Document:

exv10w2

 

Exhibit 10.2

REGISTRATION RIGHTS AGREEMENT

     This REGISTRATION RIGHTS AGREEMENT dated July 5, 2006 (the “Agreement”) is entered into by and
among Nortel Networks Limited, a Canadian corporation (the “Company”), Nortel Networks Corporation,
a Canadian corporation (“NNC”) and Nortel Networks Inc., a Delaware corporation (“NNI” and,
together with NNC, the “Guarantors”), [                              ] (“[                    ]”)
and the several Initial Purchasers listed in Schedule 1 hereto (together with [                    ], the “Initial Purchasers”).

     The Company, the Guarantors and the Initial Purchasers are parties to the Purchase Agreement
dated June 29, 2006 (the “Purchase Agreement”), which provides for the sale by the Company to the
Initial Purchasers of U.S.$450,000,000 aggregate principal amount of its 10.750% Senior Notes due
2016 (the “2016 Fixed Rate Notes”), U.S.$550,000,000 aggregate principal amount of its 10.125%
Senior Notes due 2013 (the “2013 Fixed Rate Notes” and, together with the 2016 Fixed Rate Notes,
the “Fixed Rate Notes”) and U.S.$1,000,000,000 aggregate principal amount of its Floating Rate
Senior Notes due 2011 (the “Floating Rate Notes” and together with the Fixed Rate Notes, the
“Securities”) which will, in each case, be guaranteed on an unsecured senior basis by NNC and,
initially, NNI. As an inducement to the Initial Purchasers to enter into the Purchase Agreement,
the Company and the Guarantors have agreed to provide to the Initial Purchasers and their direct
and indirect transferees the registration rights set forth in this Agreement. The execution and
delivery of this Agreement is a condition to the closing under the Purchase Agreement.

     In consideration of the foregoing, the parties hereto agree as follows:

     1.     Definitions. As used in this Agreement, the following terms shall have the
following meanings:

     “Business Day” shall mean any day that is not a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to remain closed.

     “Closing Date” shall mean the Closing Date as defined in the Purchase Agreement.

     “Company” shall have the meaning set forth in the preamble and shall also include the
Company’s successors.

     “Exchange Act” shall mean the United States Securities Exchange Act of 1934, as amended from
time to time.

     “Exchange Dates” shall have the meaning set forth in Section 2(a)(ii) hereof.

     “Exchange Offer” shall mean the exchange offer by the Company and the Guarantors of Exchange
Securities for Registrable Securities pursuant to Section 2(a) hereof.

     “Exchange Offer Registration” shall mean a registration under the Securities Act effected
pursuant to Section 2(a) hereof.

     “Exchange Offer Registration Statement” shall mean an exchange offer registration statement on
Form S-4 (or, if applicable, on another appropriate form) and all amendments and supplements to
such registration statement, in each case including the Prospectus contained therein or deemed a
part thereof, all exhibits thereto and any document incorporated by reference therein.

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     “Exchange Securities” shall mean senior notes issued by the Company and guaranteed by the
Guarantors under the Indenture evidencing the same continuing indebtedness as, and containing terms
substantially identical to, the Securities (except that the Exchange Securities will not be subject
to restrictions on transfer or to any increase in annual interest rate for failure to comply with
this Agreement) and to be offered to Holders of Securities in exchange for Securities pursuant to
the Exchange Offer.

     “Free Writing Prospectus” shall mean any free writing prospectus (as defined in Rule 405 under
the Securities Act) prepared by or on behalf of the Company or used or referred to by the Company
in connection with the Exchange Offer or the Shelf Registration.

     “Guarantors” shall have the meaning set forth in the preamble and shall also include any
Guarantor’s successors.

     “Holders” shall mean the Initial Purchasers, for so long as they own any Registrable
Securities, and each of their successors, assigns and direct and indirect transferees who become
owners of Registrable Securities under the Indenture; provided that for purposes of Sections 4 and
5 of this Agreement, the term “Holders” shall include Participating Broker-Dealers.

     “Indemnified Person” shall have the meaning set forth in Section 5(c) hereof.

     “Indemnifying Person” shall have the meaning set forth in Section 5(c) hereof.

     “Indenture” shall mean the Indenture relating to the Securities dated as of July 5, 2006 among
the Company, the Guarantors and The Bank of New York, as trustee, and as the same may be amended
from time to time in accordance with the terms thereof.

     “Initial Purchasers” shall have the meaning set forth in the preamble.

     “Inspector” shall have the meaning set forth in Section 3(a)(xiv) hereof.

     “Issuer Information” shall have the meaning set forth in Section 5(a) hereof.

     "[                    ]” shall have the meaning set forth in the preamble.

     “Majority Holders” shall mean the Holders of a majority of the aggregate principal amount of
the outstanding Registrable Securities; provided that whenever the consent or approval of Holders
of a specified percentage of Registrable Securities is required hereunder, any Registrable
Securities owned directly or indirectly by the Company or any of its affiliates shall not be
counted in determining whether such consent or approval was given by the Holders of such required
percentage or amount; and provided, further, that if the Company shall issue any additional
Securities under the Indenture prior to consummation of the Exchange Offer or, if applicable, the
effectiveness of any Shelf Registration Statement, such additional Securities and the Registrable
Securities to which this Agreement relates shall be treated together as one class for purposes of
determining whether the consent or approval of Holders of a specified percentage of Registrable
Securities has been obtained.

     “Participating Broker-Dealers” shall have the meaning set forth in Section 4(a) hereof.

     “Person” shall mean an individual, partnership, limited liability company, corporation, trust
or unincorporated organization, or a government or agency or political subdivision thereof.

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     “Prospectus” shall mean the prospectus included in a Registration Statement, including any
preliminary prospectus, and any such prospectus as amended or supplemented by any prospectus
supplement, including a prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Securities covered by a Shelf Registration Statement, and by all other
amendments and supplements to such prospectus, and in each case including any document incorporated
by reference therein.

     “Purchase Agreement” shall have the meaning set forth in the preamble.

     “Registrable Securities” shall mean the Securities; provided that the Securities shall cease
to be Registrable Securities (i) when a Registration Statement with respect to such Securities has
become effective under the Securities Act and such Securities have been exchanged or disposed of
pursuant to such Registration Statement, (ii) when such Securities are eligible to be sold pursuant
to Rule 144(k) (or any similar provision then in force, but not Rule 144A) under the Securities Act
or (iii) when such Securities cease to be outstanding.

     “Registration Expenses” shall mean any and all expenses incident to performance of or
compliance by the Company and the Guarantors with this Agreement, including without limitation: (i)
all SEC, stock exchange or National Association of Securities Dealers, Inc. registration and filing
fees, (ii) all reasonable fees and expenses incurred in connection with compliance with state
securities or blue sky laws (including reasonable fees and disbursements of one counsel for any
Underwriters or one counsel for the Holders (which counsel shall be selected by the Majority
Holders and which counsel may also be counsel for the Initial Purchasers) in connection with blue
sky qualification of any Exchange Securities or Registrable Securities), (iii) all expenses of any
Persons in preparing or assisting in preparing, word processing, printing and distributing any
Registration Statement, any Prospectus, any Free Writing Prospectus and any amendments or
supplements thereto, any underwriting agreements, securities sales agreements or other similar
agreements and any other documents relating to the performance of and compliance with this
Agreement, (iv) any fees charged by rating agencies for rating the Exchange Securities or
Registrable Securities, (v) all fees and disbursements relating to the qualification of the
Indenture under applicable securities laws, (vi) the fees and expenses of the Trustee and any
paying agent (including related fees and expenses of any counsel to such parties), (vii) the fees
and disbursements of counsel for the Company and the Guarantors and, in the case of a Shelf
Registration Statement, the reasonable fees and disbursements of one counsel for the Holders (which
counsel shall be selected by the Majority Holders and which counsel may also be counsel for the
Initial Purchasers) and (viii) the fees and disbursements of the independent public accountants of
the Company and the Guarantors, including the expenses of any special audits or “comfort” letters
required by or incident to the performance of and compliance with this Agreement, but excluding
fees and expenses of counsel to the Underwriters (other than fees and expenses set forth in clause
(ii) above) or the Holders and underwriting discounts and commissions, brokerage commissions and
transfer taxes, if any, relating to the sale or disposition of Registrable Securities by a Holder.

     “Registration Statement” shall mean any registration statement of the Company and the
Guarantors that covers any of the Exchange Securities or Registrable Securities pursuant to the
provisions of this Agreement and all amendments and supplements to any such registration statement,
including post-effective amendments, in each case including the Prospectus contained therein or
deemed a part thereof, all exhibits thereto and any document incorporated by reference therein.

     “SEC” shall mean the United States Securities and Exchange Commission.

     “Securities” shall have the meaning set forth in the preamble.

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     “Securities Act” shall mean the United States Securities Act of 1933, as amended from time to
time.

     “Shelf Effectiveness Period” shall have the meaning set forth in Section 2(b) hereof.

     “Shelf Registration” shall mean a registration effected pursuant to Section 2(b) hereof.

     “Shelf Registration Statement” shall mean a “shelf” registration statement of the Company and
the Guarantors that covers all or a portion of the Registrable Securities (but no other securities
unless approved by a majority of the Holders whose Registrable Securities are to be covered by such
Shelf Registration Statement) on an appropriate form under Rule 415 under the Securities Act, or
any similar rule that may be adopted by the SEC, and all amendments and supplements to such
registration statement, including post-effective amendments, in each case including the Prospectus
contained therein or deemed a part thereof, all exhibits thereto and any document incorporated by
reference therein.

     “Shelf Request” shall have the meaning set forth in Section 2(b) hereof.

     “Staff” shall mean the staff of the SEC.

     “Trust Indenture Act” shall mean the United States Trust Indenture Act of 1939, as amended
from time to time.

     “Trustee” shall mean the trustee with respect to the Securities under the Indenture.

     “Underwriter” shall have the meaning set forth in Section 3(e) hereof.

     “Underwritten Offering” shall mean an offering in which Registrable Securities are sold to an
Underwriter for reoffering to the public.

     2.     Registration Under the Securities Act. (a)   To the extent not prohibited by any
applicable law or applicable interpretations of the Staff, the Company and the Guarantors shall use
their reasonable best efforts to (i) cause to be filed with the SEC an Exchange Offer Registration
Statement covering an offer to the Holders to exchange all the Registrable Securities for Exchange
Securities and (ii) have such Registration Statement remain effective until 180 days after the
closing of the Exchange Offer. The Company and the Guarantors shall commence the Exchange Offer
promptly after the Exchange Offer Registration Statement becomes effective and use their reasonable
best efforts to complete the Exchange Offer not later than 45 days after such effective date.

     The Company and the Guarantors shall commence the Exchange Offer by mailing the related
Prospectus, appropriate letters of transmittal and other accompanying documents to each Holder
stating, in addition to such other disclosures as are required by applicable law, substantially the
following:

     (i)   that the Exchange Offer is being made pursuant to this Agreement and that all
Registrable Securities validly tendered and not properly withdrawn will be accepted for
exchange;

     (ii)   the dates of acceptance for exchange (which shall be a period of at least 20
Business Days from the date such notice is mailed) (the “Exchange Dates”);

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     (iii)   that any Registrable Security not tendered will remain outstanding and continue
to accrue interest but will not retain any rights under this Agreement, except as otherwise
specified herein;

     (iv)   that any Holder electing to have a Registrable Security exchanged pursuant to the
Exchange Offer will be required to (A) surrender such Registrable Security, together with
the appropriate letters of transmittal, to the institution and at the address (located in
the Borough of Manhattan, The City of New York) and in the manner specified in the notice,
or (B) effect such exchange otherwise in compliance with the applicable procedures of the
depositary for such Registrable Security, in each case prior to the close of business on the
last Exchange Date; and

     (v)   that any Holder will be entitled to withdraw its election, not later than the close
of business on the last Exchange Date, by (A) sending to the institution and at the address
(located in the Borough of Manhattan, The City of New York) specified in the notice, a
telegram, telex, facsimile transmission or letter setting forth the name of such Holder, the
principal amount of Registrable Securities delivered for exchange and a statement that such
Holder is withdrawing its election to have such Securities exchanged or (B) effecting such
withdrawal in compliance with the applicable procedures of the depositary for the
Registrable Securities.

     As a condition to participating in the Exchange Offer, a Holder will be required to represent
to the Company and the Guarantors that (i) any Exchange Securities to be received by it will be
acquired in the ordinary course of its business, (ii) at the time of the commencement of the
Exchange Offer it has no arrangement or understanding with any Person to participate in the
distribution (within the meaning of the Securities Act) of the Exchange Securities in violation of
the provisions of the Securities Act, (iii) it is not an “affiliate” (within the meaning of Rule
405 under the Securities Act) of the Company or any Guarantor, (iv) if such Holder is a
broker-dealer that will receive Exchange Securities for its own account in exchange for Registrable
Securities that were acquired as a result of market-making or other trading activities, then such
Holder will deliver a Prospectus (or, to the extent permitted by law, otherwise make a Prospectus
available) in connection with any resale of such Exchange Securities, and (v) it is not an Initial
Purchaser holding Registrable Securities that have, or are reasonably likely to have, the status of
an unsold allotment to an initial distribution.

     As soon as practicable after the last Exchange Date, the Company and the Guarantors shall:

     (i)   accept for exchange Registrable Securities or portions thereof validly tendered and
not properly withdrawn pursuant to the Exchange Offer; and

     (ii)   deliver, or cause to be delivered, to the Trustee for cancellation all Registrable
Securities or portions thereof so accepted for exchange by the Company and issue, and cause
the Trustee to promptly authenticate and deliver to each Holder, Exchange Securities which
shall evidence the same continuing indebtedness and be equal in principal amount to the
principal amount of the Registrable Securities surrendered by such Holder.

     (iii)   The Company and the Guarantors shall use their reasonable best efforts to
complete the Exchange Offer as provided above and shall comply with the applicable
requirements of the Securities Act, the Exchange Act and other applicable laws and
regulations in connection with the Exchange Offer. The Exchange Offer shall not be subject
to any conditions, other than that the Exchange Offer does not violate any applicable law,
regulation, rule or applicable interpretations of the Staff.

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     (b)   In the event that (i) the Company and the Guarantors determine that the Exchange Offer
Registration provided for in Section 2(a) above is not available or may not be completed as soon as
practicable after the last Exchange Date because it would violate any applicable law, regulation,
rule or applicable interpretations of the Staff, (ii) the Exchange Offer is not for any other
reason completed by February 19, 2008 or (iii) any Initial Purchaser shall so request (a “Shelf
Request”) in connection with any offer or sale of Registrable Securities that are or were
ineligible to be exchanged in the Exchange Offer if, in the opinion of counsel for the Initial
Purchasers, a registration statement must be filed and a prospectus must be delivered or otherwise
made available in connection with such offer or sale, the Company and the Guarantors shall use
their reasonable best efforts to cause to be filed as soon as practicable after such determination,
date or request, as the case may be, a Shelf Registration Statement providing for the sale of all
the Registrable Securities by the Holders thereof and to have such Shelf Registration Statement
become effective; provided that in no event shall the Company and the Guarantors have any
obligation to file such Shelf Registration Statement at any time prior to October 5, 2007 unless it
shall have filed an Exchange Offer Registration Statement prior to such date.

     In the event that the Company and the Guarantors are required to file a Shelf Registration
Statement pursuant to clause (iii) of the preceding sentence, the Company and the Guarantors shall
use their reasonable best efforts to file and have become effective both an Exchange Offer
Registration Statement pursuant to Section 2(a) with respect to all Registrable Securities and a
Shelf Registration Statement (which may be a combined Registration Statement with the Exchange
Offer Registration Statement) with respect to offers and sales of Registrable Securities held by
the Initial Purchasers after completion of the Exchange Offer.

     The Company and the Guarantors agree to use their reasonable best efforts to keep the Shelf
Registration Statement continuously effective until the expiration of the period referred to in
Rule 144(k) (or any similar rule then in force, but not Rule 144A) under the Securities Act with
respect to the Registrable Securities or such shorter period that will terminate when all the
Registrable Securities covered by the Shelf Registration Statement have been sold pursuant to the
Shelf Registration Statement (the “Shelf Effectiveness Period”). The Company and the Guarantors
further agree to supplement or amend the Shelf Registration Statement, the related Prospectus and
any Free Writing Prospectus if required by the rules, regulations or instructions applicable to the
registration form used by the Company for such Shelf Registration Statement or by the Securities
Act or by any other rules and regulations thereunder for shelf registration or if reasonably
requested by a Holder of Registrable Securities with respect to information relating to such
Holder, and to use their reasonable best efforts to cause any such amendment to become effective,
if required, and such Shelf Registration Statement, Prospectus or Free Writing Prospectus, as the
case may be, to become usable as soon as thereafter practicable. The Company and the Guarantors
agree to furnish to the Holders of Registrable Securities copies of any such supplement or
amendment promptly after its being used or filed with the SEC.

     (c)   The Company and the Guarantors shall pay all Registration Expenses in connection with any
registration pursuant to Section 2(a) or Section 2(b) hereof. Each Holder shall pay all
underwriting discounts and commissions, brokerage commissions and transfer taxes, if any, relating
to the sale or disposition of such Holder’s Registrable Securities pursuant to the Shelf
Registration Statement.

     (d)   An Exchange Offer Registration Statement pursuant to Section 2(a) hereof will not be
deemed to have become effective unless it has been declared effective by the SEC. A Shelf
Registration Statement pursuant to Section 2(b) hereof will not be deemed to have become effective
unless it has been declared effective by the SEC or is automatically effective upon filing with the
SEC pursuant to Rule 462 under the Securities Act.

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     In the event that (i) the Exchange Offer Registration Statement is not filed with the SEC on
or prior to October 5, 2007, (ii) the Exchange Offer Registration Statement does not become
effective on or prior to January 5, 2008, (iii) the Exchange Offer is not completed within 45 days
after the date on which the Exchange Offer Registration Statement becomes effective, (iv) a Shelf
Registration Statement is required in accordance with Section 2(b) but does not become effective on
or prior to February 19, 2008, or (v) the Shelf Registration Statement is declared effective but
ceases to be effective or the Prospectus contained therein ceases to be usable at any time during
the Shelf Effectiveness Period, and such failure to remain effective or usable exists for more than
45 days (whether or not consecutive) in any 12-month period (any event referred to in the foregoing
clauses (i) through (v) a “Registration Default”), then, in each case, the interest rate on the
Registrable Securities will be increased by (i) 0.25% per annum for the first 90-day period
immediately following such Registration Default and (ii) an additional 0.25% per annum with respect
to each subsequent 90-day period, in each case until the earlier of the date such Registration
Default is cured or the date such Registrable Securities becomes freely tradable under the
Securities Act, up to a maximum of 1.00% per annum of additional interest.

     (e)   Without limiting the remedies available to the Initial Purchasers and the Holders, the
Company and the Guarantors acknowledge that any failure by the Company or the Guarantors to comply
with their obligations under Section 2(a) and Section 2(b) hereof may result in material
irreparable injury to the Initial Purchasers or the Holders for which there is no adequate remedy
at law, that it will not be possible to measure damages for such injuries precisely and that, in
the event of any such failure, the Initial Purchasers or any Holder may obtain such relief as may
be required to specifically enforce the Company’s and the Guarantors’ obligations under Section
2(a) and Section 2(b) hereof.

     (f)   The Company represents, warrants, and covenants that it (including its agents and
representatives, other than the Initial Purchasers in their capacity as such) will not make any
offer to buy the Securities or the Exchange Securities, other than by way of a Prospectus,
Registration Statement, Shelf Registration Statement, or any Free Writing Prospectus or Issuer
Information used or referred to by the Company in connection with the Exchange Offer or Shelf
Registration Statement.

     3.     Registration Procedures. (a)   In connection with their obligations pursuant to
Section 2(a) and Section 2(b) hereof, the Company and the Guarantors shall as expeditiously as
possible:

     (i)   prepare and file with the SEC a Registration Statement on the appropriate form
under the Securities Act, which form (x) shall be selected by the Company and the
Guarantors, (y) shall, in the case of a Shelf Registration, be available for the sale of the
Registrable Securities by the Holders thereof and (z) shall comply as to form in all
material respects with the requirements of the applicable form and include all financial
statements required by the SEC to be filed therewith; and use their reasonable best efforts
to cause such Registration Statement to become effective and remain effective for the
applicable period in accordance with Section 2 hereof;

     (ii)   prepare and file with the SEC such amendments and post-effective amendments to
each Registration Statement as may be necessary to keep such Registration Statement
effective for the applicable period in accordance with Section 2 hereof and cause each
Prospectus to be supplemented by any required prospectus supplement and, as so supplemented,
to be filed pursuant to Rule 424 under the Securities Act; and keep each Prospectus current
during the period described in Section 4(3) of and Rule 174 under the Securities Act that is
applicable to transactions by brokers or dealers with respect to the Registrable Securities
or Exchange Securities;

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     (iii)   to the extent any Free Writing Prospectus is used, file with the SEC any Free
Writing Prospectus that is required to be filed by the Company or the Guarantors with the
SEC in accordance with the Securities Act and to retain any Free Writing Prospectus not
required to be filed;

     (iv)   in the case of a Shelf Registration, furnish to each Holder of Registrable
Securities, to counsel for the Initial Purchasers and to each Underwriter of an Underwritten
Offering of Registrable Securities, if any, without charge, as many copies of each
Prospectus, including each preliminary Prospectus or Free Writing Prospectus, and any
amendment or supplement thereto, in order to facilitate the sale or other disposition of the
Registrable Securities thereunder; and the Company and the Guarantors consent to the use of
such Prospectus, preliminary Prospectus or such Free Writing Prospectus and any amendment or
supplement thereto in accordance with applicable law by each of the Holders of Registrable
Securities and any such Underwriters in connection with the offering and sale of the
Registrable Securities covered by and in the manner described in such Prospectus,
preliminary Prospectus or such Free Writing Prospectus or any amendment or supplement
thereto in accordance with applicable law;

     (v)   use their reasonable best efforts to register or qualify as soon as practicable the
Registrable Securities under all applicable state securities or blue sky laws of such
jurisdictions as any Holder of Registrable Securities covered by a Registration Statement
shall reasonably request in writing by the time the applicable Registration Statement
becomes effective; cooperate with such Holders in connection with any filings required to be
made with the National Association of Securities Dealers, Inc.; and do any and all other
acts and things that may be reasonably necessary or advisable to enable each Holder to
complete the disposition in each such jurisdiction of the Registrable Securities owned by
such Holder; provided that neither the Company nor any Guarantor shall be required
to (1) qualify as a foreign corporation or other entity or as a dealer in securities in any
such jurisdiction where it would not otherwise be required to so qualify, (2) file any
general consent to service of process in any such jurisdiction or (3) subject itself to
taxation in any such jurisdiction if it is not so subject;

     (vi)   in the case of a Shelf Registration, notify each Holder of Registrable Securities
and one counsel (plus one Canadian counsel) for the Initial Purchasers promptly and, if
requested by any such Holder or counsel, confirm such advice in writing (1) when a
Registration Statement has become effective and when any post-effective amendment thereto
has been filed and becomes effective, when any Free Writing Prospectus has been filed or any
amendment or supplement to the Prospectus or any Free Writing Prospectus has been filed, (2)
of any request by the SEC or any state securities authority for amendments and supplements
to a Registration Statement, Prospectus or any Free Writing Prospectus for additional
information after the Registration Statement has become effective, (3) of the issuance by
the SEC or any state securities authority of any stop order suspending the effectiveness of
a Registration Statement or the initiation of any proceedings for that purpose, including
the receipt by the Company of any notice of objection of the SEC to the use of a Shelf
Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2)
under the Securities Act, (4) if, between the applicable effective date of a Shelf
Registration Statement and the closing of any sale of Registrable Securities covered
thereby, the representations and warranties of the Company or any Guarantor contained in any
underwriting

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agreement, securities sales agreement or other similar agreement, if any, relating to an
offering of such Registrable Securities cease to be true and correct in all material
respects or if the Company or any Guarantor receives any notification with respect to the
suspension of the qualification of the Registrable Securities for sale in any jurisdiction
or the initiation of any proceeding for such purpose, (5) of the happening of any event
during the period a Shelf Registration Statement is effective that makes any statement made
in such Shelf Registration Statement or the related Prospectus or any Free Writing
Prospectus untrue in any material respect or that requires the making of any changes in such
Shelf Registration Statement or Prospectus or any Free Writing Prospectus in order to make
the statements therein not misleading and (6) of any determination by the Company or any
Guarantor that a post-effective amendment to a Registration Statement or any amendment or
supplement to the Prospectus or any Free Writing Prospectus would be appropriate;

     (vii)   use their reasonable best efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement or, in the case of a Shelf
Registration, the resolution of any objection of the SEC pursuant to Rule 401(g)(2),
including by filing an amendment to such Shelf Registration Statement on the proper form, at
the earliest possible moment and provide immediate notice to each Holder of the withdrawal
of any such order or such resolution;

     (viii)   in the case of a Shelf Registration, furnish to each Holder of Registrable
Securities included in such Shelf Registration Statement, without charge, at least one
conformed copy of each Registration Statement and any post-effective amendment thereto
(without any documents incorporated therein by reference or exhibits thereto, unless
requested);

     (ix)   in the case of a Shelf Registration, cooperate with the Holders of Registrable
Securities to facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any restrictive legends and enable such
Registrable Securities to be issued in such denominations and registered in such names
(consistent with the provisions of the Indenture) as such Holders may reasonably request at
least one Business Day prior to the closing of any sale of Registrable Securities;

     (x)   in the case of a Shelf Registration, upon the occurrence of any event contemplated
by Section 3(a)(vi)(5) hereof, use their reasonable best efforts to prepare and file with
the SEC a supplement or post-effective amendment to such Shelf Registration Statement or the
related Prospectus or any Free Writing Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter delivered (or, to the
extent permitted by law, made available) to purchasers of the Registrable Securities, such
Prospectus or Free Writing Prospectus, as the case may be, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were made, not
misleading; and the Company and the Guarantors shall notify the Holders of Registrable
Securities to suspend use of the Prospectus or any Free Writing Prospectus, as the case may
be, as promptly as practicable after the occurrence of such an event, and such Holders
hereby agree to suspend use of the Prospectus or any Free Writing Prospectus, as the case
may be, until the Company and the Guarantors have amended or supplemented the Prospectus or
any Free Writing Prospectus, as the case may be, to correct such misstatement or omission;

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     (xi)   a reasonable time prior to the filing of any Registration Statement, any
Prospectus, any Free Writing Prospectus, any amendment to a Registration Statement or
amendment or supplement to a Prospectus or to a Free Writing Prospectus, provide copies of
such document to the Initial Purchasers and their counsel (and, in the case of a Shelf
Registration Statement, to the Holders of Registrable Securities included in such Shelf
Registration Statement); and the Company and the Guarantors shall not, at any time after
initial filing of a Registration Statement until completion of the offering contemplated
thereby, use or file any Prospectus, any Free Writing Prospectus, any amendment of or
supplement to a Registration Statement, a Prospectus or a Free Writing Prospectus, of which
the Initial Purchasers and their counsel (and, in the case of a Shelf Registration
Statement, the Holders of Registrable Securities included in such Shelf Registration
Statement) shall not have previously been advised and furnished a copy or to which the
Initial Purchasers or their counsel shall reasonably object;

     (xii)   obtain a CUSIP number for all Exchange Securities or Registrable Securities, as
the case may be, not later than the initial effective date of a Registration Statement;

     (xiii)   cause the Indenture to be qualified under the Trust Indenture Act in connection
with the registration of the Exchange Securities or Registrable Securities, as the case may
be; cooperate with the Trustee and the Holders to effect such changes to the Indenture as
may be required for the Indenture to be so qualified in accordance with the terms of the
Trust Indenture Act; and execute, and use their reasonable best efforts to cause the Trustee
to execute, all documents as may be required to effect such changes and all other forms and
documents required to be filed with the SEC to enable the Indenture to be so qualified in a
timely manner;

     (xiv)   in the case of a Shelf Registration, make available for inspection by a
representative of the Holders of the Registrable Securities (an “Inspector”), any
Underwriter participating in any disposition pursuant to such Shelf Registration Statement
and one firm of accountants designated by a majority of the Holders of Registrable
Securities covered by such Shelf Registration and one counsel (plus one Canadian counsel)
and one firm of accountants designated by such Underwriter, at reasonable times and in a
reasonable manner, all pertinent financial and other records, documents and properties of
the Company and its subsidiaries and cause the respective officers, directors and employees
of the Company and the Guarantors to supply all information reasonably requested by any such
Inspector, Underwriter, counsel or accountant in connection with a Shelf Registration
Statement; provided that if any such information is identified by the Company or any
Guarantor as being confidential or proprietary, each Person receiving such information shall
take such actions as are reasonably necessary to protect the confidentiality of such
information to the extent such action is otherwise not inconsistent with, an impairment of
or in derogation of the rights and interests of any Inspector, Holder or Underwriter;

     (xv)   in the case of a Shelf Registration, use their reasonable best efforts to cause
all Registrable Securities to be listed on any securities exchange or any automated
quotation system on which similar securities issued or guaranteed by the Company or any
Guarantor are then listed if requested by the majority of the Holders whose Registrable
Securities are covered by such Shelf Registration Statement, to the extent such Registrable
Securities satisfy applicable listing requirements;

10

 

     (xvi)   if reasonably requested by any Holder of Registrable Securities covered by a
Shelf Registration Statement, promptly include in a Prospectus supplement or post-effective
amendment such information with respect to such Holder as such Holder reasonably requests to
be included therein and make all required filings of such Prospectus supplement or such
post-effective amendment as soon as practicable after the Company has received notification
of the matters to be so included in such filing; and

     (xvii)   in the case of a Shelf Registration, enter into such customary agreements and
take all such other actions in connection therewith (including those requested by the
Holders of a majority in principal amount of the Registrable Securities covered by the Shelf
Registration Statement) in order to expedite or facilitate the disposition of such
Registrable Securities including, but not limited to, an Underwritten Offering and in such
connection, (1) to the extent possible, make such representations and warranties to the
Holders and any Underwriters of such Registrable Securities with respect to the business of
the Company and its subsidiaries and the Registration Statement, Prospectus, any Free
Writing Prospectus and documents incorporated by reference or deemed incorporated by
reference, if any, in each case, in form, substance and scope as are customarily made by
issuers to underwriters in underwritten offerings and confirm the same if and when
requested, (2) obtain opinions of counsel to the Company and the Guarantors (which counsel
and opinions, in form, scope and substance, shall be reasonably satisfactory to the Holders
of a majority in principal amount of the Registrable Securities being sold and such
Underwriters and their respective counsel) addressed to each selling Holder and Underwriter
of Registrable Securities, covering the matters customarily covered in opinions requested in
underwritten offerings, (3) obtain “comfort” letters from the independent certified public
accountants of the Company and the Guarantors (and, if necessary, any other certified public
accountant of any subsidiary of the Company or any Guarantor, or of any business acquired by
the Company or any Guarantor for which financial statements and financial data are or are
required to be included in the Registration Statement) addressed to each selling Holder (to
the extent permitted by applicable professional standards) and Underwriter of Registrable
Securities, such letters to be in customary form and covering matters of the type
customarily covered in “comfort” letters in connection with underwritten offerings,
including but not limited to financial information contained in any preliminary Prospectus,
Prospectus or Free Writing Prospectus and (4) deliver such documents and certificates as may
be reasonably requested by the Holders of a majority in principal amount of the Registrable
Securities being sold or the Underwriters, and which are customarily delivered in
underwritten offerings, to evidence the continued validity of the representations and
warranties of the Company and the Guarantors made pursuant to clause (1) above and to
evidence compliance with any customary conditions contained in an underwriting agreement.

     (b)   In the case of a Shelf Registration Statement, the Company may require each Holder of
Registrable Securities to furnish to the Company such information regarding such Holder and the
proposed disposition by such Holder of such Registrable Securities as the Company and the
Guarantors may from time to time reasonably request in writing, and the Company and the Guarantors
may exclude from such registration the Registrable Securities of any Holder that fails to furnish
such information within a reasonable time after receiving such request.

     (c)   In the case of a Shelf Registration Statement, each Holder of Registrable Securities
covered in such Shelf Registration Statement agrees that, upon receipt of any notice from the
Company and the Guarantors of the happening of any event of the kind described in Section
3(a)(vi)(2) through 3(a)(vi)(6) hereof, such Holder will forthwith discontinue disposition of
Registrable Securities pursuant to the Shelf Registration Statement until such Holder’s receipt of
the copies of the supplemented or amended Prospectus and any Free Writing Prospectus contemplated
by Section 3(a)(x) hereof and, if so directed by

11

 

the Company and the Guarantors, such Holder will deliver to the Company and the Guarantors all
copies in its possession, other than permanent file copies then in such Holder’s possession, of the
Prospectus and any Free Writing Prospectus covering such Registrable Securities that is current at
the time of receipt of such notice.

     (d)   If the Company and the Guarantors shall give any notice pursuant to Section 3(a)(vi)(3),
3(a)(vi)(5) or 3(c) hereof to suspend the disposition of Registrable Securities pursuant to a Shelf
Registration Statement, the Company and the Guarantors shall extend the period during which such
Shelf Registration Statement shall be maintained effective pursuant to this Agreement by the number
of days during the period from and including the date of the giving of such notice to and including
the date when the Holders of such Registrable Securities shall have received copies of the
supplemented or amended Prospectus or any Free Writing Prospectus necessary to resume such
dispositions or shall have been advised in writing by the Company and the Guarantors that such
dispositions may be resumed. The Company and the Guarantors may give any such notice only twice
during any 365-day period and any such suspensions shall not exceed 45 days for each suspension and
there shall not be more than two suspensions in effect during any 365-day period.

     (e)   The Holders of Registrable Securities covered by a Shelf Registration Statement who desire
to do so may sell such Registrable Securities in an Underwritten Offering. In any such
Underwritten Offering, the investment bank or investment banks and manager or managers (each an
“Underwriter”) that will administer the offering will be selected by the Holders of a majority in
principal amount of the Registrable Securities included in such offering.

     4.     Participation of Broker-Dealers in Exchange Offer. (a)   The Staff has taken the
position that any broker-dealer that receives Exchange Securities for its own account in the
Exchange Offer in exchange for Securities that were acquired by such broker-dealer as a result of
market-making or other trading activities (a “Participating Broker-Dealer”) may be deemed to be an
“underwriter” within the meaning of the Securities Act and must deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of such Exchange Securities.

     The Company and the Guarantors understand that it is the Staff’s position that if the
Prospectus contained in the Exchange Offer Registration Statement includes a plan of distribution
containing a statement to the above effect and the means by which Participating Broker-Dealers may
resell the Exchange Securities, without naming the Participating Broker-Dealers or specifying the
amount of Exchange Securities owned by them, such Prospectus may be delivered by Participating
Broker-Dealers (or, to the extent permitted by law, made available to purchasers) to satisfy their
prospectus delivery obligation under the Securities Act in connection with resales of Exchange
Securities for their own accounts, so long as the Prospectus otherwise meets the requirements of
the Securities Act.

     (b)   In light of the above, and notwithstanding the other provisions of this Agreement, the
Company and the Guarantors agree to amend or supplement the Prospectus contained in the Exchange
Offer Registration Statement for a period of up to 180 days after the last Exchange Date (as such
period may be extended pursuant to Section 3(d) of this Agreement), if requested by the Initial
Purchasers or by one or more Participating Broker-Dealers, in order to expedite or facilitate the
disposition of any Exchange Securities by Participating Broker-Dealers consistent with the
positions of the Staff recited in Section 4(a) above. The Company and the Guarantors further agree
that Participating Broker-Dealers shall be authorized to deliver such Prospectus (or, to the extent
permitted by law, make available) during such period in connection with the resales contemplated by
this Section 4.

12

 

     5.     Indemnification and Contribution. (a)   The Company and each Guarantor, jointly and
severally, agree to indemnify and hold harmless each Initial Purchaser and each Holder, their
respective affiliates, directors and officers and each Person, if any, who controls any Initial
Purchaser or any Holder within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages and liabilities (including,
without limitation, legal fees and other expenses incurred in connection with any suit, action or
proceeding or any claim asserted, as such fees and expenses are incurred), that arise out of, or
are based upon, (1) any untrue statement or alleged untrue statement of a material fact contained
in any Registration Statement or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the statements therein not misleading,
or (2) any untrue statement or alleged untrue statement of a material fact contained in any
Prospectus, any Free Writing Prospectus used in violation of this Agreement or any “issuer
information” (“Issuer Information”) filed or required to be filed pursuant to Rule 433(d) under the
Securities Act, or any omission or alleged omission to state therein a material fact necessary in
order to make the statements therein, in the light of the circumstances under which they were made,
not misleading, in each case except insofar as such losses, claims, damages or liabilities arise
out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission
made in reliance upon and in conformity with any information relating to any Initial Purchaser or
information relating to any Holder furnished to the Company in writing through [                    ] or any selling Holder expressly for use therein. In connection with any Underwritten Offering
permitted by Section 3, the Company and the Guarantors, jointly and severally, will also indemnify
the Underwriters, if any, selling brokers, dealers and similar securities industry professionals
participating in the distribution, their respective affiliates and each Person who controls such
Persons (within the meaning of the Securities Act and the Exchange Act) to the same extent as
provided above with respect to the indemnification of the Holders, if requested in connection with
any Registration Statement, any Prospectus, any Free Writing Prospectus or any Issuer Information.

     (b)   Each Holder agrees, severally and not jointly, to indemnify and hold harmless each of the
Company, the Guarantors, the Initial Purchasers and the other selling Holders, the directors of the
Company and the Guarantors, each officer of the Company and the Guarantors who signed the
Registration Statement and each Person, if any, who controls the Company, the Guarantors, any
Initial Purchaser and any other selling Holder within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act to the same extent as the indemnity set forth in paragraph
(a) above, but only with respect to any losses, claims, damages or liabilities that arise out of,
or are based upon, any untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with any information relating to such Holder furnished to the
Company in writing by such Holder expressly for use in any Registration Statement, any Prospectus
and any Free Writing Prospectus.

     (c)   If any suit, action, proceeding (including any governmental or regulatory investigation),
claim or demand shall be brought or asserted against any Person in respect of which indemnification
may be sought pursuant to either paragraph (a) or (b) above, such Person (the “Indemnified Person”)
shall promptly notify the Person against whom such indemnification may be sought (the “Indemnifying
Person”) in writing; provided that the failure to notify the Indemnifying Person shall not
relieve it from any liability that it may have under this Section 5 except to the extent that it
has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such
failure; and provided, further, that the failure to notify the Indemnifying Person
shall not relieve it from any liability that it may have to an Indemnified Person otherwise than
under this Section 5. If any such proceeding shall be brought or asserted against an Indemnified
Person and it shall have notified the Indemnifying Person thereof, the Indemnifying Person shall
retain counsel reasonably satisfactory to the Indemnified Person (or if the Holders, to the
Majority Holders)

13

 

to represent the Indemnified Person and any others entitled to indemnification pursuant to this
Section 5 that the Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding, as incurred. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person
and the Indemnified Person shall have mutually agreed to the contrary; (ii) the Indemnifying Person
has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person; (iii) the named parties in any such proceeding (including any impleaded parties) include
both the Indemnifying Person and the Indemnified Person, and the Indemnified Person shall have
reasonably concluded that there may be legal defenses available to it that are different from or in
addition to those available to the Indemnifying Person (or if the Holders, to the Majority
Holders); or (iv) the named parties in any such proceeding (including any impleaded parties)
include both the Indemnifying Person and the Indemnified Person and representation of both parties
by the same counsel would be inappropriate due to actual or potential differing interests between
them. It is understood and agreed that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and
that all such fees and expenses shall be reimbursed as they are incurred. Any such separate firm
(x) for any Initial Purchaser, its affiliates, directors and officers and any control Persons of
such Initial Purchaser shall be designated in writing by [                    ], (y) for any
Holder, its directors and officers and any control Persons of such Holder shall be designated in
writing by the Majority Holders and (z) in all other cases shall be designated in writing by the
Company. The Indemnifying Person shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified Person from and against
any loss or liability by reason of such settlement or judgment. No Indemnifying Person shall,
without the written consent of the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could have been a party and
indemnification could have been sought hereunder by such Indemnified Person, unless such settlement
(A) includes an unconditional release of such Indemnified Person, in form and substance reasonably
satisfactory to such Indemnified Person, from all liability on claims that are the subject matter
of such proceeding and (B) does not include any statement as to or any admission of fault,
culpability or a failure to act by or on behalf of any Indemnified Person.

     (d)   If the indemnification provided for in paragraphs (a) and (b) above is unavailable to an
Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then each Indemnifying Person under such paragraph, in lieu of indemnifying
such Indemnified Person thereunder, shall contribute to the amount paid or payable by such
Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the Company and the
Guarantors from the offering of the Securities and the Exchange Securities, on the one hand, and by
the Holders from receiving Securities or Exchange Securities registered under the Securities Act,
on the other hand, or (ii) if the allocation provided by clause (i) is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative benefits referred to in
clause (i) but also the relative fault of the Company and the Guarantors on the one hand and the
Holders on the other in connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable considerations. The
relative fault of the Company and the Guarantors on the one hand and the Holders on the other shall
be determined by reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company and the Guarantors or by the Holders and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent such statement or
omission.

14

 

     (e)   The Company, the Guarantors and the Holders agree that it would not be just and equitable
if contribution pursuant to this Section 5 were determined by pro rata allocation
(even if the Holders were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred to in paragraph (d)
above. The amount paid or payable by an Indemnified Person as a result of the losses, claims,
damages and liabilities referred to in paragraph (d) above shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses incurred by such Indemnified Person in
connection with any such action or claim. Notwithstanding the provisions of this Section 5, in no
event shall a Holder be required to contribute any amount in excess of the amount by which the
total price at which the Securities or Exchange Securities sold by such Holder exceeds the amount
of any damages that such Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent misrepresentation. The Holders’
obligations to contribute pursuant to this Section 5 are several and not joint.

     (f)   The remedies provided for in this Section 5 are not exclusive and shall not limit any
rights or remedies that may otherwise be available to any Indemnified Person at law or in equity.

     (g)   The indemnity and contribution provisions contained in this Section 5 shall remain
operative and in full force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of the Initial Purchasers or any Holder or any Person
controlling any Initial Purchaser or any Holder, or by or on behalf of the Company or the
Guarantors or the officers or directors of or any Person controlling the Company or the Guarantors,
(iii) acceptance of any of the Exchange Securities and (iv) any sale of Registrable Securities
pursuant to a Shelf Registration Statement.

     6.     General.

     (a)   No Inconsistent Agreements. The Company and the Guarantors represent, warrant and agree
that (i) the rights granted to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of any other outstanding securities issued or
guaranteed by the Company or any Guarantor under any other agreement and (ii) neither the Company
nor any Guarantor has entered into, or on or after the date of this Agreement will enter into, any
agreement that is inconsistent with the rights granted to the Holders of Registrable Securities in
this Agreement or otherwise conflicts with the provisions hereof.

     (b)   Amendments and Waivers. The provisions of this Agreement, including the provisions of
this sentence, may not be amended, modified or supplemented, and waivers or consents to departures
from the provisions hereof may not be given unless the Company and the Guarantors have obtained the
written consent of Majority Holders of the outstanding Registrable Securities affected by such
amendment, modification, supplement, waiver or consent; provided that no amendment,
modification, supplement, waiver or consent to any departure from the provisions of Section 5
hereof that adversely affects the rights of any Holder of Registrable Securities shall be effective
as against any such Holder unless consented to in writing by such Holder. Any amendments,
modifications, supplements, waivers or consents pursuant to this Section 6(b) shall be by a writing
executed by each of the parties hereto.

15

 

     (c)   Notices. All notices and other communications provided for or permitted hereunder shall
be made in writing by hand-delivery, registered first-class mail, telex, telecopier, or any courier
guaranteeing overnight delivery (i) if to a Holder, at the most current address given by such
Holder to the Company by means of a notice given in accordance with the provisions of this Section
6(c), which address initially is, with respect to the Initial Purchasers, the address set forth in
the Purchase Agreement; (ii) if to the Company and the Guarantors, initially at the Company’s
address set forth in the Purchase Agreement and thereafter at such other address, notice of which
is given in accordance with the provisions of this Section 6(c); and (iii) to such other persons at
their respective addresses as provided in the Purchase Agreement and thereafter at such other
address, notice of which is given in accordance with the provisions of this Section 6(c). All such
notices and communications shall be deemed to have been duly given: at the time delivered by hand,
if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if
mailed; when answered back, if telexed; when receipt is acknowledged, if telecopied; and on the
next Business Day if timely delivered to an air courier guaranteeing overnight delivery. Copies of
all such notices, demands or other communications shall be concurrently delivered by the Person
giving the same to the Trustee, at the address specified in the Indenture.

     (d)   Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon
the successors, assigns and transferees of each of the parties, including, without limitation and
without the need for an express assignment, subsequent Holders; provided that nothing
herein shall be deemed to permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms of the Purchase Agreement or the Indenture. If any transferee
of any Holder shall acquire Registrable Securities in any manner, whether by operation of law or
otherwise, such Registrable Securities shall be held subject to all the terms of this Agreement,
and by taking and holding such Registrable Securities such Person shall be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions of this Agreement and
such Person shall be entitled to receive the benefits hereof. The Initial Purchasers (in their
capacity as Initial Purchasers) shall have no liability or obligation to the Company or the
Guarantors with respect to any failure by a Holder to comply with, or any breach by any Holder of,
any of the obligations of such Holder under this Agreement.

     (e)   Third Party Beneficiaries. Each Holder shall be a third party beneficiary to the
agreements made hereunder between the Company and the Guarantors, on the one hand, and the Initial
Purchasers, on the other hand, and shall have the right to enforce such agreements directly to the
extent it deems such enforcement necessary or advisable to protect its rights or the rights of
other Holders hereunder.

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

     (g)   Headings. The headings in this Agreement are for convenience of reference only, are not a
part of this Agreement and shall not limit or otherwise affect the meaning hereof.

     (h)   Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.

     (i)   Miscellaneous. This Agreement contains the entire agreement between the parties relating
to the subject matter hereof and supersedes all oral statements and prior writings with respect
thereto. If any term, provision, covenant or restriction contained in this Agreement is held by a
court of competent

16

 

jurisdiction to be invalid, void or unenforceable or against public policy, the remainder of the
terms, provisions, covenants and restrictions contained herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated. The Company, the Guarantors and
the Initial Purchasers shall endeavor in good faith negotiations to replace the invalid, void or
unenforceable provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, void or unenforceable provisions .

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.

      

	 	 	 	 	 
	 	NORTEL NETWORKS LIMITED

 

 	 
	 	By:  	/s/  Katharine B. Stevenson
 	 
	 	 	Name:  	Katharine B. Stevenson 	 
	 	 	Title:  	Treasurer 	 
	 
	 	 	 
	 	By:  	/s/  Gordon A. Davies
 	 
	 	 	Name:  	Gordon A. Davies 	 
	 	 	Title:  	General Counsel – Corporate
and
Corporate Secretary 	 
	 
	 
	 
	 	NORTEL NETWORKS CORPORATION

 

 	 
	 	By:  	

/s/  Katharine B. Stevenson
 	 
	 	 	Name:  	Katharine B. Stevenson 	 
	 	 	Title:  	Treasurer 	 
	 
	 	 	 
	 	By:  	/s/  Gordon A. Davies
 	 
	 	 	Name:  	Gordon A. Davies 	 
	 	 	Title:  	General Counsel – Corporate
and
Corporate Secretary 	 
	 
	 
	 
	 	NORTEL NETWORKS INC. 

 	 
	 	By:  	/s/  Allen K. Stout
 	 
	 	 	Name:  	Allen K. Stout 	 
	 	 	Title:  	Vice President, Finance 	 

17

 

	 	 	 	 	 

Confirmed and accepted as of the date first above written:

[                              ]

For itself and on behalf of the

several Initial Purchasers listed in Schedule 1 hereto

	 	 	 	 	 
	 	 	 
	By:  	/s/  Authorized Signatory
 	 	 
	 	Authorized Signatory 	 	 
	 	 	 	 
	 

18Shareholders Agreement

                                                                                          

    EXHIBIT
      10.1

    
 

    EXECUTION
      COPY

     

    

    

    

    

    [NAME
      OF JV
      COMPANY]

    

    SHAREHOLDERS
      AGREEMENT

    

    BY
      AND

    

    AMONG

    

    TRICO
      MARINE
      SERVICES
      (HONG
      KONG)
      LIMITED,

    

    CHINA
      OILFIELD
      SERVICES
      LIMITED

    AND

    

    [NAME
      OF JV
      COMPANY]

    

    Dated
      as of December 20, 2005

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    TABLE
      OF CONTENTS

    

     

    ARTICLE
      I
      DEFINITIONS AND
      INTERPRETATION.......................................................
      1

     

     

    1.1
      DEFINITIONS.......................................................................................................................
      1

     

     

    1.2
      INTERPRETATION................................................................................................................
      5

     

     

    1.3
      GOVERNING
      LANGUAGE.
      ...................................................................................................
      6

     

     

    ARTICLE
      II PURPOSE AND BUSINESS OF THE
      COMPANY.............................................. 6

     

     

    2.1
      PURPOSE
      ...................................................................................................................................
      6

     

     

    2.2
      SCOPE
      OF
BUSINESS...............................................................................................................
      6

     

     

    2.3
      VESSEL
      BAREBOAT
      PRINCIPLES
      .........................................................................................
      7

     

     

    ARTICLE
      III CAPITALIZATION;SUBSCRIPTION; CAPITAL CONTRIBUTIONS AND

     

     

    TRANSFERS
      .......................................................................................................................................
      8

     

     

    3.1
      CAPITALIZATION;
      SUBSCRIPTION
      ........................................................................................
      8

     

     

    3.2
      CAPITAL
      CONTRIBUTIONS.........................................................................................................
      8

     

     

    3.3
      FAILURE
      TO
MAKE
      CAPITAL
      CONTRIBUTION
      .......................................................................
      9

     

     

    3.4
      SHARE
      CERTIFICATES
      ....................................................................................................................
      9

     

     

    3.5
      PROJECT
      START-UP
      COSTS............................................................................................................
      9

     

     

    3.6
      PRIORITY
      SUBSCRIPTION
      RIGHTS..............................................................................................
      10

     

     

    3.7
      TRANSFER
      OF SHARES;
      RIGHT
      OF
FIRST
      REFUSAL..............................................................
      10

     

     

    3.8
      BOARD
      APPROVAL
      OF TRANSFER..............................................................................................
      11

     

     

    3.9
      AFFILIATE
      TRANSFERS....................................................................................................................
      11

     

     

    ARTICLE
      IV
      FINANCING...........................................................................................................................
      11

     

     

    ARTICLE
      V
      MANAGEMENT OF THE
      COMPANY...............................................................................
      11

     

     

    5.1
      FORMATION
      AND CHARTER
      DOCUMENTS
      .................................................................................
      11

     

     

    5.2
      BOARD
      OF
DIRECTORS;
      TERM
      AND
VACANCIES
      ........................................................................
      11

     

     

    5.3
      MEETINGS
      AND AGENDA.....................................................................................................................
      12

     

     

    5.4
      QUORUM....................................................................................................................................................
      12

     

     

    5.5
      POWER
      OF
      THE BOARD
      OF
DIRECTORS............................................................................................
      12

     

     

    5.6
      MATTERS
      REQUIRING
      RESOLUTION
      BY UNANIMOUS
      VOTE
      .......................................................
      14

     

     

    5.7
      DUTIES
      OF
DIRECTORS;
      CONFLICTS
      OF INTEREST.........................................................................
      14

     

     

    5.8
      BOARD
      DISPUTES
      .....................................................................................................................................
      14

     

     

    5.9
      DELEGATION.................................................................................................................................................
      15

     

     

    5.10
      COMPLIANCE...............................................................................................................................................
      15

     

     

    5.11
      REMUNERATION
      .........................................................................................................................................
      15

     

     

    5.12
      INDEMNIFICATION
      .....................................................................................................................................
      15

     

     

    i

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    5.13
      SENIOR
      OFFICERS.......................................................................................................
      16

     

     

    ARTICLE
      VI SHAREHOLDER MEETINGS
      ......................................................................
      16

     

     

    6.1
      GENERAL MEETING
      ....................................................................................................
      16

     

     

    6.2
      CALLING A GENERAL MEETING;
      AGENDA............................................................
      17

     

     

    6.3
      RELATED MATTERS
      ....................................................................................................
      17

     

     

    6.4
      QUORUM FOR GENERAL
      MEETING..........................................................................
      17

     

     

    6.5
      VOTING GENERALLY
      .................................................................................................
      17

     

     

    6.6
      ORDINARY RESOLUTIONS
      ........................................................................................
      17

     

     

    6.7
      SPECIAL RESOLUTIONS
      .............................................................................................
      18

     

     

    6.8
      AUTHORIZATION OF
      DOCUMENTS..........................................................................
      18

     

     

    ARTICLE
      VII SHAREHOLDERS’
UNDERTAKINGS.......................................................
      18

     

     

    7.1
      COSL
      UNDERTAKINGS................................................................................................
      18

     

     

    7.2
      TRICO
      UNDERTAKINGS
      .............................................................................................
      19

     

     

    7.3
      COMPLIANCE WITH
      LAW...........................................................................................
      19

     

     

    7.4
      COMPANY’S INDEMNITY
      OBLIGATION..................................................................
      19

     

     

    7.5
      TAX
      AND OTHER
      PREFERENCES..............................................................................
      20

     

     

    7.6
      PRESERVATION OF ECONOMIC BENEFITS
      ............................................................ 20

     

     

    7.7
      COSTS
      AND EXPENSES
      ...............................................................................................
      20

     

     

    ARTICLE
      VIII COVENANT NOT TO COMPETE
      ............................................................. 20

     

     

    8.1
      COMPETITION................................................................................................................
      20

     

     

    8.2
      SEPARATE AGREEMENT
      ............................................................................................
      21

     

     

    ARTICLE
      IX REPRESENTATIONS AND
      WARRANTIES................................................ 22

     

     

    (A)
      DUE
      ORGANIZATION AND EXISTENCE; CORPORATE POWER ........................
      22

     

     

    (B)
      EXECUTION AND DELIVERY OF
      AGREEMENT..................................................... 22

     

     

    (C)
      BINDING
      AGREEMENT................................................................................................
      22

     

     

    9.2
      TRICO
      VESSELS
      ............................................................................................................
      22

     

     

    ARTICLE
      X
      PERSONNEL AND LABOR MANAGEMENT..............................................
      23

     

     

    10.1
      EMPLOYEES; HIRING
      ................................................................................................
      23

     

     

    10.2
      SENIOR MANAGEMENT
      ...........................................................................................
      23

     

     

    10.3
      EXPATRIATE
      EMPLOYEES........................................................................................
      23

     

     

    ARTICLE
      XI
      DIVIDENDS....................................................................................................
      23

     

     

    11.1
      DIVIDENDS...................................................................................................................
      23

     

     

    11.2
      RESERVES
      ....................................................................................................................
      23

     

     

    11.3
      PRIOR YEAR
      LOSSES..................................................................................................
      24

     

     

    ARTICLE
      XII
      TAXATION....................................................................................................
      24

     

     

    

     

     

    ii

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    12.1
      TAX
      MATTERS.............................................................................................................
      24

     

     

    ARTICLE
      XIII FINANCE, ACCOUNTING AND AUDITING ..........................................
      24

     

     

    13.1
      BOOKS AND
      RECORDS..............................................................................................
      24

     

     

    13.2
      FISCAL
      YEAR...............................................................................................................
      24

     

     

    13.3
      AUDITED ACCOUNTS; AUDITORS
      .........................................................................
      24

     

     

    13.4
      INTERIM ACCOUNTS
      .................................................................................................
      24

     

     

    13.5
      INSPECTION BY SHAREHOLDER-APPOINTED AUDITOR..................................
      24

     

     

    13.6
      BANK
      ACCOUNTS
      ......................................................................................................
      25

     

     

    13.7
      TAX
      MATTERS.............................................................................................................
      25

     

     

    ARTICLE
      XIV TERM AND
      TERMINATION.....................................................................
      25

     

     

    14.1
      TERM; EFFECTIVENESS
      ............................................................................................
      25

     

     

    14.2
      PROJECT
      START-UP....................................................................................................
      25

     

     

    14.3
      TERMINATION.............................................................................................................
      26

     

     

    14.4
      CONTINUED OPERATION
      .........................................................................................
      26

     

     

    14.5
      LIABILITY.....................................................................................................................
      26

     

     

    ARTICLE
      XV MANDATORY
      BUY-SELL..........................................................................
      27

     

     

    15.1
      REMEDIES
      ....................................................................................................................
      27

     

     

    15.2
      NOTICE
      .........................................................................................................................
      27

     

     

    15.3
      MANDATORY
      OFFER.................................................................................................
      27

     

     

    15.4
      FINANCING; TERMS
      ..................................................................................................
      27

     

     

    15.5
      OFFEREE RESPONSE NOTICE
      ..................................................................................
      27

     

     

    15.6
      BUY-SELL
      CLOSING...................................................................................................
      28

     

     

    15.7
      BUY-SELL CLOSING
      DELIVERIES...........................................................................
      28

     

     

    15.8
      DEFAULT OF PURCHASING PARTY
      .......................................................................
      28

     

     

    ARTICLE
      XVI LIQUIDATION; BUYOUT
      RIGHT.............................................................
      29

     

     

    16.1
      LIQUIDATION...............................................................................................................
      29

     

     

    16.2
      LIQUIDATION COMMITTEE
      .....................................................................................
      29

     

     

    16.3
      BUYOUT RIGHT
      ..........................................................................................................
      29

     

     

    ARTICLE
      XVII
      INSURANCE...............................................................................................
      29

     

     

    ARTICLE
      XVIII
      DEFAULT..................................................................................................
      30

     

     

    18.1
      DEFAULT.......................................................................................................................
      30

     

     

    18.2
      REMEDIES FOR
      DEFAULT........................................................................................
      30

     

     

    ARTICLE
      XIX FORCE
      MAJEURE......................................................................................
      30

     

     

    19.1
      FORCE MAJEURE
      .......................................................................................................
      30

     

     

    19.2
      SUSPENSION OF
      OBLIGATIONS...............................................................................
      30

     

     

    

     

     

    iii

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

     

     

    ARTICLE
      XX GOVERNING LAW; DISPUTE RESOLUTION..........................................
      31

     

     

    20.1
      GOVERNING LAW
      ......................................................................................................
      31

     

     

    20.2
      DISPUTE
      RESOLUTION..............................................................................................
      31

     

     

    20.3
      WAIVER OF SOVEREIGN IMMUNITY
      ....................................................................
      32

     

     

    ARTICLE
      XXI MISCELLANEOUS
      ....................................................................................
      32

     

     

    21.1
      NOTICES........................................................................................................................
      32

     

     

    21.2
      CONFIDENTIALITY
      ....................................................................................................
      33

     

     

    21.3
      ENTIRE CONTRACT; SUPERSEDING EFFECT; PRECEDENCE...........................
      33

     

     

    21.4
      WAIVER;
      MODIFICATION.........................................................................................
      34

     

     

    21.5
      HEADINGS....................................................................................................................
      34

     

     

    21.6
      BINDING
      EFFECT........................................................................................................
      34

     

     

    21.7
      SEVERABILITY............................................................................................................
      34

     

     

    21.8
      FURTHER
      ASSURANCES............................................................................................
      34

     

     

    21.9
      COUNTERPARTS.........................................................................................................
      34

     

     

    21.10
      MUTUAL NEGOTIATION
      ........................................................................................
      34

     

     

    21.11
      REMEDIES
      CUMULATIVE.......................................................................................
      34

     

     

    21.12
      CONSENTS;
      AUTHORIZATIONS.............................................................................
      35

     

     

    21.13
      TIME OF THE ESSENCE
      ...........................................................................................
      35

     

     

    21.14
      NO
      THIRD PARTY
      BENEFICIARY..........................................................................
      35

     

    

    ANNEXES

    

    ANNEX
      1
 Trico
      Vessels

    ANNEX
      2
 Company
      Geographic Territory

    ANNEX
      3A COSL
      Bareboat Charters

    ANNEX
      3B
 Trico
      Bareboat Charters

    ANNEX
      4
 Initial
      Board of Directors and Officers

    ANNEX
      5
 BIMCO
      Model Form Bareboat Charter Agreement

    ANNEX
      6 
      Trico
      Vessel Specifications

    

    

    

    

    

    

    

    

    

    

    

    iv

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SHAREHOLDERS
      AGREEMENT

    

    This
      SHAREHOLDERS AGREEMENT (this “Agreement”),
      dated
      as of December

    20,
      2005,
      is by and among:

    

    Trico
      Marine Services (Hong Kong) Limited,
      a
      limited liability company duly organized

    and
      validly existing under the laws of Hong Kong and having its registered office
      at
      18/F

    Tung
      Ning
      Bldg, 249-253 Des Voeux Road, Central, Hong Kong (hereinafter referred to
      as

    “Trico”);

    

    China
      Oilfield Services Limited,
      a
      corporation duly organized and validly existing under

    the
      laws
      of the PRC and having its registered office at 3-1516 Hebei Road, Haiyang new
      and

    Hi-tech
      Development Zone, Tanggu, Tianjin 300451, PRC (“COSL”);
      and

    

    [Name
      of JV Company],
      a
      limited liability company duly organized and validly existing

    under
      the
      laws of the Hong Kong and having its registered office at _____ (the
“Company”).

    Each
      of
      Trico, COSL and the Company is hereinafter sometimes referred to individually
      as
      a

    “Party”,
      and
      collectively, as the “Parties”.

    

    RECITALS

    

    WHEREAS,
      Trico possesses significant business know-how and experience in the

    provision
      of marine support services to offshore petroleum operations;

    

    WHEREAS,
      COSL possesses certain relationships necessary to develop the
      marine

    support
      services business in and to and from the PRC;

    

    WHEREAS,
      after conducting a joint feasibility study, COSL and Trico together
      are

    desirous
      of forming the Company for the purpose of developing a joint venture
      marine

    support
      services business in the Territory and will cause the Company to enter
      into

    agreements
      with customers to provide the Services; and

    

    WHEREAS,
      the Shareholders now desire to set forth their respective rights
      and

    obligations
      in connection with the ownership and management of the Company and
      their

    cooperation
      concerning the business of the Company and the provision of Services
      to

    customers
      in the Territory.

    

    NOW,
      THEREFORE, following friendly consultations on the basis of mutual
      benefit

    and
      equality, and in consideration of the mutual covenants and agreements set forth
      herein

    and
      for
      other good and valuable consideration, the receipt and sufficiency of which
      are

    hereby
      expressly acknowledged, the Parties, intending to be legally bound, hereby
      agree
      as

    follows:

    ARTICLE
      I

    DEFINITIONS
      AND INTERPRETATION

     

        1.1 Definitions.
      As used
      in this Agreement (including the recitals hereto), the

    following
      words and terms shall have the meanings ascribed to them below:

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    “Act”
means
      the Companies Ordinance (Chapter 32 of the Laws of Hong Kong).

    

    “Affiliate”
means,
      (i) in respect of COSL, any enterprise or other entity which,

    directly
      or indirectly, controls, or is controlled by COSL; the term “control”
meaning

    ownership
      of more than fifty percent (50%) of the registered capital or voting stock
      (shares)

    of,
      or
      the power to appoint a majority of the directors of the board of, an enterprise
      or other

    entity
      and (ii) in respect of Trico, any company which, through ownership of voting
      stock

    (shares)
      or otherwise, directly or indirectly, is controlled by, under common control
      with, or

    in
      control of, Trico; the term “control” meaning ownership of more than fifty
      percent (50%)

    or
      more
      of the voting stock (shares) of a company, or the power to appoint or elect
      a
      majority

    of
      the
      directors of a company, or the power to direct the management of a
      company.

    

    “Agreement”
has
      the
      meaning given to that term in the introductory paragraph

    hereto.

    

    “Authority”
means
      the government, legislative or regulatory body of Hong Kong or

    any
      municipality or other political subdivision thereof or The Stock Exchange of
      Hong Kong

    Limited,
      including any instrumentality, ministry, department, agency, court,
      authority,

    corporation,
      commission, division, branch, office or industrial association under the direct
      or

    indirect
      control of any such body, whose rulings and requirements have the force of
      law
      or

    which
      are
      otherwise binding on the Company or a Party.

    

    “Big
      4”
means,
      collectively, PriceWaterhouseCoopers, KPMG, Ernst & Young LLP,

    and
      Deloitte & Touche.

    

    “Board”
means
      the board of directors of the Company.

    

    “Breaching
      Shareholder”
has
      the
      meaning given to that term in Section 18.1.

    

    “Business
      Day”
means
      any day other than a Saturday, Sunday or other day on which

    banks
      in
      Hong Kong are required or authorized to be closed.

    

    “Business
      Dispute”
has
      the
      meaning given to that term in Section 5.8.

    

    “Business
      Dispute Notice”
has
      the
      meaning given to that term in Section 5.8.

    

    “Buy-Sell
      Closing Date”
has
      the
      meaning given to that term in Section 15.6.

    

    “Buyout
      Right”
means
      the right of any Party who is not in default pursuant to this

    Agreement
      to purchase any other Party’s ownership rights, according to the procedure
      in

    Section
      16.3.

    

    “Capital
      Contribution”
has
      the
      meaning given to that term in Section 3.2.

    

    “Chairman”
means
      the duly elected chairman of the Board.

    

    “China”
or
      “PRC”
means
      the People’s Republic of China or any political subdivision thereof other than
      Hong Kong.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    “Claimant”
has
      the
      meaning given to that term in Section 20.2.

    

    “Closing
      Date” means
      the
      date on which COSL and Trico make their respective

    Capital
      Contributions as provided in Section 3.2.

    

    “Company”
has
      the
      meaning given to that term in the introductory paragraph hereto.

    

    “COSL”
has
      the
      meaning given to that term in the introductory paragraph hereto.

    

    “Director”
means
      any director for the time being of the Company and where

    appropriate,
      includes an alternate director.

    

    “Dispute”
means
      any dispute, controversy, claim, counterclaim, demand, cause of

    action
      or
      other matter in question arising out of, relating to or in connection with
      this

    Agreement,
      including the alleged breach hereof, or in any way relating to the subject
      matter

    of
      this
      Agreement or the relationship among the Parties created by this
      Agreement.

    

    “Encumbrances”
means
      any mortgage, charge, lien, pledge, option, restriction, right

    of
      first
      refusal, third party right or interest, or other encumbrance or security
      interest of any

    kind.

    “Force
      Majeure”
means
      any event or circumstance outside the reasonable control of

    a
      Party,
      including earthquake, typhoon, flood or other natural disaster, strike or war,
      but not

    including
      acts or omissions of any Governmental Authority or any change of Law,
      which

    occurs
      after the commencement of the term of the Company and prevents or hinders
      any

    Party
      from entire or partial performance of its obligations hereunder.

    

    “GAAP”
means
      generally accepted accounting principles as are in effect from time
      to

    time
      in
      the United States of America, including the official interpretations thereof
      as
      defined

    by
      the
      Financial Accounting Standards Board, its predecessors and its successors,
      and
      applied

    on
      a
      consistent basis both as to classification of items and amounts.

    

    “General
      Shareholder Meeting”
means
      any general meeting of Shareholders, being

    either
      an
      annual general meeting or an extraordinary general meeting, conducted pursuant
      to

    this
      Agreement, the Organizational Documents and the Act.

    

    “Hong
      Kong”
means
      the Hong Kong Special Administrative Region of the PRC or

    any
      political subdivision thereof.

    

    “Hong
      Kong GAAP”
means
      generally accepted accounting principles as are in effect

    from
      time
      to time in Hong Kong, including any official interpretations thereof, and
      applied on a consistent

     basis
      both as to classification of items and amounts.

    

    “HK
      Dollars”
means
      the official currency of Hong Kong.

    

    “ICC”
has
      the
      meaning given to that term in Section 20.2.

    

    “Interest
      Rate”
means
      an interest rate that is equal to the lower of (a) the highest rate

    permitted
      by applicable Law or (b) LIBOR plus two percent (2%).

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    “Law”
means
      any constitution, statute, code, regulation, rule, injunction,
      judgment,

    order,
      circular, decree, ruling, charge or other restriction of any applicable
      Authority.

    

    “LIBOR”
      means
      the
      offered rate for U.S. dollar deposits, for a three-month period in

    an
      amount
      that is nearest in amount to the amounts to which the Interest Rate applies
      quoted

    on
      the
      day that is two Business Days prior to the date from which interest accrues
      with

    respect
      to amounts owed hereunder, as such appears on Page 3750 of the Dow Jones
      Market

    (Telerate)
      Service (or such other page as may replace Page 3750 on such service or
      such

    service
      as may be nominated by the British Bankers' Association as the information
      vendor

    for
      the
      purpose of displaying British Bankers' Association Settlement Rates for
      Dollar

    deposits)
      as of 11:00 a.m. London time on such date.

    

    “Liquidation
      Committee”
has
      the
      meaning given to that term in Section 16.2.

    

    “Loss”
means
      any actually paid or payable claim, loss, cost, liability, expense,

    damage,
      judgment, obligation, charge, fee, fine, penalty, costs, and expenses of
      litigation or

    other
      dispute resolution (including court costs, bonds and other deposits required
      by
      any court of justice, arbitration tribunal or governmental authority, and
      attorney’s and expert’s fees or disbursements).

    

    “Major
      Shareholder”
means
      each of Trico and COSL.

    

    “Material
      Adverse Effect”
means
      any action or series of actions, or inaction, by a

    Party
      that has had an adverse effect or effects on the assets, liabilities,
      operations, business

    condition
      (financial or otherwise) or prospects of the Company which, individually or
      in
      the

    aggregate,
      results or could reasonably be expected to result in a Loss to the Company
      or

    diminution
      of greater than ten percent (10%) of the net asset value of the
      Company.

    

    “Non-Breaching
      Shareholder”
has
      the
      meaning given to that term in Section 18.1.

    

    “Ordinary
      Shareholder Resolution”
has
      the
      meaning given to that term in Section 6.6.

    “Organizational
      Documents”
means
      the Memorandum and Articles of Association

    of
      the
      Company, including all amendments thereto.

    

    “Party”
or
      “Parties”
has
      the
      meaning given to each such term in the introductory

    paragraph
      hereto.

    

    “Person”
means
      any natural person, partnership, corporation, company, trust,

    enterprise,
      governmental entity or other entity or association having separate
      legal

    personality.

    

    “Project
      Start-up Costs”
means
      the costs and expenses incurred by the Shareholders

    that
      are
      directly associated with the development and establishment of the
      Company,

    including
      without limitation (i) costs incurred in connection with transporting the
      Trico

    Vessels
      to locations in the Territory and in connection with dry docking, class
      inspection and

    re-flagging
      of such vessels, (ii) legal consulting fees, (iii) financial consulting fees,
      (iv)

    engineering
      consulting fees, (v) due diligence costs and expenses, and (vi) working
      group

    operating
      expenses, such as office rent and equipment, travel, telecommunication
      costs,

    salaries
      and other expenses.

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    “Project
      Start-up Team”
has
      the
      meaning given to that term in Section 14.2.

    

    “Respondent”
has
      the
      meaning given to that term in Section 20.2.

    

    “Rules”
has
      the
      meaning given to that term in Section 20.2.

    

    “Services”
has
      the
      meaning given to that term in Section 2.2.

    

    “Shareholders”
means
      the Major Shareholders and any additional holders of Shares

    of
      the
      Company made party to this Agreement.

    

    “Shares”
means
      the ordinary shares of the Company, as more fully described in

    Section
      3.1.

    

    “Special
      Shareholder Resolution”
has
      the
      meaning given to that term in Section 6.7.

    

    “Territory”
has
      the
      meaning given to that term in Section 2.1.

    

    “Total
      Capital Contribution”
has
      the
      meaning given to that term in Section 3.2.

    

    “Tribunal”
means
      the panel of three (3) arbitrators appointed pursuant to Section

    20.2.

    

    “Trico”
has
      the
      meaning given to that term in the introductory paragraph hereto.

    

    “Trico
      Vessels”
means
      the 14 vessels listed on Annex 1.

    

    “U.S.
      Dollars”
means
      the official currency of the United States of America.

    

        1.2     Interpretation.
      In this
      Agreement:

    

    (a)
      all
      defined terms include the plural as well as the singular;

    

    (b)
      words
      importing any gender include other genders;

    

    (c)
      the
      terms “hereof” or “thereof”, “herein” or “therein”, “hereunder” or

    “thereunder”,
      and comparable terms refer to the entire agreement with respect to

    which
      such terms are used and not to any particular article, section or
      other

    subdivision
      thereof;

    

    (d)
      a
      reference to any Person or Party includes the successors and
      permitted

    assigns
      of such Person or Party;

    

    (e)
      references to laws, statutes or regulations include any amendment
      or

    modification
      to such law, statute or regulation and are to be construed as including
      all

    statutory
      or regulatory provisions consolidating, amending or replacing the
      law,

    statute
      or regulation referred to;

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    (f)
      references to any document, instrument or agreement shall (i) include
      all

    schedules,
      annexes, exhibits and other attachments thereto, (ii) include all
      documents,

    instruments
      or agreements issued or executed in replacement thereof and (iii)
      except

    where
      otherwise indicated, mean such document, instrument or agreement,
      or

    replacement
      or predecessor thereto, as amended, modified and supplemented from

    time
      to
      time and in effect at any given time;

    

    (g)
      the
      words “include”, “includes” and “including” are not limiting and
      shall

    mean
      “including without limitation”;

    

    (h)
      references to “Articles” or “Sections” or “Annexes” are references
      to

    articles
      or sections or annexes (as the case may be) of this Agreement, unless
      stated

    otherwise;

    

    (i)
      references to any Authority includes any Authority succeeding to
      the

    functions
      and capabilities of an Authority; and

    

    (j)
      any
      reference in this Agreement to a “day” is a calendar day and shall

    include
      Saturdays, Sundays and holidays, except that if an obligation to be
      performed

    under
      this Agreement falls due on a Saturday, Sunday or any other day which is not
      a

    Business
      Day, the obligation shall be deemed due on the next occurring
      Business

    Day.
      Any
      reference herein to a “month” is a calendar month (in accordance with
      the

    Gregorian
      calendar).

    

    1.3
       Governing
      Language.
      The
      governing language of this Agreement shall be the

    English
      language. All notices, correspondence, information, literature, data,
      manuals,

    procedures
      and other documents required under this Agreement shall be in the
      English

    language
      and the Chinese language, provided that in the event of any discrepancy
      between

    them,
      the
      English language version shall prevail.

    

    ARTICLE
      II

    PURPOSE
      AND BUSINESS OF THE COMPANY

    

    2.1
       Purpose.
      The
      Company shall be engaged primarily in the development and

    provision
      of international marine support services for the oil and gas industry in the
      countries

    listed
      on
      Annex 2 (the “Territory”)
      and to
      facilitate and enhance the technological and

    economic
      cooperation between the Major Shareholders so as to achieve the
      expected

    economic
      benefits and targets of the Major Shareholders.

    

    2.2
        Scope
      of Business.
      The
      scope of business of the Company shall include the

    following
      services (the “Services”):

    

    (a)
      to
      provide marine support services for the oil and gas industry in the

    Territory
      for offshore exploration, production, construction and pipeline
      projects,

    including
      marine transportation of drilling materials, supplies and crews, and
      support

    for
      the
      construction, installation, maintenance and removal of offshore
      facilities;

    (b)
      to
      provide marine support services for deepwater remotely operated

    vehicle
      (“ROV”)
      and
      remote intervention support services and pre-set mooring and

    deepwater
      anchor deployment;

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    (c)
      to
      provide support vessels for pre-installation survey and precision

    lightweight
      global positioning system receiver activities; fiber optic cable
      installation,

    cable
      plough and burial ROV operations, and installation and post-lay burial
      standby

    and
      system maintenance; and

    

    (d)
      to
      conduct any other business and activities permitted under
      applicable

    Hong
      Kong
      Law to achieve the business purposes of the Company, as defined by
      the

    Board
      from time to time.

    

    2.3
       Vessel
      Bareboat Principles.
      The
      Parties agree and acknowledge that during

    the
      start-up period of the Company’s business, it is in the interest of the Company
      for certain

    Trico
      Vessels to be engaged under bareboat charter arrangements. To this end and
      without

    prejudice
      to the restrictions on the Territory of the Company set forth in Section 2.1,
      Trico

    and
      COSL
      shall enter into bareboat charter contracts with the Company in respect of
      one
      or

    more
      of
      the Trico Vessels as provided in Sections 2.3(a) and 2.3(a) below; provided,

    however,
      that
      such charters shall be, in respect of Trico, only for operations
      conducted

    outside
      the Territory, and, in respect of COSL, only for operations conducted in the
      PRC, in

    each
      case
      unless the Party receives the approval of the majority of the Board. The
      Parties

    further
      acknowledge that Trico has entered into long-term charter contracts with
      third-party

    charterers
      in respect of certain of the Trico Vessels, and that such charter contracts
      will

    remain
      in
      effect until the primary term and any charterer-elected contractual option
      periods

    have
      expired.

    

    (a)
      COSL
      Charters within the PRC.
      COSL
      shall enter into bareboat charter

    arrangements
      with the Company in respect of the Trico Vessels indicated on

    Annex
      3(A) for operations conducted in the PRC, such bareboat charters to

    commence
      on the first day that such Trico Vessels are available to COSL for

    operations
      in the PRC market and to terminate on the later of (i) the end of
      any

    existing
      charter contract term for such vessel (including any applicable

    charterer-elected
      contractual option periods); and (ii) the bareboat end of term

    date
      specified with respect to such vessel on Annex 3(A). All such
      bareboat

    charter
      arrangements shall be based on the BIMCO Model Form Bareboat

    Charter
      Agreement attached as Annex 5 hereto and shall include pricing
      terms

    as
      set
      forth on Annex 3(A).

    

    (b)
      Trico
      Charters Outside of the Territory.
      Trico
      shall enter into bareboat

    charter
      arrangements with the Company in respect of the Trico Vessels

    indicated
      on Annex 3(B) for operations to be conducted outside of the

    Territory,
      such bareboat charters to commence on the first day that ownership

    and
      title
      of such Trico Vessels legally transfers to the Company and to

    terminate
      on the later of (i) the end of any existing charter contract term
      for

    such
      vessel (including any applicable charterer-elected contractual
      option

    periods);
      and (ii) the bareboat end of term date specified with respect to
      such

    vessel
      on
      Annex 3(B). Notwithstanding the foregoing, Trico shall have the

    right
      to
      extend such bareboat charters through December 31, 2006. If Trico

    elects
      to
      extend any applicable charter contract beyond June 30, 2006, Trico

    shall
      provide notice to the Company within 10 days thereof and
      acknowledge

    that
      the
      applicable charter contract shall expire as of December 31, 2006.
      The

    Parties
      agree that the charter rate for any such extension period shall be
      agreed

    between
      Trico and the Company and that in any case such charter rate shall not

    exceed
      125% of the bareboat rate set forth on Annex 3(B). All such charter

    contracts
      shall be based on the BIMCO Model Form Bareboat Charter

    Agreement
      attached as Annex 5 hereto and shall include pricing terms as set

    forth
      on
      Annex 3(B).

    

    ARTICLE
      III

    CAPITALIZATION;SUBSCRIPTION;
      CAPITAL CONTRIBUTIONS AND

    TRANSFERS

    

    3.1  Capitalization;
      Subscription.
      The
      total authorized capital of the Company 

    as
      of
      the
      date hereof is HK$1,000,000, divided into one million (1,000,000)
      ordinary

    shares(“Shares”),
      each
      Share having a par value of HK$1.00. Each of the Shares shall have

    the
      same
      voting and other rights and privileges, except as otherwise specified in
      this

    Agreement
      and the Organizational Documents. COSL shall subscribe for five
      hundred

    thousand
      (500,000) Shares, representing 50% of the issued and outstanding Shares, and
      Trico

    shall
      subscribe for five hundred thousand (500,000) Shares, representing 50% of the
      issued

    and
      outstanding Shares, in consideration of their respective Capital Contributions
      on the

    Closing
      Date.

    

    3.2
       Capital
      Contributions.

    

    (a)
      The
      total amount of Capital Contributions of the Company shall
      initially

    be
      forty-one million U.S. Dollars (US$41,000,000) (such amount, the “Total
      Capital

    Contribution”),
      which
      shall include US$38,000,000 in fixed assets and

    US$3,000,000
      in working capital. The Total Capital Contribution shall comprise
      the

    following
      Capital Contributions (each a “Capital
      Contribution”)
      by
      each of the

    Major
      Shareholders:

    

    (i)  COSL
      Contribution.
      As
      consideration for its Shares,

    COSL
      shall on the Closing Date make its Capital Contribution in

    immediately
      available funds in the amount of twenty million five

    hundred
      thousand US Dollars (US$20,500,000).

    

    (ii)
       Trico
      Contribution.
      As
      consideration for its Shares,

    on
      the
      Closing Date, Trico shall make its Capital Contribution in kind

    in
      the
      amount of twenty million five hundred thousand U.S. Dollars

    (US$20,500,000)
      by contributing and assigning to the Company (either

    directly
      or effectively by contract) all of its rights, title and interest
      in

    the
      Trico
      Vessels, which shall include all vessel spares parts assigned

    to
      such
      vessels as of the Closing Date. The Parties agree and

    acknowledge
      that the total value of the Trico Vessels is deemed to be

    thirty-eight
      million US Dollars (US$38,000,000). Accordingly, the

    Parties
      agree that, in addition to its Shares, Trico shall receive on the

    Closing
      Date immediately available funds from the Company in the

    amount
      of
      seventeen million five hundred thousand US Dollars

    (US$17,500,000)
      in exchange for its contribution of the Trico Vessels,

    such
      amount constituting the difference between the value of the Trico 

    Vessels
      and Trico’s Capital Contribution.

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    (iii)  Closing
      Date.
      The
      Closing Date shall occur on the

    date
      that
      is mutually agreed by COSL and Trico; provided,
      however,

    that
      in
      no event shall the Closing Date occur more than forty-five (45)

    days
      after the execution of this Agreement.

    

    3.3
       Failure
      to Make Capital Contribution.

    

    (a)
       In
      the
      event that a Major Shareholder fails to make its Capital Contribution
      or

    any
      part
      thereof within the time period stipulated herein, such Major Shareholder shall
      be

    liable
      to
      pay interest to the other non-defaulting Major Shareholder on the amount of
      its

    Capital
      Contribution or any relevant part thereof. Interest shall accrue at the Interest
      Rate

    from
      the
      date such Capital Contribution is due until the date such Capital Contribution
      is

    actually
      paid into the Company. If the Capital Contribution of a Major Shareholder
      remains

    outstanding
      (in part or in whole) ten (10) Business Days after the date specified for
      such

    Capital
      Contribution, the other non-defaulting Major Shareholder shall have the right
      to

    terminate
      this Agreement in accordance with the terms of this Agreement.

    

    (b)
       In
      the
      event that a Major Shareholder fails to make its Capital Contribution
      in

    full
      within the time period stipulated herein for any reason, including its inability
      to timely

    secure
      any required PRC government approvals, the other non-defaulting Major
      Shareholder

    shall
      have the right to terminate this Agreement in accordance with the terms of
      this

    Agreement;
      provided, however, that if the defaulting Major Shareholder provides
      prior

    written
      notice to the non-defaulting Shareholder of its desire to extend the time
      period, the

    non-defaulting
      Shareholder may at its discretion elect to extend the time period for a
      mutually

    agreed
      period, such extension to be without prejudice to any of the
      non-defaulting

    Shareholder’s
      rights under this Agreement.

    

    3.4
       Share
      Certificates.
      After
      each Major Shareholder has made its own Capital

    Contribution,
      the Company shall issue a share certificate to such Major
      Shareholder

    representing
      the Shares, which share certificate shall bear the following legend in
      English:

    

    “THE
      TRANSFER OR ENCUMBRANCE IN ANY MANNER OF THE SHARES

    REPRESENTED
      BY THIS SHARE CERTIFICATE IS
      RESTRICTED
      BY AND SUBJECT TO

    THE
      PROVISIONS OF THE MEMORANDUM
      AND ARTICLES
      OF ASSOCIATION
      OF THE

    COMPANY,
      AS
      WELL
      AS THAT CERTAIN SHAREHOLDERS
      AGREEMENT,
      DATED
      AS

    OF
      DECEMBER
      20,
      2005,
COPIES
      OF
      ALL OF WHICH MAY BE REVIEWED AT THE

    COMPANY’S
      HEAD
      OFFICE DURING BUSINESS HOURS.”

    

    The
      share
      certificates issued to the Major Shareholders will be conclusive evidence
      of

    full
      provision of the Capital Contribution made by each Major Shareholder. In case
      of
      loss or

    damage
      of
      the share certificate, the affected Major Shareholder shall immediately notify
      the

    Board
      of
      such loss or damage, and simultaneously apply for the issuance of a
      new

    replacement
      share certificate.

    

    3.5  Project
      Start-up Costs.
      All
      Project Start-up Costs incurred by any of the

    Major
      Shareholders from the date of execution of this Agreement shall be capitalized
      and

    treated
      as part of the Company start-up costs upon approval of the Directors at the
      inaugural

    meeting
      of the Board. Upon execution of this Agreement, the Major Shareholders shall
      each

    contribute
      funds into an expense account in order to fund Project Start-up Costs incurred
      after

    the
      execution of this Agreement in accordance with a budget to be proposed by the
      Project 

    Start-up
      Team. All Project Start-up Costs shall be borne by the Major Shareholders in
      proportion 

    to
      their
      respective percentage ownership interest in the Company, and the
      consent

    of
      the
      Project Start-up Team shall be required in order to pay Project Start-up Costs
      from

    such
      jointly administered expense account.

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    3.6
       Priority
      Subscription Rights.
      In the
      event the Board decides to increase the

    authorized
      and issued share capital of the Company above the amount set forth in Section
      3.1

    above,
      including pursuant to an issuance of Shares, options or warrants for Shares,
      or
      other

    instruments
      convertible into equity of the Company, then each Major Shareholder
      shall,

    during
      the period established by the duly adopted resolution of the Shareholders
      authorizing

    the
      issuance of such Shares, have the right, but not the obligation, to subscribe
      for any such

    Shares,
      options, warrants or other instruments, pro
      rata based
      on
      such Major Shareholder’s

    ownership
      percentage of the then issued and outstanding Shares. The Parties agree that
      the

    Board
      will not have the power to increase the authorized capital of the Company,
      nor
      to

    require
      any additional investment in the Company by the Major Shareholders, until
      after

    payment
      in full has been made by each Major Shareholder of its undertaken
      Capital

    Contribution
      as set forth in Section 3.2.

    

    In
      the
      event the Board decides to increase the authorized and issued share capital
      of

    the
      Company and a Major Shareholder fails to subscribe or pay for the pro
      rata portion
      of the

    Shares
      to
      which it is entitled during such period, that Major Shareholder shall notify
      the

    Board
      in
      writing of its intention not to participate in such increase within thirty
      (30)
      days

    after
      the
      Board has notified the Major Shareholders of its decision to increase the
      authorized

    and
      issued share capital of the Company. In such event the Major Shareholder who
      elected to

    exercise
      its right shall have the right to purchase the unsubscribed or unpaid portion.
      In that

    case,
      after the authorized and issued share capital of the Company has been increased,
      the

    percentage
      interest of the Shareholders set forth in Section 3.1 shall be adjusted
      accordingly.

    

    3.7
       Transfer
      of Shares; Right of First Refusal.
      When a
      Shareholder intends to assign, 

    sell,
      transfer, alienate or dispose of all or any of its Shares (a “Transferring

    Shareholder”),
      it
      shall deliver to the Company and the other Shareholders written notice
      (an

    “Offer
      Notice”)
      thereof setting forth (i) the name of the transferee, (ii) the number of
      Shares

    to
      be
      transferred (the “Offered
      Shares”),
      and
      (iii) the transfer price. The Major Shareholders

    shall
      have a right of first refusal exercisable in writing within ninety (90) days
      of
      the receipt

    of
      such
      notice, to purchase the Offered Shares at a price and on terms and conditions
      no
      less

    favorable
      than those offered to such third party. If the Major Shareholders fail to
      exercise

    their
      right to acquire the Offered Shares within ninety (90) days after the date
      of
      the

    Transferring
      Shareholder’s Offer Notice, then, subject to Section 3.8 below, such
      Major

    Shareholder(s)
      shall be deemed to have given its consent to such transfer and the
      Transferring

    Shareholder
      shall be free to assign, sell, transfer, alienate or dispose of the Offered
      Shares to

    the
      third
      party, subject to the following:

    

    (a)
      such
      transfer is valid under the laws of Hong Kong;

     

    (b)
      the
      Transferring Shareholder shall provide the Major Shareholders with
      a

    copy
      of
      the executed written transfer agreement, which shall provide that
      the

    transferee
      shall assume all the rights and obligations of the Transferring
      Shareholder

    under
      this Agreement; and

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    (c)
      neither the business of the Company nor the performance of this

    Agreement
      or other contracts or agreements shall be materially and adversely

    interrupted
      by any such sale or other transfer of such interest.

    

    If
      the
      Major Shareholders exercise their right to acquire the Offered Shares within
      such 

    thirty-day
      period, then,
      subject to Section 3.8, the Transferring Shareholder shall sell the

    Offered
      Shares to the Major Shareholders exercising
      its rights on the terms set forth in the Offer Notice.

    

    3.8
       Board
      Approval of Transfer.
      No
      Shareholder shall assign, sell, transfer,

    alienate
      or dispose of all or any of its Shares to a third party without the unanimous
      consent

    of
      the
      Board. Each the Major Shareholder agrees to direct its representatives on the
      Board to

    consent
      to any transfer that satisfies the provisions set forth in Section 3.7. Further,
      no

    Shareholder
      shall pledge, hypothecate or encumber its Shares, either voluntarily
      or

    involuntarily,
      without the express written consent of the other Party.

    

    3.9  Affiliate
      Transfers.
      Notwithstanding the provisions of Section 3.7 and

    Section
      3.8, a Shareholder may assign all or some of its Shares to an Affiliate;
      provided that

    the
      assigning Shareholder shall remain liable in the event the transferee fails
      to
      perform its

    obligations
      under this Agreement, and the non-assigning Shareholders hereby waive
      their

    pre-emptive
      rights of purchase in such event and hereby provide their consent to
      such

    assignment.
      The non-assigning Shareholder hereby covenants that it will comply with
      all

    reasonable
      requests of the Transferring Shareholder to effect the assignment to an
      Affiliate,

    including
      instructing its Directors to sign a Board resolution approving the
      assignment,

    executing
      an amendment contract whereby the Affiliate becomes a party to this Agreement
      as

    a
      Shareholder and other acts required by Hong Kong Law.

    

    ARTICLE
      IV FINANCING

    

    The
      Company’s future additional financing will be obtained by utilizing
      funds

    through
      loans from financial institutions or other sources to be entered into on
      reasonable

    commercial
      terms. No Shareholder shall be required to provide any guarantee, indemnity
      or

    security
      for the borrowings of the Company.

    

    ARTICLE
      V

    MANAGEMENT
      OF THE COMPANY

    

    5.1
       Formation
      and Charter Documents.
      The
      Company shall exist and operate

    pursuant
      to the terms of the Organizational Documents, this Agreement and applicable
      Law.

    The
      Board
      is the highest authority of the Company, and business and affairs of the
      Company

    shall
      be
      exercised by or under the authority of the Board as provided
      herein.

    

    5.2
       Board
      of Directors; Term and Vacancies.
      The
      Company shall be governed

    by
      a
      Board composed of six (6) directors, of which the Shareholders agree three
      (3)
      shall be

    nominated
      by COSL and three (3) by Trico. The Directors shall be elected by
      the

    Shareholders
      for a term of office of three (3) years. A Director whose term of office
      expires

    may
      be
      re-elected. Should any casual vacancy occur in the membership of the Board,
      the

    Board
      shall appoint the person nominated by the Shareholder that nominated the
      Director

    whose
      departure created such vacancy. Within 30 days following the end of the term
      of
      office

    for
      the
      initial Chairman (and thereafter for each successor Chairman), the Shareholders
      shall

    discuss
      and agree upon a successor Chairman, who shall be elected from one of the
      Directors.

    The
      initial Board members and Chairman are listed on Annex 4. Each Shareholder
      may

    replace
      one or more Directors appointed by it at any time upon written notice to the
      other

    Parties
      of such appointment or replacement.

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    5.3
       Meetings
      and Agenda.
      The
      Board shall convene at least four (4) meetings

    every
      year and may meet from time to time, as may be convened by the Chairman or
      by
      the

    majority
      of Directors. Following the inaugural meeting of the Board, the first meeting
      each

    year
      shall be held within two (2) months after the end of each preceding fiscal
      year.

    Additionally,
      the Board shall meet on an annual basis to discuss the desirability
      and

    feasibility
      of expanding the Company’s business into additional markets.

    

    Board
      meetings shall be held at the Company’s principal office in Hong Kong or
      at

    such
      other location as may be agreed by the Board and shall be presided over by
      the

    Chairman.
      Board meetings may also be convened by teleconference; provided,
      however,
      that

    at
      least
      one Board meeting each year shall be held in person. In lieu of a meeting of
      the

    Board,
      the Board may adopt resolutions by written consent provided such resolution
      is
      sent to

    all
      directors and affirmatively signed by all of the Directors. Such resolution
      shall become

    effective
      on the date when all of the Directors have executed it (which may be in
      counterparts

    or
      by
      facsimile).

    

    The
      Chairman shall deliver to each Director a written notice not less than ten
      (10)

    days
      before the date of each regular Board meeting. The notice will set forth the
      agenda,

    invitees,
      place and time of the Board meeting. Should the Chairman deem it necessary,
      or

    upon
      the
      request of two or more Directors, the Chairman of the Board shall convene a
      special

    meeting
      and shall send a written notice of such meeting to all the Directors within
      twenty-one

    (21)
      days
      of the Chairman’s decision or receipt of such request.

    

    If
      a
      Director wishes an interpreter to attend a Board meeting to
      facilitate

    communication
      between the Directors, such Director shall so inform the Chairman.
      The

    Party
      that nominated such Director shall supply an interpreter at its sole
      expense.

    

    5.4
       Quorum.
      A
      quorum for meetings of the Board shall require the presence in

    person
      or
      by phone in accordance with the Organizational Documents of at least five
      (5)

    Directors.

    

    Each
      Director, including the Chairman, shall have only one vote. Except as set
      forth

    in
      Section 5.6, all decisions of the Board shall be taken by the affirmative vote
      of a majority

    of
      the
      Directors. The proceedings of meetings of the Board will be conducting in
      English and

    Chinese.
      Unless otherwise required by applicable Law, the official minutes of meetings
      and

    resolutions
      taken therein shall be kept in English and Chinese, and shall be signed by
      the

    Directors
      present at the meeting and shall be entered in the minute book of the
      Company.

    Decisions
      may be taken or resolutions passed by the Board without a meeting if a
      proposal

    for
      action is submitted in writing to each of the members of the Board and each
      such
      member

    consents
      in writing to such action (this may be performed by counterpart copies and
      by

    facsimile)

    

    5.5
       Power
      of the Board of Directors.
      Except
      as otherwise expressly provided by

    applicable
      Law or this Agreement, and except for matters that, under applicable Law or
      this

    Agreement,
      fall exclusively within the jurisdiction of the General Shareholder Meeting,
      the

    Board
      shall, consistent with any resolutions of the General Shareholder Meeting,
      administer

    the
      business and property of the Company and manage the affairs of the Company
      and
      shall

    have
      full
      authority to do so, provided that its resolutions and acts are consistent with
      the Act,

    this
      Agreement and the Organizational Documents. Without limiting the foregoing,
      the
      Board

    shall
      not
      take any action requiring an Ordinary Shareholder Resolution pursuant to
      Section

    6.6
      or a
      Special Shareholder Resolution pursuant to Section 6.7 or as required by the
      Act, but

    the
      Board
      of Directors may implement a decision made by an Ordinary
      Shareholder

    Resolution
      or a Special Shareholder Resolution. 

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

          Subject
        to
        the foregoing and the authority delegated by the General Shareholder
        Meeting,

      the
        functions and powers of the Board shall include decisions on the following
        matters:

    

    

    (a)
      the
      appointment, dismissal or alteration of the description of duties of
      the

    Chief
      Executive Officer, Chief Operating Officer, Executive Vice President, or
      Chief

    Financial
      Officer;

    

    (b)
      the
      Company’s business policy, development plans, long-term objectives,

    economic
      plans (including investment), and financing plans;

    

    (c)
      the
      acquisition, assignment, transfer or lease of title to land and
      structures

    on
      land;

    

    (d)
      the
      grant or creation of any mortgages related to the Company’s
      property;

    

    (e)
      the
      commencement of litigation or arbitration proceedings against third

    parties
      which could have a material impact on the business of the Company;

    

    (f)
      the
      examination and approval of the Company’s annual report, balance

    sheets,
      profit and loss statement and the report on changes in the financial position
      of

    the
      Company;

    

    (g)
      the
      establishment of annual budgets and the plans for marine support

    service
      business and personnel;

    

    (h)
      the
      establishment of employee benefit plans and human resources
      policies;

    

    (i)
      systems and methods of financing and accounting;

    

    (j)
      establishment, acquisition, disposition or closing of branch offices,
      and

    other
      facilities outside of Hong Kong;

    

    (k)
      allocation of net profits including contributions to legally required
      funds,

    dividend
      payments, measures for making up losses and measures for handling

    unforeseen
      events;

    

    (l)
      formulating basic guidelines on staff and workers, including conditions
      of

    employment,
      pensions, salaries and salary standards, bonuses, subsidies, labor

    insurance,
      labor protection and disciplinary rules and regulations;

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    (m)
      conclusion, modification and termination of contracts involving the
      import

    or
      transfer of patent and trademark rights, know-how and technical
      cooperation;

    

    (n)
      appointment and dismissal of external auditor(s) of the Company;
      and

    

    (o)
      any
      other matter that is not included in Section 5.6 or otherwise
      delegated

    to
      the
      Chief Executive Officer or Chief Operating Officer.

    

    5.6  Matters
      Requiring Resolution by Unanimous Vote.
      Subject
      to the first

    paragraph
      of Section 5.5 and the authority delegated by the General Shareholder Meeting,
      the

    following
      matters shall be resolved only pursuant to a resolution passed by
      unanimous

    agreement
      of the Board:

    

    (a)
      extension, termination, dissolution and liquidation of the Company;

    

    (b)
      merger with, participation in and withdrawal from other economic

    organizations;

    

    (c)
      any
      amendment to the Organizational Documents of the Company,

    including
      any increase in the authorized capital of the Company;

    

    (d)
      any
      acquisition, assignment, transfer or other disposition of equipment
      or

    other
      property with a book or market value in excess of the sum of five million
      US

    Dollars
      (US$5,000,000);

    

    (e)
      any
      (i) material expansion of, or amendment to, the business scope or

    organizational
      structure of the Company, (ii) significant changes in development
      of

    Company’s
      business activities or, (iii) amendment to the Territory listed on Annex
      2;

    

    (f)
      incurrence of indebtedness (including any guarantee of indebtedness
      of

    another
      party) in excess of five million US Dollars (US$5,000,000) (or the
      equivalent

    thereof
      in any other currency) at any one time, other than as provided in the
      budget.

    

    5.7
       Duties
      of Directors; Conflicts of Interest.
      Directors
      shall avoid any situation

     that
      would conflict with
      the
      interests of the Company, including:

    

    (a)
      a
      commercial transaction between the Company and a Director or
      between

    the
      Company and an entity in which the Director has a direct or indirect
      interest;

    

    (b)
      holding a direct or indirect interest in a competitor of the Company;
      or

    

    (c)
      receiving value from an entity other than the Company in an attempt
      to

    influence
      the actions of the Company.

    

    The
      Directors shall inform the Board immediately upon the occurrence of any
      conflict

    of
      interest.

    

    5.8
       Board
      Disputes

    

    (a)
      If
      the Board has been unable to obtain sufficient votes or consents as

    provided
      in Section 5.5 or Section 5.6 to approve or disapprove any action listed in
      

    Section
      5.5 or Section 5.6, as the case may be, that is properly submitted to it for
      a

    vote
      (either of which, a “Business
      Dispute”),
      then
      the Board members will consult

    and
      negotiate with each other in good faith to find a mutually agreeable solution.
      If

    the
      Board
      does not reach such solution within 30 days from the date the
      disagreement

    occurred,
      then either Major Shareholders may give notice to the other that the Board’s

    failure
      to approve or disapprove such action will, in such Party’s judgment, adversely
      affect 

    the
      Company (a “Board
      Dispute Notice”).
      Notwithstanding the foregoing, in the event that a 

    Business
      Dispute involves issues or factors that require a longer period to resolve,
      the
      Parties

     may
      agree to extend such period by mutual consent in writing.

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    (b)
      Within two (2) days after the giving of the Dispute Notice, the
      Business

    Dispute
      will be referred by the Board to the senior executive of each Major

    Shareholder
      to whom the respective Board members report (each a “Party
      Executive”)
      

    in
      an
      attempt to reach resolution. If the Party Executives are unable to resolve
      the Business

     Dispute
      within ten (10) days after the date of the Dispute Notice, or
      such
      longer period as they 

    may
      agree
      in writing, then they will refer the BusinessDispute
      to the chief executive officer of each

     Party.
      The chief executive officers willmeet,
      consult and negotiate with each other in good faith. If 

    they
      are
      unable to agreewithin
      20
      days of the date of the Dispute Notice, then they will adjourn such

     attemptsfor
      a
      further period of five (5) days during which no meeting will be held. On the
      day
following

     such
      period, the chief executive officers of the Parties will meet again in an
effort
      to
      resolve the 

    Business
      Dispute. If the chief executive officers are unable to resolve
      the Business Dispute within

     48
      hours after the time at which their last meeting occurred, and one of the
      Parties reasonably determines 

    that
      such
      Business Dispute constitutes, will give rise to, or result in, a Material
      Adverse Effect, then 

    Article
      XV will apply.

    

    5.9
       Delegation.
      The
      Board may, to the extent permitted by this Agreement, the

    Organizational
      Documents and the Act, delegate its responsibilities from time to time to
      any

    of
      its
      members and to individuals occupying other senior management positions. Should
      the

    Chairman
      be unable to perform his duties for any reason, he may temporarily authorize
      any

    other
      Director in writing to represent the Company.

    

    5.10
       Compliance.
      The
      Shareholders hereby expressly covenant and agree to cause

    each
      member of the Board elected from nominees nominated by it to comply in full
      with
      the

    provisions
      of this Agreement, the Organizational Documents, and the Act.

    

    5.11
       Remuneration.
      The
      Directors shall not receive remuneration for their

    services
      as Directors.
      The
      Major Shareholder that appointed the Directors shall reimburse the

    reasonable
      costs of transportation, meals and lodging and other per diem allowances
      incurred

    while
      the
      Directors are engaged in matters relating to the business of the
      Company.

    

    5.12
       Indemnification.
      The
      Company may, by Ordinary Shareholder Resolution

    indemnify
      and hold harmless every person involved in any action, suit or
      proceeding,

    whether
      civil, criminal, administrative or investigative by reason of the fact that
      he
      or she, or

    a
      person
      of whom he or she is the legal representative, is or was a director or officer
      of the

    Company,
      whether the basis of such proceeding is alleged action in an official capacity
      as a

    director,
      officer, employee or agent or in any other capacity, to the fullest extent
      authorized

    by
      applicable Law.

    

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    5.13
       Senior
      Officers.
      The
      Company shall have the following senior officers: one

    (1)
      Chief
      Executive Officer, who shall also be the General Manager of the Company, one
      (1)

    Chief
      Operating Officer, one (1) Executive Vice President, and one (1) Chief
      Financial

    Officer.
      During the first 36 months commencing on the Closing Date, the Major
      Shareholders

     agree
      to direct their respective Directors to vote for Trico’s nominees for the
      positions of Chief 

    Operating
      Officer and Chief Financial Officer and to vote for the COSL’s nominees for the
      positions 

    of
      Chief
      Executive Officer and Executive Vice President. Commencing on the date that
      is
      36 months 

    from
      the
      Closing Date, or on such earlier date as the Major shareholders may mutually
      agree, the Major 

    Shareholders
      agree to direct their respective Directors to vote for the candidate for the
      position of Chief 

    Executive
      Officer nominated by the Party that did not appoint the Director who is
      currently serving as the

     Chairman.
      The positions of Chief Operating Officer, Executive Vice President, and Chief
      Financial Officer 

    shall
      be
      agreed and appointed by the Board.

     

        The
      Chief
      Executive Officer shall report to the Board and shall have responsibility for
      the day-to-day 

    management
      and operation of the Company. The Chief Executive Officer shall
      act
      upon the instructions 

    of
      the
      Board, executing
      its resolutions.

     

        The
      senior
      officers shall act in accordance with the laws and regulations of Hong Kong.
      

    Should
      the Chief Executive Officer be unable to perform his duties for any reason,
      the

    Chief
      Operating Officer may temporarily carry out the duties of the Chief Executive
      Officer

    until
      such time as a new Chief Executive Officer is appointed or the Chief Executive
      Officer

    has
      resumed the performance of his duties. No senior officer shall hold a post
      concurrently

    with
      other economic organizations, nor shall any senior officer be engaged (in
      whatever

    capacity)
      in any other economic organizations which are in commercial competition with
      the

    Company.

    

    The
      Chief
      Executive Officer, Chief Operating Officer, Executive Vice President,
      and

    the
      Chief
      Financial Officer may be dismissed at any time by a decision of the Board.
      Should

    the
      Chief
      Executive Officer, Chief Operating Officer, Executive Vice President, and
      the

    Chief
      Financial Officer violate any law or be derelict in their duties, the Board
      may
      dismiss

    them.

    

    Unless
      otherwise decided by the Board, the term of office for all senior personnel
      (the

    Chief
      Executive Officer, Chief Operating Officer, Executive Vice President, and
      Chief

    Financial
      Officer) shall be three (3) years.

    

    ARTICLE
      VI

    SHAREHOLDER
      MEETINGS

    

    6.1
       General
      Meeting.
      An
      annual General Shareholder Meeting shall be held each

    year
      no
      later than four (4) months after the end of the preceding fiscal year at the
      Company’s

    head
      office or at such other location as may be designated by the Board. An
      extraordinary

    General
      Shareholder Meeting may be convened at any time as and when necessitated by
      the

    needs
      of
      the Company in accordance with Section 6.2. Decisions may be taken or
      resolutions

    passed
      by
      the Shareholders without a General Shareholder Meeting if a proposal for action
      is

    submitted
      in writing to each of the Shareholders and each such Shareholder consents
      in

    writing
      to such action (this may be performed by counterpart copies and by facsimile)
      and

    such
      written consents shall be as effective as if an Ordinary Shareholder Resolution
      or Special

     Shareholder
      Resolution had been passed by the Shareholders at a General Shareholder
      Meeting.

    

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    6.2
       Calling
      a General Meeting; Agenda.
      The
      Board shall call an annual General

    Shareholder
      Meeting for each year. An extraordinary General Shareholder Meeting may
      be

    called
      by
      the Board, or by one or more Shareholders holding an aggregate percentage of
      at

    least
      40%
      of the Shares.
      The
      Company or other applicable person shall provide notice of a

    General
      Shareholder Meeting to each Shareholder at least ten (10) Business Days in
      advance

    of
      such
      General Shareholder Meeting.

    

    6.3  Related
      Matters.
      The
      chairman of the General Shareholder Meeting shall be

    elected
      from among the Shareholders (or their representatives) by a majority vote of
      the

    Shares
      represented at the relevant meeting. The secretary and the vote collector of
      the

    General
      Shareholder Meeting shall be elected from among the Shareholders (or
      their

    representatives).
      Unless otherwise required by applicable Law, each General
      Shareholder

    Meeting
      shall be conducted in English and Chinese, and the minutes of each
      General

    Shareholder
      Meeting shall be prepared in English and Chinese promptly after each
      meeting

    and
      shall
      be kept in the minute book of the Company.

    

    6.4
       Quorum
      for General Meeting.
      A
      quorum for any General Shareholder

    Meeting
      shall consist of Shareholders present in person or represented by proxy holding
      more

    than
      75%
      of the Shares, provided that the presence of a quorum shall not modify or lessen
      the

    affirmative
      vote required by Sections 6.6 and 6.7. If within three hours of the time
      appointed

    for
      a
      General Shareholder Meeting such quorum is not present, the General
      Shareholder

    Meeting
      shall stand adjourned to such place, time and date, not less than two (2)
      Business

    Days
      and
      not to exceed 30 days thereafter, as the Board may establish by written notice.
      At

    such
      successive General Shareholder Meeting, the same requirement for having a
      quorum

    shall
      be
      applicable.

    

    6.5
       Voting
      Generally.
      Each
      Share shall entitle its owner to one vote. Votes shall

    be
      cast
      in writing. Shareholders may be represented at General Shareholder Meetings
      by
      a

    corporate
      representative in the case of companies or by proxies, the holders of which
      need

    not
      be
      Shareholders. Proxy holders that are Shareholders shall be entitled to vote
      based on the

    Shares
      of
      the Shareholders they represent separately, in addition to voting based on
      their
      own

    Shares.

    

    6.6
       Ordinary
      Resolutions.
      Except
      as set forth in Section 6.7 or as required by

    the
      Organizational Documents or the Act, all resolutions, actions and decisions
      of
      the

    Shareholders
      shall be adopted, taken or made at a General Shareholder Meeting by
      the

    affirmative
      vote
      of
      Shareholders (or their representatives) representing a majority of
      all

    issued
      and outstanding Shares (not just those Shares that are present or represented
      by
      proxy)

    or
      by
      written consent in lieu of a meeting if signed by all of the Shareholders
      (“Ordinary

    Shareholder
      Resolutions”).
      Without prejudice to any other provisions of this Agreement

    that
      require the Shareholders to act by Ordinary Shareholder Resolution, the
      following

    actions
      shall require the action of the Shareholders acting by Ordinary
      Shareholder

    Resolution:

    

    (a)
      any
      decision establishing or modifying the fundamental accounting

    policies
      of the Company;

    

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    (b)
      any
      agreement by the Company to guarantee the payment or performance

    of
      the
      obligations of any other Person;

    

    (c)
      any
      approval of the taking of any material action by the Company
      outside

    the
      ordinary course of business;

    

    (d)
      any
      decision for the Company to incur indebtedness for borrowed money

    in
      an
      amount above the limits set forth in Section 5.6; and

    

    (e)
      appointing or removing the Company’s independent auditors.

    

    6.7
       Special
      Resolutions.
      Resolutions, actions and decisions of the Shareholders

    may
      only
      be adopted, taken or made at a General Shareholder Meeting by the
      affirmative

    vote
      of
      Shareholders (or their representatives) representing at least two-thirds (66
      2/3%)

     of
      all issued and outstanding Shares (not just those Shares that are present or
      represented by proxy)

     or
      by written consent in lieu of a meeting if signed by all of the Shareholders,
      in
      respect of the 

    following
      matters (“Special
      Shareholder Resolutions”):

    

    (a)
      any
      merger, consolidation or similar amalgamation of the Company with

    any
      other
      company or concern;

    

    (b)
      any
      decision to dissolve, wind-up, liquidate, deregister or terminate
      the

    Company;

    

    (c)
      any
      sale, transfer, assignment or other disposition of all or substantially
      all

    of
      the
      assets of the Company;

    

    (d)
      alteration to the rights attaching to the Shares; and

    

    (e)
      any
      amendment to the Organizational Documents.

    

    6.8
       Authorization
      of Documents.
      To be
      valid and binding, all notes, offers and

    acceptances,
      powers of attorney, commitments, deeds, transfers, assignments,
      contracts,

    obligations,
      certificates and other instruments of the Company must be authorized by
      (i)

    Ordinary
      Shareholder Resolution, with respect to those matters set forth under Section
      6.6, or

    (ii)
      Special Shareholder Resolution, with respect to those matters set forth under
      Section 6.7.

    Subject
      to the Act, this Agreement and the Organizational Documents, the Shareholders
      may

    delegate
      such of this authority and power as it considers appropriate to a member or
      members

    of
      the
      Board, other executives of the Company or other appropriate Persons (subject
      to

    authorization
      and spending limits to be specified by Ordinary Shareholder Resolution
      or

    Special
      Shareholder Resolution, as the case may be).

    

    ARTICLE
      VII SHAREHOLDERS’ UNDERTAKINGS

    

    7.1
      COSL
      Undertakings.
      In
      addition to its other obligations set forth in this

    Agreement,
      COSL hereby covenants and undertakes to:

    

    (a)
      assist in handling all the matters and providing all documents related to
      the

    establishment
      of the Company, including the application to the relevant PRC authorities for
      any approvals, filing 

    for
      registrations, or obtaining of business licenses,

    if
      required;

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    (b)
      assist the Company in dealing with any PRC Government Authorities
      and

    third
      parties as may be necessary to ensure that the Company is able to operate in
      the

    manner
      contemplated herein;

    

    (c)
      assist the Company in applying for tax benefits and other
      preferential

    treatments;

    

    (d)
      assist non-PRC employees of Trico and the Company in obtaining
      entry

    visas
      and
      providing assistance for their travels in China; and

    

    (e)
      any
      other responsibilities as may be agreed upon by the Parties from
      time

    to
      time.

    

    7.2
      Trico
      Undertakings.
      In
      addition to its other obligations set forth in this

    Agreement,
      Trico hereby covenants and undertakes to:

    

    (a)
      provide any relevant documents and materials necessary for the

    establishment
      of the Company;

    

    (b)
      provide its expertise with respect to the Services to the Trico Vessels
      and

    marine
      support service industry trends as well as world-class marketing
      and

    managerial
      skills;

    

    (c)
      other
      responsibilities as may be agreed upon by the Parties from time to

    time;
      and

    

    (d)
      in
      support COSL’s desire to include the accounts of the Company in the

    consolidated
      accounts of COSL or its Affiliates in accordance with Hong Kong

    GAAP,
      effect a change to the pro
      rata shareholding
      of the Company, such that COSL

    shall
      subscribe for five hundred and ten thousand (510,000) Shares, and Trico
      shall

    subscribe
      for four hundred ninety thousand (490,000) Shares, representing 51%
      and

    49%
      of
      the issued and outstanding Shares, respectively.

    

    7.3
       Compliance
      with Law.
      All of
      the activities of the Company shall comply

    with
      applicable Hong Kong Law, provided,
      however,
      that
      nothing in this Agreement shall be

    deemed
      to
      require Trico or any person appointed or nominated by Trico pursuant to
      this

    Agreement
      to violate any law or regulation applicable to Trico or such appointee or
      nominee.

    For
      the
      purposes of this Section, Trico shall include any Affiliate of Trico as well
      as
      the

    directors,
      officers, employees and agents of Trico and its affiliates.

    

    7.4
       Company’s
      Indemnity Obligation.
      The
      liability of each of the Shareholders

    in
      respect of the Company shall be limited to the amount, if any, unpaid on the
      Shares

    respectively
      held by them. The creditors of the Company shall have recourse only to
      the

    assets
      of
      the Company and shall have no right to claim compensation or seek other
      remedies

    from
      the
      Shareholders. The Company shall indemnify any of the Major Shareholders
      against

    any
      and
      all losses, damages or liability suffered by such Major Shareholder in respect
      of

    third-party
      claims against such Major Shareholder arising out of the operation of the
      Company. 

    Subject
      to the foregoing, the Shareholders will share the profits, risks and
      losses

    of
      the
      Company proportionately to their respective shareholding
      percentages.

    

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    7.5  Tax
      and Other Preferences.
      If,
      during the term of this Agreement, Hong

    Kong,
      PRC
      or any subdivision or agency thereof, issues, amends, supplements or
      rescinds

    any
      tax,
      foreign exchange or other laws, rules, regulations or decrees which result
      in

    treatment
      that is more favorable to the Company or any Major Shareholder than the terms
      of

    this
      Agreement and the laws, rules, regulations and decrees applicable to the Company
      as of

    the
      date
      of this Agreement, the Company and/or the Major Shareholders shall each use
      its
      or

    their
      reasonable efforts to apply for and obtain, upon approval of such application
      (if

    necessary),
      the benefits of such preferential treatment.

    

    7.6  Preservation
      of Economic Benefits.
      If,
      during the term of this Agreement, a

    Major
      Shareholder’s economic benefits under this Agreement are directly or
      indirectly

    (through
      its interest in the Company) materially and adversely affected because of any
      tax,

    foreign
      exchange or other laws, rules, regulations or decrees, or any amendment
      or

    supplement
      to or rescission of the same by the government of Hong Kong, PRC or
      any

    subdivision
      or agency thereof, the Parties shall consult promptly upon notice of such
      effect

    and
      shall
      make any and all necessary amendments to the relevant provisions of
      this

    Agreement
      in order to maintain in all material respects such Major Shareholder’s
      economic

    benefits
      hereunder. The Parties shall use their reasonable efforts to have the
      amendments

    approved
      by the appropriate approval authority, if such approval is required under
      applicable

    Law
      in
      effect at that time.

    

    7.7
      Costs
      and Expenses.
      Each of
      the Shareholders shall bear its own costs in

    connection
      with the performance of its respective undertakings as set forth
      above.

    

    ARTICLE
      VIII COVENANT NOT TO COMPETE

    

    8.1  Competition.

     

        (a)
      Each of
      the Shareholders recognizes that it will derive substantial economic
      benefit 

    from
      the
      Company’s successful development and provision of the Services, and in
      consideration

     thereof
      has voluntarily agreed to the covenants set forth in this Section 8.1. Each
      of
      the Shareholders 

    further
      acknowledges and agrees that the limitations and restrictions set forth herein
      are reasonable and not 

    oppressive
      and are material and substantial parts of this Agreement intended to protect
      the
      Parties’ 

    substantial
      and legitimate business interests with respect to the Services and the
      Company.

    

        In
      view of
      the foregoing and subject to Section 8.2, the Shareholders hereby

        covenant
      and
      agree that none of them will engage in, or permit their respective

        Affiliates
      to
      engage in, any of the Services within the Territory. Specifically, none
      of

        them
      shall,
      nor shall they permit any of their Affiliates to:

    

    (i)
       at
      any
      time from the Closing Date until the

    expiration
      of five (5) years from the date such Shareholder ceases to

    hold
      a
      beneficial interest in any Shares, directly or indirectly, for
      itself

    or
      on
      behalf of or in conjunction with any other Person or business of

    whatever
      nature, engage or participate in any business similar to, or competing

    with
      the
      business of the Company (either directly orindirectly) in the
      Territory;

    

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    (ii) 
      at any
      time from the Closing Date until the

    expiration
      of five (5) years from the date such Shareholder ceases to

    hold
      a
      beneficial interest in any Shares, appropriate, or fail to promptly

    notify
      and turn over to the Company, any business opportunity relating

    to
      or
      arising in connection with the business of the Company and/or the

    provision
      of Services, or engage in any activity that is detrimental to

    the
      Company’s business or that limits the Company’s ability to fully

    exploit
      such business opportunities or prevents the benefits of such

    business
      opportunities from accruing to the Company and the Major

    Shareholders;
      or

    

    (iii)
       at
      any
      time from the Closing Date until the

    expiration
      of two (2) years from the date it ceases to hold a beneficial

    interest
      in any Shares, directly or indirectly, for itself or on behalf of
      or

    in
      conjunction with any other Person or business of whatever nature,

    solicit,
      interfere with or endeavor to entice away from the Company

    any
      customer, employee, subcontractor or consultant of the Company.

    

    (b)
       The
      Company, Trico and COSL further acknowledge and agree that the

    Company,
      at any time from the Closing Date, shall not, with respect to (A) COSL
      and

    its
      traditional marine services business in China, or (B) Trico and its
      traditional

    marine
      services business outside of the Territory:

    

    (i) 
      either
      directly or indirectly, engage or participate in many business similar to,
      

    or
      competing with, such Major Shareholder’s traditional marine services business
      i

    n
      its
      respective territory; or

    

    (ii)
       appropriate,
      or fail to promptly notify and turn over to such Major Shareholder, any

    business
      opportunity relating to or arising in connection with the traditional marine
      services

     business
      of such Major Shareholder in its respective territory and/or the provision
      of
      Services, 

    or
      engage
      in any activity that is detrimental to such Major Shareholder’s
      traditional marine services 

    business
      in its respective territory or that limits such Major Shareholder’s ability to
      fully exploit

     such
      business opportunities or prevents the benefits of such business opportunities
      from accruing 

    to
      such
      Major Shareholder.

    

    Notwithstanding
      the foregoing, the Company shall be permitted to take the actions specified
      in Sections 8.1(b)(i) 

    and/or
      (ii) if the Company receives the prior approval in writing of such Major
      Shareholder’s management prior 

    to
      commencement of such

    actions.

    

    8.2
       Separate
      Agreement.
      The
      covenants set forth in Section 8.1 above are

    severable
      and separate, and the unenforceability of any specific covenant shall not affect
      the

    provisions
      of any other covenant. Moreover, in the event any court of competent
      jurisdiction

    shall
      determine that the scope, time or territorial restrictions set forth are
      unreasonable, then it

    is
      the
      intention of the Parties that such restrictions be enforced to the fullest
      extent which the

    court
      deems reasonable, and this Agreement shall thereby be reformed.

    

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    ARTICLE
      IX REPRESENTATIONS AND WARRANTIES

    

    9.1
       Each
      of
      the Parties represents and warrants to the others as follows:

    

    (a)
      Due
      Organization and Existence; Corporate Power. It is a duly formed
      and

    validly
      existing legal entity under the laws of the jurisdiction of its establishment.
      It has

    complied
      with all its legal and statutory obligations and has all legal capacity and
      corporate

    power
      under its constitutive documents to execute and deliver this Agreement and
      perform its

    obligations
      under this Agreement.

    

        (b)
      Execution
      and Delivery of Agreement. The execution of this Agreement by

    its
      undersigned representative and the delivery and performance by it of this
      Agreement:

     

        (i)
       have
      been
      duly authorized by all necessary corporate actions and legal

        actions;

    

        (ii)
       do
      not
      and shall not result in the breach of, or constitute a default

        under,
      or
      require the consent under, its constitutive documents or any

        indenture,
      bank loan or credit arrangement, mortgage, or other agreement or

        instrument
      to
      which it is a party or by which it or any of its properties may be

        bound
      or
      affected; and

    

        (iii)
       do
      not
      require any consent, approval, authorization, or other order of,

        or
      action by,
      any Authority or any other third party, other than such consents,

        approvals,
      authorizations, orders and actions as have been obtained by it on
      or

        prior
      to the
      date hereof, which remain in full force and effect on the date

        hereof.

    
(c)  Binding
      Agreement.
      This
      Agreement, when duly executed and delivered by

    the
      Parties, shall constitute its valid, binding and enforceable obligation in
      accordance with

    its
      terms.

    

    9.2
       Trico
      Vessels.

    

    (a)
      COSL
      hereby acknowledges and agrees that it has been provided with a

    copy
      of
      the third party appraisal prepared for Trico by an independent third
      party

    valuation
      firm and agrees that the valuation of the Trico Vessels provided in
      such

    third
      party appraisal is acceptable.

    

    (b)
      COSL
      hereby acknowledges that the
      Trico
      Vessels are being assigned to

    the
      Company “as is”, “where is” and with “all faults” but free from
      Encumbrances.

    Notwithstanding
      foregoing, Trico shall warrant that at the time the Trico Vessels
      are

    contributed
      to the Company in accordance with the terms of this Agreement, all of
      the

    equipment
      on board each Trico Vessel, as set forth in Annex 6, shall be in
      working

    condition.
      Other than as expressly set forth in this Agreement, Trico disclaims any

    representations
       or
      warranties as to the value or condition of the Trico Vessels or
      their

    suitability
      for any particular purpose.

    

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    ARTICLE
      X PERSONNEL AND LABOR MANAGEMENT

    

    10.1
       Employees;
      Hiring.
      The
      recruitment, dismissal, compensation, labor

    insurance,
      welfare benefits, rewards, penalties and other matters relating to the employees
      of

    the
      Company shall be conducted in accordance with the plans formulated by the Board
      and

    applicable
      Law. The Board may, in its discretion, delegate decisions on employee and
      labor

    matters
      to the Chief Executive Officer and the Chief Operating Officer.

    

    10.2  Senior
      Management.
      The
      appointment and compensation of the Chief

    Executive
      Officer, Chief Operating Officer, Executive Vice President, and Chief
      Financial

    Officer
      shall be decided by the Board on the basis of their respective positions and
      duties and

    set
      forth
      in contracts with the Company.

    

    10.3
       Expatriate
      Employees.
      Expatriate employees of the Company delegated

    from
      Trico or one of its subsidiaries shall receive salaries, welfare and other
      benefits from the

    Company
      equal to those paid to comparable personnel of Trico or its Affiliates outside
      the

    PRC,
      plus
      foreign living allowance as established by the majority of the Board.
      Such

    salaries,
      welfare and other benefits shall be paid in US Dollars in accordance with
      the

    provisions
      of this Agreement. Expatriate employees of the Company delegated from
      COSL

    or
      one of
      its subsidiaries shall receive salaries, welfare, living allowance and other
      benefits

    not
      less
      favourable than that from Trico.

    

    ARTICLE
      XI DIVIDENDS

    

    11.1
       Dividends.
      The
      Board may declare and pay dividends in such amounts as the

    Board
      determines to be appropriate having regard to the Company’s financial condition
      and

    its
      current and projected cash requirements. Dividend distribution will be made
      to

    Shareholders
      according to their respective pro
      rata ownership
      percentage of the Shares of the

    Company.
      Dividends may be paid in cash or cash equivalents, in the Company’s own
      shares

    or
      other
      form as the Board deems appropriate. Cash dividend distributions to Trico,
      if
      any,

    will
      be
      made in U.S. Dollars and, unless Trico instructs otherwise, will be remitted
      to
      an

    account
      or accounts designated by Trico. Cash dividend distributions to COSL (including
      any

    distribution
      to be made upon a liquidation of the Company), if any, will be made in U.S.
      Dollars a

    nd
      will
      be paid to an account or accounts designated by COSL.

    

    At
      the
      Board’s discretion, the Company may pre-distribute available profits
      as

    dividends
      to the Shareholders quarterly each year, with the final statement at the end
      of
      each

    year.

    

    11.2
       Reserves.
      Prior to
      payment of any dividend, the Board, by resolution, may

    make
      allocations for a reserve fund out of the Company’s surplus or designate or
      allocate any

    part
      or
      all of such surplus in any manner for any
      proper
      purpose or purposes, and, subject to

    the
      provisions of applicable Law and the Organizational Documents, may increase,
      create, or

    abolish
      any such reserve, designation, or allocation in the same manner.

    

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    11.3
       Prior
      Year Losses.
      The
      Company may not distribute a dividend until the

    losses
      of
      the previous fiscal year have been recouped. Dividends not distributed in any
      fiscal

    year
      may
      be distributed together with the profits of the current fiscal
      year.

    ARTICLE
      XII TAXATION

     

    12.1
       Tax
      Matters.
      The
      Company shall pay taxes in accordance with applicable

    Law.
      The
      Company, the Shareholders and all of their personnel shall obtain the benefits
      of

    all
      tax
      exemptions, reductions, privileges and preferences that are now, or in the
      future

    become,
      obtainable under applicable Law and under any applicable treaties or
      bilateral

    arrangements
      to which Hong Kong is now or in the future becomes a party.

    

    ARTICLE
      XIII

    FINANCE,
      ACCOUNTING AND AUDITING

    13.1
       Books
      and Records.
      The
      Company will adopt an accounting system which

    uses
      accruals, debits and credits, and which is consistent with GAAP and Hong Kong
      GAAP

    and
      will
      maintain, or cause to be maintained, proper and complete records and books
      of

    account
      in accordance with the requirements of the Act and other applicable Law.
      Such

    books
      and
      records shall accurately and fairly reflect, in reasonable detail, all of
      the

    Company’s
      transactions and shall be denominated in U.S. Dollars. The books will be open
      to

    inspection
      by any Shareholder, or the representative of any Shareholder, designated in
      writing 

    by
      such
      Shareholder, at the principal executive office of the Company during normal
      business

     hours
      on reasonable written notice. The records shall include quarterly unaudited
      financial reports 

    prepared
      in accordance with both GAAP and Hong Kong GAAP by or under the supervision
      of
      the 

    Company’s
      Chief Financial Officer, which shall be furnished to each of the
      Shareholders.

    

    13.2
      Fiscal
      Year.
      The
      fiscal year of the Company will be from January 1 to

    December
      31 or such other periods as the Board of Directors shall designate from time
      to

    time.

    

    13.3
      Audited
      Accounts; Auditors.
      The
      Board shall retain one or more of the Big

    4
      to
      conduct annual audits of the accounts of the Company, which audits shall be
      completed

    no
      later
      than three (3) months following the close of each fiscal year. All such audits
      shall be

    conducted
      in accordance with GAAP and Hong Kong GAAP. The auditors shall submit
      such

    other
      audit reports as the Chief Executive Officer, the Chief Financial Officer or
      the
      Board

    may
      request from time to time.

    

    13.4
      Interim
      Accounts.
      Within
      30 days after the end of each quarter, the Chief

    Executive
      Officer shall provide the Major Shareholders with financial statements of
      the

    Company
      prepared by the Chief Financial Officer for the previous quarter. On or prior
      to

    March
      31,
      the Chief Executive
      Officer
      and the Chief Financial Officer shall, with the

    assistance
      of the Company’s auditors, prepare the previous year’s balance sheet, cash
      flow

    statements,
      profit and loss statement and recommendation for profit distribution, and
      submit

    them
      to
      the Board for examination and approval, and after examination and approval
      by
      the

    Board,
      deliver them to the Major Shareholders.

    

    13.5
       Inspection
      by Shareholder-Appointed Auditor.
      Any
      Major Shareholder

    shall
      have the right to retain independent certified public accountants or auditors
      to
      examine

    the
      records of the Company annually or at any time at the expense of such Major
      Shareholders. 

    Such
      Major Shareholder shall report the results to the other Major Shareholder.
      If the results of 

    any
      such
      audit are materially different (by five percent (5%) or more
      of
      net income) from that 

    conducted
      by the Company’s auditor and are accepted by the Board,
      the expense of such

     audit
      shall be borne by the Company.

    

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    13.6
       Bank
      Accounts.
      The
      Company shall maintain accounts in its own name in

    one
      or
      more banks or other institutional depositories selected by the Board and the
      cash funds

    of
      the
      Company shall be kept in such accounts. The funds in such accounts shall
      be

    withdrawn
      only on the signatures of any Person or Persons designated in writing by,
      or

    pursuant
      to the written instructions of, the Board. Funds of the Company will not
      be

    commingled
      with funds of any other Person.

    

    13.7
      Tax
      Matters.
      The
      Company shall take any and all reasonable action required

    to
      assist
      COSL and/or Trico to complete their income tax reporting requirements, so long
      as

    such
      actions do not in any case adversely affect or create any additional obligations
      for the

    Company.

    

    ARTICLE
      XIV TERM AND TERMINATION

    

    14.1
      Term;
      Effectiveness

    

    (a)
      This
      Agreement shall become effective immediately upon the signature of

    each
      Party’s authorized representative; provided,
      however,
      that
      neither Trico nor

    COSL
      shall have any obligation to make its respective Capital Contribution or
      to

    consummate
      the transactions contemplated under this Agreement until each of
      them

    shall
      have provided written notice to the other confirming that such notifying
      Party’s

    board
      of
      directors or other appropriate organ of corporate authority has approved
      the

    execution,
      delivery and performance by such Party of this Agreement; and further

    provided
      that
      the
      Parties’ respective board of directors or other appropriate organ
      of

    corporate
      authority shall have the right to make reasonable comments regarding
      the

    Agreement.

    

    (b)
      Each
      of COSL and Trico will use reasonable efforts to obtain such

    approval
      from its respective board of directors or other appropriate organ of
      corporate

    authority
      no later than 40 days following the date of this Agreement. In the event
      that

    such
      approvals are not obtained by such date, either Party may terminate
      this

    Agreement
      upon five (5) days’ prior notice to the other Party.

    

    (c)
      This
      Agreement shall continue in effect for as long as either of the
      Major

    Shareholders
      (or their successors or assigns) owns any Shares, unless this
      Agreement

    is
      earlier terminated upon the mutual written agreement of the Shareholders
      or

    pursuant
      to its terms.

    

    14.2
      Project
      Start-up.
      Prior to
      the Closing Date, a team comprising a director of

    the
      Board
      nominated by COSL, a director of the Board nominated by Trico, a senior
      officer

    nominated
      by COSL and a senior officer nominated by Trico shall be established
      (the

    “Project
      Start-up Team”)
      for
      development and establishment of the Company including

    proposing
      Project Start-up Costs and approving the transfer of money in an expense
      account

    to
      pay
      Project Start-up Costs pursuant to Section 3.5. Trico agrees that within 20
      days
      of the

    date
      of
      this Agreement it shall provide the Company and the Project Start-up Team
      updated

    information
      and evaluation of the market for the Services in the Southeast Asia
      market.

    

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    14.3
      Termination.
      This
      Agreement may be terminated and the Company

    dissolved
      upon the unanimous approval of the Board. The Parties agree that upon
      the

    occurrence
      of any of the following events, and upon receipt of a written request from
      a
      Major

    Shareholder,
      the other Major Shareholder will cause its respective Directors to vote
      to

    terminate
      this Agreement and to dissolve the Company; provided,
      however,
      that no
      Major

    Shareholder
      shall have the right to terminate this Agreement as the result of any
      occurrence

    or
      event
      listed below to the extent same shall have been caused by any action or omission
      of

    such
      Major Shareholder, or its Affiliates:

    

    (a)
      Inability of the Company to continue operations due to heavy
      losses;

    

    (b)
      Inability of the Company to continue operations due to the failure of
      a

    Shareholder
      to perform its obligations under this Agreement;

    

    (c)
      A
      material breach by any Party of its obligations under this
      Agreement,

    which
      breach cannot timely be remedied to the reasonable satisfaction of the
      nonbreaching

    Parties;

    

    (d)
      If,
      after the execution of this Agreement, any Major Shareholder’s
      rights

    under
      this Agreement are adversely and materially affected by any event,
      including

    the
      promulgation of any new laws, regulations or other actions of a government
      office

    in
      Hong
      Kong or the PRC restricting or otherwise adversely affecting the rights of
      the

    Company
      or any Major Shareholder under this Agreement, and the Parties fail
      to

    reach
      an
      agreement on the steps to take to prevent the adverse effects after
      having

    consulted
      with each other and made efforts to make any adjustment necessary
      to

    maintain
      each Major Shareholder’s rights under this Agreement;

    

    (e)
      Mutual agreement of the Parties hereto because of an event of Force

    Majeure;

    

    (f)
      Any
      Major Shareholder is adjudicated insolvent or bankrupt; or

    

    (g)
      Other
      situations determined by a unanimous vote of the Board.

    

    14.4
       Continued
      Operation.
      Upon the
      occurrence of any of the events listed in

    Section
      14.3 above and the written request of one of the Major Shareholders to dissolve
      and

    terminate
      the Company, the Parties shall have 30 days from the receipt of such
      termination

    request
      to unanimously agree to continue the operation of the Company, provided the
      Parties

    have
      agreed upon such revisions or amendments to the Organizational Documents and
      this

    Agreement.

    

    14.5
       Liability.
      Unless
      otherwise agreed by the Parties the termination of this

    Agreement
      shall not relieve the Shareholders or the Company from liability for
      nonperformance

     of
      obligations which have accrued hereunder prior to the date of such

    termination.

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    

    ARTICLE
      XV MANDATORY BUY-SELL

    

    15.1
       Remedies.
      Either
      Major Shareholder may elect a remedy set forth in Section

    15.2
      upon
      the occurrence of a Business Dispute that is not resolved pursuant to Section
      5.8;

    provided
      that the failure to resolve such Business Dispute constitutes or will constitute
      or

    result
      in
      a Material Adverse Effect.

    

    15.2
      Notice.
      A Major
      Shareholder may, within ten (10) days of the conclusion of

    the
      procedures set forth in Section 5.8(b), give notice to the other Major
      Shareholder. The

    notice
      must specify one of the following alternatives: (a) dissolution and termination
      of the

    Company
      in accordance with Article XVI; or (b) initiation of the sale of its Shares
      or
      the

    purchase
      of the other Party’s Shares by giving the notice specified in Section 15.3. If
      both

    Major
      Shareholders give notices within that time period, the notice given first
      prevails.

    

    15.3
      Mandatory
      Offer.
      Either
      Major Shareholder (the “Offeror”)
      may
      give 

    written
      notice (the “Mandatory
      Offer”)
      to the
      other Major Shareholder (the “Offeree”),

    stating
      that the Offeror offers unconditionally at the option of the Offeree both:
      (a)
      to

    purchase
      all of the Shares of the Offeree, and (b) to sell all of the Shares of the
      Offeror to the

    Offeree,
      in each case with the same purchase price specified per Share.

    

    15.4
      Financing;
      Terms.
      The
      Mandatory Offer will be accompanied by one or

    more
      binding written commitments from substantial and reputable financial
      institutions to

    provide
      the purchasing Party with funds sufficient to purchase all of the Shares,
      subject only

    to
      conditions that are customary in such commitments and that are reasonably likely
      to be

    satisfied.

     

    The
      Mandatory Offer will be irrevocable by the Offeror until the earlier of (a)
      the

    Buy-Sell
      Closing Date or (b) the date on which the Offeree elects to purchase the
      Offeror’s

    Shares
      pursuant to Section 15.5(ii). The Mandatory Offer will not have any other
      terms,

    except
      that (i) the purchase may be made by a wholly-owned subsidiary or other designee
      of

    the
      purchasing Party (and any reference to the purchasing Party will also be a
      reference to

    any
      such
      subsidiary or other designee, as applicable), and (ii) the purchasing Party
      will

    undertake
      to (A) assume at the Buy-Sell Closing Date all obligations of the selling Party
      to

    third
      parties in connection with the selling Party’s Shares (with a corresponding
      reduction in

    the
      purchase price); and (B) to use reasonable efforts to obtain the release of
      the
      selling Party

    from
      such
      known obligations between the date of the Mandatory Offer and the
      Buy-Sell

    Closing
      Date. Each Party further agrees to direct its representatives on the Board
      to
      consent

    to
      the
      sale of the Shares from by the selling Party to the purchasing
      Party.

    

    15.5
       Offeree
      Response Notice.
      At any
      time during the 30 days following receipt

    of
      the
      Mandatory Offer, the Offeree may give the Offeror a written notice electing
      either to:

    (i)
      sell
      all of the Shares of the Offeree; or (ii) buy all of the Shares of the Offeror
      (in which

    case
      the
      Offeree’s notice must be accompanied by the binding written commitments
      from

    substantial
      and reputable financial institutions required by Section 15.4); in either case
      upon

    the
      terms
      in this Article 15 and otherwise as set out in the Mandatory Offer.

    

    If
      the
      Offeree fails to give the notice within the 30-day period, or if the
      Offeree’s

    notice
      is
      not accompanied by the binding written commitments from substantial and
      reputable

     financial
      institutions required by Section 15.4, then it will be conclusively deemed
      to
      have 

    accepted
      the Mandatory Offer of the Offeror to purchase the Offeree’s Shares pursuant to

    Section
      15.3(a) in accordance with the terms of the Mandatory Offer.

    

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    15.6
       Buy-Sell
      Closing.
      The
      closing (the “Buy-Sell
      Closing”)
      of the
      purchase and

    sale
      will
      take place on the 60th day following the date on which the Mandatory Offer
      under

    Section
      15.3 is given, or, if that day is not a Business Day, on the next following
      Business

    Day
      (the
“Buy-Sell
      Closing Date”).
      The
      Buy-Sell Closing Date will be extended to the

    extent
      necessary for either Party to secure any required governmental approval or
      consent so

    long
      as
      that Party is using its reasonable efforts to pursue the approval or consent
      and
      every

    30
      days
      during the extension delivers to the other Party a certificate that approval
      is
      being so

    pursued.
      The Buy-Sell Closing will take place at 11:00 am on the Buy-Sell Closing Date
      at

    the
      offices of the attorneys for the Company (or, if there are none, at the offices
      of the

    attorneys
      for the selling Party).

    

    15.7
       Buy-Sell
      Closing Deliveries.
      At the
      Buy-Sell Closing, the purchasing Party

    will
      pay
      the purchase price for the selling Party’s Shares in immediately available
      funds, and

    the
      selling Party will deliver the following executed documentation, in form and
      substance

    reasonably
      acceptable to the purchasing Party: (i) an assignment of the selling Party’s
      Shares;

    (ii)
      the
      resignation of each of its designees who are acting as directors on the Board
      or

    officers
      of the Company; (iii) a general release of all claims against the Company and
      the

    purchasing
      Party relating to Company matters; and (iv) such other documentation as
      the

    purchasing
      Party may reasonably require in order to vest in the purchasing Party or
      its

    designee
      full right, title and interest in and to the Shares of the selling
      Party.

    

    15.8
      Default
      of Purchasing Party.
      If the
      purchasing Party defaults in any of its

    closing
      obligations, the selling Party will have the option to purchase all of the
      purchasing

    Party’s
      Shares at a price for each Share of the purchasing Party that is 75% of the
      purchase

    price
      for
      each Share that would have been payable on the original Buy-Sell Closing.
      The

    option
      is
      to be exercised by notice to the purchasing Party not later than 60 days after
      the

    original
      Buy-Sell Closing Date. The new Buy-Sell Closing will occur at a date and
      time

    reasonably
      designated in the notice, which date will not be later than 90 days after the
      notice.

    If
      the
      selling Party exercises its option provided in the preceding sentence, the
      selling Party

    will
      suffer damages as a consequence of such default; therefore, if a purchase is
      subject to

    this
      Section 15.8, the difference between the purchase price paid for the Shares
      of
      the

    purchasing
      Party pursuant to this Section 15.8 and the Fair Market Value of the Shares
      of
      the

    purchasing
      Party will be regarded for all purposes as liquidated damages and not as a
      penalty.

    

    For
      purposes of this Section 15.8, “Fair Market Value” and “Fair Market Value of
      the

    Company”
      are each the highest price available for the Company in an open and
      unrestricted

    market
      between informed, prudent Persons, acting at arms’ length and under no
      compulsion

    to
      act,
      expressed in terms of money or money’s worth and will disregard any value that
      might

    be
      assigned by a purchaser with a special interest. The Fair Market Value of a
      Party’s Shares

    is
      the
      amount determined by multiplying (a) the Fair Market Value of the Company by
      (b)
      a

    number,
      the numerator of which equals the number of Shares held by the Party and
      the

    denominator
      of which equals the total number of Shares issued and outstanding.

    

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    ARTICLE
      XVI LIQUIDATION; BUYOUT RIGHT

    

    16.1
       Liquidation.
      The
      assets of the Company shall be liquidated and the Company

    dissolved
      in accordance with the Act and applicable Hong Kong Law: (i) upon
      the

    termination
      of this Agreement or (ii) if the Company is adjudicated insolvent or
      bankrupt.

    

    16.2
       Liquidation
      Committee.
      The
      liquidation of the Company shall be carried out

    by
      a
      committee (the “Liquidation
      Committee”),
      which
      shall be appointed by the Board and

    shall
      comprise at least one of each Major Shareholder’s appointed Directors and/or
      other

    qualified
      persons. The Liquidation Committee shall have the power and authority to
      represent

    the
      Company in all legal matters concerning the liquidation and will be responsible
      for the

    valuation
      and liquidation of the Company’s assets in accordance with applicable Hong
      Kong

    Law
      and
      the principles set forth in this Agreement. The Liquidation Committee shall
      use
      best

    endeavors
      to realize, upon the sale of all of the assets of the Company, the going
      concern

    value
      of
      the Company based upon the actual circumstances of the Company, taking
      into

    account
      the market value of companies in similar industries and internationally
      accepted

    principles
      relevant to the determination of going concern value.

    

    16.3
       Buyout
      Right.
      Upon
      any termination of this Agreement arising from a

    default
      committed by a Major Shareholder, the Major Shareholder who is not in
      default

    under
      any
      of its obligations pursuant to this Agreement shall have the right (the
“Buyout

    Right”)
      to
      purchase the Shares of the other Shareholders. The purchase price shall be
      an

    amount
      equal to the selling Shareholder’s pro
      rata Share
      ownership in the Company

    multiplied
      by the valuation of the Company as determined by an independent third
      party

    qualified
      to perform such activities to be appointed by the Major
      Shareholders.

    

    A
      Shareholder purchasing Shares pursuant to a Buyout Right shall pay the
      purchase

    price
      to
      the selling Shareholder within 90 days after the purchase price has been
      determined

    or
      after
      any requisite governmental approvals have been obtained, whichever date is
      later. If,

    for
      any
      reason, the buying Shareholder does not pay the purchase price in full within
      such 90-

    day
      period, then interest shall be paid thereafter upon the unpaid balance until
      the
      fully

    unpaid
      balance and accrued interest are paid. Such interest shall be calculated at
      the
      Interest

    Rate.

    

    In
      the
      event the non-selling Shareholder declines to purchase 100% of the
      other

    selling
      Shareholders’ Shares, the Liquidation Committee shall use its reasonable efforts
      to

    locate
      a
      purchaser for the Company. If no purchaser is found within ninety (90) days,
      then

    the
      Liquidation Committee shall proceed to sell the assets of the Company at a
      price
      not less

    than
      their then reasonable value as an on-going concern and, after deducting the
      expenses of

    the
      Liquidation Committee and any tax due on that portion of the equity of the
      Company that

    exceeds
      the Total Capital Contribution, shall distribute the net proceeds to each of
      the

    Shareholders
      pro-rata based on the ratio the Shares held by such Shareholder bears to
      the

    total
      number of issued and outstanding Shares of the Company.

    

    ARTICLE
      XVII INSURANCE

    

    The
      Company shall obtain and maintain insurance policies on various risks
      including

    but
      not
      limited to the machinery and industrial products for lease to third parties,
      with an

    insurance
      company or companies authorized to engage in the insurance business in
      Hong

    Kong.
      The
      insurance policies, value insured and the terms of insurance shall be decided
      by

    the
      Board.

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    

    ARTICLE
      XVIII DEFAULT

    

    18.1  Default.
      A
      Shareholder (the “Breaching
      Shareholder”)
      shall
      be in breach of

    this
      Agreement if it fails fully to perform, or suspends its performance of, any
      of
      its

    obligations
      under this Agreement and such failure or suspension is not corrected within
      45

    days
      of
      receipt of written notice of such breach from any other Shareholder (the
“Non-

    Breaching
      Shareholder”),
      or,
      if such failure or suspension cannot reasonably be corrected

    within
      45
      days of such notice, within such longer period as may reasonably be required
      to

    correct
      such failure or suspension, not to exceed 90 days from receipt of written notice
      of

    such
      breach from any Non-Breaching Shareholder.

    

    18.2
       Remedies
      for Default.
      Upon
      the occurrence of a breach of this Agreement

    and
      delivery of the written notice under the preceding Section 18.1, the
      Non-Breaching

    Shareholder
      or Shareholders may then request termination of this Agreement upon
      delivery

    of
      15
      days’ prior written notice to the Breaching Shareholder. The Breaching
      Shareholder

    shall
      indemnify the Company and the Non-breaching Shareholder for any loss, cost,
      liability

    and
      expense, including but not limited to, attorney’s fees, incurred as a result of
      such breach,

    together
      with interest thereon, from the date of the occurrence of such loss through
      the
      date of 

    payment,
      calculated at the Interest Rate.

    

    ARTICLE
      XIX FORCE MAJEURE

    

    19.1
       Force
      Majeure.
      Should
      any Party be prevented from performing in whole or

    in
      part
      its obligations under this Agreement (other than any obligation to pay money)
      due to

    an
      event
      of Force Majeure, the affected Party shall promptly notify the other Parties
      in

    writing,
      providing in writing a detailed description of such event of Force Majeure,
      the
      reason 

    for
      its
      inability to perform or its delay in performance, the anticipated duration
      of
      such event of 

    Force
      Majeure or the effect thereof, and the actions required by the affected Party
      to

    correct
      the problems caused by such event of Force Majeure. A Party so affected by
      Force

    Majeure
      shall use every reasonable effort to minimize the effects of Force Majeure
      upon
      the

    performance
      of this Agreement and shall promptly resume performance as soon as reasonably
      

    possible
      after removal of the circumstances of Force Majeure.

    

    19.2
       Suspension
      of Obligations.
      If an
      event of Force Majeure occurs, to the extent

    that
      the
      affected Party is unable to timely perform its obligations hereunder, such
      Party
      may

     suspend
      all or part of the performance of its obligations hereunder, provided
      that:

     

    (a)
      such
      suspension shall be of no greater scope and no longer duration than
      isreasonably
      required

     to
      correct any deficiencies of performance caused by the event of Force
      Majeure; and

     

     (b)
      such suspension  of
      performance shall not include any Party’s obligations with
      respect to

     its
      Capital Contribution, financing, and
      other
      payment obligations.

    

    ARTICLE
      XX

    GOVERNING
      LAW; DISPUTE RESOLUTION

    

    20.1
       Governing
      Law.
      This
      Agreement, its validity, interpretation, execution and

    the
      rights and obligations of the Parties, and the settlement of any disputes,
      hereunder shall be 

    governed
      by and construed in accordance with the provisions of this Agreement, which
      shall be 

    construed
      to give maximum effect to the intent of the Parties expressed herein, and to
      the
      extent not

     addressed
      by the provisions of this Agreement, by the published and Publicly available
      laws of 

    Hong
      Kong. In the event of any Dispute to be settled through arbitration in
accordance
      with Section 20.2, 

    the
      Tribunal shall decide the Dispute in accordance first with this
      Agreement and then by reference to the 

    governing
      law or international practice, except to the
      extent that some provision of the governing law would 

    invalidate
      or limit the effectiveness
      of any of the provisions of this Agreement.

    

    20.2
       Dispute
      Resolution.
      Any
      Dispute shall, upon the written request (a

    “Request”)
      of any
      Party, be settled through friendly consultation among the Parties. In
      the

    event
      that a Dispute is not resolved through consultation within thirty (30) days
      of
      the receipt

    of
      the
      Request, at the request of any Party, such Dispute shall be finally settled
      by
      arbitration

    in
      accordance with the rules (“Rules”)
      of the
      ICC International Court of Arbitration (the

    “ICC”)
      then
      in effect. The arbitration venue shall be Hong Kong International
      Arbitration

    Centre.
      The
      arbitration shall be conducted in, and the award shall be rendered in, the
      English

    language,
      and documents and evidence shall be submitted by the Parties in their
      original

    language,
      subject to the Tribunal’s authority to order appropriate translations.

     

        (a)
      Selection
      of Arbitral Tribunal.
      The
      Tribunal shall be composed of three (3)arbitrators. 

    In
      the
      request for arbitration, the Party requesting arbitration (the

    “Claimant”)
      shall
      nominate one (1) arbitrator. The Party named as respondent by the

    Claimant
      (the “Respondent”)
      shall
      nominate one (1) arbitrator within the time period

    specified
      in the Rules. The two arbitrators nominated by the Claimant and the

    Respondent
      shall together nominate the third and presiding arbitrator of the
      Tribunal,

    who
      shall
      be of a different nationality than the Parties. If within the time
      limits

    established
      in the Rules a Party fails to nominate an arbitrator or the
      arbitrators

    nominated
      by the Parties have not appointed the presiding arbitrator, such

    appointment
      shall be made by the ICC. Any replacement for an arbitrator shall
      be

    nominated
      by the Party originally entitled to make the relevant nomination.

     

        ( b)
Arbitration
      Award.
      The
      award shall be in writing, shall give reasons for
      the decisions 

    reached
      by the Tribunal and shall be signed and dated by the arbitrators,
      and a copy of the

     award
      shall be contemporaneously delivered to each of the Parties. The Party against
      which 

    an
      award
      assesses a monetary obligation or enters an injunctive or mandatory order shall
      pay

     that
      obligation or comply with that order on or before the 30th calendar day
      following the receipt 

    of
      the
      final, signed award or by such other date as the award may provide. The award
      shall be final 

    and
      binding on the Parties and may be confirmed in, and judgment upon the award
      entered by, any 

    court
      having jurisdiction over the Parties. The Tribunal’s award shall be entitled to
      all of
      the
      protections 

    and
      benefits of a final judgment as to any Dispute, including compulsory
      counterclaims, that were or could 

    have
      been
      presented to the Tribunal, and shall be final and binding on the Parties and
      non-appealable to the 

    maximum
      extent permitted by law. 

    

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    (c)
      Performance
      Pending Award.
      This
      Agreement and the rights and

    obligations
      of the Parties shall be fully performed pending the award in any arbitration
      proceeding hereunder.

    

    (d)
      Separability
      and Survival of Agreement to Arbitrate.
      The
      provisions of

    this
      Agreement to arbitrate are independent of the remaining provisions of the
      Agreement and

     the
      Parties intend that they shall continue in effect even though one or more
      provisions of this 

    Agreement
      shall be determined to be null or void. This Agreement to arbitrate shall also
      survive the 

    termination
      or expiration of this Agreement.

    

    20.3
       Waiver
      of Sovereign Immunity.
      Each of
      the Parties is subject to civil and

    commercial
      law with respect to its obligations under this Agreement, and the signing
      and

    performance
      of this Agreement by such Party constitute private and commercial acts
      rather

    than
      governmental and public acts. Each of the Parties irrevocably represents,
      warrants and

    agrees
      that this Agreement is a commercial rather than a public or governmental
      activity and

    that
      it
      is not entitled to claim immunity from legal proceedings with respect to itself
      or any of

    its
      assets on the grounds of sovereignty or otherwise under any law or in any
      jurisdiction

    where
      an
      action may be brought for the enforcement of any of the obligations arising
      under or

     relating
      to this Agreement. To the extent that any of the Parties or any of their assets
      has or hereafter
      

    may
      acquire any right to immunity from set-off, legal proceedings, attachment
      prior

    to
      judgment, other attachment or execution of judgment on the grounds of
      sovereignty or

    otherwise,
      such Party hereby irrevocably waives such rights to immunity in respect of
      its

    obligations
      arising under or relating to this Agreement.

    

    ARTICLE
      XXI MISCELLANEOUS

    

    21.1
       Notices.
      Except
      as expressly set forth to the contrary in this Agreement, all

    notices,
      requests or consents provided for or permitted to be given under this Agreement
      mus

    t
      be in
      writing in English and Chinese and must be delivered to the recipient in person,
      by

    courier,
      mail, or by facsimile. A notice, request or consent given under this Agreement
      is

    effective
      on receipt by the Party to which it is sent; provided, however, that a facsimile
      that is

    transmitted
      after the normal business hours of the recipient shall be deemed effective
      on
      the

    next
      Business Day. All notices, requests and consents to be sent to a Party must
      be
      sent to or

    made
      at
      the addresses given for that Party herebelow or such other address as that
      Party
      may

    specify
      by notice to the other Party. Whenever any notice is required to be given by
      law
      or

    this
      Agreement, a written waiver thereof, signed by the Person entitled to notice,
      whether

    before
      or
      after the time stated therein, shall be deemed equivalent to the giving of
      such
      notice.

    

    To
      Trico:

    

    Trico
      Marine Services (Hong Kong) Limited

    18/F
      Tung
      Ning Bldg, 249-253 Des Voeux Road

    Central,
      Hong Kong

    Attention:
      Company Secretary

    Telephone:
      +852 2541-0001

    Fax:
      +852
      2543-5698

    

    with
      a
      copy to:

    

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    Trico
      Marine Services

    2401
      Fountainview

    Suite
      920

    Houston,
      Texas 77057

    USA

    Attention:
      General Counsel

    Telephone:
      +1 713 780 9926

    Fax:
      +1
      713 780 0062

    

    To
      COSL:

    

    China
      Oilfield Services Limited

    P.O.
      Box
      232

    Beijing
      ,
      PRC 101149

    Attention:
      [ ]

    Telephone:
      +86 10 8452 1686

    Fax:
      +86
      10 8452 2133

    

    To
      the
      Company:

    

    [Name
      of
      Company]

    _______________

    _______________

    Hong
      Kong

    Attention:
      [ ]

    Telephone:
      +852 [ ]

    Fax:
      +852
      [ ]

    

    21.2
       Confidentiality.
      Each of
      the Parties acknowledges that from time to time

    prior
      to
      and during the term of this Agreement, a Party may have disclosed to any other
      Party

    confidential
      or proprietary information. The Party receiving such information shall,
      during

    the
      term
      of this Agreement, and for five (5) years thereafter not use such information
      for a

    purpose
      other than the performance of its obligations with respect to the Services
      or
      under

    this
      Agreement, maintain the confidentiality of such information and not disclose
      it
      to any

    other
      person or entity, except to such of their employees having a direct need to
      know
      in

    order
      to
      perform their responsibilities or except that such information becomes known
      other

    than
      by
      the breach of such Party under this Agreement or is required to be disclosed
      by

    applicable
      Law. Each Party shall take whatever steps are necessary to ensure that
      its

    Affiliates
      or its employees receiving such confidential or proprietary information
      comply

    with
      this
      provision.

    

    21.3 Entire
      Contract; Superseding Effect; Precedence.
      The
      Annexes are an

    integral
      part of this Agreement. This Agreement constitutes the final, complete and
      exclusive

    statement
      and expression of the agreement of the Parties relating to the subject matter
      hereof

    and
      the
      transactions contemplated hereby and supersedes all provisions and
      concepts

    contained
      in all prior contracts or agreements between the Parties or any of their
      Affiliates

    with
      respect to the subject matter hereof and the transactions contemplated hereby,
      whether

    oral
      or
      written. In the event of a conflict between the terms of this Agreement and
      the

    Organizational
      Documents, this Agreement shall prevail.

    

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    21.4
       Waiver;
      Modification.
      This
      Agreement may not be later modified except by

    a
      further
      writing signed by a duly authorized officer of each Party and no term of
      this

    Agreement
      may be waived except by writing signed by the Party waiving the benefit of
      such

    term.
      Any
      waiver or consent of any kind by any Party shall be effective only to the extent
      set

    forth
      in
      such writing and shall not operate or be construed as a waiver of or consent
      to
      a

    subsequent
      breach. Any delay or omission in exercising any right, power or remedy
      pursuant

    to
      a
      breach or default by a Party shall not impair any right, power or remedy that
      any other

    Party
      may
      have with respect to a future breach or default. No failure on the part of
      a
      Party to

    complain
      of any act or omission by another Party or to declare another Party in default
      with

    respect
      to its obligations hereunder, irrespective of how long that failure continues,
      shall

    constitute
      a waiver by such Party of its rights with respect to that default until the
      applicable

    statute
      of limitations period has expired.

    

    21.5
       Headings.
      The
      section and article headings contained in this Agreement are

    inserted
      for convenience or reference only and shall not affect the meaning or
      interpretation

    of
      this
      Agreement.

    

    21.6
       Binding
      Effect.
      This
      Agreement is binding on and shall inure to the benefit

    of
      the
      Parties and their respective successors and permitted assigns.

    

    21.7
       Severability.
      If any
      term or other provision of this Agreement or the

    application
      thereof to any Party or circumstance is held to be illegal, invalid or
      unenforceable

    to
      any
      extent, the remainder of this Agreement and the application of that provision
      to
      the

    other
      Parties or other circumstances shall not be affected thereby, and the Parties
      shall use

    reasonable
      endeavours to negotiate in good faith a replacement provision that is valid
      and

    enforceable
      and that puts the Parties in substantially the same economic, business and
      legal

    position
      as they would have been in if the original provision had been held legal, valid
      and

    enforceable.

    

    21.8
       Further
      Assurances.
      In
      connection with this Agreement and the transactions

    contemplated
      hereby, each Party shall execute and deliver any additional documents
      and

    instruments
      and perform any additional acts that may be necessary or appropriate
      to

    effectuate
      and perform the provisions of this Agreement and those
      transactions.

    

    21.9
       Counterparts.
      This
      Agreement may be executed in any number of

    counterparts
      by the Parties on separate counterparts, each of which when executed
      and

    delivered
      shall constitute an original, but all of which shall together constitute one
      and
      the

    same
      instrument.

    

    21.10
       Mutual
      Negotiation.
      This
      Agreement and the language contained herein

    have
      been
      arrived at by the mutual negotiation of the Parties. Accordingly, no
      provision

    hereof
      shall be construed against one Party or in favor of another Party by reason
      of

    draftsmanship.

    

    21.11
       Remedies
      Cumulative.
      The
      rights and remedies available under this

    Agreement
      or otherwise available will be cumulative of all other rights and remedies
      and
      may be exercised successively.

    

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

    21.12
       Consents;
      Authorizations.
      Each
      Party shall be responsible for obtaining all

    consents,
      authorizations, approvals and assurances of whatsoever nature necessary to
      enable

    it
      to
      comply with its obligations under this Agreement.

    

    21.13
       Time
      of the Essence.
      Time is
      of the essence in respect to the performance of

    all
      obligations of the Parties under this Agreement.

    

    21.14
       No
      Third Party Beneficiary.
      Nothing
      in this Agreement is intended, or shall

    be
      construed, to confer upon or give any person other than the Parties and their
      respective

    heirs,
      personal representatives, legal representatives, successors and assigns, any
      rights or

    remedies
      under or by reason of this Agreement.

    

    [Signature
      page follows]

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF, the Parties have caused this Agreement to be executed
      by

    their
      respective duly authorized signatories as of the date first written
      above.

    

    
      	
              [Name
                of JV Company]

            	
              Trico
                Marine Services (Hong Kong)

            
	
              By:
                _________________

            	
              By:
                _________________

            
	
              Name:

            	
              Name:

            
	
              Title:

            	
              Title:

            
	 	 
	 	
              China
                Oilfield Services Limited

            
	 	
              By:
                _________________

            
	 	
              Name:

            
	 	
              Title:

            
	 	 

    

    

    

    Signature
      page to COSL-Trico Marine Shareholders Agreement

    
      
        
        

      

      
        34

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