Exhibit 10.1
June 28, 2007

     
To:
  Parker Drilling Company
 
  1401 Enclave Parkway, Suite 600
 
  Houston, Texas 77077
 
  Attn: General Counsel
 
  Telephone: (281) 406-2000
 
  Facsimile: (281) 406-2001
 
   
From:
  Bank of America, N.A.
 
  c/o Banc of America Securities LLC
 
  9 West 57th Street
 
  New York, NY 10019
 
  Attn: John Servidio
 
  Telephone: 212-583-8373
 
  Facsimile: 212-230-8610
 
   
Re:
  Convertible Bond Hedge Transaction
 
  (Transaction Reference Number: NY-30235)

Ladies and Gentlemen:
     The purpose of this communication (this “Confirmation”) is to set forth the
terms and conditions of the above-referenced transaction entered into on the
Trade Date specified below (the "Transaction”) between Bank of America, N.A.
(“BofA”) and Parker Drilling Company (“Counterparty”). This communication
constitutes a “Confirmation” as referred to in the ISDA Master Agreement
specified below.
     1. This Confirmation is subject to, and incorporates, the definitions and
provisions of the 2000 ISDA Definitions (including the Annex thereto) (the “2000
Definitions”) and the definitions and provisions of the 2002 ISDA Equity
Derivatives Definitions (except to the extent expressly amended by this
Confirmation) (the “Equity Definitions”, and together with the 2000 Definitions,
the “Definitions”), in each case as published by the International Swaps and
Derivatives Association, Inc. and as in effect on the date hereof (“ISDA”). In
the event of any inconsistency between the 2000 Definitions and the Equity
Definitions, the Equity Definitions will govern. Certain defined terms used
herein have the meanings assigned to them in an Indenture to be dated as of
July 5, 2007 between Counterparty and The Bank of New York Trust Company, N.A.
as trustee (the "Indenture”) relating to the USD 115.0 principal amount of
2.125% Convertible Senior Notes due July 15, 2012 (the “Convertible
Securities”). In the event of any inconsistency between the terms defined in the
Indenture and this Confirmation, this Confirmation shall govern. For the
avoidance of doubt, references herein to sections of the Indenture are based on
the draft of the Indenture most recently reviewed by the parties at the time of
execution of this Confirmation. If any relevant sections of the Indenture are
changed, added or renumbered following execution of this Confirmation but prior
to the execution of the Indenture, the parties will amend this Confirmation in
good faith to preserve the economic intent of the parties.
     This Confirmation evidences a complete and binding agreement between BofA
and Counterparty as to the terms of the Transaction to which this Confirmation
relates. This Confirmation shall be subject to an agreement (the “Agreement”) in
the form of the 2002 ISDA Master Agreement (the “ISDA Form”) as if BofA and
Counterparty had executed an agreement in such form (without any Schedule but
with the elections set forth in this Confirmation), except to the extent
amended, modified or supplemented by this Confirmation. For the avoidance of
doubt, the Transaction shall be the only transaction under the Agreement. The
parties acknowledge and agree that Counterparty and BofA have previously entered
into an ISDA Master Agreement dated as of December 21, 2001 (as amended,
modified or supplemented from time to time (including by any schedule or annex
thereto), the “Existing ISDA Master Agreement”) and that, notwithstanding any
term or provision in the Existing ISDA Master Agreement, the Transaction
evidenced by this Confirmation shall not under any circumstances constitute (or
be deemed to

 

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constitute) a Transaction or a Specified Transaction (each as defined in the
Existing ISDA Master Agreement) under, or otherwise be subject to, the Existing
ISDA Master Agreement.
     All provisions contained in, or incorporated by reference to, the Agreement
will govern this Confirmation except as expressly modified herein. In the event
of any inconsistency between this Confirmation and either the Definitions or the
Agreement, this Confirmation shall govern.
     2. The Transaction constitutes a Share Option Transaction for purposes of
the Equity Definitions. The terms of the particular Transaction to which this
Confirmation relates are as follows:
General Terms:

         
 
  Trade Date:   June 28, 2007
 
       
 
  Effective Date:   The closing date of the offering of the Convertible
Securities.
 
       
 
  Option Type:   Call
 
       
 
  Seller:   BofA
 
       
 
  Buyer:   Counterparty
 
       
 
  Shares:   The Common Stock of Counterparty, par value USD 0.162/3 per share
(Ticker Symbol:
 
      “PKD”).
 
       
 
  Number of Options:   60% of the number of Convertible Securities in
denominations of USD1,000 principal amount issued by Counterparty on the closing
date for the initial issuance of the Convertible Securities; provided that if
the Underwriters, as defined in the Underwriting Agreement dated the date hereof
between the Company and Banc of America Securities LLC, as representative of the
several underwriters (the “Underwriting Agreement”) exercise their option to
purchase additional Securities pursuant to Section 2(c) of the Underwriting
Agreement, then on the Additional Premium Payment Date, the Number of Options
shall be automatically increased by 60% of the number of Convertible Securities
in denominations of USD 1,000 principal amount issued pursuant to such exercise
(such Convertible Securities, the “Additional Securities”).
 
       
 
  Number of Shares:   As of any date, the product of the Number of Options and
the Conversion Rate in effect on such date.
 
       
 
  Conversion Rate:   As defined in the Indenture, but without regard to any
adjustments to the Conversion Rate pursuant to Sections 3.01(e), 10.01(c),
10.01(d), 10.04(g) and 10.04(h) of the Indenture.
 
       
 
  Strike Price:   USD 13.8463
 
       
 
  Premium:   USD 17,374,200 provided that if the Number of Options is increased
pursuant to the proviso to the definition of Number of Options above, an
additional Premium equal to the product of the number of Options by which the
Number of Options is so

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      increased and USD 251.80 shall be paid on the Additional Premium Payment
Date.
 
       
 
  Premium Payment Date:   July 5, 2007
 
       
 
  Additional Premium   The closing date for the purchase and sale of the
 
  Payment Date:   Additional Securities.
 
       
 
  Exchange:   New York Stock Exchange
 
       
 
  Related Exchange:   All Exchanges
 
        Procedures for Exercise:    
 
       
 
  Potential Exercise Dates:   Each Conversion Date.
 
       
 
  Conversion Date:   Each “Conversion Date” as defined in the Indenture.
 
       
 
  Required Exercise on
Conversion Dates:   On each Conversion Date, a number of Options equal to the
number of Convertible Securities in denominations of USD1,000 principal amount
submitted for conversion on such Conversion Date in accordance with the terms of
the Indenture shall be automatically exercised, subject to “Notice of Exercise”
below.
 
       
 
  Expiration Date:   July 15, 2012
 
       
 
  Automatic Exercise:   As provided above under “Required Exercise on Conversion
Dates”.
 
       
 
  Notice of Exercise:   Notwithstanding anything to the contrary in the Equity
Definitions, in order to exercise any Options, Counterparty must notify BofA in
writing prior to 5:00 PM, New York City time, on the Scheduled Valid Day prior
to the scheduled first day of the applicable Settlement Averaging Period
relating to the Convertible Securities converted on the Conversion Date
occurring on the relevant Exercise Date (such Convertible Securities, the
“Relevant Convertible Securities”) of (i) the number of Options being exercised
on such Exercise Date, (ii) the scheduled first day of the applicable Settlement
Averaging Period, (iii) the scheduled settlement date under the Indenture for
the Relevant Convertible Securities and (iv) whether Counterparty has elected to
satisfy its conversion obligations with respect to the Relevant Convertible
Securities in Shares only (as described in Section 10.02(b) of the Indenture)
(“Gross Share Settlement”); provided that with respect to Options relating to
Relevant Convertible Securities with a Conversion Date occurring on or after
April 15, 2012, such Notice of Exercise may be given on or prior to the second
Scheduled Valid Day immediately preceding the Expiration Date and need only
specify the number of Options being exercised.

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  Notice of Gross Share Settlement:   If Counterparty has elected Gross Share
Settlement for all Convertible Securities with a Conversion Date occurring on or
after April 15, 2012, then with respect to Options relating to such Convertible
Securities, Counterparty shall notify BofA of such election before 5:00 p.m.
(New York City time) on or prior to April 15, 2012.
 
       
 
  BofA’s Telephone Number and    
 
       
 
  Telex and/or Facsimile Number    
 
       
 
  and Contact Details for purpose of Giving Notice:   To be provided by BofA.
 
        Settlement Terms:    
 
       
 
  Settlement Method:   Net Share Settlement
 
       
 
  Net Share Settlement:   BofA will deliver to Counterparty, on or before the
relevant Settlement Date, a number of Shares equal to the Net Shares in respect
of any Option exercised or deemed exercised hereunder. In no event will the Net
Shares be less than zero.
 
       
 
  Net Shares:   In respect of any Option exercised or deemed exercised, a number
of Shares equal to (i) the sum of the quotients, for each Valid Day during the
Settlement Averaging Period for such exercisable Option, of (A) the product of
(x) excess, if any, of the Relevant Price less the Strike Price on such Valid
Day and (y) the Conversion Rate on such Valid Day divided by (B) such Relevant
Price, divided by (ii) the number of Valid Days in the Settlement Averaging
Period; provided that if the calculation contained in clause (A) above results
in a negative number, such number shall be replaced with the number zero.
Notwithstanding the forgoing, if Counterparty has elected Gross Share Settlement
and so specified in the Notice of Exercise, or if applicable, the Notice of
Gross Share Settlement, then with respect to any Option relating to the Relevant
Convertible Securities with a Conversion Date occurring on or following
April 15, 2012, the Net Shares shall be equal to the lesser of (i) a number of
Shares determined as described above and (ii) a number of Shares equal to the
Net Convertible Value for such Option divided by the Obligation Price. BofA will
deliver cash in lieu of any fractional Shares to be delivered with respect to
any Net Shares valued at the Relevant Price for the last Valid Day of the
Settlement Averaging Period.
 
       
 
  Net Convertible Value:   With respect to an Option, (i) the Total Convertible
Value for such Option minus (ii) USD 1,000.
 
       
 
  Total Convertible Value:   With respect to an Option, (i) the aggregate number
of Shares, if any, that Counterparty is obligated to deliver to the holder of an

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      Convertible Security for the relevant Conversion Date pursuant to
Section 10.03(b) of the Indenture, multiplied by (ii) the Obligation Price.
 
       
 
  Obligation Price:   The opening price as displayed under the heading Op on
Bloomberg page PKD.N <equity> (or any successor thereto) on the Obligation
Valuation Date.
 
       
 
  Obligation Valuation Date:   Settlement Date
 
       
 
  Settlement Averaging Period:   For any Option, (i) with respect to an Option
with a Conversion Date occurring prior to April 15, 2012, the twenty
(20) consecutive Valid Day period beginning on, and including, the third Valid
Day following such Conversion Date (or the forty (40) consecutive Valid Day
period commencing on, and including, the third Valid Day following such
Conversion Date if Counterparty has elected Gross Share Settlement and specified
Gross Share Settlement in the Notice of Exercise) or (ii) with respect to an
Option with a Conversion Date occurring on or following April 15, 2012, the
twenty (20) consecutive Valid Day period beginning on, and including, the
twenty-second (22nd) Scheduled Valid Day immediately prior to the Expiration
Date (or the forty (40) consecutive Valid Day period commencing on, and
including, the forty second (42nd) Scheduled Valid Day immediately prior to the
Expiration Date if Counterparty has delivered a Notice of Gross Share Settlement
to BofA on or prior to April 15, 2012).
 
       
 
  Settlement Date:   For any Option, the third Valid Day following the final day
of the applicable Settlement Averaging Period with respect to such Option.
 
       
 
  Settlement Currency:   USD
 
       
 
  Valid Day:   A day on which (i) there is no Market Disruption Event and
(ii) trading in the Shares generally occurs on the Exchange or, if the Shares
are not then listed on the Exchange, on the principal other U.S. national or
regional securities exchange on which the Shares are then listed or, if the
Shares are not then listed on a U.S. national or regional securities exchange,
on the principal other market on which the Shares are then traded. If the Shares
(or other security for which a Relevant Price must be determined) is not so
listed or quoted, a Valid Day means a Business Day.
 
       
 
  Scheduled Valid Day:   A day that is scheduled to be a Valid Day on the
primary U.S. national securities exchange or market on which the Shares are
listed or admitted to trading.
 
       
 
  Market Disruption Event:   Section 6.3 of the Equity Definitions is hereby
replaced in its entirety by the following:
 
       
 
      Market Disruption Event means in respect of a Share, (i) a failure by the
Exchange or, if the Shares are not then listed on the Exchange, by the principal
other U.S. national or regional

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      securities exchange on which the Shares are then listed or, if the Shares
are not then listed on a U.S. national or regional securities exchange, by the
principal other market on which the Shares are then traded, to open for trading
during its regular trading session or (ii) the occurrence or existence prior to
1:00 p.m., New York City time, on any trading day for the Shares for an
aggregate one half hour period of any suspension or limitation imposed on
trading (by reason of movements in price exceeding limits permitted by the stock
exchange or otherwise) in the Shares or in any options, contracts or future
contracts relating to the Shares.
 
       
 
  Relevant Price:   On any Valid Day, the per Share volume-weighted average
price as displayed under the heading Bloomberg VWAP on Bloomberg page PKD.N
<equity> AQR (or any equivalent successor if such page is not available) in
respect of the period from the scheduled opening time of trading on the Exchange
to the Scheduled Closing Time of the Exchange on such Valid Day (or if such
volume-weighted average price is unavailable, the market value of one Share on
such Valid Day, as determined by the Calculation Agent using a volume-weighted
method). The Relevant Price will be determined without regard to after hours
trading or any other trading outside of the regular trading session hours.
 
       
 
  Other Applicable Provisions:   To the extent BofA is obligated to deliver
Shares hereunder, the provisions of Sections 9.1(c), 9.8, 9.9, 9.10, 9.11
(except that the Representation and Agreement contained in Section 9.11 of the
Equity Definitions shall be modified by excluding any representations therein
relating to restrictions, obligations, limitations or requirements under
applicable securities laws arising as a result of the fact that Counterparty is
the Issuer of the Shares) and 9.12 of the Equity Definitions will be applicable,
except that all references in such provisions to “Physically-Settled” shall be
read as references to “Net Share Settled”. “Net Share Settled” in relation to
any Option means that BofA is obligated to deliver Shares hereunder.
 
       
 
  Restricted Certificated Shares:   Notwithstanding anything to the contrary in
the Equity Definitions, BofA may, in whole or in part, deliver Shares in
certificated form representing the Number of Shares to be Delivered to
Counterparty in lieu of delivery through the Clearance System. With respect to
such certificated Shares, the Representation and Agreement contained in
Section 9.11 of the Equity Definitions shall be modified by deleting the
remainder of the provision after the word “encumbrance” in the fourth line
thereof.
 
        Share Adjustments:    
 
       
 
  Method of Adjustment:   Notwithstanding Section 11.2 of the Equity
Definitions, upon the occurrence of any event or condition set forth in
Sections 10.04(a) through (f) of the Indenture, the Calculation Agent

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      shall upon prior written notice to Counterparty make a corresponding
adjustment, which it reasonably determines in good faith to be necessary, to the
terms relevant to the exercise, settlement or payment of the Transaction.
Immediately upon the occurrence of any “Adjustment Event”, as defined in the
Indenture, Counterparty shall notify the Calculation Agent of such Adjustment
Event; and once the adjustments to be made to the terms of the Indenture and the
Convertible Notes in respect of such Adjustment Event have been determined,
Counterparty shall immediately notify the Calculation Agent in writing of the
details of such adjustments. Additionally, notwithstanding Section 11.2 of the
Equity Definitions, Potential Adjustment Event shall not apply to this
Transaction and, if and to the extent that any event or condition occurs during
the term of the Transaction with respect to Counterparty and the Shares of the
type described in Section 11.2(e), the Calculation Agent shall not make any
adjustment to the terms relevant to the exercise, settlement or payment of the
Transaction, except to the extent otherwise described in this paragraph, without
the prior written consent of Counterparty.
 
        Extraordinary Events:    
 
       
 
  Merger Events:   Section 12.1(b) of the Equity Definitions is hereby amended
and restated in its entirety for purposes of this Confirmation so that “Merger
Event” means the occurrence of any event or condition set forth in Section 10.06
of the Indenture.
 
       
 
  Tender Offer:   Section 12.1(d) of the Equity Definitions is hereby amended
and restated in its entirety for purposes of this Confirmation so that a “Tender
Offer” means the occurrence of any event or condition set forth in Clause (1) of
the definition of “Fundamental Change” in Section 1.01 of the Indenture.
 
       
 
  Consequences of Merger Events and Tender Offers:   Notwithstanding
Sections 12.2 and 12.3 of the Equity Definitions, upon the occurrence of a
Merger Event or Tender Offer, the Calculation Agent shall, to the extent that
any such Merger Event or Tender Offer results in adjustments to the terms of the
exercise, settlement or payment under the Indenture, upon prior written notice
to Counterparty, make the corresponding adjustment in respect of any adjustment
under the Indenture to any one or more of the nature of the Shares, the Number
of Options, the Option Entitlement and any other variable relevant to the
exercise, settlement or payment for the Transaction; provided that such
adjustment shall be made without regard to (x) any adjustment to the Conversion
Rate pursuant to Sections 10.01(c), 10.04(g), or 10.04(h) of the Indenture and
(y) unless and to the extent otherwise agreed by BofA and Counterparty (and
provided that BofA may not be required so to agree), the election, if any, by
Counterparty to adjust the Conversion Rate and the related conversion obligation
pursuant to Section 10.01(d) of the Indenture.

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  Nationalization, Insolvency
or Delisting:   Cancellation and Payment (Calculation Agent Determination);
provided that, in addition to the provisions of Section 12.6(a)(iii) of the
Equity Definitions, it will also constitute a Delisting if the Exchange is
located in the United States and the Shares are not immediately re-listed,
re-traded or re-quoted on any of the New York Stock Exchange, the American Stock
Exchange or the NASDAQ National Market System (or their respective successors);
if the Shares are immediately re-listed, re-traded or re-quoted on any such
exchange or quotation system, such exchange or quotation system shall thereafter
be deemed to be the Exchange; provided further that, in determining any
Cancellation Amount, notwithstanding any term or provision in the Agreement or
the Equity Definitions, the Calculation Agent shall comply with the terms and
provisions set forth in Section 8(n)(iii) of this Confirmation.
 
       
 
  Additional Disruption Events:    
 
       
 
  (a) Change in Law:   Applicable (provided that clause (y) of this term set
forth in Section 12.9(a)(ii) of the Equity Definitions shall not apply)
 
       
 
  (b) Insolvency Filing:   Applicable
 
       
 
  (c) Hedging Disruption:   Applicable
 
       
 
  Hedging Party:   For all applicable Additional Disruption Events, BofA
 
       
 
  Determining Party:   For all applicable Additional Disruption Events, BofA
 
       
 
  Non-Reliance:   Applicable
 
       
 
  Agreements and Acknowledgments Regarding Hedging Activities:   Applicable.
 
       
 
  Additional Acknowledgments:   Applicable

     3. Calculation Agent: BofA; provided that all calculations, determinations
and adjustments made by BofA in respect of this Transaction as Calculation Agent
shall be made in good faith and in a commercially reasonable manner.
     4. Account Details:
          BofA Payment Instructions:
Bank of America, N.A.
San Francisco, CA
SWIFT: BOFAUS65
Bank Routing: 121-000-358
Account Name: Bank of America

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Account No. : 12333-34172

      Counterparty Payment Instructions:

To be provided by Counterparty.

  5.   Offices:         The Office of BofA for the Transaction is:

Bank of America, N.A.
c/o Banc of America Securities LLC
Equity Financial Products
9 West 57th Street, 40th Floor
New York, NY 10019
Telephone:      212-583-8373
Facsimile:       212-847-5124

      The Office of Counterparty for the Transaction is:

Parker Drilling Company
1401 Enclave Parkway, Suite 600
Houston, Texas 77077
Attn:             General Counsel

  6.   Notices: For purposes of this Confirmation:     (a)   Address for notices
or communications to Counterparty:

         
 
  To:   Parker Drilling Company
 
      1401 Enclave Parkway, Suite 600
 
      Houston, Texas 77077
 
  Attn:   General Counsel
 
  Telephone:   (281) 406-2000
 
  Facsimile:   (281) 406-2001

  (b)   Address for notices or communications to BofA:

         
 
  To:   Bank of America, N.A.
 
      c/o Banc of America Securities LLC
 
      Equity Financial Products
 
 

Attn:
Telephone:
Facsimile:   9 West 57th Street, 40th Floor
New York, NY 10019
Attn: John Servidio
212-583-8373
212-230-8610

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  7.   Representations, Warranties and Agreements:     (a)   In addition to the
representations and warranties in the Agreement and those contained elsewhere
herein, Counterparty represents and warrants to and for the benefit of, and
agrees with, BofA as follows:

  (i)   On the Trade Date, (A) none of Counterparty and its officers and
directors is aware of any material nonpublic information regarding Counterparty
or the Shares and (B) all reports and other documents filed by Counterparty with
the Securities and Exchange Commission pursuant to the Securities Exchange Act
of 1934, as amended (the “Exchange Act”) when considered as a whole (with the
more recent such reports and documents deemed to amend inconsistent statements
contained in any earlier such reports and documents), do not contain any untrue
statement of a material fact or any omission of a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading.     (ii)   (A) On the
Trade Date, the Shares or securities that are convertible into, or exchangeable
or exercisable for Shares, are not, and shall not be, subject to a “restricted
period,” as such term is defined in Regulation M under the Exchange Act
(“Regulation M”) and (B) Counterparty shall not engage in any “distribution,” as
such term is defined in Regulation M, other than a distribution meeting the
requirements of the exceptions set forth in sections 101(b)(10) and 102(b)(7) of
Regulation M, until the second Exchange Business Day immediately following the
Trade Date.     (iii)   On the Trade Date, neither Counterparty nor any
“affiliate” or “affiliated purchaser” (each as defined in Rule 10b-18 of the
Exchange Act (“Rule 10b-18”)) shall directly or indirectly (including, without
limitation, by means of any cash-settled or other derivative instrument)
purchase, offer to purchase, place any bid or limit order that would effect a
purchase of, or commence any tender offer relating to, any Shares (or an
equivalent interest, including a unit of beneficial interest in a trust or
limited partnership or a depository share) or any security convertible into or
exchangeable or exercisable for Shares, except through BofA.     (iv)   Without
limiting the generality of Section 13.1 of the Equity Definitions, Counterparty
acknowledges that BofA is not making any representations or warranties with
respect to the treatment of the Transaction under FASB Statements 133, as
amended, or 150, EITF Issue No. 00-19 (or any successor issue statements) or
under FASB’s Liabilities & Equity Project.     (v)   Without limiting the
generality of Section 3(a)(iii) of the Agreement, the Transaction will not
violate Rule 13e-1 or Rule 13e-4 under the Exchange Act.     (vi)   Prior to the
Trade Date, Counterparty shall deliver to BofA a resolution of Counterparty’s
board of directors authorizing the Transaction and such other certificate or
certificates as BofA shall reasonably request.

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  (vii)   Counterparty is not entering into this Confirmation to create actual
or apparent trading activity in the Shares (or any security convertible into or
exchangeable for Shares) in violation of the Exchange Act or to raise or depress
or otherwise manipulate the price of the Shares (or any security convertible
into or exchangeable for Shares) or otherwise in violation of the Exchange Act.
    (viii)   Counterparty is not, and after giving effect to the transactions
contemplated hereby will not be, an “investment company” as such term is defined
in the Investment Company Act of 1940, as amended.     (ix)   On the Trade Date
(A) the assets of Counterparty at their fair valuation exceed the liabilities of
Counterparty, including contingent liabilities, (B) the capital of Counterparty
is adequate to conduct the business of Counterparty and (C) Counterparty has the
ability to pay its debts and obligations as such debts mature and does not
intend to, or does not believe that it will, incur debt beyond its ability to
pay as such debts mature.     (x)   On the Trade Date, the representations and
warranties of Counterparty set forth in Section 3 of the Agreement and
Section 1(A) of the Underwriting Agreement are true and correct.     (xi)  
Counterparty understands no obligations of BofA to it hereunder will be entitled
to the benefit of deposit insurance and that such obligations will not be
guaranteed by any affiliate of BofA or any governmental agency.

  (b)   Each of BofA and Counterparty agrees and represents that it is an
“eligible contract participant” as defined in Section 1a(12) of the U.S.
Commodity Exchange Act, as amended.     (c)   Each of BofA and Counterparty
acknowledges that the offer and sale of the Transaction to it is intended to be
exempt from registration under the Securities Act of 1933, as amended (the
“Securities Act”), by virtue of Section 4(2) thereof. Accordingly, Counterparty
represents and warrants to BofA that (i) it has the financial ability to bear
the economic risk of its investment in the Transaction and is able to bear a
total loss of its investment, (ii) it is an “accredited investor” as that term
is defined in Regulation D as promulgated under the Securities Act, (iii) it is
entering into the Transaction for its own account and without a view to the
distribution or resale thereof, and (iv) the assignment, transfer or other
disposition of the Transaction has not been and will not be registered under the
Securities Act and is restricted under this Confirmation, the Securities Act and
state securities laws.     (d)   Each of BofA and Counterparty agrees and
acknowledges that BofA is a “financial institution,” “swap participant” and
“financial participant”, and that Counterparty is a “swap participant”, in each
case within the meaning of Sections 101(22), 101(53C) and 101(22A) of Title 11
of the United States Code (the “Bankruptcy Code”). The parties hereto further
agree and acknowledge (A) that this Confirmation is (i) a “securities contract,”
as such term is defined in Section 741(7) of the Bankruptcy Code, with respect
to which each payment and delivery hereunder is a “settlement payment,” as such
term is defined in Section 741(8) of the Bankruptcy Code, and (ii) a “swap
agreement,” as such term is defined in Section 101(53B) of the Bankruptcy Code,
with respect to which each payment and delivery hereunder is a “transfer,” as
such term is defined in Section 101(54) of the Bankruptcy Code, and (B) that
BofA is entitled to the protections afforded by,

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      among other sections, Section 362(b)(6), 362(b)(17), 546(e), 546(g), 555
and 560 of the Bankruptcy Code.     (e)   Counterparty shall deliver to BofA an
opinion of counsel, dated as of the Effective Date and reasonably acceptable to
BofA in form and substance, with respect to the matters set forth in Section
3(a) of the Agreement.

  8.   Other Provisions:     (a)   Additional Termination Events. The occurrence
of (i) an event of default with respect to Counterparty under the terms of the
Convertible Securities as set forth in Section 6.01 of the Indenture which
results in an acceleration of indebtedness evidenced by the outstanding
Securities under the Indenture, (ii) an Amendment Event or (iii) a Repayment
Event shall be an Additional Termination Event with respect to which the
Transaction is the sole Affected Transaction and Counterparty is the sole
Affected Party and BofA shall be the party entitled to designate an Early
Termination Date pursuant to Section 6(b) of the Agreement; provided that in the
case of a Repayment Event the Transaction shall be subject to termination only
in respect of the number of Convertible Securities that cease to be outstanding
in connection with or as a result of such Repayment Event.

     “Amendment Event” means that Counterparty amends, modifies, supplements or
waives any term of the Indenture or the Convertible Securities governing the
principal amount, coupon, maturity, repurchase obligation of Counterparty,
redemption right of Counterparty, any term relating to conversion of the
Convertible Securities (including changes to the conversion price, conversion
settlement dates or conversion conditions), or any term that would require
consent of the holders of not less than 100% of the principal amount of the
Convertible Securities to amend.
     “Repayment Event” means that (A) any Convertible Securities are repurchased
(whether in connection with or as a result of a change of control, howsoever
defined, or for any other reason) by Counterparty or any of its subsidiaries,
(B) any Convertible Securities are delivered to Counterparty in exchange for
delivery of any property or assets of Counterparty or any of its subsidiaries
(howsoever described), (C) any principal of any of the Convertible Securities is
repaid prior to the final maturity date of the Convertible Securities (whether
following acceleration of the Convertible Securities or otherwise), or (D) any
Convertible Securities are exchanged by or for the benefit of the holders
thereof for any other securities of Counterparty or any of its affiliates (or
any other property, or any combination thereof) pursuant to any exchange offer
or similar transaction; provided that, in the case of clause (B) and clause (D),
conversions of the Convertible Securities pursuant to the terms of the Indenture
as in effect on the date hereof shall not be Repayment Events.

  (b)   Alternative Calculations and Payment on Early Termination and on Certain
Extraordinary Events. If, subject to Section 8(k) below, BofA shall owe
Counterparty any amount pursuant to Section 12.2 or 12.3 of the Equity
Definitions and “Consequences of Merger Events and Tender Offers” above, or
Sections 12.6, 12.7 or 12.9 of the Equity Definitions (except in the event of an
Insolvency, a Nationalization, a Tender Offer or a Merger Event, in each case,
in which the consideration or proceeds to be paid to holders of Shares consists
solely of cash) or pursuant to Section 6(d)(ii) of the Agreement (except in the
event of an Event of Default in which Counterparty is the Defaulting Party or a
Termination Event in which Counterparty is the Affected Party, that resulted
from an event or events within Counterparty’s control) (a “Payment Obligation”),
Counterparty shall have the right, in its sole discretion, to require BofA to
satisfy any such Payment Obligation by the Share Termination Alternative (as
defined below) by giving

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      irrevocable telephonic notice to BofA, confirmed in writing within one
Scheduled Trading Day, between the hours of 9:00 A.M. and 4:00 P.M. New York
City time on the Merger Date, Tender Offer Date, Announcement Date or Early
Termination Date, as applicable (“Notice of Share Termination”). Upon such
Notice of Share Termination, the following provisions shall apply on the
Scheduled Trading Day immediately following the Merger Date, the Tender Offer
Date, Announcement Date or Early Termination Date, as applicable:

     
Share Termination Alternative:
  Applicable and means that BofA shall deliver to Counterparty the Share
Termination Delivery Property on the date on which the Payment Obligation would
otherwise be due pursuant to Section 12.7 or 12.9 of the Equity Definitions or
Section 6(d)(ii) of the Agreement, as applicable (the “Share Termination Payment
Date”), in satisfaction of the Payment Obligation.
 
   
Share Termination Delivery Property:
  A number of Share Termination Delivery Units, as calculated by the Calculation
Agent, equal to the Payment Obligation divided by the Share Termination Unit
Price. The Calculation Agent shall adjust the Share Termination Delivery
Property by replacing any fractional portion of a security therein with an
amount of cash equal to the value of such fractional security based on the
values used to calculate the Share Termination Unit Price. For the avoidance of
doubt (and notwithstanding anything herein, in the Agreement or otherwise to the
contrary), the Share Termination Delivery Property may included shares which are
unregistered under the Securities Act.
 
   
Share Termination Unit Price:
  The value of property contained in one Share Termination Delivery Unit on the
date such Share Termination Delivery Units are to be delivered as Share
Termination Delivery Property, as determined by the Calculation Agent in its
discretion by commercially reasonable means and notified by the Calculation
Agent to BofA at the time of notification of the Payment Obligation.
 
   
Share Termination Delivery Unit:
  In the case of a Termination Event, Event of Default or Delisting, one Share
or, in the case of an Insolvency, Nationalization, Merger Event or Tender Offer,
a unit consisting of the number or amount of each type of property received by a
holder of one Share (without consideration of any requirement to pay cash or
other consideration in lieu of fractional amounts of any securities) in such
Insolvency, Nationalization, Merger Event or Tender Offer. If such Insolvency,
Nationalization, Merger Event or Tender Offer involves a choice of consideration
to be received by holders, such holder shall be deemed to have elected to
receive the maximum possible amount of cash.
 
   
Failure to Deliver:
  Applicable
 
   
Other Applicable Provisions:
  If Share Termination Alternative is applicable, the provisions of Sections
9.8, 9.9, 9.10, 9.11 (except that the Representation and Agreement contained in
Section 9.11(i), (iv) and (v) of the Equity Definitions shall be modified by
excluding any representations therein relating to restrictions, obligations,
limitations or requirements under applicable securities laws arising as a result
of the fact that Counterparty is the Issuer of the Shares) and 9.12 of the
Equity Definitions will be applicable, except that all references in such

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  provisions to “Physically-Settled” shall be read as references to “settled by
Share Termination Alternative” and all references to “Shares” shall be read as
references to “Share Termination Delivery Units”.

  (c)   Disposition of Hedge Shares. Counterparty hereby agrees that if, in the
commercially reasonable judgment of BofA acting in good faith, any Shares (the
“Hedge Shares”) acquired by BofA for the purpose of hedging its obligations
pursuant to the Transaction cannot be sold in the public market by BofA without
registration under the Securities Act (other than as a result of BofA being an
affiliate, as such term is used in the Securities Act and rules and regulations
promulgated thereunder, of Counterparty), Counterparty shall, at its election:
(i) in order to allow BofA to sell the Hedge Shares in a registered offering,
make available to BofA an effective registration statement under the Securities
Act to cover the resale of such Hedge Shares and (A) enter into an agreement, in
form and substance satisfactory to BofA, substantially in the form of an
underwriting agreement for a registered offering, (B) provide accountant’s
“comfort” letters in customary form for registered offerings of equity
securities, (C) provide disclosure opinions of nationally recognized outside
counsel to Counterparty reasonably acceptable to BofA, (D) provide other
customary opinions, certificates and closing documents customary in form for
registered offerings of equity securities and (E) afford BofA a reasonable
opportunity to conduct a “due diligence” investigation with respect to
Counterparty customary in scope for underwritten offerings of equity securities;
provided, however, that if BofA, in its commercially reasonable judgment, is not
reasonably satisfied with access to Counterparty’s due diligence materials, the
results of its due diligence investigation, or the procedures and documentation
for the registered offering referred to above, then clause (ii) or clause
(iii) of this Section 8(c) shall apply at the election of Counterparty; (ii) in
order to allow BofA to sell the Hedge Shares in a private placement, enter into
a private placement agreement substantially similar to private placement
underwriting agreements customary for private placements of equity securities,
in form and substance reasonably satisfactory to BofA, including customary
representations, covenants, blue sky and other governmental filings and/or
registrations, indemnities to BofA, due diligence rights (for BofA or any
designated buyer of the Hedge Shares from BofA), opinions and certificates and
such other documentation as is customary for private placements agreements, all
reasonably acceptable to BofA (in which case, the Calculation Agent shall make
any adjustments to the terms of the Transaction that are necessary, in its
reasonable judgment, to compensate BofA for any discount from the public market
price of the Shares incurred on the sale of Hedge Shares in a private
placement); or (iii) purchase the Hedge Shares from BofA at the VWAP Price on
such Exchange Business Days, and in the amounts, requested by BofA. “VWAP Price”
means, on any Exchange Business Day, the per Share volume-weighted average price
as displayed under the heading “Bloomberg VWAP” on Bloomberg page PKD.N <equity>
VAP (or any successor thereto) in respect of the period from 9:30 a.m. to 4:00
p.m. (New York City time) on such Exchange Business Day (or if such
volume-weighted average price is unavailable, the market value of one Share on
such Exchange Business Day, as determined by the Calculation Agent using a
volume-weighted method).     (d)   Amendment to Equity Definitions. The
following amendment shall be made to the Equity Definitions:

     (i) Section 12.6(a)(ii) of the Equity Definitions is hereby amended by (1)
deleting from the fourth line thereof the word “or” after the word “official”
and inserting a comma therefor, and (2) deleting the semi-colon at the end of
subsection (B) thereof and inserting the following words therefor “or (C) at
BofA’s option, the occurrence of any of the events specified in Section 6.01(h)
or (i) of the Indenture.”

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     (ii) Section 12.9(b)(i) of the Equity Definitions is hereby amended by (1)
replacing “either party may elect” with “BofA may elect” and (2) replacing
“notice to the other party “with “notice to Counterparty” in the first sentence
of such section.

  (e)   Repurchase Notices. Counterparty shall, on any day on which Counterparty
effects any repurchase of Shares, promptly give BofA a written notice of such
repurchase (a “Repurchase Notice”) on such day if, following such repurchase,
the Notice Percentage as determined on such day is (i) greater than 6% and
(ii) greater by 0.5% than the Notice Percentage included in the immediately
preceding Repurchase Notice (or, in the case of the first such Repurchase
Notice, greater than the Notice Percentage as of the date hereof). The “Notice
Percentage” as of any day is the fraction, expressed as a percentage, the
numerator of which is the Number of Shares and the denominator of which is the
number of Shares outstanding on such day. In the event that Counterparty fails
to provide BofA with a Repurchase Notice on the day and in the manner specified
in this Section 8(e) then Counterparty agrees to indemnify and hold harmless
BofA, its affiliates and their respective directors, officers, employees, agents
and controlling persons (BofA and each such person being an “Indemnified Party”)
from and against any and all losses, claims, damages and liabilities (or actions
in respect thereof), joint or several, to which such Indemnified Party may
become subject under applicable securities laws, including without limitation,
Section 16 of the Exchange Act, relating to or arising out of such failure. If
for any reason the foregoing indemnification is unavailable to any Indemnified
Party or insufficient to hold harmless any Indemnified Party, then Counterparty
shall contribute, to the maximum extent permitted by law, to the amount paid or
payable by the Indemnified Party as a result of such loss, claim, damage or
liability. In addition, Counterparty will reimburse any Indemnified Party for
all expenses (including reasonable counsel fees and expenses) reasonably
incurred (after notice to Counterparty in the form of a documented invoice) in
connection with the investigation of, preparation for or defense or settlement
of any pending or threatened claim or any action, suit or proceeding arising
from such failure, whether or not such Indemnified Party is a party thereto and
whether or not such claim, action, suit or proceeding is initiated or brought by
or on behalf of Counterparty. This indemnity shall survive the completion of the
Transaction contemplated by this Confirmation and any assignment and delegation
of the Transaction made pursuant to this Confirmation or the Agreement shall
inure to the benefit of any permitted assignee of BofA.     (f)   Transfer and
Assignment. BofA may transfer or assign its rights and obligations hereunder and
under the Agreement, in whole or in part, to any of its affiliates, or any
entities sponsored or organized by, or on behalf of or for the benefit of, BofA,
provided that such transferees are not less creditworthy than, or such
transferees’ payment and performance obligations under this Transaction are
guaranteed by, Bank of America Corporation, and for so long as the ratings then
assigned to such transferees (or, in the case of any transferee whose payment
and performance obligations under this Transaction are guaranteed by Bank of
America Corporation, Bank of America Corporation’s) long term unsecured debt or
deposit obligations (not supported by third party credit enhancement) is not
less than “A” by Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc. or “A2” by Moody’s Investors Service, Inc. If at any
time at which the Equity Percentage exceeds 8%, BofA, in its discretion, is
unable to effect a transfer or assignment of a portion of its rights and
obligations under this Transaction with the prior written consent of
Counterparty (such consent not to be unreasonably withheld) covering the number
of Shares causing the Equity Percentage to exceed 8% (the “Excess Shares”) after
its commercially reasonable efforts on pricing terms reasonably acceptable to
BofA such that the Equity Percentage is reduced to 8% or less, BofA may
designate any Scheduled Trading Day as an Early Termination Date with respect to
a such portion (the “Terminated Portion”) of the Transaction constituting the
Excess Shares, such that the Equity Percentage following such partial
termination will be equal to or less than 8%. In the event that BofA so
designates an Early Termination Date with respect to such a portion of the
Transaction, a payment or delivery shall be made pursuant to Section 6 of the

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      Agreement and Section 8(b) of this Confirmation as if (i) an Early
Termination Date had been designated in respect of a Transaction having terms
identical to the Terminated Portion of the Transaction, (ii) Counterparty shall
be the sole Affected Party with respect to such partial termination and
(iii) such portion of the Transaction shall be the only Terminated Transaction.
The “Equity Percentage” as of any day is the fraction, expressed as a
percentage, (A) the numerator of which is the sum of the number of Shares that
BofA or any of its affiliates beneficially own (within the meaning of Section 13
of the Exchange Act) on such day, other than any Shares so owned as a hedge of
the Transaction, and the Number of Shares and (B) the denominator of which is
the number of Shares outstanding on such day.

  (g)   Staggered Settlement. BofA may, by notice to Counterparty prior to any
Settlement Date (a “Nominal Settlement Date”), elect to deliver the Shares on
two or more dates (each, a “Staggered Settlement Date”) or at two or more times
on the Nominal Settlement Date as follows:

  (i)   in such notice, BofA will specify to Counterparty the related Staggered
Settlement Dates (each of which will be on or prior to such Nominal Settlement
Date, but not prior to the beginning of the related “Cash Settlement Averaging
Period”) or delivery times and how it will allocate the Shares it is required to
deliver hereunder among the Staggered Settlement Dates or delivery times;    
(ii)   the aggregate number of Shares that BofA will deliver to Counterparty
hereunder on all such Staggered Settlement Dates and delivery times will equal
the number of Shares that BofA would otherwise be required to deliver on such
Nominal Settlement Date; and     (iii)   BofA shall reimburse Counterparty for
all reasonable and documented operational expenses related to said staggered
settlement.

  (h)   Right to Extend. BofA may postpone any Potential Exercise Date or any
other date of valuation or delivery by BofA, with respect to some or all of the
relevant Options (in which event the Calculation Agent shall make appropriate
adjustments to the Shares it is required to deliver hereunder), if BofA
determines, in its reasonable discretion, and with the prior written consent of
Counterparty (such consent not to be unreasonably withheld), that such extension
is reasonably necessary or appropriate to preserve BofA’s hedging or hedge
unwind activity hereunder in light of existing liquidity conditions or to enable
BofA to effect purchases of Shares in connection with its hedging, hedge unwind
or settlement activity hereunder in a manner that would, if BofA were
Counterparty or an affiliated purchaser of Counterparty, be in compliance with
applicable legal, regulatory or self-regulatory requirements, or with related
policies and procedures applicable to BofA.     (i)   Disclosure. Effective from
the date of commencement of discussions concerning the Transaction, Counterparty
and each of its employees, representatives, or other agents may disclose to any
and all persons, without limitation of any kind, the tax treatment and tax
structure of the Transaction and all materials of any kind (including opinions
or other tax analyses) that are provided to Counterparty relating to such tax
treatment and tax structure.     (j)   Designation by BofA. Notwithstanding any
other provision in this Confirmation to the contrary requiring or allowing BofA
to purchase, sell, receive or deliver any Shares or other securities to or

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      from Counterparty, BofA may designate any of its affiliates to purchase,
sell, receive or deliver such shares or other securities and otherwise to
perform BofA obligations in respect of the Transaction and any such designee may
assume such obligations. BofA shall be discharged of its obligations to
Counterparty to the extent of any such performance, and shall not be discharged
at any time prior thereto.     (k)   No Netting and Set-off. Multiple
Transaction Payment Netting and the provisions of Section 6(f) of the Agreement
shall not apply. Each party waives any and all rights it may have to set-off
delivery or payment obligations it owes to the other party under the Transaction
against any delivery or payment obligation owed to it by the other party,
whether arising under the Agreement, under any other agreement between the
parties thereto, by operation or law or otherwise.     (l)   Equity Rights. BofA
acknowledges and agrees that this Confirmation is not intended to convey to it
rights with respect to the Transaction that are senior to the claims of common
stockholders in the event of Counterparty’s bankruptcy. For the avoidance of
doubt, the parties agree that the preceding sentence shall not apply at any time
other than during Counterparty’s bankruptcy to any claim arising as a result of
a breach by Counterparty of any of its obligations under this Confirmation or
the Agreement.     (m)   Early Unwind. In the event the sale by Counterparty of
the Convertible Securities is not consummated with the initial purchasers
pursuant to the Underwriting Agreement for any reason by the close of business
in New York on July 5 (or such later date as agreed upon by the parties, which
in no event shall be later than July 10) (July 5 or such later date being the
“Early Unwind Date”), the Transaction shall automatically terminate (the “Early
Unwind”), on the Early Unwind Date and (i) the Transaction and all of the
respective rights and obligations of BofA and Counterparty thereunder shall be
cancelled and terminated and (ii) Counterparty shall pay to BofA an amount in
cash equal to the aggregate amount of costs and expenses reasonably incurred by
BofA relating to the unwinding of BofA’s hedging activities in respect of the
Transaction (including market losses incurred in reselling any Shares purchased
by BofA or its affiliates in connection with such hedging activities). Following
such termination, cancellation and payment, each party shall be released and
discharged by the other party from and agrees not to make any claim against the
other party with respect to any obligations or liabilities of either party
arising out of and to be performed in connection with the Transaction either
prior to or after the Early Unwind Date. BofA and Counterparty represent and
acknowledge to the other that upon an Early Unwind and following the payment
referred to above, all obligations with respect to the Transaction shall be
deemed fully and finally discharged.     (n)   Amendments to the Agreement.
Notwithstanding any term or provision contained in the Agreement, (i) no
Potential Event of Default or Event of Default shall apply with respect to
Counterparty as a defaulting party, and no Termination Event shall apply with
respect to Counterparty as an Affected Party, in each and any such case, except
to the extent any such Event of Default or Termination Event results in the
occurrence and continuance of an Additional Termination Event (as specified in
this Confirmation) or an Extraordinary Event elected as being applicable in this
Confirmation and Counterparty shall have no Specified Entities or Credit Support
Providers for purposes of the Agreement and this Transaction; (ii) without
limiting the generality of the foregoing, the Events of Default specified in
Sections 5(a)(i), (ii) (except to the extent that any violation of any such
agreement or obligation described therein or in this Confirmation (x) would
reasonably be expected to have a material adverse effect on the ability of BofA
to perform its obligations under this Transaction or (y) pertains to the
disposition of Hedge Shares pursuant to Section 8(c) of this Confirmation),),
(iii), (iv) (except to the extent any

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      misrepresentation made under this Confirmation or under the Agreement
would reasonably be expected to have a material adverse effect on the ability of
BofA to perform its obligations under this Transaction), (v), (vi) or (vii) of
the Agreement, and the Termination Events specified in the Agreement, shall not
apply with respect to Counterparty; and (iii) with respect to any early
termination of all or any portion of this Transaction for any reason pursuant to
the terms of this Confirmation, the Equity Definitions and/or the Agreement, and
additionally notwithstanding any term or provision in the Equity Definitions,
(A) any amount payable (or to be payable) by either party hereto to the other
party hereto arising as a result of such early termination (including any costs
resulting from unwinding hedging transactions) shall be determined in good faith
and in a commercially reasonable manner and (B) without limiting the foregoing,
the party determining the amount of any such payment (whether BofA, Counterparty
or the Calculation Agent) shall (1) utilize commercially reasonable procedures
and methodologies so as to produce a commercially reasonable determination of
such amount, and (2) disclose in reasonable detail the material information
utilized (or to be utilized) by such party in making such determination.   (o)  
Waiver of Trial by Jury. EACH OF COUNTERPARTY AND BOFA HEREBY IRREVOCABLY WAIVES
(ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF
ITS STOCKHOLDERS) ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THE TRANSACTION OR THE ACTIONS OF BOFA OR ITS AFFILIATES IN THE
NEGOTIATION, PERFORMANCE OR ENFORCEMENT HEREOF.     (p)   Governing Law. THIS
CONFIRMATION SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. THE PARTIES
HERETO IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK AND THE UNITED STATES COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK IN CONNECTION WITH ALL MATTERS RELATING HERETO AND WAIVE ANY OBJECTION TO
THE LAYING OF VENUE IN, AND ANY CLAIM OF INCONVENIENT FORUM WITH RESPECT TO,
THESE COURTS.

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          Counterparty hereby agrees (a) to check this Confirmation carefully
and immediately upon receipt so that errors or discrepancies can be promptly
identified and rectified and (b) to confirm that the foregoing (in the exact
form provided by BofA) correctly sets forth the terms of the agreement between
BofA and Counterparty with respect to the Transaction, by manually signing this
Confirmation or this page hereof as evidence of agreement to such terms and
providing the other information requested herein and immediately returning an
executed copy to John Servidio, Facsimile No. 212-230-8610.

            Yours faithfully,

BANK OF AMERICA, N.A.
      By:           Name:           Title:        

Agreed and Accepted By:

            PARKER DRILLING COMPANY
      By:           Name:           Title:        

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