Document:

exv10w1

Execution Copy

Exhibit 10.1

 

Published CUSIP Number:                     

CREDIT AGREEMENT

Dated as of May 15, 2008

among

PARKER DRILLING COMPANY,

as the Borrower,

BANK OF AMERICA, N.A.,

as Administrative Agent and L/C Issuer,

LEHMAN COMMERCIAL PAPER INC.,

as Syndication Agent,

ABN AMRO BANK N.V.,

as Documentation Agent,

and

The Other Lenders Party Hereto

 

BANC OF AMERICA SECURITIES LLC AND LEHMAN BROTHERS INC.,

as

Joint Lead Arrangers and Book Managers

 

Credit Agreement

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	Section	 	Page	 
	ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS
	 	 	1	 
	1.01 Defined Terms
	 	 	1	 
	1.02 Other Interpretive Provisions
	 	 	36	 
	1.03 Accounting Terms
	 	 	36	 
	1.04 Rounding
	 	 	37	 
	1.05 Exchange Rates; Currency Equivalents
	 	 	37	 
	1.06 Alternative Currencies
	 	 	37	 
	1.07 Change of Currency
	 	 	38	 
	1.08 Times of Day
	 	 	38	 
	1.09 Letter of Credit Amounts
	 	 	38	 
	ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS
	 	 	39	 
	2.01 The Loans
	 	 	39	 
	2.02 Borrowings, Conversions and Continuations of Loans
	 	 	39	 
	2.03 Letters of Credit
	 	 	41	 
	2.04 Borrowing Base Calculations; Inclusion of Assets in Borrowing Base
	 	 	51	 
	2.05 Prepayments
	 	 	52	 
	2.06 Termination or Reduction of Commitments
	 	 	53	 
	2.07 Repayment of Loans
	 	 	53	 
	2.08 Interest
	 	 	54	 
	2.09 Fees
	 	 	55	 
	2.10 Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate
	 	 	56	 
	2.11 Evidence of Debt
	 	 	56	 
	2.12 Payments Generally; Administrative Agent’s Clawback
	 	 	57	 
	2.13 Sharing of Payments by Lenders
	 	 	59	 
	2.14 Increase in Revolving Credit Facility
	 	 	60	 
	2.15 Increase in Term Loan Facility
	 	 	61	 
	ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY
	 	 	62	 
	3.01 Taxes
	 	 	62	 
	3.02 Illegality
	 	 	66	 

Credit Agreement

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	3.03 Inability to Determine Rates
	 	 	67	 
	3.04 Increased Costs
	 	 	67	 
	3.05 Compensation for Losses
	 	 	68	 
	3.06 Mitigation Obligations; Replacement of Lenders.
	 	 	69	 
	3.07 Survival
	 	 	70	 
	ARTICLE IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
	 	 	70	 
	4.01 Conditions of Initial Credit Extension
	 	 	70	 
	4.02 Conditions to all Credit Extensions
	 	 	73	 
	ARTICLE V. REPRESENTATIONS AND WARRANTIES
	 	 	74	 
	5.01 Corporate Existence; Compliance with Law
	 	 	74	 
	5.02 Corporate Power; Authorization; Enforceable Obligations
	 	 	74	 
	5.03 No Legal Bar
	 	 	75	 
	5.04 No Material Litigation
	 	 	75	 
	5.05 Financial Statements; No Material Adverse Effect
	 	 	75	 
	5.06 No Default
	 	 	76	 
	5.07 Ownership of Property; Liens
	 	 	77	 
	5.08 Intellectual Property
	 	 	77	 
	5.09 Taxes
	 	 	77	 
	5.10 Federal Regulations
	 	 	77	 
	5.11 Labor Matters
	 	 	77	 
	5.12 ERISA Compliance
	 	 	78	 
	5.13 Investment Company Act; Other Regulations
	 	 	78	 
	5.14 Subsidiaries
	 	 	78	 
	5.15 Use of Proceeds
	 	 	79	 
	5.16 Environmental Matters
	 	 	79	 
	5.17 Accuracy of Information, etc
	 	 	80	 
	5.18 Collateral Documents
	 	 	80	 
	5.19 Solvency
	 	 	81	 
	5.20 Insurance
	 	 	81	 
	ARTICLE VI. AFFIRMATIVE COVENANTS
	 	 	81	 
	6.01 Financial Statements
	 	 	81	 
	6.02 Certificates; Other Information
	 	 	82	 
	6.03 Notices
	 	 	84	 

Credit Agreement

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	6.04 Conduct of Business and Maintenance of Existence, etc
	 	 	85	 
	6.05 Maintenance of Property; Insurance
	 	 	85	 
	6.06 Inspection of Property; Books and Records; Discussions
	 	 	85	 
	6.07 Environmental Laws
	 	 	86	 
	6.08 Payment of Obligations
	 	 	86	 
	6.09 Additional Collateral, etc
	 	 	86	 
	6.10 Borrowing Base Certificate
	 	 	87	 
	6.11 Cash Management Systems
	 	 	88	 
	6.12 Inspection of Collateral
	 	 	88	 
	6.13 Casualty and Condemnation
	 	 	88	 
	6.14 Further Assurances
	 	 	89	 
	ARTICLE VII. NEGATIVE COVENANTS
	 	 	89	 
	7.01 Liens
	 	 	89	 
	7.02 Financial Condition Covenants
	 	 	91	 
	7.03 Indebtedness
	 	 	91	 
	7.04 Fundamental Changes
	 	 	92	 
	7.05 Disposition of Property
	 	 	92	 
	7.06 Restricted Payments
	 	 	93	 
	7.07 Modifications of Debt Instruments, etc
	 	 	94	 
	7.08 Transactions with Affiliates
	 	 	94	 
	7.09 Changes in Fiscal Periods
	 	 	94	 
	7.10 Negative Pledge Clauses
	 	 	94	 
	7.11 Restrictions on Subsidiary Distributions
	 	 	95	 
	7.12 Lines of Business
	 	 	95	 
	7.13 Hedge Agreements
	 	 	95	 
	ARTICLE
VIII. EVENTS OF DEFAULT AND REMEDIES
	 	 	95	 
	8.01 Events of Default
	 	 	95	 
	8.02 Remedies Upon Event of Default
	 	 	98	 
	8.03 Application of Funds
	 	 	98	 
	ARTICLE IX. ADMINISTRATIVE AGENT
	 	 	100	 
	9.01 Appointment and Authority
	 	 	100	 
	9.02 Rights as a Lender
	 	 	100	 
	9.03 Exculpatory Provisions
	 	 	101	 

Credit Agreement

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	9.04 Reliance by Administrative Agent
	 	 	102	 
	9.05 Delegation of Duties
	 	 	102	 
	9.06 Resignation of Administrative Agent
	 	 	102	 
	9.07 Non-Reliance on Administrative Agent and Other Lenders
	 	 	103	 
	9.08 No Other Duties, Etc
	 	 	103	 
	9.09 Administrative Agent May File Proofs of Claim
	 	 	103	 
	9.10 Collateral and Guaranty Matters
	 	 	104	 
	9.11 Secured Cash Management Agreements and Secured Hedge Agreements
	 	 	105	 
	9.12 United States Citizen
	 	 	105	 
	ARTICLE X. MISCELLANEOUS
	 	 	105	 
	10.01 Amendments, Etc
	 	 	105	 
	10.02 Notices; Effectiveness; Electronic Communication
	 	 	108	 
	10.03 No Waiver; Cumulative Remedies; Enforcement
	 	 	110	 
	10.04 Expenses; Indemnity; Damage Waiver
	 	 	110	 
	10.05 Payments Set Aside
	 	 	112	 
	10.06 Successors and Assigns
	 	 	113	 
	10.07 Treatment of Certain Information; Confidentiality
	 	 	116	 
	10.08 Right of Setoff
	 	 	117	 
	10.09 Interest Rate Limitation
	 	 	118	 
	10.10 Counterparts; Integration; Effectiveness
	 	 	118	 
	10.11 Survival of Representations and Warranties
	 	 	118	 
	10.12 Severability
	 	 	118	 
	10.13 Replacement of Lenders
	 	 	119	 
	10.14 Governing Law; Jurisdiction; Etc
	 	 	119	 
	10.15 Waiver of Jury Trial
	 	 	120	 
	10.16 No Advisory or Fiduciary Responsibility
	 	 	121	 
	10.17 Electronic Execution of Assignments and Certain Other Documents
	 	 	121	 
	10.18 USA PATRIOT Act
	 	 	121	 
	10.19 Judgment Currency
	 	 	122	 
	10.20 ENTIRE AGREEMENT
	 	 	122	 
	SIGNATURES
	 	 	S-1	 

Credit Agreement

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SCHEDULES

	 	 	 	 
	 	1.01(a)

	 	Existing Letters of Credit
	 	1.01(b)

	 	Account Debtors
	 	2.01

	 	Commitments and Applicable Percentages
	 	5.02

	 	Consents, Authorizations, Filings and Notices
	 	5.04

	 	Litigation
	 	5.07

	 	Specified Rigs
	 	5.14

	 	Subsidiaries; Other Equity Investments
	 	5.16

	 	Environmental Matters
	 	5.18

	 	UCC Filing Jurisdiction; United States Coast Guard Filing
	 	7.01(f)

	 	Existing Liens
	 	7.03(d)

	 	Existing Indebtedness
	 	7.05(j)

	 	Permitted Dispositions
	 	10.02

	 	Administrative Agent’s Office; Certain Addresses for Notices

EXHIBITS

	 	 	 	 
	 	Form of	 	 
	 	A

	 	Committed Loan Notice
	 	B

	 	Borrowing Base Certificate
	 	C-1

	 	Term Note
	 	C-2

	 	Revolving Credit Note
	 	D

	 	Compliance Certificate
	 	E-1

	 	Assignment and Assumption
	 	E-2

	 	Administrative Questionnaire
	 	F

	 	Subsidiary Guaranty
	 	G

	 	Irrevocable Proxy, Pledge and Security Agreement
	 	H

	 	First Preferred Fleet Mortgage
	 	I-1

	 	Form of Opinion — Counsel to Loan Parties
	 	I-2

	 	Form of Opinion — General Counsel to Loan Parties

Credit Agreement

v

 

CREDIT AGREEMENT

     This CREDIT AGREEMENT (“Agreement”) is entered into as of May 15, 2008, among PARKER
DRILLING COMPANY, a Delaware corporation (the “Borrower”), each lender from time to time
party hereto (collectively, the “Lenders” and individually, a “Lender”), BANK OF
AMERICA, N.A., as Administrative Agent and L/C Issuer, LEHMAN COMMERCIAL PAPER INC., as Syndication
Agent, and ABN AMRO BANK N.V., as Documentation Agent.

PRELIMINARY STATEMENTS:

     The Borrower has requested that the Lenders provide a term loan facility and a revolving
credit facility, and the Lenders have indicated their willingness to lend and the L/C Issuers have
indicated their willingness to issue letters of credit, in each case, on the terms and subject to
the conditions set forth herein.

     In consideration of the mutual covenants and agreements herein contained, the parties hereto
covenant and agree as follows:

ARTICLE I.

DEFINITIONS AND ACCOUNTING TERMS

     1.01 Defined Terms. As used in this Agreement, the following terms shall have the meanings
set forth below:

     “Accounts” means accounts receivable of the Borrower or any of its Subsidiaries
arising out of the sales or leasing of goods or services made by the Borrower or any of its
Subsidiaries in the ordinary course of business.

     “Administrative Agent” means Bank of America in its capacity as administrative agent
under any of the Loan Documents, or any successor administrative agent.

     “Administrative Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 10.02, or such other address or account as
the Administrative Agent may from time to time notify to the Borrower and the Lenders.

     “Administrative Questionnaire” means an Administrative Questionnaire in substantially
the form of Exhibit E-2 or any other form approved by the Administrative Agent.

     “Advance Rate” means at any time, the applicable percentage set forth in clause
(a)(i), (a)(ii) or (a)(iii) of the definition of “Borrowing Base” or such other
percentage as may become effective in lieu of such applicable percentage in accordance with
paragraph (b) or (c) of such definition.

     “Affiliate” means, with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or is under common
Control with the Person specified.

Credit Agreement

1

 

     “Agents” means, collectively, the Administrative Agent, the Syndication Agent, and the
Documentation Agent.

     “Aggregate Commitments” means the Commitments of all the Lenders.

     “Agreement” means this Credit Agreement.

     “Alternative Currency” means each currency (other than Dollars) that is approved in
accordance with Section 1.06.

     “Alternative Currency Equivalent” means, at any time, with respect to any amount
denominated in Dollars, the equivalent amount thereof in the applicable Alternative Currency as
determined by the Administrative Agent or an L/C Issuer, as the case may be, at such time on the
basis of the Spot Rate (determined in respect of the most recent Revaluation Date) for the purchase
of such Alternative Currency with Dollars.

     “Applicable Fee Rate” means, at any time, in respect of the Revolving Credit Facility
and the Term Loan Facility, 0.50% per annum.

     “Applicable Percentage” means (a) in respect or the Term Loan Facility, with respect
to any Term Loan Lender at any time, the percentage (carried out to the ninth decimal place) of the
Term Loan Facility represented by (i) at any time during the Availability Period in respect of such
Facility, such Term Loan Lender’s Term Loan Commitment at such time and (ii) thereafter, the
principal amount of such Term Loan Lender’s Term Loans at such time and (b) in respect of the
Revolving Credit Facility, with respect to any Revolving Credit Lender at any time, the percentage
(carried out the ninth decimal place) of the Revolving Credit Facility represented by such
Revolving Credit Lender’s Revolving Credit Commitment at such time. If the commitment of each
Lender to make Loans and the obligation of the L/C Issuers to make L/C Credit Extensions have been
terminated pursuant to Section 8.02 or if the Commitments have expired, then the Applicable
Percentage of each Lender in respect of the such Facility shall be determined based on the
Applicable Percentage of such Lender in respect of such Facility most recently in effect, giving
effect to any subsequent assignments. The initial Applicable Percentage of each Lender in respect
of each Facility is set forth opposite the name of such Lender on Schedule 2.01 or in the
Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.

     “Applicable Rate” means (a) in respect to the Term loan Facility, 2.25% per annum for
Base Rate Loans and 3.25% per annum for Eurodollar Rate Loans, and (b) in respect of the Revolving
Credit Facility, (i) from the Closing Date to the date on which the Administrative Agent receives a
Compliance Certificate pursuant to Section 6.02(b) for the fiscal quarter ending June 30,
2008, 1.75% per annum for Base Rate Loans and 2.75% per annum for Eurodollar Rate Loans, and (ii)
thereafter, the applicable percentage per annum set forth below determined by reference to the
Consolidated Leverage Ratio as set forth in the most recent Compliance Certificate received by the
Administrative Agent pursuant to Section 6.02(b):

Credit Agreement

2

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Applicable Rate
	 	 	 	 	 	 	Eurodollar Rate	 	 	 
	 	 	 	Consolidated Leverage	 	 	Loans and Letters	 	 	 
	Pricing Level	 	 	Ratio	 	 	of Credit	 	 	Base Rate Loans
	1

	 	 	< 2.50:1
	 	 	 	2.75	%	 	 	 	1.75	%
	2

	 	 	3  2.50:1 but < 3.50:1
	 	 	 	3.00	%	 	 	 	2.00	%
	3

	 	 	3 3.50:1
	 	 	 	3.25	%	 	 	 	2.25	%

Any increase or decrease in the Applicable Rate resulting from a change in the Consolidated
Leverage Ratio shall become effective as of the first Business Day immediately following the date a
Compliance Certificate is delivered pursuant to Section 6.02(b); provided,
however, that if a Compliance Certificate is not delivered when due in accordance with such
Section, then, upon the request of the Required Lenders, Pricing Level 3 shall apply as of the
first Business Day after the date on which such Compliance Certificate was required to have been
delivered and shall remain in effect until the date on which such Compliance Certificate is
delivered.

     Notwithstanding anything to the contrary contained in this definition, the determination of
the Applicable Rate for any period shall be subject to the provisions of Section 2.10(b).

     “Applicable Time” means, with respect to any payments in any Alternative Currency, the
local time in the place of settlement for such Alternative Currency as may be determined by the
Administrative Agent or the applicable L/C Issuer, as the case may be, to be necessary for timely
settlement on the relevant date in accordance with normal banking procedures in the place of
payment.

     “Applicable Revolving Credit Percentage” means with respect to any Revolving Credit
Lender at any time, such Revolving Credit Lender’s Applicable Percentage in respect of the
Revolving Credit Facility at such time.

     “Appropriate Lender” means, at any time, (a) with respect to any of the Term Loan
Facility or the Revolving Credit Facility, a Lender that has a Commitment with respect to such
Facility or holds a Term Loan or a Revolving Credit Loan, respectively, at such time and (b) with
respect to the Letter of Credit Sublimit, (i) the L/C Issuers and (ii) if any Letters of Credit
have been issued pursuant to Section 2.03(a), the Revolving Credit Lenders.

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

     “Assignee Group” means two or more Eligible Assignees that are Affiliates of one
another or two or more Approved Funds managed by the same investment advisor.

     “Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is required by
Section 10.06(b)), and accepted by the Administrative Agent, in substantially the form of
Exhibit E-1 or any other form approved by the Administrative Agent.

Credit Agreement

3

 

     “Attributable Indebtedness” means, on any date, (a) in respect of any Capitalized
Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such
Person prepared as of such date in accordance with GAAP, (b) in respect of any Synthetic Lease
Obligation, the capitalized amount of the remaining lease or similar payments under the relevant
lease or other applicable agreement or instrument that would appear on a balance sheet of such
Person prepared as of such date in accordance with GAAP if such lease or other agreement or
instrument were accounted for as a Capitalized Lease and (c) all Synthetic Debt of such Person.

     “Audited Financial Statements” means the audited consolidated balance sheet of the
Borrower and its Subsidiaries for each of the fiscal years ended on December 31, 2006 and December
31, 2007, and the related consolidated statements of income or operations, shareholders’ equity and
cash flows for such fiscal years of the Borrower and its Subsidiaries, including the notes thereto.

     “Availability Period” means (a) in respect of the Revolving Credit Facility, the
period from and including the Closing Date to the earliest of (i) the Maturity Date for the
Revolving Credit Facility, (ii) the date of termination of the Revolving Credit Commitments
pursuant to Section 2.06, and (iii) the date of termination of the commitment of each
Revolving Lender to make Revolving Credit Loans and of the obligation of the L/C Issuers to make
L/C Credit Extensions pursuant to Section 8.02 and (b) in respect of the Term Loan
Facility, the period from and including the Closing Date to the earliest of (i) the date that falls
six months after the Closing Date, (ii) the Maturity Date for the Term Loan Facility, and (iii) the
date of termination of the commitments of the respective Term Loan Lenders to make Term Loans
pursuant to Section 8.02.

     “Bank of America” means Bank of America, N.A. and its successors.

     “Bank Products Reserves” means at any time, reserves in respect of Secured Hedge
Agreements and Secured Cash Management Agreements then provided and outstanding, including, without
limitation, the reserves established by the Administrative Agent pursuant to Section
2.04(b).

     “Base Rate” means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such
day as publicly announced from time to time by Bank of America as its “prime rate.” The “prime
rate” is a rate set by Bank of America based upon various factors including Bank of America’s costs
and desired return, general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced rate. Any change in
such rate announced by Bank of America shall take effect at the opening of business on the day
specified in the public announcement of such change.

     “Base Rate Loan” means a Revolving Credit Loan or Term Loan that bears interest based
on the Base Rate.

     “Borrower” has the meaning specified in the introductory paragraph hereto.

     “Borrower Materials” has the meaning specified in Section 6.02.

Credit Agreement

4

 

     “Borrowing” means a Revolving Credit Borrowing or a Term Loan Borrowing, as the
context may require.

     “Borrowing Base” means (a) Subject to paragraphs (b) and (c) below, at
any time, the amount equal at such time to:

     (i) eighty-five percent (85%) of the aggregate Net Amount of Eligible Accounts
Receivable, plus

     (ii) the Net Book Value of the Eligible Rental Equipment multiplied by the lesser of
(A) the Equipment OLV Percentage and (B) one hundred percent (100%), plus

     (iii) fifty percent (50%) of the Net Specified Rigs OLV, minus

     (iv) the amount of any reserves established by the Administrative Agent pursuant to
paragraph (b) below.

Notwithstanding the foregoing, in no event shall more than eighty percent (80%) of the amount of
the Borrowing Base consist of Eligible Rental Equipment and Eligible Specified Rigs in reliance on
clauses (a)(ii) and (a)(iii) above.

     (b) The Administrative Agent at any time in the exercise of its Permitted Discretion
shall be entitled to (i) establish and increase or decrease reserves against Eligible
Accounts Receivable, Eligible Rental Equipment, and Eligible Specified Rigs, (ii) establish
and increase or decrease Bank Products Reserves, (iii) reduce the Advance Rates to be
applied under clauses (a)(i), (a)(ii) and (a)(iii) above to a level
below the rates stated therein or (following any such reduction or following any increase in
such Advance Rates pursuant to paragraph (c) below) restore such Advance Rates to
any level equal to or below the Advance Rates stated in clauses (a)(i),
(a)(ii) and (a)(iii) above, (iv) impose additional restrictions (or
eliminate any such additional restrictions) to the standards of eligibility set forth in the
respective definitions of “Eligible Accounts Receivable”, “Eligible Rental Equipment” and
“Eligible Specified Rigs,” (v) establish and increase or decrease a reserve in the amount of
interest payable by the Borrower under the Agreement on Loans and drawings under Letters of
Credit, including, without limitation, in order to protect each L/C Issuer issuing Letters
of Credit in an Alternative Currency against the results of exchange rate fluctuations
arising with respect to such Letters of Credit and (vi) adjust the Borrowing Base upon the
occurrence of Casualty Events in accordance with Section 2.04(c).

     (c) The Administrative Agent at any time in the exercise of its Permitted Discretion
shall be entitled, with the consent of all Lenders, to increase the Advance Rates to a level
above the rates stated in clauses (a)(i), (a)(ii) and (a)(iii)
above.

     “Borrowing Base Certificate” means a certificate duly executed by a Responsible
Officer of the Borrower substantially in the form of Exhibit B.

     “Borrowing Base Collateral” means the Accounts, Quail Rental Assets and the Specified
Rigs.

Credit Agreement

5

 

     “Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact closed in, the state
where the Administrative Agent’s Office is located and, if such day relates to any Eurodollar Rate
Loan, means any such day on which dealings in Dollar deposits are conducted by and between banks in
the London interbank eurodollar market.

     “Capitalized Leases” means all leases that have been or should be, in accordance with
GAAP, recorded as capitalized leases.

     “Cash Collateralize” has the meaning specified in Section 2.03(g).

     “Cash Equivalents” means any of the following types of Investments:

     (a) readily marketable obligations issued or directly and fully guaranteed or insured
by the United States of America or any agency or instrumentality thereof having maturities
of not more than 360 days from the date of acquisition thereof; provided that the
full faith and credit of the United States of America is pledged in support thereof;

     (b) time deposits, Euro time deposits or overnight bank deposits with, or insured
certificates of deposit or bankers’ acceptances of, any commercial bank that (i) (A) is a
Lender or (B) is organized under the laws of the United States of America, any state thereof
or the District of Columbia or is the principal banking subsidiary of a bank holding company
organized under the laws of the United States of America, any state thereof or the District
of Columbia, and is a member of the Federal Reserve System, (ii) issues (or the parent of
which issues) commercial paper rated as described in clause (c) of this definition and
(iii) has combined capital and surplus of at least $500,000,000, in each case with
maturities of not more than 180 days from the date of acquisition thereof;

     (c) commercial paper issued by any Person organized under the laws of any state of the
United States of America and rated at least “Prime-2” (or the then equivalent grade) by
Moody’s or at least “A-2” (or the then equivalent grade) by S&P, in each case with
maturities of not more than 180 days from the date of acquisition thereof;

     (d) repurchase obligations of any Lender or of any commercial bank satisfying the
requirements of clause (b) of this definition, having a term of not more than 30 days with
respect to securities issued or fully guaranteed or insured by the United States government;

     (e) securities with maturities of one year or less from the date of acquisition issued
or fully guaranteed by any state, commonwealth or territory of the United States, by any
political subdivision or taxing authority of any such state, commonwealth or territory or by
any foreign government, the securities of which state, commonwealth, territory, political
subdivision, taxing authority or foreign government (as the case may be) are rated at least
A by S&P or A by Moody’s;

Credit Agreement

6

 

     (f) securities with maturities of 180 days or less from the date of acquisition backed
by standby letters of credit issued by any Lender or any commercial bank satisfying the
requirements of clause (b) of this definition;

     (g) Investments, classified in accordance with GAAP as current assets of the Borrower
or any of its Subsidiaries, in money market investment programs which are administered by
financial institutions that have the highest rating obtainable from either Moody’s or S&P,
and the portfolios of which are limited solely to Investments of the character, quality and
maturity described in clauses (a) through (f) of this definition; and

     (h) shares of the Columbia Cash Reserves fund for which an affiliate of Bank of
America, N.A. provides investment advisory services.

     “Cash Management Agreement” means any agreement to provide cash management services,
including treasury, depository, overdraft, credit or debit card, electronic funds transfer and
other cash management arrangements.

     “Cash Management Bank” means (a) any Person that, at the time it enters into a Cash
Management Agreement, is a Lender or an Affiliate of a Lender, in its capacity as a party to such
Cash Management Agreement and (b) any Lender or Affiliate of a Lender that is party to a Cash
Management Agreement with the Borrower or one of its Subsidiaries as of the Closing Date or the
date that such Person or such Person’s Affiliate becomes a Lender hereunder.

     “Casualty Event” means any loss, casualty or other insured damage to, or any taking
under power of eminent domain or by condemnation or similar proceeding of, any Property or asset of
the Borrower or any of its Material Subsidiaries in which the fair market value of the loss of such
Property shall be in excess of $5,000,000 (or its equivalent in other currencies).

     “CERCLA” means the Comprehensive Environmental Response, Compensation and Liability
Act of 1980.

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

     “Change of Control” means an event or series of events by which:

     (a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or
its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other
fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or
group shall be deemed to have “beneficial ownership” of all securities that such person or
group has the right to acquire, whether such right is exercisable immediately or only after
the passage of time (such right, an “option right”)), directly or indirectly, of 35%
or more of the equity securities of the Borrower entitled to

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vote for members of the board of directors or equivalent governing body of the Borrower
on a fully-diluted basis (and taking into account all such securities that such person or
group has the right to acquire pursuant to any option right);

     (b) a majority of the members of the board of directors or other equivalent governing
body of the Borrower cease to be composed of individuals (i) who were members of that board
or equivalent governing body on the Closing Date, (ii) whose election or nomination to that
board or equivalent governing body was approved by individuals referred to in clause (i)
above constituting at the time of such election or nomination at least a majority of that
board or equivalent governing body or (iii) whose election or nomination to that board or
other equivalent governing body was approved by individuals referred to in clauses (i) and
(ii) above constituting at the time of such election or nomination at least a majority of
that board or equivalent governing body (excluding, in the case of both clause (ii) and
clause (iii), any individual whose initial nomination for, or assumption of office as, a
member of that board or equivalent governing body occurs as a result of an actual or
threatened solicitation of proxies or consents for the election or removal of one or more
directors by any person or group other than a solicitation for the election of one or more
directors by or on behalf of the board of directors); or

     (c) a “Change of Control”, or like event, as defined in any of the Indentures, shall
have occurred.

     “Closing Date” means the first date all the conditions precedent in Section
4.01 are satisfied or waived in accordance with Section 10.01.

     “Co-Arrangers” means Banc of America Securities LLC and Lehman Brothers Inc., each in
its capacity as a joint lead arranger and joint book manager.

     “Code” means the Internal Revenue Code of 1986.

     “Collateral” means all of the “Collateral” and “Vessels” referred to
in the Collateral Documents and all of the other Property of the Loan Parties, now owned or
hereafter acquired, that is or is intended under the terms of the Collateral Documents to be
subject to Liens in favor of the Administrative Agent for the benefit of the Secured Parties.

     “Collateral Documents” means, collectively, the Security Agreement, the Mortgages,
each of the supplements to any of the foregoing, the Lockbox Agreements, the Control Agreements,
mortgages, collateral assignments, Security Agreement Supplements, security agreements, pledge
agreements or other similar agreements delivered to the Administrative Agent pursuant to
Section 6.09, and each of the other agreements, instruments or documents that creates or
purports to create a Lien in favor of the Administrative Agent for the benefit of the Secured
Parties.

     “Commitment” means a Term Loan Commitment or a Revolving Credit Commitment, as the
context may require.

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     “Committed Loan Notice” means a notice of (a) a Term Loan Borrowing, (b) a Revolving
Credit Borrowing, (c) a conversion of Loans from one Type to the other, or (d) a continuation of
Eurodollar Rate Loans, pursuant to Section 2.02(a), which, if in writing, shall be
substantially in the form of Exhibit A.

     “Compliance Certificate” means a certificate duly executed by a Responsible Officer of
the Borrower substantially in the form of Exhibit D.

     “Concentration Account” means one or more bank accounts maintained by the
Administrative Agent, over which the Administrative Agent shall have sole dominion and control,
into which proceeds of Collateral shall be transferred from other accounts maintained by the
Borrower and the Subsidiary Guarantors, in the event that the Administrative Agent requires such
transfer during the existence of an Event of Default.

     “Consolidated EBITDA” means, at any date of determination, for any period, an amount
equal to Consolidated Net Income of the Borrower and its Subsidiaries on a consolidated basis for
such period plus (a) the following to the extent deducted in calculating such Consolidated
Net Income: (i) Consolidated Interest Charges, amortization or writeoff of debt discount and debt
issuance costs and commissions, discounts, and other fees and charges associated with Indebtedness
for such period, (ii) the provision for Federal, state, local and foreign income taxes payable by
the Borrower and its Subsidiaries for such period, (iii) depreciation and amortization expense,
(iv) amortization of intangibles (including, but not limited to, goodwill) and organization costs,
(v) other extraordinary, unusual or non-recurring expenses or losses of the Borrower and its
Subsidiaries reducing such Consolidated Net Income (including, whether or not otherwise includable
as a separate item in the statement of Consolidated Net Income for such period, losses on sales of
assets outside of the ordinary course of business), to the extent such additions are found to be
acceptable by the Administrative Agent, acting reasonably, and (vi) other non-cash charges and
minus (b) the following to the extent included in calculating such Consolidated Net Income:
(i) Federal, state, local and foreign income tax credits of the Borrower and its Subsidiaries for
such period, (ii) any extraordinary, unusual or non-recurring income or gains (including, whether
or not otherwise includable as a separate item in the statement of such Consolidated Net Income for
such period, gains on the sales of assets outside of the ordinary course of business), to the
extent such deductions are found to be acceptable by the Administrative Agent, acting reasonably,
(iii) any other non-cash income, all as determined on a consolidated basis and (iv) the amount of
any cash expenditures during such period in respect of items that were added as non-cash charges in
determining Consolidated EBITDA for a prior period.

     “Consolidated Interest Charges” means, for any period, for the Borrower and its
Subsidiaries on a consolidated basis, the sum of total interest expense (including that
attributable under Capitalized Leases) for such period with respect to all outstanding Indebtedness
of the Borrower and its Subsidiaries (including, without limitation, all commissions, discounts and
other fees and charges owed by the Borrower or its Subsidiaries with respect to letters of credit
and bankers’ acceptance financing and net costs under Hedge Agreements in respect of interest rates
to the extent such net costs are allocable to such period in accordance with GAAP).

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     “Consolidated Interest Coverage Ratio” means, as of any date of determination, the
ratio of (a) Consolidated EBITDA for the period of the four prior fiscal quarters ending on such
date to (b) Consolidated Interest Charges for such period.

     “Consolidated Leverage Ratio” means, as of the last day of any period of four
consecutive fiscal quarters, the ratio of (a) Consolidated Total Debt as of such date to (b)
Consolidated EBITDA for the period of the four fiscal quarters most recently ended;
provided that for purposes of calculating Consolidated EBITDA of the Borrower and its
Subsidiaries for any period, (i) the Consolidated EBITDA of any Person acquired by the Borrower or
its Subsidiaries during such period shall be included on a pro forma basis for such period
(assuming the consummation of such acquisition and the incurrence or assumption of any Indebtedness
in connection therewith occurred on the first day of such period) if the consolidated balance sheet
of such acquired Person and its consolidated Subsidiaries as at the end of the period preceding the
acquisition of such Person and the related consolidated statements of income and stockholders’
equity and of cash flows for the period in respect of which Consolidated EBITDA is to be calculated
(x) have been previously provided to the Administrative Agent and the Lenders and (y) either (1)
have been reported on without a qualification arising out of the scope of the audit by independent
certified public accountants of nationally recognized standing or (2) have been found acceptable by
the Administrative Agent and (ii) the Consolidated EBITDA of any Person Disposed of by the Borrower
or its Subsidiaries during such period shall be excluded for such period (assuming the consummation
of such Disposition and the repayment of any Indebtedness in connection therewith occurred on the
first day of such period).

     “Consolidated Net Income” means, for any period, for the Borrower and its Subsidiaries
determined on a consolidated basis in accordance with GAAP, the consolidated net income (or loss)
of the Borrower and its Subsidiaries for that period; provided, that in calculating Consolidated
Net Income of the Borrower and its consolidated Subsidiaries for any period, there shall be
excluded (a) the income (or deficit) of any Person accrued prior to the date it becomes a
Subsidiary of the Borrower or is merged into or consolidated with the Borrower or any of its
Subsidiaries, (b) the income (or deficit) of any Person (other than a Subsidiary of the Borrower)
in which the Borrower or any of its Subsidiaries has an ownership interest, except to the extent
that any such income is actually received by the Borrower or such Subsidiary in the form of cash
dividends or similar cash distributions and (c) the undistributed earnings of any Subsidiary of the
Borrower to the extent that the declaration or payment of dividends or similar distributions by
such Subsidiary is not at the time permitted by the terms of any Contractual Obligation (other than
under any Loan Document) or Requirement of Law applicable to such Subsidiary.

     “Consolidated Senior Secured Debt” means all Consolidated Total Debt that is secured
by a Lien on any Property.

     “Consolidated Senior Secured Leverage Ratio” means, as of the last day of any period
of four consecutive fiscal quarters, the ratio of (a) Consolidated Senior Secured Debt as of such
date to (b) Consolidated EBITDA for the period of the four fiscal quarters most recently ended;
provided that for purposes of calculating Consolidated EBITDA of the Borrower and its
Subsidiaries for any period, the Consolidated EBITDA of any Person acquired by the Borrower or its
Subsidiaries during such period and the Consolidated EBITDA of any Person Disposed of

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by the Borrower or its Subsidiaries during such period shall be included or excluded, as
applicable, as provided in the proviso set forth in the definition of Consolidated Leverage Ratio.

     “Consolidated Total Debt” means, as of any date of determination, for the Borrower and
its Subsidiaries on a consolidated basis, the aggregate principal amount of all Indebtedness of the
Borrower and its Subsidiaries as of such date (other than Indebtedness of the type described in
clause (f) of the definition of “Indebtedness”), determined on a consolidated basis in accordance
with GAAP.

     “Contractual Obligation” means, as to any Person, any provision of any security issued
by such Person or of any agreement, instrument or other undertaking to which such Person is a party
or by which it or any of its Property is bound.

     “Control” means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through the ability to
exercise voting power, by contract or otherwise. “Controlling” and “Controlled”
have meanings correlative thereto.

     “Control Agreement” means in respect of each deposit account, securities account,
lockbox account, concentration account, collection account or disbursement account, in each case
other than any Immaterial Account, in the United States existing and maintained for any Loan Party
as of the Closing Date and each account identified to the Administrative Agent pursuant to
Section 6.11(a), a Control Agreement, in form and substance reasonably satisfactory to the
Administrative Agent and the Borrower, pursuant to which (a) the Borrower or the Subsidiary
Guarantor, as the case may be, that is the owner of such account irrevocably instructs the bank or
securities intermediary that maintains such account that such bank or securities intermediary shall
follow the instructions or entitlement orders, as the case may be, of the Administrative Agent
without further consent of the Borrower or such Subsidiary Guarantor and (b) the Administrative
Agent agrees that it will not give any instructions or entitlement orders, as the case may be, in
respect of such account unless an Event of Default has occurred and is continuing. Each Control
Agreement shall contain such other terms as shall be customary for agreements of such type.

     “Convertible Notes” means the $125,000,000 aggregate principal amount of convertible
notes of the Borrower issued pursuant to the Convertible Notes Indenture.

     “Convertible Notes Indenture” means the Indenture, dated as of July 5, 2007, in
respect of the Convertible Notes, together with all instruments and other agreements entered into
by the Borrower or its Subsidiaries in connection therewith, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with Section 7.07.

     “Cost” means in respect of any Quail Rental Assets, the net cost of such Quail Rental
Assets to Quail Tools after all cash and other discounts or other allowances which may be allowed
or taken by Quail Tools against the purchase price of such Quail Rental Assets.

     “Credit Extension” means each of the following: (a) a Borrowing and (b) an L/C Credit
Extension.

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     “Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other
liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium,
rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the
United States or other applicable jurisdictions from time to time in effect and affecting the
rights of creditors generally.

     “Default” means any event or condition that constitutes an Event of Default or that,
with the giving of any notice, the passage of time, or both, would be an Event of Default.

     “Default Rate” means (a) when used with respect to Obligations other than Letter of
Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the Applicable Rate, if
any, applicable to Base Rate Loans under the Term Loan Facility plus (iii) 2% per annum;
provided, however, that with respect to a Eurodollar Rate Loan, the Default Rate
shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise
applicable to such Loan plus 2% per annum, and (b) when used with respect to Letter of Credit Fees,
a rate equal to the Applicable Rate plus 2% per annum.

     “Defaulting Lender” means any Lender that (a) has failed to fund any portion of the
Term Loans, Revolving Credit Loans or participations in L/C Obligations required to be funded by it
hereunder within one Business Day of the date required to be funded by it hereunder, (b) has
otherwise failed to pay over to the Administrative Agent or any other Lender any other amount
required to be paid by it hereunder within one Business Day of the date when due, unless the
subject of a good faith dispute, or (c) has been deemed insolvent or become the subject of a
bankruptcy or insolvency proceeding.

     “Derivatives Counterparty” has the meaning specified in Section 7.06.

     “Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction) of any Property by any Person, including
any sale, assignment, transfer or other disposal, with or without recourse, of any notes or
accounts receivable or any rights and claims associated therewith.

     “Documentation Agent” means ABN AMRO Bank N.V. in its capacity as documentation agent
under any of the Loan Documents, or any successor documentation agent.

     “Dollar” and “$” mean lawful money of the United States.

     “Dollar Equivalent” means, at any time, (a) with respect to any amount denominated in
Dollars, such amount, and (b) with respect to any amount denominated in any Alternative Currency,
the equivalent amount thereof in Dollars as determined by the Administrative Agent or the
applicable L/C Issuer, as the case may be, at such time on the basis of the Spot Rate (determined
in respect of the most recent Revaluation Date) for the purchase of Dollars with such Alternative
Currency.

     “Domestic Subsidiary” means any Subsidiary that is organized under the laws of any
political subdivision of the United States.

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     “Eligible Assignee” means any Person that meets the requirements to be an assignee
under Section 10.06(b)(iii), (v) and (vi) (subject to such consents, if
any, as may be required under Section 10.06(b)(iii)).

     “Eligible Accounts Receivable” means Accounts of the Borrower and the Subsidiary
Guarantors payable in Dollars. In determining the amount to be so included, the face amount of
such Accounts shall exclude any such Accounts that the Administrative Agent determines to be
ineligible pursuant to the definition of the term “Borrowing Base”. Unless otherwise approved in
writing by the Administrative Agent, no Account of the Borrower or its Subsidiaries shall be deemed
to be an Eligible Account Receivable if:

     (a) it arises out of a sale made by such Borrower or any of its Subsidiaries to an
Affiliate; or

     (b) (i) in the case of any Account due from an account debtor other than a Qualified
Account Debtor, the Account is unpaid more than (A) 60 days after the original payment due
date and/or (B) 90 days after the original invoice date and (ii) in the case of Accounts due
from account debtors whose long-term unsecured debt obligations are rated at least A by
Moody’s or A2 by S&P (each, a “Qualified Account Debtor”), the Account is unpaid
more than (A) 90 days after the original payment due date and/or (B) 120 days after the
original invoice date; or

     (c) it is from the same account debtor (or any Affiliate thereof) and fifty percent
(50%) or more, in face amount, of all Accounts from such account debtor (and any Affiliate
thereof) are ineligible pursuant to clause (b) above; or

     (d) the Account, when aggregated with all other Accounts of such account debtor (and
any Affiliate thereof), exceeds ten percent (10%) in face value of all Accounts of the
Borrower and its Subsidiaries combined then outstanding, to the extent of such excess,
provided, to the extent that such Accounts are otherwise deemed to be an Eligible
Account Receivable, that (i) Accounts supported or secured by an irrevocable letter of
credit in form and substance satisfactory to the Administrative Agent, issued by a financial
institution satisfactory to the Administrative Agent, and duly transferred to the
Administrative Agent (together with sufficient documentation to permit direct draws by the
Administrative Agent) shall be excluded to the extent of the face amount of such letter of
credit for the purposes of such calculation and (ii) with respect to the account debtors
listed on Schedule 1.01(b) attached hereto, the percentage referred to above shall
be deemed to be the percentage set forth on such Schedule opposite the name of such account
debtor; or

     (e) (i) the account debtor is also a creditor of the Borrower or such Subsidiary, (ii)
the account debtor has disputed its liability on, or the account debtor has made any claim
with respect to, such Account or any other Account due from such account debtor to the
Borrower or such Subsidiary, which has not been resolved or (iii) the Account otherwise is
or may reasonably be expected to become subject to any right of setoff by the account debtor
or with respect to which any other claim, counterclaim, chargeback, rebate, allowance or
offset has been asserted; provided that any Account deemed

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13

 

ineligible pursuant to this clause (e) shall only be ineligible to the extent
of the amount owed by the Borrower or such Subsidiary to the account debtor, the amount of
such dispute or claim, or the amount of such setoff, other claim, counterclaim, chargeback,
rebate, allowance or offset, as applicable; or

     (f) the account debtor has commenced a voluntary case under the federal bankruptcy
laws, as now constituted or hereafter amended, or made an assignment for the benefit of
creditors, or if a decree or order for relief has been entered by a court having
jurisdiction over the account debtor in an involuntary case under the federal bankruptcy
laws, as now constituted or hereafter amended, or if any other petition or other application
for relief under the federal bankruptcy laws has been filed by or against the account
debtor, or if the account debtor has filed a certificate of dissolution under applicable
state law or shall be liquidated, dissolved or wound-up, or shall authorize or commence any
action or proceeding for dissolution, winding-up or liquidation, or if the account debtor
has failed, suspended business, declared itself to be insolvent, is generally not paying its
debts as they become due or has consented to or suffered a receiver, trustee, liquidator or
custodian to be appointed for it or for all or a significant portion of its assets or
affairs (any such act or event an “Act of Bankruptcy”), unless the payment of
Accounts from such account debtor is secured by assets of, or guaranteed by, in either case
in a manner satisfactory to the Administrative Agent, a Person with respect to which an Act
of Bankruptcy has not occurred and that is acceptable to the Administrative Agent or, if the
Account from such account debtor arises subsequent to a decree or order for relief with
respect to such account debtor under the federal bankruptcy laws, as now or hereafter in
effect, the Administrative Agent shall have determined that the timely payment and
collection of such Account will not be impaired; or

     (g) the sale is to an account debtor outside of the United States, Canada or Puerto
Rico, unless such account debtor has supplied the Borrower or such Subsidiary with an
irrevocable letter of credit in form and substance satisfactory to the Administrative Agent,
issued by a financial institution satisfactory to the Administrative Agent and which has
been duly transferred to the Administrative Agent (together with sufficient documentation to
permit direct draws by the Administrative Agent); or

     (h) the sale to the account debtor is on a bill-and-hold, guarantied sale,
sale-and-return, sale on approval or consignment basis or made pursuant to any other written
agreement providing for repurchase or return; or

     (i) the Administrative Agent determines in its Permitted Discretion that collection of
such Account is insecure or that such Account may not be paid by reason of the account
debtor’s financial inability to pay; or

     (j) the account debtor is the United States of America, any State or any political
subdivision, department, agency or instrumentality thereof, unless the Borrower or such
Subsidiary duly assigns its rights to payment of such Account to the Agent pursuant to the
Collateral Assignment of Claims Act of 1940 (31 U.S.C. § 3727 et seq.) or complies with any
similar State or local law as Agent shall require; or

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     (k) the goods giving rise to such Account have not been shipped and delivered to and
accepted by the account debtor or the services giving rise to such Account have not been
performed by the Borrower or such Subsidiary and accepted by the account debtor or the
Account otherwise does not represent a final sale (except to the extent that such Account
arises from a leasing transaction); or

     (l) any documentation relating to the Account does not comply with all applicable legal
requirements, including, where applicable, the Federal Consumer Credit Protection Act, the
Federal Truth in Lending Act and Regulation Z of the Board of Governors of the Federal
Reserve System; or

     (m) the Administrative Agent does not have a valid and perfected first priority
security interest in such Account or the Account does not otherwise conform to the
representations and warranties contained in the Credit Agreement, any Collateral Document or
any of the other Loan Documents; or

     (n) the Accounts are subject to any adverse security deposit, progress payment or other
similar advance made by or for the benefit of the applicable account debtor; provided, that
any Account deemed ineligible pursuant to this clause (n) shall only be ineligible
to the extent of the amount of any such deposit, payment or other similar advance; or

     (o) the Accounts are evidenced by or arise under any instrument or chattel paper unless
such instruments or chattel paper have been pledged to the Administrative Agent containing
such endorsement as the Administrative Agent shall require; or

     (p) the account debtor has a presence in a State requiring the filing of Notice of
Business Activities Report or similar report in order to permit the Borrower or such
Subsidiary to seek judicial enforcement in such State of payment of such Account unless the
Borrower or such Subsidiary has qualified to do business in such State or has filed a Notice
of Business Activities Report or equivalent report for the then current year or such failure
to file and inability to seek judicial enforcement is capable of being remedied without any
material delay or material cost; or

     (q) the Account arises from progress billings or other billing arrangements such that
the obligation of the account debtor with respect to such Account is conditioned upon the
Borrower’s or such Subsidiary’s satisfactory completion of any further performance under the
agreement giving rise thereto; or

     (r) the Account is deemed by the Administrative Agent in its Permitted Discretion to be
otherwise ineligible for inclusion in the calculation of the Borrowing Base.

     “Eligible Rental Equipment” means the Rental Equipment of Quail Tools. Unless
otherwise approved in writing by the Administrative Agent, no Rental Equipment shall be Eligible
Rental Equipment unless: (i) it is owned solely by Quail Tools and Quail Tools has good, valid and
marketable title thereto; (ii) it is at all times subject to the Administrative Agent’s valid and
duly perfected first priority security interest granted pursuant to the Security

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Agreement and no other Lien (other than (x) any Permitted Liens referred to in Section
7.01(a) or (y) any landlord’s Lien unless a rent reserve with respect to the relevant leased
property has been deducted from the Borrowing Base in accordance with clause (ii) of the following
sentence); (iii) Quail Tools shall at all times have title to such Rental Equipment and shall have
the ability to direct the disposition thereof (subject only to the rights of any lessee under any
lease in effect with respect to such Rental Equipment) and it is not located outside the
continental United States, the Gulf of Mexico waters subject to state or Federal jurisdiction and
Canada; (iv) it is not obsolete, unmerchantable or slow moving, as determined by the Administrative
Agent in its reasonable credit judgment; and (v) it conforms in all respects to the warranties and
representations set forth in the Credit Agreement. In no event shall (i) any Rental Equipment held
under a Vendor Lease, (ii) any Rental Equipment held at a leased property (other than Rental
Equipment on active lease located at customer locations in the ordinary course of business) unless
a landlord lien waiver satisfactory in all respects to the Administrative Agent has been obtained
with respect thereto (or, if no landlord lien waiver has been obtained, a rent reserve equal to
three months rent on such leased property has, if elected by the Administrative Agent in its sole
discretion, been deducted from the Borrowing Base) and (iii) any Rental Equipment otherwise deemed
ineligible by the Administrative Agent in its Permitted Discretion, constitute Eligible Rental
Equipment.

     “Eligible Specified Rigs” means the Specified Rigs of the Borrower and Subsidiary
Guarantors. Unless otherwise approved in writing by the Administrative Agent, no Specified Rigs
shall be an Eligible Specified Rig unless: (i) it is owned solely by the Borrower or another Loan
Party and such Loan Party has good, valid and marketable title thereto; (ii) it is at all times
subject to the Administrative Agent’s valid and duly perfected first priority Lien granted pursuant
to the Mortgages and no other Lien (other than any Permitted Liens referred to in Section
7.01(a) or Section 7.01(n); (iii) a Loan Party shall at all times have title to such
Specified Rig and shall have the ability to direct the disposition thereof (subject only to the
rights of any charteree under any charter in effect with respect to such Specified Rig) and it is
not located outside the continental United States or the Gulf of Mexico waters subject to state or
Federal jurisdiction; (iv) it is not obsolete, as determined by the Administrative Agent in its
reasonable credit judgment; and (v) it conforms in all respects to the warranties and
representations set forth in the Credit Agreement and applicable Mortgage and is fully insured in
the manner required by the Credit Agreement and applicable Mortgage. In no event shall any
Specified Rig otherwise deemed ineligible by the Administrative Agent in its Permitted Discretion,
constitute Eligible Specified Rigs.

     “EMU” means the economic and monetary union in accordance with the Treaty of Rome
1957, as amended by the Single European Act 1986, the Maastricht Treaty of 1992 and the Amsterdam
Treaty of 1998.

     “EMU Legislation” means the legislative measures of the European Council for the
introduction of, changeover to or operation of a single or unified European currency.

     “Environmental Laws” means any and all Federal, state, local, and foreign statutes,
laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions relating to pollution and the
protection of the environment or the release of any materials into the environment, including

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those related to hazardous substances or wastes, air emissions and discharges to waste or
public systems.

     “Environmental Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the
Borrower, any other Loan Party or any of their respective Subsidiaries directly or indirectly
resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use,
handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure
to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into
the environment or (e) any contract, agreement or other consensual arrangement pursuant to which
liability is assumed or imposed with respect to any of the foregoing.

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

     “Equipment OLV Percentage” means at any time, the percentage equal to (i) the Net
Equipment OLV of the Quail Rental Assets as of the date of the then most recent appraisal of the
Quail Rental Assets divided by the Net Book Value of the Quail Rental Assets as of such date,
multiplied by (ii) 50%.

     “Equity Interests” means, with respect to any Person, all of the shares of capital
stock of (or other ownership or profit interests in) such Person, all of the warrants, options or
other rights for the purchase or acquisition from such Person of shares of capital stock of (or
other ownership or profit interests in) such Person, and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests therein), whether voting
or nonvoting, and whether or not such shares, warrants, options, rights or other interests are
outstanding on any date of determination.

     “ERISA” means the Employee Retirement Income Security Act of 1974.

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

     “ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of
ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2)
of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e)
of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing
of a notice of intent to terminate, the treatment of a Plan amendment as a termination under
Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a
Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multiemployer Plan; or (f) the imposition of any

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liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under
Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.

     “Euro” and “EUR” mean the lawful currency of the Participating Member States
introduced in accordance with the EMU Legislation.

     “Eurodollar Base Rate” has the meaning specified in the definition of Eurodollar Rate.

     “Eurodollar Rate” means, for any Interest Period with respect to a Eurodollar Rate
Loan, a rate per annum determined by the Administrative Agent pursuant to the following formula:

	 	 	 	 	 	 	 
	Eurodollar Rate

	 	=
	 	Eurodollar Base Rate
	 	 
	 	 	 	 	 
	 	 	1.00 – Eurodollar Reserve Percentage	 	 

     Where,

     “Eurodollar Base Rate” means, for such Interest Period, the rate per annum equal to
the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other
commercially available source providing quotations of BBA LIBOR as designated by the Administrative
Agent from time to time) at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such
Interest Period) with a term equivalent to such Interest Period. If such rate is not available at
such time for any reason, then the “Eurodollar Base Rate” for such Interest Period shall be the
rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars
for delivery on the first day of such Interest Period in same day funds in the approximate amount
of the Eurodollar Rate Loan being made, continued or converted by Bank of America and with a term
equivalent to such Interest Period would be offered by Bank of America’s London Branch to major
banks in the London interbank eurodollar market at their request at approximately 11:00 a.m.
(London time) two Business Days prior to the commencement of such Interest Period.

     “Eurodollar Reserve Percentage” means, for any day during any Interest Period, the
reserve percentage (expressed as a decimal, carried out to five decimal places) in effect on such
day, whether or not applicable to any Lender, under regulations issued from time to time by the FRB
for determining the maximum reserve requirement (including any emergency, supplemental or other
marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as
“Eurocurrency liabilities”). The Eurodollar Rate for each outstanding Eurodollar Rate Loan shall
be adjusted automatically as of the effective date of any change in the Eurodollar Reserve
Percentage.

     “Eurodollar Rate Loan” means a Revolving Credit Loan or Term Loan that bears interest
at a rate based on the Eurodollar Rate.

     “Event of Default” has the meaning specified in Section 8.01.

     “Excluded Subsidiaries” means: (a) Parker Drilling Investment Company, an Oklahoma
corporation, (b) PKD Sales Corporation, an Oklahoma corporation, (c) any Foreign Subsidiary and (d)
any Domestic Subsidiary owned by any Foreign Subsidiary; provided, that a Subsidiary

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shall cease to be an Excluded Subsidiary if either (y) it provides a guaranty of the
obligations under any Indenture or (z) in the case of each of Parker Drilling Investment Company
and PKD Sales Corporation, it ceases to be an “Unrestricted Subsidiary” under the Indentures.

     “Excluded Taxes” means, with respect to the Administrative Agent, any Lender, any L/C
Issuer or any other recipient of any payment to be made by or on account of any obligation of the
Borrower hereunder, (a) taxes imposed on or measured by its overall net income (however
denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction
(or any political subdivision thereof) under the Laws of which such recipient is organized or in
which its principal office is located or, in the case of any Lender, in which its applicable
Lending Office is located, (b) any branch profits taxes imposed by the United States or any similar
tax imposed by any other jurisdiction in which the Borrower is located, (c) any backup withholding
tax that is required by the Code to be withheld from amounts payable to a Lender that has failed to
comply with clause (A) of Section 3.01(e)(ii), and (d) in the case of a Foreign Lender
(other than an assignee pursuant to a request by the Borrower under Section 10.13), any
United States withholding tax that (i) is required to be imposed on amounts payable to such Foreign
Lender pursuant to the Laws in force at the time such Foreign Lender becomes a party hereto (or
designates a new Lending Office) or (ii) is attributable to such Foreign Lender’s failure or
inability (other than as a result of a Change in Law) to comply with clause (B) of Section
3.01(e)(ii), except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new Lending Office (or assignment), to receive additional
amounts from the Borrower with respect to such withholding tax pursuant to Section 3.01(a)(ii)
or (iii).

     “Existing Credit Agreement” means that certain $60,000,000 Amended and Restated Credit
Agreement, dated as of September 20, 2007 among the Borrower, Lehman Brothers Inc., as sole
advisor, sole lead arranger and sole bookrunner, Bank of America, as syndication agent, Lehman
Commercial Paper Inc., as administrative agent, and a syndicate of lenders.

     “Existing L/C Issuer” means each issuer of the Existing Letters of Credit.

     “Existing Letters of Credit” means each letter of credit described in Schedule
1.01(a) attached hereto.

     “Facility” means the Term Loan Facility or the Revolving Credit Facility, as the
context may require.

     “Federal Funds Rate” means, for any day, the rate per annum equal to the weighted
average of the rates on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of
New York on the Business Day next succeeding such day; provided that (a) if such day is not
a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such
rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day
shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%)
charged to Bank of America on such day on such transactions as determined by the Administrative
Agent.

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     “Fee Letter” means the letter agreement, dated April 18, 2008, among the Borrower, the
Administrative Agent and Banc of America Securities Inc.

     “Foreign Government Scheme or Arrangement” has the meaning specified in Section
5.12(d).

     “Foreign Lender” means, with respect to the Borrower, any Lender that is organized
under the Laws of a jurisdiction other than that in which the Borrower is resident for tax purposes
(including such a Lender when acting in the capacity of an L/C Issuer). For purposes of this
definition, the United States, each State thereof and the District of Columbia shall be deemed to
constitute a single jurisdiction.

     “Foreign Plan” has the meaning specified in Section 5.12(d).

     “Foreign Subsidiary” means any Subsidiary that is organized under the laws of a
jurisdiction other than the United States, a State thereof or the District of Columbia.

     “FRB” means the Board of Governors of the Federal Reserve System of the United States.

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

     “GAAP” means generally accepted accounting principles in the United States set forth
in the opinions and pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board or such other principles as may be approved by a significant segment of the
accounting profession in the United States, that are applicable to the circumstances as of the date
of determination, consistently applied.

     “Governmental Authority” means the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or the European Central
Bank).

     “Guarantee” means, as to any Person, any (a) obligation, contingent or otherwise, of
such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other
obligation payable or performable by another Person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation, (ii) to purchase or lease property, securities or services for the purpose of
assuring the obligee in respect of such Indebtedness or other obligation of the payment or
performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of income or cash flow of
the primary obligor so as to enable the primary obligor to pay such Indebtedness or

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20

 

other obligation, or (iv) entered into for the purpose of assuring in any other manner the
obligee in respect of such Indebtedness or other obligation of the payment or performance thereof
or to protect such obligee against loss in respect thereof (in whole or in part), or (b) Lien on
any assets of such Person securing any Indebtedness or other obligation of any other Person,
whether or not such Indebtedness or other obligation is assumed by such Person (or any right,
contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien);
provided, however, that the term Guarantee shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related
primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect thereof as
determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a
corresponding meaning.

     “Hazardous Materials” means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any nature regulated pursuant
to, or could give rise to liability under, any Environmental Law.

     “Hedge Bank” means (a) any Person that, at the time it enters into a Swap Contract
permitted under Article VI or VII, is a Lender or an Affiliate of a Lender, in its
capacity as a party to such Swap Contract and (b) any Lender or Affiliate of a Lender that is party
to a Swap Contract with the Borrower or one of its Subsidiaries as of the Closing Date or the date
that such Person or such Person’s Affiliate becomes a Lender hereunder.

     “High Strikes Agreements” has the meaning specified in Schedule 5.14.

     “Identified Additional Material Subsidiary” means each of the following Subsidiaries
of the Borrower: (a) Anachoreta, Inc., a Nevada corporation, (b) Parker Drilling Company North
America, Inc., a Nevada corporation, (c) Parker Drilling Company of Niger, an Oklahoma corporation,
(d) Parker Drilling Company of Oklahoma, Incorporated, an Oklahoma corporation, (e) Parker Drilling
Company of South America, Inc., an Oklahoma corporation, (f) Parker Technology, L.L.C., a Louisiana
limited liability company, and (g) Parker-VSE, Inc., a Nevada corporation.

     “Immaterial Account” means any account in which the aggregate amount on deposit (or,
in the case of any securities account, the total fair market value of all securities held in such
account) does not at any time exceed $25,000.

     “Immaterial Subsidiary” means any Subsidiary designated by the Borrower, by written
notice to the Administrative Agent, as an “Immaterial Subsidiary”; provided, that (a) no
Subsidiary may be so designated unless such Subsidiary (i) had assets having an aggregate book
value, as of the end of the fiscal year most recently ended, not exceeding $1,000,000 and (ii) had
Consolidated Net Income not exceeding $1,000,000 for such fiscal year and (b) any Subsidiary shall
automatically cease to be an Immaterial Subsidiary if at the end of any subsequent fiscal year such
Subsidiary would not meet the requirements set forth in the foregoing clause (a).

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21

 

     “Indebtedness” means, as to any Person at a particular time, without duplication, all
of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

     (a) all obligations of such Person for borrowed money;

     (b) all obligations of such Person for the deferred purchase price of Property or
services (other than trade payables incurred in the ordinary course of such Person’s
business);

     (c) all obligations of such Person evidenced by bonds, debentures, notes, or other
similar instruments;

     (d) all indebtedness created or arising under any conditional sale or other title
retention agreement with respect to Property acquired by such Person (even though the rights
and remedies of the seller or lender under such agreement in the event of default are
limited to repossession or sale of such Property);

     (e) all Attributable Indebtedness in respect of Capitalized Leases and Synthetic Lease
Obligations of such Person and all Synthetic Debt of such Person;

     (f) the maximum amount of all obligations of such Person, contingent or otherwise, as
an account party or applicant under acceptance, letter of credit or similar facilities;

     (g) all obligations of such Person, contingent or otherwise, to purchase, redeem,
retire, defease or otherwise acquire for value (other than through the issuance of common
stock of such Person) any Equity Interest in such Person or any other Person, other than any
such obligations the payment of which would be permitted by Section 7.06(c) or
(d);

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

     (i) all obligations of the kind referred to in clauses (a) through (h) above secured by
(or for which the holder of such obligation has an existing right, contingent or otherwise,
to be secured by) any Lien on Property (including, without limitation, accounts and contract
rights) owned by such Person, whether or not such Person has assumed or become liable for
the payment of such obligation; and

     (j) for purposes of Section 8.01(e) only, net obligations of such Person under
any Swap Contract.

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

Credit Agreement

22

 

     “Indemnified Taxes” means Taxes other than Excluded Taxes.

     “Indemnitees” has the meaning specified in Section 10.04(b).

     “Indentures” means the collective reference to the Convertible Notes Indenture and the
Senior Notes Indenture.

     “Information” has the meaning specified in Section 10.07.

     “Initial Appraisal Report” means, collectively, (a) a satisfactory independent
collateral appraisal of the assets of Quail Tools prepared during the twelve-month period ending on
the Closing Date, including in connection with the Existing Credit Agreement and (b) a satisfactory
independent collateral appraisal of the Specified Rigs prepared during the three-month period
ending on the Closing Date, in each case, prepared by a third-party collateral appraiser reasonably
acceptable to the Administrative Agent in its sole discretion.

     “Initial Projections” has the meaning specified in Section 4.01(a)(xii).

     “Intellectual Property” means the collective reference to all rights, priorities and
privileges relating to intellectual property, whether arising under United States, multinational or
foreign laws or otherwise, including, without limitation, copyrights, copyright licenses, patents,
patent licenses, trademarks, trademark licenses, technology, know-how and processes, and all rights
to sue at law or in equity for any infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.

     “Interest Payment Date” means, (a) as to any Eurodollar Rate Loan, the last day of
each Interest Period applicable to such Loan and the Maturity Date of the Facility under which such
Loan was made; provided, however, that if any Interest Period for a Eurodollar Rate
Loan exceeds three months, the respective dates that fall every three months after the beginning of
such Interest Period shall also be Interest Payment Dates; and (b) as to any Base Rate Loan, the
last Business Day of each March, June, September and December and the Maturity Date of the Facility
under which such Loan was made.

     “Interest Period” means, as to each Eurodollar Rate Loan, the period commencing on the
date such Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar Rate Loan
and ending on the date one, two, three or six months thereafter, as selected by the Borrower in its
Committed Loan Notice; provided that:

     (i) any Interest Period that would otherwise end on a day that is not a Business Day
shall be extended to the next succeeding Business Day unless such Business Day falls in
another calendar month, in which case such Interest Period shall end on the next preceding
Business Day;

     (ii) any Interest Period that begins on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the calendar month at the
end of such Interest Period) shall end on the last Business Day of the calendar month at the
end of such Interest Period; and

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     (iii) no Interest Period shall extend beyond the Maturity Date of the Facility under
which such Loan was made.

     “Investment” means, as to any Person, any direct or indirect acquisition or investment
by such Person, whether by means of (a) the purchase or other acquisition of Equity Interests of
another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of,
or purchase or other acquisition of any other debt or interest in, another Person (including by way
of Guarantee or otherwise), or (c) the purchase or other acquisition (in one transaction or a
series of transactions) of assets of another Person that constitute a business unit or all or a
substantial part of the business of, such Person.

     “IRS” means the United States Internal Revenue Service.

     “ISP” means, with respect to any Letter of Credit, the “International Standby
Practices 1998” published by the Institute of International Banking Law & Practice, Inc. (or such
later version thereof as may be in effect at the time of issuance).

     “Issuer Documents” means with respect to any Letter of Credit, the Letter of Credit
Application, and any other document, agreement and instrument entered into by the applicable L/C
Issuer and the Borrower (or any Subsidiary) or in favor of such L/C Issuer and relating to such
Letter of Credit.

     “Laws” means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or
judicial precedents or authorities, including the interpretation or administration thereof by any
Governmental Authority charged with the enforcement, interpretation or administration thereof, and
all applicable administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authority, in each case whether or not having the
force of law.

     “L/C Advance” means, with respect to each Revolving Credit Lender, such Lender’s
funding of its participation in any L/C Borrowing in accordance with its Applicable Revolving
Credit Percentage. All L/C Advances shall be denominated in Dollars.

     “L/C Borrowing” means an extension of credit resulting from a drawing under any Letter
of Credit which has not been reimbursed on the date when made or refinanced as a Revolving Credit
Borrowing. All L/C Borrowings shall be denominated in Dollars.

     “L/C Credit Extension” means, with respect to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the increase of the amount thereof.

     “L/C Issuer” means (a) in respect of the Existing Letters of Credit only, each
Existing L/C Issuer; (b) in respect of each Letter of Credit issued hereunder on or after the
Closing Date, Bank of America in its capacity as issuer of Letters of Credit hereunder, (c) any
Lender from time to time designated by the Borrower as an L/C Issuer with the consent of such
Lender and the Administrative Agent, or (d) any successor issuer of Letters of Credit hereunder.

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     “L/C Obligations” means, as at any date of determination, the aggregate amount
available to be drawn under all outstanding Letters of Credit plus the aggregate of all
Unreimbursed Amounts, including all L/C Borrowings. For purposes of computing the amount available
to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in
accordance with Section 1.09. For all purposes of this Agreement, if on any date of
determination a Letter of Credit has expired by its terms but any amount may still be drawn
thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be
deemed to be “outstanding” in the amount so remaining available to be drawn.

     “Lender” has the meaning specified in the introductory paragraph hereto.

     “Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other office or offices as
a Lender may from time to time notify the Borrower and the Administrative Agent.

     “Letter of Credit” means any standby or commercial letter of credit issued hereunder
and shall be deemed to include the Existing Letters of Credit. Letters of Credit may be issued in
Dollars or in an Alternative Currency.

     “Letter of Credit Application” means an application and agreement for the issuance or
amendment of a Letter of Credit in the form from time to time in use by the relevant L/C Issuer.

     “Letter of Credit Expiration Date” means the day that is seven days prior to the
Maturity Date then in effect for the Revolving Credit Facility (or, if such day is not a Business
Day, the next preceding Business Day).

     “Letter of Credit Fee” has the meaning specified in Section 2.03(i).

     “Letter of Credit Sublimit” means an amount equal to $50,000,000. The Letter of
Credit Sublimit is part of, and not in addition to, the Revolving Credit Facility.

     “Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge, or other security interest or preferential
arrangement in the nature of a security interest of any kind or nature whatsoever (including any
conditional sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having substantially the same
economic effect as any of the foregoing).

     “Loan” means an extension of credit by a Lender to the Borrower under Article
II in the form of a Term Loan or a Revolving Credit Loan.

     “Loan Documents” means, collectively, this Agreement, the Notes, the Subsidiary
Guaranty, the Collateral Documents, the Fee Letter and each Issuer Document.

     “Loan Parties” means, collectively, the Borrower and each Subsidiary Guarantor;
provided, however, that solely for purposes of Section 4.01, “Loan Party”
shall exclude each Identified Additional Material Subsidiary.

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     “Lockbox Agreement” means in respect of each lockbox account, and related lockbox and
collection account, an agreement, in form and substance reasonably satisfactory to the
Administrative Agent and the Borrower, pursuant to which the bank that maintains such account and
the Borrower or the Subsidiary Guarantor, as the case may be, that is the named owner of such
account shall agree with the Administrative Agent (a) that such lockbox and accounts shall be used
solely for the collection and deposit of proceeds of Collateral, (b) that, upon notice from the
Administrative Agent, such bank shall transfer at the end of each business day all collected funds
in any such account to a Concentration Account and (c) the Administrative Agent agrees that it will
not give the notice described in the foregoing clause (b) unless an Event of Default has occurred
and is continuing. Each Lockbox Agreement shall contain such other terms as shall be customary for
agreements of such type.

     “Material Adverse Effect” means any event, development or circumstance that has had or
could reasonably be expected to have (a) a material adverse effect upon the business, assets,
properties or financial condition of the Borrower and its Subsidiaries taken as a whole; (b) a
material impairment of the rights and remedies of the Administrative Agent or any Lender under any
Loan Document or of the ability of any Loan Party to perform its obligations under any Loan
Document to which it is a party; or (c) a material adverse effect upon the legality, validity or
enforceability against any Loan Party of any material provision of any Loan Document to which it is
a party.

     “Material Subsidiary” means each Domestic Subsidiary that is not an Immaterial
Subsidiary.

     “Maturity Date” means with respect to each Facility, May 14, 2013; provided,
however, that if such date is not a Business Day, the Maturity Date shall be the next
preceding Business Day.

     “Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

     “Mortgage” has the meaning specified in Section 4.01(a)(iv).

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

     “Net Amount” means with respect to any Account at any time, the face amount of such
Account on any date less (to the extent not otherwise deducted pursuant to the definition of
“Eligible Account”) any and all returns, rebates, discounts (which may, at the Administrative
Agent’s option, be calculated on shortest terms), credits, allowances or taxes (including any
sales, excise or other taxes) at any time issued, owing, claimed by any account debtor, granted,
outstanding or payable in connection with, or any interest accrued on the amount of, such Account
at such time.

     “Net Book Value” means (i) Cost minus (ii) accumulated depreciation calculated
(A) in accordance with GAAP and (B) consistently with the Quail Tools’ accounting practices as of
the Closing Date.

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     “Net Cash Proceeds” means, in connection with any issuance or sale of debt securities
or instruments or the incurrence of loans, the cash proceeds received from such issuance or
incurrence, net of attorneys’ fees, investment banking fees, accountants’ fees, underwriting
discounts and commissions and other customary fees and expenses actually incurred in connection
therewith.

     “Net Equipment OLV” means, as reasonably determined by the Administrative Agent in
good faith based on the Initial Appraisal Report or the most recent appraisal conducted pursuant to
Section 6.12, the Value of the Eligible Rental Equipment that is estimated to be recoverable in an
orderly liquidation of such Equipment (less applicable freight and duty charges, if any), net of
liquidation expenses.

     “Net Loss Proceeds” means, in connection with any Casualty Event, all insurance
proceeds or other amounts actually received, less any deductibles applied or to be paid and any
costs and expenses incurred in the collection thereof.

     “Net Specified Rigs OLV” means as reasonably determined by the Administrative Agent in
good faith based upon the Initial Appraisal Report or the most recent appraisal conducted pursuant
to Section 6.12, as applicable, the value of the Eligible Specified Rigs that is estimated
to be recoverable in an orderly liquidation of such Eligible Specified Rigs (less applicable
freight and duty charges, if any), net of estimated liquidation expenses.

     “Note” means a Term Note or a Revolving Credit Note, as the context may require.

     “Obligations” means all advances to, and debts, liabilities, obligations, covenants
and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any
Loan, Letter of Credit, Secured Cash Management Agreement or Secured Hedge Agreement, whether
direct or indirect (including those acquired by assumption), absolute or contingent, due or to
become due, now existing or hereafter arising and including interest and fees that accrue after the
commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any
Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such
interest and fees are allowed claims in such proceeding; provided, that (a) obligations of
the Borrower or any Subsidiary under any Secured Cash Management Agreement or Secured Hedge
Agreement shall be secured and guaranteed pursuant to the Collateral Documents only to the extent
that, and for so long as, the other Obligations are so secured and guaranteed and (b) any release
of Collateral or Subsidiary Guarantors effected in the manner permitted by this Agreement shall not
require the consent of holders of obligations under the Secured Cash Management Agreements and
Secured Hedge Agreements.

     “Ordinary Course of Business” means with respect to any transaction involving any
Person, the ordinary course of such Person’s business, as conducted by such Person in accordance
with past practices and undertaken by such Person in good faith and not for the purpose of evading
any covenant or restriction in any Loan Document.

     “Organization Documents” means, (a) with respect to any corporation, the certificate
or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents
with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the

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certificate or articles of formation or organization and operating agreement; and (c) with
respect to any partnership, joint venture, trust or other form of business entity, the partnership,
joint venture or other applicable agreement of formation or organization and any agreement,
instrument, filing or notice with respect thereto filed in connection with its formation or
organization with the applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or organization of such
entity.

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

     “Outstanding Amount” means (a) with respect to Term Loans and Revolving Loans on any
date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and
prepayments or repayments of such Term Loans and Revolving Loans, as the case may be, occurring on
such date; (b) with respect to any L/C Obligations on any date, the Dollar Equivalent of the amount
of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on
such date and any other changes in the aggregate amount of the L/C Obligations as of such date,
including as a result of any reimbursements by the Borrower of Unreimbursed Amounts or any
reductions in the maximum amount available for drawing under Letters of Credit taking effect on
such date.

     “Participant” has the meaning specified in Section 10.06(d).

     “Participating Member State” means each state so described in any EMU Legislation.

     “Paying Subsidiary” has the meaning specified in Section 7.06(a).

     “PBGC” means the Pension Benefit Guaranty Corporation.

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

     “Permitted Discretion” means the Administrative Agent’s judgment exercised in good
faith based upon its consideration of any factor which the Administrative Agent believes in good
faith: (a) will or reasonably could be expected to adversely affect the value of the Borrowing
Base Collateral, the enforceability or priority of the Administrative Agent’s Liens thereon or the
amount which the Administrative Agent, the Lenders or any L/C Issuer would be likely to receive
(after giving consideration to delays in payment and costs of enforcement) in the liquidation of
such Collateral; (b) suggests that any collateral report of financial information delivered to the
Administrative Agent by any Person, with respect to the Borrowing Base Collateral is incomplete,
inaccurate or misleading in any material respect; (c) materially increases the likelihood of a
bankruptcy, reorganization or other insolvency proceeding involving

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the Borrower or any Subsidiary of the Borrower or any of the Borrowing Base Collateral; or (d)
creates or reasonably could be expected to create a Default or Event of Default. In exercising such
judgment, the Administrative Agent may consider such factors already included in or tested by the
definition of Eligible Accounts Receivable, Eligible Rental Equipment or Eligible Specified Rigs,
as well as any of the following: (i) the changes in collection history and dilution with respect
to the Accounts; (ii) changes in demand for, pricing of, or product mix of Rental Equipment or
Specified Rigs; (iii) changes in any concentration of risk with respect to the Borrower’s or any of
its Subsidiaries’ Accounts, Rental Equipment or Specified Rigs; and (iv) any other factors that
change in any material respect the credit risk of lending to the Borrower on the security of the
Borrower’s or any of its Subsidiaries Accounts, Rental Equipment or Specified Rigs. The burden of
establishing lack of good faith hereunder shall be on the Borrower.

     “Permitted Liens” means any Liens permitted by subsections (a), (b), (c), (d), (e) and
(n) of Section 7.01.

     “Person” means any natural person, corporation, limited liability company, trust,
joint venture, association, company, partnership, Governmental Authority or other entity.

     “Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of
ERISA) established by the Borrower or, with respect to any such plan that is subject to Section 412
of the Code or Title IV of ERISA, any ERISA Affiliate.

     “Platform” has the meaning specified in Section 6.02.

     “Pledged Debt” has the meaning specified in the Security Agreement.

     “Pledged Equity” has the meaning specified in the Security Agreement.

     “Projections” has the meaning specified in Section 6.02(c) and includes the
Initial Projections.

     “Property” means any right or interest in or to property of any kind whatsoever,
whether real, personal or mixed and whether tangible or intangible, including, without limitation,
Equity Interests.

     “Public Lender” has the meaning specified in Section 6.02.

     “Quail Rental Assets” means all Rental Equipment owned by Quail Tools.

     “Quail Tools” means Quail Tools, L.P. an Oklahoma limited partnership.

     “Refinancing Debt” means any Indebtedness permitted by clause (ii) of Section
7.03(d).

     “Register” has the meaning specified in Section 10.06(c).

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

     “Rental Equipment” means Inventory (as defined in the UCC) which is of a type offered
for lease in the Ordinary Course of Business as conducted on the Closing Date.

     “Reportable Event” means any of the events set forth in Section 4043(c) of ERISA,
other than events for which the 30 day notice period has been waived.

     “Request for Credit Extension” means (a) with respect to a Borrowing, conversion or
continuation of Term Loans or Revolving Credit Loans, a Committed Loan Notice, and (b) with respect
to an L/C Credit Extension, a Letter of Credit Application.

     “Required Lenders” means, as of any date of determination, Lenders holding more than
50% of the sum of the (a) Total Outstandings (with the aggregate amount of each Revolving Credit
Lender’s risk participation and funded participation in L/C Obligations being deemed “held” by such
Revolving Credit Lender for purposes of this definition) and (b) aggregate unused Revolving Credit
Commitments; provided that the unused Revolving Credit Commitment of, and the portion of the Total
Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making
a determination of Required Lenders.

     “Required Revolving Lenders” means, as of any date of determination, Revolving Credit
Lenders holding more than 50% of the sum of the (a) Total Revolving Credit Outstandings (with the
aggregate amount of each Revolving Credit Lender’s risk participation and funded participation in
L/C Obligations being deemed “held” by such Revolving Credit Lender for purposes of this
definition) and (b) aggregate unused Revolving Credit Commitments; provided that the unused
Revolving Credit Commitment of, and the portion of the Total Revolving Credit Outstandings held or
deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of
Required Revolving Lenders.

     “Required Term Loan Lenders” means, as of any date of determination, Term Loan Lenders
holding more than 50% of the Term Loan Facility on such date; provided that the portion of the Term
Loan Facility held by any Defaulting Lender shall be excluded for purposes of making a
determination of Required Term Loan Lenders.

     “Requirement of Law” means as to any Person, the Organization Documents of such
Person, and any Law or determination of an arbitrator, 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” means the chief executive officer, president, chief financial
officer, treasurer, or controller of a Loan Party, but in any event, with respect to financial
matters, the chief financial officer of such Loan Party and, in the case of monthly financial
statements and related Compliance Certificates, the controller or the treasurer of such Loan Party.
Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be
conclusively presumed to have been authorized by all necessary corporate, partnership and/or other
action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed
to have acted on behalf of such Loan Party.

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     “Restricted Payment” has the meaning specified in Section 7.06.

     “Revaluation Date” means with respect to any Letter of Credit, each of the following:
(a) each date of issuance of a Letter of Credit denominated in an Alternative Currency, (b) each
date of an amendment of any such Letter of Credit having the effect of increasing the amount
thereof (solely with respect to the increased amount), (c) each date of any payment by the
applicable L/C Issuer under any Letter of Credit denominated in an Alternative Currency, and (d)
such additional dates as the Administrative Agent or the applicable L/C Issuer shall determine or
the Required Lenders shall require.

     “Revolving Credit Borrowing” means a borrowing consisting of simultaneous Revolving
Credit Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest
Period made by each of the Revolving Credit Lenders pursuant to Section 2.01(b).

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

     “Revolving Credit Facility” means, at any time, the aggregate amount of the Revolving
Credit Lenders’ Revolving Credit Commitments at such time.

     “Revolving Credit Lender” means, at any time, any Lender that has a Revolving Credit
Commitment at such time.

     “Revolving Credit Loan” has the meaning specified in Section 2.01(c).

     “Revolving Credit Note” means a promissory note made by the Borrower in favor of a
Revolving Credit Lender evidencing Revolving Credit Loans made by such Revolving Credit Lender,
substantially in the form of Exhibit C-2.

     “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc. and any successor thereto.

     “SEC” means the Securities and Exchange Commission, or any Governmental Authority
succeeding to any of its principal functions.

     “Secured Cash Management Agreement” means any Cash Management Agreement that is
entered into by and between any Loan Party and any Cash Management Bank.

     “Secured Hedge Agreement” means any Swap Contract permitted under Article VI
or VII that is entered into by and between any Loan Party and any Hedge Bank.

     “Secured Parties” means, collectively, the Administrative Agent, each other Agent, the
Lenders, the L/C Issuers, the Hedge Banks, the Cash Management Banks, each co-agent or sub-

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agent appointed by the Administrative Agent from time to time pursuant to Section
9.05, and the other Persons the Obligations owing to which are or are purported to be secured
by the Collateral under the terms of the Collateral Documents.

     “Security Agreement” has the meaning specified in Section 4.01(a)(iii).

     “Security Agreement Supplement” has the meaning specified in the Security Agreement.

     “Senior Notes” means the $225,000,000 aggregate principal amount of senior unsecured
notes of the Borrower issued pursuant to the Senior Notes Indenture.

     “Senior Notes Indenture” means that certain Indenture, dated as of October 10, 2003,
in respect of the Senior Notes, together with all instruments and other agreements entered into by
the Borrower or such Subsidiaries in connection therewith, as the same may be amended, supplemented
or otherwise modified from time to time in accordance with Section 7.07.

     “Solvent” and “Solvency” mean, with respect to any Person on any date of
determination, that on such date (a) the fair value of the property of such Person is greater than
the total amount of liabilities, including contingent liabilities, of such Person, (b) the present
fair salable value of the assets of such Person is not less than the amount that will be required
to pay the probable liability of such Person on its debts as they become absolute and matured,
(c) such Person does not intend to, and does not believe that it will, incur debts or liabilities
beyond such Person’s ability to pay such debts and liabilities as they mature, (d) such Person is
not engaged in business or a transaction, and is not about to engage in business or a transaction,
for which such Person’s property would constitute an unreasonably small capital, and (e) such
Person is able to pay its debts and liabilities, contingent obligations and other commitments as
they mature in the ordinary course of business. The amount of contingent liabilities at any time
shall be computed as the amount that, in the light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an actual or matured
liability.

     “Specified Personal Property” means any Property of a type in which a Lien is
purported to be granted pursuant to the Security Agreement or Mortgage.

     “Specified Rigs” means each of the barge rigs, other than workover rigs and those that
are not capable of drilling to depths of 15,000 feet or more, as located and operating in the
continental United States or the Gulf of Mexico waters subject to state or Federal jurisdiction,
and owned by the Borrower or any Subsidiary Guarantor described in Schedule 5.07 and each
such other barge rig acquired after the Closing Date and made subject to a Mortgage pursuant to
Section 6.09.

     “Spot Rate” for a currency means the rate determined by the Administrative Agent or
the relevant L/C Issuer, as applicable, to be the rate quoted by the Person acting in such capacity
as the spot rate for the purchase by such Person of such currency with another currency through its
principal foreign exchange trading office at approximately 11:00 a.m. on the date two Business Days
prior to the date as of which the foreign exchange computation is made; provided that the
Administrative Agent or the relevant L/C Issuer may obtain such spot rate from another financial
institution designated by the Administrative Agent or the relevant L/C Issuer if the Person acting
in such capacity does not have as of the date of determination a spot buying rate for any such

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currency; and provided further that the relevant L/C Issuer may use such spot
rate quoted on the date as of which the foreign exchange computation is made in the case of any
Letter of Credit denominated in an Alternative Currency.

     “Subsidiary” of a Person means a corporation, partnership, joint venture, limited
liability company or other business entity of which a majority of the shares of securities or other
interests having ordinary voting power for the election of directors or other governing body (other
than securities or interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise controlled, directly,
or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise
specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary
or Subsidiaries of the Borrower.

     “Subsidiary Guarantors” means, collectively, (a) each Material Subsidiary of the
Borrower other than any Excluded Subsidiary and (b) Quail USA, LLC.

     “Subsidiary Guaranty” means the Subsidiary Guaranty made by the Subsidiary Guarantors
in favor of the Administrative Agent and the Lenders, substantially in the form of Exhibit
F, together with each other guaranty and guaranty supplement delivered pursuant to Section
6.09.

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

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

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     “Syndication Agent” means Lehman Commercial Paper Inc. in its capacity as syndication
agent under any of the Loan Documents, or any successor syndication agent.

     “Synthetic Debt” means, with respect to any Person as of any date of determination
thereof, all obligations of such Person in respect of transactions entered into by such Person that
are intended to function primarily as a borrowing of funds but are not otherwise included in the
definition of “Indebtedness” or as a liability on the consolidated balance sheet of such Person and
its Subsidiaries in accordance with GAAP.

     “Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a
so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or
possession of property (including sale and leaseback transactions), in each case, creating
obligations that do not appear on the balance sheet of such Person but which, upon the application
of any Debtor Relief Laws to such Person, would be characterized as the indebtedness of such Person
(without regard to accounting treatment).

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

     “Term Loan” means an advance made by any Term Loan Lender under the Term Loan
Facility.

     “Term Loan Borrowing” means a borrowing consisting of simultaneous Term Loans of the
same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each
of the Term Loan Lenders pursuant to Section 2.01(a).

     “Term Loan Commitment” means, as to each Term Loan Lender, its obligation to make Term
Loans to the Borrower pursuant to Section 2.01(a) in an aggregate principal amount at any
one time outstanding not to exceed the amount set forth opposite such Term Loan Lender’s name on
Schedule 2.01 under the caption “Term Loan Commitment” or opposite such caption in the
Assignment and Assumption pursuant to which such Term Loan Lender becomes a party hereto, as
applicable, as such amount may be adjusted from time to time in accordance with this Agreement.

     “Term Loan Facility” means, at any time, (a) at any time during the Availability
Period in respect of such Facility, the sum of (i) the aggregate amount of the Term Loan
Commitments at such time and (ii) the aggregate principal amount of the Term Loans of all Term Loan
Lenders outstanding at such time and (b) thereafter, the aggregate principal amount of the Term
Loans of all Term Loan Lenders outstanding at such time.

     “Term Loan Lender” means (a) at any time on or prior to the Closing Date, any Lender
that has a Term Loan Commitment at such time and (b) at any time after the Closing Date, any Lender
that holds Term Loans at such time.

     “Term Note” means a promissory note made by the Borrower in favor of a Term Loan
Lender evidencing Term Loans made by such Term Loan Lender, substantially in the form of
Exhibit C-1.

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     “Threshold Amount” means $10,000,000.

     “Total Revolving Credit Outstandings” means the aggregate Outstanding Amount of all
Revolving Credit Loans and L/C Obligations.

     “Total Outstandings” means the aggregate Outstanding Amount of all Loans and all L/C
Obligations.

     “Type” means, with respect to a Loan, its character as a Base Rate Loan or a
Eurodollar Rate Loan.

     “UCC” means the Uniform Commercial Code as in effect in the State of New York;
provided that, if perfection or the effect of perfection or non-perfection or the priority
of any security interest in any Collateral is governed by the Uniform Commercial Code as in effect
in a jurisdiction other than the State of New York, “UCC” means the Uniform Commercial Code
as in effect from time to time in such other jurisdiction for purposes of the provisions hereof
relating to such perfection, effect of perfection or non-perfection or priority.

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

     “United States” and “U.S.” mean the United States of America.

     “Unreimbursed Amount” has the meaning specified in Section 2.03(c)(i).

     “Value” means with reference to the value of the Rental Equipment, value determined on
the basis of the lower of cost or market of such Rental Equipment in accordance with GAAP, with the
cost thereof calculated on a first-in, first-out basis determined in accordance with GAAP.

     “Vendor Lease” means a lease pursuant to which Goods (as defined in the UCC) are
leased from a Vendor Lessor, whether or not such lease constitutes an operating or a capital lease
under GAAP and whether or not such lease constitutes a true lease or a secured transaction under
the UCC or any other Requirement of Law.

     “Vendor Lessor” means a Person who leases Goods (as defined in the UCC) to another
Person pursuant to a Vendor Lease.

     “Wholly Owned Subsidiary” means, as to any Person, any other Person all of the Equity
Interests of which (other than directors’ qualifying shares required by law) is owned by such
Person directly and/or through other Wholly Owned Subsidiaries.

     “Wholly Owned Subsidiary Guarantor” means any Subsidiary Guarantor that is a Wholly
Owned Subsidiary of the Borrower.

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     1.02 Other Interpretive Provisions. With reference to this Agreement and each other Loan
Document, unless otherwise specified herein or in such other Loan Document:

     (a) The definitions of terms herein shall apply equally to the singular and plural forms of
the terms defined. Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words “include,” “includes” and
“including” shall be deemed to be followed by the phrase “without limitation.” The word
“will” shall be construed to have the same meaning and effect as the word “shall.”
Unless the context requires otherwise, (i) any definition of or reference to any agreement,
instrument or other document (including any Organization Document) shall be construed as referring
to such agreement, instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements or modifications
set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be
construed to include such Person’s successors and assigns, (iii) the words “herein,”
“hereof” and “hereunder,” and words of similar import when used in any Loan
Document, shall be construed to refer to such Loan Document in its entirety and not to any
particular provision thereof, (iv) all references in a Loan Document to Articles, Sections,
Preliminary Statements, Exhibits and Schedules shall be construed to refer to Articles and Sections
of, and Preliminary Statements, Exhibits and Schedules to, the Loan Document in which such
references appear, (v) any reference to any law shall include all statutory and regulatory
provisions consolidating, amending, replacing or interpreting such law and any reference to any law
or regulation shall, unless otherwise specified, refer to such law or regulation as amended,
modified or supplemented from time to time, and (vi) the words “asset” and
“property” shall be construed to have the same meaning and effect and to refer to any and
all tangible and intangible assets and properties, including cash, securities, accounts and
contract rights.

     (b) In the computation of periods of time from a specified date to a later specified date, the
word “from” means “from and including;” the words “to” and “until”
each mean “to but excluding;” and the word “through” means “to and
including.”

     (c) Section headings herein and in the other Loan Documents are included for convenience of
reference only and shall not affect the interpretation of this Agreement or any other Loan
Document.

     1.03 Accounting Terms. (a) Generally. All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all financial data (including
financial ratios and other financial calculations) required to be submitted pursuant to this
Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect
from time to time, applied in a manner consistent with that used in preparing the Audited Financial
Statements, except as otherwise specifically prescribed herein.

     (b) Changes in GAAP. If at any time any change in GAAP would affect the computation
of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or
the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall
negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof
in light of such change in GAAP (subject to the approval of the Required

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Lenders); provided that, until so amended, (i) such ratio or requirement shall
continue to be computed in accordance with GAAP prior to such change therein and (ii) the Borrower
shall provide to the Administrative Agent and the Lenders financial statements and other documents
required under this Agreement or as reasonably requested hereunder setting forth a reconciliation
between calculations of such ratio or requirement made before and after giving effect to such
change in GAAP.

     1.04 Rounding. Any financial ratios required to be maintained by the Borrower pursuant to
this Agreement shall be calculated by dividing the appropriate component by the other component,
carrying the result to one place more than the number of places by which such ratio is expressed
herein and rounding the result up or down to the nearest number (with a rounding-up if there is no
nearest number).

     1.05 Exchange Rates; Currency Equivalents. (a) The Administrative Agent or the relevant L/C
Issuer, as applicable, shall determine the Spot Rates as of each Revaluation Date to be used for
calculating Dollar Equivalent amounts of L/C Credit Extensions and Outstanding Amounts denominated
in Alternative Currencies. Such Spot Rates shall become effective as of such Revaluation Date and
shall be the Spot Rates employed in converting any amounts between the applicable currencies until
the next Revaluation Date to occur. Except for purposes of financial statements delivered by Loan
Parties hereunder or calculating financial covenants hereunder or except as otherwise provided
herein, the applicable amount of any currency (other than Dollars) for purposes of the Loan
Documents shall be such Dollar Equivalent amount as so determined by the Administrative Agent or
the relevant L/C Issuer, as applicable.

     (b) Wherever in this Agreement in connection with the issuance, amendment or extension of a
Letter of Credit, an amount, such as a required minimum or multiple amount, is expressed in
Dollars, but such Letter of Credit is denominated in an Alternative Currency, such amount shall be
the relevant Alternative Currency Equivalent of such Dollar amount (rounded to the nearest unit of
such Alternative Currency, with 0.5 of a unit being rounded upward), as determined by the
Administrative Agent or the relevant L/C Issuer, as the case may be.

     1.06 Alternative Currencies. (a) The Borrower may from time to time request that Letters of
Credit be issued in a currency other than Dollars; provided that such requested currency is
a lawful currency (other than Dollars) that is readily available and freely transferable and
convertible into Dollars. In the case of any such request with respect to the issuance of Letters
of Credit, such request shall be subject to the approval of the Administrative Agent and the L/C
Issuers.

     (b) Any such request shall be made to the Administrative Agent not later than 10:00 a.m., 20
Business Days prior to the date of the desired L/C Credit Extension (or such other time or date as
may be agreed by the Administrative Agent and the L/C Issuers, in their sole discretion). In the
case of any such request pertaining to Letters of Credit, the Administrative Agent shall promptly
notify each L/C Issuer thereof. Each L/C Issuer shall notify the Administrative Agent, not later
than 10:00 a.m., ten Business Days after receipt of such request whether it consents, in its sole
discretion, to the issuance of Letters of Credit in such requested currency.

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     (c) Any failure by an L/C Issuer to respond to such request within the time period specified
in the preceding sentence shall be deemed to be a refusal by such L/C Issuer to permit Letters of
Credit to be issued in such requested currency. If the Administrative Agent and any L/C Issuer
consent to the issuance of Letters of Credit in such requested currency, the Administrative Agent
shall so notify the Borrower and such currency shall thereupon be deemed for all purposes to be an
Alternative Currency hereunder for purposes of any Letter of Credit issuances. If the
Administrative Agent shall fail to obtain consent to any request for an additional currency under
this Section 1.06, the Administrative Agent shall promptly so notify the Borrower.

     1.07 Change of Currency. (a) Each obligation of the Borrower to make a payment denominated
in the national currency unit of any member state of the European Union that adopts the Euro as its
lawful currency after the date hereof shall be redenominated into Euro at the time of such adoption
(in accordance with the EMU Legislation). If, in relation to the currency of any such member
state, the basis of accrual of interest expressed in this Agreement in respect of that currency
shall be inconsistent with any convention or practice in the London interbank market for the basis
of accrual of interest in respect of the Euro, such expressed basis shall be replaced by such
convention or practice with effect from the date on which such member state adopts the Euro as its
lawful currency.

     (b) Each provision of this Agreement shall be subject to such reasonable changes of
construction as the Administrative Agent may from time to time specify to be appropriate to reflect
the adoption of the Euro by any member state of the European Union and any relevant market
conventions or practices relating to the Euro.

     (c) Each provision of this Agreement also shall be subject to such reasonable changes of
construction as the Administrative Agent may from time to time specify to be appropriate to reflect
a change in currency of any other country and any relevant market conventions or practices relating
to the change in currency.

     1.08 Times of Day. Unless otherwise specified, all references herein to times of day shall be
references to Central time (daylight or standard, as applicable).

     1.09 Letter of Credit Amounts. Unless otherwise specified herein, the amount of a Letter of
Credit at any time shall be deemed to be the Dollar Equivalent of the stated amount of such Letter
of Credit in effect at such time; provided, however, that with respect to any
Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides
for one or more automatic increases in the stated amount thereof, the amount of such Letter of
Credit shall be deemed to be the Dollar Equivalent of the maximum stated amount of such Letter of
Credit after giving effect to all such increases, whether or not such maximum stated amount is in
effect at such time.

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ARTICLE II.

THE COMMITMENTS AND CREDIT EXTENSIONS

     2.01 The Loans.

     (a) The Term Loan Borrowing. Subject to the terms and conditions set forth herein,
each Term Loan Lender severally agrees to make up to two loans to the Borrower from time to time,
on any Business Day during the Availability Period for the Term Loan Facility, in an aggregate
amount not to exceed such Term Loan Lender’s Term Loan Commitment; provided,
however, that each Term Loan Borrowing shall be in a minimum principal amount of
$20,000,000 or, if less, the entire remaining aggregate amount of the Term Loan Commitments at such
time and provided further, after giving effect to any Term Loan Borrowing, the
Total Outstandings shall not exceed the Borrowing Base then in effect. Each Term Loan Borrowing
shall consist of Term Loans made simultaneously by the Term Loan Lenders in accordance with their
respective Applicable Percentage of the Term Loan Facility. Amounts borrowed under this
Section 2.01(a) and repaid or prepaid may not be reborrowed. Term Loans may be Base Rate
Loans or Eurodollar Rate Loans, as further provided herein.

     (b) The Revolving Credit Borrowing. Subject to the terms and conditions set forth
herein, each Revolving Credit Lender severally agrees to make loans (each such loan, a
“Revolving Credit Loan”) to the Borrower in Dollars from time to time, on any Business Day
during the Availability Period for the Revolving Credit Facility, in an aggregate amount not to
exceed at any time outstanding the amount of such Lender’s Revolving Credit Commitment;
provided, however, that after giving effect to any Revolving Credit Borrowing,
(i) the Total Revolving Credit Outstandings shall not exceed the Revolving Credit Facility,
(ii) the aggregate Outstanding Amount of the Revolving Credit Loans of any Lender, plus
such Revolving Credit Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of
all L/C Obligations shall not exceed such Revolving Credit Lender’s Revolving Credit Commitment;
and (iii) the Total Outstandings shall not exceed the Borrowing Base then in effect. Within the
limits of each Revolving Credit Lender’s Revolving Credit Commitment, and subject to the other
terms and conditions hereof, the Borrower may borrow under this Section 2.01(b), prepay
under Section 2.05, and reborrow under this Section 2.01(b). Revolving Credit
Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein.

     2.02 Borrowings, Conversions and Continuations of Loans.

     (a) Each Term Loan Borrowing, each Revolving Credit Borrowing, each conversion of Term Loans
or Revolving Credit Loans from one Type to the other, and each continuation of Eurodollar Rate
Loans shall be made upon the Borrower’s irrevocable notice to the Administrative Agent, which may
be given by telephone. Each such notice must be received by the Administrative Agent not later
than 11:00 a.m. (i) three Business Days prior to the requested date of any Borrowing of, conversion
to or continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base
Rate Loans and (ii) on the requested date of any Borrowing of Base Rate Loans. Each telephonic
notice by the Borrower pursuant to this Section 2.02(a) must be confirmed promptly by
delivery to the Administrative Agent of a written Committed Loan Notice, appropriately completed
and signed by a Responsible Officer of the Borrower. Each Borrowing of, conversion to or
continuation of Eurodollar Rate Loans shall be

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in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof.
Except as provided in Sections 2.03(c), each Borrowing of or conversion to Base Rate Loans
shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof. Each
Committed Loan Notice (whether telephonic or written) shall specify (i) whether the Borrower is
requesting a Term Loan Borrowing, a Revolving Credit Borrowing, a conversion of Term Loans or
Revolving Credit Loans from one Type to the other, or a continuation of Eurodollar Rate Loans,
(ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which
shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or
continued, (iv) the Type of Loans to be borrowed or to which existing Term Loans or Revolving
Credit Loans are to be converted, and (v) if applicable, the duration of the Interest Period with
respect thereto. If the Borrower fails to specify a Type of Loan in a Committed Loan Notice or if
the Borrower fails to give a timely notice requesting a conversion or continuation, then the
applicable Term Loans or Revolving Credit Loans shall be made as, or converted to, Base Rate Loans.
Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the
Interest Period then in effect with respect to the applicable Eurodollar Rate Loans. If the
Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any
such Committed Loan Notice, but fails to specify an Interest Period, it will be deemed to have
specified an Interest Period of one month.

     (b) Following receipt of a Committed Loan Notice, the Administrative Agent shall promptly
notify each Lender of the amount of its Applicable Percentage under the applicable Facility of the
applicable Term Loans or Revolving Credit Loans, and if no timely notice of a conversion or
continuation is provided by the Borrower, the Administrative Agent shall notify each Lender of the
details of any automatic conversion to Base Rate Loans as described in the preceding subsection.
In the case of a Term Loan Borrowing or Revolving Credit Borrowing, each Appropriate Lender shall
make the amount of its Loan available to the Administrative Agent in immediately available funds at
the Administrative Agent’s Office not later than 2:00 p.m. on the Business Day specified in the
applicable Committed Loan Notice. Upon satisfaction of the applicable conditions set forth in
Section 4.02 (and, if such Borrowing is the initial Credit Extension, Section
4.01), the Administrative Agent shall make all funds so received available to the Borrower in
like funds as received by the Administrative Agent either by (i) crediting the account of the
Borrower on the books of Bank of America with the amount of such funds or (ii) wire transfer of
such funds, in each case in accordance with instructions provided to (and reasonably acceptable to)
the Administrative Agent by the Borrower; provided, however, that if, on the date a
Committed Loan Notice with respect to a Revolving Credit Borrowing is given by the Borrower, there
are L/C Borrowings outstanding, then the proceeds of such Revolving Credit Borrowing,
first, shall be applied to the payment in full of any such L/C Borrowings, and,
second, shall be made available to the Borrower as provided above.

     (c) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued or converted
only on the last day of an Interest Period for such Eurodollar Rate Loan. During the existence of
an Event of Default, no Term Loans may be requested as, converted to or continued as Eurodollar
Rate Loans without the consent of the Required Term Loan Lenders, and no Revolving Credit Loans may
be requested as, converted to or continued as Eurodollar Rate Loans without the consent of the
Required Revolving Lenders.

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     (d) The Administrative Agent shall promptly notify the Borrower and the Lenders of the
interest rate applicable to any Interest Period for Eurodollar Rate Loans upon determination of
such interest rate. At any time that Base Rate Loans are outstanding, the Administrative Agent
shall notify the Borrower and the Lenders of any change in Bank of America’s prime rate used in
determining the Base Rate promptly following the public announcement of such change.

     After giving effect to all Term Loan Borrowings, all conversions of Term Loans from one Type
to the other, and all continuations of Term Loans as the same Type, there shall not be more than
five Interest Periods in effect with respect to Term Loans. After giving effect to all Revolving
Credit Borrowings, all conversions of Revolving Credit Loans from one Type to the other, and all
continuations of Revolving Credit Loans as the same Type, there shall not be more than five
Interest Periods in effect in respect of the Revolving Credit Facility.

     2.03 Letters of Credit.

     (a) The Letter of Credit Commitment.

     (i) Subject to the terms and conditions set forth herein, (A) each L/C Issuer agrees,
in reliance upon the agreements of the Revolving Credit Lenders set forth in this
Section 2.03, (1) from time to time on any Business Day during the period from the
Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit
denominated in Dollars or in one or more Alternative Currencies for the account of the
Borrower or its Subsidiaries, and to amend or extend Letters of Credit previously issued by
it, in accordance with Section 2.03(b), and (2) to honor drawings under the Letters
of Credit; and (B) the Revolving Credit Lenders severally agree to participate in Letters of
Credit issued for the account of the Borrower or its Subsidiaries and any drawings
thereunder; provided that after giving effect to any L/C Credit Extension with
respect to any Letter of Credit, (w) the Total Revolving Credit Outstandings shall not
exceed the Revolving Credit Facility, (x) the aggregate Outstanding Amount of the Revolving
Credit Loans of any Revolving Credit Lender, plus such Lender’s Applicable Revolving
Credit Percentage of the Outstanding Amount of all L/C Obligations, (y) the Outstanding
Amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit, and (z) the
Total Outstandings shall not exceed the Borrowing Base then in effect. Each request by the
Borrower for the issuance or amendment of a Letter of Credit shall be deemed to be a
representation by the Borrower that the L/C Credit Extension so requested complies with the
conditions set forth in the proviso to the preceding sentence. Within the foregoing limits,
and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of
Credit shall be fully revolving, and accordingly the Borrower may, during the foregoing
period, obtain Letters of Credit to replace Letters of Credit that have expired or that have
been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been
issued pursuant hereto, and from and after the Closing Date shall be subject to and governed
by the terms and conditions hereof.

     (ii) No L/C Issuer shall issue any Letter of Credit if:

     (A) subject to Section 2.03(b)(iii), the expiry date of such requested
Letter of Credit would occur more than twelve months after the date of issuance

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or last extension, unless the Required Revolving Lenders have approved such expiry
date; or

     (B) the expiry date of such requested Letter of Credit would occur after the
Letter of Credit Expiration Date, unless all the Revolving Credit Lenders have
approved such expiry date.

     (iii) No L/C Issuer shall be under any obligation to issue any Letter of Credit if:

     (A) any order, judgment or decree of any Governmental Authority or arbitrator
shall by its terms purport to enjoin or restrain such L/C Issuer from issuing such
Letter of Credit, or any Law applicable to such L/C Issuer or any request or
directive (whether or not having the force of law) from any Governmental Authority
with jurisdiction over such L/C Issuer shall prohibit, or
request that such L/C Issuer refrain from, the issuance of letters of credit
generally or such Letter of Credit in particular or shall impose upon such L/C
Issuer with respect to such Letter of Credit any restriction, reserve or capital
requirement (for which such L/C Issuer is not otherwise compensated hereunder) not
in effect on the Closing Date, or shall impose upon such L/C Issuer any unreimbursed
loss, cost or expense which was not applicable on the Closing Date and which such
L/C Issuer in good faith deems material to it;

     (B) the issuance of such Letter of Credit would violate one or more policies of
such L/C Issuer applicable to letters of credit generally;

     (C) except as otherwise agreed by the Administrative Agent and such L/C Issuer,
such Letter of Credit is in an initial stated amount less than $25,000, in the case
of a commercial Letter of Credit ,or $25,000, in the case of a standby Letter of
Credit;

     (D) except as otherwise agreed by the Administrative Agent and such L/C Issuer,
such Letter of Credit is to be denominated in a currency other than Dollars or an
Alternative Currency;

     (E) such L/C Issuer does not as of the issuance date of such requested Letter
of Credit issue Letters of Credit in the requested currency;

     (F) such Letter of Credit contains any provisions for automatic reinstatement
of the stated amount after any drawing thereunder; or

     (G) a default of any Lender’s obligations to fund under Section 2.03(c)
exists or any Lender is at such time a Defaulting Lender hereunder, unless the
applicable L/C Issuer has entered into satisfactory arrangements with the Borrower
of such Lender to eliminate such L/C Issuer’s risk with respect to such Lender.

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     (iv) No L/C Issuer shall amend any Letter of Credit if such L/C Issuer would not be
permitted at such time to issue such Letter of Credit in its amended form under the terms
hereof.

     (v) No L/C Issuer shall be under any obligation to amend any Letter of Credit if (A)
such L/C Issuer would have no obligation at such time to issue such Letter of Credit in its
amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does
not accept the proposed amendment to such Letter of Credit.

     (vi) Each L/C Issuer shall act on behalf of the Revolving Credit Lenders with respect
to any Letters of Credit issued by it and the documents associated therewith, and each L/C
Issuer shall have all of the benefits and immunities (A) provided to the Administrative
Agent in Article IX with respect to any acts taken or omissions suffered by such L/C
Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and
Issuer Documents pertaining to such Letters of Credit as fully as if the term
“Administrative Agent” as used in Article IX included such L/C Issuer with respect
to such acts or omissions, and (B) as additionally provided herein with respect to each
L/C Issuer.

     (b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of
Credit.

     (i) Each Letter of Credit shall be issued or amended, as the case may be, upon the
request of the Borrower delivered to the applicable L/C Issuer (with a copy to the
Administrative Agent) in the form of a Letter of Credit Application, appropriately completed
and signed by a Responsible Officer of the Borrower. Such Letter of Credit Application must
be received by the applicable L/C Issuer and the Administrative Agent not later than 10:00
a.m. at least two Business Days (or such later date and time as the Administrative Agent and
such L/C Issuer may agree in a particular instance in their sole discretion) prior to the
proposed issuance date or date of amendment, as the case may be. In the case of a request
for an initial issuance of a Letter of Credit, such Letter of Credit Application shall
specify in form and detail reasonably satisfactory to the applicable L/C Issuer: (A) the
proposed issuance date of the requested Letter of Credit (which shall be a Business Day);
(B) the amount and currency thereof; (C) the expiry date thereof; (D) the name and address
of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of
any drawing thereunder; (F) the full text of any certificate to be presented by such
beneficiary in case of any drawing thereunder; (G) the purpose and nature of the requested
Letter of Credit; and (H) such other matters as the applicable L/C Issuer may reasonably
require. In the case of a request for an amendment of any outstanding Letter of Credit,
such Letter of Credit Application shall specify in form and detail reasonably satisfactory
to the applicable L/C Issuer (1) the Letter of Credit to be amended; (2) the proposed date
of amendment thereof (which shall be a Business Day); (3) the nature of the proposed
amendment; and (4) such other matters as such L/C Issuer may reasonably require.
Additionally, the Borrower shall furnish to the applicable L/C Issuer and the Administrative
Agent such other documents and information pertaining to such requested Letter of Credit
issuance or amendment, including any Issuer Documents, as such L/C Issuer or the
Administrative Agent may reasonably require.

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     (ii) Promptly after receipt of any Letter of Credit Application, the applicable L/C
Issuer will confirm with the Administrative Agent (by telephone or in writing) that the
Administrative Agent has received a copy of such Letter of Credit Application from the
Borrower and, if not, such L/C Issuer will provide the Administrative Agent with a copy
thereof. Unless such L/C Issuer has received written notice from any Revolving Credit
Lender, the Administrative Agent or any Loan Party, at least one Business Day prior to the
requested date of issuance or amendment of the applicable Letter of Credit, that one or more
applicable conditions contained in Article IV shall not then be satisfied, then,
subject to the terms and conditions hereof, such L/C Issuer shall, on the requested date,
issue a Letter of Credit for the account of the Borrower (or the applicable Subsidiary) or
enter into the applicable amendment, as the case may be, in each case in accordance with
such L/C Issuer’s usual and customary business practices. Immediately upon the issuance of
each Letter of Credit, each Revolving Credit Lender shall be deemed to, and hereby
irrevocably and unconditionally agrees to, purchase from the applicable L/C Issuer a risk
participation in such Letter of Credit in an amount equal to
the product of such Revolving Credit Lender’s Applicable Revolving Credit Percentage
times the amount of such Letter of Credit.

     (iii) If the Borrower so requests in any applicable Letter of Credit Application, the
applicable L/C Issuer may, in its sole and absolute discretion, agree to issue a Letter of
Credit that has automatic extension provisions (each, an “Auto-Extension Letter of
Credit”); provided that any such Auto-Extension Letter of Credit must permit
such L/C Issuer to prevent any such extension at least once in each twelve-month period
(commencing with the date of issuance of such Letter of Credit) by giving prior notice to
the beneficiary thereof not later than a day (the “Non-Extension Notice Date”) in
each such twelve-month period to be agreed upon at the time such Letter of Credit is issued.
Unless otherwise directed by the applicable L/C Issuer, the Borrower shall not be required
to make a specific request to such L/C Issuer for any such extension. Once an
Auto-Extension Letter of Credit has been issued, the Revolving Credit Lenders shall be
deemed to have authorized (but may not require) the applicable L/C Issuer to permit the
extension of such Letter of Credit at any time to an expiry date not later than the Letter
of Credit Expiration Date; provided, however, that the applicable L/C Issuer
shall not permit any such extension if (A) such L/C Issuer has determined that it would not
be permitted, or would have no obligation, at such time to issue such Letter of Credit in
its revised form (as extended) under the terms hereof (by reason of the provisions of clause
(ii) or (iii) of Section 2.03(a) or otherwise), or (B) it has received notice (which
may be by telephone or in writing) on or before the day that is seven Business Days before
the Non-Extension Notice Date (1) from the Administrative Agent that the Required Revolving
Lenders have elected not to permit such extension or (2) from the Administrative Agent, any
Revolving Credit Lender or the Borrower that one or more of the applicable conditions
specified in Section 4.02 is not then satisfied, and in each such case directing
such L/C Issuer not to permit such extension.

     (iv) Promptly after its delivery of any Letter of Credit or any amendment to a Letter
of Credit to an advising bank with respect thereto or to the beneficiary thereof, the
applicable L/C Issuer will also deliver to the Borrower and the Administrative Agent a true
and complete copy of such Letter of Credit or amendment.

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     (c) Drawings and Reimbursements; Funding of Participations.

     (i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a
drawing under such Letter of Credit, the applicable L/C Issuer shall notify the Borrower and
the Administrative Agent thereof. In the case of a Letter of Credit denominated in an
Alternative Currency, the Borrower shall reimburse the applicable L/C Issuer in such
Alternative Currency, unless (A) such L/C Issuer (at its option) shall have specified in
such notice that it will require reimbursement in Dollars, or (B) in the absence of any such
requirement for reimbursement in Dollars, the Borrower shall have notified such L/C Issuer
promptly following receipt of the notice of drawing that the Borrower will reimburse such
L/C Issuer in Dollars. In the case of any such reimbursement in Dollars of a drawing under
a Letter of Credit denominated in an Alternative Currency, the applicable L/C Issuer shall
notify the Borrower of the Dollar Equivalent of the amount of the drawing promptly following
the determination thereof. Not later than 10:00 a.m. on
the date of any payment by any L/C Issuer under a Letter of Credit to be reimbursed in
Dollars, or the Applicable Time on the date of any payment by any L/C Issuer under a Letter
of Credit to be reimbursed in an Alternative Currency (each such date, an “Honor
Date”), the Borrower shall reimburse the applicable L/C Issuer in an amount equal to the
amount of such drawing and in the applicable currency. If the Borrower fails to so
reimburse the applicable L/C Issuer by such time, such L/C Issuer shall promptly notify the
Administrative Agent, who shall then promptly notify each Revolving Credit Lender, of the
Honor Date, the amount of the unreimbursed drawing (expressed in Dollars in the amount of
the Dollar Equivalent thereof in the case of a Letter of Credit denominated in an
Alternative Currency) (the “Unreimbursed Amount”), and the amount of such Revolving
Credit Lender’s Applicable Revolving Credit Percentage thereof. In such event, the Borrower
shall be deemed to have requested a Revolving Credit Borrowing of Base Rate Loans to be
disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to
the minimum and multiples specified in Section 2.02 for the principal amount of Base
Rate Loans, but subject to the amount of the unutilized portion of the Revolving Credit
Commitments and the conditions set forth in Section 4.02 (other than the delivery of
a Committed Loan Notice). Any notice given by an L/C Issuer or the Administrative Agent
pursuant to this Section 2.03(c)(i) may be given by telephone if immediately
confirmed in writing; provided that the lack of such an immediate confirmation shall
not affect the conclusiveness or binding effect of such notice.

     (ii) Each Revolving Credit Lender shall upon any notice pursuant to Section
2.03(c)(i) make funds available to the Administrative Agent for the account of the
applicable L/C Issuer, in Dollars, at the Administrative Agent’s Office in an amount equal
to its Applicable Revolving Credit Percentage of the Unreimbursed Amount not later than
12:00 noon on the Business Day specified in such notice by the Administrative Agent,
whereupon, subject to the provisions of Section 2.03(c)(iii), each Revolving Credit
Lender that so makes funds available shall be deemed to have made a Base Rate Loan to the
Borrower in such amount. The Administrative Agent shall remit the funds so received to the
applicable L/C Issuer in Dollars.

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     (iii) With respect to any Unreimbursed Amount that is not fully refinanced by a
Revolving Credit Borrowing of Base Rate Loans because the conditions set forth in
Section 4.02 cannot be satisfied or for any other reason, the Borrower shall be
deemed to have incurred from the applicable L/C Issuer an L/C Borrowing in the amount of the
Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable
on demand (together with interest) and shall bear interest at the Default Rate. In such
event, each Revolving Credit Lender’s payment to the Administrative Agent for the account of
the applicable L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment in
respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from
such Lender in satisfaction of its participation obligation under this Section 2.03.

     (iv) Until each Revolving Credit Lender funds its Revolving Credit Loan or L/C Advance
pursuant to this Section 2.03(c) to reimburse the applicable L/C Issuer for any
amount drawn under any Letter of Credit, interest in respect of such Revolving
Credit Lender’s Applicable Revolving Credit Percentage of such amount shall be solely
for the account of such L/C Issuer.

     (v) Each Revolving Credit Lender’s obligation to make Revolving Credit Loans or L/C
Advances to reimburse each L/C Issuer for amounts drawn under Letters of Credit, as
contemplated by this Section 2.03(c), shall be absolute and unconditional and shall
not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment,
defense or other right which such Lender may have against any L/C Issuer, the Borrower, any
Subsidiary or any other Person for any reason whatsoever; (B) the occurrence or continuance
of a Default, or (C) any other occurrence, event or condition, whether or not similar to any
of the foregoing; provided, however, that each Revolving Credit Lender’s
obligation to make Revolving Credit Loans pursuant to this Section 2.03(c) is
subject to the conditions set forth in Section 4.02 (other than delivery by the
Borrower of a Committed Loan Notice). No such making of an L/C Advance shall relieve or
otherwise impair the obligation of the Borrower to reimburse each L/C Issuer for the amount
of any payment made by such L/C Issuer under any Letter of Credit, together with interest as
provided herein.

     (vi) If any Revolving Credit Lender fails to make available to the Administrative Agent
for the account of the applicable L/C Issuer any amount required to be paid by such
Revolving Credit Lender pursuant to the foregoing provisions of this Section 2.03(c)
by the time specified in Section 2.03(c)(ii), such L/C Issuer shall be entitled to
recover from such Lender (acting through the Administrative Agent), on demand, such amount
with interest thereon for the period from the date such payment is required to the date on
which such payment is immediately available to such L/C Issuer at a rate per annum equal to
the greater of the Federal Funds Rate and a rate determined by such L/C Issuer in accordance
with banking industry rules on interbank compensation, plus any administrative, processing
or similar fees customarily charged by such L/C Issuer in connection with the foregoing. If
such Revolving Credit Lender pays such amount (with interest and fees as aforesaid), the
amount so paid shall constitute such Lender’s Revolving Credit Loan included in the relevant
Borrowing or L/C Advance in respect of the relevant L/C Borrowing, as the case may be. A
certificate of the relevant

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L/C Issuer submitted to any Revolving Credit Lender (through the
Administrative Agent) with respect to any amounts owing under this Section
2.03(c)(vi) shall be conclusive absent manifest error.

     (d) Repayment of Participations.

     (i) At any time after any L/C Issuer has made a payment under any Letter of Credit and
has received from any Revolving Credit Lender such Lender’s L/C Advance in respect of such
payment in accordance with Section 2.03(c), if the Administrative Agent receives for
the account of any L/C Issuer any payment in respect of the related Unreimbursed Amount or
interest thereon (whether directly from the Borrower or otherwise, including proceeds of
Cash Collateral applied thereto by the Administrative Agent), the Administrative Agent will
distribute to such Lender its Applicable Revolving Credit Percentage thereof in Dollars and
in the same funds as those received by the Administrative Agent.

     (ii) If any payment received by the Administrative Agent for the account of any L/C
Issuer pursuant to Section 2.03(c)(i) is required to be returned under any of the
circumstances described in Section 10.05 (including pursuant to any settlement
entered into by such L/C Issuer in its discretion), each Revolving Credit Lender shall pay
to the Revolving Credit Administrative Agent for the account of the applicable L/C Issuer
its Applicable Revolving Credit Percentage thereof on demand of the Administrative Agent,
plus interest thereon from the date of such demand to the date such amount is returned by
such Lender, at a rate per annum equal to the Federal Funds Rate from time to time in
effect. The obligations of the Revolving Credit Lenders under this clause shall survive the
payment in full of the Obligations and the termination of this Agreement.

     (e) Obligations Absolute. The obligation of the Borrower to reimburse each L/C Issuer
for each drawing under each Letter of Credit and to repay each L/C Borrowing shall be absolute,
unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including the following:

     (i) any lack of validity or enforceability of such Letter of Credit, this Agreement, or
any other Loan Document;

     (ii) the existence of any claim, counterclaim, setoff, defense or other right that the
Borrower or any Subsidiary may have at any time against any beneficiary or any transferee of
such Letter of Credit (or any Person for whom any such beneficiary or any such transferee
may be acting), any L/C Issuer or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement
or instrument relating thereto, or any unrelated transaction;

     (iii) any draft, demand, certificate or other document presented under such Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to make a drawing under such
Letter of Credit;

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     (iv) any payment by the applicable L/C Issuer under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the terms of such
Letter of Credit; or any payment made by such L/C Issuer under such Letter of Credit to any
Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the
benefit of creditors, liquidator, receiver or other representative of or successor to any
beneficiary or any transferee of such Letter of Credit, including any arising in connection
with any proceeding under any Debtor Relief Law;

     (v) any adverse change in the relevant exchange rates or in the availability of the
relevant Alternative Currency to the Borrower or any Subsidiary or in the relevant currency
markets generally; or

     (vi) any other circumstance or happening whatsoever, whether or not similar to any of
the foregoing, including any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Borrower or any Subsidiary.

     The Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto
that is delivered to it and, in the event of any claim of noncompliance with the Borrower’s
instructions or other irregularity, the Borrower will promptly, but in an any event, within 48
hours of receipt of such copy, notify the applicable L/C Issuer. The Borrower shall be
conclusively deemed to have waived any such claim against such L/C Issuer and its correspondents
unless such notice is given as aforesaid.

     (f) Role of the L/C Issuers. Each Lender and the Borrower agree that, in paying any
drawing under a Letter of Credit, the L/C Issuers shall not have any responsibility to obtain any
document (other than any sight draft, certificates and documents expressly required by the Letter
of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the
authority of the Person executing or delivering any such document. None of the L/C Issuers, the
Administrative Agent, any of their respective Related Parties nor any correspondent, participant or
assignee of any L/C Issuer shall be liable to any Lender for (i) any action taken or omitted in
connection herewith at the request or with the approval of the Revolving Credit Lenders or the
Required Revolving Lenders, as applicable; (ii) any action taken or omitted in the absence of gross
negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or Issuer Document.
The Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee
with respect to its use of any Letter of Credit; provided, however, that this
assumption is not intended to, and shall not, preclude the Borrower’s pursuing such rights and
remedies as it may have against the beneficiary or transferee at law or under any other agreement.
None of the L/C Issuers, the Administrative Agent, any of their respective Related Parties nor any
correspondent, participant or assignee of any L/C Issuer shall be liable or responsible for any of
the matters described in clauses (i) through (v) of Section 2.03(e); provided,
however, that anything in such clauses to the contrary notwithstanding, the Borrower may
have a claim against the applicable L/C Issuer, and the applicable L/C Issuer may be liable to the
Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or
exemplary, damages suffered by the Borrower which the Borrower proves were caused by such L/C
Issuer’s willful misconduct or gross negligence or such L/C Issuer’s willful failure to pay under
any Letter of Credit after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the

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terms and conditions of a Letter of Credit. In
furtherance and not in limitation of the foregoing, each L/C Issuer may accept documents that
appear on their face to be in order, without responsibility for further investigation, regardless
of any notice or information to the contrary, and no L/C Issuer shall be responsible for the
validity or sufficiency of any instrument transferring or assigning or purporting to transfer or
assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any reason.

     (g) Cash Collateral.

     (i) Upon the request of the Administrative Agent, (A) if any L/C Issuer has honored any
full or partial drawing request under any Letter of Credit and such drawing has resulted in
an L/C Borrowing, or (B) if, as of the Letter of Credit Expiration Date, any L/C Obligation
for any reason remains outstanding, the Borrower shall, in each case, immediately Cash
Collateralize the then Outstanding Amount of all L/C Obligations.

     (ii) The Administrative Agent may, with respect to outstanding Letters of Credit issued
in an Alternative Currency, at any time and from time to time after the initial deposit of
Cash Collateral, request that additional Cash Collateral be provided in order to protect
against the results of exchange rate fluctuations.

     (iii) Sections 2.05 and 8.02(c) set forth certain additional
requirements to deliver Cash Collateral hereunder. For purposes of this Section
2.03, Section 2.05 and Section 8.02(c), “Cash Collateralize”
means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of
the L/C Issuers and the Lenders, as collateral for the L/C Obligations, cash or deposit
account balances pursuant to documentation in form and substance satisfactory to the
Administrative Agent and the L/C Issuers (which documents are hereby consented to by the
Lenders). Derivatives of such term have corresponding meanings. The Borrower hereby grants
to the Administrative Agent, for the benefit of the L/C Issuers and the Lenders, a security
interest in all such cash, deposit accounts and all balances therein and all proceeds of the
foregoing. Cash Collateral shall be maintained in blocked deposit accounts at Bank of
America. Reasonable interest shall accrue on any such cash deposit, which accrued interest
shall be for the account of the Borrower, subject to this Agreement. If at any time the
Administrative Agent determines that any funds held as Cash Collateral are subject to any
right or claim of any Person other than the Administrative Agent or that the total amount of
such funds is less than the aggregate Outstanding Amount of all L/C Obligations, the
Borrower will, forthwith upon demand by the Administrative Agent, pay to the Administrative
Agent, as additional funds to be deposited as Cash Collateral, an amount equal to the excess
of (x) such aggregate Outstanding Amount over (y) the total amount of funds, if any, then
held as Cash Collateral that the Administrative Agent determines to be free and clear of any
such right and claim. Upon the drawing of any Letter of Credit for which funds are on
deposit as Cash Collateral, such funds shall be applied, to the extent permitted under
applicable Laws, to reimburse the applicable L/C Issuer.

     (h) Applicability of ISP and UCP. Unless otherwise expressly agreed by the applicable
L/C Issuer and the Borrower when a Letter of Credit is issued (including any such

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agreement
applicable to an Existing Letter of Credit), (i) the rules of the ISP shall apply to each standby
Letter of Credit, and (ii) the rules of the Uniform Customs and Practice for Documentary Credits,
as most recently published by the International Chamber of Commerce at the time of issuance shall
apply to each commercial Letter of Credit.

     (i) Letter of Credit Fees. The Borrower shall pay to the Administrative Agent for the
account of each Revolving Credit Lender in accordance with its Applicable Revolving Credit
Percentage, in Dollars, a Letter of Credit fee (the “Letter of Credit Fee”) (i) for each
commercial Letter of Credit equal to 0.125 of 1% times the Dollar Equivalent of the daily amount
available to be drawn under such Letter of Credit and (ii) for each standby Letter of Credit equal
to the Applicable Rate times the Dollar Equivalent of the daily amount available to be
drawn under such Letter of Credit. For purposes of computing the daily amount available to be
drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in
accordance with Section 1.09. Letter of Credit Fees shall be (A) due and payable on the
first Business Day after the end of each March, June, September and December, commencing with the
first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit
Expiration Date and thereafter on demand and (B) computed on a quarterly basis in arrears. If there is any change
in the Applicable Rate during any quarter, the daily amount available to be drawn under each
standby Letter of Credit shall be computed and multiplied by the Applicable Rate separately for
each period during such quarter that such Applicable Rate was in effect. Notwithstanding anything
to the contrary contained herein, while any Letter of Credit Fee is not paid when due, all such
overdue Letter of Credit Fees shall accrue at the Default Rate.

     (j) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer. The
Borrower shall pay directly to the applicable L/C Issuer for its own account, in Dollars, a
fronting fee (i) with respect to each commercial Letter of Credit or any amendment of a commercial
Letter of Credit increasing the amount of such Letter of Credit, at a rate and on terms separately
agreed between the Borrower and the applicable L/C Issuer (including, without limitation, as to the
time of payment of such fee), and (ii) with respect to each standby Letter of Credit, at the rate
per annum agreed upon from time to time between the Borrower and such L/C Issuer (which in the case
of Bank of America as L/C Issuer shall be the rate specified in the Fee Letter), computed on the
Dollar Equivalent of the daily amount available to be drawn under such Letter of Credit on a
quarterly basis in arrears. Such fronting fee for each standby Letter of Credit shall be due and
payable on the last Business Day of each March, June, September and December in respect of the most
recently-ended quarterly period (or portion thereof, in the case of the first payment), commencing
with the first such date to occur after the issuance of such Letter of Credit, on the Letter of
Credit Expiration Date and thereafter on demand. For purposes of computing the daily amount
available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be
determined in accordance with Section 1.09. In addition, the Borrower shall pay directly
to each L/C Issuer for its own account, in Dollars, the customary issuance, presentation, amendment
and other processing fees, and other standard costs and charges, of such L/C Issuer relating to
letters of credit as from time to time in effect. Such customary fees and standard costs and
charges are due and payable on demand and are nonrefundable.

     (k) Conflict with Issuer Documents. In the event of any conflict between the terms
hereof and the terms of any Issuer Document, the terms hereof shall control.

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     (l) Letters of Credit Issued for Subsidiaries. Notwithstanding that a Letter of
Credit issued or outstanding hereunder is in support of any obligations of, or is for the account
of, a Subsidiary, the Borrower shall be obligated to reimburse the applicable L/C Issuer hereunder
for any and all drawings under such Letter of Credit. The Borrower hereby acknowledges that the
issuance of Letters of Credit for the account of Subsidiaries inures to the benefit of the
Borrower, and that the Borrower’s business derives substantial benefits from the businesses of such
Subsidiaries.

     2.04 Borrowing Base Calculations; Inclusion of Assets in Borrowing Base. (a) At any time
when the Total Outstandings equal or exceed $50,000,000, based on the most recent Borrowing Base
Certificate delivered by the Borrower to the Administrative Agent, the Administrative Agent shall
in its good faith credit judgment determine which Accounts, Rental Equipment and Specified Rigs
shall be “Eligible Accounts”, “Eligible Rental Equipment,” and “Eligible Specified Rigs”,
respectively, for purposes of this Agreement, utilizing the criteria set forth in the definitions
for such terms set forth in Section 1.01.

     (b) Concurrently with delivery by the Borrower to the Administrative Agent of (i) any notice
designating any Swap Contract as a “Secured Hedge Agreement” and (ii) any Borrowing Base
Certificate, the Borrower will deliver to the Administrative Agent a report from the relevant
counterparty setting forth the Swap Termination Value of such Swap Contract, determined in
accordance with procedures customary in the relevant market. The Administrative Agent will
calculate from time to time the net amount of the Swap Termination Values of all Secured Hedge
Agreements on the basis of such counterparty report, and if such net amount is unfavorable to the
Borrower (i.e., the Borrower would owe a net amount under all Secured Hedge Agreements if all
Specified Hedge Agreements were terminated on such date), the Administrative Agent may, and at the
request of the Required Lenders, will, establish a reserve for purposes of calculating the
Borrowing Base pursuant to the definition thereof set forth in Section 1.01 in an amount
equal to such net unfavorable amount, and will maintain such reserve until the next determination
by the Administrative Agent pursuant to this paragraph.

     (c) During any period when the Applicable Rate is Pricing Level 3, in the event that a
Casualty Event has occurred related to any Borrowing Base Collateral, to the extent the Net Loss
Proceeds received by the Borrower or any Loan Party with respect to such Casualty Event exceed
$5,000,000 and have not been applied or budgeted to be applied to repair, restore or replace the
Property affected by such Casualty Event within the earlier of 90 days after the occurrence thereof
and 30 days after the receipt of such Net Loss Proceeds, the Administrative Agent, in the exercise
of its Permitted Discretion may, and at the request of the Required Lenders shall, reduce the
Borrowing Base based upon its review of such Casualty Event; provided that the Borrowing
Base shall not be reduced by an amount greater than (i) the lesser of (A) 100% of such Net Loss
Proceeds and (B) the Net Specified Rigs OLV or Net Book Value, as applicable, for the affected
Borrowing Base Collateral, or (ii) in the case of a total loss or taking of such Collateral, the
Net Specified Rigs OLV or Net Book Value, as applicable, for the affected Borrowing Base Collateral
(in either case, the “Casualty Adjustment Amount”); and provided further
that if the Borrowing Base is reduced pursuant to this section, the Borrowing Base shall be
increased by the corresponding Casualty Adjustment Amount or other applicable amount determined in
accordance with the definition of “Borrowing Base” upon the repair or

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replacement of such Borrowing
Base Collateral through the application of such Net Loss Proceeds (or an equivalent amount of other
funds).

     2.05 Prepayments. (a) Optional. Subject to the last sentence of this Section
2.05(a), the Borrower may, upon notice to the Administrative Agent, at any time or from time to
time voluntarily prepay Term Loans and Revolving Credit Loans in whole or in part without premium
or penalty; provided that (i) such notice must be received by the Administrative Agent not
later than 11:00 a.m. (A) three Business Days prior to any date of prepayment of Eurodollar Rate
Loans and (B) on the date of prepayment of Base Rate Loans; (ii) any prepayment of Eurodollar Rate
Loans shall be in a principal amount of $1,000,000 or a whole multiple of $1,000,000 in excess
thereof; and (iii) any prepayment of Base Rate Loans shall be in a principal amount of $500,000 or
a whole multiple of $100,000 in excess thereof or, in each case, if less, the entire principal
amount thereof then outstanding. Each such notice shall specify the date and amount of such
prepayment and the Type(s) of Loans to be prepaid and, if Eurodollar Rate Loans are to be prepaid,
the Interest Period(s) of such Loans. The Administrative Agent will promptly notify each Lender of
its receipt of each such notice, and of the amount of such Lender’s ratable portion of such
prepayment (based on such Lender’s Applicable Percentage in respect of the relevant
Facility). If such notice is given by the Borrower, the Borrower shall make such prepayment
and the payment amount specified in such notice shall be due and payable on the date specified
therein. Any prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued interest on
the amount prepaid, together with any additional amounts required pursuant to Section 3.05.
Each prepayment of the outstanding Term Loans pursuant to this Section 2.05(a) shall be
applied to the principal repayment installments thereof on a pro-rata basis, and each such
prepayment shall be paid to the Lenders in accordance with their respective Applicable Percentages
in respect of each of the relevant Facilities. Notwithstanding anything to the contrary contained
herein, the Borrower shall not be permitted to prepay the Term Loan Facility pursuant to this
Section 2.05(a) during the period from the Closing Date through the date ten Business Days
thereafter.

     (b) Mandatory. (i) If for any reason the Total Outstandings at any time exceed the
lesser of the Borrowing Base at such time and the Aggregate Commitments at such time, the Borrower
shall immediately prepay Loans and/or Cash Collateralize the L/C Obligations (other than the L/C
Borrowings) in an aggregate amount equal to such excess. If such Borrowing Base deficiency occurs
as a result of a reduction in the Borrowing Base pursuant to Section 2.04(c) as a result of
a Casualty Event, the Borrower shall utilize the Net Loss Proceeds of such Casualty Event, when
received, to take the action described in the preceding sentence. The Administrative Agent may, at
any time and from time to time after the initial deposit of such Cash Collateral, request that
additional Cash Collateral be provided in order to protect against the results of further exchange
rate fluctuations.

     (ii) Each prepayment of Loans pursuant to the foregoing Section 2.05(b)(i) shall
be applied, first, ratably to the principal repayment installments of the Term Loan Facility
on a pro-rata basis and, second, to the Revolving Credit Facility in the following manner:
first, ratably to the L/C Borrowings, second, ratably to the outstanding Revolving Credit
Loans, and, third, to Cash Collateralize the remaining L/C Obligations. Upon the drawing of
any Letter of Credit that has been Cash Collateralized, the funds held as Cash Collateral
shall be applied (without any further action by or notice to or

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from the Borrower or any
other Loan Party) to reimburse the relevant L/C Issuer or the Revolving Credit Lenders, as
applicable.

     2.06 Termination or Reduction of Commitments.

     (a) Optional. The Borrower may, upon notice to the Administrative Agent, terminate
the Revolving Credit Facility or Letter of Credit Sublimit, or from time to time permanently reduce
the Revolving Credit Facility or the Letter of Credit Sublimit; provided that (i) any such
notice shall be received by the Administrative Agent not later than 10:00 a.m. three Business Days
prior to the date of termination or reduction, (ii) any such partial reduction shall be in an
aggregate amount of $5,000,000 or any whole multiple of $1,000,000 in excess thereof, (iii) the
Borrower shall not terminate or reduce (A) the Revolving Credit Facility if, after giving effect
thereto and to any concurrent prepayments hereunder, the Total Revolving Credit Outstandings would
exceed the Revolving Credit Facility, (B) the Letter of Credit Sublimit if, after giving effect
thereto, the Outstanding Amount of L/C Obligations not fully Cash collateralized hereunder would
exceed the Letter of Credit Sublimit, and (iv) if, after giving effect to any reduction of the
Revolving Credit Facility, the Letter of Credit Sublimit exceeds the amount of
the Revolving Credit Facility, the Letter of Credit Sublimit shall be automatically reduced by
the amount of such excess.

     (b) Mandatory. The aggregate Term Loan Commitments shall be automatically and
permanently reduced to zero on the last day of the Availability Period for the Term Loan Facility.

     (c) Application of Commitment Reductions; Payment of Fees.

     (i) The Administrative Agent will promptly notify the Lenders of any termination or
reduction of the Letter of Credit Sublimit or the Revolving Credit Commitments under this
Section 2.06. Upon any reduction of the Revolving Credit Commitments, the Revolving
Credit Commitment of each Revolving Credit Lender shall be reduced by such Lender’s
Applicable Revolving Credit Percentage of such reduction amount. All fees in respect of the
Revolving Credit Facility accrued until the effective date of any termination of the
Revolving Credit Facility shall be paid on the effective date of such termination.

     (ii) The Administrative Agent will promptly notify the Lenders of any termination or
reduction of the unused portion of the aggregate Term Loan Commitments under this
Section 2.06. Upon any reduction of the unused portion of the aggregate Term Loan
Commitments, the Term Loan Commitment of each Term Loan Lender shall be reduced by such
Lender’s ratable portion of such reduction amount. All fees in respect of the Term Loan
Facility accrued until the effective date of any termination of the Term Loan Facility shall
be paid on the effective date of such termination.

     2.07 Repayment of Loans.

     (a) Term Loans. The Borrower shall repay to the Term Loan Lenders the aggregate
principal amount of all Term Loans outstanding on the following dates in the respective amounts

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set
forth opposite such dates (which amounts shall be reduced as a result of the application of
prepayments in accordance with the order of priority set forth in Section 2.06):

	 	 	 	 	 
	          Date	 	Amount
	September 30, 2009
	 	$	3,000,000	 
	December 31, 2009
	 	$	3,000,000	 
	March 31, 2010
	 	$	3,000,000	 
	June 30, 2010
	 	$	3,000,000	 
	September 30, 2010
	 	$	3,000,000	 
	December 31, 2010
	 	$	3,000,000	 
	March 31, 2011
	 	$	3,000,000	 
	June 30, 2011
	 	$	3,000,000	 
	September 30, 2011
	 	$	3,000,000	 
	December 31, 2011
	 	$	3,000,000	 
	March 31, 2012
	 	$	3,000,000	 
	June 30, 2012
	 	$	3,000,000	 
	September 30, 2012
	 	$	3,000,000	 
	December 31, 2012
	 	$	3,000,000	 
	March 31, 2013
	 	$	3,000,000	 
	Maturity Date
	 	$	5,000,000	 

provided, however, that the final principal repayment installment of the Term Loans
shall be repaid on the Maturity Date for the Term Loan Facility and in any event shall be in an
amount equal to the aggregate principal amount of all Term Loans outstanding on such date;
provided, further, that if the aggregate of all Term Loan Borrowings is in an
amount less than $50,000,000, then the amount of the scheduled repayments to be made, commencing
with the payment scheduled on September 30, 2009, shall be deemed reduced pro rata by an aggregate
amount equal to the difference of $50,000,000 minus the aggregate principal amount of all Term Loan
Borrowings.

     (b) Revolving Credit Loans. The Borrower shall repay to the Revolving Credit Lenders
on the Maturity Date for the Revolving Credit Facility the aggregate principal amount of all
Revolving Credit Loans outstanding on such date.

     2.08 Interest.

     (a) Subject to the provisions of Section 2.08(b), (i) each Eurodollar Rate Loan under
a Facility shall bear interest on the outstanding principal amount thereof for each Interest Period
at a rate per annum equal to the Eurodollar Rate for such Interest Period plus the
Applicable Rate for such Facility; and (ii) each Base Rate Loan under a Facility shall bear
interest on the outstanding principal amount thereof from the applicable borrowing date at a rate
per annum equal to the Base Rate plus the Applicable Rate for such Facility.

     (b) (i) If any amount of principal of any Loan or L/C Borrowing is not paid when due (without
regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise,
all outstanding Loans and L/C Borrowings (whether or not overdue) shall thereafter

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bear interest at
a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent
permitted by applicable Laws until such amount is paid in full (after as well as before judgment).

     (ii) If any amount (other than principal of any Loan or L/C Borrowing) payable by the
Borrower under any Loan Document is not paid when due (without regard to any applicable
grace periods), whether at stated maturity, by acceleration or otherwise, then such overdue
amount shall thereafter bear interest at a fluctuating interest rate per annum at all times
equal to the Default Rate to the fullest extent permitted by applicable Laws until such
amount is paid in full (after as well as before judgment).

     (iii) Accrued and unpaid interest on past due amounts (including interest on past due
interest) shall be due and payable upon demand.

     (c) Interest on each Loan shall be due and payable in arrears on each Interest Payment Date
applicable thereto and at such other times as may be specified herein. Interest hereunder shall be
due and payable in accordance with the terms hereof before and after
judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.

     2.09 Fees. In addition to certain fees described in Sections 2.03(i) and (j):

     (a) Commitment Fee. The Borrower shall pay to the Administrative Agent for the
account of each Revolving Credit Lender in accordance with its Applicable Revolving Credit
Percentage, a commitment fee equal to the Applicable Fee Rate times the actual daily amount by
which the Revolving Credit Facility exceeds the sum of (i) the Outstanding Amount of Revolving
Credit Loans and (ii) the Outstanding Amount of L/C Obligations. In addition, the Borrower shall
pay to the Administrative Agent for the account of each Term Loan Lender in accordance with its
Applicable Percentage of the Term Loan Facility, a commitment fee equal to the Applicable Fee Rate
times the actual daily amount by which the aggregate Term Loan Commitments exceed the Outstanding
Amount of Term Loans. The commitment fee shall accrue at all times during the relevant
Availability Period, including at any time during which one or more of the conditions in
Article IV is not met, and shall be due and payable quarterly in arrears on the last
Business Day of each March, June, September and December, commencing with the first such date to
occur after the Closing Date, and, in the case of the commitment fee with respect to the Revolving
Credit Facility, on the last day of the Availability Period for the Revolving Credit Facility or,
in the case of the commitment fee with respect to the Term Loan Facility, on the last day of the
Availability Period for the Term Loan Facility. The commitment fee shall be calculated quarterly
in arrears, and if there is any change in the Applicable Fee Rate during any quarter, the actual
daily amount shall be computed and multiplied by the Applicable Fee Rate separately for each period
during such quarter that such Applicable Fee Rate was in effect.

     (b) Other Fees. (i) The Borrower shall pay to the Co-Arrangers and the Administrative
Agent for their own respective accounts, in Dollars, fees in the amounts and at the times specified
in the Fee Letter. Such fees shall be fully earned when paid and shall not be refundable for any
reason whatsoever.

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     (ii) The Borrower shall pay to the Lenders, in Dollars, such fees as shall have been
separately agreed upon in writing in the amounts and at the times so specified. Such fees
shall be fully earned when paid and shall not be refundable for any reason whatsoever.

     2.10 Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate. (a) All
computations of interest for Base Rate Loans when the Base Rate is determined by Bank of America’s
“prime rate” shall be made on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed. All other computations of fees and interest shall be made on the basis of a
360-day year and actual days elapsed (which results in more fees or interest, as applicable, being
paid than if computed on the basis of a 365-day year). Interest shall accrue on each Loan for the
day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day
on which the Loan or such portion is paid, provided that any Loan that is repaid on the
same day on which it is made shall, subject to Section 2.12(a), bear interest for one day.
Each determination by the Administrative Agent of an interest rate or fee hereunder shall be
conclusive and binding for all purposes, absent manifest error.

     (b) If, as a result of any restatement of or other adjustment to the financial statements of
the Borrower or for any other reason, the Borrower or the Lenders determine that (i) the
Consolidated Leverage Ratio as calculated by the Borrower as of any applicable date was inaccurate
and (ii) a proper calculation of the Consolidated Leverage Ratio would have resulted in higher
pricing for such period, the Borrower shall immediately and retroactively be obligated to pay to
the Administrative Agent for the account of the applicable Lenders or the L/C Issuers, as the case
may be, promptly on demand by the Administrative Agent (or, after the occurrence of an actual or
deemed entry of an order for relief with respect to the Borrower under the Bankruptcy Code of the
United States, automatically and without further action by the Administrative Agent, any Lender or
any L/C Issuer), an amount equal to the excess of the amount of interest and fees that should have
been paid for such period over the amount of interest and fees actually paid for such period. This
paragraph shall not limit the rights of the Administrative Agent, any Lender or any L/C Issuer, as
the case may be, under Section 2.03(c)(iii), 2.03(i) or 2.08(b) or under
Article VIII. The Borrower’s obligations under this paragraph shall survive the
termination of the Aggregate Commitments and the repayment of all other Obligations hereunder.

     2.11 Evidence of Debt. (a) The Credit Extensions made by each Lender shall be evidenced by
one or more accounts or records maintained by such Lender and by the Administrative Agent in the
ordinary course of business. The accounts or records maintained by the Administrative Agent and
each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions made
by the Lenders to the Borrower and the interest and payments thereon. Any failure to so record or
any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower
hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict
between the accounts and records maintained by any Lender and the accounts and records of the
Administrative Agent in respect of such matters, the accounts and records of the Administrative
Agent shall control in the absence of manifest error. Upon the request of any Lender made through
the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the
Administrative Agent) a Note, which shall evidence such Lender’s Loans in addition to such accounts
or records. Each Lender may attach

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schedules to its Note and endorse thereon the date, Type (if
applicable), amount, and maturity of its Loans and payments with respect thereto.

     (b) In addition to the accounts and records referred to in Section 2.11(a), each
Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts
or records evidencing the purchases and sales by such Lender of participations in Letters of
Credit. In the event of any conflict between the accounts and records maintained by the
Administrative Agent and the accounts and records of any Lender in respect of such matters, the
accounts and records of the Administrative Agent shall control in the absence of manifest error.

     2.12 Payments Generally; Administrative Agent’s Clawback. (a) General. All payments
to be made by the Borrower shall be made without condition or deduction for any counterclaim,
defense, recoupment or setoff. Except as otherwise expressly provided herein, all payments by the
Borrower hereunder shall be made to the Administrative Agent, for the account of the respective
Lenders to which such payment is owed, at the Administrative Agent’s Office in Dollars and in
immediately available funds not later than 2:00 p.m. on the date specified herein. If, for any
reason, the Borrower is prohibited by any Law from making any required
payment hereunder in an Alternative Currency, the Borrower shall make such payment in Dollars
in the Dollar Equivalent of the Alternative Currency payment amount. The Administrative Agent will
promptly distribute to each Lender its Applicable Percentage in respect of the relevant Facility
(or other applicable share as provided herein) of such payment in like funds as received by wire
transfer to such Lender’s Lending Office. All payments received by the Administrative Agent (i)
after 2:00 p.m., in the case of payments in Dollars, or (ii) after the Applicable Time specified by
the Administrative Agent in the case of payments in an Alternative Currency, shall in each case be
deemed received on the next succeeding Business Day and any applicable interest or fee shall
continue to accrue. If any payment to be made by the Borrower shall come due on a day other than a
Business Day, payment shall be made on the next following Business Day, and such extension of time
shall be reflected in computing interest or fees, as the case may be. The Borrower agrees that, if
an Event of Default shall have occurred and is continuing, the Administrative Agent may (and the
Administrative Agent hereby agrees that it shall) (A) cause each bank that maintains any account
subject to a Control Agreement or a Lockbox Agreement to transfer, on a daily basis, all collected
funds in any such account to a Concentration Account and (B) apply any amounts on deposit in a
Concentration Account to repay Loans whenever any Loans are outstanding.

     (b) (i) Funding by Lenders; Presumption by Administrative Agent. Unless the
Administrative Agent shall have received notice from a Lender prior to the proposed date of any
Borrowing of Eurodollar Rate Loans (or, in the case of any Borrowing of Base Rate Loans, prior to
12:00 noon on the date of such Borrowing) that such Lender will not make available to the
Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume
that such Lender has made such share available on such date in accordance with Section 2.02
(or, in the case of a Borrowing of Base Rate Loans, that such Lender has made such share available
in accordance with and at the time required by Section 2.02) and may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has
not in fact made its share of the applicable Borrowing available to the Administrative Agent, then
the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith
on demand such corresponding amount in immediately available funds with

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interest thereon, for each
day from and including the date such amount is made available to the Borrower to but excluding the
date of payment to the Administrative Agent, at (A) in the case of a payment to be made by such
Lender, the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation, plus any administrative,
processing or similar fees customarily charged by the Administrative Agent in connection with the
foregoing, and (B) in the case of a payment to be made by the Borrower, the interest rate
applicable to Base Rate Loans. If the Borrower and such Lender shall pay such interest to the
Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly
remit to the Borrower the amount of such interest paid by the Borrower for such period. If such
Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so
paid shall constitute such Lender’s Loan included in such Borrowing. Any payment by the Borrower
shall be without prejudice to any claim the Borrower may have against a Lender that shall have
failed to make such payment to the Administrative Agent.

     (ii) Payments by Borrower; Presumptions by Administrative Agent. Unless the
Administrative Agent shall have received notice from the Borrower prior to the time
at which any payment is due to the Administrative Agent for the account of the Lenders
or the L/C Issuers 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 Appropriate
Lenders or L/C Issuers, as the case may be, the amount due. In such event, if the Borrower
has not in fact made such payment, then each of the Appropriate Lenders or L/C Issuers, as
the case may be, severally agrees to repay to the Administrative Agent forthwith on demand
the amount so distributed to such Lender or such L/C Issuer, in immediately available funds
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.

     A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount
owing under this subsection (b) shall be conclusive, absent manifest error.

     (c) Failure to Satisfy Conditions Precedent. If any Lender makes available to the
Administrative Agent funds for any Loan to be made by such Lender to the Borrower as provided in
the foregoing provisions of this Article II, and such funds are not made available to the
Borrower by the Administrative Agent because the conditions to the applicable Credit Extension set
forth in Article IV are not satisfied or waived in accordance with the terms hereof, the
Administrative Agent shall return such funds (in like funds as received from such Lender) to such
Lender, without interest.

     (d) Obligations of Lenders Several. The obligations of the Lenders hereunder to make
Term Loans and Revolving Credit Loans, to fund participations in Letters of Credit and to make
payments pursuant to Section 10.04(c) are several and not joint. The failure of any Lender
to make any Loan, to fund any such participation or to make any payment under Section
10.04(c) on any date required hereunder shall not relieve any other Lender of its corresponding
obligation

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to do so on such date, and no Lender shall be responsible for the failure of any other
Lender to so make its Loan, to purchase its participation or to make its payment under Section
10.04(c).

     (e) Funding Source. Nothing herein shall be deemed to obligate any Lender to obtain
the funds for any Loan in any particular place or manner or to constitute a representation by any
Lender that it has obtained or will obtain the funds for any Loan in any particular place or
manner.

     (f) Insufficient Funds. If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal, L/C Borrowings,
interest and fees then due hereunder, such funds shall be applied (i) first, toward 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, toward payment of
principal and L/C Borrowings then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal and L/C Borrowings then due to such parties.

     2.13 Sharing of Payments by Lenders. If any Lender shall, by exercising any right of setoff
or counterclaim or otherwise, obtain payment in respect of (a) Obligations in respect of any the
Facilities due and payable to such Lender hereunder and under the other Loan Documents at such time
in excess of its ratable share (according to the proportion of (i) the amount of such Obligations
due and payable to such Lender at such time to (ii) the aggregate amount of the Obligations in
respect of the Facilities due and payable to all Lenders hereunder and under the other Loan
Documents at such time) of payments on account of the Obligations in respect of the Facilities due
and payable to all Lenders hereunder and under the other Loan Documents at such time obtained by
all the Lenders at such time or (b) Obligations in respect of any of the Facilities owing (but not
due and payable) to such Lender hereunder and under the other Loan Documents at such time in excess
of its ratable share (according to the proportion of (i) the amount of such Obligations owing (but
not due and payable) to such Lender at such time to (ii) the aggregate amount of the Obligations in
respect of the Facilities owing (but not due and payable) to all Lenders hereunder and under the
other Loan Parties at such time) of payment on account of the Obligations in respect of the
Facilities owing (but not due and payable) to all Lenders hereunder and under the other Loan
Documents at such time obtained by all of the Lenders at such time then the Lender receiving such
greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for
cash at face value) participations in the Loans and subparticipations in L/C Obligations of the
other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all
such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of
Obligations in respect of the Facilities then due and payable to the Lenders or owing (but not due
and payable) to the Lenders, as the case may be, provided that:

     (i) if any such participations or subparticipations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations or
subparticipations shall be rescinded and the purchase price restored to the extent of such
recovery, without interest; and

     (ii) the provisions of this Section shall not be construed to apply to (A) any payment
made by the Borrower pursuant to and in accordance with the express terms of

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this Agreement
or (B) any payment obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans or subparticipations in L/C Obligations to any assignee or
participant, other than to the Borrower or any Subsidiary thereof (as to which the
provisions of this Section 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 setoff 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.

     2.14 Increase in Revolving Credit Facility.

     (a) Request for Increase. Provided no Event of Default has occurred and is
continuing, upon notice to the Administrative Agent (which shall promptly notify the Revolving
Credit Lenders), the Borrower may from time to time (including on the Closing Date), request an
increase in the Revolving Credit Facility by an amount (for all such requests) not exceeding
$50,000,000; provided, however, that (i) any such request for an increase shall be
in a minimum amount of $10,000,000, (ii) the Borrower may make a maximum of three such requests,
and (iii) after giving effect to such increase, the Aggregate Commitments shall not be in excess of
$180,000,000. At the time of sending such notice, the Borrower (in consultation with the
Administrative Agent) shall specify the time period within which each Revolving Credit Lender is
requested to respond (which shall in no event be less than ten Business Days from the date of
delivery of such notice to the Revolving Credit Lenders).

     (b) Lender Elections to Increase. Each Revolving Credit Lender shall notify the
Administrative Agent within such time period whether or not it agrees to increase its Revolving
Credit Commitment and, if so, whether by an amount equal to, greater than, or less than its
Applicable Revolving Credit Percentage of such requested increase. Any Revolving Credit Lender not
responding within such time period shall be deemed to have declined to increase its Revolving
Credit Commitment.

     (c) Notification by Administrative Agent; Additional Revolving Credit Lenders. The
Administrative Agent shall notify the Borrower and each Revolving Credit Lender of the Revolving
Credit Lenders’ responses to each request made hereunder. To achieve the full amount of a
requested increase, and subject to the approval of the Administrative Agent and the L/C Issuers
(which approvals shall not be unreasonably withheld), the Borrower may also invite additional
Eligible Assignees to become Revolving Credit Lenders pursuant to a joinder agreement in form and
substance satisfactory to the Administrative Agent and its counsel.

     (d) Effective Date and Allocations. If the Revolving Credit Facility is increased in
accordance with this Section, the Administrative Agent and the Borrower shall determine the
effective date (the “Revolving Credit Increase Effective Date”) and the final allocation of
such increase. The Administrative Agent shall promptly notify the Borrower and the Revolving
Credit Lenders of the final allocation of such increase and the Revolving Credit Increase Effective
Date.

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     (e) Conditions to Effectiveness of Increase. As a condition precedent to such
increase, the Borrower shall deliver to the Administrative Agent a certificate of each Loan Party
dated as of the Revolving Credit Increase Effective Date (in sufficient copies for each Lender)
signed by a Responsible Officer of such Loan Party (i) certifying and attaching the resolutions
adopted by such Loan Party approving or consenting to such increase, and (ii) in the case of the
Borrower, certifying that, before and after giving effect to such increase, (A) the representations
and warranties contained in Article V and the other Loan Documents are true and correct in
all material respects on and as of the Revolving Credit Increase Effective Date, except to the
extent that such representations and warranties specifically refer to an earlier date, in which
case they are true and correct as of such earlier date, and except that for purposes of this
Section 2.14, the representations and warranties contained in subsections (a) and (b) of
Section 5.05 shall be deemed to refer to the most recent statements furnished pursuant to
clauses (a) and (b), respectively, of Section 6.01, and (B) no Event of Default has
occurred or is continuing. The Borrower shall prepay any Revolving Credit Loans outstanding on the
Revolving Credit Increase Effective Date (and pay any additional amounts required pursuant to
Section 3.05) to the extent necessary to keep the outstanding Revolving Credit Loans
ratable with any revised Applicable Revolving Credit Percentages arising from any nonratable
increase in the Revolving Credit Commitments under this Section.

     (f) Conflicting Provisions. This Section shall supersede any provisions in
Section 2.13 or 10.01 to the contrary.

     2.15 Increase in Term Loan Facility.

     (a) Request for Increase. Provided no Event of Default has occurred and is
continuing, upon notice to the Administrative Agent (which shall promptly notify the Term Loan
Lenders), the Borrower may from time to time (including on the Closing Date), request an increase
in the Term Loans by an amount (for all such requests) not exceeding $50,000,000; provided,
however, that (i) any such request for an increase shall be in a minimum amount of
$10,000,000, (ii) the Borrower may make a maximum of three such requests, and (iii) after giving
effect to such increase, the Aggregate Commitments shall not be in excess of $180,000,000. At the
time of sending such notice, the Borrower (in consultation with the Administrative Agent) shall
specify the time period within which each Term Loan Lender is requested to respond (which shall in
no event be less than ten Business Days from the date of delivery of such notice to the Term Loan
Lenders).

     (b) Lender Elections to Increase. Each Term Loan Lender shall notify the
Administrative Agent within such time period whether or not it agrees to increase its Term Loans
and, if so, whether by an amount equal to, greater than, or less than its ratable portion (base on
such Term Loan Lender’s Applicable Percentage in respect of the Term Loan Facility) of such
requested increase. Any Term Loan Lender not responding within such time period shall be deemed to
have declined to increase its Term Loans.

     (c) Notification by Administrative Agent; Additional Term Loan Lenders. The
Administrative Agent shall notify the Borrower and each Term Loan Lender of the Term Lon Lenders’
responses to each request made hereunder. To achieve the full amount of a requested increase and
subject to the approval of the Administrative Agent (which approval shall not be

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unreasonably withheld), the Borrower may also invite additional Eligible Assignees to become
Term Loan Lenders pursuant to a joinder agreement in form and substance satisfactory to the
Administrative Agent and its counsel.

     (d) Effective Date and Allocations. If the Term Loans are increased in accordance
with this Section, the Administrative Agent and the Borrower shall determine the effective date
(the “Term Loan Increase Effective Date”) and the final allocation of such increase. The
Administrative Agent shall promptly notify the Borrower and the Term Loan Lenders of the final
allocation of such increase and the Term Loan Increase Effective Date. As of the Term Loan
Increase Effective Date, the amortization schedule for the Term Loans set forth in
Section 2.07(a) shall be amended to increase the then-remaining unpaid installments of
principal by an aggregate amount equal to the additional Term Loans being made on such date, such
aggregate amount to be applied to increase such installments ratably in accordance with the amounts
in effect immediately prior to the Term Loan Increase Effective Date. Such amendment may be signed
by the Administrative Agent on behalf of the Lenders.

     (e) Conditions to Effectiveness of Increase. As a condition precedent to such
increase, the Borrower shall deliver to the Administrative Agent a certificate of each Loan Party
dated as of the Term Loan Increase Effective Date (in sufficient copies for each Lender) signed by
a Responsible Officer of such Loan Party (i) certifying and attaching the resolutions adopted by
such Loan Party approving or consenting to such increase, and (ii) in the case of the Borrower,
certifying that, before and after giving effect to such increase, (A) the representations and
warranties contained in Article V and the other Loan Documents are true and correct in all
material respects on and as of the Term Loan Increase Effective Date, except to the extent that
such representations and warranties specifically refer to an earlier date, in which case they are
true and correct as of such earlier date, and except that for purposes of this Section
2.15, the representations and warranties contained in subsections (a) and (b) of Section
5.05 shall be deemed to refer to the most recent statements furnished pursuant to clauses (a)
and (b), respectively, of Section 6.01, and (B) no Event of Default has occurred or is
continuing. The additional Term Loans shall be made by the Term Loan Lenders participating therein
pursuant to the procedures set forth in Section 2.02.

     (f) Conflicting Provisions. This Section shall supersede any provisions in
Section 2.13 or 10.01 to the contrary.

ARTICLE III.

TAXES, YIELD PROTECTION AND ILLEGALITY

     3.01 Taxes.

     (a) Payments Free of Taxes; Obligation to Withhold; Payments on Account of Taxes. (i)
Any and all payments by or on account of any obligation of the Borrower hereunder or under any
other Loan Document shall to the extent permitted by applicable Laws be made free and clear of and
without reduction or withholding for any Taxes. If, however, applicable Laws require the Borrower
or the Administrative Agent to withhold or deduct any Tax, such Tax shall be withheld or deducted
in accordance with such Laws as determined by the Borrower or the

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Administrative Agent, as the case may be, upon the basis of the information and documentation
to be delivered pursuant to subsection (e) below.

     (ii) If the Borrower or the Administrative Agent shall be required by the Code to
withhold or deduct any Taxes, including both United States Federal backup withholding and
withholding taxes, from any payment, then (A) the Administrative Agent shall withhold or
make such deductions as are determined by the Administrative Agent to be required based upon
the information and documentation it has received pursuant to subsection (e) below, (B) the
Administrative Agent shall timely pay the full amount withheld or deducted to the relevant
Governmental Authority in accordance with the Code, and (C) to the extent that the
withholding or deduction is made on account of Indemnified Taxes or Other Taxes, the sum
payable by the Borrower shall be increased as necessary so that after any required
withholding or the making of all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent, Lender or L/C Issuer,
as the case may be, receives an amount equal to the sum it would have received had no such
withholding or deduction been made.

     (iii) If the Borrower or the Administrative Agent shall be required by any applicable
Laws other than the Code to withhold or deduct any Taxes from any payment, then (A) the
Borrower or the Administrative Agent, as required by such Laws, shall withhold or make such
deductions as are determined by it to be required based upon the information and
documentation it has received pursuant to subsection (e) below, (B) the Borrower or the
Administrative Agent, to the extent required by such Laws, shall timely pay the full amount
so withheld or deducted by it to the relevant Governmental Authority in accordance with such
Laws, and (C) to the extent that the withholding or deduction is made on account of
Indemnified Taxes or Other Taxes, the sum payable by the Borrower shall be increased as
necessary so that after any required withholding or the making of all required deductions
(including deductions applicable to additional sums payable under this Section) the
Administrative Agent, Lender or L/C Issuer, as the case may be, receives an amount equal to
the sum it would have received had no such withholding or deduction been made.

     (b) Payment of Other Taxes by the Borrower. Without limiting the provisions of
subsection (a) above, the Borrower shall timely pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable Laws.

     (c) Tax Indemnifications. (i) Without limiting the provisions of subsection (a) or
(b) above, the Borrower shall, and does hereby, indemnify the Administrative Agent, each Lender and
each L/C Issuer, and shall make payment in respect thereof within 10 days after demand therefor,
for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other
Taxes imposed or asserted on or attributable to amounts payable under this Section) withheld or
deducted by the Borrower or the Administrative Agent or paid by the Administrative Agent, such
Lender or such L/C Issuer, as the case may be, and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental Authority. The Borrower
shall also, and does hereby, indemnify the

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Administrative Agent, and shall make payment in respect thereof within 10 days after demand
therefor, for any amount which a Lender or L/C Issuer for any reason fails to pay indefeasibly to
the Administrative Agent as required by clause (ii) of this subsection. A certificate as to the
amount of any such payment or liability delivered to the Borrower by a Lender or L/C Issuer (with a
copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of
a Lender or L/C Issuer, shall be conclusive absent manifest error.

     (ii) Without limiting the provisions of subsection (a) or (b) above, each Lender and
L/C Issuer shall, and does hereby, indemnify the Borrower and the Administrative Agent, and
shall make payment in respect thereof within 10 days after demand therefor, against any and
all Taxes and any and all related losses, claims, liabilities, penalties, interest and
expenses (including the fees, charges and disbursements of any counsel for the Borrower or
the Administrative Agent) incurred by or asserted against the Borrower or the Administrative
Agent by any Governmental Authority as a result of the failure by such Lender or such L/C
Issuer, as the case may be, to deliver, or as a result of the inaccuracy, inadequacy or
deficiency of, any documentation required to be delivered by such Lender or such L/C Issuer,
as the case may be, to the Borrower or the Administrative Agent pursuant to subsection (e).
Each Lender and each L/C Issuer hereby authorizes the Administrative Agent to set off and
apply any and all amounts at any time owing to such Lender or such L/C Issuer, as the case
may be, under this Agreement or any other Loan Document against any amount due to the
Administrative Agent under this clause (ii). The agreements in this clause (ii) shall
survive the resignation and/or replacement of the Administrative Agent, any assignment of
rights by, or the replacement of, a Lender or any L/C Issuer, the termination of the
Aggregate Commitments and the repayment, satisfaction or discharge of all other Obligations.

     (d) Evidence of Payments. Upon request by the Borrower or the Administrative Agent,
as the case may be, after any payment of Taxes by the Borrower or the Administrative Agent to a
Governmental Authority as provided in this Section 3.01, the Borrower shall deliver to the
Administrative Agent or the Administrative Agent shall deliver to the Borrower, as the case may be,
the original or a certified copy of a receipt issued by such Governmental Authority evidencing such
payment, a copy of any return required by Laws to report such payment or other evidence of such
payment reasonably satisfactory to the Borrower or the Administrative Agent, as the case may be.

     (e) Status of Lenders; Tax Documentation. (i) Each Lender shall deliver to the
Borrower and to the Administrative Agent, at the time or times prescribed by applicable Laws or
when reasonably requested by the Borrower or the Administrative Agent, such properly completed and
executed documentation prescribed by applicable Laws or by the taxing authorities of any
jurisdiction and such other reasonably requested information as will permit the Borrower or the
Administrative Agent, as the case may be, to determine (A) whether or not payments made by the
Borrower hereunder or under any other Loan Document are subject to Taxes, (B) if applicable, the
required rate of withholding or deduction, and (C) such Lender’s entitlement to any available
exemption from, or reduction of, applicable Taxes in respect of all payments to be made to such
Lender by the Borrower pursuant to this Agreement or otherwise to establish such Lender’s status
for withholding tax purposes in the applicable jurisdictions.

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     (ii) Without limiting the generality of the foregoing, if the Borrower is resident for
tax purposes in the United States,

     (A) any Lender that is a “United States person” within the meaning of Section
7701(a)(30) of the Code shall deliver to the Borrower and the Administrative Agent
executed originals of Internal Revenue Service Form W-9 or such other documentation
or information prescribed by applicable Laws or reasonably requested by the Borrower
or the Administrative Agent as will enable the Borrower or the Administrative Agent,
as the case may be, to determine whether or not such Lender is subject to backup
withholding or information reporting requirements; and

     (B) each Foreign Lender that is entitled under the Code or any applicable
treaty to an exemption from or reduction of withholding tax with respect to payments
hereunder or under any other Loan Document shall deliver to the Borrower and the
Administrative Agent (in such number of copies as shall be requested by the
recipient) on or prior to the date on which such Foreign Lender becomes a Lender
under this Agreement (and from time to time thereafter upon the request of the
Borrower or the Administrative Agent, but only if such Foreign Lender is legally
entitled to do so), whichever of the following is applicable:

     (I) executed originals of Internal Revenue Service Form W-8BEN claiming
eligibility for benefits of an income tax treaty to which the United States
is a party,

     (II) executed originals of Internal Revenue Service Form W-8ECI,

     (III) executed originals of Internal Revenue Service Form W-8IMY and
all required supporting documentation,

     (IV) in the case of a Foreign Lender claiming the benefits of the
exemption for portfolio interest under section 881(c) of the Code, (x) a
certificate to the effect that such Foreign Lender is not (A) a “bank”
within the meaning of section 881(c)(3)(A) of the Code, (B) a “10 percent
shareholder” of the Borrower within the meaning of section 881(c)(3)(B) of
the Code, or (C) a “controlled foreign corporation” described in section
881(c)(3)(C) of the Code and (y) executed originals of Internal Revenue
Service Form W-8BEN, or

     (V) executed originals of any other form prescribed by applicable Laws
as a basis for claiming exemption from or a reduction in United States
Federal withholding tax together with such supplementary documentation as
may be prescribed by applicable Laws to permit the Borrower or the
Administrative Agent to determine the withholding or deduction required to
be made.

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     (iii) Each Lender shall promptly (A) notify the Borrower and the Administrative Agent
of any change in circumstances which would modify or render invalid any claimed exemption or
reduction, and (B) take such steps as shall not be materially disadvantageous to it, in the
reasonable judgment of such Lender, and as may be reasonably necessary (including the
re-designation of its Lending Office) to avoid any requirement of applicable Laws of any
jurisdiction that the Borrower or the Administrative Agent make any withholding or deduction
for taxes from amounts payable to such Lender.

     (iv) The Borrower shall promptly deliver to the Administrative Agent or any Lender, as
the Administrative Agent or such Lender shall reasonably request, on or prior to the Closing
Date, and in a timely fashion thereafter, such documents and forms required by any relevant
taxing authorities under the Laws of any jurisdiction, duly executed and completed by the
Borrower, as are required to be furnished by such Lender or the Administrative Agent under
such Laws in connection with any payment by the Administrative Agent or any Lender of Taxes
or Other Taxes, or otherwise in connection with the Loan Documents, with respect to such
jurisdiction.

     (f) Treatment of Certain Refunds. Unless required by applicable Laws, at no time
shall the Administrative Agent have any obligation to file for or otherwise pursue on behalf of a
Lender or an L/C Issuer, or have any obligation to pay to any Lender or any L/C Issuer, any refund
of Taxes withheld or deducted from funds paid for the account of such Lender or such L/C Issuer, as
the case may be. If the Administrative Agent, any Lender or any L/C Issuer determines, in its sole
discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been
indemnified by the Borrower or with respect to which the Borrower has paid additional amounts
pursuant to this Section, it shall pay to the Borrower an amount equal to such refund (but only to
the extent of indemnity payments made, or additional amounts paid, by the Borrower under this
Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses and net of any loss or gain realized in the conversion of such funds from or
to another currency incurred by the Administrative Agent, such Lender or any L/C Issuer, as the
case may be, and without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund), provided that the Borrower, upon the request of the
Administrative Agent, such Lender or such L/C Issuer, agrees to repay the amount paid over to the
Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental
Authority) to the Administrative Agent, such Lender or such L/C Issuer in the event the
Administrative Agent, such Lender or such L/C Issuer is required to repay such refund to such
Governmental Authority. This subsection shall not be construed to require the Administrative
Agent, any Lender or any L/C Issuer to make available its tax returns (or any other information
relating to its taxes that it deems confidential) to the Borrower or any other Person.

     3.02 Illegality. If any Lender determines that any Law has made it unlawful, or that any
Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending
Office to make, maintain or fund Eurodollar Rate Loans, or to determine or charge interest rates
based upon the Eurodollar Rate, or any Governmental Authority has imposed material restrictions on
the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London
interbank market, then, on notice thereof by such Lender to the Borrower

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through the Administrative Agent, any obligation of such Lender to make or continue Eurodollar
Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans, shall be suspended until such
Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to
such determination no longer exist. Upon receipt of such notice, the Borrower shall, upon demand
from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all
such Eurodollar Rate Loans of such Lender to Base Rate Loans, either on the last day of the
Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Rate
Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such
Eurodollar Rate Loans. Upon any such prepayment or conversion, the Borrower shall also pay accrued
interest on the amount so prepaid or converted.

     3.03 Inability to Determine Rates. If the Required Lenders determine that for any reason in
connection with any request for a Eurodollar Rate Loan or a conversion to or continuation thereof
that (a) Dollar deposits are not being offered to banks in the London interbank eurodollar market
for the applicable amount and Interest Period of such Eurodollar Rate Loan, (b) adequate and
reasonable means do not exist for determining the Eurodollar Rate for any requested Interest Period
with respect to a proposed Eurodollar Rate Loan, or (c) the Eurodollar Rate for any requested
Interest Period with respect to a proposed Eurodollar Rate Loan does not adequately and fairly
reflect the cost to such Lenders of funding such Loan, the Administrative Agent will promptly so
notify the Borrower and each Lender. Thereafter, the obligation of the Lenders to make or maintain
Eurodollar Rate Loans shall be suspended until the Administrative Agent (upon the instruction of
the Required Lenders) revokes such notice. Upon receipt of such notice, the Borrower may revoke
any pending request for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans or,
failing that, will be deemed to have converted such request into a request for a Borrowing of Base
Rate Loans in the amount specified therein.

     3.04 Increased Costs.

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

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

     (ii) subject any Lender or any L/C Issuer to any tax of any kind whatsoever with
respect to this Agreement, any Letter of Credit, any participation in a Letter of Credit or
any Eurodollar Rate Loan made by it, or change the basis of taxation of payments to such
Lender or such L/C Issuer in respect thereof (except for Indemnified Taxes or Other Taxes
covered by Section 3.01 and the imposition of, or any change in the rate of, any
Excluded Tax payable by such Lender or such L/C Issuer); or

     (iii) impose on any Lender or any L/C Issuer or the London interbank market any other
condition, cost or expense affecting this Agreement or Eurodollar Rate Loans made by such
Lender or any Letter of Credit or participation therein;

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

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

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

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

     3.05 Compensation for Losses. Upon demand of any Lender (with a copy to the Administrative
Agent) from time to time, the Borrower shall promptly compensate such Lender for and hold such
Lender harmless from any loss, cost or expense incurred by it as a result of:

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     (a) any continuation, conversion, payment or prepayment of any Loan other than a Base Rate
Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary,
mandatory, automatic, by reason of acceleration, or otherwise);

     (b) any failure by the Borrower (for a reason other than the failure of such Lender to make a
Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan on the date or in
the amount notified by the Borrower;

     (c) any failure by the Borrower to make payment of drawing under any Letter of Credit (or
interest due thereon) denominated in an Alternative Currency on its scheduled due date or any
payment thereof in a different currency; or

     (d) any assignment of a Eurodollar Rate Loan on a day other than the last day of the Interest
Period therefor as a result of a request by the Borrower pursuant to Section 10.13;

excluding any loss of anticipated profits, but including any foreign exchange losses and any loss
or expense arising from the liquidation or reemployment of funds obtained by it to maintain such
Loan, from fees payable to terminate the deposits from which such funds were obtained or from the
performance of any foreign exchange contract. The Borrower shall also pay any customary
administrative fees charged by such Lender in connection with the foregoing.

For purposes of calculating amounts payable by the Borrower to the Lenders under this Section
3.05, each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at the
Eurodollar Base Rate used in determining the Eurodollar Rate for such Loan by a matching deposit or
other borrowing in the London interbank eurodollar market for a comparable amount and for a
comparable period, whether or not such Eurodollar Rate Loan was in fact so funded.

     3.06 Mitigation Obligations; Replacement of Lenders. 

     (a) Designation of a Different Lending Office. If any Lender requests compensation
under Section 3.04, or the Borrower is required to pay any additional amount to any Lender,
any L/C Issuer, or any Governmental Authority for the account of any Lender or any L/C Issuer
pursuant to Section 3.01, or if any Lender gives a notice pursuant to Section 3.02,
then such Lender or such L/C Issuer shall, as applicable, use reasonable efforts to designate a
different Lending Office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of
such Lender or such L/C Issuer, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in the
future, or eliminate the need for the notice pursuant to Section 3.02, as applicable, and
(ii) in each case, would not subject such Lender or such L/C Issuer, as the case may be, to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender or such L/C
Issuer, as the case may be. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender or any L/C Issuer in connection with any such designation or assignment.

     (b) Replacement of Lenders. If any Lender requests compensation under Section
3.04, 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 3.01, the Borrower
may replace such Lender in accordance with Section 10.13.

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     3.07 Survival. All of the Borrower’s obligations under this Article III shall survive
termination of the Aggregate Commitments, repayment of all other Obligations hereunder, and
resignation of the Administrative Agent.

ARTICLE IV.

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

     4.01 Conditions of Initial Credit Extension. The obligation of each L/C Issuer and each
Lender to make its initial Credit Extension hereunder is subject to satisfaction of the following
conditions precedent:

     (a) The Administrative Agent’s receipt of the following, each of which shall be originals or
telecopies (followed promptly by originals) unless otherwise specified, each properly executed by a
Responsible Officer of the signing Loan Party, each dated the Closing Date (or, in the case of
certificates of governmental officials, a recent date before the Closing Date) and each in form and
substance satisfactory to the Administrative Agent and each of the Lenders:

     (i) executed counterparts of this Agreement and the Subsidiary Guaranty, sufficient in
number for distribution to the Administrative Agent, each Lender and the Borrower;

     (ii) a Note executed by the Borrower in favor of each Lender requesting a Note;

     (iii) an irrevocable proxy, pledge and security agreement, in substantially the form of
Exhibit G (together with each other irrevocable proxy, pledge and security agreement
and irrevocable proxy, pledge and security agreement supplement delivered pursuant to
Section 6.09, in each case as amended, the “Security Agreement”), duly
executed by each Loan Party, together with:

     (A) certificates representing the Pledged Equity referred to therein
accompanied by undated transfer powers executed in blank or, if any of the Pledged
Equity shall be uncertificated securities, confirmation and evidence satisfactory to
the Administrative Agent that the security interest in such uncertificated
securities has been transferred to and perfected by the Administrative Agent for the
benefit of the Secured Parties in accordance with Section 9-106 of the Uniform
Commercial Code, and instruments evidencing the Pledged Debt indorsed in blank,

     (B) proper Financing Statements in form appropriate for filing under the
Uniform Commercial Code of all jurisdictions that the Administrative Agent may deem
necessary or desirable in order to perfect the Liens created under the Security
Agreement, covering the Collateral described in the Security Agreement,

     (C) completed requests for information, dated on or before the date of the
initial Credit Extension, listing all effective financing statements filed in the
jurisdictions referred to in clause (B) above that name any Loan Party as debtor,
together with copies of such other financing statements,

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     (D) [reserved],

     (E) the Control Agreements duly executed by the appropriate parties, and

     (F) evidence that all other action, recordings and filings that the
Administrative Agent may deem necessary or desirable in order to perfect the Liens
created under the Security Agreement has been taken (including receipt of duly
executed payoff letters, UCC-3 termination statements and consent agreements) or
arrangements therefor satisfactory to the Administrative Agent shall have been made;

     (iv) a first preferred fleet mortgage, in substantially the form of Exhibit H
(with such changes as may be satisfactory to the Administrative Agent and its counsel to
account for local law matters) and covering each of the Specified Rigs listed on
Schedule 5.07 (together with each other mortgage and mortgage supplement or
amendment delivered pursuant to Section 6.09, in each case as amended, the
“Mortgages”), duly executed by the appropriate Loan Party, together with:

     (A) evidence that counterparts of the Mortgages have been duly executed,
acknowledged and delivered and are in form suitable for filing or recording with the
United States Coast Guard and all other filing or recording offices that the
Administrative Agent may deem necessary or desirable in order to create a valid
first and subsisting Lien on the “vessels” described therein in favor of the
Administrative Agent for the benefit of the Secured Parties and that all filing,
documentary, stamp, intangible and recording taxes and fees have been paid (or
arrangements for such payment satisfactory to the Administrative Agent shall have
been made),

     (B) evidence of the insurance required by the terms of the Mortgages, and

     (C) evidence that all other action that the Administrative Agent may deem
necessary or desirable in order to create valid first and subsisting Liens on the
property described in the Mortgages has been taken, including delivery of an
abstract of title, certificate of ownership, copy of certificate of documentation,
and copy of certificate of financial responsibility (for each jurisdiction where
applicable) with respect to each Specified Rig;

     (v) such certificates of resolutions or other action, incumbency certificates and/or
other certificates of Responsible Officers of each Loan Party as the Administrative Agent
may require evidencing the identity, authority and capacity of each Responsible Officer
thereof authorized to act as a Responsible Officer in connection with this Agreement and the
other Loan Documents to which such Loan Party is a party or is to be a party;

     (vi) such documents and certifications as the Administrative Agent may reasonably
require to evidence that each Loan Party is duly organized or formed, and that

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each of the Borrower and each Subsidiary Guarantor is validly existing, in good
standing and qualified to engage in business in each jurisdiction where its ownership, lease
or operation of properties or the conduct of its business requires such qualification,
except to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect;

     (vii) a favorable opinion of Bracewell and Giuliani LLP, counsel to the Loan Parties,
addressed to the Administrative Agent and each Lender, in substantially the form of
Exhibit I-1 and such other matters concerning the Loan Parties and the Loan
Documents as the Required Lenders may reasonably request;

     (viii) a favorable opinion of Ronald Potter, Esq., general counsel to the Loan Parties,
addressed to the Administrative Agent and each Lender, in substantially the form of
Exhibit I-2 and such other matters concerning the Loan Parties and the Loan
Documents as the Required Lenders may reasonably request;

     (ix) a certificate of a Responsible Officer of each Loan Party either (A) attaching
copies of all consents, licenses and approvals required in connection with the execution,
delivery and performance by such Loan Party and the validity against such Loan Party of the
Loan Documents to which it is a party, and such consents, licenses and approvals shall be in
full force and effect, or (B) stating that no such consents, licenses or approvals are so
required;

     (x) a certificate signed by a Responsible Officer of the Borrower certifying (A) that
the conditions specified in Sections 4.02(a) and (b) have been satisfied,
and (B) that there has been no event or circumstance since the date of the most recent
Audited Financial Statements that has had or could be reasonably expected to have, either
individually or in the aggregate, a Material Adverse Effect;

     (xi) copies of the Audited Financial Statements and unaudited interim consolidated
financial statements of the Borrower and its consolidated Subsidiaries for each fiscal
quarterly period ended subsequent to December 31, 2007 as to which such financial statements
are available, accompanied by a certificate of a Responsible Officer of the Borrower;

     (xii) the consolidated balance sheet, and statements of earnings and cash flows of the
Borrower, prepared on a pro forma basis, and projections of the revenues, expenses, and cash
flows of the Borrower covering the period from the Closing Date through December 31, 2012,
prepared on a quarterly basis for each fiscal year ending on December 31, 2008 and December
31, 2009 and an annual basis for each fiscal year December 31, 2010, December 31, 2011, and
December 31, 2012 (the “Initial Projections”), prepared by a Responsible
Officer of the Borrower having responsibility over financial matters, all in form and
substance satisfactory to the Administrative Agent;

     (xiii) the Initial Appraisal Report;

     (xiv) if the initial Credit Extension shall be in an aggregate principal amount equal
to or greater than $50,000,000, a Borrowing Base Certificate duly certified by the

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chief executive officer, chief financial officer, treasurer or controller of the
Borrower relating to the initial Credit Extension;

     (xv) certificates of insurance, naming the Administrative Agent, on behalf of the
Secured Parties, as an additional insured or loss payee, as the case may be, under all
insurance policies maintained with respect to the assets and properties of the Loan Parties
that constitutes Collateral;

     (xvi) a duly completed Compliance Certificate as of the last day of the fiscal quarter
of the Borrower ended March 31, 2008, signed by the chief financial officer of the Borrower;

     (xvii) evidence that the Existing Credit Agreement has been, or concurrently with the
Closing Date is being, terminated and all Liens securing obligations under the Existing
Credit Agreement have been or concurrently with the Closing Date are being released; and

     (xviii) such other assurances, certificates, documents, consents or opinions as the
Administrative Agent, the L/C Issuers, or any Lender reasonably may require.

     (b) The Administrative Agent, Lenders and Co-Arrangers shall have received all fees and other
amounts due and payable on or prior to the Closing Date, including, to the extent invoiced prior to
the Closing Date, reimbursement or payment of all out-of-pocket expenses required to be reimbursed
or paid by the Borrower hereunder (including all such reasonable fees, charges and disbursements of
counsel to the Administrative Agent, paid directly to such counsel if requested by the
Administrative Agent).

     Without limiting the generality of the provisions of the last paragraph of Section
9.03, for purposes of determining compliance with the conditions specified in this Section
4.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved
or accepted or to be satisfied with, each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative
Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.

     4.02 Conditions to all Credit Extensions. The obligation of each Lender to honor any Request
for Credit Extension (other than a Committed Loan Notice requesting only a conversion of Loans to
the other Type, or a continuation of Eurodollar Rate Loans) is subject to the following conditions
precedent:

     (a) The representations and warranties of the Borrower and each other Loan Party contained in
Article V or any other Loan Document or which are contained in any document furnished at
any time under or in connection herewith or therewith, shall be true and correct in all material
respects on and as of the date of such Credit Extension, except to the extent that such
representations and warranties specifically refer to an earlier date, in which case they shall be
true and correct in all material respects as of such earlier date, and except that for purposes of
this Section 4.02, the representations and warranties contained in subsections (a) and (b)
of

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Section 5.05 shall be deemed to refer to the most recent statements furnished pursuant
to clauses (a) and (b), respectively, of Section 6.01.

     (b) No Default shall exist, or would result from such proposed Credit Extension or the
application of the proceeds thereof.

     (c) The Administrative Agent and, if applicable, one of the L/C Issuers shall have received a
Request for Credit Extension in accordance with the requirements hereof.

     (d) At any time when the Total Outstandings equal or exceed $50,000,000, the Administrative
Agent shall be satisfied that the Borrowing Base exceeds the Outstanding Amount of the Term Loans,
Revolving Credit Loans and L/C Obligations at such time, after giving effect to such Credit
Extension.

     (e) In the case of a Credit Extension in the form of any Letter of Credit to be denominated in
an Alternative Currency, there shall not have occurred any change in national or international
financial, political or economic conditions or currency exchange rates or exchange controls which
in the reasonable opinion of the Administrative Agent or the applicable L/C Issuer would make it
impracticable for such Credit Extension to be denominated in the relevant Alternative Currency.

     Each Request for Credit Extension (other than a Committed Loan Notice requesting only a
conversion of Loans to the other Type or a continuation of Eurodollar Rate Loans) submitted by the
Borrower shall be deemed to be a representation and warranty that the conditions specified in
Sections 4.02(a) and (b) have been satisfied on and as of the date of the
applicable Credit Extension.

ARTICLE V.

REPRESENTATIONS AND WARRANTIES

     The Borrower represents and warrants to the Administrative Agent and the Lenders that:

     5.01 Corporate Existence; Compliance with Law. Each of the Borrower and its Subsidiaries (a)
is duly organized, validly existing and in good standing under the laws of the jurisdiction of its
organization, (b) has the corporate power and authority, and the legal right, to own and operate
its Property, to lease the Property it operates as lessee and to conduct the business in which it
is currently engaged, (c) is duly qualified as a foreign corporation and in good standing under the
laws of each jurisdiction where its ownership, lease or operation of Property or the conduct of its
business requires such qualification except to the extent that the failure to be so qualified could
not reasonably be expected to have a Material Adverse Effect and (d) is in compliance with all
Requirements of Law except to the extent that the failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.

     5.02 Corporate Power; Authorization; Enforceable Obligations. Each Loan Party has the
corporate power and authority, and the legal right, to make, deliver and perform the Loan Documents
to which it is a party and, in the case of the Borrower, to borrow hereunder. Each Loan Party has
taken all necessary corporate or other action to authorize the execution, delivery and performance
of the Loan Documents to which it is a party and, in the case of the Borrower,

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to authorize the borrowings on the terms and conditions of this Agreement. No consent or
authorization of, filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with (a) the borrowings hereunder, (b) the
execution, delivery, performance, validity or enforceability against any Loan Party of this
Agreement or any of the other Loan Documents, (c) the grant by any Loan Party of the Liens granted
by it pursuant to the Collateral Documents, (d) the perfection or maintenance of the Liens created
under the Collateral Documents (including the first priority nature thereof), or (e) the exercise
by the Administrative Agent or any Lender of its rights under the Loan Documents or the remedies in
respect of the Collateral pursuant to the Collateral Documents, except (i) consents,
authorizations, filings and notices described in Schedule 5.02, which consents,
authorizations, filings and notices have been obtained or made and are in full force and effect
(except as noted on Schedule 5.18) and (ii) the filings referred to in
Section 5.18. Each Loan Document has been duly executed and delivered on behalf of each
Loan Party that is a party thereto. This Agreement constitutes, and each other Loan Document upon
execution will constitute, a legal, valid and binding obligation of each Loan Party that is a party
thereto, enforceable against each such Loan Party in accordance with its terms, except as
enforceability may be limited by applicable Debtor Relief Laws and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).

     5.03 No Legal Bar. The execution, delivery and performance of this Agreement and the other
Loan Documents, the issuance of Letters of Credit, the borrowings hereunder and the use of the
proceeds thereof will not violate any Requirement of Law nor any material Contractual Obligation of
the Borrower or any of its Subsidiaries, including, without limitation, arising under any of the
Indentures, and will not result in, or require, the creation or imposition of any Lien on any of
their respective properties or revenues pursuant to any Requirement of Law or any such Contractual
Obligation (other than the Liens created by the Collateral Documents). No Requirement of Law or
Contractual Obligation applicable to the Borrower or any of its Subsidiaries could, either
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

     5.04 No Material Litigation. No litigation, investigation, claim or proceeding of or before
any arbitrator or Governmental Authority is pending or, to the knowledge of the Borrower after due
and diligent investigation, threatened by or against the Borrower or any of its Subsidiaries or
against any of their respective properties or revenues that (a) purport to affect or pertain to
this Agreement or any other Loan Document or any of the transactions contemplated hereby or
thereby, or (b) except as specifically disclosed in Schedule 5.04, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect, and there has been no
adverse change in the status, or financial effect on any Loan Party or any Subsidiary thereof, of
the matters described in Schedule 5.04.

     5.05 Financial Statements; No Material Adverse Effect.

     (a) The Audited Financial Statements, reported on by and accompanied by an unqualified report
from KPMG LLP or PricewaterhouseCoopers LLP, as applicable, present fairly in all material respects
the consolidated financial condition of the Borrower and its Subsidiaries as at December 31, 2006
and December 31, 2007, as applicable, and the

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consolidated results of its operations and its consolidated cash flows for the respective
fiscal years then ended.

     (b) The unaudited consolidated balance sheet of the Borrower and its Subsidiaries at March 31,
2008, and the related unaudited consolidated statements of income and cash flows for the period
ended on such date, present fairly in all material respects the consolidated financial condition of
the Borrower and its Subsidiaries as at such date, and the consolidated results of its operations
and its consolidated cash flows for the quarterly period then ended (subject to the absence of
footnotes and normal year-end audit adjustments).

     (c) All such financial statements described in subsections (a) and (b) of this Section,
including the related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as approved by KPMG LLP or
PricewaterhouseCoopers LLP, as applicable, and disclosed therein). The Borrower and its
Subsidiaries do not have any material Guarantees, contingent liabilities and liabilities for taxes
(except for any such tax liabilities to taxing authorities outside of the United States which are
not, in the aggregate, material to the Borrower and its Subsidiaries taken as a whole) or any
long-term leases or unusual forward or long-term commitments, including, without limitation, any
interest rate or foreign currency swap or exchange transaction or other obligation in respect of
derivatives, that are not reflected in the most recent financial statements referred to in the
foregoing subsection (b). During the period from December 31, 2007 to and including the date
hereof, there has been no Disposition by the Borrower or any of its Subsidiaries of any material
part of its business or Property, except as reflected in the financial statements described in
subsections (a) and (b) of this Section.

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

     (e) The Projections of the Borrower and its consolidated Subsidiaries, copies of which have
heretofore been furnished to the Lenders, have been prepared in good faith under the direction of a
Responsible Officer of the Borrower having responsibility for financial matters, and in accordance
with GAAP based upon good faith estimates and assumptions believed by management of the Borrower to
be reasonable at the time made. The Borrower has no reason to believe that as of the date of
delivery thereof such Projections are materially misleading in any material respect in light of the
circumstances under which made, or omit to state any material fact which would render them
misleading in any material respect, it being recognized by the Lenders that such financial
information as it relates to future events is not to be viewed as fact and that actual results
during the period or periods covered by such financial information may differ from the projected
results set forth therein by a material amount.

     5.06 No Default. Neither any Loan Party nor any Subsidiary thereof is in default under or
with respect to any of its Contractual Obligations in any respect that could, either individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect. No Default or Event
of Default has occurred and is continuing or would result from the consummation of the transactions
contemplated by this Agreement or any other Loan Document.

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     5.07 Ownership of Property; Liens. Each of the Borrower and each Subsidiary has good record
and marketable title in fee simple to, or a valid leasehold interest in, all its material real
property, and good title to, or a valid leasehold interest in, all its other material Property, and
none of such Property is subject to any Lien except Liens permitted by Section 7.01.
Schedule 5.07 sets forth a complete and accurate list, as of the Closing Date, of all barge
rigs located and operating in the continental United States or Gulf of Mexico waters subject to
state or Federal jurisdiction owned by each Loan Party and each of its Subsidiaries, showing as of
the date hereof the record owner and registration number as contained in the official records of
the National Vessel Documentation Center of the United States Coast Guard.

     5.08 Intellectual Property. The Borrower and each of its Subsidiaries owns, or is licensed to
use, all material Intellectual Property necessary for the conduct of its business as currently
conducted; no material claim has been asserted and is pending by any Person challenging or
questioning the use of any such Intellectual Property or the validity or effectiveness of any such
Intellectual Property, nor does the Borrower know of any valid basis for any such claim; and the
use of such Intellectual Property by the Borrower and its Subsidiaries does not infringe on the
rights of any Person in any material respect.

     5.09 Taxes. Each of the Borrower and each of its Subsidiaries has filed or caused to be filed
all Federal, state and other material tax returns and reports that are required to be filed and has
paid all taxes shown to be due and payable on said returns or on any assessments made against it or
any of its Property and all other taxes, fees or other charges imposed on it or any of its Property
by any Governmental Authority (other than any the amount or validity of which are currently being
contested in good faith by appropriate proceedings diligently conducted in each case, with respect
to which reserves in conformity with GAAP have been provided on the books of the Borrower or its
Subsidiaries, as the case may be); and no tax Lien has been filed, and, to the knowledge of the
Borrower, no claim is being asserted, with respect to any such tax, fee or other charge (other than
any such Liens and claims in favor of taxing authorities outside of the United States which are
not, in the aggregate, material to the Borrower and its Subsidiaries taken as a whole). Neither
the Borrower nor any Subsidiary thereof is party to any tax sharing agreement.

     5.10 Federal Regulations. No part of the proceeds of any Loans will be used in violation of
Regulation U issued by the FRB as now and from time to time hereafter in effect or for any purpose
that violates the provisions of the regulations of the FRB.

     5.11 Labor Matters. There are no strikes or other labor disputes against the Borrower or any
of its Subsidiaries pending or, to the knowledge of the Borrower, threatened that (individually or
in the aggregate) could reasonably be expected to have a Material Adverse Effect. Hours worked by
and payment made to employees of the Borrower and its Subsidiaries have not been in violation of
the Fair Labor Standards Act or any other applicable Requirement of Law dealing with such matters
that (individually or in the aggregate) could reasonably be expected to have a Material Adverse
Effect. All payments due from the Borrower or any of its Subsidiaries on account of employee
health and welfare insurance that (individually or in the aggregate) could reasonably be expected
to have a Material Adverse Effect if not paid have been paid or accrued as a liability on the books
of the Borrower or the relevant Subsidiary.

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     5.12 ERISA Compliance.

     (a) Each Plan is in compliance in all material respects with the applicable provisions of
ERISA, the Code and other Federal or state Laws, except where such non-compliance has not had and
could not reasonably be expected to have a Material Adverse Effect. Each Plan that is intended to
qualify under Section 401(a) of the Code has received a favorable determination letter from the IRS
or an application for such a letter is currently being processed by the IRS with respect thereto
and, to the best knowledge of the Borrower, nothing has occurred which would prevent, or cause the
loss of, such qualification. The Borrower and each ERISA Affiliate have made all required
contributions to each Plan subject to Section 412 of the Code, and no application for a funding
waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made
with respect to any Plan.

     (b) There are no pending or, to the best knowledge of the Borrower, threatened claims, actions
or lawsuits, or action by any Governmental Authority, with respect to any Plan that could
reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction
or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.

     (c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no Pension Plan
has any Unfunded Pension Liability; (iii) neither the Borrower nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any
Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither
the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability
(and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would
result in such liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan;
and (v) neither the Borrower nor any ERISA Affiliate has engaged in a transaction that could be
subject to Section 4069 or 4212(c) of ERISA.

     (d) With respect to each scheme or arrangement mandated by a government other than the United
States (a “Foreign Government Scheme or Arrangement”) and with respect to each employee
benefit plan maintained or contributed to by any Loan Party or any Subsidiary of any Loan Party
that is not subject to United States law (a “Foreign Plan”), each Foreign Plan is in
compliance in all material respects with the provisions of the applicable law or terms of the
applicable Foreign Government Scheme or Arrangement, except where such non-compliance has not had
and could not reasonably be expected to have a Material Adverse Effect.

     5.13 Investment Company Act; Other Regulations. No Loan Party is an “investment company”, or
a company “controlled” by an “investment company”, within the meaning of the Investment Company Act
of 1940, as amended. No Loan Party is subject to regulation under any Requirement of Law (other
than Regulation X of the FRB) which limits its ability to incur Indebtedness.

     5.14 Subsidiaries. (a) The Subsidiaries listed on Schedule 5.14 constitute all of the
Subsidiaries of the Borrower at the date hereof. Schedule 5.14 sets forth as of the
Closing Date the name and jurisdiction of incorporation and, in the case of each Loan Party, the
U.S. taxpayer identification number of each such Subsidiary and, as to each, the percentage of each
class of

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Equity Interest owned by each Loan Party. All of the outstanding Equity Interests in such
Subsidiaries have been validly issued, and fully paid and non-assessable and, with respect to
Equity Interests that are Collateral, are owned free and clear of all Liens except those created
under the Collateral Documents. The Borrower has no Investments in any other corporation or entity
other than those specifically disclosed in Schedule 5.14. Schedule 5.14 identifies
as of the Closing Date each Material Subsidiary, Immaterial Subsidiary and Excluded Subsidiary.

     (b) As of the date hereof, there are no outstanding subscriptions, options, warrants, calls,
rights or other agreements or commitments (other than stock options granted to employees or
directors and directors’ qualifying shares) of any nature relating to any Equity Interests of the
Borrower or any Subsidiary, except as disclosed on Schedule 5.14.

     5.15 Use of Proceeds. The proceeds of the Loans, and the Letters of Credit, shall be used for
the general corporate purposes of the Borrower and its Subsidiaries not in contravention of any Law
or any Loan Document, including to repay the Indebtedness under the Existing Credit Agreement and
to fund acquisitions and capital expenditures.

     5.16 Environmental Matters. Other than as set forth on Schedule 5.16 and exceptions
to any of the following that could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect:

     (a) The Borrower and its Subsidiaries: (i) are, and within the period of all applicable
statutes of limitation have been, in compliance with all applicable Environmental Laws; (ii) hold
all Environmental Permits (each of which is in full force and effect) required for any of their
current or intended operations or for any property owned, leased, or otherwise operated by any of
them; (iii) are, and within the period of all applicable statutes of limitation have been, in
compliance with all of their Environmental Permits; and (iv) reasonably believe that: each of their
Environmental Permits will be timely renewed and complied with, without material expense; any
additional Environmental Permits that may be required of any of them will be timely obtained and
complied with, without material expense; and compliance with any Environmental Law that is or is
expected to become applicable to any of them will be timely attained and maintained, without
material expense.

     (b) Hazardous Materials are not present at, on, under, in, or about any real property now or
formerly owned, leased or operated by the Borrower or any of its Subsidiaries, or at any other
location (including, without limitation, any location to which Hazardous Materials have been sent
for re-use or recycling or for treatment, storage, or disposal) which could reasonably be expected
to (i) give rise to liability of the Borrower or any of its Subsidiaries under any applicable
Environmental Law or otherwise result in costs to the Borrower or any of its Subsidiaries, or (ii)
interfere with the Borrower’s or any of its Subsidiaries’ continued operations, or (iii) impair the
fair saleable value of any real property owned or leased by the Borrower or any of its
Subsidiaries.

     (c) There is no judicial, administrative, or arbitral proceeding (including any notice of
violation or alleged violation) under or relating to any Environmental Law to which the Borrower or
any of its Subsidiaries is, or to the knowledge of the Borrower or any of its

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Subsidiaries will be, named as a party that is pending or, to the knowledge of the Borrower or
any of its Subsidiaries, threatened.

     (d) Neither the Borrower nor any of its Subsidiaries has received any written request for
information, or been notified that it is a potentially responsible party under or relating to the
CERCLA or any similar Environmental Law, or with respect to any Hazardous Material.

     (e) Neither the Borrower nor any of its Subsidiaries has entered into or agreed to any consent
decree, order, or settlement or other agreement, or is subject to any judgment, decree, or order or
other agreement, in any judicial, administrative, arbitral, or other forum for dispute resolution,
relating to compliance with or liability under any Environmental Law.

     (f) Neither the Borrower nor any of its Subsidiaries has assumed or retained, by contract or
operation of law, any liabilities of any kind, fixed or contingent, known or unknown, under any
Environmental Law or with respect to any Hazardous Material other than indemnity obligations in the
ordinary course of business.

     5.17 Accuracy of Information, etc. No written statement or information contained in this
Agreement, any other Loan Document or any other document, certificate or written statement
furnished to the Administrative Agent or the Lenders or any of them, by or on behalf of any Loan
Party for use in connection with the transactions contemplated hereby and the negotiation of this
Agreement or the other Loan Documents or delivered hereunder or under any other Loan Document (in
each case, as modified or supplemented by other information so furnished), contained as of the date
such statement, information, document or certificate was so furnished, any untrue statement of a
material fact or omitted to state a material fact necessary in order to make the statements
contained herein or therein, taken as a whole, not materially misleading in light of the
circumstances under which made. As of the Closing Date, there is no fact known to any Loan Party
that could, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect that has not been expressly disclosed herein, in the other Loan Documents or in any other
documents, certificates and statements furnished to the Administrative Agent and the Lenders for
use in connection with the transactions contemplated hereby and by the other Loan Documents.

     5.18 Collateral Documents. The provisions of the Collateral Documents are effective to create
in favor of the Administrative Agent, for the benefit of the Secured Parties, a legal, valid and
enforceable Lien on all right, title and interest of the respective Loan Parties in the Collateral
described therein and proceeds thereof. When financing statements in appropriate form are filed in
the offices specified on Schedule 5.18, the Security Agreement shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in
such Collateral (other than the Specified Rigs) and the proceeds thereof, as security for the
Secured Obligations (as defined in the Security Agreement), in each case prior and superior in
right to any other Person (except Liens permitted by Section 7.01). When the Mortgage is
filed for recording in the National Vessel Documentation Center of the United States Coast Guard
located in Falling Waters, West Virginia, the Mortgage shall constitute a fully perfected Lien on,
and security interest in, all right, title and interest of the Loan Parties in the Specified Rigs
and such other Collateral described therein and the proceeds thereof, as security for the Secured

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Obligations (as defined in the Mortgage), in each case prior and superior in right to any
other Person (except Liens permitted by Section 7.01).

     5.19 Solvency. As of the Closing Date, each of the Borrower and each Loan Party that is a
Material Subsidiary is, and after giving effect to the incurrence of all Indebtedness and
obligations being incurred in connection herewith and therewith will be and will continue to be,
Solvent.

     5.20 Insurance. The properties of the Borrower and its Subsidiaries are insured with
financially sound and reputable insurance companies not Affiliates of the Borrower, in such amounts
with such deductibles and covering such risks as are customarily carried by companies engaged in
similar businesses and owning similar properties in localities where the Borrower or the applicable
Subsidiary operates, except to the extent that reasonable self-insurance meeting the same standards
is maintained with respect to such risks, and which insurance meets the requirements of the
Mortgages.

ARTICLE VI.

AFFIRMATIVE COVENANTS

     So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation
hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, the
Borrower shall, and shall (except in the case of the covenants set forth in Sections 6.01,
6.02, and 6.03) cause each Subsidiary (other than any Immaterial Subsidiary) to:

     6.01 Financial Statements. Deliver to the Administrative Agent (which shall promptly furnish
to each Lender), in form and detail reasonably satisfactory to the Administrative Agent and the
Required Lenders:

     (a) as soon as available, but in any event within 90 days after the end of each fiscal year of
the Borrower, a copy of the audited consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such year and the related audited consolidated statements of income
and of cash flows for such year, setting forth in each case in comparative form the figures as of
the end of and for the previous year, reported on without a “going concern” or like qualification
or exception, or qualification arising out of the scope of the audit, by KPMG LLP or other
independent certified public accountants of nationally recognized standing;

     (b) as soon as available, but in any event not later than 45 days after the end of each of the
first three quarterly periods of each fiscal year of the Borrower, the unaudited consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at the end of such quarter and
the related unaudited consolidated statements of income and of cash flows for such quarter and the
portion of the fiscal year through the end of such quarter, setting forth in each case in
comparative form the figures as of the end of and for the corresponding period in the previous
year, certified by a Responsible Officer as being fairly stated in all material respects (subject
to normal year-end audit adjustments); and

     (c) as soon as available, but in any event not later than 30 days after the end of each month
occurring during each fiscal year of the Borrower (other than the third, sixth, ninth and

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twelfth such month), the unaudited consolidated balance sheets of the Borrower and its
Subsidiaries as at the end of such month and the related unaudited consolidated statements of
income and of cash flows for such month and the portion of the fiscal year through the end of such
month, setting forth in each case in comparative form the figures as of the end of and for the
corresponding period in the previous year, certified by a Responsible Officer as being fairly
stated in all material respects (subject to normal year-end audit adjustments);

all such financial statements to be complete and correct in all material respects and to be
prepared in reasonable detail and in accordance with GAAP applied consistently throughout the
periods reflected therein and with prior periods (except as approved by such accountants or
officer, as the case may be, and disclosed therein).

As to any information contained in materials furnished pursuant to Section 6.02(e), the
Borrower shall not be separately required to furnish such information under clause (a) or (b)
above, but the foregoing shall not be in derogation of the obligation of the Borrower to furnish
the information and materials described in Section 6.01(a) and (b) above at the
times specified therein.

     6.02 Certificates; Other Information. Deliver to the Administrative Agent (which shall
promptly furnish to each Lender), or, in the case of clause (f), to the relevant Lender, in
form and detail reasonably satisfactory to the Administrative Agent and the Required Lenders:

     (a) concurrently with the delivery of the financial statements referred to in Section
6.01(a), a certificate of the independent certified public accountants reporting on such
financial statements stating that in making the examination necessary therefor no knowledge was
obtained of any Default or Event of Default, except as specified in such certificate (it being
understood that such certificate shall be limited to the items that independent certified public
accountants are permitted to cover in such certificates pursuant to their professional standards
and customs of the profession);

     (b) concurrently with the delivery of any financial statements pursuant to
Section 6.01, (i) a certificate of a Responsible Officer stating that, to the best of such
Responsible Officer’s knowledge, each Loan Party during such period has observed or performed all
of its covenants and other agreements, and satisfied every condition, contained in this Agreement
and the other Loan Documents to which it is a party to be observed, performed or satisfied by it,
in each case to the extent any failure to do so would constitute a Default or Event of Default
hereunder, and that such Responsible Officer has obtained no knowledge of any Default or Event of
Default except as specified in such certificate and (ii) in the case of quarterly or annual
financial statements, (x) a Compliance Certificate containing all information and calculations
necessary for determining compliance by the Borrower and its Subsidiaries with the provisions of
this Agreement referred to therein as of the last day of the fiscal quarter or fiscal year of the
Borrower, as the case may be, and (y) any UCC financing statements or other filings or recordings
specified in such Compliance Certificate as being required to be delivered therewith;

     (c) as soon as available, and in any event no later than 45 days after the end of each fiscal
year of the Borrower, a detailed consolidated budget for the following fiscal year (including a
projected consolidated balance sheet of the Borrower and its Subsidiaries as of the

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end of the following fiscal year, and the related consolidated statements of projected cash
flow, projected changes in financial position and projected income), and, as soon as available,
significant revisions, if any, of such budget and projections with respect to such fiscal year
(collectively and together with the Initial Projections, the “Projections”), which
Projections shall in each case be accompanied by a certificate of a Responsible Officer stating
that such Projections are based on reasonable estimates, information and assumptions and that such
Responsible Officer has no reason to believe that such Projections are incorrect or misleading in
any material respect;

     (d) no later than 10 Business Days prior to the effectiveness thereof, copies of substantially
final drafts of any proposed amendment, supplement, waiver or other modification with respect to
the Indentures;

     (e) within five days after the same are sent, copies of all financial statements and reports
that the Borrower sends to the holders of any class of its debt securities or public equity
securities and, within five days after the same are filed, copies of all financial statements and
reports that the Borrower may make to, or file with, the SEC; and

     (f) promptly, such additional financial and other information as any Lender may from time to
time reasonably request.

     Documents required to be delivered pursuant to Section 6.01(a) or (b) or
Section 6.02(e) (to the extent any such documents are included in materials otherwise filed
with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been
delivered on the date (i) on which the Borrower posts such documents, or provides a link thereto on
the Borrower’s website on the Internet at the website address listed on Schedule 10.02; or
(ii) on which such documents are posted on the Borrower’s behalf on an Internet or intranet
website, if any, to which each Lender and the Administrative Agent have access (whether a
commercial, third-party website or whether sponsored by the Administrative Agent); provided
that: (i) the Borrower shall deliver paper copies of such documents to the Administrative Agent or
any Lender that requests the Borrower to deliver such paper copies until a written request to cease
delivering paper copies is given by the Administrative Agent or such Lender and (ii) the Borrower
shall notify the Administrative Agent and each Lender (by telecopier or electronic mail) of the
posting of any such documents and provide to the Administrative Agent by electronic mail electronic
versions (i.e., soft copies) of such documents. Notwithstanding anything contained herein,
in every instance the Borrower shall be required to provide paper copies of the Compliance
Certificates required by Section 6.02(b) to the Administrative Agent. Except for such
Compliance Certificates, the Administrative Agent shall have no obligation to request the delivery
or to maintain copies of the documents referred to above, and in any event shall have no
responsibility to monitor compliance by the Borrower with any such request for delivery, and each
Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such
documents.

     The Borrower hereby acknowledges that (a) the Administrative Agent and/or the Co-Arrangers
will make available to the Lenders and the L/C Issuers materials and/or information provided by or
on behalf of the Borrower hereunder (collectively, “Borrower Materials”) by posting the
Borrower Materials on IntraLinks or another similar electronic system (the

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“Platform”) and (b) certain of the Lenders (each, a “Public Lender”) may have
personnel who do not wish to receive material non-public information with respect to any of the
Borrower or its respective Affiliates, or the respective securities of any of the foregoing, and
who may be engaged in investment and other market-related activities with respect to such Persons’
securities. The Borrower hereby agrees that it will use commercially reasonable efforts to
identify that portion of the Borrower Materials that may be distributed to the Public Lenders and
that (w) all such Borrower Materials that are to be made available to Public Lenders shall be
clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC”
shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” the
Borrowers shall be deemed to have authorized the Administrative Agent, the Co-Arrangers, the L/C
Issuers and the Lenders to treat the Borrower Materials as not containing any material non-public
information (although it may be sensitive and proprietary) with respect to the Borrowers or their
respective securities for purposes of United States Federal and state securities laws
(provided, however, that to the extent the Borrower Materials constitute
Information, they shall be treated as set forth in Section 10.07); (y) all Borrower
Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform
designated “Public Side Information;” and (z) the Administrative Agent and the Co-Arrangers shall
be entitled to treat the Borrower Materials that are not marked “PUBLIC” as being suitable only for
posting on a portion of the Platform not designated “Public Side Information.”

     6.03 Notices. Promptly notify the Administrative Agent (which shall promptly furnish such
notice to each Lender) of:

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

     (b) any (i) default or event of default under any Contractual Obligation of the Borrower or
any of its Subsidiaries that could reasonably be expected to have a Material Adverse Effect or (ii)
litigation, investigation or proceeding which may exist at any time between the Borrower or any of
its Subsidiaries and any Governmental Authority that, if adversely determined, could reasonably be
expected to have a Material Adverse Effect;

     (c) any litigation or proceeding affecting the Borrower or any of its Subsidiaries (i) in
which the amount involved is $5,000,000 or more and not covered by insurance or (ii) in which
injunctive or similar relief is sought which, if granted, could reasonably be expected to have a
Material Adverse Effect;

     (d) as soon as possible and in any event within 10 days after the Borrower knows or has reason
to know of the occurrence of any ERISA Event; and

     (e) any development or event that has had or could reasonably be expected to have a Material
Adverse Effect.

     Each notice pursuant to this Section 6.03 shall be accompanied by a statement of a
Responsible Officer of the Borrower setting forth details of the occurrence referred to therein and
stating what action the Borrower or relevant Subsidiary has taken and proposes to take with respect
thereto. Each notice pursuant to Section 6.03(a) shall describe with particularity any and
all provisions of this Agreement and any other Loan Document that have been breached.

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     6.04 Conduct of Business and Maintenance of Existence, etc. (a) (i) Preserve, renew and keep
in full force and effect its corporate or other existence and (ii) take all reasonable action to
maintain all rights, privileges and franchises useful and necessary in the normal conduct of its
business, except, in each case, as otherwise permitted by Section 7.04 and except, in the
case of the foregoing clause (ii), to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect; and (b) comply with all Contractual Obligations and
Requirements of Law, except to the extent that failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.

     6.05 Maintenance of Property; Insurance. (a) Keep all material Property and systems useful
and necessary in its business in good working order and condition, ordinary wear and tear excepted
and (b) maintain with financially sound and reputable insurance companies insurance on all its
Property in at least such amounts and against at least such risks (but including in any event
public liability, product liability and business interruption) as are usually insured against in
the same general area by companies engaged in the same or a similar business. The Borrower shall
furnish certificates, policies or endorsements to Administrative Agent as Administrative Agent
shall require as proof of such insurance, and, if the Borrower fails to do so, Administrative Agent
is authorized, but not required, to obtain such insurance at the expense of the Borrower. All
policies shall provide for at least thirty (30) days prior written notice to Administrative Agent
of any cancellation or reduction of coverage and that Administrative Agent may act as attorney for
the Borrower in obtaining, and at any time an Event of Default exists or has occurred and is
continuing, adjusting, settling, amending and canceling such insurance. The Borrower shall cause
Administrative Agent to be named as a loss payee and an additional insured (but without any
liability for any premiums) under such insurance policies and the Borrower shall obtain
non-contributory lender’s loss payable endorsements to all insurance policies in form and substance
satisfactory to Administrative Agent. Such lender’s loss payable endorsements shall specify that
the proceeds of such insurance shall be payable to Administrative Agent, for the ratable benefit of
the Secured Parties, as its interests may appear and further specify that Administrative Agent
shall be paid regardless of any act or omission by the Borrower or any of its Affiliates. The
Administrative Agent, at its option, may apply any insurance proceeds received by Administrative
Agent at any time while any Event of Default shall have occurred and be continuing to the cost of
repairs or replacement of Collateral and/or, to payment of the Obligations, whether or not then
due, in any order and in such manner as Administrative Agent may determine or hold such proceeds as
cash collateral for the Obligations.

     6.06 Inspection of Property; Books and Records; Discussions. (a) Keep proper books of records
and account in which full, true and correct entries in conformity with GAAP and all Requirements of
Law shall be made of all dealings and transactions in relation to its business and activities and
(b) permit any Lender (accompanied by any other Lender that so elects) to visit and inspect any of
its properties and examine and make abstracts from any of its books and records at any reasonable
time, upon reasonable prior notice, and to discuss the business, operations, properties and
financial and other condition of the Borrower and its Subsidiaries with officers and employees of
the Borrower and its Subsidiaries and with its independent certified public accountants (it being
understood that all such notices shall be given through the Administrative Agent and shall be
coordinated with any other such notices to the

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extent reasonably possible), in each case no more often than twice in any calendar year in the
aggregate for all Lenders unless an Event of Default shall have occurred and be continuing.

     6.07 Environmental Laws. Comply in all respects with, and take all reasonable action to
ensure compliance in all respects by all tenants and subtenants, if any, with, all applicable
Environmental Laws, and obtain and comply in all respects with and maintain, and take all
reasonable action to ensure that all tenants and subtenants obtain and comply in all respects with
and maintain, any and all licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws, except to the extent that any failures to so comply or maintain
could not, in the aggregate, reasonably be expected to result in a Material Adverse Effect.

     6.08 Payment of Obligations. Pay and discharge as the same shall become due and payable, all
its obligations and liabilities, including (a) all tax liabilities, assessments and governmental
charges or levies upon it or its properties or assets, unless the same are being contested in good
faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP
are being maintained by the Borrower or such Subsidiary; (b) all lawful claims which, if unpaid,
would by law become a Lien upon its property; and (c) all Indebtedness, as and when due and
payable, but subject to any subordination provisions contained in any instrument or agreement
evidencing such Indebtedness, in each case, where non-payment thereof could reasonably be expected
to, individually or in the aggregate, have a Material Adverse Effect.

     6.09 Additional Collateral, etc. (a) With respect to any Specified Personal Property acquired
after the Closing Date by the Borrower or any Subsidiary Guarantor (other than any Property subject
to a Lien expressly permitted by Section 7.01(g) or 7.01(j)), including without
limitation, any barge rig located or operating in the continental United States or waters of the
Gulf of Mexico subject to state or Federal jurisdiction, not listed on Schedule 5.07, as to
which the Administrative Agent, for the benefit of the Secured Parties, does not have a perfected
Lien, promptly (i) execute and deliver to the Administrative Agent such amendments or supplements
to the Security Agreement or Mortgages or such other documents as the Administrative Agent
reasonably deems necessary to grant to the Administrative Agent, for the benefit of the Secured
Parties, a Lien in such Property and (ii) take all actions necessary or advisable to grant to the
Administrative Agent, for the benefit of the Secured Parties, a perfected first priority Lien in
such Property, subject to Permitted Liens, including without limitation, the filing of Uniform
Commercial Code financing statements in such jurisdictions as may be required by the Security
Agreement or by law or as may be requested by the Administrative Agent and the recording of such
amendment or supplement with the United States Coast Guard.

     (b) With respect to any new Material Subsidiary (other than an Excluded Subsidiary) created or
acquired after the Closing Date (which, for the purposes of this paragraph, shall include any
existing Material Subsidiary that ceases to be an Excluded Subsidiary and any existing Domestic
Subsidiary that ceases to be an Immaterial Subsidiary), by the Borrower or any of the Subsidiary
Guarantors, promptly (i) cause such new Subsidiary (A) to become a party to the Subsidiary Guaranty
and the Security Agreement, (B) in the case of any such Subsidiary owning a barge rig located or
operating in the continental United States or waters of the Gulf of Mexico subject to state or
Federal jurisdiction, to execute and deliver a Mortgage covering such

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rig, and (C) in the case of any Domestic Subsidiary, to take such actions necessary or
advisable to grant to the Administrative Agent, for the benefit of the Secured Parties, a perfected
first priority Lien in the Collateral described in the Security Agreement or Mortgage with respect
to such new Subsidiary (subject to Permitted Liens), including, without limitation, the filing of
Uniform Commercial Code financing statements in such jurisdictions as may be required by the
Security Agreement or by law or as may be reasonably requested by the Administrative Agent and the
recording of such Mortgage with the United States Coast Guard, and (ii) if reasonably requested by
the Administrative Agent deliver to the Administrative Agent legal opinions relating to the matters
described above, which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.

     (c) With respect to each Identified Additional Material Subsidiary, on or before June 15,
2008, (i) deliver to the Administrative Agent a supplement to the Subsidiary Guaranty and Security
Agreement duly executed by each Identified Additional Material Subsidiary, and (ii) take such
actions and deliver to the Administrative Agent all such items as required to be taken or delivered
by a Loan Party or with respect to a Loan Party under clauses (i), (iii), (v), (vi), (vii), (viii),
(ix) and (xviii) of Section 4.01(a).

     6.10 Borrowing Base Certificate. In the case of the Borrower, at any time when the Total
Outstandings equal or exceed $50,000,000, deliver or cause to be delivered, at the Borrower’s
expense, the following:

     (a) to the Administrative Agent, the following documents in a form satisfactory to it:

     (i) on a monthly basis and in no event later than 25 days after the end of each such
month or, if an Event of Default shall exist, more frequently as the Administrative Agent
may reasonably request (but in no event more often than weekly) or as the Borrower shall
elect, a Borrowing Base Certificate, accompanied by such supporting detail and documentation
as is contemplated by the Borrowing Base Certificate and/or as shall be requested by the
Administrative Agent in its reasonable discretion (in a form and detail satisfactory to the
Administrative Agent);

     (ii) on a monthly basis and in no event later than 25 days after the end of each such
month or, if an Event of Default shall exist, more frequently as the Administrative Agent
may in good faith request (but in no event more often than weekly), detailed agings of
Accounts and a detailed listing of the inventory of Quail Tools (together with a
reconciliation to its general ledger); and

     (iii) upon the Administrative Agent’s request in good faith (but in no event more often
than (x) monthly so long as no Event of Default shall exist or (y) weekly if an Event of
Default shall exist), (A) copies of customer statements and credit memos, remittance advices
and reports, and copies of deposit slips and bank statements, and (B) a statement of the
outstanding loans and payments made, and Accounts owing to, Affiliates as of the last day of
the immediately preceding month.

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     (b) To the Administrative Agent such other reports, statements and reconciliations with
respect to the Borrowing Base or the Collateral as it shall from time to time request in its
reasonable discretion.

     6.11 Cash Management Systems. (a) Within 30 days after the opening of any deposit account,
securities account, lockbox account, concentration account, collection account or disbursement
account, in each case other than any Immaterial Account, in the United States, deliver to the
Administrative Agent a schedule (a “Supplemental Account Identification Schedule”) which
provides, in respect of each such account opened since the Closing Date (i) the name and location
of each bank and securities intermediary at which the Borrower or such Subsidiary Guarantor
maintains a deposit account, securities account, lockbox account, concentration account, collection
account or disbursement account in the United States and (ii) the account number and account name
or other relevant descriptive data with respect to each such account and such other information
with respect to each such account as the Administrative Agent shall reasonably request.

     (b) On or before the date which is 30 days after the delivery of any Supplemental Account
Identification Schedule, cause to be delivered to the Administrative Agent a Control Agreement
and/or a Lockbox Agreement with respect to each account described in such Supplemental Account
Identification Schedule which the Administrative Agent reasonably requires to be subject to such an
agreement, in each case duly executed and delivered by the Borrower or the relevant Subsidiary
Guarantor and by the bank or securities intermediary that maintains such account.

     (c) Cause all proceeds of any Collateral in every form, including, without limitation, cash,
checks, wire transfers and other forms of receipts, to be deposited promptly in a collection
account or lockbox account (i) in respect of which a Control Agreement and/or Lockbox Agreement, as
appropriate, is in effect and (ii) which, at any time after an Event of Default has occurred and is
continuing, is used solely for the purpose of receiving proceeds of Collateral.

     6.12 Inspection of Collateral. The Borrower agrees that the Administrative Agent or its
agents may, as the Administrative Agent shall deem necessary or appropriate in the exercise of its
sole discretion, enter upon the premises of the Borrower or any Subsidiary Guarantor at any time
and from time to time, during normal business hours and upon reasonable notice under the
circumstances, and at any time whatsoever on and after the occurrence of a Default or Event of
Default, for the purposes of conducting field examinations and appraisals and inspecting,
evaluating and verifying the Collateral, all of the above to be at the Borrower’s expense during
the existence of an Event of Default and at the Lenders’ expense if no Event of Default exists.
Notwithstanding the foregoing, the Administrative Agent will require an annual appraisal of the
Borrowing Base Collateral at the Borrower’s expense with such appraisal to be (a) prepared by a
third-party collateral appraiser selected by the Administrative Agent in its sole reasonable
discretion, and (b) completed by no later than September 30 of each calendar year, beginning with
September 30, 2009.

     6.13 Casualty and Condemnation. The Borrower (a) will furnish to the Administrative Agent and
the Lenders written notice promptly, and in any event within five (5) Business Days of the
occurrence, of any Casualty Event to any Borrowing Base Collateral

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reasonably expected by the Borrower to result in Net Loss Proceeds in excess of $5,000,000 and
(b) will ensure that the Net Loss Proceeds of any such event (whether in the form of insurance
proceeds or otherwise) are collected and applied in accordance with the applicable provisions of
the Loan Documents.

     6.14 Further Assurances. From time to time execute and deliver, or cause to be executed and
delivered, such additional instruments, certificates or documents, and take such actions, as the
Administrative Agent may reasonably request for the purposes of implementing or effectuating the
provisions of this Agreement and the other Loan Documents, or of more fully perfecting or renewing
the rights of the Administrative Agent and the Lenders with respect to the Collateral (or with
respect to any additions thereto or replacements or proceeds thereof or with respect to any other
property or assets hereafter acquired by the Borrower or any Subsidiary which may be deemed to be
part of the Collateral) pursuant hereto or thereto. The Borrower agrees to execute, deliver and
cause to be recorded such amendments to the Mortgages as the Hedge Banks or Cash Managements Banks
may reasonably request to secure the Obligations under the Secured Hedge Agreements and Secured
Cash Management Agreements, respectively, by the Mortgages. Upon the exercise by the
Administrative Agent or any Lender of any power, right, privilege or remedy pursuant to this
Agreement or the other Loan Documents which requires any consent, approval, recording,
qualification or authorization of any Governmental Authority, the Borrower will execute and
deliver, or will cause the execution and delivery of, all applications, certifications, instruments
and other documents and papers that the Administrative Agent or such Lender may be required to
obtain from the Borrower or any of its Subsidiaries for such governmental consent, approval,
recording, qualification or authorization.

ARTICLE VII.

NEGATIVE COVENANTS

     So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation
hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, the
Borrower shall not, nor shall it permit any Subsidiary (other than any Immaterial Subsidiary) to,
directly or indirectly:

     7.01 Liens. Create, incur, assume or suffer to exist any Lien upon any of its Property,
assets or revenues, whether now owned or hereafter acquired, other than the following:

     (a) Liens for taxes, assessments or governmental charges or claims not yet due or which are
being contested in good faith by appropriate proceedings, provided that adequate reserves
with respect thereto are maintained on the books of the Borrower or its Subsidiaries, as the case
may be, in conformity with GAAP;

     (b) Landlords’, carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other
like Liens arising in the ordinary course of business which are not overdue for a period of more
than 30 days or that are being contested in good faith by appropriate proceedings;

     (c) pledges or deposits in connection with workers’ compensation, unemployment insurance and
other social security legislation;

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     (d) deposits to secure the payment or performance of bids, tenders, government contracts,
trade contracts (other than for borrowed money), leases, statutory or regulatory obligations,
surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the
ordinary course of business;

     (e) easements, rights-of-way, restrictions and other similar encumbrances incurred in the
ordinary course of business that, in the aggregate, are not substantial in amount and which do not
in any case materially detract from the value of the Property subject thereto or materially
interfere with the ordinary conduct of the business of the Borrower or any of its Subsidiaries;

     (f) Liens in existence on the date hereof listed on Schedule 7.01(f), securing
Indebtedness permitted by Section 7.03(d), provided that no such Lien is spread to
cover any additional Property after the Closing Date;

     (g) Liens securing Indebtedness of the Borrower or any other Subsidiary incurred pursuant to
Section 7.03(c) to finance the acquisition of fixed or capital assets, provided
that (i) such Liens shall be created within 90 days after the acquisition of such fixed or capital
assets, (ii) such Liens do not at any time encumber any Property other than the Property financed
by such Indebtedness and (iii) the amount of Indebtedness secured thereby is not increased;

     (h) Liens created pursuant to the Collateral Documents;

     (i) any interest or title of a lessor under any lease entered into by the Borrower or any
other Subsidiary in the ordinary course of its business and covering only the assets so leased;

     (j) Liens not otherwise permitted by this Section 7.01 so long as neither (i) the
aggregate outstanding principal amount of the obligations secured thereby nor (ii) the aggregate
fair market value (determined, in the case of each such Lien, as of the date such Lien is incurred)
of the assets subject thereto exceeds (as to the Borrower and all Subsidiaries) $20,000,000 at any
one time provided that no such Lien shall extend to or cover any Borrowing Base Collateral
or Equity Interests comprising Collateral;

     (k) judgment Liens not giving rise to an Event of Default under Section 8.01(h) so
long as any appropriate legal proceedings which may have been duly initiated for the review of such
judgment shall not have been finally terminated or the period within which such proceedings may be
initiated shall not have expired;

     (l) Liens upon specific items of inventory or other goods of the Borrower or any Subsidiary
securing such Person’s obligations in respect of bankers acceptances issued or created for the
account of such Person to facilitate the purchase, shipment, or storage of such inventory or other
goods;

     (m) Liens securing reimbursement obligations with respect to commercial letters of credit that
encumber documents and other property or assets relating to such letters of credit and products and
proceeds thereof; and

     (n) Liens permitted under the Mortgages.

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     7.02 Financial Condition Covenants.

     (a) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio as at the
last day of any period of four consecutive fiscal quarters of the Borrower to exceed 4.00:1.00.

     (b) Consolidated Interest Coverage Ratio. Permit the Consolidated Interest Coverage
Ratio for any period of four consecutive fiscal quarters of the Borrower to be less than 2.50:1.00.

     (c) Consolidated Senior Secured Leverage Ratio. Permit the Consolidated Senior
Secured Leverage Ratio as at the last day of any period of four consecutive fiscal quarters of the
Borrower to exceed 1.50:1.00.

     7.03 Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:

     (a) Indebtedness of any Loan Party pursuant to any Loan Document;

     (b) Indebtedness (i) of the Borrower to any Subsidiary and of any Wholly Owned Subsidiary
Guarantor to the Borrower or any other Subsidiary and (ii) of any Subsidiary to any Loan Party or
other Subsidiary;

     (c) Indebtedness (including, without limitation, in respect of Capitalized Leases and
Synthetic Lease Obligations) secured by Liens permitted by Section 7.01(g), (i) of the
Borrower or any of its Subsidiaries in an aggregate principal amount not to exceed $20,000,000 at
any one time outstanding and (ii) of any Foreign Subsidiaries in an aggregate principal amount not
to exceed $150,000,000 at any one time outstanding, provided that, with respect to this clause
(ii), as of the date of incurrence of such Indebtedness and giving effect thereto, the
Consolidated Senior Secured Leveraged Ratio calculated for the four consecutive fiscal periods most
recently ended does not exceed 1.00:1.00;

     (d) (i) Indebtedness outstanding on the date hereof and listed on Schedule 7.03(d) and
(ii) any Indebtedness the Net Cash Proceeds of which are used (A) to refinance, refund, renew or
extend any Indebtedness referred to in the preceding clause (i) (without any shortening of the
maturity of any principal amount thereof) or (B) to pay premiums, fees or expenses payable in
connection with any such refinancing, refunding, renewal or extension;

     (e) (i) Guarantees of the Borrower or any Subsidiary in respect of Indebtedness permitted
under this Section 7.03 and (ii) Guarantees made in the ordinary course of business by the
Borrower or any of its Subsidiaries of obligations of the Borrower or any Subsidiary Guarantor;

     (f) Indebtedness represented by agreements of the Borrower or any Subsidiary providing for
indemnification, adjustment of purchase price, or similar obligations, in each case, incurred or
assumed in connection with the Disposition of any business, assets, or Equity Interests of the
Borrower or any Subsidiary; provided that the maximum aggregate liability in respect of all
such Indebtedness shall at no time exceed the gross proceeds actually received by the Borrower and
its Subsidiaries in connection with such Disposition; and

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     (g) additional unsecured Indebtedness of the Borrower or any of its Subsidiaries in an
aggregate principal amount (for the Borrower and all Subsidiaries) not to exceed $100,000,000 at
any one time outstanding; as long such Indebtedness: (i) has a scheduled maturity occurring after
the Maturity Date, (ii) contains terms (including covenants and events of default) no more
restrictive, taken as a whole, to the Borrower and its Subsidiaries than those contained in this
Agreement, and (iii) has no scheduled amortization.

     7.04 Fundamental Changes. Enter into any merger, consolidation or amalgamation, or liquidate,
wind up or dissolve itself (or suffer any liquidation or dissolution), or Dispose of all or
substantially all of its Property or business, except that:

     (a) any Subsidiary of the Borrower may be merged or consolidated with or into the Borrower
(provided that the Borrower shall be the continuing or surviving corporation) or with or
into any Subsidiary Guarantor (provided that (i) the Subsidiary Guarantor shall be the
continuing or surviving corporation or (ii) simultaneously with such transaction, the continuing or
surviving corporation shall become a Subsidiary Guarantor and the Borrower shall comply with
Section 6.09 in connection therewith);

     (b) any Subsidiary may merge with any other Subsidiary (or any Person that becomes a
Subsidiary contemporaneously with such merger) so long as, in the case of any merger involving a
Subsidiary Guarantor, the surviving Person shall be (or shall contemporaneously become) a
Subsidiary Guarantor and such merger could not reasonably be expected to have a material adverse
effect on the business, assets, property or financial condition of the surviving Subsidiary; and

     (c) any Subsidiary of the Borrower may Dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to the Borrower or any Subsidiary (so long as, in the case of any such
Disposition by a Subsidiary Guarantor, the Subsidiary to whom such assets are disposed of is a
Subsidiary Guarantor) and may be dissolved following such Disposition.

     7.05 Disposition of Property. Dispose of (i) any Eligible Specified Rig, (ii) any Eligible
Accounts Receivable or (iii) any Eligible Rental Equipment, in each case whether now owned or
hereafter acquired, or issue or Dispose of any Equity Interest of any Person that directly or
indirectly owns any of the foregoing, except:

     (a) Dispositions permitted by Section 7.04(c);

     (b) the Disposition of obsolete or worn out property, or property that is no longer used or
useful in such Person’s business, in the ordinary course of business;

     (c) the Disposition of inventory or other assets in the ordinary course of business or
consistent with past practice;

     (d) Dispositions of cash or Cash Equivalents;

     (e) the sale or issuance of any Subsidiary’s Equity Interests to the Borrower or any
Subsidiary Guarantor;

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     (f) transfers of assets between or among the Borrower and the Subsidiary Guarantors;

     (g) any Dispositions constituted by the granting of Liens permitted by Section 7.01;

     (h) any lease of drill pipe by Quail Tools to a customer located outside of the United States
and any subsequent sale to such customer of any such drill pipe;

     (i) any sale by the Borrower or any Subsidiary to its customers of drill pipe, tools, and
associated drilling equipment utilized in connection with a drilling contract for the employment of
a drilling rig in the ordinary course of business and consistent with past practice; and

     (j) Dispositions of Property described on Schedule 7.05(j).

     7.06 Restricted Payments. Declare or pay any dividend on, or make any payment on account of,
or set apart assets for a sinking or other analogous fund for, the purchase, redemption,
defeasance, retirement or other acquisition of, any Equity Interests of the Borrower or any
Subsidiary, whether now or hereafter outstanding, or make any other distribution in respect
thereof, either directly or indirectly, whether in cash or property or in obligations of the
Borrower or any Subsidiary, or enter into any derivatives or other transaction with any financial
institution, commodities or stock exchange or clearinghouse (a “Derivatives Counterparty”)
obligating the Borrower or any Subsidiary to make payments to such Derivatives Counterparty as a
result of any change in market value of any such Equity Interests (collectively, “Restricted
Payments”), except that:

     (a) any Subsidiary (a “Paying Subsidiary”) may make Restricted Payments (i) to the
Borrower or any Subsidiary Guarantor, (ii) in the case of any Paying Subsidiary that is a
partnership or a limited liability company, ratably to the partners or members thereof, as the case
may be, so long as at least one such partner or member, as the case may be, is a Subsidiary
Guarantor and (iii) if such Paying Subsidiary is not a Subsidiary Guarantor, to any other
Subsidiary which is the parent of such Paying Subsidiary;

     (b) the Borrower may make Restricted Payments in the form of common stock of the Borrower;

     (c) the Borrower may make Restricted Payments in connection with (i) the conversion,
redemption, or repurchase of the Convertible Notes and (ii) the High Strikes Agreements;

     (d) so long as no Event of Default has occurred and is continuing or would be caused thereby,
the Borrower or any Subsidiary may repurchase, redeem, or otherwise acquire or retire any Equity
Interests of the Borrower or any Subsidiary held by any existing or former officer or employee of
the Borrower or any Subsidiary pursuant to any equity subscription agreement, stock option
agreement, or similar agreement, provided, that the aggregate amount of payments under this
paragraph subsequent to the date hereof (net of any proceeds received by the Borrower subsequent to
the date hereof in connection with resales of any common stock or common stock options so
purchased) shall not exceed $2,000,000 in any 12 month period; and

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     (e) the Borrower may acquire Equity Interests in connection with the exercise of stock options
or stock appreciation rights by way of cashless exercise or in connection with the satisfaction of
withholding tax obligations.

     7.07 Modifications of Debt Instruments, etc. (a) amend, modify or otherwise change, or
consent or agree to any amendment, modification, waiver or other change to, any of the terms of the
Convertible Notes, the Senior Notes or any Refinancing Debt to the extent that any such amendment,
modification, waiver or other change would shorten the maturity or increase the amount of any
payment of principal thereof, increase the rate or shorten the date for payment of interest thereon
or make any covenant or other restriction applicable to the Borrower or any of its Subsidiaries
materially more restrictive) or (b) amend its Organization Documents in any manner adverse to the
Administrative Agent or the Lenders.

     7.08 Transactions with Affiliates. Enter into any transaction, including, without limitation,
any purchase, sale, lease or exchange of Property, the rendering of any service or the payment of
any management, advisory or similar fees, with any Affiliate (other than (i) the Borrower or any
Subsidiary Guarantor or (ii) in the case of any Excluded Subsidiary, any other Excluded Subsidiary)
unless such transaction is (a) otherwise permitted under this Agreement, (b) in the ordinary course
of business of the Borrower or such Subsidiary, as the case may be, and (c) upon fair and
reasonable terms no less favorable to the Borrower or such Subsidiary, as the case may be, than it
would obtain in a comparable arm’s length transaction with a Person that is not an Affiliate,
except for transactions permitted by the following sentence. This Section 7.08 shall not
apply to the following transactions: (i) any employment agreement entered into by the Borrower or
any of its Subsidiaries in the ordinary course of business and consistent with past practices, (ii)
payment of reasonable directors’ fees to Persons who are not otherwise Affiliates of the Borrower,
(iii) sales of Equity Interests of the Borrower to Affiliates of the Borrower, (iv) any Restricted
Payment otherwise permitted under Section 7.06 or any Investment, (v) indemnification
agreements with, and payments made, to officers, directors, and employees of the Borrower or any
Subsidiary pursuant to charter, bylaw, statutory, or contractual provisions, and (vi) the
performance of obligations of the Borrower or any Subsidiary under the terms of any agreement to
which the Borrower or any Subsidiary is a party as of the date of this Agreement, and any
amendments, modifications, supplements, extensions, or renewals of such agreements;
provided that any such amendments, modifications, supplements, extensions, or renewals of
such agreements are not materially more disadvantageous, taken as a whole, to the Administrative
Agent and the Lenders than the terms of such agreements as in effect on the date of this Agreement.

     7.09 Changes in Fiscal Periods. Permit the fiscal year of the Borrower to end on a day other
than December 31 or change the Borrower’s method of determining fiscal quarters.

     7.10 Negative Pledge Clauses. Enter into or suffer to exist or become effective any agreement
that prohibits or limits the ability of the Borrower or any of its Subsidiaries to create, incur,
assume or suffer to exist any Lien upon any of its Property or revenues, whether now owned or
hereafter acquired, to secure the Obligations or, in the case of any guarantor, its obligations
under the Subsidiary Guaranty, other than (a) this Agreement and the other Loan Documents, (b) the
Indentures or any indenture or similar instrument governing any Refinancing Debt, (c) any
agreements governing any purchase money Liens or Capitalized Leases or other

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secured Indebtedness otherwise permitted hereby (in which case, any prohibition or limitation
shall only be effective against the assets financed thereby or securing such Indebtedness), (d)
customary non assignment provisions in any contract or lease entered into in the ordinary course of
business and consistent with past practices, (e) applicable law or any applicable rule, regulation,
or order of any Governmental Authority, (f) provisions with respect to the disposition or
distribution of assets or property in joint venture agreements, asset sale agreements, stock sale
agreements, and other similar agreements entered into in the ordinary course of business, and (g)
restrictions on cash or other deposits or net worth imposed by customers under contracts entered
into in the ordinary course of business.

     7.11 Restrictions on Subsidiary Distributions. Enter into or suffer to exist or become
effective any consensual encumbrance or restriction on the ability of any Subsidiary to (a) make
Restricted Payments in respect of any Equity Interests of such Subsidiary held by, or pay any
Indebtedness owed to, the Borrower or any other Subsidiary, (b) make Investments in the Borrower or
any other Subsidiary or (c) transfer any of its assets to the Borrower or any other Subsidiary,
except for such encumbrances or restrictions existing under or by reason of (i) any restrictions
existing under the Loan Documents, (ii) any restrictions with respect to a Subsidiary imposed
pursuant to an agreement that has been entered into in connection with the Disposition of all or
substantially all of the Equity Interests or assets of such Subsidiary, (iii) any restrictions
imposed pursuant to agreements governing any purchase money Liens or Capitalized Leases or other
secured Indebtedness otherwise permitted hereby (in which case, any prohibition or limitation shall
only be effective as to transfers of the assets financed thereby or securing such Indebtedness),
(iv) customary non assignment provisions in any contract or lease entered into in the ordinary
course of business and consistent with past practices, (v) applicable law or any applicable rule,
regulation, or order of any Governmental Authority, (vi) provisions with respect to the disposition
or distribution of assets or property in joint venture agreements, asset sale agreements, stock
sale agreements, and other similar agreements entered into in the ordinary course of business,
provided that such provisions apply only to the assets subject to such agreements, and
(vii) restrictions on cash or other deposits or net worth imposed by customers under contracts
entered into in the ordinary course of business.

     7.12 Lines of Business. Enter into any material business except for those businesses directly
relating to the oil services industry in which the Borrower and its Subsidiaries have previously
engaged or are engaged on the Closing Date or that are incidental or reasonably related thereto or
that are a reasonable extension thereof, as determined in good faith by the Borrower or applicable
Subsidiary.

     7.13 Hedge Agreements. Enter into any Swap Contract other than Swap Contracts entered into in
the ordinary course of business, and not for speculative purposes, to protect against changes in
interest rates or foreign exchange rates.

ARTICLE VIII.

EVENTS OF DEFAULT AND REMEDIES

     8.01 Events of Default. Any of the following shall constitute an Event of Default:

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     (a) Non-Payment. The Borrower or any other Loan Party fails to (i) pay when and as
required to be paid herein, and in the currency required hereunder, any amount of principal of any
Loan or any L/C Obligation or deposit any funds as Cash Collateral in respect of L/C Obligations,
or (ii) pay within three Business Days after the same becomes due, any interest on any Loan or on
any L/C Obligation, any fee due hereunder, or any other amount payable hereunder or under any other
Loan Document; or

     (b) Specific Covenants. (i) Any Loan Party shall default in the observance or
performance of any agreement contained in clause (i) or (ii) of Section
6.04(a) (with respect to the Borrower only), Section 6.03(a) or Article VII, or
in Article IV of the Security Agreement or (ii) any Loan Party shall default in the observance or
performance of any agreement contained in Section 6.01, Section 6.09(a)(i),
Section 6.09(c) or Section 6.10(a)(i) and such default shall continue unremedied
for a period of 10 days; or

     (c) Other Defaults. Any Loan Party fails to perform or observe any other covenant or
agreement (not specified in Sections 8.01(a) or (b) above or (d) below)
contained in any Loan Document on its part to be performed or observed and such failure continues
for 30 days or any “Event of Default” under any Loan Document (other than this Agreement) shall
occur and continue to exist beyond any applicable grace period set forth in such Loan Document; or

     (d) Representations and Warranties. Any representation, warranty, certification or
statement of fact made or deemed made by or on behalf of the Borrower or any other Loan Party
herein, in any other Loan Document, or in any document delivered in connection herewith or
therewith shall be incorrect or misleading in any material respect when made or deemed made; or

     (e) Cross-Default. (i) The Borrower or any Subsidiary (A) fails to make any payment
when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise)
in respect of any Indebtedness or Guarantee (other than Indebtedness hereunder and Indebtedness
under Swap Contracts) having an aggregate principal amount (including undrawn committed or
available amounts and including amounts owing to all creditors under any combined or syndicated
credit arrangement) of more than the Threshold Amount, or (B) fails to observe or perform any other
agreement or condition relating to any such Indebtedness or Guarantee or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the
effect of which default or other event is to cause, or to permit the holder or holders of such
Indebtedness or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalf
of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if
required, such Indebtedness to be demanded or to become due or to be repurchased, prepaid, defeased
or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such
Indebtedness to be made, prior to its stated maturity, or such Guarantee to become payable or cash
collateral in respect thereof to be demanded; or (ii) there occurs under any Swap Contract an Early
Termination Date (as defined in such Swap Contract) resulting from (A) any event of default under
such Swap Contract as to which the Borrower or any Subsidiary is the Defaulting Party (as defined
in such Swap Contract) or (B) any Termination Event (as so defined) under such Swap Contract as to
which the Borrower or any Subsidiary is an Affected Party (as so defined) and, in either event, the
Swap Termination

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Value owed by the Borrower or such Subsidiary as a result thereof is greater than the
Threshold Amount; or

     (f) Insolvency Proceedings, Etc. Any Loan Party or any of its Subsidiaries (other
than any Immaterial Subsidiary) institutes or consents to the institution of any proceeding under
any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or
consents to the appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer for it or for all or any material part of its property; or any
receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is
appointed without the application or consent of such Person and the appointment continues
undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law
relating to any such Person or to all or any material part of its property is instituted without
the consent of such Person and continues undismissed or unstayed for 60 calendar days, or an order
for relief is entered in any such proceeding; or

     (g) Inability to Pay Debts; Attachment. (i) The Borrower or any Subsidiary (other
than any Immaterial Subsidiary) becomes unable or admits in writing its inability or fails
generally to pay its debts as they become due, or (ii) any writ or warrant of attachment or
execution or similar process is issued or levied against all or any material part of the property
of any such Person and is not released, vacated or fully bonded within 60 days after its issue or
levy; or

     (h) Judgments. One or more judgments or decrees shall be entered against the Borrower
or any of its Subsidiaries involving, for the Borrower and its Subsidiaries taken as a whole, a
liability (not paid or fully covered by independent third party insurance as to which the relevant
insurance company has acknowledged coverage) in an aggregate amount in excess of the Threshold
Amount, and all such judgments or decrees shall not have been vacated, discharged, stayed or bonded
pending appeal by the earlier of (i) the date which 30 days from the entry thereof and (ii) the
date on which the relevant judgment creditor(s) has begun to enforce such judgment(s) or decree(s);
or

     (i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer
Plan which has resulted or could reasonably be expected to result in liability of the Borrower
under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount
that could reasonably be expected to have a Material Adverse Effect, or (ii) the Borrower or any
ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount that could reasonably be expected to have a Material
Adverse Effect; or

     (j) Invalidity of Loan Documents. Any Loan Document, at any time after its execution
and delivery and for any reason other than as expressly permitted hereunder or thereunder or
satisfaction in full of all the Obligations, ceases to be in full force and effect; or any Loan
Party or any other Person contests in any manner the validity or enforceability of any Loan
Document; or any Loan Party denies that it has any or further liability or obligation under any
Loan Document, or purports to revoke, terminate or rescind any Loan Document; or

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     (k) Change of Control. There occurs any Change of Control; or

     (l) Collateral Documents. Any Collateral Document after delivery thereof pursuant to
Section 4.01 or 6.09 shall for any reason (other than pursuant to the terms
thereof) cease to create a valid and perfected first priority Lien (subject to Liens permitted by
Section 7.01) on the Collateral purported to be covered thereby.

     8.02 Remedies Upon Event of Default. If any Event of Default occurs and is continuing, the
Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders,
take any or all of the following actions:

     (a) declare the commitment of each Lender to make Loans and any obligation of each L/C Issuer
to make L/C Credit Extensions to be terminated, whereupon such commitments and obligation shall be
terminated;

     (b) declare the unpaid principal amount of all outstanding Loans, all interest accrued and
unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document
to be immediately due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived by the Borrower;

     (c) require that the Borrower Cash Collateralize the L/C Obligations (in an amount equal to
the then Outstanding Amount thereof; provided, however, that the Administrative Agent or applicable
L/C Issuer may, at any time and from time to time after the initial deposit of Cash Collateral,
request that additional Cash Collateral be provided in order to protect against the results of
exchange rate fluctuations and the Borrower shall deposit such additional Cash Collateral); and

     (d) exercise on behalf of itself, the Lenders and the L/C Issuers all rights and remedies
available to it, the Lenders and the L/C Issuers under the Loan Documents;

provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the United States, the
obligation of each Lender to make Loans and any obligation of each L/C Issuer to make L/C Credit
Extensions shall automatically terminate, the unpaid principal amount of all outstanding Loans and
all interest and other amounts as aforesaid shall automatically become due and payable, and the
obligation of the Borrower to Cash Collateralize the L/C Obligations as aforesaid shall
automatically become effective, in each case without further act of the Administrative Agent or any
Lender.

     8.03 Application of Funds. After the exercise of remedies provided for in Section
8.02 (or after the Loans have automatically become immediately due and payable and the L/C
Obligations have automatically been required to be Cash Collateralized as set forth in the proviso
to Section 8.02), any amounts received on account of the Obligations shall be applied by
the Administrative Agent in the following order:

     First, to payment of that portion of the Obligations constituting fees, indemnities,
expenses and other amounts (including fees, charges and disbursements of counsel to the

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Administrative Agent and amounts payable under Article III but excluding any
principal, interest and Letter of Credit Fees) payable to the Administrative Agent in its capacity
as such;

     Second, to payment of that portion of the Obligations constituting fees, indemnities
and other amounts (other than principal, interest and Letter of Credit Fees) payable to the Lenders
and the L/C Issuers (including fees, charges and disbursements of counsel to the respective
Lenders and the L/C Issuers (including fees and time charges for attorneys who may be employees of
any Lender or any L/C Issuer) arising under the Loan Documents and amounts payable under
Article III), ratably among them in proportion to the respective amounts described in this
clause Second payable to them;

     Third, to payment of that portion of the Obligations constituting accrued and unpaid
Letter of Credit Fees and interest on the Loans, L/C Borrowings and other Obligations arising under
the Loan Documents, ratably among the Lenders and the L/C Issuers in proportion to the respective
amounts described in this clause Third payable to them;

     Fourth, to payment of that portion of the Obligations constituting unpaid principal of
the Loans, L/C Borrowings and Obligations then owing under Secured Hedge Agreements and Secured
Cash Management Agreements, ratably among the Lenders, the L/C Issuers, the Hedge Banks and the
Cash Management Banks in proportion to the respective amounts described in this clause
Fourth held by them;

     Fifth, to the Administrative Agent for the account of the L/C Issuers, to Cash
Collateralize that portion of L/C Obligations comprised of the aggregate undrawn amount of Letters
of Credit; and

     Last, the balance, if any, after all of the Obligations have been indefeasibly paid in
full, to the Borrower or as otherwise required by Law.

Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate undrawn amount
of Letters of Credit pursuant to clause Fifth above shall be applied to satisfy drawings
under such Letters of Credit as they occur. If any amount remains on deposit as Cash Collateral
after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be
applied to the other Obligations, if any, in the order set forth above.

Notwithstanding the foregoing, Obligations arising under Secured Cash Management Agreements and
Secured Hedge Agreements shall be excluded from the application described above if the
Administrative Agent has not received written notice thereof, together with such supporting
documentation as the Administrative Agent may request, from the applicable Cash Management Bank or
Hedge Bank, as the case may be. Each Cash Management Bank or Hedge Bank not a party to the Credit
Agreement that has given the notice contemplated by the preceding sentence shall, by such notice,
be deemed to have acknowledged and accepted the appointment of the Administrative Agent pursuant to
the terms of Article IX hereof for itself and its Affiliates as if a “Lender” party hereto.

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ARTICLE IX.

ADMINISTRATIVE AGENT

     9.01 Appointment and Authority.

     (a) Each of the Lenders and the L/C Issuers hereby irrevocably appoints Bank of America to act
on its behalf as the Administrative Agent hereunder and under the other Loan Documents and
authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers
as are delegated to the Administrative Agent by the terms hereof or thereof, together with such
actions and powers as are reasonably incidental thereto. The provisions of this Article, other
than the final sentence of Section 9.10, are solely for the benefit of the Administrative
Agent, the Lenders and the L/C Issuers, and the Borrower shall not have rights as a third party
beneficiary of any of such provisions.

     (b) The Administrative Agent shall also act as the “collateral agent” under the Loan
Documents, and each of the Lenders (including in its capacities as a potential Hedge Bank and a
potential Cash Management Bank) and each L/C Issuer hereby irrevocably appoints and authorizes the
Administrative Agent to act as the agent of such Lender and such L/C Issuer for purposes of
acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties
to secure any of the Obligations, together with such powers and discretion as are reasonably
incidental thereto. In furtherance thereon, each of the Lenders (including in its capacities as a
potential Hedge Bank and a potential Cash Management Bank) and each L/C Issuer hereby irrevocably
appoints and authorizes the Administrative Agent (or any sub-agent of the Administrative Agent
appointed pursuant to Section 9.05), as “collateral agent” to act as trustee on their
behalf solely for the purpose of acting as mortgagee under Mortgages and holding the first
preferred mortgage interest in each Specified Rig granted to the Administrative Agent, as
“collateral agent”, as trustee pursuant to the respective Mortgage. The Administrative Agent
hereby accepts such trust and declares that, as trustee, it will hold each Mortgage for the sole
use and benefit of the Lenders and each L/C Issuer and shall, on behalf of the trust created
hereby, perform its obligations hereunder, but only upon the terms and conditions of this
Agreement. In connection with all of the foregoing, the Administrative Agent, as “collateral
agent” and any co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent
pursuant to Section 9.05 for purposes of holding or enforcing any Lien on the Collateral
(or any portion thereof) granted under the Collateral Documents, or for exercising any rights and
remedies thereunder at the direction of the Administrative Agent), shall be entitled to the
benefits of all provisions of this Article IX and Article X (including
Section 10.04(c), as though such co-agents, sub-agents and attorneys-in-fact were the
“collateral agent” under the Loan Documents) as if set forth in full herein with respect thereto.

     9.02 Rights as a Lender. The Person serving as the Administrative Agent, Syndication Agent,
or Documentation Agent, as applicable, hereunder shall have the same rights and powers in its
capacity as a Lender as any other Lender and may exercise the same as though it were not the
Administrative Agent, Syndication Agent, or Documentation Agent, as applicable, and the term
“Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise
requires, include the Person serving as the Administrative Agent Syndication Agent, or
Documentation Agent, as applicable, hereunder in its individual capacity. Such Person and its
Affiliates may accept deposits from, lend money to, act as the financial

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advisor or in any other advisory capacity for and generally engage in any kind of business
with the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the
Administrative Agent, Syndication Agent, or Documentation Agent, as applicable, hereunder and
without any duty to account therefor to the Lenders.

     9.03 Exculpatory Provisions. The Administrative Agent shall not have any duties or
obligations except those expressly set forth herein and in the other Loan Documents. Without
limiting the generality of the foregoing, the Administrative Agent:

     (a) shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing;

     (b) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly contemplated hereby
or by the other Loan Documents that the Administrative Agent is required to exercise as
directed in writing by the Required Lenders (or such other number or percentage of the
Lenders as shall be expressly provided for herein or in the other Loan Documents),
provided that the Administrative Agent shall not be required to take any action
that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to
liability or that is contrary to any Loan Document or applicable law; and

     (c) shall not, except as expressly set forth herein and in the other Loan Documents,
have any duty to disclose, and shall not be liable for the failure to disclose, any
information relating to the Borrower or any of its Affiliates that is communicated to or
obtained by the Person serving as 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 (i) with
the consent or at the request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be
necessary, under the circumstances as provided in Sections 10.01 and 8.02) or (ii)
in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall
be deemed not to have knowledge of any Default unless and until notice describing such Default is
given to the Administrative Agent by the Borrower, a Lender or an L/C Issuer.

     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 this Agreement or
any other Loan Document, (ii) the contents of any certificate, report or other document delivered
hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance
of any of the covenants, agreements or other terms or conditions set forth herein or therein or the
occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this
Agreement, any other Loan Document or any other agreement, instrument or document, or the creation,
perfection or priority of any Lien purported to be created by the Collateral Documents, (v) the
value or the sufficiency of any Collateral, or (vi) the satisfaction of any condition set forth in
Article IV or elsewhere herein, other than to confirm receipt of items expressly required
to be delivered to the Administrative Agent.

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     9.04 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 (including any electronic message, Internet or intranet website posting or other
distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated
by the proper Person. The Administrative Agent also may rely upon any statement made to it orally
or by telephone and believed by it to have been made by the proper Person, and shall not incur any
liability for relying thereon. In determining compliance with any condition hereunder to the
making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the
satisfaction of a Lender or the applicable L/C Issuer, the Administrative Agent may presume that
such condition is satisfactory to such Lender or such L/C Issuer unless the Administrative Agent
shall have received notice to the contrary from such Lender or such L/C Issuer prior to the making
of such Loan or the issuance of such Letter of Credit. The Administrative Agent may consult with
legal counsel (who may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it in accordance with
the advice of any such counsel, accountants or experts.

     9.05 Delegation of Duties. The Administrative Agent may perform any and all of its duties and
exercise its rights and powers hereunder or under any other Loan Document by or through any one or
more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all of its duties and exercise its rights and powers by or through
their respective Related Parties. The exculpatory provisions of this Article shall apply to any
such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and
shall apply to their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.

     9.06 Resignation of Administrative Agent. The Administrative Agent may at any time give
notice of its resignation to the Lenders, the L/C Issuers and the Borrower. Upon receipt of any
such notice of resignation, the Required Lenders shall have the right, in consultation with the
Borrower, to appoint a successor, which shall be a bank with an office in the United States, or an
Affiliate of any such bank with an office in the United States. If no such successor shall have
been so appointed by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may on behalf of the Lenders and the L/C Issuers, appoint a successor
Administrative Agent meeting the qualifications set forth above; provided that if the
Administrative Agent shall notify the Borrower and the Lenders that no qualifying Person has
accepted such appointment, then such resignation shall nonetheless become effective in accordance
with such notice and (a) the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents (except that in the case of any collateral
security held by the Administrative Agent on behalf of the Lenders or the L/C Issuers under any of
the Loan Documents, the retiring Administrative Agent shall continue to hold such collateral
security until such time as a successor Administrative Agent is appointed) and (b) all payments,
communications and determinations provided to be made by, to or through the Administrative Agent
shall instead be made by or to each Lender and each L/C Issuer directly, until such time as the
Required Lenders appoint a

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successor Administrative Agent as provided for above in this Section. Upon the acceptance of
a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and
become vested with all of the rights, powers, privileges and duties of the retiring (or retired)
Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its
duties and obligations hereunder or under the other Loan Documents (if not already discharged
therefrom as provided above in this Section). The fees payable by the Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After the retiring Administrative Agent’s resignation
hereunder and under the other Loan Documents, the provisions of this Article and
Section 10.04 shall continue in effect for the benefit of such retiring Administrative
Agent, its sub-agents and their respective Related Parties in respect of any actions taken or
omitted to be taken by any of them while the retiring Administrative Agent was acting as
Administrative Agent.

     9.07 Non-Reliance on Administrative Agent and Other Lenders. Each Lender and each L/C Issuer
acknowledges that it has, independently and without reliance upon the Administrative Agent, any
other Agent or any other Lender or any of their Related Parties and based on such documents and
information as it has deemed appropriate, made its own credit analysis and decision to enter into
this Agreement. Each Lender and each L/C Issuer also acknowledges that it will, independently and
without reliance upon the Administrative Agent, any other Agent or any other Lender or any of their
Related Parties and based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action under or based upon
this Agreement, any other Loan Document or any related agreement or any document furnished
hereunder or thereunder.

     9.08 No Other Duties, Etc. Anything herein to the contrary notwithstanding, none of the
“Bookrunners” or “Arrangers” or the Agents listed on the cover page hereof shall have any powers,
duties or responsibilities under this Agreement or any of the other Loan Documents, except in its
capacity, as applicable, as the Administrative Agent, a Lender or an L/C Issuer hereunder.

     9.09 Administrative Agent May File Proofs of Claim. In case of the pendency of any proceeding
under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the
Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall
then be due and payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and
empowered, by intervention in such proceeding or otherwise

     (a) to file and prove a claim for the whole amount of the principal and interest owing
and unpaid in respect of the Loans, L/C Obligations and all other Obligations that are owing
and unpaid and to file such other documents as may be necessary or advisable in order to
have the claims of the Lenders, the L/C Issuers and the Administrative Agent (including any
claim for the reasonable compensation, expenses, disbursements and advances of the Lenders,
the L/C Issuers and the Administrative Agent and their respective agents and counsel and all
other amounts due the Lenders, the L/C Issuers and the Administrative Agent under
Sections 2.03(i) and (j), 2.09 and 10.04) allowed in such
judicial proceeding; and

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     (b) to collect and receive any monies or other property payable or deliverable on any
such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Lender and each L/C Issuer to make
such payments to the Administrative Agent and, in the event that the Administrative Agent shall
consent to the making of such payments directly to the Lenders and the L/C Issuers, to pay to the
Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and
advances of the Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.09 and 10.04.

     Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or
consent to or accept or adopt on behalf of any Lender or any L/C Issuer any plan of reorganization,
arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or any
L/C Issuer to authorize the Administrative Agent to vote in respect of the claim of any Lender or
any L/C Issuer or in any such proceeding. The Administrative Agent is not authorized hereunder to
credit bid any Obligation held by any Lender or any L/C Issuer in any proceeding under any Debtor
Relief Law without the prior consent of such Lender or such L/C Issuer.

     9.10 Collateral and Guaranty Matters. Each of the Lenders (including in its capacities as a
potential Cash Management Bank and a potential Hedge Bank) and each L/C Issuer irrevocably
authorize the Administrative Agent, at its option and in its discretion,

     (a) to release any Lien on any property granted to or held by the Administrative Agent
under any Loan Document (i) upon termination of the Aggregate Commitments and payment in
full of all Obligations (other than (A) contingent indemnification obligations and (B)
obligations and liabilities under Secured Cash Management Agreements and Secured Hedge
Agreements) and the expiration or termination of all Letters of Credit (other than Letters
of Credit as to which other arrangements satisfactory to the Administrative Agent and the
L/C Issuers shall have been made), (ii) that is sold or to be sold as part of or in
connection with any sale permitted hereunder or under any other Loan Document, or (iii) if
approved, authorized or ratified in writing in accordance with Section 10.01;

     (b) to subordinate any Lien on any property granted to or held by the Administrative
Agent under any Loan Document to the holder of any Lien on such property that is permitted
by Section 7.01(g); and

     (c) to release any Subsidiary Guarantor from its obligations under the Subsidiary
Guaranty if such Person ceases to be a Subsidiary as a result of a transaction permitted
hereunder.

     Upon request by the Administrative Agent at any time, the Required Lenders will confirm in
writing the Administrative Agent’s authority to release or subordinate its interest in particular
types or items of property, or to release any Subsidiary Guarantor from its obligations under the
Subsidiary Guaranty pursuant to this Section 9.10. In each case as specified in this

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Section 9.10, the Administrative Agent will, at the Borrower’s expense, execute and
deliver to the applicable Loan Party such documents as such Loan Party may reasonably request to
evidence the release of such item of Collateral from the assignment and security interest granted
under the Collateral Documents or to subordinate its interest in such item, or to release such
Subsidiary Guarantor from its obligations under the Subsidiary Guaranty, in each case in accordance
with the terms of the Loan Documents and this Section 9.10.

     9.11 Secured Cash Management Agreements and Secured Hedge Agreements. No Cash Management Bank
or Hedge Bank that obtains the benefits of Section 8.03, the Subsidiary Guaranty or any
Collateral by virtue of the provisions hereof or of the Subsidiary Guaranty or any Collateral
Document shall have any right to notice of any action or to consent to, direct or object to any
action hereunder or under any other Loan Document or otherwise in respect of the Collateral
(including the release or impairment of any Collateral) other than in its capacity as a Lender and,
in such case, only to the extent expressly provided in the Loan Documents. Notwithstanding any
other provision of this Article IX to the contrary, the Administrative Agent shall not be
required to verify the payment of, or that other satisfactory arrangements have been made with
respect to, Obligations arising under Secured Cash Management Agreements and Secured Hedge
Agreements unless the Administrative Agent has received written notice of such Obligations,
together with such supporting documentation as the Administrative Agent may request, from the
applicable Cash Management Bank or Hedge Bank, as the case may be.

     9.12 United States Citizen. Notwithstanding any right, power or remedy granted to the
Administrative Agent herein or pursuant to any other Loan Document, or at law, in equity, admiralty
or otherwise, the Administrative Agent will not take any action that causes a violation of Section
2 or Section 9 of the Shipping Act of 1916, as amended (the “Shipping Act”). The
Administrative Agent represents and warrants to the Borrower and to each Secured Party that it is a
“United States Citizen” within the meaning of Section 2 of the Shipping Act until the Obligations
have been paid in full. The Administrative Agent agrees that it will promptly prepare and deliver
any affidavits or other similar documents evidencing its compliance with the Shipping Act as may be
required in connection with the documentation, operation, chartering or mortgaging of the Specified
Rigs. If at any time prior to the termination of the Security Agreement or the Mortgages with
respect to the Specified Rigs, the Administrative Agent ceases to comply with Section 2 of the
Shipping Act, the Administrative Agent shall notify the Borrower and the Lenders of such fact and
take all necessary actions to resign as the “collateral agent” under the Collateral Documents in
accordance with the provisions of this Agreement and the other Loan Documents.

ARTICLE X.

MISCELLANEOUS

     10.01 Amendments, Etc. No amendment or waiver of any provision of this Agreement or any other
Loan Document, and no consent to any departure by the Borrower or any other Loan Party therefrom,
shall be effective unless in writing signed by the Required Lenders and the Borrower or the
applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent, and each
such waiver or consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such amendment, waiver or
consent shall:

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     (a) waive any condition set forth in Section 4.01 (other than Section
4.01(b)), or, in the case of the initial Credit Extension, Section 4.02, without the
written consent of each Lender;

     (b) without limiting the generality of clause (a) above, waive any condition set forth in
Section 4.02 as to any Credit Extension under a particular Facility without the written
consent of the Required Revolving Lenders or the Required Term Loan Lenders, as the case may be;

     (c) extend or increase the Commitment of any Lender (or reinstate any Commitment terminated
pursuant to Section 8.02) without the written consent of such Lender;

     (d) postpone any date fixed by this Agreement or any other Loan Document for (i) any payment
(excluding mandatory prepayments) of principal, interest, fees or other amounts due to the Lenders
(or any of them) hereunder or under such other Loan Document without the written consent of each
Lender entitled to such payment or (ii) any scheduled reduction of any Facility hereunder or under
any other Loan Document without the written consent of each Appropriate Lender;

     (e) reduce or forgive the principal of, or the rate of interest specified herein on, any Loan
or L/C Borrowing, or (subject to clause (iii) of the second proviso to this Section 10.01)
any fees or other amounts payable hereunder or under any other Loan Document without the written
consent of each Lender directly affected thereby; provided, however, that only the
consent of the Required Lenders shall be necessary (i) to amend the definition of “Default Rate” or
to waive any obligation of the Borrower to pay interest or Letter of Credit Fees at the Default
Rate or (ii) to change the manner of computation of any financial ratio (including any change in
any applicable defined term) used in determining the Applicable Rate even if the effect of such
amendment would be to reduce the interest rate on any Loan or L/C Borrowing or to reduce any fee
payable hereunder;

     (f) change (i) the definition of “Applicable Percentage”, Section 2.12(a), Section
2.12(f), Section 2.13 or Section 8.03 in a manner that would alter the pro rata
sharing of payments required thereby without the written consent of each Lender affected thereby or
(ii) the order of application of any reduction in the Commitments or any prepayment of Loans among
the Facilities from the application thereof set forth in the applicable provisions of
Section 2.05(b) or 2.06(b), respectively, in any manner that materially and
adversely affects the Lenders under a Facility without the written consent of (i) if such Facility
is the Term Loan Facility, the Required Term Loan Lenders, and (ii) if such Facility is the
Revolving Credit Facility, the Required Revolving Lenders;

     (g) amend Section 1.06 or the definition of “Alternative Currency” without the written
consent of each L/C Issuer;

     (h) change (i) any provision of this Section 10.01 or the definition of “Required
Lenders” or any other provision hereof specifying the number or percentage of Lenders required to
amend, waive or otherwise modify any rights hereunder (other than the definitions specified in
clause (ii) of this Section 10.01(h)), without the written consent of each Lender or (ii)
the definition of “Required Revolving Lenders” or “Required Term Loan Lenders” without the written
consent of each Lender under the applicable Facility;

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     (i) release all or substantially all of the Collateral in any transaction or series of related
transactions, without the written consent of each Lender;

     (j) release all or substantially all of the value of the Subsidiary Guaranty without the
written consent of each Lender, except to the extent the release of any Subsidiary Guarantor from
the Subsidiary Guaranty is permitted pursuant to Section 9.10 (in which case such release
may be made by the Administrative Agent acting alone);

     (k) impose any greater restriction on the ability of any Lender under a Facility to assign any
of its rights or obligations hereunder without the written consent of (i) if such Facility is the
Term Loan Facility, the Required Term Loan Lenders and (ii) if such Facility is the Revolving
Credit Facility, the Required Revolving Lenders;

     (l) increase the Advance Rates under the Borrowing Base without the written consent of each
Lender;

     (m) amend, modify or waive any provision of (i) the definition of “Borrowing Base” or (ii) any
of the capitalized terms used in such definition, in each case, without the consent of Lenders
holding at least 75% of the sum of the (a) Total Outstandings (with the aggregate amount of each
Revolving Credit Lender’s risk participation and funded participation in L/C Obligations being
deemed “held by such Revolving Credit Lender for such purpose) and (b) aggregate unused Revolving
Credit Commitments but excluding the unused Revolving Credit Commitment of, and the portion of the
Total Outstandings held or deemed held by, any Defaulting Lender; or

     (n) amend the last sentence of Section 9.09 without the written consent of each
Lender;

and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by each L/C Issuer in addition to the Lenders required above, affect the rights
or duties of the L/C Issuers under this Agreement or any Issuer Document relating to any Letter of
Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing
and signed by the Administrative Agent in addition to the Lenders required above, affect the rights
or duties of the Administrative Agent under this Agreement or any other Loan Document and (iii) the
Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by
the parties thereto. Notwithstanding anything to the contrary herein, no Defaulting Lender shall
have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the
Commitment of such Lender may not be increased or extended without the consent of such Lender.

     If any Lender does not consent to a proposed amendment, waiver, consent or release with
respect to any Loan Document that requires the consent of each Lender and that has been approved by
the Required Lenders, the Borrower may replace such non-consenting Lender in accordance with
Section 10.13; provided that such amendment, waiver, consent or release can be effected as
a result of the assignment contemplated by such Section (together with all other such assignments
required by the Borrower to be made pursuant to this paragraph).

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     10.02 Notices; Effectiveness; Electronic Communication.

     (a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in subsection (b) below), all
notices and other communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as
follows, and all notices and other communications expressly permitted hereunder to be given by
telephone shall be made to the applicable telephone number, as follows:

     (i) if to the Borrower, the Administrative Agent, or Bank of America as an L/C Issuer,
to the address, telecopier number, electronic mail address or telephone number specified for
such Person on Schedule 10.02; and

     (ii) if to any other Lender or L/C Issuer, to the address, telecopier number,
electronic mail address or telephone number specified in its Administrative Questionnaire.

Notices and other communications sent by hand or overnight courier service, or mailed by certified
or registered mail, shall be deemed to have been given when received; notices and other
communications sent by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have been given at the
opening of business on the next business day for the recipient). Notices and other communications
delivered through electronic communications to the extent provided in subsection (b) below, shall
be effective as provided in such subsection (b).

     (b) Electronic Communications. Notices and other communications to the Lenders and
the L/C Issuers hereunder may be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative
Agent, provided that the foregoing shall not apply to notices to any Lender or any L/C
Issuer pursuant to Article II if such Lender or such L/C Issuer, as applicable, has
notified the Administrative Agent that it is incapable of receiving notices under such Article by
electronic communication. The Administrative Agent or the Borrower may, in its discretion, agree
to accept notices and other communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may be limited to
particular notices or communications.

     Unless the Administrative Agent otherwise prescribes, (i) notices and other communications
sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement
from the intended recipient (such as by the “return receipt requested” function, as available,
return e-mail or other written acknowledgement), provided that if such notice or other
communication is not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on the next business day
for the recipient, and (ii) notices or communications posted to an Internet or intranet website
shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as
described in the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

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     (c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT
PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR
THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE
BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR
FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE
BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its
Related Parties (collectively, the “Agent Parties”) have any liability to the Borrower, any
Lender, any L/C Issuer or any other Person for losses, claims, damages, liabilities or expenses of
any kind (whether in tort, contract or otherwise) arising out of the Borrower’s or the
Administrative Agent’s transmission of Borrower Materials through the Internet, except to the
extent that such losses, claims, damages, liabilities or expenses are determined by a court of
competent jurisdiction by a final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Agent Party; provided, however, that in no
event shall any Agent Party have any liability to the Borrower, any Lender, any L/C Issuer or any
other Person for indirect, special, incidental, consequential or punitive damages (as opposed to
direct or actual damages).

     (d) Change of Address, Etc. Each of the Borrower, the Administrative Agent and Bank
of America as an L/C Issuer may change its address, telecopier or telephone number for notices and
other communications hereunder by notice to the other parties hereto. Each other Lender or L/C
Issuer may change its address, telecopier or telephone number for notices and other communications
hereunder by notice to the Borrower, the Administrative Agent and the other L/C Issuers. In
addition, each Lender and each L/C Issuer (other than Bank of America) agrees to notify the
Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an
effective address, contact name, telephone number, telecopier number and electronic mail address to
which notices and other communications may be sent and (ii) accurate wire instructions for such
Lender. Furthermore, each Public Lender agrees to cause at least one individual at or on behalf of
such Public Lender to at all times have selected the “Private Side Information” or similar
designation on the content declaration screen of the Platform in order to enable such Public Lender
or its delegate, in accordance with such Public Lender’s compliance procedures and applicable Law,
including United States Federal and state securities Laws, to make reference to Borrower Materials
that are not made available through the “Public Side Information” portion of the Platform and that
may contain material non-public information with respect to the Borrower or its securities for
purposes of United States Federal or state securities laws.

     (e) Reliance by Administrative Agent, L/C Issuers and Lenders. The Administrative
Agent, the L/C Issuers and the Lenders shall be entitled to rely and act upon any notices
(including telephonic Committed Loan Notices) purportedly given by or on behalf of the Borrower
even if (i) such notices were not made in a manner specified herein, were incomplete or were not
preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as
understood by the recipient, varied from any confirmation thereof. The Borrower shall indemnify
the Administrative Agent, each L/C Issuer, each Lender and the Related Parties

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of each of them from all losses, costs, expenses and liabilities resulting from the reliance
by such Person on each notice purportedly given by or on behalf of the Borrower. All telephonic
notices to and other telephonic communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such recording.

     10.03 No Waiver; Cumulative Remedies; Enforcement. No failure by any Lender, any L/C Issuer
or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right,
remedy, power or privilege hereunder or under any other Loan Document shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges herein provided, and
provided under each other Loan Document, are cumulative and not exclusive of any rights, remedies,
powers and privileges provided by law.

     Notwithstanding anything to the contrary contained herein or in any other Loan Document, the
authority to enforce rights and remedies hereunder and under the other Loan Documents against the
Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at law
in connection with such enforcement shall be instituted and maintained exclusively by, the
Administrative Agent in accordance with Section 8.02 for the benefit of all the Lenders and
the L/C Issuers; provided, however, that the foregoing shall not prohibit (a) the
Administrative Agent from exercising on its own behalf the rights and remedies that inure to its
benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan
Documents, (b) each L/C Issuer from exercising the rights and remedies that inure to its benefit
(solely in its capacity as an L/C Issuer) hereunder and under the other Loan Documents, (c) any
Lender from exercising setoff rights in accordance with Section 10.08 (subject to the terms
of Section 2.13), or (d) any Lender from filing proofs of claim or appearing and filing
pleadings on its own behalf during the pendency of a proceeding relative to any Loan Party under
any Debtor Relief Law; and provided, further, that if at any time there is no
Person acting as Administrative Agent hereunder and under the other Loan Documents, then (i) the
Required Lenders shall have the rights otherwise ascribed to the Administrative Agent pursuant to
Section 8.02 and (ii) in addition to the matters set forth in clauses (b), (c) and (d) of
the preceding proviso and subject to Section 2.13, any Lender may, with the consent of the
Required Lenders, enforce any rights and remedies available to it and as authorized by the Required
Lenders.

     10.04 Expenses; Indemnity; Damage Waiver.

     (a) Costs and Expenses. The Borrower shall pay (i) all reasonable out-of-pocket
expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees,
charges and disbursements of counsel for the Administrative Agent), in connection with the
syndication of the credit facilities provided for herein, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Loan Documents or any amendments,
modifications or waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses
incurred by each L/C Issuer in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder and (iii) all out-of-pocket expenses incurred
by the Administrative Agent, any Lender or any L/C Issuer (including the fees, charges and
disbursements of any counsel for the Administrative Agent, any

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Lender or any L/C Issuer), and shall pay all fees and time charges for attorneys who may be
employees of the Administrative Agent, any Lender or any L/C Issuer, in connection with the
enforcement or protection of its rights (A) in connection with this Agreement and the other Loan
Documents, including its rights under this Section, or (B) in connection with Loans made or Letters
of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans or Letters of Credit.

     (b) Indemnification by the Borrower. The Borrower shall indemnify the Administrative
Agent (and any sub-agent thereof), each other Agent, each Lender and each L/C Issuer, 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 reasonable 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, or, in the
case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the
administration of this Agreement and the other Loan Documents (including in respect of any matters
addressed in Section 3.01), (ii) any Loan or Letter of Credit or the use or proposed use of
the proceeds therefrom (including any refusal by any L/C Issuer to honor a demand for payment under
a Letter of Credit if the documents presented in connection with such demand do not strictly comply
with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by the Borrower or any of its
Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of its
Subsidiaries, or (iv) 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 or any of the Borrower’s or
such Loan Party’s directors, shareholders or creditors, and regardless of whether any Indemnitee is
a party thereto, IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE
COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE OF THE INDEMNITEE; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by
final and nonappealable judgment to have resulted from the gross negligence or willful misconduct
of such Indemnitee 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 other Loan Party has obtained a final and
nonappealable judgment in its favor on such claim as determined by a court of competent
jurisdiction.

     (c) Reimbursement by Lenders. To the extent that the Borrower for any reason fails to
indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by it
to the Administrative Agent (or any sub-agent thereof), each other Agent, any L/C Issuer or any
Related Party of any of the foregoing (and without limiting the Borrower’s obligation to do

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so), each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent),
such other Agent, such L/C Issuer or such Related Party, as the case may be, such Lender’s
Applicable Percentage (determined as of the time that the applicable unreimbursed expense or
indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense
or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred
by or asserted against the Administrative Agent (or any such sub-agent), any other Agent or any L/C
Issuer in its capacity as such, or against any Related Party of any of the foregoing acting for the
Administrative Agent (or any such sub-agent), any other Agent or any L/C Issuer in connection with
such capacity; and provided further that the obligation to indemnify the L/C Issuers hereunder
shall be limited solely to the Revolving Credit Lenders. The obligations of the Lenders under this
subsection (c) are subject to the provisions of Section 2.12(d).

     (d) Waiver of Consequential Damages, Etc. To the fullest 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
direct or actual damages) arising out of, in connection with, or as a result of, this Agreement,
any other Loan Document or any agreement or instrument contemplated hereby, the transactions
contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof.
No Indemnitee referred to in subsection (b) above shall be liable for any damages arising from the
use by unintended recipients of any information or other materials distributed to such unintended
recipients by such Indemnitee through telecommunications, electronic or other information
transmission systems in connection with this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby other than for direct or actual damages resulting from
the gross negligence or willful misconduct of such Indemnitee as determined by a final and
nonappealable judgment of a court of competent jurisdiction.

     (e) Payments. All amounts due under this Section shall be payable not later than
thirty days after written demand therefor.

     (f) Survival. The agreements in this Section shall survive the resignation of the
Administrative Agent and each L/C Issuer, the replacement of any Lender, the termination of the
Aggregate Commitments and the repayment, satisfaction or discharge of all the other Obligations.

     10.05 Payments Set Aside. To the extent that any payment by or on behalf of the Borrower is
made to the Administrative Agent, any L/C Issuer or any Lender, or the Administrative Agent, any
L/C Issuer or any Lender exercises its right of setoff, and such payment or the proceeds of such
setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential,
set aside or required (including pursuant to any settlement entered into by the Administrative
Agent, such L/C Issuer or such Lender in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a)
to the extent of such recovery, the obligation or part thereof originally intended to be satisfied
shall be revived and continued in full force and effect as if such payment had not been made or
such setoff had not occurred, and (b) each Lender and each L/C Issuer severally agrees to pay to
the Administrative Agent upon demand its applicable share (without duplication) of any amount so
recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such
demand to the date such payment is made at a

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rate per annum equal to the Federal Funds Rate from time to time in effect, in the applicable
currency of such recovery or payment. The obligations of the Lenders and the L/C Issuers under
clause (b) of the preceding sentence shall survive the payment in full of the Obligations and the
termination of this Agreement.

     10.06 Successors and Assigns.

     (a) Successors and Assigns Generally. 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 subsection (b) of this
Section, (ii) by way of participation in accordance with the provisions of subsection (d) of this
Section or (iii) by way of pledge or assignment of a security interest subject to the restrictions
of subsection (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 subsection (d) of this Section
and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative
Agent, the L/C Issuers and the Lenders) any legal or equitable right, remedy or claim under or by
reason of this Agreement.

     (b) Assignments by Lenders. 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 Commitments and the Loans (including for purposes of this subsection (b),
participations in L/C Obligations) 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 under any Facility and the Loans at the time owing to
it under such Facility or in the case of an assignment to a Lender, an Affiliate of
a Lender or an Approved Fund, no minimum amount need be assigned; and

     (B) in any case not described in subsection (b)(i)(A) of this Section, the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the Commitment is not then in effect, the principal
outstanding balance of the Loans of the assigning Lender subject to each such
assignment, determined as of the date the Assignment and Assumption with respect to
such assignment is delivered to the Administrative Agent or, if “Trade Date” is
specified in the Assignment and Assumption, as of the Trade Date, shall not be less
than $2,500,000, in the case of any assignment in respect of the Revolving Credit
Facility, or $1,000,000, in the case of any assignment in respect of the Term Loan
Facility, unless each of the Administrative Agent and, so long

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as no Event of Default has occurred and is continuing, the Borrower otherwise
consents (each such consent not to be unreasonably withheld or delayed);
provided, however, that concurrent assignments to members of an
Assignee Group and concurrent assignments from members of an Assignee Group to a
single Eligible Assignee (or to an Eligible Assignee and members of its Assignee
Group) will be treated as a single assignment for purposes of determining whether
such minimum amount has been met.

     (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 Loans or the Commitment assigned, except that this
clause (ii) shall not prohibit any Lender from assigning all or a portion of its rights and
obligations among separate Facilities on a non-pro rata basis;

     (iii) Required Consents. No consent shall be required for any assignment
except to the extent required by subsection (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 (1) an Event of Default has occurred and is
continuing at the time of such assignment or (2) such assignment is to a Lender, an
Affiliate of a Lender or an Approved Fund;

     (B) the consent of the Administrative Agent (such consent not to be
unreasonably withheld or delayed) shall be required for assignments in respect of
(1) any Term Loan Commitment or Revolving Credit Commitment if such assignment is to
a Person that is not a Lender with a Commitment in respect of the applicable
Facility, an Affiliate of such Lender or an Approved Fund with respect to such
Lender or (2) any Term Loan to a Person that is not a Lender, an Affiliate of a
Lender or an Approved Fund; and

     (C) the consent of each L/C Issuer (such consent not to be unreasonably
withheld or delayed) shall be required for any assignment that increases the
obligation of the assignee to participate in exposure under one or more Letters of
Credit (whether or not then outstanding).

     (iv) Assignment and Assumption. The parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee in the amount of $3,500; provided, however,
that the Administrative Agent may, in its sole discretion, elect to waive such processing
and recordation fee in the case of any assignment. The assignee, if it is not a Lender,
shall deliver to the Administrative Agent an Administrative Questionnaire.

     (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.

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\

Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c)
of this Section, from and after the effective date specified in each Assignment and Assumption, the
assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned
by such Assignment and Assumption, 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 Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption 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 3.01, 3.04, 3.05, and 10.04
with respect to facts and circumstances occurring prior to the effective date of such assignment.
Upon request, the Borrower (at its expense) shall execute and deliver a Note to the assignee
Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that
does not comply with this subsection shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance with subsection (d) of
this Section.

     (c) Register. The Administrative Agent, acting solely for this purpose as an agent of
the Borrower, shall maintain at the Administrative Agent’s Office a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and addresses of the
Lenders, and the Commitments of, and principal amounts of the Loans and L/C Obligations 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) Participations. 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 or 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 or a portion of its Commitment and/or the Loans (including such Lender’s
participations in L/C Obligations) owing to it); provided that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations and (iii) the
Borrower, the Administrative Agent, the Lenders and the L/C Issuers shall continue to deal solely
and directly with such Lender in connection with such Lender’s rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall
provide that such Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, waiver or other modification described in the first proviso to
Section 10.01 that affects such Participant. Subject to subsection (e) of this Section,
the Borrower agrees that each Participant shall be entitled to the benefits of Sections
3.01, 3.04 and 3.05 to the same extent as if it were a Lender and had acquired
its interest by assignment pursuant to subsection (b) of this Section. To the extent permitted by
law, each Participant also

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shall be entitled to the benefits of Section 10.08 as though it were a Lender,
provided such Participant agrees to be subject to Section 2.13 as though it were a
Lender.

     (e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Section 3.01 or 3.04 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 3.01 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 3.01(e) as though it were a Lender.

     (f) Certain Pledges. Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement (including under its Note, if any) to
secure obligations of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender
from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as
a party hereto.

     (g) Resignation as L/C Issuer after Assignment. Notwithstanding anything to the
contrary contained herein, if at any time Bank of America acting as an L/C Issuer or other Lender
that has issued a then-outstanding Letter of Credit assigns all of its Revolving Credit Commitment
and Revolving Credit Loans pursuant to subsection (b) above, Bank of America or such other Lender,
as applicable, may, (i) upon 30 days’ notice to the Borrower and the Lenders, resign as an L/C
Issuer. In the event of any such resignation as L/C Issuer, the Borrower shall be entitled to
appoint from among the Lenders a successor L/C Issuer hereunder; provided, however,
that no failure by the Borrower to appoint any such successor shall affect the resignation of Bank
of America or such other assigning Lender as L/C Issuer, as the case may be. If Bank of America or
such other assigning Lender resigns as an L/C Issuer, it shall retain all the rights, powers,
privileges and duties of an L/C Issuer hereunder with respect to all Letters of Credit outstanding
as of the effective date of its resignation as an L/C Issuer and all L/C Obligations with respect
thereto (including the right to require the Lenders to make Base Rate Loans or fund risk
participations in Unreimbursed Amounts pursuant to Section 2.03(c)). Upon the appointment
of a successor L/C Issuer, (a) such successor shall succeed to and become vested with all of the
rights, powers, privileges and duties of the retiring L/C Issuer, and (b) the successor L/C Issuer
shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the
time of such succession or make other arrangements satisfactory to Bank of America or such other
retiring L/C Issuer, as the case may be, to effectively assume the obligations of Bank of America
or such other retiring L/C Issuer, as the case may be, with respect to such Letters of Credit.

     10.07 Treatment of Certain Information; Confidentiality. Each of the Administrative Agent,
the other Agents, the Lenders and the L/C Issuers agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to its Affiliates and
to its and its Affiliates’ respective partners, directors, officers, employees, agents, trustees,
advisors and representatives (it being understood that the Persons to whom such disclosure is made
will be informed of the confidential nature of such Information and instructed

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to keep such Information confidential), (b) to the extent requested by any regulatory
authority purporting to have jurisdiction over it (including any self-regulatory authority, such as
the National Association of Insurance Commissioners), (c) to the extent required by applicable laws
or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in
connection with the exercise of any remedies hereunder or under any other Loan Document or any
action or proceeding relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section, to (i) any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this Agreement or any
Eligible Assignee invited to be a Lender pursuant to Section 2.14(c) or Section
2.15(c) or (ii) any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to the Borrower and its obligations, (g) with the consent of the
Borrower or (h) to the extent such Information (i) becomes publicly available other than as a
result of a breach of this Section or (ii) becomes available to the Administrative Agent, any other
Agent, any Lender, any L/C Issuer or any of their respective Affiliates on a nonconfidential basis
from a source other than the Borrower.

     For purposes of this Section, “Information” means all information received from any
Loan Party or any Subsidiary thereof relating to any Loan Party or any Subsidiary thereof or any of
their respective businesses, other than any such information that is available to the
Administrative Agent, any other Agent, any Lender or any L/C Issuer on a nonconfidential basis
prior to disclosure by any Loan Party or any Subsidiary thereof, provided that, in the case
of information received from a Loan Party or any such Subsidiary after the date hereof, such
information is clearly identified at the time of delivery as confidential. Any Person required to
maintain the confidentiality of Information as provided in this Section shall be considered to have
complied with its obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to its own
confidential information.

     Each of the Administrative Agent, the other Agents, the Lenders and the L/C Issuers
acknowledges that (a) the Information may include material non-public information concerning the
Borrower or a Subsidiary, as the case may be, (b) it has developed compliance procedures regarding
the use of material non-public information and (c) it will handle such material non-public
information in accordance with applicable Law, including United States Federal and state securities
Laws.

     10.08 Right of Setoff. If an Event of Default shall have occurred and be continuing, each
Lender, each L/C Issuer and each of their respective Affiliates is hereby authorized at any time
and from time to time, to the fullest extent permitted by applicable law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final, in whatever currency)
at any time held and other obligations (in whatever currency) at any time owing by such Lender,
such L/C Issuer or any such Affiliate to or for the credit or the account of the Borrower against
any and all of the obligations of the Borrower now or hereafter existing under this Agreement or
any other Loan Document to such Lender or such L/C Issuer, irrespective of whether or not such
Lender or such L/C Issuer shall have made any demand under this Agreement or any other Loan
Document and although such obligations of the Borrower may be contingent or unmatured or are owed
to a branch or office of such Lender or such L/C Issuer

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different from the branch or office holding such deposit or obligated on such indebtedness.
The rights of each Lender, such L/C Issuer and their respective Affiliates under this Section are
in addition to other rights and remedies (including other rights of setoff) that such Lender, such
L/C Issuer or their respective Affiliates may have. Each Lender and each L/C Issuer agrees to
notify the Borrower and the Administrative Agent promptly after any such setoff and application,
provided that the failure to give such notice shall not affect the validity of such setoff
and application.

     10.09 Interest Rate Limitation. Notwithstanding anything to the contrary contained in any
Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the
maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”). If
the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum
Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such
unpaid principal, refunded to the Borrower. In determining whether the interest contracted for,
charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person
may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal
as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the
effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the
total amount of interest throughout the contemplated term of the Obligations hereunder.

     10.10 Counterparts; Integration; Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a single contract.
This Agreement and the other Loan Documents constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except as provided in
Section 4.01, this Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received counterparts hereof
that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an
executed counterpart of a signature page of this Agreement by telecopy or other electronic imaging
means shall be effective as delivery of a manually executed counterpart of this Agreement.

     10.11 Survival of Representations and Warranties. All representations and warranties made
hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or
in connection herewith or therewith shall survive the execution and delivery hereof and thereof.
Such representations and warranties have been or will be relied upon by the Administrative Agent
and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or
on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice
or knowledge of any Default at the time of any Credit Extension, and shall continue in full force
and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied
or any Letter of Credit shall remain outstanding.

     10.12 Severability. If any provision of this Agreement or the other Loan Documents is held to
be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the

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remaining provisions of this Agreement and the other Loan Documents shall not be affected or
impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the illegal, invalid or unenforceable provisions. The
invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction.

     10.13 Replacement of Lenders. If any Lender requests compensation under Section 3.04,
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 3.01, if any Lender is a
Defaulting Lender, or if any other circumstance exists hereunder that gives the Borrower the right
to replace a Lender as a party hereto, 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 contained in, and consents
required by, Section 10.06), all of its interests, rights and obligations under this
Agreement and the related Loan Documents to an assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment), provided that:

     (a) the Borrower shall have paid to the Administrative Agent the assignment fee specified in
Section 10.06(b);

     (b) such Lender shall have received payment of an amount equal to the outstanding principal of
its Loans and L/C Advances, accrued interest thereon, accrued fees and all other amounts payable to
it hereunder and under the other Loan Documents (including any amounts under Section 3.05)
from the assignee (to the extent of such outstanding principal and accrued interest and fees) or
the Borrower (in the case of all other amounts);

     (c) in the case of any such assignment resulting from a claim for compensation under
Section 3.04 or payments required to be made pursuant to Section 3.01, such
assignment will result in a reduction in such compensation or payments thereafter; and

     (d) such assignment does not conflict with applicable Laws.

     A Lender shall not be required to make any such assignment or delegation if, prior thereto, as
a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to
require such assignment and delegation cease to apply.

     10.14 Governing Law; Jurisdiction; Etc.

     (a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.

     (b) SUBMISSION TO JURISDICTION. THE BORROWER IRREVOCABLY AND UNCONDITIONALLY SUBMITS,
FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY
APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY

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OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE
PARTIES HERETO 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 FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, IN 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 IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY
LENDER OR ANY L/C ISSUER 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) WAIVER OF VENUE. THE BORROWER IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES
HERETO HEREBY 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) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS
IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS AGREEMENT WILL AFFECT
THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

     10.15 Waiver of Jury Trial. EACH PARTY HERETO HEREBY 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 OR RELATING TO 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 PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE
EVENT OF 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.

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     10.16 No Advisory or Fiduciary Responsibility. In connection with all aspects of each
transaction contemplated hereby (including in connection with any amendment, waiver or other
modification hereof or of any other Loan Document), the Borrower acknowledges and agrees, and
acknowledges its Affiliates’ understanding, that: (i) (A) the arranging and other services
regarding this Agreement provided by the Administrative Agent and each of the Co-Arrangers are
arm’s-length commercial transactions between the Borrower and its Affiliates, on the one hand, and
the Administrative Agent and each Co-Arranger, on the other hand, (B) the Borrower has consulted
its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and
(C) the Borrower is capable of evaluating, and understands and accepts, the terms, risks and
conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) the
Administrative Agent and the Co-Arrangers each is and has been acting solely as a principal and,
except as expressly agreed in writing by the relevant parties, has not been, is not, and will not
be acting as an advisor, agent or fiduciary for the Borrower or any of its Affiliates, or any other
Person and (B) neither the Administrative Agent nor any Co-Arranger has any obligation to the
Borrower or any of its Affiliates with respect to the transactions contemplated hereby except those
obligations expressly set forth herein and in the other Loan Documents; and (iii) the
Administrative Agent and the Co-Arrangers and their respective Affiliates may be engaged in a broad
range of transactions that involve interests that differ from those of the Borrower and its
Affiliates, and neither the Administrative Agent nor any Co-Arranger has any obligation to disclose
any of such interests to the Borrower or its Affiliates. To the fullest extent permitted by law,
the Borrower hereby waives and releases any claims that it may have against the Administrative
Agent and each Co-Arranger with respect to any breach or alleged breach of agency or fiduciary duty
in connection with any aspect of any transaction contemplated hereby.

     10.17 Electronic Execution of Assignments and Certain Other Documents. The words “execution,”
“signed,” “signature,” and words of like import in any Assignment and Assumption or in any
amendment or other modification hereof (including waivers and consents) shall be deemed to include
electronic signatures or the keeping of records in electronic form, each of which shall be of the
same legal effect, validity or enforceability as a manually executed signature or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as provided for in any
applicable law, including the Federal Electronic Signatures in Global and National Commerce Act,
the New York State Electronic Signatures and Records Act, or any other similar state laws based on
the Uniform Electronic Transactions Act.

     10.18 USA PATRIOT Act. Each Lender that is subject to the Act (as hereinafter defined) and
the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower
and each other Loan Party that pursuant to the requirements of the USA PATRIOT Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain,
verify and record information that identifies the Borrower and each other Loan Party, which
information includes the name and address of each Loan Party and other information that will allow
such Lender or the Administrative Agent, as applicable, to identify each Loan Party in accordance
with the Act. The Borrower shall, promptly following a request by the Administrative Agent or any
Lender, provide all documentation and other information that the Administrative Agent or such
Lender requests in order to comply with its ongoing obligations under applicable “know your
customer” and anti-money laundering rules and regulations, including the Act.

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     10.19 Judgment Currency. If, for the purposes of obtaining judgment in any court, it is
necessary to convert a sum due hereunder or any other Loan Document in one currency into another
currency, the rate of exchange used shall be that at which in accordance with normal banking
procedures the Administrative Agent could purchase the first currency with such other currency on
the Business Day preceding that on which final judgment is given. The obligation of the Borrower
in respect of any such sum due from it to the Administrative Agent or any Lender hereunder or under
the other Loan Documents shall, notwithstanding any judgment in a currency (the “Judgment
Currency”) other than that in which such sum is denominated in accordance with the applicable
provisions of this Agreement (the “Agreement Currency”), be discharged only to the extent
that on the Business Day following receipt by the Administrative Agent or such Lender, as the case
may be, of any sum adjudged to be so due in the Judgment Currency, the Administrative Agent or such
Lender, as the case may be, may in accordance with normal banking procedures purchase the Agreement
Currency with the Judgment Currency. If the amount of the Agreement Currency so purchased is less
than the sum originally due to the Administrative Agent or any Lender from the Borrower in the
Agreement Currency, the Borrower agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify the Administrative Agent or such Lender, as the case may be, against such
loss. If the amount of the Agreement Currency so purchased is greater than the sum originally due
to the Administrative Agent or any Lender in such currency, the Administrative Agent or such
Lender, as the case may be, agrees to return the amount of any excess to the Borrower (or to any
other Person who may be entitled thereto under applicable law).

     10.20 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES.

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

	 	 	 	 	 	 	 
	 	 	PARKER DRILLING COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	s/ David W. Tucker	 	 
	 

	 	Name:
	 	 

David W. Tucker
	 	 
	 

	 	Title:	 	Treasurer and Assistant Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A., as

Administrative Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	s/ Shelley A. McGregor	 	 
	 

	 	Name:
	 	 

Shelley A. McGregor
	 	 
	 

	 	Title:
	 	Senior Vice President	 	 

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	 	 	BANK OF AMERICA, N.A., as a Lender and an 
L/C Issuer	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	s/ Shelley A. McGregor	 	 
	 

	 	Name:
	 	 

Shelley A. McGregor
	 	 
	 

	 	Title:
	 	Senior Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	LEHMAN COMMERCIAL PAPER INC., as
Syndication Agent
and a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	s/ Ritam Bhalla	 	 
	 

	 	Name:
	 	 

Ritam Bhalla
	 	 
	 

	 	Title:	 	Authorized Signatory	 	 
	 
	 	 	 	 	 	 
	 	 	ABN AMRO BANK N.V., as Documentation
Agent and a
Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	s/ John D. Reed	 	 
	 

	 	Name:
	 	 

John D. Reed
	 	 
	 

	 	Title:	 	Director	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	s/ Todd D. Vaubel	 	 
	 

	 	Name:
	 	 

Todd D. Vaubel
	 	 
	 

	 	Title:	 	Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	CATERPILLAR
FINANCIAL SERVICES CORPORATION, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	s/ R. S. Freistat	 	 
	 

	 	Name:
	 	 

Roger Scott Freistat
	 	 
	 

	 	Title:	 	Credit Manager	 	 
	 
	 	 	 	 	 	 
	 	 	NATIXIS, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	s/ Donovan C. Broussard	 	 
	 

	 	Name:
	 	 

Donovan C. Broussard
	 	 
	 

	 	Title:
	 	Managing Director	 	 

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123

 

	 	 	 	 	 	 	 
	 

	 	By:	 	s/ Louis P. LaVille, III	 	 
	 

	 	Name:
	 	 

Louis P. LaVille, III
	 	 
	 

	 	Title:
	 	Managing Director	 	 
	 
	 	 	 	 	 	 
	 	 	WHITNEY NATIONAL BANK, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	s/ Paul Cole	 	 
	 

	 	Name:
	 	 

Paul Cole
	 	 
	 

	 	Title:	 	Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	WELLS FARGO BANK, N.A., as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	s/ Corbin Womac	 	 
	 

	 	Name:
	 	 

Corbin Womac
	 	 
	 

	 	Title:
	 	Assistant Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	DEUTSCHE BANK AG NEW YORK BRANCH, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	s/ Silvia L. Spear	 	 
	 

	 	Name:
	 	 

Silvia L. Spear
	 	 
	 

	 	Title:	 	Managing Director	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	s/ Keith C. Braun	 	 
	 

	 	Name:
	 	 

Keith C. Braun
	 	 
	 

	 	Title:	 	Managing Director	 	 
	 
	 	 	 	 	 	 
	 	 	HSBC BANK USA, NATIONAL ASSOCIATION,

as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	s/ Steven F. Larsen	 	 
	 

	 	Name:
	 	Steven F. Larsen

	 	 
	 

	 	Title:	 	First Vice President	 	 

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124

 

	 	 	 	 	 	 	 
	 	 	NORTHRIM BANK, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	s/ Leonard F. Horst	 	 
	 

	 	Name:
	 	 

Leonard F. Horst
	 	 
	 

	 	Title:
	 	Senior Vice President	 	 

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125

 

SCHEDULE 1.01(a)

EXISTING LETTERS OF CREDIT

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SCHEDULE 1.01(b)

ACCOUNT DEBTORS

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SCHEDULE 2.01

COMMITMENTS

AND APPLICABLE PERCENTAGES

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SCHEDULE 5.02

CONSENTS, AUTHORIZATIONS, FILINGS AND NOTICES

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SCHEDULE 5.04

LITIGATION

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SCHEDULE 5.07

SPECIFIED RIGS

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SCHEDULE 5.14

SUBSIDIARIES, AND

OTHER EQUITY INVESTMENTS

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SCHEDULE 5.16

ENVIRONMENTAL MATTERS

Several years ago the Borrower received an information request under the Comprehensive
Environmental Response, Compensation and Liability Act (“CERCLA”) designating Parker
Drilling Offshore Corporation, a subsidiary of the Borrower (the “Subsidiary”) as a
potentially responsible party with respect to the Gulfco Marine Maintenance, Inc. Superfund Site in
Freeport, Texas (EPA No. TX 055144539). The Subsidiary responded to this request in 2003 with
documents. In January, 2008 the Subsidiary received an administrative order to participate in an
investigation of the site and a study of the remediation needs and alternatives. The EPA alleges
that the Subsidiary is successor to a party who owned the Gulfco site during the time when chemical
releases took place there. Two other parties have been performing that work since mid-2005 under an
earlier version of the same order. The Subsidiary believes that it has a sufficient cause to
decline participation under the order and has notified the EPA of that decision. Non-compliance
with an EPA order absent sufficient cause for doing so can result in substantial penalties under
CERCLA. The Subsidiary is continuing to evaluate its relationship to the site and intends to confer
with the EPA in an effort to resolve the matter. The Borrower has not yet estimated the amount or
impact on its operations, financial position or cash flows of any costs related to the site. The
EPA and the other two parties have spent over $2.5 million studying and conducting initial
remediation of the site, and it is anticipated that an additional $1.3 million will be required to
complete the remediation. The Borrower does not believe it has any obligation with respect to the
remediation of the property, and accordingly no accrual was made as of December 31, 2007.

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SCHEDULE 5.18

UCC FILING JURISDICTION;

UNITED STATES COAST GUARD FILING

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SCHEDULE 7.01(f)

EXISTING LIENS

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SCHEDULE 7.03(d)

EXISTING INDEBTEDNESS

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SCHEDULE 7.05(j)

PERMITTED DISPOSITIONS

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SCHEDULE 10.02

ADMINISTRATIVE AGENT’S OFFICE;

CERTAIN ADDRESSES FOR NOTICES

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EXHIBIT A

FORM OF COMMITTED LOAN NOTICE

 

EXHIBIT B

FORM OF BORROWING BASE CERTIFICATE

Date:                                         ,                     

To: Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

	 	 	 	 	 	 	 	 	 
	(1) Total Borrowing Base
	 	 	 	 	 	 	 	 
	(from Schedule I)
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(2) Revolving Credit Facility
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(3) Aggregate Outstanding Amount of the Revolving
Credit Loans
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(4) Aggregate Outstanding Amount of the L/C
Obligations
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(5) Aggregate Outstanding Amount of the Term
Loans
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(6) Aggregate unused Term Loan Commitments
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(7) Borrowing Availability (Borrowing Base Deficiency)
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(A) the lesser of (1) and the sum of
(2) plus (5) plus (6) minus
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(B) the sum of (3) plus (4) plus (5)
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 

     This report (this “Certificate”) is submitted pursuant to Section 6.10(a) of the
Credit Agreement, dated as of May 15, 2008 (as amended, restated, extended, supplemented or
otherwise modified in writing from time to time, the “Agreement”), among Parker Drilling
Company, a Delaware corporation (the “Borrower”), the Lenders from time to time party
thereto, Bank of America, N.A., as Administrative Agent and L/C Issuer, and the other Agents party
thereto. Pursuant to the Collateral Documents, the Administrative Agent has been granted a
security interest in all of the Collateral referred to in this Certificate and has a valid
perfected first priority security interest in the Eligible Collateral, subject to the Liens
permitted under Section 7.01 of the Credit Agreement. Unless otherwise indicated, capitalized
terms used but not defined herein shall have the meanings ascribed to them in the Credit Agreement.

 

     The undersigned hereby certifies, as of the date first written above, that (a) the amounts and
calculations herein and in Schedule I accurately reflect the Accounts, Eligible Accounts,
Rental Equipment, Eligible Rental Equipment, Specified Rigs, Eligible Specified Rigs and
Outstanding Amounts and (b) no Default or Event of Default has occurred or is continuing.

	 	 	 	 	 	 	 
	 	 	PARKER DRILLING COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 

 

SCHEDULE I

to Borrowing Base Certificate

Parker Drilling Company Borrowing Base Certificate for the Month

Ending:                     , 20___

	 	 	 	 	 
	ITEM	 	Amount
	I. Accounts
	 	 	 	 
	 
	 	 	 	 
	Initial deductions (pursuant to definition of Net Amount):
	 	 	 	 
	(Returns, rebates, discounts, credits, allowances, taxes)
	 	 	 	 
	 
	 	 	 	 
	Deductions for ineligible accounts (pursuant to definition of
Eligible Accounts Receivable:
	 	 	 	 
	Accounts arising out of sales to an Affiliate (paragraph (a))
	 	 	 	 
	Accounts more than 60 days overdue after original payment due date or
more than 90 days overdue after original invoice date or, in the case
of Accounts from Qualified Account Debtors, Accounts more than 90
days overdue after the original payment due date or 120 days overdue
after the original invoice date (paragraph (b))
	 	 	 	 
	Accounts of debtors 50% or more of whose Accounts are ineligible
pursuant to overdue provision (paragraph (c))
	 	 	 	 
	Accounts of debtor exceeding 10% of all Accounts of Borrower and
Subsidiaries combined or, for certain debtors, the threshold
determined in Schedule 1.01(b) (paragraph (d))
	 	 	 	 
	Accounts of debtor who is creditor of Borrower or Subsidiary;
Accounts of debtor who has disputed liability or has made claims with
respect to any Accounts; Accounts subject to any right of set-off by
debtor or with respect to which any other claim, counterclaim,
chargeback, rebate, allowance or offset has been asserted (paragraph
(e))
	 	 	 	 
	Accounts of bankrupt debtors (paragraph (f))
	 	 	 	 
	Accounts of debtors outside of the United States, Canada or Puerto
Rico, unless letter of credit has been issued (paragraph (g))
	 	 	 	 
	Bill-and-hold, guaranteed sale, sale-and return, sale on approval or
consignment basis or pursuant to written agreement providing for the
repurchase or return (paragraph (h))
	 	 	 	 
	Accounts for which the Administrative Agent determines (in its
Permitted Discretion) that collection is insecure or that it may not
be paid by reason of financial inability to pay (paragraph (i))
	 	 	 	 
	Government Accounts (paragraph (j))
	 	 	 	 
	Accounts requiring additional services or obligation or otherwise not
representing final sale (paragraph (k))
	 	 	 	 
	Documentation relating to the Accounts does not comply with all legal
requirements (paragraph (1))
	 	 	 	 
	Accounts as to which representations and warranties are breached
(paragraph (m))
	 	 	 	 

 

	 	 	 	 	 
	ITEM	 	Amount
	Accounts subject to adverse security deposit, progress payment or
similar advance (to the extent thereof) (paragraph (n))
	 	 	 	 
	Accounts relating to any instrument or chattel paper that have not
been pledged to the Administrative Agent (o))
	 	 	 	 
	Accounts of debtor in State requiring filing of Notice of Business
Activity Report if Borrower and Subsidiary have not qualified to do
business or obtained such filing (paragraph (p))
	 	 	 	 
	Accounts arising from progress billing or is otherwise conditioned
upon Borrower’s or Subsidiary’s performance (paragraph (q))
	 	 	 	 
	Accounts deemed ineligible by Administrative Agent (in its Permitted
Discretion) (paragraph (r))
	 	 	 	 
	Total ineligibles:
	 	 	 	 
	Eligible Accounts Receivables:
	 	 	 	 
	 
	 	 	 	 
	Advance Rate:
	 	 	85	%
	 
	 	 	 	 
	Accounts availability:
	 	 	 	 
	 
	 	 	 	 
	II. Rental Equipment
	 	 	 	 
	 
	 	 	 	 
	Net Orderly Liquidation Value:
	 	 	 	 
	 
	 	 	 	 
	Net Book Value:
	 	 	 	 
	 
	 	 	 	 
	Deductions for ineligible rental equipment (pursuant to definition of
Eligible Rental Equipment):
	 	 	 	 
	Rental Equipment not solely owned by Quail Rental Tools (section (i))
	 	 	 	 
	Rental Equipment not subject to Administrative Agent’s first priority
security interest (section (ii))
	 	 	 	 
	Rental Equipment for which Quail Rental Tools does not have title or
which is located outside continental United States, the Gulf of
Mexico and Canada (section (iii))
	 	 	 	 
	Rental Equipment which is obsolete, unmerchantable or slow moving
(section (iv))
	 	 	 	 
	Rental Equipment which does not conform to representations and
warranties in Credit Agreement (section (v))
	 	 	 	 
	Rental Equipment held under Vendor Lease (section (i))
	 	 	 	 
	Rental Equipment held at leased property (unless satisfactory
landlord lien waiver has been obtained or rent reserve equal to 3
months rent on such property has been deducted from Borrowing Base)
(Section (ii))
	 	 	 	 
	Rental Equipment otherwise deemed ineligible by Administrative Agent
in its Permitted Discretion (section (iii))
	 	 	 	 
	Total ineligibles:
	 	 	 	 
	Eligible Rental Equipment:
	 	 	 	 

 

	 	 	 	 	 
	ITEM	 	Amount
	Equipment OLV Percentage:
	 	 	 	 
	Advance Rate:
	 	 	 	 
	Rental Equipment availability:
	 	 	 	 
	 
	 	 	 	 
	III. Specified Rigs
	 	 	 	 
	 
	 	 	 	 
	Net Orderly Liquidation Value of Specified Rigs:
	 	 	 	 
	 
	 	 	 	 
	Deductions for ineligible Specified Rigs (pursuant to the definition
of Eligible Specified Rigs):
	 	 	 	 
	Specified Rig not solely owned by a Loan Party (section (i))
	 	 	 	 
	Specified Rig not subject to Administrative Agent’s first priority
Lien (section (ii))
	 	 	 	 
	Specified Rig for which a Loan Party does not have title or which is
located outside continental United States or Gulf of Mexico waters
subject to state or Federal jurisdiction (section (iii))
	 	 	 	 
	Specified Rig which is obsolete (section (iv))
	 	 	 	 
	Specified Rig which does not conform to representations and
warranties in Credit Agreement or applicable Mortgage or is not
insured (section (v))
	 	 	 	 
	Specified Rigs otherwise deemed ineligible by Administrative Agent in
its Permitted Discretion
	 	 	 	 
	Total ineligibles:
	 	 	 	 
	Eligible Specified Rigs:
	 	 	 	 
	Net Specified Rigs OLV:
	 	 	 	 
	Advance Rate:
	 	 	50	%
	Specified Rigs availability:
	 	 	 	 
	 
	 	 	 	 
	IV. Net Borrowing Availability
	 	 	 	 
	 
	 	 	 	 
	Total Borrowing Base [(i) Accounts availability plus (ii)
Rental Equipment availability plus (iii) Specified Rigs availability]:
	 	 	 	 
	 
	 	 	 	 
	Minimum Percentage of Total Borrowing Base
attributable to Eligible Accounts Receivable:
	 	 	20	%
	Current Eligible Accounts Receivable as a percentage of
Total Borrowing Base:
	 	 	 	 
	Maximum Borrowing Base Availability
(based on 20% minimum for Eligible Accounts Receivable):
	 	 	 	 
	 
	 	 	 	 
	Aggregate Commitments under Revolving Credit Facility
plus Term Loan Facility:
	 	 	 	 
	 
	 	 	 	 
	Total Borrowing Base:
	 	 	 	 
	Less: amounts outstanding under Revolving Credit Facility:
	 	 	 	 

 

	 	 	 	 	 
	ITEM	 	Amount
	Less: amounts outstanding under Letters of Credit:
	 	 	 	 
	Less: amounts outstanding under Term Loan Facility:
	 	 	 	 
	Less: any reserves established by the Administrative Agent pursuant
to paragraph (b) of definition of Borrowing Base and/or the second
clause (ii) of the definition of “Eligible Rental Equipment” and/or
Section 2.04(b):
	 	 	 	 
	Net borrowing availability:
	 	 	 	 

 

EXHIBIT C-1

FORM OF TERM NOTE

          FOR VALUE RECEIVED, the undersigned (the “Borrower”) hereby promises to pay to
                     or registered assigns (the “Lender”), in accordance with the
provisions of the Agreement (as hereinafter defined), the principal amount of each Term Loan from
time to time made by the Lender to the Borrower under that certain Credit Agreement, dated as of
May 15, 2008 (as amended, restated, extended, supplemented or otherwise modified in writing from
time to time, the “Agreement;” the terms defined therein being used herein as therein
defined), among the Borrower, the Lenders from time to time party thereto, Bank of America, N.A.,
as Administrative Agent and L/C Issuer, and the other Agents party thereto.

          The Borrower promises to pay interest on the unpaid principal amount of each Term Loan made by
the Lender from the date of such Loan until such principal amount is paid in full, at such interest
rates and at such times as provided in the Agreement. All payments of principal and interest shall
be made to the Administrative Agent for the account of the Lender in Dollars in immediately
available funds at the Administrative Agent’s Office. If any amount is not paid in full when due
hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date
thereof until the date of actual payment (and before as well as after judgment) computed at the per
annum rate set forth in the Agreement.

          This Term Note is one of the Term Notes referred to in the Agreement, is entitled to the
benefits thereof and may be prepaid in whole or in part subject to the terms and conditions
provided therein. This Term Note is also entitled to the benefits of the Subsidiary Guaranty and
is secured by the Collateral. Upon the occurrence and continuation of one or more of the Events of
Default specified in the Agreement, all amounts then remaining unpaid on this Term Note shall
become, or may be declared to be, immediately due and payable all as provided in the Agreement.
Each Term Loan made by the Lender shall be evidenced by one or more loan accounts or records
maintained by the Lender in the ordinary course of business. The Lender may also attach schedules
to this Term Note and endorse thereon the date, amount and maturity of its Loans and payments with
respect thereto.

          The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment,
protest and demand and notice of protest, demand, dishonor and non-payment of this Term Note.

     THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.

	 	 	 	 	 	 	 
	 	 	PARKER DRILLING COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 
 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

 

 

EXHIBIT C-2

FORM OF REVOLVING CREDIT NOTE

          FOR VALUE RECEIVED, the undersigned (the “Borrower”) hereby promises to pay to
___or registered assigns (the “Lender”), in accordance with the
provisions of the Agreement (as hereinafter defined), the principal amount of each Revolving Credit
Loan from time to time made by the Lender to the Borrower under that certain Credit Agreement,
dated as of May 15, 2008 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the “Agreement;” the terms defined therein being used herein as
therein defined), among the Borrower, the Lenders from time to time party thereto, Bank of America,
N.A., as Administrative Agent and L/C Issuer, and the other Agents party thereto.

          The Borrower promises to pay interest on the unpaid principal amount of each Revolving Credit
Loan from the date of such Loan until such principal amount is paid in full, at such interest rates
and at such times as provided in the Agreement. All payments of principal and interest shall be
made to the Administrative Agent for the account of the Lender in Dollars in immediately available
funds at the Administrative Agent’s Office. If any amount is not paid in full when due hereunder,
such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the
date of actual payment (and before as well as after judgment) computed at the per annum rate set
forth in the Agreement.

          This Revolving Credit Note is one of the Revolving Credit Notes referred to in the Agreement,
is entitled to the benefits thereof and may be prepaid in whole or in part subject to the terms and
conditions provided therein. This Revolving Credit Note is also entitled to the benefits of the
Subsidiary Guaranty and is secured by the Collateral. Upon the occurrence and continuation of one
or more of the Events of Default specified in the Agreement, all amounts then remaining unpaid on
this Revolving Credit Note shall become, or may be declared to be, immediately due and payable all
as provided in the Agreement. Revolving Credit Loans made by the Lender shall be evidenced by one
or more loan accounts or records maintained by the Lender in the ordinary course of business. The
Lender may also attach schedules to this Revolving Credit Note and endorse thereon the date, amount
and maturity of its Revolving Credit Loans and payments with respect thereto.

          The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment,
protest and demand and notice of protest, demand, dishonor and non-payment of this Revolving Credit
Note.

     THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.

	 	 	 	 	 	 	 
	 	 	PARKER DRILLING COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 
 

	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

 

 

EXHIBIT D

FORM OF COMPLIANCE CERTIFICATE

Financial Statement Date:                     ,

To: Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

     Reference is made to that certain Credit Agreement, dated as of May 15, 2008 (as amended,
restated, extended, supplemented or otherwise modified in writing from time to time, the
“Agreement;” the terms defined therein being used herein as therein defined), among Parker
Drilling Company, a Delaware corporation (the “Borrower”), the Lenders from time to time
party thereto, Bank of America, N.A., as Administrative Agent and L/C Issuer, and the other Agents
party thereto.

          The undersigned Responsible Officer1 hereby certifies as of the date hereof that
he/she is the                                                              of the Borrower, and that, as such, he/she is
authorized to execute and deliver this Certificate to the Administrative Agent on the behalf of the
Borrower, and that:

[Use following paragraph 1 for fiscal year-end financial statements]

          1. The Borrower has delivered the year-end audited financial statements required by
Section 6.01(a) of the Agreement for the fiscal year of the Borrower ended as of the above
date, together with the report and opinion of an independent certified public accountant required
by Section 6.02(a). In addition, the Borrower has delivered the Projections for the
immediately succeeding fiscal year and such Projections are based upon good faith estimates,
information and assumptions believed by management of the Borrower to be reasonable at the time
made and the undersigned has no reason to believe, as of the date hereof, that such Projections are
misleading in any material respect in light of the circumstances under which made, or omit to state
any material fact which would render them misleading in any material respect, it being recognized
by the Lenders that such financial information as it relates to future events is not to be viewed
as fact and that actual results during the period or periods covered by such financial information
may differ from the projected results set forth therein by a material amount.

[Use following paragraph 1 for fiscal quarter-end financial statements]

          1. The Borrower has delivered the unaudited financial statements required by Section
6.01(b) of the Agreement for the fiscal quarter of the Borrower ended as of the above date.
Such consolidated financial statements fairly state in all material respects the financial
condition, results of operations and cash flows of the Borrower and its Subsidiaries in

 

			
	1	 	This certificate should be from the chief financial
officer of the Borrower, except in the case of each certificate delivered with
monthly financial statements other than fiscal quarter year-end which should be
from the chief financial officer, treasurer or controller.

 

 

accordance
with GAAP as at such date and for such period, subject only to normal year-end audit adjustments
and the absence of footnotes.

[Use following paragraph 1 for monthly financial statements other than fiscal quarter-end]

          1. The Borrower has delivered the unaudited financial statements required by Section
6.01(c) of the Agreement for the calendar month ended as of the above date. Such consolidated
financial statements fairly state in all material respects the financial condition, results of
operations and cash flows of the Borrower and its Subsidiaries in accordance with GAAP as at such
date and for such period, subject only to normal year-end audit adjustments and the absence of
footnotes.

          2. The undersigned has reviewed and is familiar with the terms of the Agreement and has made,
or has caused to be made under his/her supervision, a detailed review of the transactions and
condition (financial or otherwise) of the Borrower during the accounting period covered by such
financial statements.

          3. A review of the activities of the Borrower during such fiscal period has been made under
the supervision of the undersigned with a view to determining whether during such fiscal period the
Borrower performed and observed all its Obligations under the Loan Documents, and

[select one:]

          [to the best knowledge of the undersigned, during such fiscal period each Loan Party performed
and observed each covenant and condition of the Loan Documents applicable to it, and no Default or
Event of Default has occurred and is continuing.]

—or—

          [to the best knowledge of the undersigned, the following covenants or conditions have not been
performed or observed and the following is a list of each such Default or Event of Default and its
nature and status:]

          4. The representations and warranties of the Borrower contained in Article V of the
Agreement and all representations and warranties of any Loan Party that are contained in any
document furnished at any time under or in connection with the Loan Documents, are true and correct
in all material respects on and as of the date hereof, except to the extent that such
representations and warranties specifically refer to an earlier date, in which case they are true
and correct as of such earlier date, and except that for purposes of this Compliance Certificate,
the representations and warranties contained in subsections (a) and (b) of Section 5.05 of
the Agreement shall be deemed to refer to the most recent statements furnished pursuant to clauses
(a) and (b), respectively, of Section 6.01 of the Agreement, including the statements in
connection with which this Compliance Certificate is delivered.

          5. The financial covenant analyses and information set forth on Schedules 1 and
2 attached hereto are true and accurate on and as of the date of this Certificate.

 

 

     IN WITNESS WHEREOF, the undersigned has executed this Certificate as of                     , ___.

	 	 	 	 	 	 	 
	 	 	PARKER DRILLING COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

 

 

For the Quarter/Year ended                      (“Statement Date”)

SCHEDULE 1

to the Compliance Certificate

($ in 000’s)

	I.	 	Section 7.02(a) – Consolidated Leverage Ratio.

	 	 	 	 	 
	A. Consolidated Total Debt at Statement Date
	 	$	 	 
	 
	 	 	 
	B. Consolidated EBITDA for Subject Period (from Schedule 2):
	 	$	 	 
	 
	 	 	 
	C. Consolidated Leverage Ratio (Line I.A ÷ Line I.B):
	 	       to 1	 
	Maximum permitted:
	 	 	 	 

	 	 	 
	 

	 	Minimum Consolidated Leverage
	Four Fiscal Quarters Ending
	 	Ratio
	each fiscal quarter
	 	4:00 to 1

	II.	 	Section 7.02(b) – Consolidated Interest Coverage Ratio.

	 	 	 	 	 
	A. Consolidated EBITDA for measurement period ending on above date
(“Subject Period”) (from Schedule 2):
	 	$	 	 
	 
	 	 	 
	B. Consolidated Interest Charges for Subject Period:
	 	$	 	 
	 
	 	 	 
	C. Consolidated Interest Coverage Ratio (Line II.A ÷ Line II.B):
	 	       to 1	 
	Minimum required:
	 	 	 	 

	 	 	 
	 

	 	Minimum Consolidated Interest
	Four Fiscal Quarters Ending
	 	Coverage Ratio
	each fiscal quarter
	 	2.50 to 1

	III.	 	Section 7.02(c) – Consolidated Senior Secured Leverage Ratio.

	 	 	 	 	 
	A. Consolidated Senior Secured Debt at Statement Date
	 	$	 	 
	 
	 	 	 
	B. Consolidated EBITDA for Subject Period (from Schedule 2):
	 	$	 	 
	 
	 	 	 
	C. Consolidated Senior Secured Leverage Ratio (Line III.A ÷ Line
III.B):
	 	       to 1	 
	Maximum permitted:
	 	 	 	 

	 	 	 
	 

	 	Minimum Consolidated Senior
	Four Fiscal Quarters Ending
	 	Secured Leverage Ratio
	each fiscal quarter
	 	1.50 to 1

 

 

For the Quarter/Year ended                      (“Statement Date”)

SCHEDULE 2

to the Compliance Certificate

($ in 000’s)

Consolidated EBITDA

(in accordance with the definition of Consolidated EBITDA

as set forth in the Agreement)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Twelve	 
	Consolidated	 	Quarter	 	 	Quarter	 	 	Quarter	 	 	Quarter	 	 	Months	 
	EBITDA	 	Ended	 	 	Ended	 	 	Ended	 	 	Ended	 	 	Ended	 
	Consolidated
Net Income
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	+ Consolidated
Interest Charges
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	+ income taxes
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	+ depreciation
expense
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	+ amortization
expense
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	+ amortization of
intangibles and
organization cost
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	+ non-recurring
expenses
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	+ other non-cash
charges
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	- income tax credits
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	- non-recurring
income or gains
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	- non-cash income
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	- cash expenditures
added as non-cash
charges in prior
period
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	= Consolidated EBITDA
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 

 

EXHIBIT E-1

ASSIGNMENT AND ASSUMPTION

          This Assignment and Assumption (this “Assignment and Assumption”) is dated as of the
Effective Date set forth below and is entered into by and between [the][each]2 Assignor
identified in item 1 below ([the][each, an] “Assignor”) and [the][each]3
Assignee identified in item 2 below ([the][each, an] “Assignee”). [It is understood and
agreed that the rights and obligations of [the Assignors][the Assignees]4 hereunder are
several and not joint.]5 Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (the “Credit Agreement”),
receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and
Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by
reference and made a part of this Assignment and Assumption as if set forth herein in full.

          For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the
Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases and
assumes from [the Assignor][the respective Assignors], subject to and in accordance with the
Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of [the Assignor’s][the respective Assignors’]
rights and obligations in [its capacity as a Lender][their respective capacities as Lenders] under
the Credit Agreement and any other documents or instruments delivered pursuant thereto to the
extent related to the amount and percentage interest identified below of all of such outstanding
rights and obligations of [the Assignor][the respective Assignors] under the respective facilities
identified below (including, without limitation, the Letters of Credit included in such
facilities6) and (ii) to the extent permitted to be assigned under applicable law, all
claims, suits, causes of action and any other right of [the Assignor (in its capacity as a
Lender)][the respective Assignors (in their respective capacities as Lenders)] against any Person,
whether known or unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in
any way based on or related to any of the foregoing, including, but not limited to, contract
claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights
and obligations sold and assigned by [the][any] Assignor to [the][any] Assignee pursuant to clauses
(i) and (ii) above being referred to herein collectively as [the][an] “Assigned Interest”).
Each such sale and assignment is without recourse to [the][any] Assignor and, except as expressly
provided in this Assignment and Assumption, without representation or warranty by [the][any]
Assignor.

	 	 	 	 	 
	1.      Assignor[s]:
	 	 	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 

 

			
	2	 	For bracketed language here and elsewhere in this form
relating to the Assignor(s), if the assignment is from a single Assignor,
choose the first bracketed language. If the assignment is from multiple
Assignors, choose the second bracketed language.
	 
	3	 	For bracketed language here and elsewhere in this form
relating to the Assignee(s), if the assignment is to a single Assignee, choose
the first bracketed language. If the assignment is to multiple Assignees,
choose the second bracketed language.
	 
	4	 	Select as appropriate.
	 
	5	 	Include bracketed language if there are either multiple
Assignors or multiple Assignees.
	 
	6	 	Include all applicable subfacilities.

 

 

2. Assignee[s]:                                         

                                                                 

     [for each Assignee, indicate [Affiliate][Approved Fund] of [identify Lender]]

3. Borrower: Parker Drilling Company, a Delaware corporation

4. Administrative Agent: Bank of America, N.A., as the administrative agent under the
Credit Agreement

5. Credit Agreement: Credit Agreement, dated as of May 15, 2008, among Parker Drilling
Company, as Borrower, the Lenders from time to time party thereto, Bank of America, N.A., as
Administrative Agent and L/C Issuer, and the other Agents party thereto

6. Assigned Interest:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Aggregate	 	 	 	 	 	 	Percentage	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Amount of	 	 	Amount of	 	 	Assigned of	 	 	 	 
	 	 	 	 	 	 	Facility	 	 	Commitment/Loans	 	 	Commitment/Loans	 	 	Commitment/	 	 	CUSIP	 
	Assignor[s]7	 	Assignee[s]8	 	 	Assigned9	 	 	for all Lenders10	 	 	Assigned	 	 	Loans11	 	 	Number	 
	 
	 	 	 	 	 	 	——	 	 	$	——	 	 	$	——	 	 	 	——	%	 	 	 	 
	 
	 	 	 	 	 	 	——	 	 	$	——	 	 	$	——	 	 	 	——	%	 	 	 	 
	 
	 	 	 	 	 	 	——	 	 	$	——	 	 	$	——	 	 	 	——	%	 	 	 	 

     [7. Trade Date:                     ]12

     Effective Date:                     , 20                     [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE
THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

 

			
	7	 	List each Assignor, as appropriate.
	 
	8	 	List each Assignee, as appropriate.
	 
	9	 	Fill in the appropriate terminology for the types of
facilities under the Credit Agreement that are being assigned under this
Assignment (e.g. “Revolving Credit Commitment”, “Term Loan Commitment”, etc.).
	 
	10	 	Amounts in this column and in the column immediately
to the right to be adjusted by the counterparties to take into account any
payments or prepayments made between the Trade Date and the Effective Date.
	 
	11	 	Set forth, to at least 9 decimals, as a percentage of
the Commitment/Loans of all Lenders thereunder.
	 
	12	 	To be completed if the Assignor and the Assignee
intend that the minimum assignment amount is to be determined as of the Trade
Date.

 

 

     The terms set forth in this Assignment and Assumption are hereby agreed to:

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	ASSIGNOR	 	 
	 	 	[NAME OF ASSIGNOR]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	ASSIGNEE	 	 
	 	 	[NAME OF ASSIGNEE]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 

[Consented
to and]13 Accepted:

	 	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	BANK OF AMERICA, N.A., as	 	 
	Administrative Agent	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	Title:
	 	 	 	 
	 
	 	 	 	 
	[Consented
to:]14	 	 
	 
	 	 	 	 
	[COMPANY]	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	Title:
	 	 	 	 

 

			
	13	 	To be added only if the consent of the Administrative
Agent is required by the terms of the Credit Agreement.
	 
	14	 	To be added only if the consent of the Borrower and/or
other parties (e.g. L/C Issuers) is required by the terms of the Credit
Agreement.

 

 

EXHIBIT E-2

FORM OF ADMINISTRATIVE QUESTIONNAIRE

 

 

EXHIBIT F

FORM OF SUBSIDIARY GUARANTY

 

 

EXHIBIT G

FORM OF IRREVOCABLE PROXY, PLEDGE AND SECURITY AGREEMENT

 

 

EXHIBIT H

FORM OF FIRST PREFERRED FLEET MORTGAGE

 

 

EXHIBIT I-1

OPINION MATTERS

Form of Opinion of Counsel to Loan Parties

 

 

EXHIBIT I-2

OPINION MATTERS

Form of Opinion of General Counselexv4w8

EXHIBIT 4.8

FORM OF SENIOR INDENTURE

 

CARRIZO OIL & GAS, INC.

as Issuer

and

THE POTENTIAL SUBSIDIARY GUARANTORS

LISTED ON THE SIGNATURE PAGES HERETO

as Potential Subsidiary Guarantors

and

WELLS
FARGO BANK, NATIONAL ASSOCIATION

as Trustee

 

Indenture

Dated as of ___, ___

 

Debt Securities

 

 

 

CARRIZO OIL & GAS, INC.

Reconciliation and tie between Trust Indenture Act of 1939

and Indenture, dated as of ___ ___, ___

 

	 	 	 	 	 
	Section of	 	 
	Trust Indenture	 	Section(s) of
	Act of 1939	 	Indenture
	 	§ 310  	(a)(1)	 	7.10

	 	 	(a)(2)	 	7.10

	 	 	(a)(3)	 	Not Applicable 

	 	 	(a)(4)	 	Not Applicable

	 	 	(a)(5)	 	7.10

	 	 	(b)	 	7.08, 7.10

	 	§ 311  	(a)	 	7.11

	 	 	(b)	 	7.11

	 	 	(c)	 	Not Applicable

	 	§ 312  	(a)	 	2.07

	 	 	(b)	 	11.03

	 	 	(c)	 	11.03

	 	§ 313  	(a)	 	7.06

	 	 	(b)	 	7.06

	 	 	(c)	 	7.06

	 	 	(d)	 	7.06

	 	§ 314  	(a)	 	4.03, 4.04

	 	 	(b)	 	Not Applicable

	 	 	(c)(1)	 	11.04

	 	 	(c)(2)	 	11.04

	 	 	(c)(3)	 	Not Applicable

	 	 	(d)	 	Not Applicable

	 	 	(e)	 	11.05

	 	§ 315  	(a)	 	7.01(b)

	 	 	(b)	 	7.05

	 	 	(c)	 	7.01(a)

	 	 	(d)	 	7.01(c)

	 	 	(d)(1)	 	7.01(c)(1)

	 	 	(d)(2)	 	7.01(c)(2)

	 	 	(d)(3)	 	7.01(c)(3)

	 	 	(e)	 	6.11

	 	§ 316  	(a)(1)(A)	 	6.05

	 	 	(a)(1)(B)	 	6.04

	 	 	(a)(2)	 	Not Applicable

	 	 	 (a)(last sentence)	 	2.11

	 	 	(b)	 	6.07

	 	§ 317  	(a)(1)	 	6.08

	 	 	(a)(2)	 	6.09

	 	 	(b)	 	2.06

	 	§ 318  	(a)	 	11.01

 

Note: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the
Indenture.

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE
	 	 	1	 
	 
	 	 	 	 
	SECTION 1.01 Definitions
	 	 	1	 
	SECTION 1.02 Other Definitions
	 	 	6	 
	SECTION 1.03 Incorporation by Reference of Trust Indenture Act
	 	 	6	 
	SECTION 1.04 Rules of Construction
	 	 	7	 
	 
	 	 	 	 
	ARTICLE II THE SECURITIES
	 	 	7	 
	 
	 	 	 	 
	SECTION 2.01 Amount Unlimited; Issuable in Series
	 	 	7	 
	SECTION 2.02 Denominations
	 	 	10	 
	SECTION 2.03 Forms Generally
	 	 	10	 
	SECTION 2.04 Execution, Authentication, Delivery and Dating
	 	 	11	 
	SECTION 2.05 Registrar and Paying Agent
	 	 	13	 
	SECTION 2.06 Paying Agent to Hold Money in Trust
	 	 	13	 
	SECTION 2.07 Holder Lists
	 	 	13	 
	SECTION 2.08 Transfer and Exchange
	 	 	14	 
	SECTION 2.09 Replacement Securities
	 	 	14	 
	SECTION 2.10 Outstanding Securities
	 	 	15	 
	SECTION 2.11 Original Issue Discount, Foreign-Currency Denominated and Treasury Securities
	 	 	15	 
	SECTION 2.12 Temporary Securities
	 	 	15	 
	SECTION 2.13 Cancellation
	 	 	16	 
	SECTION 2.14 Payments; Defaulted Interest
	 	 	16	 
	SECTION 2.15 Persons Deemed Owners
	 	 	16	 
	SECTION 2.16 Computation of Interest
	 	 	17	 
	SECTION 2.17 Global Securities; Book-Entry Provisions
	 	 	17	 
	 
	 	 	 	 
	ARTICLE III REDEMPTION
	 	 	19	 
	 
	 	 	 	 
	SECTION 3.01 Applicability of Article
	 	 	19	 
	SECTION 3.02 Notice to the Trustee
	 	 	19	 
	SECTION 3.03 Selection of Securities To Be Redeemed
	 	 	19	 
	SECTION 3.04 Notice of Redemption
	 	 	20	 
	SECTION 3.05 Effect of Notice of Redemption
	 	 	21	 
	SECTION 3.06 Deposit of Redemption Price
	 	 	21	 
	SECTION 3.07 Securities Redeemed or Purchased in Part
	 	 	21	 
	SECTION 3.08 Purchase of Securities
	 	 	21	 
	SECTION 3.09 Mandatory and Optional Sinking Funds
	 	 	22	 
	SECTION 3.10 Satisfaction of Sinking Fund Payments with Securities
	 	 	22	 
	SECTION 3.11 Redemption of Securities for Sinking Fund
	 	 	22	 
	 
	 	 	 	 
	ARTICLE IV COVENANTS
	 	 	23	 
	 
	 	 	 	 
	SECTION 4.01 Payment of Securities
	 	 	23	 

i

 

	 	 	 	 	 
	 	 	Page
	SECTION 4.02 Maintenance of Office or Agency
	 	 	23	 
	SECTION 4.03 SEC Reports; Financial Statements
	 	 	24	 
	SECTION 4.04 Compliance Certificate
	 	 	24	 
	SECTION 4.05 Corporate Existence
	 	 	25	 
	SECTION 4.06 Waiver of Stay, Extension or Usury Laws
	 	 	25	 
	SECTION 4.07 Additional Amounts
	 	 	25	 
	 
	 	 	 	 
	ARTICLE V SUCCESSORS
	 	 	26	 
	 
	 	 	 	 
	SECTION 5.01 Limitations on Mergers and Consolidations
	 	 	26	 
	SECTION 5.02 Successor Person Substituted
	 	 	26	 
	 
	 	 	 	 
	ARTICLE VI DEFAULTS AND REMEDIES
	 	 	27	 
	 
	 	 	 	 
	SECTION 6.01 Events of Default
	 	 	27	 
	SECTION 6.02 Acceleration
	 	 	29	 
	SECTION 6.03 Other Remedies
	 	 	29	 
	SECTION 6.04 Waiver of Defaults
	 	 	30	 
	SECTION 6.05 Control by Majority
	 	 	30	 
	SECTION 6.06 Limitations on Suits
	 	 	30	 
	SECTION 6.07 Rights of Holders to Receive Payment
	 	 	31	 
	SECTION 6.08 Collection Suit by Trustee
	 	 	31	 
	SECTION 6.09 Trustee May File Proofs of Claim
	 	 	31	 
	SECTION 6.10 Priorities
	 	 	32	 
	SECTION 6.11 Undertaking for Costs
	 	 	33	 
	 
	 	 	 	 
	ARTICLE VII TRUSTEE
	 	 	33	 
	 
	 	 	 	 
	SECTION 7.01 Duties of Trustee
	 	 	33	 
	SECTION 7.02 Rights of Trustee
	 	 	34	 
	SECTION 7.03 May Hold Securities
	 	 	34	 
	SECTION 7.04 Trustee’s Disclaimer
	 	 	35	 
	SECTION 7.05 Notice of Defaults
	 	 	35	 
	SECTION 7.06 Reports by Trustee to Holders
	 	 	35	 
	SECTION 7.07 Compensation and Indemnity
	 	 	35	 
	SECTION 7.08 Replacement of Trustee
	 	 	36	 
	SECTION 7.09 Successor Trustee by Merger, etc.
	 	 	38	 
	SECTION 7.10 Eligibility; Disqualification
	 	 	38	 
	SECTION 7.11 Preferential Collection of Claims Against the Company or the
Subsidiary Guarantor
	 	 	38	 
	 
	 	 	 	 
	ARTICLE VIII DISCHARGE OF INDENTURE
	 	 	39	 
	 
	 	 	 	 
	SECTION 8.01 Termination of the Company’s and the Subsidiary Guarantor’s Obligations
	 	 	39	 
	SECTION 8.02 Application of Trust Money
	 	 	42	 
	SECTION 8.03 Repayment to Company
	 	 	43	 
	SECTION 8.04 Reinstatement
	 	 	43	 
	 
	 	 	 	 
	ARTICLE IX SUPPLEMENTAL INDENTURES AND AMENDMENTS
	 	 	43	 
	 
	 	 	 	 
	SECTION 9.01 Without Consent of Holders
	 	 	43	 

ii

 

	 	 	 	 	 
	 	 	Page
	SECTION 9.02 With Consent of Holders
	 	 	45	 
	SECTION 9.03 Compliance with Trust Indenture Act
	 	 	47	 
	SECTION 9.04 Revocation and Effect of Consents
	 	 	47	 
	SECTION 9.05 Notation on or Exchange of Securities
	 	 	47	 
	SECTION 9.06 Trustee to Sign Amendments, etc.
	 	 	48	 
	 
	 	 	 	 
	ARTICLE X GUARANTEE
	 	 	48	 
	 
	 	 	 	 
	SECTION 10.01 Guarantee
	 	 	48	 
	SECTION 10.02 Execution and Delivery of Guarantee
	 	 	50	 
	SECTION 10.03 Limitation on Liability of the Subsidiary Guarantor
	 	 	50	 
	SECTION 10.04 Release of Subsidiary Guarantor from Guarantee
	 	 	51	 
	 
	 	 	 	 
	ARTICLE XI MISCELLANEOUS
	 	 	51	 
	 
	 	 	 	 
	SECTION 11.01 Trust Indenture Act Controls
	 	 	51	 
	SECTION 11.02 Notices
	 	 	52	 
	SECTION 11.03 Communication by Holders with Other Holders
	 	 	53	 
	SECTION 11.04 Certificate and Opinion as to Conditions Precedent
	 	 	53	 
	SECTION 11.05 Statements Required in Certificate or Opinion
	 	 	53	 
	SECTION 11.06 Rules by Trustee and Agents
	 	 	54	 
	SECTION 11.07 Legal Holidays
	 	 	54	 
	SECTION 11.08 No Recourse Against Others
	 	 	54	 
	SECTION 11.09 Governing Law
	 	 	54	 
	SECTION 11.10 No Adverse Interpretation of Other Agreements
	 	 	54	 
	SECTION 11.11 Successors
	 	 	54	 
	SECTION 11.12 Severability
	 	 	54	 
	SECTION 11.13 Counterpart Originals
	 	 	55	 
	SECTION 11.14 Table of Contents, Headings, etc.
	 	 	55	 

iii

 

          INDENTURE
dated as of ___ ___, ___ between Carrizo Oil & Gas, Inc., a Texas corporation
(the “Company”), the potential subsidiary guarantors listed on the signature pages hereto (the
“Potential Subsidiary Guarantors”), and Wells Fargo Bank, National Association, as trustee (the
“Trustee”).

          Each party agrees as follows for the benefit of the other party and for the equal and ratable
benefit of the Holders of the Company’s unsecured debentures, notes or other evidences of
indebtedness (the “Securities”), and the related Guarantees (as hereinafter defined), to be issued
from time to time in one or more series as provided in this Indenture:

ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01 Definitions.

          “Additional Amounts” means any additional amounts required by the express terms of a Security
or by or pursuant to a Board Resolution, under circumstances specified therein or pursuant thereto,
to be paid by the Company with respect to certain taxes, assessments or other governmental charges
imposed on certain Holders and that are owing to such Holders.

          “Affiliate” of any specified Person means any other Person directly or indirectly controlling
or controlled by, or under direct or indirect common control with, such specified Person. For
purposes of this definition, “control” of a Person shall mean the power to direct the management
and policies of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms “controlling” and “controlled” shall have
meanings correlative to the foregoing.

          “Agent” means any Registrar or Paying Agent.

          “Bankruptcy Law” means Title 11 of the United States Code or any similar federal, state or
foreign law for the relief of debtors.

          “Board of Directors” means the Board of Directors of the Company or any committee thereof duly
authorized, with respect to any particular matter, to act by or on behalf of the Board of Directors
of the Company.

          “Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board of Directors and to be in full
force and effect on the date of such certification, and delivered to the Trustee.

          “Business Day” means any day that is not a Legal Holiday.

          “Company” means the Person named as the “Company” in the first paragraph of this instrument
until a successor Person shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter “Company” shall mean such successor Person; provided, however, that for
purposes of any provision contained herein which is required by the TIA, “Company” shall also mean
each other obligor (if any) on the Securities of a series.

1

 

          “Company Order” and “Company Request” mean, respectively, a written order or request signed in
the name of the Company by two Officers of the Company, and delivered to the Trustee.

          “Corporate Trust Office of the Trustee” means the office of the Trustee located at 1445 Ross
Avenue, 2nd Floor, MAC T5303-02J, Dallas, TX 75202, Attention: Patrick Giordano, and as may be
located at such other address as the Trustee may give notice to the Company.

          “Default” means any event, act or condition that is, or after notice or the passage of time or
both would be, an Event of Default.

          “Depositary” means, with respect to the Securities of any series issuable or issued in whole
or in part in global form, the Person specified pursuant to Section 2.01 hereof as the initial
Depositary with respect to the Securities of such series, until a successor shall have been
appointed and become such pursuant to the applicable provision of this Indenture, and thereafter
“Depositary” shall mean or include such successor.

          “Dollar” or “$” means a dollar or other equivalent unit in such coin or currency of the United
States as at the time shall be legal tender for the payment of public and private debt.

          “Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor
statute.

          “GAAP” means generally accepted accounting principles in the United States set forth in the
opinions and pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as may be approved by a
significant segment of the accounting profession of the United States, as in effect from time to
time.

          “Global Security” means a Security that is issued in global form in the name of the Depositary
with respect thereto or its nominee.

          “Government Obligations” means, with respect to a series of Securities, direct obligations of
the government that issues the currency in which the Securities of the series are payable for the
payment of which the full faith and credit of such government is pledged, or obligations of a
Person controlled or supervised by and acting as an agency or instrumentality of such government,
the payment of which is unconditionally guaranteed as a full faith and credit obligation by such
government.

          “Guarantee” means the guarantee of the Company’s obligations under the Securities of a series
by a Subsidiary Guarantor (specified with respect to such series as contemplated by Section
2.01(9)) as provided in Article X.

          “Holder” means a Person in whose name a Security is registered.

2

 

          “Indenture” means this Indenture as amended or supplemented from time to time pursuant to the
provisions hereof, and includes the terms of a particular series of Securities established as
contemplated by Section 2.01.

          “interest” means, with respect to an Original Issue Discount Security that by its terms bears
interest only after Maturity, interest payable after Maturity.

          “Interest Payment Date,” when used with respect to any Security, shall have the meaning
assigned to such term in the Security as contemplated by Section 2.01.

          “Issue Date” means, with respect to Securities of a series, the date on which the Securities
of such series are originally issued under this Indenture.

          “Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions in any of
The City of New York, New York; Houston, Texas or a Place of Payment are authorized or obligated by
law, regulation or executive order to remain closed.

          “Maturity” means, with respect to any Security, the date on which the principal of such
Security or an installment of principal becomes due and payable as therein or herein provided,
whether at the Stated Maturity thereof, or by declaration of acceleration, call for redemption or
otherwise.

          “Officer” means the Chairman of the Board, the President, any Vice Chairman of the Board, any
Vice President, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, any Assistant Controller, the Secretary or any Assistant Secretary of a Person.

          “Officers’ Certificate” means a certificate signed by two Officers of a Person.

          “Opinion of Counsel” means a written opinion from legal counsel who is acceptable to the
Trustee. Such counsel may be an employee of or counsel to the Company or the Trustee.

          “Original Issue Discount Security” means any Security that provides for an amount less than
the principal amount thereof to be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 6.02.

          “Person” means any individual, corporation, partnership, limited liability company, joint
venture, incorporated or unincorporated association, joint stock company, trust, unincorporated
organization or government or other agency, instrumentality or political subdivision thereof or
other entity of any kind.

          “Place of Payment” means, with respect to the Securities of any series, the place or places
where the principal of, premium (if any) and interest on and any Additional Amounts with respect to
the Securities of that series are payable as specified in accordance with Section 2.01 subject to
the provisions of Section 4.02.

3

 

          “principal” of a Security means the principal of the Security plus, when appropriate, the
premium, if any, on the Security.

          “Redemption Date” means, with respect to any Security to be redeemed, the date fixed for such
redemption by or pursuant to this Indenture.

          “Redemption Price” means, with respect to any Security to be redeemed, the price at which it
is to be redeemed pursuant to this Indenture.

          “Responsible Officer” means any officer within the corporate trust department of the Trustee,
including any vice president, assistant vice president, assistant secretary, assistant treasurer,
trust officer or any other officer of the Trustee who customarily performs functions similar to
those performed by the Persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of such person’s knowledge of and familiarity with the
particular subject and who shall have direct responsibility for the administration of this
Indenture.

          “Rule 144A Securities” means Securities of a series designated pursuant to Section 2.01 as
entitled to the benefits of Section 4.03(b).

          “SEC” means the Securities and Exchange Commission.

          “Securities” has the meaning stated in the preamble of this Indenture and more particularly
means any Securities authenticated and delivered under this Indenture.

          “Security Custodian” means, with respect to Securities of a series issued in global form, the
Trustee for Securities of such series, as custodian with respect to the Securities of such series,
or any successor entity thereto.

          “Significant Subsidiary” means a Subsidiary of the Company that is a “significant subsidiary”
of the Company as such term is defined in Rule 1-02(w) of Regulation S-X as of the date hereof.

          “Stated Maturity” means, when used with respect to any Security or any installment of
principal thereof or interest thereon, the date specified in such Security as the fixed date on
which the principal of such Security or such installment of principal or interest is due and
payable.

          “Subsidiary” means a Person at least a majority of the outstanding voting stock of which is
owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the
Company and one or more other Subsidiaries. For the purposes of this definition, “voting stock”
means stock having voting power for the election of directors, whether at all times or only so long
as no senior class of stock has such voting power by reason of any contingency.

          “Subsidiary Guarantors” means, with respect to any series of Securities, the Person or
Persons, if any, named in accordance with Section 2.01(9) as the “Subsidiary Guarantors” (i) in or
pursuant to a Board Resolution, and set forth, or determined in the manner provided, in an
Officers’ Certificate of the Company or in a Company Order, or (ii) in an

4

 

indenture supplemental hereto establishing the terms of such series of Securities until a
successor Person or Persons shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter “Subsidiary Guarantor” with respect to such series of Securities shall
mean such successor Person or Persons, in any case until the Guarantee is released pursuant to the
provisions of Article X. If a series of Securities does not have any Subsidiary Guarantors, all
references in this Indenture to the Subsidiary Guarantors shall be ignored with respect to such
series of Securities.

          “TIA” means the Trust Indenture Act of 1939, as amended, as in effect on the date hereof.

          “Trustee” means the Person named as such above until a successor replaces it in accordance
with the applicable provisions of this Indenture, and thereafter “Trustee” means each Person who is
then a Trustee hereunder, and if at any time there is more than one such Person, “Trustee” as used
with respect to the Securities of any series means the Trustee with respect to Securities of that
series.

          “United States” means the United States of America (including the States and the District of
Columbia) and its territories and possessions, which include Puerto Rico, the U.S. Virgin Islands,
Guam, American Samoa, Wake Island and the Northern Mariana Islands.

          “U.S. Government Obligations” means Government Obligations with respect to Securities payable
in Dollars.

5

 

SECTION 1.02 Other Definitions.

	 	 	 	 	 
	 	 	Defined
	Term	 	in Section
	“Agent Members”
	 	 	2.17	 
	“Bankruptcy Custodian”
	 	 	6.01	 
	“Conversion Event”
	 	 	6.01	 
	“covenant defeasance”
	 	 	8.01	 
	“Event of Default”
	 	 	6.01	 
	“Exchange Rate”
	 	 	2.11	 
	“Judgment Currency”
	 	 	6.10	 
	“legal defeasance”
	 	 	8.01	 
	“mandatory sinking fund payment”
	 	 	3.09	 
	“optional sinking fund payment”
	 	 	3.09	 
	“Paying Agent”
	 	 	2.05	 
	“Registrar”
	 	 	2.05	 
	“Required Currency”
	 	 	6.10	 
	“Successor”
	 	 	5.01	 

SECTION 1.03 Incorporation by Reference of Trust Indenture Act.

          Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by
reference in and made a part of this Indenture (and if the Indenture is not qualified under the TIA
at that time, as if it were so qualified unless otherwise provided). The following TIA terms used
in this Indenture have the following meanings:

          “Commission” means the SEC.

          “indenture securities” means the Securities.

          “indenture security holder” means a Holder.

          “indenture to be qualified” means this Indenture.

          “indenture trustee” or “institutional trustee” means the Trustee.

          “obligor” on the indenture securities means the Company, any Subsidiary Guarantor or any other
obligor on the Securities.

          All terms used in this Indenture that are defined by the TIA, defined by a TIA reference to
another statute or defined by an SEC rule under the TIA have the meanings so assigned to them.

6

 

SECTION 1.04 Rules of Construction.

          Unless the context otherwise requires:

	 	(1)	 	a term has the meaning assigned to it;
	 
	 	(2)	 	an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
	 
	 	(3)	 	“or” is not exclusive;
	 
	 	(4)	 	words in the singular include the plural, and in the plural
include the singular;
	 
	 	(5)	 	provisions apply to successive events and transactions; and
	 
	 	(6)	 	all references in this instrument to Articles and Sections are
references to the corresponding Articles and Sections in and of this
instrument.

ARTICLE II

THE SECURITIES

SECTION 2.01 Amount Unlimited; Issuable in Series.

          The aggregate principal amount of Securities that may be authenticated and delivered under
this Indenture is unlimited.

          The Securities may be issued in one or more series. There shall be established in or pursuant
to a Board Resolution, and set forth, or determined in the manner provided, in an Officers’
Certificate of the Company or in a Company Order, or established in one or more indentures
supplemental hereto, prior to the issuance of Securities of any series:

     (1) the title of the Securities of the series (which shall distinguish the Securities
of the series from the Securities of all other series);

     (2) if there is to be a limit, the limit upon the aggregate principal amount of the
Securities of the series that may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Securities of the series pursuant to Section 2.08, 2.09,
2.12, 2.17, 3.07 or 9.05 and except for any Securities which, pursuant to Section 2.04 or
2.17, are deemed never to have been authenticated and delivered hereunder); provided,
however, that unless otherwise provided in the terms of the series, the authorized aggregate
principal amount of such series may be increased before or after the issuance of any
Securities of the series by a Board Resolution (or action pursuant to a Board Resolution) to
such effect;

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     (3) whether any Securities of the series are to be issuable initially in temporary
global form and whether any Securities of the series are to be issuable in permanent global
form, as Global Securities or otherwise, and, if so, whether beneficial owners of interests
in any such Global Security may exchange such interests for Securities of such series and of
like tenor of any authorized form and denomination and the circumstances under which any
such exchanges may occur, if other than in the manner provided in Section 2.17, and the
initial Depositary and Security Custodian, if any, for any Global Security or Securities of
such series;

     (4) the manner in which any interest payable on a temporary Global Security on any
Interest Payment Date will be paid if other than in the manner provided in Section 2.14;

     (5) the date or dates on which the principal of and premium (if any) on the Securities
of the series is payable or the method of determination thereof;

     (6) the rate or rates, or the method of determination thereof, at which the Securities
of the series shall bear interest, if any, whether and under what circumstances Additional
Amounts with respect to such Securities shall be payable, the date or dates from which such
interest shall accrue, the Interest Payment Dates on which such interest shall be payable
and the record date for the interest payable on any Securities on any Interest Payment Date,
or if other than provided herein, the Person to whom any interest on Securities of the
series shall be payable;

     (7) the place or places where, subject to the provisions of Section 4.02, the principal
of, premium (if any) and interest on and any Additional Amounts with respect to the
Securities of the series shall be payable;

     (8) the period or periods within which, the price or prices (whether denominated in
cash, securities or otherwise) at which and the terms and conditions upon which Securities
of the series may be redeemed, in whole or in part, at the option of the Company, if the
Company is to have that option, and the manner in which the Company must exercise any such
option, if different from those set forth herein;

     (9) whether Securities of the series are entitled to the benefits of any Guarantee of
any Subsidiary Guarantor pursuant to this Indenture, the identity of any such Subsidiary
Guarantors and any terms of such Guarantee with respect to the Securities of the series in
addition to those set forth in Article X, or any exceptions to or changes to those set forth
in Article X;

     (10) the obligation, if any, of the Company to redeem, purchase or repay Securities of
the series pursuant to any sinking fund or analogous provisions or at the option of a Holder
thereof and the period or periods within which, the price or prices (whether denominated in
cash, securities or otherwise) at which and the terms and conditions upon which Securities
of the series shall be redeemed, purchased or repaid in whole or in part pursuant to such
obligation;

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     (11) if other than denominations of $1,000 and any integral multiple thereof, the
denomination in which any Securities of that series shall be issuable;

     (12) if other than Dollars, the currency or currencies (including composite currencies)
or the form, including equity securities, other debt securities (including Securities),
warrants or any other securities or property of the Company or any other Person, in which
payment of the principal of, premium (if any) and interest on and any Additional Amounts
with respect to the Securities of the series shall be payable;

     (13) if the principal of, premium (if any) or interest on or any Additional Amounts
with respect to the Securities of the series are to be payable, at the election of the
Company or a Holder thereof, in a currency or currencies (including composite currencies)
other than that in which the Securities are stated to be payable, the currency or currencies
(including composite currencies) in which payment of the principal of, premium (if any) and
interest on and any Additional Amounts with respect to Securities of such series as to which
such election is made shall be payable, and the periods within which and the terms and
conditions upon which such election is to be made;

     (14) if the amount of payments of principal of, premium (if any) and interest on and
any Additional Amounts with respect to the Securities of the series may be determined with
reference to any commodities, currencies or indices, values, rates or prices or any other
index or formula, the manner in which such amounts shall be determined;

     (15) if other than the entire principal amount thereof, the portion of the principal
amount of Securities of the series that shall be payable upon declaration of acceleration of
the Maturity thereof pursuant to Section 6.02;

     (16) any additional means of satisfaction and discharge of this Indenture and any
additional conditions or limitations to discharge with respect to Securities of the series
and the related Guarantees, if any, pursuant to Article VIII or any modifications of or
deletions from such conditions or limitations;

     (17) any deletions or modifications of or additions to the Events of Default set forth
in Section 6.01 or covenants of the Company or any Subsidiary Guarantor set forth in Article
IV pertaining to the Securities of the series;

     (18) any restrictions or other provisions with respect to the transfer or exchange of
Securities of the series, which may amend, supplement, modify or supersede those contained
in this Article II;

     (19) if the Securities of the series are to be convertible into or exchangeable for
capital stock, other debt securities (including Securities), warrants, other equity
securities or any other securities or property of the Company, any Subsidiary Guarantor or
any other Person, at the option of the Company or the Holder or upon the occurrence of any
condition or event, the terms and conditions for such conversion or exchange;

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     (20) if the Securities of the series are to be entitled to the benefit of
Section 4.03(b) (and accordingly constitute Rule 144A Securities), that fact; and

     (21) any other terms of the series (which terms shall not be prohibited by the
provisions of this Indenture).

          All Securities of any one series shall be substantially identical except as to denomination
and except as may otherwise be provided in or pursuant to the Board Resolution referred to above
and (subject to Section 2.03) set forth, or determined in the manner provided, in the Officers’
Certificate or Company Order referred to above or in any such indenture supplemental hereto.

          If any of the terms of the series are established by action taken pursuant to a Board
Resolution, a copy of an appropriate record of such action, together with such Board Resolution,
shall be set forth in an Officers’ Certificate or certified by the Secretary or an Assistant
Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers’
Certificate or Company Order setting forth the terms of the series.

SECTION 2.02 Denominations.

          The Securities of each series shall be issuable in such denominations as shall be specified as
contemplated by Section 2.01. In the absence of any such provisions with respect to the Securities
of any series, the Securities of such series denominated in Dollars shall be issuable in
denominations of $1,000 and any integral multiples thereof.

SECTION 2.03 Forms Generally.

          The Securities of each series shall be in fully registered form and in substantially such form
or forms (including temporary or permanent global form) established by or pursuant to a Board
Resolution or in one or more indentures supplemental hereto. The Securities may have notations,
legends or endorsements required by law, securities exchange rule, the Company’s certificate of
incorporation, bylaws or other similar governing documents, agreements to which the Company is
subject, if any, or usage (provided that any such notation, legend or endorsement is in a form
acceptable to the Company). A copy of the Board Resolution establishing the form or forms of
Securities of any series shall be delivered to the Trustee at or prior to the delivery of the
Company Order contemplated by Section 2.04 for the authentication and delivery of such Securities.

          The definitive Securities of each series shall be printed, lithographed or engraved on steel
engraved borders or may be produced in any other manner, all as determined by the Officers
executing such Securities, as evidenced by their execution thereof.

          The Trustee’s certificate of authentication shall be in substantially the following form:

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          “This is one of the Securities of the series designated therein referred to in the
within-mentioned Indenture.

	 	 	 	 	 
	 	Wells Fargo Bank, National Association, as Trustee

 	 
	 	By:  	 	 
	 	 	Authorized Signatory”. 	 
	 	 	 	 
	 

SECTION 2.04 Execution, Authentication, Delivery and Dating.

          Two Officers of the Company shall sign the Securities on behalf of the Company and, with
respect to any related Guarantee, an Officer of each Subsidiary Guarantor shall sign the Notation
of Guarantee on behalf of such Subsidiary Guarantor, in each case by manual or facsimile signature.
If an Officer of the Company whose signature is on a Security no longer holds that office at the
time the Security is authenticated, the Security shall be valid nevertheless.

          A Security shall not be entitled to any benefit under this Indenture or the related
Guarantees, if any, or be valid or obligatory for any purpose until authenticated by the manual
signature of an authorized signatory of the Trustee, which signature shall be conclusive evidence
that the Security has been authenticated under this Indenture. Notwithstanding the foregoing, if
any Security has been authenticated and delivered hereunder but never issued and sold by the
Company, and the Company delivers such Security to the Trustee for cancellation as provided in
Section 2.13, together with a written statement (which need not comply with Section 11.05 and need
not be accompanied by an Opinion of Counsel) stating that such Security has never been issued and
sold by the Company, for all purposes of this Indenture such Security shall be deemed never to have
been authenticated and delivered hereunder and shall never be entitled to the benefits of this
Indenture or the related Guarantees, if any.

          At any time and from time to time after the execution and delivery of this Indenture, the
Company may deliver Securities of any series executed by the Company to the Trustee for
authentication, and the Trustee shall authenticate and deliver such Securities for original issue
upon a Company Order for the authentication and delivery of such Securities or pursuant to such
procedures acceptable to the Trustee as may be specified from time to time by Company Order. Such
order shall specify the amount of the Securities to be authenticated, the date on which the
original issue of Securities is to be authenticated, the name or names of the initial Holder or
Holders and any other terms of the Securities of such series not otherwise determined. If provided
for in such procedures, such Company Order may authorize (1) authentication and delivery of
Securities of such series for original issue from time to time, with certain terms (including,
without limitation, the Maturity dates or dates, original issue date or dates and interest rate or
rates) that differ from Security to Security and (2) may authorize authentication and delivery
pursuant to oral or electronic instructions from the Company or its duly authorized agent, which
instructions shall be promptly confirmed in writing.

          If the form or terms of the Securities of the series have been established in or pursuant to
one or more Board Resolutions as permitted by Section 2.01, in authenticating such Securities, and
accepting the additional responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive (in addition to the Company Order referred to

11

 

above and the other documents required by Section 11.04), and (subject to Section 7.01) shall
be fully protected in relying upon:

     (a) an Officers’ Certificate setting forth the Board Resolution and, if applicable, an
appropriate record of any action taken pursuant thereto, as contemplated by the last
paragraph of Section 2.01; and

     (b) an Opinion of Counsel to the effect that:

     (i) the form of such Securities has been established in conformity with the
provisions of this Indenture;

     (ii) the terms of such Securities have been established in conformity with the
provisions of this Indenture; and

     (iii) that such Securities and the related Guarantees, if any, when
authenticated and delivered by the Trustee and issued by the Company in the manner
and subject to any conditions specified in such Opinion of Counsel, will constitute
valid and binding obligations of the Company and the Subsidiary Guarantors,
respectively, enforceable against the Company and the Subsidiary Guarantors,
respectively, in accordance with their respective terms, except as the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws in effect
from time to time affecting the rights of creditors generally, and the application
of general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

          If all the Securities of any series are not to be issued at one time, it shall not be
necessary to deliver an Officers’ Certificate and Opinion of Counsel at the time of issuance of
each such Security, but such Officers’ Certificate and Opinion of Counsel shall be delivered at or
before the time of issuance of the first Security of the series to be issued.

          The Trustee shall not be required to authenticate such Securities if the issuance of such
Securities pursuant to this Indenture would affect the Trustee’s own rights, duties or immunities
under the Securities and this Indenture or otherwise in a manner not reasonably acceptable to the
Trustee.

          The Trustee may appoint an authenticating agent acceptable to the Company to authenticate
Securities. Unless limited by the terms of such appointment, an authenticating agent may
authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An authenticating agent has
the same rights as an Agent to deal with the Company, any Subsidiary Guarantor or any other
Affiliate of the Company.

          Each Security shall be dated the date of its authentication.

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SECTION 2.05 Registrar and Paying Agent.

          The Company shall maintain an office or agency for each series of Securities where Securities
of such series may be presented for registration of transfer or exchange (“Registrar”) and an
office or agency where Securities of such series may be presented for payment (“Paying Agent”).
The Registrar shall keep a register of the Securities of such series and of their transfer and
exchange. The Company may appoint one or more co-registrars and one or more additional paying
agents. The term “Registrar” includes any co-registrar and the term “Paying Agent” includes any
additional paying agent.

          The Company shall enter into an appropriate agency agreement with any Registrar or Paying
Agent not a party to this Indenture. The agreement shall implement the provisions of this
Indenture that relate to such Agent. The Company shall notify the Trustee of the name and address
of any Agent not a party to this Indenture. The Company may change any Paying Agent or Registrar
without notice to any Holder. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any Subsidiary may act as
Paying Agent or Registrar.

          The Company initially appoints the Trustee as Registrar and Paying Agent.

SECTION 2.06 Paying Agent to Hold Money in Trust.

          The Company shall require each Paying Agent other than the Trustee to agree in writing that
the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the
Paying Agent for the payment of principal of, premium, if any, or interest on or any Additional
Amounts with respect to Securities and will notify the Trustee of any default by the Company in
making any such payment. While any such default continues, the Trustee may require a Paying Agent
to pay all money held by it to the Trustee and to account for any funds disbursed. The Company at
any time may require a Paying Agent to pay all money held by it to the Trustee and to account for
any funds disbursed. Upon payment over to the Trustee and upon accounting for any funds disbursed,
the Paying Agent (if other than the Company, a Subsidiary Guarantor or another Subsidiary) shall
have no further liability for the money. If the Company or a Subsidiary acts as Paying Agent, it
shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by
it as Paying Agent. Each Paying Agent shall otherwise comply with TIA § 317(b).

SECTION 2.07 Holder Lists.

          The Trustee shall preserve in as current a form as is reasonably practicable the most recent
list available to it of the names and addresses of Holders and shall otherwise comply with TIA
§ 312(a). If the Trustee is not the Registrar with respect to a series of Securities, the Company
shall furnish to the Trustee at least five Business Days before each Interest Payment Date with
respect to such series of Securities, and at such other times as the Trustee may request in
writing, a list in such form and as of such date as the Trustee may reasonably require of the names
and addresses of Holders of such series, and the Company shall otherwise comply with TIA § 312(a).

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SECTION 2.08 Transfer and Exchange.

          Except as set forth in Section 2.17 or as may be provided pursuant to Section 2.01:

          When Securities of any series are presented to the Registrar with the request to register the
transfer of such Securities or to exchange such Securities for an equal principal amount of
Securities of the same series of like tenor and of other authorized denominations, the Registrar
shall register the transfer or make the exchange as requested if its requirements and the
requirements of this Indenture for such transactions are met; provided, however, that the
Securities presented or surrendered for registration of transfer or exchange shall be duly endorsed
or accompanied by a written instruction of transfer in form reasonably satisfactory to the
Registrar duly executed by the Holder thereof or by his attorney, duly authorized in writing, on
which instruction the Registrar can rely.

          To permit registrations of transfers and exchanges, the Company shall execute and the Trustee
shall authenticate Securities at the Registrar’s written request and submission of the Securities
or Global Securities. No service charge shall be made to a Holder for any registration of transfer
or exchange (except as otherwise expressly permitted herein), but the Company may require payment
of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection
therewith (other than such transfer tax or similar governmental charge payable upon exchanges
pursuant to Section 2.12, 3.07 or 9.05). The Trustee shall authenticate Securities in accordance
with the provisions of Section 2.04. Notwithstanding any other provisions of this Indenture to the
contrary, the Company shall not be required to register the transfer or exchange of (a) any
Security selected for redemption in whole or in part pursuant to Article III, except the unredeemed
portion of any Security being redeemed in part, or (b) any Security during the period beginning 15
Business Days prior to the mailing of notice of any offer to repurchase Securities of the series
required pursuant to the terms thereof or of redemption of Securities of a series to be redeemed
and ending at the close of business on the day of mailing.

SECTION 2.09 Replacement Securities.

          If any mutilated Security is surrendered to the Trustee, or if the Holder of a Security claims
that the Security has been destroyed, lost or stolen and the Company and the Trustee receive
evidence to their satisfaction of the destruction, loss or theft of such Security, the Company
shall issue and the Trustee shall authenticate a replacement Security of the same series if the
Trustee’s requirements are met. If any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may, instead of issuing
a new Security, pay such Security. If required by the Trustee, any Subsidiary Guarantor or the
Company, such Holder must furnish an indemnity bond that is sufficient in the judgment of the
Trustee and the Company to protect the Company, each Subsidiary Guarantor, the Trustee, any Agent
or any authenticating agent from any loss that any of them may suffer if a Security is replaced.
The Company and the Trustee may charge a Holder for their expenses in replacing a Security.

          Every replacement Security is an additional obligation of the Company.

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SECTION 2.10 Outstanding Securities.

          The Securities outstanding at any time are all the Securities authenticated by the Trustee
except for those canceled by it, those delivered to it for cancellation, those reductions in the
interest in a Global Security effected by the Trustee hereunder and those described in this
Section 2.10 as not outstanding.

          If a Security is replaced pursuant to Section 2.09, it ceases to be outstanding unless the
Trustee receives proof satisfactory to it that the replaced Security is held by a bona fide
purchaser.

          If the principal amount of any Security is considered paid under Section 4.01, it ceases to be
outstanding and interest on it ceases to accrue.

          A Security does not cease to be outstanding because the Company, a Subsidiary Guarantor or
another Affiliate of the Company or an Affiliate of a Subsidiary Guarantor holds the Security.

SECTION 2.11 Original Issue Discount, Foreign-Currency Denominated and Treasury Securities.

          In determining whether the Holders of the required principal amount of Securities have
concurred in any direction, amendment, supplement, waiver or consent, (a) the principal amount of
an Original Issue Discount Security shall be the principal amount thereof that would be due and
payable as of the date of such determination upon acceleration of the Maturity thereof pursuant to
Section 6.02, (b) the principal amount of a Security denominated in a foreign currency shall be the
Dollar equivalent, as determined by the Company by reference to the noon buying rate in The City of
New York for cable transfers for such currency, as such rate is certified for customs purposes by
the Federal Reserve Bank of New York (the “Exchange Rate”) on the date of original issuance of such
Security, of the principal amount (or, in the case of an Original Issue Discount Security, the
Dollar equivalent, as determined by the Company by reference to the Exchange Rate on the date of
original issuance of such Security, of the amount determined as provided in (a) above), of such
Security and (c) Securities owned by the Company, a Subsidiary Guarantor or any other obligor upon
the Securities or any Affiliate of the Company or a Subsidiary Guarantor or of such other obligor
shall be disregarded, except that, for the purpose of determining whether the Trustee shall be
protected in relying upon any such direction, amendment, supplement, waiver or consent, only
Securities that a Responsible Officer of the Trustee actually knows are so owned shall be so
disregarded.

SECTION 2.12 Temporary Securities.

          Until definitive Securities of any series are ready for delivery, the Company may prepare and
the Trustee shall authenticate temporary Securities. Temporary Securities shall be substantially
in the form of definitive Securities, but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company shall prepare and
the Trustee shall authenticate definitive Securities in exchange for temporary Securities. Until
so exchanged, the temporary Securities shall in all respects be entitled to the same benefits under
this Indenture as definitive Securities.

15

 

SECTION 2.13 Cancellation.

          The Company or any Subsidiary Guarantor at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Securities
surrendered to them for registration of transfer, exchange, payment or redemption or for credit
against any sinking fund payment. The Trustee shall cancel all Securities surrendered for
registration of transfer, exchange, payment, redemption, replacement or cancellation or for credit
against any sinking fund. Unless the Company shall direct in writing that canceled Securities be
returned to it, after written notice to the Company all canceled Securities held by the Trustee
shall be disposed of in accordance with the usual disposal procedures of the Trustee, and the
Trustee shall maintain a record of their disposal. The Company may not issue new Securities to
replace Securities that have been paid or that have been delivered to the Trustee for cancellation.

SECTION 2.14 Payments; Defaulted Interest.

          Unless otherwise provided as contemplated by Section 2.01, interest (except defaulted
interest) on any Security that is payable, and is punctually paid or duly provided for, on any
Interest Payment Date shall be paid to the Persons who are registered Holders of that Security at
the close of business on the record date next preceding such Interest Payment Date, even if such
Securities are canceled after such record date and on or before such Interest Payment Date. The
Holder must surrender a Security to a Paying Agent to collect principal payments. Unless otherwise
provided with respect to the Securities of any series, the Company will pay the principal of,
premium (if any) and interest on and any Additional Amounts with respect to the Securities in
Dollars. Such amounts shall be payable at the offices of the Trustee or any Paying Agent, provided
that at the option of the Company, the Company may pay such amounts (1) by wire transfer with
respect to Global Securities or (2) by check payable in such money mailed to a Holder’s registered
address with respect to any Securities.

          If the Company defaults in a payment of interest on the Securities of any series, the Company
shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest on the
defaulted interest, in each case at the rate provided in the Securities of such series and in
Section 4.01. The Company may pay the defaulted interest to the Persons who are Holders on a
subsequent special record date. At least 15 days before any special record date selected by the
Company, the Company (or the Trustee, in the name of and at the expense of the Company upon 20
days’ prior written notice from the Company setting forth such special record date and the interest
amount to be paid) shall mail to Holders a notice that states the special record date, the related
payment date and the amount of such interest to be paid.

SECTION 2.15 Persons Deemed Owners.

          The Company, the Subsidiary Guarantors, the Trustee, any Agent and any authenticating agent
may treat the Person in whose name any Security is registered as the owner of such Security for the
purpose of receiving payments of principal of, premium (if any) or interest on or any Additional
Amounts with respect to such Security and for all other purposes. None of the Company, any
Subsidiary Guarantor, the Trustee, any Agent or any authenticating agent shall be affected by any
notice to the contrary.

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SECTION 2.16 Computation of Interest.

          Except as otherwise specified as contemplated by Section 2.01 for Securities of any series,
interest on the Securities of each series shall be computed on the basis of a year comprising
twelve 30-day months.

SECTION 2.17 Global Securities; Book-Entry Provisions.

          If Securities of a series are issuable in global form as a Global Security, as contemplated by
Section 2.01, then, notwithstanding clause (10) of Section 2.01 and the provisions of Section 2.02,
any such Global Security shall represent such of the outstanding Securities of such series as shall
be specified therein and may provide that it shall represent the aggregate amount of outstanding
Securities from time to time endorsed thereon and that the aggregate amount of outstanding
Securities represented thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges, transfers or redemptions. Any endorsement of a Global Security to reflect the
amount, or any increase or decrease in the amount, of outstanding Securities represented thereby
shall be made by the Trustee (i) in such manner and upon instructions given by such Person or
Persons as shall be specified in such Security or in a Company Order to be delivered to the Trustee
pursuant to Section 2.04 or (ii) otherwise in accordance with written instructions or such other
written form of instructions as is customary for the Depositary for such Security, from such
Depositary or its nominee on behalf of any Person having a beneficial interest in such Global
Security. Subject to the provisions of Section 2.04 and, if applicable, Section 2.12, the Trustee
shall deliver and redeliver any Security in permanent global form in the manner and upon
instructions given by the Person or Persons specified in such Security or in the applicable Company
Order. With respect to the Securities of any series that are represented by a Global Security, the
Company and the Subsidiary Guarantors authorize the execution and delivery by the Trustee of a
letter of representations or other similar agreement or instrument in the form customarily provided
for by the Depositary appointed with respect to such Global Security. Any Global Security may be
deposited with the Depositary or its nominee, or may remain in the custody of the Trustee or the
Security Custodian therefor pursuant to a FAST Balance Certificate Agreement or similar agreement
between the Trustee and the Depositary. If a Company Order has been, or simultaneously is,
delivered, any instructions by the Company with respect to endorsement or delivery or redelivery of
a Security in global form shall be in writing but need not comply with Section 11.05 and need not
be accompanied by an Opinion of Counsel.

          Members of, or participants in, the Depositary (“Agent Members”) shall have no rights under
this Indenture with respect to any Global Security held on their behalf by the Depositary, or the
Trustee or the Security Custodian as its custodian, or under such Global Security, and the
Depositary may be treated by the Company, any Subsidiary Guarantor, the Trustee or the Security
Custodian and any agent of the Company, any Subsidiary Guarantor, the Trustee or the Security
Custodian as the absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, (i) the registered holder of a Global Security of a series may grant
proxies and otherwise authorize any Person, including Agent Members and Persons that may hold
interests through Agent Members, to take any action that a Holder of Securities of such series is
entitled to take under this Indenture or the Securities of such series and (ii) nothing herein
shall prevent the Company, any Subsidiary Guarantor, the Trustee or the

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Security Custodian, or any agent of the Company, any Subsidiary Guarantor, the Trustee or the
Security Custodian, from giving effect to any written certification, proxy or other authorization
furnished by the Depositary or shall impair, as between the Depositary and its Agent Members, the
operation of customary practices governing the exercise of the rights of a beneficial owner of any
Security.

          Notwithstanding Section 2.08, and except as otherwise provided pursuant to Section 2.01:
Transfers of a Global Security shall be limited to transfers of such Global Security in whole, but
not in part, to the Depositary, its successors or their respective nominees. Interests of
beneficial owners in a Global Security may be transferred in accordance with the rules and
procedures of the Depositary. Securities shall be transferred to all beneficial owners in exchange
for their beneficial interests in a Global Security if, and only if, either (1) the Depositary
notifies the Company that it is unwilling or unable to continue as Depositary for the Global
Security and a successor Depositary is not appointed by the Company within 90 days of such notice,
(2) an Event of Default has occurred with respect to such series and is continuing and the
Registrar has received a request from the Depositary to issue Securities in lieu of all or a
portion of the Global Security (in which case the Company shall deliver Securities within 30 days
of such request) or (3) the Company determines not to have the Securities represented by a Global
Security.

          In connection with any transfer of a portion of the beneficial interests in a Global Security
to beneficial owners pursuant to this Section 2.17, the Registrar shall reflect on its books and
records the date and a decrease in the principal amount of the Global Security in an amount equal
to the principal amount of the beneficial interests in the Global Security to be transferred, and
the Company shall execute, and the Trustee upon receipt of a Company Order for the authentication
and delivery of Securities shall authenticate and deliver, one or more Securities of the same
series of like tenor and amount.

          In connection with the transfer of all the beneficial interests in a Global Security to
beneficial owners pursuant to this Section 2.17, the Global Security shall be deemed to be
surrendered to the Trustee for cancellation, and the Company shall execute, and the Trustee shall
authenticate and deliver, to each beneficial owner identified by the Depositary in exchange for its
beneficial interests in the Global Security, an equal aggregate principal amount of Securities of
authorized denominations.

          None of the Company, any Subsidiary Guarantor or the Trustee will have any responsibility or
liability for any aspect of the records relating to, or payments made on account of, Securities by
the Depositary, or for maintaining, supervising or reviewing any records of the Depositary relating
to such Securities. None of the Company, any Subsidiary Guarantor or the Trustee shall be liable
for any delay by the related Global Security Holder or the Depositary in identifying the beneficial
owners, and each such Person may conclusively rely on, and shall be protected in relying on,
instructions from such Global Security Holder or the Depositary for all purposes (including with
respect to the registration and delivery, and the respective principal amounts, of the Securities
to be issued).

          The provisions of the last sentence of the third paragraph of Section 2.04 shall apply to any
Global Security if such Global Security was never issued and sold by the Company and the Company or
a Subsidiary Guarantor delivers to the Trustee the Global Security together

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with written instructions (which need not comply with Section 11.05 and need not be
accompanied by an Opinion of Counsel) with regard to the cancellation or reduction in the principal
amount of Securities represented thereby, together with the written statement contemplated by the
last sentence of the third paragraph of Section 2.04.

          Notwithstanding the provisions of Sections 2.03 and 2.14, unless otherwise specified as
contemplated by Section 2.01, payment of principal of, premium (if any) and interest on and any
Additional Amounts with respect to any Global Security shall be made to the Person or Persons
specified therein.

ARTICLE III

REDEMPTION

SECTION 3.01 Applicability of Article.

          Securities of any series that are redeemable before their Stated Maturity shall be redeemable
in accordance with their terms and (except as otherwise specified as contemplated by Section 2.01
for Securities of any series) in accordance with this Article III.

SECTION 3.02 Notice to the Trustee.

          If the Company elects to redeem Securities of any series pursuant to this Indenture, it shall
notify the Trustee of the Redemption Date and the principal amount of Securities of such series to
be redeemed. The Company shall so notify the Trustee at least 45 days before the Redemption Date
(unless a shorter notice shall be satisfactory to the Trustee) by delivering to the Trustee an
Officers’ Certificate stating that such redemption will comply with the provisions of this
Indenture and of the Securities of such series. Any such notice may be canceled at any time prior
to the mailing of such notice of such redemption to any Holder and shall thereupon be void and of
no effect. A redemption or notice thereof may be subject to one or more conditions.

SECTION 3.03 Selection of Securities To Be Redeemed.

          If less than all the Securities of any series are to be redeemed (unless all of the Securities
of such series of a specified tenor are to be redeemed), the particular Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the Trustee from the
outstanding Securities of such series (and tenor) not previously called for redemption, either at
random, by lot or by such other method as the Trustee shall deem fair and appropriate and that may
provide for the selection for redemption of portions (equal to the minimum authorized denomination
for Securities of that series or any integral multiple thereof) of the principal amount of
Securities of such series of a denomination larger than the minimum authorized denomination for
Securities of that series or of the principal amount of Global Securities of such series.

          The Trustee shall promptly notify the Company and the Registrar in writing of the Securities
selected for redemption and, in the case of any Securities selected for partial redemption, the
principal amount thereof to be redeemed.

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          For purposes of this Indenture, unless the context otherwise requires, all provisions relating
to redemption of Securities shall relate, in the case of any of the Securities redeemed or to be
redeemed only in part, to the portion of the principal amount thereof which has been or is to be
redeemed.

SECTION 3.04 Notice of Redemption.

          Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than
30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed,
at the address of such Holder appearing in the register of Securities maintained by the Registrar.

          All notices of redemption shall identify the Securities to be redeemed and shall state:

     (1) the Redemption Date;

     (2) the Redemption Price;

     (3) that, unless the Company and the Subsidiary Guarantors default in making the
redemption payment, interest on Securities called for redemption ceases to accrue on and
after the Redemption Date, and the only remaining right of the Holders of such Securities is
to receive payment of the Redemption Price upon surrender to the Paying Agent of the
Securities redeemed;

     (4) if any Security is to be redeemed in part, the portion of the principal amount
thereof to be redeemed and that on and after the Redemption Date, upon surrender for
cancellation of such Security to the Paying Agent, a new Security or Securities in the
aggregate principal amount equal to the unredeemed portion thereof will be issued without
charge to the Holder;

     (5) that Securities called for redemption must be surrendered to the Paying Agent to
collect the Redemption Price and the name and address of the Paying Agent;

     (6) that the redemption is for a sinking or analogous fund, if such is the case;

     (7) the CUSIP number, if any, relating to such Securities; and

     (8) if the redemption or notice thereof is subject to one or more conditions, a
statement to such effect and the condition or conditions precedent.

          Notice of redemption of Securities to be redeemed at the election of the Company shall be
given by the Company or, at the Company’s written request, by the Trustee in the name and at the
expense of the Company.

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SECTION 3.05 Effect of Notice of Redemption.

          Once notice of redemption is mailed, unless the redemption or notice thereof is subject to one
or more conditions as specified in the notice, Securities called for redemption become due and
payable on the Redemption Date and at the Redemption Price. Upon surrender to the Paying Agent,
such Securities called for redemption shall be paid at the Redemption Price, but interest
installments whose maturity is on or prior to such Redemption Date will be payable on the relevant
Interest Payment Dates to the Holders of record at the close of business on the relevant record
dates specified pursuant to Section 2.01.

SECTION 3.06 Deposit of Redemption Price.

          On or prior to 11:00 a.m., New York City time, on any Redemption Date, the Company or a
Subsidiary Guarantor shall deposit with the Trustee or the Paying Agent (or, if the Company or a
Subsidiary Guarantor is acting as the Paying Agent, segregate and hold in trust as provided in
Section 2.06) an amount of money in same day funds sufficient to pay the Redemption Price of, and
(except if the Redemption Date shall be an Interest Payment Date) accrued interest on and any
Additional Amounts with respect to, the Securities or portions thereof which are to be redeemed on
that date, other than Securities or portions thereof called for redemption on that date which have
been delivered by the Company or a Subsidiary Guarantor to the Trustee for cancellation.

          If the Company or a Subsidiary Guarantor complies with the preceding paragraph, then, unless
the Company or the Subsidiary Guarantors default in the payment of such Redemption Price, interest
on the Securities to be redeemed will cease to accrue on and after the applicable Redemption Date,
whether or not such Securities are presented for payment, and the Holders of such Securities shall
have no further rights with respect to such Securities except for the right to receive the
Redemption Price upon surrender of such Securities. If any Security called for redemption shall
not be so paid upon surrender thereof for redemption, the principal, premium, if any, any
Additional Amounts, and, to the extent lawful, accrued interest thereon shall, until paid, bear
interest from the Redemption Date at the rate specified pursuant to Section 2.01 or provided in the
Securities or, in the case of Original Issue Discount Securities, such Securities’ yield to
maturity.

SECTION 3.07 Securities Redeemed or Purchased in Part.

          Upon surrender to the Paying Agent of a Security to be redeemed in part, the Company shall
execute and the Trustee shall authenticate and deliver to the Holder of such Security without
service charge a new Security or Securities, of the same series and of any authorized denomination
as requested by such Holder in aggregate principal amount equal to, and in exchange for, the
unredeemed portion of the principal of the Security so surrendered that is not redeemed.

SECTION 3.08 Purchase of Securities.

          Unless otherwise specified as contemplated by Section 2.01, the Company, any Subsidiary
Guarantor or any Affiliate of the Company or any Subsidiary Guarantor may, subject to applicable
law, at any time purchase or otherwise acquire Securities in the open market or by

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private agreement. Any such acquisition shall not operate as or be deemed for any purpose to
be a redemption of the indebtedness represented by such Securities. Any Securities purchased or
acquired by the Company or a Subsidiary Guarantor may be delivered to the Trustee and, upon such
delivery, the indebtedness represented thereby shall be deemed to be satisfied. Section 2.13 shall
apply to all Securities so delivered.

SECTION 3.09 Mandatory and Optional Sinking Funds.

          The minimum amount of any sinking fund payment provided for by the terms of Securities of any
series is herein referred to as a “mandatory sinking fund payment,” and any payment in excess of
such minimum amount provided for by the terms of Securities of any series is herein referred to as
an “optional sinking fund payment.” Unless otherwise provided by the terms of Securities of any
series, the cash amount of any sinking fund payment may be subject to reduction as provided in
Section 3.10. Each sinking fund payment shall be applied to the redemption of Securities of any
series as provided for by the terms of Securities of such series and by this Article III.

SECTION 3.10 Satisfaction of Sinking Fund Payments with Securities.

          The Company or a Subsidiary Guarantor may deliver outstanding Securities of a series (other
than any previously called for redemption) and may apply as a credit Securities of a series that
have been redeemed either at the election of the Company pursuant to the terms of such Securities
or through the application of permitted optional sinking fund payments pursuant to the terms of
such Securities, in each case in satisfaction of all or any part of any sinking fund payment with
respect to the Securities of such series required to be made pursuant to the terms of such series
of Securities; provided that such Securities have not been previously so credited. Such Securities
shall be received and credited for such purpose by the Trustee at the Redemption Price specified in
such Securities for redemption through operation of the sinking fund and the amount of such sinking
fund payment shall be reduced accordingly.

SECTION 3.11 Redemption of Securities for Sinking Fund.

          Not less than 45 days prior (unless a shorter period shall be satisfactory to the Trustee) to
each sinking fund payment date for any series of Securities, the Company will deliver to the
Trustee an Officers’ Certificate of the Company specifying the amount of the next ensuing sinking
fund payment for that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any, which is to be
satisfied by delivery of or by crediting Securities of that series pursuant to Section 3.10 and
will also deliver or cause to be delivered to the Trustee any Securities to be so delivered.
Failure of the Company to timely deliver or cause to be delivered such Officers’ Certificate and
Securities specified in this paragraph, if any, shall not constitute a default but shall constitute
the election of the Company (i) that the mandatory sinking fund payment for such series due on the
next succeeding sinking fund payment date shall be paid entirely in cash without the option to
deliver or credit Securities of such series in respect thereof and (ii) that the Company will make
no optional sinking fund payment with respect to such series as provided in this Section.

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          If the sinking fund payment or payments (mandatory or optional or both) to be made in cash on
the next succeeding sinking fund payment date plus any unused balance of any preceding sinking fund
payments made in cash shall exceed $100,000 (or the Dollar equivalent thereof based on the
applicable Exchange Rate on the date of original issue of the applicable Securities) or a lesser
sum if the Company shall so request with respect to the Securities of any particular series, such
cash shall be applied on the next succeeding sinking fund payment date to the redemption of
Securities of such series at the sinking fund redemption price together with accrued interest to
the date fixed for redemption. If such amount shall be $100,000 (or the Dollar equivalent thereof
as aforesaid) or less and the Company makes no such request then it shall be carried over until a
sum in excess of $100,000 (or the Dollar equivalent thereof as aforesaid) is available. Not less
than 30 days before each such sinking fund payment date, the Trustee shall select the Securities to
be redeemed upon such sinking fund payment date in the manner specified in Section 3.03 and cause
notice of the redemption thereof to be given in the name of and at the expense of the Company in
the manner provided in Section 3.04. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Sections 3.05, 3.06 and 3.07.

ARTICLE IV

COVENANTS

SECTION 4.01 Payment of Securities.

          The Company shall pay the principal of, premium (if any) and interest on and any Additional
Amounts with respect to the Securities of each series on the dates and in the manner provided in
the Securities of such series and in this Indenture. Principal, premium, interest and any
Additional Amounts shall be considered paid on the date due if the Paying Agent (other than the
Company, a Subsidiary Guarantor or other Subsidiary) holds on that date money deposited by the
Company or a Subsidiary Guarantor designated for and sufficient to pay all principal, premium,
interest and any Additional Amounts then due.

          The Company shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium (if any), at a rate equal to the then applicable
interest rate on the Securities to the extent lawful; and it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest and any Additional Amount (without regard to any applicable grace period) at the same rate
to the extent lawful.

SECTION 4.02 Maintenance of Office or Agency.

          The Company will maintain in each Place of Payment for any series of Securities an office or
agency (which may be an office of the Trustee, the Registrar or the Paying Agent) where Securities
of that series may be presented for registration of transfer or exchange, where Securities of that
series may be presented for payment and where notices and demands to or upon the Company or a
Subsidiary Guarantor in respect of the Securities of that series and this Indenture may be served.
Unless otherwise designated by the Company by written notice to the Trustee and the Subsidiary
Guarantors, such office or agency shall be the office of the Trustee at

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1445 Ross Avenue, 2nd Floor, MAC T5303-02J, Dallas, TX 75202. The Company will give prompt
written notice to the Trustee and the Subsidiary Guarantors of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee and the Subsidiary Guarantors with
the address thereof, such presentations, surrenders, notices and demands may be made or served at
the Corporate Trust Office of the Trustee.

          The Company may also from time to time designate one or more other offices or agencies where
the Securities of one or more series may be presented or surrendered for any or all such purposes
and may from time to time rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to maintain an office or
agency in each Place of Payment for Securities of any series for such purposes. The Company will
give prompt written notice to the Trustee of any such designation or rescission and of any change
in the location of any such other office or agency.

SECTION 4.03 SEC Reports; Financial Statements.

          (a) If the Company is subject to the requirements of Section 13 or 15(d) of the Exchange Act,
the Company shall file with the Trustee, within 15 days after it files the same with the SEC,
copies of the annual reports and the information, documents and other reports (or copies of such
portions of any of the foregoing as the SEC may by rules and regulations prescribe) that the
Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. If
this Indenture is qualified under the TIA, but not otherwise, the Company shall also comply with
the provisions of TIA § 314(a). Delivery of such reports, information and documents to the Trustee
shall be for informational purposes only, and the Trustee’s receipt thereof shall not constitute
constructive notice of any information contained therein or determinable from information contained
therein, including the Company’s and the Subsidiary Guarantors’ compliance with any of their
covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’
Certificates or certificates delivered pursuant to Section 4.04).

          (b) If the Company is not subject to the requirements of Section 13 or 15(d) of the Exchange
Act, the Company shall furnish to all Holders of Rule 144A Securities and prospective purchasers of
Rule 144A Securities designated by the Holders of Rule 144A Securities, promptly upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4) promulgated under the
Securities Act of 1933, as amended.

SECTION 4.04 Compliance Certificate.

          (a) Each of the Company and the Subsidiary Guarantors shall deliver to the Trustee, within 120
days after the end of each fiscal year of the Company, a statement signed by an Officer of the
Company and each Subsidiary Guarantor, respectively, which need not constitute an Officers’
Certificate, complying with TIA § 314(a)(4) and stating that in the course of performance by the
signing Officer of his duties as such Officer of the Company or such Subsidiary Guarantor, as the
case may be, he would normally obtain knowledge of the keeping, observing, performing and
fulfilling by the Company or such Subsidiary Guarantor, as the case may be, of its obligations
under this Indenture, and further stating that to the best of his

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knowledge the Company or such Subsidiary Guarantor, as the case may be, has kept, observed,
performed and fulfilled each and every covenant contained in this Indenture and is not in default
in the performance or observance of any of the terms, provisions and conditions hereof (or, if a
Default or Event of Default shall have occurred, describing all such Defaults or Events of Default
of which such Officer may have knowledge and what action the Company or such Subsidiary Guarantor,
as the case may be, is taking or proposes to take with respect thereto).

          (b) The Company or any Subsidiary Guarantor shall, so long as Securities of any series are
outstanding, deliver to the Trustee, forthwith upon any Officer of the Company or such Subsidiary
Guarantor, as the case may be, becoming aware of any Default or Event of Default under this
Indenture, an Officers’ Certificate specifying such Default or Event of Default and what action the
Company or such Subsidiary Guarantor, as the case may be, is taking or proposes to take with
respect thereto.

SECTION 4.05 Corporate Existence.

          Subject to Article V, the Company shall do or cause to be done all things necessary to
preserve and keep in full force and effect its existence.

SECTION 4.06 Waiver of Stay, Extension or Usury Laws.

          Each of the Company and the Subsidiary Guarantors covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any usury law or other law
that would prohibit or forgive it from paying all or any portion of the principal of or interest on
the Securities as contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) each of the Company and the Subsidiary Guarantors hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.

SECTION 4.07 Additional Amounts.

          If the Securities of a series expressly provide for the payment of Additional Amounts, the
Company will pay to the Holder of any Security of such series Additional Amounts as expressly
provided therein. Whenever in this Indenture there is mentioned, in any context, the payment of
the principal of or any premium or interest on, or in respect of, any Security of any series or the
net proceeds received from the sale or exchange of any Security of any series, such mention shall
be deemed to include mention of the payment of Additional Amounts provided for in this Section 4.07
to the extent that, in such context, Additional Amounts are, were or would be payable in respect
thereof pursuant to the provisions of this Section 4.07 and express mention of the payment of
Additional Amounts (if applicable) in any provisions hereof shall not be construed as excluding
Additional Amounts in those provisions hereof where such express mention is not made.

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ARTICLE V

SUCCESSORS

SECTION 5.01 Limitations on Mergers and Consolidations.

          Neither the Company nor any Subsidiary Guarantor shall, in any transaction or series of
transactions, consolidate with or merge into any Person, or sell, lease, convey, transfer or
otherwise dispose of all or substantially all of its assets to any Person (other than a
consolidation or merger of one or more Subsidiary Guarantors into the Company or a merger of
Subsidiary Guarantors, or a sale, lease, conveyance, transfer or other disposition of all or
substantially all of the assets of a Subsidiary Guarantor to the Company or of a Subsidiary
Guarantor to another Subsidiary Guarantor), unless:

     (1) either (a) the Company or such Subsidiary Guarantor, as the case may be, shall be
the continuing Person or (b) the Person (if other than the Company or such Subsidiary
Guarantor) formed by such consolidation or into which the Company or such Subsidiary
Guarantor is merged, or to which such sale, lease, conveyance, transfer or other disposition
shall be made (collectively, the “Successor”), expressly assumes by supplemental indenture
the due and punctual payment of the principal of, premium (if any) and interest on and any
Additional Amounts with respect to all the Securities and the performance of the Company’s
covenants and obligations under this Indenture and the Securities, or, in the case of such
Subsidiary Guarantor, the performance of the Guarantee and such Subsidiary Guarantor’s
covenants and obligations under this Indenture and the Securities;

     (2) immediately after giving effect to such transaction or series of transactions, no
Default or Event of Default shall have occurred and be continuing or would result therefrom;
and

     (3) the Company delivers to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that the transaction and such supplemental indenture comply with this
Indenture.

SECTION 5.02 Successor Person Substituted.

          Upon any consolidation or merger of the Company or a Subsidiary Guarantor, as the case may be,
or any sale, lease, conveyance, transfer or other disposition of all or substantially all of the
assets of the Company or such Subsidiary Guarantor in accordance with Section 5.01, the Successor
formed by such consolidation or into or with which the Company or the Subsidiary Guarantor is
merged or to which such sale, lease, conveyance, transfer or other disposition is made shall
succeed to, and be substituted for, and may exercise every right and power of the Company or such
Subsidiary Guarantor, as the case may be, under this Indenture and the Securities with the same
effect as if such Successor had been named as the Company or such Subsidiary Guarantor, as the case
may be, herein and the predecessor Company or Subsidiary Guarantor, in the case of a sale,
conveyance, transfer or other disposition, shall be

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released from all obligations under this Indenture, the Securities and, in the case of a
Subsidiary Guarantor, the Guarantee.

ARTICLE VI

DEFAULTS AND REMEDIES

SECTION 6.01 Events of Default.

          Unless either inapplicable to a particular series or specifically deleted or modified in or
pursuant to the supplemental indenture or Board Resolution establishing such series of Securities
or in the form of Security for such series, an “Event of Default,” wherever used herein with
respect to Securities of any series, occurs if:

          (1) the Company defaults in the payment of interest on or any Additional Amounts with
respect to any Security of that series when the same becomes due and payable and such
default continues for a period of 30 days;

          (2) the Company defaults in the payment of (A) the principal of any Security of that
series at its Maturity or (B) premium (if any) on any Security of that series when the same
becomes due and payable;

          (3) the Company defaults in the deposit of any sinking fund payment, when and as due by
the terms of a Security of that series, and such default continues for a period of 30 days;

          (4) the Company, or if any series of Securities outstanding is entitled to the benefits
of a Guarantee, any Subsidiary Guarantor, fails to comply with any of its other covenants or
agreements in, or provisions of, the Securities of such series or this Indenture (other than
an agreement, covenant or provision that has expressly been included in this Indenture
solely for the benefit of one or more series of Securities other than that series) which
shall not have been remedied within the specified period after written notice, as specified
in the last paragraph of this Section 6.01;

          (5) the Company, or if that series of Securities is entitled to the benefits of a
Guarantee by any Subsidiary Guarantor, any Subsidiary Guarantor, if it is a Significant
Subsidiary, pursuant to or within the meaning of any Bankruptcy Law:

     (A) commences a voluntary case,

     (B) consents to the entry of an order for relief against it in an involuntary
case,

     (C) consents to the appointment of a Bankruptcy Custodian of it or for all or
substantially all of its property, or

     (D) makes a general assignment for the benefit of its creditors;

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          (6) a court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that remains unstayed and in effect for 90 days and that:

     (A) is for relief against the Company or any Subsidiary Guarantor with respect
to such series, if it is a Significant Subsidiary, as debtor in an involuntary case,

     (B) appoints a Bankruptcy Custodian of the Company or any Subsidiary Guarantor,
if it is a Significant Subsidiary, or a Bankruptcy Custodian for all or
substantially all of the property of the Company, or any Subsidiary Guarantor with
respect to such series, if it is a Significant Subsidiary, or

     (C) orders the liquidation of the Company or any Subsidiary Guarantor with
respect to such series, if it is a Significant Subsidiary; or

     (7) any Guarantee of any Subsidiary Guarantor that is a Significant Subsidiary
with respect to such series ceases to be in full force and effect with respect to
Securities of that series (except as otherwise provided in this Indenture) or is
declared null and void in a judicial proceeding, or any such Subsidiary Guarantor
denies or disaffirms its obligations under this Indenture or such Guarantee; or

          (8) any other Event of Default provided with respect to Securities of that series
occurs.

          The term “Bankruptcy Custodian” means any receiver, trustee, assignee, liquidator or similar
official under any Bankruptcy Law.

          The Trustee shall not be deemed to know or have notice of any Default or Event of Default
unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice
of any event which is in fact such a Default or Event of Default is received by the Trustee at the
Corporate Trust Office of the Trustee, and such notice references the Securities and this
Indenture.

          When a Default is cured, it ceases.

          Notwithstanding the foregoing provisions of this Section 6.01, if the principal of, premium
(if any) or interest on or Additional Amounts with respect to any Security is payable in a currency
or currencies (including a composite currency) other than Dollars and such currency or currencies
are not available to the Company or a Subsidiary Guarantor for making payment thereof due to the
imposition of exchange controls or other circumstances beyond the control of the Company or such
Subsidiary Guarantor (a “Conversion Event”), the Company will be entitled to satisfy its
obligations to Holders of the Securities by making such payment in Dollars in an amount equal to
the Dollar equivalent of the amount payable in such other currency, as determined by the Company or
the Subsidiary Guarantor, as the case may be, by reference to the Exchange Rate on the date of such
payment, or, if such rate is not then available, on the basis of the most recently available
Exchange Rate. Notwithstanding the foregoing provisions of this Section 6.01, any payment made
under such circumstances in Dollars where the required

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payment is in a currency other than Dollars will not constitute an Event of Default under this
Indenture.

          Promptly after the occurrence of a Conversion Event, the Company or a Subsidiary Guarantor
shall give written notice thereof to the Trustee; and the Trustee, promptly after receipt of such
notice, shall give notice thereof in the manner provided in Section 11.02 to the Holders. Promptly
after the making of any payment in Dollars as a result of a Conversion Event, the Company or a
Subsidiary Guarantor, as the case may be, shall give notice in the manner provided in Section 11.02
to the Holders, setting forth the applicable Exchange Rate and describing the calculation of such
payments.

          A Default under clause (4) or (7) of this Section 6.01 is not an Event of Default until the
Trustee notifies the Company and the Subsidiary Guarantors, or the Holders of at least 25% in
principal amount of the then outstanding Securities of the series affected by such Default notify
the Company, the Subsidiary Guarantors and the Trustee, of the Default, and the Company or the
applicable Subsidiary Guarantor, as the case may be, fails to cure the Default within 90 days after
receipt of the notice. The notice must specify the Default, demand that it be remedied and state
that the notice is a “Notice of Default.”

SECTION 6.02 Acceleration.

          If an Event of Default with respect to any Securities of any series at the time outstanding
(other than an Event of Default specified in clause (5) or (6) of Section 6.01) occurs and is
continuing, the Trustee by notice to the Company and the Subsidiary Guarantors, or the Holders of
at least 25% in principal amount of the then outstanding Securities of the series affected by such
Event of Default by notice to the Company, the Subsidiary Guarantors and the Trustee, may declare
the principal of (or, if any such Securities are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of that series) and all accrued and unpaid
interest on all then outstanding Securities of such series to be due and payable. Upon any such
declaration, the amounts due and payable on the Securities shall be due and payable immediately.
If an Event of Default specified in clause (5) or (6) of Section 6.01 hereof occurs, such amounts
shall ipso facto become and be immediately due and payable without any declaration, notice or other
act on the part of the Trustee or any Holder. The Holders of a majority in principal amount of the
then outstanding Securities of the series affected by such Event of Default, by written notice to
the Trustee, may rescind an acceleration and its consequences (other than nonpayment of principal
of or premium or interest on or any Additional Amounts with respect to the Securities) if the
rescission would not conflict with any judgment or decree and if all existing Events of Default
with respect to Securities of that series have been cured or waived, except nonpayment of
principal, premium, interest or any Additional Amounts that has become due solely because of the
acceleration.

SECTION 6.03 Other Remedies.

          If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy
to collect the payment of principal of, or premium, if any, or interest on the Securities or to
enforce the performance of any provision of the Securities or this Indenture.

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          The Trustee may maintain a proceeding even if it does not possess any of the Securities or
does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder
in exercising any right or remedy accruing upon an Event of Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.

SECTION 6.04 Waiver of Defaults.

          Subject to Sections 6.07 and 9.02, the Holders of a majority in principal amount of the then
outstanding Securities of any series by notice to the Trustee may waive an existing or past Default
or Event of Default with respect to such series and its consequences (including waivers obtained in
connection with a tender offer or exchange offer for Securities of such series or a solicitation of
consents in respect of Securities of such series, provided that in each case such offer or
solicitation is made to all Holders of then outstanding Securities of such series), except (1) a
continuing Default or Event of Default in the payment of the principal of, or premium, if any, or
interest on or any Additional Amounts with respect to any Security or (2) a continued Default in
respect of a provision that under Section 9.02 cannot be amended or supplemented without the
consent of each Holder affected. Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.

SECTION 6.05 Control by Majority.

          With respect to Securities of any series, the Holders of a majority in principal amount of the
then outstanding Securities of such series may direct in writing the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising any trust or power
conferred on it relating to or arising under an Event of Default described in clause (1), (2), (3)
or (7) of Section 6.01. However, the
Trustee may refuse to follow any direction that conflicts with applicable law or this Indenture,
that the Trustee determines may be unduly prejudicial to the rights of other Holders, or that may
involve the Trustee in personal liability; provided, however, that the Trustee may take any other
action deemed proper by the Trustee that is not inconsistent with such direction. Prior to taking
any action hereunder, the Trustee shall be entitled to indemnification satisfactory to it in its
sole discretion from Holders directing the Trustee against all losses and expenses caused by taking
or not taking such action.

SECTION 6.06 Limitations on Suits.

          Subject to Section 6.07 hereof, a Holder of a Security of any series may pursue a remedy with
respect to this Indenture or the Securities of such series or any related Guarantees only if:

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     (1) the Holder gives to the Trustee written notice of a continuing Event of Default
with respect to such series;

     (2) the Holders of at least 25% in principal amount of the then outstanding Securities
of such series make a written request to the Trustee to pursue the remedy;

     (3) such Holder or Holders offer to the Trustee indemnity satisfactory to the Trustee
against any loss, liability or expense;

     (4) the Trustee does not comply with the request within 60 days after receipt of the
request and the offer of indemnity; and

     (5) during such 60-day period the Holders of a majority in principal amount of the
Securities of that series do not give the Trustee a direction inconsistent with the request.

          A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a
preference or priority over another Holder.

SECTION 6.07 Rights of Holders to Receive Payment.

          Notwithstanding any other provision of this Indenture, the right of any Holder of a Security
to receive payment of principal of and premium, if any, and interest on and any Additional Amounts
with respect to the Security, on or after the respective due dates expressed in the Security, or to
bring suit for the enforcement of any such payment on or after such respective dates, is absolute
and unconditional and shall not be impaired or affected without the consent of the Holder.

SECTION 6.08 Collection Suit by Trustee.

          If an Event of Default specified in clause (1) or (2) of Section 6.01 hereof occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an
express trust against the Company or a Subsidiary Guarantor for the amount of principal, premium
(if any), interest and any Additional Amounts remaining unpaid on the Securities of the series
affected by the Event of Default, and interest on overdue principal and premium, if any, and, to
the extent lawful, interest on overdue interest, and such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.

SECTION 6.09 Trustee May File Proofs of Claim.

          The Trustee is authorized to file such proofs of claim and other papers or documents and to
take such actions, including participating as a member, voting or otherwise, of any committee of
creditors, as may be necessary or advisable to have the claims of the Trustee (including any claim
for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and the Holders allowed in any judicial proceedings relative to the Company or a
Subsidiary Guarantor or their respective creditors or properties and shall be entitled and
empowered to collect, receive and distribute any money or other property payable or

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deliverable on any such claims and any Bankruptcy Custodian in any such judicial proceeding is
hereby authorized by each Holder to make such payments to the Trustee, and in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee
any amount due to it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07. To the
extent that the payment of any such compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 out of
the estate in any such proceeding, shall be denied for any reason, payment of the same shall be
secured by a lien on, and shall be paid out of, any and all distributions, dividends, money,
securities and other properties which the Holders of the Securities may be entitled to receive in
such proceeding whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

SECTION 6.10 Priorities.

          If the Trustee collects any money pursuant to this Article VI, it shall pay out the money in
the following order:

     First: to the Trustee for amounts due under Section 7.07;

     Second: to Holders for amounts due and unpaid on the Securities in respect of which or
for the benefit of which such money has been collected, for principal, premium (if any),
interest and any Additional Amounts ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for principal, premium (if any),
interest and any Additional Amounts, respectively; and

     Third: to the Company.

          The Trustee, upon prior written notice to the Company, may fix record dates and payment dates
for any payment to Holders pursuant to this Article VI.

          To the fullest extent allowed under applicable law, if for the purpose of obtaining a judgment
against the Company or a Subsidiary Guarantor in any court it is necessary to convert the sum due
in respect of the principal of, premium (if any) or interest on or Additional Amounts with respect
to the Securities of any series (the “Required Currency”) into a currency in which a judgment will
be rendered (the “Judgment Currency”), the rate of exchange used shall be the rate at which in
accordance with normal banking procedures the Trustee could purchase in The City of New York the
Required Currency with the Judgment Currency on the Business Day in The City of New York next
preceding that on which final judgment is given. None of the Company, any Subsidiary Guarantor or
the Trustee shall be liable for any shortfall nor shall it benefit from any windfall in payments to
Holders of Securities under this Section 6.10 caused by a change in exchange rates between the time
the amount of a judgment against it is calculated as above and the time the Trustee converts the
Judgment Currency into the Required Currency to make

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payments under this Section 6.10 to Holders of Securities, but payment of such judgment shall
discharge all amounts owed by the Company and the Subsidiary Guarantors on the claim or claims
underlying such judgment.

SECTION 6.11 Undertaking for Costs.

          In any suit for the enforcement of any right or remedy under this Indenture or in any suit
against the Trustee for any action taken or omitted by it as a trustee, a court in its discretion
may require the filing by any party litigant in the suit of an undertaking to pay the costs of the
suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’
fees, against any party litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.07, or a suit by a Holder or Holders of more than
10% in principal amount of the then outstanding Securities of any series.

ARTICLE VII

TRUSTEE

SECTION 7.01 Duties of Trustee.

          (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of
the rights and powers vested in it by this Indenture, and use the same degree of care and skill in
such exercise, as a prudent person would exercise or use under the circumstances in the conduct of
such person’s own affairs.

          (b) Except during the continuance of an Event of Default with respect to the Securities of any
series:

     (1) the Trustee need perform only those duties that are specifically set forth in this
Indenture and no others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and

     (2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the requirements of this
Indenture. However, the Trustee shall examine such certificates and opinions to determine
whether, on their face, they appear to conform to the requirements of this Indenture.

          (c) The Trustee may not be relieved from liabilities for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:

     (1) this paragraph does not limit the effect of Section 7.01(b);

     (2) the Trustee shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the
pertinent facts; and

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     (3) the Trustee shall not be liable with respect to any action it takes or omits to
take in good faith in accordance with a direction received by it pursuant to Section 6.05.

          (d) Whether or not therein expressly so provided, every provision of this Indenture that in
any way relates to the Trustee is subject to the provisions of this Section 7.01.

          (e) No provision of this Indenture shall require the Trustee to expend or risk its own funds
or incur any liability. The Trustee may refuse to perform any duty or exercise any right or power
unless it receives indemnity satisfactory to it against any loss, liability or expense.

          (f) The Trustee shall not be liable for interest on any money received by it except as the
Trustee may agree in writing with the Company and the Subsidiary Guarantors. Money held in trust
by the Trustee need not be segregated from other funds except to the extent required by law. All
money received by the Trustee shall, until applied as herein provided, be held in trust for the
payment of the principal of, premium (if any) and interest on and Additional Amounts with respect
to the Securities.

SECTION 7.02 Rights of Trustee.

          (a) The Trustee may conclusively rely on any document believed by it to be genuine and to have
been signed or presented by the proper Person. The Trustee need not investigate any fact or matter
stated in the document.

          (b) Before the Trustee acts or refrains from acting, it may require instruction, an Officers’
Certificate or an Opinion of Counsel or both to be provided. The Trustee shall not be liable for
any action it takes or omits to take in good faith in reliance on such instruction, Officers’
Certificate or Opinion of Counsel. The Trustee may consult at the Company’s expense with counsel
of its selection and the written advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon.

          (c) The Trustee may act through agents and shall not be responsible for the misconduct or
negligence of any agent appointed with due care.

          (d) The Trustee shall not be liable for any action it takes or omits to take in good faith
which it believes to be authorized or within its rights or powers conferred upon it by this
Indenture.

          (e) Unless otherwise specifically provided in this Indenture, any demand, request, direction
or notice from the Company or any Subsidiary Guarantor shall be sufficient if signed by an Officer
of the Company.

SECTION 7.03 May Hold Securities.

          The Trustee in its individual or any other capacity may become the owner or pledgee of
Securities and may otherwise deal with the Company, any Subsidiary Guarantor or any of their
respective Affiliates with the same rights it would have if it were not Trustee. Any

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Agent may do the same with like rights and duties. However, the Trustee is subject to
Sections 7.10 and 7.11.

SECTION 7.04 Trustee’s Disclaimer.

          The Trustee makes no representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for the Company’s use of the proceeds from the Securities
or any money paid to the Company or any Subsidiary Guarantor or upon the Company’s or such
Subsidiary Guarantor’s direction under any provision hereof, it shall not be responsible for the
use or application of any money received by any Paying Agent other than the Trustee and it shall
not be responsible for any statement or recital herein or any statement in the Securities other
than its certificate of authentication.

SECTION 7.05 Notice of Defaults.

          If a Default or Event of Default with respect to the Securities of any series occurs and is
continuing and it is known to the Trustee, the Trustee shall mail to Holders of Securities of such
series a notice of the Default or Event of Default within 90 days after it occurs. Except in the
case of a Default or Event of Default in payment of principal of, premium (if any) and interest on
and Additional Amounts or any sinking fund installment with respect to the Securities of such
series, the Trustee may withhold the notice if and so long as a committee of its Responsible
Officers in good faith determines that withholding the notice is in the interests of Holders of
Securities of such series.

SECTION 7.06 Reports by Trustee to Holders.

          Within 60 days after each ___of each year after the execution of this Indenture,
the Trustee shall mail to Holders of a series, the Subsidiary Guarantors and the Company a brief
report dated as of such reporting date that complies with TIA § 313(a); provided, however, that if
no event described in TIA § 313(a) has occurred within the twelve months preceding the reporting
date with respect to a series, no report need be transmitted to Holders of such series. The
Trustee also shall comply with TIA § 313(b). The Trustee shall also transmit by mail all reports
if and as required by TIA §§ 313(c) and 313(d).

          A copy of each report at the time of its mailing to Holders of a series of Securities shall be
filed by the Company or a Subsidiary Guarantor with the SEC and each securities exchange, if any,
on which the Securities of such series are listed. The Company shall notify the Trustee if and when
any series of Securities is listed on any securities exchange.

SECTION 7.07 Compensation and Indemnity.

          The Company agrees to pay to the Trustee for its acceptance of this Indenture and services
hereunder such compensation as the Company and the Trustee shall from time to time agree in
writing. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of
an express trust. The Company agrees to reimburse the Trustee upon request for all reasonable
disbursements, advances and expenses incurred by it. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee’s agents and counsel.

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          The Company hereby indemnifies the Trustee and any predecessor Trustee against any and all
loss, liability, damage, claim or expense, including taxes (other than taxes based upon, measured
by or determined by the income of the Trustee), incurred by it arising out of or in connection with
the acceptance or administration of its duties under this Indenture, except as set forth in the
next following paragraph. The Trustee shall notify the Company and the Subsidiary Guarantors
promptly of any claim for which it may seek indemnity. The Company shall defend the claim and the
Trustee shall cooperate in the defense. The Trustee may have separate counsel and the Company
shall pay the reasonable fees and expenses of such counsel. The Company need not pay for any
settlement made without its consent.

          The Company shall not be obligated to reimburse any expense or indemnify against any loss or
liability incurred by the Trustee through the Trustee’s negligence or bad faith.

          To secure the payment obligations of the Company in this Section 7.07, the Trustee shall have
a lien prior to the Securities on all money or property held or collected by the Trustee, except
that held in trust to pay principal of, premium (if any) and interest on and any Additional Amounts
with respect to Securities of any series. Such lien and the Company’s obligations under this
Section 7.07 shall survive the satisfaction and discharge of this Indenture.

          When the Trustee incurs expenses or renders services after an Event of Default specified in
Section 6.01(5) or (6) occurs, the expenses and the compensation for the services are intended to
constitute expenses of administration under any Bankruptcy Law.

SECTION 7.08 Replacement of Trustee.

          A resignation or removal of the Trustee and appointment of a successor Trustee shall become
effective only upon the successor Trustee’s acceptance of appointment as provided in this Section
7.08.

          The Trustee may resign and be discharged at any time with respect to the Securities of one or
more series by so notifying the Company and the Subsidiary Guarantors. The Holders of a majority
in principal amount of the then outstanding Securities of any series may remove the Trustee with
respect to the Securities of such series by so notifying the Trustee, the Company and the
Subsidiary Guarantors. The Company may remove the Trustee if:

     (1) the Trustee fails to comply with Section 7.10;

     (2) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is
entered with respect to the Trustee under any Bankruptcy Law;

     (3) a Bankruptcy Custodian or public officer takes charge of the Trustee or its
property; or

     (4) the Trustee otherwise becomes incapable of acting.

          If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any
reason, with respect to the Securities of one or more series, the Company shall promptly appoint a
successor Trustee or Trustees with respect to the Securities of that or those series (it

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being understood that any such successor Trustee may be appointed with respect to the
Securities of one or more or all of such series and that at any time there shall be only one
Trustee with respect to the Securities of any particular series). Within one year after the
successor Trustee with respect to the Securities of any series takes office, the Holders of a
majority in principal amount of the Securities of such series then outstanding may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.

          If a successor Trustee with respect to the Securities of any series does not take office
within 30 days after the retiring or removed Trustee resigns or is removed, the retiring or removed
Trustee, the Company, any Subsidiary Guarantor or the Holders of at least 10% in principal amount
of the then outstanding Securities of such series may petition any court of competent jurisdiction
for the appointment of a successor Trustee with respect to the Securities of such series.

          If the Trustee with respect to the Securities of a series fails to comply with Section 7.10,
any Holder of Securities of such series may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee with respect to the Securities of
such series.

          In case of the appointment of a successor Trustee with respect to all Securities, each such
successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee, to
the Company and to the Subsidiary Guarantors. Thereupon the resignation or removal of the retiring
Trustee shall become effective, and the successor Trustee shall have all the rights, powers and
duties of the retiring Trustee under this Indenture. The successor Trustee shall mail a notice of
its succession to Holders. The retiring Trustee shall promptly transfer all property held by it as
Trustee to the successor Trustee, subject to the lien provided for in Section 7.07.

          In case of the appointment of a successor Trustee with respect to the Securities of one or
more (but not all) series, the Company, the Subsidiary Guarantors, the retiring Trustee and each
successor Trustee with respect to the Securities of one or more (but not all) series shall execute
and deliver an indenture supplemental hereto in which each successor Trustee shall accept such
appointment and that (1) shall confer to each successor Trustee all the rights, powers and duties
of the retiring Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with
respect to all Securities, shall confirm that all the rights, powers and duties of the retiring
Trustee with respect to the Securities of that or those series as to which the retiring Trustee is
not retiring shall continue to be vested in the retiring Trustee and (3) shall add to or change any
of the provisions of this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee. Nothing herein or in such
supplemental indenture shall constitute such Trustees co-trustees of the same trust, and each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts
hereunder administered by any other such Trustee. Upon the execution and delivery of such
supplemental indenture, the resignation or removal of the retiring Trustee shall become effective
to the extent provided therein and each such successor Trustee shall have all the rights, powers
and duties of the retiring Trustee with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates. On request of the Company or any successor
Trustee, such retiring

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Trustee shall transfer to such successor Trustee all property held by such retiring Trustee as
Trustee with respect to the Securities of that or those series to which the appointment of such
successor Trustee relates.

          Notwithstanding replacement of the Trustee or Trustees pursuant to this Section 7.08, the
obligations of the Company under Section 7.07 shall continue for the benefit of the retiring
Trustee or Trustees.

SECTION 7.09 Successor Trustee by Merger, etc.

          Subject to Section 7.10, if the Trustee consolidates, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another corporation, the successor
corporation without any further act shall be the successor Trustee; provided, however, that in the
case of a transfer of all or substantially all of its corporate trust business to another
corporation, the transferee corporation expressly assumes all of the Trustee’s liabilities
hereunder.

          In case any Securities shall have been authenticated, but not delivered, by the Trustee then
in office, any successor by merger, conversion or consolidation to such authenticating Trustee may
adopt such authentication and deliver the Securities so authenticated; and in case at that time any
of the Securities shall not have been authenticated, any successor to the Trustee may authenticate
such Securities either in the name of any predecessor hereunder or in the name of the successor to
the Trustee; and in all such cases such certificates shall have the full force which it is anywhere
in the Securities or in this Indenture provided that the certificate of the Trustee shall have.

SECTION 7.10 Eligibility; Disqualification.

          There shall at all times be a Trustee hereunder which shall be a corporation or banking or
trust company or association organized and doing business under the laws of the United States, any
State thereof or the District of Columbia and authorized under such laws to exercise corporate
trust power, shall be subject to supervision or examination by Federal or State (or the District of
Columbia) authority and shall have, or be a subsidiary of a bank or bank holding company having, a
combined capital and surplus of at least $50 million as set forth in its most recent published
annual report of condition.

          The Indenture shall always have a Trustee who satisfies the requirements of TIA §§ 310(a)(1),
310(a)(2) and 310(a)(5). The Trustee is subject to and shall comply with the provisions of TIA
§ 310(b) during the period of time required by this Indenture. Nothing in this Indenture shall
prevent the Trustee from filing with the SEC the application referred to in the penultimate
paragraph of TIA § 310(b).

SECTION 7.11 Preferential Collection of Claims Against the Company or a Subsidiary Guarantor.

          The Trustee is subject to and shall comply with the provisions of TIA § 311(a), excluding any
creditor relationship listed in TIA § 311(b). A Trustee who has resigned or been removed shall be
subject to TIA § 311(a) to the extent indicated therein.

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ARTICLE VIII

DISCHARGE OF INDENTURE

SECTION 8.01 Termination of the Company’s and the Subsidiary Guarantors’ Obligations.

          (a) This Indenture shall cease to be of further effect with respect to the Securities of a
series (except that the Company’s obligations under Section 7.07, the Trustee’s and Paying Agent’s
obligations under Section 8.03 and the rights, powers, protections and privileges accorded the
Trustee under Article VII shall survive), and the Trustee, on demand of the Company, shall execute
proper instruments acknowledging the satisfaction and discharge of this Indenture with respect to
the Securities of such series, when:

          (1) either:

     (A) all outstanding Securities of such series theretofore authenticated and
issued (other than destroyed, lost or stolen Securities that have been replaced or
paid) have been delivered to the Trustee for cancellation; or

     (B) all outstanding Securities of such series not theretofore delivered to the
Trustee for cancellation:

	 	(i)	 	have become due and payable, or
	 
	 	(ii)	 	will become due and payable at
their Stated Maturity within one year, or
	 
	 	(iii)	 	are to be called for redemption
within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption by the Trustee in the
name, and at the expense, of the Company,

and, in the case of clause (i), (ii) or (iii) above, the Company or a Subsidiary
Guarantor has irrevocably deposited or caused to be deposited with the Trustee as
funds (immediately available to the Holders in the case of clause (i)) in trust for
such purpose (x) cash in an amount, or (y) Government Obligations, maturing as to
principal and interest at such times and in such amounts as will ensure the
availability of cash in an amount or (z) a combination thereof, which will be
sufficient, in the opinion (in the case of clauses (y) and (z)) of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and discharge the entire
indebtedness on the Securities of such series for principal and interest to the date
of such deposit (in the case of Securities which have become due and payable) or for
principal, premium, if any, and interest to the Stated Maturity or Redemption Date,
as the case may be; or

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     (C) the Company and the Subsidiary Guarantors have properly fulfilled such
other means of satisfaction and discharge as is specified, as contemplated by
Section 2.01, to be applicable to the Securities of such series;

     (2) the Company or a Subsidiary Guarantor has paid or caused to be paid all other sums
payable by them hereunder with respect to the Securities of such series; and

     (3) the Company has delivered to the Trustee an Officers’ Certificate stating that all
conditions precedent to satisfaction and discharge of this Indenture with respect to the
Securities of such series have been complied with, together with an Opinion of Counsel to
the same effect.

          (b) Unless this Section 8.01(b) is specified as not being applicable to Securities of a series
as contemplated by Section 2.01, the Company may, at its option, terminate certain of its and the
Subsidiary Guarantors’ respective obligations under this Indenture (“covenant defeasance”) with
respect to the Securities of a series if:

     (1) the Company or a Subsidiary Guarantor has irrevocably deposited or caused to be
irrevocably deposited with the Trustee as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for and dedicated solely to the benefit
of the Holders of Securities of such series, (i) money in the currency in which payment of
the Securities of such series is to be made in an amount, or (ii) Government Obligations
with respect to such series, maturing as to principal and interest at such times and in such
amounts as will ensure the availability of money in the currency in which payment of the
Securities of such series is to be made in an amount or (iii) a combination thereof, that is
sufficient, in the opinion (in the case of clauses (ii) and (iii)) of a nationally
recognized firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay the principal of and premium (if any) and interest
on all Securities of such series on each date that such principal, premium (if any) or
interest is due and payable and (at the Stated Maturity thereof or upon redemption as
provided in Section 8.01(e)) to pay all other sums payable by it hereunder; provided that
the Trustee shall have been irrevocably instructed to apply such money and/or the proceeds
of such Government Obligations to the payment of said principal, premium (if any) and
interest with respect to the Securities of such series as the same shall become due;

     (2) the Company has delivered to the Trustee an Officers’ Certificate stating that all
conditions precedent to satisfaction and discharge of this Indenture with respect to the
Securities of such series have been complied with, and an Opinion of Counsel to the same
effect;

     (3) no Default or Event of Default with respect to the Securities of such series shall
have occurred and be continuing on the date of such deposit;

     (4) the Company shall have delivered to the Trustee an Opinion of Counsel from a
nationally recognized counsel acceptable to the Trustee or a tax ruling to the effect that
the Holders will not recognize income, gain or loss for U.S. Federal income tax

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purposes as a result of the Company’s exercise of its option under this Section 8.01(b)
and will be subject to U.S. Federal income tax on the same amount and in the same manner and
at the same times as would have been the case if such option had not been exercised;

     (5) the Company and the Subsidiary Guarantors have complied with any additional
conditions specified pursuant to Section 2.01 to be applicable to the discharge of
Securities of such series pursuant to this Section 8.01; and

     (6) such deposit and discharge shall not cause the Trustee to have a conflicting
interest as defined in TIA § 310(b).

          In such event, this Indenture shall cease to be of further effect (except as set forth in this
paragraph), and the Trustee, on demand of the Company, shall execute proper instruments
acknowledging satisfaction and discharge under this Indenture. However, the Company’s and the
Subsidiary Guarantors’ respective obligations in Sections 2.05, 2.06, 2.07, 2.08, 2.09, 4.01, 4.02,
7.07, 7.08 and 8.04, the Trustee’s and Paying Agent’s obligations in Section 8.03 and the rights,
powers, protections and privileges accorded the Trustee under Article VII shall survive until all
Securities of such series are no longer outstanding. Thereafter, only the Company’s obligations in
Section 7.07 and the Trustee’s and Paying Agent’s obligations in Section 8.03 shall survive with
respect to Securities of such series.

          After such irrevocable deposit made pursuant to this Section 8.01(b) and satisfaction of the
other conditions set forth herein, the Trustee upon request shall acknowledge in writing the
discharge of the Company’s and the Subsidiary Guarantors’ obligations under this Indenture with
respect to the Securities of such series except for those surviving obligations specified above.

          In order to have money available on a payment date to pay principal of or premium (if any) or
interest on the Securities, the Government Obligations shall be payable as to principal or interest
on or before such payment date in such amounts as will provide the necessary money. Government
Obligations shall not be callable at the issuer’s option.

          (c) If the Company and the Subsidiary Guarantors have previously complied or is concurrently
complying with Section 8.01(b) (other than any additional conditions specified pursuant to
Section 2.01 that are expressly applicable only to covenant defeasance) with respect to Securities
of a series, then, unless this Section 8.01(c) is specified as not being applicable to Securities
of such series as contemplated by Section 2.01, the Company may elect that its and the Subsidiary
Guarantors’ respective obligations to make payments with respect to Securities of such series be
discharged (“legal defeasance”), if:

     (1) no Default or Event of Default under clauses (5) and (6) of Section 6.01 hereof
shall have occurred at any time during the period ending on the 91st day after the date of
deposit contemplated by Section 8.01(b) (it being understood that this condition shall not
be deemed satisfied until the expiration of such period);

     (2) unless otherwise specified with respect to Securities of such series as
contemplated by Section 2.01, the Company has delivered to the Trustee an Opinion of

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Counsel from a nationally recognized counsel acceptable to the Trustee to the effect
referred to in Section 8.01(b)(4) with respect to such legal defeasance, which opinion is
based on (i) a private ruling of the Internal Revenue Service addressed to the Company, (ii)
a published ruling of the Internal Revenue Service pertaining to a comparable form of
transaction or (iii) a change in the applicable federal income tax law (including
regulations) after the date of this Indenture;

     (3) the Company and the Subsidiary Guarantors have complied with any other conditions
specified pursuant to Section 2.01 to be applicable to the legal defeasance of Securities of
such series pursuant to this Section 8.01(c); and

     (4) the Company has delivered to the Trustee a Company Request requesting such legal
defeasance of the Securities of such series and an Officers’ Certificate stating that all
conditions precedent with respect to such legal defeasance of the Securities of such series
have been complied with, together with an Opinion of Counsel to the same effect.

          In such event, the Company and the Subsidiary Guarantors will be discharged from its
obligations under this Indenture and the Securities of such series to pay principal of, premium (if
any) and interest on and any Additional Amounts with respect to Securities of such series, the
Company’s and the Subsidiary Guarantors’ respective obligations under Sections 4.01, 4.02 and 10.1
shall terminate with respect to such Securities, and the entire indebtedness of the Company
evidenced by such Securities and of the Subsidiary Guarantors evidenced by the related Guarantee
shall be deemed paid and discharged.

          (d) If and to the extent additional or alternative means of satisfaction, discharge or
defeasance of Securities of a series are specified to be applicable to such series as contemplated
by Section 2.01, each of the Company and the Subsidiary Guarantors may terminate any or all of its
obligations under this Indenture with respect to Securities of a series and any or all of its
obligations under the Securities of such series if it fulfills such other means of satisfaction and
discharge as may be so specified, as contemplated by Section 2.01, to be applicable to the
Securities of such series.

          (e) If Securities of any series subject to subsections (a), (b), (c) or (d) of this Section
8.01 are to be redeemed prior to their Stated Maturity, whether pursuant to any optional redemption
provisions or in accordance with any mandatory or optional sinking fund provisions, the terms of
the applicable trust arrangement shall provide for such redemption, and the Company shall make such
arrangements as are reasonably satisfactory to the Trustee for the giving of notice of redemption
by the Trustee in the name, and at the expense, of the Company.

SECTION 8.02 Application of Trust Money.

          The Trustee or a trustee satisfactory to the Trustee and the Company shall hold in trust money
or Government Obligations deposited with it pursuant to Section 8.01 hereof. It shall apply the
deposited money and the money from Government Obligations through the Paying Agent and in
accordance with this Indenture to the payment of principal of, premium (if

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any) and interest on and any Additional Amounts with respect to the Securities of the series
with respect to which the deposit was made.

SECTION 8.03 Repayment to Company.

          The Trustee and the Paying Agent shall promptly pay to the Company or any Subsidiary Guarantor
any excess money or Government Obligations (or proceeds therefrom) held by them at any time upon
the written request of the Company.

          Subject to the requirements of any applicable abandoned property laws, the Trustee and the
Paying Agent shall pay to the Company upon written request any money held by them for the payment
of principal, premium (if any), interest or any Additional Amounts that remain unclaimed for two
years after the date upon which such payment shall have become due. After payment to the Company,
Holders entitled to the money must look to the Company for payment as general creditors unless an
applicable abandoned property law designates another Person, and all liability of the Trustee and
the Paying Agent with respect to such money shall cease.

SECTION 8.04 Reinstatement.

          If the Trustee or the Paying Agent is unable to apply any money or Government Obligations
deposited with respect to Securities of any series in accordance with Section 8.01 by reason of any
legal proceeding or by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the obligations of the Company
and the Subsidiary Guarantors under this Indenture with respect to the Securities of such series
and under the Securities of such series shall be revived and reinstated as though no deposit had
occurred pursuant to Section 8.01 until such time as the Trustee or the Paying Agent is permitted
to apply all such money or Government Obligations in accordance with Section 8.01; provided,
however, that if the Company or any Subsidiary Guarantor has made any payment of principal of,
premium (if any) or interest on or any Additional Amounts with respect to any Securities because of
the reinstatement of its obligations, the Company or such Subsidiary Guarantor, as the case may be,
shall be subrogated to the rights of the Holders of such Securities to receive such payment from
the money or Government Obligations held by the Trustee or the Paying Agent.

ARTICLE IX

SUPPLEMENTAL INDENTURES AND AMENDMENTS

SECTION 9.01 Without Consent of Holders.

          The Company, the Subsidiary Guarantors and the Trustee may amend or supplement this Indenture
or the Securities or waive any provision hereof or thereof without the consent of any Holder:

     (1) to cure any ambiguity, omission, defect or inconsistency;

     (2) to comply with Section 5.01;

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     (3) to provide for uncertificated Securities in addition to or in place of certificated
Securities, or to provide for the issuance of bearer Securities (with or without coupons);

     (4) to provide any security for, or to add any guarantees of or additional obligors on,
any series of Securities or the related Guarantees, if any;

     (5) to comply with any requirement in order to effect or maintain the qualification of
this Indenture under the TIA;

     (6) to add to the covenants of the Company or any Subsidiary Guarantor for the benefit
of the Holders of all or any series of Securities (and if such covenants are to be for the
benefit of less than all series of Securities, stating that such covenants are expressly
being included solely for the benefit of such series), or to surrender any right or power
herein conferred upon the Company or any Subsidiary Guarantor;

     (7) to add any additional Events of Default with respect to all or any series of the
Securities (and, if any Event of Default is applicable to less than all series of
Securities, specifying the series to which such Event of Default is applicable);

     (8) to change or eliminate any of the provisions of this Indenture; provided that any
such change or elimination shall become effective only when there is no outstanding Security
of any series created prior to the execution of such amendment or supplemental indenture
that is adversely affected in any material respect by such change in or elimination of such
provision; provided, further, that any change made solely to conform the provisions of this
Indenture to the description of any Security in a prospectus
supplement pursuant to which such Securities were offered and sold will not be deemed
to adversely affect any Security of that series in any material respect;

     (9) to establish the form or terms of Securities of any series as permitted by Section
2.01;

     (10) to supplement any of the provisions of this Indenture to such extent as shall be
necessary to permit or facilitate the defeasance and discharge of any series of Securities
pursuant to Section 8.01; provided, however, that any such action shall not adversely affect
the interest of the Holders of Securities of such series or any other series of Securities
in any material respect; or

     (11) to evidence and provide for the acceptance of appointment hereunder by a successor
Trustee with respect to the Securities of one or more series and to add to or change any of
the provisions of this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, pursuant to the
requirements of Section 7.08.

          Upon the request of the Company, accompanied by a Board Resolution, and upon receipt by the
Trustee of the documents described in Section 9.06, the Trustee shall, subject to Section 9.06,
join with the Company and the Subsidiary Guarantors in the execution of any

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supplemental indenture authorized or permitted by the terms of this Indenture and make any
further appropriate agreements and stipulations that may be therein contained.

SECTION 9.02 With Consent of Holders.

          Except as provided below in this Section 9.02, the Company, the Subsidiary Guarantors and the
Trustee may amend or supplement this Indenture with the written consent (including consents
obtained in connection with a tender offer or exchange offer for Securities of any one or more
series or all series or a solicitation of consents in respect of Securities of any one or more
series or all series, provided that in each case such offer or solicitation is made to all Holders
of then outstanding Securities of each such series (but the terms of such offer or solicitation may
vary from series to series)) of the Holders of at least a majority in principal amount of the then
outstanding Securities of each series affected by such amendment or supplement.

          Upon the request of the Company, accompanied by a Board Resolution, and upon the filing with
the Trustee of evidence of the consent of the Holders as aforesaid, and upon receipt by the Trustee
of the documents described in Section 9.06, the Trustee shall, subject to Section 9.06, join with
the Company and the Subsidiary Guarantors in the execution of such amendment or supplemental
indenture.

          It shall not be necessary for the consent of the Holders under this Section 9.02 to approve
the particular form of any proposed amendment, supplement or waiver, but it shall be sufficient if
such consent approves the substance thereof.

          The Holders of a majority in principal amount of the then outstanding Securities of one or
more series may waive compliance in a particular instance by the Company or any Subsidiary
Guarantor with any provision of this Indenture with respect to Securities of such series (including
waivers obtained in connection with a tender offer or exchange offer for Securities of such series
or a solicitation of consents in respect of Securities of such series, provided that in each case
such offer or solicitation is made to all Holders of then outstanding Securities of such series
(but the terms of such offer or solicitation may vary from series to series)).

          However, without the consent of each Holder affected, an amendment, supplement or waiver under
this Section 9.02 may not:

     (1) reduce the amount of Securities whose Holders must consent to an amendment,
supplement or waiver;

     (2) reduce the rate of or change the time for payment of interest, including default
interest, on any Security;

     (3) reduce the principal of, any premium on or any mandatory sinking fund payment with
respect to, or change the Stated Maturity of, any Security or reduce the amount of the
principal of an Original Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 6.02;

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     (4) reduce the premium, if any, payable upon the redemption of any Security or change
the time at which any Security may or shall be redeemed;

     (5) change any obligation of the Company or any Subsidiary Guarantor to pay Additional
Amounts with respect to any Security;

     (6) change the coin or currency or currencies (including composite currencies) in which
any Security or any premium, interest or Additional Amounts with respect thereto are
payable;

     (7) impair the right to institute suit for the enforcement of any payment of principal
of, premium (if any) or interest on or any Additional Amounts with respect to any Security
pursuant to Sections 6.07 and 6.08, except as limited by Section 6.06;

     (8) make any change in the percentage of principal amount of Securities necessary to
waive compliance with certain provisions of this Indenture pursuant to Section 6.04 or 6.07
or make any change in this sentence of Section 9.02;

     (9) waive a continuing Default or Event of Default in the payment of principal of,
premium (if any) or interest on or Additional Amounts with respect to the Securities; or

     (10) except as provided in Section 10.04, release any Subsidiary Guarantor or modify
the related Guarantee in any manner materially adverse to the Holders.

          A supplemental indenture that changes or eliminates any covenant or other provision of this
Indenture which has expressly been included solely for the benefit of one or more particular series
of Securities, or which modifies the rights of the Holders of Securities of such series with
respect to such covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.

          The right of any Holder to participate in any consent required or sought pursuant to any
provision of this Indenture (and the obligation of the Company or any Subsidiary Guarantor to
obtain any such consent otherwise required from such Holder) may be subject to the requirement that
such Holder shall have been the Holder of record of any Securities with respect to which such
consent is required or sought as of a date identified by the Company or such Subsidiary Guarantor
in a notice furnished to Holders in accordance with the terms of this Indenture.

          After an amendment, supplement or waiver under this Section 9.02 becomes effective, the
Company shall mail to the Holders of each Security affected thereby a notice briefly describing the
amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any such amendment,
supplement or waiver.

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SECTION 9.03 Compliance with Trust Indenture Act.

          Every amendment or supplement to this Indenture or the Securities shall comply in form and
substance with the TIA as then in effect.

SECTION 9.04 Revocation and Effect of Consents.

          Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder is a
continuing consent by the Holder and every subsequent Holder of a Security or portion of a Security
that evidences the same debt as the consenting Holder’s Security, even if notation of the consent
is not made on any Security. However, any such Holder or subsequent Holder may revoke the consent
as to his or her Security or portion of a Security if the Trustee receives written notice of
revocation before a date and time therefor identified by the Company or any Subsidiary Guarantor in
a notice furnished to such Holder in accordance with the terms of this Indenture or, if no such
date and time shall be identified, the date the amendment, supplement or waiver becomes effective.
An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter
binds every Holder.

          The Company or any Subsidiary Guarantor may, but shall not be obligated to, fix a record date
(which need not comply with TIA § 316(c)) for the purpose of determining the Holders entitled to
consent to any amendment, supplement or waiver or to take any other action under this Indenture.
If a record date is fixed, then notwithstanding the provisions of the immediately preceding
paragraph, those Persons who were Holders at such record date (or their duly designated proxies),
and only those Persons, shall be entitled to consent to such amendment, supplement or waiver or to
revoke any consent previously given, whether or not such Persons continue to be Holders after such
record date. No consent shall be valid or effective for more than 90 days after such record date
unless consents from Holders of the principal amount of Securities required hereunder for such
amendment or waiver to be effective shall have also been given and not revoked within such 90-day
period.

          After an amendment, supplement or waiver becomes effective, it shall bind every Holder, unless
it is of the type described in any of clauses (1) through (9) of Section 9.02 hereof. In such
case, the amendment, supplement or waiver shall bind each Holder who has consented to it and every
subsequent Holder that evidences the same debt as the consenting Holder’s Security.

SECTION 9.05 Notation on or Exchange of Securities.

          If an amendment or supplement changes the terms of an outstanding Security, the Company may
require the Holder of the Security to deliver it to the Trustee. The Trustee may place an
appropriate notation on the Security at the request of the Company regarding the changed terms and
return it to the Holder. Alternatively, if the Company so determines, the Company in exchange for
the Security shall issue and the Trustee shall authenticate a new Security that reflects the
changed terms. Failure to make the appropriate notation or to issue a new Security shall not
affect the validity of such amendment or supplement.

          Securities of any series authenticated and delivered after the execution of any amendment or
supplement may, and shall if required by the Trustee, bear a notation in form approved by the
Trustee as to any matter provided for in such amendment or supplement.

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SECTION 9.06 Trustee to Sign Amendments, etc.

          The Trustee shall sign any amendment or supplement authorized pursuant to this Article if the
amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of
the Trustee. If it does, the Trustee may, but need not, sign it. In signing or refusing to sign
such amendment or supplement, the Trustee shall be entitled to receive, and, shall be fully
protected in relying upon in good faith, an Officers’ Certificate and an Opinion of Counsel
provided at the expense of the Company or a Subsidiary Guarantor as conclusive evidence that such
amendment or supplement is authorized or permitted by this Indenture, that it is not inconsistent
herewith, and that it will be valid and binding upon the Company in accordance with its terms.

ARTICLE X

GUARANTEE

SECTION 10.01 Guarantee.

          (a) Notwithstanding any provision of this Article X to the contrary, the provisions of this
Article X relating to the Subsidiary Guarantors shall be applicable only to, and inure solely to
the benefit of, the Securities of any series designated, pursuant to Section 2.01, as entitled to
the benefits of the related Guarantee of each of the Subsidiary Guarantors.

          (b) For value received, each of the Subsidiary Guarantors hereby fully, unconditionally and
absolutely guarantees (each, a “Guarantee”) to the Holders and to the Trustee the due and punctual
payment of the principal of, and premium, if any, and interest on the Securities and all other
amounts due and payable under this Indenture and the Securities by the Company, when and as such
principal, premium, if any, and interest shall become due and payable, whether at the Stated
Maturity or by declaration of acceleration, call for redemption or otherwise, according to the
terms of the Securities and this Indenture, subject to the limitations set forth in Section 10.03.

          (c) Failing payment when due of any amount guaranteed pursuant to the related Guarantee, for
whatever reason, each of the Subsidiary Guarantors will be jointly and severally obligated to pay
the same immediately. Each of the Guarantees hereunder is intended to be a general, unsecured,
senior obligation of the related Subsidiary Guarantor and will rank pari passu in right of payment
with all Debt of such Subsidiary Guarantor that is not, by its terms, expressly subordinated in
right of payment to such Guarantee. Each of the Subsidiary Guarantors hereby agrees that its
obligations hereunder shall be full, unconditional and absolute, irrespective of the validity,
regularity or enforceability of the Securities, its Guarantee, the Guarantee of any other
Subsidiary Guarantor or this Indenture, the absence of any action to enforce the same, any waiver
or consent by any Holder of the Securities with respect to any provisions hereof or thereof, the
recovery of any judgment against the Company or any Subsidiary Guarantor, or any action to enforce
the same or any other circumstances which might otherwise constitute a legal or equitable discharge
or defense of the Subsidiary Guarantors. Each of the Subsidiary Guarantors hereby agrees that in
the event of a default in payment of the
principal of, or premium, if any, or interest on the Securities of such series, whether at the
Stated Maturity or by declaration of acceleration, call for redemption or otherwise, legal
proceedings

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may be instituted by the Trustee on behalf of the Holders or, subject to Section 6.06,
by the Holders, on the terms and conditions set forth in this Indenture, directly against such
Subsidiary Guarantor to enforce such Guarantee without first proceeding against the Company or any
other Subsidiary Guarantor.

          (d) The obligations of each of the Subsidiary Guarantors under this Article X shall be as
aforesaid full, unconditional and absolute and shall not be impaired, modified, released or limited
by any occurrence or condition whatsoever, including, without limitation, (i) any compromise,
settlement, release, waiver, renewal, extension, indulgence or modification of, or any change in,
any of the obligations and liabilities of the Company or any of the Subsidiary Guarantors contained
in the Securities or this Indenture, (ii) any impairment, modification, release or limitation of
the liability of the Company, any of the Subsidiary Guarantors or any of their estates in
bankruptcy, or any remedy for the enforcement thereof, resulting from the operation of any present
or future provision of any applicable Bankruptcy Law, as amended, or other statute or from the
decision of any court, (iii) the assertion or exercise by the Company, any of the Subsidiary
Guarantors or the Trustee of any rights or remedies under the Securities or this Indenture or their
delay in or failure to assert or exercise any such rights or remedies, (iv) the assignment or the
purported assignment of any property as security for the Securities, including all or any part of
the rights of the Company or any of the Subsidiary Guarantors under this Indenture, (v) the
extension of the time for payment by the Company or any of the Subsidiary Guarantors of any
payments or other sums or any part thereof owing or payable under any of the terms and provisions
of the Securities or this Indenture or of the time for performance by the Company or any of the
Subsidiary Guarantors of any other obligations under or arising out of any such terms and
provisions or the extension or the renewal of any thereof, (vi) the modification or amendment
(whether material or otherwise) of any duty, agreement or obligation of the Company or any of the
Subsidiary Guarantors set forth in this Indenture, (vii) the voluntary or involuntary liquidation,
dissolution, sale or other disposition of all or substantially all of the assets, marshaling of
assets and liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of, or other similar proceeding
affecting, the Company or any of the Subsidiary Guarantors or any of their respective assets, or
the disaffirmance of the Securities, the Guarantees or this Indenture in any such proceeding,
(viii) the release or discharge of the Company or any of the Subsidiary Guarantors from the
performance or observance of any agreement, covenant, term or condition contained in any of such
instruments by operation of law, (ix) the unenforceability of the Securities of such series, the
related Guarantees or this Indenture or (x) any other circumstances (other than payment in full or
discharge of all amounts guaranteed pursuant to the related Guarantees) which might otherwise
constitute a legal or equitable discharge of a surety or guarantor.

          (e) Each of the Subsidiary Guarantors hereby (i) waives diligence, presentment, demand of
payment, filing of claims with a court in the event of the merger, insolvency or bankruptcy of the
Company or any of the Subsidiary Guarantors, and all demands whatsoever, (ii) acknowledges that any
agreement, instrument or document evidencing its Guarantee may be transferred and that the benefit
of its obligations hereunder shall extend to each holder of any agreement, instrument or document
evidencing its Guarantee without notice
to it and (iii) covenants that its Guarantee will not be discharged except by complete
performance of such Guarantee. Each of the Subsidiary Guarantors further agrees that if at any

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time all or any part of any payment theretofore applied by any Person to its Guarantee is, or must
be, rescinded or returned for any reason whatsoever, including, without limitation, the insolvency,
bankruptcy or reorganization of the Company or any of the Subsidiary Guarantors, such Guarantee
shall, to the extent that such payment is or must be rescinded or returned, be deemed to have
continued in existence notwithstanding such application, and such Guarantee shall continue to be
effective or be reinstated, as the case may be, as though such application had not been made.

          (f) Each of the Subsidiary Guarantors shall be subrogated to all rights of the Holders and the
Trustee against the Company in respect of any amounts paid by such Subsidiary Guarantor pursuant to
the provisions of this Indenture; provided, however, that such Subsidiary Guarantor shall not be
entitled to enforce or to receive any payments arising out of, or based upon, such right of
subrogation until all of the Securities of such series and the related Guarantees shall have been
paid in full or discharged.

SECTION 10.02 Execution and Delivery of Guarantees.

          To further evidence its Guarantee set forth in Section 10.01, each of the Subsidiary
Guarantors hereby agrees that a notation relating to such Guarantee, substantially in the form
attached hereto as Annex A, shall be endorsed on each Security of the series entitled to the
benefits of such Guarantee authenticated and delivered by the Trustee, which notation of Guarantee
shall be executed by either manual or facsimile signature of an Officer of such Subsidiary
Guarantor. Each of the Subsidiary Guarantors hereby agrees that its Guarantee set forth in Section
10.01 shall remain in full force and effect notwithstanding any failure to endorse on each Security
a notation relating to such Guarantee. If any Officer of such Subsidiary Guarantor whose signature
is on this Indenture or a notation of Guarantee no longer holds that office at the time the Trustee
authenticates such Security or at any time thereafter, the Guarantee of such Security shall be
valid nevertheless. The delivery of any Security of a series entitled to the benefits of a
Guarantee under this Article X by the Trustee, after the authentication thereof hereunder, shall
constitute due delivery of the Guarantee set forth in this Indenture on behalf of each Subsidiary
Guarantor.

SECTION 10.03 Limitation on Liability of the Subsidiary Guarantors.

          Each Subsidiary Guarantor and by its acceptance hereof each Holder of a Security of a series
entitled to the benefits of a Guarantee under this Article X hereby confirms that it is the
intention of all such parties that the guarantee by such Subsidiary Guarantor pursuant to its
Guarantee not constitute a fraudulent transfer or conveyance for purposes of any federal or state
law. To effectuate the foregoing intention, the Holders of a Security entitled to the benefits of
such Guarantee and the Subsidiary Guarantors hereby irrevocably agree that the obligations of each
Subsidiary Guarantor under its Guarantee shall be limited to the maximum amount as will,
after giving effect to all other contingent and fixed liabilities of such Subsidiary Guarantor
and to any collections from or payments made by or on behalf of any other Subsidiary Guarantor in
respect of the obligations of such other Subsidiary Guarantor under its Guarantee, result in the
obligations of such Subsidiary Guarantor under its Guarantee not constituting a fraudulent
conveyance or fraudulent transfer under federal or state law.

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SECTION 10.04 Release of Subsidiary Guarantors from Guarantee.

          (a) Notwithstanding any other provisions of this Indenture, the Guarantee of any Subsidiary
Guarantor may be released upon the terms and subject to the conditions set forth in this Section
10.04. Provided that no Default shall have occurred and shall be continuing under this Indenture,
any Guarantee incurred by a Subsidiary Guarantor pursuant to this Article X shall be
unconditionally released and discharged (i) automatically upon (A) any sale, exchange or transfer,
whether by way of merger or otherwise, to any Person that is not an Affiliate of the Company, of
all of the Company’s direct or indirect equity interests in such Subsidiary Guarantor (provided
such sale, exchange or transfer is not prohibited by this Indenture) or (B) the merger of such
Subsidiary Guarantor into the Company or any other Subsidiary Guarantor or the liquidation and
dissolution of such Subsidiary Guarantor (in each case to the extent not prohibited by this
Indenture) or (ii) following delivery of a written notice of such release or discharge by the
Company to the Trustee, upon the release or discharge of all guarantees by such Subsidiary
Guarantor of any Debt of the Company other than obligations arising under this Indenture and any
Securities issued hereunder, except a discharge or release by or as a result of payment under such
guarantees.

          (b) The Trustee shall deliver an appropriate instrument evidencing any release of a Subsidiary
Guarantor from its Guarantee upon receipt of a written request of the Company accompanied by an
Officers’ Certificate and an Opinion of Counsel that the Subsidiary Guarantor is entitled to such
release in accordance with the provisions of this Indenture. If the Subsidiary Guarantor is not so
released it shall remain liable for the full amount of principal of (and premium, if any, on) and
interest on the Securities entitled to the benefits of such Guarantee as provided in this
Indenture, subject to the limitations of Section 10.03.

SECTION 10.05 Contribution. In order to provide for just and equitable contribution among the
Subsidiary Guarantors, the Subsidiary Guarantors hereby agree, inter se, that in the event any
payment or distribution is made by any Subsidiary Guarantor (a “Funding Guarantor”) under its
Guarantee, such Funding Guarantor shall be entitled to a contribution from each other Subsidiary
Guarantor (as applicable) in a pro rata amount based on the net assets of each Subsidiary Guarantor
(including the Funding Guarantor) for all payments, damages and expenses incurred by that Funding
Guarantor in discharging the Company’s obligations with respect to the Securities of a series
entitled to the benefits of a Guarantee under this Article X or any other Subsidiary Guarantor’s
obligations with respect to its Guarantee of such series of Securities.

ARTICLE XI

MISCELLANEOUS

SECTION 11.01 Trust Indenture Act Controls.

          If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by
operation of TIA § 318(c), the imposed duties shall control.

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SECTION 11.02 Notices.

          Any notice or communication by the Company, any Subsidiary Guarantor or the Trustee to the
other is duly given if in writing and delivered in person or mailed by first-class mail (registered
or certified, return receipt requested), telex, facsimile or overnight air courier guaranteeing
next day delivery, to the other’s address:

If to the Company or any Subsidiary Guarantor:

Carrizo Oil & Gas, Inc.

1000 Louisiana, Suite 1500

Houston, Texas 77002

Attn: S.P. Johnson IV

Telephone: (713) 328-1000

Facsimile: (713) 358-6440

If to the Trustee:

Wells Fargo Bank, National Association

Corporate Trust Services

1445 Ross Avenue – 2nd Floor

Dallas, Texas 75202-2812

Attn: Patrick Giordano

Telephone: (214) 740-1573

Facsimile: (214) 777-4086

          The Company, any Subsidiary Guarantor or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.

          All notices and communications shall be deemed to have been duly given: at the time delivered
by hand, if personally delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if by facsimile; and
the next Business Day after timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery.

          Any notice or communication to a Holder shall be mailed by first-class mail, postage prepaid,
to the Holder’s address shown on the register kept by the Registrar. Failure to mail a notice or
communication to a Holder or any defect in it shall not affect its sufficiency with respect to
other Holders.

          If a notice or communication is mailed in the manner provided above within the time
prescribed, it is duly given, whether or not the addressee receives it, except in the case of
notice to the Trustee, it is duly given only when received.

          If the Company or a Subsidiary Guarantor mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.

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          All notices or communications, including without limitation notices to the Trustee, the
Company or a Subsidiary Guarantor by Holders, shall be in writing, except as otherwise set forth
herein.

          In case by reason of the suspension of regular mail service, or by reason of any other cause,
it shall be impossible to mail any notice required by this Indenture, then such method of
notification as shall be made with the approval of the Trustee shall constitute a sufficient
mailing of such notice.

SECTION 11.03 Communication by Holders with Other Holders.

          Holders may communicate pursuant to TIA § 312(b) with other Holders with respect to their
rights under this Indenture or the Securities. The Company, the Subsidiary Guarantors, the
Trustee, the Registrar and anyone else shall have the protection of TIA § 312(c).

SECTION 11.04 Certificate and Opinion as to Conditions Precedent.

          Upon any request or application by the Company or a Subsidiary Guarantor to the Trustee to
take any action under this Indenture, the Company or such Subsidiary Guarantor shall, if requested
by the Trustee, furnish to the Trustee at the expense of the Company or such Subsidiary Guarantor,
as the case may be:

     (1) an Officers’ Certificate (which shall include the statements set forth in
Section 11.05) stating that, in the opinion of the signers, all conditions precedent and
covenants, if any, provided for in this Indenture relating to the proposed action have been
complied with; and

     (2) an Opinion of Counsel (which shall include the statements set forth in
Section 11.05 hereof) stating that, in the opinion of such counsel, all such conditions
precedent and covenants have been complied with.

SECTION 11.05 Statements Required in Certificate or Opinion.

          Each certificate or opinion with respect to compliance with a condition or covenant provided
for in this Indenture (other than a certificate provided pursuant to TIA § 314(a)(4)) shall comply
with the provisions of TIA § 314(e) and shall include:

     (1) a statement that the Person making such certificate or opinion has read such
covenant or condition;

     (2) a brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion are based;

     (3) a statement that, in the opinion of such Person, he or she has made such
examination or investigation as is necessary to enable him or her to express an informed
opinion as to whether or not such covenant or condition has been complied with; and

53

 

     (4) a statement as to whether or not, in the opinion of such Person, such condition or
covenant has been complied with.

SECTION 11.06 Rules by Trustee and Agents.

          The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar
or the Paying Agent may make reasonable rules and set reasonable requirements for its functions.

SECTION 11.07 Legal Holidays.

          If a payment date is a Legal Holiday at a Place of Payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.

SECTION 11.08 No Recourse Against Others.

          A director, officer, employee, stockholder, partner or other owner of the Company, a
Subsidiary Guarantor or the Trustee, as such, shall not have any liability for any obligations of
the Company under the Securities, for the obligations of any Subsidiary Guarantor under any
Guarantee, or for any obligations of the Company, any Subsidiary Guarantor or the Trustee under
this Indenture or for any claim based on, in respect of or by reason of such obligations or their
creation. Each Holder by accepting a Security waives and releases all such liability. The waiver
and release shall be part of the consideration for the issue of Securities.

SECTION 11.09 Governing Law.

          THIS INDENTURE, THE SECURITIES AND THE GUARANTEES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

SECTION 11.10 No Adverse Interpretation of Other Agreements.

          This Indenture may not be used to interpret another indenture, loan or debt agreement of the
Company, any Subsidiary Guarantor or any other Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.

SECTION 11.11 Successors.

          All agreements of the Company and each of the Subsidiary Guarantors in this Indenture and the
Securities shall bind their successors. All agreements of the Trustee in this Indenture shall bind
its successors.

SECTION 11.12 Severability.

          In case any provision in this Indenture or in the Securities or in any Guarantee shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining

54

 

provisions shall, to the fullest extent permitted by applicable law, not in any way be affected or
impaired thereby.

SECTION 11.13 Counterpart Originals.

          The parties may sign any number of copies of this Indenture. Each signed copy shall be an
original, but all of them together represent the same agreement.

SECTION 11.14 Table of Contents, Headings, etc.

          The table of contents, cross-reference table and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be considered a part
hereof and shall in no way modify or restrict any of the terms or provisions hereof.

55

 

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

	 	 	 	 	 
	 	CARRIZO OIL & GAS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	CCBM, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	CLLR, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	HONDO PIPELINE, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	WELLS FARGO BANK, NATIONAL ASSOCIATION,

     as Trustee

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

56

 

	 	 	 	 	 

ANNEX A

NOTATION OF GUARANTEE

          Each of the Subsidiary Guarantors (which term includes any successor Person under the
Indenture) has fully, unconditionally and absolutely guaranteed, to the extent set forth in the
Indenture and subject to the provisions in the Indenture, the due and punctual payment of the
principal of, and premium, if any, and interest on the Securities and all other amounts due and
payable under the Indenture and the Securities by the Company.

          The obligations of the Subsidiary Guarantors to the Holders of Securities and to the Trustee
pursuant to the Guarantee and the Indenture are expressly set forth in Article X of the Indenture
and reference is hereby made to the Indenture for the precise terms of the Guarantee.

	 	 	 	 	 	 	 
	 	 	[NAME OF SUBSIDIARY GUARANTOR]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

A-1

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