Document:

Exhibit 4.1

 

Execution  Version

 

 

364-DAY REVOLVING CREDIT
AGREEMENT

 

Dated as of

 

December 3, 2007

 

Among

 

TRANSOCEAN INC.,

as Borrower,

 

THE LENDERS PARTIES HERETO,

 

JPMORGAN
CHASE BANK, N.A.,

as Administrative Agent,

 

CITIBANK, N.A.,

as Syndication Agent,

 

CALYON NEW YORK BRANCH,

as Co-Syndication Agent,

 

and

 

CREDIT
SUISSE, CAYMAN ISLANDS BRANCH

and

THE
BANK OF TOKYO-MITSUBISHI UFJ, LTD.,

as Co-Documentation Agents

 

 

 

J.P.
MORGAN SECURITIES INC.,

and

CITIGROUP
GLOBAL MARKETS INC.,

as
Co-Lead Arrangers and Joint Bookrunners

 

 

TABLE OF CONTENTS

 

	
  ARTICLE 1.

  	
  DEFINITIONS; INTERPRETATION

  	
  1

  	 

	 
	
  Section
  1.1.

  	
  Definitions

  	
  1

  
	 
	
  Section
  1.2.

  	
  Time of Day

  	
  18

  
	 
	
  Section
  1.3.

  	
  Accounting Terms; GAAP

  	
  18

  
	 
	
  ARTICLE 2.

  	
  THE CREDIT FACILITIES

  	
  18

  
	 
	
  Section
  2.1.

  	
  Commitments for Revolving Loans

  	
  19

  
	 
	
  Section
  2.2.

  	
  Types of Revolving Loans and Minimum Borrowing Amounts

  	
  19

  
	 
	
  Section
  2.3.

  	
  Manner of Borrowings; Continuations and Conversions of Borrowings

  	
  19

  
	 
	
  Section
  2.4.

  	
  Interest Periods

  	
  21

  
	 
	
  Section
  2.5.

  	
  Funding of Loans

  	
  22

  
	 
	
  Section
  2.6.

  	
  Applicable Interest Rates

  	
  22

  
	 
	
  Section
  2.7.

  	
  Default Rate

  	
  23

  
	 
	
  Section
  2.8.

  	
  Repayment of Loans; Evidence of Debt

  	
  24

  
	 
	
  Section
  2.9.

  	
  Optional Prepayments

  	
  25

  
	 
	
  Section
  2.10.

  	
  Mandatory Prepayments of Loans

  	
  26

  
	 
	
  Section
  2.11.

  	
  Breakage Fees

  	
  26

  
	 
	
  Section
  2.12.

  	
  Commitment Terminations

  	
  27

  
	 
	
  Section
  2.13.

  	
  [Intentionally Omitted]

  	
  27

  
	 
	
  Section
  2.14.

  	
  Extension of Final Maturity Date

  	
  27

  
	 
	
  ARTICLE 3.

  	
  FEES AND PAYMENTS

  	
  27

  
	 
	
  Section
  3.1.

  	
  Fees

  	
  27

  
	 
	
  Section
  3.2.

  	
  Place and Application of Payments

  	
  28

  
	 
	
  Section
  3.3.

  	
  Withholding Taxes

  	
  29

  
	 
	
  ARTICLE 4.

  	
  CONDITIONS PRECEDENT

  	
  32

  
	 
	
  Section
  4.1.

  	
  Initial Borrowing

  	
  32

  
	 
	
  Section
  4.2.

  	
  All Borrowings

  	
  33

  
	 
	
  ARTICLE 5.

  	
  REPRESENTATIONS AND WARRANTIES

  	
  34

  
	 
	
  Section
  5.1.

  	
  Corporate Organization

  	
  34

  
	 
	
  Section
  5.2.

  	
  Power and Authority; Validity

  	
  34

  
	 
	
  Section
  5.3.

  	
  No Violation

  	
  34

  
	 
	
  Section
  5.4.

  	
  Litigation

  	
  35

  
	 
	
  Section
  5.5.

  	
  Use of Proceeds; Margin Regulations

  	
  35

  
	 
	
  Section
  5.6.

  	
  Investment Company Act

  	
  35

  
	 
	
  Section
  5.7.

  	
  True and Complete Disclosure

  	
  35

  
	 
	
  Section
  5.8.

  	
  Financial Statements

  	
  36

  
	 
	
  Section
  5.9.

  	
  No Material Adverse Change

  	
  36

  
	 
	
  Section
  5.10.

  	
  Taxes

  	
  36

  
	 
	
  Section
  5.11.

  	
  Consents

  	
  37

  
	 
	
  Section
  5.12.

  	
  Insurance

  	
  37

  
	 
	
  Section
  5.13.

  	
  Intellectual Property

  	
  37

  
	 
	
  Section
  5.14.

  	
  Ownership of Property

  	
  37

  
	 
	
  Section
  5.15.

  	
  Existing Indebtedness

  	
  37

  
	 
	
  Section
  5.16.

  	
  Existing Liens

  	
  37

  
	 
	
  Section
  5.17.

  	
  Merger Transactions

  	
  38

  
	 
	
  Section
  5.18.

  	
  Employee Benefit Plan

  	
  38

  
	 
	
  Section
  5.19.

  	
  OFAC

  	
  38

  
	 
	
  Section
  5.20.

  	
  Patriot Act

  	
  39

  
					

 

 

	
  ARTICLE 6.

  	
  COVENANTS

  	
  39

  	 

	 
	
  Section
  6.1.

  	
  Corporate Existence

  	
  39

  
	 
	
  Section
  6.2.

  	
  Maintenance

  	
  39

  
	 
	
  Section
  6.3.

  	
  Taxes

  	
  39

  
	 
	
  Section
  6.4.

  	
  ERISA

  	
  40

  
	 
	
  Section
  6.5.

  	
  Insurance

  	
  40

  
	 
	
  Section
  6.6.

  	
  Financial Reports and Other Information

  	
  40

  
	 
	
  Section
  6.7.

  	
  Lender Inspection Rights

  	
  43

  
	 
	
  Section
  6.8.

  	
  Conduct of Business

  	
  43

  
	 
	
  Section
  6.9.

  	
  Use of Proceeds; Margin Regulations

  	
  43

  
	 
	
  Section
  6.10.

  	
  Restrictions on Fundamental Changes

  	
  44

  
	 
	
  Section
  6.11.

  	
  Liens

  	
  44

  
	 
	
  Section
  6.12.

  	
  Subsidiary Indebtedness

  	
  47

  
	 
	
  Section
  6.13.

  	
  Use of Property and Facilities; Environmental Laws

  	
  48

  
	 
	
  Section
  6.14.

  	
  Transactions with Affiliates

  	
  49

  
	 
	
  Section
  6.15.

  	
  Sale and Leaseback Transactions

  	
  49

  
	 
	
  Section
  6.16.

  	
  Compliance with Laws

  	
  49

  
	 
	
  Section
  6.17.

  	
  Indebtedness to Total Tangible Capitalization Ratio

  	
  49

  
	 
	
  Section
  6.18.

  	
  Leverage Ratio

  	
  50

  
	 
	
  ARTICLE 7.

  	
  EVENTS OF DEFAULT AND REMEDIES

  	
  50

  
	 
	
  Section
  7.1.

  	
  Events of Default

  	
  50

  
	 
	
  Section
  7.2.

  	
  Non-Bankruptcy Defaults

  	
  52

  
	 
	
  Section
  7.3.

  	
  Bankruptcy Defaults

  	
  52

  
	 
	
  Section
  7.4.

  	
  Notice of Default

  	
  52

  
	 
	
  Section
  7.5.

  	
  Expenses

  	
  52

  
	 
	
  Section
  7.6.

  	
  Distribution and Application of Proceeds

  	
  52

  
	 
	
  ARTICLE 8.

  	
  CHANGE IN CIRCUMSTANCES

  	
  53

  
	 
	
  Section
  8.1.

  	
  Change of Law

  	
  53

  
	 
	
  Section
  8.2.

  	
  Unavailability of Deposits or Inability to Ascertain LIBOR Rate

  	
  54

  
	 
	
  Section
  8.3.

  	
  Increased Cost and Reduced Return

  	
  54

  
	 
	
  Section
  8.4.

  	
  Lending Offices

  	
  56

  
	 
	
  Section
  8.5.

  	
  Discretion of Lender as to Manner of Funding

  	
  56

  
	 
	
  Section
  8.6.

  	
  Substitution of Lender

  	
  57

  
	 
	
  ARTICLE 9.

  	
  THE AGENTS

  	
  57

  
	 
	
  Section
  9.1.

  	
  Appointment and Authorization of Administrative Agent and Other Agents

  	
  57

  
	 
	
  Section
  9.2.

  	
  Rights and Powers

  	
  57

  
	 
	
  Section
  9.3.

  	
  Action by Administrative Agent and the Other Agents

  	
  58

  
	 
	
  Section
  9.4.

  	
  Consultation with Experts

  	
  58

  
	 
	
  Section
  9.5.

  	
  Indemnification Provisions; Credit Decision

  	
  58

  
	 
	
  Section
  9.6.

  	
  Indemnity

  	
  59

  
	 
	
  Section
  9.7.

  	
  Resignation

  	
  59

  
	 
	
  Section
  9.8.

  	
  Sub-Agents

  	
  60

  
	 
	
  ARTICLE 10.

  	
  MISCELLANEOUS

  	
  60

  
	 
	
  Section
  10.1.

  	
  No Waiver

  	
  60

  
	 
	
  Section
  10.2.

  	
  Non-Business Day

  	
  60

  
	 
	
  Section
  10.3.

  	
  Documentary Taxes

  	
  61

  
	 
	
  Section
  10.4.

  	
  Survival of Representations

  	
  61

  
	 
	
  Section
  10.5.

  	
  Survival of Indemnities

  	
  61

  
	 
	
  Section
  10.6.

  	
  Setoff

  	
  61

  
	 
	
  Section
  10.7.

  	
  Notices

  	
  62

  
					

 

ii

 

	
  Section
  10.8.

  	
  Counterparts

  	
  63

  	 

	 
	
  Section
  10.9.

  	
  Successors and Assigns

  	
  63

  
	 
	
  Section
  10.10.

  	
  Sales and Transfers of Borrowing and Notes; Participations in
  Borrowings and Notes

  	
  64

  
	 
	
  Section
  10.11.

  	
  Amendments, Waivers and Consents

  	
  67

  
	 
	
  Section
  10.12.

  	
  Headings

  	
  67

  
	 
	
  Section
  10.13.

  	
  Legal Fees, Other Costs and Indemnification

  	
  67

  
	 
	
  Section
  10.14.

  	
  Governing Law; Submission to Jurisdiction; Waiver of Jury Trial

  	
  68

  
	 
	
  Section
  10.15.

  	
  Confidentiality

  	
  70

  
	 
	
  Section
  10.16.

  	
  [Intentionally Omitted]

  	
  71

  
	 
	
  Section
  10.17.

  	
  Severability

  	
  71

  
	 
	
  Section
  10.18.

  	
  Change in Accounting Principles, Fiscal Year or Tax Laws

  	
  71

  
	 
	
  Section
  10.19.

  	
  Final Agreement

  	
  71

  
	 
	
  Section
  10.20.

  	
  Officer’s Certificates

  	
  71

  
	 
	
  Section
  10.21.

  	
  Effect of Inclusion of Exceptions

  	
  71

  
	 
	
  Section
  10.22.

  	
  Patriot Act Notice

  	
  72

  
					

 

	
  Exhibits:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit 2.3

  	
   

  	
  -

  	
   

  	
  Form of Borrowing Request

  
	
  Exhibit 2.8A

  	
   

  	
  -

  	
   

  	
  Form of Master Note

  
	
  Exhibit 4.1A

  	
   

  	
  -

  	
   

  	
  Form of Opinion of Baker Botts LLP

  
	
  Exhibit 4.1B

  	
   

  	
  -

  	
   

  	
  Form of Opinion of Transocean General Counsel

  
	
  Exhibit 4.1C

  	
   

  	
  -

  	
   

  	
  Form of Opinion of Walkers

  
	
  Exhibit 6.6

  	
   

  	
  -

  	
   

  	
  Form of Compliance Certificate

  
	
  Exhibit 6.12

  	
   

  	
  -

  	
   

  	
  Form of Subsidiary Guaranty

  
	
  Exhibit 10.10

  	
   

  	
  -

  	
   

  	
  Form of Assignment Agreement

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedules:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 4.1

  	
   

  	
  -

  	
   

  	
  Credit Facilities to be Terminated

  
	
  Schedule 5.4

  	
   

  	
  -

  	
   

  	
  Certain Litigation and Proceedings

  
	
  Schedule 5.9

  	
   

  	
  -

  	
   

  	
  Certain Events or Effects

  
	
  Schedule 5.15

  	
   

  	
  -

  	
   

  	
  Existing Indebtedness

  
	
  Schedule 5.16

  	
   

  	
  -

  	
   

  	
  Existing Liens

  
	
  Schedule 6.14

  	
   

  	
  -

  	
   

  	
  Transactions with Affiliates

  

 

iii

 

364-DAY REVOLVING CREDIT
AGREEMENT

 

THIS
364-DAY REVOLVING CREDIT AGREEMENT (the “Agreement”), dated as of December
3, 2007, among TRANSOCEAN INC. (the “Borrower”), a
Cayman Islands company, the lenders from time to time parties hereto (each a “Lender” and collectively, the “Lenders”),
JPMORGAN CHASE BANK, N.A., as administrative agent for the Lenders (in such
capacity, the “Administrative Agent”), CITIBANK,
N.A., as syndication agent for the Lenders (in such capacity, the “Syndication Agent”), CALYON NEW YORK BRANCH, as
co-syndication agent (in such capacity, the “Co-Syndication Agent”),
and CREDIT SUISSE, CAYMAN ISLANDS BRANCH and THE BANK OF TOKYO-MITSUBISHI UFJ,
LTD., as co-documentation agents for the Lenders (in such capacities,
collectively the “Co-Documentation Agents”).

 

WITNESSETH:

 

WHEREAS, the Borrower has requested that the Lenders
establish a $1,500,000,000 revolving credit facility in favor of the Borrower;
and

 

WHEREAS, the Lenders have agreed to establish for the
Borrower a revolving credit facility in the aggregate principal amount of U.S.
$1,500,000,000, all on the terms and subject to the conditions set forth in
this Agreement;

 

NOW, THEREFORE, in consideration of the premises and
of the mutual covenants herein contained, the parties hereto agree as follows:

 

ARTICLE 1.          DEFINITIONS;
INTERPRETATION.

 

Section 1.1.            Definitions.  Unless otherwise defined herein, the
following terms shall have the following meanings, which meanings shall be
equally applicable to both the singular and plural forms of such terms:

 

“Adjusted LIBOR”
means, for any Borrowing of Eurodollar Loans for any Interest Period, a rate
per annum determined in accordance with the following formula:

 

	
  Adjusted LIBOR

  	
  =

  	
  LIBOR Rate for such
  Interest Period

  	
   

  
	
   

  	
   

  	
  1.00 - Statutory
  Reserve Rate

  	
   

  

 

“Adjusted LIBOR Loan”
means a Eurodollar Loan bearing interest at a rate based on Adjusted LIBOR as
provided in Section 2.6(b).

 

“Administrative Agent”
means JPMorgan Chase Bank, N.A., acting in its capacity as administrative agent
for the Lenders, and any successor Administrative Agent appointed hereunder
pursuant to Section 9.7.

 

 

“Administrative Agent’s
Account” means the account of the Administrative Agent maintained by
the Administrative Agent at its office at 10 South Dearborn, Chicago,
Illinois  60603, Attention:  Saul Gierstikas, or such other account of the
Administrative Agent as is designated in writing from time to time by the
Administrative Agent to the Borrower and the Lenders for such purpose.

 

“Administrative
Questionnaire” means, with respect to each Lender, an administrative
questionnaire in the form prepared by the Administrative Agent and submitted to
the Administrative Agent duly completed by such Lender.

 

“Agreement”
means this 364-Day Revolving Credit Agreement, as the same may be amended,
restated and supplemented from time to time.

 

“Angolan Debt”
means the financing incurred for construction and mobilization of a drillship
for expected operations offshore Angola, as more particularly described on Schedule
5.15.

 

“Applicable Facility Fee
Rate” means, for any day, at such times as a rating (either express
or implied) by S&P and Moody’s is in effect on the Borrower’s non-credit
enhanced senior unsecured long-term debt, the percentage per annum set forth
opposite such debt rating:

 

	
  Debt Rating(S&P/ Moody’s)

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  A/A2 or above

  	
   

  	
  0.050

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  A-/A3

  	
   

  	
  0.060

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  BBB+/Baa1

  	
   

  	
  0.070

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  BBB/Baa2

  	
   

  	
  0.090

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  BBB-/Baa3

  	
   

  	
  0.125

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  BB+/Ba1 or below

  	
   

  	
  0.150

  	
  %

  

 

The Applicable Facility Fee Rate will be determined based upon the
ratings issued by S&P and Moody’s. If such ratings differ (i) by one
rating, the higher rating will apply to determine the Applicable Facility Fee
Rate, (ii) by two ratings, the rating which falls between the two ratings will
apply to determine the Applicable Facility Fee Rate, or (iii) by more than two
ratings, the rating which is one level above the lower of the two ratings will
apply to determine the Applicable Facility Fee Rate. If only one such rating is
issued by S&P or Moody’s, the Applicable Facility Fee Rate will be
determined by such rating. The Borrower shall give written notice to the
Administrative Agent of any changes to such ratings, within three (3) Business
Days thereof, and any change to the Applicable Facility Fee Rate shall be
effective on the date of the relevant change. Notwithstanding the foregoing, if
the Borrower shall at any time fail to have in effect at least one such rating
on the Borrower’s non-credit enhanced senior unsecured

 

2

 

long-term debt, the Borrower shall seek and obtain (if not already in
effect), within thirty (30) days after such rating first ceases to be in
effect, a corporate credit rating or a bank loan rating from Moody’s and/or
S&P (or if none of Moody’s and S&P issue such types of ratings or
ratings comparable thereto, from another nationally recognized rating agency
approved by each of the Borrower and the Administrative Agent), and the
Applicable Facility Fee Rate shall thereafter be based on such ratings in the
same manner as provided herein with respect to the Borrower’s senior unsecured
long-term debt rating (with the Applicable Facility Fee Rate in effect prior to
the issuance of such corporate credit rating or bank loan rating being the same
as the Applicable Facility Fee Rate in effect at the time the senior unsecured
long-term debt rating ceases to be in effect).

 

“Applicable Margin”
means, for any day, at such times as a rating (either express or implied) by
S&P and Moody’s is in effect on the Borrower’s non-credit enhanced senior
unsecured long-term debt, the percentage per annum set forth opposite such debt
rating:

 

	
  Debt Rating(S&P/Moody’s)

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  A/A2 or above

  	
   

  	
  0.200

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  A-/A3

  	
   

  	
  0.240

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  BBB+/Baa1

  	
   

  	
  0.280

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  BBB/Baa2

  	
   

  	
  0.410

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  BBB-/Baa3

  	
   

  	
  0.500

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  BB+/Ba1 or below

  	
   

  	
  0.600

  	
  %

  

 

provided, however, that if the
Final Maturity Date is extended pursuant to Section 2.14, then for any day on
or after the scheduled Commitment Termination Date, the applicable percentage
per annum shown above shall be increased by an additional 0.250%.

 

The Applicable Margin will be determined based upon the ratings issued
by S&P and Moody’s. If such ratings differ (i) by one rating, the higher
rating will apply to determine the Applicable Margin, (ii) by two ratings, the
rating which falls between the two ratings will apply to determine the
Applicable Margin, or (iii) by more than two ratings, the rating which is one
level above the lower of the two ratings will apply to determine the Applicable
Margin. If only one such rating is issued by S&P or Moody’s, the Applicable
Margin will be determined by such rating. The Borrower shall give written
notice to the Administrative Agent of any changes to such ratings, within three
(3) Business Days thereof, and any change to the Applicable Margin shall be
effective on the date of the relevant change. Notwithstanding the foregoing, if
the Borrower shall at any time fail to have in effect any such rating on the
Borrower’s non-credit enhanced senior unsecured long-term debt, the Borrower
shall seek and obtain (if not already in effect), within thirty (30) days after
such rating first ceases to be in effect, a corporate credit rating or a bank
loan rating from Moody’s and/or S&P (or if none of Moody’s and S&P
issue such types of

 

3

 

ratings or ratings comparable thereto, from another nationally
recognized rating agency approved by each of the Borrower and the
Administrative Agent), and the Applicable Margin shall thereafter be based on
such ratings in the same manner as provided herein with respect to the Borrower’s
senior unsecured long-term debt rating (with the Applicable Margin in effect
prior to the issuance of such corporate credit rating or bank loan rating being
the same as the Applicable Margin in effect at the time the senior unsecured long-term
debt rating ceases to be in effect).

 

“Applicable Utilization Fee Rate”
means, for any day, at such times as a rating (either express or implied) by
S&P and Moody’s is in effect on the Borrower’s non-credit enhanced senior
unsecured long-term debt, the percentage per annum set forth opposite such debt
rating:

 

	
  Debt Rating(S&P/Moody’s)

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  A/A2 or above

  	
   

  	
  0.050

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  A-/A3

  	
   

  	
  0.100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  BBB+/Baa1

  	
   

  	
  0.100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  BBB/Baa2

  	
   

  	
  0.100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  BBB-/Baa3

  	
   

  	
  0.100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  BB+/Ba1 or below

  	
   

  	
  0.100

  	
  %

  

 

The Applicable Utilization Fee Rate will be determined based upon the
ratings issued by S&P and Moody’s. If such ratings differ (i) by one
rating, the higher rating will apply to determine the Applicable Utilization
Fee Rate, (ii) by two ratings, the rating which falls between the two ratings
will apply to determine the Applicable Utilization Fee Rate, or (iii) by more
than two ratings, the rating which is one level above the lower of such two
ratings will apply to determine the Applicable Utilization Fee Rate. If only
one such rating is issued by S&P or Moody’s, the Applicable Utilization Fee
Rate will be determined by such rating. The Borrower shall give written notice
to the Administrative Agent of any changes to such ratings, within three (3)
Business Days thereof, and any change to the Applicable Utilization Fee Rate
shall be effective on the date of the relevant change. Notwithstanding the
foregoing, if the Borrower shall at any time fail to have in effect any such
rating on the Borrower’s non-credit enhanced senior unsecured long-term debt,
the Borrower shall seek and obtain (if not already in effect), within thirty
(30) days after such rating first ceases to be in effect, a corporate credit
rating or a bank loan rating from Moody’s and/or S&P (or if none of Moody’s
and S&P issue such types of ratings or ratings comparable thereto, from
another nationally recognized rating agency approved by each of the Borrower
and the Administrative Agent), and the Applicable Utilization Fee Rate shall
thereafter be based on such ratings in the same manner as provided herein with
respect to the Borrower’s senior unsecured long-term debt rating (with the
Applicable Utilization Fee Rate in effect prior to the issuance of such
corporate credit rating or bank loan rating being the same as the Applicable
Utilization Fee Rate in effect at the time the senior unsecured long-term debt
rating ceases to be in effect).

 

4

 

“Assignment Agreement”
means an agreement in substantially the form of Exhibit 10.10 whereby a
Lender conveys part or all of its Commitment and Loans to another Person that
is, or thereupon becomes, a Lender, or increases its Commitment and outstanding
Loans, pursuant to Section 10.10.

 

“Base Rate”
means for any day the greater of:

 

(i)  the
fluctuating commercial loan rate announced by the Administrative Agent from
time to time at its New York, New York office (or other corresponding office,
in the case of any successor Administrative Agent) as its prime rate or base
rate for U.S. Dollar loans in the United States of America in effect on such
day (which base rate may not be the lowest rate charged by such Lender on loans
to any of its customers), with any change in the Base Rate resulting from a
change in such announced rate to be effective on the date of the relevant
change; and

 

(ii)  the sum of
(x) the rate per annum (rounded upwards, if necessary, to the nearest 1/100th
of 1%) equal to the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers on such day, as published by the Federal Reserve Bank of New York
on the next Business Day, provided that
(A) if such day is not a Business Day, the rate on such transactions on the
immediately preceding Business Day as so published on the next Business Day
shall apply, and (B) if no such rate is published on such next Business Day,
the rate for such day shall be the average of the offered rates quoted to the
Administrative Agent by two (2) federal funds brokers of recognized standing on
such day for such transactions as selected by the Administrative Agent, plus
(y) a percentage per annum equal to one-half of one percent (1⁄2%) per annum.

 

“Base Rate Loan”
means a Revolving Loan bearing interest prior to maturity at the rate specified
in Section 2.6(a).

 

“Borrower” means
Transocean Inc., an exempted company incorporated under the laws of the Cayman
Islands, and its successors.

 

“Borrowing”
means any extension of credit of the same Type made by the Lenders on the same
date by way of Revolving Loans having a single Interest Period, including any
Borrowing advanced, continued or converted. A Borrowing is “advanced”
on the day the Lenders advance funds comprising such Borrowing to the Borrower,
is “continued” (in the case of Eurodollar
Loans) on the date a new Interest Period commences for such Borrowing, and is “converted” (in the case of Eurodollar Loans) when such
Borrowing is changed from one Type of Loan to the other, all as requested by
the Borrower pursuant to Section 2.3.

 

“Borrowing Multiple”
means, for any Loan, $100,000.

 

“Borrowing Request”
has the meaning ascribed to such term in Section 2.3(a).

 

5

 

“Bridge Credit Agreement”
means the Credit Agreement dated as of September 28, 2007 among the Borrower,
Goldman Sachs Credit Partners L.P., as administrative agent, and the lenders
parties thereto.

 

“Bridge Facility”
means the $15,000,000,000 term loan facility established for the Borrower
pursuant to the Bridge Credit Agreement.

 

“Business Day”
means any day other than a Saturday or Sunday on which banks are not authorized
or required to close in New York, New York and, if the applicable Business Day
relates to the advance or continuation of, conversion into, or payment on a
Eurodollar Borrowing, on which banks are not authorized or required to close in
London, England.

 

“Capitalized Lease
Obligations” means, for any Person, the aggregate amount of such
Person’s liabilities under all leases of real or personal property (or any
interest therein) which is required to be capitalized on the balance sheet of
such Person as determined in accordance with GAAP.

 

“Code” means the
Internal Revenue Code of 1986, as amended.

 

“Co-Documentation Agents”
means, collectively,
Credit Suisse, Cayman Islands Branch, and The Bank of Tokyo-Mitsubishi UFJ,
Ltd., in their capacities as co-documentation agents for the Lenders,
and any successor Co-Documentation Agents appointed pursuant to Section 9.7; provided, however, that
no such Co-Documentation Agent shall have any duties, responsibilities, or
obligations hereunder in such capacity.

 

“Co-Lead Arrangers” means,
collectively, J.P. Morgan Securities Inc. and Citigroup Global Markets Inc.,
acting in their capacities as co-lead arrangers and joint bookrunners for the
credit facility described in this Agreement; provided,
however, that no such Co-Lead Arrangers shall have any duties,
responsibilities, or obligations hereunder in such capacity.

 

“Commitment” means,
relative to any Lender, such Lender’s obligations to make Revolving Loans
pursuant to Section 2.1, initially in the amount and percentage set forth
opposite its signature hereto or pursuant to Section 10.10, as such obligations
may be reduced or increased from time to time as expressly provided pursuant to
this Agreement.

 

“Commitment Termination
Date” means the earliest of (i) December 1, 2008, (ii) the date on
which the Commitments are terminated in full or reduced to zero pursuant to
Section 2.12, and (iii) the occurrence of any Event of Default described in
Section 7.1(f) or (g) with respect to the Borrower or the occurrence and
continuance of any other Event of Default and either (x) the declaration of the
Loans to be due and payable pursuant to Section 7.2, or (y) in the absence of
such declaration, the giving of written notice by the Administrative Agent,
acting at the direction of the Required Lenders, to the Borrower pursuant to
Section 7.2 that the Commitments have been terminated.

 

“Compliance Certificate”
means a certificate in the form of Exhibit 6.6.

 

6

 

“Confidential Information
Memorandum” means the Confidential Information Memorandum of the
Borrower dated October 2007, as the same may be amended, restated and
supplemented from time to time and distributed to the Lenders prior to the
Effective Date.

 

“Consolidated EBITDA”
means, for the Borrower and its Subsidiaries, for any period, the sum,
determined on a consolidated basis, of (i) operating income plus, (ii) without duplication,
and to the extent reflected as a charge in the calculation (or determination)
of such operating income for such period, the sum of (a) depreciation,
depletion and amortization expense and (b) other non-cash charges reducing
operating income for such period (excluding any such non-cash charge to the
extent that it represents an accrual or reserve for potential cash charge in
any future period or amortization of a prepaid cash charge that was paid in any
prior period), less (iii) other
non-cash gains increasing operating income for such period (excluding any such
non-cash gain to the extent it represents the reversal of an accrual or reserve
for potential cash gain in any prior period), in each case determined in accordance
with GAAP for such period; it being understood and agreed that, with respect to
any period prior to the Merger, Consolidated EBITDA shall be calculated with
respect to such period on a pro forma basis using the historical consolidated
financial statements of GSF and its Subsidiaries and the consolidated financial
statements of the Borrower and its Subsidiaries (excluding GSF and its
Subsidiaries) which shall be reformulated as if the Merger had been consummated
at the beginning of such period.

 

“Consolidated Indebtedness”
means all Indebtedness of the Borrower and its Subsidiaries that would be
reflected on a consolidated balance sheet of such Persons prepared in
accordance with GAAP.

 

“Consolidated Indebtedness
to Total Tangible Capitalization Ratio” means, at any time, the
ratio of Consolidated Indebtedness at such time to Total Tangible
Capitalization at such time.

 

“Consolidated Net Assets”
means, as of any date of determination, an amount equal to the aggregate book
value of the assets of the Borrower, its Subsidiaries and, to the extent of the
equity interest of the Borrower and its Subsidiaries therein, SPVs at such
time, minus the current liabilities of the
Borrower and its Subsidiaries, all as determined on a consolidated basis in
accordance with GAAP based on the most recent quarterly or annual consolidated
financial statements of the Borrower referred to in Section 5.8 or delivered
(or publicly filed) as provided in Section 6.6(a), as the case may be.

 

“Consolidated Tangible Net
Worth” means, as of any date of determination, consolidated
shareholders equity of the Borrower and its Subsidiaries determined in
accordance with GAAP but excluding the effect on shareholders equity of
cumulative foreign exchange translation adjustments, and less
the net book amount of all assets of the Borrower and its Subsidiaries that
would be classified as intangible assets on the consolidated balance sheet of
the Borrower as of such date prepared in accordance with GAAP. For purposes of
this definition, SPVs shall be accounted for pursuant to the equity method of
accounting.

 

“Controlling Affiliate” means for
any Person, (i) any other Person that directly or indirectly through one or
more intermediaries controls, or is under common control with, such Person and
(ii) any other Person owning beneficially or controlling ten percent (10%) or
more of

 

7

 

the equity interests
having ordinary voting power for the election of directors of such Person. As
used in this definition, “control” means
the power, directly or indirectly, to direct or cause the direction of
management or policies of a Person (through ownership of voting securities or
other equity interests, by contract or otherwise).

 

“Co-Syndication Agent” means
Calyon New York Branch, in its capacity as co-syndication agent for the
Lenders, and any successor Co-Syndication Agent appointed pursuant to Section
9.7; provided, however, that such
Co-Syndication Agent shall have no duties, responsibilities or obligations
hereunder in such capacity.

 

“Currency Rate Protection
Agreement” means any foreign currency exchange and future
agreements, arrangements and options designed to protect against fluctuations
in currency exchange rates.

 

“Credit Documents”
means this Agreement, the Notes, and any Subsidiary Guaranties in effect from
time to time.

 

“Default” means
any event or condition the occurrence of which would, with the passage of time
or the giving of notice, or both, constitute an Event of Default.

 

“Dollar” and “U.S. Dollar” and the sign “$”
mean lawful money of the United States of America.

 

“Effective Date”
means the date this Agreement shall become effective as provided in Section
4.1.

 

“Employee Benefit Plan” means any
“employee benefit plan” as defined in Section 3(3) of ERISA which is or was
sponsored, maintained or contributed to by, or required to be contributed to
by, the Borrower, any of its Subsidiaries or any of their respective ERISA
Affiliates.

 

“Environmental Claims”
means any and all administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of non-compliance or violation,
investigations or proceedings relating to any Environmental Law (“Claims”) or any permit issued under any Environmental Law,
including, without limitation, (i) any and all Claims by governmental or
regulatory authorities for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law, and (ii)
any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting
from Hazardous Materials or arising from alleged injury or threat of injury to
the environment.

 

“Environmental Law”
means any federal, state or local statute, law, rule, regulation, ordinance,
code, policy or rule of common law now or hereafter in effect, including any
judicial or administrative order, consent, decree or judgment, relating to the
environment.

 

8

 

“ERISA” means
the Employee Retirement Income Security Act of 1974, as amended, and any
successor thereto.

 

“ERISA Affiliate”
means, as applied to any Person, (i) any corporation which is a member of a
controlled group of corporations within the meaning of Section 414(b) of the
Code of which that Person is a member; (ii) any trade or business (whether or
not incorporated) which is a member of a group of trades or businesses under
common control within the meaning of Section 414(c) of the Code of which that
Person is a member; and (iii) any member of an affiliated service group within
the meaning of Section 414(m) or (o) of the Code of which that Person, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above is a member. Any former ERISA Affiliate of the Borrower or
any of its Subsidiaries shall continue to be considered an ERISA Affiliate of
the Borrower or any such Subsidiary within the meaning of this definition with
respect to the period such entity was an ERISA Affiliate of the Borrower or
such Subsidiary and with respect to liabilities arising after such period for
which the Borrower or such Subsidiary could be liable under the Code or ERISA.

 

“ERISA Event”  means (i) a “reportable event” within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan (excluding those for which the provision for 30-day notice to the
PBGC has been waived by regulation); (ii) the failure to meet the minimum
funding standard of Section 412 of the Code with respect to any Pension Plan
(whether or not waived in accordance with Section 412(d) of the Code) or the
failure to make by its due date a required installment under Section 412(m) of
the Code with respect to any Pension Plan or the failure to make any required
contribution to a Multiemployer Plan; (iii) the provision by the administrator
of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of
intent to terminate such plan in a distress termination described in Section
4041(c) of ERISA; (iv) the withdrawal by the Borrower, any of its Subsidiaries
or any of their respective ERISA Affiliates from any Pension Plan with two or
more contributing sponsors or the termination of any such Pension Plan
resulting in liability to the Borrower, any of its Subsidiaries or any of their
respective ERISA Affiliates pursuant to Section 4063 or 4064 of ERISA; (v) the
institution by the PBGC of proceedings to terminate any Pension Plan, or the
occurrence of any event or condition which might constitute grounds under ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan; (vi) the imposition of liability on the Borrower, any of its
Subsidiaries or any of their respective ERISA Affiliates pursuant to Section
4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of
ERISA; (vii) the withdrawal of the Borrower, any of its Subsidiaries or any of
their respective ERISA Affiliates in a complete or partial withdrawal (within
the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if
there is any potential liability therefor, or the receipt by the Borrower, any
of its Subsidiaries or any of their respective ERISA Affiliates of notice from
any Multiemployer Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA, or that it intends to terminate or has
terminated under Section 4041A or 4042 of ERISA; (viii) the occurrence of an
act or omission which could give rise to the imposition on the Borrower or any
of its Subsidiaries of fines, penalties, taxes or related charges under Chapter
43 of the Code or under Section 409, Section 502(c), (i) or (l), or Section
4071 of ERISA in respect of any Employee Benefit Plan; (ix) the assertion of a material
claim (other than routine claims for benefits) against any Employee Benefit
Plan other than a Multiemployer Plan or the assets thereof, or against the
Borrower, any

 

9

 

of
its Subsidiaries or any of their respective ERISA Affiliates in connection with
any Employee Benefit Plan; (x) receipt from the U.S. Internal Revenue Service
of notice of the failure of any Pension Plan (or any other Employee Benefit
Plan intended to be qualified under Section 401(a) of the Code) to qualify
under Section 401(a) of the Code, or the failure of any trust forming part of
any Pension Plan to qualify for exemption from taxation under Section 501(a) of
the Code; or (xi) the imposition of a Lien pursuant to Section 401(a)(29) or
412(n) of the Code or pursuant to ERISA with respect to any Pension Plan.

 

“Eurodollar”, when used in
reference to any Loan or Borrowing, means such Loan, or the Loans comprising
such Borrowing, shall bear interest at a rate determined by reference to
Adjusted LIBOR and the Applicable Margin.

 

“Eurodollar Loan”
means a Revolving Loan bearing interest before maturity at the rate specified
in Section 2.6(b).

 

“Event of Default”
means any of the events or circumstances specified in Section 7.1.

 

“Final Maturity Date” means, at
any time (a) the Commitment Termination Date or (b) if the Final Maturity Date
is extended pursuant to Section 2.14, the earlier of (i) the date requested by
the Borrower pursuant to Section 2.14, but in no event shall such date be later
than the first anniversary of the scheduled Commitment Termination Date, or
(ii) the occurrence of any Event of Default described in Section 7.1(f) or (g)
with respect to the Borrower or the occurrence and continuation of any other
Event of Default and either (x) the declaration of the Loans to be due and
payable pursuant to Section 7.2 as a result of such other Event of Default or
(y) in the absence of such declaration, the giving of written notice by the
Administrative Agent, acting at the direction of the Required Lenders, to the
Borrower pursuant to Section 7.2 that the Commitments have been terminated.

 

“Foreign Plan”
means any pension, profit sharing, deferred compensation, or other employee
benefit plan, program or arrangement maintained by any foreign Subsidiary of
the Borrower which, under applicable local law, is required to be funded
through a trust or other funding vehicle, but shall not include any benefit
provided by a foreign government or its agencies.

 

“Five-Year Revolving Credit Agreement”
means that certain Five-Year Revolving Credit Agreement dated as of November
27, 2007, among the Borrower, JPMorgan Chase Bank, N.A., as Administrative
Agent, and the lenders that are parties thereto (as the same may be amended,
supplemented and restated from time to time).

 

“GAAP” means
generally accepted accounting principles from time to time in effect as set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and the statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements, opinions and pronouncements by such other entity as may be approved
by a significant segment of the U.S. accounting profession.

 

10

 

“Governmental Authority” means
the government of the United States of America, any other nation or any
political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other
entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

 

“GSF” means GlobalSantaFe
Corporation, a Cayman Islands company.

 

“Guarantor”
means any Subsidiary of the Borrower required to execute and deliver a
Subsidiary Guaranty hereunder pursuant to Section 6.12, in each case unless and
until the relevant Subsidiary Guaranty is released pursuant to Section 6.12.

 

“Guaranty” by
any Person means all contractual obligations (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection
or similar transactions in the ordinary course of business) of such Person
guaranteeing any Indebtedness of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly, including,
without limitation, all obligations incurred through an agreement, contingent
or otherwise, by such Person: (i) to purchase such Indebtedness or to purchase
any property or assets constituting security therefor, primarily for the
purpose of assuring the owner of such Indebtedness of the ability of the
primary obligor to make payment of such Indebtedness; or (ii) to advance or
supply funds (x) for the purchase or payment of such Indebtedness, or (y) to
maintain working capital or other balance sheet condition, or otherwise to
advance or make available funds for the purchase or payment of such
Indebtedness, in each case primarily for the purpose of assuring the owner of
such Indebtedness of the ability of the primary obligor to make payment of such
Indebtedness; or (iii) to lease property, or to purchase securities or other
property or services, of the primary obligor, primarily for the purpose of
assuring the owner of such Indebtedness of the ability of the primary obligor
to make payment of such Indebtedness; or (iv) otherwise to assure the owner of
such Indebtedness of the primary obligor against loss in respect thereof. For
the purpose of all computations made under this Agreement, the amount of a
Guaranty in respect of any Indebtedness shall be deemed to be equal to the
amount that would apply if such Indebtedness was the direct obligation of such
Person rather than the primary obligor or, if less, the maximum aggregate
potential liability of such Person under the terms of the Guaranty.

 

“Hazardous Material”
has the meaning ascribed to such term in the Comprehensive Environmental
Response Compensation and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Acts of 1986, and shall also include petroleum,
including crude oil or any fraction thereof, or any other substance defined as “hazardous” or “toxic” or words
with similar meaning and effect under any Environmental Law applicable to the
Borrower or any of its Subsidiaries.

 

“Highest Lawful Rate”
means the maximum nonusurious interest rate, if any, that any time or from time
to time may be contracted for, taken, reserved, charged or received on any
Loans, under laws applicable to any of the Lenders which are presently in
effect or, to the extent allowed by applicable law, under such laws which may
hereafter be in effect and which allow a higher maximum nonusurious interest
rate than applicable laws now allow. Determination of the

 

11

 

rate of interest for the
purpose of determining whether any Loans are usurious under all applicable laws
shall be made by amortizing, prorating, allocating, and spreading, in equal
parts during the period of the full stated term of the Loans, all interest at
any time contracted for, taken, reserved, charged or received from the Borrower
in connection with the Loans.

 

“Indebtedness”
means, for any Person, the following obligations of such Person, without
duplication:  (i) obligations of such
Person for borrowed money; (ii) obligations of such Person representing the
deferred purchase price of property or services other than accounts payable and
accrued liabilities arising in the ordinary course of business and other than
amounts which are being contested in good faith and for which reserves in
conformity with GAAP have been provided; (iii) obligations of such Person
evidenced by bonds, notes, bankers acceptances, debentures or other similar
instruments of such Person, or obligations of such Person arising, whether
absolute or contingent, out of letters of credit issued for such Person’s
account or pursuant to such Person’s application securing Indebtedness; (iv)
obligations of other Persons, whether or not assumed, secured by Liens (other
than Permitted Liens) upon property or payable out of the proceeds or
production from property now or hereafter owned or acquired by such Person, but
only to the extent of such property’s fair market value; (v) Capitalized Lease
Obligations of such Person; (vi) obligations under Interest Rate Protection
Agreements and Currency Rate Protection Agreements; and (vii) obligations of
such Person pursuant to a Guaranty of any of the foregoing obligations of
another Person; provided, however, Indebtedness
shall exclude Non-recourse Debt and any Indebtedness attributable to the
mark-to-market treatment of obligations of the type described in clause (vi) in
the definition of Indebtedness and any actual fair value adjustment arising
from any Interest Rate Protection Agreements and Currency Rate Protection
Agreements that have been cancelled or otherwise terminated before their
scheduled expiration, in each case in respect of Interest Rate Protection
Agreements and Currency Rate Protection Agreements entered into in the ordinary
course of business and not for investment or speculative purposes. For purposes
of this Agreement, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture to the extent such
Indebtedness is recourse to such Person.

 

“Interest Payment Date”
means (a) with respect to any Base Rate Loan, the last day of each March, June,
September and December and (b) with respect to any Eurodollar Loan, the last
day of the Interest Period applicable to the Borrowing of which such Loan is a
part and, in the case of a Eurodollar Borrowing with an Interest Period of more
than three months’ duration, each day prior to the last day of such Interest
Period that occurs at intervals of three months’ duration after the first day
of such Interest Period.

 

“Interest Period”
means with respect to any Eurodollar Borrowing, the period commencing on the
date of such Borrowing and ending on the numerically corresponding day in the
calendar month that is one, two, three or six months thereafter (or if
available from each Lender making a Loan as part of such Borrowing, any other
period), in each case as the Borrower may elect. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and,
in the case of a Borrowing, thereafter shall be the effective date of the most
recent conversion or continuation of such Borrowing.

 

12

 

“Interest Rate Protection
Agreement” means any interest rate swap, interest rate cap, interest
rate collar, or other interest rate hedging agreement or arrangement designed
to protect against fluctuations in interest rates.

 

“Lender” is
defined in the preamble.

 

“Lending Office”
means the “Lending Office”
of such Lender (or an Affiliate of such Lender) designated for each Type of
Loan in the Administrative Questionnaire submitted by such Lender or such other
office of such Lender (or an Affiliate of such Lender) as such Lender may from
time to time specify to the Administrative Agent and the Borrower as the office
by which its Loans of such Type are to be made and maintained.

 

“Leverage Ratio”
means, at any date of determination, the ratio of
(a) (i) Consolidated Indebtedness of the Borrower and its
Subsidiaries as at the end of the then most recently ended fiscal quarter of
the Borrower minus (ii) the aggregate amount as at such date of
unrestricted cash on which no Lien or restriction whatsoever exists (other than
usual and customary rights of set-off for deposit account fees and expenses
required by financial institutions where such cash is deposited) and cash
deposited in restricted accounts that require the payee of such Indebtedness to
consent to withdrawal thereof and earmarked for amortization of such
Indebtedness (other than the portion thereof payable against interest) to
(b) Consolidated EBITDA for the then most recently ended fiscal quarter of
the Borrower and the immediately preceding three fiscal quarters.

 

“LIBOR Rate”
means, for any Interest Period for each Eurodollar Loan, an interest rate per
annum equal to the rate per annum appearing on Reuters LIBOR01 Page (or any
successor page) as the London interbank offered rate for deposits in U.S.
dollars at approximately 11:00 A.M. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest Period
or, if for any reason such rate is not available, the average (rounded to the
nearest 1/100 of 1% per annum) of the rate per annum at which deposits in U.S.
dollars are offered by the principal office of each of the Reference Banks in
London, England to prime banks in the London interbank market at 11:00 A.M.
(London time) two Business Days before the first day of such Interest Period in
an amount substantially equal to such Reference Bank’s Eurodollar Loan
comprising part of such Borrowing to be outstanding during such Interest Period
and for a period equal to such Interest Period. If Reuters LIBOR01 Page (or any
successor page) is unavailable, the LIBOR Rate for any Interest Period for each
Eurodollar Loan comprising part of the same Borrowing shall be determined by
the Administrative Agent on the basis of applicable rates furnished to and
received by the Administrative Agent from the Reference Banks, such rates being
the rates at which such Reference Banks are offered deposits in U.S. dollars of
approximately $5,000,000 for a period approximately equal to such Interest
Period in the London interbank market at 11:00 A.M. (London time) two Business
Days before the first day of such Interest Period.

 

“Lien” means any
interest in any property or asset in favor of a Person other than the owner of
such property or asset and securing an obligation owed to, or a claim by, such
Person, whether such interest is based on the common law, statute or contract,
including, but not limited to, the security interest lien arising from a
mortgage, encumbrance, pledge, conditional sale, security agreement or trust
receipt, or a lease, consignment or bailment for security purposes.

 

13

 

“Loan” means (i)
a Base Rate Loan or (ii) a Eurodollar Loan, as the case may be, and “Loans” means two or more of any such Loans.

 

“Material Adverse Effect”
means a material adverse effect on (i) the business, assets, operations or
condition of the Borrower and its Subsidiaries taken as a whole, or (ii) the
Borrower’s ability to perform any of its payment obligations under the
Agreement or the Notes.

 

“Merger” means
the merger (by way of a scheme of arrangement qualifying as an amalgamation
under the Companies Law of the Cayman Islands) of GSF with Merger Sub pursuant
to the Merger Agreement.

 

“Merger Agreement”
means that certain Agreement and Plan of Merger dated as of July 21, 2007 among
the Borrower, GSF and Merger Sub, including all schedules, exhibits and annexes
thereto.

 

“Merger Documentation”
means, collectively, the Merger Agreement and all material documents (including
all schedules, exhibits, and annexes thereto) affecting the terms thereof or
entered into in connection therewith.

 

“Merger Sub”
means Transocean Worldwide Inc., a Cayman Islands company wholly owned by the
Borrower.

 

“Merger Transactions”
means the Merger, the reclassification of the Borrower’s ordinary shares, and
the related transactions as provided in the Merger Agreement.

 

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

 

“Multiemployer Plan” means any Employee Benefit Plan that is
a “multiemployer plan” as defined in Section 3(37) of ERISA

 

“Non-recourse Debt”
means with respect to any Person (i) obligations of such Person against which
the obligee has no recourse to such Person except as to certain named or
described present or future assets or interests of such Person, and
(ii) the obligations of SPVs to the extent the obligee thereof has no
recourse to the Borrower or any of its Subsidiaries, except as to certain
specified present or future assets or interests of SPVs.

 

“Note” means any
of the promissory notes of the Borrower defined in Section 2.8.

 

“Obligations”
means all obligations of the Borrower to pay fees, costs and expenses
hereunder, to pay principal or interest on Loans and to pay any other
obligations to the Administrative Agent or any Lender arising under any Credit
Document.

 

“Other Agents”
means, collectively, the Syndication Agent, the Co-Syndication Agent, and the
Co-Documentation Agents.

 

14

 

“Pacific Drilling Debt” means the Indebtedness incurred to
finance up to 50% of the construction and mobilization costs of two drillships
under construction in Korea to be owned by the Pacific Drilling joint venture,
as more particularly described on Schedule 5.15.

 

“Patriot Act” means the Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001, Pub. L. 107-56, signed into law October 26,
2001, as amended from time to time.

 

“PBGC” means the
Pension Benefit Guaranty Corporation or any successor thereto.

 

“Pension Plan”
means any Employee Benefit Plan, other than a Multiemployer Plan, that is
subject to Section 412 of the Code or Section 302 of ERISA.

 

“Percentage”
means, for each Lender, the percentage of the Commitments represented by such
Lender’s Commitment; provided, that,
if the Commitments are terminated, each Lender’s Percentage shall be calculated
based on such Lender’s pro rata share of the total Loans then outstanding or,
if no Loans are then outstanding, its Commitment in effect immediately before
such termination, subject to any assignments by such Lender of Obligations
pursuant to Section 10.10.

 

“Performance Guaranties”
means all Guaranties of the Borrower or any of its Subsidiaries delivered in
connection with the construction financing of drill ships, offshore mobile
drilling units or offshore drilling rigs for which firm drilling contracts have
been obtained by the Borrower, any of its Subsidiaries or a SPV.

 

“Performance Letters of
Credit” means all letters of credit for the account of the Borrower,
any Subsidiary or a SPV issued as support for Non-recourse Debt or a
Performance Guaranty.

 

“Permitted Business”
has the meaning ascribed to such term in Section 6.8.

 

“Permitted Liens”
means the Liens permitted as described in Section 6.11.

 

“Person” means
an individual, partnership, corporation, limited liability company,
association, trust, unincorporated organization or any other entity or
organization, including a government or any agency or political subdivision
thereof.

 

“Plan” means an
employee pension benefit plan covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code that is either (i)
maintained by the Borrower or any of its Subsidiaries, or (ii) maintained
pursuant to a collective bargaining agreement or any other arrangement under
which more than one employer makes contributions and to which the Borrower or
any of its Subsidiaries is then making or accruing an obligation to make
contributions or has within the preceding five (5) plan years made or had an
obligation to make contributions.

 

15

 

“Reference Banks” means JPMorgan
Chase Bank, N.A. and Citibank, N.A. or if any such Lender assigns all of its
Commitment and the Loans owing to it in accordance with Section 10.10, such
other Lender as may be designated by the Administrative Agent and approved by
the Borrower (such approval not to be unreasonably withheld).

 

“Required Lenders”
means, Lenders having Revolving Credit Exposures and unused Commitments
representing more than 50% of the sum of the total Revolving Credit Exposures
and unused Commitments at such time or, if the Commitments have been terminated
or expired, Lenders having more than 50% of the sum of the total Revolving
Credit Exposures of all Lenders.

 

“Revolving Credit” means the
credit facility for making Revolving Loans described in Sections 2.1.

 

“Revolving Credit Commitment Amount”
means an amount equal to $1,500,000,000, as such amount may be reduced from
time to time pursuant to the terms of this Agreement.

 

“Revolving Credit Exposure”
means, with respect to any Lender at any time, the sum at such time, without
duplication, of such Lender’s applicable Percentage of the principal amounts of
the outstanding Revolving Loans.

 

“Revolving Loan” means each of
the revolving loans defined in Section 2.1.

 

“Revolving Obligations” means the
sum of the principal amount of all Revolving Loans outstanding.

 

“Sale-Leaseback Transaction”
means any arrangement whereby the Borrower or a Subsidiary shall sell or
transfer any property, real or personal, used or useful in its business,
whether now owned or hereafter acquired, and thereafter rent or lease property that
it intends to use for substantially the same purpose or purposes as the
property sold or transferred provided,  however, Sale-Leaseback Transaction shall exclude any
transaction between (i) the Borrower and any of its Subsidiaries, and (ii) any
Subsidiary of the Borrower and any other Subsidiary of the Borrower.

 

“S&P” means
Standard & Poor’s Ratings Group or any successor thereto.

 

“SPV”  means any Person that is designated by the
Borrower as a SPV, provided  that the Borrower shall not designate as a SPV any
Subsidiary that owns, directly or indirectly, any other Subsidiary that has
total assets (including assets of any Subsidiaries of such other Subsidiary,
but excluding any assets that would be eliminated in consolidation with the
Borrower and its Subsidiaries) which equates to at least five percent (5%) of
the Borrower’s Total Assets, or that had net income (including net income of
any Subsidiaries of such other Subsidiary, all before discontinued operations
and income or loss resulting from extraordinary items, but excluding revenues
and expenses that would be eliminated in consolidation with the Borrower and
its Subsidiaries and excluding any loss or gain resulting from the early
extinguishment of Indebtedness) during the most recently completed fiscal year
of the Borrower in excess of the

 

16

 

greater of (i)
$1,000,000, and (ii) fifteen percent (15%) of the net income (before
discontinued operations and income or loss resulting from extraordinary items
and excluding any loss or gain resulting from the early extinguishment of
Indebtedness) for the Borrower and its Subsidiaries, all as determined on a
consolidated basis in accordance with GAAP during such fiscal year of the
Borrower. The Borrower may elect to treat any Subsidiary as a SPV (provided
such Subsidiary would otherwise qualify as such), and may rescind any such
prior election, by giving written notice thereof to the Administrative Agent
specifying the name of such Subsidiary or SPV, as the case may be, and the
effective date of such election, which shall be a date within sixty (60) days
after the date such notice is given. The election to treat a particular Person
as a SPV may only be made once.

 

“Significant Subsidiary” has the
meaning ascribed to it under Regulation S-X promulgated under the Securities
Exchange Act of 1934, as amended.

 

“Statutory Reserve Rate” means,
with respect to any currency, the aggregate of the maximum reserve, liquid
asset or similar percentages (including any marginal, special, emergency or
supplemental reserves) expressed as a decimal established by any Governmental
Authority of the United States or of the jurisdiction of such currency or any
jurisdiction in which Loans in such currency are made to which banks in such
jurisdiction are subject for any category of deposits or liabilities
customarily used to fund loans in such currency or by reference to which
interest rates applicable to loans in such currency are determined. Such
reserve, liquid asset or similar percentages shall include those imposed
pursuant to Regulation D of the Board of Governors of the Federal Reserve
System. Eurodollar Loans shall be deemed to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under Regulation D or any
other applicable law, rule or regulation. The Statutory Reserve Rate shall be
adjusted automatically on and as of the effective date of any change in any
reserve percentage.

 

“Sub-Agent” means any affiliate
or correspondent bank of the Administrative Agent designated by it to perform
any duties or responsibilities of the Administrative Agent under this Agreement
and the other Credit Documents.

 

“Subsidiary”
means, for any Person, any other Person (other than, except in the context of
Section 6.6(a), a SPV) of which more than fifty percent (50%) of the
outstanding stock or comparable equity interests having ordinary voting power
for the election of the board of directors of such corporation, any managers of
such limited liability company or similar governing body (irrespective of
whether or not at the time stock or other equity interests of any other class
or classes of such corporation or other entity shall have or might have voting
power by reason of the happening of any contingency), is at the time directly
or indirectly owned by such former Person or by one or more of its
Subsidiaries. Without limiting the foregoing, upon the effective time of the
Merger, all Subsidiaries of GSF at the effective time of the Merger shall have
become Subsidiaries of the Borrower.

 

“Subsidiary Debt Basket
Amount” has the meaning ascribed to such term in Section 6.12(i).

 

17

 

“Subsidiary Guaranty”
means any Guaranty of any Subsidiary delivered pursuant to Section 6.12(k).

 

“Syndication Agent” means Citibank, N.A., acting in its capacity
as syndication agent for the Lenders, and any successor Syndication Agent
appointed hereunder pursuant to Section 9.7; provided,
however, that the Syndication Agent shall not have any duties,
responsibilities, or obligations hereunder in such capacity.

 

“Taxes” has the
meaning set forth in Section 5.10.

 

“Total Assets”
means, as of any date of determination, the aggregate book value of the assets
of the Borrower and its Subsidiaries determined on a consolidated basis in
accordance with GAAP as of such date.

 

“Total Tangible
Capitalization” means, as of any date of determination, the sum of
Consolidated Indebtedness plus
Consolidated Tangible Net Worth as of such date.

 

“Type”, when used in reference to
any Loan or Borrowing, refers to whether the rate of interest on such Loan, or
on the Loans comprising such Borrowing, is determined by reference to Adjusted
LIBOR or the Base Rate.

 

“Unfunded Vested
Liabilities” means, for any Plan at any time, the amount (if any) by
which the present value of all vested nonforfeitable accrued benefits under
such Plan (determined on the basis of the actuarial assumptions specified for
funding purposes in the most recent actuarial valuation for such Plan) exceeds
the fair market value of all Plan assets allocable to such benefits, determined
as of the then most recent valuation date for such Plan, but only to the extent
that such excess represents a potential liability of the Borrower or any of its
Subsidiaries to the PBGC or such Plan.

 

“Withdrawal Liability” shall mean liability to a
Multiemployer Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title
IV of ERISA.

 

Section 1.2.            Time
of Day.  Unless otherwise expressly
provided, all references to time of day in this Agreement and the other Credit
Documents shall be references to New York, New York time.

 

Section 1.3.            Accounting
Terms; GAAP.  Except as otherwise
expressly provided herein, and subject to the provisions of Section 10.20, all
terms of an accounting or financial nature shall be construed in accordance
with GAAP, as in effect from time to time.

 

ARTICLE
2.          THE CREDIT FACILITIES.

 

Section 2.1.            Commitments
for Revolving Loans.  Subject to the
terms and conditions hereof, each Lender severally and not jointly agrees to
make one or more loans (each a “Revolving Loan”)
to the Borrower from time to time prior to the Commitment Termination

 

18

 

Date applicable to such Lender on a revolving basis in an aggregate
amount not to exceed at any time outstanding an amount equal to its Commitment,
subject to any reductions thereof pursuant to the terms of this Agreement; provided, however, that
no Lender shall be required to make any Revolving Loan if, after giving effect
thereto, (i) the aggregate principal amount of the Revolving Loans of all Lenders
would thereby exceed the Revolving Credit Commitment Amount then in effect; or
(ii) the Revolving Credit Exposure of such Lender would thereby exceed its
Commitment then in effect. Each Borrowing of Revolving Loans shall be made
ratably from the Lenders in proportion to their respective Percentages.
Revolving Loans of each Lender may be repaid, in whole or in part, and all or
any portion of the principal amounts thereof reborrowed, before the Commitment
Termination Date applicable to such Lender, subject to the terms and conditions
hereof.

 

Section 2.2.            Types
of Revolving Loans and Minimum Borrowing Amounts.  Borrowings of Revolving Loans may be
outstanding as either Base Rate Loans or Adjusted LIBOR Loans, as selected by
the Borrower pursuant to Section 2.3. Each Borrowing of Base Rate Loans shall
be in an amount of not less than $1,000,000 and each Borrowing of Adjusted
LIBOR Loans shall be in an amount of not less than $5,000,000 and in an
integral multiple of the Borrowing Multiple.

 

Section 2.3.            Manner
of Borrowings; Continuations and Conversions of Borrowings.

 

(a)           Notice of Revolving Loan
Borrowings. The Borrower shall give notice to the Administrative Agent by
no later than (i) 12:00 P.M. at least three (3) Business Days before the date
on which the Borrower requests the Lenders to advance a Borrowing of Eurodollar
Loans, and (ii) 12:00 P.M. on the date the Borrower requests the Lenders to
advance a Borrowing of Base Rate Loans, in each case pursuant to a duly
completed Borrowing Request substantially in the form of Exhibit 2.3
(each a “Borrowing Request”) executed on behalf
of Borrower by two of its officers.

 

(b)           Notice of Continuation or
Conversion of Outstanding Borrowings. The Borrower may from time to time
elect to change or continue the type of interest rate borne by each Revolving
Loan Borrowing or, subject to the minimum amount requirements in Section 2.2
for each outstanding Revolving Loan Borrowing, a portion thereof, as
follows:  (i) if such Borrowing is of
Eurodollar Loans, the Borrower may continue part or all of such Borrowing as
Eurodollar Loans for an Interest Period specified by the Borrower or convert
part or all of such Borrowing into Base Rate Loans on the last day of the
Interest Period applicable thereto, or the Borrower may earlier convert part or
all of such Borrowing into Base Rate Loans so long as it pays the breakage fees
and funding losses provided in Section 2.11; and (ii) if such Borrowing is of
Base Rate Loans, the Borrower may convert all or part of such Borrowing into
Eurodollar Loans for an Interest Period specified by the Borrower on any
Business Day, in each case pursuant to notices of continuation or conversion as
set forth below. The Borrower may select multiple Interest Periods for the
Eurodollar Loans constituting any such particular Borrowing, provided that at no time shall the number of different
Interest Periods for outstanding Eurodollar Loans exceed twenty (20) (it being
understood for such purposes that (x) Interest Periods of the same duration,
but commencing on different dates, shall be counted as different Interest
Periods, and (y) all Interest Periods commencing on the same date and of the
same duration shall be

 

19

 

counted as one Interest Period regardless of the
number of Borrowings or Loans involved. Notices of the continuation of such
Eurodollar Loans for an additional Interest Period or of the conversion of part
or all of such Eurodollar Loans into Base Rate Loans or of such Base Rate Loans
into Eurodollar Loans must be given by no later than 12:00 P.M. at least three
(3) Business Days with respect to Eurodollar Loans before the date of the
requested continuation or conversion.

 

(c)           Manner of Notice. The Borrower
shall give such notices concerning the advance, continuation, or conversion of
a Borrowing pursuant to this Section 2.3 by telephone or facsimile (which
notice shall be irrevocable once given and, if by telephone, shall be promptly
confirmed in writing) pursuant to a Borrowing Request which shall specify the
date of the requested advance, continuation or conversion (which shall be a
Business Day), the amount and currency of the requested Borrowing, whether such
Borrowing is to be advanced, continued, or converted, the type of Loans to comprise
such new, continued or converted Borrowing and, if such Borrowing is to be
comprised of Eurodollar Loans, the Interest Period applicable thereto. The
Borrower agrees that the Administrative Agent may rely on any such telephonic
or facsimile notice given by any Person it in good faith believes is an
authorized representative of the Borrower without the necessity of independent
investigation and that, if any such notice by telephone conflicts with any
written confirmation, such telephonic notice shall govern if the Administrative
Agent has acted in reliance thereon.

 

(d)           Notice to the Lenders. The
Administrative Agent shall give prompt telephonic, telex or facsimile notice to
each Lender of any notice received pursuant to this Section 2.3 relating to a Revolving
Loan Borrowing. The Administrative Agent shall give notice to the Borrower and
each Lender by like means of the interest rate applicable to each Borrowing of
Eurodollar Loans (but, if such notice is given by telephone, the Administrative
Agent shall confirm such rate in writing) promptly after the Administrative
Agent has made such determination.

 

(e)           Borrower’s Failure to Notify.
If the Borrower fails to give notice pursuant to Section 2.3(a) of the
continuation or conversion of any outstanding principal amount of a Borrowing
of Eurodollar Loans and has not notified the Administrative Agent by 12:00 P.M.
at least three (3) Business Days before the last day of the Interest Period for
any Borrowing of Eurodollar Loans that it intends to repay such Borrowing, the
Borrower shall be deemed to have requested the continuation of such Borrowing
as a Eurodollar Loan with an Interest Period of one (1) month so long as no
Event of Default shall have occurred and be continuing or would occur as a
result of such Borrowing but otherwise disregarding the conditions to
Borrowings set forth in Section 4.2. Upon the occurrence and during the
continuance of any Event of Default, and upon notice thereof from the
Administrative Agent to the Borrower each Eurodollar Loan will automatically,
on the last day of the then existing Interest Period therefor, convert into a
Base Rate Loan.

 

(f)            Conversion. If the Borrower
shall elect to convert any particular Borrowing pursuant to this Section
2.3  from one Type of Loan to the other
only in part, then, from and after the date on which such conversion shall be
effective, such particular Borrowing shall, for all purposes of this Agreement
(including, without limitation, for purposes of subsequent

 

20

 

application of this sentence) be deemed to instead
constitute two Borrowings (each originally advanced on the same date as such
particular Borrowing), one comprised of (subject to subsequent conversion in
accordance with this Agreement) Eurodollar Loans in an aggregate principal
amount equal to the portion of such Borrowing so elected by the Borrower to be
comprised of Eurodollar Loans and the second comprised of (subject to
subsequent conversion in accordance with this Agreement) Base Rate Loans in an
aggregate principal amount equal to the portion of such particular Borrowing so
elected by the Borrower to be comprised of Base Rate Loans. If the Borrower
shall elect to have multiple Interest Periods apply to any such particular Borrowing
comprised of Eurodollar Loans, then, from and after the date such multiple
Interest Periods commence, such particular Borrowing shall, for all purposes of
this Agreement (including, without limitation, for purposes of subsequent
application of this sentence), be deemed to constitute a number of separate
Borrowings (each originally commencing on the same date as such particular
Borrowing) equal to the number of, and corresponding to, the different Interest
Periods so selected, each such deemed separate Borrowing corresponding to a
particular selected Interest Period comprised of (subject to subsequent
conversion in accordance with this Agreement) Eurodollar Loans in an aggregate
principal amount equal to the portion of such particular Borrowing so elected
by the Borrower to have such Interest Period. This Section 2.3(f) shall be
applied appropriately in the event that the Borrower shall make the elections
described in the two preceding sentences at the same time with respect to the
same particular Borrowing.

 

Section 2.4.            Interest
Periods.  As provided in Section 2.3,
at the time of each request for a Borrowing of Eurodollar Loans, or for the
continuation or conversion of any Borrowing of Eurodollar Loans, the Borrower
shall select the Interest Period(s) to be applicable to such Loans from among
the available options, subject to the limitations in Section 2.3; provided, however, that:

 

(i)            the
Borrower may not select an Interest Period that extends beyond the Commitment
Termination Date or, if later, the Final Maturity Date;

 

(ii)           whenever
the last day of any Interest Period would otherwise be a day that is not a
Business Day, the last day of such Interest Period shall either be (i) extended
to the next succeeding Business Day, or (ii) in the case of Eurodollar Loans
only, reduced to the immediately preceding Business Day if the next succeeding
Business Day is in the next calendar month; and

 

(iii)          for
purposes of determining an Interest Period, a month means a period starting on
one day in a calendar month and ending on the numerically corresponding day in
the next calendar month; provided, however,
that if there is no such numerically corresponding day in the month in which an
Interest Period is to end or if an Interest Period begins on the last Business Day
of a calendar month, then in the case of Eurodollar Loans only, such Interest
Period shall end on the last Business Day of the calendar month in which such
Interest Period is to end.

 

21

 

Section 2.5.            Funding
of Loans.

 

(a)           Disbursement of Loans. Not
later than 12:00 P.M. with respect to Eurodollar Loans, and 3:00 P.M. with
respect to Base Rate Revolving Loans, on the date of any requested advance of a
new Borrowing of Loans, each Lender, subject to all other provisions hereof,
shall make available for the account of its applicable Lending Office its Loan
comprising its portion of such Borrowing in funds immediately available for the
benefit of the Administrative Agent in the applicable Administrative Agent’s
Account and according to the payment instructions of the Administrative Agent.
The Administrative Agent shall make the proceeds of each such Borrowing
available in immediately available funds to the Borrower (or as directed in
writing by the Borrower) on such date. Acceptance by the Borrower of any late
amount shall not be deemed a waiver by the Borrower of any rights it may have
against any Lender making funds available after the time prescribed above. No
Lender shall be responsible to the Borrower for any failure by another Lender
to fund its portion of a Borrowing, and no such failure by a Lender shall
relieve any other Lender from its obligation, if any, to fund its portion of a
Borrowing.

 

(b)           Administrative Agent Reliance on
Lender Funding. Unless the Administrative Agent shall have been notified by
a Lender prior to the time at which such Lender is scheduled to make payment to
the Administrative Agent of the proceeds of a Loan (which notice shall be
effective upon receipt) that such Lender does not intend to make such payment,
the Administrative Agent may assume that such Lender has made such payment when
due and in reliance upon such assumption may (but shall not be required to)
make available to the Borrower the proceeds of the Loan to be made by such
Lender and, if any Lender has not in fact made such payment to the
Administrative Agent, such Lender shall, on demand, pay to the Administrative
Agent the amount made available to the Borrower attributable to such Lender
together with interest thereon for each day during the period commencing on the
date such amount was made available to the Borrower and ending on (but
excluding) the date such Lender pays such amount to the Administrative Agent at
a rate per annum equal to the Administrative Agent’s cost of funds for such
amount. If such amount is not received from such Lender by the Administrative
Agent immediately upon demand, the Borrower will, on demand, repay to the
Administrative Agent the proceeds of the Loan attributable to such Lender with interest
thereon at a rate per annum equal to the interest rate applicable to the
relevant Loan, but the Borrower will in no event be liable to pay any amounts
otherwise due pursuant to Section 2.11 in respect of such repayment. Nothing in
this subsection shall be deemed to relieve any Lender from any obligation to
fund any Loans hereunder or to prejudice any rights which the Borrower may have
against any Lender as a result of any default by such Lender hereunder.

 

Section 2.6.            Applicable
Interest Rates.

 

(a)           Base Rate Loans. Each Base
Rate Loan shall bear interest (computed on the basis of a 365-day year or
366-day year, as the case may be, and actual days elapsed excluding the date of
repayment) on the unpaid principal amount thereof from the date such Loan is
made until maturity (whether by acceleration or otherwise) or conversion to a
Eurodollar Loan, at a rate per annum equal to the lesser of (i) the Highest
Lawful Rate, or (ii) the Base Rate from time to time in effect. The Borrower
agrees to pay such interest on each Interest Payment Date for such Loan and at
maturity (whether by acceleration or otherwise).

 

22

 

(b)           Eurodollar Loans. Each
Eurodollar Loan shall bear interest (computed on the basis of a 360-day year
and actual days elapsed, excluding the date of repayment) on the unpaid
principal amount thereof from the date such Loan is made until maturity
(whether by acceleration or otherwise) or, in the case of Eurodollar Loans,
conversion to a Base Rate Loan at a rate per annum equal to the lesser of (i)
the Highest Lawful Rate, or (ii) the sum of Adjusted LIBOR plus
the Applicable Margin. The Borrower agrees to pay such interest on each
Interest Payment Date for such Loan and at maturity (whether by acceleration or
otherwise) or, in the case of Eurodollar Loans, conversion to a Base Rate Loan.

 

(c)           Rate Determinations. The
Administrative Agent shall determine each interest rate applicable to the Loans
hereunder insofar as such interest rate involves a determination of Base Rate,
Adjusted LIBOR or LIBOR Rate, or any applicable default rate pursuant to
Section 2.7, and such determination shall be conclusive and binding except in
the case of the Administrative Agent’s manifest error or willful misconduct.
The Administrative Agent shall promptly give notice to the Borrower and each
Lender of each determination of Adjusted LIBOR, with respect to each Eurodollar
Loan.

 

Section 2.7.            Default
Rate.  If any payment of principal on
any Loan is not made when due after the expiration of the grace period therefor
provided in Section 7.1(a) (whether by acceleration or otherwise), such Loan
shall bear interest (computed on the basis of a year of 360, 365 or 366 days,
as applicable, and actual days elapsed) after any such grace period expires
until such principal then due is paid in full, which the Borrower agrees to pay
on demand, at a rate per annum equal to:

 

(a)           for any Base Rate Loan, the lesser of
(i) the Highest Lawful Rate, or (ii) the sum of two percent (2%) per annum plus
the Base Rate from time to time in effect (but not less than the Base Rate in
effect at the time such payment was due); and

 

(b)           for any Eurodollar Loan, the lesser
of (i) the Highest Lawful Rate, or (ii) the sum of two percent (2%) per annum
plus the rate of interest in effect thereon at the time of such default until
the end of the Interest Period for such Loan and, thereafter, at a rate per
annum equal to the sum of two percent (2%) per annum plus
the Base Rate from time to time in effect (but not less than the Base Rate in
effect at the time such payment was due).

 

It is the intention of the Administrative Agent and
the Lenders to conform strictly to usury laws applicable to them. Accordingly,
if the transactions contemplated hereby or any Loan or other Obligation would
be usurious as to any of the Lenders under laws applicable to it (including the
laws of the United States of America and the State of New York or any other
jurisdiction whose laws may be mandatorily applicable to such Lender
notwithstanding the other provisions of this Agreement, the Notes or any other
Credit Document), then, in that event, notwithstanding anything to the contrary
in this Agreement, the Notes or any other Credit Document, it is agreed as
follows:  (i) the aggregate of all
consideration which constitutes interest under laws applicable to such Lender
that is contracted for, taken, reserved, charged or received by such Lender
under this Agreement, the Notes or any other Credit Document or otherwise shall
under no circumstances exceed the Highest Lawful Rate, and any excess shall be
credited by such Lender on the principal amount of the Loans (or, if the
principal amount of the

 

23

 

Loans shall have been
paid in full, refunded by such Lender to the Borrower); and (ii) in the event
that the maturity of the Loans is accelerated by reason of an election of the
holder or holders thereof resulting from any Event of Default hereunder or
otherwise, or in the event of any required or permitted prepayment, then such
consideration that constitutes interest under laws applicable to such Lender
may never include more than the Highest Lawful Rate, and excess interest, if
any, provided for in this Agreement, the Notes, any other Credit Document or
otherwise shall be automatically canceled by such Lender as of the date of such
acceleration or prepayment and, if theretofore paid, shall be credited by such
Lender on the principal amount of the Loans (or if the principal amount of the
Loans shall have been paid in full, refunded by such Lender to the Borrower).
To the extent that the Texas Finance Code, Chapters 302 and 303, are relevant
to the Administrative Agent and the Lenders for the purpose of determining the
Highest Lawful Rate, the Administrative Agent and the Lenders hereby elect to
determine the applicable rate ceiling under such Chapter by the indicated
(weekly) rate ceiling from time to time in effect, subject to their right
subsequently to change such method in accordance with applicable law. In the
event the Loans are paid in full by the Borrower prior to the full stated term
of the Loans and the interest received from the actual period of the existence
of the Loans exceeds the Highest Lawful Rate, the Lenders shall refund to the
Borrower the amount of the excess or shall credit the amount of the excess
against amounts owing under the Loans and none of the Administrative Agent or
the Lenders shall be subject to any of the penalties provided by law for
contracting for, taking, reserving, charging or receiving interest in excess of
the Highest Lawful Rate. The Texas Finance Code, Chapter 346, which regulates
certain revolving credit loan accounts and revolving tri-party accounts, shall
not apply to this Agreement or the Loans.

 

Section 2.8.            Repayment
of Loans; Evidence of Debt.

 

(a)           Repayment of Loans. The
Borrower hereby promises to pay to the Administrative Agent for the account of
each Lender, on the Final Maturity Date, the unpaid amount of each Revolving
Loan then outstanding.

 

(b)           Record of Loans by Lenders.
Each Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the indebtedness of the Borrower to such Lender resulting
from each Loan made by such Lender, including the amounts of principal and
accrued interest payable and paid to such Lender from time to time hereunder.

 

(c)           Record of Loans by Administrative
Agent. The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or accrued
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender’s share thereof.

 

(d)           Evidence of Obligations. The
entries made in the accounts maintained pursuant to paragraph (b) or (c) of
this Section shall be prima  facie evidence of the existence and
amounts of the obligations recorded therein; provided
that the failure of any Lender or the Administrative Agent to maintain such
accounts or any error therein shall not in any manner affect the obligation of
the Borrower to repay the Loans in accordance with the terms of this Agreement.

 

24

 

(e)           Notes. The Revolving Loans
outstanding to the Borrower from each Lender shall, at the written request of
such Lender, be evidenced by a promissory note of the Borrower payable to such
Lender in the form of Exhibit 2.8A (Master Note) (each a “Note”). The Borrower agrees to execute and deliver to the
Administrative Agent, for the benefit of each Lender requesting a Note as
aforesaid, an original of each such Note, appropriately completed, to evidence
the respective Loans made by such Lender hereunder, within ten (10) Business
Days after the Borrower receives a written request therefor.

 

(f)            Recording of Loans and Payments
on Notes. Each holder of a Note shall record on its books and records or on
a schedule to its appropriate Note (and prior to any transfer of its Notes
shall endorse thereon or on schedules forming a part thereof appropriate
notations to evidence) the amount of each Loan outstanding from it to the
Borrower, all payments of principal and interest and the principal balance from
time to time outstanding thereon, the type of such Loan and, if a Eurodollar
Loan the Interest Period and interest rate applicable thereto. Such record,
whether shown on the books and records of a holder of a Note or on a schedule
to its Note, shall be prima facie
evidence as to all such matters; provided, however,
that the failure of any holder to record any of the foregoing or any error in
any such record shall not limit or otherwise affect the obligation of the
Borrower to repay all Loans outstanding to it hereunder together with accrued
interest thereon. At the request of any holder of a Note and upon such holder
tendering to the Borrower the Note to be replaced, the Borrower shall furnish a
new Note to such holder to replace any outstanding Note and at such time the
first notation appearing on the schedule on the reverse side of, or attached
to, such new Note shall set forth the aggregate unpaid principal amount of all Loans,
if any, then outstanding thereon.

 

Section 2.9.            Optional
Prepayments.  The Borrower shall have
the privilege of prepaying any Base Rate Loans without premium or penalty at
any time in whole or at any time and from time to time in part (but, if in part,
then in an amount which is equal to or greater than $1,000,000); provided, however, that the Borrower shall have given notice
of such prepayment to the Administrative Agent no later than 12:00 P.M. on the
date of such prepayment. The Borrower shall have the privilege of prepaying any
Adjusted LIBOR Loans (a) without premium or penalty in whole or in part (but,
if in part, then in an amount which is equal to or greater than the Dollar
Equivalent of $5,000,000 and in an integral multiple of the Borrowing Multiple
or such smaller amount as needed to prepay a particular Borrowing in full) only
on the last Business Day of an Interest Period for such Loan, and (b) at any
other time without premium or penalty except for the breakage fees and funding
losses that are required to be paid pursuant to Section 2.11; provided, however, that the Borrower shall have given notice
of such prepayment to the Administrative Agent no later than 12:00 P.M. at
least three (3) Business Days before the last Business Day of such Interest
Period or the proposed prepayment date. Any such prepayments shall be made by
the payment of the principal amount to be prepaid and accrued and unpaid
interest thereon to the date of such prepayment. Unless otherwise specified in
writing by the Borrower, optional prepayments shall be applied first, to
the Revolving Loans and second to any other Obligations then
outstanding.

 

Section 2.10.          Mandatory
Prepayments of Loans.  In the event
and on each occasion that the aggregate principal amount of outstanding
Revolving Loans exceeds the Revolving Credit

 

25

 

Commitment Amount then in effect, then the Borrower shall promptly
prepay Revolving Loans in an aggregate amount sufficient to eliminate such
excess. Immediately upon determining the need to make any such prepayment, the
Borrower shall notify the Administrative Agent of such required prepayment and
of the identity of the particular Revolving Loans being prepaid. If the
Administrative Agent shall notify the Borrower that the Administrative Agent
has determined that any prepayment is required under this Section 2.10, the
Borrower shall make such prepayment no later than the second Business Day
following such notice. Any mandatory prepayment of Revolving Loans pursuant
hereto shall not be limited by the notice provision for prepayments set forth
in Section 2.9. Each such prepayment shall be accompanied by a payment of all
accrued and unpaid interest on the Loans prepaid and any applicable breakage
fees and funding losses pursuant to Section 2.11.

 

Section 2.11.          Breakage
Fees.  If any Lender incurs any loss,
cost or expense (excluding loss of anticipated profits and other indirect or
consequential damages) by reason of the liquidation or re-employment of deposits
or other funds acquired by such Lender to fund or maintain any Eurodollar Loan
as a result of any of the following events other than any such occurrence as a
result of a change of circumstance described in Sections 8.1 or 8.2:

 

(a)           any payment, prepayment or conversion
of any such Loan on a date other than the last day of its Interest Period
(whether by acceleration, mandatory prepayment or otherwise);

 

(b)           any failure to make a principal
payment of any such Loan on the due date therefor; or

 

(c)           any failure by the Borrower to
borrow, continue or prepay, or convert to, any such Loan on the date specified
in a notice given pursuant to Section 2.3 (other than by reason of a default of
such Lender),

 

then the Borrower shall pay to such Lender such amount as will
reimburse such Lender for such loss, cost or expense. If any Lender makes such
a claim for compensation, it shall provide to the Borrower a certificate
executed by an officer of such Lender setting forth the amount of such loss,
cost or expense in reasonable detail (including an explanation of the basis for
and the computation of such loss, cost or expense) no later than ninety (90)
days after the event giving rise to the claim for compensation, and the amounts
shown on such certificate shall be prima facie evidence of such Lender’s
entitlement thereto. Within ten (10) days of receipt of such certificate, the
Borrower shall pay directly to such Lender such amount as will compensate such
Lender for such loss, cost or expense as provided herein, unless such Lender
has failed to timely give notice to the Borrower of such claim for compensation
as provided herein, in which event the Borrower shall not have any obligation
to pay such claim.

 

Section 2.12.          Commitment
Terminations.  The Borrower shall have
the right at any time and from time to time, upon three (3) Business Days’
prior and irrevocable written notice to the Administrative Agent, to terminate
or reduce the Commitments without premium or penalty, in whole or in part, with
any partial reduction (i) to be in an amount not less than $5,000,000 as
determined by the Borrower and in integral multiples of $5,000,000 and (ii) as
to the Commitments to be allocated ratably among the Lenders in proportion to
their respective

 

26

 

Commitments; provided, that
the Revolving Credit Commitment Amount may not be reduced to an amount less
than the sum of the aggregate principal amount of outstanding Revolving Loans,
after giving effect to payments on such proposed termination or reduction date.
The Administrative Agent shall give prompt notice to each Lender of any such
termination or reduction of the Commitments. Any termination of Commitments
pursuant to this Section 2.12 is permanent and may not be reinstated.

 

Section 2.13.          [Intentionally Omitted]

 

Section 2.14.          Extension
of Final Maturity Date. Not later than three (3) Business Days prior to the
scheduled Commitment Termination Date, the Borrower may, by written notice to
the Administrative Agent, request that the Final Maturity Date be a date
occurring up to the first anniversary of the scheduled Commitment Termination
Date. Such request shall be irrevocable and binding upon the Borrower. The
Administrative Agent shall promptly notify each Lender of such request. Subject
to the satisfaction of the applicable conditions as set forth in Section 4.2 as
of such Commitment Termination Date, the Final Maturity Date shall be,
effective as of such Commitment Termination Date, such date as the Borrower
shall request pursuant to the first sentence of this Section 2.14. The
Administrative Agent shall promptly notify each Lender of any such extension of
the Final Maturity Date.

 

ARTICLE
3.          FEES AND PAYMENTS.

 

Section 3.1.            Fees.

 

(a)           Facility Fees. The Borrower
agrees to pay to the Administrative Agent for the account of each Lender a
facility fee, which shall accrue at the Applicable Facility Fee Rate on the
daily amount of the Commitment of such Lender (whether used or unused) during
the period from and including the Effective Date to but excluding the date on
which such Commitment terminates; provided that,
if such Lender continues to have any Revolving Credit Exposure after its
Commitment terminates, then such facility fee shall continue to accrue on the
daily amount of such Lender’s Revolving Credit Exposure from and including the
date on which its Commitment terminates to but excluding the date on which such
Lender ceases to have any Revolving Credit Exposure. Accrued facility fees
shall be payable in arrears on the last Business Day of March, June, September
and December of each year, commencing on December 31, 2007, on the date(s) on
which the Commitments shall have terminated and the Lenders shall have no
further Revolving Credit Exposures, and on the Final Maturity Date. All
facility fees shall be computed on the basis of a year of 360 days and shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).

 

(b)           Utilization Fees. For any day
prior to the Commitment Termination Date on which the outstanding principal
amount of the Loans shall be greater than or equal to an amount equal to 50% of
the total Commitments (and for any day after the termination of all the
Commitments on which any Loans shall be outstanding if the outstanding
principal amount thereof on the date the Commitments terminated shall have been
greater than or equal to 50% of the total Commitments in effect on such date)
the Borrower shall pay to the Administrative Agent for the account of each
Lender a utilization fee equal to the Applicable Utilization Fee

 

27

 

Rate multiplied by
the aggregate amount of such Lender’s outstanding Loans on such day. Accrued
and unpaid utilization fees, if any, shall be payable in arrears on the last
Business Day of each March, June, September and December (of each year,
commencing on December 31, 2007), on the date(s) on which the Commitments shall
have terminated and there are no Loans outstanding, and on the Final Maturity
Date. All utilization fees shall be computed on the basis of a year of 360 days
and shall be payable for the actual number of days elapsed (including the first
day but excluding the last day).

 

(c)           Administrative Agent Fees. The
Borrower shall pay to the Administrative Agent and Co-Lead Arrangers the fees
from time to time agreed to by the Borrower, the Administrative Agent, and
Co-Lead Arrangers.

 

(d)           Payment of Fees. All fees
payable hereunder shall be paid on the dates due, in immediately available funds,
to the Administrative Agent for distribution, in the case of facility fees and
utilization fees, to the Lenders.

 

Section 3.2.            Place
and Application of Payments.

 

(a)           All payments of principal of and
interest on the Loans and all fees and other amounts payable by the Borrower
under the Credit Documents shall be made by the Borrower to the Administrative
Agent, for the benefit of the Lenders entitled to such payments, in immediately
available funds on the due date thereof, no later than 2:00 P.M. in the
applicable Administrative Agent’s Account or such other location as the
Administrative Agent may designate in writing to the Borrower. Any payments
received by the Administrative Agent from the Borrower after the time specified
in the preceding sentence shall be deemed to have been received on the next
Business Day. The Administrative Agent will, on the same day each payment is
received or deemed to have been received in accordance with this Section 3.2,
cause to be distributed like funds to each Lender owed an Obligation for which
such payment was received, pro rata based
on the respective amounts of such type of Obligation then owing to each Lender.

 

(b)           If any payment received by the
Administrative Agent under any Credit Document is insufficient to pay in full
all amounts then due and payable to the Administrative Agent and the Lenders
under the Credit Documents, such payment shall be distributed by the
Administrative Agent and applied by the Administrative Agent and the Lenders in
the order set forth in Section 7.7. In calculating the amount of Obligations
owing each Lender other than for principal and interest on Loans and fees under
Section 3.1, the Administrative Agent shall only be required to include such
other Obligations that Lenders have certified to the Administrative Agent in
writing are due to such Lenders.

 

Section 3.3.            Withholding
Taxes.

 

(a)           Payments Free of Withholding.
Except as otherwise required by law and subject to Section 3.3(b), each payment
by the Borrower to any Lender or Administrative Agent under this Agreement or
any other Credit Document shall be made without withholding for or on account
of any present or future taxes imposed by or within the jurisdiction in which
the

 

28

 

Borrower is incorporated, any jurisdiction from which
the Borrower makes any payment, or (in each case) any political subdivision or
taxing authority thereof or therein, excluding, in the case of each Lender and
the Administrative Agent, the following taxes:

 

(i)            taxes
imposed on, based upon, or measured by such Lender’s or the Administrative
Agent’s net income or profits, and branch profits, franchise and similar taxes
imposed on it;

 

(ii)           taxes
imposed on such Lender or the Administrative Agent as a result of a present or
former connection between the taxing jurisdiction and such Lender or
Administrative Agent, or any affiliate thereof, as the case may be, other than
a connection resulting solely from the transactions contemplated by this
Agreement;

 

(iii)          taxes
imposed as a result of the transfer by such Lender or the Administrative Agent
of its interest in this Agreement or any other Credit Document or a designation
by such Lender or the Administrative Agent (other than pursuant to Section
8.3(c)) of a new Lending Office (other than taxes imposed as a result of any
change in treaty, law or regulation after such transfer of such Lender’s or the
Administrative Agent’s interest in this Agreement or any other Credit Document
or designation of a new Lending Office);

 

(iv)          taxes
imposed by the United States of America (or any political subdivision thereof
or tax authority therein) upon a Lender or the Administrative Agent organized
under the laws of a jurisdiction outside of the United States, except to the
extent that such tax is imposed as a result of any change in applicable law,
regulation or treaty (other than any addition of or change in any “anti-treaty
shopping,” “limitation of benefits,” or similar provision applicable to a
treaty) after the date hereof, in the case of each Lender or the Administrative
Agent originally a party hereto or, in the case of any Purchasing Lender (as
defined in Section 10.10) or the Administrative Agent, after the date on which
it becomes a Lender or the Administrative Agent, as the case may be; or

 

(v)           taxes
which would not have been imposed but for (a) the failure of any Lender or the
Administrative Agent, as the case may be, to provide (I) the applicable forms
prescribed by the Internal Revenue Service, as required pursuant to Section
3.3(b), or (II) any other form, certification, documentation or proof which is
reasonably requested by the Borrower, or (b) a determination by a taxing
authority or a court of competent jurisdiction that a form, certification,
documentation or other proof provided by such Lender or the Administrative
Agent to establish an exemption from such tax, assessment or other governmental
charge is false;

 

(all such present or future taxes, excluding only the taxes described
in the preceding clauses (i) through (v), being hereinafter referred to as
“Indemnified Taxes”). If any such withholding is so required, the Borrower
shall make the withholding, pay the amount withheld to the appropriate
governmental authority before penalties attach thereto or interest accrues
thereon and forthwith pay such additional amount as may be necessary to ensure
that the net amount actually received by each Lender and the Administrative
Agent is free and clear of such Indemnified Taxes

 

29

 

(including Indemnified Taxes on such additional amount) and is equal to
the amount that such Lender or the Administrative Agent (as the case may be)
would have received had withholding of any Indemnified Tax not been made. If
the Borrower pays any Indemnified Taxes, or any penalties or interest in
connection therewith, it shall deliver official tax receipts evidencing the
payment or certified copies thereof, or other evidence of payment if such tax
receipts have not yet been received by the Borrower (with such tax receipts to
be delivered within fifteen (15) days after being actually received), to the
Lender or the Administrative Agent on whose account such withholding was made
(with a copy to the Administrative Agent if not the recipient of the original)
within fifteen (15) days of such payment. If the Administrative Agent or any
Lender pays any Indemnified Taxes, or any penalties or interest in connection
therewith, the Borrower shall reimburse the Administrative Agent or such Lender
for the payment on demand in the currency in which such payment was made. Such
Lender or the Administrative Agent shall make written demand on the Borrower
for reimbursement hereunder no later than ninety (90) days after the earlier of
(i) the date on which such Lender or the Administrative Agent makes payment of
the Indemnified Taxes, penalties and interest, and (ii) the date on which the
relevant taxing authority or other governmental authority makes written demand
upon such Lender or the Administrative Agent for payment of the Indemnified
Taxes, penalties and interest. Any such demand shall describe in reasonable
detail such Indemnified Taxes, penalties or interest, including the amount
thereof if then known to such Lender or the Administrative Agent, as the case
may be. In the event that such Lender or the Administrative Agent fails to give
the Borrower timely notice as provided herein, the Borrower shall not have any
obligation to pay such claim for reimbursement.

 

(b)           U.S. Withholding Tax Exemptions.
Upon the written request of the Borrower or the Administrative Agent, each
Lender that is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) shall submit to the Borrower and the Administrative
Agent, promptly after such request, two duly completed and signed copies of
either Form W-8BEN or any successor form (entitling such Lender to a complete
exemption from withholding under the Code on all amounts to be received by such
Lender, including fees, pursuant to the Credit Documents) or Form W-8ECI or any
successor form (relating to all amounts to be received by such Lender,
including fees, pursuant to the Credit Documents) of the United States Internal
Revenue Service, and any other form of the United States Internal Revenue Service
reasonably necessary to accomplish exemption from withholding obligations or to
facilitate the Administrative Agent’s performance under this Agreement.
Thereafter and from time to time, each such Lender shall submit to the Borrower
and the Administrative Agent such additional duly completed and signed copies
of such forms (or such successor forms as shall be adopted from time to time by
the relevant United States taxing authorities) as may be required under
then-current United States law or regulations to avoid United States
withholding taxes on payments in respect of all amounts to be received by such
Lender, including fees, pursuant to the Credit Documents. Upon the request of
the Borrower, each Lender that is a United States person shall submit to the
Borrower a certificate to the effect that it is such a United States person and
is exempt from information reporting under Section 6049 of the Code and backup
withholding under Section 3406 of the Code.

 

(c)           Inability of Lender to Submit
Forms. If any Lender determines in good faith, as a result of any change in
applicable law, regulation or treaty, or in any official application or

 

30

 

interpretation thereof, that (i) it is unable to
submit to the Borrower or Administrative Agent any form or certificate that
such Lender is obligated to submit pursuant to subsection (b) of this Section
3.3, (ii) it is required to withdraw or cancel any such form or certificate
previously submitted, or (iii) any such form or certificate otherwise becomes
ineffective or inaccurate, such Lender shall promptly notify the Borrower and
Administrative Agent of such fact, and the Lender shall to that extent not be
obligated to provide any such form or certificate and will be entitled to
withdraw or cancel any affected form or certificate, as applicable.

 

(d)           Refund of Taxes. If any Lender
or the Administrative Agent becomes aware that it has received a refund of any
Indemnified Tax or any tax referred to in Section 10.3 with respect to which
the Borrower has paid any amount pursuant to this Section 3.3 or Section 10.3,
such Lender or the Administrative Agent shall pay the amount of such refund
(including any interest received with respect thereto) to the Borrower within
fifteen (15) days after receipt thereof. A Lender or the Administrative Agent
shall provide, at the sole cost and expense of the Borrower, such assistance as
the Borrower may reasonably request in order to obtain such a refund; provided, however, that neither the Administrative Agent nor
any Lender shall in any event be required to disclose any information to the
Borrower with respect to the overall tax position of the Administrative Agent
or such Lender.

 

ARTICLE
4.          CONDITIONS PRECEDENT.

 

Section 4.1.            Initial
Borrowing.  This Agreement shall
become effective, and the obligation of each Lender to advance the initial
Loans hereunder, shall only take effect, on the date (the “Effective
Date”) on which each of the following conditions has been satisfied
(or waived in accordance with Section 10.11):

 

(a)           The Administrative Agent shall have
received counterparts of this Agreement duly executed (including by facsimile
or other electronic means) by all parties to this Agreement, together with the
following, all in form and substance reasonably satisfactory to the
Administrative Agent and the Co-Lead Arrangers and in sufficient number of
signed counterparts, where applicable, to provide one for each Lender:

 

(i)            Certificates
of Officers. Certificates of the Secretary or an Assistant Secretary of the
Borrower containing specimen signatures of the persons authorized to execute
Credit Documents on the Borrower’s behalf or any other documents provided for
herein or therein, together with (x) copies of resolutions of the Board of
Directors or other appropriate body of the Borrower authorizing the execution
and delivery of the Credit Documents, (y) copies of the Borrower’s memorandum
of association and articles of association and other publicly filed
organizational documents in its jurisdiction of incorporation and bylaws and
other governing documents, if any, and (z) a certificate of incorporation and a
certificate of good standing from the appropriate governing agency of the
Borrower’s jurisdiction of incorporation;

 

31

 

(ii)           Regulatory
Filings and Approvals. Copies of all necessary governmental and third party
approvals, registrations, and filings in respect of the transactions
contemplated by this Agreement;

 

(iii)          Insurance
Certificate. An insurance certificate dated not more than ten (10) Business
Days prior to the Effective Date from the Borrower describing in reasonable
detail the insurance maintained by the Borrower and its Subsidiaries as
required by this Agreement;

 

(iv)          Opinions
of Counsel. The opinions of (x) Baker Botts LLP, counsel for the Borrower,
in the form of Exhibit 4.1A, (y) Eric B. Brown, General Counsel of the
Borrower, in the form of Exhibit 4.1B, and (z) Walkers, Cayman Islands
counsel for the Borrower, in the form of Exhibit 4.1C;

 

(v)           Closing
Certificate. Certificate of the President or a Vice President of the
Borrower as to the satisfaction of all conditions set forth in this Section
4.1;

 

(vi)          Termination
of Credit Facilities. Written acknowledgements as to the cancellation or
termination of the credit facilities more particularly described on Schedule
4.1 (with evidence of payment of all amounts outstanding thereunder and
arrangements with respect to cancellation or replacement of any letters of
credit outstanding thereunder);

 

(vii)         Merger. Evidence of the
consummation of the Merger Transactions in accordance with the terms of the
Merger Agreement and other Merger Documentation (with all conditions precedent
to such consummation having been satisfied or waived (with the prior consent
(not to be unreasonably withheld or delayed) of the Co-Lead Arrangers (other
than with respect to the waiver of the financing condition) to the extent the
Co-Lead Arrangers reasonably determined any such waiver would be materially
adverse to the Lenders)); and

 

(viii)        Notes. Duly completed and
executed Notes for each of the Lenders that has requested such Notes prior to
the Effective Date as provided in Section 2.8(e).

 

(b)           Each of the representations and
warranties of the Borrower and its Subsidiaries set forth herein and in the
other Credit Documents shall be true and correct in all material respects as of
the time of such Borrowing, except to the extent that any such representation
or warranty relates solely to an earlier date, in which case it shall have been
true and correct in all material respects as of such earlier date;

 

(c)           No Default or Event of Default shall
have occurred and be continuing; and

 

(d)           Payment of all fees and all expenses
incurred through the Effective Date then due and owing to the Administrative
Agent, the Lenders, and the Co-Lead Arrangers pursuant to this Agreement and as
otherwise agreed in writing by the Borrower.

 

32

 

Section 4.2.            All
Borrowings.  The obligation of each
Lender to make any advance of any Loan hereunder is subject to satisfaction of
the following conditions precedent (but subject to Section 2.3(c)):

 

(a)           Notices. The Administrative
Agent shall have received the Borrowing Request required by the first sentence
of Section 2.3(a);

 

(b)           Warranties True and Correct.
In the case of any advance or Borrowing that increases the aggregate amount of
Loans outstanding after giving effect to such advance or Borrowing, each of the
representations and warranties of the Borrower and its Subsidiaries set forth
herein (other than, in the case of any such advances, Borrowing, issuances or
increases occurring after the Effective Date, the representations and
warranties set forth in Sections 5.4, 5.9, 5.15 and 5.16) and in the other
Credit Documents (other than, in the case of any such advances, Borrowing,
issuances or increases occurring after the Effective Date, those that relate to
the representations and warranties set forth in Sections 5.4, 5.9, 5.15 and
5.16) shall be true and correct in all material respects as of the time of such
advance or Borrowing, except as a result of the transactions permitted
hereunder or thereunder and except to the extent that any such representation
or warranty relates solely to an earlier date, in which case it shall have been
true and correct in all material respects as of such earlier date;

 

(c)           No Default. No Default or
Event of Default shall have occurred and be continuing or would occur as a
result of any such Borrowing; or

 

(d)           Regulations T, U and X. The
Borrowing to be made by the Borrower shall not result in the Borrower or any
Lender being in non-compliance with or in violation of Regulation T, U or X of
the Board of Governors of the Federal Reserve System.

 

Each acceptance by the Borrower of an advance of any Loan shall be
deemed to be a representation and warranty by the Borrower on the date of such
acceptance, that all conditions precedent to such Borrowing set forth in this
Section 4.2 and in Section 4.1 with respect to the initial Borrowings hereunder
have (except to the extent waived in accordance with the terms hereof) been
satisfied or fulfilled unless the Borrower gives to the Administrative Agent
and the Lenders written notice to the contrary, in which case none of the
Lenders shall be required to fund or convert such Loans unless the Required
Lenders shall have previously waived in writing such non-compliance.

 

ARTICLE
5.          REPRESENTATIONS AND
WARRANTIES.

 

The Borrower represents and warrants to each Lender
and the Administrative Agent as follows:

 

Section 5.1.            Corporate
Organization. The Borrower and each of its material Subsidiaries: (i) is
duly organized and existing in good standing under the laws of the jurisdiction
of its organization; (ii) has all necessary organizational power and authority
to own the property and assets it uses in its business and otherwise to carry
on its present business; and (iii) is duly

 

33

 

licensed or qualified and in good standing in each jurisdiction in
which the nature of the business transacted by it or the nature of the property
owned or leased by it makes such licensing or qualification necessary, except
where the failure to be so licensed or qualified or to be in good standing, as
the case may be, would not have a Material Adverse Effect.

 

Section 5.2.            Power
and Authority; Validity.  The
Borrower has the organizational power and authority to execute, deliver and
carry out the terms and provisions of the Credit Documents to which it is a
party and has taken all necessary company action to authorize the execution,
delivery and performance of such Credit Documents. The Borrower has duly
executed and delivered each Credit Document and each such Credit Document constitutes
the legal, valid and binding obligation of the Borrower enforceable against it
in accordance with its terms, subject as to enforcement only to bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors’ rights generally and equitable principles.

 

Section 5.3.            No
Violation.  Neither the execution,
delivery or performance by the Borrower of the Credit Documents to which it is
a party nor compliance by it with the terms and provisions thereof, nor the
consummation by it of the transactions contemplated herein or therein, will (i)
contravene in any material respect any applicable provision of any law,
statute, rule or regulation, or any applicable order, writ, injunction or
decree of any court or governmental instrumentality, (ii) conflict with or
result in any breach of any term, covenant, condition or other provision of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien other than any Permitted Lien upon any
of the property or assets of the Borrower or any of its Subsidiaries under, the
terms of any material contractual obligation to which the Borrower or any of
its Subsidiaries is a party or by which they or any of their properties or
assets are bound or to which they may be subject, or (iii) violate or conflict
with any provision of the memorandum of association and articles of
association, charter, articles or certificate of incorporation, partnership or
limited liability company agreement, by-laws, or other applicable governance
documents of the Borrower or any of its Subsidiaries.

 

Section 5.4.            Litigation.  Except as may be described on Schedule 5.4,
there are no actions, suits, proceedings or counterclaims (including, without
limitation, derivative or injunctive actions) pending or, to the knowledge of
the Borrower, threatened against the Borrower or any of its Subsidiaries that
are reasonably likely to have a Material Adverse Effect.

 

Section 5.5.            Use
of Proceeds; Margin Regulations.

 

(a)           Use of Proceeds. The proceeds
of the Loans shall only be used to refinance amounts outstanding on the
Effective Date under the Existing Credit Facility, for repayment and debt
service on the Bridge Facility, as a commercial paper backstop, for permitted
investments and acquisitions, and for capital expenditures and other general
corporate purposes of the Borrower and its Subsidiaries.

 

(b)           Margin Stock. Neither the
Borrower nor any of its Subsidiaries is engaged in the business of extending
credit for the purpose of purchasing or carrying margin stock. No

 

34

 

proceeds of the Loans will be used for a purpose which
violates Regulations T, U or X of the Board of Governors of the Federal Reserve
System. After application of the proceeds of the Loans and any acquisitions
permitted hereunder, less than 25% of the assets of each of the Borrower and
its Subsidiaries consists of “margin stock”
(as defined in Regulation U of the Board of Governors of the Federal Reserve
System).

 

Section 5.6.            Investment
Company Act.  Neither the Borrower
nor any of its Subsidiaries is an “investment company”
or a company “controlled” by an “investment company,” within the meaning of the Investment
Company Act of 1940, as amended.

 

Section 5.7.            True
and Complete Disclosure.  All factual
information (taken as a whole) furnished by the Borrower or any of its
Subsidiaries in writing to the Administrative Agent or any Lender in connection
with any Credit Document or the Confidential Information Memorandum or any
transaction contemplated therein did not, as of the date such information was
furnished (or, if such information expressly related to a specific date, as of
such specific date), contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein (taken as a
whole), in light of the circumstances under which such information was
furnished, not misleading, except for such statements, if any, as have been
updated, corrected, supplemented, superseded or modified pursuant to a written
correction or supplement furnished to the Lenders prior to the date of this
Agreement.

 

Section 5.8.            Financial
Statements.  The financial statements
heretofore delivered to the Lenders for the Borrower’s fiscal year ending
December 31, 2006, and for the Borrower’s fiscal quarter and year-to-date
period ending September 30, 2007, have been prepared in accordance with GAAP
applied on a basis consistent, except as otherwise noted therein, in accordance
with GAAP, with the Borrower’s financial statements for the previous fiscal
year. Such annual and quarterly financial statements fairly present in all
material respects on a consolidated basis the financial position of the
Borrower as of the dates thereof, and the results of operations for the periods
indicated, subject in the case of interim financial statements, to normal
year-end audit adjustments and omission of certain footnotes (as permitted by
the SEC). As of the Effective Date, (a) the Borrower and its Subsidiaries
(other than GSF), considered as a whole, and (b) GSF had no material
contingent liabilities or material Indebtedness required under GAAP to be
disclosed in a consolidated balance sheet of the Borrower or GSF, as applicable,
that were not (i) in the case of the Borrower and its Subsidiaries (other
than GSF) included in the financial statements referred to in this Section 5.8
or disclosed in the notes thereto or in writing to the Administrative Agent
(with a written request to the Administrative Agent to distribute such
disclosure to the Lenders) unless otherwise permitted under this Agreement and
(ii) in the case of GSF, included in the consolidated financial statements
included in its quarterly report on Form 10-Q for the quarter ended September
30, 2007 as filed with the SEC, unless otherwise permitted under this
Agreement.

 

Section 5.9.            No
Material Adverse Change. Except as may be described on Schedule 5.9,
since September 30, 2007 there has occurred no event or effect with respect to
the business, assets, operations or condition of the Borrower and its
Subsidiaries, and/or of GSF and its Subsidiaries, as reflected in their
respective quarterly reports on Form 10-Q filed with the SEC for the
quarter ended September 30, 2007 (and assuming, for purposes of this
Section 5.9 that the

 

35

 

Merger and the incurrence of the obligations of the Bridge Facility and
the other Merger Transactions had occurred on September 30, 2007), that has had
or could reasonably be expected to have a Material Adverse Effect (after giving
effect to Merger and the incurrence of the obligations of the Bridge Facility
and the other Merger Transactions.

 

Section 5.10.          Taxes.  The Borrower and its Subsidiaries have filed
all material tax returns required to be filed, whether in the United States or
in any foreign jurisdiction, and have paid all governmental taxes, rates,
assessments, fees, charges and levies (collectively, “Taxes”)
shown to be due and payable on such returns or on any assessments made against
Borrower and its Subsidiaries or any of their properties (other than any such
assessments, fees, charges or levies that are not more than ninety (90) days
past due, or which can thereafter be paid without penalty, or which are being
contested in good faith by appropriate proceedings and for which reserves have
been provided in conformity with GAAP, or which the failure to pay could not
reasonably be expected to have a Material Adverse Effect).

 

Section 5.11.          Consents.  On the Effective Date, all material consents
and approvals of, and filings and registrations with, and all other actions of,
all governmental agencies, authorities or instrumentalities required to have
been obtained or made by the Borrower in order to obtain the Loans hereunder
have been or will have been obtained or made and are or will be in full force
and effect.

 

Section 5.12.          Insurance.  The Borrower and its material Subsidiaries
currently maintain in effect, with responsible insurance companies, including
captive insurance companies, or through self-insurance, insurance against any
loss or damage to all insurable property and assets owned by it, which
insurance is of a character and in or in excess of such amounts as are
customarily maintained by companies similarly situated and operating like
property or assets (subject to self-insured retentions and deductibles), and
insurance with respect to employers’ and public and product liability risks
(subject to self-insured retentions and deductibles).

 

Section 5.13.          Intellectual
Property.  The Borrower and its
Subsidiaries own or hold valid licenses to use all the patents, trademarks,
permits, service marks, and trade names that are necessary to the operation of
the business of the Borrower and its Subsidiaries as presently conducted,
except where the failure to own, or hold valid licenses to use, such patents,
trademarks, permits, service marks, and trade names could not reasonably be
expected to have a Material Adverse Effect.

 

Section 5.14.          Ownership
of Property   The Borrower and its
Subsidiaries have good title to or a valid leasehold interest in all of their
real property and good title to, or a valid leasehold interest in, all of their
other property, subject to no Liens except Permitted Liens, except where the
failure to have such title or leasehold interest in such property could not
reasonably be expected to have a Material Adverse Effect.

 

Section 5.15.          Existing
Indebtedness.  Schedule 5.15
contains a complete and accurate list of all Indebtedness outstanding as of the
Effective Date, with respect to the Borrower and its Subsidiaries, in each case
in a principal amount of $30,000,000 (or, if denominated in a currency other
than U.S. Dollars, the Dollar Equivalent of $30,000,000) or more (other than
the

 

36

 

Obligations hereunder and Indebtedness permitted by Section 6.12(b)
through (j)) and permitted by Section 6.12(a), in each case showing the
aggregate principal amount thereof, the name of the respective borrower and any
other entity which directly or indirectly guaranteed such Indebtedness, and the
scheduled payments of such Indebtedness.

 

Section 5.16.          Existing
Liens.  Schedule 5.16 contains
a complete and accurate list of all Liens outstanding as of the Effective Date,
with respect to the Borrower and its Subsidiaries where the Indebtedness or
other obligations secured by such Lien is in a principal amount of $30,000,000
(or, if denominated in a currency other than U.S. Dollars, the Dollar
Equivalent of $30,000,000) or more (other than the Liens permitted by Section
6.11(b) through (r)), and permitted by Section 6.11(a), in each case showing
the name of the Person whose assets are subject to such Lien, the aggregate
principal amount of the Indebtedness secured thereby, and a description of the
Agreements or other instruments creating, granting, or otherwise giving rise to
such Lien.

 

Section 5.17.          Merger
Transactions. The Merger and the other Merger Transactions have been
consummated in accordance with the terms of the Merger Agreement and the other
Merger Documentation, and all conditions precedent to such consummation as
provided in the Merger Agreement and other Merger Documentation have been
satisfied or waived (with the prior written consent of the Co-Lead Arrangers to
the extent such consent may have been required as described in Section
4.1(a)(vii)).

 

Section 5.18.    Employee Benefit Plan. The Borrower,
each of its Subsidiaries and each of their respective ERISA Affiliates are in compliance
with all applicable provisions and requirements of ERISA and the Code and the
regulations and published interpretations thereunder with respect to each
Employee Benefit Plan, and have performed all their obligations under each
Employee Benefit Plan except for any such non-compliance or non-performance
which could not reasonably be expected to result in a Material Adverse Effect.
No liability to the PBGC (other than required premium payments), the U.S.
Internal Revenue Service, any Employee Benefit Plan or any trust established
under Title IV of ERISA has been or is expected to be incurred by the Borrower,
any of its Subsidiaries or any of their ERISA Affiliates with respect to any
Employee Benefit Plan, except for any such liability which could not reasonably
be expected to result in a Material Adverse Effect. No ERISA Event has occurred
or is reasonably expected to occur which could reasonably be expected to result
in a Material Adverse Effect. No Plan has Unfunded Vested Liabilities which
could reasonably be expected to result in a Material Adverse Effect. As of the
most recent valuation date for each Multiemployer Plan, the potential liability
of the Borrower, its Subsidiaries and their respective ERISA Affiliates for a
complete withdrawal from such Multiemployer Plan (within the meaning of Section
4203 of ERISA), when aggregated with such potential liability for a complete
withdrawal from all Multiemployer Plans, based on information available
pursuant to Section 4221(e) of ERISA, could not reasonably be expected to
result in a Material Adverse Effect. The Borrower, each of its Subsidiaries and
each of their ERISA Affiliates have complied with the requirements of Section
515 of ERISA with respect to each Multiemployer Plan and are not in material “default”
(as defined in Section 4219(c)(5) of ERISA) with respect to payments to a
Multiemployer Plan, except for any such non-compliance which could not
reasonably be expected to result in a Material Adverse Effect.

 

37

 

Section 5.19.          OFAC.
Neither the Borrower nor any of its Subsidiaries (i) is a person on the list of
Specially Designated Nationals and Blocked Persons or subject to the
limitations or prohibitions under any other U.S. Department of Treasury’s
Office of Foreign Assets Control regulation or executive order, or (ii) will
knowingly use any proceeds of the Loans or the Letters of Credit, directly or
indirectly, to support activities in any country subject to a comprehensive
sanctions program administered by the Office of Foreign Assets Control (“OFAC”)
where such activities would be in violation of the sanctions program.

 

Section 5.20.          Patriot
Act. The Borrower and each of its Subsidiaries is in compliance, in all
material respects, with (i) the Trading with the Enemy Act, as amended,
and each of the foreign assets control regulations of the United States
Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other
enabling legislation or executive order relating thereto, and (ii) the Uniting
And Strengthening America By Providing Appropriate Tools Required To Intercept
And Obstruct Terrorism (USA Patriot Act of 2001). No part of the proceeds of
the Loans will be used, directly or indirectly, for any payments to any
governmental official or employee, political party, official of a political
party, candidate for political office, or anyone else acting in an official
capacity, in order to obtain, retain or direct business or obtain any improper
advantage, in violation of the United States Foreign Corrupt Practices Act of
1977, as amended.

 

ARTICLE
6.          COVENANTS.

 

The Borrower covenants and agrees that, so long as any
Loan, Note or Commitment, is outstanding hereunder, or any other Obligation is
due and payable hereunder:

 

Section 6.1.            Corporate
Existence.  Each of the Borrower and
its material Subsidiaries will preserve and maintain its organizational
existence, except (i) for the dissolution of any material Subsidiaries whose
assets are transferred to the Borrower or any of its Subsidiaries, (ii) for
mergers and other or other business combinations of the Borrower permitted
under Section 6.10 and mergers or other business combinations of any Subsidiary
of the Borrower with or into the Borrower or another Subsidiary of the Borrower,
(iii) where the failure to preserve, renew or keep in full force and effect the
existence of any Subsidiary could not reasonably be expected to have a Material
Adverse Effect, or (iv) as otherwise expressly permitted in this Agreement.

 

Section 6.2.            Maintenance.  Each of the Borrower and its material
Subsidiaries will maintain, preserve and keep its properties and equipment
necessary to the proper conduct of its business in reasonably good repair,
working order and condition (normal wear and tear excepted) and will from time
to time make all reasonably necessary repairs, renewals, replacements,
additions and betterments thereto so that at all times such properties and
equipment are reasonably preserved and maintained, in each case with such
exceptions as could not, individually or in the aggregate, be reasonably
expected to have a Material Adverse Effect; provided, however,
that nothing in this Section 6.2 shall prevent the Borrower or any material
Subsidiary from discontinuing the operation or maintenance of any such
properties or equipment if such discontinuance is, in the judgment of the
Borrower or any material Subsidiary, as applicable, desirable in the conduct of
its business.

 

38

 

Section 6.3.            Taxes. Each of the Borrower
and its Subsidiaries will duly pay and discharge all Taxes upon or against it
or its properties within ninety (90) days after becoming due or, if later,
prior to the date on which penalties are imposed for such unpaid Taxes, unless
and to the extent that (i) the same is being contested in good faith and by
appropriate proceedings and reserves have been established in conformity with
GAAP, or (ii) the failure to effect such payment or discharge could not
reasonably be expected to have a Material Adverse Effect.

 

Section 6.4.            ERISA. Each of the Borrower
and its Subsidiaries will timely pay and discharge all obligations and
liabilities arising under ERISA or otherwise with respect to each Plan of a
character which if unpaid or unperformed might result in the imposition of a
material Lien against any properties or assets of the Borrower or any material
Subsidiary and will promptly notify the Administrative Agent upon an officer of
the Borrower becoming aware thereof, of (i) the occurrence of any reportable
event (as defined in ERISA) relating to a Plan (other than a multi-employer
plan, as defined in ERISA), so long as the event thereunder could reasonably be
expected to have a Material Adverse Effect, other than any such event with
respect to which the PBGC has waived notice by regulation; (ii) receipt of any
notice from PBGC of its intention to seek termination of any Plan or
appointment of a trustee therefor; (iii) Borrower’s or any of its Subsidiaries’
intention to terminate or withdraw from any Plan if such termination or
withdrawal would result in liability under Title IV of ERISA, unless such
termination or withdrawal could not reasonably be expected to have a Material
Adverse Effect; and (iv) the receipt by the Borrower or its Subsidiaries of
notice of the occurrence of any event that could reasonably be expected to
result in the incurrence of any liability (other than for benefits), fine or
penalty to the Borrower and/or to the Borrower’s Subsidiaries, or any plan amendment
that could reasonably be expected to increase the contingent liability of the
Borrower and its Subsidiaries, taken as a whole, in either case in connection
with any post-retirement benefit under a welfare plan (subject to ERISA),
unless such event or amendment could not reasonably be expected to have a
Material Adverse Effect. The Borrower will also promptly notify the
Administrative Agent of (i) any material contributions to any Foreign Plan
that have not been made by the required due date for such contribution if such
default could reasonably be expected to have a Material Adverse Effect;
(ii) any Foreign Plan that is not funded to the extent required by the law
of the jurisdiction whose law governs such Foreign Plan based on the actuarial
assumptions reasonably used at any time if such underfunding (together with any
penalties likely to result) could reasonably be expected to have a Material
Adverse Effect, and (iii) any material change anticipated to any Foreign
Plan that could reasonably be expected to have a Material Adverse Effect.

 

Section 6.5.            Insurance. Each of the
Borrower and its material Subsidiaries will maintain or cause to be maintained,
with responsible insurance companies, including captive insurance companies, or
through self-insurance, insurance against any loss or damage to all insurable
property and assets owned by it, such insurance to be of a character and in or
in excess of such amounts as are customarily maintained by companies similarly
situated and operating like property or assets (subject to self-insured
retentions and deductibles) and will (subject to self-insured retentions and
deductibles) maintain or cause to be maintained insurance with respect to
employers’ and public and product liability risks.

 

39

 

Section 6.6.            Financial Reports and Other
Information.

 

(a)           Periodic Financial Statements and Other Documents.
The Borrower, its Subsidiaries and any SPVs will maintain a system of
accounting in such manner as will enable preparation of financial statements in
accordance with GAAP and will furnish to the Lenders and their respective
authorized representatives such information about the business and financial
condition of the Borrower, its Subsidiaries and any SPVs as any Lender may
reasonably request; and, without any request, will furnish to the
Administrative Agent:

 

(i)            not later than the earlier of (x)
sixty (60) days after the end of each of the first three (3) fiscal quarters of
each fiscal year of the Borrower, and (y) five (5) days after the date the
Borrower is required to file with the SEC its report on Form 10-Q with respect
to each of such fiscal quarters, the consolidated balance sheet of the Borrower
and its Subsidiaries as at the end of such fiscal quarter and the related
consolidated statements of income and retained earnings and of cash flows for
such fiscal quarter and for the portion of the fiscal year ended with the last
day of such fiscal quarter, all of which shall be in reasonable detail or in
the form filed with the SEC, and certified by the chief financial officer of
the Borrower that they fairly present the financial condition of the Borrower
and its Subsidiaries as of the dates indicated and the results of their
operations and changes in their cash flows for the periods indicated and that
they have been prepared in accordance with GAAP, in each case, subject to
normal year-end audit adjustments and the omission of any footnotes as
permitted by the SEC (publicly filing the Borrower’s Form 10-Q with the SEC in
any event will satisfy the requirements of this subsection subject to Section
6.6(b) and shall be deemed furnished and delivered on the date such information
has been posted on the SEC website accessible through
http://www.sec.gov/edgar/searchedgar/webusers.htm or such successor webpage of
the SEC thereto));

 

(ii)           not later than the earlier of (x) one
hundred twenty (120) days after the end of each fiscal year of the Borrower,
and (y) five (5) days after the date the Borrower is required to file with the
SEC its report on Form 10-K with respect to such fiscal year, the consolidated
balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal
year and the related consolidated statements of income and retained earnings
and of cash flows for such fiscal year and setting forth consolidated
comparative figures as of the end of and for the preceding fiscal year, audited
by an independent nationally-recognized accounting firm and in the form filed
with the SEC (publicly filing the Borrower’s Form 10-K with the SEC in any
event will satisfy the requirements of this subsection subject to Section
6.6(b) and shall be deemed furnished and delivered on the date such information
has been posted on the SEC website accessible through http://www.sec.gov/edgar/searchedgar/webusers.htm
or such successor webpage of the SEC thereto));

 

(iii)          commencing with fiscal year 2008, to
the extent actually prepared and approved by the Borrower’s board of directors,
a projection of Borrower’s consolidated balance sheet and consolidated income,
retained earnings and cash flows for its current

 

40

 

fiscal year showing such
projected budget for each fiscal quarter of the Borrower ending during such
year; and

 

(iv)          within ten (10) days after the sending
or filing thereof, copies of all financial statements, projections, documents
and other communications that the Borrower sends to its stockholders generally
or publicly files with the SEC or any similar governmental authority (and is
publicly available); provided
that publicly filing such documents with the SEC in any event will satisfy the
requirements of this subsection subject to Section 6.6(b) and shall be deemed
furnished and delivered on the date such information has been posted on the SEC
website accessible through http://www.sec.gov/edgar/searchedgar/webusers.htm or
such successor webpage of the SEC thereto.

 

The Administrative Agent will forward
promptly to the Lenders the information provided by the Borrower pursuant to
(i) through (iv) above.

 

(b)           Compliance Certificates. Within the respective time
periods set forth in subsections (i) and (ii) of Section 6.6(a) for furnishing
financial statements, the Borrower shall deliver (i) additional information
setting forth calculations excluding the effects of any SPVs and containing
such calculations for any SPVs as reasonably requested by the Administrative
Agent, and (ii) (x) a written certificate signed by the Borrower’s chief
financial officer (or other financial officer of the Borrower), in his or her
capacity as such, to the effect that no Default or Event of Default then exists
or, if any such Default or Event of Default exists as of the date of such
certificate, setting forth a description of such Default or Event of Default
and specifying the action, if any, taken by the Borrower to remedy the same,
and (y) a Compliance Certificate in the form of Exhibit 6.6 showing the
Borrower’s compliance with certain of the covenants (to the extent then
applicable) set forth herein.

 

(c)           Reserved.

 

(d)           Notice of Events Relating to Environmental Laws and
Claims. Promptly after any officer of the Borrower obtains knowledge of any
of the following, the Borrower will provide the Administrative Agent with
written notice in reasonable detail of any of the following that, individually
or in the aggregate, could reasonably be expected to have a Material Adverse
Effect:

 

(i)            any pending or threatened
Environmental Claim against the Borrower, any of its Subsidiaries or any SPV or
any property owned or operated by the Borrower, any of its Subsidiaries or any
SPV;

 

(ii)           any condition or occurrence on any
property owned or operated by the Borrower, any of its Subsidiaries or any SPV
that results in noncompliance by the Borrower, any of its Subsidiaries or any
SPV with any Environmental Law; and

 

(iii)          the taking of any material remedial
action in response to the actual or alleged presence of any Hazardous Material
on any property owned or operated by the

 

41

 

Borrower,
any of its Subsidiaries or any SPV other than in the ordinary course of
business.

 

(e)           Notices of Default, Litigation, Etc. The Borrower
will promptly, and in any event within five (5) Business Days, after an officer
of the Borrower has knowledge thereof, give written notice to the
Administrative Agent of (who will in turn provide notice to the Lenders
of):  (i) the occurrence of any Default
or Event of Default; (ii) any litigation or governmental proceeding of the type
described in Section 5.4; (iii) any circumstance that has had or could
reasonably be expected to have a Material Adverse Effect; (iv) the occurrence
of any event which has resulted in a breach of, or is reasonably expected to
result in a breach of, Section 6.17 or 6.18; and (v) any notice received by it,
any Subsidiary or any SPV from the holder(s) of Indebtedness of the Borrower,
any Subsidiary or any SPV in an amount which, in the aggregate, exceeds
$75,000,000 (or, if denominated in a currency other than U.S. Dollars, the Dollar
Equivalent of $75,000,000), where such notice states or claims the existence or
occurrence of any default or event of default with respect to such Indebtedness
under the terms of any indenture, loan or credit agreement, debenture, note, or
other document evidencing or governing such Indebtedness.

 

Section 6.7.            Lender Inspection Rights.
Upon reasonable notice from the Administrative Agent or any Lender, the
Borrower will permit the Administrative Agent or any Lender (and such Persons
as the Administrative Agent or such Lender may reasonably designate) during
normal business hours at such entity’s sole expense unless a Default or Event
of Default shall have occurred and be continuing, in which event at the
Borrower’s expense, to visit and inspect any of the properties of the Borrower
or any of its Subsidiaries, to examine all of their books and records, to make
copies and extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers and independent public
accountants (and by this provision the Borrower authorizes such accountants to
discuss with the Administrative Agent and any Lender (and such Persons as the
Administrative Agent or such Lender may reasonably designate) the affairs,
finances and accounts of the Borrower and its Subsidiaries), all as often, and
to such extent, as may be reasonably requested. The chief financial officer of
the Borrower and/or his or her designee shall be afforded the opportunity to be
present at any meeting of the Administrative Agent or the Lenders and such
accountants. The Administrative Agent agrees to use reasonable efforts to
minimize, to the extent practicable, the number of separate requests from the
Lenders to exercise their rights under this Section 6.7 and/or Section 6.6 and
to coordinate the exercise by the Lenders of such rights.

 

Section 6.8.            Conduct of Business. The
Borrower and its Subsidiaries will at all times remain primarily engaged in (i)
the contract drilling business, and the provision of turnkey drilling services,
(ii) the provision of services to the energy industry, (iii) other
existing businesses described in the Borrower’s and GSF’s quarterly reports on
Form 10-Q filed with the SEC for the quarter ended September 30, 2007,
including without limitation, the oil and gas exploration and production
business, or (iv) any related businesses (each a “Permitted Business”).

 

42

 

Section 6.9.            Use of Proceeds; Margin
Regulations.

 

(a)           Use of Proceeds. The proceeds of the Loans shall
only be used to refinance amounts outstanding on the Effective Date under the
Existing Credit Facility, for repayment and debt service on the Bridge
Facility, as a commercial paper backstop, for permitted investments and
acquisitions, and for capital expenditures and other general corporate purposes
of the Borrower and its Subsidiaries.

 

(b)           Margin Stock. Neither the Borrower nor any of its
Subsidiaries is engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock. No proceeds of the Loans will be used for
a purpose which violates Regulations T, U or X of the Board of Governors of the
Federal Reserve System. After application of the proceeds of the Loans less
than 25% of the assets of each of the Borrower and its Subsidiaries consists of
“margin stock” (as defined in
Regulation U of the Board of Governors of the Federal Reserve System).

 

Section 6.10.          Restrictions on Fundamental Changes.
The Borrower shall not merge, consolidate or amalgamate with any other Person,
or cause or permit any dissolution of the Borrower or liquidation of its
assets, or sell, transfer or otherwise dispose of all or substantially all of
the Borrower’s assets, except that:

 

(a)           The Borrower may merge into, or consolidate or amalgamate
with, any other Person if upon the consummation of any such merger,
consolidation or amalgamation the Borrower is the surviving Person to any such
merger, consolidation or amalgamation; and

 

(b)           The Borrower may sell or transfer all or substantially all
of its assets (including stock in its Subsidiaries) to any Person if such
Person is a Subsidiary of the Borrower (or a Person who will contemporaneously
therewith become a Subsidiary of the Borrower);

 

provided in the case of any transaction described in
the preceding clauses (a) and (b), no Default or Event of Default shall exist
immediately prior to, or after giving effect to, such transaction.

 

Section 6.11.          Liens. The Borrower and its
Subsidiaries shall not create, incur, assume or suffer to exist any Lien of any
kind on any property or asset of any kind of the Borrower or any Subsidiary,
except the following (collectively, the “Permitted
Liens”):

 

(a)           Liens existing on the Effective Date (each such Lien, to
the extent it secures Indebtedness or other obligations in an aggregate amount
of $30,000,000 (or, if denominated in a currency other than U.S. Dollars, the
Dollar Equivalent of $30,000,000) or more, being described on Schedule 5.16
attached hereto);

 

(b)           Liens arising in the ordinary course of business by
operation of law, deposits, pledges or other Liens in connection with workers’
compensation, unemployment insurance, old age benefits, social security
obligations, taxes, assessments, public or statutory obligations or other
similar charges, good faith deposits, pledges or other Liens in connection with
(or to obtain letters of credit in connection with) bids, performance,
return-of-money or payment bonds, contracts or leases to which the Borrower or
its Subsidiaries are parties or other deposits required to be made in the
ordinary course of business; provided that
in each case the obligation secured

 

43

 

is not for Indebtedness for
borrowed money and is not overdue or, if overdue, is being contested in good
faith by appropriate proceedings and reserves in conformity with GAAP have been
provided therefor;

 

(c)           mechanics’, workmen’s, materialmen’s, landlords’, carriers’,
maritime or other similar Liens arising in the ordinary course of business (or
deposits to obtain the release of such Liens) related to obligations not
overdue for more than thirty (30) days if such Liens arise with respect to
domestic assets and for more than ninety (90) days if such Liens arise with
respect to foreign assets, or, if so overdue, that are being contested in good
faith by appropriate proceedings and reserves in conformity with GAAP have been
provided therefor, or if such Liens otherwise could not reasonably be expected
to have a Material Adverse Effect;

 

(d)           Liens for Taxes not more than ninety (90) days past due or
which can thereafter be paid without penalty or which are being contested in
good faith by appropriate proceedings and reserves in conformity with GAAP have
been provided therefor, or if such Liens otherwise could not reasonably be
expected to have a Material Adverse Effect;

 

(e)           Liens imposed by ERISA (or comparable foreign laws) which
are being contested in good faith by appropriate proceedings and reserves in
conformity with GAAP have been provided therefor, or if such Liens otherwise
could not reasonably be expected to have a Material Adverse Effect;

 

(f)            Liens arising out of judgments or awards against the
Borrower or any of its Subsidiaries, or in connection with surety or appeal
bonds or the like in connection with bonding such judgments or awards, the time
for appeal from which or petition for rehearing of which shall not have expired
or for which the Borrower or such Subsidiary shall be prosecuting on appeal or
proceeding for review, and for which it shall have obtained (within thirty (30)
days with respect to a judgment or award rendered in the United States or
within sixty (60) days with respect to a judgment or award rendered in a
foreign jurisdiction after entry of such judgment or award or expiration of any
previous such stay, as applicable) a stay of execution or the like pending such
appeal or proceeding for review; provided,
that the aggregate amount of uninsured or underinsured liabilities
(net of customary deductibles, and including interest, costs, fees and
penalties, if any) of the Borrower and its Subsidiaries secured by such Liens
shall not exceed the Dollar Equivalent of $125,000,000 at any one time
outstanding;

 

(g)           Liens on fixed or capital assets acquired, constructed,
improved, altered or repaired by the Borrower or any Subsidiary and related
contracts, intangibles and other assets that are incidental thereto (including
accessions thereto and replacements thereof) or otherwise arise therefrom; provided that (i) such Liens secure
Indebtedness otherwise permitted by this Agreement, (ii) such Liens and the
Indebtedness secured thereby are incurred prior to or within 365 days after
such acquisition or the later of the completion of such construction,
improvement, alteration or repair or the date of commercial operation of the
assets constructed, improved, altered or repaired, (iii) the Indebtedness
secured thereby does not exceed the cost of acquiring, constructing, improving,
altering or repairing such fixed or capital assets, as the case may be, and
(iv) such Lien shall not apply to any other property or assets of the Borrower
or any Subsidiary;

 

44

 

(h)           Liens securing Interest Rate Protection Agreements or
foreign exchange hedging obligations incurred in the ordinary course of
business and not for speculative purposes;

 

(i)            Liens on property existing at the time such property is
acquired by the Borrower or any Subsidiary of the Borrower and not created in
contemplation of such acquisition (or on repairs, renewals, replacements,
additions, accessions and betterments thereto), and Liens on the assets of any
Person at the time such Person becomes a Subsidiary of the Borrower and not
created in contemplation of such Person becoming a Subsidiary of the Borrower
(or on repairs, renewals, replacements, additions, accessions and betterments
thereto;

 

(j)            any extension, renewal or replacement (or successive
extensions, renewals or replacements) in whole or in part of any Lien referred
to in the foregoing subsections (a) through (i), provided, however, that the principal amount of Indebtedness
secured thereby does not exceed the principal amount secured at the time of
such extension, renewal or replacement (other than amounts incurred to pay
costs of such extension, renewal or replacement), and that such extension,
renewal or replacement is limited to the property already subject to the Lien
so extended, renewed or replaced (together with accessions and improvements
thereto and replacements thereof);

 

(k)           rights reserved to or vested in any municipality or
governmental, statutory or public authority by the terms of any right, power,
franchise, grant, license or permit, or by any provision of law, to terminate
such right, power, franchise, grant, license or permit or to purchase, condemn,
expropriate or recapture or to designate a purchaser of any of the property of
a Person;

 

(l)            rights reserved to or vested in any municipality or
governmental, statutory or public authority to control, regulate or use any
property of a Person;

 

(m)          rights of a common owner of any interest in property held
by a Person and such common owner as tenants in common or through other common
ownership;

 

(n)           encumbrances (other than to secure the payment of
Indebtedness), easements, restrictions, servitudes, permits, conditions,
covenants, exceptions or reservations in any property or rights-of-way of a
Person for the purpose of roads, pipelines, transmission lines, transportation
lines, distribution lines, removal of gas, oil, coal, metals, steam, minerals,
timber or other natural resources, and other like purposes, or for the joint or
common use of real property, rights-of-way, facilities or equipment, or
defects, irregularity and deficiencies in title of any property or
rights-of-way;

 

(o)           Liens created by or resulting from zoning, planning and
environmental laws and ordinances and municipal regulations;

 

(p)           Liens created or evidenced by or resulting from financing
statements filed by lessors of property (but only with respect to the property
so leased);

 

(q)           Liens on property securing Non-recourse Debt;

 

45

 

(r)            Liens on the stock or assets of SPVs;

 

(s)           other Liens created in connection with securitization
programs, if any, of the Borrower and its Subsidiaries;

 

(t)            Liens on the drillships and related assets securing the
Angolan Debt and the Pacific Drilling Debt;

 

(u)           Liens securing Indebtedness or other obligations
(i) of the Borrower in favor of any wholly owned Subsidiary of the
Borrower, or (ii) of any wholly owned Subsidiary of the Borrower in favor
of the Borrower or another wholly owned Subsidiary of the Borrower; and

 

(v)           Liens (not otherwise permitted by this Section 6.11)
securing Indebtedness (or other obligations) not exceeding at the time of
incurrence thereof (together with all such other Liens securing Indebtedness
(or other obligations) outstanding pursuant to this clause (v) at such time)
ten percent (10%) of Consolidated Tangible Net Worth.

 

Section 6.12.          Subsidiary Indebtedness. The
Borrower shall not permit its Subsidiaries to incur, assume or suffer to exist
any Indebtedness, except:

 

(a)           existing Indebtedness outstanding on the Effective Date
(such Indebtedness, to the extent the principal amount thereof is $30,000,000
(or, if denominated in a currency other than U.S. Dollars, the Dollar
Equivalent of $30,000,000) or more, being described on Schedule 5.15
attached hereto), and any subsequent extensions, renewals or refinancings
thereof (i) so long as such Indebtedness is not increased in amount (other than
amounts incurred to pay costs of such extension, renewal or refinancing), the
scheduled maturity date thereof (if prior to the Maturity Date) is not
accelerated, the interest rate per annum applicable thereto is not increased,
any scheduled amortization of principal thereunder prior to the Maturity Date
is not shortened and the payments thereunder are not increased, or (ii) such
extensions, renewals or refinancings are otherwise expressly permitted by, and
are effected pursuant to, another clause in this Section 6.12 (other than
clause (l) hereof);

 

(b)           Indebtedness under the Credit Documents;

 

(c)           intercompany loans and advances to the Borrower or its
Subsidiaries, and intercompany loans and advances from any of such Subsidiaries
or SPVs to the Borrower or any other Subsidiaries of the Borrower;

 

(d)           Indebtedness under any Interest Rate Protection Agreements
and any Currency Rate Protection Agreements;

 

(e)           Indebtedness (i) under unsecured lines of credit for
overdrafts or for working capital purposes in foreign countries with financial
institutions, and (ii) arising from the honoring by a bank or other Person of a
check, draft or similar instrument inadvertently drawing against insufficient
funds, all such Indebtedness not to exceed the Dollar Equivalent of
$300,000,000 in

 

46

 

the aggregate at any time
outstanding, provided that
amounts under overdraft lines of credit or outstanding as a result of drawings
against insufficient funds shall be outstanding for one (1) Business Day before
being included in such aggregate amount;

 

(f)            Indebtedness of a Person existing at the time such Person
becomes a Subsidiary of the Borrower or is merged, consolidated or amalgamated
with or into the Borrower or any Subsidiary of the Borrower and not incurred in
contemplation of such transaction, and extensions, renewals or refinancings
thereof that do not increase the amount of such Indebtedness (other than
amounts included to pay costs of such extension, renewal or refinancing);

 

(g)           Indebtedness (i) under Performance Guaranties and
Performance Letters of Credit, and (ii) with respect to letters of credit
issued in the ordinary course of business;

 

(h)           Indebtedness created in connection with securitization
programs, if any;

 

(i)            Indebtedness (not otherwise permitted under any other
clause of this Section 6.12) in an aggregate principal amount outstanding for
all Subsidiaries not exceeding at the time of incurrence thereof (together with
all such other Indebtedness outstanding pursuant to this clause (i) at such
time) ten percent (10%) of Consolidated Net Assets (the “Subsidiary Debt Basket Amount”);

 

(j)            other Indebtedness not otherwise permitted under any
other clause of this Section 6.12 so long as such Subsidiary has in force a
Subsidiary Guaranty in substantially the form of Exhibit 6.12, provided that such Subsidiary Guaranty
shall contain a provision that such Subsidiary Guaranty and all obligations
thereunder of the Guarantor party thereto shall be terminated upon delivery to
the Administrative Agent by the Borrower of a certificate stating that (x) the
aggregate principal amount of Indebtedness of all Subsidiaries outstanding
pursuant to the preceding clause (i) and this clause (j) is equal to or less
than the Subsidiary Debt Basket Amount, and (y) no Default or Event of Default
has occurred and is continuing;

 

(k)           Indebtedness created in respect of the Angolan Debt and
the Pacific Drilling Debt; and

 

(l)            Extensions, renewals or replacements of Indebtedness
permitted by this Section 6.12 that do not increase the amount of such
Indebtedness (other than amounts incurred to pay costs of such extension,
renewal or refinancing).

 

Section 6.13.          Use of Property and Facilities;
Environmental Laws. The Borrower and its Subsidiaries shall comply in all
material respects with all Environmental Laws applicable to or affecting the
properties or business operations of the Borrower or any Subsidiary of the
Borrower, where the failure to comply could reasonably be expected to have a
Material Adverse Effect.

 

Section 6.14.          Transactions with Affiliates. Except
as otherwise specifically permitted herein, or as described on Schedule
6.14, the Borrower and its Subsidiaries shall not (except

 

47

 

pursuant to contracts
outstanding as of (i) with respect to the Borrower, the Effective Date or (ii)
with respect to any Subsidiary of the Borrower, the Effective Date or, if
later, the date such Subsidiary first became a Subsidiary of the Borrower),
including, without limitation, any Employee Benefit Plans or related trusts),
enter into or engage in any material transaction or arrangement or series of
related transactions or arrangements which in the aggregate would be material with
any Controlling Affiliate (other than the Borrower or any Subsidiaries of the
Borrower), including without limitation, the purchase from, sale to or exchange
of property with, any merger, consolidation, or amalgamation with or into, or
the rendering of any service by or for, any Controlling Affiliate (other than
the Borrower or any Subsidiaries of the Borrower), except pursuant to the
requirements of the Borrower’s or such Subsidiary’s business and unless such
transaction or arrangement or series of related transactions or arrangements,
taken as a whole, are no less favorable to the Borrower or such Subsidiary than
would be obtained in an arms’ length transaction with a Person not a
Controlling Affiliate (other than the Borrower or any Subsidiaries of the
Borrower).

 

Section 6.15.          Sale and Leaseback Transactions.
The Borrower will not, and will not permit any of its Subsidiaries to, enter
into, assume, or suffer to exist any Sale-Leaseback Transaction, except any
such transaction that may be entered into, assumed or suffered to exist without
violating any other provision of this Agreement, including without limitation,
Section 6.17 or 6.18.

 

Section 6.16.          Compliance with Laws. Without
limiting any of the other covenants of the Borrower in this Article 6, the
Borrower and its Subsidiaries shall conduct their business, and otherwise be,
in compliance with all applicable laws, regulations, ordinances and orders of
any governmental or judicial authorities; provided,
however, that this Section 6.16 shall not require the Borrower or
any Subsidiary of the Borrower to comply with any such law, regulation,
ordinance or order if (x) it shall be contesting such law, regulation,
ordinance or order in good faith by appropriate proceedings and reserves in
conformity with GAAP have been provided therefor, or (y) the failure to comply
therewith could not reasonably be expected to have a Material Adverse Effect.

 

Section 6.17.          Indebtedness to Total Tangible
Capitalization Ratio. The Borrower will maintain, as of the end of each
fiscal quarter of the Borrower ending on or after the second anniversary of the
Effective Date, a ratio of Consolidated Indebtedness as at the end of such
fiscal quarter to Total Tangible Capitalization as at the end of such fiscal
quarter of no greater than 0.60:1.00.

 

Section 6.18.          Leverage Ratio. The Borrower
will maintain (i) as of June 30, 2008, a Leverage Ratio of no greater than
3.50:1.00, and (ii) as of the end of each fiscal quarter of the Borrower
ending after June 30, 2008 until the end of the fiscal quarter ending
immediately prior to the second anniversary of the Effective Date, a Leverage
Ratio (on a pro forma basis, as applicable) no greater than 3.00:1.00.

 

48

 

ARTICLE 7.          EVENTS OF DEFAULT AND REMEDIES.

 

Section 7.1.            Events of Default. Any one or
more of the following shall constitute an Event of Default:

 

(a)           default by the Borrower in the payment of any principal
amount of any Loan or any interest thereon, or any fees payable hereunder,
within three (3) Business Days following the date when due;

 

(b)           default by the Borrower in the observance or performance
of any covenant set forth in Sections 6.10, 6.11, 6.17 or 6.18;

 

(c)           default by the Borrower in the observance or performance
of any provision hereof or of any other Credit Document not mentioned in
clauses (a) or (b) above, which is not remedied within thirty (30) days after
notice thereof to the Borrower by the Administrative Agent;

 

(d)           any representation or warranty made or deemed made herein
or in any other Credit Document by the Borrower or any Subsidiary proves untrue
in any material respect as of the date of the making, or deemed making,
thereof;

 

(e)           (x) Indebtedness in the aggregate principal amount of the
Dollar Equivalent of $125,000,000 of the Borrower and its Subsidiaries (“Material Indebtedness”) shall (i) not be
paid at maturity (beyond any applicable grace periods), or (ii) be declared to
be due and payable or required to be prepaid, redeemed or repurchased prior to
its stated maturity, or (y) any default in respect of Material Indebtedness
shall occur which permits the holders thereof, or any trustees or agents on
their behalf, to accelerate the maturity of such Indebtedness or requires such
Indebtedness to be prepaid, redeemed, or repurchased prior to its stated
maturity;

 

(f)            the Borrower or any Significant Subsidiary (i) has
entered involuntarily against it an order for relief under the United States
Bankruptcy Code or a comparable action is taken under any bankruptcy or insolvency
law of another country or political subdivision of such country, (ii) generally
does not pay, or admits its inability generally to pay, its debts as they
become due, (iii) makes a general assignment for the benefit of creditors, (iv)
applies for, seeks, consents to, or acquiesces in, the appointment of a
receiver, custodian, trustee, liquidator or similar official for it or any
substantial part of its property under the United States Bankruptcy Code or
under the bankruptcy or insolvency laws of another country or a political
subdivision of such country, (v) institutes any proceeding seeking to have
entered against it an order for relief under the United States Bankruptcy Code
or any comparable law, to adjudicate it insolvent, or seeking dissolution, winding
up, liquidation, reorganization, arrangement, adjustment or composition of it
or its debts under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors or fails to file an answer or other pleading denying the
material allegations of or consents to or acquiesces in any such proceeding
filed against it, (vi) makes any board of directors resolution in direct
furtherance of any matter described in clauses (i)-(v) above, or (vii) fails to
contest in good faith any appointment or proceeding described in this Section
7.1(f);

 

(g)           a custodian, receiver, trustee, liquidator or similar
official is appointed for the Borrower or any Significant Subsidiary or any
substantial part of its property under the United

 

49

 

States Bankruptcy Code or
under the bankruptcy or insolvency laws of another country or a political
subdivision of such country, or a proceeding described in Section 7.1(f)(v) is
instituted against the Borrower or any Significant Subsidiary, and such
appointment continues undischarged or such proceeding continues undismissed and
unstayed for a period of sixty (60) days (or one hundred twenty (120) days in
the case of any such event occurring outside the United States of America);

 

(h)           the Borrower or any Subsidiaries of the Borrower fail
within thirty (30) days with respect to any judgments or orders that are
rendered in the United States or sixty (60) days with respect to any judgments
or orders that are rendered in foreign jurisdictions (or such earlier date as
any execution on such judgments or orders shall take place) to vacate, pay,
bond or otherwise discharge any judgments or orders for the payment of money
the uninsured portion of which is in excess of the Dollar Equivalent of
$125,000,000 in the aggregate and which are not stayed on appeal or otherwise
being appropriately contested in good faith in a manner that stays execution;

 

(i)            (x) the Borrower or any Subsidiary of the Borrower fails
to pay when due an amount that it is liable to pay to the PBGC or to a Plan
under Title IV of ERISA; or a notice of intent to terminate a Plan having
Unfunded Vested Liabilities of the Borrower or any of its Subsidiaries in
excess of the Dollar Equivalent of $125,000,000 (a “Material Plan”) is filed under Title IV of ERISA; or the
PBGC institutes proceedings under Title IV of ERISA to terminate or to cause a
trustee to be appointed to administer any Material Plan or a proceeding is
instituted by a fiduciary of any Material Plan against any Borrower or any
Subsidiary to collect any liability under Section 515 or 4219(c)(5) of ERISA,
and in each case such proceeding is not dismissed within thirty (30) days
thereafter; or a condition exists by reason of which the PBGC would be entitled
to obtain a decree adjudicating that any Material Plan must be terminated, and
(y) the occurrence of one or more of the matters in the preceding clause (x)
could reasonably be expected to result in liabilities in excess of the Dollar
Equivalent of $125,000,000;

 

(j)            any Person or group of Persons acting in concert (as such
terms are used in Rule 13d-5 under the Securities Exchange Act of 1934, as
amended) shall own, directly or indirectly, beneficially or of record,
securities of the Borrower (or other securities convertible into such
securities) representing fifty percent (50%) or more of the combined voting
power of all outstanding securities of the Borrower entitled to vote in the
election of directors, other than securities having such power only by reason
of the happening of a contingency;

 

(k)           the existence or occurrence of any “Event of Default” as
defined in the Five-Year Revolving Credit Agreement.

 

Section 7.2.            Non-Bankruptcy Defaults. When
any Event of Default (other than those described in subsections (f) or (g) of
Section 7.1 with respect to the Borrower) has occurred and is continuing, the
Administrative Agent shall, by notice to the Borrower: (a) if so directed by
the Required Lenders, terminate the remaining Commitments to the Borrower
hereunder on the date stated in such notice (which may be the date thereof) and
(b) if so directed by the Required Lenders, declare the principal of and the
accrued interest on all outstanding Loans to be forthwith due and payable and
thereupon all outstanding Loans, including both principal and interest thereon,
shall be and become immediately due and payable together with all other accrued

 

50

 

amounts payable under the
Credit Documents without further demand, presentment, protest or notice of any
kind, including, but not limited to, notice of intent to accelerate and notice
of acceleration, each of which is expressly waived by the Borrower. The
Administrative Agent, after giving notice to the Borrower pursuant to this Section
7.2, shall also promptly send a copy of such notice to the other Lenders, but
the failure to do so shall not impair or annul the effect of such notice.

 

Section 7.3.            Bankruptcy Defaults. When any
Event of Default described in subsections (f) or (g) of Section 7.1 has
occurred and is continuing with respect to the Borrower, then all outstanding
Loans shall immediately become due and payable together with all other accrued
amounts payable under the Credit Documents without presentment, demand, protest
or notice of any kind, each of which is expressly waived by the Borrower; and
all obligations of the Lenders to extend further credit pursuant to any of the
terms hereof shall immediately terminate.

 

Section 7.4.            Notice of Default. The
Administrative Agent shall give notice to the Borrower under Section 7.2
promptly upon being requested to do so by the Required Lenders and shall
thereupon notify all the Lenders thereof.

 

Section 7.5.            Expenses. The Borrower agrees
to pay to the Administrative Agent and each Lender all reasonable out-of-pocket
expenses incurred or paid by the Administrative Agent or such Lender, including
reasonable attorneys’ fees and court costs, in connection with any Default or
Event of Default hereunder or in connection with the enforcement of any of the
Credit Documents.

 

Section 7.6.            Distribution and Application of
Proceeds. After the occurrence of and during the continuance of an Event of
Default, any payment to the Administrative Agent or any Lender hereunder or
otherwise shall be paid to the Administrative Agent to be distributed and
applied as follows (unless otherwise agreed by the Borrower, the Administrative
Agent, and all Lenders):

 

(a)           First, to the payment of any and all reasonable
out-of-pocket costs and expenses of the Administrative Agent, including without
limitation, reasonable attorneys’ fees and out-of-pocket costs and expenses, as
provided by this Agreement or by any other Credit Document, incurred in
connection with the collection of such payment or in respect of the enforcement
of any rights of the Administrative Agent or the Lenders under this Agreement
or any other Credit Document;

 

(b)           Second, to the payment of any and all reasonable
out-of-pocket costs and expenses of the Lenders, including, without limitation,
reasonable attorneys’ fees and out-of-pocket costs and expenses, as provided by
this Agreement or by any other Credit Document, incurred in connection with the
collection of such payment or in respect of the enforcement of any rights of
the Lenders under this Agreement or any other Credit Document, pro rata in the proportion in which the
amount of such costs and expenses unpaid to each Lender bears to the aggregate
amount of the costs and expenses unpaid to all Lenders collectively, until all
such fees, costs and expenses have been paid in full;

 

51

 

(c)           Third, to the payment of any due and unpaid fees to the
Administrative Agent or any Lender as provided by this Agreement or any other
Credit Document, pro rata in the
proportion in which the amount of such fees due and unpaid to the
Administrative Agent and each Lender bears to the aggregate amount of the fees
due and unpaid to the Administrative Agent and all Lenders collectively, until
all such fees have been paid in full;

 

(d)           Fourth, to the payment of accrued and unpaid interest on
the Loans to the date of such application, pro
rata in the proportion in which the amount of such interest, accrued
and unpaid to each Lender bears to the aggregate amount of such interest accrued
and unpaid to all Lenders collectively, until all such accrued and unpaid
interest has been paid in full;

 

(e)           Fifth, to the payment of the outstanding due and payable
principal amount of each of the Loans, pro
rata in the proportion in which the outstanding principal amount of
such Loans owing to each Lender bears to the aggregate amount of all
outstanding Loans;

 

(f)            Sixth, to the payment of any other outstanding
Obligations then due and payable, pro rata
in the proportion in which the outstanding Obligations owing to each Lender and
the Administrative Agent bears to the aggregate amount of all such Obligations
until all such Obligations have been paid in full; and

 

(g)           Seventh, to the Borrower or as the Borrower may direct.

 

ARTICLE 8.          CHANGE IN CIRCUMSTANCES.

 

Section 8.1.            Change of Law.

 

(a)           Notwithstanding any other provisions of this Agreement or
any Note, if at any time any change, after the date hereof (or, if later, after
the date the Administrative Agent or any Lender becomes the Administrative
Agent or a Lender), in applicable law or regulation or in the interpretation
thereof makes it unlawful for any Lender to make or maintain Eurodollar Loans,
such Lender shall promptly give written notice thereof and of the basis
therefor in reasonable detail to the Borrower, and such Lender’s obligations to
fund affected Eurodollar Loans or make, continue or convert such Loans under
this Agreement, shall thereupon be suspended until it is no longer unlawful for
such Lender to make or maintain such Loans.

 

(b)           Upon the giving of the notice to Borrower referred to in
subsection (a) above in respect of any such Loan, and provided the Borrower
shall not have prepaid such Loan pursuant to Section 2.9, (i) any outstanding
such Loan of such Lender shall be automatically converted to a Base Rate Loan
on the last day of the Interest Period then applicable thereto or on such
earlier date as required by law, and (ii) such Lender shall make or continue
its portion of any requested Borrowing of such Loan as a Base Rate Loan, which
Base Rate Loan shall, for all other purposes, be considered part of such
Borrowing.

 

52

 

(c)           Any Lender that has given any notice pursuant to Section
8.1(a) shall, upon determining that it would no longer be unlawful for it to
make such Loans, give prompt written notice thereof to the Borrower and the
Administrative Agent, and upon giving such notice, its obligation to make,
allow conversions into and maintain such Loans shall be reinstated.

 

Section 8.2.            Unavailability of Deposits or
Inability to Ascertain LIBOR Rate. If on or before the first day of any
Interest Period for any Borrowing of Eurodollar Loans the Administrative Agent
determines in good faith (after consultation with the other Lenders) that, due
to changes in circumstances since the date hereof, adequate and fair means do
not exist for determining the LIBOR Rate (including without limitation, the
unavailability of matching deposits in the applicable currency) or such rate
will not accurately reflect the cost to the Required Lenders of funding
Eurodollar Loans for such Interest Period, the Administrative Agent shall give
written notice (in reasonable detail) of such determination and of the basis
therefor to the Borrower and the Lenders, whereupon until the Administrative
Agent notifies the Borrower and Lenders that the circumstances giving rise to
such suspension no longer exist (which the Administrative Agent shall do
promptly after they do not exist), (i) the obligations of the Lenders to make,
continue or convert Loans as or into such Eurodollar Loans, or to convert Base
Rate Loans into such Eurodollar Loans, shall be suspended and (ii) each
Eurodollar Loan will automatically on the last day of the then existing
Interest Period therefor, convert into a Base Rate Loan.

 

Section 8.3.            Increased Cost and Reduced Return.

 

(a)           If, on or after the date hereof, the adoption of or any
change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or its applicable Lending Office), with
any request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency exercising control over banks or
financial institutions generally issued after the date hereof (or, if later,
after the date the Administrative Agent or such Lender becomes the
Administrative Agent or a Lender):

 

(i)            subjects any Lender (or its
applicable Lending Office) to any tax, duty or other charge related to any
Eurodollar Loan or its obligation to advance or maintain Eurodollar Loans, or
shall change the basis of taxation of payments to any Lender (or its applicable
Lending Office) of the principal of or interest on its Eurodollar Loans or any
participations in any thereof, or any other amounts due under this Agreement
related to its Eurodollar Loans or participations therein, or its obligation to
make Eurodollar Loans or acquire participations therein (except for changes
with respect to taxes that are not Indemnified Taxes pursuant to Section 3.3);
or

 

(ii)           imposes, modifies or deems applicable
any reserve, special deposit or similar requirement (including, without
limitation, any such requirement imposed by the Board of Governors of the
Federal Reserve System, but excluding for any Eurodollar Loan any such
requirement included in an applicable Statutory Reserve Rate) against assets
of, deposits with or for the account of, or credit extended by, any Lender (or
its

 

53

 

applicable
Lending Office) or imposes on any Lender (or its Lending Office) or on the
interbank market any other condition affecting its Eurodollar Loans or its
participation in any thereof, or its obligation to advance or maintain
Eurodollar Loans or participate in any thereof;

 

and the result of any of the foregoing is to
increase the cost to such Lender (or its applicable Lending Office) of
advancing or maintaining any Eurodollar Loan, or to reduce the amount of any
sum received or receivable by such Lender (or its applicable Lending Office) in
connection therewith under this Agreement or its Note, by an amount deemed by
such Lender to be material, then, subject to Section 8.3(c), from time to time,
within thirty (30) days after receipt of a certificate from such Lender (with a
copy to the Administrative Agent) pursuant to subsection (c) below setting
forth in reasonable detail such determination and the basis thereof, the
Borrower shall be obligated to pay to such Lender such additional amount or
amounts as will compensate such Lender for such increased cost or reduction.

 

(b)           If, after the date hereof, the Administrative Agent or any
Lender shall have reasonably determined that the adoption after the date hereof
of any applicable law, rule or regulation regarding capital adequacy, or any
change therein (including, without limitation, any revision in the Final
Risk-Based Capital Guidelines of the Board of Governors of the Federal Reserve
System (12 CFR Part 208, Appendix A; 12 CFR Part 225, Appendix A) or of the
Office of the Comptroller of the Currency (12 CFR Part 3, Appendix A), or in
any other applicable capital adequacy rules heretofore adopted and issued by
any governmental authority), or any change after the date hereof in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by the Administrative Agent or any Lender (or its
applicable Lending Office) with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on such Lender’s capital, or on the capital of any corporation
controlling such Lender, as a consequence of its obligations hereunder to a
level below that which such Lender could have achieved but for such adoption,
change or compliance (taking into consideration such Lender’s or its
controlling corporation’s policies with respect to capital adequacy in effect
immediately before such adoption, change or compliance) by an amount reasonably
deemed by such Lender to be material, then, subject to Section 8.3(c), from
time to time, within thirty (30) days after its receipt of a certificate from
such Lender (with a copy to the Administrative Agent) pursuant to subsection
(c) below setting forth in reasonable detail such determination and the basis
thereof, the Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender for such reduction or the Borrower may
prepay all Eurodollar Loans of such Lender.

 

(c)           The Administrative Agent and each Lender that determines
to seek compensation or additional interest under this Section 8.3 or Section
2.14 shall give written notice to the Borrower and, in the case of a Lender
other than the Administrative Agent, the Administrative Agent of the
circumstances that entitle the Administrative Agent or such Lender to such
compensation no later than ninety (90) days after the Administrative Agent or
such Lender receives actual notice or obtains actual knowledge of the law,
rule, order or interpretation or occurrence of another event giving rise to a
claim hereunder. In any event the Borrower shall not

 

54

 

have any obligation to pay
any amount with respect to claims accruing prior to the ninetieth day preceding
such written demand, except if the law, rule, order or interpretation giving
rise to such request for compensation has retroactive effect, such ninety (90)
day period shall be extended to include such retroactive period. The Administrative
Agent and each Lender shall use reasonable efforts to avoid the need for, or
reduce the amount of, such compensation, additional interest, and any payment
under Section 3.3, including, without limitation, the designation of a
different Lending Office, if such action or designation will not, in the sole
judgment of the Administrative Agent or such Lender made in good faith, be
otherwise disadvantageous to it; provided
that the foregoing shall not in any way affect the rights of any
Lender or the obligations of the Borrower under this Section 8.3 or Section
2.14, and provided further that
no Lender shall be obligated to make its Eurodollar Loans hereunder at any
office located in the United States of America. A certificate of the
Administrative Agent or any Lender, as applicable, claiming compensation or
additional interest under this Section 8.3 or Section 2.14, and setting forth
the additional amount or amounts to be paid to it hereunder and accompanied by
a statement prepared by the Administrative Agent or such Lender describing in
reasonable detail the calculations thereof shall be prima facie evidence of the correctness thereof. In
determining such amount, such Lender may use any reasonable averaging and
attribution methods.

 

Section 8.4.            Lending Offices. The
Administrative Agent and each Lender may, at its option, elect to make or
maintain its Loans hereunder at the Lending Office for each type of Loan
available hereunder or at such other of its branches, offices or affiliates as
it may from time to time elect and designate in a written notice to the
Borrower and the Administrative Agent, provided
that, except in the case of any
such transfer to another of its branches, offices or affiliates made at the
request of the Borrower, the Borrower shall not be responsible for the costs
arising under Section 3.3 or 8.3 resulting from any such transfer to the extent
not otherwise applicable to such Lender prior to such transfer.

 

Section 8.5.            Discretion of Lender as to Manner
of Funding. Subject to the other provisions of this Agreement, each Lender
shall be entitled to fund and maintain its funding of all or any part of its
Loans in any manner it sees fit.

 

Section 8.6.            Substitution of Lender. If
(a) any Lender has demanded compensation or additional interest or given notice
of its intention to demand compensation or additional interest under Section
8.3 or Section 2.14, (b) the Borrower is required to pay any additional amount
to any Lender under Section 2.11, (c) any Lender is unable to submit any form
or certificate required under Section 3.3(b) or withdraws or cancels any
previously submitted form with no substitution therefor, (d) any Lender gives
notice of any change in law or regulations, or in the interpretation thereof,
pursuant to Section 8.1, (e) any Lender has been declared insolvent or a
receiver or conservator has been appointed for a material portion of its
assets, business or properties, (f) any Lender shall seek to avoid its
obligation to make or maintain Loans hereunder for any reason, including,
without limitation, reliance upon 12 U.S.C. § 1821(e) or (n) (1) (B), (g)
any taxes referred to in Section 3.3 have been levied or imposed (or the
Borrower determines in good faith that there is a substantial likelihood that
such taxes will be levied or imposed) so as to require withholding or
deductions by the Borrower or payment by the Borrower of additional amounts to
any Lender, or other reimbursement or indemnification of any Lender, as a
result thereof, or (h) any Lender shall decline to consent to a modification or
waiver of the terms of this

 

55

 

Agreement or any other
Credit Documents requested by the Borrower, or then and in such event, upon
request from the Borrower delivered to such Lender and the Administrative
Agent, such Lender shall assign, in accordance with the provisions of Section
10.10 and an appropriately completed Assignment Agreement, all of its rights
and obligations under the Credit Documents to another Lender or a commercial
banking institution selected by the Borrower and (in the case of a commercial
banking institution other than a Lender) reasonably satisfactory to the
Administrative Agent, in consideration for the payments set forth in such
Assignment Agreement and payment by the Borrower to such Lender of all other
amounts which such Lender may be owed pursuant to this Agreement, including,
without limitation, Sections 2.11, 2.14, 3.3, 8.3 and 10.13.

 

ARTICLE 9.          THE AGENTS.

 

Section 9.1.            Appointment and Authorization of
Administrative Agent and Other Agents. Each Lender hereby appoints JPMorgan
Chase Bank, N.A. as the Administrative Agent under the Credit Documents and
hereby authorizes the Administrative Agent to take such action as the
Administrative Agent on each of its behalf and to exercise such powers under
the Credit Documents as are delegated to the Administrative Agent by the terms
thereof, together with such powers as are reasonably incidental thereto. None
of the other Lenders appointed as one of the Other Agents shall have any
duties, responsibilities, or obligations hereunder in such capacity.

 

Section 9.2.            Rights and Powers. The
Administrative Agent and the Other Agents shall have the same rights and powers
under the Credit Documents as any other Lender and may exercise or refrain from
exercising such rights and power as though it were not the Administrative Agent
or an Other Agent, and the Administrative Agent and the Other Agents and their
respective affiliates may accept deposits from, lend money to, and generally engage
in any kind of business with the Borrower or any of its Subsidiaries or
affiliates as if it were not an Administrative Agent or an Other Agent under
the Credit Documents. The term Lender as used in all Credit Documents, unless
the context otherwise clearly requires, includes the Administrative Agent and
the Other Agents in their respective individual capacities as a Lender.

 

Section 9.3.            Action by Administrative Agent
and the Other Agents. The obligations of the Administrative Agent under the
Credit Documents are only those expressly set forth therein. Without limiting
the generality of the foregoing, the Administrative Agent shall not be required
to take any action concerning any Default or Event of Default, except as
expressly provided in Section 7.2. Unless and until the Required Lenders (or,
if required by Section 10.11, all of the Lenders) give such direction
(including, without limitation, the giving of a notice of default as described
in Section 7.1(c)), the Administrative Agent may, except as otherwise expressly
provided herein or therein, take or refrain from taking such actions as it
deems appropriate and in the best interest of all the Lenders. In no event,
however, shall the Administrative Agent be required to take any action in
violation of applicable law or of any provision of any Credit Document, and
each of the Administrative Agent shall in all cases be fully justified in
failing or refusing to act hereunder or under any other Credit Document unless
it first receives any further assurances of its indemnification from the
Lenders that it may require, including prepayment of any related expenses and
any other protection it requires against any and all costs, expenses, and
liabilities it may incur in taking or continuing to take any such action. The
Administrative Agent

 

56

 

shall be entitled to assume
that no Default or Event of Default, other than non-payment of any scheduled
principal or interest payment due hereunder, exists unless notified in writing
to the contrary by a Lender or the Borrower. In all cases in which the Credit
Documents do not require the Administrative Agent to take specific action, the
Administrative Agent shall be fully justified in using its discretion in
failing to take or in taking any action thereunder. Any instructions of the
Required Lenders, or of any other group of Lenders called for under specific
provisions of the Credit Documents, shall be binding on all the Lenders and
holders of Notes.

 

Section 9.4.            Consultation with Experts. The
Administrative Agent may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.

 

Section 9.5.            Indemnification Provisions;
Credit Decision. Neither the Administrative Agent nor any of its directors,
officers, agents, or employees shall be liable for any action taken or not
taken by them in connection with the Credit Documents (i) with the consent or
at the request of the Required Lenders (or, if required by Section 10.11, all
of the Lenders), or (ii) in the absence of their own gross negligence, bad
faith, or willful misconduct. Neither the Administrative Agent nor any of its
directors, officers, agents or employees shall be responsible for or have any
duty to ascertain, inquire into or verify (i) any statement, warranty or
representation made in connection with this Agreement, any other Credit Document
or any Borrowing; (ii) the performance or observance of any of the covenants or
agreements of the Borrower or any Subsidiary contained herein or in any other
Credit Document; (iii) the satisfaction of any condition specified in Article
4, except receipt of items required to be delivered to the Administrative
Agent; or (iv) the validity, effectiveness, genuineness, enforceability, value,
worth or collectability hereof or of any other Credit Document or of any other
documents or writings furnished in connection with any Credit Document; and the
Administrative Agent makes no representation of any kind or character with
respect to any such matters mentioned in this sentence. The Administrative
Agent may execute any of its duties under any of the Credit Documents by or
through employees, agents, and attorneys-in-fact and shall not be answerable to
the Lenders or any other Person for the default or misconduct of any such
agents or attorneys-in-fact selected with reasonable care. The Administrative
Agent shall not incur any liability by acting in reliance upon any notice,
consent, certificate, other document or statement (whether written or oral)
believed by it to be genuine or to be sent by the proper party or parties. In
particular and without limiting any of the foregoing, the Administrative Agent
shall have no responsibility for confirming the accuracy of any Compliance
Certificate or other document or instrument received by any of them under the
Credit Documents. The Administrative Agent and may treat the payee of any Note
as the holder thereof until written notice of transfer shall have been filed
with such Administrative Agent signed by such owner in form satisfactory to
such Administrative Agent. Each Lender acknowledges that it has independently,
and without reliance on the Administrative Agent or any other Lender, obtained
such information and made such investigations and inquiries regarding the
Borrower and its Subsidiaries as it deems appropriate, and based upon such
information, investigations and inquiries, made its own credit analysis and
decision to extend credit to the Borrower in the manner set forth in the Credit
Documents. It shall be the responsibility of each Lender to keep itself
informed about the creditworthiness and business, properties, assets,
liabilities, condition

 

57

 

(financial or otherwise) and
prospects of the Borrower and its Subsidiaries, and the Administrative Agent
shall have no liability whatsoever to any Lender for such matters. The Administrative
Agent shall have no duty to disclose to the Lenders information that is not
required by any Credit Document to be furnished by the Borrower or any
Subsidiaries to such Agent at such time, but is voluntarily furnished to such
Agent (either in its respective capacity as Administrative Agent or in its
individual capacity).

 

Section 9.6.            Indemnity. The Lenders shall
ratably, in accordance with their Percentages, indemnify and hold the
Administrative Agent and their directors, officers, employees, agents and
representatives harmless from and against any liabilities, losses, costs or
expenses suffered or incurred by it under any Credit Document or in connection
with the transactions contemplated thereby, regardless of when asserted or
arising, except to the extent they are promptly reimbursed for the same by the
Borrower and except to the extent that any event giving rise to a claim was
caused by the gross negligence or willful misconduct of the party seeking to be
indemnified. The obligations of the Lenders under this Section 9.6 shall
survive termination of this Agreement.

 

Section 9.7.            Resignation.          The Administrative Agent may resign at
any time and shall resign upon any removal thereof as a Lender pursuant to the
terms of this Agreement upon at least thirty (30) days’ prior written notice to
the Lenders and the Borrower. Any resignation of the Administrative Agent shall
not be effective until a replacement therefor is appointed pursuant to the
terms hereof. Upon any such resignation of the Administrative Agent, the
Required Lenders and, so long as no Event of Default shall then exist, with the
consent of the Borrower (which consent shall not be unreasonably withheld or
delayed) shall have the right to appoint a successor Administrative Agent. If no
successor Administrative Agent shall have been so appointed by the Required
Lenders and shall have accepted such appointment within thirty (30) days after
the retiring Administrative Agent’s giving of notice of resignation, then the
retiring Administrative Agent may, on behalf of the Lenders and, so long as no
Event of Default shall then exist, with the consent of the Borrower (which
consent shall not be unreasonably withheld or delayed) appoint a successor
Administrative Agent which shall be any Lender hereunder or any commercial bank
organized under the laws of the United States of America or of any State
thereof and having a combined capital and surplus of at least $1,000,000,000.
Upon the acceptance of its appointment as the Administrative Agent hereunder,
such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights and duties of the retiring Administrative Agent
under the Credit Documents, and the retiring Administrative Agent shall be
discharged from its duties and obligations thereunder. After any retiring
Administrative Agent’s resignation hereunder as Administrative Agent the
provisions of this Article 9 and all protective provisions of the other Credit
Documents shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent.

 

Section 9.8.            Sub-Agents. The
Administrative Agent may designate one or more Sub-Agents under this Agreement
to carry out certain duties of the Administrative Agent as described herein.
Each Sub-Agent shall be subject to each of the obligations in this Agreement to
be performed by such Sub-Agent, and each of the Borrower and the Lenders agrees
that each Sub-Agent shall be entitled to exercise each of the rights and shall
be entitled to each of the benefits

 

58

 

of the Administrative Agent
under this Agreement as relate to the performance of its obligations hereunder.

 

ARTICLE 10.       MISCELLANEOUS.

 

Section 10.1.          No Waiver. No delay or failure
on the part of the Administrative Agent or any Lender, or on the part of the
holder or holders of any Notes, in the exercise of any power, right or remedy
under any Credit Document shall operate as a waiver thereof or as an
acquiescence in any default, nor shall any single or partial exercise thereof
preclude any other or further exercise of any other power, right or remedy. To
the fullest extent permitted by applicable law, the powers, rights and remedies
under the Credit Documents of the Administrative Agent, the Lenders, and the
holder or holders of any Notes are cumulative to, and not exclusive of, any
powers, rights or remedies any of them would otherwise have.

 

Section 10.2.          Non-Business Day. Subject to
Section 2.4, if any payment of principal or interest on any portion of any Loan
or any other Obligation shall fall due on a day which is not a Business Day,
interest or fees (as applicable) at the rate, if any, such portion of any Loan
or other Obligation bears for the period prior to maturity shall continue to
accrue in the manner set forth herein on such Obligation from the stated due
date thereof to the next succeeding Business Day, on which the same shall
instead be payable.

 

Section 10.3.          Documentary Taxes. The Borrower
agrees that it will pay any documentary, stamp or similar taxes payable with
respect to any Credit Document, including interest and penalties, in the event
any such taxes are assessed irrespective of when such assessment is made, other
than any such taxes imposed as a result of any transfer of an interest in a
Credit Document. Each Lender that determines to seek compensation under this
Section 10.3 shall give written notice to the Borrower and, in the case of a
Lender other than the Administrative Agent, the Administrative Agent of the
circumstances that entitle such Lender to such compensation no later than
ninety (90) days after such Lender receives actual notice or obtains actual
knowledge of the law, rule, order or interpretation or occurrence of another
event giving rise to a claim hereunder. In any event, the Borrower shall not
have any obligation to pay any amount with respect to claims accruing prior to
the 90th day preceding such written demand.

 

Section 10.4.          Survival of Representations. All
representations and warranties made herein or in certificates given pursuant
hereto shall survive the execution and delivery of this Agreement and the other
Credit Documents, and shall continue in full force and effect with respect to
the date as of which they were made as long as the Borrower has any Obligation
hereunder or any Commitment hereunder is in effect.

 

Section 10.5.          Survival of Indemnities. All
indemnities and all provisions relative to reimbursement to the Lenders of
amounts sufficient to protect the yield of the Lenders with respect to the
Loans, including, but not limited to, Section 2.11, Section 2.14, Section 3.3,
Section 7.6, Section 8.3, Section 10.3, and Section 10.13 hereof, shall,
subject to Section 8.3(c), survive the termination of this Agreement and the
other Credit Documents and the payment of the Loans and all other Obligations
and, with respect to any Lender, any replacement by the Borrower of such Lender
pursuant to the terms hereof, in each case for a period of one (1) year.

 

59

 

Section 10.6.          Setoff. In addition to any
rights now or hereafter granted under applicable law and not by way of
limitation of any such rights, upon the occurrence of, and throughout the
continuance of, any Event of Default, each Lender and each subsequent holder of
any Note is hereby authorized by the Borrower at any time or from time to time,
without notice to the Borrower or any other Person, any such notice being
hereby expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, including, but not limited to, Indebtedness
evidenced by certificates of deposit, whether matured or unmatured, but not
including trust accounts, and in whatever currency denominated) and any other
Indebtedness at any time owing by that Lender or that subsequent holder to or
for the credit or the account of the Borrower, whether or not matured, against
and on account of the due and unpaid obligations and liabilities of the
Borrower to that Lender or that subsequent holder under the Credit Documents,
irrespective of whether or not that Lender or that subsequent holder shall have
made any demand hereunder. Each Lender shall promptly give notice to the
Borrower of any action taken by it under this Section 10.6, provided that any failure of such Lender
to give such notice to the Borrower shall not affect the validity of such
setoff. Each Lender agrees with each other Lender a party hereto that if such
Lender receives and retains any payment, whether by setoff or application of
deposit balances or otherwise, in respect of the Loans in excess of its ratable
share of payments on all such Obligations then owed to the Lenders hereunder,
then such Lender shall purchase for cash at face value, but without recourse,
ratably from each of the other Lenders such amount of the Loans and
participations therein held by each such other Lender as shall be necessary to
cause such Lender to share such excess payment ratably with all the other
Lenders; provided, however, that
if any such purchase is made by any Lender, and if such excess payment or part
thereof is thereafter recovered from such purchasing Lender, the related
purchases from the other Lenders shall be rescinded ratably and the purchase
price restored as to the portion of such excess payment so recovered, but
without interest.

 

Section 10.7.          Notices. Except as otherwise
specified herein, all notices under the Credit Documents shall be in writing
(including facsimile, or other electronic means) and shall be given to a party
hereunder at its address or facsimile number set forth below or such other
address or facsimile number as such party may hereafter specify by notice to
the Administrative Agent and the Borrower, given by courier, by United States
certified or registered mail, by telegram or by other telecommunication device
capable of creating a written record of such notice and its receipt. Notices
under the Credit Documents to the Lenders shall be addressed to their
respective domestic Lending Offices in the United States at the respective addresses
or facsimile numbers, or telephone numbers set forth on their applicable
Administrative Questionnaire or, in the case of Persons becoming Lenders
pursuant to Assignment Agreements, on their applicable Assignment Agreements,
and to the Borrower, and the Administrative Agent:

 

60

 

	
  To the Borrower:

  	
  Transocean Inc.

  
	
   

  	
  P. O. Box 10342

  
	
   

  	
  West Wind

  
	
   

  	
  70 Harbour Drive, 4th
  Floor

  
	
   

  	
  Block B

  
	
   

  	
  George Town, Grand Cayman
  KYI-1003

  
	
   

  	
  Cayman Islands, B.W.I.

  
	
   

  	
  Attention: Steve McFadin

  
	
   

  	
  Telephone No.: (345)
  745-4500

  
	
   

  	
  Fax No.: (345) 745-4504

  
	
   

  	
   

  
	
  With copies to:

  	
  Transocean Inc.

  
	
   

  	
  4 Greenway Plaza

  
	
   

  	
  Houston, Texas 77046

  
	
   

  	
  Attention: Anil Shah

  
	
   

  	
  Telephone No.: (281)
  216-1521

  
	
   

  	
  Fax No.: (713) 626-9556

  
	
   

  	
   

  
	
   

  	
  Baker Botts LLP

  
	
   

  	
  One Shell Plaza

  
	
   

  	
  Houston, Texas 77002-4995

  
	
   

  	
  Attention: Stephen Krebs

  
	
   

  	
  Telephone No. (713)
  229-1467

  
	
   

  	
  Fax No.: (713) 229-1522

  
	
   

  	
   

  
	
  To the Administrative
  Agent:

  	
  JPMorgan Chase Bank, N.A.

  
	
   

  	
  10 South Dearborn, 7th
  Floor

  
	
   

  	
  Chicago, Illinois 60603

  
	
   

  	
  Attention: Saul Gierstikas

  
	
   

  	
  Fax No.: (312) 385-7096

  
	
   

  	
   

  
	
  With a copy to:

  	
  King & Spalding LLP

  
	
   

  	
  1180 Peachtree Street,
  N.E.

  
	
   

  	
  Atlanta, Georgia 30309

  
	
   

  	
  Attention: A.H. Conrad,
  Jr.

  
	
   

  	
  Fax No.: (404) 572-5128

  

 

Each such notice, request or other
communication shall be effective (i) if given by facsimile, when such facsimile
is transmitted to the facsimile number specified in this Section 10.7 or
pursuant to Section 10.10 and a confirmation of receipt of such facsimile has
been received by the sender, (ii) if given by courier, when delivered, (iii) if
given by mail, five (5) days after such communication is deposited in the mail,
certified or registered with return receipt requested, or (iv) if given by any
other means, when delivered at the addresses specified in this Section 10.7, or
pursuant to Section 10.10; provided that
any notice given pursuant to Article 2 shall be effective only upon receipt
and, provided further, that any
notice that but for this proviso would

 

61

 

be
effective after the close of business on a Business Day or on a day that is not
a Business Day shall be effective at the opening of business on the next
Business Day.

 

Section 10.8.          Counterparts. This Agreement
may be executed in any number of counterparts, and by the different parties on
different counterpart signature pages, each of which when executed shall be
deemed an original, but all such counterparts taken together shall constitute
one and the same Agreement.

 

Section 10.9.          Successors and Assigns. This
Agreement shall be binding upon the Borrower, each of the Lenders, the
Administrative Agent and their respective successors and assigns, and shall
inure to the benefit of the Borrower, each of the Lenders, the Administrative
Agent, and their respective successors and assigns, including any subsequent
holder of any Note; provided, however,
the Borrower may not assign any of its rights or obligations under this
Agreement or any other Credit Document without the written consent of all
Lenders and the Administrative Agent, and the Administrative Agent may not
assign any of its respective rights or obligations under this Agreement or any
Credit Document except in accordance with Article 9 and no Lender may assign
any of its rights or obligations under this Agreement or any other Credit
Document except in accordance with Section 10.10. Nothing in this Agreement,
express or implied, shall be construed to confer on any Person (other than the
parties hereto, their respective successors and assigns permitted hereby, and
to the extent expressly contemplated hereby, Controlling Affiliates of the
Lenders, the Administrative Agent, the Collateral Agent, the Other Agents, and
the Indemnified Parties as defined in Section 10.13) any legal or equitable
right, remedy or claim under or by reason of this Agreement. Any Lender may at
any time pledge or assign all or any portion of its rights under this Agreement
and the Notes issued to it (i) to a Federal Reserve Bank to secure extensions
of credit by such Federal Reserve Bank to such Lender, or (ii) in the case of
any Lender that is a fund comprised in whole or in part of commercial loans, to
a trustee for such fund in support of such Lender’s obligations to such
trustee; provided that no such
pledge or assignment shall release any Lender from any of its obligations
hereunder or substitute any such Federal Reserve Bank or such trustee for such
Lender as a party hereto and the Borrower, the Administrative Agent and the
other Lenders shall continue to deal solely with such Lender in connection with
the rights and obligations of such Lender under this Agreement.

 

Section 10.10.        Sales and Transfers of Borrowing and
Notes; Participations in Borrowings and Notes.

 

(a)           Any Lender may, upon written notice to the Borrower and
the Administrative Agent, at any time sell to one or more commercial banking or
other financial or lending institutions (“Participants”)
participating interests in any Commitment of such Lender hereunder, provided that no Lender may sell any
participating interests (other than in the case of affiliates of such Lender)
in any such Commitment hereunder without also selling to such Participant the
appropriate pro rata share of all such Lender’s Commitment, and provided further that no Lender shall
transfer, grant or assign any participation under which the Participant shall
have rights to vote upon or to consent to any matter to be decided by the
Lenders or the Required Lenders hereunder or under any other Credit Document or
to approve any amendment to or waiver of this Agreement or any other Credit
Document except to the extent such amendment or

 

62

 

waiver would (i) increase
the amount of such Lender’s Commitment and such increase would affect such
Participant, (ii) reduce the principal of, or interest on, any of such Lender’s
Borrowings, or any fees or other amounts payable to such Lender hereunder and
such reduction would affect such Participant, (iii) postpone any date fixed for
any scheduled payment of principal of, or interest on, any of such Lender’s
Borrowings, or any fees or other amounts payable to such Lender hereunder and
such postponement would affect such Participant, or (iv) release any collateral
security for any Obligation, except as otherwise specifically provided in any
Credit Document. In the event of any such sale by a Lender of participating
interests to a Participant, such Lender’s obligations under this Agreement to
the other parties to this Agreement shall remain unchanged, such Lender shall
remain solely responsible for the performance thereof, such Lender shall remain
the holder of any such Note for all purposes under this Agreement, the Borrower
and the Administrative Agent shall continue to deal solely and directly with
such Lender in connection with such Lender’s rights and obligations under this
Agreement and such Lender shall retain the sole right to enforce the
obligations of the Borrower under any Credit Document. The Borrower agrees that
if amounts outstanding under this Agreement and the Notes shall have been
declared or shall have become due and payable in accordance with Section 7.2 or
7.3 upon the occurrence of an Event of Default, each Participant shall be
deemed to have the right of setoff in respect of its participating interest in
amounts owing under this Agreement and any Note to the same extent as if the
amount of its participating interest were owing directly to it as a Lender
under this Agreement or any Note, provided
that such right of setoff shall be subject to the obligation of such
Participant to share with the Lenders, and the Lenders agree to share with such
Participant, as provided in Section 10.6. The Borrower also agrees that each
Participant shall be entitled to the benefits of and have the obligations under
Sections 2.11, 2.14, 3.3 and 8.3 with respect to its participation in the
Commitments and the Borrowings outstanding from time to time, provided that no Participant shall be
entitled to receive any greater amount pursuant to such Sections than the
transferor Lender would have been entitled to receive in respect of the amount
of the participation transferred if no participation had been transferred and provided, further, that Sections 8.3(c)
and 8.6 shall apply to the transferor Lender with respect to any claim by any
Participant pursuant to Section 2.11, 2.14, 3.3 or 8.3 as fully as if such
claim was made by such Lender. Anything herein to the contrary notwithstanding,
the Borrower shall not, at any time, be obligated to pay to any Lender any sum
in excess of the sum the Borrower would have been obligated to pay to such
Lender hereunder if such Lender had not sold any participation in its rights
and obligations under this Agreement or any other Credit Document.

 

(b)           Any Lender may at any time sell to (i) any of such Lender’s
affiliates or to any other Lender or any affiliate thereof that, in each case,
is a commercial banking or other financial or lending institution not subject
to Regulation T of the Board of Governors of the Federal Reserve System and,
(ii) with the prior written consent (which shall not be unreasonably withheld
or delayed) of the Administrative Agent, and the Borrower, to one or more
commercial banking or other financial or lending institutions not subject to
Regulation T of the Board of Governors of the Federal Reserve System (any of
(i) or (ii), a “Purchasing Lender”),
all or any part of its rights and obligations under this Agreement and the
other Credit Documents, pursuant to an Assignment Agreement in the form
attached as Exhibit 10.10, executed by such Purchasing Lender and such
transferor Lender (and, in the case of a Purchasing Lender which is not then a
Lender or an affiliate thereof, by the Borrower and the Administrative Agent)
and delivered to

 

63

 

the Administrative Agent; provided that each such sale to a
Purchasing Lender (other than an existing Lender) shall be in the amount of
$5,000,000 or more, or if in a lesser amount or if as a result of such sale the
sum of the unfunded Commitment of such Lender plus
the aggregate principal amount of such Lender’s Loans would be less than the
amount of $5,000,000 (calculated as hereinafter set forth), such sale shall be
of all of such Lender’s rights and obligations under this Agreement and all of
the other Credit Documents payable to it to one Purchasing Lender.
Notwithstanding the requirement of the Borrower’s consent set forth above, but
subject to all of the other terms and conditions of this Section 10.10(b), any
Lender may sell to one or more commercial banking or other financial or lending
institutions not subject to Regulation T of the Board of Governors of the
Federal Reserve System, all or any part of their rights and obligations under
this Agreement and the other Credit Documents with only the consent of the
Administrative Agent (which shall not be unreasonably withheld or delayed) if
an Event of Default shall have occurred and be continuing. Upon such execution,
delivery and acceptance, from and after the effective date of the transfer
determined pursuant to such Assignment Agreement, (x) the Purchasing Lender
thereunder shall be a party hereto and, to the extent provided in such
Assignment Agreement, have the rights and obligations of a Lender hereunder
with a Commitment as set forth herein and (y) the transferor Lender thereunder
shall, to the extent provided in such Assignment Agreement, be released from
its obligations under this Agreement (and, in the case of an Assignment
Agreement covering all or the remaining portion of a transferor Lender’s rights
and obligations under this Agreement, such transferor Lender shall cease to be
a party hereto). Such Assignment Agreement shall be deemed to amend this
Agreement to the extent, and only to the extent, necessary to reflect the
addition of such Purchasing Lender and the resulting adjustment of Commitments
and Percentages arising from the purchase by such Purchasing Lender of all or a
portion of the rights and obligations of such transferor Lender under this
Agreement, the Notes and the other Credit Documents. On or prior to the
effective date of the transfer determined pursuant to such Assignment
Agreement, the Borrower, at its own expense, shall upon reasonable notice from
the Administrative Agent execute and deliver to the Administrative Agent in
exchange for any surrendered Note, a new Note as appropriate to the order of
such Purchasing Lender in an amount equal to the Commitments assumed by it
pursuant to such Assignment Agreement, and, if the transferor Lender has
retained a Commitment or Borrowing hereunder, a new Note to the order of the
transferor Lender in an amount equal to the Commitments or Borrowings retained
by it hereunder. Such new Notes shall be dated the Effective Date and shall
otherwise be in the form of the Notes replaced thereby. The Notes surrendered
by the transferor Lender shall be returned by the Administrative Agent to the
Borrower marked “cancelled.”

 

(c)           Upon its receipt of an Assignment Agreement executed by a
transferor Lender and a Purchasing Lender (and, in the case of a Purchasing
Lender that is not then a Lender or an affiliate thereof, by the Administrative
Agent and, to the extent required by Section 10.10(b), by the Borrower),
together with payment by the transferor Lender to the Administrative Agent
hereunder of a registration and processing fee of $1,000 (unless the Borrower
is replacing such Lender pursuant to the terms hereof, in which event such fee
shall be paid by the Borrower), the Administrative Agent shall (i) promptly
accept such Assignment Agreement, and (ii) on the effective date of the
transfer determined pursuant thereto give notice of such acceptance and
recordation to the Lenders and the Borrower. The Borrower shall not be
responsible for such registration and processing fee or any costs or expenses
incurred by any Lender, any Purchasing

 

64

 

Lender or the Administrative
Agent in connection with such assignment except as provided above.

 

(d)           If, pursuant to this Section 10.10 any interest in this
Agreement or any Loan or Note is transferred to any transferee which is
organized under the laws of any jurisdiction other than the United States of
America or any State thereof, the transferor Lender shall cause such
transferee, concurrently with the effectiveness of such transfer, (i) to
represent to the transferor Lender (for the benefit of the transferor Lender,
the Administrative Agent and the Borrower) that under applicable law and
treaties no taxes will be required to be withheld by the Administrative Agent,
the Borrower or the transferor Lender with respect to any payments to be made
to such transferee in respect of the Loans, (ii) to furnish to the transferor
Lender (and, in the case of any Purchasing Lender, the Administrative Agent and
the Borrower) two duly completed and signed copies of either U.S. Internal
Revenue Service Form W-8BEN or U.S. Internal Revenue Service Form W-8ECI or
such successor forms as shall be adopted from time to time by the relevant
United States taxing authorities (wherein such transferee claims entitlement to
complete exemption from U.S. federal withholding tax on all interest payments
hereunder), and (iii) to agree (for the benefit of the transferor Lender, the
Administrative Agent and the Borrower) to provide the transferor Lender (and,
in the case of any Purchasing Lender, the Administrative Agent and the Borrower)
new forms as contemplated by Section 3.3(b) upon the expiration or obsolescence
of any previously delivered form and comparable statements in accordance with
applicable U.S. laws and regulations and amendments duly executed and completed
by such transferee, and to comply from time to time with all applicable U.S.
laws and regulations with regard to such withholding tax exemption.

 

(e)           Notwithstanding any other provisions of this Section
10.10, no transfer or assignment of the interests of any Lender hereunder or
any grant of participations therein shall be permitted if such transfer,
assignment or grant would require the Borrower to file a registration statement
with the SEC or to qualify the Loans, the Notes or any other Obligations under
the securities laws of any jurisdiction.

 

Section 10.11.        Amendments, Waivers and Consents.
Any provision of the Credit Documents may be amended or waived if, but only if,
such amendment or waiver is in writing and is signed by (a) the Borrower, (b)
the Required Lenders, and (c) if the rights or duties of the Administrative
Agent or the Other Agents are affected thereby, the Administrative Agent or the
Other Agents, as the case may be, provided
that:

 

(i)            no amendment or waiver shall (A)
(other than in accordance with Section 2.13) increase the Revolving Credit
Commitment Amount without the consent of all Lenders or increase any Commitment
of any Lender without the consent of such Lender, or (B) (other than in
accordance with Section 2.15) postpone or extend the Commitment Termination
Date or Final Maturity Date without the consent of all Lenders, or reduce the
amount of or postpone the date for any scheduled payment of any principal of or
interest (including, without limitation, any reduction in the rate of interest
unless such reduction is otherwise provided herein) on any Loan or of any fee
payable hereunder, without the consent of each Lender owed any such Obligation,
without the consent of all Lenders; and

 

65

 

(ii)           no amendment or waiver shall, unless
signed by each Lender, change the provisions of this Section 10.11, Section
3.2(a) or the definition of Required Lenders or the number of Lenders required
to take any action under any other provision of the Credit Documents or any
provision providing for the pro rata nature of payments by or to Lenders.

 

Section 10.12.        Headings. Section headings used
in this Agreement are for reference only and shall not affect the construction
of this Agreement.

 

Section 10.13.        Legal Fees, Other Costs and
Indemnification. The Borrower, upon demand by the Administrative Agent,
agrees to pay the reasonable fees and disbursements of legal counsel to the
Administrative Agent in connection with the preparation and execution of the
Credit Documents (which shall be in an amount agreed in writing by the
Borrower), and any amendment, waiver or consent related thereto, whether or not
the transactions contemplated therein are consummated. The Borrower further
agrees to indemnify each Lender, the Administrative Agent, the Other Agents,
and their respective directors, officers, employees and attorneys
(collectively, the “Indemnified Parties”), against all losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without limitation,
all reasonable attorneys’ fees and other reasonable out-of-pocket expenses of
litigation or preparation therefor, whether or not such Indemnified Party is a
party thereto) which any of them may pay or incur as a result of (a) any
action, suit or proceeding by any third party or Governmental Authority against
such Indemnified Party and relating to any Credit Document, the Loans, or the
application or proposed application by any of the Borrower of the proceeds of
any Loan, REGARDLESS OF WHETHER SUCH CLAIMS
OR ACTIONS ARE FOUNDED IN WHOLE OR IN PART UPON THE ALLEGED SIMPLE OR
CONTRIBUTORY NEGLIGENCE OF ANY OF THE INDEMNIFIED PARTIES AND/OR ANY OF THEIR
RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES OR ATTORNEYS, (b) any
investigation of any third party or any Governmental Authority involving any
Lender (as a lender hereunder), or the Administrative Agent or the Other Agents
(in such capacity hereunder) and related to any use made or proposed to be made
by the Borrower of the proceeds of any Loan, or any transaction financed or to
be financed in whole or in part, directly or indirectly with the proceeds of
any Loan, and (c) any investigation of any third party or any Governmental
Authority, litigation or proceeding involving any Lender (as a lender
hereunder) or the Administrative Agent or the Other Agents (in such capacity
hereunder) and related to any environmental cleanup, audit, compliance or other
matter relating to any Environmental Law or the presence of any Hazardous
Material (including, without limitation, any losses, liabilities, damages,
injuries, costs, expenses or claims asserted or arising under any Environmental
Law) with respect to the Borrower, regardless of whether caused by, or within
the control of, the Borrower; provided,
however, that the Borrower shall not be obligated to indemnify any
Indemnified Party for any of the foregoing arising out of such Indemnified
Party’s gross negligence, bad faith, or willful misconduct, as determined
pursuant to a judgment of a court of competent jurisdiction or as expressly
agreed in writing by such Indemnified Party. The Borrower, upon demand by the
Administrative Agent, the Other Agents or any Lender at any time, shall
reimburse such Agent or such Lender for any reasonable legal or other expenses
incurred in connection with investigating or defending against any of the
foregoing, except if the same is excluded from indemnification pursuant to the
provisions of the

 

66

 

preceding sentence. Each
Indemnified Party agrees to contest any indemnified claim if requested by the
Borrower, in a manner reasonably directed by the Borrower, with counsel
selected by the Indemnified Party and approved by the Borrower, which approval
shall not be unreasonably withheld or delayed. Any Indemnified Party that
proposes or intends to settle or compromise any such indemnified claim shall
give the Borrower written notice of the terms of such settlement or compromise
reasonably in advance of settling or compromising such claim or proceeding and
shall obtain the Borrower’s prior written consent thereto, which consent shall
not be unreasonably withheld or delayed; provided
that the Indemnified Party shall not be restricted from settling or
compromising any such claim if the Indemnified Party waives its right to
indemnity from the Borrower in respect of such claim and such settlement or
compromise does not materially increase the Borrower’s liability pursuant to
this Section 10.13 to any related party of such Indemnified Party.

 

Section 10.14.        Governing Law; Submission to
Jurisdiction; Waiver of Jury Trial.

 

(A)          THIS AGREEMENT AND THE OTHER CREDIT
DOCUMENTS, AND THE RIGHTS AND DUTIES OF THE PARTIES THERETO, SHALL BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES THEREOF.

 

(B)  TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES HERETO AGREE THAT ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE
AGENT, THE OTHER AGENTS, THE LENDERS OR THE BORROWER MAY BE BROUGHT AND
MAINTAINED IN THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF
MANHATTAN OR THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE BORROWER HEREBY
EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH SUCH LITIGATION. THE BORROWER HEREBY IRREVOCABLY DESIGNATES CT CORPORATION
SYSTEM, 111 8TH AVENUE, NEW YORK, NEW YORK 10011, AS THE DESIGNEE, APPOINTEE
AND AGENT OF THE BORROWER TO RECEIVE, FOR AND ON BEHALF OF THE BORROWER,
SERVICE OF PROCESS IN SUCH JURISDICTION IN ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT HERETO. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE BORROWER
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS, BY REGISTERED MAIL,
POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW
YORK. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,

 

67

 

THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY
SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT
ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT
THAT THE BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION
OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OF NOTICE,
ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH
RESPECT TO ITSELF OR ITS PROPERTY, THE BORROWER HEREBY IRREVOCABLY WAIVES TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS.

 

(C)          TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO WAIVES ANY RIGHT
TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS
UNDER THIS AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THIS
AGREEMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE
A COURT AND NOT BEFORE A JURY.

 

(D)          EACH PARTY
TO THIS AGREEMENT IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER
PROVIDED FOR NOTICES IN SECTION 10.7. NOTHING IN THIS AGREEMENT WILL AFFECT THE
RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY APPLICABLE LAW.

 

Section 10.15.        Confidentiality. Each of the
Administrative Agent, the Other Agents and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (i) to their respective affiliates and to prospective
Purchasing Lenders and Participants and potential counterparties to hedge
agreements and their respective directors, officers, employees and agents,
including accountants, legal counsel and other advisors who have reason to use
such Information in connection with the evaluation of the transactions
contemplated by this Agreement (subject to similar confidentiality provisions
as provided herein) solely for purposes of evaluating such Information, (ii) to
the extent requested by any regulatory authority, (iii) to the extent required
by applicable law or regulation or by any subpoena or similar legal process,
(iv) in connection with the exercise of any remedies hereunder or any
proceedings relating to this Agreement or the other Credit Documents, (v) with
the consent of the Borrower, (vi) to any rating agency when required by it, provided that, prior to any disclosure,
such rating agency shall undertake in writing to preserve the confidentiality
of any confidential information relating to the Borrower received by it from
any Lender, Issuing Bank, the Administrative Agent or any Other Agents, or
(vii) to the extent such Information (x) becomes publicly available other
than as a result of a breach of this Section 10.15, or (y) becomes

 

68

 

available on a
non-confidential basis from a source other than the Borrower or its affiliates,
or the Lenders or their respective affiliates, excluding any Information from
such source which, to the actual knowledge of the Administrative Agent, the
Other Agent, or the Lender receiving such Information, has been disclosed by
such source in violation of a duty of confidentiality to the Borrower. For
purposes hereof, “Information”
means all information received by the Lenders from the Borrower relating to the
Borrower or its business, other than any such information that is available to
the Lenders on a non-confidential basis prior to disclosure by the Borrower,
excluding any Information from a source which, to the actual knowledge of the
Administrative Agent, the Other Agent or the Lender receiving such Information,
has been disclosed by such source in violation of a duty of confidentiality to
the Borrower. The Lenders shall be considered to have complied with their
respective obligations if they have exercised the same degree of care to
maintain the confidentiality of such Information as they would accord their own
confidential information. Notwithstanding anything herein to the contrary, any
party to this Agreement (and any employee, representative, or other agent of
any party to this Agreement) may disclose to any and all persons, without
limitation of any kind, the tax treatment and tax structure of the transactions
contemplated by this Agreement and all materials of any kind (including
opinions or other tax analyses) that are provided to it relating to such tax
treatment and tax structure. However,
any such information relating to the tax treatment or tax structure is required
to be kept confidential to the extent necessary to comply with any applicable
federal or state securities laws.

 

Section 10.16.        [Intentionally
Omitted]

 

Section 10.17.        Severability. Any provision of
this Agreement that is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.

 

Section 10.18.        Change in Accounting Principles,
Fiscal Year or Tax Laws. If (i) any change in accounting principles from
those used in the preparation of the financial statements of the Borrower
referred to in Section 5.8 is hereafter occasioned by the promulgation of
rules, regulations, pronouncements and opinions by or required by the Financial
Accounting Standards Board or the American Institute of Certified Public
Accounts (or successors thereto or agencies with similar functions), and such
change materially affects the calculation of any component of any financial
covenant, standard or term found in this Agreement, or (ii) there is a material
change in federal, state or foreign tax laws which materially affects any of
the Borrower and its Subsidiaries’ ability to comply with the financial
covenants, standards or terms found in this Agreement, the Borrower and the
Lenders agree to enter into negotiations in order to amend such provisions
(with the agreement of the Required Lenders or, if required by Section 10.11,
all of the Lenders) so as to equitably reflect such changes with the desired
result that the criteria for evaluating any of the Borrower’s and its
Subsidiaries’ financial condition shall be the same after such changes as if
such changes had not been made. Unless and until such provisions have been so
amended, the provisions of this Agreement shall govern.

 

69

 

Section 10.19.        Final Agreement. The Credit
Documents constitute the entire understanding among the Credit Parties, the
Lenders and the Administrative Agent and supersede all earlier or
contemporaneous agreements, whether written or oral, concerning the subject
matter of the Credit Documents. THIS WRITTEN
AGREEMENT TOGETHER WITH THE OTHER CREDIT DOCUMENTS REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

Section 10.20.        Officer’s Certificates. It is not
intended that any certificate of any officer or director of the Borrower
delivered to the Administrative Agent or any Lender pursuant to this Agreement
shall give rise to any personal liability on the part of such officer or
director.

 

Section 10.21.        Effect of Inclusion of Exceptions.
It is not intended that the specification of any exception to any covenant
herein shall imply that the excepted matter would, but for such exception, be
prohibited or required.

 

Section 10.22.        Patriot Act Notice. Each Lender
and the Administrative Agent (for itself and not on behalf of any Lender)
hereby notifies the Borrower that pursuant to the requirements of the Patriot
Act, it is required to obtain, verify and record information that identifies
the Borrower, which information includes the name and address of the Borrower
and other information that will allow such Lender or the Administrative Agent,
as applicable, to identify the Borrower in accordance with the Patriot Act. The
Borrower shall provide, to the extent commercially reasonable, such information
and take such actions as are reasonably requested by the Administrative Agent
or any Lenders in order to assist the Administrative Agent and the Lenders in
maintaining compliance with the Patriot Act.

 

70

 

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

 

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  TRANSOCEAN INC.,

  
	
   

  	
  As Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steve McFadin

  	
   

  
	
   

  	
  Name: Steve McFadin

  
	
   

  	
  Title: Assistant Treasurer

  

 

 

[SIGNATURE PAGE TO 364-DAY
REVOLVING CREDIT AGREEMENT]

 

 

	
   

  	
  JPMORGAN CHASE BANK, N.A.,

  
	
   

  	
  As Administrative Agent and as a

  
	
   

  	
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Helen A. Carr

  	
   

  
	
   

  	
  Name: Helen A. Carr

  
	
   

  	
  Title: Managing Director

  

 

 

	
  COMMITMENT AMOUNT:

  	
   

  	
  $

  	
  127,500,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PERCENTAGE:

  	
   

  	
  8.500000

  	
  %

  

 

 

[SIGNATURE PAGE TO 364-DAY
REVOLVING CREDIT AGREEMENT]

 

 

	
   

  	
  CITIBANK, N.A.,

  
	
   

  	
  As Syndication Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert H. Malleck

  	
   

  
	
   

  	
  Name: Robert H. Malleck

  
	
   

  	
  Title: V.P.

  

 

 

	
  COMMITMENT AMOUNT:

  	
   

  	
  $

  	
  127,500,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PERCENTAGE:

  	
   

  	
  8.500000

  	
  %

  

 

 

[SIGNATURE PAGE TO 364-DAY
REVOLVING CREDIT AGREEMENT]

 

 

	
   

  	
  CALYON NEW YORK BRANCH,

  
	
   

  	
  As Co-Syndication Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dennis E. Petito

  	
   

  
	
   

  	
  Name: Dennis E. Petito

  
	
   

  	
  Title: Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael D. Willis

  	
   

  
	
   

  	
  Name: Michael D. Willis

  
	
   

  	
  Title: Director

  

 

 

 

	
  COMMITMENT AMOUNT:

  	
   

  	
  $

  	
  118,928,571.43

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PERCENTAGE:

  	
   

  	
  7.928571

  	
  %

  

 

 

[SIGNATURE PAGE TO 364-DAY
REVOLVING CREDIT AGREEMENT]

 

 

	
   

  	
  THE BANK OF TOKYO-MITSUBISHI,

  
	
   

  	
  UFJ, LTD.,

  
	
   

  	
  As Co-Documentation Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ K. Glasscock

  	
   

  
	
   

  	
  Name: K. Glasscock

  
	
   

  	
  Title: VP & Manager

  

 

 

	
  COMMITMENT AMOUNT:

  	
   

  	
  $

  	
  118,928,571.43

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PERCENTAGE:

  	
   

  	
  7.928571

  	
  %

  

 

 

[SIGNATURE PAGE TO 364-DAY
REVOLVING CREDIT AGREEMENT]

 

 

	
   

  	
  CREDIT SUISSE, CAYMAN ISLANDS

  BRANCH,

  
	
   

  	
  As Co-Documentation Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Vanessa Gomez

  	
   

  
	
   

  	
  Name: Vanessa Gomez

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Morenikeji Ajayi

  	
   

  
	
   

  	
  Name: Morenikeji Ajayi

  
	
   

  	
  Title: Associate

  

 

 

	
  COMMITMENT AMOUNT:

  	
   

  	
  $

  	
  118,928,571.43

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PERCENTAGE:

  	
   

  	
  7.928571

  	
  %

  

 

 

[SIGNATURE PAGE TO 364-DAY
REVOLVING CREDIT AGREEMENT]

 

 

	
   

  	
  WELLS FARGO BANK,

  N.A.,

  
	
   

  	
  As a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William S. Rogers

  	
   

  
	
   

  	
  Name: William S. Rogers

  
	
   

  	
  Title: Vice President

  

 

 

	
  COMMITMENT AMOUNT:

  	
   

  	
  $

  	
  118,928,571.43

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PERCENTAGE:

  	
   

  	
  7.928571

  	
  %

  

 

 

[SIGNATURE PAGE TO 364-DAY
REVOLVING CREDIT AGREEMENT]

 

 

	
   

  	
  THE ROYAL BANK OF SCOTLAND PLC,

  
	
   

  	
  As a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Slye

  	
   

  
	
   

  	
  Name: David Slye

  
	
   

  	
  Title: Vice President

  

 

 

	
  COMMITMENT AMOUNT:

  	
   

  	
  $

  	
  77,142,857.14

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PERCENTAGE:

  	
   

  	
  5.142857

  	
  %

  

 

 

[SIGNATURE PAGE TO 364-DAY
REVOLVING CREDIT AGREEMENT]

 

 

	
   

  	
  BANK OF AMERICA, N.A.,

  
	
   

  	
  As a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gabe Gomez

  	
   

  
	
   

  	
  Name: Gabe Gomez

  
	
   

  	
  Title: Vice President

  

 

 

	
  COMMITMENT AMOUNT:

  	
   

  	
  $

  	
  77,142,857.14

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PERCENTAGE:

  	
   

  	
  5.142857

  	
  %

  

 

 

[SIGNATURE PAGE TO 364-DAY
REVOLVING CREDIT AGREEMENT]

 

 

	
   

  	
  UBS LOAN FINANCE LLC,

  
	
   

  	
  As a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mary E. Evans

  	
   

  
	
   

  	
  Name: Mary E. Evans

  
	
   

  	
  Title:

  	
  Associate Director

  
	
   

  	
   

  	
  Banking Products Services, US

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David B. Julie

  	
   

  
	
   

  	
  Name: David B. Julie

  
	
   

  	
  Title:

  	
  Associate Director

  
	
   

  	
   

  	
  Banking Products Services, US

  
					

 

 

	
  COMMITMENT AMOUNT:

  	
   

  	
  $

  	
  77,142,857.14

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PERCENTAGE:

  	
   

  	
  5.142857

  	
  %

  

 

 

[SIGNATURE PAGE TO 364-DAY REVOLVING
CREDIT AGREEMENT]

 

 

	
   

  	
  THE BANK OF NEW YORK,

  
	
   

  	
  As a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Hussam S. Alsahlani

  	
   

  
	
   

  	
  Name: Hussam S. Alsahlani

  
	
   

  	
  Title: Vice President

  

 

 

	
  COMMITMENT AMOUNT:

  	
   

  	
  $

  	
  21,428,571.43

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PERCENTAGE:

  	
   

  	
  1.428571

  	
  %

  

 

 

[SIGNATURE PAGE TO 364-DAY REVOLVING
CREDIT AGREEMENT]

 

 

	
   

  	
  DnB NOR BANK ASA,

  
	
   

  	
  As a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Barbara Gronquist

  	
   

  
	
   

  	
  Name: Barbara Gronquist

  
	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Nikolala Nachamkin

  	
   

  
	
   

  	
  Name: Nikolala Nachamkin

  
	
   

  	
  Title: Senior Vice President

  

 

 

	
  COMMITMENT AMOUNT:

  	
   

  	
  $

  	
  77,142,857.14

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PERCENTAGE:

  	
   

  	
  5.142857

  	
  %

  

 

 

[SIGNATURE PAGE TO 364-DAY
REVOLVING CREDIT AGREEMENT]

 

 

	
   

  	
  HSBC BANK USA, NATIONAL

  
	
   

  	
  ASSOCIATION,

  
	
   

  	
  As a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jennifer Diedzic

  	
   

  
	
   

  	
  Name: Jennifer Diedzic

  
	
   

  	
  Title: Assistant Vice President

  

 

 

	
  COMMITMENT AMOUNT:

  	
   

  	
  $

  	
  77,142,857.14

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PERCENTAGE:

  	
   

  	
  5.142857

  	
  %

  

 

 

[SIGNATURE PAGE TO 364-DAY
REVOLVING CREDIT AGREEMENT]

 

 

	
   

  	
  THE BANK OF NOVA SCOTIA,

  
	
   

  	
  As a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ A. Ostrov

  	
   

  
	
   

  	
  Name: A. Ostrov

  
	
   

  	
  Title: Director

  

 

 

	
  COMMITMENT AMOUNT:

  	
   

  	
  $

  	
  53,571,428.57

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PERCENTAGE:

  	
   

  	
  3.571429

  	
  %

  

 

 

[SIGNATURE PAGE TO 364-DAY
REVOLVING CREDIT AGREEMENT]

 

 

	
   

  	
  WILLIAM
  STREET CREDIT

  
	
   

  	
  CORPORATION,

  
	
   

  	
  As a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark Walton

  	
   

  
	
   

  	
  Name: Mark Walton

  
	
   

  	
  Title: Vice President

  

 

 

	
  COMMITMENT AMOUNT:

  	
   

  	
  $

  	
  53,571,428.57

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PERCENTAGE:

  	
   

  	
  3.571429

  	
  %

  

 

 

[SIGNATURE PAGE TO 364-DAY
REVOLVING CREDIT AGREEMENT]

 

 

	
   

  	
  MORGAN STANLEY BANK,

  
	
   

  	
  As a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel Twenge

  	
   

  
	
   

  	
  Name: Daniel Twenge

  
	
   

  	
  Title: Authorized Signatory

  

 

 

	
  COMMITMENT AMOUNT:

  	
   

  	
  $

  	
  53,571,428.57

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PERCENTAGE:

  	
   

  	
  3.571429

  	
  %

  

 

 

[SIGNATURE PAGE TO 364-DAY
REVOLVING CREDIT AGREEMENT]

 

 

	
   

  	
  LEHMAN COMMERCIAL PAPER INC.,

  
	
   

  	
  As a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Adrian De Lagarde

  	
   

  
	
   

  	
  Name: Adrian De Lagarde

  
	
   

  	
  Title: Authorized Signatory

  

 

 

	
  COMMITMENT AMOUNT:

  	
   

  	
  $

  	
  53,571,428.57

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PERCENTAGE:

  	
   

  	
  3.571429%

  	
   

  

 

 

[SIGNATURE PAGE TO 364-DAY
REVOLVING CREDIT AGREEMENT]

 

 

	
   

  	
  FORTIS CAPITAL CORP.,

  
	
   

  	
  As a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joseph Maxwell

  	
   

  
	
   

  	
  Name: Joseph Maxwell 

  
	
   

  	
  Title: Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alison Barber

  	
   

  
	
   

  	
  Name: Alison Barber

  
	
   

  	
  Title: Vice President

  

 

 

 

	
  COMMITMENT AMOUNT:

  	
   

  	
  $

  	
  77,142,857.14

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PERCENTAGE:

  	
   

  	
  5.142857

  	
  %

  

 

 

[SIGNATURE PAGE TO 364-DAY
REVOLVING CREDIT AGREEMENT]

 

 

	
   

  	
  STANDARD CHARTERED BANK,

  
	
   

  	
  As a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Felipe Macia

  	
   

  
	
   

  	
  Name: Felipe Macia     A 2739

  
	
   

  	
  Title:

  	
  Director Syndications,

  
	
   

  	
   

  	
  Americas

  
					

 

 

	
  COMMITMENT AMOUNT:

  	
   

  	
  $

  	
  21,428,571.43

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PERCENTAGE:

  	
   

  	
  1.428571

  	
  %

  

 

 

[SIGNATURE PAGE TO 364-DAY
REVOLVING CREDIT AGREEMENT]

 

 

	
   

  	
  US BANK, N.A.,

  
	
   

  	
  As a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin S. McFadden

  	
   

  
	
   

  	
  Name: Kevin S. McFadden

  
	
   

  	
  Title: Vice President

  

 

 

	
  COMMITMENT AMOUNT:

  	
   

  	
  $

  	
  17,142,857.14

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PERCENTAGE:

  	
   

  	
  1.142857

  	
  %

  

 

 

[SIGNATURE PAGE TO 364-DAY
REVOLVING CREDIT AGREEMENT]

 

 

	
   

  	
  FIFTH THIRD BANK,

  
	
   

  	
  As a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mike Mendenhall

  	
   

  
	
   

  	
  Name: Mike Mendenhall

  
	
   

  	
  Title: VP

  

 

 

	
  COMMITMENT AMOUNT:

  	
   

  	
  $

  	
  32,142,857.14

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PERCENTAGE:

  	
   

  	
  2.142857

  	
  %

  

 

 

[SIGNATURE PAGE TO 364-DAY
REVOLVING CREDIT AGREEMENT]EXHIBIT 10.1

 

THIRD
AMENDMENT TO THE 2007 AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

 

This Third Amendment
to the 2007 Employment Agreement (the “Agreement”), is made as of December 4,
2007, effective as of March 1, 2007 by and between LTC PROPERTIES, INC., a corporation organized under the laws
of the State of Maryland (“LTC” or the “Company”), and WENDY SIMPSON (“Executive”) and amends and restates the 2007 Amended and Restated
Employment Agreement between LTC and Executive, dated as of February 6, 2007 (“Prior
Employment Agreement”).

 

NOW, THEREFORE, for
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:

 

1.                                       Effective Date,
Appointment, Title and Duties.   The
effective date of this Agreement is March 1, 2007 (“Effective Date”). As of the
Effective Date, LTC employs Executive to serve as its Chief Executive Officer. In
such capacity, Executive shall report to the Board of Directors of the Company,
and shall have such duties, powers and responsibilities as are customarily
assigned to a Chief Executive Officer of a publicly held corporation, but shall
also be responsible to the Board of Directors and to any committee thereof. In
addition, Executive shall have such other duties and responsibilities as the
Board of Directors may reasonably assign her, with her consent, including
serving with the consent or at the request of the Board of Directors as an
officer or on the board of directors of affiliated corporations, provided that such duties are commensurate with and
customary for a senior executive officer bearing Executive’s experience,
qualifications, title and position.

 

2.                                       Term of
Agreement.   The term of this Agreement shall
commence as of the Effective Date and shall extend such that at each and every
moment of time hereafter the remaining term shall be three years.

 

3.                                       Acceptance of
Position.   Executive accepts the position of
Chief Executive Officer, and agrees that during the term of this Agreement she
will faithfully perform her duties and, except as expressly approved by the
Board of Directors of LTC, will devote substantially all of her business time
to the business and affairs of LTC, and will not engage, for her own account or
for the account of any other person or entity, in a business which competes
with LTC. It is acknowledged and agreed that Executive may serve as an officer
and/or director of companies in which LTC owns voting or non-voting stock. In
addition, it is acknowledged and agreed that Executive may, from time to time,
serve as a member of the board of directors of other companies, in which event
the Board of Directors of LTC must expressly approve such service pursuant to a
Board resolution maintained in the Company’s minute books. Any compensation or
remuneration which Executive receives in consideration of her service on the
board of directors of other companies shall be the sole and exclusive property
of Executive, and LTC shall have no right or entitlement at any time to any
such compensation or remuneration.

 

4.                                       Salary and
Benefits.  During the term of this Agreement:

 

(a)                                  LTC shall pay
to Executive a base salary at an annual rate of not less than 

 

 

Four Hundred Thousand Dollars ($400,000) per annum (“Base Salary”),
paid in approximately equal installments at intervals based on any reasonable
Company policy. LTC agrees from time to time to consider increases in such base
salary in the discretion of the Board of Directors. Any increase, once granted,
shall automatically amend this Agreement to provide that thereafter Executive’s
base salary shall not be less than the annual amount to which such base salary
has been increased.

 

(b)                                 During the term
hereof, Executive shall participate in all health, retirement, Company-paid
insurance, sick leave, disability, expense reimbursement and other benefit
programs which LTC makes available to any of its senior executives.

 

(c)                                  Health
Insurance Benefits. LTC shall provide to  Executive and her spouse  LTC health insurance benefits, of a type and
nature no less favorable to Executive than the health insurance benefits made
available by LTC to Executive and to LTC’s other senior executives at the time
of execution of this Agreement, for so long as Executive is employed hereunder.
The benefits described in the preceding sentence shall be referred to herein as
Executive’s “Health Insurance Benefits” and upon a Change in Control of the
Company, a termination of Executive’s employment by LTC without “cause” or a
resignation by Executive with “good reason”, these Health Insurance Benefits
will continue for Executive’s lifetime.

 

(i)                                     In the event
LTC ceases to offer health insurance coverage to its senior executives or LTC
elects in its sole discretion to discontinue providing Executive with Executive’s
Health Insurance Benefits, LTC shall have the option (a) at the Company’s
expense, to purchase health insurance coverage no less favorable to Executive
than Executive’s Health Insurance Benefits, or (b) terminate all further Health
Insurance Benefits to Executive and in lieu thereof make a one time payment of
Two Hundred Fifty Thousand Dollars ($250,000) to Executive (a “Health Insurance
Buyout”).

 

(ii)                                  In order to
effect a Health Insurance Buyout, LTC shall give no less than sixty (60) days’
prior written notice to Executive that LTC has elected to terminate Executive’s
Health Insurance Benefits. Such notice shall not be effective nor shall it
relieve LTC of its obligations under this Section 4(c) unless it is accompanied
by payment in full of the aforesaid Two Hundred Fifty Thousand Dollars
($250,000).

 

(iii)                               Executive’s
rights to the benefits set forth in this Section 4(c) and the subsections of
this Section 4(c) shall survive any termination or expiration of this Agreement
and the termination of Executive’s employment upon a Change in Control of the
Company, a termination of Executive’s employment by LTC without “cause” or a
resignation by Executive with “good reason”.

 

(d)                                 The Company has
set an annual target bonus for Executive equal to one hundred percent (100%) of
her Base Salary; provided, however, that the award
of any such bonus is subject to the sole discretion of the Board of Directors. Executive
also shall be eligible to participate in any LTC incentive stock, option or
bonus plan offered by LTC to its senior executives, subject to the terms
thereof and at the sole discretion of the Board of Directors.

 

2

 

(e)                                  At the date
hereof:

 

(i)                                         Executive has
previously been awarded twenty-seven thousand one hundred twenty (27,120) shares
of the Company’s common stock (“Prior RSA’s”). Twenty-two thousand five hundred
(22,500) of the Prior RSA’s were awarded under the LTC Properties, Inc. 2004
Restricted Stock Plan (“2004 RSP”) and four thousand six hundred twenty (4,620)
of the Prior RSA’s were awarded under the LTC Properties, Inc., 1998 Equity
Participation Plan (“1998 EPP”) and the applicable LTC Property, Inc.
Restrictive Stock Agreements or 1998 EPP Award Agreements, as the case may be
(together the “Award Agreements”). The Award Agreements are hereby modified and
amended to provide that (A) no prior existing schedule for the lapsing of
restriction on the shares awarded thereunder shall have any further force and
effect, and (B) all
restrictions imposed by the Company with respect to the Prior RSA’s shall lapse
in the annual amount of 9,040 shares each March 1, 2008, 2009 and 2010,
respectively.

 

(ii)                                      Simultaneously
with the execution of this Agreement, the Company and Executive shall execute a
2007 Restricted Stock Agreement in the form of Exhibit A hereto pursuant to
which the Company shall grant Executive a Restricted Stock Award of forty
thousand (40,000) shares of restricted common stock of the Company under the
1998 EPP (the “2007 RSA”). Restrictions imposed by the Company on the 2007 RSA
shares shall lapse in the amounts of 13,333 shares on March 1, 2008, 13,333 on
March 1, 2009 and 13,334 on March 1, 2010.

 

(f)                                       Executive shall
be entitled to reasonable vacation time, not less than four (4) weeks per year,
provided that not more than two
(2) weeks of such vacation time may be taken consecutively without prior notice
to and non-objection by the Compensation Committee of the Board of Directors
or, if there is no Compensation Committee, the Board of Directors.

 

5.                                        Certain Terms
Defined.  For purposes of this Agreement:

 

(a)                              Executive shall
be deemed to be “disabled” if a physical or mental condition shall occur and
persist which, in the written opinion of a licensed physician selected by the
Board of Directors in good faith, has rendered Executive unable to perform the
duties set forth in Section 1 hereof for a period of sixty (60) days or more
and, in the written opinion of such physician, the condition will continue for
an indefinite period of time, rendering Executive unable to return to her
duties.

 

(b)                                    A termination
of Executive’s employment by LTC shall be deemed for “Cause” if, and only if,
it is based upon (i) conviction of a felony; (ii) material disloyalty
to the Company such as embezzlement, misappropriation of corporate assets or,
except as permitted pursuant to Section 3 of this Agreement, breach of
Executive’s agreement not to engage in business for another enterprise of the
type engaged in by the Company; or (iii) the engaging in unethical or
illegal behavior which is of a public nature, brings LTC into disrepute, and
result in material damage to the Company. The Company shall have the right to
suspend Executive with pay, for a reasonable period to investigate allegations
of conduct which, if proven, would establish a right to terminate this
Agreement for Cause, or to permit a felony charge to be tried. Immediately upon
the conclusion of such temporary period, unless Cause to terminate this
Agreement has been established, Executive shall be restored to all duties and
responsibilities as if such suspension had never occurred.

 

3

 

(c)                              A resignation
by Executive shall not be deemed to be voluntary and shall be deemed to be a
resignation with “Good Reason” if it is based upon (i) a diminution in
Executive’s title, duties, or salary; (ii) a material reduction in
benefits; (iii) a direction by the Board of Directors that Executive
report to any person or group other than the Board of Directors, or (iv) a
geographic relocation of Executive’s place of work a distance for more than
seventy-five (75) miles from LTC’s offices located at  31365 Oak Crest Drive, Suite 200, Westlake
Village, California 91361.

 

(d)                                    “Affiliate”
means with respect to any Person, a Person who, directly or indirectly, through
one or more intermediaries, controls, is controlled by or is under common
control, with the Person specified.

 

(e)                                     “Base Salary”
means, as of any date of termination of employment, the highest base salary of
Executive in the then current fiscal year or in any of the last four fiscal
years immediately preceding such date of termination of employment.

 

(f)                                       “Beneficial
Owner” shall have the meaning given to such term in Rule 13d-3 under the
Exchange Act.

 

(g)                                    A “Change in
Control” occurs if:

 

(i)                                  Any Person or related group
of Persons (other than Executive and her Related Persons, the Company or a
Person that directly or indirectly controls, is controlled by, or is under
common control with, the Company) is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing 30% or more of the
combined voting power of the Company’s then outstanding securities;

 

(ii)                                  The
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation (or other entity), other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 66-2/3% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately
after such merger or consolidation; provided,
however, that a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no Person
acquires 30% or more of the combined voting power of the Company’s then
outstanding securities shall not constitute a Change in Control;

 

(iii)                               The
Stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets; or

 

(iv)                              A majority of
the members of the Board of Directors of the Company cease to be Continuing
Directors;

 

(h)                                    “Code” means
the Internal Revenue Code of 1986, as amended.

 

(i)                                        “Continuing
Directors” means, as of any date of determination, any member of the Board of
Directors who (i) was a member of such Board of Directors on the date of
the 

 

4

 

Agreement or (ii) was nominated for election or elected to such
Board of Directors with the approval of a majority of the Continuing Directors
who were members of such Board of Directors at the time of such nomination or
election.

 

(j)                                        “Exchange Act”
means the Exchange Act of 1934, as amended.

 

(k)                                     “Person” means
any individual, corporation, partnership, limited liability company, trust,
association or other entity.

 

(l)                                        “Related Person”
means any immediate family member (spouse, partner, parent, sibling or child
whether by birth or adoption) of the Executive and any trust, estate or
foundation, the beneficiary of which is the Executive and/or an immediate
family member of the Executive.

 

6.                                        Certain
Benefits Upon Termination.  Executive’s employment shall be
terminated upon the earlier of (i) the voluntary resignation of Executive
with or without Good Reason; (ii) Executive’s death or permanent
disability; or (iii) upon the termination of Executive’s employment by LTC
for any reason at any time. In the event of such termination, the below
provisions of this Section 6 shall apply, and in the event of a Change of
Control, whether or not Executive’s employment is terminated thereby, Section
6(b) shall apply.

 

(a)                              If Executive’s
employment by LTC terminates for any reason other than as a result of (i) a
termination for Cause, or (ii) a voluntary resignation by Executive without a
Good Reason, or (iii) a Change in Control of the Company, then LTC shall pay
Executive a lump sum severance payment equal to four times her Base Salary, provided that if employment terminates by
reason of Executive’s death or disability, then such salary shall be paid only
to the extent the Company has available “key man” life, disability or similar
insurance relating to the death or disability of Executive.

 

(b)                             Upon a Change
in Control of the Company whether or not Executive’s employment is terminated
thereby, in lieu of the severance payment described in Section 6(a) above, LTC
shall pay Executive a one time severance payment in cash equal to Three Million
Dollars ($3,000,000), and all stock options shall automatically become
exercisable. All restrictions on stock awarded to Executive, other than the
Prior RSA’s and the 2007 RSA shares pursuant to Section 4(e) hereof, shall
automatically lapse concurrently upon a Change in Control, notwithstanding any
prior existing schedule; provided, however,
that no Change of Control or payment of the aforesaid severance payment shall (i)
terminate or reduce Executive’s Health Care Benefits as set forth in Section
4(c) hereof which shall remain in full force and effect, and (ii) if Executive’s
employment is not terminated in connection with such Change of Control,
restrictions on the Prior RSA’s and the 2007 RSA shares awarded under Section
4(e) hereof shall remain in full force and effect and shall not lapse until
Executive’s employment is terminated as provided in such Section 4(e).

 

(c)                                     COBRA. If Executive’s
employment by LTC terminates for any reason, except for LTC’s termination of
Executive’s employment for Cause or a voluntary resignation by Executive
without a Good Reason, LTC shall offer to Executive the opportunity to
participate in all Company-provided medical and dental plans to the extent
Executive elects and remains eligible for coverage under COBRA and for a
maximum period of eighteen (18) months at 

 

5

 

Company expense to the extent the benefits thereunder are not
duplicative of the Executive’s Health Insurance Benefits; provided, however, in the event Executive’s
employment by LTC terminated upon a Change in Control of the Company, then
Executive shall not be given the opportunity to participate in any of such
medical and dental plans, except to the extent required by law and except as
required in accordance with Executive’s Health Insurance Benefits. The
provisions of this Section 6(c) are intended to specify Executive’s rights
under COBRA and are not intended to limit or reduce Executive’s Health
Insurance Benefits.

 

(d)                                    In the event
that Executive’s employment terminates by reason of her death, all benefits
provided in this Section 6 shall be paid to her estate or as her executor shall
direct, but payment may be deferred until Executive’s executor or personal
representative has been appointed and qualified pursuant to the laws in effect
in Executive’s jurisdiction of residence at the time of her death.

 

(e)                                     LTC shall make
all payments pursuant to the foregoing subsections (a) through (d) concurrently
with the date of termination of Executive’s employment or consummation of a
Change in Control of the Company, as applicable.

 

(f)                                       LTC shall have
no liability under this Section 6 if Executive’s employment pursuant to this
Agreement is terminated by LTC for Cause or by Executive without a Good Reason;
provided, however, that if Executive’s
employment pursuant to this Agreement is terminated by LTC for Cause or by
Executive without a Good Reason at any time after a Change of Control which did
not result in Executive’s employment being terminated, such post-Change of
Control termination by LTC for Cause or by Executive without a Good Reason
shall not affect in any way Executive’s entitlement to Executive’s Health
Insurance Benefits or the Health Insurance Buyout right under Section 4(c)under
above, the one time severance payment described in Section 6(b) above or any
other rights, benefits or entitlements to which Executive may be entitled as a
result of such Change of Control.

 

(g)                                    Gross-Up.

 

(i)                                  If it shall be
determined that any payment, distribution or benefit received or to be received
by Executive from the Company (whether payable pursuant to the terms of this
Agreement or any other plan, arrangements or agreement with the Company or a Affiliate
(as defined above) (“Payments”)) would be subject to the excise tax imposed by
Section 4999 of the Code (the “Excise Tax”), then Executive shall be entitled
to receive an additional payment (the “Excise Tax Gross-Up Payment”) in an
amount such that the net amount retained by Executive, after the calculation
and deduction of any Excise Tax on the Payments and any federal, state and
local income taxes and excise tax on the Excise Tax Gross-Up Payment provided
for in this Section 6(g), shall be equal to the Payments. In determining this
amount, the amount of the Excise Tax Gross-Up Payment attributable to federal
income taxes shall be reduced by the maximum reduction in federal income taxes
that could be obtained by the deduction of the portion of the Excise Tax
Gross-Up Payment attributable to state and local income taxes. Finally, the
Excise Tax Gross-Up Payment shall be reduced by income or excise tax
withholding payment made by the Company or any affiliate of either to any
federal, state or local taxing authority with respect to the Excise Tax Gross-Up
Payment that was not deducted from compensation payable to Executive.

 

6

 

(ii)                               All
determinations required to be made under this Section 6(g), including whether
and when an Excise Tax Gross-Up Payment is required and the amount of such
Excise Tax Gross-Up Payment and the assumptions to be utilized in arriving at
such determination, except as specified in Section 6(g)(i) above, shall be made
by the Company’s independent auditors (the “Accounting Firm”), which shall
provide detailed supporting calculations both to the Company and Executive. Such
determination of tax liability made by the Accounting Firm shall be subject to
review by Executive’s tax advisor and, if Executive’s tax advisor does not
agree with such determination reached by the Accounting Firm, then the
Accounting Firm and Executive’s tax advisor shall jointly designate a
nationally recognized public accounting firm, which shall make such determination.
All reasonable fees and expenses of the accountants and tax advisors retained
by either Executive or the Company shall be borne by the Company. Any Excise
Tax Gross-Up Payment, as determined pursuant to this Section 6(g), shall be
paid by the Company to Executive within five days after the receipt of such
determination. Any determination by a jointly designated public accounting firm
shall be binding upon the Company and Executive.

 

(iii)                            As a result of
the uncertainty in the application of Subsection 4999 of the Code at the time
of the initial determination thereunder, it is possible that Excise Tax Gross-Up
Payments will not have been made by the Company that should have been made
consistent with the calculations required to be made hereunder (“Underpayment”).
In the event that Executive thereafter is required to make a payment of any
Excise Tax, any such Underpayment calculated in accordance with and in the same
manner as the Excise Tax Gross-Up Payment in Section 6(g)(i) above shall be
promptly paid by the Company to or for the benefit of Executive. In the event
that the Excise Tax Gross-Up Payment exceeds the amount subsequently determined
to be due, such excess shall constitute a loan from the Company (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code).

 

7.                                        [Intentionally
omitted]

 

8.                                        Indemnification.  LTC
shall indemnify Executive and hold her harmless from and against all claims,
losses, damages, expense or liabilities (including expenses of defense and
settlement) based upon or in any way arising from or connected with his
employment by LTC, to the maximum extent permitted by law. To the fullest
extent permitted by law, LTC shall advance to Executive all expenses necessary
in connection with the defense of any action or claim which is brought if
indemnification cannot be determined to be available prior to the conclusion of
such action or the investigation of such claim. LTC shall investigate in good
faith the availability and cost of directors’ and officers’ insurance and shall
include Executive as an insured in any directors’ and officers’ insurance
policy it maintains. The provisions of this Section 8 shall survive any
termination or expiration of this Agreement.

 

9.                                        Attorney Fees.  In
the event that any action or proceeding is brought to enforce the terms and
provisions of this Agreement, the prevailing party shall be entitled to recover
reasonable attorney fees.

 

10.                                  Notices.  All
notices and other communications provided to either party hereto under this
Agreement shall be in writing and delivered by certified or registered mail to
such party at its/her address set forth below its/her signature hereto, or at
such other address as may be designated with postage prepaid, shall be deemed
given when received.

 

7

 

11.                                  Construction.  In
constructing this Agreement, if any portion of this Agreement shall be found to
be invalid or unenforceable, the remaining terms and provisions of this
Agreement shall be given effect to the maximum extent permitted without
considering the void, invalid or unenforceable provisions. In construing this
Agreement, the singular shall include the plural, the masculine shall include
the feminine and neuter genders as appropriate, and no meaning in effect shall
be given to the captions of the sections in this Agreement, which is inserted
for convenience of reference only. Without limitation to the foregoing, nothing
in this Agreement is intended to violate the Sarbanes-Oxley Act of 2002, and to
the extent that any provision of this Agreement would constitute such a
violation, such provision shall be modified to the extent required by such Act,
or, to the extent that such provision cannot be so modified and is found to be
invalid or unenforceable, the remaining terms and provisions shall be given
effect to the maximum extent permitted without considering the void, invalid or
unenforceable provision.

 

Notwithstanding any other provision of the
Agreement, to the extent that (i) any amount paid pursuant to the Agreement is
treated as nonqualified deferred compensation pursuant to Section 409A of the
Internal Revenue Code of 1986 (the “Code”) and (ii) the Executive is a “specified
employee” pursuant to Section 409A(2)(B) of the Code, then such payments shall be
made on the date which is six (6) months after the date of the Executive’s
separation from service. In connection with the payment of any
obligation that is delayed pursuant to this Rider, the Company shall establish
an irrevocable trust to hold funds to be used for payment of such obligations. Upon
the date that such amount would otherwise be payable, the Company shall deposit
into such irrevocable trust an amount equal to the obligation. However,
notwithstanding the establishment of the irrevocable trust, the Company’s
obligations under the Agreement upon the Executive’s termination of employment
shall constitute a general, unsecured obligation of the Company and any amount
payable to the Executive shall be paid solely out of the Company’s general
assets, and the Executive shall have no right to any specific assets of the
Company. The funds, if any, contained or contributed to the irrevocable trust
shall remain available for the claims of the Company’s general creditors.

 

12.                                  Headings. The section
headings hereof have been inserted for convenience of reference only and shall
not be construed to affect the meaning, construction or effect of this
Agreement.

 

13.                                  Governing Law. The
provisions of this Agreement shall be construed and interpreted in accordance
with the internal laws of the State of California as at the time in effect.

 

14.                                  Entire
Agreement. This Agreement constitutes the entire agreement
and supersedes all other prior agreements (including the Prior Employment
Agreement) and undertakings, both written and oral, among Executive and the
Company, with respect to the subject matter hereof.

 

8

 

IN WITNESS WHEREOF, this Agreement shall be
effective as of the date specified in the first paragraph of this Agreement.

 

	
  Signed
  December 4, 2007

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LTC
  PROPERTIES, INC., a Maryland corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   Signed December 4, 2007

  	
   

  	
  /s/ Andre Dimitriadis

  
	
   

  	
   

  	
  Andre
  C. Dimitriadis, Executive Chairman

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Signed
  December 4, 2007

  	
  By:

  	
  /s/ Timothy Triche

  
	
   

  	
   

  	
   

  	
  Compensation Committee Representative

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Signed
  December 4, 2007

  	
   

  	
  Executive:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Wendy Simpson

  
	
   

  	
   

  	
  Wendy
  Simpson

  

 

9

EXHIBIT A

 

LTC PROPERTIES, INC.
 FIRST AMENDMENT TO THE 2007 RESTRICTED STOCK AGREEMENT

 

LTC
PROPERTIES, INC., a Maryland corporation (the “Corporation”),
and WENDY SIMPSON, an employee of the
Corporation (the “Grantee”), for good and valuable consideration the receipt
and adequacy of which are hereby acknowledged and intending to be legally bound
hereby, agree as follows:

 

1.                                       Restricted
Stock Award. This Agreement is the First Amendment to the 2007 Restricted
Stock Agreement referred to in the First Amendment to the Amended and Restated
Employment Agreement, dated as of February 21, 2007, between the Corporation
and Grantee (“2007 Employment Agreement”). The Corporation hereby confirms the
award to the Grantee, effective March 1, 2007 (the “Date of Award”), of forty
thousand (40,000) shares of the Corporation’s Common Stock, $.01 par value (the
“2007 Restricted Stock”), under and subject to the terms and conditions of the
Corporation’s 1998 Equity Participation Plan (the “Plan”) and this Agreement. The
Plan is incorporated by reference and made a part of this Agreement as though
set forth in full herein. Terms which are capitalized but not defined in this
Agreement have the same meaning as in the Plan unless the context otherwise
requires. As of the Date of Award, the Grantee will be a stockholder of the
Corporation with respect to the 2007 Restricted Stock and will have all the
rights of a stockholder with respect to the 2007 Restricted Stock, including
the right to vote the 2007 Restricted Stock and to receive all dividends and
other distributions paid with respect thereto, subject to the restrictions of
the Plan and this Agreement.

 

2.                                       Acceptance of
Restricted Stock Award. The Grantee accepts the 2007 Restricted Stock Award
confirmed by this Agreement, acknowledges having received a copy of the Plan
and agrees to be bound by the terms and provisions of the Plan, as the Plan may
be amended from time to time; provided, however, that no alteration, amendment,
revocation or termination of the Plan shall, without the written consent of the
Grantee, adversely affect the rights of the Grantee with respect to the 2007
Restricted Stock.

 

3.                                       Restrictions

 

A.            Grantee
shall not sell, exchange, assign, alienate, pledge, hypothecate, encumber,
charge, give, transfer or otherwise dispose of, either voluntarily or by
operation of law, any shares of the 2007 Restricted Stock, or any rights or
interests appertaining to the 2007 Restricted Stock, prior to the lapse of the
restrictions set forth herein as provided in Section 3(D) below with respect to
such shares.

 

B.            As
of the Date of Award, certificates representing the shares of the 2007
Restricted Stock will be issued in the name of the Grantee and held by the
Corporation in escrow until the lapse of restrictions set forth herein as
provided in Section 3(D) below with respect to such shares.

 

 

C.            The
Grantee understands the provisions of Article 7.2 of the Plan to the effect
that the obligation of the Corporation to issue shares of Common Stock under
the Plan is subject to (i) the effectiveness of a registration statement under
the Securities Act of 1933, as amended, if deemed necessary or appropriate by
counsel for the Corporation, (ii) the condition that the shares shall have been
listed (or authorized for listing upon official notice of issuance) upon each
stock exchange, if any, on which the Common Stock may then be listed, and (iii)
any other applicable laws, regulations, rules and orders which may then be in
effect.

 

The certificate or certificates representing
the shares to be issued or delivered hereunder may bear any legends required by
any applicable securities laws and may reflect any transfer or other
restrictions imposed by the Plan, and the Corporation may at some time issue to
the stock transfer agent appropriate stop-transfer instructions with respect to
such shares. In addition, also as a condition precedent to the issuance or
delivery of shares, the Grantee may be required to make certain other
representations and warranties and to provide certain other information to
enable the Corporation to comply with the laws, rules, regulations and orders
specified under the first sentence of this Section 3(C) and to execute a
joinder to any shareholders’ agreement of the Corporation, in the form provided
by the Corporation, pursuant to which the transfer of shares received under the
Plan may be restricted.

 

D.            The
restrictions applicable to the 2007 Restricted Stock granted hereunder shall
lapse and expire as to 13,333 shares on March 1, 2008, as to 13,333 shares on
March 1, 2009 and as to 13,334 shares on March 1, 2010.

 

4.                                       Withholding
of Taxes. The Grantee will be advised by the Corporation as to the amount
of any Federal income or employment taxes required to be withheld by the
Corporation on the compensation income resulting from the award of or lapse of
restrictions on the 2007 Restricted Stock. The timing of the withholding will
depend on whether the Grantee makes an election under Section 83(b) of the Code.
State, local or foreign income or employment taxes may also be required to be
withheld by the Corporation on any compensation income resulting from the award
of the 2007 Restricted Stock. The Grantee will pay any taxes required to be
withheld directly to the Corporation upon request.

 

If the Grantee does not pay any taxes required to be withheld directly
to the Corporation within ten days after any request as provided above, the
Corporation may withhold such taxes from any other compensation to which the
Grantee is entitled from the Corporation. The Grantee will hold the Corporation
harmless in acting to satisfy the withholding obligation in this manner if it
becomes necessary to do so.

 

5.                                       Interpretation
of Plan and Agreement. This Agreement is the agreement referred to in
Article 3.1 of the Plan. If there is any conflict between the Plan and this
Agreement, the provisions of the Plan will control. Any dispute or disagreement
which arises under or in any way relates to the interpretation or construction
of the Plan or this Agreement will be resolved by the Administrator and the
decision of the Administrator will be final, binding and conclusive for all
purposes.

 

2

 

6.                                       Effect of
Agreement on Rights of Corporation and Grantee. This Agreement does not
confer any right on the Grantee to continue in the employ of the Corporation or
interfere in any way with the rights of the Corporation to terminate the
employment of the Grantee.

 

7.                                       Binding
Effect. This Agreement will be binding upon the successors and assigns of
the Corporation and upon the legal representatives, heirs and legatees of the
Grantee.

 

8.                                       Entire
Agreement. This Agreement constitutes the entire agreement between the
Corporation and the Grantee and supersedes all prior agreements and
understandings, oral or written, between the Corporation and the Grantee with
respect to the subject matter of this Agreement.

 

9.                                       Amendment.
This Agreement may be amended only by a written instrument signed by the
Corporation and the Grantee.

 

10.                                 Section Headings.
The Section headings contained in this Agreement are for reference purposes
only and will not affect in any way the meaning or interpretation of any of the
provisions of this Agreement.

 

11.                                 Governing Law and
Jurisdiction. This Agreement will be governed by, and construed and
enforced in accordance with, the laws of the State of California.

 

IN WITNESS
WHEREOF, the Corporation and the Grantee have executed
this Agreement as of the Date of Award.

 

	
   

  	
  LTC PROPERTIES, INC.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:
  Chairman, Compensation Committee

  
	
   

  	
   

  
	
   

  	
  GRANTEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Wendy
  Simpson

  

 

3

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