Document:

Contract for Construction and Sale of Drillship

 Exhibit 10.34 
 CONTRACT 
 FOR 

THE CONSTRUCTION AND SALE 
 OF DRILLSHIP 
 BY AND BETWEEN 

ALPHA EAGLE COMPANY 
 AS BUYER 
 AND 

DAEWOO SHIPBUILDING & MARINE ENGINEERING CO., LTD. 
 AS BUILDER 

 I N D E X 

 

					
		
	 ARTICLE I DESCRIPTION AND CLASS
	  	 	2	  
		
	 1. Definitions
	  	 	2	  
		
	 2. Certain Interpretive Provisions
	  	 	3	  
		
	 3. Description
	  	 	6	  
		
	 4. Dimensions and Characteristics
	  	 	6	  
		
	 5. Classification
	  	 	6	  
		
	 6. Rules and Regulations
	  	 	6	  
		
	 7. Subcontracting of Construction Work
	  	 	6	  
		
	 8. Registration
	  	 	6	  
		
	 9. Production Schedule and Erection Plan
	  	 	6	  
		
	 ARTICLE II CONTRACT PRICE AND TERMS OF PAYMENT
	  	 	8	  
		
	 1. Contract Price
	  	 	8	  
		
	 2. Currency
	  	 	8	  
		
	 3. Terms of Payment
	  	 	8	  
		
	 4. Method of Payment
	  	 	8	  
		
	 ARTICLE III ADJUSTMENT OF CONTRACT PRICE
	  	 	10	  
		
	 1. Delay in Delivery
	  	 	10	  
		
	 2. Shortfalls in Variable Load Capacity
	  	 	11	  
		
	 3. Insufficient Speed
	  	 	11	  
		
	 4. Conclusive Pecuniary Compensation
	  	 	11	  
		
	 ARTICLE IV APPROVAL OF PLANS AND DRAWINGS AND INSPECTION DURING CONSTRUCTION
	  	 	12	  
		
	 1. Approval of Plans and Drawings
	  	 	12	  
		
	 2. Appointment of Representative
	  	 	13	  
		
	 3. Inspection
	  	 	13	  
		
	 4. Facilities
	  	 	14	  
		
	 5. Liability of BUILDER and BUYER
	  	 	15	  
		
	 6. Responsibility of BUYER
	  	 	15	  
		
	 ARTICLE V MODIFICATIONS
	  	 	17	  
		
	 1. Modification of SPECIFICATIONS
	  	 	17	  
		
	 2. Change in Class and Statutory Requirements
	  	 	17	  
		
	 3. Substitution of Materials
	  	 	18	  
		
	 4. Adjustment to Contract Price and Delivery by MODIFICATIONS
	  	 	18	  
		
	 5. Payment for MODIFICATIONS
	  	 	19	  

					
		
	 ARTICLE VI SEA TRIAL
	  	 	20	  
		
	 1. Notices
	  	 	20	  
		
	 2. Weather Conditions
	  	 	20	  
		
	 3. How Conducted
	  	 	20	  
		
	 4. Method of Acceptance or Rejection
	  	 	21	  
		
	 5. Effect of Acceptance
	  	 	21	  
		
	 ARTICLE VII DELIVERY DATE AND DELIVERY
	  	 	22	  
		
	 1. Delivery
	  	 	22	  
		
	 2. Time and Place
	  	 	22	  
		
	 3. When and How Effected
	  	 	22	  
		
	 4. Documents to be Delivered to BUYER
	  	 	22	  
		
	 5. Title and Risk
	  	 	23	  
		
	 6. Removal of DRILLSHIP
	  	 	23	  
		
	 7. Tender of DRILLSHIP
	  	 	23	  
		
	 8. Delivery during Dispute
	  	 	24	  
		
	 ARTICLE VIII DELAYS AND EXTENSION OF TIME FOR DELIVERY (FORCE MAJEURE)
	  	 	25	  
		
	 1. Causes of Delay
	  	 	25	  
		
	 2. Definition of Permissible Delay
	  	 	25	  
		
	 3. Notice of Delay
	  	 	25	  
		
	 4. Right to Terminate CONTRACT for Excessive Delay
	  	 	25	  
		
	 ARTICLE IX WARRANTY OF QUALITY
	  	 	27	  
		
	 1. Guarantee
	  	 	27	  
		
	 2. Extent of BUILDER’s Responsibility
	  	 	27	  
		
	 3. Remedy of Defects
	  	 	27	  
		
	 4. Notice of Defects
	  	 	28	  
		
	 ARTICLE X REMEDIES OF BUYER
	  	 	29	  
		
	 1. Defaults of BUILDER
	  	 	29	  
		
	 2. Remedies
	  	 	29	  
		
	 3. Notice
	  	 	30	  
		
	 4. Refund by BUILDER
	  	 	30	  
		
	 5. Discharge of Obligations
	  	 	30	  
		
	 ARTICLE XI REMEDIES OF BUILDER
	  	 	31	  
		
	 1. Definition of Default
	  	 	31	  
		
	 2. Interest and Charges
	  	 	31	  
		
	 3. Effect of Default
	  	 	31	  
		
	 4. Sale of DRILLSHIP
	  	 	32	  
		
	 5. Remedies Cumulative
	  	 	33	  
		
	 ARTICLE XII INSURANCE
	  	 	34	  
		
	 1. Extent of Insurance Coverage
	  	 	34	  
		
	 2. Application of Recovered Amount
	  	 	34	  
		
	 3. Redelivery of BUYER’S SUPPLIES
	  	 	35	  
		
	 4. Termination of BUILDER’s Obligation to Insure
	  	 	35	  

					
		
	 ARTICLE XIII DISPUTES AND ARBITRATION
	  	 	36	  
		
	 1. Proceedings
	  	 	36	  
		
	 2. Alteration of Delivery of the DRILLSHIP
	  	 	37	  
		
	 3. Entry in Court
	  	 	37	  
		
	 ARTICLE XIV RIGHT OF ASSIGNMENT
	  	 	38	  
		
	 1. Assignment and Transfer
	  	 	38	  
		
	 2. Associated Costs
	  	 	38	  
		
	 3. Security Assignments
	  	 	38	  
		
	 4. Binding Nature
	  	 	38	  
		
	 ARTICLE XV TAXES AND DUTIES
	  	 	39	  
		
	 1. Taxes and Duties in Korea
	  	 	39	  
		
	 2. Taxes and Duties outside Korea
	  	 	39	  
		
	 ARTICLE XVI PATENTS, TRADEMARKS, COPYRIGHTS, ETC.
	  	 	40	  
		
	 1. Patents, Trademarks and Copyrights
	  	 	40	  
		
	 2. General Plans, Specifications and Working Drawings
	  	 	40	  
		
	 ARTICLE XVII BUYER’S SUPPLIES
	  	 	41	  
		
	 1. Responsibility of BUYER
	  	 	41	  
		
	 2. Responsibility of BUILDER
	  	 	41	  
		
	 3. Return of BUYER’S SUPPLIES
	  	 	42	  
		
	 ARTICLE XVIII REPRESENTATIVES
	  	 	43	  
		
	 1. BUYER’s REPRESENTATIVE
	  	 	43	  
		
	 2. BUILDER’s Representative
	  	 	43	  
		
	 ARTICLE XIX NOTICE AND LANGUAGE
	  	 	44	  
		
	 1. Notice
	  	 	44	  
		
	 2. Language
	  	 	44	  
		
	 3. Writing
	  	 	44	  
		
	 ARTICLE XX EFFECTIVE DATE OF CONTRACT
	  	 	45	  
		
	 ARTICLE XXI INTERPRETATION AND OTHER MATTERS
	  	 	46	  
		
	 1. Laws Applicable
	  	 	46	  
		
	 2. Discrepancies
	  	 	46	  
		
	 3. Entire Agreement
	  	 	46	  
		
	 4. Amendment
	  	 	46	  
		
	 5. Headings
	  	 	46	  
		
	 6. Severability
	  	 	46	  
		
	 7. Order of precedence of Contract Documents
	  	 	46	  
		
	 8. Confidentiality
	  	 	46	  

					
		
	 9. Public Announcements
	  	 	47	  
		
	 10. Foreign Corrupt Practices Act
	  	 	47	  
		
	 11. COUNTERPARTS
	  	 	48	  

 EXHIBIT A—IRREVOCABLE STAND-BY LETTER OF CREDIT (OPTIONAL) 

EXHIBIT B—SCHEDULE OF COMPENSATION LABOR, MATERIAL AND FACILITY UNIT PRICES FOR
                        VARIATION WORK 
 EXHIBIT C—PROTOCOL OF DELIVERY AND ACCEPTANCE 
 EXHIBIT D—PC SUM

 EXHIBIT E—AGREED MODIFICATIONS TO SPECIFICATIONS 

 CONTRACT 
 BY THIS CONTRACT made the ___ day of October 2011 by and between ALPHA EAGLE COMPANY, a corporation organized and existing under the laws of Cayman Islands and having its registered office at c/o Maples
Corporate Services Limited, P.O. Box 309GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands (“BUYER”), and DAEWOO SHIPBUILDING & MARINE ENGINEERING CO., LTD., a corporation organized and existing under
the laws of the Republic of Korea, having its principal office at 85, Da-dong, Jung-gu, Seoul, Korea (“BUILDER”). 
 IT IS AGREED AND
DECLARED as follows: 
 BUILDER agrees on a TURNKEY basis to design, construct, build, equip, launch, test, complete, commission and load all
BUYER’s equipment located at the SHIPYARD on the DELIVERY DATE one (1) DRILLSHIP more fully described in the SPECIFICATIONS (the “DRILLSHIP”) at BUILDER’s shipyard located at Okpo, Koje Island, Korea (the
“SHIPYARD”), and to sell and deliver the same to BUYER, and BUYER hereby agrees to purchase and take delivery of the DRILLSHIP from BUILDER, on the terms and conditions herein set out. Upon DELIVERY, the DRILLSHIP shall be capable of
performing its designed functions as stated in the SPECIFICATIONS. 

  
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 ARTICLE I 
 DESCRIPTION AND CLASS 
 1. Definitions: 

(a) “AFFILIATE” of a specified PERSON means any other PERSON that directly or indirectly, through one or more
intermediaries, CONTROLS, is CONTROLLED by or is under common CONTROL with the specified PERSON. For the purposes of this definition, “CONTROL,” when used with respect to any specified PERSON, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of such PERSON, whether through the ownership of voting securities, by contract, or otherwise, and the terms “CONTROLLING” and “CONTROLLED” have
correlative meanings; provided that, “CONTROL” shall be deemed to exist by virtue of the direct or indirect ownership of fifty percent (50%) or more of the equity securities of such specified PERSON. 

(b) “BANKING DAY” means a day on which commercial banks are open for domestic and foreign exchange business in
New York and Houston. 
 (c) “BUYER’S SUPPLIES” means the equipment or materials furnished and
delivered to the SHIPYARD by BUYER at its costs for BUILDER to incorporate into the DRILLSHIP. 
 (d)
“CONTRACT” means the agreement of the parties set out in the Articles herein and the Annexes attached thereto. 
 (e) “DEFAULT INTEREST RATE” means Three Months’ LIBOR + 5% per annum. 
 (f) “GOVERNMENTAL AUTHORITY” means (a) any domestic or foreign national, state, local, municipal, provisional other government, (b) any instrumentality, subdivision, department,
ministry, board, court, governmental tribunal, regulatory or administrative agency, commission or other Governmental Authority, or instrumentality or political subdivision thereof or (c) any quasi-governmental or private authority or body
exercising or entitled to exercise any administrative, executive, judicial, legislative, police, regulatory, taxing or other governmental functions or power. 
 (g) “INTEREST RATE” means Three Months’ LIBOR + 3% per annum. 
 (h) “LAWS” means any and all applicable laws, statutes, rules, regulations, codes, ordinances, orders, decrees, requirements, judgments, permits, writs and injunctions of any GOVERNMENTAL
AUTHORITY to which a specified PERSON or its assets is subject, in each case as amended and in effect from time to time. 
 (i) “MODIFICATION” means any change in the original CONTRACT intention as deduced from this CONTRACT as a whole and shall include but is not restricted to: 

(1) a change or substitution in the character, quality or nature of equipment to be used in any part of the
SPECIFICATIONS; 
 (2) a change in the levels, lines, positions and dimensions of any part of the SPECIFICATIONS;
or 

  
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 (3) the omission, demolition of, or removal of any part of the WORKS no
longer desired by BUYER or BUILDER. 
 (j) “OPTION AGREEMENT” means that certain Amended and Restated
Option Agreement dated as of even date herewith between Atwood Offshore Worldwide Limited, the BUYER’s sole shareholder, and BUILDER. 
 (k) “ORIGINAL CONSTRUCTION CONTRACT” means that certain Contract for the Construction and Sale of Drillship dated January 28, 2011 between Atwood Oceanics Pacific Limited, as subsequently
assigned to Alpha Advantage Company, each an AFFILIATE of BUYER, and BUILDER. 
 (l) “PC SUM” has the
meaning set forth on Exhibit D attached hereto. 
 (m) “PERSON” means any individual, corporation,
association, partnership, joint venture, limited liability company, unincorporated organization, trust, estate, GOVERNMENTAL AUTHORITY or any other entity not a party to this CONTRACT. 

(n) “SPECIFICATIONS” means the H3614-FS-R0 dated 28 January 2011 and any additions or amendments thereto
pursuant to the ORIGINAL CONSTRUCTION CONTRACT and as hereafter agreed between the parties, as modified by Exhibit E attached hereto. 
 (o) “TURNKEY” means project management, supervision, skilled and unskilled labor, design, engineering, drawings, work procedures, materials, machinery, tools, working area, equipment, plant,
consumables, facilities, classification and regulatory fees, design fees, licenses, permits, transportation, loading and offloading, in-yard movements, scheduling, procurement (not including BUYER’S SUPPLIES), fabrication, assembly,
integration, quality control, inspection, mechanical completion, commissioning, tests and trials, and other obligations as are expressly stated as the responsibility of BUYER “or reasonably inferred” to complete the construction and
DELIVERY of the DRILLSHIP except for items and obligations expressly stated as BUYER’s responsibilities in this CONTRACT. 
 (p) “UNIT 1” means the drillship being constructed pursuant to the terms of the ORIGINAL CONSTRUCTION CONTRACT. 

(q) “WORKS” means all work necessary to fabricate, construct, launch, equip, complete and test the DRILLSHIP, in
accordance with this CONTRACT and the SPECIFICATIONS, and to deliver the DRILLSHIP to BUYER free and clear of all liens, security, interests, claims and encumbrances afloat alongside the SHIPYARD. 

2. Certain Interpretive Provisions:
 In this Agreement, unless the context otherwise requires: 
 (a) the
singular number includes the plural number and vice versa; 
 (b) reference to any PERSON includes such
PERSON’s successors and assigns but, if applicable, only if such successors and assigns are permitted by this CONTRACT, and reference to a PERSON in a particular capacity excludes such PERSON in any other capacity; 

  
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 (c) reference to any gender includes each other gender; 

(d) reference to any agreement (including this CONTRACT), document or instrument means such agreement, document or
instrument as amended or modified (including any waiver or consent) and in effect from time to time in accordance with the terms thereof and, if applicable, the terms hereof; 

(e) reference to any Article, Section, Schedule or Exhibit means such Article, Section, Schedule or Exhibit of or to this
CONTRACT, and references in any Article, Section, Schedule, Exhibit or definition to any clause means such clause of such Article, Section, Schedule, Exhibit or definition; 

(f) the words “this CONTRACT,” “herein,” “hereby,” “hereunder,”
“hereof,” “hereto” and words of similar import are references to this CONTRACT as a whole and not to any particular Article or other provision hereof or thereof, unless expressly so limited; 

(g) the word “including” and its derivatives means “including, but not limited to,” and corresponding
derivative expressions; 
 (h) relative to the determination of any period of time, “from” means
“from and including,” “to” means “to but excluding” and “through” means “through and including;” 
 (i) whenever the parties have agreed that any approval or consent shall not be unreasonably withheld, such phrase includes the parties’ agreement that the approval or consent shall not be
unreasonably delayed or conditioned; 
 (j) no consideration shall be given to the captions of the articles,
sections, subsections, or clauses, which are inserted for convenience in locating the provisions of this CONTRACT and not as an aid in its construction; 
 (k) no consideration shall be given to the fact or presumption that one party had a greater or lesser hand in drafting this CONTRACT; every covenant, term and provision of this CONTRACT shall be construed
simply according to its fair meaning and not strictly for or against any party (notwithstanding any rule of LAW requiring an agreement to be strictly construed against the drafting party), it being understood that the parties to this CONTRACT are
sophisticated and have had adequate opportunity and means to retain counsel to represent their interests and to otherwise negotiate the provisions of this CONTRACT; 

(l) examples shall not be construed to limit, expressly or by implication, the matter they illustrate; 

(m) a defined term has its defined meaning throughout this CONTRACT, and each Exhibit and Schedule to this CONTRACT,
regardless of whether it appears before or after the place where it is defined; 
 (n) all references to prices,
values or monetary amounts refer to United States Dollars, unless expressly provided otherwise; 
 (o) each
Exhibit and Schedule to this CONTRACT is a part of this CONTRACT, but if there is any conflict or inconsistency between the main body of this CONTRACT and any Exhibit or Schedule, the provisions of the main body of this CONTRACT shall prevail; and

  
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 (p) the word “or” may not be mutually exclusive, and can be
construed to mean “and” where the context requires there to be a multiple rather than an alternative obligation. 

  
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 3. Description: 
 The DRILLSHIP shall have BUILDER’s Hull No.3617 and shall be designed, constructed, equipped and completed in accordance with the provisions of this CONTRACT, and the SPECIFICATIONS signed by the
parties hereto for identification and made an integral part hereof. The parties agree that the SPECIFICATIONS, including all suppliers, for major equipment under this CONTRACT shall be same as those of UNIT 1 as of the EFFECTIVE DATE, and the plans
and drawings of the UNIT 1 completed until the EFFECTIVE DATE shall be used also for the DRILLSHIP. For the sake of clarity, any equipment selection made at any time with respect to either of UNIT 1 or the DRILLSHIP shall be deemed to be made
concurrently for the DRILLSHIP or UNIT 1, as applicable. 
 4. Dimensions and Characteristics: 

Details of the DRILLSHIP’s dimension and characteristics including capabilities, length, breadth, depth, draft, machinery, speed and variable load
capacity and all other particulars are as shown in the SPECIFICATIONS. 
 5. Classification: 

The DRILLSHIP, including her machinery, equipment and outfit, shall be constructed in accordance with the edition and amendments thereto in force at the
date of this CONTRACT of the rules and regulations of and under special survey of Det Norske Veritas (the “CLASSIFICATION SOCIETY”), and shall be distinguished in the CLASSIFICATION SOCIETY’s register by the symbols DYNPOS-AUTRO,
CRANE, HLDK-SH, DRILL, BIS or EO. Decisions of the CLASSIFICATION SOCIETY as to compliance or non-compliance of the DRILLSHIP with the said rules and regulations of the CLASSIFICATION SOCIETY shall be final and binding upon the parties. 

6. Rules and Regulations: 
 The
DRILLSHIP shall comply with the applicable rules, regulations and requirements of the other regulatory bodies referred to in the SPECIFICATIONS as in effect at the date of this CONTRACT. 

7. Subcontracting of Construction Work: 
 BUILDER may cause part or the majority of the work on the DRILLSHIP to be performed by one or more subcontractors; provided, however, that BUILDER shall obtain BUYER’s consent in respect of any of
the work on the DRILLSHIP to be performed by a subcontractor outside of Korea. Where such part of the work is subcontracted, BUILDER shall nevertheless always remain responsible for the performance of the same work under the CONTRACT. BUYER’s
rights hereunder shall not be in any way reduced in respect of such subcontracted work. 
 8. Registration: 

The DRILLSHIP shall be registered by the BUYER at its own cost and expense under the LAWS of the Republic of the Marshall Islands at the time of delivery.

 9. Production Schedule and Erection Plan: 

(a) BUILDER and BUYER have agreed to a production schedule, as follows (the “PRODUCTION SCHEDULE”): 

(1) within thirty
(30)                     days of the EFFECTIVE DATE, 

  
 6 

 
BUILDER shall provide BUYER with a level 1 PRODUCTION SCHEDULE; 
 (2) no later than the date that is six (6) months prior to steel-cutting, BUILDER shall provide BUYER with a level 3 PRODUCTION SCHEDULE; 

(3) from steel-cutting to launch of the DRILLSHIP, BUILDER shall provide BUYER with a level 3 PRODUCTION SCHEDULE on a
monthly basis; and 
 (4) from launch of the DRILLSHIP through DELIVERY, BUILDER shall provide BUYER with a level
3 PRODUCTION SCHEDULE on a bi-weekly basis. 
 (b) The PRODUCTION SCHEDULE shall provide for completion and
DELIVERY of the DRILLSHIP by the scheduled DELIVERY DATE and shall be used to measure BUILDER’s progress in performing its obligations under this CONTRACT. The PRODUCTION SCHEDULE may be adjusted from time to time for any delays or extensions
of time permitted under this CONTRACT or as otherwise modified by mutual agreement and shall be the basis of interpretation of actual construction progress of the DRILLSHIP. 

(c) BUILDER shall also develop an overall DRILLSHIP erection plan that integrates material delivery and assembly actions
needed to schedule workflow during all phases of construction. This plan shall encompass sufficient planning data to assure that all phases of construction can be adequately accomplished so as to DELIVER the DRILLSHIP on or before the scheduled
DELIVERY DATE. 

  
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 ARTICLE II 
 CONTRACT PRICE AND TERMS OF PAYMENT 
 1. Contract Price: 

The contract price of the DRILLSHIP, including the drilling equipment package and the subsea equipment package, is United States Dollars Five Hundred
Fifty Million Three Thousand Ninety Three Thousand (USD 550,393,000.00) plus or minus the amount, if any, set forth in subclause 3, below (the “CONTRACT PRICE”), inclusive of the PC SUM, net receivable by BUILDER, which is exclusive of
BUYER’S SUPPLIES. The CONTRACT PRICE shall be subject to upward or downward adjustment as set out in this CONTRACT. Any such adjustment shall be determined prior to DELIVERY of the DRILLSHIP. 

2. Currency: 
 All payments
required to be made by either party under this CONTRACT shall be made in United States Dollars. 
 3. Terms of Payment:

 The CONTRACT PRICE shall be paid by BUYER to BUILDER in instalments (“PAYMENT MILESTONE(S)”) as follows: 

(a) PAYMENT MILESTONE 1: 
 United States Dollars One Hundred Fifty Five Million Eight Hundred Twenty Three Thousand Nine Hundred (USD 155,823,900.00) shall be paid within five (5) BANKING DAYS from the date of receipt by BUYER
of a copy of the Irrevocable Stand-by Letter of Credit attached hereto as Exhibit A for the DRILLSHIP. 
 (b)
PAYMENT MILESTONE 2 (Final Installment): 
 United States Dollars Three Hundred Sixty Three Million Five Hundred Eighty Nine
Thousand One Hundred (USD 363,589,100.00), plus other sums due to BUILDER under this CONTRACT and any increase or any decrease due to adjustments, if any, to the CONTRACT PRICE as per Article III.1, Article III.2 and Article V shall be paid upon
delivery of the DRILLSHIP. 
 4. Method of Payment: 

(a) PAYMENT MILESTONE before DELIVERY: 
 Upon receipt of a notice from BUILDER, BUYER shall, at its own cost and expense, remit the PAYMENT MILESTONE before DELIVERY of the DRILLSHIP as provided in Article II.3 by telegraphic transfer to the
Export-Import Bank of Korea (SWIFT BIC EXIKKRSE) (hereinafter called “K-EXIM”) Account No. 04-029-695 with Deutsche Bank Trust Company Americas, 130 Liberty St., New York, N.Y.10006 U.S.A. (SWIFT BIC BKTRUS33) or to the account of a
bank designated by the BUILDER (“BUILDER’S BANK”) as indicated by BUILDER at least two (2) BANKING DAYS before the due date thereof in favor of Daewoo Shipbuilding & Marine Engineering Co., Ltd. under advice by
authenticated SWIFT Message or telex to K-EXIM by remitting bank. 

  
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 (b) PAYMENT MILESTONE on DELIVERY: 

PAYMENT MILESTONE 2 shall be payable upon DELIVERY of the DRILLSHIP (as provided in Article II.3) by telegraphic transfer to the account
of K-EXIM with Deutsche Bank Trust Company Americas, 130 Liberty St., New York, N.Y.10006 U.S.A. (SWIFT BIC BKTRUS33) or BUILDER’S BANK in favor of Daewoo Shipbuilding & Marine Engineering Co., Ltd., under advice by authenticated SWIFT
Message to K-EXIM or BUILDER’S BANK by the remitting bank, against presentation by BUILDER to K-EXIM or BUILDER’S BANK of a duplicate original copy of the Protocol of Delivery and Acceptance attached hereto as Exhibit C of the DRILLSHIP
signed by BUILDER and BUYER. 
 (c) Prompt payment: 

No payment due under this CONTRACT shall be delayed or withheld by BUYER on account of any dispute or disagreement of whatsoever nature
arising between the parties hereto or by the reason of reference of the said dispute or disagreement to arbitration provided for in Article XIII; provided, however, that in the event of a dispute with respect to PAYMENT MILESTONE 2, BUYER may
provide BUILDER with a surety bond or bank guarantee in the disputed amount. 
 (d) Expenses and Bank Charges 

Expenses and bank charges outside of Korea for remitting payments and any taxes, duties, expenses and fees outside of Korea connected with
such payment shall be for account of the BUYER. However, bank charges of K-EXIM or BUILDER’S BANK shall be borne by the BUILDER. 

  
 9 

 ARTICLE III 
 ADJUSTMENT OF CONTRACT PRICE 
 The CONTRACT PRICE shall be subject to adjustment as
hereinafter set out in the following circumstances. 
  

	 	1.	Delay in DELIVERY: 

 In the event that DELIVERY
is beyond midnight Korean time at the SHIPYARD on the DELIVERY DATE, the BUILDER shall, subject to the provisions of Article VIII.2, pay to the BUYER by way of liquidated damages, which the parties stipulate is a reasonable and genuine pre-estimate
of actual damages and, not by way of penalty, for loss of use of the DRILLSHIP, the amounts set out below. 
 (a) No adjustment shall be made and the CONTRACT PRICE shall remain unchanged for the first fourty five (45) days of delay in DELIVERY of the DRILLSHIP beyond the DELIVERY DATE (ending as of twelve
o’clock midnight, Korean time of the forty-fifth
(45th) day of delay). 

(b) If the DELIVERY of the DRILLSHIP, for causes for which BUILDER is liable, is delayed more than
fourty five (45) days after the DELIVERY DATE, then, in such event, beginning at twelve o’clock midnight of the forty-fifth (45th) day after the DELIVERY DATE, the liquidated damages, as follows, shall be due at the date of actual DELIVERY of
the DRILLSHIP by means of an adjustment to the CONTRACT PRICE: 
 (1) 46th — 120th day of delay USD
125,000.00 per day; and 
 (2) 121st — 210th day of delay USD 155,000.00 per day. 

However, the total of liquidated damages shall not exceed the amount due to cover a delay of one hundred eighty (180) days counting
from midnight of the fourty-fifth (45th) day after the DELIVERY DATE at the above specified rate of reduction. 
 (c) If such delay in DELIVERY of the DRILLSHIP continues, for which BUILDER is liable, for a period of one hundred eighty (180) days or more from the fourty-sixth (46th) day after the DELIVERY
DATE, in such event and after such period has expired, BUYER may, at its option, terminate this CONTRACT in accordance with the provisions of Article X.1(c) or accept the DRILLSHIP with a total reduction in the CONTRACT PRICE equal to five percent
(5%) of the CONTRACT PRICE less the PC SUM. 
 BUILDER may, at any time after the expiration of the aforementioned two
hundred and ten (210) days of delay in DELIVERY and if BUYER has not served notice of termination as provided in Article X, notify BUYER of the expected future date for DELIVERY and demand in writing that BUYER shall make an election, in which
case BUYER shall, within ten (10) BANKING DAYS after such demand is delivered to BUYER, notify BUILDER of its termination of this CONTRACT or acceptance of the revised future date for DELIVERY. If the DRILLSHIP is not delivered by such revised
future date for DELIVERY plus thirty (30) days, BUYER shall have a right to terminate this CONTRACT but without any right to recover any further liquidated damages. If BUYER fails to notify BUILDER of its termination of this CONTRACT as
specified above within such ten (10) BANKING DAY period, BUYER shall be deemed to have consented to the DELIVERY of the DRILLSHIP at the future date for DELIVERY proposed by BUILDER. 

  
 10 

 (d) For the purpose of this Article III.1, the DELIVERY of the DRILLSHIP
shall be deemed to be delayed when and if the DRILLSHIP, after taking into full account of all postponements of the DELIVERY DATE by reason of permissible delays as defined in this CONTRACT, is not delivered by the date upon which the DELIVERY is
required under the terms of this CONTRACT. 
  

	 	2.	Shortfalls in Variable Load Capacity: 

 The
DRILLSHIP shall on DELIVERY have a variable deck load of at least 22,800 Metric Tons at operating draft (“SPECIFIED OPERATING VARIABLE DECK LOAD”). However, if the actual operating variable deck load of the DRILLSHIP on DELIVERY is reduced
by more than five percent (5%) of the SPECIFIED OPERATING VARIABLE DECK LOAD, the CONTRACT PRICE shall be reduced by USD 3,000.00 per Metric Ton for a deficiency in excess of five percent (5%) of the SPECIFIED OPERATING VARIABLE DECK
LOAD. If the deficiency in any variable loads as set out in this Article III.2 exceeds ten percent (10%) of the SPECIFIED OPERATING VARIABLE DECK LOAD, BUYER shall have the right to terminate this CONTRACT. 

 

	 	3.	Insufficient Speed: 

 (a) The CONTRACT PRICE of the DRILLSHIP shall not be affected or changed if the actual speed, as determined by sea trials, is less than the guaranteed speed under the SPECIFICATIONS, provided such
deficiency in actual speed is not more than four-tenths (4/10) of a knot below the guaranteed speed. 
 (b)
However, as for the deficiency of more than four-tenths (4/10) of a knot in actual speed below the speed guaranteed under this CONTRACT, the CONTRACT PRICE shall be reduced by USD 100,000.00 for each full one-tenth (1/10) of a knot in
excess of the said four-tenths (4/10) of a knot of deficiency in speed; provided that fractions of less than one-tenth (1/10) of a knot shall be regarded as a full one-tenth (1/10) of a knot. However, unless the parties agree
otherwise, the total amount of reduction from the CONTRACT PRICE shall not exceed the amount due to cover the deficiency of one (1) full knot below the guaranteed speed at the rate of reduction as specified above. 

(c) If the deficiency in actual speed of the DRILLSHIP is more than one (1) full knot below the speed guaranteed
under this CONTRACT, BUYER, at its option, may, subject to the BUILDER’s right to effect alterations or corrections, cancel this CONTRACT or may accept the DRILLSHIP at a reduction in the CONTRACT PRICE as above provided for one (1) full
knot of deficiency only. 
  

	 	4.	Conclusive Pecuniary Compensation: 

 The
liquidated damages, being applicable for Articles III.1, III.2 and III.3 hereunder shall be the conclusive pecuniary compensation recoverable in connection with each particular event stated herein, and BUILDER shall not be liable for any additional
compensation claimed by BUYER in relation to such particular event and its consequential events. 

  
 11 

 ARTICLE IV 
 APPROVAL OF PLANS AND DRAWINGS AND INSPECTION DURING 

CONSTRUCTION 
  

	 	1.	Approval of Plans and Drawings: 

 BUILDER shall
submit to BUYER three (3) copies of each of the plans and drawings, the list of which shall be mutually agreed upon between the parties hereto, for its approval. BUYER shall, within seventeen (17) days after receipt thereof, return to
BUILDER one (1) copy of such plans and drawings with BUYER’s approval or comments (if any) written thereon, provided always that: 

if the REPRESENTATIVE (as hereinafter defined) shall have been sent by BUYER to the SHIPYARD as set out in Article IV.2, BUILDER may submit any remaining
plans and drawings to the REPRESENTATIVE for his approval. The REPRESENTATIVE shall, within seven (7) days after receipt thereof, return to BUILDER one (1) copy of such plans and drawings with his approval or comments (if any) written
thereon. Approval by the REPRESENTATIVE of the plans and drawings duly submitted to him shall be deemed to be approval by BUYER for all purposes of this CONTRACT. 
 If the above comments made by BUYER are not clearly specified or detailed, BUILDER shall seek clarification from BUYER, and BUYER shall give its explanation thereto without undue delay and with reasonably
sufficient detail. If BUYER fails to comply, BUILDER may place its own interpretation on such comments in implementing the same. 
 If BUYER or
the REPRESENTATIVE shall fail to return the plans and drawings to BUILDER within the time limits as above provided, such plans and drawings shall be deemed to have been approved or confirmed without any comment. 

Any approval or absence of approval by BUYER shall not relieve BUILDER of its obligations to build the DRILLSHIP in accordance with the SPECIFICATIONS.

 1.1 BUILDER shall also provide the following to BUYER in respect only of the DRILLSHIP of this CONTRACT: 

 

	 	(a)	on the DELIVERY DATE, final AutoCAD or similar electronic renderings of the DRILLSHIP as they may apply, and physical drawings to the extent as set forth on Exhibit F;
and 

  

	 	(b)	no later than six (6) months after the EFFECTIVE DATE, BUILDER shall provide BUYER with the following: 

 

	 	(i)	3D drawings and animations of the DRILLSHIP for BUYER’s marketing purposes, which drawings and animations shall include virtual reality models and still shots of
the class of drillships under which the DRILLSHIP and UNIT 1 have been constructed and which meet or exceed the quality of the products provided by Concept Illustration & Animation AS and are similar to the marketing materials provided by
Pacific Drilling (collectively, the “ANIMATED RENDERINGS”); 

  

	 	(ii)	access to the source code of or other raw materials related to the ANIMATED RENDERINGS, limited to that of drillship itself, to permit BUYER to manipulate the same for
its external or internal purposes; and 

  
 12 

	 	(iii)	a worldwide, irrevocable license to utilize the ANIMATED RENDERINGS for BUYER’s external and internal purposes; 

provided, however, that BUILDER may elect to subcontract creation of the ANIMATED RENDERINGS to a third party. 

 

	1.2	Without prejudice to and in addition to the obligations by BUYER under Article XXI.8 of this Contract, the BUYER undertakes to the BUILDER that:

  

	 	A.	the BUYER acknowledges that all the items provided by BUILDER under the subparagraph 1.1 of this Article IV, including without limitation the AutoCAD or similar
electronic renderings as stated therein (which provisions by BUILDER and the information therein called the “RESTRICTED INFORMATION”), are items included in the List of Korea’s Core Shipbuilding Technologies, which Korean Governmental
Authorities closely monitor to prevent from being divulged to a foreign competitor; 

  

	 	B.	the BUYER shall strictly restrict disclosure of the Restricted Information only to the personnel within its organization who need the Restricted Information in
electronic form for safe operation of the DRILLSHIP, without disclosing the Restricted Information to any other PERSON; 

  

	 	C.	the BUYER indemnifies the BUILDER against any and all losses, costs, damages, liabilities or claims that arise out of or in connection with any failure by BUYER to
comply with its obligations as set forth in the aforementioned subparagraph B. 

  

	 	2.	Appointment of REPRESENTATIVE: 

BUYER shall in due time despatch to and maintain at the SHIPYARD, at BUYER’s own cost and expense, up to a maximum of five
(5) representative(s) (the “REPRESENTATIVE” or the “REPRESENTATIVES”) who shall be duly authorized in writing by BUYER to act on behalf of BUYER in connection with modifications of the SPECIFICATIONS, adjustment of the
CONTRACT PRICE and the DELIVERY DATE, confirmation of the PRODUCTION SCHEDULE, approval of the plans and drawings, attendance to the tests and inspections relating to the DRILLSHIP, her machinery, equipment and outfit and any other matters for which
such REPRESENTATIVE is authorized by BUYER. 
  

	 	3.	Inspection: 

 (a)
The necessary tests and inspections of the DRILLSHIP, her machinery, equipment and outfit either as required by the CLASSIFICATION SOCIETY or by other applicable regulatory bodies or as agreed by the parties hereto, shall be carried out by the
CLASSIFICATION SOCIETY, other regulatory bodies and/or an inspection team of BUILDER throughout the entire period of construction, in order to ensure that the construction of the DRILLSHIP is duly performed in accordance with this CONTRACT and the
SPECIFICATIONS. During construction of the DRILLSHIP the REPRESENTATIVE shall have the right to attend such tests and inspections of the DRILLSHIP, her machinery and equipment as mutually agreed between BUYER and BUILDER. 

(b) BUILDER shall give a reasonable advance notice to the REPRESENTATIVE of the date and place of such tests, trials and
inspections which may be attended by him. Failure by the REPRESENTATIVE to be present at such tests, trials and inspections after due notice to him as aforesaid shall be deemed to be a waiver of the REPRESENTATIVE’s right to be present. In the
event that BUILDER needs an 

  
 13 

 
inspection for coating work to be made during non-working hours for smooth progress of work, the REPRESENTATIVE shall exercise his best endeavours to attend such inspection provided that BUILDER
has given a reasonable advance notice to the REPRESENTATIVE. 
 (c) In working hours during construction of the
DRILLSHIP until DELIVERY thereof, the REPRESENTATIVE shall, subject to the reasonable requirements of the SHIPYARD’s work program and safety control, be permitted free and ready access to the DRILLSHIP, her machinery and equipment, and to any
other place where work on the DRILLSHIP is being done, or materials are being processed or stored in connection with the construction of the DRILLSHIP, including the yards, workshops, stores and offices of BUILDER, and the premises of subcontractors
of BUILDER, who are doing work or storing materials in connection with the DRILLSHIP’s construction. 
 (d)
If the REPRESENTATIVE discovers any construction, material or workmanship which he considers not to conform to the requirements of this CONTRACT and/or the SPECIFICATIONS, the REPRESENTATIVE shall promptly give BUILDER a notice in writing specifying
the alleged non-conformity. Upon receipt of such notice from the REPRESENTATIVE, BUILDER shall correct such non-conformity, if BUILDER agrees to his view. Any disagreement shall be resolved in accordance with Article XIII.1. 

(e) If the CLASSIFICATION SOCIETY, TECHNICAL EXPERT or arbitrator enters a determination in favour of BUYER, then in such
case BUILDER shall correct such non-conformity, or if such corrections cannot be made in time to meet the construction schedule for the DRILLSHIP, the then parties shall mutually agree to an adjustment of the CONTRACT PRICE in lieu of such
corrections. If the CLASSIFICATION SOCIETY, TECHNICAL EXPERT or the arbitrator enters a determination in favour of BUILDER, then the time for DELIVERY of the DRILLSHIP shall be extended for the period of delay in construction, if any, occasioned by
such proceedings, and BUYER shall compensate BUILDER for the proven loss and damages directly incurred by BUILDER under this CONTRACT as a result of such dispute; provided that BUILDER shall be required to take reasonable endeavors to mitigate any
losses and/or damages incurred in connection with such dispute and no special or consequential damages may be recouped. 
 (f) In the event the arbitrator enters a determination in favour of BUYER and determines that such corrections cannot be made prior to the two hundred tenth (210th) day following the DELIVERY DATE pursuant to Article III.1,
then BUYER is entitled to terminate this CONTRACT. 
  

	 	4.	Facilities: 

 (a)
BUILDER shall furnish BUYER with office space to accommodate a sixty (60) person site team including a locker room and coffee room equipped with refrigerator and industrial-sized coffee maker; office space to accommodate a sixty
(60) person operations team, including a locker room and coffee room equipped with a refrigerator and industrial-sized coffee maker; and each of the above-listed office spaces is to have a minimum of eight (8) private offices, with all
desks to be outfitted with an Internet connection and electrical plugs, a large dedicated file room, two (2) meeting rooms able to accommodate fifty (50) persons each and complete with a large table and chairs; one hundred
(100) bicycles upon BUYER’s request on a reimbursable basis; 

  
 14 

 
twenty (20) dedicated parking spaces; bottled water and dispensers upon BUYER’S request on a reimbursable basis; unlimited high speed internet service upon BUYER’S request on a
reimbursable basis; four (4) print/scan/email workstations networked and all required paper upon BUYER’s request on a reimbursable basis; a full size plotter and all required paper upon BUYER’s request on a reimbursable basis; storage
space for BUYER’S SUPPLIES, with BUILDER to transport from storage and load onto the DRILLSHIP all BUYER’S SUPPLIES. This replaces the facilities requirement under Article IV.4(a) of the ORIGINAL CONSTRUCTION CONTRACT. 

(b) Upon exercise of the OPTION (as defined in the OPTION AGREEMENT), BUILDER agrees to furnish BUYER with the office
facilities and parking spaces referenced in Article IV.4(a) of the ORIGINAL CONSTRUCTION CONTRACT with a maximum of the amounts set forth therein multiplied by 1.67; provided, however, that upon BUYER’s request on a reimbursable basis a total
of one hundred fifty (150) bicycles shall be provided. 
 Provided, however, that BUYER shall pay telecommunication charges including
telephone and email, and shall reimburse costs and expenses for supply and installation of telefax or external telephone lines and other facilities and office equipment and furniture, if any, provided in addition to the above upon BUYER’s
request. 
  

	 	5.	Liability of BUILDER and BUYER: 

 (a) The REPRESENTATIVE(S) shall at all times be deemed to be the employee(s) of BUYER and not of BUILDER. 
 (b) BUILDER agrees to protect, indemnify and hold BUYER free and harmless from and against any and all claims or liabilities (including, without limitation, the cost of the suit and reasonable
attorney’s fees) arising in favour of any of BUILDER’s (or its AFFILIATES), employees, agents, officers, invitees, subcontractors (or their servants) or representatives, or any survivor of the foregoing on account of injury to or death of
any such parties or damage to any of their property attributable to the actions (or lack thereof) by any such parties in connection with the DRILLSHIP and/or work performed pursuant to this CONTRACT, regardless of whether BUYER and/or its
subcontractors and/or others may be wholly, partially or solely negligent or otherwise at fault. 
 (c) BUYER
agrees to protect, indemnify and hold BUILDER and its subcontractors free and harmless from and against any and all claims or liabilities (including, without limitation, the cost of the suit and reasonable attorney’s fees) arising in favour of
any of BUYER’s (or its AFFILIATES) employees, agents, officers, invitees, subcontractors (or their servants) or representatives, or any survivor of any of the foregoing on account of injury to or death of any such parties or damage to any of
their property except as regards DRILLSHIP attributable to the actions (or lack thereof) by any such parties in connection with the DRILLSHIP and/or work performed pursuant to this CONTRACT, regardless of whether BUILDER or its subcontractors and/or
others may be wholly, partially or solely negligent or otherwise at fault. 
  

	 	6.	Responsibility of BUYER: 

 (a) BUYER shall advise BUILDER in advance of the names, experiences and scope of authority of the REPRESENTATIVE(s) and of any other information pertaining to their qualifications. If BUILDER shall have
reasonable cause to disapprove of any of the REPRESENTATIVE(s), it shall so advise BUYER and BUYER shall take proper action. 

  
 15 

 (b) BUYER shall undertake and assure that its REPRESENTATIVE(s) shall carry
out their duties hereunder in accordance with BUILDER’s good practice and in such a way as to avoid any unnecessary increase in building cost or delay in the production schedules of BUILDER. The REPRESENTATIVE(s) shall abide by the work rules
and regulations prevailing at the premises of BUILDER and its subcontractors. 
 (c) BUILDER has the right to
request BUYER to replace any REPRESENTATIVE(s) if deemed unsuitable and unsatisfactory for the proper progress of the DRILLSHIP’s construction. If BUYER considers that such BUILDER’s request is justified, BUYER shall effect such
replacement as soon as practicable 

  
 16 

 ARTICLE V 
 MODIFICATIONS 
  

	 	1.	Modification of SPECIFICATIONS: 

 (a) Any MODIFICATION or variation of or amendment to the SPECIFICATIONS shall be evidenced by written agreement of the parties hereto (a “CHANGE ORDER”); provided, prior to any MODIFICATION or
variation being effected by the BUILDER, the parties shall first agree to alterations in the CONTRACT PRICE, the DELIVERY DATE, lightship weight and other terms and conditions of this CONTRACT and SPECIFICATIONS occasioned by or resulting from such
MODIFICATION or variation within seven (7) days from the receipt by BUYER of BUILDER’s proposal. BUILDER has the right to continue construction of the DRILLSHIP on the basis of the SPECIFICATIONS until agreement to the above has been
reached. 
 (b) Notwithstanding the foregoing, BUILDER may also make minor changes to the SPECIFICATIONS
including, but not limited to, the dimensions and characteristics of the DRILLSHIP, if found necessary to suit the SHIPYARD’s local conditions and facilities, the availability of materials and equipment, introduction of improved methods or
otherwise, provided that BUILDER shall first obtain BUYER’s written (which expression includes e-mail communication) approval, which shall not be unreasonably withheld or delayed. 

(c) Upon receiving a written request for MODIFICATION from BUYER, BUILDER will submit to BUYER in writing within twenty
one (21) working days a quotation of the change in the CONTRACT PRICE and/or DELIVERY DATE (if any) as a result of alterations and adjustments required to the SPECIFICATIONS. 

(d) In the event that BUYER requests any change that would result in a net savings in cost then, subject to negotiations
between the parties, the cost saving shall be to BUYER’s benefit and be credited in the final accounts on delivery of the DRILLSHIP. 
 (e) The parties agree that if any MODIFICATIONS are to be made to both SPECIFICATIONS of the DRILLSHIP and UNIT 1 after the EFFECTIVE DATE of this CONTRACT, the BUILDER’s quotations to adjust the
CONTRACT PRICE for such MODIFICATIONS as set forth in Article V.4 shall reflect the amount saved by the BUILDER by reason that the plans or drawings and related engineering works done for the UNIT 1 may be applied or used also for the DRILLSHIP or
vice versa. Any CHANGE ORDERS for UNIT 1 agreed to on or before the EFFECTIVE DATE of this CONTRACT shall be treated as part of the SPECIFICATIONS for the DRILLSHIP and not as CHANGE ORDERS. 

 

	 	2.	Change in Class and Statutory Requirements 

 (a) If after the EFFECTIVE DATE, any requirements of the CLASSIFICATION SOCIETY, or of other rules and regulations specified in Article I.4 (or the interpretation thereof by the relevant body) to which
the construction of the DRILLSHIP is required to conform, are changed by the CLASSIFICATION SOCIETY or other regulatory bodies authorized to make such changes, the following provisions shall apply unless a waiver of the changed requirement, rule,
regulation or interpretation is obtained pursuant to BUYER’s request: 

  
 17 

 (1) If the changes are compulsory for the DRILLSHIP, either of the parties
hereto, upon receipt of information from the CLASSIFICATION SOCIETY or such other regulatory bodies, shall promptly transmit the same to the other in writing, and BUILDER shall thereupon incorporate such changes into the construction of the
DRILLSHIP, provided that BUYER shall first have agreed to adjustments required by BUILDER in the CONTRACT PRICE, the DELIVERY DATE, lightship weight and other terms and conditions of this CONTRACT and the SPECIFICATIONS occasioned by or resulting
from such changes within seven (7) days from the receipt by BUYER of BUILDER’s proposal. 
 (2) If the
changes are not compulsory for the DRILLSHIP, but BUYER desires to incorporate any of them into the construction of the DRILLSHIP, BUYER shall notify BUILDER of that intention. BUILDER may accept such changes, provided that such changes will not in
its reasonable judgment adversely affect BUILDER’s planning or program in relation to BUILDER’s other commitments, and provided, further, that BUYER shall first have agreed to adjustments required by BUILDER in the CONTRACT PRICE, the
DELIVERY DATE, and other terms and conditions of this CONTRACT and the SPECIFICATIONS occasioned by or resulting from such changes within seven (7) days from the receipt by BUYER of BUILDER’s proposal. 

(b) Agreements as to any changes under this Article V.2 shall be made in the same manner as provided in Article V.1 for
MODIFICATIONS or changes to the SPECIFICATIONS. 
 (c) Any delay in the construction of the DRILLSHIP caused by
BUYER’s delay in making a decision or agreement as above shall constitute a permissible delay under this CONTRACT. 
  

	 	3.	Substitution of Materials: 

 If any of the
materials or equipment required by the SPECIFICATIONS or otherwise under this CONTRACT for the construction of the DRILLSHIP are in short supply or cannot be procured in time to maintain the DELIVERY DATE of the DRILLSHIP or are unreasonably high in
price as compared with prevailing international market rates, BUILDER may, provided that BUYER shall so agree in writing (which agreement shall not be unreasonably withheld), supply other materials capable of meeting the requirements of the
CLASSIFICATION SOCIETY and of the rules, regulations and requirements with which the construction of the DRILLSHIP must comply. Any agreement as to substitution of materials shall be effected in the manner as provided in Article V.1. 

 

	 	4.	Adjustment to CONTRACT PRICE and DELIVERY by MODIFICATIONS: 

 In relation to this Article V, the BUILDER’s quotations in respect of any increase or decrease in the CONTRACT PRICE or any MODIFICATION shall be calculated and submitted on “lump sum”
basis for the adjustment to the CONTRACT PRICE. BUYER may contest the reasonableness of BUILDER’s proposal based on a lump sum. In case such contest by BUYER is on reasonable grounds only and BUILDER agrees on the BUYER’s contest and
opinion therein, then “time and materials” basis shall be applied to settle pricing of the modifications as defined below in subparagraphs (a) and (b). BUYER’s written notification shall be received by BUILDER within ten
(10) days of the date of BUILDER’s quotations. 

  
 18 

 (a) Labour costs shall be charged at the agreed hourly rates set out in
EXHIBIT B. 
 (b) The cost of materials and equipment shall be fifteen per cent (15%) in addition to the
cost of the BUILDER. 
 In respect of costs not set out in EXHIBIT B, the BUYER and the BUILDER shall negotiate in good faith to reach an
agreement on such price for the modifications. If no agreement is reached within thirty (30) days following receipt by BUILDER of BUYER’s written notification as set out in this paragraph above, the dispute shall be referred to the
TECHNICAL EXPERT in accordance with Article XIII.1(b) of this CONTRACT. 
 Adjustment to the contractual DELIVERY DATE in respect of this
Article V shall be subject to effect on critical paths in the DRILLSHIP’s construction and completion. 
  

	 	5.	Payment for MODIFICATIONS: 

 Any sums due to
either party under Article V as a result of MODIFICATIONS shall be paid as follows but in any event prior to DELIVERY of the DRILLSHIP: 
 (a) 50% of any lump sum amount shall be paid upon the agreement of MODIFICATIONS or immediately following a decision by the TECHNICAL EXPERT in accordance with Article XIII.1(b) of this CONTRACT. Any
amount based on time and materials shall be paid as accrued. 
 (b) The remaining 50% of the lump sum amount
shall be paid upon the completion of MODIFICATIONS in accordance with the CONTRACT. 

  
 19 

 ARTICLE VI 
 SEA TRIAL 
  

	 	1.	Notices: 

 BUILDER shall notify BUYER at least
fourteen (14) days in advance of the expected time and place of the sea trial of the DRILLSHIP, and BUYER shall promptly acknowledge receipt of such notice. Such date shall be confirmed by BUILDER at least five (5) days in advance.
However, if the sea trial of the DRILLSHIP is postponed or delayed due to unfavourable weather conditions and/or unreadiness of the DRILLSHIP for the sea trial then BUILDER shall give BUYER as much advance notice of the new date of sea trials as
practicable. 
 BUYER shall have the REPRESENTATIVE(S) and such other persons as BUYER may require in writing on board the DRILLSHIP to witness
the sea trial. Failure by the REPRESENTATIVE(S) to attend the sea trial of the DRILLSHIP for any reason whatsoever after due notice to BUYER as above provided shall be deemed to be a waiver by BUYER of its right to have the REPRESENTATIVE(S) on
board the DRILLSHIP at the sea trial, and BUILDER may conduct the sea trial without the REPRESENTATIVE(S) being present, provided that a representative of the CLASSIFICATION SOCIETY shall be on board the DRILLSHIP for such sea trial. In such case
BUYER shall be obliged to accept the DRILLSHIP on the basis of a certificate of BUILDER, confirmed by the CLASSIFICATION SOCIETY, if applicable, that the DRILLSHIP, on the sea trial, is found to conform to this CONTRACT and the SPECIFICATIONS. In
any event BUILDER shall promptly supply to BUYER a copy of all records of tests and trials carried out with regard to the DRILLSHIP, her machinery and equipment. 
  

	 	2.	Weather Conditions: 

 The sea trial shall be
carried out under weather conditions which are deemed favourable enough in the reasonable judgement of BUILDER in accordance with the SPECIFICATIONS. In the event of unfavourable weather on the date specified for the sea trial, the same shall take
place on the first available day thereafter that weather conditions permit. 
 It is agreed that if during the sea trial the weather should
suddenly become so unfavourable that the satisfactory conduct of the sea trial can no longer be continued, the sea trial shall be discontinued and postponed until the next following favourable day, unless BUYER shall assent in writing to a request
from BUILDER to accept the DRILLSHIP on the basis of the sea trial already made before such discontinuance occurred. 
 Any delay in the sea
trial caused by unfavourable weather conditions shall be deemed a permissible delay in the delivery of the DRILLSHIP and shall operate to postpone the DELIVERY DATE by the period of delay involved. 

 

	 	3.	How Conducted: 

(a) All expenses in connection with the sea trial are for the account of BUILDER, and BUILDER shall provide at its own
expense the necessary crew to comply with the requirements of safe navigation. The sea trial shall be conducted in the manner prescribed in the SPECIFICATIONS and shall prove fulfillment of the performance requirements for the sea trial as set forth
in the SPECIFICATIONS. The course of the sea trial shall be determined by BUILDER. BUILDER shall have the right to conduct preliminary trials and to repeat any trial whatsoever as it deems necessary. 

  
 20 

 (b) Lubricating oils, fuel oils, hydraulic oils and greases or other
consumable stores (excluding fresh water) necessary for sea trials shall be supplied by BUILDER, as specified by BUYER prior to conducting such sea trials, and BUYER shall pay BUILDER the documented cost of the lubricating oils, fuel oils, hydraulic
oils and grease, inclusive of any quantities remaining in machinery or piping, as applicable, remaining at the time of DELIVERY. 
  

	 	4.	Method of Acceptance or Rejection: 

 (a) If during sea trial any breakdowns occur entailing interruption or irregular performance which can be repaired on board, the trial shall be continued after repairs and be valid in all respects.

 (b) As soon as practicable after satisfactory completion of the sea trial, BUILDER shall give BUYER a report
thereon and notice that the results of the sea trial indicate conformity of the DRILLSHIP to this CONTRACT and the SPECIFICATIONS. BUYER shall, within seven (7) days after receipt of such notice from BUILDER, notify BUILDER of its acceptance or
rejection of the DRILLSHIP on the basis of its conformity with the requirements of this CONTRACT and the SPECIFICATIONS. 
 (c) If the results of the sea trial indicate that the DRILLSHIP or any part or equipment thereof does not conform to the requirements of this CONTRACT and/or the SPECIFICATIONS, then BUILDER shall take
the necessary steps to correct such non-conformity. Upon completion of the correction of such non-conformity, BUILDER shall give BUYER notice thereof. BUYER shall, within seven (7) days after receipt of such notice from BUILDER, notify BUILDER
of its acceptance or rejection of the DRILLSHIP. However, BUYER shall not be entitled to reject the DRILLSHIP by reason of any minor or insubstantial defect or non-conformity, which can be judged from the viewpoint of standard building practice as
applied to international offshore drillships and which does not effect the issuance of required certificates from the CLASSIFICATION SOCIETY and other regulatory bodies or the operability, function or performance of the DRILLSHIP, but in such case,
the BUILDER shall not be released from its obligation to correct and/or remedy such minor or insubstantial non-conformity as far as practicable during the WARRANTY PERIOD. 

(d) If BUYER considers that the results of the sea trial indicate that the DRILLSHIP or any part or equipment thereof does
not conform to this CONTRACT and/or the SPECIFICATIONS, BUYER shall indicate in detail in a notice of rejection in what respect the DRILLSHIP or any part or equipment thereof, does not in its opinion conform to this CONTRACT and/or the
SPECIFICATIONS. 
 (e) If BUYER fails to notify BUILDER in writing or email confirmed in writing of the
acceptance or rejection of the DRILLSHIP together with the reason therefore within the period as provided in Article VI.4 (b) or (c), BUYER shall be deemed to have accepted the DRILLSHIP. 

(f) BUILDER may dispute the rejection of the DRILLSHIP by BUYER under this Article VI.4, in which case the matter shall be
submitted for final decision by arbitration in accordance with Article XIII. 
  

	 	5.	Effect of Acceptance: 

 Acceptance of the
DRILLSHIP as above provided shall be final and binding so far as the conformity of the DRILLSHIP to this CONTRACT and the SPECIFICATIONS is concerned, and shall preclude BUYER from refusing formal delivery of the DRILLSHIP as hereinafter provided,
if BUILDER complies with all procedural requirements for DELIVERY of the DRILLSHIP as provided in Article VII. 

  
 21 

 ARTICLE VII 
 DELIVERY DATE AND DELIVERY 
  

	 	1.	Delivery: 

 Delivery of the DRILLSHIP shall occur
upon completion of the sea trials in accordance with Article VI above, issuance of a classification certificate (or an interim classification certificate) by the CLASSIFICATION SOCIETY and acceptance of the DRILLSHIP by BUYER (“DELIVERY”).

  

	 	2.	Time and Place: 

 (a) The DRILLSHIP shall be DELIVERED safely afloat by BUILDER to BUYER at a berth in the SHIPYARD on or before 30 June 2014, except that, in the event of delays in the construction of the DRILLSHIP
or any performance required under this CONTRACT due to causes which under the terms of this CONTRACT permit postponement of the date for DELIVERY, the aforementioned date for DELIVERY of the DRILLSHIP shall be postponed accordingly. The
aforementioned date, or such later date to which the requirement of DELIVERY is postponed pursuant to such terms, is herein called the “DELIVERY DATE”. 

(b) With sixty (60) days prior written notice to BUYER, BUILDER shall be entitled to advance the DELIVERY DATE of the
DRILLSHIP by up to sixty (60) days. 
 (c) The date on which BUILDER shall have actually DELIVERED the
DRILLSHIP to BUYER is herein called the “ACTUAL DELIVERY DATE”. In the event the BUYER defaults pursuant to Article XI.1(b), the date on which BUILDER shall have formally tendered the DRILLSHIP for DELIVERY under Article VII.7 shall be
regarded as the ACTUAL DELIVERY DATE. 
  

	 	3.	When and How Effected: 

 Provided that BUYER
shall have fulfilled all of its obligations under this CONTRACT (including, but not limited to, full payment of the CONTRACT PRICE and settlement of any indebtedness to BUILDER), DELIVERY of the DRILLSHIP shall be duly made hereunder by BUILDER, and
such DELIVERY shall be evidenced by a Protocol of Delivery and Acceptance (attached hereto as Exhibit C) signed by the parties hereto, acknowledging DELIVERY of the DRILLSHIP by BUILDER and acceptance thereof by BUYER. 

 

	 	4.	Documents to be Delivered to BUYER: 

 Upon
DELIVERY and acceptance of the DRILLSHIP, BUILDER shall deliver to BUYER the following documents which shall accompany the Protocol of Delivery and Acceptance: 
 (a) Protocol of Trials of the DRILLSHIP made pursuant to the SPECIFICATIONS. 
 (b) Protocol of Inventory of the equipment of the DRILLSHIP, including spare parts and the like, all as specified in the SPECIFICATIONS. 

(c) Protocol of Stores of Consumable Nature referred to under Article VI.3(b), including the original purchase price
thereof. 

  
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 (d) Certificates including Builder’s Certificate required to be
furnished upon delivery of the DRILLSHIP pursuant to this CONTRACT and the SPECIFICATIONS. It is agreed that if, through no fault on the part of BUILDER, the classification certificate and/or other certificates are not available at the time of
DELIVERY of the DRILLSHIP, provisional certificates shall be accepted by BUYER, provided that BUILDER shall furnish to BUYER the final certificates as promptly as possible after such final certificates have been issued. 

(e) Declaration of Warranty of BUILDER that the DRILLSHIP is delivered to BUYER free and clear of any liens, charges,
claims, mortgages, or other encumbrances and in particular, that the DRILLSHIP is absolutely free of all burdens in the nature of imposts, taxes or charges imposed by the Korean GOVERNMENTAL AUTHORITIES, as well as of all liabilities of BUILDER to
its subcontractors, employees and crew, and of all liabilities arising from the operation of the DRILLSHIP in trial runs, or otherwise, prior to delivery except as otherwise provided under this CONTRACT. 

(f) Drawings and Plans pertaining to the DRILLSHIP as stipulated in the SPECIFICATIONS. 

(g) Commercial Invoice. 
 (h) Bill of Sale. 
 (i) All operating manuals in BUILDER’s
possession to be delivered on the DRILLSHIP. 
 (j) All other documents required to be provided on or before the
DELIVERY by the SPECIFICATIONS. 
  

	 	5.	Title and Risk: 

 Title to and risk of the
DRILLSHIP shall pass to BUYER only upon delivery and acceptance thereof having been completed as stated above. Until such delivery is consummated, title to and risk of the DRILLSHIP and her equipment shall remain with BUILDER; provided, however,
that, in the event of a BUILDER DEFAULT, BUYER shall have the right to take early DELIVERY of the DRILLSHIP under construction subject to the condition that the parties shall first have reached prior mutual agreement on the terms and conditions for
such early DELIVERY, at which time, title to and risk shall pass to BUYER. 
  

	 	6.	Removal of DRILLSHIP: 

 BUYER shall take
possession of the DRILLSHIP immediately upon delivery and acceptance thereof and shall remove the DRILLSHIP from the premises of the SHIPYARD within five (5) days after delivery and acceptance thereof is affected. If BUYER shall not remove the
DRILLSHIP from the premises of the SHIPYARD within the aforesaid five (5) days, then, in such event BUYER shall pay to BUILDER reasonable mooring and storage charges for the DRILLSHIP. 

	 	

	 	7.	Tender of DRILLSHIP: 

 If BUYER fails to take
DELIVERY of the DRILLSHIP after completion thereof according to this CONTRACT and the SPECIFICATIONS, BUILDER shall have the right formally to tender the DRILLSHIP to BUYER for DELIVERY for the purposes of Article XI.1(b). Such tender shall be made
by BUILDER by a notice to BUYER stating that the DRILLSHIP is tendered for delivery pursuant to Article VII.7 of the CONTRACT. 

  
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	 	8.	DELIVERY during Dispute. 

 BUILDER shall not
delay or withhold DELIVERY of the DRILLSHIP pending resolution of any dispute between BUYER and BUILDER provided that BUYER has provided BUILDER with a surety bond or bank guarantee in the amount of such dispute in accordance with Article II.4.(c).

  
 24 

 ARTICLE VIII 
 DELAYS AND EXTENSION OF TIME FOR DELIVERY (FORCE MAJEURE) 
  

	 	1.	Causes of Delay: 

 If at any time before the
DELIVERY of the DRILLSHIP, either the construction of the DRILLSHIP or any performance required hereunder is delayed due to Acts of God; acts of princes or rulers; requirements of government authorities; war or acts of war or preparations therefore;
blockade, revolution, insurrections, mobilization of armed forces, civil war, civil commotion or riots; vandalism; sabotage; strikes, lockouts or other labour disturbances by such reasons not related to BUILDER or its AFFILIATES; plague or other
epidemics; quarantines; flood, typhoons, hurricanes or cyclonic storms; earthquakes; tidal waves; landslides; fires, lightning strikes, or explosions; embargoes; prolonged failure, shortage or restriction of electric current, oil or gas supplies;
and delays in deliveries of major parts (inclusive of the drilling equipment package and the subsea equipment package) or performance of major obligations by subcontractors or suppliers by such causes described herein; then and in any such case, the
DELIVERY DATE shall be postponed for such period as the DELIVERY of the DRILLSHIP is delayed thereby. 
  

	 	2.	Definition of Permissible Delay: 

 Delay on
account of such cause as specified in Articles V.4, VI.2, VIII.1, XI.1, XVII.1 and any other delays of a nature which under the terms of this CONTRACT permit postponement of the DELIVERY DATE shall be understood to be permissible delays, which shall
not be subject to adjustment of the CONTRACT PRICE as provided in Article III.1. 
  

	 	3.	Notice of Delay: 

(a) Within ten (10) days after the commencement of any cause of delay on account of which BUILDER claims that it is
entitled under this CONTRACT to a postponement of the DELIVERY DATE, BUILDER shall (if practically possible) notify BUYER of the dates, the cause of delay which has occurred and its expected duration. 

(b) Within ten (10) days after the ending of such cause of delay, if practically possible, BUILDER shall notify BUYER
in writing of the date such cause of delay ended. 
 (c) BUILDER shall also notify BUYER of the period by which
the DELIVERY DATE is postponed by reason of such cause of delay with all reasonable dispatch after it has been determined. Failure by BUYER to object to BUILDER’s claim for postponement of the DELIVERY DATE within ten (10) days after
receipt by BUYER of such notice of claim shall be deemed to be a waiver by BUYER of its right to object to such postponement of the DELIVERY DATE. 
  

	 	4.	Right to Terminate CONTRACT for Excessive Delay: 

If the total accumulated time of all permissible delays on account of the causes specified in Article VIII.1 (but excluding delays caused by any error or
omission on the part of BUYER and any other delays which under the terms of this CONTRACT permit postponement of the DELIVERY DATE) amounts to two hundred and ten (210) days or more, then, in such event, BUYER may terminate this CONTRACT in
accordance with the provisions of Article X. If BUYER has not served notice of termination as provided in Article X, BUILDER may, at any time after the said accumulated time justifying termination by BUYER has occurred, notify BUYER of the expected
future date for DELIVERY and demand in writing that BUYER shall make an election, in which case BUYER shall, within ten (10) days after such demand is 

  
 25 

 
delivered to BUYER, notify BUILDER of either its termination of this CONTRACT or its acceptance of the revised future date for DELIVERY specified by BUILDER. If the DRILLSHIP is not DELIVERED by
such revised future date, BUYER shall have the same right of termination upon the same terms and conditions as above provided as if the said revised future date for DELIVERY was the DELIVERY DATE as defined in Article VII. If BUYER fails to notify
BUILDER of its termination of this CONTRACT as specified above within such ten (10) days period, BUYER shall be deemed to have consented to the DELIVERY of the DRILLSHIP at the revised future date for DELIVERY. 

If any termination of the CONTRACT is based on any of the permissible delays on account of the causes specified in this Article VIII.1 of the CONTRACT,
no interest shall be payable by BUILDER. 

  
 26 

 ARTICLE IX 
 WARRANTY OF QUALITY 
  

	 	1.	Guarantee: 

 BUILDER warrants that the material
and workmanship employed in the construction of the DRILLSHIP shall be free from defects and shall comply with this CONTRACT. Subject to the provisions hereinafter set out, BUILDER undertakes to remedy or replace, free of charge to BUYER, any
defects in the DRILLSHIP which are due to defective material and/or improper workmanship on the part of BUILDER and/or its subcontractors, provided that the defects shall appear or be discovered during a period of twelve (12) months after the
ACTUAL DELIVERY DATE (the “WARRANTY PERIOD”) if notice thereof is duly given to BUILDER; provided however that the WARRANTY PERIOD shall be extended for a further period of nine (9) months in respect of any work done by BUILDER to
remedy any defect under this Article IX. For the purpose of this Article IX, the DRILLSHIP includes her hull, machinery, equipment and gear, but excludes material, machinery and equipment which have been supplied by BUYER. 

 

	 	2.	Extent of BUILDER’s Responsibility: 

 (a) BUILDER shall have no responsibility or liability whatsoever for any defects in the DRILLSHIP other than the defects so specified in Article IX.1, and BUILDER shall not be liable in any circumstances
whatsoever for any consequential or special losses, damages or expenses including, but not limited to, loss of time, loss of profit or earnings or demurrage directly or indirectly occasioned to BUYER by reason of the defects specified in Article
IX.1 nor owing to repairs or other works done to the DRILLSHIP to remedy such defects. 
 (b) BUILDER shall not
be responsible for any defects in any part of the DRILLSHIP which may subsequent to DELIVERY of the DRILLSHIP have been replaced or in any way repaired by any other contractors (except those approved by BUILDER), nor for any defect which has been
caused or aggravated by omission or improper use and maintenance of the DRILLSHIP on the part of BUYER, its servants or agents or by ordinary wear and tear or by perils of the sea, rivers or navigations or by corrosion of the materials or by
accidents or fire or by any other circumstances whatsoever beyond the control of BUILDER. 
 (c) The undertakings
contained in this Article shall replace and exclude any other liability, guarantee, warranty and/or condition imposed or implied by LAW, customary, statutory or otherwise, by reason of the construction and sale of the DRILLSHIP by BUILDER for and to
BUYER. 
  

	 	3.	Remedy of Defects: 

 (a) BUILDER shall remedy at its expense any defects, against which the DRILLSHIP is warranted under this Article by making all necessary repairs or replacements at the SHIPYARD. 

(b) However, if it is impractical to bring the DRILLSHIP to the SHIPYARD, BUYER shall cause the necessary repairs or
replacements to be made at another place suitable for the purpose, provided that, in such event, BUILDER shall forward, procure or supply replacement parts or materials to the DRILLSHIP on cost, insurance and freight (“CIF”) terms unless
such forwarding or supply thereof to the DRILLSHIP would impair or delay the operation or working schedule of the DRILLSHIP. In this case, BUYER shall be responsible for handling of the 

  
 27 

 
replacement parts or materials after BUILDER’s CIF delivery. Thereafter, BUYER shall first try to have the defects be remedied by the DRILLSHIP’s crew as far as practically possible, in
which case no compensation by BUILDER shall be made to BUYER for the works performed by the DRILLSHIP’s crew. 
 (1) If BUYER proposes to cause the necessary repairs or replacements to be made to DRILLSHIP at any yard or works other than the SHIPYARD, BUYER shall before doing so, and in any event as soon as
possible, give BUILDER notice of the time and place where such repairs will be made. If the DRILLSHIP is not thereby delayed, nor her operation or working schedule thereby materially impaired, BUILDER shall have the right to verify by its own or
appointed representative(s) the nature and extent of the defects complained of. BUILDER shall, in such case, promptly advise BUYER after such examination has been completed, of its acceptance or rejection of defects as being covered by the
undertakings hereby provided. 
 (2) Upon BUILDER’s acceptance of defects as justifying remedy under this
Article IX.3(b), or upon the final award of an arbitration so determining, BUILDER shall reimburse BUYER the documented expenses incurred by BUYER, at completion of the repair or at the time of final award of an arbitration, as the case may be, but
such reimbursement shall not exceed the reasonably estimated cost of carrying out the warranty work at the SHIPYARD. 
 (c) In any case, the DRILLSHIP shall be taken at BUYER’s risk and expense to the place chosen, ready in all respects for such repairs or replacements and BUILDER shall not be responsible for towage,
dockage, wharfage, port charges, inspection and underwater survey costs for defects finding, and anything else incurred in BUYER’s getting and keeping the DRILLSHIP ready for such repairs and replacements. 

(d) BUILDER shall have the option to retrieve at its own cost any of the replaced equipment and parts where the defects
are remedied in accordance with the provisions of this Article IX. 
 (e) Any dispute under this Article shall be
referred to arbitration in accordance with the provisions of Article XIII.1(b). 
  

	 	4.	Notice of Defects: 

 BUYER shall notify BUILDER
in writing of any defects for which a claim is made under this Article IX as promptly as possible after the discovery thereof. BUYER’s notice shall describe the nature and ascertainable extent of the defects and the place at which the DRILLSHIP
can be made available for earliest inspection by or on behalf of the BUILDER. BUILDER shall in any event have no obligation in respect of any defects, unless notice of such defects is received by BUILDER not later than fifteen (15) days after
expiry of the WARRANTY PERIOD. 

  
 28 

 ARTICLE X 
 REMEDIES OF BUYER 
  

	 	1.	Defaults of BUILDER: 

 The following shall
constitute events of default of BUILDER under the CONTRACT (collectively, “BUILDER DEFAULTS”): 
 (a)
BUILDER voluntarily or involuntarily being made a part to any receivership, liquidation, or bankruptcy proceeding (which proceedings are not stayed within thirty (30) days of the service of such proceedings on BUILDER) or becoming insolvent or
in the event BUILDER is unable to meet all or part of its financial or other obligations under this CONTRACT, unless as a result of BUYER’s failure to make payments of not less than United States Dollars Five Million (USD 5,000,000.00) as due
under this CONTRACT; 
 (b) BUILDER fails to punctually, duly and fully comply with any of its material
obligations (other than those obligations referred to in Article X.1.(a), (c) and (d)) under this CONTRACT and such failure is not cured within thirty (30) days of notice from BUYER or if the default is not reasonably capable of being
remedied within thirty (30) days, the failure by BUILDER to commence remedial action within the same thirty (30) day period and to diligently proceed with such action; 

(c) The occurrence of any of the deficiencies or delays set out in Article III that entitle BUYER to terminate this
CONTRACT; or 
 (d) Breach of BUILDER’s obligations under Article XXI.10. 

 

	 	2.	Remedies: 

 In the event of a BUILDER DEFAULT,
BUYER may at its option elect to proceed on either one of the following options: 
 (a) terminate this CONTRACT
in the manner set out in Article III; or 
 (b) without prejudice to BUYER’s right to recover liquidated
damages for delays or deficiencies pursuant to Article III, BUYER may allow BUILDER to continue to complete the construction of the DRILLSHIP. 

BUYER shall indicate its option within thirty (30) days from BUILDER’s request to exercise its option, failing which BUYER is deemed to have
waived its right to terminate this CONTRACT. 
 In the event that BUYER elects to terminate the CONTRACT due to a BUILDER DEFAULT: 

(a) BUYER shall notify BUILDER in writing of its intention to do so and such termination shall be effective as of the date
when such notice is received by BUILDER. 
 (b) BUILDER shall refund (together with interest at the DEFAULT
INTEREST RATE) to BUYER the full amount of all sums received by BUILDER on account of the DRILLSHIP excluding any PC SUM paid and shall at BUYER’s option and BUILDER’s costs make available the BUYER’S SUPPLIES at the SHIPYARD for

  
 29 

 
return to BUYER, alternatively, at BUYER’s option and without obligation on BUYER, in respect of the BUYER’S SUPPLIES pay to BUYER the invoiced cost of same on production by BUYER of
reasonable evidence of the costs of purchase of the BUYER’S SUPPLIES. 
 (c) BUYER shall not in the event of
its termination of this CONTRACT be entitled to any liquidated damages for any reason whatsoever. 
 (d) Upon
such refund by BUILDER to BUYER as aforementioned, all obligations, duties and liabilities of each of the parties to the other under this CONTRACT shall be forthwith completely discharged, and the uncompleted DRILLSHIP shall belong to BUILDER and
BUYER shall have no further claim on BUILDER. 
 In the event BUYER elects to allow BUILDER to continue to complete the
construction of the DRILLSHIP, BUILDER shall pay BUYER the liquidated damages due pursuant to Article III and BUILDER shall work with BUYER to produce an acceptable schedule for the completion of the remaining work on the DRILLSHIP and work
diligently to complete the construction of the DRILLSHIP. 
  

	 	3.	Notice: 

 The payments made by BUYER prior to the
DELIVERY of the DRILLSHIP shall be in the nature of advances to BUILDER. If BUYER shall exercise its right of termination of this CONTRACT under Article III.1 or Article VIII.4, then BUYER shall immediately notify BUILDER of its termination of this
CONTRACT and such termination shall be effective as of the date when the notice is received by BUILDER. 
  

	 	4.	Refund by BUILDER: 

 Unless BUILDER duly contests
any termination by BUYER pursuant to Article XIII, BUILDER shall promptly refund to BUYER the full amount of all sums paid by BUYER to BUILDER on account of the DRILLSHIP. 
 In such event, BUILDER shall pay BUYER interest at the DEFAULT INTEREST RATE on the amount required herein to be refunded to BUYER, computed from the respective date following the date of receipt by
BUILDER of each PAYMENT MILESTONE, instalment or advance payment to the date of remittance of such refund to BUYER by BUILDER; provided, however, that if the said termination by BUYER is made under the provisions of Article III, then in such event
BUILDER shall not be required to pay any interest. 
 As security for the due performance of its obligations under this Article X, BUILDER shall
provide BUYER with a transferable Irrevocable Stand-by Letter of Credit issued by K-EXIM or BUILDER’S BANK, in form and substance as annexed hereto, as Exhibit A, which cover the full amount of all sums paid by BUYER to BUILDER on account of
the DRILLSHIP less the non-refundable design fee and any interest payable thereon, if a termination will become effective pursuant to this Article. 
  

	 	5.	Discharge of Obligations: 

 Upon such refundment
by BUILDER to BUYER, all obligations, duties and liabilities of each of the parties to the other under this CONTRACT shall be forthwith completely discharged. 

  
 30 

 ARTICLE XI 
 REMEDIES OF BUILDER 
  

	 	1.	Definition of Default: 

 BUYER shall be deemed to
be in default under this CONTRACT in the following cases: 
 (a) BUYER fails to pay either of the PAYMENT
MILESTONES to BUILDER on their respective due dates pursuant to Article II.3 of this CONTRACT; 
 (b) BUYER fails
to take DELIVERY of the DRILLSHIP when the DRILLSHIP is duly tendered for DELIVERY by BUILDER under the provisions of Article VII; 
 (c) BUYER fails to punctually, duly and fully comply with any of its material obligations (other than those obligations referred to in Article XI.1.(a), (b) and (d)) under this CONTRACT and such
failure is not cured within thirty (30) days of notice from BUILDER or if the default is not reasonably capable of being remedied within thirty (30) days, the failure by BUYER to commence remedial action within the same thirty
(30) day period and to diligently proceed with such action; or 
 (d) BUYER voluntarily or involuntarily
being made a part to any receivership, liquidation, or bankruptcy proceeding (which proceedings are not stayed within thirty (30) days of the service of such proceedings on BUYER) or becoming insolvent, unless as a result of BUILDER’s
failure to make payments of not less than United States Dollars Five Million (USD 5,000,000) as due under this CONTRACT. 
  

	 	2.	Interest and Charges: 

 If BUYER shall be in
default of payment of any PAYMENT MILESTONE as provided in Article XI.1(a), BUYER shall pay interest on such PAYMENT MILESTONE at the DEFAULT INTEREST RATE from the due date thereof to the date of payment of the full amount including interest to
BUILDER. In case BUYER shall fail to take DELIVERY of the DRILLSHIP as provided in Article XI.1(b), BUYER shall be deemed to be in default of payment of PAYMENT MILESTONE 2 and shall pay interest thereon at the same rate as aforesaid from and
including the day on which the DRILLSHIP is duly tendered for DELIVERY by BUILDER . 
  

	 	3.	Effect of Default: 

 (a) If any default by BUYER occurs as defined in Article XI.1(a), (b), (c) or (d), the DELIVERY DATE shall be automatically postponed for the period of continuance of such default by BUYER and
BUILDER shall not be obliged to pay any liquidated damages for the delay in delivery of the DRILLSHIP caused thereby. In such event, BUYER shall be responsible for all costs and expenses incurred by BUILDER by reason of such postponement.

 (b) If any default by BUYER as defined in Article XI.1 (a) or (b) continues for a period of seven
(7) days, or if any default by BUYER as defined in Article XI.1(c) or (d) occurs, BUILDER may, at its option, terminate this CONTRACT by giving written notice to such effect to BUYER. 

(c) In the event of termination of this CONTRACT as a result of BUYER’s default under this CONTRACT, BUILDER shall be
entitled to retain and apply any PAYMENT MILESTONE paid by BUYER to BUILDER on account of this CONTRACT to the recovery of BUILDER’s loss and damage plus any reasonably 

  
 31 

 
estimated profit which BUILDER would have been entitled to receive if the DRILLSHIP had been completed and DELIVERED less the purchase price of any portion of the DRILLSHIP that has been utilized
on BUILDER’s other projects, but excluding any consequential or special damages. 
  

	 	4.	Sale of DRILLSHIP: 

 (a) If BUILDER terminates this CONTRACT as provided in this Article XI and elects to sell the DRILLSHIP in its completed or uncompleted state, BUILDER shall be entitled to retain and apply any PAYMENT
MILESTONE paid by BUYER to BUILDER on account of this CONTRACT and to apply the same in accordance with Article XI.4. Further, BUILDER shall have the full right and power either to complete or not to complete the DRILLSHIP as it deems fit but in any
event shall use its reasonable endeavours to sell the DRILLSHIP (either in its complete or incomplete form) at public or private sale on such terms and conditions as BUILDER may determine without being responsible for any loss or damage. 

(b) In the event of the sale of the DRILLSHIP in its completed state, the proceeds of sale received by BUILDER (the
“COMPLETED SALE PROCEEDS”) shall be applied as follows: firstly to payment of all costs and expenses attending such sale and otherwise incurred by BUILDER as a result of BUYER’s default, and secondly to payment of all unpaid PAYMENT
MILESTONES and interest on such PAYMENT MILESTONES at the DEFAULT INTEREST RATE from the respective due dates thereof to the date of application (collectively, the “COMPLETED OUTSTANDING AMOUNT”). In the event the COMPLETED OUTSTANDING
AMOUNT exceeds the sum of the COMPLETED SALE PROCEEDS, BUYER shall remit the difference to BUILDER, provided that, in no event shall such difference exceed the CONTRACT PRICE. In the event the COMPLETED SALE PROCEEDS exceeds the COMPLETED
OUTSTANDING AMOUNT, then BUILDER shall remit the difference to BUYER. 
 (c) In the event of the sale of the
DRILLSHIP in its uncompleted state, the proceeds of sale received by BUILDER (the “INCOMPLETE SALE PROCEEDS”) shall be applied as follows: firstly to payment of all costs and expenses attending such sale and otherwise incurred by BUILDER
as a result of BUYER’s default, secondly to payment of all costs of construction of the DRILLSHIP to date of termination of the CONTRACT less the PAYMENT MILESTONE(S) retained by BUILDER pursuant to Article XI.4(a) above and, thirdly to
BUILDER’s reasonably estimated profit to which it would have been entitled to receive if the DRILLSHIP had been completed and DELIVERED (collectively, the “INCOMPLETE OUTSTANDING AMOUNT”). In the event the INCOMPLETE OUTSTANDING
AMOUNT exceeds the sum of the INCOMPLETE SALE PROCEEDS plus any previously paid PAYMENT MILESTONES, BUYER shall remit the difference to BUILDER, provided that, in no event shall such difference exceed the CONTRACT PRICE. In the event the INCOMPLETE
SALE PROCEEDS plus any previously paid PAYMENT MILESTONES exceeds the INCOMPLETE OUTSTANDING AMOUNT, then BUILDER shall remit the different to BUYER. 
 (d) If BUILDER sells to a third party or utilizes for its other projects any portion of the DRILLSHIP that BUILDER intends to elect to sell in accordance with Article XI.4.(b) or (c) in its completed
or uncompleted state, such sale price (or the purchase price of such re-used portion) shall be deducted from the COMPLETED SALE PROCEEDS or the INCOMPLETE SALE PROCEEDS (as the case may be). 

  
 32 

	 	5.	Remedies Cumulative: 

 No remedy referred to in
this Article XI is intended to be exclusive, but each shall be cumulative and is in addition to, and may be exercised concurrently with, any other remedy which is referred to in this Article XI, or which may otherwise be available to BUILDER
including, without limitation, the right to terminate this CONTRACT. 
 No express or implied waiver by BUILDER of any default of BUYER shall in
any way be, or be construed to be, a waiver of any other, further or subsequent default of BUYER. 

  
 33 

 ARTICLE XII 
 INSURANCE 
  

	 	1.	Extent of Insurance Coverage: 

 From the time of
launch of the DRILLSHIP until the DRILLSHIP is completed, delivered to and accepted by BUYER, BUILDER shall, at its own cost and expense, keep the DRILLSHIP and all machinery, materials, equipment, appurtenances and outfit, delivered to the SHIPYARD
for the DRILLSHIP, or built into or installed in or upon the DRILLSHIP, including BUYER’S SUPPLIES, insured with Korean insurance companies under insurance coverage corresponding to the Institute of London Underwriters Clauses for
Builder’s Risks. 
 The amount of such insurance coverage shall, up to the ACTUAL DELIVERY DATE of the DRILLSHIP, be in an amount at least
equal to, but not limited to, the aggregate of the payments made by BUYER to BUILDER plus the value of BUYER’S SUPPLIES in custody of the SHIPYARD, if any. The insurance referred to hereinabove shall be taken out in the name of BUILDER and all
losses under the insurance shall be payable to BUILDER and BUYER as their interests may appear. 
 If BUYER so requests, BUILDER shall at
BUYER’s cost procure insurance on the DRILLSHIP and all parts, materials, machinery and equipment intended therefore against other risks not provided in this Article XII.1 and shall make all arrangements to that end. The cost of such insurance
shall be reimbursed to BUILDER by BUYER upon delivery of the DRILLSHIP. 
 The BUILDER shall obtain and maintain any additional insurance
required by Korean law. 
  

	 	2.	Application of Recovered Amount: 

 (a) Partial Loss 
 (1) If the DRILLSHIP shall be damaged by any
insured cause whatsoever prior to acceptance thereof by BUYER and in the further event that such damage shall not constitute an actual, constructive, arranged or compromised total loss of the DRILLSHIP, BUILDER shall apply the amount recovered under
the insurance referred to in Article XII.1 to the repair of such damage to the CLASSIFICATION SOCIETY’s satisfaction and in accordance with the SPECIFICATIONS however subject to a reasonable postponement of the DELIVERY DATE and adjustment of
other terms of this CONTRACT (including CONTRACT PRICE) as may be necessary and as agreed by the parties in writing, and BUYER shall accept the DRILLSHIP under this CONTRACT when completed in accordance with this CONTRACT and the SPECIFICATIONS.

 (b) Total Loss 
 (1) If the DRILLSHIP is determined to be an actual, constructive, arranged or compromised total loss, BUILDER shall by agreement between the parties hereto, either: 

(i) proceed in accordance with the terms of this CONTRACT, in which case the amount recovered under said insurance shall
be applied to the reconstruction and repair of the DRILLSHIP’s damage, provided the parties hereto shall have further agreed in writing as to such reasonable postponement of the DELIVERY DATE and adjustment of other terms of this CONTRACT
(including the CONTRACT PRICE) as may be necessary for the completion of such reconstruction and repair; or 

  
 34 

 (ii) refund immediately to BUYER the amount of all PAYMENT MILESTONES paid
to BUILDER under this CONTRACT plus an amount equal to the value of any BUYER’S SUPPLIES which shall have become a total loss as aforesaid without any interest, whereupon this CONTRACT shall be deemed to be terminated and all rights, duties,
liabilities and obligations of each of the parties towards the other shall terminate forthwith. 
 If the parties fail to reach
all necessary agreements within two (2) months after the DRILLSHIP is determined to be an actual, constructive, arranged or compromised total loss, the provisions of Article XII.2(b)(ii) shall apply. 

 

	 	3.	Redelivery of BUYER’S SUPPLIES: 

 If the
DRILLSHIP shall be determined to be an actual, constructive, arranged or compromised total loss and it shall not be agreed between the parties that the DRILLSHIP is to be reconstructed as aforesaid, BUILDER shall redeliver to BUYER at the SHIPYARD
any BUYER’s SUPPLIES which shall not have become a total loss. 
  

	 	4.	Termination of BUILDER’s Obligation to Insure: 

 BUILDER’s obligations to insure the DRILLSHIP hereunder shall cease and terminate forthwith upon DELIVERY thereof to BUYER. 

  
 35 

 ARTICLE XIII 
 DISPUTES AND ARBITRATION 
  

	 	1.	Proceedings: 

 If any dispute, controversy or
difference shall arise between the parties hereto out of or in relation to or in connection with this CONTRACT which cannot be settled by the parties themselves, it shall be resolved as follows: 

(a) Any dispute concerning the DRILLSHIP’s compliance or non-compliance with the rules and regulations of the
CLASSIFICATION SOCIETY or another regulatory body shall be referred to the principal or other appointed surveyor of the CLASSIFICATION SOCIETY (acting as assessor not as arbitrator), as the case may be, the decision of whom shall be final and
binding upon the parties hereto. If the CLASSIFICATION SOCIETY declines or fails to appoint a surveyor to act as above or if the surveyor fails to make a determination of disputes referred to him in a period of ten (10) days, unless the parties
agree to extend such a period, the matter shall be referred for determination in accordance with Article XIII.1(b) or (c). 
 (b) Any dispute relating solely to technical matters concerning the construction, material or quality of work under this CONTRACT or the SPECIFICATIONS, except as set out in Article XIII.1(a) as well as
any other matters specifically mentioned in this CONTRACT in this regard shall be referred to the CLASSIFICATION SOCIETY or, as agreed to by the parties, a suitably qualified expert who (if the parties cannot agree on his identity) shall be
appointed by the President for the time being of the Royal Institute of Naval Architects, London (the “TECHNICAL EXPERT”). The TECHNICAL EXPERT or CLASSIFICATION SOCIETY shall act as assessor and not an arbitrator and shall provide the
parties with a written determination of the dispute within ten (10) days of referral of the dispute, unless the parties otherwise agree to extend such period. Such determination shall include findings as to any required extension of the
DELIVERY DATE by reason of the dispute and may also include a finding as to payment of costs incurred in the proceedings. His determination thus made shall be final and binding on the parties. 

(c) All other disputes shall be referred to arbitration in London, England, and unless the parties shall agree within
fifteen (15) days upon the appointment of a sole arbitrator, one arbitrator shall be appointed by BUILDER and the other by BUYER, and in case the arbitrators cannot agree, then to the decision of an umpire who shall be chosen and appointed by
the two arbitrators. 
 Such arbitration shall be conducted in accordance with the Arbitration Act 1996 of United Kingdom or any
re-enactment or statutory modification thereof for the time being in force and with the rules of The London Maritime Arbitrators’ Association for the time being in force. 
 The award of the arbitrators or the umpire shall be final and binding on the parties. 
 If the two arbitrators fail to choose and appoint a third arbitrator, either of the said two arbitrators may apply to the President for the time being of The London Maritime Arbitrators’ Association
to choose and appoint a third arbitrator. 

  
 36 

	 	2.	Alteration of Delivery of the DRILLSHIP: 

 In the
event of reference to the CLASSIFICATION SOCIETY or other regulatory bodies or to arbitration of any dispute or disputes arising or occurring prior to delivery of the DRILLSHIP, the award by the party deciding the said dispute or disputes shall
include a declaration as to any postponement of the DELIVERY DATE which the party deciding the dispute or disputes may in his/their absolute discretion deem appropriate. 

 

	 	3.	Entry in Court: 

 Judgement on an award by
arbitrators may be entered in any court of competent jurisdiction for enforcement thereof. 

  
 37 

 ARTICLE XIV 
 RIGHT OF ASSIGNMENT 
  

	 	1.	Assignment and Transfer: 

 Neither party shall
assign or transfer all or any part of its rights or obligations under this CONTRACT to any third party without the prior written consent thereto of the other party save that nothing herein shall prevent BUYER from assigning the benefit of this
CONTRACT by way of security for any loan provided to BUYER by any one or more banks or other financial institutions to finance its purchase of the DRILLSHIP hereunder and provided further that BUYER may assign its rights under this CONTRACT or the
right to take title to the DRILLSHIP upon DELIVERY to an AFFILIATE upon written notice to BUILDER. No such assignment shall be binding upon BUILDER unless notice hereof is given to BUILDER. 

 

	 	2.	Associated Costs: 

 In the event of any such
assignment by either party, all costs including legal and other costs incurred in relation thereto shall be borne and paid for by the assignor, and the assignor shall remain liable under this CONTRACT to the other party to the same extent as it was
prior to the making of the assignment and shall cause the assignee to observe and respect the terms thereof. 
  

	 	3.	Security Assignments: 

 In connection with any
security assignment of this CONTRACT provided to the BUYER’s banks, the BUILDER shall execute and deliver any reasonable acknowledgement of such security provided to it by the BUYER. 

 

	 	4.	Binding Nature: 

 This CONTRACT shall be binding
upon the respective successors of the parties and effective for the benefit their respective assigns. 

  
 38 

 ARTICLE XV 
 TAXES AND DUTIES 
  

	 	1.	Taxes and Duties in Korea: 

 BUILDER shall bear
and pay all taxes and duties levied or imposed in Korea in connection with the execution and/or performance of this CONTRACT, except any taxes and duties imposed in Korea upon BUYER’S SUPPLIES or upon the activities or personal incomes of
BUYER’s employees and agents (including the REPRESENTATIVES and representatives of the manufacturers of BUYER’S SUPPLIES). 
  

	 	2.	Taxes and Duties outside Korea: 

 BUYER shall
bear and pay all taxes and duties levied or imposed upon BUYER outside Korea in connection with execution and/or performance of this CONTRACT except for any taxes and duties imposed upon those items or services to be procured by BUILDER for
construction of the DRILLSHIP. 

  
 39 

 ARTICLE XVI 
 PATENTS, TRADEMARKS, COPYRIGHTS, ETC. 
  

	 	1.	Patents, Trademarks and Copyrights: 

 (a) BUILDER shall defend and indemnify BUYER against all damages, losses, liabilities, costs and expenses (including all legal costs and expenses but excluding BUYER’s internal costs and expenses)
reasonably incurred by BUYER as a result of all actual or alleged claims for infringement of patent rights, copyrights, service marks or trademarks in connection with the construction of the DRILLSHIP by BUILDER at the SHIPYARD, but no such
warranty, liability or indemnity shall extend to the BUYER’S SUPPLIES or BUYER’s operation or use of the DRILLSHIP, its equipment, apparatus or systems. 

(b) Nothing contained herein shall be construed as transferring such patent, trademark, service mark or copyright covered
by this CONTRACT, and all such rights are hereby expressly reserved to the true and lawful owners thereof. 
 (c)
BUYER shall defend and indemnify BUILDER and its subcontractors against all damages, losses, liabilities, costs and expenses (including all legal costs and expenses) reasonably incurred by BUILDER as a result of all actual or alleged claims for
infringement of patent rights brought by a third party in connection with BUYER’S SUPPLIES or BUYER’s operation or use of the DRILLSHIP, its equipment, apparatus or systems. In order to obtain such defence and indemnity, BUILDER shall
immediately notify BUYER in writing of any claims received, and BUILDER shall allow BUYER to take over the defence of the claim. BUILDER shall provide BUYER with reasonable assistance required by BUYER to defend the claim. 

 

	 	2.	General Plans, Specifications and Working Drawings: 

 BUILDER retains all rights with respect to basic design, detailed design, plans, working drawings, technical descriptions, calculations, test results and other data, information and documents concerning
the design and construction of the DRILLSHIP, and BUYER undertakes therefore not to disclose the same or divulge any information contained therein directly or indirectly to any third parties, without the prior written consent of BUILDER, except
where it is necessary for the usual operation, repair and maintenance or upgrades of the DRILLSHIP. In the event that BUYER breaches its obligations and undertakings under Clause 2 of this Article, BUILDER is entitled to make a claim and/or bring
suit against BUYER in respect of any loss and damage whatsoever suffered by BUILDER as result of any such breach by BUYER. 
 All intellectual
property owned by BUYER prior to entering into this CONTRACT and all intellectual property developed solely by BUYER during the term of this CONTRACT shall belong to BUYER. If the parties jointly develop any intellectual property associated
with this CONTRACT, the parties agree to negotiate in good faith and to execute a development agreement to identify and allocate ownership rights in the jointly developed intellectual property. 

  
 40 

 ARTICLE XVII 
 BUYER’S SUPPLIES 
  

	 	1.	Responsibility of BUYER: 

 (a) BUYER shall, at its own risk, cost and expense, supply and deliver to BUILDER all of the items to be furnished by BUYER as set out in the SPECIFICATIONS (“BUYER’S SUPPLIES”) at
warehouse or other storage of the SHIPYARD in good condition ready for installation or use in or on the DRILLSHIP, in accordance with the time schedule designated by BUILDER to meet the building schedule of the DRILLSHIP. 

(b) In order to facilitate installation or use by BUILDER of BUYER’S SUPPLIES in or on the DRILLSHIP, BUYER shall
furnish BUILDER with necessary SPECIFICATIONS, plans, drawings, instruction books, manuals, test reports and certificates required by BUILDER. BUYER, if so requested by BUILDER, shall, without any charge to BUILDER, cause representatives of the
manufacturers of BUYER’S SUPPLIES to assist BUILDER in installation thereof in or on the DRILLSHIP and/or to carry out installation thereof by themselves or to make necessary adjustments, tests and inspection thereof at the SHIPYARD.

 (c) Any and all of BUYER’S SUPPLIES shall be subject to BUILDER’s reasonable right of rejection if
they are found to be unsuitable or in improper condition for installation or use. However, if so requested by BUYER, BUILDER may repair or adjust BUYER’S SUPPLIES without prejudice to BUILDER’s other rights hereunder and without being
responsible for any consequences arising therefrom. In such case, according to Articles V.4 and V.5, BUYER shall compensate BUILDER for all costs and expenses incurred by BUILDER in such repair or adjustment and the DELIVERY DATE shall be postponed
for any period of delay in the construction of the DRILLSHIP caused by the making of such repair or adjustment. 

(d) Should BUYER fail to deliver any of BUYER’S SUPPLIES within the time designated by BUILDER, the DELIVERY DATE
shall be extended for the period of such delay in delivery of BUYER’S SUPPLIES if such delay in delivery shall affect the DRILLSHIP’s construction or the DELIVERY DATE of the DRILLSHIP. In such event, BUYER shall be responsible for all
losses and damages incurred by BUILDER by the reason of such delay in delivery of BUYER’S SUPPLIES and such payment shall be made upon delivery of the DRILLSHIP. 

(e) If delay in delivery of any of the BUYER’S SUPPLIES exceeds fifteen (15) days, then the BUILDER shall be
entitled to proceed with construction of the DRILLSHIP without installation thereof in or on the DRILLSHIP, without prejudice to the BUILDER’s other rights as hereinabove provided, and the BUYER shall accept and take delivery of the DRILLSHIP
as so constructed. 
  

	 	2.	Responsibility of BUILDER: 

 BUILDER shall be
responsible for the storing and handling with reasonable care of BUYER’S SUPPLIES after delivery thereof to the SHIPYARD, and shall, at its own cost and expense, install them in or on the DRILLSHIP, unless otherwise provided herein or agreed by
the parties hereto, provided, always, that BUILDER shall not be responsible for quality, efficiency and/or performance of any of BUYER’S SUPPLIES and for the loss of or damage to BUYER’S SUPPLIES caused without BUILDER’s wilful
misconduct or gross negligence. 

  
 41 

	 	3.	Return of BUYER’S SUPPLIES 

 Where under any
provision of this CONTRACT BUILDER shall be required either to refund the value of or to return BUYER’s SUPPLIES to BUYER, then BUILDER shall lawfully discharge any such obligation by returning the BUYER’S SUPPLIES in question FOB Okpo or,
in BUILDER’s option by paying to BUYER the invoiced cost to BUYER of such supplies CIF Okpo. 

  
 42 

 ARTICLE XVIII 
 REPRESENTATIVES 
  

	 	1.	BUYER’s REPRESENTATIVE: 

 BUYER’s
REPRESENTATIVE and address designated for the purpose of notices and other communications under this CONTRACT shall be as follows: 
 ALPHA
EAGLE COMPANY 
 c/o Atwood Oceanics Management, LP 
 15835 Park Ten Place Drive 
 Houston, Texas 

United States of America 
 Telephone No.:
 +1 281-749-7944 
 Fax No.:             +1281-578-3253 

Email:                 gwagner@atwd.com 

Attention:           Geoffrey Wagner 
 unless and until BUYER notifies BUILDER otherwise in writing. 
  

	 	2.	BUILDER’s Representative 

 BUILDER’s
representative and address designated for the purpose of notices and other communications under this CONTRACT shall be as follows: 
 DAEWOO
SHIPBUILDING & MARINE ENGINEERING CO., LTD. 
 1, Aju-dong, Geoje-si, 
 Gyeong nam, 656-714 
 Korea 
 Attention:         Mr. H.S. Yang 
 Telephone:
      82 55 680 5499 
 Telefax:             82 55 681
7428 
 unless and until BUILDER notifies BUYER otherwise in writing. 

  
 43 

 ARTICLE XIX 
 NOTICE AND LANGUAGE 
  

	 	1.	Notice: 

 Except as may be more specifically set
out in any particular provision of this CONTRACT, any and all notices, requests, demands, instructions, advices and communications in connection with this CONTRACT shall be in writing and shall be conveyed by registered airmail, by express courier
service, personally, or by telefax or email and shall be deemed to be given at, and become effective from, the time when the same is delivered to (or in the case of a telefax or email received at) the address of the party to be served. 

 

	 	2.	Language: 

 Any and all notices and
communications in connection with this CONTRACT shall be written in the English language. 
  

	 	3.	Writing 

 A telefax or email message shall be
deemed to be a notice “in writing” for purposes of this CONTRACT. 

  
 44 

 ARTICLE XX 
 EFFECTIVE DATE OF CONTRACT 
 This CONTRACT shall become effective from the date of
its execution by both BUYER and BUILDER (the “EFFECTIVE DATE”). However, if BUILDER fails to provide BUYER with the Irrevocable Stand-by Letter of Credit referred to in Article X.4 within thirty (30) days after the date of execution
of the CONTRACT, then the CONTRACT shall automatically become null and void, unless otherwise mutually agreed in writing between the parties hereto, and the parties shall be immediately and completely discharged from all of their obligations to the
other party under this CONTRACT as though this CONTRACT had never been entered into at all. 

  
 45 

 ARTICLE XXI 
 INTERPRETATION AND OTHER MATTERS 
  

	 	1.	Laws Applicable: 

 The parties hereto agree that
the validity and interpretation of this CONTRACT and of each Article and part thereof shall be governed by the laws of England. 
  

	 	2.	Discrepancies: 

 In the event of any conflict
between this CONTRACT and the SPECIFICATIONS, the provisions of this CONTRACT shall prevail. In the event of any conflict between the SPECIFICATIONS and design, the provisions of the SPECIFICATIONS shall prevail. 

 

	 	3.	Entire Agreement: 

 This CONTRACT contains the
entire agreement and understanding between the parties hereto and supersedes all prior negotiations, representations, undertakings and agreements on any subject matter of this CONTRACT. 

 

	 	4.	Amendment: 

 No provision of this CONTRACT may be
amended, modified, waived or terminated except by an instrument in writing executed by each of the parties hereto. 
  

	 	5.	Headings: 

 The descriptive headings of Articles
and Clauses herein are for convenience of reference only and are not to be used in construing or interpreting this CONTRACT. 
  

	 	6.	Severability: 

 Any provision of this CONTRACT
which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such provisions in any other jurisdiction. To the extent permitted by applicable laws, both parties hereby waive any provision of law which renders any provision
hereof prohibited or unenforceable in any respect. 
  

	 	7.	Order of precedence of CONTRACT Documents: 

 In
case of inconsistency between contract documents, the CONTRACT shall take precedence over the SPECIFICATIONS and the Drawings and the SPECIFICATIONS shall take precedence over the Drawings. 

 

	 	8.	Confidentiality: 

 Each party agrees that it
shall hold in strict confidence and shall not disclose to any PERSON or use any CONFIDENTIAL INFORMATION (as defined below) from and after the EFFECTIVE DATE through the period ending two (2) years after the DELIVERY DATE. Notwithstanding the
foregoing, a party may, provided that each such PERSON shall be informed of the confidential nature of such information, disclose CONFIDENTIAL INFORMATION to the officers, directors, employees, representatives, investors, lenders, counsel and other
professionals (including potential lenders and investors and their employees, counsel and other professionals) of a party and its AFFILIATES who need to know such information for purposes of (a) executing this CONTRACT and (b) the usual
operation, repair and maintenance or upgrades of the DRILLSHIP. In the event that a party is requested by subpoena, civil 

  
 46 

 
investigative demand, or any similar process to disclose any such CONFIDENTIAL INFORMATION, such party will provide the other party with prompt notice of such request, demand or interrogatories
so that the other party may seek an appropriate protective order. In the event that a protective order or injunction prohibiting disclosure is not obtained, then such party may furnish only so much of the CONFIDENTIAL INFORMATION as, in the
reasonable written opinion of its legal counsel (copy being simultaneously provided to the other party), is required and shall preserve the confidentiality of the remainder in accordance with this Article XXI.8. Should a party, its AFFILIATES or
their agents or representatives disclose or use any CONFIDENTIAL INFORMATION for the direct or indirect benefit or use of themselves or any other PERSON, or otherwise breach this Article XXI.8, any benefits obtained by such party or any such other
PERSON shall be held in trust for the sole benefit of the other party. The parties agree that because an award of money damages (whether pursuant to the foregoing sentence or otherwise) would be inadequate for any breach of this Article XXI.8, any
such breach would cause the each party irreparable harm and therefore the non-breaching party shall be entitled, without the requirement of posting a bond or other security, to equitable relief, including injunctive relief and specific performance.

 As used herein, “CONFIDENTIAL INFORMATION” shall mean this CONTRACT and all information (written or digital) relating to BUILDER,
BUYER or the negotiation or substance of this CONTRACT and any other ancillary agreements, whether or not marked with any legends or other markings indicating the information to be proprietary or confidential. CONFIDENTIAL INFORMATION shall not
include information to the extent, but only to the extent, disclosure thereof (or the terms and conditions thereof) is required by LAW, information which the disclosing party can demonstrate is or becomes generally available to the public other than
as a result of disclosure by such party or its AFFILIATES and information necessary for a party to enforce its rights under this CONTRACT or defend against indemnification claims under this CONTRACT. The parties’ obligations under this Article
XXI.8 shall survive the termination of this CONTRACT. 
  

	 	9.	Public Announcements: 

 No press or other public
announcement, or public statement or comment in response to any inquiry, relating to the transactions contemplated by this CONTRACT shall be issued or made by either party without consultation with the other party; provided, that a press release or
other public announcement, regulatory filing, statement or comment made without such consultation shall not be in violation of this Article XXI.9 if it is made (i) in order to comply with such LAW or stock exchange policies or (ii) to
PERSONS holding consent or approval rights that may be applicable to the transactions contemplated by this CONTRACT. Furthermore, in all instances, prompt notice from one party to the other shall be given with respect to any such release,
announcement, statement or comment. 
  

	 	10.	Foreign Corrupt Practices Act: 

 BUILDER
represents warrants and agrees that it will comply with all applicable anti-bribery laws in any country in which any aspect of this CONTRACT will take place, including the U.S. Foreign Corrupt Practices Act (“FCPA”). 

BUILDER represents, warrants and agrees that, in connection with the performance of its obligations hereunder, it shall not make any direct or indirect
payments, in money or any other item of value (including gifts) or make any offers or promises to pay any money or any other item of value (including gifts) to: 

  
 47 

 (a) any government or public official; 

(b) any political party; 
 (c) any candidate for political office; or 
 (d) any other person
or entity, with the knowledge that such payment, offer or promise to pay will be made to any government official for the purpose of influencing such government official to obtain or retain business or to make any decisions favorable to BUYER,
BUILDER, or both. 
 BUILDER further represents that no government official is a principal, owner, officer, employee or agent of any entity in
which BUILDER has an interest, and no government official has any material financial interest in the business of BUILDER. 
 BUILDER affirms
that BUYER shall have the right to audit BUILDER’s books and records, as warranted, to ensure compliance with this CONTRACT. These audit rights do not extend beyond the records relating to BUILDER’S performance of this CONTRACT.

 In the event of any breach by BUILDER of any of its representations, warranties or covenants contained in this provision, BUYER may, in its
sole discretion in addition to any other remedy provided herein or otherwise provided by LAW, immediately terminate this CONTRACT without notice or indemnity and in such event, BUILDER shall forfeit all rights to all fees and commissions which shall
accrue and/or have been earned but which have not been paid as of the date of such termination. 
  

	 	11.	COUNTERPARTS: 

 This CONTRACT may be executed by
each of the parties hereto on any number of separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument. Delivery of an executed signature page of this CONTRACT in Portable
Document Format (PDF) or by facsimile transmission shall be effective as delivery of an executed original counterpart of this CONTRACT, although the original signature pages shall thereafter be appended to this CONTRACT. 

  
 48 

 IN WITNESS WHEREOF, the parties hereto have caused this CONTRACT to be signed by their duly
authorized signatories the day and year first above written. 
  

									
	For and on behalf of:	 		 	For and on behalf of:
	 ALPHA EAGLE

COMPANY
	 		 	 DAEWOO SHIPBUILDING &
 MARINE ENGINEERING CO., LTD.

					
	By:	 	/s/ Noel Baldwin        	 		 	By:	 	/s/ Sang-Tae Nam         
	Name:	 	Noel Baldwin	 		 	Name:	 	Sang-Tae Nam
	Title:	 	Director	 		 	Title:	 	President & CEOExhibit 10.3

 Exhibit 10.3 
 EMPLOYEE BENEFITS AND OTHER EMPLOYMENT 
 MATTERS ALLOCATION AGREEMENT 

by and between 

MARRIOTT INTERNATIONAL, INC. 
 and 
 MARRIOTT VACATIONS WORLDWIDE CORPORATION 

 TABLE OF CONTENTS 

 

							
	 ARTICLE I
	 	 DEFINITIONS
	  	 	2	  
	 Section 1.01
	 	 Definitions
	  	 	2	  
	 Section 1.02
	 	 Other Terms
	  	 	6	  
	 Section 1.03
	 	 Certain Constructions
	  	 	6	  
	 Section 1.04
	 	 Schedules, Sections
	  	 	6	  
	 Section 1.05
	 	 Survival
	  	 	6	  
			
	 ARTICLE II
	 	 EMPLOYEE BENEFITS
	  	 	8	  
	 Section 2.01
	 	 Employment
	  	 	8	  
	 Section 2.02
	 	 Profit Sharing Plans
	  	 	9	  
	 Section 2.03
	 	 Deferred Compensation Plans
	  	 	10	  
	 Section 2.04
	 	 Comprehensive Stock Plans
	  	 	11	  
	 Section 2.05
	 	 Medical/Dental/Vision Plans
	  	 	12	  
	 Section 2.06
	 	 Short-Term Disability Plan
	  	 	14	  
	 Section 2.07
	 	 Long-Term Disability Plan
	  	 	14	  
	 Section 2.08
	 	 Vacation and Sick Pay Liabilities
	  	 	14	  
	 Section 2.09
	 	 Group Term Life /AD&D/BTA Insurance Plan
	  	 	15	  
	 Section 2.10
	 	 Severance Pay Plan
	  	 	15	  
	 Section 2.11
	 	 Dependent Care Spending Account Plan
	  	 	15	  
	 Section 2.12
	 	 Other Plans
	  	 	16	  
	 Section 2.13
	 	 Preservation of Right To Amend or Terminate Plans
	  	 	16	  
	 Section 2.14
	 	 Reimbursement
	  	 	16	  
	 Section 2.15
	 	 Payroll Reporting and Tax Withholding
	  	 	16	  
			
	 ARTICLE III
	 	 LABOR AND EMPLOYMENT MATTERS
	  	 	17	  
	 Section 3.01
	 	 Separate Employers
	  	 	17	  
	 Section 3.02
	 	 Employment Policies and Practices
	  	 	17	  
	 Section 3.03
	 	 Collective Bargaining Agreements
	  	 	18	  
	 Section 3.04
	 	 Employment Claims
	  	 	18	  
	 Section 3.05
	 	 Intercompany Service Charge
	  	 	19	  
	 Section 3.06
	 	 WARN Claims
	  	 	19	  
	 Section 3.07
	 	 Employees on Leave of Absence
	  	 	19	  
	 Section 3.08
	 	 Third Party Beneficiary Rights
	  	 	19	  
	 Section 3.09
	 	 Attorney-Client Privilege
	  	 	19	  
			
	 ARTICLE IV
	 	 DEFAULT
	  	 	19	  
	 Section 4.01
	 	 Default
	  	 	19	  
	 Section 4.02
	 	 Force Majeure
	  	 	20	  

  
 i 

							
	 ARTICLE V
	 	 MISCELLANEOUS
	  	 	20	  
	 Section 5.01
	 	 Relationship of Parties
	  	 	20	  
	 Section 5.02
	 	 Access, to Information: Cooperation
	  	 	20	  
	 Section 5.03
	 	 Assignment
	  	 	20	  
	 Section 5.04
	 	 Headings
	  	 	20	  
	 Section 5.05
	 	 Severability of Provisions
	  	 	21	  
	 Section 5.06
	 	 Notices
	  	 	21	  
	 Section 5.07
	 	 Further Action
	  	 	21	  
	 Section 5.08
	 	 Waiver
	  	 	21	  
	 Section 5.09
	 	 Governing Law
	  	 	22	  
	 Section 5.10
	 	 Consent to Jurisdiction: Waiver of Jury Trial
	  	 	22	  
	 Section 5.11
	 	 Entire Agreement
	  	 	22	  

  
 ii 

 EMPLOYEE BENEFITS AND OTHER EMPLOYMENT MATTERS 

ALLOCATION AGREEMENT 
 This EMPLOYEE BENEFITS AND OTHER EMPLOYMENT MATTERS ALLOCATION AGREEMENT (“Agreement”) is made and entered into as of November 5, 2011, by and between MARRIOTT INTERNATIONAL, INC., a
Delaware corporation (“MII”) and MARRIOTT VACATIONS WORLDWIDE CORPORATION, a Delaware corporation and, prior to the Distribution, a wholly owned subsidiary of MII (“MVWC”). 

RECITALS 

WHEREAS, pursuant to that certain Separation and Distribution Agreement dated as of November 17, 2011, between MII and MVWC (the
“Distribution Agreement”) MII will distribute to the Record Holders (as defined in the Distribution Agreement) on a pro rata basis, all the outstanding shares of common stock, of MVWC owned by MII (the “Distribution”); and

 WHEREAS, pursuant to the Distribution Agreement, MII and MVWC have agreed to enter into an agreement allocating
responsibilities with respect to employee compensation, benefits, labor and certain other employment matters pursuant to the terms and conditions set forth herein. 

  
 1 

 NOW, THEREFORE, in consideration of the mutual covenants contained herein, and other
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, MII and MVWC agree as follows: 
 ARTICLE I

 DEFINITIONS 
 Section 1.01 Definitions: As used in this Agreement, the following terms shall have the meanings indicated below: 
 Adjusted MII Stock Option: a 2011 Distribution Award based on a MII Stock Option. 
 Adjusted MII SAR: a 2011 Distribution Award based on a MII SAR. 

Benefit Plans: Plans maintained by MII before the Effective Date. 

Code: the Internal Revenue Code of 1986, as amended, or any successor legislation. 

Collective Bargaining Agreement: any collective bargaining agreement or other labor agreement to which MII or any of its
Subsidiaries was a party on or before the Cut-off Date. 
 Company Contribution: the contribution by MII and its
Subsidiaries to the MII Profit Sharing Plan in accordance with the terms thereof. 
 Cut-off Date: the date immediately
preceding the Effective Date. 
 Distribution: has the meaning specified in the recitals of this Agreement. 

Distribution Agreement: the agreement described in the recitals of this Agreement. 

Distribution Date: has the meaning specified in the Distribution Agreement. 

Distribution Ratio: has the meaning specified in the Distribution Agreement. 

Effective Date: as of 12:01 a.m. on the Saturday before the Distribution Date set forth in the Distribution Agreement. 

Employee: with respect to any entity, an individual who is considered, according to the payroll and other records of such entity,
to be employed by such entity. 
 Employer Subsidy: The amount of the cost of the MII Medical/Dental/Vision Plan for an
Employee and the Employee’s eligible family members to participate in the Plan that is paid by MII, a portion of which may be paid by MVWC pursuant to Section 2.05(e). 

  
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 Employment Claim: any actual or threatened lawsuit, arbitration, ERISA claim, or
federal, state, or local judicial or administrative proceeding of whatever kind involving a demand by or on behalf of or relating to an employee or former employee, or by or relating to a collective bargaining agent of employees, or by or relating
to any federal, state, or local government agency alleging liability against an employer or against an employee pension, welfare or other benefit plan, or an administrator, trustee or fiduciary thereof. 

ERISA: the Employee Retirement Income Security Act of 1974, as amended, or any successor legislation. 

HMO: any health maintenance organization organized under 42 U.S.C. §300e-9, or a state health maintenance organization
statute that provides medical services for Retained Individuals or MVWC Individuals under any Plan. 
 IRS: the Internal
Revenue Service. 
 MI Shares: MI Share Awards under the MII Stock Plan. 

MII: Marriott International, Inc., a Delaware corporation and its Subsidiaries. 

MII Common Stock: the Class A common stock, par value $1 per share, of MII after the Effective Date. 

MII Deferred Compensation Plan: the Marriott International, Inc. Executive Deferred Compensation Plan that is continued by MII
after the Effective Date pursuant to Section 2.03(b). 
 MII Group Term Life/AD&D/BTA Insurance Plan: the
Marriott International, Inc. Group Term Life Insurance Plan, the Marriott International, Inc. Accidental Death & Dismemberment Insurance Plan and the Marriott International, Inc. Business Travel Accident Insurance Plan. 

MII Medical/Dental/Vision Plan: the Marriott International, Inc. Medical Plan, the Marriott International, Inc. Dental Plan, the
Marriott International, Inc. Vision Plan and the Marriott International, Inc. Health Care Spending Account Plan. 
 MII
Profit Sharing Plan: the Marriott International, Inc. Employees’ Profit Sharing, Retirement and Savings Plan and Trust, as in effect prior to the Effective Date. 
 MII Qualified Beneficiary: any Retained Employee who becomes a Qualified Beneficiary on or after the Effective Date and any Retained Individual who is or becomes a Qualified Beneficiary as a result
of loss in coverage under the MII Medical/Dental/Vision Plan. 
 MII Retained Business: has the meaning set forth in the
Distribution Agreement. 
 MII SAR: an unexercised, vested or unvested stock-settled stock appreciation right issued
under the MII Stock Plan which is outstanding immediately prior to the Distribution. 

  
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 MII Stock Award: an award of restricted shares, deferred bonus stock, a deferred
stock agreement or MI Shares under the MII Stock Plan. 
 MII Stock Option: an unexercised, vested or unvested
nonqualified stock option to purchase MII Common Stock issued under the MII Stock Plan which is outstanding immediately prior to the Distribution. 
 MII Stock Plan: the Marriott International, Inc. Stock and Cash Incentive Plan as maintained by MII prior to the Effective Date. 

MII Terminee: any individual formerly employed by MII or any Subsidiary of MII (including MVWC) who terminated such employment
prior to the Effective Date. 
 MVWC: has the meaning set forth in the heading hereto. 

MVWC Business: has the meaning specified in the Distribution Agreement. 

MVWC Common Stock: the common stock of MVWC. 
 MVWC Employee: has the meaning set forth in Section 2.01 hereof. 

MVWC Group: has the meaning specified in the Distribution Agreement. 

MVWC Group Term Life/AD&D/BTA Insurance Plan: The Marriott Vacations Worldwide Corporation Group Term Life Insurance Plan, the
Marriott Vacations Worldwide Corporation Accidental Death & Dismemberment Insurance Plan and the Marriott Vacations Worldwide Corporation Business Travel Accident Insurance Plan as established by MVWC in accordance with
Section 2.09(b). 
 MVWC Individual: any individual who (i) is a MVWC Employee, (ii) is, as of the Cut-off
Date, a MII Terminee whose last employment with MII or a MVWC Subsidiary was with a MVWC Business, or is a beneficiary of any individual specified in clause (i) or (ii). 
 MVWC Medical/Dental/Vision Plan: The Marriott Vacations Worldwide Corporation Medical Plan, the Marriott Vacations Worldwide Corporation Dental Plan, the Marriott Vacations Worldwide Corporation
Vision Plan and the Marriott Vacations Worldwide Corporation Health Care Spending Account Plan as established by MVWC in accordance with Section 2.05(b). 
 MVWC 401(k) Plan: the Plan intended to be qualified under Sections 401(a) and 401(k) of the Code, established or designated and maintained by MVWC pursuant to Section 2.02(b). 

MVWC Qualified Beneficiary: any MVWC Individual who is or becomes a Qualified Beneficiary on or after 11:59 p.m. November 4,
2011. 

  
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 MVWC RSUs: MVWC RSU Awards under the MVWC Stock Plan. 

MVWC SAR: an unexercised, vested or unvested nonqualified stock-settled stock appreciation right issued under the MVWC Stock Plan.

 MVWC Stock Award: an award of restricted shares, deferred bonus stock, a deferred stock agreement or MVWC RSUs under
the MVWC Stock Plan. 
 MVWC Stock Option: an unexercised, vested or unvested nonqualified stock option to purchase MVWC
Common Stock issued under the MVWC Stock Plan. 
 MVWC Stock Plan: the Marriott Vacations Worldwide Corporation Stock and
Cash Incentive Plan to be adopted by MVWC pursuant to Section 2.04(b). 
 Medical/Dental/Vision Plan: any of the
following welfare plans providing health benefits to Employees and their dependents: MII Medical/Dental/Vision Plan; and MVWC Medical/Dental/Vision Plan. 
 Non-employee Director: any member of the Board of Directors of MII who is not an Employee of MII. 
 Option: either a MII Option or a MVWC Option. 
 Plan: any plan,
policy, arrangement, contract or agreement providing compensation or benefits for any group of Employees or individual Employee, or the dependents or beneficiaries of any such Employee(s), whether formal or informal or written or unwritten, and
including, without limitation, any means, whether or not legally required, pursuant to which any benefit is provided by an employer to any Employee or the beneficiaries of any such Employee. The term “Plan” as used in this Agreement does
not include any contract, agreement or understanding relating to settlement of actual or potential Employment Claims. 

Post-Conversion Stock Price: the closing New York Stock Exchange prices per share of MVWC Common Stock or MII Common Stock, as
applicable, on the Distribution Date. 
 Post-retirement Medical Benefits: means post-retirement benefits under Welfare
Plans maintained by MII before the Effective Date. 
 Pre-Distribution Employee: an Employee who was employed by MII or
one of its Subsidiaries as of the Cut-off Date. 
 Qualified Beneficiary: an individual (or dependent thereof) who either
(1) experiences a “qualifying event” (as that term is defined in Code Section 4980B(f)(3) and ERISA Section 603) while a participant in any Medical/Dental/Vision Plan, or (2) becomes a “qualified beneficiary”
(as that term is defined in Code Section 4980B(g)(1) and ERISA 607(3)) under any Medical/Dental/Vision Plan. 

  
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 Retained Employee: has the meaning set forth in Section 2.01 hereof. 

Retained Individual: any individual who (i) is a Retained Employee, (ii) is, as of the Cut-off Date, a MII Terminee
whose last employment with MII or a Subsidiary of MII was primarily related to a MII Retained Business, or (iii) is a beneficiary of any individual described in clause (i) or (ii). 

Retained Subsidiary: a Subsidiary of MII as of the Effective Date. 

SAR: either a MII SAR or a MVWC SAR. 
 Service Credit: the period taken into account under any Plan for purposes of determining length of service or plan participation to satisfy eligibility, vesting, benefit accrual and similar
requirements under such Plan. 
 Spread: the difference between the price of a share of stock and the exercise price of
an Option or SAR to purchase that share of stock. 
 Stock Plan: either the MII Stock Plan or the MVWC Stock Plan.

 Subsidiary: has the meaning specified in the Distribution Agreement. 

Transaction Agreements: has the meaning specified in the Distribution Agreement. 

2011 Distribution Award: has the meaning set forth in Section 2.04(c) hereof. 

2011 Plan Year: means the fiscal year of a Plan ending December 31, 2011. 

Welfare Plan: any Plan which provides medical, health, disability, accident, life insurance, death, dental or any other welfare
benefit, including, without limitation, any post-employment benefit. 
 Section 1.02 Other Terms. Any capitalized
terms used herein but not defined herein shall have the meaning set forth in the Distribution Agreement. 
 Section 1.03
Certain Constructions. References to the singular in this Agreement, or in the Distribution Agreement to the extent terms in this Agreement are defined by reference to the Distribution Agreement, shall refer to the plural and vice-versa and
references to the masculine shall refer to the feminine and vice-versa. 
 Section 1.04 Schedules, Sections.
References to a “Schedule” are, unless otherwise specified, to one of the Schedules attached to this Agreement, and references to a “Section” are, unless otherwise specified, to one of the Sections of this Agreement. 

  
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 Section 1.05 Survival. Obligations described in this Agreement shall remain in
full force and effect and shall survive the Effective Date. 

  
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 ARTICLE II 
 EMPLOYEE BENEFITS 
 Section 2.01 Employment. 

(a) Allocation of Employees. MII and MVWC shall take all steps necessary or appropriate so that all of the Employees of MII and
its Subsidiaries as of the Cut-off Date are allocated between the MII Retained Business and MVWC Business as of the Effective Date in accordance with the principles set forth in paragraphs (i) and (ii) of this Section 2.01(a). In
making such allocation of Employees of MII and its Subsidiaries pursuant to this Section 2.01(a), MII and MVWC shall share such information regarding the allocation of Employees as is reasonably requested. An Employee who is (1) allocated
to the MII Retained Business and (2) employed by MII or a Retained Subsidiary as of the Effective Date is a “Retained Employee.” An Employee who is (1) allocated to the MVWC Group and (2) employed by MVWC or a MVWC
Subsidiary as of the Effective Date is a “MVWC Employee”. All Employees of MII and its Subsidiaries as of the Cut-off Date shall be allocated as either Retained Employees or MVWC Employees on the Effective Date. 

(i) In making the allocation provided for in this Section 2.01(a), and subject to paragraph (ii) hereof, MII and MVWC shall
allocate each Employee whose employment duties prior to the Effective Date relate exclusively to the MII Retained Business to MII and each Employee whose employment duties prior to the Effective Date relate exclusively to the MVWC Business to the
MVWC Group. MII and MVWC shall allocate all other Employees, in a mutually agreeable manner that, to the extent possible, takes into account the Employees’ expertise, experience and existing positions and duties and does not unreasonably
disrupt either the MII Retained Business or MVWC Business and maximizes the ability of each of the MII Retained Business and MVWC Business to manage and operate their respective businesses after the Effective Date, taking into account the respective
needs of such businesses as established by past practice. 
 (ii) MII and MVWC each agree that, between the date hereof and the
Effective Date, Employees will not be transferred between the MII Retained Business or MVWC Business except as (A) necessary to effect the second sentence of paragraph (i) of this subsection 2.01(a), (B) in the ordinary course of
business consistent with past practice or (C) in accordance with the procedures described in the next sentence. MII and MVWC agree that, between the date hereof and the Effective Date, the senior human resources executive of each party will
consult with the senior human resources executive of the other party in connection with the transfer of any employee whose duties relate primarily to the MVWC Business or MII Retained Business, as the case may be, and whose supervisor objects to the
transfer. Consent by the other party to any such transfer will not be required. 

  
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 (b) Allocation of Responsibilities as Employer. On the Effective Date, except to the
extent retained or assumed by MII under this Agreement or any other agreement relating to the Distribution, MVWC shall retain or assume, as the case may be, responsibility as employer for the MVWC Employees. On the Effective Date, except to the
extent retained or assumed by MVWC under this Agreement or any other agreement relating to the Distribution, MII shall retain or assume, as the case may be, responsibility as employer for the Retained Employees. The assumption or retention of
responsibility as employer by MII or MVWC described in this Section 2.01 shall not, of itself, constitute a severance or a termination of employment under any Plan of severance maintained by MII or MVWC. 

(c) Service Credits. In connection with the Distribution and for purposes of determining Service Credits (but excluding accrual of
benefits other than vacation, sick leave, health and welfare benefits, eligibility for Club 25 or Quarter Century Club associate discount programs or severance) under any Plans, MII shall credit each Retained Employee and MVWC shall credit each MVWC
Employee with such Employee’s Service Credits and current hire date as reflected in MII’s human resources system records as of the Cut-off Date. Such Service Credits and hire date shall continue to be maintained as described herein for as
long as the Employee does not terminate employment. 
 (d) Transfer of Employees Following the Effective Date. For a
period of ninety (90) days following the Effective Date, in the case of a transfer of a Pre-Distribution Employee from the MVWC Group to MII or from MII to the MVWC Group, (i) the transferee employer will recognize the most recent hire
date of such Employee prior to the Distribution with MII or one of its Subsidiaries for purposes of Service Credits with the transferee employer, including toward any waiting period under any Plan; (ii) such Employee will be given credit under
the transferee employer’s Medical/Dental/Vision Plan toward any deductible or out-of-pocket maximum for amounts paid while employed by the transferor employer; and (iii) the transferee employer shall provide the Employee with the same
balance of vested and unvested vacation and sick leave hours as had been accrued by the transferor employer through the date of transfer from the transferor employer; provided that the transferor employer shall promptly notify the transferee
employer in writing of the occurrence of any such termination subject to the provisions of this Section 2.01(d)(iii), and shall make a payment to such transferee employer within thirty (30) days of the aforesaid termination date from the
transferor employer in an amount equal to the value of the transferring employee’s vested and unvested balance of vacation leave accrued by the transferor employer through such termination date with such transferor employer, based on the
employee’s final rate of pay with the transferor employer. 
 Section 2.02 Retirement Plans. 

(a) MII Profit Sharing Plan. Effective as of the Effective Date, MII shall retain sponsorship of the MII Profit Sharing Plan. MVWC
Employees shall cease contributions to the MII Profit Sharing Plan with respect to pay earned on or after November 5, 2011. 
 (b) MVWC 401(k) Plan. Effective as of November 5, 2011, MVWC shall take, or 

  
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cause to be taken, or have taken, all action necessary and appropriate to establish and administer a Plan to be referred to herein as the MVWC 401(k) Plan. After the Distribution, MVWC shall
retain all assets and liabilities of the MVWC 401(k) Plan. Effective as of November 5, 2011, all MVWC Employees who, immediately prior to such date, were participants in or otherwise eligible to participate in the MII Profit Sharing Plan shall
be eligible to participate in the MVWC 401(k) Plan with respect to pay earned on or after November 5, 2011. The MVWC 401(k) Plan shall be intended to qualify for tax-favored treatment under Sections 401(a) and 401(k) of the Code and to be in
compliance with the applicable requirements of ERISA. 
 (c) Company Contribution. MVWC Employees who made elective
deferrals or after-tax contributions to the MII Profit Sharing Plan for the period of the 2011 calendar year preceding November 5, 2011, shall be eligible for a Company Contribution for the 2011 Plan Year based on contributions made to the MII
Profit Sharing Plan and compensation during such period, notwithstanding the fact that they are not employed by MII as of the last day of the 2011 Plan Year and such contributions should be made no later than March 31, 2012. 

(d) Rollovers from MII Profit Sharing Plan to MVWC 401(k) Plan. Effective as of the Distribution Date, the MVWC 401(k) Plan will
accept rollovers from the MII Profit Sharing Plan provided participants comply with the procedures specified by both Plans. 

Section 2.03 Deferred Compensation Plans. 
 (a) MII Deferred Compensation Plan. Effective as of the Effective Date, MII shall retain sponsorship of the MII Deferred Compensation Plan. MII shall be responsible for payment of all liabilities
and obligations of MII accrued under the MII Deferred Compensation Plan, regardless of when such payment becomes due, including, but not limited to, liabilities to MVWC Employees pursuant to participation in the MII Deferred Compensation Plan for
periods prior to the Cut-off Date, along with notional earnings required to be credited to account balances included therein in accordance with the terms of the MII Deferred Compensation Plan. Nothing herein shall limit MII’s ability to
terminate the MII Deferred Compensation Plan at any time and make immediate distributions of all accounts. 
 (b) Liability
for Distributions to MVWC Employees. Following the Effective Date, in the case of distributions by MII to participants in the MII Deferred Compensation Plan who are or were MVWC Employees on the Cut-off Date (or on any date during the 90-day
period described in Section 2.01(d)), MVWC shall be responsible for paying MII the amount of such distributions within thirty (30) days of receipt of an invoice from MII detailing the amount of such distributions. 

(c) Sharing of Information. Within thirty (30) days following the Effective Date, MII will submit to MVWC a listing of all
MVWC Employees who maintain a balance in the MII Deferred Compensation Plan and will provide an updated list one hundred twenty (120) days following the Effective Date. MVWC shall inform MII of MVWC Employees who terminate employment with the
MVWC Group and who are or were participants in the MII Deferred 

  
 10 

 
Compensation Plan as of the Cut-off Date (or any date during the 90-day period described in Section 2.01(d)). MVWC acknowledges that receipt of timely information concerning termination of
employment of MVWC Employees with accounts under the MII Deferred Compensation Plan is essential to avoid penalties under Code Section 409A and shall indemnify MII for any liability arising by reason of the failure to properly distribute
accounts under the MII Deferred Compensation Plan to MVWC Employees due to MVWC’s failure to timely advise MII of a termination of employment. For purposes of this section 2.03(c), information concerning terminations of employment shall include
instructions by MVWC regarding which employees shall be subject to the six-month delay on distributions to “specified employees” under Code Section 409A. 
 Section 2.04 Comprehensive Stock Plans. 
 (a) MII Stock Plan.
Effective as of the Effective Date MII shall continue the MII Stock Plan. 
 (b) MVWC Stock Plan. As soon as practicable
after the date hereof and effective as of the Effective Date, MVWC shall take, or cause to be taken, or have taken, all action necessary and appropriate to adopt and administer the MVWC Stock Plan, and to provide 2011 Distribution Awards for all
(i) MVWC Employees, (ii) MII Employees and (iii) MII Terminees, in accordance with Section 2.05(d). All awards under the MVWC Stock Plan will be denominated in MVWC Common Stock. 

(c) 2011 Distribution Awards. 
 (i) MII Stock Award: On the Distribution Date, each Employee and Non-employee Director who is a holder of a MII Stock Award as of the Cut-off Date shall receive as part of the Distribution an award
under the MVWC Stock Plan of a number of shares of MVWC Common Stock equal to the number of shares of MII Common Stock subject to the MII Stock Award held by such Employee and Non-employee Director multiplied by the Distribution Ratio, with terms
and conditions substantially similar to the terms and conditions applicable to the MII Stock Award. MVWC Stock Awards shall be distributed with fractional shares calculated to the tenth (1/10) of a share. 

(ii) MII Stock Options and MII SARs: (A) On the Distribution Date, each Employee and Non-employee Director who is a
holder of a MII Stock Option or MII SAR shall have each of the following: (I) an Adjusted MII Stock Option or Adjusted MII SAR under the MII Stock Plan for the same number of shares as under the MII Stock Option or MII SAR and (II) a MVWC Stock
Option or MVWC SAR under the MVWC Stock Plan for the number of shares as under the MII Stock Option or MII SAR multiplied by the Distribution Ratio. (B) The Spread on the Adjusted MII Stock Option or Adjusted MII SAR shall equal the Spread on
the MII Stock Option or MII SAR before the Distribution multiplied by (I) the Post-Conversion Stock Price of MII Common Stock divided by (II) the sum of (x) the Post-Conversion Stock Price of MII Common Stock and (y) the
Post-Conversion Stock Price of MVWC Common Stock 

  
 11 

 
divided by the Distribution Ratio. (C) The exercise price of the Adjusted MII Stock Option or Adjusted MII SAR shall equal the Post-Conversion Stock Price of MII Common Stock minus the
Spread on the Adjusted MII Stock Option or Adjusted MII SAR divided by the number of shares subject to the Adjusted MII Stock Option or the Adjusted MII SAR. (D) The Spread on the MVWC Stock Option or MVWC SAR shall equal the Spread on the MII
Stock Option or MII SAR before the Distribution multiplied by (I) the Post-Conversion Stock Price of MVWC Common Stock divided by (II) the sum of (x) the Post-Conversion Stock Price of MII Common Stock and (y) the Post-Conversion
Stock Price of MVWC Common Stock divided by the Distribution Ratio. (E) The exercise price of the MVWC Stock Option or MVWC SAR shall equal the Post-Conversion Stock Price of MVWC Common Stock minus the Spread on the MVWC Stock Option or MVWC
SAR divided by the number of shares subject to the MVWC Stock Option or the MVWC SAR. (F) An Adjusted MII Stock Option, Adjusted MII SAR, MVWC Stock Option or MVWC SAR that is a 2011 Distribution Award shall have terms and conditions
substantially similar to the terms and conditions of the MII Stock Option or MII SAR to which it relates under this Section 2.04(c)(ii). (G) All adjustments made pursuant to this Section 2.04(c) shall be effected in a manner such that
no award becomes subject to the requirements of Section 409A of the Code. 
 (d) Service Credit: The 2011
Distribution Awards shall be administered with respect to any provisions relating to continuing employment requirements to give Service Credit for service with the party employing the grantee as of the Cut-off Date (or on any date during the 90-day
period described in Section 2.01(d)). 
 (e) Cooperation. MVWC and MII agree to cooperate in good faith to ensure
that each party’s Stock Plan is administered properly, including providing information on the termination of employment of employees who continue to hold stock awards denominated the shares of the other party’s common stock. 

Section 2.05 Medical/Dental/Vision Plan. 
 (a) MII Medical/Dental/Vision Plan. Effective as of November 5, 2011, MII will continue the MII Medical/Dental/Vision Plan. MVWC Employees who were eligible for any MII Medical/Dental/Vision
Plan as of November 4, 2011, will be entitled to continue participating in those Plans until December 31, 2011. MVWC Employees who were employed on or before November 4, 2011, but who have not completed their benefits waiting period
for the MII Medical/Dental/Vision Plan as of November 4, 2011, shall be eligible to participate in the MII Medical/Dental/Vision Plan as of the date they would have been eligible had they been a Retained Employee, and will be entitled to
continue participating in that Plan until December 31, 2011. Any MVWC Employee covered under the MII Medical/Dental/Vision Plan who has a qualifying status change (e.g., birth/adoption of a child, marriage) will be able to make changes to their
enrollment based on the event in accordance with the terms of the MII Medical/Dental/Vision Plan. MVWC shall be responsible for paying MII the amount of the Employer Subsidy with respect to participation in the MII Medical/Dental/Vision Plan by MVWC
Employees during the period following November 4, 2011 within thirty (30) days of receipt of an invoice from MII detailing the amount of such Employer Subsidy. 

  
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 (b) Establishment of MVWC Medical/Dental/Vision Plan. Effective as of
January 1, 2012, MVWC or one of its Subsidiaries shall take, or cause to be taken, or have taken, all action necessary and appropriate to establish or designate and administer the MVWC Medical/Dental/Vision Plan and to provide benefits
thereunder for all eligible MVWC Employees who choose to enroll in the plans. 
 (c) Continuation Coverage. 

(i) Subject to Section 2.05(c)(ii), as of the Effective Date, (A) MII or a Retained Subsidiary shall assume or retain and
shall be solely responsible for, or cause the MII Medical/Dental/Vision Plan, insurance carriers or HMOs to be responsible for, the continuation coverage requirements imposed by Code Section 4980B and ERISA Sections 601 through 608
(“COBRA”) as they relate to any MII Qualified Beneficiary, and MVWC and the MVWC Subsidiaries shall have no liability or obligation with respect thereto, and (B) MVWC or a MVWC Subsidiary shall assume or retain and shall be solely
responsible for, or cause the MVWC Medical/Dental/Vision Plan, its insurance carriers or HMOs to be responsible for, such continuation coverage requirements as they relate to any MVWC Qualified Beneficiary, and MII and the Retained Subsidiaries
shall have no liability or obligation with respect thereto. 
 (ii) Except as provided in Section 2.05(c)(iii), an MVWC
Qualified Beneficiary who becomes entitled to continuation coverage by reason of an event that occurs after November 4, 2011 and on or before December 31, 2011, shall be entitled to coverage under the MII Medical/Dental/Vision Plan through
December 31, 2011, and thereafter for the remainder of what would have been the required continuation coverage period had such MVWC Qualified Beneficiary had a COBRA qualifying event shall be entitled to coverage under the MVWC
Medical/Dental/Vision Plan. 
 (iii) An MVWC Qualified Beneficiary who becomes entitled to continuation coverage by reason of a
separation from service under the MII Severance Plan on or before November 18, 2011, shall be entitled to coverage under the MII Medical/Dental/Vision Plan for the entire COBRA continuation coverage period as a result of that event. If the MVWC
Qualified Beneficiary described in the preceding sentence meets the requirements for Retiree Medical Coverage under the MII Medical/Dental/Vision Plan as of November 18, 2011, then the MVWC Qualified Beneficiary will be eligible to participate
in Retiree Medical Coverage under the Marriott International, Inc. Plan after the end of the severance period under the MII Severance Plan. 
 (d) Post-retirement Medical Benefits. Notwithstanding anything herein to the contrary, as of the Effective Date, MII or a Retained Subsidiary shall assume or retain, and shall be solely responsible
for, or cause the Marriott International, Inc. Medical Plan, its insurance carriers or HMOs, to be responsible for Post-retirement Medical benefits to which MII Terminees have become entitled as of the Cut-off Date under the Marriott International,
Inc. Medical Plan maintained by MII before the Effective Date, and MVWC shall have no liability with respect thereto. 

  
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 Section 2.06 Short-Term Disability Plan. 

(a) MII Short-Term Disability Plan. Effective as of November 5, 2011, MII or a Retained Subsidiary shall continue the MII
Short-Term Disability Plan. MVWC Employees shall cease coverage under the MII Short-Term Disability Plan effective 11:59 pm November 4, 2011. In accordance with the terms of the MII Short-Term Disability Plan, coverage will be provided to a
MVWC Employee for a payable claim that occurs while the MVWC Employee is covered under the Plan. 
 (b) Establishment of MVWC
Short-Term Disability Plan. Effective as of November 5, 2011, MVWC or a MVWC Subsidiary shall take, or cause to be taken, or have taken, all actions necessary and appropriate to establish, designate or administer a short-term disability
plan and to provide benefits thereunder for all eligible MVWC Employees who enroll therein. 
 Section 2.07 Long-Term
Disability Plan. 
 (a) MII Long-Term Disability Plan. Effective as of November 5, 2011, MII or a
Retained Subsidiary shall continue the MII Long-Term Disability Plan. MVWC Employees shall cease coverage under the MII Long-Term Disability Plan effective 11:59 pm November 4, 2011. In accordance with the terms of the MII Long-Term Disability
Plan, coverage will be provided to a MVWC Employee for a payable claim that occurs when the MVWC Employee is covered under the Plan. 
 (b) Establishment of MVWC Long-Term Disability Plan. Effective as of November 5, 2011, MVWC or a MVWC Subsidiary shall take, or cause to be taken, or have taken, all actions necessary
and appropriate to establish, designate or administer a long-term disability plan and to provide benefits thereunder for all eligible MVWC Employees who enroll therein. 
 Section 2.08 Vacation and Sick Pay Liabilities. 
 (a) Division of
Liabilities. Effective on the Effective Date, MVWC shall assume, as to the MVWC Employees, and MII shall retain, as to the Retained Employees, all accrued liabilities (whether vested or unvested, and whether funded or unfunded) for vacation and
sick leave in respect of all Employees of MII and its Subsidiaries as of the Cut-off Date. MVWC shall be solely responsible for the payment of such vacation or sick leave to MVWC Individuals after the Cut-off Date, and MII shall be solely
responsible for the payment of such vacation or sick leave to Retained Individuals after the Cut-off Date. Each party shall provide to its own Employees on the Effective Date the same vested and unvested balances of vacation and sick leave as
credited to such Employee on MII’s payroll system on the Cut-off Date. As of the Effective Date, MII shall continue to accrue vacation and sick leave in respect of each Retained Employee according to the same rate of accrual as accrued in
respect of such individual by MII on the Cut-off Date. As of the Effective Date, MVWC shall continue to accrue vacation and sick leave in respect of 

  
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each MVWC Employee according to the MVWC accrual schedule as communicated per MVWC policy as of the Cut-off Date. The preceding sentence shall not be construed as in any way limiting the right of
either MVWC or MII to change its vacation or sick leave plans or policies as it deems appropriate, subject to the application of Section 2.01(d). 
 Section 2.09 Group Term Life/AD&D/BTA Insurance Plan. 
 (a)
MII Group Term Life Insurance Plan. Effective as of November 5, 2011, MII or a Retained Subsidiary shall continue the MII Group Term Life/AD&D/BTA Insurance Plan. MVWC Employees shall cease coverage under the MII Group Term
Life/AD&D/BTA Insurance Plan effective 11:59 pm November 4, 2011. 
 (b) MVWC Group Term Life Insurance
Plan. Effective as of November 5, 2011, MVWC or a MVWC Subsidiary shall take, or cause to be taken, or have taken, all actions necessary and appropriate to establish, designate or administer the MVWC Group Term Life/AD&D/BTA Insurance
Plan and to provide benefits thereunder for all eligible MVWC Employees who enroll therein. 
 Section 2.10 Severance
Pay Plan. 
 (a) Effective as of the Effective Date, MII or a Retained Subsidiary shall continue the MII Severance Plan.

 (b) Effective as of the Effective Date, MVWC or a MVWC Subsidiary shall take, or cause to be taken, or have taken, all
actions necessary and appropriate to establish, designate or administer a severance plan for eligible MVWC Employees. 
 (c)
Employees of the MVWC Business who become entitled to benefits under the MII Severance Plan for terminations of employment occurring on or before the Cut-off Date shall be entitled to continue to receive such benefits in accordance with the terms of
the MII Severance Plan. MVWC shall be responsible for paying MII the amount of the cost of benefits for such participants under the MII Severance Plan within thirty (30) days of receipt of an invoice from MII detailing the amount of such costs.

 Section 2.11 Dependent Care Spending Account Plan. Effective November 5, 2011, MVWC Employees will cease to
contribute to the Marriott International, Inc. Dependent Care Spending Account Plan; provided, however, that MVWC Employees may continue to make claims for eligible expenses incurred through November 4, 2011, in accordance with the terms of the
Plan. 

  
 15 

 Section 2.12 Other Plans. Except as otherwise expressly provided herein, MII
shall retain all liabilities under all Plans to the extent relating to Retained Individuals or maintained by a Retained Subsidiary, and MVWC shall be responsible for all liabilities under all Plans to the extent relating to MVWC Individuals or
maintained by a MVWC Subsidiary. 
 Section 2.13 Preservation of Right To Amend or Terminate Plans. Except as
otherwise expressly provided in Article II, no provisions of this Agreement, including, without limitation, the agreement of MII or MVWC, or any Retained Subsidiary or MVWC Subsidiary, to make a contribution or payment to or under any Plan herein
referred to for any period, shall be construed as a limitation on the right of MII or MVWC or any Retained Subsidiary or MVWC Subsidiary to amend such Plan or terminate its participation therein which MII or MVWC or any Retained Subsidiary or MVWC
Subsidiary would otherwise have under the terms of such Plan or otherwise, and no provision of this Agreement shall be construed to create a right in any Employee or former Employee, or dependent or beneficiary of such Employee or former Employee
under a Plan which such person would not otherwise have under the terms of the Plan itself. 
 Section 2.14
Reimbursement. MII and MVWC acknowledge that MII and the Retained Subsidiaries, on the one hand, and MVWC and the MVWC Subsidiaries, on the other hand, may incur costs and expenses, including, but not limited to, contributions to Plans and
the payment of insurance premiums arising from or related to any of the Plans which are, as set forth in this Agreement, the responsibility of the other party hereto. Accordingly, MII (and any Retained Subsidiary responsible therefor) and MVWC (and
any MVWC Subsidiary responsible therefor) shall reimburse each other, as soon as practicable, but in any event within thirty (30) days of receipt from the other party of appropriate verification, for all such costs and expenses. 

Section 2.15 Payroll Reporting and Tax Withholding. 
 (a) Form W-2 Reporting. MVWC and MII hereby adopt the “alternate procedure” for preparing and filing IRS Forms W-2 (Wage and Tax Statements), as described in Section 5 of Revenue
Procedure 96-60, 1996-53 I.R.B. 24 (December 30, 1996) (“Rev. Proc. 96-60”). Under this procedure, MVWC as the successor employer shall provide all required Forms W-2 to all MVWC Individuals reflecting all wages paid and taxes withheld by
both MII as the predecessor and MVWC as the successor employer for the entire year during which the Distribution takes place. MII shall provide all required Forms W-2 to all Retained Individuals reflecting all wages and taxes paid and withheld by
MII before, on and after the Effective Date. 
 In connection with the aforesaid agreement under Rev. Proc. 96-60, each business
unit or business operation of MII shall be assigned to either MII or MVWC, depending upon whether it is a MII Retained Business or a MVWC Business, and each Retained Individual or MVWC Individual associated with such business unit or business
operation shall be assigned for payroll reporting purposes to MII or MVWC, as the case may be. 
 (b) Garnishments. Tax
Levies, Child Support Orders, and Wage Assignments. With respect to Employees with garnishments, tax levies, child support orders, and wage 

  
 16 

 
assignments in effect with MII as of November 4, 2011, MVWC as the successor employer with respect to each such Employee who is a MVWC Individual shall honor such payroll deduction
authorizations and will continue -to make payroll deductions and payments to the authorized payee, as specified by the court or governmental order which was filed with MII. MII will provide to MVWC a list of MVWC Individuals who have garnishments,
tax levies, child support orders and wage assignments in effect as of November 4, 2011. 
 (c) Authorizations for
Payroll Deductions. Unless otherwise prohibited by this or another agreement entered into in connection with the Distribution, or by a Plan document or by law, with respect to Employees with authorizations for payroll deductions and direct
deposits in effect with MII as of November 4, 2011, MVWC as the successor employer will honor such payroll deduction authorizations relating to each MVWC Individual, and shall not require that such MVWC Individual submit a new authorization to
the extent that the type of deduction by MVWC does not differ from that made by MII. Such deduction types include, without limitation, contributions to any Plan, U.S. Savings Bonds, and United Giver’s Fund; scheduled loan repayments to an
employee credit union; and direct deposit of payroll, union dues, employee relocation loans, and other types of authorized company receivables usually collectible through payroll deductions. 

ARTICLE III 

LABOR AND EMPLOYMENT MATTERS 
 Notwithstanding any other provision of this Agreement or any other Agreement between MVWC and MII to the contrary, MVWC and MII understand and agree that: 

Section 3.01 Separate Employers. On and after the Effective Date and the separation of Employees into their respective
companies, MVWC and MII will be separate and independent employers. 
 Section 3.02 Employment Policies and
Practices. Subject to the provisions of ERISA and Sections 2.01(c) and (d), MVWC and MII may adopt, continue, modify or terminate such employment policies, compensation practices, retirement plans, welfare benefit plans, and other employee
benefit plans of any kind or description, as each may determine, in its sole discretion, are necessary and appropriate, with respect to its Employees. 

  
 17 

 Section 3.03 Collective Bargaining Agreements. 

(a) With regard to Employees of MII and its Subsidiaries covered by a Collective Bargaining Agreement on the Cut-off Date who become MVWC
Employees or Retained Employees, MVWC and MII promise and covenant to each other not to take any action which disrupts or otherwise negatively impacts the labor relations of the other. 

(b) Effective as of the Effective Date, MVWC or a MVWC Subsidiary shall retain or assume each Collective Bargaining Agreement covering
MVWC Employees, including any obligations thereunder requiring contributions to any multiemployer plan as defined in Section 3(37) of ERISA (“Multiemployer Plan”), and MII shall have no further liability thereunder. Effective as of
the Effective Date, MII or a Retained Subsidiary shall retain or assume each Collective Bargaining Agreement covering Retained Employees, including any obligations thereunder requiring contributions to any Multiemployer Plan. MVWC shall be solely
responsible for any withdrawal liability arising in connection with any Multiemployer Plan in which MVWC Individuals participate, and MII shall have no liability with respect thereto. MII shall be solely responsible for any withdrawal liability
arising with respect to any Multiemployer Plan in which Retained Individuals participate, and MVWC shall have no liability with respect thereto. 
 Section 3.04 Employment Claims. 
 (a) MVWC will be solely responsible
for any uninsured Employment Claims arising with respect to MVWC Individuals on, before or after the Effective Date. MII will be solely liable for any Employment Claims arising with respect to Retained Individuals on, before or after the Effective
Date as well as any insured Employment Claims arising with respect to MVWC Individuals on or before the Effective Date. 
 (b)
MVWC and MII acknowledge that avoiding or successfully defending against claims by third parties against either MVWC or MII in any way relating to the employment of any individual by MII before the Distribution, or relating to the employment of any
individual by MVWC in connection with its continuing operation of the MVWC Business (“Legal Claims”) is essential for the protection of the common legal and financial interests of the Parties; therefore, MVWC and MII intend that upon and
after the Effective Date they and their legal counsel shall cooperate fully on the subject of their common legal and financial interests and act in a coordinated fashion in the defense of those interests in the event of a potential or actual Legal
Claim. MVWC and MII intend that this Agreement shall apply to all potential or actual Legal Claims, both currently pending and as may arise in the future. 
 (c) MVWC and MII agree that attorney-client privilege, the work product doctrine and all other evidentiary privileges and non-disclosure doctrines shall apply to the fullest extent permitted by law to any
communication of privileged information among counsel for the parties, or between counsel for either party and the other party. In entering into and complying with this Agreement the parties do not intend to waive any such privilege or doctrine.

  
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 Section 3.05 Intercompany Service Charge. Professional, managerial,
administrative, clerical, consulting, and support or production services provided to one party by personnel of the other party, upon the request of the first party or when such services are otherwise required by this Agreement between MVWC and MII,
shall be charged to the party receiving such services on commercially reasonable terms to be negotiated (or in accordance with the provisions of any applicable agreement between the parties). 

Section 3.06 WARN Claims. Before and after the Effective Date, each party shall comply in all material respects with the
Worker Adjustment and Retraining Notification Act and similar state laws (“WARN”). MII and the Retained Subsidiaries shall be responsible for WARN claims relating to Retained Individuals or to Employees who prior to the Effective Date were
employed in a MII Retained Business; MVWC and the MVWC Subsidiaries shall be responsible for WARN Claims relating to MVWC Individuals or to Employees who prior to the Effective Date were employed in a MVWC Business. Each party shall indemnify,
defend and hold harmless the other in connection with WARN claims for which the indemnitor is responsible and which are brought against the indemnitee. 
 Section 3.07 Employees on Leave of Absence. After the Effective Date, MVWC shall assume responsibility, if any, as employer for all Employees returning from an approved leave of absence who
prior to the Effective Date were employed in a MVWC Business. After the Effective Date, MII shall assume responsibility, if any, as employer for all Employees returning from an approved leave of absence who prior to the Effective Date were employed
in a MII Retained Business. 
 Section 3.08 Third Party Beneficiary Rights. Except as provided below, neither this
Agreement nor any other intercompany agreement between MVWC and MII is intended to nor does it create any third party contractual or other common law rights. No person shall be deemed a third-party beneficiary of the agreements between MVWC and MII.

 Section 3.09 Attorney-Client Privilege. The provisions herein requiring either party to this Agreement to
cooperate shall not be deemed to be a waiver of the attorney-client privilege for either party nor shall it require either party to waive its attorney/client privilege. 
 ARTICLE IV 
 DEFAULT 

Section 4.01 Default. If either party materially defaults hereunder, the non-defaulting party shall be entitled to all
remedies provided by law or equity (including reasonable attorneys’ fees and costs of suit incurred). 

  
 19 

 Section 4.02 Force Majeure. MVWC and MII shall incur no liability to each other
due to a default under the terms and conditions of this Agreement resulting from fire, flood, war, strike, lock-out, work stoppage or slow-down, labor disturbances, power failure, major equipment breakdowns, construction delays, accident, riots,
acts of God, acts of United States’ enemies, laws, orders or at the insistence or result of any governmental authority or any other delay beyond each other’s reasonable control. 

ARTICLE V 

MISCELLANEOUS 

Section 5.01 Relationship of Parties. Nothing in this Agreement shall be deemed or construed by the parties or any third
party as creating the relationship of principal and agent, partnership or joint venture between the parties, it being understood and agreed that no provision contained herein, and no act of the parties, shall be deemed to create any relationship
between the parties other than the relationship set forth herein. 
 Section 5.02 Access, to Information:
Cooperation. MII and MVWC, their respective Subsidiaries and their authorized agents will be given reasonable and timely access to and may take copies of all information relating to the subjects of this Agreement (to the extent permitted by
federal and state confidentiality laws) in the custody of the other party, including any agent, contractor, subcontractor, agent or any other person or entity under the contract of such party. The parties will provide one another with such
information within the scope of this Agreement as is reasonably necessary to administer each party’s Plans. The parties will cooperate with each other to minimize the disruption caused by any such access and providing of information.

 Section 5.03 Assignment. This Agreement and all of the provisions hereof shall be binding upon, and inure to the
benefit of the parties and their respective successors and permitted assigns, but neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by either party (whether by operation of law or otherwise) without
the prior written consent of the other party. Notwithstanding the preceding sentence, prior to the consummation of the transactions contemplated by the Distribution Agreement, MVWC) may assign its rights and obligations hereunder to any wholly-owned
U.S. Subsidiary of MII other than a Retained Subsidiary, which wholly owned Subsidiary shall, following the Distribution, own all of the assets of MII and its Subsidiaries (including shares of capital stock of Subsidiaries and any other ownership
interests in any Person) other than the MII Retained Business. In the event of such an assignment and assumption, the assignor shall be released from all of its obligations under this Agreement and the assignee shall become MVWC for all purposes
under this Agreement and the Transaction Agreements. 
 Section 5.04 Headings. The headings used in this Agreement
are inserted only for the purpose of convenience and reference, and in no way define or limit the scope or intent of any provision or part hereof. 

  
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 Section 5.05 Severability of Provisions. Neither MII nor MVWC intend to violate
statutory or common law by executing this Agreement. If any section, sentence, paragraph, clause or combination of provisions in this Agreement is in violation of any law, such sections, sentences, paragraphs, clauses or combinations shall be
inoperative and the remainder of this Agreement shall remain in full force and effect and shall be binding upon the parties. 

Section 5.06 Notices. All notices, consents, approvals and other communications given or made pursuant hereto shall be in
writing and shall be deemed to have been duly given when delivered personally or by overnight courier or three days after being mailed by registered or certified mail (postage prepaid, return receipt requested) to the named representatives of the
parties at the following addresses (or at such other address for a party as shall be specified by like notice; except that notices of changes of address shall be effective upon receipt): 

 

	 	(a)	if to MII 

MARRIOTT INTERNATIONAL, INC. 
 10400 Fernwood Road 
 Bethesda, Maryland 20817 

Attention: GENERAL COUNSEL 
 Facsimile: 301-380-6727 
  

	 	(b)	if to MARRIOTT VACATIONS WORLDWIDE CORPORATION 

6649 Westwood Boulevard, 3rd Floor 
 Orlando, Florida 32821 
 Attention: GENERAL COUNSEL 

Facsimile: 407-206-6420 
 with a copy to: 
 6649 Westwood Boulevard, 1st Floor 

Orlando, Florida 32821 
 Attention: VP, Global Compensation & Benefits 

Facsimile: 407-206-6039 
 Section 5.07 Further Action. MVWC and MII each shall cooperate in good faith and take such steps and execute such papers as may be reasonably requested by the other party to implement the
terms and provisions of this Agreement. 
 Section 5.08 Waiver. MVWC and MII each agree that the waiver of any
default under any term or condition of this Agreement shall not constitute a waiver of any subsequent default or nullify the effectiveness of that term or condition. 

  
 21 

 Section 5.09 Governing Law. All controversies and disputes arising out of or
under this Agreement shall be determined pursuant to the laws of the State of New York, regardless of the laws that might be applied under applicable principles of conflicts of laws. 

Section 5.10 Consent to Jurisdiction: Waiver of Jury Trial. Each party irrevocably agrees that any legal action or proceeding
arising out of or relating to this agreement shall be instituted in any state or federal court sitting in New York City, Borough of Manhattan (and each party agrees not to commence any legal action or proceeding except in such courts), and each
party irrevocably submits to the jurisdiction of such courts in any such action or proceeding. Each party irrevocably consents to service of process in any such action or proceeding upon it by mail at its address set forth in Section 5.06 of
this Agreement. The foregoing provisions shall not limit the right of any party to bring any such action or proceeding or to obtain execution on any judgment rendered in any such action or proceeding in any other appropriate jurisdiction or in any
other manner. EACH PARTY HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. 
 Section 5.11 Entire Agreement. This Agreement and the Transaction Agreements constitute the entire understanding between the parties hereto, and supersede all prior written or oral
communications, relating to the subject matter covered by said agreements. No amendment, modification, extension or failure to enforce any condition of this Agreement by either party shall be deemed a waiver of any of its rights herein. This
Agreement shall not be amended except by a writing executed by the parties. 
 IN WITNESS WHEREOF, the parties have executed
this Agreement on November 17, 2011, effective as of November 5, 2011. 
  

			
	MARRIOTT INTERNATIONAL, INC.
		
	By:	 	 /s/ Kevin M. Kimball

	[Name] Kevin M. Kimball
	[Title] Vice President
	
	MARRIOTT VACATIONS WORLDWIDE CORPORATION
		
	By:	 	 /s/ Ralph Lee Cunningham

	[Name] Ralph Lee Cunningham
	[Title] Executive Vice President

  
 22

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