Exhibit 10.1

 
 

$500,000,000

AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of June 21, 2005

Among

NATIONAL OILWELL VARCO, INC.
as Borrower,

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as US Administrative Agent, Lead Arranger and Sole Book Runner

DNB NOR BANK ASA,
as Norwegian Administrative Agent,

THE LENDERS PARTY HERETO FROM TIME TO TIME,

and

DnB NOR Bank ASA and The Bank of Nova Scotia
as Co- Documentation Agents,

Comerica Bank and JPMorgan Chase Bank, N.A.
as Co-Syndication Agents

 
 

 

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TABLE OF CONTENTS

                      Page   ARTICLE I DEFINITIONS AND ACCOUNTING TERMS     1  
Section 1.1
  Certain Defined Terms     1  
Section 1.2
  Computation of Time Periods     20  
Section 1.3
  Accounting Terms; Changes in GAAP; Foreign Currency Limits     20  
Section 1.4
  Types of Advances     21  
Section 1.5
  Miscellaneous     21   ARTICLE II THE ADVANCES AND THE LETTERS OF CREDIT    
21  
Section 2.1
  The Advances     21  
Section 2.2
  Method of Borrowing     24  
Section 2.3
  Fees     30  
Section 2.4
  Reduction and Reallocation of Commitments     31  
Section 2.5
  Repayment of Advances     32  
Section 2.6
  Interest     32  
Section 2.7
  Prepayments     34  
Section 2.8
  Breakage Costs     34  
Section 2.9
  Increased Costs     35  
Section 2.10
  Payments and Computations     37  
Section 2.11
  Taxes     38  
Section 2.12
  Illegality     41  
Section 2.13
  Letters of Credit     41  
Section 2.14
  Sharing of Payments, Etc     45  
Section 2.15
  Increase of Commitment     46  
Section 2.16
  Lender Replacement     47  
Section 2.17
  Currency Fluctuations, Mandatory Prepayments and Deposits in the Cash
Collateral Accounts     48  
Section 2.18
  Market Disruption     49  
Section 2.19
  Extension of Maturity Date     50   ARTICLE III CONDITIONS OF LENDING     51  
Section 3.1
  Conditions Precedent to Effectiveness of this Agreement     51  
Section 3.2
  Conditions Precedent for each Borrowing or Letter of Credit     52  
Section 3.3
  Additional Condition Precedent for Initial Borrowing through Authorized Agents
    52  

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TABLE OF CONTENTS
(continued)

                      Page   ARTICLE IV REPRESENTATIONS AND WARRANTIES     53  
Section 4.1
  Corporate Existence; Subsidiaries     53  
Section 4.2
  Authorization and Validity     53  
Section 4.3
  Corporate Power     53  
Section 4.4
  Authorization and Approvals     53  
Section 4.5
  Enforceable Obligations     53  
Section 4.6
  Financial Statements     54  
Section 4.7
  True and Complete Disclosure     54  
Section 4.8
  Litigation     54  
Section 4.9
  Use of Proceeds     54  
Section 4.10
  Investment Company Act     55  
Section 4.11
  Public Utility Holding Company Act     55  
Section 4.12
  Taxes     55  
Section 4.13
  Pension Plans     55  
Section 4.14
  Condition of Property; Casualties     55  
Section 4.15
  Insurance     55  
Section 4.16
  No Burdensome Restrictions; No Defaults     56  
Section 4.17
  Environmental Condition     56  
Section 4.18
  Permits, Licenses, etc     56  
Section 4.19
  Compliance with Laws     56  
Section 4.20
  Existing Indebtedness     57   ARTICLE V AFFIRMATIVE COVENANTS     57  
Section 5.1
  Compliance with Laws, Etc     57  
Section 5.2
  Insurance     57  
Section 5.3
  Preservation of Existence, Etc     57  
Section 5.4
  Payment of Taxes, Etc     57  
Section 5.5
  Visitation Rights     57  
Section 5.6
  Reporting Requirements     58  
Section 5.7
  Maintenance of Property     59  
Section 5.8
  Use of Proceeds     60  
Section 5.9
  Pari Passu     60  

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TABLE OF CONTENTS
(continued)

                      Page   ARTICLE VI NEGATIVE COVENANTS     60  
Section 6.1
  Liens, Etc     60  
Section 6.2
  Indebtedness     61  
Section 6.3
  Amendment of Organizational Documents; Senior Notes     62  
Section 6.4
  Limitation on Certain Restrictions     62  
Section 6.5
  Merger, Consolidation or Acquisition; Asset Sales     62  
Section 6.6
  Restricted Payments     63  
Section 6.7
  Investments, Loans, Advances     63  
Section 6.8
  Affiliate Transactions     64  
Section 6.9
  Other Businesses     64  
Section 6.10
  Maximum Leverage Ratio     64  
Section 6.11
  Minimum Interest Charge Coverage Ratio     64   ARTICLE VII REMEDIES     64  
Section 7.1
  Events of Default     64  
Section 7.2
  Optional Acceleration of Maturity     66  
Section 7.3
  Automatic Acceleration of Maturity     66  
Section 7.4
  Cash Collateral Account     67  
Section 7.5
  Non-exclusivity of Remedies     67  
Section 7.6
  Right of Set-off     67  
Section 7.7
  Currency Conversion After Maturity     68   ARTICLE VIII AGENCY AND ISSUING
LENDER PROVISIONS     68  
Section 8.1
  Authorization and Action     68  
Section 8.2
  Administrative Agent’s Reliance, Etc     68  
Section 8.3
  The Administrative Agents and Their Respective Affiliates     69  
Section 8.4
  Lender Credit Decision     69  
Section 8.5
  Indemnification     69  
Section 8.6
  Successor Administrative Agents and Issuing Lenders     69  
Section 8.7
  Syndication Agent; Documentation Agent     70   ARTICLE IX MISCELLANEOUS    
70  
Section 9.1
  Amendments, Etc     70  
Section 9.2
  Notices, Intralinks, Etc     71  

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TABLE OF CONTENTS
(continued)

                      Page  
Section 9.3
  No Waiver; Remedies     72  
Section 9.4
  Costs and Expenses     72  
Section 9.5
  Binding Effect     72  
Section 9.6
  Lender Assignments and Participations     73  
Section 9.7
  Indemnification     75  
Section 9.8
  Execution in Counterparts     75  
Section 9.9
  Survival of Representations, etc     75  
Section 9.10
  Severability     75  
Section 9.11
  Usury Not Intended     76  
Section 9.12
  Governing Law     76  
Section 9.13
  Waiver of Jury Trial     76  
Section 9.14
  Judgment Currency     76  
Section 9.15
  Headings Descriptive     77  
Section 9.16
  USA Patriot Act     77  
Section 9.17
  Entire Agreement     77  

EXHIBITS:

         
Exhibit A
  -   Form of Assignment and Acceptance
Exhibit B
  -   Form of Compliance Certificate
Exhibit C-1
  -   Form of Notice of Borrowing (Primary Facility)
Exhibit C-2
  -   Form of Notice of Borrowing (Norwegian Facility)
Exhibit D-1
  -   Form of Notice of Conversion or Continuation (Primary Facility)
Exhibit D-2
  -   Form of Notice of Conversion or Continuation (Norwegian Facility)
Exhibit E
  -   Form of Primary Note
Exhibit F
  -   Form of Norwegian Note
Exhibit G
  -   Form of Swingline Note

SCHEDULES:

         
Schedule 1.1(a)
  -   Revolving Commitments
Schedule 1.1(b)
  -   Existing Letters of Credit
Schedule 4.20
  -   Outstanding Indebtedness
Schedule 9.2
  -   Notice Information for Lenders

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AMENDED AND RESTATED CREDIT AGREEMENT

     This AMENDED AND RESTATED CREDIT AGREEMENT (“Agreement”) is entered into as
of June 21, 2005, among NATIONAL OILWELL VARCO, INC., a Delaware corporation and
the successor by merger to National-Oilwell, Inc. and Varco International, Inc.
(“Borrower”), WELLS FARGO BANK, NATIONAL ASSOCIATION, as US Administrative Agent
(as defined below), Lead Arranger and Sole Book Runner, DNB NOR BANK ASA, as
Norwegian Administrative Agent (as defined below), each Lender (as defined
below), and DnB NOR Bank ASA and The Bank of Nova Scotia as co-documentation
agents (“Co-Documentation Agents”), and Comerica Bank and JPMorgan Chase Bank,
N.A. as co-syndication agents (“Co-Syndication Agent”).

RECITALS

     WHEREAS, the Borrower, Wells Fargo Bank, National Association as
administrative agent, and certain lenders party thereto, have previously
executed and delivered that certain Credit Agreement dated as of June 30, 2004,
as amended by that certain Amendment No. 1, Consent and Agreement dated as of
January 14, 2005 (as so amended, the “Restated Agreement”); and

     WHEREAS, the Borrower, the US Administrative Agent, the Lenders party to
the Restated Agreement together with the other Lenders, wish to amend and
restate the Restated Agreement in its entirety as set forth in this Agreement.

     NOW THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the Borrower, the US Administrative
Agent, the Norwegian Administrative Agent, and the Lenders, (i) do hereby agree
that the Restated Agreement is amended and restated in its entirety as set forth
herein, and (ii) do hereby further agree as follows:

ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS

     Section 1.1 Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings (unless otherwise indicated, such
meanings to be equally applicable to both the singular and plural forms of the
terms defined):

     “Acquisition” means any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which the Borrower or any
of its Subsidiaries (a) acquires any going business or all or substantially all
of the assets of any firm, corporation or limited liability company, or division
thereof, whether through purchase of assets, merger, consolidation or otherwise
or (b) directly or indirectly acquires (in one transaction or as the most recent
transaction in a series of related transactions) at least a majority (in number
of votes) of the securities of a corporation which have ordinary voting power
for the election of directors (other than securities having such power only by
reason of the happening of a contingency) or a majority (by percentage of voting
power) of the outstanding ownership interests of a partnership or limited
liability company.

     “Additional Lender” has the meaning set forth in Section 2.15.

     “Adjusted Primary Prime Rate” means, for any day, the fluctuating rate per
annum of interest equal to the greater of (a) the Primary Prime Rate in effect
on such day and (b) the sum of the Federal Funds Rate in effect on such day plus
1/2% per annum.

 

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     “Administrative Agents” means US Administrative Agent and Norwegian
Administrative Agent, collectively.

     “Advance” means a Norwegian Advance, Primary Advance, a Canadian Swingline
Advance, or a US Swingline Advance.

     “Affiliate” means, as to any Person, (a) any other Person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person or any Subsidiary of such Person or
(b) any other Person owning beneficially or controlling thirty percent (30%) or
more of the equity interests in such Person. The term “control” (including the
terms “controlled by” or “under common control with”) means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through ownership of voting
securities or other equity interests, by contract or otherwise.

     “Agent’s Fee Letters” means (a) the letter agreement dated as of May 5,
2005 between the Borrower and the US Administrative Agent and (b) the letter
agreement dated as of the Closing Date between the Borrower and the Norwegian
Administrative Agent, as each may be modified or amended from time to time.

     “Agreed Currency” means (a) Dollars, (b) Euro, (c) Pounds Sterling,
(d) Canadian Dollars, (e) Norwegian Krone, and (f) any other Eligible Currency
which the Borrower requests the applicable Administrative Agent to include as an
Agreed Currency hereunder and, in connection with Letters of Credit, which is
acceptable to the applicable Issuing Lender and in connection with the Primary
Facility, which is acceptable to each of the Primary Lenders and in connection
with the Norwegian Facility, which is acceptable to each of the Norwegian
Lenders. If, after the designation of any currency as an Agreed Currency
(including any Foreign Currency designated in clause (b) – (f) above) pursuant
to the terms hereof, (x) currency control or other exchange regulations are
imposed in the country in which such currency is issued with the result that
different types of such currency are introduced, (y) such currency, in the
reasonable determination of the applicable Administrative Agent, no longer
qualifies as an “Eligible Currency” or (z) in the reasonable determination of
the applicable Administrative Agent, a Dollar Amount of such currency is not
readily calculable, the applicable Administrative Agent shall promptly notify
the applicable class of Lenders and the Borrower, and such currency shall no
longer be an Agreed Currency for purposes of such applicable Facility until such
time as the applicable Administrative Agent, the applicable Issuing Lender, or
the applicable class of Lenders, as required herein, agree to reinstate such
currency as an Agreed Currency.

     “Agreement” means this Amended and Restated Credit Agreement dated as of
June 21, 2005 among the Borrower, the US Administrative Agent, the Norwegian
Administrative Agent and the Lenders, as it may be amended hereafter in
accordance with its terms.

     “Applicable Lending Office” means, with respect to each Lender, such
Lender’s Domestic Lending Office in the case of a Primary Prime Rate Advance,
such Lender’s Eurocurrency Lending Office in the case of a Eurocurrency Rate
Advance, and such Lender’s lending office as designated to the Norwegian
Administrative Agent in the case of a Norwegian Prime Rate Advance.

     “Applicable Margin” means, at any time with respect to any Revolving
Advance, Utilization Fees, facility fees or letter of credit fees hereunder
(except as otherwise provided below), the following percentages based upon the
ratings by Moody’s and S&P, respectively, applicable on such date to the Index
Debt:

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                Eurocurrency                                                    
    Rate       Prime Rate       Facility               Tier     Index Debt
Rating       Advances       Advances       Fees       Utilization Fees          
  S&P       Moody’s                                              
1
    A or higher     A2 or higher       0.170 %       0.000 %       0.080 %      
0.050 %    
2
      A-         A3         0.235 %       0.000 %       0.090 %       0.075 %  
 
3
    BBB+     Baa1       0.300 %       0.000 %       0.100 %       0.100 %    
4
    BBB     Baa2       0.375 %       0.000 %       0.125 %       0.125 %    
5
    BBB-     Baa3       0.600 %       0.000 %       0.150 %       0.125 %    
6
    Lower than BBB-     Lower than Baa3       0.800 %       0.000 %       0.200
%       0.125 %    

     For purposes of the foregoing, (a) if either Moody’s or S&P shall not have
in effect a rating for the Index Debt (other than by reason of the circumstances
referred to in the penultimate sentence of this definition), then such rating
agency shall be deemed to have established a rating in Tier 6; (b) if the
ratings established or deemed to have been established by Moody’s and S&P for
the Index Debt shall fall within different Tiers, the Applicable Margin shall be
based on the higher of the two ratings unless one of the two ratings is two or
more Tiers lower than the other, in which case the Applicable Margin shall be
determined by reference to the Tier next above that of the lower of the two
ratings; and (c) if the ratings established or deemed to have been established
by Moody’s and S&P for the Index Debt shall be changed (other than as a result
of a change in the rating system of Moody’s or S&P), such change shall be
effective as of the date on which it is first announced or published by the
applicable rating agency or, in the absence of such announcement or publication,
on the effective date of such rating. Each change in the Applicable Margin shall
apply during the period commencing on the effective date of such change and
ending on the date immediately preceding the effective date of the next such
change. If the rating system of Moody’s or S&P shall change, or if either such
rating agency shall cease to be in the business of rating corporate debt
obligations, the Borrower and the Lenders shall negotiate in good faith to amend
this definition to reflect such changed rating system or the unavailability of
ratings from such rating agency and, pending the effectiveness of any such
amendment, the Applicable Margin shall be determined by reference to the rating
most recently in effect prior to such change or cessation. From the Closing Date
until the first such ratings change, if any, the Applicable Margin shall be
determined by reference to Tier 3.

     “Applicable Pro Rata Share” means (a) with respect to the Primary Facility,
the Swingline Subfacilities and any Primary Lender, (i) the ratio (expressed as
a percentage) of such Primary Lender’s Primary Commitment at such time to the
aggregate Primary Commitments of the Primary Lenders at such time or (ii) if the
Primary Commitments have been terminated, the ratio (expressed as a percentage)
of the sum of such Primary Lender’s aggregate outstanding Primary Advances and
participation interest in the Primary Letter of Credit Exposure and the
Swingline Advances at such time to the aggregate outstanding Primary Advances,
Swingline Advances, and Primary Letter of Credit Exposure of all the Primary
Lenders at such time; (b) with respect to the Norwegian Facility and any
Norwegian Lender, (i) the ratio (expressed as a percentage) of such Norwegian
Lender’s Norwegian Commitment at such time to the aggregate Norwegian
Commitments of the Norwegian Lenders at such time or (ii) if the Norwegian
Commitments have been terminated, the ratio (expressed as a percentage) of such
Norwegian Lender’s aggregate outstanding Norwegian Advances and participation
interest in the Norwegian Letter of Credit Exposure at such time to the
aggregate outstanding Norwegian Advances and Norwegian Letter of Credit Exposure
of all the Norwegian Lenders at such time; and (c) with respect to the
Facilities as a whole and to any Lender, (i) the ratio (expressed as a
percentage) of such Lender’s Revolving Commitments at such time to the aggregate
Revolving Commitments of the Lenders at such time or (ii) if the Revolving
Commitments have been terminated, the ratio (expressed as a percentage) of such
Lender’s aggregate

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outstanding Revolving Advances and participation interest in the Letter of
Credit Exposure and Swingline Advances at such time to the aggregate outstanding
Revolving Advances and Swingline Advances and Letter of Credit Exposure of all
the Lenders at such time.

     “Arranger” means Wells Fargo, and its successors, in its capacity as
arranger.

     “Assignment and Acceptance” means an assignment and acceptance entered into
by a Lender and an Eligible Assignee, and accepted by the applicable
Administrative Agent, in substantially the form of the attached Exhibit A.

     “Authorized Agent” means (i) each officer of National Oilwell Norway
Holdings, A.S., a Norwegian corporation or any other wholly-owned Subsidiary of
the Borrower, who has been duly authorized and appointed by a Responsible
Officer of Borrower to act on behalf of the Borrower in requesting Norwegian
Advances and Letters of Credit under the Norwegian Facility, and (ii) each
officer of National Oilwell Canada Ltd. and Dreco Energy Services, Ltd. or any
other wholly-owned Subsidiary of the Borrower who has been duly authorized to
act on behalf of the Borrower in requesting Primary Advances and Letters of
Credit denominated in Canadian Dollars and Canadian Swingline Advances under the
Primary Facility, including, the designation of the currency, amount,
Conversions, continuations and prepayments of, and Interest Periods with respect
to, Advances and the determination of the amounts, terms and beneficiaries of
Letters of Credit requested under the applicable Facility.

     “Borrower” has the meaning set forth in the preamble to this Agreement.

     “Borrowing” means a Revolving Borrowing or the making of a Swingline
Advance by a Swingline Lender.

     “Business Day” means any day other than a Saturday, Sunday or other day on
which commercial banks are authorized to close under the Legal Requirements of,
or are in fact closed in, the state where the US Administrative Agent’s
Applicable Lending Office with respect to Obligations denominated in Dollars is
located and:

(a) if such day relates to any interest rate settings as to a Eurocurrency Rate
Advance denominated in Dollars, any fundings, disbursements, settlements and
payments in Dollars in respect of any such Eurocurrency Rate Advance, or any
other dealings in Dollars to be carried out pursuant to this Agreement in
respect of any such Eurocurrency Rate Advance, means any such day on which
dealings in deposits in Dollars are conducted by and between banks in the London
interbank eurodollar market;

(b) if such day relates to any interest rate settings as to a Eurocurrency Rate
Advance denominated in Euro, any fundings, disbursements, settlements and
payments in Euro in respect of any such Eurocurrency Rate Advance, or any other
dealings in Euro to be carried out pursuant to this Agreement in respect of any
such Eurocurrency Rate Advance, means a TARGET Day;

(c) if such day relates to any interest rate settings as to a Eurocurrency Rate
Advance denominated in a currency other than Dollars or Euro, means any such day
on which dealings in deposits in the relevant currency are conducted by and
between banks in the London or other applicable offshore interbank market for
such currency; and

(d) if such day relates to any fundings, disbursements, settlements and payments
in a currency other than Dollars or Euro in respect of a Eurocurrency Rate
Advance denominated in a currency other than Dollars or Euro, or any other
dealings in any currency other than Dollars or Euro to be

4

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carried out pursuant to this Agreement in respect of any such Eurocurrency Rate
Advance (other than any interest rate settings), means any such day on which
banks are open for foreign exchange business in the principal financial center
of the country of such currency.

     “Canadian Dollars” means the lawful money of Canada.

     “Canadian Swingline Advance” has the meaning set forth in Section 2.1(c).

     “Canadian Swingline Lender” means The Bank of Nova Scotia as the swing line
lender for the Canadian Swingline Advances, or any successor swing line lender
for Canadian Swingline Advances hereunder.

     “Capital Lease” means, for any Person, any lease of any Property (whether
real, personal or mixed) by that Person as lessee which, in accordance with
GAAP, is or should be accounted for as a capital lease on the balance sheet of
that Person.

     “Capitalized Lease Obligations” of a Person means the amount of the
obligations of such Person under Capital Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with GAAP.

     “Cash Collateral Accounts” means the special cash collateral accounts
containing cash deposited pursuant to Sections 2.4(b), 2.13(h), 2.17, 7.2(b),
7.2(c), 7.3(b) or 7.3(c) to be maintained at the Administrative Agents’ offices
in accordance with Section 7.3.

     “Change in Control” means the acquisition by any Person, or two or more
Persons acting in concert, of beneficial ownership (within the meaning of
Rule 13d-3 of the SEC under the Securities Exchange Act of 1934), directly or
indirectly, of securities of the Borrower (or other securities convertible into
such securities) representing 50% or more of the combined voting power of all
outstanding securities of the Borrower entitled to vote in the election of
directors, other than securities having such power only by reason of the
happening of a contingency.

     “Closing Date” means June 21, 2005.

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

     “Compliance Certificate” means a certificate of the Borrower in
substantially the form of the attached Exhibit B.

     “Computation Date” means (a) the last Business Day of each calendar
quarter, (b) the date of any proposed Borrowing, (c) the date of any proposed
issuance, increase or extension of a Letter of Credit, (d) the date of any
reduction or reallocation of Commitments pursuant to Section 2.4(b) or increase
of Commitments pursuant to Section 2.15, and (e) after an Event of Default has
occurred and is continuing, any other Business Day at the US Administrative
Agent’s discretion or upon instruction by the Majority Lenders.

     “Consolidated” refers to the consolidation of the accounts of the Borrower
and its Subsidiaries in accordance with GAAP, including, when used in reference
to the Borrower, principles of consolidation consistent with those applied in
the preparation of the Financial Statements.

     “Consolidated EBITDA” means, with reference to any period of time, the
EBITDA of the Borrower and its Subsidiaries calculated on a Consolidated basis
for such period, determined in

5

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accordance with GAAP; provided that, for purposes of calculating the Interest
Charge Coverage Ratio, with respect to any period prior to the effective date of
the Merger, “Consolidated EBITDA” shall mean the combined, consolidated EBITDA
of (a) Varco and its Subsidiaries, and (b) National-Oilwell and its
Subsidiaries, determined on a pro forma basis assuming that the Merger had
occurred on the first day of such period.

     “Consolidated Indebtedness” means at any time that portion of Indebtedness
which is reflected as debt for borrowed money on the consolidated balance sheet
of the Borrower and its Subsidiaries in accordance with GAAP.

     “Consolidated Interest Expense” means, with reference to any period, the
Interest Expense of the Borrower and its Subsidiaries calculated on a
consolidated basis for such period; provided that, for purposes of calculating
the Interest Charge Coverage Ratio, with respect to any period prior to the
effective date of the Merger, “Consolidated Interest Expense” shall mean the
combined, consolidated Interest Expense of (a) Varco and its Subsidiaries, and
(b) National-Oilwell and its Subsidiaries, determined on a pro forma basis
assuming that the Merger had occurred on the first day of such period.

     “Consolidated Net Worth” means at any time the consolidated stockholders’
equity of the Borrower and its Subsidiaries calculated on a consolidated basis
as of such time, determined in accordance with GAAP.

     “Controlled Group” means all members of a controlled group of corporations
and all trades (whether or not incorporated) under common control which,
together with the Borrower, are treated as a single employer under Section 414
of the Code.

     “Convert”, “Conversion”, and “Converted” each refers to a conversion of
Advances of one Type into Advances of another Type pursuant to Section 2.2(b).

     “Credit Documents” means this Agreement, the Notes, the Letter of Credit
Documents, the Agent’s Fee Letters, and each other agreement, instrument or
document executed by the Borrower or any of its Subsidiaries at any time in
connection with this Agreement, including each Notice of Borrowing.

     “Default” means (a) an Event of Default or (b) any event or condition which
with notice or lapse of time or both would, unless cured or waived, become an
Event of Default.

     “Designated Currency” means, (a) for a Revolving Borrowing, the Agreed
Currency which is designated for such Revolving Borrowing, (b) for Swingline
Advances, either Dollars or Canadian Dollars as designated for such Advances,
and (c) for any Letter of Credit, the Agreed Currency in which such Letter of
Credit is issued.

     “Dollars” and “$” means lawful money of the United States of America.

     “Dollar Amount” of any currency at any date shall mean (i) the amount of
such currency if such currency is Dollars or (ii) the equivalent in Dollars of
any amount of such currency if such currency is any Foreign Currency, calculated
using the Exchange Rate.

     “Domestic Lending Office” means, with respect to any Lender, the office of
such Lender specified as its “Domestic Lending Office” opposite its name on
Schedule 9.2 or such other office of such Lender as such Lender may from time to
time specify to the Borrower and the US Administrative Agent.

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     “EBITDA” means, for any Person, the net income (or loss) of such Person
determined in accordance with GAAP plus, to the extent deducted from revenues in
determining the net income (or loss) of such Person, (i) Interest Expense,
(ii) expense for income taxes paid or accrued, (iii) depreciation,
(iv) amortization and (v) extraordinary, unusual or non-recurring losses
incurred other than in the ordinary course of business, minus, to the extent
included in net income, extraordinary, unusual or non-recurring gains realized
other than in the ordinary course of business. Notwithstanding the foregoing,
“EBITDA” shall be determined excluding recognized but unrealized gains and/or
losses attributable to commodity, foreign currency or interest rate derivative
instruments determined under the provisions of Financial Accounting Standards
Board Statements (“FASB”) 133, as the same may be further amended, modified or
clarified by the FASB.

     “Effective Date” means the date all of the conditions precedent set forth
in Section 3.1 have been satisfied.

     “Eligible Assignee” means (a) a commercial bank organized under the laws of
the United States, or any State thereof, and having primary capital of not less
than $500,000,000 and approved by the applicable Administrative Agent, the
applicable Issuing Lenders, and (provided no Default has occurred and is
continuing) the Borrower, which approvals will not be unreasonably withheld,
(b) a commercial bank organized under the laws of any other country which is a
member of the Organization for Economic Cooperation and Development and having
primary capital (or its equivalent) of not less than $500,000,000 and approved
by the applicable Administrative Agent, the applicable Issuing Lenders, and
(provided no Default has occurred and is continuing) the Borrower, which
approvals will not be unreasonably withheld, (c) a Lender and (d) an Affiliate
of the respective assigning Lender, without approval of any Person but otherwise
meeting the eligibility requirements of (a) or (b) above.

     “Eligible Currency” means any Foreign Currency provided that: (a) quotes
for loans in such currency are available in the London interbank deposit market;
(b) such currency is freely transferable and convertible into Dollars in the
London foreign exchange market, (c) no approval of a Governmental Authority in
the country of issue of such currency is required to permit use of such currency
by any applicable Lender or Issuing Lender for making loans or issuing letters
of credit, or honoring drafts presented under letters of credit in such
currency, and (d) there is no restriction or prohibition under any applicable
Legal Requirements against the use of such currency for such purposes.

     “Environmental Claim” means any third party (including governmental
agencies and employees) action, lawsuit, claim, demand, regulatory action or
proceeding, order, decree, consent agreement or notice of potential or actual
responsibility or violation, including claims or proceedings under any
Environmental Law (“Claims”) or any permit issued under any Environmental Law,
including (a) any and all Claims by Governmental Authorities for enforcement,
cleanup, removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law, and (b) any and all Claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Substances or arising from alleged
injury or threat of injury to health or safety in relation to the environment.

     “Environmental Laws” means any and all Legal Requirements arising from,
relating to, or in connection with the environment, health or safety, relating
to (a) the protection of the environment, (b) the effect of the environment on
human health, (c) emissions, discharges or releases of Hazardous Substances into
surface water, ground water or land, or (d) the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Substances or wastes or the clean-up or other remediation thereof.

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     “Environmental Permit” means any permit, license, order, approval or other
authorization under Environmental Law.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended from time to time.

     “Euro” and “EUR” means the Euro referred to in Council Regulation (EC) No.
1103/97 dated June 17, 1997 passed by the Council of the European Union, or, if
different, the then lawful currency of the member states of the European Union
that participate in the third stage of Economic and Monetary Union.

     “Eurocurrency Liabilities” has the meaning assigned to that term in
Regulation D of the Federal Reserve Board (or any successor), as in effect from
time to time.

     “Eurocurrency Lending Office” means, with respect to any Lender, the office
of such Lender specified as its “Eurocurrency Lending Office” opposite its name
on Schedule 9.2 (or, if no such office is specified, its Domestic Lending
Office) or such other office of such Lender as such Lender may from time to time
specify to the Borrower and the applicable Administrative Agent.

     “Eurocurrency Base Rate” means, (a) the applicable London interbank offered
rate for deposits in the Designated Currency for such Borrowing appearing on the
applicable Telerate British Bankers Association Interest Settlement Rate page
for such Designated Currency as of 11:00 a.m. (London, England time) two
Business Days prior to the first day of such Interest Period, and having a
maturity equal to such Interest Period, (b) if the rate as determined under
clause (a) is not available at such time for any reason, the London interbank
offered rate for deposits in such Designated Currency appearing on Reuters
Screen FRBD as of 11:00 a.m. (London, England time) two Business Days prior to
the first day of such Interest Period, and having a maturity equal to such
Interest Period), and (c) if the rate as determined under clause (a) or clause
(b) is not available at such time for any reason, then the rate determined by
the applicable Administrative Agent to be the rate at which deposits in the
relevant currency for delivery on the first day of such Interest Period in
immediately available funds in the approximate amount of the Eurocurrency Rate
Advance being made, continued or converted by such applicable Administrative
Agent and with a term equivalent to such Interest Period would be offered by
such applicable Administrative Agent’s London Branch (or other branch or
Affiliate of such Administrative Agent) to major banks in the London or other
offshore interbank market for such currency at their request at approximately
11:00 a.m. (London time) two Business Days prior to the commencement of such
Interest Period.

     “Eurocurrency Rate” means, with respect to a Eurocurrency Rate Advance for
the relevant Interest Period, the interest rate per annum equal to
(a) Eurocurrency Base Rate divided by (b) one minus the reserve percentage
(expressed as a decimal, carried out to five decimal places) in effect on such
day, whether or not applicable to any Lender, under regulations issued from time
to time by the Federal Reserve Board for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal reserve
requirement) with respect to Eurocurrency funding (currently referred to as
“Eurocurrency liabilities”). It is agreed that for purposes of this definition,
Eurocurrency Rate Advances made hereunder shall be deemed to constitute
Eurocurrency Liabilities as defined in Regulation D and to be subject to the
reserve requirements of Regulation D. The Eurocurrency Rate for each outstanding
Eurocurrency Rate Advance shall be adjusted automatically as of the effective
date of any change in the reserve percentage described in clause (b) above.

     “Eurocurrency Rate Advance” means an Advance which bears interest as
provided in Section 2.6(c).

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     “Events of Default” has the meaning set forth in Section 7.1.

     “Exchange Rate” means, on any Business Day, with respect to any calculation
of the Dollar Amount with respect to any Foreign Currency on such date, the rate
at which such Foreign Currency may be exchanged into Dollars, as set forth on
such date on the relevant FWDS Series Reuters currency page at or about
11:00 a.m. Houston, Texas time on such date. In the event that such rate does
not appear on any such Reuters page, the “Exchange Rate” with respect to such
Foreign Currency shall be determined by reference to such other publicly
available service for displaying exchange rates as may be agreed upon by the US
Administrative Agent and the Borrower or, in the absence of such agreement, such
“Exchange Rate” shall instead be the US Administrative Agent’s spot rate of
exchange in the interbank market where its currency exchange operations in
respect of such Foreign Currency are then being conducted, at or about
10:00 A.M. local time at such date for the purchase of such Foreign Currency
with Dollars or the purchase of Dollars with such Foreign Currency, as the case
may be, for delivery two Business Days later; provided that if at the time of
any such determination no such spot rate can reasonably be quoted, the US
Administrative Agent may use any reasonable method (including obtaining quotes
from three or more market makers for such Foreign Currency) as it deems
appropriate to determine such rate and such determination shall be presumed
correct absent manifest error (without prejudice to the determination of the
reasonableness of such method).

     “Existing Credit Agreements” means (a) that certain Credit Agreement dated
as of July 30, 2002 among National-Oilwell, L.P., National-Oilwell Canada Ltd,
Dreco Energy Services Ltd., National Oilwell Norway Holdings, A.S., Wells Fargo
Bank, National Association, The Bank of Nova Scotia, DnB NOR Bank ASA, each as
an administrative agent, and the lenders party thereto, as amended, and (b) that
certain Line of Credit Agreement dated as of June 30, 2004 between the Borrower
and Wells Fargo, as amended.

     “Existing Letters of Credit” means those letters of credit issued by Wells
Fargo prior to the Effective Date, for the account of the Borrower or any
Subsidiary of the Borrower, and set forth on Schedule 1.1(b), which letters of
credit were issued under any of the Existing Credit Agreements, the Restated
Agreement or that certain letter agreement dated as of September 27, 2002
between Wells Fargo and National-Oilwell, L.P., as may have been amended.

     “Expiration Date” means, with respect to any Letter of Credit, the date on
which such Letter of Credit will expire or terminate in accordance with its
terms.

     “Facility” means the Primary Facility or the Norwegian Facility.

     “Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for any such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.

     “Federal Reserve Board” means the Board of Governors of the Federal Reserve
System or any of its successors.

     “Financial Contract” of a Person means (a) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other financial
instrument with similar characteristics, or (b) any Hedging Transaction.

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     “Financial Statements” means the financial statements described in
Section 4.6.

     “Foreign Currency” means any currency other than Dollars.

     “Foreign Currency Amount” means with respect to an amount denominated in
Dollars, the equivalent in a Foreign Currency of such amount determined at the
Exchange Rate for the purchase of such Foreign Currency with Dollars, as
determined by the US Administrative Agent on the Computation Date applicable to
such amount.

     “Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is resident for tax purposes.
For purposes of this definition, the United States, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.

     “GAAP” means United States generally accepted accounting principles as in
effect from time to time, applied on a basis consistent with the requirements of
Section 1.3.

     “Governmental Authority” means any foreign governmental authority
(including any supra-national bodies such as the European Union or the European
Central Bank), the United States of America, any state of the United States of
America and any subdivision of any of the foregoing, and any agency, department,
commission, board, authority or instrumentality, bureau or court having
jurisdiction over any Lender, the Borrower, or the Borrower’s Subsidiaries or
any of their respective Properties.

     “Granting Lender” means any Lender which grants to any one SPC the option
to provide to the Borrower all or any part of any Advance that such Granting
Lender would otherwise be obligated to make to the Borrower pursuant to this
Agreement.

     “Hazardous Substance” shall have the meaning assigned to that term in the
Comprehensive Environmental Response Compensation and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorization Acts of 1986, and shall
also include substances regulated under any other Environmental Law, including
pollutants, contaminants, petroleum, petroleum products, radionuclides,
radioactive materials, and medical and infectious waste.

     “Hazardous Waste” means the substances regulated as such pursuant to any
Environmental Law.

     “Hedging Transactions” means any transaction (including an agreement with
respect thereto) now existing or hereafter entered into by a Person which is a
rate swap, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, forward transaction, currency swap transaction,
cross-currency rate swap transaction, currency option or any other similar
transaction (including any option with respect to any of these transactions) or
any combination thereof, whether linked to one or more interest rates, foreign
currencies, commodity prices, equity prices or other financial measures.

     “Hedging Obligations” of a Person means, without duplication, any and all
obligations of such Person, whether absolute or contingent and howsoever and
whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor), under (a) any
and all Hedging Transactions, and (b) any and all cancellations, buy backs,
reversals, terminations or assignments of any Hedging Transactions.

     “Indebtedness” of a Person means, without duplication, such Person’s
(a) obligations for borrowed money, (b) obligations representing the deferred
purchase price of Property or services (other

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than accounts payable arising in the ordinary course of such Person’s business
payable on terms customary in the trade and any other amounts that are being
contested and for which adequate reserves have been established),
(c) obligations of others which such Person has directly or indirectly, whether
or not assumed, secured by Liens or payable out of the proceeds or production
from Property now or hereafter owned or acquired by such Person (but, if not
otherwise assumed, limited to the extent of such Property’s fair market value),
guaranteed or otherwise provided credit support therefore, (d) obligations which
are evidenced by notes, acceptances, or other instruments, (e) reimbursement
obligations of such Person in respect of letters of credit, surety bonds,
acceptance facilities, or drafts or similar instruments issued or accepted by
banks and other financial institutions for the account of such Person;
(f) obligations of such Person to purchase securities or other Property arising
out of or in connection with the sale of the same or substantially similar
securities or Property, (g) Capitalized Lease Obligations, (h) Net
Mark-to-Market Exposure under Hedging Transactions and other Financial
Contracts, (i) Hedging Obligations, and (j) any other obligation for borrowed
money or other financial accommodation which in accordance with GAAP would be
shown as a short term debt or long term debt on the consolidated balance sheet
of such Person.

     “Index Debt” means senior, unsecured, long-term indebtedness for borrowed
money of the Borrower that is not guaranteed by any other Person or subject to
any other credit enhancement.

     “Interest Charge Coverage Ratio” means, as of the end of any fiscal
quarter, the ratio of (a) Consolidated EBITDA for the four-fiscal quarter period
then ended to (b) Consolidated Interest Expense for the four-fiscal quarter
period then ended.

     “Interest Expense” means for any period, interest expense, whether expensed
or capitalized, paid, accrued or scheduled to be paid or accrued during such
period, determined in accordance with GAAP, without duplication.

     “Interest Period” means, for each Eurocurrency Rate Advance comprising part
of the same Borrowing, the period commencing on the date of such Advance or the
date of the Conversion of any Primary Prime Rate Advance into a Eurocurrency
Rate Advance and the Conversion of any Norwegian Prime Rate Advance into a
Eurocurrency Rate Advance, and ending on the last day of the period selected by
the Borrower pursuant to the provisions below and Section 2.2 and, thereafter,
each subsequent period commencing on the last day of the immediately preceding
Interest Period and ending on the last day of the period selected by the
Borrower pursuant to the provisions below and Section 2.2. The duration of each
such Interest Period shall be one, two, three or six months, in each case as the
Borrower may select upon notice received by the applicable Administrative Agent
not later than 12:00 p.m. (Houston, Texas time or Oslo, Norway time, as
applicable) on the day required under Section 2.2 in connection with a Revolving
Borrowing of such Type of Advance; provided, however, that:

          (a) Interest Periods commencing on the same date for Advances
comprising part of the same Borrowing shall be of the same duration;

          (b) whenever the last day of any Interest Period would otherwise occur
on a day other than a Business Day, the last day of such Interest Period shall
be extended to occur on the next succeeding Business Day, provided that if such
extension would cause the last day of such Interest Period to occur in the next
following calendar month, the last day of such Interest Period shall occur on
the next preceding Business Day;

          (c) any Interest Period which begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such

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Interest Period) shall end on the last Business Day of the calendar month in
which it would have ended if there were a numerically corresponding day in such
calendar month; and

          (d) no Interest Period shall end after the Maturity Date.

     “Investment” of a Person means any loan, advance (other than commission,
travel and similar advances to officers and employees made in the ordinary
course of business), extension of credit (other than accounts receivable arising
in the ordinary course of business) or contribution of capital by such Person;
stocks, bonds, mutual funds, partnership interests, notes, debentures or other
securities owned by such Person; any deposit accounts and certificates of
deposit owned by such Person.

     “Issuing Lenders” means Primary Issuing Lenders and the Norwegian Issuing
Lender.

     “Legal Requirement” means any law, statute, ordinance, decree, requirement,
order, judgment, injunction, rule, regulation or other restriction (or official
interpretation of any of the foregoing) of, and the terms of any license,
permit, concession, grant or franchise issued by, any Governmental Authority.

     “Lenders” means each of the lenders party to this Agreement, including each
Eligible Assignee that shall become a party to this Agreement pursuant to
Section 9.6.

     “Letter of Credit” means a Primary Letter of Credit or a Norwegian Letter
of Credit.

     “Letter of Credit Documents” means, with respect to any Letter of Credit,
such Letter of Credit and any agreements, documents, and instruments entered
into in connection with or relating to such Letter of Credit.

     “Letter of Credit Exposure” means, collectively, the Primary Letter of
Credit Exposure and the Norwegian Letter of Credit Exposure.

     “Letter of Credit Obligations” means, collectively, the Primary Letter of
Credit Obligations and the Norwegian Letter of Credit Obligations.

     “Leverage Ratio” means, as of any date of calculation, the ratio of the
Borrower’s Total Funded Consolidated Indebtedness outstanding on such date to
its Total Consolidated Capitalization outstanding on such date.

     “Lien” means any lien (statutory or otherwise), mortgage, pledge,
hypothecation, assignment, deposit arrangement, charge, deed of trust, security
interest, encumbrance or other type of preferential arrangement, priority or
other security agreement of any kind or nature whatsoever to secure or provide
for the payment of any obligation of any Person, whether arising by contract,
operation of law or otherwise (including the interest of a vendor or lessor
under any conditional sale agreement, Capital Lease or other title retention
agreement).

     “Liquid Investments” means:

          (a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States or any
agency or instrumentality thereof having maturity not more than twelve months
from the date of acquisition;

          (b) (i) negotiable or nonnegotiable interest bearing certificates of
deposit, time deposits, or other similar banking arrangements maturing within
one year from the date of acquisition

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thereof (“bank debt securities”), issued by (A) any Lender, (B) any other bank,
financial institution or trust company whose short-term senior unsecured debt
rating is at least A-2 from S&P or P-2 from Moody’s, (C) any US, Canadian, or
Norwegian domestic bank having capital and surplus of at least $100,000,000, or
(D) any other financial institution acceptable to the US Administrative Agent,
and (ii) commercial paper issued by (A) any Lender or (B) any other Person if at
the time of purchase such commercial paper is rated not less than A-2 by S&P or
P-2 by Moody’s, with maturities of not more than twelve months from the date of
acquisition;

          (c) repurchase agreements relating to investments described in clauses
(a) and (b) above with a market value at least equal to the consideration paid
in connection therewith, with any Person whose short-term senior unsecured debt
rating is at least A-2 from S&P or P-2 from Moody’s;

          (d) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any public
instrumentality thereof maturing at least twelve months from the date of
acquisition thereof or providing for the resetting of the interest rate
applicable thereto not less often than annually and, at the time of acquisition,
having one of the two highest ratings obtainable from either S&P or Moody’s; and

          (e) money market funds which invest primarily in securities of the
types described in clauses (a), (b), (c) and (d) above and which do not
constitute “margin stock” within the meaning of Regulation U of the Federal
Reserve Board; and

          (f) such other instruments (within the meaning of Article 9 of the
Texas Business and Commerce Code) as the Borrower may request and the Majority
Lenders may approve in writing, which approval will not be unreasonably
withheld.

     “Majority Lenders” means, as of the date of determination (a) with respect
to the Facilities as a whole and for purposes of declaring the Obligations due
and payable pursuant to Section 7.2, and for all purposes after the Obligations
become due and payable pursuant to Section 7.1 or 7.2 or all of the Revolving
Commitments shall have expired or terminated, two or more Lenders holding more
than 50% of the sum of the unutilized aggregate Revolving Commitments plus the
Norwegian Outstandings plus the Primary Outstandings (with the aggregate amount
of each Lender’s risk participation and funded participation in Letter of Credit
Obligations and in the Swingline Advances being deemed “held” by such Lender for
purposes of this definition), (b) with respect to the Primary Facility (and the
Swingline Subfacilities as subfacilities thereof), two or more Lenders holding
more than 50% of the sum of the unutilized Primary Commitments plus the Primary
Outstandings (with the aggregate amount of each Lender’s risk participation and
funded participation in the Primary Letter of Credit Obligations and Swingline
Advances being deemed “held” by such Lender for purposes of this definition),
and (c) with respect to the Norwegian Facility, (i) if there is only one
Norwegian Lender, such Lender, and (ii) if there are two or more Norwegian
Lenders, then two or more Lenders holding more than 50% of the sum of the
unutilized Norwegian Commitments plus the Norwegian Outstandings (with the
aggregate amount of each Lender’s risk participation and funded participation in
the Norwegian Letter of Credit Obligations being deemed “held” by such Lender
for purposes of this definition). A reference to “Majority Lenders” without a
corresponding reference to a designated Facility shall mean the Majority Lenders
described in clause (a) above.

     “Mandatory Revolving Borrowing” means a Primary Borrowing comprised of
Primary Prime Rate Advances or Eurocurrency Rate Advances made to repay a
Swingline Advance which has not been repaid to the applicable Swingline Lender
on or before the date when due.

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     “Material Adverse Effect” means a material adverse effect on (a) the
business, Property, condition (financial or otherwise), or results of operations
of the Borrower and its Subsidiaries taken as a whole, (b) the ability of the
Borrower to perform its obligations under the Credit Documents to which it is a
party, or (c) the validity or enforceability of any of the Credit Documents or
the rights or remedies of any Administrative Agent or the Lenders thereunder.

     “Material Subsidiary” means, as of a determination date, any Subsidiary of
the Borrower whose (a) revenues for the immediately preceding fiscal quarter as
determined in accordance with GAAP, (b) EBITDA for the immediately preceding
fiscal quarter as determined in accordance with GAAP, or (c) book value of total
assets as established in accordance with GAAP, is equal to or greater than 10%
of any of the Borrower’s (i) Consolidated revenues for the immediately preceding
fiscal quarter as determined in accordance with GAAP, (ii) Consolidated EBITDA
for the immediately preceding fiscal quarter as determined in accordance with
GAAP or (iii) Consolidated book value of total assets as established in
accordance with GAAP, and in each case as reflected in the Form 10-Q covering
such immediately preceding fiscal quarter (or in the case of the fiscal quarter
ending December 31st, as reflected in the Form 10-K covering the fiscal year for
such fiscal quarter).

     “Maturity Date” means June 21, 2010.

     “Maximum Rate” means the maximum nonusurious interest rate permitted to a
particular Lender under applicable Legal Requirements.

     “Moody’s” means Moody’s Investors Service, Inc. and any successor thereto
which is a nationally recognized statistical rating organization.

     “Multiemployer Plan” means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.

     “Multiple Lender” means any Lender which has both a Primary Commitment and
a Norwegian Commitment.

     “Merger” means the merger of Varco with and into National-Oilwell pursuant
to the terms of the Agreement and Plan of Merger dated as of August 11, 2004
between such parties, as amended.

     “National Oilwell” means National-Oilwell, Inc., a predecessor in interest
to Borrower.

     “Net Mark-to-Market Exposure” of a Person means, as of any date of
determination, the excess (if any) of all Unrealized Losses over all Unrealized
Profits of such Person arising from Hedging Transactions. Notwithstanding the
foregoing, “Net Mark-to-Market Exposure” shall be determined excluding
recognized but unrealized gains and/or losses attributable to commodity, foreign
currency or interest rate derivative instruments determined under the provisions
of FASB 133, as the same may be further amended, modified or clarified by the
FASB.

     “NOK Amount” of any currency at any date shall mean (i) the amount of such
currency if such currency is NOK or (ii) the equivalent in NOK of any amount of
such currency if such currency is Dollars or any Foreign Currency (other than
NOK), calculated using the Exchange Rate.

     “Norwegian Administrative Agent” means DNB Nor Bank ASA in its capacity as
administrative agent for the Norwegian Lenders pursuant to Article VIII and any
successor administrative agent in that capacity pursuant to Section 8.6.

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     “Norwegian Advance” means an advance by a Norwegian Lender to the Borrower
pursuant to Section 2.1(b).

     “Norwegian Borrowing” means a borrowing consisting of simultaneous
Norwegian Advances of the same Type made by each Norwegian Lender pursuant to
Section 2.1(b) or Converted by each Norwegian Lender to Norwegian Advances of a
different Type pursuant to Section 2.2(b).

     “Norwegian Commitment” means, with respect to any Norwegian Lender, the
amount set opposite such Norwegian Lender’s name on Schedule 1.1(a) as its
Norwegian Commitment, or if such Norwegian Lender has entered into any
Assignment and Acceptance, the amount set forth for such Norwegian Lender as its
Norwegian Commitment in the Register maintained by the Norwegian Administrative
Agent pursuant to Section 9.6(d), as such amount may be reduced or reallocated
pursuant to Section 2.4 or increased pursuant to Section 2.15; provided that,
the aggregate Norwegian Commitments shall not exceed $100,000,000.

     “Norwegian Facility” means, collectively, (a) the revolving credit facility
described in Section 2.1(b), and (d) the letter of credit subfacility described
in Section 2.13(b).

     “Norwegian Issuing Lender” means DNB NOR Bank ASA.

     “Norwegian Krone” or “NOK” means lawful money of the Kingdom of Norway.

     “Norwegian Lender” means a Lender that has a Norwegian Commitment or holds
any part of the Norwegian Outstandings.

     “Norwegian Letter of Credit” means, individually, any letter of credit
issued by the Norwegian Issuing Lender under the Norwegian Facility which is
subject to this Agreement.

     “Norwegian Letter of Credit Exposure” means, at any time, the Dollar Amount
of the sum of (a) the aggregate undrawn maximum face amount of each Norwegian
Letter of Credit issued at such time and (b) the aggregate unpaid amount of all
Reimbursement Obligations related to Norwegian Letters of Credit at such time.

     “Norwegian Letter of Credit Obligations” means the obligations of the
Borrower under this Agreement in connection with the Norwegian Letters of
Credit.

     “Norwegian Note” means a promissory note of a Borrower payable to the order
of any Norwegian Lender, in substantially the form of the attached Exhibit F
evidencing Indebtedness of such Borrower to such Lender resulting from Norwegian
Advances owing to such Norwegian Lender.

     “Norwegian Outstandings” means, as of the date of determination, the sum of
(a) the Dollar Amount of the aggregate outstanding principal amount of the
Norwegian Advances plus (b) the Dollar Amount of the Norwegian Letter of Credit
Exposure.

     “Norwegian Prime Rate Advance” means an Advance which bears interest as
provided in Section 2.6(b). All Norwegian Prime Rate Advances shall be
denominated in Norwegian Krone.

     “Norwegian Prime Rate” means, on any day, the prime rate of the Norwegian
Administrative Agent in effect for that day at its offices in Oslo, Norway. The
Norwegian Prime Rate is a reference rate and does not necessarily represent the
lowest or best rate or a favored rate, and Norwegian Administrative Agent
disclaims any statement, representation or warranty to the contrary. Norwegian
Administrative

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Agent may make commercial loans or other loans at rates of interest at, above or
below the Norwegian Prime Rate. Each change in the Norwegian Prime Rate shall be
effective on the day the change is announced by the Norwegian Administrative
Agent.

     “Note” means a Primary Note, a Norwegian Note or a Swingline Note.

     “Notice of Borrowing” means a notice of borrowing in the form of the
attached Exhibit C-1 or Exhibit C-2, as applicable, and signed by a Responsible
Officer of the Borrower or by an Authorized Agent on behalf of the Borrower.

     “Notice of Conversion or Continuation” means a notice of conversion or
continuation in the form of the attached Exhibit D-1 or Exhibit D-2, as
applicable, and signed by a Responsible Officer of the Borrower.

     “Obligations” means all Advances, Reimbursement Obligations, Hedging
Obligations owing to any Lender or any Affiliate of a Lender, and any other
fees, expenses, reimbursements, indemnities or other obligations payable by the
Borrower to the Administrative Agents, the Lenders, the Issuing Lenders, the
Swingline Lenders or any other indemnified party under the Credit Documents.

     “Operating Lease” of a Person means any lease of Property (other than a
Capital Lease) by such Person as lessee which has an original term (including
any required renewals and any renewals effective at the option of the lessor) of
one year or more.

     “Overnight Rate” means, for any day, (a) with respect to any amount
denominated in Dollars, the greater of (i) the Federal Funds Rate and (ii) an
overnight rate determined by the applicable Administrative Agent, applicable
Issuing Lender, or applicable Swingline Lender, as the case may be, in
accordance with banking industry rules on interbank compensation, and (b) with
respect to any amount denominated in a Foreign Currency, the rate of interest
per annum at which overnight deposits in such Foreign Currency, in an amount
approximately equal to the amount with respect to which such rate is being
determined, would be offered for such day by a branch or Affiliate of the
applicable Administrative Agent in the applicable offshore interbank market for
such currency to major banks in such interbank market.

     “PBGC” means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.

     “Permitted Business” has the meaning set forth in Section 6.9.

     “Permitted Liens” means the Liens permitted to exist pursuant to
Section 6.1.

     “Person” means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, limited
liability company, joint venture or other entity, or a government or any
political subdivision or agency thereof or any trustee, receiver, custodian or
similar official.

     “Plan” means an employee benefit plan (other than a Multiemployer Plan)
maintained for employees of the Borrower or any member of the Controlled Group
and covered by Title IV of ERISA or subject to the minimum funding standards
under Section 412 of the Code.

     “Pounds Sterling” and/or “£” means lawful money of the United Kingdom of
Great Britain and Northern Ireland.

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     “Primary Advance” means an advance by a Primary Lender to the Borrower
pursuant to Section 2.1(a).

     “Primary Borrowing” means a borrowing consisting of simultaneous Primary
Advances made by each Primary Lender pursuant to Section 2.1(a) or Converted by
each Primary Lender to Primary Advances of a different Type pursuant to
Section 2.2(b).

     “Primary Commitment” means, with respect to any Primary Lender, the amount
set opposite such Primary Lender’s name on Schedule 1.1(a) as its Primary
Commitment, or if such Primary Lender has entered into any Assignment and
Acceptance, the amount set forth for such Primary Lender as its Primary
Commitment in the Register maintained by the US Administrative Agent pursuant to
Section 9.6(d), as such amount may be reduced or reallocated pursuant to
Section 2.4 or increased pursuant to Section 2.15.

     “Primary Facility” means, collectively, (a) the revolving credit facility
described in Section 2.1(a), (b) the Swingline Subfacilities, and (c) the letter
of credit subfacility described in Section 2.13(a).

     “Primary Issuing Lender” means (a) Wells Fargo in its capacity as an issuer
of Letters of Credit hereunder, (b) any other Primary Lender designated in
writing to the US Administrative Agent by the Borrower (and consented to by such
Primary Lender) as an issuer of Primary Letters of Credit pursuant to
Section 2.13(a); provided that the Borrower may not designate more than four
Primary Lenders (including Wells Fargo) as issuers of Primary Letters of Credit;
and (c) any Lender acting as a successor issuing lender pursuant to Section 8.6.

     “Primary Lender” means a Lender that has a Primary Commitment or holds any
part of the Primary Outstandings.

     “Primary Letter of Credit” means, individually, any letter of credit issued
by any Primary Issuing Lender under the Primary Facility which is subject to
this Agreement, including the letters of credit described on Schedule 1.1(c).

     “Primary Letter of Credit Exposure” means, at any time, the Dollar Amount
of the sum of (a) the aggregate undrawn maximum face amount of each Primary
Letter of Credit at such time and (b) the aggregate unpaid amount of all
Reimbursement Obligations related to Primary Letters of Credit at such time.

     “Primary Letter of Credit Obligations” means the obligations of the
Borrower under this Agreement in connection with the Primary Letters of Credit.

     “Primary Note” means a promissory note of a Borrower payable to the order
of any Primary Lender, in substantially the form of the attached Exhibit E
evidencing Indebtedness of such Borrower to such Lender resulting from Primary
Advances owing to such Primary Lender.

     “Primary Outstandings” means, as of the date of determination, the sum of
(a) Dollar Amount of the aggregate outstanding principal amount of the Primary
Advances and the Swing Line Advances plus (b) the Dollar Amount of the Primary
Letter of Credit Exposure.

     “Primary Prime Rate” means at any time the rate of interest most recently
announced by Wells Fargo at its principal office in San Francisco, California as
its prime rate, whether or not the Borrower has notice thereof, with the
understanding that the Prime Rate is one of Wells Fargo’s base rates and serves
as the basis upon which effective rates of interest are calculated for those
loans making reference thereto, and is evidenced by the recording thereof after
its announcement in such internal publication or

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publications as Wells Fargo may designate. Each change in the Prime Rate shall
be effective on the day the change is announced by Wells Fargo.

     “Primary Prime Rate Advance” means an Advance which bears interest as
provided in Section 2.6(a). All Primary Prime Rate Advances shall be denominated
in Dollars.

     “Property” of any Person means any and all property (whether real,
personal, or mixed, tangible or intangible) or other assets owned, leased or
operated by such Person.

     “Register” has the meaning set forth in paragraph (d) of Section 9.6.

     “Reimbursement Obligations” means all of the obligations of the Borrower
set forth in Section 2.13(e).

     “Release” shall have the meaning set forth under any Environmental Law.

     “Reportable Event” means any of the events set forth in Section 4043(b) of
ERISA and the regulations issued under such section, with respect to a Plan.

     “Response” shall have the meaning set forth under any Environmental Law.

     “Responsible Officer” means the Chief Executive Officer, the President, the
Chief Financial Officer, any Vice President, any Treasurer, any Assistant
Treasurer, any Secretary, any Assistant Secretary or Manager of any Person.

     “Restated Agreement” has the meaning set forth in the Recitals of this
Agreement.

     “Restricted Payment” means (a) any direct or indirect payment (other than
scheduled payments), prepayment, redemption, defeasance, retirement, purchase
of, or other acquisition of or deposit of funds or Property for the payment
(other than scheduled payments), prepayment, redemption, defeasance, retirement,
or purchase of Senior Notes, and (b) the making by any Person of any dividends
or other distributions (in cash, property, or otherwise) on, or payment for the
purchase, redemption or other acquisition or retirement of, any shares of any
capital stock or other ownership interests of such Person, other than dividends
payable in such Person’s stock or ownership interests.

     “Revolving Advance” means a Primary Advance or a Norwegian Advance made by
a Lender to the Borrower pursuant to Section 2.1(a) or Section 2.1(b),
respectively.

     “Revolving Borrowing” means a Primary Borrowing or a Norwegian Borrowing.

     “Revolving Commitments” means, collectively for a Lender, its Norwegian
Commitment, if any, and its Primary Commitment, if any.

     “S&P” means Standard & Poor’s Ratings Service, a division of The
McGraw-Hill Companies, Inc., or any successor thereof which is a nationally
recognized statistical rating organization.

     “SEC” means the United States Securities and Exchange Commission.

     “Senior Notes” means any senior debt securities of the Borrower.

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     “Senior Note Documents” means any indenture, note or other agreement
evidencing or governing the Senior Notes, as such indenture, note or other
agreement may be amended, supplemented or otherwise modified as permitted
hereby.

     “Subsidiary” of a Person means any corporation, association, partnership,
limited liability company, or other business entity of which more than 50% of
the outstanding shares of capital stock (or other equivalent interests) having
by the terms thereof ordinary voting power under ordinary circumstances to elect
a majority of the board of directors or Persons performing similar functions
(or, if there are no such directors or Persons, having general voting power) of
such entity (irrespective of whether at the time capital stock (or other
equivalent interests) of any other class or classes of such entity shall or
might have voting power upon the occurrence of any contingency) is at the time
directly or indirectly owned or controlled by such Person, by such Person and
one or more Subsidiaries of such Person or by one or more Subsidiaries of such
Person.

     “Swingline Advance” means a US Swingline Advance or a Canadian Swingline
Advance.

     “Swingline Due Date” means the 14th and the last day of each calendar
month.

     “Swingline Rate” means, (a) as to a US Swingline Advance, the rate per
annum agreed to from time time in writing between the Borrower and the US
Swingline Lender for US Swingline Advances, and (b) as to a Canadian Swingline
Advance, the rate per annum agreed to from time to time in writing between the
Borrower and the Canadian Swingline Lender for Canadian Swingline Advances.

     “Swingline Note” means a promissory note of the Borrower payable to the
order of the applicable Swingline Lender in substantially the form of the
attached Exhibit G, evidencing the Indebtedness of the Borrower to such
Swingline Lender from Swingline Advances owing to such Swingline Lender.

     “Swingline Subfacilities” means (a) the revolving credit facility as
provided by the US Swingline Lender, and (b) the revolving credit facility as
provided by the Canadian Swingline Lender, in either case, as provided under
Section 2.1(c) as a subfacility of the Primary Facility.

     “TARGET Day” means any day on which the Trans-European Automated Real-time
Gross Settlement Express Transfer (TARGET) payment system (or, if such payment
system ceases to be operative, such other payment system (if any) determined by
the applicable Administrative Agent to be a suitable replacement) is open for
the settlement of payments in Euro.

     “Termination Event” means (a) the occurrence of a Reportable Event with
respect to a Plan, as described in Section 4043 of ERISA and the regulations
issued thereunder (other than a Reportable Event not subject to the provision
for 30-day notice to the PBGC under such regulations), (b) the withdrawal of the
Borrower or any of its Affiliates from a Plan during a plan year in which it was
a “substantial employer” as defined in Section 4001(a)(2) of ERISA, (c) the
giving of a notice of intent to terminate a Plan under Section 4041(c) of ERISA,
(d) the institution of proceedings to terminate a Plan by the PBGC, or (e) any
other event or condition which constitutes grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Plan.

     “Total Consolidated Capitalization” means the sum of Consolidated
Indebtedness and Consolidated Net Worth.

     “Total Funded Consolidated Indebtedness” means at any time the aggregate
Dollar Amount of Consolidated Indebtedness which has actually been funded and is
outstanding at such time, whether or not such amount is due or payable at such
time.

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     “Type” has the meaning set forth in Section 1.4.

     “Unrealized Losses” means, with respect to any Hedging Transaction, the
fair market value of the cost to such Person of replacing such Hedging
Transaction as of the date of determination (assuming such Hedging Transaction
were to be terminated as of that date).

     “Unrealized Profits” means, with respect to any Hedging Transaction, the
fair market value of the gain to such Person of replacing such Hedging
Transaction as of the date of determination (assuming such Hedging Transaction
were to be terminated as of that date).

     “US Administrative Agent” means Wells Fargo Bank, National Association in
its capacity as administrative agent for the Primary Lenders pursuant to
Article VIII and any successor administrative agent in that capacity pursuant to
Section 8.6.

     “US Swingline Advance” has the meaning set forth in Section 2.1(c).

     “US Swingline Lender” means Wells Fargo as the swing line lender for the US
Swingline Advances, or any successor swing line lender hereunder.

     “Varco” means Varco International, Inc., a predecessor in interest to
Borrower.

     “Wells Fargo” means Wells Fargo Bank, National Association.

     Section 1.2 Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word “from” means “from and including” and the words “to” and “until” each
means “to but excluding”.

     Section 1.3 Accounting Terms; Changes in GAAP; Foreign Currency Limits.

          (a) All accounting terms not specifically defined in this Agreement
shall be construed in accordance with GAAP applied on a consistent basis with
those applied in the preparation of the Financial Statements.

          (b) Unless otherwise indicated, all financial statements of the
Borrower, all calculations for compliance with covenants in this Agreement, and
all calculations of any amounts to be calculated under the definitions in
Section 1.1 shall be based upon the Consolidated accounts of the Borrower and
its Subsidiaries in accordance with GAAP.

          (c) If any changes in accounting principles after the Effective Date
are required by GAAP or the Financial Accounting Standards Board of the American
Institute of Certified Public Accountants or similar agencies results in a
change in the method of calculation of, or affects the results of such
calculation of, any of the financial covenants, standards or terms found in this
Agreement, then the parties shall enter into and diligently pursue negotiations
in order to amend such financial covenants, standards or terms so as to
equitably reflect such change, with the desired result that the criteria for
evaluating the Borrower’s and its Consolidated Subsidiaries’ financial condition
shall be the same after such change as if such change had not been made.

          (d) Wherever in this Agreement in connection with a Revolving
Borrowing, Conversion, continuation or prepayment of a Norwegian Prime Rate
Advance, Eurocurrency Rate Advance or the issuance, amendment or extension of a
Letter of Credit, an amount (such as a required minimum or multiple amount) is
expressed in Dollars, but such Borrowing, Norwegian Prime Rate

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Advance, Eurocurrency Rate Advance, or Letter of Credit is denominated in a
Foreign Currency, such amount shall be the equivalent in a Foreign Currency of
such amount determined at the Exchange Rate for the purchase of such Foreign
Currency with Dollars, as determined by the US Administrative Agent on the
Computation Date applicable to such amount (rounded to the nearest unit of such
Foreign Currency, with 0.5 of a unit being rounded upward).

     Section 1.4 Types of Advances. Advances are distinguished by “Type”. The
“Type” of an Advance refers to the determination whether such Advance is a
Eurocurrency Rate Advance, Primary Prime Rate Advance, Norwegian Prime Rate
Advance, a Canadian Swingline Advance or a US Swingline Advance, each of which
constitutes a Type.

     Section 1.5 Miscellaneous. The words “include,” “includes” and “including”
shall be deemed to be followed by the phrase “without limitation.” The word
“will” shall be construed to have the same meaning and effect as the word
“shall.” Article, Section, Schedule and Exhibit references are to Articles and
Sections of and Schedules and Exhibits to this Agreement, unless otherwise
specified.

ARTICLE II

THE ADVANCES AND THE LETTERS OF CREDIT

     Section 2.1 The Advances.

          (a) Primary Advances. Each Primary Lender severally agrees, on the
terms and conditions set forth in this Agreement, to make Primary Advances to
the Borrower from time to time on any Business Day prior to the Maturity Date in
an aggregate amount not to exceed at any time outstanding an amount equal to
such Lender’s Primary Commitment less the sum of the Dollar Amount of (i) the
aggregate principal amount of Primary Advances owing to such Lender at such
time, (ii) such Lender’s Applicable Pro Rata Share of the aggregate of the
Primary Letter of Credit Exposure at such time, and (iii) such Lender’s
Applicable Pro Rata Share of the Swingline Advances; provided that, (A) before
and after giving effect to such Borrowing, the aggregate Dollar Amount of all
outstanding Primary Advances, Swingline Advances and Primary Letter of Credit
Exposure at any time may not exceed the aggregate Primary Commitments at such
time, and (B) such Primary Advances may be denominated and funded in any Agreed
Currency. Within the limits of each Lender’s Primary Commitment, the Borrower
may from time to time prepay pursuant to Section 2.7 and reborrow under this
Section 2.1(a).

          (b) Norwegian Advances. Each Norwegian Lender severally agrees, on the
terms and conditions set forth in this Agreement, to make Norwegian Advances to
the Borrower from time to time on any Business Day prior to the Maturity Date in
an aggregate principal amount at any one time outstanding up to but not
exceeding such Lender’s Norwegian Commitment less the sum of the Dollar Amount
of (i) the aggregate principal amount of Norwegian Advances owing to such Lender
at such time, and (ii) such Lender’s Applicable Pro Rata Share of the aggregate
of the Norwegian Letter of Credit Exposure at such time; provided that,
(A) before and after giving effect to such Borrowing, the aggregate Dollar
Amount of all outstanding Norwegian Advances and Norwegian Letter of Credit
Exposure at any time may not exceed the aggregate Norwegian Commitments at such
time, and (B) such Norwegian Advances may be denominated and funded in any
Agreed Currency. Within the limits of each Lender’s Norwegian Commitment, the
Borrower may from time to time prepay pursuant to Section 2.7 and reborrow under
this Section 2.1(b).

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          (c) Swingline Advances.

          (i) On the terms and conditions set forth in this Agreement, (A) the
US Swingline Lender may, in its sole discretion from time-to-time on any
Business Day during the period from the date of this Agreement until the
Maturity Date, make advances (“US Swingline Advances”) to the Borrower in an
aggregate principal amount not to exceed $40,000,000 outstanding at any time and
denominated in the Designated Currency; and (B) the Canadian Swingline Lender
may, in its sole discretion from time-to-time on any Business Day during the
period from the date of this Agreement until the Maturity Date, make advances
(“Canadian Swingline Advances”) to the Borrower in an aggregate principal amount
not to exceed $15,000,000 outstanding at any time and denominated in the
Designated Currency; provided that, with respect to both Swingline
Subfacilities, before and after giving effect to any Borrowing, the aggregate
Dollar Amount of all outstanding Primary Advances, Swingline Advances and the
Primary Letter of Credit Exposure may not exceed the aggregate Primary
Commitments at such time; and provided further that, with respect to both
Swingline Subfacilities, no Swingline Advance shall be made if the statements
set forth in Section 3.2 are not true on the date of the making of such
Swingline Advance, it being agreed by the Borrower that the giving of the
applicable Notice of Borrowing and the acceptance by the Borrower of the
proceeds of such Swingline Advance shall constitute a representation and
warranty by the Borrower that on the date of such Swingline Advance such
statements are true. Subject to the other provisions hereof, the Borrower may
from time-to-time borrow, prepay (in whole or in part) and reborrow Swingline
Advances. Immediately upon the making of a Swingline Advance, each Primary
Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the applicable Swingline Lender a risk participation in such
Swingline Advance in an amount equal to its Applicable Pro Rata Share of such
Swingline Advance.

          (ii) Except as provided in the following clause (iv) below, each
request for a US Swingline Advance shall be made pursuant to telephone notice to
the US Swingline Lender given no later than 1:00 p.m. (Houston, Texas time) on
the date of the proposed Swingline Advance, promptly confirmed by a completed
and executed Notice of Borrowing telecopied to the US Administrative Agent. The
US Swingline Lender will promptly (but in any event prior to 3:00 p.m. (Houston,
Texas time) on the date of such proposed US Swingline Advance make such US
Swingline Advance available to the Borrower at the Borrower’s account with the
US Administrative Agent or such other accounts as may be designated by the
Borrower.

          (iii) Except as provided in the following clause (iv) below, each
request for a Canadian Swingline Advance shall be made pursuant to telephone
notice to the Canadian Swingline Lender, together with a written notice to the
US Administrative Agent, given no later than 12:00 p.m. (Calgary, Alberta time)
on the date of the proposed Swingline Advance, promptly confirmed by a completed
and executed Notice of Borrowing telecopied to the Canadian Swingline Lender and
the US Administrative Agent. If, on the date such request is made, the Dollar
Amount of the sum of the outstanding Primary Advances and the Primary Letter of
Credit Exposure is equal to or less than 50% of the aggregate Primary
Commitments, then subject to the terms and conditions hereof, the Canadian
Swingline Lender will, not later than 2:00 p.m. (Calgary, Alberta time) on the
borrowing date specified for such Canadian Swingline Advance, make the amount of
such Canadian Swingline Advance available at the Borrower’s account with the US
Administrative Agent or such other accounts as may be designated by the
Borrower. However, if on the date such request is made, the Dollar Amount of the
sum of the outstanding Primary Advances and the Primary Letter of Credit
Exposure is greater than 50% of the aggregate Primary Commitments, then
(A) promptly after receipt by the Canadian Swingline Lender of any

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request for a Canadian Swingline Advance, the Canadian Swingline Lender will
confirm with the US Administrative Agent that the US Administrative Agent has
also received such request and, if not, the Canadian Swingline Lender will
notify the US Administrative Agent of the contents thereof, and (B) unless the
Canadian Swingline Lender has received notice in writing from the US
Administrative Agent (including at the request of any Lender) prior to 2:00 p.m.
(Calgary, Alberta time) on the date of the proposed Canadian Swingline Advance
directing the Canadian Swingline Lender not to make such Canadian Swingline
Advance as a result of the limitations set forth in the first proviso of
Section 2.1(c) above then, subject to the terms and conditions hereof, the
Canadian Swingline Lender will, not later than 3:00 p.m. (Calgary, Alberta time)
on the borrowing date specified for such Canadian Swingline Advance, make the
amount of such Canadian Swingline Advance available at the Borrower’s account
with the US Administrative Agent or such other accounts as may be designated by
the Borrower.

          (iv) Each Swingline Lender at any time in its sole and absolute
discretion may request, on behalf of the Borrower (which hereby irrevocably
authorizes each Swingline Lender to so request on its behalf), that each Primary
Lender make (A) a Primary Prime Rate Advance denominated in Dollars in the case
of refinancing Swingline Advances denominated in Dollars, and (b) a Eurocurrency
Rate Advance in the same Foreign Currency with Interest Period of one month in
the case of refinancing Swingline Advances denominated in Canadian Dollars, in
either case, in an amount equal to such Primary Lender’s Applicable Pro Rata
Share of the amount of the applicable Swingline Advances then outstanding. The
applicable Swingline Lender shall give the US Administrative Agent and each
Primary Lender notice of such Mandatory Revolving Borrowing by 12:00 p.m.
(Houston, Texas time) on the date the Mandatory Revolving Borrowing is to be
made and including the Designated Currency. Each Primary Lender shall make its
Primary Advance available to the US Administrative Agent for the account of the
applicable Swingline Lender in immediately available funds by 2:00 p.m.
(Houston, Texas time) on the date requested, and the Borrower hereby irrevocably
instructs the applicable Swingline Lender to apply the proceeds of such
Mandatory Revolving Borrowing to the payment of the outstanding Swingline
Advances.

          (v) If for any reason any Swingline Advance cannot be refinanced by a
Primary Borrowing in accordance with clause (ii) above, the request for the
Primary Advances submitted by the applicable Swingline Lender as set forth
therein shall be deemed to be a request by such Swingline Lender that each of
the Primary Lenders fund its risk participation in the relevant Swingline
Advances and each Primary Lender’s payment to the US Administrative Agent for
the account of the applicable Swingline Lender pursuant to clause (ii) above
shall be deemed payment in respect of such participation.

          (vi) If any Lender fails to make available to the US Administrative
Agent for the account of the Swingline Lender any amount required to be paid by
such Lender pursuant to the foregoing provisions of this Section 2.1(c) by the
time specified in this Section 2.1(c), such Swingline Lender shall be entitled
to recover from such Primary Lender (acting through the US Administrative
Agent), on demand, such amount with interest thereon for the period from the
date such payment is required to the date on which such payment is immediately
available to the Swingline Lender at a rate per annum equal to the applicable
Overnight Rate from time to time in effect. A certificate of the Swingline
Lender submitted to any Primary Lender (through the US Administrative Agent)
with respect to any amounts owing under this clause (vi) shall be conclusive
absent manifest error.

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          (vii) Each Primary Lender’s obligation to make the Primary Advances or
to purchase and fund risk participations in Swingline Advances pursuant to this
Section 2.1(c) shall be absolute and unconditional and shall not be affected by
any circumstance, including (A) any setoff, counterclaim, recoupment, defense or
other right which such Primary Lender may have against the Swingline Lender, the
Borrower or any other Person for any reason whatsoever, (B) the occurrence or
continuance of a Default, (C) whether or not the conditions precedent in
Section 3.2 have been satisfied. (D) termination of the Primary Currency
Commitments or acceleration of the Advances, and (E) any other occurrence, event
or condition, whether or not similar to any of the foregoing. No such funding of
risk participations shall relieve or otherwise impair the obligation of the
Borrower to repay Swingline Advances, together with interest as provided herein.

          (viii) At any time after any Primary Lender has purchased and funded a
risk participation in a Swingline Advance, if the applicable Swingline Lender
receives any payment on account of such Swingline Advance, the Swingline Lender
will distribute to such Primary Lender its Applicable Pro Rata Share of such
payment (appropriately adjusted, in the case of interest payments, to reflect
the period of time during which such Primary Lender’s risk participation was
funded) in the same funds as those received by the Swingline Lender.

          (ix) Each Swingline Lender shall be responsible for invoicing the
Borrower for interest on the Swingline Advances made by such Swingline Lender.
Until each Primary Lender funds its Primary Prime Rate Advance, Eurocurrency
Rate Advance or risk participation pursuant to this Section 2.1(c) to refinance
such Lender’s Applicable Pro Rata Share of any Swingline Advance, interest in
respect of such Applicable Pro Rata Share shall be solely for the account of the
applicable Swingline Lender.

          (x) The Borrower shall make all payments of principal and interest in
respect of the US Swingline Advances directly to the US Swingline Lender and all
payments of principal and interest in respect of the Canadian Swingline Advances
directly to the Canadian Swingline Lender.

      Section 2.2 Method of Borrowing.

          (a) Notice. Each Revolving Borrowing shall be made pursuant to a
Notice of Borrowing and given:

          (i) by the Borrower to the US Administrative Agent not later than
12:00 p.m. (Houston, Texas time) on the fourth Business Day

before the date of the proposed Borrowing in the case of a Eurocurrency Rate
Advance denominated in a Foreign Currency,

          (ii) by the Borrower to the US Administrative Agent not later than
12:00 p.m. (Houston, Texas time) on the third Business Day

before the date of the proposed Borrowing in the case of a Eurocurrency Rate
Advance denominated in Dollars,

          (iii) by the Borrower to the US Administrative Agent not later than
12:00 p.m. (Houston, Texas time) one Business Day before the

date of the proposed Borrowing in the case of a Primary Prime Rate Advance;

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          (iv) by the Borrower to the Norwegian Administrative Agent not later
than 12:00 p.m. (Oslo, Norway time) on the second Business Day before the date
of the proposed Borrowing in the case of a Eurocurrency Rate Advances under the
Norwegian Facility; and

          (v) by the Borrower to the Norwegian Administrative Agent not later
than 12:00 p.m. (Oslo, Norway time) one Business Day before the date of the
proposed Borrowing in the case of a Norwegian Prime Rate Advance.

The applicable Administrative Agent shall give each applicable Lender prompt
notice on the day of receipt of timely Notice of Borrowing of such proposed
Borrowing by telecopier; provided however that the Administrative Agents and
each of the Lenders hereby waive the requirement in subsection (ii) of this
Section 2.2(a) that the Borrower provide three Business Days advance written
notice of the date of the initial Borrowing to be made on the Closing Date,
which funds shall, among other things, pay the advances outstanding on the
Closing Date under the Exising Credit Agreements and the Restated Agreement.
Each Notice of Borrowing shall be by telephone or telecopier, and if by
telephone, confirmed promptly in writing, specifying the (i) requested date of
such Borrowing (which shall be a Business Day), (ii) requested Type of Advances
comprising such Borrowing, (iii) aggregate amount of such Borrowing, (iv) if
such Borrowing is to be comprised of Eurocurrency Rate Advances, the Interest
Period for each such Advance, and (v) the Designated Currency of such Borrowing.
In the case of a proposed Borrowing comprised of Eurocurrency Rate Advances, the
applicable Administrative Agent shall promptly notify each applicable Lender of
the applicable interest rate under Section 2.6(c) or Section 2.6(d), as
applicable. Each Primary Lender or Norwegian Lender, as applicable, shall before
3:00 p.m. (Houston, Texas time or Oslo, Norway time, as applicable) on the date
of the proposed Borrowing, make available for the account of its Applicable
Lending Office to the applicable Administrative Agent at its address referred to
in Section 9.2, or such other location as the applicable Administrative Agent
may specify by notice to the applicable Lenders, in same day funds, such
Lender’s Applicable Pro Rata Share of such Borrowing. Promptly upon the
applicable Administrative Agent’s receipt of such funds (but in any event not
later than 4:00 p.m. (Houston, Texas time or Oslo, Norway time, as applicable)
on the date of the proposed Borrowing) and provided that the applicable
conditions set forth in Article III have been satisfied, the applicable
Administrative Agent will make such funds available to the Borrower at its
account with such Administrative Agent.

          (b) Conversions and Continuations. In order to elect to Convert or
continue Advances comprising part of the same Revolving Borrowing under this
Section, the Borrower shall:

          (i) in case of a Primary Borrowing, deliver an irrevocable Notice of
Conversion or Continuation to the US Administrative Agent at the US
Administrative Agent’s office no later than 12:00 p.m. (Houston, Texas time)
(A) at least one Business Day in advance of the proposed conversion date in the
case of a Conversion of such Advances to Primary Prime Rate Advances, (B) at
least three Business Days in advance of the proposed Conversion or continuation
date in the case of a Conversion to, or a continuation of, Eurocurrency Rate
Advances denominated in Dollars; and (C) at least four Business Days in advance
of the proposed Conversion or continuation date in the case of a Conversion to,
or a continuation of, Eurocurrency Rate Advances denominated in Foreign
Currencies;

          (ii) in case of a Norwegian Borrowing, deliver an irrevocable Notice
of Conversion or Continuation to the Norwegian Administrative Agent at the
Norwegian Administrative Agent’s office no later than 12:00 p.m. (Oslo, Norway
time) (A) at least one Business Day in advance of the proposed conversion date
in the case of a Conversion of such Advances to Norwegian Prime Rate Advances
and (B) at least two Business Days in advance of

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the proposed Conversion or continuation date in the case of a Conversion to, or
a continuation of, Eurocurrency Rate Advances under the Norwegian Facility.

Each such Notice of Conversion or Continuation shall be in writing or by
telecopier, specifying (A) the requested Conversion or continuation date (which
shall be a Business Day), (B) the Borrowing amount and Type of the Advances to
be Converted or continued, (C) whether a Conversion or continuation is
requested, and if a Conversion, into what Type of Advances, and (D) in the case
of a Conversion to, or a continuation of, Eurocurrency Rate Advances, the
requested Interest Period. Promptly after receipt of a Notice of Conversion or
Continuation under this paragraph, the applicable Administrative Agent shall
provide each applicable Lender with a copy thereof and, in the case of a
Conversion to or a continuation of Eurocurrency Rate Advances, notify each
applicable Lender of the applicable interest rate under Section 2.6(c) or
Section 2.6(d) as applicable. For purposes other than the conditions set forth
in Section 3.2, the portion of Revolving Advances comprising part of the same
Revolving Borrowing that are Converted to Revolving Advances of another Type
shall constitute a new Revolving Borrowing.

          (c) Certain Limitations. Notwithstanding anything in paragraphs
(a) and (b) above:

          (i) each Borrowing (other than a Borrowing of Swingline Advances)
shall be, (A) in the case of Eurocurrency Rate Advances, in an aggregate amount
not less than $3,000,000 and greater multiples of $1,000,000 in excess thereof,
(B) in the case of Primary Prime Rate Advances, shall be in an aggregate amount
not less than $500,000 and greater multiples of $100,000 in excess thereof, and
(C) in the case of Norwegian Borrowings, in the aggregate Dollar Amount not less
$3,000,000 and greater multiples of $1,000,000 in excess thereof, and, in any
case, shall consist of Advances of the same Type made on the same day by the
applicable Lenders according to their Applicable Pro Rata Share;

          (ii) at no time shall there be more than eight Interest Periods
applicable to outstanding Eurocurrency Rate Advances under the Primary Facility
nor more than five Interest Periods applicable to Eurocurrency Rate Advances
under the Norwegian Facility;

          (iii) no single Borrowing consisting of Eurocurrency Rate Advances may
include Advances in different currencies;

          (iv) the Borrower may not select Eurocurrency Rate Advances for any
Borrowing to be made, Converted or continued if (A) the aggregate Dollar Amount
of such Borrowing is less than $3,000,000 or (B) a Default or Event of Default
has occurred and is continuing;

          (v) (A) if any Lender shall, at any time prior to the making of any
requested Borrowing comprised of Eurocurrency Rate Advances, notify the
applicable Administrative Agent that the introduction of or any change in or in
the interpretation of any Legal Requirement makes it unlawful, or that any
central bank or other Governmental Authority asserts that it is unlawful, for
such Lender or its Applicable Lending Office to perform its obligations under
this Agreement to make Eurocurrency Rate Advances or to fund or maintain
Eurocurrency Rate Advances, or any Governmental Authority has imposed material
restrictions on the authority of such Lender to purchase or sell, or take
deposits of, Dollars or any Foreign Currency in the applicable interbank market,
then (1) if the requested Borrowing was of Primary Advances denominated in
Dollars, such Lender’s Applicable Pro Rata Share of such Borrowing shall be made
as a Primary Prime Rate Advance of such Lender, (2) if the requested Borrowing
was of Norwegian Advances denominated in NOK, such Lender’s Applicable Pro Rata
Share of such

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Borrowing shall be made as a Norwegian Prime Rate Advance of such Lender, (3) in
any event, such Primary Prime Rate Advance or Norwegian Prime Rate Advance, as
applicable, shall be considered part of the same Borrowing and interest on such
Primary Prime Rate Advance or Norwegian Prime Rate Advance, as applicable, shall
be due and payable at the same time that interest on the Eurocurrency Rate
Advances comprising the remainder of such Borrowing shall be due and payable,
and (4) any obligation of such Lender to make, continue, or Convert to,
Eurocurrency Rate Advances in the affected currency or currencies, including in
connection with such requested Borrowing, shall be suspended until such Lender
notifies the applicable Administrative Agent and the Borrower that the
circumstances giving rise to such determination no longer exist; and (B) such
Lender agrees to use commercially reasonable efforts (consistent with its
internal policies and legal and regulatory restrictions) to designate a
different Applicable Lending Office if the making of such designation would
avoid the effect of this paragraph and would not, in the reasonable judgment of
such Lender, be otherwise disadvantageous to such Lender;

          (vi) if (A) the US Administrative Agent is unable to determine the
Eurocurrency Rate for Eurocurrency Rate Advances comprising any requested
Primary Borrowing, or (B) the Norwegian Administrative Agent is unable to
determine the Eurocurrency Rate for Eurocurrency Rate Advances comprising any
requested Norwegian Borrowing, the right of the Borrower to select Eurocurrency
Rate Advances in the affected currency or currencies for such Borrowing or for
any subsequent Borrowing shall be suspended until the applicable Administrative
Agent shall notify the Borrower and the Lenders that the circumstances causing
such suspension no longer exist, and upon receipt by the Borrower of the notice
of such suspension, the Borrower may revoke the pending request or, failing
that, each Primary Advance comprising such Borrowing shall be made as a Primary
Prime Rate Advance in the Dollar Amount of the originally requested Advance and
each Norwegian Advance comprising such Borrowing shall be made as a Norwegian
Prime Rate Advance in the NOK Amount of such originally requested Advance;

          (vii) if the Majority Lenders of the Primary Facility shall, at least
one Business Day before the date of any requested Borrowing, notify the US
Administrative Agent that (A) the Eurocurrency Rate for Eurocurrency Rate
Advances comprising such Borrowing will not adequately reflect the cost to such
Lenders of making or funding their respective Eurocurrency Rate Advances, as the
case may be, for such Borrowing, or (B) deposits are not being offered to banks
in the applicable offshore interbank market for such currency for the applicable
amount and Interest Period of such Eurocurrency Rate Advance, the right of the
Borrower to select Eurocurrency Rate Advances in the affected currency or
currencies for such Borrowing or for any subsequent Borrowing shall be suspended
until the US Administrative Agent shall notify the Borrower and the Primary
Lenders that the circumstances causing such suspension no longer exist, and upon
receipt by the Borrower of the notice of such suspension, the Borrower may
revoke the pending request or, failing that, each Advance comprising such
Borrowing shall be made as a Primary Prime Rate Advance in the Dollar Amount of
the originally requested Advance;

          (viii) if the Majority Lenders of the Norwegian Facility shall, at
least one Business Day before the date of any requested Borrowing, notify the
Norwegian Administrative Agent that (A) the Eurocurrency Rate for Eurocurrency
Rate Advances comprising such Norwegian Borrowing will not adequately reflect
the cost to such Lenders of making or funding their respective Eurocurrency Rate
Advances, as the case may be, for such Norwegian Borrowing, or (B) deposits are
not being offered to banks in the applicable offshore interbank

27

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market for such currency for the applicable amount and Interest Period of such
Eurocurrency Rate Advance, the right of the Borrower to select Eurocurrency Rate
Advances in the affected currency or currencies for such Borrowing or for any
subsequent Borrowing shall be suspended until the Norwegian Administrative Agent
shall notify the Borrower and the Norwegian Lenders that the circumstances
causing such suspension no longer exist, and upon receipt by the Borrower of the
notice of such suspension, the Borrower may revoke the pending request or,
failing that, each Advance comprising such Borrowing shall be made as a
Norwegian Prime Rate Advance in the NOK Amount of the originally requested
Advance;

          (ix) if the Borrower shall fail to select the duration or continuation
of any Interest Period for any Eurocurrency Rate Advance in accordance with the
provisions contained in the definition of “Interest Period” in Section 1.1 and
paragraph (a) or (b) above, the applicable Administrative Agent will forthwith
so notify the Borrower and the applicable Lenders and (A) if denominated in
Dollars under the Primary Facility, such affected Advances will be made
available to the Borrower on the date of such Borrowing as Primary Prime Rate
Advances or, if such affected Advances are existing Advances, will be Converted
into Primary Prime Rate Advances or at the end of Interest Period then in
effect, (B) if denominated in NOK under the Norwegian Facility, such affected
Advances will be made available to the Borrower on the date of such Borrowing as
Norwegian Prime Rate Advances or, if such affected Advances are existing
Advances, will be Converted into Norwegian Prime Rate Advances at the end of
Interest Period then in effect, (C) if denominated in a Foreign Currency under
the Primary Facility, the Borrower shall be deemed to have specified an Interest
Period of one month for such affected Advances or, if such affected Advances are
existing Advances, such affected Advances will be continued as a Eurocurrency
Rate Advance in the original Designated Currency with an Interest Period of one
month, and (D) if denominated in an Agreed Currency (other than NOK) under the
Norwegian Facility, the Borrower shall be deemed to have specified an Interest
Period of one month for such affected Advances or, if such affected Advances are
existing Advances, such affected Advances will be continued as a Eurocurrency
Rate Advance in the original Designated Currency with an Interest Period of one
month;

          (x) if the Borrower shall fail to specify a currency for any
Eurocurrency Rate Advances under the Primary Facility, then the Eurocurrency
Rate Advances as requested shall be made in Dollars;

          (xi) if the Borrower shall fail to specify a currency for any
Eurocurrency Rate Advances under the Norwegian Facility, then the Eurocurrency
Rate Advances as requested shall be made in Norwegian Krone;

          (xii) Primary Advances may only be Converted or continued as Primary
Advances;

          (xiii) Norwegian Advances may only be Converted or continued as
Norwegian Advances;

          (xiv) Swingline Advances may not be Converted or continued; and

          (xv) no Revolving Advance may be Converted or continued as a Revolving
Advance in a different currency, but instead must be prepaid in the original
Designated Currency of such Revolving Advance and reborrowed in such new
Designated Currency.

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          (d) Notices Irrevocable. Each Notice of Borrowing and Notice of
Conversion or Continuation shall be irrevocable and binding on the Borrower. In
the case of any Borrowing which the related Notice of Borrowing specifies is to
be comprised of Eurocurrency Rate Advances, the Borrower shall indemnify each
Lender against any loss, out-of-pocket cost or expense incurred by such Lender
as a result of any condition precedent for Borrowing set forth in Article III
not being satisfied for any reason, including any loss, cost or expense actually
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund the Advance to be made by such Lender as part of
such Borrowing when such Advance, as a result of such failure, is not made on
such date.

          (e) Administrative Agents Reliance. Unless the applicable
Administrative Agent shall have received notice from a Lender before the date of
any Revolving Borrowing or Mandatory Revolving Borrowing that such Lender will
not make available to the applicable Administrative Agent such Lender’s
Applicable Pro Rata Share of the Borrowing, the Administrative Agents may assume
that such Lender has made its Applicable Pro Rata Share of the Borrowing
available to the applicable Administrative Agent on the date of such Borrowing
in accordance with paragraph (a) of this Section 2.2 and the applicable
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If and to the extent that such
Lender shall not have so made its Applicable Pro Rata Share of such Borrowing
available to the applicable Administrative Agent, such Lender and the Borrower
severally agree to immediately repay to the applicable Administrative Agent on
demand such corresponding amount, together with interest on such amount, for
each day from the date such amount is made available to the Borrower until the
date such amount is repaid to the applicable Administrative Agent, at (i) in the
case of the Borrower, the interest rate applicable on such day to Advances
comprising such Borrowing and (ii) in the case of such Lender, the Overnight
Rate for such day. If such Lender shall repay to the applicable Administrative
Agent such corresponding amount and interest as provided above, such
corresponding amount so repaid shall constitute such Lender’s Advance as part of
such Borrowing for purposes of this Agreement even though not made on the same
day as the other Advances comprising such Borrowing.

          (f) Lender Obligations Several. The failure of any Lender to make the
Advance to be made by it as part of any Borrowing shall not relieve any other
Lender of its obligation, if any, to make its Advance on the date of such
Borrowing. No Lender shall be responsible for the failure of any other Lender to
make the Advance to be made by such other Lender on the date of any Borrowing.

          (g) Evidence of Obligations.

          (i) The Advances and Letters of Credit made by each Lender shall be
evidenced by one or more accounts or records maintained by such Lender and by
the applicable Administrative Agent with respect to the applicable Facility in
the ordinary course of business. The accounts or records maintained by
Administrative Agents and the applicable Lenders shall be conclusive absent
manifest error of the amount of the Advances and Letters of Credit made by such
Lenders to the Borrower and the interest and payments thereon. Any failure to so
record or any error in doing so shall not, however, limit or otherwise affect
the obligation of the Borrower hereunder to pay any amount owing with respect to
the Obligations. In the event of any conflict between the accounts and records
maintained by any Lender and the accounts and records of the applicable
Administrative Agent in respect of such matters, the accounts and records of the
applicable Administrative Agent shall control in the absence of manifest error.
Upon the request of any Lender to the Borrower made through the applicable
Administrative Agent, the Borrower shall execute and deliver to such Lender
(through the applicable Administrative Agent) the applicable Note or Notes which
shall evidence such Lender’s Advances to the Borrower in addition to such
accounts or records. Each Lender may attach schedules to such Notes and

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endorse thereon the date, Type (if applicable), amount, currency and maturity of
its Advances and payments with respect thereto.

          (ii) In addition to the accounts and records referred to in subsection
(i) above, each Lender and each Administrative Agent shall maintain in
accordance with its usual practice accounts or records evidencing the purchases
and sales by such Lender of participations in Letters of Credit and Swingline
Advances. In the event of any conflict between the accounts and records
maintained by the applicable Administrative Agent and the accounts and records
of any Lender in respect of such matters, the accounts and records of the
applicable Administrative Agent shall control in the absence of manifest error.

       Section 2.3 Fees.

          (a) Facility Fees. The Borrower agrees to pay to the US Administrative
Agent for the account of each Primary Lender and to the Norwegian Administrative
Agent for the account of each Norwegian Lender, a daily facility fee on the
amount of such Lender’s Primary Commitment and such Lender’s Norwegian
Commitment, if applicable, at a per annum rate equal to the Applicable Margin
for facility fees for the period from the Closing Date until the Maturity Date,
such fees due and payable quarterly in arrears on the tenth (10th) day after the
end of each March, June, September and December, commencing September 30, 2005,
and on the Maturity Date.

          (b) Utilization Fees. Borrower agrees to pay to the US Administrative
Agent for the account of each Lender a daily utilization fee (the “Utilization
Fee”) on the Dollar Amount of the sum of such Lender’s outstanding Revolving
Advances and Applicable Pro Rata Share of the Letter of Credit Exposure at a per
annum rate equal to the Applicable Margin for Utilization Fees, from the Closing
Date until the Maturity Date, such fees due and payable quarterly in arrears on
the tenth (10th) day after the last Business Day of each March, June, September
and December, commencing September 30, 2005, and on the Maturity Date; provided
that the Utilization Fee shall be payable only in respect of each day that the
Dollar Amount of the sum of (A) aggregate outstanding Revolving Advances and
(B) aggregate Letter of Credit Exposure, exceeds 50% of the aggregate Revolving
Commitments. For purposes of calculating such Utilization Fee, outstandings for
Eurocurrency Rate Advances denominated in Foreign Currencies and Letter of
Credit Exposure for Letters of Credit denominated in Foreign Currencies shall be
converted to their Dollar Amounts on each date that such Utilization Fee is due
hereunder using the then effective Exchange Rate. For purposes of computation of
the above fees, within 5 days of the quarter then ended, the Norwegian
Administrative Agent shall deliver to the U.S. Administrative Agent a daily log
of outstanding amounts in Dollars under the Norwegian Commitment for the
preceding quarter.

          (c) Letter of Credit Fees. The Borrower agrees to pay to the US
Administrative Agent for the pro rata benefit of the Primary Lenders issuance
fees in respect of all Primary Letters of Credit outstanding at a rate per annum
equal to the Applicable Margin for Eurocurrency Rate Advances calculated on the
maximum amount available from time to time to be drawn under such outstanding
Letters of Credit. The Borrower also agrees to pay to the Norwegian
Administrative Agent for the pro rata benefit of the Norwegian Lenders issuance
fees in respect of all Norwegian Letters of Credit outstanding at a rate per
annum equal to the Applicable Margin for Eurocurrency Rate Advances calculated
on the maximum amount available from time to time to be drawn under such
outstanding Letters of Credit. All such issuance fees shall be due and payable
quarterly in arrears on the last Business Day of each March, June, September and
December, commencing September 30, 2005, and on the Maturity Date. In addition,
the Borrower agrees to pay to each Issuing Lender for its own account fronting
fees in respect of all Letters of Credit outstanding and issued by such Issuing
Lender equal to the greater of (i) one-eighth percent (1/8%) per annum of the
maximum amount available from time to time

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to be drawn under such outstanding Letters of Credit and (ii) $500, payable at
issuance and on the earlier of each annual anniversary thereafter or the
Maturity Date. The Borrower shall also pay to each Issuing Lender for its own
account such documentary, processing and other charges in connection with the
issuance, amendment, transfer, modification of and draws under Letters of Credit
assessed or incurred by such Issuing Lender from time to time. For purposes of
calculating the issuance fees, fronting fees and other fees under this
Section 2.3(c), the face amount of each Letter of Credit made in a Foreign
Currency shall be at any time the Dollar Amount of such Letter of Credit as
determined on the most recent Computation Date with respect to such Letter of
Credit.

          (d) Administrative Agent Fees. The Borrower agrees to pay when due to
the applicable Administrative Agent for its benefit the fees set forth in the
Agent’s Fee Letters.

       Section 2.4 Reduction and Reallocation of Commitments.

          (a) Reduction of Commitments. The Borrower shall have the right, upon
at least three Business Days’ irrevocable notice to the Administrative Agents
and the Lenders, to terminate in whole or reduce ratably in part the unused
portion of the Primary Commitments and the Norwegian Commitments; provided that,
each partial reduction shall be in the aggregate amount of $3,000,000 or an
integral multiple of $1,000,000 in excess thereof. Any reduction or termination
of the Primary Commitments and Norwegian Commitments pursuant to this
Section 2.4 shall be permanent, with no obligation of the Lenders to reinstate
such Primary Commitments or Norwegian Commitments and the commitment fees
provided for in Section 2.3(a) shall thereafter be computed on the basis of the
Revolving Commitments, as so reduced.

          (b) Reallocation of Commitments. Any Lender may agree with the
Borrower to reallocate its existing Primary Commitment or Norwegian Commitment,
so long as the sum of such Primary Commitment and Norwegian Commitment remains
unchanged. In addition, with the prior written consent of all of the Multiple
Lenders, any Primary Lender may agree with the Borrower to convert a portion of
its Primary Commitment into a Norwegian Commitment, thereby becoming a Multiple
Lender, and any Norwegian Lender may agree with the Borrower to convert a
portion of its Norwegian Commitment into a Primary Commitment, thereby becoming
a Multiple Lender, in each case so long as (i) each Lender continues to be a
Primary Lender with a Primary Commitment of at least $1,000,000, (ii) the sum of
such Lender’s Primary Commitment and Norwegian Commitment remains equal to the
aggregate amount of such Lender’s Primary Commitment and Norwegian Commitment,
as the case may be, prior to such reallocation and (iii) the aggregate amount of
all Norwegian Commitments, after giving effect to any reallocation, shall not
exceed $100,000,000. The Borrower shall give written notice to the
Administrative Agents of any reallocation pursuant to this provision at least
ten (10) Business Days prior to the effective date of any such reallocation. No
applicable Lender affected by such reallocation shall be required to agree to
any such reallocation, but may do so at its option, in its sole discretion. The
following conditions precedent must be satisfied prior to any such reallocation
becoming effective:

          (i) no Default or Event of Default shall have occurred and be
continuing;

          (ii) if, as a result of any such reallocation, the aggregate Primary
Outstandings would exceed the aggregate of Primary Commitments, then the
Borrower shall, on the effective date of such reallocation, repay or prepay
Primary Advances and Swingline Advances, deposit cash in the applicable Cash
Collateral Account, or cause to be issued an irrevocable standby letter of
credit in favor of the applicable Issuing Lender and issued by a bank or other
financial institution acceptable to such Issuing Lender and the US
Administrative Agent,

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in an aggregate principal amount, such that, after giving effect thereto, the
aggregate Primary Outstandings shall not exceed the aggregate of all of the
Primary Commitments;

          (iii) if, as a result of any such reallocation, the aggregate
Norwegian Outstandings would exceed the aggregate of Norwegian Commitments, then
the Borrower shall, on the effective date of such reallocation, repay or prepay
Norwegian Advances, deposit cash in the applicable Cash Collateral Account, or
cause to be issued an irrevocable standby letter of credit in favor of the
Norwegian Issuing Lender and issued by a bank or other financial institution
acceptable to the Norwegian Issuing Lender and the Norwegian Administrative
Agent, in an aggregate principal amount, such that, after giving effect thereto,
the aggregate Norwegian Outstandings shall not exceed the aggregate of all of
the Norwegian Commitments;

          (iv) Borrowers shall have paid any amounts (or deposited cash in the
applicable Cash Collateral Account, or caused to be issued an irrevocable
standby letter of credit in favor of the applicable Issuing Lender and issued by
a bank or other financial institution acceptable to such Issuing Lender and the
applicable Administrative Agent) due under Section 2.17 hereof on the date of
such reallocation; and

          (v) Participations by the Lenders in the outstanding Letters of Credit
and the Letter of Credit Obligations and the outstanding Advances of the Lenders
shall be adjusted to give effect to such reallocation.

      Section 2.5 Repayment of Advances.

          (a) Revolving Advances. The Borrower shall repay the outstanding
principal amount of each Revolving Advance on the Maturity Date and in the
Designated Currency in which each such Advance was funded.

          (b) Swingline Advances. The Borrower shall repay the outstanding
principal amount of each Swingline Advance on the earlier of (i) the Swingline
Due Date immediately following the date such Swingline Advance is made by the
applicable Swingline Lender and (ii) the Maturity Date.

        Section 2.6 Interest. The Borrower shall pay interest on the unpaid
principal amount of each Advance from the date of such Advance until such
principal amount shall be paid in full, at the following rates per annum:

          (a) Primary Prime Rate Advances. If such Advance is a Primary Prime
Rate Advance, a rate per annum equal at all times to the lesser of (i) the
Adjusted Primary Prime Rate in effect from time to time plus the Applicable
Margin and (ii) the Maximum Rate, payable in arrears on the last Business Day of
each calendar quarter, commencing with the calendar quarter ending September 30,
2005, and on the date such Primary Prime Rate Advance shall be paid in full,
provided that if any payment of principal on any Advance is not made when due,
such Advances shall bear interest from the date such payment was due until such
Advances are paid in full, payable on demand, at a rate per annum equal at all
times to the lesser of (A) the rate required to be paid on such Advance
immediately prior to the date on which such amount becomes due plus two percent
(2%) and (B) the Maximum Rate.

          (b) Norwegian Prime Rate Advances. If such Advance is a Norwegian
Prime Rate Advance, a rate per annum equal at all times to the lesser of (i) the
Norwegian Prime Rate in effect from time to time plus the Applicable Margin and
(ii) the Maximum Rate, payable in arrears on the last Business Day of each
calendar quarter, commencing with the calendar quarter ending September 30,

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2005, and on the date such Norwegian Prime Rate Advance shall be paid in full,
provided that if any payment of principal on any Advance is not made when due,
such Advances shall bear interest from the date such payment was due until such
Advances are paid in full, payable on demand, at a rate per annum equal at all
times to the lesser of (A) the rate required to be paid on such Advance
immediately prior to the date on which such amount becomes due plus two percent
(2%) and (B) the Maximum Rate.

          (c) Eurocurrency Rate Advances. If such Advance is a Eurocurrency Rate
Advance, a rate per annum equal at all times during the Interest Period for such
Advance to the lesser of (i) the Eurocurrency Rate for such Interest Period plus
the Applicable Margin and (ii) the Maximum Rate, payable in arrears on the last
day of such Interest Period, and on the date such Eurocurrency Rate Advance
shall be paid in full; provided that if any payment of principal on any Advance
is not made when due, such Advances shall bear interest from the date such
payment was due until such Advances are paid in full, payable on demand, at a
rate per annum equal at all times to the lesser of (A) the greater of (1) the
Adjusted Primary Prime Rate in effect from time to time plus two percent (2%)
and (2) the rate required to be paid on such Advance immediately prior to the
date on which such amount became due plus two percent (2%) and (B) the Maximum
Rate.

          (d) Swingline Advances. If such Advance is a Swingline Advance, a rate
per annum equal at all times to the lesser of (i) the Swingline Rate for such
Swingline Advance and (ii) the Maximum Rate, payable quarterly in arrears on the
last Business Day of each calendar quarter, commencing with the calendar quarter
ending September 30, 2005, and on the Maturity Date; provided that if any
payment of principal on any Advance is not made when due, such Advances shall
bear interest from the date such payment was due until such Advances are paid in
full, at a rate per annum equal at all times to the lesser of (A) the rate
required to be paid on such Advance immediately prior to the date on which such
amount becomes due plus two percent (2%) and (B) the Maximum Rate.

          (e) Usury Recapture. In the event the rate of interest chargeable
under this Agreement or the Notes at any time is greater than the Maximum Rate,
the unpaid principal amount of the Obligations shall bear interest at the
Maximum Rate until the total amount of interest paid or accrued on the
Obligations equals the amount of interest which would have been paid or accrued
on the Obligations if the stated rates of interest set forth in this Agreement
had at all times been in effect. In the event, upon payment in full of the
Obligations, the total amount of interest paid or accrued under the terms of
this Agreement and the Notes is less than the total amount of interest which
would have been paid or accrued if the rates of interest set forth in this
Agreement had, at all times, been in effect, then the Borrower shall, to the
extent permitted by applicable Legal Requirements, pay the applicable
Administrative Agent for the account of the applicable Lenders an amount equal
to the difference between (i) the lesser of (A) the amount of interest which
would have been charged on the Obligations if the Maximum Rate had, at all
times, been in effect and (B) the amount of interest which would have accrued on
the Obligations if the rates of interest set forth in this Agreement had at all
times been in effect and (ii) the amount of interest actually paid or accrued
under this Agreement on the Obligations. In the event the Lenders ever receive,
collect or apply as interest any sum in excess of the Maximum Rate, such excess
amount shall, to the extent permitted by law, be applied to the reduction of the
principal balance of the Obligations, and if no such principal is then
outstanding, such excess or part thereof remaining shall be paid to the
Borrower.

          (f) Other Amounts Overdue. If any amount payable under this Agreement
other than the Advances is not paid when due and payable, including accrued
interest and fees, then such overdue amount shall accrue interest hereon due and
payable on demand at a rate per annum equal to the lesser of (i) Adjusted
Primary Prime Rate plus two percent (2%) and (ii) the Maximum Rate, from the
date such amount became due until the date such amount is paid in full.

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     Section 2.7 Prepayments.

          (a) Right to Prepay. The Borrower shall have no right to prepay any
principal amount of any Advance except as provided in this Section 2.7.

          (b) Optional Prepayments. The Borrower may elect to prepay any of the
Advances, after giving notice thereof to the applicable Administrative Agent and
the Lenders by 12:00 p.m. (Houston, Texas time or Oslo, Norway time, as
applicable) (i) on the day of prepayment of any Swingline Advance, (ii) at least
three Business Days’ prior to the day of prepayment of any Eurocurrency Rate
Advances and (iii) on the day of prepayment of any Primary Prime Rate Advance or
Norwegian Primary Rate Advance. Such notice shall be by telephone or telecopier,
and if by telephone, confirmed promptly in writing, and must state the proposed
date and aggregate principal amount of such prepayment, whether such prepayment
should be applied to reduce outstanding Revolving Advances or Swingline
Advances, and if applicable, the relevant Interest Period for the Advances to be
prepaid. If any such notice is given, the Borrower shall prepay Advances
comprising part of the same Borrowing in whole or ratably in part in an
aggregate principal amount equal to the amount specified in such notice, and
shall also pay accrued interest to the date of such prepayment on the principal
amount prepaid and amounts, if any, required to be paid pursuant to Section 2.8
as a result of such prepayment being made on such date; provided, however, that
(i) each partial prepayment of Eurocurrency Rate Advances shall be in an
aggregate principal amount of not less than $3,000,000 and in integral multiples
of $1,000,000 in excess thereof, (ii) each partial prepayment of Primary Prime
Rate Advances shall be in an aggregate principal amount of not less than
$500,000 and in integral multiples of $100,000 in excess thereof, (iii) each
partial prepayment of Norwegian Advances shall be in an aggregate principal
amount of not less than $3,000,000 and in integral multiples of $1,000,000 in
excess thereof, and (iv) any prepayment of a Revolving Advance shall be made in
the Designated Currency in which such Revolving Advance was funded. Each
prepayment pursuant to this Section 2.7(b) shall be accompanied by accrued
interest on the amount prepaid to the date of such prepayment and amounts, if
any, required to be paid pursuant to Section 2.8 as a result of such prepayment
being made on such date.

          (c) Ratable Payments. Each payment of any Advance pursuant to this
Section 2.7 or any other provision of this Agreement shall be made in a manner
such that all Advances comprising part of the same Borrowing are paid in whole
or ratably in part.

          (d) Effect of Notice. All notices given pursuant to this Section 2.7
shall be irrevocable and binding upon the Borrower.

     Section 2.8 Breakage Costs. If (a) any payment of principal of any
Eurocurrency Rate Advance is made other than on the last day of the Interest
Period for such Advance as a result of any payment pursuant to Section 2.7 or
the acceleration of the maturity of the Obligations pursuant to Article VIII or
otherwise; (b) any Conversion of a Eurocurrency Rate Advance is made other than
on the last day of the Interest Period for such Advance pursuant to
Section 2.2(b) or otherwise; or (c) the Borrower fails to make a principal or
interest payment with respect to any Eurocurrency Rate Advance on the date such
payment is due and payable, the Borrower shall, within 10 days of any written
demand sent by any Lender to the Borrower (with a copy to the applicable
Administrative Agent), pay to the applicable Administrative Agent for the
account of such Lender any amounts (without duplication of any other amounts
payable in respect of breakage costs) required to compensate such Lender for any
additional losses, out-of-pocket costs or expenses which it may reasonably incur
as a result of such payment or nonpayment, including any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by any Lender to fund or
maintain such Advance.

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     Section 2.9 Increased Costs.

          (a) Eurocurrency Rate Advances. If, due to either (i) the introduction
of or any change (other than any change by way of imposition or increase of
reserve requirements included in the calculation of the Eurocurrency Rate) in or
in the interpretation of any Legal Requirement or (ii) the compliance with any
guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law), there shall be any increase in the
cost to any Lender of agreeing to make or making, funding or maintaining
Eurocurrency Rate Advances, then the Borrower shall from time to time, upon
demand by such Lender (with a copy of such demand to the applicable
Administrative Agent), promptly pay to the applicable Administrative Agent for
the account of such Lender additional amounts (without duplication of any other
amounts payable in respect of increased costs) sufficient to compensate such
Lender for such increased cost; provided, however, that, before making any such
demand, each Lender agrees to use commercially reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions) to designate a
different Applicable Lending Office if the making of such a designation would
avoid the need for, or reduce the amount of, such increased cost and would not,
in the reasonable judgment of such Lender, be otherwise disadvantageous to such
Lender. A certificate as to the amount of such increased cost and detailing the
calculation of such cost submitted to the Borrower and the applicable
Administrative Agent by such Lender at the time such Lender demands payment
under this Section shall be conclusive and binding for all purposes, absent
manifest error.

          (b) Capital Adequacy. If any Lender or Issuing Lender determines in
good faith that compliance with any Legal Requirement or any guideline or
request from any central bank or other Governmental Authority (whether or not
having the force of law) implemented or effective after the date of this
Agreement affects or would affect the amount of capital required or expected to
be maintained by such Lender or Issuing Lender and that the amount of such
capital is increased by or based upon the existence of such Lender’s commitment
to lend or Issuing Lender’s commitment to issue Letters of Credit or any
Lender’s commitment to risk participate in Letters of Credit and other
commitments of this type, then, upon 30 days prior written notice by such Lender
or Issuing Lender (with a copy of any such demand to the applicable
Administrative Agent), the Borrower shall promptly pay to the applicable
Administrative Agent for the account of such Lender or to Issuing Lender, as the
case may be, from time to time as specified by such Lender or Issuing Lender,
additional amounts (without duplication of any other amounts payable in respect
of increased costs) sufficient to compensate such Lender or Issuing Lender, in
light of such circumstances, (i) with respect to such Lender, to the extent that
such Lender reasonably determines such increase in capital to be allocable to
the existence of such Lender’s commitment to lend under this Agreement or its
commitment to risk participate in Letters of Credit and (ii) with respect to
such Issuing Lender, to the extent that such Issuing Lender reasonably
determines such increase in capital to be allocable to the issuance or
maintenance of the Letters of Credit. A certificate as to such amounts and
detailing the calculation of such amounts submitted to the Borrower by such
Lender or Issuing Lender shall be conclusive and binding for all purposes,
absent manifest error.

          (c) Letters of Credit. If any change in any Legal Requirement or in
the interpretation thereof by any court or administrative or Governmental
Authority charged with the administration thereof shall either (i) impose,
modify, or deem applicable any reserve, special deposit, or similar requirement
against letters of credit issued by, or assets held by, or deposits in or for
the account of, any Issuing Lender or any Lender or (ii) impose on any Issuing
Lender or any Lender any other condition regarding the provisions of this
Agreement relating to the Letters of Credit or any Letter of Credit Obligations,
and the result of any event referred to in the preceding clause (i) or
(ii) shall be to increase the cost to any Issuing Lender of issuing or
maintaining any Letter of Credit, or increase the cost to such Lender of its
risk participation in any Letter of Credit (which increase in cost shall be
determined by such Issuing Lender’s or such Lender’s reasonable allocation of
the aggregate of such cost increases resulting from

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such event), then, upon demand by such Issuing Lender or such Lender (with a
copy sent to the applicable Administrative Agent), as the case may be, the
Borrower shall pay to the applicable Administrative Agent (for the account of
such Issuing Lender), as the case may be, from time to time as specified by such
Issuing Lender or such Lender, additional amounts which shall be sufficient to
compensate such Issuing Lender or such Lender for such increased cost. Each
Issuing Lender and each Lender agrees to use commercially reasonable efforts
(consistent with internal policy and legal and regulatory restrictions) to
designate a different Applicable Lending Office for the booking of its Letters
of Credit or risk participations if the making of such designation would avoid
the effect of this paragraph and would not, in the reasonable judgment of such
Issuing Lender or such Lender, be otherwise disadvantageous to such Issuing
Lender or such Lender, as the case may be. A certificate as to such increased
cost incurred by such Issuing Lender or such Lender, as the case may be, as a
result of any event mentioned in clause (i) or (ii) above, and detailing the
calculation of such increased costs submitted by such Issuing Lender or such
Lender to the Borrower, shall be conclusive and binding for all purposes, absent
manifest error.

          (d) Additional Interest on Eurocurrency Rate Advances under the
Norwegian Facility. Without duplication of Section 2.9(a) hereof, if by reason
of: (i) changes in any existing law, rule or regulation, or (ii) the adoption of
any new law, rule or regulation, or (iii) any change in the interpretation or
administration of (i) or (ii) above by any Governmental Authority, or
(iv) compliance with any directive or request from any Governmental Authority
(whether or not having the force of law):

          (i) a Norwegian Lender incurs a cost as a result of it having entered
into this Agreement and/or performing its obligations hereunder; or

          (ii) there is an increase in the cost to a Norwegian Lender of
maintaining or funding Eurocurrency Rate Advances under the Norwegian Facility;
or

          (iii) a Norwegian Lender becomes liable for any new taxes (other than
on net income) calculated by reference to any Eurocurrency Rate Advance under
the Norwegian Facility; or

          (iv) a Norwegian Lender becomes subject to any new or modified capital
adequacy or similar requirements which will have the effect of increasing the
amount of capital required or expected to be maintained by such Norwegian Lender
based on such Norwegian Lender’s obligations hereunder; or

          (v) a Norwegian Lender’s effective return hereunder is reduced in any
other manner;

then any such cost, liability or reduction of return as referred to in the
preceding paragraphs (i)-(v) shall be payable by the Borrower upon request by
such Norwegian Lender either in the form of an increased margin or in the form
of an indemnification. Such Norwegian Lender shall give the Borrower notice
within a reasonable time of its intention to claim compensation under this
Section and it shall specify the form and amount of such compensation. Such
Norwegian Lender’s determination of the amount of compensation to be made under
this Section shall, absent manifest error, be conclusive. The Borrower shall be
entitled to prepay the Borrowings consisting of such Eurocurrency Rate Advances
in accordance with the terms of the Agreement. In such event the Borrower shall
nevertheless compensate such Norwegian Lender for such requested indemnification
for the period up to and including the date of prepayment. In the event that it
shall be unlawful for a Norwegian Lender to make available or maintain
Eurocurrency Rate Advances under the Norwegian Facility in any Foreign Currency,
then such Norwegian Lender’s obligations to lend in such Foreign Currency shall
terminate and all amounts owing

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by the Borrower to such Norwegian Lender in such Foreign Currency shall become
due and payable on demand, in each case to the extent necessary to not violate
any law.

     Section 2.10 Payments and Computations.

          (a) Payment Procedures. Except if otherwise set forth herein, (i) the
Borrower shall make each payment under this Agreement in connection with the
Primary Facility not later than 1:00 p.m. (Houston, Texas time) on the day when
due in the Designated Currency as to outstanding Advances and Reimbursement
Obligations, and in Dollars as to all other amounts, to the US Administrative
Agent at its Applicable Lending Office (or such other location as the US
Administrative Agent shall designate in writing to the Borrower) in same day
funds, and (ii) the Borrower shall make each payment under this Agreement in
connection with the Norwegian Facility not later than 1:00 p.m. (Oslo, Norway
time) on the day when due in the Designated Currency as to outstanding Advances
and Reimbursement Obligations, and in Dollars as to all other amounts, to the
Norwegian Administrative Agent at its Applicable Lending Office (or such other
location as the Norwegian Administrative Agent shall designate in writing to the
Borrower) in same day funds. The Administrative Agents will promptly thereafter
cause to be distributed like funds relating to the payment of principal,
interest or fees ratably (other than amounts payable solely to the applicable
Administrative Agent, the Issuing Lenders, or a specific Lender pursuant to
Section 2.1(c), 2.3(c), 2.3(d), 2.6(e), 2.6(f), 2.8, 2.9, 2.11, 2.12, or 2.13(e)
but after taking into account payments effected pursuant to Section 9.4) to the
Lenders in accordance with each Lender’s Applicable Pro Rata Share for the
account of their respective Applicable Lending Offices, and like funds relating
to the payment of any other amount payable to any Lender or any Issuing Lender
to such Lender or such Issuing Lender for the account of its Applicable Lending
Office, in each case to be applied in accordance with the terms of this
Agreement.

          (b) Computations. All computations of interest based on the Adjusted
Primary Prime Rate and Norwegian Prime Rate shall be made by the applicable
Administrative Agent on the basis of a year of 365 or 366 days, as the case may
be, and all computations of fees and interest based on the Eurocurrency Rate,
Overnight Rate and the Federal Funds Rate shall be made by the applicable
Administrative Agent on the basis of a year of 360 days, in each case for the
actual number of days (including the first day, but excluding the last day)
occurring in the period for which such interest or fees are payable. Each
determination by the applicable Administrative Agent of an interest rate shall
be conclusive and binding for all purposes, absent manifest error.

          (c) Non-Business Day Payments. Whenever any payment shall be stated to
be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or fees, as the case may be;
provided, however, that if such extension would cause payment of interest on or
principal of Eurocurrency Rate Advances to be made in the next following
calendar month, such payment shall be made on the next preceding Business Day.

          (d) Administrative Agents Reliance. Unless the applicable
Administrative Agent shall have received written notice from the Borrower prior
to the date on which any payment is due to the Lenders that the Borrower will
not make such payment in full, the applicable Administrative Agent may assume
that the Borrower has made such payment in full to the applicable Administrative
Agent on such date and the applicable Administrative Agent may, in reliance upon
such assumption, cause to be distributed to each Lender on such date an amount
equal to the amount then due such Lender. If and to the extent the Borrower
shall not have so made such payment in full to the applicable Administrative
Agent, each Lender shall repay to the applicable Administrative Agent forthwith
on demand such amount distributed to such Lender, together with interest, for
each day from the date such amount is distributed to

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such Lender until the date such Lender repays such amount to the applicable
Administrative Agent, at the Overnight Rate for such day.

          (e) Application of Payments. Whenever any payment received by the
applicable Administrative Agent under this Agreement is insufficient to pay in
full all amounts then due and payable under this Agreement and Notes, such
payment shall be distributed and applied by the applicable Administrative Agent
and the Lenders in the following order: first, to the payment of fees and
expenses due and payable to the Administrative Agents under and in connection
with this Agreement or any other Credit Document; second, to the payment of all
expenses due and payable under Section 2.11(c), ratably among the Lenders in
accordance with the aggregate amount of such payments owed to each such Lender;
third, to the payment of fees due and payable pursuant to Section 2.3(c),
ratably among the Issuing Lenders in accordance with the aggregate amount of
such payments owed to each such Issuing Lender; fourth, to the payment of all
other fees due and payable under Section 2.3 ratably among the Lenders in
accordance with their applicable Revolving Commitments; and fifth, to the
payment of the interest accrued on and the principal amount of all of the
Advances, and the interest accrued on and the principal amount of all
Reimbursement Obligations, regardless of whether any such amount is then due and
payable, ratably among the Lenders in accordance with the aggregate accrued
interest plus the aggregate principal amount owed to such Lender.

     Section 2.11 Taxes.

          (a) No Deduction for Certain Taxes. Any and all payments by the
Borrower shall be made, in accordance with Section 2.10, free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender, each Issuing Lender, and each
Administrative Agent, taxes imposed on its income, and franchise taxes imposed
on it, by the jurisdiction under the laws of which such Lender, such Issuing
Lender, or such Administrative Agent (as the case may be) is organized or any
political subdivision of the jurisdiction (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to as “Taxes”) and, in the case of each Lender and each Issuing Lender,
Taxes by the jurisdiction of such Lender’s Applicable Lending Office or any
political subdivision of such jurisdiction. If the Borrower shall be required by
law to deduct any Taxes from or in respect of any sum payable to any Lender, any
Issuing Lender, or any Administrative Agent, (i) the sum payable shall be
increased as may be necessary so that, after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.11), such Lender, such Issuing Lender, or such Administrative Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made; provided, however, that if the Borrower’s obligation
to deduct or withhold Taxes is caused solely by such Lender’s, such Issuing
Lender’s, or such Administrative Agent’s failure to provide the forms described
in paragraph (e) of this Section 2.11 and such Lender, such Issuing Lender, or
such Administrative Agent could have provided such forms, no such increase shall
be required; (ii) the Borrower shall make such deductions; and (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable Legal Requirements.

          (b) Other Taxes. In addition, the Borrower agrees to pay any present
or future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies which arise from any payment made or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or the other Credit Documents (hereinafter referred to as “Other
Taxes”).

          (c) Indemnification. The Borrower indemnifies each Lender, each
Issuing Lender, and each Administrative Agent for the full amount of Taxes or
Other Taxes (including any Taxes or Other

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Taxes imposed by any jurisdiction on amounts payable under this Section 2.11)
paid by such Lender, such Issuing Lender, or such Administrative Agent (as the
case may be) and any liability (including interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. Each payment required to be made by the Borrower
in respect of this indemnification shall be made to the applicable
Administrative Agent for the benefit of any party claiming such indemnification
within 30 days from the date the Borrower receives written demand detailing the
calculation of such amounts therefor from the applicable Administrative Agent,
any such Issuing Lender, or any such Lender (with a copy of such demand to the
applicable Administrative Agent).

          (d) Evidence of Tax Payments. The Borrower will pay prior to
delinquency all Taxes payable in respect of any payment. Within 30 days after
the date of any payment of Taxes, the Borrower will furnish to the applicable
Administrative Agent, at its address referred to in Section 9.2, the original or
a certified copy of a receipt evidencing payment of such Taxes.

          (e) Status of Lenders.

        (i) Each Norwegian Lender is a resident of Norway for purposes of the
Norwegian Act relating to Taxation on Property and Income of 26th March 1999
No. 14.

        (ii) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Borrower is resident for tax purposes, or any treaty to which such jurisdiction
is a party, with respect to payments hereunder or under any other Credit
Document shall deliver to the Borrower (with a copy to the applicable
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower or the applicable Administrative Agent,
such properly completed and executed documentation prescribed by applicable law
as will permit such payments to be made without withholding or at a reduced rate
of withholding. In addition, any Lender, if requested by the Borrower or
applicable Administrative Agent, shall deliver such other documentation
prescribed by applicable law or reasonably requested by the Borrower or the
applicable Administrative Agent as will enable the Borrower or the applicable
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements.

        (iii) Without limiting the generality of the foregoing, in the event
that the Borrower is resident for tax purposes in the United States, any Foreign
Lender shall deliver to Borrower and the applicable Administrative Agent (in
such number of copies as shall be requested by the recipient) on or prior to the
date on which such Foreign Lender becomes a Lender under this Agreement (and
from time to time thereafter upon the request of the Borrower or the applicable
Administrative Agent, but only if such Foreign Lender is legally entitled to do
so), whichever of the following is applicable:

(A) duly completed copies of Internal Revenue Service Form W-8BEN claiming
eligibility for benefits of an income tax treaty to which the United States is a
party,

(B) duly completed copies of Internal Revenue Service Form W-8ECI,

(C) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Code, (x) a certificate to the
effect that such Foreign Lender is not (A) a “bank” within the meaning of
section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the
applicable Borrower within the meaning of section 881(c)(3)(B) of the Code, or
(C) a “controlled foreign corporation” described in

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section 881(c)(3)(C) of the Code and (y) duly completed copies of Internal
Revenue Service Form W-8BEN, or

(D) any other form prescribed by applicable law as a basis for claiming
exemption from or a reduction in United States Federal withholding tax duly
completed together with such supplementary documentation as may be prescribed by
applicable law to permit the Company to determine the withholding or deduction
required to be made.

        (iv) Without limiting the obligations of the Lenders set forth above
regarding delivery of certain forms and documents to establish each Lender’s
status for U.S. withholding tax purposes, each Lender agrees promptly to deliver
to the applicable Administrative Agent or the Borrower, as the applicable
Administrative Agent or the Borrower shall reasonably request, on or prior to
the Closing Date, and in a timely fashion thereafter, such other documents and
forms required by any relevant taxing authorities under the Legal Requirements
of any other jurisdiction, duly executed and completed by such Lender, as are
required under such Legal Requirements to confirm such Lender’s entitlement to
any available exemption from, or reduction of, applicable withholding taxes in
respect of all payments to be made to such Lender outside of the United States
by the Borrower pursuant to this Agreement or otherwise to establish such
Lender’s status for withholding tax purposes in such other jurisdiction. Each
Lender shall promptly notify the applicable Administrative Agent of any change
in circumstances which would modify or render invalid any such claimed exemption
or reduction. Additionally, the Borrower shall promptly deliver to the
applicable Administrative Agent or any Lender, as the applicable Administrative
Agent or such Lender shall reasonably request, on or prior to the Closing Date,
and in a timely fashion thereafter, such documents and forms required by any
relevant taxing authorities under the Legal Requirements of any jurisdiction,
duly executed and completed by the Borrower, as are required to be furnished by
such Lender or the applicable Administrative Agent under such Legal Requirements
in connection with any payment by the applicable Administrative Agent or any
Lender of Taxes or Other Taxes, or otherwise in connection with the Credit
Documents, with respect to such jurisdiction.

          (f) Treatment of Certain Refunds. If an Administrative Agent, a Lender
or an Issuing Lender determines, in its sole discretion, that it has received a
refund of any Taxes or Other Taxes as to which it has been indemnified by the
Borrower or with respect to which the Borrower has paid additional amounts
pursuant to this Section, it shall pay to the Borrower an amount equal to such
refund (but only to the extent of indemnity payments made, or additional amounts
paid, by the Borrower under this Section with respect to the Taxes or Other
Taxes giving rise to such refund), net of all out-of-pocket expenses of such
Administrative Agent, such Lender or such Issuing Lender, as the case may be,
and without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund), provided that the Borrower, upon the
request of such Administrative Agent, such Lender or such Issuing Lender, agrees
to repay the amount paid over to the Borrower (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to such
Administrative Agent, such Lender or such Issuing Lender in the event such
Administrative Agent, such Lender or such Issuing Lender is required to repay
such refund to such Governmental Authority. This paragraph shall not be
construed to require any Administrative Agent, any Lender or any Issuing Lender
to make available its tax returns (or any other information relating to its
taxes that it deems confidential) to the Borrower or any other Person.

          (g) Mitigation. Each Lender agrees to use commercially reasonable
efforts (consistent with its internal policies and legal and regulatory
restrictions) to select a jurisdiction for its Applicable Lending Office or
change the jurisdiction of its Applicable Lending Office, as the case may be, so
as to avoid the imposition of any Taxes or Other Taxes or to eliminate or reduce
the payment of

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any additional sums under this Section 2.11; provided, that no such selection or
change of jurisdiction for its Applicable Lending Office shall be made if, in
the reasonable judgment of such Lender, such selection or change would be
disadvantageous to such Lender.

     Section 2.12 Illegality. If any Lender shall notify the applicable
Administrative Agent and the Borrower that the introduction of or any change in
or in the interpretation of any Legal Requirement makes it unlawful, or that any
central bank or other Governmental Authority asserts that it is unlawful for
such Lender or its Applicable Lending Office to perform its obligations under
this Agreement to maintain any Eurocurrency Rate Advances of such Lender then
outstanding hereunder or any Governmental Authority has imposed material
restrictions on the authority of such Lender to purchase or sell, or take
deposits of, Dollars or any Foreign Currency in the applicable interbank market,
then, notwithstanding anything herein to the contrary, the Borrower shall, if
demanded by such Lender in its notice, no later than 12:00 p.m. (Houston, Texas
time or Oslo, Norway time, as applicable), (a) if not prohibited by any Legal
Requirement to maintain such Eurocurrency Rate Advances for the duration of the
Interest Period, on the last day of the Interest Period for each outstanding
Eurocurrency Rate Advance of such Lender or (b) if prohibited by any Legal
Requirement to maintain such Eurocurrency Rate Advances for the duration of the
Interest Period, on the second Business Day following its receipt of such notice
from such Lender, then (i) with respect to Primary Advances denominated in a
Foreign Currency, prepay such Eurocurrency Rate Advances of such Lender then
outstanding and which are denominated in such affected currency or currencies
together with all accrued interest on the amount so prepaid, and amounts, if
any, required to be paid pursuant to Section 2.8 as a result of such Conversion
being made on such date, (ii) with respect to Primary Advances denominated in
Dollars, Convert all such Eurocurrency Rate Advances of such Lender then
outstanding to Primary Prime Rate Advances and pay accrued interest on the
principal amount Converted to the date of such Conversion and amounts, if any,
required to be paid pursuant to Section 2.8 as a result of such Conversion being
made on such date, (iii) with respect to Norwegian Advances denominated in an
Agreed Currency (other than NOK), prepay such Eurocurrency Rate Advances of such
Lender then outstanding and which are denominated in such affected currency or
currencies together with all accrued interest on the amount so prepaid, and
amounts, if any, required to be paid pursuant to Section 2.8 as a result of such
Conversion being made on such date, and (iv) with respect to Norwegian Advances
denominated in NOK, Convert all such Eurocurrency Rate Advances of such Lender
then outstanding to Norwegian Prime Rate Advances and pay accrued interest on
the principal amount Converted to the date of such Conversion and amounts, if
any, required to be paid pursuant to Section 2.8 as a result of such Conversion
being made on such date. Each Lender agrees to use commercially reasonable
efforts (consistent with its internal policies and legal and regulatory
restrictions) to designate a different Applicable Lending Office if the making
of such designation would avoid the effect of this paragraph and would not, in
the reasonable judgment of such Lender, be otherwise disadvantageous to such
Lender.

     Section 2.13 Letters of Credit.

          (a) Issuance of Primary Letters of Credit. Wells Fargo, as a Primary
Issuing Lender, the Primary Lenders and the Borrower agree that effective as of
the Closing Date, the Existing Letters of Credit shall be deemed to have been
issued and maintained under, and to be governed by the terms and conditions of,
this Agreement as Primary Letters of Credit. From time to time from the date of
this Agreement until ten days before the Maturity Date, at the written request
of the Borrower given not later than (i) 12:00 p.m. (Houston, Texas time) on the
third Business Day before the date of the proposed issuance, amendment, or
extension of a Letter of Credit denominated in a Foreign Currency and
(ii) 12:00 p.m. (Houston, Texas time) one Business Day before the date of the
proposed issuance, amendment, or extension of a Letter of Credit denominated in
Dollars, the requested Primary Issuing Lender shall, on any Business Day and on
the terms and conditions hereinafter set forth, issue, increase, decrease,
amend, or

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extend the expiration date of, Primary Letters of Credit for the account of the
Borrower (for its own benefit or for the benefit of any of its Subsidiaries).
Primary Letters of Credit shall be denominated in any Agreed Currency.

          (b) Issuance of Norwegian Letters of Credit. From time to time from
the date of this Agreement until ten days before the Maturity Date, at the
written request of the Borrower given not later than (i) 12:00 p.m. (Oslo,
Norway time) on the third Business Day before the date of the proposed issuance,
amendment, or extension of a Letter of Credit denominated in a Foreign Currency
and (ii) 12:00 p.m. (Oslo, Norway time) one Business Day before the date of the
proposed issuance, amendment, or extension of a Letter of Credit denominated in
Dollars, the Norwegian Issuing Lender shall, on any Business Day and on the
terms and conditions hereinafter set forth, issue, increase, decrease, amend, or
extend the expiration date of, Norwegian Letters of Credit for the account of
the Borrower (for its own benefit or for the benefit of any of its
Subsidiaries). Norwegian Letters of Credit under the Norwegian Facility shall be
denominated in any Agreed Currency.

          (c) Limitations. No Letter of Credit will be issued, increased, or
extended (i) if such issuance, increase, or extension would cause the Dollar
Amount of the Norwegian Letter of Credit Exposure to exceed an amount equal to
(A) the aggregate Norwegian Commitments less (B) the aggregate the Dollar Amount
of all outstanding Norwegian Advances at such time; (ii) if such issuance,
increase, or extension would cause the Primary Letter of Credit Exposure to
exceed an amount equal to (A) the aggregate Primary Commitments less (B) the
aggregate Dollar Amount of all outstanding Primary Advances and Swingline
Advances at such time; (iii) unless such Letter of Credit has an Expiration Date
not later than the earlier of (A) sixty months after the date of issuance
thereof and (B) twenty-four months after the Maturity Date; (iv) unless such
Letter of Credit is in form and substance acceptable to the applicable Issuing
Lender in its sole discretion; (v) unless the Borrower has delivered to the
applicable Issuing Lender a completed and executed letter of credit application
on such Issuing Lender’s standard form, which shall contain terms no more
restrictive than the terms of this Agreement; and (vi) unless such Letter of
Credit is governed by the Uniform Customs and Practice for Documentary Credits
(1993 Revision), International Chamber of Commerce Publication No. 500 (“UCP”)
or any successor to the UCP. If the terms of any letter of credit application
referred to in the foregoing clause (v) conflicts with the terms of this
Agreement, the terms of this Agreement shall control.

          (d) Participations. With respect to each Letter of Credit described on
Schedule 1.1(c) which is outstanding on the Effective Date, each Lender agrees
that it has a participation in the related Letter of Credit Exposure equal to
such Lender’s Applicable Pro Rata Share on the Effective Date. On the date of
the issuance or increase of any Letter of Credit on or after the Effective Date,
each Issuing Lender shall be deemed to have sold to each other Lender and each
other Lender shall have been deemed to have purchased from such Issuing Lender a
participation in the Letter of Credit Exposure related to the Letters of Credit
issued by such Issuing Lender equal to such Lender’s Applicable Pro Rata Share
at such date and such sale and purchase shall otherwise be in accordance with
the terms of this Agreement. Each Issuing Lender shall promptly notify each such
participant Lender by telex, telephone, or telecopy (with a copy of such demand
to the applicable Administrative Agent) of each Letter of Credit of such Issuing
Lender issued, increased or decreased, and the actual dollar amount of such
Lender’s participation in such Letter of Credit. Each Lender’s obligation to
purchase participating interests pursuant to this Section and to reimburse such
Issuing Lender for such Lender’s Applicable Pro Rata Share of any payment under
a Letter of Credit by such Issuing Lender not reimbursed in full by the Borrower
shall be absolute and unconditional and shall not be affected by any
circumstance, including (i) any of the circumstances described in paragraph
(f) below, (ii) the occurrence and continuance of a Default, (iii) an adverse
change in the financial condition of the Borrower or (iv) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing, except for any such circumstance, happening or event

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constituting or arising from gross negligence or willful misconduct on the part
of the applicable Issuing Lender.

          (e) Reimbursement. Upon receipt from the beneficiary of any Letter of
Credit of any notice of a drawing under such Letter of Credit, the applicable
Issuing Lender shall notify the Borrower and the applicable Lenders thereof. No
later than 11:00 a.m. on the date of any payment to be made by such Issuing
Lender under a Letter of Credit, the Borrower agrees to pay to such Issuing
Lender an amount equal to any amount paid by such Issuing Lender under or in
respect of such Letter of Credit and in the currency paid by such Issuing
Lender. Notwithstanding the foregoing, if, after the issuance of any Letter of
Credit denominated in a Foreign Currency, such currency ceases to be an Agreed
Currency as provided in the definition of Agreed Currency, then all payments to
be made by the Borrower hereunder in such currency shall instead be made when
due (either directly by the Borrower or through a deemed borrowing under clause
(i) below) in Dollars in an amount equal to the Dollar Amount (as of the date of
repayment) of such payment due, it being the intention of the parties hereto
that the Borrower take all risks of the imposition of any such currency control
or exchange regulations. In the event an Issuing Lender makes a payment pursuant
to a request for draw presented under a Letter of Credit and such payment is not
promptly reimbursed by the Borrower as required herein, such Issuing Lender
shall give notice of such payment to the applicable Administrative Agent and the
Primary Lenders or Norwegian Lenders, as applicable. In such event, the Borrower
shall be deemed to have requested (i) for unreimbursed drawings under Primary
Letters of Credit denominated in Dollars or in a Foreign Currency which ceased
to be an Agreed Currency, Primary Prime Rate Advances, (ii) for unreimbursed
drawings under Primary Letters of Credit denominated in Foreign Currencies,
Eurocurrency Rate Advances under the Primary Facility, in such Agreed Currency
and in the amount of such unreimbursed amount with an Interest Period of one
month, (iii) for unreimbursed drawings under Norwegian Letters of Credit
denominated in NOK or in any other Foreign Currency which ceased to be an Agreed
Currency, a Norwegian Prime Rate Advances, and (iv) for unreimbursed drawings
under Norwegian Letters of Credit denominated in Dollars or any Foreign Currency
(other than NOK), Eurocurrency Rate Advances under the Norwegian Facility, in
such Agreed Currency and in the amount of such unreimbursed amount with an
Interest Period of one month. Each applicable Lender shall, no later than 1:00
p.m. on the Business Day specified in the notice given by the Issuing Lender,
promptly make such funds available to the applicable Issuing Lender, in the
applicable currency and in an amount equal to such Lender’s Applicable Pro Rata
Share of the unreimbursed amount. If such funds are not made available by a
Lender to the applicable Issuing Lender on the required date, such Lender shall
pay interest thereon to the applicable Issuing Lender at a rate per annum equal
to the Overnight Rate. The Borrower hereby unconditionally and irrevocably
authorizes, empowers, and directs the Administrative Agents and the Lenders to
record and otherwise treat each payment under a Letter of Credit not immediately
reimbursed by the Borrower as a Borrowing comprised of Primary Prime Rate
Advances, Norwegian Prime Rate Advances or Eurocurrency Rate Advances, as
applicable, to the Borrower. All overdue Reimbursement Obligations of the
Borrower shall bear interest as set forth in Section 2.6(f).

          (f) Obligations Unconditional. The obligations of the Borrower under
this Agreement in respect of each Letter of Credit shall be unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, notwithstanding the following circumstances:

        (i) any lack of validity or enforceability of any Letter of Credit
Documents;

        (ii) any amendment or waiver of or any consent to departure from any
Letter of Credit Documents;

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        (iii) the existence of any claim, set-off, defense or other right which
the Borrower or any Lender or any other Person may have at any time against any
beneficiary or transferee of such Letter of Credit (or any Persons for whom any
such beneficiary or any such transferee may be acting), any Issuing Lender or
any other Person or entity, whether in connection with this Agreement, the
transactions contemplated in this Agreement or in any Letter of Credit Documents
or any unrelated transaction;

        (iv) any statement or any other document presented under such Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect to the extent
an Issuing Lender would not be liable therefor pursuant to the following
paragraph (g);

        (v) payment by an Issuing Lender under such Letter of Credit against
presentation of a draft or certificate which does not comply with the terms of
such Letter of Credit; or

        (vi) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing;

provided, however, that nothing contained in this paragraph (f) shall be deemed
to constitute a waiver of any remedies of the Borrower in connection with the
Letters of Credit.

          (g) Liability of Issuing Lenders. The Borrower assumes all risks of
the acts or omissions of any beneficiary or transferee of any Letter of Credit
with respect to its use of such Letter of Credit. No Issuing Lender nor any of
its officers or directors shall be liable or responsible for:

        (i) the use which may be made of any Letter of Credit or any acts or
omissions of any beneficiary or transferee in connection therewith;

        (ii) the validity, sufficiency or genuineness of documents, or of any
endorsement thereon, even if such documents should prove to be in any or all
respects invalid, insufficient, fraudulent or forged;

        (iii) payment by any Issuing Lender against presentation of documents
which do not comply with the terms of a Letter of Credit, including failure of
any documents to bear any reference or adequate reference to the relevant Letter
of Credit;

        (iv) any adverse change in the relevant exchange rates or in the
availability of the relevant Agreed Currency to the Borrower or in the relevant
currency markets generally; or

        (v) any other circumstances whatsoever in making or failing to make
payment under any Letter of Credit (INCLUDING ANY ISSUING LENDER’S OWN
NEGLIGENCE),

except that the Borrower shall have a claim against such Issuing Lender, and
such Issuing Lender shall be liable to, and shall promptly pay to, the Borrower,
to the extent of any direct, as opposed to consequential, damages suffered by
the Borrower which the Borrower proves were caused by such Issuing Lender’s
willful misconduct or gross negligence. In furtherance and not in limitation of
the foregoing clause (f), the Issuing Lenders may accept documents that appear
on their face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary.

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          (h) Cash Collateral Account. The Borrower shall, (i) within 10 days
prior to the Maturity Date and (ii) at any time, if an Event of Default has
occurred and is continuing, on the Business Day the Borrower receives written
notice from an Issuing Lender or the US Administrative Agent that
collateralization is being required pursuant to Section 7.2(b) or Section
7.3(b), either (A) deposit cash in the Cash Collateral Account held by the US
Administrative Agent in an amount equal to the Primary Letter of Credit Exposure
as of such date or (B) cause to be issued an irrevocable standby letter of
credit in favor of the applicable Issuing Lender and issued by a bank or other
financial institution acceptable to such Issuing Lender and the US
Administrative Agent to support the full amount of the Primary Letter of Credit
Exposure as of such date. The Borrower shall, (i) within 10 days prior to the
Maturity Date and (ii) at any time, if an Event of Default has occurred and is
continuing, on the Business Day the Borrower receives written notice from the
Norwegian Issuing Lender or Norwegian Administrative Agent that
collateralization is being required pursuant to Section 7.2(c) or
Section 7.3(c), either (A) deposit cash in the Cash Collateral Account held by
the Norwegian Administrative Agent in an amount equal to the Norwegian Letter of
Credit Exposure as of such date or (B) cause to be issued an irrevocable standby
letter of credit in favor of the Norwegian Issuing Lender and issued by a bank
or other financial institution acceptable to Norwegian Issuing Lender and the
Norwegian Administrative Agent to support the full amount of the Norwegian
Letter of Credit Exposure as of such date.

          (i) Letters of Credit Issued for Subsidiaries. Notwithstanding that a
Letter of Credit issued or outstanding hereunder is in support of any
obligations of, or is for the account of, a Subsidiary of the Borrower, the
Borrower shall be obligated to reimburse the applicable Issuing Lender hereunder
for any and all drawings under such Letter of Credit. The Borrower hereby
acknowledges that the issuance of Letters of Credit for the account of
Subsidiaries inures to the benefit of the Borrower, and that the Borrower’s
business derives substantial benefits from the businesses of such Subsidiaries.

     Section 2.14 Sharing of Payments, Etc. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off or otherwise) on account of its Advances or its share of Letter of
Credit Obligations in excess of its Applicable Pro Rata Share of payments on
account of the Advances or Letter of Credit Obligations obtained by all the
Primary Lenders or all of the Norwegian Lenders, in each case as a class, then
such Lender shall notify the applicable Administrative Agent and the applicable
class of Lenders and forthwith purchase from the other Lenders in such class,
such participations in the Advances made by them or Letter of Credit Obligations
held by them as shall be necessary to cause such purchasing Lender to share the
excess payment ratably in accordance with the requirements of this Agreement
with each of them; provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Lender, such purchase from
each Lender shall be rescinded and such Lender shall repay to the purchasing
Lender the purchase price to the extent of such Lender’s ratable share
(according to the proportion of (a) the amount of the participation sold by such
Lender to the purchasing Lender as a result of such excess payment to (b) the
total amount of such excess payment) of such recovery, together with an amount
equal to such Lender’s ratable share (according to the proportion of (i) the
amount of such Lender’s required repayment to the purchasing Lender to (ii) the
total amount of all such required repayments to the purchasing Lender) of any
interest or other amount paid or payable by the purchasing Lender in respect of
the total amount so recovered. The Borrower agrees that any Lender so purchasing
a participation from another Lender pursuant to this Section 2.14 may, to the
fullest extent permitted by law, unless and until rescinded as provided above,
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.

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     Section 2.15 Increase of Commitment.

          (a) At any time prior to the Maturity Date, the Borrower may
effectuate no more than two increases in the aggregate Revolving Commitments
(and the corresponding Norwegian Commitments and Primary Commitments) by an
aggregate amount not greater than $250,000,000 (any such increase, a “Commitment
Increase”), by designating either one or more of the existing Lenders (each of
which, in its sole discretion, may determine whether and to what degree to
participate in such Commitment Increase) or one or more other banks or other
financial institutions (reasonably acceptable to the applicable Administrative
Agent and the applicable Issuing Lenders) that at the time agree, in the case of
any such bank or financial institution that is an existing Lender to increase
its Norwegian Commitment or Primary Commitment as such Lender shall so select
(an “Increasing Lender”) and, in the case of any other such bank or financial
institution (an “Additional Lender”), to become a party to this Agreement;
provided, however, that the aggregate Revolving Commitments shall not at any
time exceed $750,000,000, and the aggregate Norwegian Commitments shall not at
any time exceed $100,000,000. The sum of the increases in the Revolving
Commitments of the Increasing Lenders plus the Revolving Commitments of the
Additional Lenders upon giving effect to the Commitment Increase shall not in
the aggregate exceed the amount of the Commitment Increase. The Borrower shall
provide prompt notice of any proposed Commitment Increase pursuant to this
Section 2.15 to the Administrative Agents and the Lenders.

          (b) Any Commitment Increase shall become effective upon (i) the
receipt by the Administrative Agents of (A) an agreement in form and substance
satisfactory to the applicable Administrative Agent signed by the Borrower, each
Increasing Lender and each Additional Lender, setting forth the new Revolving
Commitment, Norwegian Commitment and Primary Commitment, if any, of each such
Lender and setting forth the agreement of each Additional Lender to become a
party to this Agreement and to be bound by all the terms and provisions hereof
binding upon each Lender, and (B) such evidence of appropriate authorization on
the part of the Borrower with respect to the Commitment Increase and such
opinions of counsel for the Borrower with respect to the Commitment Increase as
the applicable Administrative Agent may reasonably request, (ii) the funding by
each Increasing Lender and Additional Lender of the Advances to be made by each
such Lender described in subsection (c) below and (iii) receipt by the US
Administrative Agent of a certificate (the statements contained in which shall
be true) of a Responsible Officer of the Borrower stating that both before and
after giving effect to such Commitment Increase (A) no Event of Default has
occurred and is continuing, and (B) all representations and warranties made by
the Borrower in this Agreement are true and correct in all material respects,
unless such representation or warranty relates to an earlier date.

          (c) The Borrower shall prepay any Advances outstanding on the
effective date of such Commitment Increase to the extent necessary to keep the
outstanding Norwegian Advances and the outstanding Primary Advances ratable with
any revised Applicable Pro Rata Share arising from any nonratable increases in
the Primary Commitments, Primary Commitments and Revolving Commitments under
this Section 2.15.

          (d) Notwithstanding any provision contained herein to the contrary,
from and after the date of any Commitment Increase, all calculations and
payments of interest on the Advances shall take into account the actual Primary
Commitment and Norwegian Commitment of each Lender and the principal amount
outstanding of each Advance made by such Lender during the relevant period of
time.

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       Section 2.16 Lender Replacement.

          (a) Right to Replace. The Borrower shall have the right to replace
each Lender affected by a condition under Section 2.2(c)(v), 2.9, 2.11 or 2.12
for more than 30 days (each such affected Lender, an “Affected Lender”) in
accordance with the procedures in this Section 2.16 and provided that no
reduction of the total Revolving Commitments occurs as a result thereof.

          (b) First Right of Refusal; Replacement.

        (i) Upon the occurrence of any condition permitting the replacement of a
Lender, each Lender which is not an Affected Lender shall have the right, but
not the obligation, to elect to increase its respective Revolving Commitment
(and corresponding Norwegian Commitment and Primary Commitment, if any) by an
amount not to exceed the amount of the Revolving Commitments (and corresponding
Norwegian Commitments and Primary Commitments) of the Affected Lenders, which
election shall be made by written notice from each such Lender to the Agent and
the Borrower given within 30 days after the date such condition occurs
specifying the amount of such proposed increase in such Lender’s Revolving
Commitment (and corresponding Norwegian Commitment and Primary Commitment, if
any).

        (ii) If the aggregate amount of the proposed increases in Revolving
Commitments (and corresponding Norwegian Commitments and Primary Commitments) of
all such Lenders making such an election is in excess of the Revolving
Commitments (and corresponding Norwegian Commitments and Primary Commitments) of
the Affected Lenders, (A) the Revolving Commitments (and corresponding Norwegian
Commitments and Primary Commitments) of the Affected Lenders shall be allocated
pro rata among such Lenders based on the respective amounts of the proposed
increases to Revolving Commitments (and corresponding Norwegian Commitments and
Primary Commitments) elected by each of such Lenders, and (B) the respective
commitments of such Lenders shall be increased by the respective amounts as so
allocated so that after giving effect to such termination and increases the
aggregate amount of the Revolving Commitments (and corresponding Norwegian
Commitments and Primary Commitments) of the Lenders will be the same as prior to
such termination.

        (iii) If the aggregate amount of the proposed increases to Revolving
Commitments (and corresponding Norwegian Commitments and Primary Commitments) of
all Lenders making such an election equals the Revolving Commitments (and
corresponding Norwegian Commitments and Primary Commitments) of the Affected
Lenders, the respective Revolving Commitments (and corresponding Norwegian
Commitments and Primary Commitments) of such Lenders shall be increased by the
respective amounts of their proposed increases, so that after giving effect to
such termination and increase the aggregate amount of the Revolving Commitments
(and corresponding Norwegian Commitments and Primary Commitments) of all of the
Lenders will be the same as prior to such termination.

        (iv) If the aggregate amount of the proposed increases to Revolving
Commitments (and corresponding Norwegian Commitments and Primary Commitments) of
all Lenders making such an election is less than the Revolving Commitments (and
corresponding Norwegian Commitments and Primary Commitments) of the Affected
Lenders, (A) the respective Revolving Commitments (and corresponding Norwegian
Commitments and Primary Commitments) of such Lenders shall be increased by the
respective amounts of their proposed increases, and (B) the Borrower shall add
additional Lenders which are Eligible Assignees to this Agreement to replace
such Affected Lenders, which additional Lenders would have aggregate

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Revolving Commitments (and corresponding Norwegian Commitments and Primary
Commitments) no greater than those of the Affected Lenders minus the amounts
thereof assumed by the other Lenders pursuant to such increases.

          (c) Procedure. Any assumptions of Revolving Commitments (and
corresponding Norwegian Commitments and Primary Commitments) pursuant to this
Section 2.16 shall be (i) made by the purchasing Lender or Eligible Assignee and
the selling Lender by entering into an Assignment and Assumption and by
following the procedures in Section 9.6 for adding a Lender. In connection with
the increase of the Revolving Commitments (and corresponding Norwegian
Commitments and Primary Commitments) of any Lender pursuant to the foregoing
paragraph (b), each Lender with an increased Revolving Commitment (and
corresponding Norwegian Commitment and Primary Commitment, if any) shall
purchase from the Affected Lenders at par such Lender’s ratable share of the
outstanding Advances of the Affected Lenders and assume such Lender’s ratable
share of the Affected Lenders’ Letter of Credit Exposure.

       Section 2.17 Currency Fluctuations, Mandatory Prepayments and Deposits in
the Cash Collateral Accounts.

          (a) Not later than 1:00 p.m., Houston, Texas time, on each Computation
Date, the US Administrative Agent shall determine the Exchange Rate as of such
Computation Date and deliver to the Norwegian Administrative Agent in writing
the Norwegian Krone equivalent amount of such determination on or prior to such
Computation Date. The Exchange Rate so determined shall become effective on the
first Business Day after such Computation Date and shall remain effective
through the next succeeding Computation Date.

          (b) Not later than noon, Houston, Texas time, on each Computation
Date, the US Administrative Agent shall consult with the Norwegian
Administrative Agent regarding the Exchange Rate and the Administrative Agents
shall determine the Dollar Amount of the aggregate outstanding unpaid
Obligations.

          (c) If, on any Computation Date: (i) the Dollar Amount of the sum of
the outstanding principal amount of Revolving Advances plus the outstanding
principal amount of Swingline Advances plus the Letter of Credit Exposure
exceeds an amount equal to 105% of the aggregate Revolving Commitments then in
effect; (ii) the Dollar Amount of the sum of the outstanding principal amount of
Primary Advances plus the outstanding principal amount of Swingline Advances
plus the Primary Letter of Credit Exposure exceeds the aggregate Primary
Commitments; or (iii) the Dollar Amount of the sum of the outstanding principal
amount of Norwegian Advances plus the Norwegian Letter of Credit Exposure
exceeds an amount equal to 105% of the aggregate Norwegian Commitments; then the
US Administrative Agent shall give notice thereof to the Borrower and the
Primary Lenders, and the Norwegian Administrative Agent shall give notice
thereof to the Norwegian Lenders, and the Borrower shall within five
(5) Business Days thereafter prepay Advances, or if the Advances have been
repaid or prepaid in full, make deposits into the applicable Cash Collateral
Account, such that after giving effect to such prepayment of Advances or
deposits into the Cash Collateral Accounts: (A) the Dollar Amount of the sum of
the outstanding principal amount of Revolving Advances plus the outstanding
principal amount of Swingline Advances plus the Letter of Credit Exposure does
not exceed the aggregate Revolving Commitments then in effect; (B) the Dollar
Amount of the sum of the outstanding principal amount of Primary Advances plus
the outstanding principal amount of Swingline Advances plus the Primary Letter
of Credit Exposure does not exceed the aggregate Primary Commitments; and
(C) the Dollar Amount of the sum of the outstanding principal amount of
Norwegian Advances plus the Norwegian Letter of Credit Exposure does not exceed
the aggregate Norwegian Commitments.

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          (d) If any currency shall cease to be an Agreed Currency as provided
in the last sentence of the definition of “Agreed Currency”, then promptly, but
in any event within five (5) Business Days of receipt of the notice from the US
Administrative Agent provided for in such sentence, the Borrower shall repay all
Advances funded and denominated in such affected currency or Convert such
Advances into Advances in Dollars or another Agreed Currency, subject to the
other terms set forth in Article II.

          (e) Each prepayment pursuant to this Section 2.17 shall be accompanied
by accrued interest on the amount prepaid to the date of such prepayment and
amounts, if any, required to be paid pursuant to Section 2.8 as a result of such
prepayment being made on such date.

          (f) Each payment of any Advance pursuant to this Section 2.17 or any
other provision of this Agreement shall be made in a manner such that all
Advances comprising part of the same Borrowing are paid in whole or ratably in
part and each payment of an Advance shall be made in the Designated Currency in
which such Advance was funded.

     Section 2.18 Market Disruption.

          (a) Primary Facility. Notwithstanding the satisfaction of all
conditions referred to herein with respect to any proposed Borrowing consisting
of Eurocurrency Advances denominated in any Foreign Currencies and made under
the Primary Facility, if there shall occur on or prior to the date of such
Borrowing any change in national or international financial, political or
economic conditions or currency exchange rates or exchange controls which would
in the reasonable opinion of the US Administrative Agent or the Majority Lenders
with respect to the Primary Facility, make it impracticable for such Borrowing
to be denominated in the Agreed Currency designated by the Borrower, then the US
Administrative Agent shall forthwith give notice thereof to the Borrower and the
Primary Lenders, and such Advances shall not thereafter be denominated and
funded in such Agreed Currency but shall, except as otherwise set forth in
Article II, be made on such date in Dollars, in an aggregate principal amount
equal to the Dollar Amount of the aggregate principal amount specified in the
related Notice of Borrowing, as the case may be, as Primary Prime Rate Advances
to the Borrower, unless the Borrower notifies the US Administrative Agent at
least one Business Day before such date that (i) it elects not to borrow on such
date or (ii) it elects to borrow on such date in a different Agreed Currency, as
the case may be, in which the denomination of such Advances would in the opinion
of the US Administrative Agent and the Majority Lenders with respect to the
Primary Facility be practicable and in an aggregate principal amount equal to
the Dollar Amount of the aggregate principal amount specified in the related
Notice of Borrowing, as the case may be.

          (b) Norwegian Facility. Notwithstanding the satisfaction of all
conditions referred to herein with respect to any proposed Borrowing consisting
of Eurocurrency Advances denominated Dollars or in any Foreign Currencies (other
than NOK) and made under the Norwegian Facility, if there shall occur on or
prior to the date of such Borrowing any change in national or international
financial, political or economic conditions or currency exchange rates or
exchange controls which would in the reasonable opinion of the Norwegian
Administrative Agent or the Majority Lenders with respect to the Norwegian
Facility, make it impracticable for such Borrowing to be denominated in the
Agreed Currency designated by the Borrower, then the US Administrative Agent
shall forthwith give notice thereof to the Borrower and the Norwegian Lenders,
and such Advances shall not thereafter be denominated and funded in such Agreed
Currency but shall, except as otherwise set forth in Article II, be made on such
date in NOK, in an aggregate principal amount equal to the NOK Amount of the
aggregate principal amount specified in the related Notice of Borrowing, as the
case may be, as Norwegian Prime Rate Advances to the Borrower, unless the
Borrower notifies the Norwegian Administrative Agent at least one Business

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Day before such date that (i) it elects not to borrow on such date or (ii) it
elects to borrow on such date in a different Agreed Currency, as the case may
be, in which the denomination of such Advances would in the opinion of the
Norwegian Administrative Agent and the Majority Lenders with respect to the
Norwegian Facility be practicable and in an aggregate principal amount equal to
the Dollar Amount of the aggregate principal amount specified in the related
Notice of Borrowing, as the case may be.

     Section 2.19 Extension of Maturity Date.

          (a) Not earlier than 90 days prior to the Maturity Date, then in
effect, nor later than 30 days prior to the Maturity Date, then in effect, the
Borrower may, upon notice to the Administrative Agents (which shall promptly
notify the Lenders), request a one-year extension of the Maturity Date then in
effect. This option may be exercised only once. Within 30 days of delivery of
such notice, each Lender shall notify the applicable Administrative Agent
whether or not it consents to such extension (which consent may be given or
withheld in such Lender’s sole and absolute discretion). Any Lender not
responding within the above time period shall be deemed not to have consented to
such extension. The Administrative Agents shall promptly notify the Borrower and
the Lenders of the Lenders’ responses.

          (b) The Maturity Date shall be extended only if the Majority Lenders
have consented thereto (the “Consenting Lenders”). If so extended, the Maturity
Date, as to the Consenting Lenders, shall be extended to the same date in the
following year, effective as of the Maturity Date then in effect (such extended
Maturity Date being the “Extension Maturity Date”). All non consenting Lenders
(“Non-Consenting Lenders”) shall continue to be subject to the Maturity Date in
effect prior to the effectiveness of the Extension Maturity Date (such existing
Maturity Date being the “Present Maturity Date”). The Administrative Agents and
the Borrower shall promptly confirm to the Lenders such extension and the
Extension Maturity Date. As a condition precedent to such extension, the
Borrower shall pay or prepay all Advances, interest thereon and all other
amounts due each Non-Consenting Lender on or before the Present Maturity Date
(and each Non-Consenting Lender shall, as of the Present Maturity Date, be
released of all obligations (i) with respect to Letter of Credit Exposure, and
(ii) to reimburse draws or fund participations with respect to Swingline
Advances, and shall deliver to the Administrative Agents a certificate of the
Borrower (in sufficient copies for each Lender) signed by a Responsible Officer
of the Borrower (i) certifying and attaching the resolutions adopted by the
Borrower approving or consenting to such extension and (ii) certifying that,
before and after giving effect to such extension, (A) the representations and
warranties contained in Article IV and the other Credit Documents are true and
correct in all material respects, except to the extent that such representations
and warranties expressly relate solely to an earlier date, in which case they
shall have been true and correct in all material respects as of such earlier
date, and except that for purposes of this Section 2.19, the representations and
warranties contained in Section 4.6 shall be deemed to refer to the most recent
statements furnished pursuant to subsection (b) of Section 5.6, and (B) no
Default exists.

          (c) This Section shall supersede any provisions in Section 2.14 or 9.1
to the contrary.

          (d) The Borrower shall prepay any Advances outstanding on the Present
Maturity Date (and pay any additional amounts required pursuant to Section 2.8)
or borrow additional amounts to the extent necessary to keep outstanding
Advances ratable with any revised and new Primary Commitment or Norwegian
Commitment, as the case may be, of all Consenting Lenders effective as of the
Present Maturity Date.

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ARTICLE III
CONDITIONS OF LENDING

       Section 3.1 Conditions Precedent to Effectiveness of this Agreement. This
Agreement shall become effective upon the following conditions precedent having
been satisfied:

          (a) Documentation. The US Administrative Agent shall have received the
following duly executed by all the parties thereto, in form and substance
satisfactory to the US Administrative Agent, and in sufficient copies for each
Lender:

        (i) this Agreement;

        (ii) the Notes (to the extent requested by any Lender under
Section 2.2(g));

        (iii) a certificate from a Responsible Officer of the Borrower dated as
of the Effective Date stating that as of the Effective Date (A) all
representations and warranties of the Borrower set forth in this Agreement and
the Credit Documents to which it is a party are true and correct in all material
respects; (B) no Default or Event of Default has occurred and is continuing;
(C) no Material Adverse Effect has occurred since December 31, 2004; and (D) the
conditions in this Section 3.1 have been met;

        (iv) a certificate of the Secretary or an Assistant Secretary of the
Borrower dated as of the date of this Agreement certifying as of the date of
this Agreement (A) copies of the articles or certificate of incorporation and
bylaws or other organizational documents of the Borrower, together with all
amendments thereto, (B) resolutions of the Board of Directors of such Person
with respect to the transactions herein contemplated, and (C) the names and true
signatures of officers of the Borrower authorized to sign the Credit Documents
to which the Borrower is a party (including Notices of Borrowing).

        (v) certificates of good standing and existence for the Borrower, each
certified by the appropriate governmental officer in its jurisdiction of
formation;

        (vi) a favorable opinion of each of (A) Haynes and Boone, LLP, counsel
to the Borrower, and (B) Dwight Rettig, general counsel of the Borrower, each
dated as of the Effective Date and in form and substance satisfactory to the US
Administrative Agent;

        (vii) the unaudited Consolidated balance sheet of the Borrower as at
March 31, 2005, and the related Consolidated statements of operations,
shareholders’ equity and cash flows, of the Borrower for the three months then
ended, duly certified by the Chief Financial Officer or of the Borrower; and

        (viii) such other documents, governmental certificates, and agreements
as any Administrative Agent may reasonably request.

          (b) Representations and Warranties. The representations and warranties
contained in this Agreement and each other Credit Document shall be true and
correct in all material respects.

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          (c) Fees.

        (i) All fees, costs, and expenses of Wells Fargo and its affiliates for
which invoices have been presented (including legal fees and expenses of counsel
to the US Administrative Agent) to be paid on the Closing Date shall have been
paid.

        (ii) The Borrower shall have paid to the Administrative Agents and the
Arranger, for their respective accounts, the fees agreed to pursuant to the
terms of the Agent’s Fee Letters.

          (d) Termination of Existing Credit Agreements. The US Administrative
Agent and the Lenders shall have received sufficient evidence indicating that
contemporaneously with the execution of this Agreement all obligations of the
Borrower to the lenders under the Existing Credit Agreements shall have been
paid in full (other than with respect to the letters of credit issued thereunder
which, on the Closing Date, will constitute Letters of Credit issued hereunder)
and the Existing Credit Agreements shall be terminated (excluding any
obligations which expressly survive the repayment of the amounts owing under the
Existing Credit Agreements).

     Section 3.2 Conditions Precedent for each Borrowing or Letter of Credit.
The obligation of each Lender to fund an Advance on the occasion of each
Borrowing (other than the Conversion or continuation of any existing Borrowing
and other than a Mandatory Revolving Borrowing) and of each Issuing Lender to
issue or increase or extend any Letter of Credit shall be subject to the further
conditions precedent that on the date of such Borrowing or the issuance or
increase or extension of such Letter of Credit the following statements shall be
true (and each of the giving of the applicable Notice of Borrowing and the
acceptance by the Borrower of the proceeds of such Borrowing or the issuance or
increase or extension of such Letter of Credit shall constitute a representation
and warranty by the Borrower that on the date of such Borrowing or the issuance
or increase or extension of such Letter of Credit such statements are true):

          (a) the representations and warranties contained in this Agreement and
each of the other Credit Documents are true and correct in all material respects
on and as of the date of such Borrowing or the issuance or increase or extension
of such Letter of Credit, before and after giving effect to such Borrowing or to
the issuance or increase or extension of such Letter of Credit and to the
application of the proceeds from such Borrowing, as though made on and as of
such date, except to the extent that any such representation or warranty
expressly relates solely to an earlier date, in which case it shall have been
true and correct in all material respects as of such earlier date; and

          (b) no Default has occurred and is continuing or would result from
such Borrowing or from the application of the proceeds therefrom.

     Section 3.3 Additional Condition Precedent for Initial Borrowing through
Authorized Agents. The obligation of the Lenders (or the Issuing Lenders, as the
case may be) to provide the first Borrowing, Conversion or continuation of an
existing Borrowing, or issuance, increase or extension of a Letter of Credit
that is requested by the Borrower through an Authorized Agent (“First Authorized
Agent Request”), shall be subject to the further condition precedent that on or
prior to the date of the First Authorized Agent Request, the applicable
Administrative Agent shall have received from the Borrower a secretary’s
certificate (a) confirming that the resolutions of the Board of Directors of the
Borrower delivered in satisfaction of Section 3.1(a)(iv) are still in full force
and effect, and have not been amended or revised, (b) attaching a true and
correct copy of the instrument or agreement whereby such officer, or if
appropriate, the director of the applicable Subsidiary of the Borrower was
appointed by a Responsible

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Officer of the Borrower as an “Authorized Agent” and verifying the incumbency of
such Responsible Officer, and (c) attaching a true and correct copy of an
officer’s, or if appropriate, a director’s certificate of the relevant
Subsidiary attesting to the incumbency of the Person so designated as the
Authorized Agent (which shall include a specimen signature of such Person and
show that such Person holds one of the offices specified in the Board
Resolutions of the Borrower confirmed in clause (a).

ARTICLE IV
REPRESENTATIONS AND WARRANTIES

     The Borrower represents and warrants as follows:

     Section 4.1 Corporate Existence; Subsidiaries. Each of the Borrower and its
Subsidiaries is a corporation, partnership or limited liability company duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its formation and in good standing and qualified to do business
in each jurisdiction where its ownership or lease of property or conduct of its
business requires such qualification and where a failure to be qualified could
reasonably be expected to have a Material Adverse Effect. As of December 31,
2004, the Borrower has no Subsidiaries other than (a) the Subsidiaries of Varco
listed in an exhibit to the Form 10-K filed by Varco on February 15, 2005 with
the SEC for the fiscal year ended December 31, 2004 and (b) the Subsidiaries of
National-Oilwell listed in an exhibit to the Form 10-K filed by National-Oilwell
on March 8, 2005 with the SEC for the fiscal year ended December 31, 2004.

     Section 4.2 Authorization and Validity. The execution, delivery, and
performance by the Borrower of the Credit Documents to which it is a party and
the consummation of the transactions contemplated hereby and thereby (a) are
within the Borrower’s power and authority, and (b) have been duly authorized by
all necessary corporate action.

     Section 4.3 Corporate Power. The execution, delivery, and performance by
the Borrower of the Credit Documents to which it is a party and the consummation
of the transactions contemplated hereby and thereby (a) do not contravene
(i) the Borrower’s articles or certificate of incorporation, bylaws or other
organizational documents or (ii) any Legal Requirement or any contractual
restriction binding on or affecting the Borrower or its Property, the
contravention of which could reasonably be expected to have a Material Adverse
Effect, and (b) will not result in or require the creation or imposition of any
Lien prohibited by this Agreement. At the time of each Borrowing, such Borrowing
(including any requested by an Authorized Agent on behalf of the Borrower) and
the use of the proceeds of such Borrowing will be within the Borrower’s
corporate powers, will have been duly authorized by all necessary corporate
action, (A) will not contravene (1) the Borrower’s certificate or articles of
incorporation or bylaws or (2) any Legal Requirement or contractual restriction
binding on or affecting the Borrower, the contravention of which could
reasonably be expected to have a Material Adverse Effect, and (B) will not
result in or require the creation or imposition of any Lien prohibited by this
Agreement.

     Section 4.4 Authorization and Approvals. No authorization or approval or
other action by, and no notice to or filing with, any Governmental Authority is
required for the due execution, delivery and performance by the Borrower of the
Credit Documents to which it is a party or the consummation of the transactions
contemplated thereby. At the time of each Borrowing, no authorization or
approval or other action by, and no notice to or filing with, any Governmental
Authority will be required for such Borrowing or the use of the proceeds of such
Borrowing.

     Section 4.5 Enforceable Obligations. This Agreement, the Notes, and the
other Credit Documents to which the Borrower is a party have been duly executed
and delivered by the Borrower. Each Credit Document is the legal, valid, and
binding obligation of the Borrower, enforceable against the

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Borrower in accordance with its terms, except as such enforceability may be
limited by any applicable bankruptcy, insolvency, reorganization, moratorium, or
similar law affecting creditors’ rights generally and by general principles of
equity (whether considered in proceeding at law or in equity).

     Section 4.6 Financial Statements. The audited Consolidated balance sheet
and related Consolidated statements of operations, shareholders’ equity and cash
flows, of Varco and its Subsidiaries set forth in the Form 10-K filed by Varco
on February 15, 2005 with the SEC for the fiscal year ended December 31, 2004,
fairly present in all material respects the Consolidated financial condition of
Varco and its Subsidiaries as at such date and the results of the operations of
Varco and its Subsidiaries for the year ended on such date, and such balance
sheet and statements were prepared in accordance with GAAP. The audited
Consolidated balance sheet and related Consolidated statements of operations,
shareholders’ equity and cash flows, of National-Oilwell and its Subsidiaries
set forth in the Form 10-K filed by National-Oilwell on March 8, 2005 with the
SEC for the fiscal year ended December 31, 2004, fairly present in all material
respects the Consolidated financial condition of the National-Oilwell and its
Subsidiaries as at such date and the results of the operations of
National-Oilwell and its Subsidiaries for the year ended on such date, and such
balance sheet and statements were prepared in accordance with GAAP.

     Section 4.7 True and Complete Disclosure. No information, exhibit, report,
representation, warranty, or other statement furnished or made by the Borrower
or any Subsidiary (or on behalf of the Borrower or any Subsidiary) to any
Administrative Agent or any Lender in connection with the negotiation of, or
compliance with, this Agreement or any other Credit Document contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the statements contained therein not misleading in any material respect in
light of the circumstances in which they were made as of the date of this
Agreement. All projections, estimates, and pro forma financial information
furnished by the Borrower or on behalf of the Borrower were prepared on the
basis of assumptions, data, information, tests, or conditions believed to be
reasonable at the time such projections, estimates, and pro forma financial
information were furnished.

     Section 4.8 Litigation. There is no pending or, to the knowledge of any of
their executive officers, threatened litigation, arbitration, governmental
investigation, inquiry, action or proceeding affecting the Borrower or any of
its Subsidiaries before any court, Governmental Authority or arbitrator, which
could reasonably be expected to have a Material Adverse Effect or which purports
to affect the legality, validity, binding effect or enforceability of this
Agreement, any Note, or any other Credit Document.

     Section 4.9 Use of Proceeds.

          (a) Advances and Letters of Credit. The proceeds of the Advances and
the Letters of Credit will be used by the Borrower (i) to refinance existing
Indebtedness, (ii) for working capital and general corporate purposes of the
Borrower and its Subsidiaries, and (iii) to support commercial paper issued by
the Borrower.

          (b) Regulations. No proceeds of Advances or Letters of Credit will be
used to purchase or carry any margin stock in violation of Regulations T, U or X
of the Federal Reserve Board, as the same is from time to time in effect, and
all official rulings and interpretations thereunder or thereof. The Borrower is
not engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation U of the Federal Reserve
Board).

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     Section 4.10 Investment Company Act. Neither the Borrower nor any of its
Subsidiaries is an “investment company” or a company “controlled” by an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended.

     Section 4.11 Public Utility Holding Company Act. Neither the Borrower nor
any of its Subsidiaries is a “holding company” or a “subsidiary company” of a
“holding company”, or an “affiliate” of a “holding company” or of a “subsidiary
company” of a “holding company”, within the meaning of the Public Utility
Holding Company Act of 1935, as amended.

     Section 4.12 Taxes. All federal, state, local and foreign tax returns,
reports and statements required to be filed (after giving effect to any
extension granted in the time for filing) by the Borrower, its Material
Subsidiaries or any member of the Controlled Group (hereafter collectively
called the “Tax Group”) have been filed with the appropriate Governmental
Authorities in all jurisdictions in which such returns, reports and statements
are required to be filed, except where contested in good faith and by
appropriate proceedings and as to which adequate reserves have been established;
and all taxes and other impositions due and payable have been timely paid prior
to the date on which any fine, penalty, interest, late charge or loss may be
added thereto for non-payment thereof except where contested in good faith and
by appropriate proceedings. Neither the Borrower nor any member of the Tax Group
has given, or been requested to give, a waiver of the statute of limitations
relating to the payment of any federal, state, local or foreign taxes or other
impositions.

     Section 4.13 Pension Plans. No Termination Event or Reportable Event has
occurred with respect to any Plan that would result in an Event of Default under
Section 7.1(g) or that could reasonably be expected to result in a Material
Adverse Effect, and, except for matters that could not reasonably be expected to
result in a Material Adverse Effect, each Plan has complied with and been
administered in all material respects in accordance with applicable provisions
of ERISA and the Code. No “accumulated funding deficiency” (as defined in
Section 302 of ERISA) has occurred and there has been no excise tax imposed
under Section 4971 of the Code. Neither the Borrower nor any member of the
Controlled Group has had a complete or partial withdrawal from any Multiemployer
Plan for which there is any withdrawal liability that could reasonably be
expected to result in a Material Adverse Effect or an Event of Default under
Section 7.1(g). Except for matters that could not reasonably result in a
Material Adverse Effect, as of the most recent valuation date applicable
thereto, neither the Borrower nor any member of the Controlled Group would
become subject to any liability under ERISA if the Borrower or any Subsidiary of
the Borrower has received notice that any Multiemployer Plan is insolvent or in
reorganization.

     Section 4.14 Condition of Property; Casualties. The Borrower and its
Subsidiaries will have good title, free of all Liens other than Permitted Liens,
to all of material Property and assets reflected in the Borrower’s recent
Consolidated financial statements provided to Administrative Agents and the
Lenders as owned by the Borrower and its Subsidiaries. All material Properties
used or to be used in the continuing operations of the Borrower and each of its
Subsidiaries, taken as a whole, are and will continue to be in good repair,
working order and condition, normal wear and tear excepted. Since December 31,
2004, neither the business nor the Properties of the Borrower and its
Subsidiaries, taken as a whole, has been affected so to have a Material Adverse
Effect, as a result of any fire, explosion, earthquake, flood, drought,
windstorm, accident, strike or other labor disturbance, embargo, requisition or
taking of property or cancellation of contracts, permits or concessions by a
Governmental Authority, riot, activities of armed forces or acts of God or of
any public enemy.

     Section 4.15 Insurance. The Borrower and each of its Subsidiaries carry
insurance with reputable insurers in respect of such of their respective
Properties, in such amounts and against such risks as is customarily maintained
by other Persons of similar size engaged in similar businesses or, self-insure
to the extent that is customary for Persons of similar size engaged in similar
businesses.

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     Section 4.16 No Burdensome Restrictions; No Defaults.

          (a) Neither the Borrower nor any of its Subsidiaries is a party to any
indenture, loan or credit agreement or any lease or other agreement or
instrument or subject to any charter or corporate restriction or provision of
any Legal Requirement which could reasonably be expected to have a Material
Adverse Effect. Neither the Borrower nor any of its Subsidiaries are in default
under or with respect to or have received any notice of default under any
contract, agreement, lease or other instrument to which the Borrower or any of
its Subsidiaries is a party and which could reasonably be expected to have a
Material Adverse Effect.

          (b) No Default or Event of Default has occurred and is continuing.

     Section 4.17 Environmental Condition. Except for matters which could not
reasonably be expected to have a Material Adverse Effect:

          (a) The Borrower and its Subsidiaries, taken as a whole, (i) have
obtained all Environmental Permits necessary for the ownership and operation of
their respective material Properties and the conduct of their respective
businesses; (ii) have been and are in compliance with all terms and conditions
of such Environmental Permits and with all other material requirements of
applicable Environmental Laws; (iii) have not received notice of any violation
or alleged violation of any Environmental Law or Environmental Permit; and
(iv) are not subject to any actual or contingent material Environmental Claim.

          (b) None of the present or previously owned or operated Property of
the Borrower or of any of its present or former Subsidiaries, wherever located,
(i) has been placed on or proposed to be placed on the National Priorities List,
the Comprehensive Environmental Response Compensation Liability Information
System list, or their state or local analogs, or have been otherwise
investigated, designated, listed, or identified as a potential site for removal,
remediation, cleanup, closure, restoration, reclamation, or other response
activity under any Environmental Laws; (ii) is subject to a Lien (other than
Permitted Liens) arising under or in connection with any Environmental Laws,
that attaches to any revenues or to any Property owned or operated by the
Borrower or any of its Subsidiaries, wherever located; or (iii) has been the
site of any Release of Hazardous Substances or Hazardous Wastes from present or
past operations which has caused at the site or at any third-party site any
condition.

          (c) Without limiting the foregoing, the liability, if any, of the
Borrower and its Subsidiaries, taken as a whole, which could reasonably be
expected to arise in connection with requirements under Environmental Laws could
not reasonably be expected to result in a Material Adverse Effect.

     Section 4.18 Permits, Licenses, etc. The Borrower and its Subsidiaries
possess all certificates of public convenience, authorizations, permits,
licenses, patents, patent rights or licenses, trademarks, trademark rights,
trade names rights and copyrights which are material to the conduct of its
business except where the failure to so possess could not reasonably be expected
to result in a Material Adverse Effect.

     Section 4.19 Compliance with Laws. The Borrower and its Subsidiaries have
complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof having jurisdiction over the conduct of their respective
businesses or the ownership of their respective Property except for any failure
to comply with any of the foregoing which could not reasonably be expected to
have a Material Adverse Effect.

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     Section 4.20 Existing Indebtedness. Schedule 4.20 contains a complete list
of each item of Indebtedness in excess of $1,000,000 (other than the Obligations
hereunder, but including any Hedging Obligations) of the Borrower and its
Subsidiaries on the Effective Date in each case showing the aggregate principal
amount thereof, the name of the respective borrower and any other entity which
directly or indirectly guaranteed such Indebtedness and the scheduled payments
of such Indebtedness.

ARTICLE V
AFFIRMATIVE COVENANTS

     So long as any Obligation shall remain unpaid, any Letter of Credit shall
remain outstanding, or any Lender shall have any Revolving Commitment hereunder,
the Borrower agrees, unless the Majority Lenders shall otherwise consent in
writing, to comply with the following covenants.

     Section 5.1 Compliance with Laws, Etc. The Borrower will, and will cause
each of its Subsidiaries to, comply in all material respects with all Legal
Requirements to which it may be subject; provided, however, that this
Section 5.1 shall not prevent the Borrower, or any of its Subsidiaries from, in
good faith and with reasonable diligence, contesting the validity or application
of any such laws or regulations by appropriate legal proceedings.

     Section 5.2 Insurance. The Borrower will, and will cause each of its
Material Subsidiaries to, maintain insurance with responsible and reputable
insurance companies or associations in such amounts and covering such risks as
are usually carried by companies engaged in similar businesses and owning
similar properties in the same general areas in which the Borrower or such
Subsidiary operates, provided that the Borrower or such Subsidiary may
self-insure to the extent and in the manner normal for similarly situated
companies of like size, type and financial condition that are part of a group of
companies under common control. Upon the written request of US Administrative
Agent, the Borrower shall deliver certificates evidencing such insurance and
copies of the underlying policies to such Administrative Agent and any Lender as
they are available.

     Section 5.3 Preservation of Existence, Etc. The Borrower will, and will
cause each of its Material Subsidiaries to, preserve and maintain its existence,
rights, franchises and privileges in the jurisdiction of its formation, and
qualify and remain qualified, and cause each such Material Subsidiary to qualify
and remain qualified, as a foreign entity in each jurisdiction in which
qualification is necessary or desirable in view of its business and operations
or the ownership of its properties, and, in each case, where failure to qualify
or preserve and maintain its rights and franchises could reasonably be expected
to have a Material Adverse Effect; provided, however, that nothing contained in
this Section 5.3 shall prevent any transaction permitted by Sections 6.5 or 6.7.

     Section 5.4 Payment of Taxes, Etc. The Borrower will, and will cause each
of its Material Subsidiaries to, timely file complete and correct United States
federal and applicable foreign, state and local tax returns required by
applicable Legal Requirements and pay when due (a) all taxes, assessments and
governmental charges or levies imposed upon it or upon its income, profits or
Property prior to the date on which penalties attach thereto, and (b) all lawful
claims which, if unpaid, might by law become a Lien upon its Property; provided,
however, that neither the Borrower nor any such Subsidiary shall be required to
pay or discharge any such tax, assessment, charge, levy, or claim which is being
contested in good faith and by appropriate proceedings, and with respect to
which reserves in conformity with GAAP have been established.

     Section 5.5 Visitation Rights. The Borrower will, and will cause its
Material Subsidiaries to, permit any Administrative Agent or any of its agents
or representatives thereof, and at any time that an Event of Default exists, any
Lender or any of its agents or representatives thereof, to inspect any of the

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Property, books and financial records of the Borrower and each Material
Subsidiary, to examine and make copies of and abstracts from the records and
books of account of the Borrower and each Material Subsidiary, and to discuss
the affairs, finances and accounts of the Borrower and each Material Subsidiary
with, and to be advised as to the same by, any of their respective officers or
directors upon reasonable prior written notice and at such reasonable times and
intervals as may be mutually agreed upon by such Administrative Agent or such
Lender, as applicable, and the Borrower.

     Section 5.6 Reporting Requirements. The Borrower will furnish to the
Administrative Agents and each Lender:

          (a) Quarterly Financials. As soon as available and in any event not
later than 45 days after the end of each quarter of each fiscal year of the
Borrower, (i) to the extent not otherwise provided in the Form 10-Q for such
fiscal quarter end, the unaudited Consolidated balance sheets of Borrower as of
the end of such quarter and the related unaudited statements of income,
shareholders’ equity and cash flows of the Borrower for the period commencing at
the end of the previous year and ending with the end of such quarter, and the
corresponding figures as at the end of, and for, the corresponding period in the
preceding fiscal year, all in reasonable detail and duly certified with respect
to such statements (subject to year-end audit adjustments) by a senior financial
officer of the Borrower as having been prepared in accordance with GAAP,
(ii) the Form 10-Q filed with the SEC for such fiscal quarter end, and (iii) a
Compliance Certificate duly executed by a Responsible Officer;

          (b) Annual Financials. As soon as available and in any event not later
than 90 days after the end of each fiscal year of the Borrower, (i) to the
extent not otherwise provided in the Form 10-K for such fiscal year end, an
unqualified (except for qualifications relating to changes in accounting
principles or practices reflecting changes in generally accepted accounting
principles and required or approved by the Borrower’s independent certified
public accountants) audit report for such year for the Borrower, including
therein audited Consolidated balance sheets of the Borrower and its Consolidated
Subsidiaries as of the end of such fiscal year and the related Consolidated
statements of income, shareholders’ equity and cash flows of the Borrower for
such fiscal year, and the corresponding figures as at the end of, and for, the
preceding fiscal year, and, in the case of such Consolidated financial
statements certified by independent certified public accountants of recognized
standing acceptable to the US Administrative Agent and including any management
letters delivered by such accountants to the Borrower in connection with such
audit together with a certificate of such accounting firm to Administrative
Agents and the Lenders stating that, in the course of the regular audit of the
business of the Borrower, which audit was conducted by such accounting firm in
accordance with generally accepted auditing standards, (ii) the Form 10-K filed
with the SEC for such fiscal year end, and (iii) a Compliance Certificate duly
executed by a Responsible Officer;

          (c) Securities Law Filings. Promptly after the sending or filing
thereof, copies of all proxy material, reports and other information which the
Borrower or any of its Subsidiaries sends to or files with the SEC or sends to
any shareholder of the Borrower or of any of its Subsidiaries;

          (d) Defaults. Promptly after the occurrence of each Default known to a
Responsible Officer of the Borrower or any of its Material Subsidiaries, a
statement of a Responsible Officer of the Borrower setting forth the details of
such Default and the actions which the Borrower has taken and proposes to take
with respect thereto;

          (e) ERISA Notices. Except as to any matter which could not reasonably
be expected to have a Material Adverse Effect, promptly (i) after the Borrower
or any of its Subsidiaries knows or has reason to know that any Termination
Event or Reportable Event has occurred, (ii) after receipt thereof by

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the Borrower or any of its Subsidiaries from the PBGC, copies of each notice
received by the Borrower or any such Subsidiary of the PBGC’s intention to
terminate any Plan or to have a trustee appointed to administer any Plan; and
(iii) after receipt thereof by the Borrower or any of its Subsidiaries from a
Multiemployer Plan sponsor, a copy of each notice received by the Borrower or
any of its Subsidiaries concerning the imposition or amount of withdrawal
liability pursuant to Section 4202 of ERISA;

          (f) Environmental Notices. Promptly upon the knowledge of any
Responsible Officer of the Borrower of receipt thereof by the Borrower or any of
its Subsidiaries, a copy of any form of notice, summons or citation received
from the United States Environmental Protection Agency, or any other
Governmental Authority directly engaged in protection of the Environment,
concerning (i) material violations or alleged violations of Environmental Laws,
which seeks to impose liability therefor and which, based upon information
reasonably available to the Borrower at the time or after such violation, could
reasonably be expected to have a Material Adverse Effect, (ii) any action or
omission on the part of the Borrower or any of its present or former
Subsidiaries in connection with Hazardous Waste or Hazardous Substances which,
based upon information reasonably available to the Borrower at the time of such
receipt, could reasonably be expected to have a Material Adverse Effect,
(iii) any notice of potential responsibility under any Environmental Law which
could reasonably be expected to have a Material Adverse Effect, or (iv) the
filing of a Lien other than a Permitted Lien upon, against or in connection with
the Borrower, its present or former Subsidiaries, or any of their leased or
owned Property, wherever located;

          (g) Other Governmental Notices or Actions. Promptly after receipt
thereof by the Borrower or any of its Subsidiaries, and the knowledge of such
receipt by a Responsible Officer of the Borrower or any inside counsel of the
Borrower, a copy of any written notice, summons, citation, or proceeding from
any Governmental Authority which could reasonably be expected to have a Material
Adverse Effect;

          (h) Material Litigation. Promptly after any Responsible Officer of the
Borrower or any of its Subsidiaries having knowledge thereof, notice of (A) any
pending or threatened litigation, claim or any other action asserting any claim
or claims against the Borrower or any of its Subsidiaries which could reasonably
be expected to have a Material Adverse Effect, (B) the occurrence of any
mandatory prepayment event, default or event of default under the Senior Note
Documents, and (C) any litigation or governmental proceeding of the type
described in Section 4.8;

          (i) Material Changes. Prompt written notice of any condition or event
of which the Borrower or any Subsidiary has knowledge, which condition or event
has resulted or may reasonably be expected to have resulted in a Material
Adverse Effect; and

          (j) Other Information. Such other information respecting the business
or Properties, or the condition or operations, financial or otherwise, of the
Borrower, or any of its Subsidiaries, as any Lender through an Administrative
Agent may from time to time reasonably request.

     Section 5.7 Maintenance of Property. The Borrower will, and will cause each
of its Material Subsidiaries to, do all things necessary to maintain, preserve,
protect and keep its Property in good repair, and make all necessary and proper
repairs, renewals and replacements so that its business carried on in connection
therewith may be properly conducted at all times; provided, however that nothing
in this Section 5.7 shall prevent the Borrower or any of its Subsidiaries from
discontinuing the operation or maintenance of any of such Property if such
discontinuance is, in the judgment of the Borrower or any of its Subsidiaries,
as applicable, desirable in the conduct of their businesses and not materially
disadvantageous to the Lenders.

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     Section 5.8 Use of Proceeds. The Borrower will, and will cause each
Subsidiary to, use the proceeds of the Advances for the purposes set forth under
Section 4.9. The Borrower will not, nor will it permit any Subsidiary to, use
any of the proceeds of the Advances or the Letters of Credit to purchase or
carry any “margin stock” (as defined in Regulation U) in violation of
Regulations T, U or X of the Federal Reserve Board, as the same is from time to
time in effect, and all official rulings and interpretations thereunder or
thereof.

     Section 5.9 Pari Passu. The Obligations under this Agreement and the other
Credit Documents of the Borrower shall rank at least pari passu with and be
equally and ratably secured as the Senior Notes and all other senior unsecured
Indebtedness of the Borrower.

ARTICLE VI
NEGATIVE COVENANTS

     So long as any Obligation shall remain unpaid, any Letter of Credit shall
remain outstanding, or any Lender shall have any Revolving Commitment, the
Borrower agrees, unless the Majority Lenders otherwise consent in writing, to
comply with the following covenants.

     Section 6.1 Liens, Etc. The Borrower will not, or permit any of its
Subsidiaries to, create, assume, incur, or suffer to exist, any Lien of any kind
on or in respect of any Property of the Borrower or any of its Subsidiaries,
whether now owned or hereafter acquired, except for the following (“Permitted
Liens”):

          (a) Liens securing the Obligations arising under this Agreement;

          (b) Liens securing Indebtedness, including Indebtedness permitted
under Section 6.2 hereof, in an aggregate principal amount at any time
outstanding not to exceed 15% of the Borrower’s Consolidated Net Worth;

          (c) Liens arising in the ordinary course of business by operation of
law in connection with workers’ compensation, unemployment insurance, old age
benefits, social security obligations, taxes, assessments, statutory obligations
or other similar charges, good faith deposits, pledges or other Liens in
connection with (or to obtain or support letters of credit in connection with)
bids, performance bonds, contracts or leases to which the Borrower or its
Subsidiaries are a party or other deposits required to be made in the ordinary
course of business; provided, that in each case the obligation secured is not
Indebtedness and is not overdue or, if overdue, is being contested in good faith
by appropriate proceedings and reserves in conformity with GAAP have been
provided therefor;

          (d) mechanics’, workmen, materialmen, landlords’, carriers’ or other
similar Liens arising in the ordinary course of business (or deposits to obtain
the release of such Liens) related to obligations not due or, if due, that are
being contested in good faith by appropriate proceedings and reserves in
conformity with GAAP have been provided therefor;

          (e) Inchoate Liens under ERISA and liens for Taxes not yet due or
which are being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP have been provided therefor;

          (f) Liens arising out of judgments or awards against the Borrower or
any of its Subsidiaries, or in connection with surety or appeal bonds or the
like in connection with bonding such judgments or awards, the time for appeal
from which or petition for rehearing of which shall not have

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expired or for which the Borrower or such Subsidiary shall be prosecuting on
appeal or proceeding for review, and for which it shall have obtained a stay of
execution or the like pending such appeal or proceeding for review, and which
would not constitute an Event of Default;

          (g) [reserved];

          (h) any extension, renewal or replacement (or successive extensions,
renewals or replacements) in whole or in part of any Lien referred to in the
foregoing subsections (b) through (g), provided, however, that the principal
amount of Indebtedness secured thereby does not exceed the principal amount
secured at the time of such extension, renewal or replacement and such
extension, renewal or replacement is limited to the property already subject to
the Lien so extended, renewed or replaced;

          (i) rights reserved to or vested in any municipality or governmental,
statutory or public authority by the terms of any right, power, franchise,
grant, license or permit, or by any provision of law, to terminate such right,
power, franchise, grant, license or permit or to purchase, condemn, expropriate
or recapture or to designate a purchaser of any of the property of a Person;

          (j) rights reserved to or vested in any municipality or governmental,
statutory or public authority to control, regulate or use any property of a
Person;

          (k) rights of a common owner of any interest in property held by a
Person and such common owner as tenants in common or through other common
ownership;

          (l) encumbrances (other than to secure the payment of Indebtedness for
borrowed money), easements, restrictions, servitudes, permits, conditions,
covenants, exceptions or reservations in any property or rights-of-way of a
Person for the purpose of roads, pipelines, transmission lines, transportation
lines, distribution lines, removal of gas, oil, coal, metals, steam, minerals,
timber or other natural resources, and other like purposes, or for the joint or
common use of real property, rights-of-way, facilities or equipment, or defects,
irregularity and deficiencies in title of any property or rights-of-way;

          (m) zoning, planning and Environmental Laws and ordinances and
municipal regulations;

          (n) financing statements filed by lessors of property (but only with
respect to the property so leased) and Liens under any conditional sale or title
retention agreements entered into in the ordinary course of business; and

          (o) rights of lessees of equipment owned by the Borrower or any of its
Subsidiaries.

     Section 6.2 Indebtedness.

          (a) The Borrower will not, and will not permit any of its Subsidiaries
to, incur or permit to exist any Indebtedness, unless the Borrower shall be in
compliance, on a pro forma basis after giving effect to such transactions, with
the covenants contained in this Article VI recomputed as of the last day of the
most recently ended fiscal quarter of the Borrower as if the transaction in
question had occurred on the first day of each relevant period for testing such
compliance.

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          (b) Notwithstanding Section 6.2(a), the aggregate principal amount of
all Indebtedness of Subsidiaries of the Borrower (other than such Indebtedness
owing to the Borrower or to a Subsidiary of the Borrower) shall not exceed 10%
of the Borrower’s Consolidated Net Worth at any time.

     Section 6.3 Amendment of Organizational Documents; Senior Notes. The
Borrower will not, and will not permit any of its Material Subsidiaries to,
amend, modify or change its organizational documents or any agreement entered
into by it related to its capital stock or equivalent ownership interest or
enter into any new agreement related to its capital stock or equivalent
ownership interest, each in any way that would reasonably be expected to
materially and adversely affect any collateral, if applicable, or the
Obligations or the ability of the Borrower to perform its Obligations under any
Credit Document; provided that the Borrower may adopt poison pill provisions in
the exercise of its reasonable business judgment. The Borrower will not, and
will not permit any Subsidiary to, make any amendment or modification to the
Senior Note Documents other than any such amendment, supplement, change or
modification that could not reasonably be expected to be materially adverse to
the Lenders and with respect to which the Borrower has provided to the
Administrative Agents and the Lenders a copy of the amendment promptly after the
effective date or the date such amendment is executed, if later.

     Section 6.4 Limitation on Certain Restrictions. The Borrower will not, nor
will it permit any of its Material Subsidiaries to, directly or indirectly,
create or otherwise permit to exist or become effective any restriction on the
ability of any of their Subsidiaries to (i) pay dividends or make any other
distributions on its capital stock, or any other interest or participation in
its profits, owned by the Borrower or pay any Indebtedness owed to the Borrower,
or (ii) make loans or advances to the Borrower or any of its Subsidiaries,
except in either case for restrictions existing under or by reason of any
applicable Legal Requirement, this Agreement and the other Credit Documents or
in the Senior Note Documents and except for any restrictions existing in
connection with any Subsidiary acquired by the Borrower after the Effective
Date, in which case the Borrower shall either promptly cause the removal or
release of any such restrictions or not advance the proceeds of any Borrowing to
such Subsidiary even if otherwise permitted by this Agreement. The Borrower and
its Subsidiaries shall not enter into any agreement other than this Agreement,
the Credit Documents and the Senior Note Documents prohibiting the creation or
assumption of any Lien upon its properties, revenues or assets, whether now
owned or hereafter acquired (except in connection with any Permitted Liens
provided that restriction is limited to the property already subject to the
Lien), or prohibiting or restricting the ability of the Borrower to amend or
otherwise modify this Agreement or any Credit Document.

     Section 6.5 Merger, Consolidation or Acquisition; Asset Sales.

          (a) The Borrower will not, and will not permit any Subsidiary of the
Borrower to, enter into any Acquisition unless (i) on a pro forma basis, the
Borrower is in compliance with Sections 6.10 and 6.11 after giving effect to
such Acquisition; and (ii) no Default or Event of Event shall have occurred and
be continuing before and after giving effect to such Acquisition.

          (b) The Borrower will not, and will not permit any Subsidiary of the
Borrower to, directly or indirectly, merge or consolidate with any Person (as a
result of an Acquisition or otherwise) unless (i) if the Borrower is being
merged or consolidated, the Borrower is the surviving entity, (ii) on a pro
forma basis, the Borrower is in compliance with Sections 6.10 and 6.11 after
giving effect to such merger or consolidation; and (iii) no Default or Event of
Event shall have occurred and be continuing before and after giving effect to
such merger or consolidation.

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          (c) The Borrower and its Subsidiaries, taken as a whole, shall not
sell, transfer or otherwise dispose of (in one transaction or a series of
transactions) all or substantially all of the Borrower’s and its Subsidiaries’
assets (determined on a Consolidated basis).

     Section 6.6 Restricted Payments. The Borrower will not, and will not permit
any of its Material Subsidiaries to, make any Restricted Payment, except that
(a) a Subsidiary of the Borrower may make a Restricted Payment to the Borrower
or to another Subsidiary of the Borrower, (b) a Subsidiary of the Borrower may
redeem any of its stock held by the Borrower or any Subsidiary of the Borrower,
and (c) the Borrower and its Material Subsidiaries may make any other Restricted
Payment if no Default has occurred and is continuing or would result therefrom.

     Section 6.7 Investments, Loans, Advances. The Borrower will not, and will
not permit any of its Subsidiaries to, make or permit to exist any loans,
advances or capital contributions to, or make any investment in, or purchase or
commit to purchase any stock or other securities or evidences of Indebtedness of
or interests in any Person, except the following:

          (a) Liquid Investments;

          (b) receivables owing to the Borrower or its Subsidiaries created or
acquired in the ordinary course of business and payable on customary trade terms
of the Borrower or such Subsidiary and in compliance with the arm’s-length
requirements of Section 6.8;

          (c) Investments received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers arising in the
ordinary course of business;

          (d) Hedging Transactions entered into in compliance with Section 6.2;

          (e) deposits made in the ordinary course of business consistent with
past practices to secure the performance of leases;

          (f) unsecured intercompany loans, advances and capital contributions
from the Borrower to any of its Subsidiaries, from any of its Subsidiaries to
the Borrower or any other such Subsidiaries except as expressly restricted
hereunder;

          (g) normal and reasonable advances in the ordinary course of business
to its officers and employees;

          (h) joint ventures between any foreign Subsidiary of the Borrower and
any other Person;

          (i) the purchase of stock in, or an investment by a foreign Subsidiary
of the Borrower in, an insurance company for the purpose of obtaining credit and
political risk insurance for export sales;

          (j) the purchase or acquisition of stock in the Borrower for a Code
Section 401(k) plan, Code Section 423 plan or Plan of the Borrower or any of its
Subsidiaries;

          (k) as permitted by Sections 6.5 and 6.6; and

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          (l) other Investments not to exceed in the aggregate 10% of the
Borrower’s Consolidated Net Worth at any time.

     Section 6.8 Affiliate Transactions. The Borrower will not, and will not
permit any of its Subsidiaries to, make, directly or indirectly: (a) any
transfer, sale, lease, assignment or other disposal of any assets to any
Affiliate of the Borrower or any purchase or acquisition of assets from any such
Affiliate; or (b) any arrangement or other transaction directly or indirectly
with or for the benefit of any such Affiliate (including guaranties and
assumptions of obligations of an Affiliate); provided that the Borrower and its
Subsidiaries (i) may enter into any arrangement or other transaction with any
such Affiliate providing for the leasing of property, the rendering or receipt
of services or the purchase or sale of inventory and other assets in the
ordinary course of business if the monetary or business consideration arising
therefrom would be substantially as advantageous to the Borrower and its
Subsidiaries as the monetary or business consideration which it would obtain in
a comparable arm’s length transaction with a Person not such an Affiliate, and
(ii) the Borrower and any of its Subsidiaries may guaranty or otherwise assume
obligations of an Affiliate to the extent permitted under Section 6.2 hereof.

     Section 6.9 Other Businesses. The Borrower will not, and will not permit
any of its Subsidiaries to, engage in any line of business other than the
business in which the Borrower and its Subsidiaries, taken as a whole, is
presently engaged (a “Permitted Business”).

     Section 6.10 Maximum Leverage Ratio. The Borrower will not permit its
Leverage Ratio to be greater than 0.50 to 1.0 at the end of any fiscal quarter.

     Section 6.11 Minimum Interest Charge Coverage Ratio. The Borrower shall not
permit, as of the end of any fiscal quarter, permit the Interest Charge Coverage
Ratio to be less than 3.00 to 1.00.

ARTICLE VII
REMEDIES

     Section 7.1 Events of Default. The occurrence of any of the following
events shall constitute an “Event of Default” under any Credit Document:

          (a) Payment. The Borrower shall fail to pay any principal of any
Advance or any Reimbursement Obligation when the same becomes due and payable as
set forth in this Agreement, or any interest on any Note or any fee or other
amount payable hereunder or under any other Credit Document within five Business
Days after the same becomes due and payable;

          (b) Representation and Warranties. Any representation or warranty made
or deemed to be made (i) by the Borrower in this Agreement or in any other
Credit Document, or (ii) by the Borrower (or any of its officers) in connection
with this Agreement or any other Credit Document, shall prove to have been
incorrect in any material respect when made or deemed to be made;

          (c) Covenant Breaches. (i) The Borrower shall fail to perform or
observe any covenant contained in Sections 5.3 or 5.6, or Article VI of this
Agreement, or (ii) the Borrower shall fail to perform or observe any term or
covenant set forth in any Credit Document which is not covered by clause
(i) above or any other provision of this Section 7.1 if such failure shall
remain unremedied for 30 days after the earlier of the date written notice of
such default shall have been given to the Borrower by any Administrative Agent
or any Lender or the date a Responsible Officer of the Borrower has actual
knowledge of such default;

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          (d) Cross-Defaults. (i) The Borrower or any its Subsidiaries shall
fail to pay any principal of or premium or interest on its Indebtedness which is
outstanding in a principal amount of at least $50,000,000 individually or when
aggregated with all such Indebtedness of the Borrower or its Subsidiaries so in
default (but excluding the Obligations) when the same becomes due and payable
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the applicable grace period,
if any, specified in the agreement or instrument relating to such Indebtedness;
(ii) any other event shall occur or condition shall exist under any agreement or
instrument relating to Indebtedness which is outstanding in a principal amount
of at least $50,000,000 individually or when aggregated with all such
Indebtedness of the Borrower and its Subsidiaries so in default, and shall
continue after the applicable grace period, if any, specified in such agreement
or instrument, if the effect of such event or condition is to accelerate, or to
permit the acceleration of, the maturity of such Indebtedness; or (iii) any such
Indebtedness shall be declared to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment), prior to the stated
maturity thereof; provided that, for purposes of this subsection 7.1(d), the
“principal amount” of the obligations in respect of any Financial Contract at
any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that would be required to be paid if such Financial Contract were
terminated at such time;

          (e) Insolvency. The Borrower or any of its Subsidiaries shall
generally not pay its debts as such debts become due, or shall admit in writing
its inability to pay its debts generally, or shall make a general assignment for
the benefit of creditors; or any proceeding shall be instituted by or against
the Borrower or any of its Subsidiaries seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any
Legal Requirements relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee or other similar official for it or for any
substantial part of its property and, in the case of any such proceeding
instituted against the Borrower or any such Subsidiary, either such proceeding
shall remain undismissed for a period of 30 days or any of the actions sought in
such proceeding shall occur; or the Borrower or any of its Subsidiaries shall
take any corporate action to authorize any of the actions set forth above in
this paragraph (e);

          (f) Judgments. Any one or more judgments or orders for the payment of
money in excess of $50,000,000 in the aggregate (reduced for purposes of this
paragraph for the amount in respect of any such judgment or order that a
reputable and creditworthy insurer has acknowledged being payable under any
valid and enforceable insurance policy) shall be rendered against the Borrower
or any of its Subsidiaries which, within 30 days from the date any such judgment
is entered, shall not have been discharged or execution thereof stayed pending
appeal;

          (g) ERISA. (i) Any Person shall engage in any “prohibited transaction”
(as defined in Section 406 of ERISA or Section 1106 of the Code) involving any
Plan, (ii) any “accumulated funding deficiency” (as defined in Section 302 of
ERISA), whether or not waived, shall exist with respect to any Plan, (iii) a
Reportable Event shall occur with respect to, or proceedings shall commence to
have a trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is likely to result in the termination of such Plan for
purposes of Title IV of ERISA, unless such Reportable Event, proceedings or
appointment are being contested by the Borrower in good faith and by appropriate
proceedings, (iv) any Plan shall terminate for purposes of Title IV of ERISA,
(v) the Borrower or any member of the Controlled Group shall incur any liability
in connection with a withdrawal from a Multiemployer Plan or the insolvency
(within the meaning of Section 4245 of ERISA) or reorganization (within the
meaning of Section 4241 of ERISA) of a Multiemployer Plan, unless such liability
is being contested by the Borrower in good faith

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and by appropriate proceedings, or (vi) any other event or condition shall occur
or exist, with respect to a Plan; and in each case in clauses (i) through
(vi) above, such event or condition, together with all other such events or
conditions, if any, could subject the Borrower to any tax, penalty or other
liabilities in the aggregate exceeding $50,000,000; and

          (h) Change of Control. Any Change in Control shall occur.

     Section 7.2 Optional Acceleration of Maturity. If any Event of Default
(other than an Event of Default pursuant to paragraph (e) of Section 7.1) shall
have occurred and be continuing, then, and in any such event,

          (a) the Administrative Agents (i) shall at the request, or may with
the consent, of the Majority Lenders, by notice to the Borrower, declare the
obligation of each Lender to make Advances and the obligation of each Issuing
Lender to issue, increase, or extend Letters of Credit to be terminated,
whereupon the same shall forthwith terminate, and (ii) shall at the request, or
may with the consent, of the Majority Lenders, by notice to the Borrower,
declare all Obligations, including all interest, Letter of Credit Obligations,
and all other amounts payable under this Agreement, to be forthwith due and
payable, whereupon all such Obligations shall become and be forthwith due and
payable in full, without presentment, demand, protest or further notice of any
kind (including any notice of intent to accelerate or notice of acceleration),
all of which are hereby expressly waived by the Borrower,

          (b) the Borrower shall, on demand of by the US Administrative Agent at
the request or with the consent of the Majority Lenders under the Primary
Facility, deposit with the US Administrative Agent into the Cash Collateral
Account held with the US Administrative Agent an amount of cash equal to the
Primary Letter of Credit Exposure as security for the Obligations to the extent
the Primary Letter of Credit Obligations are not otherwise paid at such time,
and

          (c) the Borrower shall, on demand of by the Norwegian Administrative
Agent at the request or with the consent of the Majority Lenders under the
Norwegian Facility, deposit with the Norwegian Administrative Agent into the
Cash Collateral Account held with the Norwegian Administrative Agent an amount
of cash equal to the Norwegian Letter of Credit Exposure as security for the
Obligations to the extent the Norwegian Letter of Credit Obligations are not
otherwise paid at such time.

     Section 7.3 Automatic Acceleration of Maturity. If any Event of Default
pursuant to paragraph (e) of Section 7.1 shall occur,

          (a) the obligation of each Lender to make Advances and the obligation
of each Issuing Lender to issue, increase, or extend Letters of Credit shall
immediately and automatically be terminated and all Obligations, including all
interest, Letter of Credit Obligations, and all other amounts payable under this
Agreement shall immediately and automatically become and be due and payable in
full, without presentment, demand, protest or any notice of any kind (including
any notice of intent to accelerate or notice of acceleration), all of which are
hereby expressly waived by the Borrower;

          (b) to the extent permitted by law or court order, the Borrower shall
deposit with the US Administrative Agent into the Cash Collateral Account held
by the US Administrative Agent an amount of cash equal to the outstanding
Primary Letter of Credit Exposure as security for the Obligations to the extent
the Primary Letter of Credit Obligations are not otherwise paid at such time;
and

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          (c) to the extent permitted by law or court order, the Borrower shall
deposit with the Norwegian Administrative Agent into the Cash Collateral Account
held by the Norwegian Administrative Agent an amount of cash equal to the
outstanding Norwegian Letter of Credit Exposure as security for the Obligations
to the extent the Norwegian Letter of Credit Obligations are not otherwise paid
at such time.

     Section 7.4 Cash Collateral Account.

          (a) Pledge. The Borrower hereby pledges, and grants to the US
Administrative Agent for the benefit of the Primary Lenders, a security interest
in all funds held in the Cash Collateral Account held by the US Administrative
Agent from time to time and all proceeds thereof, as security for the payment of
the Obligations, including all Primary Letter of Credit Obligations owing to any
Primary Issuing Lender or any other Primary Lender due and to become due from
the Borrower to any Primary Issuing Lender or any other Primary Lender under
this Agreement in connection with the Primary Letters of Credit. The Borrower
hereby pledges, and grants to the Norwegian Administrative Agent for the benefit
of the Norwegian Lenders, a security interest in all funds held in the Cash
Collateral Account held by the Norwegian Administrative Agent from time to time
and all proceeds thereof, as security for the payment of the Obligations,
including all Norwegian Letter of Credit Obligations owing to the Norwegian
Issuing Lender or any other Norwegian Lender due and to become due from the
Borrower to the Norwegian Issuing Lender or any other Norwegian Lender under
this Agreement in connection with the Norwegian Letters of Credit.

          (b) Application against Letter of Credit Obligations. The US
Administrative Agent may, at any time or from time to time apply funds then held
in the applicable Cash Collateral Account to the payment of any Letter of Credit
Obligations owing to the Primary Issuing Lenders on a pro rata basis, as shall
have become or shall become due and payable by the Borrower to such Issuing
Lenders under this Agreement in connection with the Primary Letters of Credit.
The Norwegian Administrative Agent may, at any time or from time to time apply
funds then held in the applicable Cash Collateral Account to the payment of any
Letter of Credit Obligations owing to the Norwegian Issuing Lender, as shall
have become or shall become due and payable by the Borrower to such Issuing
Lender under this Agreement in connection with the Norwegian Letters of Credit.

          (c) Duty of Care. The US Administrative Agent shall exercise
reasonable care in the custody and preservation of any funds held in the Cash
Collateral Account and shall be deemed to have exercised such care if such funds
are accorded treatment substantially equivalent to that which the US
Administrative Agent accords its own property, it being understood that the US
Administrative Agent shall not have any responsibility for taking any necessary
steps to preserve rights against any parties with respect to any such funds.

     Section 7.5 Non-exclusivity of Remedies. No remedy conferred upon the
Administrative Agents or the Lenders is intended to be exclusive of any other
remedy, and each remedy shall be cumulative of all other remedies existing by
contract, at law, in equity, by statute or otherwise.

     Section 7.6 Right of Set-off. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent, if any, specified by Section 7.2 to authorize the
Administrative Agents to declare the Obligations due and payable pursuant to the
provisions of Section 7.2 or the automatic acceleration of the Obligations
pursuant to Section 7.3, each Lender is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other Indebtedness at any time owing by such Lender to or for
the credit or the account of the Borrower against any and all of the obligations
of the Borrower now or hereafter existing under this

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Agreement, the Note held by such Lender, and the other Credit Documents,
irrespective of whether or not such Lender shall have made any demand under this
Agreement, such Note, or such other Credit Documents, and although such
obligations may be unmatured. Each Lender agrees to promptly notify the Borrower
and the Administrative Agents after any such set-off and application made by
such Lender, provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender under this
Section are in addition to any other rights and remedies (including other rights
of set-off) which such Lender may have.

     Section 7.7 Currency Conversion After Maturity. At any time following the
occurrence of an Event of Default and the acceleration of the maturity of the
Obligations owed to the Lenders hereunder, the Lenders shall be entitled to
convert, with two (2) Business Days’ prior notice to the Borrower, any and all
or any part of the then unpaid and outstanding Advances denominated in a Foreign
Currency into Advances denominated in Dollars. Any such conversion shall be
calculated so that the principal amount of the resulting Advances shall be the
Dollar Amount of the principal amount of the Advance being converted on the date
of conversion. Any accrued and unpaid interest denominated in such Foreign
Currency at the time of any such conversion shall be similarly converted to
Dollars, and such converted Advances and accrued and unpaid interest thereon
shall thereafter bear interest in accordance with the terms hereof.

ARTICLE VIII
AGENCY AND ISSUING LENDER PROVISIONS

     Section 8.1 Authorization and Action. Each Lender hereby appoints and
authorizes the Administrative Agents to take such action as agent on its behalf
and to exercise such powers under this Agreement and the other Credit Documents
as are delegated to the Administrative Agents by the terms hereof and of the
other Credit Documents, together with such powers as are reasonably incidental
thereto. As to any matters not expressly provided for by this Agreement or any
other Credit Document (including enforcement or collection of the Obligations),
no Administrative Agent shall be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Majority Lenders, and such instructions shall be binding upon all Lenders
and all holders of the Obligations; provided, however, that no Administrative
Agent shall be required to take any action which exposes such Administrative
Agent to personal liability or which is contrary to this Agreement, any other
Credit Document, or applicable Legal Requirements.

     Section 8.2 Administrative Agent’s Reliance, Etc. Neither Administrative
Agent nor any of its respective directors, officers, agents or employees shall
be liable for any action taken or omitted to be taken (INCLUDING SUCH
ADMINISTRATIVE AGENT’S OWN NEGLIGENCE) by it or them under or in connection with
this Agreement or the other Credit Documents, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, each Administrative Agent: (a) may treat the payee of any Note as the
holder thereof until such Administrative Agent receives written notice of the
assignment or transfer thereof signed by such payee and in form satisfactory to
such Administrative Agent; (b) may consult with legal counsel (including counsel
for the Borrower), independent public accountants and other experts selected by
it and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts; (c) makes no warranty or representation to any Lender and shall not be
responsible to any Lender for any statements, warranties or representations made
in or in connection with this Agreement or the other Credit Documents; (d) shall
not have any duty to ascertain or to inquire as to the performance or observance
of any of the terms, covenants or conditions of this Agreement or any other
Credit Document on the part of the Borrower or its Subsidiaries or to inspect
the property (including the books and records) of the Borrower or its
Subsidiaries; (e) shall not be responsible to any Lender for

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the due execution, legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement or any other Credit Document; and (f) shall incur no
liability under or in respect of this Agreement or any other Credit Document by
acting upon any notice, consent, certificate or other instrument or writing
(which may be by telecopier, telegram, cable or telex) believed by it to be
genuine and signed or sent by the proper party or parties.

     Section 8.3 The Administrative Agents and Their Respective Affiliates. With
respect to its Revolving Commitment, the Advances made by it and the Letters of
Credit issued by it, each Administrative Agent shall have the same rights and
powers under this Agreement as any other Lender and may exercise the same as
though it were not an agent hereunder. The term “Lender” or “Lenders” shall,
unless otherwise expressly indicated, include each Administrative Agent in its
individual capacity. Each Administrative Agent and its respective Affiliates may
accept deposits from, lend money to, act as trustee under indentures of, and
generally engage in any kind of business with, the Borrower or any of its
Subsidiaries, and any Person who may do business with or own securities of the
Borrower or any such Subsidiary, all as if such Administrative Agent were not an
agent hereunder and without any duty to account therefor to the Lenders.

     Section 8.4 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agents, the Arranger
or any other Lender and based on the financial statements referred to in
Section 4.6 and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agents, the Arranger or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement.

     Section 8.5 Indemnification. The Lenders severally agree to indemnify each
Administrative Agent, the Arranger and each Issuing Lender (to the extent not
reimbursed by the Borrower), according to their respective Applicable Pro Rata
Shares from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by, or asserted
against such Administrative Agent, the Arranger or such Issuing Lender in any
way relating to or arising out of this Agreement or any action taken or omitted
by such Administrative Agent, the Arranger or such Issuing Lender under this
Agreement or any other Credit Document (INCLUDING SUCH ADMINISTRATIVE AGENT’S,
THE ARRANGER’S OR SUCH ISSUING LENDER’S OWN NEGLIGENCE), provided that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from such Administrative Agent’s, the Arranger’s or such Issuing
Lender’s gross negligence or willful misconduct. Without limitation of the
foregoing, each Lender agrees to (a) reimburse the US Administrative Agent
promptly upon demand for its ratable share of any out-of-pocket expenses
(including counsel fees) incurred by the US Administrative Agent in connection
with the preparation, execution, delivery, modification or amendment of this
Agreement or any other Credit Document, to the extent that the US Administrative
Agent is not reimbursed for such expenses by the Borrower and (b) reimburse the
Administrative Agents promptly upon demand for its ratable share of any
out-of-pocket expenses (including counsel fees) incurred by such Administrative
Agent in connection with the administration or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement or any other Credit Document,
to the extent that such Administrative Agent is not reimbursed for such expenses
by the Borrower.

     Section 8.6 Successor Administrative Agents and Issuing Lenders. Either
Administrative Agent and any Issuing Lender may resign at any time by giving
written notice thereof to the applicable Lenders, the other Administrative
Agent, and the Borrower and may be removed at any time with or

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without cause by the Majority Lenders (with respect to the Primary Facility if
removing the US Administrative Agent or a Primary Issuing Lender, and with
respect to the Norwegian Facility if removing the Norwegian Administrative Agent
or the Norwegian Issuing Lender) upon receipt of written notice from such
Majority Lenders to such effect. Upon receipt of notice of any such resignation
or removal, the Majority Lenders (as to each respective Facility) shall have the
right to appoint a successor Administrative Agent or Issuing Lender with, if an
Event of Default has not occurred and is not continuing, the consent of the
Borrower, which consent shall not be unreasonably withheld or delayed. If no
successor Administrative Agent or Issuing Lender shall have been so appointed,
and shall have accepted such appointment, within 30 days after the retiring
Administrative Agent’s or Issuing Lender’s giving of notice of resignation or
the Majority Lenders’ removal of the retiring Administrative Agent or Issuing
Lender, then the retiring Administrative Agent or Issuing Lender may, on behalf
of the Lenders and the Borrower, appoint a successor Administrative Agent or
Issuing Lender, which shall be a commercial bank meeting the financial
requirements of an Eligible Assignee and, in the case of a Primary Issuing
Lender, a Primary Lender and in case of the Norwegian Issuing Lender, a
Norwegian Lender. Upon the acceptance of any appointment as Administrative Agent
or Issuing Lender by a successor Administrative Agent or Issuing Lender, such
successor Administrative Agent or Issuing Lender shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent or Issuing Lender, and the retiring Administrative Agent or
Issuing Lender shall be discharged from its duties and obligations under this
Agreement and the other Credit Documents, except that the retiring Issuing
Lender shall remain the Issuing Lender with respect to any Letters of Credit
issued by such Issuing Lender and outstanding on the effective date of its
resignation or removal and the provisions affecting such Issuing Lender with
respect to such Letters of Credit shall inure to the benefit of the retiring
Issuing Lender until the termination of all such Letters of Credit and the
payment of all outstanding Obligations owing to such Issuing Lender. After any
retiring Administrative Agent’s or Issuing Lender’s resignation or removal
hereunder as Administrative Agent or Issuing Lender, the provisions of this
Article VIII shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent or Issuing Lender under this
Agreement and the other Credit Documents.

     Section 8.7 Syndication Agent; Documentation Agent. The Co-Syndication
Agents and the Co-Documentation Agents shall have no duties, obligations or
liabilities in its capacity as a Co-Syndication Agent or Co-Documentation Agent,
as applicable. The Lenders shall have no right to replace any such agent if any
such agent is no longer a Lender, and the Co-Syndication Agents and the
Co-Documentation Agents shall not have the right to assign its status as a
Co-Syndication Agent or Co-Documentation Agent, as applicable, to any Person.

ARTICLE IX
MISCELLANEOUS

     Section 9.1 Amendments, Etc. No amendment or waiver of any provision of
this Agreement, the Notes, or any other Credit Document, nor consent to any
departure by the Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Majority Lenders and the Borrower,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, however,

          (a) no amendment shall increase or extend the Norwegian Commitment or
Primary Commitment of any Lender without the written consent of such Lender;

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          (b) no amendment shall amend the definitions of “Eligible Currency” or
“Agreed Currency” (other than as contemplated within such definition) without
the written consent of each Primary Lender and each Primary Issuing Lender;

          (c) no amendment, waiver or consent shall, unless in writing and
signed by all the Lenders, do any of the following: (i) except as provided in
Section 2.15, increase or extend the aggregate Revolving Commitments of the
Lenders, (ii) reduce the principal of, or interest on, the Obligations or any
fees or other amounts payable hereunder or under any other Credit Document,
(iii) postpone any date fixed for any payment of principal of, or interest on,
the Obligations or any fees or other amounts payable hereunder, (iv) amend
Section 2.14 or this Section 9.1 or any other provision of this Agreement that
requires the pro rata treatment of, or action by, all the Lenders, (v) release
any Lien in favor of an Administrative Agent for the benefit of the Lenders on
Property of the Borrower, or (vi) amend the definition of “Majority Lenders”;

          (d) no amendment, waiver or consent shall, unless in writing and
signed by the applicable Administrative Agent, the Arranger or the applicable
Issuing Lender in addition to the Lenders required above to take such action,
affect the rights or duties of such Administrative Agent, the Arranger or such
Issuing Lender, as the case may be, under this Agreement or any other Credit
Document, and

          (e) no waiver or consent to departure from any of the conditions
specified in Section 3.1 or 3.2 shall be effective unless in writing and signed
by the Majority Lenders and the US Administrative Agent.

     Section 9.2 Notices, Intralinks, Etc.

          (a) Notices. All notices and other communications shall be in writing
(including telecopy or telex) and mailed, telecopied, telexed, hand delivered or
delivered by a nationally recognized overnight courier, if to the Borrower, at
its address at 10000 Richmond Avenue, Houston, Texas 77042, Attention:
Treasurer, with a copy to the General Counsel, Telecopy: (713) 346-7995,
Telephone: (713) 346-7550; if to any Lender at its address for notices specified
opposite its name on Schedule 9.2; if to the US Administrative Agent (including
the delivery of a Compliance Certificate), at its address at 1740 Broadway,
C7300-034, Denver, Colorado 80274, Attention: Agency Syndication (telecopy:
(303) 863-5531; telephone: (303) 863-6637), with a copy to 1000 Louisiana
Street, 3rd Floor, Houston, Texas 77002, Attention: Relationship Manager
(telecopy: (713) 739-1087; telephone: (713) 319-1350); if to the Norwegian
Administrative Agent, at its address at 0021 Oslo, Norway Attention: Turid Berg
(telecopy: (+47 22949270); telephone: (+47 22473659); if a Notice of Borrowing
or a Notice of Conversion or Continuation to the US Administrative Agent at the
Domestic Lending Office for the US Administrative Agent specified opposite its
name on Schedule 9.2; if a Notice of Borrowing or a Notice of Conversion or
Continuation to the Norwegian Administrative Agent at the address designated for
such notices specified opposite its name on Schedule 9.2 or, as to each party,
at such other address or teletransmission number as shall be designated by such
party in a written notice to the other parties. All such notices and
communications shall, when mailed, telecopied, telexed or hand delivered or
delivered by overnight courier, be effective three days after deposited in the
mails, when telecopy transmission is completed, when confirmed by telex
answer-back or when delivered, respectively, except that notices and
communications to an Administrative Agent pursuant to Article II or VIII shall
not be effective until received by such Administrative Agent.

          (b) Electronic Postings. (i) The Borrower agrees that the
Administrative Agents may make any material delivered by the Borrower to the
Administrative Agents, as well as any amendments, waivers, consents, and other
written information, documents, instruments and other materials relating to

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the Borrower, any of its Subsidiaries, or any other materials or matters
relating to this Agreement, the Notes or any of the transactions contemplated
hereby (excluding notices pursuant to Article II, collectively, the
“Communications”) available to the Lenders by posting such notices on an
electronic delivery system (which may be provided by an Administrative Agent, an
Affiliate of an Administrative Agent, or any Person that is not an Affiliate of
an Administrative Agent), such as IntraLinks, or a substantially similar
electronic system customarily used by financial institutions for such purposes
(the “Platform”). The Borrower acknowledges that (A) the distribution of
material through an electronic medium is not necessarily secure and that there
are confidentiality and other risks associated with such distribution, (B) the
Platform is provided “as is” and “as available” and (C) neither the
Administrative Agents nor any of their respective Affiliates warrants the
accuracy, completeness, timeliness, sufficiency, or sequencing of the
Communications posted on the Platform. The Administrative Agents and their
respective Affiliates expressly disclaim with respect to the Platform any
liability for errors in transmission, incorrect or incomplete downloading,
delays in posting or delivery, or problems accessing the Communications posted
on the Platform and any liability for any losses, costs, expenses or liabilities
that may be suffered or incurred in connection with the Platform. No warranty of
any kind, express, implied or statutory, including any warranty of
merchantability, fitness for a particular purpose, non-infringement of third
party rights or freedom from viruses or other code defects, is made by any
Administrative Agent or any of its respective Affiliates in connection with the
Platform.

     (ii) Each Lender agrees that notice to it (as provided in the next
sentence) (a “Notice”) specifying that any Communication has been posted to the
Platform shall for purposes of this Agreement constitute effective delivery to
such Lender of such information, documents or other materials comprising such
Communication. Each Lender agrees (A) to notify, on or before the date such
Lender becomes a party to this Agreement, the Administrative Agents in writing
of such Lender’s e-mail address to which a Notice may be sent (and from time to
time thereafter to ensure that the Administrative Agents have on record an
effective e-mail address for such Lender) and (B) that any Notice may be sent to
such e-mail address.

     Section 9.3 No Waiver; Remedies. No failure on the part of any Lender, any
Administrative Agent, or any Issuing Lender to exercise, and no delay in
exercising, any right hereunder or under any other Credit Document shall operate
as a waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies provided in this Agreement and the other Credit Documents
are cumulative and not exclusive of any remedies provided by law.

     Section 9.4 Costs and Expenses. The Borrower agrees to pay on demand all
out-of-pocket costs and expenses of the US Administrative Agent in connection
with the preparation, execution, delivery, administration, modification and
amendment of this Agreement, the Notes and the other Credit Documents including
(a) all reasonable out-of-pocket costs and expenses, if any, of the US
Administrative Agent, the Arranger, each Issuing Lender, and each Lender
(including reasonable counsel fees and expenses of the US Administrative Agent,
the Arranger, each Issuing Lender, and each Lender) in connection with the
enforcement (whether through negotiations, legal proceedings or otherwise) of
this Agreement and the other Credit Documents after an Event of Default has
occurred and is continuing, and (b) to the extent not included in the foregoing,
the costs of any Uniform Commercial Code financing statement or continuation
statement, and any related title or Uniform Commercial Code search conducted
subsequent to such recordation, and other costs usual and customary in
connection with the taking of a Lien.

     Section 9.5 Binding Effect. This Agreement shall become effective when it
shall have been executed by the Borrower and the Administrative Agents, and when
the US Administrative Agent shall have, as to each Lender, either received a
counterpart hereof executed by such Lender or been notified by

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such Lender that such Lender has executed it and thereafter shall be binding
upon and inure to the benefit of the Borrower, the Administrative Agents, the
Arranger, each Issuing Lender, and each Lender and their respective successors
and assigns, except that the Borrower shall not have the right to assign its
rights or delegate its duties under this Agreement or any interest in this
Agreement without the prior written consent of each Lender.

     Section 9.6 Lender Assignments and Participations.

          (a) Assignments. Any Lender may assign to one or more banks or other
entities all or any portion of its rights and obligations under this Agreement
(including all or a portion of its Norwegian Commitment and Primary Commitment,
if any, the Advances owing to it, the Notes held by it, if any, and the
participation interest in the Letter of Credit Obligations held by it);
provided, however, that (i) each such assignment under the Norwegian Facility
shall be of a constant, and not a varying, percentage of all of such Lender’s
rights and obligations under this Agreement as a Norwegian Lender and shall
involve a ratable assignment of such Lender’s Norwegian Commitment and such
Lender’s Norwegian Advances, (ii) each such assignment under the Primary
Facility shall be of a constant, and not a varying, percentage of all of such
Lender’s rights and obligations under this Agreement as a Primary Lender and
shall involve a ratable assignment of such Lender’s Primary Commitment and such
Lender’s Primary Advances, (iii) the amount of the resulting Revolving
Commitment and Revolving Advances of the assigning Lender (unless it is
assigning all its Revolving Commitment) and the assignee Lender pursuant to each
such assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $10,000,000,
(iv) each such assignment shall be to an Eligible Assignee, (v) the parties to
each such assignment shall execute and deliver to the applicable Administrative
Agent, for its acceptance and recording in the Register, an Assignment and
Acceptance, together with the applicable Notes, if any, subject to such
assignment, (vi) each Eligible Assignee shall pay to the applicable
Administrative Agent a $4,000 administrative fee; and (vii) the Norwegian
Administrative Agent shall promptly deliver a copy of the fully executed
Assignment and Acceptance to the US Administrative Agent. Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall be at least three
Business Days after the execution thereof, (A) the assignee thereunder shall be
a party hereto for all purposes and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder and (B) such Lender
thereunder shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
and be released from its obligations under this Agreement (and, in the case of
an Assignment and Acceptance covering all or the remaining portion of such
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto). Notwithstanding anything herein to the contrary, any Lender
may assign, as collateral or otherwise, any of its rights under the Credit
Documents to any Federal Reserve Lender.

          (b) Term of Assignments. By executing and delivering an Assignment and
Acceptance, the Lender thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under this
Agreement or any other instrument or document furnished pursuant hereto;
(iii) such assignee confirms that it has received a copy of this Agreement,
together with copies of the financial statements referred to in Section 4.6 and
such other documents and

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information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Administrative Agents, such Lender
or any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee appoints and
authorizes the Administrative Agents to take such action as agent on its behalf
and to exercise such powers under this Agreement as are delegated to the
Administrative Agents by the terms hereof, together with such powers as are
reasonably incidental thereto; and (vi) such assignee agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of this Agreement are required to be performed by it as a Lender.

          (c) The Register. The Administrative Agents shall maintain at its
respective address referred to in Section 9.2 a copy of each Assignment and
Acceptance delivered to and accepted by it and a register for the recordation of
the names and addresses of the respective Lenders and the Norwegian Commitment
and Primary Commitment, if any, of, and principal amount of the Advances owing
to, each Lender from time to time (the “Register”). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Administrative Agents, the Issuing Lenders, and the Lenders may
treat each Person whose name is recorded in the Register as a Lender hereunder
for all purposes of this Agreement. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.

          (d) Procedures. Upon its receipt of an Assignment and Acceptance
executed by a Lender and an Eligible Assignee, together with the Notes, if any,
subject to such assignment, the applicable Administrative Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the form of
the attached Exhibit A, (i) accept such Assignment and Acceptance, (ii) record
the information contained therein in the Register, and (iii) give prompt notice
thereof to the Borrower.

          (e) Participations. Each Lender may sell participations to one or more
banks or other entities in or to all or a portion of its rights and obligations
under this Agreement (including all or a portion of its Revolving Commitment,
the Advances owing to it, its participation interest in the Letter of Credit
Obligations, and the Notes held by it, if any); provided, however, that (i) such
Lender’s obligations under this Agreement (including its Revolving Commitment to
the Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender shall remain the holder of any such Obligations
for all purposes of this Agreement, (iv) the Borrower, the Administrative
Agents, and the Issuing Lenders and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement, (v) such Lender shall not require the
participant’s consent to any matter under this Agreement, except for change in
the principal amount of any Obligation in which the participant has an interest,
reductions in fees or interest, or extending the Maturity Date, and (vi) such
Lender shall give prompt prior notice to the Borrower of each such participation
to be sold by such Lender. The Borrower hereby agrees that participants shall
have the same rights under Sections 2.8, 2.9, 2.11(c), 9.4 and 9.7 hereof as the
Lender to the extent of their respective participations. Notwithstanding the
foregoing, upon the receipt of notice by the Borrower of the sale of a
participation by any Lender to one or more banks or other entities (other than
an Affiliate of such Lender) in or to all or a portion of its rights and
obligations under this Agreement (each such bank or other entity, a “Proposed
Participant”), the Borrower shall have the right, but not the obligation, to
select additional lenders to replace such Proposed Participant on the same terms
and conditions as the Proposed Participant upon prompt written notice from the
Borrower to the applicable Administrative Agent and the Lender selling such
participation. The Borrower shall have ten days from the date of its receipt of
notice of the proposed sale of such participation to the Proposed Participant to
select replacement lenders to replace such Proposed

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Participant. If the Borrower does not select any replacement lenders or does not
elect to select any replacement lenders the applicable Lender may sell such
participation to the Proposed Participant.

          (f) Confidentiality. Each Lender may furnish any information
concerning the Borrower and its Subsidiaries in the possession of such Lender
from time to time to assignees and participants (including prospective assignees
and participants); provided that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree in writing to
preserve the confidentiality of any confidential information relating to the
Borrower and its Subsidiaries received by it from such Lender. Such Lender shall
promptly deliver a signed copy of any such confidentiality agreement to the
Borrower.

     Section 9.7 Indemnification. The Borrower shall indemnify the
Administrative Agents, the Arranger, the Lenders (including any lender which was
a Lender hereunder prior to any full assignment of its Revolving Commitment),
the Issuing Lenders, and each affiliate thereof and their respective directors,
officers, employees and agents from, and discharge, release, and hold each of
them harmless against, any and all losses, liabilities, claims or damages to
which any of them may become subject, insofar as such losses, liabilities,
claims or damages arise out of or result from (i) any actual or proposed use by
the Borrower or any Affiliate of the Borrower of the proceeds of any Advance or
Letter of Credit, (ii) any breach by the Borrower of any provision of this
Agreement or any other Credit Document, (iii) any investigation, litigation or
other proceeding (including any threatened investigation or proceeding) relating
to the foregoing, or (iv) any Environmental Claim or requirement of
Environmental Laws concerning or relating to the present or previously-owned or
operated properties, or the operations or business, of the Borrower or any of
its Subsidiaries, and the Borrower shall reimburse each Administrative Agent,
the Arranger, the Issuing Lender, and each Lender, and each affiliate thereof
and their respective directors, officers, employees and agents, upon demand for
any reasonable out-of-pocket expenses (including legal fees) incurred in
connection with any such investigation, litigation or other proceeding; and
EXPRESSLY INCLUDING ANY SUCH LOSSES, LIABILITIES, CLAIMS, DAMAGES, OR EXPENSE
INCURRED BY REASON OF THE PERSON BEING INDEMNIFIED’S OWN NEGLIGENCE, BUT
EXCLUDING ANY SUCH LOSSES, LIABILITIES, CLAIMS, DAMAGES OR EXPENSES INCURRED BY
REASON OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PERSON TO BE
INDEMNIFIED.

     Section 9.8 Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.

     Section 9.9 Survival of Representations, etc. All representations and
warranties contained in this Agreement or made in writing by or on behalf of the
Borrower in connection herewith shall survive the execution and delivery of this
Agreement and the Credit Documents, the making of the Advances and any
investigation made by or on behalf of the Lenders, none of which investigations
shall diminish any Lender’s right to rely on such representations and
warranties. All obligations of the Borrower provided for in Sections 2.8, 2.9,
2.11(c), 9.4 and 9.7 shall survive any termination of this Agreement and
repayment in full of the Obligations.

     Section 9.10 Severability. In case one or more provisions of this Agreement
or the other Credit Documents shall be invalid, illegal or unenforceable in any
respect under any applicable Legal Requirement, the validity, legality and
enforceability of the remaining provisions contained herein or therein shall not
be affected or impaired thereby.

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     Section 9.11 Usury Not Intended. It is the intent of the Borrower and each
Lender in the execution and performance of this Agreement and the other Credit
Documents to contract in strict compliance with applicable usury laws, including
conflicts of law concepts, governing the Advances of each Lender including such
applicable Legal Requirements of the State of Texas and the United States of
America from time to time in effect. In furtherance thereof, the Lenders and the
Borrower stipulate and agree that none of the terms and provisions contained in
this Agreement or the other Credit Documents shall ever be construed to create a
contract to pay, as consideration for the use, forbearance or detention of
money, interest at a rate in excess of the Maximum Rate and that for purposes
hereof “interest” shall include the aggregate of all charges which constitute
interest under such laws that are contracted for, charged or received under this
Agreement. In the event that the Obligations are accelerated by reason of any
election of the holder thereof resulting from any Event of Default under this
Agreement or otherwise, or in the event of any required or permitted prepayment,
then such consideration that constitutes interest may never include more than
the Maximum Rate and excess interest, if any, provided for in this Agreement or
otherwise shall be canceled automatically as of the date of such acceleration or
prepayment and, if theretofore paid, shall be credited on the applicable
Obligations (or, if the applicable Obligations shall have been paid in full,
refunded to the Borrower). The provisions of this Section shall control over all
other provisions of this Agreement or the other Credit Documents which may be in
apparent conflict herewith.

     Section 9.12 Governing Law. This Agreement, the Notes and the other Credit
Documents shall be governed by, and construed and enforced in accordance with,
the laws of the State of Texas. Without limiting the intent of the parties set
forth above, (a) Chapter 346 of the Texas Finance Code, as amended shall not
apply to this Agreement, the Notes, or the transactions contemplated hereby and
(b) to the extent that any Lender may be subject to Texas law limiting the
amount of interest payable for its account, such Lender shall utilize the
indicated (weekly) rate ceiling from time to time in effect.

     Section 9.13 Waiver of Jury Trial. The Borrower, the Issuing Lenders, the
Swingline Lenders, the Lenders and the Administrative Agents hereby irrevocably
waive any and all right to trial by jury in respect of any legal proceeding,
directly or indirectly (whether sounding in tort, contract or otherwise),
arising out of or relating to this Agreement, any other Credit Document, any of
the transactions contemplated hereby, or the relationship established hereunder.

     Section 9.14 Judgment Currency. If for the purposes of obtaining judgment
in any court it is necessary to convert a sum due from the Borrower hereunder in
the currency expressed to be payable herein (the “specified currency”) into
another currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with usual and customary banking procedures the US Administrative
Agent could purchase the specified currency with such other currency at any of
the US Administrative Agent’s offices in the United States of America on the
Business Day preceding that on which final, non-appealable judgment is given.
The obligations of the Borrower in respect of any sum due to any Lender, any
Issuing Lender or any Administrative Agent hereunder shall, notwithstanding any
judgment in a currency other than the specified currency, be discharged only to
the extent that on the Business Day following receipt by such Lender, such
Issuing Lender or such Administrative Agent (as the case may be) of any sum
adjudged to be so due in such other currency such Lender, such Issuing Lender or
such Administrative Agent (as the case may be) may in accordance with normal,
reasonable banking procedures purchase the specified currency with such other
currency. If the amount of the specified currency so purchased is less than the
sum originally due to such Lender, such Issuing Lender or such Administrative
Agent, as the case may be, in the specified currency, the Borrower agrees, to
the fullest extent that it may effectively do so, as a separate obligation and
notwithstanding any such judgment, to indemnify such Lender, such Issuing Lender
or such

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Administrative Agent, as the case may be, against such loss, and if the amount
of the specified currency so purchased exceeds (a) the sum originally due to any
Lender, such Issuing Lender or such Administrative Agent, as the case may be, in
the specified currency and (b) any amounts shared with other Lenders as a result
of allocations of such excess as a disproportionate payment to such Lender under
Section 2.14, each Lender, Issuing Lender or each Administrative Agent, as the
case may be, agrees to promptly remit such excess to the Borrower.

     Section 9.15 Headings Descriptive. The headings of the several Sections and
paragraphs of the Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.

     Section 9.16 USA Patriot Act. Each Lender that is subject to the Act (as
hereinafter defined) and each Administrative Agent (for itself and not on behalf
of any Lender) hereby notifies the Borrower that pursuant to the requirements of
the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”), it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender or such
Administrative Agent, as applicable, to identify the Borrower in accordance with
the Act.

     Section 9.17 Entire Agreement. Pursuant to Section 26.02 of the Texas
Business and Commerce Code, a loan agreement in which the amount involved in the
loan agreement exceeds $50,000 in value is not enforceable unless the loan
agreement is in writing and signed by the party to be bound or that party’s
authorized representative.

     The rights and obligations of the parties to an agreement subject to the
preceding paragraph shall be determined solely from the written loan agreement,
and any prior oral agreements between the parties are superseded by and merged
into the loan agreement. This written agreement and the Credit Documents, as
defined in this Agreement, represent the final agreement among the parties and
may not be contradicted by evidence of prior, contemporaneous, or subsequent
oral agreements of the parties.

[Remainder of page left intentionally blank]

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     EXECUTED as of the date first above written.

              NATIONAL OILWELL VARCO, INC.
 
       
 
  By:   /s/ Daniel L. Molinaro
 
       
 
           Daniel L. Molinaro
 
           Vice President & Treasurer
 
            WELLS FARGO BANK,               NATIONAL ASSOCIATION     as US
Administrative Agent, Lead Arranger, Sole Book     Runner and a Primary Lender
 
       
 
  By:   /s/ Eric R. Hollingsworth
 
       
 
           Eric R. Hollingsworth
 
           Vice President
 
            DNB NOR BANK ASA,     as Norwegian Administrative Agent,
Co-Documentation     Agent and a Norwegian Lender
 
       
 
  By:   /s/ Nils Fykse
 
       
 
           Nils Fykse
 
           Senior Vice President
 
       
 
  By:   /s/ Stig Kristiansen
 
       
 
           Stig Kristiansen
 
           Vice President
 
            COMERICA BANK     as Co-Syndication Agent and a Primary Lender
 
       
 
  By:   /s/ Mona M. Foch
 
       
 
           Mona M. Foch
 
           Senior Vice President – Texas Division

Signature Page to
Amended and Restated Credit Agreement
(National Oilwell Varco, Inc.)

 

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              JPMORGAN CHASE BANK, N.A.     as Co-Syndication Agent and a
Primary Lender
 
       
 
  By:   /s/ Dianne L. Russell
 
       
 
           Dianne L. Russell
 
           Vice President
 
            THE BANK OF NOVA SCOTIA     as Co-Documentation Agent and a Primary
Lender
 
       
 
  By:   /s/ N. Bell
 
       
 
           N. Bell
 
           Senior Manager Loan Operations
 
            WACHOVIA BANK NATIONAL ASSOCIATION     as a Primary Lender
 
       
 
  By:   /s/ Rotcher Watkins
 
       
 
           Rotcher Watkins
 
           Managing Director
 
            BARCLAYS BANK PLC     as a Primary Lender
 
       
 
  By:   /s/ Nicholas Bell
 
       
 
           Nicholas Bell
 
           Director

Signature Page to
Amended and Restated Credit Agreement
(National Oilwell Varco, Inc.)

 

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              CREDIT SUISSE, Cayman Islands Branch, as a     Primary Lender
 
       
 
  By:   /s/ Vanessa Gomez
 
       
 
      Vanessa Gomez
 
      Vice President
 
       
 
  By:   /s/ Karim Blasetti
 
       
 
      Karim Blasetti
 
      Associate
 
            THE BANK OF NEW YORK     as a Primary Lender
 
       
 
  By:   /s/ Raymond J. Palmer
 
       
 
      Raymond J. Palmer
 
      Vice President
 
            THE BANK OF TOKYO-MITSUBISHI, LTD.,     HOUSTON AGENCY, as a Primary
Lender
 
       
 
  By:   /s/ Kelton Glasscock
 
       
 
      Kelton Glasscock
 
      Vice President & Manager

Signature Page to
Amended and Restated Credit Agreement
(National Oilwell Varco, Inc.)

 

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Schedule 1.1(a)

Revolving Commitments

                                    Norwegian       Primary       Lender    
Commitment       Commitment      
Wells Fargo Bank, National Association
    $ 0.00       $ 72,000,000.00      
DnB NOR Bank ASA
    $ 60,000,000.00       $ 0.00      
Comerica Bank
    $ 0.00       $ 57,000,000.00      
JPMorgan Chase Bank, N.A.
    $ 0.00       $ 57,000,000.00      
The Bank of Nova Scotia
    $ 0.00       $ 57,000,000.00      
Wachovia Bank National Association
    $ 0.00       $ 57,000,000.00      
Barclays Bank PLC
    $ 0.00       $ 35,000,000.00      
Credit Suisse, Cayman Islands Branch
    $ 0.00       $ 35,000,000.00      
The Bank of New York
    $ 0.00       $ 35,000,000.00      
The Bank of Tokyo-Mitsubishi
    $ 0.00       $ 35,000,000.00      
TOTAL:
    $ 60,000,000.00       $ 440,000,000.00