restricts the ability of any
         Subsidiary to:

         -        pay dividends or make any other distributions on its Capital
                  Stock to the Company or any Subsidiary,

         -        pay any Indebtedness owed to the Company or any Subsidiary,

         -        make loans or advances to the Company or any Subsidiary, or

         -        transfer any of its Property to the Company or any Subsidiary.

                                     - 35 -
<PAGE>

                  The preceding sentence of this Section 4.12 shall not apply to
         any encumbrance or restriction contained in any agreement or
         instrument:

                  (1) existing on the Issue Date,

                  (2) relating to any Property acquired after the Issue Date, so
         long as the encumbrance or restriction relates only to the Property so
         acquired,

                  (3) relating to any Indebtedness of any Person at the date on
         which the Person was merged or consolidated with or into, or acquired
         by, the Company or a Subsidiary or became a Subsidiary (other than
         Indebtedness incurred as a result of, or in anticipation of, such
         transaction),

                  (4) effecting a renewal, extension, refinancing, refund,
         repurchase or replacement (or successive extensions, renewals,
         refinancings, refundings, repurchases or replacements) of Indebtedness
         issued under an agreement referred to in clauses (1) through (3) of
         this Section 4.12, so long as the encumbrances and restrictions
         contained in any such renewal, extension, refinancing, refund,
         repurchase or replacement agreement, taken as a whole, are not
         materially more restrictive than the encumbrances and restrictions
         contained in the original agreement, as determined in good faith by the
         Board of Directors,

                  (5) constituting customary provisions restricting subletting
         or assignment of any lease of the Company or any Subsidiary or
         provisions in agreements that restrict the assignment of such agreement
         or any rights thereunder,

                  (6) constituting restrictions on the sale or other disposition
         of any Property securing Indebtedness as a result of a Permitted Lien
         on such Property,

                  (7) constituting any temporary encumbrance or restriction with
         respect to a Subsidiary under an agreement that has been entered into
         for the sale or disposition of all or substantially all of the
         outstanding Capital Stock of or assets of such Subsidiary, provided
         that such sale or disposition is otherwise permitted under this
         Indenture,

                  (8) constituting customary restrictions on cash, other
         deposits or assets imposed by customers and other Persons under
         contracts entered into in the ordinary course of business,

                  (9) constituting provisions contained in agreements or
         instruments relating to Indebtedness that prohibit the transfer of all
         or substantially all of the assets of the obligor under that agreement
         or instrument unless the transferee assumes the obligations of the
         obligor under such agreement or instrument or such assets may be
         transferred subject to such prohibition,

                  (10) relating to Limited Recourse Indebtedness,

                                     - 36 -
<PAGE>

                  (11) constituting a requirement that a certain amount of
         Indebtedness be maintained between a Subsidiary and the Company or
         another Subsidiary,

                  (12) constituting any encumbrance or restriction with respect
         to Property under an agreement that has been entered into for the sale
         or disposition of such Property, provided that such sale or disposition
         is otherwise permitted under this Indenture,

                  (13) relating to a Person existing at the time that Person is
         merged or consolidated with or into, or acquired by, the Company or a
         Subsidiary or becomes a Subsidiary (and not entered into as a result
         of, or in anticipation of, such transaction),

                  (14) constituting any encumbrance or restriction with respect
         to Property under a charter, lease or other agreement that has been
         entered into in the ordinary course of business for the employment of
         such Property, or

                  (15) in the case of Subsidiaries that are not Wholly Owned
         Subsidiaries, constituting a shareholders or other similar agreement.

         SECTION 4.13. Taxes.

                  The Company shall pay, and shall cause each of its
         Subsidiaries to pay, prior to delinquency, all material taxes,
         assessments, and governmental levies except such as are contested in
         good faith and by appropriate proceedings or where the failure to
         effect such payment is not adverse in any material respect to the
         Holders of the Notes.

         SECTION 4.14. Limitation on Asset Sales.

                  The Company shall engage in, and shall permit any Subsidiary
         to engage in, any Asset Sale only if:

                  (1) the Company or the Subsidiary, as the case may be,
         receives consideration at the time of the Asset Sale at least equal to
         the Fair Market Value of the Property subject to such Asset Sale,
         except in the case of:

                  -        an Asset Sale resulting from the requisition of title
                           to, seizure or forfeiture of any Property or any
                           actual or constructive total loss or an agreed or
                           compromised total loss, or

                  -        a Bargain Purchase Contract,

                  (2) the Fair Market Value of all forms of consideration other
         than Cash Proceeds, Liquid Securities, Replacement Assets and
         Investments permitted by Section 4.10 received for all Asset Sales
         (excluding those described in the two bullet points in clause (1) of
         this Section 4.14) since the Issue Date does not

                                     - 37 -
<PAGE>

         exceed in the aggregate 10% of the Company's Consolidated Net Tangible
         Assets at the time of such Asset Sale (before giving effect thereto),
         and

                  (3) the Company certifies to the Trustee that such Asset Sale
         complies with clauses (1) and (2) of this Section 4.14.

                  The Company or such Subsidiary, as the case may be, may apply
         the Net Available Proceeds from each Asset Sale:

         -        to the acquisition of one or more Replacement Assets, or

         -        to repurchase or repay Senior Debt (other than Indebtedness
                  owed to the Company or its Affiliates) (with a permanent
                  reduction of availability in the case of revolving credit
                  borrowings);

         provided, however, that such acquisition or such repurchase or
         repayment shall be made within 365 days after the consummation of the
         relevant Asset Sale.

                  The following amounts shall be deemed to be cash or cash
         equivalents (and included in Cash Proceeds) for purposes of this
         Section 4.14:

         -        any liabilities of the Company or any Subsidiary (as shown on
                  the Company's or such Subsidiary's most recent balance sheet
                  or in the notes thereto), other than liabilities that by their
                  terms are subordinated to the Notes or the applicable
                  Subsidiary Guarantee, that are assumed by the transferee of
                  any such Property, and

         -        any Indebtedness or other obligations received by the Company
                  or any such Subsidiary from such transferee that are converted
                  by the Company or such Subsidiary into cash (to the extent of
                  the cash received) within 180 days of such Asset Sale.

                  Any Net Available Proceeds from any Asset Sale that are not
         used to acquire Replacement Assets or to repurchase or repay Senior
         Debt within 365 days after consummation of the relevant Asset Sale
         shall constitute "Excess Proceeds." When the aggregate amount of Excess
         Proceeds exceeds $50 million, the Company shall, or at any time after
         receipt of Excess Proceeds, the Company may, at its option, make a pro
         rata offer to all Holders of Notes and holders of other Indebtedness
         that ranks by its terms equally in right of payment with the Notes and
         the terms of which contain substantially similar requirements with
         respect to the application of net proceeds from asset sales as are
         contained in this Section 4.14, which is herein referred to as an
         "Asset Sale Offer," to purchase on a pro rata basis the maximum
         principal amount of the Notes and other such Indebtedness in integral
         multiples of $1,000 that may be purchased out of the Excess Proceeds,
         at an offer price in cash equal to 100% of the outstanding principal
         amount thereof plus any accrued and unpaid interest through and
         including the purchase date (subject to the right of Holders on a
         Regular Record

                                     - 38 -
<PAGE>

         Date to receive interest due on the relevant Interest Payment Date).
         Upon completion of any Asset Sale Offer, the amount of Excess Proceeds
         shall be reset to zero, and the Company may use any remaining amount
         for general corporate purposes.

                  Within five Business Days after the Company is obligated to
         make an Asset Sale Offer, it shall send a written notice to Holders,
         accompanied by such information that the Company in good faith believes
         will enable Holders to make an informed decision with respect to the
         Asset Sale Offer.

                  The Company shall comply with any applicable tender offer
         rules, including any applicable requirements of Rule 14e-l under the
         Exchange Act, in the event that an Asset Sale Offer is required under
         the circumstances described in this Section 4.14, and it shall file
         Schedule TO or any other required schedule.

         SECTION 4.15. Limitation on Sale and Lease-Back Transactions.

                  The Company shall, and shall permit any Subsidiary to, enter
         into, assume, guarantee or otherwise become liable with respect to any
         Sale and Lease-Back Transaction only if:

         -        the proceeds from the Sale and Lease-Back Transaction are at
                  least equal to the Fair Market Value of the Property being
                  transferred, and

         -        the Company or the Subsidiary would have been permitted to
                  enter into the transaction under Section 4.11 (prior to an
                  Investment Grade Status Event only) and Section 4.16 (in each
                  case, if the Sale and Lease-Back Transaction is a Capital
                  Lease Obligation).

         The preceding sentence of this Section 4.15 shall not apply to any Sale
         and Lease-Back Transaction if:

                  (1) the transaction is for a period, including renewal rights,
         not in excess of three years;

                  (2) the sale of the Property that is the subject of the Sale
         and Lease-Back Transaction is made within 270 days after its
         acquisition, construction or improvement;

                  (3) the transaction is between the Company and a Subsidiary or
         between Subsidiaries; or

                  (4) the Company or a Subsidiary, as the case may be, applies
         the Net Available Proceeds from the transaction to the acquisition of
         one or more Replacement Assets or to repurchase or repay Senior Debt
         (other than Indebtedness owed to the Company or its Affiliates) (with a
         permanent reduction of availability in the case of revolving credit
         borrowings), all in accordance with

                                     - 39 -
<PAGE>

         the covenant set forth in Section 4.14 as if such covenant applied to
         the transaction.

         SECTION 4.16. Limitation on Liens.

                  The Company shall not, and shall not permit any Subsidiary to,
         create, incur, assume or suffer to come into existence any Liens on or
         with respect to any Property of the Company or that Subsidiary or any
         interest in that Property or any income or profits from that Property
         to secure (a) any Indebtedness of the Company or a Subsidiary (if it is
         not also a Subsidiary Guarantor), unless prior to, or contemporaneously
         therewith, the Notes are equally and ratably secured, or (b) any
         Indebtedness of any Subsidiary Guarantor unless prior to, or
         contemporaneously therewith, the Subsidiary Guarantees are equally and
         ratably secured; provided, however, that if such Indebtedness is
         expressly subordinated to the Notes or the Subsidiary Guarantees, the
         Lien securing such Indebtedness will be subordinated and junior to the
         Lien securing the Notes or the Subsidiary Guarantees, as the case may
         be, with the same relative priority as such Indebtedness has with
         respect to the Notes or the Subsidiary Guarantees. The preceding
         sentence of this Section 4.16 shall not apply to Permitted Liens.

         SECTION 4.17. Limitation on Non-Guarantor Subsidiaries.

                  The Company shall permit any Subsidiary that is not a
         Subsidiary Guarantor to incur a guarantee of any Indebtedness of the
         Company (except Indebtedness under a Credit Facility) only if:

                  (1) both

         -        such Subsidiary simultaneously executes and delivers a
                  supplement to this Indenture, substantially in the form of
                  Exhibit B to the First Supplemental Indenture, providing for a
                  Subsidiary Guarantee, and

         -        with respect to any guarantee of the Company's Subordinated
                  Indebtedness by a Subsidiary, any such guarantee shall be
                  subordinated to that Subsidiary's Subsidiary Guarantee at
                  least to the same extent as such Subordinated Indebtedness is
                  subordinated to the Notes,

                  (2) such Subsidiary waives, and agrees not in any manner
         whatsoever to exercise any right or claim or take the benefit or
         advantage of, any rights of reimbursement, indemnity or subrogation or
         any other rights against the Company or any other Subsidiary as a
         result of any payment by such Subsidiary under its Subsidiary Guarantee
         until such time as the obligations guaranteed thereby are paid in full,
         and

                  (3) such Subsidiary delivers to the Trustee an Opinion of
         Counsel of outside legal counsel to the effect that such supplemental
         indenture has been duly executed and authorized and that such
         Subsidiary Guarantee constitutes a valid,

                                     - 40 -
<PAGE>

         binding and enforceable obligation of the Subsidiary, except insofar as
         enforcement thereof may be:

         -        limited by bankruptcy, insolvency or similar laws (including
                  all laws relating to fraudulent transfers), and

         -        subject to general principles of equity.

                  This Section 4.17 shall not, however, apply to any guarantee
         of any Subsidiary that:

         -        existed at the time such Person became a Subsidiary, and

         -        was not incurred in connection with, or in contemplation of,
                  that Person becoming a Subsidiary.

                  A pledge of assets to secure any Indebtedness for which the
         pledgor is not otherwise liable shall not be considered a guarantee for
         purposes of this Section 4.17.

         SECTION 4.18. Reports.

                  So long as any Notes are outstanding, the Company shall: (1)
         file with the SEC, so long as it accepts the Company's filings and
         whether or not the Company is required to do so under the Exchange Act,
         the annual reports on Form 10-K, quarterly reports on Form 10-Q and
         current reports on Form 8-K that the Company would be required to file
         if it were subject to Section 13 or 15 of the Exchange Act, in each
         case on or before the dates on which such reports would have been
         required to have been filed with the SEC if the Company had been
         subject to Section 13 or 15 of the Exchange Act; and (2) file with the
         Trustee (with exhibits) copies of such reports within 15 days after the
         date on which the Company files the reports with the SEC or the date on
         which the Company would be required to file the reports if it were so
         required or, if the SEC will not accept the filings, supply copies of
         the reports (including any exhibits) to any Holder promptly upon
         written request.

                  Section 4.03(c) shall be applicable with respect to filings
         made by the Company in accordance with this Section 4.18, and
         references in Section 4.03(c) to Section 4.03(a) and Section 4.03 shall
         be deemed also to include references to this Section 4.18.

         SECTION 4.19. Termination of Certain Covenants Upon Investment Grade
         Status Event.

                  If at any time the Notes shall achieve an Investment Grade
         Status and no Event of Default shall have occurred and then be
         continuing (such occurrence being referred to as an "Investment Grade
         Status Event"), then, immediately upon the Company's delivery to the
         Trustee of an Officers' Certificate certifying the

                                     - 41 -
<PAGE>

         occurrence of an Investment Grade Status Event, the covenants set forth
         in Sections 4.09 through 4.14, together with clause (3) of Section
         5.01, shall terminate and shall not thereafter be applicable to the
         Company and its Subsidiaries.

         SECTION 1.05. Supplement to Article V of the Original Indenture.
Section 5.01 of the Original Indenture is superseded with respect to the Notes
by the following provisions:

                  The Company shall not consolidate with or merge into any other
         Person, or sell, lease, convey, assign, transfer or otherwise dispose
         of all or substantially all of the assets of the Company and its
         Subsidiaries, taken as a whole, to any Person, unless:

                  (1)      either (a) the Company shall be the continuing Person
         or (b) the Person (if other than the Company) formed by such
         consolidation or surviving such merger or which acquires, by sale,
         lease, conveyance, assignment, transfer or other disposition, all or
         substantially all of the assets of the Company and its Subsidiaries,
         taken as a whole (such Person, the "Successor"), shall be a Person
         organized and validly existing under the laws of the United States of
         America, any State thereof or the District of Columbia, the Bahamas,
         Barbados, Bermuda, the British Virgin Islands, the Cayman Islands, any
         of the Channel Islands, France, any other member of the European Union
         or the Netherlands Antilles and shall expressly assume, by a supplement
         to this Indenture, the due and punctual payment of all amounts owing on
         all the Notes and the performance of the Company's covenants and
         obligations under this Indenture;

                  (2)      immediately after giving effect to such transaction
         on a pro forma basis (including, without limitation, any Indebtedness
         incurred or anticipated to be incurred in connection with or in respect
         of such transaction), no Event of Default or Default shall have
         occurred and be continuing or would result therefrom;

                  (3)      immediately after giving effect to the transaction on
         a pro forma basis as if the transaction had occurred on the first day
         of the Determination Period, the Company or the Successor would: (a) be
         permitted to incur $1.00 of additional Indebtedness under the
         Consolidated Interest Coverage Ratio test described in the first
         sentence of Section 4.11 or (b) have a Consolidated Interest Coverage
         Ratio that is no less than such ratio for the Company immediately prior
         to the transaction, in which event the Company shall be deemed to have
         complied with the test described in the first sentence of Section 4.11;

                  (4)      in the case of clause (1)(b) of this Section 5.01, in
         the event that the Successor is organized in a jurisdiction other than
         the United States of America, any State thereof or the District of
         Columbia that is different from the jurisdiction in which the obligor
         on the Notes was organized immediately before giving effect to the
         transaction, (a) such Successor delivers to the Trustee an Opinion of
         Counsel stating that (1) the obligations of the Successor are
         enforceable under the laws of the new jurisdiction of its formation
         subject to

                                     - 42 -
<PAGE>

         customary exceptions and (2) the Holders of Notes will not recognize
         any income, gain or loss for U.S. federal income tax purposes as a
         result of the transaction and will be subject to U.S. federal income
         tax on the same amount and in the same manner and at the same times as
         would have been the case if such transaction had not occurred, (b) such
         Successor agrees in writing to submit to jurisdiction to the competent
         courts of the State of New York or the federal district court sitting
         in The City of New York and appoints an agent in the State of New York
         for the service of process, each under terms satisfactory to the
         Trustee, and (c) the Board of Directors or the comparable governing
         body of such Successor determines in good faith that such transaction
         will not adversely affect the interests of the Holders of Notes in any
         material respect and a Board Resolution (or its equivalent if the
         Successor is not a corporation) to that effect is delivered to the
         Trustee; and

                  (5)      the Company has delivered to the Trustee an Officers'
         Certificate and an Opinion of Counsel, each stating that such
         consolidation, merger, sale, lease, conveyance, assignment, transfer or
         other disposition and, if a supplemental indenture is required in
         connection with such transaction, such supplemental indenture, comply
         with this Indenture and that all conditions precedent herein provided
         for relating to such transaction have been complied with.

                  The preceding provisions of this Section 5.01 shall not apply
         to any merger of another Person into the Company. In addition, the
         provision described in clause (3) of this Section 5.01 shall not apply
         to any merger into, or consolidation with, or any disposition of all or
         substantially all of the assets of the Company and its Subsidiaries
         taken as a whole to, the Company or any of its Wholly Owned
         Subsidiaries.

         SECTION 1.06. Supplement to Article VI of the Original Indenture.

         (a)      Section 6.01 of the Original Indenture is supplemented with
respect to the Notes by deleting clauses (3), (5) and (6) thereof, by
substituting for such deleted clauses the new clauses (3), (5) and (6) set forth
below and by adding the following new clauses (7)-(9) thereto in lieu of clause
(7) thereof:

                  (3)      the Company fails to comply with any of its covenants
         or agreements contained in Sections 3.12 and 3.14, Section 4.14 or
         Section 5.01 hereof;

                  ...

                  (5)      the Company or any of its Significant Subsidiaries
         pursuant to or within the meaning of any Bankruptcy Law:

                           (A)      commences a voluntary case,

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

                                     - 43 -
<PAGE>

                           (C)      consents to the appointment of a Bankruptcy
                  Custodian of it or for all or substantially all of its
                  property, or

                           (D)      makes a general assignment for the benefit
                  of its creditors;

                  (6)      a court of competent jurisdiction enters an order or
         decree under any Bankruptcy Law that remains unstayed and in effect for
         90 days and that:

                           (A)      is for relief against the Company or any of
                  its Significant Subsidiaries as debtor in an involuntary case,

                           (B)      appoints a Bankruptcy Custodian of the
                  Company or any of its Significant Subsidiaries or a Bankruptcy
                  Custodian for all or substantially all of the property of the
                  Company or any of its Significant Subsidiaries; or

                           (C)      orders the liquidation of the Company or any
                  of its Significant Subsidiaries.

                  (7)      Indebtedness (other than Limited Recourse
         Indebtedness) of the Company or any Subsidiary is not paid when due
         within the applicable grace period or is accelerated by the holders
         thereof and, in either case, the aggregate principal amount of such due
         and unpaid or accelerated Indebtedness exceeds $50 million;

                  (8)      a court of competent jurisdiction enters one or more
         judgments or orders against the Company or any Subsidiary in an
         uninsured or unindemnified aggregate amount in excess of $50 million
         that remain undischarged or unsatisfied for 60 consecutive days after
         the right to appeal them has expired; or

                  (9)      any Subsidiary Guarantee shall for any reason cease
         to be, or be asserted by the Company or any Subsidiary Guarantor, as
         applicable, not to be, in full force and effect (except pursuant to the
         release of any such Subsidiary Guarantee in accordance with this
         Indenture).

         (b)      The last paragraph of Section 6.01 of the Original Indenture
is supplemented with respect to the Notes by deleting the words "or (7)" in the
first sentence thereof.

         (c)      The first sentence of Section 6.05 of the Original Indenture
is supplemented with respect to the Notes by substituting the phrase "(1), (2),
(3), (7), (8) or (9)" for the phrase "(1), (2), (3) or (7)" appearing therein.

         SECTION 1.07. Supplement to Article VIII of the Original Identure.

         The Original Indenture is supplemented with respect to the Notes by
inserting the following provision in Article VIII:

                                     - 44 -
<PAGE>

         SECTION 8.05. Discharge of Subsidiary Guarantees.

         The obligations of each Subsidiary Guarantor with respect to its
Subsidiary Guarantee and under this Indenture shall be satisfied, discharged
and/or defeased automatically to the same extent as the obligations of the
Company with respect to the Notes are satisfied, discharged and/or defeased
pursuant to this Article VIII (in addition to any release or discharge pursuant
to Section 11.04), and such obligations of each Subsidiary Guarantor so
satisfied, discharged and/or defeased shall be subject to reinstatement pursuant
to Section 8.04 in the event that such obligations of the Company shall be
reinstated (unless released or discharged pursuant to Section 11.04).

         SECTION 1.08. Supplement to Article IX of the Original Indenture.

                  (a)      Section 9.01 of the Original Indenture is
         supplemented with respect to the Notes by inserting the following
         proviso at the end of clause (8) thereof: "; and provided further,
         however, that any such change or elimination to conform this Indenture
         to an Offering Memorandum shall not be deemed to so adversely affect
         the Notes."

                  (b)      Section 9.02 of the Original Indenture is
         supplemented with respect to the Notes by deleting the word "or" at the
         end of clause (9) thereof, replacing the period at the end of clause
         (10) thereof with a semi-colon, and adding the following new clauses
         (11) and (12) to such Section:

                           (11)     subordinate in right of payment, or
                  otherwise subordinate, the Notes or any Subsidiary Guarantee
                  to any other Indebtedness; or

                           (12)     materially and adversely affect the right
                  provided in Article III to require the Company to repurchase
                  Notes upon a Change in Control resulting in a Rating Decline.

         SECTION 1.09. New Article XI.

                  The Original Indenture is supplemented with respect to the
         Notes by inserting the following Article XI:

                                   ARTICLE XI

                              SUBSIDIARY GUARANTEES

         SECTION 11.01. Subsidiary Guarantees.

                  Each Subsidiary Guarantor, jointly and severally, hereby
         unconditionally guarantees to each Holder of a Note authenticated and
         delivered by the Trustee and to the Trustee and their respective
         successors and assigns, irrespective of the validity and enforceability
         of this Indenture, the Notes or the obligations of the Company
         hereunder or thereunder, that: (a) the principal of and any premium and
         interest on the Notes shall be promptly paid in full when due, whether
         at Stated

                                     - 45 -
<PAGE>

         Maturity, by acceleration, redemption or otherwise, and interest on the
         overdue principal of and interest on premium and interest on the Notes,
         if any, if lawful, and all other obligations of the Company to the
         Holders or the Trustee hereunder or thereunder shall be promptly paid
         in full or performed, all in accordance with the terms hereof and
         thereof; and (b) in case of any extension of time of payment or renewal
         of any Notes or any of such other obligations, that the same shall be
         promptly paid in full when due or performed in accordance with the
         terms of the extension or renewal, whether at Stated Maturity, by
         acceleration or otherwise. Failing payment when due of any amount so
         guaranteed or any performance so guaranteed for whatever reason, the
         Subsidiary Guarantors shall be jointly and severally obligated to pay
         the same immediately. The Subsidiary Guarantors hereby agree that their
         obligations hereunder shall be unconditional, irrespective of the
         validity, regularity or enforceability of the Notes or this Indenture,
         the absence of any action to enforce the same, any waiver or consent by
         any Holder with respect to any provisions hereof or thereof, the
         recovery of any judgment against the Company, any action to enforce the
         same or any other circumstance which might otherwise constitute a legal
         or equitable discharge or defense of a Subsidiary Guarantor. Each
         Subsidiary Guarantor hereby waives diligence, presentment, demand of
         payment, filing of claims with a court in the event of insolvency or
         bankruptcy of the Company, any right to require a proceeding first
         against the Company, protest, notice and all demands whatsoever and
         covenants that this Subsidiary Guarantee shall not be discharged (other
         than in accordance with Section 8.01(a), 8.01(c) or 11.04 of this
         Indenture) except by complete performance of the obligations contained
         in the Notes and this Indenture. If any Holder or the Trustee is
         required by any court or otherwise to return to the Company or
         Subsidiary Guarantors, or any custodian, trustee, liquidator or other
         similar official acting in relation to either the Company or Subsidiary
         Guarantors, any amount paid by either to the Trustee or such Holder,
         this Subsidiary Guarantee, to the extent theretofore discharged, shall
         be reinstated in full force and effect. Each Subsidiary Guarantor
         further agrees that, as between the Subsidiary Guarantors, on the one
         hand, and the Holders and the Trustee, on the other hand, (x) the
         maturity of the obligations guaranteed hereby may be accelerated as
         provided in Article VI for the purposes of this Subsidiary Guarantee,
         notwithstanding any stay, injunction or other prohibition preventing
         such acceleration in respect of the obligations guaranteed hereby and
         (y) in the event of any declaration of acceleration of such obligations
         as provided in Article VI, such obligations (whether or not due and
         payable) shall forthwith become due and payable by the Subsidiary
         Guarantors for the purpose of this Subsidiary Guarantee. In order to
         provide for just and equitable contribution among the Subsidiary
         Guarantors, in the event any payment or distribution is made by any
         Subsidiary Guarantor (a "Funding Subsidiary Guarantor") under its
         Subsidiary Guarantee, such Funding Subsidiary Guarantor shall be
         entitled to a contribution from each other Subsidiary Guarantor in a
         pro rata amount based on the Adjusted Net Assets of each Subsidiary
         Guarantor (including the Funding Subsidiary Guarantor) for all
         payments, damages and expenses incurred by the Funding Subsidiary
         Guarantor in discharging the Company's obligations with respect to

                                     - 46 -
<PAGE>

         the Notes or any other Subsidiary Guarantor's obligations with respect
         to any Subsidiary Guarantee. Each Subsidiary Guarantor agrees that it
         will not be entitled to exercise any right of subrogation or
         contribution in relation to the Holders of Notes in respect of any
         obligations guaranteed hereby until payment in full of all amounts
         guaranteed under this Section 11.01.

         SECTION 11.02. Execution and Delivery of Supplemental Indentures.

                  To effect its Subsidiary Guarantee set forth in Section 11.01,
         each Subsidiary Guarantor hereby agrees that a supplement to this
         Indenture shall be executed on behalf of such Subsidiary Guarantor by
         its duly authorized officer in accordance with Section 4.17 hereof and
         that such Subsidiary Guarantor shall deliver to the Trustee the Opinion
         of Counsel required by Section 4.17 hereof.

                  The delivery of any Note by the Trustee, after the
         authentication thereof hereunder and whether upon original issue,
         registration of transfer, exchange or otherwise, shall constitute due
         delivery of the Subsidiary Guarantee set forth in this Indenture on
         behalf of each Person that is then a Subsidiary Guarantor.

         SECTION 11.03. Subsidiary Guarantors May Consolidate, etc., on Certain
         Terms.

                  No Subsidiary Guarantor may consolidate with or merge with or
         into (whether or not such Subsidiary Guarantor is the surviving Person)
         another Person whether or not affiliated with such Subsidiary Guarantor
         unless:

                  (a)      subject to the provisions of Section 11.04 hereof,
         the Person formed by or surviving any such consolidation or merger (if
         other than such Subsidiary Guarantor) assumes all the obligations of
         such Subsidiary Guarantor, pursuant to a supplemental indenture in form
         and substance reasonably satisfactory to the Trustee, in respect of the
         Notes, this Indenture and such Subsidiary Guarantor's Subsidiary
         Guarantee;

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

                  (c)      the Company has delivered to the Trustee an Officers'
         Certificate and an Opinion of Counsel, each stating that such
         consolidation or merger and, if a supplemental indenture is required in
         connection with such transaction, such supplemental indenture, comply
         with this Article and that all conditions precedent herein provided for
         relating to such transaction have been complied with.

                  In case of any such consolidation or merger and upon the
         assumption by the successor Person, by supplemental indenture, executed
         and delivered to the Trustee and satisfactory in form to the Trustee,
         of the obligations of the Subsidiary Guarantor in respect of the Notes,
         this Indenture and such Subsidiary Guarantor's Subsidiary Guarantee,
         such successor Person shall succeed to and be

                                     - 47 -
<PAGE>

         substituted for the Subsidiary Guarantor with the same effect as if it
         had been named herein as a Subsidiary Guarantor.

                  Except as set forth in Articles IV and V hereof, nothing
         contained in this Indenture or in any of the Notes shall prevent any
         consolidation or merger of a Subsidiary Guarantor with or into the
         Company or another Subsidiary Guarantor, or shall prevent any sale or
         other disposition of all or substantially all of the assets of a
         Subsidiary Guarantor to the Company or another Subsidiary Guarantor.

         SECTION 11.04. Releases of Subsidiary Guarantees.

                  In the event of (1) a sale or other disposition of all or
         substantially all of the assets of any Subsidiary Guarantor to a Person
         other than a Subsidiary or the Company in a transaction that does not
         violate any provisions of this Indenture, by way of merger,
         consolidation or otherwise, or (2) a sale or other disposition
         (including, without limitation, by foreclosure) of all of the Capital
         Stock of any Subsidiary Guarantor to a Person other than a Subsidiary
         or the Company, then such Subsidiary Guarantor shall be released and
         relieved of any obligations under this Indenture and its Subsidiary
         Guarantee; provided that all obligations of such Subsidiary Guarantor
         under all of its guarantees of any other Indebtedness of the Company
         shall also terminate or be released upon such sale or other
         disposition. Upon delivery by the Company to the Trustee of an
         Officers' Certificate and an Opinion of Counsel to the effect that such
         sale or other disposition was made in accordance with the provisions of
         this Indenture, the Trustee shall execute any documents reasonably
         required in order to evidence the release of any Subsidiary Guarantor
         from its obligations under this Indenture and its Subsidiary Guarantee.

                  In the event of a release or discharge in full of all
         obligations of any Subsidiary Guarantor in respect of all of its
         guarantees of Indebtedness of the Company (other than the Notes and
         Indebtedness of the Company under any Credit Facility), such Subsidiary
         Guarantor shall, upon the written request of the Company to the
         Trustee, be released and relieved of any obligation under this
         Indenture and its Subsidiary Guarantee. Upon delivery by the Company to
         the Trustee of an Officers' Certificate to the effect that such
         Subsidiary Guarantor has been released or discharged in full from all
         of its obligations under all of its guarantees of Indebtedness of the
         Company (other than the Notes and Indebtedness of the Company under any
         Credit Facility), the Trustee shall execute any documents reasonably
         required in order to evidence the release of such Subsidiary Guarantor
         from its obligations under this Indenture and its Subsidiary Guarantee.

                  Any Subsidiary Guarantor that is designated a Non-Recourse
         Subsidiary in accordance with the terms of this Indenture shall be
         released from and relieved of its obligations under this Indenture and
         its Subsidiary Guarantee. Upon effectiveness of such designation, the
         Trustee shall execute any documents reasonably required in order to
         evidence the release of such Subsidiary Guarantor from its obligations
         under this Indenture and its Subsidiary Guarantee.

                                     - 48 -
<PAGE>

                  Any Subsidiary Guarantor not released from its obligations
         under its Subsidiary Guarantee shall remain liable for the full amount
         of principal of and any premium and interest on the Notes and for the
         other obligations of any Subsidiary Guarantor under this Indenture.

         SECTION 11.05. Limitation on Subsidiary Guarantor Liability.

                  For purposes hereof, each Subsidiary Guarantor's liability
         shall be that amount from time to time equal to the aggregate liability
         of such Subsidiary Guarantor thereunder, but shall be limited to the
         lesser of (i) the aggregate amount of the obligations of the Company
         under the Notes and this Indenture and (ii) the amount, if any, which
         would not have (A) rendered such Subsidiary Guarantor "insolvent" (as
         such term is defined in the Bankruptcy Act and in the Debtor and
         Creditor Law of the State of New York) or (B) left it with unreasonably
         small capital at the time its Subsidiary Guarantee of the Notes was
         entered into, after giving effect to the incurrence of existing
         Indebtedness immediately prior to such time; provided that, it shall be
         a presumption in any lawsuit or other proceeding in which such
         Subsidiary Guarantor is a party that the amount guaranteed pursuant to
         its Subsidiary Guarantee is the amount set forth in clause (i) above
         unless any creditor, or representative of creditors of such Subsidiary
         Guarantor, or debtor in possession or trustee in bankruptcy of such
         Subsidiary Guarantor, otherwise proves in such a lawsuit that the
         aggregate liability of such Subsidiary Guarantor is limited to the
         amount set forth in clause (ii). In making any determination as to the
         solvency or sufficiency of capital of a Subsidiary Guarantor in
         accordance with the previous sentence, the right of such Subsidiary
         Guarantor to contribution from other Subsidiary Guarantors and any
         other rights such Subsidiary Guarantor may have, contractual or
         otherwise, shall be taken into account.

         SECTION 1.10. Effect of Article 1. The supplements to the Original
Indenture set forth in Article 1 of this First Supplemental Indenture affect
only the provisions of the Original Indenture as such provisions relate to the
Notes, the series of Securities comprised of the Notes and the rights, remedies
and obligations of the Company, the Subsidiary Guarantors, the Holders of Notes,
the Trustee and other Persons set forth in the Original Indenture as such
rights, remedies and obligations relate to the Notes.

                                    ARTICLE 2

                                    THE NOTES

         SECTION 2.01. Form and Terms. The Notes shall be issued initially in
the form of one or more Global Securities substantially in the form set forth on
Exhibit A hereto, duly executed by the Company and authenticated by the Trustee
as provided in the Indenture. The terms of the Notes set forth on Exhibit A
hereto are incorporated by reference herein as if set forth herein in their
entirety. The Notes constituting Transfer Restricted Securities will be resold
initially only (a) to QIBs in reliance on Rule 144A and (b) in offshore
transactions to Persons other than U.S. Persons in reliance on Regulation S.
Pursuant to the terms of a Registration Rights Agreement, upon consummation of
the Exchange Offer contemplated thereby, the Notes constituting

                                     - 49 -
<PAGE>

Transfer Restricted Securities will be exchanged by the Holders for Exchange
Notes to be issued by the Company in accordance with Section 2.03 hereof.

         SECTION 2.02. Designation, Amount, etc.

         (a)      The Notes shall be entitled the "7 3/8% Senior Notes due 2014"
of the Company.

         (b)      The Trustee shall authenticate and deliver Notes for original
issue on the Issue Date in an aggregate principal amount of $500,000,000 upon a
Company Order for the authentication and delivery of Notes, without any further
action by the Company, with Notes initially resold in reliance upon Rule 144A
and Regulation S being represented by separate Global Securities, which are
referred to in this Article 2 as the "Rule 144A Global Security" and the
"Regulation S Global Security," respectively. Subject to its compliance with
Section 4.11 of the Indenture, if then applicable, the Company may, from time to
time, issue for sale to one or more Initial Purchasers an unlimited amount of
additional Notes ("Additional Notes") under the Indenture, which shall be issued
in the same form as the Notes issued on the Issue Date and which shall have
identical terms as the Notes issued on the Issue Date other than with respect to
the issue date, issue price and date of first payment of interest; provided,
however, that no Additional Notes may be issued at a price that would cause such
Additional Notes to have "original issue discount" within the meaning of the
Code. The Company Order delivered by the Company to the Trustee pursuant to
Section 2.04 of the Original Indenture for the authentication and delivery of
any Additional Notes shall specify whether or not such Additional Notes shall be
Transfer Restricted Securities. The Notes issued on the Issue Date and any
Additional Notes subsequently issued, together with any Exchange Notes issued in
exchange therefor pursuant to an Exchange Offer, shall be treated as a single
series for all purposes under the Indenture, including, without limitation,
waivers, amendments, redemptions and offers to purchase.

         (c)      If the Company issues additional Transfer Restricted
Securities prior to the completion of an Exchange Offer, the period of the
resale restrictions applicable to any Transfer Restricted Securities previously
offered and sold in reliance on Rule 144A will be automatically extended to the
last day of the period of any resale restrictions imposed on any such additional
Transfer Restricted Securities.

         (d)      At all times while the Notes are outstanding, the Company
shall maintain a Place of Payment for the Notes in The City of New York, which
Place of Payment shall be initially the office of the Trustee located at 4 New
York Plaza, 15th Floor, New York, New York.

         (e)      The Holders shall be entitled to the benefits of Section
4.03(b) of the Original Indenture applicable to Rule 144A Securities.

         (f)      No Additional Amounts shall be payable with respect to the
Notes.

         SECTION 2.03. Transfer of Transfer Restricted Securities.

         (a)      When Notes are presented to the Registrar with the request to
register the transfer of such Notes or to exchange such Notes for an equal
principal amount of Notes of other authorized denominations, the Registrar shall
register the transfer or make the exchange in accordance with Article II of the
Original Indenture. In addition, in the case of Transfer

                                     - 50 -
<PAGE>

Restricted Securities in certificated form, such request to register the
transfer or to make the exchange shall be accompanied by the following
additional information and documents, as applicable, upon which the Registrar
may conclusively rely:

                  (1)      if such Transfer Restricted Securities are being
         delivered to the Registrar by a Holder for registration in the name of
         such Holder, without transfer, a certification from such Holder to that
         effect in substantially the form of Exhibit C hereto; or

                  (2)      if such Transfer Restricted Securities are being
         transferred (i) to a QIB in accordance with Rule 144A under the
         Securities Act or (ii) pursuant to an exemption from registration in
         accordance with Rule 144 under the Securities Act (and based upon an
         opinion of counsel if the Company or the Trustee so requests), a
         certification to that effect from such Holder in substantially the form
         of Exhibit C hereto; or

                  (3)      if such Transfer Restricted Securities are being
         transferred to Persons other than U.S. Persons in reliance on
         Regulation S, a certification to that effect from such Holder in
         substantially the form of Exhibit D hereto; or

                  (4)      if such Transfer Restricted Securities are being
         transferred in reliance on another exemption from the registration
         requirements of the Securities Act (and based upon an opinion of
         counsel if the Company or the Trustee so requests), a certification to
         that effect from such Holder in substantially the form of Exhibit C
         hereto.

         (b)      Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global Security)
pursuant to Rule 144 under the Securities Act or an effective registration
statement under the Securities Act:

                  (1)      in the case of any Transfer Restricted Security that
         is in the form of a certificated Note, the Registrar shall permit the
         Holder thereof to exchange such Transfer Restricted Security for a
         certificated Note that does not bear the legend set forth in Section
         2.04 below and rescind any restriction on the transfer of such Transfer
         Restricted Security set forth in this Section 2.03; and

                  (2)      in the case of any Transfer Restricted Security
         represented by a Global Security, such Transfer Restricted Security
         shall not be required to bear the legend set forth in Section 2.04
         below if all other interests in such Global Security have been or are
         concurrently being sold or transferred pursuant to Rule 144 under the
         Securities Act or pursuant to an effective registration statement under
         the Securities Act.

Notwithstanding the foregoing, upon consummation of an Exchange Offer, the
Company shall issue and, upon receipt of an authentication order in accordance
with Section 2.04 of the Original Indenture, the Trustee shall authenticate
Exchange Notes in exchange for other Notes accepted for exchange in the Exchange
Offer, which Exchange Notes shall not bear the legend set forth in Section 2.04
below, and the Registrar shall rescind any restriction on the transfer of such
Exchange Notes set forth in this Section 2.03, in each case unless the Holder of
such Notes accepted for exchange in the Exchange Offer (1) is an affiliate of
the Company within the meaning of Rule 405 under the Securities Act or an
Initial Purchaser holding Notes acquired by it and having the status of an
unsold allotment in the initial offering and sale of Notes pursuant to

                                     - 51 -
<PAGE>

the Purchase Agreement, (2) does not acquire the Exchange Notes in the ordinary
course of such Holder's business or (3) has an arrangement or understanding with
any Person to participate in the Exchange Offer for the purpose of distributing
such Exchange Notes or is engaged in, and intends to engage in, any such
distribution. The Company shall identify to the Trustee such Holders of the
Notes in a written certification signed by an Officer of the Company and, absent
certification from the Company to such effect, the Trustee shall assume that
there are no such Holders.

         (c)      Until the 40th day after the later of the commencement of the
offering of the Notes and the Issue Date (such period, the "Distribution
Compliance Period"), a beneficial interest in a Regulation S Global Note may be
transferred to a Person who takes delivery in the form of an interest in a Rule
144A Global Note only if the transferor first delivers to the Trustee a written
certificate (in the form provided in Exhibit C hereto) to the effect that such
transfer is being made to a Person who the transferor reasonably believes is
purchasing for its own account or accounts as to which it exercises sole
investment discretion and that such Person is a QIB, in each case in a
transaction meeting the requirements of Rule 144A and in accordance with any
applicable securities laws of any state of the United States or any other
jurisdiction. After the expiration of the Distribution Compliance Period, such
certification requirements shall not apply to such transfers of beneficial
interests in the Regulation S Global Notes.

         (d)      Beneficial interests in a Rule 144A Global Note may be
transferred to a Person who takes delivery in the form of an interest in a
Regulation S Global Note, whether before or after the expiration of the
Distribution Compliance Period, only if the transferor first delivers to the
trustee a written certificate (in the form provided in Exhibit C or D hereto, as
applicable) to the effect that such transfer is being made in accordance with
Rule 904 of Regulation S or Rule 144 (if available).

         SECTION 2.04. Restrictive Legend.

         (a)      Except as provided in Section 2.03 hereof, prior to the Resale
Restriction Termination Date, each certificate evidencing the Notes issued on
the Issue Date or any Additional Notes subsequently issued as Transfer
Restricted Securities shall bear a legend in substantially the following form:

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

         THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF PRIDE INTERNATIONAL,
         INC. (THE "COMPANY") THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED
         OR OTHERWISE TRANSFERRED

                                     - 52 -
<PAGE>

         PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD UNDER RULE 144(K) UNDER
         THE SECURITIES ACT THAT APPLIES TO THIS SECURITY, ONLY (I) TO THE
         COMPANY, (II) IN THE UNITED STATES TO A PERSON WHOM THE SELLER
         REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
         RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
         REQUIREMENTS OF RULE 144A, (III) OUTSIDE THE UNITED STATES IN AN
         OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES
         ACT, (IV) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
         SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (V)
         PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
         ACT, IN EACH OF CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE
         SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER
         WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
         OF THE NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A)
         ABOVE. [IF CERTIFICATED: IN ADDITION, WITH RESPECT TO ANY TRANSFER OF
         THIS NOTE (OTHER THAN A TRANSFER PURSUANT TO CLAUSE (A)(V) ABOVE) PRIOR
         TO THE EXPIRATION OF SUCH HOLDING PERIOD, THE HOLDER WILL DELIVER TO
         THE COMPANY AND THE TRUSTEE SUCH CERTIFICATES AND OTHER INFORMATION
         AND, IN THE CASE OF A TRANSFER PURSUANT TO CLAUSE (A)(IV) ABOVE, A
         LEGAL OPINION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT THE
         TRANSFER BY IT COMPLIES WITH THE FOREGOING RESTRICTIONS.]

                                    ARTICLE 3

                         REPRESENTATIONS OF THE COMPANY

         SECTION 3.01. Authority of the Company. The Company is duly authorized
to execute and deliver this First Supplemental Indenture, and all corporate
action on its part required for the execution and delivery of this First
Supplemental Indenture has been duly and effectively taken.

         SECTION 3.02. Truth of Recitals and Statements. The Company warrants
that the recitals of fact and statements contained in this First Supplemental
Indenture are true and correct, and that the recitals of fact and statements
contained in all certificates and other documents furnished thereunder will be
true and correct.

                                    ARTICLE 4

                             CONCERNING THE TRUSTEE

         SECTION 4.01. Acceptance of Trusts. The Trustee accepts the trusts
hereunder and agrees to perform the same, but only upon the terms and conditions
set forth in the Original Indenture

                                     - 53 -
<PAGE>

and in this First Supplemental Indenture, to all of which the Company and the
respective Holders of the Notes at any time hereafter outstanding agree by their
acceptance thereof.

         SECTION 4.02. No Responsibility of Trustee for Recitals, Etc. The
recitals and statements contained in this First Supplemental Indenture shall be
taken as the recitals and statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this First Supplemental
Indenture, except that the Trustee is duly authorized by all necessary corporate
actions to execute and deliver this First Supplemental Indenture.

                                    ARTICLE 5

                            MISCELLANEOUS PROVISIONS

         SECTION 5.01. Relation to the Original Indenture. The provisions of
this First Supplemental Indenture shall become effective immediately upon the
execution and delivery hereof. This First Supplemental Indenture and all the
terms and provisions herein contained shall form a part of the Original
Indenture as fully and with the same effect as if all such terms and provisions
had been set forth in the Original Indenture; provided, however, such terms and
provisions shall be so included in this First Supplemental Indenture solely for
the benefit of the Company, the Subsidiary Guarantors, if any, the Trustee and
the Holders of the Notes. The Original Indenture is hereby ratified and
confirmed and shall remain and continue in full force and effect in accordance
with the terms and provisions thereof, as supplemented by this First
Supplemental Indenture, and the Original Indenture and this First Supplemental
Indenture shall be read, taken and construed together as one instrument.

         SECTION 5.02. Meaning of Terms. Any term used in this First
Supplemental Indenture which is defined in the Original Indenture shall have the
meaning specified in the Original Indenture, unless the context shall otherwise
require.

         SECTION 5.03. Counterparts of Supplemental Indenture. This First
Supplemental Indenture may be executed in several counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
instrument.

         SECTION 5.04. Governing Law. This First Supplemental Indenture and the
Notes shall be governed by and construed in accordance with the internal laws of
the State of New York, except to the extent the laws of the State of New York
require the application of the laws of another jurisdiction.

                                     - 54 -
<PAGE>

         IN WITNESS WHEREOF, Pride International, Inc. has caused this First
Supplemental Indenture to be executed in its corporate name by a duly authorized
officer, and JPMorgan Chase Bank has caused this First Supplemental Indenture to
be executed by a duly authorized officer, all as of the date first above
written.

                                        PRIDE INTERNATIONAL, INC.

                                        By:    /s/ Steven D. Oldham
                                           ------------------------------------
                                           Steven D. Oldham
                                           Vice President - Treasury
                                           and Investor Relations

                                        JPMORGAN CHASE BANK,
                                        as Trustee

                                        By:    /s/ Larry O' Brien
                                           ------------------------------------
                                           Larry O'Brien
                                           Vice President

                                     - 55 -
<PAGE>

                                    EXHIBIT A

                             [FORM OF FACE OF NOTE]
                           [RULE 144A GLOBAL SECURITY]
                         [REGULATION S GLOBAL SECURITY]

                            PRIDE INTERNATIONAL, INC.

                          7 3/8% SENIOR NOTE DUE 2014

[ADD LEGENDS REQUIRED BY SECTION 2.04 OF THE FIRST SUPPLEMENTAL INDENTURE TO THE
INDENTURE REFERRED TO ON THE OTHER SIDE OF THIS NOTE]

         [UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), SHALL
ACT AS THE DEPOSITARY UNTIL A SUCCESSOR SHALL BE APPOINTED BY THE COMPANY.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO
THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR 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 THEREIN.]*

_______________________________
* On Global Securities Only.

                                      A-1
<PAGE>

                                                               CUSIP No. [     ]

No.                                                            $________________

         Pride International, Inc., a Delaware corporation, promises to pay to
_____________, or registered assigns, the principal sum of
____________________________ Dollars[, or such greater or lesser amount as
indicated on the Schedule of Exchanges of Securities hereto,]* on July 15, 2014.

         This Note shall bear interest as specified on the other side of this
Note. All capitalized terms used herein without definition shall have the
respective meanings assigned thereto in the Indenture referred to on the other
side of this Note.

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

                                  PRIDE INTERNATIONAL, INC.

                                  By: __________________________________________
                                      Name:
                                      Title:

                                  By: __________________________________________
                                      Name:
                                      Title:

TRUSTEE'S CERTIFICATE OF
AUTHENTICATION

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

JPMORGAN CHASE BANK,
as Trustee

By:_____________________________
       Authorized Officer

Dated:__________________________

-----------
*On Global Securities only.

                                      A-2
<PAGE>

                         [FORM OF REVERSE SIDE OF NOTE]

                                  7 3/8% SENIOR
                                  NOTE DUE 2014

1.       Interest

         Pride International, Inc., a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Note at the rate per
annum shown above. The Company shall pay such interest semi-annually in arrears
on July 15 and January 15 of each year, commencing January 15, 2005. Interest
will be paid on each such Interest Payment Date to the Holder as of the
immediately preceding Regular Record Date, even if such Interest Payment Date is
a Redemption Date, Change in Control Purchase Date or other Maturity date, but
subject to the provisions of the Indenture respecting payment of defaulted
interest. Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from July 7, 2004.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months. Notwithstanding any contrary provision in the Indenture, the Company
promises to pay interest on demand at the rate of 8.375% per annum, compounded
semi-annually, on overdue principal of, premium, if any, and interest on the
Notes, including any Redemption Price or Change in Control Purchase Price (to
the extent that payment of such interest is enforceable under applicable law).

2.       Method of Payment

         Upon the terms and subject to the conditions of the Indenture, the
Company will make all payments of the Redemption Price and Change in Control
Purchase Price and principal due at Maturity in respect of the Notes to Holders
who surrender such Notes to a Paying Agent to collect such payments; provided
that if any Redemption Date, Change in Control Purchase Date or other Maturity
date is an Interest Payment Date, accrued and unpaid interest shall be paid to
the Holder as of the immediately preceding Regular Record Date. The Company will
pay all amounts due in respect of the Notes in money of the United States of
America that at the time of payment is legal tender for payment of public and
private debts. The Company will make such payments (i) by wire transfer of
immediately available funds to any account maintained in the United States with
respect to Global Securities or Notes held in certificated form with an
aggregate principal amount in excess of $2,000,000 whose Holder has requested
such method of payment and provided wire transfer instructions to the Paying
Agent or (ii) by check payable in such money mailed to a Holder's registered
address with respect to any certificated Notes.

3.       Paying Agent and Registrar

         Initially, JPMorgan Chase Bank, the Trustee under the Indenture, will
act as Paying Agent and Registrar at its office at 4 New York Plaza, 15th Floor,
New York, New York 10004. The Company may appoint and change any Paying Agent or
Registrar without notice to any Holder, provided that the Company shall maintain
in The City of New York an office or agency of the Registrar and the Paying
Agent. The Company or any of its Subsidiaries may act as Paying Agent or
Registrar.

                                      A-3
<PAGE>

4.       Indenture

         This Note is one of a duly authorized series of Securities of the
Company, designated as its 7 3/8% Senior Notes due 2014, issued under an
Indenture dated as of July 1, 2004, as amended and supplemented by the First
Supplemental Indenture dated as of the Issue Date and as it may otherwise be
supplemented thereafter with applicability to the Notes (as so amended and
supplemented, the "Indenture"), between the Company and the Trustee. The terms
of the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), except as provided in the Indenture. Capitalized terms
used herein or on the face hereof and not defined herein have the meanings
ascribed thereto in the Indenture. The Notes are subject to all such terms, and
Holders are referred to the Indenture and the Trust Indenture Act for a
statement of those terms. Those terms are incorporated herein by reference.

         The Notes are unsecured, general obligations of the Company initially
limited to an aggregate principal amount specified in the Indenture, but with
the right of the Company, subject to the conditions set forth in the Indenture,
to issue from time to time after the Issue Date an unlimited aggregate principal
amount of Additional Notes. The Indenture provides for the issuance of other
series of debt securities (including the Notes, the "Securities") thereunder.

5.       Redemption at the Option of the Company

         (a)      At any time prior to July 15, 2007, the Company may on any one
or more occasions redeem up to 35% of the aggregate principal amount of Notes
issued under the Indenture at a Redemption Price of 107.375% of the principal
amount, plus accrued and unpaid interest, if any, to the Redemption Date
(subject to the right of Holders on a Regular Record Date to receive interest
due on the relevant Interest Payment Date), with the net cash proceeds of one or
more Equity Offerings, provided that:

         -        at least 65% of the aggregate principal amount of Notes issued
                  under the Indenture remains outstanding immediately after the
                  occurrence of such redemption (excluding Notes held by the
                  Company and its Subsidiaries); and

         -        the redemption occurs within 180 days of the date of the
                  closing of such Equity Offering.

         (b)      On and after July 15, 2009, the Company may redeem all or a
part of the Notes at the Redemption Prices (expressed as percentages of
principal amount) set forth below, plus accrued and unpaid interest, if any, on
the Notes redeemed to the applicable Redemption Date (subject to the right of
Holders on a Regular Record Date to receive interest due on the relevant
Interest Payment Date), if redeemed during the twelve-month period beginning on
July 15 of the years indicated below:

                                      A-4
<PAGE>

<TABLE>
<CAPTION>
                         YEAR                                            PERCENTAGE
                         ----                                            ----------
<S>                                                                      <C>
2009..................................................                    103.688%
2010..................................................                    102.458%
2011..................................................                    101.229%
2012 and thereafter...................................                    100.000%
</TABLE>

         (c)      The Company may redeem all or a part of the Notes, at any time
prior to July 15, 2009, at a Redemption Price equal to the greater of:

         -        100% of the principal amount of the Notes to be redeemed plus
                  accrued but unpaid interest to the Redemption Date; and

         -        (a) the sum of the present values of the remaining scheduled
                  payments of principal and interest thereon from the Redemption
                  Date to July 15, 2009 (except for currently accrued but unpaid
                  interest) (assuming the Notes are redeemed, and based on the
                  applicable Redemption Price, on that date) discounted to the
                  Redemption Date, on a semi-annual basis (assuming a 360-day
                  year consisting of twelve 30-day months), at the Treasury
                  Rate, plus 50 basis points, plus (b) accrued but unpaid
                  interest to the Redemption Date (subject to the right of
                  Holders on a Regular Record Date to receive interest due on
                  the relevant Interest Payment Date).

The actual Redemption Price, calculated as provided in this clause (c), shall be
calculated and certified to the Trustee and the Company by the Independent
Investment Banker. For purposes of determining the Redemption Price pursuant to
this clause (c), the following definitions are applicable:

         "Comparable Treasury Issue" means the United States Treasury security
or securities selected by the Independent Investment Banker as having an actual
or interpolated maturity comparable to the remaining term of the Notes to July
15, 2009 that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities
of a comparable maturity.

         "Comparable Treasury Price" means, for any Redemption Date, (1) the
average of five Reference Treasury Dealer Quotations for such Redemption Date,
after excluding the highest and lowest of such Reference Treasury Dealer
Quotations, or (2) if the Independent Investment Banker obtains fewer than five
such Reference Treasury Dealer Quotations, the average of all such quotations.

         "Independent Investment Banker" means Citigroup Global Markets Inc. and
any successor firm, or if such firm is unwilling or unable to select the
Comparable Treasury Issue, an independent investment banking institution of
national standing appointed by the Trustee after consultation with the Company.

         "Reference Treasury Dealer" means each of Citigroup Global Markets
Inc., Banc of America Securities LLC, Deutsche Bank Securities Inc. and their
respective successors, plus two

                                      A-5
<PAGE>

other dealers selected by the Independent Investment Banker that are primary
U.S. government securities dealers in New York City; provided, if any of
Citigroup Global Markets Inc., Banc of America Securities LLC, Deutsche Bank
Securities Inc. or any primary U.S. government securities dealer selected by the
Independent Investment Banker shall cease to be a primary U.S. government
securities dealer, then such other primary U.S. government securities dealers as
may be substituted by the Independent Investment Banker.

         "Reference Treasury Dealer Quotations" means, for each Reference
Treasury Dealer and any Redemption Date, the average, as determined by the
Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) at 3:30 p.m.,
New York City time, on the third Business Day preceding such Redemption Date, as
quoted in writing to the Trustee by such Reference Treasury Dealer.

         "Treasury Rate" means, with respect to any Redemption Date, (1) the
yield, under the heading which represents the average for the immediately
preceding week, appearing in the most recently published statistical release
designated "H.15(519)" or any successor publication which is published weekly by
the Board of Governors of the Federal Reserve System and which establishes
yields on actively traded United States Treasury securities adjusted to constant
maturity under the caption "Treasury Constant Maturities," for the maturity
corresponding to the Comparable Treasury Issue (if no maturity is within three
months before or after the remaining term of the Notes, yields for the two
published maturities most closely corresponding to the Comparable Treasury Issue
shall be determined and the Treasury Rate shall be interpolated or extrapolated
from such yields on a straight line basis, rounding to the nearest month) or (2)
if such release (or any successor release) is not published during the week in
which the calculation date falls (or in the immediately preceding week if the
calculation date falls on any day prior to the usual publication date for such
release) or does not contain such yields, the rate per year equal to the
semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such Redemption Date. The Treasury Rate shall be calculated on the third
Business Day preceding the Redemption Date, and no later than the Business Day
next preceding the Redemption Date the Company shall deliver to the Trustee a
written notice setting forth the Redemption Price and showing its calculation in
reasonable detail. Any weekly average yields calculated by interpolation or
extrapolation will be rounded to the nearest 1/100th of 1%, with any figure of
1/200th of 1% or above being rounded upward.

         (d)      No sinking fund is provided for the Notes.

6.       Purchase by the Company at the Option of the Holder upon a Change in
         Control

         Upon to the terms and subject to the conditions of the Indenture, if
any Change in Control resulting in a Rating Decline occurs, the Company shall,
at the option of the Holder, purchase all Notes for which a Change in Control
Purchase Notice shall have been delivered as provided in the Indenture and not
withdrawn, as of the date that is 35 Business Days after the occurrence of such
Change in Control, for a Change in Control Purchase Price equal to 101% of the
principal amount of such Notes, plus accrued and unpaid interest, if any,
thereon through and including the Change in Control Purchase Date (subject to
the right of Holders on a Regular Record Date to

                                      A-6
<PAGE>

receive interest due on the relevant Interest Payment Date). The Change in
Control Purchase Price shall be paid in cash.

         Holders have the right to withdraw any Change in Control Purchase
Notice by delivering to the Paying Agent a written notice of withdrawal prior to
the close of business on the Change in Control Purchase Date in accordance with
the provisions of the Indenture.

         If cash sufficient to pay the Change in Control Purchase Price of all
Notes or portions thereof to be purchased as of the Change in Control Purchase
Date is deposited with the Paying Agent on the Business Day following the Change
in Control Purchase Date, then interest ceases to accrue on such Notes (or
portions thereof) after the Change in Control Purchase Date and the Holders
thereof shall have no other rights as such (other than the right to receive the
Change in Control Purchase Price upon surrender of such Note). No interest on
the Notes to be purchased will be payable by the Company on any Interest Payment
Date subsequent to the Business Day following the Change in Control Purchase
Date, if the requirements of the immediately preceding sentence are satisfied.

7.       Notice of Redemption

         Notice of redemption will be given in the manner provided in the
Indenture not less than 30 days nor more than 60 days prior to the Redemption
Date. If money sufficient to pay the Redemption Price of all Notes (or portions
thereof) to be redeemed on the Redemption Date is deposited with the Paying
Agent by 11:00 a.m., New York City time, on the Redemption Date, from and after
such Redemption Date, interest ceases to accrue on such Notes or portions
thereof. No interest on redeemed Notes will be payable by the Company on any
Interest Payment Date subsequent to the Redemption Date. Notes in denominations
larger than $1,000 of principal amount may be redeemed in part but only in
integral multiples of $1,000 of principal amount.

8.       Denominations; Transfer; Exchange

         The Notes initially are issued are in permanent global form. Under
certain circumstances described in the Indenture, Notes may also be issued in
the form of certificated Notes in fully registered form, without coupons, in
minimum denominations of $1,000 principal amount or in integral multiples
thereof. A Holder may register a transfer or exchange of Notes in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any transfer
taxes or similar governmental changes required by law or permitted by the
Indenture. The Registrar need not register the transfer or exchange of any Notes
selected for redemption in whole or in part (except the unredeemed portion of
any Note to be redeemed in part) or any Notes during a period beginning 15
Business Days prior to the mailing of the relevant notice of redemption or
repurchase and ending on the close of business on the day of mailing such
notice.

9.       Persons Deemed Owners

         The Person in whose name this Note is registered may be treated as the
owner of this Note for all purposes.

                                      A-7
<PAGE>

10.      Amendment; Waiver

         Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in aggregate principal amount of the Notes at the
time outstanding and (ii) certain defaults or noncompliance with certain
provisions may be waived with the consent of the Holders of a majority in
aggregate principal amount of the Notes at the time outstanding. Subject to
certain exceptions set forth in the Indenture, without the consent of any
Holder, the Company and the Trustee may amend or supplement the Indenture or the
Notes in certain respects set forth in the Indenture.

11.      Defaults and Remedies

         Under the Indenture, Events of Default include (i) default in the
payment of interest that continues for a period of 30 days; (ii) default in the
payment of the principal amount, Redemption Price or Change in Control Purchase
Price with respect to any Note when the same becomes due and payable; (iii)
failure by the Company to comply with any of the provisions of Sections 3.12 and
3.14, Section 4.14 or Section 5.01 of the Indenture; (iv) failure by the Company
for 60 days after notice from the Trustee or the Holders of at least 25% in
aggregate principal amount of the Notes then outstanding to comply with any of
its other agreements in the Indenture or the Notes (or, if the default affects
more than one series of Securities issued under the Indenture, the holders of at
least 25% in aggregate outstanding principal amount of all series so affected);
(v) any Subsidiary Guarantee shall for any reason cease to be, or be asserted by
the Company or any Subsidiary Guarantor, as applicable, not to be, in full force
and effect (except pursuant to the release of any such Subsidiary Guarantee in
accordance with the Indenture); (vi) failure by the Company or any of its
Subsidiaries to pay Indebtedness (other than Limited Recourse Indebtedness) of
the Company or any Subsidiary when due within the applicable grace period, or
the acceleration of such Indebtedness by the holders thereof, which Indebtedness
exceeds $50 million in the aggregate; (vii) entry of certain judgments or orders
against the Company or any Subsidiary; and (viii) certain events of bankruptcy
or insolvency with respect to the Company or any of its Significant
Subsidiaries. If an Event of Default occurs and is continuing, either the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Notes at the time outstanding may declare the principal amount of the Notes to
be due and payable immediately, together with accrued and unpaid interest
thereon, except that, in the case of an Event of Default specified in clause
(iv) above, if the Event of Default affects more than one series of Securities,
the Trustee, or the Holders of not less than 25% in principal amount of the
outstanding Securities of all series so affected shall be required to make such
declaration. Certain events of bankruptcy or insolvency are Events of Default
that will result in the principal amount of the Notes, together with accrued and
unpaid interest thereon, becoming due and payable immediately upon the
occurrence of such Events of Default.

         As set forth in, and subject to the provisions of, the Indenture, no
Holder of any Note shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Indenture, or for the appointment of a receiver
or trustee, or for any other remedy thereunder, unless certain conditions set
forth in the Indenture have been satisfied. The Trustee may refuse to enforce
the Indenture or the Notes unless it receives indemnity satisfactory to it.
Subject to certain limitations (including that, in some cases, a majority in
principal amount of all outstanding Securities is required), Holders of a
majority in aggregate principal amount of the

                                      A-8
<PAGE>

outstanding Notes have the right to direct the time, method and place of
conducting certain proceedings, or exercising any trust or power conferred on
the Trustee.

12.      Trustee Dealings with the Company

         Subject to certain limitations imposed by the Trust Indenture Act, the
Trustee under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Notes and may otherwise deal with the Company with the
same rights it would have if it were not Trustee.

13.      Discharge Prior to Maturity.

                  The Indenture with respect to the Notes shall be discharged
and canceled upon the payment of all of the Notes and shall be discharged except
for certain obligations upon the irrevocable deposit with the Trustee of any
combination of funds and U.S. Government Obligations sufficient for such
payment.

14.      No Recourse Against Others.

                  A director, officer, employee, stockholder, partner or other
owner of the Company, any Subsidiary Guarantor or the Trustee, as such, shall
not have any liability for any obligations of the Company under the Notes, for
any obligations of any Subsidiary Guarantor under any Subsidiary Guarantee or
for any obligations of the Company, any Subsidiary Guarantor or the Trustee
under the Indenture or for any claim based on, in respect of or by reason of
such obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release shall be part of the
consideration for the issue of Notes.

15.      Transfer Restrictions.

                  By its acceptance of any Note bearing a legend restricting
transfer, each Holder of such Note acknowledges the restrictions on transfer of
such Note set forth in the Indenture and in such legend and agrees that it will
transfer such Note only as provided in the Indenture.

16.      Authentication

         This Note shall not be valid until an authorized officer of the Trustee
or any authenticating agent manually signs the Certificate of Authentication on
the other side of this Note.

17.      Abbreviations

         Customary abbreviations may be used in the name of a Holder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common), CUST (=custodian), and UNIF TRANS MIN ACT (=Uniform
Transfers to Minors Act).

18.      Governing Law

                                      A-9
<PAGE>

         THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THE LAWS OF THE
STATE OF NEW YORK REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

[19.     Registration Rights Agreement

         The Holder of this Note is entitled to the benefits of the Registration
Rights Agreement, dated [__________,_____], among the Company and the Initial
Purchasers.](+)

         The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture which has in it the text of this Note. Requests
may be made to:

                  Pride International, Inc.
                  5847 San Felipe, Suite 3300
                  Houston, Texas 77057
                  Attention: General Counsel

-------------
(+) On Transfer Restricted Securities only.

                                      A-10
<PAGE>

                                 TRANSFER NOTICE

This Transfer Notice relates to $______________________ principal amount of the
7 3/8% Senior Notes due 2014 of Pride International, Inc., a Delaware
corporation, held by ______________________________ (the "Transferor").

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

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

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

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

Your Signature: ________________________________________________________________
(Sign exactly as your name appears on the other side of this Note)

Date: __________________

Signature Guarantee:_________________________________________________
                        (Participant in a Recognized Signature
                             Guarantee Medallion Program)

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

CHECK ONE BOX BELOW

(1) [ ]  to Pride International, Inc.; or

(2) [ ]  to a "qualified institutional buyer" pursuant to and in compliance with
         Rule 144A under the Securities Act of 1933, as amended (the "Securities
         Act"), that is purchasing for its own account or for the account of a
         "qualified institutional buyer" to whom notice is given that the
         resale, pledge or other transfer is being made in reliance on Rule
         144A; or

(3) [ ]  outside the United States in an offshore transaction in accordance with
         Rule 904 under the Securities Act;

(4) [ ]  pursuant to an exemption from the registration requirements of the
         Securities Act provided by Rule 144 under the Securities Act; or

(5) [ ]  pursuant to an effective registration statement under the Securities
         Act.

                                      A-11
<PAGE>

         Unless one of the boxes is checked, the Trustee will refuse to register
         any of the Notes evidenced by this certificate in the name of any
         Person other than the registered holder thereof; provided, however,
         that unless box (5) is checked the Trustee may require, prior to
         registering any such transfer of the Notes such legal opinions (if box
         (4) is checked), certifications and other information as the Company or
         the Trustee has reasonably requested to confirm that such transfer is
         being made pursuant to an exemption from, or in a transaction not
         subject to, the registration requirements of the Securities Act, such
         as the exemption provided by Rule 144 under such Act.

         Unless the box below is checked, the undersigned confirms that such
         Note is not being transferred to an "affiliate" of the Company as
         defined in Rule 144 under the Securities Act (an "Affiliate"):

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

Signature: ___________________________________

Date: ______________

Signature Guarantee:_________________________________________________
                         (Participant in a Recognized Signature
                              Guarantee Medallion Program)

                                      A-12
<PAGE>

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

The undersigned (i) represents and warrants that it is purchasing this Note for
its own account or for 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, (ii) is aware that the sale to it is being made in reliance on Rule 144,
(iii) acknowledges that this Note has not been registered under the Securities
Act and may not be sold except in compliance with the legend on the face of this
Note and that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and (iv) is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.

Dated:_______________

______________________________________________
[Signature of executive officer of purchaser]
Name:___________________________________
Title: _________________________________

                                      A-13
<PAGE>

                       OPTION OF HOLDER TO ELECT PURCHASE
                             UPON CHANGE IN CONTROL

         If you want to elect to have this Note purchased by the Company
pursuant to Section 3.12 of the Indenture, check this box: [ ]

         If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 3.12 of the Indenture, state the principal amount
you elect to have purchased: $_____________________ (in multiples of $1,000)

         This Note (or the portion thereof specified above) shall be purchased
as of the Change in Control Purchase Date pursuant to the terms and conditions
specified in paragraph 6 of this Note and in the Indenture.

Date:_____________                        Your Signature: ______________________
                                 (Sign exactly as your name appears on the Note)

                                    Tax Identification No.:_____________________

Signature Guarantee:_________________________________________________
                           (Participant in a Recognized Signature
                                Guarantee Medallion Program)

                                      A-14
<PAGE>

                     [SCHEDULE OF EXCHANGES OF SECURITIES]*

The following exchanges of a part of this Global Security for other Notes have
been made:

<TABLE>
<CAPTION>
                                                                                     Signature of
                                                                Principal Amount      Authorized
                                                                     of this            Officer
                       Amount of              Amount of          Global Security     of Trustee or
                      Decrease in            Increase in            Following           Global
                  Principal Amount of    Principal Amount of      Such Decrease        Security
Date of Exchange  this Global Security  this Global Security      (or Increase)        Custodian
----------------  --------------------  --------------------      -------------        ---------
<S>               <C>                   <C>                     <C>                  <C>
</TABLE>

--------------
* On Global Securities only.

                                      A-15
<PAGE>

                                    EXHIBIT B

                         FORM OF SUPPLEMENTAL INDENTURE

         THIS SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as
of ___________________, among Pride International, Inc., a Delaware corporation
(the "Company"), ________________________ (the "Subsidiary Guarantor"), a direct
or indirect subsidiary of the Company, and JPMorgan Chase Bank, New York state
banking corporation, as trustee under the indenture referred to below (the
"Trustee"),

                              W I T N E S S E T H:

         WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Original Indenture"), dated as of July 1, 2004, as
supplemented by the First Supplemental Indenture dated as of July 7, 2004 [add
appropriate references to any further supplements] (the Original Indenture, as
so supplemented, being herein referred to as the "Indenture"), providing for the
issuance of the Company's 7 3/8% Senior Notes due 2014 (the "Notes");

         WHEREAS, Section 4.17 of the Indenture provides that under certain
circumstances the Company is required to cause the Subsidiary Guarantor to
execute and deliver to the Trustee a supplemental indenture pursuant to which
the Subsidiary Guarantor shall unconditionally guarantee all of the Company's
obligations under the Notes and the Indenture pursuant to a Subsidiary Guarantee
on the terms and conditions set forth herein; and

         WHEREAS, pursuant to Section 9.01 of the Indenture, the Company and the
Trustee are authorized to execute and deliver this Supplemental Indenture
without the consent of Holders;

         NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Company, the Subsidiary Guarantor and the Trustee mutually covenant and agree
for the equal and proportionate benefit of the respective Holders from time to
time of the Notes, as follows:

         1.       Definitions. (a) Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.

         (b)      For all purposes of this Supplemental Indenture, except as
otherwise herein expressly provided or unless the context otherwise requires:
(i) the terms and expressions used herein shall have the same meanings as
corresponding terms and expressions used in the Indenture; and (ii) the words
"herein," "hereof" and "hereby" and other words of similar import used in this
Supplemental Indenture refer to this Supplemental Indenture as a whole and not
to any particular section hereof.

         2.       Agreement to Guarantee. The Subsidiary Guarantor hereby
agrees, jointly and severally with any other Subsidiary Guarantors under the
Indenture, to guarantee the Company's obligations under the Notes on the terms
and subject to the conditions set forth in Article XI of the Indenture and to be
bound by all other applicable provisions of the Indenture. Except as expressly
amended hereby, the Indenture is in all respects ratified and confirmed and all
the

                                      B-1
<PAGE>

terms, conditions and provisions thereof shall remain in full force and effect.
This Supplemental Indenture shall form a part of the Indenture for all purposes,
and every Holder of Notes heretofore or hereafter authenticated and delivered
shall be bound hereby.

         3.       GOVERNING LAW. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK,
EXCEPT TO THE EXTENT THE LAWS OF THE STATE OF NEW YORK REQUIRE THE APPLICATION
OF THE LAWS OF ANOTHER JURISDICTION.

         4.       Trustee Makes No Representation. The recitals and statements
contained in this Supplemental Indenture shall be taken as the recitals and
statements of the Company and the Subsidiary Guarantor, and the Trustee assumes
no responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Supplemental
Indenture, except that the Trustee is duly authorized by all necessary corporate
actions to execute and deliver this Supplemental Indenture.

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

         6.       Effect of Headings. The Section headings herein are for
convenience only and shall not effect the construction thereof.

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

                                PRIDE INTERNATIONAL, INC.

                                By: ____________________________________________
                                    Name:
                                    Title:

                                [SUBSIDIARY GUARANTOR],

                                By: ____________________________________________
                                    Name:
                                    Title:

                                      B-2
<PAGE>

                                JPMORGAN CHASE BANK, as Trustee

                                By: ____________________________________________
                                    Name:
                                    Title:

                                      B-3
<PAGE>

                                    EXHIBIT C

                    CERTIFICATE TO BE DELIVERED UPON EXCHANGE
                    OR REGISTRATION OF TRANSFER OF SECURITIES
                           PURSUANT TO RULE 144A, ETC.

Re:      7 3/8% Senior Notes due 2014 of Pride International, Inc. (the
         "Issuer")

         This Certificate relates to $_____ principal amount of the above
captioned Notes held in definitive form (the "Securities") by
_____________________ (the "Transferor").

         The Transferor has requested the Trustee by written order to exchange
or register the transfer of a Security or Securities.

         In connection with such request and in respect of each such Security,
the Transferor does hereby certify that the Transferor is familiar with the
Indenture relative to the Securities and that the transfer of this Security does
not require registration under the Securities Act (as defined below) because:*

         [ ]      Such Security is being acquired for the Transferor's own
account without transfer.

         [ ]      Such Security is being transferred to a "qualified
institutional buyer" (as defined in Rule 144A under the Securities Act of 1933,
as amended (the "Securities Act")), in accordance with Rule 144A under the
Securities Act, that is purchasing for its own account or for the account of
another qualified institutional buyer, in each case to whom notice is given that
the transfer is being made in reliance on Rule 144A.

         [ ]      Such Security is being transferred in accordance with Rule 144
under the Securities Act (and based on an opinion of counsel if the Issuer or
the Trustee so requests).

         [ ]      Such Security is being transferred in reliance on and in
compliance with another exemption from the registration requirements of the
Securities Act (and based on an opinion of counsel if the Issuer so requests).

*Check appropriate response.

                                      [INSERT NAME OF TRANSFEROR]

                                      By: ______________________________________
                                          Name:
                                          Title:

                                          Address:

Date:____________________

                                      C-1
<PAGE>

                                    EXHIBIT D

                           CERTIFICATE TO BE DELIVERED
       IN CONNECTION WITH TRANSFERS OF SECURITIES PURSUANT TO REGULATION S

                                                                          [Date]

Pride International, Inc.
c/o JPMorgan Chase Bank, Trustee
4 New York Plaza , 15th Floor
New York, New York 10004
Attn: Institutional Trust Services

         Re:      Pride International, Inc. (the "Issuer") 7 3/8% Senior Notes
                  due 2014 (the "Securities")

Ladies and Gentlemen:

         In connection with our proposed transfer of $______ aggregate principal
amount of the Securities, we confirm that such transfer 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 offshore 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 904(a) of
         Regulation S; 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 distribution compliance period and the
provisions of Rule 904(b)(1) of Regulation S are applicable thereto, we confirm
that such sale has been made in accordance with the applicable provisions of
Rule 904(b)(1).

                                      D-1
<PAGE>

         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 Signatory

                                      D-2
<PAGE>

                                   APPENDIX A

                      FORM OF REGISTRATION RIGHTS AGREEMENT<PAGE>

                                                                     Exhibit 4.3

                            PRIDE INTERNATIONAL INC.

                    $500,000,000 7 3/8% Senior Notes due 2014

                          REGISTRATION RIGHTS AGREEMENT

                                                                    July 7, 2004

CITIGROUP GLOBAL MARKETS INC.
BANC OF AMERICA SECURITIES LLC
DEUTSCHE BANK SECURITIES INC.
NATEXIS BLEICHROEDER INC.
BNP PARIBAS SECURITIES CORP.
CALYON SECURITIES (USA) INC.
As Representatives of the Initial Purchasers

c/o CITIGROUP GLOBAL MARKETS INC.
388 Greenwich Street
New York, New York 10013

Ladies and Gentlemen:

                  Pride International, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to the several parties named in Schedule
I hereto (the "Initial Purchasers") for whom you are acting as representatives,
upon the terms set forth in a purchase agreement dated June 22, 2004 (the
"Purchase Agreement"), $500,000,000 aggregate principal amount of its 7 3/8%
Senior Notes due 2014 (the "Securities") relating to the initial placement of
the Securities (the Initial Placement"). To induce the Initial Purchasers to
enter into the Purchase Agreement and to satisfy a condition of your obligations
thereunder, the Company agrees with you for your benefit and the benefit of the
other holders from time to time of the Securities (including the Initial
Purchasers) or the New Securities, as follows:

                  1. Definitions. As used in this Agreement, the following
capitalized defined terms shall have the following meanings:

                  "Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.

                  "Affiliate" of any specified Person shall mean any other
Person that, directly or indirectly, is in control of, is controlled by, or is
under common control with, such specified Person. For purposes of this
definition, control of a Person shall mean the power, direct or indirect, to
direct or cause the direction of the management and policies of such Person
whether

<PAGE>

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

                  "Broker-Dealer" shall mean any broker or dealer registered as
such under the Exchange Act.

                  "Business Day" shall have the meaning specified therefor in
the Indenture.

                  "Commission" shall mean the United States Securities and
Exchange Commission.

                  "DTC" shall mean The Depository Trust Company.

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

                  "Exchange Offer Registration Period" shall mean the lesser of
(i) the 180-day period following the consummation of the Registered Exchange
Offer, exclusive of any period during which any stop order shall be in effect
suspending the effectiveness of the Exchange Offer Registration Statement, and
(ii) the period commencing on the consummation of the Registered Exchange Offer
and ending on the date on which all Exchanging Dealers, if any, have sold all
New Securities held by them.

                  "Exchange Offer Registration Statement" shall mean a
registration statement of the Company on an appropriate form under the Act with
respect to the Registered Exchange Offer, all amendments and supplements to such
registration statement, including post-effective amendments thereto, in each
case including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.

                  "Exchanging Dealer" shall mean any Holder (which may include
any Initial Purchaser) that is a Broker-Dealer and elects to exchange for New
Securities any Securities that it acquired for its own account as a result of
market-making activities or other trading activities (but not directly from the
Company or any of its Affiliates).

                  "Holder" shall mean (i) any holder of Securities (including
the Initial Purchasers), (ii) any holder of New Securities referred to in
Section 2(f) hereof that is also an Initial Purchaser and (iii) any Exchanging
Dealer during the Exchange Offer Registration Period that holds New Securities
covered by the Exchange Offer Registration Statement.

                  "Indenture" shall mean the Indenture, dated as of July 1,
2004, between the Company and JPMorgan Chase Bank, as trustee, as supplemented
by the First Supplemental Indenture dated as of the date hereof relating to the
Securities, and as the same may be amended from time to time in accordance with
the terms thereof.

                  "Initial Placement" shall have the meaning set forth in the
preamble hereto.

                  "Initial Purchasers" shall have the meaning set forth in the
preamble hereto.

                                     - 2 -
<PAGE>

                  "Issue Date" shall have the meaning specified in the
Indenture.

                  "Losses" shall have the meaning set forth in Section 7(d)
hereof.

                  "Majority Holders" shall mean the Holders of a majority of the
aggregate principal amount of Securities and New Securities registered under a
Registration Statement.

                  "Managing Underwriters" shall mean the investment banker or
investment bankers and manager or managers that shall administer an underwritten
offering.

                  "New Securities" shall mean debt securities of the Company
with terms identical in all material respects to the Securities (except that the
interest rate step-up provisions and the transfer restrictions under the Act
shall be eliminated for all such debt securities other than those referred to in
Section 2(f) hereof) and to be issued under the Indenture.

                  "Person" shall have the meaning specified in the Indenture.

                  "Prospectus" shall mean the prospectus included in any
Registration Statement (including, without limitation, a prospectus that
discloses information previously omitted from a prospectus filed as part of an
effective registration statement in reliance upon Rule 430A under the Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Securities or the New Securities covered
by such Registration Statement, and all amendments and supplements thereto and
all material incorporated by reference therein.

                  "Purchase Agreement" shall have the meaning set forth in the
preamble hereto.

                  "Registered Exchange Offer" shall mean the proposed offer of
the Company to issue and deliver to the Holders of the Securities that are not
prohibited by any law or policy of the Commission from participating in such
offer, in exchange for the Securities, a like aggregate principal amount of the
New Securities.

                  "Registration Default" shall have the meaning set forth in
Section 4 hereof.

                  "Registration Statement" shall mean any Exchange Offer
Registration Statement or Shelf Registration Statement.

                  "Second Notice" shall have the meaning set forth in Section
5(k) hereof.

                  "Securities" shall have the meaning set forth in the preamble
hereto.

                  "Shelf Filing Date" shall have the meaning set forth in
Section 3(b)(i) hereof.

                  "Shelf Registration" shall mean a registration effected
pursuant to Section 3 hereof.

                  "Shelf Registration Period" has the meaning set forth in
Section 3(b) hereof.

                                     - 3 -
<PAGE>

                  "Shelf Registration Statement" shall mean a "shelf"
registration statement of the Company pursuant to the provisions of Section 3
hereof which covers some or all of the Securities or New Securities, as
applicable, on an appropriate form under Rule 415 under the Act, or any similar
rule that may be adopted by the Commission, amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.

                  "Staff" shall mean the staff of the Commission.

                  "Suspension Notice" shall have the meaning set forth in
Section 5(k) hereof.

                  "Trust Indenture Act" shall mean the Trust Indenture Act of
1939, as amended, and the rules and regulations of the Commission promulgated
thereunder.

                  "Trustee" shall mean the trustee with respect to the
Securities and the New Securities under the Indenture.

                  "underwriter" shall mean any underwriter of Securities or New
Securities in connection with an offering thereof under a Shelf Registration
Statement.

                  2. Registered Exchange Offer. Except as set forth in Section
3, (a) the Company shall prepare and, not later than 90 days following the date
of the original issuance of the Securities (or if such 90th day is not a
Business Day, the next succeeding Business Day), shall file with the Commission
the Exchange Offer Registration Statement with respect to the Registered
Exchange Offer. The Company shall use its reasonable best efforts to cause the
Exchange Offer Registration Statement to become effective under the Act within
180 days of the date of the original issuance of the Securities (or if such
180th day is not a Business Day, the next succeeding Business Day).

                  (b)      Upon the effectiveness of the Exchange Offer
Registration Statement, the Company shall promptly commence the Registered
Exchange Offer, it being the objective of such Registered Exchange Offer to
enable each Holder electing to exchange Securities for New Securities (assuming
that such Holder makes the representations to the Company set forth in clauses
(i)-(vii) of Section 2(e) below) to trade such New Securities from and after
their receipt without any limitations or restrictions under the Act (subject to
the exceptions set forth in clauses (iii) and (v) of Section 2(e) in relation to
Holders that are Affiliates of the Company and Exchanging Dealers, respectively)
and without material restrictions under the securities laws of a substantial
proportion of the several states of the United States.

                  (c)      In connection with the Registered Exchange Offer, the
Company shall:

                           (i)      mail or otherwise distribute to each Holder
         a copy of the Prospectus forming part of the Exchange Offer
         Registration Statement, together with an appropriate letter of
         transmittal and related documents;

                           (ii)     keep the Registered Exchange Offer open for
         not less than 20 Business Days and use its reasonable best efforts to
         cause the Registered Exchange Offer

                                     - 4 -
<PAGE>

         to be completed within 45 days after the Commission declares the
         Exchange Offer Registration Statement effective (or, in each case,
         longer if required by applicable law);

                           (iii)    use its reasonable best efforts to keep the
         Exchange Offer Registration Statement continuously effective under the
         Act, supplemented and amended as required, under the Act until the
         consummation of the Registered Exchange Offer and thereafter during the
         Exchange Offer Registration Period to ensure that it is available for
         sales of New Securities by Exchanging Dealers;

                           (iv)     permit Holders to withdraw tendered
         Securities at any time prior to the close of the Registered Exchange
         Offer;

                           (v)      prior to effectiveness of the Exchange Offer
         Registration Statement, provide a supplemental letter to the Commission
         (A) stating that the Company is conducting the Registered Exchange
         Offer in reliance on the position of the Commission in Exxon Capital
         Holdings Corporation (pub. avail. May 13, 1988) and Morgan Stanley and
         Co., Inc. (pub. avail. June 5, 1991); and (B) including a
         representation that the Company has not entered into any arrangement or
         understanding with any Person to distribute the New Securities to be
         received in the Registered Exchange Offer and that, to the best of the
         Company's information and belief, each Holder participating in the
         Registered Exchange Offer is acquiring the New Securities in the
         ordinary course of business and has no arrangement or understanding
         with any Person to participate in the distribution of the New
         Securities; and

                           (vi)     comply in all material respects with all
         applicable laws relating to the Registered Exchange Offer.

                  (d)      As soon as practicable after the close of the
Registered Exchange Offer, the Company shall:

                           (i)      accept for exchange all Securities tendered
         and not validly withdrawn pursuant to the Registered Exchange Offer in
         accordance with the terms of the Registered Exchange Offer, the
         Exchange Offer Registration Statement and the letter of transmittal;
         and

                           (ii)     cause the Trustee promptly to authenticate a
         global certificate representing New Securities exchanged for Securities
         and cause the depositary for the Registered Exchange Offer to deliver,
         through the facilities of DTC, to each Holder of Securities a principal
         amount of New Securities equal to the principal amount of the
         Securities of such Holder so accepted for exchange.

                  (e)      Each Holder hereby acknowledges and agrees that any
Affiliate of the Company, any Broker-Dealer and any other Holder using the
Registered Exchange Offer to participate in a distribution of the New Securities
(x) could not under Commission policy as in effect on the date of this Agreement
rely on the position of the Commission in Morgan Stanley and Co., Inc. (pub.
avail. June 5, 1991) and Exxon Capital Holdings Corporation (pub. avail. May 13,
1988), as interpreted in the Commission's letter to Shearman & Sterling dated
July 2, 1993 and similar no-action letters; and (y) must comply with the
registration and prospectus

                                     - 5 -
<PAGE>

delivery requirements of the Act in connection with any secondary resale
transaction and must be covered by an effective registration statement
containing the selling security holder information required by Item 507 or 508,
as applicable, of Regulation S-K under the Act if the resales are of New
Securities obtained by such Holder in exchange for Securities acquired by such
Holder directly from the Company or one of its Affiliates. Accordingly, each
Holder participating in the Registered Exchange Offer shall be required to
represent to the Company that, at the time of the consummation of the Registered
Exchange Offer:

                           (i)      any New Securities received by such Holder
         will be acquired in the ordinary course of its business;

                           (ii)     such Holder has no arrangement or
         understanding with any Person to participate in the distribution of the
         Securities or the New Securities within the meaning of the Act;

                           (iii)    such Holder is not an Affiliate of the
         Company or, if it is an Affiliate of the Company, it will comply with
         the registration and prospectus delivery requirements of the Act to the
         extent applicable;

                           (iv)     if such Holder is not a Broker-Dealer, it is
         not engaged in, and does not intend to engage in, the distribution of
         the New Securities within the meaning of the Act;

                           (v)      if such Holder is an Exchanging Dealer, it
         will deliver a prospectus in connection with any resale of the New
         Securities;

                           (vi)     if such Holder is a Broker-Dealer, it did
         not purchase from the Company the Securities to be exchanged for New
         Securities in the Registered Exchange Offer; and

                           (vii)    such Holder is not acting on behalf of any
         Person who could not truthfully make the foregoing representations.

                  (f)      If any Initial Purchaser determines that it is not
eligible to participate in the Registered Exchange Offer with respect to the
exchange of Securities constituting any portion of an unsold allotment, at the
request of such Initial Purchaser made within 90 days after the consummation of
the Registered Exchange Offer, the Company shall issue and deliver to such
Initial Purchaser or the Person purchasing New Securities registered under a
Shelf Registration Statement as contemplated by Section 3 hereof from such
Initial Purchaser, in exchange for such Securities, a like principal amount of
New Securities. The Company shall request the CUSIP Service Bureau to issue the
same CUSIP number for such New Securities as for New Securities issued pursuant
to the Registered Exchange Offer.

                  (g)      If, following the date hereof there is announced a
change in Commission policy with respect to exchange offers such as the
Registered Exchange Offer, that in the reasonable opinion of counsel to the
Company raises a substantial question as to whether the Registered Exchange
Offer is permitted by applicable federal law, the Company hereby agrees to seek
a no-action letter or other favorable decision from the Commission allowing the
Company

                                     - 6 -
<PAGE>

to consummate the Registered Exchange Offer of Securities for New Securities,
unless the Company makes a good faith determination based on the advice of
counsel that such a request would be denied in light of publicly available
no-action letters, in which case the Company shall proceed to file a Shelf
Registration Statement pursuant to the provisions of Section 3 hereof.

                  3. Shelf Registration. (a) If (i) notwithstanding the efforts
contemplated in Section 2(g), due to any change in applicable law or
interpretations thereof by the Staff, the Company determines upon advice of its
outside counsel that it is not permitted to effect the Registered Exchange Offer
as contemplated by Section 2 hereof; (ii) for any other reason the Registered
Exchange Offer is not consummated within 225 days of the date hereof; (iii) any
Initial Purchaser so requests, within the 90-day period specified in Section
2(f) above, with respect to Securities that are not eligible to be exchanged for
New Securities in the Registered Exchange Offer and that are held by it
following consummation of the Registered Exchange Offer; (iv) any Holder (other
than an Initial Purchaser or an Affiliate of the Company) is not eligible to
participate in the Registered Exchange Offer because of any applicable laws or
interpretations thereof by the Staff; or (v) in the case of any Initial
Purchaser that participates in the Registered Exchange Offer or acquires New
Securities pursuant to Section 2(f) hereof, such Initial Purchaser does not
receive freely tradable New Securities in exchange for Securities constituting
any portion of an unsold allotment (it being understood that (x) the requirement
that an Initial Purchaser deliver a Prospectus containing the information
required by Item 507 or 508 of Regulation S-K under the Act in connection with
sales of New Securities acquired in exchange for such Securities shall result in
such New Securities being not "freely tradable" and (y) the requirement that an
Exchanging Dealer deliver a Prospectus in connection with sales of New
Securities acquired in the Registered Exchange Offer in exchange for Securities
acquired as a result of market-making activities or other trading activities
shall not result in such New Securities being not "freely tradable"), the
Company shall effect a Shelf Registration Statement in accordance with
subsection (b) below. In the case of clause (ii) of this Section 3(a), if the
Registered Exchange Offer is consummated, the Company may terminate any Shelf
Registration Statement then in effect, without penalty, at any time.

                           (b) (i) The Company shall use its reasonable best
         efforts to file a Shelf Registration Statement relating to the offer
         and sale of the Securities or the New Securities, as applicable, by the
         Holders thereof from time to time in accordance with the methods of
         distribution set forth in such Shelf Registration Statement with the
         Commission on or before the later of (A) 60 days after so required or
         requested pursuant to this Section 3, and (B) 90 days after the date
         hereof (or, if such 60th or 90th day, as applicable, is not a Business
         Day, the next succeeding Business Day), such later date being referred
         to herein as the "Self Filing Date;" and thereafter the Company shall
         use its reasonable best efforts to cause the Shelf Registration
         Statement to be declared effective under the Act on or before 90 days
         after the Shelf Filing Date (or, if such 90th day is not a Business
         Day, the next succeeding Business Day; provided, however, that no
         Holder (other than an Initial Purchaser) shall be entitled to have the
         Securities held by it covered by such Shelf Registration Statement
         unless such Holder agrees in writing to be bound by all of the
         provisions of this Agreement applicable to such Holder; and provided
         further, that with respect to New Securities received by an Initial
         Purchaser in exchange for Securities constituting any portion of an
         unsold allotment, the Company may, if permitted by current
         interpretations by the Staff, file a post-effective amendment to the

                                     - 7 -
<PAGE>

         Exchange Offer Registration Statement containing the information
         required by Item 507 or 508 of Regulation S-K, as applicable, in
         satisfaction of its obligations under this subsection with respect
         thereto, and any such Exchange Offer Registration Statement, as so
         amended, shall be referred to herein as, and governed by the provisions
         herein applicable to, a Shelf Registration Statement.

                           (ii)      The Company shall use its reasonable best
         efforts to keep the Shelf Registration Statement continuously
         effective, supplemented and amended as required by the Act, in order to
         permit the Prospectus forming part thereof to be usable by Holders for
         a period of two years from the date the Shelf Registration Statement is
         declared effective by the Commission or such shorter period that will
         terminate when all the Securities or New Securities, as applicable,
         covered by the Shelf Registration Statement have been sold pursuant to
         the Shelf Registration Statement or may be sold pursuant to Rule 144(k)
         under the Act (in any such case, such period being called the "Shelf
         Registration Period"). The Company shall be deemed not to have used its
         reasonable best efforts to keep the Shelf Registration Statement
         effective during the requisite period if the Company voluntarily takes
         any action that would result in Holders of securities covered thereby
         not being able to offer and sell such securities during that period,
         unless (A) such action is required by applicable law or (B) such action
         is taken by the Company in good faith and for valid business reasons
         (not including avoidance of the Company's obligations hereunder),
         including the acquisition or divestiture of assets or other material
         corporate transaction or event, so long as the Company complies with
         the requirements of Section 5(k) hereof, if applicable.

                           (iii)     The Company shall cause the Shelf
         Registration Statement and the related Prospectus and any amendment or
         supplement thereto, as of the effective date of the Shelf Registration
         Statement or such amendment or supplement, (A) to comply in all
         material respects with the applicable requirements of the Act and the
         rules and regulations of the Commission and (B) not to contain any
         untrue statement of a material fact or omit to state a material fact
         required to be stated therein or necessary in order to make the
         statements therein, in the light of the circumstances under which they
         were made, not misleading.

                  4. Additional Interest.

                  (a)      In the event that (i) the Company has not filed the
Exchange Offer Registration Statement or the Shelf Registration Statement with
the Commission on or before the date on which such Registration Statement is
required to be so filed pursuant to Section 2(a) and Section 3(b), respectively,
or (ii) such Exchange Offer Registration Statement or Shelf Registration
Statement has not been declared effective by the Commission under the Act on or
before the date on which such Registration Statement is required to be declared
effective under the Act pursuant to Section 2(a) or Section 3(b), respectively,
or (iii) the Registered Exchange Offer has not been consummated on or prior to
the date for completion specified in Sections 2(a) and 2(c)(ii), or (iv) the
Exchange Offer Registration Statement or Shelf Registration Statement required
by Section 2(a) or Section 3(b) hereof is filed and declared effective by the
Commission under the Act but shall thereafter cease to be effective or usable
(except as specifically permitted herein) without being succeeded immediately by
an additional Registration Statement filed and

                                     - 8 -
<PAGE>
declared effective by the Commission under the Act (each such event referred to
in clauses (i) through (iv) is referred to herein as a "Registration Default"),
then the Company shall pay additional interest ("Additional Interest") on the
affected Securities or New Securities that will accrue and be payable
semiannually on such Securities or New Securities (in addition to the stated
interest on such Securities or New Securities) from and including the date such
Registration Default occurs to, but excluding, the date on which all
Registration Defaults are cured (at which time the interest rate will be reduced
to its initial rate). During the time that Additional Interest is accruing, the
rate of Additional Interest shall be 0.25% per annum during the first 90-day
period, and will increase by 0.25% per annum for each subsequent 90-day period
during which any such Registration Default continues; provided, however, the
rate of Additional Interest shall not exceed 1.00% per annum in the aggregate
regardless of the number of Registration Defaults and that the Company shall not
be required to pay Additional Interest with respect to more than one
Registration Default at a time. In addition, a Holder shall not be entitled to
receive any Additional Interest on its Securities if such Holder was, at the
time of the consummation of the Registered Exchange Offer, eligible to
participate therein but failed to tender such Securities for exchange in
accordance with the terms of the Registered Exchange Offer. Additional Interest
shall not accrue if the Company has filed the Exchange Offer Registration
Statement with the Commission on or before the date on which such Registration
Statement is required to be so filed pursuant to Section 2(a) but is unable to
complete the Registered Exchange Offer because of a change in applicable law and
the Company then proceeds to file the Shelf Registration Statement with the
Commission on or before the date on which such Registration Statement is
required to be filed pursuant to Section 3(b) and the Shelf Registration
Statement is declared by the Commission under the Act on or before the date
which such Registration Statement is required to be declared effective under the
Act pursuant to Section 3(b). If, after the cure of all Registration Defaults
then in effect, there is a subsequent Registration Default, the rate of
Additional Interest that shall initially be in effect upon the occurrence of
such subsequent Registration Default shall be 0.25% per annum during the first
90-day period following the occurrence of such Registration Default, regardless
of the rate of Additional Interest in effect at the time of any prior
Registration Default at the time of the cure of any such prior Registration
Default. All Additional Interest shall be calculated on the basis of a 360-day
year consisting of twelve 30-day months and shall be payable on the same
semiannual dates as other interest is payable on the Securities.

                  (b)      Without limiting the remedies available to the
Initial Purchasers and the Holders, the Company acknowledges that any failure by
the Company to comply with its obligations under Section 2(a) and Section 3(b)
hereof may result in material irreparable injury to the Initial Purchasers or
the Holders for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of any such failure, the Initial Purchasers or any Holder may obtain such relief
as may be required to specifically enforce the Company's obligations under
Section 2(a) and Section 3(b) hereof.

                  5. Additional Registration Procedures. In connection with any
Shelf Registration Statement and, to the extent applicable, any Exchange Offer
Registration Statement, the following provisions shall apply.

                                     - 9 -
<PAGE>

                  (a)      The Company shall:

                           (i)      furnish to you, not less than five Business
         Days prior to the filing thereof with the Commission or such shorter
         period as may be reasonable in the circumstances, a copy of any
         Exchange Offer Registration Statement and any Shelf Registration
         Statement, and each amendment thereof and each amendment or supplement,
         if any, to the Prospectus included therein (including all documents
         incorporated by reference therein after the initial filing other than
         documents filed with the Commission pursuant to Sections 13(a), 13(c),
         14 or 15(d) of the Exchange Act that are deemed incorporated by
         reference in such Registration Statement or Prospectus) and shall use
         its reasonable best efforts to reflect in each such document, when so
         filed with the Commission, such comments as you reasonably propose;

                           (ii)     include the substance of the information set
         forth in Annex A hereto in the forepart of such Prospectus in a section
         setting forth details of the Exchange Offer, in Annex B hereto in the
         underwriting or plan of distribution section of such Prospectus, and in
         Annex C hereto in the letter of transmittal used in connection with the
         Registered Exchange Offer;

                           (iii)    if requested by an Initial Purchaser,
         include the information required by Item 507 or 508 of Regulation S-K,
         as applicable, in the Prospectus contained in the Registration
         Statement; and

                           (iv)     in the case of a Shelf Registration
         Statement, include the names of the Holders that propose to sell
         Securities pursuant to the Shelf Registration Statement as selling
         security holders.

                  (b)      The Company shall ensure that:

                           (i)      any Registration Statement and any amendment
         thereto and any Prospectus forming part thereof and any amendment or
         supplement thereto comply in all material respects with the Act and the
         rules and regulations thereunder; and

                           (ii)     any Registration Statement and any amendment
         thereto do not, when they become effective, contain an untrue statement
         of a material fact or omit to state a material fact required to be
         stated therein or necessary to make the statements therein not
         misleading.

                  (c)      The Company shall advise you, the Holders of
securities covered by any Shelf Registration Statement and any Exchanging Dealer
under any Exchange Offer Registration Statement that has provided in writing to
the Company a telephone or facsimile number and address for notices, and, if
requested in writing by you or any such Holder or Exchanging Dealer, shall
confirm such advice in writing (which notice pursuant to clauses (ii)-(vi)
hereof shall be accompanied by an instruction to suspend the use of the
Prospectus until the Company shall have remedied the basis for such suspension):

                                     - 10 -
<PAGE>

                           (i)      when a Registration Statement and any
         amendment thereto have been filed with the Commission and when the
         Registration Statement or any post-effective amendment thereto has
         become effective;

                           (ii)     of any request by the Commission for any
         amendment or supplement to the Registration Statement or the Prospectus
         or for additional information, in each case after the Registration
         Statement has become effective;

                           (iii)    of the issuance by the Commission of any
         stop order suspending the effectiveness of the Registration Statement
         or the initiation of any proceedings for that purpose;

                           (iv)     of the receipt by the Company of any
         notification with respect to the suspension of the qualification of the
         securities included therein for sale in any jurisdiction or the
         initiation of any proceeding for such purpose;

                           (v)      of the happening of any event that requires
         any change in the Registration Statement or the Prospectus so that, as
         of such date, the statements therein are not misleading and do not omit
         to state a material fact required to be stated therein or necessary to
         make the statements therein (in the case of the Prospectus, in the
         light of the circumstances under which they were made) not misleading;
         and

                           (vi)     of the determination by the Company to
         suspend the availability of the Registration Statement or the use of
         the Prospectus for resales of securities covered thereby because (1)
         such action is required by applicable law or (B) such action is taken
         by the Company in good faith and for valid business reasons (not
         including avoidance of the Company's obligations hereunder), including
         the acquisition or divestiture of assets or other material corporate
         transaction or event, which notice need not state the reasons therefor.

                  (d)      The Company shall use its reasonable best efforts to
obtain the withdrawal of any order suspending the effectiveness of any
Registration Statement or the qualification of the securities therein for sale
in any state of the United States at the earliest possible time.

                  (e)      The Company shall furnish to each Holder of
securities covered by any Shelf Registration Statement, without charge, at least
one copy of such Shelf Registration Statement and any post-effective amendment
thereto, and, if the Holder so requests in writing, all material incorporated
therein by reference and all exhibits thereto (including exhibits incorporated
by reference therein).

                  (f)      The Company shall, during the Shelf Registration
Period, deliver to each Holder of securities covered by any Shelf Registration
Statement, without charge, as many copies of the Prospectus (including each
preliminary Prospectus) included in such Shelf Registration Statement and any
amendment or supplement thereto as such Holder may reasonably request. The
Company consents, subject to the provisions hereof, to the use during the Shelf
Registration Period of the Prospectus or any amendment or supplement thereto by
each of the selling Holders in connection with the offering and sale of the
securities covered by the

                                     - 11 -
<PAGE>

Prospectus, or any amendment or supplement thereto, included in the Shelf
Registration Statement.

                  (g)      The Company shall furnish to each Exchanging Dealer
which so requests, without charge, at least one copy of the Exchange Offer
Registration Statement and any post-effective amendment thereto, and, if the
Exchanging Dealer so requests in writing, all material incorporated by reference
therein and all exhibits thereto (including exhibits incorporated by reference
therein).

                  (h)      The Company shall promptly deliver to each Initial
Purchaser, each Exchanging Dealer and each other Person required to deliver a
Prospectus during the Exchange Offer Registration Period, without charge, as
many copies of the Prospectus included in such Exchange Offer Registration
Statement and any amendment or supplement thereto as any such Person may
reasonably request. The Company consents, subject to the provisions hereof, to
the use during the Exchange Offer Registration Period of the Prospectus or any
amendment or supplement thereto by any Initial Purchaser, any Exchanging Dealer
and any such other Person that may be required to deliver a Prospectus following
the Registered Exchange Offer in connection with the offering and sale of the
New Securities covered by the Prospectus, or any amendment or supplement
thereto, included in the Exchange Offer Registration Statement.

                  (i)      Prior to the Registered Exchange Offer or any other
offering of Securities or New Securities pursuant to any Registration Statement,
the Company shall arrange, if necessary, for the qualification of the Securities
or the New Securities for sale under the laws of such states of the United
States as any Holder shall reasonably request and will maintain such
qualification in effect so long as required; provided that in no event shall the
Company be obligated to qualify to do business in any jurisdiction where it is
not then so qualified or to take any action that would subject it to the
imposition of any tax or to service of process in suits, other than those
arising out of the Initial Placement, the Registered Exchange Offer or any
offering pursuant to a Shelf Registration Statement, in any such jurisdiction
where it is not then so subject.

                  (j)      If any of the Securities or New Securities are not
issued in global form, then the Company shall cooperate with the Holders to
facilitate the timely preparation and delivery of certificates representing
Securities or New Securities to be issued or sold pursuant to any Registration
Statement free of any restrictive legends and in such denominations and
registered in such names as Holders may request.

                  (k)      Upon the occurrence of any event contemplated by
subsections (c)(ii) through (v) above during the period for which the Company is
required to maintain an effective Registration Statement, the Company shall
promptly prepare a post-effective amendment to the applicable Registration
Statement or an amendment or supplement to the related Prospectus or file any
other required document so that, as thereafter delivered to initial purchasers
of the securities included therein, the Prospectus will not include an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. If the Company notifies the Initial Purchasers, the
Holders of the securities covered by the Shelf Registration Statement and any
known Exchanging Dealer in accordance with subsections (ii) through (vi) of
Section 5(c) above

                                     - 12 -
<PAGE>

(a "Suspension Notice") to suspend the use of the Prospectus until the requisite
changes to the Prospectus have been made or until the Company has delivered
written notice to the Initial Purchasers, such Holders and such Exchanging
Dealers that such Registration Statement is once again effective or available or
that no supplement or amendment is required (the "Second Notice"), then the
Initial Purchasers, such Holders and any such Exchanging Dealers shall suspend
use of such Prospectus. In such circumstances, the period of effectiveness of
the Exchange Offer Registration Statement provided for in Section 2 and the
Shelf Registration Statement provided for in Section 3(b) shall each be extended
by the number of days from and including the date of the giving of a Suspension
Notice to and including the date when the Initial Purchasers, such Holders and
any known Exchanging Dealer shall have received such amended or supplemented
Prospectus or Second Notice pursuant to this Section 5(k).

                  (l)      Not later than the effective date of any Registration
Statement, the Company shall obtain a CUSIP number for the New Securities.

                  (m)      The Company shall comply in all material respects
with all rules and regulations of the Commission applicable to the Registered
Exchange Offer or the Shelf Registration Statement and shall make generally
available to its security holders as soon as practicable after the effective
date of the applicable Registration Statement an earnings statement satisfying
the provisions of Section 11(a) of the Act.

                  (n)      The Company shall cause the Indenture to be qualified
under the Trust Indenture Act in a timely manner.

                  (o)      The Company may require each Holder of securities to
be sold pursuant to any Shelf Registration Statement to furnish to the Company
such information regarding the Holder and the distribution of such securities as
the Company may from time to time reasonably require for inclusion in such
Registration Statement. The Company may exclude from such Shelf Registration
Statement the securities of any Holder that unreasonably fails to furnish such
information within 20 day after receiving such request.

                  (p)      In the case of any Shelf Registration Statement, the
Company shall enter into such agreements as are customary (including
underwriting agreements in customary form, if requested) and take all other
appropriate actions as the Managing Underwriters, if any, or (in the absence of
an underwritten offering) the Majority Holders may reasonably request in order
to expedite or facilitate the registration or the disposition of the securities
covered by such Shelf Registration Statement, and in connection therewith, if an
underwriting agreement is entered into, cause the same to contain
indemnification provisions and procedures no less favorable to the underwriters
and the Holders participating therein than those set forth in Section 7 (or such
other provisions and procedures reasonably requested by the Managing
Underwriters, if any, or the Majority Holders with respect to all parties to be
indemnified pursuant to Section 7).

                  (q)      In the case of any Shelf Registration Statement, the
Company shall:

                           (i)      make reasonably available for inspection by
         the Holders of securities to be registered thereunder, any underwriter
         participating in any disposition pursuant to such Registration
         Statement, and any attorney, accountant or other agent

                                     - 13 -
<PAGE>

         retained by the Holders or any such underwriter all relevant financial
         and other records, pertinent organizational documents and properties of
         the Company and its subsidiaries;

                           (ii)     cause the Company's officers, directors and
         employees to supply all relevant information reasonably requested by
         the Holders or any such underwriter, attorney, accountant or agent in
         connection with any such Registration Statement as is customary for
         similar due diligence examinations; provided, however, that any
         information that is designated in writing by the Company, in good
         faith, as confidential at the time of delivery of such information
         shall be kept confidential by the Holders or any such underwriter,
         attorney, accountant or agent, unless such disclosure is made pursuant
         to a subpoena or other order from a court of competent jurisdiction
         (provided that prior notice shall be provided as soon as practicable to
         the Company of the potential disclosure to permit the Company to obtain
         a protective order) or is otherwise required by law, or such
         information becomes available to the public generally (other than
         through the acts of such Holders or any such underwriter, attorney,
         accountant or agent) or through a third party without an accompanying
         obligation of confidentiality;

                           (iii)    make such representations and warranties to
         the underwriters, if any, in form, substance and scope as are
         customarily made by the Company to underwriters in primary underwritten
         offerings of its nonconvertible debt securities (including the
         Securities) and covering matters including, but not limited to, those
         set forth in the Purchase Agreement;

                           (iv)     obtain opinions of 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) addressed to the underwriters, if any, covering
         such matters as are customarily covered in opinions requested in
         primary underwritten offerings of nonconvertible debt securities of the
         Company and such other matters as may be reasonably requested by such
         underwriters (it being agreed that the matters to be covered by such
         opinions may be subject to customary qualifications and exceptions);

                           (v)      obtain "cold comfort" letters and updates
         thereof 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 the underwriters, if any, in customary form
         and covering matters of the type customarily covered in "cold comfort"
         letters in connection with primary underwritten offerings of
         nonconvertible debt securities of the Company (including the
         Securities); and

                           (vi)     deliver such documents and certificates as
         may be reasonably requested by the Managing Underwriters, if any,
         including those to evidence compliance with Section 5(k) and with any
         customary conditions contained in the underwriting agreement or other
         agreement entered into by the Company.

                                     - 14 -
<PAGE>

The actions set forth in clauses (iii), (iv), (v) and (vi) of this Section shall
be performed at each closing under any underwriting or similar agreement entered
into in accordance with Section 8 hereof as and to the extent required
thereunder.

                  (r)      In the case of any Exchange Offer Registration
Statement, the Company shall:

                           (i)      make reasonably available for inspection by
         the Initial Purchasers, and one firm of attorneys and one firm of
         accountants retained by the Initial Purchasers, all relevant financial
         and other records, pertinent organizational documents and properties of
         the Company and their respective subsidiaries; and

                           (ii)     cause the Company's officers, directors and
         employees to supply all relevant information reasonably requested by
         the Initial Purchasers or any such firm in connection with any such
         Registration Statement as is customary for similar due diligence
         examinations; provided, however, that any information that is
         designated in writing by the Company, in good faith, as confidential at
         the time of delivery of such information shall be kept confidential by
         the Initial Purchasers or any such firm, unless such disclosure is made
         pursuant to a subpoena or other order from a court of competent
         jurisdiction (provided that prior notice shall be provided as soon as
         practicable to the Company of the potential disclosure to permit the
         Company to obtain a protective order) or is otherwise required by law,
         or such information becomes available to the public generally (other
         than through the acts of an Initial Purchaser or any such firm) or
         through a third party without an accompanying obligation of
         confidentiality.

                  (s)      If a Registered Exchange Offer is to be consummated
upon delivery of the Securities by Holders to the Company (or to such other
Person as directed by the Company) in exchange for the New Securities, the
Company shall mark, or cause to be marked, on the Securities so exchanged that
such Securities are being canceled in exchange for the New Securities. In no
event shall the Securities be marked paid or otherwise satisfied. Interest on
each New Security will accrue from the latest interest payment date on which
interest was paid on the Security exchanged for such New Security or, if no
interest has been paid, from the Issue Date.

                  (t)      The Company will use its reasonable best efforts, if
the Securities were not previously rated, to cause the securities covered by a
Registration Statement to be rated with at least one nationally recognized
statistical rating agency, if so requested by Majority Holders with respect to
the related Registration Statement or by any Managing Underwriters.

                  (u)      In the event that any Broker-Dealer shall underwrite
any Securities or New Securities covered by a Self Registration Statement or
participate as a member of an underwriting syndicate or selling group or "assist
in the distribution" (within the meaning of the Conduct Rules and the By-Laws of
the National Association of Securities Dealers, Inc.) thereof, whether as a
Holder of such securities or as an underwriter, a placement or sales agent or a
broker or dealer in respect thereof, or otherwise, the Company shall use its
reasonable best efforts to assist such Broker-Dealer in complying with the
requirements of such Rules and By-Laws, including, without limitation, by:

                                     - 15 -
<PAGE>

                           (i)      if such Rules or By-Laws shall so require,
         engaging a "qualified independent underwriter" (as defined in such
         Rules) to participate in the preparation of the Registration Statement,
         to exercise usual standards of due diligence with respect thereto and,
         if any portion of the offering contemplated by such Registration
         Statement is an underwritten offering or is made through a placement or
         sales agent, to recommend the yield of such Securities;

                           (ii)     indemnifying any such qualified independent
         underwriter to the extent of the indemnification of underwriters
         provided in Section 7 hereof; and

                           (iii)    providing such information to such
         Broker-Dealer as may be required in order for such Broker-Dealer to
         comply with the requirements of such Rules.

                  6. Registration Expenses. The Company shall bear all expenses
incurred in connection with the performance of its obligations under Sections 2,
3 and 5 hereof and, in the event of any Shelf Registration Statement, will
reimburse the Holders for the reasonable fees and disbursements of one firm or
attorney designated by the Majority Holders to act as counsel for the Holders in
connection therewith.

                  7. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Holder of Securities or New Securities, as the
case may be, covered by any Registration Statement (including each Initial
Purchaser and, with respect to any Prospectus delivery as contemplated in
Section 5(h) hereof, each Exchanging Dealer), the directors, officers, employees
and agents of each such Holder and each Person who controls any such Holder
within the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement as originally filed or in
any amendment thereof, or in any preliminary Prospectus or the Prospectus, or in
any amendment thereof or supplement thereto, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein (in the case of the
Prospectus, in the light of the circumstances in which they were made) not
misleading, and agrees to reimburse each such indemnified party, as incurred,
for any legal or other expenses reasonably incurred by it in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that (i) the Company will not be liable in any case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any such Holder
specifically for inclusion therein and (ii) with respect to any untrue statement
or omission or alleged untrue statement or omission made in any preliminary
Prospectus relating to a Shelf Registration Statement, the indemnity agreement
contained in this subsection (a) shall not inure to the benefit of any
Exchanging Dealer or other Holder from whom the Person asserting any such
losses, claims, damages or liabilities purchased the securities concerned, to
the extent that a prospectus relating to such securities was required to be
delivered by such Holder under the Act in connection with such purchase and any
such loss, claim, damage or liability of such Holder

                                     - 16 -
<PAGE>

results from the fact that there was not sent or given to such Person, at or
prior to the written confirmation of the sale of such securities to such Person,
a copy of the final Prospectus if the Company had previously furnished copies
thereof to such Holder. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.

                  The Company also agrees to indemnify or contribute as provided
in Section 7(d) to Losses of any underwriter of Securities or New Securities, as
the case may be, registered under a Shelf Registration Statement, its directors,
officers, employees or agents and each Person who controls such underwriter on
substantially the same basis as that of the indemnification of the Initial
Purchasers and the selling Holders provided in this Section 7(a) and shall, if
requested by any Holder, enter into an underwriting agreement reflecting such
agreement, as provided in Section 5(p) hereof.

                  (b)      Each Holder of securities covered by a Registration
Statement (including each Initial Purchaser and, with respect to any Prospectus
delivery as contemplated in Section 5(h) hereof, each Exchanging Dealer)
severally agrees to indemnify and hold harmless the Company, each of the
directors of the Company, each of the officers of the Company who signs such
Registration Statement and each Person who controls the Company within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each such Holder, but only with
reference to written information relating to such Holder furnished to the
Company by or on behalf of such Holder specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability which any such Holder may otherwise have.

                  (c)      Promptly after receipt by an indemnified party under
this Section 7 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Section, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under subsection (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in subsection (a) or (b) above. The indemnifying party shall be
entitled to appoint counsel (including local counsel) of the indemnifying
party's choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for the fees and expenses
of any separate counsel, other than local counsel if not appointed by the
indemnifying party, retained by the indemnified party or parties except as set
forth below); provided, however, that such counsel shall be reasonably
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel (including local counsel) to represent the
indemnified party in an action, the indemnified party shall have the right to
employ separate counsel (including local counsel), and the indemnifying party
shall bear the reasonable fees, costs and expenses of such separate counsel if
(i) the use of counsel chosen by the indemnifying party to represent the
indemnified party would present such counsel with a conflict of interest; (ii)
the actual or potential defendants in, or targets of, any such action include
both the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be legal defenses available to it
which are different from or additional

                                     - 17 -
<PAGE>

to those available to the indemnifying party; (iii) the indemnifying party shall
not have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of the
institution of such action; or (iv) the indemnifying party shall authorize the
indemnified party to employ separate counsel at the expense of the indemnifying
party; provided, however, that it is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees, costs and expenses of more than one separate firm (in
addition to any local counsel) for all such indemnified parties. An indemnifying
party will not, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.

                  (d)      In the event that the indemnity provided in
subsection (a) or (b) of this Section 7 is unavailable to or insufficient to
hold harmless an indemnified party for any reason, then each applicable
indemnifying party shall have a joint and several obligation to contribute to
the aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending same)
(collectively "Losses") to which such indemnified party may be subject in such
proportion as is appropriate to reflect the relative benefits received by such
indemnifying party, on the one hand, and such indemnified party, on the other
hand, from the Initial Placement and the Registration Statement which resulted
in such Losses; provided, however, that in no case shall any Initial Purchaser
or any subsequent Holder of any Security or New Security be responsible, in the
aggregate, for any amount in excess of the purchase discount or commission
applicable to such Security, or in the case of a New Security, applicable to the
Security that was exchangeable for such New Security, as set forth on the cover
page of the Final Memorandum, nor shall any underwriter be responsible for any
amount in excess of the underwriting discount or commission applicable to the
securities purchased by such underwriter under the Registration Statement which
resulted in such Losses. If the allocation provided by the immediately preceding
sentence is unavailable for any reason, each applicable indemnifying party and
indemnified party shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of such
indemnifying party, on the one hand, and such indemnified party, on the other
hand, in connection with the statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations. Benefits received
by the Company shall be deemed to be equal to the total net proceeds from the
Initial Placement (before deducting expenses) as determined from the Purchase
Agreement. Benefits received by the Initial Purchasers shall be deemed to be
equal to the total purchase discounts and commissions as determined from the
Purchase Agreement, and benefits received by any other Holders shall be deemed
to be equal to the value of receiving Securities or New Securities, as
applicable, registered under the Act. Benefits received by any underwriter shall
be deemed to be equal to the total underwriting discounts and commissions, as
set forth on the cover page of the Prospectus forming a part of the Registration
Statement which resulted in such Losses. Relative fault shall be determined by
reference to, among other things, whether any untrue or alleged untrue statement
of material fact or omission or alleged omission to state a material fact
relates to information provided by the indemnifying party, on the one hand, or
by the indemnified party, on the other hand, the intent of

                                     - 18 -
<PAGE>

the parties and their relative knowledge, access to information and opportunity
to correct or prevent such statement or omission and any other equitable
consideration appropriate under the circumstances. The parties agree that it
would not be just and equitable if contribution were determined by pro rata
allocation (even if the Holders were treated as one entity for such purpose) or
any other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
subsection (d), no Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 7, each Person who controls a Holder within the meaning of either
the Act or the Exchange Act and each director, officer, employee and agent of
such Holder shall have the same rights to contribution as such Holder, and each
Person who controls the Company within the meaning of either the Act or the
Exchange Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to the applicable terms and
conditions of this subsection (d).

                  (e)      The provisions of this Section 7 will remain in full
force and effect, regardless of any investigation made by or on behalf of any
Holder or the Company or any of the officers, directors or controlling Persons
referred to in this Section 7, and will survive the sale by a Holder of
securities covered by a Registration Statement.

                  8. Underwritten Registrations. (a) If any of the Securities or
New Securities, as the case may be, covered by any Shelf Registration Statement
are to be sold in an underwritten offering, the Managing Underwriters shall be
selected by the Majority Holders; provided, however, such Managing Underwriters
shall be reasonably acceptable to the Company.

                  (b)      No Person may participate in any underwritten
offering pursuant to any Shelf Registration Statement, unless such Person (i)
agrees to sell such Person's Securities or New Securities, as the case may be,
on the basis reasonably provided in any underwriting arrangements approved by
the Persons entitled hereunder to approve such arrangements; and (ii) completes
and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements.

                  (c)      Notwithstanding anything to the contrary herein, the
Company shall not be required to effect, or enter into any agreement with
respect to, any underwritten offering of less than $100,000,000 aggregate
principal amount of securities; provided, however, that the limitations of this
Section 8(c) shall not apply, following the consummation of the Registered
Exchange Offer, to any securities registered for sale for the account of any
Initial Purchaser pursuant to a Shelf Registration.

                  9. No Inconsistent Agreements. The Company has not, as of the
date hereof, entered into, nor shall it, on or after the date hereof, enter
into, any agreement with respect to its securities that is inconsistent with the
rights granted to the Holders herein or otherwise conflicts with the provisions
hereof.

                                     - 19 -
<PAGE>

                  10. Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the written
consent of the Holders of a majority of the aggregate principal amount of all
Securities and New Securities then outstanding and affected thereby; provided
that, with respect to any matter that directly or indirectly affects the rights
of any Initial Purchaser hereunder, the Company shall obtain the written consent
of each such Initial Purchaser against which such amendment, qualification,
supplement, waiver or consent is to be effective. Notwithstanding the foregoing
(except the foregoing proviso), a waiver or consent to departure from the
provisions hereof with respect to a matter that relates exclusively to the
rights of Holders whose Securities or New Securities, as the case may be, are
being sold pursuant to a Registration Statement and that does not directly or
indirectly affect the rights of other Holders may be given by the Majority
Holders, determined on the basis of Securities or New Securities, as the case
may be, being sold rather than registered under such Registration Statement.
Notwithstanding the foregoing sentence, (i) this Agreement may be amended,
without the consent of any Holder, by written agreement signed by the Company
and the Initial Purchasers, to cure any ambiguity, correct or supplement any
provision of this Agreement that may be inconsistent with any other provision of
the Agreement or to make any other provisions with respect to matters or
questions arising under this Agreement which shall not be inconsistent with
other provisions of this Agreement, (ii) this Agreement may be amended, modified
or supplemented, and waivers and consents to departures from the provisions
hereof may be given, by written agreement signed by the Company and the Initial
Purchasers to the extent that any such amendment, modification, supplement,
waiver or consent is, in their reasonable judgment, necessary or appropriate to
comply with applicable laws and regulations (including any interpretation of the
Staff) or any changes therein and (iii) to the extent any provision of this
Agreement relates to an Initial Purchaser, such provision may be amended,
modified or supplemented, and waivers or consents to departures from such
provisions may be given, by written agreement signed by such Initial Purchaser
and the Company.

                  11. Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, first-class
mail, telecopier, electronic mail or air courier guaranteeing overnight
delivery:

                  (a)      if to a Holder, at the most current address given by
such Holder to the Company in accordance with the provisions of this Section,
which address initially is, with respect to each Holder, the address of such
Holder maintained by the Registrar under the Indenture, with a copy in like
manner to Citigroup Global Markets Inc. at the address indicated in Section 12
of the Purchase Agreement;

                  (b)      if to you, initially in care of Citigroup Global
Markets Inc. at the address set forth on the first page of this Agreement; and

                  (c)      if to the Company, initially at the address set forth
in the Purchase Agreement.

                  All such notices and communications shall be deemed to have
been duly given when received.

                                     - 20 -
<PAGE>

                  The Initial Purchasers or the Company by notice to the other
parties may designate additional or different addresses for subsequent notices
or communications.

                  12. Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including, without the need for an express assignment or any consent by
the Company, subsequent Holders of Securities and New Securities. The Company
hereby agrees to extend the benefits of this Agreement to any Holder of
Securities and New Securities, and any such Holder may specifically enforce the
provisions of this Agreement as if an original party hereto.

                  13. Counterparts. This agreement may be in signed
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.

                  14. Headings. The headings used herein are for convenience
only and shall not affect the construction hereof.

                  15. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed in the State of New York.

                  16. Severability. In the event that any one of 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 thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.

                  17. Securities Held by the Company, Etc. Whenever the consent
or approval of Holders of a specified percentage of principal amount of
Securities or New Securities is required hereunder, Securities or New
Securities, as applicable, held by the Company or its Affiliates (other than
subsequent Holders of Securities or New Securities if such subsequent Holders
are deemed to be Affiliates solely by reason of their holdings of such
Securities or New Securities) shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage.

                            [Signature pages follow.]

                                     - 21 -
<PAGE>

                  If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a building agreement
among the Company and the several Initial Purchasers.

                                       Very truly yours,

                                       PRIDE INTERNATIONAL INC.

                                       By:   /s/ Steven D. Oldham
                                          -------------------------------------
                                          Steven D. Oldham
                                          Vice President - Treasury and
                                          Investor Relations

                                     - 22 -
<PAGE>

The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.

CITIGROUP GLOBAL MARKETS INC.
BANC OF AMERICA SECURITIES LLC
DEUTSCHE BANK SECURITIES INC.
NATEXIS BLEICHROEDER INC.
BNP PARIBAS SECURITIES CORP.
CALYON SECURITIES (USA) INC.
As Representatives of the Initial Purchasers

By: CITIGROUP GLOBAL MARKETS INC.

By:   /s/ Stephen P. Cunningham
   --------------------------------------
   Stephen P. Cunningham
   Managing Director

                                     - 23 -
<PAGE>

                                   SCHEDULE I

                              (Initial Purchasers)

Citigroup Global Markets Inc.

Banc of America Securities LLC

Deutsche Bank Securities Inc.

Natexis Bleichroeder Inc.

BNP Paribas Securities Corp.

Calyon Securities (USA) Inc.

                                   Schedule I

<PAGE>

                                                                         ANNEX A

                  Each Broker-Dealer that receives New Securities for its own
account in exchange for Securities, where such Securities were acquired by such
Broker-Dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such New Securities. See "Plan of Distribution."

                                     Annex A

<PAGE>

                                                                         ANNEX B

                              PLAN OF DISTRIBUTION

                  Each Broker-Dealer that receives New Securities for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a Broker-Dealer in connection with resales of New Securities received in
exchange for Securities where such Securities were acquired as a result of
market-making activities or other trading activities. The Company has agreed
that, starting on the Expiration Date and ending on the close of business 180
days after the Expiration Date, it will make this Prospectus, as amended or
supplemented, available to any Broker-Dealer for use in connection with any such
resale.

                  The Company will not receive any proceeds from any sale of New
Securities by Broker-Dealers. New Securities received by Broker-Dealers for
their own account pursuant to the Exchange Offer may be sold from time to time
in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the New Securities or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such Broker-Dealer and/or the purchasers of any such New
Securities. Any Broker-Dealer that resells New Securities that were received by
it for its own account pursuant to the Exchange Offer and any broker or dealer
that participates in a distribution of such New Securities may be deemed to be
an "underwriter" within the meaning of the Act and any profit of any such resale
of New Securities and any commissions or concessions received by any such
Persons may be deemed to be underwriting compensation under the Act. The Letter
of Transmittal states that by acknowledging that it will deliver and by
delivering a prospectus, a Broker-Dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Act.

                  For a period of 180 days after the Expiration Date, the
Company will promptly send additional copies of this Prospectus and any
amendment or supplement to this Prospectus to any Broker-Dealer that requests
such documents in the Letter of Transmittal. The Company has agreed to pay all
reasonable expenses incident to the Exchange Offer (including the reasonable
expenses of one counsel for the holders of the Securities) other than
commissions or concessions of any brokers or dealers and will indemnify the
holders of the Securities (including any Broker-Dealers) against certain
liabilities, including liabilities under the Act.

                  If applicable, add information required by Regulation S-K
Items 507 and/or 508.

                                     Annex B

<PAGE>

                                                                         ANNEX C

                  If the undersigned is not a Broker-Dealer, the undersigned
represents that it acquired the New Securities in the ordinary course of its
business, it is not engaged in, and does not intend to engage in, the
distribution of New Securities within the meaning of the Act and it has no
arrangements or understandings with any Person to participate in a distribution
of the Securities or the New Securities within the meaning of the Act. If the
undersigned is a Broker-Dealer, the undersigned represents that it will receive
New Securities for its own account in exchange for Securities, and that the
Securities to be exchanged for New Securities were acquired by it as a result of
market-making activities or other trading activities, and it acknowledges that
it will deliver a prospectus in connection with any resale of such New
Securities; however, by so acknowledging and by delivering a prospectus, the
undersigned will not be deemed to admit that it is an "underwriter" within the
meaning of the Act.

                                     Annex C

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