Exhibit 10.1


 


Execution Copy




 





 


CREDIT AGREEMENT


 


Dated as of June 12, 2008


 


Among


 


EMERALD DRILLER COMPANY,


 


SAPPHIRE DRILLER COMPANY,


 


AQUAMARINE DRILLER COMPANY,


 


and


 


TOPAZ DRILLER COMPANY,


 


as Borrowers,


 


VANTAGE DRILLING COMPANY

AND CERTAIN SUBSIDIARIES THEREOF PARTY HERETO,


 


as Guarantors


 


THE LENDERS FROM TIME TO TIME PARTY HERETO,


 


as Lenders,


 


and


 


NATIXIS,


 


as Facility Agent and Collateral Agent


 






 


NATIXIS, BTMU CAPITAL CORPORATION AND 

FORTIS BANK S.A./N.V., NEW YORK BRANCH,

as Mandated Lead Arrangers


and


NATIXIS, BTMU CAPITAL CORPORATION AND 

FORTIS BANK S.A./N.V., NEW YORK BRANCH,

as Joint Bookrunners




 





 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  I

  	
  DEFINITIONS AND ACCOUNTING TERMS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 1.01

  	
   

  	
  Certain Defined Terms

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 1.02

  	
   

  	
  Computation of Time Periods

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 1.03

  	
   

  	
  Accounting Terms

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 1.04

  	
   

  	
  Classes of Advances

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 1.05

  	
   

  	
  Miscellaneous

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  II

  	
  THE CREDIT FACILITIES

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.01

  	
   

  	
  The Advances

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.02

  	
   

  	
  Method of Borrowing

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.03

  	
   

  	
  Fees

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.04

  	
   

  	
  Reduction of the Commitments

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.05

  	
   

  	
  Repayment

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.06

  	
   

  	
  Interest

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.07

  	
   

  	
  Prepayments

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.08

  	
   

  	
  Funding Losses

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.09

  	
   

  	
  Increased Costs

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.10

  	
   

  	
  Payments and Computations

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.11

  	
   

  	
  Taxes

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.12

  	
   

  	
  Sharing of Payments, Etc

  	
   

  	
  52

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.13

  	
   

  	
  Applicable Lending Offices

  	
   

  	
  52

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.14

  	
   

  	
  Letters of Credit

  	
   

  	
  52

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.15

  	
   

  	
  Mitigation Obligations; Designation of a Different Lending Office

  	
   

  	
  57

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.16

  	
   

  	
  Joint and Several Liability of the Borrowers

  	
   

  	
  58

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.17

  	
   

  	
  Mitigation Obligations; Replacement of Lenders

  	
   

  	
  58

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  III

  	
  CONDITIONS OF LENDING

  	
   

  	
  59

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.01

  	
   

  	
  Initial Conditions Precedent

  	
   

  	
  59

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.02

  	
   

  	
  Conditions Precedent to Term Borrowings

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.03

  	
   

  	
  Conditions Precedent to Top-Up Borrowings

  	
   

  	
  64

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.04

  	
   

  	
  Conditions Precedent to Revolving Borrowings

  	
   

  	
  64

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.05

  	
   

  	
  Conditions Precedent to Each Borrowing

  	
   

  	
  64

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.06

  	
   

  	
  Determinations Under Sections 3.01, 3.02, 3.03, 3.04 and 3.05

  	
   

  	
  65

  
								



 


i

















 


	
   

  	
   

  	
   

  	
  Page

  
	
  ARTICLE
  IV

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.01

  	
   

  	
  Existence; Subsidiaries

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.02

  	
   

  	
  Power and Authority

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.03

  	
   

  	
  Authorization and Approvals

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.04

  	
   

  	
  Enforceable Obligations

  	
   

  	
  66

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.05

  	
   

  	
  Financial Statements; No Material Adverse Effect

  	
   

  	
  66

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.06

  	
   

  	
  True and Complete Disclosure

  	
   

  	
  67

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.07

  	
   

  	
  Litigation

  	
   

  	
  67

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.08

  	
   

  	
  Compliance with Laws

  	
   

  	
  67

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.09

  	
   

  	
  No Default

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.10

  	
   

  	
  Subsidiaries; Corporate Structure

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.11

  	
   

  	
  Condition of Properties

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.12

  	
   

  	
  Environmental Condition

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.13

  	
   

  	
  Insurance

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.14

  	
   

  	
  Taxes

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.15

  	
   

  	
  ERISA Compliance

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.16

  	
   

  	
  Security Interests

  	
   

  	
  70

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.17

  	
   

  	
  Labor Relations

  	
   

  	
  70

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.18

  	
   

  	
  Intellectual Property

  	
   

  	
  71

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.19

  	
   

  	
  Solvency

  	
   

  	
  71

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.20

  	
   

  	
  Margin Regulations

  	
   

  	
  71

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.21

  	
   

  	
  Investment Company Act

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.22

  	
   

  	
  Rig Construction Contracts

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  AFFIRMATIVE COVENANTS

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.01

  	
   

  	
  Preservation of Existence, Etc

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.02

  	
   

  	
  Compliance with Laws, Etc

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.03

  	
   

  	
  Maintenance of Property

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.04

  	
   

  	
  Maintenance of Insurance

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.05

  	
   

  	
  Payment of Taxes, Etc

  	
   

  	
  77

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.06

  	
   

  	
  Reporting Requirements

  	
   

  	
  78

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.07

  	
   

  	
  Other Notices

  	
   

  	
  81

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.08

  	
   

  	
  Books and Records; Inspection

  	
   

  	
  82

  
						



 


ii

















 


	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
  Section 5.09

  	
   

  	
  Use of Proceeds

  	
   

  	
  82

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.10

  	
   

  	
  Nature of Business

  	
   

  	
  83

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.11

  	
   

  	
  Operation of Rigs

  	
   

  	
  83

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.12

  	
   

  	
  Additional Guarantors

  	
   

  	
  84

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.13

  	
   

  	
  Further Assurances in General

  	
   

  	
  84

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.14

  	
   

  	
  Delivery Date Collateral Requirements

  	
   

  	
  85

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.15

  	
   

  	
  Drilling Contracts

  	
   

  	
  88

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.16

  	
   

  	
  Separate Existence

  	
   

  	
  88

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.17

  	
   

  	
  Post-Closing Requirements

  	
   

  	
  89

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VI

  	
  NEGATIVE COVENANTS

  	
   

  	
  90

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.01

  	
   

  	
  Liens, Etc

  	
   

  	
  90

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.02

  	
   

  	
  Debts, Guaranties and Other Obligations

  	
   

  	
  91

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.03

  	
   

  	
  Merger or Consolidation

  	
   

  	
  92

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.04

  	
   

  	
  Asset Sales

  	
   

  	
  92

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.05

  	
   

  	
  Investments

  	
   

  	
  93

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.06

  	
   

  	
  Restricted Payments

  	
   

  	
  93

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.07

  	
   

  	
  Change in Nature of Business

  	
   

  	
  94

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.08

  	
   

  	
  Transactions With Affiliates

  	
   

  	
  94

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.09

  	
   

  	
  Maintenance of Ownership of Subsidiaries

  	
   

  	
  94

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.10

  	
   

  	
  Agreements Restricting Liens and Distributions

  	
   

  	
  94

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.11

  	
   

  	
  Limitation on Accounting Changes or Changes in Fiscal Periods

  	
   

  	
  95

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.12

  	
   

  	
  Sale and Leaseback Transactions and other Off-Balance Sheet
  Liabilities

  	
   

  	
  95

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.13

  	
   

  	
  Amendment of Material Contracts

  	
   

  	
  95

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.14

  	
   

  	
  Operation of Rigs

  	
   

  	
  95

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.15

  	
   

  	
  Bank Accounts

  	
   

  	
  96

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.16

  	
   

  	
  Capital Expenditures

  	
   

  	
  96

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.17

  	
   

  	
  Leverage Ratio

  	
   

  	
  96

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.18

  	
   

  	
  Net Debt to Capitalization Ratio

  	
   

  	
  97

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.19

  	
   

  	
  Free Cash Balances

  	
   

  	
  97

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.20

  	
   

  	
  Working Capital Ratio

  	
   

  	
  97

  
						



 


iii

















 


	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
  Section 6.21

  	
   

  	
  Fixed Charge Coverage Ratio

  	
   

  	
  97

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VII

  	
  EVENTS OF DEFAULT

  	
   

  	
  97

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.01

  	
   

  	
  Events of Default

  	
   

  	
  97

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.02

  	
   

  	
  Optional Acceleration of Maturity

  	
   

  	
  100

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.03

  	
   

  	
  Automatic Acceleration of Maturity

  	
   

  	
  100

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.04

  	
   

  	
  Non-exclusivity of Remedies

  	
   

  	
  101

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.05

  	
   

  	
  Right of Set-off

  	
   

  	
  101

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.06

  	
   

  	
  Application of Proceeds

  	
   

  	
  101

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII

  	
  THE GUARANTY

  	
   

  	
  103

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.01

  	
   

  	
  Liabilities Guaranteed

  	
   

  	
  103

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.02

  	
   

  	
  Nature of Guaranty

  	
   

  	
  103

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.03

  	
   

  	
  Agent’s Rights

  	
   

  	
  104

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.04

  	
   

  	
  Guarantor’s Waivers

  	
   

  	
  104

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.05

  	
   

  	
  Maturity of Obligations, Payment

  	
   

  	
  105

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.06

  	
   

  	
  Agent’s Expenses

  	
   

  	
  105

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.07

  	
   

  	
  Liability

  	
   

  	
  105

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.08

  	
   

  	
  Events and Circumstances Not Reducing or Discharging any Guarantor’s
  Obligations

  	
   

  	
  105

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.09

  	
   

  	
  Subordination of All Guarantor Claims

  	
   

  	
  107

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.10

  	
   

  	
  Claims in Bankruptcy

  	
   

  	
  108

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.11

  	
   

  	
  Payments Held in Trust

  	
   

  	
  108

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.12

  	
   

  	
  Benefit of Guaranty

  	
   

  	
  108

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.13

  	
   

  	
  Reinstatement

  	
   

  	
  109

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.14

  	
   

  	
  Liens Subordinate

  	
   

  	
  109

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.15

  	
   

  	
  Guarantor’s Enforcement Rights

  	
   

  	
  109

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.16

  	
   

  	
  Limitation

  	
   

  	
  109

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.17

  	
   

  	
  Contribution Rights

  	
   

  	
  110

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  IX

  	
  THE AGENTS AND THE ISSUING BANKS

  	
   

  	
  110

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.01

  	
   

  	
  Appointment and Authority

  	
   

  	
  110

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.02

  	
   

  	
  Rights as a Lender

  	
   

  	
  111

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.03

  	
   

  	
  Exculpatory Provisions

  	
   

  	
  111

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.04

  	
   

  	
  Reliance by Agent

  	
   

  	
  112

  
							



 


iv

















 


	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
  Section 9.05

  	
   

  	
  Delegation of Duties

  	
   

  	
  112

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.06

  	
   

  	
  Resignation of Agents

  	
   

  	
  112

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.07

  	
   

  	
  Non-Reliance on Mandated Lead Arrangers, Joint Bookrunners, Agents
  and Other Lenders

  	
   

  	
  113

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.08

  	
   

  	
  Indemnification

  	
   

  	
  113

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.09

  	
   

  	
  Collateral and Guaranty Matters

  	
   

  	
  114

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.10

  	
   

  	
  No Other Duties, etc

  	
   

  	
  115

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  X

  	
  MISCELLANEOUS

  	
   

  	
  115

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.01

  	
   

  	
  Amendments, Etc

  	
   

  	
  115

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.02

  	
   

  	
  Notices, Etc

  	
   

  	
  117

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.03

  	
   

  	
  No Waiver; Cumulative Remedies

  	
   

  	
  118

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.04

  	
   

  	
  Costs and Expenses

  	
   

  	
  118

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.05

  	
   

  	
  Indemnification

  	
   

  	
  119

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.06

  	
   

  	
  Successors and Assigns

  	
   

  	
  120

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.07

  	
   

  	
  Confidentiality

  	
   

  	
  123

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.08

  	
   

  	
  Execution in Counterparts

  	
   

  	
  124

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.09

  	
   

  	
  Survival of Representations, etc

  	
   

  	
  124

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.10

  	
   

  	
  Severability

  	
   

  	
  124

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.11

  	
   

  	
  Interest Rate Limitation

  	
   

  	
  125

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.12

  	
   

  	
  The Platform

  	
   

  	
  125

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.13

  	
   

  	
  Governing Law

  	
   

  	
  125

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.14

  	
   

  	
  Submission to Jurisdiction

  	
   

  	
  125

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.15

  	
   

  	
  Waiver of Jury

  	
   

  	
  126

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.16

  	
   

  	
  Entire agreement

  	
   

  	
  126

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.17

  	
   

  	
  Judgment Currency

  	
   

  	
  127

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.18

  	
   

  	
  USA Patriot Act Notice

  	
   

  	
  127

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.19

  	
   

  	
  Fee Letters

  	
   

  	
  127

  
							



 


v

















 


EXHIBITS:


 


	
  Exhibit A

  	
  -

  	
  Form of Assignment and Acceptance

  
	
  Exhibit B

  	
  -

  	
  Form of Assignment of Earnings

  
	
  Exhibit C

  	
  -

  	
  Form of Assignment of Insurance

  
	
  Exhibit D

  	
  -

  	
  Form of Charter Assignment

  
	
  Exhibit E

  	
  -

  	
  Form of Collateral Assignment of Rig Construction Contracts

  
	
  Exhibit F

  	
  -

  	
  Form of Compliance Certificate

  
	
  Exhibit G

  	
  -

  	
  Form of Notice of Borrowing

  
	
  Exhibit H

  	
  -

  	
  Form of Notice of Continuation

  
	
  Exhibit I

  	
  -

  	
  Form of Pledge Agreement

  
	
  Exhibit J

  	
  -

  	
  Reserved

  
	
  Exhibit K

  	
  -

  	
  Form of Security Agreement

  
	
  Exhibit L

  	
  -

  	
  Form of Excess Cash Flow Certificate

  



 


 


ANNEXES
AND SCHEDULES:


 


	
  Annex I

  	
  -

  	
  Commitments

  
	
  Schedule 1.01(a)

  	
  -

  	
  Acceptable National Oil Companies

  
	
  Schedule 2.01

  	
  -

  	
  Shipyard Installments and Equity Portion of Rigs’ Total Cost

  
	
  Schedule 4.10

  	
  -

  	
  Subsidiaries

  
	
  Schedule 5.04

  	
  -

  	
  Loss Payable Clause

  
	
  Schedule 6.15

  	
  -

  	
  Bank Accounts

  
	
  Schedule 10.02

  	
  -

  	
  Addresses for Notice

  



 


vi

















 


CREDIT AGREEMENT


 


This Credit
Agreement dated as of June 12, 2008 is among Emerald Driller Company, a
Cayman Islands exempted company (“Borrower 1”), Sapphire Driller
Company, a Cayman Islands exempted company (“Borrower 2”), Aquamarine
Driller Company, a Cayman Islands exempted company (“Borrower 3”), Topaz
Driller Company, a Cayman Islands exempted company (“Borrower 4”;
together with Borrower 1, Borrower 2 and Borrower 3, the “Borrowers”),
the Guarantors (as defined below), the Lenders, and Natixis, as Facility Agent
and Collateral Agent for the Lenders.


 


The Borrowers,
the Guarantors, the Lenders, the Facility Agent and the Collateral Agent agree
as follows:


 


ARTICLE I


DEFINITIONS AND ACCOUNTING TERMS


 


Section 1.01           Certain
Defined Terms.  Any capitalized terms used in this Agreement
that are defined in Article 9 of the Uniform Commercial Code as adopted in
the State of New York (“UCC”) shall have the meanings assigned to those
terms by the UCC as of the date of this Agreement.  As used in this Agreement, the terms defined
above shall have the meanings set forth therein and 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):


 


“Acceptable
Credit Support” means a performance bond or a letter of credit, each issued
from an Acceptable Credit Support Provider, each in a form reasonably
acceptable to the Facility Agent and which supports 100% of the obligations of
the counterparty to a dayrate drilling contract for the full term of such
contract.


 


“Acceptable
Credit Support Provider” means an issuer of Acceptable Credit Support that
is a commercial bank (a) organized under the laws of any other country
which is a member of the Organization for Economic Cooperation and Development
(“OECD”), or a political subdivision of any such country, (b) having
total assets in excess of $1,000,000,000, provided that such bank is acting
through a branch or agency located in the country in which it is organized or
another country which is also a member of the OECD and (c) reasonably
approved by the Facility Agent.


 


“Acceptable
Flag Jurisdiction” means each of the Bahamas, Liberia, the Marshall
Islands, Panama, Singapore and any other offshore jurisdiction acceptable to
the Majority Lenders.


 


“Acceptable
Security Interest” in any Property means a Lien which (a) exists in
favor of the Collateral Agent for the benefit of the Secured Parties; (b) is
superior to all other Liens except Permitted Prior Liens; (c) secures the
Obligations; (d) is perfected; and (e) is enforceable against the
Loan Party that created such security interest.


 


“Account
Control Agreement” means, with respect to any deposit account of any Loan
Party is held with a bank that is not the Facility Agent or the Collateral
Agent, an agreement or agreements in form and substance reasonably acceptable
to the Collateral Agent between the 


 

















 


Collateral Agent and such other bank or banks governing any such
deposit accounts of such Loan Party.


 


“Additional
Costs” means, with respect to each Rig, the OFE (as defined in the
applicable Rig Construction Contract), project management and start-up costs,
legal and bank fees, and interest expense during construction of such Rig.


 


“Adjusted
Base Rate” means, for any day, a fluctuating rate of interest per annum
equal to the rate determined by the Facility Agent to be the arithmetic average
(rounded in accordance with normal market practice) of the rates reported to
the Facility Agent by each Reference Lender as the rate at which such Reference
Lender offers to place deposits in U.S. dollars with first class banks in the
London interbank market at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period, in the
approximate amount of such Reference Lender’s relevant Advance and having a
maturity equal to an Interest Period of three months.  If any Reference Lender fails to provide such
quotation to the Facility Agent, then the Facility Agent shall determine the
Adjusted Base Rate on the basis of the quotations of the remaining Reference
Lender(s).


 


“Administrative
Entity” means any Subsidiary of the Parent formed in connection with any Bidding
Entity or Drillship Entity to provide payroll or other administrative services
for a Bidding Entity or a Drillship Entity.


 


“Administrative
Questionnaire” means an administrative questionnaire in a form supplied by
the Facility Agent.


 


“Advance”
means any Term Advance, Top-Up Advance or Revolving Advance.


 


“Affiliate”
of any Person, means 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.  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 the ability to exercise voting power,
by contract or otherwise.


 


“Agent”
means the Facility Agent or the Collateral Agent, and “Agents” means all
such Persons collectively.


 


“Aggregate
Commitment” means, for any Lender, the sum of such Lender’s Term Tranche 1
Commitment, Term Tranche 2 Commitment, Term Tranche 3 Commitment, Term Tranche
4 Commitment, Top-Up Tranche 1 Commitment, Top-Up Tranche 2 Commitment, Top-Up
Tranche 3 Commitment, Top-Up Tranche 4 Commitment, and Revolving Commitment.  The Aggregate Commitments of the Lenders as
of the Effective Date is $440,000,000.


 


“Aggregate
Revolving Commitments” means the sum of the aggregate Revolving Commitments
of the Lenders.  The Aggregate Revolving
Commitments of the Lenders as of the Effective Date is $40,000,000.


 


2

















 


“Aggregate
Term Commitments” means the sum of the aggregate Term Tranche 1
Commitments, Term Tranche 2 Commitments, Term Tranche 3 Commitments and Term
Tranche 4 Commitments of the Lenders. 
The Aggregate Term Commitments of the Lenders as of the Effective Date
is $320,000,000.


 


“Aggregate
Top-Up Commitments” means the sum of the aggregate Top-Up Tranche 1
Commitments, Top-Up Tranche 2 Commitments, Top-Up Tranche 3 Commitments and
Top-Up Tranche 4 Commitments of the Lenders. 
The Aggregate Top-Up Commitments of the Lenders as of the Effective Date
is $80,000,000.


 


“Agreement”
means this Credit Agreement dated as of June 12, 2008 among the Borrowers,
the Guarantors, the Lenders, the Agents, the Documentation Agent, the
Syndication Agent, the Mandated Lead Arrangers and the Joint Bookrunners, as it
may be amended or modified and in effect from time to time.


 


“Applicable
Lending Office” means (a) with respect to any Lender, the office, branch,
subsidiary, affiliate or correspondent bank of such Lender specified in its
Administrative Questionnaire or such other office, branch, subsidiary,
affiliate or correspondent bank as such Lender may from time to time specify to
the Borrowers and the Facility Agent from time to time and (b) with
respect to the Facility Agent, the address specified for such Person on Schedule
10.02 or to such other address, facsimile number, electronic mail address
or telephone number as shall be designated by such party in a notice to the
other parties.


 


“Applicable
Margin” means, for any day, with respect to Advances of any Class or
Tranche or letter of credit fees, the applicable percentage rate per annum set
forth below for the status of the applicable Rig for such Tranche in effect as
of the relevant date of determination:


 


	
  Rig Status

  	
   

  	
  Applicable Margin

  	
   

  
	
  Prior to the
  Delivery Date of such Rig or any time that such Rig is not operating under a
  Drilling Contract or any time such Rig is mobilizing for more than one month under
  a Drilling Contract

  	
   

  	
  2.75

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  After the
  Delivery Date of such Rig and when such Rig is operating (including
  mobilization of no more than one month) under a Drilling Contract

  	
   

  	
  2.25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  After the
  Delivery Date of such Rig and when such Rig is operating (including
  mobilization of no more than one month) under a Drilling Contract with an
  initial or committed renewal term equal to or greater than two years

  	
   

  	
  1.75

  	
  %

  



 


“Applicable
Maturity Date” means, with respect to any Tranche, the Rig 1 Maturity Date,
the Rig 2 Maturity Date, the Rig 3 Maturity Date or the Rig 4 Maturity Date.


 


3

















 


“Approved
Fund” means any Fund that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.


 


“Approved
Rig Appraiser” means Platou Offshore, Fearnley Offshore, ODS Petrodata,
Kennedy Marr or any other first-class, international, independent, sale and
purchase offshore drilling rig appraiser acceptable to the Majority Lenders.


 


“Asset
Disposition” means the sale, transfer, license, lease or other disposition
(including any sale and leaseback transaction) of any property by any Person
(or the granting of any option or other right to do any of the foregoing),
including any sale, assignment, transfer or other disposal, with or without
recourse, of any notes or accounts receivable or any rights and claims
associated therewith.


 


“Assignment
and Acceptance” means an assignment and assumption entered into by a Lender
and an Eligible Assignee (with the consent of any party whose consent is
required by Section 10.06), and accepted by the Facility Agent, in
substantially the form of Exhibit A or any other form approved by
the Facility Agent.


 


“Assignment
of Earnings” means an Assignment of Earnings in substantially the form of Exhibit B
among one or more of the Loan Parties and the Collateral Agent for the benefit
of the Secured Parties.


 


“Assignment
of Insurance” means an Assignment of Insurance in substantially the form of
Exhibit C among one or more of the Loan Parties and the Collateral
Agent for the benefit of the Secured Parties.


 


“Attributable
Indebtedness” means, on any date, (a) in respect of any Capital Lease
of any Person, the capitalized amount thereof that would appear on a balance
sheet of such Person prepared as of such date in accordance with GAAP, and (b) in
respect of any Synthetic Lease Obligation, the capitalized amount of the
remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP
if such lease were accounted for as a capital lease.


 


“Audited
Financial Statements” means the audited consolidated balance sheet of the
Parent and its Subsidiaries for the fiscal year ended December 31, 2007,
together with the related consolidated statements of income or operations,
shareholders’ equity and cash flows for such fiscal year of the Parent and its
Subsidiaries, including the notes thereto.


 


“Base Rate
Advance” means an Advance that bears interest at a rate determined by
reference to the Adjusted Base Rate.


 


“Bidding
Entity” means any Subsidiary of the Parent formed for the purpose of
preparing and submitting bid proposals for contracts for any drillship or rig
(other than Rig 1, Rig 2, Rig 3, or Rig 4) for a day rate or other rate
acceptable to Parent.


 


“Bluesky”
means Bluesky Offshore Group Corp., a corporation formed under the laws of the
British Virgin Islands.


 


4

















 


“Borrowing”
means a Term Borrowing, a Top-Up Borrowing or a Revolving Borrowing.


 


“Borrowing
Date” means the date on which any Advance is made or any Letter of Credit
is issued hereunder.


 


“Business
Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the laws of, or are in fact
closed in, New York City or Paris, France and, if such day relates to any
Eurodollar Advance, means any such day on which dealings in Dollar deposits are
conducted by and between banks in the London interbank eurodollar market.


 


“Capital
Expenditures” means, for any Person for any period, the aggregate of all
expenditures in respect of the purchase or other acquisition of any fixed or
capital asset (excluding normal replacements and maintenance which are properly
charged to current operations) which should be capitalized in accordance with
GAAP.


 


“Capital
Lease” of a Person means any lease of any Property by such Person as lessee
that would, in accordance with GAAP, be required to be classified and accounted
for as a capital lease on the balance sheet of such Person.


 


“Cash
Equivalents” means:


 


(a) 
direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America), in each case maturing within one year
from the date of acquisition thereof;


 


(b)  direct
obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, municipalities of the United States of America,
in each case maturing within one year from the date of acquisition thereof and
having, at such date of acquisition, the highest credit rating obtainable from
S&P or from Moody’s;


 


(c) 
investments in commercial paper maturing within 270 days from the date of
acquisition thereof and having, at such date of acquisition, the highest credit
rating obtainable from S&P and from Moody’s;


 


(d) 
investments in certificates of deposit, banker’s acceptances and Dollar and
Eurodollar denominated time deposits maturing within one year from the date of
acquisition thereof issued or guaranteed by or placed with, and money market
deposit accounts issued or offered by, any Lender or any domestic office of any
commercial bank organized under the laws of the United States of America or any
State thereof that has a combined capital and surplus and undivided profits of
not less than $500,000,000;


 


(e) 
fully collateralized repurchase agreements with a term of not more than 30 days
for securities described in clause (a) above and entered into with a financial
institution satisfying the criteria of clause (d) above; and


 


5

















 


(f) 
investments in “money market funds” within the meaning of Rule 2a-7 of the
Investment Company Act of 1940, as amended, substantially all of whose assets
are invested in investments of the type described in clauses (a) through (e) above.


 


“Casualty
Event” means, with respect to any Rig owned by any Person, (a) any
loss or damage to, or any condemnation or taking of, such Rig other than a
Total Loss of any Rig, for which such Person receives, anticipates recovering
or has filed a claim for Casualty Proceeds or (b) any Lien imposed by any
Governmental Authority pursuant to Environmental Law and that has not been
released or bonded within ten Business Days following the applicable Loan
Party’s receipt of notice of such imposition unless such Lien is being
contested in good faith and by appropriate proceedings.


 


“Casualty
Proceeds” means the proceeds of any insurance, condemnation award or other
compensation paid or payable to any Loan Party or the Collateral Agent in
respect of any Casualty Event, less the reasonable fees, taxes and expenses
paid to collect such proceeds.


 


“Change in
Law” means the occurrence, after the date of this Agreement, of any of the
following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or
directive (whether or not having the force of law) by any Governmental
Authority.


 


“Change of
Control” means (a) any acquisition pursuant to which any Person or
group (as defined in Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) other
than the Permitted Investors, has become the direct or indirect beneficial
owner (as defined in Rule 13d-3 under the Exchange Act) of more than 35%
of the Voting Stock of the Parent; (b) the Parent is merged with or into
or consolidated with another Person and, immediately after giving effect to the
merger or consolidation, less than a majority of the outstanding voting
securities entitled to vote generally in the election of directors or persons
who serve similar functions of the surviving or resulting Person are then
beneficially owned (within the meaning of Rule 13d-3 of the Exchange Act)
in the aggregate by (i) the stockholders of the Parent immediately prior
to such merger or consolidation, or (ii) if the record date has been set
to determine the stockholders of the Parent entitled to vote on such merger or
consolidation, the stockholders of the Parent as of such record date; (c) the
Parent, either individually or in conjunction with one or more of its
Subsidiaries, sells, conveys, transfers or leases, or its Subsidiaries sell,
convey, transfer or lease, all or substantially all of the assets of the Parent
and its Subsidiaries, taken as a whole (either in one transaction or a series
of related transactions), including Equity Interests of its Subsidiaries, to
any Person except as otherwise permitted by Section 6.04; (d) the
liquidation or dissolution of the Parent, (e) a majority of the
individuals who constitute the Board of Directors of the Parent are not
Continuing Directors or (f) the Parent shall cease to own, directly or
indirectly, 100% of the Equity Interests of any Borrower.


 


“Charter
Assignment” means a Charter Assignment in substantially the form of Exhibit D
among one or more of the Loan Parties and the applicable charterer in favor of
the Collateral Agent for the benefit of the Secured Parties.


 


6

















 


“Charter
Obligations” means all obligations (other than obligations backed by a
cash-secured letter of credit) of any Person with respect to potential
liquidated damages, fees or other liabilities incurred in connection with the
termination or breach of charters or similar contractual arrangements entered
into with respect to the charter or lease of vessels, in each case calculated
on a probable loss basis in accordance with GAAP.


 


“Class”
has the meaning set forth in Section 1.04.


 


“Closing
Date” means June 12, 2008.


 


“Code”
means the United States Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time, and any successor statute and all rules and
regulations promulgated thereunder.


 


“Collateral”
means all the “Collateral” as defined in any Security Document and shall
include the Rigs.


 


“Collateral
Agent” means Natixis acting as collateral agent and/or mortgagee for the
Secured Parties.


 


“Collateral
Assignment of Rig Construction Contracts” means a Deed of Assignment with
respect to Rig Construction Contracts in substantially the form of Exhibit E
among one or more of the Loan Parties and the Shipyard in favor of the
Collateral Agent for the benefit of the Secured Parties.


 


“Collateral
Disposition” means (a) the Asset Disposition by any Loan Party of any
Rig in its entirety and (b) any Total Loss of any Rig.


 


“Collateral
Disposition Proceeds” means (a) with respect to any Collateral
Disposition involving an Asset Disposition of a Rig, the gross proceeds thereof
received by any Loan Party less the reasonable fees, taxes and expenses paid by
such Person that are directly related to such Asset Disposition and the amount
of reserves, if any, recorded in accordance with GAAP for indemnity or other
obligations of the Parent or any of its Subsidiaries directly related to such
Asset Disposition of the Rig and (b) with respect to any Collateral
Disposition involving a Total Loss of a Rig, the proceeds of any insurance
proceeds, condemnation award or other compensation paid or payable to any Loan
Party or the Collateral Agent in respect of such Total Loss less the reasonable
fees, taxes and expenses paid to collect such proceeds and the amount of
reserves, if any, recorded in accordance with GAAP for indemnity or other
obligations of the Parent or any of its Subsidiaries directly related to such
sale of the Rig.


 


“Commitments”
means, as to any Lender, its Term Commitments, its Top-Up Commitments and its
Revolving Commitments.


 


“Compliance
Certificate” means a Compliance Certificate signed by a Responsible Officer
of the Parent in substantially the form of the attached Exhibit F.


 


“Confidential
Information Memorandum” means the Confidential Information Memorandum dated
June 2008 (together with all amendments and supplements thereto) and 


 


7

















 


furnished to the initial Lenders in connection with the initial
syndication of the Advances made hereunder.


 


“Consolidated
EBITDA” means, for any Person for any period, without duplication, the sum
of the following for such Person and its Subsidiaries on a consolidated basis,
each calculated for such period: (a) Consolidated Net Income of such Person
for such period of determination plus (b) to the extent deducted in
determining Consolidated Net Income, Consolidated Interest Expense of such
Person, charges against income for foreign, federal, state, and local taxes,
depreciation and amortization expense and other non-cash charges (excluding
accruals for cash expenses made in the ordinary course of business) minus
(c) extraordinary or non-recurring gains for such period plus (d) extraordinary
or non-recurring losses for such period minus (e) any gain realized
upon the sale or other disposition of any assets of such Person or any of its
Subsidiaries for such period plus (f) any loss realized upon the
sale or other disposition of any assets of such Person or any of its
Subsidiaries for such period minus (g) the income of any other
Person (other than wholly-owned Subsidiaries of such Person) in which such
Person or a wholly owned Subsidiary of such Person has an ownership interest
except to the extent such income is received by such Person or such wholly-owned
Subsidiary in a cash distribution during such period, all as determined on a
consolidated basis in accordance with GAAP.


 


“Consolidated
Interest Expense” means, for any Person for any period, (a) the
interest expense of such Person and its Subsidiaries calculated on a
consolidated basis in accordance with GAAP for such period, minus (b) the
interest income of such Person and its Subsidiaries for such period and the
amortization of any deferred financing costs incurred in connection with this
Agreement to the extent otherwise included in the calculations thereof.


 


“Consolidated
Net Debt” means, as of any date of determination for any Person, (a) the
Debt minus (b) Free Cash Balances, in each case of such Person and
its Subsidiaries calculated on a consolidated basis as of such time.


 


“Consolidated
Net Income” means, for any Person for any period, the net income of such
Person and its Subsidiaries calculated on a consolidated basis for such period
after taxes, as determined in accordance with GAAP.


 


“Continue”,
“Continuation”, and “Continued” each refers to a continuation of
Advances for an additional Interest Period upon the expiration of the Interest
Period then in effect for such Advances.


 


“Continuing
Director” means an individual who (a) is a member of the full Board of
Directors of the Parent and (b) either (i) was a member of the Board
of Directors of the Parent on the Effective Date or (ii) whose nomination
for election or election to the Board of Directors of the Parent was approved
by vote of at least two-thirds of the directors then still in office who were
either directors on the Effective Date or whose election or nomination for
election was previously so approved.


 


“Debt”
means, for any Person, without duplication, all of the following, whether or
not included as indebtedness or liabilities in accordance with GAAP:


 


8
















 


(a)           all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments;


 


(b)           obligations of such Person to pay the deferred purchase
price of property or services (other than trade accounts payable in the
ordinary course of business);


 


(c)           Capital Leases;


 


(d)           all obligations of such Person in respect of letters of
credit, bankers’ acceptances, bank guarantees, surety bonds or similar
instruments which are issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable;


 


(e)           net obligations of such Person under any Swap Contract;


 


(f)            Off-Balance Sheet Liabilities;


 


(g)           indebtedness secured by a Lien on Property now or
hereafter owned or acquired by such Person (including indebtedness arising
under conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited in
recourse;


 


(h)           all Charter Obligations of such Person; and


 


(h)           all Guarantees of such Person in respect of any of the
foregoing.


 


For all purposes hereof, the
Debt of any Person shall include the Debt of any partnership or joint venture
(other than a joint venture that is itself a corporation or limited liability
company) in which such Person is a general partner or a joint venturer, unless
such Debt is expressly made non-recourse to such Person.  The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date.  The amount of
any Capital Lease or Off-Balance Sheet Liability as of any date shall be deemed
to be the amount of Attributable Indebtedness in respect thereof as of such
date.


 


“Debt Service” means,
for any Person for any period, the sum of the aggregate amount of (a) scheduled
installments of principal and interest paid or which will be payable by such
Person and (b) net settlements paid or payable under interest rate Swap
Contracts, each during such period and with respect to the Advances.


 


“Debt Service Reserve
Account” has the meaning set forth in Section 5.14(b)(iii).


 


“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.


 


“Delivery Date” means
any of the Rig 1 Delivery Date, Rig 2 Delivery Date, Rig 3 Delivery Date and
Rig 4 Delivery Date, as the context may require.


 


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


 


9

















 


“Drilling Contract”
means any dayrate drilling contract (a) having an indicated duration of at
least twelve (12) months (including any exercised extensions or committed
renewals), (b) has terms and conditions satisfactory to the Joint
Bookrunners, and (c) entered into between a Loan Party and a counterparty
that (i) is listed on Schedule 1.01(a), (ii) is acceptable to
the Joint Bookrunners and has, or whose ultimate parent has, an Investment
Grade Rating or (iii) has provided Acceptable Credit Support from an
Acceptable Credit Support Provider.


 


“Drillship Contract 1”
means (a) the Contract for the Construction and Sale of One Deepwater
Drillship (Hull No. 3601) dated as of September 13, 2007 between
Mandarin and Daewoo Shipbuilding & Marine Engineering Co., Ltd., a
corporation organized and existing under the laws of the Republic of Korea and (b) the
Agreement for the Purchase of One Deepwater Drillship (Hull No. 3601) by
and between Mandarin and OGIL dated as of March 24, 2008.


 


“Drillship Contract 2”
means the Contract for the Construction and Sale of One Deepwater Drillship
(Hull No. 3602) dated as of December 27, 2007 between Mandarin and
Daewoo Shipbuilding & Marine Engineering Co., Ltd., a corporation
organized and existing under the laws of the Republic of Korea.


 


“Drillship Contract
Option Agreement” means Section 22 of the Agreement for the Purchase
of One Deepwater Drillship (Hull No. 3601) by and between Mandarin and
OGIL dated as of March 24, 2008, pursuant to which OGIL has been granted
an option to purchase one deepwater drillship (Hull No. 3602) being
constructed under Drillship Contract 2.


 


“Drillship Debt”
means Debt for which (a) the drillship constructed pursuant to Drillship
Contract 1 or Drillship Contract 2 serves as principal security, or (b) Drillship
Contract 1, Drillship Contract 2, or the Drillship Contract Option Agreement,
or some combination thereof, serves as principal security; provided, however,
that (i) such Debt is non-recourse to OGIL and its Subsidiaries, (ii) neither
OGIL nor any of its Subsidiaries shall have any liability whatsoever, whether
direct or indirect, contingent or otherwise with respect to such Debt, and (iii) the
provider of such Debt shall have no recourse to any assets of, or Equity
Interests in, OGIL or its Subsidiaries (other than the Drillship Contract and
the Equity Interests of any Drillship Entity).


 


“Drillship Documents”
means (a) the Drillship Contract 1, (b) the Drillship Contract 2, (c) the
Drillship Contract Option Agreement, and (d) the Transfer Agreements.


 


“Drillship Entity”
means any Subsidiary of the Parent formed in connection with any Drillship
Debt, substantially all of the assets of which consist of (a) the Drillship
Contract 1, and the drillship being constructed and purchased pursuant thereto,
or (b) the Drillship Contract 2, the Drillship Contract Option Agreement
and the drillship being constructed and purchased pursuant thereto.


 


“Earnings Account”
has the meaning set forth in Section 5.14(b)(i).


 


“Earnings Collateral”
means (a) all freights, hire and other moneys earned and to be earned, due
or to become due, or paid or payable to, or for the account of, any Loan Party,
of whatsoever nature, arising out of or as a result of the use, operation,
pooling or chartering by such Loan Party or its agents of any Rig, including,
without limitation, all rights arising out of 


 


10

















 


the
owner’s lien on cargoes and subfreights thereunder, (b) all moneys and
claims for moneys due and to become due to any Loan Party, and all claims for
damages, arising out of the breach of any and all present and future drilling
contracts, charter parties, pooling arrangements, bills of lading, contracts
and other engagements of affreightment or for the carriage or transportation of
cargo, and operations of every kind whatsoever of any Rig and in and to any and
all claims and causes of action for money, loss or damages that may accrue or
belong to any Loan Party, its successors or assigns, arising out of or in any
way connected with the present or future use, operation, pooling or chartering
of any Rig or arising out of or in any way connected with any and all present
and future requisitions, drilling contracts, charter parties, pooling
arrangements, bills of lading, contracts and other engagements of affreightment
or for the carriage or transportation of cargo, and other operations of any
Rig, (c) all moneys and claims due and to become due to any Loan Party,
and all claims for damages and all insurances and other proceeds, in respect of
the actual or constructive total loss of or requisition of use of or title to
any Rig, and (d) any proceeds of any of the foregoing and all interest and
earnings from the investment of any of the foregoing and the proceeds thereof.


 


“Effective Date”
means the date on which the conditions precedent set forth in Section 3.01
shall have been satisfied, which date shall not be later than June 30,
2008.


 


“Eligible Assignee”
means (a) a Lender, (b) an Affiliate of a Lender, (c) an
Approved Fund, (d) a commercial bank organized under the laws of any other
country which is a member of the OECD, or a political subdivision of any such
country, and having total assets in excess of $1,000,000,000, provided that
such bank is acting through a branch or agency located in the country in which
it is organized or another country which is also a member of the OECD approved
by the Facility Agent; and (e) any other Person (other than a natural
person) approved by the Facility Agent, and, so long as no Default exists, the
Parent, in either case, such approval not to be unreasonably withheld or
delayed; provided that notwithstanding the foregoing, “Eligible
Assignee” shall not include the Parent or any of the Parent’s Affiliates or
Subsidiaries.


 


“Environmental Law”
means all former, current and future Federal, state, local and foreign laws
(including common law), treaties, regulations, rules, ordinances, codes,
decrees, judgments, directives, orders (including consent orders), and
agreements in each case, relating to protection of the environment, natural
resources, human health and safety or the presence, Release of, or exposure to,
Hazardous Materials, or the generation, manufacture, processing, distribution,
use, treatment, storage, transport, recycling or handling of, or the
arrangement for such activities with respect to, Hazardous Materials.


 


“Environmental Liability”
means all liabilities, obligations, damages, losses, claims, actions, suits,
judgments, orders, fines, penalties, fees, expenses and costs (including
administrative oversight costs, natural resource damages and remediation
costs), whether contingent or otherwise, arising out of or relating to (a) compliance
or non-compliance with any Environmental Law, (b) the generation, use,
handling, transportation, storage, treatment or disposal of any Hazardous
Materials, (c) exposure to any Hazardous Materials, (d) the Release
of any Hazardous Materials or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.


 


11

















 


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


 


“Equity” means, for
any Person at any time, the total shareholders’ equity of such Person and its
Subsidiaries on a consolidated basis determined in accordance with GAAP.


 


“Equity Interests”
means shares of capital stock, partnership interests, membership interests in a
limited liability company, beneficial interests in a trust or other equity
interests in any Person, or any obligations convertible into or exchangeable
for, or giving any Person a right, option or warrant to acquire, such equity
interests or such convertible or exchangeable obligations.


 


“ERISA” means the
Employee Retirement Income Security Act of 1974, as amended from time-to-time,
and any successor statute and all rules and regulations promulgated
thereunder.


 


“ERISA Affiliate”
means any trade or business (whether or not incorporated) under common control
with the Parent within the meaning of Section 414(b) or (c) of
the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).


 


“ERISA Event” means (a) a
Reportable Event with respect to a Pension Plan; (b) a withdrawal by the
Parent or any ERISA Affiliate from a Pension Plan subject to Section 4063
of ERISA during a plan year in which it was a substantial employer (as defined
in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) a
complete or partial withdrawal by the Parent or any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Sections 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes
grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan or Multiemployer Plan;
or (f) the imposition of any liability under Title IV of ERISA, other than
for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon
the Parent or any ERISA Affiliate.


 


“Eurocurrency Liabilities”
has the meaning assigned to that term in Regulation D.


 


“Eurodollar Advance”
means an Advance that bears interest based on the Eurodollar Rate.


 


“Eurodollar Rate”
means, with respect to a Eurodollar Advance for the relevant Interest Period,
the applicable British Bankers’ Association Interest Settlement Rate for
deposits in Dollars appearing on Reuters Reference LIBOR01 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, provided
that if the Reuters Reference LIBOR01 is not available to the Facility Agent
for any reason, then the applicable Eurodollar Rate for the relevant Interest
Period shall instead be the rate determined by the Facility Agent to be the
rate at which the Facility Agent or one of its Affiliate banks offers to place
deposits in Dollars with first class banks in the London 


 


12

















 


interbank
market at approximately 11:00 a.m. (London time) two Business Days prior
to the first day of such Interest Period, in an amount equal to $10,000,000 and
having a maturity equal to such Interest Period.


 


“Eurodollar Rate Reserve
Percentage” of any Lender for the Interest Period for any Eurodollar
Advance means the reserve percentage applicable during such Interest Period (or
if more than one such percentage shall be so applicable, the daily average of
such percentages for those days in such Interest Period during which any such
percentage shall be so applicable) under regulations issued from time-to-time
by the Federal Reserve Board for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or other marginal
reserve requirement) for such Lender with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities having a term equal to such
Interest Period.  The Eurodollar Rate
Reserve Percentage shall be adjusted automatically on and as of the effective
date of any change in any reserve percentage.


 


“Events of Default”
has the meaning set forth in Section 7.01.


 


“Excess Cash Flow”
has the meaning set forth in Section 7.06(a).


 


“Excess Cash Flow
Certificate” means an Excess Cash Flow Certificate signed by a Responsible
Officer of the Parent in substantially the form of the attached Exhibit L.


 


“Excluded Entity” means
any Drillship Entity (including without limitation, Vantage Deepwater) and any
Subsidiary thereof, any Bidding Entity and any Subsidiary thereof, any
Administrative Entity and any Subsidiary thereof, Vantage Int’l Management
(Singapore), Vantage Int’l Payroll (Singapore), and Vantage US Payroll.


 


“Excluded Taxes”
means, with respect to any Mandated Lead Arranger, any Joint Bookrunner, any
Agent, any Lender, any Issuing Bank or any other recipient of any payment to be
made by or on account of any obligation of a Loan Party hereunder, (a) taxes
imposed on or measured by its overall net income (however denominated), and
franchise taxes imposed on it (in lieu of net income taxes), by the
jurisdiction (or any political subdivision thereof) under the laws of which
such recipient is organized or in which its principal office is located or, in
the case of any Lender, in which its applicable lending office is located, (b) any
branch profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction in which such Loan Party is located and (c) in
the case of a Foreign Lender, any withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
hereto (or designates a new lending office) or is attributable to such Foreign
Lender’s failure or inability (other than as a result of a Change in Law) to
comply with Section 2.11(e), except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time of designation of a
new lending office (or assignment), to receive additional amounts from such
Loan Party with respect to such withholding tax pursuant to Section 2.11(a).


 


“F3 Capital” means F3
Capital, a Cayman Islands exempted company also referred to as “F3 Fund”.


 


“Facility Agent”
means Natixis in its capacity as Facility Agent for the Lenders under the Loan
Documents and any successor in such capacity appointed pursuant to Section 9.06.


 


13

















 


“Federal Funds Effective
Rate” means, for any day, a fluctuating interest rate per annum equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published for such day (or, if such day is not a Business Day, for the
immediately 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 at approximately 10:00 a.m. (New York time) on
such day on such transactions received by the Facility 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.


 


“Fee Letters” means (a) the
letter dated as of January 24, 2008 among Vantage Energy, the Joint
Bookrunners and the Facility Agent, as amended by amendments dated as of May 15,
2008 and May 22, 2008 and (b) the letter dated as of January 24,
2008 between Vantage Energy and the Facility Agent.


 


“Final Maturity Date”
means the earlier of (a) June 30, 2017 and (b) the earlier
acceleration of all Obligations pursuant to Article VII.


 


“Fixed Charge Coverage
Ratio” means, for any Person and its Subsidiaries on a consolidated basis,
as of the end of any fiscal quarter, the ratio of (a) Consolidated EBITDA
of such Person for such period to (b) the sum (without duplication) of
foreign, federal, state, and local taxes paid in cash, Debt Service and
Permitted Capital Expenditures, each for such Person and for such period.


 


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


 


“Free Cash Balances”
means, for any Person as at any time, for such Person and its Subsidiaries on a
consolidating basis, as of any date of determination, the aggregate amount of
unrestricted cash and Cash Equivalents of such Person (including amounts
required by this Agreement to be deposited into and held in the Debt Service
Reserve Accounts but excluding amounts required by this Agreement to be
deposited into and held in the Retention Accounts).


 


“Fund” means any
Person (other than a natural person) that is (or will be) engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business.


 


“GAAP” means United
States generally accepted accounting principles applied on a consistent basis.


 


“Governmental Authority”
means the government of the United States of America or any other nation, or of
any political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank, or other
entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or 


 


14

















 


pertaining
to government (including any supra-national bodies such as the European Union
or the European Central Bank).


 


“Governmental Proceedings”
means any action or proceedings by or before any Governmental Authority,
including, without limitation, the promulgation, enactment or entry of any
Legal Requirement.


 


“Guarantors” the
Parent, OGIL, Vantage Energy, Vantage Int’l Management (Caymans), Vantage Int’l
Payroll (Caymans) and any other Subsidiary of the Parent (other than any
Excluded Entity).


 


“Guarantee” means, as
to any Person, (a) any obligation, contingent or otherwise, of such Person
guaranteeing or having the economic effect of guaranteeing any Debt or other
obligation payable or performable by another Person (the “primary obligor”)
in any manner, whether directly or indirectly, and including any obligation of
such Person, direct or indirect, (i) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Debt or other obligation or
to purchase (or to advance or supply funds for the purchase of) any security
for the payment of such Debt or other obligation, (ii) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Debt or other obligation of the payment or performance of such Debt or
other obligation, (iii) to maintain working capital, equity capital or any
other financial statement condition or liquidity or level of income or cash
flow of the primary obligor so as to enable the primary obligor to pay such
Debt or other obligation, or (iv) entered into for the purpose of assuring
in any other manner the owner of such Debt or other obligation of the payment
or performance thereof or to protect such owner against loss in respect thereof
(in whole or in part), or (b) any Lien on any assets of such Person
securing any Debt or other obligation of any other Person, whether or not such
Debt or other obligation is assumed by such Person; provided, however,
that the term “Guarantee” shall not include endorsements for collection or
deposit in the ordinary course of business. 
The amount of any Guarantee shall be deemed to be an amount equal to the
stated or determinable amount of the related primary obligation, or portion
thereof, in respect of which such Guarantee is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
as determined by the guaranteeing Person in good faith.  The term “Guarantee” as a verb has a corresponding
meaning.


 


“Hazardous Material”
means (a) any petroleum products or byproducts and all other hydrocarbons,
coal ash, radon gas, asbestos, urea formaldehyde foam insulation,
polychlorinated biphenyls and chlorofluorocarbons and (b) any chemical, material,
substance or waste that is prohibited, limited or regulated by or pursuant to
any Environmental Law.


 


“Indemnification Proceeds”
means any proceeds received by any Loan Party under any Rig Construction
Contract pursuant to any indemnity or warranty thereunder, including, without
limitation, any payments made by the Shipyard as liquidated damages in
connection with any delay in the delivery of any Rig beyond the contracted for
delivery date.


 


“Indemnified Taxes”
means any Taxes other than Excluded Taxes.


 


15

















 


“Insurance Advisor”
means Bankserve, London Special Risk, Bankassure, AIG or an independent
maritime insurance broker selected by the Collateral Agent and reasonably
acceptable to the Lenders.


 


“Insurance Collateral”
means (a) all Insurances Policies in respect of the Rigs, whether
heretofore, now or hereafter effected, and all renewals of or replacements for
the same, (b) all claims, returns of premium and other moneys and claims
for moneys due and to become due under or in respect of the Insurance Policies,
(c) all other rights of the Loan Parties under or in respect of the
Insurance Policies and (d) any proceeds of any of the foregoing.


 


“Insurance Policies”
includes (a) all insurances (including, without limitation, all
certificates of entry in protection and indemnity and war risks associations or
clubs) in respect of the Rigs, whether heretofore, now or hereafter effected,
and all renewals of or replacements for the same, (b) all claims, returns
of premium and other moneys and claims for moneys due and to become due under
or in respect of said insurances, and (c) all other rights of each owner
of a Rig under or in respect of said insurances.


 


“Interest Period”
means, for each Eurodollar Advance comprising part of a Borrowing, the period
commencing on the date of such Eurodollar Advance or the date of the conversion
of any existing Base Rate Advance into such Eurodollar Advance and ending on
the last day of the period selected by the applicable Borrower pursuant to the
provisions below and Section 2.02 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 such Borrower pursuant to
the provisions below and Section 2.02.  The duration of each such Interest Period
shall be one, three or six months, in each case as such Borrower may select; provided,
however, that:


 


(a)           no Borrower may select any Interest Period for any Advance
which ends after any principal repayment date unless, after giving effect to
such selection, the aggregate unpaid principal amount of Advances having
Interest Periods which end on or before such principal repayment date shall be
at least equal to the amount of Advances due and payable on or before such
date;


 


(b)           Interest Periods commencing on the same date for Advances
by each Lender comprising part of the same Borrowing shall be of the same
duration;


 


(c)           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;


 


(d)           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 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;


 


16

















 


(e)           no Borrower may select any Interest Period for any Advance
which ends after the Applicable Maturity Date; and


 


(f)            at the Facility Agent’s sole discretion, no Borrower may
select any Interest Period for any Eurodollar Advance longer than one month
until the satisfactory completion of the syndication of this Agreement by the
Joint Bookrunners.


 


“Investment” of any
Person means any loan, advance (other than commission, travel and similar
advances to officers and employees, drawing accounts and similar expenditures
or prepayments or deposits made in the ordinary course of business) or
extension of credit that constitutes Debt of the Person to whom it is extended
or contribution of capital by such Person; stocks, bonds, mutual funds,
partnership interests, notes (including structured notes), debentures or other
securities owned by such Person; any deposit accounts and certificates of
deposit owned by such Person (but excluding capital expenditures of such Person
determined in accordance with GAAP).


 


“Investment Grade Rating”
of a Person means that such Person has a minimum debt rating on its long-term
senior unsecured non-credit enhanced debt securities of at least BBB- as
determined by S&P and at least Baa3 as determined by Moody’s (or if such
Person has only one debt rating on its long-term senior unsecured non-credit
enhanced debt securities, such rating is at least BBB- as determined by S&P
or at least Baa3 as determined by Moody’s).


 


“Issuing Bank” means
Natixis or any other Lender designated in writing to the Facility Agent by the
Borrower (and consented to by such Lender) as an issuer of Letters of Credit,
each in their respective capacity as an issuer of Letters of Credit, and any
successor Issuing Bank pursuant to Section 9.06.


 


“Joint Bookrunners”
means Natixis, BTMU Capital Corporation and Fortis Bank S.A./N.V., New York
Branch.


 


“LC Cash Collateral
Account” means a special interest bearing cash collateral account pledged
by the applicable Borrower to the Collateral Agent for the ratable benefit of
the Secured Parties containing cash deposited pursuant to Section 2.07(c),
2.14(e), 7.02 or 7.03 to be maintained at the Collateral
Agent’s office in accordance with Section 2.14(g) and bear
interest or be invested in the Collateral Agent’s reasonable discretion.


 


“Legal Requirement”
means, as to any Person, any law, statute, ordinance, decree, award,
requirement, order, writ, judgment, injunction, rule, regulation (or official
interpretation of any of the foregoing) of, and the terms of any license or
permit issued by, any Governmental Authority which is binding on such Person.


 


“Lenders” means the
lenders listed on the signature pages of this Agreement and any other
Person that has become a party hereto pursuant to an Assignment and Acceptance
(other than any such Person that has ceased to be a party hereto pursuant to an
Assignment and Acceptance).


 


“Letter of Credit”
means any letter of credit issued hereunder.


 


17

















 


“Letter of Credit
Application” means an application and agreement for the issuance or
amendment of a Letter of Credit in the form from time to time in use by an
Issuing Bank.


 


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


 


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


 


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


 


“Leverage Ratio”
means, for any Person as of the end of any fiscal quarter, the ratio of (a) Consolidated
Net Debt for such Person and its Subsidiaries on a consolidated basis as of the
end of such fiscal quarter to (b) Consolidated EBITDA for such Person and
its Subsidiaries on a consolidated basis for the then most-recently ended four
fiscal quarters.


 


“Lien” means, with
respect to any asset, (a) any mortgage, deed of trust, lien (statutory or
other), pledge, assignment, preference, deposit arrangement, encumbrance,
charge, security interest, priority or other security or preferential
arrangement of any kind or nature whatsoever, whether voluntary or involuntary
in or on such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase
option, call or similar right of a third party with respect to such securities.


 


“Loan Documents”
means this Agreement, any Notes issued pursuant to Section 2.02(g),
the Letter of Credit Documents, the Security Documents, the Fee Letters and
each other agreement, instrument or document executed by any Loan Party or any
of their respective officers at any time in connection with this Agreement, all
as amended, restated, supplemented or modified from time to time.


 


“Loan Party” means
any Borrower and any Guarantor.


 


“Majority Lenders”
means, as of any date of determination, (a) before all of the Commitments
terminate, Lenders holding more than 662/3 % of the then aggregate
Revolving Commitments, Unused Term Commitments, Unused Top-Up Commitments,
unpaid principal amount of the Term Advances and the Top-Up Advances and (b) thereafter,
Lenders holding more than 662/3% of the aggregate unpaid principal amount of the Advances and
participation interests in the Letter of Credit Exposure at such time.


 


“Mandarin” means
Mandarin Drilling Corporation, a corporation organized and existing under the
laws of the Marshall Islands.


 


“Mandated Lead Arrangers”
means Natixis, BTMU Capital Corporation, Fortis Bank S.A./N.V., New York Branch
and each other Lender designated as such by the Facility Agent.


 


18

















 


“Market Value” means,
as of any date of determination, the fair market value (or to the extent that
the Rig Appraisal Reports, if two Rig Appraisal Reports are required to be
delivered by this Agreement, provide for different fair market values, the
arithmetical average of such fair market values) of each Rig set forth in the
most recent Rig Appraisal Report covering such Rig.  To the extent that any Rig Appraisal Report
provides a range of fair market values for any Rig, then the fair market value
for such Rig shall be the arithmetical average of the highest and lowest fair
market values given for such Rig in such Rig Appraisal Report.  Concurrently with delivery of any subsequent
Rig Appraisal Reports, the Collateral Agent shall calculate the Market Values
as of the date of such reports. The recalculated Market Values shall become
effective immediately upon receipt of such subsequent Rig Appraisal Reports by
the Collateral Agent.  In addition, each Market
Value shall be adjusted from time to time to reflect any Casualty Event or any
Collateral Disposition occurring with respect to any Rig to reflect the amount
set forth in the Additional Appraisal Report covering such Rig to be delivered
by the applicable Borrower pursuant to Section 5.06(g).


 


“Material Adverse Effect”
means a material adverse change in, or a material adverse effect on, (a) the
operations, business, assets, properties, liabilities (actual or contingent),
condition (financial or otherwise) or prospects of the Loan Parties and their
Subsidiaries, taken as a whole, (b) a material impairment of the rights
and remedies of any Agent or any Lender upon any Loan Document, or of the
ability of any Loan Party to perform its obligations under any Loan Document to
which it is a party or (c) the legality, validity, binding effect or
enforceability against any Loan Party of any of the Loan Documents to which it
is a party.


 


“Maximum Rate” means
the maximum nonusurious interest rate under applicable law (determined under
such laws after giving effect to any items which are required by such laws to
be construed as interest in making such determination, including without
limitation if required by such laws, certain fees and other costs).


 


“Moody’s” means
Moody’s Investors Service, Inc.


 


“Multiemployer Plan”
means any employee benefit plan of the type described in Section 4001(a)(3) of
ERISA, to which the Parent or any ERISA Affiliate makes or is obligated to make
contributions, or during the preceding five plan years, has made or been
obligated to make contributions.


 


“Notice of Borrowing”
means a notice of borrowing in the form of the attached Exhibit G
signed by a Responsible Officer of the Borrower.


 


“Notice of Continuation”
means a notice of continuation in the form of the attached Exhibit H
signed by a Responsible Officer of the Borrower.


 


“Obligations” means
all advances to, and debts, liabilities, obligations, covenants and duties of,
any Loan Party arising under any Loan Document or otherwise with respect to any
Advance, Letter of Credit or any Swap Contract to which a Lender or its
Affiliate is a party, whether direct or indirect (including those acquired by
assumption), absolute or contingent, due or to become due, now existing or
hereafter arising and including interest and fees that accrue after the
commencement by or against any Loan Party or any Affiliate thereof of any
proceeding 


 


19

















 


under
any law relating to bankruptcy, insolvency or reorganization or relief of
debtors naming such Person as the debtor in such proceeding, regardless of
whether such interest and fees are allowed claims in such proceeding.


 


“OFE” means owner
furnished equipment.


 


“Off-Balance Sheet
Liability” of a Person means (a) any repurchase obligation or
liability of such Person with respect to accounts or notes receivable sold by
such Person, (b) Synthetic Lease Obligations, or (c) any obligation
arising with respect to any other transaction which is the functional
equivalent of or takes the place of borrowing but which does not constitute a
liability on the balance sheets of such Person (but, for the avoidance of
doubt, excluding any Operating Leases).


 


“OGIL” means Offshore
Group Investment Limited, a Cayman Islands exempted company.


 


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


 


“Other Taxes” means
all present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies arising from any payment made
hereunder or under any other Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, this Agreement or any other Loan
Document.


 


“Parent” means
Vantage Drilling Company, a Cayman Islands exempted company.


 


“Payment Dates” means
the last day of each March, June, September and December.


 


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


 


“Pension Plan” means
any “employee pension benefit plan” (as such term is defined in Section 3(2) of
ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA
and is sponsored or maintained by the Parent or any ERISA Affiliate or to which
the Parent or any ERISA Affiliate contributes or has an obligation to
contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of
ERISA, has made contributions at any time during the immediately preceding five
plan years.


 


“Permitted Capital
Expenditures” means Capital Expenditures permitted to be made pursuant to Section 6.16.


 


“Permitted Investor”
means F3 Capital, TMT, or any of their Affiliates which are controlled by Hsin
Chi Su (referred to as “Nobu” or “Nobu Su”).


 


“Permitted Liens” has
the meaning set forth in Section 6.01.


 


20

















 


“Permitted Operating
Expenses” means, for any Person, all costs and expenses incurred by such
Person in the ordinary course of its business, excluding Debt Service but
including without limitation and without duplication):


 


(a)           operating costs and expenses incurred in connection with
the administration and operation of such Person and the applicable Rig; and


 


(b)           all other costs and expenses which the Facility Agent
acting with the consent of the Majority Lenders and such Person agree may be
Permitted Operating Expenses for the applicable Rig;


 


up to a maximum of the sum
of (i) $60,000 a day (which amount shall be escalated annually on the
anniversary of the Rig 1 Delivery Date at an annual rate equal to the lesser of
(A) 15% or (B) the market escalation rate (as determined by Parent
and Majority Lenders)), plus (ii) other expenses or obligations that are
required to be reimbursed directly by third party customers, plus (iii) for
any liability for taxes which such Person has notified to the Facility Agent.


 


“Permitted Prior Liens”
means, at any time with respect to a Rig:


 


(i)            Liens for crews’ wages (including the wages of the master
of the Rig) that are discharged in the ordinary course of business and have
accrued for not more than thirty (30) days unless any such Lien is being
contested in good faith and by appropriate proceedings or other acts by the
relevant Loan Party and such Loan Party shall have set aside on its books
adequate reserves with respect to such Lien and so long as such deferment in
payment shall not subject the Rig to sale, forfeiture or loss;


 


(ii)           Liens for salvage (including contract salvage) or general
average, and Liens for wages of stevedores employed by the owner of the Rig,
the master of the Rig or a charterer or lessee of such Rig, which in each case
have accrued for not more than thirty (30) days unless any such Lien is being
contested in good faith and by appropriate proceedings or other acts by the
relevant Loan Party and such Loan Party shall have set aside on its books
adequate reserves with respect to such Lien and so long as such deferment in
payment shall not subject the Rig to sale, forfeiture or loss;


 


(iii)          shipyard Liens and other Liens arising by operation of law
arising in the ordinary course of business in operating, maintaining and
repairing the Rig (other than those referred to in (i) and (ii) above),
which in each case have accrued for not more than thirty (30) days unless any
such Lien is being contested in good faith and by appropriate proceedings or
other acts by the relevant Loan Party, and such Loan Party shall have set aside
on its books adequate reserves with respect to such Lien and so long as such
deferment in payment shall not subject the Rig to sale, forfeiture or loss;
provided that, except in respect of maritime Liens for necessaries provided in
the United States to any Rig registered under a foreign flag, any such Lien
shall be permitted only to the extent it is subordinate to the Lien of the
relevant Rig Mortgage in respect of such Rig;


 


(iv)          Liens for damages arising from maritime torts which are
unclaimed, or are covered by insurance and any deductible applicable thereto,
or in respect of which a bond or 


 


21

















 


other
security has been posted on behalf of the relevant Loan Party with the
appropriate court or other tribunal to prevent the arrest or secure the release
of the Rig from arrest, unless any such Lien is being contested in good faith
and by appropriate proceedings or other acts by the relevant Loan Party, and
such Loan Party shall have set aside on its books adequate reserves with
respect to such Lien and so long as such deferment in payment shall not subject
the Rig to sale, forfeiture or loss;


 


(v)           Liens that, as indicated by the written admission of
liability therefor by an insurance company, are covered by insurance (subject
to reasonable deductibles);


 


(vi)          Liens for charters or subcharters or leases or subleases
permitted under this Agreement; provided that any such Lien shall be permitted
only to the extent it is subordinate to the Lien of the relevant Rig Mortgage
in respect of such Rig, except with respect to any such Lien in existence on
the date hereof; and


 


(vii)         Liens of any Rig Mortgage in favor of the Collateral Agent.


 


“Person” means and
includes natural persons, corporations, limited partnerships, general
partnerships, limited liability companies, limited liability partnerships,
joint stock companies, joint ventures, associations, companies, trusts, banks,
trust companies, land trusts, business trusts or other organizations, whether
or not legal entities, and governments and agencies and political subdivisions
thereof.


 


“Plan” means any
Pension Plan or Multiemployer Plan.


 


“Pledge Agreement”
means the Pledge Agreement in substantially the form of Exhibit I
among one or more of the Loan Parties and the Collateral Agent for the benefit
of the Secured Parties.


 


“Pro Forma Financial
Statements” means the unaudited pro forma consolidated and consolidating
balance sheet of the Parent and its Subsidiaries as of March 31, 2008 and
related consolidated statements of income or operations, stockholders’ equity
and cash flows for such period, prepared giving effect to the Transactions as
if they had occurred on such date, including, without limitation, sufficient
information in order determine the results of operations for OGIL and its
Subsidiaries.


 


“Property” of any
Person means any interest of such Person in any property or asset (whether
real, personal or mixed, tangible or intangible).


 


“Pro Rata Share”
means, with respect to each Lender at any time, (a) before all of the
Commitments terminate, the ratio (expressed as a percentage) of such Lender’s
Revolving Commitments, Unused Term Commitments, Unused Top-Up Commitments, and
outstanding principal amount of Term Advances and Top-Up Advances at such time
to the aggregate Revolving Commitments, Unused Term Commitments, Unused Top-Up
Commitments, and aggregate outstanding principal amount of Term Advances and
Top-Up Advances at such time and (b) thereafter, the ratio (expressed as a
percentage) of such Lender’s aggregate outstanding Advances at such time to the
aggregate outstanding Advances of all the Lenders at such time.  The initial Pro Rata Share of each Lender is
set forth opposite the name of such Lender on 


 


22

















 


Annex
I or in the Assignment and Assumption pursuant to which such Lender
becomes a party hereto, as applicable.


 


“Projections” means
the Parent’s forecasted consolidated and consolidating: (a) balance
sheets; (b) profit and loss statements; (c) cash flow statements; and
(d) capitalization statements, all prepared on a Subsidiary by Subsidiary
basis and based upon good faith estimates and assumptions by the Parent
believed to be reasonable at the time made, together with appropriate
supporting details and a statement of underlying assumptions.


 


“Proxy Statement”
means the Proxy Statement dated as of May 22, 2008 filed by Vantage Energy
pursuant to Section 14(a) of the Exchange Act.


 


“Reference Lenders”
means Natixis, Fortis Bank S.A./N.V., New York Branch and The Bank of
Tokyo-Mitsubishi UFJ, Ltd. London Branch.


 


“Regulations T, U, X and
D” means Regulations T, U, X, and D of the Federal Reserve Board, as the
same is from time-to-time in effect, and all official rulings and
interpretations thereunder or thereof.


 


“Related Parties”
means, with respect to any Person, such Person’s Affiliates and the partners,
directors, officers, employees, agents and advisors of such Person and of such
Person’s Affiliates.


 


“Release” means any
release, spill, emission, leaking, dumping, injection, pouring, deposit,
disposal, discharge, dispersal, leaching or migration into or through the
environment or within or upon any building, structure, facility or fixture.


 


“Reportable Event”
means any of the events set forth in Section 4043(c) of ERISA.


 


“Responsible Officer”
means the Chief Executive Officer, Chief Financial Officer, Treasurer, Chief
Accounting Officer, Assistant Treasurer, Finance Director or Tax Director of a
Person.


 


“Restricted Payment”
means, with respect to any Person: (a) the declaration or making by such
Person or any of its Subsidiaries of any dividend or other distribution
(whether in cash, securities or other property) with respect to any Equity Interest
of such Person; (b) any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancelation or termination of
any Equity Interests in such Person or any Subsidiary thereof or any option,
warrant or other right to acquire any such Equity Interests in such Person or
any Subsidiary thereof; (c) any payment or prepayment (scheduled or
otherwise) of principal of, premium, if any, or interest on, any subordinated
Debt, or the issuance of a notice of an intention to do any of the foregoing;
and (d) any payment by such Person or any of its Subsidiaries of any
management, consulting or similar fees to any Affiliate, whether pursuant to a
management agreement or otherwise.


 


“Retention Account”
has the meaning set forth in Section 5.14(b)(ii).


 


23
















 


“Revolving Advance”
means an advance by a Lender to a Borrower as part of a Revolving Borrowing.


 


“Revolving Borrowing”
means a borrowing consisting of simultaneous Revolving Advances made by each
Lender to a Borrower pursuant to Section 2.01(c).


 


“Revolving Commitment”
means, for each Lender, its obligation to (a) make Revolving Advances to
the Borrowers pursuant to Section 2.01, and (b) purchase
participations in L/C Obligations pursuant to Section 2.14(b), each
in an aggregate principal amount at any one time outstanding not to exceed the
amount set forth opposite such Lender’s name on Annex I or in the
Assignment and Assumption pursuant to which such Lender becomes a party hereto,
as applicable, as such amount may be adjusted from time to time in accordance
with this Agreement.


 


“Revolving Tranche 1
Advance” means any Revolving Advance by a Lender to Borrower 1.


 


“Revolving Tranche 2
Advance” means any Revolving Advance by a Lender to Borrower 2.


 


“Revolving Tranche 3
Advance” means any Revolving Advance by a Lender to Borrower 3.


 


“Revolving Tranche 4
Advance” means any Revolving Advance by a Lender to Borrower 4.


 


“Rig” means any of
Rig 1, Rig 2, Rig 3 or Rig 4, and “Rigs” means all such Rigs
collectively.


 


“Rig 1” means the
Baker Marine Pacific Class 375 ultra-premium jackup drilling rig hull
number P2018, including the related machinery, equipment and gear, including
without limitation any OFE.


 


“Rig 1 Construction
Contract” means the Rig Construction Contract (P2018) dated as of January 10,
2007 between Bluesky and the Shipyard, as supplemented by the Supplemental
Agreement to Rig Construction Contract dated January 10, 2007 between
Bluesky and Shipyard and as modified by the Novation Agreement dated as of  August 30, 2007 among Bluesky, the
Shipyard and OGIL, the Forbearance Agreement dated as of November 16, 2007
between OGIL and the Shipyard, the Supplemental Forbearance Agreement dated as
of March 24, 2008 between OGIL and the Shipyard and the Third Forbearance
Agreement dated as of May 10, 2008 between OGIL and the Shipyard.


 


“Rig 1 Delivery Date”
means the date upon which Rig 1 is delivered by the Shipyard to Borrower 1
completed in accordance with the terms of the Rig 1 Construction Contract,
expected to be December 28, 2008, but not later than March 31, 2009.


 


“Rig 1 Maturity Date”
means the earlier of (a) the date that is seven (7) years and three (3) months
after the Rig 1 Delivery Date and (b) the Final Maturity Date.


 


24

















 


“Rig 2” means the Baker
Marine Pacific Class 375 ultra-premium jackup drilling rig hull number
P2017, including the related machinery, equipment and gear, including without
limitation any OFE.


 


“Rig 2 Construction
Contract” means the Rig Construction Contract (P2017) dated as of October 27,
2006 between Bluesky and the Shipyard, as modified by the Novation Agreement
dated as of August 30, 2007 among Bluesky, the Shipyard and OGIL and the
Forbearance Agreement dated as of May 10, 2008 between OGIL and the
Shipyard.


 


“Rig 2 Delivery Date”
means the date upon which Rig 2 is delivered by the Shipyard to Borrower 2
completed in accordance with the terms of the Rig 2 Construction Contract,
expected to be July 31, 2009, but not later than September 30, 2009.


 


“Rig 2 Maturity Date”
means the earlier of (a) the date that is seven (7) years and three (3) months
after the Rig 2 Delivery Date and (b) the Final Maturity Date.


 


“Rig 3” means the
Baker Marine Pacific Class 375 ultra-premium jackup drilling rig hull
number P2020, including the related machinery, equipment and gear, including
without limitation any OFE.


 


“Rig 3 Construction
Contract” means the Rig Construction Contract (P2020) dated as of  June 3, 2007 between Bluesky and the
Shipyard, as supplemented by the Supplemental Agreement to Rig Construction
Contract dated June 3, 2007 between Bluesky and Shipyard, as modified by
the Novation Agreement dated as of  August 30,
2007 among Bluesky, the Shipyard and OGIL and the Forbearance Agreement dated
as of May 30, 2008 between OGIL and the Shipyard.


 


“Rig 3 Delivery Date”
means the date upon which Rig 3 is delivered by the Shipyard to Borrower 3
completed in accordance with the terms of the Rig 3 Construction Contract,
expected to be September 30, 2009, but not later than December 31, 2009.


 


“Rig 3 Maturity Date”
means the earlier of (a) the date that is seven (7) years and three (3) months
after the Rig 3 Delivery Date and (b) the Final Maturity Date.


 


“Rig 4” means the
Baker Marine Pacific Class 375 ultra-premium jackup drilling rig hull
number P2021, including the related machinery, equipment and gear, including
without limitation any OFE.


 


“Rig 4 Construction
Contract” means the Rig Construction Contract (P2021) dated as of August 14,
2007 between Bluesky and the Shipyard, as supplemented by the Supplemental
Agreement to Rig Construction Contract dated August 14, 2007 between
Bluesky and Shipyard and as modified by the Novation Agreement dated as of August 30,
2007 among Bluesky, the Shipyard and OGIL the Forbearance Agreement dated as of
March 24, 2008 between OGIL and the Shipyard and the Supplemental
Forbearance Agreement dated as of May 10, 2008 between OGIL and the
Shipyard.


 


25

















 


“Rig 4 Delivery Date”
means the date upon which Rig 4 is delivered by the Shipyard to Borrower 4
completed in accordance with the terms of the Rig 4 Construction Contract,
expected to be December 31, 2009, but not later than March 31, 2010.


 


“Rig 4 Maturity Date”
means the earlier of (a) the date that is seven (7) years and three (3) months
after the Rig 4 Delivery Date and (b) the Final Maturity Date.


 


“Rig Appraisal Report”
has the meaning set forth in Section 5.06(g).


 


“Rig Construction
Contracts” means the Rig 1 Construction Contract, the Rig 2 Construction Contract,
the Rig 3 Construction Contract and the Rig 4 Construction Contract.


 


“Rig Mortgages” means
each of the First Preferred Mortgages (or other ship mortgage, fleet mortgage,
naval mortgage or other agreement, document or instrument evidencing a grant of
liens in a rig or vessel) executed by any Loan Party which pledges a Rig owned
by such Person to the Collateral Agent for the benefit of the Secured Parties
as collateral for all or a portion of the Obligations, in form and substance
reasonably acceptable to the Facility Agent and as required to create an
Acceptable Security Interest.


 


“S&P” means
Standard & Poor’s Rating Agency Group, a division of Mc-Graw Hill
Companies, Inc., or any successor that is a national credit rating
organization.


 


“SEC” means the
Securities and Exchange Commission, and any successor entity.


 


“Secured Parties”
means the Agents, the Mandated Lead Arrangers, the Joint Bookrunners, the
Lenders, the Swap Counterparties and their Related Parties.


 


“Security Agreement”
means the Security Agreement in substantially the form of Exhibit K
among one or more of the Loan Parties and the Collateral Agent for the benefit
of the Secured Parties.


 


“Security Documents”
means the Assignments of Earnings, the Assignments of Insurance, the Charter
Assignments, the Collateral Assignments of Rig Construction Contract, the
Mortgages, the Security Agreement, the Pledge Agreement and each other
document, instrument or agreement executed in connection therewith or otherwise
executed in order to secure all or a portion of the Obligations.


 


“Security Maintenance
Ratio” means, as of any date of determination and with respect to any
Tranche, the ratio of (a) the Market Value of the applicable Rig as of
such date and (b) the outstanding principal amount of the Advances of such
Tranche as of such date.


 


“Shipyard” means PPL
Shipyard PTE Ltd., a Singapore corporation.


 


“Subsidiary” of a
Person means any corporation, association, partnership or other business entity
of which more than 50% of the outstanding Equity 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 Equity Interests 


 


26

















 


of
any other class or classes of such entity shall or might have voting power upon
the occurrence of any contingency) which entity 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.


 


“Super-Majority Lenders”
means, as of any date of determination, (a) before all of the Commitments
terminate, Lenders holding more than 80% of the then aggregate Revolving
Commitments, Unused Term Commitments, Unused Top-Up Commitments, unpaid
principal amount of the Term Advances and the Top-Up Advances and (b) thereafter,
Lenders holding more than 80% of the aggregate unpaid principal amount of the
Advances and participation interests in the Letter of Credit Exposure at such
time.


 


“Swap Contract” means
(a) any and all rate swap transactions, basis swaps, credit derivative
transactions, forward rate transactions, commodity swaps, commodity options,
forward commodity contracts, equity or equity index swaps or options, bond or
bond price or bond index swaps or options or forward bond or forward bond price
or forward bond index transactions, interest rate options, forward foreign
exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar transactions
or any combination of any of the foregoing (including any options to enter into
any of the foregoing), whether or not any such transaction is governed by or
subject to any master agreement, and (b) any and all transactions of any
kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International
Foreign Exchange Master Agreement, or any other master agreement (any such
master agreement, together with any related schedules, a “Master Agreement”),
including any such obligations or liabilities under any Master Agreement.


 


“Swap Counterparty”
means any Lender or any Affiliate thereof that is party to a Swap Contract with
any Loan Party and is otherwise acceptable to the Facility Agent.


 


“Swap Termination Value”
means, in respect of any one or more Swap Contracts, after taking into account
the effect of any legally enforceable netting agreement relating to such Swap
Contracts, (a) for any date on or after the date such Swap Contracts have
been closed out and termination value(s) determined in accordance
therewith, such termination value(s), and (b) for any date prior to the
date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon
one or more mid-market or other readily available quotations provided by any
recognized dealer in such Swap Contracts (which may include a Lender or any
Affiliate of a Lender).


 


“Synthetic Lease
Obligation” means the monetary obligation of a Person under (a) a
so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of Property creating obligations that do
not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of
such Person (without regard to accounting treatment).


 


27

















 


“Taxes” means all
present or future taxes, levies, imposts, duties, deductions, withholdings,
assessments, fees or other charges imposed by any Governmental Authority,
including any interest, additions to tax or penalties applicable thereto.


 


“Technical Advisor”
means Noble Denton, Moonpool, DNV Advisory Services, or another marine surveyor
retained by the Facility Agent at the Borrower’s expense.


 


“Term Advance” means
any Term Tranche 1 Advance, Term Tranche 2 Advance, Term Tranche 3 Advance or
Term Tranche 4 Advance.


 


“Term Borrowing”
means any Term Tranche 1 Borrowing, Term Tranche 2 Borrowing, Term Tranche 3
Borrowing or Term Tranche 4 Borrowing.


 


“Term Commitment”
means, for each Lender, such Lender’s Term Tranche 1 Commitment, Term Tranche 2
Commitment, Term Tranche 3 Commitment and Term Tranche 4 Commitment.


 


“Term Tranche 1 Advance”
means any advance by a Lender to Borrower 1 as part of a Term Tranche 1
Borrowing.


 


“Term Tranche 1 Borrowing”
means a borrowing consisting of simultaneous Term Tranche 1 Advances made by
each Lender pursuant to Section 2.01(a)(i).


 


“Term Tranche 1
Commitment” means, for each Lender, the commitment of such Lender to make
Term Tranche 1 Advances to Borrower 1 in the maximum aggregate amount set forth
on Annex I opposite such Lender’s name as its Term Tranche 1
Commitment.  The aggregate Term Tranche 1
Commitments as of the Effective Date are $80,000,000.


 


“Term Tranche 2 Advance”
means any advance by a Lender to Borrower 2 as part of a Term Tranche 2
Borrowing.


 


“Term Tranche 2 Borrowing”
means a borrowing consisting of simultaneous Term Tranche 2 Advances made by
each Lender pursuant to Section 2.01(a)(ii).


 


“Term Tranche 2
Commitment” means, for each Lender, the commitment of such Lender to make
Term Tranche 2 Advances to Borrower 2 in the maximum aggregate amount set forth
on Annex I opposite such Lender’s name as its Term Tranche 2
Commitment.  The aggregate Term Tranche 2
Commitments as of the Effective Date are $80,000,000.


 


“Term Tranche 3 Advance”
means any advance by a Lender to Borrower 3 as part of a Term Tranche 3
Borrowing.


 


“Term Tranche 3 Borrowing”
means a borrowing consisting of simultaneous Term Tranche 3 Advances made by
each Lender pursuant to Section 2.01(a)(iii).


 


“Term Tranche 3
Commitment” means, for each Lender, the commitment of such Lender to make
Term Tranche 3 Advances to Borrower 3 in the maximum aggregate amount set forth
on 


 


28

















 


Annex
I opposite such Lender’s name as its Term Tranche 3 Commitment.  The aggregate Term Tranche 3 Commitments as
of the Effective Date are $80,000,000.


 


“Term Tranche 4 Advance”
means any advance by a Lender to Borrower 4 as part of a Term Tranche 4
Borrowing.


 


“Term Tranche 4 Borrowing”
means a borrowing consisting of simultaneous Term Tranche 4 Advances made by
each Lender pursuant to Section 2.01(a)(iv).


 


“Term Tranche 4
Commitment” means, for each Lender, the commitment of such Lender to make
Term Tranche 4 Advances to Borrower 4 in the maximum aggregate amount set forth
on Annex I opposite such Lender’s name as its Term Tranche 4
Commitment.  The aggregate Term Tranche 4
Commitments as of the Effective Date are $80,000,000.


 


“TMT” means TMT Co.,
Ltd., a company incorporated in the Republic of Taiwan.


 


“TMT Guaranties”
means (a) Letter of Guarantee dated as of October 27, 2006, as
supplemented by the Letter of Guarantee dated as of  August 30, 2007,  in connection with the Rig 1 Construction
Contract, (b) the Performance Guaranty dated as of  January 10, 2007 in connection with the
Rig 2 Construction Contract, (c) Performance Guarantee dated as of  June 3, 2007 in connection with the Rig
3 Construction Contract and (d) Performance Guarantee dated as of  August 14, 2007, as supplemented by the
Performance Guarantee dated as of  August 30,
2007, each in connection with the Rig 4 Construction Contract.


 


“Top-Up Advance”
means any Top-Up Tranche 1 Advance, Top-Up Tranche 2 Advance, Top-Up Tranche 3
Advance or Top-Up Tranche 4 Advance.


 


“Top-Up Borrowing”
means any Top-Up Tranche 1 Borrowing, Top-Up Tranche 2 Borrowing, Top-Up
Tranche 3 Borrowing or Top-Up Tranche 4 Borrowing.


 


“Top-Up Commitment”
means, for each Lender, such Lender’s Top-Up Tranche 1 Commitment, Top-Up
Tranche 2 Commitment, Top-Up Tranche 3 Commitment and Top-Up Tranche 4
Commitment.


 


“Top-Up Tranche 1 Advance”
means any advance by a Lender to Borrower 1 as part of a Top-Up Tranche 1
Borrowing.


 


“Top-Up Tranche 1
Borrowing” means a borrowing consisting of simultaneous Top-Up Tranche 1
Advances made by each Lender pursuant to Section 2.01(b)(i).


 


“Top-Up Tranche 1
Commitment” means, for each Lender, the commitment of such Lender to make
Top-Up Tranche 1 Advances to Borrower 1 in the maximum aggregate amount set
forth on Annex I opposite such Lender’s name as its Top-Up Tranche 1
Commitment.  The aggregate Top-Up Tranche
1 Commitments as of the Effective Date are $20,000,000.


 


“Top-Up Tranche 2 Advance”
means any advance by a Lender to Borrower 2 as part of a Top-Up Tranche 2
Borrowing.


 


29

















 


“Top-Up Tranche 2
Borrowing” means a borrowing consisting of simultaneous Top-Up Tranche 2
Advances made by each Lender pursuant to Section 2.01(b)(ii).


 


“Top-Up Tranche 2
Commitment” means, for each Lender, the commitment of such Lender to make
Top-Up Tranche 2 Advances to Borrower 2 in the maximum aggregate amount set
forth on Annex I opposite such Lender’s name as its Top-Up Tranche 2
Commitment.  The aggregate Top-Up Tranche
2 Commitments as of the Effective Date are $20,000,000.


 


“Top-Up Tranche 3 Advance”
means any advance by a Lender to Borrower 3 as part of a Top-Up Tranche 3
Borrowing.


 


“Top-Up Tranche 3
Borrowing” means a borrowing consisting of simultaneous Top-Up Tranche 3
Advances made by each Lender pursuant to Section 2.01(b)(iii).


 


“Top-Up Tranche 3
Commitment” means, for each Lender, the commitment of such Lender to make
Top-Up Tranche 3 Advances to Borrower 3 in the maximum aggregate amount set
forth on Annex I opposite such Lender’s name as its Top-Up Tranche 3 Commitment.  The aggregate Top-Up Tranche 3 Commitments as
of the Effective Date are $20,000,000.


 


“Top-Up Tranche 4 Advance”
means any advance by a Lender to Borrower 4 as part of a Top-Up Tranche 4
Borrowing.


 


“Top-Up Tranche 4
Borrowing” means a borrowing consisting of simultaneous Top-Up Tranche 4
Advances made by each Lender pursuant to Section 2.01(b)(iv).


 


“Top-Up Tranche 4
Commitment” means, for each Lender, the commitment of such Lender to make
Top-Up Tranche 4 Advances to Borrower 4 in the maximum aggregate amount set
forth on Annex I opposite such Lender’s name as its Top-Up Tranche 4
Commitment.  The aggregate Top-Up Tranche
4 Commitments as of the Effective Date are $20,000,000.


 


“Total Cost” means,
with respect to any Rig, the sum of the Contract Price (as set forth in the
applicable Rig Construction Contract) and the Additional Costs.


 


“Total Loss” means (a) the
actual, constructive, arranged, agreed, or compromised total loss of any Rig; (b) the
loss, theft or destruction of such Rig or damage thereto to such extent as
shall make repair thereof uneconomical or shall render such Rig permanently
unfit for normal use for any reason whatsoever; (c) the requisition for
title or other compulsory acquisition or forfeiture of any Rig otherwise than
by requisition for hire; or (d) the capture, condemnation, seizure,
arrest, detention or confiscation of any Rig by any Governmental Authority or
by Persons acting or purporting to act on behalf of any Governmental Authority
unless such Rig be released from such capture, seizure, arrest, detention or
confiscation within one (1) month after the occurrence thereof.


 


“Tranche” means any Class of
Commitments or Advances, whether such Advances or Commitments are Tranche 1
Advances, Tranche 2 Advances, Tranche 3 Advances or Tranche 4 Advances or
Tranche 1 Commitments, Tranche 2 Commitments, Tranche 3 Commitments or Tranche
4 Commitments, as the case may be.


 


30

















 


“Tranche 1 Advances”
means any Revolving Tranche 1 Advance, Term Tranche 1 Advance, or Top-Up
Tranche 1 Advance.


 


“Tranche 2 Advances”
means any Revolving Tranche 2 Advance, Term Tranche 2 Advance, or Top-Up
Tranche 2 Advance.


 


“Tranche 3 Advances”
means any Revolving Tranche 3 Advance, Term Tranche 3 Advance, or Top-Up
Tranche 3 Advance.


 


“Tranche 4 Advances”
means any Revolving Tranche 4 Advance, Term Tranche 4 Advance, or Top-Up
Tranche 4 Advance.


 


“Tranche 1 Commitment”
means any Term Tranche 1 Commitment or Top-Up Tranche 1 Commitment.


 


“Tranche 2 Commitment”
means any Term Tranche 2 Commitment or Top-Up Tranche 2 Commitment.


 


“Tranche 3 Commitment”
means any Term Tranche 3 Commitment or Top-Up Tranche 3 Commitment.


 


“Tranche 4 Commitment”
means any Term Tranche 4 Commitment or Top-Up Tranche 4 Commitment.


 


“Transactions” means
the Vantage Acquisition and each of the other transactions contemplated by the
Transaction Documents.


 


“Transaction Documents”
means (a) the Share Purchase Agreement dated as of August 30, 2007
among Vantage Energy, F3 Capital, and OGIL, as amended by Amendment No. 1
dated as of December 3, 2007 among Vantage Energy, F3 Capital, OGIL and
the Parent, (b) each other material document executed on or before the
Effective Date with respect to the Vantage Acquisition, and (c) the Rig
Construction Contracts.


 


“Transfer Agreement”
means any agreement pursuant to which any Vendor Agreement is assigned or
novated to OGIL.


 


“UCC” means the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, as amended from time to time, and any successor statute.


 


“Unfunded Pension
Liability” means the excess of a Pension Plan’s benefit liabilities under Section 4001(a)(16)
of ERISA, over the current value of that Pension Plan’s assets, determined in
accordance with the assumptions used for funding the Pension Plan pursuant to Section 412
of the Code for the applicable plan year.


 


“Unused Revolving
Commitments” means, with respect to any Tranche, the difference between (a) the
Revolving Commitments of such Tranche and (b) the sum of the Revolving
Advances of such Tranche and the Letter of Credit Exposure of such Tranche.


 


31

















 


“Unused Term Commitments”
means the difference between (a) the Term Commitments and (b) the
Term Advances.


 


“Unused Top-Up
Commitments” means the difference between (a) the Top-Up Commitments
and (b) the Top-Up Advances.


 


“Vantage Acquisition”
means the acquisition by the Parent of all of the outstanding shares of common
stock of OGIL pursuant to the Transaction Documents.


 


“Vantage Deepwater”
means Vantage Deepwater Company, a Cayman Islands exempted company.


 


“Vantage Driller I”
means Vantage Driller I Co, a Cayman Islands exempted company.


 


“Vantage Driller II”
means Vantage Driller II Co, a Cayman Islands exempted company.


 


“Vantage Energy”
means Vantage Energy Services, Inc., a Delaware corporation.


 


“Vantage Int’l Payroll
(Singapore)” means Vantage International Payroll Company Pte. Ltd., a
company formed under the laws of Singapore.


 


“Vantage Int’l Payroll
(Caymans)” means Vantage International Payroll Co., a Cayman Islands
exempted company.


 


“Vantage US Payroll”
means Vantage US Payroll Company Pte. Ltd., a company formed under the laws of
Singapore.


 


“Vantage Int’l Management
(Caymans)” means Vantage International Management Co., a Cayman Islands
exempted company.


 


“Vantage Int’l Management
(Singapore)” means Vantage International Management Company, a company
formed under the laws of Singapore.


 


“Vendor Agreement”
means any agreement between Bluesky and the suppliers named therein for the
provision of certain drilling equipment to Bluesky which is to be furnished to
the Shipyard for installation in the Rigs, to be novated or assigned to OGIL
pursuant to a Transfer Agreement.


 


“Voting Stock” means,
with respect to any Person, securities of any class or classes of Equity
Interests or other interests (including partnership interests) in such Person
entitling the holders thereof (whether at all times or at the time that such
class of Equity Interests has voting power by reason of the happening of any
contingency) to vote in the election of members of the board of directors or
comparable body of such Person.


 


“Working Capital Ratio”
means, at any date of determination, the ratio of (a) the consolidated
current assets of the Borrowers and their Subsidiaries determined in accordance
with GAAP on such date to (b) the consolidated current liabilities of the
Borrowers and their 


 


32

















 


Subsidiaries
at such time determined in accordance with GAAP minus the current portion of
any Debt under this Agreement to the extent otherwise included therein.


 


Section 1.02           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 1.03           Accounting
Terms.


 


(a)           For purposes of this Agreement, all
accounting terms not otherwise defined herein shall be construed in conformity
with, and all financial data (including financial ratios and other financial
calculations) required to be submitted pursuant to this Agreement shall be
prepared in conformity with, GAAP applied on a consistent basis, as in effect
from time to time.


 


(b)           If at any time any Accounting Change
(as defined below) would affect the computation of any financial ratio or
requirement set forth in any Loan Document, and either the Parent or the
Majority Lenders shall so request, the Facility Agent, the Lenders and the
Parent shall negotiate in good faith to amend such ratio or requirement to
preserve the original intent thereof in light of such change in GAAP (subject
to the approval of the Majority Lenders); provided that, until so
amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Parent
shall provide to the Facility Agent and the Lenders financial statements and
other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.  “Accounting Changes” means: (A) changes
in accounting principles required by GAAP and implemented by the Parent; (B) changes
in accounting principles recommended by the Parent’s accountants; and (C) changes
in carrying value of Parent’s or any of its Subsidiaries’ assets, liabilities
or equity accounts resulting from (i) the application of purchase accounting
principles to the Parent’s acquisition of OGIL from F3 Capital or (ii) any
other adjustments that, in each case, were applicable to, but not included in,
the Pro Forma Financial Statements.


 


(c)           In addition, all calculations and
defined accounting terms used herein shall, unless expressly provided
otherwise, when referring to any Person, refer to such Person on a consolidated
basis and mean such Person and its consolidated subsidiaries.


 


Section 1.04           Classes
of Advances.  Advances are distinguished by “Class”.  The “Class” of an Advance refers to the
determination of whether such Advance is a Term Advance, Revolving Advance or
Top-Up Advance, each of which constitutes a Class.


 


Section 1.05           Miscellaneous. 
The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms.
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.” Unless the context requires
otherwise (a) any definition of or reference to any agreement, instrument
or other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise 


 


33

















 


modified (subject to any
restrictions on such amendments, supplements or modifications set forth
herein), (b) any reference herein to any Person shall be construed to
include such Person’s successors and assigns, (c) the words “herein,”
“hereof” and “hereunder,” and words of similar import, shall be construed to
refer to this Agreement in its entirety and not to any particular provision
hereof, (d) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement, (e) any reference to any law or
regulation herein shall, unless otherwise specified, refer to such law or
regulation as amended, modified or supplemented from time to time and (f) the
words “asset” and “property” shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.


 


ARTICLE II

THE CREDIT FACILITIES


 


Section 2.01           The
Advances.


 


(a)           Term Advances.


 


(i)            Term Tranche 1 Advances.  Each Lender severally agrees, on the terms
and conditions set forth in this Agreement, to make up to four Term Tranche 1
Advances to Borrower 1 from time-to-time on any Business Day during the period
from the Effective Date until the Rig 1 Delivery Date in an aggregate amount up
to but not to exceed the lesser of (A) the amount of its Term Tranche 1
Commitment and (B) such Lender’s Pro Rata Share of 36% of the Total Cost
of Rig 1.  Each Term Tranche 1 Borrowing
shall be in an aggregate amount not less than $10,000,000 and in integral
multiples of $1,000,000 in excess thereof. 
Each Term Tranche 1 Borrowing shall correspond to the applicable
installment of the Contract Price (as defined in the Rig 1 Construction
Contract) as set forth on Schedule 2.01. 
Principal payments made after the Effective Date may not be reborrowed.


 


(ii)           Term Tranche 2 Advances.  Each Lender severally agrees, on the terms
and conditions set forth in this Agreement, to make up to four Term Tranche 2
Advances to Borrower 2 from time-to-time on any Business Day during the period
from the Effective Date until the Rig 2 Delivery Date in an aggregate amount up
to but not to exceed the lesser of (A) the amount of its Term Tranche 2
Commitment and (B) such Lender’s Pro Rata Share of 36% of the Total Cost
of Rig 2.  Each Term Tranche 2 Borrowing
shall be in an aggregate amount not less than $10,000,000 and in integral
multiples of $1,000,000 in excess thereof. 
Each Term Tranche 2 Borrowing shall correspond to the applicable
installment of the Contract Price (as defined in the Rig 2 Construction
Contract) as set forth on Schedule 2.01. 
Principal payments made after the Effective Date may not be reborrowed.


 


(iii)          Term Tranche 3 Advances.  Each Lender severally agrees, on the terms
and conditions set forth in this Agreement, to make up to four Term Tranche 3
Advances 


 


34

















 


to Borrower 3 from time-to-time on any Business Day
during the period from the Effective Date until the Rig 3 Delivery Date in an aggregate
amount up to but not to exceed the lesser of (A) the amount of its Term
Tranche 3 Commitment and (B) such Lender’s Pro Rata Share of 36% of the
Total Cost of Rig 3.  Each Term Tranche 3
Borrowing shall be in an aggregate amount not less than $10,000,000 and in
integral multiples of $1,000,000 in excess thereof.  Each Term Tranche 3 Borrowing shall
correspond to the applicable installment of the Contract Price (as defined in
the Rig 3 Construction Contract) as set forth on Schedule 2.01.  Principal payments made after the Effective
Date may not be reborrowed.


 


(iv)          Term Tranche 4 Advances.  Each Lender severally agrees, on the terms
and conditions set forth in this Agreement, to make up to four Term Tranche 4
Advances to Borrower 4 from time-to-time on any Business Day during the period
from the Effective Date until the Rig 4 Delivery Date in an aggregate amount up
to but not to exceed the lesser of (A) the amount of its Term Tranche 4
Commitment and (B) such Lender’s Pro Rata Share of 36% of the Total Cost
of Rig 4.  Each Term Tranche 4 Borrowing
shall be in an aggregate amount not less than $10,000,000 and in integral
multiples of $1,000,000 in excess thereof. 
Each Term Tranche 4 Borrowing shall correspond to the applicable
installment of the Contract Price (as defined in the Rig 4 Construction
Contract) as set forth on Schedule 2.01. 
Principal payments made after the Effective Date may not be reborrowed.


 


(b)           Top-Up Advances.


 


(i)            Top-Up Tranche 1 Advances.  Each Lender severally agrees, on the terms
and conditions set forth in this Agreement, to make Top-Up Tranche 1 Advances
to Borrower 1 from time-to-time on any Business Day during the period from the
Rig 1 Delivery Date to the Rig 1 Maturity Date in an aggregate amount up to but
not to exceed the lesser of (A) the amount of its Top-Up Tranche 1
Commitment and (B) 9% of the Total Cost of Rig 1.  Each Top-Up Tranche 1 Borrowing shall be in
an aggregate amount not less than $1,000,000 and in integral multiples
thereof.  Principal payments made after
the Rig 1 Delivery Date may not be reborrowed.


 


(ii)           Top-Up Tranche 2 Advances.  Each Lender severally agrees, on the terms
and conditions set forth in this Agreement, to make Top-Up Tranche 2 Advances
to Borrower 2 from time-to-time on any Business Day during the period from the
Rig 2 Delivery Date to the Rig 2 Maturity Date in an aggregate amount up to but
not to exceed the lesser of (A) the amount of its Top-Up Tranche 2
Commitment and (B) 9% of the Total Cost of Rig 2.  Each Top-Up Tranche 2 Borrowing shall be in
an aggregate amount not less than $1,000,000 and in integral multiples
thereof.  Principal payments made after
the Rig 2 Delivery Date may not be reborrowed.


 


(iii)          Top-Up Tranche 3 Advances.  Each Lender severally agrees, on the terms
and conditions set forth in this Agreement, to make Top-Up Tranche 3 Advances
to Borrower 3 from time-to-time on any Business Day during the period from the
Rig 3 Delivery Date to the Rig 3 Maturity Date in an aggregate amount up to but
not to exceed the lesser of (A) the amount of its Top-Up Tranche 3
Commitment and (B) 9% of the 


 


35

















 


Total Cost of Rig 3. 
Each Top-Up Tranche 3 Borrowing shall be in an aggregate amount not less
than $1,000,000 and in integral multiples thereof.  Principal payments made after the Rig 3
Delivery Date may not be reborrowed.


 


(iv)          Top-Up Tranche 4 Advances.  Each Lender severally agrees, on the terms
and conditions set forth in this Agreement, to make Top-Up Tranche 4 Advances
to Borrower 4 from time-to-time on any Business Day during the period from the
Rig 4 Delivery Date to the Rig 4 Maturity Date in an aggregate amount up to but
not to exceed the lesser of (A) the amount of its Top-Up Tranche 4
Commitment and (B) 9% of the Total Cost of Rig 4.  Each Top-Up Tranche 4 Borrowing shall be in
an aggregate amount not less than $1,000,000 and in integral multiples
thereof.  Principal payments made after
the Rig 4 Delivery Date may not be reborrowed.


 


(c)           Revolving Advances.  Each Lender severally agrees, on the terms
and conditions set forth in this Agreement, to make Revolving Advances to any
Borrower from time-to-time on any Business Day during the period from the Rig 1
Delivery Date until the Final Maturity Date in a maximum amount up to but not
to exceed at any time outstanding its Revolving Commitment; provided  however
that the aggregate outstanding principal amount of the sum of (i) all
Revolving Advances plus (ii) the Letter of Credit Exposure shall not
exceed at any time (A) on or before the Rig 2 Delivery Date, $10,000,000, (B) on
or before the Rig 3 Delivery Date, $20,000,000, (C) on or before the Rig 4
Delivery Date, $30,000,000, and (D) thereafter, the Aggregate Revolving
Commitments.  Each Revolving Borrowing
shall be in an aggregate amount not less than $1,000,000 and in integral
multiples thereof.  Within the limits of
each Lender’s Revolving Commitment, the Borrowers may from time-to-time borrow,
prepay pursuant to Section 2.07(b) and reborrow under this Section 2.01(c).


 


Section 2.02           Method
of Borrowing.


 


(a)           Notice.  Each Borrowing shall be made pursuant to a
Notice of Borrowing, given not later than 10:00 a.m. (Paris, France time)
on the third Business Day before the requested Borrowing Date, in each case to
the Facility Agent’s Applicable Lending Office. 
The Facility Agent shall give to each Lender prompt notice on the day of
receipt of a timely Notice of Borrowing. 
The Notice of Borrowing shall be in writing specifying (A) the
Borrowing Date (which shall be a Business Day), (B) the requested Class and
Tranche of Advances comprising such Borrowing, (C) the aggregate amount of
such Borrowing, (D) the requested Interest Period and (E) the
applicable Borrower.  The Facility Agent
shall promptly notify each Lender of the applicable interest rate under Section 2.06(a)(i) or
(ii).  Each Lender shall make
available its Pro Rata Share of such Borrowing before 12:00 p.m. (New York
time) on the Borrowing Date in immediately available funds to the Facility
Agent at its Applicable Lending Office or such other location as the Facility
Agent may specify by notice to the Lenders. 
After the Facility Agent’s receipt of such funds and upon fulfillment of
the applicable conditions set forth in Article III, the Facility
Agent will promptly make such funds available to the applicable Borrower not
later than 2:00 p.m. (New York time) at such account as such Borrower
shall specify in writing to the Facility Agent.


 


(b)           Continuations.  In order to elect to Continue a Borrowing
under this Section, the applicable Borrower shall deliver an irrevocable Notice
of Continuation to the Facility Agent at 


 


36

















 


its Applicable Lending
Office no later than 10:00 a.m. (Paris, France time) at least three
Business Days in advance of such requested Continuation.  Each such Notice of Continuation shall be in
writing or by telex, telecopier or telephone, confirmed promptly in writing
specifying (A) the requested Continuation date (which shall be a Business
Day), (B) the amount, Class and Tranche of the Advances comprising
the Borrowing to be Continued, and (C) the requested Interest Period.  Promptly after receipt of a Notice of
Continuation under this paragraph, the Facility Agent shall provide each Lender
with a copy thereof and notify each Lender of the interest rate under Sections 2.06(a)(i) or
(ii).


 


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


 


(i)            at no time shall there be more than
two Interest Periods applicable to each Class and each Tranche of
outstanding Eurodollar Advances;


 


(ii)           if the Facility Agent is unable to
determine the Eurodollar Rate for any requested Borrowing and the Facility
Agent gives telephonic or telecopy notice thereof to the Borrowers as soon as
practicable, the right of any Borrower to select Eurodollar Advances for any
subsequent Borrowing and the obligation of the Lenders to make such Eurodollar
Advances shall be suspended until the Facility Agent shall notify the Borrowers
and the Lenders that the circumstances causing such suspension no longer exist,
and each Advance comprising such Borrowing shall be a Base Rate Advance;


 


(iii)          if the Majority Lenders shall, by
11:00 a.m. (New York time) at least one Business Day before the date of
any requested Borrowing, notify the Facility Agent that the Eurodollar Rate
will not adequately reflect the cost to such Lenders of making or funding their
respective Eurodollar Advances and the Facility Agent gives telephonic or
telecopy notice thereof to the Borrowers as soon as practicable, the right of
any Borrower to select Eurodollar Advances for such Borrowing or for any
subsequent Borrowing and the obligation of the Lenders to make Eurodollar
Advances shall be suspended until the Facility Agent shall notify the Borrowers
and the Lenders that the circumstances causing such suspension no longer exist,
and each Advance comprising such Borrowing shall be a Base Rate Advance;


 


(iv)          if any Borrower shall fail to select
the duration or Continuation of any Interest Period for any Eurodollar Advances
in accordance with the provisions contained in the definition of “Interest
Period” in Section 1.01 and paragraphs (a) and (b) above or
shall fail to deliver a Notice of Continuation, the Facility Agent will
forthwith so notify such Borrower and the Lenders and such Borrower shall be
deemed to have selected an Interest Period of one month’s duration; and


 


(v)           at any time when a Default or an
Event of Default has occurred and is continuing, no Borrower may select an
Interest Period for any Eurodollar Advance longer than one month’s duration; provided,
however that no Borrower shall be requested to prepay (or convert to an
Adjusted Base Rate) any existing Eurodollar Borrowing prior to the end of the
Interest Period for such Borrowing.


 


37
















 


(d)           Notices Irrevocable.  Each Notice of Borrowing and each Notice of
Continuation delivered by a Borrower shall be irrevocable and binding on such
Borrower.  In the case of the initial
Borrowing or any Borrowing which the related Notice of Continuation specifies
is to be comprised of Eurodollar Advances, each Borrower shall indemnify each
Lender against any loss, out-of-pocket cost or expense actually incurred by
such Lender as a result of any failure to fulfill on or before the Borrowing
Date or the date specified in such Notice of Continuation for such Borrowing
the applicable conditions set forth in Article III, including,
without limitation, 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)           Facility Agent Reliance.  Unless the Facility Agent shall have received
notice from a Lender before the Borrowing Date that such Lender will not make
available to the Facility Agent such Lender’s Pro Rata Share of the Borrowing,
the Facility Agent may assume that such Lender has made its Pro Rata Share of
such Borrowing available to the Facility Agent on the Borrowing Date in
accordance with paragraph (a) of this Section 2.02
and the Facility Agent may, in reliance upon such assumption, make available to
the applicable Borrower on the Borrowing Date a corresponding amount.  If and to the extent that such Lender shall
not have so made its Pro Rata Share of such Borrowing available to the Facility
Agent, such Lender and the applicable Borrower severally agree to immediately
repay to the Facility Agent on demand such corresponding amount, together with
interest on such amount, for each day from the date such amount is made
available to such Borrower until the date such amount is repaid to the Facility
Agent, at (i) in the case of a Borrower, the interest rate applicable on
such day to Eurodollar Advances and (ii) in the case of such Lender, the
greater of the Federal Funds Effective Rate and a rate determined by the
Facility Agent in accordance with banking industry rules on interbank
compensation.  If such Lender shall repay
to the Facility 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.  If such Lender’s Advance as part of such
Borrowing is not made available by such Lender within three Business Days of
the Borrowing Date, the applicable Borrower shall repay such Lender’s share of
such Borrowing (together with interest thereon at the interest rate applicable
during such period to Eurodollar Advances) to the Facility Agent not later than
three Business Days after receipt of written notice from the Facility Agent
specifying such Lender’s share of such Borrowing that was not made available to
the Facility Agent.


 


(f)            Lender Obligations Several.  The failure of any Lender to make an 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 applicable Borrowing
Date.  No Lender shall be responsible for
the failure of any other Lender to make an Advance to be made by such other
Lender on any applicable Borrowing Date.


 


(g)           Noteless Agreement; Evidence of
Indebtedness.


 


(i)            Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrowers to such Lender resulting from the Advances made
by such Lender from time to time, including the 


 


38

















 


amounts of principal and interest payable and paid to
such Lender from time to time hereunder.


 


(ii)           The Facility Agent shall also
maintain accounts in which it will record (A) the amount of each Advance
made hereunder and the Class and Tranche thereof and the Interest Period
with respect thereto, (B) the amount of any principal or interest due and
payable or to become due and payable from each Borrower to each Lender
hereunder and (C) the amount of any sum received by the Facility Agent hereunder
from each Borrower and each Lender’s share thereof.


 


(iii)          The entries maintained in the accounts
maintained pursuant to paragraphs (i) and (ii) above shall be prima
facie evidence of the existence and amounts of the Obligations therein
recorded; provided, however, that the failure of the Facility
Agent or any Lender to maintain such accounts or any error therein shall not in
any manner affect the obligation of any Borrower to repay the Obligations in
accordance with their terms.


 


(iv)          Any Lender may request that the
Advances owing to such Lender be evidenced by a promissory note (a “Note”).  In such event, the applicable Borrower shall
execute and deliver to such Lender a Note payable to the order of such Lender
and its registered assigns and in form and substance reasonably acceptable to
the Facility Agent and such Borrower. 
Thereafter, the Advances evidenced by such Note and interest thereon
shall at all times (including after any assignment pursuant to Section 10.06)
be represented by one or more Notes payable to the order of the payee named
therein or any assignee pursuant to Section 10.06, except to the
extent that any such Lender or assignee subsequently returns any such Note for
cancellation and requests that such Advances once again be evidenced as
described in paragraphs (i) and (ii) above.


 


Section 2.03           Fees.


 


(a)           Commitment Fees.  The Borrowers jointly and severally agree to
pay to the Facility Agent for the account of each Lender a commitment fee (a “Commitment
Fee”) equal to the product of 0.75% per annum and the average daily amount
by which such Lender’s Aggregate Commitment exceeds the sum of (i) the
aggregate principal amount of such Lender’s outstanding Advances and (ii) such
Lender’s Pro Rata Share of the Letter of Credit Exposure, from the Effective
Date until the Final Maturity Date.  The
Commitment Fees payable pursuant to this clause (a) are due quarterly
in arrears on the last Business Day of each March, June, September and December commencing
on the first such date occurring after the Effective Date and continuing
thereafter through and including the Final Maturity Date.


 


(b)           Agency and Arrangement Fees.  The Borrowers jointly and severally agree to
pay to the Agents and the Joint Bookrunners the fees as separately agreed upon
in the Fee Letters.


 


(c)           Letter of Credit Fees.


 


(i)            The Borrowers jointly and severally
agree to pay to the Facility Agent for the pro rata benefit of each Lender a
letter of credit fee at a per annum rate equal to the Applicable Margin in
effect from time to time.  Each such fee
shall be based on the maximum amount available to be drawn under such Letter of
Credit from the date of 


 


39

















 


issuance of the Letter of Credit until its expiration
date and shall be payable quarterly in arrears on the last Business Day of each
March, June, September and December until the earlier of its
expiration date or the Final Maturity Date. 
All such fees shall be computed on the basis of the actual number of
days elapsed in a year of 360 days.


 


(ii)           The Borrowers jointly and severally
agree to pay to the applicable Issuing Bank, a fronting fee for each Letter of
Credit issued for its account equal to 0.125% per annum of the initial stated
amount of such Letter of Credit (or, with respect to any subsequent increase to
the stated amount of any such Letter of Credit, such increase in the stated
amount).  Each such fee shall be payable
annually in advance on the date of issuance (or subsequent increase) of such
Letter of Credit and each year thereafter until the earlier of its expiration
date or the Final Maturity Date.  All
such fees shall be computed on the basis of a year of 360 days.


 


(iii)          In addition, the Borrowers jointly and
severally agree to pay to the Issuing Banks all customary transaction costs and
fees charged by such Issuing Bank in connection with the issuance, amendment,
renewal or extension of a Letter of Credit or processing of drawings
thereunder, such costs and fees to be due and payable on the date specified by
the applicable Issuing Bank in the invoice for such costs and fees.


 


(d)           Generally.  All such fees shall be paid on the dates due,
in immediately available Dollars to the Facility Agent for distribution, if and
as appropriate, among the Lenders, except that the fees payable pursuant to (i) Section 2.03(b) shall
be paid directly to the applicable Agent or Joint Bookrunner and (ii) Section 2.03(c)(ii) and
(iii) shall be paid directly to the applicable Issuing Bank.  Once paid, absent manifest error, none of
these fees shall be refundable under any circumstances.


 


Section 2.04           Reduction of the Commitments.


 


(a)           Optional.  Each Borrower shall have the right, upon at
least five days’ irrevocable notice to the Facility Agent, to terminate in
whole or reduce ratably in part the unused portion of any Class and
Tranche of Commitment; provided that each partial reduction of any
Commitment shall be in the minimum aggregate amount of $5,000,000 and in
integral multiples of $1,000,000 in excess thereof (or such lesser amount as
may then be outstanding); provided  further
that the Aggregate Revolving Commitments may not be reduced below the aggregate
principal amount of the outstanding Revolving Advances plus the outstanding
Letter of Credit Exposure.


 


(b)           Mandatory.  Without duplication of any mandatory
reduction of the Commitments required pursuant to Section 2.07(c)(vi),
upon the Collateral Disposition of any Rig, the Class and Tranche of
Commitments related to such Rig shall automatically and permanently terminate
and the Revolving Commitments shall automatically and permanently be reduced by
$10,000,000.


 


In connection with any termination of any Class and
Tranche of Commitment hereunder, the Borrower shall pay on the effective date
of such termination any amounts, if any, required to be paid pursuant to Section 2.07(d) as
a result of such termination being made on such date.  Any reduction or termination of the
Commitments pursuant to Section 2.04 shall be permanent, with 


 


40

















 


no obligation of the Lenders to reinstate such
Commitments and the commitment fees provided for in Section 2.03(a) shall
thereafter be computed on the basis of the Commitments as so reduced.  The Facility Agent shall give each Lender
prompt notice of any commitment reduction or termination.


 


Section 2.05           Repayment.


 


(a)           Term Advances.


 


(i)            Term Tranche 1 Advances.  The aggregate principal amount of the Term
Tranche 1 Advances shall be payable by Borrower 1 in quarterly installments
equal to $2,000,000 on each of the first twenty-eight (28) consecutive
quarterly Payment Dates commencing six (6) months after the Rig 1 Delivery
Date.  Any remaining outstanding Term
Tranche 1 Advances shall be paid in full by Borrower 1 on the Rig 1 Maturity
Date.


 


(ii)           Term Tranche 2 Advances.  The aggregate principal amount of the Term
Tranche 2 Advances shall be payable by Borrower 2 in quarterly installments
equal to $2,000,000 on each of the first twenty-eight (28) consecutive
quarterly Payment Dates commencing six (6) months after the Rig 2 Delivery
Date.  Any remaining outstanding Term
Tranche 2 Advances shall be paid in full by Borrower 2 on the Rig 2 Maturity
Date.


 


(iii)          Term Tranche 3 Advances.  The aggregate principal amount of the Term
Tranche 3 Advances shall be payable by Borrower 3 in quarterly installments
equal to $2,000,000 on each of the first twenty-eight (28) consecutive
quarterly Payment Dates commencing six (6) months after the Rig 3 Delivery
Date.  Any remaining outstanding Term
Tranche 3 Advances shall be paid in full by Borrower 3 on the Rig 3 Maturity
Date.


 


(iv)          Term Tranche 4 Advances.  The aggregate principal amount of the Term
Tranche 4 Advances shall be payable by Borrower 4 in quarterly installments
equal to $2,000,000 on each of the first twenty-eight (28) consecutive
quarterly Payment Dates commencing six (6) months after the Rig 4 Delivery
Date.  Any remaining outstanding Term
Tranche 4 Advances shall be paid in full by Borrower 4 on the Rig 4 Maturity
Date.


 


(b)           Top-Up Advances.


 


(i)            Top-Up Tranche 1 Advances.  The aggregate principal amount of the Top-Up
Tranche 1 Advances shall be payable in equal quarterly installments determined
by the Facility Agent (and the Facility Agent shall promptly notify each Lender
of such amortization schedule) on each of the consecutive quarterly Payment
Dates occurring during the tenor of the applicable Drilling Contract pursuant
to which such Top-Up Tranche 1 Advances were made.


 


(ii)           Top-Up Tranche 2 Advances.  The aggregate principal amount of the Top-Up
Tranche 2 Advances shall be payable in equal quarterly installments determined
by the Facility Agent (and the Facility Agent shall promptly notify each Lender
of such amortization schedule) on each of the consecutive quarterly Payment
Dates occurring during the tenor of the applicable Drilling Contract pursuant
to which such Top-Up Tranche 2 Advances were made.


 


41

















 


(iii)          Top-Up Tranche 3 Advances.  The aggregate principal amount of the Top-Up
Tranche 3 Advances shall be payable in equal quarterly installments determined
by the Facility Agent (and the Facility Agent shall promptly notify each Lender
of such amortization schedule) on each of the consecutive quarterly Payment
Dates occurring during the tenor of the applicable Drilling Contract pursuant
to which such Top-Up Tranche 3 Advances were made.


 


(iv)          Top-Up Tranche 4 Advances.  The aggregate principal amount of the Top-Up
Tranche 4 Advances shall be payable in equal quarterly installments determined
by the Facility Agent (and the Facility Agent shall promptly notify each Lender
of such amortization schedule) on each of the consecutive quarterly Payment
Dates occurring during the tenor of the applicable Drilling Contract pursuant
to which such Top-Up Tranche 4 Advances were made.


 


(c)           Revolving
Advances.  The outstanding principal
amount of the Revolving Advances shall be payable by the Borrowers on the Final
Maturity Date.


 


(d)           Notwithstanding the foregoing, any
remaining outstanding Advances and all other unpaid Obligations shall be paid
in full by the Borrowers on the Final Maturity Date.


 


(e)           In addition, the Borrower shall pay
to the applicable Swap Counterparties the Swap Termination Value with respect
to any Swap Contracts that terminate in whole or in part as a result of such
repayments set forth above.


 


Section 2.06           Interest.  Each Borrower shall pay interest on the
unpaid principal amount of each Advance made to such Borrower by each Lender to
it from the date of such Advance until such principal amount shall be paid in
full, at the following rates per annum:


 


(a)           Advances.


 


(i)            Base Rate Advances.  If such Advance is a Base Rate Advance, a
rate per annum equal to the Adjusted Base Rate plus the Applicable
Margin, payable in arrears on each Payment Date and on the date such Base Rate
Advance shall be paid in full.


 


(ii)           Eurodollar Advances.  If such Advance is a Eurodollar Advance, a
rate per annum equal to the Eurodollar Rate for such Interest Period plus
the Applicable Margin, payable on the last day of such Interest Period, and, in
the case of Interest Periods of greater than three months, on the Business Day
which occurs during such Interest Period three months from the first day of
such Interest Period.


 


(b)           Additional Interest on Eurodollar
Advances.  Each Borrower shall pay to
each Lender, so long as any such Lender shall be required under regulations of
the Federal Reserve Board to maintain reserves with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities, additional interest
on the unpaid principal amount of each Eurodollar Advance made to such Borrower
by such Lender, from the effective date of such Advance until such principal
amount is paid in full, at an interest rate per annum equal at all times to the
remainder obtained by subtracting (i) the Eurodollar Rate for the Interest
Period for such Advance from (ii) the rate obtained by dividing such
Eurodollar Rate by a percentage equal to 


 


42

















 


100% minus the Eurodollar
Rate Reserve Percentage of such Lender for such Interest Period, payable on
each date on which interest is payable on such Advance.  Such additional interest payable to any
Lender shall be determined by such Lender and notified to the Borrowers through
the Facility Agent (such notice to include the calculation of such additional
interest, which calculation shall be conclusive in the absence of manifest
error, and be accompanied by any evidence indicating the need for such
additional interest as any Borrower may reasonably request).


 


(c)           Usury Recapture.  In the event the rate of interest chargeable
under this Agreement at any time (calculated after giving affect to all items
charged which constitute “interest” under applicable laws, including fees and
margin amounts, if applicable) is greater than the Maximum Rate, the unpaid
principal amount of the Advances shall bear interest at the Maximum Rate until
the total amount of interest paid or accrued on the Advances equals the amount
of interest which would have been paid or accrued on the Advances 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 Advances, the total amount of interest
paid or accrued under the terms of this Agreement and the Advances 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
each Borrower shall, to the extent permitted by applicable law, pay the
Facility Agent for the account of the Lenders an amount equal to the difference
between (i) the lesser of (A) the amount of interest which would have
been charged on its Advances if the Maximum Rate had, at all times, been in
effect and (B) the amount of interest which would have accrued on its
Advances 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 under this
Agreement on its Advances.


 


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 Advances,
and if no such principal is then outstanding, such excess or part thereof
remaining shall be paid to the Borrower.


 


(d)           Default Interest.  Upon the occurrence and the during the
continuance of an Event of Default, each Borrower shall on demand from time to
time pay interest, to the extent permitted by law, on the outstanding Advances
to but excluding the date of actual payment (after as well as before judgment) (a) in
the case of overdue principal, at the rate otherwise applicable to such Advance
pursuant to Section 2.06 plus 2.00% per annum and (b) in all other
cases, at a rate per annum (computed on the basis of the actual number of days
elapsed over a year of 360 days) equal to the rate that would be applicable to
an Eurodollar Advance plus 2.00%.


 


Section 2.07           Prepayments.


 


(a)           Right to Prepay.  No Borrower shall have the right to prepay
any principal amount of any Advance except as provided in this Section 2.07.


 


(b)           Optional Prepayments.  Any Borrower may elect to prepay, in whole or
in part, any Class or Tranche of the Advances owing by it to the Lenders,
after giving prior written 


 


43

















 


notice of such election
to the Facility Agent by 10:00 a.m. (Paris, France time) at least three
Business Days before such prepayment stating the proposed date, aggregate principal
amount, Class and Tranche of such prepayment.  If any such notice is given, the Facility
Agent shall give prompt notice thereof to each Lender and such Borrower shall
prepay such Class and Tranche of 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, together with accrued interest to the date
of such prepayment on the principal amount prepaid and amounts, if any,
required to be paid pursuant to Section 2.08 and any amounts, if
any, required to be paid pursuant to Section 2.07(d) as a
result of such prepayment being made on such date; provided, however,
that each partial prepayment shall be in an aggregate principal amount not less
than $2,000,000 and in integral multiples of $1,000,000 in excess thereof (or
such lesser amount as may then be outstanding). 
Optional prepayments of Term Advances and Top-Up Advances shall be
applied to outstanding Advances in the inverse order of maturity of the
remaining scheduled principal installments of such Tranche and Class of
Advances.  In addition, the Borrower
shall pay to the applicable Swap Counterparties the Swap Termination Value with
respect to any Swap Contracts that terminate in whole or in part as a result of
such optional prepayments set forth above.


 


(c)           Mandatory Prepayments.


 


(i)            Excess Cash Flow.  Within 45 days after the end of each fiscal
quarter, beginning with the first fiscal quarter ending at least six (6) months
after the Rig 1 Delivery Date, each Borrower shall prepay its outstanding Term
Advances and Top-Up Advances in an amount equal to its Excess Cash Flow for
such prior fiscal quarter as set forth on the Excess Cash Flow Certificate
delivered to Facility Agent pursuant to Section 5.06(c).  All such prepayments from Excess Cash Flow
shall be applied to in accordance with Section 2.07(c)(vi).


 


(ii)           Security Maintenance Ratio. If
at any time any Borrower shall fail to maintain a Security Maintenance Ratio of
at least 1.50 to 1.00, then as soon as possible but in any event no later than
30 days after such failure, to the extent such failure is continuing, either (A) such
Borrower will, or will cause the Parent or one of its Subsidiaries (provided
that such Subsidiary becomes a Loan Party pursuant to Section 5.12)
to, execute and deliver to the Collateral Agent additional Rig Mortgages
granting an Acceptable Security Interest in such other rigs or vessels
acceptable to the Collateral Agent (acting on the instruction of the Majority
Lenders) (together with any required amendments to any applicable Security
Agreement and such evidence of corporate authority to enter into and such legal
opinions in relation to such Security Documents as the Collateral Agent may
reasonably request) that have a Market Value such that the Security Maintenance
Ratio is at least 1.50 to 1.00, or (B) at the end of such 30-day period,
such Borrower shall prepay its outstanding Advances by an amount necessary so
that the Security Maintenance Ratio is at least 1.50 to 1.00.  All such prepayments shall be applied to the
applicable Tranche of the Advances in accordance with Section 2.07(c)(vi).


 


(iii)          Collateral Disposition.  Immediately upon receipt of Collateral
Disposition Proceeds, the Borrowers shall prepay the Advances in an amount
equal to 100% of such 


 


44

















 


Collateral Disposition Proceeds.  All such prepayments shall be applied to the
Advances in accordance with Section 2.07(c)(vi).


 


(iv)          Casualty Event.


 


(A)          Upon the occurrence of a Casualty
Event, if (1) no Event of Default has occurred and is continuing, (2) the
applicable Loan Party reasonably believes that all necessary repairs to any Rig
affected by a Casualty Event can be commenced within 90 days following such
Casualty Event and completed within 180 days thereafter, and (3) during
such 180-day period following commencement of such repairs, the applicable Loan
Party works diligently to complete all such repairs, then the applicable Loan
Party shall hold such Casualty Proceeds in a bank account subject to an Account
Control Agreement and shall apply such Casualty Proceeds in payment for all
necessary repairs, and following completion of such repairs within 180 days
after commencement of such repairs and if no Event of Default has occurred and
is continuing, the applicable Loan Party may retain the remainder of such
Casualty Proceeds (together with accrued interest thereon), if any, and shall
give notice to the Lenders thereof.  If
all necessary repairs to any Rig affected by a Casualty Event shall not have
been made within 180 days following commencement of such repairs, then the
applicable Borrower shall prepay the Advances in an amount equal to 100% of the
remaining Casualty Proceeds, and such prepayment shall be applied to the
Advances in accordance with Section 2.07(c)(vi), and the Collateral
Agent shall give notice to the Lenders thereof.


 


(B)           Upon the occurrence of a Casualty
Event, if an Event of Default has occurred and is continuing, any Casualty
Proceeds shall be delivered to the Collateral Agent which shall apply such
Casualty Proceeds to the Advances in accordance with Section 2.07(c)(vi).


 


(C)           Notwithstanding anything to the
contrary in the other Loan Documents, all insurance payments in respect of any
liability of the Loan Parties to third Persons or damage to Property of third
Persons by any Loan Party shall be paid by the underwriter of such Insurance
Policy directly to the Person to whom such liability is owed or directly to the
applicable Loan Party to reimburse it for any loss, damage or expense incurred
by it in connection with the event or condition giving rise to such liability.


 


(v)           Indemnifications.  All Indemnification Proceeds payable to or
received by the Loan Parties shall on the date of receipt by such Loan Party be
applied to prepay the Advances in an amount equal to 100% of such
Indemnification Proceeds.  All such
prepayments shall be applied to the Advances in accordance with Section 2.07(c)(vi).


 


(vi)          Application of Prepayments.  Each prepayment pursuant to this Section 2.07(c) 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 2.08
as a result of such prepayment being made on such date.  Each prepayment required 


 


45

















 


pursuant to this Section 2.07(c) shall
be applied (a) to the prepayment of the applicable Tranche of Top-Up
Advances in the inverse order of maturity of the remaining scheduled principal
installments of such Tranche, (b) to the prepayment of the applicable
Tranche of Term Advances in the inverse order of maturity of the remaining
scheduled principal installments of such Tranche, (c) to the prepayment of
the applicable Tranche of Revolving Advances, and, with respect to mandatory
prepayments from Collateral Disposition Proceeds only, make deposits into the
LC Cash Collateral Account to provide cash collateral for the Letter of Credit
Exposure, together with
a corresponding reduction of the applicable Tranche of the Revolving Commitment
and (d) any remainder shall be applied ratably to each of the other
Tranches of Advances, in the order set forth above.  In addition, the Borrower shall pay to the
applicable Swap Counterparties the Swap Termination Value with respect to any
Swap Contracts that terminate in whole or in part as a result of such mandatory
prepayments set forth above.


 


(d)           Prepayment Premiums.  Each of the following events shall be subject
to and accompanied by a premium determined in accordance with the table below
based on the period during which such prepayment shall occur:


 


(i)            all optional prepayments of Term
Advances or Top-Up Advances under Section 2.07(b),


 


(ii)           all mandatory prepayments under Section 2.07(c)(iii);
and


 


(iii)          any termination of any Tranche of the
Term Commitments or the Top-Up Commitments before such Commitments have been
fully drawn,


 


	
  Period:

  	
   

  	
  Prepayment Premium 

  Percentage

  	
   

  
	
  From the Effective Date through the Rig 4 Delivery Date

  	
   

  	
  1.00%

  	
   

  
	
  Rig 4 Delivery Date through the third anniversary thereof

  	
   

  	
  0.50%

  	
   

  
	
  Third anniversary of the Rig 4 Delivery Date and thereafter

  	
   

  	
  No
  prepayment premium

  	
   

  



 


Such prepayment premium shall be equal to the product
of the prepayment premium percentage specified above and (A) with respect
to any optional prepayments of all or a portion of any Tranche of outstanding
Term Advances or Top-Up Advances under Section 2.07(b), the principal
amount of the Advances prepaid, (B) with respect to any mandatory
prepayment under Section 2.07(c)(iii), the aggregate of such
Tranche’s undrawn Commitments, and (C) with respect to any termination of
any Tranche of the Term Commitments or the Top-Up Commitments before such
Commitments have been fully drawn, the aggregate of such Tranche’s undrawn Term
Commitments or undrawn Top-Up Commitments, as the case may be.


 


(e)           Illegality.  If any Lender shall notify the Facility Agent
and the Borrowers that any Change in Law makes it unlawful for such Lender or
its Applicable Lending Office to perform its obligations under this Agreement
or to make or maintain Eurodollar Advances then 


 


46

















 


outstanding hereunder,
the Borrowers shall, no later than 10:00 a.m. (New York time) (i) (A) if
not prohibited by any Legal Requirement to maintain such Eurodollar Advances
for the duration of the Interest Period, on the last day of the Interest Period
for each outstanding Eurodollar Advance or (B) if prohibited by any Legal
Requirement to maintain such Eurodollar Advances for the duration of the
Interest Period, on the second Business Day following its receipt of such
notice, prepay all Eurodollar Advances of all of the Lenders then outstanding,
together with accrued interest on the principal amount prepaid to the date of
such prepayment and amounts, if any, required to be paid pursuant to Section 2.08
as a result of such prepayment being made on such date, (ii) each Lender
shall simultaneously make a Base Rate Advance or, if not otherwise prohibited,
make an Eurodollar Advance in an amount equal to the aggregate principal amount
of the affected Eurodollar Advances, and (iii) the right of the Borrowers
to select Eurodollar Advances shall be suspended until such Lender shall notify
Facility Agent that the circumstances causing such suspension no longer
exist.  Each Lender agrees to use
commercially reasonable efforts (consistent with its internal policies and
subject to 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.


 


(f)            Ratable Payments; Effect of
Notice.  Each payment of any Advance
pursuant to this Section 2.07 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.  All notices given pursuant to this Section 2.07
shall be irrevocable and binding upon the applicable Borrower.


 


Section 2.08           Funding Losses.  If (a) any payment of principal of any
Eurodollar 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 2.07
or the acceleration of the maturity of the Advances pursuant to Article VII
or (b) if any Borrower fails to make a principal or interest payment with
respect to any Eurodollar Advance on the date such payment is due and payable,
such Borrower shall, within three Business Days of any written demand sent by
any Lender to such Borrower through the Facility Agent, pay to Facility 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, without
limitation, any loss, cost or expense actually incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by any Lender
to fund or maintain such Advance.  A
certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section shall be delivered to the
applicable Borrower and shall be conclusive absent manifest error.


 


Section 2.09           Increased Costs.


 


(a)           Increased Costs Generally.  If any Change in Law shall:


 


(i)            impose, modify or deem applicable
any reserve, special deposit, compulsory loan, insurance charge or similar
requirement against assets of, deposits with or for the account of, or credit
extended or participated in by, any Lender (except any 


 


47

















 


reserve requirement reflected in the Eurodollar Rate
Reserve Percentage) or any Issuing Bank;


 


(ii)           subject any Agent, any Joint
Bookrunner, any Mandated Lead Arranger, any Lender or any Issuing Bank to any
tax of any kind whatsoever with respect to this Agreement, any Letter of
Credit, any participation in a Letter of Credit or any Eurodollar Advance made
by it, or change the basis of taxation of payments to such Person in respect
thereof (except for Indemnified Taxes or Other Taxes covered by Section 2.11
and the imposition of, or any change in the rate of, any Excluded Tax payable
by such Agent, Joint Bookrunner, Mandated Lead Arranger, Lender or Issuing
Bank); or


 


(iii)          impose on any Lender or Issuing Bank
or the London interbank market any other condition, cost or expense affecting
this Agreement or Eurodollar Advances made by such Lender or any Letter of
Credit or participation therein;


 


and the result of any of the foregoing shall be to increase the cost to
such Lender of making or maintaining any Eurodollar Advance (or of maintaining
its obligation to make any such Advance), or to increase the cost to such
Lender or Issuing Bank of participating in, issuing or maintaining any Letter
of Credit (or of maintaining its obligation to participate in or to issue any
Letter of Credit), or to reduce the amount of any sum received or receivable by
such Lender or Issuing Bank hereunder (whether of principal, interest or any
other amount) then, upon written request of such Lender or Issuing Bank, the
applicable Borrower will pay to such Lender or Issuing Bank, as the case may
be, such additional amount or amounts as will compensate such Lender or Issuing
Bank, as the case may be, for such additional costs incurred or reduction
suffered.


 


(b)           Capital Requirements.  If any Lender or Issuing Bank determines that
any Change in Law affecting such Lender or Issuing Bank or any lending office
of such Lender or such Lender’s or Issuing Bank’s holding company, if any,
regarding capital requirements has or would have the effect of reducing the
rate of return on such Lender’s or Issuing Bank’s capital or on the capital of
such Lender’s or Issuing Bank’s holding company, if any, as a consequence of
this Agreement, the Commitments of such Lender or the Advances made by, or
participations in Letters of Credit held by, such Lender, or the Letters of
Credit issued by such Issuing Bank, to a level below that which such Lender or
Issuing Bank or such Lender’s or Issuing Bank’s holding company could have
achieved but for such Change in Law (taking into consideration such Lender’s or
Issuing Bank’s policies and the policies of such Lender’s or Issuing Bank’s
holding company with respect to capital adequacy), then from time to time the
applicable Borrower will pay to such Lender or Issuing Bank, as the case may
be, such additional amount or amounts as will compensate such Lender or Issuing
Bank or such Lender’s or Issuing Bank’s holding company for any such reduction
suffered.


 


(c)           Certificates for Reimbursement.  A certificate of a Lender or a Issuing Bank
setting forth the amount or amounts necessary to compensate such Lender or
Issuing Bank or its holding company, as the case may be, as specified in
paragraph (a) or (b) of this Section and delivered to the
applicable Borrower shall be conclusive absent manifest error. Such Borrower
shall pay such Lender or Issuing Bank, as the case may be, the amount shown as
due on any such certificate within 10 days after receipt thereof.


 


48
















 


(d)           Delay in Requests.  Failure or delay on the part of any Lender or
Issuing Bank to demand compensation pursuant to this Section shall not
constitute a waiver of such Lender’s or Issuing Bank’s right to demand such
compensation, provided that no Borrower shall be required to compensate
a Lender or Issuing Bank pursuant to this Section for any increased costs
incurred or reductions suffered more than nine months prior to the date that
such Lender or Issuing Bank, as the case may be, notifies the applicable
Borrower of the Change in Law giving rise to such increased costs or reductions
and of such Lender’s or Issuing Bank’s intention to claim compensation therefor
(except that, if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the nine-month period referred to above shall
be extended to include the period of retroactive effect thereof).


 


Section 2.10           Payments and Computations.


 


(a)           Payment Procedures.  Each Borrower shall make each payment under
this Agreement not later than 12:00 p.m. (New York time) on the day when
due to the Facility Agent at the Facility Agent’s Applicable Lending Office in
immediately available funds.  Each
Advance shall be repaid and each payment of interest thereon shall be paid in
Dollars.  All payments shall be made
without setoff, deduction, or counterclaim. The Facility Agent will promptly
thereafter, and in any event prior to the close of business on the day any
timely payment is made, cause to be distributed like funds relating to the payment
of principal, interest or fees ratably (other than amounts payable solely to
the Facility Agent, or a specific Lender pursuant to Section 2.03(b),
2.03(c), 2.08, 2.09 or 2.11, but after taking into
account payments effected pursuant to Section 10.04) to the Lenders
for the account of their respective Applicable Lending Offices, and like funds
relating to the payment of any other amount payable to any Lender to such
Lender for the account of its Applicable Lending Offices, in each case to be
applied in accordance with the terms of this Agreement.


 


(b)           Computations.  All computations of interest and of fees
shall be made by the Facility 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
Facility 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.


 


(d)           Agent Reliance.  Unless the Facility Agent shall have received
written notice from any Borrower prior to the date on which any payment is due
to the Lenders that such Borrower will not make such payment in full, the
Facility Agent may assume that such Borrower has made such payment in full to
the Facility Agent on such date and the Facility 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 to such Lender. 
If and to the extent such Borrower shall not have so made such payment
in full to Facility Agent, each Lender shall repay to the Facility Agent
forthwith on demand such amount distributed to such Lender, together with
interest thereon, for each day from the date such amount is distributed to such
Lender until the date such Lender 


 


49

















 


repays such amount to the
Facility Agent, at the greater of the Federal Funds Effective Rate for such day
and a rate determined by the Facility Agent in accordance with banking industry
rules on interbank compensation.


 


Section 2.11           Taxes.


 


(a)           Payments Free of Taxes.  Any and all payments by or on account of any
obligation of any Loan Party hereunder or under any other Loan Document shall
be made free and clear of and without reduction or withholding for any
Indemnified Taxes or Other Taxes, provided that if any Loan Party shall
be required by any Legal Requirement to deduct any Indemnified Taxes (including
any Other Taxes) from such payments, then (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) the
Facility Agent, Lender or Issuing Bank, as the case may be, receives an amount
equal to the sum it would have received had no such deductions been made, (ii) such
Loan Party shall make such deductions and (iii) such Loan Party shall
timely pay the full amount deducted to the relevant Governmental Authority in
accordance with Legal Requirements.


 


(b)           Payment of Other Taxes by the
Borrowers.  Without limiting the
provisions of paragraph (a) above, the Borrowers shall jointly and
severally timely pay any Other Taxes to the relevant Governmental Authority in
accordance with applicable law.


 


(c)           Indemnification by the Borrowers.  The Borrowers shall jointly and severally
indemnify the Facility Agent, each Lender and each Issuing Bank, within 10 days
after demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) paid by the Facility Agent,
such Lender or such Issuing Bank, as the case may be, and any penalties, interest
and reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the applicable Borrower by a Lender
or an Issuing Bank (with a copy to the Facility Agent), or by the Facility
Agent on its own behalf or on behalf of a Lender or an Issuing Bank, shall be
conclusive absent manifest error.


 


(d)           Evidence of Payments.  As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by any Borrower to a Governmental Authority,
such Borrower shall deliver to the Facility Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such
payment, a copy of the return reporting such payment or other evidence of such
payment reasonably satisfactory to the Facility Agent.


 


(e)           Status of Lenders.  Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the
jurisdiction in which any 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 Loan Document shall deliver to such Borrower (with a copy to
the Facility Agent), at the time or times prescribed by applicable law or
reasonably requested by a Borrower or the Facility 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 


 


50

















 


rate of withholding. In
addition, any Lender, if requested by a Borrower or the Facility Agent, shall
deliver such other documentation prescribed by applicable law or reasonably
requested by such Borrower or the Facility Agent as will enable such Borrower
or the Facility Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements.


 


                Without limiting the generality of the foregoing, in
the event that any Borrower is resident for tax purposes in the United States
of America, any Foreign Lender shall deliver to such Borrower and the Facility
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 written request of such
Borrower or the Facility Agent, but only if such Foreign Lender is legally entitled
to do so), whichever of the following is applicable:


 


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


 


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


 


(iii)          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 any Borrower within the meaning of section
881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation”
described in section 881(c)(3)(C) of the Code and (y) duly completed
copies of Internal Revenue Service Form W-8BEN, or


 


(iv)          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 Borrowers to
determine the withholding or deduction required to be made.


 


(f)            Treatment of Certain Refunds.  If the Facility Agent, a Lender or an Issuing
Bank 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 a Borrower or with
respect to which a Borrower has paid additional amounts pursuant to this
Section, it shall pay to such Borrower an amount equal to such refund (but only
to the extent of indemnity payments made, or additional amounts paid, by such
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 the Facility
Agent, such Lender or such Issuing Bank, 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 such Borrower, upon the
written request of the Facility Agent, such Lender or such Issuing Bank, agrees
to repay the amount paid over to such Borrower (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to the Facility
Agent, such Lender or such Issuing Bank in the event the Facility Agent, such
Lender or such Issuing Bank is required to repay such refund to such
Governmental Authority. This paragraph shall not be construed to require the
Facility 


 


51

















 


Agent, any Lender or any
Issuing Bank to make available its tax returns (or any other information
relating to its taxes that it deems confidential) to the Borrowers or any other
Person.


 


Section 2.12           Sharing of Payments, Etc.  If any Lender shall, by exercising any right
of setoff or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of its Advances or other obligations hereunder
resulting in such Lender’s receiving payment of a proportion of the aggregate
amount of its Advances and accrued interest thereon or other such obligations
greater than its Pro Rata Share, then the Lender receiving such greater
proportion shall (a) notify the Facility Agent of such fact, and (b) purchase
(for cash at face value) participations in the Advances and such other
obligations of the other Lenders, or make such other adjustments as shall be
equitable, so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Advances and other amounts owing them, provided
that: (i) if any such participations are purchased and all or any portion
of the payment giving rise thereto is recovered, such participations shall be
rescinded and the purchase price restored to the extent of such recovery,
without interest; and (ii) the provisions of this paragraph shall not be
construed to apply to (x) any payment made by any Loan Party pursuant to
and in accordance with the express terms of this Agreement or (y) any
payment obtained by a Lender as consideration for the assignment of or sale of
a participation in any of its Advances or participations in Letters of Credit
to any assignee or participant, other than to a Loan Party or any Subsidiary
thereof (as to which the provisions of this paragraph shall apply). Each Loan
Party consents to the foregoing and agrees, to the extent it may effectively do
so under applicable law, that any Lender acquiring a participation pursuant to
the foregoing arrangements may exercise against each Loan Party rights of
setoff and counterclaim with respect to such participation as fully as if such
Lender were a direct creditor of each Loan Party in the amount of such
participation.


 


Section 2.13           Applicable Lending Offices.  Each Lender may book its Advances at any
Applicable Lending Office selected by such Lender and may change its Applicable
Lending Office from time to time.  All
terms of this Agreement shall apply to any such Applicable Lending Office and
the Advances shall be deemed held by each Lender for the benefit of such
Applicable Lending Office.  Each Lender
may, by written notice to the Facility Agent designate replacement or
additional Applicable Lending Offices through which Advances will be made by it
and for whose account repayments are to be made.


 


Section 2.14           Letters of Credit.


 


(a)           Issuance.  From time-to-time from the Effective Date
until 30 days before the Final Maturity Date, at the written request of any
Borrower, the Issuing Banks shall, on the terms and conditions hereinafter set
forth, issue, increase, or extend the expiration date of Letters of Credit for
the account of a Borrower or for the account of any Loan Party (in which case a
Borrower and such Loan Party shall be co-applicants with respect to such Letter
of Credit) on any Business Day.  No
Letter of Credit will be issued, increased, or extended:


 


(i)            except as otherwise provided in (ii) below,
if the equity portion of the applicable Rig’s Total Cost as specified in the
attached Schedule 2.01 has not already been paid by the applicable
Borrower to the Shipyard, unless the applicable Borrower has 


 


52

















 


deposited into the LC Cash Collateral Account an
amount equal to the Letter of Credit Exposure with respect to such Letter of
Credit.


 


(ii)           if such issuance, increase, or
extension would cause the Letter of Credit Exposure to exceed (A) if the
equity portion of Rig 1’s Total Cost as specified in the attached Schedule
2.01 has already been paid by the applicable Borrower to the Shipyard, the
lesser of (1) $10,000,000 and (2) the Aggregate Revolving
Commitments, (B) if the equity portion of Rig 2’s Total Cost as specified
in the attached Schedule 2.01 has already been paid by the applicable
Borrower to the Shipyard, the lesser of (1) $20,000,000 and (2) the
Aggregate Revolving Commitments, (C) if the equity portion of Rig 3’s
Total Cost as specified in the attached Schedule 2.01 has already been
paid by the applicable Borrower to the Shipyard, on or before the Rig 4
Delivery Date, the lesser of (1) $30,000,000 and (2) the Aggregate
Revolving Commitments, and (D) if the equity portion of Rig 4’s Total Cost
as specified in the attached Schedule 2.01 has already been paid by the
applicable Borrower to the Shipyard, the Aggregate Revolving Commitments, in
each case minus the sum of the aggregate outstanding principal amount of
all Revolving Advances;


 


(iii)          unless such Letter of Credit has an
expiration date not later than the earlier of (A) two years after the
date of issuance thereof or such longer period as agreed to by the applicable
Issuing Bank and (B) five Business Days prior to the Final Maturity Date;


 


(iv)          unless such Letter of Credit is in
form and substance acceptable to the applicable Issuing Bank in its sole
discretion;


 


(v)           until the applicable Rig’s Delivery
Date, with respect to any Letter of Credit which relates to a specific Rig,
unless the beneficiary of such Letter of Credit is reasonably acceptable to the
Joint Bookrunners and the Majority Lenders;


 


(vi)          unless the applicable Borrower has
delivered to the applicable Issuing Bank a completed and executed Letter of
Credit Application;


 


(vii)         unless such Letter of Credit is
governed by any of (A) the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No. 500,
(B) the Uniform Customs and Practice for Documentary Credits (2007
Revision), International Chamber of Commerce Publication No. 600 or (C) the
International Standby Practices, International Chamber of Commerce Commission
Publication No. 590, or any successor to such publications.  If the terms of any letter of credit
application referred to in the foregoing clause (iv) conflicts with the
terms of this Agreement, the terms of this Agreement shall control; and


 


(viii)        prior to the Rig 1 Delivery Date, unless
such Letter of Credit is issued as  a bid
bond or performance bond;


 


Each Letter of Credit shall be issued or amended, as
the case may be, upon the written request of the applicable Borrower delivered
to the Issuing Bank (with a copy to the Facility Agent) in the form of a Letter
of Credit Application, appropriately completed and signed by a Responsible
Officer of such Borrower.  Such Letter of
Credit Application must be received by the Issuing 


 


53

















 


Bank and the Facility Agent not later than 5:00 p.m.
(Paris, France time) on the fifth Business Day (or such later date and time as
the Facility Agent and the Issuing Bank may agree in a particular instance in
their sole discretion) prior to the proposed issuance date or date of
amendment, as the case may be. 
Additionally, the Borrower shall furnish to the Issuing Bank and the
Administrative Agent such other documents and information pertaining to such
requested Letter of Credit issuance or amendment, as the Issuing Bank or the
Facility Agent may require.


 


(b)           Participations.  Upon the date of the issuance or increase of
a Letter of Credit occurring on or after the Effective Date, the applicable
Issuing Bank shall be deemed to have sold to each other Lender and each other
Lender shall have been deemed to have purchased from the applicable Issuing
Bank a participation in the related Letter of Credit Obligations equal to such
Lender’s Pro Rata Share at such date.  In
consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Facility Agent, for the
account of the applicable Issuing Bank, such Lender’s Pro Rata Share of each
payment or disbursement made by an Issuing Bank pursuant to a Letter of Credit
and not reimbursed by the applicable Loan Party (or, if applicable, another
party pursuant to its obligations under any other Loan Document) forthwith on
the date due as provided in Section 2.14(c).  Each Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of
Letters of Credit is absolute and unconditional and shall not be affected by
any circumstance whatsoever, including the occurrence and continuance of a
Default or an Event of Default, and that each such payment shall be made
without any offset, abatement, withholding or reduction whatsoever.  The applicable Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. 
Such Issuing Bank shall as promptly as possible give telephonic
notification, confirmed by fax, to the Facility Agent and the applicable
Borrower of such demand for payment and whether such Issuing Bank has made or
will make disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the applicable Borrower of its
obligation to reimburse such Issuing Bank and the Lenders with respect to any
such payment or disbursement.  The
Facility Agent shall promptly give each Lender notice thereof.


 


(c)           Reimbursement.  Each Borrower hereby agrees to pay on demand
to the applicable Issuing Bank in respect of each Letter of Credit issued for
its account an amount equal to any amount paid by such Issuing Bank under or in
respect of such Letter of Credit.  In the
event any Issuing Bank makes a payment pursuant to a request for draw presented
under a Letter of Credit and such payment is not promptly reimbursed by the
applicable Borrower on the same Business Day, such Issuing Bank shall give
notice of such failure to pay to the Facility Agent and the Lenders, and each
Lender shall promptly reimburse the applicable Issuing Bank for such Lender’s
Pro Rata Share of such payment, and such reimbursement shall be deemed for all
purposes of this Agreement to constitute a Borrowing comprised of Eurodollar
Rate Advances with an Interest Period of one month’s duration to the applicable
Borrower from such Lender.  If such
reimbursement is not made by any Lender to the applicable Issuing Bank on the
same day on which such Issuing Bank shall have made payment on any such draw,
such Lender shall pay interest thereon to such Issuing Bank at a rate per annum
equal to the greater of the Federal Funds Effective Rate and a rate determined
by the Facility Agent in accordance with banking industry rules on
interbank compensation.  Each Borrower
hereby unconditionally and irrevocably authorizes, empowers, and directs the
Facility Agent and the Lenders to record and 


 


54

















 


otherwise treat such
payment under a Letter of Credit not immediately reimbursed by such Borrower as
a Borrowing comprised of Eurodollar Rate Advances.


 


(d)           Obligations Unconditional.  The obligations of each Borrower under this
Agreement in respect of each Letter of Credit shall be absolute, 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, any Loan Document, or any
term or provision therein;


 


(ii)           any amendment or waiver of or any
consent to departure from all or any of the provisions of any Letter of Credit
Document or any Loan Document;


 


(iii)          the existence of any claim, set-off,
defense or other right which any Borrower, any other party guaranteeing, or
otherwise obligated with, such Borrower, any subsidiary or other Affiliate
thereof 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 Bank, any Lender
or any other Person, whether in connection with this Agreement, any other Loan
Document, the transactions contemplated in this Agreement or in any Letter of
Credit Documents or any unrelated transaction;


 


(iv)          any draft or other document presented
under a 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;


 


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


 


(vi)          any other act or omission to act or
delay of any kind of the Issuing Banks, the Facility Agent, the Lenders or any
other Person or any other event, circumstance or happening whatsoever, whether
or not similar to any of the foregoing, that might, but for the provisions of
this Section, constitute a legal or equitable discharge of any Borrower’s
obligations hereunder.


 


Without limiting the generality of the foregoing, it
is expressly understood and agreed that the absolute and unconditional
obligation of each Borrower hereunder to reimburse each payment or disbursement
made by an Issuing Bank pursuant to a Letter of Credit will not be excused by
the gross negligence or willful misconduct of the applicable Issuing Bank.


 


(e)           Prepayments of Letters of Credit.  In the event that any Letters of Credit shall
be outstanding or shall be drawn and not reimbursed after the Final Maturity
Date, the Borrowers  shall jointly and
severally pay to the Facility Agent an amount equal to the Letter of Credit
Exposure allocable to such Letters of Credit to be held in the LC Cash
Collateral Account and applied in accordance with paragraph (g) below.


 


55

















 


(f)            Liability of Issuing Bank.  Each 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. 
None of the Issuing Banks nor any of their respective 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 an Issuing Bank 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; or


 


(iv)          any other circumstances whatsoever in
making or failing to make payment under any Letter of Credit (including such
Issuing Bank’s own negligence),


 


except that a Borrower shall have a claim against an Issuing
Bank, and an Issuing Bank shall be liable to, and shall promptly pay to, a
Borrower, to the extent of any direct, as opposed to consequential (claims in
respect of which are hereby waived by the Borrowers to the extent permitted by
applicable law), damages suffered by such Borrower which such Borrower proves
were caused by such Issuing Bank’s willful misconduct or gross negligence in
determining whether documents presented under a Letter of Credit strictly
comply with the terms of such Letter of Credit. 
It is understood that an Issuing Bank 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 and, in making any
payment under any Letter of Credit (i) such Issuing Bank’s exclusive
reliance on the documents presented to it under such Letter of Credit as to any
and all matters set forth therein, including reliance on the amount of any draft
presented under such Letter of Credit, whether or not the amount due to the
beneficiary thereunder equals the amount of such draft and whether or not any
document presented pursuant to such Letter of Credit proves to be insufficient
in any respect, if such document on its face appears to be in order, and
whether or not any other statement or any other document presented pursuant to
such Letter of Credit proves to be forged or invalid or any statement therein
proves to be inaccurate or untrue in any respect whatsoever and (ii) any
noncompliance in any immaterial respect of the documents presented under such
Letter of Credit with the terms thereof shall, in each case, be deemed not to
constitute willful misconduct or gross negligence of such Issuing Bank.


 


(g)           LC Cash Collateral Account.


 


(i)            If the Borrowers are required to
deposit funds in the LC Cash Collateral Account pursuant to Sections 2.07(c),
2.14(a)(vii), 2.14(e), 7.02(b) or 7.03(b), then the
Borrowers and the Facility Agent shall establish the LC Cash Collateral Account
and the Borrowers shall execute any documents and agreements, including the
Facility Agent’s standard form assignment of deposit accounts, that the
Facility Agent requests in connection therewith to establish the LC Cash
Collateral Account and grant the Facility 


 


56

















 


Agent an Acceptable Security Interest in such account
and the funds therein.  Each Borrower
hereby pledges to the Facility Agent and grants the Facility Agent a security
interest in the LC Cash Collateral Account, whenever established, all funds
held in the LC Cash Collateral Account from time to time, and all proceeds
thereof as security for the payment of the Obligations.


 


(ii)           Funds held in the LC Cash Collateral
Account shall be held as cash collateral for obligations with respect to
Letters of Credit and promptly applied by the Facility Agent at the written
request of any Issuing Bank to any reimbursement or other obligations under
Letters of Credit that exist or occur. 
To the extent that any surplus funds are held in the LC Cash Collateral
Account above the Letter of Credit Exposure during the existence of an Event of
Default the Facility Agent may (A) hold such surplus funds in the LC Cash
Collateral Account as cash collateral for the Obligations or (B) apply
such surplus funds to any Obligations in any manner directed by the Majority
Lenders.  Except with respect to funds
deposited in the LC Cash Collateral Account pursuant to Section 2.14(a)(vii),
if no Default or Event of Default exists, the Facility Agent shall release to
the Borrowers at the Borrowers’ written request any funds held in the LC Cash
Collateral Account above the amounts required by Section 2.14(e) or
otherwise.  With respect to funds
deposited in the LC Cash Collateral Account pursuant to Section 2.14(a)(vii),
if no Default or Event of Default exists, the Facility Agent shall release to
the Borrowers at the Borrowers’ written request any funds held in the LC Cash
Collateral Account above the amounts required by Section 2.14(a)(vii) if
the Facility Agent has received satisfactory evidence that the equity portion
of the applicable Rig’s Total Cost as specified in the attached Schedule 2.01
has already been paid by the applicable Borrower to the Shipyard.


 


(iii)          Funds held in the LC Cash Collateral
Account shall be invested in Cash Equivalents maintained with, and under the
sole dominion and control of, the Facility Agent or in another investment if
mutually agreed upon by the Borrowers and the Facility Agent, but the Facility
Agent shall have no other obligation to make any other investment of the funds
therein.  The Facility Agent shall
exercise reasonable care in the custody and preservation of any funds held in the
LC Cash Collateral Account and shall be deemed to have exercised such care if
such funds are accorded treatment substantially equivalent to that which the
Facility Agent accords its own property, it being understood that the Facility
Agent shall not have any responsibility for taking any necessary steps to
preserve rights against any parties with respect to any such funds.


 


Section 2.15           Mitigation Obligations;
Designation of a Different Lending Office. 
If any Lender requests compensation under Section 2.09, or
requires any Borrower to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.11,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 2.09 or 2.11,
as the case may be, in the future and (ii) would not subject such Lender
to any unreimbursed cost or expense and would not otherwise be disadvantageous
to such Lender. The 


 


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Borrowers hereby jointly
and severally agree to pay all reasonable costs and expenses incurred by any
Lender in connection with any such designation or assignment.


 


Section 2.16           Joint and Several Liability of the
Borrowers.


 


(a)           Each of the Borrowers is accepting
joint and several liability hereunder in consideration of the Advances and
Letters of Credit to be provided by the Lenders and the Facility Agent under
this Agreement, for the mutual benefit, directly and indirectly, of each of the
Borrowers and in consideration of the undertakings of each of the Borrowers to
accept joint and several liability for the obligations of each of them with
respect to the Obligations.


 


(b)           Each of the Borrowers jointly and
severally hereby irrevocably and unconditionally accepts, not merely as a
surety but also as a co-debtor, joint and several liability with the other
Borrower, with respect to the payment and performance of all of the obligations
arising under this Agreement, it being the intention of the parties hereto that
all the obligations with respect to the Obligations shall be the joint and
several obligations of all the Borrowers without preferences or distinction
among them.


 


(c)           If and to the extent that any of the
Borrowers shall fail to make any payment with respect to any of the obligations
hereunder as and when due or to perform any of such obligations in accordance
with the terms thereof, then in each such event the other Borrower will make
such payment with respect to, or perform, such obligation.


 


(d)           The obligations of each Borrower
under the provisions of this Section 2.16 constitute full recourse
obligations of such Borrower enforceable against it to the full extent of its
properties and assets, irrespective of the validity, regularity or
enforceability of this Agreement or any other circumstance whatsoever.


 


(e)           The provisions of this Section 2.16
are made for the benefit of the Lenders and the Facility Agent and their
successors and assigns, and may be enforced by them in accordance with the
terms of this Agreement from time to time against either of the Borrowers as
often as occasion therefor may arise and without requirement on the part of the
Lenders or the Facility Agent first to marshall any of their claims or to
exercise any of their rights against the other Borrower or to exhaust any
remedies available to them against the other Borrower or to resort to any other
source or means of obtaining payment of any of the obligations hereunder or to
elect any other remedy.  The provisions
of this Section 2.16 shall remain in effect until all the obligations
hereunder shall have been paid in full or otherwise fully satisfied.  If at any time, any payment, or any part
thereof, made in respect of any of the obligations, is rescinded or must
otherwise be restored or returned by the Lenders or the Facility Agent upon the
insolvency, bankruptcy or reorganization of the Borrowers, or otherwise, the
provisions of this Section 2.16 will forthwith be reinstated in
effect, as though such payment had not been made.


 


Section 2.17           Mitigation Obligations;
Replacement of Lenders.


 


(a)           Designation of a Different Lending
Office. If any Lender requests compensation under Section 2.09,
or any Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.11,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking 


 


58

















 


its Loans hereunder or to
assign its rights and obligations hereunder to another of its offices, branches
or affiliates, if, in the judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.09
or 2.11, as the case may be, in the future and (ii) would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender. The Borrowers hereby jointly and severally
agree to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.


 


(b)           Replacement of Lenders.  If any Lender requests compensation under Section 2.09,
or if any Borrower is required to pay any additional amount to any Lender or
any Governmental Authority for the account of any Lender pursuant to Section 2.11,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrowers may, at their sole expense and effort, upon notice to such Lender and
the Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section 10.06), all of its interests, rights
and obligations under this Agreement and the related Loan Documents to an
assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment), provided that: (i) the
Borrowers shall have paid to the Administrative Agent the assignment fee
specified in Section 10.06; (ii) such Lender shall have
received payment of an amount equal to the outstanding principal of its
Advances, accrued interest thereon, accrued fees and all other amounts payable
to it hereunder and under the other Loan Documents (including any amounts under
Section 2.08) from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrowers (in the case of all
other amounts); (iii) in the case of any such assignment resulting from a
claim for compensation under Section 2.09 or payments required to
be made pursuant to Section 2.11, such assignment will result in a
reduction in such compensation or payments thereafter; and (iv) such
assignment does not conflict with Legal Requirements. A Lender shall not be
required to make any such assignment or delegation if, prior thereto, as a result
of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation cease to apply.


 


ARTICLE III

CONDITIONS OF LENDING


 


Section 3.01           Initial Conditions Precedent.  The obligation of each Lender to make its
initial Advances as part of the initial Borrowing or any Issuing Bank to issue
the initial Letters of Credit is subject to the conditions precedent that:


 


(a)           Documentation.  On or before the day on which the initial
Borrowing is made or the initial Letter of Credit is issued, the Facility Agent
and the Lenders shall have received the following, each dated as of the Closing
Date unless otherwise indicated below, duly executed by all the parties
thereto, each in form and substance satisfactory to the Facility Agent and the
Lenders:


 


(i)            this Agreement and all attached
Exhibits and Schedules;


 


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(ii)           any Note requested by a Lender
pursuant to Section 2.02(g) payable to the order of such
requesting Lender in the amount of each Tranche of its Term Commitment, Top-Up
Commitment or Revolving Commitment;


 


(iii)          the Security Agreement, together with
UCC-1 financing statements and any other documents, agreements or instruments
necessary to create an Acceptable Security Interest in the Collateral described
therein;


 


(iv)          the Pledge Agreement pledging to the
Collateral Agent for the benefit of the Secured Parties all of the Equity
Interests of the Subsidiaries of the Parent and the Subsidiaries of the other
Loan Parties, together with stock certificates, stock powers executed in blank,
UCC-1 financing statements and any other documents, agreements or instruments
necessary to create an Acceptable Security Interest in such Equity Interest;


 


(v)           the Collateral Assignment of Rig
Construction Contract and any other documents, agreements or instruments
necessary to create an Acceptable Security Interest therein;


 


(vi)          a certificate dated as of the
Effective Date from a Responsible Officer of the Parent stating that (A) all
representations and warranties of the Loan Parties set forth in this Agreement
and in the other Loan Documents to which it is a party are true and correct in
all material respects; (B) no Default has occurred and is continuing; and (C) the
conditions in this Section 3.01 have been met;


 


(vii)         copies of the certificate or articles
of incorporation or other equivalent organizational documents, including all
amendments thereto, of each Loan Party, certified as of a recent date by the
Secretary of State or other functional equivalent of the jurisdiction of its
organization, if available;


 


(viii)        a certificate of the Secretary or
Assistant Secretary of each Loan Party dated as of the Closing Date and
certifying (A) that attached thereto is a true and complete copy of the
by-laws or other functional equivalent of such Loan Party as in effect on the
Closing Date, (B) that attached thereto is a true and complete copy of
resolutions duly adopted by the Board of Directors or other functional
equivalent of such Loan Party authorizing the execution, delivery and
performance of the Loan Documents to which such Loan Party is a party and, in
the case of each Borrower, the borrowings hereunder, and that such resolutions
have not been modified, rescinded or amended and are in full force and effect, (C) that
the certificate or articles of incorporation or other organizational documents
of such Loan Party have not been amended since the date of the last amendment
thereto shown on the certificate furnished pursuant to clause (vii) above,
and (D) as to the incumbency and specimen signature of each officer
executing any Loan Document, Notices of Borrowing or any other document
delivered in connection herewith on behalf of such Loan Party;


 


(ix)           a certificate of another officer dated
as of  the Closing Date as to the
incumbency and specimen signature of the Secretary or Assistant Secretary
executing the certificate pursuant to (viii) above;


 


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(x)            certificates from the appropriate
Governmental Authority certifying as of a recent date as to the good standing,
existence and authority of each of the Loan Parties in all jurisdictions where
required by the Facility Agent;


 


(xi)           a favorable opinion dated as of the
Closing Date of Porter & Hedges LLP, New York counsel to the Loan
Parties;


 


(xii)          a favorable opinion dated as of the
Closing Date of Maples and Calder, Cayman Islands counsel to the Loan Parties;


 


(xiii)         a favorable opinion dated as of the
Closing Date of Herbert Smith, English counsel to the Facility Agent;


 


(xiv)        a certificate from the chief financial
officer of the Parent dated as of the Closing Date addressed to the Facility
Agent and each of the Lenders regarding the matters set forth in Section 4.19;


 


(xv)         a certificate from the chief financial
officer of the Parent addressed to the Facility Agent and each of the Lenders
which shall reaffirm that as of the Closing Date the Projections prepared by
the Parent and previously provided to the Joint Bookrunners and the Lenders are
true and correct in all material respects based upon the assumptions stated
therein and the best information reasonably available to such officer at the
time such Projections were made and shall describe any changes therein and
state that such changes shall not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect;


 


(xvi)        copies of each of the Transaction
Documents certified as of the Closing Date by a Responsible Officer (A) as
being true and correct copies of such documents as of the Closing Date, (B) as
being in full force and effect and (C) that no material term or condition
thereof shall have been amended, modified or waived after the execution thereof
without the prior written consent of the Majority Lenders;


 


(xvii)       copies of each of the Drillship Documents
certified as of the Closing Date by a Responsible Officer (A) as being
true and correct copies of such documents as of the Closing Date, and (B) as
being in full force and effect;


 


(xviii)      a pro forma certificate as to the
prospective coverage under the Insurance Policies required by Section 5.04
and the applicable provisions of the Security Documents;


 


(xix)         acknowledgment from CT Corporation
System as of the Closing Date with respect to its irrevocable appointment by
each Loan Party pursuant to Section 10.14(b);


 


(xx)          no less than three Business Days prior
to the Closing Date, all documentation and other information which any Joint
Bookrunner, any Agent or any Lender reasonably requests in order to comply with
its ongoing obligations under applicable “know your customer” and anti-money
laundering rules and regulations, including the Patriot Act; and


 


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(xxi)         such other documents, governmental
certificates and agreements as any Agent or any Lender  may reasonably request.


 


(b)           Payment of Fees.  On the Effective Date, the Borrowers shall
have paid the fees required to be paid to the Agents, the Joint Bookrunners,
and the Lenders on the Effective Date, including, without limitation, the fees
set forth in the Fee Letters and all other costs and expenses which have been
invoiced and are payable pursuant to Section 10.04.


 


(c)           Due Diligence.  The Joint Bookrunners shall have completed
satisfactory due diligence review of the assets, liabilities, business,
operations and condition (financial or otherwise) of the Parent and its
Subsidiaries, and all legal, financial, accounting, governmental, tax and
regulatory matters, and fiduciary aspects of the proposed financing.


 


(d)           Consummation of the Vantage
Acquisition.  The Joint Bookrunners
shall have had the opportunity to review and shall be satisfied with the terms
of the Transaction Documents, including all disclosure schedules and exhibits
thereto, and the Joint Bookrunners shall have received evidence satisfactory to
the Joint Bookrunners confirming that (i) all of the transactions
contemplated by the Transaction Documents and the Proxy Statement shall have
been consummated and no conditions under such documents remain unsatisfied and (ii) the
Vantage Acquisition shall have occurred on or before the Effective Date.  All of the conditions to the effectiveness to
each of the Rig Construction Contracts shall have been satisfied.


 


(e)           Security Documents.  The Collateral Agent shall have received all
appropriate evidence required by the Collateral Agent in its sole discretion
necessary to determine that arrangements have been made for the Collateral
Agent for the benefit of Secured Parties to have an Acceptable Security
Interest in the Collateral, including, without limitation, (i) the
delivery to the Collateral Agent of such financing statements under the Uniform
Commercial Code for filing in such jurisdictions as the Collateral Agent may
require, and (ii) lien, tax and judgment searches conducted on the Loan
Parties reflecting no Liens other than Permitted Prior Liens against any of the
Collateral as to which perfection of a Lien is accomplished by the filing of a
financing statement.


 


(f)            Financial Statements.  The Facility Agent and the Lenders shall have
received true and correct copies of (i) the Audited Financial Statements, (ii) the
Pro Forma Financial Statements and (iii) the Projections for the five year
period commencing on the Effective Date and such other financial information as
any Joint Bookrunners may reasonably request.


 


(g)           No Proceeding or Litigation; No
Injunctive Relief.  No action, suit,
investigation or other proceeding (including, without limitation, the enactment
or promulgation of a statute or rule) by or before any arbitrator or any
Governmental Authority shall be threatened or pending and no preliminary or
permanent injunction or order by a state or federal court shall have been
entered (i) in connection with this Agreement or any of the Transactions
or (ii) which, in any case, in the reasonable judgment of the Facility
Agent, could reasonably be expected to have a Material Adverse Effect.


 


(h)           Authorizations and Approvals.  All Governmental Authorities and Persons
shall have approved or consented to the Transactions and the transactions
contemplated hereby, 


 


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including, without
limitation, those required in connection with the continued operation of the
Parent and its Subsidiaries, to the extent required, and such approvals shall
be in full force and effect, and all applicable waiting periods shall have
expired without any action being taken or threatened that would restrain,
prevent or otherwise impose adverse conditions on this Agreement, the
Transactions and the actions contemplated hereby and thereby.


 


(i)            No Default.  No Default shall have occurred and be
continuing or would result from such Advance or from the application of the
proceeds therefrom.


 


(j)            Representations and Warranties.  The representations and warranties contained
in Article IV hereof and in each other Loan Document shall be true and
correct before and after giving effect to the Advances and to the application
of the proceeds from such Advances from the date of the Advances, as though made
on and as of such date.


 


(k)           No Material Adverse Effect.  Since December 31, 2006, no event or
events that, individually or in the aggregate, has had or is reasonably likely
to have a Material Adverse Effect shall have occurred.


 


Section 3.02           Conditions Precedent to Term
Borrowings.  The obligation of each
Lender to make each Term Advance as part of each Term Borrowing for each
particular Tranche is subject to the conditions precedent that:


 


(a)           the Facility Agent has received
satisfactory evidence that the equity portion of the applicable Rig’s Total
Cost as specified in the attached Schedule 2.01 has already been paid by
the applicable Borrower to the Shipyard;


 


(b)           the Facility Agent shall have
received evidence, satisfactory to the Facility Agent in its sole discretion,
that the installment under the Rig Construction Contract being financed by such
Term Borrowing is then due and payable in accordance with the terms thereof,
including a commercial invoice from the Shipyard for such amount;


 


(c)           the Facility Agent shall have
received the on-site report of the Technical Advisor addressed to the Facility
Agent and the Lenders confirming (i) that construction of such Rig up to
such date has been in accordance with the Specifications (as defined in the
applicable Rig Construction Contract), and (ii) that the Technical Advisor
has no reason to believe that such Rig will not be completed  and delivered in accordance with the terms of
the Rig Construction Contract on or before the applicable Delivery Date;


 


(d)           unless the Joint Bookrunners in
consultation with the Majority Lenders shall have otherwise consented in
writing, prior to the making of any additional Term Advances that consist of
Tranche 2 Advances, Tranche 3 Advances or Tranche 4 Advances after the Rig 1
Delivery Date, the applicable Borrower shall have entered into a drilling
contract reasonably acceptable to the Joint Bookrunners with respect to Rig 1;
and


 


(e)           unless the Joint Bookrunners in
consultation with the Majority Lenders shall have otherwise consented in
writing, prior to the making of any additional Term Advances that consist of
Tranche 2 Advances, Tranche 3 Advances or Tranche 4 Advances after the Rig 1
Delivery 


 


63

















 


Date, the applicable
Borrower has complied with the requirements of Sections 5.14 and 5.15
with respect to Rig 1.


 


Section 3.03           Conditions Precedent to Top-Up
Borrowings.  The obligation of each
Lender to make each Top-Up Advance as part of each Top-Up Borrowing for each
particular Tranche is subject to the conditions precedent that:


 


(a)           the applicable Rig with respect to
the Tranche of Top-Up Advances is operating 
and accepted for service under the terms of a Drilling Contract;


 


(b)           the applicable Borrower has delivered
an executed Charter Assignment in accordance with the requirements of Section 5.15
with respect to such Drilling Contract;


 


(c)           such Drilling Contract will generate
sufficient revenue as determined by the Facility Agent, and notified to the
Lenders, for the applicable Borrower in order to amortize in full the related
Top-Up Advance during the term of such Drilling Contract, in addition to any
mandatory repayments of the Term Advances of the same Tranche during such term;
and


 


(d)           the applicable Borrower has complied with
the requirements of Sections 5.14 and 5.15.


 


Section 3.04           Conditions Precedent to Revolving
Borrowings.  The obligation of each
Lender to make each Revolving Advance as part of each Revolving Borrowing for
each particular Tranche is subject to the conditions precedent that, with
respect to each Tranche of Revolving Advances, the applicable Borrower shall
have complied with the requirements of Sections 5.14 and 5.15.


 


Section 3.05           Conditions Precedent to Each
Borrowing.  The obligation of each
Lender to make an Advance on the occasion of each Borrowing (including the
initial Borrowing) or Continue a Eurodollar Advance for an Interest Period of
longer than one month’s duration, and the obligation of the Issuing Banks to
issue, extend or increase Letters of Credit shall be subject to the further
conditions precedent that on the Borrowing Date, the date of Continuation, or
issuance, extension or increase date of such Letters of Credit, the following
statements shall be true (and each of the giving of the applicable Notice of
Borrowing or Notice of Continuation and the acceptance by a Borrower of the
proceeds of such Advance or the written request for the issuance, extension or
increase of a Letter of Credit shall constitute a representation and warranty
by such Borrower that on the date of such Advance, the date of such
Continuation, or the date of such issuance, extension or increase such
statements are true):


 


(a)           the representations and warranties
contained in Article IV and in each other Loan Document are correct on and
as of the date of such Advance or Continuation, or the issuance, extension or
increase of such Letter of Credit before and after giving effect to such
Advance and to the application of the proceeds from such Advance or such
Continuation, or to the issuance, extension or increase of such Letter of
Credit, as applicable, as though made on, and as of such date;


 


64
















 


(b)           no Default has occurred and is
continuing or would result from such Advance or from the application of the
proceeds therefrom or from such issuance, extension or increase of such Letter
of Credit; and


 


(c)           no Material Adverse Effect shall have
occurred and be continuing.


 


Section 3.06           Determinations Under Sections
3.01, 3.02, 3.03, 3.04 and 3.05.  For
purposes of determining compliance with the conditions specified in Sections
3.01, 3.02, 3.03, 3.04 and 3.05, each Lender
shall be deemed to have consented to, approved or accepted or to be satisfied
with each document or other matter required thereunder to be consented to or
approved by or acceptable or satisfactory to the Lenders unless an officer of
the Facility Agent responsible for the transactions contemplated by the Loan
Documents shall have received written notice from such Lender prior to the
Borrowings hereunder specifying its objection thereto and such Lender shall not
have made available to the Facility Agent such Lender’s ratable portion of such
Borrowings.


 


ARTICLE IV

REPRESENTATIONS AND WARRANTIES


 


Each Loan Party jointly and
severally represents and warrants to the Secured Parties as follows:


 


Section 4.01           Existence; Subsidiaries.  Each of the Loan Parties is duly formed,
validly existing, and in good standing (to the extent the concept of good
standing is applicable in such jurisdiction) under the laws of the jurisdiction
of its formation 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 so qualified could reasonably be
expected to have a Material Adverse Effect.


 


Section 4.02           Power and Authority.  Each of the Loan Parties has the requisite
power and authority to own its assets and carry on its business and execute and
deliver the Loan Documents to which it is a party and to perform its
obligations thereunder.  The execution,
delivery, and performance by each Loan Party of this Agreement and the other
Loan Documents to which it is a party and the consummation of the transactions
contemplated hereby (a) have been duly authorized by all necessary
organizational action, (b) do not and will not (i) contravene the
terms of any such Person’s organizational documents, (ii) violate any
Legal Requirement, or (iii) conflict with or result in any breach or
contravention of, or the creation of any Lien under (A) the provisions of
any indenture, instrument or agreement to which such Loan Party is a party or
is subject, or by which it, or its Property, is bound or (B) any order,
injunction, writ or decree of any Governmental Authority or any arbitral award
to which such Person or its property is subject.


 


Section 4.03           Authorization and Approvals.  No authorization, approval, consent, exemption,
or other action by, or notice to or filing with, any Governmental Authority or
any other Person is necessary or required on the part of any Loan Party in
connection with the execution, delivery and performance by, or enforcement
against, any Loan Party of this 


 


65

















 


Agreement and the other
Loan Documents to which it is a party or the consummation of the Transactions
or the transactions contemplated hereby or thereby.


 


Section 4.04           Enforceable Obligations.  This Agreement has been, and each other Loan
Document, when delivered hereunder, will have been, duly executed and delivered
by each Loan Party that is a party thereto. 
This Agreement constitutes, and each other Loan Document when so
delivered will constitute, a legal, valid and binding obligation of such Loan
Party, enforceable against each Loan Party that is party thereto in accordance
with its terms, except as such enforceability may be limited by any applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium, or
similar law affecting creditors’ rights generally or general principles of
equity.


 


Section 4.05           Financial
Statements; No Material Adverse Effect.


 


(a)           The Parent has delivered to the
Facility Agent and the Lenders copies of the Audited Financial Statements, and
the Audited Financial Statements are accurate and complete in all material
respects and present fairly in all material respects the consolidated financial
condition of Parent and its consolidated Subsidiaries as of their respective
dates and for their respective periods. 
The most recent consolidated and consolidating financial statements of
the Parent delivered to the Facility Agent and the Lenders pursuant to Section 5.06(a) and
(b) are accurate and complete in all material respects and present
fairly in all material respects the respective consolidated financial condition
of Parent as of their respective dates and for their respective periods.  As of the date of such financial statements
of the Parent delivered to the Facility Agent and the Lenders pursuant to Section 5.06(a) and
(b), there were no material contingent obligations, liabilities for
taxes, unusual forward or long-term commitments, or unrealized or anticipated
losses of the Parent or any of its Subsidiaries, except as disclosed therein
and adequate reserves for such items have been made in accordance with GAAP.


 


(b)           The Pro Forma Financial Statements
have been prepared in good faith by the Parent, based on the assumptions used
to prepare the pro forma financial information contained in the Confidential
Information Memorandum (which assumptions are believed by the Parent on the
date hereof and on the Closing Date to be reasonable), are based on the best
information available to the Parent as of the date of delivery thereof,
accurately reflect all adjustments required to be made to give effect to the
Transactions and present fairly, in all material respects, on a pro forma basis
the estimated consolidated financial position of the Parent and its consolidated
Subsidiaries as of such date and for such period, assuming that the
Transactions had actually occurred at such date or at the beginning of such
period, as the case may be.


 


(c)           The Projections delivered by the
Parent to the Facility Agent and the Lenders prior to the Closing Date have
been prepared in good faith and are based on reasonable assumptions, and there
are no statements or conclusions in such projections which are based upon or
include information known to the Parent on the Closing Date to be misleading in
any material respect or which fail to take into account material information
known to the Parent on the Closing Date regarding the matters reported therein.
On the Closing Date, the Parent believes that such Projections are reasonable and
attainable, it being recognized by the Lenders, however, that projections as to
future events are not to be viewed as facts and that the actual results during 


 


66

















 


the period or periods
covered by the Projections may differ from the projected results included in
such Projections.


 


(d)           Since December 31, 2007, there
has been no event or circumstance, either individually or in the aggregate,
that has had or could reasonably be expected to have a Material Adverse Effect.


 


Section 4.06           True and Complete Disclosure.  Each of the Loan Parties has disclosed to the
Facility Agent and the Lenders all agreements, instruments and corporate or
other restrictions to which it or any of its Subsidiaries is subject, and all
other matters known to it, that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.  None of (a) the Confidential Information
Memorandum, (b) the Proxy Statement or (c) any other written
information, report, financial statement, exhibit or schedule furnished by or
on behalf of any Loan Party to the Facility Agent or any Lender (whether
delivered before or after the Closing Date) in connection with the negotiation
of any Loan Document or included therein or delivered pursuant thereto
contained, contains or will contain any material misstatement of fact or
omitted, omits or will omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were, are
or will be made, not misleading; provided that, with respect to
projected financial information, the Loan Parties represent only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time.


 


Section 4.07           Litigation.  There are no actions, suits, proceedings,
claims or disputes pending or, to the knowledge of any Responsible Officer of
any Loan Party, after due and diligent investigation, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, by or against the Parent or any of its Subsidiaries or against any
of their properties or revenues that (a) purport to affect or pertain to
this Agreement or any other Loan Document, or any of the Transactions, or (b) either
individually or in the aggregate, if determined adversely, could reasonably be
expected to have a Material Adverse Effect. 
Additionally, there is no pending or, to the knowledge of any
Responsible Officer of any Loan Party, threatened action or proceeding
instituted against the Parent or any of its Subsidiaries which seeks to
adjudicate the Parent or any of its Subsidiaries as bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law 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.


 


Section 4.08           Compliance with Laws.  Each of the Parent and its Subsidiaries have
complied with, and each Rig is and will be operated in material compliance
with, all Legal Requirements (including any Environmental Law) applicable to the
conduct of their respective businesses or the ownership of their respective
Property.  Neither the Parent nor any of
its Subsidiaries is in default with respect to any judgment, writ, injunction,
decree or order of any Governmental Authority. 
The Parent and its Subsidiaries are in compliance in all material
respects with the International Maritime Organization’s International
Management Code for the Safe Operation of Ships and Pollution Prevention (“ISM
Code”), to the extent applicable, and have established and implemented a
safety management system and such other procedures as required by the ISM Code,
to the extent applicable.


 


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Section 4.09           No Default.  Neither the Parent nor any of its
Subsidiaries is in default, or will be in default with notice or lapse of time
or both, in any manner under or has received any notice of default with respect
to any provision of any indenture or other agreement or instrument evidencing
Debt, any Transaction Document, any drilling contract or any other material
agreement or instrument to which it is a party or by which it or any of its
properties or assets are or may be bound. 
No Default has occurred and is continuing or would result from the
consummation of the Vantage Acquisition, the Transactions or the other
transactions contemplated by this Agreement or any other Loan Document.


 


Section 4.10           Subsidiaries; Corporate Structure.  Schedule 4.10 sets forth as of the
Closing Date a list of all Subsidiaries of the Parent and, as to each such
Subsidiary, the jurisdiction of formation, the outstanding Equity Interests
therein, and the owner thereof.  The
Equity Interests indicated to be owned by the Person on Schedule 4.10
are fully paid and non-assessable and are owned by the persons indicated on
such Schedule, free and clear of all Liens.


 


Section 4.11           Condition of Properties.  Each of the Parent and its Subsidiaries has
good and indefeasible title in all its Property, necessary or used in the
ordinary conduct of its business (including all Rigs), except for such minor
defects in title that do not interfere with its ability to conduct its business
as currently conducted or to use such properties and assets for their intended
purposes.  The property of the Parent and
its Subsidiaries is subject to no Liens, other than Permitted Liens.


 


Section 4.12           Environmental Condition.


 


(a)           The Parent and its Subsidiaries (i) have
obtained all material Environmental Permits necessary for the ownership and
operation of their respective material Properties and the conduct of their
respective businesses; (ii) are not in breach of any material terms and
conditions of such Environmental Permits or any other material requirements of
applicable Environmental Laws; (iii) have not received notice of any
material violation or alleged violation of any Environmental Law or
Environmental Permit which would affect the ability of the Parent or such
Subsidiary to operate any Rig; and (iv) are not subject to any material
actual or contingent Environmental Claim.


 


(b)           There are no facts, circumstances,
conditions or occurrences on any Rig owned or operated by the Parent or any of
its Subsidiaries that is reasonably likely (i) to form the basis of an
Environmental Claim against the Loan Parties, any of their Subsidiaries or any
Rig owned by the Parent or any of its Subsidiaries, or (ii) to cause such
Rig to be subject to any restrictions on its ownership, occupancy, use or
transferability under any Environmental Law.


 


(c)           Neither the Parent nor any of its
Subsidiaries has at any time (i) generated, used, treated or stored
Hazardous Materials on, or transported Hazardous Materials to or from, any Rig
at any time owned or operated by the Parent or any of its Subsidiaries or (ii) released
Hazardous Materials on or from any such Rig, in each case where such occurrence
or event, either individually or in the aggregate, is reasonably likely to have
a Material Adverse Effect.


 


Section 4.13           Insurance.  Each of the Parent and its Subsidiaries
carries the insurance required to be carried under Section 5.04 of
this Agreement.  The properties of the
Parent and its 


 


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Subsidiaries are insured
with financially sound and reputable insurance companies not Affiliates of the
Parent, in such amounts, with such deductibles and covering such risks as are
customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Parent or the applicable Subsidiary
operates.


 


Section 4.14           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 Parent and its
Subsidiaries 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 any obligation to so file is being contested in good
faith and by appropriate proceedings and after adequate reserves for such items
have been made in accordance with GAAP), 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 and
after providing adequate reserves therefor. 
None of the Parent or any of its Subsidiaries 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.  Proper and accurate amounts
have been withheld by the Parent and its Subsidiaries from their employees for
all periods to comply in all material respects with the tax, social security
and unemployment withholding provisions of applicable federal, state, local and
foreign law.  Timely payment of all
material sales and use taxes required by applicable law have been made by the
Parent and its Subsidiaries.


 


Section 4.15           ERISA Compliance.


 


(a)           Each of the Parent and its ERISA
Affiliates is in compliance in all material respects with the applicable
provisions of ERISA and the Code and the regulations and published
interpretations thereunder.


 


(b)           Each Plan is in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
Federal or state Laws.  Each Plan that is
intended to qualify under Section 401(a) of the Code has received a
favorable determination letter from the IRS or an application for such a letter
is currently being processed by the IRS with respect thereto and, to the best
knowledge of the Parent, nothing has occurred which would prevent, or cause the
loss of, such qualification.  The Parent
and each ERISA Affiliate have made all required contributions to each Plan
subject to Section 412 of the Code, and no application for a funding
waiver or an extension of any amortization period pursuant to Section 412
of the Code has been made with respect to any Plan.


 


(c)           (i) No ERISA Event has occurred
or is reasonably expected to occur that, when taken together with all other
such ERISA Events, could reasonably be expected to result in material liability
of the Parent or any of its ERISA Affiliates; (ii) no Pension Plan has any
Unfunded Pension Liability; (iii) neither the Parent nor any ERISA
Affiliate has incurred, or reasonably expects to incur, any liability under
Title IV of ERISA with respect to any Pension Plan (other than premiums due and
not delinquent under Section 4007 of ERISA); (iv) neither the Parent
nor any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability (and no event has occurred which, with the giving of notice under Section 4219
of ERISA, would result in such liability) under Sections 4201 or 4243 of ERISA
with respect to a 


 


69

















 


Multiemployer Plan; and (v) neither
the Parent nor any ERISA Affiliate has engaged in a transaction that could be
subject to Sections 4069 or 4212(c) of ERISA.


 


Section 4.16           Security Interests.


 


(a)           The Pledge Agreement is effective to
create in favor of the Collateral Agent, for the ratable benefit of the Secured
Parties, a legal, valid and enforceable security interest in the Pledged
Collateral (as defined in such Pledge Agreement) and, when such Collateral (to
the extent such Pledged Collateral constitutes a certificated security or an
instrument under the applicable Uniform Commercial Code) is delivered to such
Collateral Agent, such Pledge Agreement shall constitute a fully perfected
first priority Lien on, and security interest in, all right, title and interest
of the pledgors thereunder in such Pledged Collateral, in each case prior and
superior in right to any other person.


 


(b)           The Security Agreement is effective
to create in favor of the Collateral Agent, for the ratable benefit of the
Secured Parties, a legal, valid and enforceable security interest in the
Collateral (as defined in such Security Agreement) and, when financing
statements in appropriate form are filed in the offices specified on Schedule 1
to the Security Agreement, such Security Agreement shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the grantors thereunder in such portion of the Collateral in which a security
interest may be perfected by the filing of a financing statement under the
applicable Uniform Commercial Code, in each case prior and superior in right to
any other person, other than Permitted Prior Liens.


 


(c)           After the execution and delivery of
each Rig Mortgage, each Rig Mortgage will be effective to create in favor of
the Collateral Agent for the ratable benefit of the Secured Parties a legal,
valid and enforceable security interest in all Collateral (as defined in such
Rig Mortgage) and, when appropriate filings or registrations are made in
accordance with the laws of the Rig’s flag, such Rig Mortgage shall constitute
a first preferred perfected mortgage Lien on all right, title and interest of
the applicable Loan Party thereunder in the applicable Rig, prior and superior
in right to any other person, other than Permitted Prior Liens, and will
constitute a “preferred mortgage” within the meaning of Section 31301(6) of
Title 46 of the United States Code, entitled to the benefits accorded a
preferred mortgage on a foreign vessel, in the case of Rigs not registered
under the laws and flag of the United States, and in the case of Rigs
registered under the laws and flag of the United States, constitutes a
“preferred mortgage” within the meaning of Section 31301(6) of Title
46 of the United States Code, entitled to the benefits accorded a preferred
mortgage on a registered vessel under the laws and flag of the United States.


 


Section 4.17           Labor Relations.  There (a) is no unfair labor practice
complaint pending against the Parent or any of its Subsidiaries or, to the
knowledge of any Responsible Officer of any Loan Party, threatened against any
of them, before the National Labor Relations Board (or any successor United
States federal agency that administers the National Labor Relations Act), and
no grievance or arbitration proceeding arising out of or under any collective
bargaining agreement is so pending against the Parent or any of its
Subsidiaries or, to the knowledge of any Responsible Officer of any Loan Party,
threatened against any of them, (b) are no strikes, lockouts, slowdowns or
stoppage against any of the Parent or any Subsidiary thereof pending or, 


 


70

















 


to the knowledge of any
Responsible Officer of any Loan Party, threatened and (c) no union
representation petition existing with respect to the employees of the Parent or
any of its Subsidiaries and no union organizing activities are taking
place.  The hours worked by and payments
made to employees of the Parent and its Subsidiaries have not been in violation
of the Fair Labor Standards Act or any other applicable federal, state,
provincial, local or foreign law dealing with such matters.  All payments due from the Parent or any of
its Subsidiaries, or for which any claim may be made against the Parent or any
Subsidiary thereof, on account of wages and employee health and welfare
insurance and other benefits, have been paid or accrued as a liability on the
books of the Parent or such Subsidiary. 
The consummation of the Transactions will not give rise to any right of
termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which the Parent or any of its Subsidiaries
is bound.


 


Section 4.18           Intellectual Property.  The Parent and each of its Subsidiaries owns
or is licensed or otherwise has full legal right to use all of the patents,
trademarks, service marks, trade names, copyrights, franchises, authorizations
and other rights that are reasonably necessary for the operation of its business,
without conflict with the rights of any other Person with respect thereto.


 


Section 4.19           Solvency.


 


(a)           Immediately after the consummation of
the Transactions to occur on the Closing Date and immediately following the
making of each Advance and after giving effect to the application of the
proceeds of each Advance, (i) the fair value of the assets of each Loan
Party (including rights of contribution) will exceed its debts and liabilities,
subordinated, contingent or otherwise; (ii) the present fair saleable
value of the Property of each Loan Party will be greater than the amount that
will be required to pay the probable liability of its debts and other
liabilities, subordinated, contingent or otherwise, as such debts and other
liabilities become absolute and matured; (iii) each Loan Party will be
able to pay its debts and liabilities, subordinated, contingent or otherwise,
as such debts and liabilities become absolute and matured; and (iv) each
Loan Party will not have unreasonably small capital with which to conduct the
business in which it is engaged as such business is now conducted and is
proposed to be conducted following the Closing Date.


 


(b)           The Parent does not intend to, or to
permit any of its Subsidiaries to, and does not believe that it or any of its
Subsidiaries will, on a consolidated basis, incur debts beyond its ability to
pay such debts as they mature, taking into account the timing of and amounts of
cash to be received by it or any such Subsidiary and the timing of the amounts
of cash to be payable on or in respect of its Debt or the Debt of such
Subsidiary.


 


Section 4.20           Margin Regulations.  None of the Parent or any of its Subsidiaries
is engaged and will engage, principally or as one of its important activities,
in the business of purchasing or carrying margin stock (within the meaning of
Regulation U), or extending credit for the purpose of purchasing or carrying
margin stock.  No part of the proceeds of
any Advance will be used, whether directly or indirectly, and whether
immediately, incidentally or ultimately, to purchase or carry any margin stock
(within the meaning of Regulation U) or to refinance any Debt originally
incurred for such purpose, or for any other purpose that entails a violation
of, or 


 


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that is inconsistent
with, the provisions of the Regulations of the Board, including Regulation T, U
or X.


 


Section 4.21           Investment Company Act.  None of the Parent or 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 4.22           Rig Construction Contracts.  There have been no extensions of the Delivery
Dates without the prior written consent of the Joint Bookrunners in
consultation with the Majority Lenders. 
No Borrower has agreed to a reduction the variable load or to modify any
of the specifications of any Rig without the prior written consent of the Joint
Bookrunners in consultation with the Majority Lenders.


 


ARTICLE V

AFFIRMATIVE COVENANTS


 


So long as the Advances or
any amount under any Loan Document shall remain unpaid, any Lender shall have
any Commitment hereunder, or there shall exist any Letter of Credit Exposure,
unless the Majority Lenders shall otherwise consent in writing, the Parent
shall, and shall cause each other Loan Party to:


 


Section 5.01           Preservation of Existence, Etc.  Except as permitted by Section 6.03,
(a) preserve, renew and maintain in full force and effect its legal
existence and good standing under the Legal Requirements of the jurisdiction of
its formation, (b) take all reasonable action to obtain, preserve, renew,
extend, maintain and keep in full force and effect all rights, privileges,
permits, licenses, authorizations and franchises necessary or desirable in the
normal conduct of its business, and (c) qualify and remain qualified as a
foreign entity in each jurisdiction in which qualification is necessary in view
of its business and operations or the ownership of its Properties to the extent
the failure to qualify could reasonably be expected to have a Material Adverse
Effect.


 


Section 5.02           Compliance with Laws, Etc.  Comply in all material respects with all
Legal Requirements applicable to it or to its business or property, except in such
instances in which such Legal Requirement is being contested in good faith by
appropriate proceedings diligently conducted.


 


Section 5.03           Maintenance of Property.  (a) Maintain and preserve all Property
material to the conduct of its business and keep such Property in good repair,
working order and condition, (b) from time to time make, or cause to be
made, all needful and proper repairs, renewals, additions, improvements and
replacements thereto necessary in order that the business carried on in connection
therewith may be properly conducted at all times and (c) use the standard
of care typical in the industry in the operation and maintenance of its
facilities.  Notwithstanding the
foregoing, if a Rig is affected by a Casualty Event or a Collateral Disposition,
the applicable Borrower shall either make all necessary repairs and
replacements to such affected Rig or apply the Casualty Proceeds or Collateral
Disposition Proceeds therefrom as provided in Section 2.07(c)(iii) or
(iv), as the case may be.


 


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Section 5.04           Maintenance
of Insurance.


 


(a)           General.


 


(i)            Except as otherwise specifically
provided below, at their own expense, maintain insurance payable in Dollars in
amounts (and with co-insurance and deductibles), against all risks (including,
without limitation, marine hull and machinery (including excess value)
insurance, marine protection and indemnity insurance, drilling, towage,
repossession, loss of hire, war and terrorist risks, protection and indemnity
insurance, liability arising out of pollution and the spillage or leakage of
cargo and cargo liability insurance and without any named windstorm exclusions)
and in forms which are substantially equivalent to the coverage reflecting the
customary and prudent practice of other responsible and experienced Persons of
similar size and established reputation engaged in the same or similar
operation of vessels similar to the Rigs and placed through brokers and with
financially sound and reputable insurance companies or associations that are
reasonably satisfactory to the Collateral Agent.


 


(ii)           Renew all such insurance, including,
without limitation, the Insurance Policies, as they expire and so as to ensure
that there is no gap in coverage, keep the Collateral Agent advised of the
progress of such renewals, and shall provide evidence of such renewal in
writing to the Collateral Agent within seven days of renewal.


 


(iii)          Punctually pay all premiums, calls,
contributions or other sums payable in respect of such insurance, including,
without limitation, the Insurance Policies, and produce all relevant receipts
when so required by the Collateral Agent and all Insurance Policies shall
provide that there shall be no recourse against the Collateral Agent or any other
Secured Party for unpaid premiums, club calls, assessments or advances.


 


(iv)          Cause each insurance company,
underwriter, club or fund (or an authorized agent thereof) to agree in writing
to mark their records and to advise the Collateral Agent at least seven
Business Days prior to the lapse of each policy or contract issued by such
insurance company, underwriter, club or fund by expiration, termination,
failure to renew or otherwise for any reason whatsoever and of any default in
payment of any premium in respect of any Insurance Policy with respect to any
Rig.  The Collateral Agent shall not be
deemed to have knowledge of any such lapse of insurance in the absence of
receipt of notice from such brokers.  If
such Insurance Policies are not maintained in full force and effect, then the
Collateral Agent, at its option, may procure such insurance at the Borrower’s
expense.


 


(v)           Deliver to the Collateral Agent, upon
the written request of the Collateral Agent, copies or, if requested by the
Collateral Agent at any time and from time to time, the originals of all cover
notes, binders, policies and certificates of entry in protection and indemnity
associations, and all endorsements and riders amendatory thereof, in respect of
Insurance Policies maintained in connection with the Rigs.


 


(vi)          Cause the Insurance Policies to
provide for a deductible amount not in excess of $5,000,000 per occurrence.


 


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(vii)         Maintain insurance, if any, required by
the Rig Construction Contracts from time to time.


 


(viii)        Provide to the Collateral Agent promptly
after receiving them copies of any communications relating to (A) non-payment
of premiums and cancellation of the Insurance Policies; and (B) the
imposition of any exclusion or qualification or other material modification of
the Insurance Policies.


 


(ix)           Do all things necessary and provide
all documents, evidence and information within its power which may be
reasonably requested by the Collateral Agent to enable the Collateral Agent to
collect or recover any moneys which may at any time become due in respect of
the Insurance Policies.


 


(b)           Terms of Insurance Policies.  The Insurance Policies shall include the
following terms and conditions:


 


(i)            each Rig shall always be covered against
marine perils and all risks of loss or damage, including loss, damage, fire and
such other perils as are customary in the industry, in accordance with English,
American or Norwegian hull clauses with reasonable deductibles as determined by
the Parent but in no event in excess of $5,000,000;


 


(ii)           for the purposes of insurance against
Total Loss, each Rig and its equipment and appurtenances shall be insured for
and valued (for the avoidance of doubt being an agreed/assessed value as
between the assured and the insurers) at an amount at least equal to 120% of
the aggregate outstanding Tranche 1 Commitments, Tranche 2 Commitments, Tranche
3 Commitments or Tranche 4 Commitments, as applicable, with respect to each
Rig;


 


(iii)          each Rig shall be covered against war
and terrorist risks (including risks, whether or not regarded as war risks,
excluded by the “Free of Capture and Seizure” clauses in the standard form of
marine policy) in accordance with English, American or Norwegian clauses and
incorporating protection and indemnity clause and with crew war risk insurance
being effected separately, and all Rigs shall be covered for “strikes, riots
and civil commotion” risk.  Such risks,
may, at the option of the Parent, be insured by entering the Rigs in such war risk
association or club reasonably acceptable to the Collateral Agent against all
risks covered under the rules of such association or club and with
reasonable deductibles provided therein;


 


(iv)          each Rig shall also be insured against
protection and indemnity risks and liabilities, including, without limitation,
the risk of pollution and spillage or leakage of oil or other cargo caused by
such Rig, unless such risk is fully covered by the entry of the Rigs into an
international group protection and indemnity association, in each case in an
amount from time to time obtainable for vessels of the same type, size, age and
flag as such Rig and carried by, and reflecting the customary and prudent
practice of other responsible and experienced companies engaged in the
operation of vessels similar to 


 


74

















 


such Rig, but in any event shall be in an amount
approved by the Facility Agent in consultation with the Insurance Advisor;


 


(v)           if any of the insurances referred to this
in Section 5.04 form part of a fleet cover, the Parent shall
procure that the brokers shall undertake to the Collateral Agent that such
brokers shall neither set off against any claims in respect of a Rig any
premiums due in respect of other Rigs under such fleet cover or any premiums
due for other insurances, nor cancel the insurance for reason of non-payment of
premiums for other Rigs under such fleet cover or of premiums for such other
insurances; and


 


(vi)          if the Collateral Agent or the
Majority Lenders determines on reasonable grounds that the Insurance Policies
do not adequately protect the interests of the Secured Parties in relation to
any Rig, it will consult with the relevant Borrower and the Insurance Advisor
in order to agree any changes to the Insurance Policies that may be appropriate
to protect the interest of the Secured Parties in relation to that Rig,
provided that if the Collateral Agent and the relevant Borrower are unable to
agree upon which changes may be appropriate, the relevant Borrower will comply
with any further requirements relating to insurance recommended by the
Insurance Advisor.


 


(c)           Mortgagee Interest Insurance.  The Collateral Agent shall, at the Loan
Parties’ expense, obtain, for and on behalf of the Secured Parties, mortgagee’s
interest insurance and mortgagee’s additional perils (pollution) insurance
providing coverage which shall be at least 120% of the aggregate Tranche 1
Commitments, Tranche 2 Commitments, Tranche 3 Commitments or Tranche 4
Commitments, as applicable, with respect to each Rig.  Such insurance shall cover marine perils on
hull and machinery, and shall be maintained in the broadest forms available (on
reasonable commercial terms as reasonably acceptable to the Collateral Agent)
in the American and British insurance markets or in such other major
international markets acceptable to the Collateral Agent.


 


(d)           Collateral Agent as Additional
Insured and Loss Payee.


 


(i)            In the case of all marine and war
risk hull and machinery policies and all protection and indemnity insurances
(including insurance against liability for pollution or the spillage or leakage
of cargo), the Parent will cause the Collateral Agent for the benefit of the
Secured Parties to be named as an additional insured as may be required by the
Collateral Agent without liability for premiums or calls payable under such
Insurance Policies.


 


(ii)           The Parent will cause all policies
and certificates of entry with respect to insurance required hereby for each
Rig to contain a loss payable clause which shall be on substantially the terms
set forth in Schedule 5.04 hereto (or, if such terms are not obtainable,
then such terms as shall, in the opinion of the Insurance Advisor be the best
otherwise attainable), in the case of all marine and war risk hull and
machinery (including excess values) policies and all protection and indemnity
and liability and oil pollution liability insurance, and which shall: (A) in
the case of protection and indemnity insurance, provide for payment to the
applicable Borrower or its order unless the payment is to indemnify the
Collateral Agent from or reimburse the Collateral Agent for any loss, 


 


75

















 


damage or expense incurred by it or unless and until
the insurers or associations receive notice from the Collateral Agent that the
applicable Borrower is in default hereunder, in which event all payments shall
be made to the Collateral Agent, provided, that the insurer may in all events
make payments directly to third parties to whom liability has been established
in discharge of guaranties issued by the insurer or claims against the
applicable Borrower or insurer, and (B) in the case of all other
insurance, provide for payment to the Collateral Agent to be applied in
accordance with the terms of Section 2.07(c).


 


(iii)          In addition, the applicable Borrower
will, at its sole cost and expense, (A) assign to the Collateral Agent, by
an Assignment of Insurances, all of such Borrower’s right, title and interest
in and to each Insurance Policy (including all entries in protection and
indemnity or war risk associations) with respect to the insurance required
hereby and furnish, or cause its brokers to furnish, written notice of such
assignment to all insurers, underwriters, clubs and associations with respect
to such insurance, and (B) cause the insurance brokers and club managers
to hold to the order of the Collateral Agent the originals of all policies,
contracts, binders, insurance slips, cover notes and certificates of entry
relating to the Rigs and to deliver certified copies thereof on request and to
execute and deliver to the Collateral Agent a letter of undertaking in
connection with the above mentioned insurances and entries.


 


(iv)          With respect to any potential claims
under any Insurance Policy, the Collateral Agent may, but shall not be required
to, make proof of loss under, settle and adjust any claims under, or direct the
applicable Borrower to take such actions at the reasonable direction of the
Collateral Agent, and the expenses incurred by the Collateral Agent in the
adjustment and collection of such proceeds shall be paid by such Borrower,
provided, that if no Event of Default exists, the Collateral Agent shall give
the applicable Loan Party written notice and opportunity to perform prior to
itself performing or causing to perform. 
The Collateral Agent shall not be liable or responsible for failure to
collect or exercise diligence in the collection of any proceeds, unless
directly caused by its gross negligence or willful misconduct.


 


(e)           Application of Payments under
Insurance Policies.  All Casualty
Proceeds or Collateral Disposition Proceeds received by such Loan Party or the
Collateral Agent as a result of a Casualty Event or Collateral Disposition
shall be applied in accordance with the requirements of Sections 2.07(c)(iii) or
(iv), as the case may be.


 


(f)            Operation of Rigs.


 


(i)            Each Borrower agrees that it will
not do or permit or willingly allow to be done any act by which any insurance
or entry required by this Section 5.04 may be suspended, impaired
or cancelled, and that it will not permit or allow any Rig to undertake any
voyage or run any risk or transport any cargo which may not be permitted by the
policies in force, without having previously insured such Rig by additional
coverage to extend to such voyages, risks or cargoes.


 


76

















 


(ii)           No Borrower will cause or permit any
Rig to operate or undertake a voyage to or to sail in any area which has been
declared a war area by the relevant underwriters and insurance companies and
has been included in the list of exclusions from time to time in effect
attached to the War Risks Insurance Policies in the form of the War Risks
Trading Warranties, without first notifying thereof the Collateral Agent and
the War Risks underwriters of such Rig and paying any additional insurance
premiums required. Each Borrower agrees that it will promptly furnish to the
Collateral Agent, upon written request by the Collateral Agent, evidence of
payment of such additional premiums.


 


(iii)          Each Borrower will comply with and
satisfy all of the provisions of any applicable Legal Requirement concerning
financial responsibility for liabilities imposed on such Borrower or the Rigs
with respect to pollution by any state or nation or political subdivision
thereof and will maintain all certificates or other evidence of financial
responsibility as may be required by any such law, convention, regulation,
proclamation or order with respect to the trade which each Rig is from time to
time engaged in and the cargo carried by it.


 


(g)           United States Operations.  At all times during which one or more Rigs is
operating within the jurisdiction of the United States of America, the Loan
Parties shall maintain with respect to such Rigs:


 


(i)            insurance or post bonds or maintain
approved evidence of financial responsibility (including, without limitation,
qualification as a “qualified self-insurer” by the United States Coast Guard)
with respect to such Rigs to cover the actual cost of removal of discharged oil
for which such Loan Party or the Collateral Agent may be held strictly liable
(or held liable due to negligence of such Loan Party or any other Person) under
the Clean Water Act of 1977, as amended, the Oil Pollution Act 1990 (33 U.S.C.
§ 2701 et seq.), as amended, or the Outer Continental Shelf Lands Act, as
amended, or under any other Legal Requirement, including, without limitation,
any Environmental Law, of any Governmental Authority that, now or in the
future, may apply to such Rigs or to the Loan Parties, such Rigs or their
operations; and


 


(ii)           such worker’s compensation or
longshoremen’s and harbor workers’ insurance as shall be required by applicable
law, including endorsements for foreign and Outer Continental Shelf operations,
borrowed servant, voluntary compensation and in rem claims.


 


Section 5.05           Payment of Taxes, Etc.  Pay and discharge as the same shall become
due and payable, all its obligations and liabilities in accordance with their
terms, including (a) all taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits or in respect of its
Property, (b) all lawful claims which, if unpaid, might by law become a
Lien upon its Property; and (c) all Debt, as and when due and payable, but
subject to any subordination provisions contained in any instrument or
agreement evidencing such Debt, in each case, unless the same are being
contested in good faith by appropriate proceedings diligently conducted and
adequate reserves in accordance with GAAP are being maintained by the Parent or
such Subsidiary.


 


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Section 5.06           Reporting Requirements.  Deliver to the Facility Agent (who shall
promptly deliver to the Lenders), in form and detail satisfactory to the
Facility Agent and the Majority Lenders:


 


(a)           Audited Annual Financials.  As soon as available and in any event not
later than 120 days after the end of each fiscal year of the Parent, (i) a
consolidated balance sheet of the Parent and its Subsidiaries as at the end of
such fiscal year, and related statements of operations, shareholders equity and
cash flows, all in reasonable detail and prepared in accordance with GAAP,
audited and accompanied by a report and opinion of an independent registered
public accountant of nationally recognized standing reasonably acceptable to
the Majority Lenders, which report and opinion shall be prepared in accordance
with generally accepted auditing standards and shall not be subject to any
“going concern” or like qualification or exception or any qualification or
exception as to the scope of such audit, and (ii) the consolidating
balance sheets and consolidating statements of income or operations for the
Parent and OGIL and its Subsidiaries for such fiscal year, setting forth in
each case in comparative form the figures for the previous fiscal year
accompanied  by a review report from the
independent registered public accountant stating that such financial statements
were included in the audit of the Parent, have been reviewed by the independent
registered public accountant, and that there are no known adjustments which
would be required to make these consolidating financial statements not
misleading;


 


(b)           Quarterly Financials.  As soon as available and in any event not
later than 45 days after the end of each of the first three fiscal quarters of
each fiscal year of the Parent, a consolidated and consolidating balance sheet
of the Parent and its Subsidiaries as at the end of such fiscal quarter, and
the related consolidated and consolidating statements of income or operations
and cash flows for such fiscal quarter and for the portion of the Parent’s
fiscal year then ended, setting forth in each case in comparative form the
figures for the corresponding fiscal quarter of the previous fiscal year and
the corresponding portion of the previous fiscal year, all in reasonable detail
and certified by a Responsible Officer of the Parent as fairly presenting the
financial condition, results of operations and cash flows of the Parent and its
Subsidiaries in accordance with GAAP, subject only to normal year-end audit
adjustments and the absence of footnotes;


 


(c)           Compliance Certificates.  Concurrently with the delivery of the
financial statements referred to in Sections 5.06(a) and (b),
a duly completed Compliance Certificate signed by a Responsible Officer of the
Parent;


 


(d)           Excess Cash Flow Certificate.  As soon as available and in any event not
later than 45 days after the end of each fiscal quarter of each Borrower, a
duly completed Excess Cash Flow Certificate with respect to each Borrower
signed by a Responsible Officer of the Parent;


 


(e)           Management Letters.  Promptly upon receipt thereof, copies of any
detailed audit reports, management letters or recommendations submitted to the
board of directors (or the audit committee of the board of directors) of the
Parent by independent accountants in connection with the accounts or books of
the Parent or any Subsidiary thereof, or any audit of any of them;


 


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(f)            Budgets.  On or before 120 days after the commencement
of each fiscal year of the Parent, (i) a consolidated and consolidating
budget of the Parent and its Subsidiaries which includes consolidated and
consolidating income statements, balance sheets and cash flow statements of the
Parent and its Subsidiaries for each of the four fiscal quarters of such fiscal
year and (ii) a breakdown of projected revenues, operating expenses,
utilizations and capital expenditures for each Rig;


 


(g)           Projections.  On or before 120 days after the commencement
of each fiscal year of the Parent, updated Projections for the five year period
commencing as of such fiscal year;


 


(h)           Rig Appraisal Reports.


 


(i)            Within 45 days after each (A) June 30,
commencing with the first June 30th occurring after Rig 1
Delivery Date, two written appraisal reports prepared by two independent
Approved Rig Appraisers with respect to the Rigs that have been delivered as of
such date and (B) December 31, commencing with the first December 31st
occurring after Rig 1 Delivery Date, a desktop appraisal with respect to the
Rigs that have been delivered as of such date, each in form, scope and
methodology acceptable to Facility Agent, setting forth the Market Value of
each of the Rigs as of the date appraised (each a “Rig Appraisal Report”).  The cost of each such Rig Appraisal Report shall
be paid by the Borrower;


 


(ii)           Upon the written request of the
Majority Lenders, additional Rig Appraisal Reports within 30 days after receipt
of such request. Unless an Event of Default is in existence at the time of such
request, the Lenders shall pay the costs of any Rig Appraisal Reports requested
by the Majority Lenders other than those required under Section 5.06(h)(i) during
such calendar year;


 


(iii)          Within 30 days after the occurrence of
any Casualty Event (if the Casualty Proceeds with respect thereto could
reasonably be expected to exceed U.S.$25,000,000) or any Collateral Disposition
occurring with respect to any Rig, an additional Rig Appraisal Report setting
forth the Market Value of the affected Rig immediately prior to such Casualty
Event or Collateral Disposition and the Market Value giving effect to such
Casualty Event or Collateral Disposition (an “Additional Appraisal Report”).
The cost of each such Additional Appraisal Report shall be paid by the
Borrower;


 


(iv)          Each Rig Appraisal Report and
Additional Appraisal Report delivered under this Section 5.06 shall
be in form, scope and substance reasonably satisfactory to the Facility Agent;


 


(i)            Rig Report.  On or before 45 days after the end of each of
fiscal quarter of each fiscal year of the Parent, a report detailing (i) the
then current location of each of the Rigs, and the then current term of and
parties to any drilling contract of any such Rigs and (ii) for the
previous fiscal quarter, the average day rates and utilization for each such
Rig;


 


(j)            Insurance Broker Reports.  As soon as available and in any event not
later than 90 days after the end of each fiscal year of the Parent that occurs
after the first Delivery Date, a detailed report prepared by the Insurance
Advisor, at the joint and several expense of the 


 


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Borrowers, which report (i) lists
all Insurance Policies then in effect with respect to the Rigs, (ii) specifies
for each such Insurance Policy (A) the amount thereof, (B) the risks
insured against thereby, (C) the name of each direct or indirect or
participating insurer or underwriter and each insured party thereunder, (D) the
policy or other identification number thereof and (E) the expiration date
and (iii) certifies that all such Insurance Policies are (A) in full
force and effect, (B) placed with such insurance companies, underwriters
or associations, in such amounts, against such risks, and in such form, as are
normally issued against by Persons of similar size and established reputation
engaged in the same or similar businesses and similarly situated and as are
necessary or advisable for the protection of the Collateral Agent as mortgagee,
(C) arranged in the broadest form generally available in the United
States, British, or Scandinavian insurance markets, and (D) conforming to
the requirements of this Agreement;


 


(k)           Safety Management Manual.  Upon written request by the Facility Agent, a
copy of the safety management manual used to describe and implement the
Parent’s safety management system developed, implemented and maintained in
compliance with the ISM Code, if applicable;


 


(l)            Securities Law Filings and other
Public Information.  Promptly after
the same are available, copies of each annual report, proxy or financial
statement or other report or communication sent to the stockholders of the
Parent, and copies of all annual, regular, periodic and special reports and
registration statements which the Parent may file or be required to file with
the SEC under Section 13 or 15(d) of the Securities Exchange Act of
1934, and not otherwise required to be delivered to the Facility Agent pursuant
hereto;


 


(m)          USA Patriot Act.  Promptly, following a written request by any
Lender, all documentation and other information that such Lender reasonably
requests in order to comply with its ongoing obligations under applicable “know
your customer” and anti-money laundering rules and regulations, including
the USA Patriot Act; and


 


(n)           Other Information.  Such other information respecting the
business or Properties, or the condition or operations, financial or otherwise,
of the Parent and its Subsidiaries as the Facility Agent or any Lender may from
time to time reasonably request.


 


Documents required to be delivered pursuant to Sections
5.06(a) or (b) or Section 6.02(k) (to the
extent any such documents are included in materials otherwise filed with the
SEC) may be delivered electronically and if so delivered, shall be deemed to
have been delivered on the date (i) on which the Parent posts such
documents, or provides a link thereto on the Parent’s website on the Internet
at the website address listed on Schedule 10.02; or (ii) on which
such documents are posted on the Parent’s behalf on an Internet or intranet
website, if any, to which each Lender and the Facility Agent have access
(whether a commercial, third-party website or whether sponsored by the Facility
Agent); provided that: (i) the Parent shall deliver paper copies of such
documents to the Facility Agent or any Lender that requests the Parent to
deliver such paper copies until a written request to cease delivering paper
copies is given by the Facility Agent or such Lender and (ii) the Parent
shall notify the Facility Agent and each Lender (by telecopier or electronic
mail) of the posting of any such documents and provide to the Facility Agent by
electronic mail electronic versions (i.e., soft copies) of such documents.  The Facility Agent shall have no obligation
to request the delivery or to maintain copies of the documents referred to 


 


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above, and in any event shall have no responsibility
to monitor compliance by the Parent with any such request for delivery, and
each Lender shall be solely responsible for requesting delivery to it or
maintaining its copies of such documents.


 


Section 5.07           Other Notices.  Deliver to the Facility Agent and each Lender
prompt written notice of the following:


 


(a)           Defaults.  The occurrence of any Default or Event of
Default;


 


(b)           Litigation.  The filing or commencement of, or any
probable threat or notice of intention of any Person to file or commence, any
action, suit or proceeding (other than tax assessments), whether at law or in
equity or by or before any Governmental Authority, against the Parent or any
Subsidiary or Affiliate thereof that could reasonably be expected to result in
liability of the Parent or any of its Subsidiaries in an aggregate amount
exceeding $10,000,000;


 


(c)           ERISA Events.  The occurrence of any ERISA Event that, alone
or together with any other ERISA Events that have occurred, could reasonably be
expected to result in liability of the Parent or any of its Subsidiaries in an
aggregate amount exceeding $1,000,000;


 


(d)           Environmental Notices.  Promptly upon, and in any event within five
Business Days after, a Responsible Officer of any Loan Party obtains knowledge
thereof, written notice of any of the following environmental matters: (i) a
copy of any form of notice, summons or citation received from any Governmental
Authority or any other Person, concerning (A) material violations or
alleged violations of Environmental Laws, which seeks to impose liability
therefor, (B)  any notice of potential responsibility under any
Environmental Law, or (C)  the filing of a Lien other than a Permitted
Lien upon, against or in connection with the Parent or any of its Subsidiaries,
or any of the Rigs, (ii) any condition or occurrence on or arising from
any Rig that (A) results in noncompliance by any Loan Party with any
applicable Environmental Law or (B) could reasonably be expected to form
the basis of an Environmental Claim against any Loan Party or any such Rig, in
each case that could reasonably be expected to result in a liability of the
Parent or any of its Subsidiaries in an aggregate amount exceeding $10,000,000;
(iii) any condition or occurrence on any Rig that could reasonably be
expected to cause such Rig to be subject to any restrictions on the ownership,
occupancy, use or transferability by any Loan Party of such Rig under any
Environmental Law; and (iv) the taking of any removal or remedial action
in response to the actual or alleged presence of any Hazardous Material on any
Rig as required by any Environmental Law or any Governmental Authority;


 


(e)           Collateral.  Furnish to the Collateral Agent prompt (and
in any event within 30 days) written notice of:


 


(i)            any change in any Loan Party’s
corporate name, identity, corporate structure or jurisdiction of formation;


 


(ii)           any construction delay, default,
claim of indemnity or force majeure, request for variation or notice of
compulsory changes under any of the Transaction Documents, including, without
limitation the Rig Construction Contracts;


 


(iii)          any notice of default, suspension or
cancellation of any drilling contract;


 


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(iv)          any Collateral Disposition;


 


(v)           any Casualty Event in excess of
$10,000,000;


 


(vi)          any material requirement made by any
insurer or classification society or by any competent authority which is not
complied with within a reasonable time; and


 


(vii)         any arrest of any Rig or the exercise
or purported exercise of any Lien on any Rig;


 


(f)            Material Changes.  Any development that has resulted in, or
could reasonably be expected to result in, a Material Adverse Effect;


 


Each notice pursuant to this Section shall be
accompanied by a statement of a Responsible Officer of a Loan Party setting
forth details of the occurrence referred to therein and stating what action
such Loan Party has taken and proposes to take with respect thereto.  Each notice pursuant to Section 5.07(a) shall
describe with particularity any and all provisions of this Agreement and any
other Loan Document that have been breached.


 


Section 5.08           Books and Records; Inspection.  (a) Keep proper records and books of
account in which full, true and correct entries will be made in accordance with
GAAP and all Legal Requirements, reflecting all financial transactions and
matters involving the assets and business of the Parent and its Subsidiaries; (b) maintain
such books of record and account in material conformity with all applicable
requirements of any Governmental Authority having regulatory jurisdiction over
the Parent and its Subsidiaries; and (c) from time-to-time during regular
business hours upon reasonable prior notice, (i) permit representatives
and independent contractors of each Mandated Lead Arranger to visit and inspect
any of its Properties one time during each calendar year, (ii) to examine
its corporate, financial and operating records, and make copies thereof or
abstracts therefrom and (iii) to discuss its affairs, finances and
accounts with its directors, officers, and independent public accountants, all
at the expense of the Borrowers and at such
reasonable times during normal business hours and as often as may be reasonably
desired, upon reasonable advance notice to the Parent; provided, however,
that if an Event of Default has occurred and is continuing, the Facility Agent
or any Lender (or any of their respective representatives or independent contractors)
may do any of the foregoing at the expense of the Borrowers at any time during
normal business hours and without advance notice.


 


Section 5.09           Use of Proceeds.


 


(a)           Use the proceeds of the Term Advances
to finance the construction of the Rigs or to reimburse the applicable Borrower
for moneys utilized from funds held in trust to finance the construction of the
Rigs.


 


(b)           Use the proceeds of the Top-Up
Advances for general corporate purposes, including without limitation, making
Restricted Payments to the extent permitted by Section 6.06.


 


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(c)           Use the proceeds of the Revolving
Advances for working capital, issuance of letters of credit and for other
general corporate purposes; provided, however, that the Revolving Advances
cannot be used to make deposits into the Debt Service Reserve Accounts.


 


Section 5.10           Nature of Business.  Remain primarily engaged in any of (a) the
contract drilling business, and (b) any related or ancillary businesses.


 


Section 5.11           Operation
of Rigs.


 


(a)           (i) Comply with and satisfy all
Legal Requirements of the jurisdiction of such Rig’s home port, now or
hereafter from time to time in effect, in order that such Rig shall continue to
be documented pursuant to the laws of the jurisdiction of its home port with
such endorsements as shall qualify such Rigs for participation in the trades
and services to which it may be dedicated from time to time or (ii) not do
or allow to be done anything whereby such documentation is or could reasonably
be expected  be forfeited;


 


(b)           The applicable Borrower and each
other Loan Party which owns or operates, or will own or operate, one or more
Rigs will, at all times while owning or operating such Rigs, be qualified to
own and operate such Rigs under the laws of the jurisdiction of such Rig’s
registry;


 


(c)           Keep such Rig in a good and
sufficient state of repair consistent with first-class ship-ownership and
management practice employed by owners of vessels of similar size and type and
so as to maintain the present class of such Rig at its current classification
by any first-class, recognized rating agency, including, without limitation,
the American Bureau of Shipping, free of recommendations affecting class and
qualifications and change of class;


 


(d)           (i) Make or cause to be made all
repairs to or replacement of any damaged, worn or lost parts or equipment such
that the value of such Rig will not be materially impaired and (ii) except
as otherwise contemplated by this Agreement, not remove any material part of,
or item of equipment owned by the Loan Parties installed on, such Rig except in
the ordinary course of the operation and maintenance of such Rig or unless (A) the
part or item so removed is forthwith replaced by a suitable part or item which
is in the same condition as or better condition than the part or item removed,
is free from any Lien (other than Permitted Prior Liens) in favor of any Person
other than the Collateral Agent and becomes, upon installation on such Rig the
property of the Loan Parties and subject to the security constituted by the Rig
Mortgage or the Security Agreement or (B) the removal will not materially
diminish the value of such Rig;


 


(e)           Submit such Rig to such periodical or
other surveys as may be required for classification purposes and, upon the
written request of the Collateral Agent supply to the Collateral Agent copies
of all survey reports and classification certificates issued in respect
thereof;


 


(f)            Promptly pay and discharge all
debts, damages and liabilities whatsoever which have given or may give rise to
maritime or possessory Liens (other than Permitted Prior Liens) on or claims
enforceable against such Rig and all tolls, dues, taxes, assessments,
governmental charges, fines and penalties that are material in amount and
lawfully charged on or in respect of each Rig other than any of the foregoing
being contested in good faith and diligently by appropriate proceedings, and,
in the event of arrest of any Rig pursuant to legal process, or in the 


 


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event of its detention in
exercise or purported exercise of any such Lien or claim as aforesaid, procure,
if possible, the release of such Rig from such arrest or detention forthwith
upon receiving notice thereof by providing bail or otherwise as the
circumstances may require;


 


(g)           Maintain, or cause to be maintained
by the charterer or lessee of any Rig, a valid Certificate of Financial
Responsibility (Oil Pollution) issued by the United States Coast Guard pursuant
to the Federal Water Pollution Control Act to the extent that such certificate
may be required by applicable Legal Requirements for any Rig and such other
similar certificates as may be required in the course of the operations of any
Rig pursuant to the International Convention on Civil Liability for Oil
Pollution Damage of 1969, or other applicable Legal Requirements;


 


(h)           If the Person operating such Rig is
not a Loan Party, promptly remit all earnings received by such Person from any
Rig back to the appropriate Loan Party. 
For the avoidance of doubt, “earnings” does not include operating costs
and reasonable management fees as are customary in the industry and which are
set forth and supported by a budget for such Rigs which will be delivered to
the Facility Agent on or before such time as the subject Rig begins operations
for such Person; and


 


(i)            Cause such Rigs to be managed by the
Parent or one of the Loan Parties, or such other international, independent
manager of established reputation engaged in the same or similar operation of
vessels similar to the Rigs, as consented to by the Facility Agent acting upon
instruction from the Majority Lenders.


 


Section 5.12           Additional Guarantors.  Notify the Facility Agent at the time that
any Person becomes a Subsidiary of the Parent (other than an Excluded Entity),
and promptly thereafter (and in any event within 30 days), (a) cause such
Person to (i) become a Guarantor by executing and delivering to the
Facility Agent such document as the Facility Agent shall deem appropriate for
such purpose, (ii) deliver to the Facility Agent documents of the types
referred to in clauses Section 3.01(a)(vi), (vii),  (viii),
and (ix) and favorable opinions of counsel to such Person (which
shall cover, among other things, the legality, validity, binding effect and
enforceability of the documentation referred to in clause (i)), all in form,
content and scope reasonably satisfactory to the Facility Agent and (iii) execute
such other Security Documents as the Collateral Agent or any Lender may
reasonably request, in each case to secure the Obligations and (b) cause
the stockholder of such Person to execute a Pledge Agreement pledging 100% of
its interests in the Equity Interest of such Person to secure the Obligations
and such evidence of corporate authority to enter into and such legal opinions
in relation to such Pledge Agreement as the Collateral Agent may reasonably
request, along with share certificates pledged thereby and appropriately
executed stock powers in blank.


 


Section 5.13           Further Assurances in General.  (a) Execute any and all further
documents, financing statements, agreements and instruments, and take all such
further actions (including the filing and recording of financing statements,
mortgages, and other documents), which may be required under any Legal
Requirement, or which the Facility Agent, the Collateral Agent or the Majority
Lenders may reasonably request, all at the expense of the Loan Parties, (b) provide
to the Collateral Agent, from time to time upon written request, evidence
reasonably satisfactory to the Collateral Agent as to the perfection and
priority of the Liens created or intended to be created by the Security
Documents, (c) not effect or permit any change referred to in Section 5.07(e) 


 


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unless all filings have
been made under the Uniform Commercial Code or otherwise that are required in
order for the Collateral Agent to continue at all times following such change
to have, and (d) take all necessary action to ensure that the Collateral
Agent does continue at all times to have, a valid, legal and perfected security
interest in all the Collateral.  Each
Loan Party hereby authorizes the Collateral Agent to file one or more financing
or continuation statements under the UCC (or any non-U.S. equivalent thereto),
and amendments thereto, relative to all or any part of the Collateral without
the signature of such Loan Party, where permitted by law.


 


Section 5.14           Delivery Date Collateral
Requirements.  Within 10 Business
Days prior to the Delivery Date for any Rig:


 


(a)           Deliver to the Collateral Agent,
copies of each of the following:


 


(i)            a certificate stating (A) the
name, registered owner, official number, the International Maritime
Organization Number (if any), class and jurisdiction of registration, which
shall be an Acceptable Flag Jurisdiction; and (B) that the Rig has been
delivered to the applicable Borrower, completed in accordance with the
applicable Rig Construction Contract, and such Rig has all certifications or
licenses required for the intended operation of such Rig;


 


(ii)           the on-site report of the Technical
Advisor confirming that the Rig has been completed in accordance with the
Specifications (as defined in the Rig Construction Contract);


 


(iii)          copies of the various documents to be
delivered by the Shipyard to the applicable Borrower in connection with
delivery of such Rig as specified in Article IX of the Rig Construction
Contract, including a copy of the Shipyard declaration of warranty confirming that
good and marketable title to the Rig is being transferred to the applicable
Borrower free and clear of all Liens;


 


(iv)          (i) certificates of ownership or
abstracts of title from appropriate authorities showing (or confirmation
updating previously reviewed certificates and indicating) the registered
ownership of such Rig by the relevant Borrower, (ii) valid and current
ISM/ISPS Code documentation required with respect to such Rig pursuant to
applicable Legal Requirements, and (iii) the results of maritime registry
searches with respect to such Rig, indicating no record liens other than Liens
in favor of the Collateral Agent and Permitted Prior Liens;


 


(v)           evidence that such Rig has received
the highest classification from the classification society issuing such class
and the conditions and recommendations of such classification society with
respect to such Rig shall be satisfactory to the Facility Agent in its
reasonable discretion;


 


(vi)          a Rig Appraisal Report dated no more
than 45 days prior to such Delivery Date (procured at the expense of the
Borrower) with respect to such Rig;


 


(vii)         a Rig Mortgage duly authorized,
executed and delivered by the applicable Borrower granting a Lien to the
Collateral Agent in such Rig to secure the Obligations, 


 


85

















 


together with any other documents, agreements or
instruments necessary to create an Acceptable Security Interest in such Rig, in
appropriate form for recording in the appropriate vessel registry and otherwise
effective to create in favor of the Collateral Agent a legal, valid and
enforceable first priority security interest, in and Lien upon such Rig,
subject only to Permitted Prior Liens;


 


(viii)        All filings, deliveries of instruments
and other actions necessary or desirable in the reasonable opinion of the
Collateral Agent to perfect and preserve such security interests shall have
been duly effected and the Collateral Agent shall have received evidence
thereof in form and substance reasonably satisfactory to the Collateral Agent;
recorded in the appropriate vessel registry;


 


(ix)           an Assignment of Earnings and an
Assignment of Insurances, together covering all of such Loan Party’s present
and future Earnings Collateral and Insurance Collateral;


 


(x)            a report, in form and scope
reasonably satisfactory to the Collateral Agent, from the Insurance Advisor
with respect to the Insurance Policies in effect with respect to such Rig,
specifying for each such Insurance Policy the amount thereof, the risks insured
against thereby, the name of the insurer and each insured party thereunder and
the policy or other identification number thereof, together with a certificate
from such Insurance Advisor certifying that all such Insurance Policies (i) are
in full force and effect, (ii) are placed with such insurance companies,
underwriters or associations, in such amounts, against such risks, and in such
form, as are normally issued against by Persons of similar size and established
reputation engaged in the same or similar businesses and similarly situated and
as are necessary or advisable for the protection of the Collateral Agent as
mortgagee and (ii) conform with the insurance requirements of Section 5.04;


 


(xi)           copies of the Certificates of
Inspection, Vessel Certificates of Financial Responsibility (Water Pollution)
or International Oil Pollution Prevention Certificate, each issued by the
United States Coast Guard (or the substantial equivalent in the case of foreign
assets if available), Certificates of Classification issued by the American
Bureau of Shipping, Certificates of Documentation or Certificates of Registry
issued by the United States Coast Guard or foreign equivalent, and
International Load Line Certificates issued by the American Bureau of Shipping
as requested by the Facility Agent with respect to the Rigs, and the Facility
Agent shall be reasonably satisfied with the contents thereof;


 


(xii)          evidence of corporate authority to
enter into such Loan Documents and written opinions from (A) maritime
counsel to Borrower addressed to the Collateral Agent and each of the Lenders
which shall (i) be in form and substance reasonably acceptable to the
Collateral Agent and (ii) cover (v) the legal authority of the
applicable Borrower to own and document such Rig under the laws of the
jurisdiction of registration, (w) such Borrower’s ownership of record of
such Rig, (x) the due filing of the Rig Mortgage in the appropriate office
of the jurisdiction of registration and affirmation that such office is the
only office in which the filing and recording of the Rig Mortgage is necessary,
(y) the character of the Rig Mortgage as a “preferred mortgage” 


 


86

















 


under the laws of the jurisdiction of registration,
and (z) the absence of any Liens of record on the Rig recorded prior in
time to the Rig Mortgage, and (B) Cayman counsel to such Borrower
addressed to the Collateral Agent and each of the Lenders in form and substance
reasonably acceptable to the Collateral Agent regarding due execution, delivery
and enforceability of the Rig Mortgage and other related Security Documents and
such other matters incident thereto as the Collateral Agent may reasonably
request;


 


(xiii)         evidence that all sales, import, and
use taxes have been paid in connection with such Rig; and


 


(xiv)        such other documents, certificates and
opinions as the Collateral Agent shall have reasonably requested.


 


(b)           Cause to be established with the
Collateral Agent or, if expressly permitted below, another financial
institution reasonably acceptable to the Collateral Agent by the applicable
Borrower each of the following accounts:


 


(i)            Earnings Account.  The applicable Borrower shall cause the
earnings derived from its respective Rig, to the extent constituting Earnings
Collateral, to be deposited by the respective account debtor in respect of such
earnings into an interest bearing account maintained for such Borrower from
time to time with the Collateral Agent or another financial institution
reasonably acceptable and located in a jurisdiction reasonably acceptable to
the Collateral Agent subject to an Account Control Agreement (such account, the
“Earnings Account”). Without limiting any Loan Party’s obligations in
respect of this Section 5.14(b), each Loan Party agrees that, in
the event it receives any earnings constituting Earnings Collateral, or any
such earnings are deposited other than in one of the Earning Accounts, it shall
promptly deposit all such proceeds into the Earnings Account maintained for
such Borrower from time to time.


 


(ii)           Retention Account.  The applicable Borrower shall establish an
interest bearing account subject to an Account Control Agreement with the
Collateral Agent (such account, the “Retention Account”) into which each
Borrower will transfer monthly, until the applicable Tranche of Advances have
been repaid in full, from the Earnings Account an amount equal to one-third of
the amount of Debt Service of the applicable Tranche of Advances necessary for
the next succeeding Payment Date.


 


(iii)          Debt Service Reserve Account.
The applicable Borrower shall establish an interest bearing account subject to
an Account Control Agreement with the Collateral Agent (such account, the “Debt
Service Reserve Account”) in which each Borrower will maintain, at all
times until the applicable Tranche of Advances have been repaid in full,
deposits in an amount equal to at least three months of Debt Service of the
applicable Tranche of Advances.  Any
amounts deposited in the Debt Service Reserve Account may be applied to the
Debt Service of any other sum payable under this Agreement, but only if: (A) there
are no funds available for such payment in any Earnings Account or the
Retention Account; (B) there are no Unused Revolving Commitments under
such Borrower’s Tranche and (C) on terms that such Borrower shall repay to
the Debt Service Reserve Account the amount so withdrawn on or before the next
Payment Date following 


 


87

















 


such withdrawal. 
So long as no Default or Event of Default has occurred and is
continuing, any amounts in excess of those amounts required to be deposited in
the Debt Service Reserve Account will be refunded to the Earnings Account upon
the written request of the Borrower.


 


Section 5.15           Drilling Contracts.


 


(a)           Unless otherwise consented to by each
of the Joint Bookrunners and the Majority Lenders, upon each applicable
Delivery Date, each Borrower must establish with respect to its Rig at least 15
months of Debt Service, as determined by the Joint Bookrunners, through a combination
of (A) anticipated earnings from executed firm drilling contracts with
respect to such Rig and (B) cash deposits into the Debt Service Reserve
Account.


 


(b)           Unless otherwise consented to by each
of the Joint Bookrunners and the Majority Lenders, each Rig must maintain
employment pursuant to executed drilling contracts acceptable to the Joint
Bookrunners in consultation with the Majority Lenders for at least 12 months,
whether or not consecutive, during any consecutive period of 18 months during the
term of this Agreement.


 


(c)           In connection with any drilling
contract having an indicated duration of at least twelve (12) months (including
any optional extensions or renewals), the applicable Loan Party shall, at its
own cost and expense, promptly and duly execute and deliver to the Collateral
Agent a Charter Assignment in respect of such drilling contract, and will use
its commercially reasonable efforts to cause the charterer under such charter
party to execute and deliver to the Collateral Agent a consent to the Charter
Assignment substantially in the form attached thereto.


 


Section 5.16           Separate Existence.  Comply with the following undertakings:


 


(a)           maintain its books, financial records
and accounts, including checking and other bank accounts and custodian and
other securities safekeeping accounts, separate and distinct from those of the
other Loan Parties;


 


(b)           maintain its books, financial records
and accounts (including inter-entity transaction accounts) in a manner so that
it will not be difficult or costly to segregate, ascertain or otherwise
identify their assets and liabilities separate and distinct from the assets and
liabilities of the other Loan Parties;


 


(c)           not commingle any of its assets,
funds, liabilities or business functions with the assets, funds, liabilities or
business functions of the other Loan Parties;


 


(d)           observe all requisite organizational
procedures and formalities, including the holding of meetings of the boards of
directors as required by its organizational documents, the recordation and
maintenance of minutes of such meetings, and the recordation of and maintenance
of resolutions adopted at such meetings;


 


(e)           not be consensually merged or
consolidated with the other Loan Parties (other than for financial reporting
purposes);


 


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(f)            all transactions, agreements and
dealings between the Loan Parties (including, in each case, transactions,
agreements and dealings pursuant to which the assets or property of one is used
or to be used by the other), will reflect the separate identity and legal
existence of each such Person;


 


(g)           transactions between any of the Loan
Parties, on the one hand, and any third parties, on the other hand, will be
conducted in the name of such Loan Party, as applicable, as an entity separate
and distinct from the other Loan Parties;


 


(h)           to the extent that any of the Loan
Parties jointly contract or do business with vendors or service providers or
share overhead expenses, the costs and expenses incurred in so doing will be
fairly and non-arbitrarily allocated between or among such entities, with the
result that each such entity bears its fair share of all such costs and
expenses;


 


(i)            to the extent that any of the Loan
Parties contracts or does business with vendors or service providers where the
goods or services are wholly or partially for the benefit of the other, then
the costs incurred in so doing will be fairly and non-arbitrarily allocated to
the entity for whose benefit the goods or services are provided, with the
result that each such entity bears its fair share of all such costs;


 


(j)            each Borrower shall have unaudited
annual financial statements prepared that are separate from the other Loan
Parties, which shall be certified by an authorized representative of such
Borrower, as applicable, as fairly representing, in accordance with GAAP
(subject to the absence of footnotes), the financial position of such Borrower;


 


(k)           none of the Loan Parties will make
any inter-entity loans, advances, guarantees, extensions of credit or
contributions of capital to, from or for the benefit of any Borrower,
respectively, without proper documentation and accounting in accordance with
GAAP and such Debt shall comply with the requirements of Section 6.02(b) below;
and


 


(l)            the Loan Parties will not refer to
any Borrower as a department or division of any Loan Party and will not
otherwise refer to any Borrower in a manner inconsistent with its status as a
separate and distinct legal entity.  In
addition, each of the Borrowers will hold itself out as separate and distinct
from the other Loan Parties.


 


Section 5.17           Post-Closing Requirements.  Either on or before June 30, 2008 or the
receipt by the Parent of an Enforcement Notice (as defined in the Pledge
Agreement), whichever occurs first, (a) cause each of the Parent, OGIL,
Vantage Int’l Payroll (Caymans), Vantage Int’l Management (Caymans), Vantage
Driller I and Vantage Driller II to amend its Articles of Association in form
and substance reasonably satisfactory to the Facility Agent and (b) register
the special resolution giving effect to the amendment to the articles as
required herein with the Registrar of Companies in the Cayman Islands.


 


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ARTICLE VI

NEGATIVE COVENANTS


 


So long as the Advances or
any amount under any Loan Document shall remain unpaid, any Lender shall have
any Revolving Commitment, or there shall exist any Letter of Credit Exposure,
unless the Majority Lenders otherwise consent in writing, the Parent shall not,
and shall not permit any other Loan Party to:


 


Section 6.01           Liens, Etc.  Create, assume, incur or suffer to exist, any
Lien on or in respect of any of its Property whether now owned or hereafter
acquired, other than the following (“Permitted Liens”):


 


(a)           Liens pursuant to any Loan Document;


 


(b)           Liens for taxes, assessments or
governmental charges or levies on its Property if the same shall not at the
time be delinquent or thereafter can be paid without penalty, or are being
contested in good faith and by appropriate proceedings diligently conducted and
for which adequate reserves in accordance with GAAP shall have been set aside
on its books;


 


(c)           Inchoate Liens arising under ERISA
and Liens incurred and pledges or deposits made in the ordinary course of
business in connection with worker’s compensation, unemployment insurance or
other social security or retirement benefits, or similar legislation, other
than any Lien imposed by ERISA;


 


(d)           Permitted Prior Liens;


 


(e)           Pledges and Liens on deposits,
investment accounts, cash and Cash Equivalents to secure the performance of
bids, trade contracts and leases (other than Debt), statutory obligations,
surety bonds (other than bonds related to judgments or litigation), appeal
bonds, performance bonds and other obligations of a like nature incurred in the
ordinary course of business; provided that the Debt secured by such
Liens is permitted under Section 6.02 below;


 


(f)            Liens arising out of judgments or
awards not constituting an Event of Default under Section 7.01(f),
and prejudgment Liens created by or existing from any litigation or legal
proceeding, in each case in respect of which the Parent or any of the
Subsidiaries shall in good faith be prosecuting an appeal or proceedings for
review in respect of which there shall be secured a subsisting stay of
execution pending such appeal or proceedings for which adequate reserves have
been made to the extent required by GAAP;


 


(g)           rights of set-off of banks and other
Persons in the ordinary course of banking and trading arrangements;


 


(h)           Liens securing Debt permitted under Section 6.02(f) and
(h); provided that (i) such Liens do not at any time
encumber any property other than the property financed by such Debt and (ii) the
Debt secured thereby does not exceed the cost or fair market value, whichever
is lower, of the property being acquired on the date of acquisition;


 


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(i)            purchase money security interests in
real property, improvements thereto or equipment hereafter acquired (or, in the
case of improvements, constructed) by the Loan Parties or any Subsidiary;
provided that (i) such security interests secure Debt permitted by Section 6.02,
(ii) such security interests are incurred, and the Debt secured thereby is
created, within 90 days after such acquisition (or construction), (iii) the
Debt secured thereby does not exceed the lesser of the cost or the fair market
value of such real property, improvements or equipment at the time of such
acquisition (or construction) and (iv) such security interests do not
apply to any other property or assets of the Loan Parties or any Subsidiary;


 


(j)            Liens securing the Drillship Debt;
provided, however, that such Liens do not encumber any Collateral;


 


(k)           Carriers’, warehousemen’s,
landlords’, mechanics’, materialmen’s, repairmen’s or other like Liens arising
in the ordinary course of business which are not overdue for a period of 90
days or which are being contested in good faith and by appropriate proceedings
diligently conducted, if adequate reserves with respect thereto are maintained
on the books of the applicable Person; and


 


(l)            other Liens securing obligations,
actual or contingent, in an aggregate amount not greater than $2,500,000 at any
time.


 


Section 6.02           Debts, Guaranties and Other
Obligations.  Create, assume, suffer
to exist or in any manner become or be liable, in respect of any Debt except:


 


(a)           Debt under the Loan Documents;


 


(b)           unsecured Debt owing by any Loan
Party to the Parent or any other Loan Party; provided that (i) such Debt
shall constitute Collateral under the Security Agreement, (ii) be on terms
(including subordination terms) acceptable to the Facility Agent and (iii) be
otherwise permitted under the provisions of Section 6.05;


 


(c)           Guarantees of the Parent or any
Subsidiary in respect of Debt otherwise permitted hereunder of the Parent or
any other Loan Party;


 


(d)           Debt in connection with any
guarantees in favor of any protection and indemnity or War Risk associations to
the extent such guarantees are required in connection with any insurance
policies;


 


(e)           Charter Obligations of the Parent and
its Subsidiaries in an aggregate amount not to exceed $50,000,000;


 


(f)            Debt of the Parent or any Subsidiary
incurred to finance the acquisition, construction or improvement of any fixed
or capital assets, and extensions, renewals and replacements of any such Debt
that do not increase the outstanding principal amount thereof; provided that (i) such
Debt is incurred prior to or within 90 days after such acquisition or the
completion of such construction or improvement and (ii) the aggregate
principal amount of Debt permitted by this paragraph shall not exceed
$5,000,000 at any time outstanding;


 


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(g)           obligations (contingent or otherwise)
of the Parent or any Subsidiary existing or arising under any Swap Contract, provided
that (i) such obligations are (or were) entered into by such Person in the
ordinary course of business for the purpose of directly mitigating risks
associated with interest rates under this Agreement, foreign exchange
liabilities or commodity expenses held or reasonably anticipated by such
Person, and not for purposes of speculation or taking a “market view;” and (ii) interest
rate Swap Contracts may not cover a notional amount greater than 50% of the
aggregate outstanding Term Advances and for a term of not more than seven (7) years;


 


(h)           Debt in respect of Capital Leases and
Synthetic Lease Obligations; provided, however, that the
aggregate amount of all such Debt at any one time outstanding shall not exceed
$5,000,000;


 


(i)            Guaranties in connection with Rig
Construction Contracts or buyer indemnities per the Share Purchase Agreement;


 


(j)            Guaranty by the Parent of the
obligations of Mandarin under Drillship Documents;


 


(k)           Drillship Debt; provided that
after giving effect to such transaction on a pro forma basis, the Parent would
have been in compliance with Sections 6.17 through 6.21 as of the end of the
most recent fiscal quarter;


 


(l)            Guaranties by the Parent of
obligations of any Bidding Entity in connection with the submission of a bid in
an aggregate amount not to exceed $25,000,000;


 


(m)          Debt outstanding under one or more
unsecured short term money market credit facilities the principal amount of
which does not exceed $5,000,000 in the aggregate;


 


(n)           unsecured Debt incurred in the
ordinary course of business in an aggregate principal amount not to exceed
$3,000,000 at any time outstanding; and


 


(o)           unsecured Debt owing to Vantage
Energy by Parent or OGIL in respect of the funds held in trust at Vantage
Energy and used to pay the respective obligations of Parent to TMT and OGIL to
Shipyard, in each case, on the Closing Date; provided that such Debt is paid in
full within 90 days after the Closing Date.


 


Section 6.03           Merger or Consolidation.  Merge, dissolve, liquidate, consolidate with
or into another Person, or Dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person.


 


Section 6.04           Asset Sales.  Make any Asset Disposition or enter into any
agreement to make any Asset Disposition, except for:


 


(a)           Sale of inventory in the ordinary
course of business;


 


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(b)           The sale of obsolete, worn-our or
surplus assets no longer used or usable in the business of the Borrowers or any
of their Subsidiaries;


 


(c)           Asset Dispositions of equipment or
real property if (i) such property is exchanged for credit against the
purchase price of similar replacement property or against the purchase price of
property purchased by a Loan Party for use in its business, or (ii) the
proceeds of such Disposition are applied to the purchase price of replacement
property or other property used by a Loan Party in its business;


 


(d)           Asset Dispositions of Property by any
Subsidiary or a Borrower to a Borrower or any wholly-owned Subsidiary; provided
that if the transferor of such property is a Loan Party, the transferee thereof
must be a Loan Party;


 


(e)           the Borrowers may charter, lease or
rent Rigs and other equipment in the ordinary course of business; provided
that any such action taken with respect to a Rig is in accordance with the
applicable provisions of  this Agreement;
and


 


(f)            Asset Dispositions of any of the
Drillship Documents from OGIL to a Drillship Entity.


 


Section 6.05           Investments.  Make or suffer to exist any Investments, or
commitments therefor, except:


 


(a)           Investments in the form of Cash
Equivalents;


 


(b)           Investments of the Parent in any of
its Subsidiaries and Investments of any Loan Party in another Loan Party;


 


(c)           Investments consisting of extensions
of credit in the nature of accounts receivable or notes receivable arising from
the grant of trade credit in the ordinary course of business, and Investments
received in satisfaction or partial satisfaction thereof from financially
troubled account debtors to the extent reasonably necessary in order to prevent
or limit loss;


 


(d)           Investments of foreign currencies or
otherwise in time deposits or other securities of foreign Governmental
Authorities or other foreign Persons, if required by the action of a foreign
Governmental Authority or to fund working capital requirements for the operations
of any Borrower in the foreign country;


 


(e)           Guarantees permitted by Section 6.02;
and


 


(f)            other Investments not exceeding
$5,000,000 in the aggregate in any fiscal year.


 


Section 6.06           Restricted Payments.  Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
except that:


 


(a)           each Subsidiary of the Parent (other
than OGIL and its Subsidiaries) may make Restricted Payments to the Parent and
to wholly-owned Subsidiaries (and, in the case of a Restricted Payment by a
non-wholly-owned Subsidiary, to the Parent and any Subsidiary and to 


 


93

















 


each other owner of
Equity Interest or other equity interests of such Subsidiary on a pro rata
basis based on their relative ownership interests);


 


(b)           the Parent and each Subsidiary may
declare and make dividend payments or other distributions payable solely in the
common stock or other common equity interests of such Person;


 


(c)           the Parent may purchase, redeem or
otherwise acquire shares of its common stock or other common equity interests
or warrants or options to acquire any such shares with the proceeds received
from the substantially concurrent issue of new shares of its common stock or other
common equity interests;


 


(d)           so long as no Event of Default exists
and after giving effect to such transaction on a pro forma basis, no Default
would be caused thereby, the Parent may make, or may cause OGIL and its
Subsidiaries to make, Restricted Payments with the prior written consent of the
Joint Bookrunners and the Super-Majority Lenders; and


 


(e)           so long as no Event of Default exists
and after giving effect to such transaction on a pro forma basis, no Default
would be caused thereby, the Parent may make, or may cause OGIL and its
Subsidiaries to make, Restricted Payments with the proceeds from Top-Up
Advances.


 


Section 6.07           Change in Nature of Business.  (a) With respect to the Loan Parties
(other than the Borrowers), engage in any line of business substantially
different from those lines of business conducted by the Parent and its
Subsidiaries on the date hereof or any business substantially related or
incidental thereto, (b) with respect to the Borrowers, (i) own any
assets other than the Rigs and other assets directly related thereto, (ii) engage
in any line of business other than the ownership and operation of the Rigs or (iii) establish
any segregated portfolios and (c) with respect to Vantage Int’l Management
(Singapore), Vantage Int’l Payroll (Singapore), and Vantage US Payroll, engage
in any line of business substantially different from those lines of business
conducted by such Person on the date hereof.


 


Section 6.08           Transactions With Affiliates.  Enter into any transaction of any kind with any
Affiliate of the Parent, whether or not in the ordinary course of business,
other than on fair and reasonable terms substantially as favorable to the
Parent or such Subsidiary as would be obtainable by the Parent or such
Subsidiary at the time in a comparable arm’s length transaction with a Person
other than an Affiliate.


 


Section 6.09           Maintenance of Ownership of
Subsidiaries.  Sell or otherwise
dispose of any shares of Capital Stock of any Borrower, any Borrower will not
sell or otherwise dispose of any shares of Capital Stock of any of its
Subsidiaries, and none of the Borrowers nor any of their respective
Subsidiaries shall issue, sell or otherwise dispose of (other than to the
applicable Borrower or the Parent) any shares of its Capital Stock.


 


Section 6.10           Agreements Restricting Liens and
Distributions.  Create or otherwise
cause or suffer to exist any prohibition, encumbrance or restriction which
prohibits or otherwise (a) restricts the ability (i) of any
Subsidiary to make Restricted Payments to the Parent or any other Loan Party or
to otherwise transfer property to the Parent or any other Loan Party, (ii) of



 


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any Subsidiary to
Guarantee the Debt of the Loan Parties or (iii) of the Parent or any Subsidiary
to create, incur, assume or suffer to exist Liens on property of such Person; provided,
however, that this clause (iii) shall not prohibit any negative
pledge incurred or provided in favor of any holder of Debt permitted under Section 6.02(f) or
Section 6.02(l) solely to the extent any such negative pledge
relates to the Property financed by or the subject of such Debt; or (b) requires
the grant of a Lien to secure an obligation of such Person if a Lien is granted
to secure another obligation of such Person.


 


Section 6.11           Limitation on Accounting Changes
or Changes in Fiscal Periods.  Permit
(a) any change in any of its accounting policies affecting the
presentation of financial statements or reporting practices, except as required
or permitted by GAAP or (b) the fiscal year of the Parent or any of its
Subsidiaries to end on a day other than December 31 or change the Parent’s
method of determining fiscal quarters.


 


Section 6.12           Sale and Leaseback Transactions
and other Off-Balance Sheet Liabilities. 
Enter into or suffer to exist any (a) Sale and Leaseback
Transaction or (b) any other transaction pursuant to which it incurs or
has incurred Off-Balance Sheet Liabilities, except for obligations permitted to
be incurred under the terms of Section 6.02.


 


Section 6.13           Amendment of Material Contracts.  Amend, modify, supplement,  terminate or waive any provision of (a) the
Loan Parties’ organizational documents in a manner which would be materially
adverse to the Secured Parties or (b) the Transaction Documents.


 


Section 6.14           Operation of Rigs.


 


(a)           make any modification to any Rig
which would materially or adversely alter the structure, type or performance
characteristics of such Rig or which would materially reduce the value of such
Rig;


 


(b)           employ any Rig or allow its
employment in any trade or business which is unlawful under the laws of any
relevant jurisdiction in which it is located or subject or in carrying illicit
or prohibited goods or in any manner whatsoever which can reasonably be
expected to render it liable to destruction, seizure or confiscation; and in
the event of hostilities in any part of the world (whether war be declared or
not) not employ any Rig or suffer its employment in carrying any contraband
goods or to enter or trade to any zone which is declared a war zone by any
Government Authority or by the War Risks insurers of such Rig unless there
shall have been effected by the Loan Parties (at their expense) such special,
additional or modified insurance cover as the Collateral Agent may reasonably
require;


 


(c)           if an Event of Default has occurred
and is continuing, undertake or commence upgrades or improvements on any Rig
without the previous consent of the Majority Lenders, and unless the Person to
provide such upgrades or improvements shall first have given to the Collateral
Agent a written waiver or subordination of its Liens or its equivalent, such
waiver or subordination to be in form and substance reasonably satisfactory to
the Collateral Agent;


 


(d)           charter any Rig to, or permit the Rig
to serve under any contract with, a Person (i) or engage in any
transaction, which will violate the Trading with the Enemy Act, as amended, or
any of the foreign assets control regulations of the United States Treasury
Department (31 CFR, 


 


95

















 


Subtitle B, Chapter V, as
amended) or any enabling legislation or executive order relating thereto, or (ii) described
or designated in the Specially Designated Nationals and Blocked Persons List of
the Office of Foreign Assets Control or in Section 1 of the Anti-Terrorism
Order or (iii) that engages or will engage in any dealings or
transactions, or is or will be otherwise associated, with any such Person, if
such transaction or violation would (A) expose the Collateral Agent or any
Secured Party to any penalty, sanction or investigation or (B) jeopardize
the Lien created by the Rig Mortgages or (C) reasonably be expected to
have a material adverse effect on the Loan Parties or the operation of the
Rigs, or any Loan Party’s ability to load or discharge cargo or to effect
repairs on the Rigs;


 


(e)           cause or permit any Rig to be
operated in any manner contrary to law (except where the failure to operate in
compliance with any law would not have a material adverse effect on the Loan
Parties, such Rig or the Lien created by the applicable Rig Mortgage);


 


(f)            abandon any Rig in a port outside
the United States of America;


 


(g)           engage in any unlawful trade or
violate any law or carry any cargo that shall expose any Rig to forfeiture or
capture;


 


(h)           operate any Rig in any jurisdiction
or in any manner which could cause the Lien created by the applicable Rig
Mortgage to be rendered unenforceable or the Collateral Agent’s foreclosure or
enforcement rights to be materially impaired or hindered; or


 


(i)            without giving prior written notice
thereof to the Collateral Agent, change the registered owner, name, flag,
official or patent number, as the case may be, the home port or class of any
Rig.


 


Section 6.15           Bank Accounts.  Establish any bank accounts other than (a) the
Earnings Account, the Retention Account and the Debt Service Reserve Account,
or (b) accounts to be maintained with a Lender or if not maintained with a
Lender, (i) to be subject to an Account Control Agreement, (ii) to
contain less than $200,000 individually or $600,000 in the aggregate at any
time, or (iii) to be payroll accounts. 
Schedule 6.15 sets forth the account numbers and locations of all bank
accounts of the Loan Parties as of the Closing Date.


 


Section 6.16           Capital Expenditures.  Expend, or be committed to expend, in excess
of (a) $12,000,000 in the aggregate of Additional Costs during the term of
this Agreement for the initial outfitting of the Rigs and (b) $10,000,000
of Capital Expenditures (net of reimbursements by customers, reimbursement
obligations of customers, or proceeds of Asset Dispositions used to make such
Capital Expenditures and excluding any Capital Expenditures financed by capital
contributions made by the Parent) during any one fiscal year on a
non-cumulative basis with respect to any Rig.


 


Section 6.17           Leverage Ratio.


 


(a)           Permit the Leverage Ratio for the
Parent and its Subsidiaries on a consolidated basis at all times beginning with
the first day of the third fiscal quarter occurring after the Rig 4 Delivery
Date to be greater than 4.50 to 1.00.


 


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(b)           Permit the Leverage Ratio for OGIL
and its Subsidiaries on a consolidated basis at all times beginning with the
first day of the third fiscal quarter occurring after the Rig 4 Delivery Date
to be greater than 4.50 to 1.00.


 


Section 6.18           Net Debt to Capitalization Ratio.


 


(a)           Permit the ratio of (a) Consolidated
Net Debt for the Parent and its Subsidiaries on a consolidated basis to (b) Equity
of the Parent, each at all times, to be greater than 2.00 to 1.00.


 


(b)           Permit the ratio of (a) Consolidated
Net Debt for OGIL and its Subsidiaries on a consolidated basis to (b) Equity
of OGIL, each at all times, to be greater than 2.00 to 1.00.


 


Section 6.19           Free
Cash Balances.


 


(a)           Permit Free Cash Balances of the
Parent and its Subsidiaries on a consolidated basis to be less than $5,000,000.


 


(b)           Permit Free Cash Balances of OGIL and
its Subsidiaries on a consolidated basis to be less than $5,000,000.


 


Section 6.20           Working Capital Ratio.


 


(a)           Permit the Working Capital Ratio for
the Parent and its Subsidiaries on a consolidated basis at all times to be less
than 1.00 to 1.00.


 


(b)           Permit the Working Capital Ratio for
OGIL and its Subsidiaries on a consolidated basis at all times to be less than
1.00 to 1.00.


 


Section 6.21           Fixed Charge Coverage Ratio.


 


(a)           Permit the Fixed Charge Coverage
Ratio for the Parent and its Subsidiaries on a consolidated basis at all times
beginning with the first day of the third fiscal quarter occurring after the
Rig 4 Delivery Date to be less than 1.25 to 1.00.


 


(b)           Permit the Fixed Charge Coverage
Ratio for OGIL and its Subsidiaries on a consolidated basis at all times
beginning with the first day of the third fiscal quarter occurring after the
Rig 4 Delivery Date to be less than 1.25 to 1.00.


 


ARTICLE VII

EVENTS OF DEFAULT


 


Section 7.01           Events of Default.  The occurrence of any of the following events
shall constitute an “Event of Default” under any Loan Document:


 


(a)           Payment.  Any Borrower shall fail to pay (i) any
principal of any Advance (including, without limitation, any mandatory
prepayment required by Section 2.07) or reimburse 


 


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any drawing under any
Letter of Credit when the same becomes due and payable, or (ii) any
interest on the Advances, any fees, reimbursements, indemnifications, or other
amounts payable in connection with the Obligations, this Agreement or under any
other Loan Document within three Business Days after the same becomes due and
payable;


 


(b)           Representation and Warranties.  Any representation or statement made or
deemed to be made by any Borrower or any other Loan Party (or any of their
respective officers) in this Agreement, in any other Loan Document, or in
connection with this Agreement or any other Loan Document shall prove to have
been incorrect in any material respect when made or deemed to be made;


 


(c)           Covenant Breaches.  Any Borrower or any other Loan Party shall (i) fail
to perform or observe any covenant contained in Sections 2.07, 5.01,
5.04, 5.06, 5.07, 5.09, 5.12, 5.14,
and 5.15 and Article VI of this Agreement or (ii) fail
to perform or observe any other term or covenant set forth in this Agreement or
in any other Loan Document which is not covered by clause (i) above
or any other provision of this Section 7.01 if such failure shall
remain unremedied for 30 days after the earlier of (A) written notice
of such default shall have been given to the Borrowers by the Facility Agent or
any Lender or (B) any actual knowledge of such default by a Responsible
Officer of any Loan Party;


 


(d)           Cross-Default.  (i) Any Loan Party or any of its
Subsidiaries shall fail to pay any principal of or premium or interest on its
Debt which is outstanding in a principal amount of at least $5,000,000 (or the
equivalent in any other currency) individually or when aggregated with all such
Debt of the Person so in default (but excluding Debt evidenced by the Advances)
when the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), (ii) any other event shall
occur or condition shall exist under any agreement or instrument relating to
Debt which is outstanding in a principal amount of at least $5,000,000 (or the
equivalent in any other currency) individually or when aggregated with all such
Debt of the Person so in default (but excluding Debt evidenced by the
Advances), if the effect of such event or condition is to accelerate, or to
permit the acceleration of, the maturity of such Debt; (iii) any such Debt
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; or (iv) there occurs under any Swap Contract an Early Termination
Date (as defined in such Swap Contract) resulting from (A) any event of
default under such Swap Contract as to which a Loan Party or any Subsidiary
thereof is the Defaulting Party (as defined in such Swap Contract) or (B) any
Termination Event (as so defined) under such Swap Contract as to which a Loan
Party or any Subsidiary thereof is an Affected Party (as so defined) and, in
either event, the Swap Termination Value owed by such Loan Party or such
Subsidiary as a result thereof is greater than $5,000,000;


 


(e)           Insolvency.  Any Loan Party 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, commences negotiations with
one or more of its creditors with a view to rescheduling any of its
indebtedness which it would not otherwise be able to pay as it falls due or
shall make a general assignment for the benefit of creditors; or any proceeding
shall be instituted by or against any Loan Party or any of its Subsidiaries
seeking to adjudicate it as a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or 


 


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composition of it or its
debts under any law 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 such Person, either such proceeding shall remain undismissed
for a period of 60 days or any of the actions sought in such proceeding shall
occur; or such Person shall take any action to authorize any of the actions set
forth above in this paragraph (e) or any analogous procedure or step is
taken in any jurisdiction;


 


(f)            Judgments.  Any judgment, decree or order for the payment
of money shall be rendered against any Loan Party or any of its Subsidiaries in
an amount in excess of $10,000,000 (or the equivalent in any other currency)
and either (i) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order or (ii) there shall be any period of
30 consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;


 


(g)           ERISA.  (i) An ERISA Event occurs with respect
to a Pension Plan or Multiemployer Plan which has resulted or could reasonably
be expected to result in liability of any Loan Party under Title IV of ERISA to
the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in
excess of the Threshold Amount, or (ii) the Parent or any ERISA Affiliate
fails to pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section 4201
of ERISA under a Multiemployer Plan in an aggregate amount in excess of
$5,000,000;


 


(h)           Loan Documents.  Any Loan Document, at any time after its
execution and delivery and for any reason other than as expressly permitted
hereunder or satisfaction in full of all the Obligations, ceases to be in full
force and effect and if such failure can be cured by the Loan Parties, the Loan
Parties refuse to take actions required by Facility Agent to cure such
unenforceability; or any Loan Party or any other Person contests in any manner
the validity or enforceability of any Loan Document; or any Loan Party denies
that it has any or further liability or obligation under any Loan Document, or
purports to revoke, terminate or rescind any Loan Document;


 


(i)            Security Documents.  The Collateral Agent for the benefit of the
Secured Parties shall fail to have an Acceptable Security Interest in a
material portion of the Collateral, except to the extent otherwise permitted by
this Agreement and if such failure can be cured by the Loan Parties, the Loan
Parties refuse to take actions required by Facility Agent to cure such failure;


 


(j)            Material Contracts.  There shall have been (i) an amendment,
material default, extension of the Delivery Date under, termination or
cancellation of any Transaction Document (other than any amendment or extension
approved by the Joint Bookrunners in consultation with the Majority Lenders) or
(ii) a material default under, termination or cancellation of any
Drillship Document; or


 


(k)           Change in Control.  A Change of Control shall occur.


 


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Section 7.02           Optional
Acceleration of Maturity.  If any
Event of Default (other than an Event of Default pursuant to Section 7.01(e))
shall have occurred and be continuing, then, and in any such event:


 


(a)           the Facility Agent (i) shall at
the written request, or may with the consent, of the Majority Lenders, by
notice to the Borrowers, declare the Commitments and the obligation of each
Lender and each Issuing Bank to make extensions of credit hereunder, including
making Advances and issuing Letters of Credit, to be terminated, whereupon the
same shall forthwith terminate, and (ii) shall at the written request, or
may with the consent, of the Majority Lenders, by notice to the Borrowers,
declare all principal, interest, fees, reimbursements, indemnifications, and
all other amounts payable under this Agreement and the other Loan Documents to
be forthwith due and payable, whereupon all such amounts shall become and be
forthwith due and payable in full, without notice of intent to demand, demand,
presentment for payment, notice of nonpayment, protest, notice of protest,
grace, notice of dishonor, notice of intent to accelerate, notice of
acceleration, and all other notices, all of which are hereby expressly waived
by the Borrowers;


 


(b)           each Borrower shall, on demand of the
Facility Agent at the written request or with the consent of the Majority
Lenders, deposit with the Facility Agent into the LC Cash Collateral Account an
amount of cash in Dollars equal to the outstanding Letter of Credit Exposure as
security for the Obligations to the extent the Letter of Credit Obligations are
not otherwise paid at such time; and


 


(c)           the Collateral Agent shall at the
written request of, or may with the consent of, the Majority Lenders proceed to
enforce its rights and remedies under the Security Documents, this Agreement,
and any other Loan Document for the ratable benefit of the Lenders by
appropriate proceedings.


 


Section 7.03           Automatic Acceleration of Maturity.  If any Event of Default pursuant to
paragraph (e) of Section 7.01 shall occur:


 


(a)           (i) the Commitments and the
obligation of each Lender and each Issuing Bank to make extensions of credit
hereunder, including making Advances and issuing Letters of Credit, shall
terminate, and (ii) all principal, interest, fees, reimbursements,
indemnifications, and all other amounts payable under this Agreement and the
other Loan Documents shall become and be forthwith due and payable in full,
without notice of intent to demand, demand, presentment for payment, notice of
nonpayment, protest, notice of protest, grace, notice of dishonor, notice of
intent to accelerate, notice of acceleration, and all other notices, all of
which are hereby expressly waived by the Borrowers;


 


(b)           each Borrower shall deposit with the
Facility Agent into the LC Cash Collateral Account an amount of cash in Dollars
equal to the outstanding Letter of Credit Exposure as security for the
Obligations to the extent the Letter of Credit Obligations are not otherwise
paid at such time; and


 


(c)           the Collateral Agent shall at the
written request of, or may with the consent of, the Majority Lenders proceed to
enforce its rights and remedies under the Security Documents, this 


 


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Agreement, and any other
Loan Document for the ratable benefit of the Lenders by appropriate
proceedings.


 


Section 7.04           Non-exclusivity of Remedies.  No remedy conferred upon the Facility Agent,
the Collateral Agent, the Issuing Banks and 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 7.05           Right of Set-off.  If an Event of Default shall have occurred
and be continuing, each Lender, each Issuing Bank, and each of their respective
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by applicable law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final, in whatever
currency) at any time held and other obligations (in whatever currency) at any
time owing by such Lender, such Issuing Bank or any such Affiliate to or for
the credit or the account of any Borrower or any other Loan Party against any
and all of the obligations of the Borrowers or such Loan Party now or hereafter
existing under this Agreement or any other Loan Document to such Lender or such
Issuing Bank, irrespective of whether or not such Lender or such Issuing Bank
shall have made any demand under this Agreement or any other Loan Document and
although such obligations of the Borrowers or such Loan Party may be contingent
or unmatured or are owed to a branch or office of such Lender or Issuing Bank
different from the branch or office holding such deposit or obligated on such
indebtedness. The rights of each Lender, each Issuing Bank and their respective
Affiliates under this Section are in addition to other rights and remedies
(including other rights of setoff) that such Lender, such Issuing Bank or their
respective Affiliates may have. Each Lender and each Issuing Bank agrees to
notify the Borrowers and the Facility Agent promptly after any such setoff and
application, provided that the failure to give such notice shall not affect the
validity of such setoff and application.


 


Section 7.06           Application
of Proceeds.


 


(a)           So long as no Event of Default has
occurred and is continuing, on each Payment Date until the applicable Tranche
of Advances have been repaid in full, after payment of Permitted Operating
Expenses from monies in each of the Earnings Account, funds in the applicable
Retention Account and the applicable Earning Account will be applied in the
following priority:


 


(i)            First, to the ratable payment
of any fees and other unreimbursed reasonable expenses for which any Mandated
Lead Arranger, any Joint Bookrunner, any Agent or any Secured Party is to be
reimbursed pursuant to this Agreement or any other Loan Document, in each case
that are then due and payable;


 


(ii)           Second, to the payment of all
obligations of the Loan Parties owing to any Swap Counterparty under any Swap
Contract, including, if applicable, the Swap Termination Value, if any, then
due and payable;


 


(iii)          Third, to the ratable payment
of accrued but unpaid interest on the applicable Tranche of Advances then due
and payable under this Agreement;


 


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(iv)          Fourth, to the ratable payment
of all principal of the Obligations then due and payable which relate to the
applicable Tranche of Advances and Letters of Credit and which are owing to the
Facility Agent, the Collateral Agent, the Issuing Banks and the Lenders;


 


(v)           Fifth, to fund the Debt
Service Reserve Account such that the aggregate amount of deposits in the Debt
Service Reserve Account are at least equal to three months of Debt Service of
the applicable Tranche of Advances;


 


(vi)          Sixth, to the payment of any
prepayment premiums then due and payable with respect to such applicable
Tranche of Advances pursuant to Section 2.07(c)(vi);


 


(vii)         Seventh, to the ratable payment
of any other unreimbursed indemnities for which any Mandated Lead Arranger, any
Joint Bookrunner, any Agent or any Secured Party is to be indemnified pursuant
to this Agreement or any other Loan Document, in each case that are then due
and payable;


 


(viii)        Eighth, to the payment of any
Permitted Capital Expenditures;


 


(ix)           Ninth, 50% of the remaining
balance (the “Excess Cash Flow”) shall be applied as a mandatory
prepayment in accordance with Section 2.07(c)(i);


 


(x)            Tenth, to the ratable
repayment of the applicable Tranche of all outstanding Revolving Advances; and


 


(xi)           Eleventh, any excess shall be
remitted to the Earnings Account.


 


(b)           From and during the continuance of
any Event of Default, any monies or property actually received by the Facility
Agent or the Collateral Agent pursuant to this Agreement or any other Loan
Document, the exercise of any rights or remedies under any Security Document or
any other agreement with any Borrower, any Guarantor or any of their
Subsidiaries which secures any of the Obligations, shall be applied in the
following order:


 


(i)            First, to payment of the
reasonable expenses, liabilities, losses, costs, duties, fees, charges or other
moneys whatsoever (together with interest payable thereon) as may have been
paid or incurred in, about or incidental to any sale or other realization of
Collateral, including reasonable compensation to the Collateral Agent and its
agents and counsel, and to the ratable payment of any other unreimbursed
reasonable expenses and indemnities for which any Mandated Lead Arranger, any
Joint Bookrunner, any Agent or any Secured Party is to be reimbursed pursuant
to this Agreement or any other Loan Document, in each case that are then due
and payable;


 


(ii)           Second, to the ratable payment
of accrued but unpaid fees of the Facility Agent, commitment fees, letter of
credit fees, and fronting fees owing to the Facility Agent, the Issuing Banks,
and the Lenders in respect of the Advances and Letters of Credit under this
Agreement;


 


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(iii)          Third, to the ratable payment
of accrued but unpaid interest on the Advances and any Obligations owing to any
Swap Counterparty under any Swap Contract, including, without limitation, Swap
Termination Value, then due and payable under this Agreement on a pari passu basis;


 


(iv)          Fourth, ratably, according to
the then unpaid amounts thereof, without preference or priority of any kind
among them, to the ratable payment of all other Obligations then due and
payable which relate to Advances and Letters of Credit and which are owing to
the Facility Agent, the Collateral Agent, the Issuing Banks and the Lenders and
to the payment of all obligations of the Loan Parties owing to any Swap
Counterparty under any Swap Contract, including, without limitation, Swap
Termination Value, if any, then due and payable on a pari passu
basis;


 


(v)           Fifth, to the ratable payment
of all outstanding Obligations then due and payable; and


 


(vi)          Sixth, any excess after payment
in full of all Obligations shall be paid to any Borrower or any Loan Party as
appropriate or to such other Person who may be lawfully entitled to receive
such excess.


 


ARTICLE VIII

THE GUARANTY


 


Section 8.01           Liabilities Guaranteed.  Each Guarantor hereby, joint and severally,
irrevocably and unconditionally guarantees the prompt payment at maturity of
the Obligations.


 


Section 8.02           Nature of Guaranty.  This guaranty is an absolute, irrevocable,
completed and continuing guaranty of payment and not a guaranty of collection,
and no notice of the Obligations or any extension of credit already or
hereafter contracted by or extended to any Borrower need be given to any
Guarantor. This guaranty may not be revoked by any Guarantor and shall continue
to be effective with respect to the Obligations arising or created after any
attempted revocation by such Guarantor and shall remain in full force and
effect until the Obligations are paid in full and the Commitments are
terminated, notwithstanding that from time to time prior thereto no Obligations
may be outstanding. The Borrowers and the Lenders may modify, alter, rearrange,
extend for any period and/or renew from time to time, the Obligations, and the
Lenders may waive any Default or Events of Default without notice to any
Guarantor and in such event each Guarantor will remain fully bound hereunder on
the Obligations. This guaranty shall continue to be effective or be reinstated,
as the case may be, if at any time any payment of the Obligations is rescinded
or must otherwise be returned by any of the Lenders upon the insolvency,
bankruptcy or reorganization of any Borrower or otherwise, all as though such
payment had not been made. This guaranty may be enforced by the Facility Agent
and any subsequent holder of any of the Obligations and shall not be discharged
by the assignment or negotiation of all or part of the Obligations. Each
Guarantor hereby expressly waives presentment, demand, notice of non-payment,
protest and notice of protest and dishonor, notice of Default or Event of
Default, and also notice of acceptance of this guaranty, acceptance on the 


 


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part of the Lenders being
conclusively presumed by the Lenders’ request for this guaranty and the
Guarantors’ being party to this Agreement.


 


Section 8.03           Agent’s Rights.  Each Guarantor authorizes the Facility Agent,
without notice or demand and without affecting any Guarantor’s liability
hereunder, to take and hold security for the payment of its obligations under
this Article VIII and/or the Obligations, and exchange, enforce,
waive and release any such security; and to apply such security and direct the
order or manner of sale thereof as the Facility Agent in its discretion may
determine, and to obtain a guaranty of the Obligations from any one or more
Persons and at any time or times to enforce, waive, rearrange, modify, limit or
release any of such other Persons from their obligations under such guaranties.


 


Section 8.04           Guarantor’s
Waivers.


 


(a)           General.  Each Guarantor waives any right to require
any of the Lenders to (i) proceed against any Borrower or any other person
liable on the Obligations, (ii) enforce any of their rights against any
other guarantor of the Obligations, (iii) proceed or enforce any of their
rights against or exhaust any security given to secure the Obligations, (iv) have
any Borrower joined with any Guarantor in any suit arising out of this Article VIII
and/or the Obligations, or (v) pursue any other remedy in the Lenders’
powers whatsoever. The Lenders shall not be required to mitigate damages or
take any action to reduce, collect or enforce the Obligations. Guarantor waives
any defense arising by reason of any disability, lack of corporate authority or
power, or other defense of any Borrower or any other guarantor of the
Obligations, and shall remain liable hereon regardless of whether any Borrower
or any other guarantor be found not liable thereon for any reason. Whether and
when to exercise any of the remedies of the Lenders under any of the Loan
Documents shall be in the sole and absolute discretion of the Facility Agent,
acting upon the written request or with the consent of the Majority Lenders,
and no delay by the Facility Agent in enforcing any remedy, including delay in
conducting a foreclosure sale, shall be a defense to any Guarantor’s liability
under this Article VIII.


 


(b)           In addition to the waivers contained
in Section 8.04(a) hereof, the Guarantors waive, and agree
that they shall not at any time insist upon, plead or in any manner whatsoever
claim or take the benefit or advantage of, any appraisal, valuation, stay,
extension, marshaling of assets or redemption laws, or exemption, whether now
or at any time hereafter in force, which may delay, prevent or otherwise affect
the performance by the Guarantors of their obligations under, or the
enforcement by the Facility Agent or the Lenders of, this Guaranty.  The Guarantors hereby waive diligence,
presentment and demand (whether for nonpayment or protest or of acceptance,
maturity, extension of time, change in nature or form of the Obligations,
acceptance of further security, release of further security, composition or
agreement arrived at as to the amount of, or the terms of, the Obligations,
notice of adverse change in any Borrower’s financial condition or any other
fact which might materially increase the risk to the Guarantors) with respect
to any of the Obligations or all other demands whatsoever and waive the benefit
of all provisions of law which are or might be in conflict with the terms of
this Article VIII.  The
Guarantors, jointly and severally, represent, warrant and agree that, as of the
date of this Guaranty, their obligations under this Guaranty are not subject to
any offsets or defenses of any kind against the Administrative Agent, the
Lenders, any Borrower or any other Person that executes a Loan Document.  The Guarantors further jointly and severally
agree that their 


 


104

















 


obligations under this
Guaranty shall not be subject to any counterclaims, offsets or defenses of any
kind which may arise in the future against the Administrative Agent, the
Lenders, the Borrowers or any other Person that executes a Loan Document.


 


(c)           Subrogation.  Until the Obligations have been paid in full,
each Guarantor waives all rights of subrogation or reimbursement against any
Borrower, whether arising by contract or operation of law (including, without
limitation, any such right arising under any federal or state bankruptcy or
insolvency laws) and waives any right to enforce any remedy which the Lenders
now have or may hereafter have against any Borrower, and waives any benefit or
any right to participate in any security now or hereafter held by the Facility
Agent or any Lender.


 


Section 8.05           Maturity of Obligations, Payment.  Each Guarantor agrees that if the maturity of
any of the Obligations is accelerated by bankruptcy or otherwise, such maturity
shall also be deemed accelerated for the purpose of this Article VIII
without demand or notice to any Guarantor. Each Guarantor will, forthwith upon
notice from the Facility Agent, jointly and severally pay to the Facility Agent
the amount due and unpaid by any Borrower and guaranteed hereby. The failure of
the Facility Agent to give this notice shall not in any way release any
Guarantor hereunder.


 


Section 8.06           Agent’s Expenses.  If any Guarantor fails to pay the Obligations
after notice from the Facility Agent of any Borrower’s failure to pay any
Obligations at maturity, and if any Agent obtains the services of an attorney
for collection of amounts owing by any Guarantor hereunder, or obtaining advice
of counsel in respect of any of their rights under this Article VIII,
or if suit is filed to enforce this Article VIII, or if proceedings
are had in any bankruptcy, probate, receivership or other judicial proceedings
for the establishment or collection of any amount owing by any Guarantor
hereunder, or if any amount owing by any Guarantor hereunder is collected
through such proceedings, each Guarantor jointly and severally agrees to pay to
such Agent such Agent’s reasonable attorneys’ fees.


 


Section 8.07           Liability.  It is expressly agreed that the liability of
each Guarantor for the payment of the Obligations guaranteed hereby shall be
primary and not secondary.


 


Section 8.08           Events and Circumstances Not
Reducing or Discharging any Guarantor’s Obligations.  Each Guarantor hereby consents and agrees to
each of the following to the fullest extent permitted by law, and agrees that
each Guarantor’s obligations under this Article VIII shall not be
released, diminished, impaired, reduced or adversely affected by any of the
following, and waives any rights (including without limitation rights to
notice) which each Guarantor might otherwise have as a result of or in
connection with any of the following:


 


(a)           Modifications, etc.  Any renewal, extension, modification,
increase, decrease, alteration or rearrangement of all or any part of the
Obligations, or this Agreement or any instrument executed in connection
therewith, or any contract or understanding between any Borrower and any of the
Lenders, or any other Person, pertaining to the Obligations;


 


(b)           Adjustment, etc.  Any adjustment, indulgence, forbearance or
compromise that might be granted or given by any of the Lenders to any Borrower
or any Guarantor or any Person liable on the Obligations;


 


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(c)           Condition of any Borrower or any
Guarantor.  The insolvency,
bankruptcy arrangement, adjustment, composition, liquidation, disability,
dissolution, death or lack of power of any Borrower or any Guarantor or any
other Person at any time liable for the payment of all or part of the
Obligations; or any dissolution of any Borrower or any Guarantor, or any sale,
lease or transfer of any or all of the assets of any Borrower or any Guarantor,
or any changes in the shareholders, partners, or members of any Borrower or any
Guarantor; or any reorganization of any Borrower or any Guarantor;


 


(d)           Invalidity of Obligations.  The invalidity, illegality or unenforceability
of all or any part of the Obligations, or any document or agreement executed in
connection with the Obligations, for any reason whatsoever, including without
limitation the fact that the Obligations, or any part thereof, exceed the
amount permitted by law, the act of creating the Obligations or any part
thereof is ultra vires, the officers or representatives executing the documents
or otherwise creating the Obligations acted in excess of their authority, the
Obligations violate applicable usury laws, any Borrower has valid defenses,
claims or offsets (whether at law, in equity or by agreement) which render the
Obligations wholly or partially uncollectible from any Borrower, the creation,
performance or repayment of the Obligations (or the execution, delivery and
performance of any document or instrument representing part of the Obligations
or executed in connection with the Obligations, or given to secure the
repayment of the Obligations) is illegal, uncollectible, legally impossible or
unenforceable, or this Agreement or other documents or instruments pertaining
to the Obligations have been forged or otherwise are irregular or not genuine
or authentic;


 


(e)           Release of Obligors.  Any full or partial release of the liability
of any Borrower on the Obligations or any part thereof, of any co-guarantors,
or any other Person now or hereafter liable, whether directly or indirectly,
jointly, severally, or jointly and severally, to pay, perform, guarantee or
assure the payment of the Obligations or any part thereof, it being recognized,
acknowledged and agreed by any Guarantor that such Guarantor may be required to
pay the Obligations in full without assistance or support of any other Person,
and no Guarantor has been induced to enter into this Article VIII on
the basis of a contemplation, belief, understanding or agreement that other
parties other than any Borrower will be liable to perform the Obligations, or
the Lenders will look to other parties to perform the Obligations;


 


(f)            Other Security.  The taking or accepting of any other
security, collateral or guaranty, or other assurance of payment, for all or any
part of the Obligations;


 


(g)           Release of Collateral etc. Any
release, surrender, exchange, subordination, deterioration, waste, loss or
impairment (including without limitation negligent, willful, unreasonable or
unjustifiable impairment) of any collateral, property or security, at any time
existing in connection with, or assuring or securing payment of, all or any
part of the Obligations;


 


(h)           Care and Diligence.  The failure of the Lenders or any other
Person to exercise diligence or reasonable care in the preservation,
protection, enforcement, sale or other handling or treatment of all or any part
of such collateral, property or security;


 


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(i)            Status of Liens.  The fact that any collateral, security,
security interest or lien contemplated or intended to be given, created or
granted as security for the repayment of the Obligations shall not be properly
perfected or created, or shall prove to be unenforceable or subordinate to any
other security interest or lien, it being recognized and agreed by each
Guarantor that no Guarantor is entering into this Article VIII in
reliance on, or in contemplation of the benefits of, the validity, enforceability,
collectibility or value of any of the collateral for the Obligations;


 


(j)            Payments Rescinded.  Any payment by any Borrower to the Lenders is
held to constitute a preference under the bankruptcy laws, or for any reason
the Lenders are required to refund such payment or pay such amount to any
Borrower or someone else; or


 


(k)           Other Actions Taken or Omitted.  Any other action taken or omitted to be taken
with respect to this Agreement, the Obligations, or the security and collateral
therefor, whether or not such action or omission prejudices any Guarantor or
increases the likelihood that any Guarantor will be required to pay the
Obligations pursuant to the terms hereof, it being the unambiguous and
unequivocal intention of each Guarantor that each Guarantor shall be obligated
to joint and severally pay the Obligations when due, notwithstanding any
occurrence, circumstance, event, action, or omission whatsoever, whether
contemplated or uncontemplated, and whether or not otherwise or particularly
described herein, except for the full and final payment and satisfaction of the
Obligations.


 


Section 8.09           Subordination
of All Guarantor Claims.


 


(a)           As used herein, the term “Guarantor
Claims” shall mean all debts and liabilities of any Borrower or any Subsidiary
of any Borrower to any Guarantor, whether such debts and liabilities now exist
or are hereafter incurred or arise, or whether the obligation of such Borrower
or such Subsidiary thereon be direct, contingent, primary, secondary, several,
joint and several, or otherwise, and irrespective of whether such debts or
liabilities be evidenced by note, contract, open account, or otherwise, and
irrespective of the person or persons in whose favor such debts or liabilities
may, at their inception, have been, or may hereafter be created, or the manner
in which they have been or may hereafter be acquired by any Guarantor. The
Guarantor Claims shall include without limitation all rights and claims of any
Guarantor against any Borrower or any Subsidiary of such Borrower arising as a
result of subrogation or otherwise as a result of such Guarantor’s payment of
all or a portion of the Obligations. Until the Obligations shall be paid and
satisfied in full and each Guarantor shall have performed all of its
obligations hereunder, no Guarantor shall receive or collect, directly or
indirectly, from any Borrower or any Subsidiary of such Borrower or any other
party any amount upon the Guarantor Claims.


 


(b)           Each Borrower and each Guarantor
hereby (i) authorizes the Facility Agent and the Lenders to demand
specific performance of the terms of this Section 8.09, whether or
not any Borrower or any Guarantor shall have complied with any of the
provisions hereof applicable to it, at any time when it shall have failed to
comply with any provisions of this Section 8.09 which are
applicable to it and (ii) irrevocably waives any defense based on the
adequacy of a remedy at law, which might be asserted as a bar to such remedy of
specific performance.


 


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(c)           Upon any distribution of assets of
any Loan Party in any dissolution, winding up, liquidation or reorganization
(whether in bankruptcy, insolvency or receivership proceedings or upon an
assignment for the benefit of creditors or otherwise):


 


(i)            The Lenders shall first be entitled
to receive payment in full in cash of the Obligations before any Borrower or
any Guarantor is entitled to receive any payment on account of the Guarantor
Claims.


 


(ii)           Any payment or distribution of assets
of any Loan Party of any kind or character, whether in cash, property or
securities, to which the Borrower or any Guarantor would be entitled except for
the provisions of this Section 8.09(c), shall be paid by the
liquidating trustee or agent or other Person making such payment or
distribution directly to the Lenders, to the extent necessary to make payment
in full of all Obligations remaining unpaid after giving effect to any
concurrent payment or distribution or provisions therefor to the Lenders.


 


(d)           No right of the Lenders or any other
present or future holders of any Obligations to enforce the subordination
provisions herein shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of any Loan Party or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by any Borrower
or any Guarantor with the terms hereof, regardless of any knowledge thereof
which any such holder may have or be otherwise charged with.


 


Section 8.10           Claims in Bankruptcy.  In the event of receivership, bankruptcy,
reorganization, arrangement, debtor’s relief, or other insolvency proceedings
involving any Borrower or any Subsidiary thereof, as debtor, the Lenders shall
have the right to prove their claim in any proceeding, so as to establish their
rights hereunder and receive directly from the receiver, trustee or other court
custodian, dividends and payments which would otherwise be payable upon
Guarantor Claims.  Each Guarantor hereby
assigns such dividends and payments to the Lenders. Should the Facility Agent
or any Lender receive, for application upon the Obligations, any such dividend
or payment which is otherwise payable to any Guarantor, and which, as between
any Borrower or any Subsidiary thereof and any Guarantor, shall constitute a
credit upon the Guarantor Claims, then upon payment in full of the Obligations,
such Guarantor shall become subrogated to the rights of the Lenders to the
extent that such payments to the Lenders on the Guarantor Claims have contributed
toward the liquidation of the Obligations, and such subrogation shall be with
respect to that proportion of the Obligations which would have been unpaid if
the Facility Agent or a Lender had not received dividends or payments upon the
Guarantor Claims.


 


Section 8.11           Payments Held in Trust.  In the event that notwithstanding Sections
8.09 and 8.10 above, any Guarantor should receive any funds,
payments, claims or distributions which is prohibited by such Sections, such
Guarantor agrees to hold in trust for the Lenders an amount equal to the amount
of all funds, payments, claims or distributions so received, and agrees that it
shall have absolutely no dominion over the amount of such funds, payments,
claims or distributions except to pay them promptly to the Facility Agent, and
each Guarantor covenants promptly to pay the same to the Facility Agent.


 


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Section 8.12           Benefit of Guaranty.  The provisions of this Article VIII
are for the benefit of the Secured Parties, their successors, and their
permitted transferees, endorsees and assigns. 
In the event all or any part of the Obligations are transferred,
endorsed or assigned by the Lenders, as the case may be, to any Person or
Persons in accordance with the terms of this Agreement, any reference to the
“Lenders” herein, as the case may be, shall be deemed to refer equally to such
Person or Persons.


 


Section 8.13           Reinstatement.  This Article VIII shall remain in
full force and effect and continue to be effective in the event any petition is
filed by or against any Borrower, any Guarantor or any other Loan Party for
liquidation or reorganization, in the event that any of them becomes insolvent
or makes an assignment for the benefit of creditors or in the event a receiver,
trustee or similar Person is appointed for all or any significant part of any
of their assets, and shall continue to be effective or be reinstated, as the
case may be, if at any time payment and performance of the Obligations, or any
part thereof, is, pursuant to applicable law, rescinded or reduced in amount,
or must otherwise be restored or returned by the Lenders, whether as a
“voidable preference,” “fraudulent conveyance,” or otherwise, all as though
such payment or performance had not been made. 
In the event that any payment, or any part thereof, is rescinded,
reduced, restored or returned, the Obligations shall be reinstated and deemed
reduced only by such amount paid and not so rescinded, reduced, restored or
returned.


 


Section 8.14           Liens Subordinate.  Each Guarantor agrees that any liens,
security interests, judgment liens, charges or other encumbrances upon any
Borrower’s or any of its Subsidiary’s assets securing payment of the Guarantor
Claims shall be and remain inferior and subordinate to any liens, security
interests, judgment liens, charges or other encumbrances upon any Borrower’s or
any Subsidiary of such Borrower’s assets securing payment of the Obligations,
regardless of whether such encumbrances in favor of any Guarantor, the Facility
Agent or the Lenders presently exist or are hereafter created or attach.


 


Section 8.15           Guarantor’s Enforcement Rights.  Without the prior written consent of the
Lenders, no Guarantor shall (a) exercise or enforce any creditor’s right
it may have against any Borrower or any Subsidiary of such Borrower, or (b) foreclose,
repossess, sequester or otherwise take steps or institute any action or
proceeding (judicial or otherwise, including without limitation the
commencement of or joinder in any liquidation, bankruptcy, rearrangement,
debtor’s relief or insolvency proceeding) to enforce any lien, mortgages, deeds
of trust, security interest, collateral rights, judgments or other encumbrances
on assets of any Borrower or any Subsidiary of such Borrower held by Guarantor.


 


Section 8.16           Limitation.  It is the intention of the Guarantors and
each Secured Party that the amount of the Obligations guaranteed by each
Guarantor shall be in, but not in excess of, the maximum amount permitted by
fraudulent conveyance, fraudulent transfer and similar Legal Requirement
applicable to such Guarantor. Accordingly, notwithstanding anything to the
contrary contained in this Article VIII or in any other agreement
or instrument executed in connection with the payment of any of the Obligations
guaranteed hereby, the amount of the Obligations guaranteed by a Guarantor
under this Article VIII shall be limited to an aggregate amount
equal to the largest amount that would not render such Guarantor’s obligations
hereunder subject to avoidance under Section 548 of the United States
Bankruptcy Code or any comparable provision of any other applicable law.


 


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Section 8.17           Contribution
Rights.


 


(a)           To the extent that any payment is
made under this Guaranty (a “Guarantor Payment”), by a Guarantor, which
Guarantor Payment, taking into account all other Guarantor Payments then
previously or concurrently made by all other Guarantors, exceeds the amount
which such Guarantor would otherwise have paid if each Guarantor had paid the
aggregate Obligations satisfied by such Guarantor Payment in the same
proportion that such Guarantor’s Allocable Amount (as defined below) (in effect
immediately prior to such Guarantor Payment) bore to the aggregate Allocable
Amounts of all of the Guarantors in effect immediately prior to the making of
such Guarantor Payment, then, following the date on which the Obligations shall
be paid and satisfied in full and each Guarantor shall have performed all of
its obligations hereunder, such Guarantor shall be entitled to receive
contribution and indemnification payments from, and be reimbursed by, each of
the other Guarantors for the amount of such excess, pro rata based upon their
respective Allocable Amounts in effect immediately prior to such Guarantor
Payment.


 


(b)           As of any date of determination, the
“Allocable Amount” of any Guarantor shall be equal to the maximum amount of the
claim which could then be recovered from such Guarantor under this Guaranty
without rendering such claim voidable or avoidable under Section 548 of
Chapter 11 of the Bankruptcy Code or under any applicable state Uniform
Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute
or common law.


 


(c)           This Section 8.17 is
intended only to define the relative rights of the Guarantors and nothing set
forth in this Section 8.17 is intended to or shall impair the
obligations of the Guarantors, jointly and severally, to pay any amounts as and
when the same shall become due and payable in accordance with the terms of this
Guaranty.


 


(d)           The rights of the parties under this Section 8.17
shall be exercisable upon the date the Obligations shall be paid and satisfied
in full and each Guarantor shall have performed all of its obligations
hereunder.


 


(e)           The parties hereto acknowledge that
the right of contribution and indemnification hereunder shall constitute assets
of any Guarantor to which such contribution and indemnification is owing.


 


ARTICLE IX

THE AGENTS AND THE ISSUING BANKS


 


Section 9.01           Appointment and Authority.  Each of the Lenders and the Issuing Banks
hereby irrevocably appoints Natixis to act on its behalf as the Facility Agent
and the Collateral Agent hereunder and under the other Loan Documents and
authorizes the Agents to take such actions on its behalf and to exercise such
powers as are delegated to such Agent by the terms hereof or thereof, together
with such actions and powers as are reasonably incidental thereto, including
but not limited to the execution of Security Documents on behalf of the Secured
Parties. The provisions of this Article are solely for the benefit of the
Agents, the Lenders and 


 


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the Issuing Banks, and
none of the Borrowers nor any other Loan Party shall have rights as a third
party beneficiary of any of such provisions.


 


Section 9.02           Rights as a Lender.  The Person serving as an Agent hereunder
shall have the same rights and powers in its capacity as a Lender as any other
Lender and may exercise the same as though it were not an Agent and the term
“Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the
context otherwise requires, include the Person serving as an Agent hereunder in
its individual capacity. Such Person and its Affiliates may accept deposits
from, lend money to, act as the financial advisor or in any other advisory
capacity for and generally engage in any kind of business with the Borrowers or
any Subsidiary or other Affiliate thereof as if such Person were not an Agent
hereunder and without any duty to account therefor to the Lenders.


 


Section 9.03           Exculpatory Provisions.  The Agents shall not have any duties or
obligations except those expressly set forth herein and in the other Loan
Documents. Without limiting the generality of the foregoing, no Agent:


 


(a)           shall be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing;


 


(b)           shall have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby or by the other Loan Documents
that such Agent is required to exercise as directed in writing by the Majority
Lenders (or such other number or percentage of the Lenders as shall be expressly
provided for herein or in the other Loan Documents), provided that such Agent
shall not be required to take any action that, in its opinion or the opinion of
its counsel, may expose such Agent to liability or that is contrary to any Loan
Document or applicable law; and


 


(c)           shall, except as expressly set forth
herein and in the other Loan Documents, have any duty to disclose, and shall
not be liable for the failure to disclose, any information relating to the
Borrowers or any of their Affiliates that is communicated to or obtained by the
Person serving as Agent or any of its Affiliates in any capacity.


 


Neither Agent shall be liable for any action taken or
not taken by it (i) with the consent or at the written request of the
Majority Lenders (or such other number or percentage of the Lenders as shall be
necessary, or as such Agent shall believe in good faith shall be necessary,
under the circumstances as provided in Sections 10.01) or (ii) in
the absence of its own gross negligence or willful misconduct. Each Agent shall
be deemed not to have knowledge of any Default unless and until notice
describing such Default is given to such Agent by a Borrower, a Lender or an
Issuing Bank.


 


Neither Agent shall be responsible for or have any
duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with this Agreement or any other Loan
Document, (ii) the contents of any certificate, report or other document
delivered hereunder or thereunder or in connection herewith or therewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth herein or therein or the occurrence of any Default, (iv) the
validity, enforceability, effectiveness or genuineness of this 


 


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Agreement, any other Loan Document or any other
agreement, instrument or document or (v) the satisfaction of any condition
set forth in Article III or elsewhere herein, other than to confirm
receipt of items expressly required to be delivered to such Agent.


 


Section 9.04           Reliance by Agent.  Each Agent shall be entitled to rely upon,
and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing
(including any electronic message, Internet or intranet website posting or
other distribution) believed by it to be genuine and to have been signed, sent
or otherwise authenticated by the proper Person. Each Agent also may rely upon
any statement made to it orally or by telephone and believed by it to have been
made by the proper Person, and shall not incur any liability for relying
thereon. In determining compliance with any condition hereunder to the making
of an Advance, or the issuance of a Letter of Credit, that by its terms must be
fulfilled to the satisfaction of a Lender or an Issuing Bank, the Facility
Agent may presume that such condition is satisfactory to such Lender or such
Issuing Bank unless the Facility Agent shall have received notice to the
contrary from such Lender or such Issuing Bank prior to the making of such
Advance or the issuance of such Letter of Credit. Each Agent may consult with
legal counsel (who may be counsel for the Borrower), independent accountants
and other experts selected by it, and shall not be liable for any action taken
or not taken by it in accordance with the advice of any such counsel,
accountants or experts.


 


Section 9.05           Delegation of Duties.  Each Agent may perform any and all of its
duties and exercise its rights and powers hereunder or under any other Loan
Document by or through any one or more sub-agents appointed by such Agent. Each
Agent and any such sub-agent may perform any and all of its duties and exercise
its rights and powers by or through their respective Related Parties. The
exculpatory provisions of this Article shall apply to any such sub-agent
and to the Related Parties of such Agent and any such sub-agent, and shall
apply to their respective activities in connection with the syndication of the
credit facilities provided for herein as well as activities as an Agent.


 


Section 9.06           Resignation of Agents.  Either Agent may at any time give notice of
its resignation to the Lenders, the Issuing Banks and the Borrower. Upon
receipt of any such notice of resignation, the Majority Lenders shall have the
right, in consultation with the Borrowers, to appoint a successor, which shall
be a bank with an office in New York, or an Affiliate of any such bank with an
office in New York. If no such successor shall have been so appointed by the
Majority Lenders and shall have accepted such appointment within 30 days after
the retiring Agent gives notice of its resignation, then the retiring Agent may
on behalf of the Lenders and the Issuing Banks, appoint a successor Agent
meeting the qualifications set forth above provided that if the Agent shall
notify the Borrowers and the Lenders that no qualifying Person has accepted
such appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (1) the retiring Agent shall be discharged
from its duties and obligations hereunder and under the other Loan Documents
(except that in the case of any collateral security held by the Collateral
Agent on behalf of the Lenders or the Issuing Banks under any of the Loan
Documents, the retiring Collateral Agent shall continue to hold such collateral
security until such time as a successor Collateral Agent is appointed) and (2) all
payments, communications and determinations provided to be made by, to or
through such Agent shall instead be made by or to each Lender and each Issuing
Bank directly, until such time as the Majority Lenders appoint a successor
Agent as provided for above in this paragraph. Upon 


 


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the acceptance of a
successor’s appointment as Agent hereunder, such successor shall succeed to and
become vested with all of the rights, powers, privileges and duties of the
retiring (or retired) Agent, and the retiring Agent shall be discharged from
all of its duties and obligations hereunder or under the other Loan Documents
(if not already discharged therefrom as provided above in this paragraph). The
fees payable by the Borrowers to a successor Agent shall be the same as those
payable to its predecessor unless otherwise agreed between the Borrowers and
such successor. After the retiring Agent’s resignation hereunder and under the
other Loan Documents, the provisions of this Article and Section 10.04
shall continue in effect for the benefit of such retiring Agent, its sub-agents
and their respective Related Parties in respect of any actions taken or omitted
to be taken by any of them while the retiring Agent was acting as Agent.


 


Any resignation by the
Facility Agent pursuant to this Section shall also constitute its
resignation as Issuing Bank.  Upon the
acceptance of a successor’s appointment as Facility Agent hereunder, (a) such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring Issuing Bank, (b) the retiring
Issuing Bank shall be discharged from all of their respective duties and
obligations hereunder or under the other Loan Documents, and (c) the
successor Issuing Bank shall issue letters of credit in substitution for the Letters
of Credit, if any, outstanding at the time of such succession or make other
arrangement satisfactory to the retiring Issuing Bank to effectively assume the
obligations of the retiring Issuing Bank with respect to such Letters of
Credit.


 


Section 9.07           Non-Reliance on Mandated Lead
Arrangers, Joint Bookrunners, Agents and Other Lenders.  Each Lender and Issuing Bank acknowledges
that it has, independently and without reliance upon any Mandated Lead
Arranger, any Joint Bookrunner, any Agent or any other Lender or any of their
Related Parties and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender and Issuing Bank also acknowledges that it will, independently
and without reliance upon any Mandated Lead Arranger, any Joint Bookrunner, any
Agent or any other Lender or any of their Related Parties and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or
based upon this Agreement, any other Loan Document or any related agreement or
any document furnished hereunder or thereunder.


 


Section 9.08           Indemnification.  WHETHER OR NOT THE
TRANSACTIONS CONTEMPLATED HEREBY ARE CONSUMMATED, THE LENDERS SEVERALLY AGREE
TO INDEMNIFY UPON DEMAND EACH MANDATED LEAD ARRANGER, EACH JOINT BOOKRUNNER,
EACH AGENT, EACH ISSUING BANK AND EACH RELATED PARTY OF ANY OF THE FOREGOING
(TO THE EXTENT NOT REIMBURSED BY THE LOAN PARTIES), ACCORDING TO THEIR
RESPECTIVE PRO RATA SHARES, AND HOLD HARMLESS EACH INDEMNITEE FROM AND AGAINST
ANY AND ALL INDEMNIFIED LIABILITIES IN ALL CASES, WHETHER OR NOT CAUSED BY OR
ARISING, IN WHOLE OR IN PART, OUT OF THE NEGLIGENCE OF ANY RELATED PARTY; PROVIDED,
HOWEVER THAT NO LENDER SHALL BE LIABLE FOR THE PAYMENT TO ANY RELATED
PARTY FOR ANY PORTION OF SUCH INDEMNIFIED LIABILITIES TO THE EXTENT DETERMINED
IN A FINAL, NONAPPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE
RESULTED FROM SUCH RELATED PARTY’S OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT; PROVIDED,
HOWEVER, THAT NO ACTION TAKEN IN ACCORDANCE WITH THE DIRECTIONS OF THE
MAJORITY LENDERS SHALL BE DEEMED TO CONSTITUTE GROSS NEGLIGENCE OR WILLFUL 


 


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MISCONDUCT FOR PURPOSES OF THIS
SECTION.  WITHOUT LIMITATION OF THE
FOREGOING, EACH LENDER AGREES TO REIMBURSE THE MANDATED LEAD ARRANGERS, THE
JOINT BOOKRUNNERS, THE AGENTS AND THE ISSUING BANKS PROMPTLY UPON DEMAND FOR
ITS RATABLE SHARE OF ANY OUT-OF-POCKET EXPENSES (INCLUDING ALL FEES, EXPENSES
AND DISBURSEMENTS OF ANY LAW FIRM OR OTHER EXTERNAL COUNSEL AND, WITHOUT
DUPLICATION, THE ALLOCATED COST OF INTERNAL LEGAL SERVICES AND ALL EXPENSES AND
DISBURSEMENTS OF INTERNAL COUNSEL) INCURRED BY ANY AGENT OR ANY ISSUING BANK IN
CONNECTION WITH THE PREPARATION, EXECUTION, DELIVERY, ADMINISTRATION,
MODIFICATION, AMENDMENT, 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 LOAN DOCUMENT, TO THE EXTENT THAT SUCH AGENT
OR SUCH ISSUING BANK IS NOT REIMBURSED FOR SUCH BY THE LOAN PARTIES.  THE UNDERTAKING IN THIS SECTION SHALL
SURVIVE TERMINATION OF THE COMMITMENTS, THE PAYMENT OF ALL OTHER OBLIGATIONS
AND THE RESIGNATION OF ANY AGENT.


 


Section 9.09           Collateral
and Guaranty Matters.


 


(a)           The Secured Parties irrevocably
authorize the Collateral Agent, at its option and in its discretion, without
the necessity of any notice to or further consent from the Secured Parties:


 


(i)            to release any Lien on any property
granted to or held by the Collateral Agent under any Security Document (x) upon
termination of the Commitments and payment in full of all Obligations (other
than contingent indemnification obligations) and the expiration or termination
of all Letters of Credit, (y) that is sold or to be sold as part of or in
connection with any sale permitted hereunder or under any other Loan Document,
or (z) subject to Section 10.01, if approved, authorized or
ratified in writing by all of the Lenders;


 


(ii)           to take any actions, including
execution on behalf of the Secured Parties, with respect to any Collateral or
Security Documents which may be necessary to perfect and maintain Acceptable
Security Interests in and Liens upon the Collateral granted pursuant to the
Security Documents.


 


(iii)          to take any action in exigent
circumstances as may be reasonably necessary to preserve any rights or
privileges of the Secured Parties under the Loan Documents or applicable Legal
Requirements.


 


(b)           Upon the written request of the
Collateral Agent at any time, the Lenders will confirm in writing the
Collateral Agent’s authority to release particular types or items of Collateral
pursuant to this Section 9.09.


 


(c)           Each Loan Party hereby irrevocably
appoints the Collateral Agent as such Loan Party’s attorney-in-fact, with full
authority to, after the occurrence of a Default, act for such Loan Party and in
the name of such Loan Party to, in the Collateral Agent’s discretion upon the
occurrence and during the continuance of Default, file one or more financing or
continuation 


 


114

















 


statements, and
amendments thereto, relative to all or any part of the Collateral without the
signature of such Loan Party where permitted by law, to receive, endorse, and
collect any drafts or other instruments, documents, and chattel paper which are
part of the Collateral, and to ask, demand, collect, sue for, recover,
compromise, receive, and give acquittance and receipts for moneys due and to
become due under or in respect of any of the Collateral and to file any claims
or take any action or institute any proceedings which the Collateral Agent may
reasonably deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce the rights of the Collateral Agent with
respect to any of the Collateral.  The
power of attorney granted hereby is coupled with an interest and is irrevocable.


 


(d)           If any Loan Party fails to perform
any covenant contained in this Agreement or the other Security Documents, the
Collateral Agent may itself perform, or cause performance of, such covenant,
and such Loan Party shall pay for the expenses of the Collateral Agent incurred
in connection therewith in accordance with Section 10.04.


 


(e)           The powers conferred on the
Collateral Agent under this Agreement and the other Security Documents are
solely to protect its interest in the Collateral and shall not impose any duty
upon it to exercise any such powers. 
Beyond the safe custody thereof, each Agent and each Lender shall have
no duty with respect to any Collateral in its possession or control (or in the
possession or control of any agent or bailee) or with respect to any income
thereon or the preservation of rights against prior parties or any other rights
pertaining thereto. The Collateral Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which the Collateral Agent accords its own property.  Neither Agent nor any Lender shall be liable
or responsible for any loss or damage to any of the Collateral, or for any
diminution in the value thereof, by reason of the act or omission of any
warehouseman, carrier, forwarding agency, consignee, broker or other agent or
bailee selected by Borrower or selected by any Agent in good faith.


 


Section 9.10           No Other Duties, etc.  Anything herein to the contrary
notwithstanding, none of the Joint Bookrunners, Mandated Lead Arrangers,
Documentation Agent or Syndication Agent listed on the cover page hereof
shall have any powers, duties or responsibilities under this Agreement or any
of the other Loan Documents, except in its capacity, as applicable, as the
Facility Agent, Collateral Agent, a Lender or an Issuing Bank.


 


ARTICLE X

MISCELLANEOUS


 


Section 10.01         Amendments, Etc.  No amendment or waiver of any provision of
this Agreement or any other Loan Document (other than the Fee Letters), and no
consent to any departure by any Borrower or any other Loan Party therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Majority Lenders and the Borrowers, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment, waiver or
consent shall:


 


115

















 


(a)           waive any condition set forth in Article III
(other than Sections 3.02(d) and (e)) without the written
consent of each Lender;


 


(b)           extend or increase the Commitment of
any Lender (or reinstate any Commitment terminated pursuant to Section 7.02)
without the written consent of such Lender or increase the Aggregate
Commitments, the Aggregate Term Commitments, the Aggregate Top-Up Commitments,
the Aggregate Revolving Commitments or the aggregate Tranche of any Commitment
without the written consent of each Lender;


 


(c)           postpone any date fixed by this
Agreement or any other Loan Document for any payment or mandatory prepayment of
principal, interest, fees or other amounts due to the Lenders (or any of them)
hereunder or under any other Loan Document without the written consent of each
Lender directly affected thereby;


 


(d)           reduce the principal of, or the rate
of interest specified herein on, any Advance or Reimbursement Obligation, or
(subject to clause (v) of the second proviso to this Section 10.01)
any fees or other amounts payable hereunder or under any other Loan Document,
or change the manner of computation of any financial ratio (including any
change in any applicable defined term) used in determining the Applicable
Margin that would result in a reduction of any interest rate on any Advance or
any fee payable hereunder without the written consent of each Lender directly
affected thereby; provided, however, that only the consent of the
Majority Lenders shall be necessary to waive any obligation of any Borrower to
pay interest at the Default Rate;


 


(e)           change Section 2.12 in a
manner that would alter the pro rata sharing of payments required thereby
without the written consent of each Lender;


 


(f)            change any provision of this Section or
the definition of “Majority Lenders”, “Super-Majority Lenders” or any other
provision hereof specifying the number or percentage of Lenders required to
amend, waive or otherwise modify any rights hereunder or make any determination
or grant any consent hereunder, without the written consent of each Lender;


 


(g)           release any Guarantor from its
guaranty of the Obligations or any of the Collateral without the written
consent of each Lender;


 


(h)           change the provisions of any Loan
Document in a manner that by its terms adversely affects the rights in respect
of payments due to Lenders holding one Class of Advances differently from
the rights in respect of payments due to Lenders holding another Class of
Advances without the prior written consent of each Lender;


 


(i)            amend Section 7.06
without the written consent of each Lender;


 


(j)            amend Sections 2.07(c) or
(d) or any definitions used therein without the written consent of
each Lender directly affected thereby;


 


(k)           agree to any extension of any
Delivery Date without the written consent of each Joint Bookrunner in
consultation with the Majority Lenders;


 


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and, provided further, that (i) no
amendment, waiver or consent shall, unless in writing and signed by the Issuing
Banks in addition to the Lenders required above, affect the rights or duties of
the Issuing Banks under this Agreement or any Letter of Credit Application
relating to any Letter of Credit issued or to be issued by it; (ii) no
amendment, waiver or consent shall, unless in writing and signed by the
Facility Agent in addition to the Lenders required above, affect the rights or
duties of the Facility Agent under this Agreement or any other Loan Document; (iii) Section 10.06(g) may
not be amended, waived or otherwise modified without the consent of each
Granting Lender all or any part of whose Advances are being funded by an SPC at
the time of such amendment, waiver or other modification; (iv) either Fee
Letter may be amended, or rights or privileges thereunder waived, in a writing
executed only by the parties thereto; (v) Schedule 1.01(a) may
be modified at any time by the Majority Lenders; (vi) the Rig Construction
Contracts may be amended, modified, or supplemented at any time with the
consent of the Facility Agent acting upon instruction from the Majority Lenders
and (vii) Section 3.02(d) and Section 3.02(e) may
be modified at any time by the Joint Bookrunners in consultation with the
Majority Lenders.


 


Section 10.02         Notices,
Etc.


 


(a)           General.  Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in paragraph (c) below), all notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail, sent by
telecopier or (subject to subsection (c) below) electronic mail address as
follows:


 


(i)            if to the Borrowers or any other
Loan Party, the Facility Agent or the Issuing Banks, to the address, facsimile
number, electronic mail address or telephone number specified for such Person
on Schedule 10.02 or to such other address, facsimile number, electronic
mail address or telephone number as shall be designated by such party in a
notice to the other parties; and


 


(ii)           if to any other Lender, to the
address, facsimile number, electronic mail address or telephone number
specified in its Administrative Questionnaire or to such other address,
facsimile number, electronic mail address or telephone number as shall be
designated by such party in a notice to the Facility Agent.


 


Notices sent by hand or
overnight courier service, or mailed by certified or registered mail, shall be
deemed to have been given when received; notices sent by telecopier shall be
deemed to have been given when sent (except that, if not given during normal
business hours for the recipient, shall be deemed to have been given at the
opening of business on the next business day for the recipient). Notices
delivered through electronic communications to the extent provided in paragraph
(c) below, shall be effective as provided in said paragraph (c).  In no event shall a voicemail message be
effective as a notice, communication or confirmation hereunder.


 


(b)           Effectiveness of Facsimile
Documents and Signatures.  Loan
Documents may be transmitted and/or signed by facsimile.  The effectiveness of any such documents and
signatures shall, subject to applicable Legal Requirements, have the same force
and effect as manually-signed originals and shall be binding on all Loan
Parties, the Facility Agent and the Lenders. 



 


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The Facility Agent may
also require that any such documents and signatures be confirmed by a
manually-signed original thereof; provided, however, that the
failure to request or deliver the same shall not limit the effectiveness of any
facsimile document or signature.


 


(c)           Limited Use of Electronic Mail.  Notices and other communications to the
Lenders and the Issuing Banks hereunder may be delivered or furnished by
electronic communication (including e-mail and Internet or intranet websites)
pursuant to procedures approved by the Facility Agent, provided that the
foregoing shall not apply to notices to any Lender or any Issuing Bank pursuant
to Article II if such Lender or Issuing Bank, as applicable, has
notified the Facility Agent that it is incapable of receiving notices under
such Article by electronic communication. The Facility Agent or the
Borrowers may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may
be limited to particular notices or communications. Unless the Facility Agent
otherwise prescribes, (i) notices and other communications sent to an
e-mail address shall be deemed received upon the sender’s receipt of an
acknowledgement from the intended recipient (such as by the “return receipt
requested” function, as available, return e-mail or other written
acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or
communications posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its e-mail
address as described in the foregoing clause (i) of notification that such
notice or communication is available and identifying the website address
therefor.


 


(d)           Reliance by Facility Agent and
Lenders.  The Facility Agent and the
Lenders shall be entitled to rely and act upon any notices (including
telephonic Borrowing Notices) purportedly given by or on behalf of any Borrower
even if (i) such notices were not made in a manner specified herein, were
incomplete or were not preceded or followed by any other form of notice
specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof.  EACH
BORROWER SHALL INDEMNIFY EACH MANDATED LEAD ARRANGER, EACH JOINT BOOKRUNNER,
EACH AGENT, EACH ISSUING BANK, EACH LENDER AND THEIR RELATED PARTIES FROM ALL
LOSSES, COSTS, EXPENSES AND LIABILITIES RESULTING FROM THE RELIANCE BY SUCH
PERSON ON EACH NOTICE PURPORTEDLY GIVEN BY OR ON BEHALF OF SUCH BORROWER.  All telephonic notices to and
other communications with the Facility Agent may be recorded by the Facility
Agent, and each of the parties hereto hereby consents to such recording.


 


Section 10.03         No Waiver; Cumulative Remedies.  No failure on the part of any Lender or any
Agent to exercise, and no delay by any such Person in exercising, any right,
remedy, power or privilege hereunder 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, remedy, power or
privilege.  The rights, remedies, powers
and privileges herein provided in this Agreement are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.


 


Section 10.04         Costs and Expenses.  Each Borrower shall pay (i) all
reasonable out-of-pocket expenses incurred by the Mandated Lead Arrangers, the
Joint Bookrunners, the Agents 


 


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and their Affiliates
(including the reasonable fees, charges and disbursements of counsel for any
Joint Bookrunner or Agent), and shall pay all fees and time charges and
disbursements for attorneys who may be employees of any Joint Bookrunner or any
Agent, in connection with the syndication of the credit facilities provided for
herein, the preparation, negotiation, execution, delivery and administration of
this Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all reasonable
out-of-pocket expenses incurred by the Issuing Banks in connection with the
issuance, amendment, renewal or extension of any Letter of Credit or any demand
for payment thereunder and (iii) all out-of-pocket expenses incurred by
any Mandated Lead Arranger, any Joint Bookrunner, any Agent, any Lender or any
Issuing Bank (including the fees, charges and disbursements of any counsel for
any Mandated Lead Arranger, any Joint Bookrunner, any Agent, any Lender or any
Issuing Bank), and shall pay all fees and time charges for attorneys who may be
employees of any Mandated Lead Arranger, any Joint Bookrunner, any Agent, any
Lender or any Issuing Bank, in connection with the enforcement or protection of
its rights (A) in connection with this Agreement and the other Loan
Documents, including its rights under this Section, or (B) in connection
with the Advances made or Letters of Credit issued hereunder, including all
such out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.  The foregoing costs and expenses shall
include all search, filing, recording, title insurance and appraisal charges
and fees and taxes related thereto, and other out-of-pocket expenses incurred
by any Mandated Lead Arranger, any Joint Bookrunner or any Agent and the cost
of independent public accountants and other outside experts retained by any
Mandated Lead Arranger, any Joint Bookrunner, any Agent or any Lender.  All amounts due under this Section 10.04
shall be payable within ten Business Days after demand therefor.  The agreements in this Section shall
survive the termination of the Commitments and repayment of all other
Obligations.


 


SECTION 10.05     Indemnification.  EACH BORROWER SHALL
INDEMNIFY EACH AGENT, EACH MANDATED LEAD ARRANGER, EACH JOINT BOOKRUNNER, EACH
LENDER, EACH ISSUING BANK, EACH OTHER SECURED PARTY, AND EACH RELATED PARTY OF
ANY OF THE FOREGOING PERSONS (EACH SUCH PERSON BEING CALLED AN “INDEMNITEE”)
AGAINST, AND HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND ALL LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, CLAIMS, DEMANDS, ACTIONS, JUDGMENTS,
SUITS, COSTS, EXPENSES, OR DISBURSEMENTS (INCLUDING ALL FEES, EXPENSES AND
DISBURSEMENTS OF ANY LAW FIRM OR OTHER EXTERNAL COUNSEL AND, WITHOUT
DUPLICATION, THE ALLOCATED COST OF INTERNAL LEGAL SERVICES AND ALL EXPENSES AND
DISBURSEMENTS OF INTERNAL COUNSEL) OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE
IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST ANY INDEMNITEE IN ANY WAY RELATING
TO OR ARISING OUT OF OR IN CONNECTION WITH (A) THE EXECUTION, DELIVERY,
ENFORCEMENT, PERFORMANCE, OR ADMINISTRATION OF THIS AGREEMENT, ANY LOAN
DOCUMENT, OR ANY OTHER AGREEMENT, LETTER OR INSTRUMENT DELIVERED IN CONNECTION
WITH THE TRANSACTIONS CONTEMPLATED THEREBY OR THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED THEREBY, (B) ANY COMMITMENT, ADVANCE OR LETTER
OF CREDIT OR THE USE OR PROPOSED USE OF THE PROCEEDS THEREFROM (INCLUDING ANY
REFUSAL BY AN ISSUING BANK TO HONOR A DEMAND FOR PAYMENT UNDER A LETTER OF
CREDIT IF THE DOCUMENTS PRESENTED IN CONNECTION WITH SUCH DEMAND DO NOT
STRICTLY COMPLY WITH THE TERMS OF SUCH LETTER OF CREDIT), (C) ANY ACTION
TAKEN OR OMITTED BY ANY AGENT OR ANY ISSUING BANK UNDER 


 


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THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT (INCLUDING SUCH AGENT’S AND SUCH ISSUING BANK’S OWN NEGLIGENCE), (D) ANY
ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS ON OR FROM ANY
PROPERTY CURRENTLY OR FORMERLY OWNED OR OPERATED BY ANY BORROWER, ANY
SUBSIDIARY OR ANY OTHER LOAN PARTY, OR ANY ENVIRONMENTAL LIABILITY RELATED IN
ANY WAY TO ANY BORROWER, ANY SUBSIDIARY OR ANY OTHER LOAN PARTY, OR (E) ANY
ACTUAL OR PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING
TO ANY OF THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY
(INCLUDING ANY INVESTIGATION OF, PREPARATION FOR, OR DEFENSE OF ANY PENDING OR
THREATENED CLAIM, INVESTIGATION, LITIGATION OR PROCEEDING) AND REGARDLESS OF
WHETHER ANY INDEMNITEE IS A PARTY THERETO (ALL THE FOREGOING, COLLECTIVELY, THE
“INDEMNIFIED LIABILITIES”); PROVIDED THAT SUCH INDEMNITY SHALL
NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, CLAIMS, DEMANDS, ACTIONS, JUDGMENTS,
SUITS, COSTS, EXPENSES OR DISBURSEMENTS ARE DETERMINED BY A COURT OF COMPETENT
JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM THE
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE.


 


TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, NO BORROWER SHALL
ASSERT, AND HEREBY WAIVES, ANY CLAIM AGAINST ANY INDEMNITEE, ON ANY THEORY OF
LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES (AS OPPOSED
TO DIRECT OR ACTUAL DAMAGES) ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT
OF, THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY AGREEMENT OR INSTRUMENT
CONTEMPLATED HEREBY, THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, ANY LOAN
OR LETTER OF CREDIT OR THE USE OF THE PROCEEDS THEREOF.  NO INDEMNITEE SHALL BE LIABLE FOR ANY DAMAGES
ARISING FROM THE USE BY UNINTENDED RECIPIENTS OF ANY INFORMATION OR OTHER
MATERIALS DISTRIBUTED BY IT THROUGH TELECOMMUNICATIONS, ELECTRONIC OR OTHER
INFORMATION TRANSMISSION SYSTEMS IN CONNECTION WITH THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.


 


ALL AMOUNTS DUE UNDER THIS SECTION 10.05 SHALL BE PAYABLE
WITHIN TEN BUSINESS DAYS AFTER DEMAND THEREFOR. 
THE AGREEMENTS IN THIS SECTION SHALL SURVIVE THE RESIGNATION OF THE
FACILITY AGENT, THE REPLACEMENT OF ANY LENDER, THE TERMINATION OF THE
COMMITMENTS AND THE REPAYMENT, SATISFACTION OR DISCHARGE OF ALL THE OTHER
OBLIGATIONS.


 


Section 10.06         Successors
and Assigns.


 


(a)           Generally.  The terms and provisions of this Agreement
and the other Loan Documents shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted
hereby, except that no Borrower may assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of each
Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance
with the provisions of subsection (b) of this Section, (ii) by way of
participation in accordance with the provisions of subsection (d) of this
Section, (iii) by way of pledge or assignment of a security interest
subject to the restrictions of subsection (f) or (i) of this Section,
or (iv) to an SPC in accordance with the provisions of 


 


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subsection (h) of
this Section (and any other attempted assignment or transfer by any party
hereto shall be null and void).   Nothing
in this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in subsection (d) of
this Section and, to the extent expressly contemplated hereby, the
Indemnitees) any legal or equitable right, remedy or claim under or by reason
of this Agreement.


 


(b)           Assignments by Lenders.  Any Lender may assign to one or more Eligible
Assignees all or any portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitments, the
Advances owing to it, participations in Letter of Credit Obligations) at the
time owing to it; provided, however, that


 


(i)            except in the case of an assignment
of the entire remaining amount of the assigning Lender’s Commitment and the
Advances of the Class being assigned at the time owing to it or in the
case of an assignment to a Lender or an Affiliate of a Lender or an Approved
Fund (as defined in subsection (g) of this Section) with respect to a
Lender, the aggregate amount of the Commitments and Advances of such Lender of
the Class being assigned pursuant to each such assignment (determined as
of the date of the Assignment and Acceptance with respect to such assignment)
shall not be less than $5,000,000;


 


(ii)           the parties to each such assignment
shall execute and deliver to the Facility Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance; and


 


(iii)          each Eligible Assignee (other than an
Eligible Assignee that is a Lender or an Affiliate of a Lender) shall pay to
the Facility Agent a $3,500 processing and recording fee.  Any such assignment must be ratable as among
the Tranches.


 


Upon such
execution, delivery, acceptance and recording thereof by the Facility Agent
pursuant to paragraph (c) of this Section, from and after the effective
date specified in each Assignment and Acceptance, (A) the Eligible
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 assigning 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)
but shall continue to be entitled to the benefits of Sections 2.09, 2.11,
10.04 and 10.05 with respect to facts and circumstances occurring
prior to the effective date of such assignment. 
Any assignment or transfer by a Lender of rights or obligations under
this Agreement that does not comply with this subsection shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with subsection (d) of this Section.


 


(c)           Register.  The Facility Agent shall maintain at its
Applicable Lending Office a copy of each Assignment and Acceptance delivered to
and accepted by it and a register for the 


 


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recordation of the names
and addresses of the Lenders and the Commitments 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 each of the
Loan Parties, the Facility Agent, the Issuing Banks, 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 any Loan Party or any Lender at
any reasonable time and from time to time upon reasonable prior notice.


 


(d)           Participations.  Any Lender may at any time, without the
consent of, or notice to, any Borrower or the Facility Agent, sell
participations to any Person (other than a natural person, a Borrower or any of
the Borrowers’ Affiliates or Subsidiaries) (each, a “Participant”) in
all or a portion of such Lender’s rights and/or obligations under this
Agreement (including all or a portion of its Commitment and/or the Advances
(including such Lender’s participations in Letter of Credit Obligations) owing
to it); provided that (i) such Lender’s obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrowers, the Facility Agent 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.  Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that
such agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, waiver or other
modification described in the first proviso to Section 10.01 that
directly affects such Participant. 
Subject to subsection (e) of this Section, each Borrower agrees
that each Participant shall be entitled to the benefits of Sections 2.08,
2.09, 2.11, 10.04 and 10.05 to the same extent as
if it were a Lender and had acquired its interest by assignment pursuant to
subsection (b) of this Section.  To
the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 7.05  as though it
were a Lender, provided such Participant agrees to be subject to Section 2.12
as though it were a Lender.


 


(e)           A Participant shall not be entitled
to receive any greater payment under Section 2.09 or 2.11  than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Borrower’s prior
written consent.  A Participant that
would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 2.11 unless the Borrowers are notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrowers, to comply with Section 2.11(e) as
though it were a Lender.


 


(f)            Any Lender may at any time pledge or
assign a security interest in all or any portion of its rights under this
Agreement to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.


 


(g)           Notwithstanding anything to the
contrary contained herein, any Lender (a “Granting Lender”) may grant to
a special purpose funding vehicle identified as such in writing from time to
time by the Granting Lender to the Facility Agent and the Borrowers (an “SPC”)
the 


 


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option to provide all or
any part of any Advance that such Granting Lender would otherwise be obligated
to make pursuant to this Agreement; provided that (i) nothing
herein shall constitute a commitment by any SPC to fund any Advance, and (ii) if
an SPC elects not to exercise such option or otherwise fails to make all or any
part of such Advance, the Granting Lender shall be obligated to make such
Advance pursuant to the terms hereof. 
Each party hereto hereby agrees that (i) neither the grant to any
SPC nor the exercise by any SPC of such option shall increase the costs or
expenses or otherwise increase or change the obligations of the Borrowers under
this Agreement (including its obligations under Section 3.04), (ii) no
SPC shall be liable for any indemnity or similar payment obligation under this
Agreement for which a Lender would be liable, and (iii) the Granting
Lender shall for all purposes, including the approval of any amendment, waiver
or other modification of any provision of any Loan Document, remain the lender
of record hereunder.  The making of an
Advance by an SPC hereunder shall utilize the Commitment of the Granting Lender
to the same extent, and as if, such Advance were made by such Granting Lender.  In furtherance of the foregoing, each party
hereto hereby agrees (which agreement shall survive the termination of this
Agreement) that, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper or other senior debt of any
SPC, it will not institute against, or join any other Person in instituting
against, such SPC any bankruptcy, reorganization, arrangement, insolvency, or
liquidation proceeding under the laws of the United States or any State
thereof.  Notwithstanding anything to the
contrary contained herein, any SPC may (i) with notice to, but without
prior consent of the Borrowers and the Facility Agent and without paying any
processing fee therefor, assign all or any portion of its right to receive
payment with respect to any Advance to the Granting Lender and (ii) disclose
on a confidential basis any non-public information relating to its funding of
Advances to any rating agency, commercial paper dealer or provider of any
surety or Guarantee or credit or liquidity enhancement to such SPC.


 


(h)           Notwithstanding
anything to the contrary contained herein, any Lender that is a Fund may create
a security interest in all or any portion of the Loans owing to it and the
Note, if any, held by it to the trustee for holders of obligations owed, or
securities issued, by such Fund as security for such obligations or securities,
provided that unless and until such trustee actually becomes a Lender in
compliance with the other provisions of this Section 10.06, (i) no
such pledge shall release the pledging Lender from any of its obligations under
the Loan Documents and (ii) such trustee shall not be entitled to exercise
any of the rights of a Lender under the Loan Documents even though such trustee
may have acquired ownership rights with respect to the pledged interest through
foreclosure or otherwise.


 


Section 10.07         Confidentiality.  Each of the Facility Agent and the Lenders
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its and its Affiliates’
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to
the extent requested by any regulatory authority (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party hereto, (e) in
connection with the exercise of any remedies hereunder or under any other Loan
Document or any action or proceeding relating to this Agreement or any other
Loan Document or the enforcement of rights hereunder or 


 


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thereunder, (f) subject
to an agreement containing provisions substantially the same as those of this
Section, to (i) any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement or (ii) any actual or prospective counterparty (or its advisors)
to any swap or derivative transaction relating to any Loan Party and its
obligations, (g) with the consent of the Borrowers or (h) to the
extent such Information (x) becomes publicly available other than as a
result of a breach of this Section or (y) becomes available to the
Facility Agent or any Lender on a nonconfidential basis from a source other than
the Borrower.  For purposes of this
Section, “Information” means all information received from any Loan Party
relating to any Loan Party or any of their respective businesses, other than
any such information that is available to the Facility Agent or any Lender on a
nonconfidential basis prior to disclosure by any Loan Party, provided
that, in the case of information received from a Loan Party after the date
hereof, such information is clearly identified at the time of delivery as
confidential.  Any Person required to
maintain the confidentiality of Information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential
information.  The Borrowers hereby
acknowledge that (a) the Agents, the Joint Bookrunners and/or the Mandated
Lead Arrangers will make available to the Lenders materials and/or information
provided by or on behalf of the Borrowers hereunder (collectively, “Borrower
Materials”) by posting the Borrower Materials on IntraLinks or another
similar electronic system (the “Platform”) and (b) certain of the
Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive
material non-public information with respect to the Parent or its securities)
(each, a “Public Lender”).  Each of the Borrowers hereby agrees
that (w) all Borrower Materials that are to be made available to Public
Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum,
shall mean that the word “PUBLIC” shall appear prominently on the first page thereof;
(x) by marking Borrower Materials “PUBLIC,” the Borrowers shall be deemed
to have authorized the Agents, the Joint Bookrunners, the Mandated Lead
Arrangers and the Lenders to treat such Borrower Materials as not containing
any material non-public information with respect to the Borrowers or any
securities for purposes of United States Federal and state securities laws
(provided, however, that to the extent such Borrower Materials constitute
Information, they shall be treated as set forth in this Section 10.07);
(y) all Borrower Materials marked “PUBLIC” are permitted to be made
available through a portion of the Platform designated “Public Investor;” and (z) the
Agents, the Joint Bookrunners and the Mandated Lead Arrangers shall be entitled
to treat any Borrower Materials that are not marked “PUBLIC” as being suitable
only for posting on a portion of the Platform other than that which is
designated “Public Investor.”


 


Section 10.08         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 10.09         Survival of Representations, etc.  All representations and warranties made
hereunder and in any other Loan Document or other document delivered pursuant
hereto or thereto or in connection herewith or therewith shall survive the
execution and delivery hereof and thereof. 
Such representations and warranties have been or will be relied upon by
the Facility Agent and each Lender, regardless of any investigation made by the
Facility Agent or any Lender or on their behalf and notwithstanding that the
Facility Agent or any Lender may have 


 


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had notice or knowledge
of any Default at the time of any Advance, and shall continue in full force and
effect as long as any Advance or any other Obligation hereunder shall remain
unpaid or unsatisfied or any Letter of Credit shall remain outstanding.


 


Section 10.10         Severability.  If any provision of this Agreement or the
other Loan Documents is held to be illegal, invalid or unenforceable, (a) the
legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired
thereby and (b) the parties shall endeavor in good faith negotiations to
replace the illegal, invalid or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the illegal,
invalid or unenforceable provisions.  The
invalidity of a provision in a particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.


 


Section 10.11         Interest Rate Limitation.  Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under
the Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the “Maximum Rate”).  If the Facility Agent or any Lender shall
receive interest in an amount that exceeds the Maximum Rate, the excess
interest shall be applied to the principal of the Loans or, if it exceeds such
unpaid principal, refunded to the Borrower. 
In determining whether the interest contracted for, charged, or received
by the Facility Agent or a Lender exceeds the Maximum Rate, such Person may, to
the extent permitted by applicable Law, (a) characterize any payment that
is not principal as an expense, fee, or premium rather than interest, (b) exclude
voluntary prepayments and the effects thereof, and (c) amortize, prorate,
allocate, and spread in equal or unequal parts the total amount of interest
throughout the contemplated term of the Obligations hereunder.


 


Section 10.12         The Platform.  THE PLATFORM IS
PROVIDED “AS IS” AND “AS AVAILABLE.”  THE AGENT PARTIES (AS DEFINED BELOW)
DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE
ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR
OMISSIONS FROM THE BORROWER MATERIALS.  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 AGENT PARTY IN CONNECTION WITH
THE BORROWER MATERIALS OR THE PLATFORM.  In no event shall any
Agent or any of its Related Parties (collectively, the “Agent Parties”)
have any liability to the Loan Parties, any Lender or any other Person for
losses, claims, damages, liabilities or expenses of any kind (whether in tort,
contract or otherwise) arising out of the Borrowers’ or the Facility Agent’s
transmission of Borrower Materials through the Internet, except to the extent
that such losses, claims, damages, liabilities or expenses are determined by a
court of competent jurisdiction by a final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Agent Party;
provided, however, that in no event shall any Agent Party have any liability to
the Borrowers, any Lender or any other Person for indirect, special,
incidental, consequential or punitive damages (as opposed to direct or actual
damages).


 


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Section 10.13         Governing Law.  This Agreement and each of the other Loan Documents
shall be governed by and construed in accordance with the laws of the State of
New York and the applicable laws of the United States of America.


 


Section 10.14         SUBMISSION TO JURISDICTION.


 


(a)           ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK SITTING IN NEW YORK CITY OR OF THE UNITED STATES FOR THE
EASTERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH LOAN PARTY, THE FACILITY AGENT AND EACH LENDER CONSENTS, FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF
THOSE COURTS.  EACH LOAN PARTY, THE
FACILITY AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED
THERETO.  EACH LOAN PARTY, THE FACILITY
AGENT AND EACH LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR
OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW
OF SUCH STATE.


 


(b)           Each Loan Party has irrevocably
appointed CT Corporation System (the “Process Agent”), with an office on
the date hereof at 111 Eighth Ave., New York, New York, 10011, as its agent to
receive on its behalf and on behalf of its property service of copies of any
summons or complaint or any other process which may be served in any action.  Such service may be made by mailing or
delivering a copy of such process to such Loan Party in care of the Process
Agent at the Process Agent’s above address, and each Loan Party hereby
irrevocably authorizes and directs the Process Agent to accept such service on its
behalf.  As an alternative method of
service, each Loan Party also irrevocably consents to the service of any and
all process in any such action or proceeding by the mailing of copies of such
process to it at the address specified for it on the signature pages of
this Agreement.


 


(c)           Nothing in this Section 10.14
shall affect the right of any Agent or any other Lender to serve legal process
in any other manner permitted by law or affect the right of any Agent or any
Lender to bring any action or proceeding against any Loan Party (as a Borrower
or as a Guarantor) in the courts of any other jurisdiction.


 


Section 10.15         WAIVER OF JURY.  EACH PARTY
TO THIS AGREEMENT HEREBY EXPRESSLY AND IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN
DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS
OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE
TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS
AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN 


 


126

















 


EVIDENCE
OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL
BY JURY.


 


Section 10.16         ENTIRE AGREEMENT.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.  THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.


 


Section 10.17         Judgment
Currency.


 


(a)           The obligations of the Borrowers and
the other Loan Parties hereunder and under the other Loan Documents to make
payments in U.S. Dollars (the “Obligation Currency”) shall not be discharged
or satisfied by any tender or recovery pursuant to any judgment expressed in or
converted into any currency other than the Obligation Currency, except to the
extent that such tender or recovery results in the effective receipt by the
Facility Agent or a Lender or an Issuing Bank of the full amount of the
Obligation Currency expressed to be payable to the Facility Agent, such Lender
or such Issuing Bank under this Agreement or the other Loan Documents.  If, for the purpose of obtaining or enforcing
judgment against any Borrower or any other Loan Party or in any court or in any
jurisdiction, it becomes necessary to convert into or from any currency other
than the Obligation Currency (such other currency being hereinafter referred to
as the “Judgment Currency”) an amount due in the Obligation Currency,
the conversion shall be made at the rate of exchange (as quoted by the Facility
Agent or if the Facility Agent does not quote a rate of exchange on such
currency, by a known dealer in such currency designated by the Facility Agent)
determined, in each case, as of the date immediately preceding the day on which
the judgment is given (such Business Day being hereinafter referred to as the “Judgment
Currency Conversion Date”).


 


(b)           If there is a change in the rate of
exchange prevailing between the Judgment Currency Conversion Date and the date
of actual payment of the amount due, such Loan Party covenants and agrees to
pay, or cause to be paid, as a separate obligation and notwithstanding any
judgment, such additional amounts, if any (but in any event not a lesser
amount), as may be necessary to ensure that the amount paid in the Judgment
Currency, when converted at the rate of exchange prevailing on the date of
payment, will produce the amount of the Obligation Currency which could have
been purchased with the amount of Judgment Currency stipulated in the judgment
or judicial award at the rate of exchange prevailing on the Judgment Currency
Conversion Date.


 


(c)           For purposes of determining the rate
of exchange for this Section, such amounts shall include any premium and costs
payable in connection with the purchase of the Obligation Currency.


 


Section 10.18         USA
Patriot Act Notice.  Each Lender and
Agent (for itself and not on behalf of any Lender) hereby notifies the Loan
Parties that pursuant to the requirements of the USA Patriot Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2003)) (the “Act”), it
is required to obtain, verify and record information that identifies each Loan
Party, which information includes the name and address of such Loan Party and
other information that will 


 


127

















 


allow
such Lender or the Agent, as applicable, to identify the Loan Parties in
accordance with the Act. Each Loan Party shall, following a request by the
Agent or any Lender, provide all documentation and other information that the
Agent or such Lender reasonably requests in order to comply with its ongoing
obligations under applicable “know your customer” and anti-money laundering rules and
regulations, including the Act.


 


Section 10.19         Fee
Letters.  The Parent hereby assumes
the obligations, covenants and agreements of Vantage Energy under each of the
Fee Letters.


 


[Signature pages follow.]


 


128

















 


EXECUTED as of
date first set forth above.


 


	
   

  	
  BORROWERS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EMERALD DRILLER COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Paul A. Bragg

  
	
   

  	
   

  	
  Paul A. Bragg

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SAPPHIRE DRILLER COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Paul A. Bragg

  
	
   

  	
   

  	
  Paul A. Bragg

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AQUAMARINE DRILLER COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Paul A. Bragg

  
	
   

  	
   

  	
  Paul A. Bragg

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TOPAZ DRILLER COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Paul A. Bragg

  
	
   

  	
   

  	
  Paul A. Bragg

  
	
   

  	
   

  	
  Chief Executive Officer

  



 


 


Signature Page to Credit Agreement


 

















 


	
   

  	
  GUARANTORS:

  
	
   

  	
   

  	
   

  
	
   

  	
  VANTAGE DRILLING COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Paul A. Bragg

  
	
   

  	
   

  	
  Paul A. Bragg

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  OFFSHORE GROUP INVESTMENT 

  LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Paul A. Bragg

  
	
   

  	
   

  	
  Paul A. Bragg

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  VANTAGE ENERGY SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Paul A. Bragg

  
	
   

  	
   

  	
  Paul A. Bragg

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  VANTAGE INTERNATIONAL 

  MANAGEMENT CO.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Paul A. Bragg

  
	
   

  	
   

  	
  Paul A. Bragg

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  VANTAGE INTERNATIONAL PAYROLL 

  CO.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Paul A. Bragg

  
	
   

  	
   

  	
  Paul A. Bragg

  
	
   

  	
   

  	
  Chief Executive Officer

  



 


 


Signature Page to Credit Agreement


 

















 


	
   

  	
  VANTAGE DRILLER I CO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Paul A. Bragg

  
	
   

  	
   

  	
  Paul A. Bragg

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  VANTAGE DRILLER II CO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Paul A. Bragg

  
	
   

  	
   

  	
  Paul A. Bragg

  
	
   

  	
   

  	
  Chief Executive Officer

  



 


 


Signature Page to Credit Agreement


 

















 


	
   

  	
  AGENTS:

  
	
   

  	
   

  
	
   

  	
  NATIXIS, as Facility Agent and Collateral 

  Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Michel Degermann

  
	
   

  	
  Name:

  	
   Michel Degermann

  
	
   

  	
  Title:

  	
   Head of Shipping Finance

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Thomas Bodereau

  
	
   

  	
  Name:

  	
   Thomas Bodereau

  
	
   

  	
  Title:

  	
   VP

  
					



 


 


Signature Page to Credit Agreement


 

















 


	
   

  	
  JOINT BOOKRUNNERS:

  
	
   

  	
   

  
	
   

  	
  NATIXIS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Michel Degermann

  
	
   

  	
  Name:

  	
   Michel Degermann

  
	
   

  	
  Title:

  	
   Head of Shipping Finance

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas Bodereau

  
	
   

  	
  Name:

  	
   Thomas Bodereau

  
	
   

  	
  Title:

  	
   VP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FORTIS BANK S.A./N.V., NEW YORK BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric Chilton

  
	
   

  	
  Name:

  	
   Eric Chilton

  
	
   

  	
  Title:

  	
   Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ John G. Sullivan

  
	
   

  	
  Name:

  	
   John G. Sullivan

  
	
   

  	
  Title:

  	
   Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BTMU CAPITAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Cheryl A. Behan

  
	
   

  	
   

  	
   Cheryl A. Behan

  
	
   

  	
   

  	
   Senior Vice President

  
						



 


 


Signature Page to Credit Agreement


 

















 


	
   

  	
  LENDERS:

  
	
   

  	
   

  
	
   

  	
  FORTIS BANK S.A./N.V., NEW YORK BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric Chilton

  
	
   

  	
  Name:

  	
  Eric Chilton

  
	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John G. Sullivan

  
	
   

  	
  Name:

  	
  John G. Sullivan

  
	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NATIXIS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michel Degermann

  
	
   

  	
  Name:

  	
  Michel Degermann

  
	
   

  	
  Title:

  	
  Head of Shipping Finance

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas Bodereau

  
	
   

  	
  Name:

  	
  Thomas Bodereau

  
	
   

  	
  Title:

  	
  VP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BTMU CAPITAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Cheryl A. Behan

  
	
   

  	
   

  	
  Cheryl A. Behan

  
	
   

  	
   

  	
  Senior Vice President

  



 


 


Signature Page to Credit Agreement