Document:

exv10w3

Payment Blockage Notice received by it to the Company and the Company shall promptly deliver such
copy to all holders of Designated Senior Debt. If the holders of a majority in principal amount of
all Designated Senior Debt outstanding at the time such Payment Blockage Notice is delivered to the
Company shall, within 10 days of their receipt thereof, deliver to the Company and the Trustee a
notice rescinding such Payment Blockage Notice, such Payment Blockage Notice shall be deemed not to
have been delivered for all purposes of this Indenture. If the Trustee receives any such Payment
Blockage Notice, no subsequent Payment Blockage Notice will be effective for purposes of this
Section [10.03] unless and until at least 360 days have elapsed since the delivery of the
immediately prior Payment Blockage Notice.

     No Nonpayment Default that existed or was continuing on the date of delivery of any Payment
Blockage Notice to the Trustee may be, or may be made, the basis for a subsequent Payment Blockage
Notice unless such default has been cured or waived for a period of not less than 90 days.

     (b) The Company may and will resume payments on and distributions in respect of
the Notes
and may acquire them upon the earlier of:

          (1) in the case of a Payment Default, upon the date upon which such default is cured or
waived, and

          (2) in the case of a Nonpayment Default, upon the earlier of the date on which such Nonpayment
Default is cured or waived or 179 days after the date on which the applicable Payment Blockage
Notice is received, unless the maturity of any Designated Senior Debt has been accelerated (in
which event the foregoing subclause (1) shall apply),

if this Article [10] otherwise permits such payment, distribution or acquisition at the time of
such payment, distribution or acquisition.

Section [10.04] Acceleration of Notes.

     If payment of the Notes is accelerated because of an Event of Default, the Company may not
make, directly or indirectly through any Subsidiary or other Person, any payment or distribution to
the Trustee or any Holder in respect of Obligations with respect to the Notes and may not acquire
from the Trustee or any Holder any Notes for cash or property until all principal and other
Obligations with respect to the Senior Debt have been paid in full or such acceleration is
rescinded in accordance with the terms of this Indenture. The Company will promptly notify holders
of Senior Debt of any such acceleration.

Section [10.05] When Distribution Must Be Paid Over.

     In the event that the Trustee or any Holder of the Notes receives any payment of any
Obligations with respect to the Notes at a time when the payment is prohibited by Section [10.03]or
Section [10.04], such payment will be held by the Trustee or such Holder, in trust for the benefit
of, and will be paid forthwith over and delivered, upon written request, to, the holders of Senior
Debt as their interests may appear or their Representative, if any, under the agreement, indenture
or other document (if any) pursuant to which Senior Debt may have been issued, as their respective
interests may appear, for application to the payment of all Obligations with respect to Senior Debt
remaining unpaid to the extent necessary to pay such Obligations in full in accordance with their
terms, after giving effect to any concurrent payment or distribution to or for the holders of
Senior Debt.

     With respect to the holders of Senior Debt, the Trustee undertakes to perform only those
obligations on the part of the Trustee as are specifically set forth in this Article [10], and no
implied

 

 

covenants or obligations with respect to the holders of Senior Debt will be read into this
Indenture against the Trustee. The Trustee will not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and will not be liable to any such holders if the Trustee pays over or
distributes to or on behalf of Holders or the Company or any other Person money or assets to which
any holders of Senior Debt are then entitled by virtue of this Article [10], except if such payment
is made as a result of the willful misconduct or gross negligence of the Trustee.

Section [10.06] Notice by Company.

     The Company will promptly notify the Trustee and the Paying Agent of any facts known to the
Company that would cause a payment of any Obligations with respect to the Notes to violate this
Article [10], but failure to give such notice will not affect the subordination of the Notes to the
Senior Debt as provided in this Article [10].

Section [10.07] Subrogation.

     After all Senior Debt is paid in full and until the Notes are paid in full, Holders of Notes
will be subrogated (equally and ratably with all other Indebtedness pari passu with the
Notes) to the rights of holders of Senior Debt to receive distributions applicable to Senior Debt
to the extent that distributions otherwise payable to the Holders of Notes have been applied to the
payment of Senior Debt. A distribution made under this Article [10] to holders of Senior Debt that
otherwise would have been made to Holders of Notes is not, as between the Company and Holders, a
payment by the Company on the Notes.

Section [10.08] Relative Rights.

     This Article [10] defines the relative rights of Holders of Notes and holders of Senior Debt.
Nothing in this Indenture will:

          (1) impair, as between the Company and Holders of Notes, the obligation of the
Company, which is absolute and unconditional, to pay principal of, interest and Additional
Interest, if any, on, the Fundamental Change Repurchase Price of, and to pay or deliver any amount
due upon conversion of, the Notes in accordance with their terms;

          (2) affect the relative rights of Holders of Notes and creditors of the Company other
than their rights in relation to holders of Senior Debt; or

          (3) prevent the Trustee or any Holder of Notes from exercising its available remedies
upon a Default or Event of Default, subject to the rights of holders and owners of Senior Debt
to receive distributions and payments otherwise payable to Holders of Notes.

     If the Company fails because of this Article [10] to pay principal of, interest or Additional
Interest, if any, on, the Fundamental Change Repurchase Price of, or to pay or deliver any amount
due upon conversion of, the Notes in accordance with their terms, the failure is still a Default or
Event of Default.

Section [10.09] Subordination May Not Be Impaired by Company.

     No right of any holder of Senior Debt to enforce the subordination of the Indebtedness
evidenced by the Notes may be impaired by any act or failure to act by the Company or any Holder or
by the failure of the Company or any Holder to comply with this Indenture.

 

 

     Whenever a distribution is to be made or a notice given to holders of any series of Senior
Debt, the distribution may be made and the notice given to their Representative, if they have
appointed one, and if no Representative has been appointed by the holders of any series of Senior
Debt, such distribution or notice shall be made or given directly to such holders.

     Upon any payment or distribution of assets of the Company referred to in this Article [10],
the Trustee and the Holders of Notes will be entitled to rely upon any order or decree made by any
court of competent jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other Person making any distribution to the Trustee or to the
Holders of Notes for the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Debt and other Indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article [10].

Section [10.11] Rights of Trustee and Paying Agent.

     Notwithstanding the provisions of this Article [10] or any other provision of this Indenture,
the Trustee will not be charged with knowledge of the existence of any facts that would prohibit
the making of any payment or distribution by the Trustee, and the Trustee and the Paying Agent may
continue to make payments on the Notes, unless the Trustee has received at its Corporate Trust
Office at least three Business Days prior to the date of such payment written notice of facts that
would cause the payment of any Obligations with respect to the Notes to violate this Article [10],
except for any acceleration of the Notes prior to making any such payment or distribution which is
known by any officer of the Trustee prior to making any such payment or distribution. The notice
may only be given by the Company or a Representative. For the avoidance of doubt, no such notice
shall constitute a Payment Blockage Notice unless delivered in accordance with Section 10.03(a)(2).
Nothing in this Article [10] will impair the claims of, or payments to, the Trustee under or
pursuant to [reference to “Compensation and Indemnity” section]
hereof.

     The Trustee in its individual or any other capacity may hold Senior Debt with the same rights
it would have if it were not Trustee. Any Agent may do the same with like rights.

Section [10.12] Authorization to Effect Subordination; Filing Proof of Claim.

     Each Holder of Notes, by the Holder’s acceptance thereof, authorizes and directs the Trustee
on such Holder’s behalf to take such action as may be necessary or appropriate to effectuate the
subordination as provided in this Article [10], and appoints the Trustee to act as such Holder’s
attorney-in-fact for any and all such purposes. If the Trustee does not file a proper proof of claim
or proof of debt in the form required in any proceeding referred to in [reference to
“Trustee May File Proofs of Claim” section] hereof at least 30 days
before the expiration of the time to file such claim or any Representative, are hereby authorized
to file an appropriate claim for and on behalf of the Holders of the Notes.

Section [10.13] Reliance and Amendments.

 

 

     (a) Each Holder of Notes by its acceptance thereof acknowledges and agrees that the
subordination provisions set forth in this Article [10] are, and are intended to be, an inducement
and a consideration for each holder of any Senior Debt, whether such Senior Debt was created or
acquired before or after the issuance of the Notes, to acquire and continue to hold, or to continue
to hold, such Senior Debt, and such holder of Senior Debt shall be deemed conclusively to have
relied on such subordination provisions in acquiring and continuing to hold or in continuing to
hold such Senior Debt.

     (b) The provisions of this Article [10] may not be amended or modified without the written
consent of the holders of all Senior Debt. In addition, any amendment to, or waiver of, the
provisions of this Article [10] that adversely affects the rights of the Holders of the Notes will
require the consent of the Holders of a majority in aggregate principal amount of Notes then
outstanding.

Section [10.14] No Waiver of Subordination Provisions.

     Without in any way limiting the generality of Section [10.09], the holders of Senior Debt may,
at any time and from time to time, without the consent of or notice to the Trustee or the Holders,
without incurring responsibility to the Holders and without impairing or releasing the
subordination provided in this Article 10 or the obligations hereunder of the Holders to the
holders of Senior Debt, do any one or more of the following: (a) change the manner, place or terms
of payment or extend the time of payment of, or renew or alter, Senior Debt, or otherwise amend or
supplement in any manner Senior Debt or any instrument evidencing the same or any agreement under
which Senior Debt is outstanding; (b) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Debt; (c) release any Person liable in any manner
for the collection of Senior Debt; and (d) exercise or refrain from exercising any rights against
the Company and any other Person.

ARTICLE [11].

NOTE GUARANTEES

Section [11.02]

     [The Obligations of each Guarantor under its Note Guarantee pursuant to this Article 11
will be junior and subordinated to the Senior Debt of such Guarantor on the same basis as the Notes
are junior and subordinated to Senior Debt of the Company. For the purposes of the foregoing
sentence, the Trustee and the Holders will have the right to receive and/or retain payments by any
of the Guarantors only at such times as they may receive and/or retain payments in respect of the
Notes pursuant to this Indenture, including Article [10] hereof.]

     Selected Definitions:

     “Additional Interest” means the additional interest payable at the election of the
Company as the sole remedy for an Event of Default relating to the failure by the Company to comply
with the Company’s Filing Obligations [as such term may be defined in the Indenture]
and for any failure by the Company to comply with the requirements of Section 314(a)(1) of the
Trust Indenture Act of 1939, as amended.

 

 

     “Affiliate” of any specified Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with such specified
Person. For purposes of this definition, “control,” as used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise. For purposes of this definition, the terms “controlling,”
“controlled by” and “under common control with” have correlative meanings.

     “Bankruptcy Law” means Title 11, U.S. Code or any similar federal or state law for
the relief of
debtors.

     “Board of Directors” means:

          (1) with respect to a corporation, the board of directors of the corporation or any
committee thereof duly authorized to act on behalf of such board;

          (2) with respect to a partnership, the Board of Directors of the general partner of the
partnership;

          (3) with respect to a limited liability company, the managing member or members or any
controlling committee of managing members thereof; and

          (4) with respect to any other Person, the board or committee of such Person serving
a similar function.

     “Business Day” means any day other than a Saturday, a Sunday or any other
day on which the Federal Reserve Bank of New York is authorized or obligated by law or
executive order to close or be closed.

     “Capital Lease Obligations” of any Person means the obligations of such Person to
pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real
or personal property, or a combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of
such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

     “Capital Stock” means:

          (1) in the case of a corporation, corporate stock;

          (2) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of corporate
stock;

          (3) in the case of a partnership or limited liability company, partnership interests
(whether general or limited) or membership interests; and

          (4) any other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing Person, but
excluding from all of the foregoing any debt securities convertible into Capital Stock, whether
or not such debt securities include any right of participation with Capital Stock.

     “Common Stock” means the common stock of the Company, par value $1.00 per share,
at the date of this Indenture, or such other Reference Property into which the Company’s common
stock is changed pursuant to [reference to the “Effect of Recapitalization, Reclassification,
Consolidation, Merger or Sale” section].

 

 

     “Corporate Trust Office” will be at the address of the Trustee specified in
[reference to the “Notices” section] hereof or such other
address as to which the Trustee may give notice to the Company.

     “Credit Agreement” means that certain Credit Agreement, dated as of October 1,
2007, by and among the Company, the guarantors party thereto, the lenders party thereto, JPMorgan
Chase Bank, N.A., as Administrative Agent and Collateral Agent and Bank of America, N.A., as
Syndication Agent, providing for up to $1,800,000,000 of revolving credit and term loan borrowings,
including any related notes, Guarantees, collateral documents, instruments and agreements executed
in connection therewith, and, in each case, as amended, restated, modified, renewed, refunded,
replaced in any manner (whether upon or after termination or otherwise) or refinanced (including by
means of sales of debt securities) in whole or in part from time to time.

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

     “Designated Senior Debt” means:

          (5) any Indebtedness outstanding under the Credit Agreement;

          (6) any Indebtedness outstanding under the Existing Senior Notes; and

          (7) any other Senior Debt the principal amount of which is $[25.0]
million or more and that has been designated by the Company as “Designated Senior Debt.”

     “Event of Default” has the meaning specified in [reference to the
“Events of Default” section].

     “Existing Note Purchase Agreement” means with respect to any series or tranche of
Existing Senior Notes, the note purchase agreement among the Company, the guarantors thereto and
the initial holders of such Existing Senior Notes, as supplemented, amended, restated, extended,
renewed, replaced or otherwise modified from time to time prior to the date hereof.

     “Existing Senior Notes” (i) the Company’s (a) Series 2004-1 Tranche A Notes due
2011, (b) Series 2004-1 Tranche B Notes due 2014 and (c) Series 2004-1 Tranche C Notes due 2016,
each issued pursuant to the Existing Note Purchase Agreement, dated July 8, 2004 and (ii) the
Company’s (a) Series A Senior Notes due 2012, (b) Series B Senior Notes due 2014 and (c) Floating
Rate Series C Senior Notes due 2012, each issued pursuant to the Existing Note Purchase Agreement,
dated October 1, 2007.

     “Existing Senior Note Guarantees” means the Guarantee by certain Subsidiaries of
the Company of the Company’s obligations under the Existing Notes Purchase Agreements and the
Existing Senior Notes.

     “Fundamental Change Repurchase Price” has the meaning specified in
[reference to the “Repurchase of Notes at Option of the Holder upon a
Fundamental Change” section].

     “GAAP” means generally accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board of the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial Accounting Standards Board
or in such

 

 

other statements by such other entity as have been approved by a significant segment of
the accounting profession, which are in effect on the date of the Indenture.

     “Guarantee” of or by any Person means any obligation, contingent or otherwise, of the
guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other
obligation of any other Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect:

          (1) to purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase
of) any security for the payment thereof;

          (2) to purchase or lease property, securities or services for the purpose of assuring the
owner of such Indebtedness or other obligation of the payment thereof;

          (3) to maintain working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or
other obligation; or

          (4) as an account party in respect of any letter of credit or letter of guaranty issued to
support such Indebtedness or obligation;

provided, that the term “Guarantee” will not include endorsements for collection or deposit in
the ordinary course of business. In any computation of the Indebtedness or other liabilities of
the obligor under any Guarantee, the Indebtedness or other obligations that are the subject of
such Guarantee will be assumed to be direct obligations of such obligor.

     [“Guarantors” [to be agreed]]

     “Hedging Obligations” means, with respect to any specified Person, the
obligations of such Person under:

          (5) interest rate swap agreements (whether from fixed to floating or from floating to
fixed), interest rate cap agreements and interest rate collar agreements;

          (6) other agreements or arrangements designed to manage interest rates or interest rate
risk; and

          (7) commodity swap agreements, commodity cap agreements, commodity collar agreements, foreign
exchange contracts, currency swap agreements or any other agreements or arrangements designed to
protect such Person against fluctuations in, or providing for the transfer or mitigation of risks
related to, currency exchange rates or commodity prices, in each case, either generally or under
specific contingencies.

     For the avoidance of doubt, any Permitted Convertible Indebtedness Call Transaction will
not constitute Hedging Obligations.

     “Holder” means a Person in whose name a Note is registered.

 

 

     “Indebtedness” of any Person means, any indebtedness of such Person
(excluding accrued expenses and commercial letters of credit, trade payables or similar obligations
to a trade creditor accrued in the ordinary course of business), whether or not contingent, without
duplication:

          (8) all Obligations of such Person for borrowed money (including, without
limitation, any such obligations convertible into Capital Stock or other securities);

          (9) all Obligations of such Person evidenced by bonds, debentures, notes or similar
instruments or letters of credit (or, without duplication, reimbursement agreements in respect
thereof);

          (10) all Obligations of such Person in respect of the deferred and unpaid purchase price of
any property or services due more than six months after such property is acquired or such services
are completed, except any earn-out obligations until such obligation becomes a liability on the
balance sheet of such Person in accordance with GAAP and if not paid after becoming due and payable
(excluding current accounts payable incurred in the ordinary course of business);

          (11) all Indebtedness of others secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has been assumed;

          (12) all Guarantees by such Person of Indebtedness of others;

          (13) all Capital Lease Obligations of such Person;

          (14) all obligations, contingent or otherwise, of such Person as an account party in respect
of letters of credit and letters of guaranty;

          (15) all obligations, contingent or otherwise, of such Person in respect of bankers’
acceptances; and

          (16) representing any Hedging Obligations.

     For the avoidance of doubt, any Permitted Convertible Indebtedness Call Transaction will not
constitute Indebtedness. The Indebtedness of any Person shall include the Indebtedness of any other
entity (including any partnership in which such Person is a general partner) to the extent such
Person is liable therefor as a result of such Person’s ownership interest in or other relationship
with such entity, except to the extent the terms of such Indebtedness provide that such Person is
not liable therefor.

     “Indenture” means the indenture for the Notes among the Company, the
[Guarantors] and the Trustee, as amended or supplemented from time to time.

     “Note Guarantee” means the Guarantee by each Guarantor of the Company’s
obligations under this Indenture and the Notes, executed pursuant to the provisions of this
Indenture.

     “Notes” means any of the Company’s [•]% Convertible Senior
Subordinated Notes due 2017, as amended or supplemented from time to time, issued under the
Indenture.

     “Obligations” means any principal, interest, penalties, fees, premiums, make whole
amounts, indemnifications, reimbursements, damages and other costs, expenses and liabilities
payable under the documentation governing any Indebtedness.

 

 

	 	 	“Paying Agent” means an office or agency where Notes may be presented for
payment.

     “Permitted Convertible Indebtedness Call Transaction” means (i) any call or capped
option (or substantively equivalent derivative transaction) on Common Stock purchased by the
Company or one of its Subsidiaries in connection with the issuance of the Notes (a
“Permitted Bond Hedge Transaction”); and (ii) any call option, warrant or right to
purchase (or substantively equivalent derivative transaction) on Common Stock sold by the Company
substantially concurrently with any purchase of a related Permitted Bond Hedge Transaction (a
“Permitted Warrant Transaction”).

     “Person” means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited liability company or
government or other entity.

     “Reference Property” has the meaning specified in [reference to the
“Effect of Recapitalization, Reclassification, Consolidation, Merger or
Sale” section].

     “Representative” means the indenture trustee or other trustee, agent or
representative for any Senior Debt; provided that, if no Representative has been
appointed by any series of Senior Debt, any holder or group of holders of such series of Senior
Debt certifying that it holds a percentage of such series of Designated Senior Debt sufficient to
cause the acceleration thereof will be deemed a Representative.

	 	 	“Senior Debt” means:

          (17) all Indebtedness of the Company [or any Guarantor] outstanding under
the Credit Agreement, all Existing Senior Notes, all Existing Senior Note Guarantees, all Hedging
Obligations, all Treasury Management Arrangements and all Obligations with respect to any of the
foregoing;

          (18) any other Indebtedness of the Company [or any Guarantor] permitted to
be incurred under the terms of this Indenture, unless the instrument under which such Indebtedness
is incurred expressly provides that it is on a parity with or subordinated in right of payment to
the Notes [or any Note Guarantee]; and

          (19) all Obligations with respect to the items listed in the preceding clauses (1) and (2).

          Notwithstanding anything to the contrary in the foregoing, Senior Debt will not include:

          (20) any liability for federal, state, local or other taxes owed or owing by the Company;

          (21) any intercompany Indebtedness of the Company or any of its Subsidiaries to the Company or
any of its Affiliates;

          (22) any Indebtedness incurred for the purchase of goods or materials or for services obtained
in the ordinary course of business (other than with the proceeds of revolving credit borrowings
permitted hereby); or

          (23) the portion of any Indebtedness that is incurred in violation of this Indenture;
provided that Indebtedness under Designated Senior Debt will not cease to be “Senior
Debt” by virtue of this clause (4) if it was advanced on the basis of an Officers’ Certificate to
the effect that it was permitted to be incurred under this Indenture.

 

 

     “Subsidiary” means, with respect to any specified Person:

          (24) any corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the occurrence of any
contingency and after giving effect to any voting agreement or stockholders’ agreement that
effectively transfers voting power) to vote in the election of directors, managers or trustees of
the corporation, association or other business entity is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person
(or a combination thereof); and

          (25) any partnership or limited liability company of which (a) more than 50% of the capital
accounts, distribution rights, total equity and voting interests or general and limited
partnership interests, as applicable, are owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person or a combination thereof, whether
in the form of membership, general, special or limited partnership interests or otherwise, and
(b) such Person or any Subsidiary of such Person is a controlling general partner or otherwise
controls such entity.

     “Treasury Management Arrangement” means any agreement or other arrangement governing the
provision of treasury or cash management services, including deposit accounts, overdraft, credit
or debit card, funds transfer, automated clearinghouse, zero balance accounts, returned check
concentration, controlled disbursement, lockbox, account reconciliation and reporting and trade
finance services and other cash management services.

     “Trustee” means [•], until a successor replaces it in accordance with the
applicable provisions of this Indenture and thereafter means the successor serving hereunder.

     “Voting Stock” of any specified Person as of any date means the Capital Stock of such Person
that is at the time entitled to vote in the election of the Board of Directors of such Person.exv4w1

Exhibit 4.1

EXECUTION VERSION

TERM LOAN AND CREDIT FACILITY AGREEMENT

PROVIDING FOR A

US$465,000,000

SECURED CREDIT FACILITY

 

BULLY 1, LTD.,

AS BORROWER,

THE BANKS AND FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES

HERETO,

AS LENDERS,

STANDARD CHARTERED BANK

AND

BANK OF SCOTLAND PLC,

AS ARRANGERS

AND

NIBC BANK N.V.,

AS ARRANGER, AGENT AND SECURITY TRUSTEE

 

December 21, 2007

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	SECTION	 	PAGE
	1. DEFINITIONS
	 	 	2	 
	1.1 Specific Definitions
	 	 	2	 
	1.2 Computations of Time Periods; Other Definitional Provisions
	 	 	21	 
	1.3 Accounting Terms
	 	 	22	 
	1.4 Certain Matter Regarding Materiality
	 	 	22	 
	1.5 Forms of Documents
	 	 	22	 
	 
	 	 	 	 
	2. REPRESENTATIONS AND WARRANTIES
	 	 	22	 
	2.1 Representations and Warranties
	 	 	22	 
	 
	 	 	 	 
	3. AMOUNT AND TERMS OF THE FACILITIES
	 	 	29	 
	3.1 Purposes
	 	 	29	 
	3.2 Making the Facilities
	 	 	30	 
	3.3 The Notes
	 	 	31	 
	3.4 Drawdown Notice
	 	 	31	 
	3.5 Effect of Drawdown Notice
	 	 	31	 
	 
	 	 	 	 
	4. CONDITIONS
	 	 	31	 
	4.1 Conditions Precedent to the Effectiveness of this Agreement
	 	 	31	 
	4.2 Conditions Precedent to the Delivery Date
	 	 	36	 
	4.3 Further Conditions Precedent
	 	 	37	 
	4.4 Breakfunding Indemnity
	 	 	39	 
	4.5 Post-Closing Satisfaction
	 	 	39	 
	 
	 	 	 	 
	5. REPAYMENT AND PREPAYMENT
	 	 	40	 
	5.1 Repayment
	 	 	40	 
	5.2 Prepayment; Enforceability
	 	 	40	 
	5.3 Mandatory Prepayment; Sale, Loss or Cancellation of any Construction
Contract
	 	 	41	 
	5.4 Voluntary Prepayment
	 	 	41	 
	5.5 Repayments and Prepayments Generally
	 	 	41	 

 

 

TABLE OF CONTENTS

(Continued)

	 	 	 	 	 
	SECTION	 	PAGE
	6. INTEREST AND RATE
	 	 	41	 
	6.1 Floating Rate
	 	 	41	 
	6.2 Applicable Rate; Default Rate
	 	 	42	 
	6.3 Interest Payments
	 	 	42	 
	6.4 Banking Days
	 	 	42	 
	6.5 360 Day Year
	 	 	42	 
	 
	 	 	 	 
	7. PAYMENTS
	 	 	43	 
	7.1 Borrower Payments
	 	 	43	 
	7.2 Advances
	 	 	43	 
	7.3 Other Manner of Payment
	 	 	43	 
	7.4 Sharing of Setoffs
	 	 	43	 
	 
	 	 	 	 
	8. EVENTS OF DEFAULT
	 	 	44	 
	8.1 Events of Default
	 	 	44	 
	8.2 Indemnity
	 	 	47	 
	8.3 Application of Moneys
	 	 	47	 
	 
	 	 	 	 
	9. COVENANTS
	 	 	48	 
	9.1 Affirmative Covenants
	 	 	48	 
	9.2 Negative Covenants
	 	 	54	 
	 
	 	 	 	 
	10. ACCOUNTS
	 	 	57	 
	10.1 Earnings Account, MDO Account and all other Accounts
	 	 	57	 
	10.2 Application of Earnings Account, MDO Account and all other Accounts
	 	 	58	 
	 
	 	 	 	 
	11. ASSIGNMENT AND CERTIFICATIONS
	 	 	58	 
	11.1 Benefit of Agreement
	 	 	58	 
	11.2 Assignment by the Lenders
	 	 	58	 
	11.3 Syndication
	 	 	58	 
	11.4 Register
	 	 	58	 
	11.5 Status of Lenders
	 	 	59	 
	11.6 Treatment of Certain Refunds
	 	 	59	 

ii

 

TABLE OF CONTENTS

(Continued)

	 	 	 	 	 
	SECTION	 	PAGE
	12. ILLEGALITY, INCREASED COST, NON-AVAILABILITY, ETC
	 	 	60	 
	12.1 Illegality
	 	 	60	 
	12.2 Increased Costs
	 	 	60	 
	12.3 Interest Rate Determination
	 	 	61	 
	12.4 Agent’s Certificate
	 	 	62	 
	12.5 Compensation for Losses
	 	 	62	 
	 
	 	 	 	 
	13. CURRENCY INDEMNITIES
	 	 	62	 
	13.1 Currency Conversion
	 	 	62	 
	13.2 Currency Indemnity
	 	 	62	 
	13.3 Additional Debt Due
	 	 	62	 
	13.4 Rate of Exchange
	 	 	62	 
	 
	 	 	 	 
	14. FEES AND EXPENSES
	 	 	63	 
	14.1 Fee Letter and Underwriting Letter
	 	 	63	 
	14.2 Commitment Fee
	 	 	63	 
	14.3 Expenses
	 	 	63	 
	 
	 	 	 	 
	15. APPLICABLE LAW AND JURISDICTION
	 	 	63	 
	15.1 Governing Law
	 	 	63	 
	15.2 Submission to Jurisdiction
	 	 	63	 
	15.3 WAIVER OF JURY TRIAL
	 	 	64	 
	 
	 	 	 	 
	16. THE AGENT
	 	 	64	 
	16.1 Appointment of Agent
	 	 	64	 
	16.2 Distribution of Payments
	 	 	64	 
	16.3 Assume Receipt
	 	 	64	 
	16.4 Holder of Interest in Note
	 	 	65	 
	16.5 No Duty to Examine, etc
	 	 	65	 
	16.6 Agent as Lender
	 	 	65	 
	16.7 Acts of the Agent
	 	 	65	 
	16.8 Assumption re: Events of Default
	 	 	66	 

iii

 

TABLE OF CONTENTS

(Continued)

	 	 	 	 	 
	SECTION	 	PAGE
	16.9 Limitation of Liability
	 	 	66	 
	16.10 Indemnity
	 	 	67	 
	16.11 Consultation with Counsel
	 	 	67	 
	16.12 Resignation
	 	 	67	 
	16.13 Lender Representations
	 	 	67	 
	16.14 Notification of Event of Default
	 	 	68	 
	16.15 No Agency or Trusteeship if NIBC only Lender
	 	 	68	 
	 
	 	 	 	 
	17. THE SECURITY TRUSTEE
	 	 	68	 
	17.1 Appointment of Security Trustee
	 	 	68	 
	 
	 	 	 	 
	18. NOTICES AND DEMANDS
	 	 	68	 
	18.1 Addresses
	 	 	68	 
	18.2 Receipt
	 	 	69	 
	 
	 	 	 	 
	19. MISCELLANEOUS
	 	 	69	 
	19.1 Time of Essence
	 	 	69	 
	19.2 Severability
	 	 	69	 
	19.3 References
	 	 	70	 
	19.4 Further Assurances
	 	 	70	 
	19.5 Headings
	 	 	70	 
	19.6 Entire Agreement
	 	 	70	 
	19.7 WAIVER OF IMMUNITY
	 	 	70	 
	19.8 USA Patriot Act Notice; OFAC and Bank Secrecy Act
	 	 	71	 

iv

 

	 	 	 
	EXHIBITS	 	 
	A 

B-1

B-2

B-3

C 

D 

E 

F 

G 

H-1

H-2

I

	 	FORM OF DRAWDOWN NOTICE

FORM OF SENIOR TERM LOAN NOTE

FORM OF SENIOR REVOLVER NOTE

FORM OF JUNIOR TERM LOAN NOTE

FORM OF MARSHALL ISLANDS MORTGAGE

FORM OF ASSIGNMENT OF EARNINGS

FORM OF ASSIGNMENT OF INSURANCES

FORM OF ASSIGNMENT OF CONSTRUCTION CONTRACTS

FORM OF SHARE PLEDGE AGREEMENT

FORM OF ACCOUNT PLEDGE

FORM OF NOTICE OF PLEDGE OF ACCOUNTS

FORM OF ASSIGNMENT OF COLLATERAL PLEDGE

	 	 	 
	SCHEDULES	 	 
	1

	 	THE LENDERS AND THE COMMITMENTS
	2

	 	CONSTRUCTION PLAN

 

 

TERM LOAN

AND CREDIT FACILITY AGREEMENT

          THIS TERM LOAN AND CREDIT FACILITY AGREEMENT is made as of the 21 day of December, 2007, by
and among (i) BULLY 1, LTD., an exempt company incorporated in the Cayman Islands, as borrower (the
“Borrower”), (ii) the financial institutions listed on the signature pages hereto as senior and/or
junior lenders, as the case may be (together with their respective successors and assigns, the
“Lenders”), (iii) STANDARD CHARTERED BANK, a company incorporated by Royal Charter in England (with
reference number ZC18, hereinafter “SCB”), BANK OF SCOTLAND PLC, a banking corporation organized
and existing under the laws of Scotland (“BOS”) and NIBC BANK N.V., a banking corporation organized
under the laws of The Netherlands (“NIBC”), as arrangers (in such capacity and any successor
thereto, the “Arrangers”) and (iv) NIBC as agent (in such capacity and any successor thereto, the
“Agent”) and security trustee (in such capacity and any successor thereto, the “Security Trustee”)
for the Lenders.

WITNESSETH THAT:

          WHEREAS, the Borrower desires to partly finance the construction of the drillship to be named
FRONTIER BULLY I (the “Vessel”) and registered under the laws and flag of the Republic of the
Marshall Islands pursuant to terms of the Construction Contracts and the Construction Plan (as such
terms are defined herein);

          WHEREAS, the Borrower has entered into the Bareboat Charter (as hereinafter defined) with the
Operating Entity (as hereinafter defined) relating to the Vessel and the Operating Entity will use
the Vessel to perform its obligations under the MDO Contract (as hereinafter defined);

          WHEREAS, at the request of the Borrower, SCB and BOS have agreed to serve as Arrangers and
NIBC has agreed to serve as an Arranger, the Agent and the Security Trustee under this Agreement
and the Lenders have agreed to provide to the Borrower senior and junior secured term loans and a
revolving credit facility in the aggregate amount of Four Hundred Sixty Five Million Dollars
(US$465,000,000) on the terms and conditions set forth herein;

          WHEREAS, as security for the obligations under the Bareboat Charter the Operating Entity shall
pledge to the Borrower all of its interest in the MDO Contract and the MDO Account (as hereinafter
defined) and as security for the obligations of the Borrower under this Agreement, the Borrower
shall pledge to the Security Trustee, all of its interest in the MDO Contract and the MDO Account;

          NOW, THEREFORE, in consideration of the premises set forth above, the covenants and agreements
hereinafter set forth, and other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto agree as set forth below:

 

 

1. DEFINITIONS

     1.1 Specific Definitions. In this Agreement the words and expressions specified below
shall, except where the context otherwise requires, have the meanings attributed to them below:

	 	 	 

	“Acceptable Accounting Firm”

	 	means Deloitte & Touche or such internationally
recognized accounting firm as shall be approved by
the Majority Lenders, such approval not to be
unreasonably withheld;
	 
	 	 
	“Account Pledges”

	 	means any pledge of any Account, to be in form and
substance satisfactory to the Agent in its sole
discretion;
	 
	 	 
	“Accounts”

	 	means any account, including the Earnings Account
and the MDO Account, maintained by the Borrower or
the Operating Entity with the Agent or another
financial institution into which the Assigned
Moneys shall be deposited in accordance with
Section 10.1;
	 
	 	 
	“Advance(s)”

	 	means any amount advanced to the Borrower with
respect to the Facilities or (as the context may
require) the aggregate amount of all such Advances
for the time being outstanding;
	 
	 	 
	“Agent”

	 	has the meaning ascribed thereto in the preamble;
	 
	 	 
	“Agreement”

	 	means this Term Loan and Credit Facility Agreement
as the same shall be amended, modified or
supplemented from time to time;
	 
	 	 
	“Applicable Margin”

	 	means, (i) for the Senior Term Loan and the Senior
Revolver, for the period prior to the completion
of Construction and the delivery and acceptance of
the Vessel by Shell under the MDO Contract and
commencement of Shell’s obligation to make payment
of one of the Operating Rates, 2.50% per annum and
1.50% per annum after such acceptance, provided
however, that if the Vessel has a Utilization Rate
of at least 95% (as verified by the Agent in its
sole discretion, following consultation with the
Technical Advisor) during the first year after its
acceptance, such rate shall be 1.25% per annum;
and (ii) for the Junior Term Loan, for the period
prior to the completion of Construction and the delivery

2

 

	 	 	 

	 

	 	and acceptance of the Vessel by Shell
under the MDO Contract and commencement of Shell’s
obligation to make payment of one of the Operating
Rates, 3.50% per annum and 2.50% per annum after
such acceptance, provided however, that if the
Vessel has a Utilization Rate of at least 95% (as
verified by the Agent in its sole discretion,
following consultation with the Technical Advisor)
during the first year after its acceptance, such
rate shall be 2.25% per annum;
	 
	 	 
	“Applicable Rate”

	 	means any rate of interest on the Facility Balance
from time to time applicable pursuant to the first
sentence of Section 6.2;
	 
	 	 
	“Approved Joint Venture”

	 	means the joint venture between, Shell EP Offshore
Ventures Limited, and Frontier Drillships
described in that certain Joint Venture Agreement
dated October 11, 2007;
	 
	 	 
	“Arrangers”

	 	shall have the meaning ascribed thereto in the
preamble;
	 
	 	 
	“Assigned Moneys”

	 	means sums received by the Lenders or the Agent
pursuant to the Assignments or any of them;
	 
	 	 
	“Assignments”

	 	means each of the Assignments of Earnings, the
Assignments of Insurances, the Assignments of
Construction Contracts and the Assignment of
Collateral Pledge;
	 
	 	 
	“Assignment Notices”

	 	means notices by the Borrower to be given pursuant
to the respective Assignments, to be in form and
substance satisfactory to the Agent in its sole
discretion;
	“Assignment of Collateral Pledge”

	 	means the first priority assignment of the
Collateral Pledge to be made by the Borrower in
favor of the Security Trustee, substantially in
the form of Exhibit I;
	 
	 	 
	“Assignments of Construction
Contracts”

	 	means each of the first priority assignments of
the Construction Contracts and other material
contracts of the Borrower associated with the
construction and outfitting of the Vessel
including manufacturer’s warranties and guaranties
in favor of the Security Trustee in respect of the
Vessel, substantially in the form of Exhibit F;

3

 

	 	 	 

	“Assignment(s) of Earnings”

	 	means first priority assignments of earnings and
charterparties (including, without limitation, the
Bareboat Charter), to be made by the Borrower in
favor of the Security Trustee, in respect of the
earnings of the Vessel, including earnings under
the MDO Contract, and the mobilization fee of
$15,000,000 to be paid by Shell under the MDO
Contract, after completion of the Construction,
substantially in the form of Exhibit D;
	 
	 	 
	“Assignment(s) of Insurances”

	 	means first priority assignments of insurances, to
be made by the Borrower, and consented to by the
Operating Entity, pursuant to the terms of the
Bareboat Charter in favor of the Security Trustee,
in respect of the insurances covering the Vessel,
substantially in the form of Exhibit E;
	 
	 	 
	“Banking Day(s)”

	 	means days on which banks are open for the
transaction of business of the nature required by
this Agreement in New York, New York, Houston,
Texas, Amsterdam, The Netherlands and London,
England;
	 
	 	 
	“Bareboat Charter”

	 	means the bareboat charter dated December ___,
2007, entered into between the Borrower, as owner,
and the Operating Entity, as charterer, with
respect to the Vessel;
	 
	 	 
	“Borrower”

	 	has the meaning ascribed thereto in the preamble,
and any permitted successor or assign;
	 
	 	 
	“Builders”

	 	means each of (i) Shanghai Shipyard Co. Ltd., (ii)
Keppel and (iii) Huisman Special Lifting Equipment
B.V.;
	 
	 	 
	“Capital Contribution Funding”

	 	means the capital contribution funding to be
provided by the Joint Venturers in a maximum
aggregate principal amount of One Hundred Fifteen
Million Dollars ($115,000,000), Forty Eight
Million Dollars ($48,000,000) of which shall have
been made as of the date of this Agreement and
Sixty Seven Million Dollars ($67,000,000) of which
shall be made pursuant to the terms of the
Contribution Agreement;
	 
	 	 
	“Capital Expenditures”

	 	means, for any Person for any period, the sum of,
without duplication, (a) all expenditures relating
to the Vessel made, directly or indirectly, by
such Person or

4

 

	 	 	 

	 

	 	any of its Subsidiaries during such
period for equipment, fixed assets, real property
or improvements, or for replacements or
substitutions therefore or additions thereto, that
have been or should be, in accordance with GAAP,
reflected as additions to property, plant or
equipment on a Consolidated balance sheet of such
Person or have a useful life of more than one (1)
year plus (b) the aggregate principal amount of
all Indebtedness (including obligations under
Capitalized Leases) assumed or incurred in
connection with any such expenditures. For
purposes of this definition, the purchase price of
equipment that is purchased simultaneously with
the trade-in of existing equipment or with
insurance proceeds shall be included in Capital
Expenditures only to the extent of the gross
amount of such purchase price less the credit
granted by the seller of such equipment for the
equipment being traded in at such time or the
amount of such proceeds, as the case may be;
	 
	 	 
	“Capitalized Leases”

	 	means all leases that have been or should be, in
accordance with GAAP, recorded as capitalized
leases;
	 
	 	 
	“Cash Equivalents”

	 	means any of the following having a maturity of
not greater than 180 days from the date of
acquisition thereof: (a) readily marketable
direct obligations of the Government of the United
States or any agency or instrumentality thereof or
obligations unconditionally guaranteed by the full
faith and credit of the Government of the United
States, (b) certificates of deposit of or time
deposits with any commercial bank that is a Lender
or a member of the Federal Reserve System, issues
(or the parent of which issues) commercial paper
rated as described in clause (c) below, is
organized under the laws of the United States or
any State thereof and has combined capital and
surplus of at least $1,000,000,000, (c) commercial
paper in an aggregate amount of no more than
$5,000,000 per issuer outstanding at any time,
issued by any corporation organized under the laws
of any State of the United States and rated at
least “Prime-1” (or the then equivalent grade) by
Moody’s or “A-1” (or the equivalent grade) by S&P
or (d) Investments, classified in accordance with
GAAP as Current Assets of the Borrower or any of
its Subsidiaries, in money market

5

 

	 	 	 

	 

	 	funds that are
registered under the Investment Company Act of
1940, as amended, the portfolios of which are
limited solely to Investments of the character,
quality and maturity described in clauses (a), (b)
and (c) of this definition;
	 
	 	 
	“Classification Society”

	 	means Det Norske Veritas in Houston, Texas with
whom the Vessel is or will be entered and who has
conducted or will conduct periodic physical
surveys and/or inspections of the Vessel;
	 
	 	 
	“Code”

	 	means the Internal Revenue Code of 1986, as
amended, and any successor statute and regulations
promulgated thereunder;
	 
	 	 
	“Collateral Pledge”

	 	means the first priority pledge made by the
Operating Entity in favor of the Borrower pursuant
to the terms of the Bareboat Charter in respect of
the MDO Contract, the MDO Account and the
insurances covering the Vessel, in the form
attached to the Bareboat Charter;
	 
	 	 
	“Commitment(s)”

	 	means, with respect to any Lender, the portion of
the Facilities set out opposite its name on
Schedule 1 hereto or, as the case may be, pursuant
to any assignment made pursuant to Section 11,
which portion may be reduced in accordance with
the terms of this Agreement;
	 
	 	 
	“Consolidated”

	 	refers to the consolidation of accounts in
accordance with GAAP;
	 
	 	 
	“Consolidated Net Income”

	 	means, with respect to the Borrower and its
Subsidiaries for any period, the net income (or
loss) of the Borrower and its Subsidiaries,
determined on a Consolidated basis in accordance
with GAAP, after allowances for taxes for such
period; provided, however that the following shall
be excluded from such net income (or loss): (a)
the net income of any Person in which the Borrower
or any of its Subsidiaries has an interest (which
interest does not cause the net income of such
Person to be Consolidated with the net income of
the Borrower and its Subsidiaries in accordance
with GAAP), except to the extent of the amount of
dividends or distributions actually paid in cash
during such period by such Person to the Borrower
or any of its Subsidiaries, (b) the net income
during such

6

 

	 	 	 

	 

	 	period of any Subsidiary of the
Borrower that is not a Security Party to the
extent that the declaration or payment or
dividends or similar distributions by that
Subsidiary is not at the time permitted by
operation of the terms of its charter or any
agreement, instrument or governmental
authorization (which has not been obtained)
applicable to such Subsidiary, unless such
restriction with respect to the payment of
dividends or similar distributions has been
legally waived, (c) any extraordinary non-cash
gains or losses during such period and (d) any
gains or losses attributable to write-ups or
write-downs of assets; provided further that if
the Borrower or any of its Subsidiaries shall
acquire or dispose of any material property during
such period, then Consolidated Net Income shall be
calculated after giving pro forma effect to such
acquisition or disposition, as if such acquisition
or disposition had occurred on the first day of
such period;
	 
	 	 
	“Construction”

	 	means the construction of the Vessel by the
Builders, which began on June 23, 2007, pursuant
to the Construction Plan;
	 
	 	 
	“Construction Contracts”

	 	means each of the contracts in excess of
$15,000,000 between the Security Parties and a
shipyard or third party vendor relating to the
construction of the Vessel, including, but not
limited to (i) the Contract for the Construction
of the Vessel, entered into by and between
Shanghai Shipyard Co., Ltd. and the Borrower,
dated June 23, 2007; (ii) the Agreement for the
integration of the Vessel, entered into by and
between Keppel Shipyard Limited and the Borrower,
dated June 28, 2007; and (iii) the agreement
between Huisman Special Lifting Equipment B.V. and
the Borrower in respect of the construction of the
drill tower on the Vessel dated April 13, 2007, in
each case including any refund guarantees,
performance guarantees, completion guarantees
and/or performance bonds associated therewith;
	 
	 	 
	“Construction Plan”

	 	means the plan relating to the construction of the
Vessel, including the timing and budget for the
construction, attached hereto as Schedule 2 as it
may be amended or supplemented in accordance with
this Agreement;

7

 

	 	 	 

	“Contribution Agreement”

	 	means the Capital Contribution and Note Purchase
Agreement dated as the date hereof between
Borrower and the Joint Venturers in respect of the
obligation of the Joint Venturers to (i) make
additional capital contributions to the Borrower
in connection with the Capital Contribution
Funding in the aggregate amount of $67,000,000 and
(ii) the Cost Overrun Notes, such notes to be
fully subordinated on a cash basis and a security
basis to the obligations of the Borrower to the
Lenders hereunder and under the Security
Documents;
	 
	 	 
	“Cost Overrun Note(s)”

	 	means a promissory note of the Borrower
substantially in the form of Exhibit A to the
Contribution Agreement;
	 
	 	 
	“Current Assets”

	 	of any Person means all assets (other than
non-cash obligations under FAS 133) of such Person
that would, in accordance with GAAP, be classified
as current assets on a Consolidated balance sheet
of a company conducting a business the same as or
similar of that of such Person, after deducting
adequate reserves in each case in which a reserve
is proper in accordance with GAAP;
	 
	 	 
	“Current Liabilities”

	 	of any Person means (a) all Indebtedness of such
Person except Funded Debt, (b) all amounts of
Funded Debt of such Person required to be paid or
prepaid within one year after such date and (c)
all other items (including taxes accrued as
estimated but excluding non-cash obligations under
FAS 133) that in accordance with GAAP would be
classified as current liabilities on a
Consolidated balance sheet of such Person;
	 
	 	 
	“Default Rate”

	 	has the meaning ascribed thereto in Section 6.2;
	 
	 	 
	“Delivery Date”

	 	that date which is the Banking Day on which the
Vessel is delivered to and accepted by Shell under
the MDO Contract, provided such day occurs no
later than December 30, 2010;
	 
	 	 
	“Depositary”

	 	means the Agent or such other bank as the Agent
shall designate;
	 
	 	 
	“DOC”

	 	means a document of compliance issued to an
Operator in accordance with Rule 13 of the ISM
Code;

8

 

	 	 	 

	“Dollars” and the sign “$”

	 	means the legal currency, at any relevant time
hereunder, of the United States of America and, in
relation to all payments hereunder, in same day
funds settled through the New York Clearing House
Interbank Payments System (or such other Dollar
funds as may be determined by the Lenders to be
customary for the settlement in New York City of
banking transactions of the type herein involved);
	 
	 	 
	“Drawdown Dates”

	 	means collectively the Senior Term Loan Drawdown
Dates, the Senior Revolver Drawdown Dates and the
Junior Term Loan Drawdown Dates;
	 
	 	 
	“Drawdown Notice”

	 	has the meaning ascribed thereto in Section 3.4;
	 
	 	 
	“Earnings Account”

	 	means the account, to be maintained by the
Borrower with the Agent or another financial
institution acceptable to the Agent into which all
earnings relating to the Bareboat Charter shall be
deposited in accordance with Section 10.1;
	 
	 	 
	“Environmental Approvals”

	 	has the meaning ascribed thereto in Section 2.1(u);
	 
	 	 
	“Environmental Claim”

	 	has the meaning ascribed thereto in Section 2.1(u);
	 
	 	 
	“Environmental Laws”

	 	has the meaning ascribed thereto in Section 2.1(u);
	 
	 	 
	“ERISA”

	 	means the Employment Retirement Income Security
Act of 1974, as amended;
	 
	 	 
	“ERISA Affiliate”

	 	means a trade or business (whether or not
incorporated) which is under common control with
the Borrower within the meaning of Sections
414(b), (c), (m) or (o) of the Code;
	 
	 	 
	“Event(s) of Default”

	 	means any of the events set out in Section 8.1;
	 
	 	 
	“Excess Cash Flow”

	 	means, for any period, without duplication,
(a)    the sum of: (i) Consolidated Net Income of
the Borrower and its Subsidiaries for such period
plus (ii) the aggregate amount of all non cash
charges deducted in arriving at such Consolidated
Net Income plus (iii) if there was a net increase
in Consolidated Current Liabilities (excluding any

9

 

	 	 	 

	 

	 	        short-term borrowing or current maturities of
long-term Indebtedness) of the Borrower and its
Subsidiaries during such period, the amount of
such net increase plus (iv) if there was a net
decrease in Consolidated Current Assets (excluding
cash and Cash Equivalents) of the Borrower and its
Subsidiaries during such period, the amount of
such net decrease; less 

	 
	 	 
	 

	 	(b)   the sum of: (i) the aggregate amount of all
non cash credits included in arriving at such
Consolidated Net Income plus (ii) if there was a
net decrease in Consolidated Current Liabilities
(excluding any short-term borrowing or current
maturities of long-term Indebtedness) of the
Borrower and its Subsidiaries during such period,
the amount of such net decrease plus (iii) if
there was a net increase in Consolidated Current
Assets (excluding cash and Cash Equivalents) of
the Borrower and its Subsidiaries during such
period, the amount of such net increase plus
(iv) the aggregate amount of Capital Expenditures
of the Borrower and its Subsidiaries paid in cash
during such period solely to the extent permitted
by this Agreement plus (v) the aggregate amount of
all regularly scheduled principal payments of
Funded Debt made during such period plus (vi) the
aggregate principal amount of all commitment
reductions in the Revolving Credit Facility during
such period;

	 
	 	 
	“Facility(ies)”

	 	means the credit facility, consisting of each of
the Senior Term Loan, the Senior Revolver and the
Junior Term Loan, to be made available to the
Borrower by the Lenders pursuant to Section 3.2 in
the maximum principal amount of Four Hundred Sixty
Five Million Dollars ($465,000,000);
	 
	 	 
	“Facility Balance”

	 	means the aggregate Dollar amount of the
Facilities, including unpaid costs and accrued but
unpaid interest, at any relevant time then
outstanding;
	 
	 	 
	“Fee Letter”

	 	means the letter dated July 2, 2007, entered into
by and between the Borrower and the Agent, on
behalf of the Lenders, in respect of the fees
referred to therein;

10

 

	 	 	 

	“Final Payment Date”

	 	means the date which is the earlier of (i) five
(5) years after the Delivery Date (or such earlier
date as the Commitments shall have been terminated
in accordance with the terms herein), or
(ii) December 31, 2015; provided, that if such
date is not a Banking Day, then the Final Payment
Date shall be the next following Banking Day
unless such next following Banking Day falls in
the following month, in which case the Final
Payment Date shall be the immediately preceding
Banking Day;
	 
	 	 
	“FDR Holdings”

	 	means FDR Holdings Limited, an exempt company
incorporated in the Cayman Islands;
	 
	 	 
	“Foreign Lender”

	 	means any Lender that is organized under the laws
of a jurisdiction other than the United States;
	 
	 	 
	“Frontier Drillships”

	 	means Frontier Drillships, Ltd., an exempt company
incorporated in the Cayman Islands;
	 
	 	 
	“Funded Debt”

	 	of any Person means Indebtedness in respect of the
Facilities, in the case of the Borrower, and all
other Indebtedness of such Person that by its
terms matures more than one (1) year after the
date of determination or matures within one (1)
year from such date but is renewable or
extendible, at the option of such Person, to a
date more than one (1) year after such date or
arises under a revolving credit or similar
agreement that obligates the lender or lenders to
extend credit during a period of more than one (1)
year after such date, including, without
limitation, all amounts of Funded Debt of such
Person required to be paid or prepaid within one
(1) year after the date of determination;
	 
	 	 
	“GAAP”

	 	has the meaning given to it in Section 1.3 below;
	 
	 	 
	“Hedging Agreement”

	 	means any interest rate future agreement, interest
rate option agreement, interest rate swap
agreement, interest rate cap agreement, interest
rate collar agreement, interest rate hedge
agreement, currency hedging agreement or other
similar agreement or arrangement entered into
between the Borrower and the Arrangers, or another
financial institution reasonably acceptable to the

11

 

	 	 	 

	 

	 	Arrangers, which is designed to protect the
Borrower against fluctuations in interest rates or
currency rates applicable under this Agreement, to
or under which the Borrower is a party or a
beneficiary on the date of this Agreement or
becomes a party or a beneficiary hereafter which
will be covered by a 1992 or 2002 multicurrency
cross border ISDA Master Agreement (ISDA Master
Agreement), issued by the International Swaps and
Derivatives Association, entered into by the
Borrower and an Arranger or another financial
institution as aforesaid, provided however that,
notwithstanding anything to the contrary contained
herein or in any of the Security Documents, only
Hedging Agreements entered into by and between the
Borrower, the Arrangers or any Lender shall be
secured on a pari passu basis;
	 
	 	 
	“Hedging Counterparty(ies)”

	 	means any hedging counterparty under any Hedging
Agreement;
	 
	 	 
	“Hedging Exposure”

	 	means, at any relevant date and in relation to a
Hedging Counterparty, the amount certified by the
Hedging Counterparty to the Agent to be the
aggregate net amount in Dollars which would be
payable by the Borrowers to the Hedging
Counterparty under (and calculated in accordance
with) section 6(e) (Payments on Early Termination)
of the ISDA Master Agreements entered into by each
of the Hedging Counterparties with the Borrower;
	 
	 	 
	“Indebtedness”

	 	means, with respect to any Person at any date of
determination (without duplication), (i) all
indebtedness of such Person for borrowed money,
(ii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar
instruments, (iii) all obligations of such Person
in respect of letters of credit or other similar
instruments (including reimbursement obligations
with respect thereto), (iv) all obligations of
such Person to pay the deferred and unpaid
purchase price of property or services, which
purchase price is due more than six months after
the date of placing such property in service or
taking delivery thereof or the completion of such
services, except trade payables, (v) all
obligations on account of principal of such Person
as lessee under capitalized leases, (vi) all
indebtedness of other Persons

12

 

	 	 	 

	 

	 	secured by a lien on
any asset of such Person, whether or not such
indebtedness is assumed by such Person; provided
that the amount of such indebtedness shall be the
lesser of (a) the fair market value of such asset
at such date of determination and (b) the amount
of such indebtedness, and (vii) all indebtedness
of other Persons guaranteed by such Person to the
extent guaranteed; the amount of Indebtedness of
any Person at any date shall be the outstanding
balance at such date of all unconditional
obligations as described above and, with respect
to contingent obligations, the maximum liability
upon the occurrence of the contingency giving rise
to the obligation; provided that the amount
outstanding at any time of any indebtedness issued
with original issue discount is the face amount of
such indebtedness less the remaining unamortized
portion of the original issue discount of such
indebtedness at such time as determined in
conformity with GAAP; and; provided further that
Indebtedness shall not include (i) any liability
for current or deferred federal, state, local or
other taxes, (ii) any trade payables or (iii) the
Cost Overrun Notes issued pursuant to the
Contribution Agreement;
	 
	 	 
	“Initial Advance”

	 	means that portion of the Senior Term Loan to be
advanced on the Initial Drawdown Date;
	 
	 	 
	“Initial Drawdown Date”

	 	means the Drawdown Date on which the first Advance
under the Facility shall be drawn down pursuant to
Section 3;
	 
	 	 
	“Initial Payment Date”

	 	means that day which is the last Banking Day of
the first complete fiscal quarter after the
Delivery Date;
	 
	 	 
	“Interest Bearing Debt”

	 	means the aggregate Indebtedness of the Borrower,
less any existing shareholders notes and loans, so
long as interest accrued thereon is not paid;
	 
	 	 
	“Interest Period”

	 	means periods of one, (1) three (3) or six (6)
months selected by the Borrower pursuant to
Section 6.1, or such other period selected by the
Borrower and agreed to by the Agent;
	 
	 	 
	“Investment”

	 	means as to any Person any loan or advance to such
Person, any purchase or other acquisition of any
equity

13

 

	 	 	 

	 

	 	interests or debt or the assets comprising
a division or business unit (including any vessel)
or a substantial part of all of the business of
such Person, any capital contribution to such
Person or any other direct or indirect investment
in such Person, including, without limitation, any
acquisition by way of a merger or consolidation
(or similar transaction) and any arrangement
pursuant to which the investor incurs Indebtedness
in respect of such Person;
	 
	 	 
	“ISM Code”

	 	means the International Safety Management Code for
the Safe Operating of Ships and for Pollution
Prevention constituted pursuant to Resolution A.
741(18) of the International Maritime Organization
and incorporated into the Safety of Life at Sea
Convention and includes any amendments or
extensions thereto and any regulation issued
pursuant thereto;
	 
	 	 
	“ISPS Code”

	 	means the International Ship and Port Facility
Code adopted by the International Maritime
Organization at a conference in December 2002 and
amending the Safety of Life at Sea Convention and
includes any amendments or extensions thereto and
any regulation issued pursuant thereto;
	 
	 	 
	“ISSC”

	 	means the International Ship Security Certificate
issued pursuant to the ISPS Code;
	 
	 	 
	“Joint Venturers”

	 	means Frontier Drillships and Shell EP Offshore
Ventures Limited as the shareholders of the
Borrower;
	 
	 	 
	“Junior Lenders”

	 	means the Lenders providing the Junior Term Loan
and identified as such on Schedule 1;
	 
	 	 
	“Junior Term Loan”

	 	has the meaning ascribed thereto in Section 3.1(a);
	 
	 	 
	“Junior Term Loan 
Drawdown
Date(s)”

	 	means the dates, each being a Banking Day, upon
which the Borrower has requested that an Advance
under the Junior Term Loan be made available to
the Borrower, and such Advance is made, as
provided in Section 3;
	 
	 	 
	“Junior Term Loan Note”

	 	means the promissory note to be executed by the
Borrower to evidence the Junior Term Loan,
substantially in the form of Exhibit B-3;

14

 

	 	 	 

	“Keppel”

	 	means Keppel Shipyard Limited of Singapore;
	 
	 	 
	“Lender(s)”

	 	has the meaning ascribed thereto in the preamble;
	 
	 	 
	“LIBOR”

	 	means, with respect to any Interest Period, the
rate per annum determined by the Agent to be equal
to the quotient of (a) (i) the interest rate at
which Dollar deposits are offered in the London
Interbank Eurodollar Market for the applicable
Interest Period determined in accordance with
Section 6.1 as displayed at approximately 11:00
a.m. London time on the second Banking Day
preceding the first day of such Interest Period on
Page 3750 of the Telerate Service (or such other
display as may replace Page 3750 on the Telerate
Service) or (ii) if no such rate is displayed, the
interest rate at which Dollar deposits are offered
to the Agent in the London Interbank Eurodollar
Market for the applicable Interest Period
determined in accordance with Section 6.1 divided
by (b) a number equal to 1.00 minus the LIBOR Rate
Reserve Percentage;
	 
	 	 
	“LIBOR Rate Reserve
Percentage”

	 	means, for any day, the maximum percentage
(expressed as a decimal) specified from time to
time by the Board of Governors of the Federal
Reserve System (or any successor) for determining
the maximum reserve requirements (including, but
not limited to supplemental, marginal or emergency
reserves) with respect to eurocurrency funding of
a member bank in such system or a similar
requirement of the applicable regulatory agency
having jurisdiction over a Lender;
	 
	 	 
	“Majority Lenders”

	 	means Senior Lenders whose Commitments exceed
sixty-six and two-thirds percent (66 2/3%) of the
total Commitments;
	 
	 	 
	“MDO Account”

	 	means the account, to be maintained with a bank
acceptable to the Agent into which all earnings
relating to the MDO Contract shall be deposited in
accordance with the Bareboat Charter;
	 
	 	 
	“MDO Contract”

	 	means the marine drilling order dated as of June
4, 2007 between Shell and Frontier Drillships and
assigned to the Borrower, and subsequently
assigned to the Operating Entity and the marine
drilling agreement dated

15

 

	 	 	 

	 

	 	December 19, 2005 between
Shell Exploration & Production and FDR Holdings;
	 
	 	 
	“Mortgage”

	 	means the first preferred mortgage to cover the
Vessel under the laws of the Republic of the
Marshall Islands, to be granted by the Borrower in
favor of the Security Trustee, substantially in
the form of Exhibit C, as set out in Section
9.1(s);
	 
	 	 
	“Notes”

	 	means collectively, the Senior Term Loan Note, the
Senior Revolver Note and the Junior Term Loan
Note;
	 
	 	 
	“Notice of Pledge
of Earnings Account”

	 	means the notice of pledge of Earnings Account to
be executed by the Borrower and consented to by
the Agent, substantially in the form of Exhibit
H-2;
	 
	 	 
	“Operating Entity”

	 	means Bully Drilling, Ltd., an exempt company
incorporated in the Cayman Islands, and any
permitted successor or assign;
	 
	 	 
	“Operating Rate”

	 	means the Operating Rate, Reduced Operating Rate,
the Re-Drill Rate and the Force Majeure Rate (each
as defined in the MDO Contract);
	 
	 	 
	“Operator”

	 	means, with respect to the Vessel, the Borrower or
an affiliate of the Borrower, or, subject to the
sole discretion of the Agent, such Person(s) with
whom the Borrower has contracted to be concerned
with the operation of the Vessel and falls within
the definition of “Company” set out in rule 1.1.2
of the ISM Code;
	 
	 	 
	“Payment Dates”

	 	means the Initial Payment Date and the dates
falling at quarterly intervals thereafter, the
last of which is the Final Payment Date; provided,
that if any such date is not a Banking Day, then
the relevant Payment Date shall be the next
following Banking Day unless such next following
Banking Day falls in the following month, in which
case such Payment Date shall be the immediately
preceding Banking Day;
	 
	 	 
	“Permitted Indebtedness”

	 	means (i) Indebtedness under this Facility,
(ii) Indebtedness under the Contribution
Agreement, (iii) trade debt incurred in the
ordinary course of business which is not more than
thirty (30) days past due or is being disputed in
good faith and (iv) Indebtedness

16

 

	 	 	 

	 

	 	to fund any cost
overruns not funded by the Standby Funding or the
Junior Term Loan; provided that the Borrower
requests and receives the prior written consent of
the Agent, in its sole discretion, and any such
Indebtedness is fully subordinated on a cash basis
and a security basis to the obligations of the
Borrower to the Lenders hereunder and under the
Security Documents on terms acceptable to the
Agent on behalf of the Lenders;
	 
	 	 
	“Permitted Liens”

	 	means:
	 
	 	 
	 

	 	(i)   liens for Taxes not at the time delinquent or
thereafter payable without penalty or being
contested in good faith, provided provision is
made to the extent required by GAAP for the
eventual payment thereof in the event it is found
that such are payable by the Borrower;

	 
	 	 
	 

	 	(ii)  liens of carriers, warehousemen, mechanics,
materialmen and landlords, including, but not
limited to, trade credit under industry standard
terms, incurred in the ordinary course of business
for sums not overdue or being contested in good
faith, provided provision is made to the extent
required by GAAP for the eventual payment thereof
in the event it is found that such sums are
payable by the Borrower;

	 
	 	 
	 

	 	(iii) maritime liens:

	 
	 	 
	 

	 	      (a)       arising in the ordinary course of business by
operation of law in respect of sums which are not
overdue or of which the Borrower is unaware or
that are being contested in good faith by
appropriate proceedings and for which reserves
have been made to the reasonable satisfaction of
the Agent; or
	 
	 	 
	 

	 	      (b)       arising in connection with salvage and general
average; or
	 
	 	 
	 

	 	      (c)       arising in connection with crew wages claimed
but not paid;
	 
	 	 
	 

	 	(iv)    liens incurred in the ordinary course of
business 

17

 

	 	 	 

	 

	 	       in connection with worker’s compensation,
unemployment insurance or other forms of
governmental insurance or benefits, or to secure
performance of tenders and statutory obligations
entered into in the ordinary course of business or
to secure obligations on surety or appeal bonds in
the ordinary course of business or easements,
rights of way and similar encumbrances incurred in
the ordinary course of business and not
interfering with the ordinary conduct of the
business of the Borrower;

	 
	 	 
	 

	 	(v)   liens incurred in connection with Permitted
Indebtedness; and

	 
	 	 
	 

	 	(vi)  liens required by the terms of this Agreement;

	 
	 	 
	“Person”

	 	means any individual, sole proprietorship,
corporation, partnership (general or limited),
limited liability company, business trust, bank,
trust company, joint venture, association, joint
stock company, trust or other unincorporated
organization, whether or not a legal entity, or
any government or agency or political subdivision
thereof;
	 
	 	 
	“Plan”

	 	means any employee benefit plan covered by Title
IV of ERISA;
	 
	 	 
	“Pledge of Earnings Account”

	 	means the pledge or assignment executed or to be
executed by the Borrower in favor of the Security
Trustee in respect of the Earnings Account,
substantially in the form of the Account Pledge
set out in Exhibit H-1;
	 
	 	 
	“Pledgor(s)”

	 	means each of the Borrower, Frontier Drillships
and Shell EP Offshore Ventures Limited and any
party acquiring an ownership stake in the Borrower
in connection with the Approved Joint Venture;
	 
	 	 
	“Purchasers”

	 	means each of the purchasers identified in the
Sponsor Purchase Agreement;
	 
	 	 
	“Reset Letter”

	 	means the letter dated July 2, 2007, entered into
by and between the Borrower and the Agent, on
behalf of the Lenders, in respect of the Approved
Joint Venture;

18

 

	 	 	 

	“Scheduled Debt Service”

	 	means, with respect to the Borrower, the periodic
payments necessary to meet principal and interest
requirements of the Borrower’s Indebtedness;
	 
	 	 
	“Security Document(s)”

	 	means the Mortgage, the Assignments, the Share
Pledge Agreements, the Pledge of Earnings Account,
the Collateral Pledge or any documents required by
the Agent in substitution for any of the foregoing
and any other documents that may be executed as
security for the repayment of the Facilities;
	 
	 	 
	“Security Party(ies)”

	 	means the Borrower and the Pledgors or any of
them, as the context may require;
	 
	 	 
	“Security Period”

	 	means the period from the Initial Drawdown Date to
the date upon which the Facilities and all other
amounts due to the Lenders pursuant to this
Agreement, the Notes and the Security Documents
becomes repayable and is repaid in full or prepaid
in full;
	 
	 	 
	“Security Trustee”

	 	has the meaning ascribed thereto in the preamble;
	 
	 	 
	“Senior Facility”

	 	means the Senior Term Loan and the Senior Revolver;
	 
	 	 
	“Senior Lenders”

	 	means those Lenders providing the Senior Term Loan
and Senior Revolver and identified as such on
Schedule 1;
	 
	 	 
	“Senior Revolver”

	 	has the meaning ascribed thereto in Section 3.1(a);
	 
	 	 
	“Senior Revolver Drawdown 

Date(s)”

	 	means the dates, each being a Banking Day, upon
which the Borrower has requested that an Advance
under the Senior Revolver be made available to the
Borrower, and such Advance is made, as provided in
Section 3;
	 
	 	 
	“Senior Revolver Note”

	 	means the promissory note to be executed by the
Borrower to evidence the Senior Revolver,
substantially in the form of Exhibit B-2;
	 
	 	 
	“Senior Term Loan”

	 	has the meaning ascribed thereto in Section 3.1(a);
	 
	 	 
	“Senior Term Loan Drawdown 

Date”

	 	means the date, being a Banking Day, upon which
the Borrower has requested that the Senior Term
Loan be made available to the Borrower, and such
Advance is made, as provided in Section 3;

19

 

	 	 	 

	“Senior Term Loan Note”

	 	means the promissory note to be executed by the
Borrower to evidence the Senior Term Loan,
substantially in the form of Exhibit B-1;
	 
	 	 
	“Share Pledge Agreement(s)”

	 	means the pledge of ordinary shares of the
Borrower and the Operating Entity to be executed
by the Pledgors in favor of the Security Trustee
pursuant to Section 4.1(d) hereof substantially in
the form of Exhibit G;
	 
	 	 
	“Shell”

	 	means Shell Offshore Inc., a corporation organized
under the laws of the State of Delaware;
	 
	 	 
	“Shell EP Offshore 
Ventures
Limited”

	 	means Shell EP Offshore Ventures Limited, a
company organized under the laws of the United
Kingdom and a 100% subsidiary of Enterprise Oil
Limited;
	 
	 	 
	“SMC”

	 	means a safety management certificate issued in
respect of the Vessel in accordance with Rule 13
of the ISM Code;
	 
	 	 
	“Sponsor Purchase
Agreement”

	 	means the Preferred Shares, Notes and Ordinary
Shares Purchase Agreement dated as of October 30,
2007 between FDR Holdings, Frontier Drillships and
the Purchasers in respect of the obligation of the
Purchasers to purchase securities of Frontier
Drillships and FDR Holdings in connection with (i)
the Capital Contribution Funding in the aggregate
amount of $33,500,000 and (ii) the Standby Funding
in the aggregate principal amount of up to
$50,000,000, all on the terms and conditions
provided therein;
	 
	 	 
	“Standby Funding”

	 	means the committed standby funding to be provided
by the Joint Venturers pursuant to the
Contribution Agreement to fund cost overruns in
the maximum aggregate principal amount of One
Hundred Million Dollars ($100,000,000); provided,
however that such commitment may be reduced to
Fifty Million Dollars ($50,000,000) if after
arrival of the Vessel at Keppel and the arrival of
all major equipment and components to be
incorporated into the Vessel (other than the
blow-out preventer and drilling riser) the
Technical Advisor shall confirm to the Agent that
the Construction is still

20

 

	 	 	 

	 

	 	scheduled to be
completed on time and within budget materially in
accordance with the Construction Plan;
	 
	 	 
	“Subsidiary(ies)”

	 	means, with respect to any Person, any business
entity of which more than 50% of the outstanding
voting stock or other equity interest is owned
directly or indirectly by such Person and/or one
or more other Subsidiaries of such Person;
	 
	 	 
	“Taxes”

	 	means any present or future income or other taxes,
levies, duties, charges, fees, deductions, or
withholdings of any nature now or hereafter
imposed, levied, collected, withheld, or assessed
by any taxing authority whatsoever, except for
(i) taxes on or measured by the overall net
income, gross income, gross receipts or capital of
the Agent or a Lender (however denominated or
franchise taxes imposed in lieu of such a tax)
imposed by the national, state or local
jurisdiction in which a Lender is organized, or in
which its principal office is located, or in which
the Facilities are booked, or imposed by any
governmental subdivision or taxing authority of
any thereof or by the jurisdiction selected by a
Lender (or any political subdivision or taxing
authority thereof) in which the Facility Balance
is from time to time payable, (ii) any branch
profits taxes imposed by the United States of
America or any similar tax imposed by any other
jurisdiction, (iii) such taxes as are levied as a
result of business transactions of the Agent or
any Lender that are unrelated to the transactions
contemplated by this Agreement and (iv) any
withholding tax to the extent it is attributable
to such Foreign Lender’s failure or inability
(other than as a result of a change in law) to
comply with Section 11.5;
	 
	 	 
	“Technical Advisor”

	 	means Det Norske Veritas AS in Oslo, Norway who
shall advise the Agent and Lenders in connection
with the Construction;
	 
	 	 
	“Total Loss”

	 	has the meaning ascribed thereto in the Mortgage;
	 
	 	 
	“Underwriting Letter”

	 	means the letter dated the date hereof, entered
into by and between the Borrower and the Agent in
respect of the fees referred to therein;

21

 

	 	 	 

	“Utilization Rate”

	 	means the percentage obtained by dividing (i) the
number of days the Operating Entity is entitled to
receive compensation at the Operating Rate for a
given period by (ii) the actual number of days in
such period; and
	 
	 	 
	“Vessel”

	 	means the drillship to be named “Frontier Bully I”
to be constructed in accordance with the
Construction Contracts and registered under the
laws and flag of the Republic of the Marshall
Islands.

     1.2 Computations of Time Periods; Other Definitional Provisions. In this Agreement,
the Notes and the Security Documents, in the computation of periods of time from a specified date
to a later specified date, the word “from” means “from and including” and the words “to” and
“until” each mean “to but excluding”; words importing either gender include the other gender;
references to “writing” include printing, typing, lithography and other means of reproducing words
in a tangible visible form; the words “including,” “includes” and “include” shall be deemed to be
followed by the words “without limitation”; references to articles, clauses (or subdivisions of
clauses), exhibits, annexes or schedules are to this Agreement, the Notes or such Security
Document, as applicable; references to agreements and other contractual instruments (including this
Agreement, the Notes and the Security Documents) shall be deemed to include all subsequent
amendments, amendments and restatements, supplements, extensions, replacements and other
modifications to such instruments (without, however, limiting any prohibition on any such
amendments, extensions and other modifications by the terms of this Agreement, the Notes or any
Security Document); references to any matter that is “approved” or requires “approval” of a party
shall mean approval given in the sole and absolute discretion of such party unless otherwise
specified.

     1.3 Accounting Terms. Unless otherwise specified herein, all accounting terms used in
this Agreement, the Notes and in the Security Documents shall be interpreted, and all financial
statements and certificates and reports as to financial matters required to be delivered to the
Agent or to the Lenders under this Agreement shall be prepared, in accordance with generally
accepted accounting principles for the United States (“GAAP”).

     1.4 Certain Matter Regarding Materiality. To the extent that any representation,
warranty, covenant or other undertaking of the Borrower in this Agreement is qualified by reference
to those which are not reasonably expected to result in a “material adverse effect” or language of
similar import, no inference shall be drawn therefrom that any Agent or any Lender has knowledge or
approves of any noncompliance by the Borrower with any governmental rule, as in effect from time to
time.

     1.5 Forms of Documents. Except as otherwise expressly provided in this Agreement,
references to documents or certificates “substantially in the form” of Exhibits to another document
shall mean that such documents or certificates are duly completed in the form

22

 

of the related
Exhibits with substantive changes subject to the provisions of Section 19.6 of this Agreement, as
the case may be, or the correlative provisions of the Security Documents.

2. REPRESENTATIONS AND WARRANTIES

     2.1 Representations and Warranties. In order to induce the Agent, the Security
Trustee and the Lenders to enter into this Agreement and to make the Facilities, the Borrower on
its own behalf and, where applicable, on behalf of the Security Parties (other than Shell EP
Offshore Ventures Limited), represents and warrants to the Agent, the Security Trustee and the
Lenders (which representations and warranties shall survive the execution and delivery of this
Agreement and the making of the Facilities) that:

	 	(a)	 	Use of Proceeds. The Borrower requires the
Facilities for use in connection with its lawful corporate purposes and for
no other purposes and the Borrower’s use of the Facilities does not
contravene any law, official requirement or other regulatory measure or
procedure implemented to combat “money laundering” (as defined in Article 1
of the Directive (91/308/EEC) of the Council of the European Communities)
and comparable United States Federal and state laws;
	 
	 	(b)	 	Corporate Status. Each of the Security Parties
is a company duly organized and validly existing under the laws of its
jurisdiction of formation, and are qualified to do business in each
jurisdiction wherein the nature of the business transacted thereby makes
such qualification necessary;
	 
	 	(c)	 	Corporate Authority. Each of the Security
Parties has full power and authority to, and all necessary consents and
authorities have been obtained to permit the Borrower to carry on its
business as now being conducted and enter into and perform its obligations
under this Agreement, the Notes and the Security Documents to which it is a
party and to borrow, service and repay the Facilities and no further
consents or authorities are necessary for the service and repayment of the
Facilities or any part thereof;
	 
	 	(d)	 	MDO Contract Validity. The MDO Contract
constitutes a legal, valid and binding obligation of the Operating Entity
and, to the best of the Borrower’s knowledge, Shell, enforceable in
accordance with its terms, subject, however, to the effect of insolvency or
bankruptcy laws affecting generally the enforcement of creditors’ rights;
	 
	 	(e)	 	Enforceability. Each of this Agreement, the
Notes and the Security Documents constitutes the legal, valid and binding
obligation of each of the Security Parties as is a party thereto,
enforceable thereagainst in

23

 

	 	 	 	accordance with its terms, subject, however, to
the effect of insolvency or bankruptcy laws affecting generally the
enforcement of creditors rights;
	 
	 	(f)	 	Filings; Stamp Taxes. Other than the recording
of the Mortgage with the Maritime Administrator of the Republic of the
Marshall Islands in New York on the Delivery Date and the filing of UCC
Financing Statements with the Recorder of Deeds in Washington, D.C. in
respect of the Security Documents, and fees consequent thereto, it is not
necessary for the legality, validity, enforceability or admissibility into
evidence of this Agreement, the Notes or the Security Documents that any of
them or any document relating thereto be registered, filed recorded or
enrolled with any court or authority in any relevant jurisdiction or that
any stamp, registration or similar Taxes be paid on or in relation to this
Agreement, the Notes or any of the Security Documents;
	 
	 	(g)	 	Approvals; Consents. All consents, licenses,
approvals and authorizations required, whether by statute or otherwise, in
connection with the entry into and performance by each of the Security
Parties, and the validity and enforceability against each of the Security
Parties, of this Agreement, the Notes and the Security Documents to which it
is a party have been obtained and are in full force and effect;
	 
	 	(h)	 	Violation of Law, Contracts. The execution and
delivery of, the performance of its obligations under, and compliance by
each of the Security Parties with the provisions of this Agreement, the
Notes and the Security Documents to which they are parties do not, and will
not during the Security Period, contravene (i) any applicable law or
regulation existing at the date hereof, (ii) any contractual restriction
binding each of the Security Parties or their assets or (iii) the
constituting instruments of the Borrower the Operating Entity or the
Pledgors;
	 
	 	(i)	 	Litigation. No action, suit or proceeding is
pending or threatened against any Security Party which is likely to affect
adversely the ability of any Security Party to perform its obligations
hereunder;
	 
	 	(j)	 	Defaults. Neither the Borrower nor the Operating
Entity is in default under any material agreement by which it is bound, nor
is it in default in respect of any material financial commitments or
obligations. No material default has occurred and is continuing or would
result from the consummation of the transaction contemplated by this
Agreement or any other Security Document;

24

 

	 	(k)	 	Investment Company. None of the Security Parties
are required to be registered as an “investment company” (as defined in the
Investment Company Act of 1940, as amended);
	 
	 	(l)	 	Margin Stock. None of the proceeds of the
Facilities will be used to purchase or carry margin stock or extend credit
to others for the purpose of purchasing or carrying margin stock within the
meanings of Regulations T, U or X of the Board of Governors of the Federal
Reserve System; neither the Borrower nor the Pledgors is engaged in the
business of extending credit for the purpose of purchasing or carrying
margin stock within the meaning of Regulations T, U or X of the Board of
Governors of the Federal Reserve System;
	 
	 	(m)	 	Financial Information. All information and other
data furnished by the Security Parties to the Agent or the Lenders are
complete and correct and accurately and fairly represent the financial
condition of the Borrower or the Operating Entity, as the case may be, as of
the date or respective dates thereof and the results of operations thereof
for the period or respective periods covered by such financial information,
and there has been no material adverse change in the financial condition or
results of operations thereof other than as previously disclosed to the
Agent in writing; neither the Borrower nor the Operating Entity has any
contingent obligations, liabilities for taxes or other outstanding financial
obligations which are material in the aggregate except as disclosed in such
statements, information and data;
	 
	 	(n)	 	The Vessel.

	 	(i)	 	During Construction, the Vessel will be insured
in accordance with Section 9.1(l).
	 
	 	(ii)	 	After completion of the Construction:

	 	(a)	 	the Vessel will be classed in the
highest classification and rating for vessels of the same age
and type with the relevant Classification Society without any
material outstanding overdue recommendations affecting class;
	 
	 	(b)	 	the Vessel will be in every
material way fit for its intended services;
	 
	 	(c)	 	the Vessel will comply with all
relevant laws, regulations and requirements (including
environmental laws, regulations and requirements), statutory or
otherwise, as are applicable to (A) vessels documented under
Marshall

25

 

	 	 	 	Islands flag and (B) vessels engaged in a trade or
operations similar to that to be performed by the Vessel, except
where the failure to so comply would not have a material adverse
effect on the operation of the Vessel in its intended trade or
the financial condition of the Borrower;
	 
	 	(d)	 	the Facility will be secured by
the Mortgage, entered into by the Borrower in favor of the
Security Trustee; and
	 
	 	(e)	 	the Vessel will be insured in
accordance with the provisions of the Mortgage and Section
9.1(l) herein.

	 	(o)	 	Ownership. (i) All of the outstanding ordinary
shares of the Operating Entity are owned by the Borrower, (ii) 50% of the
outstanding ordinary shares of the Borrower are owned by Frontier Drillships
and (iii) 50% of the outstanding ordinary shares of the Borrower are owned
by Shell EP Offshore Ventures Ltd., and (iv) all of the outstanding ordinary
shares of Frontier Drillships are owned by FDR Holdings. None of such
ordinary shares or capital stock is, other than as provided in the Sponsor
Purchase Agreement or the Approved Joint Venture, subject to any existing
option, warrant, call, right, commitment or other agreement of any character
to which either the Borrower, the Operating Entity or the Pledgors is a
party requiring, and there are no securities or interests of the Borrower
outstanding which upon conversion or exchange would require, the issuance,
sale or transfer of any additional equity interests of the Borrower or the
Operating Entity or other securities convertible into, exchangeable for or
evidencing the right to subscribe for or purchase partnership interests,
ordinary shares or other equity securities of the Borrower or the Operating
Entity, as the case may be. There are no shareholder agreements or other
written agreements among the Borrower’s shareholders other than as
contemplated by the Sponsor Purchase Agreement, the Contribution Agreement
or the Approved Joint Venture;
	 
	 	(p)	 	Foreign Assets Control Regulation. None of the
transactions contemplated herein will violate any of the provisions of the
Foreign Assets Control Regulations of the United States of America
(Title 31, Code of Federal Regulations, Chapter V, Part 500, as amended),
any of the provisions of the Cuban Assets Control Regulations of the United
States of America (Title 31, Code of Federal Regulations, Chapter V,
Part 515, as amended), any of the provisions of the Iranian Assets Control
Regulations (Title 31, Code of Federal Regulations, Chapter V, Part 560, as
amended) or any provisions of Executive Order No. 12810, or any of the
provisions of the Regulations of the United States of

26

 

	 	 	 	America Governing
Transactions in Foreign Shipping of Merchandise (Title 31, Code of Federal
Regulations, Chapter V, Part 505, as amended);
	 
	 	(q)	 	Offices. The registered office of each of the
Borrower and the Operating Entity is located at Appleby Trust (Cayman) Ltd.,
Clifton House, 75 Fort Street, P.O. Box 1350, Grand Cayman KY1-1108, Cayman
Islands;
	 
	 	(r)	 	ERISA. The execution and delivery by the
Borrower of this Agreement, the Notes and the Security Documents and the
consummation by the Borrower of the transactions hereunder and thereunder
will not involve any prohibited transaction within the meaning of ERISA or
Section 4975 of the Code. No condition exists or event or transaction has
occurred in connection with any Plan maintained or contributed to by any
Security Party or any ERISA Affiliate thereof resulting from the failure of
any thereof to comply with ERISA insofar as ERISA applies thereto which is
reasonably likely to result in the Borrower, the Operating Entity or the
Pledgors or any ERISA Affiliate thereof incurring any liability, fine or
penalty which individually or in the aggregate would have a material adverse
effect on the Borrower, the Operating Entity or the Pledgors;
	 
	 	(s)	 	Taxes. The Borrower and the Operating Entity
have each filed or caused to be filed all tax returns which are required to
have been filed and have paid all taxes shown to be due and payable on said
returns or on any assessments made against it or any of its property or
assets;
	 
	 	(t)	 	Payments Free of Taxes. All payments made or to
be made by the Borrower under or pursuant to this Agreement, the Notes and
the Security Documents may be made free and clear of, and without deduction
or withholding for or on account of, any Taxes, provided all Foreign Lenders
comply with Section 11.5;
	 
	 	(u)	 	Environmental Compliance. (i) Each of the
Borrower and the Operating Entity is in material compliance with all
applicable United States federal and state, local, foreign and international
laws, regulations, conventions and agreements relating to pollution
prevention or protection of human health or the environment (including,
without limitation, ambient air, surface water, ground water, navigable
waters, waters of the contiguous zone, ocean waters and international
waters), including, without limitation, laws, regulations, conventions and
agreements relating to (1) emissions, discharges, releases or threatened
releases of chemicals, pollutants, contaminants,

27

 

	 	 	 	wastes, toxic substances,
hazardous materials, oil, hazardous substances, petroleum and petroleum
products and by-products (“Materials of Environmental Concern”), and (2) the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern (“Environmental
Laws”); (ii) each of the Borrower and the Operating Entity has all permits
(except those permits the failure of which to obtain would not result in a
material adverse affect), licenses, approvals, rulings, variances,
exemptions, clearances, consents or other authorizations required under
applicable Environmental Laws (“Environmental Approvals”) and each of the
Borrower and the Operating Entity will, when required, be in material
compliance with all Environmental Approvals required to operate its business
as then being conducted; (iii) neither the Borrower nor the Operating Entity
has received any notice of any claim, action, cause of action, investigation
or demand by any Person, entity, enterprise or government, or any political
subdivision, intergovernmental body or agency, department or instrumentality
thereof, alleging potential liability for, or a requirement to incur,
investigatory costs, cleanup costs, response and/or remedial costs (whether
incurred by a governmental entity or otherwise), natural resources damages,
property damages, Personal injuries, attorneys’ fees and expenses, or fines
or penalties, in each case arising out of, based on or resulting from
(1) the presence, or release or threat of release into the environment, of
any Materials of Environmental Concern at any location, whether or not owned
by such Person, or (2) circumstances forming the basis of any violation, or
alleged violation, of any Environmental Law or Environmental Approval
(“Environmental Claim”) (other than Environmental Claims that have been
fully and finally adjudicated or otherwise determined and all fines,
penalties and other costs, if any, payable by the Borrower or the Operating
Entity, as the case may be, in respect thereof have been paid in full or
which are fully covered by insurance (including permitted deductibles)); and
(iv) to the best of the Borrower’s knowledge there are no circumstances that
may prevent or interfere with such material compliance in the future;
	 
	 	(v)	 	Environmental Claims. There is no Environmental
Claim pending or, to the best of the Borrower’s knowledge, threatened
against the Borrower or the Operating Entity;
	 
	 	(w)	 	Past Environmental Matters. To the best of the
Borrower’s knowledge, there is no past or present actions, activities,
circumstances, conditions, events or incidents, including, without
limitation, the release, emission, discharge or disposal of any Materials of
Environmental Concern, that

28

 

	 	 	 	could form the basis of any Environmental Claim
against the Borrower or Operating Entity;
	 
	 	(x)	 	Compliance with ISM Code and ISPS Code. Upon the
Delivery Date, the Vessel and its respective Operator will comply with, to
the extent applicable, with the requirements of the ISM Code, and the ISPS
Code including (but not limited to) the maintenance and renewal of valid
certificates pursuant thereto;
	 
	 	(y)	 	Borrower’s Activities. The Borrower (i) is not
engaged in any other business activity other than the Construction and
chartering of the Vessel and activities relating thereto, (ii) has no
subsidiaries other than as permitted by this Agreement and as disclosed to
the Agent, and (iii) has no Indebtedness other than Permitted Indebtedness;
	 
	 	(z)	 	Sponsor Purchase Agreement. The Sponsor Purchase
Agreement has been entered into by the parties thereto and remains in full
force and effect;
	 
	 	(aa)	 	Choice of Law. The choice of New York law to
govern the Facility, and all documents appertaining thereto, and submission
to the jurisdiction of the New York courts is valid and binding;
	 
	 	(bb)	 	Liens. Other than Permitted Liens, there are no
liens of any kind on any property owned by the Borrower other than those
liens created pursuant to this Agreement or the Security Documents or
permitted thereby;
	 
	 	(cc)	 	Solvency. (a) the present fair market salable
value of its assets is not and shall not be less than the amount that will
be required to pay its probable liability on its then existing debts,
including, to the extent they are reportable as such in accordance with
GAAP, contingent liabilities, as they mature, (b) the Borrower does not and
will not have unreasonably small working capital with which to continue its
business and (c) the Borrower has not incurred, does not intend to incur and
does not believe it will incur, debts beyond its ability to pay such debts
as they mature;
	 
	 	(dd)	 	Title to Property. Borrower has good and
marketable title to, or valid and subsisting leasehold interest in, its
properties and assets, including all property forming a part of any security
created pursuant to this Agreement or the Security Documents or permitted
thereby;
	 
	 	(ee)	 	Survival of Representations. All
representations, covenants and warranties made herein and in any certificate
or other document

29

 

	 	 	 	delivered pursuant hereto or in connection herewith shall
survive (i) the making of the Facilities, (ii) the issuance of the Notes to
be issued by the Borrower hereunder, and (iii) shall be reaffirmed and have
full force and effect as if entered into upon any Drawdown Date or upon the
making of any Drawdown under any of the Facilities.

3. AMOUNT AND TERMS OF THE FACILITIES

     3.1 Purposes. Subject to the terms and conditions hereof, the Lenders shall make the
Facilities available to the Borrower or its order in an aggregate amount of up to Four Hundred
Sixty Five Million Dollars ($465,000,000).

	 	(a)	 	Senior Facility. The Senior Facility provided by
the Senior Lenders shall be comprised of two (2) tranches as follows:

	 	(i)	 	A term loan in the aggregate principal amount
of up to Three Hundred and Seventy Five Million Dollars ($375,000,000)
(the “Senior Term Loan”) for the purpose of partly financing the
Construction of the Vessel; and
	 
	 	(ii)	 	A revolving credit facility in the aggregate
principal amount of up to Forty Million Dollars ($40,000,000) (the
“Senior Revolver”) for the purpose of (i) partly financing the
Construction of the Vessel, and (ii) financing general working capital
needs;

	 	(b)	 	Junior Term Loan. The Junior Term Loan provided
by the Junior Lenders shall be comprised of a credit facility in the
aggregate principal amount of up to Fifty Million Dollars ($50,000,000) (the
“Junior Term Loan”) solely for the purpose of financing, together with the
Standby Funding, potential cost overruns related to the Construction;

     3.2 Making the Facilities.

	 	(a)	 	With respect to the Senior Term Loan, each of the Senior
Lenders, relying upon each of the representations and warranties set out in
Section 2, hereby severally and not jointly agrees with the Borrower that,
subject to and upon the terms of this Agreement, it will on a Senior Term
Loan Drawdown Date make its portion of each Advance available through the
Agent to the Borrower or its order in an aggregate amount not to exceed its
Commitment ratably with the other Senior Lenders according to their
respective Commitments, provided that (i) any such Advance shall be in a
minimum amount of Five Million Dollars ($5,000,000); (ii) the last Senior
Term Loan Drawdown Date shall be no later than December 30, 2010; and
(iii) all Senior Term Loan Drawdown

30

 

	 	 	 	Dates are in accordance and correspond to
the payment schedules of the construction yard and vendors as contemplated by
the Construction Plan;
	 
	 	(b)	 	With respect to the Senior Revolver, each of the Senior
Lenders, relying upon each of the representations and warranties set out in
Section 2, hereby severally and not jointly agrees with the Borrower that,
subject to and upon the terms of this Agreement, it will, on each Senior
Revolver Drawdown Date, make its portion of each Advance available through
the Agent to the Borrower or its order in an aggregate amount not to exceed
its Commitment ratably with the other Senior Lenders according to their
respective Commitments; provided that (i) any such Advance shall be in a
minimum amount of Two Million Dollars ($2,000,000); (ii) no more than ten
(10) Senior Revolver Advances shall be outstanding at any time; and (iii) the
last Senior Revolver Drawdown Date shall be the date which is no later than
one month immediately preceding the Final Payment Date; and
	 
	 	(c)	 	With respect to the Junior Term Loan, each of the Junior
Lenders, relying upon each of the representations and warranties set out in
Section 2, hereby severally and not jointly agrees with the Borrower that,
subject to and upon the terms of this Agreement, it will, on each Junior Term
Loan Drawdown Date, make its portion of each Advance available through the
Agent to the Borrower or its order in an aggregate amount not to exceed its
Commitment ratably with the other Junior Lenders according to their
respective Commitments, provided that (i) any such Advance shall be in a
minimum amount of One Million Dollars ($1,000,000); (ii) the last Junior Term
Loan Drawdown Date shall be no later than December 30, 2010; (iii) the Senior
Term Loan has been fully drawn and the Borrower has decided to draw on the
Junior Term Loan; and (iv) the Joint Venturers have made Standby Funding
contributions pursuant to the Contribution Agreement in a total amount equal
to the amount of the Advance made under the Junior Term Loan and such
contributions are made on or prior to the Junior Term Loan Drawdown Date.

     3.3 The Notes. Each of the Facilities shall be evidenced by a separate Note. Each
Advance made by the Lenders to the Borrower may be evidenced by a notation of the same made by
Agent on the grid attached to the applicable Note relating to the Facility under which such Advance
was made, which notation, absent manifest error, shall be prima facie evidence of
the amount of the relevant Advance.

     3.4 Drawdown Notice. The Borrower shall, at least three (3) Banking Days before each
of the Drawdown Dates, serve a notice (a “Drawdown Notice”) for an Advance under any of the
Facilities substantially in the form of Exhibit A on the Agent. Each such notice

31

 

shall (a) be in
writing addressed to the Agent, (b) be effective on receipt by the Agent, (c) specify the amount of
the Advance to be drawn and identify the Facility and, if applicable, the tranche of such Facility
to which such Advance relates, (d) specify the Banking Day on which such Advance is to be drawn,
(e) specify the initial Interest Period for such Advance, (f) in respect of any Advance under the
Junior Term Loan or the Senior Revolver identify the costs being funded by such Advance, certify
compliance with the Construction Plan and on a quarterly basis thereafter provide invoices with
respect to such costs, (g) specify the disbursement instructions and (h) be irrevocable.

     3.5 Effect of Drawdown Notice. Each such Drawdown Notice shall be deemed to
constitute a warranty by the Borrower (a) that the representations and warranties stated in
Section 2 (updated mutatis mutandis) are true and correct on and as of the date of such Drawdown
Notice and will be true and correct on and as of such Drawdown Date as if made on such date, and
(b) that no Event of Default nor any event which with the giving of notice or lapse of time or both
would constitute an Event of Default has occurred and is continuing.

4. CONDITIONS

     4.1 Conditions Precedent to the Effectiveness of this Agreement. The obligation of
the Lenders to enter into this Agreement with the Borrower shall be expressly subject to the
satisfaction of the following conditions precedent:

	 	(a)	 	Borrower Documents. the Agent shall have
received the following documents in form and substance satisfactory to the
Agent and its counsel:

	 	(i)	 	copies, certified as true and complete by an
officer of the Borrower, of the resolutions of the board of directors
and shareholders of the Borrower evidencing approval of this Agreement,
the Notes and the Security Documents to which it is a party and
authorizing an appropriate officer or officers or attorney or
attorneys-in-fact to execute the same on its behalf;
	 
	 	(ii)	 	certified copies of all documents evidencing
any other necessary action (including by such parties thereto other
than the Borrower as may be required by the Agent), approvals or
consents with respect to this Agreement, the Notes and the Security
Documents;
	 
	 	(iii)	 	certified copies of the constitutional
documents of the Borrower and all amendments thereto;
	 
	 	(iv)	 	a good standing certificate or the equivalent
thereto for the Borrower; and

32

 

	 	(v)	 	evidence that the Borrower is the legal and
beneficial owner of one hundred percent (100%) of the ordinary shares
of the Operating Entity, as set forth in Section 2.1(o).

	 	(b)	 	Other Security Party Corporate Documents. the
Agent shall have received from Frontier Drillships, the Operating Entity and
Shell EP Offshore Ventures Limited the following documents in form and
substance satisfactory to the Agent and its counsel:

	 	(i)	 	copies, certified as true and complete by an
officer or director of each of Frontier Drillships, the Operating
Entity and Shell EP Offshore Ventures Limited of the resolutions of its
respective board of directors authorizing an appropriate officer(s) or
director(s), attorney or attorneys-in-fact or other authorized Person
to execute the same on its behalf;
	 
	 	(ii)	 	certified copies of all documents evidencing
any other necessary action (including by such parties thereto other
than Frontier Drillships, the Operating Entity and Shell EP Offshore
Ventures Limited as may be required by the Agent), approvals or
consents with respect to the Security Documents to which it is a party;
	 
	 	(iii)	 	certified copies of constitutional documents
and all amendments thereto;
	 
	 	(iv)	 	a good standing certificate or the equivalent
from the jurisdiction of formation of Frontier Drillships, the
Operating Entity and Shell EP Offshore Ventures Limited; and
	 
	 	(v)	 	evidence that each of Frontier Drillships and
Shell EP Offshore Ventures Limited, is the legal and beneficial owner
of fifty percent (50%) of ordinary shares of the Borrower, as set forth
in Section 2.1(o);

	 	(c)	 	This Agreement and Notes. the Borrower shall
have duly executed and delivered this Agreement and the Notes to the Agent;
	 
	 	(d)	 	Security Documents. (i) the Borrower shall have
executed and delivered to the Agent: (A) the Assignments of Construction
Contracts, the Assignment of Collateral Pledge, the Assignment of
Insurances, the Assignment of Earnings and each of the applicable Assignment
Notices related thereto and (B) such Uniform Commercial Code Financing
Statements as the Agent shall require, each in form and substance
satisfactory to the Agent; (ii) the Pledgors shall have executed and
delivered to the Agent the Share Pledge Agreements

33

 

	 	 	 	together with the share certificates, if certificated, irrevocable
proxies, instruments of transfer and other documents to be delivered
pursuant thereto; (iii) and the Operating Entity shall have, pursuant to
the terms of the Bareboat Charter, executed the Collateral Pledge and
applicable assignment notices (including all required notices of
assignment of insurances and notices of account pledges) related thereto;
provided, however, that the Borrower shall have fifteen
(15) days from the date of this Agreement to obtain any acknowledgments to
the Assignment Notices related to the Assignments of Construction
Contracts;

	 	(e)	 	Delivery of Construction Contracts. the Agent
shall have received a copy each of the Construction Contracts, certified as
true and complete by an officer of the Borrower, which contracts shall be
reviewed and approved by the Technical Advisor on behalf of the Agent;
	 
	 	(f)	 	Construction Plan. the Agent shall have received
a copy of the Construction Plan, certified as true and complete by an
officer of the Borrower, which plan shall be reviewed and approved by the
Technical Advisor on behalf of the Agent;
	 
	 	(g)	 	MDO Contract. the Borrower shall have delivered
to the Agent a copy of the duly signed and executed MDO Contract, in form
and substance reasonably acceptable to the Agent;
	 
	 	(h)	 	Bareboat Charter. the Agent shall have received
a copy, certified by an officer of each of the Borrower and the Operating
Entity, of the Bareboat Charter between the Borrower and the Operating
Entity;
	 
	 	(i)	 	Standby Funding. the Agent shall have received a
copy of the Contribution Agreement in form and substance satisfactory to the
Agent demonstrating the commitment of the Joint Venturers to provide the
Borrower with up to One Hundred Million Dollars ($100,000,000) in additional
funds to pay Construction overrun costs;
	 
	 	(j)	 	Financial Statements; Solvency. the Agent shall
have received pro forma financial statements for the Borrower, which
financial statements shall evidence satisfactorily to the Lenders the
solvency of the Borrower;
	 
	 	(k)	 	Legality. the Agent being satisfied that no
Event of Default has occurred, no event which is likely to become an Event
of Default has occurred, no Event of Default will arise following the making
of the Initial Advance and that no event or state of affairs exists which
constitutes, in the opinion of the Agent, a threat that it will be unlawful

34

 

	 	 	 	for the Borrower or any other Security Party to make any payment as
required under the terms of this Agreement, the Notes and the Security
Documents or any of them;

	 	(l)	 	Licenses, Consents and Approvals. the Agent
shall have received satisfactory evidence that all necessary licenses,
consents and approvals in connection with the transactions contemplated by
this Agreement, the Notes and the Security Documents have been obtained;
	 
	 	(m)	 	Environmental Claims. the Agent shall be
satisfied that neither the Borrower nor any other Security Party is subject
to any Environmental Claim which could have a material adverse effect on the
business, assets or results of operations of any thereof;
	 
	 	(n)	 	Money Laundering Due Diligence. the Agent having
received such documentation and other evidence as is reasonably requested by
the Agent in order for each Lender to carry out and be satisfied with the
results of all necessary “know your client” or other checks which it is
required to carry out in relation to the transactions contemplated by this
Agreement, the Notes and the Security Documents;
	 
	 	(o)	 	Process Agent. C T Corporation System shall have
delivered to the Agent a signed copy of its acceptance of appointment as
agent as provided for in Section 15.2;
	 
	 	(p)	 	Fees. the Agent shall have received payment of
the fees payable under Section 14;
	 
	 	(q)	 	Legal Opinions. the Agent shall have received
opinions, dated the date hereof, each in form and substance reasonably
satisfactory to the Agent and its counsel, from (i) Gardere Wynne Sewell
LLP, special counsel to the Security Parties (other than Shell EP Offshore
Ventures Limited) and the Operating Entity, (ii) Appleby, special Cayman
Islands counsel to the Borrower, (iii) Slaughter and May, special counsel to
Shell EP Offshore Ventures Limited relating to their respective Share Pledge
Agreement, (iv) Seward & Kissel LLP, special counsel to the Agent, and
(v) such other legal counsel as requested by the Agent;
	 
	 	(r)	 	Tax Report. the Agent shall have received a tax
report from Deloitte Tax LLP relating to the tax structure of the Approved
Joint Venture, as prepared for Frontier Drillships and in form and substance
satisfactory to the Lenders in their sole discretion;

35

 

	 	(s)	 	Material Contracts. the Arranger shall have
reviewed and approved the Construction Contracts, the Construction Plan, and
any and all material contracts or documents it deems appropriate;
	 
	 	(t)	 	Capital Contribution Funding. the Agent shall
have received evidence that $48,000,000 of the Capital Contribution Funding
has been made by the Joint Venturers prior to the Drawdown of the Initial
Advance and shall have received a copy of the Contribution Agreement
providing for, among other things, a commitment of an additional $67,000,000
for the Initial Funding, for a total Capital Contribution Funding of
$115,000,000 for the Initial Funding;
	 
	 	(u)	 	Technical Advisor. the Technical Advisor shall
have been appointed to act on behalf of the Agent and the Lenders;
	 
	 	(v)	 	Insurance. if Construction has commenced,
(i) the Agent shall have received evidence that the Vessel is insured during
Construction thereof, such insurances to include all risks hull and
machinery (including excess risks), builder’s risks and to be satisfactory
to the Agent in its reasonable discretion, and (ii) the Agent shall have
received a favorable report from the Borrower’s insurance brokers confirming
that the insurances placed on the Vessel are in compliance with the Credit
Agreement and the Mortgage during the Construction and operational phase of
the Project;
	 
	 	(w)	 	Joint Venture. Shell EP Offshore Venture Limited
shall have made a capital contribution to the Borrower and purchased 50% of
the outstanding capital shares of the Borrower;
	 
	 	(x)	 	Shell Acknowledgement. the Borrower shall have
delivered to the Agent a duly signed and executed acknowledgement by Shell to
Collateral Pledge; and
	 
	 	(y)	 	Sponsor Purchase Agreement. the Agent shall have
received a duly executed copy of the Sponsor Purchase Agreement.

     4.2 Conditions Precedent to the Delivery Date. In addition to the conditions set
forth elsewhere in this Section 4, the Borrower shall procure that on the Delivery Date:

            (a) Security Documents. unless previously delivered pursuant to Section 9.1(s)
hereof, the Borrower shall have, or shall have procured that the Operating Entity shall have, as
applicable and in accordance with the Bareboat Charter, executed and delivered to the Agent any
Assignments, Account Pledges and other Security Documents and applicable assignment notices as the
Agent shall require and such Uniform Commercial Code Financing

36

 

Statements (each in form and substance satisfactory to the Agent) with respect thereto as the
Agent shall require shall have been filed;

          (b) Corporate Documents. The Agent shall have received the following documents in
form and substance satisfactory to the Agent:

	 	(i)	 	a certificate from an officer of the Borrower
and the Operating Entity certifying that each of the corporate
documents delivered in connection with Section 4.1 remain in effect on
the Delivery Date and that the resolutions provided in connection with
4.1 have not been amended, modified or rescinded and remain in full
force and effect on the Delivery Date;
	 
	 	(ii)	 	a good standing certificate or the equivalent
thereto for each Security Party;

          (c) The Vessel. the Agent shall have received evidence satisfactory to it and its
legal advisers that upon the Delivery Date the Vessel:

	 	(i)	 	satisfies all of the requirements of Section
9.1(s) hereof;
	 
	 	(ii)	 	is classed in the highest classification and
rating for vessels of the same age and type with the relevant
Classification Society without any material outstanding overdue
recommendations affecting class;
	 
	 	(iii)	 	is in every material way fit for its intended
service (and the Agent shall have received copies of any technical
surveys the Lenders may require made by the Technical Advisor or
surveyors appointed by the Agent at the expense of the Borrower) and
has been accepted by Shell under the MDO Contract;
	 
	 	(iv)	 	is duly licensed and all necessary consents and
approvals will have been obtained for the operation of the Vessel; and
	 
	 	(v)	 	in compliance with all relevant laws,
regulations and requirements (including environmental laws, regulations
and requirements), statutory or otherwise, as are applicable to
(A) vessels of the same type as the Vessel documented under Marshall
Islands flag and (B) vessels engaged in a trade or operations similar
to that to be performed by the Vessel, except where the failure to so
comply would not have a material adverse effect on the operation of the
Vessel in its intended trade or operations or the financial condition
of the respective owners.

37

 

          (d) Insurance. the Agent shall have received a favorable report from the Borrower’s
insurance brokers confirming that the insurances placed on the Vessel are in compliance with the
terms of the Mortgage;

          (e) Legal Opinions. the Agent shall have received opinions, dated the Delivery Date,
each in form and substance reasonably satisfactory to the Agent and its counsel, from (i) Gardere
Wynne Sewell LLP, special counsel to the Security Parties (other than Shell EP Offshore Ventures
Limited) and the Operating Entity, (ii) Appleby, special Cayman Islands counsel to the Borrower,
(iii) Seward & Kissel LLP, special counsel to the Agent and (iv) such other legal counsel as
requested by the Agent;

          (f) Recording of the Mortgage. the Agent shall have received satisfactory evidence
that the Mortgage on the Vessel has been duly recorded under the laws of the Republic of the
Marshall Islands and constitutes a first preferred mortgage lien on the Vessel under the laws of
such jurisdiction; and

          (g) Junior Term Loan Hedging Agreement. If the Junior Term Loan has been advanced,
the Borrower shall enter into an interest rate Hedging Agreement in which One Hundred Percent
(100%) of the aggregate outstanding amount of the Junior Term Loan shall be secured on a pari passu
basis with the Junior Term Loan.

     4.3 Further Conditions Precedent. The obligation of the Lenders to make any Advance
available to the Borrower under this Agreement shall be expressly and separately subject to the
following further conditions precedent on the relevant Drawdown Date:

	 	(a)	 	Drawdown Notice. the Agent having received a
Drawdown Notice in accordance with the terms of Section 3.4;
	 
	 	(b)	 	Representations and Warranties. the
representations stated in Section 2 (updated mutatis mutandis to such date)
being true and correct as if made on and as of that date;
	 
	 	(c)	 	Liens. the Agent shall have received evidence
satisfactory to it and to its legal advisers that, save for Permitted Liens
and the liens created by the Mortgage and the Security Documents, there are
no liens, charges or encumbrances of any kind whatsoever on the Vessel, its
earnings or insurances or on any other assets thereof except as permitted
hereby or by any of the Security Documents;
	 
	 	(d)	 	Material Adverse Change. there having been no
material adverse change in the financial condition of the Borrower or the
Operating Entity since the date hereof other than the transactions
contemplated hereby; provided that cost overruns heretofore incurred and
modifications to the Construction Plan approved pursuant to Section 9.2(o)
shall not be deemed to be a material adverse change. For

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	 	 	 	purposes of this Section 4.3(d), any increases in the cost of Construction
covered by existing or new funding commitments in favor of the Borrower
shall not be considered a material adverse change; provided that in
connection with any new funding commitments the Borrower requests and
receives the prior written consent of the Agent, in its sole discretion,
and any such commitments are fully subordinated on a cash basis and a
security basis to the obligations of the Borrower to the Lenders hereunder
and under the Security Documents;

	 	(e)	 	No Event of Default. no Event of Default, or
event which with the passing of time or the giving of notice, or both, would
constitute an Event of Default shall have occurred and be continuing and the
Agent shall have received a certificate from an officer of the Borrower and
any other Security Party to such effect;
	 
	 	(f)	 	No Change in Laws. the Agent being satisfied
that no change in any applicable laws, regulations, rules or in the
interpretation thereof shall have occurred which make it unlawful for the
Borrower or any other Security Party to make any payment as required under
the terms of this Agreement, the Note, the Security Documents or any of
them;
	 
	 	(g)	 	Standby Funding and the Junior Term Loan. in
respect of any Advance under the Junior Term Loan by the Junior Lenders, the
Agent shall have received satisfactory evidence that an equal amount of
Standby Funding has been made available by the Joint Venturers under the
Contribution Agreement to the Borrower in an account held by the Borrower
with the Agent;
	 
	 	(h)	 	Senior Facility Interest Hedging Agreement.
Within thirty (30) days of the drawdown of the Initial Advance, the Borrower
shall enter into an interest rate Hedging Agreement covering at all times at
least Seventy Five Percent (75%) of the aggregate outstanding amount (at any
given time) of the Senior Term Loan and such agreement shall be secured on a
pari passu basis with the Senior Facility;
	 
	 	(i)	 	Senior Facility Currency Hedging Agreement.
Within thirty (30) days of the drawdown of the Initial Advance, the Borrower
shall enter into a currency Hedging Agreement covering at all times One
Hundred Percent (100%) of the aggregate outstanding amount (at any given
time) of any amounts under the Construction Contracts not denominated in
U.S. Dollars and such agreement shall be secured on a pari passu basis with
the Senior Facility;

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	 	(j)	 	Insurance. If Construction has commenced, the
Agent shall have received evidence that the Vessel is insured during
Construction thereof, such insurances to include comprehensive builder’s
risks and to be satisfactory to the Agent in its reasonable discretion; and
	 
	 	(k)	 	Money Laundering Due Diligence. the Agent having
received such documentation and other evidence as is reasonably requested by
the Agent in order for each Lender to carry out and be satisfied with the
results of all necessary “know your client” or other checks which it is
required to carry out in relation to the transactions contemplated by this
Agreement, the Notes and the Security Documents.

     4.4 Breakfunding Indemnity. In the event that, on the date specified for making
available any Advances hereunder in the notice requesting the same given pursuant to Section 3.4,
the Lenders shall not be obliged under this Agreement to make an Advance available under this
Agreement, the Borrower shall indemnify and hold the Lenders fully harmless against any losses
which the Lenders may sustain as a result of borrowing or agreeing to borrow funds to meet the
drawdown requirement in respect thereof and the certificate of the Agent shall (save and except for
manifest error) be conclusive and binding on the Borrower as to the extent of any losses sustained
by the Lenders.

     4.5 Post-Closing Satisfaction. Without prejudice to any of the other terms and
conditions of this Agreement, in the event that the Lenders, in their sole discretion, make any
Advances available to the Borrower prior to the satisfaction of all or any of the conditions
referred to elsewhere in this Section 4, the Borrower hereby covenants and undertakes to satisfy or
procure the satisfaction of such condition or conditions within fourteen (14) days.

5. REPAYMENT AND PREPAYMENT

     5.1 Repayment. The Borrower shall repay:

	 	(a)	 	the principal of the Senior Term Loan in twenty (20)
consecutive quarterly installments of Fifteen Million, Seven Hundred and
Fifty Thousand Dollars ($15,750,000), commencing on the Initial Payment
Date. The final installment shall occur on the Final Payment Date and shall
be in the amount of Fifteen Million, Seven Hundred and Fifty Thousand
Dollars ($15,750,000), together with a one-time balloon payment of Sixty
Million Dollars ($60,000,000), plus any other amount which remains
outstanding under or in connection with the Senior Term Loan on the Final
Payment Date; provided, however, that if the Senior Term Loan has not been
fully advanced, the balloon payment shall be reduced by such undrawn
portion;

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	 	(b)	 	on the Final Payment Date, the principal of any Advances
under the Senior Revolver outstanding at that time. Prior to the day which
is one month prior to the Final Payment Date, the Senior Revolver may be
borrowed, repaid and reborrowed; and
	 
	 	(c)	 	the principal of any amount advanced under the Junior
Term Loan in quarterly consecutive installments by means of a quarterly cash
sweep, commencing in the third quarter after the Initial Payment Date.
Beginning on the third quarter after the Initial Payment Date and ending on
the Final Payment Date, the Borrower shall repay the principal of the Junior
Term Loan, without penalty or premium, in an amount equal to the Excess Cash
Flow (less a dividend provision of up to USD 500,000 per quarter, for an
annual dividend of up to $2,000,000) of the Borrower for the quarterly
period which ends on such payment date. All amounts outstanding under the
Junior Term Loan shall be repaid in full on the Final Payment Date.

     5.2 Prepayment; Enforceability. The Borrower shall prepay the Facility Balance in
full within five (5) Banking Days of the occurrence of any of the following events:

	 	(a)	 	any government authorization, permission, approval, or
consent required for the legality, validity or enforceability of this
Agreement, the Notes or any Security Document has been revoked or restricted
or ceases to be in full force and effect in any way which the Agent, in the
exercise of its reasonable judgment, deems prejudicial to the Lenders’
rights or remedies hereunder and the Agent shall have so notified the
Borrower; or
	 
	 	(b)	 	any judgment or order is made, the effect whereof would
be to render ineffective or invalid this Agreement, the Notes or any
Security Document.

     5.3 Mandatory Prepayment; Sale, Loss or Cancellation of any Construction Contract.
The Borrower shall prepay:

	 	(a)	 	the Facilities in full upon: (i) receipt of sales
proceeds of a sale of the Vessel, or (ii) the earlier of (x) one hundred and
eighty (180) days after a Total Loss of the Vessel or (y) the date on which
the insurance proceeds in respect of such loss are received by the Borrower;
and
	 
	 	(b)	 	the Facilities in part upon receipt of insurance or
warranty payments, with respect to warranty claims and insurance claims for
loss or damage to the Vessel in excess of $10,000,000 if the damage to the
Vessel to

41

 

	 	 	 	which such insurance or warranty claim relates has not been repaired by
the Borrower within one hundred twenty (120) days.

     5.4 Voluntary Prepayment. The Borrower shall be entitled to prepay the Facilities in
whole or in part without penalty at the end of any Interest Period in minimum amounts equal to Five
Million Dollars ($5,000,000), and integral multiples of Five Million Dollars ($5,000,000), upon
giving to the Agent not less than five (5) Banking Days prior written notice (which notice shall be
irrevocable) provided that any amounts received by the Lenders as a prepayment of the Loan under
this Section 5.4 shall be applied toward the payment of principal and interest as due on each
Payment Date in inverse order of maturity. Notwithstanding anything to the contrary contained
herein, the Borrower shall not be permitted to prepay the Facilities under this Section 5.4 during
the six month period following the Initial Payment Date.

     5.5 Repayments and Prepayments Generally. Any and all repayments and prepayments
hereunder, whether mandatory or voluntary, are subject to the following:

	 	(a)	 	with respect to the Senior Term Loan and the Junior Term
Loan, any amounts repaid or prepaid shall not be available for reborrowing;
and
	 
	 	(b)	 	on the date of repayment or prepayment all accrued
interest to the date of such prepayment shall be paid in full with respect
to the portion of the principal being prepaid together with any loss
incurred by the Lenders in connection with any breaking of funding but
otherwise without premium.

6. INTEREST AND RATE

     6.1 Floating Rate. For purposes of funding the Facilities, the Borrower may select
Interest Periods of one(1), three (3) or six (6) months by giving the Agent at least three (3)
Banking Days notice prior to the end of any then existing Interest Period. Unless and until the
Borrower makes an election of a period for funding, the relevant Interest Period shall be a period
of three (3) months. The Borrower’s right to select the Interest Period shall be subject to the
restriction that no selection of an Interest Period shall be effective unless the Lenders are
satisfied that the necessary funds will be available to the Lenders for such period and that no
Event of Default or event which with notice or the passage of time or both would constitute an
Event of Default shall have occurred and is continuing. The Borrower’s right to select the
Interest Period is further subject to the requirement that if the Borrower selects an Interest
Period which extends beyond the next one (1) or more Payment Dates there shall in respect of such
part of the Facilities as shall be equivalent to the amount of each installment of principal
falling due for payment before the expiry of that Interest Period be such separate Interest Period
or Interest Periods so as to ensure that an Interest Period shall expire in respect of each such
part of the Facilities on the relevant Payment Date. The Borrower shall pay all administrative
costs and any breaking of funding costs incurred by the Lenders by reason of the Borrower’s
selection of

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Interest Periods under this Section 6.1 (the Agent’s certification as to the amount such costs
shall be conclusive save for manifest error).

     6.2 Applicable Rate; Default Rate. The Facilities shall bear interest at the rate per
annum equal to the Applicable Margin plus LIBOR (the “Applicable Rate”). Any payment hereunder not
paid when due, whether on a Payment Date or by acceleration, shall bear interest thereafter at a
rate per annum (the “Default Rate”) of either (i) the Applicable Margin plus two percent (2%) over
the cost to the Lenders of funding such overdue amount, or (ii) two percent (2%) over the
Applicable Rate, whichever is greater.

     6.3 Interest Payments. Interest shall be payable in arrears on the last day of each
Interest Period, except that if the Borrower selects an Interest Period in excess of three (3)
months accrued interest shall be payable during such Interest Period on each three (3) month
anniversary of the commencement of such Interest Period and upon the end of such Interest Period;
provided that, Interest Periods for all Advances will be consolidated on the last
Banking Day of the quarter following the Delivery Date provided further that any
and all costs incurred by the Lenders in connection with any breaking of funding (as certified by
such Lender which certification shall, absent any manifest error, be conclusive and binding on the
Borrower) as a consequence of such consolidation or otherwise shall be for the account of the
Borrower.

     6.4 Banking Days. If interest would, under this Section 6, be payable on a day which
is not a Banking Day, it shall then be payable on the next following Banking Day, unless such next
following Banking Day falls in the following month in which case it shall be payable on the Banking
Day immediately preceding the day on which such interest would otherwise be payable.

     6.5 360 Day Year. All interest shall accrue from day to day and be calculated on the
actual number of days elapsed and on the basis of a 360 day year.

7. PAYMENTS

     7.1 Borrower Payments. All payments to be made hereunder by the Borrower shall be
made on the due date of such payment to the Lenders:

	 	(a)	 	in Dollars in freely available funds, to such account as
the Agent may direct; and
	 
	 	(b)	 	without set-off or counterclaim and free from, clear of,
and without deduction for, any Taxes, provided, however, that if the
Borrower shall at any time be compelled by law to withhold or deduct any
Taxes from any amounts payable to the Lenders hereunder, the Borrower shall
pay such additional amounts in Dollars as may be necessary in order that the
net amounts received after withholding or deduction shall equal the amounts
which would have been received if such withholding or deduction were not
required and, in such event, the Borrower shall

43

 

	 	 	 	promptly send to the Lenders such documentary evidence with respect to
such withholding or deduction as may be required from time to time by the
Lenders; provided, however, that the Borrower shall not be required to pay
such additional amounts to the extent they result from the exercise by a
Lender of its rights under Section 11.2, a Foreign Lender fails to comply
with Section 11.5 or are otherwise attributable to the act of a Lender.
If as a result of a Lender failing to comply with Section 11.5 or due to
other acts of the Lender that cause the Borrower to incur any withholding
tax liability, such withholding tax liability may be deducted by the
Borrower from any amounts payable to such Lender.

     7.2 Advances. All sums advanced by the Lenders to the Borrower hereunder shall be
advanced in Dollars to the account of the Borrower with the Agent or as the Borrower shall
otherwise direct in the Drawdown Notice.

     7.3 Other Manner of Payment. Notwithstanding anything to the contrary in this Section
7, payments described herein may be made in such other manner as shall be reasonably directed by
the Agent with notice to the Borrower prior to the next payment to which such instructions shall
apply.

     7.4 Sharing of Setoffs. Each Lender agrees that if it shall, through the exercise of
a right of banker’s lien, setoff or counterclaim or pursuant to a secured claim under Section 506
of the Federal Bankruptcy Code or other security or interest arising from, or in lieu of, such
secured claim, exercised or received by such Lender under any applicable bankruptcy, insolvency or
other similar law or otherwise, or by any other means, obtain payment (voluntary or involuntary) in
respect of any Advance or Advances as a result of which its funded Commitment shall be
proportionately less than the funded Commitment of any other Lender, it shall be deemed
simultaneously to have purchased from such other Lender at face value, and shall promptly pay to
such other Lender the purchase price for, a participation in the funded Commitment of such other
Lender so that the aggregate funded Commitment of each Lender shall be in the same proportion to
the aggregate funded Commitments then outstanding as its funded Commitment prior to such exercise
of banker’s lien, setoff or counterclaim or other event was to the principal amount of all funded
Commitments outstanding prior to such exercise of banker’s lien, setoff or counterclaim or other
event; provided, however, that, if any such purchase or purchases or adjustments shall be made
pursuant to this Section 7.4 and the payment giving rise thereto shall thereafter be recovered,
such purchase or purchases or adjustments shall be rescinded to the extent of such recovery and the
purchase price or prices or adjustment restored without interest. Any Lender holding a
participation in a funded Commitment deemed to have been so purchased may exercise any and all
rights of banker’s lien, setoff or counterclaim with respect to any and all moneys owing to such
Lender by reason thereof as fully as if such Lender had made an Advance in the amount of such
participation. The Borrower expressly consents to the foregoing arrangement.

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8. EVENTS OF DEFAULT

     8.1 Events of Default. In the event that any of the following events shall occur:

	 	(a)	 	Facilities Payment Default. Any principal of or
interest payable in connection with the Facilities is not paid on the due
date thereof or any other amount becoming payable to the Lenders under this
Agreement, the Notes or any of the Security Documents or any of them is not
paid within five (5) Banking Days after notice; or
	 
	 	(b)	 	Fee Letter or Underwriting Letter Payment
Default. Any fee payable in connection with either the Fee Letter or
the Underwriting Letter is not paid on the due date thereof or any other
amount becoming payable to the Lenders under either the Fee Letter or the
Underwriting Letter; or
	 
	 	(c)	 	Breach of Representation. Any representation or
warranty made by the Borrower or any other Security Party in this Agreement,
the Notes or in any of the Security Documents or other instrument, document,
or agreement delivered in connection herewith or therewith proves to have
been incorrect when made in any material respect and is not remedied within
fifteen (15) days after written notice; or
	 
	 	(d)	 	Compromised Ability to Perform. Any of the
statements made by the Borrower or any other Security Party in this
Agreement, the Notes or any of the Security Documents proves to be incorrect
in any material respect and the Borrower or any other Security Party is
unlikely to be able to perform its obligations under this Agreement, the
Note or the Security Documents to which it is a party; or
	 
	 	(e)	 	Impossibility; Illegality. It becomes impossible
or unlawful for the Borrower or any other Security Party to fulfill any of
the covenants and obligations contained in this Agreement, the Notes or any
of the Security Documents or for the Agent or the Lenders to exercise any of
the material rights vested in them under this Agreement, the Notes or the
Security Documents; or
	 
	 	(f)	 	Covenant Default. (i) The Borrower defaults
under the Mortgage or (ii) the Borrower any other Security Party defaults in
the performance of any term, covenant or agreement contained in this
Agreement, the Notes, the Security Documents or any of them, or any other
instrument, document or agreement delivered in connection herewith or
therewith, or there occurs any other event which constitutes a default under
this Agreement, the Notes or any of the Security Documents, and in the

45

 

	 	 	 	case of sub-clause (ii), such default continues unremedied for a period of
fifteen (15) days after written notice; or

	 	(g)	 	Cancellation or Termination of MDO Contract or any
Construction Contract. The MDO Contract or any of the Construction
Contacts have been repudiated, cancelled, materially changed or it has been
terminated for any reason and a substitute contract acceptable to the Agent
and the Majority Lenders is not entered into within ninety (90) days with
respect to the MDO Contract or thirty (30) days with respect to the
Construction Contracts; provided, however, if a termination
payment made by Shell or the relevant Builder, respectively, is used to
prepay the Facility Balance in full, then no Event of Default hereunder
shall have occurred; or
	 
	 	(h)	 	Other Debts. The Borrower fails to make payment
at stated maturity, upon acceleration or otherwise of any principal of,
premium or interest on any indebtedness or obligation for borrowed money or
for the deferred purchase price of property which indebtedness or obligation
in the aggregate exceeds Five Million Dollars ($5,000,000) and any such
failure shall continue for more than the period of grace, if any, specified
in the terms of such indebtedness or obligation, or otherwise agreed, and
shall not have been remedied or waived pursuant thereto; or any mortgage or
other security interest or charge present or future and created or assumed
by the Borrower shall become enforceable and the holder thereof shall take
steps to enforce the same; or
	 
	 	(i)	 	Change of Control. Other than as provided in the
Approved Joint Venture, the current shareholders of the Borrower cease to
retain 100% control of the Borrower, as set forth in Section 2.1(o); or
	 
	 	(j)	 	The Vessel. After the Delivery Date the Borrower
ceases to retain its ownership of the Vessel (other than in the case of a
sale or Total Loss of the Vessel, the proceeds from which are applied in
accordance with Section 5.3) or, without the prior written consent of the
Agent, the registration or flag of the Vessel is changed; provided,
however, the Borrower may transfer ownership of the Vessel to the
Operating Entity, another wholly owned Subsidiary or an affiliated company
as part of the Approved Joint Venture, provided that such Subsidiary or
affiliated company assumes the Borrower’s obligations hereunder and under
the relevant Security Documents upon such transfer on terms and conditions
satisfactory to the Agent; or
	 
	 	(k)	 	Bankruptcy; Reorganization. The Borrower
commences any proceedings relating to any substantial portion of its
properties under

46

 

	 	 	 	any reorganization, arrangement or readjustment of debt, dissolution,
winding up, adjustment, composition, or bankruptcy or equivalent
proceedings under any liquidation law or statute of any jurisdiction,
whether now or hereafter in effect (a “Proceeding”), or there is commenced
against any thereof any Proceeding and such Proceeding remains undismissed
or unstayed for a period of sixty (60) days; or any receiver, trustee,
liquidator, or sequestrator of, or for, the Borrower or any substantial
portion of its properties is appointed and is not discharged within a
period of sixty (60) days; or the Borrower by any act indicates consent to
or approval of or acquiescence in any Proceeding or the appointment of any
receiver, trustee, liquidator, or sequestrator of, or for, itself or any
substantial portion of its property; or

	 	(l)	 	Inability to Pay Debts. The Borrower is unable
to pay or admits its inability to pay its debts as they become due or if a
moratorium shall be declared in respect of any indebtedness of the Borrower;
or
	 
	 	(m)	 	Cessation of Operations. The Borrower ceases its
operations, sells or otherwise disposes of all or substantially all of its
assets (other than in the case of a sale or Total Loss of the Vessel, the
proceeds from which are applied in accordance with Section 5.3 or as
contemplated by clause (j) above); or
	 
	 	(n)	 	Total Loss of the Vessel. The Vessel shall
become a Total Loss unless such loss is fully covered by insurance (as
provided in the Mortgage) assigned to the Security Trustee; or
	 
	 	(o)	 	Material Adverse Change. A material adverse
change shall, in the reasonable opinion of the Majority Lenders, occur with
respect to the financial condition or operations of the Borrower; or
	 
	 	(p)	 	Cancellation or Termination of Sponsor Purchase
Agreement or Contribution Agreement. The Sponsor Purchase Agreement or
Contribution Agreement have been repudiated, cancelled, materially changed
or it has been terminated for any reason without the prior written consent
of the Majority Lenders; or
	 
	 	(q)	 	Bareboat Charter Default. The Borrower or the
Operating Entity defaults in the performance of any material term, covenant
or agreement contained in the Bareboat Charter or any other instrument,
document or agreement delivered in connection therewith.

47

 

then the Lenders’ obligation to make the Facilities available shall cease and the Agent shall, upon
instructions of the Majority Lenders, by notice to the Borrower, declare any amount of the
Facilities then outstanding, accrued interest and any other sums payable by the Borrower hereunder,
under the Notes or under the Security Documents due and payable whereupon the same shall forthwith
be due and payable without presentment, demand, protest, or notice of any kind, all of which are
hereby expressly waived; provided, that upon the happening of an event specified in subsections (k)
or (l) of this Section 8.1 with respect to the Borrower, the Notes shall be immediately due and
payable without declaration or other notice to the Borrower.

     8.2 Indemnity. The Borrower shall indemnify the Agent, the Security Trustee and each
Lender against any losses or costs or expenses (including legal expenses on a full indemnity basis)
which the Agent, the Security Trustee or any Lender sustains or incurs as a consequence of any
default hereunder, under the Notes or the Security Documents including (but without limitation) all
losses incurred in liquidating or re-employing fixed deposits made by third parties for funds
acquired to effect or maintain the Facilities or any part thereof.

     8.3 Application of Moneys. All moneys received by the Agent, the Security Trustee or
any Lender under or pursuant to this Agreement, the Notes or any of the Security Documents after
the happening of any Event of Default or under 5.3 (except as otherwise provided in any Security
Document) shall be applied by the Agent, in its discretion, in the following manner:

	 	(a)	 	first, in or towards the payment or reimbursement of any
expenses or liabilities incurred by the Agent or the Security Trustee in
connection with the ascertainment, protection or enforcement of their
respective rights and remedies hereunder and under the Notes and under the
Security Documents;
	 
	 	(b)	 	second, in or towards payment of all other sums which may
be owing to the Agent, the Security Trustee or the Lenders under this
Agreement, the Notes and the Security Documents or any of them;
	 
	 	(c)	 	third, in or towards (i) payment of any interest owing in
respect of the Senior Term Loan and the Senior Revolver then outstanding
and, if applicable, (ii) satisfaction pro rata of any and all amounts of
interest payable to the Hedging Counterparties in connection with the Senior
Facility Hedging Agreements;
	 
	 	(d)	 	fourth, in or towards (i) repayment of the principal
amount of the Senior Facility then outstanding, and if applicable,
(ii) satisfaction pro rata of the Hedging Exposure of each of the Hedging
Counterparties in connection with the Senior Facility Hedging Agreements;

48

 

	 	(e)	 	fifth, in or towards (i) payment of any interest owing
in respect of the Junior Term Loan and, if applicable, (ii) satisfaction pro
rata of any and all amounts of interest payable to the Hedging
Counterparties in connection with the Junior Term Loan Hedging Agreements;
	 
	 	(f)	 	sixth, in or towards (i) repayment of the principal
amount of the Junior Term Loan then outstanding and, if applicable
(ii) satisfaction pro rata of the Hedging Exposure of each of the Hedging
Counterparties in connection with the Junior Term Loan Hedging Agreements;
and
	 
	 	(g)	 	seventh, the surplus (if any) shall be paid to the
Borrower or to whomsoever else may be entitled thereto.

9. COVENANTS

     9.1 Affirmative Covenants. The Borrower hereby covenants and undertakes with the
Lenders that, from the date hereof and so long as any principal, interest or other moneys are owing
in respect of the Facilities or under this Agreement, the Notes, the Security Documents or any of
them that the Borrower will:

	 	(a)	 	Corporate Existence. Maintain, and will procure
that each other Security Party will maintain, its corporate existence and
remain duly organized and validly existing and in good standing under the
laws of the jurisdiction of its incorporation or formation, as the case may
be, and obtain and promptly renew from time to time, and promptly furnish
certified copies to the Agent of, all such authorizations, approvals,
consents and licenses as may be required under any applicable law or
regulation to enable it to perform its obligations under this Agreement, the
Notes and the Security Documents to which it is a party or required for the
validity or enforceability thereof or (in the case of the Borrower) required
to enable it to continue to own the Vessel, and it shall comply with the
terms of the same;
	 
	 	(b)	 	Performance of Obligations. Duly perform and
observe, and procure the observance and performance by all other parties
thereto (other than the Agent, the Security Trustee and the Lenders) of, the
terms of this Agreement, the Notes and the Security Documents;
	 
	 	(c)	 	Events of Default. Promptly inform the Agent of
any occurrence of which it becomes aware (i) which constitutes or, with the
giving of notice or lapse of time or both, would constitute, an Event of
Default or (ii) which, in its reasonable opinion, might adversely affect its
ability, or the ability of any other party thereto, to perform its
obligations under this Agreement, the Notes and the Security Documents or
any of them;

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	 	(d)	 	Further Acts. Without prejudice to Section 2 and
this Section 9.1, obtain every consent and do all other acts and things
which the Agent or the Majority Lenders may from time to time reasonably
request for the continued due performance of all its and each other Security
Party’s respective obligations under this Agreement, the Notes and the
Security Documents, including but not limited to obtaining documentation as
to the validity of the ownership structure of the Borrower and the Operating
Entity and the tax implications, if any, relating thereto;
	 
	 	(e)	 	Financial Information. Deliver to the Agent:

	 	(i)	 	as soon as available but not later than one
hundred twenty (120) days after the end of each fiscal year of the
Borrower and the Operating Entity, complete copies of the audited
consolidated financial reports thereof, all in reasonable detail, which
shall include at least a balance sheet as of the end of such year, an
income statement and a statement of sources and uses of funds for such
year which shall be audited by an Acceptable Accounting Firm;
	 
	 	(ii)	 	as soon as available, but not later than
forty-five (45) days after the end of each quarter of each fiscal year,
commencing at the end of the third quarter of 2007, of the Borrower and
the Operating Entity, quarterly interim balance sheets and profit and
loss statements thereof, certified to be true and complete by the chief
financial officer of Frontier Drilling USA Inc. on behalf of the
Borrower and the Operating Entity;
	 
	 	(iii)	 	concurrently with each delivery of financial
statements pursuant to subparagraphs (i) and (ii) of this sub-section
(e), a certificate of the chief financial officer of Frontier Drilling
USA Inc. on behalf of the Borrower and the Operating Entity stating
that he has reviewed the provisions of this Agreement, of the Notes and
of each of the Security Documents, and the performance or observance by
the Borrower, Frontier Drillships and the Operating Entity, as the case
may be, thereof, and either stating that to his knowledge no event has
occurred and no condition exists which constitutes or with the giving
of notice or lapse of time, or both, would constitute an Event of
Default under this Agreement or, if any such event has occurred or
condition exists specifying the nature and period of existence of such
event or condition of which he has knowledge and what action the
Borrower or any other Security, as the case may be, is taking or
proposes to take with respect thereto;

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	 	(iv)	 	on a monthly basis (commencing for the month of
January 2008), status overviews from the Borrower and the Technical
Advisor as to the status of the Construction as of the previous month,
and, on a quarterly basis (commencing at the end of the fourth quarter
of 2007) a detailed report of the same; provided, however, that in the
event that the Construction Plan and/or the Construction budget is not
being materially followed, the Agent has the right to require more
detailed reports on a monthly basis;
	 
	 	(v)	 	upon completion of the Construction, on a
quarterly basis, updates on the liquidity position, operational
performance and cash flow with respect to the Vessel; and
	 
	 	(vi)	 	such other statement or statements, lists of
property and accounts, budgets, reports and financial information with
respect to operation and management of the Vessel and information
regarding possible claims or disputes with respect to the Vessel,
certified to be true and complete by the chief financial officer of
Frontier Drilling USA Inc. on behalf of the Borrower, as the Agent may
from time to time request.

	 	(f)	 	Earnings Account, MDO Account and all other
Accounts. Upon the Delivery Date and at all times thereafter,
(i) establish and maintain an Earnings Account in the name of the Borrower
to be held with the Agent or another financial institution, and (ii) cause
the Operating Entity to establish and maintain a MDO Account to be held with
the Agent or another financial institution. If the Borrower establishes
additional Accounts, the Borrower shall execute a notice of pledge of
account (including the duly executed consent of the Depositary),
substantially in the form of Exhibit H hereto, and any such other pledge,
assignment or security agreement as the Agent shall require in order to
grant a valid, perfected security interest in the Account in favor of the
Security Trustee;
	 
	 	(g)	 	Compliance with Law. Procure that the Borrower
will, do, or cause to be done all things necessary to comply with all
material laws, and the rules and regulations thereunder, applicable to it
and any other Security Party, including, without limitation, those laws,
rules and regulations relating to employee benefit plans and environmental
matters;
	 
	 	(h)	 	Environmental Matters. Procure that the Borrower
will, promptly upon the occurrence of any of the following conditions,
provide to the Agent a certificate of the General Manager of the Borrower,
specifying in detail the nature of such condition and its proposed response
or the

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	 	 	 	response of its Environmental Affiliates: (i) its receipt or the receipt
by its Environmental Affiliates of any written communication whatsoever
that alleges that such Person is not in compliance with any applicable
environmental law or environmental approval, if such noncompliance could
reasonably be expected to have a material adverse effect on the business,
assets, operations, property or financial condition of the Borrower or any
other Security Party, as the case may be, (ii) knowledge by it, or any of
its Environmental Affiliates that there exists any Environmental Claim
pending or threatened against any such Person, which could reasonably be
expected to have a material adverse effect on the business, assets or
operations, property or financial condition of the Borrower or any other
Security Party, or (iii) knowledge by it of any release, emission,
discharge or disposal of any material that could form the basis of any
Environmental Claim against it or any of its Environmental Affiliates if
such Environmental Claim could reasonably be expected to have a material
adverse effect on the business, assets or operations, property or
financial condition of Borrower or any other Security Party. Upon the
written request of the Agent, it will submit to the Agent at reasonable
intervals, a report providing an update of the status of any issue or
claim identified in any notice or certificate required pursuant to this
subsection. For the purposes of this subsection, “Environmental
Affiliate” shall mean any Person or entity the liability of which for
Environmental Claims the Borrower or any other Security Party may have
assumed by contract or operation of law;
	 
	 	(i)	 	Litigation. As soon as the same is instituted
(or, to the knowledge of the Borrower, threatened), furnish or caused to be
furnished to the Agent details of any litigation, arbitration or
administrative proceedings against or involving (i) the Borrower or any
other Security Party which are likely to have a material adverse effect on
the Borrower or such Security Party, as the case may be, (ii) the Borrower
or any other Security Party which are likely to have a material adverse
effect on the Vessel or the operations of the Vessel or (iii) the Borrower
or any other Security Party which are likely to have a material adverse
effect on the ability of the Borrower or such Security Party, as the case
may be, to fulfill its obligations under the agreements for this
transaction;
	 
	 	(j)	 	ERISA Liability. Promptly upon learning of the
occurrence of any material liability of the Borrower or any ERISA Affiliate
pursuant to ERISA in connection with the termination of any Plan or
withdrawal or partial withdrawal from any multiemployer plan (as defined in
ERISA) or of a failure to satisfy the minimum funding standards of Section
412 of the Code or Part 3 of Title I of ERISA by any Plan in each case for

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	 	 	 	which the Borrower, the Pledgors or any ERISA Affiliate is plan
administrator (as defined in ERISA), furnish or cause to be furnished to
the Agent written notice thereof;
	 
	 	(k)	 	ISM Code and ISPS Code. After Delivery, (i) as
applicable, procure that each Operator will comply with and ensure that the
Vessel which it operates will comply with the requirements of the ISM Code
and the ISPS Code, including (but not limited to) the maintenance and
renewal of valid certificates pursuant thereto; and (ii) as applicable will
procure that the Operators will immediately inform the Agent if there is any
threatened or actual withdrawal of its DOC or the ISSC or the SMC in respect
of any Vessel; and (iii) will procure that the Operators will promptly
inform the Agent upon the issuance to the Borrower or Operators of a DOC and
the issuance to the Vessel of an SMC and an ISSC;
	 
	 	(l)	 	Vessel Insurance.

	 	(i)	 	During Construction, insure, or have the
Builders insure, and keep insured to the extent of its interest
therein, the Vessel with respect to comprehensive builder’s risks; and
	 
	 	(ii)	 	After completion of Construction, insure, and
keep insured, the Vessel in accordance with the provisions of the
Mortgage and more specifically the Vessel will be insured with respect
to:

	 	(a)	 	all risks hull and machinery
(including excess risks);
	 
	 	(b)	 	storm risks;
	 
	 	(c)	 	if the Vessel is to be operated
outside of the U.S. Gulf of Mexico, war risks covering,
inter alia the perils of confiscation,
expropriation, nationalization and seizure;
	 
	 	(d)	 	protection and indemnity risks
(including pollution risks, crew, cargo, contractual and removal
of wreck insurance);
	 
	 	(e)	 	mortgagee’s interest insurance
(which shall include additional perils pollution); and
	 
	 	(f)	 	either Business Interruption
Insurance covering a period of one hundred and eighty (180)
days, or a cash amount in an amount sufficient to cover at least
six (6) months of debt service has been deposited into the
Earnings Account.

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	 	(m)	 	Money Laundering. Upon the Agent’s request,
promptly supply, or procure the supply of, such documentation and other
evidence as is reasonably requested by the Agent in order for each Lender to
carry out and be satisfied with the results of all necessary “know your
client” or other checks which it is required to carry out in relation to the
transactions contemplated by this Agreement, the Notes and the Security
Documents and to the identity of any parties to the Security Documents
(other than the Lenders) and their directors and officers;
	 
	 	(n)	 	Technical Information. Upon Agent’s request,
promptly supply, or procure the supply of, a report of the technical
condition of the Vessel, at the expense of the Borrower; provided, however,
that the Borrower shall only be required to pay for two such reports during
any one calendar year;
	 
	 	(o)	 	Change of Control. Ensure that, other than as
contemplated by the Approved Joint Venture, the Borrower and the Operating
Entity shall continue to be owned as set forth in Section 2.1(o);
	 
	 	(p)	 	Ownership of Borrower. The Borrower shall insure
that if, as a result of the Approved Joint Venture, the ownership of the
Borrower or the Operating Entity changes from that set forth in Section
2.1(o), the new owner shall immediately become a Pledgor hereunder and shall
execute a pledge of its shares in the Borrower or the Operating Entity in
favor of the Security Trustee, substantially in the form of Exhibit G hereto;
	 
	 	(q)	 	Payment of Obligations. Except as contested in
good faith by the Borrower (for which adequate reserves have been maintained)
or which constitute Permitted Liens, the Borrower shall pay and discharge
(i) all taxes, fees, assessments and governmental charges or levies imposed
on it or upon its properties or assets prior to the date on which penalties
attach thereto, and all lawful claims for labor, materials and supplies,
which, if unpaid, might become a lien upon any properties or assets of the
Borrower, (ii) all lawful claims which, if unpaid would by law become a lien
upon its properties and (iii) Indebtedness, as and when due and payable;
	 
	 	(r)	 	Licenses. The Borrower shall obtain and maintain
all licenses, authorizations, consents, filings, exemptions, registrations
and other governmental approvals necessary in connection with (i) the
execution, delivery and performance of the Agreement and the Security
Documents, (ii) the consummation of the transactions therein contemplated or
(iii) the operation and conduct of its business and ownership of its
properties, the failure of which to obtain in the case of the matters
addressed in sub-

54

 

	 	 	 	clause (iii) could reasonably be foreseen to result in a material adverse
change on the Borrower’s business or prospects; and
	 
	 	(s)	 	Mortgage. The Borrower shall, as soon as possible
after taking delivery of the Vessel from Shanghai Shipyard Co., Ltd., execute
and deliver to the Agent the Mortgage and any Assignments, Account Pledges
and other Security Documents as the Agent shall require and such Uniform
Commercial Code Financing Statements (each in form and substance satisfactory
to the Agent ) with respect thereto as the Agent shall require and the
Borrower shall provide the Agent with evidence satisfactory to it and its
legal advisers that:

	 	(i)	 	the Vessel is in the sole and absolute
ownership of the Borrower, unencumbered save and except for the
Mortgage thereon in favour of the Security Trustee and Permitted Liens,
and is duly registered in the name of the Borrower under the flag of
the Republic of the Marshall Islands;
	 
	 	(ii)	 	the Vessel is provisionally classed with the
relevant Classification Society without any material outstanding
overdue recommendations affecting class;
	 
	 	(iii)	 	the Vessel is insured in accordance with the
provisions of the Mortgage and Section 9.1(l);
	 
	 	(iv)	 	the Mortgage is duly recorded under the laws of
the Republic of the Marshall Islands and constitutes a first preferred
mortgage lien on the Vessel under the laws of such jurisdiction; and
	 
	 	(v)	 	legal opinions, dated the date of the delivery
of the Vessel from Shanghai Shipyard Co., Ltd., each in for and
substance reasonably satisfactory to the Agent and its counsel from (a)
Gardere Wynne Sewell LLP, special counsel to the Security Parties
(other than Shell EP Offshore Ventures Limited) and the Operating
Entity, (b) Appleby, special Cayman Islands counsel to the Borrower and
(c) such other legal counsel as requested by the Agent.

     9.2 Negative Covenants. The Borrower hereby covenants and undertakes with the Lenders
that, from the date hereof and so long as any principal, interest or other moneys are owing in
respect of the Facilities or under this Agreement, the Notes, the Security Documents or any of
them, that the Borrower will not, nor will it permit any Subsidiary, to the extent applicable, to:

	 	(a)	 	Liens. Without prior consent of the Majority
Lenders, create, assume or permit to exist any mortgage, pledge, lien,
charge, encumbrance or

55

 

	 	 	 	any security interest whatsoever upon any of its property or other assets,
real or personal, tangible or intangible, whether now owned or hereafter
acquired except Permitted Liens and except pursuant to the Mortgage, the
Security Documents and liens in favor of the Lenders, the Security Trustee
or the Agent and except as permitted by the Security Documents; or
	 
	 	(b)	 	Change Business. Change the nature of its
business or commence any business other than the owning, operation and
chartering of the Vessel; or
	 
	 	(c)	 	Change Offices. Change its name or the location
of its chief executive office or the office where its corporate records are
kept or open any new office for the conduct of its business on less than
thirty (30) days prior written notice to the Agent; or
	 
	 	(d)	 	Loan; Investments. With respect to the Borrower,
except as provided in the Approved Joint Venture, make any Investment in any
Person, firm, corporation, joint venture or other entity, other than
wholly-owned Subsidiaries of the Borrower or the Operating Entity; or
	 
	 	(e)	 	Indebtedness. With respect to the Borrower,
except as contemplated by the Contribution Agreement and Permitted
Indebtedness, incur or suffer to exist any indebtedness other than the
Facilities, indebtedness secured by the Mortgage, trade credit under
industry standard terms or indebtedness permitted by the Security Documents;
or
	 
	 	(f)	 	Assume Obligations. Assume, guarantee, endorse
or otherwise become liable in connection with any obligation of any Person,
firm or entity, other than wholly-owned Subsidiaries of the Borrower or the
Operating Entity and except as contemplated by this Agreement, the Approved
Joint Venture or the Security Documents; or
	 
	 	(g)	 	Dividends/Repayment of Subordinated Debt. With
respect to the Borrower, declare any dividend, make any principal or
interest payment on any subordinated debt, or make any distribution of any
kind thereon; provided, however, after the Delivery Date,
the Borrower may declare dividends up to Five Hundred Thousand Dollars
($500,000) per quarter for a total of Two Million Dollars ($2,000,000) per
annum on a subordinated basis after debt service; or
	 
	 	(h)	 	Merge. Merge into or consolidate with any other
entity, except as permitted by the Approved Joint Venture; or

56

 

	 	(i)	 	Asset Sales. Except as contemplated by Section
8.1(j) above, sell or otherwise dispose of the Vessel or any other asset
which is substantial in relation to the assets of the Borrower taken as a
whole; or
	 
	 	(j)	 	Pay funds. Repay any loans or pay out any funds
(other than in the ordinary course of business) to any company other than
the Agent or the Lenders; or
	 
	 	(k)	 	Constitutional Instruments. Materially amend,
supplement or modify its constitutional instruments; or
	 
	 	(l)	 	Change Flag, Class or Operator. Without the
prior written consent of the Majority Lenders, change, or allow to be
changed, the Vessel’s flag, registration, classification society or Operator
from that in effect on the Delivery Date; or
	 
	 	(m)	 	Money Laundering. In connection with this
Agreement, the Notes or any of the Security Documents, contravene or permit
the Borrower or the Operating Entity to contravene, any law, official
requirement or other regulatory measure or procedure implemented to combat
“money laundering” (as defined in Article 1 of the Directive (91/308/EEC) of
the Council of the European Communities) and comparable United States
Federal and state laws; or
	 
	 	(n)	 	No Acquisitions. Acquire any additional vessels
or any other assets (other than materials in connection with the
construction of the Vessel or a reasonable amount of capital expenditure
calculated on a yearly basis) without the prior written consent of the
Majority Lenders; or
	 
	 	(o)	 	No Material Amendments. (i) Materially amend the
Construction Contracts or the Construction Plan without the prior written
approval of the Majority Lenders and review by the Technical Advisor; or
(ii) materially amend the Bareboat Charter, Approved Joint Venture, MDO
Contract, Contribution Agreement, Sponsor Purchase Agreement or any Security
Document without the prior written approval of the Majority Lenders;
	 
	 	(p)	 	Capital Expenditures. The Borrower shall not be
permitted to make any Capital Expenditures other than Capital Expenditures
relating to the Vessel. All Capital Expenditures shall be subject to the
prior written approval of the Lenders, such approval to be subject to the
sole discretion of the Lenders. 

57

 

10. ACCOUNTS

     10.1 Earnings Account, MDO Account and all other Accounts. (a) The Borrower shall
establish and maintain an account in the name of the Borrower (the “Earnings Account”) with the
Agent or another financial institution acceptable to the Agent, into which the Borrower shall cause
all earnings relating to the Bareboat Charter to be paid. The Borrower shall cause the Operating
Entity to establish and maintain an account in the name of the Operating Entity (the “MDO Account”)
with the Agent or another financial institution acceptable to the Borrower, into which the
Operating Entity shall cause all earnings relating to the MDO Contract to be paid. The Borrower
agrees that the MDO Account shall be with a financial institution acceptable to the Agent.

          (b) Upon establishing the Earnings Account, the Borrower shall deliver to the Agent a duly
executed Pledge of Earnings Account and Notice of Pledge of Earnings Account (including the duly
executed consent of the Depositary), and any such other pledge, assignment or security agreement as
the Agent shall require in order to grant a valid, perfected security interest in the Earnings
Account in favor of the Security Trustee. Upon establishing the MDO Account (a) the Operating
Entity shall, pursuant to the terms of the Bareboat Charter, deliver to the Borrower a duly
executed Collateral Pledge and related notices (including, with respect to any Account Pledge, the
duly executed consent of the Depositary) and any such other pledge, assignment or security
agreement as shall be required in order to grant a valid, perfected security interest in the MDO
Account in favor of the Borrower and (b) the Borrower shall deliver to the Security Trustee a duly
executed Assignment of Collateral Pledge (including, with respect to any Account Pledge, the duly
executed consent of the Depositary) and any such other pledge, assignment or security agreement as
the Agent shall require in order to grant a valid, perfected security interest in the MDO Account
in favor of the Security Trustee.

          (c) The Borrower shall be permitted to establish up to six (6) additional Accounts,
provided the Borrower execute a notice of pledge of account (including the duly executed
consent of the Depositary), substantially in the form of Exhibit H hereto, and any such other
pledge, assignment or security agreement as the Agent shall require in order to grant a valid,
perfected security interest in the Account in favor of the Security Trustee. All moneys of the
Borrower on deposit in the Earnings Account or any other Account shall be collateral security for
the payment and performance by the Borrower of its obligations hereunder, under the Notes, and
under the Security Documents and the Borrower, by its execution of this Agreement, hereby pledge,
assign and grant to the Security Trustee a security interest in such moneys. The Security Trustee
shall retain all Assigned Moneys until all of the Borrower’s obligations hereunder shall have been
paid and discharged in full, provided, however, that so long as no Event of Default has occurred or
is continuing, the Borrower may from time to time withdraw from the Earnings Account or any other
Account amounts required by the Borrower to pay expenses and taxes related to the operation,
insurance, maintenance and repair of the Vessel, including taxes on themselves, on their earnings
and on their distributions, amounts necessary to service the Facilities, and for other purposes
permitted by this Agreement. The Security Trustee may debit

58

 

the relevant Account in order to pay the Agent, the Security Trustee and the Lenders any
amounts due thereto hereunder if the Borrower fails to make such payments.

     10.2 Application of Earnings Account, MDO Account and all other Accounts. Upon the
occurrence of an Event of Default all moneys then held in the Earnings Account, the MDO Account, or
any other Account or account and any Assigned Moneys thereafter received by the Agent shall be
retained by the Agent as collateral security for the Facilities to be applied by the Agent in the
manner set forth in Section 8.3.

11. ASSIGNMENT AND CERTIFICATIONS

     11.1 Benefit of Agreement. This Agreement shall be binding upon, and inure to the
benefit of, the Borrower, the Lenders, the Arranger, the Security Trustee and the Agent and their
respective successors and assigns, except that the Borrower may not assign any rights or
obligations hereunder without the prior written consent of each of the Lenders, not to be
unreasonably withheld or delayed (which consent the Lenders shall be at full liberty to withhold).
In giving any consent as aforesaid to any assignment by the Borrower, the Lenders shall be entitled
to impose such conditions as it shall deem appropriate.

     11.2 Assignment by the Lenders. The Lenders may assign the whole or any part of their
respective rights or obligations under this Agreement to any subsidiary or holding company thereof
or, with the consent of the Borrower, to any other bank or financial institution whatsoever, with
such consent not to be unreasonably withheld; provided that such assignment shall not give
rise to liability under Section 12.1 or Section 12.2; provided further that no assignment of a
Lender’s rights to payment of principal, stated interest, or other rights hereunder shall be
effective unless and until properly recorded in the Register under Section 11.4.

     11.3 Syndication. Provided the Agent remains the agent for such other bank or
financial institution, the Agent may syndicate or grant participations in respect of the Facilities
to any other bank or financial institution with the consent of the Borrower not to be unreasonably
withheld; provided that such syndication shall not give rise to liability under Section
12.1 or Section 12.2

     11.4 Register. The Agent, acting solely for this purpose as an agent of the
Borrower, shall maintain at its offices in The Hague, The Netherlands, a copy of each assignment
agreement by a Lender delivered to the Agent and a register for the recordation of the names and
addresses of the Lenders, and the Commitments of, and principal amounts of the Loans owing to, each
Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the
Register shall be conclusive, and the Borrower, the Agent and the Lenders shall treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower and any Lender, at any reasonable time and from time to
time upon reasonable prior notice.

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     11.5 Status of Lenders. Prior to becoming a Lender hereunder, each Foreign Lender
shall establish an exemption from withholding tax under the law of the jurisdiction in which the
Borrower is resident for tax purposes and the United States, or any treaty to which such
jurisdictions are a party, with respect to payments hereunder. Each Foreign Lender shall deliver
to the Borrower (with a copy to the Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower or the Administrative Agent, such properly completed and
executed documentation prescribed by applicable law as would permit such payments to be made
without withholding. In addition, any Lender, if requested by the Borrower or the Administrative
Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested
by the Borrower or the Administrative Agent as will enable the Borrower or the Agent to determine
whether or not such Lender was subject to backup withholding or information reporting requirements.
Furthermore, without limiting any of the foregoing, any Foreign Lender shall deliver to the
Borrower and the Agent (in such number of copies as shall be requested by the recipient) on or
prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time
to time thereafter upon the request of the Borrower or the Administrative Agent, but only if such
Foreign Lender is legally entitled to do so), whichever of the following would be applicable if the
Borrower were a resident of the United States:

	 	(a)	 	duly completed copies of Internal Revenue Service Form
W-8BEN claiming eligibility for benefits of an income tax treaty to which
the United States of America is a party,
	 
	 	(b)	 	duly completed copies of Internal Revenue Service Form
W-8ECI,
	 
	 	(c)	 	in the case of a Foreign Lender claiming the benefits of
the exemption for portfolio interest under section 881(c) of the Code, (x) a
certificate to the effect that such Foreign Lender is not (A) a “bank”
within the meaning of section 881 (c)(3)(A) of the Code, (B) a “10 percent
shareholder” of the Borrower within the meaning of section 881 (c)(3)(B) of
the Code, or (C) a “controlled foreign corporation” described in section 881
(c)(3)(C) of the Code and (y) duly completed copies of Internal Revenue
Service form W-8BEN, or
	 
	 	(d)	 	any other form prescribed by applicable law as a basis
for claiming exemption from or a reduction in United States Federal
withholding tax duly completed together with such supplementary
documentation as may be prescribed by applicable law to permit the Borrower
to determine the withholding or deduction required to be made.

     11.6 Treatment of Certain Refunds. If the Agent or a Lender reasonably determines, in
its sole discretion, that it has received a refund of any Taxes as to which it has been indemnified
by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this
Section, it shall pay to the Borrower an amount equal to such refund

60

 

(but only to the extent of indemnity payments made, or additional amounts paid by the Borrower
under this Section with respect to the Taxes giving rise to such refund), net of all reasonable
out-of-pocket expenses of the Agent or such Lender, as the case may be, and without interest (other
than any interest paid by the relevant taxing authority with respect to such refund), provided that
the Borrower, upon the request of the Agent or such Lender, agrees to repay the amount paid over
to the Borrower (plus any penalties, interest or other charges imposed by the relevant taxing
authority) to the Agent or such Lender in the event the Agent or such Lender is required to repay
such refund to such taxing authority. This paragraph shall not be construed to require the Agent
or any Lender to make available its tax returns (or any other information relating to its taxes
that it deems confidential) to the Borrower or any other Person.

12. ILLEGALITY, INCREASED COST, NON-AVAILABILITY, ETC.

     12.1 Illegality. In the event that by reason of any change in any applicable law,
regulation or regulatory requirement or in the interpretation thereof any of the Lenders concludes
that it has become unlawful for such Lender to maintain or give effect to its obligations as
contemplated by this Agreement, such Lender shall inform the Agent and the Borrower to that effect,
whereafter the liability of such Lender to make its Commitment available shall forthwith cease and
the Borrower shall within thirty (30) days after receipt of written notice prepay the then
outstanding portion of such Lender’s Commitment immediately and in accordance with and subject to
the provisions of Section 12.5. In any such event, but without prejudice to the aforesaid
obligations of the Borrower to prepay the Commitment, the relevant Borrower and such Lender shall
negotiate in good faith with a view to agreeing on terms for making its portion of the Commitment
available from another jurisdiction or otherwise restructuring the Commitment on a basis which is
not unlawful.

     12.2 Increased Costs. If any change in applicable law, regulation or regulatory
requirement or in the interpretation or application thereof by any governmental or other authority,
shall:

	 	(a)	 	subject any Lender to any Taxes with respect to its
payments under the Facilities; or
	 
	 	(b)	 	change the basis of taxation to any Lender of payments of
principal or interest or any other payment due or to become due pursuant to
this Agreement (other than a change in the basis effected by the
jurisdiction of the organization of such Lender or such other jurisdiction
where the Facilities may be payable or such Lender may be doing business),
or
	 
	 	(c)	 	impose, modify or deem applicable any reserve
requirements or require the making of any special deposits against or in
respect of any assets or liabilities of, deposits with or for the account
of, or loans by, any Lender, or

61

 

	 	(d)	 	impose on any Lender any other condition affecting the
Facilities, and the result of the foregoing is either to increase the cost
to a Lender of making available or maintaining the Facilities or any part
thereof or to reduce the amount of any payment received by such Lender, then
and in any such case if such increase or reduction in the opinion of the
Lender materially affects the interests of the Lender:

	 	(i)	 	such Lender shall notify the Borrower of the
happening of such event,
	 
	 	(ii)	 	the Borrower shall forthwith upon demand pay to
such Lender such amount as the Lender certifies to be necessary to
compensate the Lender for such additional cost or such reduction, and
	 
	 	(iii)	 	any such demand as is referred to in subclause
(b) of this Section 12.2 may be made by such Lender at any time before
or after the Drawdown Date and at any time before any repayment of any
portion, but not all, of the Facilities then outstanding; provided,
however, that before making any such demand such Lender agrees to use
reasonable efforts to designate a different lending office for the
Facilities if the making of such designation would avoid the need for,
or reduce the amount of, such increased cost, and would not, in the
reasonable judgment of such Lender be disadvantageous to such Lender.

PROVIDED, however, that the foregoing provisions shall not be applicable in the event that
increased costs to the Lender result from the exercise by a Lender of its right to assign its
rights or obligations under Section 11 or are otherwise attributable to acts of a Lender.

     12.3 Interest Rate Determination. If the Agent shall determine that, by reason of
circumstances affecting the London Interbank Market generally, adequate and reasonable means do not
or will not exist for ascertaining the Applicable Rate for the Facilities for any Interest Period,
the Agent shall give notice of such determination to the Borrower. The Borrower and the Agent
shall then negotiate in good faith in order to agree upon a mutually satisfactory interest rate
and/or Interest Period to be substituted for those which would otherwise have applied under this
Agreement. If the Borrower and the Agent are unable to agree upon such a substituted interest rate
and/or Interest Period within thirty (30) days of the giving of such determination notice, the
Agent shall set an interest rate and Interest Period to take effect from the expiration of the
Interest Period in effect at the date of determination, which rate shall be equal to the Applicable
Margin plus the cost to the Lenders (as noticed by the Lenders to the Agent and as certified by the
Agent to the Borrower) of funding the Facilities. In the event the state of affairs referred to in
this Section 12.3 shall extend beyond the end of such Interest Period, the foregoing procedure
shall continue to apply until circumstances are such that the Applicable Rate may be determined
pursuant to Section 6.

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     12.4 Agent’s Certificate. A certificate or determination notice of the Agent as to
any of the matters referred to in this Section 12 shall, save for any manifest error, be conclusive
and binding on the Borrower.

     12.5 Compensation for Losses. Where the Facilities or any portion thereof are to be
prepaid by the Borrower pursuant to any of the foregoing provisions of this Section 12, the
Borrower shall simultaneously with such prepayment pay to the affected Lenders all accrued interest
to the date of actual payment and all other sums payable by the Borrower to the Agent, the Security
Trustee or the Lenders pursuant to this Agreement together with such amounts as may be certified by
the Agent to be necessary to compensate the Agent, the Security Trustee or the Lenders for any
loss, premium or penalties incurred or to be incurred by them on account of funds borrowed to make,
fund or maintain the Facilities or any part thereof for the remainder (if any) of the then current
Interest Period or Interest Periods but otherwise without penalty or premium.

13. CURRENCY INDEMNITIES

     13.1 Currency Conversion. If for the purpose of obtaining or enforcing a judgment in
any court in any country it becomes necessary to convert into any other currency (the “judgment
currency”) an amount due in Dollars under this Agreement, the Notes or any of the Security
Documents then the conversion shall be made, in the discretion of the Agent, at the rate of
exchange prevailing either on the date of default or on the day before the day on which the
judgment is given or the order for enforcement is made, as the case may be (the “conversion date”),
provided that the Lenders shall not be entitled to recover under this clause any amount in the
judgment currency which exceeds at the conversion date the amount in Dollars due under this
Agreement, the Notes or any of the Security Documents.

     13.2 Currency Indemnity. If there is a change in the rate of exchange prevailing
between the conversion date and the date of actual payment of the amount due, the Borrower shall
pay such additional amounts (if any) as may be necessary to ensure that the amount paid in the
judgment currency when converted at the rate of exchange prevailing on the date of payment will
produce the amount then due under this Agreement, the Notes or any of the Security Documents in
Dollars. Any excess over the amount due received or collected by the Lenders shall be remitted to
the Borrower.

     13.3 Additional Debt Due. Any amount due from the Borrower under Section 13.2 shall
be due as a separate debt and shall not be affected by judgment being obtained for any other sums
due under or in respect of this Agreement, the Notes or any of the Security Documents.

     13.4 Rate of Exchange. The term “rate of exchange” in this Section 13 means the rate
at which the Agent in accordance with its normal practices is able on the relevant date to purchase
Dollars with the judgment currency and includes any premium and costs of exchange payable in
connection with such purchase.

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14. FEES AND EXPENSES

     14.1 Fee Letter and Underwriting Letter. On or prior to the Initial Drawdown Date,
the Borrower shall pay to the Agent and the Lenders such fees as the parties have agreed pursuant
to each of the Fee Letter and the Underwriting Letter.

     14.2 Commitment Fee. The Borrower shall pay to the Agent on behalf of the Lenders
quarterly in arrears a commitment fee equal to 40% of the Applicable Margin per annum payable on
the average undrawn and uncancelled portion of the Facilities.

     14.3 Expenses. The Borrower agree to pay the Arrangers, the Agent, the Security
Trustee and the Lenders promptly (whether or not the Facilities or any part thereof are ever made
available hereunder) all reasonable costs, charges and expenses (not including overhead) incurred
by or on behalf of the Agent, the Security Trustee or the Lenders (including, without limitation,
external technical advisor, insurance advisor and legal fees on a full indemnity basis and
out-of-pockets expenses, inclusive of travel expenses thereof) in connection with the negotiation,
preparation, execution and enforcement or attempted enforcement of or the restructuring of the
Borrower’s obligations under this Agreement, the Note and the Security Documents or otherwise in
connection with the Facilities, as well as in connection with any supplements, amendments, waivers
or consents relating thereto.

15. APPLICABLE LAW AND JURISDICTION

     15.1 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW
(EXCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

     15.2 Submission to Jurisdiction. The Borrower hereby (i) irrevocably submits to the
non-exclusive jurisdiction of the courts of the State of New York and of the United States District
Court for the Southern District of New York in any action or proceeding brought against it by the
Agent, the Security Trustee or the Lenders under this Agreement, the Notes, the Security Documents
or any instrument delivered hereunder or thereunder, (ii) agrees that all claims in respect of any
such action or proceeding may be heard and determined in such courts, (iii) irrevocably waives (to
the extent permitted by applicable law) any objection which it now or hereafter may have to the
laying of venue of any such action or proceeding brought in any of the foregoing courts, and any
objection on the ground that any such action or proceeding in any such court has been brought in an
inconvenient forum and (iv) agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other
manner permitted by law. The Borrower hereby irrevocably appoints, for the duration of this
Agreement and until the Facility has been repaid in full, C T Corporation System, with a place of
business at 111 Eighth Avenue, New York, New York 10011, its attorney-in-fact and agent for service
of summons or other legal process thereon,

64

 

which service may be made by serving a copy of any summons or other legal process in any such
action or proceeding on such agent and such agent is hereby authorized and directed to receive and
forward by and on behalf of the Borrower, service of summons and other legal process in any such
action or proceeding against it. The service, as herein provided, of such summons or other legal
process in any such action or proceeding shall be deemed personal service and accepted by the
Borrower as such, and shall be legal and binding upon the Borrower for all the purposes of any such
action or proceeding. Final judgment (a certified or exemplified copy of which shall be conclusive
evidence of the fact and of the amount of any indebtedness of the Borrower to the Lenders) against
the Borrower in any such legal action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment. In the event that the Borrower shall not be
conveniently available for such service, the Borrower hereby irrevocably appoints the Person who
then is the Secretary of State of the State of New York as such attorney-in-fact and agent.
Notwithstanding anything herein to the contrary, the Agent, the Security Trustee or the Lenders may
bring any legal action or proceeding in any other appropriate jurisdiction.

     15.3 WAIVER OF JURY TRIAL. IT IS MUTUALLY AGREED BY AND AMONG THE BORROWER, THE
AGENT, THE SECURITY TRUSTEE AND THE LENDERS THAT EACH OF THEM HEREBY WAIVES TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO AGAINST ANY OTHER PARTY HERETO ON
ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT, THE NOTES OR THE
SECURITY DOCUMENTS.

16. THE AGENT

     16.1 Appointment of Agent. Each of the Lenders hereby irrevocably appoints and
authorizes the Agent (which for purposes of this Section 16 shall be deemed to include the Agent
acting in its capacity as Security Trustee pursuant to Section 17) to take such action as agent on
its behalf and to exercise such powers under this Agreement, the Notes, and the Security Documents
as are delegated to the Agent by the terms hereof and thereof. Neither the Agent nor any of its
directors, officers, employees or agents shall be liable for any action taken or omitted to be
taken by it or them under this Agreement, the Notes, or the Security Documents or in connection
therewith, except for its or their own gross negligence or willful misconduct.

     16.2 Distribution of Payments. Whenever any payment is received by the Agent from the
Borrower for the account of the Lenders, or any of them, whether of principal or interest on the
Note, commissions, fees, or otherwise, it will thereafter cause to be distributed on the same day
if received before 11 a.m. New York time, or on the next day if received thereafter, like funds
relating to such payment ratably to the Lenders according to their respective interests in the
Facilities unless otherwise specified in the Fee Letter or the Underwriting Letter, in each case to
be applied according to the terms of this Agreement or pursuant to the terms of the Fee Letter or
the Underwriting Letter.

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     16.3 Assume Receipt. If and whenever any amount is to be paid to the Agent for the
account of another Person, the Agent may assume that that amount will be paid when due and the
Agent may (but shall not be obliged to) make that amount available to the Person for whose account
it is to be paid. If that amount is not paid to the Agent when due, the Person to whom that amount
was so made available shall on request refund that amount to the Agent together with interest
thereon sufficient to compensate the Agent for the cost of making available that amount up to the
date of such refund and the Person by whom that amount was payable shall indemnify each of the
Agent and the Person to whom that amount was made available by the Agent against all costs,
expenses, losses and liabilities paid, suffered or incurred by the Agent or that Person as a
consequence of that amount not having been paid when due.

     16.4 Holder of Interest in Note. The Agent may treat each Lender as the holder of all
of the interest of such Lender in the Notes, as the case may be, until written notice of transfer,
in form and substance satisfactory to the Agent, signed by such Lender shall have been filed with
the Agent.

     16.5 No Duty to Examine, etc. The Agent shall not be under any duty to examine or
pass upon the validity, effectiveness or genuineness of this Agreement, the Notes or the Security
Documents or any instrument, document or communication furnished pursuant to this Agreement or in
connection therewith or in connection with any Notes or Security Document, and the Agent shall be
entitled to assume that the same are valid, effective and genuine, have been signed or sent by the
proper parties and are what they purport to be.

     16.6 Agent as Lender. With respect to that portion of the Facilities made available
by it, the Agent shall have the same rights and powers hereunder as any other Lenders and may
exercise the same as though it were not the Agent, and the term “Lender” or “Lenders” shall include
the Agent in its capacity as a Lender. The Agent and its affiliates may accept deposits from, lend
money to and generally engage in any kind of business with, the Borrower, as if it were not the
Agent.

     16.7 Acts of the Agent. The Agent shall have duties and discretion, and shall act as
follows:

	 	(a)	 	Obligations of Agent. The obligations of the
Agent under this Agreement, under the Notes, and under the Security
Documents are only those expressly set forth herein and therein.
	 
	 	(b)	 	No Duty to Investigate. The Agent shall not at
any time be under any duty to investigate whether an Event of Default, or an
event which with the giving of notice or lapse of time, or both, would
constitute an Event of Default, has occurred or to investigate the
performance of this Agreement or any of the Security Documents by the
Borrower.

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	 	(c)	 	Agent’s Discretion. The Agent shall be entitled
to use its discretion with respect to exercising or refraining from
exercising any rights which may be vested in it by, and with respect to
taking or refraining from taking any action or actions which it may be able
to take under or in respect of, this Agreement, the Notes, and the Security
Documents, unless the Agent shall have been instructed by the Majority
Lenders to exercise such rights or to take or refrain from taking such
action; provided, however, that the Agent shall not be required to take any
action which exposes the Agent to personal liability or which is contrary to
this Agreement or applicable law.
	 
	 	(d)	 	Instructions of Majority Lenders. The Agent
shall in all cases be fully protected in acting or refraining from acting
under this Agreement, under the Notes or under any Security Document in
accordance with the instructions of the Majority Lenders, and any action
taken or failure to act pursuant to such instructions shall be binding on
all of the Lenders.

     16.8 Assumption re: Events of Default. Except as otherwise provided in
Section 16.14, the Agent shall be entitled to assume that no Event of Default, or event which with
the giving of notice or lapse of time, or both, would constitute an Event of Default, has occurred
and is continuing, unless the Agent has been notified by the Borrower of such fact, or has been
notified by a Lender that such Lender considers that an Event of Default or such an event
(specifying in detail the nature thereof) has occurred and is continuing. In the event that the
Agent shall have been notified by the Borrower or any Lender in the manner set forth in the
preceding sentence of any Event of Default or of an event which with the giving of notice or lapse
of time, or both, would constitute an Event of Default, the Agent shall notify the Lenders and
shall take action and assert such rights under this Agreement, under the Notes, and under Security
Documents as the Majority Lenders shall request in writing.

     16.9 Limitation of Liability. Neither the Agent nor any of the Lenders shall be under
any liability or responsibility whatsoever:

	 	(a)	 	To the Borrower or any other Person or entity as a consequence
of any failure or delay in performance by, or any breach by, any other Lenders
or any other Person of any of its or their obligations under this Agreement,
the Notes or under any Security Document;
	 
	 	(b)	 	To any Lender or Lenders, as a consequence of any failure or
delay in performance by, or any breach by, the Borrower of any of its
obligations under this Agreement, under the Notes, or under the Security
Documents; or

67

 

	 	(c)	 	To any Lender or Lenders, for any statements, representations
or warranties contained in this Agreement, the Notes, in any Security Document
or any Document or instrument delivered in connection with the transaction
hereby contemplated; or for the validity, effectiveness, enforceability or
sufficiency of this Agreement, the Notes, or any Security Document or any
document or instrument delivered in connection with the transactions hereby
contemplated.

     16.10 Indemnity. The Lenders agree to indemnify the Agent (to the extent not
reimbursed by the Borrower), pro rata according to the respective amounts of their Commitments,
from and against any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever (including
legal fees and expenses incurred in investigating claims and defending itself against such
liabilities) which may be imposed on, incurred by or asserted against, the Agent in any way
relating to or arising out of this Agreement, the Notes, or any Security Document, any action taken
or omitted by the Agent thereunder or the preparation, administration, amendment or enforcement of,
or waiver of any provision of, this Agreement, the Notes, or any Security Document, except that no
Lenders shall be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Agent’s
gross negligence or willful misconduct.

     16.11 Consultation with Counsel. The Agent may consult with legal counsel selected by
it and shall not be liable for any action taken, permitted or omitted by it in good faith in
accordance with the advice or opinion of such counsel.

     16.12 Resignation. The Agent may resign at any time by giving 60 days written notice
thereof to the Lenders and the Borrower. Upon any such resignation, the Lenders shall have the
right to appoint a successor Agent reasonably acceptable to the Borrower. If no successor Agent
shall have been so appointed by the Lenders and shall have accepted such appointment within 60 days
after the retiring Agent’s giving notice of resignation, then the retiring Agent may, on behalf of
the Lenders, appoint a successor Agent which shall be a bank or trust company of recognized
standing. The appointment of any successor Agent shall be subject to the prior written consent of
the Borrower, such consent not be unreasonably withheld. After any retiring Agent’s resignation as
Agent hereunder, the provisions of this Section 16 shall continue in effect for its benefit with
respect to any actions taken or omitted by it while acting as Agent.

     16.13 Lender Representations. Each Lender represents and warrants to the Borrower,
each other Lender and the Agent that:

	 	(a)	 	In making its decision to enter into this Agreement and to make
its portion of the Facilities available hereunder, it has independently taken
whatever steps it considers necessary to evaluate the financial condition and
affairs of the Borrower, that it has made an independent credit judgment and
that

68

 

	 	 	 	it has not relied upon any statement, representation or warranty by any
other Lender or the Agent;
	 
	 	(b)	 	So long as any portion of its Commitment remains outstanding,
it will continue to make its own independent evaluation of the financial
condition and affairs of the Borrower; and
	 
	 	(c)	 	It is not an ERISA plan and is not investing ERISA plan assets.

     16.14 Notification of Event of Default. The Agent hereby undertakes to promptly
notify the Lenders, and the Lenders hereby promptly undertake to notify the Agent and the other
Lenders, of the existence of any Event of Default which shall have occurred and be continuing of
which the Agent or any Lender has actual knowledge.

     16.15 No Agency or Trusteeship if NIBC only Lender. If at any other time NIBC is the
only Lender, all references to the terms “Agent” and “Security Trustee” shall be deemed to be
references to NIBC as Lender and not as agent or security trustee.

17. THE SECURITY TRUSTEE

     17.1 Appointment of Security Trustee. Each of the Lenders irrevocably appoints the
Security Trustee as security trustee on their respective behalf with regard to the (i) security,
powers, rights, titles, benefits and interests (both present and future) constituted by and
conferred on the Lenders or any of them or for the benefit thereof under or pursuant to this
Agreement, the Note or any Security Documents (including, without limitation, the benefit of all
covenants, undertakings, representations, warranties and obligations given, made or undertaken to
any Lender in this Agreement, the Notes or any Security Document), (ii) all moneys, property and
other assets paid or transferred to or vested in any Lender or any agent of any Lender or received
or recovered by any Lender or any agent of any Lender pursuant to, or in connection with, this
Agreement, the Notes or the Security Documents whether from the Borrower or any other Person and
(iii) all money, investments, property and other assets at any time representing or deriving from
any of the foregoing, including all interest, income and other sums at any time received or
receivable by any Lender or any agent of any Lender in respect of the same (or any part thereof).
The Security Trustee hereby accepts such appointment.

18. NOTICES AND DEMANDS

     18.1 Addresses. Every notice or demand required or permitted under this Agreement
shall be in writing and may be given or made by facsimile, mail, prepaid overnight courier or other
means, sent as follows:

If to the Security Parties:

BULLY 1, LTD.

Appleby Trust (Cayman) Ltd.

69

 

Clifton House

75 Fort Street

P.O. Box 1350,

Grand Cayman KY1-1108

Cayman Islands

Facsimile No.: +1-345-949-4901

Attention: The Secretary

with a copy to:

FRONTIER DRILLING USA, INC.

1000 Louisiana, Suite 1210

Houston, TX 77002

Telephone No.: +1-713-481-7500

Attention: John Stevenson

If to the Agent or the Security Trustee:

NIBC Bank N.V.

Carnegieplein 4, 2517 KJ

The Hague, The Netherlands

Attention: Credit & Agency Services

Facsimile No.: +31-70-342-5366

If to the Lenders:

            To their respective addresses set forth on Schedule 1 hereto.

     18.2 Receipt. Every notice or demand required or permitted under this Agreement shall
except so far as otherwise expressly provided by this Agreement, be deemed to have been received in
the case of a facsimile at the time of dispatch thereof (provided that if the date of dispatch is
not a Banking Day in the locality of the party to whom such notice or demand is sent it shall be
deemed to have been received on the next following Banking Day in such locality), in the case of a
letter delivered by hand or by courier, at the time of delivery and, in the case of a letter, on
the expiration of five (5) days after the same is put into the mail.

19. MISCELLANEOUS

     19.1 Time of Essence. Time is of the essence of this Agreement but no failure or
delay on the part of any Lender to exercise any power or right under this Agreement shall operate
or be construed as a waiver thereof, nor shall any single or partial exercise by such Lender of any
power or right hereunder preclude any other or further exercise thereof or the

70

 

exercise of any other right. The remedies provided herein are cumulative and are not
exclusive of any remedies provided by law.

     19.2 Severability. In case any one or more of the provisions contained in this
Agreement, the Notes or any of the Security Documents should be invalid, illegal or unenforceable
in any respect under any law applicable in any relevant jurisdiction, the validity, legality and
enforceability of the remaining provisions herein or therein contained shall not in any way be
affected or impaired thereby.

     19.3 References. References herein to Sections, Schedules and Exhibits are to be
construed as references to sections of, exhibits to, and schedules to, this Agreement, unless the
context otherwise requires.

     19.4 Further Assurances. The Borrower agrees that if this Agreement, the Notes or any
of the Security Documents shall at any time be deemed by the Agent, the Security Trustee or the
Lenders for any reason insufficient in whole or in part to carry out the true intent and spirit
hereof or thereof, it will execute or cause to be executed such other and further assurances and
documents as in the opinion of the Agent, the Security Trustee or the Majority Lenders may be
required in order more effectively to accomplish the purposes of this Agreement, the Notes or any
of the Security Documents.

     19.5 Headings. In this Agreement, Section headings are inserted for convenience of
reference only and shall not be taken into account in the interpretation of this Agreement.

     19.6 Entire Agreement. This Agreement, the Underwriting Letter and the Reset Letter
constitute the entire agreement of the parties hereto concerning the Facility including all parties
added hereto pursuant to any assignment made pursuant to Section 11. This Agreement may be
executed in any number of counterparts, each of will shall be deemed an original, but all such
counterparts together shall constitute one and the same instrument. Any provision of this
Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is
signed by the Borrower and the Majority Lenders (and, if the rights or duties of the Agent or the
Security Trustee are affected thereby, by the Agent and/or the Security Trustee, as the case may
be); provided that no amendment or waiver shall, unless agreed in writing by all the Lenders,
(i) increase or decrease the Commitment of any Lender or subject any Lender to any additional
obligation, (ii) reduce the principal of or rate of interest on the Facilities or any fees
hereunder, (iii) postpone the date fixed for any payment of principal of or interest on the
Facilities or any fees hereunder or for any termination of any Commitment, (iv) amend Section 11,
(v) waive any condition precedent to the making of the Facilities, (vi) release any collateral or
(vii) amend or modify this Section 19.6 or otherwise change the percentage of the Commitments or of
the aggregate unpaid principal amount of the Facilities, or the number or category of Lenders which
shall be required for the Lenders or any of them to take any action under this Section or any other
provision of this Agreement.

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     19.7 WAIVER OF IMMUNITY. TO THE EXTENT THAT ANY SECURITY PARTY HAS OR HEREAFTER MAY
ACQUIRE ANY IMMUNITY FROM SUIT, JURISDICTION OF ANY COURT OR ANY LEGAL PROCESS (WHETHER THROUGH
ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION, EXECUTION OF A JUDGMENT, OR FROM ANY
OTHER LEGAL PROCESS OR REMEDY) WITH RESPECT TO ITSELF OR ITS PROPERTY, SUCH SECURITY PARTY HEREBY
IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER
SECURITY DOCUMENTS.

     19.8 USA Patriot Act Notice; OFAC and Bank Secrecy Act. The Agent hereby notifies the
Borrower and each other Security Party that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56, signed into law October 26, 2001) (the “Act”), and the Agent’s
policies and practices, the Agent and each of the Lenders is required to obtain, verify and record
certain information and documentation that identifies each Security Party, which information
includes the name and address of each Security Party and such other information that will allow the
Agent and the Lenders to identify each Security Party in accordance with the Act. In addition,
each Security Party shall (a) ensure that no Person who owns a controlling interest in or otherwise
controls any Security Party or any subsidiary of any thereof is or shall be listed on the Specially
Designated Nationals and Blocked Person List or other similar lists maintained by the Office of
Foreign Assets Control (“OFAC”), the Department of the Treasury or included in any Executive
Orders, (b) not use or permit the use of the proceeds of the Facilities to violate any of the
foreign asset control regulations of OFAC or any enabling statute or Executive Order relating
thereto, and (c) comply, and cause any of its subsidiaries to comply, with all applicable Bank
Secrecy Act laws and regulations, as amended.

[SIGNATURES ON NEXT PAGE]

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          IN WITNESS whereof the parties hereto have caused this Agreement to be executed by their
respective duly authorized representative on the day and year first above written.

	 	 	 	 	 
	 	BULLY 1, LTD.,

as Borrower

 	 
	 	By:  	                      /s/ Vernon Westerhout
 	 
	 	 	Name:  	Vernon Westerhout 	 
	 	 	Title:  	General Manager 	 
	 
	 	NIBC BANK N.V.,

as Arranger, Agent, Security Trustee and Lender

 	 
	 	By:  	/s/ Seth A. Brookman
 	 
	 	 	Name:  	Seth A. Brookman 	 
	 	 	Title:  	Attorney-in-Fact 	 
	 
	 	STANDARD CHARTERED BANK,

as Arranger and Lender

 	 
	 	By:  	/s/ David Richards
 	 
	 	 	Name:  	David Richards 	 
	 	 	Title:  	Managing Director, Structured Finance 	 
	 
	 	BANK OF SCOTLAND PLC,

as Arranger and Lender

 	 
	 	By:  	/s/ John Lowe
 	 
	 	 	Name:  	John Lowe 	 
	 	 	Title:  	Director, Marine Finance 	 

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Schedule 1

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Senior Term Loan	 	 	Senior Revolver	 	 	Junior Term Loan	 	 	 	 
	Lender	 	Commitment	 	 	Commitment	 	 	Commitment	 	 	Total Commitment	 
	NIBC Bank N.V.

	 	$	 	 	 	$	 	 	 	$	 	 	 	$	155,000,000	 
	Carnegieplein 4, 2517 KJ

The Hague, The Netherlands

Attention: Loan Management
Energy

Facsimile No.: +31-70-342-5577	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Standard Chartered Bank

	 	$	 	 	 	$	 	 	 	$	 	 	 	$	155,000,000	 
	New London Bridge House,

25 London Bridge Street,

London SE1 9TB

Attention: Juan Grunblatt,

Portfolio Asset Management
team

Fax: +44 20 7280 7897	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Bank of Scotland plc

	 	$	 	 	 	$	 	 	 	$	 	 	 	$	155,000,000	 
	Corporate

Marine Finance

Pentland House

8 Lochside Avenue,

Edinburgh            EH12 9DJ

Attention: John Lowe

Fax: +44 131 658 3220	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

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Schedule 2

CONSTRUCTION PLAN

75

 

EXECUTION VERSION

AMENDMENT NO. 1

TO

TERM LOAN AND CREDIT FACILITY AGREEMENT

PROVIDING FOR A

US$465,000,000

SECURED CREDIT FACILITY

Dated December 21, 2007

 

MADE AMONG

BULLY 1, LTD.,

AS BORROWER,

THE BANKS AND FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES

HERETO,

AS LENDERS,

STANDARD CHARTERED BANK

AND

BANK OF SCOTLAND PLC,

AS ARRANGERS

AND

NIBC BANK N.V.,

AS ARRANGER, AGENT AND SECURITY TRUSTEE

 

February 12, 2008

 

 

AMENDMENT NO. 1 TO CREDIT FACILITY AGREEMENT

          THIS AMENDMENT NO. 1 TO TERM LOAN AND CREDIT FACILITY AGREEMENT (this “Amendment”) is
made as of the 12th day of February, 2008 by and among (i) BULLY 1, LTD., an exempt company
incorporated in the Cayman Islands, as borrower (the “Borrower”), (ii) the financial institutions
listed on the signature pages hereto as senior and/or junior lenders, as the case may be (together
with their respective successors and assigns, the “Lenders”), (iii) STANDARD CHARTERED BANK, a
company incorporated by Royal Charter in England (with reference number ZC18), BANK OF SCOTLAND
PLC, a banking corporation organized and existing under the laws of Scotland, and NIBC BANK N.V., a
banking corporation organized under the laws of The Netherlands (“NIBC”), as arrangers, and (iv)
NIBC as agent (in such capacity, the “Agent”) and security trustee (in such capacity, the “Security
Trustee”) for the Lenders, and amends and is supplemental to the Term Loan and Credit Facility
Agreement dated as of December 21, 2007 (the “Original Agreement”) made by and among the
Borrower, the Lenders, Agent and Security Trustee in which, subject to the terms of the Original
Agreement, the Lenders agreed to lend to the Borrower, and the Borrower agreed to borrow from the
Lenders, the principal amount of up to Four Hundred Sixty Five Million Dollars (US$465,000,000) for
the purpose of partly financing the construction of the drillship to be named FRONTIER BULLY I.

W I T N E S S E T H T H A T:

          WHEREAS, in accordance with the Original Agreement, Frontier Drillships, Ltd., an exempt
company incorporated in the Cayman Islands, and Shell EP Offshore Ventures Limited, a company
organized under the laws of the United Kingdom (collectively, the “Joint Venturers”) committed to
provide Capital Contribution Funding pursuant to the Contribution Agreement in the maximum
aggregate principal amount of One Hundred Fifteen Million Dollars ($115,000,000);

          WHEREAS, in accordance with Section 4.1(t) of the Original Agreement, the Agent received
evidence that Forty Eight Million Dollars ($48,000,000) of the Capital Contribution Funding had
been made by the Joint Venturers to the Borrower prior to the Drawdown Date of the Initial Advance;

          WHEREAS, the Borrower and the Lenders have agreed to amend the Original Agreement in
accordance with the terms and conditions set forth herein to further clarify the parties’
understanding relating to when the remaining Sixty Seven Million Dollars ($67,000,000) of Capital
Contribution Funding shall be required to be made available to the Borrower;

          WHEREAS, the Borrower and the Lenders have agreed to amend the Original Agreement to add a new
Section 4.6 to require the Joint Venturers to make payments of Capital Contribution Funding prior
to Borrower receiving certain Advances under the Senior Facility. The Borrower shall provide
evidence to the Agent that payments of Capital Contribution Funding has been made to the Borrower
in amounts equal to (i) Thirty Five Million Dollars ($35,000,000) if the amount outstanding under
the Senior Facilities shall exceed Two Hundred and Thirty Million Dollars ($230,000,000) at any
time; and (ii) Thirty Two Million Dollars ($32,000,000) if the amount outstanding under the Senior
Facilities shall exceed Three Hundred and Fifty Million Dollars ($350,000,000) at any time; and

2

 

          WHEREAS, each party hereto has agreed to consent to the amendment on the terms and conditions
herein contained.

          NOW, THEREFORE, in consideration of the premises and such other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged by the parties, it is
hereby agreed as follows:

          1. Definitions. Unless otherwise defined herein, words and expressions defined in the
Original Agreement shall have the same meanings when used herein, including in the recitals hereto.

          2. Representations and Warranties. The Borrower hereby reaffirms, as of the date
hereof, each and every representation and warranty made thereby in the Original Agreement, the
Notes and the Security Documents (updated mutatis mutandis).

          3. Performance of Covenants. The Borrower hereby reaffirms that it has duly performed
and observed the covenants and undertakings set forth in the Original Agreement, the Notes and the
Security Documents on its part to be performed, and covenants and undertakes to continue duly to
perform and observe such covenants and undertakings, as amended hereby, so long as the Original
Agreement, the Notes and the Security Documents, as the same are amended hereby may hereafter be
amended or supplemented, shall remain in effect.

          4. Amendment to the Original Agreement. Subject to the terms and conditions of this
Amendment, the Original Agreement is hereby amended and supplemented as follows:

	 	(a)	 	all references to “this Agreement” shall be deemed to refer to
the Original Agreement as amended hereby;
	 
	 	(b)	 	Section 4.6 shall be added and shall include the following:

	 	 	 	“Condition Precedent to Certain Advances of Senior Facilities:
Capital Contribution Funding Thresholds. In addition to the
conditions precedent set forth elsewhere in this Section 4, the
Borrower shall be required to provide evidence to the Agent that the
Joint Venturers have made such Capital Contribution Funding payments
as required by this Section. The Lenders shall not be required to
fund any Advance under the Senior Facilities in excess of the amounts
set forth below until the Agent has received evidence to its
satisfaction that the Joint Venturers have made Capital Contribution
Funding payments in the corresponding amounts set out below. In
respect of any Advance under the Senior Facilities, and without
set-off for any amount provided pursuant to Section 4.3(g), the Joint
Venturers shall, in addition to the Capital Contribution Funding
required by Section 4.1(t), make payments of the Capital Contribution
Funding to the Borrower in amounts equal to: (i) Thirty Five Million
Dollars ($35,000,000) if the amount outstanding under the Senior
Facilities shall exceed Two Hundred and Thirty Million Dollars
($230,000,000) at any time; and (ii) Thirty Two Million Dollars
($32,000,000) if the amount outstanding under the Senior

3

 

	 	 	 	Facilities shall exceed Three Hundred and Fifty Million Dollars
($350,000,000) at any time.”

          5. Conditions Precedent. The effectiveness of this Amendment shall be expressly
subject to the following conditions precedent:

	 	(a)	 	Compliance. The Borrower shall have complied and shall
then be in compliance with all the terms, covenants and conditions of the
Original Agreement, the Notes, the Security Documents and this Amendment which
are binding upon it.
	 
	 	(b)	 	No Event of Default. No Default or Event of Default shall
have occurred and be continuing under the Original Agreement, the Notes, the
Security Documents or this Amendment, nor shall any event have occurred that,
with notice or the passage of time, would reasonably be likely to become a
Default or an Event of Default.
	 
	 	(c)	 	No Material Adverse Effect. No material adverse effect,
nor any event that could reasonably be expected to have a material adverse
effect, shall have occurred and be continuing since the date of this Amendment.
	 
	 	(d)	 	Corporate Authority. The Agent shall have received such
evidence as it may deem necessary that the Borrower is duly authorized to
execute, deliver and perform, as applicable, this Amendment and to engage in the
transactions contemplated hereby.

          6. No Other Amendment. All other terms and conditions of the Original Agreement shall
remain in full force and effect and the Original Agreement shall be read and construed as if the
terms of this Amendment were included therein by way of addition or substitution, as the case may
be.

          7. Other Documents. By the execution and delivery of this Amendment, the Borrower and
the Lenders hereby consent and agree that all references in the Notes and the Security Documents
shall be deemed to refer to the Original Agreement as amended by this Amendment and all references
to the Notes and the Security Documents or any thereof shall be deemed to be references to such
documents as amended or substituted as required hereby. By the execution and delivery of this
Amendment, the Borrower hereby consents and agrees that the Notes and the Security Documents shall
remain in full force and effect notwithstanding the amendments contemplated hereby.

          8. Governing Law. This Amendment shall be governed by and construed in accordance
with the laws of the State of New York.

          9. Counterparts. This Amendment may be executed in as many counterparts as may be
deemed necessary or convenient, and by the different parties hereto on separate counterparts each
of which, when so executed, shall be deemed to be an original but all such counterparts shall
constitute but one and the same agreement.

4

 

          10. Headings; Amendment. In this Amendment, section headings are inserted for
convenience of reference only and shall be ignored in the interpretation of this Amendment. This
Amendment cannot be amended other than by written agreement signed by the parties hereto.

[Signature Page Follows]

5

 

          IN WITNESS WHEREOF, each of the parties hereto has executed this Amendment by its duly
authorized representative on the day and year first above written.

	 	 	 	 	 
	 	BULLY 1, LTD.,

as Borrower

 	 
	 	By:  	/s/ V. Westerhout
 	 
	 	 	Name:  	V. Westerhout 	 
	 	 	Title:  	General Manager 	 
	 
	 	NIBC BANK N.V.,

as Arranger, Agent, Security Trustee and Lender

As Lender:

 	 
	 	By:  	/s/ Dirk Kaper
 	 
	 	 	Name:  	Dirk Kaper 	 
	 	 	Title:  	Associate Director 	 
	 
	 	As Agent:

 	 
	 	By:  	/s/ Hans A. Nagtegaal
 	 
	 	 	Name:  	Hans. A. Nagtegaal 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	                                              /s/ Marco R. Hofman
 	 
	 	 	Name:  	Marco R. Hofman 	 
	 	 	 	 
	 
	 	STANDARD CHARTERED BANK,

as Arranger and Lender

 	 
	 	By:  	/s/ Lisa Rumelin
 	 
	 	 	Name:  	Lisa Rumelin 	 
	 	 	Title:  	Director, Structured Finance 	 
	 
	 	BANK OF SCOTLAND PLC,

as Arranger and Lender

 	 
	 	By:  	/s/ John Lowe
 	 
	 	 	Name:  	John Lowe 	 
	 	 	Title:  	Director 	 

 

 

	 	 	 	 	 
	 	ING BANK N.V.,

as Lender

 	 
	 	By:  	/s/ E.P. Nederbaum
 	 
	 	 	Name:  	E.P. Nederbaum 	 
	 	 	Title:  	Vice President 	 
	 
	 	 	 
	 	By:  	                                              /s/ J.J. Prins
 	 
	 	 	Name:  	J.J. Prins 	 
	 	 	Title:  	Managing Director 	 
	 
	 	BAYERISCHE LANDESBANK,

New York Branch,

as Lender

 	 
	 	By:  	/s/ Andrew Kjoller
 	 
	 	 	Name:  	Andrew Kjoller 	 
	 	 	Title:  	Vice President 	 
	 
	 	By:  	                                              /s/ Christopher Kaminski
 	 
	 	 	Name:  	Christopher Kaminski 	 
	 	 	Title:  	Vice President 	 
	 
	 	BTMU CAPITAL CORPORATION,

as Lender

 	 
	 	By:  	/s/ Cheryl A. Behan
 	 
	 	 	Name:  	Cheryl A. Behan 	 
	 	 	Title:  	Senior Vice President 	 
	 
	 	CREDIT INDUSTRIEL ET COMMERCIAL,

as Lender

 	 
	 	By:  	/s/ Xavier Contard
 	 
	 	 	Name:  	Xavier Contard 	 
	 	 	Title:  	Head of Middle Office 	 

 

 

	 	 	 	 	 
	 	 	 
	 	By:  	                                              /s/ Jean-Philippe Guillon
 	 
	 	 	Name:  	Jean-Philippe Guillon 	 
	 	 	Title:  	Global Head of Shipping 	 
	 
	 	NATIXIS,

as Lender

 	 
	 	By:  	/s/ Amelie Zucchi
 	 
	 	 	Name:  	Amelie Zucchi 	 
	 	 	Title:  	Authorized Signatory 	 
	 
	 	 	 
	 	By:  	                                              /s/ Knut Mathiassen
 	 
	 	 	Name:  	Knut Mathiassen 	 
	 	 	Title:  	Deputy Head of Shipping Finance 	 
	 
	 	HYPO PUBLIC FINANCE USA, INC., 

as Lender

 	 
	 	By:  	/s/ Jack Campbell
 	 
	 	 	Name:  	Jack Campbell 	 
	 	 	Title:  	Managing Director 	 

 

 

	 	 	 	 	 
	 	 	 
	 	By:  	                      /s/ Eve Evans
 	 
	 	 	Name:  	Eve Evans 	 
	 	 	Title:  	Managing Director 	 
	 
	 	SUMITOMO MITSUI BANKING
CORPORATION,

as Lender

 	 
	 	By:  	/s/ Masakazu Hasegawa
 	 
	 	 	Name:  	Masakazu Hasegawa 	 
	 	 	Title:  	Joint General Manager 	 
	 
	 	BAYERISCHE HYPO- UND VEREINSBANK

AKTIENGESELLSCHAFT, MUNICH,

acting through its Hamburg branch,

as Lender

 	 
	 	By:  	/s/ Somitsch
 	 
	 	 	Name:  	Somitsch 	 
	 	 	Title:  	Vice President 	 
	 
	 	 	 
	 	By:  	                                              /s/ Butenhoff
 	 
	 	 	Name:  	Butenhoff 	 
	 	 	 	 
	 
	 	RZB FINANCE LLC,

as Lender

 	 
	 	By:  	/s/ Shirley Ritch
 	 
	 	 	Name:  	Shirley Ritch 	 
	 	 	Title:  	Assistant Vice President 	 
	 
	 	 	 
	 	By:  	                                              /s/ John A. Valiska
 	 
	 	 	Name:  	John A. Valiska 	 
	 	 	Title:  	First Vice President 	 

 

 

	 	 	 	 	 
	 	DNB NOR BANK ASA,

as Lender

 	 
	 	By:  	/s/ Stian Lovseth
 	 
	 	 	Name:  	Stian Lovseth 	 
	 	 	Title:  	Vice President 	 
	 
	 	 	 
	 	By:  	                      /s/ Asa Jemseby Rodgers
 	 
	 	 	Name:  	Asa Jemseby Rodgers 	 
	 	 	Title:  	Vice President 	 
	 
	 	LANDESBANK HESSEN — THURINGEN 

GIROZENTRALE,

as Lender

 	 
	 	By:  	/s/ David A. Leech
 	 
	 	 	Name:  	David A. Leech 	 
	 	 	Title:  	Senior Vice President,
Corporate Finance Division 	 
	 
	 	 	 
	 	By:  	                  /s/ Gaelle Waddington
 	 
	 	 	Name:  	Gaelle Waddington 	 
	 	 	Title:  	Assistant Vice President,

Corporate Finance 	 
	 

 

 

EXECUTION VERSION

AMENDMENT NO. 2 AND CONSENT

TO

TERM LOAN AND CREDIT FACILITY AGREEMENT

PROVIDING FOR A

US$465,000,000

SECURED CREDIT FACILITY

DATED DECEMBER 21, 2007

 

MADE AMONG

BULLY 1, LTD.,

AS BORROWER,

THE BANKS AND FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HERETO,

AS LENDERS,

STANDARD CHARTERED BANK

AND

BANK OF SCOTLAND PLC,

AS ARRANGERS

AND

NIBC BANK N.V.,

AS ARRANGER, AGENT AND SECURITY TRUSTEE

 

JULY 28, 2010

 

 

AMENDMENT NO. 2 AND CONSENT TO TERM LOAN AND CREDIT FACILITY AGREEMENT

          THIS AMENDMENT NO. 2 AND CONSENT TO TERM LOAN AND CREDIT FACILITY AGREEMENT (this
“Amendment”) is made as of the 28th day of July, 2010 by and among (i) BULLY 1, LTD., an
exempt company incorporated in the Cayman Islands, as borrower (the “Borrower”), (ii) the
financial institutions listed on the signature pages hereto as senior and/or junior lenders, as the
case may be (together with their respective successors and assigns, the “Lenders”), (iii)
STANDARD CHARTERED BANK, a company incorporated by Royal Charter in England (with reference number
ZC18), BANK OF SCOTLAND PLC, a banking corporation organized and existing under the laws of
Scotland, and NIBC BANK N.V., a banking corporation organized under the laws of The Netherlands
(“NIBC”), as arrangers (the “Arrangers”), and (iv) NIBC as agent (in such capacity,
the “Agent”) and security trustee (in such capacity, the “Security Trustee”) for
the Lenders, and amends and is supplemental to the Term Loan and Credit Facility Agreement dated as
of December 21, 2007 (as heretofore amended, restated or otherwise modified, the “Existing
Agreement”) made by and among the Borrower, the Lenders, the Arrangers, the Agent and the
Security Trustee in which, subject to the terms of the Existing Agreement, the Lenders agreed to
lend to the Borrower, and the Borrower agreed to borrow from the Lenders, the principal amount of
up to Four Hundred Sixty Five Million Dollars (US$465,000,000) for the purpose of partly financing
the construction of a Bully-class drillship.

W I T N E S S E T H T H A T:

          WHEREAS, FDR Holdings is party to that certain Agreement and Plan of Merger (the “Merger
Agreement”) dated June 27, 2010 among Noble Corporation, a Swiss corporation (“Noble”),
Noble AM Merger Co. (“Merger Sub”), FDR Holdings, certain shareholders of FDR Holdings and
the other parties thereto, pursuant to which, on the terms and subject to the conditions provided
for therein, Merger Sub shall merge with and into FDR Holdings, with FDR Holdings being the
surviving company (the “Merger”);

          WHEREAS, as a result of the Merger, FDR Holdings will become an indirect, wholly-owned
Subsidiary of Noble;

          WHEREAS, in connection with the Merger, FDR Holdings, Frontier Drillships and the Purchasers
desire to terminate the Sponsor Purchase Agreement (the “Sponsor Purchase Agreement
Termination”) and to amend the Existing Agreement for certain other purposes provided for
herein; and

          WHEREAS, the Borrower and the Lenders party hereto (which Lenders constitute Majority Lenders)
have agreed to amend the Existing Agreement for the purposes provided for herein on the terms and
conditions set forth herein.

          NOW, THEREFORE, in consideration of the premises and such other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged by the parties, it is
hereby agreed as follows:

1

 

          1. Definitions Unless otherwise defined herein, words and expressions defined in the
Existing Agreement shall have the same meanings when used herein, including in the recitals hereto.

          2. Representations and Warranties (a) The Borrower hereby reaffirms, as of the date
hereof, each and every representation and warranty made by the Borrower in the Existing Agreement
(as amended hereby).

(b) The Borrower hereby represents and warrants that, immediately after the consummation of
the Merger on the closing date thereof, FDR Holdings will be wholly-owned, directly or indirectly,
by Noble Corporation.

          3. Events of Default The Borrower hereby represents and warrants that, as of the date
hereof, no Event of Default or event which with the passing of time or the giving of notice, or
both, would constitute an Event of Default has occurred and is continuing.

          4. Performance of Covenants The Borrower hereby reaffirms that it has duly performed and
observed the covenants and undertakings set forth in the Existing Agreement, the Notes and the
Security Documents on its part to be performed, and covenants and undertakes to continue duly to
perform and observe such covenants and undertakings as are contained in the Existing Agreement, the
Notes and the Security Documents (each as amended hereby), so long as the Existing Agreement, the
Notes and the Security Documents, as the same are amended hereby or may hereafter be amended or
supplemented, shall remain in effect.

          5. Amendments to the Existing Agreement Subject to the terms and conditions of this
Amendment, the Existing Agreement is hereby amended and supplemented as follows:

	 	(a)	 	Section 1.1 is amended to delete the definition of Sponsor
Purchase Agreement set forth therein.
	 
	 	(b)	 	Section 2.1(o) is amended to delete the phrase (i) “the Sponsor
Purchase Agreement or” contained in the second sentence thereof and (ii) “the
Sponsor Purchase Agreement,” contained in the last sentence thereof.
	 
	 	(c)	 	Section 2.1(z) is amended and restated as follows:
	 
	 	 	 	"[Intentionally omitted.]”
	 
	 	(d)	 	Section 8.1(p) shall be amended and restated as follows:
	 
	 	 	 	“Cancellation or Termination of Contribution Agreement. The
Contribution Agreement has been repudiated, cancelled, materially changed or
it has been terminated for any reason without the prior written consent of
the Majority Lenders.”

2

 

	 	(e)	 	Clause (ii) of Section 9.2(o) shall be amended and restated as
follows:
	 
	 	 	 	“(ii) materially amend the Bareboat Charter, Approved Joint Venture, MDO
Contract, Contribution Agreement or any Security Document without the prior
written approval of the Majority Lenders;”
	 
	 	(f)	 	Section 18.1 shall be amended (i) to delete the notice
information for the Security Parties in its entirety and to replace it as
follows:
	 
	 	 	 	“Maples and Calder

PO Box 309, Ugland House

South Church Street, George Town

Grand Cayman KY1-1104

Cayman Islands
	 
	 	 	 	with a copy to
	 
	 	 	 	Bully 1, Ltd.

c/o Noble Drilling Services Inc.

13135 South Dairy Ashford, Suite 800

Sugar Land, TX 77478

Attn: Steve Donley

Facsimile: 281.276.6344”
	 
	 	 	 	and (ii) to add the following sentence directly at the end thereof:
	 
	 	 	 	“Any party hereto may change its address or facsimile number for notices and
other communications hereunder by notice to the other parties hereto.”
	 
	 	(g)	 	The undersigned Lenders hereby acknowledge and agree that the
Notes and each Security Document shall be automatically amended without any
further action by any party thereto to substitute the notice information for
the Borrower contained in Section 5(f) above for the existing notice
information for the Borrower contained therein, in each instance where such
notice information appears.

          6. New Vessel Name The Borrower hereby informs the Agent, Security Trustee and Lenders
that, at or after the consummation of the Merger, the name of the Vessel may be changed to a new
name (the “New Vessel Name”). The undersigned Lenders hereby acknowledge and agree that,
upon receipt by the Agent of written notice from the Borrower specifying the New Vessel Name, (i)
the Existing Agreement (as amended hereby), the Notes and each Security Document shall be automatically amended without any further action by any
party thereto to replace the phrase “Frontier Bully I” in each instance where such phrase appears
therein with the New Vessel Name, except the Borrower agrees to register and submit all
documentation required by the Republic of the Marshall Islands Maritime Administrator (or, if the
Vessel’s name is changed after giving effect to the Vessel Reflagging (as defined in Section 7
below), by the maritime authorities of Liberia) to effect the Vessel’s name change and (ii) the

3

 

defined term “Vessel” in the Existing Agreement (as amended hereby) shall be automatically amended
without any further action by any party thereto to reflect the New Vessel Name.

          7. Reflagging The Borrower hereby requests that, at or after the consummation of the
Merger, the Vessel may be reflagged in Liberia (the “Vessel Reflagging”). The undersigned
Lenders hereby consent to the Vessel Reflagging at any time within one (1) calendar year after the
date hereof, provided that the Borrower shall deliver to the Agent (i) copies of such
documents and instruments as are necessary to evidence the reflagging of the Vessel in Liberia
promptly after receipt thereof and (ii) prior to giving effect to the Vessel Reflagging, any
Security Documents, including a first preferred Liberian mortgage over the Vessel, and documents
related thereto as the Agent shall reasonably require with respect to the Vessel, such Security
Documents, first preferred Liberian mortgage over the Vessel, and documents related thereto to be
in such form and substance as is satisfactory to the Security Trustee. Upon receipt by the Agent
of written notice from the Borrower of the consummation of the Vessel Reflagging, the Existing
Agreement (as amended hereby), the Notes and each Security Document (other than the Mortgage) shall
be automatically amended without any further action by any party thereto to reflect the Vessel
Reflagging. The undersigned Lenders hereby agree that the Vessel Reflagging shall not result in an
Event of Default under the Existing Agreement, any Notes or any of the Security Documents.

          8. New Registered Office (a) The Borrower hereby informs the Agent that, at or after
the consummation of the Merger, the registered office of the Borrower and the Operating Entity may
be changed to Maples & Calder, PO Box 309, Ugland House, South Church Street, George Town, Grand
Cayman KY1-1104, Cayman Islands (the “New Registered Office”). The undersigned Lenders
hereby acknowledge and agree that, upon receipt by the Agent of written notice from the Borrower
that the registered office has been changed to the New Registered Office, Section 2.1(q) of the
Existing Agreement (as amended hereby) shall be automatically amended and restated without any
further action by any party thereto as follows:

“(q) Offices. The registered office of each of the Borrower and the
Operating Entity is located at Maples & Calder, PO Box 309, Ugland House, South
Church Street, George Town, Grand Cayman KY1-1104, Cayman Islands.”

     (b) Notwithstanding anything contained in the Existing Agreement (as amended hereby), the
Notes or any Security Document to the contrary, the undersigned Lenders hereby (a) consent to the
change in the location of the Borrower’s and the Operating Entity’s registered office to the New
Registered Office pursuant to Section 8(a) above, and (b) agree that the change in the location of
the Borrower’s and the Operating Entity’s registered office to the New Registered Office pursuant
to Section 8(a) above shall not result in an Event of Default under the Existing Agreement, any
Notes or any of the Security Documents.

          9. Consents Notwithstanding anything contained in the Existing Agreement (as amended
hereby), the Notes or any Security Document to the contrary, the undersigned Lenders hereby (a)
consent to the Sponsor Purchase Agreement Termination pursuant to Section 8.1(p) of the Existing
Agreement, (b) agree that the Sponsor Purchase Agreement Termination shall not result in an Event
of Default under the Existing Agreement, any Notes or any of the Security Documents, (c) consent to
the Vessel Reflagging pursuant to

4

 

Section 9.2(l) of the Existing Agreement and (d) agree that the Vessel Reflagging shall not result in an Event of Default under the Existing Agreement, any Notes
or any of the Security Documents.

          10. Conditions Precedent The effectiveness of this Amendment shall be expressly
subject to the following conditions precedent:

	 	(a)	 	Compliance. The Borrower shall have complied and
shall then be in compliance with all the terms, covenants and conditions of
the Existing Agreement (as amended hereby), the Notes and the Security
Documents which are binding upon it.
	 
	 	(b)	 	No Event of Default. No default or Event of Default
shall have occurred and be continuing under the Existing Agreement (as amended
hereby), the Notes or the Security Documents, nor shall any event have occurred
that, with notice or the passage of time, would reasonably be likely to become
a default or an Event of Default.
	 
	 	(c)	 	No Material Adverse Effect. No material adverse
effect, nor any event that could reasonably be expected to have a material
adverse effect, shall have occurred and be continuing since the date of this
Amendment.
	 
	 	(d)	 	Corporate Authority. The Agent shall have received
such evidence as it may deem necessary that the Borrower is duly authorized to
execute, deliver and perform, as applicable, this Amendment and to engage in
the transactions contemplated hereby.

          11. No Other Amendment All other terms and conditions of the Existing Agreement not
expressly amended, waived or otherwise modified pursuant hereto shall remain in full force and
effect and the Existing Agreement shall be read and construed as if the terms of this Amendment
were included therein by way of addition or substitution, as the case may be.

          12. Effect of Amendment By the execution and delivery of this Amendment, the Borrower and
the Lenders hereby consent and agree that each reference to “hereof”, “hereunder”, “herein” and
“hereby” and each other similar reference and each reference to “this Agreement” and each other
similar reference contained in the Existing Agreement, any Note or any Security Document shall
refer to the Existing Agreement, as amended hereby. By the execution and delivery of this
Amendment, the Borrower hereby consents and agrees that the Notes and the Security Documents shall
remain in full force and effect notwithstanding the amendments contemplated hereby; provided,
however, that any reference in the Notes or the Security Documents to the Sponsor Purchase
Agreement shall be deleted.

          13. Governing Law This Amendment shall be governed by and construed in accordance with the
laws of the State of New York.

          14. Counterparts This Amendment may be executed in as many counterparts as may be deemed
necessary or convenient, and by the different parties hereto on separate

5

 

counterparts each of which, when so executed, shall be deemed to be an original but all such counterparts shall
constitute but one and the same agreement.

          15. Headings; Amendment In this Amendment, section headings are inserted for convenience
of reference only and shall be ignored in the interpretation of this Amendment. This Amendment
cannot be amended other than by written agreement signed by the parties hereto.

[SIGNATURE PAGE FOLLOWS]

6

 

          IN WITNESS WHEREOF, each of the parties hereto has executed this Amendment by its duly
authorized representative on the day and year first above written.

	 	 	 	 	 
	 	BULLY 1, LTD.,

as Borrower

 	 
	 	By:  	/s/ Vern Westerhout
 	 
	 	 	Name:  	Vern Westerhout 	 
	 	 	Title:  	General Manager 	 
	 
	 	NlBC BANK N.V.,

as Arranger, Agent and Security Trustee

 	 
	 	By:  	/s/ Marco R. Hofman
 	 
	 	 	Name:  	Marco R. Hofman 	 
	 	 	Title:  	Associate Director 	 
	 
	 	 	 
	 	By:  	                        /s/ Marco Knijff
 	 
	 	 	Name:  	Marco Knijff 	 
	 	 	 	 
	 
	 	NlBC BANK N.V.,

as Lender

 	 
	 	By:  	/s/ Marco R. Hofman
 	 
	 	 	Name:  	Marco R. Hofman 	 
	 	 	Title:  	Associate Director 	 
	 
	 	 	 
	 	By:  	                       /s/ J. van der Putten
 	 
	 	 	Name:  	J. van der Putten 	 
	 	 	Title:  	Associate Director 	 

7

 

	 	 	 	 	 

	 	 	 	 	 
	 	BANK OF SCOTLAND PLC,

as Arranger and Lender

 	 
	 	By:  	/s/ Shelley Morrison
 	 
	 	 	Name:  	Shelley Morrison 	 
	 	 	Title:  	Associate Director 	 
	 
	 	ING BANK N.V.,

as Lender

 	 
	 	By:  	/s/ [Illegible]
 	 
	 	 	Name:  	[Illegible] 	 
	 	 	Title:  	Director 	 
	 
	 	 	 
	 	By:  	                        /s/ Michael Klemme
 	 
	 	 	Name:  	Michael Klemme 	 
	 	 	Title:  	Managing Director 	 
	 
	 	BAYERISCHE LANDESBANK,

New York Branch,

as Lender

 	 
	 	By:  	/s/ Andrew Kjoller
 	 
	 	 	Name:  	Andrew Kjoller 	 
	 	 	Title:  	First Vice President 	 
	 
	 	 	 
	 	By:  	                       /s/ Thomas Augustin
 	 
	 	 	Name:  	Thomas Augustin 	 
	 	 	Title:  	First Vice President 	 

8

 

	 	 	 	 	 

	 	 	 	 	 
	 	CREDIT INDUSTRIEL ET COMMERCIAL,

as Lender

 	 
	 	By:  	/s/ Jean-Philippe Guillon
 	 
	 	 	Name:  	Jean-Philippe Guillon 	 
	 	 	Title:  	Head of Shipping and Offshore 	 
	 
	 	 	 
	 	By:  	                  /s/ Marieme Karadag
 	 
	 	 	Name:  	Marieme Karadag 	 
	 	 	 	 
	 
	 	NATIXIS,

as Lender

 	 
	 	By:  	/s/ Amelie Zucchi
 	 
	 	 	Name:  	Amelie Zucchi 	 
	 	 	Title:  	Middle Officer 	 
	 
	 	 	 
	 	By:  	                  /s/ Frederic Neouze
 	 
	 	 	Name:  	Frederic Neouze 	 
	 	 	Title:  	Vice President, Offshore 	 
	 
	 	HYPO PUBLIC FINANCE USA, INC.,

as Lender

 	 
	 	By:  	/s/ Peter Herberger
 	 
	 	 	Name:  	Peter Herberger 	 
	 	 	Title:  	Head of Infrastructure and Asset Finance Americas 	 
	 
	 	 	 
	 	By:  	                        /s/ Thomas Drelles
 	 
	 	 	Name:  	Thomas Drelles 	 
	 	 	Title:  	Managing Director 	 

9

 

	 	 	 	 	 
	 	UNICREDIT BANK AG

formerly known as

BAYERISCHE HYPO-UND VEREINSBANK AKTIENGESELLSCHAFT, MUNICH, acting through its Hamburg branch,

as Lender

 	 
	 	By:  	/s/ Dr. Hopfner
 	 
	 	 	Name:  	Dr. Hopfner 	 
	 	 	Title:  	Vice President 	 
	 
	 	 	 
	 	By:  	                          /s/ Somitsch
 	 
	 	 	Name:  	Somitsch 	 
	 	 	Title:  	Vice President 	 
	 
	 	RZB FINANCE LLC,

as Lender

 	 
	 	By:  	/s/ Stephen A. Plauche
 	 
	 	 	Name:  	Stephen A. Plauche 	 
	 	 	Title:  	First Vice President 	 
	 
	 	 	 
	 	By:  	                       /s/ Christoph Hoedl
 	 
	 	 	Name:  	Christoph Hoedl 	 
	 	 	Title:  	First Vice President 	 
	 
	 	DNB NOR BANK ASA,

as Lender

 	 
	 	By:  	/s/ Barbara Gronquist
 	 
	 	 	Name:  	Barbara Gronquist 	 
	 	 	Title:  	Senior Vice President 	 
	 
	 	 	 
	 	By:  	                      /s/ Stian Lovseth
 	 
	 	 	Name:  	Stian Lovseth 	 
	 	 	Title:  	Vice President 	 

10

 

	 	 	 	 	 

	 	 	 	 	 
	 	THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND,

as Lender

 	 
	 	By:  	/s/ Ciaran McGill
 	 
	 	 	Name:  	Ciaran McGill 	 
	 	 	Title:  	Deputy Manager 	 
	 
	 	 	 
	 	By:  	                         /s/ Erin Clarke
 	 
	 	 	Name:  	Erin Clarke 	 
	 	 	Title:  	Deputy Manager 	 
	 

11

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00176-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00176-of-00352.parquet"}]]