Document:

Exhibit 10.8

Exhibit 10.8

W. P. CAREY & CO. LLC

1997 SHARE INCENTIVE PLAN

(Amended through June 11, 2009)

The name of the plan is the W. P. Carey & Co. LLC 1997 Share Incentive Plan (the “Plan”). The
purpose of the Plan is to encourage and enable the officers, employees and Eligible Directors of W.
P. Carey & Co. LLC (the “Company”) and its Affiliates upon whose judgment, initiative and efforts
the Company largely depends for the successful conduct of its business to acquire a proprietary
interest in the Company. It is anticipated that providing such persons with a direct stake in the
Company’s welfare will assure a closer identification of their interests with those of the Company,
thereby stimulating their efforts on the Company’s behalf and strengthening their desire to remain
with the Company.

SECTION 1

Definitions

The following terms shall be defined as set forth below:

“Act” means the Securities Exchange Act of 1934, as amended.

“Affiliate” means any entity other than the Company and its Subsidiaries that is designated by
the Board or the Committee as a participating employer under the Plan.

“Award” or “Awards”, except where referring to a particular category of grant under the Plan,
shall include Incentive Listed Share Options, Non-Qualified Listed Share Options, Restricted Listed
Shares Awards, Restricted Share Units, Performance Share Awards, Performance Share Units and
Dividend Equivalent Rights.

“Board” means the Board of Directors of the Company.

“Cause” means and shall be limited to a vote of the Board to the effect that the participant
should be dismissed as a result of (i) any material breach by the participant of any agreement to
which the participant and the Company or an Affiliate are parties, (ii) any act (other than
retirement) or omission to act by the participant, including without limitation, the commission of
any crime (other than ordinary traffic violations) that may have a material and adverse effect on
the business of the Company or any Affiliate or on the participant’s ability to perform services
for the Company or any Affiliate, or (iii) any material misconduct or neglect of duties by the
participant in connection with the business or affairs of the Company or any Affiliate.

“Change of Control” is defined in Section 13.

 

 

 

“Code” means the Internal Revenue Code of 1986, as amended, and any successor Code, and
related rules, regulations and interpretations.

“Committee” means any Committee of the Board referred to in Section 2.

“Disability” means disability as set forth in Section 22(e)(3) of the Code.

“Dividend Equivalent Right” means a right, granted under Section 8, to receive cash, Listed
Shares or other property equal in value to dividends paid with respect to a specified number of
Listed Shares or the excess of dividends paid over a specified rate of return. Dividend Equivalent
Rights may be awarded on a free-standing basis or in connection with another Award, and may be paid
currently or on a deferred basis.

“Effective Date” means the date on which the Plan is approved by the Board as set forth in
Section 15.

“Eligible Director” means members of the Board who are employees of the Company, its
Subsidiaries or their Affiliates and who are not Non-Employee Directors.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the related
rules, regulations and interpretations.

“Fair Market Value” on any given date means the last reported sale price at which Listed Share
is traded on such date or, if no Listed Share is traded on such date, the most recent date on which
Listed Shares were traded, as reflected on the New York Stock Exchange or, if applicable, any other
national stock exchange which is the principal trading market for the Listed Shares.

“Incentive Listed Share Option” means any Listed Share option designated and qualified as an
“Incentive Stock Option” as defined in Section 422 of the Code.

“Listed Shares” means the Listed Shares of the Company, subject to adjustment pursuant to
Section 3.

“Non-Employee Director” means a member of the Board who: (i) is not currently an officer of
the Company or any Affiliate; (ii) does not receive compensation for services rendered to the
Company or any Affiliate in any capacity other than as a Director; (iii) does not possess an
interest in any transaction with the Company for which disclosure would be required under the
securities laws; or (iv) is not engaged in a business relationship with the Company for which
disclosure would be required under the securities laws.

“Non-Qualified Listed Share Option” means any Listed Share Option that is not an Incentive
Listed Share Option.

“Option” or “Listed Share Option” means any option to purchase Listed Shares granted pursuant
to Section 5.

 

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“Parent” means a “parent corporation” as defined in Section 424(e) of the Code.

“Performance Share Award” means Awards granted pursuant to Section 7.

“Performance Share Unit” means Awards granted pursuant to Section 7.

“Restricted Listed Share Award” means Awards granted pursuant to Section 6.

“Restricted Share Unit” means Awards granted pursuant to Section 6.

“Subsidiary” means any entity (other than the Company) in an unbroken chain of entities,
beginning with the Company if each of the entities (other than the last entity in the unbroken
chain) owns equity possessing 50% or more of the total combined voting power of all classes of
equity in one of the other entities in the chain.

SECTION 2

Administration of Plan; Committee Authority to Select Participants

and Determine Awards

(a) Committee. The Plan shall be administered by a committee of not less than two
directors, as appointed by the Board from time to time (the “Committee”) who are “non-employee
directors” as then defined under Rule 16b-3 of the Act.

(b) Powers of Committee. The Committee shall have the power and authority to grant
Awards consistent with the terms of the Plan, including the power and authority:

(i) to select the officers, employees and Eligible Directors of the Company and Affiliates to
whom Awards may from time to time be granted;

(ii) to determine the time or times of grant, and the extent, if any, of Incentive Listed
Share Options, Non-Qualified Listed Share Options, Restricted Listed Shares, Restricted Share
Units, Performance Shares, Performance Share Units and Dividend Equivalent Rights, or any
combination of the foregoing, granted to any officer, employee or Eligible Director;

(iii) to determine the number of Listed Shares to be covered by any Award granted to an
officer, employee, Eligible Director or Affiliate;

(iv) to determine and modify the terms and conditions, including restrictions, not
inconsistent with the terms of the Plan, of any Award granted to an officer, employee or Director,
which terms and conditions may differ among individual Awards and participants, and to approve the
form of written instruments evidencing the Awards;

(v) to accelerate the exercisability or vesting of all or any portion of any Award granted to
a participant;

(vi) subject to the provisions of Section 5(ii), to extend the period in which Listed Share
Options granted may be exercised;

 

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(vii) to determine whether, to what extent and under what circumstances Listed Shares and
other amounts payable with respect to an Award granted to a participant shall be deferred either
automatically or at the election of the participant and whether and to what extent the Company will
pay or credit amounts equal to interest (at rates determined by the Committee) or dividends or
deemed dividends on such deferrals; and

(viii) to adopt, alter and repeal such rules, guidelines administration of the Plan and for
its own acts and shall deem advisable; to interpret the terms and Plan and any Award (including
related written instruments) granted to a participant; and to decide all disputes arising in
connection with and make all determinations it deems advisable for the administration of the Plan.

All decisions and interpretations of the Committee shall be binding on all persons, including
the Company and Plan participants.

SECTION 3

Shares Issuable under the Plan; Mergers; Substitution

(a) Shares Issuable. The maximum number of Listed Shares reserved and available for
issuance under the Plan shall be 6,200,000. For purposes of this limitation, the Listed Shares
underlying any Awards, including Dividend Equivalent Rights, which are forfeited, canceled,
reacquired by the Company, satisfied without the issuance of Listed Shares or otherwise terminated
(other than by exercise) shall be added back to the Listed Shares available for issuance under the
Plan so long as the participants to whom such Awards had been previously granted received no
benefits of ownership of the underlying Listed Shares to which the Award related. Notwithstanding
the foregoing, the following Listed Shares shall not become available for purposes of the Plan:
(1) Listed Shares previously owned or acquired by an awardee that are delivered to the Company, or
withheld from an Award, to pay the exercise price, or (2) Listed Shares that are delivered or
withheld for purposes of satisfying a tax withholding obligation. Listed Shares issued under the
Plan may be unissued Listed Shares or Listed Shares reacquired by the Company.

(b) Listed Shares, Dividends, Mergers, etc. In the event of any recapitalization,
reclassification, split-up or consolidation of Listed Shares, separation (including a spin-off),
dividend on Listed Shares payable in securities of the Company (including Listed Shares), or other
similar change in capitalization of the Company or a merger or consolidation of the Company or sale
by the Company of all or a portion of its assets or other similar event, the Committee shall make
such appropriate adjustments in the exercise prices of Awards, including Awards then outstanding,
in the number and kind of securities, cash or other property which may be issued pursuant to Awards
under the Plan, including Awards then outstanding, and in the number of Listed Shares with respect
to which Awards may be granted (in the aggregate and to individual participants) as the Committee
deems equitable with a view toward maintaining the proportionate interest of the participant and
preserving the value of the Awards.

 

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(c) Substitute Awards. The Committee may grant Awards under the Plan in substitution
for share and share-based awards held by employees of another corporation who concurrently become
employees of the Company or an Affiliate as the result of a merger or consolidation of the
employing corporation with the Company or an Affiliate or the acquisition by the Company or an
Affiliate of property or Listed Shares of the employing corporation. The Committee may direct that
the substitute awards be granted on such terms and conditions as the Committee considers
appropriate in the circumstances.

SECTION 4

Eligibility

Participants in the Plan will be Eligible Directors and such full or part-time officers and
other employees of the Company and its Affiliates who are responsible for or contribute to the
management, growth or profitability of the Company and its Affiliates and who are selected from
time to time by the Committee, in its sole discretion.

SECTION 5

Listed Share Options

Any Listed Share Option granted under the Plan shall be in such form as the Committee may from
time to time approve. Listed Share Options granted under the Plan may be either Incentive Listed
Share Options, subject to any required approval of the holders of Listed Shares, or Non-Qualified
Listed Share Options. To the extent that any option does not qualify as an Incentive Listed Share
Option, it shall constitute a Non-Qualified Listed Share Option. No Incentive Listed Share Option
may be granted under the Plan after the tenth anniversary of the Effective Date.

The Committee in its discretion may grant Listed Share Options to employees of the Company or
any Affiliate. Listed Share Options granted to Eligible Directors and employees pursuant to this
Section 5 shall be subject to the following terms and conditions and shall contain such additional
terms and conditions, not inconsistent with the terms of the Plan, as the Committee shall deem
desirable:

(i) Exercise Price. The per share exercise price of a Listed Share Option granted
pursuant to this Section 5 shall be determined by the Committee at the time of grant. The per
share exercise price of a Listed Share Option shall not be less than 100% of Fair Market Value on
the date of grant. If an employee owns or is deemed to own (by reason of the attribution rules
applicable under Section 424(d) of the Code) more than 10% of the combined voting power of all
classes of equity of the Company or any Subsidiary or Parent corporation and an Incentive Listed
Share Option is granted to such employee, the option price shall be not less than 110% of Fair
Market Value on the grant date.

(ii) Option Term. The term of each Listed Share Option shall be fixed by the
Committee, but no Listed Share Option shall be exercisable more than ten years after the date the
option is granted. If an employee owns or is deemed to own (by reason of the attribution rules of
Section 424(d) of the Code) more than 10% of the combined voting power of all classes of equity of
the Company or any Subsidiary or Parent and an Incentive Listed Share Option is
granted to such employee, the term of such option shall be no more than five years from the date of
grant.

 

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(iii) Exercisability; Rights of a Shareholder. Listed Share Options shall become
exercisable at such time or times, whether or not in installments, as shall be determined by the
Committee at or after the grant date. The Committee may at any time accelerate the exercisability
of all or any portion of any Listed Share Option. An optionee shall have the rights of a
shareholder only as to Listed Shares acquired upon the exercise of a Listed Share Option and not as
to unexercised Listed Share Options.

(iv) Method of Exercise. Listed Share Options may be exercised in whole or in part,
by giving written notice of exercise to the Company, specifying the number of Listed Shares to be
purchased. Payment of the purchase price may be made by one or more of the following methods:

(A) In cash (by certified, bank check, money order or other instrument acceptable to the
Committee);

(B) In the form of delivered Listed Shares that are not then subject to restrictions, or
Listed Shares withheld from the exercise of the Award, in either case if permitted by the Committee
in its discretion. Such surrendered or withheld shares shall be valued at Fair Market Value on the
exercise date;

(C) Any combination of cash and such Listed Shares, if the use of Listed Shares is permitted
by the Committee in its discretion, in the amount of the full purchase price for the number of
Listed Shares as to which the Option is exercised; provided, however, that any portion of the
option price representing a fraction of a share shall be paid by the Optionee in cash; or

(D) By the optionee delivering to the Company a properly executed exercise notice together
with irrevocable instructions to a broker to promptly deliver to the Company cash or a check
payable and acceptable to the Company to pay the purchase price; provided that in the event the
optionee chooses to pay the purchase price as so provided, the optionee and the broker shall comply
with such procedures and enter into such agreements of indemnity and other agreements as the
Committee shall prescribe as a condition of such payment procedure. Payment instruments will be
received subject to collection.

The delivery of certificates representing Listed Shares to be purchased pursuant to the
exercise of the Listed Share Option will be contingent upon receipt from the Optionee (or a
purchaser acting in his stead in accordance with the provisions of the Listed Share Option) by the
Company of the full purchase price for such shares and the fulfillment of any other requirements
contained in the Listed Share Option or applicable provisions of laws.

(v) Non-transferability of Options. No Listed Share Option shall be transferable by
the optionee otherwise than by will or by the laws of descent and distribution, except that (A)
Non-Qualified Listed Share Options may be transferred by gifting for the benefit
of a participant’s descendants for estate planning purposes or pursuant to a certified domestic
relations order and (B) Vested Listed Share Options may be transferred by an optionee.

 

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(vi) Termination by Death. If any optionee’s service with the Company and its
Affiliates terminates by reason of death, the Listed Share Option may thereafter be exercised, to
the extent exercisable at the date of death, or to the full extent of the option, at the
Committee’s discretion, by the legal representative or legatee of the optionee, for a period of six
months (or such longer period as the Committee shall specify at any time) from the date of death,
or until the expiration of the stated term of the Option, if earlier.

(vii) Termination by Reason of Disability.

(A) Any Listed Share Option held by an optionee whose service with the Company and its
Affiliates has terminated by reason of Disability may thereafter be exercised, to the extent it was
exercisable at the time of such termination or to the full extent of the option, at the Committee’s
discretion, for a period of twelve months (or such longer period as the Committee shall specify at
any time) from the date of such termination of service, or until the expiration of the stated term
of the Option, if earlier.

(B) The Committee shall have sole authority and discretion to determine whether a
participant’s service has been terminated by reason of Disability.

(C) Except as otherwise provided by the Committee at the time of grant or otherwise, the death
of an optionee during a period provided in this Section 5(vii) for the exercise of a Non-Qualified
Listed Share Option shall extend such period for six months from the date of death, subject to
termination on the expiration of the stated term of the Option, if earlier.

(viii) Termination for Cause. If any optionee’s service with the Company or its
Affiliates has been terminated for Cause, any Listed Share Option held by such optionee shall
immediately terminate and be of no further force and effect; provided, however, that the Committee
may, in its sole discretion, provide that such Listed Share Option can be exercised for a period of
up to 30 days from the date of termination of service or until the expiration of the stated term of
the Option, if earlier.

(ix) Other Termination. Unless otherwise determined by the Committee, if an
optionee’s service with the Company and its Affiliates terminates for any reason other than death,
Disability, or for Cause, any Listed Share Option held by such optionee may thereafter be exercised
for such period, as the Committee shall specify at any time but in no event later than the
expiration of the stated term of the option.

(x) Annual Limit on Incentive Listed Share Options. To the extent required for
“Incentive Stock Option” treatment under Section 422 of the Code, the aggregate Fair Market Value
(determined as of the time of grant) of the Listed Shares with respect to which Incentive Listed
Share Options granted under this Plan and any other plan of the Company or its
Subsidiaries become exercisable for the first time by an optionee during any calendar year shall
not exceed $100,000.

(xi) Restrictions on Listed Shares. Listed Shares issued upon exercise of a Listed
Share Option shall be free of all restrictions under the Plan, except as otherwise provided herein.

 

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SECTION 6

Restricted Listed Share Awards and Restricted Share Units

(a) Nature of Restricted Listed Share Award and Restricted Share Units. The Committee
may grant Restricted Listed Share Awards and Restricted Share Units to Eligible Directors and
employees of the Company or any Affiliate. A Restricted Listed Share Award is an Award entitling
the recipient to acquire, at no cost or for a purchase price determined by the Committee, Listed
Shares subject to such restrictions and conditions as the Committee may determine at the time of
grant (“Restricted Listed Shares”). A Restricted Share Unit represents a right to receive Listed
Shares or cash based upon conditions as the Committee may determine at the time of grant
(“Restricted Share Units”). Conditions may be based on continuing service and/or achievement of
pre-established performance goals and objectives. In addition, a Restricted Listed Share Award or
Restricted Share Unit may be granted to an Eligible Director or employee by the Committee in lieu
of, or in addition to, any compensation due to such Eligible Director or employee.

(b) Acceptance of Award. A participant who is granted a Restricted Listed Share Award
or Restricted Share Unit which requires the making of a payment to the Company shall have no rights
with respect to such Award unless the participant shall have accepted the Award within 60 days (or
such shorter date as the Committee may specify) following the award date by making payment to the
Company by certified or bank check or other instrument or form of payment acceptable to the
Committee in an amount equal to the specified purchase price, if any, of the Listed Shares, covered
by the Award and by executing and delivering to the Company a written instrument that sets forth
the terms and conditions of the Restricted Listed Shares or Restricted Share Unit in such form as
the Committee shall determine.

(c) Rights as a Shareholder. Upon complying with Section 6(b) above, a participant
shall have all the rights of a shareholder with respect to the Restricted Listed Shares including
voting and dividend rights, subject to transferability restrictions and Company repurchase or
forfeiture rights described in this Section 6 and subject to such other conditions contained in the
written instrument evidencing the Restricted Listed Share Award. Unless the Committee shall
otherwise determine, certificates evidencing shares of Restricted Listed Shares shall remain in the
possession of the Company until such shares are vested as provided in Section 6(e) below. Holders
of Restricted Share Units shall not have the rights of shareholders until Listed Shares are issued
in satisfaction thereof, but may have Dividend Equivalent Rights, as determined by the Committee.

 

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(d) Restrictions. Restricted Listed Shares and Restricted Share Units may not be
sold, assigned, transferred, pledged or otherwise encumbered or disposed of except as specifically
provided herein.

(e) Vesting of Restricted Listed Shares and Restricted Share Units. The Committee at
the time of grant shall specify the date or dates and/or the attainment of pre-established
performance goals, objectives and other conditions on which the non-transferability of the
Restricted Listed Shares and Restricted Share Units and the Company’s right of repurchase or
forfeiture shall lapse. Subsequent to such date or dates and/or the attainment of such
pre-established performance goals, objectives and other conditions, the Listed Shares on which all
restrictions have lapsed shall no longer be Restricted Listed Shares or Restricted Share Units and
shall be deemed “vested.”

(f) Waiver, Deferral and Reinvestment of Dividends. The written instrument evidencing
the Restricted Listed Share Award and/or Restricted Share Unit may require or permit the immediate
payment, waiver, deferral or investment of dividends or Dividend Equivalent Rights paid on the
Restricted Listed Shares or Restricted Share Units.

SECTION 7

Performance Share Awards and Performance Share Units

(a) Nature of Performance Shares and Performance Share Units. A Performance Share
Award is an award entitling the recipient to acquire Listed Shares upon the attainment of specified
performance goals. A Performance Share Unit represents a right to receive Listed Shares or cash
based upon the achievement, or level of achievement, of one or more performance goals established
by the Committee at the time of grant. The Committee may make Performance Share Awards and
Performance Share Unit Awards independent of or in connection with the granting of any other Award
under the Plan. Performance Share Awards and Performance Share Units may be granted under the Plan
to Eligible Directors and employees of the Company or any Affiliate, including those who qualify
for awards under other performance plans of the Company. The Committee in its sole discretion
shall determine whether and to whom Performance Share Awards and Performance Share Units shall be
made, the performance goals applicable under each such Award, the periods during which performance
is to be measured, and all other limitations and conditions applicable to the awarded Performance
Shares and Performance Share Units; provided, however, that the Committee may rely on the
performance goals and other standards applicable to other performance based plans of the Company in
setting the standards for Performance Share Awards and Performance Share Units under the Plan.

(b) Restrictions on Transfer. Performance Share Awards and Performance Share Units
and all rights with respect to such Awards may not be sold, assigned, transferred, pledged or
otherwise encumbered.

 

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(c) Rights as a Shareholder. A participant receiving a Performance Share Award shall
have the rights of a shareholder only as to Listed Shares actually received by the participant
under the Plan and not with respect to Listed Shares subject to the Award but not
actually received by the participant. A participant shall be entitled to receive a Listed Share
certificate evidencing the acquisition of Listed Shares under a Performance Share Award only upon
satisfaction of all conditions specified in the written instrument evidencing the Performance Share
Award (or in a performance plan adopted by the Committee). Holders of Performance Share Units
shall not have the rights of shareholders until Listed Shares are issued in satisfaction thereof,
but may have Dividend Equivalent Rights, as determined by the Committee. The written instrument
evidencing the Performance Share Award and/or Performance Share Unit may require or permit the
immediate payment, waiver, deferral or investment of dividends or Dividend Equivalent Rights paid
on the Performance Award and/or Performance Share Units.

(d) Termination. Except as may otherwise be provided by the Committee at any time
prior to termination of service, a participant’s rights in all Performance Share Awards and
Performance Share Unit Awards shall automatically terminate upon the participant’s termination of
service with the Company and its Affiliates for any reason (including, without limitation, death,
Disability and for Cause).

(e) Acceleration, Waiver, Etc. At any time prior to the participant’s termination of
service with the Company and its Affiliates, the Committee may in its sole discretion accelerate,
waive or, subject to Section 12, amend any or all of the goals, restrictions or conditions imposed
under any Performance Share Award or Performance Share Unit; provided, however, that in no event
shall any provision of the Plan be construed as granting to the Committee any discretion to
increase the amount of compensation payable under any Performance Share Award or Performance Share
Unit to the extent such an increase would cause the amounts payable pursuant to the Performance
Share Award to be nondeductible in whole or in part pursuant to Section 162(m) of the Code and the
regulations thereunder, and the Committee shall have no such discretion notwithstanding any
provision of the Plan to the contrary.

SECTION 8

Dividend Equivalent Rights

A Dividend Equivalent Right is an Award entitling the recipient to receive credits based on
cash distributions that would be paid on the Listed Shares specified in the Dividend Equivalent
Right (or other award to which it relates) if such shares were held by the recipient. A Dividend
Equivalent Right may be granted hereunder to any participant as a component of another Award or as
a freestanding Award. The terms and conditions of Dividend Equivalent Rights shall be specified in
the grant. Dividend Equivalent Rights credited to a participant may be paid currently or may be
deemed to be reinvested in additional Listed Shares. Any such reinvestment shall be at Fair Market
Value on the date of reinvestment or such other price as may then apply under a dividend
reinvestment plan sponsored by the Company, if any. Dividend Equivalent Rights may be settled in
cash or Listed Shares or a combination thereof, in a single installment or installments. A
Dividend Equivalent Right granted as a component of another Award may provide that such Dividend
Equivalent Right shall be settled upon exercise, settlement, or payment of, or lapse of
restrictions on, such other award, and that such Dividend Equivalent Right shall expire or be
forfeited or annulled under the same conditions as such other award. A Dividend Equivalent Right
granted as a component or another Award may also contain terms and conditions different from such
other award.

 

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SECTION 9

Tax Withholding

(a) Payment by Participant. Each participant shall, no later than the date as of
which the value of an Award or of any Listed Shares or other amounts received thereunder first
becomes includible in the gross income of the participant for Federal income tax purposes, pay to
the Company, or make arrangements satisfactory to the Committee regarding payment of, any Federal,
state, or local taxes of any kind required by law to be withheld with respect to such income. The
Company and its Affiliates shall, to the extent permitted by law, have the right to deduct any such
taxes from any payment of any kind otherwise due to the participant.

(b) Payment in Shares. A participant may elect to have such tax withholding
obligation satisfied, in whole or in part, by (i) authorizing the Company to withhold from Listed
Shares to be issued pursuant to any Award a number of shares with an aggregate Fair Market Value
(as of the date the withholding is effected) that would satisfy the withholding amount due, or (ii)
transferring to the Company Listed Shares owned by the participant with an aggregate Fair Market
Value (as of the date the withholding is effected) that would satisfy the withholding amount due.

SECTION 10

Transfer, Leave of Absence, Etc.

For purposes of the Plan, the following events shall not be deemed a termination of service:

(a) a transfer to the employment of the Company from an Affiliate or from the Company to an Affiliate, or from one Affiliate to another; and

(b) an approved leave of absence for military service or sickness, or for any other purpose
approved by the Company, if the employee’s right to re-employment is guaranteed either by a statute
or by contract or under the policy pursuant to which the leave of absence was granted or if the
Committee otherwise so provides in writing.

SECTION 11

Amendments and Termination

The Board may at any time amend or discontinue the Plan and the Committee may at any time
amend or cancel any outstanding Award (or provide substitute Awards at the same or reduced exercise
or purchase price or with no exercise or purchase price, but such price, if any, must satisfy the
requirements which would apply to the substitute or amended Award if it were then initially granted
under this Plan) for the purpose of satisfying changes in law or for any other lawful purpose, but
no such action shall adversely affect rights under any outstanding Award without the holder’s
consent.

 

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SECTION 12

Status of Plan

With respect to the portion of any Award which has not been exercised and any payments in
cash, Listed Shares or other consideration not received by a participant, a participant shall have
no rights greater than those of a general unsecured creditor of the Company unless the Committee
shall otherwise expressly determine in connection with any Award or Awards. In its sole
discretion, the Committee may authorize the creation of trusts or other arrangements to meet the
Company’s obligations to deliver Listed Shares or make payments with respect to Awards hereunder,
provided that the existence of such trusts or other arrangements is consistent with the provision
of the foregoing sentence.

SECTION 13

Change of Control Provisions

Upon the occurrence of a Change of Control as defined in this Section 13:

(a) Each Listed Share Option shall automatically become fully exercisable unless the Committee
shall otherwise expressly provide at the time of grant.

(b) Restrictions and conditions on Awards of Restricted Listed Shares, Restricted Share Units,
Performance Shares, Performance Share Units and Dividend Equivalent Rights shall automatically be
deemed waived, and the recipients of such Awards shall become entitled to receipt of the maximum
amount of Listed Shares subject to such Awards unless the Committee shall otherwise expressly
provide at the time of grant.

(c) Unless otherwise expressly provided at the time of grant, participants who hold Listed
Share Options shall have the right, in lieu of exercising the Option, to elect to surrender all or
part of such Option to the Company and to receive cash in an amount equal to the excess of (i) the
higher of (x) the Fair Market Value of a Listed Share on the date such right is exercised and (y)
the highest price paid for Listed Shares or, in the case of securities convertible into Listed
Shares or carrying a right to acquire Listed Shares, the highest effective price (based on the
prices paid for such securities) at which such securities are convertible into Listed Shares or at
which Listed Shares may be acquired, by any person or group whose acquisition of voting securities
has resulted in a Change of Control of the Company over (ii) the exercise price per share under the
Option, multiplied by the number of shares of Listed Shares with respect to which such right is
exercised.

(d) “Change of Control” shall mean the occurrence of any one of the following events:

(i) any “person”, as such term is used in Sections 13(d) and 14(d) of the Act (other than Wm.
Polk Carey, the Carey Family, the W. P. Carey Foundation, the Company, any of its Subsidiaries, any
trustee, fiduciary or other person or entity holding securities under any employee benefit plan of
the Company or any of its Subsidiaries), together with all “affiliates” and “associates” (as such
terms are defined in Rule 12b-2 under the Act) of such person, shall become the “beneficial owner”
(as such term is defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the
Company representing 25% or more of either (A) the combined voting power of the Company’s then
outstanding securities having the right to vote in an election
of the Company’s Board of Eligible Directors (“Voting Securities”) or (B) the then outstanding
shares of Listed Shares of the Company (in either such case other than as a result of acquisition
of securities directly from the Company); or

 

12

 

(ii) persons (as defined in the previous subsection) who, as of June 11, 2009, constitute the
Company’s Board of Eligible Directors (the “Incumbent Eligible Directors”) cease for any reason,
including without limitation, as a result of a tender offer, proxy contest, merger or similar
transaction, to constitute at least a majority of the Board, provided that any person becoming a
Eligible Director of the Company subsequent to such date whose election or nomination for election
was approved by a vote of at least a majority of the Incumbent Eligible Directors shall, for
purposes of this Plan, be considered an Incumbent Eligible Director; or

(iii) the Listed Shareholders of the Company shall approve (A) any consolidation or merger of
the Company or any Subsidiary where the Listed Shareholders of the Company, immediately prior to
the consolidation or merger, would not, immediately after the consolidation or merger, beneficially
own (as such term is defined in Rule 13d-3 under the Act), directly or indirectly, shares
representing in the aggregate 50% or more of the voting equity of the entity issuing cash or
securities in the consolidation or merger (or of its ultimate parent entity, if any), (B) any sale,
lease, exchange or other transfer (in one transaction or a series of transactions contemplated or
arranged by any party as a single plan) of all or substantially all of the assets of the Company
other than to an entity with respect to which, following such sale or disposition, the Listed
Shareholders of the Company immediately prior to the sale own more than eighty percent (80%) of,
respectively, the outstanding shares of stock and the combined voting power of the outstanding
voting securities entitled to vote generally in the election of the board of such entity, or (C)
any plan or proposal for the liquidation or dissolution of the Company;

Notwithstanding the foregoing, a “Change of Control” shall not be deemed to have occurred for
purposes of the foregoing clause (i) solely as the result of an acquisition of securities by the
Company which, by reducing the number of shares of Listed Shares outstanding, increases (x) the
proportionate number of Listed Shares beneficially owned by any person to 25% or more of the Listed
Shares then outstanding or (y) the proportionate voting power represented by the Listed Shares
beneficially owned by any person to 25% or more of the combined voting power of all then
outstanding voting Securities; provided, however, that if any person referred to in clause
(x) or (y) of this sentence shall thereafter become the beneficial owner of any additional Listed
Shares or other Voting Securities (other than pursuant to a Listed Shares split, Listed Shares
dividend, or similar transaction), then a “Change of Control” shall be deemed to have occurred for
purposes of the foregoing clause (i). For purposes of the foregoing, “Carey Family” shall mean Wm.
Polk Carey, his spouse, and lineal descendants and his brothers and brothers-in-law, sisters and
sisters-in-law and each of their lineal descendants.

 

13

 

SECTION 14

General Provisions

(a) No Distribution; Compliance with Legal Requirements. The Committee may require
each person acquiring shares pursuant to an Award to represent to and agree with
the Company in writing that such person is acquiring the shares without a view to distribution
thereof.

No shares of Listed Shares shall be issued pursuant to an Award until all applicable
securities laws and other legal and Listed Shares exchange requirements have been satisfied. The
Committee may require the placing of such stop-orders and restrictive legends on certificates for
Listed Shares and Awards as it deems appropriate.

(b) Delivery of Listed Shares Certificates. Delivery of Listed Shares certificates to
participants under this Plan shall be deemed effected for all purposes when the Company or a Listed
Shares transfer agent of the Company shall have delivered such certificates in the United States
mail, addressed to the participant, at the participant’s last known address on file with the
Company.

(c) Other Compensation Arrangements; No Employment Rights. Nothing contained in this
Plan shall prevent the Board from adopting other or additional compensation arrangements, including
trusts, subject to Listed Shareholder approval if such approval is required; and such arrangements
may be either generally applicable or applicable only in specific cases. The adoption of the Plan
and the grant of Awards do not confer upon any employee any right to continued employment with the
Company or any Subsidiary.

SECTION 15

Effective Date of Plan

The Plan shall become effective upon approval by the Board, or any committee thereof with such
authority. The ability to grant Incentive Listed Share Option Awards requires approval by the
Listed Shareholders, and no such Awards may be issued hereunder prior to such approval.

SECTION 16

Governing Law

This plan shall be governed by, and construed and enforced in accordance with, the laws of the
State of New York, to the extent applicable.

 

14exv10w1

Exhibit 10.1

EXECUTION COPY

TAX SHARING AGREEMENT

BETWEEN

PRIDE INTERNATIONAL, INC.

AND

SEAHAWK DRILLING, INC.

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	SECTION
1. Definition of Terms.
	 	 	-1-	 
	 
	 	 	 	 
	SECTION
2. Allocation of Tax Liabilities and Tax Benefits.
	 	 	-7-	 
	 
	 	 	 	 
	2.1 Liability for and the Payment of Taxes.
	 	 	-7-	 
	(a) Seahawk Liabilities and Payments.
	 	 	-7-	 
	(b) Pride Liabilities and Payments.
	 	 	-8-	 
	(c) Tax Benefits.
	 	 	- 9-	 
	2.2 Allocation Rules.
	 	 	-10-	 
	(a) General Rule.
	 	 	-10-	 
	(b) Taxes Resulting from the Internal Distribution or the External
Distribution.
	 	 	-10-	 
	 
	 	 	 	 
	SECTION
3. Preparation and Filing of Tax Returns.
	 	 	-10-	 
	 
	 	 	 	 
	3.1 Joint Returns.
	 	 	-10-	 
	(a) Preparation of Joint Returns.
	 	 	-10-	 
	(b) Provision of Information and Assistance.
	 	 	-11-	 
	3.2 Separate Returns.
	 	 	-12-	 
	(a) Tax Returns to be Prepared by Pride.
	 	 	-12-	 
	(b) Tax Returns to be Prepared by Seahawk.
	 	 	-12-	 
	(c) Provision of Information.
	 	 	-12-	 
	3.3 Special Rules Relating to the Preparation of Tax Returns.
	 	 	-12-	 
	(a) General Rule.
	 	 	-12-	 
	(b) Seahawk Tax Returns.
	 	 	-13-	 
	(c) Election to File Consolidated, Combined or Unitary Tax Returns.
	 	 	-13-	 
	(d) Carrybacks of Tax Benefits.
	 	 	-13-	 
	(e) Withholding and Reporting.
	 	 	-13-	 
	(f) Standard of Performance.
	 	 	-14-	 
	3.4 Reliance on Exchanged Information.
	 	 	-14-	 
	3.5 Allocation of Tax Items.
	 	 	-14-	 
	 
	 	 	 	 
	SECTION
4. Tax Payments.
	 	 	-15-	 
	 
	 	 	 	 
	4.1 Payment of Taxes to Tax Authority.
	 	 	-15-	 
	4.2 Indemnification Payments.
	 	 	-15-	 
	(a) Tax Payments Made by the Pride Group.
	 	 	-15-	 
	(b) Tax Payments Made by the Seahawk Group.
	 	 	-15-	 
	(c) Credit for Prior Deemed Tax Payments.
	 	 	-15-	 
	(d) Payments for Tax Benefits.
	 	 	-15-	 
	4.3 Initial Determinations and Subsequent Adjustments.
	 	 	-16-	 
	4.4 Interest on Late Payments.
	 	 	-16-	 
	4.5 Payments by or to Other Group Members.
	 	 	-16-	 
	4.6 Procedural Matters.
	 	 	-17-	 
	4.7 Tax Consequences of Payments.
	 	 	-17-	 
	 
	 	 	 	 
	SECTION
5. Assistance and Cooperation.
	 	 	-17-	 
	 
	 	 	 	 
	5.1 Cooperation.
	 	 	-17-	 

i

 

	 	 	 	 	 
	5.2 Supplemental Rulings and Supplemental Tax Opinions.
	 	 	-18-	 
	 
	 	 	 	 
	SECTION
6. Tax Records.
	 	 	-18-	 
	 
	 	 	 	 
	6.1 Retention of Tax Records.
	 	 	-18-	 
	6.2 Access to Tax Records.
	 	 	-18-	 
	6.3 Confidentiality.
	 	 	-19-	 
	 
	 	 	 	 
	SECTION
7. Tax Contests.
	 	 	-19-	 
	 
	 	 	 	 
	7.1 Notices.
	 	 	-19-	 
	7.2 Control of Tax Contests.
	 	 	-19-	 
	(a) General Rule.
	 	 	-19-	 
	(b) Non-Preparer
Participation Rights.
	 	 	-20-	 
	7.3 Cooperation.
	 	 	-20-	 
	 
	 	 	 	 
	SECTION
8. Restriction on Certain Actions of Pride and Seahawk.
	 	 	-21-	 
	 
	 	 	 	 
	8.1 General Restrictions.
	 	 	-21-	 
	8.2 Restricted Actions Relating to Tax Materials.
	 	 	-21-	 
	8.3 Certain Seahawk Actions Following the Effective Time.
	 	 	-21-	 
	 
	 	 	 	 
	SECTION
9. General Provisions.
	 	 	-22-	 
	 
	 	 	 	 
	9.1 Limitation of Liability.
	 	 	-22-	 
	9.2 Entire Agreement.
	 	 	-22-	 
	9.3 Governing Law.
	 	 	-22-	 
	9.4 Termination.
	 	 	-22-	 
	9.5 Notices.
	 	 	-22-	 
	9.6 Counterparts.
	 	 	-23-	 
	9.7 Binding Effect; Assignment.
	 	 	-23-	 
	9.8 No Third Party Beneficiaries.
	 	 	-23-	 
	9.9 Severability.
	 	 	-23-	 
	9.10 Failure or Indulgence Not Waiver; Remedies Cumulative.
	 	 	-23-	 
	9.11 Amendments; Waivers.
	 	 	-23-	 
	9.12 Authority.
	 	 	-24-	 
	9.13 Construction.
	 	 	-24-	 
	9.14 Interpretation.
	 	 	-24-	 
	9.15 Predecessors or Successors.
	 	 	-24-	 
	9.16 Expenses.
	 	 	-25-	 
	9.17 Effective Time.
	 	 	-25-	 
	9.18 Change in Law.
	 	 	-25-	 
	9.19 Disputes.
	 	 	-25-	 
	 
	 	 	 	 
	APPENDIX
A
	 	 	-27-	 

ii

 

TAX SHARING AGREEMENT

          THIS TAX SHARING AGREEMENT (this “Agreement”) is entered into as of August 4, 2009, between
Pride International, Inc., a Delaware corporation (“Pride”), and Seahawk Drilling, Inc., a Delaware
corporation (“Seahawk”). Unless otherwise indicated, all “Section” references in this Agreement
are to sections of this Agreement.

RECITALS

          WHEREAS, Seahawk is a wholly owned Subsidiary of Pride; and

          WHEREAS, the Board of Directors of Pride has determined that it would be appropriate and
desirable for Pride to separate the Seahawk Group from the Pride Group, as contemplated by the
Master Separation Agreement (the “Separation”); and

          WHEREAS, in furtherance thereof, the Board of Directors of Pride has determined that, in
connection with the Separation, it would be appropriate and desirable for (i) Seahawk to contribute
certain assets and liabilities to Deepwater USA, Inc. (“DeepCo”) and to distribute its entire
interest in the stock of DeepCo to Pride in what is intended to qualify as a tax-free transaction
described under Sections 368(a)(1)(D) and 355 of the Code (the “Internal Distribution”), and (ii)
Pride to distribute its entire interest in the stock of Seahawk on a pro rata basis to holders of
Pride Common Stock in what is intended to qualify as a tax-free transaction described under Section
355 of the Code (the “External Distribution”); and

          WHEREAS, the Board of Directors of Seahawk has also approved such transactions; and

          WHEREAS, the parties set forth in a Master Separation Agreement the principal arrangements
between them regarding the separation of the Seahawk Group from the Pride Group; and

          WHEREAS, the parties desire to provide for and agree upon the allocation between the parties
of Taxes and Tax Benefits arising prior to, as a result of, and subsequent to the External
Distribution, and provide for and agree upon other matters relating to Taxes.

          NOW, THEREFORE, in consideration of the foregoing and the covenants and agreements set forth
below, the parties hereto agree as follows:

          SECTION 1. Definition of Terms. For purposes of this Agreement (including the recitals hereof), the following
terms have the following meanings:

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

-1-

 

          “Agreement” has the meaning set forth in the preamble hereof.

          “Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time, or any
successor law.

          “Control” means, with respect to any Person, the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of such Person, whether
through ownership of securities or partnership, membership, limited liability company, or other
ownership interests, by contract or otherwise and the terms “Controlling” and “Controlled” have
meanings correlative to the foregoing.

          “Deepwater Drilling Business” has the meaning set forth in the Ruling Request.

          “DeepCo” has the meaning set forth in the recitals hereof.

          “Disclosing Party” has the meaning set forth in Section 6.3.

          “Distribution Date” means the date on which the External Distribution occurs.

          “Distribution Taxes” has the meaning set forth in Section 2.2(b).

          “Due Date” has the meaning set forth in Section 4.4.

          “Effective Time” means the time at which the External Distribution is effected on the
Distribution Date.

          “External Distribution” has the meaning set forth in the recitals hereof.

          “Group” means the Pride Group or the Seahawk Group, as the context requires.

          “Internal Distribution” has the meaning set forth in the recitals hereof.

          “IRS” means the Internal Revenue Service.

          “IRS Submissions” means the Ruling Request, each supplemental submission and any other
correspondence or supplemental materials submitted to the IRS in connection with obtaining the
Ruling.

          “Joint Return” means any Tax Return, for any Tax Year, that includes Tax Items of both the
Pride Business and the Seahawk Business, determined without regard to Tax Items carried forward to
such Tax Year.

          “Losses” means any and all damages, losses, deficiencies, liabilities, obligations, Taxes,
penalties, judgments, settlements, claims, payments, fines, interest, costs and expenses
(including, without limitation, the fees and expenses of any and all actions and demands,
assessments, judgments, settlements and compromises relating

-2-

 

thereto and the costs and expenses of
attorneys’, accountants’, consultants’ and other professionals’ fees and expenses incurred in the
investigation or defense thereof or the enforcement of rights hereunder), including direct and
consequential damages.

          “Management Business” has the meaning set forth in the Ruling Request.

          “Master Separation Agreement” means the Master Separation Agreement entered into as of the
date set forth above, between Pride and Seahawk.

          “Non-Preparer” means the party that is not responsible for the preparation and filing of the
Joint Return or Separate Return, as applicable, pursuant to Sections 3.1(a) or 3.2.

          “Payment Date” means (x) with respect to any U.S. federal income tax return, the due date for
any required installment of estimated taxes determined under Code Section 6655, the due date
(determined without regard to extensions) for filing the return determined under Code Section 6072,
and the date the return is filed, and (y) with respect to any other Tax Return, the corresponding
dates determined under the applicable Tax Law.

          “Permitted Financial Institution” means any domestic commercial bank having capital and
surplus in excess of $5.0 billion and whose long-term debt is rated “A” or the equivalent thereof
by Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings
agency).

          “Person” means any individual, corporation, company, partnership, trust, incorporated or
unincorporated association, joint venture or other entity of any kind.

          “Preparer” means the party that is responsible for the preparation and filing of the Joint
Return or Separate Return, as applicable, pursuant to Sections 3.1(a) or 3.2.

          “Pride” has the meaning set forth in the preamble hereof.

          “Pride Business” means, with respect to any Tax Year (or portion thereof), the assets,
activities and related liabilities of Pride and its Subsidiaries during such Tax Year (or portion
thereof), but not including the assets, activities and related liabilities constituting a part of
the Seahawk Business for such Tax Year (or portion thereof).

          “Pride Common Stock” means the Pride common stock, par value $.01 per share, and any series or
class of stock into which the Pride common stock is redesignated, reclassified, converted or
exchanged following the Effective Time.

          “Pride Group” means Pride and each Subsidiary of Pride (but only while such Subsidiary is a
Subsidiary of Pride) other than any Person that is a member of the Seahawk Group (but only during
the period such Person is a member of the Seahawk Group).

-3-

 

          “Receiving Party” has the meaning set forth in Section 6.3.

          “Requesting Party” has the meaning set forth in Section 5.2.

          “Ruling” means PLR 112185-09, which was issued to Pride on May 4, 2009, as supplemented by PLR
129247-09, which was issued to Pride on July 9, 2009.

          “Ruling Request” means the requests for rulings, dated March 2, 2009, and June 12, 2009, filed
by Pride with the IRS in connection with the Distribution and any other correspondence or
supplemental materials submitted to the IRS in connection with obtaining the Ruling.

          “Seahawk” has the meaning set forth in the preamble hereof.

          “Seahawk Business” means:

               (a) with respect to any Tax Year (or portion thereof) that ended on or before December 31,
2008, (i) the assets, activities and related liabilities of Pride and its Subsidiaries, to the
extent such assets and activities were situated in the Gulf of Mexico during such Tax Year (or
portion thereof) and (ii) any other assets, activities and related liabilities of Seahawk and the
Seahawk Subsidiaries, regardless of where such assets and activities were situated during such Tax
Year (or portion thereof); but not including, in each case (i) and (ii) above, any assets,
activities and related liabilities of Pride, Seahawk and their respective Subsidiaries, to the
extent such assets and activities were or related to the deepwater services management contracts
with respect to the Thunderhorse, Mad Dog and Holstein rigs;

               (b) with respect to any Tax Year (or portion thereof) that begins after December 31, 2008, and
ends on or before the Distribution Date, (i) the assets, activities and related liabilities of
Pride and its Subsidiaries, to the extent such assets and activities were situated in the Gulf of
Mexico during such Tax Year (or portion thereof) and (ii) any other assets, activities and related
liabilities of Seahawk and the Seahawk Subsidiaries, regardless of where such assets and activities
were situated during such Tax Year (or portion thereof); but not including, in each case (i) and
(ii) above, any assets (other than the stock of DeepCo), activities and related liabilities of
Pride, Seahawk and their respective Subsidiaries, to the extent such assets and activities were or
related to (iii) the deepwater services management contracts with respect to the Thunderhorse, Mad
Dog and Holstein rigs; (iv) drillships or semisubmersible rigs or (v) the Pride Tennessee and Pride
Wisconsin rigs;

               (c) with respect to any Tax Year (or portion thereof) that begins after the Distribution Date,
the assets, activities and related liabilities of Seahawk and the Seahawk Subsidiaries during such
Tax Year (or portion thereof).

          “Seahawk Group” means (x) with respect to any Tax Year (or portion thereof) ending at or
before the Effective Time, Seahawk and each of its Subsidiaries at the Effective Time; and (y) with
respect to any Tax Year (or portion thereof) that begins

-4-

 

after the Effective Time, Seahawk and each
Subsidiary of Seahawk (but only while such Subsidiary is a Subsidiary of Seahawk).

          “Seahawk Subsidiaries” means Gulf of Mexico Personnel Services S. De R.L. De C.V.; Mexico
Drilling Limited LLC; Mexico Offshore Management S. De R.L. De C.V.; Pride Central America, LLC;
Pride Drilling, LLC; Pride Internacional de Mexico LLC; Pride Mexico Holdings, LLC; Redfish
Holdings S. De R.L. De C.V.; Seahawk Drilling LLC and each Person that becomes a Subsidiary of
Seahawk after the Distribution Date.

          “Separate Return” means any Tax Return that is not a Joint Return.

          “Separation” has the meaning set forth in the recitals hereof.

          “Subsidiary” when used with respect to any Person, means (i)(A) a corporation a majority in
voting power of whose share capital or capital stock with voting power, under ordinary
circumstances, to elect directors is at the time, directly or indirectly, owned by such Person, by
one or more Subsidiaries of such Person, or by such Person and one or more Subsidiaries of such
Person, whether or not such power is subject to a voting agreement or similar encumbrance, (B) a
partnership or limited liability company in which such Person or a Subsidiary of such Person is, at
the date of determination, (1) in the case of a partnership, a general partner of such partnership
with the power affirmatively to direct the policies and management of such partnership or (2) in
the case of a limited liability company, the managing member or, in the absence of a managing
member, a member with the power affirmatively to direct the policies and management of such limited
liability company, or (C) any other Person (other than a corporation) in which such Person, one or
more Subsidiaries of such Person or such Person and one or more Subsidiaries of such Person,
directly or indirectly, at the date of determination thereof, has or have (1) the power to elect or
direct the election of a majority of the members of the governing body of such Person, whether or
not such power is subject to a voting agreement or similar encumbrance, or (2) in the absence of
such a governing body, at least a majority ownership interest or (ii) any other Person of which an
aggregate of 50% or more of the equity interests are, at the time, directly or indirectly, owned by
such Person and/or one or more Subsidiaries of such Person.

          “Supplemental IRS Submissions” means any request for a Supplemental Ruling, each supplemental
submission and any other correspondence or supplemental materials submitted to the IRS in
connection with obtaining any Supplemental Ruling.

          “Supplemental Ruling” means any private letter ruling obtained by Pride or Seahawk from the
IRS which supplements or otherwise modifies the Ruling.

          “Supplemental Tax Opinion” means, with respect to a specified action, an opinion (other than
the Tax Opinion) from Tax Counsel to the effect that such action will
not preclude (i) the Internal Distribution from qualifying as a tax-free transaction described
under Sections 368(a)(1)(D) and 355 of the Code to Seahawk and Pride and (ii) the External
Distribution from qualifying as a tax-free transaction described under

-5-

 

Section 355 of the Code to
Pride and the holders of Pride Common Stock (except, in the case of the holders of Pride Common
Stock, with respect to cash received in lieu of fractional shares). No opinion relied upon by
Seahawk to satisfy the requirements of Section 8.3 shall be considered a “Supplemental Tax Opinion”
unless such opinion is, in addition to the requirements above, an unqualified “will” opinion
reasonably satisfactory to Pride, which opinion may rely upon a Supplemental Ruling and may rely
upon, and may assume the accuracy of, any representations given in any Supplemental Ruling
Submission and any customary representations contained in an officer’s certificate delivered by an
officer of Pride or Seahawk to Tax Counsel.

          “Tax” or “Taxes” means any income, gross income, gross receipts, profits, capital stock,
franchise, withholding, payroll, social security, workers compensation, unemployment, disability,
property, ad valorem, stamp, excise, severance, occupation, service, sales, use, license, lease,
transfer, import, export, value added, alternative minimum, estimated or other similar tax
(including any fee, assessment, or other charge in the nature of or in lieu of any tax) imposed by
any Tax Authority and any interest, penalties, additions to tax, or additional amounts in respect
of the foregoing.

          “Tax Authority” means, with respect to any Tax, the governmental entity or political
subdivision, agency, commission or authority thereof that imposes such Tax, and the agency,
commission or authority (if any) charged with the assessment, determination or collection of such
Tax for such entity or subdivision.

          “Tax Benefit” means a Tax Item that decreases the Tax liability of a taxpayer, including a
credit, loss or other deduction, but not including deductions attributable to or arising from the
Pride Business or the Seahawk Business, as applicable, to the extent that the aggregate of such
deductions in a Tax Year does not exceed the income attributable to or arising from such business
in such Tax Year.

          “Tax Contest” means an audit, review, examination, or any other administrative or judicial
proceeding with the purpose or effect of redetermining Taxes of any member of either Group
(including any administrative or judicial review of any claim for refund).

          “Tax Counsel” means (i) with respect to the Tax Opinion delivered to Pride, Baker Botts L.L.P.
or (ii) with respect to a Supplemental Tax Opinion delivered to Pride or to Seahawk, a nationally
recognized law firm or accounting firm reasonably acceptable to Pride to provide such Supplemental
Tax Opinion.

          “Tax Item” means, with respect to any Tax, any item of income, gain, loss, deduction, credit
or other attribute that may have the effect of increasing or decreasing any Tax.

          “Tax Law” means the law of any governmental entity or political subdivision thereof, and any
controlling judicial or administrative interpretations of such law, relating to any Tax.

-6-

 

          “Tax Materials” means (i) the Ruling and each Supplemental Ruling issued by the IRS in
connection with the Internal Distribution and the External Distribution, (ii) each IRS Submission
and Supplemental IRS Submission, (iii) the representation letters delivered to Tax Counsel in
connection with the delivery of the Tax Opinion, and (iv) any other materials delivered or
deliverable by Pride, Seahawk and others in connection with the rendering by Tax Counsel of the Tax
Opinions or the issuance by the IRS of any Ruling or Supplemental Ruling.

          “Tax Opinion” means the opinion to be delivered by Tax Counsel to Pride in connection with the
Internal Distribution and the External Distribution to the effect that (i) the Internal
Distribution will qualify as a tax-free transaction described under Sections 368(a)(1)(D) and 355
of the Code to Seahawk and Pride and (ii) the External Distribution will qualify as a tax-free
transaction described under Section 355 of the Code to Pride and the holders of Pride Common Stock
(except, in the case of the holders of Pride Common Stock, with respect to cash received in lieu of
fractional shares).

          “Tax Records” means Tax Return, Tax Return work papers, documentation relating to any Tax
Contests, and any other books of account or records required to be maintained under applicable Tax
Laws (including but not limited to Section 6001 of the Code) or under any record retention
agreement with any Tax Authority.

          “Tax Return” means any report of Taxes due (including estimated Taxes), any claims for refund
of Taxes paid, any information return with respect to Taxes, or any other similar report,
statement, declaration, or document required to be filed (by paper, electronically or otherwise)
under any applicable Tax Law, including any attachments, exhibits, or other materials submitted
with any of the foregoing, and including any amendments or supplements to any of the foregoing.

          “Tax Year” means with respect to any Tax, the year, or shorter period, if applicable, for
which the Tax is reported as provided under applicable Tax Law.

          “Treasury Regulations” means the regulations promulgated from time to time under the Code as
in effect for the relevant Tax Year.

          SECTION 2. Allocation of Tax Liabilities and Tax Benefits.

          2.1 Liability for and the Payment of Taxes. Except as provided in Section 3.1(b) (Provision of
Information and Assistance), Section 3.2(c) (Provision of Information), and Section 7 (Tax
Contests), and in accordance with Section 4:

            
   (a) Seahawk Liabilities and Payments. For any Tax Year (or portion thereof), Seahawk shall, subject to
the rules for Tax Benefits in Section 2.1(c):

                    (i) be liable for and pay the Taxes (determined without regard to Tax Benefits) allocated to
it pursuant to Section 2.2, reduced by any Tax

-7-

 

Benefits allocated to Pride or Seahawk that are
allowable under applicable Tax Law, either to the applicable Tax Authority or to Pride as required
by Section 4, and

                    (ii) pay Pride for:

                         (A) any Tax Benefits arising in a Tax Year that begins on or before the Distribution Date
allocated to Pride pursuant to Section 2.2 that Seahawk uses to reduce Taxes payable by it pursuant
to clause (i) of this Section 2.1(a) in any Tax Year that begins after the Distribution Date,

                         (B) any Tax Benefits arising in a Tax Year that begins after the Distribution Date allocated
to Pride pursuant to Section 2.2 that Seahawk uses to reduce Taxes payable by it pursuant to clause
(i) of this Section 2.1(a) in any Tax Year that begins on or before the Distribution Date, and

                         (C) any Tax Benefits arising in a Tax Year that begins on or before the Distribution Date
allocated to Pride pursuant to Section 2.2 arising or used as a result of a Tax Contest or other
dispute which is resolved after the Distribution Date that Seahawk uses to reduce Taxes payable by
it pursuant to clause (i) of this Section 2.1(a) in any Tax Year that begins on or before the
Distribution Date.

          
     (b) Pride Liabilities and Payments. For any Tax Year (or portion thereof), Pride shall, subject to the
rules for Tax Benefits in Section 2.1(c):

                    (i) be liable for and pay the Taxes (determined without regard to Tax Benefits) allocated to
it pursuant to Section 2.2, reduced by any Tax Benefits allocated to Pride or Seahawk that are
allowable under applicable Tax Law, either to the applicable Tax Authority or to Seahawk as
required by Section 4, and

                    (ii) pay Seahawk for:

                         (A) any Tax Benefits arising in a Tax Year that begins on or before the Distribution Date
allocated to Seahawk pursuant to Section 2.2 that Pride uses to reduce Taxes payable by it pursuant
to clause (i) of this Section 2.1(b) in any Tax Year that begins after the Distribution Date,

                         (B) any Tax Benefits arising in a Tax Year that begins after the Distribution Date allocated
to Seahawk pursuant to Section 2.2 that Pride
uses to reduce Taxes payable by it pursuant to clause (i) of this Section 2.1(b) in any Tax
Year that begins on or before the Distribution Date, and

                         (C) any Tax Benefits arising in a Tax Year that begins on or before the Distribution Date
allocated to Seahawk pursuant to Section 2.2 arising or used as a result of a Tax Contest or other
dispute which is resolved after the Distribution Date that Pride uses to reduce Taxes payable by it
pursuant to clause (i) of this Section 2.1(b) in any Tax Year that begins on or before the
Distribution Date.

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               (c) Rules for Tax Benefits. For purpose of this Section 2:

                    (i) For any Tax Year that begins on or before the Distribution Date, (y) Seahawk shall,
pursuant to Section 2.1(a)(i), reduce Taxes allocated to it by Tax Benefits allocated to Pride only
to the extent such Tax Benefits are not taken into account by Pride pursuant to Section 2.1(b)(i)
in the same Tax Year, and (z) Pride shall reduce, pursuant to Section 2.1(b)(i), Taxes allocated to
it by Tax Benefits allocated to Seahawk only to the extent such Tax Benefits are not taken into
account by Seahawk pursuant to Section 2.1(a)(i) in the same Tax Year.

                    (ii) For any Tax Year that begins on or before the Distribution Date, (y) Seahawk shall not
take into account any Tax Benefit under Section 2.1(a)(i) unless the utilization of such Tax
Benefit would be allowable under applicable Tax Law after taking into account only those Tax Items
allocated to Seahawk during such Tax Year (or portion thereof), and (z) Pride shall not take into
account any Tax Benefit under Section 2.1(b)(i) unless the utilization of such Tax Benefit would be
allowable under applicable Tax Law after taking into account only those Tax Items allocated to
Pride during such Tax Year (or portion thereof).

                    (iii) For any Tax Year that begins after the Distribution Date in which either party has
available for use both Tax Benefits allocated to it and Tax Benefits allocated to the other party,
if the applicable Tax Law does not provide for the priority and order in which such Tax Benefits
shall be used, the Tax Benefits allocable to it and to the other party shall be deemed used pro
rata in proportion to the total of such Tax Benefits available for use by it.

                    (iv) Payment for Tax Benefits described in either Section 2.1(a)(ii)(B) or Section
2.1(a)(ii)(C) shall be made only when and to the extent that the use of such Tax Benefit does not
increase the Taxes of Seahawk or reduce the Tax Benefits otherwise usable by Seahawk during the
applicable Tax Year, and payment for Tax Benefits described in either Section 2.1(b)(ii)(B) or
Section 2.1(b)(ii)(C) shall be made only when and to the extent that the use of such Tax Benefit
does not increase the Taxes of Pride or reduce the Tax Benefits otherwise usable by Pride during
the applicable Tax Year.

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          2.2 Allocation Rules. For purposes of Section 2.1:

               (a) General Rule. Except as otherwise provided in this Section 2.2, Taxes (determined without regard
to Tax Benefits) for any Tax Year (or portion thereof) shall be allocated between Seahawk and Pride
in proportion to the net taxable income or other applicable items attributable to or arising from
the respective Seahawk Business and Pride Business (as so defined for such Tax Year or portion
thereof) that contribute to such Taxes, and Tax Benefits for any Tax Year (or portion thereof)
shall be allocated between Seahawk and Pride in proportion to the losses, credits, or other
applicable items attributable to or arising from the respective Seahawk Business and Pride Business
(as so defined for such Tax Year or portion thereof) that contribute to such Tax Benefits.

               (b) Taxes Resulting from the Internal Distribution or the External Distribution.Taxes and Tax Items
resulting from the Internal Distribution and Taxes and Tax Items resulting from the External
Distribution (collectively, “Distribution Taxes”) will be allocated as follows:

                    (i) Distribution Taxes Allocable to Pride. Distribution Taxes shall be allocated to Pride to
the extent that such Distribution Taxes result primarily from one or more of the following:

                         (A) from the Pride Group ceasing to be engaged in the Management Business or the Deepwater
Drilling Business; or

                         (B) from an action or failure to act by the Pride Group that causes Section 355(e) of the Code
to apply to either the Internal Distribution or the External Distribution, or that causes Section
355(f) of the Code to apply to the Internal Distribution.

                    (ii) Distribution Taxes Allocable to Seahawk. Distribution Taxes shall be allocated to
Seahawk to the extent that such Distribution Taxes result primarily from Seahawk’s taking any of
the actions prohibited in Section 8.3.

                    (iii) Joint Responsibility for Distribution Taxes. Any Distribution Taxes not allocated under
Section 2.2(b)(i) or Section 2.2(b)(ii) shall be allocated fifty percent (50%) to Pride and fifty
percent (50%) to Seahawk.

          SECTION 3. Preparation and Filing of Tax Returns.

          3.1 Joint Returns.

               (a) Preparation of Joint Returns. Pride shall be responsible for preparing and filing (or causing to
be prepared and filed) and shall be considered the Preparer of all Joint Returns, except that
Seahawk shall be responsible for preparing and filing (or causing to be prepared and filed) and
shall be considered the Preparer of all

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Joint Returns filed or required to be filed with the
Mexican Tax Authority by any Seahawk Subsidiary.

               (b) Provision of Information and Assistance.

                    (i) Information with Respect to Joint Returns. The Non-Preparer shall provide the Preparer
with all information in its possession necessary for the Preparer to properly and timely file all
Joint Returns for which such Preparer is responsible pursuant to Section 3.1(a). The Non-Preparer
shall provide such information no later than thirty days prior to the extended due date of such
Joint Return. If the Non-Preparer is in possession of information and the Non-Preparer fails to
provide such information within the time period provided in this Section 3.1(b)(i) and in the form
reasonably requested by the Preparer to permit the timely filing of any Joint Return for which the
Preparer is responsible pursuant to Section 3.1(a), then notwithstanding any other provision of
this Agreement, the Non-Preparer shall be liable for, and shall indemnify and hold harmless each
member of the Preparer’s Group from and against, any penalties, interest, or other payment
obligation assessed against any member of either Group by reason of any resulting delay in filing
such return. If the Non-Preparer provides information within the time period provided in this
Section 3.1(b)(i) in the form reasonably requested by the Preparer to permit the timely filing of a
Joint Return for which such Preparer is responsible pursuant to Section 3.1(a), then
notwithstanding any other provision of this Agreement, the Preparer shall be liable for, and shall
indemnify and hold harmless each member of the Non-Preparer’s Group from and against, any
penalties, interest, or other payments assessed against any member of either Group by reason of any
delay in filing such return.

                    (ii) Information with Respect to Estimated Payments and Extension Payments. The Non-Preparer
shall provide the Preparer with all information relating to members of the Non-Preparer’s Group
that the Preparer needs to determine the amount of Taxes due on any Payment Date with respect to a
Joint Return for which such Preparer is responsible pursuant to Section 3.1(a). The Non-Preparer
shall provide such information no later than thirty days before such Payment Date. In the event
that the Non-Preparer fails to provide information within the time period provided in this Section
3.1(b)(ii) in the form reasonably requested by the Preparer to permit the timely payment of such
Taxes, the indemnification principles of Section 3.1(b)(i) shall apply with respect to any
penalties, interest, or other payments assessed against any member of either Group by reason of any
resulting delay in paying such Taxes.

                    (iii) Assistance. At the request of the Preparer, the Non-Preparer shall take (at its own
cost and expense), and shall cause the members of the Non-Preparer’s Group to take (at their own
cost and expense), any reasonable action (e.g., filing a ruling request with the relevant Tax
Authority or executing a power of attorney) that is reasonably necessary in order for the Preparer
or any other member of the Preparer’s Group to prepare, file, amend or take any other action with
respect to a Joint Return for which the Preparer is responsible pursuant to Section 3.1(a). In the
event that the Non-Preparer fails to take, or cause to be taken, any such requested action, the
indemnification principles of Section 3.1(b)(i) shall apply with respect to any penalties,

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interest, or other payments assessed against any member of either Group by reason of a failure to
take any such requested action.

          3.2 Separate Returns.

               (a) Tax Returns to be Prepared by Pride. Pride shall be responsible for preparing and filing (or
causing to be prepared and filed) all Separate Returns that include Tax Items of the Pride Group,
determined without regard to Tax Items carried forward to such Tax Year.

               (b) Tax Returns to be Prepared by Seahawk. Seahawk shall be responsible for preparing and filing (or
causing to be prepared and filed) all Separate Returns that include Tax Items of the Seahawk Group,
determined without regard to Tax Items carried forward to such Tax Year.

               (c) Provision of Information. Pride shall provide to Seahawk, and Seahawk shall provide to Pride, any
information about members of the Pride Group or the Seahawk Group, respectively, which the party
receiving such information reasonably needs to properly and timely file all Separate Returns
pursuant to Sections 3.2(a) or (b). Such information shall be provided within the time prescribed
by Section 3.1(b) for the provision of information for Joint Returns. In the event that Pride or
Seahawk fails to provide information within the time period provided in Section 3.1(b) and in the
form reasonably requested by the other party to permit the timely filing of a Separate Return, the
indemnification principles of Section 3.1(b)(i) shall apply with respect to any penalties,
interest, or other payments assessed against any member of the Pride Group or the Seahawk Group by
reason of any resulting delay in filing such return.

          3.3 Special Rules Relating to the Preparation of Tax Returns.

               (a) General Rule. Except as otherwise provided in this Agreement, the party responsible for filing (or
causing to be filed) a Tax Return pursuant to Sections 3.1 or 3.2 shall have the exclusive right,
in its sole discretion, with respect to such Tax Return to determine (i) the manner in which such
Tax Return shall be prepared and filed, including the elections, methods of
accounting, positions, conventions and principles of taxation to be used and the manner in which
any Tax Item shall be reported, (ii) whether any extensions may be requested, (iii) whether an
amended Tax Return shall be filed, (iv) whether any claims for refund shall be made, (v) whether
any refunds shall be paid by way of refund or credited against any liability for the related Tax
and (vi) whether to retain outside firms to prepare or review such Tax Return. Notwithstanding the
preceding sentence, if the Seahawk Group pays any Tax to a Tax Authority other than the IRS that
may be claimed as a foreign Tax credit for U.S. federal income tax purposes in a Tax Return for
which Pride is the party responsible for filing (or causing to be filed), Pride shall amend such
Tax Returns and file such claims for credit or refund that Seahawk may reasonably request.

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               (b) Seahawk Tax Returns. With respect to any Separate Return for which Seahawk is responsible pursuant
to Section 3.2(b):

                    (i) Seahawk may not take (and shall cause the members of the Seahawk Group not to take) any
positions that it knows, or reasonably should know, would adversely affect any member of the Pride
Group; and

                    (ii) Seahawk and other members of the Seahawk Group must (x) allocate Tax Items between such
Separate Return for which Seahawk is responsible pursuant to Section 3.2(b) and any related Joint
Return for which Pride is responsible pursuant to Section 3.1(a) that are filed with respect to the
same Tax Year in a manner that is consistent with the reporting of such Tax Items on the related
Joint Return for which Pride is responsible pursuant to Section 3.1(a) and (y) make any applicable
elections required under applicable Tax Law (including, without limitation, under Treasury
Regulations Section 1.1502-76(b)(2)) necessary to effect such allocation.

               (c) Election to File Consolidated, Combined or Unitary Tax Returns. Pride shall have the sole
discretion of filing any Tax Return on a consolidated, combined or unitary basis, if such Tax
Return would include at least one member of each Group and the filing of such Tax Return is
elective under the relevant Tax Law.

               (d) Carrybacks of Tax Benefits. Seahawk shall not carry back and utilize as a Tax Benefit in a Tax
Year that begins on or before the Distribution Date any Tax Item arising in a Tax Year that begins
after the Distribution Date, provided, that, if the carryback of such Tax Item is required by
applicable Tax Law (for example, pursuant to Section 904(c) of the Code), and if Pride would be the
Preparer of any Tax Return (or Tax Returns) amended to include the carried-back Tax Item, Pride
shall amend such Tax Return (or Tax Returns) and file such claims for credit or refund that Seahawk
may reasonably request. With respect to any foreign Taxes claimed on any such amended Tax Return,
Pride shall only elect the benefits of the foreign Tax credit under Section 901 of the Code and
shall not elect to deduct such foreign Taxes.

               (e) Withholding and Reporting. With respect to stock of Pride delivered to any Person, Pride and
Seahawk shall cooperate (and shall cause their Affiliates to cooperate) so as to permit Pride to
discharge any applicable Tax withholding and Tax reporting obligations, including the appointment
of Seahawk or one or more of its Affiliates as the withholding and reporting agent if Pride or one
or more of its Affiliates is not otherwise required or permitted to withhold and report under
applicable Tax Law.

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               (f) Standard of Performance. Pride and Seahawk shall prepare the Joint Returns for which each is
responsible pursuant to this Section 3 with the same general degree of care as it uses in preparing
Separate Returns. Notwithstanding the preceding sentence, Pride shall not be liable for any
additional Taxes that result from a redetermination in a Tax Contest and for which Seahawk is
otherwise liable under Section 2, regardless of whether such Taxes arise as a result of Pride’s
failure to exercise such degree of care.

          3.4 Reliance on Exchanged Information. If a member of the Seahawk Group supplies information
to a member of the Pride Group, or a member of the Pride Group supplies information to a member of
the Seahawk Group, and an officer of the requesting member intends to sign a statement or other
document under penalties of perjury in reliance upon the accuracy of such information, then a duly
authorized officer of the member supplying such information shall certify, to the best of such
officer’s knowledge, the accuracy and completeness of the information so supplied.

          3.5 Allocation of Tax Items. Pride shall determine in accordance with applicable Tax Laws the
allocation of any applicable Tax Items (e.g., net operating loss, net capital loss, investment Tax
credit, foreign Tax credit, research and experimentation credit, charitable deduction, or credit
related to alternative minimum Tax) as of the Effective Time among Pride, each other Pride Group
member, Seahawk, and each other Seahawk Group member. Pride and Seahawk hereby agree that in the
absence of controlling legal authority each such Tax Item shall be allocated as provided in Section
2.2. Attached hereto as Exhibit A is an estimate of the Tax Items allocable to the Pride Group and
the Seahawk Group, respectively. Pride shall provide reasonably timely updates of the allocation
of Tax Items, as it finalizes its Tax Returns and as adjustments, if any, are subsequently made to
such Tax Returns.

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          SECTION 4. Tax Payments.

          4.1 Payment of Taxes to Tax Authority. Pride shall be responsible for remitting to the proper
Tax Authority all Tax shown (including Taxes for which Seahawk is wholly or partially liable
pursuant to Section 2) on any Tax Return for which it is responsible for the preparation and filing
pursuant to Section 3.1(a) or Section 3.2(a), and Seahawk shall be responsible for remitting to the
proper Tax Authority the Tax shown (including Taxes for which Pride is wholly or partially liable
pursuant to Section 2) on any Tax Return for which it is responsible for the preparation and filing
pursuant to Section 3.2(b).

          4.2 Indemnification Payments.

               (a) Tax Payments Made by the Pride Group. If any member of the Pride Group remits a payment to a Tax
Authority for Taxes for which Seahawk is wholly or partially liable under this Agreement, Seahawk
shall remit the amount for which it is liable to Pride within thirty days after receiving
notification requesting such amount.

               (b) Tax Payments Made by the Seahawk Group. If any member of the Seahawk Group remits a payment to a
Tax Authority for Taxes for which Pride is wholly or partially liable under this Agreement, Pride
shall remit the amount for which it is liable to Seahawk within thirty days after receiving
notification requesting such amount.

               (c) Credit for Prior Deemed Tax Payments. For purposes of Section 4.2(a), the portion of Taxes paid by
Pride to a Tax Authority for which Seahawk is liable will be determined by assuming that Seahawk
has previously paid in the aggregate (i) $10 million with respect to all Taxes for each Tax Year
that includes the Distribution Date, (ii) $45 million with respect to all Taxes for each Tax Year
that immediately precedes the Tax Year that includes the Distribution Date and (iii) the full
amount of its allocable share of all Taxes shown on any other Tax Return filed before the
Distribution Date with respect to any other Tax Year ending before the Distribution Date.

               (d) Payments for Tax Benefits.

                    (i) If a member of the Pride Group uses a Tax Benefit for which Seahawk is entitled to
reimbursement pursuant to clause (ii) of Section 2.1(b), Pride shall pay to Seahawk, within fifteen
business days following the use of such Tax Benefit, an amount equal to such Tax Benefit.

                    (ii) If a member of the Seahawk Group uses a Tax Benefit for which Pride is entitled to
reimbursement pursuant to clause (ii) of Section
2.1(a), Seahawk shall pay to Pride, within fifteen business days following the use of such Tax
Benefit, an amount equal to such Tax Benefit.

                    (iii) For purposes of this Agreement, a Tax Benefit (other than a Tax Refund) will be
considered used (i) in the case of a Tax Benefit that

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generates a Tax Refund, at the time such Tax
Refund is received and (ii) in all other cases, at the time the Tax Return is filed with respect to
such Tax Benefit or, if no Tax Return is filed, at the time the Tax would have been due in the
absence of such Tax Benefit. The amount of such Tax Benefit will be the amount by which Taxes are
actually reduced by such Tax Benefit (determined in accordance with the provisions of Section
2.1(c)).

          4.3 Initial Determinations and Subsequent Adjustments. The initial determination of the amount
of any payment that one party is required to make to another under this Agreement shall be made on
the basis of the Tax Return as filed, or, if the Tax to which the payment relates is not reported
in a Tax Return, on the basis of the amount of Tax initially paid to the Tax Authority. The
amounts paid under this Agreement will be redetermined, and additional payments relating to such
redetermination will be made, as appropriate, if as a result of an audit by a Tax Authority, an
amended Tax Return, or for any other reason (w) additional Taxes to which such redetermination
relates are subsequently paid, (x) a refund of such Taxes is received, (y) the party using a Tax
Benefit changes, or (z) the amount or character of any Tax Item is adjusted or redetermined. Each
payment required by the immediately preceding sentence (i) as a result of a payment of additional
Taxes will be due thirty days after the date on which the additional Taxes were paid or, if later,
fifteen days after the date of a request from the other party for the payment, (ii) as a result of
the receipt of a refund will be due thirty days after the refund was received, (iii) as a result of
a change in use of a Tax Benefit will be due thirty days after the date on which the final action
resulting in such change is taken by a Tax Authority or either party or any of their Subsidiaries,
or (iv) as a result of an adjustment or redetermination of the amount or character of a Tax Item
will be due thirty days after the date on which the final action resulting in such adjustment or
redetermination is taken by a Tax Authority or either party or any of their Subsidiaries. If a
payment is made as a result of an audit by a Tax Authority which does not conclude the matter,
further adjusting payments will be made, as appropriate, to reflect the outcome of subsequent
administrative or judicial proceedings.

          4.4 Interest on Late Payments. Payments pursuant to this Agreement that are not made by the
date prescribed in this Agreement or, if no such date is prescribed, within fifteen days after
demand for payment is made (the “Due Date”) shall bear interest for the period from and including
the date immediately following the Due Date through and including the date of payment at a per
annum rate fixed at six percent (6%) above the six month dollar LIBOR rate as displayed on page
“LR” of Bloomberg (or such other appropriate page as may replace such page), as of 11:00 a.m.
London time on the Due Date (or, if the Due Date is not a business day, as of 11:00 a.m. London
time on the first business day following the Due Date). Such
rate shall be redetermined at the beginning of each calendar quarter following such Due Date. Such
interest will be payable at the same time as the payment to which it relates and shall be
calculated on the basis of a year of 365 days and the actual number of days for which due.

          4.5 Payments by or to Other Group Members. When appropriate under the circumstances to reflect
the underlying liability for a Tax or entitlement to a Tax refund or Tax Benefit, a payment which
is required to be made by or to Pride or

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Seahawk may be made by or to another member of the Pride
Group or the Seahawk Group, as appropriate, but nothing in this Section 4.5 shall relieve Pride or
Seahawk of its obligations under this Agreement.

          4.6 Procedural Matters. Any written notice delivered to the indemnifying party in accordance
with Section 9.5 shall show the amount due and owing together with a schedule calculating in
reasonable detail such amount (and shall include any relevant Tax Return, statement, bill or
invoice related to such Taxes, costs, expenses or other amounts due and owing). All payments
required to be made by one party to the other party pursuant to this Section 4 shall be made by
electronic, same day wire transfer. Payments shall be deemed made when received. If the
indemnifying party fails to make a payment to the indemnified party within the time period set
forth in this Section 4, the indemnifying party shall pay to the indemnified party, in addition to
interest that accrues pursuant to Section 4.4, any costs or expenses, including any breakage costs,
incurred by the indemnified party to secure such payment or to satisfy the indemnifying party’s
portion of the obligation giving rise to the indemnification payment.

          4.7 Tax Consequences of Payments. For all Tax purposes and to the extent permitted by
applicable Tax Law, the parties hereto shall treat any payment made pursuant to this Agreement as a
capital contribution or a distribution, as the case may be, immediately prior to the External
Distribution. If any payment (or portion thereof) arising as a result of an allocation of Taxes or
Tax Items pursuant to Section 2.2(b) causes, directly or indirectly, an increase in the Taxes owed
by the recipient (or any of the members of its Group) under one or more applicable Tax Laws, the
payor’s payment obligation (or portion thereof) under this Agreement shall be increased such that
the amount of the payment, reduced by any Taxes owed by the recipient (or any of the members of its
Group) as a result of such payment, equals the amount of a payment that would have been received
had no additional Taxes been imposed on the recipient (or any of the members of its Group) as a
result of such payment. Other than the payments described in the preceding sentence of this
Section 4.7, under no circumstances shall any payment (or portion thereof) made pursuant to this
Agreement be grossed up to take into account any additional Taxes that may be owed by the recipient
(or any of the members of its Group) as a result of such payment. In the event that a Tax
Authority asserts that Pride’s or Seahawk’s treatment of a payment pursuant to this Agreement
should be other than as required pursuant to this Section 4.7,
Pride or Seahawk, as appropriate, shall use its reasonable best efforts to contest such assertion.

          SECTION 5. Assistance and Cooperation.

          5.1 Cooperation. In addition to the obligations enumerated in Sections 3.1(b) and 3.2(c),
Pride and Seahawk will cooperate (and cause their respective Subsidiaries to cooperate) with each
other and with each other’s agents, including accounting firms and legal counsel, in connection
with Tax matters, including provision of relevant documents and information in their possession and
making available to each other, as reasonably requested and available, personnel (including
officers, directors, employees and agents of the parties or their Affiliates) responsible for
preparing,

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maintaining, and interpreting information and documents relevant to Taxes, and personnel
reasonably required as witnesses or for purposes of providing information or documents in
connection with any administrative or judicial proceedings relating to Taxes.

          5.2 Supplemental Rulings and Supplemental Tax Opinions. Each of the parties agrees that at the
reasonable request of the other party (the “Requesting Party”), such party shall (and shall cause
each member of its Group to) cooperate and use reasonable efforts to seek to obtain, as
expeditiously as reasonably practicable, a Supplemental Ruling from the IRS. Each of the parties
further agrees that at the reasonable request of the Requesting Party, such other party shall (and
shall cause each member of its Group to) cooperate and use reasonable efforts to assist the
Requesting Party in obtaining, as expeditiously as reasonably practicable, a Supplemental Tax
Opinion from Tax Counsel. Within thirty days after receiving an invoice from the other party
therefor, the Requesting Party shall reimburse such party for all reasonable costs and expenses
incurred by such party and the members of its Group in connection with obtaining or requesting a
Supplemental Ruling or in connection with assisting the Requesting Party in obtaining a
Supplemental Tax Opinion. Notwithstanding the foregoing, Pride shall not be required to file any
Supplemental IRS Submission unless Seahawk represents to Pride that (x) it has reviewed the
Supplemental IRS Submission and (y) all information and representations, if any, relating to any
member of the Seahawk Group contained in the Supplemental IRS Submissions are true, correct and
complete in all material respects.

          SECTION 6. Tax Records.

          6.1 Retention of Tax Records. Each of Pride and Seahawk shall preserve, and shall cause their
respective Subsidiaries to preserve, all Tax Records that are in their possession, and that could
affect the liability of any member of the other Group for Taxes, for as long as the contents
thereof may become material in the administration of any matter under applicable Tax Law, but in
any
event until the later of (x) the expiration of any applicable statutes of limitation, as extended,
and (y) seven years after the Distribution Date.

          6.2 Access to Tax Records. Seahawk shall make available, and cause its Subsidiaries to make
available, to members of the Pride Group for inspection and copying (x) all Tax Records in their
possession that relate to Tax Years that begin on or before the Distribution Date, and (y) the
portion of any Tax Record in their possession that relates to Tax Years that begin after the
Distribution Date and which is reasonably necessary for the preparation of a Joint Return or
Separate Return by a member of the Seahawk Group or with respect to an audit or litigation by a Tax Authority of such
return. Pride shall make available, and cause its Subsidiaries to make available,
to members of the Seahawk Group for inspection and copying that portion of
any Tax Record in their possession that relates to Tax Years that begin on or
before the Distribution Date and which is reasonably necessary for the preparation
of a Joint Return or Separate Return by

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a member of the Seahawk Group or with respect
to an audit or litigation by a Tax Authority of such return.

          6.3 Confidentiality. Each party hereby agrees that it will hold, and shall use its
reasonable best efforts to cause its officers, directors, employees, accountants, counsel,
consultants, advisors and agents to hold, in confidence all records and information prepared and
shared by and among the parties in carrying out the intent of this Agreement, except as may
otherwise be necessary in connection with the filing of Tax Returns or any administrative or
judicial proceedings relating to Taxes or unless disclosure is compelled by a governmental
authority. Information and documents of one party (the “Disclosing Party”) shall not be deemed to
be confidential for purposes of this Section 6.3 to the extent such information or document (i) is
previously known to or in the possession of the other party (the “Receiving Party”) and is not
otherwise subject to a requirement to be kept confidential, (ii) becomes publicly available by
means other than unauthorized disclosure under this Agreement by the Receiving Party or (iii) is
received from a third party without, to the knowledge of the Receiving Party after reasonable
diligence, a duty of confidentiality owed to the Disclosing Party.

          SECTION 7. Tax Contests.

          7.1 Notices. Each party shall provide prompt notice to the other party of any pending or
threatened Tax audit, assessment or proceeding or other Tax Contest of which it becomes aware
relating to (i) Taxes for which it is or may be indemnified by the other party hereunder, (ii) the
qualification of the Internal Distribution as a tax-free transaction described under Section
368(a)(1)(D) and/or 355 of the Code or (iii) the qualification of the External Distribution as a
tax-free transaction described under Section 355 of the Code. Such notice shall contain factual
information (to the extent known) describing any asserted Tax liability in reasonable detail and
shall be accompanied by copies of any notice and other documents received from any Tax Authority in
respect of any such matters. If (1) an indemnified party has knowledge of an asserted Tax
liability with respect to a matter for which it is to be indemnified hereunder, (2) such party
fails to give the indemnifying party prompt notice of such asserted Tax liability and (3) the
indemnifying party has the right, pursuant to Section 7.2(a), to control the Tax Contest relating
to such Tax liability, then (x) if the indemnifying party is precluded from contesting the asserted
Tax liability as a result of the failure to give prompt notice, the indemnifying party shall have
no obligation to indemnify the indemnified party for any Taxes arising out of such asserted Tax
liability and (y) if the indemnifying party is not precluded from contesting the asserted Tax
liability, but such failure to give prompt notice results in a monetary detriment to the
indemnifying party, then any amount which the indemnifying party is otherwise required to pay the
indemnified party pursuant to this Agreement shall be reduced by the amount of such detriment.

          7.2 Control of Tax Contests.

               (a) General Rule. Except as provided in Sections 7.2(b), each party (or the appropriate member of
their Group) shall have full responsibility, control

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and discretion
in handling, settling or contesting any Tax Contest involving a Tax reported on a Tax Return for
which it is responsible for preparing and filing (or causing to be prepared and filed) pursuant to
Section 3 of this Agreement.

          (b) Non-Preparer Participation Rights. With respect to a Tax Contest of any Tax Return which
involves a Tax liability for which the Non-Preparer may be liable, or a Tax Benefit for which the
Non-Preparer may be entitled, under this Agreement, (i) the Non-Preparer shall, at its own cost and
expense, be entitled to participate in such Tax Contest, (ii) the Preparer shall keep the
Non-Preparer reasonably informed and consult seriously and in good faith with the Non-Preparer and
its Tax advisors with respect to any issue relating to such Tax Contest; (iii) the Preparer shall
provide the Non-Preparer with copies of all correspondence, notices, and other written materials
received from any Tax Authority and shall otherwise keep the Non-Preparer and its Tax advisors
advised of significant developments in the Tax Contest and of significant communications involving
representatives of the Tax Authority; (iv) the Non-Preparer may request that the Preparer take a
position in respect of such Tax Contest, and the Preparer shall do so provided that (A) there
exists substantial authority for such position (within the meaning of the accuracy-related penalty
provisions of Section 6662 of the Code) and (B) the adoption of such position could not reasonably
be expected to increase the Taxes or reduce the Tax Benefits allocated to the Preparer pursuant to
Section 2 of this Agreement (unless the Non-Preparer agrees to indemnify and hold harmless the
Preparer from such increase in Taxes or reduction in Tax Benefits); (v) the Preparer shall provide
the Non-Preparer with a copy of any written submission to be sent to a Taxing Authority prior to
the submission thereof and shall give serious and good faith consideration to any comments or
suggested revisions that the Non-Preparer or its Tax advisors may have with respect thereto; and
(vi) there will be no settlement, resolution, or closing or other agreement with respect thereto
without the consent of the Non-Preparer, which consent shall not be unreasonably withheld.

          7.3 Cooperation. The Non-Preparer shall provide a party controlling any Tax Contest
pursuant to Section 7.2(a) with all information relating to the Non-Preparer’s Group which the
party controlling the Tax Contest needs to handle, settle or contest the Tax Contest. At the
request of a party controlling any Tax Contest pursuant to Section 7.2(a), the other party shall
take any action (e.g., executing a power of attorney) that is reasonably necessary in order for the
party controlling the Tax Contest to handle, settle or contest the Tax Contest. Seahawk shall
assist Pride, and Pride shall assist Seahawk, in taking any remedial actions that are necessary or
desirable to minimize the effects of any adjustment made by a Tax Authority. The indemnifying
party shall reimburse the indemnified party for any reasonable out-of-pocket costs and expenses
incurred in complying with this Section 7.3. The party controlling the Tax Contest shall have no
obligation to indemnify the indemnified party for any additional Taxes resulting from the Tax
Contest, if the indemnified party fails to cooperate in accordance with this Section 7.3.

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          SECTION 8. Restriction on Certain Actions of Pride and Seahawk.

          8.1 General Restrictions. Following the Effective Time, Seahawk shall not, and shall cause
the members of the Seahawk Group not to, take any action that, or fail to take any action the
failure of which, (i) would be inconsistent with the Internal Distribution qualifying, or preclude
the Internal Distribution from qualifying, as a tax-free transaction described under Sections
368(a)(1)(D) and/or 355 of the Code, (ii) would be inconsistent with the External Distribution
qualifying, or preclude the External Distribution from qualifying, as a tax-free transaction
described under Section 355 of the Code (except with respect to cash received in lieu of fractional
shares), or (iii) would cause Pride, any Person that is a Subsidiary of Pride immediately prior to
the Distribution, or the holders of Pride Common Stock that receive Seahawk stock in the
Distribution to recognize gain or loss, or otherwise include any amount in income, as a result of
the Distribution for U.S. federal income tax purposes (except with respect to cash received in lieu
of fractional shares).

          8.2 Restricted Actions Relating to Tax Materials. Without limiting the other provisions of
this Section 8, following the Effective Time, Seahawk shall not, and shall cause the members of the
Seahawk Group not to, take any action that, or fail to take any action the failure of which, would
be reasonably likely to be inconsistent with, or cause any Person to be in breach of, any
representation or covenant, or any material statement, made in the Tax Materials.

          8.3 Certain Seahawk Actions Following the Effective Time. Without limiting the other
provisions of this Section 8, during the two-year period following the Effective Time, Seahawk
shall not take, nor enter into a binding agreement to take, any of the following actions: (i) sell
all or substantially all of the assets that constitute the Seahawk Business as of the Effective
Time to any Person other than Seahawk or an entity which is and will be wholly-owned, directly or
indirectly, by Seahawk; (ii) transfer any assets of Seahawk or any Seahawk Affiliate in a
transaction described in subparagraphs (A), (C), (D), (F), or (G) of Section 368(a)(1) to another
entity, other than Seahawk or an entity which is and will be wholly-owned, directly or indirectly,
by Seahawk, (iii) transfer all or substantially all of the assets that constitute the Seahawk
Business as of the Effective Time in a transaction described in Sections 351 or 721 other than a
transfer to a corporation or partnership which is and will be wholly-owned, directly or indirectly,
by Seahawk; (iv) issue stock of Seahawk or any Seahawk Affiliate (or any instrument that is
convertible or exchangeable into any such stock) other than an issuance to which Treasury
Regulations Section 1.355-7(d)(8) or (9) applies; (v) facilitate or otherwise participate in any
acquisition (or deemed acquisition) of stock of Seahawk that would result in any shareholder owning
(or being deemed to own after applying the rules of Sections 355(e)(4)(C) and 355(e)(3)(B) of the
Code) forty percent (40%) or more (by vote or value) of the outstanding stock of Seahawk; or (vi)
redeem or otherwise repurchase any stock of Seahawk other than pursuant to open market stock
repurchase programs meeting the requirements of Section 4.05(1)(b) of Rev. Proc. 96-30, 1996-1 C.B.
696; in each case, without first obtaining and delivering to Pride at Seahawk’s own expense (y) a
Supplemental Tax Opinion with respect to such action, or (z) a suitable form of financial security
issued by a Permitted Financial Institution, in such form and on

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such terms as Pride may reasonably direct, and of a sufficient amount which Pride may determine in
its sole discretion to cover any and all Taxes that may arise as a result of taking such action.

          SECTION 9. General Provisions.

          9.1 Limitation of Liability. IN NO EVENT SHALL ANY MEMBER OF THE PRIDE GROUP OR THE
SEAHAWK GROUP OR THEIR RESPECTIVE DIRECTORS, OFFICERS AND EMPLOYEES BE LIABLE TO ANY OTHER MEMBER
OF THE PRIDE GROUP OR THE SEAHAWK GROUP FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT, INCIDENTAL OR
PUNITIVE DAMAGES OR LOST PROFITS, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY (INCLUDING
NEGLIGENCE) ARISING IN ANY WAY OUT OF THIS AGREEMENT, WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES.

          9.2 Entire Agreement. This Agreement and the Master Separation Agreement constitute the
entire agreement between Pride and Seahawk with respect to the subject matter hereof and shall
supersede all prior written and oral and all contemporaneous oral agreements and understandings
with respect to the subject matter hereof.

          9.3 Governing Law. This Agreement shall be governed and construed and enforced in
accordance with the laws of the State of Texas as to all matters regardless of the laws that might
otherwise govern under the principles of conflicts of laws applicable thereto.

          9.4 Termination.

               (a) This Agreement may be terminated at any time prior to the Distribution Date by and in the
sole discretion of Pride without the approval of Seahawk. In the event of termination pursuant to
this Section 9.4, neither party shall have any liability of any kind to the other party.

               (b) This Agreement shall otherwise terminate at such time as all obligations and liabilities
of the parties hereto have been satisfied. The obligations and liabilities of the parties arising
under this Agreement shall continue in full force and effect until all such obligations have been
satisfied and such liabilities have been paid in full, whether by expiration of time, operation of
law, or otherwise.

          9.5 Notices. Unless expressly provided herein, all notices, claims, certificates,
requests, demands and other communications hereunder shall be in writing and shall be deemed to be
duly given (i) when personally delivered or (ii) if mailed registered or certified mail, postage
prepaid, return receipt requested, on the date the return receipt is executed or the letter is
refused by the addressee or its agent or (iii) if sent by overnight courier which delivers only
upon the signed receipt of the addressee, on the date the receipt acknowledgment is executed or
refused by the addressee or its agent

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or (iv) if sent by facsimile or other generally accepted
means of electronic transmission, on the date confirmation of transmission is received (provided
that a copy of any notice delivered
pursuant to this clause (iv) shall also be sent pursuant to clause (ii) or (iii)), addressed to the
attention of the addressee’s General Counsel at the address of its principal executive office or to
such other address or facsimile number for a party as it shall have specified by like notice.

          9.6 Counterparts. This Agreement may be executed in counterparts, each of which shall be
deemed to be an original but all of which shall constitute one and the same agreement.

          9.7 Binding Effect; Assignment. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective legal representatives and successors, and
nothing in this Agreement, express or implied, is intended to confer upon any other Person any
rights or remedies of any nature whatsoever under or by reason of this Agreement. This Agreement
may not be assigned by any party hereto.

          9.8 No Third Party Beneficiaries. This Agreement is solely for the benefit of Pride,
Seahawk and their Subsidiaries and is not intended to confer upon any other Person any rights or
remedies hereunder.

          9.9 Severability. If any term or other provision of this Agreement is determined by a
nonappealable decision by a court, administrative agency or arbitrator to be invalid, illegal or
incapable of being enforced by any rule of law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not affected in any manner
materially adverse to either party. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the court, administrative agency or arbitrator
shall interpret this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to
the fullest extent possible. If any sentence in this Agreement is so broad as to be unenforceable,
the provision shall be interpreted to be only so broad as is enforceable.

          9.10 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or delay on the
part of either party hereto in the exercise of any right hereunder shall impair such right or be
construed to be a waiver of, or acquiescence in, any breach of any representation, warranty or
agreement herein, nor shall any single or partial exercise of any such right preclude other or
further exercise thereof or of any other right. All rights and remedies existing under this
Agreement are cumulative to, and not exclusive of, any rights or remedies otherwise available.

          9.11 Amendments; Waivers. Any provision of this Agreement may be amended or waived if, but
only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each
party to this Agreement, or in the case of a waiver, by the party against whom the waiver is to be
effective. No failure or delay by any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof nor

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shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or privilege. Except
as otherwise provided
herein, the rights and remedies herein provided shall be cumulative and not exclusive of any rights
or remedies provided by applicable law. Any consent provided under this Agreement must be in
writing, signed by the party against whom enforcement of such consent is sought.

          9.12 Authority. Each of the parties hereto represents to the other that (a) it has the
corporate or other requisite power and authority to execute, deliver and perform this Agreement,
(b) the execution, delivery and performance of this Agreement by it has been duly authorized by all
necessary corporate or other actions, (c) it has duly and validly executed and delivered this
Agreement to be executed and delivered on or prior to the Distribution Date, and (d) this Agreement
creates legal, valid and binding obligations, enforceable against it in accordance with its
respective terms subject to applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors’ rights generally and general equity principles.

          9.13 Construction. This Agreement shall be construed as if jointly drafted by Seahawk and
Pride and no rule of construction or strict interpretation shall be applied against either party.
The parties represent that this Agreement is entered into with full consideration of any and all
rights which the parties may have. The parties have relied upon their own knowledge and judgment
and upon the advice of the attorneys of their choosing. The parties have received independent
legal advice, have conducted such investigations they and their counsel thought appropriate, and
have consulted with such other independent advisors as they and their counsel deemed appropriate
regarding this Agreement and their rights and asserted rights in connection therewith. The parties
are not relying upon any representations or statements made by any other party, or such other
party’s employees, agents, representatives or attorneys, regarding this Agreement, except to the
extent such representations are expressly incorporated in this Agreement. The parties are not
relying upon a legal duty, if one exists, on the part of any other party (or such other party’s
employees, agents, representatives or attorneys) to disclose any information in connection with the
execution of this Agreement or its preparation, it being expressly understood that no party shall
ever assert any failure to disclose information on the part of the other party as a ground for
challenging this Agreement.

          9.14 Interpretation. The headings contained in this Agreement and in the table of contents
to this Agreement are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. The word “including” and words of similar import when used in
this Agreement will mean “including, without limitation,” unless otherwise specified. The
operation of various provisions of this Agreement is illustrated by examples in Appendix A hereto,
and this Agreement shall be interpreted in accordance with such examples.

          9.15 Predecessors or Successors. Any reference to Pride, Seahawk, Seahawk Subsidiaries, a
Person, or a Subsidiary in this Agreement shall include any predecessors or successors (e.g., by
merger or other reorganization, liquidation,

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conversion, or election under Treasury Regulations
Section 301.7701-3) of Pride, Seahawk, Seahawk Subsidiaries, such Person, or such Subsidiary,
respectively.

          9.16 Expenses. Except as otherwise expressly provided for herein, each party and its
Subsidiaries shall bear their own expenses incurred in connection with preparation of Tax Returns
and other matters related to Taxes under the provisions of this Agreement for which they are
liable.

          9.17 Effective Time. This Agreement shall become effective on the date recited above on
which the parties entered into this Agreement.

          9.18 Change in Law. Any reference to a provision of the Code or any other Tax Law shall
include a reference to any applicable successor provision or law.

          9.19 Disputes. The procedures for discussion, negotiation and arbitration set forth in
Article V of the Master Separation Agreement shall apply to all disputes, controversies or claims
(whether sounding in contract, tort or otherwise) that may rise out of or relate to, or arise under
or in connection with this Agreement.

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          IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by the respective
officers as of the date set forth above.

	 	 	 	 	 
	 	PRIDE INTERNATIONAL, INC.

 	 
	 	By:  	/s/ Brian C. Voegele
 	 
	 	 	Name:  	Brian C. Voegele 	 
	 	 	Title:  	Senior Vice President and Chief Financial
Officer 	 
	 
	 	SEAHAWK DRILLING, INC.

 	 
	 	By:  	/s/ Randall D. Stilley
 	 
	 	 	Name:  	Randall D. Stilley 	 
	 	 	Title:  	President and Chief Executive Officer 	 

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APPENDIX A

          The following examples illustrate the operation of various provisions of this Agreement.
However, each example is not necessarily intended to illustrate every provision of this Agreement
that may be relevant thereto.

          Except as stated otherwise, each of the examples assumes (i) a U.S. federal income Tax rate of
35%, (ii) that the Distribution Date was March 31, 2009 and that both the Internal Distribution and
the External Distribution occurred thereon, (iii) that Seahawk files a Separate Return with respect
to all Taxes in 2010 and later years, (iv) that the Internal Distribution qualifies as a tax-free
transaction under Sections 368(a)(1)(D) and 355 of the Code, and (v) that the External Distribution
qualifies as a tax-free transaction under Section 355 of the Code. In addition, for convenience,
it is assumed that the amount of the credit for prior deemed tax payments which would otherwise be
allowed by Section 4.2(c) is zero.

          Example 1. General Tax Allocation on Joint Return and Non-Grossed Up Payment.

          On its U.S. federal consolidated income Tax Return for the Tax Year that begins January 1,
2009, and ends December 31, 2009, the Pride consolidated group reports $200x of consolidated net
taxable income, no credits, and a Tax liability of $70x (viz., (35%)($200x)). Of the $200x of
consolidated net taxable income reported on such Tax Return, $150x is attributable to and arises
from the Pride Business. The remaining $50x of consolidated net taxable income is attributable to
and arises from the Seahawk Business during the period in which Seahawk joins in the filing of such
Tax Return (viz., the period beginning January 1, 2009, and ending on the Distribution Date).
Pride’s basis in the stock of Seahawk immediately prior to the External Distribution was $17.5x.

          The $150x of taxable income attributable to the Pride Business and the $50x of taxable income
attributable to the Seahawk Business in each case includes deductions. However, in neither case
are these deductions a Tax Benefit, because the aggregate of such deductions in the Tax Year does
not exceed the income attributable to or arising from the relevant business in such Tax Year.

          Because Pride’s 2009 U.S. federal consolidated income Tax Return includes Tax Items of each of
the Pride Business and the Seahawk Business (determined without regard to Tax Items carried forward
to such Tax Year), it will be a Joint Return. Pursuant to Section 2.1, each of Pride and Seahawk
will be liable for its allocable portion of the $70x of Tax shown on such Joint Return. Because
$150x of the consolidated net taxable income contributing to the Tax was attributable to the Pride
Business and $50x of the consolidated net taxable income contributing to the Tax was attributable
to the Seahawk Business, pursuant to Section 2.2(a), $52.5x of Tax will be allocable to Pride
(viz., ($150x/$200x)($70x)) and $17.5x of Tax will be allocable to Seahawk (viz.,
($50x/$200x)($70x)).

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          Pursuant to Section 3.1(a), Pride is responsible for preparing and filing the Joint Return.
As a result, Pride will have the exclusive right to make those determinations described in Section
3.3(a) with respect to such Tax Return. Pursuant to Section 4.1, Pride must pay the $70x of Tax to
the Tax Authority. Pursuant to Section 4.2(a), Seahawk must remit the amount for which it is
liable (viz., $17.5x) to Pride within thirty days after receiving notification requesting such
amount. If payment is not made within thirty days, Seahawk must pay interest thereafter on the
amount past due at the rate and as determined under Section 4.4.

          Pursuant to Section 4.7, the parties must treat Seahawk’s payment of $17.5x as a distribution
to Pride immediately prior to the External Distribution. Because the $17.5x payment does not
exceed Pride’s basis in the Seahawk stock, Pride recognizes no gain. If, however, Pride had a
basis of $7.5x in its Seahawk stock immediately prior to the External Distribution, the $17.5x
deemed distribution would have created an excess loss account of $10x (viz., $7.5x basis — $17.5x)
in Pride’s Seahawk stock, which $10x would have been included in income immediately before the
External Distribution pursuant to Treasury Regulations Section 1.1502-19. Section 4.7 provides
that Seahawk would not be required to gross up its $17.5x payment to Pride by the amount of Taxes
owed by Pride as a result of this $10x of income.

          Example 2. Separate Return filed by Seahawk.

          On the Joint Return for the Tax Year that begins on January 1, 2009 and ends December 31,
2009, the Pride consolidated group reports $200x of consolidated net taxable income, no credits,
and a Tax liability of $70x (viz., (35%)($200x)). Of the $200x of consolidated net taxable income
reported on such Joint Return, $150x is attributable to and arises from the Pride Business. The
remaining $50x of consolidated net taxable income is U.S. source taxable income attributable to and
arising from the Seahawk Business during the period in which Seahawk joins in the filing of such
Tax Return (viz., the period beginning January 1, 2009, and ending on the Distribution Date).

          The remaining $50x of consolidated taxable income represents 1/4 of the consolidated taxable
income of Seahawk and its subsidiaries during the period beginning January 1, 2009, and ending
December 31, 2009. In determining the $50x of consolidated net taxable income reported on the
Joint Return, Pride elected, under Treasury Regulations Section 1.1502-76(b)(2)(ii)(D), to allocate
the income of Seahawk and its consolidated subsidiaries ratably between (i) the period beginning on
January 1, 2009, and ending on the Distribution Date and (ii) the period beginning on April 1,
2009, and ending on December 31, 2009. No items of income constitute “extraordinary items” within
the meaning of Treasury Regulations Section 1.1502-76(b)(2)(ii)(C).

          Pursuant to Section 3.2(b) Seahawk is responsible for preparing and filing a Separate Return
for the Seahawk consolidated group for the period beginning on April 1, 2009, and ending on
December 31, 2009. As a result, Seahawk will have the right to make those determinations described
in Section 3.3(a) with respect to the Separate Return, subject to the limitations in Section
3.3(b). Thus, since Pride determined, with respect to the 2009 Joint Return, to make the election
described in Treasury Regulations

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Section 1.1502-76(b)(2)(ii)(D) to allocate the income of Seahawk and its consolidated
subsidiaries ratably between (i) the period beginning on January 1, 2009, and ending on the
Distribution Date and (ii) the period beginning on April 1, 2009, and ending on December 31, 2009,
Seahawk must, pursuant to Section 3.1(b)(ii), also make such election for itself and other members
of the Seahawk consolidated group on the related Separate Return prepared by Seahawk so that its
net consolidated income is allocated consistently with the Joint Return.

          Because no items of income constitute extraordinary items, the result is that $50x of
Seahawk’s net income is allocated to the Joint Return and $150x of Seahawk’s net income is
allocated to its Separate Return. Because the $150x of income allocated to the Separate Return is
allocated to Seahawk pursuant to Section 2.2(a), Seahawk must pay the $52.5x of Tax shown on such
Tax Return to the Tax Authority pursuant to Section 2.1(a)(i).

          Example 3. Tax and Tax Benefit Allocation on Joint Return.

          On the Joint Return for the Tax Year that begins on January 1, 2009, and ends December 31,
2009, the Pride consolidated group reports $200x of consolidated net taxable income, a $5x foreign
Tax credit, and a Tax liability of $65x (viz., (35%)($200x) -$5x). Of the $200x of consolidated
net taxable income reported on such Joint Return, $150x is foreign source taxable income
attributable to and arising from the Pride Business. The remaining $50x of consolidated net
taxable income is U.S. source taxable income attributable to and arising from the Seahawk Business
during the period in which Seahawk joins in the filing of such Tax Return (viz., the period
beginning January 1, 2009, and ending on the Distribution Date). In addition, the $5x foreign Tax
credit is allocated to Seahawk pursuant to Section 2.2(a) and such Tax credit arose during 2008 and
is properly carried forward to the 2009 Joint Return. During its short Tax Year beginning on April
1, 2009, and ending on December 31, 2009, the Seahawk Business generated $100x of foreign source
taxable income.

          Section 2.2 first allocates the Tax which would be payable pursuant to Section 2.1 in the
absence of any Tax Benefit, such as the $5x foreign Tax credit. Thus, before taking into account
the $5x foreign Tax credit, $52.5x of Tax would be allocable to Pride and $17.5x of Tax would be
allocable to Seahawk, as in Example 1. Section 2.2 then allocates the Tax Benefit, consisting of
the $5x foreign Tax credit.

          Under applicable Tax Law, Seahawk’s short Tax Year ending on the Distribution Date will be
considered the same Tax Year as Pride’s Tax Year ending on December 31, 2009 (and which includes
Seahawk’s short Tax Year), but will be considered a different Tax Year from Seahawk’s short Tax
Year that begins after the Distribution Date. After taking into account only those Tax Items
allocated to it, the $5x foreign Tax credit would not be allowable to Seahawk under applicable Tax
Law because Seahawk has no foreign source taxable income during its short Tax Year ending on the
Distribution Date. Accordingly, pursuant to Section 2.1(c), Seahawk shall not take into account
(and shall not be considered to have taken into account) the Tax Benefit, consisting of the $5x
foreign Tax credit. And pursuant to Section 2.1(b), Pride will be

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entitled to use such foreign Tax credit and will not be required to compensate Seahawk
therefor, notwithstanding the fact that Seahawk would otherwise have been able to use such foreign
Tax credit in its short Tax Year following the Distribution Date.

          Thus, the ultimate Tax liability of $65x (viz., (35%)($200x) — $5x) shown on the Joint Return
will be allocated $47.5x to Pride (viz., $52.5x — $5x) and $17.5x to Seahawk.

          Example 4. Tax Credit Carryforward on Seahawk Separate Return.

          On its Separate Return for the Tax Year that begins on January 1, 2010, and ends December 31,
2010, the Seahawk consolidated group has $100x of consolidated net taxable income, no losses, and
$70x of Tax credits. All $100x of consolidated net taxable income reported on the Separate Return
is foreign source taxable income attributable to and arising from the Seahawk Business. The $70x
of Tax credits consist of (i) a $50x foreign Tax credit carryforward which was generated in 2008 by
a member of the Seahawk Group (as the Seahawk Group was composed in 2008) which was at all times
during 2008 engaged solely in the Pride Business, and (ii) a $20x foreign Tax credit carryforward
which was generated in 2008 by a member of the Seahawk Group (as the Seahawk Group was composed in
2008) which was at all times during 2008 engaged solely in the Seahawk Business. Pride was unable
to use the $50x foreign Tax credit on its 2008 and 2009 Joint Returns, and under applicable Tax
Law, the $50x foreign Tax credit is properly carried forward and used by Seahawk on its 2010
Separate Return. Similarly, the $20x foreign Tax credit is properly carried forward and used by
Seahawk on its 2010 Separate Return.

          As above, Section 2.2 first allocates the Tax which would be payable pursuant to Section 2.1
in the absence of any Tax Benefit, such as the $70x Tax credits. Thus, before taking into account
the $70x Tax credits, $35x of Tax would be allocable to Seahawk because all $100x of the
consolidated net taxable income contributing to the Tax was attributable to the Seahawk Business.
Section 2.2 then allocates the Tax Benefits, consisting of the $70x Tax credits. Because the $50x
foreign Tax credit carryforward was attributable to the Pride Business, it is allocated to Pride
pursuant to Section 2.2. This is true regardless of the fact that the foreign Tax credit was
generated by a member of the Seahawk Group (as the Seahawk Group was composed in 2008). Because
the $20x foreign Tax credit was attributable to the Seahawk Business, it is allocated to Seahawk
pursuant to Section 2.2.

          Under the facts above, Seahawk is entitled to use both the $50x foreign Tax credit and the
$20x foreign Tax credit on its 2010 Separate Return. However, because the $50x foreign Tax credit
arose in a Tax Year that begins on or before the Distribution Date, was allocated to Pride pursuant
to Section 2.2, and was used by Seahawk to reduce its Taxes in a Tax Year which begins after the
Distribution Date, Seahawk must, pursuant to Sections 2.1(a)(ii), 4.2(d)(ii), and 4.2(d)(iii), pay
to Pride an amount equal to such Tax Benefit within fifteen business days following the time that
Seahawk files such Separate Return.

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          Pursuant to Section 4.2(d)(iii), the amount of the Tax Benefit that Seahawk must pay to Pride
will be the amount by which Seahawk’s Taxes are actually reduced by using the $50x foreign Tax
credit on its 2010 Separate Return (determined in accordance with the provisions of Section
2.1(c)). Pursuant to Section 2.1(c), Seahawk is considered to have used a pro rata portion of each
of the $20x foreign Tax credit and the $50x foreign Tax credit. Such pro rata portions are
determined by multiplying each Tax credit used on Seahawk’s 2010 Separate Return by a fraction, the
numerator of which is equal to the total reduction in Seahawk’s Taxes resulting from the actual use
of Tax Benefits (viz., $35x), and the denominator of which is equal to the total reduction in Taxes
that would result if Seahawk had been able to use all of the Tax Benefits to which it would be
entitled (viz., $70x). Seahawk is thus considered to have used $25x of the $50x foreign Tax credit
(viz., $50x($35x/$70x)) and $10x of the $20x foreign Tax credit (viz., $20x($35x/$70x)) on its 2010
Separate Return.

          Thus, on its 2010 Separate Return, Seahawk reports an ultimate Tax liability of $0x (viz.,
(35%)($100x) — $35x), but must pay $25x to Pride within fifteen business days following the time
that Seahawk files its 2010 Separate Return.

          Example 5. Carryback of Tax Benefit by Seahawk.

          On the Joint Return for the Tax Year that begins on January 1, 2009 and ends December 31,
2009, the Pride consolidated group reports $200x of consolidated net taxable income, no credits,
and a Tax liability of $70x (viz., (35%)($200x)). Of the $200x of consolidated net taxable income
reported on such Joint Return, $150x is attributable to and arises from the Pride Business. The
remaining $50x of consolidated net taxable income is attributable to and arises from the Seahawk
Business during the period in which Seahawk joins in the filing of such Tax Return (viz., the
period beginning January 1, 2009, and ending on the Distribution Date).

          In addition, the Seahawk Business has $150x of net taxable income and no losses or credits
during the period beginning on April 1, 2009, and ending on December 31, 2009, but, in 2010, the
Seahawk Business generates a $150x net operating loss (“NOL”), which constitutes a Tax Benefit
allocated to Seahawk pursuant to Section 2.2(a).

          Pursuant to Section 3.3(d), Seahawk must elect under Section 172(b)(3) of the Code to
relinquish the entire carryback period with respect to the $150x NOL because such NOL may not be
carried back to the 2009 Joint Return. Under applicable Tax Law, the relinquished carryback period
includes the period beginning on January 1, 2009, and ending on the Distribution Date, with respect
to the Joint Return, and the period beginning on April 1, 2009, and ending on December 31, 2009,
with respect to Seahawk’s Separate Return.

          However, if Seahawk generated a foreign Tax credit in its Tax Year ending December 31, 2009,
which would otherwise be carried back to the Joint Return under applicable Tax Law, Seahawk is not
required to claim a deduction for, rather than elect to credit, foreign Taxes paid in 2009, in
order to avoid the carryback of the foreign

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Tax credit to the 2009 Joint Return. If Seahawk elects to credit foreign Taxes paid in 2009,
the foreign Tax credit would be carried back to the 2009 Joint Return under applicable Tax Law, and
pursuant to Section 2.1(b)(ii)(B), Pride would be entitled to utilize it as a Tax Benefit (assuming
such use was permitted under applicable Tax Law) and would be required to compensate Seahawk
therefor.

          Example 6. NOL Carryforward as a Tax Benefit on Joint Return.

          On the Joint Return for the Tax Year that begins on January 1, 2009 and ends December 31,
2009, the Pride consolidated group reports $150x of consolidated net taxable income, no credits,
and a Tax liability of $52.5x (viz., (35%)($150x)). Of the $150x of consolidated net taxable
income reported on such Tax Return, all $150x is attributable to and arises from the Pride
Business. In addition, the Seahawk Business generated a $150x NOL in 2008, which is carried
forward to the 2009 Joint Return under applicable Tax Law.

          As above, Section 2.2 first allocates the Tax which would be payable pursuant to Section 2.1
in the absence of any Tax Benefit. Thus, before taking into account any Tax Benefits, $52.5x of
Tax would be allocable to Pride pursuant because all $150x of the consolidated net taxable income
contributing to the Tax was attributable to the Pride Business, and $0x of the consolidated net
taxable income contributing to the Tax was attributable to the Seahawk Business. Section 2.2 then
allocates any Tax Benefits. Because no amount of the NOL carryforward can be used as a deduction
by Seahawk, the entire $150x NOL will constitute a Tax Benefit. Moreover, because the $150x NOL
was attributable to the Seahawk Business, it is a Tax Benefit that is allocated to Seahawk pursuant
to Section 2.2(a). Under applicable Tax Law and pursuant to Section 2.1(a), however, Pride will be
entitled to use the NOL as a Tax Benefit to reduce its consolidated taxable income in 2009 and will
not be required to compensate Seahawk therefor. Thus, in 2009, Pride will be obligated to pay Tax
of $0x (viz., (35%)($150x — $150x) to the Tax Authority and $0x to Seahawk.

          Example 7. Breach of Covenants and Grossed-Up Payment.

          Immediately before the Internal Distribution, (i) Seahawk held the DeepCo stock with a fair
market value of $250x and a basis of $50x, and (ii) Pride held the Seahawk stock with a fair market
value of $500x and a basis of $200x. In 2010 Pride enters into a merger whereby an acquiring
corporation acquires all of the assets and liabilities of Pride and Pride’s shareholders receive
stock in the acquiring corporation in exchange for all of their stock in Pride. Assume that
entering into the merger causes the External Distribution to be taxable to Pride under Section
355(e) and causes the Internal Distribution to fail to qualify as a tax-free transaction described
under Sections 368(a)(1)(D) and 355 of the Code (see Section 355(f)).

          As a result, Seahawk and Pride will be required to recognize all of their realized gain on the
Internal Distribution and External Distribution, respectively. After taking into account the basis
adjustments to the Seahawk stock as a result of recognizing the $200x of gain on the Internal
Distribution and as a result of the distribution itself, the

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merger results in a net Tax liability of $105x (viz., (35%)($100x gain on External
Distribution + $200x gain on Internal Distribution)).

          Pursuant to Section 2.2(b), all $105 of the Tax (viz., (35%)($300x)) resulting from the
Internal Distribution and External Distribution would be allocated to Pride because entering into
the merger will cause Section 355(e) to apply to the External Distribution.

          Example 8. Redetermination of Foreign Tax.

          On the Joint Return for the Tax Year that begins on January 1, 2008, and ends December 31,
2008, the Pride consolidated group reports $200x of consolidated net taxable income, a $40x foreign
Tax credit, and a Tax liability of $30x (viz., (35%)($200x) — $40x of foreign Tax credits). Of
the $200x of consolidated net taxable income reported on such Joint Return, $40x is foreign source
taxable income and $60x is U.S. source taxable income attributable to and arising from the Pride
Business and $100x is foreign source taxable income attributable to and arising from the Seahawk
Business. The $40x foreign Tax credit is allocated to Seahawk pursuant to Section 2.2(a).

          Section 2.2 first allocates the Tax which would be payable pursuant to Section 2.1 in the
absence of any Tax Benefit, such as the $40x foreign Tax credit. Thus, before taking into account
the $40x foreign Tax credit, $35x of Tax would be allocable to Pride and $35x of Tax would be
allocable to Seahawk. Section 2.2 then allocates the Tax Benefit, consisting of the $40x foreign
Tax credit. After taking into account only those Tax Items allocated to Seahawk, the $40x foreign
Tax credit would be allowable to Seahawk under applicable Tax Law, but Seahawk would be limited to
using an amount thereof equal to its $35x of Tax determined before utilizing the foreign Tax
credit. Pursuant to Section 2.1(c), Seahawk will take into account (and will be considered to have
taken into account) a $35x Tax Benefit, consisting of $35x of the foreign Tax credit. As a result,
Seahawk would be liable for $0x of Taxes pursuant to Section 2.1(a)(i) (viz., ($100x)(35%) — $35x).
Pursuant to Section 2.1(c)(i), Pride will be entitled to use the remaining $5x of such foreign Tax
credit and will not be required to compensate Seahawk therefor. As a result, Pride would be liable
for $30x of Taxes pursuant to Section 2.1(b)(i) (viz., ($100x)(35%) — $5x). Thus, the Tax
liability of $30x (viz., (35%)($200x) — $40x) shown on the Joint Return is allocated $30x to Pride
(viz., (35%)($100x) — $5x) and $0x to Seahawk (viz., (35%)($100x) — $35x).

          On June 16, 2010, a date subsequent to the Distribution Date, Seahawk pays $30x to the Mexican
government in settlement of a Tax Contest attributable to the Seahawk Business for the 2008 Tax
Year. As required by Section 3.3(a), Pride amends the Pride consolidated group’s Joint Return for
the 2008 Tax Year to claim a foreign Tax credit for the $30x paid by Seahawk to the Mexican
government and receives a refund of $9x (viz. (35%)($200x) = $70; ($70)($140x/$200x) = $49x foreign
Tax credit limitation; $49x — $40x = $9x).

          As a result of amending such Joint Return, Section 4.3 requires that the amounts paid under
this Agreement be redetermined as follows. Section 2.2 first

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allocates the Tax which would be payable pursuant to Section 2.1 in the absence of any Tax
Benefit, such as the $70x foreign Tax credit. Thus, before taking into account the $70x foreign
Tax credit, $35x of Tax would be allocable to Pride and $35x of Tax would be allocable to Seahawk.
Section 2.2 then allocates the Tax Benefit, consisting of the $70x foreign Tax credit. After
taking into account only those Tax Items allocated to Seahawk, the $70x foreign Tax credit would be
allowable to Seahawk under applicable Tax Law in an amount equal to its $35x of Tax determined
before utilizing the foreign Tax credit. Pursuant to Section 2.1(c), Seahawk will take into
account (and will be considered to have taken into account) a $35x Tax Benefit, consisting of $35x
of the foreign Tax credit. As a result, Seahawk would be liable for $0x of Taxes pursuant to
Section 2.1(a)(i) (viz., ($100x)(35%) — $35x). Pursuant to Section 2.1(b) and 2.1(c), Pride will
be entitled to use the remaining $35x of such foreign Tax credit, but will be limited to using $14x
thereof after taking into account the foreign Tax credit limitation based only on Pride’s Tax Items
(viz., ($100x)(35%) X ($40x/$100x)). As a result, Pride would be liable for $21x of Taxes pursuant
to Section 2.1(b)(i) (viz., ($100x)(35%) — $14x). Thus, the amended Tax liability of $21x (viz.,
(35%)($200x) — $49x) shown on the amended Joint Return is allocated $21x to Pride (viz.,
(35%)($100) — $14x) and $0x to Seahawk (viz., (35%)($100x) — $35x), and the remainder of the
foreign Tax credits for 2008 (viz., $21x = $70x — $49x) will be carried back or forward under
applicable Tax Law.

          Because the $30x additional foreign Tax credit arose as a result of the resolution after the
Distribution Date of a Tax Contest for a Tax Year that began prior to the Distribution Date, such
foreign Tax credit was allocated to Seahawk pursuant to Section 2.2, and Pride used $9x (viz., $14x
- $5x of foreign Tax credits attributable to Tax Years beginning prior to the Distribution Date) of
such foreign Tax credit to reduce Taxes payable by it pursuant to clause (i) of Section 2.1(b) for
a Tax Year that began on or before the Distribution Date, Pride must, pursuant to Sections
2.1(b)(ii)(C) and 4.2(d)(i), pay to Seahawk $9x, which is equal to the amount of such additional
foreign Tax credit, within fifteen days following Pride’s receipt of such refund.

          The unused foreign Tax credit of $21x is a Tax Benefit which is allocated to Seahawk under
Section 2.2(a) and will be subject to the provisions of this Agreement which apply to Tax Benefits.

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