Document:

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                                                                     EXHIBIT 4.2

                            NABORS INDUSTRIES, INC.

                   $275,000,000 5.375% SENIOR NOTES DUE 2012

                         REGISTRATION RIGHTS AGREEMENT

                                                              New York, New York
                                                                 August 22, 2002

Lehman Brothers Inc.
745 Seventh Avenue
New York, New York 10019

Ladies and Gentlemen:

     Nabors Industries, Inc., a corporation organized under the laws of the
State of Delaware (the "Company"), proposes to issue and sell to Lehman Brothers
Inc. (the "Initial Purchaser"), upon the terms set forth in a purchase
agreement, dated August 22, 2002 (the "Purchase Agreement"), $275,000,000
aggregate principal amount of its 5.375% Senior Notes due 2012 (the "Notes")
relating to the initial placement of the Notes (the "Initial Placement"). The
Notes will be unconditionally guaranteed (the "Guarantees" and together with the
Notes, the "Securities") on a senior basis by Nabors Industries Ltd., a Bermuda
company (the "Guarantor"). Concurrently with Initial Placement of the Notes,
Nabors Holdings 1, ULC, an indirect, wholly-owned subsidiary of the Guarantor,
is offering an aggregate of $225,000,000 of its 4.875% Senior Notes due 2009,
guaranteed by each of the Guarantor and Nabors Industries, Inc., a Delaware
corporation, to Qualified Institutional Buyers under Rule 144A (the "Concurrent
Offering"). The consummation of the Initial Placement of the Notes and the
Concurrent Offering are not conditioned upon each other. To satisfy a condition
to the obligations of the Initial Purchaser under the Purchase Agreement, the
Company and the Guarantor agree with the Initial Purchaser for the benefit of
the holders from time to time of the Securities (including the Initial
Purchaser) and the New Securities (as defined herein) (each a "Holder"and,
together, the "Holders"), as follows:

     1.  Definitions.  Capitalized terms used herein without definition shall
have their respective meanings set forth in the Purchase Agreement. 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 have the same meaning as in Rule
501(b) of Regulation D of the Securities Act.

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

     "Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.

     "Closing Date" shall mean the date on which the Securities are initially
issued.

     "Commission" shall mean the Securities and Exchange Commission.

     "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
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     "Exchange Offer Registration Period" shall mean 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, or such shorter
period as will terminate when all New Securities held by Exchanging Dealers or
Initial Purchaser have been sold pursuant thereto.

     "Exchange Offer Registration Statement" shall mean a registration statement
of the Company and the Guarantor 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 the 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
Affiliate of the Company).

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

     "Indenture" shall mean the Indenture relating to the Securities, dated as
of August 22, 2002, among the Company, the Guarantor and Bank One, N.A., as
trustee, 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 Purchaser" shall have the meaning set forth in the preamble
hereto.

     "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 Notes and/or New Notes, as applicable, 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.

     "Memorandum" shall have the meaning set forth in the Purchase Agreement.

     "New Notes" shall mean debt securities of the Company, guaranteed by the
Guarantor, identical in all material respects to the Notes (except that the cash
interest and interest rate step-up provisions and the transfer restrictions
shall be modified or eliminated, as appropriate) and to be issued under the
Indenture or the New Securities Indenture.

     "New Securities" shall mean debt securities of the Company and the related
guarantees of the Guarantor, identical in all material respects to the
Securities (except that the cash interest and interest rate step-up provisions
and the transfer restrictions shall be modified or eliminated, as appropriate)
and to be issued under the Indenture or the New Securities Indenture.

     "New Securities Indenture" shall mean an indenture among the Company, the
Guarantor and the New Securities Trustee, identical in all material respects to
the Indenture (except that the interest rate step-up provisions will be modified
or eliminated, as appropriate).

     "New Securities Trustee" shall mean a bank or trust company reasonably
satisfactory to the Initial Purchaser, as trustee with respect to the New
Securities under the New Securities 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.

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     "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 Notes
and Related Guarantees.

     "Registration Statement" shall mean any Exchange Offer Registration
Statement or Shelf Registration Statement that covers any of the Securities or
the New Securities pursuant to the provisions of this Agreement, any 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.

     "Related Guarantees" shall mean the guarantees of the Guarantor to be
issued under the Indenture or the New Securities Indenture in respect of New
Notes.

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

     "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.

     "Shelf Registration Statement" shall mean a "shelf" registration statement
of the Company and the Guarantor pursuant to the provisions of Section 3 hereof
which covers some or all of the Securities and/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.

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

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

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

     2.  Registered Exchange Offer.

     (a) Except as set forth in Section 3 below, the Company and the Guarantor
shall prepare, at their cost, and, not later than 90 days following the Closing
Date (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 and the Guarantor
shall use their reasonable best efforts to cause the Exchange Offer Registration
Statement to become effective under the Act not later December 2, 2002.

     (b) Upon the effectiveness of the Exchange Offer Registration Statement,
the Company and the Guarantor shall promptly commence the Registered Exchange
Offer.

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

          (i) mail 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) commence and use their reasonable best efforts to complete the
     Registered Exchange Offer promptly, but no later than December 31, 2002,
     and hold the Registered Exchange Offer open for not less than 20 Business
     Days;

          (iii) use their reasonable best efforts to keep the Exchange Offer
     Registration Statement continuously effective under the Act, supplemented
     and amended as required, under the Act to ensure

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     that it is available for sales of New Securities by Exchanging Dealers or
     the Initial Purchaser during the Exchange Offer Registration Period;

          (iv) utilize the services of a depositary for the Registered Exchange
     Offer with an address in the Borough of Manhattan in New York City, which
     may be the Trustee, the New Securities Trustee or an Affiliate of either of
     them;

          (v) permit Holders to withdraw tendered Securities at any time prior
     to the close of business, New York time, on the last Business Day on which
     the Registered Exchange Offer is open;

          (vi) prior to effectiveness of the Exchange Offer Registration
     Statement, provide a supplemental letter to the Commission (A) stating that
     the Company and the Guarantor are conducting the Registered Exchange Offer
     in reliance on the position of the Commission in Exxon Capital Holdings
     Corporation (pub. avail. May 13, 1988), Morgan Stanley and Co., Inc. (pub.
     avail. June 5, 1991); and (B) including a representation to the effect that
     the Company and the Guarantor have 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 their
     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

          (vii) comply in all material respects with all applicable laws.

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

          (i) accept for exchange all Notes tendered and not validly withdrawn
     pursuant to the Registered Exchange Offer;

          (ii) deliver to the Trustee for cancellation in accordance with
     Section 5(r) all Notes so accepted for exchange; and

          (iii) cause the Trustee or New Securities Trustee, as the case may be,
     promptly to authenticate and deliver to each Holder of Securities a
     principal amount of New Notes equal to the principal amount of the Notes of
     such Holder so accepted for exchange.

     (e) Each Holder hereby acknowledges and agrees that any Broker-Dealer and
any such 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
delivery requirements of the Act in connection with any secondary resale
transaction which 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 and the Guarantor 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 business;

          (ii) such Holder will have 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 any of the
     Guarantor or if it is an Affiliate, such Holder will comply with the
     registration and prospectus delivery requirements of the Act to the extent
     applicable;
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          (iv) if such Holder is not a Broker-Dealer, that it is not engaged in,
     and does not intend to engage in, the distribution of the New Securities;
     and

          (v) if such Holder is a Broker-Dealer, that it will receive New
     Securities for its own account in exchange for Securities that were
     acquired as a result of market-making activities or other trading
     activities and that it will deliver a prospectus in connection with any
     resale of such New Securities.

     3.  Shelf Registration.

     (a) If (i) due to any change in law or applicable interpretations thereof
by the Commission's 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 Exchange Offer
Registration Statement is not declared effective by December 2, 2002 or the
Registered Exchange Offer is not consummated by December 31, 2002; (iii) the
Initial Purchaser determines upon advice of its counsel that a Shelf
Registration Statement must be filed in connection with any public offering or
sale of 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; or (iv) any Holder (other than the Initial
Purchaser) is not eligible to participate in the Registered Exchange Offer or
does not receive freely tradeable New Securities in the Registered Exchange
Offer other than by reason of such Holder being an Affiliate of the Company (it
being understood that the requirement that a participating Broker-Dealer deliver
the prospectus contained in the Exchange Offer Registration Statement in
connection with sales of New Securities shall not result in such New Securities
being not "freely tradeable"), the Company and the Guarantor shall effect a
Shelf Registration Statement in accordance with subsection (b) below.

     (b) If required pursuant to subsection (a) above,

          (i) the Company and the Guarantor, at their cost, shall as promptly as
     practicable, but in no event later than 90 days after such obligation to
     file arises, file with the Commission and thereafter shall use their
     reasonable best efforts to cause to be declared effective under the Act as
     soon as practicable, but in no event later than December 31, 2002, 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 elected by such Holders and
     set forth in such Shelf Registration Statement; provided, however, that no
     Holder (other than the Initial Purchaser) shall be entitled to have the
     Securities or New 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 the Initial
     Purchaser in exchange for Securities constituting any portion of an unsold
     allotment, the Company and the Guarantor may, if permitted by current
     interpretations by the Commission's staff, file a post-effective amendment
     to the Exchange Offer Registration Statement containing the information
     required by Item 507 or 508 of Regulation S-K, as applicable, in
     satisfaction of their 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 and the Guarantor shall use their 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 the
     earlier of (A) the time when all of the Securities or New Securities, as
     applicable, covered by the Shelf Registration Statement can be sold
     pursuant to Rule 144 without limitation under clauses (c), (e), (f) and (h)
     of Rule 144, (B) the date on which all the Securities or New Securities, as
     applicable, covered by the Shelf Registration Statement have been sold
     pursuant to the Shelf Registration Statement, and (C) the date two years
     from the date the Shelf Registration Statement is declared effective by the
     Commission (in any such case, such period being called the "Shelf
     Registration Period"). The Company and the Guarantor shall be deemed not to
     have used their reasonable best efforts to keep the Shelf Registration
     Statement effective during the requisite period if they voluntarily
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     take any action that would result in Holders of Securities or New
     Securities covered thereby not being able to offer and sell such Securities
     or New Securities during that period, unless (A) such action is required by
     applicable law; or (B) such action is taken by the Company and the
     Guarantor in good faith and for valid business reasons (not including
     avoidance of the Company's and the Guarantor' obligations hereunder),
     including, but not limited to, the acquisition or divestiture of assets, so
     long as the Company and the Guarantor promptly thereafter comply with the
     requirements of Section 5(k) hereof, if applicable.

          (iii) the Company and the Guarantor 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 Securities 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.  Special Interest.  If (a) on or prior to December 31, 2002, the
Registered Exchange Offer has not been consummated, or (b) after either the
Exchange Offer Registration Statement or the Shelf Registration Statement has
been declared effective, such Registration Statement thereafter ceases to be
effective or usable in connection with resales of Securities or New Securities
in accordance with and during the periods specified in this Agreement (each such
event referred to in clauses (a) and (b), a ("Registration Default"), then, as
liquidated damages, interest ("Special Interest") will accrue on the principal
amount of the Securities and the New Securities (in addition to the stated
interest on the Securities and New Securities) from and including the date on
which any such Registration Default shall occur to but excluding the date on
which all Registration Defaults have been cured. Special Interest will accrue at
a rate of 0.25% per annum.

     All obligations of the Company and the Guarantor set forth in the preceding
paragraph that are outstanding with respect to any Security at the time such
Security is exchanged for a New Security shall survive until such time as all
such obligations with respect to such Security have been satisfied in full.

     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.

          (a) The Company and the Guarantor shall:

             (i) furnish to the Initial Purchaser, not less than five Business
        Days prior to the filing thereof with the Commission, a draft 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) and shall
        use their reasonable best efforts to reflect in each such document, when
        so filed with the Commission, such comments as the Initial Purchaser
        reasonably proposes;

             (ii) include the information set forth in Annex A hereto on the
        front page of the Prospectus contained in the Exchange Offer
        Registration Statement, in Annex B hereto in the forepart of the
        Exchange Offer Registration Statement in a section setting forth details
        of the Exchange Offer, in Annex C hereto in the underwriting or plan of
        distribution section of the Prospectus contained in the Exchange Offer
        Registration Statement, and in Annex D hereto in the letter of
        transmittal delivered pursuant to the Registered Exchange Offer;

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

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

          (b) The Company and the Guarantor shall ensure that:

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

             (ii) any Registration Statement and any amendment thereto does not,
        when it becomes 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 and the Guarantor shall advise the Initial Purchaser,
     the Holders of Securities or New 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 and the
     Guarantor a telephone or facsimile number and address for notices, and, if
     requested by the Initial Purchaser or any such Holder or Exchanging Dealer
     shall confirm such advice in writing (which notice pursuant to clauses
     (ii)-(v) hereof shall be accompanied by an instruction to suspend the use
     of the Prospectus until the Company and the Guarantor shall have remedied
     the basis for such suspension):

             (i) when a Registration Statement and any amendment thereto has
        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;

             (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 and the Guarantor of any
        notification with respect to the suspension of the qualification of the
        Securities or New Securities included therein for sale in any
        jurisdiction or the initiation of any proceeding for such purpose; and

             (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.

          (d) The Company and the Guarantor shall use their reasonable best
     efforts to obtain the withdrawal of any order suspending the effectiveness
     of any Registration Statement or the qualification of the Securities or New
     Securities therein for sale in any jurisdiction at the earliest possible
     time.

          (e) The Company and the Guarantor shall furnish to each Holder of
     Securities or New 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 and the Guarantor shall, during the Shelf Registration
     Period, deliver to each Holder of Securities or New 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 and the Guarantor consent to the
     use of the Prospectus or any amendment or
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     supplement thereto by each of the selling Holders of Securities or New
     Securities in connection with the offering and sale of the Securities or
     New Securities covered by the Prospectus, or any amendment or supplement
     thereto, included in the Shelf Registration Statement.

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

          (h) The Company and the Guarantor shall promptly deliver to the
     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 and the Guarantor consent to the
     use of the Prospectus or any amendment or supplement thereto by the 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 and the Guarantor shall arrange, if necessary, for the
     qualification of the Securities or the New Securities for sale under the
     laws of such jurisdictions 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 and the Guarantor be obligated to qualify to do
     business in any jurisdiction where they are not then so qualified or to
     take any action that would subject them to service of process in suits or
     taxation, 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 they are not then so subject.

          (j) The Company and the Guarantor shall cooperate with the Holders of
     Securities and New Securities to facilitate the timely preparation and
     delivery of certificates representing New Securities or 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, the Company and the Guarantor 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 the Initial Purchaser
     or Exchanging Dealers, 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. 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 notice of suspension pursuant to Section 5(c) to and including the date
     when the Initial Purchaser, the Holders of the Securities or New Securities
     and any known Exchanging Dealer shall have received such amended or
     supplemented Prospectus pursuant to this Section.

          (l) Not later than the effective date of any Registration Statement,
     the Company and the Guarantor shall provide a CUSIP number for the
     Securities or the New Securities, as the case may be, registered under such
     Registration Statement and provide the Trustee with printed certificates
     for such Securities or New Securities, in a form eligible for deposit with
     The Depository Trust Company.

          (m) The Company and the Guarantor shall comply with all applicable
     rules and regulations of the Commission and shall make generally available
     to their security holders as soon as practicable

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     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 and the Guarantor shall cause the Indenture or the New
     Securities Indenture, as the case may be, to be qualified under the Trust
     Indenture Act in a timely manner.

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

          (p) In the case of any Shelf Registration Statement, the Company and
     the Guarantor shall enter into such agreements and take all other
     appropriate actions (including if requested an underwriting agreement in
     customary form) in order to expedite or facilitate the registration or the
     disposition of the Securities or New Securities, and in connection
     therewith, if an underwriting agreement is entered into, cause the same to
     contain indemnification provisions and procedures no less favorable than
     those set forth in Section 7 (or such other provisions and procedures
     acceptable to the Majority Holders and the Managing Underwriters, if any,
     with respect to all parties to be indemnified pursuant to Section 7).

          (q) In the case of any Shelf Registration Statement, the Company and
     the Guarantor shall use their reasonable best efforts to:

             (i) make reasonably available for inspection by the Holders of
        Securities or New Securities to be registered thereunder, any
        Underwriter participating in any disposition pursuant to such
        Registration Statement, and any attorney, accountant or other agent
        retained by the Holders or any such Underwriter all relevant financial
        and other records, pertinent corporate 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 in connection with a court proceeding or
        required by law, or such information becomes available to the public
        generally or through a third party without an accompanying obligation of
        confidentiality;

             (iii) make such representations and warranties to the Holders of
        Securities or New Securities registered thereunder and the Underwriters,
        if any, in form, substance and scope as are customarily made by issuers
        to Underwriters in primary underwritten offerings and covering matters
        including, but not limited to, those set forth in the Purchase
        Agreement;

             (iv) obtain opinions of counsel to the Company and the Guarantor
        and updates thereof (which counsel and opinions (in form, scope and
        substance) shall be reasonably satisfactory to the Managing
        Underwriters, if any) addressed to each selling Holder and the
        Underwriters, if any, covering such matters as are customarily covered
        in opinions requested in underwritten offerings and such other matters
        as may be reasonably requested by such Holders and Underwriters;

             (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

                                        9
<PAGE>

        which financial statements and financial data are, or are required to
        be, included in the Registration Statement), addressed to each selling
        Holder of Securities or New Securities registered thereunder and 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; and

             (vi) deliver such documents and certificates as may be reasonably
        requested by the Majority Holders and 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 and the Guarantor.

     The actions set forth in clauses (iii), (iv), (v) and (vi) of this Section
     shall be performed at (A) the effectiveness of such Registration Statement
     and each post-effective amendment thereto; and (B) each closing under any
     underwriting or similar agreement as and to the extent required thereunder.

          (r) 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 caused 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 as paid or otherwise satisfied.

          (s) If any Broker-Dealer shall underwrite any Securities or New
     Securities or participate as a member of an underwriting syndicate or
     selling group or "assist in the distribution" (within the meaning of the
     Rules of Fair Practice and the By-Laws of the National Association of
     Securities Dealers, Inc.) thereof, whether as a Holder of such Securities
     or New Securities or as an Underwriter, a placement or sales agent or a
     broker or dealer in respect thereof, or otherwise, assist such
     Broker-Dealer in complying with the requirements of such Rules and By-Laws,
     including, without limitation, by:

             (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 or New 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.

          (t) The Company and the Guarantor shall use their reasonable best
     efforts to take all other steps necessary to effect the registration of the
     Securities or the New Securities, as the case may be, covered by a
     Registration Statement.

     6.  Registration Expenses.  The Company and the Guarantor shall bear all
expenses incurred in connection with the performance of their 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 counsel designated by the Majority Holders to act as counsel for
the Holders in connection therewith, but excluding fees and expenses of counsel
to the Initial Purchaser or the Holders, all agency fees and commissions,
underwriting discounts and commissions and transfer taxes attributable to the
sale or disposition of Securities by a Holder.

                                        10
<PAGE>

     7.  Indemnification and Contribution.

     (a) The Company and the Guarantor agree, jointly and severally, to
indemnify and hold harmless (i) the Initial Purchaser, (ii) each Holder of
Securities or New Securities, as the case may be, covered by any Registration
Statement (including with respect to any Prospectus delivery as contemplated in
Section 5(h) hereof, each Exchanging Dealer), (iii) each Person, if any, who
controls (within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act) any of the foregoing (any of the Persons
referred to in this clause (iii) being hereinafter referred to as a "controlling
person"), and (iv) the respective officers, directors, partners, employees,
representatives and agents of the Initial Purchaser, the Holders (including
predecessor Holders) or any controlling person (any person referred to in clause
(i), (ii), (iii) or (iv) may hereinafter be referred to as an "Indemnified
Holder"), from and against any and all losses, claims, damages, and liabilities
(including, without limitation, reasonable legal fees and other expenses
incurred in connection with any suit, action or proceeding or any claim
asserted) (collectively "Losses") caused by any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement or
Prospectus, or any amendment or supplement thereto or any related preliminary
prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with information
relating to any Indemnified Holder furnished to the Company or the Guarantor in
writing by such Indemnified Holder expressly for use in therein; provided,
however, that neither the Company nor the Guarantor shall be liable to any
Indemnified Holder under the indemnity agreement of this paragraph with respect
to any preliminary prospectus to the extent that any such loss, claim, damage,
liability, judgment or expense of such Indemnified Holder results from the fact
that such Indemnified Holder sold Securities or New Securities under a
Registration Statement to a Person as to whom it shall be established that there
was not sent or given, at or prior to the written confirmation of such sale, a
copy of the Prospectus (or of the preliminary prospectus as then amended or
supplemented if the Company shall have furnished such Indemnified Holder with
such amendment or supplement thereto on a timely basis), in any case where such
delivery is required by applicable law and the loss, claim, damage, liability or
expense of such Indemnified Holder results from an untrue statement or omission
of a material fact contained in the preliminary prospectus which was corrected
in the Prospectus (or in the preliminary prospectus as then amended or
supplemented if the Company or the Guarantor shall have furnished such
Indemnified Holder with such amendment or supplement thereto, as the case may
be, on a timely basis). The Company or the Guarantor shall notify such
Indemnified Holder promptly of the institution, threat or assertion of any
claim, proceeding (including any governmental investigation) or litigation in
connection with the matters addressed by this Agreement which involves the
Company or the Guarantor or such Indemnified Holder.

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

     (c) The Initial Purchaser agrees to indemnify and hold harmless the Company
and the Guarantor, each of their respective directors and officers and each
Person who controls the Company or the Guarantor within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act to the same
extent as the foregoing indemnity from the Company and the Guarantor to the
Initial Purchaser, but only with reference to such losses, claims, damages or
liabilities which are caused by any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with

                                        11
<PAGE>

information relating to the Initial Purchaser furnished to the Company or the
Guarantor in writing by the Initial Purchaser expressly for use in any
Registration Statement or Prospectus, or any amendment or supplement thereto or
any related preliminary prospectus. This indemnity agreement will be in addition
to any liability which the Initial Purchaser may otherwise have.

     (d) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any Person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such Person (the "Indemnified Person") shall promptly
notify the Person or Persons against whom such indemnity may be sought (each an
"Indemnifying Person") in writing, and such Indemnifying Person, upon request of
the Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others entitled
to indemnification pursuant to this Section 7 that the Indemnifying Person may
designate in such proceeding and shall pay the fees and expenses of such counsel
related to such proceeding. In any such proceeding, the Indemnifying Person
shall be able to participate in such proceeding and, to the extent that it so
elects, jointly with any other similarly situated Indemnifying Person, to assume
the defense thereof, subject to the right of the Indemnified Person to be
separately represented and to direct its own defense if the named parties to any
such proceeding include both the Indemnified Person and the Indemnifying Person
and the Indemnified Person has been advised by counsel that representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) such Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary or (ii) the named parties in any such proceeding
(including any impleaded parties) include an Indemnifying Person and an
Indemnified Person and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood that an Indemnifying Person shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm for the Indemnified
Holders shall be designated in writing by the Holders of the majority in amount
of Securities and New Securities offered in the Prospectus to which the claim
relates, any such separate firm for the Company, its directors, respective
officers and such control Persons of the Company shall be designated in writing
by the Company, and any such separate firm for the Guarantor, its directors,
respective officers and such control Persons of the Guarantor shall be
designated in writing by the Guarantor. The Indemnifying Person shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, such Indemnifying Person agrees to indemnify any Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. No Indemnifying Person shall, without the prior written consent of the
Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Person,
unless such settlement includes an unconditional release of such Indemnified
Person from all liability on claims that are the subject matter of such
proceeding.

     (e) If the indemnification provided for in the first and second paragraphs
of this Section 7 is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Indemnifying Person on the one hand and the Indemnified
Person on the other hand pursuant to the Purchase Agreement or from the offering
of the Securities or New Securities pursuant to any Registration Statement which
resulted in such losses, claims, damages or liabilities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Indemnifying
Person on the one hand and the Indemnified Person on the other in
                                        12
<PAGE>

connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Guarantor
on the one hand and any Indemnified Holder on the other shall be deemed to be in
the same proportion as the total net proceeds from the Initial Placement
received by the Company and the Guarantor bear to the total net proceeds
received by such Indemnified Holder from sales of Securities or New Securities
giving rise to such obligations. The relative fault of the parties shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the Guarantor
or such Indemnified Holder and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.

     (f) Each of the Company, the Guarantor and the Initial Purchaser agrees
that it would not be just and equitable if contribution pursuant to this Section
7 were determined by pro rata allocation or by any other method of allocation
that does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an Indemnified
Person as a result of the losses, claims, damages and liabilities referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses incurred by such
Indemnified Person in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 7, in no event shall
any Holder of any Securities or New Securities be required to contribute any
amount in excess of the amount by which the net proceeds received by such Holder
from the sale of the Security or New Security pursuant to a Registration
Statement exceeds the amount of damages which such Holder would have otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.

     (g) The remedies provided for in this Section 7 are not exclusive and shall
not limit any rights or remedies that may otherwise be available to any
indemnified party at law or in equity.

     (h) The indemnity and contribution agreements contained in this Section 7
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Holder or any Person controlling any Holder or by or on behalf of the
Company or the Guarantor, their respective officers or directors or any other
Person controlling any of the Company or the Guarantor and (iii) acceptance of
and payment for any of the Securities or New Securities.

     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 and shall be
reasonably satisfactory to the Company and the Guarantor.

     (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.

     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.

     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
Majority Holders (or, after the consummation of any Registered Exchange Offer in
accordance with
                                        13
<PAGE>

Section 2 hereof, of New Securities); provided, however, that, with respect to
any matter that directly or indirectly affects the rights of the Initial
Purchaser hereunder, the Company shall obtain the written consent of the Initial
Purchaser. 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.

     11.  Notices.  All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telex, telecopier 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 Salomon Smith Barney Inc;

          (b) if to the Initial Purchaser, initially at its address set forth in
     the Purchase Agreement; and

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

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

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

     12.  Successors.  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
thereto, subsequent Holders of Securities or New Securities. The Company hereby
agrees to extend the benefits of this Agreement to any Holder of Securities and
the 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 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.

     16.  Severability.  If 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.

              [Remainder Of This Page Is Intentionally Left Blank]

                                        14
<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
Agreement and your acceptance shall represent a binding agreement among the
Company, the Guarantor and you.

                                          Very truly yours,

                                          NABORS INDUSTRIES, INC.

                                          By: /s/ Anthony G. Petrello
                                              ----------------------------------
                                              Name: Anthony G. Petrello
                                              Title: President and Chief
                                                     Operating Officer

                                          NABORS INDUSTRIES LTD.

                                          By: /s/ Daniel McLachlin
                                              ----------------------------------
                                              Name: Daniel McLachlin
                                              Title: Vice President and
                                                     Corporate Secretary
                                              Signed in St. Michael, Barbados

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

LEHMAN BROTHERS INC.

By: /s/ Gregory Hall
    -----------------------------------
    Name: Gregory Hall
    Title: Managing Director

                                        15
<PAGE>

                                    ANNEX A

     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. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
Broker-Dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. 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 by such Broker-Dealer as a result of market-making
activities or other trading activities. The Company has agreed that, starting on
the Expiration Date (as defined herein) and ending on the close of business one
year after the Expiration Date, or such shorter period as will terminate when
all New Securities held by Exchanging Dealers or Initial Purchaser have been
sold pursuant hereto, it will make this Prospectus available to any
Broker-Dealer for use in connection with any such resale. Furthermore, any
broker-dealer that acquired any of the old notes directly from us:

     - may not rely on the applicable interpretation of the staff of the SEC's
       position contained in Exxon Capital Holdings Corporation (pub. avail. May
       13, 1988), Morgan Stanley and Co., Inc. (pub. avail. June 5, 1991), ), as
       interpreted in the Commission's letter to Shearman & Sterling dated July
       2, 1993 and similar no-action letters; and

     - must also be named as a selling noteholder in connection with the
       registration and prospectus delivery requirements of the Securities Act
       relating to any resale transaction.

See "Plan of Distribution."

                                        16
<PAGE>

                                    ANNEX B

     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 comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
offer, resale or other transfer of such New Securities, including information
with respect to any selling holder required by the Securities Act in connection
with the resale of the New Securities. See "Plan of Distribution."

                                        17
<PAGE>

                                    ANNEX C

                              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. We have agreed that,
starting on the Expiration Date and ending on the close of business 180-days
after the Expiration Date or such shorter period as will terminate when all New
Securities held by Exchanging Dealers or Initial Purchaser have been sold
pursuant hereto, we will make this Prospectus, as amended or supplemented,
available to any Broker-Dealer for use in connection with any such resale. In
addition, until           , 200  , all dealers effecting transactions in the New
Securities may be required to deliver a prospectus.

     We will not receive any proceeds from any sale of New Securities by
brokers-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 Securities 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 Securities
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 Securities Act.

     Furthermore, any broker-dealer that acquired any of the old notes directly
from us:

     - may not rely on the applicable interpretation of the staff of the SEC's
       position contained in Exxon Capital Holdings Corporation (pub. avail. May
       13, 1988), Morgan Stanley and Co., Inc. (pub. avail. June 5, 1991),), as
       interpreted in the Commission's letter to Shearman & Sterling dated July
       2, 1993 and similar no-action letters; and

     - must also be named as a selling noteholder in connection with the
       registration and prospectus delivery requirements of the Securities Act
       relating to any resale transaction.

     For a period of 180-days after the Expiration Date or such shorter period
as will terminate when all New Securities held by Exchanging Dealers or Initial
Purchaser have been sold pursuant hereto, we 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. We
have agreed to pay all expenses incident to the Exchange Offer (including the
expenses of one counsel for the holder 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 Securities Act.

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

                                        18
<PAGE>

                                    ANNEX D

Rider A

     CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
     COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
     THERETO.

<Table>
    <S>      <C>
    Name:
             ------------------------------------------------
    Address:
             ------------------------------------------------

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

             ------------------------------------------------
</Table>

Rider B

     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, a distribution of New Securities
and it has no arrangements or understandings with any Person to participate in a
distribution of the New Securities. If the undersigned is a Broker-Dealer that
will receive New Securities for its own account in exchange for Securities, it
represents 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
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 Securities Act.

                                        19<PAGE>

                                                                     EXHIBIT 4.1

                            NABORS HOLDINGS 1, ULC,

                                   AS ISSUER

                            NABORS INDUSTRIES, INC.

                                      AND

                            NABORS INDUSTRIES LTD.,

                                 AS GUARANTORS

                                      AND

                                BANK ONE, N.A.,

                                   AS TRUSTEE

                                   INDENTURE

                          DATED AS OF AUGUST 22, 2002

                             SERIES A AND SERIES B

                          4.875% SENIOR NOTES DUE 2009
<PAGE>

                               TABLE OF CONTENTS

<Table>
<S>             <C>                                                           <C>
                                    ARTICLE I
                   DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01.   Definitions.................................................    1
SECTION 1.02.   Other Definitions...........................................    6
SECTION 1.03.   Incorporation by Reference of Trust Indenture Act...........    6
SECTION 1.04.   Rules of Construction.......................................    6
                                   ARTICLE II
                                 THE SECURITIES
SECTION 2.01.   Form and Dating.............................................    7
SECTION 2.02.   Execution and Authentication................................    8
SECTION 2.03.   Registrar and Paying Agent..................................    9
SECTION 2.04.   Paying Agent to Hold Money in Trust.........................    9
SECTION 2.05.   Holder Lists................................................    9
SECTION 2.06.   Transfer and Exchange.......................................    9
SECTION 2.07.   Replacement Securities......................................   19
SECTION 2.08.   Outstanding Securities......................................   20
SECTION 2.09.   [Reserved.].................................................   20
SECTION 2.10.   Temporary Securities........................................   20
SECTION 2.11.   Cancellation................................................   20
SECTION 2.12.   Defaulted Interest..........................................   20
SECTION 2.13.   Persons Deemed Owners.......................................   20
SECTION 2.14.   CUSIP Numbers...............................................   21
                                   ARTICLE III
                                    COVENANTS
SECTION 3.01.   Payment of Securities.......................................   21
SECTION 3.02.   Maintenance of Office or Agency.............................   21
SECTION 3.03.   SEC Reports; Financial Statements...........................   22
SECTION 3.04.   Compliance Certificate......................................   22
SECTION 3.05.   Corporate Existence.........................................   22
SECTION 3.06.   Waiver of Stay, Extension or Usury Laws.....................   22
SECTION 3.07.   Limitation on Liens.........................................   23
SECTION 3.08.   Payment of Additional Amounts...............................   25
SECTION 3.09.   Limitations on Sale and Lease-Back Transactions.............   26
                                   ARTICLE IV
                         CONSOLIDATION, MERGER AND SALE
SECTION 4.01.   Limitation on Mergers and Consolidations....................   26
SECTION 4.02.   Successors Substituted......................................   27
SECTION 4.03.   Assignment of Company's Obligations.........................   27
                                    ARTICLE V
                              DEFAULTS AND REMEDIES
SECTION 5.01.   Events of Default...........................................   28
SECTION 5.02.   Acceleration................................................   29
SECTION 5.03.   Other Remedies..............................................   29
SECTION 5.04.   Waiver of Existing Defaults.................................   30
SECTION 5.05.   Control by Majority.........................................   30
</Table>

                                        i
<PAGE>
<Table>
<S>             <C>                                                           <C>
SECTION 5.06.   Limitations on Suits........................................   30
SECTION 5.07.   Rights of Holders to Receive Payment........................   30
SECTION 5.08.   Collection Suit by Trustee..................................   31
SECTION 5.09.   Trustee May File Proofs of Claim............................   31
SECTION 5.10.   Priorities..................................................   31
SECTION 5.11.   Undertaking for Costs.......................................   31
                                   ARTICLE VI
                                     TRUSTEE
SECTION 6.01.   Duties of Trustee...........................................   32
SECTION 6.02.   Rights of Trustee...........................................   32
SECTION 6.03.   Individual Rights of Trustee................................   33
SECTION 6.04.   Trustee's Disclaimer........................................   33
SECTION 6.05.   Notice of Defaults..........................................   33
SECTION 6.06.   Reports by Trustee to Holders...............................   34
SECTION 6.07.   Compensation and Indemnity..................................   34
SECTION 6.08.   Replacement of Trustee......................................   34
SECTION 6.09.   Successor Trustee by Merger, etc. ..........................   35
SECTION 6.10.   Eligibility; Disqualification...............................   35
SECTION 6.11.   Preferential Collection of Claims Against Company...........   36
                                   ARTICLE VII
                             DISCHARGE OF INDENTURE
SECTION 7.01.   Termination of Company's Obligations........................   36
SECTION 7.02.   Application of Trust Money..................................   38
SECTION 7.03.   Repayment to Company........................................   39
SECTION 7.04.   Reinstatement...............................................   39
                                  ARTICLE VIII
                                   AMENDMENTS
SECTION 8.01.   Without Consent of Holders..................................   39
SECTION 8.02.   With Consent of Holders.....................................   40
SECTION 8.03.   Compliance with Trust Indenture Act.........................   41
SECTION 8.04.   Revocation and Effect of Consents...........................   41
SECTION 8.05.   Notation on or Exchange of Securities.......................   41
SECTION 8.06.   Trustee to Sign Amendments, etc. ...........................   42
                                   ARTICLE IX
                            GUARANTEES OF SECURITIES
SECTION 9.01.   Unconditional Guarantees....................................   42
SECTION 9.02.   Execution and Delivery of Notation of Guarantees............   44
                                    ARTICLE X
                                   REDEMPTION
SECTION 10.01.  Notices to Trustee..........................................   44
SECTION 10.02.  Selection of Securities to be Redeemed......................   44
SECTION 10.03.  Notices to Holders..........................................   45
SECTION 10.04.  Effect of Notices of Redemption.............................   45
SECTION 10.05.  Deposit of Redemption Price.................................   45
SECTION 10.06.  Securities Redeemed in Part.................................   45
SECTION 10.07.  Optional Redemption.........................................   46
</Table>

                                        ii
<PAGE>
<Table>
<S>             <C>                                                           <C>
                                   ARTICLE XI
                                  MISCELLANEOUS
SECTION 11.01.  Trust Indenture Act Controls................................   46
SECTION 11.02.  Notices.....................................................   46
SECTION 11.03.  Communication by Holders with Other Holders.................   47
SECTION 11.04.  Certificate and Opinion as to Conditions Precedent..........   47
SECTION 11.05.  Statements Required in Certificate or Opinion...............   47
SECTION 11.06.  Rules by Trustee and Agents.................................   47
SECTION 11.07.  Legal Holidays..............................................   47
SECTION 11.08.  No Recourse Against Others..................................   47
SECTION 11.09.  Governing Law...............................................   48
SECTION 11.10.  Consent to Jurisdiction and Service of Process..............   48
SECTION 11.11.  Waiver of Immunity..........................................   48
SECTION 11.12.  Judgment Currency...........................................   48
SECTION 11.13.  No Adverse Interpretation of Other Agreements...............   49
SECTION 11.14.  Successors..................................................   49
SECTION 11.15.  Severability................................................   49
SECTION 11.16.  Counterpart Originals.......................................   49
SECTION 11.17.  Table of Contents, Headings, etc. ..........................   49

EXHIBITS

EXHIBIT A -- Form of 10-Year Security.......................................  A-1
EXHIBIT B -- [Reserved].....................................................  B-1
EXHIBIT C -- Form of Certificate of Transfer................................  C-1
EXHIBIT D -- Form of Certificate of Exchange................................  D-1
</Table>

                                       iii
<PAGE>

     THIS INDENTURE dated as of August 22, 2002, is among Nabors Holdings 1,
ULC, an unlimited liability company organized under the laws of the province of
Nova Scotia, Canada, formerly known as Acorn Holdings I ULC (the "Company"),
Nabors Industries, Inc., a Delaware corporation (the "U.S. Guarantor"), Nabors
Industries Ltd., a Bermuda exempted company (the "Bermuda Guarantor" and,
together with the U.S. Guarantor, the "Guarantors"), and Bank One, N.A., as
trustee (the "Trustee").

     Each party agrees as follows for the benefit of the other parties and for
the equal and ratable benefit of the Holders of the Company's 4.875% Series A
Senior Notes due 2009 (the "Series A Securities") and 4.875% Series B Senior
Notes due 2009 (the "Series B Securities" and together with the Series A
Securities, the "Securities").

                                   ARTICLE I

                   DEFINITIONS AND INCORPORATION BY REFERENCE

     SECTION 1.01.  Definitions.

     "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, such specified Person. For purposes of this definition, "control"
of a Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" shall have meanings correlative to the foregoing. The Trustee may
request and may conclusively rely upon an Officers' Certificate to determine
whether any Person is an Affiliate of any specified Person.

     "Agent" means any Registrar or Paying Agent.

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

     "Attributable Debt" means, with respect to any Sale and Lease-Back
Transaction as of any particular time, the present value discounted at the rate
of interest implicit in the terms of the lease of the obligations of the lessee
under such lease for net rental payments during the remaining term of the lease.

     "Bankruptcy Law" means Title 11, U.S. Code, the Bankruptcy and Insolvency
Act (Canada), the Companies' Creditors Arrangement Act (Canada) or any similar
U.S. or Canadian Federal, State or provincial law or any similar Bermudan or
other foreign law for the relief of debtors.

     "Bermuda Guarantor" means the Person named as the "Bermuda Guarantor" in
the first paragraph of this instrument until a successor Person shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter "Bermuda Guarantor" shall mean such successor Person.

     "Board of Directors" of any Person means the board of directors, board of
managers (or other comparable governing body) of such Person or any committee
thereof duly authorized, with respect to any particular matter, to act by or on
behalf of the board of directors of such Person.

     "Business Day" means any day that is not a Legal Holiday.

     "Clearstream" means Clearstream Banking, S.A.

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

     "Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.

     "Consolidated Net Worth" means the amount of total stockholders' equity
shown in the most recent consolidated statement of financial position of the
Bermuda Guarantor as filed with the SEC.
<PAGE>

     "Corporate Trust Office of the Trustee" means the office of the Trustee at
which this Indenture shall be principally administered, which office shall
initially be located at the address of the Trustee specified in Section 11.02
and may be located at such other address as the Trustee may give notice to the
Company and the Holders or such other address as a successor Trustee may
designate from time to time by notice to the Company and the Holders.

     "Custodian" means any receiver, trustee, assignee, liquidator or similar
official under any Bankruptcy Law.

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

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

     "Depositary" means The Depository Trust Company, its nominees and their
respective successors.

     "Distribution Compliance Period" means the "distribution compliance period"
as defined in Regulation S.

     "Euroclear" means Euroclear Bank, S.A.

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

     "Exchange Offer" means the offer that may be made by the Company pursuant
to the Registration Rights Agreement to exchange Series B Securities for the
Series A Securities.

     "Exchange Offer Registration Statement" means a registration statement
under the Securities Act relating to an Exchange Offer, including the related
prospectus.

     "Funded Debt" means indebtedness for money borrowed which by its terms
matures at, or is extendible or renewable at the option of the obligor to, a
date more than twelve months after the date of creation of such indebtedness.

     "GAAP" means generally accepted accounting principles in the United States,
as in effect from time to time.

     "Global Securities" means, individually and collectively, each of the
Restricted Global Securities and the Unrestricted Global Securities,
substantially in the form of Exhibit A, issued in accordance with Section 2.01,
2.06(b)(iv), 2.06(d)(ii) or 2.06(f).

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

     "Guarantor" means each Person named as a "Guarantor" in the first paragraph
of this instrument until a successor Person shall have assumed the obligations
of such Person pursuant to the applicable provisions of this Indenture, and
thereafter "Guarantor" shall mean such successor Person(s).

     "Holder" means a Person in whose name a Security is registered.

     "Indebtedness" means any indebtedness for money borrowed or representing
the deferred purchase price of property or assets purchased.

     "Indenture" means this Indenture as amended or supplemented from time to
time.

     "Indirect Participant" means a Person who holds a beneficial interest in a
Global Security through a Participant.

     "Initial Purchaser" means the initial purchaser named in the Purchase
Agreement, as initial purchaser of the Series A Securities in the Offering.

                                        2
<PAGE>

     "Interest Payment Date" has the meaning assigned to such term in the
Securities.

     "Issue Date" means the first date on which the Series A Securities are
issued under this Indenture.

     "Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in any of New York, New York, Houston, Texas or a place of payment
are authorized or obligated by law, regulation or executive order to remain
closed.

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

     "Liquidated Damages" has the same meaning as that given to the term
"Special Interest" in the Registration Rights Agreement.

     "Maturity," when used with respect to any Security, means the date on which
the principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity, by
declaration of acceleration, call for redemption or otherwise.

     "Non-U.S. Person" means a Person who is not a U.S. Person.

     "Offering" means the offering of the Original Securities pursuant to the
Offering Memorandum.

     "Offering Memorandum" means the Offering Memorandum of the Company, dated
August 15, 2002, relating to the Offering.

     "Officer" means the Chairman of the Board, the Chief Executive Officer, the
President, any Vice Chairman of the Board, any Vice President, the Chief
Financial Officer, the Chief Accounting Officer, the Treasurer, any Assistant
Treasurer, the Controller, the Secretary or any Assistant Secretary of a Person.

     "Officers' Certificate" means a certificate signed by two Officers of a
Person, one of whom must be the Person's Chief Executive Officer, Chief
Financial Officer or Chief Accounting Officer or its Vice President.

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

     "144A Security Legend" means the legend set forth in Section 2.06(g)(iv)
which is required to be placed on all Series A Securities that are 144A Global
Securities or Definitive Securities sold to QIBs pursuant to Rule 144A.

     "Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. Such counsel may be an employee of or counsel to the
Company, the Guarantor or the Trustee.

     "Participant" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to DTC, shall include Euroclear and
Clearstream).

     "Participating Broker-Dealer" means any broker-dealer that is the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of Series B
Securities received by such broker-dealer in the Exchange Offer.

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

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

                                        3
<PAGE>

     "Purchase Agreement" means the Purchase Agreement, dated August 15, 2002,
among the Company, the Guarantors and the Initial Purchaser.

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

     "Redemption Date," when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.

     "Redemption Price" means the price at which the Securities may be redeemed,
as set forth in paragraphs 4 and 5 of the form of Securities, as applicable.

     "Registration Rights Agreement" means that certain Registration Rights
Agreement, dated August 22, 2002, among the Company, the Guarantors and the
Initial Purchaser relating to the Original Securities.

     "Regulation S" means Regulation S promulgated under the Securities Act, as
such may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.

     "Regulation S Global Security" means a Regulation S Temporary Global
Security or Regulation S Permanent Global Security, as appropriate.

     "Regulation S Permanent Global Security" means a permanent global Security
substantially in the form of Exhibit A hereto bearing the Global Security Legend
and the Private Placement Legend and deposited with or on behalf of and
registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Regulation S
Temporary Global Security upon expiration of the Distribution Compliance Period.

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

     "Regulation S Temporary Global Security Legend" means the legend set forth
in Section 2.06(g)(iii) which is required to be placed on all Regulation S
Temporary Global Securities issued under this Indenture.

     "Responsible Officer" means, when used with respect to the Trustee, any
officer assigned by the Trustee to administer corporate trust matters or to whom
any corporate trust matter is referred because of such person's knowledge of and
familiarity with the particular subject and who shall have direct responsibility
for the administration of this Indenture.

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

     "Restricted Global Security" means a Global Security bearing the Private
Placement Legend.

     "Restricted Securities" means "restricted securities" as defined in Rule
144(a)(3) under the Securities Act; provided that the Trustee shall be entitled
to request and conclusively rely upon an Opinion of Counsel with respect to
whether any Security is a Restricted Security.

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

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

     "Rule 903" means Rule 903 promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.

                                        4
<PAGE>

     "Rule 904" means Rule 904 promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.

     "Sale and Lease-Back Transaction" means any arrangement with any Person
providing for the leasing by the Bermuda Guarantor or any Subsidiary of any
property, whereby such property had been sold or transferred by the Bermuda
Guarantor or any Subsidiary to such Person.

     "SEC" means the Securities and Exchange Commission.

     "Securities" means the Series A Securities and the Series B Securities.

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

     "Securities Custodian" means the Trustee, as custodian on behalf of the
Depositary with respect to the Securities in global form, or any successor
entity thereto.

     "Series A Securities" has the meaning set forth in the second paragraph of
this instrument.

     "Series B Securities" has the meaning set forth in the second paragraph of
this instrument.

     "Shelf Registration" means the shelf registration pursuant to a Shelf
Registration Statement.

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

     "Stated Maturity" means, with respect to any Security, the date specified
in such Security as the fixed date on which the principal of such Security is
due and payable.

     "Subsidiary" means a corporation, partnership or other entity more than 50%
of the outstanding voting securities of which is owned, directly or indirectly,
by the Bermuda Guarantor or one or more other Subsidiaries, or by the Bermuda
Guarantor and one or more other Subsidiaries. For purposes of this definition,
"voting securities" means securities which ordinarily have voting power for the
election of a Board of Directors, whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.

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

     "TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C. Sections
77aaa-77bbbb), as in effect on the Issue Date.

     "Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean the
successor serving hereunder.

     "U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America for the payment of which the full faith and credit of the United States
of America is pledged.

     "U.S. Guarantor" means the Person named as the "U.S. Guarantor" in the
first paragraph of this instrument until a successor Person shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"U.S. Guarantor" shall mean such successor Person.

     "U.S. Person" means a "U.S. person" as defined in Rule 902(k) under the
Securities Act.

     "Unrestricted Definitive Security" means a Definitive Security that does
not bear and is not required to bear the Private Placement Legend.

     "Unrestricted Global Security" means a permanent global Security
substantially in the form of Exhibit A attached hereto that bears the Global
Security Legend and that has the "Schedule of

                                        5
<PAGE>

Exchanges of Securities" attached thereto and that is deposited with or on
behalf of and registered in the name of the Depositary, representing Securities
that do not bear the Private Placement Legend.

     SECTION 1.02.  Other Definitions.

<Table>
<Caption>
                                                              DEFINED IN
TERM                                                           SECTION
----                                                          ----------
<S>                                                           <C>
"Additional Amounts"........................................      3.08
"Agent Members".............................................      2.01(b)
"Authorized Agent"..........................................     11.19
"Covenant Defeasance".......................................      7.01(c)
"Debt"......................................................      3.07
"DTC".......................................................      2.03
"Event of Default"..........................................      5.01
"Excluded Holder"...........................................      3.08
"Guarantees"................................................      9.01(a)
"Indenture Obligations".....................................      9.01(a)
"Judgment Currency".........................................     11.12
"mortgage" or "mortgages"...................................      3.07
"Original Securities".......................................      2.02
"Paying Agent"..............................................      2.03
"Registrar".................................................      2.03
"Territory".................................................      3.08
</Table>

     SECTION 1.03.  Incorporation by Reference of Trust Indenture Act.

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

        "commission" means the SEC.

        "indenture securities" means the Securities.

        "indenture security holder" means a Holder.

        "indenture to be qualified" means this Indenture.

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

        "obligor" on the indenture securities means the Company and the
Guarantor.

     All other terms used in this Indenture, and not otherwise defined herein,
that are defined by the TIA, defined by a TIA reference to another statute or
defined by an SEC rule under the TIA have the meanings so assigned to them.

     SECTION 1.04.  Rules of Construction.  Unless the context otherwise
requires: (1) a term has the meaning assigned to it; (2) an accounting term not
otherwise defined has the meaning assigned to it in accordance with GAAP; (3)
"or" is not exclusive; (4) words in the singular include the plural, and in the
plural include the singular; (5) words implying any gender shall apply to all
genders; (6) the term "merger" includes a statutory compulsory share exchange
and a conversion of a corporation into a limited liability company, a
partnership or other entity and vice versa and (7) provisions apply to
successive events and transactions.

                                        6
<PAGE>

                                   ARTICLE II

                                 THE SECURITIES

     SECTION 2.01.  Form and Dating.

     (a)  General.  The Securities, any notations thereon relating to the
Guarantees and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A to this Indenture, the terms of which are
hereby incorporated into this Indenture. The Securities may have notations,
legends or endorsements required by law, securities exchange rule, the Company's
certificate of incorporation, memorandum of association, articles of
association, other organizational documents, agreements to which the Company is
subject, if any, or usage, provided that any such notation, legend or
endorsement is in a form acceptable to the Company. Each Security shall be dated
the date of its authentication. The Securities shall be in registered form
without coupons and only in denominations of $1,000 and any integral multiples
thereof. The terms and provisions contained in the Securities shall constitute,
and are hereby expressly made, a part of this Indenture and, to the extent
applicable, the Company, the Guarantors and the Trustee, by their execution and
delivery of this Indenture, expressly agree to such terms and provisions and to
be bound thereby.

     (b)  Global Securities.  Original Securities offered and sold to QIBs in
reliance on Rule 144A as provided in the Purchase Agreement shall be issued
initially in the form of one or more Global Securities in definitive, fully
registered form without interest coupons and bearing the Global Security Legend
and Private Placement Legend, which shall be deposited on behalf of the
purchasers of the Original Securities represented thereby with the Trustee, as
custodian for the Depositary (or with such other custodian as the Depositary may
direct), and registered in the name of the Depositary or a nominee of the
Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the Global Securities
may from time to time be increased or decreased by adjustments made on the
records of the Trustee and the Depositary or its nominee as hereinafter
provided. Any endorsement of a Global Security to reflect the amount of any
increase or decrease in the aggregate principal amount of outstanding Securities
represented thereby shall be made by the Trustee or the Securities Custodian, at
the direction of the Trustee, in accordance with instructions given by the
Holder thereof as required by Section 2.06. Members of, or Participants in, the
Depositary ("Agent Members") shall have no rights under this Indenture with
respect to any Global Security held on their behalf by the Depositary or by the
Trustee as the custodian of the Depositary or under such Global Security, and
the Depositary may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner of such Global Security for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and its Agent Members, the
operation of customary practices of such Depositary governing the exercise of
the rights of a holder of a beneficial interest in any Global Security.

     (c)  Temporary Global Securities.  Securities offered and sold in reliance
on Regulation S, if any, shall be issued initially in the form of the Regulation
S Temporary Global Security and bearing the Regulation S Temporary Global
Security Legend, which shall be deposited on behalf of the purchasers of the
Securities represented thereby with the Trustee, as custodian for the
Depositary, and registered in the name of the Depositary or the nominee of the
Depositary for the accounts of designated agents holding on behalf of Euroclear
or Clearstream, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The Distribution Compliance Period shall be terminated
upon the receipt by the Trustee of (i) a written certificate from the
Depositary, together with copies of certificates from Euroclear and Clearstream
certifying that they have received certification of non-U.S. beneficial
ownership of 100% of the aggregate principal amount of the Regulation S
Temporary Global Security (except to the extent of any beneficial owners thereof
who acquired an interest therein during the Distribution Compliance Period
pursuant to another exemption from registration under the Securities Act and who
will take delivery of a beneficial ownership interest in a 144A Global Security
bearing a Private Placement Legend, all as contemplated by Section 2.06(g)(i)),
and (ii) an Officers' Certificate from the Company. Following the

                                        7
<PAGE>

termination of the Distribution Compliance Period, beneficial interests in the
Regulation S Temporary Global Security shall be exchanged for beneficial
interests in Regulation S Permanent Global Securities pursuant to the Applicable
Procedures. Simultaneously with the authentication of Regulation S Permanent
Global Securities, the Trustee shall cancel the Regulation S Temporary Global
Security. The aggregate principal amount of the Regulation S Temporary Global
Security and the Regulation S Permanent Global Securities may from time to time
be increased or decreased by adjustments made on the records of the Trustee and
the Depositary or its nominee, as the case may be, in connection with transfers
of interest as hereinafter provided.

     (d)  Euroclear and Clearstream Procedures Applicable.  The provisions of
the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of
Clearstream" and "Customer Handbook" of Cedel Bank (as adopted by Clearstream)
and any successor, alternative or additional procedures from time to time
adopted by Euroclear or Clearstream shall be applicable to transfers of
beneficial interests in the Regulation S Temporary Global Security and the
Regulation S Permanent Global Securities that are held by Participants through
Euroclear or Clearstream.

     (e)  Certificated Securities.  Except as provided in this Section 2.01 or
Section 2.06, owners of beneficial interests in Global Securities will not be
entitled to receive physical delivery of Definitive Securities.

     SECTION 2.02.  Execution and Authentication.  One Officer of the Company
shall sign the Securities on behalf of the Company by manual or facsimile
signature. The Company's seal may be (but shall not be required to be)
impressed, affixed, imprinted or reproduced on the Securities and may be in
facsimile form.

     If an Officer of the Company whose signature is on this Indenture or a
Security no longer holds that office at the time the Trustee authenticates such
Security or at any time thereafter, the Security shall be valid nevertheless.

     A Security shall not be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose until authenticated by the manual signature
of an authorized signatory of the Trustee, which signature shall be conclusive
evidence that the Security has been authenticated under this Indenture.

     The Trustee shall authenticate (i) for original issue on the Issue Date
Series A Securities in the aggregate principal amount of $225,000,000 (the
"Original Securities"), (ii) the Series B Securities for original issue,
pursuant to the Exchange Offer, for a like principal amount of Series A
Securities and (iii) any amount of additional Securities specified by the
Company after the Issue Date, in each case, upon a written order of the Company
signed by one Officer of the Company; provided, however, that no additional
Securities may be issued or guaranteed if a Default or Event of Default shall
have occurred and be continuing. Such order shall specify (a) the amount of the
Securities to be authenticated and the date of original issue thereof, and (b)
whether the Securities are Series A Securities or Series B Securities. In
authenticating such Securities, the Trustee shall be entitled to receive, and
shall be entitled to rely upon, an Opinion of Counsel substantially to the
effect that such Securities, when authenticated and delivered by the Trustee and
issued by the Company in the manner and subject to any conditions specified in
such Opinion of Counsel, will constitute valid and legally binding obligations
of the Company enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.

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

     The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Securities. Unless limited by the terms of such appointment, an
authenticating agent may authenticate

                                        8
<PAGE>

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

     The Original Securities, the Series B Securities and any such additional
Securities shall each be a single series for all purposes of this Indenture,
including, without limitation, waivers, amendments, redemptions and offers to
purchase.

     SECTION 2.03.  Registrar and Paying Agent.  The Company shall maintain an
office or agency where Securities may be presented for registration of transfer
or exchange ("Registrar") and an office or agency where Securities may be
presented for payment ("Paying Agent"). The Registrar shall keep a register of
the Securities and of their transfer and exchange. The Company may appoint one
or more co-registrars and one or more additional paying agents. The term
"Registrar" includes any co-registrar and the term "Paying Agent" includes any
additional paying agent.

     The Company shall enter into an appropriate agency agreement with any
Registrar or Paying Agent not a party to this Indenture. The agreement shall
implement the provisions of this Indenture that relate to such Agent. The
Company shall notify the Trustee of the name and address of any Agent not a
party to this Indenture. The Company may change any Paying Agent or Registrar
without notice to any Holder. If the Company fails to appoint or maintain
another entity as Registrar or Paying Agent, the Trustee shall act as such. The
Guarantor or any of its Subsidiaries may act as Paying Agent or Registrar.

     The Company initially appoints the Trustee as Registrar and Paying Agent.

     The Company initially appoints The Depository Trust Company ("DTC") to act
as Depositary with respect to each Global Security.

     SECTION 2.04.  Paying Agent to Hold Money in Trust.  The Company shall
require each Paying Agent other than the Trustee to agree in writing that the
Paying Agent will hold in trust for the benefit of Holders or the Trustee all
money held by the Paying Agent for the payment of principal of or premium, if
any, Liquidated Damages, if any, Additional Amounts, if any, or interest on the
Securities, whether such money shall have been paid to it by the Company or the
Guarantor, and will notify the Trustee of any default by the Company or the
Guarantor in making any such payment. While any such default continues, the
Trustee may require a Paying Agent to pay all money held by it to the Trustee
and to account for any funds disbursed. The Company at any time may require a
Paying Agent to pay all money held by it to the Trustee and to account for any
funds disbursed. Upon payment over to the Trustee and upon accounting for any
funds disbursed, the Paying Agent (if other than the Company or a Subsidiary of
the Company) shall have no further liability for the money. If the Company or a
Subsidiary of the Company acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Holders all money held by it as
Paying Agent.

     SECTION 2.05.  Holder Lists.  The Trustee shall preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of Holders and shall otherwise comply with TIA Section
312(a). If the Trustee is not the Registrar, the Company shall furnish to the
Trustee at least seven Business Days before each Interest Payment Date, and at
such other times as the Trustee may request in writing, a list in such form and
as of such date as the Trustee may reasonably require of the names and addresses
of Holders, and the Company shall otherwise comply with TIA Section 312(a).

     SECTION 2.06.  Transfer and Exchange.

     (a)  Transfer and Exchange of Global Securities.  A Global Security may not
be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. All Global
Securities will be exchanged by the Company for Definitive Securities if (i) the
Trustee receives notice from the Depositary that it is unwilling or unable to
continue to act as Depositary or that it is no longer a clearing agency
registered

                                        9
<PAGE>

under the Exchange Act and, in either case, a successor Depositary is not
appointed by the Company within 90 days after the date of such notice from the
Depositary or (ii) the Company in its sole discretion determines that the Global
Securities (in whole but not in part) should be exchanged for Definitive
Securities and delivers a written notice to such effect to the Trustee; provided
that in no event shall the Regulation S Temporary Global Security be exchanged
by the Company for Definitive Securities prior to (x) the expiration of the
Distribution Compliance Period and (y) the receipt by the Registrar of any
certificates required pursuant to Rule 903(c)(3)(ii)(B) under the Securities
Act. Upon the occurrence of either of the preceding events in (i) or (ii) above,
Definitive Securities shall be issued in such names as the Depositary shall
instruct the Trustee. Global Securities also may be exchanged or replaced, in
whole or in part, as provided in Sections 2.07 and 2.10. Except as provided in
this Section 2.06(a) and in Section 2.06(b)(ii) and Section 2.06(c) for the
exchange or transfer of Global Securities for Definitive Securities, every
Security authenticated and delivered in exchange for, or in lieu of, a Global
Security or any portion thereof, pursuant to this Section 2.06 or Section 2.07
or 2.10, shall be authenticated and delivered in the form of, and shall be, a
Global Security. A Global Security may not be exchanged for another Security
other than as provided in this Section 2.06(a); however, beneficial interests in
a Global Security may be transferred and exchanged as provided in Section
2.06(b), (c) or (f).

     (b)  Transfer and Exchange of Beneficial Interests in the Global
Securities.  The transfer and exchange of beneficial interests in the Global
Securities shall be effected through the Depositary, in accordance with the
provisions of this Indenture and the Applicable Procedures. Beneficial interests
in the Restricted Global Securities shall be subject to restrictions on transfer
comparable to those set forth herein to the extent required by the Securities
Act. Transfers of beneficial interests in the Global Securities also shall
require compliance with either subparagraph (i) or (ii) below, as applicable, as
well as one or more of the other following subparagraphs, as applicable:

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

          (ii)  All Other Transfers and Exchanges of Beneficial Interests in
     Global Securities.  In connection with all transfers and exchanges of
     beneficial interests that are not subject to Section 2.06(b)(i) above, the
     transferor of such beneficial interest must deliver to the Depositary
     either (A)(1) a written order from a Participant or an Indirect Participant
     given to the Depositary in accordance with the Applicable Procedures
     directing the Depositary to credit or cause to be credited a beneficial
     interest in another Global Security in an amount equal to the beneficial
     interest to be transferred or exchanged and (2) instructions given in
     accordance with the Applicable Procedures containing information regarding
     the Participant account to be credited with such increase or (B)(1) a
     written order from a Participant or an Indirect Participant given to the
     Depositary in accordance with the Applicable Procedures directing the
     Depositary to cause to be issued a Definitive Security in an amount equal
     to the beneficial interest to be transferred or exchanged and (2)
     instructions given by the Depositary to the Registrar containing
     information regarding the Person in whose name such Definitive Security
     shall be registered to effect the transfer or exchange referred to in (1)
     above; provided that in no event shall Definitive Securities be issued upon
     the transfer or exchange of beneficial interests in the Regulation S
     Temporary Global Security prior to (x) the expiration of the Distribution
     Compliance Period and (y) the receipt by the Registrar of any certificates
     required pursuant to Rule 903 under the Securities Act. Upon consummation
     of the Exchange Offer by the Company in accordance with Section 2.06(f),
     the requirements of this

                                        10
<PAGE>

     Section 2.06(b)(ii) shall be deemed to have been satisfied upon receipt by
     the Registrar of the instructions contained in the Letter of Transmittal
     delivered by the Holder of such beneficial interests in the Restricted
     Global Securities. Upon satisfaction of all of the requirements for
     transfer or exchange of beneficial interests in Global Securities contained
     in this Indenture and the Securities or otherwise applicable under the
     Securities Act, the Trustee shall adjust the principal amount of the
     relevant Global Security(s) pursuant to Section 2.06(h).

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

             (A) if the transferee will take delivery in the form of a
        beneficial interest in the 144A Global Security, then the transferor
        must deliver a certificate in the form of Exhibit C hereto, including
        the certifications in item (1) thereof; and

             (B) if the transferee will take delivery in the form of a
        beneficial interest in the Regulation S Temporary Global Security or the
        Regulation S Permanent Global Security, then the transferor must deliver
        a certificate in the form of Exhibit C hereto, including the
        certifications in item (2) thereof.

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

             (A) such exchange or transfer is effected pursuant to the Exchange
        Offer in accordance with the Registration Rights Agreement and the
        holder of such beneficial interest, in the case of an exchange, or the
        transferee, in the case of a transfer, makes the certifications required
        by the applicable Letter of Transmittal;

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

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

             (D) the Registrar receives the following:

                (1) if the holder of such beneficial interest in a Restricted
           Global Security proposes to exchange such beneficial interest for a
           beneficial interest in an Unrestricted Global Security, a certificate
           from such holder in the form of Exhibit D, including the
           certifications in item (1)(a) thereof; or

                (2) if the holder of such beneficial interest in a Restricted
           Global Security proposes to transfer such beneficial interest to a
           Person who shall take delivery thereof in the form of a beneficial
           interest in an Unrestricted Global Security, a certificate from such
           holder in the form of Exhibit C, including the certifications in item
           (4) thereof;

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

          If any such transfer is effected pursuant to subparagraph (B) or (D)
     above at a time when an Unrestricted Global Security has not yet been
     issued, the Company shall issue and, upon receipt of a

                                        11
<PAGE>

     written authentication order in accordance with Section 2.02, the Trustee
     shall authenticate one or more Unrestricted Global Securities in an
     aggregate principal amount equal to the aggregate principal amount of
     beneficial interests transferred pursuant to subparagraph (B) or (D) above.

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

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

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

             (A) if the holder of such beneficial interest in a Restricted
        Global Security proposes to exchange such beneficial interest for a
        Restricted Definitive Security, a certificate from such holder in the
        form of Exhibit D, including the certifications in item (2)(a) thereof;

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

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

             (D) if such beneficial interest is being transferred pursuant to an
        exemption from the registration requirements of the Securities Act in
        accordance with Rule 144 under the Securities Act, a certificate to the
        effect set forth in Exhibit C, including the certifications in item
        (3)(a) thereof;

             (E) if such beneficial interest is being transferred to the Bermuda
        Guarantor or any of its Subsidiaries, a certificate to the effect set
        forth in Exhibit C, including the certifications in item (3)(b) thereof;
        or

             (F) if such beneficial interest is being transferred pursuant to an
        effective registration statement under the Securities Act, a certificate
        to the effect set forth in Exhibit C, including the certifications in
        item (3)(c) thereof,

     the Trustee shall cause the aggregate principal amount of the applicable
     Global Security to be reduced accordingly pursuant to Section 2.06(h), and
     the Company shall execute and the Trustee shall authenticate and deliver to
     the Person designated in the instructions a Definitive Security in the
     appropriate principal amount. Any Definitive Security issued in exchange
     for a beneficial interest in a Restricted Global Security pursuant to this
     Section 2.06(c) shall be registered in such name or names and in such
     authorized denomination or denominations as the holder of such beneficial
     interest shall instruct the Registrar through instructions from the
     Depositary and the Participant or Indirect Participant. The Trustee shall
     deliver such Definitive Securities to the Persons in whose names such
     Securities are so registered. Any Definitive Security issued in exchange
     for a beneficial interest in a Restricted Global Security pursuant to this
     Section 2.06(c)(i) shall bear the Private Placement Legend and shall be
     subject to all restrictions on transfer contained therein.

          (ii)  Notwithstanding Sections 2.06(c)(i)(A) and (C), a beneficial
     interest in the Regulation S Temporary Global Security may not be exchanged
     for a Definitive Security or transferred to a Person who takes delivery
     thereof in the form of a Definitive Security prior to (x) the expiration of
     the Distribution Compliance Period and (y) the receipt by the Registrar of
     any certificates required pursuant to Rule 903(c)(3)(ii)(B) under the
     Securities Act, except in the case of a transfer pursuant

                                        12
<PAGE>

     to an exemption from the registration requirements of the Securities Act
     other than Rule 903 or Rule 904.

          (iii)  Beneficial Interests in Restricted Global Securities to
     Unrestricted Definitive Securities.  A holder of a beneficial interest in a
     Restricted Global Security may exchange such beneficial interest for an
     Unrestricted Definitive Security or may transfer such beneficial interest
     to a Person who takes delivery thereof in the form of an Unrestricted
     Definitive Security only if:

             (A) such exchange or transfer is effected pursuant to the Exchange
        Offer in accordance with the Registration Rights Agreement and the
        holder of such beneficial interest, in the case of an exchange, or the
        transferee, in the case of a transfer, makes the certifications required
        by the applicable Letter of Transmittal;

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

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

             (D) the Registrar receives the following:

                (1) if the holder of such beneficial interest in a Restricted
           Global Security proposes to exchange such beneficial interest for a
           Definitive Security that does not bear the Private Placement Legend,
           a certificate from such holder in the form of Exhibit D, including
           the certifications in item (1)(b) thereof; or

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

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

          (iv)  Beneficial Interests in Unrestricted Global Securities to
     Unrestricted Definitive Securities. If any holder of a beneficial interest
     in an Unrestricted Global Security proposes to exchange such beneficial
     interest for a Definitive Security or to transfer such beneficial interest
     to a Person who takes delivery thereof in the form of a Definitive
     Security, then, upon satisfaction of the conditions set forth in Section
     2.06(b)(ii), the Trustee shall cause the aggregate principal amount of the
     applicable Global Security to be reduced accordingly pursuant to Section
     2.06(h), and the Company shall execute and the Trustee shall authenticate
     and deliver to the Person designated in the instructions a Definitive
     Security in the appropriate principal amount. Any Definitive Security
     issued in exchange for a beneficial interest pursuant to this Section
     2.06(c)(iv) shall be registered in such name or names and in such
     authorized denomination or denominations as the holder of such beneficial
     interest shall instruct the Registrar through instructions from the
     Depositary and the Participant or Indirect Participant. The Trustee shall
     deliver such Definitive Securities to the Persons in whose names such
     Securities are so registered. Any Definitive Security issued in exchange
     for a beneficial interest pursuant to this Section 2.06(c)(iv) shall not
     bear the Private Placement Legend.

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

          (i)  Restricted Definitive Securities to Beneficial Interests in
     Restricted Global Securities.  If any Holder of a Restricted Definitive
     Security proposes to exchange such Security for a beneficial interest in a
     Restricted Global Security or to transfer such Restricted Definitive
     Securities to a Person who

                                        13
<PAGE>

     takes delivery thereof in the form of a beneficial interest in a Restricted
     Global Security, then, upon receipt by the Registrar of the following
     documentation:

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

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

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

             (D) if such Restricted Definitive Security is being transferred
        pursuant to an exemption from the registration requirements of the
        Securities Act in accordance with Rule 144 under the Securities Act, a
        certificate to the effect set forth in Exhibit C, including the
        certifications in item (3)(a) thereof;

             (E) if such Restricted Definitive Security is being transferred to
        the Parent or any of its Subsidiaries, a certificate to the effect set
        forth in Exhibit C, including the certifications in item (3)(b) thereof;
        or

             (F) if such Restricted Definitive Security is being transferred
        pursuant to an effective registration statement under the Securities
        Act, a certificate to the effect set forth in Exhibit C, including the
        certifications in item (3)(c) thereof, the Trustee shall cancel the
        Restricted Definitive Security, increase or cause to be increased the
        aggregate principal amount of, in the case of clause (A) above, the
        appropriate Restricted Global Security, in the case of clause (B) above,
        the 144A Global Security, and in the case of clause (C) above, the
        Regulation S Global Security.

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

             (A) such exchange or transfer is effected pursuant to the Exchange
        Offer in accordance with the Registration Rights Agreement and the
        Holder, in the case of an exchange, or the transferee, in the case of a
        transfer, makes the certifications required by the applicable Letter of
        Transmittal;

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

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

             (D) the Registrar receives the following:

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

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

                                        14
<PAGE>

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

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

          (iii)  Unrestricted Definitive Securities to Beneficial Interests in
     Unrestricted Global Securities. A Holder of an Unrestricted Definitive
     Security may exchange such Security for a beneficial interest in an
     Unrestricted Global Security or transfer such Unrestricted Definitive
     Security to a Person who takes delivery thereof in the form of a beneficial
     interest in an Unrestricted Global Security at any time. Upon receipt of a
     request for such an exchange or transfer, the Trustee shall cancel the
     applicable Unrestricted Definitive Security and increase or cause to be
     increased the aggregate principal amount of one of the Unrestricted Global
     Securities. If any such exchange or transfer from a Definitive Security to
     a beneficial interest is effected pursuant to subparagraphs (ii)(B),
     (ii)(D) or (iii) above at a time when an Unrestricted Global Security has
     not yet been issued, the Company shall issue and, upon receipt of a written
     authentication order in accordance with Section 2.02, the Trustee shall
     authenticate one or more Unrestricted Global Securities in an aggregate
     principal amount equal to the principal amount of Definitive Securities so
     transferred.

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

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

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

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

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

          (ii)  Restricted Definitive Securities to Unrestricted Definitive
     Securities.  Any Restricted Definitive Security may be exchanged by the
     Holder thereof for an Unrestricted Definitive Security or transferred to a
     Person or Persons who take delivery thereof in the form of an Unrestricted
     Definitive Security if:

             (A) such exchange or transfer is effected pursuant to the Exchange
        Offer in accordance with the Registration Rights Agreement and the
        Holder, in the case of an exchange, or the transferee, in the case of a
        transfer, makes the certifications required by the applicable Letter of
        Transmittal;

                                        15
<PAGE>

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

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

             (D) the Registrar receives the following:

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

                (2) if the Holder of such Restricted Definitive Security
           proposes to transfer such Security to a Person who shall take
           delivery thereof in the form of an Unrestricted Definitive Security,
           a certificate from such Holder in the form of Exhibit C, including
           the certifications in item (4) thereof; and, in each such case set
           forth in this subparagraph (D), if the Registrar so requests, an
           Opinion of Counsel in form reasonably acceptable to the Registrar to
           the effect that such exchange or transfer is in compliance with the
           Securities Act and that the restrictions on transfer contained herein
           and in the Private Placement Legend are no longer required in order
           to maintain compliance with the Securities Act.

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

     (f)  Exchange Offer.  Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall issue and,
upon receipt of an authentication order in accordance with Section 2.02, the
Trustee shall authenticate (i) one or more Unrestricted Global Securities in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Securities tendered for acceptance by Persons
that make the certifications required by the applicable Letters of Transmittal,
and accepted for exchange in the Exchange Offer. Concurrently with the issuance
of such Securities, the Trustee shall cause the aggregate principal amount of
the applicable Restricted Global Securities to be reduced accordingly, and the
Company shall execute and the Trustee shall authenticate and deliver to the
Persons designated by the Holders of Definitive Securities so accepted
Definitive Securities in the appropriate principal amounts.

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

          (i)  Private Placement Legend.

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

        THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE
        SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE
        SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS
        SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
        SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED
        OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
        EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGIS-

                                        16
<PAGE>

        TRATION. BY ITS ACQUISITION OF THIS SECURITY OR OF A BENEFICIAL INTEREST
        HEREIN, THE HOLDER:

             1.  AGREES, ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT
        FOR WHICH IT HAS PURCHASED SECURITIES, THAT IT WILL OFFER, SELL OR
        OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE DATE (THE "RESALE
        RESTRICTION TERMINATION DATE") THAT IS TWO YEARS AFTER THE LATER OF THE
        ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH EITHER THE COMPANY
        OR ANY OF ITS AFFILIATES WAS THE OWNER OF THIS SECURITY (OR ANY
        PREDECESSOR OF SUCH SECURITY), ONLY (A) TO NABORS INDUSTRIES LTD. OR ANY
        OF ITS SUBSIDIARIES, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS
        BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
        SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT
        REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER, AS DEFINED IN
        RULE 144A, THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
        QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER
        IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES
        THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S,
        OR (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
        REQUIREMENTS OF THE SECURITIES ACT AND, IN EACH OF THE CASES ABOVE, IN
        ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
        UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION; AND

             2.  AGREES THAT, BEFORE THE HOLDER OFFERS, SELLS OR OTHERWISE
        TRANSFERS THIS SECURITY, THE COMPANY AND THE REGISTRAR MAY REQUIRE THE
        HOLDER OF THIS SECURITY TO DELIVER A WRITTEN OPINION OF COUNSEL,
        CERTIFICATIONS AND/OR OTHER INFORMATION THAT THEY REASONABLY REQUIRE TO
        CONFIRM THAT SUCH PROPOSED TRANSFER IS BEING MADE PURSUANT TO AN
        EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

        AS USED IN THIS SECURITY, THE TERMS "OFFSHORE TRANSACTION," "U.S.
        PERSON" AND "UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM WITHIN
        REGULATION S.

        THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE
        RESALE RESTRICTION TERMINATION DATE.

        BY ITS ACQUISITION OF THIS SECURITY THE HOLDER THEREOF WILL BE DEEMED TO
        HAVE REPRESENTED AND WARRANTED THAT EITHER (I) NO PORTION OF THE ASSETS
        USED BY SUCH HOLDER TO ACQUIRE AND HOLD THIS SECURITY CONSTITUTES THE
        ASSETS OF AN EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO TITLE I OF THE
        U.S. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
        ("ERISA"), OF PLANS, INDIVIDUAL RETIREMENT ACCOUNTS OR OTHER
        ARRANGEMENTS THAT ARE SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL
        REVENUE CODE OF 1986, AS AMENDED (THE "CODE") OR PROVISIONS UNDER ANY
        FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE
        SIMILAR TO SUCH PROVISIONS OR ERISA OR THE CODE ("SIMILAR LAWS"), OR OF
        AN ENTITY WHOSE UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE "PLAN
        ASSETS" OF SUCH PLANS, ACCOUNTS OR ARRANGEMENTS, OR (II) THE PURCHASE
        AND HOLDING OF THIS SECURITY WILL NOT CONSTITUTE A NON-EXEMPT PROHIBITED
        TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975

                                        17
<PAGE>

        OF THE CODE OR A SIMILAR VIOLATION UNDER ANY APPLICABLE SIMILAR LAWS.

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

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

        UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
        DEFINITIVE FORM, THIS SECURITY 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 SHALL
        ACT AS THE DEPOSITARY UNTIL A SUCCESSOR SHALL BE APPOINTED BY THE
        COMPANY AND THE REGISTRAR. UNLESS THIS CERTIFICATE IS PRESENTED BY AN
        AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER
        STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY OR ITS AGENT FOR
        REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
        ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY
        BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
        MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN
        AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
        HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
        AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

          (iii)  Regulation S Temporary Global Security Legend.  The Regulation
     S Temporary Global Security shall bear a legend in substantially the
     following form:

        THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL SECURITY, AND
        THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED
        SECURITIES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN).
        NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S
        TEMPORARY GLOBAL SECURITY SHALL BE ENTITLED TO RECEIVE PAYMENT OF
        INTEREST HEREON.

          (iv)  144A Security Legend.  Any Series A Security that is a 144A
     Global Security or a Definitive Security sold to QIBs pursuant to Rule 144A
     shall bear a legend in substantially the following form:

        EACH PURCHASER OF THE SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF
        THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
        SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

     (h)  Cancellation and/or Adjustment of Global Securities.  At such time as
all beneficial interests in a particular Global Security have been exchanged for
Definitive Securities or a particular Global Security has been redeemed,
repurchased or canceled in whole and not in part, each such Global Security
shall be returned to or retained and canceled by the Trustee in accordance with
Section 2.11. At any time prior to such cancellation, if any beneficial interest
in a Global Security is exchanged for or transferred to a Person who will take
delivery thereof in the form of a beneficial interest in another Global Security
or for Definitive Securities, the principal amount of Securities represented by
such Global Security shall be

                                        18
<PAGE>

reduced accordingly and an endorsement shall be made on such Global Security by
the Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Security, such other Global Security shall be increased
accordingly and an endorsement shall be made on such Global Security by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
increase.

          (i)  General Provisions Relating to Transfers and Exchanges.

          (ii) To permit registrations of transfers and exchanges, the Company
     shall execute and the Trustee shall authenticate Global Securities and
     Definitive Securities upon the Company's order or at the Registrar's
     request.

          (iii) No service charge shall be made to a holder of a beneficial
     interest in a Global Security or to a Holder of a Definitive Security for
     any registration of transfer or exchange, but the Company may require
     payment of a sum sufficient to cover any transfer tax or similar
     governmental charge payable in connection therewith (other than any such
     transfer taxes or similar governmental charge payable upon exchange or
     transfer pursuant to Sections 2.10, 8.05 and 10.06).

          (iv) The Registrar shall not be required (A) to register the transfer
     of or to exchange any Securities during a period beginning at the opening
     of business 15 days before the day of the mailing of notice of redemption
     under Section 10.03 and ending at the close of business on such day, or (B)
     to register the transfer of or exchange any Security selected for
     redemption in whole or in part, except the unredeemed portion of any
     Security being redeemed in part.

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

          (vi) The Company shall not be required (A) to issue, to register the
     transfer of or to exchange any Securities during a period beginning at the
     opening of business 15 days before the day of the mailing of notice of
     redemption under Section 10.03 and ending at the close of business on such
     day, or (B) to register the transfer of or to exchange any Security so
     selected for redemption in whole or in part, except the unredeemed portion
     of any Security being redeemed in part.

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

          (viii) All certifications, certificates and Opinions of Counsel
     required to be submitted to the Registrar pursuant to this Section 2.06 to
     effect a registration of transfer or exchange may be submitted by
     facsimile.

     SECTION 2.07.  Replacement Securities.  If a mutilated Security is
surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 of the Uniform Commercial Code are met, such that the
Securityholder (a) satisfies the Company or the Trustee within a reasonable time
after such Securityholder has notice of such loss, destruction or wrongful
taking and the Registrar does not register a transfer prior to receiving such
notification, (b) makes such request to the Company or Trustee prior to the
Security being acquired by a protected purchaser as defined in Section 8-303 of
the Uniform Commercial Code (a "protected purchaser") and (c) satisfies any
other reasonable requirements of the Trustee. If required by the Trustee or the
Company, such Holder must furnish an indemnity bond that is sufficient in the
judgment of the Trustee and the Company to protect the Company, the Trustee, any
Agent or any authenticating agent from any loss which any of them may suffer if
a Security is replaced. The Company and the Trustee may charge for their
expenses in replacing a Security. If, after the delivery of such replacement
Security, a bona fide purchaser of the original Security in lieu of which such
replacement Security was issued presents

                                        19
<PAGE>

for payment or registration such original Security, the Trustee shall be
entitled to recover such replacement Security from the Person to whom it was
delivered or any Person taking therefrom, except a bona fide purchaser, and
shall be entitled to recover upon the security or indemnity provided therefor to
the extent of any loss, damage, cost or expense incurred by the Trustee or the
Company in connection therewith. Every replacement Security is a contractual
obligation of the Company.

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

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

     SECTION 2.08.  Outstanding Securities.  The Securities outstanding at any
time are all the Securities authenticated by the Trustee except for those
canceled by it, those delivered to it for cancellation, those reductions in the
interest in a Global Security effected by the Trustee hereunder and those
described in this Section 2.08 as not outstanding; provided, however, that in
determining whether the Holders of the requisite principal amount of outstanding
Securities are present at a meeting of Holders of Securities for quorum purposes
or have consented to or voted in favor of any request, demand, authorization,
direction, notice, consent, waiver, amendment or modification hereunder,
Securities held for the account of the Company or any of its Affiliates shall be
disregarded and deemed not to be outstanding, except that in determining whether
the Trustee shall be protected in making such a determination or relying upon
any such quorum, consent or vote, only Securities which a Responsible Officer of
the Trustee actually knows to be so owned shall be so disregarded.

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

     If the principal amount of any Security is considered paid under Section
3.01, it ceases to be outstanding and interest on it ceases to accrue.

     SECTION 2.09.  [Reserved.]

     SECTION 2.10.  Temporary Securities.  Until Definitive Securities are ready
for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
Definitive Securities, but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate Definitive Securities in
exchange for temporary Securities. Until so exchanged, temporary Securities
shall in all respects be entitled to the same benefits under this Indenture as
Definitive Securities.

     SECTION 2.11.  Cancellation.  The Company or the Guarantor at any time may
deliver Securities to the Trustee for cancellation. The Registrar and the Paying
Agent shall forward to the Trustee any Securities surrendered to them for
registration of transfer, exchange or payment. The Trustee shall cancel all
Securities surrendered for registration of transfer, exchange, payment,
replacement or cancellation. All canceled Securities held by the Trustee shall
be disposed of in accordance with the usual disposal procedures of the Trustee.
The Company may not issue new Securities to replace Securities that have been
paid or that have been delivered to the Trustee for cancellation.

     SECTION 2.12.  Defaulted Interest.  If the Company defaults in a payment of
interest on the Securities, it shall pay the defaulted interest in any lawful
manner plus, to the extent lawful, interest on the defaulted interest, in each
case at the rate provided in the Securities and in the manner provided in
Section 3.01. The Company may pay the defaulted interest to the Persons who are
Holders on a subsequent special record date. At least 15 days before any special
record date, the Company (or the Trustee, in the name of and at the expense of
the Company) shall mail to Holders a notice that states the special record date,
the related payment date and the amount of such interest to be paid.

     SECTION 2.13.  Persons Deemed Owners.  The Company, the Guarantors, the
Trustee, any Agent and any authenticating agent may treat the Person in whose
name any Security is registered as the owner

                                        20
<PAGE>

of such Security for the purpose of receiving payments of principal of or
premium, if any, Liquidated Damages, if any, Additional Amounts, if any, or
interest on such Security and for all other purposes. None of the Company, the
Guarantors, the Trustee, any Agent or any authenticating agent shall be affected
by any notice to the contrary.

     SECTION 2.14.  CUSIP Numbers.  The Company in issuing the Securities may
use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the "CUSIP" numbers.

                                  ARTICLE III

                                   COVENANTS

     SECTION 3.01.  Payment of Securities.  The Company shall pay the principal
of and premium, if any, Liquidated Damages, if any, Additional Amounts, if any,
and interest on the Securities on the dates and in the manner provided in the
Securities and in this Indenture. Principal, premium, if any, Liquidated
Damages, if any, Additional Amounts, if any, and interest shall be considered
paid on the date due if the Paying Agent, other than the Company or a Subsidiary
of the Company, holds by 11:00 a.m., Eastern time, on that date money deposited
by or on behalf of the Company designated for and sufficient to pay all
principal, premium, if any, Liquidated Damages, if any, Additional Amounts, if
any, and interest then due.

     To the extent lawful, the Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal, premium, if any, Liquidated Damages, if any, Additional Amounts, if
any, and interest (without regard to any applicable grace period) at a rate
equal to the then applicable interest rate on the Securities.

     Solely for purposes of disclosure pursuant to the Interest Act (Canada)
(and for no other purpose), the annual interest rate applicable to the
Securities, for any portion of any period of less than one year, will be the
percentage interest rate per annum stipulated in the Securities as to which the
calculation must be made, multiplied by the number of days in the calendar year
in which the applicable interest is paid, divided by 360.

     SECTION 3.02.  Maintenance of Office or Agency.  The Company will maintain,
in the Borough of Manhattan, The City of New York, an office or agency (which
may be an office of the Trustee, the Registrar or the Paying Agent) where
Securities may be presented for registration of transfer or exchange, where
Securities may be presented for payment and where notices and demands to or upon
the Company in respect of the Securities and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee.

     The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York for such purposes. The Company will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency. The Company hereby
designates the Corporate Trust Office of the Trustee as one such office or
agency of the Company in accordance with Section 2.03.

                                        21
<PAGE>

     SECTION 3.03.  SEC Reports; Financial Statements.

     (a) The Bermuda Guarantor covenants and agrees to file with the Trustee
copies, within 15 days after the Bermuda Guarantor is required to file the same
with the SEC, of the annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing as the SEC may from
time to time by rules and regulations prescribe) which the Bermuda Guarantor may
be required to file with the SEC pursuant to Section 13 or Section 15(d) of the
Exchange Act; or, if the Bermuda Guarantor is not required to file information,
documents or reports pursuant to either of such sections, then to file with the
Trustee and the SEC, in accordance with rules and regulations prescribed from
time to time by the SEC, such of the supplementary and periodic information,
documents and reports, if any, which may be required pursuant to Section 13 of
the Exchange Act, in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time in such rules and
regulations.

     (b) The Bermuda Guarantor covenants and agrees to file with the Trustee and
the SEC, in accordance with the rules and regulations prescribed from time to
time by the SEC, such additional information, documents and reports, if any,
with respect to compliance by the Bermuda Guarantor with the conditions and
covenants provided for in this Indenture as may be required from time to time by
such rules and regulations.

     (c) [Reserved.]

     (d) At any time when neither the Bermuda Guarantor nor the Company is
subject to Section 13 or 15(d) of the Exchange Act and the Securities are not
freely transferrable under the Securities Act as contemplated by the
Registration Rights Agreement, upon the request of a Holder, the Bermuda
Guarantor and the Company will promptly furnish or cause to be furnished the
information specified under Rule 144A(d)(4) of the Securities Act to such
Holder, or to a prospective purchaser of a Security designed by such Holder, in
order to permit compliance with Rule 144A under the Securities Act.

     SECTION 3.04.  Compliance Certificate.  The Company and the Guarantors
shall deliver to the Trustee, within 120 days after the end of each fiscal year
of the Company, a statement signed by two Officers of the Company (one of whom
shall be the Chief Executive Officer, Chief Financial Officer or Chief
Accounting Officer of the Company) and two Officers of each Guarantor (one of
whom shall be the Chief Executive Officer, Chief Financial Officer or Chief
Accounting Officer of such Guarantor), which statement need not constitute an
Officers' Certificate, complying with TIA Section 314(a)(4) and stating that in
the course of performance by the signing Officers of the Company and Officers of
the Guarantors of their duties as such Officers, they would normally obtain
knowledge of the keeping, observing, performing and fulfilling by the Company
and the Guarantors, respectively, of their obligations under this Indenture, and
further stating, as to each such Officer signing such statement, that to the
best of his knowledge, each of the Company and the Guarantors has kept,
observed, performed and fulfilled each and every covenant contained in this
Indenture and is not in default in the performance or observance of any of the
terms, provisions and conditions hereof (or, if a Default or Event of Default
shall have occurred, describing all such Defaults or Events of Default of which
such Officer may have knowledge and what action the Company or the Guarantors,
as the case may be, are taking or proposes to take with respect thereto).

     SECTION 3.05.  Corporate Existence.  Subject to Article IV, each of the
Company and the Guarantors will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence, under the
laws of its respective jurisdiction of incorporation or formation.

     SECTION 3.06.  Waiver of Stay, Extension or Usury Laws.  Each of the
Company and the Guarantors covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law, which would prohibit or forgive the Company or the
Guarantors from paying all or any portion of the principal of or premium, if
any, Liquidated Damages, if any, Additional Amounts, if any, or interest on the
Securities as contemplated herein, wherever enacted, now or at any time
hereafter

                                        22
<PAGE>

in force, or which may affect the covenants or the performance of this
Indenture; and (to the extent that they may lawfully do so) each of the Company
and the Guarantors hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.

     SECTION 3.07.  Limitation on Liens.  So long as any Securities are
outstanding, the Bermuda Guarantor will not, nor will it permit any Subsidiary
to, issue, assume, guarantee or suffer to exist any debt for money borrowed
("Debt") if such Debt is secured by a mortgage, pledge, security interest or
lien (a "mortgage" or "mortgages") upon any properties of the Bermuda Guarantor
or any Subsidiary or upon any securities or indebtedness of any Subsidiary
(whether such properties, securities or indebtedness is now owned or hereafter
acquired) without in any such case effectively providing that the Securities
shall be secured equally and ratably with (or prior to) such Debt, except that
the foregoing restrictions shall not apply to:

          (a) mortgages on any property acquired, constructed or improved by the
     Bermuda Guarantor or any Subsidiary (or mortgages on the securities of a
     special purpose Subsidiary which holds no material assets other than the
     property being acquired, constructed or improved) after the date of this
     Indenture which are created within 180 days after such acquisition (or in
     the case of property constructed or improved, after the completion and
     commencement of commercial operation of such property, whichever is later)
     to secure or provide for the payment of the purchase price or cost thereof;
     provided that in the case of such construction or improvement the mortgages
     shall not apply to any property owned by the Bermuda Guarantor or any
     Subsidiary before such construction or improvement other than (1)
     unimproved real property on which the property so constructed, or the
     improvement, is located or (2) personal property which is so improved;

          (b) mortgages existing on the Issue Date, existing mortgages on
     property acquired (including mortgages on any property acquired from a
     Person which is consolidated with or merged with or into the Bermuda
     Guarantor or a Subsidiary) or mortgages outstanding at the time any
     corporation, partnership or other entity becomes a Subsidiary; provided
     that such mortgages shall only apply to property owned by such corporation,
     partnership or other entity at the time it becomes a Subsidiary or that is
     acquired thereafter other than from the Bermuda Guarantor or another
     Subsidiary;

          (c) mortgages in favor of the Bermuda Guarantor or any Subsidiary;

          (d) mortgages in favor of domestic or foreign governmental bodies to
     secure advances or other payments pursuant to any contract or statute or to
     secure indebtedness incurred to finance the purchase price or cost of
     constructing or improving the property subject to such mortgages, including
     mortgages to secure Debt of the pollution control or industrial revenue
     bond type;

          (e) mortgages consisting of pledges or deposits by the Bermuda
     Guarantor or any Subsidiary under workers' compensation laws, unemployment
     insurance laws or similar legislation, or good faith deposits in connection
     with bids, tenders, contracts (other than for the payment of Debt) or
     leases to which the Bermuda Guarantor or any Subsidiary is a party, or
     deposits to secure public or statutory obligations of the Bermuda Guarantor
     or any Subsidiary or deposits of cash or United States government bonds to
     secure surety or appeal bonds to which it is a party, or deposits as
     security for contested taxes or import or customs duties or for the payment
     of rent, in each case incurred in the ordinary course of business;

          (f) mortgages imposed by law, including carriers', warehousemen's,
     repairman's, landlords' and mechanics' liens, in each case for sums not yet
     due or being contested in good faith by appropriate proceedings if a
     reserve or other appropriate provisions, if any, as shall be required by
     GAAP shall have been made in respect thereof;

          (g) mortgages for taxes, assessments or other governmental charges
     that are not yet delinquent or which are being contested in good faith by
     appropriate proceedings provided appropriate reserves required pursuant to
     GAAP have been made in respect thereof;

                                        23
<PAGE>

          (h) mortgages in favor of issuers of surety or performance bonds or
     letters of credit or bankers' acceptances issued pursuant to the request of
     and for the account of the Bermuda Guarantor or any Subsidiary in the
     ordinary course of its business;

          (i) mortgages consisting of encumbrances, easements or reservations
     of, or rights of others for, licenses, rights of way, sewers, electric
     lines, telegraph and telephone lines and other similar purposes, or
     mortgages consisting of zoning or other restrictions as to the use of real
     properties or mortgages incidental to the conduct of the business of the
     Bermuda Guarantor or a Subsidiary or to the ownership of its properties
     which do not materially adversely affect the value of said properties or
     materially impair their use in the operation of the business of the Bermuda
     Guarantor or a Subsidiary;

          (j) mortgages arising by virtue of any statutory or common law
     provisions relating to bankers' liens, rights of set-off or similar rights
     and remedies as to deposit accounts or other funds maintained with a
     depositary institution; provided that:

             (1) such deposit account is not a dedicated cash collateral account
        and is not subject to restrictions against access by us in excess of
        those set forth by regulations promulgated by the Federal Reserve Board;
        and

             (2) such deposit account is not intended by the Bermuda Guarantor
        or any Subsidiary to provide collateral to the depository institution;

          (k) mortgages arising from Uniform Commercial Code financing statement
     filings regarding operating leases the Bermuda Guarantor and its
     Subsidiaries enter into in the ordinary course of business;

          (l) any mortgage over goods (or any documents relating thereto)
     arising either in favor of a bank issuing a form of documentary credit in
     connection with the purchase of such goods or by way of retention of title
     by the supplier of such goods where such goods are supplied on credit,
     subject to such retention of title, and in both cases where such goods are
     acquired in the ordinary course of business;

          (m) any mortgage pursuant to any order of attachment, execution,
     enforcement, distraint or similar legal process arising in connection with
     court proceedings; provided that such process is effectively stayed,
     discharged or otherwise set aside within 30 days;

          (n) any lease, sublease and sublicense granted to any third party
     constituting a mortgage and any mortgage pursuant to farm-in and farm-out
     agreements, operating agreements, development agreements and any other
     similar arrangements, which are customary in the oil and gas industry or in
     the ordinary course of business of the Bermuda Guarantor or any Subsidiary;
     or

          (o) any extension, renewal or replacement (or successive extensions,
     renewals or replacements), in whole or in part, of any mortgage referred to
     in the foregoing clauses (a) through (n), inclusive; provided that the
     principal amount of Debt secured thereby shall not exceed the principal
     amount of Debt so secured at the time of such extension, renewal or
     replacement, and that such extension, renewal or replacement shall be
     limited to all or a part of the property which secured the mortgage so
     extended, renewed or replaced (plus improvements in such property).

     In addition to the foregoing, the Bermuda Guarantor and any Subsidiary may,
without securing the Securities, issue, assume or guarantee secured Debt that,
with certain other Debt described in the following sentence, does not exceed 15%
of Consolidated Net Worth, as shown on a consolidated balance sheet of the
Bermuda Guarantor as of a date not more than 90 days prior to the proposed
transaction, prepared by the Bermuda Guarantor in accordance with GAAP. The
other Debt to be aggregated for purposes of this exception is all Attributable
Debt in respect of Sale and Lease-Back Transactions of the Bermuda Guarantor and
its Subsidiaries under the exception in clause (e)(2) of Section 3.09 existing
at such time.

                                        24
<PAGE>

     SECTION 3.08.  Payment of Additional Amounts.  Unless otherwise required by
Canadian or Bermudan law, neither the Company nor the Guarantors will deduct or
withhold from payments made with respect to the Securities and the Guarantees on
account of any present or future Taxes. In the event that either the Company or
a Guarantor is required to withhold or deduct on account of any Taxes due from
any payment made under or with respect to the Securities or the Guarantees, as
the case may be, the Company or the Guarantor, as the case may be, will pay such
additional amounts ("Additional Amounts") as may be necessary so that the net
amount received by each Holder of Securities will equal the amount that the
Holder would have received if the Taxes had not been required to be withheld or
deducted; provided that no Additional Amounts will be payable with respect to a
payment made to a Holder (an "Excluded Holder") (A) who, insofar as Canadian
Taxes are relevant, does not deal at arm's length (within the meaning of the
Income Tax Act (Canada)) with the Company or a Guarantor or (B) to the extent:
(i) that any Taxes would not have been so imposed but for the existence of any
present or former connection between the Holder and Canada or Bermuda or any
province or territory of Canada, other than the mere receipt of the payment, the
acquisition, ownership or disposition of such Securities or the exercise or
enforcement of rights under the Securities, the Guarantees or this Indenture;
(ii) of any estate, inheritance, gift, sales, transfer or personal property
Taxes imposed with respect to the Securities, except as described below or as
otherwise provided in this Indenture; (iii) that any such Taxes would not have
been imposed but for the presentation of the Securities, where presentation is
required, for payment on a date more than 30 days after the date on which the
payment became due and payable or the date on which payment thereof is duly
provided for, whichever is later, except to the extent that the beneficiary or
Holder thereof would have been entitled to Additional Amounts had the Securities
been presented for payment on any date during such 30-day period; or (iv) that
the Holder would not be liable or subject to such withholding or deduction of
Taxes but for the failure to make a valid declaration of non-residence or other
similar claim for exemption, if: (a) the making of the declaration or claim is
required or imposed by statute, treaty, regulation, ruling or administrative
practice of the relevant taxing authority as a precondition to an exemption
from, or reduction in, the relevant Taxes; and (b) at least 60 days prior to the
first payment with respect to which the Company or a Guarantor shall apply this
clause (iv), the Company or a Guarantor shall have notified all Holders of the
Securities in writing that they shall be required to provide this declaration or
claim. The Company and the Guarantors shall also (i) withhold or deduct such
Taxes as required; (ii) remit the full amount of Taxes deducted or withheld to
the relevant taxing authority in accordance with all applicable laws; (iii) use
reasonable efforts to obtain from each relevant taxing authority imposing the
Taxes certified copies of tax receipts evidencing the payment of any Taxes
deducted or withheld; and (iv) upon request, make available to the Holders of
the Securities, within 60 days after the date the payment of any Taxes deducted
or withheld is due pursuant to applicable law, certified copies of tax receipts
evidencing such payment by the Company or such Guarantor and, notwithstanding
the Company's or such Guarantor's efforts to obtain the receipts, if the same
are not obtainable, other evidence of such payments.

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

     At least 30 days prior to each date on which any payment under or with
respect to the Securities is due and payable, if the Company or a Guarantor
becomes obligated to pay Additional Amounts with respect to such payment, the
Company (or in respect of the Guarantees, the relevant Guarantor) shall deliver
to the Trustee an Officers' Certificate stating the fact that such Additional
Amounts will be payable, and the amounts so payable and will set forth such
other information as is necessary to enable the Trustee to pay such Additional
Amounts to the Holders on the payment date. Whenever in this Indenture there is
mentioned, in any context, the payment of principal of and premium, if any,
Liquidated Damages, if any, Additional Amounts, if any, or interest (including
defaulted interest) or any other amount payable on or with respect to any of the
Securities, such mention shall be deemed to include mention of the payment of
Additional Amounts provided for in this Section 3.08 to the extent that, in such
context,

                                        25
<PAGE>

Additional Amounts are, were or would be payable in respect thereof pursuant to
the provisions of this Section 3.08 and express mention of the payment of
Additional Amounts in those provisions hereof shall not be construed as
excluding Additional Amounts in those provisions hereof where such express
mention is not made (if applicable).

     If payments with respect of the Securities or the Guarantees become subject
generally to the taxing jurisdiction of any Territory or any political
subdivision or taxing authority thereof or therein having power to tax, other
than or in addition to Bermuda or Canada or any political subdivision or taxing
authority therein or thereof having power to tax, immediately upon becoming
aware thereof the Company shall notify the Trustee of such event, and thereupon
the Company or the Guarantors, as the case may be, shall be obligated to pay
Additional Amounts in respect thereof on terms corresponding to the terms of the
foregoing provisions of this Section 3.08 with the substitution for (or, as the
case may be, in addition to) the references herein to Bermuda or Canada or any
political subdivision or authority therein or thereof having power to tax of
references to that other or additional Territory or any political subdivision or
authority therein or thereof having power to tax to whose taxing jurisdiction
such payments shall have become subject as aforesaid. The term "Territory" means
for this purpose any jurisdiction in which the Company or a Guarantor, as the
case may be, is incorporated or in which it has its place of central management
or central control.

     The obligations of the Company and the Guarantors under this Section 3.08
shall survive the termination of this Indenture and the payment of all amounts
under or with respect to this Indenture and the Securities.

     SECTION 3.09.  Limitations on Sale and Lease-Back Transactions.  So long as
any Securities are outstanding, the Bermuda Guarantor will not, nor will it
permit any Subsidiary to, enter into any Sale and Lease-Back Transaction, other
than any Sale and Lease-Back Transaction:

          (a) entered into within 180 days of the later of the acquisition or
     placing into service of the property subject thereto by the Bermuda
     Guarantor or such Subsidiary;

          (b) involving a lease of less than five years;

          (c) entered into in connection with an industrial revenue bond or
     pollution control financing;

          (d) between the Bermuda Guarantor and/or one or more Subsidiaries;

          (e) as to which the Bermuda Guarantor or such Subsidiary would be
     entitled to incur Debt secured by a mortgage on the property to be leased
     in an amount equal to the Attributable Debt with respect to such Sale and
     Lease-Back Transaction without equally and ratably securing the Securities
     (1) under clauses (a) through (o) of Section 3.07 or (2) under the last
     paragraph of Section 3.07; or

          (f) as to which the Bermuda Guarantor will apply an amount equal to
     the net proceeds from the sale of the property so leased to (1) the
     retirement (other than any mandatory retirement), within 180 days of the
     effective date of any such Sale and Lease-Back Transaction, of Securities
     or of Funded Debt of the Bermuda Guarantor or a Subsidiary or (2) the
     purchase or construction of other property, provided that such property is
     owned by the Bermuda Guarantor or a Subsidiary free and clear of all
     mortgages.

                                   ARTICLE IV

                         CONSOLIDATION, MERGER AND SALE

     SECTION 4.01.  Limitation on Mergers and Consolidations.  The Company shall
not consolidate or amalgamate with or merge into any other Person or convey,
transfer or lease its properties and assets substantially as an entirety to any
Person unless:

          (1) the Person formed by such consolidation or amalgamation or into
     which the Company is merged or the Person which acquires by conveyance or
     transfer, or which leases, the properties and

                                        26
<PAGE>

     assets of the Company substantially as an entirety shall be a Person
     organized and existing under the laws of the United States of America, any
     State thereof, the District of Columbia, Canada or any province or
     territory thereof, Barbados or Bermuda and shall expressly assume, by an
     indenture supplemental hereto, executed and delivered to the Trustee, in
     form satisfactory to the Trustee, the due and punctual payment of the
     principal of and interest on all the Securities and the performance of
     every covenant of this Indenture on the part of the Company to be
     performed;

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

          (3) the Company has delivered to the Trustee an Officers' Certificate
     and an Opinion of Counsel, each stating that such consolidation,
     amalgamation, merger, conveyance, transfer or lease and such supplemental
     indenture comply with this Article IV and that all conditions precedent
     herein provided for relating to such transaction have been complied with.

     Neither Guarantor shall consolidate with or merge into any other Person or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person unless:

          (1) (A) the Person formed by such consolidation or into which the
     Guarantor is merged or the Person which acquires by conveyance or transfer,
     or which leases, the properties and assets of the Guarantor substantially
     as an entirety shall be, in the case of the U.S. Guarantor only, a Person
     organized and existing under the laws of the United States of America, any
     State thereof or the District of Columbia and, in any case, shall expressly
     assume, by an indenture supplemental hereto, executed and delivered to the
     Trustee, in form satisfactory to the Trustee, the due and punctual payment
     of all obligations in respect of the Guarantees and the performance of
     every covenant of this Indenture on the part of the Guarantor to be
     performed or observed;

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

          (3) the Guarantor has delivered to the Trustee an Officers'
     Certificate and an Opinion of Counsel, each stating that such
     consolidation, merger, conveyance, transfer or lease and such supplemental
     indenture comply with this Article IV and that all conditions precedent
     herein provided for relating to such transaction have been complied with.

     SECTION 4.02.  Successors Substituted.  Upon any consolidation or
amalgamation of the Company or a Guarantor with, or merger of the Company or a
Guarantor into, any other Person, or any conveyance, transfer or lease of the
properties and assets of the Company or a Guarantor substantially as an entirety
in accordance with Section 4.01, the successor Person formed by such
consolidation or amalgamation or into which the Company or the Guarantor is
merged or to which such conveyance, transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
or the Guarantor, as the case may be, under this Indenture with the same effect
as if such successor Person had been named as the Company or the Guarantor, as
the case may be, herein, and thereafter, except in the case of an amalgamation
or a lease to another Person, the predecessor Person shall be relieved of all
obligations and covenants under this Indenture and the Securities.

     SECTION 4.03.  Assignment of Company's Obligations.  The Company may assign
its obligations under the Securities and this Indenture to the U.S. Guarantor or
any other wholly-owned Subsidiary of the Bermuda Guarantor organized under the
laws of the United States, any State thereof, the District of Columbia, Canada
or any province or territory thereof, at any time without the consent of the
Trustee or any Holder; provided that the assignee agrees to be bound by the
terms of this Indenture and the Securities and the Guarantees of the U.S.
Guarantor remain in full force and effect if the assignee is not the U.S.
Guarantor; provided, however, that no such assignment may be made if a Default
or Event of Default shall have occurred and be continuing. Upon any such
assignment by the Company, the Person to whom such assignment is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture and the Securities, with the same effect as if
such Person had been named as the Company herein and therein, and thereafter,
the assignor Person shall be relieved

                                        27
<PAGE>

of all obligations and covenants under this Indenture and the Securities. A copy
of the agreement evidencing such assignment shall be provided to the Trustee by
the Company, promptly after the effective date of such assignment.

                                   ARTICLE V

                             DEFAULTS AND REMEDIES

     SECTION 5.01.  Events of Default.  "Event of Default" means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):

          (1) default in the payment of the principal of or premium, if any, on
     any Security at its Maturity, and continuance of such default for a period
     of 10 days; or

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

          (3) default in the observance or performance, or breach, of any
     covenant of the Company or a Guarantor in any Security or this Indenture
     (other than a covenant a default in whose performance or whose breach is
     elsewhere in this Section 5.01 specifically dealt with), and continuance of
     such default or breach for a period of 90 days after there has been given,
     by registered or certified mail, to the Company and the Guarantors by the
     Trustee or to the Company, the Guarantors and the Trustee by the Holders of
     at least 25% in aggregate principal amount of the outstanding Securities a
     written notice specifying such default or breach and requiring it to be
     remedied and stating that such notice is a "Notice of Default" hereunder;
     or

          (4) the entry by a court having jurisdiction in the premises of (A) a
     decree or order for relief in respect of the Company or a Guarantor in an
     involuntary case or proceeding under any applicable Bankruptcy Law or (B) a
     decree or order adjudging the Company or a Guarantor a bankrupt or
     insolvent, or approving as properly filed a petition seeking
     reorganization, arrangement, adjustment or composition of or in respect of
     the Company or a Guarantor under any applicable Bankruptcy Law, or
     appointing a custodian, receiver, receiver and manager, interim receiver,
     administrator, monitor, liquidator, assignee, trustee, sequestrator or
     other similar official of the Company or a Guarantor or of any substantial
     part of the property of the Company or a Guarantor, or ordering the winding
     up or liquidation of the affairs of the Company or a Guarantor, and the
     continuance of any such decree or order for relief or any such other decree
     or order unstayed and in effect for a period of 90 consecutive days;

          (5) the commencement by the Company or a Guarantor of a voluntary case
     or proceeding under any applicable Bankruptcy Law or of any other case or
     proceeding to be adjudicated a bankrupt or insolvent, or the consent by any
     of them to the entry of a decree or order for relief in respect of the
     Company or a Guarantor in an involuntary case or proceeding under any
     applicable Bankruptcy Law or to the commencement of any bankruptcy or
     insolvency case or proceeding against any of them, or the filing by any of
     them of a petition or answer or consent seeking reorganization or relief
     under any applicable Bankruptcy Law, or the consent by any of them to the
     filing of such petition or to the appointment of or taking possession by a
     custodian, receiver, receiver and manager, interim receiver, administrator,
     monitor, liquidator, assignee, trustee, sequestrator or similar official of
     the Company or a Guarantor or of any substantial part of the property of
     the Company or a Guarantor, or the making by any of them of an assignment
     for the benefit of creditors, or the admission by any of them in writing of
     its inability to pay its debts generally as they become due, or the taking
     of corporate action by the Company or a Guarantor in furtherance of any
     such action; or

                                        28
<PAGE>

          (6) the Guarantees cease to be in full force and effect or become
     unenforceable or invalid or are declared null and void (other than in
     accordance with the terms of such Guarantees) or a Guarantor denies or
     disaffirms its obligations under such Guarantees.

     The Trustee shall not be deemed to know of a Default or Event of Default
unless a Responsible Officer at the Corporate Trust Office of the Trustee has
actual knowledge of such Default or Event of Default or the Trustee receives
written notice at the Corporate Trust Office of the Trustee of such Default or
Event of Default with specific reference to such Default.

     When a Default is cured, or when an Event of Default is deemed cured
pursuant to Section 5.04, such Default, or Event of Default, as the case may be,
ceases.

     SECTION 5.02.  Acceleration.  If an Event of Default (other than an Event
of Default specified in clause (4) or (5) of Section 5.01) occurs and is
continuing, the Trustee by notice to the Company and the Guarantors, or by the
Holders of at least 25% in aggregate principal amount of the then outstanding
Securities by written notice to the Company, the Guarantors and the Trustee, may
declare the principal of and Liquidated Damages, if any, Additional Amounts, if
any, and interest on all then outstanding Securities to be due and payable
immediately. Upon any such declaration the amounts due and payable on the
Securities, as determined in accordance with the next succeeding paragraph,
shall be due and payable immediately. If an Event of Default specified in clause
(4) or (5) of Section 5.01 occurs, the principal of Liquidated Damages, if any,
Additional Amounts, if any, and interest on all Securities then outstanding
shall ipso facto become and be immediately due and payable without any
declaration, notice or other act on the part of the Trustee or any Holder.

     At any time after such a declaration of acceleration has been made and
before a judgment for payment of the money due has been obtained by the Trustee
as hereinafter in this Article V provided, the Holders of a majority in
aggregate principal amount of the outstanding Securities, by written notice to
the Company, the Guarantors and the Trustee, may rescind and annul such
declaration and its consequences if:

          (1) the Company or a Guarantor has paid or deposited with the Trustee
     a sum sufficient to pay:

             (A) the principal of and premium, if any, on any Securities which
        have become due otherwise than by such declaration of acceleration and
        Liquidated Damages, if any, and Additional Amounts, if any, and any
        interest thereon at the rate or rates prescribed therefor in such
        Securities or in this Indenture,

             (B) all overdue interest, Liquidated Damages, if any, and
        Additional Amounts, if any, on all Securities,

             (C) to the extent that payment of such interest is lawful, interest
        upon overdue interest and overdue Liquidated Damages, if any, and
        overdue Additional Amounts, if any, at the rate or rates prescribed
        therefor in such Securities or in this Indenture, and

             (D) all sums paid or advanced by the Trustee hereunder and the
        reasonable compensation, expenses, disbursements and advances of the
        Trustee, its agents and counsel; and

          (2) all Events of Default, other than the non-payment of the principal
     of Securities which have become due solely by such declaration of
     acceleration, have been cured or waived as provided in Section 5.04.

     No such rescission shall affect any subsequent Default or impair any right
consequent thereon.

     If the maturity of the Securities is accelerated pursuant to this Section
5.02, 100% of the principal amount thereof shall become due and payable plus
Liquidated Damages, if any, Additional Amounts, if any, and interest to the date
of payment.

     SECTION 5.03.  Other Remedies.  If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of and Liquidated Damages, if any,

                                        29
<PAGE>

Additional Amounts, if any, and interest on the Securities or to enforce the
performance of any provision of the Securities, the Guarantees, or this
Indenture.

     The Trustee may maintain a proceeding even if it does not possess any of
the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. All remedies are cumulative
to the extent permitted by law.

     SECTION 5.04.  Waiver of Existing Defaults.  Subject to Sections 5.07 and
8.02, the Holders of a majority in aggregate principal amount of the Securities
then outstanding by notice to the Trustee may waive an existing Default or Event
of Default and its consequences (including waivers obtained in connection with a
tender offer or exchange offer for the Securities or a solicitation of consents
in respect of the Securities, provided that in each case such offer or
solicitation is made to all Holders of the Securities then outstanding on equal
terms), except (1) a continuing Default or Event of Default in the payment of
the principal of or premium, if any, Liquidated Damages, if any, Additional
Amounts, if any, or interest on the Securities or (2) a continuing Default in
respect of a provision that under Section 8.02 cannot be amended without the
consent of each Holder affected. Upon any such waiver, such Default shall cease
to exist, and any Event of Default arising therefrom shall be deemed to have
been cured for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereon.

     SECTION 5.05.  Control by Majority.  The Holders of a majority in aggregate
principal amount of the Securities then outstanding may direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee
or exercising any trust or power conferred on it hereunder. The Trustee,
however, may refuse to follow any direction that conflicts with applicable law
or this Indenture that the Trustee determines may be unduly prejudicial to the
rights of other Holders, or that may involve the Trustee in personal liability;
provided, however, that the Trustee may take any other action deemed proper by
the Trustee that is not inconsistent with such direction. Prior to taking any
action hereunder, the Trustee shall be entitled to receive reasonable
indemnification satisfactory to it against all losses and expenses caused by
taking or not taking such action subject to the Trustee's duty to act with the
required standard of care during a default.

     SECTION 5.06.  Limitations on Suits.  Subject to Section 5.07, a Holder may
pursue a remedy with respect to this Indenture (including the Guarantees) or the
Securities only if:

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

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

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

          (4) the Trustee does not comply with the request within 60 days after
     receipt of the request and the furnishing of indemnity; and

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

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

     SECTION 5.07.  Rights of Holders to Receive Payment.  Notwithstanding any
other provision of this Indenture, the right of any Holder of a Security to
receive payment of principal of and premium, if any, Liquidated Damages, if any,
Additional Amounts, if any, and interest on the Security, on or after the
respective due dates expressed in the Security, or to bring suit against the
Company and/or the Guarantors

                                        30
<PAGE>

for the enforcement of any such payment on or after such respective dates, is
absolute and unconditional and shall not be impaired or affected without the
consent of such Holder.

     SECTION 5.08.  Collection Suit by Trustee.  If an Event of Default
specified in clause (1) or (2) of Section 5.01 occurs and is continuing, the
Trustee is authorized to recover judgment in its own name and as trustee of an
express trust against the Company and the Guarantors (i) for the amount of
principal of and premium, if any, Liquidated Damages, if any, Additional
Amounts, if any, and interest remaining unpaid on any Securities and (ii)
interest on overdue principal, premium, if any, Liquidated Damages, if any,
Additional Amounts, if any, and, to the extent lawful, interest on overdue
interest, and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.

     SECTION 5.09.  Trustee May File Proofs of Claim.  The Trustee is authorized
to file such proofs of claim and other papers or documents and to take such
actions, including participating as a member, voting or otherwise, of any
committee of creditors, as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel) and
the Holders allowed in any judicial proceedings relative to the Company and the
Guarantors or their respective creditors or properties and shall be entitled and
empowered to collect, receive and distribute any money or other property payable
or deliverable on any such claims and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee, and in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due to it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 6.07. To the extent that the payment of any such compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.07 out of the estate in any such
proceeding, shall be denied for any reason, payment of the same shall be secured
by a lien on, and shall be paid out of, any and all distributions, dividends,
money, securities and other properties which the Holders of the Securities may
be entitled to receive in such proceeding whether in liquidation or under any
plan of reorganization or arrangement or otherwise. Nothing herein contained
shall be deemed to authorize the Trustee to authorize or consent to or accept or
adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.

     SECTION 5.10.  Priorities.  If the Trustee collects any money pursuant to
this Article V, it shall pay out the money in the following order:

        First:  to the Trustee for amounts due under Section 6.07;

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

        Third:  to the Company and the Guarantors.

     The Trustee, upon prior written notice to the Company and the Guarantors,
may fix a record date and payment date for any payment to Holders pursuant to
this Article V.

     SECTION 5.11.  Undertaking for Costs.  In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as a trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 5.11 does not apply to a suit by the
Trustee, a suit by a

                                        31
<PAGE>

Holder pursuant to Section 5.07, or a suit by a Holder or Holders of more than
10% in principal amount of the Securities then outstanding.

                                   ARTICLE VI

                                    TRUSTEE

     SECTION 6.01.  Duties of Trustee.

     (a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in such exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.

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

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

          (2) in the absence of bad faith on its part, the Trustee may
     conclusively rely, as to the truth of the statements and the correctness of
     the opinions expressed therein, upon certificates or opinions furnished to
     the Trustee and conforming to the requirements of this Indenture. However,
     the Trustee shall examine such certificates and opinions to determine
     whether or not, on their face, they appear to conform to the requirements
     of this Indenture.

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

          (1) this paragraph does not limit the effect of paragraph (b) of this
     Section 6.01;

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

          (3) the Trustee shall not be liable with respect to any action it
     takes or omits to take in good faith in accordance with a direction
     received by it pursuant to Section 5.05.

     (d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b) and (c) of this Section 6.01.

     (e) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability. The Trustee may refuse to perform any
duty or exercise any right or power unless it receives indemnity satisfactory to
it against any loss, liability or expense.

     (f) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law. All money received by the Trustee shall, until applied
as herein provided, be held in trust for the payment of the principal of and
premium, if any, Liquidated Damages, if any, Additional Amounts, if any, and
interest on the Securities.

     SECTION 6.02.  Rights of Trustee.

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

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

                                        32
<PAGE>

counsel and the advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon.

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

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

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

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

     (g) In the event the Trustee receives inconsistent or conflicting requests
and indemnity from two or more groups of Holders of Securities, each
representing less than a majority in aggregate principal amount of the
outstanding Securities, pursuant to the provisions of this Indenture, the
Trustee may determine what action, if any, shall be taken.

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

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

     (j) Except for information provided by the Trustee concerning the Trustee,
the Trustee shall have no responsibility for any information in the Offering
Memorandum or other disclosure material distributed with respect to the
Securities, and the Trustee shall have no responsibility for compliance with any
U.S. or Canadian Federal or State or provincial securities or employee benefit
plan laws in connection with the Securities.

     (k) The Trustee may request that the Company or a Guarantor, as the case
may be, deliver an Officers' Certificate setting forth the names of individuals
and/or titles of officers authorized at such time to take specified actions
pursuant to this Indenture, which Officers' Certificate may be signed by any
person authorized to sign an Officers' Certificate, including any person
specified as so authorized in any such certificate previously delivered and not
superseded.

     SECTION 6.03.  Individual Rights of Trustee.  The Trustee in its individual
or any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company, the Guarantors or any of their Affiliates with
the same rights it would have if it were not the Trustee. Any Agent may do the
same with like rights. However, the Trustee is subject to Sections 6.10 and
6.11.

     SECTION 6.04.  Trustee's Disclaimer.  The Trustee makes no representation
as to the validity or adequacy of this Indenture, the Securities or the
Guarantees, it shall not be accountable for the Company's use of the proceeds
from the Securities or any money paid to the Company or upon the Company's
direction under any provision hereof, it shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee and
it shall not be responsible for any statement or recital herein or any statement
in the Securities other than its certificate of authentication.

     SECTION 6.05.  Notice of Defaults.  If a Default or Event of Default occurs
and is continuing and it is actually known to a Responsible Officer of the
Trustee, the Trustee shall mail to Holders a notice of the Default or Event of
Default within 90 days after it occurs. Except in the case of a Default or Event
of

                                        33
<PAGE>

Default in payment of principal of or premium, if any, Liquidated Damages, if
any, Additional Amounts, if any, or interest on any Security, the Trustee may
withhold the notice if and so long as a committee of its Responsible Officers in
good faith determines that withholding the notice is in the interests of
Holders.

     SECTION 6.06.  Reports by Trustee to Holders.  Within 60 days after May 15
of each year, beginning with May 15, 2003, the Trustee shall mail to Holders a
brief report dated as of May 15 of such year that complies with TIA Section
313(a); provided, however, that if no event described in TIA Section 313(a) has
occurred within the 12 months preceding the reporting date, no report need be
transmitted. The Trustee also shall comply with TIA Section 313(b). The Trustee
shall also transmit by mail all reports as required by TIA Sections 313(c) and
313(d).

     A copy of each report at the time of its mailing to Holders shall be filed
with the SEC and each securities exchange, if any, on which the Securities are
listed. The Company shall notify the Trustee if and when the Securities are
listed on any securities exchange.

     SECTION 6.07.  Compensation and Indemnity.  The Company and the Guarantors
jointly and severally agree to pay to the Trustee from time to time such
compensation as agreed to by the Company, the Guarantors and the Trustee, for
its acceptance of this Indenture and its services hereunder. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company and the Guarantors jointly and severally agree to
reimburse the Trustee upon request for all reasonable disbursements, advances
and expenses incurred by it. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.

     The Company and the Guarantors jointly and severally agree to indemnify the
Trustee or any predecessor Trustee and their agents for and to hold them
harmless against any and all loss, liability, damage, claim, or expense
(including taxes, other than taxes based upon, measured by or determined by the
income of the Trustee) incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture, including the
costs and expenses of defending itself against any claim (whether asserted by
the Company, the Guarantors, any Holder or any other Person), except as set
forth in the next paragraph. The Trustee shall notify the Company and the
Guarantors promptly of any claim for which it may seek indemnity. The Company
shall defend the claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel, and the Company and the Guarantors shall pay
the reasonable fees and expenses of such counsel. The Company need not pay for
any settlement made without its consent.

     Neither the Company nor the Guarantors shall be obligated to reimburse any
expense or indemnify against any loss or liability incurred by the Trustee
through negligence or bad faith.

     To secure the payment obligations of the Company and the Guarantors in this
Section 6.07, the Trustee shall have a lien prior to the Securities on all money
or property held or collected by the Trustee, except that held in trust to pay
principal of and premium, if any, Liquidated Damages, if any, and Additional
Amounts, if any, and interest on the Securities. Such lien shall survive the
satisfaction and discharge of this Indenture.

     When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 5.01(4) or (5) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.

     SECTION 6.08.  Replacement of Trustee.  A resignation or removal of the
Trustee and appointment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided in this Section
6.08.

     The Trustee may resign and be discharged from the trust hereby created by
so notifying the Company and the Guarantors. The Holders of a majority in
principal amount of the then outstanding Securities may

                                        34
<PAGE>

remove the Trustee by so notifying the Trustee and the Company. The Company may
remove the Trustee if:

          (1) the Trustee fails to comply with Section 6.10;

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

          (3) a Custodian or public officer takes charge of the Trustee or its
     property; or

          (4) the Trustee otherwise becomes incapable of acting.

     If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company and the Guarantors shall promptly appoint
a successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the Securities then outstanding
may appoint a successor Trustee to replace the successor Trustee appointed by
the Company.

     If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the Securities then outstanding
may petition any court of competent jurisdiction at the expense of the Company
for the appointment of a successor Trustee.

     If the Trustee fails to comply with Section 6.10, any Holder may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.

     A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company and the Guarantors. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, subject to the lien provided for
in Section 6.07. Notwithstanding replacement of the Trustee pursuant to this
Section 6.08, the obligations of the Company and the Guarantor under Section
6.07 shall continue for the benefit of the retiring Trustee.

     SECTION 6.09.  Successor Trustee by Merger, etc.  Subject to Section 6.10,
if the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor Trustee;
provided, however, that in the case of a transfer of all or substantially all of
its corporate trust business to another corporation, the transferee corporation
expressly assumes all of the Trustee's liabilities hereunder.

     In case any Securities shall have been authenticated, but not delivered, by
the Trustee then in office, any successor by merger, conversion or consolidation
to such authenticating Trustee may adopt such authentication and deliver the
Securities so authenticated; and in case at that time any of the Securities
shall not have been authenticated, any successor to the Trustee may authenticate
such Securities either in the name of any predecessor hereunder or in the name
of the successor to the Trustee; and in all such cases such certificates shall
have the full force which it is anywhere in the Securities or in this Indenture
provided that the certificate of the Trustee shall have.

     SECTION 6.10.  Eligibility; Disqualification.  There shall at all times be
a Trustee hereunder which shall be a corporation organized and doing business
under the laws of the United States of America, any State thereof or the
District of Columbia and authorized under such laws to exercise corporate trust
power, shall be subject to supervision or examination by Federal or State (or
the District of Columbia) authority and shall have, or be a Subsidiary of a bank
or bank holding company having, a combined capital and surplus of at least $50
million as set forth in its most recent published annual report of condition.

     This Indenture shall always have a Trustee that satisfies the requirements
of TIA Sections 310(a)(1), 310(a)(2) and 310(a)(5). The Trustee is subject to
and shall comply with the provisions of TIA Section 310(b) during the period of
time required by this Indenture. Nothing in this Indenture shall

                                        35
<PAGE>

prevent the Trustee from filing with the SEC the application referred to in the
penultimate paragraph of TIA Section 310(b).

     SECTION 6.11.  Preferential Collection of Claims Against Company.  The
Trustee is subject to and shall comply with the provisions of TIA Section
311(a), excluding any creditor relationship listed in TIA Section 311(b). A
Trustee who has resigned or been removed shall be subject to TIA Section 311(a)
to the extent indicated therein.

                                  ARTICLE VII

                             DISCHARGE OF INDENTURE

     SECTION 7.01.  Termination of Company's and Guarantors' Obligations.

     (a) This Indenture shall cease to be of further effect (except that the
Company's and the Guarantors' obligations under Section 6.07 and the Trustee's
and Paying Agent's obligations under Section 7.03 shall survive), and the
Trustee, on demand of the Company, shall execute proper instruments
acknowledging the satisfaction and discharge of this Indenture, when:

          (1) either

             (A) all outstanding Securities theretofore authenticated and issued
        (other than destroyed, lost or stolen Securities that have been replaced
        or paid) have been delivered to the Trustee for cancellation; or

             (B) all outstanding Securities not theretofore delivered to the
        Trustee for cancellation:

                (i) have become due and payable,

                (ii) will become due and payable at their Stated Maturity within
           one year, or

                (iii) will be scheduled for redemption by their terms within one
           year, and the Company, in the case of clause (i), (ii) or (iii)
           above, has deposited or caused to be deposited with the Trustee as
           funds (immediately available to the Holders in the case of clause
           (i)) in trust for such purpose an amount of cash or, in the case of
           clause (ii) or (iii), U.S. Government Obligations or a combination
           thereof which, together with earnings thereon, will be sufficient, in
           the case of clause (ii) or (iii), in the opinion of a nationally
           recognized firm of independent public accountants expressed in a
           written certification thereof delivered to the Trustee, to pay and
           discharge the entire indebtedness on such Securities for principal,
           premium, if any, Liquidated Damages, if any, Additional Amounts, if
           any, and interest to the date of such deposit (in the case of
           Securities which have become due and payable) or to the Stated
           Maturity, as the case may be;

          (2) the Company has paid all other sums payable by it hereunder; and

          (3) the Company has delivered to the Trustee an Officers' Certificate
     stating that all conditions precedent to satisfaction and discharge of this
     Indenture have been complied with, together with an Opinion of Counsel to
     the same effect.

     (b) The Company and the Guarantors may, subject as provided herein,
terminate all of their obligations under this Indenture if:

          (1) the Company has irrevocably deposited or caused to be irrevocably
     deposited with the Trustee as trust funds in trust for the purpose of
     making the following payments dedicated solely to the benefit of the
     Holders (i) cash in an amount, or (ii) U.S. Government Obligations or (iii)
     a combination thereof, sufficient, in the opinion of a nationally
     recognized firm of independent public accountants expressed in a written
     certification thereof delivered to the Trustee, to pay, without
     consideration of the reinvestment of any such amounts and after payment of
     all taxes or other charges or assessments in respect thereof payable by the
     Trustee, the principal of and premium, if any,

                                        36
<PAGE>

     Liquidated Damages, if any, Additional Amounts, if any and interest on all
     Securities on each date that such principal, premium, if any, Liquidated
     Damages, if any, Additional Amounts, if any, or interest is due and payable
     and to pay all other sums payable by it hereunder; provided that the
     Trustee shall have been irrevocably instructed to apply such money and/or
     the proceeds of such U.S. Government Obligations to the payment of said
     principal, premium, if any, Liquidated Damages, if any, Additional Amounts,
     if any, and interest with respect to the Securities as the same shall
     become due;

          (2) the Company has delivered to the Trustee an Officers' Certificate
     stating that all conditions precedent to satisfaction and discharge of this
     Indenture have been complied with, and an Opinion of Counsel to the same
     effect;

          (3) no Default or Event of Default shall have occurred and be
     continuing on the date of such deposit or, insofar as clauses (4) and (5)
     of Section 5.01 are concerned, at any time during the period ending on the
     91st day after the date of such deposit (it being understood that this
     condition shall not be deemed satisfied until the expiration of such
     period);

          (4) the Company shall have delivered to the Trustee one or more
     Opinions of Counsel from nationally recognized counsel acceptable to the
     Trustee to the effect that, based on a ruling of the Internal Revenue
     Service or a change in U.S. Federal income tax law occurring after the date
     of this Indenture insofar as any such Opinion of Counsel relates to U.S.
     taxes, the Holders of Securities will not recognize income, gain or loss
     for U.S. or Canadian Federal income tax purposes as a result of the
     Company's exercise of its option under this Section 7.01(b) and will be
     subject to U.S. and Canadian Federal income tax on the same amounts, in the
     same manner and at the same times as would have been the case if such
     option had not been exercised;

          (5) such deposit and discharge will not result in a breach or
     violation of, or constitute a default under, any other agreement or
     instrument to which the Company or a Guarantor is a party or by which it is
     bound;

          (6) such deposit and discharge shall not cause the Trustee to have a
     conflicting interest as defined in TIA Section 310(b); and

          (7) the Company shall have delivered to the Trustee an Opinion of
     Counsel to the effect that after the passage of 91 days following the
     deposit, the trust funds will not be subject to the effect of any
     applicable bankruptcy, insolvency, reorganization or similar laws affecting
     creditors' rights generally.

     In such event, payment of the Securities may not be accelerated because of
an Event of Default, Article IX and the other provisions of this Indenture shall
cease to be of further effect (except as provided in the next succeeding
paragraph), and the Trustee, on demand of the Company, shall execute proper
instruments acknowledging satisfaction and discharge under this Indenture.

     However, the Company's obligations in Sections 2.03, 2.04, 2.05, 2.06,
2.07, 3.01, 3.02, 3.08, 6.08 and 7.01 the Company's and the Guarantors'
obligations in Sections 4.01, 6.07, 7.04 and 9.01 and the Trustee's and Paying
Agent's obligations in Section 7.03 shall survive until the Securities are no
longer outstanding. Thereafter, only the Company's and the Guarantors'
obligations in Section 6.07 and the Trustee's and Paying Agent's obligations in
Section 7.03 shall survive.

     After such irrevocable deposit made pursuant to this Section 7.01(b) and
satisfaction of the other conditions set forth herein, the Trustee, on demand of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge under this Indenture.

     (c) The Company and the Guarantors may, subject as provided herein, be
released from their respective obligations to comply with, and shall have no
liability in respect of any term, condition or limitation, set forth in Sections
3.07, 3.09 and 4.01 and in Article IX, and such omission to comply with

                                        37
<PAGE>

Sections 3.07, 3.09 and 4.01 and Article IX shall not constitute an Event of
Default under Section 5.01 ("Covenant Defeasance"), with the remainder of this
Indenture and such Securities unaffected thereby if:

          (1) the Company has irrevocably deposited or caused to be irrevocably
     deposited with the Trustee as trust funds in trust for the purpose of
     making the following payments dedicated solely to the benefit of the
     Holders (i) cash in an amount, or (ii) U.S. Government Obligations or (iii)
     a combination thereof, sufficient, in the opinion of a nationally
     recognized firm of independent public accountants expressed in a written
     certification thereof delivered to the Trustee, to pay, without
     consideration of the reinvestment of any such amounts and after payment of
     all taxes or other charges or assessments in respect thereof payable by the
     Trustee, the principal of and premium, if any, Liquidated Damages, if any,
     Additional Amounts, if any and interest on all Securities on each date that
     such principal, premium, if any, Liquidated Damages, if any, Additional
     Amounts, if any, or interest is due and payable and to pay all other sums
     payable by it hereunder; provided that the Trustee shall have been
     irrevocably instructed to apply such money and/or the proceeds of such U.S.
     Government Obligations to the payment of said principal, premium, if any,
     Liquidated Damages, if any, Additional Amounts, if any, and interest with
     respect to the Securities as the same shall become due;

          (2) the Company has delivered to the Trustee an Officers' Certificate
     stating that all conditions precedent to the Covenant Defeasance
     contemplated by this provision have been complied with, and an Opinion of
     Counsel to the same effect;

          (3) no Default or Event of Default shall have occurred and be
     continuing on the date of such deposit or, insofar as clauses (4) and (5)
     of Section 5.01 are concerned, at any time during the period ending on the
     91st day after the date of such deposit (it being understood that this
     condition shall not be deemed satisfied until the expiration of such
     period);

          (4) the Company shall have delivered to the Trustee one or more
     Opinions of Counsel from nationally recognized counsel acceptable to the
     Trustee to the effect that the Holders of Securities will not recognize
     income, gain or loss for U.S. or Canadian Federal income tax purposes as a
     result of the Company's exercise of its option under this Section 7.01(c)
     and will be subject to U.S. and Canadian Federal income tax on the same
     amounts, in the same manner and at the same times as would have been the
     case if such option had not been exercised;

          (5) such Covenant Defeasance will not result in a breach or violation
     of, or constitute a default under, any other agreement or instrument to
     which the Company or a Guarantor is a party or by which it is bound;

          (6) such Covenant Defeasance shall not cause the Trustee to have a
     conflicting interest as defined in TIA Section 310(b); and

          (7) the Company shall have delivered to the Trustee an Opinion of
     Counsel to the effect that after the passage of 91 days following the
     deposit, the trust funds will not be subject to the effect of any
     applicable bankruptcy, insolvency, reorganization or similar laws affecting
     creditors' rights generally.

     (d) In order to have money available on a payment date to pay principal of
or premium, if any, Liquidated Damages, if any, Additional Amounts, if any, or
interest on the Securities, the U.S. Government Obligations shall be payable as
to principal or interest on or before such payment date in such amounts as will
provide the necessary money. U.S. Government Obligations shall not be callable
at the issuer's option.

     (e) The Company may exercise its option under Section 7.01(b)
notwithstanding its prior exercise of its Covenant Defeasance option under
Section 7.01(c).

     SECTION 7.02.  Application of Trust Money.  The Trustee or a trustee
satisfactory to the Trustee and the Company shall hold in trust money or U.S.
Government Obligations deposited with it pursuant to Section 7.01. It shall
apply the deposited money and the money from U.S. Government Obligations

                                        38
<PAGE>

through the Paying Agent and in accordance with this Indenture to the payment of
principal of and premium, if any, Liquidated Damages, if any, Additional
Amounts, if any, and interest on Securities of the series with respect to which
the deposit was made.

     SECTION 7.03.  Repayment to Company.  The Trustee and the Paying Agent
shall promptly pay to the Company upon written request any excess money or
securities held by them at any time. Subject to the requirements of any
applicable abandoned property laws, the Trustee and the Paying Agent shall pay
to the Company upon written request any money held by them for the payment of
principal, premium, if any, Liquidated Damages, if any, Additional Amounts, if
any, or interest that remains unclaimed for two years after the date upon which
such payment shall have become due; provided, however, that the Company shall
have either caused notice of such payment to be mailed to each Holder entitled
thereto no less than 30 days prior to such repayment or within such period shall
have published such notice in a financial newspaper of widespread circulation
published in The City of New York. After payment to the Company, Holders
entitled to the money must look to the Company for payment as general creditors
unless an applicable abandoned property law designates another Person, and all
liability of the Trustee and the Paying Agent with respect to such money shall
cease.

     SECTION 7.04.  Reinstatement.  If the Trustee or the Paying Agent is unable
to apply any money or U.S. Government Obligations in accordance with Section
7.01 by reason of any legal proceeding or by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, the obligations of the Company and the Guarantors
under this Indenture and the Securities shall be revived and reinstated as
though no deposit had occurred pursuant to Section 7.01 until such time as the
Trustee or the Paying Agent is permitted to apply all such money or U.S.
Government Obligations in accordance with Section 7.01; provided, however, that
if the Company or a Guarantor has made any payment of principal of or interest
on any Securities because of the reinstatement of its obligations, the Company
or such Guarantor, as the case may be, shall be subrogated to the rights of the
Holders of such Securities to receive such payment from the money or U.S.
Government Obligations held by the Trustee or the Paying Agent.

                                  ARTICLE VIII

                                   AMENDMENTS

     SECTION 8.01.  Without Consent of Holders.  The Company, the Guarantors and
the Trustee may amend or supplement this Indenture or any of the Securities or
waive any provision hereof or thereof without the consent of any Holder:

          (1) to convey, transfer, assign, mortgage or pledge to the Trustee as
     security for the Securities any property or assets;

          (2) to evidence the succession of another Person to the Company or a
     Guarantor, or successive successions, and the assumption by the successor
     Person of the covenants, agreements and obligations of the Company or a
     Guarantor pursuant to Section 4.01 or 4.02;

          (3) to add to the covenants of the Company or the Guarantors such
     further covenants, restrictions, conditions or provisions as the Company or
     the Guarantors and the Trustee shall consider to be for the protection of
     the Holders of Securities, to surrender any right or power herein conferred
     upon the Company or the Guarantors, and to make the occurrence, or the
     occurrence and continuance, of a default in any such additional covenants,
     restrictions, conditions or provisions of an Event of Default permitting
     the enforcement of all or any of the several remedies provided in this
     Indenture as herein set forth, provided that in respect of any such
     additional covenant, restriction, condition or provision such amendment or
     supplemental indenture may provide for a particular period of grace after
     default (which period may be shorter or longer than that allowed in the
     case of other defaults) or may provide for an immediate enforcement upon
     such an Event of Default or may limit the remedies available to the Trustee
     upon such an Event of Default or may limit the right of the

                                        39
<PAGE>

     Holders of a majority in aggregate principal amount of the Securities to
     waive such an Event of Default;

          (4) to cure any ambiguity or to correct or supplement any provision
     contained herein or in any supplemental indenture which may be defective or
     inconsistent with any other provision contained herein or in any
     supplemental indenture, provided that no such action shall adversely affect
     the interests of the Holders of the Securities;

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

          (6) to comply with any requirements, including the requirement of the
     SEC, in order to effect or maintain the qualification of this Indenture
     under the TIA; and

          (7) to provide for any additional guarantees of the Securities or to
     make any other change that does not adversely affect the rights of any
     Holder.

     Upon the request of the Company and the Guarantors accompanied by a
resolution of the Board of Directors of each of the Company and the Guarantors
authorizing the execution of any such supplemental indenture, and upon receipt
by the Trustee of the documents described in Section 8.06, the Trustee shall
join with the Company and the Guarantors in the execution of any supplemental
indenture authorized or permitted by the terms of this Indenture and make any
further appropriate agreements and stipulations that may be therein contained.
After an amendment, supplement or waiver under this Section 8.01 becomes
effective, the Company shall mail to the Holders of each Security affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture or waiver.

     SECTION 8.02.  With Consent of Holders.  Except as provided below in this
Section 8.02, the Company, the Guarantors and the Trustee may amend or
supplement this Indenture with the written consent (including consents obtained
in connection with a tender offer or exchange offer for the Securities or a
solicitation of consents in respect of the Securities, provided that in each
case such offer or solicitation is made to all Holders of the Securities then
outstanding on equal terms) of the Holders of at least a majority in aggregate
principal amount of the Securities then outstanding affected thereby.

     Upon the request of the Company and the Guarantors accompanied by a
resolution of the Board of Directors of each of the Company and the Guarantors
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of the Holders as aforesaid,
and upon receipt by the Trustee of the documents described in Section 8.06, the
Trustee shall join with the Company and the Guarantors in the execution of such
supplemental indenture.

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

     The Holders of a majority in aggregate principal amount of the Securities
then outstanding may waive compliance in a particular instance by the Company or
the Guarantors with any provision of this Indenture or the Securities (including
waivers obtained in connection with a tender offer or exchange offer for the
Securities or a solicitation of consents in respect of the Securities, provided
that in each case such offer or solicitation is made to all Holders of the
Securities then outstanding on equal terms).

     Without the consent of each Holder affected, an amendment, supplement or
waiver under this Section 8.02 may not:

          (1) extend the final maturity of the principal of any of the
     Securities;

          (2) reduce the principal amount of any of the Securities;

                                        40
<PAGE>

          (3) reduce the rate or extend the time of payment of interest,
     including default interest, or Additional Amounts, if any, on any of the
     Securities;

          (4) reduce any amount payable on redemption of any of the Securities;

          (5) change the currency in which the principal of or premium, if any,
     Additional Amounts, if any, or interest on any of the Securities is
     payable;

          (6) impair the right to institute suit for the enforcement of any
     payment of principal of or premium, if any, Additional Amounts, if any, or
     interest on any Security pursuant to Sections 5.07 and 5.08, except as
     limited by Section 5.06;

          (7) make any change in the percentage of principal amount of the
     Securities necessary to waive compliance with or to modify certain
     provisions of this Indenture pursuant to Section 5.04 or 5.07 or this
     clause of this Section 8.02; or

          (8) waive a continuing Default or Event of Default in the payment of
     principal of or premium, if any, Liquidated Damages, if any, Additional
     Amounts, if any, or interest, including default interest, on the
     Securities.

     The right of any Holder to participate in any consent required or sought
pursuant to any provision of this Indenture (and the obligation of the Company
to obtain any such consent otherwise required from such Holder) may be subject
to the requirement that such Holder shall have been the Holder of record of the
Securities as of a date identified by the Trustee in a notice furnished to
Holders in accordance with the terms of this Indenture.

     SECTION 8.03.  Compliance with Trust Indenture Act.  Every amendment to
this Indenture or the Securities shall comply in form and substance with the TIA
as then in effect.

     SECTION 8.04.  Revocation and Effect of Consents.  A consent to an
amendment (which includes a supplement) or waiver by a Holder is a continuing
consent by the Holder and every subsequent Holder of a Security or portion of a
Security that evidences the same debt as the consenting Holder's Security, even
if notation of the consent is not made on any Security. However, any such Holder
or subsequent Holder may revoke the consent as to its Security or portion of a
Security if the Trustee receives written notice of revocation at any time prior
to (but not after) the date the Trustee receives an Officers' Certificate
certifying that the Holders of the requisite principal amount of Securities have
consented (and not theretofore revoked such consent) to the amendment,
supplement or waiver. An amendment, supplement or waiver becomes effective in
accordance with its terms and thereafter binds every Holder, and a consent
thereto given in connection with a tender of a Holder's Securities shall not be
rendered invalid by such tender.

     The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment or
waiver or to take any other action with respect to the Securities under this
Indenture. If a record date is fixed, then notwithstanding the provisions of the
immediately preceding paragraph, those Persons who were Holders at such record
date (or their duly designated proxies), and only those Persons, shall be
entitled to consent to such amendment, supplement or waiver or to revoke any
consent previously given, whether or not such Persons continue to be Holders
after such record date. No consent shall be valid or effective for more than 90
days after such record date unless consents from Holders of the principal amount
of the Securities required hereunder for such amendment or waiver to be
effective shall have also been given and not revoked within such 90-day period.

     After an amendment, supplement or waiver becomes effective, it shall bind
every Holder, unless it is of the type described in any of clauses (1) through
(8) of Section 8.02. In such case, the amendment, supplement or waiver shall
bind each Holder who has consented to it and every subsequent Holder that
evidences the same debt as the consenting Holder's Security.

     SECTION 8.05.  Notation on or Exchange of Securities.  If an amendment
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee may

                                        41
<PAGE>

place an appropriate notation on the Security regarding the changed terms and
return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Security shall issue and the Trustee
shall authenticate a new Security that reflects the changed terms. Failure to
make the appropriate notation or to issue a new Security shall not affect the
validity of such amendment.

     SECTION 8.06.  Trustee to Sign Amendments, etc.  The Trustee shall sign any
amendment, waiver or supplemental indenture authorized pursuant to this Article
VIII if the amendment, waiver or supplemental indenture does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. If it does,
the Trustee may, but need not, sign it. In signing or refusing to sign such
amendment, waiver or supplemental indenture, the Trustee shall receive, and
subject to Section 6.01, shall be fully protected in relying upon, an Opinion of
Counsel and an Officers' Certificate, as conclusive evidence that all conditions
precedent to such amendment, waiver or supplemental indenture have been complied
with, that such amendment, waiver or supplemental indenture is authorized or
permitted by this Indenture, that it is not inconsistent herewith, and that it
will be valid and binding upon the Company and the Guarantors in accordance with
its terms.

                                   ARTICLE IX

                            GUARANTEES OF SECURITIES

     SECTION 9.01.  Unconditional Guarantees.

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

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

     Each Guarantor hereby agrees that in the event of a default in payment of
the principal of or premium, if any, Liquidated Damages, if any, Additional
Amounts, if any, or interest on the Securities or any other amounts payable
under this Indenture and the Securities by the Company, whether at the Stated

                                        42
<PAGE>

Maturity, upon redemption or by declaration of acceleration or otherwise, legal
proceedings may be instituted by the Trustee on behalf of the Holders or,
subject to Section 5.06, by the Holders, on the terms and conditions set forth
in this Indenture, directly against such Guarantor to enforce the Guarantees
without first proceeding against the Company or the other Guarantor.

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

     (d) Each Guarantor hereby (i) waives diligence, presentment, demand of
payment, notice of acceptance, filing of claims with a court in the event of the
merger, insolvency or bankruptcy of the Company or the Guarantors, and all
demands and notices whatsoever, (ii) acknowledges that any agreement, instrument
or document evidencing the Guarantees may be transferred and that the benefit of
its obligations hereunder shall extend to each holder of any agreement,
instrument or document evidencing the Guarantees without notice to them and
(iii) covenants that its Guarantees will not be discharged except by complete
performance of the Guarantees or of the obligations guaranteed thereby. Each
Guarantor further agrees that if at any time all or any part of any payment
theretofore applied by any Person to any Guarantee is, or must be, rescinded or
returned for any reason whatsoever, including, without limitation, the
insolvency, bankruptcy or reorganization of the Guarantor, such Guarantee shall,
to the extent that such payment is or must be rescinded or returned, be deemed
to have continued in existence notwithstanding such application, and the
Guarantees shall continue to be effective or be reinstated, as the case may be,
as though such application had not been made.

     (e) Each Guarantor shall be subrogated to all rights of the Holders and the
Trustee against the Company in respect of any amounts paid by the Guarantor
pursuant to the provisions of this Indenture; provided, however, that the
Guarantor shall not be entitled to enforce or to receive any payments arising

                                        43
<PAGE>

out of, or based upon, such right of subrogation with respect to any of the
Securities until all of the Securities and the Guarantees thereof shall have
been paid in full or discharged.

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

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

     SECTION 9.02.  Execution and Delivery of Notation of Guarantees.  To
further evidence the Guarantees, each Guarantor hereby agrees that on the date
of this Indenture a notation of such Guarantees may be endorsed on each Security
authenticated and delivered by the Trustee and executed by either manual or
facsimile signature of an Officer of the Guarantor.

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

     If an Officer of a Guarantor whose signature is on this Indenture or a
Security no longer holds that office, or if any other or additional Person shall
have become a "Guarantor" hereunder in accordance with Section 4.01 or 4.02
hereof, at the time the Trustee authenticates such Security or at any time
thereafter, the Guarantor's Guarantee of such Security shall be valid
nevertheless.

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

                                   ARTICLE X

                                   REDEMPTION

     SECTION 10.01.  Notices to Trustee.  If the Company elects to redeem the
Securities pursuant to the redemption provisions of Section 10.07, it shall
furnish to the Trustee, at least five days before notice of such redemption is
to be given pursuant to Section 10.03, an Officers' Certificate setting forth
the Redemption Date, the principal amount of such Securities to be redeemed and
the Redemption Price (or the method of calculating the Redemption Price).

     SECTION 10.02.  Selection of Securities to be Redeemed.  If less than all
of the Securities are to be redeemed, the Trustee shall select the Securities to
be redeemed by such method as the Trustee in its sole discretion shall deem fair
and appropriate. The particular Securities to be redeemed shall be selected,
unless otherwise provided herein, not less than five days before notice of such
redemption is to be given pursuant to Section 10.03 by the Trustee from the
outstanding Securities not previously called for redemption.

     The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in the case of any Security selected for partial
redemption, the principal amount thereof to be redeemed. Securities and portions
of them selected shall be in amounts of $1,000 or integral multiples thereof.
Except as provided in the preceding sentence, provisions of this Indenture that
apply to Securities called for redemption also apply to portions of Securities
called for redemption.

                                        44
<PAGE>

     SECTION 10.03.  Notices to Holders.

     (a) At least 20 days but not more than 75 days before a Redemption Date,
unless a different notice period is provided in the Securities, the Company
shall mail in conformity with Section 11.02 a notice of redemption to each
Holder whose Securities are to be redeemed. The notice shall identify the
Securities to be redeemed (including CUSIP numbers, if any) and shall state:

          (i) the Redemption Date;

          (ii) the Redemption Price (or the method of calculating the Redemption
     Price);

          (iii) if any Security is being redeemed in part, the portion of the
     principal amount of such Security to be redeemed and that, after the
     Redemption Date, upon surrender of such Security, a new Security or
     Securities in principal amount equal to the unredeemed portion will be
     issued;

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

          (v) that Securities called for redemption must be surrendered to the
     Paying Agent at the address specified in such notice to collect the
     Redemption Price;

          (vi) that unless the Company defaults in making the redemption
     payment, interest on Securities called for redemption ceases to accrue on
     and after the Redemption Date and the only remaining right of the Holders
     is to receive payment of the Redemption Price upon surrender to the Paying
     Agent of the Securities; and

          (vii) the aggregate principal amount of Securities being redeemed.

     If any of the Securities to be redeemed is in the form of a Global
Security, then the Company shall modify such notice to the extent necessary to
accord with the procedures of the Depositary applicable to redemptions.

     (b) At the Company's request, the Trustee shall give the notice required in
Section 10.03(a) in the Company's name; provided, however, that the Company
shall deliver to the Trustee, at least 15 days prior to the requested mailing
date (unless the Trustee consents in writing to a shorter period), an Officers'
Certificate requesting that the Trustee give such notice and setting forth the
information to be stated in such notice as provided in Section 10.03(a).

     SECTION 10.04.  Effect of Notices of Redemption.  Once notice of redemption
is mailed pursuant to Section 10.03, Securities called for redemption become due
and payable on the Redemption Date at the Redemption Price. Upon surrender to
the Paying Agent, such Securities shall be paid out at the Redemption Price.

     SECTION 10.05.  Deposit of Redemption Price.  At or prior to 11:00 a.m. New
York City time on the Redemption Date, the Company shall deposit with the
Trustee or with the Paying Agent immediately available funds sufficient to pay
the Redemption Price of all Securities to be redeemed on that date. The Trustee
or the Paying Agent shall return to the Company any money not required for that
purpose less the expenses of the Trustee as provided herein.

     If the Company complies with the preceding paragraph, interest on the
Securities or portions thereof to be redeemed (whether or not such Securities
are presented for payment) will cease to accrue on the applicable Redemption
Date. If any Security called for redemption shall not be so paid upon surrender
because of the failure of the Company to comply with the preceding paragraph,
then interest will be paid on the unpaid principal and premium, if any, from the
Redemption Date until such principal and premium are paid and, to the extent
lawful, on any interest not paid on such unpaid principal, in each case at the
rate provided in the Securities and in Section 3.01.

     SECTION 10.06.  Securities Redeemed in Part.  Upon surrender of a Security
that is redeemed in part, the Company shall issue and the Trustee shall
authenticate for the Holder, at the expense of the Company, a new Security equal
in principal amount to the unredeemed portion of the Security surrendered.

                                        45
<PAGE>

     SECTION 10.07.  Optional Redemption.  The Securities may be redeemed at any
time on such terms and subject to such conditions as are specified in such
Securities.

     Any redemption pursuant to this Section 10.07 shall be made, to the extent
applicable, pursuant to the provisions of Sections 10.01 through 10.06.

                                   ARTICLE XI

                                 MISCELLANEOUS

     SECTION 11.01.  Trust Indenture Act Controls.  If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control. If this Indenture excludes any provision of the TIA that is
required to be included, such provision shall be deemed included herein.

     SECTION 11.02.  Notices.  Any notice or communication by the Company, the
Guarantors or the Trustee to the others is duly given if in writing and
delivered in person or mailed by first-class mail (registered or certified,
return receipt requested), telecopier or overnight air courier guaranteeing next
day delivery, to the other's address:

          If to the Company:

          Nabors Holdings 1, ULC
          3000, 500-4th Avenue, S.W.
          Calgary, Alberta T2P 2V6
          Attention: Chief Financial Officer
          Telephone No.: (403) 263-6777
          Telecopier No.: (403) 237-8001

          If to either Guarantor, to it at:

          Nabors Industries, Inc.
          515 West Greens Road, Suite 1200
          Houston, Texas 77067
          Attention: General Counsel
          Telephone No.: (281) 874-0035
          Telecopier No.: (281) 775-8431

          If to the Trustee:

          Bank One, N.A.
          1111 Polaris Parkway, Suite 1K, OH1-0181
          Columbus, Ohio 43240
          Attention: Global Corporate Trust Services Group
          Telephone No.: (614) 248-6229
          Telecopier No.: (614) 248-5195

     Each of the Company, the Guarantors and the Trustee by notice to the others
may designate additional or different addresses for subsequent notices or
communications.

     All notices and communications shall be deemed to have been duly given: at
the time delivered by hand, if personally delivered; five Business Days after
being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Notwithstanding the foregoing, notices to the Trustee shall be effective only
upon receipt.

     Any notice or communication to a Holder shall be mailed by first-class
mail, postage prepaid, to the Holder's address shown on the register kept by the
Registrar. Failure to mail a notice or communication to a Holder or any defect
in it shall not affect its sufficiency with respect to other Holders.

                                        46
<PAGE>

     If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.

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

     All notices or communications, including, without limitation, notices to
the Trustee or the Company or the Guarantors by Holders, shall be in writing,
except as set forth below, and in the English language.

     In case by reason of the suspension of regular mail service, or by reason
of any other cause, it shall be impossible to mail any notice required by this
Indenture, then such method of notification as shall be made with the approval
of the Trustee shall constitute a sufficient mailing of such notice.

     SECTION 11.03.  Communication by Holders with Other Holders.  Holders may
communicate pursuant to TIA Section 312(b) with other Holders with respect to
their rights under this Indenture, the Securities or the Guarantees. The
Company, the Guarantors, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).

     SECTION 11.04.  Certificate and Opinion as to Conditions Precedent.  Upon
any request or application by the Company or a Guarantor to the Trustee to take
any action under this Indenture, the Company or the Guarantor shall, if
requested by the Trustee, furnish to the Trustee:

          (1) an Officers' Certificate (which shall include the statements set
     forth in Section 11.05 hereof) stating that, in the opinion of the signers,
     all conditions precedent and covenants, if any, provided for in this
     Indenture relating to the proposed action have been complied with; and

          (2) an Opinion of Counsel (which shall include the statements set
     forth in Section 11.05 hereof) stating that, in the opinion of such
     counsel, all such conditions precedent and covenants have been complied
     with.

     Notwithstanding the foregoing, no such Opinion of Counsel shall be required
in connection with the issuance of the Original Securities pursuant to the
Offering or of Series B Securities pursuant to the Exchange Offer.

     SECTION 11.05.  Statements Required in Certificate or Opinion.  Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:

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

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

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

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

     SECTION 11.06.  Rules by Trustee and Agents.  The Trustee may make
reasonable rules for action by or at a meeting of Holders. The Registrar or the
Paying Agent may make reasonable rules and set reasonable requirements for its
functions.

     SECTION 11.07.  Legal Holidays.  If a payment date is a Legal Holiday at a
place of payment, payment may be made at that place on the next succeeding day
that is not a Legal Holiday, and no interest shall accrue for the intervening
period.

     SECTION 11.08.  No Recourse Against Others.  A director, officer, employee
or stockholder of the Company or a Guarantor, as such, shall not have any
liability for any obligations of the Company or the Guarantor under the
Securities, the Guarantees or this Indenture or for any claim based on, in
respect of

                                        47
<PAGE>

or by reason of such obligations or their creation. Each Holder by accepting a
Security waives and releases all such liability. The waiver and release shall be
part of the consideration for the issue of the Securities.

     SECTION 11.09.  Governing Law.  This Indenture, the Securities and the
Guarantees shall be governed by and constructed in accordance with the laws of
the State of New York.

     SECTION 11.10.  Consent to Jurisdiction and Service of Process.  The
Company and the Bermuda Guarantor are not organized under the laws the United
States (including the States thereof and the District of Columbia) and therefore
each of them hereby appoints the U.S. Guarantor as the authorized agent thereof
(the "Authorized Agent") upon whom process may be served in any action, suit or
proceeding arising out of or based on this Indenture or the Securities which may
be instituted in the Supreme Court of the State of New York or the United States
District Court for the Southern District of New York, in either case in the
Borough of Manhattan, The City of New York, by the Holder of any Security, and
to the fullest extent permitted by applicable law, each of the Company and the
Bermuda Guarantor hereby waives any objection which it may now or hereafter have
to the laying of venue of any such proceeding and expressly and irrevocably
accepts and submits, for the benefit of the Holders from time to time of the
Securities, to the nonexclusive jurisdiction of any such court in respect of any
such action, suit or proceeding, for itself and with respect to its properties,
revenues and assets. Such appointment shall be irrevocable unless and until the
appointment of a successor authorized agent for such purpose, and such
successor's acceptance of such appointment, shall have occurred. Each of the
Company and the Bermuda Guarantor agrees to take any and all actions, including
the filing of any and all documents and instruments, that may be necessary to
continue such appointment in full force and effect as aforesaid. Service of
process upon the Authorized Agent with respect to any such action shall be
deemed, in every respect, effective service of process upon the Company or the
Bermuda Guarantor, as the case may be. Notwithstanding the foregoing, any action
against the Company or the Bermuda Guarantor arising out of or based on any
Security or the Guarantees may also be instituted by the Holder of such Security
in any court in the jurisdiction of organization of the Company or the Bermuda
Guarantor, as the case may be, and each of the Company and the Bermuda Guarantor
expressly accepts the jurisdiction of any such court in any such action. The
U.S. Guarantor hereby accepts the foregoing appointment as agent for service of
process.

     SECTION 11.11.  Waiver of Immunity.  To the extent that the Company or the
Bermuda Guarantor or any of its properties, assets or revenues may have or may
hereafter become entitled to, or have attributed to it, any right of immunity,
on the grounds of sovereignty or otherwise, from any legal action, suit or
proceeding, from the giving of any relief in any thereof, from set-off or
counterclaim, from the jurisdiction of any court, from service of process, from
attachment upon or prior to judgment, from attachment in aid of execution of
judgment, or from execution of judgment, or other legal process or proceeding
for the giving of any relief or for the enforcement of any judgment, in any
jurisdiction in which proceedings may at any time be commenced, with respect to
its obligations, liabilities or any other matter under or arising out of or in
connection with this Indenture or the Securities, each of the Company and the
Bermuda Guarantor, to the maximum extent permitted by law, hereby irrevocably
and unconditionally waives, and agrees not to plead or claim, any such immunity
and consents to such relief and enforcement.

     SECTION 11.12.  Judgment Currency.  Each of the Company and the Bermuda
Guarantor agrees to indemnify the Trustee and each Holder against any loss
incurred by it as a result of any judgment or order being given or made and
expressed and paid in a currency (the "Judgment Currency") other than U.S.
dollars and as a result of any variation as between (i) the rate of exchange at
which the U.S. dollar amount is converted into the Judgment Currency for the
purpose of such judgment or order and (ii) the spot rate of exchange in The City
of New York at which the Trustee or such Holder on the date of payment of such
judgment or order is able to purchase U.S. dollars with the amount of the
Judgment Currency actually received by the Trustee or such Holder. The foregoing
indemnity shall constitute a separate and independent obligation of each of the
Company and the Bermuda Guarantor and shall continue in full force and effect
notwithstanding any such judgment or order as aforesaid. The term "spot rate of
exchange" shall include any premiums and costs of exchange payable in connection
with the purchase of, or conversion into, U.S. dollars.

                                        48
<PAGE>

     SECTION 11.13.  No Adverse Interpretation of Other Agreements.  This
Indenture may not be used to interpret another indenture, loan or debt agreement
of the Company, the Guarantors or any other Subsidiary of the Bermuda Guarantor.
Any such indenture, loan or debt agreement may not be used to interpret this
Indenture.

     SECTION 11.14.  Successors.  All agreements of the Company and the
Guarantors in this Indenture and the Securities shall bind their respective
successors. All agreements of the Trustee in this Indenture shall bind its
successor.

     SECTION 11.15.  Severability.  In case any provision in this Indenture or
in the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

     SECTION 11.16.  Counterpart Originals.  The parties may sign any number of
copies of this Indenture by manual or facsimile signature. Each signed copy
shall be an original, but all of them together represent the same agreement.

     SECTION 11.17.  Table of Contents, Headings, etc.  The Table of Contents
and headings of the Articles and Sections of this Indenture have been inserted
for convenience of reference only, are not to be considered a part hereof and
shall in no way modify or restrict any of the terms or provisions hereof.

                                        49
<PAGE>

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

                                          Company:

                                          NABORS HOLDINGS 1, ULC

                                          By /s/ Bruce P. Koch
                                          --------------------------------------
                                             Name: Bruce P. Koch
                                             Title: President

                                          U.S. Guarantor:

                                          NABORS INDUSTRIES, INC.

                                          By /s/ Anthony G. Petrello
                                          --------------------------------------
                                             Name: Anthony G. Petrello
                                             Title: President and Chief
                                                    Operating Officer

                                          Bermuda Guarantor:

                                          NABORS INDUSTRIES, LTD.

                                          By /s/ Daniel McLachlin
                                          --------------------------------------
                                             Name: Daniel McLachlin
                                             Title: Vice President and
                                                    Corporate Secretary
                                             Signed in St. Michael, Barbados

                                          Trustee:

                                          BANK ONE, NA., as Trustee

                                          By: /s/ Josie Hixon
                                          --------------------------------------
                                              Name: Josie Hixon
                                              Title: Vice President

                                        50
<PAGE>

                                                                       EXHIBIT A

                                FACE OF SECURITY

                             GLOBAL SECURITY LEGEND

     UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY 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 SHALL ACT AS THE DEPOSITARY UNTIL A
SUCCESSOR SHALL BE APPOINTED BY THE COMPANY AND THE REGISTRAR. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.*

                            PRIVATE PLACEMENT LEGEND

     THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST
OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. BY
ITS ACQUISITION OF THIS SECURITY OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:

          1.  AGREES, ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT
     FOR WHICH IT HAS PURCHASED SECURITIES, THAT IT WILL OFFER, SELL OR
     OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE DATE (THE "RESALE
     RESTRICTION TERMINATION DATE") THAT IS TWO YEARS AFTER THE LATER OF THE
     ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH EITHER THE COMPANY OR
     ANY OF ITS AFFILIATES WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
     SUCH SECURITY), ONLY (A) TO NABORS INDUSTRIES LTD. OR ANY OF ITS
     SUBSIDIARIES, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN
     DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
     SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT
     REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER, AS DEFINED IN RULE
     144A, THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
     INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE
     IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR

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

* This paragraph should be included only if the Security is a Global Security.
                                   Exhibit A-1
<PAGE>

     OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S, OR (E)
     PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
     REQUIREMENTS OF THE SECURITIES ACT AND, IN EACH OF THE CASES ABOVE, IN
     ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
     STATES OR ANY OTHER APPLICABLE JURISDICTION; AND

          2.  AGREES THAT, BEFORE THE HOLDER OFFERS, SELLS OR OTHERWISE
     TRANSFERS THIS SECURITY, THE COMPANY AND THE REGISTRAR MAY REQUIRE THE
     HOLDER OF THIS SECURITY TO DELIVER A WRITTEN OPINION OF COUNSEL,
     CERTIFICATIONS AND/OR OTHER INFORMATION THAT THEY REASONABLY REQUIRE TO
     CONFIRM THAT SUCH PROPOSED TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION
     FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

     AS USED IN THIS SECURITY, THE TERMS "OFFSHORE TRANSACTION," "U.S. PERSON"
AND "UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM WITHIN REGULATION S.

     THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE.

     BY ITS ACQUISITION OF THIS SECURITY THE HOLDER THEREOF WILL BE DEEMED TO
HAVE REPRESENTED AND WARRANTED THAT EITHER (I) NO PORTION OF THE ASSETS USED BY
SUCH HOLDER TO ACQUIRE AND HOLD THIS SECURITY CONSTITUTES THE ASSETS OF AN
EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO TITLE I OF THE U.S. EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OF PLANS, INDIVIDUAL
RETIREMENT ACCOUNTS OR OTHER ARRANGEMENTS THAT ARE SUBJECT TO SECTION 4975 OF
THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") OR PROVISIONS
UNDER ANY FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE
SIMILAR TO SUCH PROVISIONS OR ERISA OR THE CODE ("SIMILAR LAWS"), OR OF AN
ENTITY WHOSE UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE "PLAN ASSETS" OF SUCH
PLANS, ACCOUNTS OR ARRANGEMENTS, OR (II) THE PURCHASE AND HOLDING OF THIS
SECURITY WILL NOT CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION
406 OF ERISA OR SECTION 4975 OF THE CODE OR A SIMILAR VIOLATION UNDER ANY
APPLICABLE SIMILAR LAWS.**

                 REGULATION S TEMPORARY GLOBAL SECURITY LEGEND

     THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL SECURITY, AND
THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED
SECURITIES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE
HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL SECURITY
SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON.***

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

** These paragraphs should be included only if the Security is a Restricted
   Definitive Security or a Restricted Global Security.

*** This paragraph should be included only if the Security is a Regulation S
    Temporary Global Security.
                                   Exhibit A-2
<PAGE>

                              144A SECURITY LEGEND

     EACH PURCHASER OF THE SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS
SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.****

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

**** This paragraph should be included only if the Security is a Series A
     Security that is a 144A Global Security or a Definitive Security sold to
     QIBs pursuant to Rule 144A.
                                   Exhibit A-3
<PAGE>

                             NABORS HOLDINGS 1, ULC

                    4.875% SERIES [A/B] SENIOR NOTE DUE 2009

CUSIP No. 629570 AA 0                                                $

     Nabors Holdings 1, ULC, an unlimited liability company organized under the
laws of the province of Nova Scotia, Canada (the "Company"), for value received
promises to pay to           or registered assigns, the principal sum of
$          Dollars [or such greater or lesser amount as is indicated on the
Schedule of Exchanges of Securities on the other side of this Security*] on
August 15, 2009.

         Interest Payment Dates:  February 15 and August 15

         Record Dates:  February 1 and August 1

     Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

     IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by one of its duly authorized officers.

Dated:

                                          NABORS HOLDINGS 1, ULC

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

Certificate of Authentication:

BANK ONE, N.A.,
as Trustee, certifies that this is one
of
the Securities referred to in the
within-
mentioned Indenture.

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

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

* This phrase should be included only if the Security is a Global Security.
                                   Exhibit A-4
<PAGE>

                              REVERSE OF SECURITY

                             NABORS HOLDINGS 1, ULC

                     4.875% SERIES A/B SENIOR NOTE DUE 2009

     This Security is one of a duly authorized issue of 4.875% Series A/B Senior
Notes due 2009 (the "Securities") of Nabors Holdings 1, ULC, an unlimited
liability company organized under the laws of the province of Nova Scotia,
Canada (the "Company").

     1.  Interest.  The Company promises to pay interest on the principal amount
of this Security at 4.875% per annum from August 22, 2002 until maturity. The
Company will pay interest semiannually on February 15 and August 15 of each year
(each an "Interest Payment Date"), beginning February 15, 2003, or if any such
day is not a Business Day, on the next succeeding Business Day. Interest on this
Security will accrue from the most recent Interest Payment Date on which
interest has been paid or, if no interest has been paid, from August 22, 2002;
provided that if there is no existing Default in the payment of interest, and if
this Security is authenticated between a record date referred to on the face
hereof and the next succeeding Interest Payment Date, interest shall accrue from
such next succeeding Interest Payment Date. Further, the Company shall pay
interest on overdue principal, premium, if any, Liquidated Damages, if any, and
Additional Amounts, if any, from time to time on demand at a rate equal to the
interest rate then in effect; it shall pay interest, Liquidated Damages, if any,
and Additional Amounts, if any, on overdue installments of interest (without
regard to any applicable grace periods) from time to time on demand at the same
rate to the extent lawful. Interest will be computed on the basis of a 360-day
year of twelve 30-day months.

     2.  Method of Payment.  The Company will pay interest on this Security
(except defaulted interest) to the Persons who are registered Holders of this
Security at the close of business on the record date next preceding the Interest
Payment Date, even if this Security is canceled after such record date and on or
before such Interest Payment Date. The Holder must surrender this Security to a
Paying Agent to collect payments of principal and premium, if any. The Company
will pay the principal of and premium, if any, Liquidated Damages, if any, and
Additional Amounts, if any, and interest on this Security in money of the United
States of America that at the time of payment is legal tender for payment of
public and private debts. Payments in respect of the Securities represented by a
Global Security (including principal, premium, if any, Liquidated Damages, if
any, Additional Amounts, if any, and interest) will be made by wire transfer of
immediately available funds to the accounts specified by The Depository Trust
Company. The Company will make all payments in respect of a certificated
Security (including principal, premium, if any, Liquidated Damages, if any,
Additional Amounts, if any, and interest) at the Corporate Trust Office of the
Trustee or by mailing a check to the registered address of each Holder thereof;
provided, however, that payments on a certificated Security will be made by wire
transfer to a U.S. dollar account maintained by the payee with a bank in the
United States if such Holder elects payment by wire transfer by giving written
notice to the Trustee or the Paying Agent to such effect designating such
account no later than 30 days immediately preceding the relevant due date for
payment (or such other date as the Trustee may accept in its discretion).

     3.  Ranking and Guarantees.  This Security is a senior unsecured obligation
of the Company and is guaranteed pursuant to guarantees (the "Guarantees") by
Nabors Industries, Inc., a Delaware corporation, and Nabors Industries Ltd., a
Bermuda exempted company (together, the "Guarantors"). The Guarantees are senior
unsecured obligations of the Guarantors. References herein to the Indenture or
the Securities shall be deemed also to refer to the Guarantees set forth in the
Indenture except where the context otherwise requires.

     4.  Optional Redemption.  This Security will be redeemable, in whole or in
part, at any time, at the Company's option, at a Redemption Price equal to the
greater of (1) 100% of the principal amount of this Security then outstanding to
be redeemed, or (2) the sum of the present values of the remaining scheduled
payments of principal and interest thereon (exclusive of interest accrued to the
Redemption Date) computed by discounting such payments to the Redemption Date on
a semiannual basis (assuming

                                   Exhibit A-5
<PAGE>

a 360-day year consisting of twelve 30-day months) at a rate equal to the sum of
25 basis points plus the Adjusted Treasury Rate on the third Business Day prior
to the Redemption Date, as calculated by an Independent Investment Banker, plus
accrued and unpaid interest, up to, but not including the Redemption Date.

     "Adjusted Treasury Rate" means, with respect to any Redemption Date, 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 U.S. Treasury securities adjusted to constant maturity
under the caption "Treasury Constant Maturities" for the maturity corresponding
to the Optional Redemption Comparable Treasury Issue (if no maturity is within
three months before or after the remaining term of this Security, yields for the
two published maturities most closely corresponding to the Optional Redemption
Comparable Treasury Issue will be determined and the Adjusted Treasury Rate will
be interpolated or extrapolated from such yields on a straight line basis,
rounding to the nearest month); or if such release (or any successor release) is
not published during the week preceding the calculation date or does not contain
such yields, the rate per annum equal to the semiannual equivalent yield to
maturity of the Optional Redemption Comparable Treasury Issue, calculated using
a price for the Optional Redemption Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Optional Redemption Comparable
Treasury Price for such redemption date.

     "Independent Investment Banker" means Lehman Brothers Inc., or if such firm
is unwilling or unable to serve as such, an independent investment and banking
institution of national standing appointed by the Trustee.

     "Optional Redemption Reference Treasury Dealer" means each of up to five
dealers to be selected by the Company and the Guarantors, and their respective
successors; provided that if any of the foregoing ceases to be, and has no
affiliate that is, a primary U.S. governmental securities dealer (a "Primary
Treasury Dealer"), the Company and the Guarantors will substitute for it another
Primary Treasury Dealer.

     "Optional Redemption Comparable Treasury Issue" means the U.S. Treasury
security selected by an Independent Investment Banker as having a maturity
comparable to the remaining term of the Securities to be redeemed 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 comparable
maturity to the remaining term of this Security, or, if, in the reasonable
judgment of the Independent Investment Banker, there is no such security, then
the Optional Redemption Comparable Treasury Issue will mean the U.S. Treasury
security or securities selected by the Independent Investment Banker as having
an actual or interpolated maturity or maturities comparable to the remaining
term of this Security.

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

     "Optional Redemption Reference Treasury Dealer Quotations" means, with
respect to each Optional Redemption Reference Treasury Dealer and any Redemption
Date for this Security, the average, as determined by the Independent Investment
Banker of the bid and asked prices for the Optional Redemption Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Independent Investment Banker and the Trustee at 5:00
p.m., New York City time, on the third Business Day preceding such Redemption
Date.

     5.  Optional Redemption for Changes in Canadian Withholding Taxes.  The
Securities will be subject to redemption in whole, but not in part, at the
Company's option and at any time, on not fewer than 30 days' nor more than 60
days' prior notice, at a Redemption Price equal to 100% of their principal

                                   Exhibit A-6
<PAGE>

amount, plus accrued and unpaid interest, if any, and Liquidated Damages, if
any, up to, but not including, the Redemption Date, in the event that either the
Company, the Guarantors or any other obligor under the Securities, as the case
may be, has become, or would become, obligated to pay, on the next date on which
any amount would be payable with respect to these Securities, any Additional
Amounts relating to any present or future Taxes, and provided that the
obligation to pay Additional Amounts results from a change in the taxing laws
and/or regulations of Canada that is announced or becomes effective on or after
the Issue Date; provided, however: (1) no notice of redemption will be given
earlier than 60 days prior to the earliest date on which the Company, a
Guarantor or any other obligor under the Securities, as the case may be, would
be obligated to pay any of these Additional Amounts if a payment with respect to
this Security were then due; (2) at the time any redemption notice is given, the
obligation to pay these Additional Amounts must remain in effect through the
Redemption Date; and (3) such obligation to pay Additional Amounts cannot be
avoided by the Company by taking reasonable measures available to it that it
determines would not have an adverse impact on it. Prior to any redemption of
these Securities under these provisions, the Company will deliver to the Trustee
or any Paying Agent an Officers' Certificate stating that the Company is
entitled to effect the redemption and setting forth a statement of facts showing
that the conditions precedent to the right of redemption have occurred.

     6.  Paying Agent and Registrar.  Initially, Bank One, N.A. (the "Trustee"),
the Trustee under the Indenture, will act as Paying Agent and Registrar. The
Company may change any Paying Agent, Registrar, co-registrar or additional
paying agent without notice to any Holder. The Guarantor or any of its
Subsidiaries may act in any such capacity.

     7.  Indenture.  The Company issued this Security under an Indenture dated
as of August 22, 2002 (as amended, supplemented or otherwise modified from time
to time, the "Indenture") among the Company, the Guarantors and the Trustee. The
terms of this Security include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S. Code Sections 77aaa-77bbbb), as in effect on the date of execution of the
Indenture. This Security and the Guarantees are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of such
terms. Capitalized terms used but not defined in this Security have the
respective meanings given to such terms in the Indenture.

     8.  Denominations, Transfer, Exchange.  The Securities are issuable only in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of this Security may be registered and this
Security may be exchanged as provided in the Indenture. The Registrar and the
Trustee may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not exchange or register
the transfer of this Security during the period between a record date and the
corresponding Interest Payment Date.

     9.  Persons Deemed Owners.  The registered Holder of a Security shall be
treated as its owner for all purposes.

     10.  Amendments and Waivers.  Subject to certain exceptions and
limitations, the Indenture or this Security may be amended or supplemented with
the consent of the Holders of at least a majority in principal amount of the
then outstanding Securities, and compliance in a particular instance by the
Company or the Guarantors with any provision of the Indenture with respect to
the Securities may be waived (other than certain provisions, including any
continuing Default or Event of Default in the payment of the principal of or
premium, if any, Additional Amounts, if any, or interest on the Securities) by
the Holders of at least a majority in aggregate principal amount of the
Securities then outstanding in accordance with the terms of the Indenture.
Without the consent of any Holder, the Company, the Guarantors and the Trustee
may amend or supplement the Indenture or this Security to convey, transfer,
assign, mortgage or pledge to the Trustee as security for this Security any
property or assets; to evidence the succession of another entity to the Company
or a Guarantor, or successive successions, and the assumption by the successor
entity of the covenants, agreements and obligations of the Company or the
Guarantors pursuant to Section 4.01 or 4.02 of the Indenture; to add to the
covenants of the Company or

                                   Exhibit A-7
<PAGE>

the Guarantors such further covenants, restrictions, conditions or provisions as
the Company or the Guarantors and the Trustee shall consider to be for the
protection of the Holders of Securities, to surrender any right or power
conferred upon the Company or the Guarantors, and to make the occurrence, or the
occurrence and continuance, of a default in any such additional covenants,
restrictions, conditions or provisions of an Event of Default permitting the
enforcement of all or any of the several remedies provided in the Indenture,
provided that in respect of any such additional covenant, restriction, condition
or provision such amendment or supplemental indenture may provide for a
particular period of grace after default (which period may be shorter or longer
than that allowed in the case of other defaults) or may provide for an immediate
enforcement upon such an Event of Default or may limit the remedies available to
the Trustee upon such an Event of Default or may limit the right of the Holders
of a majority in aggregate principal amount of the Securities to waive such an
Event of Default; to cure any ambiguity or to correct or supplement any
provision contained in the Indenture or in any supplemental indenture which may
be defective or inconsistent with any other provision contained in the Indenture
or in any supplemental indenture, provided that no such action shall adversely
affect the interests of the Holders of this Security; to provide for
uncertificated Securities in addition to or in place of certificated Securities,
subject to the restrictions contained in the Indenture; to comply with any
requirements, including the requirements of the SEC, in order to effect or
maintain the qualification of the Indenture under the TIA; and to provide for
any additional guarantees of the Securities or make any other change that does
not adversely affect the rights under the Indenture of any Holder.

     The right of any Holder to participate in any consent required or sought
pursuant to any provision of the Indenture (and the obligation of the Company to
obtain any such consent otherwise required from such Holder) may be subject to
the requirement that such Holder shall have been the Holder of record of this
Security as of a date identified by the Trustee in a notice furnished to Holders
in accordance with the terms of the Indenture.

     11.  Defaults and Remedies.  Events of Default include: (i) default in the
payment of the principal of or premium, if any, on any Security at its Maturity,
and continuance of such default for a period of 10 days; or (ii) default in the
payment of interest, Liquidated Damages, if any, or Additional Amounts, if any,
upon any of the Securities when it becomes due and payable, and continuance of
such default for a period of 30 days; or (iii) default in the performance or
observance, or breach, of any covenant of the Company or a Guarantor in any
Security or the Indenture (other than a covenant a default in whose performance
or whose breach is elsewhere in Section 5.01 of the Indenture specifically dealt
with), and continuance of such default or breach for a period of 90 days after
there has been given, by registered or certified mail, to the Company and the
Guarantors by the Trustee or to the Company, the Guarantors and the Trustee by
the Holders of at least 25% in aggregate principal amount of the outstanding
Securities a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default" under the
Indenture; or (iv) certain events specified in the Indenture relating to the
bankruptcy, insolvency or reorganization of the Company or the Guarantors; or
(vi) the Guarantees cease to be in full force and effect or become unenforceable
or invalid or are declared null and void (other than in accordance with the
terms of such Guarantees) or a Guarantor denies or disaffirms its obligations
under such Guarantees.

     If an Event of Default (other than an Event of Default referred to in
clause (iv) of the preceding paragraph) with respect to this Security occurs and
is continuing, the Trustee by notice to the Company and the Guarantors, or by
the Holders of at least 25% in aggregate principal amount of the then
outstanding Securities by written notice to the Company, the Guarantors and the
Trustee, may declare the principal of and Liquidated Damages, if any, Additional
Amounts, if any, and interest on all then outstanding Securities to be due and
payable immediately. The amount due and payable upon the acceleration of any
Security is equal to 100% of the principal amount thereof plus Liquidated
Damages, if any, Additional Amounts, if any, and accrued interest to the date of
payment. Holders may not enforce the Indenture or this Security except as
provided in the Indenture. The Trustee does require indemnity reasonably
satisfactory to it before it enforces the Indenture or this Security. Subject to
certain limitations, Holders of a majority in aggregate principal amount of the
then outstanding Securities may direct the

                                   Exhibit A-8
<PAGE>

Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders notice of any continuing default (except a default in payment of
principal or premium, if any, or interest) if it determines that withholding
notice is in their interests. Each of the Company and the Guarantors must
furnish an annual compliance certificate to the Trustee.

     12.  Additional Amounts.  If the Company or a Guarantor is required to
withhold or deduct any amount for or on account of any Taxes for any payment
made under or with respect to this Security, it will pay any Additional Amounts.

     13.  Discharge or Defeasance Prior to Maturity.  The Indenture shall be
discharged and canceled upon the payment of all of the Securities and shall be
discharged or defeased except for certain obligations upon the irrevocable
deposit with the Trustee of cash, or U.S. Government Obligations or a
combination thereof sufficient for such payment.

     14.  Trustee Dealings with the Company and the Guarantors.  The Trustee in
its individual or any other capacity may become the owner or pledgee of this
Security and may otherwise deal with the Company, the Guarantors or any of their
Affiliates with the same rights it would have if it were not the Trustee.

     15.  No Recourse Against Others.  A director, officer, employee or
stockholder of the Company or the Guarantors, as such, shall not have any
liability for any obligations of the Company or the Guarantor under this
Security, the Guarantees or the Indenture or for any claim based on, in respect
of or by reason of such obligations or their creation. Each Holder by accepting
this Security waives and releases all such liability. The waiver and release are
part of the consideration for the issuance of this Security.

     16.  Authentication.  This Security shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose until
authenticated by the manual signature of an authorized signatory of the Trustee,
which signature shall be conclusive evidence that this Security has been
authenticated under the Indenture.

     17.  CUSIP Numbers.  Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
a CUSIP number to be printed on this Security as a convenience to the Holders of
this Security. No representation is made as to the correctness of such number
either as printed on this Security or as contained in any notice of a redemption
and that reliance may be placed only on the other identification numbers printed
on this Security.

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

     19.  Governing Law.  The Indenture, this Security and the Guarantees shall
be governed by and constructed in accordance with, the laws of the State of New
York.

     20.  Additional Rights and Obligations of Holders.  In addition to the
rights provided to Holders of Securities under the Indenture, this Security and
the Guarantees, Holders shall have all the rights set forth in the Registration
Rights Agreement, dated August 22, 2002 (the "Registration Rights Agreement"),
among the Company, the Guarantors and the Initial Purchaser. Each Holder, by his
acceptance thereof, acknowledges and agrees to the provisions of the
Registration Rights Agreement, including without limitation the obligations of
the Holders with respect to a registration and the indemnification of the
Company and the Guarantors to the extent provided therein. *

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

*This paragraph should be included only if the Security is a Series A Security.
                                   Exhibit A-9
<PAGE>

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

                            Nabors Industries, Inc.
                        515 West Greens Road, Suite 1200
                              Houston, Texas 77067
                           Attention: General Counsel
                         Telephone No.: (281) 874-0035
                         Telecopier No.: (281) 775-8431

                                   Exhibit A-10
<PAGE>

                          FORM OF NOTATION ON SECURITY

                             RELATING TO GUARANTEES

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

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

                                          Guarantors:

                                          NABORS INDUSTRIES, INC.

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

                                          NABORS INDUSTRIES LTD.

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

                                   Exhibit A-11
<PAGE>

                                ASSIGNMENT FORM

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

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

--------------------------------------------------------------------------------
             (INSERT ASSIGNEE'S SOCIAL SECURITY OR TAX I.D. NUMBER)

--------------------------------------------------------------------------------
             (PRINT OR TYPE ASSIGNEE'S NAME, ADDRESS AND ZIP CODE)

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

Date:
---------------------------

Your Signature:
--------------------------------------------------------------------------------
        (SIGN EXACTLY AS YOUR NAME APPEARS ON THE FACE OF THIS SECURITY)

Signature Guarantee:
--------------------------------------------------------------------------------
       (PARTICIPANT IN A RECOGNIZED SIGNATURE GUARANTY MEDALLION PROGRAM)

                                   Exhibit A-12
<PAGE>

                     SCHEDULE OF EXCHANGES OF SECURITIES**

     The following exchanges, redemptions or repurchases of a part of this
Global Security have been made:

<Table>
<Caption>
                                                          PRINCIPAL AMOUNT OF         SIGNATURE OF
             AMOUNT OF DECREASE    AMOUNT OF INCREASE       GLOBAL SECURITY       AUTHORIZED OFFICER,
  DATE OF    IN PRINCIPAL AMOUNT   IN PRINCIPAL AMOUNT       FOLLOWING SUCH            TRUSTEE OR
TRANSACTION  OF GLOBAL SECURITY    OF GLOBAL SECURITY    DECREASE (OR INCREASE)   SECURITIES CUSTODIAN
-----------  -------------------   -------------------   ----------------------   --------------------
<S>          <C>                   <C>                   <C>                      <C>
</Table>

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

** This Schedule should be included only if the Security is a Global Security.
                                   Exhibit A-13
<PAGE>

                                                                       EXHIBIT B

                                   [RESERVED]

                                   Exhibit B-1
<PAGE>

                                                                       EXHIBIT C

                        FORM OF CERTIFICATE OF TRANSFER

Nabors Holdings 1, ULC
3000, 500-4th Avenue, S.W.
Calgary, Alberta T2P 2V6
Attention: Chief Financial Officer

Bank One, N.A.
100 East Broad Street, 8th Floor
Columbus, Ohio 43215
Attention: Global Corporate Trust Services Group

           Re: 4.875% Senior Notes due 2009

     Reference is hereby made to the Indenture, dated as of August 22, 2002 (the
"Indenture"), among Nabors Holdings 1, ULC, as issuer (the "Company"), Nabors
Industries, Inc. and Nabors Industries Ltd., as guarantors (the "Guarantors"),
and Bank One, N.A., as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.

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

[CHECK ALL THAT APPLY]

     1.  [ ] CHECK IF TRANSFEREE IS A QIB IN ACCORDANCE WITH RULE 144A.  The
Transfer is being effected pursuant to and in accordance with Rule 144A under
the U.S. Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Security is being transferred to a Person that the
Transferor reasonably believed and believes is purchasing the beneficial
interest or Definitive Security for its own account, or for one or more accounts
with respect to which such Person exercises sole investment discretion, and such
Person and each such account is a "qualified institutional buyer" within the
meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and
such Transfer is in compliance with any applicable blue sky securities laws of
any State of the United States. Upon consummation of the proposed Transfer in
accordance with the terms of the Indenture, the transferred beneficial interest
or Definitive Security will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Global Security and/or
the Definitive Security and in the Indenture and the Securities Act.

     2.  [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY PURSUANT TO
REGULATION S.  The Transfer is being effected pursuant to and in accordance with
Regulation S under the Securities Act and, accordingly, the Transferor hereby
further certifies that (i) the Transfer is not being made to a person in the
United States and (x) at the time the buy order was originated, the Transferee
was outside the United States or such Transferor and any Person acting on its
behalf reasonably believed and believes that the Transferee was outside the
United States or (y) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S under the Securities Act, (iii) the transaction is not
part of a plan or scheme to evade the registration requirements of the
Securities Act and (iv) if the proposed transfer is being made prior to the
expiration of the Distribution Compliance Period, the transfer is not being made
to a U.S. Person or for the account or benefit of a U.S. Person (other than an
Initial Purchaser). Upon consummation of the proposed transfer in accordance
with the terms of the Indenture,

                                   Exhibit C-1
<PAGE>

the transferred beneficial interest or Definitive Security will be subject to
the restrictions on Transfer enumerated in the Private Placement Legend printed
on the Global Security and/or the Definitive Security and in the Indenture and
the Securities Act.

     3.  [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY PURSUANT TO ANY
PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR
REGULATION S.  The Transfer is being effected in compliance with the transfer
restrictions applicable to beneficial interests in Restricted Global Securities
and Restricted Definitive Securities and pursuant to and in accordance with the
Securities Act and any applicable blue sky securities laws of any State of the
United States, and accordingly the Transferor hereby further certifies that
(check one):

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

          or

          (b) [ ] such Transfer is being effected to Nabors Industries Ltd. or
     any of its Subsidiaries;

          or

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

     4.  [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
AN UNRESTRICTED GLOBAL SECURITY OR OF AN UNRESTRICTED DEFINITIVE SECURITY.

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

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

                                   Exhibit C-2
<PAGE>

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

                                          [Insert Name of Transferor]

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

Dated:           ,

                                   Exhibit C-3
<PAGE>

                       ANNEX A TO CERTIFICATE OF TRANSFER

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

        [CHECK ONE OF (a) OR (b)]

             (a) [ ] a beneficial interest in the Global Security (CUSIP [  ]),
        or

             (b) [ ] a Restricted Definitive Security.

     2.  After the Transfer the Transferee will hold:

        [CHECK ONE]

             (a) [ ] a beneficial interest in the Global Security (CUSIP [  ];
        or

             (b) [ ] a Restricted Definitive Security; or

             (c) [ ] an Unrestricted Definitive Security, in accordance with the
        terms of the Indenture.

                                   Exhibit C-4
<PAGE>

                                                                       EXHIBIT D

                        FORM OF CERTIFICATE OF EXCHANGE

Nabors Holdings 1, ULC
3000, 500-4th Avenue, S.W.
Calgary, Alberta T2P 2V6
Attention: Chief Financial Officer

Bank One, N.A.
100 East Broad Street, 8th Floor
Columbus, Ohio 43215
Attention: Global Corporate Trust Services Group

           Re: 4.875% Senior Notes due 2009

     Reference is hereby made to the Indenture, dated as of August 22, 2002 (the
"Indenture"), among Nabors Holdings 1, ULC, as issuer (the "Company"), Nabors
Industries, Inc. and Nabors Industries Ltd., as guarantors (the "Guarantors"),
and Bank One, N.A., as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.

               (the "Owner") owns and proposes to exchange the Security[s] or
interest in such Security[s] specified herein, in the principal amount of
$          in such Security[s] or interests (the "Exchange"). In connection with
the Exchange, the Owner hereby certifies that:

          1.  EXCHANGE OF RESTRICTED DEFINITIVE SECURITIES OR BENEFICIAL
     INTERESTS IN A RESTRICTED GLOBAL SECURITY FOR UNRESTRICTED DEFINITIVE
     SECURITIES OR BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL SECURITY:

             (a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
        RESTRICTED GLOBAL SECURITY TO BENEFICIAL INTEREST IN AN UNRESTRICTED
        GLOBAL SECURITY.  In connection with the Exchange of the Owner's
        beneficial interest in a Restricted Global Security for a beneficial
        interest in an Unrestricted Global Security in an equal principal
        amount, the Owner hereby certifies (i) the beneficial interest is being
        acquired for the Owner's own account without transfer, (ii) such
        Exchange has been effected in compliance with the transfer restrictions
        applicable to the Global Securities and pursuant to and in accordance
        with the U.S. Securities Act of 1933, as amended (the "Securities Act"),
        (iii) the restrictions on transfer contained in the Indenture and the
        Private Placement Legend are not required in order to maintain
        compliance with the Securities Act and (iv) the beneficial interest in
        an Unrestricted Global Security is being acquired in compliance with any
        applicable blue sky securities laws of any State of the United States.

             (b) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
        RESTRICTED GLOBAL SECURITY TO UNRESTRICTED DEFINITIVE SECURITY. In
        connection with the Exchange of the Owner's beneficial interest in a
        Restricted Global Security for an Unrestricted Definitive Security, the
        Owner hereby certifies (i) the Definitive Security is being acquired for
        the Owner's own account without transfer, (ii) such Exchange has been
        effected in compliance with the transfer restrictions applicable to the
        Restricted Global Securities and pursuant to and in accordance with the
        Securities Act, (iii) the restrictions on transfer contained in the
        Indenture and the Private Placement Legend are not required in order to
        maintain compliance with the Securities Act and (iv) the Definitive
        Security is being acquired in compliance with any applicable blue sky
        securities laws of any State of the United States.

                                   Exhibit D-1
<PAGE>

             (c) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE SECURITY TO
        BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL SECURITY.  In connection
        with the Owner's Exchange of a Restricted Definitive Security for a
        beneficial interest in an Unrestricted Global Security, the Owner hereby
        certifies (i) the beneficial interest is being acquired for the Owner's
        own account without transfer, (ii) such Exchange has been effected in
        compliance with the transfer restrictions applicable to Restricted
        Definitive Securities and pursuant to and in accordance with the
        Securities Act, (iii) the restrictions on transfer contained in the
        Indenture and the Private Placement Legend are not required in order to
        maintain compliance with the Securities Act and (iv) the beneficial
        interest is being acquired in compliance with any applicable blue sky
        securities laws of any State of the United States.

             (d) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE SECURITY TO
        UNRESTRICTED DEFINITIVE SECURITY.  In connection with the Owner's
        Exchange of a Restricted Definitive Security for an Unrestricted
        Definitive Security, the Owner hereby certifies (i) the Unrestricted
        Definitive Security is being acquired for the Owner's own account
        without transfer, (ii) such Exchange has been effected in compliance
        with the transfer restrictions applicable to Restricted Definitive
        Securities and pursuant to and in accordance with the Securities Act,
        (iii) the restrictions on transfer contained in the Indenture and the
        Private Placement Legend are not required in order to maintain
        compliance with the Securities Act and (iv) the Unrestricted Definitive
        Security is being acquired in compliance with any applicable blue sky
        securities laws of any State of the United States.

     2.  EXCHANGE OF RESTRICTED DEFINITIVE SECURITIES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL SECURITIES FOR RESTRICTED DEFINITIVE SECURITIES OR BENEFICIAL
INTERESTS IN RESTRICTED GLOBAL SECURITIES

          (a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
     GLOBAL SECURITY TO RESTRICTED DEFINITIVE SECURITY.  In connection with the
     Exchange of the Owner's beneficial interest in a Restricted Global Security
     for a Restricted Definitive Security with an equal principal amount, the
     Owner hereby certifies that the Restricted Definitive Security is being
     acquired for the Owner's own account without transfer. Upon consummation of
     the proposed Exchange in accordance with the terms of the Indenture, the
     Restricted Definitive Security issued will continue to be subject to the
     restrictions on transfer enumerated in the Private Placement Legend printed
     on the Restricted Definitive Security and in the Indenture and the
     Securities Act.

          (b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE SECURITY TO
     BENEFICIAL INTEREST IN A RESTRICTED GLOBAL SECURITY.  In connection with
     the Exchange of the Owner's Restricted Definitive Security for a beneficial
     interest in the [CHECK ONE] 144A Global Security, Regulation S Global
     Security with an equal principal amount, the Owner hereby certifies (i) the
     beneficial interest is being acquired for the Owner's own account without
     transfer and (ii) such Exchange has been effected in compliance with the
     transfer restrictions applicable to the Restricted Global Securities and
     pursuant to and in accordance with the Securities Act, and in compliance
     with any applicable blue sky securities laws of any State of the United
     States. Upon consummation of the proposed Exchange in accordance with the
     terms of the Indenture, the beneficial interest issued will be subject to
     the restrictions on transfer enumerated in the Private Placement Legend
     printed on the relevant Restricted Global Security and in the Indenture and
     the Securities Act.

                                   Exhibit D-2
<PAGE>

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

                                          --------------------------------------
                                                  [INSERT NAME OF OWNER]

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

Dated:          ,

                                   Exhibit D-3

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