Document:

exv10w1

 

PRIDE INTERNATIONAL, INC.

EMPLOYMENT/NON-COMPETITION/

CONFIDENTIALITY AGREEMENT

JONATHAN R. A. S. TALBOT

 

 

EMPLOYMENT/NON-COMPETITION/CONFIDENTIALITY AGREEMENT

	 	 	 
	DATE:

	 	The date of execution set forth below.
	 
	 	 
	COMPANY/EMPLOYER:

	 	Pride International, Inc.,
	

	 	a Delaware corporation
	

	 	5847 San Felipe, Suite 3300
	

	 	Houston, Texas 77057
	 
	 	 
	EMPLOYEE:

	 	Jonathan R. A. S. Talbot
	

	 	12222 Cobblestone
	

	 	Houston, TX 77024-2956

     This Employment/Non-Competition/Confidentiality Agreement by and between
Pride International, Inc. (the “Company” and as further defined below) and
Jonathan R. A. S. Talbot (“Employee”) dated as of the date set forth on the
signature page below (the “Agreement”), but effective as of the date set forth
in Section 2.04 below, is made on the terms as herein provided.

PREAMBLE

     WHEREAS, the Company wishes to attract and retain well-qualified employees
and key personnel and to assure itself of the continuity of its management;

     WHEREAS, the Company recognizes that Employee will serve as a valuable
resource of the Company, and the Company desires to be assured of the continued
services of Employee;

     WHEREAS, the Company desires to obtain assurances that Employee will
devote his best efforts to his employment with the Company and will not enter
into competition with the Company in its business as now conducted and to be
conducted, or solicit customers or other employees of the Company to terminate
their relationships with the Company;

     WHEREAS, Employee will serve as a key employee of the Company, and he
acknowledges that his talents and services to the Company are of a special,
unique, unusual and extraordinary character and are of particular and peculiar
benefit and importance to the Company;

     WHEREAS, the Company is concerned that in the event of a possible or
threatened Change in Control (as defined below) of the Company, Employee may
feel insecure, and therefore the Company desires to provide security to
Employee in the event of a Change in Control;

 

 

     WHEREAS, the Company further desires to assure Employee that if a possible
or threatened Change in Control should arise and Employee should be involved in
deliberations or negotiations in connection therewith, Employee would be in a
secure position to consider and participate in such transaction as objectively
as possible in the best interests of the Company and to this end desires to
protect Employee from any direct or implied threat to his financial well-being
by a Change in Control;

     WHEREAS, Employee is willing to continue to serve the Company but desires
assurances that in the event of such a Change in Control he will continue to
have the employment status and responsibilities he could reasonably expect
absent such event and, that in the event this turns out not to be the case, he
will have fair and reasonable severance protection on the basis of his service
to the Company to that time;

     WHEREAS, different factors impact the Company and Employee under
circumstances of regular employment between the Company and Employee when there
is no threat of Change in Control and/or none has occurred, as opposed to
circumstances under which a Change in Control is rumored, threatened, occurring
or has occurred. For this reason, the Agreement deals with the regular
employment of Employee under circumstances whereby no Change in Control is
threatened, occurring or has occurred (“Regular Employment”) and it deals with
circumstances whereby a Change in Control is threatened, occurring or has
occurred. The Agreement deals with matters impacting both Regular Employment
and employment following a Change in Control, including non-competition and
confidentiality; and

     WHEREAS, Employee is willing to enter into and carry out the
non-competition and confidentiality obligations and covenants set forth herein
in consideration of the Agreement.

AGREEMENT

     NOW, THEREFORE, Employee and the Company (together the “Parties”) agree as
follows:

I. PRIOR AGREEMENTS/CONTRACTS

	 	1.01	 	PRIOR AGREEMENTS. Employee represents and warrants to the
Company that (i) he has no continuing non-competition agreements
with any prior employers that have not been disclosed in writing to
the Company and (ii) neither the execution of the Agreement by
Employee or the performance by Employee of his obligations under the
Agreement will result in a violation or breach of, or constitute a
default under the provisions of any contract, agreement or other
instrument to which Employee is or was a party.

II. DEFINITION OF TERMS

	 	2.01	 	COMPANY. Company means Pride International, Inc., a Delaware
corporation, as the same presently exists, as well as any and all
successors, regardless of the nature of the entity or the state or
nation of organization, whether by reorganization, merger,
consolidation, absorption or dissolution. For the purpose

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	 	 	 	of the Agreement, Company includes all subsidiaries and affiliates
of the Company to the extent such subsidiary and/or affiliate is
carrying on any portion of the business of the Company or a
business similar to that being conducted by the Company.

	 	2.02	 	EXECUTIVE/OFFICER/EMPLOYEE. Executive/Officer/Employee means
Jonathan R. A. S. Talbot.
	 
	 	2.03	 	OFFICE/POSITION/TITLE. The Office, Position and Title for
which the Employee is employed is that of Vice President – Marketing
of the Company and carries with it such duties, responsibilities,
rights, benefits and privileges as may reasonably be assigned to the
Employee as are customary and usual for such position.
	 
	 	2.04	 	EFFECTIVE DATE. The Agreement becomes effective and binding
as of August 13, 2004.
	 
	 	2.05	 	CHANGE IN CONTROL. The term “Change in Control” of the
Company shall mean, and shall be deemed to have occurred on the date
of the first to occur of any of the following:

	 	a.	 	there occurs a change in control of the Company
of the nature that would be required to be reported in
response to item 6(e) of Schedule 14A of Regulation 14A or
Item 1 of Form 8(k) promulgated under the Securities Exchange
Act of 1934 as in effect on the date of the Agreement, or if
neither item remains in effect, any regulations issued by the
Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934 which serve similar purposes;
	 
	 	b.	 	any “person” (as such term is used in Sections
12(d) and 14(d)(2) of the Securities Exchange Act of 1934) is
or becomes a beneficial owner, directly or indirectly, of
securities of the Company representing twenty percent (20%) or
more of the combined voting power of the Company’s then
outstanding securities;
	 
	 	c.	 	the individuals who were members of the Board of
Directors of the Company (the “Board”) immediately prior to a
meeting of the shareholders of the Company involving a contest
for the election of directors shall not constitute a majority
of the Board of Directors following such election;
	 
	 	d.	 	the Company shall have merged into or
consolidated with another corporation, or merged another
corporation into the Company, on a basis whereby less than
fifty percent (50%) of the total voting power of the surviving
corporation is represented by shares held by former
shareholders of the Company prior to such merger or
consolidation; or

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	 	e.	 	the Company shall have sold, transferred or
exchanged all, or substantially all, of its assets to another
corporation or other entity or person.

	 	2.06	 	TERMINATION. The term “Termination” shall mean termination
of the employment of Employee with the Company (including death and
disability (as described below)) for any reason other than cause (as
described below) or voluntary resignation (as described below).
Termination includes “Constructive Termination” as described below.
Termination includes termination at the end of any “Employment
Period” (as hereinafter defined) due to non-renewal or failure to
extend this Agreement for any reason except for cause.

	 	a.	 	The term “disability” means physical or mental
incapacity qualifying Employee for a long-term disability
under the Company’s long-term disability plan. If no such
plan exists on the Effective Date, the term “disability” means
physical or mental incapacity as determined by a doctor
jointly selected by Employee and the Board of Directors of the
Company qualifying Employee for long-term disability under
reasonable employment standards.
	 
	 	b.	 	The term “cause” means: (i) the willful and
continued failure of Employee substantially to perform his
duties with the Company (other than any failure due to
physical or mental incapacity) after a demand for substantial
performance is delivered to him by the Board of Directors
which specifically identifies the manner in which the Board
believes he has not substantially performed his duties, (ii)
willful misconduct materially and demonstrably injurious to
the Company, or (iii) material violation of the covenant not
to compete (except after termination after Change in Control
as discussed herein). No act or failure to act by Employee
shall be considered “willful” unless done or omitted to be
done by him not in good faith and without reasonable belief
that his action or omission was in the best interest of the
Company. The unwillingness of Employee to accept any or all
of a change in the nature or scope of his position,
authorities or duties, a reduction in his total compensation
or benefits, or other action by or at request of the Company
in respect of his position, authority, or responsibility that
is contrary to this Agreement, may not be considered by the
Board of Directors to be a failure to perform or misconduct by
Employee. Notwithstanding the foregoing, Employee shall not
be deemed to have been terminated for cause for purposes of
the Agreement unless and until there shall have been delivered
to him a copy of a resolution, duly adopted by a vote of
three-fourths of the entire Board of Directors of the Company
at a meeting of the Board of Directors called and held (after
reasonable notice to Employee and an opportunity for Employee
and his counsel to be heard before the Board) for the purpose
of considering whether Employee has been guilty of such a
willful failure to perform or such willful misconduct as
justifies termination for cause hereunder, finding that in the
good faith opinion of the Board of Directors Employee has been
guilty thereof and specifying the particulars thereof.

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	 	c.	 	The term “Constructive Termination” means any
circumstance by which the actions of the Company either reduce
or change Employee’s title, position, duties, responsibilities
or authority to such an extent or in such a manner as to
relegate Employee to a position not substantially similar to
that which he held prior to such reduction or change and which
would degrade, embarrass or otherwise make it unreasonable for
Employee to remain in the employment of the Company; and
includes a violation by the Company of the employment
provisions and conditions of this Agreement.
	 
	 	d.	 	The resignation of Employee shall be deemed
“voluntary” if it is for any reason other than one or more of
the following:

	 	(i)	 	Employee’s resignation or retirement
is requested by the Company other than for cause;
	 
	 	(ii)	 	Any significant adverse change in the
nature or scope of Employee’s position, authorities or
duties from those described in this Agreement;
	 
	 	(iii)	 	Any reduction in Employee’s total
compensation or benefits from that provided in the
Compensation and Benefits Section hereof;
	 
	 	(iv)	 	The material breach by the Company of
any other provision of this Agreement;
	 
	 	(v)	 	Any requirement of the Company that
Employee relocate more than 50 miles from downtown
Houston, Texas;
	 
	 	(vi)	 	Any action by the Company which would
constitute Constructive Termination; or
	 
	 	(vii)	 	Non-renewal or failure to extend any
employment term, contrary to the wishes of Employee.

Termination that entitles Employee to the payments and benefits provided
in Section 3.05 or 4.02 hereof shall not be deemed or treated by the
Company as the termination of Employee’s employment or the forfeiture of
his participation, award, or eligibility, for the purpose of any plan,
practice or agreement of the Company referred to in the Compensation and
Benefits Section hereof, if, and to the extent that, such benefits are
provided under Section 3.05 or 4.02 hereof.

	 	2.07	 	CUSTOMER. The term “Customer” includes all persons, firms or
entities that are purchasers or end-users of services or products
offered, provided, developed, designed, sold or leased by the
Company during the relevant time periods, and all persons, firms or
entities which control, or which are controlled by, the same person,
firm or entity which controls such purchase.

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III. EMPLOYMENT

	 	3.01	 	EMPLOYMENT. Except as otherwise provided in the Agreement,
the Company hereby agrees to continue Employee in its employ, and
Employee hereby agrees to remain in the employ of the Company, for
the Employment Period (as defined below). During the Employment
Period (as defined below), Employee shall exercise such position and
authority and perform such responsibilities as are commensurate with
such.
	 
	 	3.02	 	BEST EFFORTS AND OTHER EMPLOYMENT OBLIGATIONS OF EMPLOYEE;
BUSINESS EXPENSES AND OFFICE AND OTHER SERVICES.

	 	a.	 	Employee agrees that he will at all times
faithfully, industriously and to the best of his ability,
experience and talents, perform all of the duties that may be
required of and from him pursuant to the express and implicit
terms hereof, to the reasonable satisfaction of the Company.
Said duties shall be rendered at Houston, Texas, and such
other place or places within or without the State of Texas as
the Company and Employee shall agree.
	 
	 	b.	 	Employee shall devote his normal and regular
business time, attention and skill to the business and
interests of the Company, and the Company shall be entitled to
all of the benefits, profits or other issue arising from or
incident to all work, services and advice of Employee
performed for the Company. Such employment shall be
considered “full time” employment. Employee shall also have
the right to devote such incidental and immaterial amounts of
his time which are not required for the full and faithful
performance of his duties hereunder to any outside activities
and businesses which are not being engaged in by the Company
and which shall not otherwise interfere with the performance
of his duties hereunder. Notwithstanding the foregoing, it
shall not be a violation of the Agreement for Employee to (i)
serve on corporate, civic or charitable boards or committees,
(ii) deliver lectures, fulfill speaking engagements or teach
at educational institutions and (iii) manage personal
investments, so long as such activities do not significantly
interfere with the performance of Employee’s responsibilities
hereunder. Employee shall have the right to make investments
in any business provided such investment does not result in a
violation of the Non-Competition Section of this Agreement.
	 
	 	c.	 	Employee acknowledges and agrees that Employee
owes a fiduciary duty to the Company. In keeping with these
duties, Employee shall make full disclosure to the Company of
all business opportunities pertaining to the Company’s
business and shall not appropriate for Employee’s own benefit
business opportunities concerning the subject matter of the
fiduciary relationship.

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	 	d.	 	Employee shall not intentionally take any action
which he knows would not comply with United States laws
applicable to Employee’s actions on behalf of the Company,
and/or any of its subsidiaries or affiliates, including
specifically, without limitation, the United States Foreign
Corrupt Practices Act, generally codified in 15 USC 78 (the
“FCPA”), as the FCPA may hereafter be amended, and/or its
successor statutes.
	 
	 	e.	 	During the employment relationship and after the
employment relationship terminates, Employee agrees to refrain
from any disparaging comments about the Company, any
affiliates, or any current or former officer, director or
employee of the Company or any affiliate, and Employee agrees
not to take any action, or assist any person in taking any
other action, that is materially adverse to the interests of
the Company or any affiliate or inconsistent with fostering
the goodwill of the Company and its affiliates; provided,
however, that nothing in this Agreement shall apply to or
restrict in any way the communication of information by
Employee to any state or federal law enforcement agency or
require notice to the Company thereof, and Employee will not
be in breach of the covenant contained above solely by reason
of his testimony which is compelled by process of law. The
Company and its affiliates, officers and directors agree to
refrain from any disparaging comments about Employee;
provided, however, that nothing in this Agreement shall apply
to or restrict in any way the communication of information by
the Company and its affiliates, officers and directors to any
state or federal law enforcement agency or require notice to
Employee thereof, and the Company and its affiliates, officers
and directors will not be in breach of the covenant contained
above solely by reason of testimony which is compelled by
process of law.
	 
	 	f.	 	During the Employment Period, Employee shall be
entitled to receive prompt reimbursement for all reasonable
expenses incurred by Employee in accordance with the most
favorable policies, practices and procedures of the Company as
in effect from time to time.
	 
	 	g.	 	During the Employment Period, the Company shall
furnish Employee with office space, secretarial assistance and
such other facilities and services as shall be suitable to
Employee’s position and adequate for the performance of
Employee’s duties hereunder.

	 	3.03	 	TERM OF EMPLOYMENT. Employee’s Regular Employment will
commence on the Effective Date and will be for a term ending at
12:00 o’clock midnight on August 13, 2005 (the “Employment Period”);
thereafter, the Employment Period will be automatically extended for
successive terms of one (1) year commencing on each anniversary of
the Effective Date, unless the Company or Employee gives written
notice to the other that employment will not be renewed or continued
after the next scheduled expiration date which is not less than one
(1) year after the date that the notice of non-renewal was given.

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	 	3.04	 	COMPENSATION AND BENEFITS. During the Employment Period
Employee shall receive the following compensation and benefits:

	 	a.	 	Employee will receive an annual base salary of
not less than $182,500.00, with the opportunity for increases,
from time to time thereafter, which are in accordance with the
Company’s regular executive compensation practices (the
“Annual Base Salary”). The Annual Base Salary will be
reviewed at least annually, but in no event earlier than
December 2004.
	 
	 	b.	 	Employee will be eligible to participate on a
reasonable basis in annual bonus, stock option and other
incentive compensation plans which provide opportunities to
receive compensation in addition to his Annual Base Salary
which are at least equal to the opportunities provided by the
Company for executives with comparable duties.
	 
	 	c.	 	Employee will be entitled to receive and
participate in employee benefits (including, but not limited
to, medical, life, health, accident and disability insurance
and disability benefits) and perquisites which are at least
equal to those provided by the Company to executives with
comparable duties.
	 
	 	d.	 	Employee will receive paid vacation days each
year to the same extent as provided to executives with
comparable duties.
	 
	 	e.	 	Employee shall receive a monthly automobile
allowance in an amount not less than $750.00.
	 
	 	f.	 	Employee will participate, or if dependent on
Employee’s election, will be eligible to participate in all
other executive incentive stock and benefit plans approved and
offered by the Company.

	 	3.05	 	TERMINATION WITHOUT CHANGE IN CONTROL. Notwithstanding
anything herein to the contrary, the Company shall have the right to
terminate Employee’s employment at any time during the Employment
Period (including any extended term). Should the Company choose not
to renew or extend the Employment Period of the Agreement or choose
to terminate Employee during, or at the end of, the Employment
Period, or in the event of death or disability of Employee, if the
termination is not after a Change in Control and is not for cause,
the Company shall, within thirty (30) days following such
termination, pay or provide to Employee (or his Executor,
Administrator or Estate in the event of death, as soon as reasonably
practical):

	 	a.	 	An amount equal to one (1) full year of his base
salary, which base salary is here defined as twelve (12) times
the then current monthly salary in effect for Employee and all
other benefits due him based upon the salary in effect on the
date of Termination (but not less than the highest annual base
salary paid to Employee during any of the three (3) years
immediately preceding his date of Termination). There shall
be deducted

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	 	 	 	only such amounts as may be required by law to be withheld
for taxes and other applicable deductions.

	 	b.	 	The Company shall provide to Employee for a
period of one (1) full year following the date of his
Termination, life, health, accident and disability insurance
coverages which are not less than the highest benefits
furnished to Employee during the term of this Agreement.
	 
	 	c.	 	An amount equal to the target award for Employee
under the Company’s annual bonus plan for the fiscal year in
which Termination occurs; provided, however, that (i) if
Employee has deferred his award for such year under a Company
plan, the payment due Employee under this subparagraph shall
be paid in accordance with the terms of the deferral or as
specified by Employee and (ii) if the Company has not
specified a target award for such year, the amount will be
equal to fifty percent (50%) of the maximum percentage of
Employee’s Annual Base Salary Employee may be entitled to
under the Company’s annual bonus plan in such year.
	 
	 	d.	 	The Company will pay, distribute and otherwise
provide to Employee the amount and value of his entire plan
account and interest under any retirement plan, employee
benefit plan, investment plan or stock ownership plan, if any
exists on the date of his Termination, and all employer
contributions made or payable to any such plan for his account
prior to the end of the month in which his termination occurs
shall be deemed vested and payable to him; provided, however,
that in the event any such employer contributions are
prohibited from being deemed vested and payable for any reason
(other than due to a lack of Employee’s consent), the total
amount of such employer contributions shall be paid to
Employee in a lump sum outside of any such plan. Such payment
or distribution shall be made in accordance with the elections
made by Employee with respect to distributions in accordance
with the plan as if Employee’s employment with the Company
terminated at the end of the month in which Termination
occurs.
	 
	 	e.	 	All stock options and awards to which Employee is
entitled will immediately vest and the time for exercising any
option will extend for 120 days following such termination of
employment, or such later date as shall be specified in the
applicable plan and award agreement; provided, however, that
in no event shall the time for exercising an option extend
beyond the original term of the option.
	 
	 	f.	 	With respect to any qualified or non-qualified
retirement pension plan that may be adopted by the Company
after the Effective Date, if Employee elects to treat
Termination as retirement then on the date of Termination,
Employee shall be deemed to have retired from the Company. At
that time, or at such later time as he may elect consistent
with the terms of any such applicable plan or benefit, in
order to receive benefits or avoid or

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	 	 	 	minimize any applicable early pension reduction provisions,
he shall be entitled to commence to receive the retirement
benefits to which he is entitled under such plan(s).
Employee may treat the termination as termination other than
“retirement” if Employee so elects and may defer “retirement”
to a later date if permitted by any applicable plan(s).

	 	g.	 	The “Compensation and Benefits” section hereof
shall be applicable in determining the payments and benefits
due Employee under this section and if Termination occurs
after a reduction in all or part of Employee’s total
compensation or benefits, the lump sum severance allowance and
other compensation and benefits payable to him pursuant to
this section shall be based upon his compensation and benefits
before the reduction.
	 
	 	h.	 	If any provision of this Section cannot, in whole
or in part, be implemented and carried out under the terms of
the applicable compensation, benefit or other plan or
arrangement of the Company because Employee has ceased to be
an actual employee of the Company, due to insufficient or
reduced credited service based upon his actual employment by
the Company or because the plan or arrangement has been
terminated or amended after the Effective Date, or for any
other reason, the Company itself shall pay or otherwise
provide the equivalent of such rights, benefits and credits
for such benefits to the Employee, his dependents,
beneficiaries and estate as if Employee’s employment had not
been terminated.
	 
	 	i.	 	All life, health, hospitalization, medical and
accident benefits available to Employee’s spouse and
dependents shall continue for the same term as Employee’s
benefits. If Employee dies, all benefits will be provided for
a term of one (1) year (or two (2) years if after a Change in
Control) after the date of death of Employee.
	 
	 	j.	 	The Company’s obligation under this Section to
continue to pay or provide health care, life, accident and
disability insurance to Employee, Employee’s spouse and
Employee’s dependents shall be reduced when and to the extent
any such benefits are paid or provided to Employee by another
employer; provided, however, that Employee shall have all
rights, if any, afforded to retirees to convert group life
insurance coverage to the individual life insurance coverage
as, to the extent of, and whenever his group life insurance
coverage under this Section is reduced or expires. Apart from
this subparagraph, Employee shall have and be subject to no
obligation to mitigate.
	 
	 	k.	 	The Company shall deduct applicable withholding
taxes in performing its obligations under this Section.

Nothing in this Section is intended, nor shall be deemed or interpreted,
to be an amendment to any compensation, benefit or other plan of the
Company. To the extent

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the Company’s performance under this Section includes the performance of
the Company’s obligations to Employee under any other plan or under
another agreement between the Company and Employee, the rights of
Employee under such other plan or other agreement, which are discharged
under the Agreement, are discharged, surrendered, or released pro tanto.

IV. CHANGE IN CONTROL

	 	4.01	 	EXTENSION OF EMPLOYMENT PERIOD. Upon any Change in Control,
the Employment Period shall be immediately and without further
action extended for a term of two (2) years following the effective
date of the Change in Control and will expire at 12:00 o’clock
midnight on the last day of the month following two (2) years after
the Change in Control. Thereafter, the Employment Period will be
extended for successive terms of one (1) year each, unless
terminated, all in the manner specified in Section 3.03.
	 
	 	4.02	 	CHANGE IN CONTROL TERMINATION PAYMENTS AND BENEFITS. In the
event Employee is terminated within two (2) years following a Change
in Control, Employee will receive the payments and benefits
specified in the “Termination Without Change in Control” Section at
the same time and in the same manner therein specified except as
amended and modified below:

	 	a.	 	The salary and benefits specified in Section
3.05a. will be paid based upon a multiple of two (2) years
(instead of one (1) year).
	 
	 	b.	 	Life, health, accident and disability insurance
specified in Section 3.05b. will be provided until (i)
Employee becomes reemployed and receives similar benefits from
a new employer or (ii) two (2) years after the date of
Termination, whichever is earlier.
	 
	 	c.	 	An amount equal to two (2) times the maximum
award that Employee could receive under the Company’s annual
bonus plan for the fiscal year in which the Termination
occurs, instead of the benefits provided in Section 3.05c
hereof.
	 
	 	d.	 	Section 3.05e is modified such that the time for
exercising any option will extend to the later of (i) the date
that is two (2) years after the date of the Change in Control
or (ii) the date that is 120 days after the date of Employee’s
Termination; provided, however, that in no event shall the
time for exercising an option extend beyond the original term
of the option.
	 
	 	e.	 	All other rights and benefits specified in
Section 3.05.

	 	4.03	 	VOLUNTARY RESIGNATION UPON CHANGE IN CONTROL. If Employee
voluntarily resigns his employment within six (6) months after a
Change in Control (whether or not the Company may be alleging the
right to terminate employment for cause), he will receive the same
payments, compensation and

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	 	 	 	benefits as if he had had a Termination on the date of resignation
after Change in Control.

V. NON COMPETITION AND CONFIDENTIALITY/PROTECTION OF INFORMATION

	 	5.01	 	CONSIDERATION. Employee recognizes that in each of the
highly competitive businesses in which the Company is engaged, the
Company’s trade secrets and other confidential information, along
with personal contacts, are of primary importance in securing and
maintaining business prospects, in retaining the accounts and
goodwill of present Customers and protecting the business of the
Company. Employee, therefore, agrees that in exchange for the
provision of trade secrets and other confidential information, he
will agree to the non-competition and confidentiality obligations
and covenants outlined in this Section V.
	 
	 	5.02	 	NON-COMPETITION. In exchange for the consideration described
above in Section 5.01, Employee agrees that during his employment
with the Company and for a period of six (6) months after he is no
longer employed by the Company (unless his employment is terminated
after a Change in Control, in which event there will be no covenant
not to compete and the noncompete covenants and obligations herein
will terminate on the date of termination of Employee), Employee
will not, directly or indirectly, either as an individual,
proprietor, stockholder (other than as a holder of up to one percent
(1%) of the outstanding shares of a corporation whose shares are
listed on a stock exchange or traded in accordance with the
automated quotation system of the National Association of Securities
Dealers), partner, officer, employee or otherwise:

	 	a.	 	work for, become an employee of, invest in,
provide consulting services to or in any way engage in any
business which (i) is primarily engaged in the drilling and
workover of oil and gas wells within the geographical area
described in Section 5.02(e) and (ii) actually competes to a
substantial extent with the Company; or
	 
	 	b.	 	provide, sell, offer to sell, lease, offer to
lease, or solicit any orders for any products or services
which the Company provided and with regard to which Employee
had direct or indirect supervision or control, within one (1)
year preceding Employee’s termination of employment, to or
from any person, firm or entity which was a Customer for such
products or services of the Company during the one (1) year
preceding such termination from whom the Company had solicited
business during such one (1) year; or

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	 	c.	 	solicit, aid, counsel or encourage any officer,
director, employee or other individual to (i) leave his or her
employment or position with the Company, (ii) compete with the
business of the Company, or (iii) violate the terms of any
employment, non-competition or similar agreement with the
Company; or
	 
	 	d.	 	employ, directly or indirectly, permit the
employment of, contract for services or work to be performed
by, or otherwise use, utilize or benefit from the services of
any officer, director, employee or any other individual
holding a position with the Company within two (2) years after
the date of termination of employment of Employee with the
Company or within two (2) years after such officer, director,
employee or individual terminated employment with the Company,
whichever period expires earlier; provided however, Employee
can seek written consent from the Company to hire an officer,
director, employee or individual who has terminated employment
with the Company, and Company consent will not be unreasonably
withheld.
	 
	 	e.	 	The geographical area within which the
non-competition obligations and covenants of the Agreement
shall apply is that territory within two hundred (200) miles
of (i) any of the Company’s present offices, (ii) any of the
Company’s present rig yards and (iii) any additional location
where the Company, as of the date of any action taken in
violation of the non-competition obligations and covenants of
the Agreement, has an office, a rig yard, or definitive plans
to locate an office or a rig yard. Notwithstanding the
foregoing, if the two hundred (200) mile radius extends into
another country or its territorial waters and the Company is
not then doing business in that other country, there will be
no territorial limitations extending into such other country.

	 	5.03	 	CONFIDENTIALITY/PROTECTION OF INFORMATION. Employee
acknowledges that his employment with the Company will, of
necessity, provide him with specialized knowledge which, if used in
competition with the Company, or divulged to others, could cause
serious harm to the Company. Accordingly, Employee will not at any
time during or after his employment by the Company, directly or
indirectly, divulge, disclose or communicate to any person, firm or
corporation in any manner whatsoever any information concerning any
matter affecting or relating to the Company or the business of the
Company. While engaged as an employee of the Company, Employee may
only use information concerning any matters affecting or relating to
the Company or the business of the Company for a purpose which is
necessary to the carrying out of Employee’s duties as an employee of
the Company, and Employee may not make use of any information of the
Company after he is no longer an employee of the Company. Employee
agrees to the foregoing without regard to whether all of the
foregoing matters will be deemed confidential, material or
important, it being stipulated by the parties that all information,
whether written or otherwise, regarding the Company’s business,
including, but not limited to, information regarding Customers,
Customer lists, costs, prices, earnings, products, services,
formulae, compositions, machines, equipment, apparatus, systems,
manufacturing procedures, operations, potential acquisitions, new
location plans, prospective and executed contracts and other
business arrangements, and sources of supply, is prima facie
presumed to be important, material and confidential information of
the Company for the purposes of the Agreement, except to the extent
that such

-13-

 

	 	 	 	information may be otherwise lawfully and readily available to the
general public. Employee further agrees that he will, upon
termination of his employment with the Company, return to the
Company all books, records, lists and other written, electronic,
typed or printed materials, whether furnished by the Company or
prepared by Employee, which contain any information relating to the
Company’s business, and Employee agrees that he will neither make
nor retain any copies of such materials after termination of
employment. Notwithstanding any of the foregoing, nothing in this
Agreement shall prevent Employee from complying with applicable
federal and/or state laws. Notwithstanding any of the foregoing,
Employee will not be liable for any breach of these confidentiality
provisions unless the same constitutes a material detriment to the
Company, or due to the nature of the information divulged and the
manner in which it was divulged and the person to whom it was
divulged it would likely cause damage to the Company or constitute
a material detriment to the Company.

	 	5.04	 	COMPANY REMEDIES FOR VIOLATION OF NON-COMPETITION OR
CONFIDENTIALITY/PROTECTION OF INFORMATION PROVISIONS. Without
limiting the right of the Company to pursue all other legal and
equitable rights available to it for violation of any of the
obligations and covenants made by Employee herein, it is agreed
that:

	 	a.	 	the skills, experience and contacts of Employee
are of a special, unique, unusual and extraordinary character
which give them a peculiar value;
	 
	 	b.	 	because of the business of the Company, the
restrictions agreed to by Employee as to time and area
contained in the Agreement are reasonable; and
	 
	 	c.	 	the injury suffered by the Company by a violation
of any obligation or covenant in the Agreement resulting from
loss of profits created by (i) the competitive use of such
skills, experience contacts and otherwise and/or (ii) the use
or communication of any information deemed confidential herein
will be difficult to calculate in damages in an action at law
and cannot fully compensate the Company for any violation of
any obligation or covenant in the Agreement, accordingly:

	 	(i)	 	the Company shall be
entitled to injunctive relief to prevent
violations thereof and prevent Employee from
rendering any services to any person, firm or
entity in breach of such obligation or covenant
and to prevent Employee from divulging any
confidential information; and
	 
	 	(ii)	 	compliance with the
Agreement is a condition precedent to the
Company’s obligation to make payments of any
nature to Employee, subject to the other
provisions hereof.

-14-

 

	 	5.05	 	TERMINATION OF BENEFITS FOR VIOLATION OF NON-COMPETITION AND
CONFIDENTIALITY/PROTECTION OF INFORMATION PROVISIONS. If Employee
materially violates the confidentiality/protection of information
and/or non-competition obligations and covenants herein or any other
related agreement he may have signed as an employee of the Company,
Employee agrees there shall be no obligation on the part of the
Company to provide any payments or benefits (other than payments or
benefits already earned or accrued) described in Section 3.05 of the
Agreement, subject to the provision of Section 6.01 hereof. There
will be no withholding of benefits or payments due to a violation of
the non-competition obligations hereof if the termination occurred
after a Change in Control, and Employee will not be bound by the
non-competition provisions if terminated after a Change in Control.
	 
	 	5.06	 	REFORMATION OF SCOPE. If the provisions of the
confidentiality and/or non-competition obligations and covenants
should ever be deemed to exceed the time, geographic or occupational
limitations permitted by the applicable law, Employee and the
Company agree that such provisions shall be and are hereby reformed
to the maximum time, geographic or occupational limitations
permitted by the applicable law, and the determination of whether
Employee violated such obligation and covenant will be based solely
on the limitation as reformed.

VI. GENERAL

	 	6.01	 	ENFORCEMENT COSTS. The Company is aware that upon the
occurrence of a Change in Control, or under other circumstances even
when a Change in Control has not occurred, the Board of Directors or
a stockholder of the Company may then cause or attempt to cause the
Company to refuse to comply with its obligations under the
Agreement, or may cause or attempt to cause the Company to
institute, or may institute, litigation seeking to have the
Agreement declared unenforceable, or may take, or attempt to take
other action to deny Employee the benefits intended under the
Agreement; or actions may be taken to enforce the non-competition or
confidentiality provisions of the Agreement. In these
circumstances, the purpose of the Agreement could be frustrated. It
is the intent of the parties that Employee not be required to incur
the legal fees and expenses associated with the protection or
enforcement of his rights under the Agreement by litigation or other
legal action because such costs would substantially detract from the
benefits intended to be extended to Employee hereunder nor be bound
to negotiate any settlement of his rights hereunder under threat of
incurring such costs. Accordingly, if at any time after the
Effective Date, it should appear to Employee that the Company is or
has acted contrary to or is failing or has failed to comply with any
of its obligations under the Agreement for the reason that it
regards the Agreement to be void or unenforceable, that Employee has
violated the terms of the Agreement, or for any other reason, or
that the Company has purported to terminate his employment for cause
or is in the course of doing so, or is withholding payments or
benefits, or is threatening to withhold payments or benefits,
contrary to the Agreement, or in the event that the Company or any
other person takes any action to declare the Agreement void or
unenforceable, or

-15-

 

	 	 	 	institutes any litigation or other legal action designed to deny,
diminish or to recover from Employee the benefits provided or
intended to be provided to him hereunder, and Employee has acted in
good faith to perform his obligations under the Agreement, the
Company irrevocably authorizes Employee from time to time to retain
counsel of his choice at the expense of the Company to represent
him in connection with the protection and enforcement of his rights
hereunder including, without limitation, representation in
connection with termination of his employment or withholding of
benefits or payments contrary to the Agreement or with the
initiation or defense of any litigation or any other legal action,
whether by or against Employee or the Company or any director,
officer, stockholder or other person affiliated with the Company,
in any jurisdiction. The Company is not authorized to withhold the
periodic payments of attorney’s fees and expenses hereunder based
upon any belief or assertion by the Company that Employee has not
acted in good faith or has violated the Agreement. If the Company
subsequently establishes that Employee was not acting in good faith
and has violated the Agreement, Employee will be liable to the
Company for reimbursement of amounts paid due to Employee’s actions
not based on good faith and in violation of the Agreement. The
reasonable fees and expenses of counsel selected from time to time
by Employee hereinabove provided shall be paid or reimbursed to
Employee by the Company, on a regular, periodic basis within thirty
(30) days after presentation by Employee of a statement or
statements prepared by such counsel in accordance with its
customary practices, up to a maximum aggregate amount of
$250,000.00.

	 	6.02	 	INCOME, EXCISE OR OTHER TAX LIABILITY. Employee will be
liable for and will pay all income tax liability by virtue of any
payments made to Employee under this Agreement, as if the same were
earned and paid in the normal course of business and not the result
of a Change in Control and not otherwise triggered by the “golden
parachute” or excess payment provisions of the Internal Revenue Code
of the United States, which would cause additional tax liability to
be imposed. If any additional income tax, excise or other taxes are
imposed on any amount or payment in the nature of compensation paid
or provided to or on behalf of Employee, the Company shall
“gross-up” Employee for such tax liability by paying to Employee an
amount sufficient so that after payment of all such taxes so
imposed, Employee’s position on an after-tax basis is what it would
have been had no such additional taxes been imposed. Employee will
cooperate with the Company to minimize the tax consequences to
Employee and to the Company so long as the actions proposed to be
taken by the Company do not cause any additional tax consequences to
Employee and do not prolong or delay the time that payments are to
be made, or reduce the amount of payments to be made, unless
Employee consents in writing to any delay or deferment of payment.
	 
	 	6.03	 	PAYMENT OF BENEFITS UPON TERMINATION FOR CAUSE. If the
termination of Employee is not after a Change in Control and is for
cause, the Company will have the right to withhold all payments
other than (i) what is accrued and owing under the terms of any
employee benefit plan maintained by the Company, and (ii) those
specified in Section 6.01; provided however, that if a

-16-

 

	 	 	 	final judgment is entered finding that cause did not exist for
termination, the Company will pay all benefits to Employee to which
he would have been entitled had Employee’s termination not been for
cause, plus interest on all amounts withheld from Employee at the
rate specified for judgments under Article 5069-1.05 V.A.T.S. but
not less than ten percent (10%) per annum. If the termination for
cause occurs after a Change in Control, the Company shall not have
the right to suspend or withhold payments to Employee under any
provision of the Agreement until or unless a final judgment is
entered upholding the Company’s determination that the termination
was for cause, in which event Employee will be liable to the
Company for all amounts paid, plus interest at the rate allowed for
judgments under Article 5069-1.05 V.A.T.S.

	 	6.04	 	NON-EXCLUSIVE AGREEMENT. The specific arrangements referred
to herein are not intended to exclude or limit Employee’s
participation in other benefits available to Employee or personnel
of the Company generally, or to preclude or limit other compensation
or benefits as may be authorized by the Board of Directors of the
Company at any time, or to limit or reduce any compensation or
benefits to which Employee would be entitled but for the Agreement.
	 
	 	6.05	 	NOTICES. Notices, requests, demands and other communications
provided for by the Agreement shall be in writing and shall either
be personally delivered by hand or sent by: (i) Registered or
Certified Mail, Return Receipt Requested, postage prepaid, properly
packaged, addressed and deposited in the United States Postal
System; (ii) via facsimile transmission if the receiver acknowledges
receipt; or (iii) via Federal Express or other expedited delivery
service provided that acknowledgment of receipt is received and
retained by the deliverer and furnished to the sender, if to
Employee, at the last address he has filed, in writing, with the
Company, or if to the Company, to its Corporate Secretary at its
principal executive offices.
	 
	 	6.06	 	NON-ALIENATION. Employee shall not have any right to pledge,
hypothecate, anticipate, or in any way create a lien upon any
amounts provided under the Agreement, and no payments or benefits
due hereunder shall be assignable in anticipation of payment either
by voluntary or involuntary acts or by operation of law. So long as
Employee lives, no person, other than the parties hereto, shall have
any rights under or interest in the Agreement or the subject matter
hereof. Upon the death of Employee, his executors, administrators,
devisees and heirs, in that order, shall have the right to enforce
the provisions hereof, to the extent applicable.
	 
	 	6.07	 	ENTIRE AGREEMENT; AMENDMENT. The Agreement constitutes the
entire agreement of the Parties with respect of the subject matter
hereof. No provision of the Agreement may be amended, waived, or
discharged except by the mutual written agreement of the Parties.
The consent of any other person(s) to any such amendment, waiver or
discharge shall not be required.

-17-

 

	 	6.08	 	SUCCESSORS AND ASSIGNS. The Agreement shall be binding upon
and inure to the benefit of the Company, its successors and assigns,
by operation of law or otherwise, including, without limitation, any
corporation or other entity or persons which shall succeed (whether
direct or indirect, by purchase, merger, consolidation or otherwise)
to all or substantially all of the business and/or assets of the
Company, and the Company will require any successor, by agreement in
form and substance satisfactory to Employee, expressly to assume and
agree to perform the Agreement. Except as otherwise provided
herein, the Agreement shall be binding upon and inure to the benefit
of Employee and his legal representatives, heirs and assigns;
provided, however, that in the event of Employee’s death prior to
payment or distribution of all amounts, distributions and benefits
due him hereunder, if any, each such unpaid amount and distribution
shall be paid in accordance with the Agreement to the person or
persons designated by Employee to the Company to receive such
payment or distribution and in the event Employee has made no
applicable designation, to his estate. If the Company should split,
divide or otherwise become more than one entity, all liability and
obligations of the Company shall be the joint and several liability
and obligation of all of the parts.
	 
	 	6.09	 	GOVERNING LAW. Except to the extent required to be governed
by the laws of the State of Delaware because the Company is
incorporated under the laws of said State, the validity,
interpretation and enforcement of the Agreement shall be governed by
the laws of the State of Texas.
	 
	 	6.10	 	VENUE. To the extent permitted by applicable state or
federal law, venue for all proceedings hereunder will be in the U.S.
District Court for the Southern District of Texas, Houston Division.
	 
	 	6.11	 	HEADINGS. The headings in the Agreement are inserted for
convenience of reference only and shall not affect the meaning or
interpretation of the Agreement.
	 
	 	6.12	 	SEVERABILITY. In the event that any provision or portion of
the Agreement shall be determined to be invalid or unenforceable for
any reason, the remaining provisions of the Agreement shall be
unaffected thereby and shall remain in full force and effect.
	 
	 	6.13	 	PARTIAL INVALIDITY. In the event that any part, portion or
section of the Agreement is found to be invalid or unenforceable for
any reason, the remaining provisions of the Agreement shall be
binding upon the parties hereto, and the Agreement will be construed
to give meaning to the remaining provisions of the Agreement in
accordance with the intent of the Agreement.
	 
	 	6.14	 	COUNTERPARTS. The Agreement may be executed in one or more
counterparts, each of which shall be deemed to be original, but all
of which together constitute one and the same instrument.

-18-

 

	 	6.15	 	NO WAIVER. No failure by either party hereto at any time to
give notice of any breach by the other party of, or to require
compliance with, any condition or provision of the Agreement shall
be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time.

     IN WITNESS WHEREOF, Employee has hereunto set his hand and, pursuant to
the authorization from its Board of Directors and the Compensation Committee of
such Board of Directors, the Company has caused these presents to be executed
in its name and on its behalf.

     EXECUTED in multiple originals and/or counterparts as of the date set
forth below.

	 	 	 	 	 
	 	 	 
	 	/s/ Jonathan R. A. S. Talbot

	 	Jonathan R. A. S. Talbot 	 

Date: September 9, 2004

	 	 	 
	 
	ATTEST:

	 	PRIDE INTERNATIONAL, INC.
	 
	 	 
	/s/
W. Gregory Looser

	 	By: /s/ Paul A. Bragg

	W. Gregory Looser

Secretary

	 	Paul A. Bragg

Chief Executive Officer
	 
	 	 
	

	 	Date: September 9, 2004

-19-<PAGE>

                                                                     EXHIBIT 4.5

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. IF YOU ARE IN
ANY DOUBT AS TO THE ACTION TO BE TAKEN, YOU SHOULD IMMEDIATELY CONSULT YOUR
BROKER, BANK MANAGER, LAWYER, ACCOUNTANT, INVESTMENT ADVISOR OR OTHER
PROFESSIONAL.

         This document relates to an exchange offer (the "EXCHANGE OFFER") made
by Berkshire Hathaway Finance Corporation ("BHFC"). The Exchange Offer is
described in the Prospectus, dated [_____], 2004 (the "PROSPECTUS"), and in this
Letter of Transmittal (this "LETTER OF TRANSMITTAL"). All terms and conditions
contained or otherwise referred to in the Prospectus are deemed to be
incorporated in and form a part of this Letter of Transmittal. Therefore, you
are urged to read the Prospectus and the items referred to therein carefully.
The terms and conditions contained in the Prospectus, together with the terms
and conditions governing this Letter of Transmittal and the instructions herein,
are collectively referred to below as the "TERMS AND CONDITIONS."

                              LETTER OF TRANSMITTAL
                                   RELATING TO
               THE OFFER BY BERKSHIRE HATHAWAY FINANCE CORPORATION

                    TO EXCHANGE 3.375% SENIOR NOTES DUE 2008,
             UNCONDITIONALLY GUARANTEED BY BERKSHIRE HATHAWAY INC.

                              ("REGISTERED NOTES")

                                       FOR

                          3.375% SENIOR NOTES DUE 2008,
UNCONDITIONALLY GUARANTEED BY BERKSHIRE HATHAWAY INC., ISSUED ON MARCH 16, 2004

                              ("OUTSTANDING NOTES")

         THE EXCHANGE OFFER FOR THE OUTSTANDING NOTES WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON [______], 2004, UNLESS EXTENDED BY BHFC (THE "EXPIRATION
DATE").

<PAGE>

         Each holder of Outstanding Notes wishing to accept the Exchange Offer,
except holders of Outstanding Notes executing their tenders through the
Automated Tender Offer Program ("ATOP") procedures of The Depository Trust
Company ("DTC"), should complete, sign and submit this Letter of Transmittal to
the exchange agent, J.P. Morgan Trust Company, National Association (as
successor to Bank One Trust Company, N.A.) (the "EXCHANGE AGENT"), on or prior
to the Expiration Date.

                 J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION
                      Institutional Trust Services OH1-0184
                         1111 Polaris Parkway, Suite 1N
                               Columbus, OH 43240
                                 Attn: Exchanges

         DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION
OF INSTRUCTIONS VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE OR IN
ACCORDANCE WITH THE INSTRUCTIONS HEREIN, WILL NOT CONSTITUTE VALID DELIVERY. THE
INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY
BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.

         Questions regarding the Exchange Offer or the completion of this Letter
of Transmittal should be directed to the Exchange Agent, at : 1-800-346-5153.

         This Letter of Transmittal may be used to accept the Exchange Offer if
Outstanding Notes are to be tendered by effecting a book-entry transfer into the
Exchange Agent's account at DTC and instructions are not being transmitted
through DTC's ATOP procedures. Unless you intend to tender Outstanding Notes
through ATOP, you should complete, execute and deliver this Letter of
Transmittal, along with the physical certificates for the Outstanding Notes
specified herein, to indicate the action you desire to take with respect to the
Exchange Offer.

         Holders of Outstanding Notes tendering by book-entry transfer to the
Exchange Agent's account at DTC may execute the tender through ATOP, for which
the Exchange Offer is eligible. Financial institutions that are DTC participants
may execute tenders through ATOP by transmitting acceptance of the Exchange
Offer to DTC on or prior to the Expiration Date. DTC will verify acceptance of
the Exchange Offer, execute a book-entry transfer of the tendered Outstanding
Notes into the account of the Exchange Agent at DTC and send to the Exchange
Agent a "book-entry confirmation," which shall include an agent's message. An
"agent's message" is a message, transmitted by DTC to, and received by, the
Exchange Agent and forming part of a book-entry confirmation, which states that
DTC has received an express acknowledgement from a DTC participant tendering
Outstanding Notes that the participant has received and agrees to be bound by
the terms of the Letter of Transmittal as an undersigned thereof and BHFC may
enforce such agreement against the participant. Delivery of the agent's message
by DTC will satisfy the terms of the Exchange Offer as to execution and delivery
of a Letter of Transmittal by the DTC participant identified in the agent's
message. ACCORDINGLY, HOLDERS WHO TENDER THEIR OUTSTANDING NOTES THROUGH DTC'S
ATOP PROCEDURES SHALL BE BOUND BY, BUT NEED NOT COMPLETE, THIS LETTER OF
TRANSMITTAL.

         Subject to the terms and conditions and applicable law, BHFC will
issue: for each $1,000 principal amount of Outstanding Notes, $1,000 principal
amount of Registered Notes.

         Outstanding Notes may be exchanged in minimum denominations of $1,000
and integral multiples of $1,000 in excess thereof. Registered Notes will be
issued in minimum denominations of $1,000 and integral multiples of $1,000 in
excess thereof.

         Holders that anticipate tendering other than through DTC are urged to
promptly contact a bank, broker or other intermediary (that has the capability
to hold cash and securities custodially through DTC) to arrange for receipt of
any Registered Notes to be delivered pursuant to the Exchange Offer and to
obtain the information necessary to provide the required DTC participant and
account information in this Letter of Transmittal.

         Registered Notes will be issued in exchange for Outstanding Notes in
the Exchange Offer, if consummated, as soon as practicable after the Expiration
Date of the Exchange Offer (the "SETTLEMENT DATE").

                                       2
<PAGE>

                           TENDER OF OUTSTANDING NOTES

         To effect a valid tender of Outstanding Notes through the completion,
execution and delivery of this Letter of Transmittal, the undersigned must
complete the table below entitled "Description of Outstanding Notes Tendered"
and sign the Letter of Transmittal where indicated.

         Registered Notes will be delivered in book-entry form to holders
through DTC and only to the DTC account of the undersigned or the undersigned's
custodian, as specified below, on the Settlement Date, or as soon as practicable
thereafter.

         Failure to provide the information necessary to effect delivery of
Registered Notes will render such holder's tender defective, and BHFC will have
the right, which it may waive, to reject such tender without notice.

                    DESCRIPTION OF OUTSTANDING NOTES TENDERED
                           (SEE INSTRUCTIONS 2 AND 3)

                    NOTE: SIGNATURES MUST BE PROVIDED BELOW.

              PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.

<TABLE>
<CAPTION>
 OUTSTANDING NOTES      NAME OF DTC PARTICIPANT AND PARTICIPANT'S      AGGREGATE PRINCIPAL
   BEING TENDERED       ACCOUNT NUMBER IN WHICH OUTSTANDING NOTES     AMOUNT OF OUTSTANDING
                       ARE HELD AND/OR THE CORRESPONDING REGISTERED          NOTES*
                                NOTES ARE TO BE DELIVERED.
--------------------   --------------------------------------------   ---------------------
<S>                    <C>                                            <C>
3.375% SENIOR NOTES
                       --------------------------------------------   ---------------------
DUE 2008
                       --------------------------------------------   ---------------------

(CUSIP:            )
(CUSIP:           )
</TABLE>

*        THE PRINCIPAL AMOUNT OF OUTSTANDING NOTES TENDERED HEREBY MUST BE IN
         DENOMINATIONS OF U.S.$1,000 AND INTEGRAL MULTIPLES OF U.S.$1,000 IN
         EXCESS THEREOF WITH A MINIMUM TENDER REQUIREMENT OF U.S.$1,000. SEE
         INSTRUCTION 3.

                                       3
<PAGE>

         If the aggregate principal amount of the Outstanding Notes specified
was held as of the date of tender by more than one beneficial owner, you may
specify below the break-down of this aggregate principal amount by beneficial
owner, and, in doing so, hereby instruct the Exchange Agent to treat each such
beneficial owner as a separate holder. If the space below is inadequate, attach
a separate signed schedule using the same format.

<TABLE>
<CAPTION>
BENEFICIAL OWNER NAME OR ACCOUNT   PRINCIPAL AMOUNT OF OUTSTANDING NOTES
            NUMBER
--------------------------------   -------------------------------------
<S>                                <C>
--------------------------------   -------------------------------------

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

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

--------------------------------   -------------------------------------
            TOTAL:
--------------------------------   -------------------------------------
</TABLE>

                           SPECIAL RETURN INSTRUCTIONS

 TO BE COMPLETED ONLY IF OUTSTANDING NOTES NOT ACCEPTED FOR EXCHANGE ARE TO BE
 SENT TO SOMEONE OTHER THAN THE PERSON OR PERSONS WHOSE SIGNATURE(S) APPEAR(S)
                       WITHIN THIS LETTER OF TRANSMITTAL.

                               (SEE INSTRUCTION 5)

<TABLE>
<CAPTION>
             NAME OF DTC PARTICIPANT AND PARTICIPANT'S          *
             ACCOUNT NUMBER TO WHICH OUTSTANDING NOTES
             NOT ACCEPTED FOR EXCHANGE ARE TO BE
             DELIVERED.
-----------  ------------------------------------------  -----------------
<S>          <C>                                         <C>
</TABLE>

                                       4
<PAGE>

                    NOTE: SIGNATURES MUST BE PROVIDED BELOW.
              PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.

LADIES AND GENTLEMEN:

         The undersigned hereby tenders to BHFC the aggregate principal amount
of Outstanding Notes indicated in the table above entitled "Description of
Outstanding Notes Tendered."

         The undersigned understands that validly tendered Outstanding Notes (or
defectively tendered Outstanding Notes with respect to which BHFC has, or has
caused to be, waived such defect) will be deemed to have been accepted by BHFC
if, as and when BHFC gives oral or written notice thereof to the Exchange Agent.
The undersigned understands that subject to the terms and conditions,
Outstanding Notes properly tendered and accepted (and not validly withdrawn) in
accordance with the terms and conditions will be exchanged for Registered Notes.
The undersigned understands that Outstanding Notes delivered hereby may be
withdrawn at any time on or prior to the Expiration Date. The undersigned
understands that Outstanding Notes delivered hereby may not be withdrawn at any
time after the Expiration Date unless the Exchange Offer is extended with
changes in the terms of the Exchange Offer that are, in the reasonable judgment
of BHFC, materially adverse to the tendering holder. The undersigned understands
that, under certain circumstances, BHFC may not be required to accept any of the
Outstanding Notes tendered (including any Outstanding Notes tendered after the
Expiration Date). If any Outstanding Notes are not accepted for exchange for any
reason (or if Outstanding Notes are validly withdrawn), such unexchanged (or
validly withdrawn) Outstanding Notes will be returned without expense to the
undersigned's account at DTC or such other account as designated herein pursuant
to the book-entry transfer procedures described in the Prospectus, as promptly
as practicable after the expiration or termination of the Exchange Offer.

         Following the later of the Expiration Date or the date upon which
Outstanding Notes are tendered hereby, and subject to and effective upon BHFC's
acceptance for exchange of the principal amount of the Outstanding Notes
tendered hereby, upon the terms and conditions, the undersigned hereby:

         (1)      irrevocably sells, assigns and transfers to or upon the order
                  of BHFC or its nominees, all right, title and interest in and
                  to, and any and all claims in respect of or arising or having
                  arisen as a result of the undersigned's status as a holder of,
                  all Outstanding Notes tendered hereby, such that thereafter it
                  shall have no contractual or other rights or claims in law or
                  equity against BHFC or any fiduciary, trustee, fiscal agent or
                  other person connected with the Outstanding Notes arising
                  under, from or in connection with such Outstanding Notes;

         (2)      waives any and all rights with respect to the Outstanding
                  Notes tendered hereby (including, without limitation, any
                  existing or past defaults and their consequences in respect of
                  such Outstanding Notes); and

         (3)      releases and discharges BHFC and J.P. Morgan Trust Company,
                  National Association (as successor to Bank One Trust Company,
                  N.A.), as trustee (THE "TRUSTEE") from any and all claims the
                  undersigned may have, now or in the future, arising out of or
                  related to the Outstanding Notes tendered hereby, including,
                  without limitation, any and all claims that the undersigned is
                  entitled to receive additional principal or interest payments
                  with respect to the Outstanding Notes tendered hereby (other
                  than accrued and unpaid interest on the Outstanding Notes) or
                  to participate in any redemption or defeasance of the
                  Outstanding Notes tendered hereby.

         The undersigned understands that tenders of Outstanding Notes pursuant
to any of the procedures described in the Prospectus and in the instructions in
this Letter of Transmittal and acceptance of such Outstanding Notes by BHFC
will, following such acceptance, constitute a binding agreement between the
undersigned and BHFC upon the terms and conditions.

         All authority conferred or agreed to be conferred by this Letter of
Transmittal shall not be affected by, and shall survive, the death or incapacity
of the undersigned, and any obligation of the undersigned hereunder shall be
binding

                                       5
<PAGE>

upon the heirs, executors, administrators, trustees in bankruptcy, personal and
legal representatives, successors and assigns of the undersigned.

         The undersigned hereby represents, warrants and agrees that:

         (1)      it has received and reviewed the Prospectus;

         (2)      it is the beneficial owner (as defined below) of, or a duly
                  authorized representative of one or more such beneficial
                  owners of, the Outstanding Notes tendered hereby and it has
                  full power and authority to execute this Letter of
                  Transmittal;

         (3)      the Outstanding Notes being tendered hereby were owned as of
                  the date of tender, free and clear of any liens, charges,
                  claims, encumbrances, interests and restrictions of any kind,
                  and BHFC will acquire good, indefeasible and unencumbered
                  title to such Outstanding Notes, free and clear of all liens,
                  charges, claims, encumbrances, interests and restrictions of
                  any kind, when the same are accepted by BHFC;

         (4)      it will not sell, pledge, hypothecate or otherwise encumber or
                  transfer any Outstanding Notes tendered hereby from the date
                  of this Letter of Transmittal and agrees that any purported
                  sale, pledge, hypothecation or other encumbrance or transfer
                  will be void and of no effect;

         (5)      in evaluating the Exchange Offer and in making its decision
                  whether to participate therein by submitting this Letter of
                  Transmittal and tendering its Outstanding Notes, the
                  undersigned has made its own independent appraisal of the
                  matters referred to in the Prospectus and in any related
                  communications and is not relying on any statement,
                  representation or warranty, express or implied, made to such
                  holder by BHFC or the Exchange Agent other than those
                  contained in the Prospectus (as amended or supplemented to the
                  Expiration Date);

         (6)      the execution and delivery of this Letter of Transmittal shall
                  constitute an undertaking to execute any further documents and
                  give any further assurances that may be required in connection
                  with any of the foregoing, in each case on and subject to the
                  terms and conditions;

         (7)      the submission of this Letter of Transmittal to the Exchange
                  Agent shall, subject to a holder's ability to withdraw its
                  tender prior to the Expiration Date, and subject to terms and
                  conditions of the Exchange Offer generally, constitute the
                  irrevocable appointment of the Exchange Agent as its attorney
                  and agent, and an irrevocable instruction to such attorney and
                  agent to complete and execute all or any form(s) of transfer
                  and other document(s) at the discretion of such attorney and
                  agent in relation to the Outstanding Notes tendered hereby in
                  favor of BHFC or such other person or persons as they may
                  direct and to deliver such form(s) of transfer and other
                  document(s) in the attorney's and/or agent's discretion and
                  the certificate(s) and other document(s) of title relating to
                  such Outstanding Notes' registration and to execute all such
                  other documents and to do all such other acts and things as
                  may be in the opinion of such attorney or agent necessary or
                  expedient for the purpose of, or in connection with, the
                  acceptance of the Exchange Offer, and to vest in BHFC or its
                  nominees such Outstanding Notes;

          (8)     it is acquiring the Registered Notes in its ordinary course of
                  business and has no arrangement or understanding with any
                  person to participate in the distribution of the Registered
                  Securities to be received in the Exchange Offer;

          (9)     if it is a broker-dealer holding Outstanding Notes acquired
                  for its own account as a result of market-making or other
                  trading activities, it will deliver a prospectus meeting the
                  requirements of the Securities Act of 1933 in connection with
                  any resale of the Registered Notes received pursuant to the
                  Exchange Offer (provided, that, by so agreeing and by
                  delivering a prospectus, any such broker-dealer will not be
                  deemed to admit that it is an "underwriter" within the meaning
                  of the Securities Act of 1933); and

         (10)     the terms and conditions shall be deemed to be incorporated
                  in, and form a part of, this Letter of Transmittal, and the
                  terms and conditions shall be read and construed accordingly.

         BHFC hereby informs any holder of Outstanding Notes using the Exchange
Offer to participate in a distribution of the Registered Notes to be acquired in
the Exchange Offer that any such holder (1) could not rely on the position of
the SEC's staff enunciated in Exxon Capital Holdings Corporation (pub. avail.
May 13, 1988) or similar letters and (2) must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with a
secondary resale transaction of the Exchange Notes.

         The representations and warranties and agreements of a holder tendering
Outstanding Notes shall be deemed to be repeated and reconfirmed on and as of
the Expiration Date and the Settlement Date. For purposes of this Letter of
Transmittal, the "BENEFICIAL OWNER" of any Outstanding Notes shall mean any
holder that exercises sole investment discretion with respect to such
Outstanding Notes.

         The undersigned understands that tenders may not be withdrawn at any
time after the Expiration Date except as set forth in the Prospectus, unless the
Exchange Offer is extended with changes to the terms and conditions that are, in
the reasonable judgement of BHFC, materially adverse to the undersigned, in
which case tenders may be withdrawn under the conditions described in the
extension.

                                       6
<PAGE>

         If the Exchange Offer is amended in a manner determined by BHFC to be
materially adverse to tendering holders, BHFC will extend the Exchange Offer for
a period of two to ten business days, depending on the significance of the
amendment and the manner of disclosure to such holders, if the Exchange Offer
would otherwise have expired during such two- to ten-business day period. Any
change in the consideration offered to holders of Outstanding Notes in the
Exchange Offer shall be paid to all holders of Outstanding Notes whose
securities have previously been tendered and not withdrawn pursuant to the
Exchange Offer.

         If the "Special Return Instructions" box (found above) is completed,
please credit the indicated DTC account for any book-entry transfers of
Outstanding Notes not accepted for exchange.

         The undersigned recognizes that BHFC has no obligation under the
"Special Return Instructions" provision of this Letter of Transmittal to effect
the transfer of any Outstanding Notes from the holder(s) of such Outstanding
Notes if BHFC does not accept for exchange any of the principal amount of the
Outstanding Notes tendered pursuant to this Letter of Transmittal.

                                       7
<PAGE>

                                    SIGN HERE

         By completing, executing and delivering this Letter of Transmittal, the
undersigned hereby tenders to BHFC the principal amount of the Outstanding Notes
listed in the table set forth above labeled "Description of Outstanding Notes
Tendered."

_________________________________________________________    ___________________
Signature of Registered Holder(s) or Authorized Signatory           Date
          (see guarantee requirement below)

_________________________________________________________    ___________________
Signature of Registered Holder(s) or Authorized Signatory           Date
                    (see guarantee requirement below)

_________________________________________________________    ___________________
Signature of Registered Holder(s) or Authorized Signatory           Date
                    (see guarantee requirement below)

Area Code and Telephone Number:________________________________________________

         If a holder of Outstanding Notes is tendering any Outstanding Notes,
this Letter of Transmittal must be signed by the Registered Holder(s) exactly as
the name(s) appear(s) on a securities position listing of DTC or by any
person(s) authorized to become the Registered Holder(s) by endorsements and
documents transmitted herewith. If the signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, officer or other person, acting in a
fiduciary or representative capacity, please set forth at the line entitled
"Capacity (full title)" and submit evidence satisfactory to the Exchange Agent
and BHFC of such person's authority to so act. See Instruction 4.

Name(s): _______________________________________________________________________

________________________________________________________________________________
                             (Please Type or Print)

Capacity (full title):__________________________________________________________

Address: _______________________________________________________________________
                              (Including Zip Code)

                          MEDALLION SIGNATURE GUARANTEE
                        (If required--See Instruction 4)

Signature(s) Guaranteed by
an Eligible Institution: _______________________________________________________
                             (Authorized Signature)

________________________________________________________________________________
                                     (Title)

________________________________________________________________________________
                                 (Name of Firm)

________________________________________________________________________________
                                    (Address)

Dated:__________________________, 2004

                                       8
<PAGE>

                   INSTRUCTIONS FORMING PART OF THE TERMS AND
                        CONDITIONS OF THE EXCHANGE OFFER

         1.       DELIVERY OF LETTER OF TRANSMITTAL. This Letter of Transmittal
is to be completed by tendering holders of Outstanding Notes if tender of such
Outstanding Notes is to be made by book-entry transfer to the Exchange Agent's
account at DTC and instructions are not being transmitted through ATOP. HOLDERS
WHO TENDER THEIR OUTSTANDING NOTES THROUGH DTC'S ATOP PROCEDURES SHALL BE BOUND
BY, BUT NEED NOT COMPLETE, THIS LETTER OF TRANSMITTAL; THUS, A LETTER OF
TRANSMITTAL NEED NOT ACCOMPANY TENDERS EFFECTED THROUGH ATOP.

         A confirmation of a book-entry transfer into the Exchange Agent's
account at DTC of all Outstanding Notes delivered electronically, as well as a
properly completed and duly executed Letter of Transmittal (or a manually signed
facsimile thereof) or properly transmitted agent's message, and any other
documents required by this Letter of Transmittal, must be received by the
Exchange Agent at its address set forth herein on or prior to the Expiration
Date.

         Any financial institution that is a participant in DTC may
electronically transmit its acceptance of the Exchange Offer by causing DTC to
transfer Outstanding Notes to the Exchange Agent in accordance with DTC's ATOP
procedures for such transfer on or prior to the Expiration Date. The Exchange
Agent will make available its general participant account at DTC for the
Outstanding Notes for purposes of the Exchange Offer.

         DELIVERY OF A LETTER OF TRANSMITTAL TO DTC WILL NOT CONSTITUTE VALID
DELIVERY TO THE EXCHANGE AGENT. No Letter of Transmittal should be sent to BHFC
or DTC.

         The method of delivery of this Letter of Transmittal and all other
required documents, including delivery through DTC and any acceptance or agent's
message delivered through ATOP, is at the option and risk of the tendering
holder. If delivery is by mail, registered mail, with return receipt requested
and properly insured, is recommended. Instead of delivery by mail, it is
recommended that the holder use an overnight or hand-delivery service. In all
cases, sufficient time should be allowed to ensure timely delivery.

         Neither BHFC nor the Exchange Agent is under any obligation to notify
any tendering holder of Outstanding Notes of BHFC's acceptance of tendered
Outstanding Notes prior to the Expiration Date.

         2.       DELIVERY OF THE REGISTERED NOTES. Registered Notes to be
issued according to the terms of the Exchange Offer, if consummated, will be
delivered in book-entry form to holders of Outstanding Notes tendered in the
Exchange Offer. In order to permit such delivery, the appropriate DTC
participant name and number (along with any other required account information)
must be provided in the table entitled "Description of the Outstanding Notes."
Failure to do so will render a tender of the Outstanding Notes defective, and
BHFC will have the right, which it may waive, to reject such delivery. Holders
that anticipate participating in the Exchange Offer other than through DTC are
urged to promptly contact a bank, broker or other intermediary (that has the
capability to hold securities custodially through DTC) to arrange for receipt of
any Registered Notes delivered pursuant to the Exchange Offer and to obtain the
information necessary to complete the table.

         3.       AMOUNT OF TENDERS. Tenders of Outstanding Notes will be
accepted in denominations of U.S. $1,000 and integral multiples of U.S.$1,000 in
excess thereof. Book-entry transfers to the Exchange Agent should be made in the
exact principal amount of Outstanding Notes tendered.

         4.       SIGNATURES ON LETTER OF TRANSMITTAL; INSTRUMENTS OF TRANSFER;
GUARANTEE OF SIGNATURES. For purposes of this Letter of Transmittal, the term
"REGISTERED HOLDER" means an owner of record as well as any DTC participant that
has Outstanding Notes credited to its DTC account. Except as otherwise provided
below, all signatures on this Letter of Transmittal must be guaranteed by a
recognized participant in the Securities Transfer Agents Medallion Program, the
NYSE Medallion Signature Program or the Stock Exchange Medallion Program (each,
a "MEDALLION SIGNATURE CO-OBLIGOR"). Signatures on the Letter of Transmittal
need not be guaranteed if:

                                       9
<PAGE>

         -        the Letter of Transmittal is signed by a participant in DTC
                  whose name appears on a security position listing as the owner
                  of the Outstanding Notes and the holder(s) has not completed
                  the box entitled "Special Return Instructions" on the Letter
                  of Transmittal; or

         -        the Outstanding Notes are tendered for the account of an
                  "eligible institution."

         An "eligible institution" is one of the following firms or other
entities identified in Rule 17Ad-15 under the Securities Exchange Act of 1934
(as the terms are used in Rule 17Ad-15):

                  (a)      a bank;

                  (b)      a broker, dealer, municipal securities dealer,
         municipal securities broker, government securities dealer or government
         securities broker;

                  (c)      a credit union;

                  (d)      a national securities exchange, registered securities
         association or clearing agency; or

                  (e)      a savings institution that is a participant in a
         Securities Transfer Association recognized program.

         If any of the Outstanding Notes tendered are held by two or more
Registered Holders, all of the Registered Holders must sign the Letter of
Transmittal.

         BHFC will not accept any alternative, conditional, irregular or
contingent tenders. By executing the Letter of Transmittal (or facsimile
thereof) or directing DTC to transmit an agent's message, you waive any right to
receive any notice of the acceptance of your Outstanding Notes for exchange.

         If this Letter of Transmittal or instruments of transfer are signed by
trustees, executors, administrators, guardians or attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing and, unless waived by BHFC, evidence
satisfactory to BHFC of their authority to so act must be submitted with this
Letter of Transmittal.

         Beneficial owners whose tendered Outstanding Notes are registered in
the name of a broker, dealer, commercial bank, trust company or other nominee
must contact such broker, dealer, commercial bank, trust company or other
nominee if they desire to tender such Outstanding Notes.

         5.       SPECIAL RETURN INSTRUCTIONS. All Outstanding Notes tendered
hereby and not accepted for exchange will be returned to the undersigned
according to the information provided in the table entitled "Description of the
Outstanding Notes Tendered" or, if completed, according to the "Special Return
Instructions" box in this Letter of Transmittal.

         6.       TRANSFER TAXES. Except as set forth in this Instruction 6,
BHFC will pay or cause to be paid any transfer taxes with respect to the
transfer and sale of Outstanding Notes to it, or to its order, pursuant to the
Exchange Offer. If payment is to be made to, or if Outstanding Notes not
tendered or purchased are to be registered in the name of any persons other than
the Registered Holder, or if tendered Outstanding Notes are registered in the
name of any persons other than the persons signing this Letter of Transmittal,
the amount of any transfer taxes (whether imposed on the Registered Holder or
such other person) payable on account of the transfer to such other person will
be deducted from the payment unless satisfactory evidence of the payment of such
taxes or exemption therefrom is submitted.

         7.       VALIDITY OF TENDERS. All questions concerning the validity,
form, eligibility (including time of receipt), acceptance and withdrawal of
tendered Outstanding Notes will be determined by BHFC in its sole discretion,
which determination will be final and binding. BHFC reserves the absolute right
to reject any and all tenders of Outstanding Notes not in proper form or any
Outstanding Notes the acceptance for exchange of which may, in the opinion of
its counsel, be unlawful. BHFC also reserves the absolute right to waive any
defect or irregularity in

                                       10
<PAGE>

tenders of Outstanding Notes, whether or not similar defects or irregularities
are waived in the case of other tendered securities. The interpretation of the
terms and conditions by BHFC shall be final and binding on all parties. Unless
waived, any defects or irregularities in connection with tenders of Outstanding
Notes must be cured within such time as BHFC shall determine. None of BHFC, the
Exchange Agent or any other person will be under any duty to give notification
of defects or irregularities with respect to tenders of Outstanding Notes, nor
shall any of them incur any liability for failure to give such notification.

         Tenders of Outstanding Notes will not be deemed to have been made until
such defects or irregularities have been cured or waived. Any Outstanding Notes
received by the Exchange Agent that are not validly tendered and as to which the
defects or irregularities have not been cured or waived will be returned by the
Exchange Agent to the holders of Outstanding Notes, unless otherwise provided in
this Letter of Transmittal, as soon as practicable following the Expiration Date
or the withdrawal or termination of the Exchange Offer.

         8.       WAIVER OF CONDITIONS. BHFC reserves the absolute right to
amend or waive any of the conditions in the Exchange Offer concerning any
Outstanding Notes at any time.

         9.       WITHDRAWAL. Tenders may be withdrawn only pursuant to the
procedures and subject to the terms set forth in the Prospectus under the
caption "The Exchange Offer--Withdrawal of Tenders."

         10.      REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and
requests for assistance and requests for additional copies of the Prospectus and
this Letter of Transmittal may be directed to the Exchange Agent at the address
and telephone number indicated herein.

         11.      TAX IDENTIFICATION NUMBER. Federal income tax law requires
that a U.S. Holder (defined below) whose Outstanding Notes are accepted for
exchange must provide the Exchange Agent with his, her or its correct Taxpayer
Identification Number ("TIN"), which, in the case of an exchanging U.S. Holder
who is an individual, is his or her social security number. If the Exchange
Agent is not provided with the correct TIN or an adequate basis for exemption,
such holder may be subject to a $50 penalty imposed by the Internal Revenue
Service (the "IRS"), and payments made with respect to the Registered Notes or
the Exchange Offer may be subject to backup withholding at a rate of 30%
(subject to periodic reductions through 2010, at which time the rate is
currently scheduled to be increased to 31%). If withholding results in an
overpayment of taxes, a refund may be obtained.

         To prevent backup withholding, each exchanging U.S. Holder must provide
his, her or its correct TIN by completing the copy of the IRS Form W-9 attached
to this Letter of Transmittal, certifying that the TIN provided is correct (or
that such U.S. Holder is awaiting a TIN) and that the U.S. Holder is exempt from
backup withholding because (i) the holder has been notified by the IRS that he,
she or it is subject to backup withholding as a result of a failure to report
all interests or dividends, or (ii) the IRS has notified the U.S. Holder that
he, she or it is no longer subject to backup withholding. If the Outstanding
Notes are in more than one name or are not in the name of the actual owner,
consult the Form W-9 Instructions for information on which TIN to report. If you
do not provide your TIN to the Exchange Agent within 60 days, backup withholding
may begin and continue until you furnish your TIN.

         Exempt holders (including, among others, all corporations and certain
foreign individuals) are not subject to these withholding and reporting
requirements. See the enclosed copy of the IRS Form W-9. In order to satisfy
BHFC that a foreign individual qualifies as an exempt recipient, such holder
must submit a properly completed IRS Form W-8BEN (or other applicable form)
certifying, under penalty of perjury, to such holder's foreign status in order
establish an exemption from backup withholding. A copy of the Form W-8BEN is
attached to this Letter of Transmittal. Other applicable forms may be obtained
from the Exchange Agent.

         For the purposes of these instructions, a "U.S. HOLDER" is (i) a
citizen or resident of the United States, (ii) a corporation, or other entity
taxable as a corporation for U.S. federal income tax purposes, created or
organized in or under the laws of the United States or of any political
subdivision thereof, or (iii) an estate or trust the income of which is subject
to United States federal income taxation regardless of its source.

                                       11
<PAGE>

         12.      The exchange of Outstanding Notes for Registered Notes will
not be a taxable event for U.S. federal income tax purposes. See "Material
United States Federal Income Tax Consequences" in the Prospectus.

                                       12
<PAGE>

        In order to tender, a holder of Outstanding Notes should send or
  deliver a properly completed and signed Letter of Transmittal and any other
   required documents to the Exchange Agent at its address set forth below or
            tender pursuant to DTC's Automated Tender Offer Program.

                  The Exchange Agent for the Exchange Offer is:

                 J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION

                      Institutional Trust Services OH1-0184
                         1111 Polaris Parkway, Suite 1N
                               Columbus, OH 43240
                                 Attn: Exchanges

         Any questions or requests for assistance or for additional copies of
the Prospectus, this Letter of Transmittal, or related documents may be directed
to the Exchange Agent at 1-800-346-5153. A holder of Outstanding Notes may also
contact such holder's custodian bank, depositary, broker, trust company or other
nominee for assistance concerning the Exchange Offer.

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