Third Supplemental Agreement



 EXHIBIT 4.4 
  

Dated June 26, 2003  
  
 SMEDVIG RIG AS 
 as Borrower 
  
 THE
SEVERAL BANKS AND FINANCIAL INSTITUTIONS 
 listed in
Schedule 1 
 as Lenders 
  
 NORDEA BANK NORGE ASA (formerly known as 
 CHRISTIANIA BANK OG KREDITKASSE ASA) 
 CITIBANK, N.A. 
 DEN NORSKE BANK ASA 
 SKANDINAVISKA ENSKILDA BANKEN AB (PUBL.) 
 as Joint Arrangers  
  
 Den norske Bank ASA 
 as Facility
Agent 
  
 Nordea Bank Norge ASA 
 as Paying Agent 
  
 DEN NORSKE BANK ASA 
 as
Documentation Agent 
  
 DEN NORSKE
BANK ASA 
 as Security Trustee 
  

  
 Third Supplemental
Agreement to the 
 USD600,000,000 Reducing and Revolving 
 Credit Loan Facility 
 dated 10 May 2001 
  

  
 Stephenson Harwood 
 One St Paul’s Churchyard 
 London EC4M 8SH 
  
 Portions of this agreement have been omitted and filed separately 
 with the
Securities and Exchange Commission pursuant to a request for confidential treatment. 







 INDEX 
  

					
	Clause

	  	 Subject

	  	Page


			
	1.	  	 DEFINITIONS AND CONSTRUCTION
	  	2
			
	2.	  	 CONTINUING REPRESENTATIONS AND WARRANTIES
	  	2
			
	3.	  	 CONDITIONS PRECEDENT
	  	3
			
	4.	  	 AMENDMENT TO THE FACILITY AGREEMENT
	  	5
			
	5.	  	 MERGER WITH SMEDVIG DRILLSHIP I AS
	  	5
			
	6.	  	 FURTHER ASSURANCE
	  	6
			
	7.	  	 COSTS AND EXPENSES
	  	6
			
	8.	  	 COUNTERPARTS
	  	6
			
	9.	  	 NOTICES
	  	6
			
	10	  	 PROPER LAW AND JURISDICTION
	  	6

  

 -i- 








 This Third Supplemental Agreement to the Loan Agreement dated the
             day of 2003 is made by and between: 
  

	(1)	SMEDVIG RIG AS as Borrower; 

  

	(2)	THE SEVERAL BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1 as
Lenders; 

  

	(3)	NORDEA BANK NORGE ASA (formerly known as Christiania Bank og Kreditkasse ASA), CITIBANK, N.A.,
DEN NORSKE BANK ASA and SKANDINAVISKA ENSKILDA BANKEN AB (PUBL.) as Joint Arrangers; 

  

	(4)	DEN NORSKE BANK ASA as Facility Agent; 

  

	(5)	NORDEA BANK NORGE ASA as Paying Agent; 

  

	(6)	DEN NORSKE BANK ASA as Documentation Agent; and 

  

	(7)	DEN NORSKE BANK ASA as Security Trustee 

  
 WHEREAS:- 
  

	(A)	By a reducing and revolving credit loan facility agreement dated 10 May 2001 as supplemented by a first supplemental agreement dated 15 February 2002 and by a second supplemental
agreement dated 9 May 2003 (the “Facility Agreement”) the Lenders agreed to make available to the Borrower a secured reducing and revolving credit loan facility in the sum of up to six hundred million Dollars (USD600,000,000) for the
purposes and on the terms and conditions contained therein. 

  

	(B)	The Borrower wishes to amend the Facility Agreement further and has requested the consent of the Lenders, and in consideration of the premises the Lenders agree to grant consent on
the terms and conditions contained herein. 

  

	(C)	Pursuant to transfer certificates of even date herewith, certain Lenders have transferred their rights and interests as Lender under or by virtue of the Facility Agreement to
certain other Lenders and the Lenders have agreed to vary their Commitments so that the new Commitments will be as set out in Schedule 1 hereto. 

  

	(D)	The Borrower has requested, as a further amendment to the terms of the Facility Agreement, that the Lenders agree to the change of flag of “WEST
EPSILON” and “WEST ALPHA” from Liberian to Panamanian flag. 

  

 -1- 









	(E)	The Borrower wishes to merge with Smedvig Drillship I AS so that the assets, liabilities, rights and obligations of the Borrower will be assumed within 2003 by Smedvig Drillship I
AS which will then change its name to Smedvig Rig AS (the “Merger”), and has requested the consent of the Lenders to such merger. 

  

	(F)	This Agreement is supplemental to the Facility Agreement. 

  
 NOW THIS DEED WITNESSES As Follows:- 
  

	1.	Definitions and Construction 

  

	1.1	Terms and expressions not defined herein but whose meanings are defined in the Facility Agreement shall have the meanings set out therein. 

  
 In this Agreement the following words and expressions shall have the
following meanings:- 
  
 “Agreement” 

 
 the third supplemental agreement to the Facility Agreement; 

 
 “Borrower” 
  
 Smedvig Rig AS, a company incorporated under the laws of Norway with
registered number 979 193 416 and having its registered office and principal place of business at Finnestadveien 28, PO Box 110, N-4001 Stavanger, Norway; 
  
 “Facility Agreement” 
  
 the loan facility agreement as amended referred to in recital (A); 
  

	1.2	Clause headings are inserted for convenience of reference only and shall be ignored in the interpretation of this Agreement. 

  

	2.	Continuing Representations and Warranties 

  

	2.1	The Borrower represents and warrants to the Facility Agent and the Lenders that: 

  

	 	2.1.1	it has the power to enter into and perform this Agreement and has taken all necessary action to authorise the entry into and performance of this Agreement and will duly perform and
observe the terms hereof and thereof. 

  

	 	2.1.2	this Agreement constitutes the legal, valid and binding obligations of the Borrower, enforceable in accordance with its terms; 

  

 -2- 









	 	2.1.3	the entry into and performance of this Agreement and the transactions contemplated thereby do not and will not conflict with (i) any law or regulation or any official or judicial
order or (ii) the constitutional documents of the Borrower or (iii) any agreement or document to which the Borrower is a party or which is binding upon the Borrower, or any of its assets, nor result in the creation or imposition of any encumbrance
on any of its assets; 

  

	 	2.1.4	no Event of Default or Possible Event of Default would result from the execution of this Agreement or the performance of the Facility Agreement as amended by this Agreement.


  

	3.	Conditions Precedent 

  

	3.1	Subject to clauses 3.2 and 5 below, the Facility Agreement shall be amended as provided in clause 4 below upon the date (the “Effective Date”) on which the Facility Agent
gives notice to the Borrower that it is satisfied that the conditions which are set out below have been met to the satisfaction of the Facility Agent, namely that: 

  

	 	3.1.1	the Facility Agent has received in form and substance satisfactory to it this Agreement duly executed by all parties pursuant to such corporate authorisation (resolutions, powers of
attorney, signatory books) as is, in each case, satisfactory to the Facility Agent in its sole discretion; 

  

	 	3.1.2	the representations and warranties contained in Clause 2 (Continuing Representations and Warranties) of this Agreement are true and correct on and as of the Effective Date as if
each was made with respect to the facts and circumstances existing at such time; 

  

	 	3.1.3	no Event of Default or Possible Event of Default shall have occurred and be continuing or would result from the amendment of the Facility Agreement in accordance with this
Agreement; 

  

	 	3.1.4	the Facility Agent has received in form and substance satisfactory to it such legal opinions as it shall require, including, but not limited to, Danish, Norwegian, and Panamanian
opinions; 

  

	 	3.1.5	the Facility Agent has received for the account of the Lenders an amendment fee as set out in a separate fee letter agreement between the Borrower and the Joint Arrangers;


  

	 	3.1.6	the Facility Agent has received in form and substance satisfactory to it a first pledge of shares between the Guarantor as pledgor and the Security Trustee as pledgee in respect of
the shares in Smedvig Drillship I AS to be renamed Smedvig Rig AS; 

  

 -3- 









	 	3.1.7	the Facility Agent has received in form and substance satisfactory to it evidence of the filing with the Norwegian Ordinary Ship Registry in respect of the mortgage registered
against “West Venture” of all necessary documents in connection with the Merger; 

  

	 	3.1.8	the Facility Agent has received in form and substance satisfactory to it evidence of the filing with the Norwegian Registry of Business Enterprises in respect of the “Avtale om
Factoring” registered against the Borrower of all necessary documents in connection with the Merger; 

  

	 	3.1.9	the Facility Agent has received in form and substance satisfactory to it evidence of the filing with the Panamanian Shipping Registry in respect of the mortgage registered against
“West Epsilon” of all necessary documents, in connection with the Merger; 

  

	 	3.1.10	the Facility Agent has received in form and substance satisfactory to it evidence of the execution of West Alpha Assignment in respect of various agreements re: “West
Alpha”, together with all related documents; 

  

	 	3.1.11	the Borrower has executed a first preferred Panamanian mortgage over “West Epsilon” in form and substance satisfactory to the Facility Agent and such mortgage has been
registered in Panama in the relevant shipping registry; and 

  

	 	3.1.12	the Facility Agent has received a letter signed by the Borrower, the Guarantor and Smedvig Offshore AS which confirms that they agree that all references in the General Assignment
dated 11 May 2001 relating to “West Epsilon” and in the Assignment in respect of various agreements relating to “West Alpha” dated 2 June 2003 to “Liberia” should, from the Effective Date, be to “Panama”.


  
 PROVIDED THAT, so long as the Facility Agent
confirms that all remaining conditions precedent have been satisfied, the conditions precedent set out in 3.1.6 to 3.1.9 inclusive shall not be required to be satisfied in order for the Effective Date of this Agreement to have occurred if the Merger
has not taken place at the date of this Agreement. 
  

	3.2	Subject to Clause 5 hereof the Effective Date shall be a Banking Day on or before 30 June 2003. If the Effective Date shall not have occurred by close of business in London on that
day (or such later date as all parties may agree), this Agreement shall cease to have effect (unless the parties agree otherwise in writing) except for clauses 6, 9 and 10 below. 

  

 -4- 









	3.3	The conditions precedent set out in clause 3.1 above are for the sole benefit of the Lenders and accordingly the Facility Agent may (acting on behalf of the Lenders) waive all or
any of the same, unconditionally or on such conditions as it may in its sole discretion think fit. Any such waiver shall not limit or restrict any other rights of the Lenders in respect of the Facility Agreement. 

  

	4.	Amendment to the Facility Agreement 

  

	4.1	The parties hereto hereby agree that with effect from the Effective Date 

  

	 	4.1.1	the Facility Agreement shall be amended to read in accordance with the amended and restated facility agreement attached hereto as Appendix I and will continue to be binding upon
each of the parties thereto in accordance with its terms as so amended and restated; 

  

	 	4.1.2	all references to the Facility Agreement in the Security Documents shall be construed as references to the Facility Agreement as amended and restated by this agreement and all terms
used in such documents whose meanings are defined by reference to the Facility Agreement shall be defined by reference to the Facility Agreement as so amended and restated; and 

  

	 	4.1.3	all the Security Documents shall continue in full force and effect notwithstanding the execution of this agreement and, insofar as any of those Security Documents secures any
obligation under the Facility Agreement, it shall secure that obligation as the same may have been amended, varied or supplemented by this agreement. 

  

	4.2	Except as expressly varied herein all other terms of the Facility Agreement and all the Security Documents shall remain in full force and effect. 

  

	5.	Merger with Smedvig Drillship I AS 

  
 The Lenders hereby consent to the merger of Smedvig Drillship I AS with the Borrower SUBJECT TO receipt of a Norwegian and a supplementary Panamanian
legal opinion, each in form and substance satisfactory to the Facility Agent and subject to the conditions precedent set out in 3.1.6, 3.1.7, 3.1.8 and 3.1.9 being fulfilled to the satisfaction of the Facility Agent. 
  

 -5- 









	6.	Further Assurance 

  

	6.1	The Borrower hereby covenants that from time to time at the request of the Facility Agent it will execute and deliver to the Facility Agent or procure the execution and delivery to
the Facility Agent of any and all such documents as the Facility Agent shall deem necessary or desirable in its absolute discretion for giving full effect to this Agreement and for perfecting, protecting the value of or enforcing any security
granted to the Facility Agent under or pursuant to the Facility Agreement as amended by this Agreement. 

  

	7.	Costs and Expenses 

  

	7.1	All costs, expenses, internal and external legal fees, registration fees, taxes, stamp duties and all other charges and disbursements whatsoever incurred by the Facility Agent in
connection with the preparation, execution and administration and enforcement of this Agreement and any documents to be executed pursuant hereto shall be paid by the Borrower forthwith on demand by the Facility Agent on a full indemnity basis.


  

	8.	Counterparts 

  

	8.1	This Agreement may be executed in any number of counterparts all of which shall constitute but one and the same agreement. Execution by the parties hereto separately of one or more
counterpart(s) hereof shall be deemed to be due execution hereof by all the parties hereto, and such counterparts shall be deemed to be one single deed. 

  

	9.	Notices 

  

	9.1	The provisions of Clause 25 of the Facility Agreement shall apply to this Agreement. 

  

	10.	Proper Law and Jurisdiction 

  

	10.1	This Agreement shall be governed by and construed in accordance with the laws of England. The provisions of Clause 27 of the Facility Agreement in relation to the submission to
jurisdiction by the Borrower shall apply to this Agreement. 

  

 -6- 








 Execution Page 
  
 IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly executed as a Deed
on the day first written above. 
  

			
	The Borrower	  	 
		
	 EXECUTED and DELIVERED
	  	)
	 as a DEED by
	  	 
		
	 for and on behalf of
	  	)
	 SMEDVIG RIG AS
	  	)
	 in the presence of:-
	  	)
		
	 The Facility Agent
	  	 
		
	 EXECUTED and DELIVERED
	  	)
	 as a DEED by
	  	 
		
	 for and on behalf of
	  	)
	 DEN NORSKE BANK ASA
	  	)
	 in the presence of:-
	  	)
		
	 The Paying Agent
	  	 
		
	 EXECUTED and DELIVERED
	  	)
	 as a DEED by
	  	 
		
	 for and on behalf of
	  	)
	 NORDEA BANK NORGE ASA
	  	)
	 in the presence of:-
	  	 
		
	 The Documentation Agent
	  	 
		
	 EXECUTED and DELIVERED
	  	)
	 as a DEED by
	  	 
		
	 for and on behalf of
	  	)
	 DEN NORSKE BANK ASA
	  	)
	 in the presence of:-
	  	 

  

 -7- 









			
	 The Security Trustee
	 	 
		
	 EXECUTED and DELIVERED
	 	)
	 as a DEED by
	 	 
		
	 for and on behalf of
	 	)
	 DEN NORSKE BANK ASA
	 	)
	 IN the presence of:-
	 	)
		
	 The Joint Arrangers
	 	 
		
	 EXECUTED and DELIVERED
	 	)
	 as a DEED by
	 	 
		
	 for and on behalf of
	 	)
	 NORDEA BANK NORGE ASA
	 	)
	 IN the presence of:-
	 	)
		
	 EXECUTED and DELIVERED
	 	)
	 as a DEED by
	 	)
		
	 for and on behalf of
	 	)
	 CITIBANK, N.A.
	 	)
	 in the presence of:-
	 	)
		
	 EXECUTED and DELIVERED
	 	)
	 as a DEED by
	 	)
		
	 for and on behalf of
	 	)
	 DEN NORSKE BANK ASA
	 	)
	 in the presence of:-
	 	)
		
	 EXECUTED and DELIVERED
	 	)
	 as a DEED by
	 	)
		
	 for and on behalf of
	 	)
	 SKANDINAVISKA ENSKILDA
	 	)
	 BANKEN AB (PUBL.)
	 	)
	 in the presence of:-
	 	)

  

 -8- 









			
	 The Lenders
	 	 
	 EXECUTED and DELIVERED
	 	)
	 as a DEED by
	 	)
		
	 for and on behalf of
	 	)
	 BNP PARIBAS
	 	)
	 in the presence of:-
	 	)
		
	 EXECUTED and DELIVERED
	 	)
	 as a DEED by
	 	)
		
	 for and on behalf of
	 	)
	 CITIBANK, N.A.
	 	)
	 in the presence of:-
	 	)
		
	 EXECUTED and DELIVERED
	 	)
	 as a DEED by
	 	)
		
	 for and on behalf of
	 	)
	 COMMERZBANK INTERNATIONAL S.A.
	 	)
	 in the presence of:-
	 	)
		
	 EXECUTED and DELIVERED
	 	)
	 as a DEED by
	 	)
		
	 for and on behalf of
	 	)
	 CREDIT AGRICOLE INDOSUEZ
	 	)
	 in the presence of:-
	 	)
		
	 EXECUTED and DELIVERED
	 	)
	 as a DEED by
	 	)
		
	 for and on behalf of
	 	)
	 DEN NORSKE BANK ASA
	 	)
	 in the presence of:-
	 	)
		
	 EXECUTED and DELIVERED
	 	)
	 as a DEED by
	 	)
		
	 for and on behalf of
	 	)
	 DEUTSCHE SCHIFFSBANK AG
	 	)
	 in the presence of:-
	 	)

  

 -9- 









			
	 EXECUTED and DELIVERED
	 	)
	 as a DEED by
	 	)
		
	 for and on behalf of
	 	)
	 DEUTSCHE BANK AG IN HAMBURG
	 	)
	 in the presence of:-
	 	)
		
	 EXECUTED and DELIVERED
	 	)
	 as a DEED by
	 	)
		
	 for and on behalf of
	 	)
	 FOKUS BANK ASA
	 	)
	 in the presence of:-
	 	)
		
	 EXECUTED and DELIVERED
	 	)
	 as a DEED by
	 	)
		
	 for and on behalf of
	 	)
	 FORTIS BANK (NEDERLAND) N.V.
	 	)
	 in the presence of:-
	 	)
		
	 EXECUTED and DELIVERED
	 	)
	 as a DEED by
	 	)
		
	 for and on behalf of
	 	)
	 HSH NORDBANK AG
	 	)
	 in the presence of:-
	 	)
		
	 EXECUTED and DELIVERED
	 	)
	 as a DEED by
	 	)
		
	 for and on behalf of
	 	)
	 ING BANK N.V.
	 	)
	 in the presence of:-
	 	)
		
	 EXECUTED and DELIVERED
	 	)
	 as a DEED by
	 	)
		
	 for and on behalf of
	 	)
	 NEDSHIP BANK N.V.
	 	)
	 in the presence of:-
	 	)

  

 -10- 









			
	 EXECUTED and DELIVERED
	 	)
	 as a DEED by
	 	)
		
	 for and on behalf of
	 	)
	 NORDEA BANK NORGE ASA
	 	)
	 in the presence of:-
	 	)
		
	 EXECUTED and DELIVERED
	 	)
	 as a DEED by
	 	)
		
	 for and on behalf of
	 	)
	 SKANDINAVISKA ENSKILDA
	 	)
	 BANKEN AB (PUBL.)
	 	)
	 in the presence of:-
	 	)
		
	 EXECUTED and DELIVERED
	 	)
	 as a DEED by
	 	)
		
	 for and on behalf of
	 	)
	 SPAREBANKEN ROGALAND
	 	)
	 in the presence of:-
	 	)
		
	 EXECUTED and DELIVERED
	 	)
	 as a DEED by
	 	)
		
	 for and on behalf of
	 	)
	 VEREINS UND WESTBANK
	 	)
	 in the presence of:-
	 	)
		
	 Acknowledged and
	 	)
	 Agreed by
	 	)
		
	 for and on behalf of
	 	)
	 CITIGROUP GLOBAL MARKETS LTD
	 	)
	 in the presence of:-
	 	)

  

 -11- 








 Schedule 1 
  
 THE LENDERS AND THEIR
COMMITMENTS 
  

							
	 Name

	 	 Address and Telefax Number

	  	 Commitment
 USD

	  	 Percentage
 %


	 BNP Paribas
 Oslo Branch
	 	 Karl Johans gt 7
 P.O. Box 106 Sentrum
 0155 Oslo
 Norway
  
 Fax:             (47) 22 41 08
44
 Attention: Shipping
	  	*	  	*
				
	Nordea Bank Norge ASA (formerly known as Christiania Bank og Kreditkasse ASA)	 	 1) Information related to Loan Administration
  
 2) Information related to Credit/Commercial
Matters
  
 Middelthunsgate 17
 N-0368 Oslo
 Norway
  
 Fax:
            (47) 22 48 66 68
 Attention: Offshore/Oil
Services
	  	*	  	*
				
	Citbank N.A.	 	 1) 2nd Floor
 4 Harbour Exchange
 Isle of Dogs
 London E14 9GE
  
 Fax:             (44) 20 7500 5806
 Attention: UK Loans Processing Unit
	  	*	  	*
				
	 	 	 2) c/o Citibank International plc
 Norway Branch
 Tordenskioldsgate
8-10
 P O Box 1481 Vika
 N-0116 Oslo
 Norway
 Fax:             (47) 22 00 96 22
	  	 	  	 



	*	The confidential portion of this section of the agreement has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential
treatment. 

  

 -12- 









							
	 Name

	 	 Address and Telefax Number

	  	 Commitment
 USD

	  	 Percentage
 %


	 Commerzbank International
 S.A.
	 	 1) Information related to Loan Administration:
 11, rue Notre Dame
 L-2240
Luxembourg
  
 Tel:
            (35) 2 477 911 459
 Fax:
            (35) 2 477 911 386
	  	*	  	*
				
	 	 	 2) Information related to Credit/Commercial matters:
 Commerzbank AG
 Global Shipping
Hamburg
 Ness 7-9
 20457
Hamburg
 Germany
  
 Fax:             (49) 40 36 83 4068/ 4123
 Attention: Global Shipping
	  	 	  	 
				
	 Credit Agricole Indosuez
	 	 1) Lending office and all information related to Loan
 Administration matters:
 Shipping
Finance
 Division/Loan Administration
 9 Quai du President Paul Doumer
 92920 Paris La Defense
 Cedex
 France
  
 Attention: DFMA/Loan Administration
  
 Tel: + (33)1 41 89 12 49
 Fax: + (33)1 41 89 1934
	  	*	  	*



	*	The confidential portion of this section of the agreement has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential
treatment. 

  

 -13- 









							
	 Name

	 	 Address and Telefax Number

	  	 Commitment
 USD

	  	 Percentage
 %


	 	 	 2) Information related to Credit/Commercial matters:
 Representative Office
 Norway
 Ruseløkkveien 6
 N-0251 Oslo
 Norway
  
 Fax:             +(47) 22 01 06
51
 Tel:             +(47) 22 01 06 50
	  	 	  	 
				
	Den norske Bank ASA	 	 Stranden 21
 N-0107 Oslo
 Norway
  
 Fax:             (47) 22 48 28 94
 Attention:
Credit Administration Shipping
	  	*	  	*
				
	Deutsche Bank AG in Hamburg	 	 Brandstwiete 1
 20457 Hamburg
  
 Fax:             (49) 40 37 01 46 49
 Attention: Shipfinancing Department
	  	*	  	*
				
	Deutsche Schiffsbank AG	 	 Domshof 17
 D-28195 Bremen
  
 Tel:             +49 421 3609-0
 Fax:             +49 421 323539
	  	*	  	*
				
	Fokus Bank ASA	 	 Information related to Loan Administration:
 Akersgata 28
 PO Box 1170 Sentrum
 0107 Oslo
 Norway
  
 Fax:             + 47 24 05 55 30
 Tel:             + 47 24 05 54 30
 Attention: Corporate & Institutional Banking, Oslo Region
	  	*	  	*



	*	The confidential portion of this section of the agreement has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential
treatment. 

  

 -14- 









							
	 Name

	  	 Address and Telefax Number

	  	 Commitment
 USD

	  	 Percentage
 %


				
	 	  	 Information related to Credit/Commercial matters
 Akersgata 28
 PO Box 1170 Sentrum
 0107 Oslo
 Norway
  
 Fax:             + 47 24 05 55 30
 Tel:             + 47 24 05 54 30
 Attention: Corporate & Institutional Banking, Oslo Region
	  	 	  	 
				
	Fortis Bank (Nederland) N.V.	  	 1) Information related to Loan Administration:
 Fortis Bank (Nederland) N.V.
 CBO/CB
 Loan Administration
 Coolsingel 93
 NL-3012 AE Rotterdam
 The Netherlands
  
 Fax:             (31) 10 401 6118
	  	*	  	*
				
	 	  	 2) Information related to Credit/Commercial matters:
 Fortis Bank (Nederland) N.V., Oslo Branch
 Munkedamsveien 53B
 N-0250 Oslo
 Norway
  
 Fax:             (47) 23 11 49 40
	  	 	  	 



	*	The confidential portion of this section of the agreement has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential
treatment. 

  

 -15- 









							
	 Name

	  	 Address and Telefax Number

	  	 Commitment
 USD

	  	 Percentage
 %


	HSH Nordbank AG	  	 Gerhart-Hauptmann-Platz 50
 D-20095 Hamburg
 Germany
  
 Fax:             +(49) 40 33 333 4118
 Attention: Shipping Department
	  	*	  	*
				
	ING Bank N.V.	  	 De Amsterdamse Poort
 Location Code HE 02.09
 Bijlmerplein 888
 P O Box 1800
 1000 BV Amsterdam
 Netherlands
  
 Attention: Natural Resources (Offshore)
  
 Tel:             +31 20 576 8896
 Fax:             + 31 20 563 5164
	  	*	  	*
				
	Nedship Bank N.V.	  	 Nedship Bank (Nordic)
 Strandgaten 18
 P O Box 701 Sentrum
 5807 Bergen
 Norway
  
 Fax:             (47) 55 30 95 50
	  	*	  	*
				
	Skandinaviska Enskilda Banken AB (publ)	  	 Rosenkrantz gate 22
 P O Box 1843 Vika
 N-0123 Oslo
 Norway
  
 Fax:             (47) 22 82 71
24
 Attention: Shipping/Offshore
	  	*	  	*
				
	Sparebanken Rogaland	  	 Bjergsted Terrasse 1
 P O Box 218
 N-4001 Stavanger
 Norway
  
 Fax:
            (47) 51 53 47 55
 Attention:
Shipping/Offshore
	  	*	  	*



	*	The confidential portion of this section of the agreement has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential
treatment. 

  

 -16- 









								
	 Name

	  	 Address and Telefax Number

	  	 Commitment
 USD

	  	 Percentage
 %

	 
	Vereins - und Westbank AG, Hamburg	  	 22, Alter Wall
 D-20457 Hamburg
  
 Fax:             00 49 40 3692 3894
 Attention: Corporate Banking Department - Energy
	  	*	  	*	 
				
	 	  	 Total
	  	500,000,000	  	100	%



	*	The confidential portion of this section of the agreement has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential
treatment. 

  

 -17- 








 APPENDIX 1 
  
 SMEDVIG RIG AS 
 as Borrower 
  
 THE SEVERAL BANKS AND FINANCIAL INSTITUTIONS 
 listed in Schedule 1 
 as Lenders 
  
 NORDEA BANK NORGE ASA 
 CITIGROUP GLOBAL MARKETS LTD 
 DEN NORSKE BANK ASA 
 SKANDINAVISKA ENSKILDA BANKEN AB (PUBL.) 
 as Joint Arrangers

  
 DEN NORSKE BANK
ASA 
 as Facility Agent 
  
 DEN NORSKE BANK ASA 
 as Documentation Agent 
  
 DEN NORSKE BANK ASA 
 as Security Trustee 
  

  
 AMENDED AND RESTATED 
 USD500,000,000 REDUCING AND REVOLVING 
 CREDIT
LOAN FACILITY AGREEMENT 
  

  
 Stephenson Harwood 
 One St Paul’s Churchyard 
 London EC4M 8SH 
  
 Portions of this agreement have been omitted and filed separately with

 the Securities and Exchange Commission pursuant to a request for confidential treatment. 







 INDEX 
  

					
	Clause

	  	 Subject

	  	Page


	1.	  	Definitions and Construction	  	1
	2.	  	The Commitments	  	19
	3.	  	Advances	  	20
	4.	  	Conditions Precedent	  	21
	5.	  	Repayment, Reduction and Cancellation	  	22
	6.	  	Interest on Advances	  	24
	7.	  	Illegality, Increased Costs and Force Majeure	  	28
	8.	  	Payments	  	31
	9.	  	Representations and Warranties	  	35
	10.	  	General Undertakings: Positive Covenants	  	39
	11.	  	General Undertakings: Negative Covenants	  	44
	12.	  	Financial Condition	  	46
	13.	  	Further Assurance	  	47
	14.	  	Fees	  	47
	15.	  	Costs, Expenses and Indemnities	  	48
	16.	  	Default	  	49
	17.	  	Sharing of Payments	  	54
	18.	  	Set-off	  	56
	19.	  	Making of Decisions by the Lenders	  	56
	20.	  	The Agents	  	58
	21.	  	Miscellaneous Provisions	  	69
	22.	  	Waiver of Immunity	  	70
	23.	  	Counterparts	  	70
	24.	  	Assignment and Transfer	  	70
	25.	  	Notices	  	75
	26.	  	Governing Law	  	77
	27.	  	Jurisdiction	  	77

  

					
	 SCHEDULE 1
	  	The Lenders and their Commitments	  	79
	 SCHEDULE 2
	  	Form of Drawdown Notice	  	85
	 SCHEDULE 3
	  	Conditions Precedent	  	86
	 SCHEDULE 4
	  	Form of Transfer Certificate	  	89
	 SCHEDULE 5
	  	Form of Compliance Certificate	  	94
	 SCHEDULE 6
	  	Existing Encumbrances	  	96
	 SCHEDULE 7
	  	Corporate Structure Diagram of the Smedvig Group	  	97
	 SCHEDULE 8
	  	Reductions of Commitments	  	98
	 SCHEDULE 9
	  	The Secured Assets	  	100

  

 (i) 








 THIS AGREEMENT is made as of the
10th day of May 2001 
  
 BETWEEN:- 
  

	(1)	SMEDVIG RIG AS as Borrower; 

  

	(2)	THE SEVERAL BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1 as
Lenders; 

  

	(3)	NORDEA BANK NORGE ASA, CITIGROUP GLOBAL MARKETS LTD, DEN
NORSKE BANK ASA and SKANDINAVISKA ENSKILDA BANKEN AB (PUBL.) as Joint Arrangers; 

  

	(4)	DEN NORSKE BANK ASA as Facility Agent; 

  

	(5)	DEN NORSKE BANK ASA as Documentation Agent; and 

  

	(6)	DEN NORSKE BANK ASA as Security Trustee 

  
 WHEREAS:- 
  
 This Agreement sets out the terms and conditions on which the Lenders have agreed to make available to the Borrower a secured reducing and revolving credit loan facility
in the sum of up to five hundred million Dollars (USD500,000,000) to provide finance for general corporate purposes of any Group Member. 
  
 NOW IT IS HEREBY MUTUALLY
AGREED as follows:- 
  

	1.	DEFINITIONS AND CONSTRUCTION 

  

	1.1.	Definitions 

  
 In this Agreement including its preamble and recitals:- 
  
 “Advance” 
  
 means each borrowing of a proportion of the Commitments by the Borrower under Clause 3 (Advances) or, as the context may require, the principal amount of
such borrowing for the time being outstanding; 
  
 “Agents” 
  
 means the Facility Agent,
the Documentation Agent and the Security Trustee; 
  
 “Applicable Margin” 
  
 means the
margin (expressed as basis points each equivalent to one hundredth of one per cent) which is based on the Guarantor’s consolidated quarterly tested Leverage Ratio as follows: 








			
	 Leverage Ratio

	 	 Applicable Margin


	 = or > 4.25 and < 5.00
	 	 170 basis points per annum

	 = or > 3.00 and < 4.25
	 	 150 basis points per annum

	 < 3.00
	 	 135 basis points per annum

	 Investment Grade
	 	 115 basis points per annum


  
 “Associated
Costs Rate” 
  
 means, in relation to each Advance, the
percentage rate from time to time determined by the Facility Agent (acting reasonably) as reflecting the cost, loss or difference in return suffered or incurred by any Bank as a result of any charge imposed by the Financial Services Authority of the
United Kingdom (or any other authority which replaces all or any of its functions); 
  
 “Associated Undertaking” 
  
 means:- 
  

	 	(A)	Varia Perdana Sdn. Bhd. and Tioman Drilling Comp. Sdn. Bhd., each being companies incorporated under the laws of Malaysia; 

  

	 	(B)	Norwegian Tender Rig AS, a company incorporated under the laws of Norway; 

  

	 	(C)	Partrederiet West Navigator DA, a limited partnership established under the laws of Norway; and 

  

	 	(D)	any other company or limited partnership (other than a Subsidiary) whose results are required by Norwegian GAAP, or would be required by US GAAP, to be consolidated with those of
the Guarantor and its Subsidiaries in the Smedvig Group’s consolidated financial statements or, if not so required, are in fact consolidated from time to time with those of the Guarantor and its Subsidiaries in the Smedvig Group’s
consolidated financial statements; 

  
 “Availability Date” 
  
 means the first
date (if any) before the Closing Date upon which the conditions referred to in Clauses 4.1 (Documents and evidence) and 4.2 (General conditions precedent) have been fulfilled; 
  
 “Availability Period” 
  
 means the period from the Availability Date and ending on the earlier of the Termination Date and/or the period ending on
such earlier date (if any) (i) on which the Borrower cancels all of the Commitments under Clause 5.3 (Voluntary cancellation of Commitments) or (ii) on which the Commitments of all the Lenders are reduced to zero pursuant to Clauses 7.1 (Illegality)
or 16.2 (Acceleration); 
  

 -2- 








 “Available Commitment” 
  
 means, in relation to a Lender, the amount of its Commitment less the amount of its Advances outstanding; 
  
 “Balder Disputes” 
  
 means all unresolved and contested issues whatsoever (whether the subject of
discussion, negotiation, arbitration, litigation or otherwise howsoever) from time to time between any Group Member and Keppel FELS, Esso and/or any other party in connection howsoever with the four separate delivery protocols for the mobile
production unit referred to as “Balder FPU” both from Keppel FELS to Smedvig Production Contracting KS and from the Guarantor/Smedvig Production Contracting KS to Esso; 
  
 “Banks” and “Bank” 
  
 means the Lenders, the Joint Arrangers, the Facility Agent, the Documentation Agent and the Security Trustee (each
individually a “Bank” and collectively the “Banks”); 
  
 “Banking Day” 
  
 means a day on which dealings in deposits in Dollars are carried on in the London Interbank Eurocurrency Market and (other than Saturday or Sunday) on which banks are open for business in London, Oslo, Hamburg, Paris and New York City (or
any other relevant place of payment under Clause 8 (Payments)); 
  
 “Borrower” 
  
 means Smedvig Rig AS, a
company incorporated under the laws of Norway with registered number 979 193 416 and having its registered office and principal place of business at Finnestadveien 28, PO Box 110, 4001 Stavanger, Norway; 
  
 “Cash” 
  
 means:- 
  

	 	(A)	cash in hand legally and beneficially owned by the Guarantor and each of its Subsidiaries; and 

  

	 	(B)	cash deposits legally and beneficially owned by the Guarantor and each of the Subsidiaries and which are deposited with (i) any of the Joint Arrangers, (ii) any other deposit taking
institution having a rating of at least A from Standard & Poor’s Ratings Group or the equivalent with any other principal credit rating agency in the United States of America or Europe or (iii) any other bank or financial institution
approved by the Facility Agent 

  
 which in each
case:- 
  

	 	(i)	is free from any Encumbrance which has been enforced or has become capable of enforcement; 

  

	 	(ii)	is otherwise at the free and unrestricted disposal of the relevant Group Member by which it is owned; and 

  

 -3- 









	 	(iii)	in the case of cash in hand or cash deposits held by a Group Member or a Subsidiary or Associated Undertaking, is (in the opinion of the Facility Agent, based upon such documents
and evidence as the Facility Agent may require the Borrower to provide in order to form the basis of such opinion) capable or, upon the occurrence of an Event of Default under this Agreement, would become capable of being paid without restriction to
the Borrower within five (5) Banking Days (or, in the case of Varia Perdana Sdn. Bhd. only, thirty (30) Banking Days) of its request or demand therefor either by way of a dividend or by way of a repayment of principal (or the payment of interest
thereon) in respect of an inter-company loan from the Guarantor or the Borrower to that Subsidiary or Associated Undertaking; 

  
 “certified copy” 
  
 means, in relation to any document delivered or issued by or on behalf of any company, a copy of such document certified as a true, complete and
up-to-date copy of the original by any of the directors or the secretary or assistant secretary or chief financial officer for the time being of that company or by such other person as the Facility Agent may approve; 
  
 “Closing Date” 
  
 30 June 2003 or such later date as the Facility Agent may agree on behalf of
the Lenders at their discretion; 
  
 “Commitment”

  
 means, as to each Lender, the sum set out opposite its
name in Schedule 1 (or, as the case may be, in any relevant Transfer Certificate) as the total amount which, subject to the terms of this Agreement, it is obliged to advance or (as the context permits) has advanced to the Borrower hereunder, in each
case as such amount may be repaid, reduced, cancelled or terminated under this Agreement; 
  
 “Committed Amount” 
  
 means the aggregate amount of the Commitments as reduced from time to time by reference to the provisions of Schedule 8; 
  
 “Compulsory Acquisition” 
  
 means, in respect of a Unit, requisition for title or other compulsory acquisition including, if that Unit is not released therefrom within the Relevant
Period, capture, seizure, detention or confiscation (but excluding requisition for use or hire) by or on behalf of any government or governmental authority or agency or by pirates, hijackers, terrorists or similar persons; “Relevant
Period” means for the purposes of this definition of Compulsory Acquisition either (i) two (2) calendar months or, (ii) if relevant underwriters confirm in writing (in terms satisfactory to the Majority Banks) prior to the end of such two (2)
month period that such capture, seizure, detention or confiscation will, if continuing, be fully covered by the relevant Group Member’s war risks insurance for a further period exceeding ten (10) calendar months, the shorter of twelve (12)
months and such period at the end of which cover is confirmed to attach; 
  

 -4- 








 “Contribution” 
  
 means, as to each Lender, the principal amount of the Advances owing to such Lender under this Agreement at any relevant
time; 
  
 “Documentation Agent” 
  
 means Den norske Bank ASA, a company incorporated under the laws of Norway
of Stranden 21, N-0250 Oslo, Norway or such other person as may be appointed documentation agent for the Banks hereunder; 
  
 “Dollars” and the sign “USD” 
  
 mean the lawful currency for the time being of the United States of America; 
  
 “Drawdown Date” 
  

means, in respect of each Advance, the date on which such Advance is drawn down or deemed to be drawn down hereunder; 
  
 “Drawdown Notice” 
  
 means a notice substantially in the terms of Schedule 2; 
  
 “EBITDA” 
  
 shall mean the earnings before interest expenses, taxes, depreciation and
amortization of the Smedvig Group on a consolidated basis for the previous period of twelve (12) months as certified to the Facility Agent by the Chief Financial Officer of the Guarantor as such term is defined in accordance with Norwegian GAAP
consistently applied; 
  
 “Encumbrance”

  
 means any mortgage, charge, pledge, lien, assignment,
hypothecation, title retention, preferential right or trust arrangement and any other security agreement or arrangement; 
  
 “Event of Default” 
  
 means any of the events or circumstances described in Clause 16 (Default); 
  
 “Execution Date” 
  

means the date of this Agreement; 
  
 “Facility Agent” 
  
 means Den norske Bank ASA as aforesaid (or such other person as may be appointed as facility agent for the Banks hereunder); 
  
 “Finance Lease” 
  
 means a lease or charterparty which would be classified as a finance lease
in accordance with Norwegian GAAP or any other transaction which is required to be classified and accounted for as a liability or asset on the face of the Smedvig Group’s consolidated balance sheet in accordance with Norwegian GAAP; 

 

 -5- 








 “Financial Indebtedness” 
  
 means any of the following (whether or not the same are required to be classified and accounted for as a liability on the
face of the Smedvig Group’s consolidated balance sheet in accordance with Norwegian GAAP):- 
  

	 	(A)	moneys borrowed or raised (including rentals under Finance Leases) and interest thereon; 

  

	 	(B)	any liability under any debenture, note or other security or under acceptance credit facilities; 

  

	 	(C)	any liability in respect of the acquisition cost of assets to the extent payable more than thirty (30) days after the time of acquisition of title or possession thereof (whichever
is the earlier) by the party liable; 

  

	 	(D)	any liability (whether present or future, actual or contingent) in respect of any guarantee or other assurance against financial loss in respect of such moneys borrowed or raised,
interest or liability (but performance guarantees issued by the Guarantor or any Subsidiary to clients of the Smedvig Group shall be excluded) or under any derivatives, hedging or foreign exchange transactions of any nature.


  
 but shall not include:- 
  

	 	(i)	any borrowings or other such liabilities owed by any Group Member to another Group Member; or 

  

	 	(ii)	any Non-Recourse Debt of any Group Member; 

  
 “Group Member” 
  
 means any member of the Smedvig Group; 
  
 “Guarantee” 
  
 means an unconditional on demand guarantee of all obligations whatsoever of the Borrower under this agreement to be executed by the Guarantor in favour of
the Security Trustee, in form and substance satisfactory to the Lenders; 
  
 “Guarantor” 
  
 means Smedvig asa, a company incorporated under the laws of Norway with registered number 953 114 828 and having its registered office and principal place of business at Finnestadveien 28, PO Box 110, 4001 Stavanger, Norway; 
  
 “Interest Expense” 
  
 means the aggregate of:- 
  

	 	(A)	the interest expenses of the Smedvig Group for the previous period of twelve (12) months as shown in the Smedvig Group’s consolidated profit and loss account;


  

 -6- 








 plus 
  

	 	(B)	the interest expenses of the Smedvig Group on a consolidated basis for the previous period of twelve (12) months in respect of all off-balance sheet items as certified to the
Facility Agent by the Chief Financial Officer of the Guarantor; 

  
 “Interest Income” 
 means the aggregate of:- 
  

	 	(A)	the interest income of the Smedvig Group for the previous period of twelve (12) months as shown in the Smedvig Group’s consolidated profit and loss account;


  
 plus 
  

	 	(B)	the interest income of the Smedvig Group on a consolidated basis for the previous period of twelve (12) months in respect of all off-balance sheet items as certified to the Facility
Agent by the Chief Financial Officer of the Guarantor; 

  
 “Interest Payment Date” 
  
 means the
last day of each Interest Period and also, in respect of any Interest Period which is longer than six (6) months, the dates falling at six (6) monthly intervals from the beginning of such Interest Period; 
  
 “Interest Period” 
  
 means each period ascertained in accordance with Clause 6.1 (Normal interest
rate) or Clause 6.3 (Default interest) or any other applicable provision of this Agreement; 
  
 “Interest Rate” 
  
 means the rate of interest applicable to each Advance or relevant part thereof calculated in accordance with Clause 6 (Interest on Advances); 
  
 “Joint Arrangers” 
  
 means Nordea Bank Norge ASA, Citigroup Global Markets Ltd, Den norske Bank ASA and Skandinaviska Enskilda Banken AB (Publ.); 
  
 “Lenders” 
  
 means the several banks and financial institutions whose names and Lending
Branches are set out in Schedule 1 (each individually a “Lender” and collectively the “Lenders”); 
  
 “Lending Branch” 
  
 means, in respect of each Lender, its office or branch at the address set out beneath its name in Schedule 1 (or, in the case of a Transferee Bank, in the
Transfer Certificate to which it is a party as Transferee) or such other office or branch as any Lender shall from time to time select and notify through the Facility Agent to the Borrower and the other parties to this Agreement; 
  

 -7- 








 “Leverage Ratio” 
  
 means the Net Funded Debt divided by EBITDA; 
  
 “LIBOR” 
  
 means, in relation to a particular period, the rate per annum for deposits of Dollars for a period equivalent to such period at or about 11.00 a.m. London
time on the second London Banking Day before the first day of such period as displayed on Telerate page 3750 (British Bankers’ Association Interest Settlement Rates) (or such other page as may replace such page 3750 on such system or on any
other system of the information vendor for the time being designated by the British Bankers’ Association to calculate the BBA Interest Settlement Rate (as defined in the British Bankers’ Association’s Recommended Terms and Conditions
(“BBAIRS” terms) dated August, 1985)), provided that if on such date no such rate is so displayed, LIBOR for such period shall be the arithmetic mean (rounded upward if necessary to four decimal places) of the rates respectively quoted to
the Facility Agent by each of the Reference Banks at the request of the Facility Agent as such Reference Bank’s offered rate for deposits of Dollars in an amount approximately equal to the amount in relation to which LIBOR is to be determined
for a period equivalent to such period to prime banks in the London Interbank Eurocurrency Market at or about 11.00 a.m. London time on the second London Banking Day before the first day of such period; 
  
 “Loan Period” 
  
 means the period beginning on the Execution Date and ending on the date on
which the Outstanding Indebtedness is finally and irrevocably paid or repaid in full and the Commitments of all the Lenders have been reduced to zero; 
  
 “London Banking Day” 
  
 means a day on which dealings and deposits in Dollars are carried on in the London Interbank Eurocurrency Market and (other than Saturday or Sunday) a day
on which banks are open for business in London; 
  
 “Major
Projects” 
  
 means any project or series of connected
projects to be henceforth undertaken by any Group Member (alone or with any other person) the aggregate capital cost of which to the Borrower or any Subsidiary is budgeted to exceed or exceeds one hundred million Dollars (USD100,000,000) including,
but not limited to any such future project for the building, rebuilding or conversion of any Unit; 
  
 “Major Shared Enterprise” 
  
 means any person created at any time by the Borrower or any Subsidiary and a third party joint venturer for the purpose of owning and/or undertaking
and/or developing a Major Project in which each of the Borrower or such Subsidiary and such joint venturer has a half interest but over which neither the Borrower or such Subsidiary nor such joint venturer has or can exercise control; 
  

 -8- 








 “Majority Banks” 
  
 means Lenders the aggregate of whose Commitments exceeds {Confidential Material}* of the aggregate Commitments of all
of the Lenders; 
  
 “Margin Adjustment Date”

  
 means, with respect to each Margin Re-Calculation Period,
the last day of that period; 
  
 “Margin Re-Calculation
Period” 
  
 means each period of ten (10) days
commencing sixty (60) days after each Quarterly Financial Statement Preparation Date; 
  
 “Marketable Securities” 
 means:- 
  

	 	(A)	any certificates of deposit or other readily marketable securities having a rating of at least AA from Standard & Poor’s Rating Group or the equivalent with any other
principal credit rating agency in the United States of America or Europe (but not including any debt securities evidencing indebtedness of the Borrower or any other Group Member); 

  

	 	(B)	any debt securities issued directly or fully guaranteed or insured by the Norwegian government or any municipal or local governmental authority in Norway or any company incorporated
in Norway which are traded or capable of being traded on any stock exchange in Norway provided that such securities as are referred to in this paragraph (B) (the “Norwegian Marketable Securities”) shall only constitute
“Marketable Securities” for the purposes of this Agreement to the extent that the aggregate value thereof at any time does not exceed three-sevenths (3/7ths) of the aggregate value at that time of (i) all other Marketable Securities
referred to in paragraph (A) and (C) of this definition and (ii) the Cash of the Smedvig Group; and 

  

	 	(C)	such other debt and/or equity instruments as the Majority Banks may agree from time to time shall constitute “Marketable Securities” for the purposes of this Agreement


  
 which in each case:- 
  

	 	(i)	is legally and beneficially owned by a Group Member; 

  

	 	(ii)	is free from any Encumbrance which has been enforced or has become capable of enforcement; 



	*	The confidential portion of this section of the agreement has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential
treatment. 

  

 -9- 









	 	(iii)	is otherwise at the free and unrestricted disposal of the relevant Group Member by which it is owned; and 

  

	 	(iv)	in the case of any such marketable security held by a Subsidiary or Associated Undertaking, is capable (in the Facility Agent’s opinion) of being transferred immediately and
without restriction to the Borrower or of being liquidated immediately and without restriction such that the proceeds of sale will thereupon constitute “Cash” as defined in this Agreement; 

  
 “Minimum Liquidity” 
  
 means, as at any date, the aggregate of:- 
  

	 	(A)	Cash at that date as certified to the Facility Agent by the Chief Financial Officer of the Guarantor; 

  
 plus 
  

	 	(B)	the value of the Marketable Securities legally and beneficially owned by the Smedvig Group at that date as certified to the Facility Agent by the Chief Financial Officer of the
Guarantor; 

  
 “month” 

 
 means a period starting on one day in a calendar month and ending on the
numerically corresponding day in the next calendar month save that, where any such period would otherwise end on a day which is not a Banking Day, it shall end on the next Banking Day, unless that day falls in the calendar month succeeding that in
which it would otherwise have ended, in which case it shall end on the preceding Banking Day provided that, if a period starts on the last Banking Day in a calendar month or if there is no numerically corresponding day in the month in which that
period ends, that period shall end on the last Banking Day in that later month; 
  
 “Net Funded Debt 
  
 means on a consolidated basis for the Smedvig Group all interest-bearing debt less cash and cash equivalent, excluding an amount of USD50,000,000 or such other amount as specified in Clause 12.1 which the Minimum Liquidity shall not fall
below; 
  
 “Net Interest Expenses” 
  
 means Interest Expense less Interest Income; 
  
 “New Assets” 
  
 means Units or shares in companies which own Units and become a Subsidiary
of the Borrower or an affiliate or other assets related to the Smedvig Group’s core business such Units to be registered in a registry and to carry a flag acceptable to the Lenders; 
  

 -10- 








 “Non-Recourse Debt” 
  
 means indebtedness, or that portion of indebtedness, of any Group Member which in the Facility Agent’s opinion has been
incurred by such Group Member so as to enable it to acquire or enjoy the use of any asset (a “relevant asset”) where:- 
  

	 	(A)	the repayment of such indebtedness (and the payment of interest thereon) is to be funded solely out of the earnings generated by the relevant asset; and 

  

	 	(B)	in the event that such Group Member defaults in respect of such indebtedness, the creditor to whom the indebtedness is owed shall have no recourse to or against any asset belonging
to any Group Member other than the relevant asset itself (including its earnings and/or insurances); 

  
 “Norwegian GAAP” 
  
 means generally accepted accounting principles and practices in Norway; 
  
 “Norwegian Marketable Securities” 
  
 shall have the meaning ascribed thereto in paragraph (B) of the definition of “Marketable Securities” above;

  
 “Obligors” 
  
 means the Borrower, the Guarantor and any other Group Member who from time
to time is the grantor of any subsisting Security in favour of the Security Trustee and/or the Lenders; 
  
 “Outstanding Indebtedness” 
  
 means all sums of any kind arising at any time for any reason payable actually or contingently by the Borrower to the Banks or any of them hereunder
(whether by way of repayment of principal, payment of interest or default interest, payment upon any indemnity or counter-indemnity, reimbursement for costs or otherwise howsoever); 
  
 “Percentage” 
  
 means, in relation to a Lender and in respect of any Advance, the proportion, expressed as a percentage, which the amount of the Commitment of such Lender
bore to the total amount of the Commitments of all of the Lenders (including such Lender) as at the date of such Advance; 
  
 “Permitted Encumbrances” 
  
 means:- 
  

	 	(A)	any mortgage over “West Alpha” which is granted in favour of the Guarantor pursuant to the option to grant such mortgage pursuant to Clause 5 (iii) of the loan agreement
dated 10 June 2002 between the Guarantor and K/S West Alpha 

  

	 	(B)	those Encumbrances created prior to the Execution Date the particulars of which are set out in paragraph 1 of Schedule 6; 

  

 -11- 









	 	(C)	in respect of any Unit owned by, or leased to, any Group Member:- 

  

	 	(i)	liens for current crews’ wages and salvage; 

  

	 	(ii)	any ship repairer’s or outfitter’s possessory lien not exceeding three million Dollars (USD3,000,000); 

  

	 	(iii)	any other liens incurred in the ordinary course of operating such Unit not exceeding three million Dollars (USD3,000,000); and 

  

	 	(D)	in respect of a loan agreement dated 28 September 1994, (as amended), entered into between BNP Paribas (Malaysia) and Varia Perdana Sdn Bhd, and guaranteed by the Guarantor and
Probadi Sendirian Bohad, the assets mortgaged thereunder, including any mortgage on “T-9” and any other assets pursuant to any refinancing thereof; 

  

	 	(E)	any Encumbrance created in favour of the Security Trustee and/or the Lenders over any of the Secured Assets; 

  

	 	(F)	non-recourse project financing. 

  
 “Permitted Winding-Up” 
  
 means any voluntary dissolution, liquidation, winding-up or other termination of any Group Member (other than the Borrower or the Guarantor) where:-

  

	 	(A)	the relevant undertaking is dormant; or 

  

	 	(B)	all of the material assets and business of the relevant undertaking have been transferred to another Group Member and, immediately prior to the dissolution, liquidation, winding-up
or other termination, such undertaking does not owe any Financial Indebtedness to any person or have any other material liabilities (save to the extent that such Financial Indebtedness and/or other liabilities are assumed by another Group Member
with the consent of the relevant undertaking’s creditors); or 

  

	 	(C)	such voluntary dissolution, liquidation, winding-up or other termination is made or carried out with the prior written consent of the Majority Banks; 

  
 “Possible Event of Default” 
  
 means any event which, with the giving of notice, lapse of time,
determination of materiality or other condition would or might constitute an Event of Default; 
  
 “Project Alpha” 
  
 means the project referred to in a side letter addressed by the Borrower and the Guarantor to the Lenders; 
  

 -12- 








 “Quarterly Financial Statements” 
  
 means the statements to be provided by the Borrower in accordance with
Clause 10.2; 
  
 “Quarterly Financial Statements
Preparation Date” 
  
 means 31 March, 30 June, 30
September and 31 December; 
  
 “Reduction Dates”

  
 means, subject to Clause 8.4 (Non-Banking Days), 15 July
2003 and each of the dates falling at three (3) monthly intervals thereafter up to and including the Termination Date; 
  
 “Reference Banks” 
  
 means the principal offices of the Facility Agent and the other Joint Arrangers and/or any other Lender appointed as such pursuant to this Agreement;

  
 “Relevant Portion” 
  
 in relation to each Associated Undertaking means a percentage equivalent to
the percentage of the issued equity in such Associated Undertaking held directly or indirectly by the relevant Group Member; 
  
 “same day funds” 
  
 means Dollar funds settled through the New York Clearing House Interbank Payments System or such other funds for payment in Dollars as the Facility Agent
shall specify to the Borrower as being customary at the time for the settlement of international transactions in New York City of the type contemplated by this Agreement; 
  
 “Scheduled Reduction Amount” 
  
 means, in respect of each Reduction Date, the amount by which the Commitments are scheduled to be reduced on that date as
determined by the provisions of Schedule 8; 
  
 “Secured
Assets” 
  
 means the assets details of which are set
forth in Schedule 9; 
  
 “Secured Units”

  
 means from time to time the Units referred to in
paragraphs 1 and 3 of Schedule 9; 
  
 “Security”

  
 means all security granted from time to time under or by
virtue of those Security Documents executed pursuant to Clause 4.1 (Documents and evidence) and paragraphs 2, 6, 8 and 9 of Schedule 3; 
  
 “Security Documents” 
  
 means this Agreement and all securities and other documents from time to time executed by any Group Members pursuant to Clause 4.1 (Documents and
evidence) and paragraphs 2,6, 7, 8 and 9 of Schedule 3; 
  

 -13- 








 “Security Trustee” 
  
 means Den norske Bank ASA as aforesaid or such other person as may be appointed as security trustee for the Banks hereunder;

  
 “Smedvig Group” 
  
 means the Guarantor and each of its Subsidiaries and Associated Undertakings
from time to time; 
  
 “Subsidiary” 

 
 means:- 
  

	 	(A)	any company falling within the meaning ascribed to “datterselskap” by the Norwegian Companies Act (Aksjeloven), or the Norwegian Private Limited Companies Act
(Allmensaksjeloven); and 

  

	 	(B)	any limited partnership or other undertaking in which the Guarantor or, as the case may be, the Borrower directly or indirectly beneficially owns partnership shares to which are
attached a majority of the voting rights in such partnership; 

  
 “Taxes” 
  
 means all present and future income, value added and other taxes, levies, duties, fees, charges, imposts, deductions, compulsory liens and withholdings whatsoever together with interest thereon and penalties with respect thereto, if any,
and any payments made on or in respect thereof (other than taxes on, or calculated by reference to the net income or profit of any of the Banks in the jurisdiction in which its head office or Lending Branch is situated) and
“Taxation” shall be construed accordingly; 
  
 “Termination Date” 
  
 means, subject
to Clause 8.4 (Non-Banking Days), 15 April 2008; 
  
 “Total Liabilities” 
  
 shall mean, as
at any date, the aggregate of:- 
  

	 	(A)	the total current liabilities and the total long-term liabilities of the Smedvig Group at that date as shown in the Smedvig Group’s consolidated balance sheet (each as such
terms are defined in accordance with Norwegian GAAP consistently applied); 

  
 plus 
  

	 	(B)	the aggregate of the net present values of each individual charterhire or other lease payment due or to become due from any Group Member under any charter or other lease agreement
to which it is a party which is not accounted for on the face of the Smedvig Group’s consolidated balance sheet and which has an unexpired charter term or lease period of more than eighteen (18) months from the date of computation (where the
“net present value” of any such charterhire or other lease payment shall be that principal amount which, if it were to accrue 

  

 -14- 








 interest during the period from the date of computation until the scheduled payment date thereof (the
“relevant period”) at an interest rate equal to LIBOR for the relevant period plus the Applicable Margin compounded every six (6) months, would be equal on the scheduled payment date to the amount of the charterhire or other lease
payment due on that date); 
  
 plus 
  

	 	(C)	the aggregate liabilities of the Smedvig Group on a consolidated basis at that date under guarantee and indemnities in respect of any financial payment obligations of any person and
which liabilities are not accounted for on the face of the Smedvig Group’s consolidated balance sheet; 

  
 plus 
  

	 	(D)	the aggregate liabilities of the Smedvig Group on a consolidated basis at that date under contracts involving any capital expenditure the aggregate amount of which under all such
contracts exceeds five million Dollars (USD5,000,000) (other than in respect of capital expenditure where the Borrower has notified the Facility Agent of the relevant capital expenditure project and the Facility Agent is satisfied that such
expenditure will be met from funds drawn or to be drawn under this Agreement); 

  
 EXCEPT THAT in relation to (B) above, the net present value of any such charter or other lease agreement shall not be counted in calculating
the aggregate therein specified if or to the extent that, in the opinion of the Facility Agent after review of all relevant documents, there are satisfactory and secure corresponding contractual and/or insurance arrangements in place the effect of
which are or will be fully and simultaneously to compensate the relevant Group Member for any financial exposure thereunder; 
  
 “Total Loss” 
  
 means, in respect of any Unit: 
  

	 	(A)	an actual, constructive, agreed, compromised or arranged total loss; or 

  

	 	(B)	Compulsory Acquisition; 

  
 and, a Total Loss shall be deemed to have occurred for the purposes of this Agreement when: 
  

	 	(i)	if it consists of an actual total loss, at noon Greenwich Mean Time on the actual date of loss or, if that is not known, on the date on which that Unit was last heard of;


  

	 	(ii)	if it consists of a requisitioning for title, at noon Greenwich Mean Time on the date on which the requisition is expressed to take effect by the person requisitioning that Unit;
and 

  

 -15- 









	 	(iii)	if it consists of a constructive, agreed, compromised or arranged total loss, at noon Greenwich Mean Time on the date at which notice of abandonment of that Unit is given to her
insurers for the time being or (if her insurers for the time being do not admit the claim for total loss) at the time on which a total loss claim is subsequently adjudged to have occurred by a competent court or arbitration tribunal or liability in
respect thereof as a total loss is admitted or agreed by the insurers. 

  
 “Total Value Adjusted Assets” 
  
 means, as at any date (but subject to Clause 12.4 (Total Value Adjusted Assets/Total Liability Ratio)), the aggregate of:- 
  

	 	(A)	the total assets of the Smedvig Group at that date as shown in the Smedvig Group’s consolidated balance sheet as such term is defined in accordance with Norwegian GAAP
consistently applied; plus 

  

	 	(B)	the amount by which the aggregate book value of the Units (or interests therein) set forth in the Smedvig Group’s consolidated balance sheet is exceeded by their market value;
or (as the case may be) minus 

  

	 	(C)	the amount by which the aggregate book value of the Units (or interests therein) set forth in the Smedvig Group’s consolidated balance sheet exceeds their market value


  
 where, for the purpose of this definition, the
market value of each Unit shall be determined as the mean average of valuations obtained from three (3) independent brokers appointed by the Borrower and approved by the Facility Agent, such valuations to be obtained in writing by the Borrower as at
30 June and 31 December in each year and copies of which shall be attached to each compliance certificate to be provided under Clause 10.2(C) (Provision of financial and other information) in respect of each such date; 
  
 “Transfer Certificate” 
  
 means a certificate in the form, or substantially in the form, set out in
Schedule 4 executed by a Lender, a Transferee Bank and the Facility Agent whereby:- 
  

	 	(A)	such Lender seeks to procure the transfer to such Transferee Bank of all or a part of such Lender’s rights and obligations hereunder upon and subject to the terms and
conditions set out in Clause 24.3 (Transfers); and 

  

	 	(B)	such Transferee Bank undertakes to perform the obligations it will assume as a result of such certificate being delivered to, and executed by, the Facility Agent as is contemplated
in Clause 24.3 (Transfers); 

  
 “Transfer
Date” 
  
 means, in relation to any Transfer
Certificate, the date specified in such Transfer Certificate as the date for the making of the transfer or, where such transfer is specified as 
  

 -16- 








 being subject to the fulfilment of certain conditions, the date on which the Facility Agent receives a
certificate from the Lender making the transfer confirming that all such conditions have been fulfilled; 
  
 “Transferee Bank” 
  
 shall have the meaning ascribed thereto in Clause 24.3 (Transfers); 
  
 “Transferor Bank” 
  

shall have the meaning ascribed thereto in Clause 24.3 (Transfers); 
  
 “Unit” 
 {Confidential Material}*; 
  
 “Unsecured
Debt” 
  
 means any Financial Indebtedness incurred by
the Guarantor or any other Group Member the payment of which has not been or from time to time is not secured by means of an Encumbrance over any one or more assets of the Smedvig Group (but which shall be calculated to avoid any double-counting
where any two or more members of the Smedvig Group are jointly and severally liable in respect of the same Financial Indebtedness); 
  
 “US GAAP” 
  
 means generally accepted accounting principles and practices in the United States of America; and 
  
 “VAT” 
  
 means value added tax as provided for in the Value Added Tax Act 1994 and
any other tax in any jurisdiction of a similar nature. 
  

	1.2.	Construction 

  
 In this Agreement unless the context otherwise requires:- 
  

	 	(A)	clause headings are inserted for convenience of reference only and shall be ignored in the construction of this Agreement; 

  

	 	(B)	references to Clauses and Schedules are to be construed as references to clauses of and schedules to this Agreement unless otherwise stated and references to this Agreement are to
be construed as references to this Agreement including its Schedules; 

  

	 	(C)	references to (or to any specified provision of) this Agreement or any other document shall be construed as references to this Agreement, that provision or that document as from
time to time amended, supplemented and/or novated; 



	*	The confidential portion of this section of the agreement has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential
treatment. 

  

 -17- 









	 	(D)	references to any party to this Agreement or any other document shall include reference to such party’s successors and permitted assigns; 

  

	 	(E)	words importing the plural shall include the singular and vice versa; 

  

	 	(F)	references to a “person” shall be construed as references to an individual partnership, firm, company, corporation, unincorporated body of persons or any state or any
agency thereof and references to an “undertaking” shall be construed as references to a company, corporation, limited partnership, unlimited partnership, firm or unincorporated body of persons; 

  

	 	(G)	where any matter requires the approval or consent of all or any of the Banks, such approval or consent shall not be deemed to have been given unless given in writing; where any
matter is required to be acceptable to all or any of the Banks, the relevant Bank or Banks shall not be deemed to have accepted such matter unless its or their acceptance is communicated in writing; except where expressly provided otherwise, the
Banks may give or withhold their consent, approval or acceptance at their unfettered discretion without being obliged to give any reason therefor and such consent, approval or acceptance may be given by the relevant Bank or Banks subject to such
conditions as it or they may impose in its or their unfettered discretion; 

  

	 	(H)	a certificate by any Bank as to any amount due or calculation made hereunder shall be conclusive except for manifest error; and 

  

	 	(I)	references to any statute or other legislative provision are to be construed as references to any such statute or other legislative provision as the same may be re-enacted or
modified or substituted by any subsequent statute or legislative provision (whether before or after the date hereof) and shall include any regulations, orders, instruments or other subordinate legislation issued or made under such statute or other
legislative provision. 

  

	1.3.	Accounting terms 

  
 All accounting terms not otherwise defined in this Agreement shall have the meanings assigned to them in accordance with Norwegian GAAP. 
  

	1.4.	Majority Banks 

  
 Where this Agreement provides for any matter to be determined by reference to the opinion of the Majority Banks or to be subject to the consent or request
of the Majority Banks or for any action to be taken on the instructions of the Majority Banks, such opinion, consent, request or instructions shall (as between the Lenders) only be regarded as having been validly given or issued by the Majority
Banks if all the Lenders shall have received prior notice of the matter on which such opinion, consent, request or instructions are required to be obtained and the relevant majority of Lenders shall have given or issued such opinion, consent,
request or instructions but so that, if the Borrower is 
  

 -18- 








 informed by any of the Agents of any opinion, consent, request or instructions given or issued by the
Majority Banks, it shall be entitled (and bound) to assume that such notice shall have been duly received by each Lender and that the relevant majority shall have been obtained to constitute Majority Banks whether or not this is in fact the case.

  

	1.5.	Joint Arrangers 

  
 Where this Agreement provides for any matter to be determined by reference to the opinion of the Joint Arrangers or to be subject to the consent or
request of the Joint Arrangers or for any action to be taken on the instructions of the Joint Arrangers, such opinion, consent, request or instructions shall (as between the Joint Arrangers) only be regarded as having been validly given or issued by
the Joint Arrangers if all the Joint Arrangers shall have received prior notice of the matter on which such opinion, consent, request or instructions are required to be obtained and all the Joint Arrangers shall have given or issued such opinion,
consent, request or instructions but so that, if the Borrower is informed by any of the Agents of any opinion, consent, request or instructions given or issued by the Joint Arrangers, it shall be entitled (and bound) to assume that such notice shall
have been duly received by each Joint Arranger and that all the Joint Arrangers shall have reached unanimous agreement whether or not this is in fact the case. 
  

	2.	THE COMMITMENTS 

  

	2.1.	Agreement to lend 

  
 The Lenders hereby agree to provide to the Borrower a secured, revolving and reducing credit loan facility in the maximum amount of five hundred million
Dollars (USD500,000,000) upon and subject to the terms and conditions of this Agreement and in reliance on the representations and warranties in Clause 9 (Representations and Warranties) and accordingly the Lenders hereby agree to lend Advances to
the Borrower and the obligation of each Lender under this Agreement shall be to contribute its Percentage of each Advance. 
  

	2.2.	Obligations of Lenders several 

  
 The obligations of each Lender under this Agreement are several; the failure of any Lender to perform such obligations shall not relieve any of the Banks
or the Borrower of any of their respective obligations or liabilities under this Agreement nor shall any of the Banks be responsible for the obligations of any Lender (except for its own obligations, if any, as a Lender) nor shall any Lender be
responsible for the obligations of any other Lender under this Agreement. Provided that, in the event of the failure of any Lender (the “defaulting Lender”) to perform its obligations under this Agreement, the Facility Agent shall
consult with the Borrower and the other Lenders with a view to taking steps to mitigate the effects of such default including the procuring of another bank to assume the obligations of the defaulting Lender. 
  

 -19- 









	2.3.	Interests several 

  
 Notwithstanding any other term of this Agreement (but without prejudice to the provisions of this Agreement relating to or requiring action by the
Majority Banks) the interests of each of the Banks are several and the amount due to each of the Banks (each for its own account) is a separate and independent debt. Each of the Banks shall have the right to protect and enforce its respective rights
arising out of this Agreement and it shall not be necessary for any other Bank to be joined as an additional party in any proceedings for this purpose. 
  

	3.	ADVANCES 

  

	3.1.	Drawdown 

  
 Subject to the terms and conditions of this Agreement, an Advance may be made to the Borrower following receipt by the Facility Agent from the Borrower of
a Drawdown Notice not later than 10.00 a.m. Oslo time on the fourth Banking Day before the date on which the Advance is intended to be made which shall be a Banking Day falling within the Availability Period. A Drawdown Notice shall be effective on
actual receipt by the Facility Agent and, once given, shall, subject as provided in Clause 6.6(A) (Market disruption; non-availability), be irrevocable. No Drawdown Notice may be given in respect of an amount which is the subject of a notice of
cancellation under Clause 5.3 (Voluntary cancellation of Commitments) or Clause 5.4 (Additional partial cancellation). 
  

	3.2.	Amount 

  
 Each Advance shall be an integral multiple of five million Dollars (USD5,000,000) or the balance of the Available Commitments or such other amount (not
exceeding the Available Commitments) as the Lenders may agree but no Advance may be drawn down on any day of an amount exceeding the Available Commitments on such day, taking into account for this purpose any Advance (or part thereof) to be repaid
or prepaid on such day and any other Advance which is to be made on such day which is the subject of a current Drawdown Notice. 
  

	3.3.	Availability 

  
 Upon receipt of a Drawdown Notice complying with the terms of this Agreement the Facility Agent shall notify the Facility Agent and each Lender thereof
and of the date on which the Advance is to be made and, subject to the provisions of Clause 4 (Conditions Precedent), on such date each of the Lenders shall make available to the Facility Agent its portion of such Advance for payment by the Facility
Agent in accordance with Clause 8.2 (Payments by the Lenders). 
  

 -20- 









	3.4.	The Termination Date 

  
 Without prejudice to any other provisions of this Agreement, the Commitments shall in any event be reduced to zero on the Termination Date and no Advances
shall be made to the Borrower less than thirty (30) days before the Termination Date. 
  

	3.5.	Number of Advances 

  
 Notwithstanding the provisions of Clause 3.2 (Amount), Advances may be drawn only so that the number of separate Advances outstanding at any time does not
exceed five (5) or such other number as may be agreed by all the Lenders. 
  

	3.6.	Application of Advances 

  
 Any Advances to be drawn down shall only be available for drawing hereunder if they are applied for general corporate purposes except for amounts pre-paid
in accordance with Clause 5.5 (Mandatory Prepayment on sale or loss of certain Secured Assets). 
  

	4.	CONDITIONS PRECEDENT 

  

	4.1.	Documents and evidence 

  
 The obligation of each Lender to make its Commitment available shall be subject to the condition that the Facility Agent, or its duly authorised
representative, shall have received on or before the Closing Date all the security (in form agreed with the Borrower and acceptable to the Documentation Agent), documents and evidence specified in Schedule 3 in form and substance satisfactory to the
Facility Agent with notice to all Lenders. 
  

	4.2.	General conditions precedent 

  
 The obligation of each Lender to make its Commitment available in respect of any Advance shall be subject to the further conditions that, as at the
Drawdown Date of the relevant Advance:- 
  

	 	(A)	the representations and warranties contained in Clause 9.2 (Continuing representations and warranties) are true and correct on and as of such date as if each was made with respect
to the facts and circumstances existing at such time; and 

  

	 	(B)	no Event of Default or Possible Event of Default shall have occurred and be continuing or would result from the making of the Advance on such date. 

  

	4.3.	Waiver of conditions precedent 

  
 The conditions specified in this Clause 4 (Conditions Precedent) are inserted solely for the benefit of the Lenders and may be waived on their behalf in
whole or in part and with or without conditions by the Facility Agent acting on the instruction of all the Lenders without prejudicing the right of the Facility Agent acting on such instructions to require fulfilment of such conditions in whole or
in part in respect of any other Advance. 
  

 -21- 









	4.4.	Notification to Lenders, Facility Agent and Documentation Agent 

  
 The Facility Agent shall notify the Lenders and the Documentation Agent promptly after receipt by it of the security, documents and evidence referred to
in Clause 4.1 (Documents and evidence) in form and substance satisfactory to it. 
  

	5.	REPAYMENT, REDUCTION AND CANCELLATION 

  

	5.1.	Reductions of Commitments and repayment of Advances 

  
 The Borrower shall on each Reduction Date repay all such Advances or parts thereof as may be necessary to reduce the Commitments with respect to Advances
made in accordance with the provisions of Schedule 8. Available Commitments shall be automatically reduced in accordance with the provisions of Schedule 8. All outstanding balances of all Advances and all other sums (if any) then owing under this
Agreement shall be repaid or paid in full on the Termination Date. 
  

	5.2.	Voluntary prepayment 

  
 The Borrower may at any time by notice to the Facility Agent (effective only on actual receipt) prepay the whole or any part (being integral multiple
payments of five million Dollars (USD5,000,000) or any larger sum which is an integral multiple thereof) of any Advance prior to the Termination Date on not less than four (4) Banking Days’ notice (whether or not any part of the Commitment is
also being cancelled on such date pursuant to any provision of this Agreement) and the Borrower shall, when making such prepayment, make such prepayment together with any interest accrued on such amounts and any amounts as referred to in Clause 5.7
(Break costs). For the avoidance of doubt, any amount voluntarily prepaid pursuant to this Clause 5.2 may be redrawn by the Borrower subject always to the other provisions of this Agreement including, without limitation, Clause 3 (Advances) and
Clause 4 (Conditions Precedent). 
  

	5.3.	Voluntary cancellation of Commitments 

  
 The Borrower may at any time during the Availability Period by notice to the Facility Agent (effective only on actual receipt) cancel with effect from a
date not less than fifteen (15) days after the receipt by the Facility Agent of such notice the whole or any part (being ten million Dollars (USD10,000,000) or any larger sum which is an integral multiple of five million Dollars (USD5,000,000) but
not more than the Available Commitments of all of the Lenders as at such date) of the total of the Available Commitments as at such date of all the Lenders. Any such notice of cancellation, once given, shall be irrevocable and upon such cancellation
taking effect the Commitment of each of the Lenders shall be reduced proportionately. 
  

 -22- 









	5.4.	Additional partial cancellation 

  
 The Borrower may also at any time during the Availability Period by notice to the Facility Agent (effective only on actual receipt) cancel with effect
from a date not less than fifteen (15) days after receipt by the Facility Agent of such notice the whole but not part only, but without prejudice to its obligations under Clauses 7.1 (Illegality) 7.2 (Increased costs) and 8.6 (Grossing-up for
Taxes), of the Commitment of any Lender to which the Borrower shall have become obliged to pay additional amounts under Clause 7.2 (Increased costs) or 8.6 (Grossing-up for Taxes). Upon any notice of such prepayment being given, the Commitment of
the relevant Lender shall be reduced to zero and:- 
  

	 	(A)	the Borrower shall be obliged to prepay the Contribution of such Lender and such Lender’s related costs (interest, break costs etc) on such date; and 


 

	 	(B)	such Lender shall be under no obligation to issue any further Advances. 

  

	5.5.	Mandatory Prepayment on sale or loss of certain Secured Assets 

  

	 	(A)	In the event of the sale or Total Loss of a Secured Asset, the Committed Amounts shall be reduced by {Confidential Material}*. The reduction amount following a sale of a
Secured Asset will be available subject always to the other provisions of this Agreement, provided that the fair market value of such unit shall not be less than 1.65 times the amount redrawn. 

  

	 	(B)	Subject to Clause 11.5, any dividend payments and/or payments made in respect of buy-back of own issued shares made in 2004 in excess of NOK1 per share shall constitute a mandatory
reduction of the Committed Amount with the same excess amount and at the same time. 

  

	 	(C)	Subject to Clause 11.5, any dividend payments and/or payments made in respect of buy-back of own issued shares made in 2005 in excess of NOK1.5 per share shall constitute a
mandatory reduction of the Committed Amount with the same excess amount and at the same time. 

  

	 	(D)	Any amount paid by the Borrower or any other member of the Smedvig Group in relation to Project Alpha in excess of {Confidential Material}* shall constitute a reduction of
the Committed Amount with the same excess amount, such reduction to be made equally over eight (8) quarters, starting on the first Reduction Date following such payment. 



	*	The confidential portion of this section of the agreement has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential
treatment. 

  

 -23- 









	5.6.	Effect of prepayment 

  
 The following provisions shall apply in respect of any prepayment made or to be made under this Agreement:- 
  

	 	(A)	any notice given by the Borrower under this Agreement stating its intention to make a prepayment shall be irrevocable and shall oblige the Borrower to pay to the Facility Agent on
behalf of the relevant Lender or Lenders the amount therein stated on the date therein stated; and 

  

	 	(B)	prepayments under this Agreement shall be made together with accrued interest thereon and the payment of all other sums then owing hereunder including, without limitation, any sum
due under Clause 5.7 (Break costs). 

  

	5.7.	Break costs 

  
 If any repayment or prepayment of an Advance or part thereof is made otherwise than on the last day of an Interest Period relating thereto, the Borrower
shall pay to the Facility Agent for the account of the Lenders on demand such additional amount as the Facility Agent may certify (such certificate to contain a calculation thereof in reasonable detail and to be, in the absence of manifest error,
conclusive) as necessary to compensate each Lender for any loss or expense on account of funds borrowed, contracted for or utilised to fund the amount so repaid or prepaid up to the end of the then current Interest Period fixed in respect of the
amount repaid or prepaid. Each such Lender shall promptly provide the Facility Agent with a written calculation of any such loss or expense incurred by it. 
  

	6.	INTEREST ON ADVANCES 

  

	6.1.	Normal interest rate 

  
 Subject to Clauses 6.3 (Default interest) and 6.6 (Market disruption; non-availability) and any other relevant provision of this Agreement, the rate of
interest applicable to each Advance for each Interest Period relating thereto shall be the rate per annum determined by the Facility Agent to be the aggregate of (A) the Applicable Margin, (B) the Associated Costs Rate at the relevant time and (C)
LIBOR for that Interest Period. The Borrower shall pay interest on each Advance at such rate in respect of each Interest Period in arrears on each Interest Payment Date relating thereto. 
  
 Interest Periods in respect of each Advance shall be determined as follows:- 
  

	 	(A)	the Borrower shall give notice to the Facility Agent, to be received by the Facility Agent not later than 10.00 a.m. Oslo time on the fourth Banking Day before the commencement of
each Interest Period relating to such Advance, specifying whether such Interest Period is to be of one (1), three (3) or six (6) month’s duration (or such longer period as the Lenders may agree) provided that 

  

 -24- 









	 	(i)	no more than three (3) Interest Periods of one (1) month may be selected by the Borrower in respect of the Advances during any calendar year; and 

  

	 	(ii)	the Borrower shall ensure that, if any Interest Period would otherwise extend beyond the next following Reduction Date, an Interest Period or Periods shall be selected so as to
terminate on such Reduction Date in relation to an Advance or Advances (or portion thereof) equal at least to the Scheduled Reduction Amount relating to that Reduction Date (and for such purpose any Advance may, if necessary, be divided into two
portions hereunder); 

  

	 	(B)	if either:- 

  

	 	(i)	the Borrower fails to select an Interest Period in accordance with paragraph (A) of this Clause 6.1; or 

  

	 	(ii)	the Facility Agent certifies that deposits for the period selected by the Borrower are not available to each of the Lenders in the ordinary course of business in the London
Interbank Eurocurrency Market to fund such Advance, 

  
 then, subject to the provisions of paragraph (A) above, the Borrower shall be deemed to have selected an Interest Period of three (3) months; 
  

	 	(C)	Interest Periods shall commence, in the case of the first Interest Period relating to such Advance, on the Drawdown Date in respect thereof and, in the case of Interest Periods
other than the first, on the expiry of the preceding Interest Period; 

  

	 	(D)	if an Interest Period would otherwise end on a day which is not a Banking Day, the Interest Period shall be extended until the next following Banking Day unless the next following
Banking Day falls in the next calendar month in which case the Interest Period will be shortened to expire on the preceding Banking Day; 

  

	 	(E)	if an Interest Period commences on the last Banking Day in a month or if there is no day in the month in which the Interest Period will end which corresponds numerically to the day
on which it begins, the Interest Period shall end on the last Banking Day in that month; 

  

	 	(F)	notwithstanding any other provision of this Clause 6.1, the final Interest Period in respect of such Advance shall be fixed so as to terminate on the Termination Date.


  

	6.2.	Variable Margin 

  

	 	(A)	During each Margin Re-Calculation Period the Facility Agent shall review the Guarantor’s ratio of Net Funded Debt (as at the relevant Quarterly Financial Statements Preparation
Date) to EBITDA (prevailing during the four (4) financial 

  

 -25- 








 quarters ending on the relevant Quarterly Financial Statements Preparation Date which immediately
preceded the relevant Margin Re-Calculation Period) (for the purpose of this clause 6.2 the “Prevailing Ratio”) based on the calculations contained in the relevant Certificate of Compliance accompanying the Quarterly Financial Statements.

  

	 	(B)	The Facility Agent shall notify the Borrower and the Lenders in writing before the expiry of the Margin Re-Calculation Period of the Prevailing Ratio and whether or not the
Prevailing Ratio would result in a change of the Applicable Margin. 

  

	 	(C)	Any adjustment in the Applicable Margin as a result of clauses 6.2(A) and 6.2(B) shall take effect on and with effect from the relevant Margin Adjustment Date and apply to all of
the Outstanding Indebtedness as at such date until further adjusted under the provisions of this clause 6.2 and the Facility Agent’s notice referred to in clause 6.2(B) shall include a statement setting out the re-calculated interest due with
respect to the Outstanding Indebtedness. 

  

	6.3.	Default interest 

  
 If the Borrower fails to pay on the due date any sum due under this Agreement (including, without limitation, any sum payable pursuant to this Clause 6.3)
the Borrower shall, without affecting any other remedy of the Lenders, pay interest on such sum from the due date to the actual date of payment (as well after as before judgment). Such interest shall accrue on a daily basis:- 
  

	 	(A)	in relation to principal amount of any Advance which the Lenders continue to fund throughout its Interest Period without breaking matching deposits or other underlying funding
arrangements until the end of such Interest Period, at the rate equal to the current Interest Rate in respect thereof plus two per cent (2%) per annum; and 

  

	 	(B)	in relation to each other amount, at the rate computed by the Facility Agent and certified by the Facility Agent to the Borrower as being the aggregate of:-


  

	 	(i)	the Applicable Margin plus two per cent (2%); and 

  

	 	(ii)	LIBOR (as determined by reference to deposits on an overnight or call basis or for such other period or periods as the Facility Agent may in its unfettered discretion select)


  
 such interest to be compounded at the end of
the period selected by the Facility Agent and to be payable on demand. 
  

	6.4.	Notification of interest rate 

  
 The Facility Agent shall notify the Borrower and promptly of each rate of interest determined by it under this Clause 6. 
  

 -26- 









	6.5.	Reference Bank quotations 

  
 If any Reference Bank is unable or otherwise fails to furnish a quotation for the purpose of calculating LIBOR pursuant to the proviso contained in the
definition of LIBOR the interest rate shall be determined, subject to Clause 6.6 (Replacement of Reference Banks) on the basis of the quotations furnished by the remaining Reference Banks. 
  

	6.6.	Replacement of Reference Banks 

  
 If:- 
  

	 	(A)	the whole of the Contribution (if any) of any Reference Bank is prepaid; or 

  

	 	(B)	the Commitments (if any) of any Reference Bank are reduced to zero in accordance with Clauses 5.4 (Additional partial cancellation) or 7 (Illegality, Increased Costs and Force
Majeure); or 

  

	 	(C)	a Reference Bank transfers the whole of its rights and obligations (if any) as a Lender under this Agreement; or 

  

	 	(D)	where applicable, any Reference Bank ceases to provide quotations to the Facility Agent for the purposes of determining LIBOR 

  
 the Facility Agent may, acting on the instructions of the Majority Banks,
terminate the appointment of such Reference Bank and appoint another Lender to replace such Reference Bank. 
  

	6.7.	Market disruption; non-availability 

  

	 	(A)	If at any time prior to the commencement of an Interest Period in respect of any Advance:- 

  

	 	(i)	the Facility Agent shall have determined (which determination shall, in the absence of manifest error, be conclusive) that adequate and fair means do not exist for ascertaining
LIBOR during such Interest Period; 

  

	 	(ii)	where applicable, none of the Reference Banks supplies the Facility Agent with a quotation for the purpose of calculating LIBOR; or 

  

	 	(iii)	the Facility Agent shall have received notification from any Lender that deposits in Dollars are not available to such Lender in the London Interbank Eurocurrency Market in the
ordinary course of business in sufficient amounts to fund its Contribution to such Advance during such Interest Period or, where applicable, that the arithmetic mean of the quotations for LIBOR supplied by the Reference Banks does not accurately
reflect the cost to such Lender of obtaining such deposits during such Interest Period 

  

 -27- 








 the Facility Agent shall forthwith give notice (a “Determination Notice”) thereof to the
Borrower, and each of the Lenders and, if such Determination Notice is given in respect of an Advance prior to its drawdown hereunder, such Advance shall not be made. A Determination Notice shall contain particulars of the relevant circumstances
giving rise to its issue. 
  

	 	(B)	After the giving of any Determination Notice no further Advances may be borrowed until notice to the contrary is given to the Borrower by the Facility Agent.


  

	 	(C)	During the period of twenty (20) days following the giving of any Determination Notice, the Borrower, the Facility Agent and the Lenders shall negotiate in good faith in order to
arrive at a mutually acceptable substitute basis for each Lender to continue its Contribution to the Advance and, if within such twenty (20) day period the Borrower, the Facility Agent and the Lenders shall agree in writing upon such an alternative
basis (the “Substitute Basis”) the Substitute Basis shall be retroactive to and effective from the first day of the relevant Interest Period. 

  

	 	(D)	If the Borrower, the Facility Agent and the Lenders fail to agree on a Substitute Basis within such twenty (20) day period, the Borrower shall pay interest on the Advance to each
Lender at the rate certified by each such Lender and notified through the Facility Agent to the Borrower as being a reasonable interest rate reflecting the cost to such Lender of funding its Contribution to such Advance during the period from the
date of the relevant Determination Notice, plus the Applicable Margin, and such rate plus the Applicable Margin shall be the Substitute Basis. 

  

	 	(E)	So long as any Substitute Basis is in force, the Facility Agent shall from time to time (but at least monthly) and in consultation with the Lenders review whether or not the
circumstances are such that such Substitute Basis is no longer necessary and, if the Facility Agent so determines it shall notify the Borrower and the Lenders that the Substitute Basis shall cease to be effective from such date as the Facility Agent
shall reasonably specify. 

  

	7.	ILLEGALITY, INCREASED COSTS AND FORCE MAJEURE


  

	7.1.	Illegality 

  
 If any law, regulation or regulatory requirement or any judgment, order or direction of any court, tribunal or authority binding upon any Lender in the
jurisdiction in which it is formed or has its principal office or the office identified against its name in this Agreement (or in any Transfer Certificate, in the case of a Transferee Bank) or in which any action is required to be performed by it
for the purposes of this Agreement (whether or not in force before the date of this Agreement) causes any Lender to believe that it has become unlawful for that Lender to contribute to any Advance or to fund its 
  

 -28- 








 Contribution, then that Lender shall promptly inform the Facility Agent and the Facility Agent shall
notify the Borrower whereupon:- 
  

	 	(i)	the relevant Lender (the “Affected Party”) shall, following consultation with the Borrower, use all reasonable efforts to avoid the effects of such introduction,
imposition, variation or change and in particular shall consider, subject to obtaining any necessary consents, transferring at par its rights and obligations under this Agreement to another legal entity approved by the Borrower not affected by such
law; 

  

	 	(ii)	if the Affected Party, upon having used all reasonable efforts, is unable, within sixty (60) days following the date upon which the Affected Party became aware of any such
introduction, imposition, variation or change, or such shorter period permitted thereby, to avoid the effect thereof, or the Borrower fails within such period to agree to any proposal put forward by the Affected Party to avoid the effects of such
introduction, imposition variation or change, then the Facility Agent shall, at the request and on behalf of the Affected Party, give notice to the Borrower that on such date or on a future specified date, in either case not being earlier than the
latest date permitted by such introduction, imposition, variation or change:- 

  

	 	(a)	such Lender’s Commitment shall be reduced to zero; and 

  

	 	(b)	the Borrower shall be obliged to prepay the Contribution of such Lender either (i) forthwith or (ii) on a future specified date not being earlier than the latest date permitted by
the relevant law or regulation. 

  

	7.2.	Increased costs 

  
 If the result of any change in, or in the interpretation or application of, any law or regulation (including, without limitation, those relating to
Taxation, capital adequacy, liquidity, reserve assets and special deposits) is to:- 
  

	 	(A)	subject any Lender to Taxes or change the basis of Taxation of any Lender with respect to any payment under this Agreement (other than Taxes or Taxation on the overall net income,
profits or gains of such Lender imposed in the jurisdiction in which its principal office or Lending Branch is located); and/or 

  

	 	(B)	increase the cost to, or impose an additional cost on, any Lender in making or keeping its Commitment available or maintaining or funding its Contribution or otherwise in
maintaining its obligations under this Agreement; and/or 

  

	 	(C)	reduce the amount payable or the effective return to any Lender under this Agreement; and/or 

  

 -29- 









	 	(D)	reduce any Lender’s rate of return on its capital by reason of a change in the manner in which it is required to allocate capital resources to its obligations under this
Agreement; and/or 

  

	 	(E)	require any Lender to make a payment or forgo a return on or calculated by reference to any amount received or receivable by it under this Agreement 

  
 then and in each such case (but subject to Clause 7.3 (Exceptions)):-

  

	 	(i)	such Lender shall notify the Borrower in writing of such event promptly upon it becoming aware of the same specifying reasonable details of the relevant event and of any increased
cost, reduction in any rate of return or increased liability and its method of calculation and attribution to its obligations under this Agreement; and 

  

	 	(ii)	the Borrower shall on demand, made at any time whether or not the relevant Lender’s Contribution has been repaid, pay to the Facility Agent for the account of such Lender the
amount which such Lender specifies (in a certificate setting forth the basis of the computation of such amount in reasonable detail but not including any matters which such Lender regards as confidential in relation to its funding arrangements) is
required to compensate such Lender for such increased cost, reduction, payment or forgone return. 

  

	7.3.	Exceptions 

  
 Nothing in Clause 7.2 (Increased costs) shall entitle any Lender to compensation for any such increased costs, reduction, payment or foregoing return to
the extent that the same is:- 
  

	 	(A)	attributable to changes in capital adequacy or weightings arising as a result of the recommendations of the paper titled “International Convergence on Capital Measurement and
Capital Standards” dated July 1988 prepared by the Basle Committee on Banking Regulations and Supervisory Practices, as amended in November 1991; or 

  

	 	(B)	the subject of an additional payment under Clause 8.6 (Grossing-up for Taxes). 

  


	7.4.	Mitigation 

  
 If circumstances arise which would, or would upon the giving of notice, result in:- 
  

	 	(A)	the Borrower being required to make an increased payment to a Lender pursuant to Clause 8.6 (Grossing-up for Taxes); 

  

 -30- 









	 	(B)	the reduction of the Commitment of a Lender to zero or the Borrower being required to prepay the Contribution of a Lender pursuant to Clause 7.1 (Illegality); or


  

	 	(C)	the Borrower being required to make a payment to a Lender to compensate such Lender for an increased cost, reduction, payment or forgone return pursuant to Clause 7.2 (Increased
costs) 

  
 then, without in any way limiting,
reducing or otherwise qualifying the obligations of the Borrower under this Clause 7 and Clause 8.6 (Grossing-up for Taxes), the relevant Lender shall, if so required by the Borrower and at the Borrower’s expense, transfer its rights and
obligations under this Agreement to another bank or financial institution nominated by the Borrower and approved by the other Lenders. 
  

	7.5.	Force majeure 

  
 None of the Banks shall be liable for any failure to perform the whole or any part of this Agreement resulting directly or indirectly from the action or
inaction or purported action of any governmental or local authority or any strike, lockout, boycott or blockade (including any strike, lockout, boycott or blockade effected by or upon any of the Banks or any of their respective employees), from any
act of God or war (whether declared or not) affecting any of the Banks or any other circumstances whatsoever outside their control. 
  

	8.	PAYMENTS 

  

	8.1.	Payments by the Borrower 

  
 All payments to be made to any of the Banks by the Borrower under this Agreement shall be made not later than 10.00 a.m. New York City time on the due
date in Dollars and in same day funds to the account of the Facility Agent at Bank of New York, New York (Account Number: 8033261374) quoting reference “Smedvig Rig/Credit Admin. Ship” or at such other office or bank as the Facility Agent
may from time to time designate. 
  

	8.2.	Payments by the Lenders 

  
 All sums to be advanced by the Lenders to the Borrower under this Agreement shall be remitted in Dollars on the date of the Advance to the account of the
Facility Agent at such bank as the Facility Agent may have notified to the Lenders and shall be paid by the Facility Agent on such date in like funds as are received by the Facility Agent to the account specified in the relevant Drawdown Notice.

  

	8.3.	Facility Agent may assume receipt 

  
 Where any sum is to be paid under this Agreement to the Facility Agent for the account of another person, the Facility Agent may assume that the payment
will be made when due and the Facility Agent may (but shall not be obliged to) make such sum available to 
  

 -31- 








 the person so entitled. If it proves to be the case that such payment was not made to the Facility Agent,
then the person to whom such sum was so made available shall on request refund such sum to the Facility Agent together with interest thereon sufficient to compensate the Facility Agent for the cost of making available such sum up to the date of such
repayment and the person by whom such sum was payable shall indemnify the Facility Agent and/or person to whom such sum was made available by the Facility Agent for any and all loss or expense which the Facility Agent or such person may sustain or
incur as a consequence of such sum not having been paid on its due date. 
  

	8.4.	Non-Banking Days 

  
 When any payment under this Agreement would otherwise be due or the Termination Date or any Reduction Date would otherwise fall on a day which is not a
Banking Day, the due date for payment or (as the case may be) the Termination Date or such Reduction Date shall be extended to the next following Banking Day unless such Banking Day falls in the next calendar month in which case payment shall be
made, or (as the case may be) the Termination Date or such Reduction Date shall fall, on the immediately preceding Banking Day. 
  

	8.5.	Calculations 

  
 All interest, commissions, fees and other payments of an annual nature hereunder shall accrue from day to day and be calculated on the basis of actual
days elapsed and a three hundred and sixty (360) day year 
  

	8.6.	Grossing-up for Taxes 

  

	 	(A)	Grossing-up 

  
 If at any time the Borrower and/or the Guarantor is required to make any deduction or withholding in respect of Taxes from any payment due hereunder for
the account of any of the Banks (or if the Facility Agent is required to make any deduction or withholding from a payment to any of the Banks), the sum due from the Borrower and/or the Guarantor in respect of such payment shall be increased to the
extent necessary to ensure that, after the making of such deduction or withholding, each Bank receives on the due date for such payment (and retains, free from any liability in respect of such deduction or withholding) a net sum equal to the sum
which it would have received had no such deduction or withholding been required to be made and the Borrower and/or the Guarantor shall indemnify each Bank against any losses or costs incurred by any of them by reason of any failure of the Borrower
and/or the Guarantor to make any such deduction or withholding or by reason of any increased payment not being made on the due date for such payment. The Borrower and/or the Guarantor shall promptly deliver to the Facility Agent any receipts,
certificates or other proof evidencing the amounts (if any) paid or payable in respect of any deduction or withholding as aforesaid. 
  

 -32- 









	 	(B)	Tax credits 

  
 If, following any such deduction or withholding as is referred to in paragraph (A) of this Clause 8.6 from any payment by the Borrower, the recipient of
that payment shall determine in its sole discretion that it has received fully utilised and retained on an affiliated group basis a credit against or remission for any Taxes payable by it, such recipient shall, subject to the Borrower having made
any increased payment in accordance with paragraph (A) of this Clause 8.6 and to the extent that the recipient can do so without prejudicing the retention of the amount of such credit or remission and without prejudice to the right of the recipient
to obtain any other relief or allowance which may be available to it, reimburse the Borrower with such amount as the recipient shall in its absolute discretion certify to be the proportion of such credit or remission as will leave the recipient
(after such reimbursement) in no worse position than it would have been in had there been no such deduction or withholding from the payment by the recipient as aforesaid. Such reimbursement shall be made forthwith upon the relevant Bank certifying
that the amount of such credit or remission has been received by it and any payment so made shall be conclusive evidence of the amount due to the Borrower and will be accepted by the Borrower in full and final settlement of its rights under this
Clause 8.6(B). Nothing contained in this Agreement shall oblige the recipient to rearrange its tax affairs or to disclose any information regarding its tax affairs and computations. Without prejudice to the generality of the foregoing, the Borrower
shall not, by virtue of this Clause 8.6(B), be entitled to enquire about the recipient’s tax affairs. 
  

	8.7.	Currency of account 

  
 If any sum due from the Borrower hereunder, or under any order or judgment given or made in relation hereto, has to be converted from the currency
(“the first currency”) in which the same is payable hereunder or under such order or judgment into another currency (“the second currency”) for the purpose of:- 
  

	 	(A)	making or filing a claim or proof against the Borrower; 

  

	 	(B)	obtaining an order or judgment in any court or other tribunal; or 

  

	 	(C)	enforcing any order or judgment given or made in relation thereto 

  
 the Borrower shall indemnify and hold harmless the Banks from and against any damages or losses suffered as a result of any discrepancy between (i) the
rate of exchange used for such purpose to convert the sum in question from the first currency into the second currency and (ii) the rate or rates of exchange at which the Facility Agent may in the ordinary course of business purchase the first
currency with the second currency upon receipt of a sum paid to it on behalf of the Banks in satisfaction, in whole or in part, of any such order, judgment, claim or proof. The above indemnity shall constitute a separate and independent obligation
of the Borrower from its other obligations and shall apply irrespective of any indulgence granted by the Banks. 
  

 -33- 









	8.8.	Bank accounts 

  
 Each Lender shall maintain, in accordance with its usual practice, an account or accounts evidencing the amounts from time to time lent by, owing to and
paid to it under this Agreement. The Facility Agent shall maintain a control account showing the Advances and other sums owing to the respective Banks hereunder and all payments in respect thereof made from time to time. The control account shall,
in the absence of manifest error, be conclusive as to the amount from time to time owing to each of the Banks under this Agreement. 
  

	8.9.	Manner of application 

  
 Where any amount is due and payable from the Borrower hereunder and any payment is received from the Borrower of less than the whole of such outstanding
amount, the amount received shall be applied in the following order (or such other order as the Lenders shall decide) and such manner of application shall override any appropriation made by the Borrower:- 
  

	 	FIRST:	in or towards satisfaction of all sums due hereunder other than principal of or interest on any Advance; 

  

	 	SECONDLY:	in or towards satisfaction of interest accrued on the Advances; and 

  

	 	THIRDLY:	in or towards satisfaction of the Advances. 

  

	8.10.	Value added tax 

  
 All consideration expressed to be payable under any of the Security Documents by the Borrower shall be deemed to be exclusive of any VAT. If VAT is
chargeable on any supply made by the Lenders to the Borrower in connection with a Security Document, the Borrower shall pay to the Facility Agent (in addition to and at the same time as paying the consideration) an amount equal to the amount of the
VAT. 
  
 Where a Security Document requires the Borrower to
reimburse the Facility Agent for any costs or expenses, the Borrower shall also at the same time pay and indemnify the Facility Agent against all VAT incurred by the Facility Agent in respect of the costs or expenses to the extent that the Facility
Agent reasonably determines that it is not entitled to credit or repayment of the VAT. 
  

 -34- 









	9.	REPRESENTATIONS AND WARRANTIES 

  

	9.1.	Initial representations and warranties 

  
 The Borrower represents and warrants to the Banks that as at the date hereof and as of the first Drawdown Date:- 
  

	 	(A)	Non-conflict with laws 

  
 The entry into and performance of each of the Security Documents and the transactions contemplated thereby do not and will not conflict with any law or
regulation or any official or judicial order. 
  

	 	(B)	No default 

  
 No event has occurred which constitutes (or which, with the giving of notice, lapse of time, determination of materiality or other condition would or
might constitute) a default under:- 
  

	 	(i)	any contract or document relating to any Financial Indebtedness of the Borrower or any Group Member; or 

  

	 	(ii)	any other agreement to which any Group Member is a party the breach of which would or might reasonably be expected to have a material adverse effect on the ability of the Borrower
to perform its obligations under this Agreement (including, without limitation, its obligations as to the financial condition of the Smedvig Group set out in Clause 12 (Financial Condition)). 

  

	 	(C)	Consents 

  
 All authorisations, approvals, consents, licences, exemptions, filings, registrations, notarisations and other matters, official or otherwise, required by
each Obligor in connection with the entry into, performance, validity and enforceability of each of the Security Documents and the transactions contemplated thereby have been obtained or effected and are in full force and effect. 
  

	 	(D)	Accuracy of information 

  
 All information furnished by or on behalf of the Borrower and the Guarantor relating to its business and affairs in connection with this Agreement was
true and correct in all material respects when made and there are no other material facts or considerations the omission of which at the date of this Agreement would render any such information misleading. 
  

 -35- 









	 	(E)	Full disclosure 

  
 Each of the Borrower and the Guarantor have fully disclosed in writing to the Lenders through the Facility Agent all facts relating to itself and the
Smedvig Group which it knows or should reasonably know and which might reasonably be expected to influence the Lenders in deciding whether or not to enter into this Agreement. 
  

	 	(F)	Accounts 

  
 The audited consolidated profit and loss account and balance sheet of the Smedvig Group for the financial year ended 31 December 2002 (which accounts were
prepared in accordance with Norwegian GAAP) fairly represent the consolidated financial condition of the Smedvig Group as at 31 December 2002 and since that date there has been no material adverse change in the consolidated financial condition of
the Smedvig Group as shown in such audited accounts save as disclosed in writing to the Facility Agent. 
  

	 	(G)	No encumbrances 

  
 None of the assets or rights of any Group Member is subject to any Encumbrance except Permitted Encumbrances. 
  

	 	(H)	Winding-up, etc. 

  
 No Group Member has taken any corporate action nor have any other steps been taken or legal proceedings been started or (to the best of the
Borrower’s knowledge and belief) threatened against any Group Member for its winding-up or dissolution or for the appointment of a liquidator, administrator, receiver, administrative receiver, trustee or similar officer of such Group Member or
any or all of its assets or revenues nor has any Group Member sought any other relief under any applicable insolvency or bankruptcy law. 
  

	 	(I)	Litigation 

  
 Except in relation to the Balder Disputes, no litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency
(including but not limited to, investigative proceedings), are current or pending or (to the best of the Borrower’s knowledge and belief) threatened, which involve a claim against any Group Member in an amount exceeding {Confidential
Material}* or the equivalent in any other currency. 


	*	The confidential portion of this section of the agreement has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential
treatment. 

  

 -36- 









	 	(J)	Tax liabilities 

  
 Except as disclosed in writing to the Facility Agent, each Group Member has complied with all taxation laws in all jurisdictions in which it is subject to
Taxation and has paid all Taxes due and payable by it. No claims are being asserted against any Group Member with respect to Taxes for an amount exceeding one million Dollars (USD1,000,000). 
  

	 	(K)	Taxes on payments 

  
 All amounts payable by the Borrower hereunder may be made free and clear of and without deduction for or on account of any Taxes. 
  

	 	(L)	Ownership of shares 

  
 The corporate structure diagram of the Smedvig Group set out in Schedule 7 is true, accurate and complete and represents the entire corporate structure of
the Smedvig Group. 
  

	 	(M)	Status of Secured Units 

  
 The Secured Units will be: 
  

	 	(i)	in class and free from any requirement or other notation of the relevant classification society which affects class and has not been complied with in accordance with its terms;


  

	 	(ii)	not:- 

  

	 	(a)	under arrest; or 

  

	 	(b)	in the possession of any person or subject to a possessory lien; or 

  

	 	(c)	subject to any liens or Encumbrances other than Permitted Encumbrances; 

  

	 	(iii)	insured in accordance with the requirements of Clause 10.9 (Insurances); 

  

	 	(N)	No money laundering 

  
 In relation to the utilisation by the Borrower of the facilities granted to it hereunder, the performance and discharge of its obligations and liabilities
under this Agreement and the Security Documents to which it is a party, and the transactions and other arrangements effected or contemplated by this Agreement and the Security Documents to which the Borrower is a party, the Borrower confirms that it
is acting for its own account and that the foregoing will not involve or lead to contravention of any law, official requirement or other regulatory measure or procedure implemented to combat “money laundering” (as defined in Article 1 of
the Directive (91/308/EEC) of the Council of the European Communities). 
  

 -37- 









	9.2.	Continuing representations and warranties 

  
 The Borrower represents and warrants to the Banks that as at the date hereof and as otherwise provided in Clause 9.3 (Repetition of representations and
warranties):- 
  

	 	(A)	Status 

  
 The Borrower is a limited liability company, duly constituted and validly existing under the laws of the Kingdom of Norway possessing perpetual corporate
existence, the capacity to sue and be sued in its own name and the power to own its assets and carry on its business as it is now being conducted. 
  

	 	(B)	Powers and authority 

  
 Each Obligor has the power and capacity to enter into, and to perform its obligations under each of the Security Documents to which it is a party and has
taken all necessary action to authorise its entry into each of the Security Documents to which it is a party and the performance by it of its obligations thereunder. 
  

	 	(C)	Legal validity 

  
 This Agreement and, when executed, each of the other Security Documents will constitute the legal, valid and binding obligations of the relevant Group
Member enforceable in accordance with its terms except as such enforcement may be limited by any relevant bankruptcy, insolvency, administration or similar laws affecting creditors’ rights generally and by general principles of equity.

  

	 	(D)	Non-conflict with constitutional document and other agreements 

  
 The entry into and performance of each of the Security Documents and the transactions contemplated hereby do not and will not conflict with:- 

 

	 	(i)	the constitutional documents of any Obligor; or 

  

	 	(ii)	any agreement or document to which any Obligor is a party or which is binding upon it or any of its assets; 

  
 nor result in the creation or imposition of any Encumbrance on any of the
assets of any Obligor pursuant to the provisions of any such agreement or document. 
  

 -38- 









	 	(E)	Pari passu status 

  
 The claims of the Banks against the Borrower under this Agreement will rank at least pari passu (but subject always to the provisions of Clause 10.13

  
 (Undertaking to procure subordination of additional debt))
with the claims of all other unsecured creditors of the Borrower other than claims of such creditors to the extent that they are statutorily preferred. 
  

	 	(F)	No immunity 

  
 No Obligor nor any of its assets enjoys any right of immunity from set-off, suit or execution in respect of its obligations under any Security Document.

  

	 	(G)	Material Adverse Change & Material Litigation 

  
 There has been (i) no material adverse change in the business, condition (financial or otherwise), prospects or operations of any Obligor since 31
December 2002, (ii) no litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency (including, but not limited to, investigative proceedings), in excess of {Confidential Material}* or the equivalent
in any other currency brought by or against or threatened against (to the best of its knowledge and belief), any Obligor since 31 December 2002, and (iii) no other event or circumstance has occurred which, in the reasonable opinion of the Majority
Banks is reasonably likely to have a material adverse effect on the ability of the person concerned to comply with any of its material obligations under this Agreement or any Security Document to which it is a party; or the legality validity or
enforceability of this Agreement or any Security Document or the rights or remedies of the Lenders thereunder has occurred since 31 December 2002. 
  

	9.3.	Repetition of representations and warranties 

  
 The representations and warranties set out in Clause 9.2 (Continuing representations and warranties) shall survive the execution of this Agreement and
shall be deemed to be repeated on each day during the Loan Period, with reference mutatis mutandis to the facts and circumstances then subsisting, as if made on each such day. 
  

	10.	GENERAL UNDERTAKINGS: POSITIVE COVENANTS 

  

	10.1.	Duration 

  
 The undertakings contained in this Clause 10 shall remain in full force from the date of this Agreement until the end of the Loan Period. 


	*	The confidential portion of this section of the agreement has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential
treatment. 

  

 -39- 









	10.2.	Provision of financial and other information 

  

	 	The	Borrower will provide to the Facility Agent:- 

  

	 	(A)	as soon as practicable, but in any event within one hundred and twenty (120) days after the close of each of its financial years, printed copies (in sufficient numbers for the
Banks) of the audited consolidated profit and loss account and balance sheet of the Smedvig Group for that financial year; 

  

	 	(B)	as soon as practicable (and in any event within sixty (60) days after the close of each of its financial quarters) a printed copy of the unaudited consolidated profit and loss
account and balance sheet of the Smedvig Group for that financial quarter; 

  

	 	(C)	not later than sixty (60) days after 31 March, 30 June, 30 September and not later than one hundred and twenty (120) days after 31 December in each year (commencing with 30 June
2001), a compliance certificate signed by the Chief Financial Officer of the Guarantor in the form set out in Schedule 5 (or such other form as the Facility Agent may from time to time reasonably require) certifying as to the financial condition of
the Smedvig Group as at that quarterly reference date; 

  

	 	(D)	not later than sixty (60) days after 30 June and 31 December in each year, copies of the Smedvig Group’s cash flow forecasts for the following twelve (12) month period;


  

	 	(E)	promptly, such further information in the possession or control of the Borrower and/or the Guarantor regarding the financial condition, operations and relevant contracts (including,
without limitation, any agreements between different Group Members) as the Facility Agent or any of the Joint Arrangers may reasonably request; 

  

	 	(F)	details of any litigation, arbitration or administrative proceedings which affect the Borrower or any other Group Member as soon as the same are instituted or, to the knowledge of
the Borrower, threatened which involve a claim in an amount exceeding {Confidential Material}* or the equivalent in any other currency; and 

  

	 	(G)	at its own expense (i) at ninety (90) day intervals throughout the Loan Period with written updates by Norwegian and English lawyers acceptable to the Joint Arrangers in their
reasonable opinion of the latest legal opinions relating to the Balder Disputes or, if so required by the Facility Agent, fresh opinions thereon and (ii) from time to time promptly with information in writing of any material developments in the
relevant disputes. 



	*	The confidential portion of this section of the agreement has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential
treatment. 

  

 -40- 









	10.3.	Financial records 

  
 The Borrower will keep, and shall procure that each other Group Member will keep, proper books of record and account in which proper and correct entries
shall be made of all financial transactions and the assets, liabilities and business of such party in accordance with Norwegian GAAP consistently applied. 
  

	10.4.	Preparation of financial statements 

  
 Each set of financial statements to be provided to the Facility Agent pursuant to Clause 10.2 (Provision of financial and other information) shall be
prepared in accordance with Norwegian GAAP consistently applied (or, if not consistently applied, accompanied by details of the inconsistencies) and shall fairly represent the financial condition of the Smedvig Group. If, as a result of any change
in Norwegian GAAP or in the interpretation thereof, there is a change in the manner of determining any of the items shown in the accounts and/or financial statements of the Smedvig Group and the effect of such change would, in the reasonable opinion
of the Facility Agent, be such as to affect adversely the basis or efficacy of the financial covenants contained in Clause 12 (Financial Condition) in ascertaining the financial condition of the Smedvig Group, then such item shall for the purposes
of this Agreement continue to be determined in accordance with Norwegian GAAP insofar as the same were applied immediately prior to the change therein or in the interpretation thereof. 
  

	10.5.	Consolidation of Major Shared Enterprises 

  
 The Borrower undertakes to procure at all times the consolidation of the Guarantor’s interest in all Major Shared Enterprises in all financial
statements of the Smedvig Group. 
  

	10.6.	Notification of default 

  
 The Borrower will notify the Facility Agent of any Event of Default or Possible Event of Default forthwith upon it becoming aware of the occurrence
thereof. 
  

	10.7.	Consents and registrations; maintenance of status 

  
 The Borrower will do all such things as are necessary:- 
  

	 	(A)	to enable each Obligor to comply with any of its respective financial obligations under any Security Document to which it is a party; 

  

	 	(B)	to maintain its corporate existence in good standing and to remain in good standing as a Foreign Maritime Entity under the laws of the Republic of Liberia (subject to owning Units
flying the Liberian flag); 

  

	 	(C)	to ensure that each Group Member has the right, and is duly qualified and able, to conduct its business as it is conducted in all applicable jurisdictions; and


  

 -41- 









	 	(D)	to ensure that each Group Member complies with all of the obligations and responsibilities from time to time imposed on it under any applicable laws, regulations, conventions or
other agreements relating to the protection of the environment from pollution 

  
 including, without limitation, obtaining, maintaining, promptly renewing (when necessary) and complying at all times with (and, upon request, promptly furnishing certified copies to the Facility Agent of) all such
authorisations, approvals, consents, licences and exemptions as are from time to time required under any applicable law, regulation or convention in connection with any of the matters aforesaid. 
  

	10.8.	Listing 

  
 The Borrower will procure that at all times during the Loan Period the Guarantor is listed on a recognised stock exchange which, for the purposes of this
Clause 10.8, shall mean the Oslo, London and New York Stock Exchanges or any other stock exchange approved by the Joint Arrangers. 
  

	10.9.	Insurances 

  
 The Borrower will, and shall procure that each other Group Member will, insure the respective assets owned and/or operated by it and maintain insurance
cover in respect thereof in accordance, in the case of insurance of the Secured Units, with the provisions of the relevant Security Documents and otherwise in such amounts and against such risks as would be effected by a prudent owner or operator of
such assets having regard to the normal market practice in respect of such assets from time to time. The Borrower also acknowledges the right of the Facility Agent, when any of the Secured Units is or may be located in any such area as is described
in Clause 10.10 (Trading in US and other waters) to effect, at the Borrower’s expense (and in close co-operation with the Borrower) but for the exclusive benefit of the Lenders, insurance policies thereon known in the marine insurance market as
“mortgagees’ additional perils pollution insurance” and “mortgagees’ interest insurance” on such terms as the Facility Agent may approve. 
  

	10.10.	Trading in US and other waters 

  
 The Borrower will notify the Facility Agent in writing prior to any Unit owned or operated by any Group Member entering the territorial waters of the
United States of America or the Exclusive Economic Zone (as defined in the US Oil Pollution Act, 1990) or the territorial waters of any other jurisdiction having (in the Facility Agent’s reasonable opinion) similar or comparable pollution or
environmental protection legislation specified from time to time by the Facility Agent to the Borrower. 
  

	10.11.	Major Projects 

  
 The Borrower undertakes that it will provide the Joint Arrangers with disclosure of every Major Project undertaken by a Group Member either, in the case
of a project whose capital cost is originally budgeted to exceed one hundred million Dollars 
  

 -42- 








 (USD100,000,000), immediately after such project is approved by the Board of Directors of the Guarantor
or, in the case of a project whose capital cost was originally budgeted not to exceed one hundred million Dollars (USD100,000,000) but has subsequently exceeded that figure, at such time as such cost overrun has become evident. For these purposes
disclosure means a written presentation of such Major Project containing contractual particulars and a financial analysis and estimates both of its capital cost and the time for completion of its various stages and a review of any other issues which
are material to fulfilment of such project. 
  

	10.12.	Undertaking to procure performance of Obligors and acknowledgement of Continuing Security 

  
 The Borrower undertakes to procure due, prompt and continuing performance by each Obligor of all of such Obligor’s
obligations under such of the Security Documents to which such Obligor is a party. The Borrower also agrees and declares that the Security shall take effect as continuing security for payment of the Outstanding Indebtedness and the Security shall
not be satisfied by any intermediate payment or satisfaction of any part of the amounts thereby secured and all powers arising therefrom may be exercised from time to time and as often as the Security Trustee (or any other party in whose favour the
Security is granted) may deem expedient. 
  

	10.13.	Undertaking to procure subordination of additional debt 

  
 The Borrower undertakes to procure (in terms acceptable to the Majority Banks) the subordination, in point of payment and priority, of any Financial
Indebtedness, which is secured by Secured Assets, of any Group Member created on or after the Execution Date, to any debt created pursuant to this Agreement. 
  

	10.14.	Undertaking to Mortgage and Pledge 

  

	 	(A)	{Confidential Material}*. 

  

	 	(B)	{Confidential Material}*. 

  

	 	(C)	{Confidential Material}*. 

  

	 	(D)	The Borrower or any other member of the Smedvig Group shall be entitled to sell the tender rig “T-9” to Varia Perdana Sdn. Bhd. and be released from the obligation to
mortgage “T-9” to the Security Trustee PROVIDED THAT the Borrower, or, as the case may be, any other member of the Smedvig Group, shall continue to own a minimum of forty nine per cent (49%) of Varia Perdana Sdn. Bhd.




	*	The confidential portion of this section of the agreement has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential
treatment. 

  

 -43- 









	10.15.	Minimum Value of Secured Units 

  

	 	(A)	The Borrower undertakes and covenants that throughout the Loan Period, the market value of the Secured Units, which, for the avoidance of doubt, shall include any relevant amount in
respect of the ownership in relation to “WEST NAVIGATOR” and “West Alpha”, shall be equal to at least one hundred and sixty five per cent (165%) of the Committed Amount. For the
purpose of this Clause 10.15, the Secured Units shall be valued in Dollars (with or without inspection) by obtaining written valuations at the Borrower’s expense from three shipbrokers approved by the Facility Agent, and such
“valuation” shall be the average of such three valuations obtained. The Secured Units and “WEST NAVIGATOR” and “WEST
ALPHA” shall be valued at each six (6) month period throughout the Loan Period but the Facility Agent shall be entitled to receive a valuation of any Secured Unit and “WEST
NAVIGATOR” and “WEST ALPHA” at any other time when it is reasonably concerned about the compliance with this covenant. 

  

	 	(B)	Notwithstanding (A) above, the Borrower may provide the Facility Agent with its own valuations of each Secured Unit which is a tender rig PROVIDED THAT such valuation shall, in the
opinion of the Facility Agent, be reasonable. 

  

	11.	GENERAL UNDERTAKINGS: NEGATIVE COVENANTS 

  

	11.1.	Duration 

  
 The undertakings contained in this Clause 11 shall remain in full force from the date of this Agreement until the end of the Loan Period. 
  

	11.2.	Negative pledge 

  

	 	(A)	The Borrower will not, and will procure that the Guarantor and none of the Subsidiaries of the Borrower or of the Guarantor will create or permit to create any encumbrance on the
whole or any part of the existing and future assets of the Borrower or any of its subsidiaries, except for: 

  

	 	(i)	Permitted Encumbrances; and 

  

	 	(ii)	Encumbrances disclosed in writing to the Lenders prior to the Execution Date and which are acceptable to the Lenders; and 

  

	 	(iii)	Encumbrances created with the prior written consent of the Lenders; and 

  

	 	(iv)	Non-recourse project financing. 

  

 -44- 









	 	(B)	The Borrower will procure that the registered owner or owners of {Confidential Material}* shall not mortgage or otherwise encumber and not consent to any mortgage or
encumbrance over those units without the prior written consent of the Lenders. 

  

	11.3.	Change of business or business strategy 

  
 Except with the prior written consent of the Majority Banks (which consent shall not be unreasonably withheld) or in the case of a Permitted Winding-Up,
the Borrower will not, and shall procure that no other Group Member will, cease to carry on or make any change in all or any part of its business as presently conducted, or carry on any other business, which in any such case is substantial in
relation to the business as presently conducted by the Smedvig Group as a whole. 
  

	11.4.	Mergers and demergers 

  
 Except with the prior written consent of the Lenders, the Borrower will procure that the Guarantor will not enter into any merger with any other company
nor will it demerge itself into any two or more companies unless, in either case:- 
  

	 	(A)	the Guarantor will survive as a separate legal entity remaining bound in all respects by its obligations and liabilities under the Guarantee; and 

  

	 	(B)	in the opinion of the Majority Banks such merger or demerger will not, and may not reasonably be expected to, adversely affect the financial condition of the Smedvig Group to the
extent that the requirements as to the financial condition of the Smedvig Group pursuant to this Agreement would cease to be satisfied either immediately or at any later date. 

  

	11.5.	Payment of dividends and buying own shares 

  

	 	(A)	Except with the prior written consent of the Lenders, the Borrower will procure that the Guarantor will not (i) declare or pay any dividends to its shareholders in respect of any
financial year or (ii) buy any issued shares in its own capital in either case where the amount thereof or, as the case may be, in both cases where the aggregate amount thereof would exceed fifty per cent (50%) of the sum of EBITDA less Net Interest
Expenses for that financial year. 

  

	 	(B)	Subject to (A) above and Clause 5.5, the Borrower will procure that any Guarantor’s dividend payments or payment made in respect of buy back of own issued shares made during
the period 1 January to 31 December 2004 shall, based on the current number of shares outstanding, be limited to NOK 1.5 per share, (or such pro rata lesser amount of in the event of any split of the shares or such 



	*	The confidential portion of this section of the agreement has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential
treatment. 

  

 -45- 








 multiple of NOK 1.5 in the event of a merger of shares), PROVIDED THAT if the Guarantor issues any new
shares during such period the Borrower shall procure that the Guarantor shall demonstrate to the satisfaction of the Facility Agent that the Guarantor’s balance sheet on a consolidated basis will show an added value with a level at least as
much as the dividend payable on such new shares. 
  

	 	(C)	Subject to (A) above and Clause 5.5, the Borrower will procure that, for so long as amounts referred to in Clause 5.5(D) hereof remain outstanding, any Guarantor’s dividends or
payment made in respect of buy back of own issued shares shall, based on the current number of shares outstanding, be limited to NOK 1.0 per share, (or such pro rata lesser amount of in the event of any split of the shares or such multiple of NOK
1.0 in the event of a merger of such shares), PROVIDED THAT if the Guarantor issues any new shares during such period the Borrower shall procure that the Guarantor shall demonstrate to the satisfaction of the Facility Agent that the Guarantor’s
balance sheet on a consolidated basis will show an added value with a level at least as much as the dividend payable on such new shares. 

  

	11.6.	Financial year 

  
 Except with the prior written consent of the Facility Agent, the Borrower will not, and shall procure that no other Group Member will, alter its financial
year end. 
  

	12.	FINANCIAL CONDITION 

  

	12.1.	Minimum Liquidity 

  
 The Borrower will procure that throughout the Loan Period the Minimum Liquidity of the Smedvig Group will not fall below fifty million Dollars
(USD50,000,000). 
  

	12.2.	Interest coverage 

  
 The Borrower will procure that throughout the Loan Period the ratio of EBITDA to Interest Expense will not fall below 2.5:1. 
  

	12.3.	Leverage Ratio 

  
 The Borrower will procure that the Leverage Ratio of the Smedvig Group will not exceed: 
  

					
	 (A)
	  	for the period 15 July 2003 until 15 April 2005	  	5.00 : 1
	 (B)
	  	for the rest of the Loan Period	  	4.50 : 1

  

 -46- 









	12.4.	Total Value Adjusted Assets/Total Liability Ratio 

  
 The Borrower will procure that throughout the Loan Period the Total Value Adjusted Assets to Total Liabilities ratio will not fall below 1.5:1.

  

	12.5.	Testing of financial condition 

  
 The requirements contained in this Clause 12 as to the financial condition of the Smedvig Group shall be tested as at 31 March, 30 June, 30 September and
31 December in each year (commencing with 30 June 2001) by reference to the financial statements and compliance certificates delivered to the Facility Agent pursuant to Clause 10.2 (Provision of financial and other information). 
  

	12.6.	Project Alpha 

  

	 	(A)	The Borrower will not and will procure that no member of the Smedvig Group will pay any amount in excess of {Confidential Material}* in relation to Project Alpha without the
prior written approval of the Majority Banks (which they shall be at full liberty to withhold). 

  

	 	(B)	The Borrower further undertakes that, subject to (A) above, it will not, and will procure that no member of the Smedvig Group will pay any amount in relation to Project Alpha which
exceeds {Confidential Material}*. 

  

	13.	FURTHER ASSURANCE 

  
 The Borrower will from time to time on being required to do so by the Facility Agent do or procure the doing of all such
acts and/or execute or procure the execution of all such documents in a form satisfactory to the Facility Agent as the Facility Agent may reasonably consider necessary for giving full effect to the Security Documents or securing to the Banks the
full benefit of the rights, powers and remedies conferred or intended to be conferred upon them in the Security Documents. 
  

	14.	FEES 

  

	14.1.	Commitment commission 

  
 The Borrower shall pay to the Facility Agent for the account of the Lenders pro rata in accordance with their respective Commitments in arrears on 15
February, 15 May 15 August and 15 November in each year and on the last day of the Availability Period, commitment commission computed from the Execution Date at the rate per annum equal to {Confidential Material}* of the Applicable Margin
from time to time on the daily undrawn and uncancelled amount of each Lender’s Available Commitment in relation to the relevant period. 


	*	The confidential portion of this section of the agreement has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential
treatment. 

  

 -47- 









	14.2.	Arrangement fee 

  
 The Borrower shall pay to the Facility Agent for the account of the Joint Arrangers an arrangement fee of the amount specified in a separate fee letter
agreement between the Borrower and the Joint Arrangers. 
  

	14.3.	Agency fee 

  
 The Borrower shall pay to the Facility Agent on the Execution Date and on each anniversary thereof during the Loan Period for the account of itself and
the Facility Agent a non-refundable agency fee in the amount specified in any separate letter agreement between the Borrower and the Joint Arrangers. 
  

	15.	COSTS, EXPENSES AND INDEMNITIES 

  

	15.1.	Initial expenses 

  
 The Borrower shall reimburse the Joint Arrangers on demand for the charges and expenses (together with value added tax or any similar tax thereon and
including without limitation the fees and expenses of all legal advisers instructed by the Facility Agent and/or the Documentation Agent and/or the Security Trustee and the reasonable travel expenses of the Joint Arrangers) in each case reasonably
incurred by them in their capacity as Joint Arrangers to this Agreement directly in respect of the negotiation, preparation, printing and execution of the Security Documents and any other documents required in connection with the implementation of
the Security Documents. 
  

	15.2.	Expenses of enforcement and preservation of security 

  
 The Borrower shall reimburse the Facility Agent on behalf of itself and the other Banks on demand for all charges and expenses (including value added tax
or any similar tax thereon and including without limitation the fees and expenses of all legal advisers instructed by the Facility Agent and/or Documentation Agent and/or the Security Trustee) incurred by the Facility Agent and/or the Documentation
Agent and/or the Security Trustee and/or the other Banks in connection with the enforcement of, or the preservation of any rights under any of the Security Documents. 
  

	15.3.	Stamp duties 

  
 The Borrower shall pay, or indemnify the Facility Agent, the Documentation Agent, the Security Trustee and the other Banks on demand against, any and all
stamp, registration and similar Taxes which may be payable in any jurisdiction in connection with the entry into, performance and enforcement of any of the Security Documents provided however that the indemnity under this Clause 15.3 shall not apply
to Taxes payable on the transfer of rights and/or obligations of the Lenders or the change of Lending Branch of any Lender in accordance with Clause 24.3 (Transfers) or Clause 24.8 (Lending Branch) respectively. 


	*	The confidential portion of this section of the agreement has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential
treatment. 

  

 -48- 









	15.4.	Indemnity for void and/or unenforceable provisions 

  
 The Borrower agrees to indemnify and hold harmless the Banks and each of them from and against any loss incurred by any of them as a result of any
provision of this Agreement being or becoming void, voidable or unenforceable for any reason whatsoever, whether or not known to any such person, the amount of such loss being limited to the amount which the relevant Bank or Banks would otherwise
have been entitled to recover hereunder had such provision not become void, voidable or unenforceable. 
  

	15.5.	Miscellaneous indemnities 

  
 The Borrower agrees to indemnify and hold harmless the Banks and each of them from and against any loss, cost or expense incurred by them as a result of
or in connection with any Advance not being made for any reason (excluding default by any Bank) on the date specified in any Drawdown Notice after the same has been given. 
  

	16.	DEFAULT 

  

	16.1.	Events of default 

  
 Each of the events set out below is an Event of Default:- 
  

	 	(A)	Non-payment 

  
 The Borrower does not pay on the due date any amount of principal or interest, or within three (3) Banking Days of the due date any other amount, payable
by it under this Agreement at the place and in the currency in which it is expressed to be payable or, in the case of amounts due on demand, within three (3) Banking Days of the relevant demand provided however that if an amount of interest or
commitment commission is not paid on the due date when due in accordance with the provisions of Clause 6.1 (Normal interest rate) or Clause 14.1 (Commitment commission) (as the case may be) solely by reason of:- 
  

	 	(i)	some error or omission on the part of the bank by or through whom the relevant funds are being transmitted by the Borrower to the Facility Agent; or 

  

	 	(ii)	an administrative error or omission on the part of the Borrower, which the Borrower proves to the satisfaction of the Facility Agent did not result from the gross negligence or
wilful misconduct of the Borrower or any of its managerial or supervisory personnel 

  

 -49- 








 no Event of Default shall occur for the purpose of this Clause 16.1(A) unless such amount of interest,
commitment commission or guarantee commission (and any default interest payable in respect of such amount in accordance with Clause 6.3 (Default interest)) remains unpaid at the expiry of the third Banking Day following the date when the Facility
Agent has (a) in the case of sub-paragraph (i) above given written notice of the error or omission to the Borrower and demanded payment of such due but unpaid amount, or (b) in the case of sub-paragraph (ii) above the Facility Agent has given
written notice to the Borrower of the Facility Agent’s determination that the administrative error or omission on the part of the Borrower did not result from any gross negligence or wilful misconduct of the Borrower or any of its managerial or
supervisory personnel and the Facility Agent had demanded payment of such due but unpaid amount. 
  

	 	(B)	Breach of other obligations 

  
 Any Obligor fails to comply with any other provision of any Security Document which the Majority Banks consider material and such failure (if in the
opinion of the Majority Banks capable of remedy) continues unremedied for a period of seven (7) days from the date of its occurrence (or any shorter remedy period as may be specified in such Security Document). 
  

	 	(C)	Misrepresentation 

  
 Any representation, warranty or statement made or repeated in, or in connection with any Security Document or in any accounts, certificate, statement or
opinion delivered by or on behalf of any Obligor thereunder or in connection therewith is materially incorrect at the time it is made or deemed to be made, or when repeated hereunder by reference to the facts subsisting at such time. 
  

	 	(D)	Cross default 

  
 (i) Any event of default occurs under any contract or document relating to any Financial Indebtedness of the Borrower or any other Group Member which
exceeds {Confidential Material}*. 
  

	 	(ii)	Any such Financial Indebtedness or any sum payable in respect thereof is not paid when due (after the expiry of any applicable grace period(s)) whether by acceleration or otherwise.


  

	 	(iii)	Any Encumbrance over any assets of the Borrower or any other Group Member securing any Financial Indebtedness becomes enforceable. 



	*	The confidential portion of this section of the agreement has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential
treatment. 

  

 -50- 








 AND any such event is not wholly remedied to the satisfaction of the Majority Banks within five (5)
Banking Days of the Borrower or other relevant Group Member becoming aware of the same. 
  

	 	(E)	Winding-up 

  
 Any order is made or resolution passed or other action taken for the suspension of payments or resulting in the dissolution, termination of existence,
liquidation, winding-up or bankruptcy of the Borrower or any other Group Member unless in each case such proceeding:- 
  

	 	(i)	is undertaken in relation to a Permitted Winding-Up; or 

  

	 	(ii)	is revoked within seven (7) days of such order being made, resolution passed or action taken. 

  

	 	(F)	Moratorium or arrangement with creditor 

  
 A moratorium in respect of all or any debts of the Borrower or any other Group Member (other than any Group Member which owes no Financial Indebtedness
other than Non-Recourse Debt) or a composition or an arrangement with creditors of the Borrower or any such Group Member or any similar proceeding or arrangement by which the assets of any such Group Member are submitted to the control of its
creditors is applied for, ordered or declared or any such Group Member commences negotiations with any one or more of its creditors with a view to the general readjustment or rescheduling of all or a significant part of its Financial Indebtedness.

  

	 	(G)	Appointment of liquidators, etc. 

  
 A liquidator, trustee, administrator, receiver, manager or similar officer is appointed in respect of the Borrower or any such other Group Member (other
than any Group Member which owes no Financial Indebtedness other than Non-Recourse Debt) or in respect of all or any substantial part of its assets other than in relation to a Permitted Winding-Up. 
  

	 	(H)	Insolvency 

  
 The Borrower or any other Group Member (other than any Group Member which owes no Financial Indebtedness other than Non-Recourse Debt) becomes or is
declared insolvent or is unable, or admits in writing its inability, to pay its debts as they fall due or becomes insolvent within the terms of any applicable law. 
  

	 	(I)	Legal process 

  
 Any distress, execution, attachment or other process is levied against the whole or any substantial part of the assets of the Borrower or any other Group
Member 
  

 -51- 








 (other than any Group Member which owes no Financial Indebtedness other than Non-Recourse Debt) and
remains undischarged for a period of fourteen (14) days. For the avoidance of doubt, the words “other process” used in this sub-clause (I) shall not include any “in personam” legal actions commenced against any Group Member in
connection with the Balder Disputes provided the same are not accompanied by any arrest or legal injunction prohibiting disposal in any way of any asset of any such member. 
  

	 	(J)	Analogous events 

  
 Anything analogous to or having a substantially similar effect to any of the events specified in sub-clauses (E) to (I) of this Clause shall occur under
the laws of any applicable jurisdiction. 
  

	 	(K)	Unlawfulness 

  
 At any time it is unlawful or impossible for any Obligor to perform any of its obligations under any Security Document or it is unlawful or impossible for
any of the Banks to exercise any of its rights under any Security Document unless, after receiving notice thereof from the Facility Agent, the Borrower proposes within five (5) days of receiving such notice an alternative method of performance
acceptable to the Lenders which allows the relevant Obligor to perform its obligations hereunder in substantially the same manner as those the performance of which has been rendered unlawful or impossible and/or (as the case may be) which affords
rights to the Banks substantially the same as those the exercise of which has been rendered unlawful or impossible. 
  

	 	(L)	Material adverse change 

  
 Any material adverse change in the business, assets or financial condition of any Obligor occurs which may reasonably be considered to affect the ability
of such Obligor to comply with all or any obligations which the Majority Banks consider material under any Security Document to which such Obligor is party. 
  

	 	(M)	Governmental intervention 

  
 The authority of the Borrower or the Guarantor to conduct its business is wholly or substantially curtailed by any seizure or intervention by or on behalf
of any authority. 
  

	 	(N)	Change of control 

  
 Any person (or group of persons acting in concert) other than the Smedvig family obtains fifty per cent (50%) or more of the voting rights of the
Guarantor without the prior written consent of all of the Lenders. 
  

 -52- 









	 	(O)	Court orders 

  
 Any Group Member fails to pay promptly any sum which the Majority Banks consider material ordered to be paid by it by any final order (which, if
applicable, is not being appealable by such member) of any court of competent jurisdiction. 
  

	 	(P)	Failure to perform guarantees 

  
 Any Group Member fails to perform promptly any guarantee, indemnity, underwriting of performance or other similar obligation of such member in accordance
with its terms (unless such failure is and continues to be legally justified and the Facility Agent is provided with a satisfactory written opinion to that effect of counsel acceptable to the Facility Agent). 
  

	 	(Q)	Security invalidity 

  
 Any Security ceases to be a valid and enforceable security under any applicable law, unless the Borrower was not aware of the applicable law and the
aforesaid Security is again valid and enforceable three Banking Days from the date it first became invalid and unenforceable. 
  

	16.2.	Acceleration 

  
 On the occurrence of an Event of Default and at any time thereafter if any such event shall then be continuing all the rights, powers and remedies
conferred on each of the Banks and all security created under or pursuant to the Security Documents shall become immediately enforceable and the Facility Agent shall, if so directed by the Majority Banks:- 
  

	 	(A)	declare that the obligation of each Lender to make its Commitment available shall be terminated, whereupon the Commitments shall be reduced to zero forthwith; and/or


  

	 	(B)	declare that all outstanding Advances and all interest and commitment commission accrued and all other sums payable under this Agreement have become due and payable, whereupon the
same shall become immediately due and payable. 

  

	16.3.	Default indemnity 

  
 The Borrower shall indemnify each of the Banks against any loss or expense which they may sustain or incur as a consequence of:- 
  

	 	(A)	the occurrence of any Event of Default; or 

  

	 	(B)	the operation of Clause 16.2 (Acceleration) 

  
 including, but not limited to, any loss or expense on account of funds borrowed, contracted for or utilised to fund any amount payable hereunder.

  

 -53- 









	17.	SHARING OF PAYMENTS 

  

	17.1.	Pro rata payments 

  

	 	(A)	If at any time any Lender (the “Recovering Bank”) receives or recovers any amount owing to it by the Borrower under this Agreement or by any of the Obligors under
any of the Security Documents by direct payment, set-off or in any manner other than by payment through the Facility Agent pursuant to Clause 8 (Payments) (not being a payment for the sole account of such Lender as referred to in Clause 17.2
(Payments not available for distribution)) the Recovering Bank shall, within two (2) Banking Days of such receipt or recovery (a “Relevant Receipt”) notify the Facility Agent of the amount of the Relevant Receipt. If the Relevant
Receipt exceeds the amount which the Recovering Bank would have received if the Relevant Receipt had been received by the Facility Agent and distributed pursuant to Clause 8 (Payments) then:- 

  

	 	(i)	within two (2) Banking Days of demand by the Facility Agent, the Recovering Bank shall pay to the Facility Agent an amount equal (or equivalent) to the excess;


  

	 	(ii)	the Facility Agent shall treat the excess amount so paid by the Recovering Bank as if it were a payment made by the Borrower and shall distribute the same to the Lenders (other than
the Recovering Bank) in accordance with Clause 8 (Payments); and 

  

	 	(iii)	as between the Borrower and the Recovering Bank the excess amount so re-distributed shall be treated as not having been paid but the obligations of the Borrower to the other Lenders
shall, to the extent of the amount so re-distributed to them, be treated as discharged. 

  

	 	(B)	If any part of the Relevant Receipt subsequently has to be wholly or partly refunded by the Recovering Bank (whether to a liquidator or otherwise) each Lender to which any part of
such Relevant Receipt was so re-distributed shall on request from the Recovering Bank repay to the Recovering Bank such Lender’s pro rata share of the amount which has to be refunded by the Recovering Bank together with interest thereon
sufficient to compensate the Recovering Bank for the cost of funding such amount from the date it refunds the amount as aforesaid to the date on which it receives payment from that Lender of its pro rata share thereof. 

  

	 	(C)	Each Lender and the Facility Agent shall on request supply to the Facility Agent such information as the Facility Agent may from time to time reasonably request for the purpose of
this Clause 17.1. 

  

	 	(D)	Notwithstanding the foregoing provisions of this Clause 17.1, no Recovering Bank shall be obliged to share any Relevant Receipt which it receives or recovers


  

 -54- 








 pursuant to legal proceedings taken by it to recover any sums owing to it under this Agreement with any
other party which has a legal right to, but does not, either join in such proceedings or commence and diligently pursue separate proceedings to enforce its rights in the same or another court (unless the proceedings instituted by the Recovering Bank
are instituted by it without prior notice having been given to such party through the Facility Agent). 
  

	17.2.	Payments not available for distribution 

  
 The following amounts shall not be distributed as provided in Clause 17.1 (Pro rata payments):- 
  

	 	(A)	amounts prepaid to the Facility Agent under Clause 5.4 (Additional partial cancellation) where the Borrower elects to prepay the Contribution of one but not all of the Lenders in
the circumstances contemplated thereby; 

  

	 	(B)	amounts paid to the Facility Agent for the account of any Lender following the imposition of a Substitute Basis pursuant to Clause 6.6 (Market disruption; non-availability);


  

	 	(C)	amounts paid to any Lender pursuant to the provisions of Clauses 7.1 (Illegality) and 7.2 (Increased costs); 

  

	 	(D)	amounts paid to any Lender pursuant to the grossing-up provisions contained in Clause 8.6 (Grossing-up for Taxes); 

  

	 	(E)	the arrangement fee payable to the Joint Arrangers pursuant to Clause 14.2 (Arrangement fee); 

  

	 	(F)	the agency fee payable to the Facility Agent and the Facility Agent pursuant to Clause 14.3 (Agency fee); 

  

	 	(G)	amounts paid to any Bank pursuant to the indemnity provisions contained in Clause 15 (Costs, Expenses and Indemnities); 

  

	 	(H)	any fees and expenses paid to the Facility Agent pursuant to Clause 24.5 (Transfer fees and expenses) following the transfer by a Lender of any of its rights hereunder;


  

	 	(I)	any payment received by a Lender from any assignee, any Transferee Bank or any sub-participant in respect of such Lender’s Contribution; and 

  

	 	(J)	amounts held by the Facility Agent or the Security Trustee in any suspense or impersonal account pending their application in or towards satisfaction of the obligations of the
Borrower hereunder or the Guarantor under the Guarantee. 

  

 -55- 









	17.3.	No release 

  
 For the avoidance of doubt it is hereby declared that failure by any Recovering Bank to comply with the provisions of Clause 17.1 (Pro rata payments)
shall not release any other Recovering Bank from any of its obligations or liabilities under Clause 17.1 (Pro rata payments) 
  

	17.4.	No charge 

  
 The provisions of this Clause 17 shall not, and shall not be construed so as to, constitute a charge by a Lender over all or a part of a sum received or
recovered by it in the circumstances mentioned in Clause 17.1 (Pro rata payments). 
  

	18.	SET-OFF 

  
 Following the occurrence of any Event of Default and for so long as any Event of Default is continuing the Borrower
irrevocably authorises the Banks to apply any credit balance to which the Borrower or the Guarantor is entitled upon any account held by the Borrower with any branch of any Bank in or towards satisfaction of any sum due (actually or contingently) to
any of the Banks hereunder but unpaid, and to combine any accounts of the Borrower for this purpose. If such set-off requires a credit balance in a currency other than Dollars to be transferred to an account maintained in connection herewith the
transfer shall be effected by crediting to the account in question the amount of Dollars which the relevant Bank could obtain by exchanging such currency for Dollars at the rate of exchange at which its Lending Branch would, at the opening of
business on the date on which the combination is effected, have sold the currency of that credit balance for Dollars for immediate delivery. 
  
 19. MAKING OF DECISIONS BY THE LENDERS 

 

	19.1.	Decisions requiring consent of all the Lenders 

  
 Save as expressly provided in Clause 19.2 (Decisions requiring consent of the Majority Banks) or as otherwise expressly provided herein, any proposed
course of action in connection with any matter requiring the consent of the Lenders under or in connection howsoever with this Agreement shall only be taken with the consent of all the Lenders including, but without limitation to the generality of
the foregoing:- 
  

	 	(A)	a change to the Applicable Margin or to the definition of “LIBOR” or to the method of computing the Interest Rate hereunder; 

  

	 	(B)	a change to the amount of, or payment date for, any payment or repayment of principal, interest, fees or other sum payable hereunder; 

  

	 	(C)	a change to any of the Reduction Dates hereunder or to the amounts by which the Commitments are to be reduced on such date; 

  

 -56- 









	 	(D)	an extension of the Closing Date, the Availability Period or the Termination Date; 

  

	 	(E)	an increase to any Lender’s Commitment, Available Commitment or Percentage; 

  

	 	(F)	a change to the definition of “Majority Banks”; 

  

	 	(G)	a change to the preamble or to Clauses 1 (Definitions and Construction), 2 (The Commitments), 3 (Advances), 5.1 (Reductions of Commitments and repayment of Advances) and Schedule 8
(Reductions of Commitments), 8.9 (Manner of Application), 11.1 (Duration), 11.2 (Negative pledge), 12 (Financial Condition), 12.6 (Project Alpha), 16.1 (Events of Default), 17 (Sharing of Payments) or 26 (Governing Law) 

  

	 	(H)	a change to this Clause 19.1; 

  

	 	(I)	the release of any Obligor from any of its obligations under any Security Document; and 

  

	 	(J)	any time or other indulgence to be granted to any Obligor in respect of any of its obligations under any Security Document. 

  

	19.2.	Decisions requiring consent of the Majority Banks 

  
 Proposals in connection with the following matters shall, in the absence of agreement thereon by all of the Lenders, be determined by the Majority Banks:-

  

	 	(A)	the making of any declaration by the Facility Agent under Clause 16.2 (Acceleration); 

  

	 	(B)	the institution of any legal proceedings for the enforcement of any rights, security or powers whatsoever pursuant to the terms of any Security Document (provided however that, if
the Majority Banks shall decide to institute any such legal proceedings as aforesaid, any dissenting Lender shall not be obliged to join in such proceedings or lend its name to any action in relation thereto); 

  

	 	(C)	any course of action whatsoever from time to time (other than the making of a demand for payment hereunder) whether of a legal or commercial nature or otherwise howsoever for the
purpose of achieving a full or partial recovery of the Outstanding Indebtedness or otherwise in connection therewith following the making of a declaration by the Facility Agent under Clause 16.2 (Acceleration); 

  

	 	(D)	any amendment to the provisions of any Security Document for which the consent of the Lenders is not required pursuant to Clause 19.1 (Decisions requiring consent of all the
Lenders); 

  

	 	(E)	any other matter in respect of which this Agreement expressly provides that the consent of the Majority Banks shall be required. 

  

 -57- 









	19.3.	Method of soliciting agreement 

  
 Any determination of the Lenders or, where appropriate, the Joint Arrangers shall be ascertained by the Facility Agent or the Facility Agent (as the case
may be) either:- 
  

	 	(A)	by means of a telex or telefax sent by the Facility Agent to each of the Lenders or the Joint Arrangers (as appropriate) in identical terms on the proposal or matter in issue; or


  

	 	(B)	by means of the vote of representatives of each Lender or Joint Arranger (as appropriate) at a meeting convened by the Facility Agent and held for the purpose of discussing (inter
alia) such proposal or matter in issue. 

  
 Furthermore, it is hereby agreed by the Lenders that where the approval of the Majority Banks is required in respect of any matter, the approval shall be deemed to have been given as soon as the Facility Agent receives the requisite number
of votes in favour of the proposal so that the Facility Agent may act on the basis of such votes without having to wait for the response of (or to give any notification to) any other Lender who has yet to reply to the Facility Agent. 
  

	20.	THE AGENTS 

  

	20.1.	The Facility Agent 

  

	 	(A)	Appointment of the Facility Agent 

  
 Each of the other Banks hereby appoints the Facility Agent to act as its agent under this Agreement with such rights, powers and discretions as are
expressly delegated to the Facility Agent hereunder. 
  

	 	(B)	Duties of the Facility Agent 

  
 In addition to its other obligations under this Agreement, the Facility Agent shall:- 
  

	 	(i)	promptly inform the Lenders and the other Agents of the contents of any notice or request received by it from the Borrower under this Agreement (whether such notice or request is
addressed to the Facility Agent alone or the Facility Agent on behalf of any of the other Banks) and of any information including (but not limited) to information delivered to it relating to Clauses 9.1(F) (Accounts), 9.1(I) (Litigation), 9.1(J)
(Tax Liabilities), 10.2 (Provision of financial and other information) and 10.11 (Major Projects) and of any other matters which the Facility Agent considers material; 

  

	 	(ii)	promptly deliver to the Lenders copies of any accounts delivered to it pursuant to Clause 10.2(A) or (B) (Provision of financial and other information) and, as soon as reasonably
practicable after the Availability Date, copies of the documents delivered in satisfaction of the requirements of Schedule 3; 

  

 -58- 









	 	(iii)	promptly inform the Lenders and the other Agents in reasonable detail of any exercise by it of any of the rights, powers and/or discretions vested in it hereunder (but without the
Facility Agent being under any obligation to give prior notice to the Lenders or the other Agents of any such exercise); 

  

	 	(iv)	promptly notify the Lenders and the other Agents of the occurrence of any Event of Default or Possible Event of Default of which the Facility Agent has actual knowledge or actual
notice and the occurrence of which the Facility Agent has verified; 

  

	 	(v)	if directed by the Majority Banks, exercise (or refrain from exercising) any right, power or discretion vested in it hereunder in accordance with the directions (subject to Clause
19.2 (Decisions requiring consent of the Majority Banks)) of the Majority Banks provided, however, that it may refrain from acting in accordance with any such directions until it has received such security as it may require (whether by way of
payment in advance or otherwise) for all costs, claims, expenses (including legal fees) and liabilities which it will or may expend or incur in complying with such directions and for this purpose the Facility Agent shall make a demand for such
security addressed to all the Lenders. 

  

	 	(C)	Relationship of agent and principal 

  
 The relationship between the Facility Agent on the one part and each of the other Banks on the other is that of agent and principal and the Facility Agent
shall not have a fiduciary relationship with or be, or be deemed to be, a trustee of or for any such party. 
  

	20.2.	The Facility Agent as paying agent 

  

	 	(A)	Duties of the Facility Agent as paying agent 

  
 In addition to its other obligations under this Agreement, the Facility Agent shall:- 
  

	 	(i)	receive from the Borrower all payments of principal, interest and other moneys expressed to be payable to the Facility Agent hereunder on behalf of all or any of the Banks and
receive from the Security Trustee the proceeds of realisation of any Security and shall promptly distribute the same amongst the relevant Banks in accordance with the terms of this Agreement; 

  

	 	(ii)	promptly inform the Lenders and the other Agents of the contents of any notice or request received by it from the Borrower under this Agreement (whether such notice or request is
addressed to the Facility Agent alone or the Facility Agent on behalf of any of the other Banks) and of any other matters which the Facility Agent considers material; 

  

 -59- 









	 	(iii)	promptly inform the Lenders and the other Agents in reasonable detail of any exercise by it of any of the rights, powers and/or discretions vested in it hereunder (but without the
Facility Agent being under any obligation to give prior notice to the Lenders or the other Agents of any such exercise); 

  

	 	(iv)	promptly notify the Lenders and the Documentation Agent of the occurrence of any Event of Default or Possible Event of Default of which the Facility Agent has actual knowledge or
actual notice and the occurrence of which the Facility Agent has verified; and 

  

	 	(v)	if directed by the Majority Banks, exercise (or refrain from exercising) any right, power or discretion vested in it hereunder in accordance with the directions (subject to Clause
19.2 (Decisions requiring consent of the Majority Banks)) of the Majority Banks provided, however, that it may refrain from acting in accordance with any such directions until it has received such security as it may require (whether by way of
payment in advance or otherwise) for all costs, claims, expenses (including legal fees) and liabilities which it will or may expend or incur in complying with such directions and for this purpose the Facility Agent shall make a demand for such
security addressed to all the Lenders. 

  

	20.3.	The Documentation Agent 

  

	 	(A)	Appointment of the Documentation Agent 

  
 Each of the other Banks hereby appoints the Documentation Agent to act as its agent under this Agreement with such rights, powers and discretions as are
expressly delegated to the Documentation Agent hereunder. 
  

	 	(B)	Duties of the Documentation Agent 

  
 In addition to its other obligations under this Agreement, the Documentation Agent shall:- 
  

	 	(i)	be solely responsible (but always at the expense of the Borrower) for administering the preparation of the Security Documents and for obtaining (for review by the Lenders) the legal
opinions referred to in paragraphs 18 through 21 of Schedule 3 and, in connection therewith, for the orderly communication between the parties thereto and attempted resolution of any comments thereon and/or issues arising thereunder and for liaising
throughout with the Borrower and with the Joint Arrangers’ counsel PROVIDED HOWEVER THAT such responsibility (a) shall cease with immediate effect on the first Drawdown Date (b) shall not extend in any way whatsoever to the contents, execution
or consequences of any such 

  

 -60- 








 documentation or opinions and (c) shall not relieve the Facility Agent of its obligations under Clauses
4.1 (Documents and evidence) or 4.4 (Notification to Lenders, Facility Agent and Documentation Agent); 
  

	 	(ii)	promptly inform the Lenders and the other Agents of the contents of any notice or request received by it from the Borrower under this Agreement (whether such notice or request is
addressed to the Documentation Agent alone or the Documentation Agent on behalf of any of the other Banks) and of any information delivered to it pursuant to Clause 10.2(C) (Provision of financial and other information) and of any other matters
which the Documentation Agent considers material; and 

  

	 	(iii)	promptly notify the Lenders and the other Agents of the occurrence of any Event of Default or Possible Event of Default prior to the First Drawdown Date of which the Documentation
Agent has actual knowledge or actual notice and the occurrence of which the Facility Agent has verified. 

  

	20.4.	The Security Trustee 

  

	 	(A)	Appointment of the Security Trustee 

  
 Each of the other Banks hereby appoints the Security Trustee to act for and on its behalf as its trustee in connection with this Agreement and the other
Security Documents and authorises the Security Trustee to execute each Security and exercise such rights, powers and discretion as are specifically delegated to it by the terms thereof together with such rights, powers and discretions as are
reasonably incidental thereto. 
  

	 	(B)	The Trust Property 

  
 In this Clause 20.4 the expression “Trust Property” shall mean:- 
  

	 	(i)	all rights, title and interests that may now or hereafter be granted, mortgaged, charged or assigned in favour of the Security Trustee pursuant to the Security Documents (except to
the extent that such rights, title and/or interests are intended to be for the sole benefit or protection of the Security Trustee); 

  

	 	(ii)	all monies which are received or recovered by or on behalf of the Security Trustee under or by virtue of any right, title and/or interest described in paragraph (i) above; and


  

	 	(iii)	all monies and other assets accrued on, or derived from, any monies described in paragraph (ii) above but shall not include any monies which the Security Trustee has transferred to
the Facility Agent or (being entitled to do so) has retained in accordance with the provisions of Clause 20.4(D). 

  

 -61- 









	 	(C)	Declaration of Trust 

  
 The Security Trustee shall hold the Trust Property for the benefit of each of the Banks from time to time upon the trusts and in accordance with the
provisions contained in this Clause 20.4 and the obligations, rights and benefits vested or to be vested in the Security Trustee by this Agreement, any other Security Document or any document entered into pursuant hereto or thereto shall (as well
before as after enforcement) be performed and (as the case may be) exercised in accordance with the provisions of this Clause 20.4. 
  

	 	(D)	Application of Monies 

  
 Save as expressly stated to the contrary herein or in any other Security Document, any monies received or recovered by the Security Trustee and which form
part of the Trust Property shall (without prejudice to the rights of the Security Trustee pursuant to any Security Document to credit any monies received by it to any suspense account) be transferred forthwith to the Facility Agent for distribution
in accordance with the relevant provisions of this Agreement 
  
 PROVIDED HOWEVER that, before transferring such monies to the Facility Agent, the Security Trustee shall be entitled to deduct therefrom any sum then properly due and payable under this Agreement or any other Security Document to the
Security Trustee or any receiver, attorney, agent, delegate or other person appointed by it and retain that sum for its own account or (as the case may be) remit such sum to the other person to whom it is then due and payable. 
  

	 	(E)	Duties of the Security Trustee 

  
 In addition to its other obligations under this Agreement, the Security Trustee shall:- 
  

	 	(i)	promptly inform Lenders and the other Agents of the contents of any notice or request received by it from the Borrower under any Security Document (whether such notice or request is
addressed to the Security Trustee alone or to the Security Trustee on behalf of any of the other Banks) and of any other matters which the Security Trustee considers material; 

  

	 	(ii)	promptly inform the other Banks in reasonable detail of any exercise by it of any of the rights, powers and/or discretions vested in it hereunder (but without the Security Trustee
being under any obligation to give prior notice to the Banks of any such exercise); 

  

	 	(iii)	promptly notify the other Banks of the occurrence of an Event of Default or Possible Event of Default of which the Security Trustee has actual knowledge or actual notice and the
occurrence of which the Security Trustee has verified; 

  

 -62- 








  

	 	(iv)	if directed by the Majority Banks, exercise (or refrain from exercising) any right, power or discretion vested in it hereunder in accordance with the directions (subject to Clause
19.2 (Decisions requiring consent of the Majority Banks)) of the Majority Banks provided, however, that it may refrain from acting in accordance with any such directions until it has received such security as it may require (whether by way of
payment in advance or otherwise) for all costs, claims, expenses (including legal fees) and liabilities which it will or may expend or incur in complying with such directions and for this purpose the Security Trustee shall make a demand for such
security addressed to all the Lenders. 

  

	 	(F)	Delegation of Powers; Appointment of Co-Trustees 

  
 The Security Trustee shall be entitled:- 
  

	 	(i)	subject to the prior written consent of the Majority Banks and whenever it thinks fit, to delegate by power of attorney or otherwise to any person or persons all or any of the
rights, trusts, powers, authorities and discretions vested in it by this Agreement or any other Security Document and such delegation may be made upon such terms and subject to such conditions and subject to such regulations as the Security Trustee
may think fit and the Security Trustee shall not be bound to supervise the proceedings or be in any way responsible for any loss incurred by reason of any misconduct or default on the part of any such delegate or sub-delegate provided that the
Security Trustee shall have acted reasonably in making such delegation to such delegate and the Security Trustee shall promptly give notice to each of the other Banks of the appointment of any delegate or such delegate as aforesaid; and


  

	 	(ii)	with the prior consent of the other Banks and the Borrower, to appoint (and subsequently to dismiss) such other person or persons as it thinks fit to become additional trustees
hereunder (but so that there shall not be more than two trustees at any time) to assist it in carrying out its rights and duties hereunder and under the other Security Documents and each such additional trustee shall be entitled to the same rights
and subject to the same obligations hereunder as the Security Trustee. 

  

	 	(G)	Amendments and Waivers to Security Documents 

  
 Each of the other Banks hereby authorises the Security Trustee to enter into any amendment to any Security Document other than this Agreement or to grant
any waiver of any obligation of the relevant Obligor under any such Security Document which in either case has either been approved under the relevant provisions of Clause 19.2 (Decisions requiring consent of the Majority Banks) or is, in the
opinion of the Security Trustee, of a minor or technical nature (provided that such amendment is notified to each of the Banks) and not likely to have any material effect on the obligations of such Obligor under the relevant Security Document.

  

 -63- 









	 	(H)	Security Trustee to be Creditor 

  
 The parties hereto agree that for the purpose of enforcing rights established under the Security Documents the Security Trustee will be the joint creditor
of each and every obligation of the Borrower towards the Banks or any of them under this Agreement, so that the Security Trustee will have its own independent right to demand performance by the Borrower of each such obligation but so that payment to
the Security Trustee will serve as payment pro tanto to the relevant Banks and payment to any of the Banks will serve as payment pro tanto to the Security Trustee 
  

	 	(I)	Winding-Up of Trusts 

  
 If:- 
  

	 	(i)	all of the liabilities of the Borrower secured under the Security Documents have been fully and finally discharged; and 

  

	 	(ii)	no future or contingent liability remains outstanding; and 

  

	 	(iii)	the Security Trustee is satisfied that there is no substantial risk of any payment or other transaction under this Agreement or any other Security Document being set aside in any
liquidation or insolvency of the Borrower which has previously occurred or may later occur 

  
 then the trusts herein created shall be wound-up and the Security Trustee shall (at the expense of the Borrower) release, without recourse or warranty,
all the Security, whereupon the Security Trustee and the other Banks shall each be released from their respective obligations under this Clause 20.4 (except those which arose prior to such winding-up). 
  

	 	(J)	Perpetuity Period 

  
 The perpetuity period under the rule against perpetuities if applicable to the Trust Property shall be the period of eighty (80) years from the date of
this Agreement. 
  

	 	(K)	Governing Law 

  
 The trusts created by this Clause 20.4 shall be governed by and construed in accordance with English law. 
  

	20.5.	The Agents: common provisions 

  

	 	(A)	Powers of the Agents generally 

  

 -64- 








 In addition to the powers expressly given to each of the Agents by this Agreement:- 
  

	 	(i)	the other Banks may give any of the Agents (generally or in any particular case) any powers which such Banks consider to be reasonably incidental or conducive to the performance of
such Agent’s functions under this Agreement or otherwise appropriate in the context of those functions; and 

  

	 	(ii)	each Agent has power to take any other action which it considers to be reasonably incidental or conducive to the performance of its functions under this Agreement or otherwise
appropriate in the context of those functions. 

  

	 	(B)	Exercise of the Agents’ powers 

  
 The rights, powers and discretions vested in each Agent by this Agreement shall only be exercised by such Agent in accordance with the instructions of the
Lenders or (if so required in accordance with the provisions of Clause 19.2 (Decisions requiring consent of the Majority Banks)) the Majority Banks provided however that each Agent shall be entitled (but not bound) to exercise or refrain from
exercising any such right, power or discretion without the directions of the Lenders or the Majority Banks (as the case may be) if such Agent reasonably believes that the immediate exercise of such right, power or discretion is necessary or
desirable to protect the interests of the Banks under this Agreement. 
  
 Where any right, power or discretion is vested in an Agent under this Agreement but is expressed as being exercisable in accordance with the directions of the Lenders or the Majority Banks, such right, power or discretion shall not be
exercised by such Agent without the lawful directions of the Lenders or the Majority Banks (as appropriate). 
  

	 	(C)	Limit of Agents’ obligations 

  
 Notwithstanding anything to the contrary expressed or implied herein, no Agent shall:- 
  

	 	(i)	be bound to enquire as to the occurrence or otherwise of any Event of Default or Possible Event of Default or as to the performance by any Obligor of its obligations under any
Security Document; 

  

	 	(ii)	be bound to disclose to any other person any information relating to any Obligor if such disclosure would or might in its opinion (having obtained appropriate legal advice)
constitute a breach of any law or regulation or be otherwise actionable at the suit of any person; 

  

	 	(iii)	have any responsibility to the Banks or any of them or each other for:- 

  

	 	(a)	the financial position, creditworthiness, affairs or prospects of any Obligor; 

  


 -65- 









	 	(b)	the performance or non-performance howsoever by any Obligor of any of its obligations under any Security Document; 

  

	 	(c)	the due execution, effectiveness, genuineness, validity or enforceability of the Security Documents or any document relating thereto or any filing or recording hereof or the taking
of any other action whatsoever and howsoever in connection herewith or the collectability of any sum due hereunder (save in the case of gross negligence or wilful misconduct on the part of such Agent); 

  

	 	(d)	any computations and/or information supplied to the Banks in reliance upon which the Banks (or any of them) have entered into this Agreement; 

  

	 	(iv)	be under any liability whatsoever for any consequence of relying on:- 

  

	 	(a)	any written communication or document believed by it to be genuine or correct and to have been communicated or signed by the person by whom it is purported to have been communicated
or signed; or 

  

	 	(b)	the advice or opinions of any professional advisers selected by it; 

  

	 	(v)	be under any duty to account to any Bank or each other for any sum received by it for its own account or the profit element of any such sum; 

  

	 	(vi)	be under any obligation other than those for which express provision is made herein. 

  

	 	(D)	Rights of the Agents 

  
 Each of the Agents may:- 
  

	 	(i)	carry out its duties hereunder through such officers, directors, employees, consultants or independent agents as it may in its unfettered discretion think fit;


  

	 	(ii)	assume that no Event of Default or Possible Event of Default has occurred and that no Obligor is in breach of its obligations under any Security Document unless such Agent has
actual knowledge or actual notice to the contrary; 

  

 -66- 









	 	(iii)	engage and pay for the advice or services of any lawyers, accountants, surveyors or other experts whose advice or services may to it seem necessary, expedient or desirable and rely
upon any advice so obtained; 

  

	 	(iv)	rely as to any matters of fact which might reasonably be expected to be within the knowledge of the Borrower upon a certificate signed by or on behalf of the Borrower;


  

	 	(v)	rely upon any communication or document believed by it to be genuine. 

  

	 	(E)	Responsibilities of the other Banks 

  
 It is understood that each of the Lenders and the Joint Arrangers has itself been, and will continue to be, solely responsible for making its own
independent appraisal of and investigations into the financial condition, creditworthiness, condition, affairs, status and nature of each Obligor and, accordingly, each of the other Banks warrants to each Agent that it has not relied and will not
hereafter rely on such Agent:- 
  

	 	(i)	to check or enquire on its behalf into the adequacy, accuracy or completeness of any information provided by the Borrower in connection with this Agreement; or


  

	 	(ii)	to assess or keep under review on its behalf the financial condition, creditworthiness, condition, affairs, status or nature of the Borrower. 

  

	 	(F)	Administration 

  
 Subject to the terms of this Agreement, each Security Document shall be serviced, supervised and administered by each Agent respectively in the ordinary
course of its business and in accordance with its usual practices. In performing its duties and functions hereunder, each such Agent shall exercise the same care as it normally exercises in making and administering loans for its own account, but
assumes no further responsibility in respect of such performance. 
  

	 	(G)	Limitation of liability 

  
 No Agent shall be under any liability as a result of taking or omitting to take any action in relation to any Security Document save in the case of gross
negligence or wilful misconduct and none of the Banks will assert or seek to assert against any director, officer or employee of any Agent any claim they might have against any of them in respect of the matters referred to in this Clause.

  

	 	(H)	No restriction on other business 

  
 No Agent (nor any officer thereof) shall be precluded by reason of so acting from underwriting, guaranteeing the subscription of or subscribing for or
otherwise 
  

 -67- 








 acquiring, holding or dealing with any debentures, shares or securities whatsoever of any Obligor or from
entering into any contract or financial or other transaction with or from engaging in any banking or other business with any Obligor and shall not be liable to account for any profit made or payment received by it thereby or in connection therewith.

  

	 	(I)	Restriction on transfer of Commitments 

  
 Except with the prior written consent of the Lenders and the Borrower and without prejudice to the provisions of Clause 24.3 (Transfers), no Agent shall
be entitled pursuant to Clause 24.3 (Transfers) to transfer:- 
  

	 	(i)	the Commitment of such Agent to any Transferor Bank; or 

  

	 	(ii)	any part of its Commitment to any Transferor Bank if, as a result of such transfer, the Commitment of the Facility Agent would be lower than the Commitment of that Lender (other
than any of the Agents) who at that time has the lowest Commitment of all the Lenders (excluding the Agents). 

  

	20.6.	Retirement and replacement of Agents 

  

	 	(A)	One or more of the Agents may retire at any time without assigning any reason by giving to the Borrower and the other Banks not less than thirty (30) days notice of its intention to
do so. Unless such Agent in its notice of retirement nominates any of its associated companies to be its successor, the successor to such Agent may be appointed by the Majority Banks (with the prior written consent of the Borrower, such consent not
to be unreasonably withheld or delayed) during such thirty (30) day period provided that, should they fail to do so, such Agent may then appoint as its successor a reputable and experienced bank with an office in Oslo or London.


  
 For the purposes of this Clause 20.6(A), an
“associated company” of the Agent in question shall mean any company which is a holding company of such Agent or a wholly-owned subsidiary of it or its parent company. 
  

	 	(B)	The Majority Banks may at any time remove one or more of the Agents from office and appoint as its successor one of the other Lenders approved by the Borrower (such approval not to
be unreasonably withheld). 

  

	 	(C)	Any appointment of a successor Agent under paragraph (A) or (B) of this Clause 20.6 shall take effect upon:- 

  

	 	(i)	the successor confirming in writing its agreement to be bound by the provisions of the Security Documents; and 

  

 -68- 









	 	(ii)	notice of such appointment being given to each of the other parties to this Agreement. 

  

	 	(D)	If a successor to any Agent is appointed under the provisions of this Clause 20.6:- 

  

	 	(i)	the outgoing Agent shall be discharged from any further obligation under this Agreement; 

  

	 	(ii)	its successor and each of the other parties hereto shall have the same rights and obligations amongst themselves as they would have had if such successor had been a party hereto in
place of the outgoing Agent; 

  

	 	(iii)	this Clause 20 and the other provisions of this Agreement shall remain in effect for the benefit and protection of the outgoing Agent in relation to any claim or loss which may be
brought against or incurred by it in connection with or as a result of any act, omission, breach, neglect or other occurrence or matter relating to or arising out of the Security Documents which took place before its resignation.


  

	21.	MISCELLANEOUS PROVISIONS 

  

	21.1.	No waiver 

  
 No failure to exercise and no delay in exercising on the part of any Bank any right or remedy under any Security Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or remedy preclude any other or further exercise thereof or the exercise of any other right or remedy. No waiver by the Banks shall be effective unless it is in writing. 
  

	21.2.	Remedies cumulative 

  
 The rights and remedies of the Banks provided in the Security Documents are cumulative and not exclusive of any rights or remedies provided by law.

  

	21.3.	Severability 

  
 If any provision of this Agreement is prohibited or unenforceable in any jurisdiction, such prohibition or unenforceability shall not invalidate the
remaining provisions hereof or affect the validity or enforceability of such provision in any other jurisdiction. 
  

	21.4.	Time of essence 

  
 Time is of essence in respect of all of the obligations of the Borrower under this Agreement. 
  

 -69- 









	22.	WAIVER OF IMMUNITY 

  
 The Borrower irrevocably and unconditionally:- 
  

	 	(A)	waives any right of immunity which it or its assets now has or may hereafter acquire in relation to any legal proceedings (including, but without limitation, actions in rem and/or
in personam) brought against it or its assets by the Banks in relation to any Security Document; and 

  

	 	(B)	consents generally in respect of any such proceedings to the giving of any relief including, without limitation, the issue of any process in connection with such proceedings and the
making, enforcement or execution against any property whatsoever (irrespective of its use or intended use) of any order or judgment which may be made or given in such proceedings. 

  

	23.	COUNTERPARTS 

  
 This Agreement may be executed in any number of counterparts each of which shall be deemed to be an original and, when executed, all such counterparts
taken together shall be deemed to constitute one and the same instrument. 
  

	24.	ASSIGNMENT AND TRANSFER 

  

	24.1.	Benefit of agreement 

  
 This Agreement shall be binding upon and enure to the benefit of each party hereto and its respective successors and assigns. 
  

	24.2.	No assignment or transfer by the Borrower 

  
 The Borrower shall not be entitled to assign or transfer all or any of its rights, benefits or obligations under this Agreement. This Agreement shall
confer rights only upon a person expressed to be a party to it and a person who is not such a party shall have no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement. 
  

	24.3.	Transfers 

  
 Subject to Clauses 20.5(I) (Restriction on transfer of Commitments), any Lender (the “Transferor Bank”) may at any time cause:-

  

	 	(A)	all (but not part only) of its rights, benefits and/or obligations under this Agreement and the other Security Documents to be transferred to any of its subsidiaries, affiliates or
associates, which for the purpose of this Clause means subsidiaries, affiliates or associates of which the relevant Lender owns more than 50% of the issued shares, or to a federal reserve bank, central bank or other monetary or regulatory authority
having jurisdiction over such Lender (a “Related Bank”) without the consent of the Borrower; or 

  

 -70- 









	 	(B)	part of its rights, benefits and/or obligations hereunder and the other Security Documents to be transferred to a Related Bank with the consent of the Borrower such consent not to
be unreasonably withheld (except that such consent shall not be required where any such Lender has been required by any applicable law or regularity authority to cause such part transfer); or 

  

	 	(C)	subject to Clause 24.6 (Joint Arrangers’ right of first refusal), all or part of its rights, benefits and/or obligations hereunder and the other Security Documents to be
transferred to any other bank or financial institution with the consent of the Borrower (such consent not to be unreasonably withheld it being agreed however that it shall not be unreasonable for the Borrower to withhold its consent to any proposed
transfer by a Lender which is a Joint Arranger if, as a result of such transfer, the aggregate Commitments of the Joint Arrangers would fall below thirty five point one per cent (35.1%) of the aggregate Commitments of all the Lenders together)


  
 (any such transferee being herein referred to
as a “Transferee Bank”) by delivering to the Facility Agent a Transfer Certificate duly completed and duly executed by the Transferor Bank and the Transferee Bank. Any transfer by a Lender shall be offered and effected in compliance
with all applicable laws and regulations. If the Borrower fails to 
 respond to a written request for such consent within ten (10) Banking
Days of such request being made, the Borrower shall be deemed to have given such consent. No such transfer is binding on, or effective in relation to, any of the parties hereto unless it is effected or evidenced by a Transfer Certificate which
complies with the provisions of this Clause 24.3 and is signed by or on behalf of the Transferor Bank, the Transferee Bank and the Facility Agent (on behalf of itself, the Borrower and the other Banks). Upon signature of any such Transfer
Certificate by the Facility Agent, which signature shall be effected as promptly as is practicable after such Transfer Certificate has been delivered to the Facility Agent, and subject to the terms of such Transfer Certificate, such Transfer
Certificate shall have effect as set out below. 
  
 The following
further provisions shall have effect in relation to any Transfer Certificate:- 
  

	 	(i)	a Transfer Certificate may be in respect of a Lender’s rights in respect of all or part of its Commitment and shall be in respect of the same proportion of its Percentage and
of its Contribution; 

  

	 	(ii)	a Transfer Certificate shall only be in respect of rights and obligations of the Transferor Bank in its capacity as a Lender and shall not transfer its rights and obligations as an
Agent or in any other capacity, as the case may be and such other rights and obligations may only be transferred in accordance with any applicable provisions of this Agreement; 

  

 -71- 









	 	(iii)	a Transfer Certificate shall take effect in accordance with English law as follows:- 

  

	 	(a)	to the extent specified in the Transfer Certificate, the Transferor Bank’s payment rights and all its other rights (other than those referred to in paragraph (B) above) under
this Agreement are assigned to the Transferee Bank absolutely, free of any defects in the Transferor Bank’s title and of any rights or equities which the Borrower had against the Transferor Bank; 

  

	 	(b)	the Transferor Bank’s Commitment is discharged to the extent specified in the Transfer Certificate; 

  

	 	(c)	the Transferee Bank becomes a Lender with a Contribution, a Percentage and a Commitment of the amounts specified in the Transfer Certificate; 

  

	 	(d)	the Transferee Bank becomes bound by all the provisions of this Agreement and the other Security Documents which are applicable to the Lenders generally, including those about pro
rata sharing and the exclusion of liability on the part of, and the indemnification of, the Agents in accordance with the provisions of this Agreement and to the extent that the Transferee Bank becomes bound by those provisions, the Transferor Bank
ceases to be bound by them; 

  

	 	(e)	an Advance or part of an Advance which the Transferee Bank makes after the Transfer Certificate comes into effect ranks in point of priority and security in the same way as it would
have ranked had it been made by the Transferor Bank, assuming that any defects in the Transferor Bank’s title and any rights or equities of the Borrower against the Transferor Bank had not existed; 

  

	 	(f)	the Transferee Bank becomes entitled to all the rights under this Agreement which are applicable to the Lenders generally, including but not limited to those relating to the
Majority Banks and those under Clauses 6.6 (Market disruption; non-availability), 7 (Illegality, Increased Costs and Force Majeure) and 14 (Fees), and to the extent that the Transferee Bank becomes entitled to such rights, the Transferor Bank ceases
to be entitled to them; 

  

	 	(g)	the rights and equities of the Borrower referred to above include, but are not limited to, any right of set off and any other kind of cross-claim; and 

  

	 	(h)	the Borrower and each of the other Banks hereby irrevocably authorise and instruct the Facility Agent to sign any such Transfer Certificate on its behalf and undertake not to
withdraw, revoke or qualify such authority or instruction at any time. Promptly upon its signature of any Transfer Certificate, the Facility Agent shall notify the Borrower, the other Agents, the Transferor Bank and the Transferee Bank.


  

 -72- 









	24.4.	Reliance on Transfer Certificate 

  

	 	(A)	The Facility Agent shall be entitled to rely on any Transfer Certificate believed by it to be genuine and correct and to have been presented or signed by the persons by whom it
purports to have been presented or signed, and shall not be liable to any of the parties to any of the Security Documents for the consequences of such reliance. 

  

	 	(B) (i)	The Facility Agent shall at all times during the continuation of this Agreement maintain a register in which it shall record the name, Commitments, Contributions, Percentages and
administrative details (including the Lending Branch) from time to time of each Lender holding Transfer Certificates and the date at which the transfer referred to in such Transfer Certificate held by each Lender was transferred to such Lender, and
the Facility Agent shall make the said register available for inspection by any Bank and the Borrower during normal banking hours upon receipt by the Facility Agent of reasonable prior notice requesting the Facility Agent to do so.


  

	 	(ii)	The entries on the said register shall, in the absence of manifest error, be conclusive in determining the identities of the Lenders and the Commitments, the Contributions, the
Percentages and the Transfer Certificates held by the Lenders from time to time and the principal amounts of such Transfer Certificates and may be relied upon by each of the parties hereto for all purposes in connection with the Security Documents.


  

	24.5.	Transfer fees and expenses 

  
 If any Lender causes the transfer of all or any part of its rights, benefits and/or obligations under this Agreement, it shall pay to the Facility Agent
for its own account a registration fee of one thousand Dollars (USD1,000) for each transfer, and shall also pay to the Facility Agent on demand all costs, fees and expenses (including, but not limited to, legal fees and expenses), and all value
added tax thereon, certified by the Facility Agent as having been incurred by it in connection with such transfer. 
  

	24.6.	Joint Arrangers’ right of first refusal 

  
 If any Lender wishes to transfer all or any part of its rights, benefits and/or obligations under the Security Documents to any bank or financial
institution other than a Related Bank, it shall give written notice of the proposed transfer to the Facility Agent who shall forthwith advise the Joint Arrangers thereof. The Joint Arrangers shall then have the 
  

 -73- 








 option, to be exercised by notice in writing to the relevant Lender not later than ten (10) Banking Days
after the receipt by the Facility Agent of the relevant Lender’s notice, of requiring the Lender to transfer to them all but not part only of those rights, benefits and/or obligations which such Lender wishes to transfer as referred to in its
notice to the Facility Agent. 
  
 Any such transfer shall be
effected in accordance with Clause 24.3 (Transfers). In addition, the following provisions shall apply thereto:- 
  

	 	(A)	any one or more of the Joint Arrangers may exercise the option under this Clause 24.6 without there being any requirement for all of the Joint Arrangers to agree to the exercise
thereof; 

  

	 	(B)	the rights, benefits and obligations to be transferred by the relevant Lender shall be transferred to those Joint Arrangers who exercise their option in relation thereto pro rata in
accordance with their Commitments; 

  

	 	(C)	unless the relevant Lender and the relevant Joint Arrangers agree otherwise, any Transfer Certificate to be executed pursuant to this Clause 24.6 shall be executed by such Lender
and such Joint Arrangers not later than fifteen (15) Banking Days after the date of receipt by the Facility Agent of the Lender’s notice referred to above. 

  

	24.7.	Sub-participation 

  
 Except in respect of sub-participation between the Lender and its wholly owned subsidiary (in which case, provided that such sub-participation is notified
to the Borrower, no consent is required from the Borrower) a Lender may not openly or silently sub-participate all or any part of its rights and/or obligations under the Security Documents without the consent of the Borrower (such consent not to be
unreasonably withheld). 
  

	24.8.	Lending Branch 

  
 Each Lender shall lend through its Lending Branch and, if any Lender wishes to change its Lending Branch, such Lender shall notify the Facility Agent
promptly of such change and the Facility Agent shall notify the Borrower. 
  

	24.9.	Disclosure of information 

  
 Any Lender may disclose to a prospective assignee, substitute or transferee or to any other person who may propose entering into contractual relations
with the Lender in relation to this Agreement such information about the Borrower and the Smedvig Group as such Lender shall consider appropriate if such Lender first procures that the relevant prospective assignee, substitute or transferee or other
person (such person together with any prospective assignee, substitute or transferee being hereinafter described as the “Prospective Assignee”) shall undertake to the 
  

 -74- 








 Borrower in writing and subject to the Borrower’s written approval (except in the case of a transfer
pursuant to Clause 24.3(A) which is not subject to Borrower’s written approval) within ten (10) Banking Days of receipt of such request to keep secret and confidential and, not without the prior written consent of the Borrower, such consent not
to be unreasonably withheld, to disclose to any third party any of the information, reports or documents supplied by such Lender provided however that the Prospective Assignee shall be entitled to disclose any such information, reports or documents
in the following situations:- 
  

	 	(A)	in relation to any proceedings arising out of any of the Security Documents to the extent considered necessary by the Prospective Assignee to protect its interest; or


  

	 	(B)	pursuant to a court order relating to discovery or otherwise; or 

  

	 	(C)	pursuant to any law or regulation or to any fiscal, monetary, tax, governmental or other competent authority; or 

  

	 	(D)	to its auditors and legal or other professional advisers. 

  
 In addition, the Prospective Assignee shall be entitled to disclose or use any such information, reports or documents if the information contained therein
shall have emanated, in conditions free from confidentiality, bona fide from some person other than such Lender or the Borrower or any Group Member. 
  

	24.10.	No additional costs 

  
 If at the time of, or immediately after, any transfer by a Lender of any part of the rights, benefits and/or obligations under the Security Documents, or
any change in its Lending Branch, the Borrower would be obliged to pay to the Transferee Bank or (in the case of a change of Lending Branch) the Lender under Clauses 7.2 (Increased costs) or 8.6 (Grossing- up for Taxes) any sum in excess of the sum
(if any) which it would have been obliged to pay to the relevant Lender under the relevant Clause in the absence of such transfer or change, the Borrower shall not be obliged to pay that excess. 
  

	25.	NOTICES 

  

	25.1.	Mode of communication 

  
 Except as otherwise provided herein, each notice, request, demand or other communication to be made or delivered hereunder shall be given in writing but,
unless otherwise stated, may be made by e-mail or telefax. 
  

	25.2.	Communications through Facility Agent 

  
 Except as otherwise provided herein, all notices and other communications to be made between the Borrower on the one hand and the Lenders or any other of
the Banks on the other hand in relation to any Security Document shall be transmitted through the Facility Agent. 
  

 -75- 









	25.3.	Address 

  
 Any notice, request, demand or other communication to be made or delivered pursuant to this Agreement shall be made or delivered as follows:- 

 

	 	(A)	to the Borrower at:- 

  
 Finnestadveien 28 
 PO Box 110 
 4001 Stavanger 
 Norway 
  
 Fax number: (47) 51 50 96 88 
 Marked for the attention of: Finance Department – Harald Grøsfjeld/Jon Olav Østhus 
  

	 	(B)	to the Facility Agent at:- 

  
 Den norske Bank ASA 
 Stranden 21 

N-0021 Oslo 
 Norway 
  
 Telefax number: (47) 22 48 28 94 
 Marked for the attention of: Credit Administration Shipping 
  
 (C) to the Documentation Agent at:- 
  
 Stranden 21 
 N-0021 Oslo 
 Norway 
  
 Telefax number (47) 22 48 2894 
 Marked for
the attention of: Credit Administration Shipping 
  
 (D) to each
Lender at its Lending Branch 
  
 or to such other address, or
telefax number as each such addressee may specify to the other relevant party or parties by not less than fifteen (15) days’ written notice. 
  

	25.4.	Receipt 

  
 Each such notice, request, demand or other communication shall be deemed to have been made or delivered when:- 
  

	 	(A)	(in the case of telefax) at the time and date shown on the transmission confirmation slip printed by the sender’s telefax machine (unless the date of despatch is not a business
day in the country of the addressee or the time of 

  

 -76- 








 despatch is outside normal business hours in the country of the addressee, in which case such telefax
shall be deemed to have been received at the opening of business on the next such business day); 
  

	 	(B)	(in the case of any letter) when delivered to the addressee’s address for the time being specified in or notified pursuant to Clause 24.3 (Transfers) or, if sent by first class
post with postage prepaid in an envelope addressed to the addressee at that address, five (5) days after being deposited in the post; 

  

	 	(C)	(in the case of an e-mail), when the sender has received confirmation of transmission of such e-mail, provided that such e-mail has not been returned as undeliverable within a
period of two hours to the sender, and provided that the sender sends to the recipient a “hard copy” of such e-mail by first class post within two (2) days after such e-mail has been sent. 

  

	25.5.	Language 

  
 Each notice, request, demand or other communication made or delivered by one party to another pursuant to this Agreement shall be in the English language
or accompanied by a certified true and accurate English translation thereof. 
  

	26.	GOVERNING LAW 

  
 This Agreement shall be governed by, and construed in accordance with, English law. 
  

	27.	JURISDICTION 

  

	27.1.	Submission to jurisdiction 

  
 Each of the parties hereto agrees that any legal action or proceeding arising out of or relating to this Agreement may be brought in the High Court of
Justice in England and hereby irrevocably submits itself to the non-exclusive jurisdiction of that court. The submission by each party to such jurisdiction shall not limit the right of any of the other parties to commence any proceedings arising out
of this Agreement in whatsoever jurisdiction they may choose, nor shall the commencement of any such legal action or proceeding in one jurisdiction preclude any of the other parties from beginning any further or other such legal action or proceeding
in the same or any other jurisdiction. 
  

	27.2.	Address for service of proceedings 

  
 The Borrower hereby irrevocably appoints Norose Notices Limited (reference JSPG/AA11376) at its registered office for the time being which is presently at
Kempson House, Camomile Street, London EC3A 7AN as its agent (the “Process Agent”) to receive on behalf of the Borrower and its property service of copies of the writ, summons and complaint and any other process which may be served
in any such action or proceeding. Such service may be made by mailing or delivering a copy of such process to the Borrower in the care of the Process Agent (or any successor thereto, as the case 
  

 -77- 








 may be) at the Process Agent’s above address (or the address of any successor thereto, as the case
may be), and the Borrower hereby irrevocably authorises and directs the Process Agent (and any successor thereto) to accept such service on their behalf. The Borrower shall appoint a successor agent for service of process should the agency of Norose
Notices Limited terminate for any reason, and further shall at all times maintain an agent for service of process in London so long as there shall be outstanding any obligations hereunder. The Borrower shall give notice to the Facility Agent of any
appointment of successor agents for service of process, and shall obtain from each successor agent a letter of acceptance of appointment and promptly deliver the same to the Facility Agent. As an alternative method of service, the Borrower 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 the Borrower at its address. 
  

 -78- 








 SCHEDULE 1 
 THE LENDERS AND THEIR COMMITMENTS 
  

									
	 Name

	  	Address, and Telefax Number

	  	 Commitment
 USD

	  	 Percentage
 %


	 BNP Paribas
 Oslo Branch
	  	Karl Johans gt. 7
P.O. Box 106 Sentrum
0155 Oslo
Norway  
 Fax:          (47) 22 41 08
44
Attention: Shipping
	  	*	  	*
				
	Nordea Bank Norge ASA (formerly known as Christiania Bank og Kreditkasse ASA)	  	1) Information related to Loan Administration  
     P.O. Box 1166 Sentrum
    0107 Oslo
    Norway
  
     Fax:  + 47 22 48 42 78
    Attn:
Int. Loan
              Administration
	  	*	  	*
				
	 	  	2) Information related to Credit/Commercial Matters  
     PO Box 1166 Sentrum
    0107 Oslo
    Norway
  
     Fax:          (47) 22 48 66 68
    Attention: Oil & Offshore
	  	 	  	 



	*	The confidential portion of this section of the agreement has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential
treatment. 

  

 -79- 









							
	 Name

	  	 Address, and Telefax Number

	  	 Commitment
 USD

	  	 Percentage
 %


	 Citbank International plc
	  	 1) 2nd Floor
     4 Harbour
Exchange
     Isle of Dogs
     London E14 9GE
  
 (Answerback 896581 CITIUK
G)
 Fax:          (44) 20 7500 5806
 Attention: UK Loans Processing Unit
	  	*	  	*
				
	 Commerzbank
 International S.A.
	  	 1) Information related to Loan
    Administration:
     11, rue Notre Dame
     L-2240
Luxembourg
  
 Tel:          (35)
2 477 911 459
 Fax:          (35) 2 477 911 386
	  	*	  	*
				
	 	  	 2) Information related to
    Credit/Commercial matters:
     Commerzbank AG
     Global
Shipping Hamburg
     Ness 7-9
     20457 Hamburg
     Germany
  
 Fax:          (49) 40 36 83 4068/ 4123
 Attention: Global Shipping
	  	 	  	 



	*	The confidential portion of this section of the agreement has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential
treatment. 

  

 -80- 









							
	 Name

	  	 Address, and Telefax Number

	  	 Commitment
 USD

	  	 Percentage
 %


	 Credit Agricole Indosuez
	  	 1) Lending office and all
    information related to Loan
    Administration
matters:
     Shipping Finance
     Division/Loan Administration
     9 Quai du President Paul Doumer
     92920 Paris La Defense
     Cedex
     France
  
 Tel:          + (33) 141 89 12 49
 Fax:          + (33) 141 89 19 34
 Attention: DFMA/Loan Administration
	  	*	  	*
				
	 	  	 2) Information related to
    Credit/Commercial matters:
     Representative Office
     Norway
     Ruseløkkveien 6
     N-0251 Oslo
     Norway
  
 Fax:          +(47) 22 01 06 51

Tel:          +(47) 22 01 06 50
	  	 	  	 
				
	 Den norske Bank ASA
	  	 Stranden 21
 N-0107 Oslo
 Norway
  
 Fax:          (47) 22 48 28 94
 Attention: Credit Administration Shipping
	  	*	  	*



	*	The confidential portion of this section of the agreement has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential
treatment. 

  

 -81- 









							
	 Name

	  	 Address, and Telefax Number

	  	 Commitment
 USD

	  	 Percentage
 %


	 Deutsche Bank AG in
 Hamburg
	  	 Brandstwiete 1
 20457 Hamburg
  
 Fax:            (49) 40 37 01 46
49
 Attention: Shipfinancing Department
	  	*	  	*
				
	 Deutsche Schiffsbank AG
	  	 Domshof 17
 D-28195 Bremen
  
 Tel:            +49 421
3609-0
 Fax:            +49 421 323539
	  	*	  	*
				
	 Fokus Bank ASA
	  	 Information related to Loan
 Administration:
 Akersgata 28
 PO Box 1170
Sentrum
 0107 Oslo
 Norway
  
 Fax:            + 47 24 05 55
30
 Tel:            + 47 24 05 54 30
 Attention: Corporate & Institutional Banking, Oslo Region
	  	*	  	*
				
	 	  	 Information related to
 Credit/Commercial
matters:
 Akersgata 28
 PO Box 1170 Sentrum
 0107 Oslo
 Norway
  
 Fax:            + 47 24 05 55 30
 Tel:            + 47 24 05 54 30
 Attention: Corporate & Institutional Banking, Oslo Region
	  	 	  	 



	*	The confidential portion of this section of the agreement has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential
treatment. 

  

 -82- 









							
	 Name

	  	 Address, and Telefax Number

	  	Commitment
USD

	  	 Percentage
 %


				
	 Fortis Bank (Nederland)
 N.V.
	  	 1) Information related to Loan
    Administration:
     Fortis Bank (Nederland) N.V.
     CBO/CB
     Loan Administration
     Coolsingel 93
     NL-3012 AE Rotterdam
     The Netherlands
  
 Fax:          (31) 10 401 6118
	  	 	  	*
				
	 HSH Nordbank AG
	  	 Gerhart-Hauptmann-Platz 50
 D-20095 Hamburg

Germany
  
 Fax:          (49) 40 33 333 4118
 Attention: Shipping
Department
	  	*	  	*
				
	 ING Bank N.V.
	  	 De Amsterdamse Poort
 Location Code HE
02.09
 Bijlmerplein 888
 P O Box 1800
 1000 BV Amsterdam
 Netherlands
  
 Attention: Natural Resources
                     (Offshore)
 Tel:          +31 20 576 8896
 Fax:          +31
20 563 5164
	  	*	  	*
				
	 Nedship Bank N.V.
	  	 Nedship Bank (Nordic)
 Strandgaten 18
 P O Box 701 Sentrum
 5807 Bergen
 Norway
  
 Fax:          (47) 55 30 95 50
	  	*	  	*



	*	The confidential portion of this section of the agreement has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential
treatment. 

  

 -83- 









							
	 Name

	  	 Address, and Telefax Number

	  	 Commitment
 USD

	  	 Percentage
 %


	 Skandinaviska Enskilda
 Banken AB (publ)
	  	 Rosenkrantz gate 22
 P O Box 1843 Vika
 N-0123 Oslo
 Norway
  
 Fax:          (47) 22 82 71 24

Attention: Shipping/Offshore
	  	*	  	*
				
	 Sparebanken Rogaland
	  	 Bjergsted Terrasse 1
 P O Box 218
 N-4001 Stavanger
 Norway
  
 Fax:          (47) 51 53 47 55

Attention: Shipping/Offshore
	  	*	  	*
				
	 Vereins- und Westbank
 AG, Hamburg
	  	 22, Alter Wall
 D-20457 Hamburg
  
 Fax:          (49) 40 3692 3894

Attention: Corporate Banking
                    Department
– Energy
	  	*	  	*
				
	 	  	Total	  	500,000,000	  	100



	*	The confidential portion of this section of the agreement has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential
treatment. 

  

 -84- 








 SCHEDULE 2 
  
 FORM OF DRAWDOWN NOTICE 

 
 Den norske Bank ASA 
 Stranden 21 
 N-0107 Oslo 
 Norway 
  
 Fax No. + 47 22 48 28 94 
 Attn: Credit Administration Shipping 
  
 Date:             
  
 Dear Sirs, 
  
 USD500,000,000 Reducing and Revolving Credit Loan 
 Facility Agreement dated 10 May 2001 as amended
and restated pursuant to a third  
 supplemental agreement dated June 2003 
  
 We refer to the above Facility Agreement and hereby give you notice that we wish to draw an
Advance of [            ] Dollars (USD[            ]) on [date] [and select an Interest Period in respect thereof of
[            ] ([    ]) months]. The funds should be credited to [name and number of account] with [New York City]. 
  
 We confirm that the borrowing to be effected by such Advance will be within our corporate
powers, has been validly authorised by appropriate corporate action and will not cause any limit on our borrowings (whether imposed by statute, regulation, agreement or otherwise) to be exceeded. 
  
 We further confirm that no Event of Default or Possible Event of Default has occurred and is
continuing or would result from the making of the Advance and that the representations and warranties contained in Clause 9.2 of the Facility Agreement are true and correct as at the date hereof as if the same were made with respect to the facts and
circumstances existing as at today’s date. 
  
 Words and expressions defined
in the Facility Agreement shall have the same meanings where used herein. 
  
 For and on behalf of 
 SMEDVIG RIG AS

  

 -85- 








 SCHEDULE 3 
  
 CONDITIONS PRECEDENT 
  
 The Facility Agreement and the Guarantee 
  

	1.	This Agreement and the Guarantee duly executed. 

  
 The Security 
  

	2.	Due execution and registration of first priority mortgages over those Units (the “Initial Units”) described in paragraph 1 of Schedule 9 and due execution of assignments
of all associated earnings and insurance policies (the “Relevant Policies”). 

  

	3.	Evidence that each of the Initial Units has been insured upon such terms, for such amounts, with such underwriters and in respect of such risks as may be acceptable to the Facility
Agent and that the interest of the Security Trustee in any such insurances as assignee has been or will immediately be noted by all underwriters, brokers, reinsurers and mutual clubs and associations concerned. 

  

	4.	Evidence (where applicable) of the immediate and unconditional availability of letters of undertaking generally acceptable to the London market addressed to the Security Trustee by
relevant brokers and mutual clubs and associations covering the Relevant Policies. 

  

	5.	Evidence that each of the Initial Units is in class and free of any requirement or other notation of the relevant classification society which affects class and has not been
complied with in accordance with its terms. 

  

	6.	Due execution (by the relevant owners) of charges over or pledges of (i) the Relevant Portion of shares in the capital of each of the companies and partnerships (the “Relevant
Companies”) described in paragraph 2 of Schedule 9 and (ii) (if not already included as one of the Relevant Companies in paragraph 2 of Schedule 9) all of the shares in the capital of each of the partnerships (the “Relevant Owners”)
which are the registered owners of the Secured Units described in paragraph 1 of Schedule 9 (or deemed to be so described in the case of a New Asset) (the “Relevant Units”) and due execution of all ancillary documents required by all such
charges and/or pledges. 

  

	7.	Due execution of a first priority assignment of the benefit of (inter alia) the agreements and securities described in paragraph 3 of Schedule 9. 

  

	8.	Due execution of notices of the assignments referred to in paragraph 2, 6 and 7 above and, where possible (the Borrower doing its utmost to obtain), of acknowledgements of such
notices by the recipients thereof. 

  

	9.	Due execution of subordination letters addressed to the Security Trustee by those Group Members who are managers of Secured Units under relevant management agreements.


  

 -86- 








 Corporate Documents 
  

	10.	A certified copy of the bye-laws (“vedtekter”) of each Obligor. 

  

	11.	Certified copies of resolutions of the directors of each Obligor approving the relevant Security Documents and the transactions contemplated thereby and authorising the execution of
such of the Security Documents to which each such Obligor is party by an officer or attorney of such Obligor. 

  

	12.	The original powers of attorney, if any, issued pursuant to the resolutions referred to above. 

  

	13.	An original company certificate (“firmaattest”) in respect of each Obligor dated not more than thirty (30) days before the Availability Date. 

  
 Consents 
  

	14.	Certified copies of any consents required from any authority for the execution of and performance by each Obligor of its obligations under the Security Documents.


  
 Fees 
  

	15.	The fee letters referred to in Clauses 14.2 (Arrangement fee) and 14.3 (Agency fee) duly executed by all of the parties thereto. 

  

	16.	Evidence that all such fees referred to in Clause 14 (Fees) as are payable on or before the Availability Date have been received by the Facility Agent. 

  
 Legal Opinions 
  

	17.	A legal opinion from Messrs. Stephenson Harwood concerning such matters of English law as the Lenders may require. 

  

	18.	A legal opinion from Messrs. Wikborg Rein & Co. concerning such matters of Norwegian law as the Lenders may require. 

  

	19.	A legal opinion from (i) Messrs. Thommessen Krefting Greve Lund concerning the assignment described in paragraph 7 of this Schedule 3 and (ii) counsel acceptable to the
Documentation Agent in each relevant jurisdiction concerning due execution and registration of the mortgages over the Initial Units required by paragraph 2 above. 

  

	20.	Current written legal opinions and/or reports (or confirmation of no material change to existing opinions) from Norwegian and English lawyers acceptable to the Joint Arrangers in
connection with the Balder Disputes. 

  

 -87- 








 Process agent 
  

	21.	Confirmation from Norose Notices Limited that it will act as the process agent for service of process in England of the Borrower. 

  
 Representations and warranties and undertaking concerning ownership of Relevant Units

  

	22.	A certificate from the Borrower confirming that all of the representations and warranties contained in Clauses 9.1 (Initial representations and warranties) and 9.2 (Continuing
representations and warranties) are true and correct on and as of the Availability Date. 

  

 -88- 








 SCHEDULE 4 
  
 FORM OF TRANSFER CERTIFICATE

  
 Transfer Certificate 
  
 Lenders are advised not to employ Transfer Certificates or otherwise to assign or transfer
interests in the Facility Agreement without further ensuring that the transaction complies with all applicable laws and regulations, including the Financial Services Act 1986 and regulations made thereunder and similar statutes which may be in force
in other jurisdictions 
  

	To:	Den norske Bank ASA, as agent on their own behalf and for and on behalf of the Borrower, the Facility Agent, the Documentation Agent, the Security Trustee, the Lenders and the Joint
Arrangers defined in the Facility Agreement referred to below. 

  
 Date: [            ]         
  

Attention: [            ] 
  
 This certificate (“Transfer Certificate”) relates to a USD500,000,000 reducing and revolving credit loan facility agreement
dated 10 May 2001 as amended and restated pursuant to a third supplemental agreement dated · June 2003 (the “Facility Agreement”)
made between (1) Smedvig Rig AS (the “Borrower”), (2) the banks and financial institutions defined therein as lenders (the “Lenders”), (3) Nordea Bank Norge ASA, Citigroup Global Markets Ltd, Den norske Bank ASA and
Skandinaviska Enskilda Banken AB (Publ.) as Joint Arrangers, (4) Den norske Bank ASA as Facility Agent and (5) Den norske Bank ASA as Documentation Agent and (6) Den norske Bank ASA as Security Trustee. Terms defined in the Facility Agreement shall,
unless otherwise defined herein, have the same meanings herein as therein. 
  
 In
this Transfer Certificate:- 
  
 the “Transferor” means [full
name] of [Lending Branch]; and 
  
 the “Transferee”
means [full name] of [Lending Branch]. 
  

	1.	The Transferor as beneficial owner assigns to the Transferee absolutely all rights and interests (present, future or contingent) which the Transferor has as Lender under or by
virtue of the Facility Agreement and the other Security Documents in relation to [    ] per centum ([    ]%) of the Contribution of the Transferor (or its predecessors in title) which are set out below:-


  

			
	 Date of Contribution
	 	Amount

  

 -89- 









	2.	By virtue of this Transfer Certificate and Clause 24 of the Facility Agreement, the Transferor is discharged [entirely from its Available Commitment which amounts to
USD[             ]] [from [     ] per centum ([     ]%) of its Available Commitment, which percentage represents
USD[             ]]. 

  

	3.	The Transferee hereby requests the Borrower and the Banks to accept the executed copies of this Transfer Certificate as being delivered pursuant to and for the purposes of Clause
24.3 of the Facility Agreement so as to take effect in accordance with the terms thereof on [date of transfer]. 

  

	4.	The Transferee:- 

  

	 	(A)	confirms that it has received a copy of the Facility Agreement and the other Security Documents together with such other documents and information as it has required in connection
with the transaction contemplated thereby; 

  

	 	(B)	confirms that it has not relied and will not hereafter rely on the Transferor or any other of the Banks to check or enquire on its behalf into the legality, validity, effectiveness,
adequacy, accuracy or completeness of the Facility Agreement, any of the other Security Documents or any such documents or information; 

  

	 	(C)	agrees that it has not relied and will not rely on the Transferor or any other of the Banks to assess or keep under review on its behalf the financial condition, creditworthiness,
condition, affairs, status or nature of the Borrower (save as otherwise expressly provided in the Facility Agreement); 

  

	 	(D)	warrants that it has power and authority to become a party to the Facility Agreement and has taken all necessary action to authorise execution of this Transfer Certificate and to
obtain all necessary approvals and consents to the assumption of its obligations under the Facility Agreement and the other Security Documents; and 

  

	 	(E)	if not already a Lender, appoints the Facility Agent and the Facility Agent to act as its agents as provided in the Facility Agreement and the other Security Documents and agrees to
be bound by the terms of the Facility Agreement. 

  

	5.	The Transferor:- 

  

	 	(A)	warrants to the Transferee that it has full power to enter into this Transfer Certificate and has taken all corporate action necessary to authorise it to do so;


  

	 	(B)	warrants to the Transferee that this Transfer Certificate is binding on the Transferor under the laws of England, the country in which the Transferor is incorporated and the country
in which its lending office is located; and 

  

 -90- 









	 	(C)	agrees that it will, at its own expense, execute any documents which the Transferee reasonably requests for perfecting in any relevant jurisdiction the Transferee’s title under
this Transfer Certificate or for a similar purpose. 

  

	6.	The Transferee hereby undertakes with the Transferor and each of the other parties to the Facility Agreement and the other Security Documents that it will perform in accordance with
its terms all those obligations which by the terms of the Facility Agreement and the other Security Documents will be assumed by it after delivery of the executed copies of this Transfer Certificate to the Facility Agent and satisfaction of the
conditions (if any) subject to which this Transfer Certificate is expressed to take effect. 

  

	7.	By execution of this Transfer Certificate on their behalf by the Facility Agent and in reliance upon the representations and warranties of the Transferee, the Borrower and the Banks
each accept the Transferee as a party to the Facility Agreement and the other Security Documents with respect to all those rights and/or obligations which by the terms of the Facility Agreement and the other Security Documents will be assumed by the
Transferee (including those about pro rata sharing and the exclusion of liability on the part of, and the indemnification of, the Banks as provided by the Facility Agreement) after delivery of the executed copies of this Transfer Certificate to the
Facility Agent and satisfaction of the conditions (if any) subject to which this Transfer Certificate is expressed to take effect. 

  

	8.	Neither the Transferor nor any other of the Banks:- 

  

	 	(A)	makes any representation or warranty nor assumes any responsibility with respect to the legality, validity, effectiveness, adequacy or enforceability of the Facility Agreement or
the other Security Documents or any document relating thereto; or 

  

	 	(B)	assumes any responsibility for the financial condition of the Borrower or for the performance and observance by the Borrower of any of its obligations under the Facility Agreement
and any and all such conditions and warranties, whether express or implied by law or otherwise, are hereby excluded (except as aforesaid). 

  

	9.	The Transferor and the Transferee each undertake that they will on demand fully indemnify the Facility Agent and the Facility Agent in respect of any claim, proceeding, liability or
expense which relates to or results from this Transfer Certificate or any matter concerned with or arising out of it unless caused by the Facility Agent’s or the Facility Agent’s gross negligence or wilful misconduct, as the case may be.


  

	10.	The agreements and undertakings of the Transferee in this Transfer Certificate are given to and for the benefit of and made with each of the other parties to the Facility Agreement
and the other Security Documents. 

  

	11.	This Transfer Certificate shall be governed by, and construed in accordance with, English law. 

  

 -91- 









			
	 Transferor
	  	Transferee
		
	[insert name of Transferor]	  	[insert name of Transferee]
		
	 By:
	  	By:
	 Dated:
	  	Dated:

  
 Facility Agent

  
 Agreed for and on behalf of itself as Facility Agent, the
Borrower and the Banks. 
  
 Den norske Bank ASA 

 
 By: 
  
 Dated: 
  

 -92- 








 The Schedule 
  
  

			
	 	  	 Portion Transferred ( ̈%)

	 Commitment
	  	 
		
	 Existing Percentage
	  	 Percentage of
 Transferee Bank


  
 Administrative
Details of Transferee 
  
 Name of
Transferee: 
  
 Lending Branch: 
  
 Contact person 
 (Loan Administration Department): 
  
 Telephone: 
 Telex: 
 Fax: 
  
 Contact person 
 (Credit Administration Department): 
  
 Telephone: 
 Telex: 
 Fax: 
  
 Account
for payments: 
  

 -93- 








 SCHEDULE 5 
  
 FORM OF COMPLIANCE CERTIFICATE

  
 Den norske Bank ASA 
 Stranden 21 
 N-0107 Oslo 
 Norway 
  
 Attention:[            ] 
  
 Date:                     
  
 Dear Sirs, 
  
 USD500,000,000 Reducing and Revolving Credit Loan Facility Agreement dated 10 May 2001 as amended and restated pursuant to a third supplemental agreement dated ·June 2003 
  
 This Certificate is delivered to you pursuant to Clause 10.2(C) of the above mentioned facility agreement (the “Facility Agreement”) made between (inter alias)
(1) our wholly owned subsidiary, Smedvig Rig AS, as Borrower and (2) yourselves as Facility Agent. Terms and expressions defined in the Facility Agreement will have the same meanings when used herein. 
  
 The undersigned is the Chief Financial Officer of the Guarantor and hereby certifies as
follows:- 
  

	1.	As at [            ], the Minimum Liquidity was
USD[            ] where:- 

  

	 	(A)	the Cash was USD[            ]; and 

  

	 	(B)	the value of the Marketable Securities was USD[            ]. 

  

	2.	As at [            ], the Cash held by the Guarantor was
USD[            ], by the Borrower was USD[            ] and the Cash held by other Group Members was
USD[            ], held as follows:- 

  
 [insert details of amount held by each relevant Group Member and stating on what basis it is or would be payable to the Borrower as
required by the definition of “Cash”] 
  

	3.	As at [ ], the value of the Norwegian Marketable Securities of the Smedvig Group was USD[ ]. 

  

	4.	As at [            ], the ratio of (i) EBITDA to Interest Expense was
[            ]:1 and (ii) Net Funded Debt to EBITDA was [            ]: 1 where:- 

  

	 	(A)	EBITDA at such date was USD[            ]; 

  

 -94- 









	 	(B)	Interest Expense at such date was USD[             ]; and 

  

	 	(C)	Net Funded Debt at such date was USD[            ]. 

  

	5.	As at [            ], the Total Value Adjusted Assets/Total Liability ratio was:
[            ] and the Total Liabilities were [            ]. 

  

	6.	During the period from [            ] to [            ] no
Encumbrances were created or assets disposed of in breach of Clause 11.2 (Negative Pledge) of the Facility Agreement. 

  

	7.	As at [            ], the followings Units were owned by Group Members, their owners and estimated market values being as
follows:- 

  

					
	 Name

	 	 Owner

	 	 Estimated Market Value


	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

  

	8.	We attach hereto copies of written valuations dated as at [ ] from [ ] in respect of the Units referred to in paragraph 7 above. 

  

	9.	During the period from [            ] to [            ]
[there has been no change in the corporate structure of the Smedvig Group]. 

 [or, if there has been a change, specify
details and attach revised corporate structure diagram] 
  
 Yours
faithfully, 
  
 Chief Financial Officer 
 SMEDVIG ASA 
  

 -95- 








  
 SCHEDULE 6

  
 EXISTING
ENCUMBRANCES 
  
 A loan of originally
{Confidential Material}* remains outstanding as at the date of execution of a third supplemental agreement to this Agreement, made available to Varia Perdana Sdn. Bhd., Malaysia by Banque Nationale de Paris pursuant to a loan agreement dated
28 September 1994 as later amended, secured by a bank guarantee issued by Nordea Bank Finland plc pursuant to a guarantee facility agreement dated 28 September 1994 as later amended. The said bank guarantee is secured by (i) a first priority
Panamanian mortgage of the rigs “T-2”,“T-3” and “T-6” dated 30 September 1994 as later amended, (ii) a pledge of all the shares of Varia Perdana Sdn. Bhd. and (iii) pro rata guarantees from Varia Perdana Sdn.
Bhd.’s shareholders. The Guarantor owns indirectly 49% of the shares of Varia Perdana Sdn. Bhd. and has thus issued a counter guarantee of 49% of the said bank guarantee facility. 


	*	The confidential portion of this section of the agreement has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential
treatment. 

  

 -96- 








 SCHEDULE 7 
  
 CORPORATE STRUCTURE DIAGRAM OF THE
SMEDVIG GROUP 
  
 See following page 
  

 -97- 








 SCHEDULE 8 
  
 REDUCTIONS OF COMMITMENTS 
  

	1.	Unless otherwise reduced further in accordance with the provisions of this Agreement, the Borrower shall repay Advances and/or Available Commitments shall be automatically reduced
such that the Commitments are reduced on each Reduction Date as set out below, by an amount equal to the amount set out below: 

  

					
	 Reduction Date

	  	Amount (USD)


	 1st
	 	15 July 2003	  	0
	 2nd
	 	15 October 2003	  	0
	 3rd
	 	15 January 2004	  	0
	 4th
	 	15 April 2004	  	0
	 5th
	 	15 July 2004	  	10
	 6th
	 	15 October 2004	  	10
	 7th
	 	15 January 2005	  	10
	 8th
	 	15 April 2005	  	10
	 9th
	 	15 July 2005	  	10
	 10th
	 	15 October 2005	  	10
	 11th
	 	15 January 2006	  	10
	 12th
	 	15 April 2006	  	10
	 13th
	 	15 July 2006	  	20
	 14th
	 	15 October 2006	  	20
	 15th
	 	15 January 2007	  	20
	 16th
	 	15 April 2007	  	20
	 17th
	 	15 July 2007	  	20
	 18th
	 	15 October 2007	  	20
	 19th
	 	15 January 2008	  	20
	 20th
	 	15 April 2008	  	20

  

	2.	On the Termination Date (without prejudice to any other provision of this Agreement), the Commitments shall be reduced to zero. 

  

	3.	If the Commitments of all of the Lenders are reduced pursuant to any other provision of this Agreement, the Commitments shall be reduced by the amount required by such other
provision and each of the amounts by which the aggregate of the Commitments of all the Lenders (after such reduction) are subsequently to be reduced pursuant to this Schedule on Reduction Dates falling on or after the date of such reduction shall be
reduced by the same proportion as that by which the amount of the aggregate of the Commitments of the Lenders are so reduced. 

  

	4.	If the Commitment of a Lender is reduced to zero pursuant to Clauses 5.4 (Additional partial cancellation) or 7.1 (Illegality), the amounts by which the aggregate of the Commitments
of the other Lenders are to be reduced pursuant to this Schedule 8 on 

  

 -98- 








 Reduction Dates falling on or after the date of the reduction to zero of such Lender’s Commitment
shall be reduced by the same proportion which (immediately prior to its reduction to zero) the Commitment of such Lender bore to the aggregate of the Commitments of all of the Lenders (including such Lender). 
  

 -99- 








 SCHEDULE 9 
  
 THE SECURED ASSETS 
  

	1.	The Secured Units 

  

			
	 (A)
	 	West Alliance, registered in Panama, Provisional Patente 29946-PEXT
	 (B)
	 	Robray T-4 registered in Panama, Provisional Patente 11005-81-E
	 (C)
	 	Robray T-7 registered in Panama, Provisional Patente 13273-83-D
	 (D)
	 	Smedvig T-8 registered in Panama, Provisional Patente 12882-83-CH
	 (E)
	 	West Pelaut registered in Panama, Provisional Patente 21455-94-A
	 (F)
	 	West Menang, registered in Panama, Provisional Patente 28020-PEXT
	 (G)
	 	West Epsilon, registered in Panama, Provisional Patente
	 (H)
	 	West Venture, registered in Norway, IMO Number 8764365

  

	2.	The Relevant Companies and Relevant Portion 

  

						
	 (A)
	 	Smedvig Rig AS	 	100	%
	 (B)
	 	Smedvig T-4 AS	 	100	%
	 (C)
	 	Smedvig T-7 AS	 	100	%
	 (D)
	 	Smedvig T-8 AS	 	100	%
	 (E)
	 	West Pelaut AS	 	100	%
	 (F)
	 	West Menang AS	 	100	%
	 (G)
	 	Smedvig Asia Ltd	 	100	%
	 (H)
	 	Partrederiet West Navigator DA	 	50	%
	 (I)
	 	Smedvig Offshore AS	 	100	%
	 (J)
	 	AS Smedvig Prodrill	 	100	%
	 (K)
	 	West Alliance AS	 	100	%

  

	3.	West Alpha Agreements and Securities 

  

	 	 ̈	First Priority Assignment of all the Guarantor’s rights, title and interest in and the benefit of all security which the Guarantor has taken over and in respect of “West
Alpha” in its capacity as lender to K/S West Alpha. 

  

 -100- 








 EXECUTION PAGE 
  
 IN WITNESS WHEREOF the parties hereto have
caused this Agreement to be duly executed on the day first written above. 
  

 -101-