Document:

Credit Agreement

 Exhibit 10.1 
  
 EXECUTION COPY 
  

  
 CREDIT AGREEMENT 

 
 dated as of October 20, 2005 
  
 among 
  
 NATC CALIFORNIA LLC, 
 as Borrower 
  
 THE
LENDERS FROM TIME TO TIME PARTY HERETO 
  
 and

  
 SUNTRUST BANK, 
 as Administrative Agent 
  

  
 SUNTRUST CAPITAL MARKETS, INC., 
 as Sole Lead Arranger and Book Manager 

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page

	ARTICLE I	  	DEFINITIONS; CONSTRUCTION	  	1
	 Section 1.1.
	  	Definitions	  	1
	 Section 1.2.
	  	Accounting Terms	  	14
	 Section 1.3.
	  	Terms Generally	  	14
			
	ARTICLE II	  	LETTER OF CREDIT AND LOAN FACILITIES	  	15
	 Section 2.1.
	  	Letter of Credit	  	15
	 Section 2.2.
	  	Conversion to Loans	  	18
	 Section 2.3.
	  	Interest Rate Elections	  	19
	 Section 2.4.
	  	Optional Reduction and Termination of Commitments	  	20
	 Section 2.5.
	  	Repayment of Loans	  	20
	 Section 2.6.
	  	Evidence of Indebtedness	  	20
	 Section 2.7.
	  	Optional Prepayments	  	21
	 Section 2.8.
	  	Mandatory Prepayments	  	21
	 Section 2.9.
	  	Interest on Loans, L/C Payments and Reimbursement Obligations	  	22
	 Section 2.10.
	  	Fees	  	23
	 Section 2.11.
	  	Computation of Interest and Fees	  	23
	 Section 2.12.
	  	Inability to Determine Interest Rates	  	23
	 Section 2.13.
	  	Illegality	  	24
	 Section 2.14.
	  	Increased Costs	  	24
	 Section 2.15.
	  	Funding Indemnity	  	25
	 Section 2.16.
	  	Taxes	  	26
	 Section 2.17.
	  	Payments Generally; Pro Rata Treatment; Sharing of Set-offs	  	27
	 Section 2.18.
	  	Mitigation of Obligations	  	28
	 Section 2.19.
	  	Replacement of Lenders	  	29
			
	ARTICLE III	  	COMMERCIAL PAPER OPERATIONS	  	29
	 Section 3.1.
	  	Issuance of CP Notes	  	29
	 Section 3.2.
	  	Payment Account	  	31
	 Section 3.3.
	  	Commercial Paper Account	  	32
	 Section 3.4.
	  	Letter of Credit Account	  	33
	 Section 3.5.
	  	Attachments	  	33
	 Section 3.6.
	  	Change in Law Applicable to the Letter of Credit or CP Notes	  	33
	 Section 3.7.
	  	Effect on the Letter of Credit	  	34
	 Section 3.8.
	  	Cessation of Issuance	  	34
	 Section 3.9.
	  	Cessation of Market Disruption Event	  	34
	 Section 3.10.
	  	Notice to Depositary	  	34
	 Section 3.11.
	  	Maximum Interest or Discount	  	34
			
	ARTICLE IV	  	CONDITIONS PRECEDENT TO EFFECTIVENESS OF AGREEMENT, ISSUANCE OF LETTER OF CREDIT AND EXTENSIONS OF CREDIT	  	35
	 Section 4.1.
	  	Conditions To Effectiveness of Agreement and Issuance of Letter of Credit	  	35
	 Section 4.2.
	  	Conditions to Issuance of Letter of Credit and each Conversion	  	38

  

 i 

					
	 Section 4.3.
	  	Conditions to each Issuance of CP Notes	  	39
	 Section 4.4.
	  	Delivery of Documents	  	39
			
	ARTICLE V	  	REPRESENTATIONS AND WARRANTIES	  	40
	 Section 5.1.
	  	Organization; Powers	  	40
	 Section 5.2.
	  	Authorization; Enforceability	  	40
	 Section 5.3.
	  	Governmental Approvals; No Conflicts	  	40
	 Section 5.4.
	  	Investment and Holding Company Status	  	40
	 Section 5.5.
	  	Margin Regulations	  	41
	 Section 5.6.
	  	No Material Adverse Effect	  	41
	 Section 5.7.
	  	Properties	  	41
	 Section 5.8.
	  	Litigation	  	41
	 Section 5.9.
	  	Compliance with Laws and Agreements	  	41
	 Section 5.10.
	  	Taxes	  	41
	 Section 5.11.
	  	Subsidiaries; Investments; Indebtedness	  	41
	 Section 5.12.
	  	Financial Statements	  	42
	 Section 5.13.
	  	Insolvency	  	42
	 Section 5.14.
	  	Activities	  	42
	 Section 5.15.
	  	OFAC and Patriot Act	  	43
			
	ARTICLE VI	  	AFFIRMATIVE COVENANTS	  	43
	 Section 6.1.
	  	Financial Statements and Other Information	  	43
	 Section 6.2.
	  	Notices of Material Events	  	44
	 Section 6.3.
	  	Existence; Conduct of Business	  	44
	 Section 6.4.
	  	Compliance with Laws	  	44
	 Section 6.5.
	  	Payment of Obligations	  	45
	 Section 6.6.
	  	Books and Records; Inspection Rights	  	45
	 Section 6.7.
	  	Maintenance of Properties; Insurance	  	45
	 Section 6.8.
	  	Use of Proceeds	  	45
	 Section 6.9.
	  	Performance of Principal Agreements	  	45
	 Section 6.10.
	  	Activities	  	45
	 Section 6.11.
	  	Further Assurances	  	46
	 Section 6.12.
	  	Fixed Charges Coverage Ratio	  	47
	 Section 6.13.
	  	Additional Information	  	47
	 Section 6.14.
	  	Other Obligations	  	47
	 Section 6.15.
	  	Securities Act	  	47
	 Section 6.16.
	  	Solvency	  	47
	 Section 6.17.
	  	Hedging Transactions	  	47
			
	ARTICLE VII	  	NEGATIVE COVENANTS	  	48
	 Section 7.1.
	  	Offering Memorandum	  	48
	 Section 7.2.
	  	Amendment of Documents	  	48
	 Section 7.3.
	  	Concerning the CP Notes	  	48
	 Section 7.4.
	  	Indebtedness	  	48
	 Section 7.5.
	  	Liens	  	48
	 Section 7.6.
	  	Prohibition on Fundamental Changes	  	48
	 Section 7.7.
	  	Investments	  	49

  

 ii 

					
	 Section 7.8.
	  	Distributions	  	49
	 Section 7.9.
	  	Transactions with Affiliates	  	49
	 Section 7.10.
	  	Capital Expenditures	  	49
	 Section 7.11.
	  	Sale and Lease-Back Transactions	  	49
	 Section 7.12.
	  	Business Activities	  	49
	 Section 7.13.
	  	Bankruptcy	  	49
	 Section 7.14.
	  	Separate Credit	  	50
	 Section 7.15.
	  	Use of Proceeds	  	50
	 Section 7.16.
	  	Accounting Changes	  	50
			
	ARTICLE VIII	  	EVENTS OF DEFAULT	  	50
	 Section 8.1.
	  	Events of Default	  	50
	 Section 8.2.
	  	Remedies	  	52
			
	ARTICLE IX	  	THE ADMINISTRATIVE AGENT	  	53
	 Section 9.1.
	  	Appointment of Administrative Agent	  	53
	 Section 9.2.
	  	Nature of Duties of Administrative Agent	  	53
	 Section 9.3.
	  	Lack of Reliance on the Administrative Agent	  	54
	 Section 9.4.
	  	Certain Rights of the Administrative Agent	  	54
	 Section 9.5.
	  	Reliance by Administrative Agent	  	54
	 Section 9.6.
	  	The Administrative Agent in its Individual Capacity	  	55
	 Section 9.7.
	  	Successor Administrative Agent	  	55
	 Section 9.8.
	  	Authorization to Execute other Loan Documents	  	56
	 Section 9.9.
	  	Further Assurances	  	56
			
	ARTICLE X	  	MISCELLANEOUS	  	56
	 Section 10.1.
	  	Notices	  	56
	 Section 10.2.
	  	Waiver; Amendments	  	58
	 Section 10.3.
	  	Expenses; Indemnification	  	59
	 Section 10.4.
	  	Successors and Assigns	  	60
	 Section 10.5.
	  	Governing Law; Jurisdiction; Consent to Service of Process	  	64
	 Section 10.6.
	  	WAIVER OF JURY TRIAL	  	64
	 Section 10.7.
	  	Right of Setoff	  	65
	 Section 10.8.
	  	Counterparts; Integration	  	65
	 Section 10.9.
	  	Survival	  	65
	 Section 10.10.
	  	Severability	  	66
	 Section 10.11.
	  	Confidentiality	  	66
	 Section 10.12.
	  	Interest Rate Limitation	  	66
	 Section 10.13.
	  	Waiver of Effect of Corporate Seal	  	66
	 Section 10.14.
	  	Patriot Act	  	67

  

 iii 

					
	Schedules	  	 	  	 
			
	 Schedule I
	  	 	  	Commitment Amounts
			
	Exhibits	  	 	  	 
			
	 Exhibit A
	  	-	  	Form of Note
	 Exhibit B
	  	-	  	Form of Letter of Credit
	 Exhibit C
	  	-	  	Form of Depositary Agreement
	 Exhibit D
	  	-	  	Form of Security Agreement
	 Exhibit E
	  	-	  	Form of Parent Guarantee
	 Exhibit F
	  	-	  	Form of Maker Consent
	 Exhibit G
	  	-	  	Form of Notice to Depositary
	 Exhibit H
	  	-	  	Form of Opinion of Counsel to the Borrower and the Parent Guarantor
	 Exhibit I
	  	-	  	Form of Assignment and Acceptance
	 Exhibit J
	  	-	  	Form of Notice of Conversion/Continuation

  

 iv 

 CREDIT AGREEMENT 
  
 THIS CREDIT AGREEMENT (this “Agreement”) is made and entered into as of October 20, 2005, by
and among NATC CALIFORNIA LLC, a Delaware limited liability company (the “Borrower”), the several banks and other financial institutions and lenders from time to time party hereto (the “Lenders”), and SUNTRUST BANK,
in its capacities as administrative agent for the Lenders and letter of credit issuing bank hereunder (together with any successors in such capacities, the “Administrative Agent”). 
  
 W I T N E S S E T H: 
  
 WHEREAS, the Borrower proposes to sell its promissory notes in the
United States commercial paper market in an aggregate face amount up to but not exceeding $350,000,000 at any one time outstanding supported by a direct-pay letter of credit to be issued by the Administrative Agent as herein provided; 
  
 WHEREAS, subject to the terms and conditions set forth below, the
Administrative Agent is willing to issue the letter of credit; and 
  
 WHEREAS, subject to the terms and conditions set forth below, the Lenders are willing to participate in the letter of credit as hereinafter provided; 
  
 NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Borrower, the Lenders
and the Administrative Agent agree as follows: 
  
 ARTICLE I

  
 DEFINITIONS; CONSTRUCTION 
  
 Section 1.1. Definitions. In addition to the other terms
defined herein, the following terms used herein shall have the meanings herein specified (to be equally applicable to both the singular and plural forms of the terms defined): 
  
 “Adjusted LIBO Rate” shall mean, with respect to each Interest Period for a Eurodollar Borrowing, the rate
per annum obtained by dividing (i) LIBOR for such Interest Period by (ii) a percentage equal to 1.00 minus the Eurodollar Reserve Percentage. 
  

“Administrative Questionnaire” shall mean, with respect to each Lender, an administrative questionnaire in the form prepared by the
Administrative Agent and submitted to the Administrative Agent duly completed by such Lender. 
  
 “Affiliate” shall mean, as to any Person, any other Person that directly, or indirectly through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such Person.
For the purposes of this definition, “Control” shall mean the power, directly or indirectly, either to (i) vote 10% or more of the securities having ordinary voting power for the election of directors (or persons performing similar
functions) of a Person or (ii) direct or cause the direction of the management and policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. The terms “Controlling”, “Controlled
by”, and “under common Control with” have the meanings correlative thereto. 

 “Aggregate Commitment Amount” shall mean the aggregate principal amount of the Aggregate
Commitments in effect from time to time. The Aggregate Commitment Amount shall not exceed the Stated Amount of the Letter of Credit at any time. 
  
 “Aggregate Commitments” shall mean at any time, collectively, all Commitments of all Lenders in effect at such time. 
  
 “Applicable Lending Office” shall mean, for each Lender and
for each Type of Loan, the “Lending Office” of such Lender (or an Affiliate of such Lender) designated for such Type of Loan in the Administrative Questionnaire submitted by such Lender or such other office of such Lender (or an Affiliate
of such Lender) as such Lender may from time to time specify to the Administrative Agent and the Borrower as the office by which its Loans of such Type are to be made and maintained. 
  
 “Arranger” shall mean SunTrust Capital Markets, Inc. 
  
 “Assignment and Acceptance” shall mean an assignment and
acceptance entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 10.4(b)) and accepted by the Administrative Agent, in the form of Exhibit I attached hereto or any other form
approved by the Administrative Agent. 
  
 “Base
Rate” shall mean the higher of (i) the per annum rate which the Administrative Agent publicly announces from time to time to be its prime lending rate, as in effect from time to time, and (ii) the Federal Funds Rate, as in effect
from time to time, plus one-half of one percent (0.50%). The Administrative Agent’s prime lending rate is a reference rate and does not necessarily represent the lowest or best rate charged to customers. The Administrative Agent may make
commercial loans or other loans at rates of interest at, above or below the Administrative Agent’s prime lending rate. Each change in the Administrative Agent’s prime lending rate shall be effective from and including the date such change
is publicly announced as being effective. 
  
 “Borrower
Hedge Provider” shall mean the hedge counterparty to the Borrower Hedging Agreement, provided that such Person is (a) a Lender or an Affiliate of a Lender or (b) JPMorgan or a Person acceptable to the Administrative Agent in its
reasonable discretion and JPMorgan or such other Person executes and delivers to the Administrative Agent a letter agreement in form and substance acceptable to the Administrative Agent pursuant to which JPMorgan or such other Person
(i) appoints the Administrative Agent as its agent under the applicable Loan Documents and (ii) agrees to be bound by the provisions of Article IX and X of this Agreement. 
  
 “Borrower Hedging Agreement” shall mean a Hedging Transaction in form and substance reasonably satisfactory
to the Administrative Agent entered into by the Borrower with the Borrower Hedge Provider to hedge against the difference between the amount of interest accruing on the Purchase Note and the amount of interest accruing or discount accreting on the
Loans or the CP Notes, respectively, as from time to time amended with the consent of the Administrative Agent. 
  

 -2- 

 “Borrowing” shall mean a borrowing consisting of Loans of the same Type, made, converted
or continued on the same date and in the case of Eurodollar Loans, as to which a single Interest Period is in effect. 
  
 “Business Day” shall mean (i) any day other than a Saturday, Sunday or other day on which commercial banks in Atlanta, Georgia and
New York, New York are authorized or required by law to close and (ii) if such day relates to a Borrowing of, a payment or prepayment of principal or interest on, a conversion of or into, or an Interest Period for, a Eurodollar Loan or a notice
with respect to any of the foregoing, any day on which dealings in Dollars are carried on in the London interbank market. 
  
 “Capital Lease Obligations” of any Person shall mean the obligations of such Person to pay rent and/or other amounts under any lease of
(or other arrangement conveying the right to use) Property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance with GAAP. 
  
 “Change in Law” shall mean (i) the adoption of any applicable law, rule or regulation after the date of this Agreement, (ii) any change in any applicable law, rule or regulation, or any
change in the interpretation or application thereof, by any Governmental Authority after the date of this Agreement, or (iii) compliance by any Lender (or its Applicable Lending Office) (or for purposes of Section 2.14(b), by such
Lender’s parent corporation, if applicable) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement. 
  
 “Closing Date” shall mean the date on which the conditions
precedent set forth in Sections 4.1, 4.2 and 4.3 have been satisfied or waived in accordance with Section 10.2. 
  
 “Code” shall mean the Internal Revenue Code of 1986, as amended and in effect from time to time. 
  
 “Collateral” has the meaning set forth in the Security
Agreement. 
  
 “Commercial Paper Account” has the
meaning set forth in Section 3.3(a). 
  
 “Commitment” shall mean, with respect to each Lender, the obligation of such Lender to participate in the Letter of Credit and make Loans to the Borrower in an aggregate principal amount not exceeding the amount set forth
with respect to such Lender on Schedule I, or in the case of a Person becoming a Lender after the Closing Date through an assignment of an existing Commitment, the amount of the assigned “Commitment” as provided in the Assignment
and Acceptance executed by such Person as an assignee, as the same may be increased or deceased pursuant to terms hereof. 
  

 -3- 

 “Commitment Termination Date” shall mean the earliest of (i) December 15,
2009, if the Borrower has, at least sixty (60) days prior to December 15, 2009, delivered to Maker a notice stating that the Borrower elects that the maturity of the Purchase Note not be extended in accordance with the terms thereof,
(ii) October 20, 2010, (iii) the date on which the Commitments are terminated pursuant to Section 2.4 and (iv) the date on which all amounts outstanding under this Agreement have been declared or have automatically
become due and payable (whether by acceleration or otherwise). 
  
 “Consents” shall mean, collectively, (i) a letter agreement duly executed by the Maker, acknowledged by the Parent Guarantor and the Borrower and consented to by the Purchase L/C Bank, in substantially the form of
Exhibit F and (ii) a letter agreement duly executed by the Maker, the Borrower, the Parent Guarantor and the Administrative Agent and acknowledged by the Purchase L/C Bank, in substantially the form of Annex 1 to Exhibit F.

  
 “Conversion Date” shall mean any date on
which Reimbursement Obligations are converted to Loans under Section 2.2. 
  
 “CP Maturity Date” shall mean each date on which CP Notes mature. 
  
 “CP Notes” shall mean the promissory notes of the Borrower in substantially the form attached to the Letter of Representations (as
defined in the Depositary Agreement), in each case issued in accordance with the terms of the Depositary Agreement. 
  
 “Dealer” shall mean SunTrust Capital Markets, Inc. 
  
 “Dealer Agreement” shall mean the agreement among the Borrower, the Parent Guarantor and the Dealer with
respect to the issue and sale of CP Notes, as from time to time amended. 
  
 “Default” shall mean any condition or event that, with the giving of notice or the lapse of time or both, would constitute an Event of Default. 
  
 “Default Interest” shall mean any interest accruing at the
rates set forth in Section 2.9(b). 
  
 “Depositary” shall mean JPMorgan Chase Bank, National Association or any successor depositary approved by the Administrative Agent and the Borrower. 
  
 “Depositary Agreement” shall mean a Depositary Agreement among the Borrower, the Administrative Agent and
the Depositary in substantially the form of Exhibit C, as from time to time amended. 
  
 “Dollar(s)” and the sign “$” shall mean lawful money of the United States of America. 
  
 “Eurodollar” when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, bears
interest at a rate determined by reference to the Adjusted LIBO Rate. 
  

 -4- 

 “Eurodollar Reserve Percentage” shall mean the aggregate of the maximum reserve
percentages (including without limitation any emergency, supplemental, special or other marginal reserves) expressed as a decimal (rounded upwards to the next 1/100th of 1%) in effect on any day to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate pursuant to regulations issued by the Board of Governors of the Federal Reserve System (or any Governmental Authority succeeding to any of its principal functions) with respect to eurocurrency funding (currently
referred to as “eurocurrency liabilities” under Regulation D). Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or
offsets that may be available from time to time to any Lender under Regulation D. The Eurodollar Reserve Percentage shall be adjusted automatically on and as of the effective date of any change in any reserve percentage. 
  
 “Event of Default” shall have the meaning provided in
Article VIII. 
  
 “Excluded Taxes”
shall mean with respect to the Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) its net
income by the United States of America, or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its Applicable Lending Office is located,
(b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which any Lender is located and (c) in the case of a Foreign Lender, any withholding tax that (i) is imposed
on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement, (ii) is imposed on amounts payable to such Foreign Lender at any time that such Foreign Lender designates a new lending office, other
than taxes that have accrued prior to the designation of such lending office that are otherwise not Excluded Taxes, and (iii) is attributable to such Foreign Lender’s failure to comply with Section 2.16(e). 
  
 “Existing Credit Agreement” shall mean the Credit Agreement
dated as of October 23, 2000, by and among the Borrower, each bank or other financial institution party thereto from time to time as a “Bank”, JPMorgan Chase Bank, N.A. (as successor to The Chase Manhattan Bank), as Administrative
Agent, JPMorgan Chase Securities Inc. (as successor to Chase Securities Inc.), as Arranger, and JPMorgan Chase Bank, N.A. (as successor to The Chase Manhattan Bank), as L/C Fronting Bank, as amended and in effect immediately prior to the Closing
Date. 
  
 “Existing Commercial Paper Program”
shall mean the Borrower’s commercial paper program with JPMorgan Chase Bank, N.A. as in effect immediately prior to the Closing Date. 
  
 “Existing Hedging Agreement” shall mean the ISDA Master Agreement dated as of November 9, 2000, between JPMorgan Chase Bank, N.A.
(as successor to The Chase Manhattan Bank) and the Borrower, together with all schedules thereto and all confirmations exchanged between the parties with respect to the transactions contemplated thereby, in each case as amended and in effect on the
Closing Date. 
  

 -5- 

 “Existing Loan Documents” shall mean, collectively, (i) the Existing Credit
Agreement and (ii) each of the Principal Documents referred to in the Existing Credit Agreement, in each case as amended and in effect immediately prior to the Closing Date. 
  
 “Extension of Credit” shall mean (i) the issuance of the Letter of Credit by the Administrative Agent,
(ii) the issuance of CP Notes by the Borrower supported by the Letter of Credit, (iii) the conversion of Reimbursement Obligations into Loans pursuant to Section 2.2 or (iii) the making of an L/C Payment. 
  
 “Face Amount” shall mean, with respect to any outstanding CP
Note, the full amount due at maturity of such CP Note. 
  
 “Federal Funds Rate” shall mean, for any day, the rate per annum (rounded upwards, if necessary, to the next 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with member
banks of the Federal Reserve System arranged by Federal funds brokers, as published by the Federal Reserve Bank of New York on the next succeeding Business Day or if such rate is not so published for any Business Day, the Federal Funds Rate for such
day shall be the average rounded upwards, if necessary, to the next 1/100th of 1% of the quotations for such day on such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by the
Administrative Agent. 
  
 “Fee Letter” shall mean
that certain fee letter, dated as of August 29, 2005, executed by the Arranger and SunTrust and acknowledged and agreed to by the Parent Guarantor. 
  
 “Fixed Charges Coverage Ratio” shall mean, for any Payment Period, the ratio of (i) the aggregate amount of Pledged Deposit Interest
Payments, the aggregate amount of interest income earned on funds on deposit in the Payment Account and the aggregate amount of net payments to the Borrower under the Borrower Hedging Agreement and the Existing Hedging Agreement, in each case during
such Payment Period, to (ii) the sum of the aggregate amount of accreted discount on CP Notes maturing during such Payment Period and all accrued L/C Fees and other fees accruing under this Agreement or the Fee Letter during such Payment
Period. 
  
 “Foreign Lender” shall mean any
Lender that is not a United States person under Section 7701(a)(3) of the Code. 
  
 “GAAP” shall mean generally accepted accounting principles in the United States of America. 
  
 “Governmental Authority” shall mean the government of the United States of America, any other nation or any political subdivision
thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining
to government. 
  
 “Guarantee” of or by any
Person (the “guarantor”) shall mean any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary
obligor”) in 
  

 -6- 

 any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease Property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition
or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount
of the primary obligation in respect of which Guarantee is made or, if not so stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such
Person in good faith. The term “Guarantee” used as a verb has a corresponding meaning. 
  
 “Hedging Obligations” of any Person shall mean any and all obligations of such Person, whether absolute or contingent and howsoever and
whensoever created, arising, evidenced or acquired under (i) any and all Hedging Transactions, (ii) any and all cancellations, buy backs, reversals, terminations or assignments of any Hedging Transactions and (iii) any and all
renewals, extensions and modifications of any Hedging Transactions and any and all substitutions for any Hedging Transactions. 
  
 “Hedging Transaction” of any Person shall mean any transaction (including an agreement with respect thereto) now existing or hereafter
entered into by such Person that is a rate swap, basis swap, forward rate transaction, commodity swap, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collateral transaction, forward transaction, currency swap
transaction, cross-currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of these transactions) or any combination thereof, whether linked to one or more interest rates, foreign
currencies, commodity prices, equity prices or other financial measures. 
  
 “Indebtedness” of any Person shall mean, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations
of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title
retention agreements relating to Property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of Property or services (excluding current accounts payable incurred in the ordinary course of
business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account
party in respect of letters of credit and letters of guaranty, (j) all obligations, contingent or otherwise, of such Person in respect of banker’s acceptances and similar extensions of credit (k) all obligations of such Person,
contingent or otherwise, to purchase, redeem, retire or 
  

 -7- 

 otherwise acquire for value any common stock of such Person, (l) Off-Balance Sheet Liabilities and (m) all
Hedging Obligations. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such
Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness expressly provide that such Person is not liable therefor. 
  
 “Indemnified Taxes” shall mean Taxes other than Excluded Taxes. 
  
 “Interest Period” shall mean with respect to any Eurodollar
Borrowing, a period of one, two, three or six months; provided, that: 
  
 (i) the initial Interest Period for such Borrowing shall commence on the date of such Borrowing (including the date of any conversion from a Borrowing of another Type), and each Interest Period occurring thereafter in
respect of such Borrowing shall commence on the day on which the next preceding Interest Period expires; 
  
 (ii) if any Interest Period would otherwise end on a day other than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day, unless such Business Day falls in another calendar month, in which case such Interest Period would end on the next preceding Business Day; 
  
 (iii) any Interest Period which begins on the last Business Day of a calendar month or on a day for which
there is no numerically corresponding day in the calendar month at the end of such Interest Period shall end on the last Business Day of such calendar month; 
  

(iv) in the event that a Market Disruption Event referred to in clause (3) of the definition of such term has occurred, each
Interest Period in respect of any Eurodollar Borrowing thereafter shall commence on the date of such Borrowing (including the date of any conversion from a Borrowing of another Type) or on the date of any continuation of such Borrowing, as the case
may be, and end on the date one month thereafter and each subsequent Interest Period in respect thereof shall commence on the last day of the immediately preceding Interest Period and end on the date one month thereafter; and 
  
 (v) any Interest Period that would otherwise extend beyond
the Commitment Termination Date shall end on the Commitment Termination Date. 
  
 “Investment” in any Person shall mean any loan or advance to such Person, or any purchase or other acquisition of any capital stock or other ownership interest in such Person, or of any warrants,
rights, options or other securities of such Person, or any capital contribution to or other investment in such Person. 
  
 “JPMorgan” shall mean JPMorgan Chase Bank, N.A., a national banking association. 
  
 “L/C Fees” has the meaning set forth in
Section 2.10(b). 
  

 -8- 

 “L/C Payment” shall mean each payment by the Administrative Agent under the Letter of
Credit. 
  
 “Lenders” shall have the meaning
assigned to such term in the opening paragraph of this Agreement. 
  
 “Letter of Credit” shall mean an irrevocable direct-pay letter of credit issued by the Administrative Agent in substantially the form of Exhibit B, providing for the direct payment by the Administrative Agent to the
Depositary, as agent for the holders of CP Notes, of the Face Amount of the CP Notes. 
  
 “Letter of Credit Account” has the meaning set forth in Section 3.4. 
  
 “LIBOR” shall mean, for any applicable Interest Period with respect to any Eurodollar Loan, the British Bankers’ Association
Interest Settlement Rate per annum for deposits in Dollars for a period equal to such Interest Period appearing on the display designated as Page 3750 on the Dow Jones Markets Service (or such other page on that service or such other service
designated by the British Bankers’ Association for the display of such Association’s Interest Settlement Rates for Dollar deposits) as of 11:00 a.m. (London, England time) on the day that is two Business Days prior to the first day of
the Interest Period or if such Page 3750 is unavailable for any reason at such time, the rate which appears on the Reuters Screen ISDA Page as of such date and such time; provided, that if the Administrative Agent determines that the relevant
foregoing sources are unavailable for the relevant Interest Period, LIBOR shall mean the rate of interest determined by the Administrative Agent to be the average (rounded upward, if necessary, to the nearest 1/100th of 1%) of the rates per annum at
which deposits in Dollars are offered to the Administrative Agent two (2) Business Days preceding the first day of such Interest Period by leading banks in the London interbank market as of 10:00 a.m. (New York City time) for delivery on the
first day of such Interest Period, for the number of days comprised therein and in an amount comparable to the amount of the Eurodollar Loan of the Administrative Agent. 
  
 “Lien” shall mean any mortgage, pledge, security interest, lien (statutory or otherwise), charge,
encumbrance, hypothecation, assignment, deposit arrangement, or other arrangement having the practical effect of the foregoing or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever
(including any conditional sale or other title retention agreement and any capital lease having the same economic effect as any of the foregoing). 
  
 “Loan” shall mean a loan deemed to be made by a Lender under its Commitment for the account of the Borrower pursuant to
Section 2.2, which may, subject to the terms of this Agreement, either be a Base Rate Loan or a Eurodollar Loan. 
  
 “Loan Documents” shall mean, collectively, this Agreement, the Notes (if any), the Depositary Agreement, the CP Notes, the Parent
Guarantee, the Security Agreement, the Dealer Agreement, the Fee Letter, the Borrower Hedging Agreement, all Notices of Conversion/Continuation and any and all other instruments, agreements, documents and writings executed in connection with any of
the foregoing. 
  

 -9- 

 “Loan Parties” shall mean the Borrower and the Parent Guarantor. 
  
 “Maker” shall mean HTC Acquisition LLC, a Delaware limited
liability company. 
  
 “Market Disruption Event”
shall mean (1) any introduction of or change in the interpretation of any law or regulation that would make it unlawful or unduly burdensome for the Administrative Agent to issue or maintain the Letter of Credit, any outbreak or escalation of
hostilities in the United States or other similar calamity or crisis, any suspension of or material limitation on trading on the New York Stock Exchange or any other national securities exchange, or any declaration of a general banking moratorium by
the banking authorities of the United States, the State of New York or the State of Georgia or the establishment of any new restrictions on transactions in securities or on banks materially affecting the free market for securities which would, in
any such case, materially affect the market for commercial paper in the United States, or (2) bids for the CP Notes in an amount at least equal to the aggregate amount of the Commitments not being available, or (3) current spreads for the
CP Notes exceeding LIBOR for corresponding periods by 0.125% or more. 
  
 “Market Disruption Instructions” has the meaning set forth in Section 3.8. 
  
 “Material Adverse Effect” shall mean a material adverse effect on (a) the business, operations, property, financial condition or
prospects of the Borrower or (b) the validity or enforceability of any of the Loan Documents or the rights or remedies of the Administrative Agent or the Lenders hereunder or thereunder or (c) the ability of the Borrower to perform its
obligations under any of the Loan Documents. 
  
 “Maximum
Commercial Paper Amount” shall mean, at any time, an amount equal to (a) the aggregate amount of the Commitments at such time less (b) the sum of (i) the aggregate principal amount of all then outstanding Loans (ii) the
aggregate amount of all unreimbursed L/C Payments, and (iii) the aggregate amount of all Reimbursement Obligations which have not been converted into Loans. 
  
 “Moody’s” shall mean Moody’s Investors Service, Inc. 
  
 “Note” shall mean a promissory note of the Borrower payable
to the order of a requesting Lender in the principal amount of such Lender’s Commitment, in substantially the form of Exhibit A. 
  
 “Notice of Conversion/Continuation” shall mean the notice given by the Borrower to the Administrative Agent in respect of the conversion
or continuation of an outstanding Borrowing as provided in Section 2.3(a). 
  
 “Obligations” shall mean all amounts owing by the Borrower to the Administrative Agent, the Arranger or any Lender pursuant to or in connection with this Agreement, any other Loan Document or the
Letter of Credit, including without limitation, all principal, interest (including any interest accruing after the filing of any petition in bankruptcy or the commencement of any insolvency, reorganization or like proceeding relating to the
Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), all reimbursement obligations in respect of L/C Payments, all Reimbursement 
  

 -10- 

 Obligations, and all fees, expenses, indemnification and reimbursement payments, costs and expenses (including all fees
and expenses of counsel to the Administrative Agent and any Lender incurred pursuant to this Agreement or any other Loan Document), whether direct or indirect, absolute or contingent, liquidated or unliquidated, now existing or hereafter arising
hereunder or thereunder, and all Hedging Obligations owed to the Administrative Agent, any Lender or any of their Affiliates incurred in order to limit interest rate or fee fluctuation with respect to the Loans or otherwise, and all obligations and
liabilities incurred in connection with collecting and enforcing the foregoing, together with all renewals, extensions, modifications or refinancings thereof. 
  

“Off-Balance Sheet Liabilities” of any Person shall mean (i) any repurchase obligation or liability of such Person with respect
to accounts or notes receivable sold by such Person, (ii) any liability of such Person under any sale and leaseback transactions that do not create a liability on the balance sheet of such Person, (iii) any Synthetic Lease Obligation or
(iv) any obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the balance sheet of such Person. 
  
 “Other Taxes” shall mean any and all present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.

  
 “Outstanding Extensions of Credit” shall
mean, at any time, the sum of (a) the aggregate Face Amount of CP Notes outstanding supported by the Letter of Credit, (b) the aggregate unpaid principal amount of Loans then outstanding, (c) the aggregate amount of unreimbursed L/C
Payments, and (d) the aggregate amount of all Reimbursement Obligations which have not been converted into Loans. 
  
 “Parent Guarantee” shall mean an instrument in substantially the form of Exhibit E, duly executed by the Parent Guarantor.

  
 “Parent Guarantor” shall mean Georgia-Pacific
Corporation, a Georgia corporation, and its successors and assigns. 
  
 “Participant” shall have the meaning set forth in Section 10.4(d). 
  
 “Payment Account” shall mean an account of the Borrower at SunTrust, number 1000032705914, under the sole dominion and control of the
Administrative Agent, into which Pledged Deposit Interest Payments and all proceeds of any drawing under the Purchase L/C shall be made and from which the Administrative Agent shall apply amounts as provided in Section 3.2. 

 
 “Payment Office” shall mean the office of the
Administrative Agent located at 303 Peachtree Street, N.E., Atlanta, Georgia 30308, or such other location as to which the Administrative Agent shall have given written notice to the Borrower and the other Lenders. 
  

 -11- 

 “Payment Period” shall mean, for purposes of the definition of “Fixed Charges
Coverage Ratio”, a period calculated by reference to the date of each successive three-month anniversary of the date of the first issuance of CP Notes (any such three-month anniversary date, the “calculation date”), such period
to commence on the date twelve months prior to such calculation date and to end on such calculation date. 
  
 “Permitted Investments” shall mean the Purchase Note, the Purchase L/C, the Payment Account, the Commercial Paper Account, the Letter of
Credit Account, the Borrower Hedging Agreement and the Existing Hedging Agreement. 
  
 “Person” shall mean any individual, partnership, firm, corporation, association, joint venture, limited liability company, trust or other entity, or any Governmental Authority. 
  
 “Pledge Agreement” shall mean the Pledge Agreement dated as
of October 7, 2005, between the Maker and the Purchase L/C Bank, as from time to time amended in accordance with the terms hereof and thereof. 
  
 “Pledged Deposit” shall mean the “Pledged TD” as defined in the Pledge Agreement. 
  
 “Pledged Deposit Interest Payments” shall mean interest
accruing in respect of the Pledged Deposit required pursuant to the Pledge Agreement to be remitted by the Purchase L/C Bank to or for the account of the Maker. 
  

“Property” of any Person shall mean any property, assets or revenues, or interest therein, of such Person. 
  
 “Pro Rata Share” shall mean, at any time, for any Lender, a
fraction (expressed as a percentage) having (a) as its numerator the Commitment of such Lender as in effect at such time (or, if the Commitments have expired or been terminated, as in effect immediately prior thereto), and (b) as its
denominator the sum of all of the Commitments of all the Lenders as in effect at such time (or, if the Commitments have expired or been terminated, as in effect immediately prior thereto). 
  
 “Purchase Documents” shall mean, collectively, the Purchase
Note, the Purchase L/C, the Reimbursement Agreement and the Pledge Agreement. 
  
 “Purchase L/C” shall mean the irrevocable standby letter of credit no. F847157 dated October 7, 2005, issued by the Purchase L/C Bank for the account of the Maker and for the benefit of the
Borrower, as from time to time amended and/or reissued or divided in accordance with the terms hereof and thereof. 
  
 “Purchase L/C Bank” shall mean SunTrust and any successor thereto as issuer of the Purchase L/C. 
  
 “Purchase Note” shall mean the promissory note issued by the
Maker, dated December 15, 1999, payable to the order of North American Timber Corp., in the principal amount of $397,000,000, and assigned and transferred by North American Timber Corp. to the Borrower, as from time to time amended and/or
reissued or divided in accordance with the terms hereof and thereof. 
  

 -12- 

 “Regulation D” shall mean Regulation D of the Board of Governors of the
Federal Reserve System, as the same may be in effect from time to time, and any successor regulations. 
  
 “Reimbursement Agreement” shall mean the Reimbursement Agreement dated as of October 7, 2005, between the Maker and the Purchase L/C
Bank, as from time to time amended in accordance with the terms hereof and thereof. 
  
 “Reimbursement Obligations” shall mean the obligations of the Borrower to reimburse the Lenders pursuant to Section 2.1(f) for the full amount of each Reimbursement Payment. 
  
 “Reimbursement Payment” has the meaning set forth in
Section 2.1(d). 
  
 “Related Parties”
shall mean, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person’s Affiliates. 
  
 “Required Lenders” shall mean, at any time, Lenders holding
more than 50% of the aggregate outstanding Commitments at such time or if the Lenders have no Commitments outstanding, then Lenders holding more than 50% of the aggregate outstanding Reimbursement Obligations and Loans. 
  
 “Requirement of Law” for any Person shall mean the articles
or certificate of incorporation, bylaws, partnership certificate and agreement, or limited liability company certificate of organization and agreement, as the case may be, and other organizational and governing documents of such Person, and any law,
treaty, rule or regulation, or determination of a Governmental Authority, in each case applicable to or binding upon such Person or any of its Property or to which such Person or any of its Property is subject. 
  
 “Responsible Officer” shall mean any manager or the
president, the chief executive officer, the chief operating officer, the chief financial officer, the treasurer or a vice president of the Borrower or such other representative of the Borrower as may be designated in writing by any one of the
foregoing with the consent of the Administrative Agent; and, with respect to the financial covenants only, the chief financial officer or the treasurer of the Borrower. 
  
 “Security Agreement” shall mean a Security Agreement between the Borrower and the Administrative Agent in
substantially the form of Exhibit D. 
  
 “S&P” shall mean Standard & Poor’s, a Division of the McGraw-Hill Companies. 
  
 “Stated Amount” has the meaning set forth in the Letter of Credit, as the same may be extended. 
  

 -13- 

 “Stated Termination Date” has the meaning set forth in the Letter of Credit, as the same
may be extended. 
  
 “Subsidiary” shall mean,
with respect to any Person (the “parent”), any corporation, partnership, joint venture, limited liability company, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s
consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, partnership, joint venture, limited liability company, association or other entity (i) of
which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power, or in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned,
controlled or held, or (ii) that is, as of such date, otherwise controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. Unless otherwise indicated, all references to
“Subsidiary” hereunder shall mean a Subsidiary of the Borrower. 
  
 “Synthetic Lease” shall mean a lease transaction under which the parties intend that (i) the lease will be treated as an “operating lease” by the lessee pursuant to Statement of
Financial Accounting Standards No. 13, as amended and (ii) the lessee will be entitled to various tax and other benefits ordinarily available to owners (as opposed to lessees) of like property. 
  
 “Synthetic Lease Obligations” shall mean, with respect to
any Person, the sum of (i) all remaining rental obligations of such Person as lessee under Synthetic Leases which are attributable to principal and, without duplication, (ii) all rental and purchase price payment obligations of such Person
under such Synthetic Leases assuming such Person exercises the option to purchase the lease property at the end of the lease term. 
  
 “SunTrust” shall mean SunTrust Bank, a Georgia banking corporation. 
  
 “Taxes” shall mean any and all present or future taxes, levies, imposts, duties, deductions, charges or
withholdings imposed by any Governmental Authority. 
  
 “Transactions” shall mean, collectively, the making and performance by the Borrower of the Loan Documents, the issuance of CP Notes and the other transactions contemplated by the Loan Documents. 
  
 “Type”, when used in reference to a Loan or Borrowing,
refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Base Rate. 
  
 Section 1.2. Accounting Terms. As used herein and in the Notes, and in any certificate or other document
made or delivered pursuant hereto, accounting terms not defined herein shall have the meanings customarily given them under GAAP. 
  
 Section 1.3. Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase
“without 
  

 -14- 

 limitation”. The word “will” shall be construed to have the same meaning and effect as the word
“shall”. In the computation of periods of time from a specified date to a later specified date, the word “from” shall mean “from and including” and the word “to” shall mean “to but excluding”. Unless
the context requires otherwise (i) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as it was originally executed or as it may
from time to time be amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (ii) any reference herein to any Person shall be construed to include
such Person’s successors and permitted assigns, (iii) the words “hereof”, “herein” and “hereunder” and words of similar import shall be construed to refer to this Agreement as a whole and not to any particular
provision hereof, (iv) all references to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles, Sections, Exhibits and Schedules to this Agreement and (v) all references to a specific time shall be
construed to refer to the time in the city and state of the Administrative Agent’s principal office, unless otherwise indicated. 
  
 ARTICLE II 
  
 LETTER OF CREDIT AND LOAN FACILITIES 
  
 Section 2.1. Letter of Credit. 
  
 (a) On the Closing Date, the Administrative Agent, in reliance upon the agreements of the Lenders pursuant to the following sentence and
Section 2.1(d) and subject to the other terms and conditions of this Agreement, agrees, at the request of the Borrower, to issue the Letter of Credit to the Depositary. Upon the issuance of the Letter of Credit, each Lender shall be
deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Administrative Agent without recourse a participation in the Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn
under the Letter of Credit. 
  
 (b) In addition to the
satisfaction of the conditions in Article IV, the issuance of the Letter of Credit will be subject to the further conditions that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating
to the Letter of Credit as the Administrative Agent shall reasonably require; provided, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control.

  
 (c) The Borrower agrees to reimburse the Administrative Agent
for the full amount of each L/C Payment on the date of such L/C Payment. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Administrative Agent for any L/C Payments made by the Administrative Agent in respect of such
drawing, without presentment, demand or other formalities of any kind. 
  
 (d) As promptly as possible upon becoming aware that it has not been or will not be reimbursed in full for any L/C Payment (or portion thereof) before 5:00 p.m. (New York City time) on the date of such L/C Payment, whether by reason of the
giving of Market 
  

 -15- 

 Disruption Instructions or otherwise, the Administrative Agent shall notify each Lender (i) that an L/C Payment has
been made, (ii) that all or a portion thereof has not been reimbursed by the Borrower, and (iii) the amount of each Lender’s Pro Rata Share of the unreimbursed L/C Payment. Each Lender will promptly transfer, in immediately available
funds, by wire transfer the amount of its participation in such unreimbursed L/C Payment to the Administrative Agent by 3:00 p.m. (New York City time) on the date that it receives the Administrative Agent’s notice, provided that such notice is
received no later than 1:00 p.m. (New York City time), and otherwise by 11:00 a.m. (New York City time) on the immediately following Business Day. Each payment by a Lender under this Section 2.1(d) is herein called a
“Reimbursement Payment”. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including without limitation, (i) any setoff, counterclaim,
recoupment, defense or other right that such Lender or any other Person may have against the Administrative Agent or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of any
Lender’s Commitment, (iii) any adverse change in the condition (financial or otherwise) of the Borrower, the Parent Guarantor or any other Person, (iv) any breach of this Agreement or any other Loan Document by the Borrower, the
Parent Guarantor or any other Lender, (v) any amendment, renewal or extension of the Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. Whenever, at any time
after the Administrative Agent has received from any such Lender the funds for its participation in a L/C Payment, the Administrative Agent receives any payment on account thereof, the Administrative Agent will distribute to such Lender its Pro Rata
Share of such payment; provided, that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the
Administrative Agent any portion thereof previously distributed by the Administrative Agent to it. 
  
 (e) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to paragraph (d) of this Section 2.1 on the
due date therefor, such Lender shall pay interest to the Administrative Agent on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided, that if such Lender shall fail to
make such payment to the Administrative Agent within two (2) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the Base Rate. If any Lender does not pay such
corresponding amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Administrative Agent together
with interest at the Base Rate. Nothing in this subsection shall be deemed to relieve any Lender from its obligation to pay to the Administrative Agent its Pro Rata Share of each unreimbursed L/C Payment hereunder or to prejudice any rights which
the Borrower may have against any Lender as a result of any default by such Lender hereunder. 
  
 (f) The Borrower agrees to pay to the Administrative Agent for the account of each Lender an amount equal to the full amount of each Reimbursement Payment on the date of such Reimbursement Payment made by such Lender,
subject to the provisions of Section 2.2. 
  

 -16- 

 (g) The Borrower’s obligation to reimburse the Administrative Agent and the Lenders for L/C Payments
and Reimbursement Payments hereunder, respectively, shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the
following circumstances: 
  
 (i) Any lack of
validity or enforceability of the Letter of Credit or this Agreement; 
  
 (ii) The existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of the Letter of Credit
(or any Persons for whom any such beneficiary or transferee may be acting), the Administrative Agent, any Lender or any other Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any
unrelated transaction; 
  
 (iii) Any draft or
other document presented under the Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; 
  
 (iv) Payment by the Administrative Agent under the Letter of Credit against presentation of a draft or other
document to the Administrative Agent that does not comply with the terms of the Letter of Credit; 
  
 (v) Any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this
Section 2.1(g), constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrower’s obligations hereunder; or 
  

(vi) The existence of a Default or an Event of Default. 
  
 Neither the Administrative Agent, the Lenders nor any Related Party of any of the foregoing shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of the Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or
delay in transmission or delivery of any draft, notice or other communication under or relating to the Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence
arising from causes beyond the control of the Administrative Agent; provided, that the foregoing shall not be construed to excuse the Administrative Agent from liability to the Borrower to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Administrative Agent’s failure to exercise care when determining
whether drafts or other documents presented under the Letter of Credit comply with the terms thereof. The parties hereto expressly agree, that in the absence of gross negligence or willful misconduct on the part of the Administrative Agent (as
finally determined by a court of competent jurisdiction), the Administrative Agent shall be deemed to have exercised care in each such determination. In 
  

 -17- 

 furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to
documents presented that appear on their face to be in substantial compliance with the terms of the Letter of Credit, the Administrative Agent may, in its sole discretion, either accept and make payment upon such documents without responsibility for
further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of the Letter of Credit. 
  
 (h) If any L/C Payment is not reimbursed in full on the date such
reimbursement is due, then the Borrower agrees to pay to the Administrative Agent interest on the amount thereof which is not so reimbursed from the date of such L/C Payment until the date such L/C Payment is reimbursed in full, at a rate per annum
equal to the Base Rate in effect from time to time, plus an additional 2% per annum, payable on demand and in any event on the date when such amount is paid in full. If any Reimbursement Payment made by any Lender is not reimbursed in
full on the date such reimbursement is due, then the Borrower agrees to pay to the Administrative Agent, for the account of such Lender, interest on the amount thereof which is not so reimbursed from the date of such Reimbursement Payment is made
until the date such Reimbursement Payment is reimbursed in full, at a rate per annum equal to the Base Rate in effect from time to time, plus an additional 2% per annum, payable on demand and in any event on the date when such amount is
paid in full. 
  
 (i) The Letter of Credit shall be governed by
and construed in accordance with the law of the State of New York (including, without limitation, Article 5 of the Uniform Commercial Code as in effect from time to time in the State of New York) except that with respect to presentation of drafts
and certificates by telecopy transmission, the International Standby Practices, Publication No. 98 of the International Chamber of Commerce shall govern, to the extent not inconsistent with New York law. 
  
 (j) All participations in the Letter of Credit shall be funded by the Lenders
on the basis of their respective Pro Rata Shares. No Lender shall be responsible for any default by any other Lender in its obligations hereunder, and each Lender shall be obligated to fund its participation in the Letter of Credit regardless of the
failure of any other Lender to do the same. 
  
 (k) Subject to the
terms of this Agreement and the other Loan Documents, in the event the Letter of Credit is at any time replaced by a letter of credit issued by the Administrative Agent or any other Person (it being understood by the Borrower that the Administrative
Agent is not, and shall not be, obligated to replace, extend or otherwise amend the Letter of Credit in any respect), the Borrower will give prompt notice of such replacement to S&P and Moody’s. 
  
 Section 2.2. Conversion to Loans. If Market Disruption
Instructions are given pursuant to Section 3.8, then, subject to the terms and conditions of this Agreement (including Section 4.2), the Reimbursement Obligation of the Borrower to each Lender shall, on the date each such
Reimbursement Obligation arises (the “Conversion Date”), automatically be converted into, and each Lender shall be deemed to have made to the Borrower, a Loan in a principal amount equal to the amount of such Reimbursement
Obligation. The date of each Loan shall be deemed to be the Conversion Date thereof. Without prejudice to the obligations of the Lenders under Section 2.1(d), the Lenders shall not be required to disburse any funds to the Borrower as a
result of the occurrence of any Conversion Date. 
  

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 Section 2.3. Interest Rate Elections. 
  
 (a) Each Loan initially shall be a Base Rate Loan. Thereafter, subject to
the terms and conditions of this Agreement, the Borrower may elect to convert such Borrowing into a different Type or to continue such Borrowing, and in the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in this
Section. The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding Loans comprising such Borrowing, and the Loans
comprising each such portion shall be considered a separate Borrowing. 
  
 (b) To make an election pursuant to this Section, the Borrower shall give the Administrative Agent prior written notice (or telephonic notice promptly confirmed in writing) of each Borrowing substantially in the form of Exhibit J (a
“Notice of Conversion/Continuation”) that is to be converted or continued, as the case may be, (x) prior to 11:00 a.m. (New York City time) on the requested date of a conversion into a Base Rate Borrowing and (y) prior to
11:00 a.m. (New York City time) three (3) Business Days prior to a continuation of or conversion into a Eurodollar Borrowing. Each such Notice of Conversion/Continuation shall be irrevocable and shall specify (i) the Borrowing to which
such Notice of Conversion/Continuation applies and if different options are being elected with respect to different portions thereof, the portions thereof that are to be allocated to each resulting Borrowing (in which case the information to be
specified pursuant to clauses (iii) and (iv) shall be specified for each resulting Borrowing); (ii) the effective date of the election made pursuant to such Notice of Conversion/Continuation, which shall be a Business Day,
(iii) whether the resulting Borrowing is to be a Base Rate Borrowing or a Eurodollar Borrowing; and (iv) if the resulting Borrowing is to be a Eurodollar Borrowing, the Interest Period applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of “Interest Period”. If any such Notice of Conversion/Continuation requests a Eurodollar Borrowing but does not specify an Interest Period, the Borrower shall be deemed to
have selected an Interest Period of one month. The principal amount of each Eurodollar Loan shall be not less than $1,000,000 or a larger multiple of $1,000,000, and the principal amount of each Base Rate Loan shall not be less than $1,000,000 or a
larger multiple of $100,000. At no time shall the total number of Eurodollar Loans outstanding at any time exceed four (4). 
  
 (c) If, on the expiration of any Interest Period in respect of any Eurodollar Borrowing, the Borrower shall have failed to deliver a Notice of
Conversion/Continuation, then, unless such Borrowing is repaid as provided herein, the Borrower shall be deemed to have elected to convert such Borrowing to a Base Rate Borrowing. Notwithstanding anything to the contrary in this Agreement, no Loan
may be converted into, or continued as, a Eurodollar Loan if a Default or an Event of Default exists, unless the Administrative Agent and each of the Lenders shall have otherwise consented in writing. No conversion of any Eurodollar Loan shall be
permitted except on the last day of the Interest Period in respect thereof. 
  

 -19- 

 (d) Upon receipt of any Notice of Conversion/Continuation, the Administrative Agent shall promptly notify
each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing. 
  
 Section 2.4. Optional Reduction and Termination of Commitments. 
  
 (a) Unless previously terminated, all Commitments shall terminate on the Commitment Termination Date. 
  
 (b) Upon at least three (3) Business Days’ prior written notice (or
telephonic notice promptly confirmed in writing) to the Administrative Agent (which notice shall be irrevocable), the Borrower may reduce the Aggregate Commitments in part or terminate the Aggregate Commitments in whole; provided, that
(i) any partial reduction shall apply to reduce proportionately and permanently the Commitment of each Lender, (ii) any partial reduction pursuant to this Section 2.4 shall be in an amount of at least $5,000,000 and any larger
multiple of $1,000,000, and (iii) no reduction of the Commitments shall be permitted if, after giving effect thereto and to any repayment or prepayment of unreimbursed L/C Payments, Reimbursement Obligations and Loans to be made on the
effective date thereof with funds other than the proceeds of CP Notes to be issued on such date, the aggregate Outstanding Extensions of Credit would exceed the Aggregate Commitments as so reduced and determined on such date. Promptly upon the
receipt by the Administrative Agent of any such notice, the Administrative Agent shall permanently reduce the Stated Amount of the Letter of Credit by the amount of such reduction in the Commitments, in the manner specified in the Letter of Credit,
and shall send notice of such reduction, in the form of Annex C to the Letter of Credit, to the Lenders, the Depositary, the Dealer, S&P and Moody’s. Outstanding CP Notes may not be redeemed prior to maturity with the proceeds of any
drawing under the Letter of Credit. 
  
 Section 2.5.
Repayment of Loans. The outstanding principal amount of all Loans shall be due and payable (together with accrued and unpaid interest and fees thereon or in respect thereof) on the Commitment Termination Date. Upon receipt of such payment
in full on the Commitment Termination Date, the Administrative Agent shall with reasonable promptness (i) give notice to the Maker that the Administrative Agent’s rights under the Maker’s Consent are terminated and deliver a copy of
each such notice simultaneously to the Borrower, (ii) deliver to the Purchase L/C Bank a notice in substantially the form of Annex 2 to the Purchase L/C Bank’s instruction letter, and (iii) release all liens granted pursuant to the
Security Agreement and take all actions necessary or appropriate to effectuate such release, including without limitation, returning the Purchase Note to the Borrower and giving such notices as are required by the terms of the Purchase L/C to cause
the Borrower to be the Transferee and Beneficiary of, and as such terms are defined in, the Purchase L/C. 
  
 Section 2.6. Evidence of Indebtedness. (a) Each Lender shall maintain in accordance with its usual practice appropriate records
evidencing the Indebtedness of the Borrower to such Lender resulting from each Reimbursement Payment and Loan made by such Lender from time to time, including the amounts of principal and interest payable thereon and paid to such Lender from time to
time under this Agreement. The Administrative Agent shall maintain appropriate records in which shall be recorded (i) the Commitment of each Lender, (ii) the amount of each Reimbursement Payment and Loan made hereunder by each Lender and,
in 
  

 -20- 

 the case of such Loans, the Type thereof and the Interest Period applicable thereto, (iii) the date of each
continuation of such Loans pursuant to Section 2.3, (iv) the date of each conversion of all or a portion of such Loans to another Type pursuant to Section 2.3, (v) the date and amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender hereunder in respect of such Loans and (vi) both the date and amount of any sum received by the Administrative Agent hereunder from the Borrower in respect of the
Reimbursement Obligations and Loans and each Lender’s Pro Rata Share thereof. The entries made in such records shall be prima facie evidence of the existence and amounts of the obligations of the Borrower therein recorded;
provided, that the failure or delay of any Lender or the Administrative Agent in maintaining or making entries into any such record or any error therein shall not in any manner affect the obligation of the Borrower to repay the Reimbursement
Obligations and Loans (both principal and unpaid accrued interest) of such Lender in accordance with the terms of this Agreement. 
  
 (b) At the request of any Lender at any time, the Borrower agrees that it will execute and deliver to such Lender a Note payable to the order of such
Lender. 
  
 Section 2.7. Optional Prepayments.
The Borrower shall have the right at any time and from time to time to prepay any Borrowing, in whole or in part, without premium or penalty, by giving irrevocable written notice (or telephonic notice promptly confirmed in writing) to the
Administrative Agent no later than (i) in the case of prepayment of any Eurodollar Borrowing, 11:00 a.m. (New York City time) not less than three (3) Business Days prior to any such prepayment, and (ii) in the case of any prepayment
of any Base Rate Borrowing, not less than one (1) Business Day prior to the date of such prepayment. Each such notice shall be irrevocable and shall specify the proposed date of such prepayment and the principal amount of each Borrowing or
portion thereof to be prepaid. Upon receipt of any such notice, the Administrative Agent shall promptly notify each affected Lender of the contents thereof and of such Lender’s Pro Rata Share of any such prepayment. If such notice is given, the
aggregate amount specified in such notice shall be due and payable on the date designated in such notice, together with accrued interest to such date on the amount so prepaid in accordance with Section 2.11(c); provided, that if a
Eurodollar Borrowing is prepaid on a date other than the last day of an Interest Period applicable thereto, the Borrower shall also pay all amounts required pursuant to Section 2.15. Each partial prepayment of any Loan shall be in an
amount that would be permitted in the case of an advance of a Borrowing of the same Type pursuant to Section 2.2. Each prepayment of a Borrowing shall be applied ratably to the Loans comprising such Borrowing. 
  
 Section 2.8. Mandatory Prepayments. 
  
 (a) If at any time the aggregate Outstanding Extensions of Credit shall
exceed the Aggregate Commitment Amount, as reduced pursuant to Section 2.4 or otherwise, the Borrower shall immediately repay the Obligations in an amount equal to such excess, together with all accrued and unpaid interest on such excess
amount and any amounts due under Section 2.15. Each prepayment of Loans shall be applied first to the Base Rate Loans to the full extent thereof, and second to the Eurodollar Loans to the full extent thereof. 
  

 -21- 

 (b) If at any time the aggregate Face Amount of CP Notes outstanding at such time shall exceed the
Maximum Commercial Paper Amount at such time, the Borrower shall immediately repay the Obligations in an amount equal to such excess, together with all accrued and unpaid interest on such excess amount and any amounts due under
Section 2.15. Each prepayment of Loans shall be applied first to the Base Rate Loans to the full extent thereof, and second to the Eurodollar Loans to the full extent thereof. 
  
 (c) The Borrower shall apply the proceeds of the initial issuance of CP Notes following the cessation of any Market
Disruption Event (as notified by the Administrative Agent or the Borrower pursuant to Section 3.9) to prepay on the same Business Day any outstanding Loans to the extent of such proceeds. 
  
 Section 2.9. Interest on Loans, L/C Payments and Reimbursement
Obligations. 
  
 (a) The Borrower shall pay interest on
each Base Rate Loan at the Base Rate in effect from time to time and on each Eurodollar Loan at the Adjusted LIBO Rate for the applicable Interest Period in effect for such Loan plus 0.25% per annum. The Borrower shall pay to the
Administrative Agent interest on each unreimbursed L/C Payment, and shall pay to the Administrative Agent for the account of each Lender interest on any Reimbursement Obligation that is owing to such Lender and which have not been converted into a
Loan pursuant to Section 2.2, at the Base Rate in effect from time to time, plus an additional 2% per annum. 
  
 (b) While an Event of Default exists, at the option of the Required Lenders, the Borrower shall pay interest with respect to all Eurodollar Loans at the
rate otherwise applicable for the then-current Interest Period plus an additional 2% per annum until the last day of such Interest Period, and thereafter, and with respect to all Base Rate Loans and all other Obligations hereunder (other
than Loans), at an all-in rate in effect for Base Rate Loans, plus an additional 2% per annum. 
  
 (c) Interest on the principal amount of all Loans shall accrue from and including the date such Loans are made to but excluding the date of any repayment
thereof. Interest on all outstanding Base Rate Loans shall be payable quarterly in arrears on the last day of each March, June, September and December and on the Commitment Termination Date. Interest on all outstanding Eurodollar Loans shall be
payable on the last day of each Interest Period applicable thereto, and, in the case of any Eurodollar Loans having an Interest Period in excess of three months, on each day which occurs every three months after the initial date of such Interest
Period, and on the Commitment Termination Date. Interest on any Loan which is converted into a Loan of another Type or which is repaid or prepaid shall be payable on the date of such conversion or on the date of any such repayment or prepayment (on
the amount repaid or prepaid) thereof. All Default Interest shall be payable on demand. 
  
 (d) The Administrative Agent shall determine each interest rate applicable to the Loans, unreimbursed L/C Payments and Reimbursement Obligations hereunder and shall promptly notify the Borrower and the Lenders of such
rate in writing (or by telephone, promptly confirmed in writing). Any such determination shall be conclusive and binding for all purposes, absent manifest error. 
  

 -22- 

 Section 2.10. Fees. 
  
 (a) The Borrower shall pay to the Administrative Agent and the Arranger for their own accounts the fees in the amounts and
at the times set forth in the Fee Letter. 
  
 (b) The Borrower
agrees to pay (i) to the Administrative Agent, for the account of each Lender, a letter of credit fee with respect to its participation in the Letter of Credit, which shall accrue at 0.20% per annum on the average daily amount available to
be drawn under the Letter of Credit during the period from and including the Closing Date to but excluding the date on which the Letter of Credit expires, payable quarterly in arrears on the last day of each March, June, September and December,
commencing on December 31, 2005 and on the Commitment Termination Date, and (ii) to the Administrative Agent, for its own account, the Administrative Agent’s standard fees with respect to issuance, amendment, renewal or extension of
the Letter of Credit or processing of drawings thereunder, payable on demand (the fees described in clauses (i) and (ii) hereof, collectively, the “L/C Fees”). 
  
 (c) Notwithstanding the foregoing, while an Event of Default exists, at the option of the Required Lenders, the letter of
credit fee referred to in subsection (b)(i) above shall increase by an additional 2% per annum on the average daily amount available to be drawn under the Letter of Credit, and such fee shall be payable on demand. 
  
 Section 2.11. Computation of Interest and Fees.

  
 All computations of interest and fees hereunder shall be made
on the basis of a year of 360 days for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest or fees are payable (to the extent computed on the basis of days elapsed),
provided that interest payable hereunder that is based on the Base Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year) and paid for the actual number of days elapsed (including the first day but excluding the last
day). Each determination by the Administrative Agent of an interest amount or fee hereunder shall be made in good faith and, except for manifest error, shall be final, conclusive and binding for all purposes. 
  
 Section 2.12. Inability to Determine Interest Rates. If
prior to the commencement of any Interest Period for any Eurodollar Borrowing, 
  
 (i) the Administrative Agent shall have determined (which determination shall be conclusive and binding upon the Borrower) that, by reason
of circumstances affecting the relevant interbank market, adequate means do not exist for ascertaining LIBOR for such Interest Period, or 
  
 (ii) the Administrative Agent shall have received notice from the Required Lenders that the Adjusted LIBO Rate does not adequately and
fairly reflect the cost to such Lenders of making, funding or maintaining their Eurodollar Loans for such Interest Period, 
  
 the Administrative Agent shall give written notice (or telephonic notice, promptly confirmed in writing) to the Borrower and to the Lenders as soon as practicable
thereafter. In the case of 
  

 -23- 

 Eurodollar Loans, until the Administrative Agent shall notify the Borrower and the Lenders that the circumstances giving
rise to such notice no longer exist, (i) the obligations of the Lenders to make Eurodollar Loans or to continue or convert outstanding Loans as or into Eurodollar Loans shall be suspended and (ii) all such affected Loans shall be converted
into Base Rate Loans on the last day of the then current Interest Period applicable thereto unless the Borrower prepays such Loans in accordance with this Agreement. Unless the Borrower notifies the Administrative Agent at least one Business Day
before the date of any Eurodollar Borrowing for which a Notice of Borrowing has previously been given that it elects not to borrow on such date, then such Borrowing shall be made as a Base Rate Borrowing. 
  
 Section 2.13. Illegality. If any Change in Law shall make
it unlawful or impossible for any Lender to make, maintain or fund any Eurodollar Loan and such Lender shall so notify the Administrative Agent, the Administrative Agent shall promptly give notice thereof to the Borrower and the other Lenders,
whereupon until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such suspension no longer exist, the obligation of such Lender to make Eurodollar Loans, or to continue or convert outstanding Loans
as or into Eurodollar Loans, shall be suspended. In the case of the making of a Eurodollar Borrowing, such Lender’s Loan shall be made as a Base Rate Loan as part of the same Borrowing for the same Interest Period and if the affected Eurodollar
Loan is then outstanding, such Loan shall be converted to a Base Rate Loan either (i) on the last day of the then current Interest Period applicable to such Eurodollar Loan if such Lender may lawfully continue to maintain such Loan to such date
or (ii) immediately if such Lender shall determine that it may not lawfully continue to maintain such Eurodollar Loan to such date. Notwithstanding the foregoing, the affected Lender shall, prior to giving such notice to the Administrative
Agent, designate a different Applicable Lending Office if such designation would avoid the need for giving such notice and if such designation would not otherwise be disadvantageous to such Lender in the good faith exercise of its discretion.

  
 Section 2.14. Increased Costs. 

 
 (a) If any Change in Law shall: 
  
 (i) impose, modify or deem applicable any reserve, special
deposit or similar requirement that is not otherwise included in the determination of the Adjusted LIBO Rate hereunder against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement
reflected in the Adjusted LIBO Rate); or 
  
 (ii)
impose on any Lender or the eurodollar interbank market any other condition affecting this Agreement or any Eurodollar Loans made by such Lender; and the result of either of the foregoing is to increase the cost to such Lender of making, converting
into, continuing or maintaining a Eurodollar Loan or to reduce the amount received or receivable by such Lender hereunder (whether of principal, interest or any other amount), then the Borrower shall promptly pay, upon written notice from and demand
by such Lender on the Borrower (with a copy of such notice and demand to the Administrative Agent), to the Administrative Agent for the account of such Lender, within five Business Days after the date of such notice and demand, additional amount or
amounts sufficient to compensate such Lender for such additional costs incurred or reduction suffered. 
  

 -24- 

 (b) If any Lender shall have determined that on or after the date of this Agreement any Change in Law
regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s capital (or on the capital of such Lender’s parent corporation) as a consequence of its obligations hereunder to a level below that
which such Lender or such Lender’s parent corporation could have achieved but for such Change in Law (taking into consideration such Lender’s policies or the policies of such Lender’s parent corporation with respect to capital
adequacy) then, from time to time, within five (5) Business Days after receipt by the Borrower of written demand by such Lender (with a copy thereof to the Administrative Agent), the Borrower shall pay to such Lender such additional amounts as
will compensate such Lender or such Lender’s parent corporation for any such reduction suffered. 
  
 (c) A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or such Lender’s parent corporation, as the
case may be, specified in paragraph (a) or (b) of this Section 2.14 shall be delivered to the Borrower (with a copy to the Administrative Agent) and shall be conclusive, absent manifest error. The Borrower shall pay any such
Lender such amount or amounts within 10 days after receipt thereof. 
  
 (d) Failure or delay on the part of any Lender to demand compensation pursuant to this Section 2.14 shall not constitute a waiver of such Lender’s right to demand such compensation; provided, however, that the Borrower
shall not be required to compensate any Lender under this Section 2.14 for any amount which accrued more than 180 days prior to the date such Lender first made demand for such compensation. 
  
 Section 2.15. Funding Indemnity. In the event of
(a) the payment of any principal of a Eurodollar Loan other than on the last day of the Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion or continuation of a Eurodollar Loan other than
on the last day of the Interest Period applicable thereto, or (c) the failure by the Borrower to borrow, prepay, convert or continue any Eurodollar Loan on the date specified in any applicable notice (regardless of whether such notice is
withdrawn or revoked), then, in any such event, the Borrower shall compensate each Lender, within five (5) Business Days after written demand from such Lender, for any loss, cost or expense attributable to such event. In the case of a
Eurodollar Loan, such loss, cost or expense shall be deemed to include an amount determined by such Lender to be the excess, if any, of (A) the amount of interest that would have accrued on the principal amount of such Eurodollar Loan if such
event had not occurred at the Adjusted LIBO Rate applicable to such Eurodollar Loan for the period from the date of such event to the last day of the then current Interest Period therefor (or in the case of a failure to borrow, convert or continue,
for the period that would have been the Interest Period for such Eurodollar Loan) over (B) the amount of interest that would accrue on the principal amount of such Eurodollar Loan for the same period if the Adjusted LIBO Rate were set on the
date such Eurodollar Loan was prepaid or converted or the date on which the Borrower failed to borrow, convert or continue such Eurodollar Loan. A certificate as to any additional amount payable under this Section 2.15 submitted to the
Borrower by any Lender (with a copy to the Administrative Agent) shall be conclusive, absent manifest error. 
  

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 Section 2.16. Taxes. 
  
 (a) Any and all payments by or on account of any obligation of the Borrower hereunder shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; provided, that if the Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.16) the Administrative Agent or any Lender (as the case may be) shall receive an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law. 
  
 (b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law. 
  
 (c)
The Borrower shall indemnify the Administrative Agent and each Lender, within five (5) Business Days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent or such Lender, as
the case may be, on or with respect to any payment by or on account of any obligation of the Borrower hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this
Section 2.16) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender or by the Administrative Agent, on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error. 
  
 (d) As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting
such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent. 
  
 (e) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the Code or any treaty to which the United States is a
party, with respect to payments under this Agreement shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law, such properly completed and executed documentation prescribed by
applicable law or reasonably requested by the Borrower as will permit such payments to be made without withholding or at a reduced rate. Without limiting the generality of the foregoing, each Foreign Lender agrees that it will deliver to the
Administrative Agent and the Borrower (or in the case of a Participant, to the Lender from which the related participation shall have been purchased), as appropriate, two (2) duly completed copies of (i) Internal Revenue Service Form W-8
ECI, or any successor form thereto, certifying that the payments received from the Borrower hereunder are effectively connected with such Foreign Lender’s conduct of a trade or business in the United States; or (ii) Internal Revenue
Service Form W-8 BEN, or any successor form thereto, certifying that such Foreign Lender is entitled to benefits under an income tax treaty to which the United States is a party 
  

 -26- 

 which reduces the rate of withholding tax on payments of interest; or (iii) Internal Revenue Service Form W-8 BEN,
or any successor form prescribed by the Internal Revenue Service, together with a certificate (A) establishing that the payment to the Foreign Lender qualifies as “portfolio interest” exempt from U.S. withholding tax under Code
section 871(h) or 881(c), and (B) stating that (1) the Foreign Lender is not a bank for purposes of Code section 881(c)(3)(A), or the obligation of the Borrower hereunder is not, with respect to such Foreign Lender, a loan agreement
entered into in the ordinary course of its trade or business, within the meaning of that section; (2) the Foreign Lender is not a 10% shareholder of the Borrower within the meaning of Code section 871(h)(3) or 881(c)(3)(B); and (3) the
Foreign Lender is not a controlled foreign corporation that is related to the Borrower within the meaning of Code section 881(c)(3)(C); or (iv) such other Internal Revenue Service forms as may be applicable to the Foreign Lender, including
Forms W-8 IMY or W-8 EXP. Each such Foreign Lender shall deliver to the Borrower and the Administrative Agent such forms on or before the date that it becomes a party to this Agreement (or in the case of a Participant, on or before the date such
Participant purchases the related participation). In addition, each such Foreign Lender shall deliver such forms promptly upon the obsolescence or invalidity of any form previously delivered by such Foreign Lender. Each such Foreign Lender shall
promptly notify the Borrower and the Administrative Agent at any time that it determines that it is no longer in a position to provide any previously delivered certificate to the Borrower (or any other form of certification adopted by the Internal
Revenue Service for such purpose). 
  
 Section 2.17.
Payments Generally; Pro Rata Treatment; Sharing of Set-offs. 
  
 (a) The Borrower shall make each payment required to be made by it hereunder (whether of principal, reimbursement amounts, interest or fees, or of amounts payable under Sections 2.14, 2.15 or
2.16, or otherwise) prior to 12:00 noon (New York City time) on the date when due, in immediately available funds, free and clear of any defenses, rights of set-off, counterclaim, or withholding or deduction of taxes. Any amounts received
after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative
Agent at the Payment Office, except that payments pursuant to Sections 2.14, 2.15 and 2.16 and 10.3 shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments
received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be made payable for the period of such extension. All payments hereunder shall be made in Dollars. 
  
 (b) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, interest, fees or other amounts then due hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, towards payment of principal and such other amounts then due hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal and such other amounts then due to such parties. 
  

 -27- 

 (c) If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment
in respect of any principal of or interest on any of its Loans or Reimbursement Obligations that would result in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans or Reimbursement Obligations and accrued
interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans or Reimbursement Obligations of other Lenders to the extent
necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans or Reimbursement Obligations; provided, that
(i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or Reimbursement Obligations to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply).
The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation. 
  
 (d) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent
for the account of the Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders the amount or amounts due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to
such Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank compensation. 
  
 (e) If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.1(d) or 10.3(d), then the Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid. 
  
 Section 2.18. Mitigation of Obligations. If any Lender
requests compensation under Section 2.14, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.16, then such Lender shall
use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the sole judgment of such Lender,
such designation or assignment 
  

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 (i) would eliminate or reduce amounts payable under Section 2.14 or Section 2.16, as the case may
be, in the future and (ii) would not subject such Lender to any unreimbursed material cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all costs and expenses incurred by any Lender in
connection with such designation or assignment. 
  
 Section 2.19. Replacement of Lenders. If any Lender requests compensation under Section 2.14, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority of the
account of any Lender pursuant to Section 2.16, or if any Lender defaults in its obligation to make Reimbursement Payments hereunder, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions set forth in Section 10.4(b) all its interests, rights and obligations under this Agreement to an
assignee that shall assume such obligations (which assignee may be another Lender); provided, that (i) the Borrower shall have received the prior written consent of the Administrative Agent, which consent shall not be unreasonably
withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal amount of all Reimbursement Obligations and Loans owed to it, accrued interest thereon, accrued fees and all other amounts payable to it
hereunder, from the assignee (in the case of such outstanding principal and accrued interest) and from the Borrower (in the case of all other amounts) and (iii) in the case of a claim for compensation under Section 2.14 or payments
required to be made pursuant to Section 2.16, such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a
waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply. 
  
 ARTICLE III 
  
 COMMERCIAL PAPER OPERATIONS 
  
 Section 3.1. Issuance of CP Notes. (a) The Borrower has, pursuant to the Depositary Agreement, authorized and directed the Depositary to act as the Borrower’s issuing and paying agent for
the issuance, delivery and payment of CP Notes. 
  
 (b)
(i) So long as neither the Borrower nor the Depositary is in receipt of unrevoked instructions from the Administrative Agent (upon instructions from the Required Lenders), given in accordance with this Section 3.1 and the Depositary
Agreement or in accordance with Section 3.8, not to issue or deliver CP Notes because: 
  
 (A) the conditions precedent specified in Article IV have not been satisfied; 
  
 (B) an Event of Default has occurred and is continuing;

  
 (C) the Outstanding Extensions of Credit
exceed or, after giving effect to the proposed issuance of CP Notes, would exceed the sum of the Commitments as then in effect; or 
  
 (D) the issuance of CP Notes is prohibited by the provisions of Section 3.5, 3.6 or 3.8; 
  

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 the Borrower shall have the right from time to time to issue and sell CP Notes pursuant to and in accordance with this
Agreement and the Depositary Agreement. Any instructions from the Administrative Agent to the Borrower or the Depositary in accordance with this Section 3.1(b) shall specify the event described above that is the reason to cease issuing
and delivering CP Notes, and a copy of such instructions shall be sent simultaneously to the Administrative Agent, the Lenders, the Dealer, the Borrower and the Depositary. 
  
 (ii) If the Administrative Agent shall, as permitted by Section 3.1(b)(i) and the Depositary
Agreement, instruct the Borrower or the Depositary not to issue or deliver CP Notes, then the Borrower shall not thereafter, until such instructions are revoked, issue or deliver (or instruct the Depositary to issue or deliver) any CP Note, except
to the extent that such an issuance and delivery is required under such agreements for the sale of CP Notes, if any, as are concluded by the Dealer prior to the time the Dealer receives notice from the Administrative Agent, the Depositary or the
Borrower of the giving by the Administrative Agent of such instructions. At the same time as the Administrative Agent instructs the Borrower or the Depositary not to issue CP Notes pursuant to the immediately preceding sentence, the party giving
such instructions shall notify the Borrower and the Depositary in writing of such instructions to the extent such party has not previously done so. The Borrower shall not under any circumstances request the Dealer to purchase or to solicit offers to
purchase any CP Notes from the Borrower after having received such instructions. For purposes of this Section 3.1(b)(ii), an agreement with respect to the issuance and delivery of CP Notes shall be deemed concluded when it has become a
final agreement in accordance with the customary practice of commercial paper dealers in the United States. 
  
 (iii) The Administrative Agent (with the consent of the Required Lenders) may revise or revoke any instruction given by it pursuant to
this Section 3.1(b) to the Borrower and the Depositary not to issue or deliver CP Notes by notifying the Borrower and the Depositary by electronic means (including by telephone, facsimile transmission, if promptly confirmed by an
original in writing, or email, if promptly confirmed by response email), with a copy to the Lenders and the Dealer, of such revision or revocation, and any such instruction shall be revised or revoked by the Administrative Agent if the condition or
conditions giving rise to such instruction shall have been remedied or cured to the reasonable satisfaction of the Administrative Agent and the Required Lenders; provided, however, that the Administrative Agent, acting without the
consent of the Required Lenders, may revise or revoke any instructions given by it not to issue or deliver CP Notes due to clause (b)(i)(C) or (b)(i)(D) of this Section 3.1 so long as the condition giving rise to such instruction shall
have been remedied or cured to the reasonable satisfaction of the Administrative Agent. 
  
 (iv) Notwithstanding anything in this Agreement to the contrary, no notice pursuant to this Section 3.1(b) shall be required
to be sent to the Borrower or any other Person if an Event of Default specified in Section 8.1(e) shall have occurred. 
  

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 (c) The Borrower agrees that each CP Note shall (i) be in book-entry form in substantially the form
attached to the Letter of Representations (as defined in the Depositary Agreement) or in a form as otherwise permitted under the Depositary Agreement, (ii) be dated the date of issuance thereof (which shall be a Business Day), (iii) have a
stated date of maturity which shall be up to 270 days from the date of issuance (and in any event not beyond the Business Day before the Stated Termination Date), (iv) be issued in a denomination greater than or equal to $100,000 and
(v) be in a Face Amount which, when added to (X) the aggregate Face Amount of all other CP Notes to be issued on such Business Day and (Y) the aggregate Face Amount of all CP Notes outstanding on such Business Day (excluding any CP
Notes maturing on such Business Day), will not exceed an amount equal to the Maximum Commercial Paper Amount for such Business Day. In computing the Maximum Commercial Paper Amount for purposes of this Section 3.1(c), there shall not be
subtracted from the Commitments (1) unreimbursed L/C Payments on the day of such computation, (2) Reimbursement Obligations outstanding on the day of such computation or (3) Loans outstanding on the day of such computation if, in each
case, anticipated proceeds of CP Notes, to be issued on such day in an aggregate amount at least equal to such unreimbursed L/C Payments, Reimbursement Obligations and Loans are to be deposited in the Commercial Paper Account on the date of the
issuance of such CP Notes and are to be used to reimburse the Administrative Agent for such unreimbursed L/C Payments, to reimburse the Lenders for such Reimbursement Obligations and to prepay such Loans, as the case may be. Subject to the
provisions of the Depositary Agreement, all CP Notes shall be issued and delivered against payment therefor in accordance with the terms of this Agreement and the Depositary Agreement. All CP Notes will be issued on a discount basis. 
  
 Section 3.2. Payment Account. (a) To the extent the
funds in the Commercial Paper Account are not sufficient to pay or reimburse the Administrative Agent and the Lenders for the full amount of any Obligation on the date such Obligation becomes due and payable, and without limiting the obligations of
the Borrower under this Agreement to pay or reimburse the Administrative Agent and the Lenders for such Obligation, the Administrative Agent shall be entitled to debit the Payment Account (to the extent funds are on deposit therein) and apply such
debited amounts to reimburse the Administrative Agent and the Lenders for such Obligation. 
  
 (b) At any time when the collected credit balance of the Payment Account exceeds $5,000,000 the Administrative Agent shall upon request of the Borrower (unless an Event of Default has occurred and is continuing)
release the excess to the Borrower; provided, however, that the Administrative Agent shall not be required to release to the Borrower any proceeds of any drawing under the Purchase L/C or any payments received on account of the
principal amount of the Purchase Note. 
  
 (c) Without prejudice
to any of the rights and remedies of the Administrative Agent or any Lender under this Agreement, in the event that the Maker shall fail to pay when due any interest on the Purchase Note and such failure continues for more than five days, the
Borrower may, by written notice to the Administrative Agent, with copies to the Depositary and the Dealer, (i) direct the Administrative Agent to accelerate the obligations of the Maker under the Purchase Note, (ii) make a drawing under
the Purchase L/C in respect of the unpaid principal amount of the Purchase Note to the extent permitted by the terms thereof and by applicable law, and (iii) upon payment in full of the Secured Obligations to the Secured Parties under, and as

  

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 such terms are defined in, the Security Agreement and the satisfaction of the Administrative Agent that no CP Notes are
outstanding and that no further CP Notes may be issued, the Administrative Agent shall take the actions described in Section 2.5 as if the Commitment Termination Date had occurred. The Lenders authorize the Administrative Agent to act as
herein provided. 
  
 Section 3.3. Commercial Paper
Account. (a) (i) The Depositary, as agent for the Administrative Agent and the Lenders, has established at its corporate trust office in New York, New York a special purpose non-interest bearing trust account (for the benefit of
the Administrative Agent and the Lenders) identified as the NATC California Commercial Paper Account (the “Commercial Paper Account”). The Administrative Agent has exclusive control and the sole right of withdrawal over the
Commercial Paper Account. Except for the Administrative Agent, the Lenders and the Depositary, as agent for the Administrative Agent, no Person (including the Borrower) has or shall have any legal or beneficial interest in the Commercial Paper
Account or any funds on deposit in the Commercial Paper Account. 
  
 (ii) All proceeds from the sale of CP Notes shall initially be paid into the Commercial Paper Account. 
  
 (iii) Subject to Section 3.3(b), the Administrative Agent may, in each case, without demand or prior notice of any kind (but
with concurrent notice sent to the Borrower), at any time and from time to time, cause the Depositary to debit the Commercial Paper Account and apply the debited amount first to the amount of any unreimbursed L/C Payments and accrued and
unpaid interest thereon and second to any amount in respect of other Obligations due and unpaid hereunder by the Borrower (if there be sufficient funds therein) and to wire transfer such debit amount to the Administrative Agent. Upon the
occurrence of an Event of Default, the Administrative Agent shall, in each case, without demand or prior notice of any kind, cause the Depositary to debit the Commercial Paper Account for any amount in respect of fees, expenses or any other amounts
due and unpaid hereunder and to wire transfer such debit amount to the Administrative Agent. 
  
 (b) Subject to the provisions of Section 8.2, (i) the Administrative Agent will not accept any payment from the Commercial Paper Account in respect of any Obligation then owing to the Administrative
Agent and the Lenders prior to 1:30 p.m., New York City time, on the date such Obligation becomes due and payable, and (ii) the Administrative Agent will not request the Depositary to debit the Commercial Paper Account for any payment in
respect of any Obligation then owing to the Administrative Agent and the Lenders prior to 1:30 p.m., New York City time, on the date such Obligation becomes due and payable. 
  
 (c) The Borrower agrees that it will maintain, on each CP Maturity Date, in the Commercial Paper Account, immediately
available funds in an aggregate amount equal to not less than the aggregate Face Amount of all CP Notes maturing on such day; provided, that in determining the amount of immediately available funds in the Commercial Paper Account on any day
for purposes of this paragraph (c), there shall be included amounts on deposit in the Payment Account on such day and amounts payable at or before 5:00 p.m., New York City time, on account of the purchase price of CP Notes duly issued and delivered
on such day in accordance with the provisions of this Agreement and the Depositary Agreement and to be deposited in the Commercial Paper Account. 
  

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 Section 3.4. Letter of Credit Account. The Depositary has established at its corporate
trust office in New York, New York a special purpose non-interest bearing trust account identified as the NATC California Letter of Credit Account (the “Letter of Credit Account”). The Letter of Credit Account is in the name of the
Depositary, for the benefit of the holders of the CP Notes, and under the exclusive control of the Depositary. Except for the holders of the CP Notes and the Depositary, no Person shall have any legal or beneficial interest in the Letter of Credit
Account or any funds on deposit in the Letter of Credit Account. The funds in the Letter of Credit Account shall be subject to withdrawal solely by the Depositary, as paying agent in respect of the CP Notes, and solely for the purpose of paying
matured CP Notes in respect of which the Depositary has made a drawing under the Letter of Credit. All payments by the Administrative Agent under the Letter of Credit with respect to CP Notes shall be made directly to the Letter of Credit Account
and no funds in the Letter of Credit Account shall be commingled with monies from any other source. 
  
 The Depositary is required to record the date and time of receipt of each such deposit in the Letter of Credit Account and to keep accurate records of
each disbursement therefrom. The Administrative Agent agrees that all L/C Payments shall be made with the general funds of the Administrative Agent and that no L/C Payments shall in any way be contingent upon or drawn from amounts on deposit in the
Commercial Paper Account or the Payment Account or amounts on deposit in any account maintained by the Borrower with the Administrative Agent or from any other Property of the Borrower (including without limitation any Collateral). The
Administrative Agent further agrees that no CP Notes shall be paid except in the manner provided in the Depositary Agreement. 
  
 Section 3.5. Attachments. Anything herein to the contrary notwithstanding, if the Payment Account, the Commercial Paper Account or the
Letter of Credit Account or any funds on deposit in, or otherwise to the credit of, the Payment Account, the Commercial Paper Account or the Letter of Credit Account are subject to any writ, order, judgment, warrant of attachment, execution or
similar process or stay or other similar legal restraint, the Borrower shall not be permitted to issue or sell CP Notes so long as such writ, order, judgment, warrant of attachment, execution or similar process or stay or other legal restraint
remains in effect. 
  
 Section 3.6. Change in Law
Applicable to the Letter of Credit or CP Notes. In the event that any restrictions are determined to be applicable to, or are imposed upon, the Administrative Agent or the Borrower by any present or future law or regulation of any
Governmental Authority, including without limitation any legal lending limits imposed by any law or regulation of the United States or any State thereof, which, in the opinion of counsel to the Administrative Agent or any Lender, prohibits the
Administrative Agent from issuing or maintaining the Letter of Credit or would prohibit the issuance or the sale by the Borrower of CP Notes supported by the Letter of Credit, the Administrative Agent or the Borrower, as applicable, shall
promptly give notice thereof to the Administrative Agent (which in turn will give notice to the Lenders), the Dealer, the Depositary and the Borrower, and, upon the giving of such notice, the Borrower’s right to issue CP Notes supported by the
Letter of Credit shall terminate. 
  

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 Section 3.7. Effect on the Letter of Credit. Anything in this Agreement or any of the
other Loan Documents to the contrary notwithstanding, no termination or reduction of the Commitments pursuant to the terms of this Agreement or delivery of notice to cease issuing CP Notes pursuant to the terms of this Agreement, including without
limitation as a result of the provisions of Section 3.6, shall affect, terminate or reduce (a) the liability of the Administrative Agent under the Letter of Credit with respect to any CP Notes validly issued in accordance with the
terms and provisions of the Depositary Agreement or (b) the obligations hereunder of the Borrower with respect to any L/C Payment, any Reimbursement Obligation or any Loan. 
  
 Section 3.8. Cessation of Issuance. If (a) the Administrative Agent shall determine that a Market
Disruption Event referred to in clause (1) of the definition of such term has occurred or (b) the Borrower shall determine (based upon information provided by the Dealer) that a Market Disruption Event referred to in clause (2) or
(3) of the definition of such term has occurred, the Administrative Agent or the Borrower, as applicable, shall promptly give instructions (“Market Disruption Instructions”) to the Depositary to cease issuing and delivering CP
Notes (and the Administrative Agent or the Borrower, as applicable, shall promptly notify each other party to this Agreement and the Dealer of such action), and the Borrower will forthwith cease issuing CP Notes. 
  
 Section 3.9. Cessation of Market Disruption Event. If
Market Disruption Instructions are given pursuant to Section 3.8, and subsequently the Administrative Agent or the Borrower, as applicable, shall determine that the underlying Market Disruption Event has ceased (in the case of any such
determination by the Borrower, based on information provided by the Dealer), the Administrative Agent or the Borrower, as applicable, shall promptly provide notice of such cessation to each other party to this Agreement and the Dealer. Upon receipt
of such notice, the Depositary shall resume issuing and delivering CP Notes, subject to the terms and conditions of this Agreement and the Depositary Agreement. 
  

Section 3.10. Notice to Depositary. To enable the Depositary to determine the Maximum Commercial Paper Amount from time to time, the
Administrative Agent shall send to the Depositary a notice by facsimile or, failing that, by hand, in substantially the form of Exhibit G at the close of business each day on which (a) any L/C Payment has not been reimbursed by the
Borrower at or prior to 5:00 p.m., New York City time, on the day such L/C Payment was made, (b) Reimbursement Obligations have been converted to Loans hereunder, (c) the Administrative Agent has received monies in payment or prepayment of
outstanding Loans or unreimbursed L/C Payments or (d) the aggregate amount of the Commitments changes. 
  
 Section 3.11. Maximum Interest or Discount. Anything in this Agreement or the Depositary Agreement to the contrary notwithstanding, the
Borrower shall not issue any CP Notes if the discount from the sale price would be in excess of any maximum permitted by applicable law. 
  

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 ARTICLE IV 
  

CONDITIONS PRECEDENT TO EFFECTIVENESS OF AGREEMENT, ISSUANCE OF 
 LETTER OF CREDIT AND EXTENSIONS OF CREDIT 
  
 Section 4.1. Conditions To Effectiveness of Agreement and Issuance of Letter of Credit. The effectiveness of this Agreement and the
obligation of the Administrative Agent to issue the Letter of Credit shall be subject to the condition precedent that the Administrative Agent shall have received, on or prior to the Closing Date, the following documents, each of which shall be in
form and substance satisfactory to the Administrative Agent: 
  
 (a) Letter of Credit Facility Transaction: 
  
 (i) Agreement. Counterparts of this Agreement duly executed by the parties hereto. 
  
 (ii) Notes. A duly executed Note payable to the order
of each requesting Lender in the principal amount of such Lender’s Commitment. 
  
 (iii) Security Agreement. The Security Agreement, duly executed by the Borrower, together with (i) delivery of the Purchase
Note and the Purchase L/C, (ii) such evidence (including without limitation evidence of the filing of appropriate UCC-1 financing statements) as the Administrative Agent may require as to the perfection and first priority of the security
interest created by the Security Agreement in the Collateral, and (iii) an undated instrument of transfer in form and substance satisfactory to the Administrative Agent providing for the transfer of the Purchase Note to the Administrative Agent
(provided that no transfer of the Purchase Note shall be effected pursuant to such undated instrument of transfer except in accordance with Section 8 of the Security Agreement), a Notice of Transfer in the form of Annex A attached as Annex A to
the Purchase L/C, duly completed and executed by the Borrower and dated the date hereof, providing for the transfer of the Purchase L/C to the Administrative Agent, and evidence that the Purchase L/C has been validly and unconditionally transferred
by the Borrower to the Administrative Agent. 
  
 (iv) Parent Guarantee. The Parent Guarantee, duly executed and delivered by the Parent Guarantor. 
  
 (v) Payment Account. Evidence of the establishment of the Payment Account. 
  
 (vi) Organizational Documents, Resolutions and Incumbency
Certificates. Certified copies of the organizational documents and limited liability company agreement of the Borrower and the Parent Guarantor, certified resolutions of the Board of Managers of the Borrower and of the Board of Directors of the
Parent Guarantor authorizing the Transactions and a certificate of the secretary or assistant secretary of the Borrower and the Parent Guarantor certifying the name, title and true signature of each officer of such Loan Party executing the Loan
Documents to which it is a party. 
  

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 (vii) Good Standing Certificates. Certificates of good standing or existence, as
may be available from the Secretary of State of the jurisdiction of organization of the Borrower and the Parent Guarantor and each other jurisdiction where the Borrower is required to be qualified to do business as a foreign entity. 
  
 (viii) Opinions of Borrower’s Counsel. An
opinion or opinions of counsel to the Borrower and the Parent Guarantor acceptable to the Administrative Agent, dated the Closing Date, in substantially the form of Exhibit H and addressing the bankruptcy remoteness of the Borrower, addressed
to the Administrative Agent, the Lenders, the Depositary, the Dealer and the relevant rating agencies, or, with respect to the rating agencies, providing that copies thereof may be provided to and examined by them. 
  
 (ix) Consents and Approvals. Certified copies of all
consents, approvals, authorizations, registrations, or filings required to be made or obtained by the Borrower and the Parent Guarantor in connection with the Transactions, and such consents, approvals, authorizations, registrations, filings and
orders shall be in full force and effect and all applicable waiting periods shall have expired and no investigation or inquiry by any governmental authority regarding the Transactions shall be ongoing. 
  
 (x) Financial Information. The following financial
information: (a) the unaudited balance sheet of the Borrower for the fiscal year ended January 1, 2005, (b) the unaudited balance sheet of the Borrower for the fiscal quarter ended July 2, 2005, (c) the financial statements
of the Parent Guarantor for the fiscal years ended 2004, 2003, and 2002, including balance sheets, income and cash flow statements audited by independent public accountants of recognized national standing and prepared in conformity with GAAP,
(d) the financial statements of the Parent Guarantor for the fiscal quarters ended in 2005 for which financial statements have been prepared and are published or filed prior to the Closing Date, including balance sheets, income and cash flow
statements prepared in conformity with GAAP, and (e) such other financial information of the Borrower as the Administrative Agent shall reasonably request. 
  
 (xi) Certificate Regarding No Defaults and Representations and Warranties. A certificate, dated the
Closing Date and signed by a Responsible Officer of the Borrower and of the Parent Guarantor, certifying that after giving effect to the Transactions, (A) no Default or Event of Default exists on and as of the Closing Date and (B) the
representations and warranties of the Borrower contained herein and of the Parent Guarantor in the Parent Guarantee are true and correct on and as of the Closing Date. 
  
 (xii) Payment of Fees and Expenses. Evidence that the Borrower has paid all fees and expenses then
due and payable under this Agreement and the Fee Letter. 
  
 (xiii) Material Adverse Effect. Evidence satisfactory to the Administrative Agent that no event or development having a Material Adverse Effect shall have occurred since the date of the Borrower’s
formation other than the effect of the transactions contemplated under the Loan Documents or under the Existing Loan Documents. 
  

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 (b) Commercial Paper Program Transaction: 
  
 (i) Depositary Agreement. The Depositary Agreement,
duly executed by the Depositary, the Administrative Agent and the Borrower, together with evidence of establishment of the Commercial Paper Account and the Letter of Credit Account. 
  
 (ii) Dealer Agreement. The Dealer Agreement, duly executed by the Dealer and the Borrower.

  
 (iii) Payoff and Release Letters and
Repayment of Outstanding Commercial Paper. Copies of duly executed payoff and release letters, in form and substance satisfactory to Administrative Agent, executed by the Borrower, the Parent Guarantor, the Dealer and JPMorgan Chase Bank, N.A.,
in its capacities as the Administrative Agent and the Administrative Agent under the Existing Credit Agreement, and JPMorgan Chase Securities Inc. (as successor to Chase Securities Inc.), in its capacities as the Depositary and the Dealer under the
Existing Commercial Paper Program, evidencing (i) the termination of the Existing Credit Agreement and the other Existing Loan Documents (other than the Existing Hedging Agreement) and the payment and satisfaction in full of all Indebtedness
and other obligations of the Borrower and of the Parent Guarantor outstanding thereunder, and (ii) the termination of the Existing Commercial Paper Program and the payment and satisfaction in full of all commercial paper notes issued and
outstanding thereunder and all other obligations of the Borrower outstanding under or in connection with the Existing Commercial Paper Program; together with UCC-3 or other appropriate termination statements or releases, in form and substance
satisfactory to Administrative Agent, releasing all liens of the Administrative Agent under (and as defined in) the Existing Credit Agreement upon any of the Property of the Borrower. 
  
 (iv) Effectiveness of Commercial Paper Program. Evidence satisfactory to the Administrative Agent in
its sole discretion that all conditions to the effectiveness of the Commercial Paper Program have been satisfied. 
  
 (c) Purchase L/C Transaction: 
  
 (i) Issuance of Purchase L/C and Delivery of Certain Purchase Documents. Evidence that the Purchase L/C has been validly issued by
the Purchase L/C Bank and certified copies of the Pledge Agreement, the Reimbursement Agreement and the other documents required to be executed or delivered in accordance with the terms of the Reimbursement Agreement upon or prior to the issuance of
the Purchase L/C. 
  
 (ii) Pledged TD.
Evidence of the establishment of the Pledged TD. 
  
 (iii) Consents. The Consents, duly executed by the Maker and the Purchase L/C Bank, respectively. 
  
 (iv) Opinions as to Purchase Documents. Opinions of counsel to each of the Maker and the Purchase L/C Bank addressed to the
Administrative Agent and the Borrower, as to the legality, validity, binding effect and enforceability of the Pledge Agreement, the Reimbursement Agreement, the Purchase Note and the Purchase L/C and such other matters (including without limitation
the bankruptcy remoteness of the Maker) as the Administrative Agent may reasonably require. 
  

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 (d) Borrower Hedging Agreement. The Borrower Hedging Agreement, duly executed by
the Borrower. 
  
 (e) Existing Hedging
Agreement. Evidence satisfactory to the Administrative Agent that the Existing Hedging Agreement remains in full force and effect on the Closing Date and a letter agreement executed by the Borrower and JPMorgan Chase Bank, N.A. (as successor to
The Chase Manhattan Bank) in favor of the Administrative Agent pursuant to which the Borrower irrevocably authorizes and directs JPMorgan Chase Bank, N.A., and JPMorgan Chase Bank, N.A. agrees, to remit all payments due and payable from time to time
to the Borrower under the Existing Hedging Agreement to the Payment Account. 
  
 (f) Other Loan Documents. The Administrative Agent, the Dealer and the Depositary shall have received such other documents, certificates or information as the Administrative Agent, the Required Lenders, the
Dealer or the Depositary may reasonably request, all in form and substance reasonably satisfactory to the requesting Person or Persons. 
  
 Section 4.2. Conditions to Issuance of Letter of Credit and each Conversion. The obligation of the Administrative Agent to issue the
Letter of Credit and any conversion of Reimbursement Obligations to Loans shall be subject to the following conditions precedent: 
  
 (a) Representations and Warranties. The representations and warranties of the Borrower contained herein and of the Parent Guarantor in the Parent
Guarantee shall be true and correct on and as of the date of each such event with the same effect as if made on and as of such date. 
  
 (b) No Default. No Default or Event of Default shall have occurred and be continuing on the date of such event or shall come into existence as a
result thereof or the use of the proceeds thereof. 
  
 (c)
Change of Conditions. No introduction of nor any change in the interpretation of any law or regulation shall have occurred that would make it unlawful for the Lenders or the Administrative Agent to perform their obligations under this
Agreement. 
  
 (d) Depositary Instructions. The Borrower
shall have (i) not revoked or in any way modified the instructions to establish the accounts as set forth in Sections 1(a) and 1(c) of the Depositary Agreement or (ii) received a notice of the kind referred to in the last sentence of
Section 1(b) of the Depositary Agreement. 
  
 (e)
Commitments. After giving effect to (i) each issuance of CP Notes and each conversion of Reimbursement Obligations to Loans and each unreimbursed L/C Payment on such day, and (ii) the prepayment or repayment of any L/C Payments,
Loans, Reimbursement Obligations and CP Notes on such day, the aggregate Outstanding Extensions of Credit shall not exceed the sum of the Commitments in effect on such day. 
  

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 The issuance of the Letter of Credit and each conversion of Reimbursement Obligations hereunder shall
constitute a representation by the Borrower that the foregoing conditions have been satisfied on and as of the date of such event. 
  
 Section 4.3. Conditions to each Issuance of CP Notes. The right of the Borrower to issue CP Notes shall be subject to the following
conditions precedent: 
  
 (a) Representations and
Warranties. The representations and warranties of the Borrower contained herein and of the Parent Guarantor in the Parent Guarantee shall be true and correct on and as of the date of each such event with the same effect as if made on and as of
such date. 
  
 (b) No Default. No Default or Event of
Default shall have occurred and be continuing on the date of such event or shall come into existence as a result thereof or the use of the proceeds thereof. 
  
 (c) Change of Conditions. No introduction of nor any change in the interpretation of any law or regulation shall have occurred that would make it
unlawful for the Lenders or the Administrative Agent to perform their obligations under this Agreement. 
  
 (d) Depositary Instructions. The Borrower shall have (i) not revoked or in any way modified the instructions to establish the accounts as set
forth in Sections 1(a) and 1(c) of the Depositary Agreement or (ii) received a notice of the kind referred to in the last sentence of Section 1(b) of the Depositary Agreement. 
  
 (e) Depositary. No default in the performance or observance of any
term, covenant or condition on the part of the Depositary to be performed or observed hereunder or under the Depositary Agreement shall have occurred and be continuing or would come into existence as a result of such issuance. 
  
 (f) Offering Memorandum. The Administrative Agent shall have received
a copy acceptable to it of each offering memorandum to be used by the Dealer in connection with the offer and sale of CP Notes. 
  
 (g) Commitments. After giving effect to (i) each issuance of CP Notes and each conversion of Reimbursement Obligations to Loans and each
unreimbursed L/C Payment on such day, and (ii) the prepayment or repayment of any L/C Payments, Loans, Reimbursement Obligations and CP Notes on such day, the aggregate Outstanding Extensions of Credit shall not exceed the sum of the
Commitments in effect on such day. 
  
 Each issuance of CP Notes
shall constitute a representation by the Borrower that the foregoing conditions have been satisfied on and as of the date of such event. 
  
 Section 4.4. Delivery of Documents. All of the Loan Documents, certificates, legal opinions and other documents and papers referred to
in this Article IV, unless otherwise specified, shall be delivered to the Administrative Agent for the account of each of the Lenders and, except for the Notes, in sufficient counterparts or copies for each of the Lenders and shall be in form
and substance satisfactory in all respects to the Administrative Agent. 
  

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 ARTICLE V 
  

REPRESENTATIONS AND WARRANTIES 
  
 In order to induce the Lenders and the Administrative Agent to enter into this Agreement and to induce the Lenders and the Administrative Agent to make
the Extensions of Credit provided for herein, the Borrower makes the following representations and warranties to the Lenders and the Administrative Agent, all of which shall survive the execution and delivery of this Agreement: 
  
 Section 5.1. Organization; Powers. The Borrower is a
single member limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware, has all requisite power and authority to carry on its business as now conducted and is qualified to do business
in, and is in good standing in, every jurisdiction where such qualification is required. The Borrower will be disregarded for Federal income tax purposes. 
  
 Section 5.2. Authorization; Enforceability. 
  

(a) The making and performance by the Borrower of the Loan Documents to which it is a party, the issuance of CP Notes and the other Transactions are
within the Borrower’s limited liability company powers and have been duly authorized by all necessary limited liability company action on the part of the Borrower. 
  
 (b) Each of the Loan Documents to which the Borrower is a party has been duly executed and delivered by the Borrower and
constitutes, and each CP Note and each Note when duly executed and delivered in accordance herewith will constitute, a legal, valid and binding obligation of the Borrower, enforceable in accordance with its terms, except as such enforceability may
be limited by (i) bankruptcy, insolvency, reorganization, moratorium or similar laws of general applicability affecting the enforcement of creditors’ rights and (ii) the application of general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law). 
  
 Section 5.3. Governmental Approvals; No Conflicts. The Transactions (a) do not require any consent or approval of, registration or filing with, or other action by, any Governmental Authority,
except such as have been obtained or made and are in full force and effect, (b) will not violate any Requirements of Law applicable to the Borrower or any judgment, order or ruling of any Governmental Authority, (c) will not violate or
result in a default under any agreement or instrument binding upon the Borrower or any of its Property, or give rise to a right thereunder to require any payment to be made by the Borrower, and (d) other than the Lien created by the Security
Agreement, will not result in the creation or imposition of any Lien on any Property of the Borrower. 
  
 Section 5.4. Investment and Holding Company Status. The Borrower is not (a) an “investment company” or
“controlled” by an “investment company”, as such terms are defined in, or subject to regulation under, the Investment Company Act of 1940, as amended, or (b) a “holding company” as defined in, or subject to
regulation under, the Public Utility Holding Company Act of 1935, as amended. 
  

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 Section 5.5. Margin Regulations. None of the proceeds of the Letter of Credit, the
Loans or the CP Notes will be used, directly or indirectly, for “purchasing” or “carrying” any “margin stock” with the respective meanings of each of such terms under Regulation U of the Board of Governors of the
Federal Reserve System as now and from time to time hereafter in effect or for any purpose that violates the provisions of the Regulation U. The Borrower is not engaged principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying “margin stock.” 
  
 Section 5.6. No Material Adverse Effect. No Material Adverse Effect has occurred since the date of formation of the Borrower other than the effect of the transactions contemplated under the Loan
Documents or under the Existing Loan Documents. 
  
 Section 5.7. Properties. The Borrower has good and indefeasible title to, or valid leasehold interests in, all its Property material to its business, subject only to the Lien created by the Security Agreement, and except
for minor defects in title that do not interfere with its ability to conduct its business as currently conducted. All leases that individually or in the aggregate are material to the business or operations of the Borrower are valid and subsisting
and are in full force. 
  
 Section 5.8.
Litigation. There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority now pending against or, to the knowledge of the Borrower, threatened against or affecting the Borrower (i) as to which there
is a reasonable possibility of an adverse determination and that, if adversely determined, would reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect or (ii) that involve this Agreement, any other
Loan Document or the Transactions. 
  
 Section 5.9.
Compliance with Laws and Agreements. The Borrower is in compliance with all Requirements of Law and all judgments, decrees and orders of any Governmental Authority applicable to it or its Property and all indentures, agreements and other
instruments binding upon it or its Property, except where the failure to comply, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect. No Default has occurred and is continuing. 
  
 Section 5.10. Taxes. The Borrower has timely filed or
caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for
which the Borrower has set aside on its books adequate reserves or (b) to the extent that the failure to do so would not reasonably be expected to result in a Material Adverse Effect. 
  
 Section 5.11. Subsidiaries; Investments; Indebtedness.

  
 (a) Subsidiaries. As of the Closing Date, the Borrower
has no Subsidiaries. 
  

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 (b) Investments. As of the Closing Date, the Borrower has no Investments other than Permitted
Investments. 
  
 (c) Indebtedness. As of the Closing Date,
the Borrower has no Indebtedness other than Indebtedness created hereunder, under the CP Notes, under the Borrower Hedging Agreement and under the Existing Hedging Agreement. 
  
 Section 5.12. Financial Statements. The Borrower has furnished to each Bank (i) the unaudited
balance sheets of the Borrower as of July 1, 2005; (ii) the audited consolidated balance sheets of the Parent Guarantor as of December 28, 2002, January 3, 2004 and January 1, 2005, and the related consolidated
statements of income, shareholders’ equity and cash flows for the fiscal years then ended, accompanied by an opinion of the Parent Guarantor’s independent public accountants to the effect that such financial statements present fairly in
all material respects the consolidated financial condition and results of operations of the Parent Guarantor in accordance with GAAP consistently applied; and (iii) the unaudited consolidated balance sheet of the Parent Guarantor as of
June 30, 2005, and the related unaudited consolidated statements of income and changes in financial position or the fiscal quarter and year-to-date period then ending, accompanied by a certificate of a senior financial officer of the Parent
Guarantor to the effect that such financial statements fairly present in all material respects the financial condition and results of operations of the Parent Guarantor in accordance with GAAP consistently applied, subject to normal year-end audit
adjustments. 
  
 Section 5.13. Insolvency.
After giving effect to the Transactions, the Borrower will be “solvent”; and for purposes hereof, the term “solvent” shall mean that (a) the fair value of the Property of the Borrower is greater than the total amount of its
liabilities (including contingent liabilities), (b) the present fair saleable value of its Property is not less than the amount that will be required to pay the probable liability on its debts as they become absolute and matured, (c) the
Borrower does not intend to, and does not believe that it will, incur debts or liabilities beyond its ability to pay as such debts and liabilities mature, and (d) the Borrower is not engaged in a business for which the Borrower’s Property
would constitute an unreasonably small capital. 
  
 Section 5.14. Activities. Since the date of formation of the Borrower, the Borrower has taken all steps required by its certificate of formation and limited liability company agreement to continue the Borrower’s
identity as a separate legal entity and to make it apparent to other Persons that the Borrower is an entity with assets and liabilities distinct from those of any other Person. Without limiting the generality of the foregoing, since the date of
formation of the Borrower, the Borrower has (i) been a limited purpose company whose activities have been restricted in its certificate of incorporation and by-laws to those activities permitted by Section 8.12 of the Existing Credit
Agreement or by Section 7.12 hereof, (ii) maintained books, records, accounts, assets and financial statements separate from any other Person and otherwise held itself out as an entity separate from any other Person (and corrected
any known misunderstanding regarding such separate identity) and not (a) identified itself as a division of any other Person or (b) commingled its funds with any funds of any other Person, (iii) conducted its own business and hold all
of its assets in its own name, (iv) paid its own employees (if any) and liabilities out of its own funds, (v) observed all formalities required by its certificate of formation and limited liability company agreement, (vi) allocated
fairly and reasonably overhead for any shared office space, (vii) maintained adequate capital, to the extent necessary in the light of its business operations and (viii) been treated as a disregarded entity for tax purposes. 
  

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 Section 5.15. OFAC and Patriot Act. Neither the issuance of the Letter of Credit nor
the use of the proceeds of any of the Loans, will violate the Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as
amended) or the Anti-Terrorism Order (Executive Order No. 13,224, 66 Fed. Reg. 49,079 (2001), issued by the President of the United States of America (Executive Order Blocking Property and Prohibiting Transactions With Persons Who Commit,
Threaten to Commit, or Support Terrorism), or any enabling legislation or executive order relating to any of the same. Without limiting the generality of the foregoing, the Borrower: (a) is not and will not become a blocked person described in
Section 1 of Anti-Terrorism Order; and (b) does not knowingly or will knowingly engage in any dealings or transactions or be otherwise knowingly associated with any such blocked person. The Borrower is in compliance, in all material
respects, with the Uniting And Strengthening America By Providing Appropriate Tools Required To Intercept And Obstruct Terrorism Act (USA Patriot Act of 2001). 
  

ARTICLE VI 
  
 AFFIRMATIVE COVENANTS 
  
 The Borrower covenants and agrees that so long as this Agreement is in effect and until all of the Obligations are paid in full, the Letter of Credit expires or is terminated and the Commitments are terminated, the
Borrower shall: 
  
 Section 6.1. Financial Statements
and Other Information. The Borrower will furnish to the Administrative Agent (with sufficient copies for each Lender): 
  
 (a) within 90 days after the end of each fiscal year of the Parent Guarantor, the audited balance sheet and related statements of operations,
stockholders’ equity and cash flows of the Parent Guarantor as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, and accompanied by an opinion of independent public
accountants satisfactory to the Administrative Agent to the effect that such financial statements present fairly in all material respects the consolidated financial condition and results of operations of the Parent Guarantor in accordance with GAAP
consistently applied; 
  
 (b) within 45 days after the end of each
of the first three fiscal quarters of each fiscal year of the Parent Guarantor, the audited consolidated balance sheet and related consolidated statements of income and changes in financial position of the Parent Guarantor, as of the end of and for
such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for (or, in the case of the balance sheet, as of the end of) the corresponding period or periods of the previous fiscal
year, all certified by a senior financial officer of the Parent Guarantor to the effect that such financial statements fairly present in all material respects the financial condition and results of operations of the Parent Guarantor in accordance
with GAAP consistently applied, subject to normal year-end audit adjustments; 
  

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 (c) concurrently with any delivery of financial statements under clause (a) or (b) of this
Section, a certificate of a senior financial officer of the Borrower certifying as to whether a Default has occurred and is continuing and, if a Default has occurred and is continuing, specifying the details thereof and any action taken or proposed
to be taken with respect thereto and setting forth reasonably detailed calculations demonstrating compliance with Section 6.12; 
  
 (d) promptly following the Borrower’s receipt thereof, any and all notices and other communications under or in connection with the Purchase Note or
the Purchase L/C and of any Event of Default under the Purchase Note; and 
  
 (e) promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Borrower, or compliance with the terms of this Agreement and the other Loan
Documents and Purchase Documents, as the Administrative Agent or any Lender may reasonably request. 
  
 Promptly after receipt of documents specified in this Section 6.1, the Administrative Agent shall forward such documents to the Lenders (or,
in the case of clause (e) above, to the applicable Lenders). 
  
 Section 6.2. Notices of Material Events. The Borrower will furnish to the Administrative Agent prompt written notice (and in any event within five Business Days after the Borrower acquires knowledge thereof) of the
following: 
  
 (a) the occurrence of any Default or Event of
Default; 
  
 (b) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority against or affecting the Borrower that, if adversely determined, would reasonably be expected to result in a Material Adverse Effect; and 
  
 (c) any other development that results in, or would reasonably be expected to
result in, a Material Adverse Effect. 
  
 Each notice delivered under clauses (a),
(b) or (c) of this Section shall be accompanied by a statement of a senior financial officer or other executive officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or
proposed to be taken with respect thereto. In addition, the Borrower shall furnish to each of S&P and Moody’s, promptly upon obtaining knowledge thereof, written notice of any downgrade by S&P or Moody’s of the ratings by S&P
or Moody’s for the short-term obligations of the Administrative Agent. 
  
 Section 6.3. Existence; Conduct of Business. The Borrower will do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights,
licenses, permits, privileges and franchises material to the conduct of its business. 
  
 Section 6.4. Compliance with Laws. The Borrower will comply with all laws, rules, regulations and orders of any Governmental Authority applicable to it or its Property, except where the failure to
do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect. 
  

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 Section 6.5. Payment of Obligations. The Borrower will pay its obligations, including
Tax liabilities before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) the Borrower has set aside on its books adequate
reserves with respect thereto in accordance with GAAP and (c) the failure to make payment pending such contest would not reasonably be expected to result in a Material Adverse Effect. 
  
 Section 6.6. Books and Records; Inspection Rights. The
Borrower will keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities. The Borrower will permit any representatives designated by the
Administrative Agent or any Lender, upon reasonable prior notice, to visit and inspect its Properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times and as often as reasonably requested; provided, however, if an Event of Default has occurred and is continuing, no prior notice shall be required. 
  
 Section 6.7. Maintenance of Properties; Insurance. The
Borrower will keep and maintain all Property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted, except where the failure to maintain such Property would not reasonably be expected to result
in a Material Adverse Effect. 
  
 Section 6.8. Use of
Proceeds. The Borrower will use the proceeds of the initial issuance of CP Notes solely to reimburse JPMorgan Chase Bank, N.A. for a drawing under the Letter of Credit (as defined in the Existing Credit Agreement), the proceeds of which
drawing shall have been applied to repay in full all commercial paper of the Borrower outstanding under the Existing Commercial Paper Program on the Closing Date. The Borrower will use the proceeds of all subsequent issuances of CP Notes solely to
reimburse the Administrative Agent for L/C Payments and to pay other Obligations. 
  
 Section 6.9. Performance of Principal Agreements. The Borrower will maintain each Purchase Document in full force and effect and not grant any waiver thereunder unless so instructed by the
Administrative Agent, enforce each Purchase Document in accordance with its terms, and take all action as may be from time to time reasonably requested by the Administrative Agent or the Required Lenders (through the Administrative Agent) to request
and obtain information and reports required to be provided by each other party to each Purchase Document. 
  
 Section 6.10. Activities. The Borrower will take all steps required by its certificate of formation and limited liability company
agreement and this Agreement or reasonably required by the Administrative Agent to continue the Borrower’s identity as a separate legal entity and to make it apparent to other Persons that the Borrower is an entity with assets and liabilities
distinct from those of any other Person. Without limiting the generality of the foregoing and the other provisions of this Agreement or any other Loan Document, the Borrower will (i) be a limited purpose company whose activities are restricted
in its certificate of 
  

 -45- 

 incorporation and by-laws to those activities permitted by Section 7.12, (ii) maintain books, records,
accounts, assets and financial statements separate from any other Person and otherwise hold itself out as an entity separate from any other Person (and correct any known misunderstanding regarding such separate identity) and not (a) identify
itself as a division of any other Person or (b) commingle its funds with any funds of any other Person, (iii) conduct its own business and hold all of its assets in its own name, (iv) pay its own employees (if any) and liabilities out
of its own funds, (v) observe all formalities required by its certificate of formation and limited liability company agreement, (vi) allocate fairly and reasonably overhead for any shared office space, and (vii) maintain adequate
capital, to the extent necessary in the light of its business operations. The Borrower will be treated as a disregarded entity for tax purposes. 
  
 Section 6.11. Further Assurances. (a) The Borrower will: 
  
 (i) Execute any and all further documents, financing statements, agreements and instruments, and take all
further action (including without limitation filing Uniform Commercial Code and other financing statements) that the Required Lenders or the Administrative Agent may reasonably request in order to effectuate the Transactions and in order to grant,
preserve, protect and perfect the validity and first priority of the security interests created or intended to be created by the Security Agreement. 
  
 (ii) Take such action from time to time as shall be necessary to ensure that the Collateral is subject to a valid first and prior
perfected security interest pursuant to the Security Agreement. 
  
 (iii) Promptly take all such actions as the Administrative Agent may reasonably direct to exercise its rights under the Reimbursement Agreement. 
  
 (iv) If, for any reason, the long-term debt of the Purchase L/C Bank ceases to be rated at least
“A” by S&P or ceases to be rated at least “A2” by Moody’s, the following provisions shall apply: The Borrower shall have a period of 60 days to propose to the Administrative Agent one or more alternative Purchase L/C
Bank(s) to replace the existing Purchase L/C Bank, such alternative institution(s) to have a long-term debt rating of at least “A” by S&P and “A2” by Moody’s. The Administrative Agent shall promptly advise the Lenders of
each such alternative proposed by the Borrower. The Lenders agree to consider each such alternative institution with reasonable promptness and to advise the Administrative Agent whether such alternative institution is acceptable to it; provided that
rejection by a Lender of any such alternative shall be based on reasonable grounds, such as internal credit limits of such Lender. If during such 60-day period the Required Lenders and the Borrower agree upon one of the alternatives proposed by the
Borrower, the Administrative Agent shall promptly so notify the Borrower and the Borrower shall promptly take all such steps as are required pursuant to the Purchase Note to replace the Purchase L/C Bank with such alternative institution. If during
such 60-day period the Required Lenders have not accepted any of the alternative institutions proposed by the Borrower, the Required Lenders shall, through the Administrative Agent, specify to the Borrower a replacement Purchase L/C Bank, and the
Borrower shall promptly take all such steps as are required pursuant to the Purchase Note to replace the Purchase L/C Bank with such alternative institution; provided, that in selecting such 
  

 -46- 

 replacement Purchase L/C Bank, the Lenders agree that they will use reasonable efforts to assure that the
fees and other costs to be charged by such replacement Purchase L/C Bank for its services as Purchase L/C Bank are reasonably consistent with the market for such services at the time. 
  
 (b) If the Borrower fails to take any action that it is instructed to take pursuant to this Section 6.11 after
five Business Days’ written notice, the Administrative Agent is irrevocably authorized to take such action on behalf of the Borrower, which authorization is irrevocable and coupled with an interest. 
  
 Section 6.12. Fixed Charges Coverage Ratio. The Borrower
will cause the Fixed Charges Coverage Ratio for each Payment Period to be at all times at least 1.0 to 1.0. 
  
 Section 6.13. Additional Information. The Borrower will promptly provide the Dealer with such updated information as may be necessary
to ensure that any offering memorandum used in connection with the offer and sale of CP Notes (when taken together with such updated information) does not contain an untrue statement of a material fact or omit a material fact necessary in order to
make the statements made therein, in the light of the circumstances under which they were made, not misleading. 
  
 Section 6.14. Other Obligations. The Borrower will comply with all of its obligations under the Depositary Agreement and the Dealer
Agreement, ensure that no amendment will be made thereto without the consent of the Administrative Agent and ensure that there is at all times an issuing agent and a paying agent for the CP Notes in New York, New York. 
  
 Section 6.15. Securities Act. The Borrower will sell and
offer to sell CP Notes only in compliance with the registration provisions of the Securities Act of 1933, as amended, or pursuant to an exemption under Section 3 or Section 4 thereof, and in compliance with the registration or
qualification provisions of the securities laws of any state or foreign country having jurisdiction. 
  
 Section 6.16. Solvency. After giving effect to the issuance of CP Notes and the use of proceeds thereof, the Borrower will be
“solvent”; and for purposes hereof, the term “solvent” shall mean that (a) the fair value of the Property of the Borrower is greater than the total amount of its liabilities (including contingent liabilities), (b) the
present fair saleable value of its Property is not less than the amount that will be required to pay the probable liability on its debts as they become absolute and matured, (c) the Borrower does not intend to, and does not believe that it
will, incur debts or liabilities beyond its ability to pay as such debts and liabilities mature, and (d) the Borrower is not engaged in a business for which the Borrower’s Property would constitute an unreasonably small capital.

  
 Section 6.17. Hedging Transactions. The
Borrower will maintain the Existing Hedging Agreement and the Borrower Hedging Agreement in full force and effect at all times during their respective terms. The Borrower will not amend, modify or supplement the Existing Hedging Agreement without
the prior written consent of the Administrative Agent. 
  

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 ARTICLE VII 
  
 NEGATIVE COVENANTS 
  
 The Borrower covenants and agrees that so long as this Agreement is in effect and until all of the Obligations are paid in full, the Letter of Credit
expires or is terminated and the Commitments are terminated, the Borrower shall: 
  
 Section 7.1. Offering Memorandum. The Borrower will not include any information relating to the Administrative Agent, the Arranger, the Dealer, any Lender or the facilities provided for herein in
any offering memorandum used in the offering or sale of CP Notes unless such information is approved in writing by the Administrative Agent, the Arranger, the Dealer, or such Lender, as the case may be, prior to its inclusion in such offering
memorandum. 
  
 Section 7.2. Amendment of
Documents. The Borrower will not consent to, agree to, or otherwise acquiesce in, the amendment or modification of or any waiver under any Purchase Document or terminate the Purchase L/C without the prior written consent of the
Administrative Agent acting on behalf of the Lenders, provided, that nothing herein shall be deemed to prevent the Borrower from exercising its rights under the Purchase Note to (i) divide the Purchase Note into notes of smaller denominations
and obtain replacement notes pursuant to the terms thereof and (ii) to cause the Purchase L/C Bank to issue multiple Purchase L/Cs in the aggregate face amount of such replacement notes. The Administrative Agent shall comply with
Section 9.9 in connection with any such division. 
  
 Section 7.3. Concerning the CP Notes. The Borrower will not permit any CP Note to have a stated date of maturity more than 270 days after its date of issuance, or to mature on a date after the Business Day before the
Stated Termination Date. 
  
 Section 7.4.
Indebtedness. The Borrower will not create, incur, assume or permit to exist any Indebtedness, except Indebtedness hereunder, under the CP Notes and under the Borrower Hedging Agreement, and except any refinancing of the full amount of
the Obligations hereunder. 
  
 Section 7.5.
Liens. The Borrower will not create, incur, assume or permit to exist any Lien on any Property now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any
thereof, except the Liens created by the Security Agreement, and except for taxes, assessments and other governmental charges which are not yet due and payable or which are being contested in good faith by appropriate proceedings and for which
adequate reserves have been established. 
  
 Section 7.6.
Prohibition on Fundamental Changes. (a) The Borrower will not enter into any transaction of merger or consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution). 
  
 (b) The Borrower will not acquire any business or Property from, or capital
stock of, or be a party to any acquisition of, any Person except for purchases of Property necessary to the conduct of the activities permitted by Section 7.12 hereof, provided, that nothing in this clause (b) shall be deemed
to prevent the Borrower from receiving capital contributions. 
  

 -48- 

 (c) The Borrower will not convey, sell, lease, transfer or otherwise dispose of, in one transaction or a
series of transactions, any part of its business or Property, whether now owned or hereafter acquired. 
  
 (d) The Borrower will not amend or modify, or permit the amendment or modification of, its certificate of formation or limited liability company agreement
or engage in any business other than as expressly permitted by Section 7.12 hereof. 
  
 (e) The Borrower will not create, acquire or otherwise own any Subsidiary. 
  
 (f) The Borrower will not take any action to effect replacement of the Purchase L/C Bank except as provided in
Section 6.11(a)(iv), and will not take any action to draw on the Purchase L/C except as expressly instructed by, or with the prior written consent of, the Administrative Agent. 
  
 Section 7.7. Investments. The Borrower will not make or
permit to remain outstanding any Investments except Permitted Investments. 
  
 Section 7.8. Distributions. The Borrower will not declare or make, or agree to pay or make, directly or indirectly, any dividend payment in respect of its membership interests, or any other
distribution in respect thereof, or redeem or repurchase any thereof. 
  
 Section 7.9. Transactions with Affiliates. The Borrower will not sell, lease or otherwise transfer any Property to, or purchase, lease or otherwise acquire any Property from, or otherwise engage in any other transactions
with, any of its Affiliates, except the Transactions and except for the sharing of office space in the ordinary course of business. 
  
 Section 7.10. Capital Expenditures. The Borrower will not make any capital expenditures. 
  
 Section 7.11. Sale and Lease-Back Transactions. The
Borrower will not enter into any arrangement, directly or indirectly, with any Person whereby it shall sell or transfer any Property, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such Property
or other Property which it intends to use for substantially the same purpose or purposes as the Property being sold or transferred. 
  
 Section 7.12. Business Activities. The Borrower will not engage in any business activities other than (a) making, owning,
controlling and disposing of Permitted Investments (including without limitation any investment earnings thereon), (b) holding, maintaining and managing the Collateral pursuant to the terms and conditions set forth in the Security Agreement,
(c) issuing CP Notes and complying with its obligations under the Loan Documents and (d) activities directly incidental to any of the foregoing. 
  
 Section 7.13. Bankruptcy. The Borrower will not, without the approval of each of its managers, (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or other similar relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect; (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or petition seeking (a) liquidation, 
  

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 reorganization or other similar relief in respect of the Borrower or its debts, or of a substantial part of its assets,
under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (b) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or for a
substantial part of its assets; (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or for a substantial part of its assets; (iv) file an answer
admitting the material allegations of a petition filed against it in any such proceeding; (v) make a general assignment for the benefit of creditors; or (vi) take any action for the purpose of effecting any of the foregoing. 
  
 Section 7.14. Separate Credit. The Borrower will not hold
out its credit as being available to satisfy the obligations of any other Person. 
  
 Section 7.15. Use of Proceeds. The Borrower will not use any of the proceeds of the Letter of Credit, the Loans or the CP Notes for the purpose, whether immediate, incidental or ultimate, of buying
or carrying margin stock within the meaning of Regulations T, U or X of the Board of Governors of the Federal Reserve System or to extend credit to others for any such purpose and will not engage in, or maintain as one of its important activities,
the business of extending credit for the purpose of purchasing or carrying any such margin stock. 
  
 Section 7.16. Accounting Changes. The Borrower will not change its fiscal year. 
  
 ARTICLE VIII 
  
 EVENTS OF DEFAULT 
  
 Section 8.1. Events of Default. The following specified
events shall be “Events of Default” for all purposes of this Agreement: 
  
 (a) the Borrower shall fail to pay when due any amount owing to the Administrative Agent under this Agreement (including, without limitation, any unreimbursed L/C Payment), or any principal amount owing to any Lender
(including, without limitation, any Reimbursement Obligation that is not converted to a Loan pursuant to Section 2.2 or the principal amount of any Loan); or the Borrower shall fail to pay when due any interest or other amount whatsoever
payable by it hereunder, under the other Loan Documents or under the Existing Hedging Agreement within three (3) Business Days after the same shall become due and payable; or 
  
 (b) Any representation or warranty made or deemed made by the Borrower herein or in any other Loan Document or by the Parent
Guarantor in the Parent Guarantee or which is contained in any certificate, document or financial or other statement furnished at any time under or in connection with this Agreement or any of the other Loan Documents shall prove to have been
incorrect in any material respect on or as of the date made or deemed made; or 
  
 (c) The Borrower shall default in the observance or performance of any covenant contained in Article VI (other than Sections 6.6, 6.10 or 6.11(a)(iv)) or Article VII; or the Borrower shall fail to comply with its
obligations under Section 6.11(a)(iv) and such failure shall continue for a period of 45 days; or 
  

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 (d) The Borrower shall default in the observance or performance of any other covenant or agreement
contained in this Agreement or any other Loan Document (other than as provided in Sections 8.1(a), 8.1(b) and 8.1(c)), or the Parent Guarantor shall default in the observance or performance of any other covenant or agreement contained in the Parent
Guarantee, and such default shall in any case continue unremedied for a period of 30 days; or 
  
 (e) (i) The Borrower, the Parent Guarantor, the Maker or the Purchase L/C Bank shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) in any jurisdiction seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for
all or any substantial part of its assets, or the Borrower, the Parent Guarantor, the Maker or the Purchase L/C Bank shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against the Borrower, the
Parent Guarantor, the Maker or the Purchase L/C Bank any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or
(B) remains undismissed, undischarged or unbonded for a period of 60 days; or (iii) there shall be commenced against the Borrower, the Parent Guarantor, the Maker or the Purchase L/C Bank in any jurisdiction any case, proceeding or other
action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged,
or stayed or bonded pending appeal within 60 days from the entry thereof; or (iv) the Borrower, the Parent Guarantor, the Maker or the Purchase L/C Bank shall take any action in furtherance of, or consenting to, approval of, or acquiescence in,
any of the acts set forth in clause (i), (ii) or (iii) above; or (v) the Borrower, the Parent Guarantor, the Maker or the Purchase L/C Bank shall generally not, or shall be unable to, or shall admit in writing its inability to, pay
its debts as they become due; or 
  
 (f) One or more judgments or
decrees shall be entered against the Borrower in any jurisdiction involving in the aggregate a liability (not paid or fully covered by insurance) of $250,000 (or an amount in another currency equivalent thereto) or more, and all such judgments or
decrees shall not have been vacated, discharged, stayed or bonded pending appeal within 90 days from the entry thereof; or 
  
 (g) Any Event of Default as defined in the Purchase Note, as in effect on the Closing Date, shall occur; or 
  
 (h) The Commercial Paper Account or the Letter of Credit Account or funds on
deposit in, or otherwise to the credit of, the Commercial Paper Account or the Letter of Credit Account shall be subject to any writ, order, judgment, warrant of attachment, execution or similar process or stay or other similar legal restraint; or

  

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 (i) the Parent Guarantor shall cease to own and control, directly or indirectly, 100% of the membership
interests of the Borrower; or 
  
 (j) any of the Loan Documents to
which the Borrower is a party shall cease, for any reason, to be in full force and effect, or the Borrower shall repudiate any of its obligations thereunder, or any Lien created by any of the Loan Documents in favor of the Administrative Agent shall
cease to be enforceable and of the same effect and priority purported to be created thereby (other than as a result of any termination or partial release by the Administrative Agent of any Uniform Commercial Code financing statement); or 

 
 (k) the Parent Guarantee shall cease, for any reason, to be in full force
and effect, or the Parent Guarantor shall repudiate any of its obligations thereunder. 
  
 Section 8.2. Remedies. (a) If such event is an Event of Default specified in Section 8.1(e) with respect to the Borrower or the Parent Guarantor, then (i) (A) automatically, the
Commitments shall terminate (subject to the last paragraph of this Section 8.2), (B) the Administrative Agent shall deliver a Notice of Termination to the Depositary in the form of Annex B to the Letter of Credit, (C) automatically,
the unpaid principal amount of the Reimbursement Obligations and Loans, together with accrued interest thereon and any fees and all other Obligations payable hereunder, shall immediately become due and payable, without presentment, demand, protest
or notice of any kind, all of which are hereby expressly waived, anything contained herein or in the Notes to the contrary notwithstanding and (D) the Borrower shall immediately pay to the Administrative Agent an amount equal to the
Administrative Agent’s total potential obligations under the Letter of Credit for which demand thereunder has not at the time been made, which amount shall in no event be less than the aggregate amount required to pay in full the Face Amount of
all outstanding CP Notes (and the Administrative Agent shall promptly cause to be deposited in the Commercial Paper Account any such amount so received), and (ii) the Administrative Agent may, and at the direction of the Required Lenders shall,
instruct the Depositary to cease issuing CP Notes as provided in the Depositary Agreement; and 
  
 (b) If such event is an Event of Default other than one specified in Section 8.1(e) with respect to the Borrower or the Parent Guarantor and is continuing, then the Administrative Agent may, and at the
direction of the Required Lenders shall, do any or all of the following: (i) terminate forthwith the Commitments (subject to the last paragraph of this Section 8.2), (ii) direct the Administrative Agent to terminate the Letter
of Credit in accordance with the provisions thereof and deliver notice to the Depositary of such termination pursuant to the Letter of Credit, (iii) direct the Borrower immediately to pay to the Administrative Agent an amount equal to the
Administrative Agent’s potential obligations under the Letter of Credit for which demand thereunder has not at the time been made, which amount shall in no event be less than the aggregate amount required to pay in full the Face Amount of all
outstanding CP Notes (and the Administrative Agent shall promptly cause to be deposited in the Commercial Paper Account any such amount so received), (iv) declare the principal amount of the Reimbursement Obligations and Loans to be forthwith
due and payable, whereupon such principal amount, together with accrued interest thereon and any fees and all other Obligations accrued hereunder, shall become immediately due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived, anything contained herein or in the Notes 
  

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 to the contrary notwithstanding, (v) instruct the Depositary to cease issuing CP Notes as provided in the Depositary
Agreement and (vi) pursue any other remedies which may be available to the Administrative Agent or the Lenders at law or in equity. 
  
 The foregoing notwithstanding, nothing in this Section 8.2 shall (A) impair the obligation of the Administrative Agent to make payments
in accordance with the Letter of Credit with respect to maturing CP Notes which have been validly issued and are outstanding pursuant to the terms of this Agreement and the Depositary Agreement or (B) impair the Borrower’s obligation to
reimburse the Administrative Agent for L/C Payments made subsequent to the time any remedy provided in this Section 8.2 shall have been exercised or to reimburse the Lenders for Reimbursement Obligations arising therefrom or
(C) impair the obligations of the Lenders to make Reimbursement Payments under Section 2.1(d), and provided, further, that nothing in this Section 8.2 shall give the Administrative Agent the right to
request the Depositary to debit the Commercial Paper Account on any Business Day until after such time as the Administrative Agent shall have honored any demand for payment under the Letter of Credit required to be paid on such Business Day.

  
 ARTICLE IX 
  
 THE ADMINISTRATIVE AGENT 
  
 Section 9.1. Appointment of Administrative Agent. Each
Lender irrevocably appoints SunTrust as the Administrative Agent and authorizes it to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent under this Agreement and the other Loan Documents,
together with all such actions and powers that are reasonably incidental thereto. The Administrative Agent may perform any of its duties hereunder or under the other Loan Documents by or through any one or more sub-agents or attorneys-in-fact
appointed by the Administrative Agent. The Administrative Agent and any such sub-agent or attorney-in-fact may perform any and all of its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions
set forth in this Article shall apply to any such sub-agent or attorney-in-fact and the Related Parties of the Administrative Agent, any such sub-agent and any such attorney-in-fact and shall apply to their respective activities in connection with
the syndication of the credit facilities provided for herein as well as activities as Administrative Agent. 
  
 Section 9.2. Nature of Duties of Administrative Agent. The Administrative Agent shall not have any duties or obligations except those
expressly set forth in this Agreement and the other Loan Documents. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default or
an Event of Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except those discretionary rights and powers expressly contemplated
by the Loan Documents that the Administrative Agent is required to exercise in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 10.2),
and (c) except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries
that 
  

 -53- 

 is communicated to or obtained by the Administrative Agent or any of its Affiliates in any capacity. The Administrative
Agent shall not be liable for any action taken or not taken by it, its sub-agents or attorneys-in-fact with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 10.2) except that the Administrative Agent shall be liable to the extent of its own gross negligence or willful misconduct. The Administrative Agent shall not be responsible for the negligence or
misconduct of any sub-agents or attorneys-in-fact selected by it with reasonable care. The Administrative Agent shall not be deemed to have knowledge of any Default or Event of Default unless and until written notice thereof (which notice shall
include an express reference to such event being a “Default” or “Event of Default” hereunder) is given to the Administrative Agent by the Borrower or any Lender, and the Administrative Agent shall not be responsible for or have
any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in
connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements, or other terms and conditions set forth in any Loan Document, (iv) the validity, enforceability, effectiveness or genuineness of any
Loan Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article III or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered
to the Administrative Agent. The Administrative Agent may consult with legal counsel (including counsel for the Borrower) concerning all matters pertaining to such duties. 
  
 Section 9.3. Lack of Reliance on the Administrative Agent. Each of the Lenders acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each of the
Lenders also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, continue to make its own decisions in taking or
not taking of any action under or based on this Agreement, any related agreement or any document furnished hereunder or thereunder. 
  
 Section 9.4. Certain Rights of the Administrative Agent. If the Administrative Agent shall request instructions from the Required
Lenders with respect to any action or actions (including the failure to act) in connection with this Agreement, the Administrative Agent shall be entitled to refrain from such act or taking such act, unless and until it shall have received
instructions from such Lenders; and the Administrative Agent shall not incur liability to any Person by reason of so refraining. Without limiting the foregoing, no Lender shall have any right of action whatsoever against the Administrative Agent as
a result of the Administrative Agent acting or refraining from acting hereunder in accordance with the instructions of the Required Lenders where required by the terms of this Agreement. 
  
 Section 9.5. Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely upon,
and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed, sent or made by the proper Person. The
Administrative Agent may also rely upon any statement made to it orally or by telephone and believed by it to be made 
  

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 by the proper Person and shall not incur any liability for relying thereon. The Administrative Agent may consult with
legal counsel (including counsel for the Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or not taken by it in accordance with the advice of such counsel, accountants or
experts. 
  
 Section 9.6. The Administrative Agent in
its Individual Capacity. The bank serving as the Administrative Agent shall have the same rights and powers under this Agreement and any other Loan Document in its capacity as a Lender as any other Lender and may exercise or refrain from
exercising the same as though it were not the Administrative Agent; and the terms “Lenders”, “Required Lenders”, “holders of Notes”, or any similar terms shall, unless the context clearly otherwise indicates, include
the Administrative Agent in its individual capacity. The bank acting as the Administrative Agent and its Affiliates may accept deposits from, lend money to, and generally engage in any kind of business with the Borrower or any Subsidiary or
Affiliate of the Borrower as if it were not the Administrative Agent hereunder. 
  
 Section 9.7. Successor Administrative Agent. 
  
 (a) The Administrative Agent may resign at any time by giving notice thereof to the Lenders and the Borrower. Upon any such resignation, the Required
Lenders shall have the right to appoint a successor Administrative Agent, subject to the approval by the Borrower provided that no Default or Event of Default shall exist at such time. If no successor Administrative Agent shall have been so
appointed, and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of resignation, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative
Agent, which shall be a commercial bank organized under the laws of the United States of America or any state thereof or a bank which maintains an office in the United States, having a combined capital and surplus of at least $500,000,000 and whose
short-term obligations are rated Prime-1 by Moody’s and A-1 by S&P. Notwithstanding the foregoing, no appointment of a successor Administrative Agent will be effective without confirmation from both S&P and Moody’s that the
appointment of such successor will not result in a downgrade or removal of the rating of the CP Notes provided by S&P and Moody’s. 
  
 (b) Upon the acceptance of its appointment as the Administrative Agent hereunder by a successor, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations under this Agreement and the other Loan
Documents. If within 45 days after written notice is given of the retiring Administrative Agent’s resignation under this Section 9.7 no successor Administrative Agent shall have been appointed and shall have accepted such
appointment, then on such 45th day (i) the retiring Administrative Agent’s resignation shall become effective, (ii) the retiring Administrative Agent shall thereupon be discharged from its duties and obligations under the Loan
Documents and (iii) the Required Lenders shall thereafter perform all duties of the retiring Administrative Agent under the Loan Documents until such time as the Required Lenders appoint a successor Administrative Agent as provided above. After
any retiring Administrative Agent’s resignation hereunder, the provisions of this Article shall continue in effect for the benefit of such retiring Administrative Agent and its representatives and agents in respect of any actions taken or not
taken by any of them while it was serving as the Administrative Agent. 
  

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 Section 9.8. Authorization to Execute other Loan Documents. Each Lender hereby
authorizes the Administrative Agent to execute on behalf of all Lenders all Loan Documents other than this Agreement. 
  
 Section 9.9. Further Assurances. Upon the Borrower’s request and at the Borrower’s expense, the Administrative Agent shall
cooperate in connection with the division of the Purchase Note into notes of smaller denominations and the issuance of multiple Purchase L/Cs in the aggregate face amount of such replacement notes as contemplated by Section 7.2 hereof,
without prejudice to the obligations of the Borrower under Section 6.11(a)(i) and (ii) hereof. 
  
 ARTICLE X 
  
 MISCELLANEOUS 
  
 Section 10.1. Notices. 
  
 (a) Except in the case of notices and other communications expressly permitted to be given by telephone, all notices and other communications to any party herein to be effective shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows: 
  

			
	 To the Borrower:
	  	NATC California LLC
	 	  	133 Peachtree Street N.E.
	 	  	Atlanta, Georgia 30303
	 	  	Attention: Corporate Secretary
	 	  	Telephone: 404-652-4000
	 	  	Telecopy: 404-584-1461
		
	 With a copy to:
	  	Georgia-Pacific Corporation
	 	  	133 Peachtree Street N.E.
	 	  	Atlanta, Georgia 30303
	 	  	Attention: General Counsel
	 	  	Telephone: 404-652-4000
	 	  	Telecopy: 404-584-1461
		
	 	  	and
		
	 	  	Troutman Sanders LLP
	 	  	Suite 5200
	 	  	600 Peachtree Street, N.E.
	 	  	Atlanta, GA 30308-2216
	 	  	Attention: Hazen H. Dempster
	 	  	Telephone: 404-885-3126
	 	  	Telecopy: 404-962-6544

  

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	 To the Administrative
	  	SunTrust Bank
	 Agent:
	  	303 Peachtree Street, N.E.
	 	  	Third Floor
	 	  	Atlanta, Georgia 30308
	 	  	Attention: Bradley J. Staples
	 	  	Telecopy Number: 404-588-8833
		
	 With a copy to:
	  	SunTrust Bank
	 	  	303 Peachtree Street, N.E.
	 	  	Tenth Floor
	 	  	Atlanta, Georgia 30308
	 	  	Attention: Robert A. Mathews
	 	  	Telecopy Number: 404-230-1940
		
	 	  	and
		
	 	  	King & Spalding LLP
	 	  	191 Peachtree Street, N.E.
	 	  	Atlanta, Georgia 30303
	 	  	Attention: Hector E. Llorens, Jr.
	 	  	Telecopy Number: (404) 572-5100
		
	 To any other Lender:
	  	the address set forth in the Administrative Questionnaire or the Assignment and Acceptance Agreement executed by such Lender

  
 Any party hereto may change its
address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All such notices and other communications shall, when transmitted by overnight delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted in legible form by facsimile machine, respectively, or if mailed, upon the third Business Day after the date deposited into the mail or if delivered, upon delivery; provided, that notices delivered to
the Administrative Agent shall not be effective until actually received by such Person at its address specified in this Section 10.1. 
  
 (b) Any agreement of the Administrative Agent and the Lenders herein to receive certain notices by telephone or facsimile is solely for the convenience
and at the request of the Borrower. The Administrative Agent and the Lenders shall be entitled to rely on the authority of any Person purporting to be a Person authorized by the Borrower to give such notice and the Administrative Agent and Lenders
shall not have any liability to the Borrower or other Person on account of any action taken or not taken by the Administrative Agent or the Lenders in reliance upon such telephonic or facsimile notice. The obligation of the Borrower to repay the
Loans and all other Obligations hereunder shall not be affected in any way or to any extent by any failure of the Administrative Agent and the Lenders to receive written confirmation of any telephonic or facsimile notice or the receipt by the
Administrative Agent and the Lenders of a confirmation which is at variance with the terms understood by the Administrative Agent and the Lenders to be contained in any such telephonic or facsimile notice. 
  

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 Section 10.2. Waiver; Amendments. 
  
 (a) No failure or delay by the Administrative Agent or any Lender in
exercising any right or power hereunder or any other Loan Document, and no course of dealing between the Borrower and the Administrative Agent or any Lender, shall operate as a waiver thereof, nor shall any single or partial exercise of any such
right or power or any abandonment or discontinuance of steps to enforce such right or power, preclude any other or further exercise thereof or the exercise of any other right or power hereunder or thereunder. The rights and remedies of the
Administrative Agent and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies provided by law. No waiver of any provision of this Agreement or any other Loan Document or consent to
any departure by the Borrower therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section 10.2, and then such waiver or consent shall be effective only in the specific instance and
for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan shall not be construed as a waiver of any Default or Event of Default, regardless of whether the Administrative Agent or any Lender may have had
notice or knowledge of such Default or Event of Default at the time. 
  
 (b) No amendment or waiver of any provision of this Agreement or the other Loan Documents, nor consent to any departure by the Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed by the
Borrower and the Required Lenders or the Borrower and the Administrative Agent with the consent of the Required Lenders and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given;
provided, that no amendment or waiver shall: (i) increase the Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any Obligation or reduce the rate of interest thereon, or reduce
any fees payable hereunder, without the written consent of each Lender affected thereby, (iii) postpone the date fixed for any payment of any principal of, or interest on, any Obligation or interest thereon or any fees hereunder or reduce the
amount of, waive or excuse any such payment, or postpone the scheduled date for the termination or reduction of any Commitment, without the written consent of each Lender affected thereby, (iv) change Section 2.17(b) or
(c) in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender, (v) change any of the provisions of this Section 10.2 or the definition of “Required
Lenders” or any other provision hereof specifying the number or percentage of Lenders which are required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the consent of each
Lender; (vi) release any guarantor or limit the liability of any such guarantor under any guaranty agreement, without the written consent of each Lender; (vii) release all or substantially all of the Collateral or agree to subordinate any
Lien in the Collateral to any other creditor of the Borrower or any Subsidiary, without the written consent of each Lender; provided further, that no such agreement shall amend, modify or otherwise affect the rights, duties or obligations of
the Administrative Agent without the prior written consent of such Person. Notwithstanding anything contained herein to the contrary, this Agreement may be amended and restated without the consent of any Lender (but with the consent of the Borrower
and the Administrative Agent) if, upon giving effect to such amendment and restatement, such 
  

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 Lender shall no longer be a party to this Agreement (as so amended and restated), the Commitments of such Lender shall
have terminated (but such Lender shall continue to be entitled to the benefits of Sections 2.14, 2.15, 2.16 and 10.3), such Lender shall no other commitment or other obligation hereunder and shall have been paid in full
all principal, interest and other amounts owing to it or accrued for its account under this Agreement. 
  
 (c) In addition, no such waiver and no such amendment, supplement or modification shall (i) amend, modify or waive any provision of the Depositary
Agreement or permit the substitution of the Depositary without the written consent of the Required Lenders and the Administrative Agent, (ii) increase the Stated Amount without the written consent of the Required Lenders and the Administrative
Agent, (iii) amend, modify or waive any provision of Article III without the consent of the Required Lenders and the Administrative Agent, and (iv) affect the timing, method of payment, or obligations under the Letter of Credit
without the prior confirmation from S&P and Moody’s that such amendment, supplement or modification will not have a negative effect upon the ratings of the CP Notes. 
  
 Section 10.3. Expenses; Indemnification. 
  
 (a) The Borrower shall pay (i) all reasonable, out-of-pocket costs and expenses of the Administrative Agent and its
Affiliates, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent and its Affiliates, in connection with the syndication of the credit facilities provided for herein, the preparation and administration of
the Loan Documents and any amendments, modifications or waivers thereof (whether or not the transactions contemplated in this Agreement or any other Loan Document shall be consummated), and (ii) all out-of-pocket costs and expenses (including
without limitation the reasonable fees, charges and disbursements of outside counsel and the allocated cost of inside counsel) incurred by the Administrative Agent or any Lender in connection with the enforcement or protection of its rights in
connection with this Agreement, including its rights under this Section 10.3, or in connection with the Loans made hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect
of such Loans. 
  
 (b) The Borrower shall indemnify the
Administrative Agent (and any sub-agent thereof) and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Indemnitee), and shall indemnify and hold harmless each Indemnitee from all fees and time charges and disbursements for
attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by any third party or by the Borrower or any other Loan Party arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the
transactions contemplated hereby or thereby, (ii) any Loan or the use or proposed use of the proceeds therefrom, or (iii) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether
based on contract, tort or any other theory, whether brought by a third party or by the Borrower or any other Loan Party, and regardless of whether any Indemnitee is a party thereto, provided that such indemnity shall not, as to any Indemnitee, be

  

 -59- 

 available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a
court of competent jurisdiction by judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee (unless such judgment is thereafter reversed on appeal by a court of competent jurisdiction, in which event, the Borrower
or such Loan Party shall be liable for such loss, claim, damage, liability or related expense in accordance with this Section 10.3) or (y) result from a claim brought by the Borrower or any other Loan Party against an Indemnitee for
breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if the Borrower or such Loan Party has obtained a judgment in its favor on such claim as determined by a court of competent jurisdiction (unless
such judgment is thereafter reversed on appeal by a court of competent jurisdiction, in which event, the Borrower or such Loan Party shall be liable for such loss, claim, damage, liability or related expense in accordance with this
Section 10.3). 
  
 (c) The Borrower shall pay, and
hold the Administrative Agent and each of the Lenders harmless from and against, any and all present and future stamp, documentary, and other similar taxes with respect to this Agreement and any other Loan Documents, any collateral described
therein, or any payments due thereunder, and save the Administrative Agent and each Lender harmless from and against any and all liabilities with respect to or resulting from any delay or omission to pay such taxes. 
  
 (d) To the extent that the Borrower fails to pay any amount required to be
paid to the Administrative Agent under clauses (a), (b) or (c) hereof, each Lender severally agrees to pay to the Administrative Agent such Lender’s Pro Rata Share (determined as of the time that the unreimbursed expense or indemnity
payment is sought) of such unpaid amount; provided, that the unreimbursed expense or indemnified payment, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent in its
capacity as such. 
  
 (e) To the extent permitted by applicable
law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to actual or direct damages) arising out of, in connection with
or as a result of, this Agreement or any agreement or instrument contemplated hereby, the transactions contemplated therein, any Loan or the use of proceeds thereof. 
  
 (f) All amounts due under this Section 10.3 shall be payable promptly after written demand therefor. 

 
 Section 10.4. Successors and Assigns. 
  
 (a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the
Administrative Agent and each Lender, and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of paragraph (b) of this Section, (ii) by way
of participation in accordance with the provisions of paragraph (d) of this Section or (iii) by way of 
  

 -60- 

 pledge or assignment of a security interest subject to the restrictions of paragraph (f) of this Section (and any
other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in paragraph (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right,
remedy or claim under or by reason of this Agreement. 
  
 (b) Any
Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Reimbursement Obligations and Loans at the time owing to it);
provided that any such assignment shall be subject to the following conditions: 
  
 (i) Minimum Amounts. 
  
 (A) in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and Reimbursement Obligations and Loans at the time owing to it or in the case of an assignment to a Lender or
an Affiliate of a Lender, no minimum amount need be assigned; and 
  
 (B) in any case not described in paragraph (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Reimbursement Obligations and Loans outstanding thereunder) or, if the
applicable Commitment is not then in effect, the principal outstanding balance of the Reimbursement Obligations and Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Acceptance with respect
to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Acceptance, as of the Trade Date) shall not be less than $1,000,000, unless each of the Administrative Agent and, so long as
no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed). 
  
 (ii) Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning
Lender’s rights and obligations under this Agreement with respect to the Reimbursement Obligations, Loans or the Commitment assigned. 
  
 (iii) Required Consents. No consent shall be required for any assignment except to the extent required by paragraph (b)(i)(B) of
this Section and, in addition: 
  
 (A) the
consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (x) an Event of Default has occurred and is continuing at the time of such assignment or (y) such assignment is to a Lender or an
Affiliate of a Lender; and 
  
 (B) the consent of
the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments to a Person that is not a Lender with a Commitment; and 
  

 -61- 

 (iv) Assignment and Acceptance. The parties to each assignment shall deliver to
the Administrative Agent (A) a duly executed Assignment and Acceptance, (B) a processing and recordation fee of $3,000, (C) an Administrative Questionnaire unless the assignee is already a Lender and (D) the documents required
under Section 10.4 if such assignee is a Foreign Lender. 
  
 (v) No Assignment to Borrower. No such assignment shall be made to the Borrower or any of the Borrower’s Affiliates or Subsidiaries. 
  
 (vi) No Assignment to Natural Persons. No such assignment shall be made to a natural person.

  
 Subject to acceptance and recording thereof by the Administrative Agent
pursuant to paragraph (c) of this Section 10.4, from and after the effective date specified in each Assignment and Acceptance, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by
such Assignment and Acceptance, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the
benefits of Sections 2.14, 2.15, 2.16 and 10.3 with respect to facts and circumstances occurring prior to the effective date of such assignment. Any assignment or transfer by a Lender of rights or obligations under
this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (d) of this
Section 10.4. If the consent of the Borrower to an assignment is required hereunder (including a consent to an assignment which does not meet the minimum assignment thresholds specified above), the Borrower shall be deemed to have given
its consent five Business Days after the date notice thereof has actually been delivered by the assigning Lender (through the Administrative Agent) to the Borrower, unless such consent is expressly refused by the Borrower prior to such fifth
Business Day. 
  
 (c) The Administrative Agent, acting solely for
this purpose as an agent of the Borrower, shall maintain at one of its offices in Atlanta, Georgia a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amount of the Reimbursement Obligations and Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and the
Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice. 
  
 (d) Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent sell participations to any Person (other
than a natural person, the Borrower or any of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all

  

 -62- 

 or a portion of its Commitment and/or the Reimbursement Obligations and Loans owing to it); provided that
(i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the
Administrative Agent and the Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. 
  
 (e) Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall
retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of
the Participant, agree to any amendment, modification or waiver with respect to the following to the extent affecting such Participant: (i) increase the Commitment of any Lender without the written consent of such Lender, (ii) reduce the
principal amount of any Reimbursement Obligation or Loan or reduce the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of each Lender affected thereby, (iii) postpone the date fixed for any payment of
any principal of, or interest on, any Reimbursement Obligation or Loan or interest thereon or any fees hereunder or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date for the termination or reduction of any
Commitment, without the written consent of each Lender affected thereby, (iv) change Section 2.17(b) or (c) in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of
each Lender, (v) change any of the provisions of this Section 10.4 or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders which are required to waive, amend or
modify any rights hereunder or make any determination or grant any consent hereunder, without the consent of each Lender; (vi) release any guarantor or limit the liability of any such guarantor under any guaranty agreement without the written
consent of each Lender except to the extent such release is expressly provided under the terms of the Guaranty Agreement; or (vii) release all or substantially all collateral (if any) securing any of the Obligations. Subject to paragraph
(e) of this Section 10.4, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.14, 2.15, and 2.16 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section 10.4. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.7 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.14 as though it were a Lender. 
  
 (f) A Participant shall not be entitled to receive any greater payment under Section 2.14 and Section 2.16 than the applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 2.16 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 2.16(e) as though it were a Lender.

  
 (g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto. 
  

 -63- 

 Section 10.5. Governing Law; Jurisdiction; Consent to Service of Process. 

 
 (a) This Agreement and the other Loan Documents shall be construed in
accordance with and be governed by the law (without giving effect to the conflict of law principles thereof that would defer to the substantive laws of another jurisdiction) of the State of New York. 
  
 (b) Each party to this Agreement hereby irrevocably and unconditionally
submits, for itself and its property, to the non-exclusive jurisdiction of the United States District Court of the Southern District of New York, and of the Supreme Court of the State of New York sitting in New York County and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this Agreement or any other Loan Document or the transactions contemplated hereby or thereby, or for recognition or enforcement of any judgment, and each of the parties
hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York state court or, to the extent permitted by applicable law, such Federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan
Document shall affect any right that the Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against the Borrower or its properties in the courts of any
jurisdiction. 
  
 (c) Each party to this Agreement irrevocably and
unconditionally waives any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding described in paragraph (b) of this Section 10.5 and brought in any court referred to in
paragraph (b) of this Section 10.5. Each of the parties hereto irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such
court. 
  
 (d) Each party to this Agreement irrevocably consents
to the service of process in the manner provided for notices in Section 10.1. Nothing in this Agreement or in any other Loan Document will affect the right of any party hereto to serve process in any other manner permitted by law.

  
 Section 10.6. WAIVER OF JURY TRIAL. EACH
PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF 
  

 -64- 

 LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. 
  
 Section 10.7. Right of Setoff. In addition to any rights now or hereafter granted under applicable law and not by way of limitation of
any such rights, each Lender shall have the right, at any time or from time to time upon the occurrence and during the continuance of an Event of Default, without prior notice to the Borrower, any such notice being expressly waived by the Borrower
to the extent permitted by applicable law, to set off and apply against all deposits (general or special, time or demand, provisional or final) of the Borrower at any time held or other obligations at any time owing by such Lender to or for the
credit or the account of the Borrower against any and all Obligations held by such Lender irrespective of whether such Lender shall have made demand hereunder and although such Obligations may be unmatured. Each Lender agrees promptly to notify the
Administrative Agent and the Borrower after any such set-off and any application made by such Lender; provided, that the failure to give such notice shall not affect the validity of such set-off and application. Each Lender agrees to apply
all amounts collected from any such set-off to the Obligations before applying such amounts to any other Indebtedness or other obligations owed by the Borrower to such Lender. 
  
 Section 10.8. Counterparts; Integration. This Agreement may be executed by one or more of the parties to
this Agreement on any number of separate counterparts (including by telecopy), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. This Agreement, the Fee Letter, the other Loan Documents, and any
separate letter agreement(s) relating to any fees payable to the Administrative Agent constitute the entire agreement among the parties hereto and thereto regarding the subject matters hereof and thereof and supersede all prior agreements and
understandings, oral or written, regarding such subject matters; provided, however, that the provisions of sections B, C, G, I, J.6 and J.7 of that certain commitment letter, dated as of August 29, 2005, executed by the Arranger
and SunTrust and acknowledged and agreed to by the Parent Guarantor shall survive the execution and deliver of this Agreement and the other Loan Documents. 
  
 Section 10.9. Survival. All covenants, agreements, representations and warranties made by the Borrower herein and in the certificates
or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any Loans,
regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid and so long as the
Commitments have not expired or terminated. The provisions of Sections 2.14, 2.15, 2.16, and 10.3 and Article IX shall survive and remain in full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Reimbursement Obligations, the Loans and the Commitments or the termination of this Agreement or any provision hereof. All representations and warranties made 
  

 -65- 

 herein, in the certificates, reports, notices, and other documents delivered pursuant to this Agreement shall survive the
execution and delivery of this Agreement and the other Loan Documents, the issuance of the Letter of Credit and the conversion of Reimbursement Obligations into Loans in accordance with Section 2.2. 
  
 Section 10.10. Severability. Any provision of this
Agreement or any other Loan Document held to be illegal, invalid or unenforceable in any jurisdiction, shall, as to such jurisdiction, be ineffective to the extent of such illegality, invalidity or unenforceability without affecting the legality,
validity or enforceability of the remaining provisions hereof or thereof; and the illegality, invalidity or unenforceability of a particular provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. 
  
 Section 10.11.
Confidentiality. The Administrative Agent and each Lender agrees to take normal and reasonable precautions to maintain the confidentiality of any information designated in writing as confidential and provided to it by the Borrower, except
that such information may be disclosed (i) to any Related Party of the Administrative Agent or any such Lender, including without limitation accountants, legal counsel and other advisors, (ii) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (iii) to the extent requested by any regulatory agency or authority, (iv) to the extent that such information becomes publicly available other than as a result of a breach of this
Section 10.11, or which becomes available to the Administrative Agent, any Lender or any Related Party of any of the foregoing on a non-confidential basis from a source other than the Borrower, (v) in connection with the exercise of
any remedy hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder, and (ix) subject to provisions substantially similar to this Section 10.11, to any actual or prospective
assignee or Participant, or (vi) with the consent of the Borrower. Any Person required to maintain the confidentiality of any information as provided for in this Section 10.11 shall be considered to have complied with its obligation
to do so if such Person has exercised the same degree of care to maintain the confidentiality of such information as such Person would accord its own confidential information. 
  
 Section 10.12. Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time
the interest rate applicable to any Obligation, together with all fees, charges and other amounts which may be treated as interest on such Obligation under applicable law (collectively, the “Charges”), shall exceed the maximum
lawful rate of interest (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by a Lender holding such Obligation in accordance with applicable law, the rate of interest payable in respect of such
Obligation hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Obligation but were not payable as a
result of the operation of this Section 10.12 shall be cumulated and the interest and Charges payable to such Lender in respect of other Obligations or periods shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Federal Funds Rate to the date of repayment, shall have been received by such Lender. 
  
 Section 10.13. Waiver of Effect of Corporate Seal. The Borrower represents and warrants that neither it nor any other Loan Party is
required to affix its corporate seal to this 
  

 -66- 

 Agreement or any other Loan Document pursuant to any requirement of law or regulation, agrees that this Agreement is
delivered by Borrower under seal and waives any shortening of the statute of limitations that may result from not affixing the corporate seal to this Agreement or such other Loan Documents. 
  
 Section 10.14. Patriot Act. The Administrative Agent and
each Lender hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrower in accordance with the
Patriot Act. The Borrower shall provide to the extent commercially reasonable, such information and take such other actions as are reasonably requested by the Administrative Agent or any Lender in order to assist the Administrative Agent and the
Lenders in maintaining compliance with the Patriot Act. 
  
 (remainder of page left intentionally blank) 
  

 -67- 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed under seal
in the case of the Borrower by their respective authorized officers as of the day and year first above written. 
  

			
	NATC CALIFORNIA LLC
		
	 By
	 	 /s/ TYLER L. WOOLSON

	 Name:
	 	 Tyler L. Woolson

	 Title:
	 	 Senior Vice President – Finance and

	 	 	 Strategy and Treasurer

	
	[SEAL]
	
	 SUNTRUST BANK,
 as Administrative
Agent and as a Lender

		
	 By
	 	 /s/ BRADLEY J. STAPLES

	 	 	 Bradley J. Staples

	 	 	 Managing Director

  
 [SIGNATURE
PAGE TO CREDIT AGREEMENT] 

 SCHEDULE I 
  
 COMMITMENT AMOUNTS 
  

				
	 Lender  

	  	Commitment Amount

	 SunTrust Bank
	  	$	350,000,000Rights Agreement

 Exhibit 4.3 

  
 HERCULES OFFSHORE, INC. 
  
 and 
  
 AMERICAN STOCK TRANSFER & TRUST COMPANY, 
  
 Rights Agent 
  

  
 Form of 
  
 Rights Agreement 
  
 Dated as of
[                     ], 2005 
  

  
  

 TABLE OF CONTENTS 
  

					
	 Section 1.
	  	Certain Definitions	  	1
			
	 Section 2.
	  	Appointment of Rights Agent	  	7
			
	 Section 3.
	  	Issue of Rights Certificates	  	7
			
	 Section 4.
	  	Form of Rights Certificates	  	9
			
	 Section 5.
	  	Countersignature and Registration	  	10
			
	 Section 6.
	  	Transfer, Split-Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates	  	10
			
	 Section 7.
	  	Exercise of Rights; Purchase Price	  	11
			
	 Section 8.
	  	Cancellation and Destruction of Rights Certificates	  	13
			
	 Section 9.
	  	Reservation and Availability of Capital Stock	  	13
			
	 Section 10.
	  	Preferred Stock Record Date	  	15
			
	 Section 11.
	  	Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights	  	15
			
	 Section 12.
	  	Certificate of Adjusted Purchase Price or Number of Shares	  	22
			
	 Section 13.
	  	Consolidation, Merger or Sale or Transfer of Assets, Cash Flow or Earning Power	  	22
			
	 Section 14.
	  	Fractional Rights and Fractional Shares	  	25
			
	 Section 15.
	  	Rights of Action	  	26
			
	 Section 16.
	  	Agreement of Rights Holders	  	26
			
	 Section 17.
	  	Rights Certificate Holder Not Deemed a Stockholder	  	27
			
	 Section 18.
	  	Concerning the Rights Agent	  	27
			
	 Section 19.
	  	Merger or Consolidation or Change of Name of Rights Agent	  	28
			
	 Section 20.
	  	Duties of Rights Agent	  	28
			
	 Section 21.
	  	Change of Rights Agent	  	30
			
	 Section 22.
	  	Issuance of New Rights Certificates	  	31
			
	 Section 23.
	  	Redemption and Termination	  	31
			
	 Section 24.
	  	Exchange	  	32
			
	 Section 25.
	  	Notice of Certain Events	  	33
			
	 Section 26.
	  	Notices	  	34
			
	 Section 27.
	  	Supplements and Amendments	  	34
			
	 Section 28.
	  	Successors	  	35
			
	 Section 29.
	  	Determinations and Actions by the Board of Directors, etc	  	35

  

 -i- 

					
	 Section 30.
	  	Benefits of this Agreement	  	36
			
	 Section 31.
	  	Severability	  	36
			
	 Section 32.
	  	Governing Law	  	36
			
	 Section 33.
	  	Counterparts	  	36
			
	 Section 34.
	  	Descriptive Headings	  	36
			
	 Exhibit A -
	  	Form of Certificate of Designations of Series A Junior Participating Preferred Stock	  	 
			
	 Exhibit B -
	  	Form of Rights Certificate	  	 
			
	 Exhibit C -
	  	Summary of Rights	  	 

  

 -ii- 

 RIGHTS AGREEMENT 
  
 This Rights Agreement, dated as of [            
        ], 2005 (the “Agreement”), is between Hercules Offshore, LLC, a Delaware limited liability company to be converted into a Delaware corporation named “Hercules Offshore, Inc.”
(the “Company”), and American Stock Transfer & Trust Company (the “Rights Agent”). 
  
 W I T N E S S E T H: 
  
 WHEREAS, in accordance with a Plan of Conversion dated as of July 7, 2005, the Company shall convert from a Delaware limited liability company to a
Delaware corporation (the “Conversion”) prior to the completion of an initial public offering of the Common Stock (as defined herein) of the Company (as converted); and 
  
 WHEREAS, the Board of Managers of the Company, which shall become the Board of Directors of the Company (in its status as a
corporation) at the effective time of the Conversion (the “Effective Time”), has authorized the issuance of one Right to accompany each share of Common Stock issued in the Conversion and has authorized the issuance of one Right (as such
number may hereinafter be adjusted pursuant to the provisions of Section 11(p) hereof) for each share of Common Stock of the Company issued (whether originally issued or delivered from the Company’s treasury) between the Effective Time and
the earlier of the Distribution Date (as hereinafter defined) and the Expiration Date (as hereinafter defined), and, in certain circumstances provided for in Section 22 hereof, after the Distribution Date, each Right initially representing the
right to purchase one Fractional Share (as hereinafter defined) of Series A Junior Participating Preferred Stock of the Company, upon the terms and subject to the conditions hereinafter set forth (the “Rights”); 
  
 NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows: 
  
 Section
1. Certain Definitions. For purposes of this Agreement, the following terms shall have the meanings indicated: 
  
 “Acquiring Person” shall mean any Person who or which, together with all Affiliates and Associates of such Person, shall be the Beneficial Owner
of 15% or more of the shares of Common Stock then outstanding, but shall not include any Exempt Person; provided, however, that a Person shall not be or become an Acquiring Person if such Person, together with its Affiliates and Associates,
shall become the Beneficial Owner of 15% or more of the shares of Common Stock then outstanding solely as a result of a reduction in the number of shares of Common Stock outstanding due to the repurchase of Common Stock by the Company, unless and
until such time as such Person together with its Affiliates and Associates shall purchase or otherwise become the Beneficial Owner of additional shares of Common Stock constituting 1% or more of the then outstanding shares of Common Stock or any
other Person (or Persons) who is (or collectively are) the Beneficial Owner of shares of Common Stock constituting 1% or more of the then outstanding shares of Common Stock shall become an Affiliate or Associate of such Person, unless, in either
such case, such Person, together with all Affiliates and Associates of such Person, is not then the Beneficial Owner of 15% or more of the shares of Common Stock 

  

 -1- 

 
then outstanding; and provided, further, that if the Board of Directors, with the concurrence of a majority of the members of the Board of Directors
who are not, and are not representatives, nominees, Affiliates or Associates of, such Person or an Acquiring Person, determines in good faith that a Person that would otherwise be an “Acquiring Person” has become such inadvertently
(including, without limitation, because (i) such Person was unaware that it beneficially owned a percentage of Common Stock that would otherwise cause such Person to be an “Acquiring Person” or (ii) such Person was aware of the
extent of its Beneficial Ownership of Common Stock but had no actual knowledge of the consequences of such Beneficial Ownership under this Agreement) and without any intention of changing or influencing control of the Company, and if such Person as
promptly as practicable divested or divests itself of Beneficial Ownership of a sufficient number of shares of Common Stock so that such Person would no longer be an “Acquiring Person,” then such Person shall not be deemed to be or to have
become an “Acquiring Person” for any purposes of this Agreement. Notwithstanding anything in this definition of “Acquiring Person” to the contrary, none of LR-Hercules Holdings, L.P. (“LR”), Greenhill Capital Partners,
L.P. (“Greenhill”), nor any Affiliate or Associates of LR or Greenhill shall be or become an Acquiring Person. 
  
 At any time that the Rights are redeemable, the Board of Directors may, generally or with respect to any specified Person or Persons, determine to
increase to a specified percentage greater than that set forth herein or decrease to a specified percentage lower than that set forth herein or determine a number of shares to be (but in no event less than or equal to the percentage or number of
shares of Common Stock then beneficially owned by such Person), the level of Beneficial Ownership of Common Stock at which a Person or such Person or Persons becomes an Acquiring Person. 
  
 “Adjustment Shares” shall have the meaning set forth in Section 11(a)(ii) hereof. 
  
 “Affiliate” shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the Exchange Act, as in effect on the date of this Agreement. 
  
 “Associate” shall mean, with reference to any Person, (1) any corporation, firm, partnership, association, unincorporated organization or
other entity (other than the Company or a Subsidiary of the Company) of which such Person is an officer or general partner (or officer or general partner of a general partner) or is, directly or indirectly, the Beneficial Owner of 10% or more of any
class of equity securities, (2) any trust or other estate in which such Person has a substantial beneficial interest or as to which such Person serves as trustee or in a similar fiduciary capacity and (3) any relative or spouse of such
Person, or any relative of such spouse, who has the same home as such Person. 
  
 A Person shall be deemed the “Beneficial Owner” of, and shall be deemed to “beneficially own,” any securities: 
  
 (i) that such Person or any of such Person’s Affiliates or Associates, directly or indirectly, is the
“beneficial owner” of (as determined pursuant to Rule 13d-3 of the General Rules and Regulations under the Exchange Act as in effect on the date of this Agreement) or otherwise has the right to vote or dispose of, including pursuant to any

  

 -2- 

 
agreement, arrangement or understanding (whether or not in writing); provided, however, that a Person shall not be deemed the “Beneficial
Owner” of, or to “beneficially own,” any security under this subparagraph (i) as a result of an agreement, arrangement or understanding to vote such security if such agreement, arrangement or understanding: (A) arises solely
from a revocable proxy or consent given in response to a public (i.e., not including a solicitation exempted by Rule 14a-2(b)(2) of the General Rules and Regulations under the Exchange Act as in effect on the date of this Agreement) proxy or
consent solicitation made pursuant to, and in accordance with, the applicable provisions of the General Rules and Regulations under the Exchange Act, (B) is not then reportable by such Person on Schedule 13D under the Exchange Act (or any
comparable or successor report) and (C) does not constitute a trust, proxy, power of attorney or other device with the purpose or effect of allowing two or more persons, acting in concert, to avoid being deemed “beneficial owners” of
such security or otherwise avoid the status of “Acquiring Person” under the terms of this Agreement or as part of a plan or scheme to evade the reporting requirements under Schedule 13D or Sections 13(d) or 13(g) of the Exchange Act;

  
 (ii) that such Person or any of such
Person’s Affiliates or Associates, directly or indirectly, has the right or obligation to acquire (whether such right or obligation is exercisable or effective immediately or only after the passage of time or the occurrence of an event)
pursuant to any agreement, arrangement or understanding (whether or not in writing) or upon the exercise of conversion rights, exchange rights, other rights, warrants or options, or otherwise; provided, however, that a Person shall not be
deemed the “Beneficial Owner” of, or to “beneficially own,” (A) securities tendered pursuant to a tender or exchange offer made by such Person or any of such Person’s Affiliates or Associates until such tendered
securities are accepted for purchase or exchange, (B) securities issuable upon exercise of Rights at any time prior to the occurrence of a Triggering Event, or (C) securities issuable upon exercise of Rights from and after the occurrence
of a Triggering Event which Rights were acquired by such Person or any of such Person’s Affiliates or Associates prior to the Distribution Date or pursuant to Section 3(a) or Section 22 hereof (the “Original Rights”) or
pursuant to Section 11(i) or (p) hereof in connection with an adjustment made with respect to any Original Rights; or 
  
 (iii) that are beneficially owned, directly or indirectly, by (A) any other Person (or any Affiliate or Associate thereof) with which
such Person or any of such Person’s Affiliates or Associates has any agreement, arrangement or understanding (whether or not in writing) for the purpose of acquiring, holding, voting (except pursuant to a revocable proxy or consent as described
in the proviso to subparagraph (i) of this definition) or disposing of any voting securities of the Company or (B) any group (as that term is used in Rule 13d-5(b) of the General Rules and Regulations under the Exchange Act, as in effect
on the date of this Agreement) of which such Person is a member; 
  
 provided, however, that nothing in this definition shall cause a Person engaged in business as an underwriter of securities to be the “Beneficial Owner” of, or to “beneficially own,” any securities acquired
through such Person’s participation in good faith in a firm commitment underwriting (including, without limitation, securities acquired pursuant to stabilizing transactions to facilitate a public offering in accordance with Regulation M
promulgated under the Exchange Act, or to 

  

 -3- 

 
cover overallotments created in connection with a public offering) until the expiration of forty days after the date of such acquisition; and provided
further, however, that no such Person shall be deemed to be an Acquiring Person as a result of such Person’s participation as an underwriter in the Company’s initial public offering. For purposes of this Agreement, “voting” a
security shall include voting, granting a proxy, acting by consent, making a request or demand relating to corporate action (including, without limitation, calling a stockholder meeting), entering into a voting trust or voting agreement or otherwise
giving an authorization (within the meaning of Section 14(a) of the Exchange Act, as in effect on the date of this Agreement) in respect of such security. 
  

“Business Day” shall mean any day other than a Saturday, Sunday or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close. 
  
 “close of business” on any given date shall mean 5:00 p.m., New York, New York time, on such date; provided, however, that if such date is not a Business Day, it shall mean 5:00 p.m., New York, New York time, on the next
succeeding Business Day. 
  
 “Closing Price” of a
security for any day shall mean the last sales price, regular way, on such day or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, on such day, in either case as reported in the principal
transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange, or, if such security is not listed or admitted to trading on the New York Stock Exchange, on the principal national securities
exchange on which such security is listed or admitted to trading, or, if such security is not listed or admitted to trading on any national securities exchange but sales price information is reported for such security, as reported by NASDAQ or such
other self-regulatory organization or registered securities information processor (as such terms are used under the Exchange Act) that then reports information concerning such security, or, if sales price information is not so reported, the average
of the high bid and low asked prices in the over-the-counter market on such day, as reported by NASDAQ or such other entity, or, if on such day such security is not quoted by any such entity, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in such security selected by the Board of Directors of the Company. If on such day no market maker is making a market in such security, the fair value of such security on such day as
determined in good faith by the Board of Directors of the Company shall be used. 
  
 “Common Stock” shall mean the common stock, par value $0.01 per share, of the Company, except that “Common Stock” when used with reference to equity interests issued by any Person other than the
Company shall mean the capital stock of such Person with the greatest voting power, or the equity securities or other equity interest having power to control or direct the management, of such Person. 
  
 “Common Stock Equivalents” shall have the meaning set forth in
Section 11(a)(iii) hereof. 
  
 “Company” shall mean
the Person named as the “Company” in the preamble of this Agreement until a successor Person shall have become such or until a Principal Party shall 

  

 -4- 

 
assume, and thereafter be liable for, all obligations and duties of the Company hereunder, pursuant to the applicable provisions of this Agreement, and
thereafter “Company” shall mean such successor Person or Principal Party. 
  
 “Current Market Price” shall have the meaning set forth in Section 11(d) hereof. 
  
 “Current Value” shall have the meaning set forth in Section 11(a)(iii) hereof. 
  
 “Distribution Date” shall mean the earlier of (i) the close of
business on the tenth day (or, if such Stock Acquisition Date results from the consummation of a Permitted Offer, such later date as may be determined by the Company’s Board of Directors as set forth below before the Distribution Date occurs)
after the Stock Acquisition Date or (ii) the close of business on the tenth Business Day (or such later date as may be determined by the Company’s Board of Directors as set forth below before the Distribution Date occurs) after the date
that a tender offer or exchange offer by any Person (other than any Exempt Person) is first published or sent or given within the meaning of Rule 14d-2(a) of the General Rules and Regulations under the Exchange Act as then in effect, if upon
consummation thereof, such Person would be an Acquiring Person, other than a tender or exchange offer that is determined before the Distribution Date occurs to be a Permitted Offer. The Board of Directors of the Company may, to the extent set forth
in the preceding sentence, defer the date set forth in clause (i) or (ii) of the preceding sentence to a specified later date or to an unspecified later date to be determined by a subsequent action or event (but in no event to a date later
than the close of business on the tenth day after the first occurrence of a Triggering Event). 
  
 “Effective Time” shall have the meaning set forth in the recitals clause at the beginning of this Agreement. 
  
 “Equivalent Preferred Stock” shall have the meaning set forth in Section 11(b) hereof. 
  
 “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended. 
  
 “Exchange Ratio” shall have the meaning set
forth in Section 24 hereof. 
  
 “Exempt Person”
shall mean the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, and any Person organized, appointed or established by the Company for or pursuant to the terms of any such plan or
for the purpose of funding any such plan or funding other employee benefits for employees of the Company or any Subsidiary of the Company. 
  
 “Expiration Date” shall mean the earliest of (i) the Final Expiration Date, (ii) the time at which the Rights are redeemed as provided
in Section 23 hereof, (iii) the time at which the Rights expire pursuant to Section 13(d) hereof and (iv) the time at which all Rights then outstanding and exercisable are exchanged pursuant to Section 24 hereof. 

 
 “Final Expiration Date” shall mean the close of business on
[                     ], 2015. 
  
 “Flip-In Event” shall mean an event described in Section 11(a)(ii) hereof. 
  

 -5- 

 “Flip-In Trigger Date” shall have the meaning set forth in Section 11(a)(iii) hereof.

  
 “Flip-Over Event” shall mean any event described in
clause (x), (y) or (z) of Section 13(a) hereof, but excluding any transaction described in Section 13(d) hereof that causes the Rights to expire. 
  
 “Fractional Share” with respect to the Preferred Stock shall mean one one-hundredth of a share of Preferred Stock.

  
 “NASDAQ” shall mean the National Association of
Securities Dealers, Inc. Automated Quotations System. 
  
 “Original Rights” shall have the meaning set forth in the definition of “Beneficial Owner.” 
  
 “Permitted Offer” shall mean a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined,
prior to the time the Person making the offer or any Affiliate or Associate thereof is an Acquiring Person, by at least a majority of the members of the Board of Directors who are not officers or employees of the Company and who are not, and are not
representatives, nominees, Affiliates or Associates of, an Acquiring Person or the person making the offer, after receiving advice from one or more investment banking firms, to be (a) at a price and on terms that are fair to stockholders
(taking into account all factors that such members of the Board deem relevant including, without limitation, prices that could reasonably be achieved if the Company or its assets were sold on an orderly basis designed to realize maximum value) and
(b) otherwise in the best interests of the Company and its stockholders. 
  
 “Person” shall mean any individual, firm, corporation, partnership, limited liability company, association, trust, unincorporated organization or other entity or any group of Persons acting in concert.

  
 “Preferred Stock” shall mean shares of Series A
Junior Participating Preferred Stock, par value $0.01 per share, of the Company having the rights, powers and preferences set forth in the form of Certificate of Designations attached hereto as Exhibit A and, to the extent that there is not a
sufficient number of shares of Series A Junior Participating Preferred Stock authorized to permit the full exercise of the Rights, any other series of Preferred Stock, par value $0.01 per share, of the Company designated for such purpose containing
terms substantially similar to the terms of the Series A Junior Participating Preferred Stock. 
  
 “Principal Party” shall have the meaning set forth in Section 13(b) hereof. 
  
 “Purchase Price” shall have the meaning set forth in Section 4(a) hereof. 
  
 “Redemption Price” shall have the meaning set forth in Section 23(a) hereof. 
  
 “Rights” shall have the meaning set forth in the recitals clause at
the beginning of this Agreement. 
  

 -6- 

 “Rights Agent” shall mean the Person named as the “Rights Agent” in the preamble of
this Agreement until a successor Rights Agent shall have become such pursuant to the applicable provisions hereof, and thereafter “Rights Agent” shall mean such successor Rights Agent. If at any time there is more than one Person appointed
by the Company as Rights Agent pursuant to the applicable provisions of this Agreement, “Rights Agent” shall mean and include each such Person. 
  
 “Rights Certificates” shall mean the certificates evidencing the Rights. 
  
 “Securities Act” shall mean the Securities Act of 1933, as amended. 
  
 “Spread” shall have the meaning set forth in
Section 11(a)(iii) hereof. 
  
 “Stock Acquisition
Date” shall mean the first date of public announcement (which, for purposes of this definition and Section 23, shall include, without limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the Company or an
Acquiring Person that an Acquiring Person has become such. 
  
 “Subsidiary” shall mean, with reference to any Person, any corporation or other Person of which an amount of voting securities sufficient to elect at least a majority of the directors or other persons performing similar functions
is beneficially owned, directly or indirectly, by such Person, or otherwise controlled by such Person. 
  
 “Substitution Period” shall have the meaning set forth in Section 11(a)(iii) hereof. 
  
 “Summary of Rights” shall mean the Summary of Rights sent pursuant
to Section 3(b) hereof. 
  
 “Trading Day” with
respect to a security shall mean a day on which the principal national securities exchange on which such security is listed or admitted to trading is open for the transaction of business, or, if such security is not listed or admitted to trading on
any national securities exchange but is quoted by NASDAQ, a day on which NASDAQ reports trades, or, if such security is not so quoted, a Business Day. 
  
 “Triggering Event” shall mean any Flip-In Event or any Flip-Over Event. 
  
 Section 2. Appointment of Rights Agent. The Company hereby appoints the Rights Agent (i) to act as agent for the
Company and (ii) to take certain actions in respect of the holders of the Rights (who, in accordance with Section 3 hereof, shall prior to the Distribution Date also be the holders of the Common Stock) (although it is expressly agreed that
the Rights Agent shall not act as agent for such holders) in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable. 
  
 Section 3. Issue of Rights
Certificates. 
  
 (a) Until the Distribution Date,
(x) the Rights will be evidenced (subject to the provisions of paragraph (b) of this Section 3) by the certificates for Common Stock registered in 

  

 -7- 

 
the names of the holders of the Common Stock and not by separate certificates, and (y) the Rights will be transferable only in connection with the
transfer of the underlying shares of Common Stock (including a transfer to the Company). As soon as practicable after the Distribution Date, the Rights Agent will send by first-class, insured, postage prepaid mail, to each record holder of the
Common Stock as of the close of business on the Distribution Date (other than any Person referred to in the first sentence of Section 7(e)), at the address of such holder shown on the records of the Company, one or more Rights Certificates,
evidencing one Right for each share of Common Stock so held, subject to adjustment as provided herein. In the event that an adjustment in the number of Rights per share of Common Stock has been made pursuant to Section 11(p) hereof, at the time
of distribution of the Rights Certificates, the Company shall make the necessary and appropriate rounding adjustments (in accordance with Section 14(a) hereof) so that Rights Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights. As of and after the Distribution Date, the Rights will be evidenced solely by such Rights Certificates. 
  
 (b) The Company will send a copy of a Summary of Rights, in substantially the form attached hereto as Exhibit C, by
first-class, postage prepaid mail, to any record holder of Common Stock who requests a copy thereof. With respect to certificates for Common Stock that do not bear the legend provided for in Section 3(c) that have Rights associated therewith,
until the Distribution Date or the earlier surrender for transfer thereof or the Expiration Date, the Rights associated with the shares of Common Stock represented by such certificates shall be evidenced by such certificates for Common Stock
together with the Summary of Rights, and the registered holders of the Common Stock shall also be the registered holders of the associated Rights. Until the earlier of the Distribution Date or the Expiration Date, the transfer of any of the
certificates for Common Stock outstanding as of the Effective Time, with or without a copy of the Summary of Rights, shall also constitute the transfer of the Rights associated with the Common Stock represented by such certificates. 
  
 (c) Rights shall be issued in respect of all shares of Common Stock that are
(i) issued in the Conversion or (ii) issued (whether originally issued or delivered from the Company’s treasury) after the Effective Time but prior to the earlier of the Distribution Date or the Expiration Date or, in certain
circumstances provided in Section 22 hereof, after the Distribution Date. Certificates issued representing such shares of Common Stock that are issued in the Conversion or shall so become outstanding or shall be transferred or exchanged after
the Effective Time but prior to the earlier of the Distribution Date or the Expiration Date shall also be deemed to be certificates for Rights, and shall bear the following legend: 
  
 This certificate also evidences and entitles the holder hereof to certain Rights as set forth in the Rights
Agreement between Hercules Offshore, Inc. (the “Company”) and American Stock Transfer & Trust Company (the “Rights Agent”) dated as of [            
        ], 2005 as it may from time to time be supplemented or amended (the “Rights Agreement”), the terms of which are hereby incorporated herein by reference and a copy of which is on file
at the principal offices of the Company. Under certain circumstances, as set forth in the Rights Agreement, such Rights may be redeemed, may be exchanged, may expire or may be evidenced by separate certificates and will no longer be evidenced by
this certificate. The Company will mail to the holder of this certificate a copy of 

  

 -8- 

 
the Rights Agreement, as in effect on the date of mailing, without charge promptly after receipt of a written request therefor. Under certain
circumstances set forth in the Rights Agreement, Rights beneficially owned by or transferred to any Person who is, was or becomes an Acquiring Person or an Affiliate or Associate thereof (as such terms are defined in the Rights Agreement), and
certain transferees thereof, will become null and void and will no longer be transferable. 
  
 With respect to such certificates containing the foregoing legend, until the earlier of the Distribution Date or the Expiration Date, the Rights associated with the Common Stock represented by such certificates shall
be evidenced by such certificates alone, and registered holders of Common Stock shall also be the registered holders of the associated Rights, and the transfer of any of such certificates shall also constitute the transfer of the Rights associated
with the Common Stock represented by such certificates. 
  
 Section 4. Form of Rights Certificates. 
  
 (a)
The Rights Certificates (and the forms of election to purchase and of assignment to be printed on the reverse thereof), when, as and if issued, shall be substantially in the form set forth in Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any applicable law
or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange or quotation system on which the Rights may from time to time be listed or quoted, or to conform to usage. Subject to the provisions of
Section 11 and Section 22 hereof, the Rights Certificates, whenever issued, shall be dated as of the Effective Time and on their face shall entitle the holders thereof to purchase such number of Fractional Shares of Preferred Stock as
shall be set forth therein at the price set forth therein (such exercise price per Fractional Share (or, as set forth in this Agreement, for other securities), the “Purchase Price”), but the amount and type of securities purchasable upon
the exercise of each Right and the Purchase Price thereof shall be subject to adjustment as provided herein. 
  
 (b) Any Rights Certificate issued pursuant to Section 3(a) or Section 22 hereof that represents Rights beneficially owned by a Person described
in the first sentence of Section 7(e), and any Rights Certificate issued pursuant to Section 6 or Section 11 hereof upon transfer, exchange, replacement or adjustment of any such Rights, shall contain (to the extent feasible) the
following legend, modified as applicable to apply to such Person: 
  
 The Rights represented by this Rights Certificate are or were beneficially owned by a Person who was or became an Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such terms are defined in the Rights Agreement).
Accordingly, this Rights Certificate and the Rights represented hereby [will] [have] become null and void in the circumstances and with the effect specified in Section 7(e) of such Agreement. 
  
 The provisions of Section 7(e) of this Agreement shall be operative whether or not the
foregoing legend is contained on any such Rights Certificate. The Company shall give notice to the Rights 

  

 -9- 

 
Agent promptly after it becomes aware of the existence of any Acquiring Person or any Associate or Affiliate thereof. 
  
 Section 5. Countersignature and Registration. 
  
 (a) The Rights Certificates shall be executed on behalf of the Company by its
Chairman of the Board, its President or any Vice President, either manually or by facsimile signature, and shall have affixed thereto the Company’s seal or a facsimile thereof, which shall be attested by the Secretary or an Assistant Secretary
of the Company, either manually or by facsimile signature. The Rights Certificates shall be countersigned by the Rights Agent, either manually or by facsimile signature, and shall not be valid for any purpose unless so countersigned. In case any
officer of the Company who shall have signed any of the Rights Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such Rights Certificates, nevertheless,
may be countersigned by the Rights Agent and issued and delivered by the Company with the same force and effect as though the person who signed such Rights Certificates had not ceased to be such officer of the Company; and any Rights Certificate may
be signed on behalf of the Company by any person who, at the actual date of the execution of such Rights Certificate, shall be a proper officer of the Company to sign such Rights Certificate, although at the date of the execution of this Rights
Agreement any such person was not such an officer. 
  
 (b)
Following the Distribution Date, the Rights Agent will keep or cause to be kept, at its principal office or offices designated as the appropriate place for surrender of Rights Certificates upon exercise or transfer, books for registration and
transfer of the Rights Certificates issued hereunder. Such books shall show the names and addresses of the respective holders of the Rights Certificates, the number of Rights evidenced on its face by each of the Rights Certificates and the
certificate number and the date of each of the Rights Certificates. 
  
 Section 6. Transfer, Split-Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates. 
  
 (a) Subject to the provisions of Section 4(b), Section 7(e), Section 13(d), Section 14 and Section 24 hereof, at any time after
the close of business on the Distribution Date, and at or prior to the close of business on the Expiration Date, any Rights Certificate or Rights Certificates may be transferred, split up, combined or exchanged for another Rights Certificate or
Rights Certificates, entitling the registered holder to purchase a like number of Fractional Shares of Preferred Stock (or, following a Triggering Event, Common Stock, other securities, cash or other assets, as the case may be) as the Rights
Certificate or Rights Certificates surrendered then entitled such holder (or former holder in the case of a transfer) to purchase. Any registered holder desiring to transfer, split up, combine or exchange any Rights Certificate or Rights
Certificates shall make such request in writing delivered to the Rights Agent, and shall surrender the Rights Certificate or Rights Certificates to be transferred, split up, combined or exchanged at the principal office or offices of the Rights
Agent designated for such purpose. Neither the Rights Agent nor the Company shall be obligated to take any action whatsoever with respect to the transfer of any such surrendered Rights Certificate until the registered holder shall have completed and
signed the certificate contained in the form of assignment on the reverse side of such Rights Certificate and shall have provided such additional evidence of the identity of the 

  

 -10- 

 
Beneficial Owner (or former Beneficial Owner) thereof or of the Affiliates or Associates thereof as the Company shall reasonably request. Thereupon the
Rights Agent shall, subject to Section 4(b), Section 7(e), Section 13(d), Section 14 and Section 24 hereof, countersign and deliver to the Person entitled thereto a Rights Certificate or Rights Certificates, as the case may
be, as so requested. The Company may require payment by the holder of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split-up, combination or exchange of Rights Certificates. 

 
 (b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Rights Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them, and reimbursement to the Company and the
Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Rights Certificate if mutilated, the Company will, subject to Section 4(b), Section 7(e), Section 13(d),
Section 14 and Section 24, execute and deliver a new Rights Certificate of like tenor to the Rights Agent for countersignature and delivery to the registered owner in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated.

  
 Section 7. Exercise of Rights; Purchase Price.

  
 (a) Subject to Section 7(e) hereof, the registered holder
of any Rights Certificate may exercise the Rights evidenced thereby (except as otherwise provided herein including, without limitation, the restrictions on exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a)
hereof) in whole or in part at any time after the Distribution Date upon surrender of the Rights Certificate, with the form of election to purchase and the certificate on the reverse side thereof duly completed and executed, to the Rights Agent at
the principal office or offices of the Rights Agent designated for such purpose, together with payment of the aggregate Purchase Price with respect to the total number of Fractional Shares of Preferred Stock (or other securities, cash or other
assets, as the case may be) as to which such surrendered Rights are then exercisable, at or prior to the Expiration Date. 
  
 (b) The Purchase Price for each Fractional Share of Preferred Stock pursuant to the exercise of a Right shall initially be $90, and shall be subject to
adjustment from time to time as provided in Sections 11 and 13(a) hereof and shall be payable in accordance with paragraph (c) below. 
  
 (c) Upon receipt of a Rights Certificate representing exercisable Rights, with the form of election to purchase and the certificate on the reverse side
thereof duly executed, accompanied by payment, with respect to each Right so exercised, of the Purchase Price per Fractional Share of Preferred Stock (or other shares, securities, cash or other assets, as the case may be) to be purchased as set
forth below and an amount equal to any applicable transfer tax, the Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly (i)(A) requisition from any transfer agent of the shares of Preferred Stock (or make available, if
the Rights Agent is the transfer agent for such shares) certificates for the total number of Fractional Shares of Preferred Stock to be purchased, and the Company hereby irrevocably authorizes its transfer agent to comply with all such requests, or
(B) if the Company, in its sole discretion, shall have elected to deposit the shares of Preferred Stock issuable upon exercise of the Rights hereunder 

  

 -11- 

 
with a depositary agent, requisition from the depositary agent depositary receipts representing interests in such number of Fractional Shares of Preferred
Stock as are to be purchased (in which case certificates for the shares of Preferred Stock represented by such receipts shall be deposited by the transfer agent with the depositary agent) and the Company will direct the depositary agent to comply
with such request, (ii) requisition from the Company the amount of cash, if any, to be paid in lieu of fractional shares in accordance with Section 14 hereof, (iii) after receipt of such certificates or depositary receipts, cause the
same to be delivered to or upon the order of the registered holder of such Rights Certificate, registered in such name or names as may be designated by such holder and (iv) after receipt thereof, deliver such cash, if any, to or upon the order
of the registered holder of such Rights Certificate. The payment of the Purchase Price (as such amount may be reduced pursuant to Section 11(a)(iii) hereof) may be made in cash or by certified check, cashier’s or official bank check or
bank draft payable to the order of the Company or the Rights Agent. In the event that the Company is obligated to issue other securities (including Common Stock) of the Company, pay cash and/or distribute other property pursuant to
Section 11(a) or Section 13(a) hereof, the Company will make all arrangements necessary so that such other securities, cash and/or other property are available for distribution by the Rights Agent, if and when appropriate. The Company
reserves the right to require prior to the occurrence of a Triggering Event that, upon exercise of Rights, a number of Rights be exercised so that only whole shares of Preferred Stock would be issued. 
  
 (d) In case the registered holder of any Rights Certificate shall exercise
fewer than all the Rights evidenced thereby, a new Rights Certificate evidencing Rights equivalent to the Rights remaining unexercised shall be issued by the Rights Agent and delivered to, or upon the order of, the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such holder, subject to the provisions of Section 14 hereof. 
  
 (e) Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Triggering Event, any Rights beneficially owned
by or transferred to (i) an Acquiring Person or an Associate or Affiliate of an Acquiring Person other than any such Person that became such pursuant to a Permitted Offer and the Board of Directors in good faith determines was not involved in
and did not cause or facilitate, directly or indirectly, such Triggering Event, (ii) a direct or indirect transferee of such Rights from such Acquiring Person (or any such Associate or Affiliate) who becomes a transferee after such Triggering
Event or (iii) a direct or indirect transferee of such Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with such Triggering Event and receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from such Acquiring Person (or such Affiliate or Associate) to holders of equity interests in such Acquiring Person (or such Affiliate or Associate) or to any Person with whom such Acquiring Person (or
such Affiliate or Associate) has any continuing agreement, arrangement or understanding regarding the transferred Rights or (B) a transfer that the Board of Directors of the Company determines is part of a plan, arrangement or understanding
that has as a primary purpose or effect the avoidance of this Section 7(e), shall become null and void without any further action, no holder of such Rights shall have any rights whatsoever with respect to such Rights, whether under any
provision of this Agreement or otherwise, and such Rights shall not be transferable. The Company shall use all reasonable efforts to ensure that the provisions of this Section 7(e) and Section 4(b) hereof are complied with, but shall have
no liability to any 

  

 -12- 

 
holder of Rights Certificates or other Person as a result of its failure to make any determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder. 
  
 (f) Notwithstanding
anything in this Agreement to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action with respect to a registered holder upon the occurrence of any purported exercise as set forth in this Section 7
unless such registered holder shall have (i) completed and signed the certificate contained in the form of election to purchase set forth on the reverse side of the Rights Certificate surrendered for such exercise and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the Company shall reasonably request. 
  
 Section 8. Cancellation and Destruction of Rights Certificates. All Rights Certificates surrendered for the purpose
of exercise, transfer, split-up, combination or exchange shall, if surrendered to the Company or any of its agents, be delivered to the Rights Agent for cancellation or in canceled form, or, if surrendered to the Rights Agent, shall be canceled by
it, and no Rights Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Rights Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. The Rights Agent shall deliver all canceled Rights Certificates to the Company, or shall, at the written request of the
Company, destroy such canceled Rights Certificates, and in such case shall deliver a certificate of destruction thereof to the Company. 
  
 Section 9. Reservation and Availability of Capital Stock. 
  

(a) The Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued shares, or out of its
authorized and issued shares held in its treasury, the number of shares of Preferred Stock (and, following the occurrence of a Triggering Event, Common Stock and/or other securities) that, as provided in this Agreement, including
Section 11(a)(iii) hereof, will be sufficient to permit the exercise in full of all outstanding Rights. 
  
 (b) So long as any shares of Preferred Stock (and, following the occurrence of a Triggering Event, Common Stock and/or other securities) issuable and
deliverable upon the exercise of the Rights are listed on any national securities exchange or quoted on any trading system, the Company shall use its best efforts to cause, from and after such time as the Rights become exercisable, all shares
reserved for such issuance to be listed on such exchange, or quoted on such system, upon official notice of issuance upon such exercise. Following the occurrence of a Triggering Event, the Company will use its best efforts to list (or continue the
listing of) the Rights and the securities issuable and deliverable upon the exercise of the Rights on one or more national securities exchanges or to cause the Rights and the securities purchasable upon exercise of the Rights to be reported by
NASDAQ or such other transaction reporting system then in use. 
  
 (c) The Company shall use its best efforts to (i) prepare and file, as soon as practicable following the first occurrence of a Flip-In Event or, if applicable, as soon as 

  

 -13- 

 
practicable following the earliest date after the first occurrence of a Flip-In Event on which the consideration to be delivered by the Company upon exercise
of the Rights has been determined pursuant to this Agreement (including in accordance with Section 11(a)(iii) hereof), a registration statement on an appropriate form under the Securities Act with respect to the securities purchasable upon
exercise of the Rights, (ii) cause such registration statement to become effective as soon as practicable after such filing, and (iii) cause such registration statement to remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the earlier of (A) the date as of which the Rights are no longer exercisable for such securities and (B) the Expiration Date. The Company will also take such action as may be appropriate under, or
to ensure compliance with, the securities or “blue sky” laws of the various states in connection with the exercisability of the Rights. The Company may temporarily suspend, for a period of time not to exceed 90 days after the date set
forth in clause (i) of the first sentence of this Section 9(c), the exercisability of the Rights in order to prepare and file such registration statement and permit it to become effective. In addition, if the Company shall determine that
the Securities Act requires an effective registration statement under the Securities Act following the Distribution Date, the Company may temporarily suspend the exercisability of the Rights until such time as such a registration statement has been
declared effective. Upon any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in
effect. Notwithstanding any provision of this Agreement to the contrary, the Rights shall not be exercisable in any jurisdiction if the requisite qualification in such jurisdiction shall not have been obtained, the exercise thereof shall not be
permitted under applicable law or any required registration statement shall not have been declared effective. 
  
 (d) The Company covenants and agrees that it will take all such action as may be necessary to ensure that all Fractional Shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock and/or other securities) delivered upon exercise of Rights shall, at the time of delivery of the certificates for such shares (subject to payment of the Purchase Price), be duly and
validly authorized and issued and fully paid and nonassessable. 
  
 (e) The Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges that may be payable in respect of the issuance or delivery of the Rights Certificates and of any
certificates for a number of Fractional Shares of Preferred Stock (or Common Stock and/or other securities, as the case may be) upon the exercise of Rights. The Company shall not, however, be required to pay any transfer tax that may be payable in
respect of any transfer or delivery of Rights Certificates to a Person other than, or the issuance or delivery of a number of Fractional Shares of Preferred Stock (or Common Stock and/or other securities, as the case may be) in respect of a name
other than that of, the registered holder of the Rights Certificates evidencing Rights surrendered for exercise or to issue or deliver any certificates for a number of Fractional Shares of Preferred Stock (or Common Stock and/or other securities, as
the case may be) in a name other than that of the registered holder upon the exercise of any Rights until such tax shall have been paid (any such tax being payable by the holder of such Rights Certificate at the time of surrender) or until it has
been established to the Company’s satisfaction that no such tax is due. 
  

 -14- 

 Section 10. Preferred Stock Record Date. Each Person in whose name any certificate for a number of
Fractional Shares of Preferred Stock (or Common Stock and/or other securities, as the case may be) is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of such shares (fractional or otherwise) of
Preferred Stock (or Common Stock and/or other securities, as the case may be) represented thereby on, and such certificate shall be dated, the date upon which the Rights Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and all applicable transfer taxes) was made; provided, however, that if the date of such surrender and payment is a date upon which the Preferred Stock (or Common Stock and/or other securities, as the case may be) transfer
books of the Company are closed, such Person shall be deemed to have become the record holder of such shares (fractional or otherwise) on, and such certificate shall be dated, the next succeeding Business Day on which the Preferred Stock (or Common
Stock and/or other securities, as the case may be) transfer books of the Company are open. Prior to the exercise of the Rights evidenced thereby, the holder of a Rights Certificate, as such, shall not be entitled to any rights of a stockholder of
the Company with respect to shares for which the Rights shall be exercisable, including, without limitation, the right to vote, to receive dividends or other distributions or to exercise any preemptive rights, and shall not be entitled to receive
any notice of any proceedings of the Company, except as provided herein. 
  
 Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares or other securities subject to purchase upon exercise of each Right and
the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11. 
  
 (a) (i) In the event the Company shall at any time after the Effective Time (A) declare a dividend on the outstanding shares of
Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding shares of Preferred Stock, (C) combine the outstanding shares of Preferred Stock into a smaller number of shares or (D) otherwise reclassify the
outstanding shares of Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and
Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or capital
stock or other securities, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the
aggregate number and kind of shares of Preferred Stock or capital stock or other securities, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the
Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs that would require an adjustment under both this
Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof. 
  

 -15- 

 (ii) Subject to Sections 23 and 24 of this Agreement, in the event any Person shall, at
any time after the Effective Time, become an Acquiring Person, unless the event causing such Person to become an Acquiring Person is (1) a Flip-Over Event or (2) an acquisition of shares of Common Stock pursuant to a Permitted Offer
(provided that this clause (2) shall cease to apply if such Acquiring Person thereafter becomes the Beneficial Owner of any additional shares of Common Stock other than pursuant to such Permitted Offer or a transaction set forth in
Section 13(a) or 13(d) hereof), then, promptly following the occurrence of such event, (x) the Purchase Price shall be adjusted to be the Purchase Price immediately prior to the first occurrence of a Flip-In Event multiplied by the number
of Fractional Shares of Preferred Stock for which a Right was exercisable immediately prior to such first occurrence and (y) each holder of a Right (except as provided below in Section 11(a)(iii) and in Section 7(e) hereof) shall
thereafter have the right to receive, upon exercise thereof at a price equal to the Purchase Price in accordance with the terms of this Agreement, in lieu of the shares of Preferred Stock otherwise purchasable thereunder, such number of shares of
Common Stock of the Company as shall equal the result obtained by dividing the Purchase Price by 50% of the Current Market Price per share of Common Stock on the date of such first occurrence (such number of shares, the “Adjustment
Shares”); provided that the Purchase Price and the number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence. 
  
 (iii) In the event that the number of shares of Common Stock
that are authorized by the Company’s certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with
the foregoing subparagraph (ii) of this Section 11(a), the Company shall, to the extent permitted by applicable law and regulation, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of
a Right (computed using the Current Market Price used to determine the number of Adjustment Shares) (the “Current Value”) over (2) the Purchase Price (such excess is herein referred to as the “Spread”), and (B) with
respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon the exercise of the Rights and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or
other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock (including, without limitation, the Preferred Stock) that the Board of Directors of the Company has determined to have the same
value as shares of Common Stock (such shares of preferred stock are herein referred to as “Common Stock Equivalents”)), (4) debt securities of the Company, (5) other assets or (6) any combination of the foregoing, having an
aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the
Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Flip-In Event and (y) the date
on which the Company’s right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the “Flip-In Trigger Date”), then the Company shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of 

  

 -16- 

 
Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of
Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30-day period set forth above may be extended to the
extent necessary, but not more than 90 days after the Flip-In Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the “Substitution
Period”). To the extent that the Company or the Board of Directors determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to
Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional
shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Stock shall be the Current
Market Price per share of the Common Stock on the Flip-In Trigger Date and the value of any Common Stock Equivalent shall be deemed to have the same value as the Common Stock on such date. 
  
 (b) In case the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having substantially the same rights, privileges and
preferences as the shares of Preferred Stock (“Equivalent Preferred Stock”)) or securities convertible into Preferred Stock or Equivalent Preferred Stock at a price per share of Preferred Stock or per share of Equivalent Preferred Stock
(or having a conversion price per share, if a security convertible into Preferred Stock or Equivalent Preferred Stock) less than the Current Market Price per share of Preferred Stock on such record date, the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Preferred Stock outstanding on such record date, plus the number
of shares of Preferred Stock that the aggregate offering price of the total number of shares of Preferred Stock and/or Equivalent Preferred Stock so to be offered (and/or the aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such Current Market Price, and the denominator of which shall be the number of shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or Equivalent Preferred
Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid by delivery of consideration, part or all of which may be in a form
other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights
Agent and the holders of the Rights. Shares of Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record
date is fixed, and in the event that such rights or warrants 

  

 -17- 

 
are not so issued, the Purchase Price shall be adjusted to be the Purchase Price that would then be in effect if such record date had not been fixed.

  
 (c) In case the Company shall fix a record date for a
distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash (other than a
regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend payable in stock other than Preferred Stock) or subscription rights or
warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the Current Market Price per share of Preferred Stock on such record date, less the fair market value (as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights Agent) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to a share of Preferred Stock
and the denominator of which shall be such Current Market Price per share of Preferred Stock. Such adjustments shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Purchase
Price shall be adjusted to be the Purchase Price that would have been in effect if such record date had not been fixed. 
  
 (d) (i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the “Current Market
Price” per share of Common Stock of a Person on any date shall be deemed to be the average of the daily Closing Prices per share of such Common Stock for the 30 consecutive Trading Days immediately prior to such date, and for purposes of
computations made pursuant to Section 11(a)(iii) hereof, the “Current Market Price” per share of Common Stock on any date shall be deemed to be the average of the daily Closing Prices per share of such Common Stock for the 10
consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of Common Stock is determined during a period following the announcement of (A) a dividend or
distribution on such Common Stock other than a regular quarterly cash dividend or the dividend of the Rights, or (B) any subdivision, combination or reclassification of such Common Stock, and the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or reclassification, shall not have occurred prior to the commencement of the requisite 30 Trading Day or 10 Trading Day period, as set forth above, then, and in each such case, the
Current Market Price shall be properly adjusted to take into account ex-dividend trading. If the Common Stock is not publicly held or not so listed or traded, “Current Market Price” per share shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes. 
  
 (ii) For the purpose of any computation hereunder, the “Current Market
Price” per share (or Fractional Share) of Preferred Stock shall be determined in the same manner as set forth above for the Common Stock in clause (i) of this Section 11(d) (other than the last sentence thereof). If the Current Market
Price per share (or Fractional Share) of Preferred Stock cannot be determined in the manner provided above or if the Preferred Stock is not publicly held or listed 

  

 -18- 

 
or traded in a manner described in clause (i) of this Section 11(d), the “Current Market Price” per share of Preferred Stock shall be
conclusively deemed to be an amount equal to 100 (as such number may be appropriately adjusted for such events as stock splits, stock dividends and recapitalizations with respect to the Common Stock occurring after the date of this Agreement)
multiplied by the Current Market Price per share of the Common Stock. If neither the Common Stock nor the Preferred Stock is publicly held or so listed or traded, Current Market Price per share of the Preferred Stock shall mean the fair value per
share as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes. For all purposes of this Agreement, the Current
Market Price of a Fractional Share of Preferred Stock shall be equal to the Current Market Price of one share of Preferred Stock divided by 100. 
  
 (e) Anything herein to the contrary notwithstanding, no adjustment in the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Purchase Price; provided, however, that any adjustments that by reason of this Section 11(e) are not required to be made shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the nearest cent or to the nearest ten-thousandth of a share of Common Stock or other share or to the nearest ten-thousandth of a Fractional Share of Preferred Stock, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment required by this Section 11 shall be made no later than the earlier of (i) three years from the date of the transaction which mandates such adjustment or
(ii) the Expiration Date. 
  
 (f) If as a result of an
adjustment made pursuant to Section 11(a) or Section 13(a) hereof, the holder of any Right thereafter exercised shall become entitled to receive in respect of such Right any shares of capital stock other than Preferred Stock, thereafter
the number of such other shares so receivable upon exercise of any Right and the Purchase Price thereof shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to
the Preferred Stock contained in Sections 11(a), (b), (c), (e), (f), (g), (h), (i), (j), (k) and (m) hereof, and the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred Stock shall apply on like terms to any
such other shares. 
  
 (g) All Rights originally issued by the
Company subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right to purchase, at the adjusted Purchase Price, the number of Fractional Shares of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein. 
  
 (h) Unless the Company shall have exercised its election as provided in Section 11(i) hereof, upon each adjustment of the Purchase Price as a result of the calculations made in Sections 11(b) and (c) hereof, each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Purchase Price, that number of Fractional Shares of Preferred Stock (calculated to the nearest one ten-thousandth of a Fractional
Share) obtained by (i) multiplying (x) the number of Fractional Shares of Preferred Stock covered by a Right immediately prior to this adjustment by (y) the Purchase Price in effect immediately prior to such adjustment of the Purchase
Price, and (ii) dividing the 

  

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product so obtained by the Purchase Price in effect immediately after such adjustment of the Purchase Price. 
  
 (i) The Company may elect, on or after the date of any adjustment of the
Purchase Price, to adjust the number of Rights in lieu of any adjustment in the number of Fractional Shares of Preferred Stock purchasable upon the exercise of a Right. Each of the Rights outstanding after the adjustment in the number of Rights
shall be exercisable for the number of Fractional Shares of Preferred Stock for which a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest ten-thousandth) obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to adjust the number of Rights, indicating the record date for the adjustment, and, if known at the time, the amount of the adjustment to be made. This record date may be the date on which the
Purchase Price is adjusted or any day thereafter, but, if the Rights Certificates have been issued, shall be at least 10 days later than the date of the public announcement. If Rights Certificates have been issued, upon each adjustment of the number
of Rights pursuant to this Section 11(i), the Company shall, as promptly as practicable, cause to be distributed to holders of record of Rights Certificates on such record date Rights Certificates evidencing, subject to Section 14 hereof,
the additional Rights to which such holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to be distributed to such holders of record in substitution and replacement for the Rights Certificates held
by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Company, new Rights Certificates evidencing all the Rights to which such holders shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided for herein (and may bear, at the option of the Company, the adjusted Purchase Price) and shall be registered in the names of the holders of record of Rights Certificates
on the record date specified in the public announcement. 
  
 (j)
Irrespective of any adjustment or change in the Purchase Price or the number of Fractional Shares of Preferred Stock issuable upon the exercise of the Rights, the Rights Certificates theretofore and thereafter issued may continue to express the
Purchase Price per Fractional Share and the number of Fractional Shares that were expressed in the initial Rights Certificates issued hereunder. 
  
 (k) Before taking any action that would cause an adjustment reducing the Purchase Price below the then par value, if any, or the stated capital of the
number of Fractional Shares of Preferred Stock or of the number of shares of Common Stock or other securities issuable upon exercise of a Right, the Company shall take any corporate action that may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and nonassessable such number of Fractional Shares of Preferred Stock or such number of shares of Common Stock or other securities at such adjusted Purchase Price. 
  
 (l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a specified event, the Company may elect to defer until the occurrence of such event the issuance to the holder of any Right exercised after such record date the number of
Fractional Shares of Preferred Stock and other capital stock 

  

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or securities of the Company, if any, issuable upon such exercise over and above the number of Fractional Shares of Preferred Stock and other capital stock
or securities of the Company, if any, issuable upon such exercise on the basis of the Purchase Price in effect prior to such adjustment; provided, however, that the Company shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder’s right to receive such additional shares (fractional or otherwise) or securities upon the occurrence of the event requiring such adjustment. 
  
 (m) Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled to make such reductions
in the Purchase Price, in addition to those adjustments expressly required by this Section 11, as and to the extent that in their good faith judgment the Board of Directors of the Company shall determine to be advisable in order that any
(i) consolidation or subdivision of the Preferred Stock, (ii) issuance wholly for cash of any shares of Preferred Stock at less than the current market price, (iii) issuance wholly for cash of shares of Preferred Stock or securities
that by their terms are convertible into or exchangeable for shares of Preferred Stock, (iv) stock dividends or (v) issuance of rights, options or warrants referred to in this Section 11 hereafter made by the Company to holders of its
Preferred Stock shall not be taxable to such stockholders. 
  
 (n)
The Company covenants and agrees that it shall not, at any time that there is an Acquiring Person, (i) consolidate with any other Person, (ii) merge with or into any other Person or (iii) sell, lease or transfer (or permit one or more
Subsidiaries to sell, lease or transfer), in one transaction or a series of related transactions, assets, earning power or cash flow aggregating more than 50% of the assets, earning power or cash flow of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons, if (x) at the time of or immediately after such consolidation, merger, sale, lease or transfer there are any rights, warrants or other instruments or securities of the Company or any other Person
outstanding or agreements, arrangements or understandings in effect that would substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights, (y) prior to, simultaneously with or immediately after such
consolidation, merger, sale, lease or transfer, the stockholders or other equity owners of the Person who constitutes, or would constitute, the “Principal Party” for purposes of Section 13(a) hereof shall have received a distribution
of Rights previously owned by such Person or any of its Affiliates or Associates, or (z) the identity, form or nature of organization of the Principal Party (including, without limitation, the selection of the Person that will be the Principal
Party as a result of the Company’s entering into one or more consolidations, mergers, sales, leases or transfers with more than one party) would preclude or limit the exercise of Rights or otherwise diminish substantially or eliminate the
benefits intended to be afforded by the Rights. 
  
 (o) The
Company covenants and agrees that, after the Distribution Date, it will not, except as permitted by Section 23, Section 24 or Section 27 hereof, take (or permit any Subsidiary to take) any action if the purpose of such action is to,
or if at the time such action is taken it is reasonably foreseeable that such action will, diminish substantially or eliminate the benefits intended to be afforded by the Rights. 
  
 (p) Notwithstanding Section 3(c) hereof or any other provision of this Agreement to the contrary, in the event that the
Company shall at any time after the Effective Time and prior to the Distribution Date (i) declare a dividend on the outstanding shares of 

  

 -21- 

 
Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding shares of Common Stock, (iii) combine the outstanding shares of
Common Stock into a smaller number of shares or (iv) otherwise reclassify the outstanding shares of Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or
surviving corporation), the number of Rights associated with each share of Common Stock then outstanding, or issued or delivered thereafter with Rights, shall be proportionately adjusted so that the number of Rights thereafter associated with each
share of Common Stock following any such event shall equal the result obtained by multiplying the number of Rights associated with each share of Common Stock immediately prior to such event by a fraction (the “Adjustment Fraction”), the
numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to the occurrence of the event and the denominator of which shall be the total number of shares of Common Stock outstanding immediately following
the occurrence of such event. In lieu of such adjustment in the number of Rights associated with one share of Common Stock, the Company may elect to adjust the number of Fractional Shares of Preferred Stock purchasable upon the exercise of one Right
and the Purchase Price. If the Company makes such election, the number of Rights associated with one share of Common Stock shall remain unchanged, and the number of Fractional Shares of Preferred Stock purchasable upon exercise of one Right and the
Purchase Price shall be proportionately adjusted so that (i) the number of Fractional Shares of Preferred Stock purchasable upon exercise of a Right following such adjustment shall equal the product of the number of Fractional Shares of
Preferred Stock purchasable upon exercise of a Right immediately prior to such adjustment multiplied by the Adjustment Fraction and (ii) the Purchase Price per Fractional Share of Preferred Stock following such adjustment shall remain
unchanged, with the effect that the amount payable to exercise each Right will be changed to be equal the product of the Purchase Price immediately prior to such adjustment multiplied by the Adjustment Fraction. 
  
 Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11 or Section 13 hereof, the Company shall (a) promptly prepare a certificate setting forth such adjustment and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent, and with each transfer agent for the Preferred Stock and the Common Stock, a copy of such certificate and (c) mail a brief summary thereof to each registered holder of a Rights
Certificate (or, if prior to the Distribution Date, to each registered holder of a certificate representing shares of Common Stock) in accordance with Section 26 hereof. The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained. 
  
 Section
13. Consolidation, Merger or Sale or Transfer of Assets, Cash Flow or Earning Power. 
  
 (a) In the event that, from and after the time an Acquiring Person has become such, directly or indirectly, (x) the Company shall consolidate with, or merge with and into, any other Person, and the Company shall
not be the continuing or surviving corporation of such consolidation or merger, (y) any Person shall consolidate with, or merge with or into, the Company, and the Company shall be the continuing or surviving corporation of such consolidation or
merger, and, in connection with such consolidation or merger, all or part of the outstanding shares of Common Stock shall be changed into or exchanged for stock or other 

  

 -22- 

 
securities of the Company or any other Person or cash or any other property, or (z) the Company shall sell, lease or otherwise transfer (or one or more
of its Subsidiaries shall sell, lease or otherwise transfer), in one transaction or a series of related transactions, assets, cash flow or earning power aggregating more than 50% of the assets, cash flow or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons (other than the Company or any wholly owned Subsidiary of the Company or any combination thereof in one or more transactions each of which complies (and all of which together comply) with
Section 11(o) hereof), then, and in each such case (except as may be contemplated by Section 13(d) hereof), proper provision shall be made so that: (i) the Purchase Price shall be adjusted to be the Purchase Price immediately prior to
the first occurrence of a Triggering Event multiplied by the number of Fractional Shares of Preferred Stock for which a Right was exercisable immediately prior to such first occurrence; (ii) on and after the Distribution Date, each holder of a
Right, except as provided in Section 7(e) hereof, shall thereafter have the right to receive, upon the exercise thereof at the Purchase Price in accordance with the terms of this Agreement, in lieu of shares of Preferred Stock or Common Stock
of the Company, such number of validly authorized and issued, fully paid, nonassessable and freely tradeable shares of Common Stock of the Principal Party (as such term is hereinafter defined), not subject to any liens, encumbrances, rights of first
refusal or other adverse claims, as shall be equal to the result obtained by dividing the Purchase Price by 50% of the Current Market Price per share of the Common Stock of such Principal Party on the date of consummation of such Flip-Over Event;
provided that the Purchase Price and the number of shares of Common Stock of such Principal Party issuable upon exercise of each Right shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of
such first occurrence of a Triggering Event or after the date of such Flip-Over Event, as applicable; (iii) such Principal Party shall thereafter be liable for, and shall assume, by virtue of such Flip-Over Event, all the obligations and duties
of the Company pursuant to this Agreement; (iv) the term “Company” shall thereafter be deemed to refer to such Principal Party, it being specifically intended that the provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Flip-Over Event; (v) such Principal Party shall take such steps (including, but not limited to, the reservation of a sufficient number of shares of its Common Stock) in connection with the
consummation of any such transaction as may be necessary to assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to its shares of Common Stock thereafter deliverable upon the exercise of the
Rights; and (vi) the provisions of Section 11(a)(ii) hereof shall be of no effect following the occurrence of any Flip-Over Event. 
  
 (b) “Principal Party” shall mean 
  
 (i) in the case of any transaction described in clause (x) or (y) of the first sentence of Section 13(a), (A) the
Person that is the issuer of any securities into which shares of Common Stock of the Company are converted in such merger or consolidation, or, if there is more than one such issuer, the issuer the Common Stock of which has the greatest aggregate
market value, or (B) if no securities are so issued, (x) the Person that survives such consolidation or is the other party to the merger and survives such merger, or, if there is more than one such Person, the Person the Common Stock of
which has the greatest aggregate market value or (y) if the Person that is the other party to the merger does not survive the merger, the Person that does survive the merger (including the Company if it survives); and 
  

 -23- 

 (ii) in the case of any transaction described in clause (z) of the first sentence of
Section 13(a), the Person that is the party receiving the greatest portion of the assets or earning power transferred pursuant to such transaction or transactions, or, if each Person that is a party to such transaction or transactions receives
the same portion of the assets or earning power so transferred, or if the Person receiving the greatest portion of the assets or earning power cannot be determined, the Person the Common Stock of which has the greatest aggregate market value;

  
 provided, however, that in any such case, if the Common Stock of such
Person is not at such time and has not been continuously over the preceding twelve-month period registered under Section 12 of the Exchange Act, and if (1) such Person is a direct or indirect Subsidiary of another Person the Common Stock
of which is and has been so registered, “Principal Party” shall refer to such other Person; (2) such Person is a Subsidiary, directly or indirectly, of more than one Person, the Common Stocks of all of which are and have been so
registered, “Principal Party” shall refer to whichever of such Persons is the issuer of the Common Stock having the greatest aggregate market value; and (3) such Person is owned, directly or indirectly, by a joint venture formed by
two or more Persons that are not owned, directly or indirectly, by the same Person, the rules set forth in (1) and (2) above shall apply to each of the chains of ownership having an interest in such joint venture as if such party were a
“Subsidiary” of both or all of such joint venturers and the Principal Parties in each such chain shall bear the obligations set forth in this Section 13 in the same ratio as their direct or indirect interests in such Person bear to
the total of such interests. 
  
 (c) The Company shall not
consummate any Flip-Over Event unless each Principal Party (or Person that may become a Principal Party as a result of such Flip-Over Event) shall have a sufficient number of authorized shares of its Common Stock that have not been issued or
reserved for issuance to permit the exercise in full of the Rights in accordance with this Section 13 and unless prior thereto the Company and each such Principal Party shall have executed and delivered to the Rights Agent a supplemental
agreement providing for the terms set forth in paragraphs (a) and (b) of this Section 13 and further providing that, as soon as practicable after the date of such Flip-Over Event, the Principal Party at its own expense will

  
 (i) prepare and file a registration statement
under the Securities Act with respect to the Rights and the securities purchasable upon exercise of the Rights on an appropriate form, and will use its best efforts to cause such registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with a prospectus at all times meeting the requirements of the Securities Act) until the Expiration Date; 
  
 (ii) use its best efforts to qualify or register the Rights and the securities purchasable upon exercise of
the Rights under the “blue sky” laws of such jurisdictions as may be necessary or appropriate; 
  
 (iii) use its best efforts, if the Common Stock of the Principal Party is or shall become listed on a national securities exchange, to
list (or continue the listing of) the Rights and the securities purchasable upon exercise of the Rights on such securities exchange and, if the Common Stock of the Principal Party shall not be listed on a 

  

 -24- 

 
national securities exchange, to cause the Rights and the securities purchasable upon exercise of the Rights to be reported by NASDAQ or such other
transaction reporting system then in use; and 
  
 (iv) deliver to holders of the Rights historical financial statements for the Principal Party and each of its Affiliates that comply in all respects with the requirements for registration on Form 10 under the Exchange Act. 
  
 The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Flip-Over Event shall occur at any time after the occurrence of a Flip-In Event, the Rights that have not theretofore been exercised shall thereafter become exercisable in the manner
described in Section 13(a). 
  
 (d) Notwithstanding anything
in this Agreement to the contrary, Section 13 shall not be applicable to a transaction described in subparagraphs (x) and (y) of Section 13(a) if (i) such transaction is consummated with a Person or Persons who acquired
shares of Common Stock pursuant to a Permitted Offer (or a wholly owned subsidiary of any such Person or Persons), (ii) the price per share of Common Stock offered in such transaction is not less than the price per share of Common Stock paid to
all holders of Common Stock whose shares were purchased pursuant to such Permitted Offer, and (iii) the form of consideration being offered to the remaining holders of shares of Common Stock pursuant to such transaction is the same as the form
of consideration paid pursuant to such Permitted Offer. Upon consummation of any such transaction contemplated by this Section 13(d), all Rights hereunder shall expire. 
  
 Section 14. Fractional Rights and Fractional Shares. 
  
 (a) The Company shall not be required to issue fractions of Rights, except prior to the Distribution Date as provided in
Section 11(p) hereof, or to distribute Rights Certificates or scrip evidencing fractional Rights. In lieu of such fractional Rights, there shall be paid to the registered holders of the Rights Certificates with regard to which such fractional
Rights would otherwise be issuable, an amount in cash equal to the same fraction of the Closing Price of one Right for the Trading Day immediately prior to the date on which such fractional Rights would have been otherwise issuable. 
  
 (b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than, except as provided in Section 7(c) hereof, fractions that are integral multiples of a Fractional Share of Preferred Stock) upon exercise of the Rights or to distribute certificates or scrip evidencing fractional
shares of Preferred Stock (other than, except as provided in Section 7(c) hereof, fractions that are integral multiples of a Fractional Share of Preferred Stock). Interests in fractions of shares of Preferred Stock in integral multiples of a
Fractional Share of Preferred Stock may, at the election of the Company in its sole discretion, be evidenced by depositary receipts, pursuant to an appropriate agreement between the Company and a depositary selected by it, provided that such
agreement shall provide that the holders of such depositary receipts shall have all the rights, privileges and preferences to which they are entitled as beneficial owners of the shares of Preferred Stock represented by such depositary receipts. In
lieu of fractional shares of Preferred Stock that are not integral multiples of a Fractional Share of Preferred Stock, the Company may pay to the registered holders of Rights 

  

 -25- 

 
Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of one one-hundredth of the Closing Price
of a share of Preferred Stock for the Trading Day immediately prior to the date of such exercise. 
  
 (c) Following the occurrence of a Triggering Event, the Company shall not be required to issue fractions of shares of Common Stock upon exercise of the
Rights or to distribute certificates or scrip evidencing fractional shares of Common Stock. In lieu of fractional shares of Common Stock, the Company may pay to the registered holders of Rights Certificates at the time such Rights are exercised as
herein provided an amount in cash equal to the same fraction of the Closing Price of one share of Common Stock for the Trading Day immediately prior to the date of such exercise. 
  
 (d) The holder of a Right by the acceptance of the Right expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right, except as permitted by this Section 14. 
  
 Section 15. Rights of Action. All rights of action in respect of this Agreement, other than rights of action vested in the Rights Agent pursuant to Section 18 hereof, are vested in the respective
registered holders of the Rights Certificates (and, prior to the Distribution Date, the registered holders of the Common Stock) and, where applicable, the Company; and any registered holder of any Rights Certificate (or, prior to the Distribution
Date, of the Common Stock), without the consent of the Rights Agent or of the holder of any other Rights Certificate (or, prior to the Distribution Date, of the Common Stock), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise act in respect of, his right to exercise the Rights evidenced by such Rights Certificate in the manner provided in such Rights Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement and shall be entitled
to specific performance of the obligations hereunder and injunctive relief against actual or threatened violations of the obligations hereunder of any Person subject to this Agreement. After a Triggering Event, holders of Rights shall be entitled to
recover the reasonable costs and expenses, including attorneys’ fees, incurred by them in any action to enforce the provisions of this Agreement. 
  
 Section 16. Agreement of Rights Holders. Every holder of a Right by accepting the same consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that: 
  
 (a) prior to the
Distribution Date, the Rights will not be evidenced by Rights Certificates and will be transferable only in connection with the transfer of Common Stock; 
  
 (b) after the Distribution Date, the Rights Certificates will be transferable only on the registry books of the Rights Agent if surrendered at the
principal office or offices of the Rights Agent designated for such purposes, duly endorsed or accompanied by a proper instrument of transfer and with the form of assignment set forth on the reverse side thereof and the certificate contained therein
duly completed and fully executed; 
  

 -26- 

 (c) subject to Section 6(a) and Section 7(f) hereof, the Company and the Rights Agent may deem
and treat the Person in whose name a Rights Certificate (or, prior to the Distribution Date, the associated Common Stock certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Rights Certificates or the associated Common Stock certificate made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent shall be affected by any
notice to the contrary; and 
  
 (d) notwithstanding anything in
this Agreement to the contrary, neither the Company nor the Rights Agent shall have any liability to any holder of a Right or other Person as a result of its inability to perform any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree or ruling issued by a court of competent jurisdiction or by a governmental, regulatory or administrative agency or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority, prohibiting or otherwise restraining performance of such obligation; provided, however, the Company must use its best efforts to have any such order, decree or ruling lifted or otherwise overturned as
soon as possible. 
  
 Section 17. Rights Certificate Holder Not
Deemed a Stockholder. No holder, as such, of any Rights Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the holder of the number of Fractional Shares of Preferred Stock or any other securities of the Company
that may at any time be issuable upon the exercise of the Rights represented thereby, nor shall anything contained herein or in any Rights Certificate be construed to confer upon the holder of any Rights Certificate, as such, any of the rights
of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in Section 25 hereof), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such Rights Certificate shall have been exercised in accordance with
the provisions hereof. 
  
 Section 18. Concerning the Rights
Agent. 
  
 (a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and disbursements and other reasonable disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold it harmless against, any loss, liability or expense, incurred without negligence, bad faith
or willful misconduct on the part of the Rights Agent, for anything done or omitted by the Rights Agent in connection with the acceptance and administration of this Agreement, including the costs and expenses of defending against any claim of
liability in the premises. 
  
 (b) The Rights Agent shall be
protected and shall incur no liability for or in respect of any action taken, suffered or omitted by it in connection with its administration of this Agreement in reliance upon any Rights Certificate or certificate for Common Stock or for other
securities of the Company, instrument of assignment or transfer, power of attorney, endorsement, 

  

 -27- 

 
affidavit, letter, notice, direction, consent, certificate, statement or other paper or document believed by it, after proper inquiry or examination, to be
genuine and to be signed, executed and, where necessary, guaranteed, verified or acknowledged, by the proper Person or Persons. 
  
 Section 19. Merger or Consolidation or Change of Name of Rights Agent. 
  
 (a) Any corporation into which the Rights Agent or any successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any corporation succeeding to the corporate trust or stock transfer business of the Rights Agent
or any successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto; provided, however, that such corporation
would be eligible for appointment as a successor Rights Agent under the provisions of Section 21 hereof. In case at the time such successor Rights Agent shall succeed to the agency created by this Agreement, any of the Rights Certificates shall
have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of a predecessor Rights Agent and deliver such Rights Certificates so countersigned; and in case at that time any of the Rights Certificates
shall not have been countersigned, any successor Rights Agent may countersign such Rights Certificates either in the name of the predecessor or in the name of the successor Rights Agent; and in all such cases such Rights Certificates shall have the
full force provided in the Rights Certificates and in this Agreement. 
  
 (b) In case at any time the name of the Rights Agent shall be changed and at such time any of the Rights Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and
deliver Rights Certificates so countersigned; and in case at that time any of the Rights Certificates shall not have been countersigned, the Rights Agent may countersign such Rights Certificates either in its prior name or in its changed name; and
in all such cases such Rights Certificates shall have the full force provided in the Rights Certificates and in this Agreement. 
  
 Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates, by their acceptance thereof, shall be bound: 
  
 (a) The Rights Agent may consult with legal counsel (who may be legal counsel for the Company), and the opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any action taken or omitted by it in good faith and in accordance with such opinion. 
  
 (b) Whenever in the performance of its duties under this Agreement the Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the determination of “Current Market Price”) be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by the Chairman of the 

  

 -28- 

 
Board, the President, any Vice President, the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of the Company and delivered to
the Rights Agent; and such certificate shall be full authorization to the Rights Agent for any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such certificate. 
  
 (c) The Rights Agent shall be liable hereunder only for its own negligence,
bad faith or willful misconduct. In no event shall the Rights Agent be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Rights Agent has been advised of the
likelihood of such loss or damage and regardless of the form of action. 
  
 (d) The Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Rights Certificates or be required to verify the same (except as to its countersignature on such
Rights Certificates), but all such statements and recitals are and shall be deemed to have been made by the Company only. 
  
 (e) The Rights Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or execution of any Rights Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in
this Agreement or in any Rights Certificate; nor shall it be responsible for any adjustment required under the provisions of Section 11 or Section 13 hereof or responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment (except with respect to the exercise of Rights evidenced by Rights Certificates after receipt of actual knowledge of any such adjustment); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Preferred Stock or Common Stock or other securities to be issued pursuant to this Agreement or any Rights Certificate or as to whether
any shares of Preferred Stock or Common Stock or other securities will, when so issued, be validly authorized and issued, fully paid and nonassessable. 
  
 (f) The Company agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Agreement. 
  
 (g) The Rights Agent is hereby authorized and directed to accept instructions
with respect to the performance of its duties hereunder from the Chairman of the Board, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company, and to apply to such officers
for advice or instructions in connection with its duties, and it shall not be liable for any action taken or suffered to be taken by it in good faith in accordance with instructions of any such officer. 
  
 (h) The Rights Agent and any stockholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act
as fully and freely as though it 

  

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were not Rights Agent under this Agreement. Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Company or for any other
legal entity. 
  
 (i) The Rights Agent may execute and exercise
any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for any act, omission, default, neglect or misconduct
of any such attorneys or agents or for any loss to the Company resulting from any such act, omission, default, neglect or misconduct; provided, however, that reasonable care was exercised in the selection and continued employment thereof.

  
 (j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of its rights if there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably assured to it. 
  
 (k) If, with respect to any Rights Certificate surrendered to the Rights Agent for exercise or transfer, the certificate attached to the form of assignment or form of election to purchase, as the case may be, has
either not been completed or indicates an affirmative response to clause 1 and/or 2 thereof, the Rights Agent shall not take any further action with respect to such requested exercise or transfer without first consulting with the Company.

  
 Section 21. Change of Rights Agent. The Rights Agent or
any successor Rights Agent may resign and be discharged from its duties under this Agreement upon 30 days’ notice in writing mailed to the Company, and to each transfer agent of the Common Stock and the Preferred Stock, by registered or
certified mail, and to the registered holders, if any, of the Rights Certificates by first-class mail. The Company may remove the Rights Agent or any successor Rights Agent (with or without cause) upon 30 days’ notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the Common Stock and the Preferred Stock, by registered or certified mail, and to the registered holders of the Rights Certificates, if any, by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the Rights Agent. Notwithstanding the foregoing provisions of this Section 21, in no event shall the
resignation or removal of a Rights Agent be effective until a successor Rights Agent shall have been appointed and have accepted such appointment. If the Company shall fail to make such appointment within a period of 30 days after giving notice of
such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the registered holder of a Rights Certificate (who shall, with such notice, submit his Rights Certificate
for inspection by the Company), then the Rights Agent or the registered holder of any Rights Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be (a) a corporation or trust company organized and doing business under the laws of the United States or of the State of New York (or of any other state of the United States so long as such corporation or
trust company is authorized to conduct a stock transfer or corporate trust business in the State of New York), in good standing, which is authorized under such laws to exercise corporate trust or stock transfer powers and is subject to supervision
or examination by federal or state authority and which has at the time of its 

  

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appointment as Rights Agent a combined capital and surplus of at least $50,000,000 or (b) an affiliate of a corporation or trust company described in
clause (a) of this sentence. After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment, the Company shall file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Stock and the Preferred Stock, and mail a notice thereof in writing to the registered
holders, if any, of the Rights Certificates. Failure to give any notice provided for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be. 
  
 Section 22. Issuance of New Rights Certificates. Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the Company may, at its option, issue new Rights Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change in the Purchase Price and the number or kind or class of shares or other securities or property purchasable under the Rights Certificates made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance or sale of shares of Common Stock following the Distribution Date and prior to the Expiration Date, the Company (a) shall, with respect to shares of Common Stock so
issued or sold pursuant to the exercise of stock options or under any employee plan or arrangement granted or awarded on or prior to the Distribution Date, or upon the exercise, conversion or exchange of securities issued by the Company on or prior
to the Distribution Date, and (b) may, in any other case, if deemed necessary or appropriate by the Board of Directors of the Company, issue Rights Certificates representing the appropriate number of Rights in connection with such issuance or
sale; provided, however, that (i) no such Rights Certificate shall be issued if, and to the extent that, the Company shall be advised by counsel that such issuance would create a significant risk of material adverse tax consequences to
the Company or the Person to whom such Rights Certificate would be issued, and (ii) no such Rights Certificate shall be issued if, and to the extent that, appropriate adjustment shall otherwise have been made in lieu of the issuance thereof.

  
 Section 23. Redemption and Termination. 
  
 (a) The Board of Directors of the Company may, at its option, at any time
prior to the earlier of (i) the close of business on the tenth day following the first date of public announcement of the occurrence of a Flip-In Event and (ii) the Expiration Date, cause the Company to redeem all but not less than all the
then outstanding Rights at a redemption price of $.01 per Right, as such amount may be appropriately adjusted, if necessary, to reflect any stock split, stock dividend or similar transaction occurring after the Effective Time (such redemption price
being hereinafter referred to as the “Redemption Price”); provided, however, that the Rights may not be redeemed following any merger to which the Company is a party that (i) occurs when there is an Acquiring Person and
(ii) was not approved prior to such merger by the Board of Directors of the Company and by the stockholders of the Company at a stockholders’ meeting (and not by written consent). Notwithstanding anything contained in this 

  

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Agreement to the contrary, the Rights shall not be exercisable after the first occurrence of a Flip-In Event until such time as the Company’s right of
redemption hereunder has expired. The Company may, at its option, pay the Redemption Price in cash, shares of Common Stock (based on the Current Market Price of the Common Stock at the time of redemption) or any other form of consideration deemed
appropriate by the Board of Directors. 
  
 (b) Immediately upon
the effectiveness of the action of the Board of Directors of the Company ordering the redemption of the Rights (the effectiveness of which action may be conditioned on the occurrence of one or more events or on the existence of one or more facts or
may be effective at some future time), evidence of which shall be filed with the Rights Agent and without any further action and without any notice, the right to exercise the Rights will terminate and the only right thereafter of the holders of
Rights shall be to receive the Redemption Price for each Right so held. Promptly after the effectiveness of the action of the Board of Directors ordering the redemption of the Rights, the Company shall give notice of such redemption to the Rights
Agent and the registered holders of the then outstanding Rights by mailing such notice to all such holders at each holder’s last address as it appears upon the registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the Company for the Common Stock. Any notice that is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of redemption shall state the method by which the
payment of the Redemption Price will be made. 
  
 Section 24.
Exchange. 
  
 (a) The Board of Directors of the Company
may, at its option, at any time and from time to time after the occurrence of a Flip-In Event, exchange all or part of the then outstanding and exercisable Rights (which shall not include Rights that have become void pursuant to the provisions of
Section 7(e) hereof) for shares of Common Stock or Common Stock Equivalents or any combination thereof, at an exchange ratio of one share of Common Stock, or such number of Common Stock Equivalents or units representing fractions thereof as
would be deemed to have the same value as one share of Common Stock, per Right, appropriately adjusted, if necessary, to reflect any stock split, stock dividend or similar transaction occurring after the Effective Time (such exchange ratio being
hereinafter referred to as the “Exchange Ratio”). Notwithstanding the foregoing, the Board of Directors may not effect such exchange at any time after (i) any Person (other than an Exempt Person), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the shares of Common Stock then outstanding or (ii) the occurrence of a Flip-Over Event. 
  
 (b) Immediately upon the effectiveness of the action of the Board of Directors of the Company ordering the exchange of any
Rights pursuant to and in accordance with subsection (a) of this Section 24 (the effectiveness of which action may be conditioned on the occurrence of one or more events or on the existence of one or more facts or may be effective at some
future time) and without any further action and without any notice, the right to exercise such Rights shall terminate and the only right thereafter of a holder of such Rights shall be to receive that number of shares of Common Stock and/or Common
Stock Equivalents equal to the number of such Rights held by such holder multiplied by the Exchange Ratio. The Company shall promptly give public notice of any such exchange; provided, however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The Company 

  

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promptly shall mail a notice of any such exchange to all of the registered holders of such Rights at their last addresses as they appear upon the registry
books of the Rights Agent. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of exchange will state the method by which the exchange of the shares of
Common Stock and/or Common Stock Equivalents for Rights will be effected and, in the event of any partial exchange, the number of Rights that will be exchanged. Any partial exchange shall be effected as nearly pro rata as possible based on the
number of Rights (other than Rights that have become void pursuant to the provisions of Section 7(e) hereof) held by each holder of Rights. 
  
 (c) In the event that the number of shares of Common Stock that are authorized by the Company’s certificate of incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit an exchange of Rights as contemplated in accordance with this Section 24, the Company may, at its option, take all such action as may be
necessary to authorize additional shares of Common Stock for issuance upon exchange of the Rights. 
  
 (d) The Company shall not be required to issue fractions of shares of Common Stock or to distribute certificates or scrip evidencing fractional shares of
Common Stock upon exchange of the Rights. In lieu of such fractional shares of Common Stock, the Company shall pay to the registered holders of Rights with regard to which such fractional shares of Common Stock would otherwise be issuable an amount
in cash equal to the same fraction of the value of a whole share of Common Stock. For purposes of this Section 24, the value of a whole share of Common Stock shall be the Closing Price per share of Common Stock for the Trading Day immediately
prior to the date of exchange pursuant to this Section 24, and the value of any Common Stock Equivalent shall be deemed to have the same value as the Common Stock on such date. 
  
 Section 25. Notice of Certain Events. 
  
 (a) In case the Company shall propose, at any time after the Distribution Date, (i) to pay any dividend payable in
stock of any class to the holders of Preferred Stock or to make any other distribution to the holders of Preferred Stock (other than a regular quarterly cash dividend out of earnings or retained earnings of the Company), or (ii) to offer to the
holders of Preferred Stock rights or warrants to subscribe for or to purchase any additional shares of Preferred Stock or shares of stock of any class or any other securities, rights or options, or (iii) to effect any reclassification of its
Preferred Stock (other than a reclassification involving only the subdivision of outstanding shares of Preferred Stock), or (iv) to effect any consolidation or merger into or with any other Person (other than a wholly owned Subsidiary of the
Company in a transaction that complies with Section 11(o) hereof), or to effect any sale, lease or other transfer of all or substantially all the Company’s assets, cash flow or earning power to any other Person or Persons (other than a
wholly owned Subsidiary of the Company in a transaction that complies with Section 11(o) hereof), or (v) to effect the liquidation, dissolution or winding up of the Company, then, in each such case, the Company shall give to each holder of
record of a Rights Certificate, to the extent feasible and in accordance with Section 26 hereof, a notice of such proposed action, which shall specify the record date for the purposes of such stock dividend, distribution of rights or warrants,
or the date on which such reclassification, consolidation, 

  

 -33- 

 
merger, sale, lease, transfer, liquidation, dissolution or winding up is to take place and the date of participation therein by the holders of the shares of
Preferred Stock, if any such date is to be fixed, and such notice shall be so given in the case of any action covered by clause (i) or (ii) above at least 20 days prior to the record date for determining holders of the shares of Preferred
Stock for purposes of such action, and in the case of any such other action, at least 20 days prior to the date of the taking of such proposed action or the date of participation therein by the holders of the shares of Preferred Stock, whichever
shall be the earlier. The failure to give notice required by this Section 25 or any defect therein shall not affect the legality or validity of the action taken by the Company or the vote upon any such action. 
  
 (b) In case any Flip-In Event or Flip-Over Event shall occur, then
(i) the Company shall as soon as practicable thereafter give to each registered holder of a Rights Certificate (or if occurring prior to the Distribution Date, the registered holders of Common Stock), in accordance with Section 26 hereof,
a notice of the occurrence of such event, which shall specify the event and the consequences of the event to holders of Rights under Section 11(a)(ii) or Section 13(a) hereof, and (ii) all references in the preceding paragraph to
Preferred Stock shall be deemed thereafter to refer to Common Stock and/or, if appropriate, other securities. 
  
 Section 26. Notices. Notices or demands authorized by this Agreement to be given or made by the Rights Agent or by the holder of any Rights
Certificate to or on the Company shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Rights Agent) as follows: 
  
 Hercules Offshore, Inc. 
 11 Greenway Plaza, Suite 2950 
 Houston, Texas
77046 
 Attention: General Counsel 
  
 Subject to the provisions of Section 21, any notice or demand authorized by this Agreement to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Company) as follows: 
  
 American Stock Transfer & Trust Company 
 59 Maiden Lane 
 New York, New York 10038

 Attention: Corporate Trust Department 
  
 Notices or demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Rights Certificate (or, if prior to the
Distribution Date, to the holder of certificates representing shares of Common Stock) shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown on the registry
books of the Company. 
  
 Section 27. Supplements and
Amendments. Except as provided in the last sentence of this Section 27, at any time when the Rights are then redeemable, the Company may 

  

 -34- 

 
in its sole and absolute discretion and the Rights Agent shall, if the Company so directs, supplement or amend any provision of this Agreement in any respect
without the approval of any holders of Rights or holders of Common Stock. At any time when the Rights are not redeemable, except as provided in the last sentence of this Section 27, the Company may and the Rights Agent shall, if the Company so
directs, supplement or amend this Agreement without the approval of any holders of Rights in order (i) to cure any ambiguity, (ii) to correct or supplement any provision contained herein that may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time period hereunder or (iv) to change or supplement the provisions hereunder in any manner that the Company may deem necessary or desirable; provided that no such amendment or
supplement shall materially adversely affect the interests of the holders of Rights (other than an Acquiring Person or an Affiliate or Associate of an Acquiring Person); and further provided that this Agreement may not be supplemented or amended
pursuant to this sentence to lengthen (A) a time period relating to when the Rights may be redeemed or (B) any other time period unless the lengthening of such other time period is for the purpose of protecting, enhancing or clarifying the
rights of, and/or the benefits to, the holders of Rights (other than any Acquiring Person and its Affiliates and Associates). Upon the delivery of a certificate from an appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the Rights Agent shall execute such supplement or amendment; provided, however, that the Rights Agent may, but shall not be obligated to, enter into any such supplement or amendment
that affects the Rights Agent’s own rights, duties or immunities under this Agreement. Notwithstanding anything contained in this Agreement to the contrary, no supplement or amendment shall be made that decreases the Redemption Price.

  
 Section 28. Successors. All the covenants and
provisions of this Agreement by or for the benefit of the Company or the Rights Agent shall bind and inure to the benefit of their respective successors and assigns hereunder. 
  
 Section 29. Determinations and Actions by the Board of Directors, etc. For all purposes of this Agreement, any
calculation of the number of shares of Common Stock outstanding at any particular time, including for purposes of determining the particular percentage of such outstanding shares of Common Stock of which any Person is the Beneficial Owner, shall be
made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act as in effect on the date of this Agreement. The Board of Directors of the Company (or, as set forth herein, certain
specified members thereof) shall have the exclusive power and authority to administer this Agreement and to exercise all rights and powers specifically granted to the Board of Directors of the Company or to the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without limitation, the right and power to (i) interpret the provisions of this Agreement and (ii) make all determinations deemed necessary or advisable for the administration
of this Agreement (including, without limitation, a determination to redeem or not redeem the Rights or to amend this Agreement). All such actions, calculations, interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) that are done or made by the Board of Directors of the Company in good faith, shall (x) be final, conclusive and binding on the Company, the Rights Agent, the holders of the Rights, as such, and all
other parties, and (y) not subject the Board of Directors to any liability to the holders of the Rights. 
  

 -35- 

 Section 30. Benefits of this Agreement. Nothing in this Agreement shall be construed to give to
any Person other than the Company, the Rights Agent and the registered holders of the Rights Certificates (and, prior to the Distribution Date, registered holders of the Common Stock) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company, the Rights Agent and the registered holders of the Rights Certificates (and, prior to the Distribution Date, registered holders of the Common Stock).

  
 Section 31. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated; provided, however, that notwithstanding anything in this Agreement to the contrary, if any such term, provision, covenant or restriction is held by such court or authority to
be invalid, void or unenforceable and the Board of Directors of the Company determines in its good faith judgment that severing the invalid language from this Agreement would adversely affect the purpose or effect of this Agreement, then, unless
there has occurred a merger referred to in the proviso to the first sentence of Section 23(a), the right of redemption set forth in Section 23 hereof shall be reinstated and shall not expire until the close of business on the tenth day
following the date of such determination by the Board of Directors of the Company or, if earlier, immediately prior to any such merger. Without limiting the foregoing, if any provision requiring that a determination be made by less than the entire
Board of Directors of the Company is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, such determination shall then be made by the entire Board of Directors of the Company. 
  
 Section 32. Governing Law. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts made and to be
performed entirely within such State. 
  
 Section 33.
Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

  
 Section 34. Descriptive Headings. Descriptive headings
of the several Sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. 
  

 -36- 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and
year first above written. 
  

			
	 HERCULES OFFSHORE, LLC

		
	 By
	 	 
	 Name:
	 	 
	 Title:
	 	 

  

			
	AMERICAN STOCK TRANSFER & TRUST COMPANY
		
	 By
	 	 
	 Name:
	 	 
	 Title:
	 	 

  

 -37- 

 Exhibit A 
  
 FORM OF 
 CERTIFICATE OF DESIGNATIONS

 of 
 SERIES A
JUNIOR PARTICIPATING PREFERRED STOCK 
 of 
 HERCULES OFFSHORE, INC. 
  
 Pursuant to Section 151 of the General Corporation Law 
 of the State of Delaware 
  
 HERCULES OFFSHORE, INC., a corporation organized and existing under the
General Corporation Law of the State of Delaware, in accordance with the provisions of Section 103 thereof, DOES HEREBY CERTIFY: 
  
 That pursuant to the authority vested in the Board of Directors in accordance with the provisions of the Certificate of Incorporation of the said
Corporation, the said Board of Directors on [            ], 2005 adopted the following resolution creating a series of 2,000,000 shares of Preferred Stock designated as
“Series A Junior Participating Preferred Stock”: 
  
 RESOLVED, that pursuant to the authority vested in the Board of Directors of this Corporation in accordance with the provisions of the Certificate of Incorporation, a series of Preferred Stock, par value $0.01 per
share, of the Corporation be and hereby is created, and that the designation and number of shares thereof and the voting and other powers, preferences and relative, participating, optional or other rights of the shares of such series and the
qualifications, limitations and restrictions thereof are as follows: 
  
 Series A Junior Participating Preferred Stock 
  
 1. Designation and Amount. There shall be a series of Preferred Stock that shall be designated as “Series A Junior Participating Preferred Stock”, and the number of shares constituting such series shall be
2,000,000. Such number of shares may be increased or decreased by resolution of the Board of Directors; provided, however, that no decrease shall reduce the number of shares of Series A Junior Participating Preferred Stock to less than the number of
shares then issued and outstanding plus the number of shares issuable upon exercise of outstanding rights, options or warrants or upon conversion of outstanding securities issued by the Corporation. 
  
 2. Dividends and Distributions. 
  
 (A) Subject to the prior and superior rights of the holders of any shares of
any series of Preferred Stock ranking prior and superior to the shares of Series A Junior Participating Preferred Stock with respect to dividends, the holders of shares of Series A Junior Participating Preferred Stock, in preference to the holders
of shares of any class or series of stock of the Corporation ranking junior to the Series A Junior Participating Preferred Stock, shall be entitled 

  

 A-1 

 
to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on
March 31, June 30, September 30 and December 31 in each year (each such date being referred to herein as a “Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date after the
first issuance of a share or fraction of a share of Series A Junior Participating Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $1.00 or (b) the Adjustment Number (as defined below) times
the aggregate per share amount of all cash dividends, and the Adjustment Number times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock, par value $0.01 per share, of the Corporation (the “Common Stock”) since the immediately preceding Quarterly Dividend
Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Junior Participating Preferred Stock. The “Adjustment Number” shall initially be 100. In
the event the Corporation shall at any time after [                     ], 2005 (the “Rights Declaration Date”)
(i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the
Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. 
  
 (B) The Corporation shall declare a dividend or distribution on the Series A Junior Participating Preferred Stock as provided in paragraph (A) above
immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no dividend or distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the Series A Junior Participating Preferred Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date. 
  
 (C) Dividends shall begin to accrue and
be cumulative on outstanding shares of Series A Junior Participating Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares of Series A Junior Participating Preferred Stock, unless the date of issue
of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment
Date or is a date after the record date for the determination of holders of shares of Series A Junior Participating Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events
such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Junior Participating Preferred Stock in an amount less
than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series A Junior Participating Preferred Stock entitled to receive payment of a dividend 

  

 A-2 

 
or distribution declared thereon, which record date shall be no more than 30 days prior to the date fixed for the payment thereof. 
  
 3. Voting Rights. The holders of shares of Series A Junior
Participating Preferred Stock shall have the following voting rights: 
  
 (A) Each share of Series A Junior Participating Preferred Stock shall entitle the holder thereof to a number of votes equal to the Adjustment Number on all matters submitted to a vote of the stockholders of the Corporation. 
  
 (B) Except as otherwise provided herein, in the Certificate of Incorporation
or by law, the holders of shares of Series A Junior Participating Preferred Stock, the holders of shares of any other class or series entitled to vote with the Common Stock and the holders of shares of Common Stock shall vote together as one class
on all matters submitted to a vote of stockholders of the Corporation. 
  
 (C) (i) If at any time dividends on any Series A Junior Participating Preferred Stock shall be in arrears in an amount equal to six quarterly dividends thereon, the occurrence of such contingency shall mark the beginning of a period (herein
called a “default period”) that shall extend until such time when all accrued and unpaid dividends for all previous quarterly dividend periods and for the current quarterly dividend period on all shares of Series A Junior Participating
Preferred Stock then outstanding shall have been declared and paid or set apart for payment. During each default period, (1) the number of Directors shall be increased by two, effective as of the time of election of such Directors as herein
provided, and (2) the holders of Preferred Stock (including holders of the Series A Junior Participating Preferred Stock) upon which these or like voting rights have been conferred and are exercisable (the “Voting Preferred Stock”)
with dividends in arrears in an amount equal to six quarterly dividends thereon, voting as a class, irrespective of series, shall have the right to elect such two Directors. 
  
 (ii) During any default period, such voting right of the holders of Series A Junior Participating Preferred Stock may be
exercised initially at a special meeting called pursuant to subparagraph (iii) of this Section 3(C) or at any annual meeting of stockholders, and thereafter at annual meetings of stockholders, provided that such voting right shall not be
exercised unless the holders of at least one-third in number of the shares of Voting Preferred Stock outstanding shall be present in person or by proxy. The absence of a quorum of the holders of Common Stock shall not affect the exercise by the
holders of Voting Preferred Stock of such voting right. 
  
 (iii)
Unless the holders of Voting Preferred Stock shall, during an existing default period, have previously exercised their right to elect Directors, the Board of Directors may order, or any stockholder or stockholders owning in the aggregate not less
than ten percent of the total number of shares of Voting Preferred Stock outstanding, irrespective of series, may request, the calling of a special meeting of the holders of Voting Preferred Stock, which meeting shall thereupon be called by the
Chairman of the Board, the President, a Vice President or the Secretary of the Corporation. Notice of such meeting and of any annual meeting at which holders of Voting Preferred Stock are entitled to vote pursuant to this paragraph (C)(iii) shall be
given to each holder of record of Voting Preferred Stock by mailing a copy of such notice to him 

  

 A-3 

 
at his last address as the same appears on the books of the Corporation. Such meeting shall be called for a time not earlier than 20 days and not later than
60 days after such order or request or, in default of the calling of such meeting within 60 days after such order or request, such meeting may be called on similar notice by any stockholder or stockholders owning in the aggregate not less than ten
percent of the total number of shares of Voting Preferred Stock outstanding. Notwithstanding the provisions of this paragraph (C)(iii), no such special meeting shall be called during the period within 60 days immediately preceding the date fixed for
the next annual meeting of the stockholders. 
  
 (iv) In any
default period, after the holders of Voting Preferred Stock shall have exercised their right to elect Directors voting as a class, (x) the Directors so elected by the holders of Voting Preferred Stock shall continue in office until their
successors shall have been elected by such holders or until the expiration of the default period, and (y) any vacancy in the Board of Directors may be filled by vote of a majority of the remaining Directors theretofore elected by the holders of
the class or classes of stock which elected the Director whose office shall have become vacant. References in this paragraph (C) to Directors elected by the holders of a particular class or classes of stock shall include Directors elected by
such Directors to fill vacancies as provided in clause (y) of the foregoing sentence. 
  
 (v) Immediately upon the expiration of a default period, (x) the right of the holders of Voting Preferred Stock as a class to elect Directors shall cease, (y) the term of any Directors elected by the holders
of Voting Preferred Stock as a class shall terminate and (z) the number of Directors shall be such number as may be provided for in the Certificate of Incorporation or By-Laws irrespective of any increase made pursuant to the provisions of
paragraph (C) of this Section 3 (such number being subject, however, to change thereafter in any manner provided by law or in the Certificate of Incorporation or By-Laws). Any vacancies in the Board of Directors effected by the provisions
of clauses (y) and (z) in the preceding sentence may be filled by a majority of the remaining Directors. 
  
 (D) Except as set forth herein, holders of Series A Junior Participating Preferred Stock shall have no special voting rights and their consent shall not
be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action. 
  
 4. Certain Restrictions. 
  
 (A) Whenever quarterly dividends or other dividends or distributions payable on the Series A Junior Participating Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A Junior Participating Preferred Stock outstanding shall have been paid in full, the Corporation
shall not 
  
 (i) declare or pay dividends on,
make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Junior Participating Preferred
Stock; 
  

 A-4 

 (ii) declare or pay dividends on or make any other distributions on any shares of stock
ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Junior Participating Preferred Stock, except dividends paid ratably on the Series A Junior Participating Preferred Stock and all such
parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled; or 
  
 (iii) redeem or purchase or otherwise acquire for consideration any shares of Series A Junior Participating Preferred Stock, or any shares
of stock ranking on a parity with the Series A Junior Participating Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of Series A Junior
Participating Preferred Stock, or to all such holders and the holders of any such shares ranking on a parity therewith, upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights
and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes. 
  
 (B) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration
any shares of stock of the Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner. 
  
 5. Reacquired Shares. Any shares of Series A Junior Participating
Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and canceled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board of Directors, subject to any conditions and restrictions on issuance set forth herein. 
  
 6. Liquidation, Dissolution or Winding Up. (A) Upon any
liquidation (voluntary or otherwise), dissolution or winding up of the Corporation, no distribution shall be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series
A Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Series A Junior Participating Preferred Stock shall have received $100 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment (the “Series A Junior Participating Preferred Stock Liquidation Preference”). Following the payment of the full amount of the Series A Junior Participating Preferred Stock Liquidation
Preference, no additional distributions shall be made to the holders of shares of Series A Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Common Stock shall have received an amount per share (the “Common
Adjustment”) equal to the quotient obtained by dividing (i) the Series A Junior Participating Preferred Stock Liquidation Preference by (ii) the Adjustment Number. Following the payment of the full amount of the Series A Junior
Participating Preferred Stock Liquidation Preference and the Common Adjustment in respect of all outstanding shares of Series A Junior Participating Preferred Stock and Common Stock, respectively, holders of Series A Junior Participating Preferred
Stock and holders of shares of Common Stock shall, subject to the prior rights of all 

  

 A-5 

 
other series of Preferred Stock, if any, ranking prior thereto, receive their ratable and proportionate share of the remaining assets to be distributed in
the ratio of the Adjustment Number to 1 with respect to such Series A Junior Participating Preferred Stock and Common Stock, on a per share basis, respectively. 
  

(B) In the event, however, that there are not sufficient assets available to permit payment in full of the Series A Junior Participating Preferred
Stock Liquidation Preference and the liquidation preferences of all other series of Preferred Stock, if any, that rank on a parity with the Series A Junior Participating Preferred Stock, then such remaining assets shall be distributed ratably to the
holders of such parity shares in proportion to their respective liquidation preferences. In the event, however, that there are not sufficient assets available to permit payment in full of the Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock. 
  
 (C)
Neither the merger or consolidation of the Corporation into or with another corporation nor the merger or consolidation of any other corporation into or with the Corporation shall be deemed to be a liquidation, dissolution or winding up of the
Corporation within the meaning of this Section 6, but the sale, lease or conveyance of all or substantially all the Corporation’s assets shall be deemed to be a liquidation, dissolution or winding up of the Corporation within the meaning
of this Section 6. 
  
 7. Consolidation, Merger, etc.
In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such
case each share of Series A Junior Participating Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share equal to the Adjustment Number times the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. 
  
 8. Redemption. (A) The Corporation, at its option, may redeem shares of the Series A Junior Participating Preferred Stock in whole at any time
and in part from time to time, at a redemption price equal to the Adjustment Number times the current per share market price (as such term is hereinafter defined) of the Common Stock on the date of the mailing of the notice of redemption, together
with unpaid accumulated dividends to the date of such redemption. The “current per share market price” on any date shall be deemed to be the average of the closing price per share of such Common Stock for the ten consecutive Trading Days
(as such term is hereinafter defined) immediately prior to such date; provided, however, that in the event that the current per share market price of the Common Stock is determined during a period following the announcement of (A) a dividend or
distribution on the Common Stock other than a regular quarterly cash dividend or (B) any subdivision, combination or reclassification of such Common Stock and the ex-dividend date for such dividend or distribution, or the record date for such
subdivision, combination or reclassification, shall not have occurred prior to the commencement of such ten Trading Day period, then, and in each such case, the current per share market price shall be properly adjusted to take into account
ex-dividend trading. The closing price for each day shall be the last sales price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as 

  

 A-6 

 
reported in the principal transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange, or, if the
Common Stock is not listed or admitted to trading on the New York Stock Exchange, on the principal national securities exchange on which the Common Stock is listed or admitted to trading, or, if the Common Stock is not listed or admitted to trading
on any national securities exchange but sales price information is reported for such security, as reported by the National Association of Securities Dealers, Inc. Automated Quotations System (“NASDAQ”) or such other self-regulatory
organization or registered securities information processor (as such terms are used under the Securities Exchange Act of 1934, as amended) that then reports information concerning the Common Stock, or, if sales price information is not so reported,
the average of the high bid and low asked prices in the over-the-counter market on such day, as reported by NASDAQ or such other entity, or, if on any such date the Common Stock is not quoted by any such entity, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in the Common Stock selected by the Board of Directors of the Corporation. If on any such date no such market maker is making a market in the Common Stock, the fair value of
the Common Stock on such date as determined in good faith by the Board of Directors of the Corporation shall be used. The term “Trading Day” shall mean a day on which the principal national securities exchange on which the Common Stock is
listed or admitted to trading is open for the transaction of business, or, if the Common Stock is not listed or admitted to trading on any national securities exchange but is quoted by NASDAQ, a day on which NASDAQ reports trades, or, if the Common
Stock is not so quoted, a Monday, Tuesday, Wednesday, Thursday or Friday on which banking institutions in the State of New York are not authorized or obligated by law or executive order to close. 
  
 (B) In the event that fewer than all the outstanding shares of the Series A
Junior Participating Preferred Stock are to be redeemed, the number of shares to be redeemed shall be determined by the Board of Directors and the shares to be redeemed shall be determined by lot or pro rata as may be determined by the Board of
Directors or by any other method that may be determined by the Board of Directors in its sole discretion to be equitable. 
  
 (C) Notice of any such redemption shall be given by mailing to the holders of the shares of Series A Junior Participating Preferred Stock to be redeemed a
notice of such redemption, first class postage prepaid, not later than the fifteenth day and not earlier than the sixtieth day before the date fixed for redemption, at their last address as the same shall appear upon the books of the Corporation.
Each such notice shall state: (i) the redemption date; (ii) the number of shares to be redeemed and, if fewer than all the shares held by such holder are to be redeemed, the number of such shares to be redeemed from such holder;
(iii) the redemption price; (iv) the place or places where certificates for such shares are to be surrendered for payment of the redemption price; and (v) that dividends on the shares to be redeemed will cease to accrue on the close
of business on such redemption date. Any notice that is mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the stockholder received such notice, and failure duly to give such notice by mail,
or any defect in such notice, to any holder of Series A Junior Participating Preferred Stock shall not affect the validity of the proceedings for the redemption of any other shares of Series A Junior Participating Preferred Stock that are to be
redeemed. On or after the date fixed for redemption as stated in such notice, each holder of the shares called for redemption shall surrender the certificate evidencing such shares to the Corporation at the place designated in such notice and shall
thereupon be entitled to receive payment of the redemption price. If fewer than all the shares represented by any such 

  

 A-7 

 
surrendered certificate are redeemed, a new certificate shall be issued representing the unredeemed shares. 
  
 The shares of Series A Junior Participating Preferred Stock shall not be
subject to the operation of any purchase, retirement or sinking fund. 
  
 9. Ranking. The Series A Junior Participating Preferred Stock shall rank junior to all other series of the Corporation’s Preferred Stock as to the payment of dividends and the distribution of assets, unless the terms of any such
series shall provide otherwise, and shall rank senior to the Common Stock as to such matters. 
  
 10. Amendment. At any time that any shares of Series A Junior Participating Preferred Stock are outstanding, the Certificate of Incorporation of the Corporation shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights of the Series A Junior Participating Preferred Stock so as to affect them adversely without the affirmative vote of the holders of two-thirds or more of the outstanding shares of
Series A Junior Participating Preferred Stock, voting separately as a class. 
  
 11. Fractional Shares. Series A Junior Participating Preferred Stock may be issued in fractions of a share that shall entitle the holder, in proportion to such holder’s fractional shares, to exercise
voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series A Junior Participating Preferred Stock. 
  
 IN WITNESS WHEREOF, the undersigned has executed this Certificate and does affirm the foregoing as true this
[        ] day of [            ], 2005. 
  

	
	
	 
	 [Vice] President

  

 A-8 

 Exhibit B 
  
 [Form of Rights Certificate] 
  
 Certificate No. R- 
  
              Rights 
  
 NOT EXERCISABLE AFTER [            
        ], 2015 OR EARLIER IF REDEEMED OR EXCHANGED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS BENEFICIALLY OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE. 
  
 Rights Certificate 
  
 HERCULES OFFSHORE, INC. 
  
 This certifies that                                 , or registered
assigns, is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions and conditions of the Rights Agreement, dated as of
[                     ], 2005 as it may from time to time be supplemented or amended (the “Rights Agreement”), between
Hercules Offshore, Inc., a Delaware corporation (the “Company”), and American Stock Transfer & Trust Company (the “Rights Agent”), to purchase from the Company at any time prior to 5:00 p.m. (New York, New York time) on
[                     ], 2015 at the principal office or offices of the Rights Agent designated for such purpose, or its
successors as Rights Agent, one one-hundredth of a fully paid, nonassessable share (a “Fractional Share”) of Series A Junior Participating Preferred Stock, par value $0.01 per share (the “Preferred Stock”), of the Company, at a
purchase price of $90 per one one-hundredth of a share (the “Purchase Price”), upon presentation and surrender of this Rights Certificate with the Form of Election to Purchase and related Certificate set forth on the reverse hereof duly
executed. The Purchase Price may be paid in cash or by certified check, cashier’s or official bank check or bank draft payable to the order of the Company or the Rights Agent. The number of Rights evidenced by this Rights Certificate (and the
number of shares that may be purchased upon exercise thereof) set forth above, and the Purchase Price per Fractional Share set forth above, are the number and Purchase Price as of
[                     ], 2005, based on the Preferred Stock as constituted at such date. The Company reserves the right to
require prior to the occurrence of a Triggering Event (as such term is defined in the Rights Agreement) that a number of Rights be exercised so that only whole shares of Preferred Stock will be issued. 
  
 From and after the first occurrence of a Triggering Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Rights Certificate are beneficially owned by or transferred to (i) an Acquiring Person or an Associate or Affiliate of an Acquiring Person (as such terms are defined in the
Rights Agreement), (ii) a transferee of any such Acquiring Person, Associate or Affiliate, or (iii) under certain circumstances specified in the 

  

 B-1 

 
Rights Agreement, a transferee of a person who, concurrently with or after such transfer, became an Acquiring Person or an Affiliate or Associate of an
Acquiring Person, such Rights shall, with certain exceptions, become null and void in the circumstances set forth in the Rights Agreement, and no holder hereof shall have any rights whatsoever with respect to such Rights from and after the
occurrence of such Triggering Event. 
  
 As provided in the Rights
Agreement, the Purchase Price and the number and kind of shares of Preferred Stock or other securities or assets that may be purchased upon the exercise of the Rights evidenced by this Rights Certificate are subject to modification and adjustment
upon the happening of certain events, including Triggering Events. 
  
 This Rights Certificate is subject to all of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of the Rights Certificates, which limitations of rights
include the temporary suspension of the exercisability of such Rights under the specific circumstances set forth in the Rights Agreement. Copies of the Rights Agreement are on file at the above-mentioned office of the Rights Agent and are also
available upon written request to the Company. 
  
 This Rights
Certificate, with or without other Rights Certificates, upon surrender at the principal office or offices of the Rights Agent designated for such purpose, may be exchanged for another Rights Certificate or Rights Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of Fractional Shares of Preferred Stock as the Rights evidenced by the Rights Certificate or Rights Certificates surrendered shall have entitled such holder to purchase. If
this Rights Certificate shall be exercised in part, the holder shall be entitled to receive upon surrender hereof another Rights Certificate or Rights Certificates for the number of whole Rights not exercised. 
  
 Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate (i) may be redeemed by the Company at its option at a redemption price of $.01 per Right, payable, at the election of the Company, in cash or shares of Common Stock or such other consideration as the Board of Directors may
determine, at any time prior to the earlier of the close of business on (a) the tenth day following the first public announcement of the occurrence of a Flip-In Event (as such time period may be extended or shortened pursuant to the Rights
Agreement) and (b) the Expiration Date (as such term is defined in the Rights Agreement) or (ii) may be exchanged in whole or in part for shares of Common Stock and/or other equity securities of the Company deemed to have the same value as
shares of Common Stock, at any time prior to a person’s becoming the beneficial owner of 50% or more of the shares of Common Stock outstanding or the occurrence of a Flip-Over Event. 
  
 No fractional shares of Preferred Stock are required to be issued upon the exercise of any Right or Rights evidenced hereby
(other than, except as set forth above, fractions that are integral multiples of a Fractional Share of Preferred Stock, which may, at the election of the Company, be evidenced by depositary receipts), but in lieu thereof a cash payment may be made,
as provided in the Rights Agreement. 
  

 B-2 

 No holder of this Rights Certificate, as such, shall be entitled to vote or receive dividends or be
deemed for any purpose the holder of shares of Preferred Stock or of any other securities of the Company that may at any time be issuable on the exercise hereof, nor shall anything contained in the Rights Agreement or herein be construed to confer
upon the holder hereof, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in the Rights Agreement), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement. 
  
 This Rights Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the Rights Agent. 
  
 WITNESS the facsimile signature of the proper officers of the Company and its corporate seal. 
  
 Dated as of
[                     ], 2005 
  

									
	 ATTEST:
	 	 	 	HERCULES OFFSHORE, INC.
				
	 	 	 	 	By:	 	 
	 Secretary
	 	 	 	 	 	Title:

  

			
	 Countersigned:

	
	AMERICAN STOCK TRANSFER & TRUST COMPANY
		
	 By
	 	 
	 	 	Authorized Signature

  

 B-3 

 [Form of Reverse Side of Rights Certificate] 
  
 FORM OF ASSIGNMENT 
  
 (To be executed by the registered holder if such holder desires 
 to transfer any Rights evidenced by the Rights Certificate.) 
  
 FOR VALUE RECEIVED
                                        
                                        
                 hereby sells, assigns and transfers unto 
 ___________________________________________________________________________________________ 
 (Please print name and address of
transferee)  
                                       
   Rights evidenced by this Rights Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint
                             Attorney, to transfer the said Rights on the books of the within-named
Company, with full power of substitution. 
  

					
	 Dated:                     ,
200  
	 	 	 	 
			
	  	 	 	 	  
	 	 	 	 	Signature

  
 Signature Guaranteed: 
  
 Signatures must be guaranteed by a member firm
of a national securities exchange, a member of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or another eligible guarantor institution (as defined
pursuant to Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended). 
  

 B-4 

 Certificate 
  
 The undersigned hereby certifies by checking the appropriate boxes that: 
  
 (1) the Rights evidenced by this Rights Certificate
[    ] are [    ] are not being sold, assigned and transferred by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such terms are
defined pursuant to the Rights Agreement); 
  
 (2) after due
inquiry and to the best knowledge of the undersigned, it [    ] did [    ] did not acquire the Rights evidenced by this Rights Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person or who is a direct or indirect transferee of an Acquiring Person or of an Affiliate or Associate of an Acquiring Person. 
  

					
	 Dated:                     ,
200  
	 	 	 	 
			
	  	 	 	 	  
	 	 	 	 	Signature

  
 Signature Guaranteed: 
  
 Signatures must be guaranteed by a member firm
of a national securities exchange, a member of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or another eligible guarantor institution (as defined
pursuant to Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended). 
  
 NOTICE 
  
 The signatures
to the foregoing Assignment and Certificate must correspond to the name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any change whatsoever. 
  

 B-5 

 FORM OF ELECTION TO PURCHASE 
  
 (To be executed if holder desires to exercise 
 Rights represented by the Rights Certificate.) 
  

	To:	HERCULES OFFSHORE, INC. 

  
 The undersigned hereby irrevocably elects to exercise              Rights represented
by this Rights Certificate to purchase the shares of Preferred Stock issuable upon the exercise of the Rights (or such other securities of the Company or of any other person that may be issuable upon the exercise of the Rights) and requests that
certificates for such shares (or other securities) be issued in the name of and delivered to: 
  
 Please insert social security 
 or other identifying number 
  

 (Please print name and address) 
  

  
 If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be registered in the name of and delivered to: 
  
 Please insert social security 
 or other identifying number 
  

 (Please print name and address) 
  

  
 Dated:
                    , 200__ 
  

	
	
	 
	 Signature

  
 Signature Guaranteed: 
  
 Signatures must be guaranteed by a member firm
of a national securities exchange, a member of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or another eligible guarantor institution (as defined
pursuant to Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended). 
  

 B-6 

 Certificate 
  
 The undersigned hereby certifies by checking the appropriate boxes that: 
  
 (1) the Rights evidenced by this Rights Certificate
[    ] are [    ] are not being exercised by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such terms are defined pursuant to
the Rights Agreement); 
  
 (2) after due inquiry and to the best
knowledge of the undersigned, it [    ] did [     ] did not acquire the Rights evidenced by this Rights Certificate from any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person or who is a direct or indirect transferee of an Acquiring Person or of an Affiliate or Associate of an Acquiring Person. 
  

					
			
	 Dated:                    ,
200  
	 	 	 	  
	 	 	 	 	 Signature

  
 Signature Guaranteed: 
  
 Signatures must be guaranteed by a member firm of a national securities exchange, a member of
the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or another eligible guarantor institution (as defined pursuant to Rule 17Ad-15 under the Securities
Exchange Act of 1934, as amended). 
  
 NOTICE 
  
 The signatures to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any change whatsoever. 
  

 B-7 

 Exhibit C 
  
 Under certain circumstances set forth in the Rights Agreement, Rights beneficially owned by or transferred to any Person who is, was or becomes an Acquiring Person or
an Affiliate or Associate thereof (as such terms are defined in the Rights Agreement), and certain transferees thereof, will become null and void and will no longer be transferable. 
  
 SUMMARY OF RIGHTS 
  
 The Board of Managers of Hercules Offshore, LLC, a Delaware limited liability company that became a Delaware corporation named “Hercules Offshore,
Inc.” (the “Company”) as a result of a conversion of the Company effective [                     ], 2005, which
Board of Managers became the Board of Directors of the Company (in its status as a corporation) as a result of such conversion, took action so that one right (“Right”) is associated with each outstanding share of the Company’s Common
Stock, par value $.01 per share (“Common Stock”). Each Right entitles the registered holder to purchase from the Company a unit consisting of one one-hundredth of a share (a “Fractional Share”) of Series A Junior Participating
Preferred Stock, par value $0.01 per share (the “Preferred Stock”), at a purchase price of $90 per Fractional Share, subject to adjustment (the “Purchase Price”). The description and terms of the Rights are set forth in a Rights
Agreement dated as of [                     ], 2005 as it may from time to time be supplemented or amended (the “Rights
Agreement”) between the Company and American Stock Transfer & Trust Company, as Rights Agent. 
  
 Initially, the Rights will be attached to all certificates representing outstanding shares of Common Stock, and no separate certificates for the Rights
(“Rights Certificates”) will be distributed. The Rights will separate from the Common Stock and a “Distribution Date” will occur, with certain exceptions, upon the earlier of (i) ten days following a public announcement that
a person or group of affiliated or associated persons (an “Acquiring Person”) has acquired, or obtained the right to acquire, beneficial ownership of 15% or more of the outstanding shares of Common Stock (the date of the announcement being
the “Stock Acquisition Date”), or (ii) ten business days following the commencement of a tender offer or exchange offer that would result in a person’s becoming an Acquiring Person. For purposes of the definition of
“Acquiring Person,” none of LR-Hercules Holdings, L.P., Greenhill Capital Partners, L.P., nor any person or group of affiliated or associated persons thereof will be or become an Acquiring Person. In certain circumstances, the Distribution
Date may be deferred by the Board of Directors. Certain inadvertent acquisitions will not result in a person’s becoming an Acquiring Person if the person promptly divests itself of sufficient Common Stock. Until the Distribution Date,
(a) the Rights will be evidenced by the Common Stock certificates (together with a copy of this Summary of Rights or bearing the notation referred to below) and will be transferred with and only with such Common Stock certificates, (b) new
Common Stock certificates will contain a notation incorporating the Rights Agreement by reference and (c) the surrender for transfer of any certificate for Common Stock (with or without a copy of this Summary of Rights) will also constitute the
transfer of the Rights associated with the Common Stock represented by such certificate. 
  

 C-1 

 The Rights are not exercisable until the Distribution Date and will expire at the close of business on
[                     ], 2015, unless earlier redeemed or exchanged by the Company as described below. 
  
 As soon as practicable after the Distribution Date, Rights Certificates will
be mailed to holders of record of Common Stock as of the close of business on the Distribution Date and, from and after the Distribution Date, the separate Rights Certificates alone will represent the Rights. All shares of Common Stock issued prior
to the Distribution Date will be issued with Rights. Shares of Common Stock issued after the Distribution Date in connection with certain employee benefit plans or upon conversion of certain securities will be issued with Rights. Except as otherwise
determined by the Board of Directors, no other shares of Common Stock issued after the Distribution Date will be issued with Rights. 
  
 In the event (a “Flip-In Event”) that a person becomes the beneficial owner of 15% or more of the then outstanding shares of Common Stock
(except pursuant to a tender or exchange offer for all outstanding shares of Common Stock at a price and on terms that a majority of the independent directors of the Company determines to be fair to and otherwise in the best interests of the Company
and its stockholders (a “Permitted Offer”)), each holder of a Right will thereafter have the right to receive, upon exercise of such Right, a number of shares of Common Stock (or, in certain circumstances, cash, property or other
securities of the Company) having a Current Market Price (as defined in the Rights Agreement) equal to two times the exercise price of the Right. Notwithstanding the foregoing, following the occurrence of any Triggering Event, all Rights that are,
or (under certain circumstances specified in the Rights Agreement) were, beneficially owned by or transferred to an Acquiring Person (or by certain related parties) will be null and void in the circumstances set forth in the Rights Agreement.
However, Rights are not exercisable following the occurrence of any Flip-In Event until such time as the Rights are no longer redeemable by the Company as set forth below. 
  
 For example, at an exercise price of $90 per Right, each Right not owned by an Acquiring Person (or by certain related
parties) following an event set forth in the preceding paragraph would entitle its holder to purchase $180 worth of Common Stock (or other consideration, as noted above), based upon its then Current Market Price, for $90. 
  
 In the event (a “Flip-Over Event”) that, at any time from and after
the time an Acquiring Person becomes such, (i) the Company is acquired in a merger or other business combination transaction (other than certain mergers that follow a Permitted Offer), or (ii) 50% or more of the Company’s assets, cash
flow or earning power is sold or transferred, each holder of a Right (except Rights that are voided as set forth above) shall thereafter have the right to receive, upon exercise, a number of shares of common stock of the acquiring company having a
Current Market Price equal to two times the exercise price of the Right. Flip-In Events and Flip-Over Events are collectively referred to as “Triggering Events.” 
  
 The number of outstanding Rights associated with a share of Common Stock, or the number of Fractional Shares of Preferred
Stock issuable upon exercise of a Right and the Purchase Price, are subject to adjustment in the event of a stock dividend on, or a subdivision, combination or reclassification of, the Common Stock occurring prior to the Distribution Date. The
Purchase Price payable, and the number of Fractional Shares of Preferred Stock or other 

  

 C-2 

 
securities or property issuable, upon exercise of the Rights are subject to adjustment from time to time to prevent dilution in the event of certain
transactions affecting the Preferred Stock. 
  
 With certain
exceptions, no adjustment in the Purchase Price will be required until cumulative adjustments amount to at least 1% of the Purchase Price. No fractional shares of Preferred Stock that are not integral multiples of a Fractional Share are required to
be issued upon exercise of Rights and, in lieu thereof, an adjustment in cash may be made based on the market price of the Preferred Stock on the last trading date prior to the date of exercise. Pursuant to the Rights Agreement, the Company reserves
the right to require prior to the occurrence of a Triggering Event that, upon any exercise of Rights, a number of Rights be exercised so that only whole shares of Preferred Stock will be issued. 
  
 At any time until ten days following the first date of public announcement of
the occurrence of a Flip-In Event, the Company may redeem the Rights in whole, but not in part, at a price of $.01 per Right, payable, at the option of the Company, in cash, shares of Common Stock or such other consideration as the Board of
Directors may determine. After a person becomes an Acquiring Person, the right of redemption is subject to certain limitations in the Rights Agreement. Immediately upon the effectiveness of the action of the Board of Directors ordering redemption of
the Rights, the Rights will terminate and the only right of the holders of Rights will be to receive the $.01 redemption price. The Rights Plan does not prevent a stockholder from conducting a proxy contest to remove and replace the Board with
directors who then vote to redeem the Rights, if such actions are taken prior to the time that such stockholder becomes an Acquiring Person. 
  
 At any time after the occurrence of a Flip-In Event and prior to a person’s becoming the beneficial owner of 50% or more of the shares of Common
Stock then outstanding or the occurrence of a Flip-Over Event, the Company may exchange the Rights (other than Rights owned by an Acquiring Person or an affiliate or an associate of an Acquiring Person, which will have become void), in whole or in
part, at an exchange ratio of one share of Common Stock, and/or other equity securities deemed to have the same value as one share of Common Stock, per Right, subject to adjustment. 
  
 Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends. While the distribution of the Rights should not be taxable to stockholders or to the Company, stockholders may, depending upon the circumstances, recognize taxable income in the event
that the Rights become exercisable for Common Stock (or other consideration) of the Company or for the common stock of the acquiring company as set forth above or are exchanged as provided in the preceding paragraph. 
  
 Other than the redemption price, any of the provisions of the Rights
Agreement may be amended by the Board of Directors of the Company as long as the Rights are redeemable. Thereafter, the provisions of the Rights Agreement other than the redemption price may be amended by the Board of Directors in order to cure any
ambiguity, defect or inconsistency, to make changes that do not materially adversely affect the interests of holders of Rights (excluding the interests of any Acquiring Person), or to shorten or lengthen any time 

  

 C-3 

 
period under the Rights Agreement; provided, however, that no amendment to lengthen the time period governing redemption shall be made at such time as
the Rights are not redeemable. 
  
 A copy of the Rights Agreement
has been filed with the Securities and Exchange Commission. A copy of the Rights Agreement is available free of charge from the Company. This summary description of the Rights does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is incorporated herein by reference. 
  

 C-4

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