Seadrill Partners LLC (Form: 6-K, Received: 09/30/2013 16:53:30)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the six month period ended June 30, 2013

Commission File Number 001-35704

Seadrill Partners LLC

(Exact name of Registrant as specified in its Charter)

2 ^nd Floor, Building 11

Chiswick Business Park

566 Chiswick High Road

London, W4 5YS

United Kingdom

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F x Form 40-F ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101 (b)(1). Yes ¨ No x

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101 (b)(7). Yes ¨ No x

SEADRILL PARTNERS LLC

REPORT ON FORM 6-K FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2013

INDEX


	PAGE

Management’s Discussion and Analysis of Financial Condition and Results of Operations		1

Quantitative and Qualitative Disclosures About Market Risk		10

Financial Statements (unaudited)

Unaudited Consolidated and Combined Carve-Out Statements of Operations for the Six Months Ended June 30, 2013 and 2012		F-1

Unaudited Consolidated and Combined Carve-Out Balance Sheets as of June 30, 2013 and December 31, 2012		F-2

Unaudited Consolidated and Combined Carve-Out Statements of Cash Flows for the Six Months Ended June 30, 2013 and 2012		F-3

Unaudited Consolidated and Combined Carve-Out Statements of Changes in Members’ Capital/Owners’ and Dropdown Companies Equity for the Six Months Ended June 30, 2013 and 2012, and the six months ended December 31, 2012		F-4

Notes to the Consolidated and Combined Carve-Out Financial Statements (Unaudited)		F-5

EXHIBITS

SIGNATURES

Management’s Discussion and Analysis of Financial Condition and Results of Operations

On May 17, 2013, Seadrill Partners Operating LLC, a wholly owned subsidiary of Seadrill Partners LLC (“Seadrill Partners,” the “Company,” “our,” “we,” “us”) completed the acquisition of the companies that own and operate the tender rig T-15 from Seadrill Limited (“Seadrill”) for a total purchase price of $210 million. This transaction was deemed to be a reorganization of entities under common control. As a result, Seadrill Partners’ financial statements have been retroactively adjusted in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”) as if Seadrill Partners had acquired the entities that own and operate the T-15 for the entire period that the entities have been under the common control of Seadrill Limited. The retroactively adjusted Consolidated and Combined Carve-Out Financial Statements of Seadrill Partners as of and for the years ended December 31, 2011 and 2012 are attached as Exhibit 99.1 to the Current Report on Form 6-K filed with the Securities and Exchange Commission (the “SEC”) on September 30, 2013 (the “Restatement 6-K”). The related “Management’s Discussion and Analysis of Financial Condition and Results of Operations” is attached as Exhibit 99.2 to the Restatement 6-K.

You should read the following discussion of our financial condition and results of operations in conjunction with the interim Financial Statements presented in this report, as well as the historical Consolidated and Combined Carve-Out Financial Statements and related notes of Seadrill Partners included in the Restatement 6-K. Among other things, those financial statements include more detailed information regarding the basis of presentation for the following information. The Consolidated and Combined Carve-out Financial Statements of Seadrill Partners have been prepared in accordance with U.S. GAAP and are presented in U.S. Dollars.

Overview

Seadrill Partners is a growth-oriented limited liability company formed by Seadrill to own, operate and acquire offshore drilling rigs.

On October 24, 2012, we completed our initial public offering (the “IPO”) and in connection with the IPO, we issued 10,062,500 common units to the public at a price of $22.00 per common unit and issued to Seadrill 14,752,525 common units and 16,543,350 subordinated units. Seadrill Member LLC, a wholly-owned subsidiary of Seadrill that has a non-economic limited liability company interest in the Company, received all of our incentive distribution rights.

In connection with our IPO, we acquired (i) a 30% limited partner interest in Seadrill Operating LP, as well as the non-economic general partner interest in Seadrill Operating LP through our 100% ownership of its general partner, Seadrill Operating GP LLC, and (ii) a 51% limited liability company interest in Seadrill Capricorn Holdings LLC. We control Seadrill Operating LP through our ownership of its general partner and Seadrill Capricorn Holdings LLC through our ownership of the majority of the limited liability company interests. Seadrill Operating LP owns a 100% interest in the entities that own and operate the West Aquarius and the West Vencedor and an approximate 56% interest in the entity that owns and operates the West Capella . Seadrill Capricorn Holdings LLC, a 100% interest in the entities that own and operate the West Capricorn .

On May 17, 2013, our wholly owned subsidiary, Seadrill Partners Operating LLC, acquired from Seadrill 100% of the ownership interests in the entities that own and operate the tender rig T-15 . The T-15 is a barge-type, self-erecting tender rig built in 2013 by Cosco Nantong Shipyard Co. Limited. The T-15 was delivered under its current contract to its current customer, Chevron Thailand Exploration and Production Limited, a subsidiary of Chevron, in May 2013 and commenced operations in July 2013. The T-15 is contracted for a five-year period with Chevron in Thailand at a initial contract dayrate of $115,500. Management of operations for the T-15 will be subcontracted to Seadrill Asia Limited (“Seadrill Asia”), a wholly owned subsidiary of SapuraKencana Petroleum Berhad. Seadrill International is responsible for all costs of operating the T-15, which includes a management fee of $9,200 per day payable to Seadrill Asia.

We refer to Seadrill Operating LP, Seadrill Capricorn Holdings LLC and Seadrill Partners Operating LLC collectively, as “OPCO.”

Our drilling rigs are under long-term contracts with major oil companies such as Chevron, Total, BP and ExxonMobil with an average remaining term of 3.8 years as of June 30, 2013.

Factors Affecting the Comparability of Future Results

•

We do not own all of the interests in OPCO. As a result, our cash flow does not include distributions on Seadrill’s interest in OPCO. The operating agreements of OPCO require it to distribute all of its available cash each quarter. In determining the amount of cash available for distribution to us by OPCO and by us to our unitholders, our board of directors must approve the amount of cash reserves to be set aside, including reserves for future maintenance and replacement capital expenditures, working capital and other matters. Distributions by OPCO to Seadrill in respect of its ownership interest in OPCO are not included in our cash flow.

•

The size of OPCO’s fleet continues to change. Our Consolidated and Combined Carve-Out Financial Statements reflect changes in the size and composition of OPCO’s fleet due to certain rig deliveries and contract commencement dates. For instance West Capricorn was delivered from the shipyard at the end of 2011, and the contract commencement date occurred in July 2012. Furthermore, we acquired the tender rig T-15 from Seadrill on May 17, 2013 and the T-15 contract commencement occurred in July 2013. Also, we or OPCO may grow in the future through the acquisition of additional drilling rigs as part of our growth strategy.

Operating Results

Six Months Ended June 30, 2013 Compared to Six Months Ended June 30, 2012

The following table summarizes our operating results for the six months ended June 31, 2013 and 2012:


	Six Months Ended June 30,						Increase/Decrease
	2013			2012			$			%
	($ in millions)

Contract revenues		320.1			262.0			58.1			22.2	%
Reimbursable revenues		7.7			4.5			3.2			71.1	%
Other revenues		5.2			8.5			(3.3	)		(38.8	%)
Total operating revenues		333.0			275.0			58.0			21.1	%

Vessel and Rig operating expenses		123.5			88.7			34.8			39.2	%
Reimbursable expenses		7.3			4.1			3.2			78.0	%
Depreciation and amortization		43.9			30.9			13.0			42.1	%
General and administrative expenses		12.0			13.8			(1.8	)		(13.0	%)
Total operating expenses		186.7			137.5			(49.2	)		35.8	%

Net operating income		146.3			137.5			8.8			6.4	%

Interest income		1.4			1.2			0.1			8.3	%
Interest expense		(24.8	)		(17.9	)		(6.9	)		(38.5	%)
Gain/(Loss) on derivative financial instruments		28.6			(10.5	)		39.1			372.4	%
Currency exchange (loss) / gain		(1.0	)		(1.4	)		0.4			28.6	%
Total financial items		4.2			(28.6	)		32.8			114.7	%
Income before income taxes		150.5			108.9			41.6			38.2	%

Income taxes		(12.0	)		(15.8	)		3.8			24.0	%
Net Income		138.5			93.1			45.4			48.8	%

Contract Revenues

Contract revenue increased by $58.1 million, or 22.2%, to $320.1 million, for the six months ended June 30, 2013, from $262.0 million for the six months ended June 30, 2012. The increase was primarily due to the West Capricorn commencing operations during July 2012, with a contribution of $72.7 million for the six months ended June 30, 2013. This was partly offset by a decrease of $14.8 million due to the West Aquarius mobilizing from Southeast Asia to Canada and commencing operations at a reduced dayrate in the first half of 2013. As the West Aquarius is on

a global contract with Exxon Mobil, dayrates are adjusted according to the level of operating expenses in each location and Canada has lower operating expenses than the locations the drilling rig was operating in during the first half of 2012.

The following table summarizes average daily revenues and economic utilization percentage by drilling rig type of OPCO’s fleet for the periods presented:


	Six Month Ended June 30,
	2013					2012
	Average Daily Revenues (USD) ⁽¹⁾		Economic Utilization ⁽²⁾			Average Daily Revenues (USD)		Economic Utilization
Semi-submersible rigs	$	466,850		91.3	%	$	564,800		94.6	%
Drillship	$	536,300		96.4	%	$	535,600		98.1	%
Tender rig	$	209,200		99.9	%	$	213,500		103.5	%

⁽¹⁾	Average daily revenues are the average revenues for each type of rig, based on the actual days available for each rig of that type.

⁽²⁾	Economic utilization is calculated as the total revenue received divided by the full operating dayrate multiplied by the number of days in the period, excluding bonuses.

Reimbursable Revenues

Reimbursable revenue increased by $3.2 million, or 71.1%, to $7.7 million for the six months ended June 30, 2013, from $4.5 million in the six months ended June 30, 2012. The increase was mainly due to the West Aquarius mobilizing to Canada, as well as certain client-requested upgrades to the West Aquarius .

Other revenues

Other revenue decreased by $3.3 million, or 38.8% to $5.2 million, for the six months ended June 30, 2013, from $8.5 million for the six months ended June 30, 2012. We earned other revenues within our Nigerian service company of $5.2 million billed to Seadrill for certain services, including the provision of onshore and offshore personnel, which we provided to Seadrill’s West Polaris drilling rig that was operating in Nigeria during that period. The decrease was due to the West Polaris rig which operated in Nigeria for only 59 days during the six months ended June 30, 2013 compared to six months of operations in the same period in 2012.

Rig Operating Expenses

Rig operating expenses increased by $34.8 million, or 39.2%, to $123.5 million in the six months ended June 30 2013, from $88.7 million in the six months ended June 30, 2012. This increase was primarily due to the West Capricorn and the West Aquarius each commencing operations in 2012, which accounted for an increase of $24.7 million and $11.3 million, respectively. This was partly offset by a decrease in operating expenses related to the West Polaris (See Other Revenues and Related Parties note).

Reimbursable Expenses

Reimbursable expenses increased by $3.2 million, or 78%, to $7.3 million for the six months ended June 30, 2013 from $4.1 million in the six months ended June 30, 2012. The increase was mainly due to the West Aquarius mobilizing to Canada and expenses incurred as part of a client-requested upgrade to the West Aquarius .

Depreciation and Amortization

Depreciation and amortization expenses increased by $13.0 million, or 42.1%, to $43.9 million for the six months ended June 30, 2013, from $30.9 million for the six months ended June 30, 2012. The increase was primarily due to the West Capricorn commencing operations in July 2012 and therefore there was no depreciation expense included in the comparable 2012 period.

General and Administrative Expenses

General and administrative expenses decreased by $1.8 million, or 13.0%, to $12.0 million for the six months ended June 30, 2013, from $13.8 million for the six months ended June 30, 2012. The decrease was primarily due to higher spending as part of the West Capricorn commencing operation in 2012, and setting up a new office in Canada for the West Aquarius in 2012 which did not occur in 2013.

Interest Expense

Interest expense increased by $6.9 million, or 38.5%, to $24.8 million for the six months ended June 30, 2013 from $17.9 million for the six months ended June 30, 2012. The increase is primarily due to interest on the $550 million secured credit facility not being capitalized in the first half of 2013, as the West Capricorn entered into operation in July 2012. Additionally, the increase can also be attributed to the commitment fee expense for the undrawn balance of the revolving credit facility with Seadrill. This facility was entered into at the time of our IPO in October 2012.

Other Financial Items

Other financial items reported in the income statement include the following items:


	Six months ended June 30,
(US$ millions)	2013			2012
Interest income		1.3			1.2
Gain/(Loss) on derivative financial instruments		28.6			(10.5	)
Foreign exchange loss		(1.0	)		(1.4	)
Total other financial items		28.9			(10.7	)

Other financial items improved by $39.6 million to a gain of $28.9 million in the six months ended June 30, 2013 from a loss of $10.7 million in the same period in 2012. The change was mainly driven by a recognized gain from derivative instruments of $28.6 million in the first half of 2013 compared to a loss of $10.5 million in the same period in 2012. The increase relates to the change in fair value of the interest swaps held by Seadrill and attributable to the Company in proportion to the variable interest debt relating to the West Capella , the West Aquarius, the West Capricorn , the West Vencedor and the T-15 . As of June 30, 2013, 87% of total debt obligations for the Company had associated interest rate swap agreements.

Income Taxes

Income taxes decreased $3.8 million, or 24%, to $12.0 million for the six months ended June 30, 2013 from $15.8 million for the six months ended June 30, 2012. The decrease was primarily caused by the West Aquarius moving from South-East Asia to Canada during 2012, and the resulting change in taxable income and tax rates.

B. Liquidity and Capital Resources

Liquidity and Cash Needs

We operate in a capital-intensive industry, and our primary liquidity needs are to finance the purchase of additional drilling rigs and other capital expenditures, service our significant debt, fund investments (including the equity portion of investments in drilling rigs), fund working capital, maintain cash reserves against fluctuations in operating cash flows and pay distributions. We expect to fund our short-term liquidity needs through a combination of cash generated from operations and debt and equity financings.

As of June 30, 2013, our cash and cash equivalents were $50.0 million, compared to $19.5 million as of December 31, 2012. In connection with the closing of our IPO, OPCO entered into a five-year $300 million revolving credit facility with Seadrill as the lender, which we refer to as the sponsor credit facility. As of June 30, 2013, we have drawn down $69.6 million from this facility. We believe our current resources, including the potential borrowings under the sponsor credit facility, are sufficient to meet our working capital requirements for our current business for at least the next twelve months. Generally, our long-term sources of funds will be a combination of cash generated from operations, debt, equity financing and borrowings from and leasing arrangements with commercial banks. Because we distribute all of our available cash, we expect that we will rely upon external financing sources, including bank borrowings and the issuance of debt and equity securities, to fund acquisitions and other expansion capital expenditures.

Our funding and treasury activities are intended to maintain appropriate liquidity. Cash and cash equivalents are held primarily in U.S. Dollars with some balances held in Euros and Nigerian Naira. We have not entered into any foreign currency derivatives related to the Euro or Naira in the periods presented.

As OPCO’s fleet matures and expands, long-term maintenance expenses will likely increase. We are not aware of any regulatory changes or environmental liabilities that would have a material impact on our or OPCO’s current or future operations.

As of June 30, 2013 and December 31, 2012, our current liabilities exceeded current assets by $510.3 million and $192.0 million, respectively. This is primarily due to one of our debt facilities maturing in June 2014, and therefore being presented as part of our Current liabilities in the amount of $490.8 million. We intend to refinance these loans in due course, and have received indicative offers from commercial banks. We expect the facility to be refinanced before maturity in June 2014.

For the periods prior and subsequent to our IPO, the historic financial positions of OPCO, historic interaction between OPCO and the Seadrill group, and that amounts due to and due from OPCO to other Seadrill entities are recognized within owner’s equity in the Consolidated and Combined Carve-Out Financial Statements. Because Seadrill used a centralized cash management system, whereby cash held at a subsidiary level was swept on a daily basis into a centralized treasury function at Seadrill, intercompany payables and receivables outstanding for the periods presented prior to our IPO have been deemed to have been treated as equity by OPCO.

OPCO’s participation in the Seadrill group’s centralized cash management system was discontinued at the completion of our IPO.

In order to conform our working capital to that reflected in our balance sheet as of June 30, 2012, we agreed with Seadrill to amend the Contribution and Sale Agreement that we entered into with Seadrill at the time of our IPO in October 2012 to convert certain intercompany payables to equity. Pursuant to that amendment, as of June 30, 2013, our accounts and those of Seadrill were adjusted to reflect a net capital contribution in the amount of $20.0 million by Seadrill to Seadrill Operating LP and a net capital contribution in the amount of $20.5 million by Seadrill to Seadrill Capricorn Holdings LLC. No additional units were issued to Seadrill in connection with either of these contributions.

Cash Flows

Net Cash Provided by Operating Activities

Net cash provided by operating activities was $121.1 million and $96.2 million for the six months ended June 30, 2013 and 2012, respectively. The main drivers for the cash flow in the first half of 2013 were net income of $138.5 million and working capital changes of $26.0 million. For the first half of 2012, the cash flow from operations was mainly driven by net income of $93.1 million.

Net Cash Used in Investing Activities

Net cash used in investing activities was $35.0 million and $68.0 million for the six months ended June 30 2013 and 2012, respectively. In the first half of 2013, $19.4 million relates to costs of construction related to the T-15 rig and $15.6 million relates to additions to the West Capricorn and West Aquarius rigs. The $68 million in the first half of 2012 relates to additional costs of construction and mobilization of the West Capricorn .

Net Cash (Used in) / Provided by Financing Activities

Prior to the date of our IPO, long-term debt as presented in the Consolidated and Combined Carve-Out Financial Statements had been allocated from Seadrill, as Seadrill managed the treasury activities with the purpose of maximizing returns while maintaining appropriate liquidity for the Seadrill group’s requirements. As a result of this and the principles applied to allocate debt, the movements in debt may not be indicative of actual debt movements if OPCO had been operating as a standalone entity.

Net cash used in financing activities was $55.6 million and $42.3 million during the six months ended June 30, 2013 and 2012, respectively. In the first half of 2013, net cash used in financing activities of $55.6 million relates to repayments of debt of $170.1 million, cash distributions of $50.0 million and a distribution to Seadrill of $76.1 million as part of the T-15 acquisition, which was partly offset by receipt of owner’s funding of $31.8 million, proceeds from related party loans of $99.6 million and proceeds from T-15 vendor financing of $109.5 million. Net cash used in financing activities in the first half of 2012 of $42.3 million, relates to repayments of rig facilities of $90.4 million and receipt of owners funding of $48.1 million.

Net Increase/(Decrease) in Cash and Cash Equivalents

As a result of the foregoing, cash and cash equivalents increased in the six months ended June 30, 2013 by $48.8 million to $50.0 million, compared to $1.2 million as of June 30, 2012.

Borrowing Activities

Rig Financing Agreements

Seadrill financed the acquisitions of the drilling rigs in OPCO’s fleet with borrowings under credit agreements.

We refer to the West Capricorn Facility, the West Vencedor Facility and the West Capella & West Aquarius Facility and T-15 Facility collectively as the Rig Facilities. In September 2012, each of OPCO’s subsidiaries that own the West Capricorn , the West Vencedor , the West Aquarius and the West Capella , or the rig owning subsidiaries, entered into related party loan agreements with Seadrill in the amount of approximately $522.5 million, $115.2 million, $304.6 million and $295.3 million corresponding to the aggregate principal amount outstanding under the Rig Facilities allocable to the West Capricorn , the West Vencedor , the West Aquarius and the West Capella , respectively. On May 17, 2013, the entities that own and operate the T-15 entered into a loan agreement with Seadrill in the amount of $100.5 million corresponding with the aggregate principal amount outstanding under the T-15 Facility. Pursuant to the related party loan agreements, each rig owning subsidiary makes payments of principal and interest directly to Seadrill under each Rig Facility, at Seadrill’s direction and on its behalf, corresponding to payments of principal and interest due under such Rig Facility that are allocable to the West Capricorn , the West Vencedor , the West Aquarius, the West Capella and the T-15 , as applicable.

In December 2011, Seadrill entered into a $550 million senior secured term loan and revolving credit facility, in part to fund the delivery of the West Capricorn . We refer to this secured term loan and revolving credit facility as the West Capricorn Facility. The West Capricorn was pledged to secure Seadrill’s obligations under the West Capricorn Facility. Seadrill’s obligations under such facility could exceed the indebtedness of OPCO and its subsidiary that owns the West Capricorn under such facility. The revolving credit facility portion of the West Capricorn Facility and the commercial term loan portion of the West Capricorn Facility bears interest at a rate of LIBOR plus a margin ranging between 1.5% and 2.25% and will mature in December 2017. In connection with our IPO, Seadrill amended and restated the West Capricorn Facility to allow for the transfer of the West Capricorn to OPCO and to provide for Seadrill Capricorn Holdings and its subsidiaries that, directly or indirectly, own the West Capricorn and Seadrill US Gulf LLC to guarantee the obligations under the West Capricorn Facility. The outstanding balance as of June 30, 2013, was $467.5 million.

In June 2010, Seadrill entered into a $1.2 billion senior secured term loan in part to fund the delivery of the West Vencedor . We refer to this secured term loan as the West Vencedor Facility. The West Vencedor was pledged to secure Seadrill’s obligations under the West Vencedor Facility. Seadrill’s obligations under such facility could exceed the indebtedness of OPCO and its subsidiary that owns the West Vencedor under such facility. The West Vencedor Facility bears interest at a rate of LIBOR plus 2.25% and will mature in July 2015. In connection with our IPO, Seadrill amended and restated the West Vencedor Facility to allow for the transfer of the West Vencedor to OPCO and to provide for Seadrill Operating LP and its subsidiaries that, directly or indirectly, own the West Vencedor to guarantee the obligations under the West Vencedor Facility. The outstanding balance as of June 30, 2013 allocable to the West Vencedor , was $98.8 million.

In June 2009, Seadrill entered into a $1.5 billion senior secured credit facility in part to fund the acquisition of the West Capella and the West Aquarius . We refer to this secured credit facility as the West Capella & West Aquarius Facility. The West Capella and the West Aquarius were pledged to secure Seadrill’s obligations under the West Capella & West Aquarius Facility. Seadrill’s obligations under such facility could exceed the indebtedness of OPCO and its subsidiaries that own the West Capella and the West Aquarius under such facility. The West Capella & West Aquarius Facility bears interest at a rate of LIBOR plus 3.25% and will mature in June 2014, and the outstanding balance has therefore been classified as current on our balance sheet as of June 30, 2013. In connection with our IPO, Seadrill amended and restated the West Capella & West Aquarius Facility to allow for the transfer of the West Capella and the West Aquarius to OPCO and to provide for Seadrill Operating LP and its subsidiaries that, directly or indirectly, own the West Capella and the West Aquarius and Seadrill Canada Ltd. to guarantee the obligations under the West Capella & West Aquarius Facility. The outstanding balance as of June 30, 2013 allocable to the West Capella and West Aquarius , was $490.8 million.

In December 2012, Seadrill entered into a $440 million secured term loan facility in part to fund the acquisition of the tender barge T-15 . We refer to this loan facility as the T-15 Facility. The T-15 was pledged to secure Seadrill’s obligations under the T-15 Facility. Seadrill’s obligations under such facility could exceed the indebtedness of OPCO and its subsidiaries that own the T-15 under such facility. The T-15 Facility bears interest at a rate of LIBOR plus 3.25% and will mature in December 2017. Seadrill amended and restated the T-15 Facility to allow for the transfer of the T-15 and for Seadrill Partners Operating LLC and its subsidiaries that, directly or indirectly, own the T-15 to guarantee the obligations under the T-15 Facility. The outstanding balance as of June 30, 2013 allocable to the T-15 , was $95.5 million.

On May 17, 2013, Seadrill Partners Operating entered into a $109.5 million loan agreement with Seadrill as the lender to finance the acquisition of the T-15 (the “T-15 loan agreement”). The T-15 loan agreement bears interest at a rate of LIBOR plus 5% and matures in May 2016.

Interest Rates, Fees and Payments. The Rig Facilities bear interest at LIBOR plus an applicable margin (as defined in the applicable Rig Facility) and mandatory costs (if any), both of which accrue and are payable every three months. In addition, a commitment fee of 40% of the applicable margin is payable quarterly in arrears and on the final maturity date or termination date for each of the Rig Facilities. As all of the Rig Facilities are fully drawn, we do not expect to pay a commitment fee on these facilities.

Each of the Rig Facilities amortizes the outstanding borrowed amounts over the term of such facility. At maturity, each of the Rig Facilities will terminate and all outstanding amounts there under will be due and payable, including balloon payments of $275.0 million for the West Capricorn Facility in February 2017, $71.5 million for the West Vencedor Facility in July 2015 and $409.0 million for the West Capella & West Aquarius Facility in June 2014 and $55.3 million for the T-15 facility in December 2017.

Restrictive Covenants. The Rig Facilities contain various customary covenants that may limit, among other things, the ability of the borrower to:

•

sell the applicable drilling rig;

•

incur additional indebtedness or guarantee other indebtedness;

•

make investments or acquisitions;

•

pay dividends or make any other distributions if an event of default occurs; or

•

enter into inter-company charter arrangements for the drilling rigs not contemplated by the applicable Rig Facility.

The Rig Facilities also contain financial covenants requiring Seadrill Limited to:

•

maintain a minimum liquidity of at least $155 million within the group;

•

ensure that the consolidated ratio of net debt to EBITDA for Seadrill and its subsidiaries does not exceed 4.5 to 1.0;

•

ensure that the consolidated ratio of EBITDA to interest expenses for Seadrill and its subsidiaries be a minimum of 2.5 to 1.0;

•

ensure that the consolidated ratio of current assets to current liabilities for Seadrill and its subsidiaries be a minimum of 1.0 to 1.0; and

•

ensure that the consolidated ratio of equity to total assets for Seadrill and its subsidiaries be a minimum of 30%.

The Rig Facilities also identify various events that may trigger mandatory reduction, prepayment, and cancellation of the facility including, among others, the following:

•

total loss or sale of a drilling rig securing a Rig Facility;

•

cancellation or termination of any existing charter contract or satisfactory drilling contract (in the case of the West Capricorn Facility if a new contract is not entered into within 12 months after the cancellation or termination of such contract); and

•

a change of control.

Seadrill was in compliance with the covenants under the Rig Facilities as of June 30, 2013 and December 31, 2012. In addition, we and OPCO were each in compliance with the covenants contained in the related party loan agreement as of June 30, 2013 and December 31, 2012. We and Seadrill also intend to amend these restrictive covenants in connection with any assignment or amendment of the Rig Facilities.

The Rig Facilities contain customary events of default, such as failure to repay principal and interest, and other events of defaults, such as:

•

failure to comply with the financial or insurance covenants;

•

cross-default to other indebtedness held by both Seadrill and its subsidiaries and by us;

•

failure by Seadrill or by us to remain listed on a stock exchange;

•

the occurrence of a material adverse change;

•

revocation, termination, or modification of any authorization, license, consent, permission, or approval as necessary to conduct operations as contemplated by the applicable Rig Facility; and

•

the destruction, abandonment, seizure, appropriation or forfeiture of property of the guarantors or Seadrill and its subsidiaries, or the limitation by seizure, expropriation, nationalization, intervention, restriction or other action by or on behalf of any governmental, regulatory or other authority, of the authority or ability of Seadrill or any subsidiary thereof to conduct its business, which has or reasonably may be expected to have a material adverse effect.

If an event of default exists under any of the Rig Facilities, the lenders have the ability to accelerate the maturity of the applicable Rig Facility and exercise other rights and remedies. In addition, if Seadrill were to default under one of its other financing agreements, it could cause an event of default under each of the Rig Facilities. Further, because OPCO’s drilling rigs are pledged as security for Seadrill’s obligations under the Rig Facilities, lenders thereunder could foreclose on OPCO’s drilling rigs in the event of a default thereunder.

Credit Facility

OPCO entered into a $300 million amended and restated revolving loan agreement with Seadrill as the lender (the “sponsor credit facility”). Under this sponsor credit facility, Seadrill Operating LP has a borrowing limit of $250 million, Seadrill Capricorn Holdings LLC has a borrowing limit of $150 million and Seadrill Partners Operating LLC has a borrowing limit of $150 million; provided that the total borrowings outstanding at any time may not exceed $300 million. The sponsor credit facility will mature on October 24, 2017 and bear interest at a rate of LIBOR plus 5% per annum, with an annual 2% commitment fee on the undrawn balance. As of June 30, 2013, $230.4 million was undrawn under the sponsor credit facility.

The sponsor credit facility contains covenants that require us to, among other things:

•

notify Seadrill of the occurrence of any default or event of default; and

•

provide Seadrill with information in respect of our business and financial status as Seadrill may reasonably require, including, but not limited to, copies of our unaudited quarterly financial statements and our audited annual financial statements

As of June 30, 2013, OPCO was in compliance with all covenants under the sponsor credit facility.

Events of default under the sponsor credit facility include, among others, the following:

•

failure to pay any sum payable under the sponsor credit facility when due;

•

breach of certain covenants and obligations of the sponsor credit facility;

•

a material inaccuracy of any representation or warranty;

•

default under other indebtedness in excess of $25.0 million;

•

bankruptcy or insolvency events; and

•

commencement of proceedings seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of OPCO’s assets that results in an entry of an order for any such relief that is not vacated, discharged, stayed or bonded pending appeal within 60 days of the entry thereof.

Derivative Instruments and Hedging Activities

We use financial instruments to reduce the risk associated with fluctuations in interest rates. These agreements do not qualify for hedge accounting and any changes in the fair values of interest rate swap agreements are included in the Consolidated and Combined Statement of Operations within Financial Items.

Interest-rate swap agreements: Total realized and unrealized gain on interest-rate swap agreements not qualified for hedge accounting, amounted to $28.6 million for the six months ended June 30, 2013.

As of June 30, 2013, we and our consolidated subsidiaries had entered into interest rate swap contracts with Seadrill with a combined outstanding principal amount of $1,158.4 million at rates between 1.38% per annum and 0.739% per annum. The overall effect of these swaps is to fix the interest rate on $1,158.4 million of floating rate debt at a weighted average interest rate 1.16% per annum. As of June 30, 2013, our interest swaps represent approximately 87% of debt obligations. The swaps were entered into by Seadrill, with back to back agreements entered into with Seadrill Partners.

We receive part of our revenue in both Nigerian Naira and Euros. Because we incur operating costs related to the West Capella in Nigerian Naira, we are able to offset a portion of our foreign currency exposure with respect to revenues earned in Nigerian Naira. Depending on the level of our currency exposure, we may in the future enter into derivative instruments to manage currency risk.

Critical Accounting Estimates

The preparation of our condensed consolidated and combined carve-out interim financial statements in accordance with U.S. GAAP requires that management make estimates and assumptions affecting the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

For a description of our other material accounting policies that involve a higher degree of judgement, please read Note 2 (Summary of Significant Accounting Policies) of our Consolidated and Combined Financial Statements included in our Restatement 6-K filed with the SEC.

Contractual Obligations

The following table sets forth our contractual obligations for the periods indicated as of June 30, 2013:


($ in millions)	Payments Due by Period
	Total		Less than 1 Year		1-3 Years		4-5 Years		More than 5 Years
Long-term debt obligations		1,262.2		572.3		634.5		55.4		—

Interest expense commitments on long-term debt obligations ⁽¹⁾		72.8		33.8		38.6		0.5		—

Commitment fee on undrawn facility ⁽²⁾		19.9		4.6		13.8		1.5		—

Sponsor Credit Facility		—		—		—		69.6		—

Management and administrative services provided by Seadrill Management		10.0		2.0		4.0		4.0		—

Total		1,434.5		612.7		690.9		131.0		—

(1)	Our interest commitment on our long-term debt is calculated based on an assumed average U.S. Dollar 3 month LIBOR of 0.28% and taking into account the various applicable margin rates associated with each facility.

(2)	The $300 million revolving credit facility with Seadrill incurs a commitment fee on the undrawn balance of 2% per annum.

Quantitative and Qualitative Disclosures About Market Risk

We are exposed to various market risks, including interest rate, foreign currency exchange, retained risk and concentration of credit risks. We may enter into a variety of derivative instruments and contracts to maintain the desired level of exposure arising from these risks.

Interest Rate Risks

The Company’s exposure to interest rate risk relates mainly to its floating interest rate debt and balances of surplus funds placed with financial institutions. This exposure is managed through the use of interest rate swaps and other derivative arrangements. The Company’s objective is to obtain the most favorable interest rate borrowings available without increasing its foreign currency exposure. Surplus funds are generally placed in fixed deposits with reputable financial institutions, yielding higher returns than are available on overnight deposits in banks. Such deposits generally have short-term maturities, in order to provide the Company with flexibility to meet all requirements for working capital and capital investments. The extent to which the Company utilizes interest rate swaps derivatives to manage its interest rate risk is determined by the net debt exposure and its views on future interest rates.

As of June 30, 2013, we and our consolidated subsidiaries had entered into interest rate swap agreements with Seadrill for a combined outstanding principal amount of approximately $1,158.4 million at rates between 1.38% per annum and 0.739% per annum. The swap agreements mature between November 2017 and December 2022. The gain recognized on our interest rate swaps for the six months ended June 30, 2013, was $28.6 million. The interest rate swap agreements were entered in to by Seadrill Limited as Borrower.

As of June 30, 2013, our net exposure to floating interest rate fluctuations on our outstanding debt was $1,331.8 million, compared with $1,240.1 million as of June 30, 2012. An increase or decrease in short-term interest rates of 100 bps would thus increase or decrease, respectively, our interest expense by approximately $13.3 million on an annual basis as of June 30, 2013, as compared to $12.4 million in 2012.

The fair values of our interest rate swaps as of June 30, 2013 and 2012 were as follows:

June 30, 2013

June 30, 2012

(In millions of US dollars)

Outstanding

principal

Fair Value

Outstanding

Principal

Fair Value

Other current assets (liabilities)

1,158.4

27.3

—

For disclosure of the fair value of the derivatives and debt obligations outstanding as of June 30, 2013, please read Note 9 of the Consolidated and Combined Carve-Out Financial Statements included elsewhere in this Form 6-K.

Credit Risk

The Company has financial assets which expose the Company to credit risk arising from possible default by a counterparty. The Company considers the counterparties to be creditworthy and does not expect any significant loss to result from non-performance by such counterparties. The Company in the normal course of business does not demand collateral from its counterparties.

Foreign Currency Fluctuation Risks

OPCO and all of its subsidiaries use the U.S. Dollar as their functional currency because the majority of their revenues and expenses are denominated in U.S. Dollars. Accordingly, our reporting currency is also U.S. Dollars. We do, however, earn revenue and incur expenses in other currencies and there is a risk that currency fluctuations could have an adverse effect on the value of our cash flows. We are exposed to some extent in respect of the West Vencedor , which receives approximately 28% of its dayrate in Euros. In addition, we receive 10% of the West Capella ’s revenues in Nigerian Naira. There is a natural hedge of our exposure to Nigerian Naira as a portion of our operating costs are denominated in Nigerian Naira. A 10% appreciation or depreciation in the exchange rate of Euros against the U.S. Dollar would increase or decrease OPCO’s revenue by $2.2 million. Our foreign currency risk arises from:

•

the measurement of monetary assets and liabilities denominated in foreign currencies converted to US Dollars, with the resulting gain or loss recorded as “Foreign exchange gain/(loss)” ; and

•

the impact of fluctuations in exchange rates on the reported amounts of our revenues and expenses which are denominated in foreign currencies

We do not use foreign currency forward contracts.

Retained Risk

Physical Damage Insurance . Seadrill purchases hull and machinery insurance to cover for physical damage to its drilling rigs and charges us for the cost related to OPCO’s fleet.

We retain the risk for the deductibles relating to physical damage insurance on OPCO’s fleet. The deductible is currently a maximum of $5 million per occurrence.

Loss of Hire Insurance . Seadrill purchases insurance to cover for loss of revenue in the event of extensive downtime caused by physical damage to its drilling rigs, where such damage is covered under the Seadrill’s physical damage insurance, and charges us for the cost related to OPCO’s fleet.

The loss of hire insurance has a deductible period of 60 days after the occurrence of physical damage. Thereafter, insurance policies according to which OPCO is compensated for loss of revenue are limited to between 210 and 290 days. OPCO retains the risk related to loss of hire during the initial 60 day period, as well as any loss of hire exceeding the number of days permitted under insurance policy. Based on an overall risk assessment in 2013, Seadrill Management decided not to purchase loss of hire insurance for the T-15 . This means that if the T-15 is wholly or partially deprived of income as a consequence of damage, the loss of income will not be compensated by insurance.

Protection and Indemnity Insurance. Seadrill purchases protection and indemnity insurance and excess liability insurance for personal injury liability for crew claims, non-crew claims and third-party property damage including oil pollution from the drilling rigs to cover claims of up to $250 million per event and in the aggregate for the West Vencedor and T-15 and up to $500 million per event and in the aggregate for each of the West Aquarius , the West Capricorn and the West Capella .

OPCO retains the risk for the deductible of up to $0.5 million per occurrence relating to protection and indemnity insurance.

Concentration of Credit Risk

The market for OPCO’s services is the offshore oil and gas industry, and the customers consist primarily of major oil and gas companies, independent oil and gas producers and government-owned oil companies. Ongoing credit evaluations of our customers are performed and generally we do not require collateral in our business agreements. Reserves for potential credit losses are maintained when necessary.

IMPORTANT INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

This Report on Form 6-K for the six months ended June 30, 2013 contains certain forward-looking statements concerning future events and our operations, performance and financial condition. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain the words “believe”, “anticipate”, “expect”, “estimate”, “project”, “will be”, “will continue”, “will likely result”, “plan”, “intend” or words or phrases of similar meanings. These statements involve known and unknown risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond our control. Actual results may differ materially from those expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially include, but are not limited to:

•

our distribution policy and our ability to make cash distributions on our units or any increases in distributions;

•

our ability to integrate and realize the expected benefits from acquisitions, including the T-15 ;

•

our ability to borrow under the $300 million sponsor credit facility between OPCO, as borrower, and Seadrill, as lender;

•

future financial condition or results of operations and future revenues and expenses;

•

the repayment of debt;

•

expected compliance with financing agreements and the expected effect of restrictive covenants in such agreements;

•

the failure of OPCO’s drilling rigs to perform satisfactorily or to our expectations;

•

fluctuations in the international price of oil;

•

discoveries of new sources of oil that do not require deepwater drilling rigs;

•

the development of alternative sources of fuel and energy;

•

technological advances, including in production, refining and energy efficiency;

•

severe weather events and natural disasters;

•

our ability to meet any future capital expenditure requirements;

•

our ability to maintain operating expenses at adequate and profitable levels;

•

incurrence of cost overruns in the maintenance or other work performed on OPCO’s drilling rigs;

•

our ability to conduct and obtain investment for business activities involving U.S. sanctioned countries, entities and individuals;

•

our ability to leverage Seadrill’s relationship and reputation in the offshore drilling industry;

•

our ability to purchase drilling rigs, including from Seadrill in the future;

•

increasing our ownership interest in OPCO;

•

delay in payments by, or disputes with OPCO’s customers under its drilling contracts;

•

OPCO’s ability to comply with, maintain, renew or extend its existing drilling contracts;

•

OPCO’s ability to re-deploy its drilling rigs upon termination of its existing drilling contracts at profitable dayrates;

•

our ability to respond to new technological requirements in the areas in which we operate;

•

the occurrence of any accident involving OPCO’s drilling rigs or other drilling rigs in the industry;

•

changes in governmental regulations that affect us or OPCO and the interpretations of those regulations, particularly those that relate to environmental matters, export or import and economic sanctions or trade embargo matters, regulations applicable to the oil industry and tax and royalty legislation;

•

increased competition in the offshore drilling industry and other actions of competitors, including decisions to deploy drilling rigs in the areas in which OPCO currently operates;

•

the increased availability on a timely basis of drilling rigs, supplies, personnel and oil field services in the areas in which OPCO operates;

•

general economic, political and business conditions globally;

•

military operations, terrorist acts, wars or embargoes;

•

potential disruption of operations due to accidents, political events, piracy or acts by terrorists;

•

our or OPCO’s ability to obtain financing in sufficient amounts and on adequate terms;

•

workplace safety regulation and employee claims;

•

the cost and availability of adequate insurance coverage;

•

our incremental general and administrative expenses as a publicly traded limited liability company and our fees and expenses payable under the advisory, technical and administrative services agreements and the management and administrative services agreements;

•

the taxation of our company and distributions to our unitholders;

•

future sales of our units in the public market;

•

acquisitions and divestitures of assets and businesses by Seadrill; and

•

our business strategy and other plans and objectives for future operations.

All forward-looking statements included in this Report on Form 6-K are made only as of the date of this Report on Form 6-K. New factors emerge from time to time, and it is not possible for us to predict all of these factors. Further, we cannot assess the impact of each such factor on our business or the extent to which any factor, or combination of factors, may cause actual results to be materially different from those contained in any forward-looking statement. We do not intend to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations with respect thereto or any change in events, conditions or circumstances on which any such statement is based.

Seadrill Partners LLC

UNAUDITED CONSOLIDATED AND COMBINED CARVE-OUT STATEMENT OF OPERATIONS

for the six months ended June 30, 2013 and 2012

(In US$ millions)


	Six months ended June 30,
	2013			2012

Operating revenues
Contract revenues	$	320.1		$	262.0
Reimbursable revenues		7.7			4.5
Other revenues		5.2			8.5

Total operating revenues		333.0			275.0


Operating expenses
Vessel and rig operating expenses		123.5			88.7
Reimbursable expenses		7.3			4.1
Depreciation and amortization		43.9			30.9
General and administrative expenses		12.0			13.8

Total operating expenses		186.7			137.5


Net operating income		146.3			137.5

Financial items
Interest income		1.4			1.2
Interest expenses		(24.8	)		(17.9	)
Gain/ (loss) on derivative financial instruments		28.6			(10.5	)
Foreign currency exchange loss		(1.0	)		(1.4	)

Total financial items		4.2			(28.6	)


Income before income taxes		150.5			108.9

Income taxes		(12.0	)		(15.8	)

Net income	$	138.5		$	93.1


Net income attributable to Seadrill Partners LLC members	$	41.9		$	93.1
Net income attributable to the non-controlling interest	$	96.6			—

Earnings per unit (basic and diluted)
Common unitholders	$	0.99			—
Subordinated unitholders	$	0.99			—

A Statement of Other Comprehensive Income has not been presented as there are no items recognised in other comprehensive income.

See accompanying notes that are an integral part of these Consolidated and Combined Carve-Out Financial Statements.

F-1

Seadrill Partners LLC

UNAUDITED CONSOLIDATED AND COMBINED CARVE-OUT BALANCE SHEET

as of June 30, 2013 and December 31, 2012

(In US$ millions)


	June 30, 2013		December 31, 2012

ASSETS
Current assets
Cash and cash equivalents	$	50.0	$	19.5
Accounts receivables, net		181.5		134.1
Mobilization revenue receivable – short-term		16.3		13.6
Amount due from related party		31.4		39.6
Other current assets		11.2		34.5

Total current assets		290.4		241.3


Non-current assets
Newbuildings		131.4		112.0
Drilling units		2,075.2		2,103.0
Mobilization revenue receivable – long-term		52.3		49.4
Deferred tax assets		0.6		0.6
Other non-current assets		5.6		9.2

Total non-current assets		2,265.1		2,274.2

Total assets	$	2,555.5	$	2,515.5


LIABILITIES AND MEMBERS’ CAPITAL/OWNER’S AND DROPDOWN COMPANIES’ EQUITY
Current liabilities
Current portion of long-term related party payable		572.3		235.6
Related party revolving credit facility		69.6		—
Trade accounts payable and accruals		21.4		28.3
Deferred mobilization revenue – short-term		18.8		19.9
Related party payable		92.4		122.2
Other current liabilities		26.2		27.3

Total current liabilities		800.7		433.3


Non-current liabilities
Long-term related party payable		689.9		1,057.1
Deferred mobilization revenue – long-term		37.1		41.1
Other non-current liabilities		—		0.4

Total non-current liabilities		727.0		1,098.6


Equity
Dropdown companies’ equity		—		8.7
Members’ Capital:
Common unitholders (24,815,025 units issued and outstanding)		195.1		208.2
Subordinated unitholders (16,543,350 units issued and outstanding)		80.9		89.6
Total Members’ capital/Owner’s and Dropdown Companies’ equity		276.0		306.5
Non-controlling interest		751.8		677.1

Total equity		1,027.8		983.6

Total liabilities and equity	$	2,555.5	$	2,515.5

See accompanying notes that are an integral part of these Consolidated and Combined Carve-Out Financial Statements.

F-2

Seadrill Partners LLC

UNAUDITED CONSOLIDATED AND COMBINED CARVE-OUT STATEMENT OF CASH FLOWS

for the six months ended June 30, 2013 and 2012

(In US$ millions)


	Six months ended June 30,
	2013			2012

Cash Flows from Operating Activities
Net income	$	138.5		$	93.1
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		43.9			30.9
Amortization of deferred loan charges		3.2			3.1
Amortization of mobilization revenue		(10.0	)		(6.6	)
Unrealized (gain)/ loss related to derivative financial instruments		(28.6	)		10.5
Payment for long term maintenance		—			(1.0	)
Deferred income tax expense (benefit)		0.1			0.1

Changes in operating assets and liabilities, net of effect of acquisitions
Mobilization fees received from customers		4.6			41.4
Trade accounts receivable		(47.5	)		(52.0	)
Mobilization revenue receivable		(5.6	)		(41.3	)
Trade accounts payable		(6.8	)		(0.4	)
Related party payables		7.2			—
Other assets		23.7			15.0
Other liabilities		(1.6	)		3.4

Net cash provided by operating activities	$	121.1		$	96.2


Cash Flows from Investing Activities
Additions to newbuildings and rigs	$	(35.0	)	$	(68.0	)

Net cash used in investing activities	$	(35.0	)	$	(68.0	)


Cash Flows from Financing Activities
Proceeds from long term debt related party		109.5			—
Repayments of debt		(170.1	)		(90.4	)
Debt fees paid		(0.3	)		—
Proceeds from related party loans		99.6			—
Cash Distributions		(50.0	)		—
Distribution to Seadrill Limited for the acquisition of Tender rig T-15		(76.1	)		—
Owner’s funding (paid)/received		31.8			48.1

Net cash used in financing activities	$	(55.6	)	$	(42.3	)


Net increase/(decrease) in cash and cash equivalents		30.5			(14.1	)
Cash and cash equivalents at beginning of the period		19.5			15.3

Cash and cash equivalents at the end of period	$	50.0		$	1.2


Supplementary disclosure of cash flow information
Interest paid, net of capitalized interest	$	28.4		$	14.7
Taxes paid	$	15.2		$	4.9

See accompanying notes that are an integral part of these Consolidated and Combined Carve-Out Financial Statements.

F-3

Seadrill Partners LLC

UNAUDITED CONSOLIDATED AND COMBINED CARVE-OUT STATEMENT OF CHANGES MEMBERS’ CAPITAL/OWNER’S AND DROPDOWN COMPANIES EQUITY

for the six months ended June 30, 2013 and 2012, and the six months ended December 31, 2012

(In US$ millions)


	Dropdown Companies’ Equity					Members’ Capital								Total before Non- Controlling interest			Non- Controlling interest			Total Members’ Capital/ Owner’s Equity
	Dropdown Companies’ Equity			Owner’s Equity		Common Units			Subordinated Unit			Seadrill Member		Total before Non- Controlling interest			Non- Controlling interest			Total Members’ Capital/ Owner’s Equity
Combined balance as at December 31, 2011	$	22.2		$	793.0		—			—			—	$	815.2			—		$	815.2

Combined carve-out net income (January 1 to June 30)		(0.7	)		93.9		—			—			—		93.2			—			93.2
Movement in invested equity		11.0			47.5		—			—			—		58.5			—			58.5

Combined balance as at June 30, 2012	$	32.5		$	934.4		—			—			—	$	966.9			—		$	966.9
Consolidated Balance at December 31, 2012	$	8.7			—	$	208.2		$	89.6			—	$	306.5		$	677.1		$	983.6
Elimination of dropdown equity		(8.7	)		—		—			—			—		(8.7	)		—			(8.7	)
Allocation of (2) net assets acquired T-15		—			—		(45.7	)		(30.4	)		—		(76.1	)		—			(76.1	)

Forgiveness of related party payables		—			—		24.3			16.2			—		40.5			—			40.5
Net income (1)		—			—		25.1			16.8			—		41.9			96.6			138.5

Cash Distributions paid		—			—		(16.8	)		(11.3	)		—		(28.1	)		(21.9	)		(50.0	)
Consolidated Balance as at June 30, 2013		—			—	$	195.1		$	80.9			—	$	276.0		$	751.8		$	1,027.8

(1)	The Dropdown Companies’ net loss from January 1 to May 17, 2013 (pre-dropdown) amounted to $1.6 million. The post acquisition net profit (from May 18, 2013 to June 30, 2013) relating to the T-15 in the quarter ended June 30, 2013 was $0.3 million.

(2)

The excess of the purchase consideration of $210.0 million over the $133.9 million book value of assets acquired has been accounted for as an equity distribution of $76.1 million to Seadrill Ltd. in accordance with the accounting rules for reorganization of entities under common control. Refer to Note 1.

See accompanying notes that are an integral part of these Consolidated and Combined Carve-Out Financial Statements.

F-4

Seadrill Partners LLC

NOTES TO CONSOLIDATED AND COMBINED CARVE-OUT FINANCIAL STATEMENTS

(Unaudited)

Note 1 – General information

Background and Formation

On June 28, 2012, Seadrill Limited (“Seadrill” or the “Parent”) formed Seadrill Partners LLC (“Seadrill Partners,” the “Company,” “our,” “we,” “us”) under the laws of the Republic of the Marshall Islands as part of its strategy for the Company to acquire, in connection with the Company’s proposed initial public offering of its common units (the “IPO”), a 30% limited partner interest and non-economic general partner interest in Seadrill Operating LP, a Marshall Islands limited partnership and a 51% limited liability company interest in Seadrill Capricorn Holdings LLC, a Marshall Islands limited liability company.

On October 24th, 2012, Seadrill and its subsidiaries transferred (i) Seadrill Operating LP, (a) a 100% interest in the entities that own and operate the West Aquarius and the West Vencedor , and (b) an approximate 56% interest in the entity that owns and operates the West Capella and (ii) Seadrill Capricorn Holdings LLC, a 100% interest in the entities that own and operate the West Capricorn , which we collectively refer to as “OPCO’s Initial Fleet.”

On October 24th, 2012 the Company completed its IPO of 10,062,500 common units representing limited liability company interests in the Company (including 1,312,500 common units issued in connection with the exercise of the over-allotment option). The Company is listed on the New York stock exchange (“NYSE”) under the symbol “SDLP”. Upon completion of the offering, Seadrill owned 14,752,525 common units and 16,543,350 subordinated units which represent approximately 75.7% of the limited liability company interests in Seadrill Partners. Seadrill Partners’ only cash generating assets are its ownership interest in Seadrill Operating LP and Seadrill Capricorn Holdings LLC (collectively, “OPCO”). OPCO’s fleet consists of two ultra-deepwater semi-submersible rigs (the West Aquarius and the West Capricorn ), one ultra-deepwater drillship (the West Capella ), and one semi-tender rig (the West Vencedor ), all of which operate under long-term contracts.

On May 17, 2013, our wholly owned subsidiary, Seadrill Partners Operating LLC, acquired from Seadrill a 100% ownership interests in the entities that own and operate the tender rig T-15 . This transaction was deemed to be a reorganization of entities under common control. As a result, the Company’s financial statements have been retroactively adjusted in accordance with United States Generally Accepted Accounting Principles (“US GAAP”) as if Seadrill Partners had acquired the entities that own and operate the T-15 for the entire period that the entities have been under the common control of Seadrill Limited. The retroactively adjusted Consolidated and Combined Carve-Out Financial Statements of Seadrill Partners as of and for the years ended December 31, 2011 and 2012 are attached as Exhibit 99.1 to the Current Report on Form 6-K filed with the Securities and Exchange Commission on September 30, 2013 (the “Restatement 6-K”).

Seadrill Operating LP, Seadrill Capricorn Holdings LLC and Seadrill Partners Operating LLC are collectively referred to as “OPCO”.

Basis of consolidation and presentation

The unaudited interim consolidated and combined carve-out financial statements are presented in accordance with US GAAP. The amounts are presented in United States dollar (US dollar) rounded to the nearest hundred thousand, unless stated otherwise.

The unaudited interim consolidated and combined carve-out financial statements do not include all of the disclosures required in complete annual financial statements. These interim financial statements should be read in conjunction with our retroactively adjusted annual Consolidated and Combined Carve-Out Financial Statements as at December 31, 2012 included in the Restatement 6-K (our “audited 2012 financial statements”). The year-end balance sheet data was derived from our audited 2012 financial statements, but does not include all disclosures required by US GAAP. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement have been included.

F-5

As of October 24, 2012, the financial statements of Seadrill Partners LLC (“the Company”) as a separate legal entity are presented on a consolidated basis. For periods prior to October 24, 2012, the results of operations and balance sheet have been carved out of the consolidated financial statements of Seadrill Limited and therefore are presented on a combined carve-out basis. The combined entity’s historical combined financial statements include assets, liabilities, revenues, expenses and cash flows directly attributable to the Company’s interests in the four rigs in OPCO’s Initial Fleet. Accordingly, the unaudited historical combined carve-out interim financial statements prior to October 24, 2012 reflect allocations of certain administrative and other expenses, including share options and pension costs, mark-to-market valuations of interest rate and foreign currency swap derivatives. The basis for the allocations are described in note 1 of the retroactively adjusted audited consolidated and combined carve-out financial statements for the year ended December 31, 2012 filed as an exhibit to the Restatement 6-K with the U.S. Securities and Exchange Commission. These allocated costs have been accounted for as an equity contribution in the combined consolidated balance sheets.

On May 17, 2013, the Company acquired from Seadrill the ownership interests in entities that own and operate the Tender Rig T-15 . This transaction was considered a business combination and accounted for as a reorganization of entities under common control. As a result the Company’s balance sheets, statements of operations, cash flows and changes in members’ capital/ owners’ equity and related notes have been retroactively adjusted to include the Tender Rig T-15 , as if the Company had owned the entities that own and operate the Tender Rig T-15 when the vessel commenced construction. The excess of the consideration paid by the Company over Seadrill’s historical cost is accounted for as a change in equity to Seadrill. The effect of adjusting the Company’s financial statements to account for this common control transaction impacted the following line items by:


(in US$ millions)	December 31, 2012
Newbuildings		112.0
Other assets		1.4
Total Assets		113.4
Long-term related party payable		(100.5	)
Other liabilities		(4.2	)
Total Liabilities		(104.7	)
Equity		(8.7	)

Net income for the six months ended June 30, 2012, decreased by $0.7 million. The effect on the consolidated and combined carve-out statement of cash flows is as follows:

•

Decrease of $1.9 million to $96.2 million compared to $98.1 million attributable to net cash provided by operating activities,

•

Decrease of $10.9 million to $(68.0) million compared to $(57.1) million attributable to net cash used in investing activities.

•

Increase of $11.1 million to $(42.3) million compared to $(53.4) million attributable to net cash provided (used in)/by financing activities.

•

Overall a net increase in cash and cash equivalents of $1.7 million to $1.2 million from $2.9 million.

Significant accounting policies

The accounting policies adopted in the preparation of the unaudited interim financial statements are consistent with those followed in the preparation of our annual audited consolidated financial statements for the year ended December 31, 2012, unless otherwise included in these unaudited interim financial statements as separate disclosures.

Business combinations between entities under common control

Reorganization of entities under common control is accounted for similar to the pooling of interests method of accounting. Under this method, the carrying amount of net assets recognized in the balance sheets of each combining entity are carried forward to the balance sheet of the combined entity, and no other assets or liabilities are recognized as a result of the combination. The excess of the proceeds paid, if any, over the historical cost of the

F-6

combining entity is accounted for as a change in equity. In addition re-organization of entities under common control is accounted for as if the transfer occurred from the date that both the combining entity and combined entity were both under the common control of Seadrill. Therefore, the Company’s financial statements prior to the date the interests in the combining entity were actually acquired are retroactively adjusted to include the results of the combined entities during the periods it was under common control of Seadrill.

Note 2 – Recent Accounting Pronouncements

Recently Adopted Accounting Standards

Accounting Standards Update (“ASU”) No. 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities – Effective January 1, 2013, we adopted the accounting standards update that expands the disclosure requirements for the offsetting of assets and liabilities related to certain financial instruments and derivative instruments. The update requires disclosures to present both gross information and net information for financial instruments and derivative instruments that are eligible for net presentation due to a right of offset, an enforceable master netting arrangement or similar agreement. The update is effective for interim and annual periods beginning on or after January 1, 2013. The adoption did not have an effect on our interim consolidated financial statements.

Note 3 – Segment information

Operating segments

The Company’s fleet is regarded as one single global segment, and is reviewed by the Chief Operating Decision Maker as an aggregated sum of assets, liabilities and activities generating distributable cash to meet minimum quarterly distributions.

A breakdown of the Company’s revenues by customer for the six months ended June 30, 2013, and 2012 are follows:

Contract revenue split by customer


(In US$ millions)	Six months ended June 30,
	2013			2012

ExxonMobil		30	%		43	%
Total		32	%		39	%
Chevron		13	%		16	%
BP		25	%		2	%

Total		100	%		100	%

F-7

Geographic Data

Revenues are attributed to geographical areas based on the country of operations for drilling activities, i.e. the country where the revenues are generated. The following presents the revenues and fixed assets by geographic area:

Revenues


(In US$ millions)	Six months ended June 30,
	2013		2012

Nigeria	$	107.2	$	110.9
China		—		80.1
Angola		42.9		43.3
Vietnam		—		32.3
Canada		100.9		—
United States		82.0		7.3
Other		—		1.1

Total	$	333.0	$	275.0

Asset location at the end of the period is not necessarily indicative of the geographic distribution of the revenues or operating profits generated by such assets during the period.

As of June 30, 2013 and June 30, 2012 the drilling rigs were located as follows:

Fixed Assets – Drilling units


(In US$ millions)	June 30, 2013		December 31, 2012

Nigeria	$	544.8	$	553.9
Angola		186.0		194.3
Canada		543.0		545.7
United States		801.4		809.1

Total	$	2,075.2	$	2,103.0

Note 4 – Taxation

Income taxes consist of the following:


(In US$ millions)	Six months ended June 30,
	2013			2012

Current tax expense:	$			$
United Kingdom		—			—
Angola		2.1			2.2
Canada		1.7			(0.8	)
China		—			5.4
Hungary		0.6			—
Nigeria		6.2			6.3
Norway		—			2.6
United States of America		1.5			—
Other		0.2			—

Total current tax expense		12.3			15.7


Deferred tax expense:
Angola		0.1			0.1
Canada		(0.1	)		—
Nigeria		—			—
United States of America		(0.3	)		—

Total income tax expense	$	12.0		$	15.8

F-8

Seadrill Partners is tax resident in the United Kingdom. Our controlled affiliates operate and earn income in several countries and are subject to the laws of taxation within those countries. Currently none of our controlled affiliates operate in the United Kingdom and therefore we are not subject to U.K. tax. Subject to changes in the jurisdictions in which our drilling rigs operate and/or owned, differences in levels of income and changes in tax laws, our effective income tax rate may vary substantially from one reporting period to another. Our effective income tax rate for each of the three and six month periods ended June 30, 2013 and 2012 are as follows:

Effective tax rate


(In US$ millions)	Six months ended June 30,
	2013			2012

United Kingdom statutory income tax rate		23.2	%		24.5	%
Effect of other tax jurisdictions		(15.2	%)		(10.1	%)

Effective income tax rate		8.0	%		14.4	%

Deferred taxes

The net deferred tax assets consist of the following:


(In US$ millions)	June 30, 2013		December 31, 2012

Deferred mobilization revenue	$	0.6	$	0.6

Total deferred tax assets	$	0.6	$	0.6

The net deferred tax liabilities consist of the following:


(In US$ millions)	June 30, 2013		December 31, 2012

Provisions	$	0.3	$	—

Total deferred tax liability	$	0.3	$	—

Note 5 – Acquisition of entities under common control

On May 17, 2013 the Company acquired a 100% interest in the companies that own and operate the tender rig T-15 from Seadrill. The purchase consideration was US$210 million. As part of the transaction the Company entered into a new related party loan agreement with Seadrill relating to its existing $440 million credit facility, corresponding to the $100.5 million tranche relating to the T-15 . In addition the Company entered into a new related party loan agreement with Seadrill for $109.5 million. Refer to Note 8.

The acquisition has been accounted for as a transaction between entities under common control. The net assets acquired are recorded at the historic book value of Seadrill. The excess of the purchase price over the book value of net assets acquired of $76.1 million has been recorded as a reduction of equity, as set forth in the table below: The details of the transaction are as follows:


(In US $ millions)
Purchase price	$	210.0
Rig historic book value		133.9

Total value of net assets acquired		(133.9	)

Excess amount recorded as a reduction of equity		76.1

F-9

Note 6 – Newbuildings


(In US$ millions)	June 30, 2013		December 31, 2012

Opening balance at the beginning of the period	$	112.0	$	788.9
Additions		17.3		131.7
Capitalized interest and loan related costs		2.1		13.0
Re-classified as drilling units		—		(821.6	)
Closing balance at the end of the period	$	131.4	$	112.0

December 31, 2012 newbuildings has been retroactively adjusted for the impact of the acquisition of the tender rig T-15 to include $24.4 million in the opening balance, $87.5 million of additions, and $0.1 capitalized interest.

Note 7 – Drilling units


(In US$ millions)	June 30, 2013			December 31, 2012

Cost	$	2,306.7		$	2,297.0
Accumulated depreciation		(231.5	)		(194.0	)

Net book value	$	2,075.2		$	2,103.0

The depreciation expense was $43.9 million and $30.9 million for the six months, and $22.3 million and $16.6 million for the three months ended June 30, 2013 and 2012, respectively.

Note 8 – Long-term interest bearing debt and interest expenses

For each of the Rig Financing Agreements, the Company has entered into loan agreements with Seadrill, and these related party loan agreements are classified as related party transactions, under which the Company makes principal and interest payments directly to Seadrill, corresponding to that proportion of the loan relating to the West Capella , West Aquarius , West Vencedor , West Capricorn , and the T-15 .

As of June 30, 2013 and December 31, 2012, the Company had the following amounts outstanding under credit facilities:


(In US$ millions)	June 30, 2013			December 31, 2012

Credit facilities:
US$1,500 facility (June 2014)	$	490.8		$	572.6
US$1,200 facility (June 2015)		98.8			111.1
US$109.5 vendor financing facility (May 2016)		109.5			—
US$550 facility (December 2016)		467.6			508.5
US$440 facility (December 2017)		95.5			100.5

Total interest bearing debt	$	1,262.2		$	1,292.7

Less: current portion		(572.3	)		(235.6	)

Long-term portion of interest bearing debt	$	689.9		$	1,057.1

F-10

The December 31, 2012 balance has been retroactively adjusted for the impact of the acquisition of the tender rig T-15 to include the $100.5 million in the opening balance on the $440 million credit facility. As at December 31, 2012 the short term portion of this facility was $10.1 million.

The outstanding debt as of June 30, 2013 is repayable as follows:


(In US$ millions)	As at June 30,

Twelve months ended June 30, 2014	$	572.3
Twelve months ended June 30, 2015		147.4
Twelve months ended June 30, 2016		174.5
Twelve months ended June 30, 2017		312.6
Twelve months ended June 30, 2018 and thereafter		55.4

Total interest bearing debt	$	1,262.2

On May 17, 2013, as part of the acquisition of the T-15 tender rig, the Company assumed the associated outstanding debt of $100.5 million on a back to back basis with Seadrill. This is part of the existing $440 million facility that Seadrill has entered into with a syndicate of banks. The facility bears interest of 3 month LIBOR plus a margin of 3.25% and matures in December 2017.

In addition, on May 17, 2013, a further $109.5 million was borrowed as vendor financing from Seadrill. The facility bears interest of LIBOR plus a margin of 5.00% and matures in May 2016.

Note 9 – Risk management and financial instruments

The majority of our gross earnings from rigs and vessels are receivable in US dollars and the majority of our other transactions, assets and liabilities are denominated in US dollars, the functional currency of the Company. However, the Company has operations and assets in a number of countries worldwide and incurs expenditures in other currencies, causing its results from operations to be affected by fluctuations in currency exchange rates, primarily relative to the US dollar. The Company is also exposed to changes in interest rates on floating interest rate debt. There is thus a risk that currency and interest rate fluctuations will have a negative effect on the value of the Company’s cash flows.

Interest rate risk management

Interest rate swap agreements not qualified for hedge accounting

At June 30, 2013 we had interest rate swap agreements with an outstanding principal of US$1,158.4 million (December 31, 2012: US$1,128.0 million). These agreements do not qualify for hedge accounting and accordingly any changes in the fair values of the swap agreements are included in the Consolidated and Combined Carve-out Statement of Operations under “(Loss)/gain on derivative financial instruments”. The total fair value of the interest

F-11

rate swaps outstanding at June 30, 2013 amounted to an asset of US$27.3 million (December 31, 2012: a liability of US$5.9 million). The fair value of the interest rate swaps are classified as other current assets/liabilities in the balance sheet. The gain recognized for the six months to June 30, 2013 was $28.6 million (six months to June 30, 2012: loss of $10.5 million).

The Company’s interest rate swap agreements as at June 30, 2013, were as follows:


Outstanding principal	Receive rate		Pay rate			Length of contract
(In US$ millions)
265.9 *		3 month LIBOR		1.11	%	Oct 2012 – Dec 2019
265.9 *		3 month LIBOR		1.38	%	Oct 2012 – Dec 2022
100.0		3 month LIBOR		1.36	%	Oct 2012 – Oct 2019
231.1 *		3 month LIBOR		0.74	%	Nov 2012 – Nov 2017
200.0		3 month LIBOR		1.36	%	Oct 2012 – Oct 2019
95.5 *		3 month LIBOR		1.11	%	May 2013 – Jun 2020

*	The outstanding principal of these amortizing swaps falls with each capital repayment of the underlying loans

The counterparty to the above agreements is Seadrill.

Credit risk

The Company has financial assets which expose the Company to credit risk arising from possible default by counterparties. The Company considers the counterparties to be creditworthy and does not expect any significant loss to result from non-performance by such counterparties. The Company in the normal course of business does not demand collateral from its counterparties.

Fair values of financial instruments

The carrying value and estimated fair value of the Company’s financial instruments at June 30, 2013 and December 31, 2012 were as follows:


	June 30, 2013				December 31, 2012
(In US$ millions)	Fair value		Carrying value		Fair value		Carrying value

Cash and cash equivalents	$	50.0	$	50.0	$	19.5	$	19.5
Revolving credit facility		69.6		69.6		—		—
Current portion of long term debt to related party		572.2		572.2		235.6		235.6
Long-term portion of interest bearing debt to related party		689.9		689.9		1,057.1		1,057.1

The carrying value of cash and cash equivalents, which are highly liquid, is a reasonable estimate of fair value and categorized at level 1 on the fair value measurement hierarchy.

The fair values of the revolving credit facility and the current and long-term portions of floating rate debt are estimated to be equal to the carrying value since it bears variable interest rates, which are reset on a quarterly basis. This debt is not freely tradable and cannot be purchased by the Company at prices other than the outstanding balance plus accrued interest. We have categorized at level 2 on the fair value measurement hierarchy.

F-12

Other financial instruments that are measured at fair value on a recurring basis are as follows:

Fair value

Fair value measurements
at reporting date using

(In US$ millions)

June 30,
2013

Quoted Prices in
Active Markets
for Identical
Assets

(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs

(Level 3)

Assets:

Derivative instruments – Interest rate swap contracts

27.3

—

27.3

—

Fair value

Fair value measurements

at reporting date using

(In US$ millions)

December 31,
2012

Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Liabilities:

Derivative instruments – Interest rate swap contracts

5.9

—

5.9

—

Accounting Standards Codification (“ASC”) Topic 820 Fair Value Measurement and Disclosures emphasizes that fair value is a market-based measurement, not an entity-specific measurement, and should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, ASC Topic 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within levels one and two of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within level three of the hierarchy).

Level one input utilizes unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Level two inputs are inputs other than quoted prices included in level one that are observable for the asset or liability, either directly or indirectly. Level two inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability, other than quoted prices, such as interest rates, foreign exchange rates and yield curves that are observable at commonly quoted intervals. Level three inputs are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

The fair values of interest rate swaps and forward exchange contracts are calculated using well-established independent valuation techniques applied to contracted cash flows and LIBOR interest rates as of June 30, 2013.

Retained risk

a) Physical Damage Insurance

Seadrill purchases hull and machinery insurance to cover for physical damage to its drilling rigs and charges us for the cost related to OPCO’s fleet.

We retain the risk for the deductibles relating to physical damage insurance on OPCO’s fleet. The deductible is currently a maximum of $5 million per occurrence.

F-13

b) Loss of Hire Insurance

Seadrill purchases insurance to cover for loss of revenue in the event of extensive downtime caused by physical damage to its drilling rigs, where such damage is covered under the Seadrill’s physical damage insurance, and charges us for the cost related to OPCO’s fleet.

The loss of hire insurance has a deductible period of 60 days after the occurrence of physical damage. Thereafter, insurance policies according to which OPCO is compensated for loss of revenue are limited to between 210 and 290 days. OPCO retains the risk related to loss of hire during the initial 60 day period, as well as any loss of hire exceeding the number of days permitted under insurance policy. Based on an overall risk assessment in 2011, Seadrill Management decided not to purchase loss of hire insurance for the tender barge T-15 . This means that if the T-15 is wholly or partially deprived of income as a consequence of damage, the loss of income will not be compensated by insurance.

For OPCO’s fleet, Seadrill purchases protection and indemnity insurance and excess liability insurance for personal injury liability for crew claims, non-crew claims and third-party property damage including oil pollution from the drilling rigs to cover claims of up to $250 million per event and in the aggregate for the West Vencedor and T-15 and up to $500 million per event and in the aggregate for each of the West Aquarius, the West Capricorn and the West Capella .

OPCO retains the risk for the deductible of up to $0.5 million per occurrence relating to protection and indemnity insurance.

Concentration of Risk

There is a concentration of credit risk with respect to cash and cash equivalents as most of the amounts are deposited with Nordea Bank Finland Plc and Danske Bank A/S. The Company considers these risks to be remote.

In the six months ended June 30, 2013 and 2012, 30% and 43% of the Company’s contract revenues were received from ExxonMobil Corporation (“Exxon”), 32% and 39% respectively, from Total S.A. (“Total”), and 13% and 16% respectively from Chevron Corporation (“Chevron”), and 25% and 2% respectively, from British Petroleum (“BP”). There is thus a concentration of revenue risk towards Exxon, Total, Chevron and BP.

Note 10 – Related party transactions

Seadrill has charged the Company for the provision of technical and commercial management of the drilling rigs, as well as, a share of Seadrill’s general and administrative costs. Amounts charged to the Company for the six months ended June 30, 2013 and 2012 were $24.2 million and $55.5 million respectively.

Net expenses (income) from related parties:


(In US$ millions)	Six months ended June 30,
	2013			2012

Management and administrative fees (a) and (b)	$	12.7		$	12.5
Rig operating costs (c)		10.0			11.4
Insurance premiums (d)		4.0			6.7
Interest expense (e)		24.2			14.8
Commitment fee (f)		2.4			—
Derivative (gains) / losses (e)		(28.6	)		10.5

West Aquarius bareboat charter (h)		4.0			—

Other revenues due to West Polaris (i)		(5.3	)		(8.5	)
Operating expenses for West Polaris (i)		5.0			8.1

Total	$	24.2		$	55.5

F-14

Receivables (payables) from related parties:


(In US$ millions)	June 30, 2013			December 31, 2012

Trading balances due from Seadrill and subsidiaries (j)	$	31.4		$	39.6
Trading balances due to Seadrill and subsidiaries (j)		(92.4	)		(122.2	)
Revolving credit facility with Seadrill (f)		(69.6	)		—
Rig financing agreements with Seadrill (g)		(1,262.2	)		(1,292.7	)

(a) Management and administrative service agreement – the Company entered into a management and administrative services agreement with Seadrill Management, a wholly owned subsidiary of Seadrill, pursuant to which Seadrill Management will provide to the Company certain management and administrative services. The services provided by Seadrill Management are charged at cost plus management fee equal to 5% of Seadrill Management’s costs and expenses incurred in connection with providing these services. The agreement has an initial term for five years and can be terminated by provided 90 days written notice.

(b) Technical and administrative service agreement – the Company entered into certain advisory, technical and/or administrative services agreements with subsidiaries of Seadrill. The services provided by Seadrill’s subsidiaries are charged at cost plus service fee equal to 5% of Seadrill’s costs and expenses incurred in connection with providing these services.

(d) Insurance premiums – the Company’s drilling rigs are insured by a Seadrill Group company and the insurance premiums incurred are recharged to the Company.

(e) Interest expense and loss on derivatives – prior to entering the Rig Financing agreements these costs were allocated to the Company from Seadrill Ltd based on the Company’s debt as a percentage of Seadrill’s overall debt. Upon entering the Rig Financing agreements with Seadrill Limited, the costs and expenses have been incurred by the Company.

(f) $300 million revolving credit facility –The Company entered into a $300 million revolving credit facility with Seadrill. The facility is for a term of five years and bears interest at a rate of LIBOR plus 5% per annum, with an annual 2% commitment fee on the undrawn balance.

(g) Rig financing agreement – In September 2012, each of the rig owning subsidiaries of the Company, entered into related party loan agreements with Seadrill in the amount of approximately $522.5 million, $115.2 million, $304.6 million and $295.3 million corresponding to the aggregate principal amount outstanding under the rig facilities allocable to the West Capricorn , the West Vencedor , the West Aquarius and the West Capella , respectively. On May 17, 2013, the Company entered into a new related party loan agreement with Seadrill relating to the T-15 for $100.5 million tranche of Seadrill’s existing $440 million facility. Under the agreement each rig owning subsidiary makes payments of principal and interest directly to Seadrill under each Rig Facility, corresponding to payments of principal and interest due under each Rig Facility that are allocable to the West Capricorn , the West Vencedor , the West Aquarius , the West Capella and the T-15 . Refer to Note 8 for more information. The December 31, 2012 balance has been retroactively adjusted to include the impact of the T-15 .

F-15

(h) Other revenues and expenses – During the six months ended June 30, 2013, we earned other revenues within our Nigerian service company of $5.3 million (six months ended June 30, 2012: $8.5 million) relating to certain services, including the provision of onshore and offshore personnel, which we provided to Seadrill’s West Polaris drilling rig that was operating in Nigeria during that period. Related operating expenses were $5.0 million (six months ended June 30, 2012: $8.1 million).

(i) West Aquarius bareboat charter – In connection with the transfer of the West Aquarius operations to Canada, the West Aquarius drilling contract was assigned to Seadrill Canada Ltd., a wholly owned subsidiary of OPCO, necessitating certain changes to the related party contractual arrangements relating to the West Aquarius . Seadrill China Operations Ltd, the owner of the West Aquarius and a wholly-owned subsidiary of OPCO, had previously entered into a bareboat charter arrangement with Seadrill Offshore AS, a wholly-owned subsidiary of Seadrill, providing Seadrill Offshore AS with the right to use the West Aquarius . In October 2012, this bareboat charter arrangement was replaced with a new bareboat charter between Seadrill China Operations Ltd and Seadrill Offshore AS, and at the same time, Seadrill Offshore AS entered into a bareboat charter arrangement providing Seadrill Canada Ltd. with the right to use the West Aquarius in order to perform its obligations under the drilling contract described above. For the six months ended June 30, 2013, the net effect to OPCO is an expense of $4.0 million.

(j) Trading balances – Receivables and payables with Seadrill and its subsidiaries are comprised primarily of unpaid management fees, advisory and administrative services, as well as, accrued interest. In addition, certain receivables and payables arise when the Company pays an invoice on behalf of a related party and vice versa. Receivables and payables are generally settled quarterly in arrears. Trading balances to Seadrill and its subsidiaries are unsecured, interest free and intended to be settled in the ordinary course of business.

T-15 Loan Agreement

On May 17, 2013, Seadrill Partners Operating LLC entered into a $109.5 million loan agreement with Seadrill as the lender to finance the acquisition of the T-15 (the “T-15 loan agreement”). The T-15 loan agreement bears interest at a rate of LIBOR plus 5% and matures in May 2016.

Amendment to Contribution and Sale Agreement

As of June 30, 2013, the Company and certain of its subsidiaries entered into an agreement with Seadrill and certain of its subsidiaries to amend the Contribution and Sale Agreement that was entered into with Seadrill at the time of the IPO in October 2012 to convert certain intercompany payables to equity. Pursuant to that amendment, as of June 30, 2013, our accounts and those of Seadrill were adjusted to reflect a net capital contribution in the amount of $20.0 million by Seadrill to Seadrill Operating LP and a net capital contribution in the amount of $20.5 million by Seadrill to Seadrill Capricorn Holdings LLC. No additional units were issued to Seadrill in connection with either of these contributions.

Purchase options

Under the omnibus agreement signed on October 24, 2012, the Company has the right to purchase the T-16 tender rig from Seadrill at the purchase price to be agreed between Seadrill and the Company, at any time within 24 months after the acceptance by its charterers. If the Company and Seadrill are unable to agree upon the purchase price of T-16, its respective fair market value will be determined by a mutually acceptable third party.

Indemnifications and guarantees

Tax indemnifications

Under the Omnibus Agreement, Seadrill has agreed to indemnify the Company against any tax liabilities arising from the operation of the assets contributed or sold to the Company prior to the time they were contributed or sold.

F-16

Environmental and other indemnifications

Under the Omnibus Agreement, Seadrill has agreed to indemnify the Company for a period of five years against certain environmental and toxic tort liabilities with respect to the assets that Seadrill contributed or sold to the Company to the extent arising prior to the time they were contributed or sold. However, claims are subject to a deductible of $0.5 million and an aggregate cap of $10 million.

In addition, pursuant to the Omnibus Agreement, Seadrill agreed to indemnify the Company for any defects in title to the assets contributed or sold to the Company and any failure to obtain, prior to October 14, 2012, certain consents and permits necessary to conduct the Company’s business, which liabilities arise within three years after the closing of the IPO on October 24, 2012.

Note 11 – Commitments and contingencies

Legal Proceedings

At June 30, 2013, the Company was not party to any litigation.

Pledged Assets

The book value of assets pledged under mortgage and overdraft facilities at June 30, 2013 was $2,200.2 million (December 31, 2012: $2,098.1 million)

Purchase Commitments

At June 30, 2013, the Company had no contractual purchase commitments.

Guarantees

At June 30, 2013, the Company had issued the following guarantees in favor of third parties:

•

Guarantees issued in favor of banks in relation to customs in Nigeria ( West Capella ) for $157.4 million

•

Guarantees to Exxon ( West Aquarius ) for $180 million and Total ( West Capella ) for $250 million in relation to Seadrill’s formal contract holder’s performance under the respective drilling contracts

F-17

Note 12 – Earnings per unit and cash distributions

The calculations of basic and diluted earnings per unit are presented below


(In US$ millions)	Six months ended June 30, 2013

Net income attributable to Seadrill Partners LLC	$	41.9
Less: distributions paid (1)		33.3

Undistributed earnings		8.6


Net income attributable to:
Common unitholders		24.6
Subordinated unitholders		16.4
Incentive distribution rights		0.9

		41.9


Weighted average units outstanding (basic and diluted) (in thousands):
Common unitholders		24,815
Subordinated unitholders		16,543

Earnings per unit (basic and diluted):
Common unitholders	$	0.99
Subordinated unitholders	$	0.99

Cash distributions declared and paid in the period per unit (2):		0.3875
Subsequent event: Cash distributions declared and paid per unit relating to the period (3):		0.4175

(1)

For the purpose of calculation of the earnings per unit the cash distributions paid in May and August 2013, (relating to the three and six month period ended June 30, 2013, respectively), are based on the number of units outstanding at June 30, 2013. The units outstanding as at June 30, 2013 are also used as a denominator for the earnings per unit calculation.

(2)	Refers to cash distribution declared and paid during the period.

(3)	Refers to cash distribution declared and paid subsequent to the period end.

Earnings per unit information has not been presented for any period prior to the Company’s IPO as the information is not comparable due to the change in the Company’s structure and the basis of preparation of the financial statements as described in Note 1.

As of June 30, 2013 and December 31, 2012, of the Company’s total number of units outstanding, 24.3% were held by the public and the remaining units were held by Seadrill.

Earnings per unit are determined by adjusting net income for the period by distributions made or to be made in relation to the period. The resulting earnings figure is divided by the weighted-average number of units outstanding during the period.

The common unitholders’ and subordinated unitholder’s interests in net income are calculated as if all net income was distributed according to the terms of the Operating agreement, regardless of whether those earnings would or could be distributed. The Operating Agreement does not provide for the distribution of net income; rather, it provides for the distribution of available cash, which is a contractually defined term that generally means all cash on hand at the end of the quarter after establishment of cash reserves determined by the Company’s board of directors to provide for the proper conduct of the Company’s business including reserves for maintenance and replacement

F-18

capital expenditure and anticipated credit needs. Therefore the earnings per unit is not indicative of potential cash distributions that may be made based on historic or future earnings. Unlike available cash, net income is affected by non-cash items, such as depreciation and amortization, unrealized gains (losses) on non-designated derivative instruments and foreign currency translation gains (losses).

Under the Company Agreement, during the subordination period, the common units will have the right to receive distributions of available cash from operating surplus in an amount equal to the minimum quarterly distribution of $0.3875 per unit per quarter, plus any arrearages in the payment of minimum quarterly distribution on the common units from prior quarters, before any distributions of available cash from operating surplus may be made on the subordinated units.

The amount of the minimum quarterly distribution is $0.3875 per unit or $1.55 per unit on an annualized basis and is made in the following manner, during the subordination period:

First, to the common unitholders, pro rata, until the Company distributes for each outstanding common unit an amount equal to the minimum quarterly distribution for that quarter;

Second, to the common unitholders, pro rata, until each common unit has received an amount equal to any arrearages in payment of the minimum quarterly distribution on the common units for prior quarters during the subordination period; and

Third, to the holders of subordinated units, pro rata, until each subordinated unit has received a minimum quarterly distribution for that quarter;

The Company has distributed available cash from operating surplus to the common and subordinated unitholders in an amount equal to the minimum quarterly distribution; and

The Company has distributed available cash from operating surplus on outstanding common units in an amount necessary to eliminate any cumulative arrearages in payment of the minimum quarterly distribution;

Then, the Company will distribute any additional available cash from operating surplus for that quarter among the unitholders in the following manner:

•

first, 100% to all unitholders, until each unitholder receives a total of $0.4456 per unit for that quarter (the “first target distribution”);

•

second, 85.0% to all unitholders, pro rata, and 15.0% to the holders of the incentive distribution rights, pro rata, until each unitholder receives a total of $0.4844 per unit for that quarter (the “second target distribution”);

•

third, 75.0% to all unitholders, pro rata, and 25.0% to the holders of the incentive distribution rights, pro rata, until each unitholder receives a total of $0.5813 per unit for that quarter (the “third target distribution”); and

•

thereafter, 50.0% to all unitholders, and 50.0% to the holders of the incentive distribution rights, pro rata.

In each case, the amount of the target distribution set forth above is exclusive of any distributions to common unitholders to eliminate any cumulative arrearages in payment of the minimum quarterly distribution. The percentage interests set forth above assumes that the Company does not issue additional classes of equity securities.

Note 13 – Subsequent Events

On July 26, 2013, our Board of Directors declared a quarterly cash distribution with respect to the quarter ended June 30, 2013 of $0.4175 per unit, equivalent to $1.67 per unit on an annualized basis.

On August 14, 2013, the Company paid a distribution with respect to the quarter ended June 30, 2013 of US$0.4175 per unit, equivalent to the minimum quarterly distribution.

F-19

EXHIBITS

The following exhibits are filed as part of this report:


Exhibit No.	Description

10.1	Amendment No. 1 to Contribution and Sale Agreement among Seadrill Partners LLC, Seadrill Member LLC, Seadrill Operating GP LLC, Seadrill Operating LP, Seadrill Capricorn Holdings LLC, Seadrill Opco Sub LLC, Seadrill Americas Inc., Seadrill Offshore AS, and Seadrill UK Ltd., dated as of June 30, 2013

10.2	US$440,000,000 Secured Credit Facility Agreement dated December 4, 2012 between Seadrill Limited, as borrower, the subsidiaries of Seadrill Limited named therein as guarantors, and the banks and financial institutions named therein as lenders

10.3	Loan Agreement, dated May 16, 2013, between Seadrill Limited, Seadrill T-15 Ltd., Seadrill Partners Operating LLC and Seadrill International Limited

10.4	Intercompany Loan Agreement, dated May 16, 2013, between Seadrill Limited, as lender and Seadrill Partners Operating LLC, as borrower

10.5	Purchase and Sale Agreement, dated May 7, 2013, between Seadrill Limited and Seadrill Partners Operating LLC

10.6	Amended and Restated Revolving Loan Agreement, dated August 31, 2013, among Seadrill Operating LP, Seadrill Capricorn Holdings LLC and Seadrill Partners Operating LLC, as borrowers, and Seadrill Limited, as lender

101	The following financial information from Seadrill Partners LLC’s Report on Form 6-K for the six months ended June 30, 2013 formatted in XBRL (eXtensible Business Reporting Language):

	(i)	Unaudited Condensed Consolidated and Combined Carve-Out Statements of Operations for the six months ended June 30, 2013 and 2012;

	(ii)	Unaudited Condensed Consolidated and Combined Carve-Out Balance Sheets as of June 30, 2013 and December 31, 2012;

	(iii)	Unaudited Condensed Consolidated and Combined Carve-Out Statements of Cash Flows for the six months ended June 30, 2013 and 2012;

	(iv)	Unaudited Condensed Consolidated and Combined Carve-Out Statements of Changes in Members’ Capital/Owners’ Equity for the six months ended June 30, 2013 and 2012; and

	(v)	Notes to the Unaudited Condensed Consolidated and Combined Carve-Out Financial Statements.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	SEADRILL PARTNERS LLC

Date: September 30, 2013
	By:	/s/ Graham Robjohns
		Name:	Graham Robjohns
		Title:	Chief Executive Officer

EXHIBITS INDEX


Exhibit No.	Description

10.1	Amendment No. 1 to Contribution and Sale Agreement among Seadrill Partners LLC, Seadrill Member LLC, Seadrill Operating GP LLC, Seadrill Operating LP, Seadrill Capricorn Holdings LLC, Seadrill Opco Sub LLC, Seadrill Americas Inc., Seadrill Offshore AS, and Seadrill UK Ltd., dated as of June 30, 2013

10.2	US$440,000,000 Secured Credit Facility Agreement dated December 4, 2012 between Seadrill Limited, as borrower, the subsidiaries of Seadrill Limited named therein as guarantors, and the banks and financial institutions named therein as lenders

10.3	Loan Agreement, dated May 16, 2013, between Seadrill Limited, Seadrill T-15 Ltd., Seadrill Partners Operating LLC and Seadrill International Limited

10.4	Intercompany Loan Agreement, dated May 16, 2013, between Seadrill Limited, as lender and Seadrill Partners Operating LLC, as borrower

10.5	Purchase and Sale Agreement, dated May 7, 2013, between Seadrill Limited and Seadrill Partners Operating LLC

10.6	Amended and Restated Revolving Loan Agreement, dated August 31, 2013, among Seadrill Operating LP, Seadrill Capricorn Holdings LLC and Seadrill Partners Operating LLC, as borrowers, and Seadrill Limited, as lender

101	The following financial information from Seadrill Partners LLC’s Report on Form 6-K for the six months ended June 30, 2013 formatted in XBRL (eXtensible Business Reporting Language):

	(i)	Unaudited Condensed Consolidated and Combined Carve-Out Statements of Operations for the six months ended June 30, 2013 and 2012;

	(ii)	Unaudited Condensed Consolidated and Combined Carve-Out Balance Sheets as of June 30, 2013 and December 31, 2012;

	(iii)	Unaudited Condensed Consolidated and Combined Carve-Out Statements of Cash Flows for the six months ended June 30, 2013 and 2012;

	(iv)	Unaudited Condensed Consolidated and Combined Carve-Out Statements of Changes in Members’ Capital/Owners’ Equity for the six months ended June 30, 2013 and 2012; and

	(v)	Notes to the Unaudited Condensed Consolidated and Combined Carve-Out Financial Statements.

Exhibit 10.1

Execution Copy

AMENDMENT TO

CONTRIBUTION AND SALE AGREEMENT

Dated as of June 30, 2013

AMENDMENT TO CONTRIBUTION AND SALE AGREEMENT

This AMENDMENT TO CONTRIBUTION AND SALE AGREEMENT (this “ Amendment ”), dated as of June 30, 2013 is made by and among Seadrill Limited, a Bermuda exempted company (“ Seadrill ”), Seadrill Partners LLC, a Marshall Islands limited liability company (the “ Company ”), Seadrill Member LLC, a Marshall Islands limited liability company (the “ Seadrill Member ”), Seadrill Operating GP LLC, a Marshall Islands limited liability company (“ OPCO GP ”), Seadrill Operating LP, a Marshall Islands limited partnership (“ Seadrill Operating ”), Seadrill Capricorn Holdings LLC, a Marshall Islands limited liability company (“ Seadrill Capricorn Holdings ”), Seadrill Opco Sub LLC, a Marshall Islands limited liability company (“ Seadrill Opco Sub ”), Seadrill Americas Inc., a Texas corporation (“ Seadrill Americas ”), Seadrill Offshore AS, a Norwegian company (“ Seadrill Offshore ”), and Seadrill UK Ltd., a private company limited by shares incorporated in England (“ Seadrill UK ”). The above-named entities are sometimes referred to in this Agreement each as a “ Party ” and collectively as the “ Parties .”

RECITALS

WHEREAS, the Parties entered into a Contribution and Sale Agreement dated as of October 22, 2012 (the “ Contribution and Sale Agreement ”) whereby Seadrill transferred equity interests in certain entities to the Company and its subsidiaries; and

WHEREAS, the Parties did not provide for any working capital adjustments related to intercompany accounts in connection with the transactions contemplated in the Contribution and Sale Agreement, based on their understanding of the status of intercompany balances as reflected in the Combined Consolidated Carve-Out Balance Sheet of the Company’s Predecessor as at June 30, 2012; and

WHEREAS , between June 30, 2012 and October 22, 2012 a substantial net balance of intercompany payables developed in favor of Seadrill; and

WHEREAS , consistent with the spirit and intent of the Contribution and Sale Agreement, the Parties agree that the working capital of the Company as at October 24, 2012 should be conformed to the amount of working capital reflected in the Combined Consolidated Carve-Out Balance Sheet of the Company’s Predecessor as at June 30, 2012 and consequently a portion of these intercompany payables should have been converted to equity prior to closing of the transactions contemplated in the Contribution and Sale Agreement;

WHEREAS , the Parties have identified and agreed upon the net intercompany payable balances which should be converted;

AGREEMENT

NOW THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the Parties hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions . Except as expressly set forth herein, all capitalized terms in this Amendment shall have the meaning assigned to such terms in the Contribution and Sale Agreement.

ARTICLE II

RECLASSIFICATION OF INTERCOMPANY BALANCES

Section 2.1 Conversion of Intercompany Balances. The Parties agree that as of June 30, 2013, the accounts of the Parties shall be adjusted to convert certain payment balances. The Parties agree that the adjustment shall be treated as (i) a net capital contribution by Seadrill to Seadrill Operating in the amount of $20,000,000 without any increase of the percentage interest of Seadrill in Seadrill Operating; and (ii) a net capital contribution by Seadrill to Seadrill Capricorn Holdings in the amount of $20,504,881 without the issuance of additional units in Seadrill Capricorn Holdings to Seadrill. Each Party agrees to enter into the necessary and appropriate transactions with its subsidiaries in order to effect the conversion of the individual payment balances.

ARTICLE III

RATIFICATION OF OTHER TERMS

Section 3.1 Ratification. The Parties hereby reconfirm and ratify all terms and conditions of the Contribution and Sale Agreement except as expressly amended hereby.

[THE REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK]

IN WITNESS WHEREOF, the parties to this Amendment have caused it to be duly executed as of the date first above written.


SEADRILL LIMITED

By:		/s/ Kate Blakenship
Name:		Kate Blakenship
Title:		President

SEADRILL PARTNERS LLC

By:		/s/ Graham Robjohns
Name:		Graham Robjohns
Title:		Chief Executive Officer

SEADRILL MEMBER LLC
By:		Seadrill Limited, its sole member

By:		/s/ Kate Blakenship
Name:		Kate Blakenship
Title:		President

SEADRILL OPERATING GP LLC

By:		/s/ Rune Magnus Lundetræ
Name:		Rune Magnus Lundetræ
Title:		President


SEADRILL OPERATING LP

By:		Seadrill Operating GP LLC, its general partner

By:		/s/ Rune Magnus Lundetræ
Name:		Rune Magnus Lundetræ
Title:		President

SEADRILL CAPRICORN HOLDINGS LLC

By:		/s/ Robert Hingley-Wilson
Name:		Robert Hingley-Wilson
Title:		Director

SEADRILL OPCO SUB LLC

By:		/s/ Robert Hingley-Wilson
Name:		Robert Hingley-Wilson
Title:		Director

SEADRILL AMERICAS INC.

By:		/s/ Lain Hope
Name:		Lain Hope
Title:		President


SEADRILL OFFSHORE AS

By:		/s/ Jon Olav Osthus
Name:		Jon Olav Osthus
Title:		Director

SEADRILL UK LTD.

By:		/s/ Robert Hingley-Wilson
Name:		Robert Hingley-Wilson
Title:		Director

Exhibit 10.2

Confidential

EXECUTION TEXT

Dated 2012

SEADRILL LIMITED

as Borrowers

SEADRILL T-15 LTD., SEADRILL T-16 LTD., SEADRILL TELESTO LTD.,

SEADRILL OBERON LTD. AND OTHERS NAMED HEREIN

as Guarantors

arranged by

THE EXPORT-IMPORT BANK OF CHINA

AND

CITIBANK, N.A., LONDON BRANCH

as Bookrunners and Mandated Lead Arrangers

provided by

THE BANKS AND FINANCIAL INSTITUTIONS NAMED HEREIN

as Lenders

and

CITIBANK INTERNATIONAL PLC

as Agent

and

CITIBANK, N.A., LONDON BRANCH

as Security Agent

and

CITIBANK, N.A., LONDON BRANCH

as Account Bank

USD 440,000,000

SECURED CREDIT FACILITY AGREEMENT

LOGO

TABLE OF CONTENTS


Clause		Page

1.	DEFINITIONS AND INTERPRETATION		4

2.	THE FACILITY		22

3.	PURPOSE		25

4.	CONDITIONS PRECEDENT		25

5.	UTILISATION		26

6.	REPAYMENT AND REDUCTIONS		27

7.	VOLUNTARY PREPAYMENT AND CANCELLATION		28

8.	MANDATORY REDUCTION, PREPAYMENT AND CANCELLATION		29

9.	INTEREST		32

10.	INTEREST PERIODS		33

11.	CHANGES TO THE CALCULATION OF INTEREST		34

12.	FEES		35

13.	TAX GROSS-UP AND INDEMNITIES		35

14.	INCREASED COSTS		36

15.	OTHER INDEMNITIES		37

16.	MITIGATION BY THE LENDERS		38

17.	COSTS AND EXPENSES		40

18.	GUARANTEE AND INDEMNITY		40

19.	SECURITY		43

20.	REPRESENTATIONS AND WARRANTIES		44

21.	INFORMATION UNDERTAKINGS		49

22.	FINANCIAL COVENANTS		51

23.	GENERAL UNDERTAKINGS		52

24.	RIG COVENANTS		57

25.	EVENTS OF DEFAULT		62

26.	CHANGES TO THE PARTIES		66

27.	ROLES OF AGENT, SECURITY AGENT, MANDATED LEAD ARRANGERS AND BOOKRUNNERS		71

28.	CONDUCT OF BUSINESS BY THE FINANCE PARTIES		92

29.	SHARING AMONG THE FINANCE PARTIES		93

30.	PAYMENT MECHANICS		95

31.	SET-OFF		96

32.	NOTICES		97

33.	CALCULATIONS		98

34.	MISCELLANEOUS		99

35.	GOVERNING LAW AND ENFORCEMENT		101

36.	ENFORCEMENT		101

SCHEDULE 1 LENDERS AND COMMITMENTS			106

SCHEDULE 2 BORROWERS, GUARANTORS AND COLLATERAL RIGS			107

2 (129)


SCHEDULE 3 CONDITIONS PRECEDENT			109

SCHEDULE 4 FORM OF UTILISATION REQUEST			116

SCHEDULE 5 FORM OF COMPLIANCE CERTIFICATE			117

SCHEDULE 6 FORM OF TRANSFER CERTIFICATE			122

SCHEDULE 7 INDICATIVE REPAYMENTS/REDUCTIONS			125

SCHEDULE 8 CORPORATE STRUCTURE			126

SCHEDULE 9 MANDATORY COST FORMULA			127

SCHEDULE 10 FORM OF SELECTION NOTICE			129

3 (129)

THIS SECURED CREDIT FACILITY AGREEMENT is dated December 2012 and made between:

(1)	Seadrill Limited , of Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton, HM08, Bermuda, organisation number 36832, as borrower (the “ Borrowers ”);

(2)

The companies listed as Rig Owners and Intra-Group Charterers in Schedule 2 ( Borrowers , Guarantors and Collateral Rigs ) hereto as joint and several guarantors (each of the Rig Owners and Intra-Group Charterers a “ Guarantor ”, together the “ Guarantors ”) all being wholly owned (directly or indirectly) subsidiaries of the Borrowers;

(3)	The banks and financial institutions listed in Schedule 1 ( Lenders and Commitments ), as original lenders (together, the “ Lenders ”);

(4)	Citibank International Plc of 25 Canada Square, London, E14 5LB, as facility agent (the “ Agent ”);

(5)	Citibank, N.A., London Branch of 25 Canada Square, London, E14 5LB, as security agent (the “ Security Agent ”);

(6)	Citibank, N.A., London Branch of 25 Canada Square, London, E14 5LB, as account bank (the “ Account Bank ”);

(7)	The Export-Import Bank of China and Citibank, N.A., London Branch whose addresses are listed in Schedule 1 ( Lenders and Commitments ) as mandated lead arrangers (the “ Mandated Lead Arrangers ”); and

(8)	The banks and financial institutions listed in Schedule 1 ( Lenders and Commitments ) as bookrunners (the “ Bookrunners ”).

IT IS AGREED as follows

1.	DEFINITIONS AND INTERPRETATION

1.1

Definitions

In this Agreement, unless the context otherwise requires:

“ Account Bank Agreement ” means an account bank agreement dated on or about the date hereof and between the Rig Owners, the Intra-Group Charterers and the Account Bank.

“ Account Security ” means each assignment agreement and/or account security deed, collateral to this Agreement for the provision of a Security Interest in the Earnings Accounts to be made between the relevant Obligors and the Security Agent (on behalf of the Finance Parties) as security for the Obligors’ obligations under the Finance Documents, in form and substance satisfactory to the Finance Parties.

“ Accounting Principles ” means generally accepted accounting principles in the United States of America for the Parent and in the jurisdiction of incorporation of such other Obligors and Subsidiaries of the Parent.

“ Affiliate” means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.

4 (129)

“ Agreement ” means this secured credit facility agreement, as it may be amended, supplemented and varied from time to time, including its Schedules and any Transfer Certificate.

“ Applicable Margin ” means 3.25 per cent per annum.

“ Approved Brokers ” means the ship broker/consultancy firms RS Platou, Fearnleys and ODS Petrodata or such other reputable and independent consultancy or ship broker firm approved by the Agent (acting upon the instructions of the Required Lenders), such consent not to be unreasonably withheld or delayed.

“ Auditors ” means well reputable and internationally recognised accountancy firms acceptable to the Required Lenders such as PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young and KPMG or such other firm approved in advance by the Required Lenders (such approval not to be unreasonably withheld or delayed).

“ Authorisation ” means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration.

“ Availability Period ” means:

(a)

in respect of any Rig Advance relating to Rig 1, the period from and including the date of this Agreement to and including the earlier of (i) the Delivery Date of Rig 1 and (ii) the Termination Date;

(b)

in respect of any Rig Advance relating to Rig 2, the period from and including the date of this Agreement to and including the earlier of (i) the Delivery Date of Rig 2 and (ii) the Termination Date;

(c)

in respect of any Rig Advance relating to Rig 3, the period from and including the date of this Agreement to and including the earlier of (i) the Delivery Date of Rig 3 and (ii) the Termination Date; and

(d)

in respect of any Rig Advance relating to Rig 4, the period from and including the date of this Agreement to and including the earlier of (i) the Delivery Date of Rig 4 and (ii) the Termination Date,

or such later date as may be approved by the Lenders.

“ Available Commitment ” means a Lender’s Commitment less:

(a)

the amount of its participation in any outstanding Loans; and

(b)

in relation to any proposed Loan the amount of its participation in the Loan that is due to be made on or before the proposed Utilisation Date.

“ Base Case Model ” means the financial model and statements including profit and loss, balance sheet and cash flow projections reflecting the forecasted consolidated financial conditions of the Group for at least five (5) years following the date of this Agreement, prepared and approved by an authorised officer of the Parent, each in form and substance satisfactory to the Finance Parties addressed to, and/or capable of being relied upon by the Finance Parties.

5 (129)

“ Basel II Accord ” means the “International Convergence of Capital Measurement and Capital Standards, a Revised Framework” published by the Basel Committee on Banking Supervision in June 2004 as updated prior to, and in the form existing on, the date of this Agreement, excluding any amendment thereto arising out of the Basel III Accord.

“ Basel II Approach ” means, in relation to any Finance Party, either the Standardised Approach or the relevant Internal Ratings Based Approach (each as defined in the Basel II Accord) adopted by that Finance Party (or any of its Affiliates) for the purposes of implementing or complying with the Basel II Accord.

“ Basel II Regulation ” means:

(a)

any law or regulation implementing the Basel II Accord; or

(b)

any Basel II Approach adopted by a Finance Party or any of its Affiliates.

“ Basel III Accord ” means, together:

(a)

the agreements on capital requirements, a leverage ratio and liquidity standards contained in “Basel III: A global regulatory framework for more resilient banks and banking systems”, “Basel III: International framework for liquidity risk measurement, standards and monitoring” and “Guidance for national authorities operating the countercyclical capital buffer” published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated;

(b)

the rules for global systemically important banks contained in “Global systemically important banks: assessment methodology and the additional loss absorbency requirement - Rules text” published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and

(c)

any further guidance or standards published by the Basel Committee on Banking Supervision relating to “Basel III”.

“ Basel III Regulation ” means any law or regulation implementing the Basel III Accord save and to the extent that it re-enacts a Basel II Regulation.

“ Break Costs ” means the amount (if any) by which:

(a)

the interest (subject to clause 11.3 ( Break Costs ) excluding the Applicable Margin) which a Lender should have received for the period from the date of receipt of all or part of its participation in the Loan or Unpaid Sum to the last day of the current Interest Period in respect of the Loan or Unpaid Sum, had the principal amount or Unpaid Sum been paid on the last day of that Interest Period; exceeds

(b)

the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the relevant interbank market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period,

as further described in clause 11.3 ( Break Costs ).

6 (129)

“ Business Day ” means a day (other than a Saturday or Sunday) on which banks are open for business in Oslo, Beijing, New York and London (or any other relevant place of payment under clause 30 ( Payment mechanics )).

“ Cash ” means

(a)

cash in hand legally and beneficially owned by a member of the Group; and

(b)

cash deposits legally and beneficially owned by a member of the Group and which are deposited with (i) a Lender in respect of the Commercial Facility, (ii) any other deposit taking institution having a rating of at least A from Standard & Poor’s Ratings Group or the equivalent with any other principal credit rating agency in the United States of America or Europe or (iii) any other bank or financial institution approved by the Agent which in each case:

(i)

is free from any Security Interest, other than pursuant to the Security Documents;

(ii)

is otherwise at the free and unrestricted disposal of the relevant member of the Group by which it is owned; and

(iii)

in the case of cash in hand or cash deposits held by a member of the Group other than the Parent, is (in the opinion of the Agent, upon such documents and evidence as the Agent may require the Parent to provide in order to form the basis of such opinion) capable or, upon the occurrence of an Event of Default under this Agreement, would become capable of being paid without restriction to the Parent within five (5) Business Days of its request or demand therefore either by way of a dividend or by way of a repayment of principal (or the payment of interest thereon) in respect of an intercompany loan from the Parent to that Subsidiary.

“ Cash Equivalent ” means at any time:

(a)

any investment in marketable debt obligations issued or guaranteed by (i) a government or (ii) an instrumentality or agency of a government and in respect of (i) and (ii) having a credit rating of either A-1 or higher by Standard & Poor’s Rating Group Services or the equivalent with any other principal credit rating agency in the United States of America or Europe, maturing within one year after the relevant date of calculation and not convertible or exchangeable to any other security;

(b)

commercial paper (debt obligations) not convertible or exchangeable to any other security:

(i)

for which a recognised trading market exists;

(ii)

issued by an issuer incorporated in the United States of America, the United Kingdom, and Norway;

(iii)

which matures within one year after the relevant date of calculation; and

(iv)

which has a credit rating of at least A-1 or higher by Standard & Poor’s Rating Group Services or the equivalent with any other principal credit rating agency in the United States of America or Europe;

7 (129)

(c)

any investment in money market funds which (i) have a credit rating of either A-1 or higher by Standard & Poor’s Rating Group Services or the equivalent with any other principal credit rating agency in the United States of America or Europe, (ii) which invest substantially all their assets in securities of the types described in paragraphs (a) to (b) above and (iii) can be turned into cash on not more than 5 days’ notice; or

(d)

any other debt security approved by the Agent (on behalf of the Required Lenders),

in each case, to which any member of the Group is alone (or together with other members of the Group) beneficially entitled at that time and which is not issued or guaranteed by any member of the Group or subject to any Security Interest.

“ Cash Flow Projections ” means,

(a)

the Base Case Model in agreed form to be delivered by the Parent to the Agent pursuant to Part I of Schedule 3 ( Conditions Precedent to the First Utilisation Date ); and

(b)

any cash flow projections based on the Base Case Model delivered by the Parent to the Agent pursuant to and for such period as described in clause 21.1 ( Financial Statements ),

in form and substance satisfactory to the Agent.

“CEXIM Facility ” means the Facility made available under this Agreement as described in clause 2.1(a) ( Facility ).

“ CEXIM Facility Commitment ” means USD 308,000,000, as that amount may be reduced, cancelled or terminated in accordance with this Agreement.

“ CEXIM Facility Loan ” means the principal amount of the CEXIM Facility for the time being outstanding under this Agreement.

“ Charged Property ” means all of the assets of the Obligors which from time to time are, or are expressed or intended to be, the subject of the Security Documents.

“ Charter Contracts ” means each of the charter contracts for the Rigs listed in Schedule 2 ( Borrowers, Guarantors and Collateral Rigs ) and entered into between an Obligor and an oil company satisfactory to the Lenders and any renewal, extension or replacement of such charter contracts.

“ Charter Rates ” means the rates identified as Charter Rates in Schedule 2 ( Borrowers, Guarantors and Collateral Rigs ).

“Commercial Facility ” means the Facility made available under this Agreement as described in clause 2.1(b) ( Facility ).

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“ Commercial Facility Loan ” means the principal amount of the Commercial Facility for the time being outstanding under this Agreement.

“ Commercial Facility Commitment ” means USD 132,000,000, as that amount may be reduced, cancelled or terminated in accordance with this Agreement.

“ Commitment(s) ” means:

(a)

in relation to a Lender the amount set opposite its name under the heading “Commitments” in Schedule 1 ( Lenders and Commitments ) and the amount of any other Commitment transferred to it pursuant to clause 26.2 ( Assignments and transfers by the Lenders ); and

(b)

in relation to any New Lender, the amount of any Commitment transferred to it pursuant to clause 26.2 ( Assignments and transfers by the Lenders ),

to the extent not cancelled, reduced or transferred by it under this Agreement.

“ Compliance Certificate ” means a certificate substantially in the form as set out in Schedule 5 ( Form of Compliance Certificate ) and delivered pursuant to clause 21.2 ( Compliance Certificate ).

“ Current Assets ” means, on any date, the aggregate value of the assets of the Group (on a consolidated basis), which are treated as current assets in accordance with Accounting Principles but excluding USD 150,000,000 and for the purpose of calculating the Current Ratio, up to twenty per cent (20%) of shares in listed companies owned twenty per cent (20%) or more by any members of the Group shall also be treated as Current Assets based on the average market price during the calendar month prior to any determination of Current Assets.

“ Current Liabilities ” means, on any date, the aggregate amount of all liabilities of the Parent which are treated as current liabilities in accordance with Accounting Principles, but excluding the current portion of the Group’s (on a consolidated basis) long term debt.

“ Current Ratio ” means the ratio of Current Assets to Current Liabilities.

“ Default ” means an Event of Default or any event or circumstance specified in clause 25 ( Events of Default ) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.

“ Delivery ” means, in relation to a Rig, the delivery and acceptance of the Rig by the relevant Rig Owner under the building contract between that Rig Owner and the Yard in respect of such Rig.

“ Delivery Date ” means, in relation to a Rig, the date on which its Delivery actually occurs.

“ Earnings ” means all moneys whatsoever which are now, or later become, payable (actually or contingently) to any Obligor and which arise out of the use of or operation of any of the Rigs, including (but not limited to):

(a)

all freight, hire and passage moneys payable to an Obligor, including (without limitation) payments of any nature under any charter or agreement for the employment, use, possession, management and/or operation of any of the Rigs;

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(b)

any claim under any guarantees related to freight and hire payable to an Obligor as a consequence of the operation of any of the Rigs;

(c)

compensation payable to an Obligor in the event of any requisition (whether for title or otherwise), confiscation or compulsory acquisition of any of the Rigs or for the use of any of the Rigs by any government authority or other competent authority;

(d)

remuneration for salvage, towage and other services performed by any of the Rigs payable to an Obligor;

(e)

demurrage and retention money receivable by an Obligor in relation to any of the Rigs;

(f)

all moneys which are at any time payable under the Insurances in respect of loss of earnings;

(g)

if and whenever any of the Rigs is employed on terms whereby any moneys falling within paragraph (a) to (f) above are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to such Rig(s); and

(h)

any other money whatsoever due or to become due to an Obligor from third parties in relation to any of the Rigs, or otherwise.

“ Earnings Accounts ” means the bank accounts of each of the Obligors from time to time each of which shall be held with the Security Agent or any of the Security Agent’s corresponding banks (or, if applicable law require that the bank account in question be maintained by another bank, then with such other bank as acceptable to the Security Agent) and to which all the Earnings and any proceeds of the Insurances shall be paid.

“ EBITDA ” means the earnings before interest expenses, taxes, depreciation and amortization of the Group on a consolidated basis for the previous period of twelve (12) months as such term is defined in accordance with Accounting Principles consistently applied. However, in the event the Parent or a member of the Group acquires rigs or rig owning entities with historical EBITDA available for the rigs’ previous ownership, such EBITDA shall be included for covenant purposes in this Agreement, and if necessary, be annualized to represent a twelve (12) months historical EBITDA. In the event the Parent or a member of the Group acquires rigs or rig owning companies without historical EBITDA available, the Parent is entitled to base a twelve (12) month historical EBITDA calculation on future projected EBITDA only subject to any such new rig having (i) a firm charter contract in place at the time of delivery of the rig with a duration of minimum twelve (12) months and (ii) a firm charter contract in place at the time of such EBITDA calculation, provided the Parent provides the Agent with a detailed calculation of the future projected EBITDA. Further, it is agreed that EBITDA shall include any realized gains and/or losses in respect of the disposal of rigs or the disposal of shares in rig owning companies.

“ Eligible Contract Price ” means, in respect of:

(a)

Rig 1, USD 119,000,000;

(b)

Rig 2, USD 116,000,000;

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(c)

Rig 3, USD 216,000,000; and

(d)

Rig 4, USD 212,000,000.

“ Environmental Approval ” means any permit, licence, consent, approval and other authorisations and the filing of any notification, report or assessment required under any Environmental Law for the operation of the Rigs and for the operation of the business of any member of the Group.

“ Environmental Claim ” means any claim, proceeding or investigation by any party in respect of any Environmental Law or Environmental Approval.

“ Environmental Law ” means any applicable law or regulation which relates to:

(a)

the pollution or protection of the environment;

(b)

harm to or the protection of human health;

(c)

the conditions of the workplace; or

(d)

any emission or substance capable of causing harm to any living organism or the environment.

“ Equity ” means, on any date, the Group’s (on a consolidated basis) nominal book value of equity treated as equity in accordance with Accounting Principles adjusted for the difference between the Market Value and book value for all drilling units only if the units are consolidated into the Parent’s audited consolidated financial statements.

“ Equity Ratio ” means the ratio of Equity to Total Assets.

“ Event of Default ” means any event or circumstance specified as such in clause 25 ( Events of Default ).

“ Exchange ” means the Oslo Stock Exchange or the New York Stock Exchange.

“ Facility ” means the secured credit facility, divided into the CEXIM Facility and the Commercial Facility, made available under this Agreement.

“ Facility Office ” means:

(a)

in respect of a Lender, the office or offices notified by that Lender to the Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than five Business Days’ written notice) as the office through which it will perform its obligations under this Agreement; and

(b)

in respect of any other Finance Party, the office in the jurisdiction in which it is resident for tax purposes.

“ Fee Letters ” means any letters entered into by reference to this Agreement in relation to any fees.

“ Final Maturity Date ” means, in respect of each Rig Advance, the earlier of:

(a)

the 5th anniversary of the Final Utilisation Date;

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(b)

the 6th anniversary of the First Utilisation Date; and

(c)

15 December 2017.

“ Final Utilisation Date ” means the date, being on or before the Termination Date, on which the final Utilisation under this Agreement actually occurs.

“ Finance Documents ” means this Agreement, any Compliance Certificate, any Fee Letters, any Utilisation Request, the Security Documents and any other document (whether creating a Security Interest or not) which is executed at any time by any of the Obligors as security for, or to establish any form of subordination to the Finance Parties under this Agreement or any of the other documents referred to herein or therein and any such other document designated as a “Finance Document” by the Agent and the Parent.

“ Finance Lease ” means a lease or charter party which would be classified as a finance lease in accordance with the Accounting Principles of the Parent or any other transaction which is required to be classified and accounted for as a liability or asset on the face of the Group’s consolidated balance sheet in accordance with Accounting Principles.

“ Finance Party ” means each of the Agent, the Security Agent, the Mandated Lead Arrangers, the Bookrunners, the Account Bank and the Lenders.

“ Financial Indebtedness ” means any of the following (whether or not the same are required to be classified and accounted for as a liability on the face of the Group’s consolidated balance sheet in accordance with Accounting Principles):

(a)

moneys borrowed and debit balances at banks or other financial institutions;

(b)

any acceptance under any acceptance credit or bill discounting facility (or dematerialised equivalent);

(c)

any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;

(d)

the amount of any liability in respect of Finance Leases;

(e)

receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);

(f)

any derivative transaction (and, when calculating the value of that transaction, only the marked to market value (or, if any actual amount is due as a result of the termination or close-out of that transaction, that amount) shall be taken into account);

(g)

any counter-indemnity obligation in respect of a guarantee, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution in respect of an underlying liability of any entity which is not a member of the Group which liability would fall within one of the other paragraphs of this definition;

(h)

any amount raised by the issue of redeemable shares which are redeemable (other than at the option of the issuer) before the Final Maturity Date or are otherwise classified as borrowings under the Accounting Principles;

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(i)

any amount of any liability under an advance or deferred purchase agreement if (i) one of the primary reasons behind entering into the agreement is to raise finance or to finance the acquisition or construction of the asset or service in question or (ii) the agreement is in respect of the supply of assets or services and payment is due more than thirty (30) days after the date of supply;

(j)

any amount raised under any other transaction (including any forward sale or purchase, sale and sale back or sale and leaseback agreement) having the commercial effect of a borrowing or otherwise classified as borrowings under the Accounting Principles; and

(k)

the amount of any liability in respect of any guarantee for any of the items referred to in paragraphs (a) to (j) above,

but shall not include:

(i)

any borrowings or other such liabilities owed by any member of the Group to another member of the Group as permitted pursuant to the terms of this Agreement.

“ Financial Support ” means loans, guarantees, credits, indemnities or other form of financial support.

“ First Utilisation Date ” means the date on which the first Utilisation under this Agreement actually occurs.

“ General Assignments ” means, in respect of a Rig, each assignment agreement, collateral to this Agreement for (a) the first priority assignment of the Insurances and Earnings to be made between each Rig Owner and the Security Agent (on behalf of the Finance Parties) and (b) the first priority assignment of the Insurances, Earnings and each relevant intra-group charter to be made between each Rig Owner, each Intra-Group Charterer (as the case may be) and the Security Agent (on behalf of the Finance Parties) each as security for the Obligors’ obligations under the Finance Documents, each in form and substance satisfactory to the Finance Parties.

“ Guarantee(s) ” means the guarantee(s) and indemnity(ies) provided by the Guarantors pursuant to clause 18 ( Guarantee and Indemnity ).

“ Guarantee Obligations ” means the obligations of each Guarantor pursuant to clause 18 ( Guarantee and Indemnity ).

“ Group ” means the Parent and its Subsidiaries from time to time.

“ Holding Company ” means, in relation to a person, any other person in respect of which it is a Subsidiary.

“ Insurance Report ” means an insurance report in respect of the Insurances confirming that such Insurances are placed with such insurers, insurance companies and/or clubs in such amounts, against such risks and in such form as acceptable to the Agent (acting on the instructions from the Finance Parties) and comply with the requirements under clause 24.3 ( Insurance ) prepared by Aon Benfield, or such other reputable insurance advisor approved by the Agent, and dated on or about the date of this Agreement and addressed to, and capable of being relied upon by, the Finance Parties.

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“ Insurances ” means all the insurance policies and contracts of insurance including (without limitation) those entered into in order to comply with the terms of clause 24.3 ( Insurance ) which are from time to time in place or taken out or entered into by or for the benefit of the Obligors (whether in the sole name of the Obligors or in the joint names of the Obligors and any other person) in respect of the Rigs or otherwise in connection with the Rigs and all benefits thereunder (including claims of whatsoever nature and return of premiums).

“ Interest Cover Ratio ” means the ratio of the Group’s consolidated EBITDA to interest expenses for the previous period of twelve (12) months.

“ Interest Payment Date ” means the last day of each Interest Period.

“ Interest Period ” means, in relation to a Loan, each of the successive periods determined in accordance with clause 10.1 ( Selection of Interest Periods ), and, in relation to an Unpaid Sum, each period determined in accordance with clause 9.3 ( Default interest ).

“ Intra-Group Charterer ” means each Subsidiary named as Intra-Group Charterer pursuant to Schedule 2 ( Borrowers, Guarantors and Collateral Rigs ) as well as any other Subsidiary which enters into a Charter Contract for the hiring of any of the Rigs in the future.

“ ISM Code ” means the International Management Code for the Safe Operation of Ships and for Pollution Prevention.

“ ISPS Code ” means the International Ship and Port Facility Security (ISPS) Code as adopted by the International Maritime Organization’s (IMO) Diplomatic Conference of December 2002.

“ Jackup Rig ” means either or both of Rig 3 and/or Rig 4 (as the context requires).

“ Lenders ” means the financial institutions listed in Schedule 1 ( Lenders and Commitments ), and any New Lender, which in each case has not ceased to be a Party in accordance with the terms of this Agreement.

“ Leverage Ratio ” means the Net Funded Debt divided by EBITDA.

“ LIBOR ” means, in relation to a Loan:

(a)

The applicable interest settlement rate for the relevant period as displayed on Reuters screen page Libor 01; or

(b)

(if Reuters screen page referred to in (a) is not available for the Interest Period of that Loan or other sum) the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Agent at its request quoted by the Reference Banks to leading banks in the London interbank market,

as of 11.00 a.m. (London time) on the second Business Day prior to the relevant Interest Period for the offering of deposits in USD and for a period comparable to the Interest Period for that Loan or other sum, and if any such rate is below zero, LIBOR will be deemed to be zero.

“ Loan (s)” means the aggregate of the CEXIM Facility Loans and the Commercial Facility Loans outstanding under this Agreement from time to time or a loan made or to be made under the Facility.

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“ Losses ” means any costs, expenses (including, but not limited to, legal fees), payments, charges, losses, demands, liabilities, taxes (including VAT), claims, actions, proceedings, penalties, fines, damages, judgments, orders or other sanctions.

“ Mandatory Cost ” means the percentage rate per annum calculated by the Agent in accordance with Schedule 9 ( Mandatory Cost Formula ).

“ Market Value ” means the fair market value of each of the Rigs, being the average of valuations of the Rig obtained from two (2) of the Approved Brokers (elected by the Parent), with or without physical inspection of the Rig (as the Agent may require) on the basis of a sale for prompt delivery for cash at arm’s length on normal commercial terms as between a willing buyer and a willing seller, on an “as is, where is” basis, free of any existing contract of employment and/or similar arrangement.

“ Material Adverse Effect ” means a material adverse effect on:

(a)

the financial condition, assets, business or operation of any Obligor or the Group as a whole; or

(b)

the ability of any of the Obligors or the Group as a whole to perform any of their obligations under the Finance Documents; or

(c)

the validity or enforceability of, or the effectiveness or ranking of any security granted or purporting to be granted pursuant to any of the Finance Documents or the rights or remedies of any Finance Party under any of the Finance Documents.

“ Material Subsidiary ” shall mean any Subsidiary of the Parent:

(a)

owning a drilling unit; or

(b)

which holds a charter contract for a drilling unit; or

(c)

Seadrill Management AS; or

(d)

which is a Holding Company for any of the above.

“ Minimum Liquidity ” means, as at any date, the aggregate amount of the Group’s (consolidated) Cash and the portion of the Available Commitment, which is available for Utilisation pursuant to clause 5 ( Utilisation ) at that date as certified to the Agent by the Chief Financial Officer of the Parent.

“ Mortgages ” means each of the first priority mortgages to be executed by each of the Rig Owners against each of the respective Rigs in a Ship Registry in favour of the Security Agent (on behalf of the Finance Parties) as security for the Obligors’ obligations under the Finance Documents, in form and substance satisfactory to the Agent (on behalf of the Finance Parties) and the Security Agent.

“ Net Funded Debt ” means on a consolidated basis for the Group all interest-bearing debt less Cash and Cash Equivalents but excluding USD 150,000,000.

“ New Lender ” has the meaning set out in clause 26 ( Changes to the Parties ).

“ Obligors ” means the Borrowers and the Guarantors and an Obligor means any of them.

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“ Original Financial Statements ” means in relation to (a) the Parent, the audited consolidated financial statements for the financial year ending on 31 December 2011, (b) the Rig Owners and the other Guarantors, the audited consolidated financial statements for the financial year ending on 31 December 2011 and the unaudited unconsolidated financial statements for the financial year ending on 31 December 2011 (to the extent applicable).

“ Parent ” means Seadrill Limited, of Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton, HM08, Bermuda, organisation number 36832.

“ Party ” means a party to this Agreement (including its successors and permitted transferees).

“ Permitted Encumbrances ” means in respect of any Rig owned by any of the Rig Owners:

(a)

liens for current crews’ wages and salvage;

(b)

any ship repairer’s or outfitter’s possessory lien arising by operation of law and not exceeding USD 5,000,000; and

(c)

any other liens incurred in the ordinary course of operating such Rig not exceeding USD 5,000,000.

“ Quarter Date ” means 31 March, 30 June, 30 September and 31 December.

“ Quarterly Accounts ” means the Obligors’ consolidated and unconsolidated financial statements for the relevant financial quarter to be delivered pursuant to clause 21.1 ( Financial Statements ).

“ Quotation Day ” means the day occurring two (2) Business Days prior to the commencement of an Interest Period, unless market practice differs, in which case the Quotation Day for USD will be determined by the Agent in accordance with market practice (and if quotations would normally be given by leading banks in the market on more than one day, the Quotation Day will be the last of those days).

“Receiver” means a receiver or a receiver and manager or an administrative receiver appointed in relation to the whole or any part of any Charged Property under any relevant Security Document.

“ Reference Banks ” means the London offices of Citibank, N.A., HSBC Bank plc and Nordea Bank Norge ASA or such other banks as appointed by the Agent in consultation with the Parent.

“ Required Lenders ” means:

(a)

if there are no Loans outstanding, a Lender or Lenders whose Commitments aggregate more than 66 2/3% of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 66 2/3% of the Total Commitments immediately prior to the reduction); or

(b)

at any other time, a Lender or Lenders whose participations in the Loans then outstanding aggregate more than 66 2/3% of the Loans then outstanding provided that the outstanding Loans shall be measured in respect of both the Lender’s part in the CEXIM Facility Loans outstanding and the CEXIM Lender’s Facility Commitment available (to the extent applicable), as well as the Lender’s part in the Commercial Facility Loans outstanding and the Lender’s Commercial Facility Commitment available (to the extent applicable),

16 (129)

provided always, that in the case of (a) and (b) above, the Required Lenders shall always include either (i) the sole Lender in respect of the Commercial Facility if there is only one (1) such Lender or (ii) at any other time, at least two (2) Lenders for the Commercial Facility.

“ Rig Advance ” means, in respect of a Rig, each borrowing of a proportion of the Total Commitments by the Borrowers or (as the context may require) the outstanding principal amount of such borrowing relating to that Rig.

“ Rig 1 ” means the Rig described as such in Schedule 2 ( Borrowers, Guarantors and Collateral Rigs ).

“ Rig 2 ” means the Rig described as such in Schedule 2 ( Borrowers, Guarantors and Collateral Rigs ).

“ Rig 3 ” means the Rig described as such in Schedule 2 ( Borrowers, Guarantors and Collateral Rigs ).

“ Rig 4 ” means the Rig described as such in Schedule 2 ( Borrowers, Guarantors and Collateral Rigs ).

“ Rig Owner ” means each company named as owner of a Rig pursuant to Schedule 2 ( Borrowers, Guarantors and Collateral Rigs ).

“ Rigs ” means each of the collateral rigs listed in Schedule 2 ( Borrowers, Guarantors and Collateral Rigs ) each of which is owned by the respective Rig Owner as set out therein.

“ Security Documents ” means the Mortgages, the Account Security, the General Assignments, the Share Charges and all or any security documents as may be entered into from time to time pursuant to clause 19 ( Security ), all to be in form and substance satisfactory to the Agent (on behalf of all of the Lenders) and the Security Agent.

“ Security Interest ” means any mortgage, charge (whether fixed or floating), encumbrance, pledge, lien, assignment by way of security, finance lease, sale and repurchase or sale and leaseback arrangement, sale of receivables on a recourse basis or other security interest or any other agreement or arrangement having the effect of conferring security.

“ Security Period ” means the period commencing on the date of this Agreement and ending the date on which the Agent notifies the Borrowers and the other Finance Parties that:

(a)

all amounts which have become due for payment by the Borrowers or any other party under the Finance Documents have been paid;

(b)

no amount is owing or has accrued (without yet having become due for payment) under any of the Finance Documents;

(c)

no Borrower has any future or contingent liability under any provision of this Agreement and the other Finance Documents;

(d)

the Agent and the Required Lenders do not consider that there is a significant risk that any payment or transaction under a Finance Document would be set aside, or would have to be reversed or adjusted, in any present or possible future proceeding relating to a Finance Document or any asset covered (or previously covered) by a Security Interest created by a Finance Document; and

(e)

there are no Commitments in force.

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“ Selection Notice ” means a notice substantially in the form set out in Schedule 10 ( Selection Notice ) given in accordance with clause 10 ( Interest periods ).

“ Share Charges ” means the first priority share charges over all the shares of each of the Rig Owners from the Parent collateral to this Agreement as security for the Obligors’ obligations under the Finance Documents in the form and substance satisfactory to the Security Agent.

“ Ship Registry ” means the ship registry of Panama and such other ship registry as approved by the Agent (acting on the instructions of the Required Lenders) and the Security Agent.

“ Subsidiary ” means an entity from time to time of which a person:

(a)

has direct or indirect control; or

(b)

owns directly or indirectly more than fifty per cent (50%) (votes and/or capital),

for the purpose of paragraph (a), an entity shall be treated as being controlled by a person if that person is able to direct its affairs and/or control the composition of its board of directors or equivalent body.

“ Tax on Overall Net Income ” means a Tax imposed on a Finance Party by the jurisdiction under the laws of which it is incorporated, or in which it is located or treated as resident for tax purposes, on:

(a)

the net income, profits or gains of that Finance Party world wide; or

(b)

such of the net income, profits or gains of that Finance Party as are considered to arise in or relate to or are taxable in that jurisdiction.

“ Taxes ” means all present and future taxes, levies, imposts, duties, charges, fees, deductions and withholdings, and any restrictions and or conditions resulting in a charge together with interest thereon and penalties in respect thereof and “tax” and “taxation” shall be construed accordingly.

“ Tender Rig ” means either or both of Rig 1 and/or Rig 2 (as the context requires).

“ Termination Date ” means:

(a)

in respect of Rig 1, the date falling 120 days from 15 December 2012;

(b)

in respect of Rig 2, the date falling 120 days from 28 February 2013;

(c)

in respect of Rig 3, the date falling 180 days from 31 January 2013; and

(d)

in respect of Rig 4, the date falling 180 days from 25 March 2013.

“ Total Assets ” means, on any date, the Group’s (on a consolidated basis) book value of assets which are treated as assets in accordance with Accounting Principles adjusted for the difference between the Market Value and book value for all drilling units only if the units are fully consolidated into the Parent’s audited consolidated financial statements.

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“ Total Commitments ” means the aggregate of the CEXIM Facility Commitment and the Commercial Facility Commitment, being USD 440,000,000 at the date of this Agreement as that amount may be reduced, cancelled or terminated in accordance with this Agreement.

“ Total Loss ” means, in relation to any of the Rigs:

(a)

the actual, constructive, compromised, agreed, arranged or other total loss of such Rig; and/or

(b)

any hijacking, piracy, theft, condemnation, capture, seizure, destruction, abandonment, arrest, expropriation, confiscation, requisition or acquisition of such Rig, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to represent a governmental or official authority (excluding a requisition for hire for a fixed period not exceeding one (1) year without any right to extension) unless it is within one (1) month from the Total Loss Date redelivered to the full control of the relevant Borrower or any of the Guarantors.

“ Total Loss Date ” means:

(a)

in the case of an actual total loss of any of the Rigs, the date on which it occurred or, if that is unknown, the date when such Rig was last heard of;

(b)

in the case of a constructive, compromised, agreed or arranged total loss of any of the Rigs, the earlier of: (i) the date on which a notice of abandonment is given to the insurers (provided a claim for total loss is admitted by such insurers) or, if such insurers do not forthwith admit such a claim, at the date at which either a total loss is subsequently admitted by the insurers or a total loss is subsequently adjudged by a competent court of law or arbitration panel to have occurred or, if earlier, the date falling six (6) months after notice of abandonment of such Rig was given to the insurers; and (ii) the date of compromise, arrangement or agreement made by or on behalf of the relevant Borrower or Parent with the relevant Rig’s insurers in which the insurers agree to treat such Rig as a total loss; or

(c)

in the case of any other type of total loss, on the date (or the most likely date) on which it appears to the Agent that the event constituting the total loss occurred.

“ Transfer Certificate ” means a certificate substantially in the form as set out in Schedule 6 ( Form of Transfer Certificate ) or any other form agreed between the Agent and the Parent.

“ Transfer Date ” means, in respect of a Transfer (as defined in clause 26.2 ( Assignments and transfers by the Lenders )) the later of:

(a)

the proposed Transfer Date as set out in the Transfer Certificate relating to the Transfer; and

(b)

the date on which the Agent executes the Transfer Certificate.

“ Trust Property ” means, collectively:

(a)

all moneys duly received by the Security Agent under or in respect of the Finance Documents;

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(b)

any portion of the balance on any Earnings Account held by or charged to the Security Agent at any time;

(c)

the Security Interests, guarantees, security, powers and rights given to the Security Agent under and pursuant to the Finance Documents including, without limitation, the covenants given to the Security Agent in respect of all obligations of any Obligor;

(d)

all assets paid or transferred to or vested in the Security Agent or its agent or received or recovered by the Security Agent or its agent in connection with any of the Finance Documents whether from any Obligor or any other person; and

(e)

all or any part of any rights, benefits, interests and other assets at any time representing or deriving from any of the above, including all income and other sums at any time received or receivable by the Security Agent or its agent in respect of the same (or any part thereof).

“ Unpaid Sum ” means any sum due and payable but unpaid by any Borrower under the Finance Documents.

“ USD ” means the lawful currency of the United States of America.

“ Utilisation ” means utilisation of a Loan.

“ Utilisation Date ” means the date on which a Utilisation is made.

“ Utilisation Request ” means a notice substantially in the relevant form set out in Schedule 4 ( Form of Utilisation Request ).

“ VAT ” means value added tax.

“ Yard ” means, in relation to each Rig, the yard named in Schedule 2 ( Borrowers, Guarantors and Collateral Rigs ) as the builder of such Rig.

1.2

Construction

In this Agreement, unless the context otherwise requires:

(a)

clause and Schedule headings are for ease of reference only;

(b)

words denoting the singular number shall include the plural and vice versa;

(c)

references to clauses and Schedules are references, respectively, to the clauses and Schedules of this Agreement;

(d)

a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement;

(e)

references to a provision of law is a reference to that provision as it may be amended or re-enacted, and to any regulations made by the appropriate authority pursuant to such law;

(f)

the “ Agent ”, the “ Security Agent ”, a “ Bookrunner ”, a “ Mandated Lead Arranger ”, any “ Finance Party ”, any “ Lender ”, any “ Obligor ”, any “ Party ”, or any other person shall be construed so as to include its successors in title, permitted

20 (129)

assigns and permitted transferees and, in the case of the Agent and the Security Agent, any person for the time being appointed as Agent or Security Agent (as the case may be) in accordance with the Finance Documents;

(g)

a “ Finance Document ” or any other agreement or instrument is a reference to that Finance Document or other agreement or instrument as amended, novated, supplemented, extended or restated;

(h)

references to “ control ” means the power to appoint a majority of the board of directors or to direct the management and policies of an entity, whether through the ownership of voting capital, by contract or otherwise;

(i)

references to “ indebtedness ” includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;

(j)

reference to a “ month ” is a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month save that:

(i)

if any such numerically corresponding day is not a Business Day, such period shall end on the immediately succeeding Business Day to occur in that next succeeding calendar month or, if none, it shall end on the immediately preceding Business Day; and

(ii)

if there is no numerically corresponding day in that next succeeding calendar month, that period shall end on the last Business Day in that next succeeding calendar month,

(and references to “ months ” shall be construed accordingly);

(k)

“ USD ” and “ dollars ” denotes the lawful currency of the United States of America;

(l)

references to a “ person ” shall include any individual, firm, partnership, joint venture, company, corporation, trust, fund, body, corporate, unincorporated body of persons, or any state or any agency of a state or association (whether or not having separate legal personality); and

(m)

a Default (other than an Event of Default) is “ continuing ” if it has not been remedied or waived and an Event of Default is “ continuing ” if it has not been remedied or waived.

1.3

Third party rights

Unless expressly provided to the contrary in a Finance Document for the benefit of a Finance Party or another person who benefits from any indemnity under any Finance Document, a person who is not a party to a Finance Document has no right under the Contracts (Rights of Third Parties) Act 1999 (the Third Parties Act) to enforce or enjoy the benefit of any term of the relevant Finance Document.

21 (129)

2.	THE FACILITY

2.1

Facility

Subject to the terms of this Agreement, the Lenders make available to the Borrowers, during the applicable Availability Period, a USD secured credit facility for Utilisations in the aggregate principal amount of up to the Total Commitments:

(a)

a term loan facility for up to four (4) advances of Loans in an amount equal to the CEXIM Facility Commitment (the “ CEXIM Facility Commitment ”); and

(b)

a term loan facility for up to four (4) advances of Loans in an amount equal to the Commercial Facility Commitment (the “ Commercial Facility Commitment ”).

2.2

Finance Parties’ rights and obligations

(a)

The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Finance Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.

(b)

The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from any of the Obligors shall be a separate and independent debt. A Finance Party may, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents.

2.3

Borrowers’ rights and obligations

2.3.1

The obligations of each Borrower under this Agreement are joint and several. Failure by a Borrower to perform its obligations under this Agreement shall constitute a failure by all of the Borrowers.

2.3.2

Each Borrower irrevocably and unconditionally jointly and severally with each other Borrower:

(a)

agrees that it is responsible for the performance of the obligations of each other Borrower under this Agreement;

(b)

acknowledges and agrees that it is a principal and original debtor in respect of all amounts due from the Borrowers under this Agreement; and

(c)

agrees with each Finance Party that, if any obligation of another Borrower under this Agreement is or becomes unenforceable, invalid or illegal for any reason it will, as an independent and primary obligation, indemnify that Finance Party immediately on demand against any and all Losses it incurs as a result of another Borrower not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by that other Borrower under this Agreement. The amount payable under this indemnity shall be equal to the amount which that Finance Party would otherwise have been entitled to recover.

22 (129)

2.3.3

The obligations of each Borrower under the Finance Documents shall continue until all amounts which may be or become payable by the Borrowers under or in connection with the Finance Documents have been irrevocably and unconditionally paid or discharged in full, regardless of any intermediate payment or discharge in whole or in part.

2.3.4

If any discharge, release or arrangement (whether in respect of the obligations of a Borrower or any security for those obligations or otherwise) is made by a Finance Party in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of the Borrowers under this Agreement will continue or be reinstated as if the discharge, release or arrangement had not occurred.

2.3.5

The obligations of each Borrower under the Finance Documents shall not be affected by an act, omission, matter or thing which, but for this clause (whether or not known to it or any Finance Party), would reduce, release or prejudice any of its obligations under the Finance Documents including:

(a)

any time, waiver or consent granted to, or composition with, any Obligor or other person;

(b)

the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any other Obligor;

(c)

the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;

(d)

any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person;

(e)

any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of a Finance Document or any other document or security;

(f)

any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or

(g)

any insolvency or similar proceedings.

2.3.6

Each Borrower waives any right it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from that Borrower under any Finance Document. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.

23 (129)

2.3.7

Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably and unconditionally paid or discharged in full, each Finance Party (or any trustee or agent on its behalf) may:

(a)

refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and no Borrower will be entitled to the benefit of the same; and

(b)

hold in an interest-bearing suspense account any money received from any Borrower or on account of any Borrower’s liability under any Finance Document.

2.3.8

Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Agent otherwise directs (on such terms as it may require), no Borrower shall exercise any rights (including rights of set-off) which it may have by reason of performance by it of its obligations under the Finance Documents:

(a)

to be indemnified by another Obligor;

(b)

to claim any contribution from any other Obligor or any guarantor of any Obligor’s obligations under the Finance Documents; and/or

(c)

to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party.

2.4

Parent’s Authority

(a)

Each Obligor (other than the Parent), by its execution of this Agreement, irrevocably authorises the Parent to act on its behalf as its agent in relation to the Finance Documents and authorises:

(i)

the Parent, on its behalf, to supply all information concerning itself, its financial condition and otherwise to the Finance Parties as contemplated under this Agreement and to give all notices and instruction to be given by such Obligor under the Finance Documents, to execute, on its behalf, any Finance Document and to enter into any agreement and amendment in connection with the Finance Documents (however fundamental and notwithstanding any increase in obligations of or other effect on an Obligor) including confirmation of guarantee obligations in connection with any amendment or consent in relation to the Facility, without further reference to or the consent of such Obligor and each Obligor to be obliged to confirm such authority in writing upon the request of the Agent; and

(ii)

each Finance Party to give any notice, demand or other communication to be given to or served on such Obligor pursuant to the Finance Documents to the Parent on its behalf, and in each such case such Obligor will be bound thereby (and shall be deemed to have given/received notice thereof) as though such Obligor itself had been given such notice and instructions, executed such agreement or received any such notice, demand or other communication.

(b)

Every act, omission, agreement, undertaking, waiver, notice or other communication given or made by the Parent under this Agreement, or in connection with this Agreement (whether or not known to any Obligor) shall be binding for all purposes on all other Obligors as if the other Obligors had expressly made, given or concurred with the same. In the event of any conflict between any notice or other communication of the Parent and any other Obligor, the choice of the Parent shall prevail.

24 (129)

3.	PURPOSE

3.1

Purpose

The Borrowers shall apply all amounts utilised by it hereunder towards partially financing the remaining capital expenditure related to the Rig to which the relevant Utilisation relates.

3.2

Monitoring

Without prejudice to the obligations of the Borrowers under this clause 3 ( Purpose ), no Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.

4.	CONDITIONS PRECEDENT

4.1

Conditions precedent for the First Utilisation Date

The Lenders will only be obliged to comply with clause 5.4 ( Lenders’ participation ) if on or before the First Utilisation Date, the Agent, or its duly authorised representative, has received all of the documents and other evidence listed in Part I of Schedule 3 ( Conditions precedent to the First Utilisation Date ) in form and substance satisfactory to the Agent.

4.2

Conditions precedent for any Utilisation (including the first Utilisation)

For any Utilisation (including the first Utilisation), the Lenders will only be obliged to comply with clause 5.4 ( Lenders’ participation ) if on or before the proposed Utilisation Date the Agent, or its duly authorised representative, has received all of the documents and evidence listed in Part II of Schedule 3 ( Conditions precedent to any Utilisation (including the first Utilisation) ) in form and substance satisfactory to the Agent.

4.3

Further conditions precedent

The Lenders will only be obliged to comply with clause 5.4 ( Lenders’ participation ) if on the date of a Utilisation Request and on the proposed Utilisation Date:

(a)

no Default is continuing or would result from the proposed Utilisation; and

(b)

the representations and warranties contained in clause 20 ( Representations and warranties ) deemed to be repeated on those dates are true and correct in all material respects.

4.4

Conditions Subsequent

It shall be a condition subsequent to the Lenders continuing to make the Loans and Commitments available that within the relevant timeline as specified in Part III of Schedule 3

25 (129)

( Conditions Subsequent to each Utilisation Date ) the Agent has received originals or certified copies of all of the documents and other evidence listed in Part III of Schedule 3 ( Conditions Subsequent to each Utilisation Date) in form and substance satisfactory to the Agent (acting on the instructions from the Required Lenders).

4.5

Waiver of conditions precedent and conditions subsequent

The conditions specified in this clause 4 ( Conditions Precedent ) are solely for the benefit of the Finance Parties and may be waived on their behalf in whole or in part and with or without conditions by the Agent (acting on the instructions of the Required Lenders unless it is a non-material matter of administrative or technical character where the Agent may act in its sole discretion), save for conditions which are comprised by clause 34.3.2 ( Exceptions ) which will be subject to consent from all the Lenders. The Finance Parties shall be notified by the Agent of a waiver granted pursuant to this clause.

5.	UTILISATION

5.1

Delivery of a Utilisation Request

The Borrowers may utilise the Facility by delivering to the Agent a duly completed Utilisation Request no later than 10:00 am (London time) three (3) Business Days prior to the proposed Utilisation Date.

5.2

Completion of a Utilisation Request

A Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:

(a)

it specifies to which Rig it relates and the amount of the proposed Rig Advance under the CEXIM Facility and the Commercial Facility;

(b)

the proposed Utilisation Date is a Business Day within the applicable Availability Period;

(c)

the amount of the proposed Rig Advance under the CEXIM Facility and the Commercial Facility is in a minimum amount of USD 1,000,000 and which (together with the Loans outstanding) is not more than is available pursuant to clause 2.1 ( Facility ) and which complies with clause 5.3 ( Availability );

(d)

the currency specified is USD; and

(e)

the proposed Interest Period complies with clause 10 ( Interest Periods ).

5.3

Availability

(a)

Any amount of the Total Commitments not utilised by the expiry of the applicable Availability Period shall automatically be cancelled at close of business in London on such date.

(b)

Only four Utilisations, being one per Rig, may be made under the CEXIM Facility. No CEXIM Facility Loan may subsequently be re-borrowed once repaid.

26 (129)

(c)

Only four Utilisations, being one per Rig, may be made under the Commercial Facility. No Commercial Facility Loan may subsequently be re-borrowed once repaid.

(d)

Each Utilisation under the Agreement must be made between the CEXIM Facility and the Commercial Facility in the following proportions:

(i)

CEXIM Facility, 70%; and

(ii)

Commercial Facility, 30%,

and no Utilisation can be made under the Agreement in respect of the CEXIM Facility only or the Commercial Facility only or in different proportions to that stated under this clause 5.3(d).

(e)

The Utilisation which relates to Rig 1 must not exceed the lower of (i) USD100,500,000 and (ii) eighty-four point five per cent (84.5%) of the Eligible Contract Price for that Rig.

(f)

The Utilisation which relates to Rig 2 must not exceed the lower of (i) USD98,000,000 and (ii) eighty-four point five per cent (84.5%) of the Eligible Contract Price for that Rig.

(g)

The Utilisation which relates to Rig 3 must not exceed the lower of (i) USD121,000,000 and (ii) fifty-six point one per cent (56.1%) of the Eligible Contract Price for that Rig.

(h)

The Utilisation which relates to Rig 4 must not exceed the lower of (i) USD120,500,000 and (ii) fifty-six point nine per cent (56.9%) of the Eligible Contract Price for that Rig.

(i)

The Loan shall not exceed the lesser of (i) the Total Commitments and (ii) sixty-six point four per cent (66.4%) of the Eligible Contract Price for all of the Rigs.

5.4

Lenders’ participation

Upon receipt of a Utilisation Request, the Agent shall notify each Lender of the details of the requested Loan and the amount of each Lender’s participation in the relevant Loan. If the conditions set out in this Agreement have been met, each Lender shall no later than 10:00 am (London time) on the relevant Utilisation Date make available to the Agent for the account of the Borrowers an amount equal to its participation in the Loan to be advanced pursuant to the relevant Utilisation Request.

6.	REPAYMENT AND REDUCTIONS

6.1

Scheduled Repayments

(a)

The Borrowers shall repay the Rig Advances by consecutive semi annual repayments in the amounts as set out, on an indicative basis, in Schedule 7 ( Indicative Repayments/Reductions ) and the first repayment shall occur six months after the Utilisation Date in respect of such Rig Advances. The repayments received by the Agent in respect of the Rig Advances shall be applied against each Rig Advance on a pro rata basis as between each Facility.

(b)

On or around the Utilisation Date relating to the Rig Advances in respect of a Rig, the Agent shall (if deemed necessary by the Agent) provide to the Lenders and the Borrowers a repayment and reduction schedule (a “ Repayment Schedule ”) for the relevant Rig Advances setting out the repayment dates and the amount of each instalment for such Rig. Each Repayment Schedule shall be binding on the Borrowers and the Lenders.

27 (129)

6.2

Final repayment of each Rig Advance

On the Final Maturity Date the Borrowers shall repay all sums then outstanding under this Agreement and the other Finance Documents in full at such date (if any).

7.	VOLUNTARY PREPAYMENT AND CANCELLATION

7.1

Voluntary prepayment

Subject to clause 7.3.6 ( Application ) below, the Borrowers may, by giving the Agent not less than three (3) Business Days prior written notice, prepay the whole or any part of any Rig Advance (but if in part, in a minimum amount of USD 1,000,000 and in integral multiples of USD 1,000,000 (or such lesser amount as consented to by the Agent)). Each and any prepayment shall relate to one Rig Advance only.

7.2

Voluntary cancellation

The Borrowers may, by giving the Agent not less than three (3) Business Days prior written notice, permanently reduce, cancel or terminate all or part of the unutilised portions of the CEXIM Facility Commitment and Commercial Facility Commitment (but if in part, in a minimum amount of USD 1,000,000 and in integral multiples of USD 1,000,000), provided that any cancellation shall be made on a pro rata basis as between the CEXIM Facility and the Commercial Facility).

7.3

Terms and conditions for prepayments and cancellation

7.3.1

Irrevocable notice

The Borrowers may not prepay or cancel all or part of the Loans except as expressly provided in this Agreement.

Any notice of prepayment or cancellation by the Borrowers under this clause 7 shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date upon which the prepayment or cancellation is to be made and the amount of the prepayment or cancellation.

7.3.2

Additional payments

Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Break Costs, without premium or penalty.

28 (129)

7.3.3

Time of prepayment and cancellation

The Borrowers shall not repay or prepay all or any part of any Rig Advance or cancel all or any part of the CEXIM Facility Commitment or the Commercial Facility Commitment except at the times and in the manner expressly provided for in this Agreement.

7.3.4

No reinstatement

No amount of the Commitments cancelled nor any amount of any Rig Advance prepaid under this Agreement may subsequently be reinstated. The Borrowers may not utilise any part of the Facility which has been cancelled.

7.3.5

Forwarding of notice of prepayment and cancellation

If the Agent receives a notice under this clause 7 it shall promptly forward a copy of that notice to the Lenders.

7.3.6

Application

Any voluntary cancellation and prepayment made pursuant to this clause 7 shall, in respect of the relevant Rig Advance, be applied pro rata against the CEXIM Facility Loan outstanding and Commercial Facility Loan outstanding in respect of such Rig Advance and against cancellation of the Commitment pro rata on each of the scheduled repayments as set out in Schedule 7 ( Indicative Repayments/Reductions ) (as amended or replaced from time to time).

7.3.7

Amended Repayment and Reduction Schedule

Upon any such prepayment or cancellation the Agent shall, if applicable, replace Schedule 7 ( Indicative Repayments/Reductions ) with an amended and new repayment and reduction schedule reflecting the correct scheduled amounts and provide a copy to the Borrowers and the Lenders thereof.

8.	MANDATORY REDUCTION, PREPAYMENT AND CANCELLATION

8.1

Total Loss or sale

(a)

If any of the Rigs are sold or otherwise disposed of in whole or in part, or suffers a Total Loss, on the Disposal Reduction Date, the Loan(s) shall be prepaid with an amount equal to the Disposal Reduction Amount and otherwise in accordance with clause 8.6 ( Terms and conditions for prepayments/reductions and cancellation ). For the purpose of this clause 8.1 the following definition shall apply:

“ Disposal Reduction Amount ” means the amount equal to the Loans outstanding plus the Available Commitments multiplied with such proportion as the Market Value of such Rig bears to the aggregate of the Market Values of all the Rigs immediately prior to its Total Loss or completion of its sale or disposal at the date of the Total Loss or completion of the sale or disposal of such Rig;

“ Disposal Reduction Date ” means, in relation to a Rig:

(i)

where such Rig has become a Total Loss, the date which is the earlier of the date the disposal reduction amount is available and ninety (90) days after such Rig became a Total Loss or such later date as may be agreed in writing by the Agent (acting on the instructions of the Lenders); or

(ii)

where such Rig is sold or otherwise disposed of, the date upon which the sale or disposal of such Rig is completed.

29 (129)

8.2

Illegality and Lender’s financial requirements

If it becomes unlawful under any law, regulation, treaty or directive (whether or not having the force of law) in any applicable jurisdiction for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in the Loan:

(a)

that Lender shall promptly notify the Agent upon becoming aware of that event;

(b)

the Agent shall promptly notify the Borrowers (specifying the obligations the performance of which is thereby rendered unlawful and the law giving rise to the same and/or the Lenders’ financial status) upon receipt of notification in accordance with paragraph (a) above;

(c)

upon the Agent notifying the Borrowers, the Commitment of that Lender will be immediately reduced to zero and cancelled; and

(d)

the Borrowers shall repay that Lender’s participation in the Loans on the last day of the Interest Period occurring after the Agent has notified the Borrowers or, if earlier, the date specified by the Lender in the notice delivered to the Agent (being no earlier than the last day of any applicable grace period permitted by law).

8.3

Minimum Market Value

Upon a non-compliance of clause 24.1 ( Minimum Market Value ), the Facility shall be repaid or reduced (as applicable) in accordance with clause 8.5 ( Terms and conditions for prepayments/reductions and cancellation ) on the date falling 60 days after such breach by an amount equal to the amount which is required for the Borrowers to become compliant with clause 24.1 ( Minimum Market Value ) again.

8.4

Change of control

(a)

any of the Obligors (other than the Parent itself) ceases to be a one hundred per cent (100%) owned Subsidiary of the Parent, unless a prior written consent from the Lenders has been given;

(b)

any person, other than Hemen Holding Limited (or a company controlled more than fifty per cent (50%) by the John Fredriksen Family), or group of persons acting in concert, obtains more than fifty per cent (50%) of the voting rights or share capital or otherwise control the appointment of members of the board of directors of the Parent, unless the new controlling shareholder(s) is/are acceptable to the Lenders; or

(c)

Hemen Holding Limited (and/or one or more companies controlled more than fifty per cent (50%) by the John Fredriksen Family) ceases to own a minimum of twenty per cent (20%) or more of the voting rights or share capital or otherwise control the appointment of members of the board of directors of the Parent, unless a prior written consent from the Lenders has been given;

30 (129)

the Total Commitment shall be automatically cancelled and all Loans and other amounts outstanding under the Finance Documents shall be prepaid within sixty (60) days thereafter.

For the purpose of this clause 8.4 the following definitions shall apply:

“ John Fredriksen Family ” shall mean John Fredriksen, his direct lineal descendants, the personal estate of any of the aforementioned persons and any trust created for the benefit of one or more of the aforementioned persons and their estates.

8.5

Charter Contract termination

(a)

If any Charter Contract in respect of a Rig is terminated (for whatever reason) or ceases to be in force (except as a result of it being a Total Loss) and no Replacement Charter is awarded within one hundred and eighty (180) days of such termination etc., on the one hundred and eightieth (180th) day after such termination etc, the Loan shall be prepaid with an amount equal to the Charter Contract Reduction Amount and otherwise in accordance with clause 8.6 ( Terms and conditions for prepayments/reductions and cancellation ). If any Charter Contract in force at this date of this Agreement expires through effluxion of time or if a Replacement Charter is entered into pursuant to this clause 8.5, the Borrowers shall provide the Agent with a replacement Schedule 2 ( Borrowers, Guarantors and Collateral Rigs ) (a “ Replacement Schedule ”) as soon as practicable, which Replacement Schedule shall, when initialled by the Rig Owners, the Parent and the Agent, shall replace the Schedule 2 ( Borrowers, Guarantors and Collateral Rigs ) then scheduled to this Agreement.

(b)

For the purpose of this clause 8.5 the following definitions shall apply:

“ Charter Contract Reduction Amount ” means the amount equal to the Loans outstanding plus the Available Commitments multiplied with such proportion as the Market Value of such Rig bears to the aggregate of the Market Values of all the Rigs immediately prior to the relevant termination, cancellation, rescinding or frustration.

“ Replacement Charter ” means a drilling contract with a duration exceeding six (6) months including an operating rate of minimum USD 100,000 per day (in respect of a Jack up Rig) or USD 85,000 per day (in respect of a Tender Rig).

8.6

Terms and conditions for prepayments/reductions and cancellation

8.6.1

Application

(a)

Any mandatory prepayments and/or reductions and/or cancellations (as the case may be) shall be applied pro rata against the CEXIM Facility Loan outstanding and the Commercial Facility Loan outstanding and pro rata on each of the scheduled repayments as set out in Schedule 7 ( Indicative Repayments/Reductions ) other than in respect of a prepayment pursuant to clause 8.2 ( Illegality and Lender’s financial requirements ).

(b)

Upon any such reduction, the Agent shall, if applicable, replace Schedule 7 ( Indicative Repayments/Reductions ) with an amended and new repayment and reduction schedule reflecting the correct scheduled amounts and provide a copy to the Borrowers and the Lenders thereof.

31 (129)

8.6.2

Additional payments

Upon any reduction of the Commitments under this clause 8, the Borrowers shall repay the Loans outstanding by an amount sufficient to ensure that the total aggregate amount of the outstanding Loans shall constitute no more than the amount of the Commitment(s) of all the Lenders following the relevant reduction (less any amounts remaining to be drawn in respect of undelivered Rigs), such repayment to be made no later than on the day that the relevant reduction becomes effective. Any such prepayments shall be applied pro rata between the Lenders.

Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Break Costs, without premium or penalty.

8.6.3

No reinstatement

No amount of the Commitments cancelled or repaid under this clause 8 may subsequently be reinstated. The Borrowers may not utilise any part of the Facility which has been cancelled or any of the Facility which has been prepaid under this clause 8.

8.6.4

Forwarding of notice of prepayment and cancellation

If the Agent receives a notice under this clause 8 it shall promptly forward a copy of that notice to the Lenders and the Borrowers (if applicable).

9.	INTEREST

9.1

Calculation of interest

The rate of interest for the Loan for each Interest Period is the percentage rate per annum which is the aggregate of:

(a)

the Applicable Margin;

(b)

LIBOR; and

(c)

Mandatory Costs (if any).

9.2

Payment of interest

The Borrowers shall pay accrued interest on each Loan on each Interest Payment Date, however, if the Interest Period is longer than six (6) months, on the date falling at six (6) monthly intervals after the first day of the Interest Period.

9.3

Default interest

If an Obligor fails to pay any amount payable by it under the Finance Documents on its due date, interest shall accrue on the overdue amount from the due date and up to the date of actual payment (both before and after judgment) at a rate determined by the Agent to be two per cent (2.00%) higher than the rate which would have been payable if the overdue amount had, during

32 (129)

the period of non-payment, constituted a Loan in the currency of the overdue amount for successive Interest Periods, each of a duration selected by the Agent (acting reasonably). Any interest accruing under this clause 9.3 shall be immediately payable by the Obligors on demand by the Agent. Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable.

9.4

Notification of rates of interest

The Agent shall promptly notify the Lenders and the Borrowers of the determination of a rate of interest under this Agreement.

10.

INTEREST PERIODS

10.1

Selection of Interest Periods

(a)

The Borrowers may select an Interest Period (subject to sub-paragraph (d) below) for a Loan in a Utilisation Request or (if a Loan has already been made) in a Selection Notice.

(b)

Each Selection Notice is irrevocable and must be received by the Agent not later than 10:00 am (London time) three (3) Business Days before the commencement of that Interest Period.

(c)

If the Borrowers fail to deliver a Selection Notice to the Agent in accordance with paragraph (b) above, the relevant Interest Period will be three (3) months.

(d)

The Borrowers may select an Interest Period of three (3) or six (6) months.

(e)

An Interest Period for a Loan shall not extend beyond the Final Maturity Date, but shall be shortened so that it ends on the Final Maturity Date.

(f)

An Interest Period for the maturing part of a Loan shall not extend beyond the first subsequent scheduled repayment date after the Utilisation Date of such Loan, but shall be shortened so that it ends on such scheduled repayment date.

(g)

Each Interest Period for a Loan shall start on the relevant Utilisation Date or (if already made) on the last day of its preceding Interest Period. The first Interest Period of a Loan shall be shortened so as to be aligned with the next occurring Interest Period of the other Loans.

10.2

Non-Business Day

If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).

10.3

Notification of Interest Periods

The Agent will notify the Borrowers and the Lenders of the Interest Periods determined in accordance with this clause 10.

33 (129)

11.

CHANGES TO THE CALCULATION OF INTEREST

11.1

Market disruption

(a)

If a Market Disruption Event occurs in relation to the Loan for any Interest Period, then the rate of interest on each Lender’s share of the Loan for the Interest Period shall be the rate per annum which is the sum of:

(i)

the Margin;

(ii)

any Mandatory Costs; and

(iii)

the rate notified to the Agent by that Lender as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period, to be that which expresses as a percentage rate per annum the cost to that Lender of funding its participation in the Loan from whatever source it may reasonably select.

(b)

In this Agreement, “ Market Disruption Event ” means:

(i)

at or about 11:00 am (London time) on the Quotation Day for the relevant Interest Period LIBOR is not available; or

(ii)

before close of business in London on the Quotation Day for the relevant Interest Period, the Agent receives notifications from:

(A)

a Lender or Lenders (whose participations exceed fifty per cent (50%) of the Loan); or

(B)

a Lender or Lenders in respect of the Commercial Facility (whose participations in the Commercial Facility exceed fifty per cent (50%) of the Commercial Facility Loan),

that the cost to it or them of obtaining matching deposits in the London interbank market would be in excess of LIBOR.

11.2

Alternative basis of interest or funding

If a Market Disruption Event occurs and the Agent or the Parent so require, the Agent and the Parent shall enter into negotiations (for a period of not more than thirty (30) days) with a view to agreeing a substitute basis for determining the rate of interest instead of LIBOR. Any alternative basis agreed pursuant to this clause 11.2 shall, with the prior consent of all the Lenders and the Parent, be binding on all Parties.

11.3

Break Costs

(a)

The Borrowers shall, within three (3) Business Days of demand by a Finance Party, pay to that Finance Party its Break Cost attributable to all or any part of the Loan or Unpaid Sum being paid by the Borrowers on a day other than the last day of an Interest Period for the Loan or Unpaid Sum.

(b)

Each Lender shall, as soon as reasonably practicable after a demand by the Agent, provide a certificate confirming the amount of its Break Cost for any Interest Period in which they accrue.

34 (129)

12.

FEES

12.1

Commitment fees

The Borrowers shall pay to the Agent (for distribution among the Lenders) a commitment fee of 40% of the Applicable Margin on the Lenders’ Available Commitment accruing from the date of this Agreement and up until and including the Termination Date relative to the final Rig Advance, payable quarterly in arrears on each Quarter Date and on the Termination Date or such other date upon which the Facility is terminated and/or cancelled in full. Any payment under this clause 12.1 which is due to be made on a day which is not a Business Day shall be made on the next Business Day in the same month (if there is one) or the preceding Business Day (if there is not).

12.2

Other fees

The Borrowers shall pay such other fees as set out in the Fee Letters.

13.

TAX GROSS-UP AND INDEMNITIES

13.1

Taxes

13.1.1

No withholding

All payments by the Obligors under the Finance Documents shall be made free and clear of and without deduction or withholding for or on account of any Tax or any other governmental or public payment imposed by the laws of any jurisdiction from which or through which such payment is made, unless a Tax deduction or withholding is required by law.

13.1.2

Tax gross-up

(a)

The relevant Obligor shall promptly upon becoming aware that it must make a Tax deduction or withholding (or that there is any change in the rate or the basis of a Tax deduction or withholding) notify the Agent accordingly. Similarly, a Lender shall notify the Agent on becoming so aware in respect of a payment payable to that Lender. If the Agent receives such notification from a Lender it shall notify the Parent.

(b)

If a Tax deduction or withholding is required by law to be made by an Obligor:

(i)

the amount of the payment due from the Obligor shall be increased to an amount which (after making any Tax deduction or withholding) leaves an amount equal to the payment which would have been due if no Tax deduction or withholding had been required; and

(ii)

that Obligor shall make that Tax deduction or withholding within the time allowed and in the minimum amount required by law.

(c)

Within thirty (30) days of making either a Tax deduction or withholding or any payment required in connection with that Tax deduction or withholding, the Obligor shall deliver to the Agent for the Finance Party entitled to the payment evidence

35 (129)

reasonably satisfactory to that Finance Party that the Tax deduction or withholding has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.

13.2

Tax indemnity

The Borrowers shall (within three (3) Business Days of demand by the Agent) pay to the Agent for the account of the relevant Finance Party an amount equal to the loss, liability or cost which a Finance Party determines will be or has been (directly or indirectly) suffered for or on account of any Tax by such Finance Party in respect of a Finance Document, save for any Tax on Overall Net Income assessed on a Finance Party or to the extent such loss, liability or cost is compensated under clause 13.1.2 ( Tax gross-up ).

13.3

VAT

All amounts set out, or expressed to be payable under a Finance Document by any Party to a Finance Document shall be deemed to be exclusive of any VAT. If VAT is chargeable, the Borrowers shall pay to the Agent for the account of such Finance Party (in addition to the amount required pursuant to the Finance Documents) an amount equal to such VAT.

14.

INCREASED COSTS

14.1

Increased Costs

(a)

The Borrowers shall, upon demand from the Agent, pay for the account of a Finance Party the amount of any Increased Cost incurred by that Finance Party or any of its affiliates which comes as a result of the introduction of or any change in (or in the interpretation, administration or application of) any law, regulation or treaty or any directive of any monetary authority (whether or not having the force of law) (including, but not limited to any laws and regulations implementing new or modified capital adequacy requirements), compliance with any law or regulation made after the date of this Agreement.

(b)

In this Agreement, the term “ Increased Costs ” means:

(i)

a reduction in the rate of return from the Facility or on a Finance Party’s (or its affiliate’s) overall capital;

(ii)

an additional or increased cost; or

(iii)

a reduction of any amount due and payable under any Finance Document,

which is incurred or suffered by a Finance Party or any of its affiliates to the extent that it is attributable to that Finance Party having entered into its Commitments or funding or performing its obligations under any Finance Document.

(c)

A Finance Party intending to make a claim pursuant to this clause 14.1 shall notify the Agent of the event giving rise to the claim, following which the Agent shall promptly notify the Parent. Each Finance Party shall as soon as practicable after a demand by the Agent, provide a confirmation showing the amount of its Increased Costs.

36 (129)

14.2

Exceptions

Clause 14.1 does not apply to the extent any Increased Cost is:

(a)

attributable to a Tax deduction or withholding required by law to be made by any Borrower;

(b)

compensated for by clause 13.1.2 ( Tax gross-up ) or clause 13.2 ( Tax Indemnity ); or

(c)

attributable to gross negligence or the wilful misconduct by the relevant Finance Party or its affiliates of any law or regulation.

15.

OTHER INDEMNITIES

15.1

Currency indemnity

(a)

If any sum due from an Obligor under the Finance Documents (a “ Sum ”), or any order, judgement or award given or made in relation to a Sum, has to be converted from the currency (the “ First Currency ”) in which that Sum is payable into another currency (the “ Second Currency ”) for the purpose of:

(i)

making or filing a claim or proof against a Borrower or any other Obligor; or

(ii)

obtaining or enforcing an order, judgement or award in relation to any litigation or arbitration proceedings,

the Borrowers shall as an independent obligation, within three (3) Business Days of demand, indemnify each Finance Party to whom that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.

(b)

Each of the Obligors waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency other than that in which it is expressed to be payable.

15.2

Other indemnities

The Borrowers shall within three (3) Business Days of demand, indemnify each Finance Party against any documented costs, loss or liability incurred by that Finance Party as a result of:

(a)

the occurrence of any Event of Default;

(b)

any Environmental Claim;

(c)

a failure by an Obligor to pay any amount due under the Finance Documents on its due date, including without limitation, any cost, loss or liability arising as a result of clause 29 ( Sharing among the Finance Parties );

(d)

the funding, or making arrangements to fund, its participation in the Loan requested by the Borrowers in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by that Lender alone); or

(e)

a Loan (or part thereof) not being prepaid in accordance with a notice of prepayment given by the Borrowers.

37 (129)

15.3

Indemnity to the Agent, the Security Agent, Mandated Lead Arrangers and Bookrunners

The Borrowers shall promptly on demand indemnify the Agent, Security Agent, the Mandated Lead Arrangers, the Bookrunners and any Lenders against any and all documented Losses incurred by the Agent, Security Agent, the Mandated Lead Arrangers, the Bookrunners or any Lenders (acting properly) as a result of:

(a)

without prejudice to clause 27.9 as applied by clause 27.22 to the Security Agent, investigating any event which it reasonably believes is a possible Event of Default; or

(b)

acting or verifying any notice, request or instruction which it reasonably believes to be genuine, correct or appropriately authorised; or

(c)

any action taken by the Agent or the Security Agent or any of their representatives, agents or contractors in connection with any powers conferred by any Security Document to remedy any breach of any Obligor’s obligations under the Finance Documents; or

(d)

making a demand under clause 18 ( Guarantee and Indemnity ) or enforcing any security under a Security Document.

16.

MITIGATION BY THE LENDERS

16.1

Mitigation

Without in any way limiting the obligations of the Borrowers hereunder, each Finance Party shall, in consultation with the Parent, take all reasonable steps for a period of fifteen (15) Business Days to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of:

(a)

clause 8.2 ( Illegality and Lender’s financial requirements );

(b)

clause 13 ( Tax gross-up and indemnities ); and

(c)

clause 14 ( Increased Costs ),

including (but not limited to) transferring its rights and obligations under the Finance Documents to another affiliate.

A Finance Party is not obliged to take any steps under this clause 16.1 if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it.

38 (129)

16.2

Replacement of a Lender

(a)

If:

(i)

any sum payable to any Lender by an Obligor is required to be increased under clause 13 ( Tax gross-up and indemnities ); or

(ii)

any Lender claims indemnification from the Borrowers under clause 14 ( Increased costs ),

the Parent may, whilst the circumstance giving rise to the requirement for that increase or indemnification continues, give the Agent notice of cancellation of the Commitment of that Lender and its intention to procure the repayment of that Lender’s participation in each Loan or give the Agent notice of its intention to replace that Lender in accordance with paragraph (d) below.

(b)

On receipt of a notice referred to in paragraph (a) above, the Commitment of that Lender shall immediately be reduced to zero.

(c)

On the last day of each Interest Period which ends after the Parent has given notice under paragraph (a) above (or, if earlier, the date specified by the Parent in that notice), the Borrowers shall repay that Lender’s participation in each Loan.

(d)

The Parent may, in the circumstances set out in paragraph (a) above, on ten (10) Business Days’ prior consultation with the Agent and the relevant Lender, replace that Lender by requiring that Lender to transfer (and, to the extent permitted by law, that Lender shall transfer) pursuant to clause 26 ( Changes to the Parties ) all (and not part only) of its rights and obligations under this Agreement to a Lender or other bank, financial institution, trust, fund or other entity selected by the Parent which confirms its willingness to assume and does not assume all the obligations of the transferring Lender in accordance with clause 26 ( Changes to the Parties ) for a purchase price in cash or other cash payment payable at the time of the transfer equal to the aggregate of:

(i)

the outstanding principal amount of such Lenders’ participation in each Loan;

(ii)

all accrued interest owing to such Lender;

(iii)

the Break Costs which would have been payable to such Lender pursuant to clause 11.3 ( Break Costs ) had the Borrowers prepaid in full that Lender’s participation in the Loan on the date of the transfer; and

(iv)

all other amounts payable to that Lender under the Finance Documents on the date of the transfer.

(e)

The replacement of a Lender pursuant to paragraph (d) above shall be subject to the following conditions:

(i)

neither the Borrowers or the Parent shall have any right to replace the Agent;

(ii)

neither the Agent nor the Lender shall have any obligation to find a replacement Lender; and

(iii)

in no event shall the Lender replaced under paragraph (d) above be required to pay or surrender any of the fees received by such Lender pursuant to the Finance Documents.

39 (129)

16.3

Indemnity

The Borrowers shall indemnify each Finance Party for all documented costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under clause 16.1 ( Mitigation ) and 16.2 ( Replacement of a Lender ).

17.

COSTS AND EXPENSES

17.1

Transaction expenses

The Borrowers shall promptly on demand pay to the Agent or the Security Agent, as the case may be, the amount of all documented costs and expenses (including legal fees) properly incurred by any of the Lenders and the Security Agent in connection with the negotiation, preparation, printing, perfection, execution, registration and syndication of:

(a)

this Agreement and any other documents referred to in this Agreement; and

(b)

any other Finance Documents executed after the date of this Agreement.

17.2

Amendment and enforcement costs, etc

The Borrowers shall, within three (3) Business Days of demand, reimburse the Agent, the Security Agent or another Finance Party for the amount of all costs and expenses (including legal fees) incurred by it in connection with:

(a)

the granting of any release, waiver or consent under the Finance Documents;

(b)

any amendment or variation of any of the Finance Documents; and

(c)

the preservation, protection, enforcement or maintenance of, or attempt to preserve or enforce, any of the rights of the Finance Parties under the Finance Documents.

18.

GUARANTEE AND INDEMNITY

18.1

Guarantee and indemnity

Each Guarantor irrevocably and unconditionally jointly and severally:

(a)

guarantees to the Security Agent (as trustee for the Finance Parties) and the other Finance Parties punctual performance by each other Obligor of all such Obligor’s obligations under the Finance Documents;

(b)

undertakes with the Security Agent (as trustee for the Finance Parties) and the other Finance Parties that whenever another Obligor does not pay any amount when due under or in connection with any Finance Document, it shall immediately on demand pay that amount as if it was the principal obligor; and

(c)

agrees with the Security Agent (as trustee for the Finance Parties) and the other Finance Parties that if any obligation guaranteed by it is or becomes unenforceable,

40 (129)

invalid or illegal, it will, as an independent and primary obligation indemnify that Finance Party immediately on demand against any cost, loss or liability it incurs as a result of an Obligor not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by that Obligor under any Finance Document on the date when it would have been due. The amount payable by a Guarantor under this indemnity will not exceed the amount it would have had to pay under this clause 18.1 if the amount claimed had been recoverable on the basis of a guarantee.

18.2

Continuing guarantee

This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.

18.3

Reinstatement

If any discharge, release or arrangement (whether in respect of the obligations of any Obligor or any security for those obligations or otherwise) is made by a Finance Party in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of each Guarantor under this clause 18 will continue or be reinstated as if the discharge, release or arrangement had not occurred.

18.4

Waiver of defences

The obligations of each Guarantor under this clause 18 will not be affected by an act, omission, matter or thing (whether or not known to it or any Finance Party) which, but for this clause, would reduce, release or prejudice any of its obligations under this clause 18 including (without limitation):

(a)

any time, waiver or consent granted to, or composition with, any Obligor or other person;

(b)

the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any other Obligor;

(c)

(d)

any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person;

(e)

any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Finance Document or any other document or security including without limitation any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document or other document or security;

41 (129)

(f)

any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or

(g)

any insolvency or similar proceedings.

18.5

Immediate recourse

Each Guarantor waives any right it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from that Guarantor under this clause 18. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.

18.6

Appropriations

Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party (or any trustee or agent on its behalf) may:

(a)

refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and no Guarantor shall be entitled to the benefit of the same; and

(b)

hold in an interest-bearing suspense account any moneys received from any Guarantor or on account of any Guarantor’s liability under this clause 18.

18.7

Deferral of Guarantors’ rights

Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Agent otherwise directs, no Guarantor will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this clause 18:

(a)

to be indemnified by another Obligor;

(b)

to claim any contribution from any other guarantor of any Obligor’s obligations under the Finance Documents;

(c)

to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party;

(d)

to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of which the Guarantors has given a guarantee, undertaking or indemnity under this clause 18;

(e)

to exercise any right of set-off against any other Obligor; and/or

(f)

to claim or prove as a creditor of any other Obligor in competition with any Finance Party.

42 (129)

If a Guarantor receives any benefit, payment or distribution in relation to such rights it will promptly pay an equal amount to the Agent for application in accordance with clause 30 ( Payment Mechanics ). This only applies until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full.

18.8

Additional security

This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party.

18.9

Maximum Liability

Notwithstanding anything to the contrary contained in this Agreement or any of the Finance Documents including this clause 18, the total and aggregate liability of each Guarantor hereunder shall be limited to USD 550,000,000 (maximum outstanding sums owed under the Finance Documents), plus any interest and costs.

19.

SECURITY

19.1

Security

(a)

The Obligors’ obligations and liabilities under the Finance Documents, including (without limitation) each Borrower’s obligation to repay the Facility together with all unpaid interest, default interest, commissions, charges, expenses and any other derived liability whatsoever of the Obligors towards the Finance Parties in connection with the Finance Documents, shall at any and all times until all amounts due to the Finance Parties hereunder have been paid and/or repaid in full, be secured by:

(i)

the Mortgages;

(ii)

the Account Security;

(iii)

the General Assignments; and

(iv)

the Share Charges.

(b)

Each of the Obligors undertakes to ensure that the above Security Documents are duly executed by the parties thereto in favour of the Security Agent (on behalf of the Finance Parties) on the date(s) required under this Agreement and are legally valid and in full force and effect on such dates.

(c)

Each Obligor shall promptly do all such acts or execute all such documents (including assignments, transfers, mortgages, charges, notices and instructions) as the Agent may reasonably specify (and in such form as the Agent may reasonably require):

(i)

to perfect the Security Interests created or intended to be created by that Obligor under or evidenced by the Security Documents (which may include the execution of a mortgage, charge, assignment or other security over all or any of

43 (129)

the assets which are, or are intended to be, the subject of the Security Documents) or for the exercise of any rights, powers and remedies of the Security Agent provided by or pursuant to the Finance Documents or by law;

(ii)

to confer on the Security Agent Security Interests over any property and assets of that Obligor located in any jurisdiction equivalent or similar to the Security Interest intended to be conferred by or pursuant to the Security Documents; and/or

(iii)

to facilitate the realisation of the assets which are, or are intended to be, the subject of the Security Documents.

(d)

Each Obligor shall take all such action as is available to it (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Security Interest conferred or intended to be conferred on the Security Agent by or pursuant to the Finance Documents.

20.

REPRESENTATIONS AND WARRANTIES

Each of the Obligors represents and warrants to each Finance Party as follows:

20.1

Status

Each Obligor is a limited liability company, duly incorporated, organised and validly existing under the laws of the jurisdiction of their incorporation as set out in Schedule 8 ( Corporate Structure ) and registration and have the power to own their assets and carry on their business as they are currently being conducted.

20.2

Binding obligations

(a)

Subject to (b) below, the Finance Documents to which any Obligors are a party constitute legal, valid, binding and enforceable obligations, and each Security Document creates the security interests which that Security Document purports to create and those security interests are, or will be, legal, valid, binding and enforceable securities with the priority designated therein, and no registration, filing, payment of tax or fees or other formalities are necessary or desired to render the Finance Documents enforceable in accordance with their terms against the Obligors, save for the registration of the Mortgages with the relevant Ship Registry which shall be completed prior to or on the relevant Utilisation Date (and the registration of the relevant Security Documents (if any) with the relevant Company Register of the Obligors which shall be completed within the applicable time limit in each relevant jurisdiction).

(b)

Finance Documents which according to this Agreement are not deemed to be delivered until the First Utilisation Date or subsequent Utilisation Date, will be in compliance with (a) above from the First Utilisation Date or subsequent Utilisation Date respectively.

44 (129)

20.3

No conflict with other obligations

The entry into and performance by it of, and the transactions contemplated by, the Finance Documents to which it is a party do not and will not conflict with:

(a)

any law or regulation or any order or decree of any judicial or official agency or court;

(b)

any constitutional documents of such Obligor; or

(c)

the Charter Contracts or any agreement or document to which it is a party or by which it is bound.

20.4

Power and authority

It has the power to enter into, perform and deliver, and has taken all necessary corporate actions to authorise its entry into and delivery of, performance, validity and enforceability of the Finance Documents to which it is a party and the transactions contemplated by those Finance Documents.

20.5

Authorisations and consents

All authorisations, approvals, consents and other matters, official or otherwise, required (i) in connection with the entering into, performance, validity and enforceability of the Finance Documents and the transactions contemplated hereby and thereby and (ii) for it to carry on its business as currently being conducted have been obtained or effected and are in full force and effect.

20.6

Taxes

It has complied with all taxation laws in all jurisdictions where it is subject to taxation and has paid all Taxes and other amounts due to governments and other public bodies. No claims are being asserted against it with respect to any Taxes or other payments due to public or governmental bodies save as disclosed to the Lenders pursuant to clause 23.4 ( Taxation ). It is not required to make any withholdings or deductions for or on account of Tax from any payment it may make under any of the Finance Documents.

20.7

No Default

No Event of Default, Default or any prepayment event pursuant to clause 8 ( Mandatory Reduction, Prepayment and Cancellation ) is existing or might reasonably be expected to result from the making of the Utilisation or the entry into and performance of or any transaction contemplated by any of the Finance Documents. No other event or circumstance is outstanding which (in the reasonable opinion of the Agent or the Required Lenders) constitutes a default or (with the expiry of a grace period, giving of notice or the making of any determination or the fulfilment of any other applicable conditions or any combination of the foregoing) might constitute a default under any Charter Contracts, other agreement or instrument which is binding on it or any of its Subsidiaries (if any) or to which its (or any of its Subsidiaries’ (if any)) assets are subject and which has or might have a Material Adverse Effect.

45 (129)

20.8

No misleading information

Any factual information, documents, exhibits or reports relating to the Obligors and their respective Subsidiaries and which have been furnished to the Finance Parties by or on behalf of the Obligors are complete and correct in all material respects and do not contain any misstatement of fact or omit to state a fact making such information, exhibits or reports misleading in any material respect or no omission to disclose any off-balance sheet liabilities or other information, documents or agreements which if disclosed could reasonably be expected to affect the decision of a Finance Party to enter into a Finance Document.

20.9

Original Financial Statements

(a)

Complete and correct . The Original Financial Statements and the financial information most recently delivered to the Agent or the Lenders pursuant to clause 21 ( Information Undertakings ), save as disclosed to an Exchange, fairly and accurately represent the assets, liabilities and the financial condition of the Obligors and their respective Subsidiaries and have been prepared in accordance with Accounting Principles consistently applied.

(b)

No undisclosed liabilities . As of the date of the Original Financial Statements and the financial information most recently delivered to the Agent or the Lenders pursuant to clause 21 ( Information Undertakings ), none of the Obligors or any of its Subsidiaries had any material liabilities, direct or indirect, actual or contingent, and there is no material, unrealised or anticipated losses from any unfavourable commitments not disclosed by or reserved against in the Original Financial Statements, the most recent delivered financial information or in the notes thereto (save as disclosed to an Exchange).

(c)

No material change . Since the date of the Original Financial Statements and the financial information most recently delivered to the Agent or the Lenders pursuant to clause 21 ( Information Undertakings ), there has been no material adverse change in the business, operations, assets or condition (financial or otherwise) of any Obligor or its Subsidiaries which might have a Material Adverse Effect.

20.10

Pari passu ranking

Its payment obligations under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations preferred by mandatory law applying to companies generally.

20.11

No proceedings pending or threatened

No litigation, judgment, order, injunction, restraint, arbitration or administrative proceedings (private or public) of or before any court, arbitral body or agency, which if adversely determined, might reasonably be expected to have a Material Adverse Effect, have been started or are pending or (to the best of its knowledge and belief) have been threatened against it.

20.12

No existing Security Interest

Save as described in clause 19 ( Security ), as from the First Utilisation Date, no Security Interest exists over all or any of the present or future revenues or assets of any Obligor relating to assets

46 (129)

which are or will become the subject of the Security Documents and all of the Obligors’ rights, title and interest are freely assignable and chargeable in the manner contemplated by the Security Documents.

20.13

No immunity

The execution and delivery by it of each Finance Document to which it is a party constitute, and its exercise of its rights and performance of its obligations under each Finance Document will constitute, private and commercial acts performed for private and commercial purposes, and it will not (except for bankruptcy or any similar proceedings) be entitled to claim for itself or any or all of its assets immunity from suit, execution, attachment or other legal process in any proceedings taken in relation to any Finance Document.

20.14

No winding-up

It has not taken any corporate action nor have any other steps been taken or legal proceedings been started or threatened against it for its reorganisation, winding-up, dissolution or administration or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of it or any or all of its assets.

20.15

No breach of laws

(a)

It has not (and none of its Subsidiaries has) breached any law or regulation which breach (in the opinion of the Agent or the Required Lenders) has or is reasonably likely to have a Material Adverse Effect.

(b)

No labour disputes are current or, to the best of its knowledge and belief (having made due and careful enquiry), threatened against any member of the Group which have or are reasonably likely to have a Material Adverse Effect.

20.16

Environmental laws

(a)

Each Obligor is in compliance with clause 23.3 ( Environmental compliance ) and to the best of its knowledge and belief (having made due and careful enquiry) no circumstances have occurred which would prevent such compliance in a manner or to an extent which (in the opinion of the Agent or the Required Lenders) has or is reasonably likely to have a Material Adverse Effect.

(b)

No Environmental Claim and no other event or circumstances is outstanding which (with the expiry of a grace period, giving of notice or the making of any determination or the fulfilment of any other applicable conditions or any combination of the foregoing) might constitute an Environmental Claim has been commenced or is pending (to the best of its knowledge and belief (having made due and careful enquiry)) is threatened against any member of the Group where that claim has or is reasonably likely, if determined against that member of the Group, which (in the opinion of the Agent or the Required Lenders) have or are reasonably likely to have a Material Adverse Effect.

47 (129)

20.17

Ownership

The Parent owns (directly or indirectly) 100% of the shares and the ownership interests in each of the Rig Owners and the Intra-Group Charterers as described in Schedule 8 ( Corporate Structure ) hereto.

20.18

The Rigs

Each of the Rigs is (or will be at the time of delivery, as the case may be):

(a)

in the absolute ownership of the relevant Rig Owner described in Schedule 2 ( Borrowers, Guarantors and Collateral Rigs ) hereto free and clear of all encumbrances (other than current crew wages and the relevant Mortgage) and, the respective Rig Owner will be the sole, legal and beneficial owner of such Rig;

(b)

registered in the name of the relevant Rig Owner as described in Schedule 2 ( Borrowers, Guarantors and Collateral Rigs ) with a Ship Registry;

(c)

operationally seaworthy in every way and fit for service; and

(d)

classed with a classification society acceptable to the Required Lenders, free of all overdue requirements and recommendations.

20.19

No money laundering

It is acting for its own account in relation to the Facility and in relation to the performance and the discharge of its obligations and liabilities under the Finance Documents and the transactions and other arrangements effected or contemplated by the Finance Documents to which an Obligor is a party, and the foregoing will not involve or lead to contravention of any law or regulation applicable to it (including, without limitation, Directive 2005/60/EF (Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing) amending Council Directive 91/308, as amended from time to time);

20.20

Corrupt practices

It has observed, and to the best of its knowledge and belief, parties acting on its behalf have observed in the course of acting for it, all applicable laws and regulations relating to bribery or corrupt practices.

20.21

Material Adverse Effect

No event or circumstance has occurred which has had, or could reasonably be expected to have, a Material Adverse Effect.

20.22

Repetition

The representations and warranties set out in this clause 20 are deemed to be made by each of the Obligors on the date of this Agreement and shall be deemed to be repeated:

(a)

on the date of a Utilisation Request;

(b)

on each Utilisation Date;

48 (129)

(c)

on the first day of each Interest Period; and

(d)

in each Compliance Certificate forwarded to the Agent pursuant to clause 21.2 ( Compliance Certificate ) (or, if no such Compliance Certificate is forwarded, on each day such certificate should have been forwarded to the Agent at the latest).

21.

INFORMATION UNDERTAKINGS

The Parent gives the undertakings set out in this clause 21 to each Finance Party and such undertakings shall remain in force throughout the Security Period;

21.1

Financial statements

The Parent shall supply to the Agent in sufficient copies for all of the Lenders:

(a)

as soon as the same become available, but in any event within one hundred and eighty (180) days after the end of each of the Obligors’ financial year respectively;

(i)

the Parent’s audited consolidated financial statements; and

(ii)

each of the Rig Owner’s and the remaining Guarantor’s audited (to the extent applicable) unconsolidated accounts for that financial year;

(b)

as soon as the same become available, but in any event within seventy (70) days after each relevant Quarter Date, the Parent’s consolidated unaudited financial statements for that financial quarter;

(c)

as soon as the same become available, but in any event no later than 70 days after 30 June and 31 December each calendar year copies of the Group’s Cash Flow Projections for the following four (4) calendar years after such dates; and

(d)

any other financial information as the Agent or any of the Lenders may from time to time reasonably request.

21.2

Compliance Certificate

The Parent shall supply to the Agent, with each set of financial statements delivered pursuant to clause 21.1 ( Financial statements ), a Compliance Certificate signed by an authorised officer of the Parent setting out (in reasonable detail) inter alia computations as to compliance with clause 22 ( Financial Covenants ) as at the date at which those financial statements were drawn up together with any relevant supporting documentation enabling the Lenders to determine and monitor the Parent’s compliance with clause 22 ( Financial Covenants ), clause 24.1 ( Minimum Market Value ) and clause 24.3 ( Insurances ) together with confirmation that the Rigs are either employed on the contracts described in Schedule 2 ( Borrowers, Guarantors and Collateral Rigs ) hereto or, in the circumstances set out in clause 8.5 ( Charter Contract termination ), are employed in contract with a counterparty and on terms satisfactory to the Required Lenders.

21.3

Requirements as to financial statements

The Parent shall procure that each set of financial statements delivered pursuant to clause 21.1 ( Financial statements ) consist of balance sheets, profit and loss statements and cash flow analysis and is prepared using Accounting Principles, accounting practices and financial

49 (129)

reference periods consistent with those applied in the preparation of the Original Financial Statements for each of the Obligors, as the case may be, unless, in relation to any set of financial statements, it notifies the Agent that there has been a change in Accounting Principles, the accounting practices or reference periods and its Auditors deliver to the Agent:

(a)

a description of any change necessary for those financial statements to reflect Accounting Principles, accounting practices and reference periods upon which the Original Financial Statements were prepared; and

(b)

sufficient information, in form and substance as may be reasonably required by the Agent, to enable the Lenders to determine whether clause 22 ( Financial Covenants ) has been complied with and make an accurate comparison between the financial position indicated in those financial statements and the Original Financial Statements.

Any reference in this Agreement to those financial statements shall be construed as a reference to those financial statements as adjusted to reflect the basis upon which the Original Financial Statements were prepared.

21.4

Information - miscellaneous

The Parent shall notify the Agent and/or supply to the Agent (in sufficient copies for all the Lenders, if the Agent so requests):

(a)

all documents dispatched by the Parent (and by each of the Obligors, to the extent requested by the Agent) to its shareholders, or to or from its creditors generally at the same time as they are dispatched;

(b)

immediately upon becoming aware of them; breaches of contracts, the details of any litigation, judgment, order, injunction, restraint, arbitration or administrative proceedings which are current, threatened, alleged or pending against any of the Obligors and which (in the opinion of the Agent or the Required Lenders) might, if adversely determined, be reasonably expected to have a Material Adverse Effect;

(c)

immediately such further information regarding the business, properties, assets and operations (financial or otherwise) of the Obligors and its Subsidiaries as any Finance Party (through the Agent) may reasonably request;

(d)

all filings with or reports forwarded to any Exchange; and

(e)

such updates of forecasts as the Agent may reasonably request.

21.5

Notification of Default

The Parent shall notify the Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence.

50 (129)

21.6

Notification of Environmental Claims

The Parent shall inform the Agent in writing as soon as reasonably practicable upon becoming aware of the same:

(a)

if any material Environmental Claim has been commenced or (to the best of the Obligors’ knowledge and belief) is threatened against any of the Obligors, any of the Intra-Group Charterers or any of the Rigs; and

(b)

of any incident, event, fact or circumstances which will or are reasonably likely to result in any material Environmental Claim being commenced or threatened against any of the Obligors, any of the Intra-Group Charterers or any of the Rigs.

21.7

“Know your customer” checks

If:

(i)

the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;

(ii)

any change in the status of an Obligor after the date of this Agreement; or

(iii)

a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer,

obliges the Agent, the Security Agent or any Lender (or, in the case of any prospective new Lender) to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, each Obligor shall promptly upon the request of the Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent or the Security Agent (for itself or on behalf of any Lender) or any Lender (for itself or, in the case of any prospective new Lender, on behalf of any prospective new Lender) in order for the Agent, the Security Agent, such Lender or, in the case of any prospective new Lender, any prospective new Lender to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

Each Lender shall promptly upon the request of the Agent or the Security Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent or the Security Agent (for itself) in order for the Agent or the Security Agent to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

22.

FINANCIAL COVENANTS

The financial covenants in this clause 22 are granted in favour of each Finance Party by the Parent and such financial covenants shall remain in force throughout the Security Period.

22.1

Minimum Liquidity

The Parent will procure that the Minimum Liquidity of the Group will not fall below USD 150,000,000.

51 (129)

22.2

Leverage Ratio

The Parent will procure that throughout the term of this Agreement the Leverage Ratio of the Group will not exceed 4.5:1.

22.3

Interest Cover Ratio

The Parent will procure that the Group’s Interest Cover Ratio shall be minimum 2.5:1 throughout the term of this Agreement.

22.4

Current Ratio

The Parent will procure that the Group’s Current Ratio is minimum 1:1 throughout the term of this Agreement.

22.5

Equity Ratio

The Parent will procure that the Group’s Equity Ratio shall not be less than 30 per cent throughout the term of this Agreement.

22.6

Financial testing

The financial covenants set out in this clause 22 shall be calculated in accordance with Accounting Principles and tested by reference to the latest financial statements (whether audited or unaudited) and each Compliance Certificate, and presented to the Agent in satisfactory form and substance.

23.

GENERAL UNDERTAKINGS

Each Obligor gives the undertakings set out in this clause 23 to each Finance Party and such undertakings shall remain in force throughout the Security Period.

23.1

Authorisations etc.

Each of the Obligors shall promptly:

(a)

obtain, comply and do all that is necessary to maintain in full force and effect; and

(b)

supply certified copies to the Agent (if so requested) of, any authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration required under any law or regulation of its jurisdiction of incorporation to enable it to perform its obligations under the Finance Documents and to ensure the legality, validity, enforceability or admissibility in evidence in its jurisdiction of incorporation of any Finance Document.

23.2

Compliance with laws

Each of the Obligors shall, and shall procure that each member of the Group will, comply, in all respects with all laws and regulations and constitutional documents to which it and the Rigs may be subject, where failure to do so, in the opinion of the Agent or the Required Lenders, has or is reasonably likely to have a Material Adverse Effect.

52 (129)

23.3

Environmental compliance

Each Obligor shall (and shall ensure that each member of the Group will):

(a)

comply with all Environmental Law;

(b)

obtain, maintain and ensure compliance with all requisite Environmental Approvals; and

(c)

implement procedures to monitor compliance with and to prevent liability under any Environmental Law,

where failure to do so, (in the opinion of the Agent or the Required Lenders) has or is reasonably likely to have a Material Adverse Effect.

23.4

Taxation

(a)

Each Obligor shall (and the Parent shall ensure that each member of the Group will) pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that:

(i)

such payment is being contested in good faith;

(ii)

adequate reserves are being maintained for those Taxes and the costs required to contest them which have been disclosed in its latest financial statements delivered to the Agent under clause 21.1 ( Financial statements ); and

(iii)

such payments can be lawfully withheld and failure to pay such Taxes does not (in the opinion of the Agent or the Required Lenders) have or is not likely to have a Material Adverse Effect.

(b)

None of the Obligors may change its residence for Tax purposes.

23.5

Pari passu ranking

Each of the Obligors shall ensure that its obligations under the Finance Documents do and will rank at least pari passu with all its other present and future unsecured and unsubordinated obligations, except for those obligations which are preferred by mandatory law applying to companies generally in the jurisdictions of their incorporation or in the jurisdiction in the ports of calls.

23.6

Title

Each Rig Owner shall (or will as of the time of delivery of a Rig, as the case may be), and the Parent shall procure that all Intra-Group Charterers will (to the extent applicable), hold full legal title to and own the entire beneficial interest in the Rigs, the Insurances and their Earnings, free of any Security Interest and other interests and rights of every kind, except for those created by the Finance Documents and as set out in clause 23.7 ( Negative pledge ).

53 (129)

23.7

Negative pledge

(a)

None of the Rig Owners shall create or permit to subsist any Security Interest save for Permitted Encumbrances over any of its present or future undertakings, property, assets, rights or revenues (whether secured by the Security Documents or not).

(b)

None of the Intra-Group Charterers shall create or permit to subsist any Security Interest save for Permitted Encumbrances over any of its present or future undertakings, property, assets, rights or revenues that are subject to any Security Interest by the Security Documents.

23.8

Change of business

Except with the prior written consent of the Required Lenders, the Obligors will not, and shall procure that no other member of the Group will, cease to carry on or make any change in all or any part of its business and activities as conducted as of the date hereof, or carry on any other business, except for similar related business as presently conducted. The Parent will not change the place of its jurisdiction or its organisation without the prior written consent of the Required Lenders.

23.9

Finance Documents

The Obligors shall perform all of their obligations under the Finance Documents at all times in the manner and upon the terms set out therein.

23.10

Undertaking to procure subordination of additional debt

Subject to clause 23.7 ( Negative pledge ), the Obligors undertake to procure (in terms acceptable to the Required Lenders) the subordination, in point of payment and priority, of any Financial Indebtedness attributable to any Rig Owners to any debt created pursuant to this Agreement.

23.11

Mergers and demergers

Except with the prior written consent of the Required Lenders, the Obligors will not (i) enter into any merger or consolidation with any other company unless with another Group member and each Obligor will survive as a separate legal entity remaining bound in all respects by its obligations and liabilities under the Finance Documents, (ii) demerge itself into any two or more companies or (iii) undertake any other form of corporate restructuring.

23.12

Financial year

Except with the prior written consent of the Required Lenders, the Obligors will not, and shall procure that no other member of the Group will, alter its financial year end (currently 31 December as of the date of this Agreement).

23.13

Bank accounts

(a)

It shall pay and credit all its Earnings (excluding service income for manning, services and procurement etc. held with separate third party contractors for the purpose of optimising the fiscal structure of the drilling operations) to the Earnings Accounts and maintain all its Earnings Accounts with the Account Bank pursuant to the Account

54 (129)

Bank Agreement, unless otherwise agreed to by the Security Agent (on behalf of all Lenders) and subject to satisfactory security arrangements being entered into in favour of the Finance Parties.

(b)

It shall procure that the Earnings which derive from the Charter Rates are paid to the Earnings Accounts as soon as possible after the receipt by such Intra Group Charterer of the Charter Rate or any other rate or hire for the relevant Rig.

23.14

Dividends of the Parent and Rig Owners

23.14.1

The Parent may

(a)

pay dividends (or make any other distributions to its shareholders),

(b)

buy-back its own common stock and/or

(c)

make new material investments in any company, shares, common stock or enter into any kind of new forward contracts (including total return swaps),

only to the extent that:

(i)

no Default is continuing or would result from the proposed transaction, and

(ii)

after giving effect to such transaction, the Parent and its Subsidiaries are in compliance with the Financial Covenants set out in clause 22 ( Financial Covenants ) of this Agreement.

23.14.2

The Rig Owners may pay dividends (or make any other distributions to its shareholders), only to the extent that:

(iii)

no Default is continuing or would result from the proposed transaction, and

(iv)

after giving effect to such transaction, the Parent and its Subsidiaries are in compliance with the Financial Covenants set out in clause 22 ( Financial Covenants ) of this Agreement.

23.15

Restrictions on indebtedness

(a)

None of the Rig Owners shall incur, create or permit to subsist any Financial Indebtedness other than as incurred under the Finance Documents.

(b)

The restrictions in paragraph (a) above do not apply to;

(i)

Hedging . Indebtedness incurred under any interest rate or foreign exchange agreement entered into in the ordinary course of business and which are not of a speculative nature and which is subordinated in point of payment and priority to any debt created pursuant to this Agreement;

(ii)

Intercompany loans . Loans and advances made to the Rig Owners by members of the Group on the conditions that the Loans are subordinated and unsecured in form and substance satisfactory to the Agent;

(iii)

Required Lenders . Financial Indebtedness consented to by the Required Lenders.

(c)

To the extent that there are at any time loans between members of the Group, which are or may affect the ability of the Borrowers or the Guarantors in fulfilling its or their obligations to the Finance Parties under this Agreement, such loans will be subordinated to the rights of the Finance Parties under the Finance Documents.

55 (129)

23.16

Transactions with Affiliates

Each Obligor shall (and shall procure that each Subsidiary will) procure that all transactions entered into with an Affiliate are made on market terms and otherwise on arm’s length terms.

23.17

Disposals

Subject to clause 8 ( Mandatory Reduction, Prepayment and Cancellation ), no Obligor shall:

(a)

enter into a single transaction or series of transactions (whether related or not and whether voluntary or involuntary) to sell, lease, transfer, or otherwise dispose of any Rig or other asset being the subject of a Security Interest pursuant to the Security Documents or the whole or a substantial part of its other assets; or

(b)

enter into a single transaction or series of transactions (whether related or not and whether voluntary or involuntary) to sell, lease, transfer, or otherwise dispose of its assets other than made on market value and arm’s length terms,

without the prior written consent of the Required Lenders.

23.18

Financial Support

None of the Rig Owners shall provide, procure, create or permit to subsist any Financial Support (including contingent support) other than:

(a)

Financial Support permitted pursuant to the Finance Documents;

(b)

Financial Support consented to by the Required Lenders; or

(c)

the issuance of performance guarantees to any ultimate charterer of a Rig.

23.19

Centre of Main Interest

None of the Obligors shall change its centre of main interest or establishment to another jurisdiction without obtaining the prior written consent from the Required Lenders.

23.20

Assignment of contracts

If an Event of Default has occurred and is continuing the Obligors will, upon the Agent’s request, use their best endeavours to have assigned or transferred the rights and obligations under contracts pertaining to the Rigs (with members of the Group as well as ultimate charterers) or any of them to one or several parties nominated by the Agent (which may include assigning such rights to the Security Agent).

56 (129)

23.21

Sale or Total Loss of a Rig

Subject to clause 23.17 ( Disposals ), the Obligors will ensure that a Rig is not sold in whole or in part without prior written notice to the Agent, and in the event of such sale or in the event of a Total Loss, make such prepayment as provided for in clause 8.1 ( Total Loss or sale ) and comply with clause 24.13 ( Total Loss ).

23.22

Investment Restrictions

(a)

Subject to clause 23.14 (b) and (c) ( Dividends of the Parent and Borrowers ) and subject to paragraph (b) below, neither the Parent nor its Subsidiaries (other than the Rig Owners) shall make any investments and acquisitions unless:

(i)

after giving effect to any such investment, the Parent and its Subsidiaries are in pro forma (“pro forma” meaning that the calculation of the financial covenants shall take into account any effect of the investment or acquisition made) compliance (evidenced by adjusted financial calculations taking into account any effect of the investment or acquisition made) with the financial covenants set out in clause 22 ( Financial Covenants ) of this Agreement; and

(ii)

no Default is continuing or would result from the proposed investment and acquisition.

(b)

None of the Rig Owners shall make any further investments or acquisitions, except for any capital expenditure or investments related to ordinary upgrade or maintenance work of the Rigs.

23.23

Ownership

(a)

The Parent shall keep one hundred per cent (100%) ownership (capital and voting rights) in each of the Rig Owners and the Intra-Group Charterers either directly or indirectly.

(b)

Immediately upon a change to the ownership structure as set out in Schedule 8 ( Corporate Structure ), the Parent shall advise the Lenders of such change.

23.24

Corrupt Practices

Each Obligor shall act in compliance with all applicable laws and regulations relating to bribery and corrupt practices and shall use all reasonable endeavours to procure that any person acting on its behalf acts in such manner in the course of acting for it.

24.

RIG COVENANTS

The Obligors give the undertakings set out in this clause 24 to each Finance Party and such undertakings shall remain in force throughout the Security Period;

24.1

Minimum Market Value

The Obligors will procure that the Market Value of all the Rigs (taken in aggregate) is (i) at least one hundred and twenty per cent (120%) of the sum of the Loans outstanding from the First Utilisation Date until the second anniversary thereafter and (ii) at least one hundred and thirty five per cent (135%) of the sum of the Loans outstanding from the second anniversary of the First Utilisation Date until the Final Maturity Date.

57 (129)

24.2

Market Valuation of the Rigs

The Parent shall (at its own expense) (i) arrange for the Market Value of each of the Rigs to be determined and valued for the purpose of every Compliance Certificate to be delivered to the Agent pursuant to clause 21.2 ( Compliance Certificate ) for the financial quarters ending 30 June and 31 December each year and (ii), if an Event of Default has occurred and is continuing, upon the Agent’s request, arrange for the Market Value of each of the Rigs to be determined.

24.3

Insurance

(a)

Each Obligor shall maintain or ensure that each of the Rigs is insured against such risks, including the following risks, Hull and Machinery, Protection & Indemnity (including an adequate club cover for pollution liability as normally adopted by the industry for similar rigs), Hull Interest and/or Freight Interest and War Risk (including piracy, terrorism and confiscation) insurances, in such amounts and currencies, on such terms (always applying Norwegian law and including the terms of the Norwegian Marine Insurance Plan of 1996, version 2010 (as amended from time to time)) and with such insurers and placed through insurance brokers as the Agent shall approve as appropriate for an internationally reputable major drilling contractor. The Parent shall seek the approval of the Agent in writing, on behalf of the Lenders, prior to placing any insurances through any captive vehicle.

(b)

The insurance value of each of the Rigs shall at all times be at least equal to or higher than the Market Value of each of the Rigs. The aggregate insurance value of the Rigs, shall at all times be at least equal to the higher of the Market Values of the Rigs and one hundred and twenty per cent (120%) of the Total Commitments.

(c)

The value of the Hull and Machinery insurance shall cover at least eighty per cent (80%) of the Market Value of each of the Rigs and the aggregate insured values in the hull and machinery insurances of the Rigs, shall at all times be at least equal to the Total Commitments.

(d)

Each Obligor shall procure that the Security Agent (on behalf of the Finance Parties) is noted as first priority mortgagee and sole loss payee in the insurance contracts, together with the confirmation from the underwriters to the Security Agent that the notice of assignment with regards to the Insurances and the loss payable clauses (with a monetary threshold of USD 25,000,000) are noted in the insurance contracts and that standard letters of undertaking confirming this are executed by the insurers, always provided that the evidence thereof is in form and substance satisfactory to the Security Agent (on behalf of the Finance Parties). The Parent shall provide the Finance Parties with details of terms and conditions of the insurances and break down of insurers.

(e)

Not later than seven (7) days prior to the expiry date of the relevant Insurances, the Parent shall procure the delivery to the Agent of a certificate from the insurance broker(s) or the Insurers, confirming that the Insurances referred to in paragraph (a) have been renewed and taken out in respect of the Rigs with insurance values as required by paragraph (b), that such Insurances are in full force and effect and that the Agent (on behalf of the Finance Parties) have been noted as first priority mortgagee by the relevant insurers.

58 (129)

(f)

The Agent may effect:

(i)

at the Lenders’ expense and for the exclusive benefit of the Security Agent and the Lenders mortgagees’ interest insurance and/or, subject to clause 24.3(f)(ii) below, at the Lenders’ expense and for the exclusive benefit of the Security Agent and the Lenders, mortgagees’ additional perils and pollution insurance on such terms as the Agent may approve; and

(ii)

at the Borrowers’ expense and for the exclusive benefit of the Lenders and the Security Agent when any of the Rigs is or may be located in an Area (as defined therein), insurance policies such as mortgagees’ additional perils and pollution insurance on such terms as the Agent may approve. The Parent will notify the Agent in writing prior to any Rig entering an Area (as defined herein). The term “Area” will mean the territorial waters of the United States of America or the Exclusive Economic Zone (as defined in the US Oil Pollution Act, 1990) or the territorial waters of any other jurisdiction having (in the Agent’s reasonable opinion) similar or comparable pollution or environmental protection legislation specified from time to time by the Agent to the Parent.

(g)

If any of the Insurances referred to in paragraph (a) form part of a fleet cover, the Parent shall procure that the insurers shall undertake to the Security Agent that they shall neither set-off against any claims in respect of any of the Rigs any premiums due in respect of other rigs under such fleet cover or any premiums due for other insurances, nor cancel this Insurance for reason of non-payment of premiums for other rigs under such fleet cover or of premiums for such other insurances, and shall undertake to issue a separate policy in respect of each of the Rigs if and when so requested by the Security Agent.

(h)

The Parent shall procure that the Rigs always are employed in conformity with the terms of the instruments of Insurances (including any warranties expressed or implied therein) and comply with such requirements as to extra premium or otherwise as the insurers may prescribe.

(i)

No Obligor will make any material change to the Insurances described under paragraphs (a) and (b) above without the prior written consent of the Agent (on behalf of the Lenders).

(j)

Each of the Insurances shall be reviewed, at the cost of the Borrowers, by the Lender’s insurance advisor on an annual basis and on each date on which the Insurances are due for renewal if so required by the Agent.

24.4

Alteration to the Rigs

Each Obligor shall ensure that no Rig is materially altered except as necessary in the ordinary course of business and upon prior written notice to the Agent, and then only if and to the extent such alteration is carried out in accordance with the terms of the contractual obligations pertaining to the said Rig existing at the date of this Agreement.

59 (129)

24.5

Conditions of the Rigs

Each Obligor shall ensure that the Rigs are maintained and preserved in good working order and repair and operated in accordance with good internationally recognized standards, complying with the ISM Code and the ISPS Code (to the extent applicable, and if not applicable, to conduct its affairs in accordance with prudent industry practices) and all other marine safety and other regulations and requirements from time to time applicable to vessels registered in the relevant Ship Registry under the relevant flag and applicable to vessels trading in any jurisdiction in which the Rigs may operate from time to time.

24.6

Trading, Classification and repairs

The Obligors shall keep or shall procure that:

(a)

the Rigs are kept in a good, safe and efficient condition and state of repair consistent with prudent ownership and management practice;

(b)

that the Rigs maintain their class at the highest level with Det Norske Veritas, Lloyd’s Register, American Bureau of Shipping or another classification society approved by the Required Lenders, free of any overdue recommendations and qualifications;

(c)

they comply with the laws, regulations (statutory or otherwise), constitutional documents and international conventions applicable to the classification society, the Ship Registry, the Obligors (ownership, operation, management and business) and to the Rigs in any jurisdiction in which any of the Rigs or the Obligors may operate from time to time;

(d)

none of the Rigs enter the territorial waters (twelve (12) mile limit) of the United States of America unless (i) it is an emergency situation, (ii) if no Event of Default has occurred and is continuing, upon obtaining the prior written consent from the Agent, or (iii) if an Event of Default has occurred and is continuing, upon obtaining the prior written consent of the Lenders; and

(e)

they provide the Agent of evidence of such compliance upon request from the Agent.

24.7

Notification of certain events

The Parent shall immediately notify the Agent of:

(a)

any accident to any of the Rigs involving repairs where the costs will or are likely to exceed USD 25,000,000 (or the equivalent amount in any other currency);

(b)

any requirement or recommendation made by any insurer or classification society or by any competent authority which is not, or cannot be, immediately complied with;

(c)

any exercise or purported exercise of any capture, seizure, arrest or lien on any of the assets secured by the Security Documents;

(d)

any occurrence as a result of which any of the Rigs has become or is, by the passing of time or otherwise, likely to become a Total Loss.

60 (129)

24.8

Operation of the Rigs

Each Obligor shall comply, and procure that any charterer and manager complies in all material respects with all Environmental Laws and all other laws or regulations relating to the Rigs, their ownership, operation and management or to the business of the Obligor and shall not employ any of the Rigs nor allow their employment:

(a)

in any manner contrary to law or regulation in any relevant jurisdiction; and

(b)

in the event of hostilities in any part of the world (whether war is declared or not), in any zone which is declared a war zone by any government or by the war risk insurers of any of the Rigs unless the Parent has (at its expense) effected any special, additional or modified insurance cover which shall be necessary or customary for good shipowners trading Rigs within the territorial waters of such country at such time and has provided evidence of such cover to the Agent.

24.9

ISM Code, ISPS Code etc.

Each Borrower shall comply and shall procure that a charter and/or manager comply with the ISM Code, ISPS Code, Marpol and any other international maritime safety regulation relevant to the operation and maintenance of the Rigs and provides copies of certificates evidencing such compliance to the Agent upon written request thereof.

24.10

Inspections and class records

(a)

The Obligors shall permit, and shall procure that any charterers and/or managers permit, one person appointed by the Agent to inspect upon the Agent giving prior written notice each of the Rigs once a year, as long as such inspection does not interfere with the operation of the Rigs. Such inspection shall be for the account of the Lenders unless an Event of Default has occurred and is continuing, in which case it shall be for the account of the Borrowers.

(b)

The Parent shall instruct the classification society to send to the Agent, following a written request from the Agent, copies of all class records held by the classification society in relation to the Rigs.

24.11

Surveys

The Parent shall submit to or cause the Rigs to be submitted to such periodic or other surveys as may be required for classification purposes and to ensure full compliance with regulations of the Ship Registry of the Rigs and if consented to by the Agent pursuant to clause 24.14 ( Ship Registry, name and flag ) such parallel Ship Registry of the Rig.

24.12

Arrest

The Obligors shall promptly pay and discharge:

(a)

all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against any of the Security Interests each Security Document creates or purports to create;

61 (129)

(b)

all tolls, taxes, dues, fines, penalties and other amounts charged in respect of any of the Security Interests each Security Document creates or purports to create; and

(c)

all other outgoings whatsoever in respect of any of the Security Interests each Security Document creates or purports to create,

and forthwith upon receiving a notice of arrest of any of the Rigs, or their detention in exercise or purported exercise of any lien or claim, the Parent shall procure its release by providing bail or providing the provision of security or otherwise as the circumstances may require.

24.13

Total Loss

In the event that any of the Rigs shall suffer a Total Loss, the Obligors shall, within a period of ninety (90) days after the Total Loss Date, obtain and present to the Agent, a written confirmation from the relevant insurers that the claim relating to the Total Loss has been accepted in full, and the insurance proceeds shall be paid to the Agent for application in accordance with clause 8.1 ( Total Loss or sale ).

24.14

Ship Registry, name and flag

The Borrowers shall:

(a)

procure that each of the Rigs is registered in the name of the respective Rig Owner as described in Schedule 2 ( Borrowers, Guarantors and Collateral Rigs ) hereto in the relevant Ship Registry; and

(b)

not change the Ship Registry, name or flag of any of the Rigs or parallel register a Rig in any Ship Registry without the prior written consent of the Required Lenders (such consent not to be unreasonably withheld or delayed). If such change would be to a Ship Registry, flag, or parallel register which is not generally recognised by the oil industry, then such change is subject to the prior written consent of all of the Lenders. The Agent may determine whether a register or flag is “generally recognised”, upon consultation with the Lenders, and the Agent may pursuant to clause 27.7 ( Rights and discretions of the Agent ), rely upon the advice of experts and/or advisors appointed by it to make such determination.

24.15

Management

A company (being a wholly owned Subsidiary of the Parent or, in the case of any Rig operating in Malaysian territorial waters, Tioman Drilling Limited which shall at all times be at least forty nine per cent (49%) owned by the Parent) shall perform management services in respect of the Rigs, and no material change or any adverse change (having an adverse effect on the Finance Parties rights and/or obligations under the Finance Documents) shall be made to such management arrangements without the prior written consent of the Agent (not to be unreasonably withheld or delayed).

25.

EVENTS OF DEFAULT

Each of the events or circumstances set out in this clause 25 is an Event of Default.

62 (129)

25.1

Non-payment

Any of the Obligors does not pay on the due date any amount payable pursuant to a Finance Document at the place and in the currency in which it is expressed to be payable unless:

(a)

its failure to pay is caused by administrative or technical error affecting the transfer of funds despite timely payment instructions by the Obligor; and

(b)

payment is made within three (3) Business Days of its due date.

25.2

Financial covenants, Change of Business and Insurance

Any requirement in clause 22 ( Financial Covenants ), clause 23.8 ( Change of business ) and clause 24.3 ( Insurance ) is not satisfied.

25.3

Other obligations

(a)

Any of the Obligors does not comply with any provision of the Finance Documents (other than those referred to in clause 25.1 ( Non-payment ) and clause 25.2 ( Financial covenants, Change of Business and Insurance )); and

(b)

No Event of Default under (a) above will occur if the failure to comply is (in the reasonable opinion of the Agent) capable of remedy and is remedied within thirty (30) calendar days of the earlier of the Agent giving notice to the Parent or the relevant Obligor becoming aware of the failure to comply.

25.4

Misrepresentations

Any representation, warranty or statement made or deemed to be made by any of the Obligors in the Finance Documents or any other document delivered by or on behalf of the Obligors under or in connection with any of the Finance Documents is or proves to have been incorrect or misleading in any material respect when made or deemed to be made.

25.5

Cross default

(a)

Any Financial Indebtedness of any Obligor or any member of the Group is not paid when due nor within any originally applicable grace period;

(b)

any Financial Indebtedness of any Obligor or any member of the Group is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described);

(c)

any commitment for any Financial Indebtedness of any Obligor or any member of the Group is cancelled or suspended by a creditor of any Obligor as a result of an event of default (however described); or

(d)

any creditor of any Obligor or any member of the Group is entitled to declare any Financial Indebtedness of any Obligor or any member of the Group due and payable prior to its specified maturity as a result of an event of default (however described)

in circumstances where the aggregate amount of all such Financial Indebtedness referred to in all or any of sub-clauses (a) to (d) is USD 25,000,000 (or its equivalent in other currencies) or more.

63 (129)

25.6

Insolvency

(a)

Any of the Obligors or any other Material Subsidiary is unable or admits inability to pay its debts as they fall due, suspends making payments on any of its debts or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness.

(b)

The value of the assets of any of the Obligors or any other Material Subsidiary is less than its liabilities (taking into account contingent and prospective liabilities).

(c)

A moratorium is declared in respect of any indebtedness of any of the Obligors or any other Material Subsidiary.

25.7

Insolvency proceedings

Any corporate action, legal proceedings or other procedure or step is taken in relation to:

(a)

the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme or arrangement or otherwise) of any Obligor or any other Material Subsidiary;

(b)

a composition, compromise, assignment or arrangement with any creditor of any Obligor or any other Material Subsidiary;

(c)

the appointment of a liquidator, receiver, administrative receiver, administrator or other similar officer in respect of any Obligor or any other Material Subsidiary; or

(d)

enforcement of any Security Interest over any assets of any Obligor or any other Material Subsidiary.

25.8

Creditor’s process

Any maritime lien or other lien (not being a Permitted Encumbrance), expropriation, injunction restraint, arrest attachment, sequestration, distress or execution affects any asset secured by the Security Documents or undertakings, property, assets, rights or revenues (not secured by the Security Documents) of any Obligor and is not discharged within thirty (30) days after the Obligor becomes aware of the same unless the Finance Parties have been provided with additional security in such form and substance and for such amounts as the Finance Parties may require.

25.9

Unlawfulness and invalidity

It is or becomes unlawful or impossible for any Obligor and/or any of the parties to any of the Security Documents to perform any of their respective obligations under the Finance Documents or for the Agent or Security Agent to exercise any right or power vested to it under the Finance Documents.

25.10

Cessation of business

Any Obligor (whether by one or a series of transactions) suspends, changes or ceases to carry on (or threatens to suspend, change or cease to carry on) all or a material part of its business.

64 (129)

25.11

Stock Exchange listing

The Parent no longer is listed on an Exchange.

25.12

Material adverse change

Any event or condition or circumstance or series of events or conditions or circumstances occur which, in the reasonable opinion of the Required Lenders has had or could reasonably be expected to have a Material Adverse Effect.

25.13

Authorisation and consents

Any authorisation, licence, consent, permission or approval required in connection with the entering into, validity, enforcement, completion or performance of any of the Finance Documents or any transactions contemplated thereby is revoked, terminated or modified or otherwise cease to be in full force and effect.

25.14

Loss of Property

Any part of an Obligor’s or its Subsidiaries’ property is destroyed, abandoned, seized, appropriated or forfeited or the authority or ability of any member of the Group to conduct its business is limited or wholly or substantially curtailed by any seizure, expropriation, nationalisation, intervention, restriction or other action by or on behalf of any governmental, regulatory or other authority or other person in relation to any member of the Group or any of its assets which in the opinion of the Agent or the Required Lenders has or could reasonably be expected to have, if adversely determined, a Material Adverse Effect.

25.15

Litigation

There is current, pending or threatened any claims, litigation, arbitration or administrative proceedings against any Obligor which in the opinion of the Agent or the Required Lenders has or could reasonably be expected to have, if adversely determined, a Material Adverse Effect.

25.16

Failure to comply with final judgment

Any of the Obligors fails within five (5) Business Days after becoming obliged to do so to comply with or pay any sum in an amount exceeding USD 25,000,000 (or the equivalent in any other currencies) due from it under any final judgment or any final order (being one against which there is no right of appeal or if a right of appeal exists the time limit for making such appeal has expired and no appeal has been dismissed) made or given by any court of competent jurisdiction, provided, however, that such event shall not be deemed to constitute an Event of Default if the Obligor is entitled to insurance cover for the whole of such sum and the relevant insurers have confirmed liability and undertaken to make payment of the whole of such sum in writing to the person(s) entitled to payment and it is likely (in the reasonable opinion of the Required Lenders) that the insurers will be able to make such payment within thirty (30) days.

25.17

Acceleration

Upon the occurrence of an Event of Default which is continuing, the Agent may, and shall if so directed by the Required Lenders, by written notice to the Parent:

(a)

cancel the Total Commitments whereupon they shall immediately be cancelled; and/or

65 (129)

(b)

declare that all or part of the Loan together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents, be either immediately due and payable and/or payable upon demand, whereupon they shall become either immediately due and payable or payable on demand; and/or

(c)

declare that no withdrawals be made from any Earnings Account; and/or

(d)

direct the Security Agent to start enforcement in respect of the Security Interests established by the Security Documents; and/or

(e)

take any other action, with or without notice to the Parent and/or any Borrower, exercise or direct the Security Agent to exercise any other right or pursue any other remedy conferred upon the Agent, the Security Agent or the other Finance Parties by any of the Finance Documents or by any applicable law or regulation or otherwise as a consequence of such Event of Default.

26.

CHANGES TO THE PARTIES

26.1

Assignment by the Obligors

None of the Obligors may assign or transfer or assume any part of, or any interest in, its rights and/or obligations under the Finance Documents without the consent of all Lenders.

26.2

Assignments and transfers by the Lenders

A Lender (the “ Existing Lender ”) may, at any time assign, transfer or have assumed its rights or obligations under the Finance Documents (a “ Transfer ”) to:

(a)

another Existing Lender or an Affiliate of an Existing Lender (without the prior written consent of the Parent);

(b)

a central bank or federal reserve (without the prior written consent of the Parent);

(c)

another bank or financial institution (together with such institutions as mentioned in paragraphs (a) and (b) above, each regarded a “ New Lender ”), subject to the prior consent of the Parent and the Agent (such consent not to be unreasonably withheld or delayed and which shall be deemed to have been given fifteen (15) Business Days after being sought unless expressly refused within that period); or

(d)

regardless of paragraph (c) above, to a New Lender (as defined above in paragraph (c)) if an Event of Default has occurred and is continuing,

in a minimum transfer amount of USD 12,500,000, unless such Existing Lender’s Commitment and participation in the Loan (if any) is less than USD 12,500,000, in which case such Existing Lender’s minimum transfer amount is the whole amount of its Commitment and participation in the Loan (if any).

26.3

Assignment or transfer fee

Unless the Agent otherwise agrees, the New Lender shall, on the date upon which an assignment or transfer takes place pay to the Agent (for its own account) a fee of USD 3,000.

66 (129)

26.4

Conditions of Assignment

An assignment will only be effective:

(a)

on receipt by the Agent of written confirmation from the New Lender (in form and substance satisfactory to the Agent) that the New Lender will assume the same obligations to the Borrowers and the other Finance Parties as it would have been under if it was an Original Lender;

(b)

on the New Lender entering into any documentation required for it to accede as a party to any Security Document to which the Existing Lender is a party in its capacity as a Lender and, in relation to such Security Documents, completing any filing, registration or notice requirements;

(c)

if an assignment takes effect after there has been a Utilisation, the assignment of an Existing Lender’s participation in the Utilisations (if any) under the Facility shall take effect in respect of the same fraction of each such Utilisation;

(d)

on the performance by the Agent of all “know your customer” or other checks relating to any person that it is required to carry out in relation to such assignment to a New Lender, the completion of which the Agent shall promptly notify to the Lender and the New Lender;

(e)

if that Existing Lender assigns equal fractions of its Commitment and participation in the Loan and each Utilisation (if any) under the relevant Facility; and

(f)

if such assignment is accepted by the Parent and the New Lender confirms to the Borrowers and the Agent that, at the time of the assignment, it has no knowledge of any circumstance which may lead to such New Lender making any claims in respect of clauses 13 ( Tax Gross-Up and Indemnities ) and/or 14 ( Increased Costs ).

Each New Lender, by executing the relevant Transfer Certificate, confirms, for the avoidance of doubt, that the Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with the Finance Documents on or prior to the date on which the assignment becomes effective in accordance with the Finance Documents and that it is bound by that decision to the same extent as the Existing Lender would have been had it remained a Lender.

26.5

Limitation of responsibility of Existing Lenders

(a)

Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for:

(i)

the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents or any other documents;

(ii)

the financial condition of any Obligor;

(iii)

the performance and observance by any Obligor or any other person of its obligations under the Finance Documents or any other documents;

67 (129)

(iv)

the application of any Basel II Regulation or Basel III Regulation to the transactions contemplated by the Finance Documents; or

(v)

the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document or any other document,

and any representations or warranties implied by law are excluded.

(b)

Each New Lender confirms to the Existing Lender and the other Finance Parties that it:

(i)

has made (and shall continue to make) its own independent investigation and assessment of :

(A)

the financial condition and affairs of the Obligors and their related entities in connection with its participation in this Agreement; and

(B)

the application of any Basel II Regulation or Basel III Regulation to the transactions contemplated by the Finance Documents,

and has not relied exclusively on any information provided to it by the Existing Lender or any other Finance Party in connection with any Finance Document;

(ii)

will continue to make its own independent appraisal of the application of any Basel II Regulation or Basel III Regulation to the transactions contemplated by the Finance Documents; and

(iii)

will continue to make its own independent appraisal of the creditworthiness of each Obligor and its related entities whilst any amount is or may be outstanding under the Finance Documents or any Commitment is in force.

(c)

Nothing in any Finance Document obliges an Existing Lender to:

(i)

accept a re-assignment from a New Lender of any of the rights assigned under this clause 26 ( Changes to the Parties ); or

(ii)

support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by any Obligor of its obligations under the Finance Documents or by reason of the application of any Basel II Regulation to the transactions contemplated by the Finance Documents or otherwise.

26.6

Procedure for transfer

(a)

Subject to the conditions set out in clause 26.4 ( Conditions of Assignment ) an assignment may be effected in accordance with paragraph (b) below when (i) the Agent executes an otherwise duly completed Transfer Certificate and (ii) the Agent executes any document required under clause 26.4 ( Conditions of Assignment ) which it may be necessary for it to execute in each case delivered to it by the Existing Lender and the New Lender duly executed by them and, in the case of any such other document, any other relevant person. The Agent shall, as soon as reasonably practicable after receipt by it of a Transfer Certificate and any such other document each duly completed, appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Transfer Certificate and such other document.

68 (129)

(b)

The Obligors and the other Finance Parties irrevocably authorise the Agent to execute any Transfer Certificate on their behalf without any consultations with them.

(c)

On the Transfer Date:

(i)

to the extent that in the Transfer Certificate the Existing Lender seeks to be released from its obligations under the Finance Documents, the Existing Lender shall be released from further obligations towards the Obligors and the other Finance Parties under the Finance Documents and the rights of the Obligors and the other Finance Parties against the Existing Lender under the Finance Documents shall be cancelled (being the “ Discharged Rights and Obligations ”) (but the obligations owed by the Obligors under the Finance Documents shall not be released);

(ii)

the New Lender shall assume obligations towards each of the Obligors who are a Party and/or the Obligors and the other Finance Parties shall acquire rights against the New Lender which differ from the Discharged Rights and Obligations only insofar as the New Lender has assumed and/or the Obligors and the other Finance Parties have acquired the same in place of the Existing Lender;

(iii)

the other Finance Parties and the New Lender shall acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had the New Lender been an Original Lender with the rights and/or obligations acquired or assumed by it as a result of the transfer and to that extent the Existing Lender and the other Finance Parties shall each be released from further obligations to each other under the Finance Documents;

(iv)

the New Lender shall become a Party to the Finance Documents as a “Lender” for the purposes of all the Finance Documents; and

26.7

Interest

If the Agent has notified the Lenders that it is able to distribute interest payment on a “pro rata basis” to Existing Lenders and New Lenders then (in respect of any transfer pursuant to clause 26.6 ( Procedure for transfer ) the Transfer Date of which, in each case, is after the date of such notification and is not on the last day of an Interest Period):

(a)

any interest or fees in respect of the relevant participation which are expressed to accrue by reference to the lapse of time shall continue to accrue in favour of the Existing Lender up to but excluding the Transfer Date (“ Accrued Amounts ”) and shall become due and payable to the Existing Lender (without further interest accruing on them) on the last day of the current Interest Period (or, if the Interest Period is longer than six Months, on the next of the dates which falls at six (6) monthly intervals after the first day of that Interest Period); and

69 (129)

(b)

the rights assigned or transferred by the Existing Lender will not include the right to the Accrued Amounts, so that, for the avoidance of doubt:

(i)

when the Accrued Amounts become payable, those Accrued Amounts will be payable to the Existing Lender; and

(ii)

the amount payable to the New Lender on that date will be the amount which would, but for the application of this clause 26.7 have been payable to it on that date, but after deduction of the Accrued Amounts

26.8

Copy of Transfer Certificate to Parent

The Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate and any other document required under clause 26.4 ( Conditions of Assignment ), send a copy of that Transfer Certificate and such documents to the Parent.

26.9

Security over Lenders’ rights

In addition to the other rights provided to Lenders under this clause 26, each Lender may without consulting with or obtaining consent from an Obligor, at any time charge, assign or otherwise create a Security Interest in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation:

(a)

any charge, assignment or other Security Interest to secure obligations to a federal reserve or central bank; and

(b)

in the case of any Lender which is a fund, any charge, assignment or other Security Interest granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities, except that no such charge, assignment or Security Interest shall:

(i)

release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security Interest for the Lender as a party to any of the Finance Documents; or

(ii)

require any payments to be made by an Obligor other than or in excess of, or grant to any person any more extensive rights than, those required to be made or granted to the relevant Lender under the Finance Documents.

26.10

Further assurances

Each of the Obligors undertakes to procure that in relation to any Transfer, each of the Obligors shall (at its own cost) at the request of the Agent execute such documents as may in the discretion of the Agent be necessary to ensure that the New Lender attains the benefit of the Finance Documents.

26.11

Disclosure of information

Any Lender may disclose:

(a)

to any of its affiliates, branches, subsidiaries, its parent company, head office or regional office (together the “ Permitted Parties ”) and a potential assignee;

70 (129)

(b)

to whom that Lender enters into (or may potentially enter into) any sub-participation in relation to, or any other transaction under which payments are to be made by reference to, this Agreement or any of the Obligors;

(c)

to auditors or professional advisers or service providers employed in the normal course of a Permitted Party’s business who are under a duty of confidentiality to the Permitted Parties;

(d)

to any rating agency, insurer or insurance broker of, or direct or indirect provider of credit protection to any Permitted Party; and

(e)

to whom, to the extent that, information is required to be disclosed by any applicable law,

such information about the Obligors and the Finance Documents as that Lender shall consider appropriate, provided that such disclosure shall, except if an Event of Default has occurred or is occurring, be subject to the prior written approval by the Parent if such potential assignee is not an affiliate of any of the Lenders.

27.

ROLES OF AGENT, SECURITY AGENT, MANDATED LEAD ARRANGERS AND BOOKRUNNERS

27.1

Appointment of the Agent

(a)

Each other Finance Party (other than the Security Agent) appoints the Agent to act as its agent under and in connection with the Finance Documents.

(b)

Each such other Finance Party authorises the Agent:

(i)

to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Agent under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions; and

(ii)

to execute each of the Security Documents and all other documents that may be approved by the Required Lenders for execution by it.

27.2

Instructions to Agent

(a)

The Agent shall:

(i)

unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Agent in accordance with any instructions given to it by:

(A)

all Lenders if the relevant Finance Document stipulates the matter is an all Lender decision; and

(B)

in all other cases, the Required Lenders; and

(ii)

not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with paragraph (i) above.

71 (129)

(b)

The Agent shall be entitled (but not obliged) to request instructions, or clarification of any instruction, from the Required Lenders (or, if the relevant Finance Document stipulates the matter is a decision for any other Lender or group of Lenders, from that Lender or group of Lenders) as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion and the Agent may refrain from acting unless and until it receives those instructions or that clarification.

(c)

Save in the case of decisions stipulated to be a matter for any other Lender or group of Lenders under the relevant Finance Document and unless a contrary indication appears in a Finance Document, any instructions given to the Agent by the Required Lenders shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties except for the Security Agent.

(d)

The Agent may refrain from acting in accordance with any instructions of any Lender or group of Lenders until it has received any indemnification and/or security that it may in its discretion require (which may be greater in extent than that contained in the Finance Documents and which may include payment in advance) for any cost, loss or liability which it may incur in complying with those instructions.

(e)

In the absence of instructions, the Agent may act (or refrain from acting) as it considers to be in the best interest of the Lenders.

(f)

The Agent is not authorised to act on behalf of a Lender (without first obtaining that Lender’s consent) in any legal or arbitration proceedings relating to any Finance Document. This clause (f) shall not apply to any legal or arbitration proceeding relating to the perfection, preservation or protection of rights under the Security Documents or enforcement of the Security Documents.

27.3

Duties of the Agent

(a)

The Agent’s duties under the Finance Documents are solely mechanical and administrative in nature.

(b)

The Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Agent (in its capacity as Agent) for that Party by any other Party.

(c)

Without prejudice to clause 26.8 ( Copy of Transfer Certificate to Parent ), paragraph (b) above shall not apply to any Transfer Certificate.

(d)

Except where a Finance Document specifically provides otherwise, the Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.

(e)

If the Agent receives notice from a Party referring to this Agreement, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the other Finance Parties.

72 (129)

(f)

If the Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Agent or a Bookrunner or Mandated Lead Arranger or the Security Agent for their own account) under this Agreement it shall promptly notify the other Finance Parties.

(g)

The Agent shall have only those duties, obligations and responsibilities expressly specified in the Finance Documents to which it is expressed to be a party (and no others shall be implied).

27.4

Role of the Bookrunners or Mandated Lead Arrangers

Except as specifically provided in the Finance Documents, no Bookrunner or Mandated Lead Arranger has obligations of any kind to any other Party under or in connection with any Finance Document or the transactions contemplated by the Finance Documents.

27.5

No fiduciary duties

(a)

Nothing in this Agreement constitutes the Agent or any Mandated Lead Arranger or Bookrunner as a trustee or fiduciary of any other person.

(b)

None of the Agent, the Security Agent or any Bookrunner or Mandated Lead Arranger shall be bound to account to any Lender for any sum or the profit element of any sum received by it for its own account or have any obligations to the other Finance Parties beyond those expressly stated in the Finance Documents.

27.6

Business with the Group

The Agent, the Security Agent and any Bookrunner and any Mandated Lead Arranger may accept deposits from, lend money to and generally engage in any kind of banking or other business with any Obligor or member of the Group or their Affiliates.

27.7

Rights and discretions of the Agent

(a)

The Agent may

(i)

rely on any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorised;

(ii)

assume that:

(A)

any instructions received by it from the Required Lenders, any Lenders or any group of Lenders are duly given in accordance with the terms of the Finance Documents; and

(B)

unless it has received notice of revocation, that those instructions have not been revoked; and

(iii)

rely on a certificate from any person:

(A)

as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or

(B)

to the effect that such person approves of any particular dealing, transaction, step, action or thing,

73 (129)

as sufficient evidence that that is the case and, in the case of paragraph (A) above, may assume the truth and accuracy of that certificate.

(b)

The Agent may assume (unless it has received notice to the contrary in its capacity as agent for the other Finance Parties) that:

(i)

no Default has occurred (unless it has actual knowledge of a Default arising under clause 25.1 ( Non-payment ));

(ii)

any right, power, authority or discretion vested in any Party or any group of Lenders has not been exercised; and

(iii)

any notice or request made by the Parent (other than a Utilisation Request or Selection Notice) is made on behalf of and with the consent and knowledge of all the Obligors.

(c)

The Agent may engage and pay for the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts in the conduct of its obligations and responsibilities under the Finance Documents.

(d)

Without prejudice to the generality of clause 27.7(c) or (e), the Agent may at any time engage and pay for the services of any lawyers to act as independent counsel to the Agent (and so separate from any lawyers instructed by the Lenders) if the Agent in its reasonable opinion deems this to be desirable.

(e)

The Agent may rely on the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts (whether obtained by the Agent or by any other Party and whether or not liability thereunder is limited by reference to monetary cap or otherwise) and shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of its so relying.

(f)

The Agent may act in relation to the Finance Documents through its officers, employees and agents and the Agent shall not:

(i)

be liable for any error of judgment made by any such person; or

(ii)

be bound to supervise, or be in any way responsible for any loss incurred by reason of misconduct, omission or default on the part, of any such person,

unless such error or such loss was directly caused by the Agent’s gross negligence or wilful misconduct.

(g)

Unless a Finance Document expressly provides otherwise, the Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement.

(h)

Notwithstanding any other provision of any Finance Document to the contrary, neither the Agent nor any Bookrunner nor any Mandated Lead Arranger is obliged to do or

74 (129)

omit to do anything if it would or might in its opinion constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality. The Agent, each Bookrunner and each Mandated Lead Arranger may do anything which in its opinion, is necessary or desirable to comply with any law or regulation of any jurisdiction.

(i)

Notwithstanding any provision of any Finance Document to the contrary, the Agent is not obliged to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties, obligations or responsibilities or the exercise of any right, power, authority or discretion if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not reasonably assured to it.

(j)

Neither the Agent nor any Bookrunner nor any Mandated Lead Arranger shall be obliged to request any certificate, opinion or other information under clause 21 ( Information undertakings ) unless so required in writing by a Lender, in which case the Agent shall promptly make the appropriate request of the Parent if such request would be in accordance with the terms of this Agreement.

27.8

Responsibility for documentation and other matters

None of the Agent or any Bookrunner or any Mandated Lead Arranger is responsible or liable for:

(a)

the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Agent, any Bookrunner or any Mandated Lead Arranger, an Obligor or any other person given in or in connection with any Finance Document or the transactions contemplated in the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or of any representations in any Finance Document or of any copy of any document delivered under any Finance Document;

(b)

the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or any Charter Contract or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or any Charter Contract;

(c)

the application of any Basel II Regulation or Basel III Regulation to the transactions contemplated by the Finance Documents;

(d)

any loss to the Trust Property arising in consequence of the failure, depreciation or loss of any Charged Property or any investments made or retained in good faith or by reason of any other matter or thing;

(e)

accounting to any person for any sum or the profit element of any sum received by it for its own account;

(f)

the failure of any Obligor or any other party to perform its obligations under any Finance Document or any Charter Contract or the financial condition of any such person;

75 (129)

(g)

ascertaining whether all deeds and documents which should have been deposited with it (or the Security Agent) under or pursuant to any of the Security Documents have been so deposited;

(h)

investigating or making any enquiry into the title of any Obligor to any of the Charged Property or any of its other property or assets;

(i)

failing to register any of the Security Documents with any applicable registrar of companies or any other public office;

(j)

failing to register any of the Security Documents in accordance with the provisions of the documents of title of any Obligor to any of the Charged Property;

(k)

failing to take or require any Obligor to take any steps to render any of the Security Documents effective as regards property or assets outside England or Wales or to secure the creation of any ancillary charge under the laws of the jurisdiction concerned;

(l)

(unless it is the same entity as the Security Agent) the Security Agent and/or any other beneficiary of a Security Document failing to perform or discharge any of its duties or obligations under the Security Documents; or

(m)

any determination as to whether any information provided or to be provided to any Finance Party is non-public information the use of which may be regulated or prohibited by any applicable law or regulation relating to insider dealing or otherwise.

27.9

No duty to monitor

The Agent shall not be bound to enquire:

(a)

whether or not any Default has occurred;

(b)

as to the performance, default or any breach by any Party of its obligations under any Finance Document; or

(c)

whether any other event specified in any Finance Document has occurred.

27.10

Exclusion of liability

(a)

Without limiting clause 27.10(b) (and without prejudice to any other provision of the Finance Documents excluding or limiting the liability of the Agent) the Agent will not be liable (including, without limitation, for negligence or any other category of liability whatsoever) for:

(i)

any damages, costs or losses to any person, any diminution in value, or any liability whatsoever arising as a result of taking or not taking any action under or in connection with any Finance Document or the Charged Property, unless directly caused by its gross negligence or wilful default or fraud. For the avoidance of doubt and not withstanding anything contained in the Finance Documents, the Security Agent shall not in any event be liable for any indirect or consequential loss (including, without limitation, loss of profit, business or goodwill) regardless of whether it was informed of the likelihood of such loss and irrespective of whether any such claim is made for breach of contract, in tort or otherwise;

76 (129)

(ii)

exercising, or not exercising, any right, power, authority or discretion given to it by, or in connection with, any Finance Document, the Charged Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Finance Document or the Charged Property; or

(iii)

without prejudice to the generality of paragraphs (i) and (ii) above, any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of:

(A)

any act, event or circumstance not reasonably within its control; or

(B)

the general risks of investment in, or the holding of assets in, any jurisdiction,

including (in each case and without limitation) such damages, costs, losses, diminution in value or liability arising as a result of: nationalisation, expropriation or other governmental actions; any regulation, currency restriction, devaluation or fluctuation; market conditions affecting the execution or settlement of transactions or the value of assets; breakdown, failure or malfunction of any third party transport, telecommunications, computer services or systems; natural disasters or acts of God; war, terrorism, insurrection or revolution; or strikes or industrial action.

(b)

No Party (other than the Agent) may take any proceedings against any officer, employee or agent of the Agent in respect of any claim it might have against the Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document and any officer, employee or agent of the Agent may rely on this clause subject to clause 1.3 (Third party rights) and the provisions of the Third Parties Act.

(c)

The Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Agent if the Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Agent for that purpose.

(d)

Nothing in this Agreement shall oblige the Agent, any Bookrunner or any Mandated Lead Arranger to carry out

(i)

any “know your customer” or other checks in relation to any person; or

(ii)

any check on the extent to which any transaction contemplated by this Agreement might be unlawful for any Lender,

on behalf of any Lender and each Lender confirms to the Agent and each Bookrunner and each Mandated Lead Arranger that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Agent or any Bookrunner or any Mandated Lead Arranger.

77 (129)

(e)

Without prejudice to any provision of any Finance Document excluding or limiting the Agent’s liability, any liability of the Agent arising under or in connection with any Finance Document or the Charged Property shall be limited to the amount of actual loss which has been finally judicially determined to have been suffered (as determined by reference to the date of default of the Agent or, if later, the date on which the loss arises as a result of such default) but without reference to any special conditions or circumstances known to the Agent at any time which increase the amount of that loss. In no event shall the Agent be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect or consequential damages, whether or not the Agent has been advised of the possibility of such loss or damages.

27.11

Lenders’ indemnity to the Agent

(a)

Each Lender shall (in proportion (if no part of the Loan is then outstanding) to its share of the Total Commitments or (at any other time) to its participation in the Loan) indemnify the Agent, within three Business Days of demand, against any Losses (otherwise than by reason of the Agent’s gross negligence or wilful default) incurred by the Agent in acting as such under the Finance Documents (unless the Agent has been reimbursed by an Obligor pursuant to a Finance Document or out of the Trust Property) including the costs of any person engaged in accordance with clause 27.7(c) ( Rights and discretions of the Agent ) and any Receiver in acting as its agent under the Finance Documents and any Losses incurred by the Agent prior to its replacement pursuant to clause 27.13 ( Replacement of the Agent ). The indemnities contained in this clause 27.11 shall survive the termination or discharge of this Agreement.

(b)

Subject to paragraph (c) below, the Borrowers shall immediately on demand reimburse any Lender for any payment that Lender makes to the Agent pursuant to paragraph (a).

(c)

Paragraph (b) shall not apply to the extent that the indemnity payment in respect of which the Lender claims reimbursement relates to a liability of the Agent to an Obligor.

27.12

Resignation of the Agent

(a)

The Agent may resign without giving any reason therefor and, after consultation with the Parent, appoint one of its Affiliates as successor by giving notice to the Lenders, the Security Agent and the Parent.

(b)

Alternatively the Agent may resign without giving any reason therefor by giving thirty (30) days notice to the other Finance Parties and the Parent, in which case the Required Lenders (after consultation with the Parent) may appoint a successor Agent.

(c)

If the Required Lenders have not appointed a successor Agent in accordance with paragraph (b) above within twenty (20) days after notice of resignation was given, the retiring Agent (after consultation with the Parent) may appoint a successor Agent.

78 (129)

(d)

If the Agent wishes to resign because it has concluded that it is no longer appropriate for it to remain as agent and the Agent is entitled to appoint a successor Agent under paragraph (c) above, the Agent may (if it concludes that it is necessary to do so in order to persuade the proposed successor Agent to become a party to this Agreement as Agent) agree with the proposed successor Agent amendments to this clause 27 and any other term of this Agreement dealing with the rights or obligations of the Agent consistent with then current market practice for the appointment and protection of corporate trustees together with any reasonable amendments to the agency fee payable under this Agreement which are consistent with the successor Agent’s normal fee rates and those amendments will bind the Parties.

(e)

The retiring Agent shall, at its own cost, make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request for the purposes of performing its functions as Agent under the Finance Documents.

(f)

The Agent’s resignation notice shall only take effect upon the appointment of a successor.

(g)

The appointment of the successor Agent shall take effect on the date specified in the notice from the Required Lenders to the retiring Agent. As from this date, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under paragraph (e) above) but shall remain entitled to the benefit of clause 15.3 ( Indemnity to the Agent, Security Agent and Mandated Lead Arrangers ) and this clause 27 (and any agency fees for the account of the retiring Agent shall cease to accrue from (and shall be payable on) that date). Any successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.

27.13

Replacement of the Agent

(a)

After consultation with the Parent, the Required Lenders may, by giving thirty (30) days’ notice to the Agent replace the Agent by appointing a successor Agent.

(b)

The retiring Agent shall make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request for the purposes of performing its functions as Agent under the Finance Documents.

(c)

The appointment of the successor Agent shall take effect on the date specified in the notice from the Required Lenders to the retiring Agent. As from this date, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under paragraph (b) above) but shall remain entitled to the benefit of clause 15.3 ( Indemnity to the Agent, the Security Agent and Mandated Lead Arrangers ) and this clause 27 (and any agency fees for the account of the retiring Agent shall cease to accrue from (and shall be payable on) that date).

(d)

Any successor Agent and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.

79 (129)

27.14

Confidentiality

(a)

In acting as agent for the Finance Parties, the Agent shall be regarded as acting through its department, division or team directly responsible for the management of the Finance Documents which shall be treated as a separate entity from any other of its divisions, departments or teams.

(b)

If information is received by another division or department of the Agent, it may be treated as confidential to that division or department and the Agent shall not be deemed to have notice of it.

(c)

Notwithstanding any other provision of any Finance Document to the contrary, neither the Agent, any Bookrunner nor any Mandated Lead Arranger is obliged to disclose to any other person (i) any confidential information or (ii) any other information if the disclosure would, or might in its reasonable opinion, constitute a breach of any law or regulation or a breach of a fiduciary duty.

27.15

Relationship with the Lenders

(a)

The Agent may treat the person shown in its records as Lender at the opening of business (in the place of the Agent’s principal office as notified to the Finance Parties from time to time) as the Lender acting through its Facility Office:

(i)

entitled to or liable for any payment due under any Finance Document on that day; and

(ii)

entitled to receive and act upon any notice, request, document or communication or make any decision or determination under any Finance Document made or delivered on that day,

unless it has received not less than five (5) Business Days prior notice from that Lender to the contrary in accordance with the terms of this Agreement.

(b)

Each Lender shall supply the Agent with any information required by the Agent in order to calculate the Mandatory Cost in accordance with Schedule 9 ( Mandatory Cost Formula ).

(c)

Each Lender shall supply the Agent with any information that the Agent may reasonably specify as being necessary or desirable to enable the Agent to perform its functions as Agent.

(d)

Each Lender shall deal with the Security Agent exclusively through the Agent and shall not deal directly with the Security Agent.

27.16

Credit appraisal by the Lenders

Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Lender confirms to each other Finance Party that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Finance Document including but not limited to:

(a)

the financial condition, status and nature of each Obligor and other member of the Group;

80 (129)

(b)

the legality, validity, effectiveness, adequacy or enforceability of any Finance Document, each Charter Contract and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or any Charter Contract;

(c)

the application of any Basel II Regulation or Basel III Regulation to the transactions contemplated by the Finance Documents;

(d)

whether any Finance Party has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or the Charged Property;

(e)

the adequacy, accuracy and/or completeness of any information provided by the Agent, any Party or by any other person under or in connection with any Finance Document or any Charter Contract, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or any Charter Contract; and

(f)

the right or title of any person in or to, or the value or sufficiency of, any part of the Charged Property, the priority of the Security Documents or the existence of any Security Interest affecting the Charged Property.

27.17

Reference Banks

If a Reference Bank (or, if a Reference Bank is not a Lender, the Lender of which it is an Affiliate) ceases to be a Lender, the Agent shall (in consultation with the Parent) appoint another Lender or an Affiliate of a Lender to replace that Reference Bank.

27.18

Deduction from amounts payable by the Agent

If any Party owes an amount to the Agent under the Finance Documents the Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted.

27.19

Reliance and engagement letters

Each Finance Party confirms that each of the Bookrunners, Mandated Lead Arrangers, the Security Agent and the Agent has authority to accept on its behalf (and ratifies the acceptance on its behalf of any letters or reports already accepted by the Bookrunners, the Mandated Lead Arrangers, the Security Agent or the Agent) the terms of any reliance letter or engagement letters relating to any reports, opinions or letters provided by accountants or other professional

81 (129)

advisers in connection with the Finance Documents or the transactions contemplated in the Finance Documents and to bind it in respect of those reports, opinions or letters and to sign such letters on its behalf and further confirms that it accepts the terms and qualifications set out in such letters.

27.20

Common parties

Although the Agent and the Security Agent may from time to time be the same entity, that entity will have entered into the Finance Documents (to which it is party) in its separate capacities as agent for the Finance Parties and (as appropriate) security agent and trustee for the Finance Parties. Where any Finance Document provides for the Agent or Security Agent to communicate with or provide instructions to the other, while they are the same entity, such communication or instructions will not be necessary.

27.21

Security Agent

(a)

Each other Finance Party appoints the Security Agent to act as its agent and (to the extent permitted under any applicable law) trustee under and in connection with the Security Documents and confirms that the Security Agent shall have a lien on the Security Documents and the proceeds of the enforcement of those Security Documents for all moneys payable to the beneficiaries of those Security Documents.

(b)

Each other Finance Party authorises the Security Agent:

(i)

to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Security Agent under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions; and

(ii)

to execute each of the Security Documents and all other documents that may be approved by the Agent and/or the Required Lenders for execution by it.

(c)

The Security Agent accepts its appointment under clause 27.21 ( Security Agent ) as trustee of the Trust Property with effect from the date of this Agreement and declares that it holds the Trust Property on trust for itself, the other Finance Parties (for so long as they are Finance Parties) on and subject to the terms set out in clauses 27.21 - 27.34 (inclusive) and the Security Documents to which it is a party.

27.22

Application of certain clauses to Security Agent

(a)

Clauses 27.3(a) ( Duties of Agent ), 27.7 ( Rights and discretions of the Agent ), 27.8 ( Responsibility for documentation and other matters ), clause 27.9 (No duty to monitor) , 27.10 ( Exclusion of liability ), 27.11 ( Lenders’ indemnity to the Agent ), 27.12 ( Resignation of the Agent ), 27.14 ( Confidentiality ), 27.15 ( Relationship with the Lenders ), 27.16 ( Credit appraisal by the Lenders ) and 27.18 ( Deduction from amounts payable by the Agent ) shall each extend so as to apply to the Security Agent in its capacity as such and for that purpose each reference to the “Agent” in these clauses shall extend to include in addition a reference to the “Security Agent” in its capacity as such and, in clause 27.7 ( Rights and discretions of the Agent ), references to the Lenders and a group of Lenders shall refer to the Agent.

82 (129)

(b)

In addition:

(i)

clause 27.10 ( Exclusion of liability ) shall, for the purposes of its application to the Security Agent pursuant to paragraph (a) above, have the following additional sub-clauses:

(A)

any losses to any person or any liability arising as a result of taking or refraining from taking any action in relation to any of the Finance Documents or otherwise whether in accordance with an instruction from an Agent or otherwise unless directly caused by its gross negligence or wilful misconduct;

(B)

the exercise of, or the failure to exercise (or the failure to consider the exercise or non-exercise of), any judgment, discretion or power given to it by or in connection with any of the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, the Finance Documents or the Security Interests; or

(C)

any shortfall which arises on the enforcement or realisation of the Security Interests;

(ii)

clause 27.12 ( Resignation of the Agent ) shall, for the purposes of its application to the Security Agent pursuant to paragraph (a) above, have the following additional sub-clause:

At any time after the appointment of a successor, the retiring Security Agent shall do and execute all acts, deeds and documents reasonably required by its successor to transfer to it (or its nominee, as it may direct) any property, assets and rights previously vested in the retiring Security Agent pursuant to the Security Documents and which shall not have vested in its successor by operation of law; and

(iii)

clause 27.14 ( Confidentiality ) shall, for the purposes of its application to the Security Agent pursuant to paragraph (a) above, be read and construed as to refer to “its agency and trust department” instead of “its department, division or team directly responsible for the management of the Finance Documents”.

27.23

Instructions to Security Agent

(a)

The Security Agent shall:

(i)

unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Security Agent in accordance with any instructions given to it by the Agent; and

(ii)

not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with paragraph (i) above.

(b)

The Security Agent shall be entitled (but not obliged) to request instructions, or clarification of any instruction, from the Agent as to whether, and in what manner, it

83 (129)

should exercise or refrain from exercising any right, power, authority or discretion and the Security Agent may refrain from acting unless and until it receives those instructions or that clarification.

(c)

Unless a contrary indication appears in a Finance Document, any instructions given to the Security Agent by the Agent shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties.

(d)

The Security Agent may refrain from acting in accordance with any instructions of the Agent until it has received any indemnification and/or security and/or pre-funding and/or insurance that it may in its discretion require (which may be greater in extent than that contained in the Finance Documents and which may include payment in advance) for any cost, loss or liability which it may incur in complying with those instructions.

(e)

In the absence of instructions, the Security Agent may act (or refrain from acting) as it considers to be in the best interest of the Lenders.

(f)

The Security Agent is not authorised to act on behalf of a Lender (without first obtaining that Lender’s consent) in any legal or arbitration proceedings relating to any Finance Document. This paragraph (f) shall not apply to any legal or arbitration proceeding relating to the perfection, preservation or protection of rights under the Security Documents or enforcement of the Security Documents.

27.24

Security Agent’s actions

Without prejudice to the provisions of clause 27.23 ( Instructions to Security Agent ) the Security Agent may (but shall not be obliged to), in the absence of any instructions to the contrary, take such action in the exercise of any of its powers and duties under the Finance Documents as it considers in its discretion to be appropriate.

27.25

Application following an Event of Default

(a)

Following an Event of Default all moneys received by the Agent or the Security Agent shall be applied in the following order:

(i)

firstly, in respect of all costs and expenses whatsoever incurred by the Security Agent in connection with or pursuant to the performance of its functions under the Finance Documents, including the costs of realising and enforcing the Security Documents;

(ii)

secondly, in respect of all costs and expenses whatsoever incurred by the Agent;

(iii)

thirdly, in or towards satisfaction of all prior claims (being any claims, liabilities or debts owed which in any such case have been evidenced to the Finance Parties and take priority over any moneys received in respect of the Security Interests constituted by the Security Documents) secured on the Finance Parties’ secured assets;

84 (129)

(iv)

fourthly, in or towards payment pro rata of all sums owed to the Finance Parties under the Finance Documents (in the case of distributions by the Security Agent, it shall pay such sums to the Agent for distribution to the Finance Parties); and

(v)

fifthly, the balance (if any) to the Borrowers or to their order.

(b)

The Security Agent and the Agent shall make each application as soon as is practicable after the relevant moneys are received by, or otherwise become available to, it save that (without prejudice to any other provision contained in any of the Security Documents) the Security Agent (acting on the instructions of the Agent) or any receiver or administrator may credit any moneys received by it to a suspense account for so long and in such manner as the Security Agent), or such receiver or administrator may from time to time determine with a view to preserving the rights of the Finance Parties or any of them to prove for the whole of their respective claims against the Borrowers or any other person liable.

(c)

The Security Agent and the Agent shall obtain a good discharge in respect of the amounts expressed to be due to the other Finance Parties as referred to in this clause 27.25 by paying such amounts to the Agent for distribution in accordance with clause 30 ( Payment mechanics ).

27.26

Partial payments

If the Agent receives a payment that is insufficient to discharge all the amounts then due and payable by an Obligor under the Finance Documents, the Agent shall apply that payment towards the obligations of the Obligor under the Finance Documents in the following order:

(a)

firstly, in or towards payment of any unpaid fees, costs and expenses of the Security Agent under the Finance Documents;

(b)

secondly, in or towards payment pro rata of any unpaid fees, costs and expenses of the Agent under the Finance Documents;

(c)

thirdly, in or towards payment pro rata of any accrued interest (including default interest), fee or commissions due but unpaid under this Agreement;

(d)

fourthly, in or towards payment pro rata of any principal due but unpaid under this Agreement; and

(e)

fifthly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents.

27.27

Powers and duties of the Security Agent as trustee of the security

In its capacity as trustee in relation to the Trust Property, the Security Agent:

(a)

shall, without prejudice to any of the powers, discretions and immunities conferred upon trustees by law (and to the extent not inconsistent with the provisions of this Agreement or any of the Security Documents), have all the same powers and discretions as a natural person acting as the beneficial owner of such property and/or as are conferred upon the Security Agent by this Agreement and/or any Security

85 (129)

Document but so that the Security Agent may only exercise such powers and discretions to the extent that it is authorised to do so by the provisions of this Agreement of a natural person;

(b)

shall (subject to clause 27.25 ( Application following an Event of Default )) be entitled (in its own name or in the names of nominees) to invest moneys from time to time forming part of the Trust Property or otherwise held by it as a consequence of any enforcement of the security constituted by any Finance Document which, in the reasonable opinion of the Security Agent, it would not be practicable to distribute immediately, by placing the same on deposit in the name or under the control of the Security Agent as the Security Agent may think fit without being under any duty to diversify the same and the Security Agent shall not be responsible for any loss due to interest rate or exchange rate fluctuations except for any loss arising from the Security Agent’s gross negligence or wilful default if the Security Agent places it in an account held with itself or through a subsidiary of the Security Agent, the Security Agent shall only be liable to account for the standard amount of interest that would have been payable by it on such a deposit to an independent customer;

(c)

may, in the conduct of its obligations under and in respect of the Security Documents, instead of acting personally, employ and pay any agent (whether being a lawyer or any other person) to transact or concur in transacting any business and to do or concur in doing any acts required to be done by the Security Agent (including the receipt and payment of money) and on the basis that (i) any such agent engaged in any profession or business shall be entitled to be paid all usual professional and other charges for business transacted and acts done by him or any partner or employee of his or her in connection with such employment and (ii) the Security Agent shall not be bound to supervise, or be responsible for any loss incurred by reason of any act or omission of, any such agent if the Security Agent shall have exercised reasonable care in the selection of such agent;

(d)

may place all deeds and other documents relating to the Trust Property which are from time to time deposited with it pursuant to the Security Documents in any safe deposit, safe or receptacle selected by the Security Agent or with any firm of solicitors or company whose business includes undertaking the safe custody of documents selected by the Security Agent and may make any such arrangements as it thinks fit for allowing Obligors access to, or its solicitors or auditors possession of, such documents when necessary or convenient and the Security Agent shall not be responsible for any loss incurred in connection with any such deposit, access or possession if it has exercised reasonable care in the selection of a safe deposit, safe, receptacle or firm of solicitors or company;

(e)

may, unless and to the extent the express provisions of any Security Document provide otherwise, do any act or thing in the exercise of any of its duties under the Finance Documents which in its absolute discretion (in the absence of any instructions of the Agent as to the doing of such act or thing) it deems advisable for the protection and benefit of all the Finance Parties; and

(f)

may, unless the express provisions of any such Security Document provide otherwise, if authorised by the Agent, amend or vary the terms of or waive breaches of or

86 (129)

defaults under, or otherwise excuse performance of any provision of, or grant consents under any of the Security Documents to which it is a party, any such amendment, variation, waiver or consent so authorised to be binding on all the parties hereto and that Security Agent to be under no liability whatsoever in respect thereof.

(g)

shall not be bound to disclose to any other person (including but not limited to any Secured Party) (i) any confidential information or (ii) any other information if disclosure would, or might in its reasonable opinion, constitute a breach of any law or be a breach of fiduciary duty; and

(h)

shall not have or be deemed to have any relationship of trust or agency with, any Obligor.

The rights, powers and discretions conferred upon the Security Agent by this Agreement shall be supplemental to the Trustee Act 1925 and the Trustee Act 2000 and in addition to any which may be vested in the Security Agent by general law or otherwise.

Section 1 of the Trustee Act 2000 shall not apply to the duties of the Security Agent in relation to the trusts constituted by this Agreement. Where there are any inconsistencies between the Trustee Act 1925 or the Trustee Act 2000 and the provisions of this Agreement, the provisions of this Agreement shall, to the extent allowed by law, prevail and, in the case of any inconsistency with the Trustee Act 2000, the provisions of this Agreement shall constitute a restriction or exclusion for the purposes of that Act.

27.28

Insurance by Security Agent

Where the Security Agent is named on any insurance policy (including the Insurances) as an insured party and/or loss payee, the Security Agent shall not be responsible for any loss which may be suffered by reason of, directly or indirectly, its failure to notify the insurers of any material fact relating to the risk assumed by such insurers or any other information of any kind, unless an Agent shall have requested it to do so in writing and the Security Agent shall have failed to do so within 14 days after receipt of that request. The Security Agent shall have no obligation to, or any liability for any failure to, insure any of the Charged Property.

27.29

Custodians and nominees

The Security Agent may (to the extent legally permitted) appoint and pay any person to act as a custodian or nominee on any terms in relation to any assets of the trust as the Security Agent may determine, including for the purpose of depositing with a custodian this Agreement or any document relating to the trust created under this Agreement and the Security Agent shall not be responsible for any loss, liability, expense, demand, cost, claim or proceedings incurred by reason of the misconduct, omission or default on the part of any person appointed by it under this Agreement or be bound to supervise the proceedings or acts of any person.

27.30

Acceptance of title

The Security Agent shall be entitled to accept without enquiry, and shall not be obliged to investigate, any right and title that any of the Obligors have to any of the Charged Property and shall not be liable for or bound to require any Debtor to remedy any defect in its right or title.

87 (129)

27.31

Refrain from illegality

Notwithstanding anything to the contrary expressed or implied in the Finance Documents, the Security Agent may refrain from doing anything which in its opinion will or may be contrary to any relevant law, directive or regulation of any applicable jurisdiction and the Security Agent may do anything which is, in its opinion, necessary to comply with any such law, directive or regulation.

27.32

All enforcement action through the Security Agent

(a)

None of the other Finance Parties shall have any independent power to enforce any of those Security Documents which are executed in favour of the Security Agent only or to exercise any rights, discretions or powers or to grant any consents or releases under or pursuant to such Security Documents or otherwise have direct recourse to the security and/or guarantees constituted by such Security Documents except through the Security Agent.

(b)

None of the other Finance Parties shall have any independent power to enforce any of those Security Documents which are executed in their favour or to exercise any rights, discretions or powers or to grant any consents or releases under or pursuant to such Security Documents or otherwise have direct recourse to the security and/or guarantees constituted by such Security Documents except through the Security Agent. If any Finance Party (other than the Security Agent) is a party to any Security Document it shall promptly upon being requested by the Agent to do so grant a power of attorney or other sufficient authority to the Security Agent to enable the Security Agent to exercise any rights, discretions or powers or to grant any consents or releases under such Security Document.

27.33

Co-operation to achieve agreed priorities of application

The other Finance Parties shall co-operate with each other and with the Security Agent and any receiver or administrator under the Security Documents in realising the property and assets subject to the Security Documents and in ensuring that the net proceeds realised under the Security Documents after deduction of the expenses of realisation are applied in accordance with clause 27.25 ( Application following an Event of Default ).

27.34

Indemnity from Trust Property

In respect of all liabilities, costs or expenses for which the Obligors are liable under this Agreement, the Security Agent and each Affiliate of the Security Agent and each officer or employee of the Security Agent or its Affiliate (each a “ Relevant Person ”) shall be entitled to be indemnified out of the Trust Property in respect of all liabilities, damages, costs, claims, charges or expenses whatsoever properly incurred or suffered by such Relevant Person:

(a)

in the execution or exercise or bona fide purported execution or exercise of the trusts, rights, powers, authorities, discretions and duties created or conferred by or pursuant to the Finance Documents;

(b)

as a result of any breach by an Obligor of any of its obligations under any Finance Document;

88 (129)

(c)

in respect of any Environmental Claim made or asserted against a Relevant Person which would not have arisen if the Finance Documents had not been executed; and

(d)

in respect of any matter or thing done or omitted in any way in accordance with the terms of the Finance Documents relating to the Trust Property or the provisions of any of the Finance Documents.

The rights conferred by this clause 27.34 are without prejudice to any right to indemnity by law given to trustees generally and to any provision of the Finance Documents entitling the Security Agent or any other person to an indemnity in respect of, and/or reimbursement of, any liabilities, costs or expenses incurred or suffered by it in connection with any of the Finance Documents or the performance of any duties under any of the Finance Documents. Nothing contained in this clause 27.34 shall entitle the Security Agent or any other person to be indemnified in respect of any liabilities, damages, costs, claims, charges or expenses to the extent that the same arise from such person’s own gross negligence or wilful default.

27.35

Finance Parties to provide information

The other Finance Parties shall provide the Security Agent with such written information as it may reasonably require for the purposes of carrying out its duties and obligations under the Security Documents and, in particular, with such necessary directions in writing so as to enable the Security Agent to make the calculations and applications contemplated by clause 27.25(a) ( Application following an Event of Default ) above and to apply amounts received under, and the proceeds of realisation of, the Security Documents as contemplated by the Security Documents, clause 27.26 ( Partial payments ) and clause 27.25(a) ( Application following an Event of Default ).

27.36

No Reliance on Security Agent

It is understood and agreed by each Finance Party (other than the Security Agent) that it has itself been, and will continue to be, solely responsible for making its own independent appraisal of and investigations into the financial condition, creditworthiness, condition, affairs, status and nature of each Obligor and, accordingly, the Security Agent shall not have any liability or responsibility for and each other Finance Party warrants to the Security Agent that it has not relied and will not hereafter rely on the Security Agent:

(a)

to check or enquire on its behalf into the adequacy, accuracy or completeness of any information provided to it by any Obligor or any other person in connection with any of the Finance Documents or the transactions therein contemplated (whether or not such information has been or is hereafter circulated to such Finance Party by the Security Agent);

(b)

to check or enquire on its behalf into the adequacy, accuracy or completeness of any communication delivered to it under any of the Finance Documents, any legal or other opinions, reports, valuations, certificates, appraisals or other documents delivered or made or required to be delivered or made at any time in connection with any of the Finance Documents, any security to be constituted thereby or any other report or other document, statement or information circulated, delivered or made, whether orally or otherwise and whether before, on or after the date of this Agreement;

89 (129)

(c)

to check or enquire on its behalf into the due execution, delivery, validity, legality, perfection, adequacy, suitability, performance, enforceability or admissibility in evidence of any of the Finance Documents or any other document referred to in paragraph (b) above or of any guarantee, indemnity or security given or created thereby or any obligations imposed thereby or assumed thereunder;

(d)

to check or enquire on its behalf into the ownership, value, existence or sufficiency of any property the subject of any of the Security Document, the priority of any of the Security Interests or the registration thereof, the right or title of any person in or to any property comprised therein or the existence of any encumbrance affecting the same; or

(e)

to assess or keep under review on its behalf the identity, financial condition, creditworthiness, condition, affairs, status or nature of any Obligor.

27.37

Release to facilitate enforcement and realisation

Each Finance Party acknowledges that pursuant to any enforcement action by the Security Agent (or a Receiver) carried out on the instructions of the Agent it may be desirable for the purpose of such enforcement and/or maximising the realisation of the Charged Property being enforced against, that any rights or claims of or by the Security Agent (for the benefit of the Finance Parties) and/or any Finance Parties against any Obligor and/or any Security Interest over any assets of any Obligor (in each case) as contained in or created by any Finance Document, other than such rights or claims or security being enforced, be released in order to facilitate such enforcement action and/or realisation and, notwithstanding any other provision of the Finance Documents, each Finance Party hereby irrevocably authorises the Security Agent (acting on the instructions of the Agent) to grant any such releases to the extent necessary to fully effect such enforcement action and realisation including, without limitation, to the extent necessary for such purposes to execute release documents in the name of and on behalf of the Finance Parties. Where the relevant enforcement is by way of disposal of shares in an Obligor, the requisite release shall include releases of all claims (including under guarantees) of the Finance Parties and/or the Security Agent against such Obligor and of all Security Interests over the assets of such Obligor.

27.38

Undertaking to pay

Each Obligor which is a Party undertakes with the Security Agent on behalf of the Finance Parties that it will, on demand by the Security Agent, pay to the Security Agent all money from time to time owing, and discharge all other obligations from time to time incurred, by it under or in connection with the Finance Documents.

27.39

Additional trustees

The Security Agent shall have power by notice in writing to the other Finance Parties and the Parent to appoint any person, unless an Event of Default has occurred and is continuing, approved by the Parent (such approval not to be unreasonably withheld or delayed) either to act as separate trustee or as co-trustee jointly with the Security Agent:

(a)

if the Security Agent reasonably considers such appointment to be in the best interests of the Finance Parties;

90 (129)

(b)

for the purpose of conforming with any legal requirement, restriction or condition in any jurisdiction in which any particular act is to be performed; or

(c)

for the purpose of obtaining a judgment in any jurisdiction or the enforcement in any jurisdiction against any person of a judgment already obtained,

and any person so appointed shall (subject to the provisions of this Agreement) have such rights (including as to reasonable remuneration), powers, duties and obligations as shall be conferred or imposed by the instrument of appointment. The Security Agent shall have power to remove any person so appointed. At the request of the Security Agent, the other parties to this Agreement shall forthwith execute all such documents and do all such things as may be required to perfect such appointment or removal and each such party irrevocably authorises the Security Agent in its name and on its behalf to do the same. Such a person shall accede to this Agreement as a Security Agent to the extent necessary to carry out their role on terms satisfactory to the Security Agent and (subject always to the provisions of this Agreement) have such trusts, powers, authorities, liabilities and discretions (not exceeding those conferred on the Security Agent by this Agreement and the other Finance Documents) and such duties and obligations as shall be conferred or imposed by the instrument of appointment (being no less onerous than would have applied to the Security Agent but for the appointment). The Security Agent shall not be bound to supervise, or be responsible for any loss incurred by reason of any act or omission of, any such person if the Security Agent shall have exercised reasonable care in the selection of such person.

27.40

Non-recognition of trust

It is agreed by all the parties to this Agreement that:

(a)

in relation to any jurisdiction the courts of which would not recognise or give effect to the trusts expressed to be constituted by this clause 27, the relationship of the Security Agent and the other Finance Parties shall be construed as one of principal and agent, but to the extent permissible under the laws of such jurisdiction, all the other provisions of this Agreement shall have full force and effect between the parties to this Agreement; and

(b)

the provisions of this clause 27 insofar as they relate to the Security Agent in its capacity as trustee for the Finance Parties and the relationship between themselves and the Security Agent as their trustee may be amended by agreement between the other Finance Parties and the Security Agent. The Security Agent may amend all documents necessary to effect the alteration of the relationship between the Security Agent and the other Finance Parties and each such other party irrevocably authorises the Security Agent in its name and on its behalf to execute all documents necessary to effect such amendments.

27.41

Release of Security

If the Agent determines that the Security Period has expired, then the Security Agent shall, with the approval of all the other Finance Parties, release, without recourse or warranty, all of the security then held by it, whereupon the Security Agent, the other Finance Parties and all Obligors shall be released from their obligations hereunder (save for those which arose prior to such winding up).

91 (129)

28.

CONDUCT OF BUSINESS BY THE FINANCE PARTIES

28.1

Finance Parties tax affairs

No provision of this Agreement will:

(a)

interfere with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever manner it thinks fit;

(b)

oblige any Finance Party to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or

(c)

oblige any Finance Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.

28.2

Finance Parties acting together

Notwithstanding clause 2.2 ( Finance Parties’ rights and obligations ), if the Agent makes a declaration under clause 25.17 ( Acceleration ) the Agent shall, in the names of all the Finance Parties (other than the Security Agent), take such action on behalf of the Finance Parties and conduct such negotiations with the Parent and any members of the Group and generally administer the Facility in accordance with the wishes of the Required Lenders. All the Finance Parties shall be bound by the provisions of this clause 28.2 and no Finance Party shall be entitled to take action independently against any Obligor or any of its assets without the prior consent of the Required Lenders.

This clause shall not override clause 27 ( Roles of Agent, Security Agent, Mandated Lead Arrangers and Bookrunners ) as it applies to the Security Agent.

28.3

Required Lenders

(a)

Where any Finance Document provides for any matter to be determined by reference to the opinion of, or to be subject to the consent, approval or request of, the Required Lenders or for any action to be taken on the instructions of the Required Lenders (a “ majority decision ”), such majority decision shall (as between the Lenders) only be regarded as having been validly given or issued by the Required Lenders if all the Lenders shall have received prior notice of the matter on which such majority decision is required and the relevant majority of Lenders shall have given or issued such majority decision. However (as between any Obligor and the Finance Parties) the relevant Obligor shall be entitled (and bound) to assume that such notice shall have been duly received by each Lender and that the relevant majority shall have been obtained to constitute Required Lenders when notified to this effect by the Agent whether or not this is the case.

(b)

If, within ten (10) Business Days of the Agent despatching to each Lender a notice requesting instructions (or confirmation of instructions) from the Lenders or the agreement of the Lenders to any amendment, modification, waiver, variation or excuse of performance for the purposes of, or in relation to, any of the Finance Documents, the Agent has not received a reply specifically giving or confirming or refusing to give or confirm the relevant instructions or, as the case may be, approving or refusing to approve the proposed amendment, modification, waiver, variation or excuse of

92 (129)

performance, then (irrespective of whether such Lender responds at a later date) the Agent shall treat any Lender which has not so responded as having indicated a desire to be bound by the wishes of 66 ² ⁄ ₃ % of those Lenders (measured in terms of the total Commitments of those Lenders) which have so responded.

(c)

For the purposes of paragraph (b) above, any Lender which notifies the Agent of a wish or intention to abstain on any particular issue shall be treated as if it had not responded.

(d)

paragraph (b) and (c) above shall not apply in relation to those matters referred to in, or the subject of, clause 29.5 ( Exceptions ).

28.4

Conflicts

(a)

Each Borrower acknowledges that any Bookrunner or Mandated Lead Arranger and its parent undertaking, subsidiary undertakings and fellow subsidiary undertakings (together an “ Arranger Group ”) may be providing debt finance, equity capital or other services (including financial advisory services) to other persons with which the Borrowers may have conflicting interests in respect of the Facility or otherwise.

(b)

No member of an Arranger Group shall use confidential information gained from any Obligor by virtue of the Facility or its relationships with any Obligor in connection with their performance of services for other persons. This shall not, however, affect any obligations that any member of an Arranger Group has as Agent in respect of the Finance Documents. Each Obligor also acknowledges that no member of an Arranger Group has any obligation to use or furnish to any Obligor information obtained from other persons for their benefit.

(c)

The terms parent undertaking , subsidiary undertaking and fellow subsidiary undertaking when used in this clause have the meaning given to them in sections 1161 and 1162 of the Companies Act 2006.

29.

SHARING AMONG THE FINANCE PARTIES

29.1

Payments to Finance Parties

If a Finance Party (other than the Security Agent in respect of its fees, costs and expenses received for its own account) (a “ Recovering Finance Party ”) receives or recovers any amount from an Obligor other than in accordance with clause 30 ( Payment mechanics ) (a “ Recovered Amount ”) and applies that amount to a payment due under the Finance Documents then:

(a)

the Recovering Finance Party shall, within three Business Days, notify details of the receipt or recovery, to the Agent;

(b)

the Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Finance Party would have been paid had the receipt or recovery been received or made by the Agent and distributed in accordance with clause 30 ( Payment mechanics ), without taking account of any Tax which would be imposed on the Agent in relation to the receipt, recovery or distribution; and

93 (129)

(c)

the Recovering Finance Party shall, within three Business Days of demand by the Agent, pay to the Agent an amount (the “ Sharing Payment ”) equal to such receipt or recovery less any amount which the Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with clause 27.26 ( Partial payments ).

29.2

Redistribution of payments

The Agent shall treat the Sharing Payment as if it had been paid by the relevant Obligor and distribute it between the Finance Parties (other than the Recovering Finance Party) (the “ Sharing Finance Parties ”) in accordance with clause 27.26 ( Partial payments ) towards the obligations of that Obligor to the Sharing Finance Parties.

29.3

Recovering Finance Party’s rights

On a distribution by the Agent under clause 29.2 ( Redistribution of payments ) of a payment received by a Recovering Finance Party from an Obligor, as between the relevant Obligor and the Recovering Finance Party, an amount of the Recovered Amount equal to the Sharing Payment will be treated as not having been paid by that Obligor.

29.4

Reversal of redistribution

If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then:

(a)

each Sharing Finance Party shall, upon request of the Agent, pay to the Agent for the account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay) (the Redistributed Amount); and

(b)

as between the relevant Obligor and each relevant Sharing Finance Party, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by that Obligor.

29.5

Exceptions

(a)

This clause 29 shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this clause, have a valid and enforceable claim against the relevant Obligor.

(b)

A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of taking legal or arbitration proceedings, if:

(i)

it notified that other Finance Party of the legal or arbitration proceedings;

(ii)

the taking legal or arbitration proceedings was in accordance with the terms of this Agreement; and

(iii)

that other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings.

94 (129)

30.

PAYMENT MECHANICS

30.1

Payments to the Agent

(a)

On each date on which an Obligor or a Lender is required to make a payment under a Finance Document, that Obligor or Lender shall make the same available to the Agent (unless a contrary indication appears in a Finance Document) for value on the due date at the time and in such funds specified by the Agent as being customary at the time for settlement of transactions in the relevant currency in the place of payment.

(b)

Payment shall be made to such account in the principal financial centre of the country of that currency and with such bank as the Agent, in each case, specifies.

30.2

Distributions by the Agent

Each payment received by the Agent under the Finance Documents for another Party shall, subject to clause 30.3 ( Distributions to an Obligor ) and clause 30.4 ( Clawback and pre-funding ) be made available by the Agent as soon as practicable after receipt to the Party entitled to receive payment in accordance with this Agreement (in the case of a Lender, for the account of its Facility Office), to such account as that Party may notify to the Agent by not less than five Business Days’ notice with a bank specified by that Party in the principal financial centre of the country of that currency.

30.3

Distributions to an Obligor

The Agent may (with the consent of the Obligor or in accordance with clause 31 ( Set-off )) apply any amount received by it for that Obligor in or towards payment (on the date and in the currency and funds of receipt) of any amount due from that Obligor under the Finance Documents or in or towards purchase of any amount of any currency to be so applied.

30.4

Clawback and pre-funding

(a)

Where a sum is to be paid to the Agent under the Finance Documents for another Party, the Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum.

(b)

Unless paragraph (c) below applies, if the Agent pays an amount to another Party and it proves to be the case that the Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Agent shall on demand refund the same to the Agent together with interest on that amount from the date of payment to the date of receipt by the Agent, calculated by the Agent to reflect its cost of funds.

95 (129)

(c)

If the Agent is willing to make available amounts for the account of a Borrower before receiving funds from the Lenders then if and to the extent that the Agent does so but it proves to be the case that it does not then receive funds from a Lender in respect of a sum which it paid to a Borrower:

(i)

the Borrowers shall on demand refund it to the Agent; and

(ii)

the Lender by whom those funds should have been made available or, if that Lender fails to do so, the Borrowers, shall on demand pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding cost incurred by it as a result of paying out that sum before receiving those funds from that Lender.

30.5

No set-off by Obligors

All payments to be made by an Obligor under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.

30.6

Business Days

(a)

Any payment under the Finance Documents which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).

(b)

During any extension of the due date for payment of any principal or Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.

30.7

Currency of account

(a)

Subject to paragraphs (b) and (c) (inclusive) below, dollars is the currency of account and payment for any sum due from an Obligor under any Finance Document.

(b)

A repayment of all or part of the Loan or an Unpaid Sum and each payment of interest shall be made in dollars on its due date.

(c)

Each payment in respect of the amount of any costs, expenses or Taxes or other losses shall be made in dollars and, if they were incurred in a currency other than dollars, the amount payable under the Finance Documents shall be the equivalent in dollars of the relevant amount in such other currency on the date on which it was incurred.

(d)

All moneys received or held by the Security Agent or by a Receiver under a Security Document in a currency other than dollars may be sold for dollars and the Obligor which executed that Security Document shall indemnify the Security Agent against the full cost in relation to the sale. Neither the Security Agent nor such Receiver will have any liability to that Obligor in respect of any loss resulting from any fluctuation in exchange rates after the sale.

31.

SET-OFF

A Finance Party may, to the extent permitted by applicable law, set off any matured obligation due from any Obligor under the Finance Documents (to the extent beneficially owned by that Finance Party) against any credit balance on any account that Obligor has with that Finance Party or against any other obligations owed by that Finance Party to that Obligor, regardless of

96 (129)

the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.

32.

NOTICES

32.1

Communication in writing

Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by telefax or letter. Any such notice or communication addressed as provided in clause 32.2 ( Addresses ) will be deemed to be given or made as follows:

(a)

if by letter, when delivered at the address of the relevant Party;

(b)

if by telefax, when received

However, a notice given in accordance with the above but received on a day which is not a Business Day or after 16:00 hours in the place of receipt will only be deemed to be given at 9:00 hours on the next Business Day in that place.

32.2

Addresses

Any communication or document to be made under or in connection with the Finance Documents shall be made or delivered to the address and telefax number of each Party and marked for the attention of the department or persons set out below and, in case of any New Lender, to the address notified to the Agent:


If to the Agent:		Citibank International Plc London
		Loans Agency
		5th Floor, Citigroup Centre
		25 Canada Square
		London E14 5LB
		Attn: Loans Agency
		Telefax No: +44 20 8836 3624

If to the Security Agent:		Citibank, N.A., London branch
		13th Floor, Citigroup Centre
		Canada Square
		Canary Wharf
		London E14 5LB
		Attn: Agency & Trust
		Telefax No: +44 20 7500 5877

If to the Parent (on behalf of itself, the Borrowers and the Guarantors):		Seadrill Limited
		c/o Seadrill Management AS
		Løkkeveien 111
		N-4007 Stavanger, Norway
		Attn: Head of Treasury and Financing
		Telefax No: + 47 51 30 96 88

97 (129)

or any substitute address and/or telefax number and/or marked for such other attention as the Party may notify to the Agent (or the Agent may notify the other Parties if a change is made by the Agent) by not less than five (5) Business Days’ prior notice.

32.3

Communication with the Obligors

All communication from or to any of the Obligors shall be sent through the Agent, and any communication or document made or delivered to the Parent in accordance with this clause 32.3 will be deemed to have been made or delivered to each of the Obligors.

32.4

Language

Communication to be given by one Party to another under the Finance Documents shall be given in the English language or, if not in English and if so required by the Agent, be accompanied by a certified English translation and, in this case, the English translation shall prevail unless the document is a statutory or other official document.

32.5

Electronic communication

(a)

Any communication to be made between the Agent, the Security Agent, a Lender and an Obligor under or in connection with the Finance Documents (except notices to be sent to the Security Agent) may be made by electronic mail or other electronic means, if the Agent, the Security Agent, the relevant Lender and the relevant Obligor (as the case may be):

(i)

agree that, unless and until notified to the contrary, this is to be an accepted form of communication;

(ii)

notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and

(iii)

notify each other of any change to their address or any other such information supplied by them.

(b)

Any electronic communication made between the Agent, a Lender and an Obligor will be effective only when actually received in readable form and in the case of any electronic communication made by a Lender or an Obligor to the Agent only if it is addressed in such a manner as the Agent shall specify for this purpose.

33.

CALCULATIONS

All sums falling due by way of interest, fees and commissions under the Finance Documents accrue from day-to-day and shall be calculated on the basis of the actual number of days elapsed and a calendar year of 360 days. The calculations made by the Agent of any interest rate or any amount payable pursuant to this Agreement shall be conclusive and binding upon the Borrowers in the absence of any manifest error.

98 (129)

34.

MISCELLANEOUS

34.1

Partial invalidity

If, at any time, any provision of the Finance Documents is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provisions under any law of any other jurisdiction will in any way be affected or impaired.

34.2

Remedies and waivers

No failure to exercise, nor any delay in exercising on the part of any Finance Party, any right or remedy under the Finance Documents shall operate as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.

34.3

Amendments and waivers

34.3.1

Required consents

(a)

Subject to clause 34.3.2, any term of the Finance Documents may be amended or waived only with the written consent of the Required Lenders, the Obligors and any such amendment will be binding on all Parties.

(b)

The Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by this clause 34.3.

34.3.2

Exceptions

An amendment to or waiver that has the effect of changing or which relates to any of the following:

(a)

the definition of “Required Lenders”;

(b)

an extension of the date of any payment of any amount under the Finance Documents;

(c)

a reduction in the Applicable Margin or a reduction in the amount of any payment of principal, interest, fees or commission payable;

(d)

an increase in or extension of any Lenders’ Commitment;

(e)

a term of the Finance Documents which expressly requires the consent of all the Lenders;

(f)

a proposed substitution or replacement of any of the Obligors;

(g)

clause 2.2 ( Finance parties’ rights and obligations );

(h)

a release of any Guarantors, any Guarantees provided by the Guarantors pursuant to this Agreement, the Guarantee Obligations or any Security Interest under any Security Document;

(i)

this clause 34.3,

99 (129)

shall not be made without the prior written consent of all the Lenders.

The Borrowers shall (for their own cost) have the right, in the absence of a Default or Event of Default to replace any Lender that refuses to consent to certain amendments or waivers of this Agreement which expressly require the consent of such Lender and which have been approved by the Required Lenders, with a New Lender (as defined in clause 26.2 ( Assignments and transfers by the Lenders ).

If any Lender fails to respond to a request for a consent, waiver, amendment of or in relation to any of the terms of any Finance Document (other than an amendment or waiver referred to in paragraphs (a) and (i) above) or other vote of Lenders under the terms of this Agreement within fifteen (15) Business Days (unless the Parent and the Agent agree to a longer time period in relation to any request) of that request being made, its Commitment and/or participation shall not be included for the purpose of calculating the Total Commitments or participations under the relevant Facility when ascertaining whether any relevant percentage (including, for the avoidance of doubt, unanimity) of Total Commitments and/or participations has been obtained to approve that request.

An amendment or waiver which relates to the rights or obligations of the Agent or the Security Agent may not be effected without the written consent of the Agent or the Security Agent, as the case may be.

34.4

Disclosure of information and confidentiality

Each of the Finance Parties may disclose to each other or to their professional advisers any kind of information which the Finance Parties have acquired under or in connection with any Finance Document. The Parties are obliged to keep confidential all information in respect of the terms and conditions of this Agreement. This confidentiality obligation shall not apply to any information which:

(a)

is publicised by a Party as required by applicable laws and regulations;

(b)

has entered the public domain or is publicly known, provided that such information is not made publicly known by the receiving Party of such information;

(c)

was or becomes, as the Party is able to demonstrate by supporting documents, available to such Party on a non-confidential basis prior to the disclosure thereof; or

(d)

in the case of the Security Agent, is disclosed to agents, delegates and other appointees in the course of the performance of its functions under the Finance Documents.

100 (129)

34.5

Process Agent

Each Obligor hereby irrevocably appoints Frontline Corporate Services Ltd. as its agent for the service of process and/or any other writ, notice, order or judgment in respect of this Agreement and/or the matters arising herefrom.

34.6

Conflict

In case of conflict between the Security Documents and this Agreement, the provisions of this Agreement shall prevail, provided however that this will not in any way be interpreted or applied to prejudice the legality, validity or enforceability of any Security Document.

34.7

Counterparts

Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.

35.

GOVERNING LAW AND ENFORCEMENT

This Agreement and any non-contractual obligations connected with it are governed by English law.

36.

ENFORCEMENT

36.1

Jurisdiction of English courts

(a)

The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement or any non-contractual obligations connected with it (including a dispute regarding the existence, validity or termination of this Agreement) (a Dispute ).

(b)

The Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.

(c)

This clause 36 is for the benefit of the Finance Parties only. As a result, no Finance Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Finance Parties may take concurrent proceedings in any number of jurisdictions.

36.2

Service of process

Without prejudice to any other mode of service allowed under any relevant law, each Obligor which is a Party:

(a)

irrevocably appoints the person named in 34.5 ( Process Agent ) as that Obligor’s English process agent as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document;

(b)

agrees that failure by a process agent to notify the relevant Obligor of the process will not invalidate the proceedings concerned; and

(c)

if any person appointed as process agent for an Obligor is unable for any reason to act as agent for service of process, that Obligor must immediately (and in any event within ten days of such event taking place) appoint another agent on terms acceptable to the Agent. Failing this, the Agent may appoint another agent for this purpose.

101 (129)

This Agreement has been entered into on the date stated at the beginning of this Agreement.

* * *

102 (129)

SIGNATORIES:


The Borrowers:

Seadrill Limited

By:		/s/ Rune Magnus Lundetræ

Name:		Rune Magnus Lundetæ

Title:		Attorney-in-fact

The Guarantors:

Seadrill T-15 Ltd.

By:		/s/ Rune Magnus Lundetræ

Name:		Rune Magnus Lundetæ

Title:		Attorney-in-fact

Seadrill T-16 Ltd.

By:		/s/ Rune Magnus Lundetræ

Name:		Rune Magnus Lundetæ

Title:		Attorney-in-fact

Seadrill Telesto Ltd.

By:		/s/ Rune Magnus Lundetræ

Name:		Rune Magnus Lundetæ

Title:		Attorney-in-fact

Seadrill Oberon Ltd.

By:		/s/ Rune Magnus Lundetræ

Name:		Rune Magnus Lundetæ

Title:		Attorney-in-fact

103 (129)


Seadrill International Limited

By:		/s/ Rune Magnus Lundetræ

Name:		Rune Magnus Lundetæ

Title:		Director

Seadrill GCC Operations Ltd.

By:		/s/ Rune Magnus Lundetræ

Name:		Rune Magnus Lundetæ

Title:		Attorney-in-fact

Seadrill UK Ltd.

By:		/s/ Rune Magnus Lundetræ

Name:		Rune Magnus Lundetæ

Title:		Attorney-in-fact

The Finance Parties:

As Lender, Mandated Lead Arranger and Bookrunner:

Citibank N.A., London Branch

By:		/s/ Guido Musso

Name:		Guido Musso

Title:

The Export-Import Bank of China

By:		/s/

Name:

Title:

104 (129)


As Agent

Citibank International Plc

By:		/s/ Ekuoa Kagni

Name:		Ekuoa Kagni

Title:		Vice President

As Security Agent

Citibank, N.A., London Branch

By:		/s/ Peter Larsen

Name:		Peter Larsen

Title:		Vice President

As Account Bank

Citibank, N.A., London Branch

By:		/s/ Peter Larsen

Name:		Peter Larsen

Title:		Vice President

105 (129)

SCHEDULE 1

L ENDERS AND C OMMITMENTS


Lenders:	Contact details:	Commitments in USD
The Export-Import Bank of China as Lender, Mandated Lead Arranger and Bookrunner	No. 30 Fuxingmen Nei Street Xicheng District Beijing P.R. China Attn: Mr. Li Lingkai/Mr. Wu Hongliang Fax: +86 10 8357 8428/29		CEXIM Facility: Commitment:	308,000,000 308,000,000
Citibank N.A., London Branch as Lender, Mandated Lead Arranger and Bookrunner	Citibank N.A. London c/o Citibank International Plc Poland Branch Loans Operations Department 8 Chalubinskiego Str. 8th Floor, Warsaw 00-613 Poland Attn: Anzhela Halayko Fax: +44-20-7942 7512		Commercial Facility: Commitment:	132,000,000 132,000,000


			Total Commitments:	USD 440,000,000

AGGREGATE FACILITY ALLOCATION (IN USD):


CEXIM Facility	Commercial Facility		Total Commitment
308,000,000		132,000,000		440,000,000

106 (129)

SCHEDULE 2

B ORROWERS , G UARANTORS AND C OLLATERAL R IGS

Rig:

Average FMV:

Rig Owners and
Guarantors:

Intra Group
Charterers and
Guarantors

Charter Contract:

Duration of
Charter Contract:

Charter Rate

(per day):

Yard:

Rig 1 (t.b.n “T-15”)

MUSD 127,500,000

Seadrill T-15 Ltd., Bermuda

Seadrill UK Ltd., England and Seadrill International Limited, Hong Kong

Chevron Thailand
Exploration &
Production

5 years

Minimum 115,000

Cosco Nantong

Rig 2 (t.b.n “T-16”)

MUSD 127,500,000

Seadrill T-16 Ltd., Bermuda

Seadrill UK Ltd., England and Seadrill International Limited, Hong Kong

Chevron Thailand
Exploration &
Production

5 years

Minimum 115,499

Cosco Nantong

Rig 3 (t.b.n “WEST TELESTO”)

MUSD 222,500,000

Seadrill Telesto Ltd., Bermuda

Seadrill GCC Operations Ltd

Saudi Arabian
Oil Company

3 years

Minimum 185,000

Dalian

Rig 4 (t.b.n “WEST OBERON”)

MUSD 220,000,000

Seadrill Oberon Ltd., Bermuda

N/A

Premier Oil
Vietnam
Offshore B.V.

3 wells + 3 wells (optional)

Estimated duration for the 3 wells is 4 months + 4 months

Minimum 165,651

Dalian

Note:

Charter Contract for Rig 1 and Rig 2 will be novated from Seadrill Asia Limited to Seadrill International Limited, whose Thai branch (of said company) shall perform the obligations under each such Charter Contract.

108 (129)

SCHEDULE 3

C ONDITIONS P RECEDENT

Part I

(Conditions Precedent to the First Utilisation Date)

1	CORPORATE AUTHORISATION

1.1

In respect of each Obligor:

(a)

Company certificate (or similar);

(b)

Articles of Association, Memorandum of Incorporation and By-laws;

(c)

Updated Good Standing Certificate (or similar);

(d)

Resolutions passed at a board meeting of the relevant Obligor:

(i)

evidencing the approval of the terms of, and the transactions contemplated by, the Finance Documents to which it is a party; and

(ii)

evidencing the authorisation of its appropriate officer or officers or other representatives to execute the Finance Documents and any other documents necessary for the transactions contemplated by the Finance Documents, on its behalf; and

(iii)

attaching certified true copies of valid proof of identity and specimen signatures in respect of the persons signing on behalf of the relevant Obligor.

(e)

Power of Attorney (notarised and legalised if requested by the Agent); and

(f)

Directors Certificate, including, but not limited to confirmations on solvency both before and after the incurrence of the indebtedness under the Finance Documents.

2	AUTHORISATIONS

Evidence that all approvals, authorisations and consents required by any government or other authorities for the Obligors and if applicable its subsidiaries to enter into and perform their obligations under any of the Finance Documents shall have been obtained and remain in effect, and all applicable waiting periods shall have expired without any action being taken by any competent authority which, in the opinion of the Agent, restrains, prevents or imposes materially adverse conditions upon the Obligors to enter into and perform their obligations under the Finance Documents.

3	FINANCE DOCUMENTS

Subject to the evidence being delivered pursuant to this Schedule 3 Part I below, each of the Finance Documents, duly signed by all the relevant parties thereto together with evidence that the security created thereunder is legally perfected with first priority in accordance with the terms of each of the Finance Documents and applicable laws including, but not limited to;

(a)

The Agreement;

(b)

The Account Bank Agreement;

(c)

The Share Charges;

(d)

The Fee Letters; and

(e)

Any other Finance Document (excluding Security Documents other than the Share Charges).

4	LEGAL OPINIONS

(a)

Agreed form of legal opinion from Appleby (Bermuda) Limited relating to Bermuda law issues with confirmation that the execution copy will follow as soon as possible thereafter;

(b)

Agreed form of legal opinion from Norton Rose LLP relating to English law issues with confirmation that the execution copy will follow as soon as possible thereafter; and

(c)

Agreed form of legal opinion from Norton Rose Hong Kong relating to Hong Kong law issues with confirmation that the execution copy will follow as soon as possible thereafter; and

(d)

Any such other favourable legal opinions in form and substance satisfactory to the Agent (on behalf of all the Finance Parties) and the Security Agent from lawyers appointed by the Agent on matters concerning all relevant jurisdictions.

All legal opinions to be in form and substance satisfactory to the Agent (on behalf of all the Finance Parties) and the Security Agent.

5	MISCELLANEOUS

(a)

The Utilisation Request at least three (3) Business Days prior to the relevant Utilisation Date;

(b)

Evidence that all fees, costs and expenses referred to in Finance Documents as payable on or prior to the relevant Utilisation Date, have or will be paid on its due date;

(c)

A Compliance Certificate confirming that the Parent is in compliance with the financial covenants as set out in clause 22 ( Financial Covenants );

(d)

An acceptance letter from the Process Agent;

(e)

The Original Financial Statements;

(f)

Cash Flow Projections;

(g)

Evidence of ownership of the Obligors corporate and capital structure of the Group (assuming the assumption of the Facility herein);

(h)

“Know your customer” documents required by the Lenders;

(i)

In respect of each Obligor which is incorporated in Bermuda, a copy of such Obligor’s exemption from imposition of tax until 31 March 2035 issued by the Bermudan Ministry of Finance in favour of such Obligor; and

(j)

Any other documents as reasonably requested by the Agent.

Part II

(Conditions Precedent to any Utilisation (including the first Utilisation))

1	CORPORATE AUTHORISATION

(a)

Any required corporate documents for the relevant Obligors in addition to the ones provided pursuant to Part I of this Schedule 3 ( Corporate authorisations ).

(b)

Evidence that all approvals, authorisations and consents required by any government or other authorities for the relevant Obligors and if applicable its or their subsidiaries to enter into and perform its obligations under any of the Finance Documents shall have been obtained and remain in effect, and all applicable waiting periods shall have expired without any action being taken by any competent authority which, in the opinion of the Agent, restrains, prevents or imposes materially adverse conditions upon the relevant Obligors to enter into and perform their obligations under the Finance Documents.

2	RIG DOCUMENTS

(a)

Bill of sale;

(b)

Builders certificate;

(c)

Protocol of delivery and acceptance;

(d)

Satisfactory searches in maritime registries, including, but not limited to evidence (by way of transcript of registry) that the relevant Rig is registered in the name the relevant Rig Owner in the relevant Ship Registry, that the Mortgage has been, or will be, executed and recorded with its intended first priority against the relevant Rig and that no other encumbrances, maritime liens, mortgages or debts whatsoever are registered against that Rig;

(e)

(i)

Copies of the bareboat charter between the relevant Rig Owner and the Intra-Group Charterer and copies of the bareboat charters between the Intra-Group Charterers (if applicable);

(ii)

A copy of a summary of the Charter Contracts prepared by Advokatfirmaet BA-HR DA,

(iii)

Evidence that the relevant Charter Contract as specified in Schedule 2 ( Borrowers, Guarantors And Collateral Rigs ) as at the date of this Agreement is in full force and effect;

(iv)

In respect of the Rig Advance relating to Rig 1 and Rig 2, evidence from Seadrill International Limited, Seadrill Asia Limited and Chevron Thailand Exploration & Production that the relevant Charter Contract in respect of such Rig has been novated from Seadrill Asia Limited to Seadrill International Limited;

(v)

Evidence that each counterparty to the relevant Charter Contract has consented to the assignment of the Earnings thereunder;

(vi)

Copies of other charter agreements (including novation agreements, if any) for the relevant Rig and service contracts relating thereto and all kind of guarantees related to such Charter Contracts, service contracts or other agreements;

(vii)

Evidence that, where required under any employment contract for the relevant Rig, the charterer of the relevant Rig has accepted that it becomes subject to the relevant Mortgage and that such bareboat charter and Charter Contracts are free from Security Interests.

(f)

An updated class certificate related to the relevant Rig from the relevant classification society, confirming that the relevant Rig is classed with the highest class in accordance with clause 24.6 ( Trading, classification and repairs ), free of extensions and overdue recommendations;

(g)

Certificates from insurers and/or insurance brokers confirming compliance with the insurance requirements under this Agreement, including, but not limited to copies of insurance policies/cover notes documenting that insurance cover has been taken out in respect of the relevant Rig in accordance with clause 24.3 ( Insurance ), and evidencing that the Security Agent’s (on behalf of the Finance Parties) Security Interest in the insurance policies have been noted in accordance with the relevant notices as required under the relevant General Assignment and that the Security Agent is loss payee in accordance with the relevant General Assignment;

(h)

Evidence and copies of (i) the technical management agreement for the relevant Rig and (ii) documents of compliance with the ISM Code and ISPS Code (where applicable); and

(i)

Valuation certificates from two Approved Brokers evidencing the Market Value of the relevant Rig is no less than 125% of the relevant Rig Advance (and that the provisions of clause 24.1 ( Minimum Market Value ) are satisfied), addressed to the Agent and dated no earlier than 15 days prior to the relevant Utilisation Date;

(j)

Evidence that all costs have been paid to the relevant Yard and other equipment providers by the Borrowers by using its own equity in addition to the relevant Rig Advance; and

(k)

If the date for delivery set out in the relevant building contract with the Yard has expired/passed, evidence that such delivery date has been extended to cover actual delivery of the relevant Rig.

3	FINANCE DOCUMENTS

(a)

The Mortgage over the relevant Rig, duly executed and registered with first priority;

(b)

Each General Assignment relating to the relevant Rig;

(c)

The Account Security for Earnings Accounts relating to the relevant Rig.

4	LEGAL OPINIONS

(a)

Agreed form of legal opinion from Appleby (Bermuda) Limited relating to Bermuda law issues with confirmation that the execution copy will follow as soon as possible thereafter;

(b)

Agreed form of legal opinion from Arias Fabrega & Fabrega relating to Panama law with confirmation that the execution copy will follow as soon as possible thereafter;

(c)

Agreed form of legal opinion from Norton Rose LLP relating to English law issues with confirmation that the execution copy will follow as soon as possible thereafter;

(d)

Agreed form of legal opinion from Norton Rose Hong Kong relating to Hong Kong law issues with confirmation that the execution copy will follow as soon as possible thereafter; and

(e)

Any such favourable legal opinions in form and substance satisfactory to the Agent (on behalf of all the Finance Parties) and the Security Agent from lawyers appointed by the Agent on matters concerning all relevant jurisdictions.

All legal opinions to be in form and substance satisfactory to the Agent (on behalf of all the Finance Parties) and the Security Agent.

5	MISCELLANEOUS

(a)

The Utilisation Request at least three (3) Business Days prior to the relevant Utilisation Date;

(b)

Evidence that all fees, costs and expenses referred to in Finance Documents as payable on or prior to the relevant Utilisation Date, have or will be paid on its due date;

(c)

A Compliance Certificate confirming that the Parent is in compliance with the financial covenants as set out in clause 22 ( Financial Covenants );

(d)

Insurance Report; and

(e)

any other document as reasonably requested by the Agent.

Part III

(Conditions Subsequent to each Utilisation Date)

1	CHARTER CONTRACTS

(a)

As soon as possible, and in any case within three months after the relevant Utilisation Date evidence that any and all payments of the Earnings relating to the relevant Rig (including by end-users) are instructed to be paid to the relevant Earnings Accounts;

(b)

Within five months after the relevant Utilisation Date, evidence that such payments mentioned in (a) above have been initiated.

SCHEDULE 4

F ORM OF U TILISATION R EQUEST

Loans


To:		Citibank International plc, as Agent

From:		[ Insert name of the Borrowers ]

Date:		[ ]

SEADRILL LIMITED – USD 440,000,000 SECURED CREDIT FACILITY AGREEMENT DATED [ — ] 2012 (THE “AGREEMENT”)

We refer to clause 5.1 ( Delivery of a Utilisation Request ) of the Agreement. Terms defined in the Agreement shall have the same meaning when used in this Utilisation Request.


(a)	You are hereby irrevocably notified that we wish to make the following drawdown of the CEXIM Facility and the Commercial Facility:

(b)	Proposed Utilisation Date:	[ ]

	Principal Amount:	[ ] (CEXIM Facility)

		[ ] (Commercial Facility)

	Interest Period:	[ ]

	Rig:	[ ]

(c)	The proceeds of the Utilisation shall be credited to [ — ] [insert name and number of account].

(d)	We confirm that, as of the date hereof (i) each condition specified in clause 4 ( Conditions Precedent ) of the Agreement is satisfied; (ii) each of the representations and warranties set out in clause 20 ( Representations and warranties ) of the Agreement is true and correct; and (iii) no event or circumstances has occurred and is continuing which constitute or may constitute a Default or an Event of Default.


Yours sincerely

for and on behalf of

[ *Insert name of the Borrowers* ]

By:

Name:

Title:		[authorised officer of each of the Borrowers]

SCHEDULE 5

F ORM OF C OMPLIANCE C ERTIFICATE


To:		Citibank International plc, as Agent

From:		Seadrill Limited

Date:		[ — ] [To be delivered no later than hundred and eighty (180)/seventy (70) days after each reporting date]

SEADRILL LIMITED – USD 440,000,000 SECURED CREDIT FACILITY AGREEMENT DATED [ — ] 2012 (THE “AGREEMENT”)

We refer to the Agreement. Terms defined in the Agreement shall have the same meaning when used in this Compliance Certificate.

We confirm that as at [ — ] [insert relevant reporting date]:

1.1

Minimum Liquidity

The Minimum Liquidity of the Group was [ ] while the Minimum Liquidity required is USD [ — ].

1.2

Leverage Ratio

The Leverage Ratio of the Group was [ ] while the Leverage Ratio is required not to exceed [ — ].

1.3

Equity Ratio

The Equity Ratio of the Group was [ ] while the minimum Equity Ratio shall be greater than [ — ].

1.4

Interest Cover Ratio

The Interest Cover Ratio of the Group was [ ] while the Interest Cover Ratio shall be [ — ].

1.5

Current Ratio

The Current Ratio of the Group was [ ] while the Current Ratio shall be minimum [ — ].

1.6

Market Value

The Market Value of each of the Rigs, and the Rigs in aggregate is attached as Appendix 1 hereto while the minimum Market Value shall be higher than [ — ] of the sum of the Loans outstanding and the Lenders’ Available Commitments.

1.7

Insurance

We confirm that each of the Rigs is insured against such risks and in such amounts as set out in Appendix 2 hereto.

1.8

Fleet Report

We confirm that each of the Rigs is employed in accordance with Appendix 3 hereto.

1.9

No Default

We confirm that, as of the date hereof (i) each of the representations and warranties set out in clause 20 ( Representations and warranties ) of the Agreement is true and correct, and (ii) no event or circumstances has occurred and is continuing which constitute or may constitute a Default and/or an Event of Default.


Yours sincerely for and on behalf of Seadrill Limited

By:

Name:

Title:		[authorised officer]

Appendix 1

[ — ]

Appendix 2


Rig	Hull & Machinery	Freight Interest	Hull Interest	P&I	War Risk
	Insurer: Amount:	Insurer: Amount:	Insurer: Amount:	Insurer: Amount:	Insurer: Amount:

Appendix 3

[ — ]

SCHEDULE 6

F ORM OF T RANSFER C ERTIFICATE


To:		Citibank International plc, as Agent

From:		[ — ] (the “Existing Lender” and [ — ] (the “New Lender”)

Date:		[ — ]

SEADRILL LIMITED – USD 440,000,000 SENIOR SECURED CREDIT FACILITY AGREEMENT DATED [ — ] 2012 (THE “AGREEMENT”)

1	We refer to the Agreement. This is a Transfer Certificate. Terms defined in the Agreement have the same meaning in this Transfer Certificate unless given a different meaning in this Transfer Certificate.

2	We refer to clause 26.4 ( Conditions of assignment ):

(a)

The Existing Lender assigns absolutely to the New Lender all the rights of the Existing Lender under the Agreement and the other Finance Documents which relate to that portion of the Existing Lender’s Commitment(s) and participations in the Loan under the Agreement as specified in the Schedule.

(b)

The Existing Lender is released from all the obligations of the Existing Lender which correspond to that portion of the Existing Lender’s Commitment(s) and participations in the Loan under the Agreement specified in the Schedule.

(c)

The New Lender becomes a Party as a Lender and is bound by obligations equivalent to those from which the Existing Lender is released under paragraph (b) above.

(d)

The proposed Transfer Date is [ — ].

(e)

The Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of clause 32.2 ( Addresses ) are set out in the Schedule.

3	The New Lender expressly acknowledges the limitations on the Existing Lender’s obligations set out in sub-clause 26.5(c) of clause 26.5 ( Limitation of responsibility of Existing Lenders ).

4	This Transfer Certificate may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Transfer Certificate.

5	This Transfer Certificate and any non-contractual obligations connected with it are governed by English law.

6	This Transfer Certificate has been entered into on the date stated at the beginning of this Transfer Certificate.

Note: The execution of this Transfer Certificate may not assign a proportionate share of the Existing Lender’s interest in the Security Documents in all jurisdictions. It is the responsibility of the New Lender to ascertain whether any other documents or other formalities are required to perfect an assignment of such a share in the Security Documents in any jurisdiction and, if so, to arrange for execution of those documents and completion of those formalities.

The Schedule

Rights to be assigned and obligations to be released and undertaken


I	Existing Lender:	[ ]

II	New Lender:	[ ]

III	Total Commitments of Existing Lender :		USD [ ]

IV	Aggregate amount transferred:		USD [ ]

V	Total Commitments of New Lender:		USD [ ]

VI	Transfer Date: [ ]

Administrative Details / Payment Instructions of New Lender


Notices to New Lender:



[ ]

[ ]

Att:		[ ]

Telefax no:		+ [ ]

[ Insert relevant office address, telefax number and attention details for notices and payments to the New Lender .]

Account details of New Lender: [Insert relevant account details of the New Lender.]


[ Existing Lender ]				[ New Lender ]
By:				By:

This is accepted by the Agent as a Transfer Certificate and the Transfer Date is confirmed as [ ].

Signature of this Transfer Certificate by the Agent constitutes confirmation by the Agent of receipt of notice of the assignment referred to herein, which notice the Agent receives on behalf of each Finance Party.


Citibank International plc

By:
Name:
Title:

SCHEDULE 7

I NDICATIVE R EPAYMENTS /R EDUCTIONS


	Rig 1				Rig 2				Rig 3				Rig 4
Repayments	Instalments		Principal Outstanding		Instalments		Principal Outstanding		Instalments		Principal Outstanding		Instalments		Principal Outstanding
Rig Advance at Utilisation Date				100,500,000				98,000,000				121,000,000				120,500,000
1		5,025,000		95,475,000		4,900,000		93,100,000		7,117,647		113,882,353		7,088,235		113,411,765
2		5,025,000		90,450,000		4,900,000		88,200,000		7,117,647		106,764,706		7,088,235		106,323,529
3		5,025,000		85,425,000		4,900,000		83,300,000		7,117,647		99,647,059		7,088,235		99,235,294
4		5,025,000		80,400,000		4,900,000		78,400,000		7,117,647		92,529,412		7,088,235		92,147,059
5		5,025,000		75,375,000		4,900,000		73,500,000		7,117,647		85,411,765		7,088,235		85,058,824
6		5,025,000		70,350,000		4,900,000		68,600,000		7,117,647		78,294,118		7,088,235		77,970,588
7		5,025,000		65,325,000		4,900,000		63,700,000		7,117,647		71,176,471		7,088,235		70,882,353
8		5,025,000		60,300,000		4,900,000		58,800,000		7,117,647		64,058,824		7,088,235		63,794,118
9		5,025,000		55,275,000		4,900,000		53,900,000		7,117,647		56,941,176		7,088,235		56,705,882
10		55,275,000		0		53,900,000		0		56,941,176		0		56,705,882		0

SCHEDULE 8

C ORPORATE S TRUCTURE

LOGO

SCHEDULE 9

M ANDATORY C OST F ORMULA

The Mandatory Cost is an addition to the interest rate to compensate Lenders for the cost of compliance with (a) the requirements of the Bank of England and/or the relevant Financial Services Authority (or, in either case, any other authority which replaces all or any of its functions) or (b) the requirements of the European Central Bank.

On the first day of each Interest Period (or as soon as possible thereafter) the Agent shall calculate, as a percentage rate, a rate (the Additional Cost Rate ) for each Lender, in accordance with the paragraphs set out below. The Mandatory Cost will be calculated by the Agent as a weighted average of the Lenders’ Additional Cost Rates (weighted in proportion to the percentage participation of each Lender in the relevant Loan) and will be expressed as a percentage rate per annum.

The Additional Cost Rate for any Lender lending from a facility office in the European Economic Area will be the percentage notified by that Lender to the Agent. This percentage will be certified by that Lender in its notice to the Agent to be its reasonable determination of the cost (expressed as a percentage of that Lender’s participation in all Loans made from that facility office) of complying with the relevant minimum reserve requirements in respect of Loans made from that facility office.

4.	The Additional Cost Rate for any Lender lending from a facility office in the United Kingdom will be calculated by the Agent as follows:


		E x 0.01		per cent. per annum.
		300		per cent. per annum.

Where:

E is designed to compensate Lenders for amounts payable under the Fees Rules and is calculated by the Agent as being the average of the most recent rates of charge supplied by the Reference Banks to the Agent pursuant to paragraph 7 below and expressed in pounds per £1,000,000.

5.	For the purposes of this Schedule:

Eligible Liabilities and Special Deposits have the meanings given to them from time to time under or pursuant to the Bank of England Act 1998 or (as may be appropriate) by the Bank of England;

Fees Rules means the rules on periodic fees contained in the FSA Supervision Manual or such other law or regulation as may be in force from time to time in respect of the payment of fees for the acceptance of deposits;

Fee Tariffs means the fee tariffs specified in the Fees Rules under the activity group A.1 Deposit acceptors (ignoring any minimum fee or zero rated fee required pursuant to the Fees Rules but taking into account any applicable discount rate); and

Tariff Base has the meaning given to it in, and will be calculated in accordance with, the Fees Rules.

If requested by the Agent, each Reference Bank shall, as soon as practicable after publication by the Financial Services Authority, supply to the Agent, the rate of charge payable by that Reference Bank to the Financial Services Authority pursuant to the Fees Rules in respect of the relevant financial year of the Financial Services Authority (calculated for this purpose by that Reference Bank as being the average of the Fee Tariffs applicable to that Reference Bank for that financial year) and expressed in pounds per £1,000,000 of the Tariff Base of that Reference Bank.

7.	Each Lender shall supply any information required by the Agent for the purpose of calculating its Additional Cost Rate. In particular, but without limitation, each Lender shall supply the following information on or prior to the date on which it becomes a Lender:

(a)

the jurisdiction of its facility office; and

(b)

any other information that the Agent may reasonably require for such purpose.

Each Lender shall promptly notify the Agent of any change to the information provided by it pursuant to this paragraph.

The rates of charge of each Reference Bank for the purpose of E above shall be determined by the Agent based upon the information supplied to it pursuant to paragraphs 6 and 7 above and on the assumption that, unless a Lender notifies the Agent to the contrary, each Lender’s obligations in relation to cash ratio deposits and Special Deposits are the same as those of a typical bank from its jurisdiction of incorporation with a facility office in the same jurisdiction as its facility office.

The Agent shall have no liability to any person if such determination results in an Additional Cost Rate which over or under compensates any Lender and shall be entitled to assume that the information provided by any Lender or Reference Bank pursuant to paragraphs 3, 6 and 7 above is true and correct in all respects.

10.	The Agent shall distribute the additional amounts received as a result of the Mandatory Cost to the Lenders on the basis of the Additional Cost Rate for each Lender based on the information provided by each Lender and each Reference Bank pursuant to paragraphs 3, 6 and 7 above.

11.	Any determination by the Agent pursuant to this Schedule in relation to a formula, the Mandatory Cost, an Additional Cost Rate or any amount payable to a Lender shall, in the absence of manifest error, be conclusive and binding on all parties.

12.

The Agent may from time to time, after consultation with the Parent and the Lenders, determine and notify to all parties any amendments which are required to be made to this Schedule in order to comply with any change in law, regulation or any requirements from time to time imposed by the Bank of England, the Financial Services Authority or the European Central Bank (or, in any case, any other authority which replaces all or any of its functions) and any such determination shall, in the absence of manifest error, be conclusive and binding on all Parties.

SCHEDULE 10

F ORM OF S ELECTION N OTICE

Selection Notice

From: [ the Borrowers ]

To: Citibank International Plc

Dated: [ — ]

Dear Sirs

USD440,000,000 Facility Agreement dated [ — ] 2012 (the Agreement)

1	We refer to the Agreement. This is a Selection Notice. Terms defined in the Agreement have the same meaning in this Selection Notice unless given a different meaning in this Selection Notice.

2	We request that the next Interest Period for the Loan be [•] months.

3	This Selection Notice is irrevocable.

Yours sincerely

for and on behalf of

Seadrill T-15 Ltd., Seadrill T-16 Ltd., Seadrill Telesto Ltd. and Seadrill Oberon Ltd.


By:

Name:

Title:		[authorised officer of each of the Borrowers]

Exhibit 10.3

Execution Version

LOAN AGREEMENT

This loan agreement (the “ Agreement ”) is entered into on this 16th day of May, 2013 by and between:-

(1)	SEADRILL LIMITED of Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton HMGX, Bermuda (the “ Lender ”);

(2)	SEADRILL T-15 LTD. of Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton HMGX, Bermuda (the “ Borrower ”);

(3)	SEADRILL PARTNERS OPERATING LLC of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 (“ OPCO ”); and

(4)	SEADRILL INTERNATIONAL LIMITED of 16 ^th -19 ^th Floors, Prince’s Building, 10 Chater Road, Central Hong Kong, Hong Kong (“ Seadrill International ”);

(hereinafter collectively referred to as the “ Parties ” and, individually, as a “ Party ”).

BACKGROUND:

(A)	The Lender is, as of the date hereof, the owner of all of the shares in the Borrower.

(B)	The Borrower is the owner of the tender rig named “T-15” (the “ Rig ”).

(C)

The Rig is financed under a USD 440,000,000 Secured Credit Facility dated 4 December 2012 (the “ Loan Agreement ”) made between (1) the Lender, as borrower, (2) the Borrower, Seadrill International and the other the rig owners and intra group charterers set out at Schedule 2 thereto, as joint and several guarantors, (3) the banks and financial institutions set out at Schedule 1 thereto, together with their assignees and transferees (the “ Banks ”), (4) Citibank International Plc, as agent (the “ Agent ”), (5) Citibank, N.A., London Branch, as security agent, account bank, mandated lead arranger and bookrunner (the “ Security Agent ”) and (6) The Export-Import Bank of China, as mandated lead arranger and bookrunner.

(D)

The Borrower has, as per Clause 18 of the Loan Agreement, guaranteed (the “ Guarantee ”) the obligations of the Obligors (as defined in the Loan Agreement) under the Finance Documents (as defined in the Loan Agreement, hereinafter the “ Finance Documents ”) (the “ Secured Obligations ”).

(E)	The Borrower has further provided security for the Secured Obligations by way of (i) a first priority mortgage over the Rig, (ii) a first priority assignment of its earnings and insurances and (iii) a first priority assignment of its earnings account (collectively, the “ Security Documents ”).

(F)

Seadrill International is “Intra-Group Charterer” under the Loan Agreement and has guaranteed the Secured Obligations as per Clause 18 of the Loan Agreement (the “ Intra-Group Charterer’s Guarantee ”) and provided security for the Secured Obligations by way of (i) a first priority assignment of its earnings, insurances and the relevant intra-group charter, and (ii) a first priority assignment of its earnings account (collectively, the “ Intra-Group Charterer’s Security Documents ”).

(G)	OPCO is a wholly owned subsidiary of Seadrill Partners LLC.

Execution Version

(H)	The Lender is in the process of transferring its shares in the Borrower and Seadrill International (the “ Shares ”) to OPCO (the “ Restructuring ”) pursuant to the terms of a sale and purchase agreement (the “ SPA ”) between the Lender and OPCO.

(I)	Pursuant to the terms of the SPA, the Lender will sell the Shares to OPCO in exchange for the assumption by OPCO of a payment obligation towards Seadrill in the amount of USD 109,500,000 (the “ OPCO Loan ”).

(J)

The Lender has, as per the terms of the Loan Agreement, requested the consent of the Banks to the Restructuring and, in so doing, also requested that the terms of the Finance Documents are amended and supplemented to reflect the revised ownership structure of the Borrower and Seadrill International, such amendments being set out in a side letter to the Loan Agreement (the “ Side Letter ”).

(K)	Pursuant to the terms of the Side Letter, OPCO shall execute in favour of the Security Agent replacement share charge in substantially the same form as the share charge previously executed by the Lender in respect of the shares in the Borrower (the “ New Share Charge ”).

(L)	References in this Agreement to the Loan Agreement, the Security Documents and/or the Finance Documents shall, unless otherwise specified, be to the Loan Agreement, the Security Documents and/or the Finance Documents as amended by the Side Letter and as subsequently amended from time to time.

(M)	The amount currently drawn by the Lender under the Loan Agreement, USD 100,500,000, has in its entirety been applied to finance the Rig (the “ T-15 Principal ”)

(N)	The T-15 Principal is outstanding to the Borrower as a shareholder loan (the “ Shareholder Loan ”).

NOW THEREFORE , it is hereby agreed as follows:-

1.	THE LOAN

1.1

The Lender hereby confirms that the Shareholder Loan shall be outstanding as a long term shareholder loan to the Borrower on the terms set forth herein (the outstanding principal amount of which at any time shall be referred to as the “ Loan ” in the following).

1. 2	The Parties agree that the Loan shall be considered as disbursed on December 19, 2012 (the “ Loan Disbursement Date ”).

2.	THE CONSIDERATION

2.1

The Borrower agrees, as consideration for the Loan, to:

(i)

continue to provide the Guarantee as security for the Secured Obligations on the terms set forth in Clause 3 below;

(ii)

continue to provide the security set forth in the Security Documents for the Secured Obligations on the terms set forth in Clause 4 below; and

(iii)

compensate the Lender as per the principles set forth in Clause 5 below.

2.2

Further, the Borrower agrees to become party to such further amendments to the Loan Agreement and the Security Documents as shall be required by the Lender to document the terms which shall apply to the amount outstanding thereunder following the completion of the Restructuring.

Execution Version

3.	THE GUARANTEE

3.1

The Borrower undertakes to continue to provide the Guarantee on the terms currently in effect notwithstanding the completion of the Restructuring.

3.2

The Lender undertakes to procure the release of the Borrower from its obligations under the Guarantee as and when all amounts outstanding under the Finance Documents have been repaid.

4.	THE SECURITY

4.1

The Borrower undertakes to continue to provide the security set forth in the Security Documents on the terms currently in effect notwithstanding the completion of the Restructuring.

4.2

The Lender procures that all of the security provided by the Borrower under the Security Documents or any new security documents to be provided by the Borrower shall be released (and the recordation of the security interest in favour of the Banks terminated) upon the repayment by the Lender of all amounts outstanding under the Finance Documents.

5.	COMPENSATION

5.1

The Borrower shall, with effect from the Loan Disbursement Date, pay interest on the Loan at a rate of LIBOR (for three month interest periods) plus a margin of 3.25% p.a.

Interest accrued shall be payable quarterly in arrears on demand from the Lender. If no demand is received, accrued interest shall be added to the Loan at the relevant interest payment date.

5.2

With effect from the date of transfer of the Rig from the Lender to OPCO (the “ Effective Date ”), the obligation set forth in Clause 5.1 shall be substituted by an obligation to pay, on the due dates for payment therefore set forth in the Loan Agreement, such part of the accrued interest, fees, costs and expenses payable by the Lender pursuant to the Loan Agreement as corresponds to the T-15 Principal.

5.3

All such payments shall be made directly to the Agent (for the account of the Borrower) at such dates and in such form as complies with the terms of the Loan Agreement.

The Lender shall keep the Borrower fully informed of the relevant payment dates and amounts as per the above.

The Borrower shall confirm to the Lender that each payment as aforesaid is made by providing the Lender with a copy of the relevant transfer documentation reflecting the amount paid and the date of payment.

6.	REPAYMENT

6.1

Effective from the Loan Disbursement Date, the Borrower shall repay the Loan plus any accrued interest thereon on demand from the Lender.

Such demand shall be made in writing with no less than 90 days’ notice.

6.2

Effective from the Effective Date, the Borrower’s obligation as per Clause 6.1 shall be suspended and replaced by an obligation to pay such part of the instalments due from the Lender to the Banks under the Loan Agreement as corresponds to the T-15 Principal.

Execution Version

6.3

Such instalments shall be made directly to the Agent (for the account of the Borrower) at such dates and in such form as complies with the provisions of the Loan Agreement.

The Lender shall keep the Borrower advised of each payment date for instalments under the Loan Agreement and the amount due as per the above.

The Borrower shall advise the Lender of all payments made as per the above.

6.4

The Borrower shall, in the event:

(i)

an event of default (howsoever described) occurs under the Loan Agreement and the Agent, on this basis, accelerates the Lender’s payment obligations thereunder; or

(ii)

a mandatory prepayment obligation (as prepayment in part or in full) occurs under the Loan Agreement;

repay the Loan in full by making payment directly to the Agent (for the account of the Lender) in accordance with the provisions set forth in Clause 6.2.

6.5

The Borrower shall, upon 10 days’ written notice, be entitled to prepay the Loan in full, provided that a corresponding amount is due and payable as a voluntary prepayment by the Lender under the Loan Agreement.

Such prepayment shall be made directly to the Agent (for the account of the Lender) in accordance with the provisions set forth in Clause 6.2 above.

6.6

Any release of the Borrower from its obligations under the Guarantee and/or the Security Documents following prepayment as per Clause 6.4 or Clause 6.5 shall be subject to the prior written consent of the Banks to the same being done with such effect.

6.7

Any payments made by the Borrower hereunder to the Lender purporting to reduce the principal amount of the Loan shall, until the Borrower has been released from the Guarantee, not take effect (but be considered a short term, subordinated loan to the Lender) if made in any other manner than described in Clauses 6.2 to 6.5 above.

7.	PAYMENTS

7.1

The Borrower shall make all payments due hereunder to the Lender or, as the case may be, the Banks, free from all deductions, set-off, counterclaim or other deduction whatsoever save as may be required by applicable law.

7.2

If the Borrower is required by law to make such a payment subject to the deduction or withholding of taxes, the sum payable by the Borrower (in respect of which such deduction or withholding is required to be made) shall be increased to the extent necessary to ensure that the Banks and/or the Lender (as the case may be) receives a sum net of any deduction or withholding equal to the sum which it would have received had no such deduction or withholding been made or required to be made.

7.3

The Parties acknowledge that the Lender may decide to meet its obligations under the Loan Agreement by utilising other funds and revenue than such as will be due from the Borrower to the Lender hereunder. The Borrower shall, in such event, be immediately notified thereof, such notice specifying how the Loan (or any part thereof) shall be serviced and repaid in the alternative.

The Borrower acknowledges that such a decision by the Lender will not influence on the Borrower’s obligations under the Guarantee or the Security Documents.

Execution Version

8.	SECURITY

8.1

The obligations of the Borrower hereunder will not be secured by any mortgage, pledge or other security.

9.	STATUS OF THE LOAN

9.1

The Loan shall rank pari passu with all other ordinary debt of the Borrower, but shall be subordinated in all respects to, and rank after, the Borrower’s obligations under the Guarantee and the Security Documents.

10.

DEFAULT

10.1

Each of the events or circumstances set out below constitutes an event of default (“ Event of Default ”):

(i)

the Borrower fails to pay any sum payable under this Agreement when due unless its failure to pay is caused by administrative or technical error and payment is made within three business days of the due date;

(ii)

the Borrower fails to comply with any of its obligations under this Agreement or any Finance Document;

(iii)

the Borrower becomes insolvent, is unable or admits inability to pay its debts as they fall due, suspends making payments on any of its debts or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness; or

(iv)

any corporate action, legal proceedings or other procedure or step is taken in relation to bankruptcy or insolvency proceedings in respect of the Borrower, the winding up or dissolution of the Borrower (save for the purposes of a solvent reorganization), the enforcement of security over any of the Borrower’s assets or any enforcement of any debts of the Borrower.

10.2

On and at any time after the occurrence of an Event of Default the Lender may, by notice to the Borrower:

(i)

declare that the Loan, together with accrued interest, and all other amounts accrued or outstanding under this Agreement to be immediately due and payable, whereupon they shall become immediately due and payable; and/or

(ii)

exercise any or all of its rights, remedies and powers under this Agreement or otherwise.

11.

MISCELLANEOUS

11.1

The Borrower acknowledges that its obligations to the Banks and the Agent under the Guarantee and the Security Documents will remain irrespective of the terms set forth herein and/or the Borrower’s compliance with the same.

11.2

The express provisions in this Agreement shall be without prejudice to any other rights and remedies available to the Lender by law.

11.3

No failure or delay by the Lender in exercising any right under the terms of this Agreement shall act as a waiver hereof.

Execution Version

12.

NEW SHARE CHARGE

12.1

As consideration for Lender agreeing to provide (i) the Loan to the Borrower and (i) the OPCO Loan to OPCO, OPCO agrees to provide the New Share Charge as security for the Secured Obligations.

12.2

The Lender undertakes to procure the release of OPCO from its obligations under the New Share Charge as and when all amounts outstanding under the Finance Documents have been repaid.

13.

INTRA-GROUP CHARTERER’S GUARANTEE AND SECURITY DOCUMENTS

13.1

As consideration for Lender agreeing to provide (i) the Loan to the Borrower and (i) the OPCO Loan to OPCO, Seadrill International agrees, notwithstanding the completion of the Restructuring, to continue to provide the Intra-Group Charterer’s Guarantee and the Intra-Group Charterer’s Security Documents as security for the Secured Obligations.

13.2

The Lender undertakes to procure the release of Seadrill International from its obligations under the Intra-Group Charterer’s Guarantee and the Intra-Group Charterer’s Security Documents as and when all amounts outstanding under the Finance Documents have been repaid.

14.

INDEMNITY

14.1

The Lender undertakes to indemnify and hold harmless each of the Borrower, Seadrill International and OPCO against any liability incurred by them under the Guarantee, the Security Documents or the New Share Charge.

14.2

Subject to Clause 14.3, the Lender shall be entitled to set off any claim (by any of the Borrower, Seadrill International or OPCO) for indemnification pursuant to Clause 14.1 against any claim it may have against either of the Borrower, Seadrill International or OPCO, including but not limited to under this Agreement, the SPA and/or the OPCO Loan.

14.3

Any claims for indemnification pursuant to Clause 14.1 shall rank pari passu with all other ordinary debt of the Lender, but shall be subordinated in all respects to, and rank after, the Lender’s obligations under the Finance Documents.

15.

GOVERNING LAW

15.1

This Agreement shall be governed by and construed in accordance with Norwegian law.

15.2

The Parties submit to the non-exclusive jurisdiction of the courts of Oslo, Norway in respect of any dispute arising out of this Agreement.

For and on behalf of

SEADRILL LIMITED

For and on behalf of

SEADRILL T -15 LTD.

Signature:

/s/ Fredrik Halvorsen

Signature:

/s/ Rune Magnus Lundetræ

Name in block letters: Fredrik Halvorsen

Name in block letters: Rune Magnus Lundetræ

Title:

CEO

Title:

Authorized Representative

Execution Version


For and on behalf of SEADRILL PARTNERS OPERATING LLC		For and on behalf of SEADRILL INTERNATIONAL LIMITED

Signature:	/s/ Rune Magnus Lundetræ	Signature:	/s/ Rune Magnus Lundetræ

Name in block letters: Rune Magnus Lundetræ		Name in block letters: Rune Magnus Lundetræ
Title:	Authorized Representative	Title:	Authorized Representative

Exhibit 10.4

Execution Version

INTERCOMPANY LOAN AGREEMENT

dated as of May 16, 2013

between

Seadrill Partners Operating LLC

as Borrower

and

Seadrill Limited

as Lender

TABLE OF CONTENTS


ARTICLE I:	DEFINITIONS; CONSTRUCTION	3

Section 1.1	Definitions	3

Section 1.2	Other Definitional Provisions	7

Section 1.3	Accounting Terms and Principles	7

ARTICLE II:	AMOUNT AND TERMS OF THE LOAN	7

Section 2.1	Loan	7

Section 2.2	Repayment of the Loan	7

Section 2.3	Prepayment	8

Section 2.4	Interest	8

Section 2.5	Computation of Interest	8

Section 2.6	Evidence of Debt	8

Section 2.7	Payments Generally	8

Section 2.8	Taxes	8

Section 2.9	Illegality	9

ARTICLE III:	CONDITIONS PRECEDENT TO THE LOAN	9

Section 3.1	Conditions to Effectiveness	9

Section 3.2	Conditions to Making of the Loan	9

ARTICLE IV:	REPRESENTATIONS AND WARRANTIES	10

Section 4.1	Corporate Existence; Compliance with Law	10

Section 4.2	Power; Authorization; Enforceable Obligations	10

Section 4.3	No Legal Bar	10

Section 4.4	No Material Litigation	11

Section 4.5	No Default	11

ARTICLE V:	COVENANTS	11

Section 5.1	Delivery of Financial Information	11

Section 5.2	Notice of Default	11

Section 5.3	Conduct of Business and Maintenance of Existence, etc.	11

ARTICLE VI:	EVENTS OF DEFAULT	11

Section 6.1	Events of Default	11



ARTICLE VII:	MISCELLANEOUS	13

Section 7.1	Notices	13

Section 7.2	Waiver; Amendments	14

Section 7.3	Expenses; Indemnification	14

Section 7.4	Successors and Assigns	15

Section 7.5	Governing Law	15

Section 7.6	Counterparts; Integration	15

Section 7.7	Survival	15

Section 7.8	Severability	15

INTERCOMPANY LOAN AGREEMENT

THIS INTERCOMPANY LOAN AGREEMENT (this “ Agreement ”) is made and entered into as of May 14, 2013 by and among Seadrill Limited, a Bermuda company (the “ Lender ”) and Seadrill Partners Operating LLC, a Marshall Islands limited liability company (the “ Borrower ”).

W I T N E S S E T H:

WHEREAS , the Lender and the Borrower have entered into a Purchase and Sale Agreement ( the “ Purchase and Sale Agreement ”) relating to the purchase of all of the equity interests in Seadrill International Ltd., a Hong Kong Company, and Seadrill T-15 Ltd, a Bermuda company; and

WHEREAS , the Purchase and Sale Agreement provides that the purchase price thereunder shall be funded by means of a loan from the Lender to the Borrower; and

WHEREAS , subject to the terms and conditions of this Agreement, the Lender is willing to make the loan to the Borrower as contemplated in the Purchase and Sale Agreement;

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

ARTICLE I

DEFINITIONS; CONSTRUCTION

Section 1.1 Definitions . The following terms used herein shall have the meanings herein specified (to be equally applicable to both the singular and plural forms of the terms defined):

“ Agreement ” shall have the meaning assigned to such term in the opening paragraph of this Agreement.

“ Applicable Margin ” shall mean 5% per annum.

“ Borrower Affiliate ” shall mean the Borrower and each Subsidiary thereof.

“ Borrower ” shall have the meaning assigned to such term in the opening paragraph of this Agreement.

“ Business Day ” shall mean a day other than a Saturday, Sunday or other day on which commercial banks in London are authorized or required by law to close.

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

“ Closing Date ” shall have the meaning assigned to such term in Section 3.1 .

“ Code ” shall mean the United States Internal Revenue Code of 1986, as amended from time to time.

“ Default ” means any of the events specified in Article VI , whether or not any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

“ Default Interest ” shall have the meaning set forth in Section 2.4(c) .

“ Default Interest Rate ” shall mean the Loan Interest Rate, plus an additional 2% per annum.

“ Dollars ” and “ $ ” shall mean the lawful currency of the United States of America.

“ Event of Default ” shall mean any of the events specified in Article VI , provided that any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

“ Excluded Taxes ” shall mean, with respect to the Lender, taxes imposed on or measured by its overall net income, franchise taxes, and any branch profits or similar tax imposed on it by any jurisdiction.

“ GAAP ” shall mean United States generally accepted accounting principles applied on a consistent basis.

“ Governmental Authority ” shall mean any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

“ Guarantee Obligation ” shall mean as to any Person (the “ guaranteeing person ”), any obligation of (a) the guaranteeing person or (b) another Person (including, without limitation, any bank under any letter of credit), if to induce the creation of such obligation of such other Person the guaranteeing person has issued a reimbursement, counterindemnity or similar obligation, in either case guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or other obligations (the “ primary obligations ”) of any other third Person (the “ primary obligor ”) in any manner, whether directly or indirectly; provided, however , that the term Guarantee Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall be such guaranteeing person’s maximum reasonably anticipated liability in respect thereof as determined by the Borrower in good faith.

“ Hedge Agreements ” shall mean all interest rate or currency swaps, caps or collar agreements, foreign exchange agreements, commodity contracts or similar arrangements entered into by the Borrower or its Subsidiaries providing for protection against fluctuations in interest rates, currency exchange rates, commodity prices or the exchange of nominal interest obligations, either generally or under specific contingencies.

“ Indebtedness ” shall mean of any Person at any date, without duplication, (a) all indebtedness of such Person for borrowed money, (b) all obligations of such Person for the deferred purchase price of Property or services (other than trade payables incurred in the ordinary course of such Person’s business), (c) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property or assets acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property or assets), (e) all Capital Lease Obligations of such Person, (f) all obligations of such Person, contingent or otherwise, as an account party or applicant under acceptance, letter of credit or similar facilities, (g) all obligations of such Person, contingent or otherwise, to purchase, redeem, retire or otherwise acquire for value any equity interests of such Person, (h) all Guarantee Obligations of such Person in respect of obligations of the kind referred to in clauses (a) through (g) above; (i) all obligations of the kind referred to in clauses (a) through (h) above secured by (or for which the holder of such obligation has an existing right, contingent or otherwise, to be secured by) any Lien on property (including, without limitation, accounts and contract rights) owned by such Person, whether or not such Person has assumed or become liable for the payment of such obligation and (j) all obligations of such Person in respect of Hedge Agreements.

“ Interest Period ” shall mean, with respect to the Loan, (a) initially, the period commencing on the Closing Date and ending three months thereafter; and (b) thereafter, each period commencing on the last day of the immediately preceding Interest Period and ending three months thereafter; provided that, all of the foregoing provisions relating to Interest Periods are subject to the following: (i) if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day; (ii) any Interest Period that would otherwise extend beyond the date final payment is due on the Loan, shall end on such due date, as applicable; and (iii) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period.

“ Lender ” shall have the meaning assigned to such term in the opening paragraph of this Agreement.

“ Lender Indemnitee ” shall mean Lender and each of the directors, officers, employees, agents, trustees, representatives, attorneys, consultants and advisors of or to Lender.

“ LIBOR ” shall mean, with respect to the Loan, the three (3) month LIBOR rate published in the Wall Street Journal two (2) Business Days before, as applicable, the initial or each subsequent Interest Period.

“ Lien ” shall mean any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement and any capital lease having substantially the same economic effect as any of the foregoing).

“ Loan ” shall have the meaning set forth in Section 2.1 .

“ Loan Interest Rate ” shall mean LIBOR applicable to the Loan plus the Applicable Margin.

“ Material Adverse Effect ” shall mean a material adverse effect on (a) the business, assets, liabilities, operations or condition (financial or otherwise) of the Borrower and its Subsidiaries taken as a whole, (b) the ability of the Borrower to perform its obligations under this Agreement, or (c) the ability of the Lender to enforce this Agreement.

“ Maturity Date ” shall mean May 13, 2016.

“ Obligations ” shall mean, with respect to the Borrower, the unpaid principal of and interest on (including, without limitation, interest accruing after the maturity of the Loan and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) the Loan and all other obligations and liabilities of the Borrower to the Lender, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement.

“ Payment Office ” shall mean the office of the Lender located at Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton HM08, Bermuda, or such other location as to which the Lender shall have given written notice to the Borrower.

“ Person ” shall mean an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.

“ Purchase and Sale Agreement ” shall have the meaning set forth in the first recital to this Agreement.

“ Quarterly Payment Date ” means the last day of March, June, September and December.

“ Subsidiary ” shall mean as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person.

“ Taxes ” shall mean all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto, provided that “Taxes” shall not include Excluded Taxes.

Section 1.2 Other Definitional Provisions .

(a) Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto.

(b) The words “ hereof ”, “ herein ” and “ hereunder ” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, Schedule and Exhibit references are to this Agreement unless otherwise specified.

(c) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

(d) The term “Lender” shall include, without limitation, its successors.

Section 1.3 Accounting Terms and Principles . Except as set forth below, all accounting terms not specifically defined herein shall be construed in conformity with GAAP and all accounting determinations required to be made pursuant hereto shall, unless expressly otherwise provided herein, be made in conformity with GAAP.

ARTICLE II

AMOUNT AND TERMS OF THE LOAN

Section 2.1 Loan . The Lender hereby confirms that the purchase price under the Purchase and Sale Agreement shall be outstanding as a long term shareholder loan to the Borrower on the terms set forth herein (the “ Loan ”) in the principal amount of$109,500,000.00. The parties agree that the Loan shall be considered as disbursed at the Closing Date.

Section 2.2 Repayment of the Loan . On the Maturity Date, the Borrower shall repay the Loan in full and shall additionally pay to the Lender all other sums, if any, then owing or accrued by it under this Agreement

Section 2.3 Prepayment . Upon three (3) Business Days’ written notice from the Borrower to the Lender, the Borrower may voluntarily prepay in whole or in part the Loan without premium or penalty.

Section 2.4 Interest .

(a) The Loan shall accrue interest at the Loan Interest Rate.

(b) The Borrower shall pay interest due and payable on the Loan in arrears on each Quarterly Payment Date.

(c) While an Event of Default exists or after acceleration of the Loan in accordance with Article VI, at the option of the Lender, interest on the unpaid principal amount of the Loan (and any unpaid interest with respect thereto) will accrue at the Default Interest Rate (the “ Default Interest ”). All Default Interest will be payable by the Borrower upon demand by the Lender.

Section 2.5 Computation of Interest . All computations of interest shall be made by the Lender on the basis of a year of 360 days. Each determination by the Lender of an interest amount hereunder shall, except for manifest error, be final, conclusive and binding for all purposes.

Section 2.6 Evidence of Debt . The Loan shall be evidenced by one or more accounts or records maintained by the Lender in the ordinary course of business. The accounts or records maintained by the Lender shall be conclusive absent manifest error of the amount of the Loan and the interest and payments thereon. Any failure so to record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Loan.

Section 2.7 Payments Generally . (a) All payments by the Borrower to the Lender hereunder shall be made to the Lender at the Payment Office in immediately available funds without setoff or counterclaim. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of the payment accruing interest, interest thereon shall be made payable for the period of such extension. All payments hereunder shall be made in Dollars.

(b) If on the Maturity Date, insufficient funds are received by and available to the Lender to pay fully all amounts of principal and interest due hereunder, such funds shall be applied (i) first, towards payment of interest, and (ii) second, towards payment of principal due hereunder.

Section 2.8 Taxes . Any and all payments by the Borrower under this Agreement shall be made free and clear of and without deduction for any and all present or future Taxes. If any Taxes shall be required by law to be deducted from or in respect of any sum payable under this Agreement to the Lender, then the Lender shall be entitled to make

such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and the sum payable by the Borrower shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings of Taxes applicable to additional sums payable under this Section) the Lender receives an amount equal to the sum it would have received had no such deduction or withholding been made.

Section 2.9 Illegality . Notwithstanding any other provision of this Agreement, if the Lender determines that it is unlawful for the Lender to make the Loan or to continue to fund or maintain the Loan, then, on notice thereof and demand therefor by the Lender to the Borrower, (i) the obligation of the Lender to make or to continue the Loan shall be suspended, and (ii) if the Loan is then outstanding, the Borrower shall immediately prepay the Loan.

Section 2.10 Subordination . The Loan shall rank pari passu with all other ordinary debt of the Borrower, but shall be subordinated in all respects to, and rank after, the Borrower’s obligations under the Guarantee provided by Borrower under the USD 440,000,000 Secured Credit Facility dated 4 December 2012 made between (1) the Lender, as borrower, (2) the Borrower, Seadrill International and the other the rig owners and intra group charterers set out at Schedule 2 thereto, as joint and several guarantors, (3) the banks and financial institutions set out at Schedule 1 thereto, together with their assignees and transferees, (4) Citibank International Plc, as agent, (5) Citibank, N.A., London Branch, as security agent, account bank, mandated lead arranger and bookrunner and (6) The Export-Import Bank of China, as mandated lead arranger and bookrunner.

ARTICLE III

CONDITIONS PRECEDENT TO THE LOAN

Section 3.1 Conditions to Effectiveness . This Agreement shall not become effective until the date (such date, the “Closing Date”) on which the closing takes place under the Purchase and Sale Agreement.

Section 3.2 Conditions to Making of the Loan . The obligations hereunder of the Lender to make the Loan are subject to the satisfaction (or waiver in accordance with Section 7.2) of the following conditions:

(a) The Lender shall have received a counterpart of this Agreement signed by or on behalf of the Borrower.

(b) At the Closing Date, and immediately after giving effect to the making of the Loan, no Default or Event of Default shall exist.

(c) At the Closing Date and immediately after giving effect to the Loan, all representations and warranties of the Borrower set forth in this Agreement shall be true and correct in all material respects on and as of such date.

(d) The conditions referred to in Clause 3.1 shall previously have been satisfied.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

To induce the Lender to enter into this Agreement and to make the Loan, the Borrower hereby represents and warrants to the Lender that:

Section 4.1 Corporate Existence; Compliance with Law . The Borrower and each of its Subsidiaries (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (b) has the limited partnership, limited liability company, corporate or other power and authority, and the legal right, to own and operate its property and assets, to lease the property and assets it operates as lessee and to conduct the business in which it is currently engaged, and (c) is in compliance with all requirements of applicable law except, to the extent that the failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 4.2 Power; Authorization; Enforceable Obligations .

(a) The Borrower has the power and authority, and the legal right, to make, deliver and perform this Agreement and to borrow hereunder. The Borrower has taken all necessary action to authorize the execution, delivery and performance of this Agreement and, to authorize the borrowing on the terms and conditions of this Agreement.

(b) No consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority or any other Person is required to be obtained by the Borrower in connection with (i) the borrowing hereunder, (ii) the execution, delivery, validity or enforceability of this Agreement, or (iii) the performance of this Agreement, except, in each case, for routine consents, authorizations, filings and notices required to be made in the ordinary course of business.

(d) This Agreement constitutes a legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).

Section 4.3 No Legal Bar . The execution, delivery and performance of this Agreement by the Borrower, the borrowing hereunder and the use of the proceeds thereof

will not violate any applicable law or any material agreement of the Borrower and will not result in, or require, the creation or imposition of any Lien on any of its properties or revenues pursuant to any requirement of applicable law or any such agreement.

Section 4.4 No Material Litigation . No litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of the Borrower, threatened by or against the Borrower or any Borrower Affiliate, or against any of its or their respective properties or revenues (a) with respect to this Agreement or any of the transactions contemplated hereby, or (b) that could reasonably be expected to have a Material Adverse Effect.

Section 4.5 No Default . No Default or Event of Default has occurred and is continuing.

ARTICLE V

COVENANTS

Section 5.1 Delivery of Financial Information . The Borrower will deliver to the Lender such financial or other information in respect of its business and financial status as the Lender may reasonably require including, but not limited to, copies of its unaudited quarterly financial statements and of its audited annual financial statements.

Section 5.2 Notice of Default . The Borrower shall promptly give notice to the Lender of the occurrence of any Default or Event of Default within five (5) Business Days after the Borrower knows or has reason to know thereof.

Section 5.3 Conduct of Business and Maintenance of Existence, etc . The Borrower will (a) (i) preserve, renew and keep in full force and effect its corporate or other existence and (ii) take all reasonable action to maintain all rights, privileges and franchises necessary or desirable in the normal conduct of its business, to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and (b) comply with all agreements and requirements of applicable law, except to the extent that failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

ARTICLE VI

EVENTS OF DEFAULT

Section 6.1 Events of Default . If any of the following events shall occur and be continuing:

(a) The Borrower shall fail to pay the principal of the Loan on the Maturity Date in accordance with the terms hereof; or the Borrower shall fail to pay any interest on the Loan, or any other amount payable hereunder, within three (3) Business Days after any such interest or other amount becomes due in accordance with the terms hereof; or

(b) Any representation or warranty made or deemed made by the Borrower herein or that is contained in any certificate, document or financial or other statement furnished by it at any time under or in connection with this Agreement shall prove to have been inaccurate in any material respect on or as of the date made or deemed made or furnished; or

(c) The Borrower shall default in the observance or performance of any other agreement contained in this Agreement to be performed by it (other than as provided in clause (a) of this Section 6.1 ), and such default shall continue unremedied for a period of 30 days after the earlier of (i) the date on which an officer of the Borrower becomes aware of such failure and (ii) the date on which written notice thereof shall have been given to the Borrower by the Lender; or

(d) (i) The Borrower or any Borrower Affiliate shall fail to make any payment on any Indebtedness (other than the Obligations) of the Borrower or any such Borrower Affiliate or on any Guarantee Obligation in respect of Indebtedness of any other Person, and, in each case, such failure relates to Indebtedness having a principal amount of $25,000,000 or more, when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) and the effect of such failure is to accelerate the maturity of such Indebtedness, (ii) any other event shall occur or condition shall exist under any agreement or instrument relating to any such Indebtedness, if the effect of such event or condition is to accelerate the maturity of such Indebtedness, (iii) any other event shall occur or condition shall exist under any agreement or instrument relating to any such Indebtedness, if the effect of such event or condition is to permit the acceleration of the maturity of such Indebtedness or (iv) any such Indebtedness shall become or be declared to be due and payable, or be required to be prepaid or repurchased (other than by a regularly scheduled required prepayment), prior to the stated maturity thereof; or

(e) (i) The Borrower shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or the Borrower shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against the Borrower any case, proceeding or other action of a nature referred to in clause (i) above that (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of sixty (60) days; or (iii) there shall be commenced against the Borrower any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against

all or any substantial part of its assets that results in the entry of an order for any such relief that shall not have been vacated, discharged, or stayed or bonded pending appeal within sixty (60) days from the entry thereof; or (iv) the Borrower shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i) , (ii) , or (iii) above; or (v) the Borrower shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due;

then, and in any such event, (A) if such event is an Event of Default specified in clause (i) or (ii) of paragraph (e) above, (i) the Loan (with accrued interest thereon) and all other amounts owing under this Agreement shall immediately become due and payable, and (B) if such event is any other Event of Default, the Lender may, by notice to the Borrower, declare the Loan (with accrued interest thereon) and all other amounts owing under this Agreement to be due and payable forthwith, whereupon the same shall immediately become due and payable.

ARTICLE VII

MISCELLANEOUS

Section 7.1 Notices .

(a) Addresses for Notices . All notices, demands, requests, consents and other communications provided for in this Agreement shall be given in writing, and addressed to the party to be notified as follows:


To the Borrower:		Seadrill Partners LLC
		One America Square
		17 Crosswall
		London EC3N 2LB
		Attn: Graham Robjohns, CEO

To the Lender:		Seadrill Limited
		Par-la-Ville Place
		14 Par-la-Ville Road
		Hamilton HM08
		Bermuda
		Attn: Georgina Sousa, Secretary

Either party hereto may change its address, telephone number or facsimile number for notices and other communications hereunder by notice to the other party. All such notices and other communications shall, when transmitted by overnight delivery, or faxed, be effective when delivered for overnight (next-day) delivery, or transmitted in legible form by facsimile machine, respectively, or if mailed, upon the third Business Day after the date deposited into the mail or if delivered, upon delivery.

Section 7.2 Waiver; Amendments . No amendment or waiver of any provision of this Agreement nor consent to any departure by the Borrower therefrom shall in any event be effective unless the same shall be in writing and (x) in the case of any such waiver or consent, signed by the Lender and (y) in the case of any other amendment, by the Lender and the Borrower, and then any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

Section 7.3 Expenses; Indemnification .

(a) The Borrower shall be obligated to pay all out-of-pocket costs and expenses (including, without limitation, but limited to the reasonable fees, charges and disbursements of outside counsel for the Lender) incurred by the Lender in connection with the enforcement or protection of its rights in connection with this Agreement, including its rights under this Section 7.3 , including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of the Loan.

(b) The Borrower shall indemnify each Lender Indemnitee against, and hold each Lender Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Lender Indemnitee) incurred by any Lender Indemnitee or asserted against any Lender Indemnitee by any third party or by the Borrower arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement or any agreement or instrument contemplated hereby, the performance by the parties hereto of their respective obligations hereunder or the consummation of the transactions contemplated hereby, or (ii) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower, and regardless of whether any Lender Indemnitee is a party thereto, provided that such indemnity shall not, as to any Lender Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final judgment to have resulted from the gross negligence or willful misconduct of such Lender Indemnitee or (y) result from a claim brought by the Borrower against any Lender Indemnitee for breach in bad faith of such Lender Indemnitee’s obligations hereunder, if the Borrower has obtained a final judgment in its favor on such claim as determined by a court of competent jurisdiction.

(c) The Borrower shall pay, and hold the Lender harmless from and against, any and all present and future stamp, documentary, and other similar taxes with respect to this Agreement, any collateral described herein, or any payments due hereunder, and save the Lender harmless from and against any and all liabilities with respect to or resulting from any delay or omission to pay such taxes.

(d) To the extent permitted by applicable law, each party shall not assert, and hereby waives, any claim against any Lender Indemnitee or the other party, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to actual or direct damages) arising out of, in connection with or as a result of, this Agreement or any agreement or instrument contemplated hereby, the transactions contemplated therein, the Loan or the use of proceeds thereof.

(e) All amounts due under this Section 7.3 shall be payable promptly after written demand therefor.

Section 7.4 Successors and Assigns . The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder, and the Lender may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Borrower. Any other attempted assignment or transfer by any party hereto shall be null and void. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby and, to the extent expressly contemplated hereby, each Lender Indemnitee) any legal or equitable right, remedy or claim under or by reason of this Agreement.

Section 7.5 Governing Law . This Agreement and the rights and obligations of the parties hereto shall be governed by, and construed and interpreted in accordance with, the law of the State of New York.

Section 7.6 Counterparts; Integration . This Agreement may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

Section 7.7 Survival . All covenants, agreements, representations and warranties made by the Borrower herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the Lender and shall survive the execution and delivery of this Agreement and the making of the Loan. The provisions of Section 7.3 shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loan or the termination of this Agreement or any provision hereof.

Section 7.8 Severability . Any provision of this Agreement held to be illegal, invalid or unenforceable in any jurisdiction, shall, as to such jurisdiction, be ineffective to the extent of such illegality, invalidity or unenforceability without affecting the legality, validity or enforceability of the remaining provisions hereof or thereof; and the illegality, invalidity or unenforceability of a particular provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

[ Signature Pages Follow ]

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


SEADRILL PARTNERS OPERATING LLC,

as Borrower

By:	/s/ Rune Magnus Lundetræ

	Name:	Rune Magnus Lundetræ

	Title:	Authorized Representative

SEADRILL LIMITED

as Lender

By:	/s/ Fredrik Halvorsen

	Name:	Fredrik Halvorsen

	Title:	CEO

Exhibit 10.5

Execution Version

PURCHASE AND SALE AGREEMENT

DATED MAY 7, 2013

AMONG

SEADRILL LIMITED

AND

SEADRILL PARTNERS OPERATING LLC

TABLE OF CONTENTS


ARTICLE I
DEFINITIONS

Section 1.01	Definitions	1

ARTICLE II
PURCHASE AND SALE OF EQUITY INTERESTS; CLOSING

Section 2.01	Purchase and Sale of Equity Interests	4
Section 2.02	Closing	5
Section 2.03	Place of Closing	5
Section 2.04	Funding of Purchase Price for the Equity Interests; Purchase Price Adjustments	5
Section 2.05	Satisfaction of Intercompany Receivables	6

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE BUYER

Section 3.01	Organization; Good Standing and Authority	6
Section 3.02	Authorization, Execution and Delivery of this Agreement	6
Section 3.03	No Conflicts	6
Section 3.04	No Consents	6

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLER

Section 4.01	Organization; Good Standing and Authority	7
Section 4.02	Authority and Authorization; Execution and Delivery of this Agreement	7
Section 4.03	No Conflicts	7
Section 4.04	No Consents	7
Section 4.05	Legal and Beneficial Title to Equity Interests; No Encumbrances	7

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE SELLER REGARDING SEADRILL T-15

Section 5.01	Organization; Good Standing and Authority of Seadrill T-15	8
Section 5.02	Capitalization; No Options	8
Section 5.03	Seadrill T-15 Governing Documents	8
Section 5.04	Loan Documents; Validity of the T-15 Credit Facility	8
Section 5.05	No Conflicts	9
Section 5.06	Title to Rig; Encumbrances	9
Section 5.07	Litigation	9
Section 5.08	Indebtedness to and from Officers, etc	9
Section 5.09	Personnel	9
Section 5.10	Contracts and Agreements	9
Section 5.11	Compliance with Law	10
Section 5.12	No Undisclosed Liabilities	10


Section 5.13	Disclosure of Information	10
Section 5.14	Insurance	10
Section 5.15	U.S Tax Classification	10

ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE SELLER REGARDING SIL

Section 6.01	Organization; Good Standing and Authority of SIL	11
Section 6.02	Thailand Permits and Licenses	11
Section 6.03	Capitalization; No Options	11
Section 6.04	SIL Governing Documents	11
Section 6.05	Drilling Contract and Loan Documents; Validity of the Drilling Contract	11
Section 6.06	No Conflicts	12
Section 6.07	Litigation	12
Section 6.08	Indebtedness to and from Officers, etc	12
Section 6.09	Personnel	12
Section 6.10	Contracts and Agreements	12
Section 6.11	Compliance with Law	13
Section 6.12	No Undisclosed Liabilities	13
Section 6.13	Disclosure of Information	13

ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF THE SELLER REGARDING THE RIG

Section 7.01	Flag	13
Section 7.02	Classification	13
Section 7.03	Maintenance	14
Section 7.04	Liens	14
Section 7.05	No Blacklisting or Boycotts	14
Section 7.06	No Options	14

ARTICLE VIII
PRE-CLOSING MATTERS

Section 8.01	Covenants of the Seller Prior to the Closing	14
Section 8.02	Covenant of the Buyer Prior to the Closing	15

ARTICLE IX
CONDITIONS OF CLOSING

Section 9.01	Conditions of the Parties	15
Section 9.02	Conditions of the Seller	16
Section 9.03	Conditions of the Buyer	16


ARTICLE X
TERMINATION, AMENDMENT AND WAIVER

Section 10.01	Termination of Agreement	17
Section 10.02	Amendments and Waivers	17

ARTICLE XI
INDEMNIFICATION

Section 11.01	Indemnity by the Seller	18
Section 11.02	Indemnity by the Buyer	18

ARTICLE XII
SPECIAL COVENANTS RELATED TO T-16 DRILLING CONTRACT

Section 12.01	T-16 Drilling Contract	18
Section 12.02	Benefits and Risks	18
Section 12.03	Termination of Special Covenant	19
Section 12.04	Option to Assign T-16 Drilling Contract	19

ARTICLE XIII
MISCELLANEOUS

Section 13.01	Further Assurances	19
Section 13.02	Powers of Attorney	19
Section 13.03	Headings; References; Interpretation	20
Section 13.04	Successors and Assigns	20
Section 13.05	No Third Party Rights	20
Section 13.06	Counterparts	20
Section 13.07	Governing Law	20
Section 13.08	Severability	21
Section 13.09	Integration	21
Section 13.10	No Broker’s Fees	21
Section 13.11	Notices	21

iii

PURCHASE AND SALE AGREEMENT , dated as of May 7, 2013, by and among SEADRILL LIMITED, a Bermuda exempted company (“ Seadrill ” or “ Seller ”), and SEADRILL PARTNERS OPERATING LLC, a Marshall Islands limited liability company (the “ Company ” or “ Buyer ”), each a “ Party ” and collectively, the “ Parties .”

RECITALS

WHEREAS, Buyer wishes to purchase from Seller, and Seller wishes to sell to Buyer, all outstanding shares of each of Seadrill T-15 Ltd., a Bermuda exempted company (“ Seadrill T-15 ”), and Seadrill International Limited, a Hong Kong company (“ SIL ”);

WHEREAS, Seller is the record owner of the Equity Interests;

WHEREAS, Seadrill T-15 is the record owner of the T-15, a barge-style, self-erecting tender rig (the “ Rig ”) and SIL is the manager and contractor of the Rig; and

WHEREAS, the Rig is subject to a contract for offshore drilling services with an effective date of February 28, 2011, as subsequently amended and novated (the “ Drilling Contract ”), between SIL and Chevron Thailand Exploration and Production Limited (the “ Customer ”).

The shares of Seadrill T-15 and SIL are referred to in this Agreement as the “ Seadrill T-15 Equity Interests ” and “ SIL Equity Interests, ” respectively, and collectively as the “ Equity Interests .”

NOW, THEREFORE, the Parties hereto agree as follows:

ARTICLE I

DEFINITIONS

Section 1.01 Definitions . In this Agreement, unless the context requires otherwise or unless otherwise specifically provided herein, the following terms shall have the respective meanings set out below and grammatical variations of such terms shall have corresponding meanings:

“ 1934 Act Filings ” means the filings Seadrill has made with the Securities and Exchange Commission under the Securities Exchange Act of 1934.

“ Agreement ” means this purchase and sale agreement, including its recitals, schedules and exhibits, as amended and supplemented.

“ Applicable Law ” in respect of any Person, property, transaction or event, means all laws, statutes, ordinances, regulations, municipal by-laws, treaties, judgments and decrees applicable to that Person, property, transaction or event and, whether or not having the force of law, all applicable official directives, rules, consents, approvals, authorizations, guidelines, orders, codes of practice and policies of any Governmental Authority having or purporting to have authority over that Person, property, transaction or event and all general principles of common law and equity.

“ Business Day ” means any day other than a Saturday, Sunday or any statutory holiday on which banks in London or New York are required to close.

“ Buyer ” has the meaning given to it in the Preamble to this Agreement.

“ Buyer Attorney-in-Fact ” has the meaning given to it in Section 13.02(a).

“ Buyer Indemnitees ” has the meaning given to it in Section 11.01.

“ Closing ” has the meaning given to it in Section 2.02.

“ Closing Date ” means the day on which the Closing takes place.

“ Company ” has the meaning given to it in the Preamble to this Agreement.

“ Contracts ” has the meaning given to it in Section 5.10.

“ Customer ” has the meaning given to it in the recitals.

“ Drilling Contract ” has the meaning given to it in the recitals.

“ Encumbrance ” means any mortgage, maritime or other lien, charge, assignment, adverse claim, hypothecation, restriction, option, covenant, voting trust arrangement, adverse claim, condition, encumbrance or right, whether fixed or floating, on, or any security interest in, any property whether real, personal or mixed, tangible or intangible, any pledge or hypothecation of any property, any deposit arrangement, priority, conditional sale agreement, other title retention agreement or equipment trust, capital lease or other security arrangements of any kind.

“Environmental Laws” means all international, federal, state, foreign and local laws, statutes, rules, regulations, treaties, conventions, orders, judgments and ordinances having the force and effect of law and relating to protection of natural resources, health and safety and the environment, each in effect and as amended through the Closing Date.

“ Equity Interests ” has the meaning given to it in the recitals.

“ Financing Agreements ” means collectively the (1) Revolving Loan Agreement dated October 24, 2012 between Seadrill Operating LP and Seadrill Capricorn Holdings LLC, as borrowers, and Seadrill, as lender, (2) Amended and Restated US$1,500,000,000 Senior Secured Credit Facility Agreement dated October 15, 2012 for Seadrill, as Borrower, the subsidiaries of Seadrill named therein as guarantors, and the banks and financial institutions named therein as lenders, (3) Amended and Restated US$1,200,000,000 Senior Secured Credit Facility Agreement dated October 10, 2012 for Seadrill, as Borrower, the subsidiaries of Seadrill named therein as guarantors, and the banks and financial institutions named therein as lenders, (4) Amended and Restated US$275,000,000 Senior Secured Term Loan and Revolving Credit Facility Agreement dated October 10, 2012 for Seadrill, as Borrower, the subsidiaries of Seadrill named therein, as guarantors, and the banks and financial institutions named therein as lenders, (5) Amended and

Restated the US$275,000,000 Senior Secured Term Loan Facility Agreement dated October 10, 2012 for Seadrill, as Borrower, the subsidiaries of Seadrill named therein, as guarantors, as the banks and financial institutions named therein as lenders, (6) Amended and Restated Common Terms Agreement dated October 10, 2012 for Seadrill, as Borrower, the subsidiaries of Seadrill named therein as guarantors, DNB Bank ASA as Agent, GIEK Facility Agent and Security Agent and Citibank NA, London Branch as GIEK Agent and (7) US$440,000,000 Senior Secured Credit Facility Agreement dated December 4, 2012 for Seadrill, as Borrower, the subsidiaries of Seadrill named therein as guarantors, and the banks and financial institutions named therein as lenders.

“ Governmental Authority ” means any domestic or foreign government, including federal, provincial, state, municipal, county or regional government or governmental or regulatory authority, domestic or foreign, and includes any department, commission, bureau, board, administrative agency or regulatory body of any of the foregoing and any multinational or supranational organization.

“ Insolvency Event ” means, with respect to any Person, that any of the following actions has occurred in relation to it:

(a) an order has been made or an effective resolution passed or other proceedings or actions taken (including the presentation of a petition) with a view to its administration, bankruptcy, winding-up, liquidation or dissolution; or

(b) it has had a receiver, administrative receiver, manager or administrator appointed over all or any substantial part of its undertaking or assets; or

(c) any event has occurred or situation arisen in any jurisdiction that has a substantially similar effect to any of the foregoing.

“ Loan Agreement ” has the meaning given to it in Section 2.04(a).

“ Losses ” means, with respect to any matter, all losses, claims, damages, liabilities, deficiencies, costs, expenses (including all costs of investigation, legal and other professional fees and disbursements, interest, penalties and amounts paid in settlement) or diminution of value, whether or not involving a claim from a third party, however specifically excluding consequential, special and indirect losses, loss of profit and loss of opportunity.

“Manager” means SIL.

“ Party ” or “ Parties ” has the meaning given to it in the Preamble to this Agreement.

“ Person ” means an individual, legal personal representative, corporation, body corporate, firm, limited liability company, partnership, trust, trustee, syndicate, joint venture, unincorporated organization or Governmental Authority.

“ Purchase Price ” has the meaning given to it in Section 2.04(a).

“ Purchase Price Adjustments ” has the meaning given to it in Section 2.04(b).

“ Rig ” has the meaning given to it in the recitals.

“ Seadrill ” has the meaning given to it in the Preamble to this Agreement.

“ Seadrill T-15 ” has the meaning given to it in the recitals.

“ Seadrill T-15 Contracts ” has the meaning given to it in Section 5.10.

“ Seadrill T-15 Equity Interests ” has the meaning given to it in the recitals.

“ Seadrill T-15 Governing Documents ” has the meaning given to it in Section 5.02.

“ Seller ” has the meaning given to it in the Preamble to this Agreement.

“ Seller Attorney-in-Fact ” has the meaning given to it in Section 13.02(b).

“ Seller Indemnitees ” has the meaning given to it in Section 11.02.

“ SIL ” has the meaning given to it in the recitals.

“ SIL Contracts ” has the meaning given to it in Section 6.10(a).

“ SIL T-15 Equity Interests ” has the meaning given to it in the recitals.

“ SIL Governing Documents ” has the meaning given to it in Section 6.03.

“ T-15 Credit Facility ” means the US$440 million Senior Secured Credit Facility Agreement dated December 4, 2012 between Seadrill Limited and certain other subsidiaries of Seadrill named therein, as Borrowers, Seadrill T-15 and certain other subsidiaries of Seadrill named therein as guarantors, and the banks and financial institutions named therein as lenders.

“ T-16 Drilling Contract ” has the meaning given to it in Section 12.01.

“ Taxes ” means all income, franchise, business, property, sales, use, goods and services or value added, withholding, excise, alternate minimum capital, transfer, excise, customs, anti-dumping, countervail, net worth, stamp, registration, payroll, employment, health, education, business, school, property, local improvement, development and occupation taxes, surtaxes, duties, levies, imposts, rates, fees, assessments, dues and charges and other taxes required to be reported upon or paid to any Governmental Authority and all interest and penalties thereon.

“ Time of Closing ” has the meaning given to it in Section 2.02.

ARTICLE II

PURCHASE AND SALE OF EQUITY INTERESTS; CLOSING

Section 2.01 Purchase and Sale of Equity Interests . The Seller agrees to sell and transfer to the Buyer, and the Buyer agrees to purchase from the Seller the Equity Interests for the Purchase Price (as defined below) and in accordance with and subject to the terms and conditions set forth in this Agreement.

Section 2.02 Closing . On the terms and subject to the conditions of this Agreement, the sale and transfer of the Equity Interests and payment of the Purchase Price shall take place on May 14, 2013 or on such other date as may be agreed upon by the Seller and the Buyer (the “ Time of Closing ”). The sale and transfer of the Equity Interests is hereinafter referred to as the “ Closing .”

Section 2.03 Place of Closing . The Closing shall occur at a place agreed upon by the Sellers and the Buyer.

Section 2.04 Funding of Purchase Price for the Equity Interests; Purchase Price Adjustments .

(a) At the Time of Closing, the Buyer shall enter into a loan agreement with the Seller, as the lender (the “ Loan Agreement ”), pursuant to which the Buyer shall borrow from Seller on the Closing Date a sum equal to $210,000,000, less $100,500,000, which is the amount of debt outstanding on the date hereof under the T-15 Credit Facility (the “ Purchase Price ”). The Loan Agreement shall be in substantially the form attached to this Agreement as Exhibit I hereto.

(b) The Purchase Price shall be subject to the following adjustments (the “ Purchase Price Adjustments ”).

(i) The Purchase Price shall be increased or decreased by an amount equal to the amount that all net working capital (excluding inventory and debt) reflected on the books and records as of the Closing Date of Seadrill T-15 either exceeds or is less than $500,000;

(ii) The Purchase Price shall be increased or decreased by an amount equal to the amount that the mobilization fee payable under the Drilling Contract exceeds or is less than the direct costs of operation of the Rig incurred by the Company between the Closing Date and the date of commencement of operations under the Drilling Contract; and

(iii) The Purchase Price shall be decreased by an amount equal to the direct cost of any repairs to the Rig required as a result of inspection and acceptance testing by the Customer, and by an amount equivalent to the operating rate under the Drilling Contract for any time the rig is on zero rate between the Closing Date and the commencement of the Drilling Contract.

(c) Within 30 days following the commencement of the Drilling Contract, the Seller and the Buyer, shall agree on the amount of the Purchase Price Adjustments pursuant to Section 2.04(b), and the amount of the Loan Agreement shall be fixed at the adjusted Purchase Price.

Section 2.05 Satisfaction of Intercompany Receivables . The Seller hereby acknowledges that, upon receipt of the Purchase Price by Seller, all amounts payable to the Seller by Seadrill T-15 and SIL will be extinguished.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE BUYER

The Buyer represents and warrants to the Seller that as of the date hereof and on the Closing Date:

Section 3.01 Organization; Good Standing and Authority . The Buyer has been duly formed and is validly existing in good standing under the laws of the Republic of the Marshall Islands and has all requisite limited liability company power and authority to operate its assets and conduct its business as it is now being conducted. No Insolvency Event has occurred with respect to the Buyer and no events or circumstances have arisen that entitle or could entitle any person to take any action, appoint any person, commence proceedings or obtain any order instigating an Insolvency Event.

Section 3.02 Authorization, Execution and Delivery of this Agreement . The Buyer has the full right, power and authority to enter into this Agreement and to perform its obligations hereunder. The execution and delivery of this Agreement and all documents, instruments and agreements required to be executed and delivered by the Buyer pursuant to this Agreement in connection with the completion of the transactions contemplated by this Agreement, have been duly authorized by all necessary action on its part, and this Agreement has been duly executed and delivered by the Buyer and constitutes a legal, valid and binding obligation of the Buyer enforceable against it in accordance with its terms, except as may be limited by bankruptcy, insolvency, liquidation, reorganization, reconstruction and other similar laws of general application affecting the enforceability of remedies and rights of creditors and except that equitable remedies such as specific performance and injunction are in the discretion of a court.

Section 3.03 No Conflicts . The execution, delivery and performance by the Buyer of this Agreement will not conflict with or result in any violation of or constitute a breach of any of the terms or provisions of, or result in the acceleration of any obligation under, or constitute a default under any provision of: (i) its certificate of formation or its First Amended and Restated Operating Agreement; (ii) any Encumbrance, bond, indenture, agreement, contract, franchise license, permit or other instrument or obligation to which it is a party or is subject or by which any of its assets or properties may be bound; or (iii) any Applicable Laws.

Section 3.04 No Consents . Except as have already been obtained or that will be obtained prior to the Time of Closing, no consent, permit, approval or authorization of, notice or declaration to or filing with any Governmental Authority or any other Person, including those related to any Environmental Laws or regulations, is required in connection with the execution and delivery by it of this Agreement or the consummation by the Buyer of the transactions contemplated hereunder.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE SELLER

Seller represents and warrants to the Buyer that as of the date hereof and on the Closing Date:

Section 4.01 Organization; Good Standing and Authority . Seadrill has been duly incorporated and is validly existing and in good standing under the laws of Bermuda and has all requisite corporate power and authority to own and operate its assets and conduct its business as described in the 1934 Act Filings. No Insolvency Event has occurred with respect to the Seller and no events or circumstances have arisen that entitle or could entitle any person to take any action, appoint any person, commence proceedings or obtain any order instigating an Insolvency Event.

Section 4.02 Authority and Authorization; Execution and Delivery of this Agreement . The Seller has the full right, power and authority to enter into this Agreement and to perform its obligations hereunder. The execution and delivery of this Agreement and all documents, instruments and agreements required to be executed and delivered by the Seller pursuant to this Agreement in connection with the completion of the transactions contemplated by this Agreement, have been duly authorized by all necessary action on its part, and this Agreement has been duly executed and delivered by the Seller and constitutes a legal, valid and binding obligation of the Seller enforceable against it in accordance with its terms, except as may be limited by bankruptcy, insolvency, liquidation, reorganization, reconstruction and other similar laws of general application affecting the enforceability of remedies and rights of creditors and except that equitable remedies such as specific performance and injunction are in the discretion of a court.

Section 4.03 No Conflicts . The execution, delivery and performance by the Seller of this Agreement will not conflict with or result in any violation of or constitute a breach of any of the terms or provisions of, or result in the acceleration of any obligation under, or constitute a default under any provision of: (i) the Seller’s memorandum of association or bye-laws; (ii) any Encumbrance, bond, indenture, agreement, contract, franchise license, permit or other instrument or obligation to which the Seller is a party or is subject or by which any of its assets or properties may be bound, including the Financing Agreements; or (iii) any Applicable Laws.

Section 4.04 No Consents . Except as have already been obtained or that will be obtained prior to the Time of Closing, no consent, permit, approval or authorization of, notice or declaration to or filing with any Governmental Authority or any other Person, including those related to any Environmental Laws or regulations, is required in connection with the execution and delivery by the Seller of this Agreement or the consummation by the Seller of the transactions contemplated hereunder.

Section 4.05 Legal and Beneficial Title to Equity Interests; No Encumbrances . As of the date hereof, Seller is the record owner of the Equity Interests and has legal and beneficial title to the Equity Interests, free and clear of any and all Encumbrances, other than any intercompany payables that will be extinguished pursuant to Section 2.05 and those arising under the T-15 Credit Facility, and, upon (i) conveyance on the Closing Date of the certificates representing the

Equity Interests and (ii) the updating of each of the Seadrill T-15 and SIL share registers, the Buyer will receive, legal and beneficial title to the Equity Interests, free and clear of any and all Encumbrances, other than those arising under the T-15 Credit Facility.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF

THE SELLER REGARDING SEADRILL T-15

The Seller represents and warrants to the Buyer that as of the date hereof and on the Closing Date:

Section 5.01 Organization; Good Standing and Authority of Seadrill T-15 . Seadrill T-15 has been duly incorporated and is validly existing in good standing under the laws of Bermuda and has all requisite corporate power and authority to own and operate its assets and conduct its business. No Insolvency Event has occurred with respect to Seadrill T-15 and no events or circumstances have arisen that entitle or could entitle any person to take any action, appoint any person, commence proceedings or obtain any order instigating an Insolvency Event. Seadrill T-15 is qualified to do business, is in good standing and has all required and appropriate licenses and authorizations in each jurisdiction in which its failure to obtain or maintain such qualification, good standing, licensing or authorization would have a material adverse effect on the condition (financial or otherwise), assets, properties, business or prospects of Seadrill T-15.

Section 5.02 Capitalization; No Options . The Equity Interests have been duly authorized and validly issued in accordance with the memorandum of association and bylaws of Seadrill T-15 (the “ Seadrill T-15 Governing Documents ”) and are fully paid and non-assessable. There are not outstanding (i) any options, warrants or other rights to purchase any Equity Interests of Seadrill T-15, (ii) any securities convertible into or exchangeable for Equity Interests of Seadrill T-15 or (iii) any other commitments of any kind for the issuance of Equity Interests of Seadrill T-15 or options, warrants or other securities of Seadrill T-15.

Section 5.03 Seadrill T-15 Governing Documents . The Seller has supplied to the Buyer true and correct copies of the Seadrill T-15 Governing Documents, as amended to the Closing Date, and no amendments will be made to the Seadrill T-15 Governing Documents prior to the Closing Date without the prior written consent of the Buyer (such consent not to be unreasonably withheld).

Section 5.04 Loan Documents; Validity of the T-15 Credit Facility . The Seller has supplied to the Buyer true and correct copies of the T-15 Credit Facility and any related documents, as amended to the Closing Date. The T-15 Credit Facility is a valid and binding agreement of Seadrill T-15 enforceable against it in accordance with its terms and, to the knowledge of the Seller, the T-15 Credit Facility is a valid and binding agreement of all other parties thereto enforceable against such parties in accordance with its terms, except as may be limited by bankruptcy, insolvency, liquidation, reorganization, reconstruction and other similar laws of general application affecting the enforceability of remedies and rights of creditors and except that equitable remedies such as specific performance and injunction are in the discretion of a court.

Section 5.05 No Conflicts . The execution, delivery and performance of this Agreement will not conflict with or result in any violation of or constitute a breach of any of the terms or provisions of, or result in the acceleration of any obligation under, or constitute a default under any provision of: (i) the Seadrill T-15 Governing Documents; (ii) any Encumbrance, bond, indenture, agreement, contract, franchise license, permit or other instrument or obligation to which Seadrill T-15 is a party or is subject or by which any of its assets or properties may be bound; (iii) any Applicable Laws; or (iv) give any other party thereto a right to terminate any agreement or other instrument to which Seadrill T-15 is a party or by which it is bound including the T-15 Credit Facility.

Section 5.06 Title to Rig; Encumbrances . Seadrill T-15 now has, and at the Time of Closing will have, good and marketable title to the Rig and its equipment, free and clear of any and all Encumbrances, other than any intercompany payables that will be extinguished pursuant to Section 2.05 and those arising under the T-15 Credit Facility and permitted encumbrances under the T-15 Credit Facility. As of the date hereof, there is $100,500,000 of borrowings outstanding under the T-15 Credit Facility.

Section 5.07 Litigation .

(a) There is no action, suit or proceeding to which Seadrill T-15 is a party (either as a plaintiff or defendant) pending before any court or governmental agency, authority or body or arbitrator; there is no action, suit or proceeding threatened against Seadrill T-15; and, to the best knowledge of the Seller, there is no basis for any such action, suit or proceeding;

(b) Seadrill T-15 has not been permanently or temporarily enjoined by any order, judgment or decree of any court or any governmental agency, authority or body from engaging in or continuing any conduct or practice in connection with its business, assets or properties; and

(c) There is not in existence any order, judgment or decree of any court or other tribunal or other agency enjoining or requiring Seadrill T-15 to take any action of any kind with respect to its business, assets or properties.

Section 5.08 Indebtedness to and from Officers, etc . Seadrill T-15 will not be indebted, directly or indirectly, to any person who is an officer, director, stockholder or employee of the Seller or any spouse, child, or other relative or any affiliate of the Seller, nor shall any such officer, director, stockholder, employee, relative or affiliate be indebted to Seadrill T-15.

Section 5.09 Personnel . Seadrill T-15 has no employees. All crew members with respect to the Rig are provided directly or indirectly by the Manager.

Section 5.10 Contracts and Agreements . All material contracts and agreements, written or oral, to which Seadrill T-15 is a party or by which any of its assets are bound, including the T-15 Credit Facility and the Bareboat Charter Agreement between Seadrill T-15 and Seadrill UK Limited dated December 10, 2012 (the “ Seadrill T-15 Contracts ”), have been disclosed to the Buyer.

(a) Each of the Seadrill T-15 Contracts is a valid and binding agreement of Seadrill T-15 enforceable against it in accordance with its terms, and to the knowledge of the

Seller, each of the Seadrill T-15 Contracts is a valid and binding agreement of all other parties thereto enforceable against such parties in accordance with their terms, except as may be limited by bankruptcy, insolvency, liquidation, reorganization, reconstruction and other similar laws of general application affecting the enforceability of remedies and rights of creditors and except that equitable remedies such as specific performance and injunction are in the discretion of a court;

(b) Seadrill T-15 has fulfilled all material obligations required pursuant to the Seadrill T-15 Contracts to have been performed by it prior to the date hereof and has not waived any material rights thereunder; and

(c) There has not occurred any material default on the part of Seadrill T-15 under any of the Seadrill T-15 Contracts, or to the knowledge of the Seller, on the part of any other party thereto, nor has any event occurred that with the giving of notice or the lapse of time, or both, would constitute any material default on the part of Seadrill T-15 under any of the Contracts nor, to the knowledge of the Seller, has any event occurred that with the giving of notice or the lapse of time, or both, would constitute any material default on the part of any other party to any of the Seadrill T-15 Contracts.

Section 5.11 Compliance with Law . The conduct of business by Seadrill T-15 or the Rig on the date hereof does not violate any Applicable Laws (including any of the foregoing relating to employment discrimination, environmental protection or conservation, and the provisions of all international conventions and the rules and regulations issued thereunder applicable to the Rig), the enforcement of which would materially and adversely affect the business, assets, condition (financial or otherwise) or prospects of Seadrill T-15, nor has Seadrill T-15 received any notice of any such violation.

Section 5.12 No Undisclosed Liabilities . Neither Seadrill T-15 nor the Rig has any Encumbrances, or other liabilities or obligations of any nature, whether absolute, accrued, contingent or otherwise, and whether due or to become due (including any liability for Taxes and interest, penalties and other charges payable with respect to any such liability or obligation), except for such liabilities or obligations arising under the Seadrill T-15 Contracts or the Drilling Contract.

Section 5.13 Disclosure of Information . The Seller has disclosed to the Buyer all material information on, and about, Seadrill T-15 and the Rig and all such information is true, accurate and not misleading in any material respect. Nothing has been withheld from any materials provided by the Seller to the Buyer in connection with the transactions contemplated by this Agreement that would render such information untrue or misleading.

Section 5.14 Insurance . The insurance policies relating to the Rig are set forth on Schedule A hereto, each of which is in full force and effect and, to the knowledge of the Seller, not subject to being voided or terminated for any reason.

Section 5.15 U.S Tax Classification . Seadrill T-15 has elected or prior to Closing will elect to be classified for United States federal income tax purposes as an entity disregarded as separate from Seller on a properly-completed Form 8832 filed with the Internal Revenue Service. This election has been or will be made with an effective date prior to Closing. Once this election has been made, neither Seller nor Seadrill T-15 will take any action to change the U.S. federal income tax classification of Seadrill T-15 from an entity disregarded as separate from Seller.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF

THE SELLER REGARDING SIL

The Seller represents and warrants to the Buyer that as of the date hereof and on the Closing Date:

Section 6.01 Organization; Good Standing and Authority of SIL . SIL has been duly incorporated and is validly existing in good standing under the laws of Hong Kong and has all requisite corporate power and authority to own and operate its assets and conduct its business. No Insolvency Event has occurred with respect to SIL and no events or circumstances have arisen that entitle or could entitle any person to take any action, appoint any person, commence proceedings or obtain any order instigating an Insolvency Event. SIL is qualified to do business, is in good standing and, except as set forth in Section 6.02 of this Agreement, has all required and appropriate licenses and authorizations in each jurisdiction in which its failure to obtain or maintain such qualification, good standing, licensing or authorization would have a material adverse effect on the condition (financial or otherwise), assets, properties, business or prospects of SIL.

Section 6.02 Thailand Permits and Licenses . As of the date of this Agreement, SIL has applied for all licenses and permits required for SIL to perform its obligations under the Drilling Contract in Thailand. As of the date of commencement of operations under the Drilling Contract, SIL shall have been granted all permits and licenses required to perform its obligations under the Drilling Contract.

Section 6.03 Capitalization; No Options . The SIL Equity Interests have been duly authorized and validly issued in accordance with the memorandum of association and bylaws of SIL (the “ SIL Governing Documents ”) and are fully paid and non-assessable. There are not outstanding (i) any options, warrants or other rights to purchase any Equity Interests of SIL, (ii) any securities convertible into or exchangeable for Equity Interests of SIL or (iii) any other commitments of any kind for the issuance of Equity Interests of SIL or options, warrants or other securities of SIL.

Section 6.04 SIL Governing Documents . The Seller has supplied to the Buyer true and correct copies of the SIL Governing Documents, as amended to the Closing Date, and no amendments will be made to the SIL Governing Documents prior to the Closing Date without the prior written consent of the Buyer (such consent not to be unreasonably withheld).

Section 6.05 Drilling Contract and Loan Documents; Validity of the Drilling Contract . The Seller has supplied to the Buyer true and correct copies of the Drilling Contract and any related documents, as amended to the Closing Date. The Drilling Contract is a valid and binding agreement of SIL enforceable against it in accordance with its terms and, to the knowledge of the Seller, the Drilling Contract is a valid and binding agreement of all other parties thereto enforceable against such parties in accordance with its terms, except as may be limited by

bankruptcy, insolvency, liquidation, reorganization, reconstruction and other similar laws of general application affecting the enforceability of remedies and rights of creditors and except that equitable remedies such as specific performance and injunction are in the discretion of a court.

Section 6.06 No Conflicts . The execution, delivery and performance of this Agreement will not conflict with or result in any violation of or constitute a breach of any of the terms or provisions of, or result in the acceleration of any obligation under, or constitute a default under any provision of: (i) the SIL Governing Documents; (ii) any Encumbrance, bond, indenture, agreement, contract, franchise license, permit or other instrument or obligation to which SIL is a party or is subject or by which any of its assets or properties may be bound; (iii) any Applicable Laws; or (iv) give any other party thereto a right to terminate any agreement or other instrument to which SIL is a party or by which it is bound including the Drilling Contract.

Section 6.07 Litigation .

(a) There is no action, suit or proceeding to which SIL is a party (either as a plaintiff or defendant) pending before any court or governmental agency, authority or body or arbitrator; there is no action, suit or proceeding threatened against SIL; and, to the best knowledge of the Seller, there is no basis for any such action, suit or proceeding;

(b) SIL has not been permanently or temporarily enjoined by any order, judgment or decree of any court or any governmental agency, authority or body from engaging in or continuing any conduct or practice in connection with its business, assets or properties; and

(c) There is not in existence any order, judgment or decree of any court or other tribunal or other agency enjoining or requiring SIL to take any action of any kind with respect to its business, assets or properties.

Section 6.08 Indebtedness to and from Officers, etc . SIL will not be indebted, directly or indirectly, to any person who is an officer, director, stockholder or employee of the Seller or any spouse, child, or other relative or any affiliate of the Seller, nor shall any such officer, director, stockholder, employee, relative or affiliate be indebted to SIL.

Section 6.09 Personnel . There are not pending or, to the knowledge of Seller, threatened against SIL any general labor disputes, strikes or concerted work stoppages, and, to the knowledge of Seller, there are no demands or proposals that are pending or have been made by any labor union or association with respect to any personnel employed by SIL.

Section 6.10 Contracts and Agreements . All material contracts and agreements, written or oral, to which SIL is a party or by which any of its assets are bound, including the Drilling Contract, the T-16 Drilling Contract, and the Bareboat Charter Agreement dated December 10, 2012 between SIL and Seadrill UK Ltd. (the “ SIL Contracts ”), have been disclosed to the Buyer.

(a) Each of the SIL Contracts is a valid and binding agreement of SIL enforceable against it in accordance with its terms, and to the knowledge of the Seller, each of the SIL Contracts is a valid and binding agreement of all other parties thereto enforceable against such parties in accordance with their terms, except as may be limited by bankruptcy, insolvency, liquidation, reorganization, reconstruction and other similar laws of general application affecting the enforceability of remedies and rights of creditors and except that equitable remedies such as specific performance and injunction are in the discretion of a court;

(b) SIL has fulfilled all material obligations required pursuant to the SIL Contracts to have been performed by it prior to the date hereof and has not waived any material rights thereunder; and

(c) There has not occurred any material default on the part of SIL under any of the SIL Contracts, or to the knowledge of the Seller, on the part of any other party thereto, nor has any event occurred that with the giving of notice or the lapse of time, or both, would constitute any material default on the part of SIL under any of the SIL Contracts nor, to the knowledge of the Seller, has any event occurred that with the giving of notice or the lapse of time, or both, would constitute any material default on the part of any other party to any of the SIL Contracts.

Section 6.11 Compliance with Law . The conduct of business by SIL or the Rig on the date hereof does not violate any Applicable Laws (including any of the foregoing relating to employment discrimination, environmental protection or conservation, and the provisions of all international conventions and the rules and regulations issued thereunder applicable to the Rig), the enforcement of which would materially and adversely affect the business, assets, condition (financial or otherwise) or prospects of SIL, nor has SIL received any notice of any such violation.

Section 6.12 No Undisclosed Liabilities . Neither SIL nor the Rig has any Encumbrances, or other liabilities or obligations of any nature, whether absolute, accrued, contingent or otherwise, and whether due or to become due (including any liability for Taxes and interest, penalties and other charges payable with respect to any such liability or obligation), except for such liabilities or obligations arising under the SIL Contracts.

Section 6.13 Disclosure of Information . The Seller has disclosed to the Buyer all material information on, and about, SIL and the Rig and all such information is true, accurate and not misleading in any material respect. Nothing has been withheld from any materials provided by the Seller to the Buyer in connection with the transactions contemplated by this Agreement that would render such information untrue or misleading.

ARTICLE VII

REPRESENTATIONS AND WARRANTIES OF

THE SELLER REGARDING THE RIG

The Seller represents and warrants to the Buyer that on the date hereof and on the Closing Date:

Section 7.01 Flag . The Rig is properly registered in the name of Seadrill T-15 under and pursuant to the flag and law of Panama and all fees due and payable in connection with such registration have been paid.

Section 7.02 Classification . The Rig is entered with American Bureau of Shipping and has the highest classification rating. The Rig is in class without any recommendations or

notation as to class or other requirement of the relevant classification society, and if the Rig is in a port, it is in such condition that it cannot be detained by any port state authority or the flag state authority for any deficiency.

Section 7.03 Maintenance . The Rig has been maintained in a proper and efficient manner in accordance with internationally accepted standards for good rig maintenance, is in good operating order, condition and repair and is seaworthy and all repairs made to the Rig since its delivery from the shipyard in February 2013 and all known scheduled repairs due to be made and all known deficiencies have been disclosed to the Buyer.

Section 7.04 Liens . The Rig is not (i) under arrest or otherwise detained, (ii) other than in the ordinary course of business, in the possession of any Person (other than her master and crew) or (iii) subject to a possessory lien.

Section 7.05 No Blacklisting or Boycotts . No blacklisting or boycotting of any type has been applied or currently exists against or in respect of the Rig.

Section 7.06 No Options . There are not outstanding any options or other rights to purchase the Rig.

ARTICLE VIII

PRE-CLOSING MATTERS

Section 8.01 Covenants of the Seller Prior to the Closing . From the date of this Agreement to the Closing Date, the Seller shall cause each of Seadrill T-15 and SIL to conduct its business in the usual, regular and ordinary course in substantially the same manner as previously conducted. The Seller shall not permit either SIL or Seadrill T-15 to enter into any material contracts or other material written or oral agreements prior to the Closing Date, other than such contracts and agreements as have been disclosed to the Buyer prior to the date of this Agreement, without the prior consent of the Buyer (such consent not to be unreasonably withheld). In addition, the Seller shall not permit either SIL or Seadrill T-15 to take any action that would result in any of the conditions to the purchase and sale of the Equity Interests set forth in Article IX not being satisfied. Furthermore, the Seller hereby agrees and covenants that it:

(a) shall cooperate with the Buyer and use its reasonable best efforts to obtain, at or prior to the Closing Date, any consents required in respect of the transfer of the rights and benefits under each of the Seadrill T-15 Contracts and the SIL Contracts as a result of the transfer of Equity Interests under this Agreement;

(b) shall use its reasonable best efforts to take or cause to be taken promptly all actions and to do or cause to be done all things necessary, proper and advisable to consummate and make effective as promptly as practicable the transaction contemplated by this Agreement and to cooperate with the Buyer in connection with the foregoing, including using all reasonable best efforts to obtain all necessary consents, approvals and authorizations from each Governmental Authority and each other Person that are required to consummate the transaction contemplated under this Agreement;

(c) shall take or cause to be taken all necessary corporate action, steps and proceedings to approve or authorize validly and effectively the purchase and sale of the Equity Interests and the execution, delivery and performance of this Agreement and the other agreements and documents contemplated hereby;

(d) shall not amend, alter or otherwise modify or permit any amendment, alteration or modification of any material provision of or terminate the Drilling Contract or any other Seadrill T-15 Contract or SIL Contract prior to the Closing Date without the prior written consent of the Buyer, such consent not to be unreasonably withheld or delayed;

(e) shall not exercise or permit any exercise of any rights or options contained in the Drilling Contract, without the prior written consent of the Buyer, not to be unreasonably withheld or delayed;

(f) shall observe and perform in a timely manner, all of its covenants and obligations under the Seadrill T-15 Contracts and SIL Contracts, if any, and in the case of a default by another party thereto, it shall forthwith advise the Buyer of such default and shall, if requested by the Buyer, enforce all of its rights under such Seadrill T-15 Contracts and SIL Contracts, as applicable, in respect of such default;

(g) shall not cause or, to the extent reasonably within its control, permit any Encumbrances to attach to the Rig other than in connection with the T-15 Credit Facility; and

(h) shall permit representatives of the Buyer to make, prior to the Closing Date, at the Buyer’s risk and expense, such searches, surveys, tests and inspections of the Rig as the Buyer may deem desirable; provided , however , that such surveys, tests or inspections shall not damage the Rig or interfere with the activities of the Seller or the Customer thereon and that the Buyer shall furnish the Seller with evidence that the Buyer has adequate liability insurance in full force and effect.

Section 8.02 Covenant of the Buyer Prior to the Closing . The Buyer hereby agrees and covenants that during the period of time after the date of the Agreement and prior to the Closing Date, the Buyer shall, in respect of the Equity Interests to be transferred on the Closing Date, take, or cause to be taken, to the extent not already taken, all necessary limited liability company action, steps and proceedings to approve or authorize validly and effectively the purchase and sale of the Equity Interests and the execution, delivery and performance of this Agreement and any other agreements and documents contemplated hereby.

ARTICLE IX

CONDITIONS OF CLOSING

Section 9.01 Conditions of the Parties . The obligation of the Seller to sell the Equity Interests and the obligation of the Buyer to purchase the Equity Interests is subject to the satisfaction (or waiver by each of the Seller and the Buyer) on or prior to the Closing Date of the following conditions:

(a) The Seller shall have received any and all written consents, permits, approvals or authorizations of any Governmental Authority or any other Person (including with

respect to the Seadrill T-15 Contracts, the SIL Contracts and the Financing Agreements) and shall have made any and all notices or declarations to or filing with any Governmental Authority or any other Person, including those related to any Environmental Laws or regulations, required in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereunder, including the transfer of the Equity Interests;

(b) No legal or regulatory action or proceeding shall be pending or threatened by any Governmental Authority to enjoin, restrict or prohibit the purchase and sale of the Equity Interests;

(c) The Seller and the Buyer shall have entered into the Loan Agreement substantially in the form set forth on Exhibit I hereto; and

(d) The Seller and Seadrill T-15 shall have entered into the intercompany loan agreement relating to the Rig substantially in the form set forth on Exhibit II hereto.

Section 9.02 Conditions of the Seller . The obligation of the Seller to sell the Equity Interests is subject to the satisfaction (or waiver by the Seller) on or prior to the Closing Date of the following conditions:

(a) The representations and warranties of the Buyer made in this Agreement shall be true and correct in all material respects as of the Closing Date as though made on the Closing Date, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct in all material respects, on and as of such earlier date);

(b) The Buyer shall have performed or complied in all material respects with all obligations and covenants required by this Agreement to be performed or complied with by the Buyer by the Closing Date; and

(c) All proceedings to be taken in connection with the transactions contemplated by this Agreement and all documents incidental thereto shall be reasonably satisfactory in form and substance to the Seller and its counsel, and the Seller shall have received copies of all such documents and other evidence as it may reasonably request in order to establish the consummation of such transactions and the taking of all proceedings in connection therewith.

Section 9.03 Conditions of the Buyer . The obligation of the Buyer to purchase and pay for the Equity Interests is subject to the satisfaction (or waiver by the Buyer) on or prior to the Closing Date of the following conditions:

(a) The representations and warranties of the Seller in this Agreement shall be true and correct in all material respects as of the Closing Date as though made on the Closing Date, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct in all material respects, on and as of such earlier date);

(b) The Seller shall have performed or complied in all material respects with all obligations and covenants required by this Agreement to be performed or complied with by the Seller by the Closing Date;

(c) The results of the searches, surveys, tests and inspections of the Rig referred to in Section 8.01(h) of this Agreement are reasonably satisfactory to the Buyer;

(d) The Buyer shall have obtained the funds necessary to consummate the purchase of the Equity Interests, and to pay all related fees and expenses; and

(e) All proceedings to be taken in connection with the transaction contemplated by this Agreement and all documents incidental thereto shall be reasonably satisfactory in form and substance to the Buyer and its counsel, and the Buyer shall have received copies of all such documents and other evidence as it or its counsel may reasonably request in order to establish the consummation of such transaction and the taking of all proceedings in connection therewith.

ARTICLE X

TERMINATION, AMENDMENT AND WAIVER

Section 10.01 Termination of Agreement . Notwithstanding anything to the contrary in this Agreement, this Agreement may be terminated and the purchase and sale of the Equity Interests contemplated by this Agreement abandoned at any time prior to the Closing:

(a) by mutual written consent of the Seller and the Buyer;

(b) by the Seller if any of the conditions set forth in Section 9.01 and Section 9.02 shall have become incapable of fulfillment, and shall not have been waived by the Seller; or

(c) by the Buyer if any of the conditions set forth in Section 9.01 and Section 9.03 shall have become incapable of fulfillment, and shall not have been waived by the Buyer;

provided , however , that the Party seeking termination pursuant to clause (b) or (c) is not then in material breach of any of its representations, warranties, covenants or agreements contained in this Agreement.

Section 10.02 Amendments and Waivers . This Agreement may not be amended except by an instrument in writing signed on behalf of each Party hereto. An instrument in writing by the Buyer, on the one hand, or the Seller, on the other hand, may waive compliance by the other with any term or provision of this Agreement that such other Party was or is obligated to comply with or perform.

ARTICLE XI

INDEMNIFICATION

Section 11.01 Indemnity by the Seller . Following the Closing, the Seller shall be liable for, and shall indemnify, defend and hold harmless the Buyer and its officers, directors, employees, agents and representatives (the “ Buyer Indemnitees ”) from and against:

(a) any Losses, suffered or incurred by such Buyer Indemnitee by reason of, arising out of or otherwise in respect of any inaccuracy in, breach of any representation or warranty, or a failure to perform or observe fully any covenant, agreement or obligation of, the Seller in or under this Agreement or in or under any document, instrument or agreement delivered pursuant to this Agreement by the Seller;

(b) any fees, expenses or other payments incurred or owed by the Seller to any brokers, financial advisors or comparable other persons retained or employed by it in connection with the transaction contemplated by this Agreement;

(c) any Losses suffered as a result of the failure of SIL to obtain required permits or licenses in Thailand necessary to perform its obligations under the Drilling Contract prior to the commencement of operations under the Drilling Contract; and

(d) any Losses arising out of the T-16 Drilling Contract.

Section 11.02 Indemnity by the Buyer . Following the Closing, the Buyer shall indemnify the Seller and its affiliates, officers, directors, employees, agents and representatives (the “ Seller Indemnitees ”) against and hold them harmless from, any Losses, suffered or incurred by such Seller Indemnitee by reason of, arising out of or otherwise in respect of any inaccuracy in, breach of any representation or warranty, or a failure to perform or observe fully any covenant, agreement or obligation of, the Buyer in or under this Agreement or in or under any document, instrument or agreement delivered pursuant to this Agreement by the Buyer.

ARTICLE XII

SPECIAL COVENANTS RELATED TO T-16 DRILLING CONTRACT

Section 12.01 T-16 Drilling Contract . SIL is party to a contract for offshore drilling services with an effective date of February 28, 2011, as subsequently amended and novated (the “ T-16 Drilling Contract ”), between SIL and the Customer.

Section 12.02 Benefits and Risks . It is the intent of the Parties that the benefits and risks of the T-16 Drilling Contract shall remain with the Seller. Accordingly, Buyer agrees to cause SIL to pay to Seller to all amounts SIL receives from the Customer or any other third party with respect to the T-16 Drilling Contract relating to dates occurring on or after the Closing Date, net of (i) any amounts SIL may be required to withhold in accordance with applicable tax or other law, (ii) any costs SIL may incur in relation to SIL’s performance of its obligations under the T-16 Drilling Contract and (iii) arm’s-length compensation to SIL for any services it performs with respect to the T-16 Drilling Contract. In the event that sums received from the Customer are less than such withholdings and costs, then Seller shall reimburse SIL for such losses under the T-16 Drilling Contract.

Section 12.03 Termination of Special Covenant . The special covenant provided in this Article 12 shall terminate in the event that Buyer exercises its right to purchase the T-16 drilling rig pursuant to the terms of the Omnibus Agreement between the parties dated as of October 24, 2012.

Section 12.04 Option to Assign T-16 Drilling Contract . Buyer shall have the option to assign the T-16 Drilling Contract to Seller or Seller’s nominee at any time. In the event that Buyer elects to assign the T-16 Drilling Contract, Buyer shall provide 30 days prior written notice to Seller of Buyer’s election to assign the T-16 Drilling Contract, and Seller shall notify Buyer of the nominated Assignee.

ARTICLE XIII

MISCELLANEOUS

Section 13.01 Further Assurances . From time to time after the date of this Agreement, and without any further consideration, the Parties agree to execute, acknowledge and deliver all such additional deeds, assignments, bills of sale, conveyances, instruments, notices, releases, acquittances and other documents, and will do all such other acts and things, all in accordance with Applicable Law, as may be necessary or appropriate (a) more fully to assure that the applicable Parties own all of the properties, rights, titles, interests, estates, remedies, powers and privileges granted by this Agreement, or which are intended to be so granted, (b) more fully and effectively to vest in the applicable Parties and their respective successors and assigns beneficial and record title to the interests distributed, contributed and assigned by this Agreement or intended so to be and (c) to more fully and effectively carry out the purposes and intent of this Agreement.

Section 13.02 Powers of Attorney .

(a) The Buyer hereby constitutes and appoints Georgina Sousa (the “ Buyer Attorney-in-Fact ”) as its true and lawful attorney-in-fact with full power of substitution for it and in its name, place and stead or otherwise on behalf of the Buyer and its successors and assigns, and for the benefit of the Buyer Attorney-in-Fact to demand and receive from time to time the Equity Interests conveyed by this Agreement (or intended so to be) and to execute in the name of the Buyer and its successors and assigns instruments of conveyance, instruments of further assurance and to give receipts and releases in respect of the same, and from time to time to institute and prosecute in the name of the Buyer for the benefit of the Buyer Attorney-in-Fact, any and all proceedings at law, in equity or otherwise which the Buyer Attorney-in-Fact may deem proper in order to (a) collect, assert or enforce any claims, rights or titles of any kind in and to the Equity Interests, (b) defend and compromise any and all actions, suits or proceedings in respect of any of the Equity Interests, and (c) do any and all such acts and things in furtherance of this Agreement as the Buyer Attorney-in-Fact shall deem advisable. The Buyer hereby declares that the appointment hereby made and the powers hereby granted are coupled with an interest and are and shall be irrevocable and perpetual and shall not be terminated by any act of the Buyer or its successors or assigns or by operation of law.

(b) Seller hereby constitutes and appoints Georgina Sousa (the “ Seller Attorney-in-Fact ”) as its true and lawful attorney in fact with full power of substitution for it and in its name, place and stead or otherwise on behalf of Seller and its successors and assigns, and for the benefit of the Seller Attorney-in-Fact to demand and receive from time to time the Equity Interests conveyed by this Agreement (or intended so to be) and to execute in the name of Seller and its successors and assigns instruments of conveyance, instruments of further assurance and to give receipts and releases in respect of the same, and from time to time to institute and prosecute in the name of Seller for the benefit of the Seller Attorney-in-Fact, any and all proceedings at law, in equity or otherwise which the Seller Attorney-in-Fact may deem proper in order to (a) collect, assert or enforce any claims, rights or titles of any kind in and to the Equity Interests, (b) defend and compromise any and all actions, suits or proceedings in respect of any of the Equity Interests, and (c) do any and all such acts and things in furtherance of this Agreement as the Seller Attorney-in-Fact shall deem advisable. Seller hereby declares that the appointment hereby made and the powers hereby granted are coupled with an interest and are and shall be irrevocable and perpetual and shall not be terminated by any act of Seller or its successors or assigns or by operation of law.

Section 13.03 Headings; References; Interpretation . All Article and Section headings in this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of any of the provisions hereof. The words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement. All references herein to Articles and Sections shall, unless the context requires a different construction, be deemed to be references to the Articles and Sections of this Agreement, respectively. All personal pronouns used in this Agreement, whether used in the masculine, feminine or neuter gender, shall include all other genders, and the singular shall include the plural and vice versa. The use herein of the word “including” following any general statement, term or matter shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as “without limitation,” “but not limited to,” or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that could reasonably fall within the broadest possible scope of such general statement, term or matter.

Section 13.04 Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns.

Section 13.05 No Third Party Rights . The provisions of this Agreement are intended to bind the Parties as to each other and are not intended to and do not create rights in any other person or confer upon any other person any benefits, rights or remedies and no person is or is intended to be a third party beneficiary of any of the provisions of this Agreement.

Section 13.06 Counterparts . This Agreement may be executed in any number of counterparts, all of which together shall constitute one agreement binding on the Parties hereto.

Section 13.07 Governing Law . This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, United States of America, applicable to contracts made and to be performed wholly within such jurisdiction without giving effect to conflict of law principles thereof other than Section 5-1401 of the New York General Obligations Law, except to the extent that it is mandatory that the law of some other jurisdiction, wherein the Equity Interests are located, shall apply.

Section 13.08 Severability . If any of the provisions of this Agreement are held by any court of competent jurisdiction to contravene, or to be invalid under, the laws of any governmental body having jurisdiction over the subject matter hereof, such contravention or invalidity shall not invalidate the entire Agreement. Instead, this Agreement shall be construed as if it did not contain the particular provision or provisions held to be invalid, and an equitable adjustment shall be made and necessary provision added so as to give effect, as nearly as possible, to the intention of the Parties as expressed in this Agreement at the time of execution of this Agreement.

Section 13.09 Integration . This Agreement, the Schedules hereto and the instruments referenced herein supersede all previous understandings or agreements among the Parties, whether oral or written, with respect to its subject matter hereof. This Agreement, the Schedules hereto and the instruments referenced herein contain the entire understanding of the Parties with respect to the subject matter hereof and thereof. No understanding, representation, promise or agreement, whether oral or written, is intended to be or shall be included in or form part of this Agreement unless it is contained in a written amendment hereto executed by the Parties hereto after the date of this Agreement.

Section 13.10 No Broker’s Fees . No one is entitled to receive any finder’s fee, brokerage, or other commission in connection with the purchase of the Equity Interests or the consummation of the transactions contemplated by this Agreement.

Section 13.11 Notices . All notices, requests or consents provided for or permitted to be given pursuant to this Agreement must be in writing and must be given by depositing the same in the mail, addressed to the Person to be notified, postpaid, and registered or certified with return receipt requested or by delivering such notice in person or by private-courier, prepaid, or by telecopier to such party. Notice given by personal delivery or mail shall be effective upon actual receipt. Couriered notices shall be deemed delivered on the date the courier represents that delivery will occur. Notice given by telecopier shall be effective upon actual receipt if received during the recipient’s normal business hours, or at the beginning of the recipient’s next Business Day after receipt if not received during the recipient’s normal business hours. All notices to be sent to a Party pursuant to this Agreement shall be sent to or made at the address set forth below such Party’s signature to this Agreement, or at such other address as such Party may stipulate to the other Party in the manner provided in this Section 13.11.

[ SIGNATURE PAGE FOLLOWS ]

IN WITNESS HEREOF, each of the Parties hereto has caused this Agreement to be signed as of the date first above written.


SEADRILL LIMITED

By:		/s/ Fredrik Halvorsen
Name:		Fredrik Halvorsen
Title:		CEO

Address for Notice:

Par-la-Ville Place,
14 Par-la-Ville Road
Hamilton, HM08
Bermuda
Phone: (441) 295-6935
Fax: (441) 295-3494
Attention: Georgina Sousa

SEADRILL PARTNERS OPERATING LLC

By:		/s/ Rune Magnus Lundetræ
Name:		Rune Magnus Lundetræ
Title:		CFO

Address for Notice:

Par-la-Ville Place, 4th Floor
14 Par-la-Ville Road
Hamilton HM 08
Bermuda
Phone: (441) 295-6935
Fax: (441) 295-3494
Attention: Georgina Sousa

[ S IGNATURE P AGE TO

P URCHASE AND S ALE A GREEMENT ]

SCHEDULE A

INSURANCE

S CHEDULE A TO

P URCHASE AND S ALE A GREEMENT

A-1

EXHIBIT I

FORM OF LOAN AGREEMENT

E XHIBIT I TO

P URCHASE AND S ALE A GREEMENT

I-1

EXHIBIT II

FORM OF T-15 INTERCOMPANY LOAN AGREEMENT

E XHIBIT II TO

P URCHASE AND S ALE A GREEMENT

II-1

Exhibit 10.6

AMENDED AND RESTATED

REVOLVING LOAN AGREEMENT

dated as of August 31, 2013

among

Seadrill Operating LP,

Seadrill Capricorn Holdings LLC and

Seadrill Partners Operating LLC

as Borrowers

and

Seadrill Limited

as Lender

TABLE OF CONTENTS


ARTICLE I	DEFINITIONS; CONSTRUCTION	4

Section 1.1	Definitions	4

Section 1.2	Other Definitional Provisions	9

Section 1.3	Accounting Terms and Principles	9

ARTICLE II	AMOUNT AND TERMS OF THE LOANS	9

Section 2.1	Loan Commitment	9

Section 2.2	Borrowing Procedure	9

Section 2.3	Optional Reduction and Termination of Loan Commitment	10

Section 2.4	Repayment of Loans	10

Section 2.5	Prepayment	10

Section 2.6	Interest on Loans	10

Section 2.7	Computation of Interest	11

Section 2.8	Fees	11

Section 2.9	Evidence of Debt	11

Section 2.10	Payments Generally	11

Section 2.11	Taxes	12

Section 2.12	Illegality	12

Section 2.13	No Joint and Several Liability	12

ARTICLE III	CONDITIONS PRECEDENT TO LOANS	12

Section 3.1	Conditions to Effectiveness	12

Section 3.2	Conditions to Making of each Loan	13

ARTICLE IV	REPRESENTATIONS AND WARRANTIES	13

Section 4.1	Corporate Existence; Compliance with Law	13

Section 4.2	Power; Authorization; Enforceable Obligations	13

Section 4.3	No Legal Bar	14

Section 4.4	No Material Litigation	14

Section 4.5	No Default	14

Section 4.6	Use of Proceeds	14

ARTICLE V	COVENANTS	14

Section 5.1	Delivery of Financial Information	14


Section 5.2	Notice of Default	15

Section 5.3	Conduct of Business and Maintenance of Existence, etc	15

ARTICLE VI	EVENTS OF DEFAULT	15

Section 6.1	Events of Default	15

ARTICLE VII	MISCELLANEOUS	17

Section 7.1	Notices	17

Section 7.2	Waiver; Amendments	18

Section 7.3	Expenses; Indemnification	18

Section 7.4	Successors and Assigns	19

Section 7.5	Governing Law	19

Section 7.6	Counterparts; Integration	19

Section 7.7	Survival	19

Section 7.8	Severability	20

AMENDED AND RESTATED REVOLVING LOAN AGREEMENT

THIS AMENDED AND RESTATED REVOLVING LOAN AGREEMENT (this “ Agreement ”) is made and entered into as of August 31, 2013 by and among Seadrill Limited, a Bermuda company (the “ Lender ”) and Seadrill Operating LP, a Marshall Islands limited partnership (“ Seadrill Operating ”), Seadrill Capricorn Holdings LLC, a Marshall Islands limited liability company (“ Seadrill Capricorn ”), and Seadrill Partners Operating LLC, a Marshall Islands limited liability company (“ Seadrill Partners Operating ”, and together with Seadrill Operating and Seadrill Capricorn, the “ Borrowers ,” and each, a “ Borrower ”).

W I T N E S S E T H:

WHEREAS , the Lender, Seadrill Operating, and Seadrill Capricorn entered into a Revolving Loan Agreement, dated as of October 24, 2012 (the “ Existing Loan Agreement ”), pursuant to which the Lender agreed to make loans to Seadrill Operating and Seadrill Capricorn in an aggregate principal amount of up to $300,000,000 on the terms set forth therein;

WHEREAS , Seadrill Partners Operating wishes to become a borrower under the Existing Loan Agreement;

WHEREAS , the Lender, Seadrill Operating, Seadrill Capricorn, and Seadrill Partners Operating now wish to enter into this Agreement to amend and restate the Existing Loan Agreement at the time, and subject to the conditions, specified herein for the purpose of adding Seadrill Partners Operating as an additional borrower.

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

ARTICLE I

DEFINITIONS; CONSTRUCTION

Section 1.1 Definitions . The following terms used herein shall have the meanings herein specified (to be equally applicable to both the singular and plural forms of the terms defined):

“ Agreement ” shall have the meaning assigned to such term in the opening paragraph of this Agreement.

“ Applicable Margin ” shall mean 5% per annum.

“ Availability Period ” shall mean the period from and including the Closing Date to but excluding the earlier of the Maturity Date and the date of termination of the Loan Commitment.

“ Borrower Sublimit ” shall mean (a) with respect to Seadrill Operating, $250,000,000, (b) with respect to Seadrill Capricorn, $150,000,000, and (c) with respect to Seadrill Partners Operating, $150,000,000.

“ Borrower Affiliate ” shall mean each Borrower and each Subsidiary thereof.

“ Borrowers ” shall have the meaning assigned to such term in the opening paragraph of this Agreement.

“ Business Day ” shall mean a day other than a Saturday, Sunday or other day on which commercial banks in London are authorized or required by law to close.

“ Closing Date ” shall mean the “Closing Date” as defined in the Existing Loan Agreement.

“ Code ” shall mean the United States Internal Revenue Code of 1986, as amended from time to time.

“ Commitment Fee ” shall have the meaning assigned to such term in Section 2.8 .

“ Default ” means any of the events specified in Article VI , whether or not any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

“ Default Interest ” shall have the meaning set forth in Section 2.6(b) .

“ Default Interest Rate ” shall mean the Loan Interest Rate, plus an additional 2% per annum.

“ Dollars ” and “ $ ” shall mean the lawful currency of the United States of America.

“ Event of Default ” shall mean any of the events specified in Article VI , provided that any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

“ GAAP ” shall mean United States generally accepted accounting principles applied on a consistent basis.

“ Hedge Agreements ” shall mean all interest rate or currency swaps, caps or collar agreements, foreign exchange agreements, commodity contracts or similar arrangements entered into by each Borrower or its Subsidiaries providing for protection against fluctuations in interest rates, currency exchange rates, commodity prices or the exchange of nominal interest obligations, either generally or under specific contingencies.

“ Interest Period ” shall mean, with respect to each Loan, (a) initially, the period commencing on the borrowing date with respect to such Loan and ending three months

thereafter; and (b) thereafter, each period commencing on the last day of the immediately preceding Interest Period applicable to such Eurodollar Rate Loan and ending three months thereafter; provided that, all of the foregoing provisions relating to Interest Periods are subject to the following: (i) if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day; (ii) any Interest Period that would otherwise extend beyond the date final payment is due on the Loans, shall end on such due date, as applicable; and (iii) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period.

“ Lender ” shall have the meaning assigned to such term in the opening paragraph of this Agreement.

“ Lender Indemnitee ” shall mean Lender and each of the directors, officers, employees, agents, trustees, representatives, attorneys, consultants and advisors of or to Lender.

“ LIBOR ” shall mean, with respect to any Loan, the three (3) month LIBOR rate published in the Wall Street Journal two (2) Business Days before, as applicable, the initial or each subsequent Interest Period applicable to such Loan.

“ Loan ” shall have the meaning set forth in Section 2.1 .

“ Loan Commitment ” shall mean the obligation of the Lender to make Loans hereunder in an aggregate principal amount at any time outstanding not exceeding $300,000,000.

“ Loan Documents ” shall mean, collectively, this Agreement and each Notice of Borrowing.

“ Loan Interest Rate ” shall mean, with respect to any Loan, LIBOR applicable to such Loan plus the Applicable Margin.

“ Material Adverse Effect ” shall mean a material adverse effect on (a) the business, assets, liabilities, operations or condition (financial or otherwise) of each Borrower and its Subsidiaries taken as a whole, (b) the ability of each Borrower to perform its obligations under this Agreement or any other Loan Document, or (c) the ability of the Lender to enforce this Agreement or any other Loan Document.

“ Maturity Date ” shall mean October 24, 2017.

“ Notice of Borrowing ” shall have the meaning set forth in Section 2.2 .

“ Obligations ” shall mean, with respect to each Borrower, the unpaid principal of and interest on (including, without limitation, interest accruing after the maturity of the Loans of the Borrower and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) the Loans and all other obligations and liabilities of the Borrower to the Lender, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, any Loan Document.

“ Outstanding Amount ” shall mean with respect to Loans on any date, the aggregate principal amount of Loans outstanding on such date after giving effect to any borrowings and prepayments or repayments of Loans occurring on such date.

“ Quarterly Payment Date ” means the last day of March, June, September and December.

“ Repayment Date ” means, with respect to a Loan, the date falling six (6) months after the date of borrowing (or deemed borrowing) of such Loan or, if earlier, the Maturity Date.

“ Restatement Date ” shall have the meaning assigned to such term in Section 3.1.

“ Seadrill Capricorn ” shall have the meaning assigned to such term in the opening paragraph of this Agreement.

“ Seadrill Operating ” shall have the meaning assigned to such term in the opening paragraph of this Agreement.

“ Seadrill Partners Operating ” shall have the meaning assigned to such term in the opening paragraph of this Agreement.

Section 1.2 Other Definitional Provisions .

(a) Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the other Loan Documents or any certificate or other document made or delivered pursuant hereto or thereto.

(c) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

(d) The terms “Lender” shall include, without limitation, its successors.

ARTICLE II

AMOUNT AND TERMS OF THE LOANS

Section 2.1 Loan Commitment .

(a) Subject to the terms and conditions set forth herein, the Lender agrees to make revolving loans (each, a “ Loan ” and, collectively, the “ Loans ”) to each Borrower during the Availability Period in an aggregate principal amount at any time outstanding not to exceed the Loan Commitment, provided that the aggregate principal amount of Loans at any time outstanding to a Borrower shall not exceed the Borrower Sublimit of such Borrower.

(b) During the Availability Period, each Borrower shall be entitled to borrow, prepay or repay, and reborrow the Loans in accordance with the provisions hereof.

Section 2.2 Borrowing Procedure . Each Borrower shall give the Lender written notice (or telephonic notice promptly confirmed in writing) of each borrowing to be made

by such Borrower substantially in the form of Exhibit A (a “ Notice of Borrowing ”), each such Notice of Borrowing to be delivered prior to noon (London time) three (3) Business Days before the requested date of each borrowing. Each Notice of Borrowing shall be irrevocable and shall specify: (i) the aggregate principal amount of such borrowing (which shall be in an aggregate principal amount no less than $5,000,000 or any multiple of $1,000,000 in excess thereof) and (ii) the date of such borrowing (which shall be a Business Day).

Section 2.3 Optional Reduction and Termination of Loan Commitment .

(a) Upon three (3) Business Days’ written notice to the Lender signed by each Borrower, the Borrowers may terminate the Loan Commitment, or permanently reduce the Loan Commitment to an amount not less than the then Outstanding Amount of all Loans, provided that each partial reduction of the Loan Commitment shall be in integral multiples of $1,000,000 or more.

(b) Each reduction of the Loan Commitment shall be accompanied by a reduction of the Borrower Sublimit of each Borrower in the proportion the Borrower Sublimit of such Borrower bears to the aggregate Borrower Sublimits for all Borrowers.

Section 2.4 Repayment of Loans .

(a) Each Loan shall be repaid in full on the Repayment Date applicable to it. If no repayment is made on the Repayment Date for a Loan then such Loan shall be deemed to have been repaid by a further Loan in the same amount which shall be deemed to have been borrowed on the Repayment Date for the maturing Loan, and the interest rate for such further Loan shall be deemed to be reset at the Loan Interest Rate determined as of such Repayment Date.

(b) For the avoidance of doubt, this Section 2.4 only applies in respect of amounts due on Repayment Dates and not in respect of amounts due on the Maturity Date. On the Maturity Date, each Borrower shall repay any of its Loans then outstanding in full and shall additionally pay to the Lender all other sums, if any, then owing or accrued by it under this Agreement.

Section 2.5 Prepayment . Upon three (3) Business Days’ written notice from a Borrower to the Lender, such Borrower may voluntarily prepay in whole or in part its Loans without premium or penalty.

Section 2.6 Interest on Loans .

(a) Each Loan shall accrue interest at the Loan Interest Rate applicable to such Loan.

(b) Each Borrower shall pay interest due and payable on its Loans in arrears on each Quarterly Payment Date.

(c) While an Event of Default exists or after acceleration of the Loans in accordance with Article VI, at the option of the Lender, interest on the unpaid principal amount of the Loans of each Borrower (and any unpaid interest with respect thereto) will accrue at the Default Interest Rate (the “ Default Interest ”). All Default Interest will be payable by each Borrower upon demand by the Lender.

Section 2.7 Computation of Interest . All computations of interest shall be made by the Lender on the basis of a year of 360 days. Each determination by the Lender of an interest amount hereunder shall, except for manifest error, be final, conclusive and binding for all purposes.

Section 2.8 Fees . The Borrowers shall pay to the Lender, quarterly in arrears on each Quarterly Payment Date an unused commitment fee (the “ Commitment Fee ”) at the rate of 200 basis points per annum of the difference between (x) the Loan Commitment and (y) the average daily Outstanding Amount of all Loans during the immediately preceding calendar quarter (or other applicable shorter period). Each Borrower shall pay thirty-three and one-third percent (33 1/3%) of the Commitment Fee, provided that Commitment Fees accruing during the period prior to the Restatement Date, shall be paid fifty percent (50%) by Seadrill Operating and fifty percent (50%) by Seadrill Capricorn.

Section 2.9 Evidence of Debt . The Loans made by the Lender shall be evidenced by one or more accounts or records maintained by the Lender in the ordinary course of business. The accounts or records maintained by the Lender shall be conclusive absent manifest error of the amount of the Loans made by the Lender to each Borrower and the interest and payments thereon. Any failure so to record or any error in doing so shall not, however, limit or otherwise affect the obligation of each Borrower hereunder to pay any amount owing with respect to such Borrower’s Loans.

Section 2.10 Payments Generally .

(a) All payments by the Borrowers to the Lender hereunder shall be made to the Lender at the Payment Office in immediately available funds without setoff or counterclaim. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of the payment accruing interest, interest thereon shall be made payable for the period of such extension. All payments hereunder shall be made in Dollars.

Section 2.11 Taxes . Any and all payments by any Borrower under each Loan Document shall be made free and clear of and without deduction for any and all present or future Taxes. If any Taxes shall be required by law to be deducted from or in respect of any sum payable under any Loan Document to the Lender, then the Lender shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and the sum payable by the applicable Borrower shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings of Taxes applicable to additional sums payable under this Section) the Lender receives an amount equal to the sum it would have received had no such deduction or withholding been made.

Section 2.12 Illegality . Notwithstanding any other provision of this Agreement, if the Lender determines that it is unlawful for the Lender to make Loans or to continue to fund or maintain Loans, then, on notice thereof and demand therefor by the Lender to each Borrower, (i) the obligation of the Lender to make or to continue Loans shall be suspended, and (ii) if Loans are then outstanding, each Borrower shall immediately prepay such Loans.

Section 2.13 No Joint and Several Liability . For the avoidance of doubt, the liability of each Borrower under this Agreement is several and not joint and each Borrower shall be liable only for its Obligations (and not those of the other Borrower) under this Agreement.

ARTICLE III

CONDITIONS PRECEDENT TO LOANS

Section 3.1 Conditions to Effectiveness . The amendment and restatement of the Existing Loan Agreement contemplated by this Agreement shall not become effective until the date (such date, the “ Restatement Date ”) on which each of the following conditions is satisfied (or waived in accordance with Section 7.2):

(a) The Lender shall have received a counterpart of this Agreement signed by or on behalf of each Borrower.

(b) No Default or Event of Default shall exist on the Restatement Date.

(c) All representations and warranties of each Borrower set forth in the Loan Documents shall be true and correct in all material respects on and as of the Restatement Date.

Section 3.2 Conditions to Making of each Loan . The obligations hereunder of the Lender to make each Loan are subject to the satisfaction (or waiver in accordance with Section 7.2) of the following conditions as of the date each Loan is made:

(a) The Lender shall have received a signed Notice of Borrowing from the Borrower requesting the making of a Loan on the date specified therein (which shall be no later than the last day of the Availability Period).

(b) At the time of and immediately after giving effect to the making of the requested Loan, (i) the Outstanding Amount of the Loans of such Borrower shall not be in excess of its applicable Borrower Sublimit, and (ii) the aggregate Outstanding Amount of all Loans shall not be in excess of the Loan Commitment.

(c) At the time of and immediately after giving effect to the making of the requested Loan, no Default or Event of Default shall exist.

(d) At the time of and immediately after giving effect to the requested Loan, all representations and warranties of such Borrower set forth in the Loan Documents shall be true and correct in all material respects on and as of such date.

(e) The conditions referred to in Clause 3.1 shall previously have been satisfied.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

To induce the Lender to enter into this Agreement and to make each Loan, each Borrower hereby represents and warrants to the Lender for itself that:

Section 4.1 Corporate Existence; Compliance with Law . Such Borrower and each of its Subsidiaries (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (b) has the limited partnership, limited liability company, corporate or other power and authority, and the legal right, to own and operate its property and assets, to lease the property and assets it operates as lessee and to conduct the business in which it is currently engaged, and (c) is in compliance with all requirements of applicable law except, to the extent that the failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 4.2 Power; Authorization; Enforceable Obligations .

(a) Such Borrower has the power and authority, and the legal right, to make, deliver and perform the Loan Documents to which it is a party and to borrow hereunder. Such Borrower has taken all necessary action to authorize the execution, delivery and performance of the Loan Documents to which it is a party and, to authorize the borrowings on the terms and conditions of this Agreement.

(b) No consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority or any other Person is required to be obtained by such Borrower in connection with (i) the borrowings hereunder, (ii) the execution, delivery, validity or enforceability of this Agreement or any of the other Loan Documents, or (iii) the performance of this Agreement or any of the other Loan Documents, except, in each case, for routine consents, authorizations, filings and notices required to be made in the ordinary course of business.

(c) This Agreement has been, and, upon execution, each Loan Document shall have been, duly executed and delivered on behalf of such Borrower.

(d) This Agreement constitutes, and each other Loan Document upon execution will constitute, a legal, valid and binding obligation of such Borrower, enforceable against such Borrower in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).

Section 4.3 No Legal Bar . The execution, delivery and performance of this Agreement and the other Loan Documents by such Borrower, the borrowings hereunder and the use of the proceeds thereof will not violate any applicable law or any material agreement of such Borrower and will not result in, or require, the creation or imposition of any Lien on any of its properties or revenues pursuant to any requirement of applicable law or any such agreement.

Section 4.4 No Material Litigation . No litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of such Borrower, threatened by or against such Borrower or any Borrower Affiliate of such Borrower, or against any of its or their respective properties or revenues (a) with respect to any of the Loan Documents or any of the transactions contemplated hereby or thereby, or (b) that could reasonably be expected to have a Material Adverse Effect.

Section 4.5 No Default . No Default or Event of Default has occurred and is continuing.

Section 4.6 Use of Proceeds . The proceeds of each Loan shall be used solely for general corporate purposes which may include the funding of distributions.

ARTICLE V

COVENANTS

Section 5.1 Delivery of Financial Information . Each Borrower will deliver to the Lender such financial or other information in respect of its business and financial status as the Lender may reasonably require including, but not limited to, copies of its unaudited quarterly and annual financial statements.

Section 5.2 Notice of Default . Each Borrower shall promptly give notice to the Lender of the occurrence of any Default or Event of Default within five (5) Business Days after such Borrower knows or has reason to know thereof.

Section 5.3 Conduct of Business and Maintenance of Existence, etc . Each Borrower will (a) (i) preserve, renew and keep in full force and effect its corporate or other existence and (ii) take all reasonable action to maintain all rights, privileges and franchises necessary or desirable in the normal conduct of its business, to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and (b) comply with all agreements and requirements of applicable law, except to the extent that failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

ARTICLE VI

EVENTS OF DEFAULT

Section 6.1 Events of Default . If any of the following events shall occur and be continuing:

(a) Any Borrower shall fail to pay the principal of its Loans on the date when due (including the Maturity Date) in accordance with the terms hereof; or any Borrower shall fail to pay any interest on its Loans, or any other amount payable hereunder or under any other Loan Document, within three (3) Business Days after any such interest or other amount becomes due in accordance with the terms hereof or thereof; or

(b) Any representation or warranty made or deemed made by any Borrower herein or in any other Loan Document or that is contained in any certificate, document or financial or other statement furnished by it at any time under or in connection with this Agreement or any such other Loan Document shall prove to have been inaccurate in any material respect on or as of the date made or deemed made or furnished; or

(c) Any Borrower shall default in the observance or performance of any agreement contained in this Agreement to be performed by it (other than as provided in clause (a) of this Section 6.1 ), and such default shall continue unremedied for a period of 30 days after the earlier of (i) the date on which an officer of any Borrower becomes aware of such failure and (ii) the date on which written notice thereof shall have been given to any Borrower by the Lender; or

(d) (i) Any Borrower or any Borrower Affiliate shall fail to make any payment on any Indebtedness (other than the Obligations) of such Borrower or any such Borrower Affiliate or on any Guarantee Obligation in respect of Indebtedness of any other Person, and, in each case, such failure relates to Indebtedness having a principal amount of $25,000,000 or more, when the same becomes due and payable (whether by scheduled maturity, required prepayment,

acceleration, demand or otherwise) and the effect of such failure is to accelerate the maturity of such Indebtedness, (ii) any other event shall occur or condition shall exist under any agreement or instrument relating to any such Indebtedness, if the effect of such event or condition is to accelerate the maturity of such Indebtedness, (iii) any other event shall occur or condition shall exist under any agreement or instrument relating to any such Indebtedness, if the effect of such event or condition is to permit the acceleration of the maturity of such Indebtedness or (iv) any such Indebtedness shall become or be declared to be due and payable, or be required to be prepaid or repurchased (other than by a regularly scheduled required prepayment), prior to the stated maturity thereof; or

(e) (i) Any Borrower shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or any Borrower shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against any Borrower any case, proceeding or other action of a nature referred to in clause (i) above that (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of sixty (60) days; or (iii) there shall be commenced against any Borrower any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets that results in the entry of an order for any such relief that shall not have been vacated, discharged, or stayed or bonded pending appeal within sixty (60) days from the entry thereof; or (iv) any Borrower shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i) , (ii) , or (iii) above; or (v) any Borrower shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due;

then, and in any such event, (A) if such event is an Event of Default specified in clause (i) or (ii) of paragraph (e) above, (i) the Loan Commitment shall terminate immediately and the Loans (with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan Documents shall immediately become due and payable, and (B) if such event is any other Event of Default, the Lender may, by notice to each Borrower, terminate the Loan Commitment, whereupon the Loan Commitment shall terminate immediately, and declare the Loans (with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan Documents to be due and payable forthwith, whereupon the same shall immediately become due and payable.

ARTICLE VII

MISCELLANEOUS

Section 7.1 Notices .


To the Borrowers:		Seadrill Operating LP
		Building 11, 2 ^nd Floor
		Chiswick Business Park
		566 Chiswick High Road
		London W4 5YS
		United Kingdom
		Attn: Mr. Graham Robjohns

		Seadrill Capricorn Holdings LLC
		Building 11, 2 ^nd Floor
		Chiswick Business Park
		566 Chiswick High Road
		London W4 6YS
		United Kingdom
		Attn: Mr. Graham Robjohns

		Seadrill Partners Operating LLC
		Building 11, 2 ^nd Floor
		Chiswick Business Park
		566 Chiswick High Road
		London W4 5YS
		United Kingdom
		Attn: Mr. Graham Robjohns

To the Lender:		Seadrill Limited
		Par-la-Ville Place
		14 Par-la-Ville Road
		Hamilton HM08
		Bermuda
		Attn: Ms. Georgina Sousa

Any party hereto may change its address, telephone number or facsimile number for notices and other communications hereunder by notice to the other parties hereto. All such notices and other communications shall, when transmitted by overnight delivery, or faxed, be effective when delivered for overnight (next-day) delivery, or transmitted in legible form by facsimile machine, respectively, or if mailed, upon the third Business Day after the date deposited into the mail or if delivered, upon delivery.

(b) Effectiveness of Notices . All notices, demands, requests, consents and other communications described in Section 7.1(a) shall be effective (i) if delivered by hand, including any overnight courier service, upon personal delivery and (ii) if delivered by mail, when deposited in the mails.

Section 7.2 Waiver; Amendments . No amendment or waiver of any provision of this Agreement or any other Loan Document nor consent to any departure by any Borrower therefrom shall in any event be effective unless the same shall be in writing and (x) in the case of any such waiver or consent, signed by the Lender and (y) in the case of any other amendment, by the Lender and each Borrower, and then any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

Section 7.3 Expenses; Indemnification .

(a) The Borrowers shall be jointly and severally obligated to pay all out-of-pocket costs and expenses (including, without limitation, but limited to the reasonable fees, charges and disbursements of outside counsel for the Lender) incurred by the Lender in connection with the enforcement or protection of its rights in connection with this Agreement, including its rights under this Section 7.3 , including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of the Loans.

(b) The Borrowers shall be jointly and severally obligated to indemnify each Lender Indemnitee against, and hold each Lender Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Lender Indemnitee) incurred by any Lender Indemnitee or asserted against any Lender Indemnitee by any third party or by the Borrowers arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, or (ii) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrowers, and regardless of whether any Lender Indemnitee is a party thereto, provided that such indemnity shall not, as to any Lender Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final judgment to have resulted from the gross negligence or willful misconduct of such Lender Indemnitee or (y) result from a claim brought by the Borrowers against any Lender Indemnitee for breach in bad faith of such Lender Indemnitee’s obligations hereunder or under any other Loan Document, if the Borrowers have obtained a final judgment in their favor on such claim as determined by a court of competent jurisdiction.

(c) The Borrowers shall be jointly and severally obligated to pay, and hold the Lender harmless from and against, any and all present and future stamp, documentary, and other similar taxes with respect to this Agreement and any other Loan Documents, any collateral described therein, or any payments due thereunder, and save the Lender harmless from and against any and all liabilities with respect to or resulting from any delay or omission to pay such taxes.

(e) All amounts due under this Section 7.3 shall be payable promptly after written demand therefor.

Section 7.4 Successors and Assigns . The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrowers may not assign or otherwise transfer any of their rights or obligations hereunder, and the Lender may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Borrower. Any other attempted assignment or transfer by any party hereto shall be null and void. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby and, to the extent expressly contemplated hereby, each Lender Indemnitee) any legal or equitable right, remedy or claim under or by reason of this Agreement.

Section 7.7 Survival . All covenants, agreements, representations and warranties made by each Borrower herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the Lender and shall survive the execution and delivery of this Agreement and the making of the Loans. The provisions of Section 7.3 shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans or the termination of this Agreement or any provision hereof.

Section 7.8 Severability . Any provision of this Agreement or any other Loan Document held to be illegal, invalid or unenforceable in any jurisdiction, shall, as to such jurisdiction, be ineffective to the extent of such illegality, invalidity or unenforceability without affecting the legality, validity or enforceability of the remaining provisions hereof or thereof; and the illegality, invalidity or unenforceability of a particular provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

Section 7.9 Amendment and Restatement . Effective as of the Restatement Date, (i) this Agreement amends and restates the Existing Loan Agreement in its entirety and (ii) all Loans outstanding under the Existing Loan Agreement shall be deemed outstanding hereunder.

[ Signature Pages Follow ]

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


SEADRILL OPERATING LP,
as Borrower

By:	/s/ Rune Magnus Lundetræ
	Name:	Rune Magnus Lundetræ
	Title:	President

SEADRILL CAPRICORN HOLDINGS LLC, as Borrower

By:	/s/ Robert Hingley-Wilson
	Name:	Robert Hingley-Wilson
	Title:	Director

SEADRILL PARTNERS OPERATING LLC, as Borrower

By:	/s/ Rune Magnus Lundetræ
	Name:	Rune Magnus Lundetræ
	Title:	Director

SEADRILL LIMITED as Lender

By:	/s/ Kate Blankenship
	Name:	Kate Blankenship
	Title:	Director

EXHIBIT A

FORM OF NOTICE OF BORROWING

[DATE]

Seadrill Limited

[Address]

Dear Sirs:

Reference is made to that certain Amended and Restated Loan Agreement, dated as of July , 2013 (the “ Loan Agreement ”), by and among Seadrill Limited, a Bermuda company (the “ Lender ”) and Seadrill Operating LP, a Marshall Islands limited partnership (“ Seadrill Operating ”), Seadrill Capricorn Holdings LLC, a Marshall Islands limited liability company (“ Seadrill Capricorn ”), and Seadrill Partners Operating LLC, a Marshall Islands limited liability company (“ Seadrill Partners Operating ” and together with Seadrill Operating and Seadrill Capricorn, the “ Borrowers ”).

[Seadrill Operating] [Seadrill Capricorn] [Seadrill Partners Operating] hereby requests the following Loan under the Loan Agreement, and in that connection [Seadrill Operating] [Seadrill Capricorn] [Seadrill Partners Operating] specifies the following information with respect to such Loan:


(a)	Principal amount of Loan:	$[ ]

(b)	Date of Loan:	[ ]

[Seadrill Operating] [Seadrill Capricorn] [Seadrill Partners Operating] hereby certifies as follows:

(c) Immediately after giving effect to the making of the requested Loan, (i) the Outstanding Amount of the Loans of such Borrower is not in excess of its applicable Borrower Sublimit, and (ii) the aggregate Outstanding Amount of all Loans is not in excess of the Loan Commitment.

(d) At the time of and immediately after giving effect to the making of the requested Loan, no Default or Event of Default exists.

(e) At the time of and immediately after giving effect to the making of the requested Loan, all representations and warranties of such Borrower set forth in the Loan Documents are true and correct in all material respects on and as of such date.

IN WITNESS WHEREOF , the undersigned has caused this Notice of Borrowing to be executed on the date first written above.


[SEADRILL OPERATING LP]

[SEADRILL CAPRICORN HOLDINGS LLC]

[SEADRILL PARTNERS OPERATING LLC]

as Borrower

By:

		Name:

		Title:

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