Document:

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                                                                     EXHIBIT 4.5
================================================================================

                              AMENDED AND RESTATED

                              DECLARATION OF TRUST

                                       OF

                        HANOVER COMPRESSOR CAPITAL TRUST

                         Dated as of December 15, 1999

===============================================================================
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                               TABLE OF CONTENTS

                                   ARTICLE I

                        Interpretation and Definitions

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

                                  ARTICLE II

                              Trust Indenture Act

Section 2.01   Trust Indenture Act; Application.....................   9
Section 2.02   Lists of Holders of Securities.......................   9
Section 2.03   Reports by the Property Trustee......................   9
Section 2.04   Periodic Reports to Property Trustee.................  10
Section 2.05   Evidence of Compliance with Conditions Precedent.....  10
Section 2.06   Events of Default; Waiver............................  10
Section 2.07   Event of Default; Notice.............................  12

                                  ARTICLE III

                                 Organization

Section 3.01   Name.................................................  12
Section 3.02   Office...............................................  12
Section 3.03   Purpose..............................................  13
Section 3.04   Authority............................................  13
Section 3.05   Title to Property of the Trust.......................  13
Section 3.06   Powers and Duties of the Administrative Trustees.....  13
Section 3.07   Prohibition of Actions by the Trust
                 and the Trustees...................................  16
Section 3.08   Powers and Duties of the Property Trustee............  17
Section 3.09   Certain Duties and Responsibilities of
                 the Property Trustee...............................  19
Section 3.10   Certain Rights of Property Trustee...................  20
Section 3.11   Delaware Trustee.....................................  22
Section 3.12   Execution of Documents...............................  23
Section 3.13   Not Responsible for Recitals or
                 Issuance of Securities.............................  23
Section 3.14   Duration of Trust....................................  23
Section 3.15   Mergers..............................................  23

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                                  ARTICLE IV

                                    Sponsor

Section 4.01   Sponsor's Purchase of Common Securities..............  25
Section 4.02   Responsibilities of the Sponsor......................  25
Section 4.03   Guarantee of Payment of Trust Obligations............  25

                                   ARTICLE V

                                   Trustees

Section 5.01   Number of Trustees...................................  26
Section 5.02   Delaware Trustee.....................................  26
Section 5.03   Property Trustee; Eligibility........................  27
Section 5.04   Qualifications of Administrative Trustees
                 and Delaware Trustee  Generally....................  27
Section 5.05   Initial Trustees.....................................  27
Section 5.06   Appointment, Removal and Resignation of Trustees.....  28
Section 5.07   Vacancies among Trustees.............................  31
Section 5.08   Effect of Vacancies..................................  31
Section 5.09   Meetings.............................................  31
Section 5.10   Delegation of Power..................................  32
Section 5.11   Merger, Conversion, Consolidation
                 or Succession to Business..........................  32

                                  ARTICLE VI

                                 Distributions

Section 6.01   Distributions........................................  32

                                  ARTICLE VII

                            Issuance of Securities

Section 7.01   General Provisions Regarding Securities..............  33
Section 7.02   Execution and Authentication.........................  33
Section 7.03   Form and Dating......................................  34
Section 7.04   Registrar, Paying Agent and Conversion Agent.........  36
Section 7.05   Paying Agent to Hold Money in Trust..................  36
Section 7.06   Replacement Securities...............................  37
Section 7.07   Outstanding Preferred Securities.....................  37
Section 7.08   Preferred Securities in Treasury.....................  37
Section 7.09   Temporary Securities.................................  38
Section 7.10   Cancellation.........................................  38

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                                 ARTICLE VIII

                     Dissolution and Termination of Trust

Section 8.01   Termination of Trust.................................  38

                                  ARTICLE IX

                             Transfer and Exchange

Section 9.01   General..............................................  39
Section 9.02   Transfer Procedures and Restrictions.................  40
Section 9.03   Deemed Security Holders..............................  45
Section 9.04   [Reserved]...........................................  45
Section 9.05   Notices to Clearing Agency...........................  45
Section 9.06   Appointment of Successor Clearing Agency.............  45

                                   ARTICLE X

         Limitation of Liability of Holders of Securities, Trustees or
                                    Others

Section 10.01  Liability............................................  46
Section 10.02  Exculpation..........................................  46
Section 10.03  Fiduciary Duty.......................................  47
Section 10.04  Indemnification......................................  47
Section 10.05  Outside Businesses...................................  48

                                  ARTICLE XI

                                  Accounting

Section 11.01  Fiscal Year..........................................  48
Section 11.02  Certain Accounting Matters...........................  49
Section 11.03  Banking..............................................  49
Section 11.04  Withholding..........................................  49

                                  ARTICLE XII

                            Amendments and Meetings

Section 12.01  Amendments...........................................  50
Section 12.02  Meetings of the Holders of Securities; Action
                by Written Consent..................................  51

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                                 ARTICLE XIII

           Representations of Property Trustee and Delaware Trustee

Section 13.01  Representations and Warranties of Property Trustee...  52
Section 13.02  Representations and Warranties of Delaware Trustee...  53

                                  ARTICLE XIV

                              Registration Rights

Section 14.01  Registration Rights..................................  54

                                  ARTICLE XV

                                 Miscellaneous

Section 15.01  Notices..............................................  54
Section 15.02  Governing Law........................................  55
Section 15.03  Intention of the Parties.............................  56
Section 15.04  Headings.............................................  56
Section 15.05  Successors and Assigns...............................  56
Section 15.06  Partial Enforceability...............................  56
Section 15.07  Counterparts.........................................  56

ANNEX I  Terms of 7 1/4% Convertible Preferred Securities and
          7 1/4% Convertible Common Securities...................... I-1

Exhibit A-1  Form of Preferred Security............................. A-1-1
Exhibit A-2  Form of Common Security................................ A-2-1

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                             CROSS-REFERENCE TABLE*

Section of
Trust Indenture Act                                     Section of
of 1939, as amended                                    Declaration
-------------------                                    -----------
310 (a)...............................................  5.03(a)
310 (c)...............................................  Inapplicable
311 (c)...............................................  Inapplicable
312 (a)...............................................  2.02(a)
312 (b)...............................................  2.02(b)
313    ...............................................  2.03
314 (a)...............................................  2.04
314 (b)...............................................  Inapplicable
314 (c)...............................................  2.05
314 (d)...............................................  Inapplicable
314 (f)...............................................  Inapplicable
315 (a)...............................................  3.09(a), 3.09(b)
315 (c)...............................................  3.09(a)
315 (d)...............................................  3.09(b)
316 (a)...............................................  Annex I
316 (c)...............................................  3.06(e)

*  This Cross-Reference Table does not constitute part of the Declaration and
   shall not affect the interpretation of any of its terms or provisions.

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                   AMENDED AND RESTATED DECLARATION OF TRUST

                                       OF

                        HANOVER COMPRESSOR CAPITAL TRUST

                               December 15, 1999

     AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of December 15, 1999, by the undersigned trustees (together with
all other Persons from time to time duly appointed and serving as trustees in
accordance with the provisions of this Declaration, the "Trustees"), Hanover
Compressor Company, a Delaware corporation, as trust sponsor (the "Sponsor"),
and by the holders, from time to time, of undivided beneficial interests in the
assets of the Trust (as defined below) issued pursuant to this Declaration;

     WHEREAS, certain of the Trustees and the Sponsor established Hanover
Compressor Capital Trust (the "Trust") under the Business Trust Act (as
hereinafter defined) pursuant to a Declaration of Trust dated as of December 1,
1999 (the "Original Declaration"), and a Certificate of Trust filed with the
Secretary of State of the State of Delaware on December 1, 1999, for the sole
purpose of issuing and selling certain securities representing undivided
beneficial interests in the assets of the Trust and investing the proceeds
thereof in certain Debentures of the Debenture Issuer (as herein after defined);
and

     WHEREAS, as of the date hereof, no interests in the Trust have been issued;

     WHEREAS, all of the Trustees and the Sponsor, by this Declaration, amend
and restate each and every term and provision of the Original Declaration; and

     NOW, THEREFORE, it being the intention of the parties hereto to continue
the Trust as a business trust under the Business Trust Act and that this
Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.

                                    ARTICLE I

                         Interpretation and Definitions

Section 1.01   Definitions.

     Unless the context otherwise requires:

(a)  Capitalized terms used in this Declaration but not defined in the preamble
     above have the respective meanings assigned to them in this Declaration,
     and any capitalized term not defined in this Declaration shall have the
     meaning assigned thereto in the Indenture;

(b)  a term defined anywhere in this Declaration has the same meaning
     throughout;

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(c)  all references to "the Declaration" or "this Declaration" are to this
     Declaration as modified, supplemented or amended from time to time;

(d)  all references in this Declaration to Articles, Sections, Annexes and
     Exhibits are to Articles and Sections of and Annexes and Exhibits to this
     Declaration unless otherwise specified;

(e)  all accounting terms not otherwise defined herein have the meanings
     assigned to them in accordance with generally accepted accounting
     principles;

(f)  a term defined in the Trust Indenture Act has the same meaning when used in
     this Declaration unless otherwise defined in this Declaration or unless the
     context otherwise requires; and

(g)  a reference to the singular includes the plural and vice versa.

    "Administrative Action" has the meaning set forth in the definition of "Tax
Event".

    "Administrative Trustee" means any Trustee other than the Property Trustee
and the Delaware Trustee.

    "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

    "Agent" means any Registrar, Paying Agent, Conversion Agent or co-registrar.

    "Appointment Event" means an event defined in the terms of the Preferred
Securities, as set forth in Annex I, which entitles the Holders of a Majority in
liquidation amount of the Preferred Securities to appoint a Special Trustee.

    "Authorized Officer" of a Person means any Person that is authorized to bind
such Person.

    "Beneficiaries" has the meaning set forth in Section 4.03(a).

    "Book Entry Interest" means a beneficial interest in a global certificate,
ownership and transfers of which shall be maintained and made through book
entries by a Depositary as described in Section 7.03.

    "Business Day" means any day other than a Saturday or a Sunday, a day on
which banking institutions in New York, New York or Wilmington, Delaware are
authorized or required by law or executive order to remain closed, or a day on
which the corporate trust office of the Property Trustee or the Debenture
Trustee is closed for business.

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    "Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code Section 3801 et seq., as it may be amended from time to time, or any
successor legislation.

    "Certificate" means a certificate in global or definitive form representing
a Common Security or a Preferred Security.

    "Closing Date" means December 15, 1999.

    "Code" means the Internal Revenue Code of 1986, as amended, or any successor
legislation.

    "Commission" means the Securities and Exchange Commission as from time to
time constituted, created, or, if at any time after execution of this instrument
such Commission is not existing and performing the duties now assigned to it
under the Trust Indenture Act, then the body performing such duties at such
time.

    "Common Securities" has the meaning specified in Section 7.01(a).

    "Common Securities Guarantee" means the guarantee agreement to be dated as
of December 15, 1999 of the Sponsor in respect of the Common Securities.

    "Conversion Agent" has the meaning set forth in Section 7.04.

    "Covered Person" means: (a) any officer, director, shareholder, partner,
member, representative, employee or agent of (i) the Trust or (ii) the Trust's
Affiliates; and (b) any Holder of Securities.

    "Debenture Event of Default" in respect of the Securities means an Event of
Default (as defined in the Indenture) has occurred and is continuing in respect
of the Debentures.

    "Debenture Issuer" means the Sponsor in its capacity as issuer of the
Debentures.

    "Debenture Trustee" means Wilmington Trust Company, a Delaware banking
corporation, as trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.

    "Debentures" means the series of Debentures to be issued by the Debenture
Issuer under the Indenture to be held by the Property Trustee, in the form
attached to the Indenture as Exhibit A.

    "Delaware Trustee" has the meaning set forth in Section 5.02.

    "Deferral Period" has the meaning set forth in the Indenture.

    "Definitive Preferred Securities" means any Preferred Securities in
definitive form issued by the Trust.

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    "Depositary" means The Depository Trust Company, the initial clearing
agency, until a successor shall be appointed pursuant to Section 9.06, and
thereafter means such successor Depositary.

    "Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.01.

    "Event of Default" means:

        (i)  a Debenture Event of Default; or

        (ii)  default by the Trust in the payment of any Distribution when it
              becomes due and payable, and continuation of such default for a
              period of 30 days (subject to the deferral of any due date in the
              case of a Deferral Period); or

        (iii) default by the Trust in the payment of any Redemption Price of any
              Security when it becomes due and payable; or

        (iv)  default in the performance, or breach, in any material respect, of
              any covenant or warranty of the Trustees in the Declaration (other
              than a covenant or warranty, a default in the performance of which
              or the breach of which is addressed in clause (ii) or (iii)
              above), and continuation of such default or breach for a period of
              60 days after there has been given, by registered or certified
              mail, to the defaulting Trustee or Trustees by the holders of at
              least 25% in aggregate liquidation amount of the outstanding
              Preferred 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 Declaration; or

        (v)   the failure of the Sponsor to appoint a successor Property Trustee
              in the manner required by Section 5.06(c).

    "Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation.

    "Global Preferred Securities" means Rule 144A Global Preferred Securities
and/or Unrestricted Global Preferred Securities, as the context requires.

    "Holder" means a Person in whose name a Certificate representing a Security
is registered, such Person being a beneficial owner within the meaning of the
Business Trust Act.

    "Indemnified Person" means (a) any Trustee; (b) any Affiliate of any
Trustee; (c) any officers, directors, shareholders, members, partners,
employees, representatives or agents of any Trustee; or (d) any employee or
agent of the Trust or its Affiliates.

    "Indenture" means the Indenture dated as of December 15, 1999, between the
Debenture Issuer and the Debenture Trustee, as it may be amended from time to
time.

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    "Investment Company" means an investment company as defined in the
Investment Company Act.

    "Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.

    "Legal Action" has the meaning set forth in Section 3.06(g).

    "Like Amount" means (i) with respect to a redemption of Preferred
Securities, Preferred Securities having an aggregate liquidation amount equal to
that portion of the principal amount of Debentures to be contemporaneously
redeemed in accordance with the Indenture, allocated to the Common Securities
and to the Preferred Securities based upon the relative liquidation amounts of
such classes and the proceeds of which will be used to pay the applicable
Redemption Price of the Preferred Securities and (ii) with respect to a
distribution of Debentures to holders of Preferred Securities in connection with
a dissolution or liquidation of the Trust, Debentures having a principal amount
equal to the aggregate liquidation amount of the Securities of the Holder to
whom such Debentures are distributed.

    "List of Holders" has the meaning set forth in Section 2.02(a).

    "Majority in liquidation amount of the Securities" means, except as provided
in the terms of the Preferred Securities and by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of more than 50% of the aggregate liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise of all
outstanding Securities of the relevant class.

    "Ministerial Action" has the meaning set forth in the terms of the
Securities as set forth in Annex I.

    "Obligations" means any costs, expenses or liabilities of the Trust, other
than obligations of the Trust to pay to Holders of any Securities or other
similar interests in the Trust the amounts due such Holders pursuant to the
terms of the Securities or such other similar interests, as the case may be.

    "Offering Circular" means the confidential offering circular, dated as of
December 9, 1999, relating to the issuance by the Trust of Preferred Securities.

    "Officers' Certificate" means, with respect to any Person, a certificate
signed by two Authorized Officers of such Person. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Declaration shall include:

        (i)  a statement that each officer signing the Certificate has read the
             covenant or condition and the definition relating thereto;

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        (ii) a brief statement of the nature and scope of the examination or
             investigation undertaken by each officer in rendering the
             Certificate;

        (iii) a statement that each such officer has made such examination or
              investigation as, in such officer's opinion, is necessary to
              enable such officer to express an informed opinion as to whether
              or not such covenant or condition has been complied with; and

        (iv)  a statement as to whether, in the opinion of each such officer,
              such condition or covenant has been complied with.

    "Optional Closing Date" has the meaning assigned to such term in the
Purchase Agreement.

    "Participants" has the meaning set forth in Section 7.03(b).

    "Paying Agent" has the meaning specified in Section 7.04.

    "Person" means a legal person, including any individual, corporation,
estate, company, partnership, joint venture, association, joint stock company,
limited liability company, trust, unincorporated association, or government or
any agency or political subdivision thereof, or any other entity of whatever
nature.

    "Preferred Securities" has the meaning specified in Section 7.01(a).

    "Preferred Securities Guarantee" means the guarantee agreement to be dated
as of December 15, 1999, of the Sponsor in respect of the Preferred Securities.

    "Preferred Security Beneficial Owner" means, with respect to a Book Entry
Interest, a Person who is the beneficial owner of such Book Entry Interest, as
reflected on the books of the Depositary, or on the books of a Person
maintaining an account with such Depositary (directly as a Participant or as an
indirect participant, in each case in accordance with the rules of such
Depositary).

    "Property Trustee" means the Trustee meeting the eligibility requirements
set forth in Section 5.03.

    "Property Trustee Account" has the meaning set forth in Section 3.08(c).

    "Purchase Agreement" has the meaning set forth in Section 7.03.

    "Quorum" means a majority of the Administrative Trustees or, if there are
only two Administrative Trustees, both of them.

    "Redemption Price" has the meaning set forth in Annex I.

    "Registrar" has the meaning set forth in Section 7.04.

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    "Registration Rights Agreement" means the Registration Rights Agreement,
dated December 15, 1999, among the Sponsor, the Trust, and the Purchasers named
in the Purchase Agreement.

    "Related Party" means, with respect to the Sponsor, any direct or indirect
wholly owned subsidiary of the Sponsor or any other Person that owns, directly
or indirectly, 100% of the outstanding voting securities of the Sponsor.

    "Responsible Officer" means, with respect to the Property Trustee, any vice-
president, any assistant vice-president, the treasurer, any assistant treasurer,
any trust officer or assistant trust officer or any other officer in the
Corporate Trust Department of the Property Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.

    "Restricted Preferred Securities" shall include the Rule 144A Global
Preferred Securities.

    "Restricted Securities Legend" has the meaning specified in Section 9.02(j).

    "Rule 144A Global Preferred Security" has the meaning specified in Section
7.03(a).

    "Securities" means the Common Securities and the Preferred Securities.

    "Securities Act" means the Securities Act of 1933, as amended from time to
time, or any successor legislation.

    "Securities Custodian" means the custodian with respect to the Rule 144A
Global Preferred Security and any other Preferred Security in global form.

    "Securities Guarantees" means the Preferred Securities Guarantee and the
Common Securities Guarantee.

    "Special Trustee" means a trustee appointed by the Holders of a Majority in
liquidation amount of the Preferred Securities in accordance with Section
5.06(a)(ii)(B).

    "Sponsor" means Hanover Compressor Company, a Delaware corporation, or any
successor entity in a merger, consolidation or amalgamation, in its capacity as
sponsor of the Trust.

    "Successor Delaware Trustee" has the meaning set forth in Section 5.06.

    "Successor Property Trustee" has the meaning set forth in Section 5.06.

    "Super Majority" has the meaning set forth in Section 2.06(a)(ii).

    "Tax Event" means the Property Trustee shall have received an opinion of
nationally recognized independent tax counsel to the Sponsor (reasonably
acceptable to the Trustees)

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experienced in such matters (a "Dissolution Tax Opinion") to the effect that, as
a result of (i) any amendment to or change (including any announced prospective
change (which shall not include a proposed change), provided that a Tax Event
shall not occur more than 90 days before the effective date of any such
prospective change) in the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein, (ii)
any judicial decision or official administrative pronouncement, ruling,
regulatory procedure, notice or announcement, including any notice or
announcement of intent to adopt such procedures or regulations (an
"Administrative Action") or (iii) any amendment to or change in the
administrative position or interpretation of any Administrative Action or
judicial decision that differs from the theretofore generally accepted position,
in each case, by any legislative body, court, governmental agency or regulatory
body, irrespective of the manner in which such amendment or change is made
known, which amendment or change is effective or such Administrative Action or
decision is announced, in each case, on or after the date of original issuance
of the Debentures or the issue date of the Preferred Securities issued by the
Trust, there is more than an insubstantial risk that (a) if the Debentures are
held by the Property Trustee, (I) the Trust is, or will be within 90 days of the
date of such opinion, subject to United States Federal income tax with respect
to interest accrued or received on the Debentures or subject to more than a de
minimis amount of other taxes, duties or other governmental charges as
determined by such counsel, or (II) any portion of interest payable by the
Sponsor to the Trust on the Debentures is not, or within 90 days of the date of
such opinion will not be, deductible by the Sponsor in whole or in part for
United States Federal income tax purposes or (b) with respect to Debentures
which are no longer held by the Property Trustee, any portion of interest
payable by the Sponsor on the Debentures is not, or within 90 days of the date
of such opinion will not be, deductible by the Sponsor in whole or in part for
United States Federal income tax purposes.

    "10% in liquidation amount of the Securities" means, except as provided in
the terms of the Preferred Securities or by the Trust Indenture Act, Holders of
outstanding Securities voting together as a single class or, as the context may
require, Holders of outstanding Preferred Securities or Holders of outstanding
Common Securities, voting separately as a class, representing 10% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise) of all outstanding Securities of the
relevant class.

    "Treasury Regulations" means the income tax regulations, including temporary
and proposed regulations, promulgated under the Code by the United States
Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).

    "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended from
time to time, or any successor legislation.

    "Trustee" or "Trustees" means each Person who has signed this Declaration as
a trustee, so long as such Person shall continue in office in accordance with
the terms hereof, and all other Persons who may from time to time be duly
appointed, qualified and serving as Trustees in accordance with the provisions
hereof, and references herein to a Trustee or the Trustees shall refer to such
Person or Persons solely in their capacity as trustees hereunder.

    "Unrestricted Global Preferred Security" has the meaning set forth in
Section 9.02(b).

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                                    ARTICLE II

                              Trust Indenture Act

Section 2.01  Trust Indenture Act; Application.

(a)  This Declaration is subject to the provisions of the Trust Indenture Act
     that are required to be part of this Declaration, which are incorporated by
     reference in and made part of this Declaration and shall, to the extent
     applicable, be governed by such provisions.

(b)  The Property Trustee shall be the only Trustee which is a Trustee for the
     purposes of the Trust Indenture Act.

(c)  If and to the extent that any provision of this Declaration limits,
     qualifies or conflicts with the duties imposed by Sections 310 to 317,
     inclusive, of the Trust Indenture Act, such imposed duties shall control.

(d)  The application of the Trust Indenture Act to this Declaration shall not
     affect the nature of the Securities as equity securities representing
     undivided beneficial interests in the assets of the Trust.

Section 2.02  Lists of Holders of Securities.

(a)  Each of the Sponsor and the Administrative Trustees on behalf of the Trust
     shall provide the Property Trustee (i) within 14 days after each record
     date for payment of Distributions, a list, in such form as the Property
     Trustee may reasonably require, of the names and addresses of the Holders
     of the Securities ("List of Holders") as of such record date, provided that
     neither the Sponsor nor the Administrative Trustees on behalf of the Trust
     shall be obligated to provide such List of Holders at any time the List of
     Holders does not differ from the most recent List of Holders given to the
     Property Trustee by the Sponsor and the Administrative Trustees on behalf
     of the Trust, and (ii) at any other time, within 30 days of receipt by the
     Trust of a written request for a List of Holders as of a date no more than
     14 days before such List of Holders is given to the Property Trustee. The
     Property Trustee shall preserve, in as current a form as is reasonably
     practicable, all information contained in Lists of Holders given to it or
     which it receives in its capacity as Paying Agent (if acting in such
     capacity), provided that the Property Trustee may destroy any List of
     Holders previously given to it on receipt of a new List of Holders.

(b)  The Property Trustee shall comply with its obligations under Sections
     311(a), 311(b) and 312(b) of the Trust Indenture Act.

Section 2.03  Reports by the Property Trustee.

     Within 60 days after May 15 of each year, commencing May 15, 2000, the
Property Trustee shall provide to the Holders of the Preferred Securities such
reports as are required by Section 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by Section 313 of the Trust

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Indenture Act. The Property Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.

Section 2.04  Periodic Reports to Property Trustee.

     Each of the Sponsor and the Administrative Trustees on behalf of the Trust
shall provide to the Property Trustee such documents, reports and information as
required by Section 314 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314 of the Trust Indenture Act in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.

Section 2.05  Evidence of Compliance with Conditions Precedent.

     Each of the Sponsor and the Administrative Trustees on behalf of the Trust
shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.

Section 2.06  Events of Default; Waiver.

(a)  The Holders of a Majority in liquidation amount of Preferred Securities
     may, by vote, on behalf of the Holders of all of the Preferred Securities,
     waive any past Event of Default in respect of the Preferred Securities and
     its consequences, provided that, if the Event of Default:

        (i) is caused by a Debenture Event of Default that is not waivable under
            the Indenture, the Event of Default under the Declaration shall also
            not be waivable;

        (ii) is caused by a Debenture Event of Default that requires the consent
             or vote of greater than a majority in principal amount of the
             holders of the Debentures (a "Super Majority") to be waived under
             the Indenture, the Event of Default under the Declaration may only
             be waived by the vote of the Holders of at least the proportion in
             liquidation amount of the Preferred Securities that the relevant
             Super Majority represents of the aggregate principal amount of the
             Debentures outstanding;

        (iii) is the result of a default by the Trust in the payment of any
              Distribution when it becomes due and payable, which default has
              continued for 30 days (subject to the deferral of any due date in
              the case of a Default Period), the Event of Default shall not be
              waivable; or

        (iv) is the result of a default by the Trust in the payment of any
             Redemption Price of any Preferred Security when it becomes due and
             payable, the Event of Default shall not be waivable.

     The foregoing provisions of this Section 2.06(a) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act.

                                       10
<PAGE>

     Upon such waiver, any such default shall cease to exist, and any Event of
Default with respect to the Preferred Securities arising therefrom shall be
deemed to have been cured for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or an Event of Default
with respect to the Preferred Securities or impair any right consequent thereon.
Any waiver by the Holders of the Preferred Securities of an Event of Default
with respect to the Preferred Securities shall also be deemed to constitute a
waiver by the Holders of the Common Securities of any such Event of Default with
respect to the Common Securities for all purposes of this Declaration without
any further act, vote, or consent of the Holders of the Common Securities.

(b)  The Holders of a Majority in liquidation amount of the Common Securities
     may, by vote, on behalf of the Holders of all of the Common Securities,
     waive any past Event of Default with respect to the Common Securities and
     its consequences, provided that, if the Event of Default is caused by a
     Debenture Event of Default that:

        (i)  is not waivable under the Indenture, except where the Holders of
             the Common Securities are deemed to have waived such Event of
             Default under the Declaration as provided below in this Section
             2.06(b), the Event of Default under the Declaration shall also not
             be waivable; or

        (ii) requires the consent or vote of a Super Majority to be waived,
             except where the Holders of the Common Securities are deemed to
             have waived such Event of Default under the Declaration as provided
             below in this Section 2.06(b), the Event of Default under the
             Declaration may only be waived by the vote of the Holders of at
             least the proportion in liquidation amount of the Common Securities
             that the relevant Super Majority represents of the aggregate
             principal amount of the Debentures outstanding;

provided further, each Holder of Common Securities will be deemed to have waived
any such Event of Default and all Events of Default with respect to the Common
Securities and its consequences until the effects of all Events of Default with
respect to the Preferred Securities have been cured, waived or otherwise
eliminated, and until such Events of Default have been so cured, waived or
otherwise eliminated, the Property Trustee will be deemed to be acting solely on
behalf of the Holders of the Preferred Securities and only the Holders of the
Preferred Securities will have the right to direct the Property Trustee in
accordance with the terms of the Securities. The foregoing provisions of this
Section 2.06(b) shall be in lieu of Sections 316(a)(1)(A) and 316(a)(1)(B) of
the Trust Indenture Act and such Section 316(a)(1)(A) and 316(a)(1)(B) of the
Trust Indenture Act are hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Subject to the foregoing
provisions of this Section 2.06(b), upon such waiver, any such default shall
cease to exist and any Event of Default with respect to the Common Securities
arising therefrom shall be deemed to have been cured for every purpose of this
Declaration, but no such waiver shall extend to any subsequent or other default
or Event of Default with respect to the Common Securities or impair any right
consequent thereon.

(c)  A waiver of an Event of Default under the Indenture by the Property Trustee
     at the direction of the Holders of the Preferred Securities, constitutes a
     waiver of the corresponding Event of Default under this Declaration. The
     foregoing provisions of this Section 2.06(c) shall be in lieu of Section
     316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of
     the Trust

                                       11
<PAGE>

     Indenture Act is hereby expressly excluded from this Declaration and the
     Securities, as permitted by the Trust Indenture Act.

Section 2.07   Event of Default; Notice.

(a)  The Property Trustee shall, within ten business days after the occurrence
     of an Event of Default actually known to the Property Trustee, (i) transmit
     by mail, first-class postage prepaid, to the Holders of the Securities, and
     (ii) transmit by any means provided for in this Declaration to the
     Administrative Trustees and the Sponsor, notices of all defaults actually
     known to the Property Trustee, unless such defaults have been cured before
     the giving of such notice (the term "defaults" for the purposes of this
     Section 2.07(a) being hereby defined to be an Event of Default, not
     including any periods of grace and irrespective of the giving of any
     notice); provided that, except for a default in the payment of principal of
     (or premium, if any) or interest on any of the Debentures or in the payment
     of any sinking fund installment established for the Debentures, the
     Property Trustee shall be protected in withholding such notice if and so
     long as the board of directors, the executive committee, or a trust
     committee of directors and/or Responsible Officers of the Property Trustee
     in good faith determines that the withholding of such notice is in the
     interests of the Holders of the Securities.

(b)  The Property Trustee shall not be deemed to have knowledge of any default
     except:

        (i)  a default under Sections 5.01(1) and 5.01(2) of the Indenture; or

        (ii) any default as to which the Property Trustee shall have received
             written notice.

                                   ARTICLE III

                                  Organization

Section 3.01   Name.

     The Trust is named "Hanover Compressor Capital Trust," as such name may be
modified from time to time by the Administrative Trustees following written
notice to the Holders of Securities. The Trust's activities may be conducted
under the name of the Trust or any other name deemed advisable by the
Administrative Trustees.

 Section 3.02   Office.

     The address of the principal office of the Trust is c/o Hanover Compressor
Company, 12001 North Houston Rosslyn, Houston, Texas 77086, Attention: Chief
Financial Officer. On ten Business Days written notice to the Holders of
Securities, the Administrative Trustees may designate another principal office.

                                       12
<PAGE>

Section 3.03   Purpose.

     The exclusive purposes and functions of the Trust are (a) to issue and sell
Securities and use the proceeds from such sale to acquire the Debentures, (b)
distributing payments received on the Debentures to the Holders of the
Securities and (c) except as otherwise limited herein, to engage in only those
other activities necessary or incidental thereto. The Trust shall not borrow
money, issue debt or reinvest proceeds derived from investments, pledge any of
its assets, or otherwise undertake (or permit to be undertaken) any activity
that would cause the Trust not to be classified for United States Federal income
tax purposes as a grantor trust.

Section 3.04   Authority.

(a)  Subject to the limitations provided in this Declaration and to the specific
     duties of the Property Trustee, the Administrative Trustees shall have
     exclusive and complete authority to carry out the purposes of the Trust. An
     action taken by the Administrative Trustees in accordance with their powers
     shall constitute the act of and serve to bind the Trust and an action taken
     by the Property Trustee in accordance with its powers shall constitute the
     act of and serve to bind the Trust. In dealing with the Trustees acting on
     behalf of the Trust, no person shall be required to inquire into the
     authority of the Trustees to bind the Trust. Persons dealing with the Trust
     are entitled to rely conclusively on the power and authority of the
     Trustees as set forth in this Declaration.

(b)  Except as expressly set forth in this Declaration and except if a meeting
     of the Administrative Trustees is called with respect to any matter over
     which the Administrative Trustees have power to act, any power of the
     Administrative Trustees may be exercised by, or with the consent of, any
     one such Administrative Trustee.

(c)  An Administrative Trustee may, by power of attorney consistent with
     applicable law, delegate to any other natural person over the age of 21 his
     or her power for the purposes of signing any documents which the
     Administrative Trustees have power and authority to cause the Trust to
     execute pursuant to Section 3.06.

Section 3.05   Title to Property of the Trust.

     Except as provided in Section 3.08 with respect to the Debentures and the
Property Trustee Account or as otherwise provided in this Declaration, legal
title to all assets of the Trust shall be vested in the Trust. The Holders shall
not have legal title to any part of the assets of the Trust, but shall have an
undivided beneficial interest in the assets of the Trust.

 Section 3.06   Powers and Duties of the Administrative Trustees.

     The Administrative Trustees shall have, together (except in the case of
paragraphs (a), (b) and (c) of this Section 3.06) with any Special Trustee
holding office pursuant to Section 5.06, if any, the exclusive power, duty and
authority to cause the Trust to engage in the following activities:

                                       13
<PAGE>

(a)  to issue and sell the Preferred Securities and the Common Securities in
     accordance with this Declaration; provided, however, that the Trust may
     issue no more than one series of Preferred Securities and no more than one
     series of Common Securities, and, provided further, that there shall be no
     interests in the Trust other than the Securities, and the issuance of
     Securities shall be limited to simultaneous issuances of both Preferred
     Securities and Common Securities on the Closing Date and any Optional
     Closing Date;

(b)  in connection with the issue and sale of the Preferred Securities, at the
     direction of the Sponsor, to:

        (i)  assist in the preparation of the Offering Circular and a
             preliminary offering circular, in each case prepared by the
             Sponsor, in relation to the offering and sale of Preferred
             Securities to qualified institutional buyers in reliance on Rule
             144A under the Securities Act and to execute and file with the
             Commission, at such time as determined by the Sponsor, a
             registration statement filed on Form S-3 prepared by the Sponsor,
             including any amendments thereto, in relation to the Preferred
             Securities;

        (ii) execute and file any documents prepared by the Sponsor, or take any
             acts as determined by the Sponsor to be necessary in order to
             qualify or register all or part of the Preferred Securities in any
             State or foreign jurisdiction in which the Sponsor has determined
             to qualify or register such Preferred Securities for sale;

        (iii) execute and file an application, prepared by the Sponsor, to the
              Private Offerings, Resale and Trading through Automated Linkages
              ("PORTAL") Market and, at such time, if any, as determined by the
              Sponsor, to the New York Stock Exchange or any other national
              stock exchange or the Nasdaq National Market for listing or
              quotation of the Preferred Securities;

        (iv) to execute and deliver letters, documents, or instruments with The
             Depository Trust Company relating the Preferred Securities;

        (v)  execute and file with the Commission, at such time as determined by
             the Sponsor, a registration statement on Form 8-A, including any
             amendments thereto, prepared by the Sponsor relating to the
             registration of the Preferred Securities under Section 12 of the
             Exchange Act; and

        (vi) execute and enter into the Purchase Agreement, Registration Rights
             Agreement and other related agreements providing for the sale of
             the Preferred Securities and to provide any certificates or other
             documents in connection with such agreements;

(c)  to acquire the Debentures with the proceeds of the sale of the Preferred
     Securities and the Common Securities; provided, however, that the
     Administrative Trustees shall cause legal title to the Debentures to be
     held of record in the name of the Property Trustee for the benefit of the
     Holders of the Preferred Securities and the Holders of Common Securities;

                                       14
<PAGE>

(d)  to give the Sponsor and the Property Trustee prompt written notice of the
     occurrence of a Tax Event; provided that the Administrative Trustees (and
     Special Trustee, if any) shall consult with the Sponsor and the Property
     Trustee before taking or refraining from taking any Ministerial Action in
     relation to a Tax Event;

(e)  to establish a record date with respect to all actions to be taken
     hereunder that require a record date be established, including and with
     respect to, for the purposes of Section 316(c) of the Trust Indenture Act,
     Distributions, voting rights, redemptions and exchanges, and to issue
     relevant notices to the Holders of Preferred Securities and Holders of
     Common Securities as to such actions and applicable record dates;

(f)  to take all actions and perform such duties as may be required of the
     Administrative Trustees pursuant to the terms of the Securities and this
     Declaration;

(g)  to bring or defend, pay, collect, compromise, arbitrate, resort to legal
     action, or otherwise adjust claims or demands of or against the Trust
     ("Legal Action"), unless pursuant to Section 3.08(e), the Property Trustee
     has the exclusive power to bring such Legal Action;

(h)  to employ or otherwise engage employees and agents (who may be designated
     as officers with titles) and managers, contractors, advisors, and
     consultants and pay reasonable compensation for such services;

(i)  to cause the Trust to comply with the Trust's obligations under the Trust
     Indenture Act;

(j)  to give the certificate required by Section 314(a)(4) of the Trust
     Indenture Act to the Property Trustee, which certificate may be executed by
     any Administrative Trustee;

(k)  to incur expenses that are necessary or incidental to carry out any of the
     purposes of the Trust;

(l)  to act as, or appoint another Person to act as, registrar and transfer
     agent for the Securities;

(m)  to give prompt written notice to the Holders of the Securities of any
     notice received from the Debenture Issuer of its election to defer payments
     of interest on the Debentures by extending the interest payment period
     under the Indenture;

(n)  to execute all documents or instruments, perform all duties and powers, and
     do all things for and on behalf of the Trust in all matters necessary or
     incidental to the foregoing;

(o)  to take all action that may be necessary or appropriate for the
     preservation and the continuation of the Trust's valid existence, rights,
     franchises and privileges as a statutory business trust under the laws of
     the State of Delaware and of each other jurisdiction in which such
     existence is necessary to protect the limited liability of the Holders of
     the Preferred Securities or to enable the Trust to effect the purposes for
     which the Trust was created;

                                       15
<PAGE>

(p)  to take any action, not inconsistent with this Declaration or with
     applicable law, that the Administrative Trustees determine in their
     discretion to be necessary or desirable in carrying out the activities of
     the Trust as set out in this Section 3.06, including, but not limited to:

        (i)  causing the Trust not to be deemed to be an Investment Company
             required to be registered under the Investment Company Act;

        (ii) causing the Trust to be classified for United States federal income
             tax purposes as a grantor trust; and

        (iii) cooperating with the Debenture Issuer to ensure that the
              Debentures will be treated as indebtedness of the Debenture Issuer
              for United States federal income tax purposes,

provided that such action does not materially adversely affect the interests of
Holders; and

(q)  to take all action necessary to cause all applicable tax returns and tax
     information reports that are required to be filed with respect to the Trust
     to be duly prepared and filed by the Administrative Trustees, on behalf of
     the Trust.

     The Administrative Trustees must exercise the powers set forth in this
Section 3.06 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.03, and the Administrative Trustees shall not
take any action that is inconsistent with the purposes and functions of the
Trust set forth in Section 3.03.

     Subject to this Section 3.06, the Administrative Trustees shall have none
of the powers or the authority of the Property Trustee set forth in Section
3.08.

     Any expenses incurred by the Administrative Trustee (or the Special
Trustee, if any) pursuant to this Section 3.06 shall be reimbursed by the
Debenture Issuer.

Section 3.07  Prohibition of Actions by the Trust and the Trustees.

(a)  The Trust shall not, and the Trustees (including the Property Trustee) on
     behalf of the Trust shall not, engage in any activity other than as
     required or authorized by this Declaration. In particular, the Trust shall
     not and the Trustees (including the Property Trustee) shall cause the Trust
     not to:

        (i)  invest any proceeds received by the Trust from holding the
             Debentures, but shall distribute all such proceeds to Holders of
             Securities pursuant to the terms of this Declaration and of the
             Securities;

        (ii) acquire any assets other than as expressly provided herein;

        (iii)  possess Trust property for other than a Trust purpose;

                                       16
<PAGE>

        (iv) make any loans or incur any indebtedness other than loans
             represented by the Debentures;

        (v)  possess any power or otherwise act in such a way as to vary the
             Trust assets or the terms of the Securities in any way whatsoever;

        (vi) issue any securities or other evidences of beneficial ownership of,
             or beneficial interest in, the Trust other than the Securities; or

        (vii) other than as provided in the Declaration or Annex I hereto, (A)
              direct the time, method and place of exercising any trust or power
              conferred upon the Debenture Trustee with respect to the
              Debentures, (B) waive any past default that is waivable under
              Section 5.13 of the Indenture, (C) exercise any right to rescind
              or annul any declaration that the principal of all the Debentures
              shall be due and payable, or (D) consent to any amendment,
              modification or termination of the Indenture or the Debentures
              where such consent shall be required unless, in the case of each
              action described in clause (A), (B), (C) or (D), the Trust shall
              have received an opinion of counsel to the effect that such
              modification will not cause more than an insubstantial risk that
              for United States federal income tax purposes the Trust will not
              be classified as a grantor trust.

Section 3.08   Powers and Duties of the Property Trustee.

(a)  The legal title to the Debentures shall be owned by and held of record in
     the name of the Property Trustee in trust for the benefit of the Holders of
     the Securities. The right, title and interest of the Property Trustee to
     the Debentures shall vest automatically in each Person who may hereafter be
     appointed as Property Trustee in accordance with Section 5.06. Such vesting
     and cessation of title shall be effective whether or not conveyancing
     documents with regard to the Debentures have been executed and delivered.

(b)  The Property Trustee shall not transfer its right, title and interest in
     the Debentures to the Administrative Trustees or to the Delaware Trustee
     (if the Property Trustee does not also act as Delaware Trustee).

(c)  The Property Trustee shall:

        (i) establish and maintain a segregated non-interest bearing trust
            account (the "Property Trustee Account") in the name of and under
            the exclusive control of the Property Trustee on behalf of the
            Holders of the Securities and, upon the receipt of payments of funds
            made in respect of the Debentures held by the Property Trustee,
            deposit such funds into the Property Trustee Account and make
            payments to the Holders of the Preferred Securities and Holders of
            the Common Securities from the Property Trustee Account in
            accordance with Section 6.01. Funds in the Property Trustee Account
            shall be held uninvested until disbursed in accordance with this
            Declaration;

                                       17
<PAGE>

        (ii) engage in such ministerial activities as so directed and as shall
             be necessary or appropriate to effect the redemption of the
             Preferred Securities and the Common Securities to the extent the
             Debentures are redeemed or mature; and

        (iii) upon written notice of distribution issued by the Administrative
              Trustees in accordance with the terms of the Securities, engage in
              such ministerial activities as so directed as shall be necessary
              or appropriate to effect the distribution of the Debentures to
              Holders of Securities upon the occurrence of certain special
              events (as may be defined in the terms of the Securities) arising
              from a change in law or a change in legal interpretation or other
              specified circumstances pursuant to the terms of the Securities.

(d)  The Property Trustee shall take all actions and perform such duties as may
     be specifically required of the Property Trustee pursuant to the terms of
     the Securities.

(e)  The Property Trustee shall take any Legal Action which arises out of or in
     connection with an Event of Default or the Property Trustee's duties and
     obligations under this Declaration or the Trust Indenture Act; provided,
     however, that if a Debenture Event of Default has occurred and is
     continuing and such event is attributable to the failure of the Sponsor to
     pay interest or principal on the Debentures on the date such interest or
     principal is otherwise payable (or in the case of redemption, on the
     redemption date), then a holder of Preferred Securities may institute a
     legal proceeding directly for enforcement of payment to such Holder of the
     principal of or interest on the Debentures having a principal amount equal
     to the aggregate liquidation amount of the Preferred Securities of such
     Holder (a "Direct Action") on or after the respective due date specified in
     the Securities. In connection with such Direct Action, the Debenture Issuer
     shall be subrogated to the rights of such Holder of Preferred Securities
     with respect to payments on the Preferred Securities to the extent of any
     payment made by the Sponsor to such Holder of Preferred Securities in such
     Direct Action. In addition, if the Property Trustee fails to enforce its
     rights under the Debentures (other than rights arising from an Event of
     Default described in the immediately preceding sentence) after any Holder
     of Preferred Securities shall have made a written request to the Property
     Trustee to enforce such rights, such Holder of Preferred Securities may, to
     the fullest extent permitted by law, institute a Direct Action to enforce
     such rights. Except as provided in the preceding sentences, the Holders of
     Preferred Securities will not be able to exercise directly any other remedy
     available to the holders of the Debentures.

(f)  The Property Trustee shall not resign as a Trustee unless either:

        (i) the Trust has been completely liquidated and the proceeds of the
            liquidation distributed to the Holders of Securities pursuant to the
            terms of the Securities; or

        (ii) a Successor Property Trustee has been appointed and has accepted
             that appointment in accordance with Section 5.06.

(g)  The Property Trustee shall have the legal power to exercise all of the
     rights, powers and privileges of a holder of Debentures under the Indenture
     and, if an Event of Default occurs and is continuing, the Property Trustee
     shall, for the benefit of Holders of the Securities,

                                       18
<PAGE>

     enforce its rights as holder of the Debentures subject to the rights of the
     Holders pursuant to the terms of such Securities.

(h)  The Property Trustee will act as Paying Agent and Registrar in Wilmington,
     Delaware to pay Distributions, redemption payments or liquidation payments
     on behalf of the Trust with respect to all securities and any such Paying
     Agent shall comply with Section 317(b) of the Trust Indenture Act. Any
     Paying Agent may be removed by the Property Trustee at any time and a
     successor Paying Agent or additional Paying Agents may be appointed at any
     time by the Property Trustee.

(i)  Subject to this Section 3.08, the Property Trustee shall have none of the
     duties, liabilities, powers or the authority of the Administrative Trustees
     set forth in Section 3.06.

(j)  The Property Trustee must exercise the powers set forth in this Section
     3.08 in a manner that is consistent with the purposes and functions of the
     Trust set out in Section 3.03, and the Property Trustee shall not take any
     action that is inconsistent with the purposes and functions of the Trust
     set out in Section 3.03.

Section 3.09   Certain Duties and Responsibilities of the Property Trustee.

(a)  The Property Trustee, before the occurrence of any Event of Default and
     after the curing of all Events of Default that may have occurred, shall
     undertake to perform only such duties as are specifically set forth in this
     Declaration and no implied covenants shall be read into this Declaration
     against the Property Trustee. In case an Event of Default has occurred
     (that has not been cured or waived pursuant to Section 2.06), the Property
     Trustee shall exercise such of the rights and powers vested in it by this
     Declaration, and use the same degree of care and skill in its exercise, as
     a prudent person would exercise or use under the circumstances in the
     conduct of his or her own affairs.

(b)  No provision of this Declaration shall be construed to relieve the Property
     Trustee from liability for its own negligent action, its own negligent
     failure to act, or its own willful misconduct, except that:

        (i)  prior to the occurrence of an Event of Default and after the curing
             or waiving of all such Events of Default that may have occurred:

                (A) the duties and obligations of the Property Trustee shall be
                    determined solely by the express provisions of this
                    Declaration and the Property Trustee shall not be liable
                    except for the performance of such duties and obligations as
                    are specifically set forth in this Declaration, and no
                    implied covenants or obligations shall be read into this
                    Declaration against the Property Trustee; and

                (B) in the absence of bad faith on the part of the Property
                    Trustee, the Property Trustee may conclusively rely, as to
                    the truth of the statements and the correctness of the
                    opinions expressed therein, upon any certificates or
                    opinions furnished to the Property Trustee and conforming to
                    the requirements of this

                                       19
<PAGE>

                    Declaration; but in the case of any such certificates or
                    opinions that by any provision hereof are specifically
                    required to be furnished to the Property Trustee, the
                    Property Trustee shall be under a duty to examine the same
                    to determine whether or not they conform to the requirements
                    of this Declaration;

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

        (iii) the Property Trustee shall not be liable with respect to any
              action taken or omitted to be taken by it in good faith in
              accordance with the direction of the Holders of not less than a
              Majority in liquidation amount of the Securities relating to the
              time, method and place of conducting any proceeding for any remedy
              available to the Property Trustee, or exercising any trust or
              power conferred upon the Property Trustee under this Declaration;

        (iv) no provision of this Declaration shall require the Property Trustee
             to expend or risk its own funds or otherwise incur personal
             financial liability in the performance of any of its duties or in
             the exercise of any of its rights or powers;

        (v)  the Property Trustee's sole duty with respect to the custody, safe
             keeping and physical preservation of the Debentures and the
             Property Trustee Account shall be to deal with such property in a
             similar manner as the Property Trustee deals with similar property
             for its own account, subject to the protections and limitations on
             liability afforded to the Property Trustee under this Declaration
             and the Trust Indenture Act;

        (vi) the Property Trustee shall have no duty or liability for or with
             respect to the value, genuineness, existence or sufficiency of the
             Debentures or the payment of any taxes or assessments levied
             thereon or in connection therewith;

        (vii) the Property Trustee shall not be liable for any interest on any
              money received by it except as it may otherwise agree with the
              Sponsor. Money held by the Property Trustee need not be segregated
              from other funds held by it except in relation to the Property
              Trustee Account maintained by the Property Trustee pursuant to
              Section 3.08(c)(i) and except to the extent otherwise required by
              law; and

        (viii) the Property Trustee shall not be responsible for monitoring the
               compliance by the Administrative Trustees or the Sponsor with
               their respective duties under this Declaration, nor shall the
               Property Trustee be liable for the default or misconduct of the
               Administrative Trustees or the Sponsor.

Section 3.10   Certain Rights of Property Trustee.

(a)  Subject to the provisions of Section 3.09:

        (i)  the Property Trustee may rely conclusively and shall be fully
             protected in acting or refraining from acting upon any resolution,
             certificate, statement, instrument,

                                       20
<PAGE>

             opinion, report, notice, request, direction, consent, order, bond,
             debenture, note, other evidence of indebtedness or other paper or
             document believed by it to be genuine and to have been signed, sent
             or presented by the proper party or parties;

        (ii) any direction or act of the Sponsor or the Administrative Trustees
             contemplated by this Declaration shall be sufficiently evidenced by
             an Officers' Certificate;

        (iii) whenever in the administration of this Declaration, the Property
              Trustee shall deem it desirable that a matter be proved or
              established before taking, suffering or omitting any action
              hereunder, the Property Trustee (unless other evidence is herein
              specifically prescribed) may, in the absence of bad faith on its
              part, request and rely upon an Officers' Certificate which, upon
              receipt of such request, shall be promptly delivered by the
              Sponsor or the Administrative Trustees;

        (iv) the Property Trustee shall have no duty to see to any recording,
             filing or registration of any instrument (including any financing
             or continuation statement or any filing under tax or securities
             laws) or any rerecording, refiling or registration thereof;

        (v)  the Property Trustee may consult with counsel of its choice or
             other experts and the advice or opinion of such counsel and experts
             with respect to legal matters or advice within the scope of such
             experts' area of expertise 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 accordance with such advice or
             opinion. Such counsel may be counsel to the Sponsor or any of its
             Affiliates, and may include any of its employees. The Property
             Trustee shall have the right at any time to seek instructions
             concerning the administration of this Declaration from any court of
             competent jurisdiction;

        (vi) the Property Trustee shall be under no obligation to exercise any
             of the rights or powers vested in it by this Declaration at the
             request or direction of any Holder, unless such Holder shall have
             provided to the Property Trustee security satisfactory to the
             Property Trustee, against the costs, expenses (including its
             attorneys' fees and expenses) and liabilities that might be
             incurred by it in complying with such request or direction,
             including such reasonable advances as may be requested in writing
             by the Property Trustee, provided, that, nothing contained in this
             Section 3.10(a)(vi) shall be taken to relieve the Property Trustee,
             upon the occurrence of an Event of Default, of its obligation to
             exercise the rights and powers vested in it by this Declaration;

        (vii) the Property Trustee shall not be bound to make any investigation
              into the facts or matters stated in any resolution, certificate,
              statement, instrument, opinion, report, notice, request,
              direction, consent, order, security, bond, debenture, note, other
              evidence of indebtedness or other paper or document, but the
              Property Trustee, in its discretion, may make such further inquiry
              or investigation into such facts or matters as it may see fit;

        (viii) the Property Trustee may execute any of its powers hereunder or
               perform any of its duties hereunder either directly or by or
               through agents or attorneys and

                                       21
<PAGE>

               the Property Trustee shall not be responsible for any misconduct
               or negligence on the part of any agent or attorney appointed with
               due care by it hereunder;

        (ix) any action taken by the Property Trustee or its agents hereunder
             shall bind the Trust and the Holders of the Securities, and the
             signature of the Property Trustee or its agents alone shall be
             sufficient and effective to perform any such action and no third
             party shall be required to inquire as to the authority of the
             Property Trustee to so act or as to its compliance with any of the
             terms and provisions of this Declaration, both of which shall be
             conclusively evidenced by the Property Trustee's or its agent's
             taking such action;

        (x)  whenever in the administration of this Declaration the Property
             Trustee shall deem it desirable to receive instructions with
             respect to enforcing any remedy or right or taking any other action
             hereunder the Property Trustee (i) may request instructions from
             the Holders of the Securities which instructions may only be given
             by the Holders of the same proportion in liquidation amount of the
             Securities as would be entitled to direct the Property Trustee
             under the terms of the Securities in respect of such remedy, right
             or action, (ii) may refrain from enforcing such remedy or right or
             taking such other action until such instructions are received, and
             (iii) shall be protected in acting in accordance with such
             instructions;

        (xi) except as otherwise expressly provided by this Declaration, the
             Property Trustee shall not be under any obligation to take any
             action that is discretionary under the provisions of this
             Declaration; and

        (xii) the Property Trustee shall not be liable for any action taken,
              suffered, or omitted to be taken by it in good faith and
              reasonably believed by it to be authorized or within the
              discretion or rights or powers conferred upon it by this
              Declaration.

(b)  No provision of this Declaration shall be deemed to impose any duty or
     obligation on the Property Trustee to perform any act or acts or exercise
     any right, power, duty or obligation conferred or imposed on it, in any
     jurisdiction in which it shall be illegal, or in which the Property Trustee
     shall be unqualified or incompetent in accordance with applicable law, to
     perform any such act or acts, or to exercise any such right, power, duty or
     obligation. No permissive power or authority available to the Property
     Trustee shall be construed to be a duty.

Section 3.11   Delaware Trustee.

     Notwithstanding any other provision of this Declaration other than Section
5.02, the Delaware Trustee shall not be entitled to exercise any powers, nor
shall the Delaware Trustee have any of the duties and responsibilities of the
Administrative Trustees or the Property Trustee described in this Declaration.
Except as set forth in Section 5.02, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of Section 3807 of
the Business Trust Act.

                                       22
<PAGE>

Section 3.12   Execution of Documents.

     Except as otherwise required by the Business Trust Act, any Administrative
Trustee is authorized to execute on behalf of the Trust any documents that the
Administrative Trustees have the power and authority to execute pursuant to
Section 3.06; provided that, the registration statement referred to in Section
3.06(b)(i), including any amendments thereto, shall be signed by a majority of
the Administrative Trustees.

Section 3.13   Not Responsible for Recitals or Issuance of Securities.

     The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.

Section 3.14   Duration of Trust.

     The Trust, unless dissolved pursuant to the provisions of Article VIII
hereof, shall exist until December 1, 2049.

Section 3.15   Mergers.

(a)  The Trust may not consolidate, amalgamate, merge with or into, or be
     replaced by, or convey, transfer or lease its properties and assets
     substantially as an entirety to any Person, except as described in Section
     3.15(b) and (c) of this Declaration and Section 3 and 4 of the terms of the
     Securities as set forth in Annex I attached hereto.

(b)  The Trust may, with the consent of a majority of the Administrative
     Trustees and without the consent of the Holders of the Securities, the
     Delaware Trustee or the Property Trustee, consolidate, amalgamate, merge
     with or into, or be replaced by a trust organized as such under the laws of
     any State or the District of Columbia; provided that:

        (i) if the Trust is not the surviving entity, the successor entity (the
             "Successor Entity") either:

            (A) expressly assumes all of the obligations of the Trust under the
                Securities; or

            (B) substitutes for the Securities other securities having
                substantially the same terms as the Preferred Securities (the
                "Successor Securities") as long as the Successor Securities
                rank, with respect to participation in the profits and
                distributions and payments upon liquidation, redemption and
                otherwise at least as high as the Preferred Securities rank with
                respect to participation in the profits and dividends and
                payments upon liquidation redemption and otherwise;

                                       23
<PAGE>

        (ii) the Debenture Issuer appoints a Trustee of such Successor Entity
             possessing the same powers and duties of the Property Trustee as
             the Holder of the Debentures;

        (iii) the Preferred Securities or any Successor Securities are listed,
              or any Successor Securities will be listed upon notification of
              issuance, on any national securities exchange or with any other
              organization on which the Preferred Securities are then listed or
              quoted;

        (iv) such merger, consolidation, amalgamation, or replacement does not
             cause the Preferred Securities (including any Successor Securities)
             to be downgraded by any nationally recognized statistical rating
             organization;

        (v)  such merger, consolidation, amalgamation, replacement or does not
             adversely affect the powers, preferences and other special rights
             of the Holders of the Preferred Securities (including any Successor
             Securities) in any material respect;

        (vi) such Successor Entity has a purpose substantially identical to that
             of the Trust;

        (vii) prior to such merger, consolidation, amalgamation, or replacement
              , the Sponsor has received an opinion of a nationally recognized
              independent counsel (reasonably acceptable to the Property
              Trustee) to the Trust experienced in such matters to the effect
              that:

              (A) the Successor Entity will be treated as a grantor trust for
                  United States federal income tax purposes;

              (B) following such merger, consolidation, amalgamation or
                  replacement, neither the Sponsor nor the Successor Entity will
                  be required to register as an Investment Company; and

              (C) such merger, consolidation, amalgamation or replacement will
                  not adversely affect the limited liability of the Holders of
                  the Securities (including any Successor Securities); and

        (viii) the Sponsor provides a guarantee to the Holders of the Successor
               Securities with respect to the Successor Entity having
               substantially the same terms as the Preferred Securities
               Guarantee; and

        (ix) such merger, consolidation, amalgamation, replacement or lease is
             not a taxable event for holders of the Preferred Securities.

(c)  Notwithstanding Section 3.15(b), the Trust shall not, except with the
     consent of Holders of 100% in liquidation amount of the Securities,
     consolidate, amalgamate, merge with or into, or be replaced by any other
     entity or permit any other entity to consolidate, amalgamate,

                                       24
<PAGE>

     merge with or into, or replace it if such consolidation, amalgamation,
     merger or replacement would cause the Trust or Successor Entity to be
     classified as other than a grantor trust for United States federal income
     tax purposes.

                                    ARTICLE IV

                                    Sponsor

Section 4.01   Sponsor's Purchase of Common Securities.

     On the Closing Date and any Optional Closing Date the Sponsor will purchase
an amount of Common Securities issued by the Trust such that the aggregate
liquidation amount of such Common Securities purchased by the Sponsor shall at
such date equal at least 3% of the total capital of the Trust.

Section 4.02   Responsibilities of the Sponsor.

     In connection with the issue and sale of the Preferred Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:

(a)  to prepare the Offering Circular and to prepare for filing by the Trust
     with the Commission the Shelf Registration Statement, including any
     amendments thereto;

(b)  to determine the States and foreign jurisdictions in which to take
     appropriate action to qualify or register for sale all or part of the
     Preferred Securities and to do any and all such acts, other than actions
     which must be taken by the Trust, and advise the Trust of actions it must
     take, and prepare for execution and filing any documents to be executed and
     filed by the Trust, as the Sponsor deems necessary or advisable in order to
     comply with the applicable laws of any such States and foreign
     jurisdictions;

(c)  if deemed necessary or advisable by the Sponsor, to prepare for filing by
     the Trust an application to PORTAL and to the New York Stock Exchange or
     any other national stock exchange or the Nasdaq National Market for listing
     or quotation of the Preferred Securities;

(d)  if deemed necessary or advisable by the Sponsor, to prepare for filing by
     the Trust with the Commission a registration statement on Form 8-A relating
     to the registration of the Preferred Securities under Section 12 of the
     Exchange Act, including any amendments thereto; and

(e)  to negotiate the terms of the Purchase Agreement, Registration Rights
     Agreement and other related agreements providing for the sale of the
     Preferred Securities.

Section 4.03   Guarantee of Payment of Trust Obligations.

(a)  Subject to the terms and conditions of this Section 4.03, the Sponsor
     hereby irrevocably and unconditionally guarantees to each Person to whom
     the Trust is now or hereafter

                                       25
<PAGE>

     becomes indebted or liable (the "Beneficiaries") the full payment, when and
     as due, of any and all Obligations to such Beneficiaries.

(b)  The agreement of the Sponsor in Section 4.03(a) is intended to be for the
     benefit of, and to be enforceable by, all such Beneficiaries, whether or
     not such Beneficiaries have received notice hereof.

(c)  The agreement of the Sponsor set forth in Section 4.03(a) shall terminate
     and be of no further force and effect upon the later of (a) the date on
     which full payment has been made of all amounts payable to all Holders of
     all the Preferred Securities (whether upon redemption, liquidation,
     exchange or otherwise) and (b) the date on which there are no Beneficiaries
     remaining; provided, however, that such agreement shall continue to be
     effective or shall be reinstated, as the case may be, if at any time any
     Holder of Preferred Securities or any Beneficiary must restore payment of
     any sums paid under the Preferred Securities, under any Obligation, under
     the Preferred Securities Guarantee or under this Agreement for any reason
     whatsoever. Such agreement is continuing, irrevocable, unconditional and
     absolute.

                                    ARTICLE V

                                    Trustees

Section 5.01   Number of Trustees.

     Subject to Section 5.02, the number of Trustees shall initially be five
(5), and:

(a)  at any time before the issuance of any Securities, the Sponsor may, by
     written instrument, increase or decrease the number of Trustees; and

(b)  after the issuance of any Securities:

        (i) the number of Trustees may be increased or decreased, except as
            provided in Sections 5.01(b)(ii) and 5.06(a)(ii)(B) with respect to
            the Special Trustee, by vote of the Holders of a Majority in
            liquidation amount of the Common Securities voting as a class at a
            meeting of the Holders of the Common Securities; and

        (ii) the number of Trustees shall be increased automatically by one (1)
             if an Appointment Event has occurred and is continuing and the
             Holders of a Majority in liquidation amount of the Preferred
             Securities appoint a Special Trustee in accordance with Section
             5.06(a)(ii).

Section 5.02   Delaware Trustee.

     If required by the Business Trust Act, one Trustee (the "Delaware Trustee")
shall either be (i) a natural person who is at least 21 years of age and a
resident of the State of Delaware, or (ii) an entity which has its principal
place of business in the State of Delaware, and otherwise meets the requirements
of applicable law, provided that, if the Property Trustee has its principal
place of

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<PAGE>

business in the State of Delaware and otherwise meets the requirements of
applicable law, then the Property Trustee shall also be the Delaware Trustee and
Section 3.11 shall have no application.

Section 5.03   Property Trustee; Eligibility.

(a)  There shall at all times be one Trustee which shall act as Property Trustee
     which shall:

        (i)  not be an Affiliate of the Sponsor; and

        (ii) be a corporation organized and doing business under the laws of the
             United States of America or any State or Territory thereof or of
             the District of Columbia, or a corporation or Person permitted by
             the Commission to act as an institutional trustee under the Trust
             Indenture Act, authorized under such laws to exercise corporate
             trust powers, having a combined capital and surplus of at least 50
             million U.S. dollars ($50,000,000), and subject to supervision or
             examination by Federal, State, Territorial or District of Columbia
             authority. If such corporation publishes reports of condition at
             least annually, pursuant to law or to the requirements of the
             supervising or examining authority referred to above, then for the
             purposes of this Section 5.03(a)(ii), the combined capital and
             surplus of such corporation shall be deemed to be its combined
             capital and surplus as set forth in its most recent report of
             condition so published.

(b)  If at any time the Property Trustee shall cease to be eligible to so act
     under Section 5.03(a), the Property Trustee shall immediately resign in the
     manner and with the effect set forth in Section 5.06(e).

(c)  If the Property Trustee has or shall acquire any "conflicting interest"
     within the meaning of Section 310(b) of the Trust Indenture Act, the
     Property Trustee and the Holder of the Common Securities (as if it were the
     obligor referred to in Section 310(b) of the Trust Indenture Act) shall in
     all respects comply with the provisions of Section 310(b) of the Trust
     Indenture Act.

(d)  The Preferred Securities Guarantee shall be deemed to be specifically
     described in this Declaration for purposes of clause (i) of the first
     provision contained in Section 310(b) of the Trust Indenture Act.

Section 5.04   Qualifications of Administrative Trustees and Delaware Trustee
               Generally.

     Each Administrative Trustee and the Delaware Trustee (unless the Property
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.

Section 5.05   Initial Trustees.

     The initial Administrative Trustees shall be:

                                       27
<PAGE>

        Curtis A. Bedrich
        c/o Hanover Compressor Company
        12001 North Houston Rosslyn
        Houston, Texas 77086

        William S. Goldberg
        c/o Hanover Compressor Company
        12001 North Houston Rosslyn
        Houston, Texas 77086

        Richard S. Meller
        c/o Hanover Compressor Company
        12001 North Houston Rosslyn
        Houston, Texas 77086

The initial Delaware Trustee shall be:

        Wilmington Trust Company
        Rodney Square North
        1100 North Market Street
        Wilmington, Delaware
        19890-0001
        Attention: Corporate Trust Administration

The initial Property Trustee shall be:

        Wilmington Trust Company
        Rodney Square North
        1100 North Market Street
        Wilmington, Delaware
        19890-0001
        Attention: Corporate Trust Administration

Section 5.06   Appointment, Removal and Resignation of Trustees.

(a)  Except as provided otherwise in this Section 5.06(b) and 5.06(d), Trustees
     may be appointed or removed without cause at any time:

        (i) until the issuance of any Securities, by written instrument executed
            by the Sponsor; and

        (ii) after the issuance of any Securities:

             (A) other than in respect to a Special Trustee, by vote of the
                 Holders of a Majority in liquidation amount of the Common
                 Securities voting as a class at a meeting of the Holders of the
                 Common Securities or by written consent,

                                       28
<PAGE>

                 unless a Debenture Event of Default shall have occurred and be
                 continuing, in which event the Property Trustee and the
                 Delaware Trustee may only be removed by the Holders of a
                 Majority in liquidation amount of the Preferred Securities,
                 voting as a class at a meeting of the Holders of the Preferred
                 Securities or by written consent; and

             (B) if an Appointment Event has occurred and is continuing, one (1)
                 additional trustee (the "Special Trustee"), who shall have the
                 same rights, powers and privileges as an Administrative
                 Trustee, may be appointed by vote of the Holders of a Majority
                 in liquidation amount of the Preferred Securities, voting as a
                 class at a meeting of the Holders of the Preferred Securities,
                 and such Special Trustee may only be removed (otherwise than by
                 the operation of Section 5.06(e)), by vote of the Holders of a
                 Majority in liquidation amount of the Preferred Securities
                 voting as a class at a meeting of the Holders of the Preferred
                 Securities.

(b)  The Trustee that acts as Property Trustee shall not be removed in
     accordance with Section 5.06(a) until a successor Property Trustee meeting
     the requirements of Section 5.03 (a "Successor Property Trustee") has been
     appointed and has accepted such appointment by written instrument executed
     by such Successor Property Trustee and delivered to the Administrative
     Trustees and the Sponsor.

(c)  The Holders of a Majority in liquidation amount of the Common Securities
     shall remove the Property Trustee by written instrument upon:

        (i) the entry or a decree or order by a court having jurisdiction in the
            premises adjudging the Property Trustee as bankrupt or insolvent, or
            approving as properly filed a petition seeking reorganization,
            arrangement, adjustment or composition of or in respect of the
            Property Trustee under any applicable federal or state bankruptcy,
            insolvency, reorganization or other similar law, or appointing a
            receiver, liquidator, assignee, trustee, sequestrator (or other
            similar official) of the Property Trustee or of any substantial part
            of its property or ordering the winding up or liquidation of its
            affairs, and the continuance of any such decree or order unstayed
            and in effect for a period of 60 consecutive days; or

        (ii) the institution by the Property Trustee of proceedings to be
             adjudicated a bankrupt or insolvent, or the consent by it to the
             institution of bankruptcy or insolvency proceedings against it, or
             the filing by it of a petition or answer or consent seeking
             reorganization or relief under any applicable federal or state
             bankruptcy, insolvency, reorganization or other similar law, or the
             consent by it to the filing of any such petition or to the
             appointment of a receiver, liquidator, assignee, trustee,
             sequestrator (or other similar official) of the Property Trustee or
             of any substantial part of its property, or the making by it of an
             assignment for the benefit of creditors, or the admission by it in
             writing of its inability to pay its debts generally as they become
             due and its willingness to be adjudicated a bankrupt, or the taking
             of corporate action by the Property Trustee in furtherance of any
             such action.

The Sponsor shall appoint a Successor Property Trustee within 60 days of such an
event.

                                       29
<PAGE>

(d)  The Trustee that acts as Delaware Trustee shall not be removed in
     accordance with Section 5.06(a) until a successor Trustee possessing the
     qualifications to act as Delaware Trustee under Sections 5.02 and 5.04 (a
     "Successor Delaware Trustee") has been appointed and has accepted such
     appointment by written instrument executed by such Successor Delaware
     Trustee and delivered to the Trustees and the Sponsor.

(e)  A Trustee appointed to office shall hold office until his successor shall
     have been appointed or until his death, removal or resignation, provided
     that a Special Trustee shall only hold office while an Appointment Event is
     continuing and shall cease to hold office immediately after the Appointment
     Event pursuant to which the Special Trustee was appointed and all other
     Appointment Events cease to be continuing. Any Trustee may resign from
     office (without need for prior or subsequent accounting) by an instrument
     in writing signed by the Trustee and delivered to the Sponsor and the
     Trust, which resignation shall take effect upon such delivery or upon such
     later date as is specified therein; provided, however, that:

        (i)  No such resignation of the Trustee that acts as the Property
             Trustee shall be effective:

             (A) until a Successor Property Trustee has been appointed and has
                 accepted such appointment by instrument executed by such
                 Successor Property Trustee and delivered to the Trust, the
                 Sponsor and the resigning Property Trustee; or

             (B) until the assets of the Trust have been completely liquidated
                 and the proceeds thereof distributed to the holders of the
                 Securities;

        (ii) no such resignation of the Trustee that acts as the Delaware
             Trustee shall be effective until a Successor Delaware Trustee has
             been appointed and has accepted such appointment by instrument
             executed by such Successor Delaware Trustee and delivered to the
             Trust, the Sponsor and the resigning Delaware Trustee; and

        (iii) no such resignation of a Special Trustee shall be effective until
              the 60th day following delivery of the instrument of resignation
              of the Special Trustee to the Sponsor and the Trust or such later
              date specified in such instrument during which period the Holders
              of the Preferred Securities shall have the right to appoint a
              successor Special Trustee as provided in this Section 5.06.

(f)  The Holders of the Common Securities shall use their best efforts to
     promptly appoint a Successor Property Trustee or Successor Delaware
     Trustee, as the case may be, if the Property Trustee or the Delaware
     Trustee delivers an instrument of resignation in accordance with this
     Section 5.06.

(g)  If no Successor Property Trustee or Successor Delaware Trustee shall have
     been appointed and accepted appointment as provided in this Section 5.06
     within 60 days after delivery to the Sponsor and the Trust of an instrument
     of resignation or removal, at the cost of the Sponsor the resigning
     Property Trustee or Delaware Trustee, resigning or being removed as

                                       30
<PAGE>

     applicable, may petition any court of competent jurisdiction for
     appointment of a Successor Property Trustee or Successor Delaware Trustee.
     Such court may thereupon, after prescribing such notice, if any, as it may
     deem proper and prescribe, appoint a Successor Property Trustee or
     Successor Delaware Trustee, as the case may be.

(h)  No Property Trustee or Delaware Trustee shall be liable for the acts or
     omissions to act of any Successor Property Trustee or Successor Delaware
     Trustee, as the case may be.

Section 5.07   Vacancies among Trustees.

     If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.01, or if the number of Trustees
is increased pursuant to Section 5.01, a vacancy shall occur. A resolution
certifying the existence of such vacancy by a majority of the Administrative
Trustees shall be conclusive evidence of the existence of such vacancy. The
vacancy shall be filled with a Trustee appointed in accordance with Section
5.06.

Section 5.08   Effect of Vacancies.

     The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to annul, dissolve or terminate the Trust.

     Whenever a vacancy in the number of Administrative Trustees shall occur,
until such vacancy is filled by the appointment of a Administrative Trustee in
accordance with Section 5.06, the Administrative Trustees in office, regardless
of their number, shall have all the powers granted to the Administrative
Trustees and shall discharge all the duties imposed upon the Administrative
Trustees by this Declaration.

Section 5.09   Meetings.

     Meetings of the Administrative Trustees shall be held from time to time
upon the call of any Administrative Trustee. Regular meetings of the
Administrative Trustees may be held at a time and place fixed by resolution of
the Administrative Trustees. Notice of any meetings of the Administrative
Trustees shall be hand delivered or otherwise delivered in writing (including by
facsimile or overnight courier) not less than 24 hours before such meeting.
Notices shall contain a brief statement of the time, place and anticipated
purposes of the meeting. The presence (whether in person or by telephone) of a
Administrative Trustee at a meeting shall constitute a waiver of notice of such
meeting except where a Administrative Trustee attends a meeting for the express
purpose of objecting to the transaction of any activity on the ground that the
meeting has not been lawfully called or convened. Unless provided otherwise in
this Declaration, any action of the Administrative Trustees may be taken at a
meeting by vote of a majority of the Administrative Trustees present (whether in
person or by telephone) and eligible to vote with respect to such matter,
provided that a Quorum is present, or without a meeting and without prior notice
by the unanimous written consent of the Administrative Trustees.

                                       31
<PAGE>

     In the event there is only one Administrative Trustee, any and all action
of such Administrative Trustee shall be evidenced by a written consent of such
Administrative Trustee. In the event a Special Trustee is holding office
pursuant to Section 5.06, such Special Trustee shall have the same rights as an
Administrative Trustee with respect to participation in a meeting of the
Administrative Trustees.

Section 5.10   Delegation of Power.

(a)  Any Administrative Trustee may, by power of attorney consistent with
     applicable law, delegate to any other natural person over the age of 21 his
     or her power for the purpose of executing any documents contemplated in
     Section 3.06, including any registration statement or amendment thereto
     filed with the Commission, or making any other governmental filing; and

(b)  The Administrative Trustees shall have power to delegate from time to time
     to such of their number or to officers of the Trust the doing of such
     things and the execution of such instruments either in the name of the
     Trust or the names of the Administrative Trustees or otherwise as the
     Administrative Trustees may deem expedient, to the extent such delegation
     is not prohibited by applicable law or contrary to the provisions of the
     Trust, as set forth herein.

Section 5.11   Merger, Conversion, Consolidation or Succession to Business.

     Any Person into which the Property Trustee or the Delaware Trustee, as the
case may be, may be merged or converted or with which either may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Property Trustee or the Delaware Trustee, as the case
may be, shall be a party, or any Person succeeding to all or substantially all
the corporate trust business of the Property Trustee or the Delaware Trustee, as
the case may be, shall be the successor of the Property Trustee or the Delaware
Trustee, as the case may be, hereunder, provided such Person shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto.

                                    ARTICLE VI

                                 Distributions

Section 6.01   Distributions.

     Holders shall receive Distributions (as defined herein) in accordance with
the applicable terms of the relevant Holder's Securities. Distributions shall be
made on the Preferred Securities and the Common Securities in accordance with
the preferences set forth in their respective terms. If and to the extent that
the Debenture Issuer makes a payment of interest (including Compounded Interest
(as defined in the Indenture) and Additional Sums (as defined in the Indenture))
premium and principal on the Debentures held by the Property Trustee (the amount
of any such payment being a "Payment Amount"), the Property Trustee shall and is
directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders.

                                       32
<PAGE>

                                   ARTICLE VII

                             Issuance of Securities

Section 7.01  General Provisions Regarding Securities.

(a)  The Administrative Trustees shall on behalf of the Trust issue one class of
     convertible preferred securities, designated as 7 1/4% Convertible
     Preferred Securities, Term Income Deferrable Equity Securities (TIDES)(SM),
     representing undivided beneficial interests in the assets of the Trust (the
     "Preferred Securities"), having such terms as are set forth in Annex I and
     one class of convertible common securities, liquidation amount $50,
     representing undivided beneficial interests in the assets of the Trust (the
     "Common Securities"), having such terms as are set forth in Annex I. The
     Trust shall have no securities or other interests in the assets of the
     Trust other than the Preferred Securities and the Common Securities. The
     Trust shall issue no Securities in bearer form.

(b)  The consideration received by the Trust for the issuance of the Securities
     shall constitute a contribution to the capital of the Trust and shall not
     constitute a loan to the Trust.

(c)  Upon issuance of the Securities as provided in this Declaration, the
     Securities so issued shall be deemed to be validly issued, fully paid and
     non-assessable, subject to Section 10.01 with respect to the Common
     Securities.

(d)  Every Person, by virtue of having become a Holder or a Preferred Security
     Beneficial Owner in accordance with the terms of this Declaration, shall be
     deemed to have expressly assented and agreed to the terms of, and shall be
     bound by, this Declaration.

(e)  Every Person, by virtue of having become a Holder or a Preferred Securities
     Beneficial Owner in accordance with the terms of this Declaration, shall be
     deemed to have covenanted to treat the Debentures as indebtedness and the
     Securities as evidence of an indirect beneficial ownership interest in the
     Debentures.

Section 7.02  Execution and Authentication.

(a)  The Securities shall be signed on behalf of the Trust by one Administrative
     Trustee. In case any Administrative Trustee of the Trust who shall have
     signed any of the Securities shall cease to be such Administrative Trustee
     before the Securities so signed shall be delivered by the Trust, such
     Securities nevertheless may be delivered as though the person who signed
     such Securities had not ceased to be such Administrative Trustee; and any
     Securities may be signed on behalf of the Trust by such persons who, at the
     actual date of execution of such Security, shall be the Administrative
     Trustees of the Trust, although at the date of delivery of the Declaration
     any such person was not such a Administrative Trustee.

(b)  One Administrative Trustee shall sign the Preferred Securities and the
     Common Securities for the Trust by manual or facsimile signature.

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<PAGE>

     A Preferred Security shall not be valid until authenticated by the manual
or facsimile signature of an authorized signatory of the Property Trustee. The
signature shall be conclusive evidence that the Preferred Security has been
authenticated under this Declaration.

     Upon a written order of the Trust signed by one Administrative Trustee, the
Property Trustee shall authenticate the Preferred Securities for original issue
by executing the Property Trustee's certificate of authentication contained in
the form of Preferred Securities attached hereto as Exhibit A-1. The aggregate
number of Preferred Securities outstanding at any time shall not exceed the
number set forth in the terms in Annex I hereto except as provided in Section
7.06.

     The Property Trustee may appoint an authenticating agent acceptable to the
Trust to authenticate Preferred Securities. An authenticating agent may
authenticate Preferred Securities whenever the Property Trustee may do so. Each
reference in this Declaration to authentication by the Property Trustee includes
authentication by such agent. An authenticating agent has the same rights as the
Property Trustee to deal with the Company or an Affiliate.

Section 7.03  Form and Dating.

     The Preferred Securities and the Property Trustee's certificate of
authentication shall be substantially in the form of Exhibit A-1 and the Common
Securities shall be substantially in the form of Exhibit A-2, each of which is
hereby incorporated in and expressly made a part of this Declaration.
Certificates may be printed, lithographed or engraved or may be produced in any
other manner as is reasonably acceptable to the Administrative Trustees, as
evidenced by their execution thereof. The Securities may have letters, numbers,
notations or other marks of identification or designation and such legends or
endorsements required by law, stock exchange rule, agreements to which the Trust
is subject, if any, or usage (provided that any such notation, legend or
endorsement is in a form acceptable to the Trust). The Trust at the direction of
the Sponsor shall furnish any such legend not contained in Exhibit A-1 to the
Property Trustee in writing. Each Preferred Security shall be dated the date of
its authentication. The terms and provisions of the Securities set forth in
Annex I and the forms of Securities set forth in Exhibits A-1 and A-2 are part
of the terms of this Declaration and to the extent applicable, the Property
Trustee and the Sponsor, by their execution and delivery of this Declaration,
expressly agree to such terms and provisions and to be bound thereby.

     The Preferred Securities are being offered and sold by the Trust pursuant
to a Purchase Agreement relating to the Preferred Securities, dated December 9,
1999, among the Trust, the Sponsor and the Purchasers named therein (the
"Purchase Agreement").

(a)  Global Securities. Preferred Securities offered and sold to Qualified
     Institutional Buyers ("QIBs") in reliance on Rule 144A under the Securities
     Act ("Rule 144A") as provided in the Purchase Agreement, shall be issued in
     the form of one or more permanent global Securities in definitive, fully
     registered form without distribution coupons with the appropriate global
     legends, ERISA legend and Restricted Securities Legend set forth in Exhibit
     A-1 hereto (each, a "Rule 144A Global Preferred Security"), which shall be
     deposited on behalf of the purchasers of the Preferred Securities
     represented thereby with the Property Trustee, at its Wilmington, Delaware
     office, as custodian for the Depositary, and registered in the name of the
     Depositary or a nominee

                                       34
<PAGE>

     of the Depositary, duly executed by an Administrative Trustee on behalf of
     the Trust and authenticated by the Property Trustee as provided herein. The
     number of Preferred Securities represented by the Rule 144A Global
     Preferred Security may from time to time be increased or decreased by
     adjustments made on the records of the Property Trustee and the Depositary
     or its nominee as hereinafter provided.

(b)  Book-Entry Provisions. This Section 7.03(b) shall apply only to the Rule
     144A Global Preferred Securities and such other Preferred Securities in
     global form as may be authorized by the Trust to be deposited with or on
     behalf of the Depositary.

     An Administrative Trustee on behalf of the Trust shall execute and the
Property Trustee shall, in accordance with this Section 7.03, authenticate and
deliver initially one or more Rule 144A Global Preferred Securities that (a)
shall be registered in the name of Cede & Co. or other nominee of such
Depositary and (b) shall be delivered by the Trustee to such Depositary or
pursuant to such Depositary's written instructions or held by the Trustee as
custodian for the Depositary.

     Members of, or participants in, the Depositary ("Participants") shall have
no rights under this Declaration with respect to any Rule 144A Global Preferred
Security held on their behalf by the Depositary or by the Property Trustee as
the custodian of the Depositary or under such Rule 144A Global Preferred
Security, and the Depositary may be treated by the Trust, the Property Trustee
and any agent of the Trust or the Property Trustee as the absolute owner of such
Rule 144A Global Preferred Security for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall prevent the Trust, the Property Trustee or
any agent of the Trust or the Property Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or
impair, as between the Depositary and its Participants, the operation of
customary practices of such Depositary governing the exercise of the rights of a
holder of a beneficial interest in any Rule 144A Global Preferred Security.

(c)  Certificated Securities. Except as provided in Section 7.03(d), owners of
     beneficial interests in the Rule 144A Global Preferred Security will not be
     entitled to receive physical delivery of certificated Preferred Securities.

(d)  A Global Preferred Security deposited with the Depositary or with the
     Property Trustee as custodian for the Depositary pursuant to this Section
     7.03 shall be transferred to the beneficial owners thereof in the form of
     certificated Preferred Securities only if such transfer complies with
     Section 9.02 and (i) the Depositary notifies the Company that it is
     unwilling or unable to continue as Depositary for such Global Preferred
     Security or if at any time such Depositary ceases to be a "clearing agency"
     registered under the Exchange Act, at a time when the Depositary is
     required to be so registered to act as such depositary, (ii) the Sponsor on
     behalf of the Trust in its sole discretion determines that such Global
     Preferred Security shall be so exchangeable, or (iii) an Event of Default
     has occurred and is continuing.

(e)  Any Global Preferred Security that is transferable to the beneficial owners
     thereof in the form of certificated Preferred Securities pursuant to this
     Section 7.03 shall be surrendered by the Depositary to the Property Trustee
     located in Wilmington, Delaware, to be so transferred, in whole or from
     time to time in part, without charge, and the Property Trustee shall

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<PAGE>

     authenticate and deliver, upon such transfer of each portion of such Global
     Preferred Security, an equal aggregate liquidation amount of Preferred
     Securities of authorized denominations in the form of certificated
     Preferred Securities. Any portion of a Global Preferred Security
     transferred pursuant to this Section shall be registered in such names as
     the Depositary shall direct. Any Preferred Security in the form of
     certificated Preferred Securities delivered in exchange for an interest in
     the Rule 144A Global Preferred Security shall, except as otherwise provided
     by Section 9.01, bear the Restricted Securities Legend set forth in Exhibit
     A hereto.

(f)  Subject to the provisions of Section 7.03(e), the registered holder of a
     Global Preferred Security may grant proxies and otherwise authorize any
     person, including Participants and persons that may hold interests through
     Participants, to take any action which a holder is entitled to take under
     this Declaration or the Securities.

(g)  In the event of the occurrence of any of the events specified in Section
     7.03(d), the Trust will promptly make available to the Property Trustee a
     reasonable supply of certificated Securities in definitive, fully
     registered form without distribution coupons.

Section 7.04  Registrar, Paying Agent and Conversion Agent.

     The Trust shall maintain in Wilmington, Delaware (i) an office or agency
where Preferred Securities may be presented for registration of transfer or for
exchange ("Registrar"), (ii) an office or agency where Preferred Securities may
be presented for payment ("Paying Agent") and (iii) an office or agency where
Securities may be presented for conversion ("Conversion Agent"). The Registrar
shall keep a register of the Preferred Securities and of their transfer and
exchange. The Trust may appoint the Registrar, the Paying Agent and the
Conversion Agent and may appoint one or more co-registrars, one or more
additional paying agents and one or more additional conversion agents in such
other locations as it shall determine. The term "Paying Agent" includes any
additional paying agent and the term "Conversion Agent" includes any additional
conversion agent. The Trust may change any Paying Agent, Registrar, co-registrar
or Conversion Agent without prior notice to any Holder. The Trust shall notify
the Property Trustee of the name and address of any Agent not a party to this
Declaration. If the Trust fails to appoint or maintain another entity as
Registrar, Paying Agent or Conversion Agent, the Property Trustee shall act as
such. The Trust or any of its Affiliates may act as Paying Agent, Registrar, or
Conversion Agent. The Trust shall act as Paying Agent, Registrar, co-registrar,
and Conversion Agent for the Common Securities.

     The Trust initially appoints the Property Trustee as Registrar, Paying
Agent, and Conversion Agent for the Preferred Securities.

Section 7.05  Paying Agent to Hold Money in Trust.

     The Trust shall require each Paying Agent other than the Property Trustee
to agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Property Trustee all money held by the Paying Agent for the
payment of principal or distribution on the Securities, and will notify the
Property Trustee if there are insufficient funds. While any such insufficiency
continues, the Property Trustee may require a Paying Agent to pay all money held
by it to the Property Trustee. The Trust at any time may require a Paying Agent
to pay all money held by it to the Property Trustee

                                       36
<PAGE>

and to account for any money disbursed by it. Upon payment over to the Property
Trustee, the Paying Agent (if other than the Trust or an Affiliate of the Trust)
shall have no further liability for the money. If the Trust or the Sponsor or an
Affiliate of the Trust or the Sponsor 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 7.06  Replacement Securities.

     If the Holder of a Security claims that the Security has been lost,
destroyed or wrongfully taken or if such Security is mutilated and is
surrendered to the Trust or in the case of the Preferred Securities to the
Property Trustee, an Administrative Trustee on behalf of the Trust shall issue
and, with respect to the Preferred Securities, the Property Trustee shall
authenticate a replacement Security if the Property Trustee's and the Trust's
requirements, as the case may be, are met. If required by the Property Trustee
or the Trust, an indemnity bond must be sufficient in the judgment of both to
protect the Trustees, the Sponsor or any authenticating agent from any loss
which any of them may suffer if a Security is replaced. The Sponsor may charge
for its expenses in replacing a Security.

     In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, or is about to be purchased by the
Sponsor pursuant to Article III hereof, the Sponsor in its discretion may,
instead of issuing a new Security, pay or purchase such Security, as the case
may be.

Section 7.07  Outstanding Preferred Securities.

     The Preferred Securities outstanding at any time are all the Preferred
Securities authenticated by the Property Trustee except for those canceled by
it, those delivered to it for cancellation, and those described in this Section
as not outstanding.

     If a Preferred Security is replaced, paid or purchased pursuant to Section
7.06 hereof, it ceases to be outstanding unless the Property Trustee receives
proof satisfactory to it that the replaced, paid or purchased Preferred Security
is held by a protected purchaser.

     If Preferred Securities are considered paid in accordance with the terms of
this Declaration, they cease to be outstanding and Distributions on them cease
to accumulate.

     A Preferred Security does not cease to be outstanding because one of the
Trustees, the Trust, the Sponsor or an Affiliate of the Sponsor or Trustees
holds the Security.

Section 7.08  Preferred Securities in Treasury.

     In determining whether the Holders of the required amount of Securities
have concurred in any direction, waiver or consent, Preferred Securities owned
by the Trust, the Sponsor or an Affiliate of the Sponsor, as the case may be,
shall be disregarded and deemed not to be outstanding, except that for the
purposes of determining whether the Property Trustee shall be fully protected in
relying

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<PAGE>

on any such direction, waiver or consent, only Securities which the Property
Trustee actually knows are so owned shall be so disregarded.

Section 7.09  Temporary Securities.

     Until definitive Securities are ready for delivery, an Administrative
Trustee may prepare and, in the case of the Preferred Securities, the Property
Trustee shall authenticate temporary Securities. Temporary Securities shall be
substantially in the form of definitive Securities but may have variations that
an Administrative Trustee considers appropriate for temporary Securities.
Without unreasonable delay, an Administrative Trustee shall prepare and deliver
to the Property Trustee Preferred Securities in certificated form (other than in
the case of Preferred Securities in global form) and thereupon any or all
temporary Preferred Securities (other than any such Preferred Securities in
global form) may be surrendered in exchange therefor, at the office of the
Registrar, and the Property Trustee shall authenticate and deliver an equal
aggregate liquidation amount of definitive Preferred Securities in certificated
form in exchange for temporary Preferred Securities (other than any such
Preferred Securities in global form).

Section 7.10  Cancellation.

     The Trust at any time may deliver Preferred Securities to the Property
Trustee for cancellation. The Registrar, Paying Agent and Conversion Agent shall
forward to the Property Trustee any Preferred Securities surrendered to them for
registration of transfer, redemption, conversion, exchange or payment. The
Property Trustee shall promptly cancel all Preferred Securities, surrendered for
registration of transfer, redemption, conversion, exchange, payment, replacement
or cancellation and shall return such canceled Preferred Securities to the
Administrative Trustees. The Trust may not issue new Preferred Securities to
replace Preferred Securities that it has paid or that have been delivered to the
Property Trustee for cancellation or that any holder has converted.

                                   ARTICLE VII

                      Dissolution and Termination of Trust

Section 8.01  Termination of Trust.

(a)  The Trust shall dissolve upon the earliest to occur of the following:

        (i)  the bankruptcy of the Holder of the Common Securities or the
             Sponsor;

        (ii) the filing of a certificate of dissolution or its equivalent with
             respect to the Holder of the Common Securities or the Sponsor; the
             revocation of the charter of the Holder of the Common Securities or
             the Sponsor and the expiration of 90 days after the date of
             revocation without a reinstatement thereof;

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<PAGE>

        (iii) the written direction of the Sponsor, as the Holder of the
              outstanding Common Securities, to the Property Trustee to dissolve
              the Trust and distribute a Like Amount of Debentures to Holders of
              the Securities in accordance with the terms of the Securities;

        (iv) all of the Securities shall have been called for redemption and the
             amounts necessary for redemption thereof shall have been paid to
             the Holders in accordance with the terms of the Securities;

        (v)  the entry of a decree of judicial dissolution of the Holder of the
             Common Securities, the Sponsor or the Trust;

        (vi)  upon the distribution of the Common Stock (as defined in the
              Indenture) of the Sponsor to Holders of all outstanding Securities
              upon conversion of all such Securities;

        (vii) the expiration of the term of the Trust as set forth in Section
              3.14 hereof; or

        (viii) before the issuance of any Securities, with the consent of all
               the Administrative Trustees and the Sponsor.

(b)  As soon as is practicable after the occurrence of an event referred to in
     Section 8.01(a) and after satisfaction of liabilities of creditors of the
     Trust as provided by applicable law, any one of the Trustees (each of whom
     is hereby authorized to take such action) shall file a certificate of
     cancellation with the Secretary of State of the State of Delaware
     terminating the Trust and, upon such filing, the respective obligations and
     responsibilities of the Trustees and the Trust created and continued
     hereby, shall terminate.

(c)  The provisions of Sections 3.09, 4.03, 10.01(b), 10.04, the last sentence
     of Section 3.06 and Article X shall survive the termination of the Trust.

                                    ARTICLE IX

                             Transfer and Exchange

Section 9.01  General.

(a)  Where Preferred Securities are presented to the Registrar or a co-registrar
     with a request to register a transfer or to exchange them for an equal
     number of Preferred Securities represented by different certificates, the
     Registrar shall register the transfer or make the exchange if its
     requirements for such transactions are met. To permit registrations of
     transfers and exchanges, the Administrative Trustee in accordance with this
     Declaration shall execute and deliver and the Property Trustee shall
     authenticate Preferred Securities at the Registrar's request.

                                       39
<PAGE>

(b)  Securities may only be transferred, in whole or in part, in accordance with
     the terms and conditions set forth in this Declaration and in the terms of
     the Securities. To the fullest extent permitted by law, any transfer or
     purported transfer of any Security not made in accordance with this
     Declaration shall be null and void.

     Subject to this Article IX, the Sponsor and any Related Party may only
transfer Common Securities to the Sponsor or a Related Party of the Sponsor or
as otherwise permitted by Article VIII of the Indenture; provided that, any such
transfer is subject to the condition precedent that the transferor obtain the
written opinion of nationally recognized independent counsel experienced in such
matters that such transfer would not cause more than an insubstantial risk that:

        (i)  the Trust would not be classified for United States federal income
             tax purposes as a grantor trust; and

        (ii) the Trust would be an Investment Company or the transferee would
             become an Investment Company.

(c)  The Administrative Trustees shall provide for the registration of
     Securities and of transfers of Securities, which will be effected without
     charge but only upon payment (with such indemnity as the Administrative
     Trustees or Property Trustee may require) in respect of any tax or other
     governmental charges that may be imposed in relation to it. Upon surrender
     for registration of transfer of any Securities, the Administrative Trustees
     shall cause one or more new Securities to be issued in the name of the
     designated transferee or transferees. Every Security surrendered for
     registration of transfer shall be accompanied by a written instrument of
     transfer in form satisfactory to the Administrative Trustees duly executed
     by the Holder or such Holder's attorney duly authorized in writing. Each
     Security surrendered for registration of transfer shall be canceled in
     accordance with Section 7.10. A transferee of a Security shall be entitled
     to the rights and subject to the obligations of a Holder hereunder upon the
     receipt by such transferee of a Security. By acceptance of a Security, each
     transferee shall be deemed to have agreed to be bound by this Declaration.

(d)  The Trust shall not be required (i) to issue, register the transfer of, or
     exchange, Preferred Securities during a period beginning at the opening of
     business 15 days before the day of any selection of Preferred Securities
     for redemption set forth in the terms of the Securities as set forth in
     Annex I hereto and ending at the close of business on the day of selection,
     or (ii) to register the transfer or exchange of any Preferred Security so
     selected for redemption in whole or in part, except the unredeemed portion
     of any Preferred Security being redeemed in part.

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

Section 9.02  Transfer Procedures and Restrictions.

(a)  General. Subject to Sections 9.02(b) and 9.02(j)(ii), if Preferred
     Securities are issued upon the transfer, exchange or replacement of
     Preferred Securities bearing the Restricted Securities Legend set forth in
     Exhibit A-1 hereto, or if a request is made to remove such Restricted

                                       40
<PAGE>

     Securities Legend on Preferred Securities, the Preferred Securities so
     issued shall bear the Restricted Securities Legend, or the Restricted
     Securities Legend shall not be removed, as the case may be, unless there is
     delivered to the Trust and the Property Trustee such satisfactory evidence,
     which may include an opinion of counsel, as may be reasonably required by
     the Company, that (i) neither the legend nor the restrictions on transfer
     set forth therein are required to ensure that transfers thereof comply with
     the provisions of Rule 144A or Rule 144 under the Securities Act or (ii)
     that such Securities are not "restricted" within the meaning of Rule 144
     under the Securities Act. Upon provision of such satisfactory evidence, the
     Property Trustee, at the written direction of an Administrative Trustee on
     behalf of the Trust, shall authenticate and deliver Preferred Securities
     that do not bear the Restricted Securities Legend.

(b)  Transfers After Effectiveness of Shelf Registration Statement. After the
     effectiveness of a Shelf Registration Statement for any Preferred
     Securities, all requirements pertaining to Restricted Securities Legends on
     any Preferred Security included within such Shelf Registration Statement
     will cease to apply, and beneficial interests in a Preferred Security in
     global form without Restricted Securities Legends will be available to
     transferees of such Preferred Securities, upon directions to transfer such
     Holder's beneficial interest in the Rule 144A Global Preferred Security.
     After the effectiveness of the Shelf Registration Statement, the
     Administrative Trustees shall execute and deliver and the Property Trustee
     shall authenticate a Preferred Security in global form without the
     Restricted Securities Legend (the "Unrestricted Global Preferred Security")
     to deposit with the Depositary to evidence transfers of beneficial
     interests from the Rule 144A Global Preferred Security.

(c)  [Reserved]

(d)  Transfer and Exchange of Definitive Preferred Securities.  When Definitive
     Preferred Securities are presented to the Registrar or co-Registrar

        (x) to register the transfer of such Definitive Preferred Securities; or

        (y) to exchange such Definitive Preferred Securities for an equal number
            of Definitive Preferred Securities of another denomination.

the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Preferred Securities surrendered for
transfer or exchange:

        (i)  shall be duly endorsed or accompanied by a written instrument of
             transfer in form reasonably satisfactory to an Administrative
             Trustee on behalf of the Trust and the Registrar or co-registrar,
             duly executed by the Holder thereof or his attorney duly authorized
             in writing; and

        (ii)  in the case of Definitive Preferred Securities that are Restricted
              Preferred Securities, and are being transferred or exchanged (x)
              pursuant to an effective registration statement under the
              Securities Act or (y) pursuant to, and in compliance with, clause
              (A) or (B) below:

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<PAGE>

               (A)  if such Restricted Preferred Securities are being delivered
                    to the Registrar by a Holder for registration in the name of
                    such Holder, without transfer, such Holder shall deliver a
                    certification to that effect (in the form set forth on the
                    reverse of the Preferred Security); or

                (B) if such Restricted Preferred Securities are being
                    transferred pursuant to an exemption from registration in
                    accordance with Rule 144A or Rule 144 under the Securities
                    Act such Holder shall deliver: (i) a certification to that
                    effect (in the form set forth on the reverse of the
                    Preferred Security) and (ii) if the Trust or Registrar so
                    requests, evidence reasonably satisfactory to them as to the
                    compliance with the restrictions set forth in the Restricted
                    Securities Legend.

     Definitive Preferred Securities that are transferred to QIBs in accordance
with Rule 144A under the Securities Act must take delivery of their interests in
the Preferred Securities in the form of a beneficial interest in the Rule 144A
Global Preferred Security in accordance with Section 9.02(e).

(e)  Restrictions on Transfer of a Definitive Preferred Security for a
     Beneficial Interest in a Global Preferred Security. A Definitive Preferred
     Security may not be exchanged for a beneficial interest in a Global
     Preferred Security except upon satisfaction of the requirements set forth
     below. Upon receipt by the Property Trustee of a Definitive Preferred
     Security, duly endorsed or accompanied by appropriate instruments of
     transfer, in form satisfactory to the Property Trustee, together with
     written instructions directing the Property Trustee to make, or to direct
     the Depositary to make, an adjustment on its books and records with respect
     to such Global Preferred Security to reflect an increase in the number of
     the Preferred Securities represented by the Global Preferred Security, then
     the Property Trustee shall cancel such Definitive Preferred Security and
     cause, or direct the Depositary to cause, the aggregate number of Preferred
     Securities represented by the Global Preferred Security to be increased
     accordingly. If no Global Preferred Securities are then outstanding, the
     Administrative Trustee shall execute and deliver and the Property Trustee
     shall authenticate, upon written order of any Administrative Trustee, an
     appropriate number of Preferred Securities in global form.

(f)  Transfer and Exchange of Global Preferred Securities. The transfer and
     exchange of Global Preferred Securities or beneficial interests therein
     shall be effected through the Depositary, in accordance with this
     Declaration (including applicable restrictions on transfer set forth
     herein, if any) and the procedures of the Depositary therefor.

(g)  Transfer of a Beneficial Interest in a Global Preferred Security for a
     Definitive Preferred Security.

        (i)  The transfer of a beneficial interest in a Rule 144A Global
             Preferred Security in exchange for a Definitive Preferred Security
             will require the delivery by the transferee of a transfer
             certificate in the form set forth in Exhibit A-1.

        (ii) Definitive Preferred Securities issued in exchange for a beneficial
             interest in a Global Preferred Security pursuant to this Section
             9.02(g) shall be registered in

                                       42
<PAGE>

             such names and in such authorized denominations as the Depositary,
             pursuant to instructions from its Participants or indirect
             participants or otherwise, shall instruct the Property Trustee. The
             Property Trustee shall deliver such Preferred Securities to the
             Persons in whose names such Preferred Securities are so registered
             in accordance with the instructions of the Depositary.

(h)  Restrictions on Transfer and Exchange of Global Preferred Securities.
     Notwithstanding any other provisions of this Declaration (other than the
     provisions set forth in Section 7.03), a Global Preferred Security may not
     be transferred as a whole except by the Depositary to a nominee of 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.

(i)  [Reserved].

(j)  Legend.

(i)  Except as permitted by the following paragraph (ii), each Preferred
     Security certificate evidencing the Global Preferred Securities and the
     Definitive Preferred Securities (and all Preferred Securities issued in
     exchange therefor or substitution thereof) shall bear a legend in
     substantially the following form:

        "THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
        TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES
        ACT OF 1933 (THE "SECURITIES ACT"), AND THIS SECURITY AND ANY
        CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES ISSUED UPON EXCHANGE FOR THIS
        SECURITY AND ANY COMMON STOCK ISSUABLE UPON CONVERSION THEREOF MAY NOT
        BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
        REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF
        THIS 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.

        THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE ISSUER AND THE
        COMPANY THAT (A) THIS SECURITY AND ANY CONVERTIBLE JUNIOR SUBORDINATED
        DEBENTURES ISSUABLE UPON EXCHANGE THEREFORE AND COMMON STOCK ISSUABLE
        UPON CONVERSION THEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
        TRANSFERRED, ONLY (i) INSIDE THE UNITED STATES TO A PERSON WHOM THE
        SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL

                                       43
<PAGE>

        BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
        TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (ii) PURSUANT TO AN
        EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE
        144 THEREUNDER (IF AVAILABLE) OR (iii) PURSUANT TO AN EFFECTIVE
        REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (i)
        THROUGH (iii) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
        STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (B)
        THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
        PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED
        TO IN (A) ABOVE."

        (ii) Upon any sale or transfer of a Restricted Preferred Security
             (including any Restricted Preferred Security represented by a
             Global Preferred Security) pursuant to Rule 144 under the
             Securities Act or an effective registration statement under the
             Securities Act the Registrar shall permit the holder thereof to
             exchange such Restricted Preferred Security for an interest in the
             Unrestricted Global Preferred Security.

          THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES,
          REPRESENTS AND WARRANTS THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT
          PLAN SUBJECT TO THE EMPLOYMENT RETIREMENT INCOME SECURITY ACT OF 1974,
          AS AMENDED ("ERISA") OR (ii) THE ACQUISITION AND HOLDING OF THIS
          SECURITY BY IT IS NOT PROHIBITED BY EITHER SECTION 406 OF ERISA OR
          SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR
          IS EXEMPT FROM ANY SUCH PROHIBITION.]

          [Include on Preferred Security, unless otherwise determined by the
          Sponsor in accordance with applicable law --

        (iii)  Each Preferred Security certificate evidencing the Global
               Preferred Securities and the Definitive Preferred Securities (and
               all Preferred Securities issued in exchange therefor or
               substitution thereof) shall bear a legend in substantially the
               following form, unless otherwise determined by the Sponsor in
               accordance with applicable law.

(k)  Cancellation or Adjustment of Global Preferred Security. At such time as
     all beneficial interests in a Global Preferred Security have either been
     exchanged for Definitive Preferred Securities to the extent permitted by
     the Declaration or redeemed, repurchased or cancelled in accordance with
     the terms of this Declaration, such Global Preferred Security shall be
     returned to the Depositary for cancellation or retained and cancelled by
     the Property Trustee. At any time prior to such cancellation, if any
     beneficial interest in a Global Preferred Security is exchanged for

                                       44
<PAGE>

     Definitive Preferred Securities, Preferred Securities represented by such
     Global Preferred Security shall be reduced and an adjustment shall be made
     on the books and records of the Property Trustee (if it is then the
     Securities Custodian for such Global Preferred Security) with respect to
     such Global Preferred Security, by the Property Trustee or the Securities
     Custodian, to reflect such reduction.

(l)  [Reserved]

(m)  No Obligation of the Property Trustee.

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

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

Section 9.03  Deemed Security Holders.

     The Trustees may treat the Person in whose name any Certificate shall be
registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust, the Trustees,
the Registrar or a co-registrar shall have actual or other notice thereof.

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<PAGE>

Section 9.04  [Reserved].

Section 9.05  Notices to Clearing Agency.

     Whenever a notice or other communication to the Preferred Security Holders
is required under this Declaration, the Trustees shall, in the case of any
Global Preferred Security, give all such notices and communications specified
herein to be given to the Preferred Security Holders to the Depositary, and
shall have no notice obligations to the Preferred Security Beneficial Owners.

Section 9.06  Appointment of Successor Clearing Agency.

     If the Depository elects to discontinue its services as securities
depositary with respect to the Preferred Securities, the Administrative Trustees
may, in their sole discretion, appoint a successor Clearing Agency with respect
to such Preferred Securities.

                                    ARTICLE X

     Limitation of Liability of Holders of Securities, Trustees or Others

Section 10.01  Liability.

(a)  Except as expressly set forth in this Declaration, the Securities
     Guarantees and the terms of the Securities the Sponsor shall not be:

        (i)  personally liable for the return of any portion of the capital
             contributions (or any return thereon) of the Holders of the
             Securities which shall be made solely from assets of the Trust; or

        (ii) required to pay to the Trust or to any Holder of Securities any
             deficit upon dissolution of the Trust or otherwise.

(b)  The Holder of the Common Securities shall be liable for all of the debts
     and obligations of the Trust (other than with respect to the Securities) to
     the extent not satisfied out of the Trust's assets.

(c)  Pursuant to Section 3803(a) of the Business Trust Act, the Holders of the
     Preferred Securities shall be entitled to the same limitation of personal
     liability extended to stockholders of private corporations for profit
     organized under the General Corporation Law of the State of Delaware.

Section 10.02  Exculpation.

(a)  No Indemnified Person shall be liable, responsible or accountable in
     damages or otherwise to the Trust or any Covered Person for any loss,
     damage or claim incurred by reason of any act or omission performed or
     omitted by such Indemnified Person in good faith on behalf of

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<PAGE>

     the Trust and in a manner such Indemnified Person reasonably believed to be
     within the scope of the authority conferred on such Indemnified Person by
     this Declaration or by law, except that an Indemnified Person shall be
     liable for any such loss, damage or claim incurred by reason of such
     Indemnified Person's gross negligence (or, in the case of the Property
     Trustee, negligence) or willful misconduct with respect to such acts or
     omissions.

(b)  An Indemnified Person shall be fully protected in relying in good faith
     upon the records of the Trust and upon such information, opinions, reports
     or statements presented to the Trust by any Person as to matters the
     Indemnified Person reasonably believes are within such other Person's
     professional or expert competence and who has been selected with reasonable
     care by or on behalf of the Trust, including information, opinions, reports
     or statements as to the value and amount of the assets, liabilities,
     profits, losses, or any other facts pertinent to the existence and amount
     of assets from which Distributions to Holders of Securities might properly
     be paid.

Section 10.03   Fiduciary Duty.

(a)  To the extent that, at law or in equity, an Indemnified Person has duties
     (including fiduciary duties) and liabilities relating thereto to the Trust
     or to any other Covered Person, an Indemnified Person acting under this
     Declaration shall not be liable to the Trust or to any other Covered Person
     for its good faith reliance on the provisions of this Declaration. The
     provisions of this Declaration, to the extent that they restrict the duties
     and liabilities of an Indemnified Person otherwise existing at law or in
     equity (other than the duties imposed on the Property Trustee under the
     Trust Indenture Act), are agreed by the parties hereto to replace such
     other duties and liabilities of such Indemnified Person.

(b)  Unless otherwise expressly provided herein:

        (i)  whenever a conflict of interest exists or arises between an
             Indemnified Person and any Covered Person; or

        (ii)  whenever this Declaration or any other agreement contemplated
              herein or therein provides that an Indemnified Person shall act in
              a manner that is, or provides terms that are, fair and reasonable
              to the Trust or any Holder of Securities ,

the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.

(c)  Whenever in this Declaration an Indemnified Person is permitted or required
     to make a decision

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<PAGE>

        (i)  in its "discretion" or under a grant of similar authority, the
             Indemnified Person shall be entitled to consider such interests and
             factors as it desires, including its own interests, and shall have
             no duty or obligation to give any consideration to any interest of
             or factors affecting the Trust or any other Person; or

        (ii)  in its "good faith" or under another express standard, the
              Indemnified Person shall act under such express standard and shall
              not be subject to any other or different standard imposed by this
              Declaration or by applicable law.

Section 10.04   Indemnification.

(a)  To the fullest extent permitted by applicable law, the Debenture Issuer
     shall indemnify and hold harmless each Indemnified Person from and against
     any loss, damage, liability, tax, penalty, expense or claim of any kind or
     nature whatsoever incurred by such Indemnified Person by reason of the
     creation, operation or termination of the Trust or any act or omission
     performed or omitted by such Indemnified Person in good faith on behalf of
     the Trust and in a manner such Indemnified Person reasonably believed to be
     within the scope of authority conferred on such Indemnified Person by this
     Declaration, except that no Indemnified Person shall be entitled to be
     indemnified in respect of any loss, damage or claim incurred by such
     Indemnified Person by reason of gross negligence (or, in the case of the
     Property Trustee, negligence) or willful misconduct with respect to such
     acts or omissions.

(b)  To the fullest extent permitted by applicable law, expenses (including
     legal fees and expenses) incurred by an Indemnified Person in defending any
     claim, demand, action, suit or proceeding shall, from time to time, be
     advanced by the Debenture Issuer prior to the final disposition of such
     claim, demand, action, suit or proceeding upon receipt by the Debenture
     Issuer of an undertaking by or on behalf of the Indemnified Person to repay
     such amount if it shall be determined that the Indemnified Person is not
     entitled to be indemnified as authorized in Section 10.4(a). The
     indemnification shall survive the termination of this Declaration or the
     resignation or removal of the Property Trustee or the Delaware Trustee, as
     the case may be.

Section 10.05   Outside Businesses.

     Any Covered Person, the Sponsor, the Delaware Trustee and the Property
Trustee (subject to Section 5.03(c)) may engage in or possess an interest in
other business ventures of any nature or description, independently or with
others, similar or dissimilar to the business of the Trust, and the Trust and
the Holders of Securities shall have no rights by virtue of this Declaration in
and to such independent ventures or the income or profits derived therefrom and
the pursuit of any such venture, even if competitive with the business of the
Trust, shall not be deemed wrongful or improper. None of the Sponsor, any
Covered Person, the Delaware Trustee, or the Property Trustee shall be obligated
to present any particular investment or other opportunity to the Trust even if
such opportunity is of a character that, if presented to the Trust, could be
taken by the Trust, and any Covered Person, the Sponsor, the Delaware Trustee
and the Property Trustee shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any such
particular investment or other opportunity. Any Covered Person, the Delaware
Trustee and the Property Trustee may engage or be interested in any financial or
other transaction with the Sponsor or any

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<PAGE>

Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or
act on any committee or body of holders of, securities or other obligations of
the Sponsor or its Affiliates.

                                    ARTICLE XI

                                   Accounting

Section 11.01   Fiscal Year.

     The fiscal year ("Fiscal Year") of the Trust shall be the calendar year, or
such other year as is required by the Code.

Section 11.02   Certain Accounting Matters.

(a)  At all times during the existence of the Trust, the Administrative Trustees
     shall keep, or cause to be kept, full books of account, records and
     supporting documents, which shall reflect in reasonable detail, each
     transaction of the Trust. The books of account shall be maintained on the
     accrual method of accounting, in accordance with generally accepted
     accounting principles, consistently applied. The Trust shall use the
     accrual method of accounting for United States federal income tax purposes.
     The books of account and the records of the Trust shall be examined by and
     reported upon as of the end of each Fiscal Year by a firm of independent
     certified public accountants selected by the Administrative Trustees.

(b)  The Administrative Trustees shall cause to be prepared and delivered to
     each of the Holders of Securities, within 90 days after the end of each
     Fiscal Year of the Trust, annual financial statements of the Trust,
     including a balance sheet of the Trust as of the end of such Fiscal Year,
     and the related statements of income or loss.

(c)  The Administrative Trustees shall cause to be duly prepared and delivered
     to each of the Holders of Securities, any annual United States federal
     income tax information statement, required by the Code, containing such
     information with regard to the Securities held by each Holder as is
     required by the Code and the Treasury Regulations. Notwithstanding any
     right under the Code to deliver any such statement at a later date, the
     Administrative Trustees shall endeavor to deliver all such statements
     within 30 days after the end of each Fiscal Year of the Trust.

(d)  The Administrative Trustees shall cause to be duly prepared and filed with
     the appropriate taxing authority, an annual United States federal income
     tax return, on a Form 1041 or such other form required by United States
     federal income tax law, and any other annual income tax returns required to
     be filed by the Administrative Trustees on behalf of the Trust with any
     state or local taxing authority.

Section 11.03   Banking.

     The Trust shall maintain one or more bank accounts in the name and for the
sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Property Trustee shall be made directly to
the Property Trustee Account and no other funds of the

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<PAGE>

Trust shall be deposited in the Property Trustee Account. The sole signatories
for such accounts shall be designated by the Administrative Trustees; provided,
however, that the Property Trustee shall designate the signatories for the
Property Trustee Account.

Section 11.04   Withholding.

     The Administrative Trustees on behalf of the Trust shall comply with all
withholding requirements under United States federal, state and local law. The
Administrative Trustees on behalf of the Trust shall request, and the Holders
shall provide to the Trust, such forms or certificates as are necessary to
establish an exemption from withholding with respect to each Holder, and any
representations and forms as shall reasonably be requested by the Administrative
Trustees on behalf of the Trust to assist it in determining the extent of, and
in fulfilling, its withholding obligations. The Administrative Trustees shall
file required forms with applicable jurisdictions and, unless an exemption from
withholding is properly established by a Holder, shall remit amounts withheld
with respect to the Holder to applicable jurisdictions. To the extent that the
Trust is required to withhold and pay over any amounts to any authority with
respect to distributions or allocations to any Holder, the amount withheld shall
be deemed to be a distribution in the amount of the withholding to the Holder.
In the event of any claimed overwithholding, Holders shall be limited to an
action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Trust (at the
written direction of one of the Administrative Trustees of the Trust) may reduce
subsequent Distributions by the amount of such withholding.

                                   ARTICLE XII

                            Amendments and Meetings

Section 12.01   Amendments.

(a)  This Declaration may be amended from time to time by the Sponsor, the
     Property Trustee and the Administrative Trustees, without the consent of
     the Holders of the Securities, (i) to cure any ambiguity, correct or
     supplement any provision in the Declaration that may be inconsistent with
     any other provision, or to make any other provisions with respect to
     ministerial matters or questions arising under the Declaration, which shall
     not be inconsistent with the other provisions of the Declaration, or (ii)
     to modify, eliminate or add to any provisions of the Declaration to such
     extent as shall be necessary to ensure that the Trust will not be taxable
     as a corporation or will be classified for United States federal income tax
     purposes as a grantor trust at all times that any Securities are
     outstanding or to ensure that the Trust will not be required to register as
     an "investment company" under the Investment Company Act; provided,
     however, that in the case of clause (i), such action shall not adversely
     affect in any material respect the interests of any Holder of Securities,
     and any such amendments of the Declaration shall become effective when
     notice thereof is given to the Holders of the Securities.

(b)  Except as provided in (c) below, this Declaration may be amended by the
     Trustees and the Sponsor with (i) the consent of Holders representing not
     less than a Majority in liquidation amount of the outstanding Preferred
     Securities, and (ii) receipt by the Trustees of an opinion of counsel to
     the effect that such amendment or the exercise of any power granted to the

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<PAGE>

     Trustees in accordance with such amendment will not affect the Trust's
     status as a grantor trust for United States federal income tax purposes or
     the Trust's exemption from status as an "investment company" under the
     Investment Company Act.

(c)  Without the consent of each holder of Securities, the Declaration may not
     be amended to (i) change the amount or timing of any Distribution on the
     Securities or otherwise adversely affect the amount of any Distribution
     required to be made in respect of the Securities of a specified date or
     (ii) restrict the right of a Holder of Securities to institute suit for the
     enforcement of any such payment on or after such date.

Section 12.02  Meetings of the Holders of Securities; Action by Written Consent.

(a)  Meetings of the Holders of any class of Securities may be called at any
     time by the Administrative Trustees (or as provided in the terms of the
     Securities) to consider and act on any matter on which Holders of such
     class of Securities are entitled to act under the terms of this
     Declaration, the terms of the Securities or the rules of any stock exchange
     on which the Preferred Securities are listed or admitted for trading. The
     Administrative Trustees shall call a meeting of the Holders of such class
     if directed to do so by the Holders of at least 25% in liquidation amount
     of such class of Securities. Such direction shall be given by delivering to
     the Administrative Trustees one or more requests in a writing stating that
     the signing Holders of Securities wish to call a meeting and indicating the
     general or specific purpose for which the meeting is to be called. Any
     Holders of Securities calling a meeting shall specify in writing the
     Certificates held by the Holders of Securities exercising the right to call
     a meeting and only those Securities represented by the Certificates so
     specified shall be counted for purposes of determining whether the required
     percentage set forth in the second sentence of this paragraph has been met.

(b)  Except to the extent otherwise provided in the terms of the Securities, the
     following provisions shall apply to meetings of Holders of Securities:

        (i)  notice of any such meeting shall be given to all the Holders of
             Securities having a right to vote thereat at least 7 days and not
             more than 60 days before the date of such meeting. Whenever a vote,
             consent or approval of the Holders of Securities is permitted or
             required under this Declaration or the rules of any stock exchange
             on which the Preferred Securities are listed or admitted for
             trading, such vote, consent or approval may be given at a meeting
             of the Holders of Securities. Any action that may be taken at a
             meeting of the Holders of Securities may be taken without a meeting
             and without prior notice if a consent in writing setting forth the
             action so taken is signed by the Holders of Securities owning not
             less than the minimum aggregate liquidation amount of Securities
             that would be necessary to authorize or take such action at a
             meeting at which all Holders of Securities having a right to vote
             thereon were present and voting. Prompt notice of the taking of
             action without a meeting shall be given to the Holders of
             Securities entitled to vote who have not consented in writing. The
             Administrative Trustees may specify that any written ballot
             submitted to the Holders for the purpose of taking any action
             without a meeting shall be returned to the Trust within the time
             specified by the Administrative Trustees;

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<PAGE>

        (ii)  each Holder of a Security may authorize any Person to act for it
              by proxy on all matters in which a Holder of Securities is
              entitled to participate, including waiving notice of any meeting,
              or voting or participating at a meeting. No proxy shall be valid
              after the expiration of 11 months from the date thereof unless
              otherwise provided in the proxy. Every proxy shall be revocable at
              the pleasure of the Holder of Securities executing it. Except as
              otherwise provided herein, all matters relating to the giving,
              voting or validity of proxies shall be governed by the General
              Corporation Law of the State of Delaware relating to proxies, and
              judicial interpretations thereunder, as if the Trust were a
              Delaware corporation and the Holders of the Securities were
              stockholders of a Delaware corporation;

        (iii) each meeting of the Holders of the Securities shall be conducted
              by the Administrative Trustees or by such other Person that the
              Administrative Trustees may designate; and

        (iv)  unless the Business Trust Act, this Declaration, the terms of the
              Securities, the Trust Indenture Act or the listing rules of any
              stock exchange on which the Preferred Securities are then listed
              or trading, provide otherwise, the Administrative Trustees, in
              their sole discretion, shall establish all other provisions
              relating to meetings of Holders of Securities, including notice of
              the time, place or purpose of any meeting at which any matter is
              to be voted on by any Holders of Securities, waiver of any such
              notice, action by consent without a meeting, the establishment of
              a record date, quorum requirements, voting in person or by proxy
              or any other matter with respect to the exercise of any such right
              to vote.

                                   ARTICLE XII

            Representations of Property Trustee and Delaware Trustee

Section 13.01   Representations and Warranties of Property Trustee.

     The Trustee that acts as initial Property Trustee represents and warrants
to the Trust and to the Sponsor at the date of this Declaration, at the Closing
Date and at each Optional Closing Date, if any, and each Successor Property
Trustee represents and warrants to the Trust and the Sponsor at the time of the
Successor Property Trustee's acceptance of its appointment as Property Trustee
that:

(a)  The Property Trustee is a banking corporation with trust powers, duly
     organized, validly existing and in good standing under the laws of the
     jurisdiction of its organization, with corporate power and authority to
     execute and deliver, and to carry out and perform its obligations under the
     terms of, the Declaration.

(b)  The execution, delivery and performance by the Property Trustee of the
     Declaration has been duly authorized by all necessary corporate action on
     the part of the Property Trustee. The Declaration has been duly executed
     and delivered by the Property Trustee, and constitutes a legal, valid and
     binding obligation of the Property Trustee, enforceable against it in
     accordance with its terms, subject to applicable bankruptcy,
     reorganization, moratorium, insolvency, and other similar laws affecting
     creditors' rights generally and to general principles of equity and the

                                       52
<PAGE>

     discretion of the court (regardless of whether the enforcement of such
     remedies is considered in a proceeding in equity or at law).

(c)  The execution, delivery and performance of the Declaration by the Property
     Trustee does not conflict with or constitute a breach of the certificate of
     incorporation or by-laws of the Property Trustee.

(d)  No consent, approval or authorization of, or registration with or notice
     to, any Delaware or Federal banking authority is required for the
     execution, delivery or performance by the Property Trustee, of the
     Declaration.

(e)  The Property Trustee, pursuant to this Declaration, shall hold legal title
     to, and an ownership interest on behalf of the Holders of the Securities,
     in the Debentures and agrees that, except as expressly provided or
     contemplated by this Declaration, it will not create, incur or assume, or
     suffer to exist any mortgage, pledge, hypothecation, encumbrance, lien or
     other charge or security interest upon the Debentures.

Section 13.02   Representations and Warranties of Delaware Trustee.

     The Trustee that acts as initial Delaware Trustee represents and warrants
to the Trust and to the Sponsor at the date of this Declaration, at the Closing
Date and at each Optional Closing Date, if any, and each Successor Delaware
Trustee represents and warrants to the Trust and the Sponsor at the time of the
Successor Property Trustee's acceptance of its appointment as Delaware Trustee
that:

(a)  The Delaware Trustee is a banking corporation with trust powers, duly
     organized, validly existing and in good standing under the laws of the
     jurisdiction of its organization, with corporate power and authority to
     execute and deliver, and to carry out and perform its obligations under the
     terms of, the Declaration.

(b)  The execution, delivery and performance by the Delaware Trustee of the
     Declaration has been duly authorized by all necessary corporate action on
     the part of the Delaware Trustee. The Declaration has been duly executed
     and delivered by the Delaware Trustee, and constitutes a legal, valid and
     binding obligation of the Delaware Trustee, enforceable against it in
     accordance with its terms, subject to applicable bankruptcy,
     reorganization, moratorium, insolvency, and other similar laws affecting
     creditors' rights generally and to general principles of equity and the
     discretion of the court (regardless of whether the enforcement of such
     remedies is considered in a proceeding in equity or at law).

(c)  The execution, delivery and performance of the Declaration by the Delaware
     Trustee does not conflict with or constitute a breach of the certificate of
     incorporation or by-laws of the Delaware Trustee.

(d)  No consent, approval or authorization of, or registration with or notice
     to, any Delaware or Federal banking authority is required for the
     execution, delivery or performance by the Delaware Trustee, of the
     Declaration.

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<PAGE>

(e)  The Delaware Trustee is an entity which has its principal place of business
     in the State of Delaware.

                                   ARTICLE XIV

                              Registration Rights

Section 14.01   Registration Rights.

     The Holders of the Preferred Securities, the Debentures, the Preferred
Securities Guarantee and the shares of Common Stock of the Sponsor issuable upon
conversion of the Securities are entitled to the benefits of a Registration
Rights Agreement as set forth in the Purchase Agreement and the Indenture.

                                    ARTICLE XV

                                 Miscellaneous

Section 15.01   Notices.

     All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by registered or certified mail, as follows:

(a)  if given to the Trust, in care of the Administrative Trustees at the
     Trust's mailing address set  forth below (or such other address as the
     Trust may give notice of to the Holders of the Securities):

        c/o Hanover Compressor Company
        12001 North Houston Rosslyn
        Houston, Texas 77086
        Attention:  Chief Financial Officer

(b)  if given to the Property Trustee, at the mailing address set forth below
     (or such other address as the Property Trustee may give notice of to the
     Holders of the Securities):

        Wilmington Trust Company
        Rodney Square North
        1100 North Market Street
        Wilmington, Delaware

                                       54
<PAGE>

        19890-0001
        Attention: Corporate Trust Administration

(c)  (c) if given to the Delaware Trustee, at the mailing address set forth
     below (or such other address as the Delaware Trustee may give notice of to
     the Holders of the Securities):

        Wilmington Trust Company
        Rodney Square North
        1100 North Market Street
        Wilmington, Delaware
        19890-0001
        Attention: Corporate Trust Administration

(d)  if given to the Holder of the Common Securities, at the mailing address of
     the Sponsor set forth below (or such other address as the Holder of the
     Common Securities may give notice to the Trust):

        c/o Hanover Compressor Company
        12001 North Houston Rosslyn
        Houston, Texas 77086
        Attention:  Chief Financial Officer

(e)  if given to any other Holder, at the address set forth on the books and
     records of the Trust or the Registrar, as applicable.

     All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.

Section 15.02   Governing Law.

     THIS DECLARATION AND THE RIGHTS OF THE PARTIES HEREUNDER SHALL BE GOVERNED
BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE AND ALL
RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICT OF LAWS OF THE STATE OF DELAWARE OR ANY OTHER
JURISDICTION THAT WOULD CALL FOR THE APPLICATION OF THE LAW OF ANY JURISDICTION
OTHER THAN THE STATE OF DELAWARE; PROVIDED, HOWEVER, THAT THERE SHALL NOT BE
APPLICABLE TO THE PARTIES HEREUNDER OR THIS DECLARATION ANY PROVISION OF THE
LAWS (STATUTORY OR COMMON) OF THE STATE OF DELAWARE PERTAINING TO TRUSTS THAT
RELATE TO OR REGULATE, IN A MANNER INCONSISTENT WITH THE TERMS HEREOF (A) THE
FILING WITH ANY COURT OR GOVERNMENTAL BODY OR AGENCY OF TRUSTEE ACCOUNTS OR
SCHEDULES OF TRUSTEE FEES AND CHARGES, (B) AFFIRMATIVE REQUIREMENTS TO POST
BONDS FOR TRUSTEES, OFFICERS, AGENTS

                                       55
<PAGE>

OR EMPLOYEES OF A TRUST, (C) THE NECESSITY FOR OBTAINING COURT OR OTHER
GOVERNMENTAL APPROVAL CONCERNING THE ACQUISITION, HOLDING OR DISPOSITION OF REAL
OR PERSONAL PROPERTY, (D) FEES OR OTHER SUMS PAYABLE TO TRUSTEES, OFFICERS,
AGENTS OR EMPLOYEES OF A TRUST, (E) THE ALLOCATION OF RECEIPTS AND EXPENDITURES
TO INCOME OR PRINCIPAL, (F) RESTRICTIONS OR LIMITATIONS ON THE PERMISSIBLE
NATURE, AMOUNT OR CONCENTRATION OF TRUST INVESTMENTS OR REQUIREMENTS RELATING TO
THE TITLING, STORAGE OR OTHER MANNER OF HOLDING OR INVESTING TRUST ASSETS OR (G)
THE ESTABLISHMENT OF FIDUCIARY OR OTHER STANDARDS OF RESPONSIBILITY OR
LIMITATIONS ON THE ACTS OR POWERS OF TRUSTEES THAT ARE INCONSISTENT WITH THE
LIMITATIONS OR LIABILITIES OR AUTHORITIES AND POWERS OF THE TRUSTEES HEREUNDER
AS SET FORTH OR REFERENCED IN THIS DECLARATION. SECTION 3540 OF TITLE 12 OF THE
DELAWARE CODE SHALL NOT APPLY TO THE TRUST.

Section 15.03   Intention of the Parties.

     It is the intention of the parties hereto that the Trust be classified for
United States federal income tax purposes as a grantor trust. The provisions of
this Declaration shall be interpreted to further this intention of the parties.

Section 15.04   Headings.

     Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.

Section 15.05   Successors and Assigns.

     Whenever in this Declaration any of the parties hereto is named or referred
to, the successors and assigns of such party shall be deemed to be included, and
all covenants and agreements in this Declaration by the Sponsor and the Trustees
shall bind and inure to the benefit of their respective successors and assigns,
whether so expressed.

Section 15.06   Partial Enforceability.

     If any provision of this Declaration, or the application of such provision
to any Person or circumstance, shall be held invalid, the remainder of this
Declaration, or the application of such provision to persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.

Section 15.07   Counterparts.

     This Declaration may contain more than one counterpart of the signature
page and this Declaration may be executed by the affixing of the signature of
each of the Trustees to one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and

                                       56
<PAGE>

they shall have the same force and effect as though all of the signers had
signed a single signature page.

     IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.

                                ------------------------------------
                                as Administrative Trustee

                                ------------------------------------
                                as Administrative Trustee

                                ------------------------------------
                                as Administrative Trustee

                                WILMINGTON TRUST COMPANY, as Delaware Trustee

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

                                WILMINGTON TRUST COMPANY, as Property Trustee

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

                                HANOVER COMPRESSOR COMPANY, as Sponsor and
                                  Debenture Issuer

                                By:
                                   --------------------------
                                   Name: Curtis A. Bedrich
                                   Title: Chief Financial Officer and Treasurer

                                       57
<PAGE>

                                                                         ANNEX I

                TERMS OF 7 1/4% CONVERTIBLE PREFERRED SECURITIES
                TERM INCOME DEFERABLE EQUITY SECURITIES (TIDES)(SM)
                      7 1/4% CONVERTIBLE COMMON SECURITIES

     Pursuant to Section 7.01 of the Amended and Restated Declaration of Trust,
dated as of December 15, 1999 (as amended from time to time, the "Declaration"),
the designation, rights, privileges, restrictions, preferences and other terms
and provisions of the Preferred Securities and the Common Securities are set out
below (each capitalized term used but not defined herein has the meaning set
forth in the Declaration or the Indenture (as defined in the Declaration) or, if
not defined in the Declaration or Indenture, as defined in the Offering Circular
(as defined in the Declaration):

1.   Designation and Number.

     (a) "Preferred Securities."  1,725,000 Preferred Securities of the Trust
with an aggregate liquidation preference with respect to the assets of the Trust
of Eighty-Six Million Two Hundred Fifty Thousand Dollars ($86,250,000), and a
liquidation amount with respect to the assets of the Trust of $50  per Preferred
Security, are hereby designated for the purposes of identification only as
"7 1/4% Convertible Preferred Securities, Term Income Deferrable Equity
Securities (TIDES)(SM)" (the "Preferred Securities"). The Preferred Security
Certificates evidencing the Preferred Securities shall be substantially in the
form attached hereto as Exhibit A-1, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice or
to conform to the rules of any stock exchange or other organization on which the
Preferred Securities are listed.

     (b) "Common Securities." 53,351 Common Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of Two
Million Six Hundred Sixty-Seven Thousand Five Hundred Fifty Dollars ($2,667,550)
and a liquidation amount with respect to the assets of the Trust of $50 per
Common Security, are hereby designated for the purposes of identification only
as "7 1/4% Convertible Common Securities" (the "Common Securities"). The Common
Security Certificates evidencing the Common Securities shall be substantially in
the form attached hereto as Exhibit A-2, with such changes and additions thereto
or deletions therefrom as may be required by ordinary usage, custom or practice.

2.   Distributions.

     (a) Distributions payable on each Security will be fixed at a rate per
annum of 7 1/4% (the "Coupon Rate") of the stated liquidation amount of $50 per
Security, such rate being the rate of interest payable on the Debentures to be
held by the Property Trustee. Distributions in arrears for more than one quarter
will bear interest thereon compounded quarterly at the Coupon Rate (to the
extent permitted by applicable law), subject to adjustment in the event of a
Registration Default, as described in the Declaration. The term "Distributions"
as used herein includes such quarterly distributions, additional distributions
on quarterly distributions not paid on the applicable Distribution Date, Special
Distributions and Additional Sums, as applicable. A Distribution is payable only
to the extent that payments are made in respect of the Debentures held by the
Property Trustee and to the extent the Property Trustee has funds available
therefor. The amount of

                                       1
<PAGE>

Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 30-day month.

     (b) Distributions on the Securities will be cumulative, will accrue from
the date of their original issuance and will be payable quarterly in arrears, on
the following dates, which dates correspond to the interest payment dates on the
Debentures: March 15, June 15, September 15 and December 15 of each year,
commencing on March 15, 2000, except as otherwise described below. The Sponsor
has the right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debentures for a period not
exceeding 20 consecutive quarters (each a "Deferral Period") and, as a
consequence of such deferral, Distributions will also be deferred. Despite such
deferral, quarterly Distributions will continue to accrue with interest thereon
(to the extent permitted by applicable law) at the Coupon Rate compounded
quarterly during any such Deferral Period. Prior to three Business Days before a
Regular Record Date fixed for a Payment Resumption Date (as defined in the
Indenture), the Sponsor may further extend such Deferral Period; provided that
such Deferral Period together with all such previous and further extensions
thereof may not exceed 20 consecutive quarters or extend beyond the maturity
(whether at the stated maturity or by declaration of acceleration, call for
redemption or otherwise) of the Debentures under the Indenture. Payments of
accrued Distributions will be payable to Holders as they appear on the books and
records of the Trust on the Regular Record Date for the relevant Payment
Resumption Date. Upon the termination of any Deferral Period and the payment of
all amounts then due, the Sponsor may commence a new Deferral Period, subject to
the above requirements.

     (c) Distributions on the Securities will be payable to the Holders thereof
as they appear on the books and records of the Trust at the close of business on
the relevant record dates. The relevant record dates shall be on the 1st day of
the month of the relevant payment dates, except as otherwise described in this
Annex I to the Declaration. Subject to any applicable laws and regulations and
the provisions of the Declaration, each such payment in respect of Preferred
Securities being held in book-entry form through The Depository Trust Company
(the "Depositary") will be made as described under the heading "Description of
TIDES -- Form, Book-Entry Procedures and Transfer" in the Offering Circular. The
relevant record dates for the Common Securities shall be the same record dates
as for the Preferred Securities. Distributions payable on any Securities that
are not punctually paid on any Distribution payment date, as a result of the
Sponsor having failed to make a payment under the Debentures, will cease to be
payable to the Person in whose name such Securities are registered on the
relevant record date, and such defaulted Distribution will instead be payable to
the Person in whose name such Securities are registered on the special record
date or other specified date determined in accordance with the Indenture. If any
date on which Distributions are payable on the Securities is not a Business Day,
then payment of the Distribution payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay) except that, with respect to any Redemption Date,
if such Business Day is in the next succeeding calendar year, such Redemption
Date shall be the immediately preceding Business Day, in each case with the same
force and effect as if made on such date.

                                       2
<PAGE>

     (d) In the event of an election by the Holder to convert its Securities
through the Conversion Agent into Common Stock pursuant to the terms of the
Securities as forth in this Annex I to the Declaration, no payment, allowance or
adjustment shall be made with respect to accumulated and unpaid Distributions on
such Securities, or be required to be made; provided that Holders of Securities
at the close of business on any record date for the payment of Distributions
will be entitled to receive the Distributions payable on such Securities on the
corresponding payment date notwithstanding the conversion of such Securities
into Common Stock following such record date.

     (e) In the event that there is any money or other property held by or for
the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.

3.   Liquidation Distribution Upon Dissolution.

     In the event of any voluntary or involuntary dissolution of the Trust, the
Trust shall be liquidated by the Trustees as expeditiously as the Trustees
determine to be possible by distributing, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law (including, without
limitation, by paying or making reasonable provision to pay all claims and
obligations of the Trust in accordance with Section 3808(e) of the Business
Trust Act), to the Holders of the Securities a Like Amount of Debentures, unless
such distribution would not be practical as determined by the Administrative
Trustees, in which event such Holders will be entitled to receive out of the
assets of the Trust available for distribution to holders, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law (including,
without limitation, by paying or making reasonable provision to pay all claims
and obligations of the Trust in accordance with Section 3808(e) of the Business
Trust Act), an amount equal to, in the case of Holders of Preferred Securities,
the aggregate liquidation amount thereof plus accrued and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"). If such Liquidation Distribution can be paid only in part
because the Trust has insufficient assets available to pay in full the aggregate
Liquidation Distribution, then the amounts payable directly by the Trust on the
Preferred Securities shall be paid on a Pro Rata (as defined below) basis in
accordance with paragraph 9. The Holder of the Common Securities will be
entitled to receive distributions upon any such liquidation Pro Rata with the
Holders of the Preferred Securities, except as provided in paragraph 10.

4.   Redemption and Distribution.

     (a) Upon the repayment or payment of the Debentures in whole or in part,
whether at maturity or upon redemption or otherwise (other than following any
distribution of the Debentures to the Holders), the proceeds from such repayment
or redemption shall be simultaneously applied to redeem, on a Pro Rata basis, a
Like Amount of Securities, on the redemption date, in an amount per Security
equal to the applicable redemption price, which redemption price will be equal
to (i) the liquidation amount of each of the Securities plus any accrued and
unpaid Distributions thereon (A) in the case of the repayment of the Debentures
at stated maturity, or (B) in the case of a redemption of the Debentures in
certain limited circumstances set forth in the Indenture upon the occurrence of
a Tax Event or (ii) in the case of an Optional Redemption on or after December
20, 2002, the Optional Redemption Price (as defined in the Indenture), payable
in cash (as applicable, the "Redemption Price"). Holders will be given not less
than 20 nor more than 60 days' notice of such

                                       3
<PAGE>

redemption. Upon the repayment of the Debentures at maturity or upon any
acceleration, earlier redemption or otherwise, the proceeds from such repayment
will be applied to redeem the Securities, in whole, upon not less than 30 nor
more than 60 days' notice.

     (b) If fewer than all the outstanding Securities are to be so redeemed, the
Common Securities and the Preferred Securities will be redeemed Pro Rata and the
Preferred Securities to be redeemed will be as described in Paragraph 4(f)(ii)
below.

     (c) The Sponsor, as the Holder of the outstanding Common Securities, shall
have the right at any time (including, without limitation, upon the occurrence
of a Tax Event or Investment Company Act Event) to dissolve the Trust and, after
satisfaction of the creditors of the Trust, cause a Like Amount of the
Debentures to be distributed to the Holders of the Securities upon liquidation
of the Trust, provided that the Administrative Trustees shall have received a No
Recognition Opinion (as defined below) prior to the dissolution of the Trust.

     (d) If, at any time, a Tax Event shall occur and be continuing the Sponsor
shall cause the Administrative Trustees to dissolve the Trust and, after
satisfaction of creditors of the Trust (including, without limitation, by paying
or making reasonable provision to pay all claims and obligations of the Trust in
accordance with Section 3808(e) of the Business Trust Act), cause Debentures to
be distributed to the Holders of the Securities in liquidation of the Trust
within 90 days following the occurrence of such Tax Event (the "90 Day Period");
provided, however, that such dissolution and distribution shall be conditioned
on (i) the Trustees' receipt of an opinion of a nationally recognized
independent tax counsel (reasonably acceptable to the Trustees) experienced in
such matters (a "No Recognition Opinion"), which opinion may rely on published
revenue rulings of the Internal Revenue Service, to the effect that the Holders
of the Securities will not recognize any income, gain or loss for United States
federal income tax purposes as a result of such liquidation and distribution of
Debentures, and (ii) the Sponsor being unable to avoid such Tax Event within the
90 day period by taking some ministerial action or pursuing some other
reasonable measure that, in the sole judgment of the Sponsor, will have no
adverse effect on the Trust, the Sponsor or the Holders of the Securities and
will involve no material cost ("Ministerial Action").

     If (i) the Sponsor has received an opinion (a "Redemption Tax Opinion") of
a nationally recognized independent tax counsel (reasonably acceptable to the
Trustees) experienced in such matters that, as a result of a Tax Event, there is
more than an insubstantial risk that the Sponsor would be precluded from
deducting the interest on the Debentures for United States federal income tax
purposes, even after the Debentures were distributed to the Holders of
Securities upon liquidation of the Trust as described in this paragraph 4(d), or
(ii) the Trustees shall have been informed by such tax counsel that it cannot
deliver a No Recognition Opinion, the Sponsor shall have the right, upon not
less than 20 nor more than 60 days' notice, and within 90 days following the
occurrence of such Tax Event, to redeem the Debentures in whole (but not in
part) for cash, for the principal amount plus accrued and unpaid interest
thereon and, following such redemption, all the Securities will be redeemed by
the Trust at the liquidation amount of $50 per Security plus accrued and unpaid
Distributions thereon; provided, however, that, if at the time there is
available to the Sponsor or the Trust the opportunity to eliminate, within the
90 Day Period, the Tax Event by taking some Ministerial Action, the Trust or the
Sponsor will pursue such Ministerial Action in lieu of redemption.

                                       4
<PAGE>

     In lieu of the foregoing options, the Company shall also have the option of
causing the Securities to remain outstanding and pay Additional Sums on the
Debentures.

    "Tax Event" means that the Property Trustee shall have received an opinion
of a nationally recognized independent tax counsel to the Sponsor (reasonably
acceptable to the Trustees) experienced in such matters (a "Dissolution Tax
Opinion") to the effect that, as a result of (i) any amendment to, or change
(including any announced prospective change (which shall not include a proposed
change), provided that a Tax Event shall not occur more than 90 days before the
effective date of any such prospective change) in the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority therefor or therein, (ii) any judicial decision or official
administrative pronouncement, ruling, regulatory procedure, notice or
announcement, including any notice or announcement of intent to adopt such
procedures or regulations (an "Administrative Action") or (iii) any amendment to
or change in the administrative position or interpretation of any Administrative
Action or judicial decision that differs from the theretofore generally accepted
position, in each case, by any legislative body, court, governmental agency or
regulatory body, irrespective of the manner in which such amendment or change is
made known, which amendment or change is effective or such Administrative Action
or decision is announced, in each case, on or after the date of original
issuance of the Debentures or the issue date of the Preferred Securities issued
by the Trust, there is more than an insubstantial risk that (a) if the
Debentures are held by the Property Trustee, (I) the Trust is, or will be within
90 days of the date of such opinion, subject to United States federal income tax
with respect to interest accrued or received on the Debentures or subject to
more than a de minimis amount of other taxes, duties or other governmental
charges as determined by such counsel, or (II) any portion of interest payable
by the Sponsor to the Trust on the Debentures is not, or within 90 days of the
date of such opinion will not be, deductible by the Sponsor in whole or in part
for United States federal income tax purposes or (b) with respect to Debentures
which are no longer held by the Property Trustee, any portion of interest
payable by the Sponsor on the Debentures is not, or within 90 days of the date
of such opinion will not be, deductible by the Sponsor in whole or in part for
United States federal income tax purposes.

     If an Investment Company Event (as hereinafter defined) shall occur and be
continuing, the Sponsor shall cause the Trustees to dissolve the Trust and,
after satisfaction of liabilities of the creditors of the Trust as provided by
applicable law (including, without limitation, by paying or making reasonable
provision to pay all claims and obligations of the Trust in accordance with
Section 3808(e) of the Business Trust Act), cause the Debentures to be
distributed to the Holders of the Securities in liquidation of the Trust within
90 days following the occurrence of such Investment Company Event.

    "Investment Company Event" means the occurrence of a change in law or
regulation or a written change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law"), to the effect that the Trust is or will
be considered an Investment Company which is required to be registered under the
Investment Company Act, which Change in 1940 Act Law becomes effective on or
after the date of the Offering Circular.

     After the date fixed for any distribution of Debentures: (i) the Securities
will no longer be deemed to be outstanding, (ii) the Depositary or its nominee
(or any successor Depositary or its

                                       5
<PAGE>

nominee), as record Holder of Preferred Securities represented by global
certificates, will receive a registered global certificate or certificates
representing the Debentures to be delivered upon such distribution and (iii) any
certificates representing Securities, except for certificates representing
Preferred Securities held by the Depositary or its nominee (or any successor
Depositary or its nominee), will be deemed to represent Debentures having an
aggregate principal amount equal to the aggregate stated liquidation amount of
such Securities, with accrued and unpaid interest equal to accrued and unpaid
Distributions on such Securities until such certificates are presented to the
Sponsor or its agent for transfer or reissuance.

     (e) The Securities will not be redeemed unless all accrued and unpaid
Distributions have been paid on all Securities for all quarterly Distribution
periods terminating on or before the date of redemption.

     (f) Redemption or Distribution Procedures.

         (i) Notice of any redemption of, or notice of distribution of
     Debentures in exchange for the Securities (a "Redemption/Distribution
     Notice") will be given any an Administrative Trustee on behalf of the Trust
     by mail to each Holder of Securities to be redeemed or exchanged not fewer
     than 20 nor more than 60 days before the date fixed for redemption or
     exchange thereof which, in the case of a redemption, will be the date fixed
     for redemption of the Debentures. For purposes of the calculation of the
     date of redemption or exchange and the dates on which notices are given
     pursuant to this paragraph 4(f)(i), a Redemption/Distribution Notice shall
     be deemed to be given on the day such notice is first mailed by first-class
     mail, postage prepaid, to Holders of Securities. Each
     Redemption/Distribution Notice shall be addressed to the Holders of
     Securities at the address of each such Holder appearing in the books and
     records of the Trust. No defect in the Redemption/Distribution Notice or in
     the mailing of either thereof with respect to any Holder shall affect the
     validity of the redemption or exchange proceedings with respect to any
     other Holder.

         (ii) In the event that fewer than all the outstanding Securities are to
     be redeemed, the Securities to be redeemed shall be redeemed Pro Rata from
     each Holder of Preferred Securities, it being understood that, in respect
     of Preferred Securities registered in the name of and held of record by the
     Depositary (or any successor Depositary) or any nominee, the distribution
     of the proceeds of such redemption will be made to each Participant (or
     Person on whose behalf such nominee holds such securities) in accordance
     with the procedures applied by such agency or nominee.

         (iii) If Securities are to be redeemed and an Administrative Trustee on
     behalf of the Trust gives a Redemption/Distribution Notice, which notice
     may only be issued if the Debentures are redeemed as set out in this
     paragraph 4 (which notice will be irrevocable), then (A) with respect to
     Preferred Securities held in book-entry form, by 12:00 noon, New York City
     time, on the redemption date, to the extent funds are available, with
     respect to Preferred Securities held in global form, the Property Trustee
     will deposit irrevocably with the Depositary (or successor Depositary)
     funds sufficient to pay the amount payable on redemption with respect to
     such Preferred Securities and will give the Depositary

                                       6
<PAGE>

     irrevocable instructions and authority to pay the amount payable on
     redemption to the Holders of such Preferred Securities, and (B) with
     respect to Preferred Securities issued in certificated form and Common
     Securities, to the extent funds are available, the Property Trustee will
     irrevocably deposit with the Paying Agent funds sufficient to pay the
     amount payable on redemption to the Holders of such Securities and will
     give the Paying Agent irrevocable instructions and authority to pay the
     amount payable on redemption to the Holders thereof upon surrender of their
     certificates. If a Redemption/Distribution Notice shall have been given and
     funds deposited as required, then on the date of such deposit, all rights
     of Holders of such Securities so called for redemption will cease, except
     the right of the Holders of such Securities to receive the redemption
     price, but without interest on such redemption price, and such Securities
     will cease to be outstanding. Neither the Administrative Trustees nor the
     Property Trustee shall be required to register or cause to be registered
     the transfer of any Securities that have been so called for redemption. If
     any date fixed for redemption of Securities is not a Business Day, then
     payment of the amount payable on such date will be made on the next
     succeeding day that is a Business Day (without any interest or other
     payment in respect of any such delay) except that, if such Business Day
     falls in the next calendar year, such payment will be made on the
     immediately preceding Business Day, in each case with the same force and
     effect as if made on such date fixed for redemption. If payment of the
     redemption price in respect of any Securities is improperly withheld or
     refused and not paid either by the Trust or by the Sponsor as guarantor
     pursuant to the relevant Securities Guarantee, Distributions on such
     Securities will continue to accrue at the then applicable rate, from the
     original redemption date to the date of payment, in which case the actual
     payment date will be considered the date fixed for redemption for purposes
     of calculating the amount payable upon redemption (other than for purposes
     of calculating any premium).

         (iv) Redemption/Distribution Notices shall be sent by the
     Administrative Trustees on behalf of the Trust to (A) in the case of
     Preferred Securities held in book-entry form, the Depositary and, in the
     case of Securities held in certificated form, the Holders of such
     certificates and (B) in respect of the Common Securities, the Holder
     thereof.

         (v) Subject to the foregoing and applicable law (including, without
     limitation, United States federal securities laws), the Sponsor or any of
     its subsidiaries may at any time and from time to time purchase outstanding
     Preferred Securities by tender, in the open market or by private agreement.

5.   Conversion Rights.

     The Holders of Securities shall have the right at any time prior to 5:00
p.m. New York City Time on the Business Day immediately preceding the earlier of
December 15, 2029 and the date fixed for redemption of the Securities, at their
option, to cause the Conversion Agent to convert Securities, on behalf of the
converting Holders, into shares of  Common Stock, par value $.001 per share, of
the Sponsor (the "Common Stock") in the manner described herein on and subject
to the following terms and conditions:

                                       7
<PAGE>

     (a) The Securities will be convertible at the office of the Conversion
Agent into fully paid and nonassessable shares of Common Stock pursuant to the
Holder's direction to the Conversion Agent to exchange such Securities for a
portion of the Debentures theretofore held by the Trust on the basis of one
Security per $50 principal amount of Debentures, and immediately convert such
amount of Debentures into fully paid and nonassessable shares of Common Stock at
an initial rate of 1.3986 shares of Common Stock per $50 principal amount of
Debentures (which is equivalent to a conversion price of $35.75 per share of
Common Stock, subject to certain adjustments set forth in the Indenture).

     (b) In order to convert Securities into Common Stock the Holder shall
submit to the Conversion Agent at the office referred to above an irrevocable
request to convert Securities on behalf of such Holder (the "Conversion
Request"), together, if the Securities are in certificated form, with such
certificates. The Conversion Request shall (i) set forth the number of
Securities to be converted and the name or names, if other than the Holder, in
which the shares of Common Stock should be issued and (ii) direct the Conversion
Agent (a) to exchange such Securities for a portion of the Debentures held by
the Trust (at the rate of exchange specified in the preceding paragraph) and (b)
to immediately convert such Debentures on behalf of such Holder, into Common
Stock (at the conversion rate specified in the preceding paragraph). The
Conversion Agent shall notify the Trust of the Holder's election to exchange
Securities for a portion of the Debentures held by the Trust and the Trust
shall, upon receipt of such notice, deliver to the Conversion Agent the
appropriate principal amount of Debentures for exchange in accordance with this
Section. The Conversion Agent shall thereupon notify the Sponsor of the Holder's
election to convert such Debentures into shares of Common Stock. Holders of
Securities at the close of business on a Distribution record date will be
entitled to receive the Distribution payable on such Securities on the
corresponding Distribution payment date notwithstanding the conversion of such
Securities following such record date but prior to such distribution payment
date. Except as provided above, neither the Trust nor the Sponsor will make, or
be required to make, any payment, allowance or adjustment upon any conversion on
account of any accumulated and unpaid Distributions accrued on the Securities,
whether or not in arrears, (including any Additional Amounts accrued thereon)
surrendered for conversion, or on account of any accumulated and unpaid
dividends on the shares of Common Stock issued upon such conversion, except to
the extent that such shares are held of record on the record date for any such
distributions. Securities shall be deemed to have been converted immediately
prior to the close of business on the day on which a Notice of Conversion
relating to such Securities is received by the Trust in accordance with the
foregoing provision (the "Conversion Date"). The Person or Persons entitled to
receive the Common Stock issuable upon conversion of the Debentures shall be
treated for all purposes as the record holder or holders of such Common Stock at
such time. As promptly as practicable on or after the Conversion Date, the
Sponsor shall issue and deliver at the office of the Conversion Agent a
certificate or certificates for the number of full shares of Common Stock
issuable upon such conversion, together with the cash payment, if any, in lieu
of any fraction of any share to the Person or Persons entitled to receive the
same, unless otherwise directed by the Holder in the notice of conversion and
the Conversion Agent shall distribute such certificate or certificates to such
Person or Persons.

     (c) Each Holder of a Security by his acceptance thereof appoints Wilmington
Trust Company "Conversion Agent" for the purpose of effecting the conversion of
Securities in accordance with this Section. In effecting the conversion and
transactions described in this Section,

                                       8
<PAGE>

the Conversion Agent shall be acting as agent of the Holders of Securities
directing it to effect such conversion transactions. The Conversion Agent is
hereby authorized (i) to exchange Securities from time to time for Debentures
held by the Trust in connection with the conversion of such Securities in
accordance with this Section and (ii) to convert all or a portion of the
Debentures into Common Stock and thereupon to deliver such shares of Common
Stock in accordance with the provisions of this Section and to deliver to the
Trust a new Debenture or Debentures for any resulting unconverted principal
amount.

     (d) No fractional shares of Common Stock will be issued as a result of
conversion, but in lieu thereof, such fractional interest will be paid in cash
by the Sponsor to the Trust, which in turn will make such payment to the Holder
or Holders of Securities so converted.

     (e) The Sponsor shall at all times reserve and keep available out of its
authorized and unissued Common Stock, solely for issuance upon the conversion of
the Debentures, free from any preemptive or other similar rights, such number of
shares of Common Stock as shall from time to time be issuable upon the
conversion of all the Debentures then outstanding. Notwithstanding the
foregoing, the Sponsor shall be entitled to deliver upon conversion of
Debentures, shares of Common Stock reacquired and held in the treasury of the
Sponsor (in lieu of the issuance of authorized and unissued shares of Common
Stock), so long as any such treasury shares are free and clear of all liens,
charges, security interests or encumbrances. Any shares of Common Stock issued
upon conversion of the Debentures shall be duly authorized, validly issued and
fully paid and nonassessable. The Trust shall deliver the shares of Common Stock
received upon conversion of the Debentures to the converting Holder free and
clear of all liens, charges, security interests and encumbrances, except for
United States withholding taxes. Each of the Sponsor and the Trust shall prepare
and shall use its best efforts to obtain and keep in force such governmental or
regulatory permits or other authorizations as may be required by law, and shall
comply with all applicable requirements as to registration or qualification of
the Common Stock (and all requirements to list the Common Stock issuable upon
conversion of Debentures that are at the time applicable), in order to enable
the Sponsor to lawfully issue Common Stock upon conversion of the  Debentures
and to lawfully deliver the Common Stock to each Holder upon conversion of the
Securities.

     (f) The Sponsor will pay any and all taxes that may be payable in respect
of the issue or delivery of shares of Common Stock on conversion of Debentures
and the delivery of the shares of Common Stock upon conversion of the
Securities. The Sponsor shall not, however, be required to pay any tax which may
be payable in respect of any transfer involved in the issue and delivery of
shares of Common Stock in a name other than that in which the Securities so
converted were registered, and no such issue or delivery shall be made unless
and until the person requesting such issue has paid to the Sponsor the amount of
any such tax, or has established to the satisfaction of the Sponsor that such
tax has been paid.

     (g) Nothing in the preceding Paragraph (f) shall limit the requirement of
the Trust to withhold taxes pursuant to the terms of the Securities set forth in
this Annex I to the Declaration or in the Declaration itself or otherwise
require the Property Trustee or the Trust to pay any amounts on account of such
withholdings.

6.   Voting Rights--Preferred Securities.

                                       9
<PAGE>

     (a) Except as provided under paragraphs 6(b) and 8, in the Business Trust
Act and as otherwise required by law, the Declaration and the Indenture, the
Holders of the Preferred Securities will have no voting rights.

     (b) In addition to the rights of the Holders of the Preferred Securities
with respect to the enforcement of payment of principal and interest on the
Debentures set forth herein, in the Declaration or in the Indenture, if (i) a
Debenture Event of Default occurs and is continuing or (ii) the Company defaults
under the Guarantee (each of (i) and (ii) being an "Appointment Event"), then
the Holders of the Preferred Securities, acting as a single class, will be
entitled by the vote of a Majority in liquidation amount of the Preferred
Securities to appoint a  Special Trustee in accordance with Section
5.06(a)(ii)(B) of the Declaration. Any Holder of Preferred Securities (other
than the Sponsor, or any entity directly or indirectly controlling or controlled
by or under direct or indirect common control with the Sponsor) will be entitled
to nominate any Person to be appointed as Special Trustee. Not later than 30
days after such right to appoint a Special Trustee arises, the Trustees will
convene a meeting for the purpose of appointing a Special Trustee. If the
Trustees fail to convene such meeting within such 30-day period, the Holders of
not less than 10% in aggregate liquidation amount of the Preferred Securities
will be entitled to convene such meeting in accordance with Section 12.02 of the
Declaration. The record date for such meeting will be the close of business on
the Business Day that is one Business Day before the day on which notice of the
meeting is sent to the Holders. The provisions of the Declaration relating to
the convening and conduct of the meetings of the Holders will apply with respect
to any such meeting.

     Any Special Trustee so appointed shall cease to be a Special Trustee if the
Appointment Event pursuant to which the Special Trustee was appointed and all
other Appointment Events cease to be continuing. A Special Trustee may be
removed without cause at any time by vote of the Holders of a Majority in
liquidation amount of the Preferred Securities at a meeting of the Holders of
the Preferred Securities or by written consent in accordance with Section
5.06(a)(ii)(B) of the Declaration. The Holders of 10% in liquidation amount of
the Preferred Securities will be entitled to convene such a meeting in
accordance with Section 12.02 of the Declaration. The record date for such
meeting will be the close of business on the Business Day which is one Business
Day before the day on which the notice of meeting is sent to Holders.
Notwithstanding the appointment of a Special Trustee, the Sponsor shall retain
all rights under the Indenture, including the right to defer payments of
interest by extending the interest payment period on the Debentures.

     Subject to the requirements set forth in this paragraph, the Holders of a
majority in liquidation amount of the Preferred Securities, voting separately as
a class may, and the Trustees shall not, without obtaining the prior approval of
the Holders of a Majority in aggregate liquidation amount of all outstanding
Preferred Securities (i) direct the time, method, and place of conducting any
proceeding for any remedy available to the Trustee under the Indenture, or
executing any trust or power conferred upon the Property Trustee with respect to
the Debentures, (ii) waive any past default and its consequences that is
waivable under Section 5.13 of the Indenture or otherwise, (iii) exercise any
right to rescind or annul a declaration that the principal of all the Debentures
shall be due and payable or (iv) consent to any amendment, modification or
termination of the Indenture or the Debentures, where such consent shall be
required, provided, however, that, where a consent under the Indenture would
require the consent or act of the Holders of greater than a majority of the
Holders in principal amount of Debentures affected thereby (a "Super Majority"),
the Property

                                      10
<PAGE>

Trustee may only give such consent or take such action at the
direction of the Holders of at least the proportion in liquidation preference of
the Preferred Securities which the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding. The Property Trustee
shall not, and none of the other Trustees shall in any event, revoke any action
previously authorized or approved by a vote of the Holders of the Preferred
Securities, except by a subsequent vote of the Holders of the Preferred
Securities. Other than with respect to directing the time, method and place of
conducting any remedy available to the Property Trustee or the Debenture Trustee
as set forth above, the Property Trustee shall not take any action in accordance
with the directions of the Holders of the Preferred Securities under this
paragraph unless the Property Trustee has obtained an opinion of tax counsel to
the effect that, as a result of such action, the Trust will not fail to be
classified as a grantor trust for United States federal income tax purposes.

     If a Declaration Event of Default has occurred and is continuing and such
event is attributable to the failure of the Debenture Issuer to pay interest or
principal on the Debentures on the date such interest or principal is otherwise
payable (or in the case of redemption on the redemption date), then a Holder of
Preferred Securities may directly institute a proceeding for enforcement of
payment to such Holder (a "Direct Action") of the principal of or interest on
the Debentures having a principal amount equal to the aggregate liquidation
amount of the Preferred Securities of such Holder on or after the respective due
date specified in the Debentures. Except as provided in the preceding sentence,
the Holders of Preferred Securities will not be able to exercise directly any
other remedy available to the Holders of the Debentures. In connection with any
Direct Action, the Debenture Issuer will be subrogated to the rights of such
Holder of Preferred Securities under the Declaration to the extent of any
payment made by the Debenture Issuer to such Holder of Preferred Securities in
such Direct Action.

     Any approval or direction of Holders of Preferred Securities may be given
at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
without notice pursuant to written consent. The Administrative Trustees will
cause a notice of any meeting at which Holders of Preferred Securities are
entitled to vote, to be mailed to each Holder of record of Preferred Securities.
Each such notice will include a statement setting forth the following
information (i) the date of such meeting, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
and (iii) instructions for the delivery of proxies.

     No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.

     Notwithstanding that Holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Preferred
Securities that are owned by the Sponsor or any Affiliate of the Sponsor shall
not be entitled to vote or consent and shall, for purposes of such vote or
consent, be treated as if they were not outstanding.

7.   Voting Rights--Common Securities.

                                      11
<PAGE>

     (a) Except as provided under paragraphs 7(b), (c) and 8, in the Business
Trust Act and as otherwise required by law and the Declaration, the Holders of
the Common Securities will have no voting rights.

     (b) The Holders of the Common Securities are entitled, in accordance with
Article V of the Declaration, to vote to appoint, remove or replace any Trustee,
subject to the exclusive right of the Holders of the Preferred Securities to
appoint, remove or replace a Special Trustee.

     (c) Subject to Section 2.06 of the Declaration and only after the Event of
Default with respect to the Preferred Securities has been cured, waived, or
otherwise eliminated and subject to the requirements of the second to last
sentence of this paragraph, the Holders of a Majority in liquidation amount of
the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Property Trustee, or exercising any trust or power conferred upon the Property
Trustee under the Declaration, including (i) directing the time, method, place
of conducting any proceeding for any remedy available to the Debenture Trustee,
or exercising any trust or power conferred on the Debenture Trustee with respect
to the Debentures, (ii) waive any past default and its consequences that is
waivable under Section 5.13 of the Indenture, or (iii) exercise any right to
rescind or annul a declaration that the principal of all the Debentures shall be
due and payable, provided that, where a consent or action under the Indenture
would require the consent or act of the Holders of greater than a majority in
principal amount of Debentures affected thereby (a "Super Majority"), the
Property Trustee may only give such consent or take such action at the direction
of the Holders of at least the proportion in liquidation amount of the Common
Securities which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding. Pursuant to this paragraph 7(c),
the Property Trustee shall not revoke any action previously authorized or
approved by a vote of the Holders of the Preferred Securities, except by a
subsequent vote of the Holders of the Preferred Securities. Other than with
respect to directing the time, method and place of conducting any remedy
available to the Property Trustee or the Debenture Trustee as set forth above,
the Property Trustee shall not take any action in accordance with the directions
of the Holders of the Common Securities under this paragraph unless the Property
Trustee has obtained an opinion of tax counsel to the effect that, as a result
of such action the Trust will not fail to be classified as a grantor trust for
United States federal income tax purposes. If the Property Trustee fails to
enforce its rights, as holder of the Debentures, under the Indenture, any Holder
of Common Securities may, to the fullest extent permitted by law and after a
period of 30 days has elapsed from such Holder's written request to the Property
Trustee to enforce such rights, institute a legal proceeding directly against
the Sponsor, to enforce the Property Trustee's rights, as holder of the
Debentures, under the Indenture, without first instituting any legal proceeding
against the Property Trustee or any other Person.

     Any approval or direction of Holders of Common Securities may be given at a
separate meeting of Holders of Common Securities convened for such purpose, at a
meeting of all of the Holders of Securities in the Trust or without notice
pursuant to written consent. The Administrative Trustees will cause a notice of
any meeting at which Holders of Common Securities are entitled to vote, to be
mailed to each Holder of record of Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting, (ii) a
description of any resolution proposed for adoption at such meeting on which
such Holders are entitled to vote and (iii) instructions for the delivery of
proxies.

                                      12
<PAGE>

     No vote or consent of the Holders of the Common Securities will be required
for the Trust to redeem and cancel Common Securities or to distribute the
Debentures in accordance with the Declaration and the terms of the Securities.

8.   Amendments to Declaration and Indenture.

     (a) In addition to any requirements under Section 12.01 of the Declaration,
if any proposed amendment to the Declaration provides for, or the Administrative
Trustees otherwise propose to effect, (i) any action that would adversely affect
the powers, preferences or rights of the Securities, whether by way of amendment
to the Declaration or otherwise, or (ii) the dissolution, winding-up or
termination of the Trust, other than as described in Section 8.01 of the
Declaration, then the Holders of outstanding Securities will be entitled to vote
on such amendment or proposal (but not on any other amendment or proposal) and
such amendment or proposal shall not be effective except with the approval of
the Holders of at least a Majority in liquidation amount of the Securities,
voting together as a single class, provided, however, that, the rights of
Holders of Preferred Securities under Article V of the Declaration to appoint,
remove or replace a Special Trustee shall not be amended without the consent of
each Holder of Preferred Securities; and provided further that if any amendment
or proposal referred to in clause (i) above would adversely affect only the
Preferred Securities or only the Common Securities, then only the affected class
will be entitled to vote on such amendment or proposal and such amendment or
proposal shall not be effective except with the approval of at least a Majority
in liquidation amount of such class of Securities.

     (b) In the event the consent of the Property Trustee as the holder of the
Debentures is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the Property
Trustee shall request the direction of the Holders of the Securities with
respect to such amendment, modification or termination and shall vote with
respect to such amendment, modification or termination as directed by at least
the same proportion in aggregate stated liquidation preference of the
Securities; provided, however, that the Property Trustee shall not take any
action in accordance with the directions of the Holders of the Securities under
this paragraph 8(b) unless the Property Trustee has obtained an opinion of tax
counsel to the effect that for the purposes of United States federal income tax
the Trust will not be classified as other than a grantor trust on account of
such action.

9.   Pro Rata.

     A reference in these terms of the Securities to any payment, Distribution
or treatment as being "Pro Rata" shall mean pro rata to each Holder of
Securities according to the aggregate liquidation amount of the Securities held
by the relevant Holder in relation to the aggregate liquidation amount of all
Securities outstanding unless, on any Distribution Date or redemption date an
Event of Default under the Declaration has occurred and is continuing, in which
case no payment of any Distribution on, or amount payable upon redemption of,
any Common Security, and no other payment on account of the redemption,
liquidation or other acquisition of Common Securities, shall be made unless
payment in full in cash of all accumulated and unpaid Distributions on all
outstanding Preferred Securities for all Distribution periods terminating on or
prior thereto, or in the case of payment of the amount payable upon redemption
of the Preferred Securities, the full amount of such amount in respect of all
outstanding Preferred Securities shall have been made or provided

                                      13
<PAGE>

for, and all funds available to the Property Trustee shall first be applied to
the payment in full in cash of all Distributions on, or the amount payable upon
redemption of Preferred Securities then due and payable.

10.  Ranking.

     The Preferred Securities rank pari passu and payment thereon shall be made
Pro Rata with the Common Securities except that, where an Event of Default
occurs and is continuing under the Indenture in respect of the Debentures held
by the Property Trustee, the rights of Holders of the Common Securities to
payment in respect of Distributions and payments upon liquidation, redemption
and otherwise are subordinated to the rights to payment of the Holders of the
Preferred Securities.

11.  Acceptance of Securities Guarantees and Indenture.

     Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture which
are incorporated by reference herein and which include, among other things,
provisions relating to certain rights of the Holders of the Preferred Securities
all as set forth therein.

12.  No Preemptive Rights.

     The Holders of the Securities shall have no preemptive or similar rights to
subscribe for any additional securities.

13.  Miscellaneous.

     These terms constitute a part of the Declaration.

          The Sponsor will provide a copy of the Declaration, the Preferred
Securities Guarantee or the Common Securities Guarantee (as may be appropriate),
and the Indenture to a Holder without charge on written request to the Sponsor
at its principal place of business.

                                      14
<PAGE>

                                                                     EXHIBIT A-1

                           FORM OF PREFERRED SECURITY

                           [FORM OF FACE OF SECURITY]

     [Include the following Restricted Securities Legend on all Restricted
Preferred Securities, including Rule 144A Global Preferred Securities, unless
otherwise determined by the Sponsor in accordance with applicable law--

        THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
        TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES
        ACT OF 1933 (THE "SECURITIES ACT"), AND THIS SECURITY AND ANY
        CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES ISSUED UPON EXCHANGE FOR THIS
        SECURITY AND ANY COMMON STOCK ISSUABLE UPON CONVERSION THEREOF MAY NOT
        BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
        REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER 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.

        THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE ISSUER AND THE
        COMPANY THAT (A) THIS SECURITY AND ANY CONVERTIBLE JUNIOR SUBORDINATED
        DEBENTURES ISSUABLE UPON EXCHANGE THEREFORE AND COMMON STOCK ISSUABLE
        UPON CONVERSION THEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
        TRANSFERRED, ONLY (i) INSIDE THE UNITED STATES TO A PERSON WHOM THE
        SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
        DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
        THE REQUIREMENTS OF RULE 144A, (ii) PURSUANT TO AN EXEMPTION FROM
        REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER
        (IF AVAILABLE) OR (iii) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
        UNDER THE SECURITIES ACT, IN EACH OF CASES (i) THROUGH (iii) IN
        ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
        UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (B) THE HOLDER
        WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY

                                       1
<PAGE>

        PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED
        TO IN (A) ABOVE.

        THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES,
        REPRESENTS AND WARRANTS THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT
        PLAN SUBJECT TO THE EMPLOYMENT RETIREMENT INCOME SECURITY ACT OF 1974,
        AS AMENDED ("ERISA") OR (ii) THE ACQUISITION AND HOLDING OF THIS
        SECURITY BY IT IS NOT PROHIBITED BY EITHER SECTION 406 OF ERISA OR
        SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR
        IS EXEMPT FROM ANY SUCH PROHIBITION.]

        [Include on Preferred Security, unless otherwise determined by the
        Sponsor in accordance with applicable law --

    [Include if Preferred Security is in global form and the Depository Trust
Company is the Depository--

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

     [Include if Preferred Security is in global form--

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

                                       2
<PAGE>

                             Certificate Number P-1
                  Number of Preferred Securities _____________
                              CUSIP NO. 41076M203
                            Preferred Securities of
                        Hanover Compressor Capital Trust

                    7 1/4% Convertible Preferred Securities
             Term Income Deferrable Equity Securities (TIDES)/SM/*
          (liquidation amount $50 per Convertible Preferred Security)

     Hanover Compressor Capital Trust, a statutory business trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that

----------------------------------
          (the "Holder")

is the registered owner of preferred securities of the Trust representing
undivided beneficial interests in the assets of the Trust designated the 7 1/4%
Convertible Preferred Securities, Term Income Deferrable Equity Securities
(TIDES/SM/)* (liquidation amount $50 per Convertible Preferred Security) (the
"Preferred Securities"). Subject to the terms of the Declaration (as defined
below), the Preferred Securities are transferable on the books and records of
the Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer. The designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Preferred Securities represented hereby are issued and shall in all respects
be subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust dated as of December 15, 1999, as the same may be amended from time to
time (the "Declaration"), including the designation of the terms of the
Preferred Securities as set forth in Annex I to the Declaration. Capitalized
terms used herein but not defined shall have the meaning given them in the
Declaration. The Holder is entitled to the benefits of the Preferred Securities
Guarantee to the extent provided therein. The Sponsor will provide a copy of the
Declaration, the Preferred Securities Guarantee and the Indenture to a Holder
without charge upon written request to the Trust at its principal place of
business.

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

     Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.

     By acceptance, the Holder agrees to treat, for United States federal income
tax purposes, the Debentures as indebtedness and the Preferred Securities as
evidence of indirect beneficial ownership in the Debentures.

-------------
/*/ The terms Term Income Deferrable Equity Securities (TIDES)(SM) and TIDES(SM)
    are registered servicemarks of Credit Suisse First Boston Corporation.

                                       3
<PAGE>

     Unless the Property Trustee's Certificate of Authentication hereon has been
properly executed, these Preferred Securities shall not be entitled to any
benefit under the Declaration or be valid or obligatory for any purpose.

     IN WITNESS WHEREOF, the Trust has executed this certificate this
_____________day of _________________.

                                        Hanover Compressor Capital Trust

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

                                       4
<PAGE>

                PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

Dated:

                                        Wilmington Trust Company,
                                        as Property Trustee

                                        By:
                                           ------------------------------
                                           Authorized Signature

                                       5
<PAGE>

                         [FORM OF REVERSE OF SECURITY]

     Distributions payable on each Preferred Security will be fixed at a rate
per annum of 7 1/4% (the "Coupon Rate") of the stated liquidation amount of $50
per Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one quarter will bear interest thereon compounded quarterly at the Coupon
Rate (to the extent permitted by applicable law). The term "Distributions" as
used herein includes such quarterly distributions, additional distributions on
quarterly distributions not paid on the applicable Distribution Date, Special
Distributions and Additional Sums, as applicable. A Distribution is payable only
to the extent that payments are made in respect of the Debentures held by the
Property Trustee and to the extent the Property Trustee has funds available
therefor. The amount of Distributions payable for any period will be computed
for any full quarterly Distribution period on the basis of a 360-day year of
twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 30-day month.

     Except as otherwise described below, Distributions on the Preferred
Securities will be cumulative, will accrue from the date of their original
issuance and will be payable quarterly in arrears, on March 15, June 15,
September 15 and December 15 of each year, commencing on March 15, 2000, to
Holders of record at the close of business on the 1st day of the month of the
applicable payment date, which payment dates shall correspond to the interest
payment dates (each an "Interest Payment Date") on the Debentures. The Debenture
Issuer has the right under the Indenture to defer payments of interest by
extending the interest payment period from time to time on the Debentures for a
period not exceeding 20 consecutive quarters (each a "Deferral Period") and, as
a consequence of such deferral, Distributions will also be deferred. Despite
such deferral, quarterly Distributions will continue to accrue with interest
thereon (to the extent permitted by applicable law) at the Coupon Rate
compounded quarterly during any such Deferral Period. Prior to the termination
of any such Deferral Period, the Debenture Issuer may further extend such
Deferral Period; provided that such Deferral Period together with all such
previous and further deferrals thereof may not exceed 20 consecutive quarters or
extend beyond the maturity (whether at the stated maturity or by declaration of
acceleration, call for redemption or otherwise) of the Debentures under the
Indenture. Payments of accrued Distributions will be payable on an Interest
Payment Date elected by the Company to Holders as they appear on the books and
records of the Trust on the record date fixed for such Interest Payment Date.
Upon the termination of any Deferral Period and the payment of all amounts then
due, the Debenture Issuer may commence a new Deferral Period, subject to the
above requirements.

     The Preferred Securities shall be redeemable as provided in the
Declaration.

     The Preferred Securities shall be convertible into shares of Common Stock,
through (i) the exchange of Preferred Securities for a portion of the Debentures
and (ii) the immediate conversion of such Debentures into Common Stock, in the
manner and according to the terms set forth in the Declaration.

                                       6
<PAGE>

                               CONVERSION REQUEST

To:  Wilmington Trust Company
     as Property Trustee of
     Hanover Compressor Capital Trust

     The undersigned owner of these Preferred Securities hereby irrevocably
exercises the option to convert these Preferred Securities, or the portion below
designated, into Common Stock of Hanover Compressor Company (the "Common Stock")
in accordance with the terms of the Amended and Restated Declaration of Trust
(the "Declaration"), dated as of December 15, 1999, by Curtis A. Bedrich,
William S. Goldberg and Richard S. Meller, as Administrative Trustees,
Wilmington Trust Company, as Delaware Trustee, Wilmington Trust Company, as
Property Trustee, Hanover Compressor Company, as Sponsor, and by the Holders,
from time to time, of undivided beneficial interests in the Trust to be issued
pursuant to the Declaration. Pursuant to the aforementioned exercise of the
option to convert these Preferred Securities, the undersigned hereby directs the
Conversion Agent (as that term is defined in the Declaration) to (i) exchange
such Preferred Securities for a portion of the Debentures (as that term is
defined in the Declaration) held by the Trust (at the rate of exchange specified
in the terms of the Preferred Securities set forth as Annex I to the
Declaration) and (ii) immediately convert such Debentures on behalf of the
undersigned, into Common Stock (at the conversion rate specified in the terms of
the Preferred Securities set forth as Annex I to the Declaration).

     The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.

     Any holder, upon the exercise of its conversion rights in accordance with
the terms of the Declaration and the Preferred Securities, agrees to be bound by
the terms of the Registration Rights Agreement relating to the Common Stock
issuable upon conversion of the Preferred Securities.

Date:

in whole  [ ]       in part [ ]

Number of Preferred Securities to be converted: ___________________

If a name or names other than the undersigned, please indicate in the spaces
below the name or names in which the shares of Common Stock are to be issued,
along with the address or addresses of such person or persons:

                                       7
<PAGE>

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

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

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

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

                                --------------------------------------
                                Signature (for conversion only)

Please Print or Typewrite Name and Address, Including Zip Code, and Social
Security or Other Identifying Number:

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

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

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

                                -------------------------------
                                Signature Guarantee:*

-----------
/*/  (Signature must be guaranteed by an "eligible guarantor institution" that
     is, a bank, stockbroker, savings and loan association or credit union
     meeting the requirements of the Registrar, which requirements include
     membership or participation in the Securities Transfer Agents Medallion
     Program ("STAMP") or such other "signature guarantee program" as may be
     determined by the Registrar in addition to, or in substitution for, STAMP,
     all in accordance with the Securities Exchange Act of 1934, as amended.)

                                       8
<PAGE>

                                   ASSIGNMENT

 FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security to:

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

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

----------------------------------------------------------------------------
        (Insert assignee's social security or tax identification number)

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

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

----------------------------------------------------------------------------
                   (Insert address and zip code of assignee)

and irrevocably appoints

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

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

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

agent to transfer this Preferred Security on the books of the Trust.  The agent
may substitute another to act for him or her.

Date:

Signature:
          ------------------------------

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

(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)

Signature Guarantee:/*/
                        -----

-----------------------------
/*/  (Signature must be guaranteed by an "eligible guarantor institution" that
     is, a bank, stockbroker, savings and loan association or credit union
     meeting the requirements of the Registrar, which requirements include
     membership or participation in the Securities Transfer Agents Medallion
     Program ("STAMP") or such other "signature guarantee program" as may be
     determined by the Registrar in addition to, or in substitution for, STAMP,
     all in accordance with the Securities Exchange Act of 1934, as amended.)

                                       9
<PAGE>

CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF RESTRICTED
PREFERRED SECURITIES

This certificate relates to _____________ Preferred Securities held in (check
applicable space) ____ book-entry or ____ definitive form by the undersigned.

(A) The undersigned (check one box below):

[ ]  has requested the Property Trustee by written order to deliver in exchange
     for its beneficial interest in the Rule 144A Global Preferred Security held
     by the Depositary a Preferred Security or Preferred Securities in
     definitive, registered form in such number equal to its beneficial interest
     in such Rule 144A Global Preferred Security (or the number thereof
     indicated above); or

[ ]  has requested the Property Trustee by written order to exchange its
     Preferred Security in definitive registered form for an interest in the
     Rule 144A Global Preferred Security held by the Depositary in such number
     equal to number of Preferred Securities in definitive registered form so
     held; or

[ ]  has requested the Property Trustee by written order to exchange or register
     the transfer of a Preferred Security or Preferred Securities.

(B) The undersigned confirms that such Securities are being (check one box
 below):

 (1)  [ ] acquired for the undersigned's own account, without transfer (in
          satisfaction of Section 9.02(d)(ii)(A) of the Declaration); or

 (2)  [ ] transferred pursuant to and in compliance with Rule 144A under the
          Securities Act of 1933; or

 (3)  [ ] transferred pursuant to Rule 144 of the Securities Act of  1933; or

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

Unless one of the boxes in (B) above is checked, the Property Trustee will
refuse to register any of the Preferred Securities evidenced by this certificate
in the name of any person other than the registered Holder thereof; provided,
however, that if box (3) or (4) is checked, the Property Trustee may require,
prior to registering any such transfer of the Preferred Securities such legal
opinions, certifications and other information as the Trust has reasonably
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act of 1933, such as the exemption provided by Rule 144 under such
Act.

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

                                      10
<PAGE>

                                Signature Guarantee:/*/

                                ---------------------------------------
                                Signature must be guaranteed Signature

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

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

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

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

NOTICE: To be executed by an executive  officer

--------------
/*/ (Signature must be guaranteed by an "eligible guarantor institution" that
    is, a bank, stockbroker, savings and loan association or credit union
    meeting the requirements of the Registrar, which requirements include
    membership or participation in the Securities Transfer Agents Medallion
    Program ("STAMP") or such other "signature guarantee program" as may be
    determined by the Registrar in addition to, or in substitution for, STAMP,
    all in accordance with the Securities Exchange Act of 1934, as amended.)

                                      11
<PAGE>

                                                                     EXHIBIT A-2

                            FORM OF COMMON SECURITY

                           [FORM OF FACE OF SECURITY]

  [THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN EFFECTIVE REGISTRATION
STATEMENT.]

  [OTHER THAN AS PROVIDED IN THE DECLARATION (AS DEFINED HEREIN), THIS SECURITY
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT TO A RELATED
PARTY (AS DEFINED IN THE DECLARATION) OF HANOVER COMPRESSOR CAPITAL TRUST.]

                             Certificate Number C-1
                   Number of Common Securities ______________
                               Common Securities
                                       of
                        Hanover Compressor Capital Trust

                      7 1/4% Convertible Common Securities
            (liquidation amount $50 per Convertible Common Security)

  Hanover Compressor Capital Trust, a statutory business trust created under the
laws of the State of Delaware (the "Trust"), hereby certifies that

-------------------------------------------------------------------------------
(the "Holder") is the registered owner of common securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the 7 1/4% Convertible Common Securities (liquidation amount $50 per
Convertible Common Security) (the "Common Securities"). Subject to the terms of
the Declaration (as defined below), the Common Securities are transferable on
the books and records of the Trust, in person or by a duly authorized attorney,
upon surrender of this certificate duly endorsed and in proper form for
transfer. The designation, rights, privileges, restrictions, preferences and
other terms and provisions of the Common Securities represented hereby are
issued and shall in all respects be subject to the provisions of the Amended and
Restated Declaration of Trust of the Trust dated as of December 15, 1999, as the
same may be amended from time to time (the "Declaration"), including the
designation of the terms of the Common Securities as set forth in Annex I to the
Declaration. Capitalized terms used herein but not defined shall have the
meaning given them in the Declaration. The Holder is entitled to the benefits of
the Common Securities Guarantee to the extent provided therein. The Sponsor will
provide a copy of the Declaration, the Common Securities Guarantee and the
Indenture to a Holder without charge upon written request to the Sponsor at its
principal place of business.

                                       1
<PAGE>

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

  Upon receipt of this certificate, the Sponsor is bound by the Declaration and
is entitled to the benefits thereunder.

  By acceptance, the Holder agrees to treat for United States federal income tax
purposes the Debentures as indebtedness and the Common Securities as evidence of
indirect beneficial ownership in the Debentures.

  IN WITNESS WHEREOF, the Trust has executed this certificate this _______ day
of ______________.

                                Hanover Compressor Capital Trust

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

                                       2
<PAGE>

                         [FORM OF REVERSE OF SECURITY]

  Distributions payable on each Common Security will be fixed at a rate per
annum of 7 1/4% (the "Coupon Rate") of the stated liquidation amount of $50 per
Common Security, such rate being the rate of interest payable on the Debentures
to be held by the Property Trustee. Distributions in arrears for more than one
quarter will bear interest thereon compounded quarterly at the Coupon Rate (to
the extent permitted by applicable law). The term "Distributions" as used herein
includes quarterly distributions, additional distributions on quarterly
distributions not paid on the applicable Distribution Date, Special
Distributions and Additional Sums, as applicable. A Distribution is payable only
to the extent that payments are made in respect of the Debentures held by the
Property Trustee and to the extent the Property Trustee has funds available
therefor. The amount of Distributions payable for any period will be computed
for any full quarterly Distribution period on the basis of a 360-day year of
twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 30-day month.

  Except as otherwise described below, Distributions on the Common Securities
will be cumulative, will accrue from the date of their original issuance and
will be payable quarterly in arrears, on March 15, June 15, September 15 and
December 15 of each year, commencing on March 15, 2000, to Holders of record one
(1) day prior to such payment dates, which payment dates shall correspond to the
interest payment dates (each, an "Interest Payment Date") on the Debentures. The
Debenture Issuer has the right under the Indenture to defer payments of interest
by extending the interest payment period from time to time on the Debentures for
a period not exceeding 20 consecutive quarters (each a "Deferral Period") and,
as a consequence of such deferral, Distributions will also be deferred. Despite
such deferral, quarterly Distributions will continue to accrue with interest
thereon (to the extent permitted by applicable law) at the Coupon Rate
compounded quarterly during any such Deferral Period. Prior to the termination
of any such Deferral Period, the Debenture Issuer may further extend such
Deferral Period; provided that such Deferral Period together with all such
previous and further deferrals thereof may not exceed 20 consecutive quarters or
extend beyond the maturity (whether at the stated maturity or by declaration of
acceleration, call for redemption or otherwise) of the Debentures under the
Indenture. Payments of accrued Distributions will be payable on an Interest
Payment Date elected by the Company to Holders as they appear on the books and
records of the Trust on the record date fixed for such Interest Payment Date.
Upon the termination of any Deferral Period and the payment of all amounts then
due, the Debenture Issuer may commence a new Deferral Period, subject to the
above requirements.

  The Common Securities shall be redeemable as provided in the Declaration.

  The Common Securities shall be convertible into shares of Common Stock,
through (i) the exchange of Common Securities for a portion of the Debentures
and (ii) the immediate conversion of such Debentures into Common Stock, in the
manner and according to the terms set forth in the Declaration.

                                       3
<PAGE>

                               CONVERSION REQUEST

To:  Wilmington Trust Company,
     as Property Trustee of
     Hanover Compressor Capital Trust

  The undersigned owner of these Common Securities hereby irrevocably exercises
the option to convert these Common Securities, or the portion below designated,
into Common Stock of HANOVER COMPRESSOR COMPANY (the "Common Stock") in
accordance with the terms of the Amended and Restated Declaration of Trust (the
"Declaration"), dated as of December 15, 1999, by Curtis A. Bedrich, William S.
Goldberg and Richard S. Meller,  as Administrative Trustees, Wilmington Trust
Company, as Delaware Trustee, Wilmington Trust Company, as Property Trustee,
Hanover Compressor Company, as Sponsor, and by the Holders, from time to time,
of undivided beneficial interests in the Trust to be issued pursuant to the
Declaration. Pursuant to the aforementioned exercise of the option to convert
these Common Securities, the undersigned hereby directs the Conversion Agent (as
that term is defined in the Declaration) to (i) exchange such Common Securities
for a portion of the Debentures (as that term is defined in the Declaration)
held by the Trust (at the rate of exchange specified in the terms of the Common
Securities set forth as Annex I to the Declaration) and (ii) immediately convert
such Debentures on behalf of the undersigned, into Common Stock (at the
conversion rate specified in the terms of the Common Securities set forth as
Annex I to the Declaration).

  The undersigned does also hereby direct the Conversion Agent that the shares
issuable and deliverable upon conversion, together with any check in payment for
fractional shares, be issued in the name of and delivered to the undersigned,
unless a different name has been indicated in the assignment below. If shares
are to be issued in the name of a person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto.

  Any holder, upon the exercise of its conversion rights in accordance with the
terms of the Declaration and the Common Securities, agrees to be bound by the
terms of the Registration Rights Agreement relating to the Common Stock issuable
upon conversion of the Common Securities.

Date:

in whole _________  in part_________

Number of Common Securities to be converted:  _____________________

If a name or names other than the undersigned, please indicate in the spaces
below the name or names in which the shares of Common Stock are to be issued,
along with the address or addresses of such person or persons

                                       4
<PAGE>

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

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

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

-------------------------------------------------------------------------------
                        Signature (for conversion only)

Please Print or Typewrite Name and Address, Including Zip Code, and Social
Security or Other Identifying Number

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

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

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

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

Signature Guarantee:/*/
                       ---------

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

--------------------------------
/*/  (Signature must be guaranteed by an "eligible guarantor institution" that
     is, a bank, stockbroker, savings and loan association or credit union
     meeting the requirements of the Registrar, which requirements include
     membership or participation in the Securities Transfer Agents Medallion
     Program ("STAMP") or such other "signature guarantee program" as may be
     determined by the Registrar in addition to, or in substitution for, STAMP,
     all in accordance with the Securities Exchange Act of 1934, as amended.)

                                       5
<PAGE>

                                   ASSIGNMENT

  FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:

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

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

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

-------------------------------------------------------------------------------
        (Insert assignee's social security or tax identification number)

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

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

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

-------------------------------------------------------------------------------
                   (Insert address and zip code of assignee)

and irrevocably appoints

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

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

agent to transfer this Common Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.

Date:

Signature:
          --------------------------------
(Sign exactly as your name appears on the
other side of this Common Security
Certificate)

Signature Guarantee:/*/
                        -------------------------

--------
/*/  (Signature must be guaranteed by an "eligible guarantor institution" that
     is, a bank, stockbroker, savings and loan association or credit union
     meeting the requirements of the Registrar, which requirements include
     membership or participation in the Securities Transfer Agents Medallion
     Program ("STAMP") or such other "signature guarantee program" as may be
     determined by the Registrar in addition to, or in substitution for, STAMP,
     all in accordance with the Securities Exchange Act of 1934, as amended.)

                                       6<PAGE>

                                                                     Exhibit 4.6

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

                           HANOVER COMPRESSOR COMPANY

                                       TO

                            WILMINGTON TRUST COMPANY

                                    Trustee

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

                                   INDENTURE

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

                         Dated as of December 15, 1999

                        Convertible Junior Subordinated
                              Debentures Due 2029

================================================================================
<PAGE>

                               TABLE OF CONTENTS

                                   ARTICLE I

            DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
<TABLE>
<S>               <C>                                                                   <C>
  Section 1.01    Definitions............................................................ 2
  Section 1.02    Compliance Certificates and Opinions...................................10
  Section 1.03    Form of Documents Delivered to Trustee.................................11
  Section 1.04    Acts of Holders; Record Dates..........................................11
  Section 1.05    Notices, Etc., to Trustee and the Company..............................13
  Section 1.06    Notice to Holders; Waiver..............................................13
  Section 1.07    Conflict with Trust Indenture Act......................................14
  Section 1.08    Effect of Headings and Table of Contents...............................14
  Section 1.09    Successors and Assigns.................................................14
  Section 1.10    Separability Clause....................................................14
  Section 1.11    Benefits of Indenture..................................................14
  Section 1.12    Governing Law..........................................................14
  Section 1.13    Legal Holidays.........................................................15

<CAPTION>
                                   ARTICLE II

                                 SECURITY FORMS
<S>               <C>                                                                   <C>
  Section 2.01    Forms Generally........................................................15
  Section 2.02    Initial Issuance to Property Trustee...................................15
  Section 2.03    Additional Provisions Required in Global Security......................16
  Section 2.04    Issuance of Global Securities to Holders...............................17

<CAPTION>
                                  ARTICLE III

                                 THE SECURITIES
<S>               <C>                                                                  <C>
  Section 3.01    Title and Terms........................................................17
  Section 3.02    Denominations..........................................................19
  Section 3.03    Execution, Authentication, Delivery and Dating.........................19
  Section 3.04    Temporary Securities...................................................19
  Section 3.05    Global Securities......................................................20
  Section 3.06    Registration, Transfer and Exchange Generally; Certain Transfers
                  and Exchanges..........................................................21
  Section 3.07    Mutilated, Destroyed, Lost and Stolen Securities.......................23
  Section 3.08    Payment of Interest; Interest Rights Preserved.........................24
  Section 3.09    Persons Deemed Owners..................................................25
  Section 3.10    Cancellation...........................................................26
  Section 3.11    Right of Set Off.......................................................26
</TABLE>
<PAGE>

<TABLE>
<S>              <C>                                                                    <C>
  Section 3.12    CUSIP Numbers..........................................................26
  Section 3.13    Extension of Interest Payment Period; Notice of Extension..............26
  Section 3.14    Paying Agent, Security Registrar and Conversion Agent..................27

<CAPTION>
                                   ARTICLE IV

                           SATISFACTION AND DISCHARGE
<S>             <C>                                                                     <C>
  Section 4.01    Satisfaction and Discharge of Indenture................................28
  Section 4.02    Application of Trust Money.............................................29

<CAPTION>
                                   ARTICLE V

                                    REMEDIES
<S>               <C>                                                                   <C>
  Section 5.01    Events of Default......................................................29
  Section 5.02    Acceleration of Maturity; Rescission and Annulment.....................30
  Section 5.03    Collection of Indebtedness and Suits for Enforcement by Trustee........31
  Section 5.04    Trustee May File Proofs of Claim.......................................32
  Section 5.05    Trustee May Enforce Claims Without Possession of Securities............32
  Section 5.06    Application of Money Collected.........................................32
  Section 5.07    Limitation on Suits....................................................33
  Section 5.08    Unconditional Right of Holders to Receive Principal and Interest and
                  to Convert.............................................................33
  Section 5.09    Restoration of Rights and Remedies.....................................34
  Section 5.10    Rights and Remedies Cumulative.........................................34
  Section 5.11    Delay or Omission Not Waiver...........................................34
  Section 5.12    Control by Holders.....................................................34
  Section 5.13    Waiver of Past Defaults................................................35
  Section 5.14    Undertaking for Costs..................................................35
  Section 5.15    Waiver of Stay or Extension Laws.......................................35
  Section 5.16    Enforcement by Holders of Preferred Securities.........................36

<CAPTION>
                                   ARTICLE VI

                                  THE TRUSTEE

<S>               <C>                                                                  <C>
  Section 6.01    Certain Duties and Responsibilities....................................36
  Section 6.02    Notice of Defaults.....................................................37
  Section 6.03    Certain Rights of Trustee..............................................37
  Section 6.04    Not Responsible for Recitals or Issuance of Securities.................38
  Section 6.05    May Hold Securities....................................................38
  Section 6.06    Money Held in Trust....................................................38
  Section 6.07    Compensation and Reimbursement.........................................38
  Section 6.08    Disqualification; Conflicting Interests................................39
  Section 6.09    Corporate Trustee Required; Eligibility................................39
</TABLE>
<PAGE>

<TABLE>
<S>              <C>                                                                    <C>
  Section 6.10    Resignation and Removal; Appointment of Successor......................39
  Section 6.11    Acceptance of Appointment by Successor.................................40
  Section 6.12    Merger, Conversion, Consolidation or Succession to Business............41
  Section 6.13    Preferential Collection of Claims Against Company......................41
  Section 6.14    Co-trustees and Separate Trustees......................................41

<CAPTION>
                                  ARTICLE VII

               HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

<S>              <C>                                                                   <C>
  Section 7.01    Company to Furnish Trustee Names and Addresses of Holders..............42
  Section 7.02    Preservation of Information; Communications to Holders.................43
  Section 7.03    Reports by Trustee.....................................................43
  Section 7.04    Reports by Company.....................................................43
  Section 7.05    Tax Reporting..........................................................44

<CAPTION>
                                  ARTICLE VIII

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
<S>             <C>                                                                    <C>
  Section 8.01    Company May Consolidate, Etc. Only on Certain Terms....................44
  Section 8.02    Successor Substituted..................................................45

<CAPTION>
                                   ARTICLE IX

                            SUPPLEMENTAL INDENTURES

<S>              <C>                                                                    <C>
  Section 9.01    Supplemental Indentures Without Consent of Holders.....................45
  Section 9.02    Supplemental Indentures with Consent of Holders........................46
  Section 9.03    Execution of Supplemental Indentures...................................47
  Section 9.04    Effect of Supplemental Indentures......................................47
  Section 9.05    Conformity with Trust Indenture Act....................................48
  Section 9.06    Reference in Securities to Supplemental Indentures.....................48

<CAPTION>
                                   ARTICLE X

                   COVENANTS; REPRESENTATIONS AND WARRANTIES

<S>              <C>                                                                    <C>
  Section 10.01   Payment of Principal and Interest......................................48
  Section 10.02   Maintenance of Office or Agency........................................48
  Section 10.03   Money for Security Payments to Be Held in Trust........................49
  Section 10.04   Statement by Officers as to Default....................................49
  Section 10.05   Limitation on Dividends; Transactions with Affiliates; Covenants as
                  to the Trust...........................................................50
  Section 10.06   Payment of Expenses of the Trust.......................................51
  Section 10.07   Registration Rights....................................................51
</TABLE>
<PAGE>

<TABLE>
<S>              <C>                                                                    <C>
  Section 10.08   Offering Document Amendment or Supplement..............................52

<CAPTION>
                                   ARTICLE XI

                            REDEMPTION OF SECURITIES

<S>                <C>                                                                 <C>
  Section 11.01   Optional Redemption....................................................52
  Section 11.02   Tax Event Redemption...................................................52
  Section 11.03   Selection by Trustee of Securities to Be Redeemed......................53
  Section 11.04   Notice of Redemption...................................................54
  Section 11.05   Deposit of Redemption Price............................................54
  Section 11.06   Securities Payable on Redemption Date..................................54
  Section 11.07   Securities Redeemed in Part............................................55

<CAPTION>
                                  ARTICLE XII

                          SUBORDINATION OF SECURITIES

<S>                <C>                                                                <C>
  Section 12.01   Agreement to Subordinate...............................................55
  Section 12.02   Default on Senior Debt.................................................56
  Section 12.03   Liquidation; Dissolution; Bankruptcy...................................56
  Section 12.04   Subrogation............................................................57
  Section 12.05   Trustee to Effectuate Subordination....................................58
  Section 12.06   Notice by the Company..................................................58
  Section 12.07   Rights of the Trustee; Holders of Senior Debt..........................59
  Section 12.08   Subordination May Not Be Impaired......................................59

<CAPTION>
                                  ARTICLE XIII

                            CONVERSION OF SECURITIES

<S>              <C>                                                                   <C>
  Section 13.01   Conversion Rights......................................................60
  Section 13.02   Conversion Procedures..................................................60
  Section 13.03   Conversion Price Adjustments...........................................62
  Section 13.04   Reclassification, Consolidation, Merger or Sale of Assets..............66
  Section 13.05   Notice of Adjustments of Conversion Price..............................67
  Section 13.06   Prior Notice of Certain Events.........................................67
  Section 13.07   Adjustments in Case of Fundamental Changes.............................68
  Section 13.08   Dividend or Interest Reinvestment Plans................................71
  Section 13.09   Certain Additional Rights..............................................71
  Section 13.10   Restrictions on Common Stock Issuable Upon Conversion..................72
  Section 13.11   Trustee Not Responsible for Determining Conversion Price or
                  Adjustments............................................................72
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
                                  ARTICLE XIV

        IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
<S>              <C>                                                                    <C>
  Section 14.01   No Recourse............................................................72

</TABLE>

EXHIBIT A Form of Security
<PAGE>

 Certain Sections of this Indenture relating to Sections 310 through 318 of the
                          Trust Indenture Act of 1939:

<TABLE>
<CAPTION>
Trust Indenture Act                                            Indenture
      Section                                                   Section
-------------------                                            ---------
<S>         <C>                                             <C>
Section 310 (a) (1)........................................            6.09
            (a) (2)........................................            6.09
            (a) (3)........................................  Not Applicable
            (a) (4)........................................  Not Applicable
            (b)............................................      6.08, 6.10
Section 311 (a)............................................            6.13
            (b)............................................            6.13
Section 312 (a)............................................            7.01
                                                                    7.02(a)
            (b)............................................         7.02(b)
            (c)............................................         7.02(c)
Section 313 (a)............................................         7.03(a)
            (a) (4)........................................         7.03(a)
            (b)............................................         7.03(a)
            (c)............................................         7.03(a)
            (d)............................................         7.03(b)
Section 314 (a)............................................            7.04
            (b)............................................  Not Applicable
            (c) (1)........................................            1.02
            (c) (2)........................................            1.02
            (c) (3)........................................  Not Applicable
            (d)............................................  Not Applicable
            (e)............................................            1.02
Section 315 (a)............................................            6.01
                                                                       6.03
            (b)............................................            6.02
            (c)............................................            6.01
            (d)............................................            6.01
            (e)............................................            5.14
Section 316 (a) (1) (A)....................................            5.02
                                                                       5.12
            (a) (1) (B)....................................            5.13
            (a) (2)........................................  Not Applicable
            (b)............................................            5.08
            (c)............................................         1.04(c)
Section 317 (a) (1)........................................            5.03
            (a) (2)........................................            5.04
            (b)............................................           1.003
Section 318 (a)............................................            1.07
</TABLE>

Note:  This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>

     This INDENTURE, dated as of December 15, 1999, between Hanover Compressor
Company, a corporation duly organized and existing under the laws of the State
of Delaware (herein called the "Company"), and Wilmington Trust Company, a
Delaware banking corporation, as Trustee (herein called the "Trustee").

                            RECITALS OF THE COMPANY

     WHEREAS Hanover Compressor Capital Trust, a Delaware business trust (the
"Trust"), formed under the Amended and Restated Declaration of Trust among the
Company, as Sponsor, Wilmington Trust Company, as property trustee (the
"Property Trustee"), and Wilmington Trust Company, as Delaware trustee (the
"Delaware Trustee"), and Curtis A. Bedrich, William S. Goldberg and Richard S.
Meller, as trustees (together with the Property Trustee and the Delaware
Trustee, the "Issuer Trustees"), dated as of December 15, 1999, (the
"Declaration"), pursuant to the Purchase Agreement (the "Purchase Agreement")
dated December 9, 1999, among the Company, the Trust and the Initial Purchasers
named therein, will issue and sell up to 1,500,000 of its 7 1/4% Convertible
Preferred Securities, Term Income Deferrable Equity Securities (TIDES)(SM)
("Preferred Securities") (or up to 1,725,000 of its Preferred Securities to the
extent the over-allotment option is exercised in full) with a liquidation amount
of $50 per Preferred Security, having an aggregate liquidation amount with
respect to the assets of the Trust of up to $75,000,000 (or up to $86,250,000 to
the extent the over-allotment option is exercised in full);

     WHEREAS the trustees of the Trust, on behalf of the Trust, will execute and
deliver to the Company Common Securities evidencing an ownership interest in the
Trust, registered in the name of the Company, in an aggregate amount equal to
three percent of the capitalization of the Trust, equivalent to up to 46,392 7
1/4% Common Securities (the "Common Securities" and, together with the Preferred
Securities, the "Trust Securities") (or up to 53,351 Common Securities to the
extent the over-allotment option is exercised in full), with a liquidation
amount of $50 per Common Security, having an aggregate liquidation amount with
respect to the assets of the Trust of up to $2,319,600 (or up to $2,667,550 to
the extent the over-allotment option is exercised in full);

     WHEREAS the Trust will use the proceeds from the sale of the Preferred
Securities and the Common Securities to purchase from the Company the
Convertible Junior Subordinated Debentures Due 2029 (the "Securities") in an
aggregate principal amount of up to $77,319,600 (or up to $88,917,550 to the
extent the over-allotment option is exercised in full);

     WHEREAS the Company is guaranteeing the payment of distributions on the
Trust Securities and payment of the Redemption Price (as defined herein) and
payments on liquidation with respect to the Trust Securities, to the extent
provided in the Common Securities Guarantee Agreement, dated December 15, 1999,
between the Company and the Trust, and the Preferred Securities Guarantee
Agreement, dated December 15, 1999, between the Company and Wilmington Trust
Company, as Guarantee Trustee, for the benefit of the holders of the Trust
Securities from time to time (together, the "Guarantee");

     WHEREAS the Company has duly authorized the creation of an issue of the
Securities of substantially the tenor and amount hereinafter set forth and to
provide therefor the Company has duly authorized the execution and delivery of
this Indenture;
<PAGE>

     WHEREAS, so long as the Trust is a Holder of Securities and any Preferred
Securities are outstanding, the Declaration provides that the holders of
Preferred Securities may cause the Conversion Agent (as defined herein) to (i)
exchange such Preferred Securities for Securities held by the Trust and (ii)
immediately convert such Securities into Common Stock (as defined herein); and

     WHEREAS all things necessary to make the Securities, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company and to make this Indenture a valid
agreement of the Company, in accordance with their and its terms, have been
done.

     NOW, THEREFORE, THIS INDENTURE WITNESSETH:

     For and in consideration of the premises and the purchase of the Securities
by the Holders (as defined herein) thereof, it is mutually agreed, for the equal
and proportionate benefit of all Holders of the Securities, as follows:

                                    ARTICLE

            DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 1.01 Definitions.

     For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:

(1) the terms defined in this Article have the meanings assigned to them in
this Article and include the plural as well as the singular;

(2) all other terms used herein which are defined in the Trust Indenture Act,
either directly or by reference therein, have the meanings assigned to them
therein;

(3) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
and

(4) the words "herein", "hereof" and "hereunder" and other words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision.

     "Act", when used with respect to any Holder, has the meaning specified in
Section 1.04.

     "Additional Payments" means Compounded Interest and Additional Sums, if
any.

     "Additional Sums" has the meaning specified in Section 3.01.

                                      -2-
<PAGE>

     "Adjusted Reference Market Price" has the meaning specified in Section
13.07(a)(i).

     "Adjusted Relevant Price" has the meaning specified in Section 13.07(a)(i).

     "Administrative Action" has the meaning specified in the definition of Tax
Event in this Section 1.01.

     "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

     "Agent" means any Registrar, Paying Agent, Conversion Agent or co-
registrar.

     "Agent Member" means any member of, or participant in, the Depositary.

     "Applicable Conversion Price" has the meaning specified in Section 13.01.

     "Applicable Conversion Ratio" has the meaning specified in Section 13.01.

     "Applicable Rate" means the rate at which the Securities accrue interest
and the corresponding Trust Securities accrue distributions, which in the
absence of a Registration Default shall mean 7 1/4%.  In the event of a
Registration Default, the Applicable Rate shall be increased in accordance with
the provisions of Section 10.07 hereof.

     "Board of Directors" means either the board of directors of the Company or
any duly authorized committee of that board.

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

     "Business Day" means any day other than a Saturday or a Sunday, or a day on
which banking institutions in New York, New York or Wilmington, Delaware are
authorized or required by law or executive order to remain closed, or a day on
which the corporate trust office of the Property Trustee or the Trustee is
closed for business.

     "Closing Price" has the meaning specified in Section 13.07(b).

     "Commission" means the Securities and Exchange Commission, as from time to
time constituted, created, or, if at any time after the execution of this
instrument such Commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act, then the body performing such
duties at such time.

                                      -3-
<PAGE>

     "Common Securities" has the meaning specified in the Second Recital to this
instrument.

     "Common Stock" means common stock, par value $.001 per share, of the
Company.

     "Common Stock Fundamental Change" has the meaning specified in Section
13.07(b).

     "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.

     "Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by its Treasurer,
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.

     "Company Transaction" has the meaning specified in Section 13.04.

     "Compounded Interest" has the meaning specified in Section 3.13.

     "Conversion Agent" means the Person appointed to act on behalf of the
holders of Preferred Securities in effecting the conversion of Preferred
Securities as and in the manner set forth in the Declaration and Section 13.02
hereof.

     "Conversion Date" has the meaning specified in Section 13.02.

     "Corporate Trust Office" means the principal office of the Trustee in
Wilmington, Delaware,  at which at any particular time its corporate trust
business shall be administered and which at the date of this Indenture is 100
North Market Street, Wilmington, Delaware, 19890-0001.

     "Declaration" has the meaning specified in the Recitals to this instrument.

     "Debt" means (i) the principal of and premium and interest, if any, on
indebtedness for money borrowed, (ii) purchase money and similar obligations,
(iii) obligations under capital leases, (iv) guarantees, assumptions or purchase
commitments relating to, or other transactions as a result of which the Company
is responsible for the payment of, such indebtedness of others, (v) renewals,
extensions and refunding of any such indebtedness, (vi) interest or obligations
in respect of any such indebtedness accruing after the commencement of any
insolvency or bankruptcy proceedings and (vii) obligations associated with
derivative products such as interest rate and currency exchange contracts,
foreign exchange contracts, commodity contracts and similar arrangements.

     "Defaulted Interest" has the meaning specified in Section 3.08.

     "Deferral Period" has the meaning specified in Section 3.13.

     "Deferral Notice" has the meaning specified in Section 3.13.

                                      -4-
<PAGE>

     "Delaware Trustee" has the meaning given it in the first recital of this
instrument.

     "Depositary" means The Depository Trust Company, or any successor thereto.

     "Dissolution Tax Opinion" has the meaning specified in the definition of
Tax Event in this Section 1.01.

     "Entitlement Date" has the meaning specified in Section 13.07(b).

     "Event of Default" has the meaning specified in Section 5.01.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation.

     "Expiration Date" has the meaning specified in Section 1.04(d).

     "Expiration Time" has the meaning specified in Section 13.03(vi).

     "Fundamental Change" has the meaning specified in Section 13.07(b).

     "Global Security" means a Security issued in the form prescribed in Section
2.03, issued to the Depositary or its nominee, and registered in the name of the
Depositary or its nominee.

     "Guarantee" has the meaning specified in the Fourth Recital to this
instrument.

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

     "Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, including, for
all purposes of this instrument and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this instrument and any such supplemental indenture, respectively.

     "Initial Conversion Price" has the meaning specified in Section 13.01.

     "Initial Conversion Ratio" has the meaning specified in Section 13.01.

     "Initial Purchasers", with respect to the Preferred Securities, means
Credit Suisse First Boston Corporation, Goldman, Sachs & Co., Salomon Smith
Barney Inc. and Dain Rauscher Incorporated.

     "Interest Payment Date" has the meaning specified in Section 3.01.

     "Issuer Trustees" has the meaning specified in the First Recital of this
Indenture.

                                      -5-
<PAGE>

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

     "90 Day Period" has the meaning specified in Section 11.02.

     "NNM" means the National Market System of the National Association of
Securities Dealers, Inc., or any successor national automated interdealer
quotation system.

     "Non-Stock Fundamental Change" has the meaning specified in Section
13.07(b).

     "No Recognition Opinion" means an opinion of a nationally recognized
independent tax counsel (reasonably acceptable to the Issuer Trustees)
experienced in such matters, which opinion may rely on published revenue rulings
of the Internal Revenue Service, to the effect that the Holders of the
Securities will not recognize any income, gain or loss for United States Federal
income tax purposes as a result of the liquidation of the Trust and the
distribution of the Securities to the holders of the Preferred Securities.

     "Notice of Conversion" means the notice to be given by a Holder of
Preferred Securities to the Conversion Agent directing the Conversion Agent to
exchange such Preferred Securities for Securities and to convert such Securities
into Common Stock on behalf of such holder.

     "Officers' Certificate" means a certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a Vice President, and by
the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary,
of the Company, and delivered to the Trustee. One of the officers signing an
Officers' Certificate given pursuant to Section 10.04 shall be the principal
executive, financial or accounting officer of the Company.

     "Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company, and who shall be reasonably acceptable to the Trustee.

     "Optional Redemption" has the meaning specified in Section 11.01.

     "Optional Redemption Price" has the meaning specified in Section 11.01.

     "Optional Redemption Ratio" has the meaning specified in Section 13.07(b).

     "Outstanding", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except: (i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; (ii) Securities for whose payment or
redemption money in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own Paying
Agent) for the Holders of such Securities; provided, that if such Securities are
to be redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made; and
(iii) Securities which have been paid pursuant to Section 3.08, converted into
Common Stock

                                      -6-
<PAGE>

pursuant to Section 13.01, or in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to this Indenture,
other than any such Securities in respect of which there shall have been
presented to the Trustee proof satisfactory to it that such Securities are held
by a bona fide purchaser in whose hands such Securities are valid obligations of
the Company.

     "Paying Agent" means any Person authorized by the Company to pay the
principal of or interest on any Securities on behalf of the Company.

     "Payment Resumption Date" has the meaning set forth in Section 3.13.

     "Person" means a legal person, including any individual, corporation,
estate, company, partnership, joint venture, association, joint-stock company,
limited liability company, trust, unincorporated organization or government or
any agency or political subdivision thereof or any other entity of whatever
nature.

     "Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.07 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.

     "Preferred Securities" has the meaning specified in the first recital to
this instrument.

     "Property Trustee" has the meaning specified in the Recitals to this
instrument.

     "Purchase Agreement" has the meaning specified in the Recitals to this
instrument.

     "Purchased Shares" has the meaning specified in Section 13.03(vi).

     "Purchaser Stock Price" has the meaning specified in Section 13.07(b).

     "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", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.

     "Redemption Tax Opinion" means an opinion of a nationally recognized
independent tax counsel (reasonably acceptable to the Issuer Trustees)
experienced in such matters that, as a result of a Tax Event, there is more than
an insubstantial risk that the Company would be precluded from deducting the
interest on the Securities for United States Federal income tax purposes, even
after the Trust was liquidated and the Securities were distributed to the
holders of the Preferred Securities.

     "Reference Date" has the meaning specified in Section 13.03(iv).

     "Reference Market Price" has the meaning specified in Section 13.07(b).

                                      -7-
<PAGE>

     "Registration Default" has the meaning specified in Section 10.07.

     "Registration Rights Agreement" has the meaning specified in Section 10.07.

     "Regular Record Date" has the meaning specified in Section 3.01.

     "Relevant Price" has the meaning specified in Section 13.07(b).

     "Responsible Officer", when used with respect to the Trustee, means the
chairman or any Vice-chairman of the board of directors, the chairman or any
Vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any Vice president, any assistant vice
president, the treasurer, any assistant treasurer, any trust officer or
assistant trust officer, the controller or any assistant controller or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.

     "Restricted Preferred Securities" means each Preferred Security required to
bear the restricted securities legend required by Section 9.02(j) of the
Declaration.

     "Restricted Securities" means each Security required to bear a Restricted
Securities Legend pursuant to Section 2.02 hereof.

     "Restricted Securities Legend" has the meaning specified in Section 2.02.

     "Securities" has the meaning specified in the Third Recital to this
instrument.

     "Securities Act" means the Securities Act of 1933, as amended from time to
time, or any successor legislation.

     "Security Register" and "Security Registrar" have the respective meanings
specified in Section 3.06.

     "Senior Debt" means (i) the principal of, premium, if any,  and interest,
on all obligations of every nature of the Company for money borrowed, whether
outstanding on the date of execution of the Indenture or thereafter created,
assumed or incurred, together with all fees, indemnities and expenses payable
under such obligations, (ii) all obligations to make payment pursuant to the
terms of financial instruments, such as (a) securities contracts and foreign
currency exchange contracts, (b) derivative instruments, such as swap agreements
(including interest rate and foreign exchange rate swap agreements), cap
agreements, floor agreements, collar agreements, interest rate agreements,
foreign exchange agreements, options, commodity futures contracts and commodity
options contracts, and (c) similar financial instruments; except, in the case of
both (i) and (ii) above, such indebtedness and obligations that are expressly
stated to rank junior in right of payment to, or pari passu in right of payment
with, the Securities, (iii) indebtedness or obligations of others of the kind
described in both (i) and (ii) above for the payment of which the Company is
responsible or liable as guarantor or otherwise, and (iv) deferrals, renewals or
extensions of any such Senior Debt;

                                      -8-
<PAGE>

provided, however, that Senior Debt shall not be deemed to include (a) any Debt
of the Company which, when incurred and without respect to any election under
Section 1111(b) of the United States Bankruptcy Code of 1978, was without
recourse to the Company, (b) trade accounts payable and accrued liabilities
arising in the ordinary course of business, (c) any Debt of the Company to any
of its subsidiaries, (d) Debt to any employee of the Company and (e) Debt which
by its terms is subordinated to trade accounts payable or accrued liabilities
arising in the ordinary course of business to the extent that payments made to
the holders of such Debt by the Holders of the Securities as a result of the
subordination provisions of the Indenture would be greater than such payments
otherwise would have been as a result of any obligation of such holders of such
Debt to pay amounts over to the obligees on such trade accounts payable or
accrued liabilities arising in the ordinary course of business as a result of
subordination provisions to which such Debt is subject.

     "Shelf Registration Statement" has the meaning specified in Section 10.07.

     "Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.08.

     "Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal, together with any
accrued and unpaid interest (including Compounded Interest), of such Security or
such installment of interest is due and payable.

     "Subsidiary" of any Person means (i) a corporation more than 50% of the
outstanding Voting Stock of which is owned, directly or indirectly, by such
Person or by one or more other Subsidiaries of such Person or by such Person and
one or more Subsidiaries thereof or (ii) any other Person (other than a
corporation) in which such Person, or one or more other Subsidiaries of such
Person or such Person and one or more other Subsidiaries thereof, directly or
indirectly, has at least a majority ownership and power to direct the policies,
management and affairs thereof.

     "Tax Event" means the receipt by the Property Trustee of an opinion of a
nationally recognized independent tax counsel to the Company experienced in such
matters (a "Dissolution Tax Opinion") to the effect that, as a result of (a) any
amendment to or change (including any announced prospective change (which shall
not include a proposed change), provided that a Tax Event shall not occur more
than 90 days before the effective date of any such prospective change) in the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, (b) any judicial decision or
official administrative pronouncement, ruling, regulatory procedure, notice or
announcement, including any notice or announcement of intent to adopt such
procedures or regulations (an "Administrative Action") or (c) any amendment to
or change in the administrative position or interpretation of any Administrative
Action or judicial decision that differs from the theretofore generally accepted
position, in each case, by any legislative body, court, governmental agency or
regulatory body, irrespective of the manner in which such amendment or change is
made known, which amendment or change is effective or such Administrative Action
or decision is announced, in each case, on or after the date of original
issuance of the Securities or the issue date of the Preferred Securities issued
by the Trust, there is more than an insubstantial risk that (x) if the
Securities are held by the Property Trustee, (i) the Trust is, or will be within
90 days of the date of such opinion, subject to United States Federal income tax
with respect to interest accrued or

                                      -9-
<PAGE>

received on the Securities or subject to more than a de minimis amount of other
taxes, duties or other governmental charges as determined by such counsel, or
(ii) any portion of interest payable by the Company to the Trust on the
Securities is not, or within 90 days of the date of such opinion will not be,
deductible by the Company in whole or in part for United States Federal income
tax purposes or (y) with respect to Securities which are no longer held by the
Property Trustee, any portion of interest payable by the Company on the
Securities is not, or within 90 days of the date of such opinion will not be,
deductible by the Company in whole or in part for United States Federal income
tax purposes.

     "Trading Day" has the meaning specified in Section 13.07(b).

     "Trust" has the meaning specified in the first recital to this instrument.

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

     "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however, that in
the event the  Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.

     "Trust Securities" has the meaning specified in the second recital to this
instrument.

     "Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".

     "Voting Stock" of any Person means capital stock of such Person which
ordinarily has voting power for the election of directors (or Persons performing
similar functions) of such Person, whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.

Section 1.02  Section Compliance Certificates and Opinions.

     Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee such certificates and opinions as may be required under the Trust
Indenture Act or reasonably requested by the Trustee in connection with such
application or request. Each such certificate or opinion shall be given in the
form of an Officers' Certificate, if to be given by an officer of the Company,
or an Opinion of Counsel, if to be given by counsel, and shall comply with the
applicable requirements of the Trust Indenture Act and any other applicable
requirement set forth in this Indenture.  Every certificate or opinion with
respect to compliance with a condition or covenant provided for in this
Indenture shall include:

                                      -10-
<PAGE>

(1)  a statement that each individual signing such certificate or opinion has
read such covenant or condition and the definitions herein relating thereto;

(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 each such individual, he has made or
caused to be 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, in the opinion of each such individual, such
condition or covenant has been complied with.

Section 1.03  Form of Documents Delivered to Trustee.

     In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.

     Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.

     Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

Section 1.04  Acts of Holders; Record Dates.

(a)  Any request, demand, authorization, direction, notice, consent, waiver or
other action provided by this Indenture to be given to or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments is or are delivered to the Trustee
and, where it is hereby expressly required, to the Company. Such instrument or
instruments (and the

                                      -11-
<PAGE>

action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and (subject to Section 6.01)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.

(b)  The fact and date of the execution by any Person of any such instrument or
writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which the Trustee or the Company, as the case may be, deems
sufficient.

(c)  The Company may, in the circumstances permitted by the Trust Indenture Act,
fix any day as the record date for the purpose of determining the Holders of
Outstanding Securities entitled to give, make or take any request, demand,
authorization, direction, notice, consent, waiver or other action, or to vote on
any action, authorized or permitted to be given or taken by Holders. If not set
by the Company prior to the first solicitation of a Holder made by any Person in
respect of any such action, or, in the case of any such vote, prior to such
vote, the record date for any such action or vote shall be the 30th day (or, if
later, the date of the most recent list of Holders required to be provided
pursuant to Section 7.01) prior to such first solicitation or vote, as the case
may be. With regard to any record date, only the Holders on such date (or their
duly designated proxies) shall be entitled to give or take, or vote on, the
relevant action.

(d)  The Trustee may set any day as a record date for the purpose of determining
the Holders of Outstanding Securities entitled to join in the giving or making
of (i) any notice of default, (ii) any declaration of acceleration referred to
in Section 5.02, (iii) any request to institute proceedings referred to in
Section 5.07(2) or (iv) any direction referred to in Section 5.12. If any record
date is set pursuant to this paragraph, the Holders of Outstanding Securities on
such record date, and no other Holders, shall be entitled to join in such
notice, declaration, request or direction, whether or not such Holders remain
Holders after such record date; provided that no such action shall be effective
hereunder unless taken on or prior to the date set by the Trustee by which any
such determination shall be made (the "Expiration Date") by Holders of the
requisite principal amount of Outstanding Securities on such record date.
Nothing in this paragraph shall be construed to prevent the Trustee from setting
a new record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be canceled and of no effect),
and nothing in this paragraph shall be construed to render ineffective any
action taken by Holders of the requisite principal amount of Outstanding
Securities on the date such action is taken. Promptly after any record date is
set pursuant to this paragraph, the Trustee, at the Company's expense, shall
cause notice of such record date, the proposed action by Holders and the
applicable Expiration Date to be given to the Company in writing and to each
Holder of Securities in the manner set forth in Section 1.06.

(e)  The ownership of Securities shall be proved by the Security Register.

                                      -12-
<PAGE>

(f)  Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.

(g)  Without limiting the foregoing, a Holder entitled hereunder to give or take
any such action with regard to any particular Security may do so with regard to
all or any part of the principal amount of such Security or by one or more duly
appointed agents each of which who may do so pursuant to such appointment with
regard to all or any different part of such principal amount.

Section 1.05  Notices, Etc., to Trustee and the Company.

     Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,

(1)  the Trustee by any Holder or by the Company shall be sufficient for every
purpose hereunder if made, given, furnished or filed in writing to:

               Wilmington Trust Company
               1100 North Market Street
               Wilmington, Delaware 19890
               Attention:  Corporate Trust Administration

(2)  the Company by the Trustee or by any Holder shall be sufficient for every
purpose hereunder (unless otherwise herein expressly provided) if in writing and
mailed, first-class postage prepaid, to the Company addressed to:

               Hanover Compressor Company
               12001 North Houston Rosslyn
               Houston, Texas 77086
               Attention:  Chief Financial Officer

Section 1.06  Notice to Holders; Waiver.

     Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at such Holder's address as it appears in the Security Register,
not later than the latest date (if any), and not earlier than the earliest date
(if any), prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Any notice when mailed
to a Holder in the aforesaid manner shall be conclusively deemed to have been
received by such Holder whether or not actually received by such Holder. Where
this Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either

                                      -13-
<PAGE>

before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.

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

Section 1.07  Conflict with Trust Indenture Act.

     If any provision hereof limits, qualifies or conflicts with a provision of
the Trust Indenture Act that is required under such Act to be a part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.

Section 1.08  Effect of Headings and Table of Contents.

     The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.

Section 1.09  Successors and Assigns.

     All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.

Section 1.10  Separability Clause.

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

Section 1.11  Benefits of Indenture.

     Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, the holders of Senior Debt, the holders of Preferred Securities (to
the extent provided herein) and the Holders of Securities, any benefit or any
legal or equitable right, remedy or claim under this Indenture.

Section 1.12  Governing Law.

     THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

                                      -14-
<PAGE>

Section 1.13  Legal Holidays.

     In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security or the last date on which a Holder has the right to
convert his Securities shall not be a Business Day, then (notwithstanding any
other provision of this Indenture or of the Securities) payment of interest or
principal or conversion of the Securities need not be made on such date, but may
be made on the next succeeding Business Day (except that, with respect to any
Redemption Date, if such Business Day is in the next succeeding calendar year,
such Redemption Date shall be the immediately preceding Business Day) with the
same force and effect as if made on the Interest Payment Date or Redemption
Date, or at the Stated Maturity or on such last day for conversion, provided
that no interest shall accrue for the period from and after such Interest
Payment Date, Redemption Date or Stated Maturity, as the case may be.

                                  ARTICLE II

                                SECURITY FORMS

Section 2.01  Forms Generally.

     The Securities and the Trustee's certificates of authentication shall be
substantially in the form of Exhibit A which is hereby incorporated in and
expressly made a part of this Indenture. The Securities may have notations,
legends or endorsements required by law, stock exchange rule, 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). The Company shall
furnish any such legend not contained in Exhibit A to the Trustee in writing.
Each Security shall be dated the date of its authentication. The terms and
provisions of the Securities set forth in Exhibit A are part of the terms of
this Indenture and to the extent applicable, the Company and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.

     The definitive Securities shall be typewritten or printed, lithographed or
engraved or produced by any combination of these methods on steel engraved
borders or may be produced in any other manner permitted by the rules of any
securities exchange on which the Securities may be listed, all as determined by
the officers executing such Securities, as evidenced by their execution of such
Securities.

Section 2.02  Initial Issuance to Property Trustee.

     The Securities initially issued to the Property Trustee of the Trust shall
be in the form of one or more individual certificates in definitive, fully
registered form without distribution coupons and shall bear the following legend
(the "Restricted Securities Legend") unless the Company determines otherwise in
accordance with applicable law:

          THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
          TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
          SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THIS SECURITY AND
          ANY

                                      -15-
<PAGE>

          COMMON STOCK ISSUABLE UPON CONVERSION HEREOF MAY NOT BE OFFERED,
          SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
          AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER 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.

          THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE ISSUER AND
          THE COMPANY THAT (A) THIS SECURITY AND ANY COMMON STOCK ISSUABLE UPON
          CONVERSION HEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
          TRANSFERRED, ONLY (i) INSIDE THE UNITED STATES TO A PERSON WHOM THE
          SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
          DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
          MEETING THE REQUIREMENTS OF RULE 144A, (ii) PURSUANT TO AN EXEMPTION
          FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
          THEREUNDER (IF AVAILABLE) OR (iii) PURSUANT TO AN EFFECTIVE
          REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (i)
          THROUGH (iii) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
          STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND
          (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY
          ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS
          REFERRED TO IN (A) ABOVE.

Section 2.03  Additional Provisions Required in Global Security.

     Any Global Security issued hereunder shall, in addition to the provisions
contained in Section 2.02, bear a legend in substantially the following form:

          "THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
          INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
          DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") OR A NOMINEE OF THE
          DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN
          THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN
          THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND NO TRANSFER
          OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A

                                      -16-
<PAGE>

          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) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.

          UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
          THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO
          HANOVER COMPRESSOR COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
          EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME
          OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
          REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON
          IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
          VALUE OR OTHERWISE BY A PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
          OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

Section 2.04  Issuance of Global Securities to Holders.

     The Securities may be represented by one or more Global Securities
registered in the name of the Depositary or its nominee if, and only if, the
Securities are distributed to the Holders of the Trust Securities. Until such
time, the Securities shall be registered in the name of and held by the Property
Trustee. Securities distributed to Holders of book-entry Trust Securities shall
be distributed in the form of one or more Global Securities registered in the
name of the Depositary or its nominee, and deposited with the Security
Registrar, as custodian for such Depositary, or held by such Depositary for
credit by the Depositary to the respective accounts of the beneficial owners of
the Securities represented thereby (or such other accounts as they may direct).
Securities distributed to Holders of Trust Securities other than book-entry
Trust Securities shall not be issued in the form of a Global Security or any
other form intended to facilitate book-entry trading in beneficial interests in
such Securities.

                                  ARTICLE III

                                THE SECURITIES

Section 3.01  Title and Terms.

     The aggregate principal amount of Securities that may be authenticated and
delivered under this Indenture is limited to the sum of $88,917,550 except for
Securities authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Securities pursuant to Section 3.04, 3.05,
3.06, 3.07, 9.06, 11.07 or 13.02.

                                      -17-
<PAGE>

     The Securities shall be known and designated as the "7 1/4% Convertible
Junior Subordinated Debentures Due 2029" of the Company. Their Stated Maturity
shall be December 15, 2029, and they shall bear interest at the Applicable Rate,
from December 15, 1999 or from the most recent Interest Payment Date (as defined
below) to which interest has been paid or duly provided for, as the case may be,
payable quarterly (subject to deferral as set forth herein), in arrears, on
March 15, June 15, September 15 and December 15 (each an "Interest Payment
Date") of each year, commencing March 15, 2000, until the principal thereof is
paid or made available for payment, and they shall be paid to the Person in
whose name the Security is registered at the close of business on the regular
record date for such interest installment, which shall be the close of business
on the first day of the month of the applicable Interest Payment Date (the
"Regular Record Date"). Interest will compound quarterly and will accrue at the
Applicable Rate on any interest installment in arrears for more than one quarter
or during an extension of an interest payment period as set forth in Section
3.13 hereof.

     The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months. Except as provided in the following
sentence, the amount of interest payable for any period shorter than a full
quarterly period for which interest is computed, will be computed on the basis
of the actual number of days elapsed in such a 30-day month. In the event that
any date on which interest is payable on the Securities is not a Business Day,
then payment of interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), with the same force and effect as if made
on such date.

     If at any time (including upon the occurrence of a Tax Event) while the
Property Trustee is the Holder of all the Securities, the Trust or the Property
Trustee is required to pay any taxes, duties, assessments or governmental
charges of whatever nature (other than withholding taxes) imposed by the United
States, or any other taxing authority, then, in any case, the Company will pay
as additional amounts ("Additional Sums") on the Securities held by the Property
Trustee, such additional amounts as shall be required so that the net amounts
received and retained by the Trust and the Property Trustee after paying such
taxes, duties, assessments or other governmental charges will be equal to the
amounts the Trust and the Property Trustee would have received had no such
taxes, duties, assessments or other governmental charges been imposed.

     The principal of and interest on the Securities shall be payable at the
office or agency of the Company in New York, New York maintained for such
purpose and at any other office or agency maintained by the Company for such
purpose in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts; provided,
however, that at any time that the Property Trustee is not the sole holder of
the Securities, payment of interest may, at the option of the Company, be made
by check mailed to the address of the Person entitled thereto as such address
shall appear in the Security Register or by wire transfer.

     The Securities shall be redeemable as provided in Article XI hereof.

     The Securities shall be subordinated in right of payment to Senior Debt as
provided in Article XII hereof.

     The Securities shall be convertible as provided in Article XIII hereof.

                                      -18-
<PAGE>

Section 3.02  Denominations.

     The Securities shall be issuable only in registered form without coupons
and only in denominations of $1,000 and integral multiples thereof.

Section 3.03  Execution, Authentication, Delivery and Dating.

     The Securities shall be executed on behalf of the Company by its Chairman
of the Board, its Vice Chairman of the Board, its President or one of its Vice
Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.

     Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.

     At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities executed by the Company to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Securities; and the Trustee in accordance with such Company
Order shall manually or by facsimile authenticate and make available for
delivery such Securities as in this Indenture provided and not otherwise.

     No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual or facsimile signature, and such certificate
upon any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder.

Section 3.04  Temporary Securities.

     Pending the preparation of definitive Securities, the Company may execute,
and upon Company Order the Trustee shall authenticate and make available for
delivery, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.

     If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at any office
or agency of the Company designated pursuant to Section 10.02, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Securities, the Company shall execute and the Trustee shall authenticate and
make available for delivery in exchange therefor a like principal amount of
definitive Securities of authorized denominations. Until so exchanged the

                                      -19-
<PAGE>

temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.

Section 3.05  Global Securities.

(a)  Each Global Security issued under this Indenture shall be registered in the
name of the Depositary designated by the Company for such Global Security or a
nominee thereof and delivered to such Depositary or a nominee thereof or
custodian therefor, and each such Global Security shall constitute a single
Security for all purposes of this Indenture.

(b)  Notwithstanding any other provision in this Indenture, no Global Security
may be exchanged in whole or in part for Securities registered, and no transfer
of a Global Security in whole or in part may be registered, in the name of any
Person other than the Depositary for such Global Security or a nominee thereof
unless (i) such Depositary advises the Trustee in writing that such Depositary
is no longer willing or able to continue as a Depositary with respect to such
Global Security, and no successor depositary shall have been appointed, or if at
any time the Depositary ceases to be a "clearing agency" registered under the
Exchange Act, at a time when the Depositary is required to be so registered to
act as such depositary, (ii) the Company in its sole discretion determines that
such Global Security shall be so exchangeable or (iii) there shall have occurred
and be continuing an Event of Default.

(c)  If any Global Security is to be exchanged for other Securities or canceled
in whole, it shall be surrendered by or on behalf of the Depositary or its
nominee to the Security Registrar for exchange or cancellation as provided in
this Article III. If any Global Security is to be exchanged for other Securities
or canceled in part, or if another Security is to be exchanged in whole or in
part for a beneficial interest in any Global Security, then either (i) such
Global Security shall be so surrendered for exchange or cancellation as provided
in this Article III or (ii) the principal amount thereof shall be reduced or
increased by an amount equal to the portion thereof to be so exchanged or
canceled, or equal to the principal amount of such other Security to be so
exchanged for a beneficial interest therein, as the case may be, by means of an
appropriate adjustment made on the records of the Security Registrar, whereupon
the Trustee shall instruct the Depositary or its authorized representative to
make a corresponding adjustment to its records. Upon any such surrender or
adjustment of a Global Security by the Depositary, accompanied by registration
instructions and, to the extent required by Section 3.06, a Restricted
Securities Certificate, the Trustee shall, subject to Section 3.05(b) and as
otherwise provided in this Article III, authenticate and make available for
delivery any Securities issuable in exchange for such Global Security (or any
portion thereof) in accordance with the instructions of the Depositary. The
Trustee shall not be liable for any delay in delivery of such instructions and
may conclusively rely on, and shall be fully protected in relying on, such
instructions.

(d)  The Depositary or its nominee, as registered owner of a Global Security,
shall be the Holder of such Global Security for all purposes under this
Indenture and the Securities, and owners of beneficial interests in a Global
Security shall hold such interest pursuant to the rules and procedures of the
Depositary. Accordingly, any such owner's beneficial interests in a Global
Security shall be shown only on, and the transfer of such interest shall be
effected only through, records

                                      -20-
<PAGE>

maintained by the Depositary or its nominee or its Agent Members. Neither the
Trustee nor the Security Registrar shall have any liability in respect of any
transfers effected by the Depositary.

(e)  The rights of the beneficial interests in a Global Security shall be
exercised only through the Depositary and shall be limited to those established
by law and agreements between such owners and the Depositary and/or its Agent
Members.

Section 3.06  Registration, Transfer and Exchange Generally; Certain Transfers
              and Exchanges.

(a)  The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 10.02 being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.

     Upon surrender for registration of transfer of any Security at an office or
agency of the Company designated pursuant to Section 10.02 for such purpose, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
any authorized denominations and of a like aggregate principal amount and
bearing such restrictive legends as may be required by this Indenture.

     At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denominations and of a like aggregate principal
amount and bearing such restrictive legends as may be required by this
Indenture, upon surrender of the Securities to be exchanged at such office or
agency. Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and make available for
delivery, the Securities which the Holder making the exchange is entitled to
receive.

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

     Every Security presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed, by the Holder thereof or
his attorney duly authorized in writing.

     No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 3.04, 3.05, 9.06, 11.09 or 13.01 not involving any
transfer.

     Neither the Company nor the Trustee shall be required (i) in the case of a
partial redemption of the Securities, to issue, register the transfer of or
exchange any Security during a period beginning

                                      -21-
<PAGE>

at the opening of business 15 days before the day of the mailing of a notice of
redemption of Securities selected for redemption under Section 11.04 and ending
at the close of business on the day of such mailing or (ii) to register the
transfer of or exchange any Security so selected for redemption in whole or in
part, except the unredeemed portion of any Security being redeemed in part.

(b)  Transfer and Exchange Procedures and Restrictions. The Securities may not
be transferred except in compliance with the Restricted Securities Legend unless
otherwise determined by the Company in accordance with applicable law. Upon any
distribution of the Securities to the holders of the Trust Securities in
accordance with the Declaration, the Company and the Trustee shall enter into a
supplemental indenture pursuant to Section 9.01(6) to provide for transfer
procedures and restrictions with respect to the Securities substantially similar
to those contained in the Declaration to the extent applicable in the
circumstances existing at the time of such distribution. Notwithstanding any
other provision of the Indenture, transfers and exchanges of Securities and
beneficial interests in a Global Security of the kinds specified in this Section
3.06(b) shall be made only in accordance with this Section 3.06(b).

(1)  Non-Global Security to Global Security. If the Holder of a Security (other
than a Global Security) wishes at any time to transfer all or any portion of
such Security to a Person who wishes to take delivery thereof in the form of a
beneficial interest in a Global Security, such transfer may be effected only in
accordance with the provisions of this clause (b)(1) and subject to the rules
and procedures of the Depositary. Upon receipt by the Security Registrar of (A)
such Security as provided in Section 3.06(a) and instructions satisfactory to
the Security Registrar directing that a beneficial interest in the Global
Security in a specified principal amount not greater than the principal amount
of such Security be credited to a specified Agent Member's account and (B) a
Securities Certificate duly executed by such Holder or such Holder's attorney
duly authorized in writing, then the Security Registrar shall cancel such
Security (and issue a new Security in respect of the untransferred portion
thereof) as provided in Section 3.06(a) and increase the aggregate principal
amount of the Global Security by the specified principal amount as provided in
Section 3.05(c).

(2)  Non-Global Security to Non-Global Security. A Security that is not a Global
Security may be transferred, in whole or in part, to a Person who takes delivery
in the form of another Security that is not a Global Security as provided in
Section 3.06(a); provided, that if such Security to be transferred in whole or
in part is a Restricted Security, the Security Registrar shall have received the
assignment form attached to the Security duly executed by the transferor Holder
or such Holder's attorney duly authorized in writing.

(3)  Exchanges between Global Security and Non-Global Security.  A beneficial
interest in a Global Security may be exchanged for a Security that is not a
Global Security as provided in Section 3.05.

(c)  Restricted Securities Legend.

(1)  Except as set forth below, all Securities shall bear the Restricted
Securities Legend set forth in Section 2.02.

                                      -22-
<PAGE>

(2)  Subject to Section 3.06(d) and to the following clauses of this Section
3.06(c), a Security (other than a Global Security) that does not bear a
Restricted Securities Legend may be issued in exchange for or in lieu of a
Restricted Security or any portion thereof that bears such legend if, in the
Company's judgment, placing such a legend upon such new Security is not
necessary to ensure compliance with the registration requirements of the
Securities Act, and the Trustee, at the written direction of the Company in the
form of an Officers' Certificate, shall countersign and deliver such a new
Security.

(3)  Notwithstanding the foregoing provisions of this Section 3.06(c), a
successor Security of a Security that does not bear a Restricted Securities
Legend shall not bear such form of legend unless the Company has reasonable
cause to believe that such successor Security is a "restricted security" within
the meaning of Rule 144 under the Securities Act, in which case the Trustee, at
the written direction of the Company in the form of an Officers' Certificate,
shall countersign and deliver a new Security bearing a Restricted Securities
Legend in exchange for such successor Security.

(4)  Upon any sale or transfer of a Restricted Security (including any
Restricted Security represented by a Global Security) pursuant to an effective
registration statement under the Securities Act or pursuant to Rule 144 under
the Securities Act after such registration ceases to be effective: (A) in the
case of any Restricted Security that is a definitive Security, the Security
Registrar shall permit the Holder thereof to exchange such Restricted Security
for a definitive Security that does not bear the Restricted Securities Legend
and shall rescind any restriction on the transfer of such Restricted Security;
and (B) in the case of any Restricted Security that is represented by a Global
Security, the Security Registrar shall permit the Holder of such Global Security
to exchange such Global Security for another Global Security that does not bear
the Restricted Securities Legend.

(5)  If Restricted Securities are being presented or surrendered for transfer or
exchange then there shall be (if so required by the Trustee), (A) if such
Restricted Securities are being delivered to the Security Registrar by a Holder
for registration in the name of such Holder, without transfer, a certification
from such Holder to that effect; or (B) if such Restricted Securities are being
transferred, a certification from the transferor as to the compliance with the
restrictions set forth in the Restricted Securities Legend.

Section 3.07  Mutilated, Destroyed, Lost and Stolen Securities.

     If any mutilated Security is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and make available for delivery in
exchange therefor a new Security of like tenor and principal amount and bearing
a number not contemporaneously outstanding.

     If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed,

                                      -23-
<PAGE>

lost or stolen Security, a new Security of like tenor and principal amount and
bearing a number not contemporaneously outstanding.

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

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

     Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.

     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 3.08  Payment of Interest; Interest Rights Preserved.

     Interest on any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date.

     Any interest on any Security which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Holder on the relevant
Regular Record Date by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Company, at its election in each case, as provided
in clause (1) or (2) below:

(1)  The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Securities (or their respective Predecessor
Securities) are registered at the close of business on a Special Record Date (as
defined below) for the payment of such Defaulted Interest, which shall be fixed
in the following manner.  The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Security and the date
of the proposed payment (which date shall be sufficiently in advance of such
notice to permit the Trustee to timely take the actions contemplated by this
Section 3.08), and at the same time the Company shall deposit with the Trustee
an amount of money equal to the aggregate amount proposed to be paid in respect
of such Defaulted Interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed payment, such money
when deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause

                                      -24-
<PAGE>

provided. Thereupon the Trustee shall fix a special record date (the "Special
Record Date") for the payment of such Defaulted Interest which shall be not more
than 15 days and not less than 10 days prior to the date of the proposed payment
and not less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such Special
Record Date and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the Special Record
Date therefor to be mailed, first-class postage prepaid, to each Holder at his
address as it appears in the Security Register, not less than 10 days prior to
such Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the Securities
(or their respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable pursuant to
the following clause (2).

(2)  The Company may make payment of any Defaulted Interest in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Securities may be listed, and, if so listed, upon such notice as may
be required by such exchange (or by the   Trustee if the Securities are not
listed), if, after notice given by the Company to the Trustee of the proposed
payment pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee provided that any such payment will be made in coin
or currency of the United States of America which at the time of payment is a
legal tender for payment of public and private debt.

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

     In the case of any Security which is converted after any Regular Record
Date and on or prior to the next succeeding Interest Payment Date (other than
any Security whose Maturity is prior to such Interest Payment Date), interest
whose Stated Maturity is on such Interest Payment Date shall be payable on such
Interest Payment Date notwithstanding such conversion, and such interest
(whether or not punctually paid or duly provided for) shall be paid to the
Person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on such Regular Record Date. Except as
otherwise expressly provided in the immediately preceding sentence, in the case
of any Security that is converted prior to any Regular Record Date, interest
whose Stated Maturity is after the date of conversion of such Security shall not
be payable, and the Company shall not make nor be required to make any other
payment, adjustment or allowance with respect to accrued but unpaid interest
(including Additional Payments) on the Securities being converted, which shall
be deemed to be paid in full.

Section 3.09  Persons Deemed Owners.

     The Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name any Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and (subject to
Section 3.08) interest on such Security and for all other

                                      -25-
<PAGE>

purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary. No holder of any beneficial interest in any
Global Security held on its behalf by a Depositary shall have any rights under
this Indenture with respect to such Global Security, and such Depositary may be
treated by the Company, the Trustee and any agent of the Company or the Trustee
as the owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company or the
Trustee from giving effect to any written certification, proxy, or other
authorization furnished by a Depositary or impair, as between the Depositary and
such holders of beneficial interests, the operation of customary practices
governing the exercise of the rights of the Depositary (or its nominee) as
Holder of any Security.

Section 3.10  Cancellation.

     All Securities surrendered for payment, redemption, registration of
transfer or exchange or conversion shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and shall be promptly canceled by
it. The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Securities so delivered
shall be promptly canceled by the Trustee. No Securities shall be authenticated
in lieu of or in exchange for any Securities canceled as provided in this
Section, except as expressly permitted by this Indenture. All canceled
Securities held by the Trustee shall be disposed of as directed by a Company
Order; provided, however, that the Trustee shall not be required to destroy the
certificates representing such canceled Securities.

Section 3.11  Right of Set Off.

     Notwithstanding anything to the contrary in this Indenture, the Company
shall have the right to set off any payment it is otherwise required to make
hereunder to the extent the Company has theretofore made, or is concurrently on
the date of such payment making, a payment under the Guarantee.

Section 3.12  CUSIP Numbers.

     The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided, that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of 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.

Section 3.13  Extension of Interest Payment Period; Notice of Extension.

(a)  So long as no Event of Default has occurred and is continuing, the Company
shall have the right, at any time during the term of this Security, from time to
time to defer payments of interest by extending for successive periods not
exceeding 20 consecutive quarters for each such period (a "Deferral Period");
provided that no Deferral Period may extend beyond December 15,

                                      -26-
<PAGE>

2029. To the extent permitted by applicable law, interest, the payment of which
has been deferred because of the extension of the interest payment period
pursuant to this Section 3.13, will bear interest thereon at the Applicable Rate
compounded quarterly for each quarter of the Deferral Period ("Compounded
Interest"). On the applicable Payment Resumption Date, the Company shall pay all
interest then accrued and unpaid on the Securities, including any Compounded
Interest that shall be payable to the Holders of the Securities in whose names
the Securities are registered in the Security Register on the Regular Record
Date fixed for such Payment Resumption Date. A Deferral Period shall terminate
upon the payment by the Company of all interest then accrued and unpaid on the
Securities (together with interest thereon accrued at an annual rate equal to
the Applicable Rate, compounded quarterly, to the extent permitted by applicable
law). Before the termination of any Deferral Period, the Company may further
extend such period as provided in paragraph (b) of this Section 3.13, provided
that such period together with all such further extensions thereof shall not
exceed 20 consecutive quarters or extend beyond the Stated Maturity of the
Securities. Upon the termination of any Deferral Period, and subject to the
foregoing requirements, the Company may elect to begin a new Deferral Period. No
interest shall be due and payable during a Deferral Period except on the Payment
Resumption Date as determined pursuant to paragraph (b) of this Section 3.13.
There is no limitation on the number of times that the Company may elect to
begin a Deferral Period.

(b)  The Company shall give the Holder of the Security and the Trustee written
notice (a "Deferral Notice") of its selection of a Deferral Period at least ten
days prior to the record date for any distributions that would have been payable
on the Trust Securities except for the decision to begin or extend a Deferral
Period.  On or prior to the Regular Record Date immediately preceding the
Interest Payment Date on which the Company elects to pay all interest then
accrued and unpaid on the Securities, including Compound Interest (the "Payment
Resumption Date"), the Company shall give the Holder of the Security and the
Trustee written notice that the Deferral Period will end on such Payment
Resumption Date. Notwithstanding the provision of such notice, the Company may
elect to further extend the Deferral Period, subject to the limitations set
forth in Section 3.13(a), by providing the Holder of the Security and the
Trustee with a new Deferral Notice not less than three Business Days prior to
the Regular Record Date immediately preceding the previously scheduled Payment
Resumption Date. The Company may elect to pay all interest then accrued and
unpaid on the Securities, including Compound Interest, on an Interest Payment
Date prior to its most recently established Payment Resumption Date provided
that the Company gives the Holder of the Security and the Trustee a new Deferral
Notice setting forth the revised Payment Resumption Date at least three Business
Days prior to the Regular Record Date for such revised Payment Resumption Date.

(c)  The quarter in which any Deferral Notice is given pursuant to paragraph (b)
hereof shall be counted as one of the 20 quarters permitted in the maximum
Deferral Period permitted under paragraph (a) hereof.

Section 3.14 Paying Agent, Security Registrar and Conversion Agent.

     The Trustee will initially act as Paying Agent, Security Registrar and
Conversion Agent. The Company may change any Paying Agent, Security Registrar,
co-registrar or Conversion Agent without prior notice. The Company or any of its
Affiliates may act in any such capacity.

                                      -27-
<PAGE>

                                  ARTICLE IV

                          SATISFACTION AND DISCHARGE

Section 4.01 Satisfaction and Discharge of Indenture.

     This Indenture shall cease to be of further effect (except as to any
surviving rights of conversion, registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, on demand of and at
the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when

(1)  either

(A)  all Securities theretofore authenticated and delivered (other than (i)
Securities which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 3.06 and (ii) Securities for whose
payment money has theretofore been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the Company or discharged from
such trust, as provided in Section 10.03) have been delivered to the Trustee for
cancellation; or

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

1)  have become due and payable, or

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

3)  are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the Company

          and the Company, in the case of (i), (ii) or (iii) above, has
          deposited or caused to be deposited with the Trustee as trust funds in
          trust for the purpose an amount sufficient to pay and discharge the
          entire indebtedness on such Securities not theretofore delivered to
          the Trustee for cancellation, for principal and interest (including
          Compounded Interest) to the date of such deposit (in the case of
          Securities which have become due and payable) or to the Stated
          Maturity or Redemption Date, as the case may be;

(2)  the Company has paid or caused to be paid all other sums payable hereunder
by the Company; and

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

                                      -28-
<PAGE>

Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.07 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 4.02 and the last
paragraph of Section 10.03 shall survive.

Section 4.02  Application of Trust Money.

     Subject to the provisions of the last paragraph of Section 10.03, all money
deposited with the Trustee pursuant to Section 4.01 shall be held in trust and
applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and interest for
whose payment such money has been deposited with the Trustee. All moneys
deposited with the Trustee pursuant to Section 4.01 (and held by it or any
Paying Agent) for the payment of Securities subsequently converted shall be
returned to the Company upon Company Request.

                                   ARTICLE V

                                   REMEDIES

Section 5.01  Events of Default.

     "Event of Default," wherever used herein, means any one of the following
events that has occurred and is continuing (whatever the reason for such Event
of Default and whether it shall be occasioned by the provisions of Article XI or
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 any interest upon any Security, including any
Additional Payments, when it becomes due and payable, and continuance of such
default for a period of 30 days (subject to the deferral of any due date in the
case of a Deferral Period); or

(2)  default in the payment of the principal of any Security when due, whether
at its Maturity, upon redemption, by declaration of acceleration or otherwise;
or

(3)  default in the observation or performance, in any material respect, of any
covenant of the Company in this Indenture (other than a covenant a default in
the performance of which or the breach of which is elsewhere in this Section
specifically dealt with), and continuance of such default for a period of 60
days after there has been given, by registered or certified mail, to the Company
by the Trustee or to the Company and the Trustee by the Holders of at least 25%
in aggregate outstanding principal amount of the Securities a written notice
specifying such default and requiring it to be remedied; or

(4)  failure by the Company to issue and deliver Common Stock upon an election
to convert the Securities into Common Stock; or

                                      -29-
<PAGE>

(5)  the entry or a decree or order by a court having jurisdiction in the
premises adjudging the Company as bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company under any applicable federal or
state bankruptcy, insolvency, reorganization or other similar law, or appointing
a receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or of any substantial part of its property or ordering
the winding up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 60 consecutive days; or

(6)  the institution by the Company of proceedings to be adjudicated a bankrupt
or insolvent, or the consent by it to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable federal or
state bankruptcy, insolvency, reorganization or other similar law, or the
consent by it to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or of any substantial part of its property, or the
making by it of an assignment for the benefit of creditors, or the admission by
it in writing of its inability to pay its debts generally as they become due and
its willingness to be adjudicated a bankrupt, or the taking of corporate action
by the Company in furtherance of any such action; or

(7)  the voluntary or involuntary dissolution, winding up or termination of the
Trust, except in connection with (i) the distribution of Securities to holders
of Preferred Securities in liquidation or redemption of their interests in the
Trust, (ii) the redemption of all of the outstanding Preferred Securities of the
Trust or (iii) certain mergers, consolidations or amalgamations, each as
permitted by the Declaration.

Section 5.02  Acceleration of Maturity; Rescission and Annulment.

     If an Event of Default occurs and is continuing, then and in every such
case the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities may declare the principal of all the Outstanding
Securities and any other amounts payable hereunder (including any Additional
Payments) to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders); provided that, if the Property
Trustee is the sole Holder of the Securities and if upon an Event of Default,
the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities fail to declare the principal of all the Securities to be
immediately due and payable, the holders of at least 25% in aggregate
liquidation amount of Preferred Securities then outstanding shall have such
right by a notice in writing to the Company and the Trustee; and upon any such
declaration such principal and all accrued interest shall become immediately due
and payable. Upon any such declaration such principal amount (or specified
amount) of and the accrued interest (including any Additional Payments) on all
the Securities shall then become immediately due and payable; provided that the
payment of principal and interest on such Securities (including Additional
Payments) shall remain subordinated to the extent provided in Article XII.

     At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as provided in this Article

                                      -30-
<PAGE>

hereinafter, the Holders of a majority in aggregate principal amount of the
Outstanding Securities or of a majority in liquidation amount of Preferred
Securities, as the case may be, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if:

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

(A)  all overdue interest (including any Compounded Interest) on all Securities,

(B)  the principal of any Securities which have become due otherwise than by
such declaration of acceleration and interest thereon at the rate borne by the
Securities, and

(C)  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 5.13.

     The Company is required to file annually with the Trustee a certificate as
to whether or not the Company is in compliance with all the conditions and
covenants applicable to it under this Indenture.

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

Section 5.03 Collection of Indebtedness and Suits for Enforcement by Trustee.
             The Company covenants that if

(1)  default is made in the payment of any interest (including any Compounded
Interest) on any Security when such interest becomes due and payable and such
default continues for a period of 30 days, or

(2)  default is made in the payment of the principal of any Security at the
Stated Maturity thereof,

the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and interest (including any Additional Payments) and,
to the extent that payment thereof shall be legally enforceable, interest on any
overdue principal and on any overdue interest (including any Additional

                                      -31-
<PAGE>

Sums), at the rate borne by the Securities, and, in addition thereto,
all amounts owing to the Trustee under Section 6.07.

     If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.

Section 5.04  Trustee May File Proofs of Claim.

     In case of any judicial proceeding relative to the Company (or any other
obligor upon the Securities), its property or its creditors, the Trustee shall
be entitled and empowered, by intervention in such proceeding or otherwise, to
take any and all actions authorized under the Trust Indenture Act in order to
have claims of the Holders and the Trustee allowed in any such proceeding. In
particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the
same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it and any predecessor Trustee under Section
6.07.

     No provision of this Indenture 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 5.05  Trustee May Enforce Claims Without Possession of Securities.

     All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of all the amounts owing to the Trustee and any predecessor
Trustee under Section 6.07, be for the ratable benefit of the Holders of the
Securities in respect of which such judgment has been recovered.

Section 5.06  Application of Money Collected.

     Subject to Article XII, any money collected by the Trustee pursuant to this
Article shall be applied in the following order, at the date or dates fixed by
the Trustee and, in case of the distribution of such money on account of
principal or interest (including any Additional Payments), upon presentation of
the Securities and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:

                                      -32-
<PAGE>

          FIRST:  To the payment of all amounts due the Trustee and any
          predecessor Trustee under Section 6.07;

          SECOND: To the payment of the amounts then due and unpaid for
          principal of and interest (including any Additional Payments) on the
          Securities in respect of which or for the benefit of which such money
          has been collected, ratably, without preference or priority of any
          kind, according to the amounts due and payable on such Securities for
          principal and interest (including any Compounded Interest),
          respectively; and

          THIRD:  The balance, if any, to the Company.

Section 5.07 Limitation on Suits.

     Subject to Section 5.08, no Holder of any Security shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless

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

(2)  the Holders of not less than 25% in aggregate principal amount of the
Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default, in its own name as
Trustee hereunder;

(3)  such Holder or Holders have offered to the Trustee reasonable indemnity
against the costs, expenses and liabilities to be incurred in compliance with
such request;

(4)  the Trustee for 60 days after its receipt of such notice, request and offer
of indemnity has failed to institute any such proceeding; and

(5)  no direction inconsistent with such written request has been given to the
Trustee during such 60-day period by the Holders of a majority in principal
amount of the Outstanding Securities;

it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.

Section 5.08  Unconditional Right of Holders to Receive Principal and Interest
              and to Convert.

     Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of and (subject

                                      -33-
<PAGE>

to Section 3.08) interest (including any Additional Payments) on such Security
on the respective Stated Maturities expressed in such Security (or, in the case
of redemption, on the Redemption Date) and to convert such Security in
accordance with Article XIII and to institute suit for the enforcement of any
such payment and right to convert, and such rights shall not be impaired without
the consent of such Holder. If the Property Trustee is the sole Holder of the
Securities, any holder of the Preferred Securities shall have the right to
institute suit on behalf of the Trust for the enforcement of any such payment
and right to convert.

Section 5.09  Restoration of Rights and Remedies.

     If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.

Section 5.10  Rights and Remedies Cumulative.

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

Section 5.11  Delay or Omission Not Waiver.

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

Section 5.12  Control by Holders.

     The Holders of a majority in principal amount of the Outstanding Securities
shall have the right to 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 the Trustee; provided, that

(1)  such direction shall not be in conflict with any rule of law or with this
Indenture;

(2)  the Trustee may take any other action deemed proper by the Trustee which is
not inconsistent with such direction.

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(3)  subject to Section 6.01, the Trustee need not take any action that might
involve the Trustee in personal liability or be unduly prejudicial to the
Holders not joining therein.

Section 5.13  Waiver of Past Defaults.

     Subject to Section 9.02 hereof, the Holders of not less than a majority in
principal amount of the Outstanding Securities may on behalf of the Holders of
all the Securities waive any past default hereunder and its consequences, except
a default

(1)  in the payment of the principal of, premium, if any, or interest (including
any Additional Payments) on any Security (unless such default has been cured and
a sum sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Trustee); or

(2)  in respect of a covenant or provision hereof which under Article IX cannot
be modified or amended without the consent of the Holder of each Outstanding
Security 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 5.14  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, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided, that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company or the Trustee or in
any suit for the enforcement of the right to receive the principal of and
interest (including any Additional Payments) on any Security or to convert any
Security in accordance with Article XIII.

Section 5.15  Waiver of Stay or Extension Laws.

     The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such 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.

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Section 5.16  Enforcement by Holders of Preferred Securities.

     Notwithstanding anything to the contrary contained herein, if an Event of
Default has occurred and is continuing and such event is attributable to the
failure of the Company to pay interest or principal on the Securities on the
date such interest or principal is otherwise payable, the Company acknowledges
that, in such event, a holder of Preferred Securities may institute a legal
proceeding directly for enforcement of payment to such Holder of the principal
of or interest on the Debentures having a principal amount equal to the
aggregate liquidation amount of the Preferred Securities of such Holder (a
"Direct Action") on or after the respective due date specified in the
Securities. The Company may not amend this Indenture to remove the foregoing
right to bring a Direct Action without the prior written consent of all the
holders of Preferred Securities. Notwithstanding any payment made to such holder
of Preferred Securities by the Company in connection with a Direct Action, the
Company shall remain obligated to pay the principal of and interest on the
Securities (including Additional Payments, if any) held by the Trust or the
Property Trustee and the Company shall be subrogated to the rights of the holder
of such Preferred Securities with respect to payments on the Preferred
Securities to the extent of any payments made by the Company to such holder in
any Direct Action. The holders of Preferred Securities will not be able to
exercise directly any other remedy available to the Holders of the Securities.

                                  ARTICLE VI

                                  THE TRUSTEE

Section 6.01  Certain Duties and Responsibilities.

(a)  Except during the continuance of an Event of Default, the Trustee
undertakes to perform such duties and only such duties as are specifically set
forth in this Indenture, and no implied covenants or obligations shall be read
into this Indenture against the Trustee.

(b)  In case an Event of Default has occurred and is continuing, and is known to
the Trustee, 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 their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his own affairs.

(c)  Notwithstanding the foregoing, (i) the duties and responsibilities of the
Trustee shall be as provided by the Trust Indenture Act and (ii) no provision of
this Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Whether or not therein expressly so provided, every provision of this Indenture
relating to the conduct or affecting the liability of or affording protection to
the Trustee shall be subject to the provisions of this Section.

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Section 6.02  Notice of Defaults.

     The Trustee shall give the Holders notice of any default hereunder known to
the Trustee as and to the extent provided by the Trust Indenture Act; provided,
however, that in the case of any default of the character specified in Section
5.01(3), no such notice to Holders shall be given until at least 30 days after
the occurrence thereof. For the purpose of this Section, the term "default"
means any event which is, or after notice or lapse of time or both would become,
an Event of Default.

Section 6.03  Certain Rights of Trustee.

     Subject to the provisions of Section 6.01:

(a)  the Trustee may conclusively rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;

(b)  any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;

(c)  whenever in the administration of this Indenture the Trustee shall deem it
desirable that a matter be proved or established prior to taking, suffering or
omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon
an Officers' Certificate;

(d)  the Trustee may consult with counsel of its choice 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;

(e)  the Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Indenture at the request or direction of any of the
Holders pursuant to this Indenture, unless such Holders shall have offered to
the Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction;

(f)  the Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to reasonable examination
of the books, records and premises of the Company, personally or by agent or
attorney; the reasonable expense of every such investigation

                                      -37-
<PAGE>

shall be paid by the Company or, if paid by the Trustee, shall be repaid by the
Company upon demand, except any such expense as may be attributable to the
Trustee's negligence or bad faith;

(g)  the Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents or attorneys and
the Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder;

(h)  the Trustee shall not be liable for any action taken, suffered, or omitted
to be taken by it in good faith, without negligence or willful misconduct, and
reasonably believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Indenture; and

(i)  the Trustee shall not be charged with knowledge of any default or Event of
Default hereunder unless a Responsible Officer of the Trustee shall have
knowledge of the default or Event of Default.

Section 6.04  Not Responsible for Recitals or Issuance of Securities.

     The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee assumes no responsibility for their correctness. The Trustee
makes no representations as to the validity or sufficiency of this Indenture or
of the Securities. The Trustee shall not be accountable for the use or
application by the Company of the Securities or the proceeds thereof.

Section 6.05  May Hold Securities.

     The Trustee, any Paying Agent, any Security Registrar or any other agent of
the Company, in its individual or any other capacity, may become the owner or
pledgee of Securities and, subject to Sections 6.08 and 6.13, may otherwise deal
with the Company with the same rights it would have if it were not Trustee,
Paying Agent, Security Registrar, or such other agent.

Section 6.06  Money Held in Trust.

     Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Company.

Section 6.07  Compensation and Reimbursement.

     The Company agrees:

(1)  to pay to the Trustee from time to time such reasonable compensation as the
Company and the Trustee shall from time to time agree in writing for all
services rendered by it hereunder (which compensation shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust);

                                      -38-
<PAGE>

(2)  except as otherwise expressly provided herein, to reimburse the Trustee
upon its request for all reasonable expenses, fees, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad faith; and

(3)  to indemnify the Trustee and any predecessor Trustee for, and to hold it
harmless against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.

     To secure the Company's payment obligations in this Section 6.07, the
Company and the Holders agree that the Trustee shall have a lien prior to the
Securities on all money or property held or collected by the Trustee.  Such lien
shall survive the satisfaction or discharge of this Indenture.

     The provisions of this Section 6.07 shall survive the termination of this
Indenture.

Section 6.08  Disqualification; Conflicting Interests.

     If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.

Section 6.09  Corporate Trustee Required; Eligibility.

     There shall at all times be a Trustee hereunder which shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus of at least $50,000,000 and has its Corporate Trust
Office in Wilmington, Delaware.  If such Person publishes reports of condition
at least annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such Person shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.

Section 6.10  Resignation and Removal; Appointment of Successor.

(a)  No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee under Section 6.11.

(b)  The Trustee may resign at any time by giving written notice thereof to the
Company. If an instrument of acceptance by a successor Trustee shall not have
been delivered to the

                                      -39-
<PAGE>

Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.

(c)  The Trustee may be removed at any time by Act of the Holders of a majority
in principal amount of the Outstanding Securities, delivered to the Trustee and
to the Company.

(d)  If at any time:

(1)  the Trustee shall fail to comply with Section 6.08 after written request
therefor by the Company or by any Holder who has been a bona fide Holder of a
Security for at least six months; or

(2)  the Trustee shall cease to be eligible under Section 6.09 and shall fail to
resign after written request therefor by the Company or by any such Holder; or

(3)  the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation;

then, in any such case, (i) the Company may remove the Trustee, or (ii) subject
to Section 5.14, any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.

(e)  If the Trustee shall resign, be removed or become incapable of acting, or
if a vacancy shall occur in the office of Trustee for any cause, the Company, by
a Board Resolution, shall promptly appoint a successor Trustee. If, within one
year after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee shall be appointed by Act of the Holders of a
majority in principal amount of the Outstanding Securities delivered to the
Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment, become the successor Trustee
and supersede the successor Trustee appointed by the Company. If no successor
Trustee shall have been so appointed by the Company or the Holders and accepted
appointment in the manner hereinafter provided, any Holder who has been a bona
fide Holder of a Security for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee.

(f)  The Company shall give written notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee to all Holders in the
manner provided in Section 1.06. Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust Office.

Section 6.11  Acceptance of Appointment by Successor.

     Every successor Trustee appointed hereunder shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the

                                      -40-
<PAGE>

resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
provided, that on request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder. Upon
request of any such successor Trustee, the Company shall execute any and all
instruments required to more fully and certainly vest in and confirm to such
successor Trustee all such rights, powers and trusts.

     No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.

Section 6.12  Merger, Conversion, Consolidation or Succession to Business.

     Any Person into which the Trustee may be merged or converted or with which
it may be consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding to
all or substantially all the corporate trust business of the Trustee, shall be
the successor of the Trustee hereunder; provided such Person shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto. In case
any Securities shall have been authenticated, but not delivered, by the Trustee
then in office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the Securities
so authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities.

Section 6.13  Preferential Collection of Claims Against Company.

     If and when the Trustee shall be or become a creditor of the Company (or
any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).

Section 6.14  Co-trustees and Separate Trustees.

     At any time or times, for the purpose of meeting the legal requirements of
any applicable jurisdiction, the Company and the Trustee shall have power to
appoint, and, upon the written request of the Trustee or of the Holders of at
least 25% in principal amount of the Securities then outstanding, the Company
shall for such purpose join with the Trustee in the execution and delivery of
all instruments and agreements necessary or proper to appoint one or more
Persons approved by the Trustee either to act as co-trustee, jointly with the
Trustee, or to act as separate trustee, in either case with such powers as may
be provided in the instrument of appointment, and to vest in such Person or
Persons in the capacity aforesaid, any property, title, right or power deemed
necessary or desirable, subject to the other provisions of this Section.  If the
Company does not join in such appointment within 15 days after the receipt by it
of a request so to do, or if an Event of Default shall have occurred and be
continuing, the Trustee alone shall have power to make such appointment.

                                      -41-
<PAGE>

     Should any written instrument or instruments from the Company be required
by any co-trustee or separate trustee so appointed to confirm to such co-trustee
or separate trustee such property, title, right or power, any and all such
instruments shall, on request, be executed, acknowledged and delivered by the
Company.

     Every co-trustee or separate trustee shall, to the extent permitted by law,
but to such extent  only, be appointed subject to the following conditions:

(a)  the Securities shall be authenticated and delivered, and all rights,
powers, duties and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustee hereunder, shall be exercised solely, by
the Trustee;

(b)  the rights, powers, duties and obligations hereby conferred or imposed upon
the Trustee in respect of any property covered by such appointment shall be
conferred or imposed upon and exercised or performed either by the Trustee or by
the Trustee and such co-trustee or separate trustee jointly, as shall be
provided in the instrument appointing such co-trustee or separate trustee,
except to the extent that under any law of any jurisdiction in which any
particular act is to be performed, the Trustee shall be incompetent or
unqualified to perform such act, in which event such rights, powers, duties and
obligations shall be exercised and performed by such co-trustee or separate
trustee;

(c)  the Trustee at any time, by an instrument in writing executed by it, with
the concurrence of the Company, may accept the resignation of or remove any co-
trustee or separate trustee appointed under this Section, and, if an Event of
Default shall have occurred and be continuing, the Trustee shall have power to
accept the resignation of, or remove, any such co-trustee or separate trustee
without the concurrence of the Company.  Upon the written request of the
Trustee, the Company shall join with the Trustee in the execution and delivery
of all instruments and agreements, necessary or proper to effectuate such
resignation or removal.  A successor to any co-trustee or separate trustee so
resigned or removed may be appointed in the manner provided in this Section;

(d)  no co-trustee or separate trustee hereunder shall be personally liable by
reason of any act or omission of the Trustee, or any other such trustee
hereunder; and

(e)  any notice from the Holders of Securities delivered to the Trustee shall be
deemed to have been delivered to each such co-trustee and separate trustee.

                                  ARTICLE VII

               HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

Section 7.01  Company to Furnish Trustee Names and Addresses of Holders.

     The Company will furnish or cause to be furnished to the Trustee

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<PAGE>

(a)  semiannually, not later than January 15 and July 15 in each year, a list,
in such form as the Trustee may reasonably require, of the names and addresses
of the Holders as of a date not more than 15 days prior to the delivery thereof;
and

(b)  at such other times as the Trustee may request in writing, within 30 days
after the receipt by the Company of any such request, a list of similar form and
content as of a date not more than 15 days prior to the time such list is
furnished;

excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.

Section 7.02  Preservation of Information; Communications to Holders.

(a)  The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.01 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.01 upon receipt of a new list so furnished.

(b)  The rights of Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Securities, and the corresponding
rights and duties of the Trustee, shall be as provided by the Trust Indenture
Act.

(c)  Every Holder of Securities, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company nor the Trustee nor any
agent of either of them shall be held accountable by reason of any disclosure of
information as to names and addresses of Holders made pursuant to the Trust
Indenture Act.

Section 7.03  Reports by Trustee.

(a)  Within 60 days after May 15 of each year, commencing May 15, 2000, the
Trustee shall transmit by first-class mail to Holders such reports concerning
the Trustee and its actions under this Indenture as may be required pursuant to
the Trust Indenture Act in the manner provided pursuant thereto.

(b)  A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which the
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when the Securities are listed on any stock exchange.

Section 7.04  Reports by Company.

     The Company shall file with the Trustee and the Commission, and transmit to
Holders, such information, documents and other reports, and such summaries
thereof, as may be required pursuant to the Trust Indenture Act at the times and
in the manner provided pursuant to such Act; provided, that any such
information, documents or reports required to be filed with the Commission
pursuant

                                      -43-
<PAGE>

to Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee
within 15 days after the same is so required to be filed with the Commission.

     Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).

Section 7.05  Tax Reporting.

     The Company shall provide to the Trustee on a timely basis such information
as the Trustee requires to enable the Trustee to prepare and file any form
required to be submitted by the Company with the Internal Revenue Service and
the Holders relating to original issue discount, including, without limitation,
Form 1099-0ID or any successor form.

                                 ARTICLE VIII

             CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

Section 8.01  Company May Consolidate, Etc. Only on Certain Terms.

     The Company shall not consolidate with or merge with or into any other
Person or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, and no Person shall consolidate with or merge with or
into the Company or convey, transfer or lease its properties and assets
substantially as an entirety to the Company, unless:

(1)  in case the Company shall consolidate with or merge with or into another
Person or convey, transfer or lease all or substantially all of its properties
and assets on a consolidated basis to any Person, the Person formed by such
consolidation or into which  the Company is merged or the Person which acquires
by conveyance, transfer or lease, all or substantially all of the properties and
assets of the Company on a consolidated basis shall be a corporation, limited
liability company, partnership or trust, shall be organized and validly existing
under the laws of the United States of America, any State thereof or the
District of Columbia and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form reasonably satisfactory
to the Trustee, the due and punctual payment of the principal of and interest
(including any Additional Payments) on all the Securities and the performance or
observance of every covenant of this Indenture on the part of the Company to be
performed or observed and shall have provided for conversion rights in
accordance with Article XIII;

(2)  immediately after giving effect to such transaction and treating any
indebtedness which becomes an obligation of the Company or a Subsidiary as a
result of such transaction as having been incurred by the Company or such
Subsidiary at the time of

                                      -44-
<PAGE>

such transaction, no Event of Default, and no event which, after notice or lapse
of time or both, would become an Event of Default, shall have happened and be
continuing;

(3)  if at the time any Preferred Securities are outstanding, such consolidation
or merger or conveyance, transfer or lease of assets of the Company is permitted
under, and does not give rise to any breach or violation of, the Declaration or
the Guarantee; and

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

Section 8.02  Successor Substituted.

     Upon any consolidation of the Company with, or merger of the Company into,
any other Person or any conveyance, transfer or lease of all or substantially
all the properties and assets of the Company on a consolidated basis in
accordance with Section 8.01, the successor Person formed by such consolidation
or into which the Company 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 under this Indenture with the same effect as if
such successor Person had been named as the Company herein, and thereafter,
except in the case of a lease, the predecessor Person shall be relieved of all
obligations and covenants under this Indenture and the Securities.

                                  ARTICLE IX

                            SUPPLEMENTAL INDENTURES

Section 9.01  Section Supplemental Indentures Without Consent of Holders.

     Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of the following purposes:

(1)  to evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants of the Company herein and in
the Securities; or

(2)  to add to the covenants of the Company for the benefit of the Holders, or
to surrender any right or power herein conferred upon the Company; or

(3)  to make provision with respect to the conversion rights of Holders pursuant
to the requirements of Article XIII; or

                                      -45-
<PAGE>

(4)  to cure any ambiguity, to correct or supplement any provision herein which
may be inconsistent with any other provision herein, or to make any other
provisions with respect to matters or questions arising under this Indenture
which shall not be inconsistent with the provisions of this Indenture; provided,
that such action pursuant to this clause (4) shall not adversely affect the
interests of the Holders of the Securities or, so long as any of the Preferred
Securities shall remain outstanding, the holders of the Preferred Securities;

(5)  to comply with the requirements of the Commission in order to effect or
maintain the qualification of this Indenture under the Trust Indenture Act; or

(6)  to make provision for transfer procedures, certification, book-entry
provisions, the form of restricted securities legends, if any, to be placed on
Securities, and all other matters required pursuant to Section 3.06(b) or
otherwise necessary, desirable or appropriate in connection with the issuance of
Securities to holders of Preferred Securities in the event of a distribution of
Securities by the Trust if a Tax Event or Investment Company Event (as defined
in the Declaration) occurs and is continuing.

Section 9.02  Supplemental Indentures with Consent of Holders.

     With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities, by Act of said Holders delivered to the
Company and the Trustee, the Company, when authorized by a Board Resolution, and
the Trustee may enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of modifying in any manner the rights
of the Holders under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,

(1)  extend the Stated Maturity of the principal of, or any installment of
interest (including any Additional Payments) on, such Security, or reduce the
principal amount thereof, or reduce the rate or extend the time for payment of
interest thereon, or reduce any premium payable upon the redemption thereof, or
change the place of payment where, or the coin or currency in which, such
Security or interest thereon is payable, or impair the right to institute suit
for the enforcement of any such payment on or after the Stated Maturity thereof
(or, in the case of redemption, on or after the Redemption Date), or adversely
affect the right to convert such Security as provided in Article XIII (except as
permitted by Section 9.01(3)), or modify the provisions of this Indenture with
respect to the subordination of the Securities in a manner adverse to the
Holders,

(2)  reduce the percentage in principal amount of the Outstanding Securities,
the consent of whose Holders is required for any such supplemental indenture, or
the consent of whose Holders is required for any waiver of compliance with
certain provisions of this Indenture or certain defaults hereunder and their
consequences provided for in this Indenture, or

                                      -46-
<PAGE>

(3)  modify any of the provisions of this Section or Section 5.13, except to
increase any such percentage or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the Holder of each
Outstanding Security affected thereby.

     Notwithstanding anything to the contrary in this Indenture or the
Declaration, if the Property Trustee is the sole holder of the Securities, so
long as any of the Preferred Securities remains outstanding, no amendment shall
be made that adversely affects the holders of such Preferred Securities, and no
termination of this Indenture shall occur, and no waiver of any Event of Default
or compliance with any covenant under this Indenture shall be effective, without
the prior consent of the holders of the percentage of the aggregate liquidation
amount of such Preferred Securities then outstanding which is at least equal to
the percentage of aggregate stated principal amount of the Outstanding
Securities as shall be required under this Indenture to effect any such
amendment, termination or waiver.

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

     The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Persons entitled to consent to any indenture
supplemental hereto. If a record date is fixed, the Holders on such record date,
or their duly designated proxies, and only such Persons, shall be entitled to
consent to such supplemental indenture, whether or not such Holders remain
Holders after such record date; provided, that unless such consent shall have
become effective by virtue of the requisite percentage having been obtained
prior to the date which is 90 days after such record date, any such consent
previously given shall automatically and without further action by any Holder be
canceled and of no further effect.

Section 9.03  Execution of Supplemental Indentures.

     In executing or accepting the additional trusts created by any supplemental
indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and
(subject to Section 6.01) shall be fully protected in relying upon, an Opinion
of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.

Section 9.04  Effect of Supplemental Indentures.

     Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby. No such supplemental indenture shall directly or
indirectly modify the provisions of Article XII in any manner which might
terminate or impair the rights of the Senior Debt pursuant to such subordination
provisions.

                                      -47-
<PAGE>

Section 9.05  Conformity with Trust Indenture Act.

     Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.

Section 9.06  Reference in Securities to Supplemental Indentures.

     Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture, may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.

                                   ARTICLE X

                   COVENANTS; REPRESENTATIONS AND WARRANTIES

Section 10.01  Payment of Principal and Interest.

     The Company will duly and punctually pay the principal of and interest on
the Securities in accordance with the terms of the Securities and this
Indenture.

Section 10.02  Maintenance of Office or Agency.

     The Company will maintain in the United States an office or agency where
Securities may be presented or surrendered for payment, where Securities may be
surrendered for registration of transfer, exchange or conversion, 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, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.

     The Company may also from time to time designate one or more other offices
or agencies (in the United States) 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 United States 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.

                                      -48-
<PAGE>

Section 10.03  Money for Security Payments to Be Held in Trust.

     If the Company shall at any time act as its own Paying Agent, it will, on
or before each due date of the principal of or interest on any of the
Securities, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal or interest so becoming due until
such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action or failure so to
act.

     Whenever the Company shall have one or more Paying Agents, it will, prior
to each due date of the principal of or interest on any Securities, deposit with
a Paying Agent a sum sufficient to pay the principal or interest so becoming
due, such sum to be held as provided by the Trust Indenture Act, and (unless
such Paying Agent is the Trustee) the Company will promptly notify the Trustee
of its action or failure so to act.

     The Company will cause each Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section, that such Paying
Agent will (i) comply with the provisions of the Trust Indenture Act applicable
to it as a Paying Agent and (ii) during the continuance of any default by the
Company (or any other obligor upon the Securities) in the making of any payment
in respect of the Securities, upon the written request of the Trustee, forthwith
pay to the Trustee all sums held in trust by such Paying Agent as such.

     The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.

     Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of or interest on any
Security and remaining unclaimed for two years after such principal or interest
has become due and payable, shall be paid to the Company on Company Request, or
(if then held by the Company) shall be discharged from such trust; and the
Holder of any such Security shall thereafter, as an unsecured general creditor,
look only to the Company for payment thereof, and all liability of the Trustee
or such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease.

Section 10.04  Statement by Officers as to Default.

     The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the
material terms, provisions and conditions of this Indenture (without regard to
any period of grace or requirement of notice provided hereunder) and, if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.

                                      -49-
<PAGE>

Section 10.05  Limitation on Dividends; Transactions with Affiliates; Covenants
               as to the Trust.

(a)  If at such time (x) there shall have occurred an Event of Default, (y) the
Company shall be in default with respect to its payment of any obligations under
the Guarantee or (z) the Company shall have given notice of its election to
begin a Deferral Period as provided herein and shall not have rescinded such
notice, or such Deferral Period shall be continuing, the Company covenants that
the Company shall not (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
the Company's capital stock (which includes common and preferred stock) other
than stock dividends which consist of stock of the same class as that on which
the dividends are being paid, (ii) make any payment of principal, interest or
premium, if any, on or repay or repurchase or redeem any debt securities of the
Company that rank pari passu with or junior in interest to the Securities or
(iii) make any guarantee payments with respect to any guarantee by the Company
of the debt securities of any subsidiary of the Company if such guarantee ranks
pari passu with or junior in interest to the Securities (in each case, other
than (A) dividends or distributions in Common Stock, (B) any declaration of a
dividend in connection with the implementation of a stockholders' rights plan,
or the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (C) payments under the
Guarantee, (D) purchases or acquisitions of shares of the Common Stock in
connection with the satisfaction by the Company of its obligations under any
employee benefit plan or any other contractual obligation of the Company (other
than a contractual obligation ranking pari passu with or junior in interest to
the Securities), (E) as a result of a reclassification of the Company's capital
stock or the exchange or conversion of one class or series of the Company's
capital stock for another class or series of the Company's capital stock or (F)
the purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged).

(b)  The Company also covenants and agrees (i) for so long as the Preferred
Securities remain outstanding, (a) to maintain directly or indirectly 100%
ownership of the Common Securities, provided that certain successor Persons in
transactions which are permitted by Article VIII may succeed to the Company's
ownership of the Common Securities, (b) not to voluntarily terminate, wind-up or
liquidate the Trust, except in connection with (I) a distribution of the
Securities to the holders of the Trust Securities in liquidation of the Trust,
(II) the redemption of all Trust Securities or (iii) certain mergers,
consolidations or amalgamations permitted by the Declaration, and (c) not to
convert Securities except pursuant to a notice of conversion delivered to the
Conversion Agent by a Holder or by a holder of Common Securities, (ii) to use
its reasonable efforts, consistent with the terms and provisions of the
Declaration, to cause the Trust to remain classified as a grantor trust and not
taxable as a corporation for United States federal income tax purposes, (iii) to
maintain the reservation for issuance of the number of shares of Common Stock
that would be required from time to time upon the conversion of all the
Securities then outstanding, (iv) to deliver shares of Common Stock upon an
election by a Holder to convert such Preferred Securities into or for Common
Stock, and (v) to honor all obligations relating to the conversion or exchange
of Preferred Securities into or for Common Stock or Securities.

                                      -50-
<PAGE>

Section 10.06  Payment of Expenses of the Trust.

     In connection with the offering, sale and issuance of the Securities to the
Property Trustee in connection with the sale of the Trust Securities by the
Trust, the Company shall:

(a)  pay for all costs, fees and expenses relating to the offering, sale and
issuance of the Securities, including commissions to the Initial Purchasers
payable pursuant to the Purchase Agreement and compensation of the Trustee under
the Indenture in accordance with the provisions of Section 6.07 of the
Indenture;

(b)  be responsible for and pay for all debts and obligations (other than with
respect to the Trust Securities) of the Trust, pay for all costs and expenses of
the Trust (including, but not limited to, costs and expenses relating to the
organization of the Trust, the offering, sale and issuance of the Trust
Securities (including commissions to the Initial Purchasers in connection
therewith), the fees and expenses of the Property Trustee and the Delaware
Trustee, the costs and expenses relating to the operation of the Trust,
including without limitation, costs and expenses of accountants, attorneys,
statistical or bookkeeping services, expenses for printing and engraving and
computing or accounting equipment, paying agent(s), registrar(s), transfer
agent(s), duplicating, travel and telephone and other telecommunications
expenses and costs and expenses incurred in connection with the acquisition,
financing, and disposition of Trust assets); and

(c)  pay any and all taxes (other than United States withholding taxes
attributable to the Trust or its assets) and all liabilities, costs and expenses
with respect to such taxes of the Trust.

Section 10.07  Registration Rights.

     The holders of the Preferred Securities, the Securities, the Guarantee and
the shares of Common Stock of the Company issuable upon conversion of the
Securities (collectively, the "Registrable Securities") are entitled to the
benefits of a Registration Rights Agreement, dated as of December 15, 1999,
among the Company, the Trust and the Initial Purchasers (the "Registration
Rights Agreement"). Pursuant to the Registration Rights Agreement the Company
and the Trust have agreed for the benefit of the holders of the Registrable
Securities that (i) they will, at the Company's sole expense, prior to February
15, 2000, file a shelf registration statement (the "Shelf Registration
Statement") with the Commission with respect to resales of the Registrable
Securities, (ii) they will use their best efforts to cause such Shelf
Registration Statement to be declared effective under the Securities Act prior
to May 15, 2000 and (iii) they will use their best efforts to maintain such
Registration Statement continuously effective under the Securities Act (subject
to certain exceptions under the Registration Rights Agreement) until the second
anniversary of the effectiveness of the Shelf Registration Statement or such
other period as shall be required under Rule 144(k) thereunder or any successor
rule or regulation thereto or such earlier date as is provided in the
Registration Rights Agreement. If the Company fails to comply with either of
clauses (ii) or (iii) above, subject to certain exceptions provided in the
Registration Rights Agreement, (a "Registration Default") then, at such time,
the Applicable Rate will increase by 50 basis points (.50%). Such increase will
remain in effect 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, on which date the interest rate on the Securities will revert
to the interest rate originally borne by the Securities.

                                      -51-
<PAGE>

Section 10.08  Offering Document Amendment or Supplement.

     The Trust and the Company will advise each Initial Purchaser promptly of
any proposal to amend or supplement the final confidential offering circular
dated December 9, 1999 (the "Offering Document"), and will not effect such
amendment or supplementation without the Initial Purchasers' consent.  If, at
any time, any event occurs as a result of which the Offering Document as then
amended or supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it is necessary at any such time to amend or supplement the
Offering Document to comply with any applicable law, the Trust and the Company
promptly will notify each Initial Purchaser of such event and promptly will
prepare, at their own expense, an amendment or supplement which will correct
such statement or omission or effect such compliance.  Neither the Initial
Purchasers' consent to nor the Initial Purchasers' delivery to offerees or
investors of, any such amendment or supplement shall constitute a waiver of any
of the conditions set forth in Section 6 of the Purchase Agreement.

                                  ARTICLE XI

                           REDEMPTION OF SECURITIES

Section 11.01  Optional Redemption.

     The Company shall have the right to redeem the Securities (an "Optional
Redemption") in whole or in part, at any time or from time to time on or after
December 20, 2002, at a Redemption Price (the "Optional Redemption Price") equal
to the prices per $50 principal amount of Securities set forth in the following
table, plus accrued and unpaid interest, including Additional Payments, if any,
to the Redemption Date, if redeemed during the 12-month period ending on
December 19:

<TABLE>
<CAPTION>
                             Price Per $50
Year                        Principal Amount
----                        ----------------
<S>                        <C>
2003                             $51.81
2004                             $51.21
2005                             $50.60
2006                             $50.00
</TABLE>

and thereafter at $50 per $50 principal amount of the Securities plus, in each
case, any accrued and unpaid interest, including Additional Payments, if any, to
the Redemption Date.

11.02  Tax Event Redemption.

     If a Tax Event has occurred and is continuing and:

(1)  the Company has received a Redemption Tax Opinion; or

                                      -52-
<PAGE>

(2)  the Issuer Trustees shall have been informed by nationally recognized
independent tax counsel (reasonably acceptable to the Issuer Trustees)
experienced in such matters that a No Recognition Opinion cannot be delivered,

then the Company shall have the right upon not less than 20 days, nor more than
60 days, notice to the Holders of the Securities to redeem the Securities in
whole, but not in part, for cash at $50 per $50 principal amount of the
Securities plus accrued and unpaid interest, including Additional Payments, if
any, to the Redemption Date, within 90 days following the occurrence of such Tax
Event (the "90 Day Period"); provided, however, that if, at the time there is
available to the Company or the Trust the opportunity to eliminate, within the
90 Day Period, the Tax Event by taking some ministerial action, including, but
not limited to, filing a form or making an election, or pursuing some other
similar reasonable measure which, in the sole judgment of the Company, will have
no adverse effect on the Company, the Trust or the Holders of the Preferred
Securities and will involve no material cost, then the Company or the Trust
shall pursue such ministerial action or other measure in lieu of redemption; and
provided further that the Company shall have no right to redeem the Securities
while the Trust is pursuing any ministerial action or other similar measure
pursuant to its obligations under the Declaration.

     If the Company opts not to redeem the Securities pursuant to this Section
11.02, the Company shall be required to pay Additional Sums in respect of the
Securities pursuant to Section 3.01 for so long as (i) a Tax Event has occurred
and is continuing and (ii) the Property Trustee is the sole Holder of the
Securities.

Section 11.03  Selection by Trustee of Securities to Be Redeemed.

     If less than all the Securities are to be redeemed (unless such redemption
affects only a single Security), the particular Securities to be redeemed shall
be selected not more than 60 days prior to the Redemption Date by the Trustee by
such method as the Trustee shall deem fair and appropriate, from the Outstanding
Securities not previously called for redemption. Such selection method may
provide for the selection for redemption of portions (equal to $50 or any
integral multiple thereof) of the principal amount of the Securities.

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

     The provisions of the two preceding paragraphs shall not apply with respect
to any redemption affecting only a single Security, whether such Security is to
be redeemed in whole or in part. In the case of any such redemption in part, the
unredeemed portion of the principal amount of the Security shall be in an
authorized denomination (which shall not be less than the minimum authorized
denomination) for such Security.

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

                                      -53-
<PAGE>

Section 11.04  Notice of Redemption.

     Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 20 nor more than 60 days prior to the Redemption Date, to
each Holder of Securities to be redeemed, at such Holder's address appearing in
the Security Register.

     All notices of redemption given pursuant to this Article XI shall identify
the Securities to be redeemed (including, if relevant, CUSIP number) and shall
state:

(1)  the Redemption Date,

(2)  the Redemption Price,

(3)  that on the Redemption Date the Redemption Price will become due and
payable upon each such Security to be redeemed and that interest thereon will
cease to accrue on and after said date,

(4)  the place or places where such Securities are to be surrendered for payment
of the Redemption Price, and

(5)  the date on which the right to convert the Securities to be redeemed will
terminate and the places where such Securities may be surrendered for
conversion.

     Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.

Section 11.05  Deposit of Redemption Price.

     Prior to 12:00 noon on any Redemption Date, the Company shall deposit with
the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 10.03) an
amount of money sufficient to pay the Redemption Price of, and (except if the
Redemption Date shall be an Interest Payment Date) accrued interest on, all the
Securities which are to be redeemed on that date.

     If any Security called for redemption is converted, any money deposited
with the Trustee or with any Paying Agent or so segregated and held in trust for
the redemption of such Security shall (subject to any right of the Holder of
such Security or any Predecessor Security to receive interest as provided in the
last paragraph of Section 3.08) be paid to the Company upon Company Request or,
if then held by the Company, shall be discharged from such trust.

Section 11.06  Securities Payable on Redemption Date.

     Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price

                                      -54-
<PAGE>

and accrued interest) such Securities shall cease to bear interest. Upon
surrender of any such Security for redemption in accordance with said notice,
such Security shall be paid by the Company at the Redemption Price; provided,
however, that installments of interest whose Stated Maturity is on or prior to
the Redemption Date shall be payable to the Holders of such Securities, or one
or more Predecessor Securities, registered as such at the close of business on
the relevant Record Dates according to the terms and the provisions of Section
3.08.

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

Section 11.07  Securities Redeemed in Part.

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

(b)  If a partial redemption of the Securities would result in the delisting of
the Preferred Securities issued by the Trust from any national securities
exchange or other organization on which the Preferred Securities are listed, the
Company shall not be permitted to effect such partial redemption and may only
redeem the Securities in whole.

(c)  Any Security which is to be redeemed only in part shall be surrendered at a
place of payment therefor (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and make available for delivery to the Holder of such
Security without service charge, a new Security or Securities, of any authorized
denomination as requested by such Holder, in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Security so
surrendered. If a Global Security is surrendered, such new Security will
(subject to Section 3.06) also be a new Global Security.

                                  ARTICLE XII

                          SUBORDINATION OF SECURITIES

Section 12.01  Agreement to Subordinate.

     The Company covenants and agrees, and each Holder of Securities by such
Holder's acceptance thereof likewise covenants and agrees, that all Securities
shall be issued subject to the provisions of this Article XII; and each Holder
of a Security, whether upon original issue or upon transfer or assignment
thereof, accepts and agrees to be bound by such provisions. The payment by the
Company of the principal of, premium, if any, and interest (including Additional
Payments) on

                                      -55-
<PAGE>

all Securities issued hereunder shall, to the extent and in the manner
hereinafter set forth, be subordinated and junior in right of payment to the
prior payment in full of all Senior Debt, whether outstanding at the date of
this Indenture or thereafter incurred; provided, however, that no provision of
this Article XII shall prevent the occurrence of any default or Event of Default
hereunder.

Section 12.02  Default on Senior Debt.

     In the event and during the continuation of any default by the Company in
the payment of principal, premium, interest or any other payment due on any
Senior Debt continuing beyond the period of grace, if any, specified in the
instrument evidencing such Senior Debt, unless and until such default shall have
been cured or waived or shall have ceased to exist, and in the event that the
maturity of any Senior Debt has been accelerated because of a default, then no
payment shall be made by the Company with respect to the principal of (including
redemption payments), premium, if any, or interest on the Securities.

     In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee when such payment is prohibited by the preceding
paragraph of this Section 12.02, subject to Section 12.06, such payment shall be
held in trust for the benefit of, and shall be paid over or delivered to, the
holders of Senior Debt or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior Debt may have
been issued, as their respective interests may appear, but only to the extent
that the holders of the Senior Debt (or their representative or representatives
or a trustee) notify the Trustee in writing within 90 days of such payment of
the amounts then due and owing on the Senior Debt and only the amounts specified
in such notice to the Trustee shall be paid to the holders of Senior Debt.

Section 12.03  Liquidation; Dissolution; Bankruptcy.

     Upon any payment by the Company or distribution of assets of the Company of
any kind or character, whether in cash, property or securities, to creditors
upon any dissolution or winding up or liquidation or reorganization of the
Company, whether voluntary or involuntary, or in bankruptcy, insolvency,
receivership or other proceedings, all amounts (including principal, premium, if
any, and interest) due or to become due upon all Senior Debt (including any
interest accruing subsequent to the filing of a petition for bankruptcy
regardless of whether such interest is an allowed claim in the bankruptcy
proceeding) shall first be paid in full in cash, or payment thereof provided for
in money in accordance with and to the extent permitted by the terms of such
Senior Debt, before any payment is made on account of the principal (and
premium, if any) or interest on the Securities; and upon any such dissolution or
winding up or liquidation or reorganization, any payment by the Company, or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, to which the Holders of the Securities or the Trustee
would be entitled, except for the provisions of this Article XII, shall be paid
by the Company or by any receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, or by the Holders of
the Securities or by the Trustee under this Indenture if received by them or it,
directly to the holders of Senior Debt (pro rata to such holders on the basis of
the respective amounts of Senior Debt held by such holders, as calculated by the
Company) or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing such
Senior Debt may have been issued, as their respective interests may appear, to
the extent necessary to pay

                                      -56-
<PAGE>

such Senior Debt in full, in cash or in money's worth in accordance with and to
the extent permitted by the terms of such Senior Debt, after giving effect to
any concurrent payment or distribution to or for the holders of such Senior
Debt, before any payment or distribution is made to the Holders of Securities or
to the Trustee.

     In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing shall be received by the
Trustee or the Holders of the Securities before all Senior Debt is paid in full
in cash, or provision is made for such payment in money in accordance and to the
extent permitted by the terms of such Senior Debt subject to Section 12.06, such
payment or distribution shall be held in trust for the benefit of and shall be
paid over or delivered to the holders of Senior Debt or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing such Senior Debt may have been issued, and
their respective interests may appear, as calculated by the Company, for
application to the payment of all Senior Debt remaining unpaid to the extent
necessary to pay such Senior Debt in full in cash or in money's worth in
accordance with and to the extent permitted by the terms of such Senior Debt,
after giving effect to any concurrent payment or distribution to or for the
holders of such Senior Debt.

     For purposes of this Article XII, the words, "cash, property or securities"
shall not be deemed to include shares of stock of the Company as reorganized or
readjusted, or securities of the Company or any other corporation provided for
by a plan of reorganization or readjustment, the payment of which is
subordinated at least to the extent provided in this Article XII with respect to
the Securities to the payment of all Senior Debt which may at the time be
outstanding; provided that (i) such Senior Debt is assumed by the new
corporation, if any, resulting from any such reorganization or readjustment, and
(ii) the rights of the holders of such Senior Debt are not, without the consent
of such holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or the merger of the Company with or into,
another Person or the liquidation or dissolution of the Company following the
conveyance, transfer or lease of all or substantially all its properties and
assets on a consolidated basis to another Person upon the terms and conditions
provided for in Article VIII hereof shall not be deemed a dissolution, winding
up, liquidation or reorganization for the purposes of this Section 12.03 if such
other Person shall, as a part of such consolidation, merger, conveyance,
transfer or lease, comply with the conditions stated in Article VIII hereof.
Nothing in Section 12.02 or in this Section 12.03 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 6.07 hereof.

Section 12.04  Subrogation.

     Subject to the prior payment in full of all Senior Debt in cash or in
money's worth in accordance with and to the extent permitted by the terms of
such Senior Debt, the rights of the Holders of the Securities shall be
subrogated to the rights of the holders of such Senior Debt to receive payments
or distributions of cash, property or securities of the Company, as the case may
be, applicable to such Senior Debt until the principal of (and premium, if any)
and interest on the Securities shall be paid in full; and, for the purposes of
such subrogation, no payments or distributions to the holders of such Senior
Debt of any cash, property or securities to which the Holders of the Securities
or the Trustee would be entitled except for the provisions of this Article XII,
and no payment pursuant to the provisions of this Article XII, to or for the
benefit of the holders

                                      -57-
<PAGE>

of such Senior Debt by Holders of the Securities or the Trustee, shall, as
between the Company, its creditors other than holders of Senior Debt, and the
Holders of the Securities, be deemed to be a payment by the Company to or on
account of such Senior Debt. It is understood that the provisions of this
Article XII are and are intended solely for the purposes of defining the
relative rights of the Holders of the Securities, on the one hand, and the
holders of such Senior Debt on the other hand.

     Nothing contained in this Article XII or elsewhere in this Indenture or in
the Securities is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Debt, and the Holders of the
Securities, the obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the Securities the principal of (and premium, if any)
and interest on the Securities as and when the same shall become due and payable
in accordance with their terms, or is intended to or shall affect the relative
rights of the Holders of the Securities and creditors of the Company, as the
case may be, other than the holders of Senior Debt, nor shall anything herein or
therein prevent the Trustee or the Holder of any Security from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article XII of the holders
of such Senior Debt in respect of cash, property or securities of the Company,
as the case may be, received upon the exercise of any such remedy.

     Upon any payment or distribution of assets of the Company referred to in
this Article XII, the Trustee, subject to the provisions of Section 6.03, and
the Holders of the Securities shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which such dissolution, winding
up, liquidation or reorganization proceedings are pending, or a certificate of
the receiver, trustee in bankruptcy, liquidation trustee, agent or other Person
making such payment or distribution, delivered to the Trustee or to the Holders
of the Securities, for the purposes of ascertaining the Persons entitled to
participate in such distribution, the holders of the Senior Debt and other
indebtedness of the Company, as the case may be, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article XII.

Section 12.05  Trustee to Effectuate Subordination.

     Each Holder of Securities by such Holder's acceptance thereof authorizes
and directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article XII and appoints the Trustee as such Holder's attorney-in-fact for any
and all such purposes.

Section 12.06  Notice by the Company.

     The Company shall give prompt written notice to a Responsible Officer of
the Trustee of any fact known to the Company which would prohibit the making of
any payment of monies to or by the Trustee in respect of the Securities pursuant
to the provisions of this Article XII. Notwithstanding the provisions of this
Article XII or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment of monies to or by the Trustee in respect of the
Securities pursuant to the provisions of this Article XII unless and until a
Responsible Officer of the Trustee shall have received written notice thereof at
the Corporate Trust Office of the Trustee from the Company or a holder or
holders of

                                      -58-
<PAGE>

Senior Debt or from any trustee therefor; and before the receipt of any such
written notice, the Trustee, subject to the provisions of Section 6.03 hereof,
shall be entitled in all respects to assume that no such facts exist; provided,
however, that if the Trustee shall not have received the notice provided for in
this Section 12.06 at least five Business Days prior to the date upon which by
the terms hereof any money may become payable for any purpose (including,
without limitation, the payment of the principal of (and premium, if any) or
interest on any Security), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive such
money and to apply the same to the purposes for which it was received, and shall
not be affected by any notice to the contrary which may be received by it within
five Business Days prior to such date.

     The Trustee, subject to the provisions of Section 6.03, shall be entitled
to rely on the delivery to it of a written notice by a Person representing
himself to be a holder of Senior Debt (or a trustee on behalf of such holder) to
establish that such notice has been given by a holder of such Senior Debt or a
trustee on behalf of any such holder or holders. In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any Person as a holder of Senior Debt to participate in any payment or
distribution pursuant to this Article XII, the Trustee may request such Person
to furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of Senior Debt held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the right of such Person under this Article XII, and, if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.

Section 12.07  Rights of the Trustee; Holders of Senior Debt.

     The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article XII in respect of any Senior Debt at any time held by
it, to the same extent as any other holder of Senior Debt, and nothing in this
Indenture shall deprive the Trustee of any of its rights as such holder.

     With respect to the holders of Senior Debt of the Company, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are set forth in this Article XII, and no implied covenants or obligations
with respect to the holders of such Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of such Senior Debt and, subject to the provisions
of Section 6.03, the Trustee shall not be liable to any holder of such Senior
Debt if it shall pay over or deliver to Holders of Securities, the Company or
any other Person money or assets to which any holder of such Senior Debt shall
be entitled by virtue of this Article XII or otherwise, unless such payment is
made as a result of the willful misconduct or gross negligence of the Trustee.

Section 12.08  Subordination May Not Be Impaired.

     No right of any present or future holder of any Senior Debt to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any

                                      -59-
<PAGE>

noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof which any such holder may have or
otherwise be charged with.

     Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Debt may, at any time and from time to time, without the
consent of or notice to the Trustee or the Holders of the Securities, without
incurring responsibility to the holders of the Securities and without impairing
or releasing the subordination provided in this Article XII or the obligations
hereunder of the Holders of the Securities to the holders of Senior Debt, do any
one or more of the following: (i) change the manner, place or terms of payment
or extend the time of payment of, or renew or alter, such Senior Debt, or
otherwise amend or supplement in any manner such Senior Debt or any instrument
evidencing the same or any agreement under which such Senior Debt is
outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing such Senior Debt; (iii) release any
Person liable in any manner for the collection of such Senior Debt; and (iv)
exercise or refrain from exercising any rights against the Company and any other
Person.

                                 ARTICLE XIII

                           CONVERSION OF SECURITIES

Section 13.01  Conversion Rights.

     Subject to and upon compliance with the provisions of this Article, the
Securities are convertible, at the option of the Holder, at any time prior to
5:00 p.m. New York City time on the Business Day immediately preceding December
15, 2029 into fully paid and nonassessable shares of Common Stock at an initial
conversion rate of 1.3986 shares of Common Stock for each $50 in aggregate
principal amount of Securities (the "Initial Conversion Ratio") (equal to a
conversion price of $35.75 principal amount of Securities per share of Common
Stock (the "Initial Conversion Price")). The conversion ratio and the equivalent
conversion price in effect at any given time are known as the "Applicable
Conversion Ratio" and the "Applicable Conversion Price", respectively, and are
subject to adjustment as described in this Article XIII. A Holder of Securities
may convert any portion of the principal amount of the Securities into that
number of fully paid and nonassessable shares of Common Stock (calculated as to
each conversion to the nearest 1/100th of a share) obtained by dividing the
principal amount of the Securities to be converted by the Applicable Conversion
Ratio. In case a Security or portion thereof is called for redemption, such
conversion right in respect of the Security or portion so called shall expire at
the close of the Business Day immediately preceding the corresponding Redemption
Date, unless the Company defaults in making the payment due upon redemption.

Section 13.02  Conversion Procedures.

(a)  In order to convert all or a portion of the Securities, the Holder thereof
shall deliver to the Conversion Agent an irrevocable Notice of Conversion
setting forth the principal amount of Securities to be converted, together with
the name or names, if other than the Holder, in which the shares of Common Stock
should be issued upon conversion and, if such Securities are definitive
Securities, surrender to the Conversion Agent the Securities to be converted,
duly endorsed or assigned to the Company or in blank. In addition, a holder of
Preferred Securities may exercise

                                      -60-
<PAGE>

its right under the Declaration to convert such Preferred Securities into Common
Stock by delivering to the Conversion Agent an irrevocable Notice of Conversion
setting forth the information called for by the preceding sentence and directing
the Conversion Agent (i) to exchange such Preferred Security for a portion of
the Securities held by the Trust (at an exchange rate of $50 principal amount of
Securities for each Preferred Security) and (ii) to immediately convert such
Securities, on behalf of such holder, into Common Stock of the Company pursuant
to this Article XIII and, if such Preferred Securities are in definitive form,
surrendering such Preferred Securities, duly endorsed or assigned to the Company
or in blank. So long as any Preferred Securities are outstanding, the Trust
shall not convert any Securities except pursuant to a Notice of Conversion duly
executed and delivered to the Conversion Agent by a holder of Preferred
Securities.

     If a Notice of Conversion is delivered on or after the Regular Record Date
and prior to the subsequent Interest Payment Date, the Holder will be entitled
to receive the interest payable on the subsequent Interest Payment Date on the
portion of Securities to be converted notwithstanding the conversion thereof
prior to such Interest Payment Date. Except as otherwise provided in the
immediately preceding sentence, in the case of any Security which is converted,
interest whose Stated Maturity is after the date of conversion of such Security
shall not be payable, and the Company shall not make nor be required to make any
other payment, adjustment or allowance with respect to accrued but unpaid
interest on the Securities being converted, which shall be deemed to be paid in
full. Each conversion shall be deemed to have been effected immediately prior to
the close of business on the day on which the Notice of Conversion was received
(the "Conversion Date") by the Conversion Agent from the Holder or from a holder
of the Preferred Securities effecting a conversion thereof pursuant to its
conversion rights under the Declaration, as the case may be. The Person or
Persons entitled to receive the Common Stock issuable upon such conversion shall
be treated for all purposes as the record holder or holders of such Common Stock
as of the Conversion Date. As promptly as practicable on or after the Conversion
Date, the Company shall issue and deliver at the office of the Conversion Agent,
unless otherwise directed by the Holder in the Notice of Conversion, a
certificate or certificates for the number of full shares of Common Stock
issuable upon such conversion, together with the cash payment, if any, in lieu
of any fraction of any share to the Person or Persons entitled to receive the
same. The Conversion Agent shall deliver such certificate or certificates to
such Person or Persons.

(b)  Subject to any right of the Holder of such Security or any Predecessor
Security to receive interest as provided in the last paragraph of Section 3.08
and the second paragraph of clause (a) of Section 13.02, the Company's delivery
upon conversion of the whole number of shares of Common Stock into which the
Securities are convertible (together with the cash payment, if any, in lieu of
fractional shares) shall be deemed to satisfy the Company's obligation to pay
the principal amount at Maturity of the portion of Securities so converted and
any unpaid interest (including Compounded Interest and Additional Sums) accrued
on such Securities at the time of such conversion.

(c)  No fractional shares of Common Stock will be issued as a result of
conversion, but in lieu thereof, the Company shall pay to the Conversion Agent a
cash adjustment in an amount equal to the same fraction of the Closing Price of
such fractional interest on the date on which the Securities or Preferred
Securities, as the case may be, were duly surrendered to the Conversion Agent
for conversion, or, if such day is not a Trading Day, on the next Trading Day,
and

                                      -61-
<PAGE>

the Conversion Agent in turn will make such payment, if any, to the Holder of
the Securities or the holder of the Preferred Securities so converted.

(d)  In the event of the conversion of any Security in part only, a new Security
or Securities for the unconverted portion thereof will be issued in the name of
the Holder thereof upon the cancellation thereof in accordance with Section
3.06.

(e)  In effecting the conversion transactions described in this Section, the
Conversion Agent is acting as agent of the holders of Preferred Securities (in
the exchange of Preferred Securities for Securities) and as agent of the Holders
of Securities (in the conversion of Securities into Common Stock), as the case
may be, directing it to effect such conversion transactions. The Conversion
Agent is hereby authorized (x) if the Trust exists, (i) to exchange Securities
held by or on behalf of the Trust from time to time for Preferred Securities in
connection with the conversion of such Preferred Securities in accordance with
this Article XIII and (ii) to convert all or a portion of the Securities into
Common Stock and thereupon to deliver such shares of Common Stock in accordance
with the provisions of this Article XIII and to deliver to the Trust a new
Security or Securities for any resulting unconverted to exchange Securities held
by the Holders in connection with the conversion of such Securities in
accordance with this Article XIII and (y) if the Trust has been dissolved and
the Securities have been distributed to the holders of the Preferred Securities,
to convert all or a portion of the Securities into Common Stock and thereupon to
deliver such shares of Common Stock in accordance with the provisions of this
Article XIII and to deliver to such Holders a new Security or Securities for any
resulting unconverted principal amount.

(f)  All shares of Common Stock delivered upon any conversion of Restricted
Securities shall bear a restrictive legend substantially in the form of the
legend required to be set forth on such Securities and shall be subject to the
restrictions on transfer provided in such legend and in Section 3.06(b) hereof.
Neither the Trustee nor the Conversion Agent shall have any responsibility for
the inclusion or content of any such restrictive legend on such Common Stock;
provided, however, that the Trustee or the Conversion Agent shall have provided
to the Company or to the Company's transfer agent for such Common Stock, prior
to or concurrently with a request to the Company to deliver to such Conversion
Agent certificates for such Common Stock, written notice that the Securities
delivered for conversion are Restricted Securities.

Section 13.03  Conversion Price Adjustments.

     The Applicable Conversion Price shall be subject to adjustment (without
duplication) from time to time as follows:

(i)  In case the Company shall pay a dividend or make a distribution on the
Common Stock exclusively in Common Stock, the Applicable Conversion Price in
effect at the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution shall be reduced by multiplying such Applicable Conversion Price by
a fraction of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such determination
and the denominator shall be the sum of such number of shares and the total
number of shares constituting such dividend or other distribution, such
reduction

                                      -62-
<PAGE>

to become effective immediately after the opening of business on the day
following the date fixed for such determination. For the purposes of this
subparagraph (i), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company.

     In the event that such dividend or distribution is not so paid or made, the
Applicable Conversion Price shall again be adjusted to be the Applicable
Conversion Price which would then be in effect if such dividend or distribution
had not occurred.

(ii)  In case the Company shall pay or make a dividend or other distribution on
its Common Stock consisting exclusively of, or shall otherwise issue to all
holders of its Common Stock, rights or warrants, in each case entitling the
holders thereof to subscribe for or purchase shares of Common Stock at a price
per share less than the current market price per share (determined as provided
in subparagraph (vii)) of the Common Stock on the date fixed for the
determination of stockholders entitled to receive such rights or warrants, the
Applicable Conversion Price in effect at the opening of business on the day
following the date fixed for such determination shall be reduced by multiplying
such Applicable Conversion Price by a fraction of which the numerator shall be
the number of shares of Common Stock outstanding at the close of business on the
date fixed for such determination plus the number of shares of Common Stock
which the aggregate of the offering price of the total number of shares of
Common Stock so offered for subscription or purchase would purchase at such
current market price and the denominator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase, such reduction to become effective immediately prior
to the opening of business on the day following the date fixed for such
determination. To the extent that rights are not so issued or shares of Common
Stock are not so delivered after the expiration of such rights or warrants, the
Applicable Conversion Price shall be readjusted to the Applicable Conversion
Price which would then be in effect if such date fixed for the determination of
stockholders entitled to receive such rights or warrants had not been fixed. For
the purposes of this subparagraph (ii), the number of shares of Common Stock at
any time outstanding shall not include shares held in the treasury of the
Company.

(iii)  In case outstanding shares of Common Stock shall be subdivided into a
greater number of shares of Common Stock, the Applicable Conversion Price in
effect at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately reduced and, conversely,
in case outstanding shares of Common Stock shall each be combined into a smaller
number of shares of Common Stock, the Applicable Conversion Price in effect at
the opening of business on the day following the day upon which such combination
becomes effective shall be proportionately increased, such reduction or
increase, as the case may be, to become effective immediately prior to the
opening of business on the day following the day upon which such subdivision or
combination becomes effective.

(iv)  Subject to the last sentence of this subparagraph (iv), in case the
Company shall, by dividend or otherwise, distribute to all holders of its Common
Stock

                                      -63-
<PAGE>

evidences of its indebtedness, shares of any class or series of capital stock,
cash or assets (including securities, but excluding any rights or warrants
referred to in subparagraph (ii) of this Section 13.03, any dividend or
distribution paid exclusively in cash and any dividend or distribution referred
to in subparagraph (i) of this Section 13.03), the Applicable Conversion Price
shall be reduced so that the same shall equal the price determined by
multiplying the Applicable Conversion Price in effect immediately prior to the
effectiveness of the Applicable Conversion Price reduction contemplated by this
subparagraph (iv) by a fraction of which the numerator shall be the current
market price per share (determined as provided in subparagraph (vii) of this
Section 13.03) of the Common Stock on the date fixed for the determination of
stockholders entitled to receive such distribution (the "Reference Date") less
the fair market value (as determined in good faith by the Board of Directors,
whose determination shall be conclusive and described in a resolution of the
Board of Directors), on the Reference Date, of the portion of the evidences of
indebtedness, shares of capital stock, cash and assets so distributed applicable
to one share of Common Stock and the denominator shall be such current market
price per share of the Common Stock, such reduction to become effective
immediately prior to the opening of business on the day following the Reference
Date. In the event that such dividend or distribution is not so paid or made,
the Applicable Conversion Price shall again be adjusted to be the Applicable
Conversion Price which would then be in effect if such dividend or distribution
had not occurred. For purposes of this subparagraph (iv), any dividend or
distribution that includes shares of Common Stock or rights or warrants to
subscribe for or purchase shares of Common Stock shall be deemed instead to be
(1) a dividend or distribution of the evidences of indebtedness, shares of
capital stock, cash or assets other than such shares of Common Stock or such
rights or warrants (making any Applicable Conversion Price reduction required by
this subparagraph (iv)) immediately followed by (2) a dividend or distribution
of such shares of Common Stock or such rights or warrants (making any further
Applicable Conversion Price reduction required by subparagraph (i) or (ii) of
this Section 13.03), except any shares of Common Stock included in such dividend
or distribution shall not be deemed "outstanding at the close of business on the
date fixed for such determination" within the meaning of subparagraph (i) of
this Section 13.03.

(v)  In case the Company shall pay or make a dividend or other distribution on
its Common Stock exclusively in cash (excluding (x) cash dividends to the extent
that they do not exceed the per share amount of the smallest of the immediately
four preceding quarterly cash dividends (as adjusted to appropriately reflect
any of the events referred to in subparagraphs (i), (ii), (iii), (iv), (v) and
(vi)), and (y) cash dividends to the extent that the annualized per share amount
thereof does not exceed 12.5% of the current market price per share of the
Common Stock on the Trading Day next preceding the date of declaration of such
dividend, the Applicable Conversion Price shall be reduced so that the same
shall equal the price determined by multiplying the Applicable Conversion Price
in effect immediately prior to the effectiveness of the Applicable Conversion
Price reduction contemplated by this subparagraph (v) by a fraction of which the
numerator shall be the current market price per share (determined as provided in
subparagraph (vii) of this Section 13.03) of the Common Stock on the date fixed
for the payment of such distribution less the amount of cash so distributed and
not excluded as provided applicable to one share of Common Stock and the
denominator shall be such current market price per share of the Common Stock,
such

                                      -64-
<PAGE>

reduction to become effective immediately prior to the opening of business on
the day following the date fixed for the payment of such distribution; provided,
however, that in the event the portion of the cash so distributed applicable to
one share of Common Stock is equal to or greater than the current market price
per share (as defined in subparagraph (vii) of this Section 13.03) of the Common
Stock on the record date mentioned above, in lieu of the foregoing adjustment,
adequate provision shall be made so that each Holder of Securities shall have
the right to receive upon conversion the amount of cash such Holder would have
received had such Holder converted each Security immediately prior to the record
date for the distribution of the cash. In the event that such dividend or
distribution is not so paid or made, the Applicable Conversion Price shall again
be adjusted to be the Applicable Conversion Price which would then be in effect
if such record date had not been fixed.

(vi)  In case a tender or exchange offer (other than an odd-lot offer) made by
the Company or any Subsidiary of the Company for all or any portion of the
Company's Common Stock shall expire and such tender or exchange offer shall
involve the payment by the Company or such Subsidiary of consideration per share
of Common Stock having a fair market value (as determined in good faith by the
Board of Directors, whose determination shall be conclusive and described in a
resolution of the Board of Directors) at the last time (the "Expiration Time")
tenders or exchanges may be made pursuant to such tender or exchange offer (as
it shall have been amended) that exceeds 110% of the current market price per
share (determined as provided in subparagraph (vii) of this Section 13.03) of
the Common Stock on the Trading Day next succeeding the Expiration Time, the
Applicable Conversion Price shall be reduced so that the same shall equal the
price determined by multiplying the Applicable Conversion Price in effect
immediately prior to the effectiveness of the Applicable Conversion Price
reduction   contemplated by this subparagraph (vi) by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding (including
any tendered or exchanged shares) at the Expiration Time multiplied by the
current market price per share (determined as provided in subparagraph (vii) of
this Section 13.03) of the Common Stock on the Trading Day next succeeding the
Expiration Time and the denominator shall be the sum of (x) the fair market
value (determined as aforesaid) of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum specified in the terms
of the tender or exchange offer) of all shares validly tendered or exchanged and
not withdrawn as of the Expiration Time (the shares deemed so accepted, up to
any such maximum, being referred to as the "Purchased Shares") and (y) the
product of the number of shares of Common Stock outstanding (less any Purchased
Shares) at the Expiration Time and the current market price per share
(determined as provided in subparagraph (vii) of this Section 13.03) of the
Common Stock on the Trading Day next succeeding the Expiration Time, such
reduction to become effective immediately prior to the opening of business on
the day following the Expiration Time.

(vii)  For the purpose of any computation under subparagraphs (ii), (iv), (v)
and (vi) of this Section 13.03, the current market price per share of Common
Stock on any date in question shall be deemed to be the average of the daily
Closing Prices of the Common Stock for the ten consecutive Trading Days prior to
the earlier of the day in question and, if applicable, the day before the "ex"
date with respect to the issuance or distribution requiring such computation;
provided, however, that if another event occurs that would require an

                                      -65-
<PAGE>

adjustment pursuant to subparagraphs (i) through (vi) of this Section 13.03,
inclusive, the Board of Directors may make such adjustments to the Closing
Prices during such five Trading Day period as it deems appropriate to effectuate
the intent of the adjustments in this Section 13.03, in which case any such
determination by the Board of Directors shall be set forth in a Board Resolution
and shall be conclusive. For purposes of this paragraph, the term "ex" date, (1)
when used with respect to any issuance or distribution, means the first date on
which the Common Stock is quoted regular way on the New York Stock Exchange
Composite Tape or on such successor securities exchange on which the Common
Stock may be quoted or listed or in the relevant market from which the Closing
Prices were obtained without the right to receive such issuance or distribution,
and (2) when used with respect to any tender or exchange offer means the first
date on which the Common Stock is quoted regular way on such securities exchange
or in such market after the Expiration Time of such offer.

(viii)  The Company may make such reductions in the Applicable Conversion Price,
in addition to those required by subparagraphs (i), (ii), (iii), (iv), (v) and
(vi) of this Section 13.03, as it considers to be advisable to avoid or diminish
any income tax to holders of Common Stock or rights to purchase Common Stock
resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes.

(ix)  There shall also be no adjustment of the Applicable Conversion Price in
case of the issuance of any Common Stock (or securities convertible into or
exchangeable for Common Stock), except as specifically described above. If any
action would require adjustment of the Applicable Conversion Price, pursuant to
more than one of the anti-dilution provisions set forth in this Article XIII,
only one adjustment shall be made and such adjustment shall be the amount of
adjustment that has the highest absolute value to Holders. Furthermore, no
adjustment in the Applicable Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the
Applicable Conversion Price; provided, however, that any adjustments which by
reason of this sentence are not required to be made shall be carried forward and
taken into account in determining whether any subsequent adjustment shall be
required.

Section 13.04  Reclassification, Consolidation, Merger or Sale of Assets.

     In the event that the Company shall be a party to any transaction
(including without limitation (a) any recapitalization or reclassification of
the Common Stock (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination of the Common Stock), (b) any consolidation of the Company with, or
merger of the Company into, any other Person, any merger of another Person into
the Company (other than a merger which does not result in a reclassification,
conversion, exchange or cancellation of outstanding shares of Common Stock of
the Company), (c) any sale or transfer of all or substantially all of the assets
of the Company or (d) any compulsory share exchange) (each of the events in the
preceding clauses (a) through (d) being referred to as a "Company Transaction"),
in each case, as a result of which shares of Common Stock shall be converted
into the right to receive other securities, cash or other property, then lawful
provision shall be made as part of the terms of such Company

                                      -66-
<PAGE>

Transaction whereby the Holder of each Security then outstanding shall have the
right thereafter to convert such Security only into (i) in the case of any
Company Transaction other than a Common Stock Fundamental Change, the kind and
amount of securities, cash and other property receivable upon the consummation
of the Company Transaction by a holder of that number of shares of Common Stock
into which such Security was convertible immediately prior to such transaction,
after giving effect to any adjustment in the Applicable Conversion Price
required by the provisions of Section 13.07(a)(i), and (ii) in the case of a
Company Transaction involving a Common Stock Fundamental Change, common stock of
the kind received by holders of Common Stock as a result of such Common Stock
Fundamental Change in an amount determined pursuant to the provisions of Section
13.07(a)(ii). Holders of the Securities shall have no voting rights with respect
to any Company Transaction described in this Section 13.04.

     The Company or the Person formed by such consolidation or resulting from
such merger or which acquired such assets or which acquires the Company's
shares, as the case may be, shall make provision in its certificate or articles
of incorporation or other constituent document to establish such right. Such
certificate or articles of incorporation or other constituent document shall
provide for adjustments which, for events subsequent to the effective date of
such certificate or articles of incorporation or other constituent document,
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Article XIII. The above provisions shall similarly apply to
successive transactions of the foregoing type.

Section 13.05  Notice of Adjustments of Conversion Price.

     Whenever the Applicable Conversion Price is adjusted as herein provided:

(a)  the Company shall compute the adjusted Applicable Conversion Price and
shall prepare a certificate signed by the Chief Financial Officer or the
Treasurer of the Company setting forth the adjusted Applicable Conversion Price
and showing in reasonable detail the facts upon which such adjustment is based,
and such certificate shall forthwith be filed with the Trustee, the Conversion
Agent, the Property Trustee and the transfer agent for the Preferred Securities
and the Securities; and

(b)  a notice stating the Applicable Conversion Price has been adjusted and
setting forth the adjusted Applicable Conversion Price shall as soon as
practicable be mailed by the Company to all record holders of Preferred
Securities and the Securities at their last addresses as they appear upon the
stock transfer books of the Company and the books and records of the Trust,
respectively.

Section 13.06  Prior Notice of Certain Events.

     In case:

(i)  the Company shall (1) declare any dividend (or any other distribution) on
its Common Stock, other than (A) a dividend payable in shares of Common Stock or
(B) a dividend payable in cash that would not require an adjustment pursuant to
Section 13.03(iv)

                                      -67-
<PAGE>

or (v) or (2) authorize a tender or exchange offer that would
require an adjustment pursuant to Section 13.03(vi);

(ii)  the Company shall authorize the granting to all holders of Common Stock of
rights or warrants to subscribe for or purchase any shares of stock of any class
or series or of any other rights or warrants;

(iii)  of any reclassification of Common Stock (other than a subdivision or
combination of the outstanding Common Stock, or a change in par value, or from
par value to no par value, or from no par value to par value), or of any
consolidation or merger to which the Company is a party and for which approval
of any stockholders of the Company shall be required, or of the sale or transfer
of all or substantially all of the assets of the Company or of any compulsory
share exchange whereby the Common Stock is converted into other securities, cash
or other property; or

(iv)  of the voluntary or involuntary dissolution, liquidation or winding up of
the Company;

then the Company shall (a) if any Preferred Securities are outstanding, cause to
be filed with the transfer agent for the Preferred Securities, and shall cause
to be mailed to the holders of record of the Preferred Securities, at their last
addresses as they shall appear upon the books and records of the Trust, or (b)
shall cause to be mailed to all Holders at their last addresses as they shall
appear in the Security Register, at least fifteen days prior to the applicable
record or effective date hereinafter specified, a notice stating (x) the date on
which a record (if any) is to be taken for the purpose of such dividend,
distribution, rights or warrants or, if a record is not to be taken, the date as
of which the holders of Common Stock of record to be entitled to such dividend,
distribution, rights or warrants are to be determined or (y) the date on which
such reclassification, consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, share exchange, dissolution, liquidation or winding up (but no failure
to mail such notice or any defect therein or in the mailing thereof shall affect
the validity of the corporate action required to be specified in such notice).

Section 13.07  Adjustments in Case of Fundamental Changes.

(a)  Notwithstanding any other provision in this Article XIII to the contrary,
in the case of any Company Transaction involving a Fundamental Change, the
Applicable Conversion Price will be adjusted immediately after such Fundamental
Change as follows:

(i)  in the case of a Non-Stock Fundamental Change, the Applicable Conversion
Price of the Securities shall thereupon become the lower of (A) the Applicable
Conversion Price in effect immediately prior to such Non-Stock Fundamental
Change, but after giving effect to any other prior adjustments effected pursuant
to this Article XIII, and (B) the result obtained by multiplying the greater of
the Relevant Price or the then applicable Reference Market Price by the Optional
Redemption Ratio (such product shall hereinafter

                                      -68-
<PAGE>

be referred to as the "Adjusted Relevant Price" or the "Adjusted Reference
Market Price", as the case may be); and

(ii)  in the case of a Common Stock Fundamental Change, the Applicable
Conversion Price of the Securities in effect immediately prior to such Common
Stock Fundamental Change, but after giving effect to any other prior adjustments
effected pursuant to this Article XIII, shall thereupon be adjusted by
multiplying such Applicable Conversion Price by a fraction of which the
numerator shall be the Purchaser Stock Price and the denominator shall be the
Relevant Price; provided, however, that in the event of a Common Stock
Fundamental Change in which (A) 100% of the value of the consideration received
by a holder of Common Stock is common stock of the successor, acquiror or other
third party (and cash, if any, is paid only with respect to any fractional
interests in such common stock resulting from such Common Stock Fundamental
Change) and (B) all of the Common Stock shall have been exchanged for, converted
into or acquired for common stock (and cash with respect to fractional
interests) of the successor, acquiror or other third party, the Applicable
Conversion Price of the Securities in effect immediately prior to such Common
Stock Fundamental Change shall thereupon be adjusted by multiplying such
Applicable Conversion Price by a fraction of which the numerator shall be one
and the denominator shall be the number of shares of common stock of the
successor, acquiror, or other third party received by a stockholder for one
share of Common Stock as a result of such Common Stock Fundamental Change.

(b)  Definitions. The following definitions shall apply to terms used in this
Article XIII:

(1)  "Closing Price" of any security on any day shall mean on any day the last
reported sale price of such security on such day, or in case no sale takes place
on such day, the average of the closing bid and asked prices in each case on the
principal national securities exchange on which such securities are listed or
admitted to trading or, if not listed or admitted to trading on any national
securities exchange, on the NNM or, if such securities are not listed or
admitted to trading on any national securities exchange or quoted on the NNM,
the average of the closing bid and asked prices in the over-the-counter market
as furnished by any New York Stock Exchange member firm selected by the Company
for such purpose.

(2)  "Common Stock Fundamental Change" shall mean any Fundamental Change in
which more than 50% of the value (as determined in good faith by the Board of
Directors) of the consideration received by holders of Common Stock consists of
common stock that for each of the ten consecutive Trading Days immediately prior
to the Entitlement Date has been admitted for listing or admitted for listing
subject to notice of issuance on a national securities exchange or quoted on the
NNM; provided, however, that a Fundamental Change shall not be a Common Stock
Fundamental Change unless either (i) the Company continues to exist after the
occurrence of such Fundamental Change and the outstanding Preferred Securities
continue to exist as outstanding Preferred Securities, or (ii) not later than
the occurrence of such Fundamental Change, the outstanding Securities are
converted into

                                      -69-
<PAGE>

or exchanged for debentures of a corporation succeeding to the business of the
Company, which debentures have terms substantially similar to those of the
Securities.

(3)  "Entitlement Date" shall mean the record date for determination of the
holders of Common Stock entitled to receive securities, cash or other property
in connection with a Non-Stock Fundamental Change or a Common Stock Fundamental
Change or, if there is no such record date, the date upon which holders of
Common Stock shall have the right to receive such securities, cash or other
property.

(4)  "Fundamental Change" shall mean the occurrence of any transaction or event
in connection with a plan pursuant to which all or substantially all of the
Common Stock shall be exchanged for, converted into, acquired for or constitute
solely the right to receive securities, cash or other property (whether by means
of an exchange offer, liquidation, tender offer, consolidation, merger,
combination, reclassification, recapitalization or otherwise); provided,
however, in the case of a plan involving more than one such transaction or
event, for purposes of adjustment of the Applicable Conversion Price, such
Fundamental Change shall be deemed to have occurred when substantially all of
the Common Stock of the Company shall be exchanged for, converted into, or
acquired for or constitute solely the right to receive securities, cash or other
property, but the adjustment shall be based upon the highest weighted average
per share consideration that a holder of Common Stock could have received in
such transactions or events as a result of which more than 50% of the Common
Stock of the Company shall have been exchanged for, converted into, or acquired
for or constitute solely the right to receive securities, cash or other
property.

(5)  "Non-Stock Fundamental Change" shall mean any Fundamental Change other than
a Common Stock Fundamental Change.

(6)  "Optional Redemption Ratio" means a fraction of which the numerator shall
be $50 and the denominator will be the then current Optional Redemption Price
or, prior to December 20, 2002, an amount per Security determined by the Company
in its sole discretion, after consultation with an investment banking firm, to
be the equivalent of the hypothetical redemption price that would have been
applicable if the Securities had been redeemable during such period.

(7)  "Purchaser Stock Price" shall mean, with respect to any Common Stock
Fundamental Change, the average of the daily Closing Prices of the common stock
received in such Common Stock Fundamental Change for the ten (10) consecutive
Trading Days prior to and including the Entitlement Date, as adjusted in good
faith by the Board of Directors to appropriately reflect any of the events
referred to in subparagraphs (i), (ii), (iii), (iv), (v) and (vi) of Section
13.03.

(8)  "Reference Market Price" shall initially mean on the date of original
issuance of the Securities, $20.17 (which is an amount equal to 66-2/3% of the
last reported sale price for the Common Stock on the New York Stock Exchange
Composite Tape on December 9, 1999 and, in the event of any adjustment to the
Applicable Conversion Price, other than as a result of a Non-Stock Fundamental
Change, the Reference Market Price shall

                                      -70-
<PAGE>

also be adjusted so that the ratio of the Reference Market Price to the
Applicable Conversion Price after giving effect to any such adjustment shall
always be the same as the ratio of $20.17 to the Initial Conversion Price.

(9)  "Relevant Price" shall mean (i) in the event of a Non-Stock Fundamental
Change in which the holders of the Common Stock receive only cash, the amount of
cash received by a stockholder for one share of Common Stock and (ii) in the
event of any other Non-Stock Fundamental Change or any Common Stock Fundamental
Change, the average of the daily Closing Prices of the Common Stock for the ten
(10) consecutive Trading Days prior to and including the Entitlement Date, in
each case, as adjusted in good faith by the Company to appropriately reflect any
of the events referred to in subparagraphs (i), (ii), (iii), (iv), (v) and (vi)
of Section 13.03.

(10)  "Trading Day" shall mean a day on which securities are traded on the
national securities exchange or quotation system used to determine the Closing
Price.

Section 13.08  Dividend or Interest Reinvestment Plans.

(a)  Notwithstanding the foregoing provisions, the issuance of any shares of
Common Stock pursuant to any present or future plan providing for the
reinvestment of dividends or interest payable on securities of the Company and
the investment of additional optional amounts in shares of Common Stock under
any such plan, and the issuance of any shares of Common Stock or options or
rights to purchase such shares pursuant to any employee benefit plan or program
of the Company or pursuant to any option issued, shall not be deemed to
constitute an issuance of Common Stock or exercisable, exchangeable or
convertible securities by the Company to which any of the adjustment provisions
described above applies.

(b)  There shall also be no adjustment of the Applicable Conversion Price in
case of the issuance of any stock (or securities convertible into or
exchangeable for stock) of the Company except as specifically described in this
Article XIII.

Section 13.09  Certain Additional Rights.

     Notwithstanding any other provision of this Article XIII to the contrary,
rights, warrants, evidences of indebtedness, other securities, cash or other
assets (including, without limitation, any rights distributed pursuant to any
stockholder rights plan) shall be deemed not to have been distributed for
purposes of this Article XIII if the Company makes proper provision so that each
Holder who converts a Security (or any portion thereof) after the date fixed for
determination of stockholders entitled to receive such distribution shall be
entitled to receive upon such conversion, in addition to the shares of Common
Stock issuable upon such conversion, the amount and kind of such distributions
that such Holder would have been entitled to receive if such Holder had,
immediately prior to such determination date, converted such Security into
Common Stock.

                                      -71-
<PAGE>

Section 13.10  Restrictions on Common Stock Issuable Upon Conversion.

(a)  Shares of Common Stock to be issued upon conversion of a Security in
respect of Restricted Preferred Securities (as defined in the Declaration) shall
bear such restrictive legends as the Company may provide in accordance with
applicable law.

(b)  If shares of Common Stock to be issued upon conversion of a Security in
respect of Restricted Preferred Securities are to be registered in a name other
than that of the Holder of such Preferred Security, then the Person in whose
name such shares of Common Stock are to be registered must deliver to the
Conversion Agent a certificate satisfactory to the Company and signed by such
Person, as to compliance with the restrictions on transfer applicable to such
Preferred Security. Neither the Trustee nor any Conversion Agent or Registrar
shall be required to register in a name other than that of the Holder shares of
Common Stock or such Preferred Securities issued upon conversion of any such
Security in respect of such Preferred Securities not so accompanied by a
properly completed certificate.

Section 13.11  Trustee Not Responsible for Determining Conversion Price or
               Adjustments.

     Neither the Trustee nor any Conversion Agent shall at any time be under any
duty or responsibility to any Holder of any Security to determine whether any
facts exist which may require any adjustment of the Applicable Conversion Price,
or with respect to the nature or extent of any such adjustment when made, or
with respect to the method employed, or whether any supplemental indenture needs
to be entered into. Neither the Trustee nor any Conversion Agent shall be
accountable with respect to the validity or value (or the kind or amount) of any
shares of Common Stock or of any securities or property, which may at any time
be issued or delivered upon the conversion of any Security; and neither the
Trustee nor any Conversion Agent makes any representation with respect thereto.
Neither the Trustee nor any Conversion Agent shall be responsible for any
failure of the Company to make any cash payment or to issue, transfer or deliver
any shares of Common Stock or stock certificates or other securities or property
upon the surrender of any Security for the purpose of conversion, or, except as
expressly herein provided, to comply with any of the covenants of the Company
contained in Article X or this Article XIII.

                                  ARTICLE XIV

        IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

Section 14.01  No Recourse.

     No recourse under or upon any obligation, covenant or agreement of this
Indenture, or of any Security, or for any claim based thereon or otherwise in
respect thereof, shall be had against any incorporator, stockholder, officer or
director, past, present or future as such, of the Company or of any predecessor
or successor corporation, either directly or through the Company or any such
predecessor or successor corporation, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly understood that

                                      -72-
<PAGE>

this Indenture and the obligations issued hereunder are solely corporate
obligations, and that no such personal liability whatever shall attach to, or is
or shall be incurred by, the incorporators, stockholders, officers or directors
as such, of the Company or of any predecessor or successor corporation, or any
of them, because of the creation of the indebtedness hereby authorized, or under
or by reason of the obligations, covenants or agreements contained in this
Indenture or in any of the Securities or implied therefrom; and that any and all
such personal liability of every name and nature, either at common law or in
equity or by constitution or statute, of, and any and all such rights and claims
against, every such incorporator, stockholder, officer or director as such,
because of the creation of the indebtedness hereby authorized, or under or by
reason of the obligations, covenants or agreements contained in this Indenture
or in any of the Securities or implied therefrom, are hereby expressly waived
and released as a condition of, and as a consideration for, the execution of
this Indenture and the issuance of such Securities.

     This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.

                  [Remainder of Page Intentionally Left Blank]

                                      -73-
<PAGE>

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

Dated:  December 15, 1999

                                    HANOVER COMPRESSOR COMPANY

                                    By:
                                        ------------------------------------
                                        Name:  Curtis A. Bedrich
                                        Title: Chief Financial Officer and
                                               Treasurer

                                    WILMINGTON TRUST COMPANY, as Trustee

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

                                      -74-
<PAGE>

                                   EXHIBIT A

                                FORM OF SECURITY

                          [FORM OF FACE OF SECURITY]

     [Include if a Global Security:  THIS SECURITY IS A GLOBAL SECURITY WITHIN
THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
NAME OF THE DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") OR A NOMINEE OF THE
DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR A SECURITY REGISTERED IN THE NAME
OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND NO TRANSFER OF THIS SECURITY (OTHER
THAN A TRANSFER OF THIS SECURITY 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) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.

     UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO HANOVER
COMPRESSOR COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

     [Include Restricted Securities Legend if required under Section 2.02:

     THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THIS SECURITY AND ANY COMMON STOCK ISSUABLE UPON
CONVERSION HEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THIS 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.

     THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE ISSUER AND THE
COMPANY THAT (A) THIS SECURITY AND ANY COMMON STOCK ISSUABLE UPON CONVERSION
HEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (i) TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES

                                      -75-
<PAGE>

IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (ii)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE) OR (iii) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (i) THROUGH
(iii) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY
FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.]

                                      -76-
<PAGE>

                           HANOVER COMPRESSOR COMPANY

               Convertible Junior Subordinated Debenture Due 2029

No. 1                                                                $
                                                                      ----------
                                                             CUSIP No. 410768AA3

     HANOVER COMPRESSOR COMPANY, a corporation duly organized and existing under
the laws of the State of Delaware (herein called "the Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to ____________________, or
registered assigns, the principal sum [indicated on Schedule A hereof]/1/ [of
Dollars]/2/ ($) on December 15, 2029.

     Interest Payment Dates: March 15, June 15, September 15, and December 15,
commencing March 15, 2000.

     Regular Record Dates: the close of business on the first day of the month
of each Interest Payment Date, commencing March 1, 2000.

     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.

     Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

     IN WITNESS WHEREOF, the Company has caused this instrument to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.

Dated:
                                    HANOVER COMPRESSOR COMPANY

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

[Seal]

-------------------
/1/ Applicable to Global Securities only.

/2/ Applicable to certificated Securities only.

                                      -77-
<PAGE>

Attest:

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

                    TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

Dated:
                                    WILMINGTON TRUST COMPANY
                                    as Trustee

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

                                      -78-
<PAGE>

                         [FORM OF REVERSE OF SECURITY]

                           HANOVER COMPRESSOR COMPANY

              Convertible Junior Subordinated Debenture Due 2029/3/

     1. Interest.  Hanover Compressor Company, a Delaware corporation (the
"Company"), is the issuer of this Convertible Junior Subordinated Debenture Due
2029 (the "Security") limited in aggregate principal amount to $              ,
                                                                --------------
issued under the Indenture hereinafter referred to. The Company promises to pay
interest on the Securities in cash from December 15, 1999 or from the most
recent interest payment date to which interest has been paid or duly provided
for, quarterly (subject to deferral for up to 20 consecutive quarters as
described in Section 3 hereof) in arrears on March 15, June 15, September 15,
and December 15 of each year (each such date, an "Interest Payment Date"),
commencing March 15, 2000, at the Applicable Rate, plus Additional Sums, if any,
until the principal hereof shall have become due and payable.

     The amount of interest payable for any period will be computed on the basis
of twelve 30-day months and a 360-day year. To the extent lawful, the Company
shall pay interest on overdue installments of interest (without regard to any
applicable grace period) at the rate borne by the Securities, compounded
quarterly. Any interest paid on this Security shall be increased to the extent
necessary to pay Additional Sums as set forth in this Security.

     2.  Additional Sums. The Company shall pay to Hanover Compressor Capital
Trust (and its permitted successors or assigns under the Declaration) (the
"Trust") such additional amounts as may be necessary in order that the amount of
dividends or other distributions then due and payable by the Trust on the
Preferred Securities that at any time remain outstanding in accordance with the
terms thereof shall not be reduced as a result of any additional taxes, duties,
assessments and other governmental charges of whatever nature (other than
withholding taxes) imposed by the United States or any other taxing authority.

     3.  Extension of Interest Payment Period. So long as no Event of Default
has occurred and is continuing, the Company shall have the right, at any time
during the term of this Security, from time to time to defer payments of
interest by extending the interest payment period of such Security for up to 20
consecutive quarters (a "Deferral Period"); provided that no Deferral Period may
extend beyond December 15, 2029.  To the extent permitted by applicable law,
interest, the payment of which has been deferred because of the extension of the
interest payment period pursuant to Section 3.13 of the Indenture, will bear
interest thereon at the Applicable Rate compounded quarterly for each quarter of
the Deferral Period ("Compounded Interest"). On the applicable Payment
Resumption Date, the Company shall pay all interest then accrued and unpaid on
the Securities, including any Compounded Interest that shall be payable to the
Holders of the Securities in whose names the Securities are registered in the
Security Register on the record date fixed for such Payment Resumption Date.
Before the termination of any Deferral Period, the Company may further

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

/3/ All terms used in this Security which are defined in the Indenture or in the
    Declaration referred to herein shall have the meanings assigned to them in
    the Indenture or the Declaration, as the case may be.

                                      -79-
<PAGE>

extend such period as provided in the Indenture, provided that such period
together with all such further extensions thereof shall not exceed 20
consecutive quarters or extend beyond the Stated Maturity of the Security. Upon
the termination of any Deferral Period and upon the payment of all Compounded
Interest and Additional Sums (together, "Additional Payments"), if any, then
due, the Company may commence a new Deferral Period, subject to the foregoing
requirements. No interest shall be due and payable during a Deferral Period
except on the applicable Payment Resumption Date.

     The Company shall give the Holder of the Security and the Trustee written
notice (a "Deferral Notice") of its selection of a Deferral Period at least ten
days prior to the record date for any distributions that would have been payable
on the Trust Securities except for the decision to begin or extend such Deferral
Period. The Company may elect to pay all interest then accrued and unpaid on the
Securities, including Compound Interest, on an Interest Payment Date prior to
its most recently established Payment Resumption Date, provided that the Company
gives the Holder of the Security and the Trustee a new Deferral Notice setting
forth the revised Payment Resumption Date at least three Business Days prior to
the Regular Record Date for such revised Payment Resumption Date.

     The quarter in which any Deferral Notice is given pursuant to the second
paragraph of this Section 3 shall be counted as one of the 20 quarters permitted
in the maximum Deferral Period permitted under the first paragraph of this
Section 3.

     4.  Method of Payment. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the regular record date
for such interest installment, which shall be the close of business on the first
day of the month of each Interest Payment Date (the "Regular Record Date"),
commencing March 1, 2000.  Any such interest not so punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities not less
than ten days prior to such Special Record Date, or be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said Indenture,
provided that any such payment will be made in such coin or currency of the
United States of America which at the time of payment is a legal tender for
payment of public and private debts.

     Payment of the principal of and interest on this Security will be made at
the office or agency of the Company maintained for that purpose in New York, New
York, in coin or currency of the United States of America which at the time of
payment is legal tender for payment of public and private debts; provided,
however, that at any time that the Property Trustee is not the sole holder of
the Securities, payment of interest may, at the option of the Company, be made
by check mailed to the address of the Person entitled thereto as such address
shall appear in the Security Register or by wire transfer.

                                      -80-
<PAGE>

     5. Paying Agent and Security Registrar. The Trustee will act as Paying
Agent, Security Registrar and Conversion Agent. The Company may change any
Paying Agent, Security Registrar, co-registrar or Conversion Agent without prior
notice. The Company or any of its Affiliates may act in any such capacity.

     6. Indenture. The Company issued the Securities under an indenture, dated
as of December 15, 1999 (the "Indenture"), between the Company and Wilmington
Trust Company, as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Trustee,
the Company and the Holders of the Securities, and of the terms upon which the
Securities are, and are to be, authenticated and delivered. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by the Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-
77bbbb) ("Trust Indenture Act") as in effect on the date of the Indenture. The
Securities are subject to, and qualified by, all such terms, certain of which
are summarized herein, and holders are referred to the Indenture and the Trust
Indenture Act for a statement of such terms. The Securities are unsecured
general obligations of the Company limited to up to $              and
                                                     ------------
subordinated in right of payment to all existing and future Senior Debt of the
Company. No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and interest on this
Security at the times, place and rate, and in the coin or currency, herein
prescribed or to convert this Security as provided in the Indenture.

     7.  Optional Redemption. The Securities are redeemable at the Company's
option (an "Optional Redemption") in whole or in part, at any time or from time
to time, on or after December 20, 2002, at a Redemption Price equal to the
applicable price per $50 principal amount of Securities set forth in the table
below, plus any accrued and unpaid interest, including Additional Payments, if
any, to the Redemption Date, if redeemed during the 12-month period ending on
December 19:

<TABLE>
<CAPTION>
                                   Price Per $50
Year                             Principal Amount
----                             ----------------
<S>                              <C>
2003                                  $51.81
2004                                  $51.21
2005                                  $50.60
2006                                  $50.00
</TABLE>

and thereafter at $50 per $50 principal amount of the Securities plus, in each
case, any accrued and unpaid interest, including Additional Payments, if any, to
the Redemption Date.

     8.  Optional Redemption Upon Tax Event. Subject to the conditions set forth
in the Indenture, the Securities are subject to redemption in whole, but not in
part, if a Tax Event shall occur and be continuing, at any time within 90 days
following the occurrence of such Tax Event, at a Redemption Price equal to $50
per $50 principal amount thereof, plus accrued but unpaid interest, including
Additional Payments, if any, to the Redemption Date.

     In lieu of the foregoing, the Company also shall have the option of causing
the Securities to remain outstanding and pay Additional Sums on the Securities.

                                      -81-
<PAGE>

     9.  Notice of Redemption. Notice of redemption will be mailed by first-
class mail, postage prepaid, at least 20 days, but not more than 60 days before
the Redemption Date to each Holder of the Securities to be redeemed at such
Holder's address appearing in the Security Register.

     10.  No Sinking Fund.  There are no sinking fund payments with respect to
the Securities.

     11.  Payment to Registered Holders; Cessation of Interest Accrual Upon
Redemption. If this Security is redeemed subsequent to a Regular Record Date
with respect to any Interest Payment Date specified above and on or prior to
such Interest Payment Date, then any accrued interest will be paid to the person
in whose name this Security is registered at the close of business on such
record date. On or after the Redemption Date, interest will cease to accrue on
the Securities, or portion thereof, called for redemption.

     12.  Subordination. The payment of the principal of, interest on or any
other amounts due on the Securities is subordinated in right of payment to all
existing and future Senior Debt (as defined below) of the Company, as described
in the Indenture. Each Holder, by accepting a Security, agrees to such
subordination and authorizes and directs the Trustee on its behalf to take such
action as may be necessary or appropriate to effectuate the subordination so
provided and appoints the Trustee as its attorney-in-fact for such purpose.

     "Senior Debt" means (i) the principal of, premium, if any,  and interest,
on all obligations of every nature of the Company for money borrowed, whether
outstanding on the date of execution of the Indenture or thereafter created,
assumed or incurred, together with all fees, indemnities and expenses payable
under such obligations, (ii) all obligations to make payment pursuant to the
terms of financial instruments, such as (a) securities contracts and foreign
currency exchange contracts, (b) derivative instruments, such as swap agreements
(including interest rate and foreign exchange rate swap agreements), cap
agreements, floor agreements, collar agreements, interest rate agreements,
foreign exchange agreements, options, commodity futures contracts and commodity
options contracts, and (c) similar financial instruments; except, in the case of
both (i) and (ii) above, such indebtedness and obligations that are expressly
stated to rank junior in right of payment to, or pari passu in right of payment
with, the Securities, (iii) indebtedness or obligations of others of the kind
described in both (i) and (ii) above for the payment of which the Company is
responsible or liable as guarantor or otherwise, and (iv) deferrals, renewals or
extensions of any such Senior Debt; provided, however, that Senior Debt shall
not be deemed to include (a) any Debt of the Company which, when incurred and
without respect to any election under Section 1111(b) of the United States
Bankruptcy Code of 1978, was without recourse to the Company, (b) trade accounts
payable and accrued liabilities arising in the ordinary course of business, (c)
any Debt of the Company to any of its subsidiaries, (d) Debt to any employee of
the Company and (e) Debt which by its terms is subordinated to trade accounts
payable or accrued liabilities arising in the ordinary course of business to the
extent that payments made to the holders of such Debt by the Holders of the
Securities as a result of the subordination provisions of the Indenture would be
greater than such payments otherwise would have been as a result of any
obligation of such holders of such Debt to pay amounts over to the obligees on
such trade accounts payable or accrued liabilities arising in the ordinary
course of business as a result of subordination provisions to which such Debt is
subject.

                                      -82-
<PAGE>

     13.  Conversion.  The Holder of any Security has the right, exercisable at
any time prior to 5:00 p.m., New York City time, on the Business Day immediately
preceding December 15, 2029, to convert the principal amount thereof (or any
portion thereof that is an integral multiple of $50) into shares of Common Stock
at the initial conversation rate of 1.3986 shares of Common Stock for each $50
in aggregate principal amount of Securities (equivalent to a conversion price of
$35.75 per share of Common Stock of the Company). The conversion ratio and
equivalent conversion price in effect at any time are known as the "Applicable
Conversion Price" and the "Applicable Conversion Ratio," respectively, and are
subject to adjustment under certain circumstances. If a Security is called for
redemption, the conversion right will terminate at the close of business on the
Business Day immediately preceding the corresponding Redemption Date, unless the
Company defaults in making the payment due upon redemption.

     To convert a Security, a Holder must (1) complete and sign a conversion
notice substantially in the form attached hereto, (2) surrender the Security to
a Conversion Agent, (3) furnish appropriate endorsements or transfer documents
if required by the Security Registrar or Conversion Agent and (4) pay any
transfer or similar tax, if required. Upon conversion, no adjustment or payment
will be made for interest or dividends, but if any Holder surrenders a Security
for conversion after the close of business on the Regular Record Date for the
payment of an installment of interest and prior to the opening of business on
the next Interest Payment Date, then, notwithstanding such conversion, the
interest payable on such Interest Payment Date will be paid to the registered
Holder of such Security on such Regular Record Date. In such event, such
Security, when surrendered for conversion, need not be accompanied by payment of
an amount equal to the interest payable on such Interest Payment Date on the
portion so converted. The number of shares issuable upon conversion of a
Security is determined by dividing the principal amount of the Security
converted by the Applicable Conversion Price in effect on the Conversion Date.
No fractional shares will be issued upon conversion but a cash adjustment will
be made for any fractional interest.  The outstanding principal amount of any
Security shall be reduced by the portion of the principal amount thereof
converted into shares of Common Stock.

     14.  Registration Rights. The holders of the Preferred Securities, the
Securities, the Guarantee Agreement and the shares of Common Stock of the
Company issuable upon conversion of the Securities (collectively, the
"Registrable Securities") are entitled to the benefits of a Registration Rights
Agreement, dated as of December 15, 1999, among the Company, the Trust and the
Initial Purchasers (the "Registration Rights Agreement").  Pursuant to the
Registration Rights Agreement the Company and the Trust have agreed for the
benefit of the holders of the Registrable Securities that (i) they will, at the
Company's sole expense, prior to February 15, 2000, file a shelf registration
statement (the "Shelf Registration Statement") with the Commission with respect
to resales of the Registrable Securities, (ii) they will use their best efforts
to cause such Shelf Registration Statement to be declared effective under the
Securities Act prior to May 15, 2000, and (iii) they will use their best efforts
to maintain such Shelf Registration Statement continuously effective under the
Securities Act (subject to certain exceptions under the Registration Rights
Agreement) until the second anniversary of the effectiveness of the Shelf
Registration Statement or such other period as shall be required under Rule
144(k) thereunder or any successor rule or regulation thereto or such earlier
date as is provided in the Registration Rights Agreement. If the Company fails
to comply with either of clauses (ii) or (iii) above, subject to certain
exceptions provided in the Registration Rights Agreement, (a "Registration
Default") then, at such time, the

                                      -83-
<PAGE>

Applicable Rate will increase by 50 basis points (.50%). Such increase will
remain in effect 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, on which date the interest rate on the Securities will revert
to the interest rate originally borne by the Securities.

     15.  Registration, Transfer, Exchange and Denominations. As provided in the
Indenture and subject to certain limitations therein set forth, the transfer of
this Security is registrable in the Security Register, upon surrender of this
Security for registration of transfer at the office or agency of the Company in
New York, New York, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee or
transferees.

     The Securities are issuable only in registered form without coupons in
denominations of $50 and integral multiples thereof. No service charge shall be
made for any such registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. Prior to due presentment of this
Security for registration of transfer, the Company, the Trustee and any agent of
the Company or the Trustee may treat the Person in whose name this Security is
registered as the owner hereof for all purposes, whether or not this Security be
overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary. In the event of redemption or conversion of
this Security in part only, a new Security or Securities for the unredeemed or
unconverted portion hereof will be issued in the name of the Holder hereof upon
the cancellation hereof.

     16.  Persons Deemed Owners.  Except as provided in Section 3 hereof, the
registered Holder of a Security may be treated as its owner for all purposes.

     17.  Unclaimed Money. If money for the payment of principal or interest
remains unclaimed for two years, the Trustee and the Paying Agent shall pay the
money back to the Company at its written request. After that, Holders of
Securities entitled to the money must look to the Company for payment unless an
abandoned property law designates another Person and all liability of the
Trustee and such Paying Agent with respect to such money shall cease.

     18.  Events of Default and Remedies. The Securities shall have the Events
of Default as set forth in Section 5.01 of the Indenture. Subject to certain
limitations in the Indenture, if an Event of Default occurs and is continuing,
the Trustee by notice to the Company or the Holders of at least 25% in aggregate
principal amount of the Outstanding Securities by notice to the Company and the
Trustee may declare all amounts payable on the Securities (including any
Additional Payments) to be due and payable immediately; provided that, if the
Property Trustee is the sole Holder of the Security and if upon an Event of
Default, the Trustee or the Holder of not less than 25% in aggregate principal
amount of the then outstanding Securities fail to declare the principal of all
the Securities to be immediately due and payable, the Holders of at least 25% in
aggregate liquidation amount of Preferred Securities then outstanding shall have
such right by a notice in writing to the Company and the Trustee; and upon any
such declaration such principal and all accrued interest shall become

                                      -84-
<PAGE>

immediately due and payable; and provided further that the payment of principal
and interest on such Securities shall remain subordinated to the extent provided
in the Indenture.

     In the case of an Event of Default, the holders of a majority in principal
amount of the Outstanding Securities by written notice to the Trustee may
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default have
been cured or waived except nonpayment of principal or interest that has become
due solely because of the acceleration.

     Holders may not enforce the Indenture or the Securities except as provided
in the Indenture. Subject to certain limitations, Holders of a majority in
principal amount of the then outstanding Securities issued under the Indenture
may direct the Trustee in its exercise of any trust or power. The Company must
furnish annually compliance certificates to the Trustee. The above description
of Events of Default and remedies is qualified by reference to, and subject in
its entirety by, the more complete description thereof contained in the
Indenture.

     19.  Amendments, Supplements and Waivers. The Indenture permits, subject to
the rights of the holders of Preferred Securities set forth therein and in the
Declaration and with certain other exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Company, and
the rights of the Holders of the Securities under the Indenture, at any time, by
the Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the Securities at the time Outstanding. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, subject to the
rights of the holders of the Preferred Securities set forth therein and in the
Declaration, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon the registration of transfer hereof or in exchange
therefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security. The above description of amendments, supplements and
waivers is qualified by reference to, and subject in its entirety, by the more
complete description thereof contained in the Indenture.

     20.  Trustee Dealings with the Company. The Trustee, in its individual or
any other capacity, may become the owner or pledgee of the Securities and may
otherwise deal with the Company or an Affiliate with the same rights it would
have, as if it were not a Trustee, subject to certain limitations provided for
in the Indenture and in the Trust Indenture Act. Any Agent may do the same with
like rights.

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

                                      -85-
<PAGE>

     22.  Governing Law.  THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL
GOVERN THE INDENTURE AND THE SECURITIES.

     23.  Authentication.  The Securities shall not be valid until authenticated
by the manual signature of an authorized officer of the Trustee or an
authenticating agent.

     24.  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).

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

               Hanover Compressor Company
               12001 North Houston Rosslyn
               Houston, Texas  77086
               Attention:  Chief Financial Officer

                                      -86-
<PAGE>

                                Assignment Form

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

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

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

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

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

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

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

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

Date:
Your Signature:
                --------------------------------------------------------------
                 (Sign exactly as your name appears on the face of this Note)

                              SIGNATURE GUARANTEE/4/

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

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

    /4/ (Signature must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

                                      -87-
<PAGE>

     [Include the following if the Security bears a Restricted Securities Legend

     In connection with any transfer of any of the Securities evidenced by this
certificate, the undersigned confirms that such Securities are being:

                              CHECK ONE BOX BELOW

(1)  [_]  exchanged for the undersigned's own account without transfer; or

(2)  [_]  transferred pursuant to and in compliance with Rule 144A under the
          Securities Act of 1933; or

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

(4)  [_]  transferred pursuant to another available exemption from the
          registration requirements of the Securities Act of 1933.

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

Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any person other
than the registered Holder thereof; provided, however, that if box (3) or (4) is
checked, the Trustee may require, prior to registering any such transfer of the
Securities, such legal opinions, certifications and other information as the
Company has reasonably requested to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933, such as the exemption
provided by Rule 144 under such Act.

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

                                      -88-
<PAGE>

                             Signature Guarantee:/5/

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

Signature must be guaranteed Signature

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

     /5/ (Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include membership
or participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.)

                                      -89-
<PAGE>

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

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

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

                                    -----------------------------------------
                                    NOTICE: [To be executed by an executive
                                      officer]

                                      -90-
<PAGE>

                     [TO BE ATTACHED TO GLOBAL SECURITIES]

                                   SCHEDULE A

     The initial principal amount of this Global Security shall be $       . The
                                                                    -------
following increases or decreases in the principal amount of this Global Security
have been made:

<TABLE>
<CAPTION>
                          Amount of
                         decrease in
                       Principal Amount                                                                Signature of
                        of this Global               Amount of               Principal Amount           authorized
                      Security including            increase in               of this Global           signatory of
                        increase upon            Principal Amount           Security following          Trustee or
                       exercise of over-          of this Global             such decrease (or          Securities
   Date Made           allotment option              Security                    increase)              Custodian
---------------       ------------------         ----------------           ------------------         ------------
<S>                   <C>                       <C>                        <C>                        <C>

</TABLE>

                                      -91-
<PAGE>

                              ELECTION TO CONVERT

To:  Hanover Compressor Company

     The undersigned owner of this Security hereby irrevocably exercises the
option to convert this Security, or the portion below designated, into Common
Stock of HANOVER COMPRESSOR COMPANY in accordance with the terms of the
Indenture referred to in this Security, and directs that the shares issuable and
deliverable upon conversion, together with any check in payment for fractional
shares, be issued in the name of and delivered to the undersigned, unless a
different name has been indicated in the assignment below. If shares are to be
issued in the name of a person other than the undersigned, the undersigned will
pay all transfer taxes payable with respect thereto.

     Any holder, upon the exercise of its conversion rights in accordance with
the terms of the Indenture and the Security, agrees to be bound by the terms of
the Registration Rights Agreement relating to the Common Stock issuable upon
conversion of the Securities.

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

in whole
         ----
Portions of Security to be converted ($50 or integral multiples thereof):
$
  -------------------------

                                 Signature (for conversion only)
--------------------------------

Please Print or Typewrite Name and Address, Including Zip Code, and Social
Security or Other

Identifying Number
                   -----------------------------------------------------------

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

Signature Guarantee:/6/

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

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

       /6/(Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include membership
or participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.)

                                      -92-

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