Report of Foreign Issuer (6-k)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

__________________

Form 6-K

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REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2014

Commission File Number 001-35704

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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 quarterly period ended September 30, 2014

INDEX



	PAGE
Important Information Regarding Forward-Looking Statements	1
Management's Discussion and Analysis of Financial Condition and Results of Operations	3
Interim Financial Statements (Unaudited)
Unaudited Consolidated and Combined Carve-Out Statements of Operations for the three and nine months ended September 30, 2014 and 2013	F-1
Unaudited Consolidated and Combined Carve-Out Balance Sheets as of September 30, 2014 and December 31, 2013	F-2
Unaudited Consolidated and Combined Carve-Out Statements of Cash Flows for the nine months ended September 30, 2014 and 2013	F-3
Unaudited Consolidated and Combined Carve-Out Statement of Changes in Members' Capital for the nine months ended September 30, 2014 and 2013	F-4
Notes to the Unaudited Consolidated and Combined Carve-Out Financial Statements	F-5
EXHIBITS
SIGNATURES

IMPORTANT INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

This Report on Form 6-K for the quarterly period ended September 30, 2014 contains certain “forward-looking statements” (as such term is defined in Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events and the operations, performance and financial condition of Seadrill Partners LLC (“Seadrill Partners,” the “Company,” “we,” “us”), including statements concerning plans and objectives of the Company's management for future operations or economic performance, or assumptions related thereto. In addition, the Company and the Company's representatives may from time to time make other oral or written statements which are also forward-looking statements. Such statements include, in particular, statements about the Company's plans, strategies, business prospects, changes and trends in the Company's business, and the markets in which the Company operates. In some cases, you can identify the forward-looking statements by the use of words such as “may,” “could,” “should,” “would,” “expect,” “plan,” “anticipate,” “intend,” “forecast,” “believe,” “estimate,” “predict,” “propose,” “potential,” “continue” or the negative of these terms or other comparable terminology. These forward-looking statements reflect management’s current views only as of the date of this report and are not intended to give any assurance as to future results.

Forward-looking statements appear in a number of places in this report and include statements with respect to, among other things:


•	our distribution policy and our ability to make cash distributions on our units or any increases in distributions and the amount of such increases;


•	our ability to integrate and realize the expected benefits from any acquisitions;


•	our ability to borrow under the credit facility between OPCO (as defined herein), as borrower, and Seadrill Limited ("Seadrill"), as lender;


•	our ability to borrow under the revolving credit facility under the Amended Senior Secured Credit Facilities (as defined herein);


•	our 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 ability of our drilling units to perform satisfactorily or to our expectations;


•	fluctuations in the international price of oil, including cyclical changes in the range of such fluctuations over longer periods;


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


•	the development of alternative sources of fuel and energy;


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


•	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;


•	expected costs of maintenance or other work performed on our drilling units and any estimates of downtime;


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


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


•	increasing our ownership interest in OPCO;


•	delay in payments by, or disputes with our customers under our drilling contracts;


•	our ability to comply with, maintain, renew or extend our existing drilling contracts;


•	our ability to re-deploy our drilling units upon termination of 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 our drilling units or other drilling units 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;


•	competition in the offshore drilling industry and other actions of competitors, including decisions to deploy drilling units in the areas in which we currently operate;


•	the availability on a timely basis of drilling units, supplies, personnel and oil field services in the areas in which we operate;


•	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 common units or other securities 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.

Forward-looking statements in this report are made based upon management's current plans, expectations, estimates, assumptions and beliefs concerning future events impacting the Company and therefore involve a number of risks and uncertainties. The risks, uncertainties and assumptions involve known and unknown risks and are inherently subject to significant uncertainties and contingencies, many of which are beyond the Company's control. The Company cautions that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements.

The Company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for the Company to predict all of these factors. Further, the Company cannot assess the impact of each such factor on the Company's 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. The Company makes no prediction or statement about the performance of the Company's common units. The various disclosures included in this Report on Form 6-K and in the Company's other filings made with the Securities and Exchange Commission, or the SEC, that attempt to advise interested parties of the risks and factors that may affect the Company's business, prospects and results of operations should be carefully reviewed and considered.

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

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 LLC ("Seadrill Partners", the "Company", "we", "us") included in the Company's report on Form 20-F filed with the SEC on April 30, 2014. 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 United States generally accepted accounting principles (U.S. GAAP) and are presented in U.S. Dollars.

Overview

Seadrill Partners is a growth-oriented limited liability company formed by Seadrill Limited ("Seadrill") to own, operate and acquire offshore drilling units. Our drilling units are under long-term contracts with major oil companies such as Chevron, BP and ExxonMobil, and with large independents such as Tullow with an average remaining term of 3.5 years as of November 26, 2014.

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 owned 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 owned a 100% interest in the entities that own and operate the West Capricorn.

On May 17, 2013, the Company's wholly owned subsidiary, Seadrill Partners Operating LLC, acquired from Seadrill a 100% ownership interest in the entities that own and operate the tender rig T-15. In order to finance the acquisition, Seadrill Partners Operating LLC borrowed $109.5 million from Seadrill under a loan agreement.

On October 18, 2013, Seadrill Partners Operating LLC, acquired from Seadrill a 100% ownership interest in the entity that owns the tender rig T-16. As consideration for the purchase, the Company issued 3,310,622 common units to Seadrill.

On December 13, 2013, the Company completed the acquisition of the entities that own and operate the ultra-deepwater semi-submersible rigs, the West Sirius and West Leo. The West Sirius was acquired by Seadrill Capricorn Holdings LLC (51% owned by the Company) and the West Leo was acquired by Seadrill Operating LP (30% owned by the Company). In order to finance the acquisitions, the Company issued 12,880,000 common units to the public and 3,394,916 common units to Seadrill.

These transactions that occurred prior to the IPO and through December 31, 2013 described above, have been reflected as a reorganization of entities under common control and therefore the assets and liabilities acquired from Seadrill have been recorded at historical cost by the Company and the historical operating results have been retrospectively adjusted to include the results of the combined entities during the periods they were under common control of Seadrill. The effect of the adjusting the Company's financial statements to account for these common control transactions is included in Note 1 of the interim financial statements presented in this report.

As of January 2, 2014, the date of the Company's first annual general meeting, Seadrill ceased to control the Company in accordance with US GAAP and therefore Seadrill Partners and Seadrill are no longer deemed to be entities under common control.

On March 21, 2014, the Company completed the acquisition of the entities that own and operate the drillship, West Auriga. The West Auriga was acquired by Seadrill Capricorn Holdings LLC (51% owned by the Company). In order to finance the acquisition, the Company issued 11,960,000 common units to the public and 1,633,987 common units to Seadrill.

On June 24, 2014, the Company issued 6,100,000 common units to the public and 3,183,700 common units to Seadrill.

On September 23, 2014, the Company issued 8,000,000 common units to the public.

On November 4, 2014, Seadrill Capricorn Holdings LLC (51% owned by the Company) completed the acquisition of the entities that own and operate the drillship, West Vela from Seadrill (the “West Vela Acquisition”). The implied purchase price was $900.0 million, less $433.0 million of debt outstanding under the existing secured debt facility financing the West Vela. Under the terms of the West Vela contract, the customer is paying a daily rate of $565,000, plus approximately $44,000 per day as a mobilization fee paid over the term of the contract. In addition to the purchase price, Seadrill Capricorn Holdings LLC will pay Seadrill $40,000 per day of day rate revenue actually received, as well as the $44,000 per day mobilization fee. These payments to Seadrill will cease at the end of the current contract. The purchase price will also be adjusted based on the net working capital balance within the entities acquired as of the date of sale.

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

As of September 30, 2014, Seadrill owned 46.6% of the outstanding combined common and subordinated units of the Company.

Factors Affecting the Comparability of our Current and Future Results

•

The size of our fleet continues to change. Our consolidated and combined carve-out financial statements reflect changes in the size and composition of our fleet due to certain rig deliveries, contract commencement dates and acquisitions. For instance, we acquired the entities that own and operate the drilling units T-15, T-16, West Sirius and West Leo at various times in 2013, the West Auriga in March 2014 and the West Vela in November 2014. In addition, in July 2014 we purchased additional limited partner interests in Seadrill Operating LP. In the future, we or OPCO may grow through the acquisition of additional drilling units, or further ownership interests in OPCO, as part of our growth strategy.

•

Prior to January 2, 2014, the date of the Company's first annual general meeting (AGM), Seadrill had a controlling financial interest in the Company in accordance with US GAAP. During this period, drilling unit acquisitions from Seadrill, were accounted for as reorganization of entities under common control and as a result, the Company’s financial statements were retroactively adjusted to include the results of the combined entities during the periods it was under common control of Seadrill. From the date of the first AGM, Seadrill ceased to control the Company in accordance with US GAAP. As a result, the Company and Seadrill are no longer considered to be under common control and for acquisitions of drilling units from Seadrill after the date of the first AGM, such as the acquisition of the West Auriga and the West Vela, our financial statements will not be retroactively restated and the acquisition will be recognized at fair value rather than historical carryover basis as required under transactions between entities under common control.

•

We do not own all of the interests in OPCO. As a result, our available 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 available for distribution by us.

Basis of presentation

During 2013, OPCO acquired from Seadrill the entities that own and operate the T-15, T-16, West Leo and West Sirius. These transactions are deemed to be reorganization of entities under common control. As a result the Company’s balance sheets, statement of operations, cash flows and changes in members’ capital have been

retroactively adjusted in accordance with US GAAP to include the T-15, T-16, West Leo and West Sirius, as if the Company had acquired the entities that owned and operated these drilling units for the entire period that the entities have been under the common control of Seadrill. For the periods that have been retroactively adjusted, the financial statements have been prepared on a combined carved-out basis and include allocations as described in the Company's Consolidated and Combined Carve-Out Financial Statements for the year ended December 31, 2013 included in the Company's Form 20-F filed with the SEC on April 30, 2014.


A.	Operating Results

Three Months Ended September 30, 2014 compared to Three Months Ended September 30, 2013

The following table summarizes our operating results for the three months ended September 30, 2014 and 2013:



($ in millions)	Three months ended September 30,						Increase/Decrease
	2014			2013			$			%
Operating revenues
Contract revenues	$	327.5		$	265.4		$	62.1		23.4	%
Reimbursable revenues	7.0			3.4			3.6			105.9	%
Other revenues	0.0			0.6			(0.6		)	(100.0	)%
Total operating revenues	334.5			269.4			65.1			24.2	%

Operating expenses
Vessel and rig operating expenses	115.4			97.2			18.2			18.7	%
Reimbursable expenses	6.8			3.1			3.7			119.4	%
Depreciation and amortization	47.6			35.7			11.9			33.3	%
General and administrative expenses	11.1			15.4			(4.3		)	(27.9	)%
Total operating expenses	180.9			151.4			29.5			19.5	%

Operating income	153.6			118.0			35.6			30.2	%

Financial items
Interest income	0.8			0.8			—			—	%
Interest expense	(35.3		)	(23.3		)	(12.0		)	51.5	%
Gain/(loss) on derivative financial instruments	0.5			(11.8		)	12.3			(104.2	)%
Foreign currency exchange (loss)/gain	(2.0		)	1.3			(3.3		)	(253.8	)%
Total financial items	(36.0		)	(33.0		)	(3.0		)	9.1	%

Income before income taxes	117.6			85.0			32.6			38.4	%

Income taxes	(11.3		)	(6.7		)	(4.6		)	68.7	%
Net income	$	106.3		$	78.3		$	28.0		35.8	%

Net income attributable to Seadrill Partners LLC members	$	54.0		$	25.4		$	28.6		112.6	%
Net income attributable to the non-controlling interest	$	52.3		$	52.9		$	(0.6	)	(1.1	)%

Contract Revenues

Contract revenue increased by $62.1 million, or 23.4%, to $327.5 million, for the three months ended September 30, 2014, from $265.4 million for the three months ended September 30, 2013. The increase was primarily due to contract revenues from the West Auriga, which was acquired by the Company on March 21, 2014, and contract revenues from the tender rigs, T-15 and T-16, which did not begin operations until July and September 2013, respectively, and a higher dayrate for the West Capella starting in April 2014. In addition, contract revenue was lower in the three months ended September 30, 2013 due to a settlement agreement reached in the third quarter of 2013 with Exxon Mobil for non-payment of 37 days during the mobilization period as a result of the time required for the West Aquarius to complete modifications and repairs in order to meet the regulatory requirements for operations in Canadian waters. The revenue increase was partially offset by lower revenues for the West Capricorn due to lower utilization.

The following table summarizes our fleet's average daily revenues and economic utilization percentage by drilling unit type for the periods presented:



		Three months ended September 30,
		2014				2013
	Number of rigs / ships	Average Daily Revenues (USD)(1)		Economic Utilization(2)		Average Daily Revenues (USD) (1)		Economic Utilization(2)

Semi‑submersible rigs	4		$485,000	87.0	%		$459,000	82.0	%
Drillships	2		$557,000	95.0	%		$598,000	99.0	%
Tender rigs	3		$181,000	98.0	%		$155,000	100.0	%


(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 revenues increased by $3.6 million or 105.9%, to $7.0 million for the three months ended September 30, 2014, from $3.4 million for the three months ended September 30, 2013. The increase was due to additional equipment purchased on behalf of customers, for which we have been reimbursed.

Other revenues

Other revenues decreased by $0.6 million, or 100.0% to zero, for the three months ended September 30, 2014, from $0.6 million for the three months ended September 30, 2013. During the three months ended September 30, 2013, we earned other revenues within our Nigerian service company billed to Seadrill for certain services, including the provision of onshore and offshore personnel, which we provided to Seadrill’s West Polaris drilling rig. There were no such services provided in 2014.

Vessel and Rig Operating Expenses

Vessel and rig operating expenses increased by $18.2 million, or 18.7%, to $115.4 million for the three months ended September 30, 2014, from $97.2 million for the three months ended September 30, 2013. The increase was primarily due to operating costs related to the West Auriga which was acquired on March 21, 2014, and the tender rigs, T-15 and T16, which began operations in the third quarter of 2013. The increases were partially offset by lower operating expenses for the West Capella and West Sirius including lower charges from Seadrill and lower maintenance costs.

Reimbursable Expenses

Reimbursable expenses increased by $3.7 million, or 119.4%, to $6.8 million for the three months ended September 30, 2014, from $3.1 million for the three months ended September 30, 2013. The increase was due to additional equipment purchased on behalf of customers, for which we have been reimbursed.

Depreciation and Amortization

Depreciation and amortization expenses increased by $11.9 million, or 33.3%, to $47.6 million for the three months ended September 30, 2014, from $35.7 million for the three months ended September 30, 2013. The increase was primarily driven by the acquisition of West Auriga on March 21, 2014, and depreciation relating to the T-15 and T-16 which had lower depreciation expense in the comparative period as they began operations during the third quarter of 2013.

General and Administrative Expenses

General and administrative expenses decreased by $4.3 million, or 27.9%, to $11.1 million for the three months ended September 30, 2014, from $15.4 million for the three months ended September 30, 2013. The decrease was a result of lower administrative management fees charged by Seadrill during the three months ended September 30, 2014.

Interest Expense

Interest expense increased by $12.0 million, or 51.5%, to $35.3 million for the three months ended September 30, 2014, from $23.3 million for the three months ended September 30, 2013. The increase was due to an increase in average outstanding debt, primarily related to the acquisition of the West Auriga, and increased borrowings related to the West Aquarius, West Capricorn, West Capella, West Leo and West Sirius.

Other Financial Items

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



(US$ millions)	Three months ended September 30,
	2014			2013

Interest income	$	0.8		$	0.8
Gain/(loss) on derivative financial instruments	0.5			(11.8		)
Foreign currency exchange (loss)/gain	(2.0		)	1.3
Total other financial items	$	(0.7	)	$	(9.7	)

Total other financial items decreased by $9.0 million to a loss of $0.7 million in the three months ended September 30, 2014, compared to a loss of $9.7 million for the three months ended September 30, 2013. The change was primarily driven by a net gain from derivative instruments of $0.5 million in the three months ended September 30, 2014 compared to a loss of $11.8 million in the three months ended September 30, 2013, due to changes in the fair value of interest rate swaps held in relation to variable rate debt. As of September 30, 2014, $3,156.8 million,which represents 97.5% of the total debt obligations of the Company, had associated interest rate swap agreements.

Income Taxes

Income taxes increased by $4.6 million, or 68.7%, to $11.3 million for the three months ended September 30, 2014, from $6.7 million for the three months ended September 30, 2013. The increase was primarily related to the operations of the T-15 and T-16, which were not operating for the full quarter in the three months ended September 30, 2013, and due to the acquisition of the West Auriga on March 21, 2014.

Net income attributable to Seadrill Partners LLC members

Net income attributable to Seadrill Partners LLC members increased by $28.6 million, or 112.6% , from $25.4 million for the three months ended September 30, 2013, to $54.0 million for the three months ended September 30, 2014. This was due to a 35.8% increase in net income and a reduction in the proportion of income attributable to non-controlling interest as a result of the Company's purchase of an additional 28% limited partner interest in Seadrill Operating LP on July 21, 2014.

Net income attributable to non-controlling interest

Net income attributable to non-controlling interest decreased by $0.6 million, or 1.1% , to $52.3 million primarily due to the acquisition of an additional 28% limited partner interest in Seadrill Operating LP.

Nine Months Ended September 30, 2014 compared to nine months ended September 30, 2013

The following table summarizes our operating results for the nine months ended September 30, 2014 and 2013:



($ in millions)	Nine months ended September 30,						Increase/Decrease
	2014			2013			$			%
Operating revenues
Contract revenues	$	927.7		$	768.0		$	159.7		20.8	%
Reimbursable revenues	28.4			11.4			17.0			149.1	%
Other revenues	0.0			5.8			(5.8		)	(100.0	)%
Total operating revenues	956.1			785.2			170.9			21.8	%

Operating expenses
Vessel and rig operating expenses	307.6			279.3			28.3			10.1	%
Reimbursable expenses	27.2			10.7			16.5			154.2	%
Depreciation and amortization	142.2			103.7			38.5			37.1	%
General and administrative expenses	33.3			38.3			(5.0		)	(13.1	)%
Total operating expenses	510.3			432.0			78.3			18.1	%

Operating income	445.8			353.2			92.6			26.2	%

Financial items
Interest income	2.7			2.2			0.5			22.7	%
Interest expense	(101.5		)	(63.5		)	(38.0		)	59.8	%
(Loss)/gain on derivative financial instruments	(76.5		)	33.8			(110.3		)	(326.3	)%
Foreign currency exchange (loss)/gain	(1.3		)	0.2			(1.5		)	(750.0	)%
Total financial items	(176.6		)	(27.3		)	(149.3		)	546.9	%

Income before income taxes	269.2			325.9			(56.7		)	(17.4	)%

Income taxes	(24.8		)	(24.2		)	(0.6		)	2.5	%
Net income	$	244.4		$	301.7		$	(57.3	)	(19.0	)%

Net income attributable to Seadrill Partners LLC members	$	105.0		$	102.3		$	2.7		2.6	%
Net income attributable to the non-controlling interest	$	139.4		$	199.4		$	(60.0	)	(30.1	)%

Contract Revenues

Contract revenue increased by $159.7 million, or 20.8%, to $927.7 million, for the nine months ended September 30, 2014, from $768.0 million for the nine months ended September 30, 2013. The increase was primarily due to the acquisition of the West Auriga in March 2014, contract revenues from the tender rigs, T-15 and T-16 which did not begin operations until the third quarter of 2013, and a higher dayrate for the West Capella starting in April 2014. In addition, contract revenue was lower in the nine months ended September 30, 2013 due to a settlement agreement reached in the third quarter of 2013 with Exxon Mobil for non-payment of 37 days during the mobilization period as a result of the time required for the West Aquarius to complete modifications and repairs in order to meet the regulatory requirements for operations in Canadian waters. The increase was partially offset by lower revenues from the West Aquarius due to significant downtime as a result of equipment failures, as well as lower revenues for the West Capricorn due to lower utilization.

The following table summarizes our fleet's average daily revenues and economic utilization percentage by drilling unit type for the periods presented:



		Nine months ended September 30,
		2014				2013
	Number of rigs / ships	Average Daily Revenues (USD)(1)		Economic Utilization(2)		Average Daily Revenues (USD)		Economic Utilization(2)

Semi‑submersible rigs	4		$472,000	83.7	%		$486,000	89.0	%
Drillships	2		$585,000	98.3	%		$574,000	96.0	%
Tender rigs	3		$176,000	97.0	%		$190,000	100.0	%


(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 revenues increased by $17.0 million, or 149.1%, to $28.4 million for the nine months ended September 30, 2014, from $11.4 million in the nine months ended September 30, 2013. The increase was mainly due to certain client-requested upgrades to the West Aquarius, along with other additional equipment purchased on behalf of customers, for which we have been reimbursed.

Other revenues

Other revenues decreased by $5.8 million, to zero, for the nine months ended September 30, 2014, from $5.8 million for the nine months ended September 30, 2013. During the nine months ended September 30, 2013, we earned other revenues within our Nigerian service company billed to Seadrill for certain services, including the provision of onshore and offshore personnel, which we provided to Seadrill’s West Polaris drilling rig. There were no such services provided during the nine months ended September 30, 2014.

Vessel and Rig Operating Expenses

Vessel and rig operating expenses increased by $28.3 million, or 10.1%, to $307.6 million in the nine months ended September 30, 2014, from $279.3 million in the nine months ended September 30, 2013. This increase was primarily due to the operating costs related to the West Auriga which was acquired on March 21, 2014, and the tender rigs T-15 and T-16, which began operations in the third quarter of 2013. The increases were partially offset by lower operating expenses for the West Aquarius in the nine months ended September 30, 2014, including lower bareboat rental expense with a Seadrill entity, accrued insurance recoveries as a result of equipment failures, as well as costs in the comparable period being higher as a result of start-up costs in Canada.

Reimbursable Expenses

Reimbursable expenses increased by $16.5 million, to $27.2 million for the nine months ended September 30, 2014, from $10.7 million in the nine months ended September 30, 2013. The increase relates to the increase in reimbursable revenues described above.

Depreciation and Amortization

Depreciation and amortization expenses increased by $38.5 million, or 37.1%, to $142.2 million for the nine months ended September 30, 2014, from $103.7 million for the nine months ended September 30, 2013. The increase was due to the acquisition of the West Auriga on March 21 2014, and the T-15 and T-16, which began operations in the third quarter of 2013, as well as accelerated depreciation related to certain replaced equipment on the West Aquarius.

General and Administrative Expenses

General and administrative expenses decreased by $5.0 million, or 13.1%, to $33.3 million for the nine months ended September 30, 2014, from $38.3 million for the nine months ended September 30, 2013 as a result of lower administrative management fees charged by Seadrill.

Interest Expense

Interest expense increased by $38.0 million, or 59.8%, to $101.5 million for the nine months ended September 30, 2014, from $63.5 million for the nine months ended September 30, 2013. The increase was due was due to an increase in average outstanding debt, primarily related to the acquisition of the West Auriga, T-15 and T-16, and increased borrowings related to the West Aquarius, West Capricorn, West Capella, West Leo and West Sirius. The Company also recognized accelerated amortization of loan fees during the nine months ended September 30, 2014, as a result of the term loan refinancing during 2014.

Other Financial Items

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



(US$ millions)	Nine months ended September 30,
	2014			2013

Interest income	$	2.7		$	2.2
(Loss)/gain on derivative financial instruments	(76.5		)	33.8
Foreign currency exchange (loss)/gain	(1.3		)	0.2
Total other financial items	$	(75.1	)	$	36.2

Other financial items decreased by $111.3 million to a loss of $75.1 million in the nine months ended September 30, 2014, from a gain of $36.2 million in the same period in 2013. The change was mainly driven by a loss from derivative instruments of $76.5 million in the nine months ended September 30, 2014 compared to a gain of $33.8 million in the nine months ended September 30, 2013. The majority of the loss is unrealized and relates to adverse movements on the mark to market valuation of the Company's interest rate swaps on variable rate debt. The Company has entered into swap agreements which fix the variable element of the interest on the Senior Secured Credit Facilities entered into during the nine months ended September 30, 2014. As of September 30, 2014, $3,156.8 million , which represents 97.5% of the total debt obligations of the Company, had associated interest rate swap agreements.

Income Taxes

Income taxes increased $0.6 million, or 2.5%, to $24.8 million for the nine months ended September 30, 2014, from $24.2 million for the nine months ended September 30, 2013. The increase primarily relates to the contribution of taxable income from operations of the West Auriga, T-15 and T-16, which were not operating for the full period in the nine months ended September 30, 2013.

Net income attributable to Seadrill Partners LLC members

Net income attributable to Seadrill Partners LLC members increased by $2.7 million , or 2.6% , from $102.3 million for the three months ended September 30, 2013, to $105.0 million for the three months ended September 30, 2014. This was due to the net impact of a reduction in net income of $57.3 million, offset by a reduction in the proportion of income attributable to non-controlling interest as a result of the Company's purchase of an additional 28% limited partner interest in Seadrill Operating LP on July 21, 2014.

Net income attributable to non-controlling interest

Net income attributable to non-controlling interest decreased by $60.0 million, or 30.1%, to $139.4 million, primarily due to the acquisition of an additional 28% limited partner interest in Seadrill Operating LP.

B. Liquidity and Capital Resources

Liquidity and Cash Needs

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

The Company's operating agreement requires it to distribute its available cash each quarter. In determining the amount of cash available for distribution, the Company's board of directors determines the amount of cash reserves

to set aside, including reserves for future maintenance capital expenditures, working capital and other matters. Because of the substantial capital expenditures we are required to make to maintain our current fleet, our annual estimated maintenance and replacement capital expenditures are estimated to be $159.7 million per year as of September 30, 2014, which is comprised of $62.9 million for long term maintenance and society classification surveys and $96.8 million, including financing costs, for replacing our existing rigs at the end of their useful lives.

As of September 30, 2014, our cash and cash equivalents were $447.3 million, compared to $89.7 million as of December 31, 2013. In connection with the closing of our IPO, OPCO entered into a five year $300.0 million revolving credit facility with Seadrill as the lender, which we refer to as the sponsor credit facility. This was reduced to $100.0 million following a refinancing in February 2014, where the Company also entered into a five-year $100.0 million revolving credit facility with a syndicate of external banks. As of September 30, 2014, the outstanding balance on both of these facilities was zero. The Company believes its current resources, including the potential borrowings under these revolving credit facilities, are sufficient to meet its working capital requirements for its current business for at least the next twelve months. Generally, the Company's 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.

Cash Flows

Net cash provided by operating activities was $439.6 million and $349.9 million for the nine months ended September 30, 2014 and 2013, respectively. The increase is primarily due to increased revenues offset by higher operating expenses and an increase in non-cash items mainly depreciation and unrealized losses on derivative financial instruments.

Net cash used in investing activities was $1,052.1 million and $137.8 million for the nine months ended September 30, 2014 and 2013, respectively. The change primarily relates to the $672.6 million cash consideration, net of cash acquired, paid to acquire the entities that own and operate West Auriga from Seadrill, and the purchase of an additional 28% limited partnership share in Seadrill Operating LP. The increase was partially offset by a decrease in additions to newbuilds of $131.8 million primarily due to additions related to T-15 and T-16 in the nine months ended September 30, 2013.

Net cash provided by financing activities was $970.1 million and net cash used in financing activities was $157.7 million during the nine months ended September 30, 2014 and 2013, respectively. For the nine months ended September 30, 2014, net cash provided by financing activities of $970.1 million relates primarily to net proceeds from external long term debt of $2,825.4 million (Senior Secured Credit Facilities), proceeds from the issuance of common units of $937.8 million and proceeds from issuance of units by Seadrill Capricorn Holdings LLC to Seadrill of $341.5 million. These inflows were partly offset by repayments of long term related party debt of $1,578.4 million which was refinanced by the Senior Secured Credit Facilities, repayments of long term debt of $462.1 million, repayment of the related party revolving credit facility of $125.9 million, repayments of related party discount notes of $399.9 million and cash distributions of $568.3 million.

Borrowing Activities

Rig Financing Agreements

Seadrill financed the acquisitions of the drilling units in OPCO’s fleet with borrowings under third party credit facilities. In connection with our IPO and subsequent acquisitions from Seadrill, Seadrill amended and restated the various third party facilities to allow for the transfer of the respective drilling units to OPCO and to provide for OPCO and its subsidiaries that, directly or indirectly, own the drilling units to guarantee the obligations under the facilities.

In September 2012, each of OPCO’s subsidiaries that owns the West Capricorn, West Vencedor, West Aquarius, and West Capella, or the rig owning subsidiaries, entered into intercompany loan agreements with Seadrill in the amount of approximately $522.5 million, $115.2 million, $304.6 million and $295.3 million respectively, corresponding to the aggregate principal amount outstanding under the facilities allocable to the West Capricorn, West Vencedor, West Aquarius, and West Capella respectively.

During 2013, the rig owning companies of the T-15, T-16, West Leo and West Sirius entered into intercompany loan agreements with Seadrill in the amount of approximately $100.5 million, $93.1 million, $485.5 million and $220.1 million respectively, corresponding to the aggregate principal amount outstanding under the facilities allocable to the T-15, T-16, West Leo and West Sirius, respectively.

Pursuant to these intercompany loan agreements, each rig owning subsidiary can make payments of principal and interest to Seadrill or directly to the third party lenders under each facility.

The Company refers to the West Vencedor Facility, T-15 and T-16 Facility, and, prior to their repayment and refinancing in February and June 2014, the West Capella, West Aquarius, West Sirius, West Leo and West Capricorn facilities, collectively, as the Rig Facilities.

The repayment and refinancing of the facilities in February and June 2014 relating to the West Capella, West Aquarius, West Sirius, West Leo, West Capricorn and West Auriga is described below.

Amended Senior Secured Credit Facilities

On February 21, 2014, Seadrill Operating LP, Seadrill Capricorn Holdings LLC, and Seadrill Partners Finco LLC (the “Borrowers”), entered into Senior Secured Credit Facilities (the “Senior Secured Credit Facilities”). The Senior Secured Credit Facilities consist of (i) a $100.0 million revolving credit facility (the “revolving facility”), and (ii) a $1.8 billion term loan (the “term loan”) which was borrowed by Seadrill Operating LP in full on February 21, 2014. The proceeds from the transaction were used to (a) refinance the West Capella, West Aquarius, West Sirius and West Leo rig facilities, (b) repay in part unsecured loans from Seadrill, (c) add cash to the balance sheet in support of general company purposes and (d) pay all fees and expenses associated therewith.

On June 26, 2014, the Senior Secured Credit Facilities were amended ("Amended Senior Secured Credit Facilities") for the borrowing by Seadrill Operating LP of $1.1 billion of additional term loans in addition to the term loans already outstanding under the Senior Secured Credit Facilities as noted above. The proceeds from the additional $1.1 billion billion of term loans were used to (a) refinance debt secured by West Auriga of $443.1 million and West Capricorn of $426.3 million, (b) repay certain unsecured loans from Seadrill, (c) add cash to our balance sheet for general company purposes and (d) pay all fees and expenses associated with the Amended Senior Secured Credit Facilities.

The Amended Senior Secured Credit Facilities are guaranteed on a senior secured basis by the Borrowers and the Borrowers’ subsidiaries that own or charter the West Capella, West Aquarius, West Sirius, West Leo, West Capricorn and West Auriga. The Amended Senior Secured Credit Facilities also are secured by mortgages on the six drilling units, security interests on the earnings, earnings accounts, and insurances owned by the subsidiary guarantors relating to the six drilling units, and pledges of the equity interests of each subsidiary guarantor.

Loans under the Amended Senior Secured Credit Facilities will bear interest, at the Company's option, at a rate per annum equal to either the LIBOR Rate (subject to a 1% floor) for interest periods of one, two, three or six months plus the applicable margin or the Base Rate plus the applicable margin. The Base Rate is the highest of (a) the prime rate of interest announced from time to time by the agent bank as its prime lending rate, (b) 0.5% per annum above the Federal Funds rate as in effect from time to time, (c) the Eurodollar Rate for 1-month LIBOR as in effect from time to time plus 1.0% per annum, and (d) for term loans only, 2.0% per annum. The applicable margin is 2.0% for term loans bearing interest at the Base Rate and 3.0% for term loans bearing interest at the Eurodollar Rate. The applicable margin is 1.25% for revolving loans bearing interest at the Base Rate and 2.25% for revolving loans bearing interest at the Eurodollar Rate. In addition, the Company will incur a commitment fee based on the unused portion of the revolving facility of 0.5% per annum.

The Company has entered into interest rate swap transactions to hedge 100% of the variable element of the term loan facility at a weighted average fixed rate of 2.49% per annum. A variable rate option included in the swap provides that the hedge counterparty shall pay the greater of 1.0% or 3 Month LIBOR. Thus, where the variable rate is less than 1%, the variable rate payment shall be deemed to be equal to 1%.

The term loan matures on February 21, 2021. Amortization payments in the amount of 0.25% of the original term loan amount are required to be paid on the last day of each calendar quarter. The revolving facility matures on February 21, 2019 and does not amortize. The Company is required to make mandatory prepayments of term loans using proceeds from asset sales that are not otherwise utilized for permitted purposes and to make offers to purchase term loans using proceeds of loss events that are not otherwise utilized for permitted purposes.

As of September 30, 2014, the outstanding balance of the term loan was $2,881.0 million, and the $100.0 million revolving credit facility was not yet drawn.

$1,450 million Senior Secured Credit Facility

The entity which owns the the West Auriga, was a borrower under the $1,450 million senior secured credit facility relating to the West Auriga, the West Vela and one other drilling unit owned by Seadrill. Upon closing of the West Auriga acquisition, the entity that owns the West Auriga owed $443.1 million under the facility. This amount was repaid in June 2014 with proceeds from the Amended Senior Secured Credit Facilities discussed above. The entity which owns the West Vela is a borrower under the $1,450 million senior secured credit facility. Upon the closing of the West Vela Acquisition, the entity that owns the West Vela owed $433 million under this facility.

Revolving Credit Facility

In connection with the closing of the Company's IPO on October 24, 2012, OPCO entered into a $300.0 million revolving credit facility, with Seadrill as the lender. On March 1, 2014, the related party revolving credit facility was amended to reduce the maximum borrowing limit to $100.0 million. As of September 30, 2014, the outstanding balance under the facility was zero.

$229.9 million Discount Note

On December 13, 2013, as part of the acquisition of the West Sirius, Seadrill Capricorn Holdings issued a zero coupon discount note to Seadrill in an initial amount of $229.9 million. The note was repayable in June 2015 and upon maturity, the Company was due to pay $238.5 million to Seadrill. The note was repaid in full in February 2014 with proceeds from the Senior Secured Credit Facilities as further discussed above.

$70.0 million Discount Note

On December 13, 2013, as part of the acquisition of the West Sirius, the Company issued a zero coupon discount note to Seadrill in an initial amount of $70.0 million. The note was repayable in June 2015 and upon maturity, the Company was due to pay $73.0 million to Seadrill. The note was repaid in full in February 2014 with the proceeds from the Senior Secured Credit Facilities as further discussed above.

$109.5 million Vendor Financing Loan Agreement

In May 2013, the Company borrowed from Seadrill $109.5 million as vendor financing to fund the acquisition of the T-15. The loan bears interest of LIBOR plus a margin of 5% and is due in May 2016.

$100.0 million Discount Note

In March 2014, as part of the acquisition of the West Auriga, Seadrill Capricorn Holdings issued a zero coupon discount note to Seadrill in an initial amount of $100.0 million. The note was repayable in September 2015 and upon maturity, the Company was due to pay $103.7 million to Seadrill. This note was repaid in June 2014 with proceeds from the Amended Senior Secured Credit Facilities as further discussed above.

Restrictive Covenants

The Company's facilities and related party loan agreements include financial and non-financial covenants applicable to the Company and Seadrill. These covenants are described in Note 12 to the Company's Consolidated and Combined Carve-Out Financial Statements for the year ended December 31, 2013 included in the Company's Form 20-F filed with the SEC on April 30, 2014. Financing agreements entered into during the nine months ended September 30, 2014 are discussed further below. The Company and Seadrill were in compliance with the related covenants as of September 30, 2014 and December 31, 2013.

Amended Senior Secured Credit Facilities

Our subsidiaries that are borrowers or guarantors of our Amended Senior Secured Credit Facilities are subject to certain financial and restrictive covenants contained in our Amended Senior Secured Credit Facilities including the following:


•	Limitations on the incurrence of indebtedness and issuance of preferred equity;


•	Limitations on the incurrence of liens;


•	Limitations on dividends and other restricted payments;


•	Limitations on investments;


•	Limitations on mergers, consolidation and sales of all or substantially all assets;


•	Limitations on asset sales;


•	Limitations on transactions with affiliates;


•	Limitation on business activities to businesses similar to those now being conducted; and


•	Requirement to maintain a senior secured net leverage ratio of no more than 5.5 to 1.0 (5.0 to 1.0 for the quarter ending March 31, 2015 and thereafter).

In addition, the Amended Senior Secured Credit Facilities contain other customary terms, including the following events of default (subject to customary grace periods), upon the occurrence of which, the loans may be declared (or in some cases automatically become) immediately due and payable:


•	Failure of any borrow of the term loan to pay principal, interest or other amounts owing with respect to the loans under the Amended Senior Secured Credit Facilities;


•	Breach in any material respect of any representation or warranty contained in Amended Senior Secured Credit Facilities documentation;


•	Breach of any covenant contained in Amended Senior Secured Credit Facilities documentation;


•	The occurrence of a payment default under, or acceleration of, any indebtedness aggregating $25.0 million or more other than the term loan;


•	Failure by our subsidiaries that are borrowers or guarantors of our Amended Senior Secured Credit Facilities to pay or stay any judgment in excess of $25.0 million;


•	Repudiation by our subsidiaries that are borrowers or guarantors of our Amended Senior Secured Credit Facilities of any guarantee or collateral documents related to the Amended Senior Secured Credit Facilities;


•	Any guarantee related to the Amended Senior Secured Credit Facilities is found to be unenforceable or invalid or is not otherwise effective;


•	Any of our subsidiaries that are borrowers or guarantors of our Amended Senior Secured Credit Facilities file for bankruptcy or become the subject of an involuntary bankruptcy case or other similar proceeding;


•	The equity interests of any of the company, Seadrill Operating LP or Seadrill Capricorn Holdings LLC is pledged to anyone other than the collateral agent for the term loan; and


•	The occurrence of a change of control.

Contractual Obligations

The following table sets forth our contractual obligations for the periods indicated as of September 30, 2014:



($ 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	$	3,237.4	$	127.0	$	207.3	$	167.2	$	2,735.9
Interest expense commitments on long-term debt obligations (1)	984.4		171.3		324.0		303.0		186.1
Commitment fee on undrawn facilities (2)	12.5		2.5		5.0		5.0		—
Total	$	4,234.3	$	300.8	$	536.3	$	475.2	$	2,922

(1) The Company's interest commitment on long-term debt is calculated based on the applicable interest rate of the loan agreements and the associated interest rate swap rates.

(2) The $100 million revolving credit facility with Seadrill and the $100.0 million revolving credit facility under the Amended Senior Secured Credit Facilities incur commitment fees on the undrawn balances of 2.0% per annum and 0.5% per annum respectively.

Quantitative and Qualitative Disclosures About Market Risk

The Company is exposed to various market risks, including interest rate, foreign currency exchange and concentration of credit risks. The Company 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 September 30, 2014, the Company was party to interest rate swap agreements with Seadrill and third parties for a combined outstanding principal amount of approximately $3,156.8 million at floating rates between 1.11% per annum and 2.52% per annum. The swap agreements mature between October 2019 and February 2021. The loss recognized on our interest rate swaps for the nine months ended September 30, 2014, was $76.5 million.

As of September 30, 2014, the Company's total exposure to floating interest rate fluctuations on our outstanding debt was $3,237.4 million, compared to $2,060.6 million as at December 31, 2013. An increase or decrease in short-term interest rates of 100 bps would thus increase or decrease, respectively, our interest expense by approximately $32.4 million on an annual basis as of September 30, 2014, as compared to $20.6 million in 2013.

The fair values of our interest rate swaps as of September 30, 2014 and December 31, 2013 were as follows:



	September 30, 2014					December 31, 2013
(In millions of US dollars)	Outstanding Principal		Fair Value			Outstanding Principal		Fair Value

Current asset	$	268.7	$	4.1		$	2,067.8	$	42.4
Current liability	2,888.1		(20.7		)	—		—

For further disclosure of the fair value of the derivatives and debt obligations outstanding as of September 30, 2014, please read Note 8 of the Consolidated and Combined Carve-Out Financial Statements included elsewhere in this Form 6-K.

Foreign Currency Fluctuation Risks

The Company 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, the Company's reporting currency is also U.S. Dollars. The Company does, 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 the Company's cash flows. The Company's exposure is primarily in Euro as other currency exposure is mostly offset by operating costs in the related currency. A 10% appreciation or depreciation in the exchange rate of Euros against the U.S. Dollar would increase or decrease the Company’s revenue by approximately $1.5 million.

The Company's foreign currency risk arises from:


•	the measurement of monetary assets and liabilities denominated in foreign currencies converted to U.S. Dollars, with the resulting gain or loss recorded as “Foreign currency exchange gain/(loss)"; and


•	the impact of fluctuations in exchange rates on the reported amounts of the Company's revenues and expenses which are denominated in foreign currencies

The Company does not use foreign currency forward contracts.

Credit Risk

The Company has financial assets which expose the Company to credit risk arising from possible default by a counterparty. The Company considers its 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.

Concentration of Credit Risk

The market for the Company’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 the Company's customers are performed and generally do not require collateral in the Company's business agreements. Reserves for potential credit losses are maintained when necessary.

Retained Risk

Physical Damage Insurance. Seadrill purchases hull and machinery insurance to cover for physical damage to its drilling units and those of the Company and charges the Company for the cost related to the Company’s fleet.

The Company retains the risk for the deductibles relating to physical damage insurance on its fleet. The deductible is currently a maximum of $5.0 million per occurrence.

The Company has elected to place an insurance policy for physical damage to drilling units and equipment caused by named windstorms in the U.S. Gulf of Mexico with a Combined Single Limit of $100.0 million in the annual aggregate, which includes loss of hire. The policy covers the 2014 windstorm season.

Loss of Hire Insurance. With the exception of T-15 and T-16, Seadrill purchases insurance to cover for loss of revenue in the event of extensive downtime caused by physical damage to its drilling units and those of the Company, where such damage is covered under the Seadrill’s physical damage insurance, and charges the Company for the cost related to its 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 the Company is compensated for loss of revenue are limited to 290 days per event and aggregated per year. The daily indemnity is approximately 75% of the contracted dayrate. The Company 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.

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 units to cover claims of up to $250.0 million per event and in the aggregate for the West Vencedor, T-15 and T-16, up to $400.0 million per event, and in the aggregate for the West Aquarius, West Capella and West Leo, and up to $750.0 million per event and in the aggregate for each of the West Auriga, West Vela, West Capricorn and the West Sirius.

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

Critical Accounting Estimates

The preparation of the Consolidated and Combined Carve-Out Financial Statements requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures about contingent assets and liabilities. The Company bases these estimates and assumptions on historical experience and on various other information and assumptions that the Company believes to be reasonable. Critical accounting estimates are important to the portrayal of both the Company's financial condition and results of operations and require the Company to make subjective or complex assumptions or estimates about matters that are uncertain. The basis of preparation and significant accounting policies are disclosed in Note 1 “General Information” and Note 2 “Accounting Policies” of the notes to the Company's Consolidated and Combined Carve-Out Financial Statements for the year ended December 31, 2013 filed on Form 20-F with the SEC.

During the nine months ended September 30, 2014, the accounting treatment related to acquisitions from Seadrill was changed. Following the deconsolidation of the Company from Seadrill on January 2, 2014, acquisitions from Seadrill are no longer deemed to be transactions between entities under common control. As a result the Company no longer retroactively adjusts its financial statements prior to the date the acquisition was made to include the results of the newly acquired entities during the periods they were under the common control of Seadrill. Additionally, assets and liabilities are no longer transferred at historical carrying value. On acquisition, the Company now allocates the purchase price of acquired businesses to the identifiable tangible and intangible assets and liabilities acquired, with any remaining amount being recorded as goodwill if the acquisition is considered to be a business.

SEADRILL PARTNERS LLC

UNAUDITED CONSOLIDATED AND COMBINED CARVE-OUT STATEMENTS OF OPERATIONS
for the three and nine months ended September 30, 2014 and 2013

(In US$ millions, except per unit amounts)



	Three months ended September 30,						Nine months ended September 30,
	2014			2013			2014			2013

Operating revenues
Contract revenues	$	327.5		$	265.4		$	927.7		$	768.0
Reimbursable revenues	7.0			3.4			28.4			11.4
Other revenues	—			0.6			—			5.8
Total operating revenues	334.5			269.4			956.1			785.2

Operating expenses
Vessel and rig operating expenses	115.4			97.2			307.6			279.3
Reimbursable expenses	6.8			3.1			27.2			10.7
Depreciation and amortization	47.6			35.7			142.2			103.7
General and administrative expenses	11.1			15.4			33.3			38.3
Total operating expenses	180.9			151.4			510.3			432.0

Operating income	153.6			118.0			445.8			353.2

Financial items
Interest income	0.8			0.8			2.7			2.2
Interest expense	(35.3		)	(23.3		)	(101.5		)	(63.5		)
Gain/(loss) on derivative financial instruments	0.5			(11.8		)	(76.5		)	33.8
Foreign currency exchange (loss)/gain	(2.0		)	1.3			(1.3		)	0.2
Total financial items	(36.0		)	(33.0		)	(176.6		)	(27.3		)

Income before income taxes	117.6			85.0			269.2			325.9
Income taxes	(11.3		)	(6.7		)	(24.8		)	(24.2		)
Net income	$	106.3		$	78.3		$	244.4		$	301.7

Net income attributable to Seadrill Partners LLC members	$	54.0		$	25.4		$	105.0		$	102.3
Net income attributable to the non-controlling interest	$	52.3		$	52.9		$	139.4		$	199.4

Earnings per unit (basic and diluted)
Common unitholders	$	0.62		$	0.44		$	1.40		$	1.38
Subordinated unitholders	$	0.56		$	0.20		$	1.40		$	1.32

A Statement of Other Comprehensive Income has not been presented as there are no items recognized 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 SHEETS

as of September 30, 2014 and December 31, 2013

(In US$ millions, except unit amounts)



	September 30, 2014		December 31, 2013

ASSETS
Current assets
Cash and cash equivalents	$	447.3	$	89.7
Accounts receivables, net	194.1		175.8
Amount due from related party	84.4		248.3
Other current assets	97.1		54.7
Total current assets	822.9		568.5

Non-current assets
Drilling units	4,415.3		3,448.3
Goodwill	2.9		—
Deferred tax assets	10.3		9.8
Other non-current assets	232.8		46.0
Total non-current assets	4,661.3		3,504.1
Total assets	$	5,484.2	$	4,072.6

LIABILITIES AND MEMBERS’ CAPITAL
Current liabilities
Current portion of long-term debt	$	29.0	$	—
Current portion of long-term related party payable	98.0		108.3
Related party revolving credit facility	—		125.9
Trade accounts payable	9.2		9.1
Other related party payables	255.3		292.1
Other current liabilities	117.5		118.7
Total current liabilities	509.0		654.1

Non-current liabilities
Long-term debt	2,852.0		—
Long-term related party payable	258.4		1,826.4
Related party loan notes	—		299.9
Other non-current liabilities	28.3		37.6
Total non-current liabilities	3,138.7		2,163.9

Equity
Members’ Capital:
Common unitholders (75,278,250 units issued and outstanding as of September 30, 2014 (December 31, 2013 : 44,400,563))	930.3		280.2
Subordinated unitholders (16,543,350 units issued and outstanding as of September 30, 2014 (December 31, 2013 : 16,543,350))	15.4		18.8
Seadrill Member Interest	2.7		—
Total members’ capital	948.4		299.0
Non-controlling interest	888.1		955.6
Total equity	1,836.5		1,254.6
Total liabilities and equity	$	5,484.2	$	4,072.6

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 STATEMENTS OF CASH FLOWS

for the nine months ended September 30, 2014 and 2013

(In US$ millions)



	Nine months ended September 30,
	2014			2013

Cash Flows from Operating Activities
Net income	$	244.4		$	301.7
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	142.2			103.7
Amortization of deferred loan charges	12.8			6.4
Amortization of mobilization revenue	(16.7		)	(24.2		)
Amortization of favorable contracts	5.5			—
Unrealized loss / (gain) related to derivative financial instruments	26.3			(41.4		)
Payment for long term maintenance	(37.5		)	(22.2		)
Deferred income tax expense / (benefit)	(0.5		)	(1.9		)
West Aquarius settlement	—			(25.0		)

Changes in operating assets and liabilities, net of effect of acquisitions:
Trade accounts receivable	10.0			(77.1		)
Trade accounts payable	(20.4		)	0.5
Related party balances	81.1			76.5
Other assets	(4.0		)	39.8
Other liabilities	(3.6		)	13.1
Net cash provided by operating activities	$	439.6		$	349.9

Cash Flows from Investing Activities
Additions to newbuildings and drilling units	$	(6.0	)	$	(137.8	)
Acquisition of subsidiaries, net of cash acquired	(672.6		)	—
Purchase of non-controlling interest in Seadrill Operating LP	(373.5		)	—
Net cash used in investing activities	$	(1,052.1	)	$	(137.8	)

Cash Flows from Financing Activities
Net proceeds from long term debt	$	2,825.4		$	206.1
Repayments of long term debt	(462.1		)	—
Net proceeds from related party debt	—			119.6
Repayments of related party debt	(1,578.4		)	(408.7		)
Repayments of revolving credit facility	(125.9		)	—
Repayments of related party discount notes	(399.9		)	—
Cash distributions	(568.3		)	(107.8		)
Proceeds on issuance of common units, net of fees	937.8			—
Proceeds on issuance of units by Seadrill Capricorn Holdings LLC	341.5			—
Distribution to Seadrill Limited for the acquisition of Tender rig T-15	—			(76.1		)
Owner’s funding received	—			109.2
Net cash provided by / (used in) financing activities	$	970.1		$	(157.7	)

Net increase in cash and cash equivalents	$	357.6		$	54.4
Cash and cash equivalents at beginning of the period	89.7			21.3
Cash and cash equivalents at the end of period	$	447.3		$	75.7

Supplementary disclosure of cash flow information
Interest paid net of capitalized interest	$	78.7		$	43.8
Taxes paid	56.5			22.5

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 STATEMENTS OF CHANGES IN MEMBERS’ CAPITAL
for the nine months ended September 30, 2014 and 2013

(In US$ millions)



	Members’ Capital
	Common Units			Subordinated Units			Seadrill Member			Total Before Non-Controlling interest			Non- Controlling Interest			Total Members’ Capital
Consolidated and Combined Balance at December 31, 2012	$	294.1		$	3.7		$	226.8		$	524.6		$	899.8		$	1,424.4
Movement in invested equity	—			—			4.9			4.9			53.2			58.1
Allocation of net assets acquired related to T-15	(76.1		)	—			—			(76.1		)	—			(76.1		)
Forgiveness of related party payables	9.9			6.6			—			16.5			24.0			40.5
Net income	33.7			22.4			46.2			102.3			199.4			301.7
Cash Distributions	(27.2		)	(18.1		)	—			(45.3		)	(62.5		)	(107.8		)
Consolidated and Combined Balance at September 30, 2013	$	234.4		$	14.6		$	277.9		$	526.9		$	1,113.9		$	1,640.8

Consolidated and Combined Balance at December 31, 2013	$	280.2		$	18.8		$	—		$	299.0		$	955.6		$	1,254.6
Purchase of non-controlling interest	(279.6		)	—			—			(279.6		)	(93.9		)	(373.5		)
Common units issued to Seadrill and public (net of transaction costs)	937.8			—			—			937.8			—			937.8
Issuance of units by Seadrill Capricorn Holdings LLC	—			—			—			—			341.5			341.5
Net income	77.6			21.4			6.0			105.0			139.4			244.4
Cash Distributions	(85.7		)	(24.8		)	(3.3		)	(113.8		)	(454.5		)	(568.3		)
Consolidated and Combined Balance at September 30, 2014	$	930.3		$	15.4		$	2.7		$	948.4		$	888.1		$	1,836.5

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”) formed Seadrill Partners LLC (the “Company”) under the laws of the Republic of the Marshall Islands.

On October 24, 2012, the Company completed its initial public offering of its common units ("IPO"), in which the Company sold 10,062,500 common units representing limited liability company interests in the Company to the public at a price of $22.00 per unit, raising gross proceeds of $221.4 million. Net proceeds from the offering were $202.6 million, after deducting underwriting discounts, commissions, and structuring fees and expenses of $18.8 million. As part of this transaction, the Company issued to Seadrill 14,752,525 common units and 16,543,350 subordinated units. The Company’s common units are listed on the New York Stock Exchange (“NYSE”) under the symbol “SDLP”. In addition, the Company issued to Seadrill Member LLC, a wholly owned subsidiary of Seadrill, the Seadrill Member interest, which is a non economic limited liability company interest in the Company, and all of the Company's incentive distribution rights.

On October 24, 2012, in connection with the Company's IPO, the Company acquired in return for the issuance of common and subordinated units to Seadrill and the net proceeds received from the IPO (i) a 30% limited partner interest in Seadrill Operating LP, as well as the non-economic general partner interest in Seadrill Operating LP through the Company's 100% ownership of its general partner, Seadrill Operating GP LLC, and (ii) a 51% limited liability company interest in Seadrill Capricorn Holdings LLC. Seadrill Operating LP owned: (i) a 100% interest in the entities that own the West Aquarius and the West Vencedor and (ii) an approximate 56% interest in the entity that owns and operates the West Capella. Seadrill Capricorn Holdings LLC owned 100% of the entities that own and operate the West Capricorn.

On May 17, 2013, the Company's wholly owned subsidiary, Seadrill Partners Operating LLC, acquired from Seadrill a 100% ownership interest in the entities that own and operate the tender rig T-15.

On March 21, 2014, the Company completed the acquisition of the companies that own and operate the drillship, the West Auriga. The West Auriga was acquired by Seadrill Capricorn Holdings LLC (51% owned by the Company). In order to finance the acquisition, the Company issued 11,960,000 common units to the public and 1,633,987 common units to Seadrill.

On June 24, 2014, the Company issued 6,100,000 common units to the public and 3,183,700 common units to Seadrill.

F-5

SEADRILL PARTNERS LLC

NOTES TO CONSOLIDATED AND COMBINED CARVE-OUT FINANCIAL STATEMENTS

(Unaudited)

On September 23, 2014, the Company issued 8,000,000 common units to the public.

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

As of September 30, 2014, Seadrill owned 46.6% of the outstanding combined common and subordinated units of the Company.

Basis of presentation

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

The unaudited interim condensed 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 the Company's annual consolidated and combined carve-out financial statements as of December 31, 2013 filed on Form 20-F (our “audited 2013 financial statements”). The year-end balance sheet data was derived from our audited 2013 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. Preparation of financial statements in accordance with US GAAP requires management to make estimates and assumptions that affect 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. Actual results could differ from those estimates. Current accrued liabilities are now reported as other current liabilities in the Company's consolidated and combined carve-out balance sheet and therefore the prior period has been reclassified to conform to the current period presentation. This has decreased trade accounts payable by $80 million with a corresponding increase in other current liabilities as of December 31, 2013. There was no effect on total current liabilities.

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 2013 financial statements for the year ended December 31, 2013, 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 combining entity is accounted for as a change in equity. In addition reorganization 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.

F-6

SEADRILL PARTNERS LLC

NOTES TO CONSOLIDATED AND COMBINED CARVE-OUT FINANCIAL STATEMENTS

(Unaudited)

The acquisitions of the entities that own and operate the T-16, West Leo and West Sirius in 2013 from Seadrill Limited were accounted for under this method. The effects of adjusting the Company’s financial statements for the nine months ended September 30, 2013, to account for the common control transactions relating to the acquisitions of the entities that own and operate the T-16, West Leo and West Sirius were an increase in total operating revenues of $287.5 million ($104.7 million for the three months ended September 30, 2013) and an increase in net income of $118.6 million ($33.8 million for the three months ended September 30, 2013). Of the $118.6 million of net income for the nine months ended September 30, 2013 ($33.8 million for the three months ended September 30, 2013), $46.2 million ($11.2 million for the three months ended September 30, 2013) was deemed attributable to the equity holders of Seadrill Partners and $72.4 million ($22.6 million for the three months ended September 30, 2013) was deemed attributable to non-controlling interests. The $46.2 million of net income for the nine months ended September 30, 2013 ($11.2 million for the three months ended September 30, 2013) attributable to the equity holders of Seadrill Partners was allocated to the Seadrill Member interest in the unaudited interim consolidated and combined carve-out statement of changes in members' capital.

Business combinations

The Company applies the acquisition method of accounting for business combinations. The acquisition method requires the total of the purchase price of acquired businesses and any non-controlling interest recognized to be allocated to the identifiable tangible and intangible assets and liabilities acquired at fair value, with any residual amount being recorded as goodwill as of the acquisition date. Costs associated with the acquisition are expensed as incurred. See Note 5 for further discussion on business acquisitions.

Note 2 - Recent Accounting Pronouncements

Recently Adopted Accounting Standards

Effective January 1, 2014, the Company has adopted the accounting standards update that expands on the recognition, measurement and disclosure obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date, except for obligations addressed within existing guidance in U.S. GAAP. The update requires measurement of the obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date, as the sum of the amount the entity agreed to pay on the basis of its arrangement and any additional amount the Company expects to pay on behalf of its co-obligors. The update also requires an entity to disclose the nature, amount and other information of the obligation. The adoption of this standard update did not have a material effect on the Company's consolidated financial statements.

Recently Issued Accounting Standards

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers, which provides new authoritative guidance on the methods of revenue recognition and related disclosure requirements. The accounting standard update will be effective for the first interim period beginning after December 15, 2016 (December 31, 2016 for calendar year-end entities) and early adoption is not permitted. The Company is in the process of evaluating the impact of the ASU on its consolidated financial statements and related disclosures.

In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which provides new authoritative guidance regards to management's responsibility to assess an entity's ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. The accounting standard update will be effective for all entities in the first annual period ending after December 15, 2016 (December 31, 2016 for calendar year-end entities) and earlier application is permitted. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements and related disclosures.

In November 2014, the FASB issued ASU 2014-17, Business Combinations (Topic 805): Pushdown accounting, which provides guidance that allows all acquired entities to choose to apply pushdown accounting in their separate financial statements when an acquirer obtains control of them. The new guidance is effective immediately. The

F-7

SEADRILL PARTNERS LLC

NOTES TO CONSOLIDATED AND COMBINED CARVE-OUT FINANCIAL STATEMENTS

(Unaudited)

Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements and related disclosures.

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 three and nine months ended September 30, 2014 and 2013 are follows:



	Three months ended September 30,				Nine months ended September 30,
	2014		2013		2014		2013

ExxonMobil *	30.7	%	9.0	%	25.6	%	16.0	%
Total	0.0	%	19.1	%	2.4	%	20.2	%
Chevron	15.2	%	14.1	%	15.4	%	10.3	%
BP	37.1	%	35.4	%	38.4	%	34.6	%
Tullow	17.0	%	22.4	%	18.2	%	18.9	%
Total	100.0	%	100.0	%	100.0	%	100.0	%

* During 2013 the ExxonMobil drilling contract was assigned to Hibernia Management and Development Co. Ltd and Statoil Canada Ltd.

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)	Three months ended September 30,				Nine months ended September 30,
	2014		2013		2014		2013

Nigeria	$	58.7	$	49.8	$	169.5	$	157.0
Angola	23.8		22.7		68.9		65.6
Canada	42.7		23.4		99.8		124.3
United States	126.5		92.3		364.7		268.7
Thailand	27.1		14.2		79.8		14.2
Ghana	55.7		58.5		171.4		146.9
Other	—		8.5		2.0		8.5
Total	$	334.5	$	269.4	$	956.1	$	785.2

F-8

SEADRILL PARTNERS LLC

NOTES TO CONSOLIDATED AND COMBINED CARVE-OUT FINANCIAL STATEMENTS

(Unaudited)

As of September 30, 2014 and December 31, 2013 the drilling units were located as follows:

Fixed Assets – Drilling units



(In US$ millions)	September 30, 2014		December 31, 2013

Nigeria	$	525.6	$	543.5
Angola	183.0		182.6
Ghana	613.3		632.1
Canada	536.6		543.5
United States	2,293.3		1,274.8
Thailand	263.5		271.8
Total	$	4,415.3	$	3,448.3

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.

Note 4 – Taxation

Income taxes consist of the following:



(In US$ millions)	Three months ended September 30,						Nine months ended September 30,
	2014			2013			2014			2013

Current tax (expense) / benefit:
United Kingdom	$	—		$	—		$	—		$	—
Foreign	(16.9		)	(8.3		)	(25.3		)	(26.1		)
Total current tax expense	$	(16.9	)	$	(8.3	)	$	(25.3	)	$	(26.1	)

Deferred tax (expense) / benefit:
United Kingdom	—			—			—			—
Foreign	5.6			1.6			0.5			1.9
Total income tax (expense) / benefit	$	(11.3	)	$	(6.7	)	$	(24.8	)	$	(24.2	)

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 units 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 the three and nine month periods ended September 30, 2014 and 2013 is as follows:

Effective tax rate



	Three months ended September 30,				Nine months ended September 30,
	2014		2013		2014		2013

United Kingdom statutory income tax rate	21.5	%	23.2	%	21.5	%	23.2	%
Effect of other tax jurisdictions	(11.9	)%	(15.3	)%	(12.3	)%	(15.8	)%
Effective income tax rate	9.6	%	7.9	%	9.2	%	7.4	%

F-9

SEADRILL PARTNERS LLC

NOTES TO CONSOLIDATED AND COMBINED CARVE-OUT FINANCIAL STATEMENTS

(Unaudited)

Deferred taxes

The net deferred tax assets consist of the following:



(In US$ millions)	September 30, 2014		December 31, 2013

Net operating loss carryfoward	$	6.8	$	9.5
Property, plant and equipment	2.4		—
Provisions	1.1		—
Deferred mobilization revenue	—		0.3
Total deferred tax assets	$	10.3	$	9.8

We have no net deferred tax liabilities as of September 30, 2014 and December 31, 2013.

Note 5 – Business acquisitions

West Auriga Acquisition

On March 21, 2014, the Company’s 51% owned subsidiary, Seadrill Capricorn Holdings LLC, completed the purchase of 100% of the ownership interests in the entities that own and operate the West Auriga (the “Auriga business”) from Seadrill. The acquisition is in line with the Company’s strategy to increase quarterly cash distributions through accretive acquisitions of modern offshore drilling units with long-term contracts attached.

The purchase price was $1,240.0 million, less debt of $443.0 million that was outstanding under the existing facility related to West Auriga. The total consideration of $797 million comprised of cash of $696.9 million, and a zero coupon limited recourse discount note issued by Seadrill Capricorn Holdings LLC to Seadrill in an initial amount of $100.0 million that matures in September 2015. Upon maturity of such note, Seadrill Capricorn Holdings LLC will repay $103.7 million to Seadrill. The purchase price was subsequently adjusted by a working capital adjustment of $330.4 million. The working capital adjustment predominately arose as a result of related party payable balances which remained in the acquired entities. These payable balances related to funding provided by Seadrill to the acquired entities for the construction, equipping and mobilization of the West Auriga.

In conjunction with this acquisition, the Company issued 11,960,000 common units to the public and 1,633,987 common units to Seadrill, at a price of $30.60 per unit, raising total net proceeds after fees of $401.3 million. Issuance costs of $14.7 million were charged against Members’ Capital.

The Company funded its 51% share of the cash purchase price with proceeds from the equity issuance described above. The remaining 49% was funded through the issuance of new units by Seadrill Capricorn Holdings LLC to Seadrill for $341.5 million.

Following the deconsolidation of the Company from Seadrill on January 2, 2014, this transaction is deemed to constitute a business combination rather than a transaction between entities under common control. The following table summarizes the consideration paid and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date.

F-10

SEADRILL PARTNERS LLC

NOTES TO CONSOLIDATED AND COMBINED CARVE-OUT FINANCIAL STATEMENTS

(Unaudited)



(In US$ millions)	March 21, 2014
Consideration
Cash	$	696.9
Discount note issued	100.0
Working capital adjustment	(330.4		)
Fair value of total consideration transferred	$	466.5

Recognized amounts of identifiable assets acquired and liabilities assumed at estimated fair value
Cash	$	24.4
Current assets	44.4
Intangible asset - favorable drilling contract	76.2
Drilling unit	1,065.7
Non current assets	76.6
Long term interest bearing debt	(443.1		)
Current liabilities	(380.6		)
Total identifiable net assets	$	463.6

Goodwill	2.9
Total	$	466.5

The Company recognized goodwill from the acquisition of $2.9 million, which is the excess of consideration transferred over the net assets acquired. The value of the goodwill is attributed to the assembled workforce. None of the goodwill recognized is expected to be deductible for income tax purposes.

The drilling unit has been valued at fair value separately from the related drilling contract. The estimated fair value of the drilling unit was derived using an income approach with market participant based assumptions. The fair value of the drilling contract has been also been assessed separately. The contract was valued using an 'excess earnings' technique where the terms of the contract are assessed relative to current market conditions. The value of the contract related intangible was determined by means of calculating the incremental or decremental cash flows arising over the life of the contract compared with a contract with terms at prevailing market rates.

The fair value of trade receivables is $28.3 million, which is also the gross contractual amount. All amounts are expected to be collected. The fair value of the mobilization fee receivable included in other current and non-current assets is $92.4 million, which equals the book value. All amounts are expected to be collected over the duration of the drilling contract.

Acquisition related transaction costs consisted of various advisory, legal, accounting, valuation and other professional fees of $0.2 million, which were expensed as incurred and are presented in the statement of operations within general and administrative expenses.

In the consolidated statement of operations $109.0 million of revenue and net income of $29.5 million have been included since the acquisition date of the Auriga Business until September 30, 2014.

The pro forma revenue and pro forma net income of the combined entity for the nine months ended September 30, 2014 and September 30, 2013, had the acquisition date been January 1, 2013 are as follows.



	Nine months ended September 30,
(In US$ millions)	2014				2013
	Seadrill Partners LLC as reported		Supplemental pro forma combined entity		Seadrill Partners LLC as reported		Supplemental pro forma combined entity
Revenues	$	956.1	$	1,004.2	$	785.2	$	785.2
Net Income	244.4		260.8		301.7		288.8

F-11

SEADRILL PARTNERS LLC

NOTES TO CONSOLIDATED AND COMBINED CARVE-OUT FINANCIAL STATEMENTS

(Unaudited)

Acquisition of additional limited partner interest in Seadrill Operating LP

On July 21, 2014, the Company purchased an additional 28% limited partner interest in Seadrill Operating LP, an existing controlled subsidiary of the Company, from Seadrill for $373 million. As a result of this acquisition, the Company’s limited partner interest in Seadrill Operating LP increased from 30% to 58%. Seadrill Operating LP is already a controlled subsidiary of the Company and therefore this has been accounted for as an equity transaction.

Note 6 – Drilling units



(In US$ millions)	September 30, 2014			December 31, 2013

Cost	$	5,008.2		$	3,899.0
Accumulated depreciation	(592.9		)	(450.7		)
Net book value	$	4,415.3		$	3,448.3

The increase in cost is primarily due to the acquisition of the entities that own and operate West Auriga. Refer to Note 5.

Depreciation expense was $142.2 million and $103.7 million for the nine months ended September 30, 2014 and 2013 , and $47.6 million and $35.7 million for the three months ended September 30, 2014 and 2013 respectively.

F-12

SEADRILL PARTNERS LLC

NOTES TO CONSOLIDATED AND COMBINED CARVE-OUT FINANCIAL STATEMENTS

(Unaudited)

Note 7 – Debt

As of September 30, 2014 and December 31, 2013, the Company had the following debt amounts outstanding:



(In US$ millions)	September 30, 2014			December 31, 2013
External debt agreements
Amended Senior Secured Credit Facilities	$	2,881.0		$	—
Sub-total external debt	$	2,881.0		$	—

Related party debt agreements
Rig Financing Agreements
$1,500 facility	$	—		$	643.5
$1,200 facility	78.2			90.5
$550 facility	—			440.0
$440 facility	168.7			178.6
$1,121 facility	—			472.6
Sub-total Rig Financing Agreements	$	246.9		$	1,825.2

Other related party debt
$109.5 vendor financing facility	$	109.5		$	109.5
$229.9 discount note	—			229.9
$70.0 discount note	—			70.0
Related party revolving credit facility	—			125.9
Sub-total other related party debt	$	109.5		$	535.3

Total debt	$	3,237.4		$	2,360.5
Less current portion of related party debt	(98.0		)	(234.2		)
Less current portion long term debt	(29.0		)	—
Long-term portion of total debt	$	3,110.4		$	2,126.3

The outstanding debt as of September 30, 2014 is repayable as follows:



(In US$ millions)	As at September 30,

2015	$	127.0
2016	158.4
2017	48.9
2018	138.2
2019	29.0
2020 and thereafter	2,735.9
Total outstanding debt	$	3,237.4

F-13

SEADRILL PARTNERS LLC

NOTES TO CONSOLIDATED AND COMBINED CARVE-OUT FINANCIAL STATEMENTS

(Unaudited)

Amended Senior Secured Credit Facilities

On February 21, 2014, Seadrill Operating LP, Seadrill Capricorn Holdings LLC and Seadrill Partners Finco LLC, which are subsidiaries of the Company (the “Borrowers”), entered into Senior Secured Credit Facilities (the “Senior Secured Credit Facilities”). The Senior Secured Credit Facilities consist of (i) a $100.0 million revolving credit facility (the “revolving facility”) available for borrowing from time to time by any Borrower, and (ii) a $1.8 billion term loan (the “term loan”) which was borrowed by Seadrill Operating LP in full on February 21, 2014. The proceeds from this transaction were used to (a) refinance debt related to the West Capella, West Aquarius, West Sirius and West Leo Rig Facilities, (b) repay in part unsecured loans from Seadrill, (c) add cash to the balance sheet in support of general company purposes and (d) pay all fees and expenses associated therewith.

On June 26, 2014, the Senior Secured Credit Facilities were amended ("Amended Senior Secured Credit Facilities") for the borrowing by Seadrill Operating LP of $1.1 billion of additional term loans in addition to the term loans already outstanding under the Senior Secured Credit Facilities as noted above. The proceeds from the additional $1.1 billion of term loans were used to (a) refinance debt secured by West Auriga of $443.1 million and West Capricorn of $426.3 million, (b) repay in part certain unsecured loans from Seadrill, (c) add cash to the Company's balance sheet for general company purposes and (d) pay all fees and expenses associated with the Amended Senior Secured Credit Facilities.

Loans under the Amended Senior Secured Credit Facilities will bear interest, at the Company's option, at a rate per annum equal to either the LIBOR Rate (subject to a 1% floor) for interest periods of one, two, three or six months plus the applicable margin or the Base Rate plus the applicable margin. The Base Rate is the highest of (a) the prime rate of interest announced from time to time by the agent bank as its prime lending rate, (b) 0.50% per annum above the Federal Funds rate as in effect from time to time, (c) the Eurodollar Rate for 1-month LIBOR as in effect from time to time plus 1.00% per annum, and (d) for term loans only, 2.0% per annum. The applicable margin is 2.0% for term loans bearing interest at the Base Rate and 3.00% for term loans bearing interest at the Eurodollar Rate. The applicable margin is 1.25% for revolving loans bearing interest at the Base Rate and 2.25% for revolving loans bearing interest at the Eurodollar Rate. In addition, the Company will incur a commitment fee based on the unused portion of the revolving facility of 0.50% per annum.

The term loan matures in February 2021. Amortization payments in the amount of 0.25% of the original term loan amount are required to be paid on the last day of each calendar quarter. The revolving facility matures in February 2019 and does not amortize. The Company is required to make mandatory prepayments of term loans using proceeds from asset sales that are not otherwise utilized for permitted purposes and to make offers to purchase term loans using proceeds of loss events that are not otherwise utilized for permitted purposes.

The Company has entered into interest rate swap transactions to hedge 100% of the variable element of the term loan facility at a weighted average fixed rate of 2.49% per annum. A variable rate option included in the swap provides that the hedge counterparty shall pay the greater of 1.00% or 3 Month LIBOR. Thus, where the variable rate is less than 1%, the variable rate payment shall be deemed to be equal to 1%.

As of September 30, 2014, the outstanding balance of the term loan was $2.9 billion, and the $100 million revolving facility was not yet drawn.

$1,450 million Senior Secured Credit Facility

The entity which owns the the West Auriga, was a borrower under the $1,450.0 million senior secured credit facility relating to the West Auriga, the West Vela and one other drilling unit owned by Seadrill. Upon closing of the West Auriga acquisition, this entity owed $443.1 million under the facility. This amount was repaid with proceeds from the Amended Senior Secured Credit Facilities discussed above. The entity which owns the West Vela is a borrower under the $1,450.0 million senior secured credit facility. Upon closing of the West Vela acquisition, this entity owed $433.0 million under the facility. See Note 12.

F-14

SEADRILL PARTNERS LLC

NOTES TO CONSOLIDATED AND COMBINED CARVE-OUT FINANCIAL STATEMENTS

(Unaudited)

Rig Financing Agreements

For each of the Rig Financing Agreements, the Company entered into a loan agreement with Seadrill on a back to back basis at the time of the IPO or in conjunction with the sale of entities that own and operate drilling units to the Company. These loan agreements with Seadrill are classified as related party transactions. Pursuant to these loan agreements of the related drilling unit, each rig owning subsidiary can make payments of principal and interest to Seadrill or directly to the third party lenders under each facility, corresponding to that proportion of the loan facility. As of September 30, 2014, Rig Financing Agreements with Seadrill related to West Vencedor, T-15, and T-16 (December 31, 2013: West Capella, West Aquarius, West Vencedor, West Capricorn, T-15, T-16, West Leo and West Sirius.) During the nine months ended September 30, 2014 certain Rig Financing Agreements were repaid by the Company in conjunction with the drawdown of the Senior Secured Credit Facilities as further discussed above.

Under the terms of the external secured credit facility agreements for the West Vencedor, T-15 and T-16, certain subsidiaries of Seadrill and the Company are jointly and severally liable for their own debt and obligations under the relevant facility and the debt and obligations of other borrowers who are also party to such agreements. These obligations are continuing and extend to amounts payable by any borrower under the relevant agreement. The total amount under the external facility which includes the West Vencedor as of September 30, 2014 is zero ($733.0 million as of December 31, 2013); the Company retains a related party balance as of September 30, 2014 of $78.2 million ($90.5 million as of December 31, 2013) payable to Seadrill. The total amount owed under the external facility which includes T-15 and T-16 as of September 30, 2014 is $275.5 million ($293.0 million as of December 31, 2013); the Company retains a related party balance as of September 30, 2014 of $168.7 million ($178.6 million as of December 31, 2013) payable to Seadrill. The Company has not recognized any amounts that are related to amounts owed by Seadrill subsidiaries. Additionally the Company has received an indemnity from Seadrill for any payments or obligations related to these facilities that are not related to the West Vencedor, T-15 and T-16.

$109.5 million Vendor Financing Loan Agreement

In May 2013, the Company borrowed from Seadrill $109.5 million as vendor financing to fund the acquisition of the T-15. The loan bears interest of LIBOR plus a margin of 5.0% and is due in May 2016.

$229.9 million Discount Note

$70.0 million Discount Note

$100.0 million Discount Note

Revolving Credit Facility

In October 2012, the Company entered into a $300.0 million revolving credit facility with Seadrill. The facility is for a term of 5 years and bears interest at a rate of LIBOR plus 5.0% per annum, with an annual 2.0% commitment fee on the undrawn balance. The outstanding balance as at December 31, 2013 was $125.9 million. On March 1, 2014, the revolving credit facility was amended to reduce the maximum borrowing limit to $100 million. There were no amounts owed under the facility as of September 30, 2014.

Restrictive Covenants

F-15

SEADRILL PARTNERS LLC

NOTES TO CONSOLIDATED AND COMBINED CARVE-OUT FINANCIAL STATEMENTS

(Unaudited)

Combined Carve-Out Financial Statements for the year ended December 31, 2013 included in the Company's Form 20-F filed with the SEC on April 30, 2014. Financing agreements entered into during the period ending September 30, 2014 are discussed further below. The Company and Seadrill were in compliance with the related covenants as of September 30, 2014 and December 31, 2013.

The Amended Senior Secured Credit Facilities


•	Limitations on the incurrence of indebtedness and issuance of preferred equity;


•	Limitations on the incurrence of liens;


•	Limitations on dividends and other restricted payments;


•	Limitations on investments;


•	Limitations on mergers, consolidation and sales of all or substantially all assets;


•	Limitations on asset sales;


•	Limitations on transactions with affiliates;


•	Limitation on business activities to businesses similar to those now being conducted; and


•	Requirement to maintain a senior secured net leverage ratio of no more than 5.5 to 1.0 (5.0 to 1.0 for the fiscal quarter ending March 31, 2015 and thereafter).


•	Failure of any borrow of the term loan to pay principal, interest or other amounts owing with respect to the loans under the Amended Senior Secured Credit Facilities;


•	Breach in any material respect of any representation or warranty contained in Amended Senior Secured Credit Facilities documentation;


•	Breach of any covenant contained in Amended Senior Secured Credit Facilities documentation;


•	The occurrence of a payment default under, or acceleration of, any indebtedness aggregating $25.0 million or more other than the term loan;


•	Failure by our subsidiaries that are borrowers or guarantors of our Amended Senior Secured Credit Facilities to pay or stay any judgment in excess of $25.0 million;


•	Repudiation by our subsidiaries that are borrowers or guarantors of our Amended Senior Secured Credit Facilities of any guarantee or collateral documents related to the Amended Senior Secured Credit Facilities;


•	Any guarantee related to the Amended Senior Secured Credit Facilities is found to be unenforceable or invalid or is not otherwise effective;


•	Any of our subsidiaries that are borrowers or guarantors of our Amended Senior Secured Credit Facilities file for bankruptcy or become the subject of an involuntary bankruptcy case or other similar proceeding;


•	The equity interests of any of the company, Seadrill Operating LP or Seadrill Capricorn Holdings LLC is pledged to anyone other than the collateral agent for the term loan; and


•	The occurrence of a change of control.

Note 8 – Risk management and financial instruments

Interest rate risk management

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. The extent to which the Company utilizes interest rate swaps and other derivatives to manage its interest rate risk is determined by the net debt exposure and its views on future interest rates.

F-16

SEADRILL PARTNERS LLC

NOTES TO CONSOLIDATED AND COMBINED CARVE-OUT FINANCIAL STATEMENTS

(Unaudited)

Interest rate swap agreements

At September 30, 2014 we had interest rate swap agreements with an outstanding principal of $3,156.8 million (December 31, 2013: $2,067.8 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 related party interest rate swaps outstanding at September 30, 2014 amounted to an asset of $4.1 million (December 31, 2013: an asset of $42.4 million). The fair value of the related party interest rate swaps are classified as amounts due from related party in the consolidated balance sheet. The total fair value of the third party interest rate swaps outstanding at September 30, 2014 amounted to a liability of $20.7 million (December 31, 2013: nil). The fair value of the third party interest rate swaps are classified within other current liabilities in the consolidated balance sheet. The total loss recognized for the nine months to September 30, 2014 was $76.5 million (nine months to September 30, 2013: gain of $33.8 million).

The Company’s interest rate swap agreements as at September 30, 2014, were as follows:



Outstanding principal			Receive rate	Pay rate		Length of contract
(In US$ millions)

$	100.0	(2)	3 month LIBOR	1.36	%	Oct 2012 - Oct 2019
$	85.4	(1) (2)	3 month LIBOR	1.11	%	May 2013 - Jun 2020
$	83.3	(1) (2)	3 month LIBOR	1.93	%	Aug 2013 - Dec 2020
$	2,888.1	(1)	3 month LIBOR (with 1% floor)	2.45 - 2.52%		Feb 2014 - Feb 2021

(1) The outstanding principal of these amortizing swaps falls with each capital repayment of the underlying loans.

(2) Related party interest rate swap agreements.

The counterparties to the above interest rate swap agreements are Seadrill and also various banks. The Company believes the counterparties to be creditworthy.

Foreign Currency Risk

Credit risk

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

F-17

SEADRILL PARTNERS LLC

NOTES TO CONSOLIDATED AND COMBINED CARVE-OUT FINANCIAL STATEMENTS

(Unaudited)

Fair values of financial instruments

The carrying value and estimated fair value of the Company's financial instruments at September 30, 2014 and December 31, 2013 were as follows:



	September 30, 2014				December 31, 2013
(In US$ millions)	Fair value		Carrying value		Fair value		Carrying value

Cash and cash equivalents	$	447.3	$	447.3	$	89.7	$	89.7
Revolving credit facility	—		—		125.9		125.9
Current portion of long-term debt	29.0		29.0		—		—
Current portion of long term debt to related party	98.0		98.0		108.3		108.3
Long-term debt	2,852.0		2,852.0		—		—
Long-term portion of debt to related party	258.4		258.4		1,826.4		1,826.4
Related party loan notes	—		—		299.9		299.9

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 value of the revolving credit facility with Seadrill is considered to be equal to the carrying value, as the facility bears an interest of LIBOR plus a margin of 5.0%, with a commitment fee of 40% of the margin, which is concluded to be on arm's length terms. This is therefore categorized at level 2 on the fair value measurement hierarchy.

The fair value of the current and long-term portion of floating rate debt is estimated to be equal to the carrying value since it bears variable interest rates, which are reset on a quarterly basis, except for the T-15 and T-16 facilities which are reset on a semi-annual basis. This debt is not freely tradable and cannot be purchased by the Company at prices other than the outstanding balance plus accrued interest. This is categorized at level 2 on the fair value measurement hierarchy.

The fair value of the related party discount notes is estimated to be equal to the carrying value. This debt is not freely tradable and cannot be purchased by the Company at prices other than specified in the loan note agreements. The loan notes however are redeemable at a values that are concluded to be on arm's length terms, with an implicit rate of interest of 3.735%. This is categorized at level 2 on the fair value measurement hierarchy.

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
				Quoted Prices in Active Markets for Identical Assets	Significant Other Observable Inputs			Significant Unobservable Inputs
(In US$ millions)	September 30, 2014			(Level 1)	(Level 2)			(Level 3)
Assets:
Derivative instruments – Interest rate swap contracts (Related party)	$	4.1		—	$	4.1		—

Liabilities:
Derivative instruments – Interest rate swap contracts	$	(20.7	)	—	$	(20.7	)	—

F-18

SEADRILL PARTNERS LLC

NOTES TO CONSOLIDATED AND COMBINED CARVE-OUT FINANCIAL STATEMENTS

(Unaudited)



	Fair value		Fair value measurements at reporting date using
			Quoted Prices in Active Markets for Identical Assets	Significant Other Observable Inputs		Significant Unobservable Inputs
(In US$ millions)	December 31, 2013		(Level 1)	(Level 2)		(Level 3)
Assets:
Derivative instruments – Interest rate swap contracts	$	42.4	—	$	42.4	—

US GAAP 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, US GAAP 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 are calculated using well-established independent valuation techniques applied to contracted cash flows and LIBOR interest rates as of September 30, 2014.

Retained risk

a) Physical Damage Insurance

Seadrill has purchased hull and machinery insurance to cover for physical damage to its drilling units and those of the Company and charges the Company for the associated cost for its respective drilling units. The Company retains the risk for the deductibles relating to physical damage insurance on the Company’s fleet. The deductible is currently a maximum of $5.0 million per occurrence.

b) Loss of Hire Insurance

With the exception of T-15 and T-16, Seadrill purchases insurance to cover for loss of revenue in the event of extensive downtime caused by physical damage to its drilling units and those of the Company, where such damage is covered under the Seadrill’s physical damage insurance, and charges the Company for the cost related to the Company’s fleet.

F-19

SEADRILL PARTNERS LLC

NOTES TO CONSOLIDATED AND COMBINED CARVE-OUT FINANCIAL STATEMENTS

(Unaudited)

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 units to cover claims of up to $250.0 million per event and in the aggregate for the West Vencedor, T-15 and T-16, up to $400.0 million per event and in the aggregate for the West Aquarius, West Capella and West Leo, and up to $750.0 million per event and in the aggregate for each of the West Auriga, West Capricorn and the West Sirius.

The Company 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 three and nine months ended September 30, 2014 and 2013, the Company's contract revenues were attributable to the following customers:



(In US$ millions)	Three months ended September 30,				Nine months ended September 30,
	2014		2013		2014		2013

ExxonMobil *	30.7	%	9.0	%	25.6	%	16.0	%
Total	0.0	%	19.1	%	2.4	%	20.2	%
Chevron	15.2	%	14.1	%	15.4	%	10.3	%
BP	37.1	%	35.4	%	38.4	%	34.6	%
Tullow	17.0	%	22.4	%	18.2	%	18.9	%
Total	100.0	%	100.0	%	100.0	%	100.0	%

* During 2013 the ExxonMobil drilling contract was assigned to Hibernia Management and Development Co. Ltd and Statoil Canada Ltd.

Note 9 – Related party transactions

The Company has entered into certain agreements with affiliates of Seadrill to provide certain management and administrative services, as well as technical and commercial management services.

Net expenses (income) from related parties:



(In US$ millions)	Three months ended September 30,						Nine months ended September 30, 2014
	2014			2013			2014			2013

Management and administrative fees (a) and (b)	$	13.1		$	20.2		$	45.4		$	32.9
Rig operating costs (c)	6.9			4.1			16.1			14.1
Insurance premiums (d)	6.1			7.9			15.3			11.9
Interest expense (e)	3.7			37.5			34.2			61.7
Commitment fee on Revolving credit facility (f)	0.5			1.2			1.7			3.6
Derivative losses / (gains) (e)	(0.2		)	(5.2		)	39.6			(33.8		)
Bareboat charters (h)	1.0			1.5			(17.5		)	5.5
Other revenues due to West Polaris (i)	—			(0.1		)	—			(5.4		)
Operating expenses for West Polaris (i)	—			0.1			—			5.1
Total	$	31.1		$	67.2		$	134.8		$	95.6

F-20

SEADRILL PARTNERS LLC

NOTES TO CONSOLIDATED AND COMBINED CARVE-OUT FINANCIAL STATEMENTS

(Unaudited)

Receivables (payables) from related parties:



(In US$ millions)	September 30, 2014			December 31, 2013

Trading balances due from Seadrill and subsidiaries (j)	$	84.4		$	248.1
Trading balances due to Seadrill and subsidiaries (j)	(255.3		)	(292.1		)
Revolving credit facility with Seadrill (f)	—			(125.9		)
Rig financing agreements with Seadrill (g)	(246.9		)	(1,825.2		)
Vendor financing loan agreement with Seadrill (k)	(109.5		)	(109.5		)
Discount notes with Seadrill (l)	—			(299.9		)

(a) Management and administrative service agreement – In connection with the IPO, OPCO entered into a management and administrative services agreement with Seadrill Management Limited, a wholly owned subsidiary of Seadrill, pursuant to which Seadrill Management Limited will provide to the Company certain management and administrative services. The services provided by Seadrill Management Limited 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 providing 90 days written notice.

(b) Technical and administrative service agreement – In connection with the IPO, OPCO 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 units are insured by a subsidiary of Seadrill 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 based on the Company’s debt as a percentage of Seadrill’s overall debt. Upon entering the Rig Financing Agreements with Seadrill, the costs and expenses have been incurred by the Company.

(f) Revolving credit facility – In October 2012 the Company entered into a $300.0 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. On March 1, 2014, the revolving credit facility with Seadrill was amended to reduce the maximum borrowing limit from $300.0 million to $100.0 million.

(g) Rig financing agreements – See Note 7 for details of the Rig Financing Agreements. Under the agreements each rig owning subsidiary can make payment of principal and interest directly to the lenders or to Seadrill under each Rig Financing Agreement corresponding to payments of principal and interest due under each Rig Financing Agreement that are allocable to each rig.

(h) Bareboat charters - 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 three and nine months ended September 30, 2014, the net effect to OPCO of the bareboat charters was net income of $1.0 million and $17.5 million respectively.

(i) Other revenues and expenses – The Company earned other revenues within our Nigerian service company of $5.4 million for the nine months ended September 30, 2013 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 $5.1 million for the nine months ended September 30, 2013. There were no comparable other revenues and expenses in the nine months ended September 30, 2014 as the West Polaris moved out of Nigeria.

F-21

SEADRILL PARTNERS LLC

NOTES TO CONSOLIDATED AND COMBINED CARVE-OUT FINANCIAL STATEMENTS

(Unaudited)

(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 and interest rate swap agreements. 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.

(k) $109.5 million Vendor financing loan - 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 bears interest at a rate of LIBOR plus 5% and matures in May 2016.

(l) Discount loan notes

•

$229.9 million Discount Note - On December 13, 2013, as part of the acquisition of the West Sirius, Seadrill Capricorn Holdings issued a zero coupon discount note to Seadrill in an initial amount of $229.9 million. The note was repayable in June 2015 and upon maturity, the Company was due to pay $238.5 million to Seadrill. The note was repaid in full in February 2014 with proceeds from the term loan refinancing noted above.

•

$70.0 million Discount Note - On December 13, 2013, as part of the acquisition of the West Sirius, the Company issued a zero coupon discount note to Seadrill in an initial amount of $70.0 million. The note was repayable in June 2015 and upon maturity, the Company was due to pay $73.0 million to Seadrill. The note was repaid in full in February 2014 with the proceeds from the term loan refinancing noted above.

•

$100.0 million Discount Note - In March 2014, as part of the acquisition of the West Sirius, Seadrill Capricorn Holdings issued a zero coupon discount note to Seadrill in an initial amount of $100.0 million. The note was repayable in September 2015 and upon maturity, the Company was due to pay $103.7 million to Seadrill. This note was repaid in June 2014 with proceeds from the term loan refinancing.

West Auriga Acquisition

In March 2014, a 51% owned subsidiary of the Company (Seadrill Capricorn Holdings LLC) acquired the entities that own and operate the West Auriga from Seadrill, which has been accounted for as a business combination. Refer to Note 5.

Purchase of additional limited partner interest in Seadrill Operating LP

West Vela Acquisition

On November 5, 2014, Seadrill Capricorn Holdings LLC completed the acquisition of the entities that own and operate the drillship, West Vela from Seadrill for an implied purchase price of $900 million. Refer to Note 12.

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.

Environmental and other indemnifications

Under the Omnibus Agreement, Seadrill has agreed to indemnify the Company for a period of 5 years after the IPO 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 $10.0 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 3 years after the closing of the IPO on October 24, 2012.

F-22

SEADRILL PARTNERS LLC

NOTES TO CONSOLIDATED AND COMBINED CARVE-OUT FINANCIAL STATEMENTS

(Unaudited)

Secured Credit Facility Indemnifications

Under the terms of the external secured credit facility agreements for the West Vencedor, T-15 and T-16, certain subsidiaries of Seadrill and the Company are jointly and severally liable for their own debt and obligations under the relevant facility and the debt and obligations of other borrowers who are also party to such agreements. These obligations are continuing and extend to amounts payable by any borrower under the relevant agreement. The total amount under the external facility which includes the West Vencedor as of September 30, 2014 is zero ($733.0 million as of December 31, 2013); the Company retains a related party balance as of September 30, 2014 of $78.2 million ($90.5 million as of December 31, 2013) payable to Seadrill. The total amount owed under the external facility which includes T-15 and T-16 as of September 30, 2014 is $275.5 million ($293.0 million as of December 31, 2013); the Company retains a related party balance as of September 30, 2014 of $168.7 million ($178.6 million as of December 31, 2013) payable to Seadrill. The Company has not recognized any amounts that are related to amounts owed by Seadrill subsidiaries. Additionally the Company has received an indemnity from Seadrill for any payments or obligations related these facilities that are not related to the West Vencedor, T-15 and T-16.

Note 10 – Commitments and contingencies

Pledged Assets

The book value of assets pledged under financing arrangements at September 30, 2014 was $4,415.3 million (December 31, 2013: $3,448.3 million).

Guarantees

At September 30, 2014, the Company had issued the following guarantees in favor of third parties which is the maximum potential future payment for each guarantee:



(In US$ millions)	September 30, 2014	December 31, 2013

Guarantees to customers of the Company's own performance	530.0	530.0
Guarantees in favor of banks	103.4	103.4
Total	633.4	633.4

Legal Proceedings

From time to time we are a party, as plaintiff or defendant, to lawsuits in various jurisdictions in the ordinary course of business or in connection with our acquisition or disposal activities. We believe that the resolution of such claims will not have a material impact individually or in the aggregate on our operations or financial condition. Our best estimate of the outcome of the various disputes has been reflected in our financial statements as of September 30, 2014.

F-23

SEADRILL PARTNERS LLC

NOTES TO CONSOLIDATED AND COMBINED CARVE-OUT FINANCIAL STATEMENTS

(Unaudited)

Note 11 - Earnings per unit and cash distributions

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



(In US$ millions,except per unit amounts)	Three months ended September 30,				Nine months ended September 30,
	2014		2013		2014		2013

Net income allocated to:
Common unitholders	$	42.0	$	10.9	$	81.1	$	34.2
Subordinated unitholders	9.2		3.3		23.1		21.9
Seadrill Member Interest (1)	2.8		11.2		0.8		46.2
Net income attributable to Seadrill Partners LLC owners	$	54.0	$	25.4	$	105.0	$	102.3

Weighted average units outstanding (basic and diluted) (in thousands):
Common unitholders	67,452		24,815		58,025		24,815
Subordinated unitholders	16,543		16,543		16,543		16,543

Earnings per unit (basic and diluted):
Common unitholders	$	0.62	$	0.44	$	1.40	$	1.38
Subordinated unitholders	$	0.56	$	0.20	$	1.40	$	1.32

Cash distributions declared and paid in the period per unit (2):	$	0.5425	$	0.4175	$	1.4950	$	1.0956
Subsequent event: Cash distributions declared and paid per unit relating to the period (3):	$	0.5525	$	0.4275	$	0.5525	$	0.4275

Subsequent event: on November 14, 2014, the Company paid a distribution of $0.5525 per unit relating to the three months ended September 30, 2014.

(1)

Pre-acquisition net income from entities acquired from Seadrill in common control transactions during 2013 has been allocated to the Seadrill member interest. The Seadrill member interest, and its rights to the incentive distribution rights, is owned by the predecessor owner of acquired entities, Seadrill Limited. Included within the amount allocated to the Seadrill member interest in the three months ended September 30, 2013 was $11.2 million ($46.2 million for the nine months ended September 30, 2013) allocated to the incentive distribution rights.


(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 is calculated as described in Note 17 to the Company's Consolidated and Combined Carve-Out Financial Statements for the year ended December 31, 2013 included in the Company's Form 20-F filed with the SEC.

Note 12 – Subsequent Events

On November 14, 2014 the Company paid a cash distribution to its common and subordinated unit holders with respect to the quarter ended September 30, 2014 of $0.5525 per unit.

On January 27, 2015 the Company declared a cash distribution to its common and subordinated unit holders with respect to the quarter ended December 31, 2014 of $0.5675 per unit. The distribution is payable on February 13, 2015 to unitholders of record as of the close of business on February 6, 2015.

West Vela Acquisition

On November 4, 2014, Seadrill Capricorn Holdings LLC, the Company's 51% owned subsidiary, acquired all of the ownership interests in the entities that own and operate the drillship West Vela from Seadrill. The implied

F-24

SEADRILL PARTNERS LLC

NOTES TO CONSOLIDATED AND COMBINED CARVE-OUT FINANCIAL STATEMENTS

(Unaudited)

purchase price was $900.0 million, less $433.0 million of debt outstanding under the existing secured debt facility financing the West Vela.

Under the terms of the West Vela contract, the customer is paying a daily rate of $565,000, plus approximately $44,000 per day as a mobilization fee paid over the term of the contract. In addition to the purchase price, Seadrill Capricorn Holdings LLC will pay Seadrill $40,000 per day of day rate revenue actually received, as well as the $44,000 per day mobilization fee. These payments to Seadrill will cease at the end of the current contract.

The purchase price will also be adjusted based on the net working capital balance within the entities acquired as of the date of sale. The Company is in the process of finalizing its accounting for the transaction.

F-25

EXHIBITS

The following exhibits are filed as part of this report:



Exhibit No.		Description

1		Contribution, Purchase and Sale Agreement, dated as of November 4, 2014, by and among Seadrill Limited, Seadrill Partners LLC, Seadrill Capricorn Holdings LLC and Seadrill Americas Inc.
2		Advisory, Technical and Administrative Services Agreement, dated as of February 15, 2013, between Seadrill Americas Inc. and Seadrill Gulf Operations Vela LLC
3		$1.45 Billion Second Amended and Restated Senior Secured Credit Facility Agreement, dated as of November 4, 2014, among Seadrill Vela Hungary Kft and Seadrill Tellus Ltd, as borrowers, Seadrill Limited as parent, Seadrill Capricorn Holdings LLC and the other companies listed therein as guarantors, the banks and financial institutions listed therein as lenders and ING Bank NV, as agent
4		On Demand Guarantee and Indemnity, dated as of October 28, 2014, between Seadrill Partners LLC, as guarantor, and ING Bank NV, as agent

THIS REPORT ON FORM 6-K IS HEREBY INCORPORATED BY REFERENCE INTO THE FOLLOWING REGISTRATION STATEMENTS OF THE REGISTRANT:

REGISTRATION STATEMENT ON FORM F-3 (NO. 333-192053) ORIGINALLY FILED WITH THE SEC ON NOVEMBER 1, 2013

REGISTRATION STATEMENT ON FORM F-3 (NO. 333-196286) ORIGINALLY FILED WITH THE SEC ON MAY 27, 2014

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: February 4, 2015



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

EXHIBIT 1

CONTRIBUTION, PURCHASE AND SALE AGREEMENT

Dated as of November 4, 2014

TABLE OF CONTENTS



	ARTICLE I
	DEFINITIONS
Section 1.1	Definitions	2

	ARTICLE II
	THE CONTRIBUTIONS, PURCHASES AND SALES
Section 2.1	Issuance of Capricorn Holdings Units to the Company in Exchange for Cash	6
Section 2.2	Issuance of Capricorn Holdings Units to Seadrill in Exchange for Cash	6
Section 2.3	Purchase and Sale of 100% Interest in Seadrill Gulf Vela	6
Section 2.4	Purchase and Sale of 100% Interest in Seadrill Vela Hungary	6
Section 2.5	Transfer of West Vela Acquisition Receivable	6
Section 2.6	Closing	6
Section 2.7	Working Capital Purchase Price Adjustment	6
Section 2.8	Satisfaction of Intercompany Receivables	6
Section 2.9	Set-Off	6
Section 2.10	Withholding Taxes	6
Section 2.11	West Vela BOP Charges	6

	ARTICLE III
	REPRESENTATIONS AND WARRANTIES OF SEADRILL
Section 3.1	Representations and Warranties	8

	ARTICLE IV
	REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 4.1	Representations and Warranties	13

	ARTICLE V
	REPRESENTATIONS AND WARRANTIES OF CAPRICORN HOLDINGS
Section 5.1	Representations and Warranties	14

	ARTICLE VI
	PRE-CLOSING MATTERS
Section 6.1	Covenants of Seadrill Prior to the Closing Date	15
Section 6.2	Covenant of the Company Prior to the Closing Date	15
Section 6.3	Covenant of Capricorn Holdings Prior to the Closing Date	15

	ARTICLE VII
	CONDITIONS OF CLOSING
Section 7.1	Conditions of the Parties	16



Section 7.2	Conditions of Seadrill and Seadrill Americas	16
Section 7.3	Conditions of the Company and Capricorn Holdings	16

	ARTICLE VIII
	TERMINATION, AMENDMENT AND WAIVER
Section 8.1	Termination of this Agreement	18
Section 8.2	Amendments and Waivers	18

	ARTICLE IX
	INDEMNIFICATION
Section 9.1	Indemnification by Seadrill and Seadrill Americas	19
Section 9.2	Limitations Regarding Indemnification	19
Section 9.3	Indemnification by the Company and Capricorn Holdings	19
Sections 9.4	Indemnification by Seadrill for Certain Liabilities Arising under Rig Financing Agreements	19

	ARTICLE X
	FURTHER ASSURANCES
Section 10.1	Further Assurances	20
Section 10.2	Power of Attorney	20

	ARTICLE XI
	MISCELLANEOUS
Section 11.1	Survival of Representations and Warranties	22
Section 11.2	Headings; References, Interpretation	22
Section 11.3	Successors and Assigns	22
Section 11.4	No Third Party Rights	22
Section 11.5	Counterparts	22
Section 11.6	Governing Law	22
Section 11.7	Severability	22
Section 11.8	Deed; Bill of Sale; Assignment	22
Section 11.9	Integration	22

Schedule A	Insurance Policies	25
Schedule B	Vessel Registration and Classification	26

Exhibit A	Form of Letter Agreement	27

CONTRIBUTION, PURCHASE AND SALE AGREEMENT

This CONTRIBUTION, PURCHASE AND SALE AGREEMENT (this “Agreement”), dated as of November 4, 2014 is made by and among Seadrill Limited, a Bermuda exempted company (“Seadrill”), Seadrill Partners LLC, a Marshall Islands limited liability company (the “Company”), Seadrill Capricorn Holdings LLC, a Marshall Islands limited liability company (“Capricorn Holdings”), and Seadrill Americas Inc., a Texas corporation (“Seadrill Americas”). The above-named entities are sometimes referred to in this Agreement each as a “Party” and collectively as the “Parties.”

RECITALS

WHEREAS, the Company owns 15,300 units, representing a 51% limited liability company interest in Capricorn Holdings, and Seadrill owns 14,700 units, representing a 49% limited liability company interest in Capricorn Holdings;

WHEREAS, Seadrill Vela Hungary Kft., a Hungarian limited liability company (“Seadrill Vela Hungary”), is the record owner of the drillship, the West Vela;

WHEREAS, Seadrill is the record owner of all of the equity interests in Seadrill Vela Hungary;

WHEREAS, Seadrill Americas is the record owner of all of the equity interests in Seadrill Gulf Operations Vela LLC, a Delaware limited liability company (“Seadrill Gulf Vela”);

WHEREAS, the West Vela is subject to a contract for offshore drilling services, dated October 10, 2012, between Seadrill Deepwater Contracting Ltd., a Bermuda exempted company (“Seadrill Deepwater Contracting”), and BP Exploration and Production Inc., a Delaware corporation (“BP”), as amended by Amendment No. 1, dated March 26, 2014, Amendment No. 2, dated May 5, 2014, and Amendment No. 3, dated May 6, 2014, and on February 15, 2013, Seadrill Deepwater Contracting entered into an Assignment Agreement whereby it transferred its rights and obligations under such drilling contract to Seadrill Gulf Vela (the resulting drilling contract following such assignment and novation, the “West Vela Drilling Contract”);

WHEREAS, Seadrill Vela Hungary and Seadrill Gulf Vela are party to a bareboat charter, dated June 13, 2013 (the “West Vela Bareboat Charter”); and

WHEREAS, pursuant to this Agreement, each of the following will occur on the Closing Date (as defined in Section 2.6):


1.	The Company will contribute to Capricorn Holdings $238,177,082 in exchange for 5,100 units representing limited liability company interests in Capricorn Holdings;


2.	Seadrill will contribute to Capricorn Holdings $228,836,805 in exchange for 4,900 units, representing limited liability company interests in Capricorn Holdings;


3.	Seadrill Americas will sell and transfer to Capricorn Holdings, and Capricorn Holdings will purchase from Seadrill Americas, 100% of the outstanding membership interests in Seadrill Gulf Vela, in exchange for $128,227,891 in cash;

Seadrill will sell and transfer to Capricorn Holdings, and Capricorn Holdings will purchase from Seadrill, 100% of the ownership interests in Seadrill Vela Hungary, in exchange for (i) $338,785,996 in cash, (ii) the payment (computed in accordance with Section 2.4) of an amount equal to $40,000.00 per day multiplied by the applicable percentage of the day rate actually received for each day after Closing under the West Vela Drilling Contract through the remaining term, without options, of the West Vela Drilling Contract as in effect on the date of this Agreement (the “Day Rate Earn Out”) and (iii) all amounts payable as the “Amortized Rig Rate Charge”, as defined and determined in Articles 10.5 through 10.8 of Section 5 of the West Vela Drilling Contract (the “Amortized Charge Earn Out”, and, together with the Day Rate Earn Out, the “Earn Out”); and


5.	Seadrill will transfer to Capricorn Holdings the receivable associated with the intercompany debt in the amount of approximately $188 million currently owed by Seadrill Vela Hungary to Seadrill in relation to the original acquisition of the West Vela (the “West Vela Acquisition Receivable”).

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 1
DEFINITIONS

Section 1.1 Definitions. The following defined terms will have the meanings given below:

“1934 Act Filings” means the filings made with the Securities and Exchange Commission under the Securities Exchange Act of 1934 by Seadrill or the Company, as the case may be.

“Agreement” means this Contribution, Purchase and Sale Agreement.

“Amortized Charge Earn Out” has the meaning set forth in the Recitals of this Agreement.

“BP” has the meaning set forth in the Recitals of this Agreement.

“Capricorn Holdings” has the meaning set forth in the Recitals of this Agreement.

“Capricorn Holdings Operating Agreement” has the meaning set forth in Section 5.1(c).

“Closing Date” has the meaning set forth in Section 2.6.

“Company” has the meaning set forth in the opening paragraph of this Agreement.

“Company Attorney-in-Fact” has the meaning set forth in Section 10.2(a).

“Company Indemnitees” has the meaning set forth in Section 9.1 of this Agreement.

“Company Indemnitors” has the meaning set forth in Section 9.3 of this Agreement.

“Covered Assets” has the meaning set forth in Section 9.1(b).

“Covered Environmental Losses” means all Losses suffered or incurred by the Company or Capricorn Holdings by reason of, arising out of or resulting from:

(a) any violation or correction of violation of Environmental Laws with regard to the ownership or operation by Seadrill, Seadrill Americas or Seadrill Vela Hungary of the Covered Assets; or

(b) any event or condition relating to environmental or human health and safety matters, in each case, associated with the ownership or operation by Seadrill, Seadrill Americas or Seadrill Hungary Vela of the Covered Assets (including, without limitation, the presence of Hazardous Substances on, under, about or migrating to or from the Covered Assets or the disposal or release of, or exposure to, Hazardous Substances generated by or otherwise related to operation of the Covered Assets), including, without limitation, the reasonable and documented cost and expense of (i) any investigation, assessment, evaluation, monitoring, containment, cleanup, repair, restoration, remediation or other corrective action required or necessary under Environmental Laws, (ii) the preparation and implementation of any closure, remedial, corrective action or other plans required or necessary under Environmental Laws and (iii) any environmental or toxic tort (including, without limitation, personal injury or property damage claims) pre-trial, trial or appellate legal or litigation support work,

but only to the extent that such violation complained of under clause (a), or such events or conditions included in clause (b), occurred before the Closing Date; and, provided that in no event shall Losses to the extent arising from a change in any Environmental Law after the Closing Date be deemed “Covered Environmental Losses.”

“Day Rate Earn Out” has the meaning set forth in the Recitals of this Agreement.

“Earn Out” has the meaning set forth in the Recitals of this Agreement.

“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.

“Financing Agreements” means collectively the (1) Amended and Restated Revolving Loan Agreement dated August 31, 2013 between Seadrill Operating, Seadrill Capricorn Holdings and Seadrill Partners Operating LLC, as borrowers, and Seadrill, as lender, as amended, (2) Credit Agreement, dated as of February 21, 2014 as amended and restated as of June 26, 2014, among Seadrill Operating LP, Seadrill Partners Finco LLC and Seadrill Capricorn Holdings LLC, as Borrowers, Deutsche Bank AG New York Branch, as administrative agent, and the banks and financial institutions named therein as lenders, (3) $440,000,000 Senior Secured Credit Facility Agreement dated December 4, 2012, as amended, among Seadrill, as Borrower, the subsidiaries of Seadrill named therein as guarantors, and the banks and financial institutions named therein as lenders, and (4) the Rig Financing Agreements.

“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.

“Hazardous Substances” means (a) each substance defined, designated or classified as a hazardous waste, hazardous substance, hazardous material, solid waste, contaminant or toxic substance under Environmental Laws; (b) petroleum and petroleum products, including crude oil and any fractions thereof; (c) natural gas, synthetic gas and any mixtures thereof; (d) any radioactive material; and (e) any asbestos‑containing materials in a friable condition.

“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.

“Law” has the meaning set forth in Section 3.1(c).

“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.

“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.

“Party” or “Parties” has the meaning set forth in the opening paragraph of this Agreement.

“Rig Financing Agreements” means the West Vela Credit Facility and any documents related thereto.

“Rig Financing Indemnitees” has the meaning set forth in Section 9.4.

“Seadrill” has the meaning set forth in the opening paragraph of this Agreement.

“Seadrill Americas” has the meaning set forth in the opening paragraph of this Agreement.

“Seadrill Attorney-in-Fact” has the meaning set forth in Section 10.2(b).

“Seadrill Deepwater Contracting” has the meaning set forth in the Recitals of this Agreement.

“Seadrill Gulf Vela” has the meaning set forth in the Recitals of this Agreement.

“Seadrill Indemnitees” has the meaning set forth in Section 9.3 of this Agreement.

“Seadrill Indemnitors” has the meaning set forth in Section 9.1 of this Agreement.

“Seadrill Vela Hungary” has the meaning set forth in the Recitals of this Agreement.

“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.

“Transferred Subsidiaries” means, collectively, Seadrill Gulf Vela and Seadrill Vela Hungary.

“Transferred Subsidiary Contracts” has the meaning set forth in Section 3.1(p) of this Agreement.

“West Vela Acquisition Receivable” has the meaning set forth in the Recitals of this Agreement.

“West Vela Bareboat Charter” has the meaning set forth in the Recitals of this Agreement.

“West Vela BOP Charges” has the meaning set forth in Section 2.11 of this Agreement.

“West Vela Credit Facility” means the $1.45 billion Senior Secured Credit Facility dated March 20, 2013, as amended by two accession letters dated March 28, 2013, between, among others, (i) Seadrill Vela Hungary and Seadrill Tellus Ltd. as borrowers, (ii) Seadrill as guarantor, (iii) Seadrill Gulf Vela as intragroup charterer and guarantor, (iv) the banks and financial institutions listed therein as lenders and (iv) ING Bank N.V. as agent.

“West Vela Drilling Contract” has the meaning set forth in the Recitals of this Agreement.

“West Vela Purchase Price” has the meaning set forth in Section 2.4 of this Agreement.

“West Vela WC Purchase Price Adjustment” has the meaning set forth in Section 2.7(a) of this Agreement.

ARTICLE II

THE CONTRIBUTIONS, PURCHASES AND SALES

On the Closing Date, the Parties agree that the following transactions shall be completed in the order set forth below.

Section 2.1 Issuance of Capricorn Holdings Units to the Company in Exchange for Cash. Capricorn Holdings shall issue to the Company 5,100 units, representing limited liability company interests in Capricorn Holdings, in exchange for a contribution of $238,177,082 in cash.

Section 2.2 Issuance of Capricorn Holdings Units to Seadrill in Exchange for Cash. Capricorn Holdings shall issue to Seadrill 4,900 units, representing limited liability company interests in Capricorn Holdings, in exchange for a contribution of $228,836,805 in cash.

Section 2.3 Purchase and Sale of 100% Interest in Seadrill Gulf Vela. Seadrill Americas shall sell and transfer to Capricorn Holdings, and Capricorn Holdings shall purchase from Seadrill

Americas, 100% of the outstanding membership interests in Seadrill Gulf Vela, in exchange for $128,227,891 in cash.

Section 2.4 Purchase and Sale of 100% Interest in Seadrill Vela Hungary. Seadrill shall sell and transfer to Capricorn Holdings, and Capricorn Holdings shall purchase from Seadrill, 100% of the ownership interests in Seadrill Vela Hungary, in exchange for (i) $338,785,996 in cash and (ii) payment of the Earn Out (collectively, the “West Vela Purchase Price”). The Earn Out shall be due and payable by Capricorn Holdings to Seadrill within 30 days following the end of each calendar quarter with respect to all Earn Out amounts actually received under the West Vela Drilling Contract during such calendar quarter. The Day Rate Earn Out shall be calculated for any given period by multiplying $40,000.00 by the applicable day rate percentage set forth in Table 14.1A, Item B of Article 14 of Section 5 of the West Vela Drilling Contract. No contract day rate escalation provisions shall be applied in relation to the $40,000.00 basis for calculating the Day Rate Earn Out.

Section 2.5 Transfer of West Vela Acquisition Receivable. Seadrill shall transfer to Capricorn Holdings the West Vela Acquisition Receivable.

Section 2.6 Closing. On the terms and subject to the conditions of this Agreement, the contributions, purchases, transfers, sales and equity issuances set forth in Section 2.1 through Section 2.5 shall take place within 30 days of after the date hereof, or on such other date as may be agreed upon by the Parties (the “Closing Date”).

Section 2.7 Working Capital Purchase Price Adjustment.

(a) The West Vela Purchase Price shall be increased or decreased by an amount equal to the amount by which all net working capital (excluding inventory and debt) reflected on the books and records as of the Closing Date of the Transferred Subsidiaries either exceeds or is less than $5,000,000 (the “West Vela WC Purchase Price Adjustment”).

(b) Within 30 days following the Closing Date, Seadrill and the Company shall agree on the amount of the West Vela WC Purchase Price Adjustment pursuant to Section 2.7(a), and Seadrill and the Company shall make settlement of the West Vela WC Purchase Price Adjustment within 30 days thereafter.

Section 2.8 Satisfaction of Intercompany Receivables. Seadrill hereby agrees that, with the exception of the debt related to the West Vela Acquisition Receivable, which is being transferred to Capricorn Holdings pursuant to Section 2.5, at or prior to Closing, Seadrill shall arrange for the extinguishment of the obligations of Seadrill Gulf Vela and Seadrill Vela Hungary, by settlement or any other manner in Seadrill’s sole discretion, in relation to all amounts payable to Seadrill and its subsidiaries by Seadrill Gulf Vela and Seadrill Vela Hungary.

Section 2.9 Set-Off. On the Closing Date, Capricorn Holdings may set off the amount owed by Seadrill to Capricorn Holdings pursuant to Section 2.2 against the cash liability of Capricorn Holdings to Seadrill to Section 2.4(i). Any exercise by Capricorn Holdings of its rights under this clause shall not limit or affect any other rights or remedies available to any party under this Agreement or otherwise.

Section 2.10 Withholding Taxes. Capricorn Holdings may reduce any payment of the West Vela Purchase Price, including the Earn Out and any West Vela WC Purchase Price Adjustment, for any applicable withholding taxes (without gross up) and Seadrill shall indemnify Capricorn Holdings and any of its applicable withholding agents for any withholding taxes required to be or have been withheld or deducted from a payment to Seadrill with respect to the West Vela Purchase Price, including the Earn Out and any West Vela WC Purchase Price Adjustment.

Section 2.11 West Vela BOP Charges. Seadrill hereby agrees that it shall be responsible for payment of any amounts currently owed, or arising after the date hereof, in connection with the purchase, receipt, and commissioning of the spare blowout preventer for the West Vela (the “West Vela BOP Charges”).

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SEADRILL

Section 3.1 Representations and Warranties. Seadrill hereby represents and warrants to the Company, as of the date hereof and as of the Closing Date, as to itself and as to Seadrill Americas, each of the Transferred Subsidiaries and the West Vela, as the case may, be that:

(a) Each of Seadrill, Seadrill Americas and the Transferred Subsidiaries has been duly formed or incorporated and is validly existing and in good standing under the laws of its respective jurisdiction of formation or incorporation and has all requisite power and authority to operate its assets and conduct its business as it is now being conducted and, in the case of Seadrill, as described in its 1934 Act Filings. No Insolvency Event has occurred with respect to Seadrill, Seadrill Americas or the Transferred Subsidiaries 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;

(b) Each of Seadrill and Seadrill Americas 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 by Seadrill and Seadrill Americas and the execution and delivery of all documents, instruments and agreements required to be executed and delivered by Seadrill, Seadrill Americas and each of the Transferred Subsidiaries 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 the part of Seadrill, Seadrill Americas and each of the Transferred Subsidiaries party hereto or thereto, and this Agreement has been duly executed and delivered by Seadrill and Seadrill Americas and constitutes a legal, valid and binding obligation of Seadrill and Seadrill Americas, enforceable 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;

(c) The execution, delivery and performance by Seadrill, Seadrill Americas and each of the Transferred Subsidiaries, as applicable, of this Agreement and the transactions contemplated hereunder 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) Seadrill’s, Seadrill Americas’ or the Transferred Subsidiaries’ articles of association, articles of incorporation or bylaws or certificate of formation or limited liability company agreement or other organizational documents; (ii) any lien, encumbrance, security interest, pledge, mortgage, charge, other claim, bond, indenture, agreement, contract, franchise license, permit or other instrument or obligation to which Seadrill, Seadrill Americas or any of the Transferred Subsidiaries is a party or is subject or by which any of Seadrill’s, Seadrill Americas’ or any of the Transferred Subsidiaries’ assets or properties may be bound; (iii) any applicable laws, statutes, ordinances, rules or regulations promulgated by a governmental authority, orders of a governmental authority, judicial decisions, decisions of arbitrators or determinations of any governmental authority or court (“Laws”); or (iv) the West Vela Drilling Contract or any material provision of any material contract to which Seadrill, Seadrill Americas or any of the Transferred Subsidiaries is a party or by which the assets of Seadrill, Seadrill Americas or any of the Transferred Subsidiaries are bound;

(d) Except as have already been obtained or that will be obtained in the ordinary course of business, 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 Seadrill and Seadrill Americas of this Agreement or the consummation by Seadrill, Seadrill Americas and each of the Transferred Subsidiaries of the transactions contemplated hereunder, and any consents required for the transfer or assignment of the West Vela Drilling Contract have been duly obtained;

(e) As of the date hereof, (i) Seadrill owns, directly or indirectly, all of the outstanding equity interests of Seadrill Vela Hungary and has good and marketable title thereto, free and clear of any and all Encumbrances, other than those arising under the Rig Financing Agreements and applicable securities laws and (ii) Seadrill Americas owns all of the outstanding equity interests of Seadrill Gulf Vela and has good and marketable title thereto free and clear of any and all Encumbrances except for applicable securities laws;

(f) All of the issued and outstanding equity interests of each Transferred Subsidiary have been duly authorized and are validly issued in accordance with the articles of association, articles of incorporation, bylaws, certificate of formation, limited liability company agreement or other organizational documents of such Transferred Subsidiary and are fully paid and non‑assessable;

(g) There are not outstanding (i) any options, warrants or other rights to purchase any equity interests of any Transferred Subsidiary, (ii) any securities convertible into or exchangeable for equity interests of any Transferred Subsidiary, or (iii) any other commitments of any kind for the issuance of equity interests of any Transferred Subsidiary or options, warrants or other securities of any Transferred Subsidiary;

(h) There is no outstanding agreement, contract, option, commitment or other right or understanding in favor of, or held by, any person other than the Company to acquire any assets of the Transferred Subsidiaries;

(i) Correct and complete copies of the organizational documents of each Transferred Subsidiary (as amended to the date of this Agreement), the West Vela Drilling Contract and the West

Vela Bareboat Charter have been made available to the Company, and no amendments will be made to any such organizational documents prior to the Closing Date without the prior written consent of the Company (such consent not to be unreasonably withheld);

(j) Correct and complete copies of the Rig Financing Agreements have been made available to the Company. Each Rig Financing Agreement is a valid and binding agreement of the Transferred Subsidiaries party thereto, enforceable against each such Transferred Subsidiary in accordance with its terms and, to the knowledge of Seadrill, each of the Rig Financing Agreements 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;

(k) The West Vela Drilling Contract is a valid and binding agreement of Seadrill Gulf Vela and is enforceable against Seadrill Gulf Vela in accordance with its terms and, to the knowledge of Seadrill, the West Vela 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;

(l) Seadrill Gulf Vela has fulfilled all material obligations required pursuant to the West Vela Drilling Contract to have been performed by it prior to the date of this Agreement and has not waived any material rights thereunder; and no material default or breach exists in respect thereof on its part or, to Seadrill’s knowledge, any of the other parties thereto and, to Seadrill’s knowledge, no event has occurred which, after giving of notice or the lapse of time, or both, would constitute such a material default or breach;

(m) The West Vela Bareboat Charter is a valid and binding agreement of Seadrill Gulf Vela and Seadrill Vela Hungary and is enforceable against Seadrill Gulf Vela and Seadrill Vela Hungary 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;

(n) Except for such liabilities, debts obligations, encumbrances, defects, restrictions or claims of a general nature and magnitude that would arise in connection with the operation of a drillship of the same type as the West Vela in the ordinary course of business, there are no liabilities, debts or obligations of, encumbrances, defects or restrictions 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) with respect to the Transferred Subsidiaries, or claims against the Transferred Subsidiaries or any of the assets owned by the Transferred Subsidiaries, including the West Vela, other than those arising under or in connection with Rig Financing Agreements, the West Vela Drilling Contract, the West Vela Acquisition Receivable or the West Vela BOP Charges.

(o) Seadrill has disclosed to the Company all material information on, and about, each of the Transferred Subsidiaries and the West Vela and all such information is true, accurate and not misleading in any material respect. Nothing has been withheld from any materials provided by Seadrill to the Company in connection with the transactions contemplated by this Agreement that would render such information untrue or misleading;

(p) Seadrill has disclosed to the Company all material contracts and agreements, written or oral, to which any of the Transferred Subsidiaries is a party or by which any of their assets are bound, including the West Vela Drilling Contract, the West Vela Credit Facility and the West Vela Bareboat Charter (the “Transferred Subsidiary Contracts”);

(q) Each of the Transferred Subsidiary Contracts is a valid and binding agreement of the Transferred Subsidiaries party thereto, or Seadrill Americas, as applicable, enforceable against such Transferred Subsidiary or Seadrill Americas, as applicable, in accordance with its terms, and to the knowledge of Seadrill, each of the Transferred Subsidiary Contracts 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;

(r) Each of the Transferred Subsidiaries or Seadrill Americas, as applicable, has fulfilled all material obligations required pursuant to the Transferred Subsidiary Contracts to which it is a party to have been performed by it prior to the date hereof and has not waived any material rights thereunder;

(s) There has not occurred any material default on the part of any Transferred Subsidiary or Seadrill Americas under any Transferred Subsidiary Contracts to which it is a party, or to the knowledge of Seadrill, 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 any Transferred Subsidiary or Seadrill Americas under any of the Transferred Subsidiary Contracts to which it is a party nor, to the knowledge of Seadrill, 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 Transferred Subsidiary Contracts;

(t) Seadrill Vela Hungary now has, and at the Closing Date will have, good and marketable title to the West Vela and its equipment, free and clear of any and all Encumbrances, other than applicable securities laws and any intercompany payables that will be extinguished pursuant to Section 2.8 of this Agreement and those arising under the Rig Financing Agreements and permitted encumbrances under the Rig Financing Agreements and arising under the West Vela Acquisition Receivable. As of the date hereof, there is approximately $433.0 million of borrowings outstanding under the West Vela Credit Facility attributable to the West Vela;

(u) There is no action, suit or proceeding to which any of the Transferred Subsidiaries is a party (either as a plaintiff or defendant), or to which the West Vela is subject, pending before any court or governmental agency, authority or body or arbitrator; there is no action, suit or

proceeding threatened against any of the Transferred Subsidiaries or Seadrill Americas or the West Vela; and, to the best knowledge of Seadrill, there is no basis for any such action, suit or proceeding;

(v) None of the Transferred Subsidiaries or Seadrill Americas has 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;

(w) There is not in existence any order, judgment or decree of any court or other tribunal or other agency enjoining or requiring any of the Transferred Subsidiaries or Seadrill Americas to take any action of any kind with respect to their respective business, assets or properties;

(x) None of the Transferred Subsidiaries will be indebted, directly or indirectly, to any person who is an officer, director, stockholder or employee of such Transferred Subsidiary or any spouse, child, or other relative or any affiliate thereof, nor shall any such officer, director, stockholder, employee, relative or affiliate be indebted to such Transferred Subsidiary;

(y) Seadrill will cause Seadrill Vela Hungary to timely elect to be classified for U.S. federal income tax purposes as an entity disregarded as separate from its owner on a properly-completed Form 8832 filed with the Internal Revenue Service. Seadrill will also cause Seadrill Gulf Vela to timely elect to be classified for U.S. federal income tax purposes as an association taxable as a corporation on a properly-completed Form 8832 filed with the Internal Revenue Service. These elections for Seadrill Vela Hungary and Seadrill Gulf Vela have been or will be made with an effective date prior to the transaction described in Section 2.1. Once these elections have been made, neither Seadrill, Seadrill Vela Hungary nor Seadrill Gulf Vela will take any action to change the U.S. federal income tax classification of Seadrill Vela Hungary or Seadrill Gulf Vela from that provided in the elections described above;

(z) None of the Transferred Subsidiaries have any employees. All crew members with respect to the West Vela are provided directly or indirectly by subsidiaries of Seadrill pursuant to services agreements with the Transferred Subsidiaries;

(aa) A list of the insurance policies relating to the West Vela are set forth on Schedule A hereto, each of which is in full force and effect and, to the knowledge of Seadrill, not subject to being voided or terminated for any reason;

(bb) The West Vela (i) is adequate and suitable for use by the applicable Transferred Subsidiary in such Transferred Subsidiary’s business as presently conducted by it in all material respects, ordinary wear and tear excepted; (ii) is in good running order and repair; (iii) is in compliance with applicable laws and regulations; (iv) is duly registered under the flag set forth opposite its name on Schedule B hereto; (v) is in compliance in all material respects with the requirements of its present class and classification society as set forth opposite such its name on Schedule B hereto and has the highest classification rating; (vi) has class certificates that are clean and valid and free of recommendations or notations as to class or other requirement of the relevant classification society; and (vii) has been maintained in a proper and efficient manner in accordance with internationally accepted standards for good drillship maintenance, is in good operating order,

condition and repair and is seaworthy and all repairs made to the West Vela since its delivery from the shipyard and all known scheduled repairs due to be made and all known deficiencies have been disclosed to the Company;

(cc) The West Vela 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 the West Vela’s master and crew); or (iii) subject to a possessory lien;

(dd) No blacklisting or boycotting of any type has been applied or currently exists against, or in respect of, the West Vela; and

(ee) There are not outstanding any options or other rights to purchase the West Vela.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Section 4.1 Representations and Warranties. The Company hereby represents and warrants to Seadrill as of the date hereof and as of the Closing Date:

(a) The Company has been duly formed and is validly existing and in good standing under the laws of the Republic of the Marshall Islands and has all requisite limited liability company power and authority to own and operate its assets and conduct its business as described in its 1934 Act Filings. No Insolvency Event has occurred with respect to the Company 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;

(b) The Company 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 Company 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 Company and constitutes a legal, valid and binding obligation of it, enforceable 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;

(c) The execution, delivery and performance by the Company 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 limited liability company agreement; (ii) any lien, encumbrance, security interest, pledge, mortgage, charge, other claim, 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, including the Financing Agreements; or (iii) any applicable Laws; and

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF CAPRICORN HOLDINGS

Section 5.1 Representations and Warranties. Capricorn Holdings hereby represents and warrants to Seadrill and the Company as of the date hereof and as of the Closing Date that:

(a) Capricorn Holdings 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 Capricorn Holdings 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;

(b) Capricorn Holdings 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 Capricorn Holdings 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 or on its behalf, and this Agreement has been duly executed and delivered by it and constitutes a legal, valid and binding obligation of it, enforceable 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;

(c) The execution, delivery and performance by Capricorn Holdings 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 Limited Liability Company Agreement of Capricorn Holdings, dated as of September 27, 2012 (the “Capricorn Holdings Operating Agreement”); (ii) any lien, encumbrance, security interest, pledge, mortgage, charge, other claim, 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, including the Financing Agreements; or (iii) any applicable Laws;

(d) Except as have already been obtained or that will be obtained in the ordinary course of business, 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 Capricorn Holdings of this Agreement or the consummation by it of the transactions contemplated hereunder; and

(e) On the Closing Date, the 10,000 units of Capricorn Holdings to be issued to the Company and Seadrill pursuant to Section 2.1 and Section 2.2, respectively, will be duly authorized and validly issued in accordance with the Capricorn Holdings Operating Agreement and will be fully paid (to the extent required under the Capricorn Holdings Operating Agreement) and nonassessable (except as such assessability may be affected by Sections 20, 31, 40 and 49 of the Marshall Islands LLC Act, and except as otherwise may be provided in the Capricorn Holdings Operating Agreement).

ARTICLE VI

PRE-CLOSING MATTERS

Section 6.1 Covenants of Seadrill Prior to the Closing Date. From the date of this Agreement to the Closing Date, Seadrill shall cause each of the Transferred Subsidiaries to conduct their business in the usual, regular and ordinary course in substantially the same manner as previously conducted. Seadrill shall not permit any of the Transferred Subsidiaries 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 Company prior to the date of this Agreement, without the prior consent of the Company (such consent not to be unreasonably withheld). In addition, Seadrill shall not permit any of the Transferred Subsidiaries to take any action that would result in any of the conditions to the contributions, purchases, sales and equity issuances set forth in Article II not being satisfied. Furthermore, Seadrill hereby agrees and covenants that it:

(a) shall cooperate with the Company 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 Transferred Subsidiary Contracts as a result of the contributions, purchases, sales and equity issuances set forth in Article II of 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 transactions contemplated by this Agreement and to cooperate with the Company in connection with the foregoing, including using all reasonable best efforts to obtain all necessary consents, approvals and authorizations from any governmental authority and each other Person that are required to consummate the transactions 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 contributions, purchases, sales and equity issuances set forth in Article II 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 West Vela Drilling Contract or the West Vela Bareboat Charter or any other Transferred Subsidiary Contract prior to the Closing Date without the prior written consent of the Company, 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 West Vela Drilling Contract, without the prior written consent of the Company, not to be unreasonably withheld or delayed;

(f) shall observe and perform in a timely manner, all of its covenants and obligations under the Transferred Subsidiary Contracts, if any, and in the case of a default by another party thereto, it shall forthwith advise the Company of such default and shall, if requested by the Company, enforce all of its rights under such Transferred Subsidiary 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 West Vela other than in connection with the Rig Financing Agreements; and

(h) shall permit representatives of the Company to make, prior to the Closing Date, at the Company’s risk and expense, such searches, surveys, tests and inspections of the West Vela as the Company may deem desirable; provided, however, that such surveys, tests or inspections shall not damage the West Vela or interfere with the activities of Seadrill or the customer thereon and that the Company shall furnish to Seadrill with evidence that the Company has adequate liability insurance in full force and effect.

Section 6.2 Covenant of the Company Prior to the Closing Date. The Company hereby agrees and covenants that during the period of time after the date of the Agreement and prior to the Closing Date, the Company shall, in respect of the contributions, purchases, sales and equity issuances to be effected hereunder at 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 contributions, purchases, sales and equity issuances and the execution, delivery and performance of this Agreement and any other agreements and documents contemplated hereby.

Section 6.3 Covenant of Capricorn Holdings Prior to the Closing Date. Capricorn Holdings hereby agrees and covenants that during the period of time after the date of the Agreement and prior to the Closing Date, Capricorn Holdings shall, in respect of the contributions, purchases, sales and equity issuances to be effected hereunder at 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 contributions, purchases, sales and equity issuances and the execution, delivery and performance of this Agreement and any other agreements and documents contemplated hereby.

ARTICLE VII
CONDITIONS OF CLOSING

Section 7.1 Conditions of the Parties. The obligation of the Parties to effect the contributions, purchases, transfers, sales and equity issuances set forth in Article II of this Agreement is subject to the satisfaction (or waiver by each of the Parties) on or prior to the Closing Date of the following conditions:

(a) Seadrill and the Transferred Subsidiaries, as applicable, 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 Transferred Subsidiary Contracts and the Rig 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;

(b) No legal or regulatory action or proceeding shall be pending or threatened by any governmental authority to enjoin, restrict or prohibit the transactions contemplated hereunder;

(d) Seadrill Gulf Vela and Seadrill Americas shall have entered into an Advisory, Technical and Administrative Services Agreement in a form satisfactory to the parties thereto; and

(e) The Company and Capricorn Holdings shall have obtained funds in order to consummate the transactions contemplated hereunder.

Section 7.2 Conditions of Seadrill and Seadrill Americas. The obligations of Seadrill and Seadrill Americas to effect the contributions, purchases, transfers and sales set forth in Article II of this Agreement are subject to the satisfaction (or waiver by each of Seadrill and Seadrill Americas) on or prior to the Closing Date of the following conditions:

(c) The representations and warranties of each of the Company and Capricorn Holdings made in this Agreement shall be true and correct in all material respects as of the Closing Date as though made at 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);

(d) Each of the Company and Capricorn Holdings 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 them by the Closing Date; and

(e) 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 Seadrill and Seadrill Americas and their counsel, and Seadrill and Seadrill Americas shall have received copies of all such documents and other evidence as they may reasonably request in order to establish the consummation of such transactions and the taking of all proceedings in connection therewith.

Section 7.3 Conditions of the Company and Capricorn Holdings. The obligations of the Company and Capricorn Holdings to effect the contributions, purchases, transfers, sales and equity issuances set forth in Article II of this Agreement are subject to the satisfaction (or waiver by each of the Company and Capricorn Holdings) on or prior to the Closing Date of the following conditions:

(a) The representations and warranties of Seadrill as to itself and as to Seadrill Americas, each of the Transferred Subsidiaries and the West Vela 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) Each of Seadrill, Seadrill Americas and the Transferred Subsidiaries 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 them;

(c) The results of the searches, surveys, tests and inspections of the West Vela referred to in Section 6.1(h) of this Agreement are reasonably satisfactory to the Company; and

(d) 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 Company and Capricorn Holdings and their counsel, and the Company and Capricorn Holdings shall have received copies of all such documents and other evidence as they or their counsel may reasonably request in order to establish the consummation of such transaction and the taking of all proceedings in connection therewith.

ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER

Section 8.1 Termination of this Agreement. Notwithstanding anything to the contrary in this Agreement, this Agreement may be terminated and the transactions contemplated by this Agreement abandoned at any time prior to the Closing Date:

(f) by mutual written consent of Seadrill, Seadrill Americas, the Company and Capricorn Holdings;

(g) by Seadrill and Seadrill Americas if any of the conditions set forth in Section 7.2 of this Agreement shall have become incapable of fulfillment, and shall not have been waived by Seadrill and Seadrill Americas; or

(h) by the Company and Capricorn Holdings if any of the conditions set forth in Section 7.3 shall have become incapable of fulfillment, and shall not have been waived by the Company and Capricorn Holdings;

provided, however, that the Parties seeking termination pursuant to clause (b) or (c) is not then in material breach of any of their representations, warranties, covenants or agreements contained in this Agreement.

Section 8.2 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 Company and Capricorn Holdings, on the one hand, or Seadrill and Seadrill Americas, 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 IX

INDEMNIFICATION

Section 9.1 Indemnification by Seadrill and Seadrill Americas. Subject to the provisions of Section 9.2, following the Closing Date, Seadrill and Seadrill Americas (the “Seadrill Indemnitors”) shall be liable for, and shall indemnify, defend and hold harmless the Company and Capricorn Holdings and their respective officers, directors, employees, agents and representatives (the “Company Indemnitees”) from and against:

(e) any Losses suffered or incurred by such Company 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 Seadrill or Seadrill Americas in or under this Agreement or in or under any document, instrument or agreement delivered pursuant to this Agreement by Seadrill or Seadrill Americas;

(f) any Covered Environmental Losses relating to the Transferred Subsidiaries or the West Vela prior to or at the Closing Date (the “Covered Assets”) to the extent that Seadrill and Seadrill Americas are notified by the Company and Capricorn Holdings of any such Covered Environmental Losses within five (5) years after the Closing Date;

(g) any Losses (other than Covered Environmental Losses) suffered or incurred by such Company Indemnitees in relation to the West Vela for periods prior to the Closing;

(h) all federal, state, foreign and local income tax liabilities attributable to the operation of the Covered Assets prior to the Closing Date, including any such income tax liabilities of Seadrill and Seadrill Americas that may result from the consummation of the transactions contemplated by this Agreement, but excluding any federal, state, foreign and local income taxes reserved on the books of the Transferred Subsidiaries on the Closing Date; and

(i) any fees, expenses or other payments incurred or owed by Seadrill or Seadrill Americas to any brokers, financial advisors or comparable other persons retained or employed by it in connection with the transactions contemplated by this Agreement.

Section 9.2 Limitations Regarding Indemnification.

(a) The aggregate liability of Seadrill and Seadrill Americas under Section 9.1 shall not exceed $450,000,000.

(b) All obligations of any party to indemnify, hold harmless pursuant to this Agreement, shall apply irrespective of cause and notwithstanding the negligence (whether sole, concurrent, joint, active or passive) or breach of duty (whether statutory, contractual or otherwise), gross negligence or willful misconduct, or the unseaworthiness of any vessel or unairworthiness of any

aircraft or is the result of any pre-existing condition, of the indemnified Party or any other entity or party; provided, however, that the following claims and all obligations to pay such claims shall be excluded from the obligations to indemnify and hold harmless hereunder: (i) fines and penalties imposed on any indemnitee up to the amount of $10 million; (ii) punitive damages up to the amount of $10 million; and (iii) any and all damages cause by a party’s gross negligence or willful misconduct up to the amount of $10 million.

Section 9.3 Indemnification by the Company and Capricorn Holdings. Following the Closing Date, the Company and Capricorn Holdings (the “Company Indemnitors”) shall be liable for, and shall indemnify, defend and hold harmless Seadrill and Seadrill Americas and their respective officers, directors, employees, agents and representatives (the “Seadrill Indemnitees”) from and against any Losses, suffered or incurred by such Seadrill 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 Company and Capricorn Holdings in or under this Agreement or in or under any document, instrument or agreement delivered pursuant to this Agreement by the Company and Capricorn Holdings or, to the extent such losses occur after the Closing Date, any Losses arising out of the West Vela Drilling Contract or any violation or correction of violation of Environmental Laws with regard to the ownership or operation by the Company and Capricorn Holdings or Seadrill Vela Hungary of the Covered Assets.

Section 9.4 Indemnification by Seadrill for Certain Liabilities Arising under Rig Financing Agreements.

Without regard to the limitation set forth in Section 9.2(a), following the Closing Date, Seadrill shall be liable for, and shall indemnify, defend and hold harmless the Company, Capricorn Holdings and Seadrill Vela Hungary and their respective officers, directors, employees, agents and representatives (the “Rig Financing Indemnitees”) from and against any (i) any payments of, or obligations with respect to, principal, interest, fees, costs, expenses, indemnities, or other amounts required to be made by such Rig Financing Indemnitees under the Rig Financing Agreements under or with respect to any loans thereunder other than those made in connection with the West Vela or the Transferred Subsidiaries, and (ii) Losses, suffered or incurred by such Rig Financing Indemnitees 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 Rig Financing Agreements, excluding any such Losses caused by Seadrill Vela Hungary or relating to the ownership or operation by Company, Capricorn Holdings or Seadrill Vela Hungary of the Covered Assets.

ARTICLE X

FURTHER ASSURANCES

Section 10.1 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) to 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) to more fully and effectively to vest in the applicable Parties and their respective successors and assigns beneficial and record title to the interests 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 10.2 Power of Attorney.

(a) Each of the Company and Capricorn Holdings hereby constitutes and appoints Georgina Sousa (the “Company 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 each of the Company and Capricorn Holdings and their successors and assigns, and for the benefit of the Company Attorney-in-Fact to demand and receive from time to time the interests contributed, conveyed, purchased, sold or issued pursuant to this Agreement (or intended so to be) and to execute in the name of the Company and Capricorn Holdings and their 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 Company and Capricorn Holdings for the benefit of the Company Attorney-in-Fact, any and all proceedings at law, in equity or otherwise which the Company Attorney-in-Fact may deem proper in order to (i) collect, assert or enforce any claims, rights or titles of any kind in and to the interests contributed, conveyed, assigned, assumed, purchase, sold or issued pursuant to this Agreement, (ii) defend and compromise any and all actions, suits or proceedings in respect of any of the interests contributed, conveyed, assigned, assumed, purchase, sold or issued pursuant to this Agreement (or intended so to be), and (iii) do any and all such acts and things in furtherance of this Agreement as the Company Attorney-in-Fact shall deem advisable. Each of the Company and Capricorn Holdings 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 Company and Capricorn Holdings or their successors or assigns or by operation of law.

(b) Each of Seadrill and Seadrill Americas hereby constitutes and appoints Georgina Sousa (the “Seadrill 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 Seadrill and Seadrill Americas and their successors and assigns, and for the benefit of the Seadrill Attorney-in-Fact to demand and receive from time to time the interests contributed, conveyed, purchased, sold or issued pursuant to this Agreement (or intended so to be) and to execute in the name of Seadrill and Seadrill Americas and their 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 Seadrill and Seadrill Americas for the benefit of the Seadrill Attorney-in-Fact, any and all proceedings at law, in equity or otherwise which the Seadrill Attorney-in-Fact may deem proper in order to (i) collect, assert or enforce any claims, rights or titles of any kind in and to the interests contributed, conveyed, assigned, assumed, purchase, sold or issued pursuant to this Agreement, (ii) defend and compromise any and all actions, suits or proceedings in respect of any of the interests contributed, conveyed, assigned, assumed, purchase, sold or issued pursuant to this Agreement, and (iii) do any and all such acts and things in furtherance of this Agreement as the Seadrill Attorney-in-Fact shall deem advisable. Each of Seadrill and Seadrill Americas 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 Seadrill or Seadrill Americas or their successors or assigns or by operation of law.

ARTICLE XI
MISCELLANEOUS

Section 11.1 Survival of Representations and Warranties. The representations and warranties of Seadrill as to itself and as to Seadrill Americas, each of the Transferred Subsidiaries and the West Vela contained in this Agreement and in or under any documents, instruments and agreements delivered pursuant to this Agreement, will survive the completion of the transactions contemplated hereby regardless of any independent investigations that the Company may make or cause to be made, or knowledge it may have, prior to the date of this Agreement and will continue in full force and effect for a period of one year from the date of this Agreement. At the end of such period, such representations and warranties will terminate, and no claim may be brought by the Company against Seadrill thereafter in respect of such representations and warranties, except for claims that have been asserted by the Company prior to the date of this Agreement.

Section 11.2 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, including, without limitation, all Schedules attached hereto, and not to any particular provision of this Agreement. All references herein to Articles, Sections and Schedules shall, unless the context requires a different construction, be deemed to be references to the Articles and Sections of this Agreement and the Schedules attached hereto, and all such Schedules attached hereto are hereby incorporated herein and made a part hereof for all purposes. 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 11.3 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns.

Section 11.4 No Third Party Rights. Other than the rights of indemnification provided to Capricorn Holdings’ withholding agents pursuant to Section 2.10 and Seadrill Vela Hungary pursuant to Section 9.4, 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 11.5 Counterparts. This Agreement may be executed in any number of counterparts with the same effect as if all signatory Parties had signed the same document. All counterparts shall be construed together and shall constitute one and the same instrument. The delivery of an executed counterpart copy of this Agreement by facsimile or electronic transmission in PDF format shall be deemed to be the equivalent of delivery of the originally executed copy thereof.

Section 11.6 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

Section 11.7 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 11.8 Deed; Bill of Sale; Assignment. To the extent required and permitted by applicable law, this Agreement shall also constitute a “deed,” “bill of sale” or “assignment” of the interests referenced herein.

Section 11.9 Integration. This Agreement and the instruments referenced herein supersede all previous understandings or agreements among the Parties, whether oral or written, with respect to the subject matter of this Agreement and such instruments. This Agreement and such instruments 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 after the date of this Agreement.

[THE REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK]

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

SEADRILL LIMITED

By:

Name:

Title:

SEADRILL PARTNERS LLC

By:

Name:

Title:

SEADRILL CAPRICORN HOLDINGS LLC

By:

Name:

Title:

SEADRILL AMERICAS INC.

By:

Name:

Title:

SIGNATURE PAGE

CONTRIBUTION, PURCHASE AND SALE AGREEMENT

SCHEDULE A

INSURANCE POLICIES



Type	Insurer	Policy Number	Effective Date(s)
Hull & Machinery, Hull Interest and Freight Interest	Marsh AS	21933/14	July 1, 2014 through June 30, 2015
War Risk	The Norwegian Shipowners’ Mutual War Risks Insurance Association	2014 11890 35 1	January 1, 2014 through December 31, 2014
Hull & Machinery, Hull Interest and Freight Interest	Lloyd & Partners Limited	PE1409806 PE1409813	July 1, 2014 through July 1, 2015
Comprehensive General Liability and P&I	Gard P. & I. (Bermuda) Ltd.	307.740	February 20, 2014 through February 20, 2015
Bunker Oil Pollution Damage	Safeguard Guarantee Company Ltd.	B 37605	February 20, 2014 through February 20, 2015

SCHEDULE A TO

CONTRIBUTION, PURCHASE AND SALE AGREEMENT

SCHEDULE B

VESSEL REGISTRATION AND CLASSIFICATION



Rig Name	Registered Flag	Classification Society
West Vela	Panama	American Bureau of Shipping

SCHEDULE B TO

CONTRIBUTION, PURCHASE AND SALE AGREEMENT

EXHIBIT A

FORM OF LETTER AGREEMENT

[Attached.]

EXHIBIT A TO

CONTRIBUTION, PURCHASE AND SALE AGREEMENT

[Seadrill Partners LLC letterhead]

November 4, 2014

Seadrill Partners LLC

2nd Floor, Building 11

Chiswick Business Park

566 Chiswick High Road

London W4 5YS

Seadrill Limited

Par-la-Ville Place, 4th Floor

14 Par-la-Ville Road

Hamilton HM 08 Bermuda

Reference is made to (i) the Contribution, Purchase and Sale Agreement, dated as of November 4, 2014 (the “Agreement”), by and among Seadrill Limited, a Bermuda exempted company (“Seadrill”), Seadrill Partners LLC, a Marshall Islands limited liability company (the “Company”), Seadrill Capricorn Holdings LLC, a Marshall Islands limited liability company (“Capricorn Holdings”), and Seadrill Americas Inc., a Texas corporation (“Seadrill Americas”) and (ii) the On Demand Guarantee, dated November 4, 2014, between the Company and ING Bank N.V. (the “Guarantee”). Capitalized terms used in this letter agreement and not otherwise defined herein will have the meanings ascribed to them in the Agreement.

The undersigned parties hereby agree that:

In exercising its rights to amend the Rig Financing Agreements as agent for the Obligors (as defined in the West Vela Credit Facility) pursuant to Section 2.3 of the West Vela Credit Facility, Seadrill will act reasonably and in good faith, considering the interests of the Company, Capricorn Holdings and Seadrill Vela Hungary, and, if reasonably practicable, Seadrill will consult with the Company prior to entering into any such amendments;

Subject to the rights of the lenders to require payment of all obligations under the West Vela Credit Facility prior to any claims for contribution among the guarantors, in the event that (a) the Company is required to make any payment pursuant to its guarantee obligations set forth in Section 2 of the Guarantee or (b) Seadrill is required to make any payment pursuant to its guarantee obligations set forth in Section 18.1 of the West Vela Credit Facility, Seadrill and the Company agree that (i) Seadrill shall pay, be liable for and reimburse to the Company all amounts not attributable to the tranches under the West Vela Credit Facility which relate to the Covered Assets and (ii) Seadrill and the Company shall cause Capricorn Holdings to pay all amounts attributable to the tranches under the West Vela Credit Facility which relate to the Covered Assets, and each of Seadrill and the Company shall pay, be liable for and contribute such amounts to Capricorn Holdings, in proportion to their ownership of Capricorn Holdings, as may be necessary for Capricorn Holdings to make such payment;

EXHIBIT A TO

CONTRIBUTION, PURCHASE AND SALE AGREEMENT

In the event that the Company, Capricorn Holdings or Seadrill Vela Hungary inform Seadrill of their intent to sell or refinance the Covered Assets, Seadrill will exercise commercially reasonable efforts in good faith to refinance the drillship West Tellus. In the event that Seadrill informs the Company of its intent to sell or refinance the West Tellus, then the Company will exercise commercially reasonable efforts in good faith to refinance the Covered Assets; and


4.	Seadrill and the Company each agree to cause their controlled affiliates to comply with the terms of the Rig Financing Agreements, and to exercise their best efforts to promptly cure any breach of representation, warranty, covenant or other obligation under the Rig Financing Agreements.

Please acknowledge your acceptance and agreement of this letter agreement by signing in the space provided below. Upon your execution of this letter agreement (or counterpart copies hereof), this letter agreement shall become binding on the parties hereto.

[Remainder of page intentionally left blank]

EXHIBIT A TO

CONTRIBUTION, PURCHASE AND SALE AGREEMENT

Very truly yours,

SEADRILL PARTNERS LLC

By:_____________________________

Name:________________________

Title: ________________________

EXHIBIT A TO

CONTRIBUTION, PURCHASE AND SALE AGREEMENT

Acknowledged and agreed:

SEADRILL LIMITED

By:_____________________________

Name:_________________________

Title: _________________________

EXHIBIT A TO

CONTRIBUTION, PURCHASE AND SALE AGREEMENT

EXHIBIT 2

ADVISORY, TECHNICAL AND ADMINISTRATIVE SERVICES AGREEMENT

between

Seadrill Americas Inc.

and

Seadrill Gulf Operations Vela LLC

CONTENTS

Clause Page


1.	SERVICES AND EFFECTIVE DATE 1


2.	SERVICES 1


3.	GENERAL CONDITIONS 3


4.	COMPENSATION 3


5.	INDEMNITY 4


6.	CONFIDENTIALITY 4


7.	TERM AND TERMINATION 5


8.	DEFAULT 6


9.	FORCE MAJEURE 6


10.	NOTICES 6


11.	MISCELLANEOUS 7


12.	GOVERNING LAW AND ARBITRATION 7

THIS ADVISORY, TECHNICAL AND ADMINISTRATIVE SERVICES AGREEMENT (the “Agreement”) is made on as of the Effective Date set forth below.

BETWEEN:


(1)	Seadrill Americas, Inc., a Texas corporation (the “Contractor”)

and


(2)	Seadrill Gulf Operations Vela LLC, a Delaware limited liability company (the “Company”)

(hereinafter jointly referred to as the “Parties” and, individually, as a “Party”).

WHEREAS, the Company wishes to engage the Contractor to provide such advisory, technical and administrative services to the Company on the terms set out herein;

NOW THEREFORE, the Parties have agreed as follows:


1.	SERVICES AND EFFECTIVE DATE


1.1	The Contractor shall provide the advisory, technical and general administrative services specified in this Agreement (the “Services”) to the Company subject to the terms and conditions set forth in this Agreement, as may be requested by the Company from time to time.


1.2	The effective date of this Agreement shall be February 15, 2013.


2.	SERVICES


2.1	The Contractor shall provide the following Services to the Company:


2.1.1	Operations Services


(a)	The Contractor shall develop standards for the technical operation of the Company’s vessels (the “Vessels”) and a policy in this respect.


(b)	The Contractor shall assist in the supervision of the activities of third party contractors employed by the Company in respect of certain elements of the technical management of the Vessels and, in particular:


(i)	look for similarities between the services utilized by other vessel owning companies in the Seadrill Group and potential for improvements or savings in this respect; the “Seadrill Group” means Seadrill Limited or any subsidiary thereof, except the Company and its subsidiaries;


(ii)	develop and implement strategies for the long term maintenance of the Vessels;


(iii)	supervise and co‑ordinate the policies in relation to emergency events;


(iv)	promote the most economical ways of operating the Vessels without compromising the safety of any Vessel or its crew;


(v)	minimize the environmental impact of the operation of the Vessels without compromising the safety of the Vessel or its crew; and


(vi)	ensure compliance with industry-based best practice “norms.”


(c)	The Contractor shall, on a regular basis, provide audits of contractors of technical services and equipment and crewing services, such audits to include physical inspections.


(d)	The Contractor shall provide assistance in purchasing materials and supplies for the Vessels and endeavor to achieve competitive terms from adequate suppliers.


2.1.2	Technical Supervision

The Contractor shall, throughout the term of this Agreement, provide Services in relation to the technical management of the Vessels. In particular the Contractor shall provide the following Services:


(a)	The Contractor shall follow up with regard to the requirements of classification societies and any relevant national authorities and provide assistance to the Company in ensuring that the Vessels comply with all recognized safety standards at any time.


(b)	The Contractor shall maintain good relations with Shipping Registries where the Vessels are or are intended to be registered.


(c)	The Contractor shall assist the Company in ensuring that the Vessels comply with contractual, technical and other commitments.


(d)	The Contractor shall regularly visit the Vessels and ensure that the standard of maintenance is kept at an acceptable level, that the crewing is adequate and that the operation is professional and satisfactory in every respect.


2.1.3	Accidents—Contingency Plans

The Contractor shall assist the Company in handling all accidents involving the Vessels in the course of operations. In particular, the Contractor shall establish a crisis management procedure, shall assist the Company in the development of a local crisis management procedure, and shall provide other advice and assistance in connection with crisis response, including crisis communications assistance.


2.1.4	General Administrative Services

The Contractor shall provide such general administrative services as may be required or specifically requested by the Company including accounting services, access to and consolidation of information in the Seadrill Group enterprise resource planning systems, and advice and assistance in the general administration and management of the business, subject to Section 7 hereof.


3.	GENERAL CONDITIONS


3.1	The Contractor shall, in performing its duties hereunder, serve the Company in good faith. In providing the Services hereunder, the Contractor shall:


(b)	protect and promote the Company’s interests;


(c)	observe all applicable laws and regulations relevant to the Vessel’s and the Company’s activities; and


(d)	always act in accordance with good and professional management practice.


3.2	The Contractor shall be entitled to provide Services to other companies or entities.

Such entities can either be other companies in the Seadrill Group or third party entities.


3.3	All discounts, commissions and other benefits received by the Contractor and/or its employees from third parties as a consequence of the provision of Services hereunder shall be disclosed and credited to the Company.


3.4	The Company shall, at any time upon request, be provided with any information from the accounts and records of the Contractor which is relevant and reasonably required for the performance of its obligations vis‑à‑vis the Company hereunder.

Such information shall be provided to such persons as shall be specifically authorized by the Company. Representatives of the Company’s auditor shall, in relation to the audit of the Company’s accounts, always be considered authorized.


3.5	The Contractor shall, upon request, provide the Company with copies of all documents relevant to the Company in its possession and otherwise compile such facts and records on the basis of such documents as shall, from time to time, be requested by the Company.


4.	COMPENSATION


4.1	Each calendar quarter, the Company agrees to reimburse the Contractor for all costs and expenses reasonably incurred by the Contractor (the “Costs and Expenses”) in connection with the provision of the Services by the Contractor to the Company for such calendar quarter.


4.2	The Company shall pay to the Contractor a management fee as set forth in Schedule I attached hereto (the “Services Fee”), subject to Section 4.4.

4.3

The Services Fee shall be payable by the Company on a quarterly basis. Within 30 days following the end of each calendar quarter, the Contractor shall prepare a statement of Costs and Expenses incurred in providing the Services, setting forth the basis for calculation in such detail as reasonably requested. The Contractor shall then deliver an invoice to the Company for such costs together with the corresponding Services Fee. The Company shall pay undisputed charges within 30 days of receipt of the Contractor’s invoice.


4.4	The Company shall pay the Services Fee to the Contractor less any applicable withholding taxes.


4.5	The Parties shall review the Services Fee each year as of January 1, and the Contractor shall have the right to propose reasonable adjustments to the Services Fee. In no event

shall the Services Fee exceed the amounts charged by the Contractor to its affiliates wholly owned by Seadrill Limited.


5.	INDEMNITY

5.1

The Contractor shall be under no responsibility or liability for any loss or damage, whether loss of profits or otherwise, to the Company arising out of any act or omission involving any error of judgment or any negligence on the part of the Contractor or any of its officers, employees, agents and subcontractors in connection with the performance of the Services under this Agreement, unless the acts or omissions leading to a loss or damage are caused by fraud, gross negligence or willful misconduct on the part of the Contractor, its officers, employees or agents or subcontractors.

Notwithstanding anything to the contrary, unless the acts or omissions leading to a loss or damage are caused by or due to the fraud of the Contractor or its officers, employees, agents or subcontractors, the Contractor shall not, under any circumstances whatsoever, be liable to compensate the Company for any loss or damage in excess of ten (10) times the annual Services Fee.

5.2

The Company agrees to indemnify and keep the Contractor and its sub‑contractors, together with its sub‑contractors’ officers and employees, indemnified against any and all liabilities, costs, claims, demands, proceedings, charges, actions, suits or expenses of whatsoever kind or character that may be incurred or suffered by any of them howsoever arising (other than by reason of fraud, gross negligence or willful misconduct on the part of the Contractor or any of its officers, employees, agents and subcontractors) in connection with the provision of the Services or the performance of the Services hereunder.

The Contractor shall not be required to take any legal action on behalf of the Company unless being fully indemnified (to its reasonable satisfaction) for all costs and liabilities likely to be incurred or suffered by it as a consequence thereof.


5.3	The indemnities provided by the Company hereunder shall cover all reasonable costs and expenses payable or incurred by the Contractor in connection with any claims.


5.4	To the extent the Contractor is entitled to claim any indemnity in respect of amounts paid or discharged by the Contractor pursuant to this Agreement, these indemnities shall take effect as an obligation of the Company to reimburse the Contractor for making such payment or effecting such discharge.


5.5	The indemnification provided by this clause shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any statute, agreement, the organizational documents of the Company or otherwise, and shall continue after the termination of this Agreement.


6.	CONFIDENTIALITY


6.1	All Confidential Information developed by the Company or furnished to the Contractor or any of its employees, directors or sub‑contractors pursuant to this Agreement shall be the property of the Company, and shall be kept confidential by the Contractor, both during and after the term of this Agreement.


(a)	For the purpose of this clause, “Confidential Information” shall mean information relating to the business of the Company as well as all know‑how of which the

Contractor becomes aware or generates in the course of or in connection with the performance of its obligations hereunder.


(b)	The provisions of this clause shall not apply to Confidential Information which:


(i)	is required to be disclosed by law or court order; or


(ii)	has become public knowledge otherwise than as a result of the conduct of the Contractor.


(c)	The Company shall be entitled to any equitable remedy available at law or equity, including specific performance, against a breach by the Contractor of this obligation.


6.2	All Confidential Information developed by the Contractor furnished to the Company or any of its employees, directors or sub‑contractors pursuant to this Agreement shall be the property of the Contractor, and shall be kept confidential by the Company, both during and after the term of Agreement.


(a)	For the purpose of this clause, “Confidential Information” shall mean information relating to the business of the Contractor as well as all know‑how of which the Company becomes aware or generates in the course of or in connection with the performance of its obligations hereunder.


(b)	The provisions of this clause shall not apply to Confidential Information which:


(i)	is required to be disclosed by law or court order; or


(ii)	has become public knowledge otherwise than as a result of the conduct of the Company.


(c)	The Contractor shall be entitled to any equitable remedy available at law or equity, including specific performance, against a breach by the company of this obligation.


7.	TERM AND TERMINATION


7.1	This Agreement shall have an initial term of five (5) years unless terminated:


(d)	by the Board of Directors of the Company upon 90 days’ written notice for any reason in its sole discretion or pursuant to Section 8.1 hereof; or


(e)	by the Contractor upon 90 days’ written notice if:


(i)	there is a Change of Control of the Company or Seadrill Partners;


(ii)	a receiver is appointed for all or substantially all of the property of the Company;


(iii)	an order is made to wind up the Company;


(iv)	a final judgment, order or decree which materially and adversely affects the ability of the Company to perform under this Agreement shall have been obtained or entered against the Company, and such judgment, order or decree shall not have been vacated, discharged or stayed; or


(v)	the Company makes a general assignment for the benefit of its creditors, files a petition in bankruptcy or for liquidation, is adjudged insolvent or bankrupt, commences any proceeding for a reorganization or arrangement of debts, dissolution or liquidation.


7.2	Upon termination of this agreement, the Manager shall surrender to the Company any and all books, records, documents and other property in the possession or control of the Manager relating to this Agreement and to the business, finance, technology, trademark or affairs of the Company and its subsidiaries, and except as required by law, shall not retain any copies of the same.


8.	DEFAULT


8.1	Notwithstanding Section 7.1(a), if the Contractor shall, by any act or omission, be in breach of any material obligation under this Agreement and such breach shall continue for a period of 14 days after written notice thereof has been given by the Company to the Contractor, the Company shall have the right to terminate this Agreement with immediate effect by notice to the Contractor.

The right to terminate this Agreement shall be in addition to and without prejudice to any other rights which the Company may have against the Contractor hereunder.


9.	FORCE MAJEURE

Neither Party shall incur liability of any kind or nature whatsoever in relation to the other Party in the event of a failure to perform any of its obligations hereunder directly or indirectly caused by circumstances beyond the relevant Party’s reasonable control, such as war or war‑like activities, government orders, riots, civil commotion, strike, lock‑out or similar actions, an act of God, peril of the sea or any other similar cause.


10.	NOTICES

All correspondence or notices required or permitted to be given under this Agreement shall be given in English and sent by mail, telefax, electronic mail or delivered by hand at the following addresses:

If to the Company:

Seadrill Gulf Operations Vela LLC

11025 Equity Drive, Suite 150

Houston, Texas 77041

Attn: President

If to the Contractor:

Seadrill Americas Inc.

11025 Equity Drive, Suite 150

Houston, Texas 77041, USA

Telefax: + 1 713.329.1179

Attn: President

or such other address or telefax number as either Party may designate to the other Party in writing.


11.	MISCELLANEOUS


11.1	The Contractor shall not be entitled to assign its rights and/or obligations under this Agreement unless the prior written consent of the Company has been obtained. The Contractor may freely subcontract or sub‑license this Agreement, so long as the Contractor remains liable for performance of the Services and its obligations under this Agreement.


11.2	The relationship between the parties is that of independent contractor. Nothing in this Agreement shall be deemed to constitute a partnership or joint venture relationship between the Parties.


11.3	No term of this Agreement is enforceable by a person who is not a Party to it, except by the affiliates of the Company and/or the Contractor.


11.4	This Agreement shall not be amended, supplemented or modified save by written agreement signed by or on behalf of the Parties.


11.5	The failure of either party to enforce any term of this Agreement shall not act as a waiver. Any waiver must be specifically stated as such in writing.


11.6	If any provision herein is held to be void or unenforceable, the validity and enforceability of the remaining provisions herein shall remain unaffected and enforceable.


11.7	This Agreement shall be binding upon and inure to the benefit of the affiliates of the Company and/or the Contractor.


11.8	This Agreement may be executed in one or more signed counterparts, facsimile or otherwise, which shall together form one instrument.


12.	GOVERNING LAW AND ARBITRATION


12.1	This Agreement shall be governed by and interpreted in accordance with the law in England and Wales.


12.2	Any dispute, controversy or claim arising out of or relating to this Agreement, or the breach, termination or invalidity thereof, shall be settled by arbitration in accordance with the provisions of the Norwegian Arbitration Act 2004.

[SIGNATURE PAGE FOLLOWS]

For and on behalf of For and on behalf of

SEADRILL AMERICAS INC. SEADRILL GULF OPERATIONS VELA LLC

By: Seadrill Americas, Inc.,
its sole member

Signature Signature

Name with block letters Name with block letters

SIGNATURE PAGE TO
ADVISORY, TECHNICAL AND ADMINISTRATIVE SERVICES AGREEMENT

SCHEDULE I

Service Fee

The Services Fee shall be equal to the percentage of the Costs and Expenses for such calendar quarter in relation to the following services as set forth in the table below:



Service Category	Markup
Safety and environment	4.85%
General management	12.00%
Operational management	12.00%
Operations excellence	12.00%
Legal and contracts	12.00%
Technical department	4.85%
Operations and support	4.85%
Operations support maintenance	4.85%
Project organization	4.85%
Supply chain management	4.85%
Warehouse	4.85%
Commercial	4.85%
HR	No markup
Office Admin	No markup
Legal entity finance	No markup
Business finance	No markup
Accounts payable	No markup
Finance function management	No markup
IT	No markup
Tax	No markup
General	No markup



		EXHIBIT 3
USD 1,450,000,000 SECOND AMENDED AND RESTATED SENIOR SECURED CREDIT FACILITY AGREEMENT originally dated 20 March 2013, as previously amended by two accession letters each dated 28 March 2013, a first amendment and restatement agreement dated 21 March 2014, and two amendment letters dated 26 June 2014 and 15 October 2014, respectively and as further amended and restated as of the Effective Time. for Seadrill Tellus Ltd. and Seadrill Vela Hungary Kft. as Borrowers Seadrill Limited as Parent The companies named herein as Guarantors Provided by The Banks and financial institutions named herein as Lenders Arranged by ING Bank N.V. as Agent, K-sure Agent, Commercial Coordinator and Commercial Bookrunner and HSBC Bank plc as ECA Coordinator and ECA Bookrunner www.bahr.no

1 (1)



CONTENTS
Clause		Page

1.DEFINITIONS AND INTERPRETATION 5

2.THE FACILITY 22

3.PURPOSE 23

4.CONDITIONS PRECEDENT 24

5.UTILISATION 25

6.REPAYMENT AND REDUCTIONS 26

7.VOLUNTARY PREPAYMENT AND CANCELLATION 26

8.MANDATORY PREPAYMENT AND CANCELLATION 28

9.INTEREST 30

10.INTEREST PERIODS 31

11.CHANGES TO THE CALCULATION OF INTEREST 32

12.FEES 33

13.TAX GROSS-UP AND INDEMNITIES 34

14.INCREASED COSTS 37

15.OTHER INDEMNITIES 38

16.MITIGATION BY THE LENDERS 38

17.COSTS AND EXPENSES 39

18.GUARANTEE AND INDEMNITY 40

19.SECURITY 43

20.REPRESENTATIONS AND WARRANTIES 45

21.INFORMATION UNDERTAKINGS 49

22.FINANCIAL COVENANTS 51

23.GENERAL UNDERTAKINGS 52

24.DRILLSHIP COVENANTS 57

25.EVENTS OF DEFAULT 61

26.RECOURSE REQUIREMENTS AND RIGHT OF SUBROGATION 64

27.CHANGES TO THE PARTIES 65

28.ROLE OF THE AGENT 68

29.SHARING AMONG THE FINANCE PARTIES 76

30.PAYMENT MECHANICS 77

31.SET-OFF 79

32.NOTICES 79

33.CALCULATIONS 82

34.MISCELLANEOUS 82

35.GOVERNING LAW AND ENFORCEMENT 85

2 (2)

Schedule 1 Lenders and Initial Commitments

Schedule 2 Guarantors and Drillships

Schedule 3 Conditions Precedent (All conditions previously fulfilled)

Schedule 4 Form of Utilisation Request

Schedule 5 Form of Compliance Certificate

Schedule 6 Form of Transfer Certificate

Schedule 7 Repayments

Schedule 8 Corporate Structure

Schedule 9 Mandatory Cost Formula

Schedule 10 List of Norwegian Suppliers and Contracts

3 (3)

THIS SECOND AMENDED AND RESTATED SENIOR SECURED CREDIT FACILITY AGREEMENT IS EFFECTIVE AS OF THE EFFECTIVE TIME (AS DEFINED HEREIN) AND MADE BETWEEN:


(1)	Seadrill Tellus Ltd., organisation number 45260 of Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton, HM08, Bermuda and Seadrill Vela Hungary Kft., organisation number 13-09-162740 of 2724 Ujlengyel, Petofi Sandor utca 40, Hungary, as joint and several borrowers (each a “Borrower”, collectively the “Borrowers”);


(2)	Seadrill Limited, of Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton, HM08, Bermuda, organisation number 36832, as parent and guarantor (the “Parent” and/or a “Guarantor”);


(3)	The companies listed as Intra-Group Charterers or otherwise identified as Guarantors in Schedule 2 (Guarantors and Drillships) hereto, including Seadrill Capricorn Holdings LLC (“Seadrill Capricorn”), as joint and several guarantors (each a “Guarantor”, together with the Parent, the “Guarantors”) all being wholly or partially owned Subsidiaries of the Parent;


(4)	The banks and financial institutions listed as Commercial Lenders in Schedule 1 (Lenders and Initial Commitments) hereto, as the original commercial lenders (each a “Commercial Lender” together, the “Commercial Lenders”);


(5)	The banks and financial institutions listed as K-sure Lenders in Schedule 1 (Lenders and Initial Commitments) hereto, as the original K-sure lenders (together, the “K-sure Lenders”);


(6)	Citibank Europe PLC of Citibank Europe Plc, 1, North wall Quay, Dublin 1, Ireland, organisation number 132781 and the other bank or financial institutions designated as GIEK lenders (the “GIEK Lender”);


(7)	Citibank N.A., London Branch as GIEK guarantee holder on behalf of the GIEK Lender (the "GIEK Guarantee Holder");


(8)	The Export-Import Bank of Korea of 38 Eunhaeng-ro (16-1, Yeouido-dong), Yeongdeungpo-gu, Seoul 150-996, Republic of Korea, organisation number 111235-0000158 (“KEXIM”);


(9)	ING Bank N.V. of Bijlmerplein 888, 1102 MG Amsterdam, The Netherlands, organisation number 33031431 as facility agent, security agent, documentation agent, commercial coordinator commercial and bookrunner and ING Bank N.V., Seoul Branch, 15th Floor, Hungkuk Life Insurance Building, 226, Shinmunro 1-ga, Chongro-ku, Seoul 110-061, Korea as K-sure agent (together the “Agent”);


(10)	HSBC Bank plc of 8 Canada Square, Level 18, London E14 5HQ, United Kingdom, organisation number 14259 to act as ECA coordinator and ECA bookrunner;


(11)	The banks and financial institutions listed as Mandated Lead Arrangers in Schedule 1 (Lenders and Initial Commitments) hereto, as mandated lead arrangers (the “Mandated Lead Arrangers”); and


(12)	The banks and financial institutions listed in Schedule 1 (Lenders and Initial Commitments) hereto, as lead arrangers (the “Lead Arrangers”).

IT IS AGREED AS FOLLOWS

4 (4)

DEFINITIONS AND INTERPRETATION

Definitions

In this Agreement, unless the context otherwise requires:

“Accounting Principles” means, for the Parent, generally accepted accounting principles in the United States of America (US GAAP) and for any of the other Obligors or its Subsidiaries, generally accepted accounting principles in the jurisdiction of incorporation of that Obligor or its Subsidiaries.

“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.

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

“Applicable Margin” means;


4(a)	the Commercial Margin for the Commercial Facility;


4(b)	the GIEK Lender Margin for the GIEK Lender Facility;


4(c)	the KEXIM Margin for the KEXIM Facility; or


4(d)	the K-sure Lenders Margin for the K-sure Facility;

as the context may require.

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

“Assignment of Earnings Accounts” means an assignment agreement, (or, for companies in Norway (where direct assignment agreements are not permitted by law), sub-assignment agreements), collateral to this Agreement for the first priority assignment of the Earnings Accounts, to be made between the relevant Obligors and the 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).

“Assignment of Earnings” means an assignment agreement, (or, for companies in Norway (where direct assignment agreements are not permitted by law), sub-assignment agreements), collateral to this Agreement for the first priority assignment of the Earnings, to be made between the relevant Borrower and Intra-Group Charterer and the 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).

“Assignment of Insurances” means an assignment agreement, (or, for companies in Norway (where direct assignment agreements are not permitted by law), sub-assignment agreements), collateral to this Agreement for the first priority assignment of the Insurances to be made between the relevant Obligors and the 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).

5 (5)

“Auditors” means well reputable and internationally recognised accountancy firms acceptable to the Required Lenders such as PriceWaterhouseCoopers, Deloitte Touche Tohmatsu, EY 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 the period starting on Closing Date and ending on 31 October 2013.

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


12(a)	the amount of its participation in any outstanding Loans; and


12(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 Closing Date, after giving effect to the transactions contemplated by this Agreement, prepared and approved by an authorised officer of the Parent, each in form and substance satisfactory to the Agent addressed to, and/or capable of being relied upon by the Finance Parties.

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


14(a)	the interest (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


14(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).

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

“Cash” means


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

17(b)

cash deposits legally and beneficially owned by a member of the Group and which are deposited with (i) a Mandated Lead Arranger (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:


17(i)	is free from any Security Interest, other than pursuant to the Security Documents;

6 (6)


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

17(iii)

in the case of cash in hand or cash deposits held by a member of the Group other than the Borrowers, is (in the opinion of the Agent, upon such documents and evidence as the Agent may require the Borrowers 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 Borrowers 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 Borrowers to that Subsidiary.

“Cash Distributions from Investments” means aggregate cash received by the Parent, by way of dividends, in respect of its ownership interests in companies which the Parent does not control, but over which it exerts significant influence, as set out in the Compliance Certifcate. For the purpose of this definition, the terms “control” and “significant influence” shall have the meanings attributed to such terms under US GAAP.

“Cash Equivalent” means at any time:

19(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;


19(b)	commercial paper (debt obligations) not convertible or exchangeable to any other security;


19(i)	for which a recognised trading market exists;


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


19(iii)	which matures within one year after the relevant date of calculation; and


19(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;

19(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


19(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,

7 (7)


21(a)	the Base Case Model in agreed form to be delivered by the Parent to the Agent pursuant to Clause 4.1 (Conditions Precedent to the Closing Date); and


21(b)	any cash flow projections based in the form of 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.

“Closing Date” means 20 March 2013.

“Code” means the US Internal Revenue Code of 1986.

“Commercial Lenders” means banks and financial institutions listed as the Commercial Lenders in Schedule 1 (Lenders and Initial Commitments) and any New Lender, which in each case has not ceased to be a Party in accordance with the terms of this Agreement, but for the avoidance of doubt excluding the ECA Lenders.

“Commercial Commitments” means USD two hundred and three million (203,000,000).

“Commercial Facility” means the commercial facility made available under this Agreement as described in Clause 2.1 (d) (Facilities).

“Commercial Margin” means 3.0 per cent per annum.

“Commitment(s)” means:

29(a)

in relation to a Lender, the amount set opposite its name under the heading “Commitments” in Schedule 1 (Lenders and Initial Commitments) and the amount of any other Commitment transferred to it pursuant to Clause 27.3 (Assignments and transfers by the Lenders), however in relation to the GIEK Lender such commitment shall always be limited to eighty per cent (80%) of the Norwegian Contracts; and


29(b)	in relation to any New Lender or New GIEK Lender, the amount of any Commitment transferred to it pursuant to Clause 27.3 (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).

“Contract Memo” means a memo describing the inter-company charter arrangements and any other time charter arrangement relating to any of the Drillships, provided by the law firm BA-HR DA.

“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 one hundred and fifty million (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.

8 (8)

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

“Debt Service Cover Ratio” means the ratio of EBITDA of the respective Borrower to debt services (being all finance charges and principal) for the previous period of twelve (12) months of the respective Borrower.

“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 Date” means the day on which a Drillship was actually delivered from the Yard to the respective Borrower.

“Drillship” means each of the 6^th generation SHI S10000 ultra deepwater drillships listed in Schedule 2 (Guarantors and Drillships) each of which is owned by the respective Borrower as set out therein as at the time of the respective delivery from the Yard.

“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 Drillships, including (but not limited to):


39(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 Drillships;


39(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 Drillships;


39(c)	compensation payable to an Obligor in the event of any requisition of any of the Drillships or for the use of any of the Drillships by any government authority or other competent authority;


39(d)	remuneration for salvage, towage and other services performed by any of the Drillships payable to an Obligor;


39(e)	demurrage, detention and retention money receivable by an Obligor in relation to any of the Drillships;


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


39(g)	if and whenever any of the Drillships is employed on terms whereby any moneys falling within paragraphs 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 Drillship(s); and


39(h)	any other money whatsoever due or to become due to an Obligor from third parties in relation to any of the Drillships, or otherwise.

“Earnings Account” means each earnings account as described in Clause 23.13 (Earnings Accounts), and to which all the Earnings and any proceeds of the Insurances shall be paid.

9 (9)

“EBITDA” means (i) the earnings before interest expenses, taxes, depreciation and amortization of the Group on a consolidated basis (except for the calculation of the Debt Service Cover Ratio in which case the EBITDA shall be for the respective Borrower only) and (ii) the Cash Distributions from Investments, each 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 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.

“ECA Facilities” means the GIEK Lender Facility, the KEXIM-Facility and the K-sure Facility.

“ECA Lenders” means the GIEK Lender, KEXIM, and the K-sure Lenders.

"Effective Time" means time when the Agent has confirmed that it has received all conditions precedent to be delivered pursuant to the Second Amendment and Restatement Agreement, being ____November 2014.

“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 Drillships 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:


47(a)	the pollution or protection of the environment;


47(b)	harm to or the protection of human health;


47(c)	the conditions of the workplace; or


47(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 which are consolidated into the Parent's audited consolidated financial statements.

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

“Escrow Utilisation” means a Utilisation to be made to the Escrow Utilisation Account, and which can be made three (3) days prior to the actually delivery of a Drillship, and which can be released from the Escrow Utilisation Account in accordance with Clause 4.7 (Conditions for Escrow Utilisation) (c).

10 (10)

“Escrow Utilisation Account” means an account of the Yard as notified by a Borrower requesting a Utilisation to be made.

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

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

“Facility” means the senior secured credit facility, divided into the Commercial Facility, the GIEK Lender Facility, the KEXIM Facility and the K-sure Facility as further described in Clause 2 (The Facilities).

“FATCA” means:

sections 1471 to 1474 of the Code or any associated regulations or other official guidance;

any treaty, law, regulation or other official guidance enacted in any other jurisdiction, or relating to an intergovernmental agreement between the United States of America and any other jurisdiction, which (in either case) facilitates the implementation of paragraph (a) above; or

any agreement pursuant to the implementation of paragraphs (a) or (b) above with the United States of America Internal Revenue Service, the United States of America's government or any governmental or taxation authority in any other jurisdiction.

“FATCA Application Date” means:

in relation to a "withholdable payment" described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the United States of America), 1 January 2014;

in relation to a "withholdable payment" described in section 1473(1)(A)(ii) of the Code (which relates to "gross proceeds" from the disposition of property of a type that can produce interest from sources within the United States of America), 1 January 2017; or

in relation to a "passthru payment" described in section 1471(d)(7) of the Code not falling within paragraphs (a) or (b) above, 1 January 2017,

or, in each case, such other date from which such payment may become subject to a deduction or withholding required by FATCA as a result of any change in FATCA after the Closing Date.

“FATCA Deduction” means a deduction or withholding from a payment under a Finance Document required by FATCA.

“FATCA Exempt Party” means a Party that is entitled to receive payments free from any FATCA Deduction.

“FATCA Payment” means either:

the increase in a payment made by an Obligor to a Finance Party under Clause 13.5 (FATCA Deduction and gross-up by Obligor) or paragraph (b) of Clause 13.6 (FATCA Deduction by Finance Party); or

a payment under paragraph (d) of Clause 13.6 (FATCA Deduction by Finance Party).

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

“Final Maturity Date” means:

11 (11)


62(a)	for all Tranches collectively in respect of the Commercial Facility; 5 years from the First Utilisation Date.


62(b)	for a Tranche in respect of the GIEK Lender Facility; 12 years from the relevant Utilisation Date for that Tranche.


62(c)	for a Tranche in respect of the K-sure Facility; 12 years from the relevant Utilisation Date for that Tranche.


62(d)	for a Tranche in respect of the KEXIM Facility; 12 years from the relevant Utilisation Date for that Tranche.

“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 an Obligor.

“Finance Lease” means a lease or charterparty which (i) would be classified as a finance lease in accordance with the Accounting Principles of an Obligor or (ii) 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 GIEK Guarantee Holder and the Lenders, and to the extent any rights are provided, the term shall also include GIEK and K-sure.

“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):


66(a)	moneys borrowed and debit balances at banks or other financial institutions;


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


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


66(d)	the amount of any liability in respect of Finance Leases;


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


66(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);


66(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;

12 (12)


66(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;


66(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 30 days after the date of supply;


66(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


66(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:


67(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 the Agreement actually occurs, not to be later than the expiry of the Availability Period .

“Fixed Margin Period” shall have the meaning ascribed to it in Clause 9.5 (Fixing of the Margin for the GIEK Lender Facility).

“GIEK” means Garanti-Instituttet for Eksportkreditt of Dronning Maudsgate 15, Vika, N-0122 Oslo, Norway, organisation no. 974 760 908.

“GIEK Account” means the account held by GIEK with DNB Bank ASA, with account number 7694.05.63212.

“GIEK Guarantee” means the guarantee issued by GIEK to the GIEK Lender's satisfaction pursuant to the Conditions set out in GIEK's offer for buyer's credit guarantee no. 102009 in connection with the GIEK Lender Facility.

"GIEK Guarantee Holder" means Citibank N.A., London Branch.

“GIEK Lender Commitment” means USD five hundred and seventy five million (575,000,000) however never to exceed eighty per cent (80%) of the Norwegian Contract Value, neither for the GIEK Lender Facility as a whole or for any Tranche under the GIEK Lender Facility.

“GIEK Lender Facility” means the GIEK Lender facility made available under this Agreement as described in Clause 2.1 (Facilities) paragraph (a).

“GIEK Lender Margin” means;

for the Fixed Margin Period; 1.2 per cent per annum; or

13 (13)

for the New Fixed Margin Period; as agreed between the GIEK Lender and the Borrowers pursuant to Clause 9.5 (Fixing of the margin for the GIEK Lender Facility).

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

“Guarantees” 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).

“Holding Company” means a company which is defined as the parent company following the principles of the Norwegian Public Companies Act of 1997 No. 45 § 1-3.

“Hungarian Obligor” means an Obligor organised and existing under Hungarian law.

“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 Drillships or otherwise in connection with the Drillships and all benefits thereunder (including claims of whatsoever nature and return of premiums).

“Insurance Report” means an insurance report in form satisfactory to the Agent 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 requirements under Clause 24.3 (Insurance) prepared by AoN UK Ltd., or such other reputable insurance advisor approved by the Agent and the Borrowers.

“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 (Guarantors and Drillships), or as acceded for West Tellus to the Agreement and Finance Documents.

“Intra-Group Charterparty” means each of the intra-group charterparties entered into or to be entered into between the relevant Borrower and the relevant Intra-Group Charterer.

“ISM Code” means the International Safety 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.

“KEXIM” means the Export-Import Bank of Korea.

“KEXIM Commitments” means USD three hundred and thirty six million (336,000,000).

14 (14)

“KEXIM-Facility” means the KEXIM-facility made available under this Agreement as described in in Clause 2.1 (Facilities) paragraph (b).

“KEXIM Margin” means 3.0 per cent per annum.

“K-sure” means Korea Trade Insurance Corporation of 2-16 Floors, Seoul Central Building, 136 Seorin Dong, Jongro-ku, Seoul 110-729, Republic of Korea.

“K-sure Agent” means ING Bank N.V., Seoul Branch, 15th Floor, Hungkuk Life Insurance Building, 226, Shinmunro 1-ga, Chongro-ku, Seoul 110-061, Korea in its capacity as agent for the K-sure Facility as described in Clause 2.1(c) (The Facilities).

“K-sure Facility” means the K-sure facility made available under this Agreement as described in Clause 2.1 (Facilities) paragraph (c).

“K-sure Insurance Policy” means, in relation to each Drillship, the Medium and Long Term Export Insurance Policy, the General Terms and Conditions of Medium and Long Term Export Insurance (Buyer Credit, Standard) and the special terms and conditions attached thereto issued or, as the context may require, to be issued by K-sure in favour of the K-sure Lenders and satisfactory to the K-sure Lenders, providing political and commercial risks cover in an amount of up to ninety five per cent (95%) of the K-sure Lenders Commitments relevant to that Drillship plus interest accruing thereon.

“K-sure Lenders” means the banks and financial institutions listed as the K-sure Lenders in Schedule 1 (Lenders and Initial Commitments) and any New Lender, which in each case has not ceased to be a Party in accordance with the terms of this Agreement, but for the avoidance of doubt excluding the Commercial Lenders, the GIEK Lender and KEXIM.

“K-sure Lenders Margin” means 2.35 per cent per annum.

“K-sure Lenders Commitments” means USD three hundred and thirty six million (336,000,000).

“K-sure Premium” means, in relation to each K-sure Insurance Policy, the full sum payable to K-sure as stipulated in that K-sure Insurance Policy which such sums shall be from time to time adjusted by K-Sure in accordance with the terms of that K-sure Insurance Policy and K-sure's internal regulations and shall be agreed by the Borrowers.

“Lenders” means the lenders and financial institutions listed in Schedule 1 (Lenders and Initial Commitments), and any New Lender and/ or New GIEK 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:


105(a)	The applicable interest settlement rate for the relevant period as displayed on Reuters screen page Libor 01, or Libor 02, as appropriate; or


105(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,

15 (15)

as of 11.00 a.m. (London time) on the Quotation Day 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 all amounts outstanding under this Agreement relating to any of the Facilities from time to time (for the avoidance of doubt not including the GIEK Guarantee or the K-sure Insurance Policy) outstanding or a loan made or to be made under the Facility.

“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 Drillships, being the average of valuations of the Drillships obtained from two (2) of the Approved Brokers (elected by the Borrower), with or without physical inspection of the Drillships (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:


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


110(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


110(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 owning a drilling unit or any Subsidiary of the Parent which can be deemed a material member of the Group.

“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.

“MLP” means Master Limited Partnership.

“Mortgages” means each of the first priority mortgages and any deed of covenants collateral thereto, to be executed by each of the Borrowers against each of the respective Drillships in a Ship Registry in favour of the 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).

“Net Funded Debt” means on a consolidated basis for the Group all interest-bearing debt (for the avoidance of doubt including guarantees for such debt but avoiding double counting) less Cash and Cash Equivalents but excluding USD one hundred and fifty million (150,000,000).

“New Fixed Margin Period” shall have the meaning ascribed to it in Clause 9.5 (Fixing of the Margin for the GIEK Lender Facility).

“New GIEK Lender” means one or several institutions replacing a GIEK Lender under the GIEK Facility either pursuant to Clause 9.5 (Fixing the margin for the GIEK Lender Facility) or an entity that has been consented to by the Borrower (such consent not to be required if an Event of Default has occurred and

16 (16)

is continuing and otherwise 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), the relevant GIEK Lender and GIEK.

“New GIEK Lender Margin” means;


118(a)	For the Fixed Margin Period; up to 1.2 per cent per annum; or


118(b)	For the New Fixed Margin Period; as agreed between the New GIEK Lender and the Borrowers.

“New Lender” has the meaning set out in Clause 27 (Changes to the Parties).

“Norwegian Contracts” means the contracts for delivery of Norwegian equipment and services in relation to the building of the Drillships as more specifically listed in Schedule 10 (List of Norwegian Suppliers and Contracts).

“Norwegian Contract Value” means the aggregate value of the Norwegian Contracts.

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

"Operating Agreement" means the First Amended and Restated Operating Agreement of Seadrill Partners, entered into by Seadrill Member and the Parent, as amended from time to time in accordance with this Agreement.

“Original Financial Statements” means the audited consolidated financial statements of the Parent for the financial period ending on 31 December 2011.

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

“Permitted Encumbrances” means;


126(a)	liens for current crews' wages and salvage;


126(b)	any ship repairer's or outfitter's possessory lien arising by operation of law and any other liens incurred in the ordinary course of operating such Drillship and not exceeding USD 5,000,000;


126(c)	any lien created pursuant to the Security Documents; and


126(d)	any lien created by Seadrill Capricorn (excluding any liens over the shares in any Borrower or any Intra-Group Charterer).

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

“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).

“Quiet Enjoyment Letter” means a letter agreement between the Agent (on behalf of the Finance Parties) and the relevant end-user of a Drillship, to be entered into, if it is required by the relevant end-user pursuant to the relevant drilling contract, regulating the enforcement of a Mortgage on terms acceptable to the Agent (on behalf of the Finance Parties).

17 (17)

“Reference Banks” means the principal offices of each of HSBC Bank plc, ING Bank NV, Citibank N.A., London Branch and Norddeutsche Landesbank Girozentrale, or such other banks as appointed by the Agent in consultation with the Borrowers.

“Required Lenders” means the Lenders having the aggregate outstanding principal amounts and Available Commitments in excess of sixty six and two thirds per cent (66-2/3%), however, always to include approval from at least one Commercial Lender.

“Satisfactory Drilling Contract” means the current contract in place for the "West Vela" as further described in Schedule 2 (Guarantors and Drillships), and for the "West Tellus" a time charter contract, in form and substance satisfactory to the Lenders, (in their discretion) to any oil company satisfactory to the Required Lenders in their discretion, at a rate of at least USD 500,000 per day with a duration of at least 2 years.

"Seadrill Capricorn" means Seadrill Capricorn Holdings LLC, a limited liability company, being 49 % owned by the Parent and 51 % owned by Seadrill Partners, incorporated under the laws of Marshall Islands with registration number 962179.

“Seadrill Gulf Vela” means Seadrill Gulf Operations Vela LLC, a company incorporated under the laws of Delaware, which is a Guarantor pursuant to this Agreement.

“Seadrill Member” means Seadrill Member LLC, a limited liability company, being a wholly owned Subsidiary of the Parent, incorporated under the laws of the Republic of the Marshall Islands with registration number 962165.

“Seadrill Partners” means Seadrill Partners LLC, a limited liability company, being a partly owned Subsidiary of the Parent, incorporated under the laws of the Republic of the Marshall Islands with registration number 962166.

“Seadrill Partners Guarantee” means a guarantee provided by Seadrill Partners in favour of the Finance Parties, wherby Seadrill Partners guarantees for the obligations of Seadrill Vela in respect of the Tranches relating to the “West Vela”, limited to the amount of USD 497,500,000.

“Seadrill Vela” means Seadrill Vela Hungary Kft., a company incorporated under the laws of Hungary, which is a Borrower pursuant to this Agreement.

“Second Amendment and Restatement Agreement” means an amendment and restatement agreement to this Agreement, dated ____ November 2014.

“Security Documents” means 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 the Lenders).

“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 Closing Date and ending the date on which the Agent notifies the Borrowers and the other Finance Parties that:

18 (18)


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


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


139(c)	the Borrowers have no future or contingent liability under any provision of this Agreement and the other Finance Documents;


139(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


139(e)	there are no Commitments in force.

“Share Charges” means the first priority charges over all the shares, equity interest or membership interest (as applicable) of each of the Borrowers and the Intra-Group Charterers provided by the relevant shareholders (provided that such Intra-Group Charterer is a special purpose company) collateral to this Agreement as security for the Obligors’ obligations under the Finance Documents in the form and substance satisfactory to Agent (on behalf of the Finance Parties).

“Ship Registry” means the ship registry of Panama and such other ship registry as approved by the Agent.

"Solvent" means, with respect to any person on a particular date, that on such date (a) the present fair salable value of the assets of such person is not less than the amount that will be required to pay the probable liability of such person on its debts as they become absolute and matured, (b) such person does not intend to, and does not believe that it will, incur debts or liabilities beyond such person's ability to pay as such debts and liabilities mature and (c) such person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such person's property would be unreasonably small in relation to such business or such transaction.

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


143(a)	has direct or indirect control; or


143(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” 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 “taxes” and “taxation” shall be construed accordingly.

“Tax Deduction” means a deduction or withholding for or on account of Tax from a payment under a Finance Document, other than a FATCA Deduction.

“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:


146(a)	the net income, profits or gains of that Finance Party world wide; or

19 (19)


146(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.

“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 which are fully consolidated into the Parent's audited consolidated financial statements.

“Total Commitments” means the aggregate of the Commercial Commitments, the GIEK Lender Commitments, the KEXIM Commitments and the K-sure Lenders Commitments, being USD 1,450,000,000 at the Closing Date as that amount may be reduced, cancelled or terminated in accordance with this Agreement, and as further set out in Schedule 1 (Lenders and Initial Commitments).

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


149(a)	the actual, constructive, compromised, agreed, arranged or other total loss of such Drillship; and/or

149(b)

any hijacking, piracy, theft, condemnation, capture, seizure, destruction, abandonment, arrest, expropriation, confiscation, requisition or acquisition of such Drillship, 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:


149(a)	in the case of an actual total loss of any of the Drillship, the date on which it occurred or, if that is unknown, the date when such Drillship was last heard of;

149(b)

in the case of a constructive, compromised, agreed or arranged total loss of any of the Drillships, 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 Drillship was given to the insurers; and (ii) the date of compromise, arrangement or agreement made by or on behalf of the relevant Borrower with the relevant Drillship's insurers in which the insurers agree to treat such Drillship as a total loss; or


149(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.

“Tranche” has the meaning ascribed to such term as set out in Clause 2.1 (Facilities).

“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 Borrowers.

“Transfer Date” means, in respect of a Transfer (as defined in Clause 27.3 (Assignments and transfers by Lenders)) the later of:

20 (20)


150(a)	the proposed Transfer Date as set out in the Transfer Certificate relating to the Transfer; and


150(b)	the date on which the Agent executes the Transfer Certificate.

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

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

“Utilisation” means the utilisation of a Loan.

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

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

“VAT” means value added tax.

“Yard” means Samsung Heavy Industries Co., Ltd. (Korea).

Construction

In this Agreement, unless the context otherwise requires:

Clause and Schedule headings are for ease of reference only;

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

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

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;

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;

the “Agent”, the "GIEK Guarantee Holder", 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 assigns and permitted transferees and, in the case of the Agent, any person for the time being appointed as Agent in accordance with the Finance Documents;

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;

“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;

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;

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);

21 (21)

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.

Hungarian terms

In this Agreement, unless the context otherwise requires, where it relates to a Hungarian entity, a reference to:

a “Security Interest” includes zálog, jelzálog, óvadék, kezesség (készfizető kezesség), (engedményezés and tulajdon átruházása, vételi (visszavásárlási) jog alapítása or tulajdonjog fenntartása provided that the aim of the contract is to provide security);

a “winding up”, “administration” or “dissolution” includes csőd, felszámolás, végelszámolás, megszűntnek nyilvánítás and kényszertörlési eljárás;

a “receiver”, “administrator”, “administrative receiver”, “compulsory manager” or “similar officer” includes vagyonfelügyelő, ideiglenes vagyonfelügyelő, felszámoló, felügyelőbiztos, végelszámoló and végrehajtó;

a “moratorium” includes ideiglenes fizetési haladék, fizetési haladék and moratórium;

“expropriation”, “attachment”, “sequestration”, “distress”, “execution” or “any analogous process” includes ideiglenes intézkedés and all forms of bírósági végrehajtás (including foglalás, zár alá vétel and biztosítási intézkedés) and kisajátítás; and

“constitutional documents” includes társasági szerződés, alapító okirat, alapszabály, szervezeti és működési szabályzat, igazgatóság ügyrendje and felügyelő bizottság ügyrendje.

K-sure

Each Party agrees that (i) K-sure shall not have any obligations or liabilities under this Agreement unless and until it becomes a New Lender in accordance with Clause 27 (Changes to the Parties) (ii) K-sure shall be a third party beneficiary of the terms of this Agreement and the rights expressed to be for its benefit or exercisable by it under this Agreement and (iii) this Agreement may not be amended to limit, modify or eliminate any rights of K-sure without its prior written consent, save as per in accordance with Clause 34.3 (Amendments, consents and waivers).

THE FACILITIES

Facilities

Subject to the terms of this Agreement, the Lenders make available to the Borrowers, during the Availability Period, the following credit facilities for Utilisation in the aggregate principal amount of up to the Total Commitments, each a “Facility”, collectively the “Facilities”:

a term loan facility in an amount equal to the GIEK Lender Commitments granted by the GIEK Lender (the “GIEK Lender Facility”) conditional upon the issue of the GIEK Guarantee;

a term loan facility in an amount equal to the KEXIM Commitments granted by KEXIM (the “KEXIM Facility”);

a term loan facility in an amount equal to the K-sure Lenders Commitments granted by the K-sure Lenders (the “K-sure Facility”) conditional upon the issue of the K-sure Insurance Policy; and

a term loan facility in an amount equal to the Commercial Commitments granted by the Commercial Lenders (the “Commercial Facility”).

22 (22)

Each Facility shall be divided into three equal tranches (each a “Tranche”), each Tranche to be equal to thirty three and one third per cent (33⅓%) of the relevant Facility. Each Tranche shall be allocated to a Drillship.

Finance Parties’ rights and obligations

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.

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.

Parent's Authority

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:

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 shall be obliged to confirm such authority in writing upon the request of the Agent; and

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.

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.

PURPOSE

Purpose

Each Borrower shall apply all amounts utilised to them hereunder to finance (i) in part, the Norwegian content provided pursuant to the Norwegian Contracts and (ii) the remaining capital expenditures related to the Drillships upon delivery from the Yard.

Monitoring

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

23 (23)

CONDITIONS PRECEDENT

Conditions precedent for the Closing Date

The Finance Parties’ obligations under this Agreement will only become effective once the Agent has received all the documents and other evidence listed in Schedule 3 (Conditions Precedent) Part I (Conditions Precedent to the Closing Date), in form and substance satisfactory to the Agent (acting on the instructions from the Lenders). The Agent shall notify the Obligors and the other Finance Parties promptly upon being so satisfied.

Conditions precedent for each Utilisation Date

The Lenders will only be obliged to comply with Clause 5.4 (Lenders’ participation), if on the date of the proposed Utilisation Date, the Agent has received originals or certified copies of all of the documents and other evidence listed in Schedule 3 Part II (Conditions Precedent for each Utilisation), which shall be delivered five (5) Business Days prior to the proposed Utilisation Date at the latest (other than the documents which the Agent has confirmed in writing may be delivered at the Utilisation Date at the latest and subject to agreed closing mechanism), in form and substance satisfactory to the Agent.

As soon as possible and in any event no later than at the relevant Utilisation Date, and before any funds held in the Escrow Utilisation Account can be released, the Agent shall receive originals or certified copies of all of the documents and other evidence listed in Schedule 3 Part III (Closing Documents Utilisation Date), in form and substance satisfactory to the Agent.

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:

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

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.

the Agent has not received any notice from K-sure requesting the K-sure Lenders to suspend the making of all or part of the Loan and/or the K-sure Lenders are not required by the terms of the K-sure Insurance Policy to suspend the make of all or part of the Loan(s).

Conditions subsequent

It shall be a condition subsequent to the Lenders making the Loans and Commitments available within the relevant timeline as specified in Schedule 3 Part III (Conditions Subsequent) that the Agent has received originals or certified copies of all of the documents and other evidence listed in Schedule 3 Part III (Conditions Subsequent) in form and substance satisfactory to the Agent (acting on the instructions from the Required Lenders).

GIEK Lender conditions precedent

The Borrowers may not deliver a Utilisation Request unless the GIEK Lender has received evidence of the Norwegian Contracts, and evidence that the GIEK Lender Commitment will not exceed 80% of the Norwegian Contract Value.

The GIEK Lender 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 there shall not have been such changes in national or international monetary, financial, political or economic conditions or exchange controls or exchange rates as would in the GIEK Lender's reasonable view be likely to materially prejudice disbursement hereunder.

24 (24)

K-sure Lenders conditions precedent

The K-sure Lenders will only be obliged to comply with Clause 5.4 (Lenders' participation) if on or before the proposed Utilisation Date:

K-sure has received payment in full of the K-sure Premium relating to the K-sure Insurance Policy in respect of the relevant Drillship from the Borrowers; and

the Agent has not received any notice from K-sure requesting the K-sure Lenders to suspend the making of the K-sure Facility and/or the K-sure Lenders are not required by the terms of any of the K-sure Insurance Policy to suspend the making of the K-sure Facility, which notice can be provided from K-sure as a consequence of, inter alia, any materially adverse change which has occurred in the financial or credit status of any Obligor.

Conditions for Escrow Utilisation

If required by a Borrower for it to comply with a relevant building contract for any of the Drillships, that Borrower may request an Escrow Utilisation provided that the conditions referred to in Schedule 3 Part II (Conditions Precedent to a Utilisation Date) have been met, and provided that it can evidence, to the satisfaction of the Agent (on behalf of the Required Lenders and KEXIM), that the conditions referred to in Schedule 3 Part III (Closing documents Utilisation Date) and Clauses 4.3 (Further conditions precedent) 4.5 (GIEK Lender conditions precedent) and 4.6 (K-sure Lenders conditions precedent) will all, at the relevant Utilisation Date (being the date when the funds are released from the Escrow Utilisation Account) at the latest, be fulfilled in form and substance satisfactory to the Agent (on behalf of the Required Lenders, and always to include KEXIM).

The funds disbursed to the Escrow Utilisation Account in the Escrow Utilisation can be released from the Escrow Account upon the conditions referred to in Schedule 3 Part III (Closing documents Utilisation Date), Clauses 4.3 (Further conditions precedent), 4.5 (GIEK Lender conditions precedent) and 4.6 (K-sure Lenders conditions precedent) having been met (subject to a closing mechanism agreed between the Agent (acting on behalf of the Required Lenders, and always to include KEXIM) and the Borrowers).

Waiver of conditions precedent and conditions subsequent

The conditions specified in this Clause 4 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.

UTILISATION

Delivery of a Utilisation Request

A Borrower may utilise the Facility by delivering to the Agent a duly completed Utilisation Request no later than 10:00 hours (Amsterdam time) five (5) Business Days prior to the proposed Utilisation Date.

Completion of a Utilisation Request

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

it specifies to which Facility and to which Drillship it relates;

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

the Utilisation is proposed for all the Tranches in respect of the relevant Drillship;

25 (25)

the amount of the proposed Utilisation (together with the Loans outstanding) is not more than available pursuant to Clause 2.1 (Facilities);

the currency specified is USD; and

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

Availability

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 Amsterdam on such date and the Facility Amount shall be reduced accordingly.

Only one single Utilisation may be made of each Tranche.

No Loans may subsequently be re-borrowed once repaid.

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 11:00 hours (Amsterdam time) on the relevant Utilisation Date make available to the Agent for the account of the relevant Borrower an amount equal to its participation in the Loan to be advanced pursuant to the relevant Utilisation Request.

REPAYMENT AND REDUCTIONS

Scheduled Repayments

The relevant Borrower shall repay each Tranche made to it by consecutive quarterly repayments based on a 12 year profile as set out in Schedule 7 (Repayments).

The first repayment of the Tranche utilised on the First Utilisation Date shall occur three (3) months from the First Utilisation Date.

In respect of all the Tranches relating to the last two Drillships, the first repayment of such Tranches shall be no later than three (3) months from the relevant Utilisation Date of such Tranches or earlier, so that the repayment in respect of such Tranches occur on the same date as the next repayment in respect of the Tranches utilised on the First Utilisation Date.

All repayments shall be allocated pro rata between the Facilities.

Final repayment

On the Final Maturity Date of a Tranche the relevant Borrower shall repay that Tranche in full, together with all other sums due and outstanding under the Finance Documents in respect of such Tranche at such date (if any).

VOLUNTARY PREPAYMENT AND CANCELLATION

Voluntary prepayment

Subject to Clause 7.3.6 (Application) below, and subject to approval from the ECA Lenders, K-sure and/or GIEK (as relevant) a Borrower may, by giving the Agent not less than thirty (30) calendar days prior written notice, prepay the whole or any part of the Facility (but if in part, in a minimum amount of USD five million (5,000,000) or in integral multiples of USD five million (5,000,000) across the Facilities).

26 (26)

The Borrowers may not make any prepayment of a Tranche relating to only one Drillship, unless the remaining Tranche relates to a Drillship which is employed on a Satisfactory Drilling Contract.

Voluntary cancellation

A Borrower may, by giving the Agent not less than thirty (30) calendar days prior written notice, permanently reduce, cancel or terminate all or part of the unutilised portions of the Facility, including the respective Tranches (but if in part, in a minimum amount of USD five million (5,000,000) or in integral multiples of USD five million (5,000,000)).

If a Borrower reduces, cancels or terminates one or more Tranches pursuant to paragraph (a) above, all other Tranches relating to the same Drillship or Drillships shall be reduced, cancelled or terminated with the same pro rata amount.

Terms and conditions for voluntary prepayments and cancellation

Irrevocable notice

A Borrower 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 a Borrower 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.

Additional payments

Upon any reduction of the Commitments under this Clause 7, the Borrowers shall repay the Loans by an amount sufficient to ensure that the total aggregate amount of the Loans shall constitute no more than the amount of the Available Commitment following the relevant reduction, such repayment to be made no later than on the day that the relevant reduction becomes effective.

Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid.

Any amount prepaid under the Commercial Facility, the GIEK Lender Facility and the K-sure Facility shall be made together with Break Cost pursuant to Clause 11.3 (Break Costs) below, without premium or penalty.

Any amount prepaid under the KEXIM Facility shall be made together with a prepayment fee of zero point five per cent (0.5%) of the principal amount prepaid under the KEXIM Facility.

No reinstatement

No amount of the Commitments cancelled or repaid under this Clause 7 may subsequently be reinstated. A Borrower may not utilise any part of a Facility which has been cancelled or any of a Facility which has been prepaid under this Clause 7.

Cancellation of GIEK Guarantee and K-sure Insurance Policy

The GIEK Guarantee will be cancelled to the extent that the GIEK Lender Facility is repaid and/or to the extent that the GIEK Lender Facility is cancelled pursuant to this Clause 7.

The K-sure Insurance Policy will be cancelled to the extent that the K-sure Facility is repaid and/or to the extent that the K-sure Facility is cancelled pursuant to this Clause 7.

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 and to K-sure and/or GIEK (as relevant).

27 (27)

Application

Any voluntary cancellation and prepayment made pursuant to this Clause 7 shall be applied pro rata between each Facility and pro rata against the scheduled repayments under each Tranche.

Amended Repayment Schedule

Upon any prepayment or cancellation the Agent shall, if applicable, replace Schedule 7 (Repayments) 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.

MANDATORY PREPAYMENT AND CANCELLATION

Total Loss or sale

If a Drillship is sold or otherwise is disposed of in whole or in part (except in relation to a sale in accordance with clause 27.2 (Accession by an Acceding Borrower and Guarantor), or suffers a Total Loss, the relevant Tranches pertaining to that Drillship shall be cancelled and any amount outstanding under such Tranches shall, in the case of a Total Loss, be prepaid in accordance with Clause 24.12 (Total Loss), or in the case of a sale or disposal, on the date upon which the sale or disposal of such Drillship is completed.

Illegality

If it becomes unlawful under any law, regulation, treaty or of any directive of any monetary authority (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:

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

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) upon receipt of notification in accordance with paragraph (a) above;

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

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).

Minimum Market Value

Upon non-compliance with Clause 24.1 (Minimum Market Value), the Facility shall be repaid in accordance with Clause 8.9 (Terms and conditions for mandatory prepayments 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.

Change of control

any person, other than Hemen Holding Limited (and/or one or more companies 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 Agent (on behalf of the Lenders); or

28 (28)

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 Agent (on behalf of the Lenders) has been given;

the Total Commitments shall be automatically cancelled and all Loans and other amounts outstanding under the Finance Documents shall be prepaid within 60 days thereafter after which the GIEK Guarantee and the K-Sure Insurance Policy shall also be automatically cancelled.

For the purpose of this Clause 8.4 the following definition 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.

Cessation of the GIEK Guarantee or the K-sure Insurance Policy

If, for any reason whatsoever, the GIEK Guarantee or the K-sure Insurance Policy are repudiated, ceases to be legally valid and binding or have full force and effect, the GIEK Lender and/or the K-sure Lenders (as applicable) may cancel the GIEK Lender Facility and/or the K-sure Facility (as applicable) secured by the GIEK Guarantee or K-sure Insurance Policy (respectively) and declare the outstanding amounts under the relevant Facility, together with accrued interests and all other amounts accrued or outstanding owing to the GIEK Lender and/or the K-sure Lenders (as applicable) thereunder immediately due and payable.

Expiry of Commercial Facility

Unless the Commercial Facility has been refinanced on commercially sustainable terms, and with such lenders as acceptable to the GIEK Lender, GIEK, KEXIM and K-sure, by no later than on the Final Maturity Date of the Commercial Facility, then all outstanding amounts under this Agreement, (including all accrued outstanding interest and other indebtedness thereto), shall be repaid on the Final Maturity Date of the Commercial Facility.

Failure to agree on the GIEK Lender Margin

If the Borrowers and the GIEK Lender fail to agree on a new GIEK Lender Margin, and the GIEK Lender Facility is repaid in accordance with paragraph b) of Clause 9.5 (Fixing of the margin for the GIEK Lender Facility), then all outstanding amounts under this Agreement, (including all accrued outstanding interest and other indebtedness thereto), shall be repaid on the date that the GIEK Lender Facility is cancelled and repaid pursuant to Clause 9.5 (Fixing of the margin for the GIEK Lender Facility).

Reduction of Norwegian Contract Value

If, for any reason, the Norwegian Contract Value is reduced after the disbursement of a Tranche under the GIEK Lender Facility, the relevant Tranche under the GIEK Lender Facility shall be repaid to such extent that it does not exceed the GIEK Lender Commitment.

Terms and conditions for mandatory prepayments and cancellation

Application

Unless otherwise specified in Clause 8.1 (Total Loss or sale), all mandatory prepayments and/or cancellations (as the case may be) made under this Clause 8 shall be applied pro rata between the Facilities and pro rata against the scheduled repayments under each Tranche.

29 (29)

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

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 Loans shall constitute no more than the amount of the Available Commitment following the relevant reduction, 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.

Any amount prepaid under the Commercial Facility, the GIEK Lender Facility and the K-sure Facility shall be made together with Break Costs pursuant to Clause 11.3 (Break Costs) below, without premium or penalty.

Any amount prepaid under the KEXIM Facility shall be made together with a prepayment fee of zero point five per cent (0.5%) of the principal amount prepaid under the KEXIM Facility.

No reinstatement

No amount of the Commitments cancelled or repaid under this Clause 8 may subsequently be reinstated. A Borrower may not utilise any part of a Facility which has been cancelled or any of a Facility which has been prepaid under this Clause 8.

Cancellation of GIEK Guarantee and K-sure Insurance Policy

The GIEK Guarantee will be cancelled to the extent that the GIEK Lender Facility is repaid and/or to the extent that the GIEK Lender Facility is cancelled pursuant to this Clause 8.

The K-sure Insurance Policy will be cancelled to the extent that the K-sure Facility is repaid and/or to the extent that the K-sure Facility is cancelled pursuant to this Clause 8.

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, to K-sure and/or GIEK (as relevant) and the Borrowers.

INTEREST

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:

the Applicable Margin;

LIBOR; and

Mandatory Cost (if any).

Effective interest pursuant to the Norwegian Financial Agreement Act of 1999 No. 46 has been calculated by the Agent as set out in a separate notice from the Agent to the Borrowers.

Payment of interest

30 (30)

The Borrowers shall pay accrued interest on each Loan on each Interest Payment Date, however, if an Interest Period is longer than three (3) months, in quarterly intervals after the first day of such Interest Period.

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 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.

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.

Fixing of the margin for the GIEK Lender Facility


a)	The GIEK Lender Margin is fixed for a period of five (5) years from the First Utilisation Date (the “Fixed Margin Period”).

The Borrowers may from the date falling between forty (40) and sixty (60) Business Days prior to the Interest Payment Date falling nearest, and prior to, the expiry of the Fixed Margin Period (the “Margin Review Date”), request that the GIEK Lender gives an offer to the Borrowers for a fixed Margin (the “New Fixed Margin Offer”) for an additional period to be agreed between the GIEK Lender and the Borrowers (the “New Fixed Margin Period”). The GIEK Lender shall, within ten (10) Business Days of receipt of such request give a New Fixed Margin Offer to the Borrowers. No later than ten (10) Business Days of receipt of the New Fixed Margin Offer, the Borrowers may accept or reject the New Fixed Margin Offer. If the Borrowers do not request the GIEK Lender to give a New Fixed Margin Offer or do not accept the New Fixed Margin Offer in accordance with the conditions of this Clause 9.5, the GIEK Lender Commitment shall be cancelled and any amount outstanding under the GIEK Lender Facility together with the GIEK Lender's proportionate part of all Outstanding Indebtedness shall be due and payable by the Borrowers on the last day of the relevant GIEK Lender Fixed Margin Period either by cash or through loans from the New GIEK Lender.

INTEREST PERIODS

Selection of Interest Periods

A Borrower may, subject to (d) and (e) below, select an Interest Period for a Loan in a Utilisation Request.

Each Utilisation Request for selection of an Interest Period is irrevocable and must be received by the Agent not later than 10:00 hours (Amsterdam time) five (5) Business Days before the commencement of that Interest Period.

If a Borrower fails to deliver a Utilisation Request to the Agent in accordance with paragraph b) above, the relevant Interest Period will be three (3) months.

For the ECA Facilities, the relevant Borrower and the relevant ECA Lender may only agree on Interest Period of three (3) months.

31 (31)

For the Commercial Facility, a Borrower may select an Interest Period of three (3) or six (6) months, or such other period as the Agent may, with the consent of the Required Lenders, agree with the Borrowers.

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.

An Interest Period for the maturity 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.

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.

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).

Notification of Interest Periods

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

CHANGES TO THE CALCULATION OF INTEREST

Market disruption

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:

the Applicable Margin;

any Mandatory Costs; and

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.

In this Agreement, “Market Disruption Event” means:

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

before close of business in London on the Quotation Day for the relevant Interest Period, the Agent receives notifications from a Lender or Lenders (whose participations in the Loan exceed fifty per cent (50%) of the Loan) that the cost to it or them of obtaining matching deposits in the London interbank market would be in excess of LIBOR.

Alternative basis of interest or funding

If a Market Disruption Event occurs and the Agent or the Borrowers so requires, the Agent and the Borrowers 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

32 (32)

agreed pursuant to this Clause 11.2 shall, with the prior consent of all the Lenders and the Borrower, be binding on all Parties.

Break Costs

A Borrower shall, within three (3) Business Days of demand by a Lender, pay to that Lender (excluding KEXIM) its Break Costs attributable to all or any part of the Loan or Unpaid Sum being paid by that Borrower on a day other than the last day of an Interest Period for the Loan or Unpaid Sum.

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.

FEES

Commitment fee Lenders

Each Borrower shall pay to the Agent (for distribution among the Lenders) a commitment fee of forty per cent (40%) of the relevant Applicable Margin for each Facility on the Available Commitment of each Lender accruing from the Closing Date and up until the earlier of (i) the expiry of the Availability Period and (ii) the date on which the Facility has been fully utilised. The commitment fee shall be payable quarterly in arrears on each Quarter Date and on the last day of the Availability Period or such other date upon which the Facility is fully drawn or cancelled in whole.

Fees payable in respect of the GIEK Guarantee

The Borrowers shall pay to the Agent (for the account of GIEK) a guarantee premium at the rate of one point five per cent (1.5%) per annum on the outstanding amount of the GIEK Guarantee for the period from the issue of the GIEK Guarantee until it has been cancelled or has expired.

The Borrowers shall pay to the Agent (for distribution to GIEK) a commitment fee of forty per cent (40%) of the guarantee premium as set out in paragraph (a) above calculated on the Available Commitment of the GIEK Lender accruing from the Closing Date and up until the earlier of (i) the expiry of the Availability Period and (ii) the date on which the Facility has been fully utilised. The commitment fee shall be payable quarterly in arrears on each Quarter Date and on the last day of the Availability Period or such other date upon which the Facility is fully drawn or cancelled in whole.

The guarantee premium payable to GIEK pursuant to paragraph (b) above shall be payable on each Interest Payment Date (as set out in Clause 9.2 (Payment of interest)) (or such shorter period as shall end on the expiration date for the GIEK Guarantee) starting on the date of issue of the GIEK Guarantee, and shall be paid to the GIEK Account within two days after having been paid to the Agent, with the guarantee number to be included on the transfer.

If any one of the Applicable Margins, any commitment fees or other fees are increased, GIEK shall have the right to increase its premium or commitment fee set out in paragraph (a) and (b) above, or any of its other fees that correspond to the increased fees. If any one of the Applicable Margins, commitment fees or other fees are decreased, GIEK shall have the right to decrease its premium, commitment fee or other fees.

K-sure Premium

The Borrowers shall be responsible and shall bear the cost of the K-sure premium of each K-sure Insurance Policy and shall pay to the Agent (for the account of K-sure) the K-Sure Premium prior to the First Utilisation Date.

Each Borrower

33 (33)

and each K-sure Lender acknowledges and agrees that the amounts of any K-sure Premium will be solely determined by K-sure and that no K-sure Lender is in any way involved in the calculation or payment of any part of any K-sure Premium;

agrees that its obligation to pay all K-sure Premium or any part of any K-sure Premium shall be an absolute and unconditional obligation and, without limitation, shall not be affected by any failure by the Borrowers or either one of the Borrowers to draw down funds under this Agreement or the prepayment or acceleration of the whole or any part of the K-sure Lenders Commitments;

acknowledges that it shall pay an amount equivalent to all K-sure Premium (including default interest under the K-sure Insurance Policy) to K-sure on the relevant due date, and no K-sure Premium will be refundable in whole or in part in any circumstances, unless otherwise provided in the K-sure Insurance Policy;

agrees that if, for any reason whatsoever, any additional premium is or becomes payable to K-sure in respect of the K-sure Insurance Policy, the Borrowers shall promptly pay such additional premium in full and the Borrowers shall fully cooperate with the Agent on its reasonable request to take all steps necessary on the part of the Borrowers to ensure that each K-sure Insurance Policy remains in full force and effect throughout the Security Period; and

shall indemnify K-sure in relation to any costs or expenses (including legal fees) suffered or incurred by K-sure in connection with any transfer to K-sure undertaken pursuant to Clause 27.3 (Assignments and transfers by the Lenders) or in connection with any review by K-sure of or in relation to any Event of Default and/or amendment or supplement to any of the Finance Documents and/or a request for a consent or approval from K-sure.

If the Borrowers have paid all K-sure Premium under the K-sure Insurance Policy, the Finance Parties shall pay to the Borrower any K-sure insurance premium refunded by K-sure and received by that Finance Party (if any).

KEXIM prepayment fee

Any amount prepaid under the KEXIM Facility shall be made together with a prepayment fee of zero point five per cent (0.5%) of the principal amount prepaid under the KEXIM Facility, as set out in Clauses 7.3.2 (Additional payments) and 8.9.2 (Additional payments).

Other fees

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

TAX GROSS-UP AND INDEMNITIES

Taxes

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.

Tax gross-up

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 Borrowers and that Lender.

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

34 (34)

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

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

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

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), Clause 13.5 (FATCA Deduction and gross-up by Obligor) or under Clause 13.6(d) (FATCA Deduction by a Finance Party).

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.

FATCA Information

Subject to paragraph (c) below, each Party shall, within ten (10) Business Days of a reasonable request by another Party:

confirm to that other Party whether it is:

a FATCA Exempt Party; or

not a FATCA Exempt Party; and

supply to that other Party such forms, documentation and other information relating to its status under FATCA (including its applicable "passthru payment percentage" or other information required under the US Treasury Regulations or other official guidance including intergovernmental agreements) as that other Party reasonably requests for the purposes of that other Party's compliance with FATCA.

If a Party confirms to another Party pursuant to 13.4(a)(i) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.

Paragraph (a) above shall not oblige any Finance Party to do anything which would or might in its reasonable opinion constitute a breach of:

any law or regulation;

any fiduciary duty; or

35 (35)

any duty of confidentiality.

If a Party fails to confirm its status or to supply forms, documentation or other information requested in accordance with paragraph (a) above (including, for the avoidance of doubt, where paragraph (b) above applies), then:

if that Party failed to confirm whether it is (and/or remains) a FATCA Exempt Party then such Party shall be treated for the purposes of the Finance Documents as if it is not a FATCA Exempt Party; and

if that Party failed to confirm its applicable "passthru payment percentage" then such Party shall be treated for the purposes of the Finance Documents (and payments made thereunder) as if its applicable "passthru payment percentage" is 100%,

until (in each case) such time as the Party in question provides the requested confirmation, forms, documentation or other information.

FATCA Deduction and gross-up by Obligor

If an Obligor is required to make a FATCA Deduction, that Obligor shall make that FATCA Deduction and any payment required in connection with that FATCA Deduction within the time allowed and in the minimum amount required by FATCA.

If a FATCA Deduction is required to be made by an Obligor, the amount of the payment due from that Obligor shall be increased to an amount which (after making any FATCA Deduction) leaves an amount equal to the payment which would have been due if no FATCA Deduction had been required.

The Parent shall promptly upon becoming aware that an Obligor must make a FATCA Deduction (or that there is any change in the rate or the basis of a FATCA Deduction) notify the Agent accordingly. Similarly, a Finance Party shall notify the Agent on becoming so aware in respect of a payment payable to that Finance Party. If the Agent receives such notification from a Finance Party it shall notify the Parent and that Obligor.

Within thirty days of making either a FATCA Deduction or any payment required in connection with that FATCA Deduction, the Obligor making that FATCA Deduction or payment shall deliver to the Agent for the Finance Party entitled to the payment evidence reasonably satisfactory to that Finance Party that the FATCA Deduction has been made or (as applicable) any appropriate payment paid to the relevant governmental and taxation authority.

FATCA Deduction by a Finance Party

Each Finance Party may make any FATCA Deduction it is required by FATCA to make, and any payment required in connection with that FATCA Deduction, and no Finance Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction. A Finance Party which becomes aware that it must make a FATCA Deduction in respect of a payment to another Party (or that there is any change in the rate or the basis of such FATCA Deduction) shall notify that Party and the Agent.

If the Agent is required to make a FATCA Deduction in respect of a payment to a Finance Party under Clause 30.2 (Distributions by the Agent) which relates to a payment by an Obligor, the amount of the payment due from that Obligor shall be increased to an amount which (after the Agent has made such FATCA Deduction), leaves the Agent with an amount equal to the payment which would have been made by the Agent if no FATCA Deduction had been required. The Agent will not be obliged to pay or advance such amount before actually receiving the increased amount from the relevant Obligor.

The Agent shall promptly upon becoming aware that it must make a FATCA Deduction in respect of a payment to a Finance Party under Clause 30.2 (Distributions by the Agent) which relates to a payment by an Obligor (or that

36 (36)

there is any change in the rate or the basis of such a FATCA Deduction) notify the relevant Obligor and the relevant Finance Party.

An Obligor shall (within three Business Days of demand by the Agent) pay to a Finance Party an amount equal to the loss, liability or cost which that Finance Party determines will be or has been (directly or indirectly) suffered by that Finance Party as a result of another Finance Party making a FATCA Deduction in respect of a payment due to it under a Finance Document. This paragraph shall not apply to the extent a loss, liability or cost is compensated for by an increased payment under paragraph (b) above.

A Finance Party making, or intending to make, a claim under paragraph (d) above shall promptly notify the Agent of the FATCA Deduction which will give, or has given, rise to the claim, following which the Agent shall notify the Borrowers.

INCREASED COSTS

Increased Costs

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 as a result of (i) 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) or (ii) compliance with any law or regulation made after the Closing Date.

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

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

an additional or increased cost; or

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 Guarantee Commitments or funding or performing its obligations under any Finance Document.

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 Borrowers. Each Finance Party shall as soon as practicable after a demand by the Agent, provide a confirmation showing the amount of its Increased Costs.

Exceptions

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

attributable to a Tax Deduction or withholding required by law to be made by a Borrower, and compensated for by Clause 13.1.2 (Tax gross-up) or Clause 13.2 (Tax Indemnity); or

attributable to a FATCA Deduction required to be made by an Obligor or a Finance Party, and compensated for by paragraph 13.6(d) of Clause 13.6 (FATCA Deduction by a Finance Party); or

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

37 (37)

OTHER INDEMNITIES

Currency indemnity

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:

making or filing a claim or proof against a Borrower; or

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

the relevant Borrower 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.

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.

General indemnities

A Borrower 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:

the occurrence of any Event of Default;

any Environmental Claim;

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);

the funding, or making arrangements to fund, its participation in the Loan requested by a Borrower 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 gross negligence or wilful misconduct by that Lender alone); or

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

Indemnity to Finance Parties

The Borrowers shall promptly indemnify the Agent or any other Finance Party against any documented cost, loss or liability incurred by the Agent or any other Finance Party (acting reasonably) as a result of;

investigating any event which it reasonably believes is a possible Event of Default; or

acting or verifying any notice, request or instruction by a Party which it reasonably believes to be genuine, correct or appropriately authorised.

MITIGATION BY THE LENDERS

Mitigation

Without in any way limiting the obligations of the Borrowers hereunder, each Finance Party shall, in consultation with the Borrowers, take all reasonable steps for a period of fifteen (15) Business Days to

38 (38)

mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of:

Clause 8.2 (Illegality);

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

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.

Replacement of a Lender

Subject to the consent of K-sure (for the K-sure Lenders) and GIEK (for the GIEK Lender), the Borrowers shall have the right, in the absence of a Default or Event of Default, to replace any Lender that charges a material amount in excess of that being charged by the other Lenders with respect to contingencies described in;

Clause 13 (Tax gross-up and indemnities); and /or

Clause 14 (Increased Costs).

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), as well as any Break Costs payable pursuant to Clause 11.2 (Break Costs) or any prepayment fee payable to KEXIM in accordance with Clause 12.3 (KEXIM prepayment fee).

COSTS AND EXPENSES

Transaction expenses

The Borrowers shall promptly on demand pay to the Agent the amount of all documented costs and expenses (including legal fees) reasonably incurred by any of the Finance Parties in connection with the negotiation, preparation, printing, perfection, execution, registration and syndication of:

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

any other Finance Documents executed after the Closing Date.

Amendment and enforcement costs, etc

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

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

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

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.

39 (39)

GUARANTEE AND INDEMNITY

Guarantee and indemnity

Each Guarantor hereby irrevocably and unconditionally jointly and severally:

guarantees to each Finance Party, as and for its own debt and not merely as surety, the due and punctual observance and performance by each Obligor of all of that Obligor’s obligations under the Finance Documents;

undertakes with each Finance Party that whenever an Obligor does not pay any amount when due under or in connection with any Finance Document, such Guarantor shall immediately on demand by the Agent pay that amount as if it were the principal obligor; and

undertakes to indemnify each Finance Party immediately on first demand against any cost, loss or liability suffered by that Finance Party if any obligation guaranteed by such Guarantor is or becomes unenforceable, invalid or illegal. The amount of the cost, loss or liability shall be equal to the amount which that Finance Party would otherwise have been entitled to recover.

Continuing guarantee

The Guarantee Obligations are continuing guarantee obligations and will extend to the ultimate balance of all amounts payable by any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.

Maximum liability

Notwithstanding anything to the contrary in this Agreement or any Finance Documents including this Clause 18, the total and aggregate liability of each Guarantor hereunder shall be limited to USD one billion, six hundred and sixty seven million, five hundred thousand (1,667,500,000) (principal amount plus a headroom of fifteen per cent (15%)), in addition to any interest and costs.

Number of claims

There is no limit on the number of claims that may be made by the Agent (on behalf of the Finance Parties) under this Agreement.

Survival of Guarantor’s liability

A Guarantor’s liability to the Finance Parties under this Clause 18 shall not be discharged, impaired or otherwise affected by reason of any of the following events or circumstances (regardless of whether any such events or circumstances occur with or without such Guarantor’s knowledge or consent):

any time, waiver, consent, forbearance or other indulgence given or agreed by the Finance Parties with any Obligor in respect of any of the Obligor’s obligations under the Finance Documents; or

any defence, legal limitation, disability or incapacity of any Obligor related to the Finance Documents; or

any amendments to or variations of the Finance Documents agreed by the Finance Parties with any Obligor; or

the liquidation, bankruptcy or dissolution (or proceedings analogous thereto) of any Obligor; or

any other circumstance which might otherwise constitute a defence available to, or discharge of, a Guarantor.

40 (40)

Waiver of rights

Each Guarantor specifically waives all rights under the provisions of the Norwegian Financial Agreements Act 1999 (as amended) not being mandatory provisions, including (but not limited to) the following provisions (the main contents of the relevant provisions being as indicated in the brackets):

§ 63 (1) – (2) (to be notified of any Event of Default hereunder and to be kept informed thereof);

§ 63 (3) (to be notified of any extension granted to a Borrower in payment of principal and/or interest);

§ 63 (4) (to be notified of a Borrower’s bankruptcy proceedings or debt reorganisation proceedings and/or any application for the latter);

§ 65 (3) (that the consent of a Guarantor is required for the Guarantor to be bound by amendments to the Finance Documents that may be detrimental to its interest);

§ 67 (2) (about reduction of a Guarantor’s liabilities hereunder since no such reduction shall apply as long as any amount is outstanding under the Finance Documents);

§ 67 (4) (that a Guarantor’s liabilities hereunder shall lapse after ten (10) years, as that Guarantor shall remain liable hereunder as long as any amount is outstanding under any of the Finance Documents);

§ 70 (as no Guarantor shall have any right of subrogation into the rights of the Finance Parties under the Finance Documents until and unless the Finance Parties shall have received all amounts due or to become due to them under the Finance Documents);

§ 71 (as the Finance Parties shall have no liability first to make demand upon or seek to enforce remedies against a Borrower or any other security provided in respect of any Borrower’s liabilities under the Finance Documents before demanding payment under or seeking to enforce the Guarantee Obligations of a Guarantor hereunder);

§ 72 (as all interest and default interest due under any of the Finance Documents shall be secured by the Guarantee Obligations of a Guarantor hereunder);

§ 73 (1) – (2) (as all costs and expenses related to an Event of Default under this Agreement shall be secured by the Guarantee Obligations of a Guarantor hereunder); and

§ 74 (1) – (2) (as a Guarantor shall not make any claim against a Borrower for payment until and unless the Finance Parties first shall have received all amounts due or to become due to them under the Finance Documents).

Deferral of Guarantor’s rights

Each of the Guarantors undertakes to the Finance Parties that for as long as any of the Finance Documents is effective:

following receipt by it of a notice from the Agent of the occurrence of any Event of Default which is unremedied, none of the Guarantors will make demand for or claim payment of any moneys due to that Guarantor from any Obligor, or exercise any other right or remedy to which any of the Guarantors are entitled in respect of such moneys unless and until all moneys owing or due and payable by any Obligor to the Finance Parties under the Finance Documents have been irrevocably paid in full;

if an Obligor shall become the subject of an insolvency proceeding or shall be wound up or liquidated, the Guarantors shall not (unless so instructed by the Agent and then only on condition that the Guarantor holds the benefit of any claim in such insolvency or liquidation to pay any amounts recovered thereunder to the Agent) make any claim in

41 (41)

such insolvency, winding-up or liquidation until all moneys owing or due and payable by any Obligor to the Finance Parties under the Finance Documents have been irrevocably paid in full;

if a Guarantor, in breach of paragraphs a) and/or b) above receives or recovers any money pursuant to any such exercise, claim or proof as therein referred to, such money shall be held by such Guarantor in custody for the Agent and immediately be paid to the Agent so as for the Agent to apply the same as if they were moneys received or recovered by the Agent under this Agreement; and

the Guarantors have not taken nor will they take from any Obligor any Security Interest whatsoever for the moneys hereby guaranteed.

Enforcement

No Finance Party shall be obliged before taking steps to enforce the Guarantee Obligations of any of the Guarantors under this Agreement:

to obtain judgement against any Obligor or any third party in any court or other tribunal;

to make or file any claim in a bankruptcy or liquidation of any Obligor or any third party; or

to take any action whatsoever against any Obligor or any third party under the Finance Documents, except giving notice of any payment due hereunder,

and each of the Guarantors hereby waives all such formalities or rights to which it would otherwise be entitled or which the Finance Parties would otherwise first be required to satisfy or fulfil before proceeding or making any demand against the Guarantors hereunder, except as required hereunder or by law.

Any release, discharge or settlement between a Guarantor and the Finance Parties (or any of them) in relation to any Finance Document shall be conditional upon no payment made by any Borrower to the Finance Parties hereunder or thereunder being void, set aside or ordered to be refunded pursuant to any enactment or law relating to breach of duty by any person, bankruptcy, liquidation, administration, protection from creditors generally or insolvency or for any other reason whatsoever. If any payment is void or at any time so set aside or ordered to be refunded, the Finance Parties shall be entitled subsequently to enforce the Guarantee Obligations of a Guarantor hereunder as if such release, discharge or settlement had not occurred and any such payment had not been made.

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.

Guarantee and indemnity of the Borrowers

The Borrowers, as joint and several Borrowers, hereby guarantee on the same terms, limitations and conditions as the Guarantors under this Clause 18.

Limitation of Guarantee Obligations

Notwithstanding any other provision of this Clause 18 (Guarantee and Indemnity), and without limiting the generality of the foregoing, the guarantee, indemnity and other obligations of each Obligor hereunder shall extend to all amounts that constitute part of the Guarantee Obligations and would be owed by any other Obligor to any Finance Party under or in respect of the Finance Documents but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, insolvency, reorganization or similar proceeding involving such other Obligor.

42 (42)

Each Obligor, and by its acceptance of this Agreement, each Finance Party, hereby confirms that it is the intention of all parties that this Agreement and the obligations of each Obligor hereunder do not constitute a fraudulent transfer or conveyance for purpose of Insolvency Law (as hereinafter defined), any fraudulent conveyance act, fraudulent transfer act or any similar foreign law to the extent applicable to this Agreement and the obligations of the Obligors hereunder. To effectuate the foregoing intention, the Finance Parties and each Guarantor hereby irrevocably agree that the obligations of each Obligor under this Agreement and the other Finance Documents to which it is a party at any time shall be limited to the maximum amount as will result in the obligations of such Obligor hereunder and thereunder not constituting a fraudulent transfer or conveyance. For the purpose hereof, "Insolvency Law" means the law described in this paragraph or any law relating to any proceeding of the type referred to in Clause 25.6 (Insolvency) and Clause 25.7 (Insolvency proceeding) of this Agreement or any similar foreign law for the relief of debtors applicable to such Obligor.

Contribution Agreement

Each Obligor hereby unconditionally and irrevocably agrees that in the event any payment shall be required to be made to any Finance Party under this Agreement, any other Finance Document or any other guarantee, such Obligor will contribute, to the maximum extent permitted by law, such amounts to each other Obligor and each other guarantor so as to maximize the aggregate amount paid to the Finance Parties under or in respect of the Finance Documents.

SECURITY

Security

The Obligors’ obligations and liabilities under the Finance Documents, including (without limitation) the Borrowers' 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 (the "Secured Obligations"), 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 the guarantee and indemnity granted by the Guarantors and the Borrowers pursuant to Clause 18 and additionally be cross collateralised as follows;

the Mortgages (including any deeds of covenants), subject however to contractually agreed Quiet Enjoyment Letters (where required under a drilling contract with a third party);

the Assignment of Earnings;

the Assignment of Earnings Accounts;

the Assignment of Insurances;

the Seadrill Partners Guarantee; and

the Share Charges.

Each of the Obligors undertakes to ensure that the above Security Documents are being duly executed by the parties thereto in favour of the Agent (on behalf of the Finance Parties) in form and substance satisfactory to the Agent (on behalf of the Finance Parties) on or prior to the Effective Time, legally valid and in full force and effect with first priority, and to execute or procure the execution of such further documentation as the Agent may reasonably require in order for the relevant Finance Parties to maintain the security position envisaged hereunder.

In addition to the security set out above, the GIEK Lender Facility shall be secured by the GIEK Guarantee and the K-sure Facility by the K-sure Insurance Policy.

43 (43)

Any changes to the Assignment of Earnings may be made only with the consent of the Required Lenders, always to include KEXIM.

Agent as holder of Security Interest under Hungarian law

In this Clause:

‘Agent Claim’ has the meaning given to it in paragraph (b) below.

‘Finance Party Claim’ means any amount which an Obligor owes to a Finance Party under or in connection with the Secured Finance Documents; and

‘Secured Finance Documents’ means the Finance Documents, the GIEK Guarantee and the K-sure Insurance Policy.

Each Obligor must pay the Agent, as an independent and separate creditor, an amount equal to each Finance Party Claim on its due date (the “Agent Claim”).

Each Agent Claim is created on the understanding that the Agent must:

share the proceeds of each Agent Claim with the other Finance Parties; and

pay those proceeds to the Finance Parties, in accordance with their respective interests in the amounts outstanding under the Secured Finance Documents.

The Agent may enforce performance of any Agent Claim in its own name as an independent and separate right. This includes any suit, execution, enforcement of security, recovery of guarantees and applications for and voting in respect of any kind of insolvency proceeding.

Each Finance Party must, at the request of the Agent, perform any act required in connection with the enforcement of any Agent Claim. This includes joining in any proceedings as co-claimant with the Agent.

Unless the Agent fails to enforce an Agent Claim within a reasonable time after its due date, a Finance Party may not take any action to enforce the corresponding Finance Party Claim unless it is requested to do so by the Agent.

Each Obligor irrevocably and unconditionally waives any right it may have to require a Finance Party to join in any proceedings as co-claimant with the Agent in respect of any Agent Claim.

Discharge by an Obligor of a Finance Party Claim will discharge the corresponding Agent Claim in the same amount, and discharge by an Obligor of an Agent Claim will discharge the corresponding Finance Party Claim in the same amount.

The aggregate amount of the Agent Claims will never exceed the aggregate amount of Finance Party Claims.

A defect affecting an Agent Claim against an Obligor will not affect any Finance Party Claim. A defect affecting a Finance Party Claim against an Obligor will not affect any Agent Claim.

If the Agent returns to any Obligor, whether in any kind of insolvency proceedings or otherwise, any recovery in respect of which it has made a payment to a Finance Party, that Finance Party must repay an amount equal to that recovery to the Agent and the Agent Claim as well as the corresponding Finance Party Claim shall be reinstated to an amount as if such recovery had not taken place.

44 (44)

This Clause 19.2 (Agent as holder of Security Interest under Hungarian law) applies for the purpose of determining the secured liabilities in the Security Documents governed by Hungarian law.

REPRESENTATIONS AND WARRANTIES

Each of the Obligors represents and warrants to each Finance Party as set out below. Representations and warranties relating to a Drillship and a Borrower in its capacity as Drillship owner will be applicable from or in connection with the delivery of the relevant Drillship.

Status

Each Obligor is a limited liability company, duly incorporated, organised and validly existing under the laws of their jurisdiction of 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.

Binding obligations

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 legal, valid, binding and enforceable first priority securities 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 any UCC (Uniform Commercial Code) filings or the registration of the Mortgages with the relevant Ship Registry which shall be completed on or before the Utilisation Date of the Facility (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).

Finance Documents which according to this Agreement are not deemed to be delivered until the relevant Utilisation Date, will be in compliance with (a) above from that Utilisation Date.

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:

any law or regulation or any order or decree of any judicial or official agency or court;

any constitutional documents of such Obligor;

the Satisfactory Drilling Contracts; or

any agreement or document to which it is a party or by which it is bound.

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.

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.

45 (45)

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.

No Default

No Event of Default, Default or any prepayment event pursuant to Clause 8 (Mandatory 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 Satisfactory Drilling Contract, Intra-Group Charterparty, 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.

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.

Original Financial Statements

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 at the day that they were drawn up and have been prepared in accordance with Accounting Principles consistently applied.

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 the Exchange).

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.

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.

46 (46)

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.

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 such Obligor relating to assets being 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.

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.

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.

No breach of laws

It has not (and none of its Subsidiaries have) 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.

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.

It has not utilised any of the assets financed under the GIEK Guarantee in a way that would be in conflict with Norwegian legislation or secondary law.

Environmental laws

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.

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 (47)

Ownership

The Parent owns one hundred per cent (100%) of the shares and ownership interest (directly or indirectly) in Seadrill Tellus Ltd. and the Intra-Group Charterers (except for Seadrill Gulf Vela) as described in Schedule 8 (Corporate Structure) hereto; and

Seadrill Capricorn owns one hundred per cent (100%) of the shares and ownership interest (directly) in each of Seadrill Vela and Seadrill Gulf Vela as described in Schedule 8 (Corporate Structure) hereto.

The Drillships

Each Drillship is (or will be at the time of delivery, as the case may be):

in the absolute ownership of the relevant Borrower described in Schedule 2 (Guarantors and Drillships) hereto free and clear of all encumbrances (other than current crew wages and the relevant Mortgage) and, the respective Borrower will be the sole, legal and beneficial owner of such Drillsihp;

registered in the name of the relevant Borrower as described in Schedule 2 (Guarantors and Drillships) with a Ship Registry;

operationally seaworthy in every way and fit for service; and

classed with a classification society acceptable to the Required Lenders, free of all overdue requirements and recommendations.

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, official requirement or other regulatory measure or procedure implemented to combat money laundering (as defined in Article 1 of the Directive (2001/97/EC of the European Parliament of 4 December 2001) including, but not limited to Directive 2005/60/EC amending Council Directive 91/308/EEC).

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.

FATCA

No Borrower is resident for tax purposes in the United States of America. No Obligor is a "foreign financial institution" ("FFI") as defined in Section 1471(d)(4) of the Code and United States Treasury Regulations Section 1.1471-5(d)-(e). No payment by any Obligor under the Finance Documents will be from sources within the United States of America for United States federal income tax purposes. Each Borrower is a FATCA Exempt Party with respect to Earnings payable to that Borrower.

Non-Conflict

Each Borrower agrees and acknowledges that any claim or defence that it may have or hold in respect of the Drillship contract with the Yard to which it is a party or any dispute arising in connection with that Drillship contract between the parties thereto, shall not affect its payment obligations under the Finance Documents.

Solvency

48 (48)

Each Guarantor acknowledges that it will receive substantial direct and indirect benefits from the financing arrangements contemplated by the Finance Documents.

Each Obligor is, and immediately upon giving effect to the transactions contemplated by the Finance Documents will be, Solvent.

Repetition

The representations and warranties set out in this Clause 20 are deemed to be made by each of the Obligors on the Closing Date and shall be deemed to be repeated:

on the date of a Utilisation Request;

on each Utilisation Date;

on the first day of each Interest Period; and

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).

INFORMATION UNDERTAKINGS

The Parent and the Borrowers give the undertakings set out in this Clause 21 to each Finance Party and such undertakings shall remain in force throughout the Security Period;

Financial statements

The Parent shall supply to the Agent in sufficient copies for all of the Lenders 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;

the audited consolidated financial statements for the Group; and

the audited (to the extent applicable) annual unconsolidated accounts for that financial year of each of the Borrowers.

The Parent and each Borrower shall provide to the Agent as soon as reasonable practicable, but in any event within seventy (70) days after each relevant Quarter Date, the unaudited consolidated accounts of the Group for that financial quarter and the unaudited unconsolidated financial statements for each Borrower for that financial quarter;

The Parent shall provide to the Agent as soon as reasonably practicable and in any event within seventy (70) days after each Quarter Date, copies of the Group’s consolidated Cash Flow Projections for the following five (5) calendar years after such dates; and

any other information in respect of the business, properties or condition, financial or otherwise, of the Parent and the Borrowers or any of their Subsidiaries as the Agent or any of the Lenders may from time to time reasonably request.

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 and the Borrowers' compliance

49 (49)

with Clause 22 (Financial Covenants), Clause 8.3 (Minimum Market Value) and Clause 24.3 (Insurances), together with confirmation that the Drillships are employed on the Satisfactory Drilling Contracts.

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 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 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

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.

Information - miscellaneous

The Parent and the Borrowers shall notify the Agent and/or supply to the Agent (in sufficient copies for all the Lenders, if the Agent so requests)

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;

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;

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;

all filings with or report forwarded to any Exchange; and

such updates or forecasts as the Agent may reasonably request.

Notification of Default

The Parent and the Borrowers shall notify the Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence.

Notification of Environmental Claims

The Parent and the Borrowers shall inform the Agent in writing as soon as reasonably practicable upon becoming aware of the same:

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 or any of the Drillships; and

50 (50)

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, or any of the Drillships.

Information of new contracts

The Parent and the Borrowers shall provide the Agent with information on any new employment contract in respect of a Drillship five (5) days prior to entering into any such contract.

The Parent and the Borrowers shall procure, prior to entering into any new employment contract in respect of a Drillship, that a Contract Memo for that employment contract is sent to the Agent.

“Know your customer” checks

If:

the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the Closing Date;

any change in the status of an Obligor after the Closing Date; or

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 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 (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, 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 supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself) in order for the 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.

FINANCIAL COVENANTS

The financial covenants in this Clause 22 are granted in favour of each Finance Party by the Parent and the Borrowers and such financial covenants shall remain in force throughout the Security Period and to be tested quarterly.

Minimum Liquidity

The Parent will procure that the Minimum Liquidity of the Group will not fall below USD one hundred and fifty million (150,000,000).

Leverage Ratio

The Parent will procure that the Leverage Ratio of the Group will not exceed 4.5 : 1.

Interest Cover Ratio

51 (51)

The Parent will procure that the Group’s Interest Cover Ratio shall be minimum 2.5 : 1.

Current Ratio

The Parent will procure that the Group's Current Ratio is minimum 1:1.

Equity Ratio

The Parent will procure that the Group’s Equity Ratio shall not be less than 30 per cent.

Debt Service Cover Ratio

The Parent will procure, and the Borrowers will undertake, that each Borrowers' Debt Service Cover Ratio shall not be less than 1.15:1.

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. Testing of the Debt Service Cover Ratio shall be made first time eighteen (18) months after the Delivery Date of the relevant Drillship.

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. Undertakings relating to a Drillship will be applicable from delivery of the relevant Drillship.

Authorisations etc.

Each of the Obligors shall promptly:

obtain, comply and do all that is necessary to maintain in full force and effect; and

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.

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 Drillships 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.

Environmental compliance

Each Obligor shall (and shall ensure that each member of the Group will):

comply with all Environmental Law;

obtain, maintain and ensure compliance with all requisite Environmental Approvals; and

implement procedures to monitor compliance with and to prevent liability under any Environmental Law,

52 (52)

where failure to do so, (in the opinion of the Agent) has or is reasonably likely to have a Material Adverse Effect.

Taxation

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:

such payment is being contested in good faith;

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

such payment can be lawfully withheld and failure to pay those Taxes does not (in the opinion of the Agent or the Required Lenders) have or is not reasonably likely to have a Material Adverse Effect

None of the Obligors may change its residence for Tax purposes.

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.

Title

Each Borrower shall, and the Parent shall procure that all Intra-Group Charterers shall (to the extent applicable), hold full legal title to and own the entire beneficial interest in the Drillships, any Satisfactory Drilling Contract, the Intra-Group Charterparties, 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).

Negative pledge

None of the Obligors shall create any Security Interest other than Permitted Encumbrances related to any asset subject to any of the Security Documents under the Facility.

None of the Borrowers 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).

No lien, encumbrance, pledge or other obligations will be granted or created in respect of the share capital of the Intra-Group Charterers.

None of the Obligors shall dispose of or encumber any employment contract in respect of the Drillships unless consented to by the Agent (acting on behalf of all Lenders).

Change of business and constitutional documents

Except with the prior written consent of the Agent, the Obligors will not, and the Parent shall ensure 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 Closing Date, or carry on any other business, except for similar related business as presently conducted. No Obligor will change the place of its jurisdiction or its organisation without the prior written consent of the Agent.

53 (53)

The Parent shall procure that none of the material terms of the Operating Agreement are amended, terminated, or waived without the prior written consent of the Agent (on behalf of the Required Lenders).

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.

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, which is secured by such assets subject to the Security Documents, of any member of the Group created on or after the Closing Date, to any debt created pursuant to this Agreement.

Mergers and demergers

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 (i) enter into any merger or consolidation with any other company unless with another Group member and (a) each Obligor will survive as a separate legal entity remaining bound in all respects by its obligations and liabilities under the Finance Documents and (b) the Borrowers will continue to be special purpose companies, owning only their relevant Drillships or (ii) demerge itself into any two or more companies.

None of the Obligors (except for Seadrill Limited) shall undergo any restructuring.

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.

Earnings Accounts

Each Borrower and Intra-Group Charterer shall open and maintain for the duration of the Facility one Earnings Account each in its name and shall procure that all Earnings (excluding service income for manning, services and procurement, etc. held with separate third party contractors for the purpose of optimizing the fiscal structure of the drilling operations) are paid to the Earnings Account.

The amounts in the Earnings Accounts shall be freely available to the Borrowers and/or the Intra-Group Charterers (as applicable) subject always to (i) any such amount being applied in accordance with the provisions of this Agreement and (ii) no Default has occurred and is continuing and no notice has been given to any Borrower or Intra-Group Charterer by the Agent that such amounts shall not be freely available.

Each relevant Obligor shall provide available statements regarding its Earnings Account upon request from the Agent.

Dividends

The Parent may

pay dividends (or make any other distributions to its shareholders),

buy-back its own common stock and/or

make new material investments in any company, shares, common stock or enter into any kind of new forward contracts (including total return swaps),

54 (54)

only to the extent that

no Default is continuing or would result from the proposed transaction, and

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.

To the extent the Parent has issued preference capital, any mandatory yield (interest) payments on such preference capital shall not be treated as dividend (or other distribution to its shareholders) for the purpose of this Clause 23.14.

If an Event of Default has occurred and is continuing, Seadrill Vela and Seadrill Gulf Vela may not pay dividends (or make any other distributions to its shareholders) or buy-back its own common stock.

Restrictions on indebtedness

None of the Borrowers or Intra-Group Charterers shall incur, create or permit to subsist any Financial Indebtedness.

The restrictions in paragraph (a) above do not apply to;

Financial Indebtedness incurred pursuant to the Finance Documents;

intercompany loans and advances on the conditions that the loans or advances are subordinated and unsecured in a form and substance satisfactory to the Agent; or

Financial Indebtedness incurred by an Intra-Group Charterer by way of guarantees provided by such Intra-Group Charterer in relation to any financing of a vessel or rig in the Group.

For the avoidance of doubt, the restrictions on Financial Indebtedness in Clause 23.15 (a) shall not apply to Seadrill Capricorn, unless it becomes or accedes to the position of a Borrower or an Intra-Group Charterer.

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.

Disposals

Subject to Clause 8 (Mandatory Prepayment and Cancellation), no Obligor shall:

enter into a single transaction or series of transactions (whether related or not and whether voluntary or involuntary) to sell, lease out, transfer, or otherwise dispose of any Drillship, Satisfactory Drilling Contract 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, without the prior written consent of the Agent; or

enter into any transaction to sell, lease, transfer or otherwise dispose of any of its assets other than made on market value and arm’s length terms.

Financial Support

None of the Borrowers shall provide, procure, create or permit to subsist any Financial Support (including contingent support) other than:

Financial Support permitted pursuant to the Finance Documents; or

55 (55)

Financial Support consented to by the Required Lenders.

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.

Assignment of contracts

If an Event of Default has occurred and is continuing the Obligors will, upon the Agent's request, make its best endeavours to have assigned the rights and obligations under contracts pertaining to the Drillships (with members of the Group as well as ultimate charterers) or any of them to one or several parties nominated by the Agent.

Sale or Total Loss of a Drillship

The Obligors will ensure that a Drillship 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 24.12 (Total Loss).

Investment Restrictions

Subject to Clause 23.14(a) (ii) and (iii) (Dividends Parent) and subject to paragraph (b) below, the Parent shall not, and shall ensure that no member of the Group (excluding the Borrowers) shall make any investments and acquisitions unless;

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

no Default is continuing or would result from the proposed investment and acquisition.

None of the Borrowers shall make any further investments or acquisitions, except for any capital expenditure or investments related to ordinary upgrade or maintenance work of the Drillships as permitted for alterations pursuant to Clause 24.4 (Alteration to the Drillships).

Ownership

The Parent shall own directly one hundred per cent (100%) of the interest (votes and capital) of Seadrill Member;

Seadrill Partners and the Parent shall collectively control Seadrill Capricorn by owning one hundred per cent (100%) of the shares (vote and capital) in Seadrill Capricorn;

Seadrill Member shall solely continue to be “the Seadrill Member”;

Seadrill Capricorn shall own directly one hundred per cent (100%) of the shares (vote and capital) of Seadrill Vela and of Seadrill Gulf Vela; and

the other Obligors (except for Seadrill Capricorn, Seadrill Vela and Seadrill Gulf Vela) shall be one hundred per cent (100%) owned (votes and capital) Subsidiaries of the Parent.

The Drillships shall be owned by the respective Borrower as set out in Schedule 2 (Guarantors and Drillships).

56 (56)

Subject to paragraphs (a) to (g) above, immediately upon a change to the ownership structure as set out in Schedule 8 (Corporate Structure), the Parent shall advise the Agent of such change.

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.

Listing

The Parent shall maintain its listing at an Exchange.

GIEK Guarantee and K-sure Insurance Policy

The Borrowers shall at all times comply with the terms and conditions contained in the GIEK Guarantee and the K-sure Insurance Policy, incorporated herein by reference as if said conditions in the GIEK Guarantee and the K-sure Insurance Policy were set out in full in this Agreement.

The Borrowers shall, for as long as any amount is outstanding under the GIEK Lender Facility and/or the K-sure Facility, procure that its obligations and liabilities hereunder in respect of such Facilities are secured by the GIEK Guarantee and the K-sure Insurance Policy (as applicable) satisfactory to the GIEK Lender and the K-sure Lenders respectively (in their sole discretion).

DRILLSHIP 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.

Minimum Market Value

The Obligors will procure that the Market Value of all the Drillships that have been delivered is (i) at least one hundred and twenty five per cent (125%) of the sum of the Loans from the Closing Date and up until the third anniversary thereafter and (ii) at least one hundred and forty per cent (140%) from the third anniversary of the Closing Date and up until the relevant Final Maturity Date.

Market Valuation of the Drillships

Each Borrower shall (at its own expense) (i) arrange for the Market Value of each of the Drillships 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 Drillships to be determined.

Insurance

Each Obligor shall maintain or ensure that each of the Drillships are 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 Drillships), Hull Interest and/or Freight Interest and War Risk (including piracy, terrorism and confiscation) insurances, in such amounts and currencies, on such terms (applying the terms of the Norwegian Marine Insurance Plan of 1996, version 2010 (as amended from time to time) and applicable after 1 July 2013 Nordic Marine Insurance Plan of 2013, (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 (such approval not to be unreasonably withheld). The Borrowers shall seek the approval of the Agent, on behalf of the Lenders, prior to placing any insurances through any captive vehicle

57 (57)

The insured value of each of the Drillships shall at all times be at least equal to or higher than the Market Value of each of the Drillships. The aggregate insured value of the Drillships (after their respective deliveries), shall at all times be at least equal to the higher of the aggregate Market Values of the Drillships and one hundred and twenty per cent (120.00%) of the outstanding Loans.

The value of the Hull and Machinery insurance shall cover at least eighty per cent (80.00%) of the Market Value of each of the Drillships and the aggregate insured values in the hull and machinery insurances of the Drillships, shall at all times be at least equal to the outstanding Loans.

The Borrowers shall procure that the 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 Agent that the notice of assignment with regards to the Insurances and the loss payable clauses (with a monetary threshold of USD twenty five million (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 Agent (on behalf of the Finance Parties). The Borrowers shall provide the Agent with details of terms and conditions of the insurances and break down of insurers.

Not later than seven (7) days prior to the expiry date of the relevant Insurances, the Borrowers 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 Drillships with insured 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.

The Agent will effect, at the Borrowers' expense and for the exclusive benefit of the Lenders, mortgagees’ interest insurance and mortgagees' additional perils and pollution insurance on such terms as the Agent may approve, covering (100%) of the Loan.

If any of the Insurances referred to in paragraph a) form part of a fleet cover, the Borrowers shall procure that the insurers shall undertake to the Agent that they shall neither set-off against any claims in respect of any of the Drillships any premiums due in respect of other Drillships under such fleet cover or any premiums due for other insurances, nor cancel this Insurance for reason of non-payment of premiums for other drillships, ships or 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 Drillships if and when so requested by the Agent.

The Borrowers shall procure that the Drillships 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.

The Borrowers will not make any material change to the Insurances described under paragraph a) and b) above without the prior written consent of the Agent (on behalf of the Lenders).

Each of the Insurances shall be reviewed, at the cost of the Borrower, by the Lender’s insurance advisor on an annual basis on each date on which the Insurances are due for renewal if so required by the Agent.

Alteration to the Drillships

Each Obligor shall ensure that no Drillship 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 alternation is carried out in accordance with the terms of the contractual obligations pertaining to the said Drillship existing at the Closing Date.

58 (58)

Trading, Classification and repairs

The Obligors shall keep or shall procure that:

the Drillships are kept in a good, safe and efficient condition and state of repair consistent with prudent ownership and management practice;

that the Drillships 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;

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 Drillships in any jurisdiction in which any of the Drillships or the Obligors may operate from time to time;

none of the Drillships enter the territorial waters (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

they provide the Agent of evidence of such compliance upon request from the Agent.

Notification of certain events relating to a Drillship

The Parent and the Borrowers shall immediately notify the Agent of:

any accident to any of the Drillships involving repairs where the costs will or are likely to exceed USD twenty five million (25,000,000) (or the equivalent amount in any other currency);

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;

any exercise or purported exercise of any capture, seizure, arrest or lien on any of the assets secured by the Security Documents; and

any occurrence as a result of which any of the Drillships has become or is, by the passing of time or otherwise, likely to become a Total Loss.

Operation of the Drillships

Each Obligor shall comply, and procure that any charter and manager complies in all material respects with all Environmental Laws and all other laws or regulations relating to the Drillships, their ownership, operation and management or to the business of the Obligor and shall not employ any of the Drillships nor allow their employment:

in any manner contrary to law or regulation in any relevant jurisdiction; and

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 Drillships unless the relevant Borrower has (at its expense) effected any special, additional or modified insurance cover which shall be necessary or customary for good ship owners trading Drillships within the territorial waters of such country at such time and has provided evidence of such cover to the Agent.

59 (59)

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 Drillships and provides copies of certificates evidencing such compliance to the Agent upon written request thereof.

Inspections and class records

Each Borrower 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 Drillships once a year, as long as such inspection does not interfere with the operation of the Drillships (unless there is an Event of Default which is continuing, in which case, the foregoing restriction shall not apply). Such inspection shall be for the account of the Borrowers.

The Drillship Owners 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 Drillships.

Surveys

Each Borrower shall submit to or cause the Drillships 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 Drillships and if consented to by the Agent pursuant to Clause 24.13 (Ship Registry, name and flag) such parallel Ship Registry of the Drillship.

Arrest

The Obligors shall promptly pay and discharge:

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;

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

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 Drillships, or their detention in exercise or purported exercise of any lien or claim, the Borrower shall procure its release by providing bail or providing the provision of security or otherwise as the circumstances may require.

Total Loss

In the event that any of the Drillships shall suffer a Total Loss, the Obligors shall as soon as possible and in any event within 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).

Ship Registry, name and flag

The Borrowers shall:

procure that each of the Drillships are registered in the name of the respective Borrower as described in Schedule 2 (Guarantors and Drillships) hereto in the relevant Ship Registry; and

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not change Ship Registry, name or flag of any of the Drillships or parallel register a Drillship 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 registry which is not generally recognised by the oil industry, then such change is subject to the prior written consent of all 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 28.13 (Rights and discretions of the Agent), rely upon the advice of experts and/or advisors appoints by it to make such determination).

Management

A company being a wholly owned Subsidiary of the Parent shall continue to perform management services in respect of the Drillships and neither a material change nor any other adverse change (having an adverse effect on the Finance Parties' rights and/or obligations under the Finance Documents) to such existing management shall be made without the prior written consent of the Agent (not to be unreasonably withheld or delayed).

EVENTS OF DEFAULT

Each of the events or circumstances set out in this Clause 25 is an Event of Default.

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:

its failure to pay is caused by administrative or technical error affecting the transfer of funds despite timely payment instructions by the Obligor; and

payment is made within three (3) Business Days of its due date.

Financial Covenants and Insurance

Any requirement in Clause 22 (Financial Covenants) and/or Clause 24.3 (Insurance) is not satisfied.

Other obligations

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 and Insurance)); and

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 Borrowers or the Borrowers becoming aware of the failure to comply.

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.

Cross default

Any Financial Indebtedness of any Obligor or any member of the Group is not paid when due nor within any originally applicable grace period;

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);

61 (61)

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

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 at least USD twenty five million (25,000,000) (or its equivalent in other currencies).

Insolvency

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.

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).

A moratorium is declared in respect of any indebtedness of any of the Obligors or any other Material Subsidiary.

Insolvency proceedings

Any corporate action, legal proceedings or other procedure or step is taken in relation to:

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;

a composition, compromise, assignment or arrangement with any creditor of any Obligor or any other Material Subsidiary;

the appointment of a liquidator, receiver, administrative receiver, administrator or other similar officer in respect of any Obligor or any other Material Subsidiary; or

enforcement of any Security Interest over any assets of any Obligor or any other Material Subsidiary.

Creditor’s process

Any maritime lien or other lien (not being a Permitted Encumbrances), 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, including the Satisfactory Drilling Contract, and is not discharged within thirty (30) days after any Obligor becoming 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.

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 any Lender to exercise any right or power vested to it under the Finance Documents.

Cessation of business

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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.

Material adverse change

Any event or series of events occur which, in the reasonable opinion of the Required Lenders has or may have a Material Adverse Effect.

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.

Loss of Property

Any substantial part of an Obligor’s and/or of a Material Subsidiary of the Parent's business or assets 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.

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.

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 twenty million (20,000,000) (or the equivalent in any other currencies) due from it under any final judgement 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.

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 Borrowers:

cancel the Total Commitments whereupon they shall immediately be cancelled;

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;

start enforcement in respect of the Security Interests established by the Security Documents; and/or

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take any other action, with or without notice to the Borrowers, exercise any other right or pursue any other remedy conferred upon the Agent or the 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.

RECOURSE REQUIREMENTS AND RIGHT OF SUBROGATION

Payment from GIEK and K-sure

GIEK and K-sure shall be irrevocably and unconditionally authorised by the Borrowers upon the occurrence of an Event of Default to pay any amounts demanded by the GIEK Lender under the GIEK Guarantee or by the K-sure Lenders under the K-sure Insurance Policy forthwith, without any reference or further authorisation from the Borrowers and, save for manifest error, without being under any duty or obligation to enquire into the justification or validity thereof and/or dispute whether any claims or demands under the GIEK Guarantee or the K-sure Insurance Policy are properly or validly made, and notwithstanding that the Borrowers may dispute the validity of any such claim or demand, GIEK and K-sure may accept any claim or demand under the GIEK Guarantee or K-sure Insurance Policy as binding upon GIEK and K-sure as conclusive evidence that they are liable to pay any such amount.

Right of subrogation only, rights of GIEK, New GIEK Lender and K-sure

GIEK and K-sure will when amounts have been paid under the GIEK Guarantee and/or the K-sure Insurance Policy (as applicable), automatically and without any notice or formalities of any kind whatsoever, have the right of subrogation into the rights of the GIEK Lender and the K-sure Lenders (respectively) under the Finance Documents in such proportion as have been paid by GIEK and/or K-sure under the GIEK Guarantee and/or the K-sure Insurance Policy respectively, and always subject to the terms of this Agreement. GIEK and/or K-sure shall by such subrogation have the same rights as relevant thereunder as if the Finance Documents were executed directly in favour of GIEK and/or K-sure as security for the rights of GIEK and/or K-sure against the Obligors, after having honoured claims under the GIEK Guarantee and/or the K-sure Insurance Policy, respectively. Each of the Obligors waives any right to dispute or delay a subrogation of the rights under the Finance Documents to GIEK and K-sure effectuated pursuant to the terms of this Agreement, and each of the Obligors undertakes to sign and execute any documents required by GIEK and K-sure in connection with a subrogation as aforesaid, and/or enforcement of the Finance Documents.

Without prejudice to the generality of the foregoing paragraph (a), to the extent that it is required to do so by K-sure pursuant to the terms of the K-sure Insurance Policy, the existing K-sure Lender shall cause a transfer or assignment to K-sure (by means of a Transfer Certificate or such other comparable instrument as may be required by K-sure) in respect of such part of its K-sure Lenders Commitment or (as the case may be) its portion of the relevant Tranche as is equal to the amount simultaneously paid to it by K-sure under the K-sure Insurance Policy.

GIEK and K-sure shall have the right to enforce and to enjoy the benefit of the rights given to them under this Agreement.

Until the Agent has been notified by the GIEK Lender and/or GIEK or the K-sure Lenders and/or K-sure (as the case may be) that GIEK and/ or K-sure (as the case may be) has subrogated into the rights of the GIEK Lender and/or the K-sure lenders (respectively), it shall be entitled to continue to make any payments to the GIEK Lender and the K-sure Lenders (as the case may be) as if the GIEK Lender and/or the K-sure Lenders were still entitled to such payments.

The New GIEK Lender shall, upon satisfaction in full of all amounts due to the GIEK Lender, automatically and without any notice or formalities of any kind whatsoever, have the right of subrogation into the rights of the GIEK Lender under the Finance Documents. Each of the Obligors waives any right to dispute or delay a subrogation of the rights under the Finance Documents to the New GIEK Lender effectuated pursuant to the terms of this Agreement, and each of the Obligors undertakes to sign and execute any document required by the New GIEK Lender in connection with a subrogation as aforesaid, and/or enforcement of the Finance Documents.

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CHANGES TO THE PARTIES

No assignment by the Obligors

None of the Obligors may assign or transfer or cause or permit to be assumed any part of, or any interest in, its rights and/or obligations under the Finance Documents.

Assignment by the Obligors in relation to a proposed MLP structure

The Borrowers may request that the Group enters into an MLP structure for certain of the companies and assets of the Group, and the Finance Parties shall consider such request in their sole discretion, without any obligation to consent to such request.

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:

another Existing Lender, or an Affiliate of an Existing Lender;

a central bank or federal reserve;

subject to the consent (such consent not to be unreasonably withheld) of K-sure (with respect to the K-sure Lenders), to another bank or financial institution or to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (the “New Lender”), subject to (i) the prior consent of the Borrowers and the Agent (such consents 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) and (ii) the transfer being in an amount of minimum USD fifteen million (15,000,000);

to any New Lender (as defined above in (c)) if (i) an Event of Default has occurred and is continuing or (ii) to the extent that such transfer or assignment is in connection with the implementation of any securitisation, covered bond program or any similar or equivalent transaction;

to any New GIEK Lender; or

K-sure, if or when K-sure pays out under the K-sure Insurance Policy.

Any assignment and transfer made by any of the Lenders shall be made by way of an assignment and transfer, and shall not constitute a novation.

Assignment or transfer fee

Unless the Agent otherwise agrees and excluding an assignment or transfer to an Affiliate of a Lender, the New Lender (or New GIEK Lender, as applicable) shall, on the date upon which an assignment or transfer takes place pay to the Agent (for its own account) a fee of USD three thousand (3,000).

Additional requirements for transfer by GIEK Lender

Notwithstanding anything to the contrary in this Agreement, and with no prejudice to the other provisions relating to Transfers hereunder, the Agent shall only be obliged to execute a Transfer Certificate in relation to a Transfer by the GIEK Lender once:

it is satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the transfer to the transferee; and

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the transferee has paid to the Agent for its own account the transfer fee set out in Clause 27.4 (Assignment or transfer fee).

Limitations of responsibility of Existing Lenders

The Obligors’ performance

Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to the New Lender, or any New GIEK Lender for:

the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents or any other documents;

the financial condition of the Obligors;

the performance and observance by any of the Obligors of its obligations under the Finance Documents or any other documents; or

the accuracy of any statements (whether written or oral) made in or in connection with the Finance Documents or any other document.

New Lender’s and New GIEK Lender's own credit appraisal

Each New Lender and New GIEK Lender confirms to the Existing Lender and the other Finance Parties that it:

has made (and will continue to make) its own independent investigation and assessment of the financial condition and affairs of the Obligors and their related entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Existing Lender in connection with any Finance Document; and

will continue to make its own independent appraisal of the creditworthiness of the Obligors and their related entities whilst any amount is or may be outstanding under the Finance Documents or any Commitment is in force.

Re-transfer to an Existing Lender

Nothing in any Finance Document obliges an Existing Lender to:

accept a re-transfer from a New Lender or a New GIEK Lender of any of the rights and obligations assigned or transferred under this Clause 27; or

support any losses directly or indirectly incurred by the New Lender or New GIEK Lender by reason of the non-performance by any Borrower of its obligations under the Finance Documents or otherwise.

Procedure for transfer

Any Transfer shall be effected as follows:

the Existing Lender must notify the Agent of its intention to Transfer all or part of its rights and obligations by delivering a duly completed Transfer Certificate to the Agent duly executed by the Existing Lender and the New Lender (or New GIEK Lender, as the case may be);

subject to Clause 27.3 (Assignments and transfers by the Lenders), the Agent shall as soon as reasonably possible after receipt of a Transfer Certificate execute the Transfer Certificate and deliver a copy of the same to each of the Existing Lender and the New Lender (or New GIEK Lender, as the case may be); and

66 (66)

subject to Clause 27.3 (Assignments and transfers by the Lenders), the Transfer shall become effective on the Transfer Date.

Effects of the Transfer

On the Transfer Date:

to the extent that in the Transfer Certificate the Existing Lender seeks to transfer its rights and obligations under the Finance Documents, the Obligors and the Existing Lender shall be released from further obligations to one another under the Finance Documents and their respective rights against one another under the Finance Documents shall be cancelled (the “Discharged Rights and Obligations”), but the existing obligations owed by the Obligors under the Finance Documents shall not be released;

the Obligors and the New Lender or the New GIEK Lender shall assume obligations towards one another and/or acquire rights against one another which differ from the Discharged Rights and Obligations only insofar as the Obligors and the New Lender or the New GIEK Lender have assumed and/or acquired the same instead of the Obligors and the Existing Lender;

the Agent, the New Lender or the New GIEK Lender and the other Lenders shall acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had the New Lender or the New GIEK Lender been an original Lender hereunder with the rights and/or obligations acquired or assumed by it as a result of the Transfer and to that extent the Agent and the Existing Lender shall each be released from further obligations to each other under the Finance Documents; and

the New Lender or the New GIEK Lender shall become a Party as a “Lender”.

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 or any new GIEK Lender attains the benefit of the Finance Documents.

Disclosure of information

Any Lender may disclose:

to any of its Affiliates, branches, subsidiaries, its parent company, head office or regional office (together the “Permitted Parties”) and a potential assignee;

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, including a central bank or federal reserve, this Agreement or any of the Obligors;

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;

to any rating agency, insurer or insurance broker of, or direct or indirect provider of credit protection to any Permitted Party (including for the avoidance of doubt, K-sure and GIEK); and

to whom, to the extent that, information is required to be disclosed by (i) any law or applicable court or (ii) any governmental, supervisory or regulatory body with jurisdiction over the Permitted Party,

67 (67)

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 Borrowers if such potential assignee is not an affiliate of any of the Lenders.

ROLE OF THE AGENT

Appointment and authorisation of the Agent

Each Finance Party appoints the Agent to act as its agent under and in connection with the Finance Documents (including, but not limited to the Security Documents).

Each Finance Party authorises the Agent 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.

Each other Finance Party hereby further designates, appoints and transfers to the Agent the respective rights of each other Finance Party to receive, hold, administer and enforce the Mortgages covering the Drillships, or any one of them, as trustee mortgagee on behalf of the Finance Parties, and to take such action as trustee mortgagee and to exercise such powers and discretion respecting the Mortgages as are delegated to a ship mortgagee under such Mortgages or by applicable law, together with such powers and discretion that are reasonably incidental thereto. The Agent, as trustee mortgagee hereby declares that it accepts the trust hereby created for the limited purpose of holding the Mortgages and exercising remedies thereunder and agrees to perform such trust for the sole use and benefit of the Finance Parties on the terms set forth herein and upon execution and delivery of each respective Mortgage. In its capacity as trustee mortgagee, the Agent is entitled to all of the protections and indemnities of the Agent.

Duties of the Agent

The Agent shall not have any duties or responsibilities except those expressly set forth in the Finance Documents, and the Agent’s duties under the Finance Documents are solely mechanical and administrative in nature. The Agent shall:

promptly forward to a Party the original or a copy of any document which is delivered to it in its capacity as Agent for the attention of that Party by another Party;

supply the other Finance Parties with all material information which the Agent, in its capacity as Agent, receives from the Obligors;

if it receives notice from a Party referring to this Agreement, describing a Default and stating that the circumstance is a Default, promptly notify the Finance Parties; and

if the Agent is aware of any non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Agent or the Arranger) it shall promptly notify the other Finance Parties.

The Agent further agrees to act as security agent on behalf of the Lenders under and in connection with the Security Documents, hereunder in connection with the signing, execution and enforcement of the Security Documents.

Particular duties of the Agent in respect of GIEK and K-sure

The Agent shall:

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calculate and inform the Borrowers of interest and instalments, guarantee and insurance premiums and all amounts and sums due to the GIEK or K-sure pursuant to any Finance Document, the GIEK Guarantee, the K-sure Insurance Policy or the Fee Letters, receive (on behalf of the GIEK Lender, GIEK and K-sure) and make payments to GIEK and K-sure of such amounts and sums (to the extent actually received by the Agent);

supply GIEK and K-sure with financial information which the Agent has received in accordance with Clause 21.1 (Financial statements) and 21.2 (Compliance Certificate);

if it deems so appropriate, provide to GIEK and K-sure with any requests received from any Obligor;

supply the GIEK and K-sure with any information that the Agent considers to be material, and which the Agent receives in its capacity as Agent from an Obligor or any security providers under the Security Documents;

inform the GIEK and K-sure of any Event of Default or other non-compliance by any Obligor in respect to Clause 6 (Repayment and Reduction), Clause 9.2 (Payment of interest), Clause 21.1 (Financial statements), Clause 21.2 (Compliance Certificate)and 24.3 (Insurance) paragraph (e); and

unless otherwise instructed by the Required Lenders, request from the relevant Obligor that non-compliance with the provisions set out in sub clause (e) above be immediately remedied (if capable of remedy).

The Agent assumes no responsibility and neither the Agent nor any of its officers, directors, employees or agents shall be liable to GIEK or K-sure for any action taken or omitted to be taken hereunder or in connection with this Agreement unless caused in respect of gross negligence or wilful misconduct.

Consent solicitation with GIEK

Upon the Agent receiving a request from an Obligor to which the GIEK shall vote, the Agent shall forward such request to the GIEK Lender and GIEK.

Upon the GIEK Lender and GIEK having received a copy of a request as set out in paragraph (a) above, the GIEK Lender through the GIEK Guarantee Holder shall liaise with GIEK and take instructions from GIEK with respect to exercising its voting rights under this Agreement and relay such instructions to the GIEK Lender, unless with respect to matters relating to funding, in which the GIEK Lender can exercise its voting rights without taking instructions from GIEK.

Upon GIEK providing its instructions to the GIEK Lender (through the GIEK Guarantee Holder) pursuant to paragraph (b) above, the GIEK Lender shall ensure that a copy of those instructions are forwarded to the Agent (either directly or through the GIEK Guarantee Holder), such copy to be sent solely for information purposes, and shall not be relied upon by the Agent.

After having received instructions from GIEK pursuant to paragraph (b) above to the extent such instructions are required, the GIEK Lender or the GIEK Lender through the GIEK Guarantee Holder shall inform the Agent on how the GIEK Lender's voting rights shall be exercised. The Agent may rely on any voting result received by the GIEK Guarantee Holder without any further duty to inquire on the voting result.

Neither the Agent nor the GIEK Guarantee Holder shall have any obligation to any GIEK Lender to assess whether GIEK's consent is required.

Consent solicitation with K-sure

Upon the K-sure Agent receiving a request from an Obligor to which the K-sure Lenders shall vote, the K-sure Agent shall forward such request to the K-sure Lenders and K-sure.

69 (69)

Upon the K-sure Lenders and K-sure having received a copy of a request as set out in paragraph (a) above, the K-sure Lenders (or the K-sure Agent on their behalf) shall liaise with K-sure and take instructions from K-sure with respect exercising their voting rights under this Agreement.

Upon K-sure providing its written instructions to the K-sure Lenders (or the K-sure Agent on their behalf) pursuant to paragraph (b) above, the K-sure Lenders shall ensure that a copy of those instructions are forwarded to the K-sure Agent, such copy to be sent solely for information purposes, and shall not be relied upon by the K-sure Agent.

After having received instructions from K-sure pursuant to paragraph (b) above to the extent such instructions are required, the K-sure Lenders shall send a written notice to the K-sure Agent on how the K-sure Lenders' voting rights shall be exercised (a copy of which shall be provided to K-sure).

Each K-sure Lender shall only be entitled to provide one vote in respect of its K-sure Lenders Commitment.

The K-sure Agent shall not have any obligation to assess whether K-sure's consent is required.

Rights and discretions of the K-sure Agent

The K-sure Agent may rely on:

any representation, notice or document believed by it to be genuine, correct and appropriately authorised; and

any statement made by a director, authorised signatory or employee of any person regarding any matters which may reasonably be assumed to be within its knowledge or within its power to verify.

The K-sure Agent may assume (unless it has received notice to the contrary in its capacity as agent for the other K-sure Lenders) that:

no Default has occurred (unless it has actual knowledge of a Default arising under Clause 25 (Events of Default); and

any right, power, authority or discretion vested in any Party or the other K-sure Lenders has not been exercised.

The K-sure Agent may engage, pay for and rely on the advice or services of any lawyers, accountants, surveyors or other experts.

The K-sure Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement.

Notwithstanding any other provision of any Finance Document to the contrary, the K-sure Agent is not obliged to do or omit to do anything if it would or might in its reasonable opinion constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality.

K-sure’s instructions

Unless a contrary indication appears in a Finance Document, the K-sure Agent shall:

exercise each right, power, authority or discretion vested in it in accordance with any instructions given to it by K-sure (or, if so instructed by K-sure, refrain from exercising any right, power, authority or discretion vested in it); and

not be liable for any act (or omission) if it acts (or refrains from taking any action) in accordance with an instruction of K-sure.

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Unless a contrary indication appears in a Finance Document, any instructions given by K-sure, to the extent such instructions are required pursuant to the K-sure Insurance Policy, will be binding on all the K-sure Lenders.

In the absence of instructions from K-sure when the same are called for hereunder, the K-sure Agent may act (or refrain from taking action) as it considers to be in the best interest of the K-sure Lenders.

The K-sure Agent is not authorised to act on behalf of any K-sure Lenders (without first obtaining that K-sure Lender’s consent) in any legal or arbitration proceedings relating to any Finance Document. This paragraph (d) shall not apply to any legal or arbitration proceeding relating to the perfection, preservation or protection of rights under the Security Documents or the enforcement of the Security created under the Security Documents.

Responsibility for documentation for the K-sure Agent

The K-sure Agent shall not be:

responsible for the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Obligors or any of their Affiliates or any other person given in connection with any Finance Document; or

responsible for the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of or in connection with any Finance Document.

Exclusion of liability for the K-Sure Agent

Without limiting paragraph (b) below, the K-sure Agent will not be liable for any action taken by it under or in connection with any Finance Document, unless directly caused by its gross negligence or wilful misconduct.

The K-sure 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 K-sure Agent if the K-sure 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 K-sure Agent for that purpose.

Nothing in this Agreement shall oblige the K-sure Agent to carry out any “know your customer” or other checks in relation to any person on behalf of any K-sure Lenders and each K-sure Lender confirms to the K-sure Agent 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 K-sure Agent.

Relationship - Agent

The relationship between the Agent and the other Finance Parties is that of agent and principal only. Nothing in this Agreement shall be construed as to constitute the Agent or the Finance Parties as trustee or fiduciary or a trust for any other person, and neither the Agent nor the Finance Parties shall be bound to account to any Finance Party for any sum or the profit element of any sum received by it for its own account.

Relationship – GIEK Guarantee Holder

Nothing in this Agreement shall be construed as to constitute the GIEK Guarantee Holder as trustee or fiduciary for any other person, and the GIEK Guarantee Holder shall not be bound to account to any Finance Party for any sum or the profit element of any sum received by it for its own account.

Business with the Obligors

The Agent and the GIEK Guarantee Holder may accept deposits from, lend money to and generally engage in any kind of banking or other business with the Obligors.

71 (71)

Rights and discretions of the Agent

The Agent may rely on:

any representation, notice or document received by a Party believed by it to be genuine, correct and appropriately authorised; and

any statement made by a director, authorised signatory or employee of any person regarding any matters which may reasonably be assumed to be within his knowledge or within his power to verify.

The Agent may assume (unless it has received notice to the contrary in its capacity as Agent for the Lenders) that:

no Event of Default has occurred (unless it has actual knowledge of an Event of Default under Clause 25.1 (Non-payment)); and

any right, power, authority or discretion vested in any Party or the Required Lenders has not been exercised.

The Agent may engage, pay for and rely on the advice or services of any lawyers, accountants, surveyors or other experts.

The Agent may act in relation to the Finance Documents through its personnel and agents.

The Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement.

Notwithstanding any other provision of any Finance Document to the contrary, the Agent is not obliged to do or omit to do anything if it would or might in its reasonable opinion constitute a breach of any law or regulation or a breach of duty of confidentiality or render it liable to any person.

Required Lenders’ instructions

Unless a contrary indication appears in a Finance Document, the Agent shall (i) exercise any right, power, authority or discretion vested in it as Agent in accordance with any instructions given to it by the Required Lenders (or, if so instructed by the Required Lenders, refrain from exercising any right, power, authority or discretion vested in it as Agent) and (ii) not be liable for any act (or omission) if it acts in accordance with an instruction of the Required Lenders.

Unless a contrary indication appears in a Finance Document, any instructions given by the Required Lenders will be binding on all the Finance Parties.

The Agent may refrain from acting in accordance with the instructions of the Required Lenders (or, if appropriate, the Lenders) until it has received such security as it may require for any cost, loss or liability (together with any associated VAT) which it may incur in complying with the instructions.

In the absence of instructions from the Required Lenders (or, if appropriate, the Lenders) the Agent may act (or refrain from acting) as it considers to be in the best interest of the Lenders.

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.

Responsibility for documentation

The Agent shall keep and hold all Security Documents received and/or executed by the Agent in connection with any of the Finance Documents, including Security Documents executed by the Obligors or other

72 (72)

security providers on behalf of the Finance Parties in accordance with normal banking practice, for and on behalf of the Finance Parties.

The Agent:

is not responsible for the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Agent on behalf of a Party, the Obligors or any other person in or in connection with any Finance Document; and

is not responsible for the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or any other agreement, arrangement or document entered into, made in anticipation of or in connection with any Finance Document.

Exclusion of liability

Without limiting paragraph b) below, the Agent will not be liable for any action taken by it under or in connection with any Finance Document, unless directly caused by its gross negligence or wilful misconduct.

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 and agent of the Agent may rely on this Clause 28.

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.

Nothing in this Agreement shall oblige the Agent to carry out any “know your customer” or other checks in relation to any person on behalf of any Lender and each Lender confirms to the Agent 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.

Exclusion of liability – GIEK Guarantee Holder

Without limiting litra b) below, the GIEK Guarantee Holder will not be liable to any of the GIEK Lenders for any action taken by it under or in connection with any Finance Document, unless directly caused by its gross negligence or wilful misconduct.

No Party (other than the GIEK Guarantee Holder) may take any proceedings against any officer, employee or agent of the GIEK Guarantee Holder in respect of any claim it might have against the GIEK Guarantee Holder 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 and agent of the GIEK Guarantee Holder may rely on this Clause 28.17.

The GIEK Guarantee Holder 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 GIEK Guarantee Holder if the GIEK Guarantee Holder 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 GIEK Guarantee Holder for that purpose.

Nothing in this Agreement shall oblige the GIEK Guarantee Holder to carry out any “know your customer” or other checks in relation to any person on behalf of any GIEK Lender and each GIEK Lender confirms to the GIEK

73 (73)

Guarantee Holder 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 GIEK Guarantee Holder.

Lenders’ indemnity to the Agent

Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then reduced to zero, to its share of the Total Commitments immediately prior to their reduction to zero), indemnify the Agent, within ten (10) Business Days of demand, against any cost, loss or liability incurred by the Agent (otherwise than by reason of the Agent’s gross negligence or wilful misconduct) in acting as Agent under the Finance Documents (unless the Agent has been reimbursed by the Borrowers pursuant to a Finance Document).

GIEK Lender’s indemnity to the GIEK Guarantee Holder

Each GIEK Lender shall (in proportion to its share of the GIEK Lender Commitments or, if the GIEK Lender Commitments are then reduced to zero, to its share of the GIEK Commitments immediately prior to their reduction to zero), indemnify the GIEK Guarantee Holder, within three (3) Business Days of demand, against any cost, loss or liability incurred by the GIEK Guarantee Holder (otherwise than by reason of the GIEK Guarantee Holder’s gross negligence or wilful misconduct) in acting as GIEK Guarantee Holder under the Finance Documents (unless the GIEK Guarantee Holder has been reimbursed by the Borrowers pursuant to a Finance Document).

Claims under K-sure Insurance Policy

Unless the K-Sure Agent is disabled or otherwise unable to act on behalf of the K-Sure Lenders, each K-sure Lender acknowledges and agrees that it shall have no entitlement to make any claim or to take any action whatsoever under or in connection with each of the K-sure Insurance Policies except through the K-sure Agent and that all of the rights of the K-sure Lenders under each of the K-sure Insurance Policies shall only be exercised by the K-sure Agent.

Resignation of the Agent

The Agent may resign and appoint one of its affiliates as successor by giving notice to the other Finance Parties and the Borrowers.

Alternatively the Agent may, upon prior written consent of the Borrowers (not to be unreasonably withheld), resign by giving notice to the other Finance Parties and the Borrowers in which case the Required Lenders (after consultation with the Borrowers) may appoint a successor agent.

If the Required Lenders have not appointed a successor agent in accordance with paragraph b) above within thirty (30) days after notice of resignation was given, the Agent (after consultation with the Borrowers) may appoint a successor agent.

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.

The Agent’s resignation notice shall only take effect upon appointment of a successor.

Upon the appointment of a successor, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents but shall remain entitled to the benefit of this Clause 28. Each 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.

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After consultation with the Borrowers the Required Lenders may, by notice to the Agent, require it to resign in accordance with paragraph b) above. In this event, the Agent shall resign in accordance with paragraph b) above.

The Agent shall resign in accordance with paragraph (b) above (and, to the extent applicable, shall use reasonable endeavours to appoint a successor Agent pursuant to paragraph (c) above) if on or after the date which is three months before the earliest FATCA Application Date relating to any payment to the Agent under the Finance Documents, either:

the Agent fails to respond to a request under Clause 13.4 (FATCA Information) and a Lender reasonably believes that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date;

the information supplied by the Agent pursuant to Clause 13.4 (FATCA Information) indicates that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; or

the Agent notifies the Borrowers and the Lenders that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date;

and (in each case) a Lender reasonably believes that a Party will be required to make a FATCA Deduction that would not be required if the Agent were a FATCA Exempt Party, and that Lender, by notice to the Agent, requires it to resign.

Confidentiality

In acting as agent for the Finance Parties the Agent shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its divisions or departments.

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.

Credit appraisal by the Lenders

Lenders

Subject to Clause 28.23.2 (The GIEK Lender and the K-sure Lenders) below, without affecting the responsibility of the Obligors for information supplied by it or on its behalf in connection with any Finance Document, each Lender confirms to the Agent 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 (without limitation):

the financial condition, status and nature of the Obligors;

the legality, validity, effectiveness, adequacy or enforceability of any Finance Document and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; and

whether that Lender 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.

The GIEK Lender and the K-sure Lenders

Without affecting the responsibility of the Obligors for information supplied by it or on its behalf in connection with any Finance Document, the GIEK Lender and the K-sure Lenders confirm to the Agent that they have been,

75 (75)

and will continue to be, solely responsible for making their own independent appraisal and investigation of all risks arising under or in connection with the GIEK Guarantee and/or the K-sure Insurance Policy (as the case may be).

The GIEK Lender and the K-sure Lenders shall vote and otherwise act in accordance with any instructions received by it from GIEK and K-sure respectively. To the extent that GIEK and K-sure consents to any amendments to the GIEK Guarantee and/or the K-sure Insurance Policy, respectively, the GIEK Lender and the K-sure Lenders shall seek to obtain written confirmations from GIEK and K-sure, respectively, evidencing such consents, such confirmations to be forwarded to the Agent.

Conduct of business of the Finance Parties

No provision of this Agreement will:

interfere with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever manner it thinks fit;

oblige any Finance Party to investigate or claim any credit, relief, remission or repayment available to it or to the extent, order or manner of any claim; or

oblige any Finance Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.

SHARING AMONG THE FINANCE PARTIES

Payment to Finance Parties

If a Finance Party (a “Recovering Finance Party”) receives or recovers any amount from any of the Obligors other than in accordance with Clause 30 (Payment mechanics) and applies that amount to a payment due under the Finance Documents then:

the Recovering Finance Party shall promptly, within three (3) Business Days, notify details of the receipt or recovery to the Agent;

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 by or made by the Agent and distributed in accordance with Clause 30 (Payment mechanics), without taking account of Tax which would be imposed on the Agent in relation to the receipt, recovery or distribution; and

the Recovering Finance Party shall, within three (3) 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 30.5 (Partial payments).

Redistribution of payments

The Agent shall treat the Sharing Payment as if it had been paid by any of the Obligors, as the case may be, and distribute it between the Finance Parties (other than the Recovering Finance Party) in accordance with Clause 30.5 (Partial payments).

Recovering Finance Party’s rights

On a distribution by the Agent under Clause 29.2 (Redistribution of payments), the Recovering Finance Party will be subrogated to the rights of the Finance Parties which have shared in the redistribution.

76 (76)

If and to the extent that the Recovering Finance Party is not able to rely on its rights under paragraph a) above, the Borrowers shall be liable to the Recovering Finance Party for a debt equal to the Sharing Payment which is immediately due and payable.

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:

each Finance Party which has received a share of the relevant Sharing Payment pursuant to Clause 29.2 (Redistribution of payments) 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); and

that Recovering Finance Party’s rights of subrogation in respect of any reimbursement shall be cancelled and the Borrowers will be liable to the reimbursing Finance Party for the amount so reimbursed.

Exceptions

This Clause 29 shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this Clause 29, have a valid and enforceable claim against the relevant Obligor.

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 proceedings, if:

it notified that other Finance Party of the legal proceedings; and

that other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did do so as reasonably practicable having received notice and did not take separate legal or arbitration proceedings.

PAYMENT MECHANICS

Payments to the Agent

All payments by the Obligors or a Lender under the Finance Documents, including but not limited to repayments, interests, guarantee premiums and fees, shall be made:

to the Agent to its account with such office or bank as the Agent may from time to time designate in writing to the relevant Obligor or a Lender for this purpose; and

for value on the due date at such times and in such funds as the Agent may specify to the Party concerned as being customary at the time for settlement of transactions in the relevant currency in the place of payment.

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 the Borrowers) and 30.4 (Clawback), be made available by the Agent as soon as practicable after receipt to the Party entitled to receive payment in accordance with this Agreement, to such account as that Party may notify to the Agent by not less than five (5) Business Days’ notice.

Distributions to the Borrowers

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The Agent may (with the consent of the Borrowers or in accordance with Clause 31 (Set-off)), apply any amount received by it for the Obligors in or towards payment (on the date and in the currency and funds of receipt) of any amount due from the Obligors under the Finance Documents or in or towards purchase of any amount of currency to be so applied.

Clawback

Where a sum is to be paid to the Agent under the Finance Documents for distribution to another Party, the Agent is not obliged to pay that sum to that other Party until it has been able to establish to its satisfaction that it has actually received that sum.

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 was paid by the Agent shall on demand refund the same amount 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.

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:

firstly, in or towards payment pro rata of any unpaid fees, costs and expenses of the Agent under the Finance Documents;

secondly, in or towards payment pro rata of any accrued interest (including default interest and any guarantee or insurance premiums under the GIEK-Guarantee and/or the K-sure Insurance Policy), fees or commissions due but unpaid under this Agreement;

thirdly, in or towards payment pro rata of any principal due but unpaid and indemnification due but unpaid under this Agreement; and

finally, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents.

Application following an Event of Default

Following an Event of Default all monies received by the Agent shall be applied in the following order:

firstly, in respect of all costs and expenses whatsoever incurred in connection with or incidental to the enforcement of any Security Document, (excluding enforcement of the GIEK Guarantee and the K-sure Insurance);

secondly, in or towards satisfaction of all prior claims (being any claims, liabilities or debts owed or taking priority in respect of such proceeds over the Security Interests constituted by the Security Documents) secured in the Finance Parties’ secured assets;

thirdly, in or towards payment pro rata of any unpaid fees, costs and expenses of the Agent under the Finance Documents, the GIEK Guarantee and the K-sure Insurance Policy;

fourthly, in or towards payment pro rata of any accrued interest (including default interest), fee or commissions due but unpaid under this Agreement;

fifthly, in or towards payment pro rata of any principal due but unpaid and indemnification due but unpaid under this Agreement, including costs relating to the enforcement of the GIEK Guarantee and the K-sure Insurance; and

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finally, the balance (if any) to the Borrowers,

provided, however, that any sum received by the K-sure Agent from K-sure in respect of claims under a K-sure Insurance Policy shall be shared amongst the K-sure Lenders only and shall be applied in accordance with the K-sure Insurance Policy.

No set-off by the 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.

Payment on non-Business Days

Any payment 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).

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.

Currency of account

The Obligors shall pay:

any amount payable under this Agreement, except as otherwise provided for herein, in USD; and

all payments of costs and Taxes in the currency in which the same were incurred.

Exclusion of liability

The Lenders shall not be liable for any failure to perform the whole or any part of this Agreement resulting directly or indirectly from action of any government or governmental or local authority, or any general strike, lockout, boycott and blockade affecting any of the Lenders or their employees.

SET-OFF

A Lender 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 Lender) against any credit balance on any account that Obligor has with that Lender or against any other obligations owed by that Lender to that Obligor, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Lender may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.

NOTICES

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:

if by letter, when delivered at the address of the relevant Party;

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.

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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 or New GIEK Lender, to the address notified to the Agent:

If to the Agent: ING Bank N.V.

Agency Department

Att Martin Preuss / Judith Budhoo

Location code AMP H.02.007

P.O. Box 1800

1000 BV Amsterdam

The Netherlands

Tel no. +31 20 563 5306 / +31 20 563 4788

Fax no. +31 20 565 8226

Email: agency.services.ams@ingbank.com/ martin.preuss@ingbank.com/ judith budhoo@ingbank.com

If to the Borrowers: Seadrill Limited

c/o Seadrill Management Ltd.

2^nd Floor Building 11

Chiswick Business Park

566 Chiswick High Road

London W4 5YS

United Kingdom

Att: Jonas Ytreland

E-mail: jonas.ytreland@seadrill.com

Tel no: +44 (0) 20 8811 4700

Fax no: + 44 (0) 20 88 11 47 01

If to GIEK: GIEK (Guarantor)

Att of Jan Inge Roald

Dronning Maudsgt. 15

0122 Oslo

Tel No: 22 87 62 00

Fax No: 22 83 24 45

Email: Jan.inge.roald@giek.no

If to the GIEK Guarantee
Holder: Citibank N.A., London Branch

25 Canada Square, London E14 5LB, for the attention of Guido Musso/Davide Alessandrini (Export Agency Finance - CTS), (email: guido.musso@citi.com, davide.alessandrini@citi.com, tarvinder.singh.basi@citi.com, kiran.deoram.matondkar@citi.com),


If to K-sure:	Korea Trade Insurance Corporation 2-16 Floors, Seoul Central Building 136 Seorin Dong, Jongro-ku

80 (80)

Seoul 110-729, Republic of Korea,
Att: Moon-Gouk Chae/ Hongik KIM/ Sejun NOH
Tel No: + 82 51 630 5434
Fax No: + 82 51 630 5455


If to K-sure Agent:	ING Bank N.V., Seoul Branch 15th Floor, Hungkuk Life Insurance Building 226, Shinmunro 1-ga, Chongro-ku, Seoul 110-061, Korea Attn: James Kim/ Jieun Kang/ sunyoung Moon Tel no.: +82 2 317 1817/ 1811-2 Fax no.: +82 2 317 1881 E-mail: james.kim@asia.ing.com / jieun.kang@asia.ing.com / sunyoung.moon@asia.ing.com

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.

Communication with the Obligors

All communication from or to any of the Obligors shall be sent through the Agent and the Agent may direct any information to any of the Obligors by communication to the Borrowers.

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.

Electronic communication

Any communication to be made between the Agent, a Finance Party and an Obligor under or in connection with the Finance Documents, the GIEK Guarantee or the K-sure Insurance Policy may be made by electronic mail or other electronic means, including by way of publication on recognised web-page to which all Finance Parties have been granted access, if the Agent, the relevant Finance Party and the relevant Obligor (as the case may be):

agree that, unless and until notified to the contrary, this is to be an accepted form of communication;

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

notify each other of any change to their address or any other such information supplied by them.

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.

For the purpose of the Finance Documents, an electronic communication will be treated as being in writing. Each Party may rely without further inquiry on the senders' due authorisation in connection with any e-mail messages it

81 (81)

receives on behalf of the other Party. Each Party shall also, subject to the terms and conditions of this Agreement, be authorised to communicate by e-mail with any third parties who may be involved in this transaction or affected by the Finance Documents. Each Party confirms that it is aware of the fact that information by way of electronic exchange is transmitted unencrypted over a publicly accessible network, and that it acknowledges all the risks connected therewith (including but not limited to the fact that a bank relation (as such terms is used in the context of Swiss banking secrecy legislation) could be identified).

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.

MISCELLANEOUS

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.

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.

Amendments, consents and waivers

Required consents

Subject to Clause 34.3.2 (Exceptions), any term of the Finance Documents may be amended, consented to or waived only with the written consent of the Required Lenders, the Obligors and any such amendment will be binding on all Parties.

Subject to Clause 34.3.2 (Exceptions) any matter requiring approval (including the approval of any form of document) may be approved by the Agent acting on instructions of the Required Lenders.

The Agent may effect, on behalf of any Finance Party, any amendment or waiver or give any approval permitted by this Clause 34.3.

Exceptions

Any requirement for approval (including the approval of the form of any document) by the Finance Parties or by all Lenders or an amendment to or waiver that has the effect of changing or which relates to:

the definition of “Required Lenders”;

an extension of the date of any payment of any amount under the Finance Documents;

a reduction in the Applicable Margin (provided that the consent will only be required by all affected Lenders depending on which Applicable Margin that is reduced) or a reduction in the amount of any payment of principal, interest, fees or commission payable;

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an increase in or extension of any Lenders’ Commitment;

a term of the Finance Documents which expressly requires the consent of all the Lenders or of the Finance Parties;

a proposed substitution or replacement of any of the Obligors;

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; and/or

this Clause 34.3,

shall not be made without the prior written consent of all the Lenders.

Subject to approval from GIEK and K-sure (as relevant), 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 or a New GIEK Lender (if relevant).

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 Documents (other than an amendment or waiver referred to in paragraphs (i) and (iv) above) or another vote required by the Lenders under the terms of this Agreement within 15 Business Days (unless the Borrowers 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 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 may not be effected without the written consent of the Agent.

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:

is publicised by a Party as required by applicable laws and regulations;

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; or

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;

the GIEK Lender is obliged to provide to GIEK pursuant to the GIEK Guarantee;

the K-sure Lenders or the Agent are obliged to provide to K-sure pursuant to the K-sure Insurance Policy; or

is deemed by K-sure, GIEK and/or the GIEK Lender to be key information regarding a Borrower or the Guarantors and the transactions contemplated by the Finance Documents or any documents referred to therein and which may be published by K-sure, GIEK and/or the GIEK Lender pursuant to the conditions of the GIEK Guarantee.

Process Agent

83 (83)

Each Obligor hereby irrevocably:

appoints Seadrill Management AS (the "Process Agent") 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.

agrees that failure by such process agent to notify the Agent of the process will not invalidate the proceedings concerned.

If any process agent appointed pursuant to this Clause 34.5 (Process Agent) (or any successor thereto) shall cease to exist for any reason where process may be served, the Obligor will forthwith appoint another process agent with an office in Norway where process may be served and will forthwith notify the Agent thereof.

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.

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.

K-SURE

Conflict and K-sure Insurance Policy override

Without limiting in any manner the rights of the Lenders under the Facilities (other than the K-sure Facility), and subject and without prejudice to any amendments, consents or waivers as may be given, consented or agreed to by the Agent which is contrary to or inconsistent with any vote exercised by the K-sure Lenders (acting on the instructions of K-sure);

in case of any conflict between the Finance Documents and the K-sure Insurance Policy, the K-sure Insurance Policy shall prevail, and to the extent of such conflict or inconsistency, none of the K-sure Lenders or the K-sure Agent shall assert to K-sure, the terms of the relevant Finance Documents; and

nothing in this Agreement or any Finance Document shall permit or oblige any K-sure Lender or the K-sure Agent to act (or omit to act) in a manner that is inconsistent with any requirement of K-sure under or in connection with the K-sure Insurance Policy.

Demand under K-sure Insurance Policy

Notwithstanding any other terms as set forth in herein and the other Finance Documents, the K-sure Agent shall only make a written demand to K-sure under the K-sure Insurance Policy after the K-sure Agent has first made a written demand for payment of the relevant amount of the Guarantee Obligations to the Guarantors pursuant to Clause 18 (Guarantee and indemnity) hereof.

Prior consultation with K-sure

Each Borrower acknowledges that the K-sure Agent may, under the terms of the K-sure Insurance Policy be required:

to consult with K-sure, prior to the exercise of certain decisions under the Finance Documents (including the exercise of such voting rights in relation to any substantial amendment to any Finance Documents); and

84 (84)

to follow certain instructions given by K-sure.

Each K-sure Lender will be deemed to have acted reasonably if it has acted on the instructions of the K-sure Agent (given by K-sure to the K-sure Agent in accordance with the terms of a K-sure Insurance Policy) in the making of any such decision or the taking or refraining to take any action under any Finance Document to which it is a party.

Notification

The Borrowers will deliver a notice to the K-sure Agent promptly after it becomes aware of the occurrence of any political or commercial risk covered by a K-sure Insurance Policy and will:

pay any additional premium payable to K-sure in relation to the K-sure Insurance Policy; and

co-operate with the K-sure Agent on its reasonable request to take all steps necessary on the part of the Borrowers to ensure that the K-sure Insurance Policy remain in full force and effect throughout the Security Period which shall include providing the K-sure Agent with any information relating to any material commercial facts which could result in a Material Adverse Effect.

In addition, the Borrowers shall promptly supply to the K-sure Agent with copies of all financial or other information reasonably required by the K-sure Agent to satisfy any request for information made by K-sure pursuant to a K-sure Insurance Policy.

The Borrowers agree that it shall be reasonable for the K-sure Agent to make a request under this Clause if it is required to do so as a condition to maintaining a K-sure Insurance Policy in full force and effect.

Indemnity to the K-sure Agent in its capacity as K-sure Agent for K-sure and the K-Sure Lenders

Before the K-sure Agent commences any legal proceedings or otherwise incurs any costs (including, but not limited to legal costs) in acting in its capacity as K-sure Agent on behalf of K-sure or the K-sure Lenders, theK-sure Agent shall have received sufficient means, or assurance satisfactory to it that such sufficient means will be provided upon demand, from the K-sure Lenders or K-sure, respectively.

Application of Clauses 28.16 (Exclusion of liability) and 28.18

(Lenders' indemnity to the Agent) to K-sure

The provisions of Clauses 28.16 (Exclusion of liability) and 28.18 (Lenders' indemnity to the Agent) of this Agreement including (without limitation) the indemnity provisions therein shall be deemed repeated and shall apply in respect of K-sure in this Agreement as if each reference to the Agent were a reference to K-sure.

GOVERNING LAW AND ENFORCEMENT

Governing law

This Agreement shall be governed by Norwegian law.

Jurisdiction

For the benefit of each Finance Party, each of the Obligors agrees that the courts of Oslo, Norway have jurisdiction to settle any dispute arising out of or in connection with the Finance Documents including a dispute regarding the existence, validity or termination of this Agreement, and each of the Obligors accordingly submits to the non-exclusive jurisdiction of the Oslo District Court (Oslo tingrett).

85 (85)

Nothing in this Clause 36.2 shall limit the right of the Finance Parties to commence proceedings against any of the Obligors in any other court of competent jurisdiction. To the extent permitted by law, the Finance Parties may take concurrent proceedings in any number of jurisdictions.

* * *

SCHEDULE 1
LENDERS AND INITIAL COMMITMENTS



Name of initial Lenders:	Commercial Commitment	GIEK Lender Commitment	KEXIM Commitment	K-sure Lenders Commitment
Commercial Lenders:
ING Bank N.V. (Mandated Lead Arranger)	USD 50,000,000
ABN AMRO Bank N.V., Oslo Branch (Lead Arranger)	USD 24,250,000
BNP Paribas SA (Lead Arranger)	USD 24,250,000
KfW IPEX-Bank GmbH (Mandated Lead Arranger)	USD 11,750,000
Norddeutsche Landesbank Girozentrale (Mandated Lead Arranger)	USD 36,750,000
Sumitomo Mitsui Banking Corporation (Mandated Lead Arranger)	USD 19,250,000

86 (86)



Standard Chartered Bank (Mandated Lead Arranger)	USD 36,750,000
The GIEK Lender:
Citibank Europe Plc (Mandated Lead Arranger)		USD 575,000,000




K-sure Lenders:
HSBC Bank plc (Mandated Lead Arranger)				USD 61,200,000
ING Bank N.V., Seoul Branch (Mandated Lead Arranger)				USD 30,000,000
Credit Suisse AG (Mandated Lead Arranger)				USD 61,200,000
The Bank of Tokyo-Mitsubishi UFJ, Ltd. (Mandated Lead Arranger)				USD 61,200,000
Sumitomo Mitsui Banking Corporation (Mandated Lead Arranger)				USD 61,200,000
KfW IPEX-Bank GmbH (Mandated Lead Arranger)				USD 61,200,000
KEXIM:
The Export-Import Bank of Korea (Mandated Lead Arranger)			USD 336,000,000
Total:	USD 203,000,000	USD 575,000,000	USD 336,000,000	USD 336,000,000

87 (87)



Names of acceded Lenders
Cerulean Investments LP (Commercial Lender)
Kommunal Landspensjonskasse (GIEK Lender)
Sumitomo Trust Bank, Limited (GIEK Lender)

Aggregate Commitments per Facility



Commercial Facility	GIEK Lender Facility	KEXIM Facility	K-sure Facility	Total Commitment
USD 203,000,000	USD 575,000,000	USD 336,000,000	USD 336,000,000	USD 1,450,000,000

Aggregate Commitments allocated to the Tranches for each Drillship



Facility	Tranches relating to West Vela	Tranches relating to West Tellus
Commercial Facility	67.666.667	67.666.667
GIEK Lender Facility	191.666.667	191.666.667
KEXIM Facility	112.000.000	112.000.000
K-sure Facility	112.000.000	112.000.000
Total	USD 483.333.333	USD 483.333.333

SCHEDULE 2
GUARANTORS AND DRILLSHIPS

88 (88)



DRILLSHIP Name, type and IMO number	GUARANTORS Drillship owner, Intra-Group Charterer	Charter Contracts (Existing and next contract) Structure, contract date, duration, dayrate in USD and options	End-user	Built and Ship Registry	Average Market Value in USD
West Vela	Drillship Owner (Borrower): Seadrill Vela Hungary Kft. Intra-Group Charterer: Seadrill Gulf Operations Vela LLC (USA)	Existing contract: Dayrate: USD 565,000 Effective: 10 October 2012 Expiration: January 2021 Next contract: [•]	Existing contract: BP Exploration & Production Inc. Next contract: [•]	Delivered from Samsung Heavy Industries (Korea) June 2013 Panama flag	USD 675,000,000 (RS Platou: USD 650,000,000 Fearnleys: USD 700,000,000)
West Tellus	Drillship Owner (Borrower): Seadrill Tellus Ltd. Intra-Group Charterer: To be agreed.	Existing contract: Dayrate: USD 580,000 Effective: 5 June 2013 Expiration: Estimated to 180 days following start-up date (start up between September and December 2013) Next contract: [•]	Existing contract: Chevron China Energy Company Next contract: [•]	Delivered from Samsung Heavy Industries (Korea) October 2013 Panama flag	USD 675,000,000 (RS Platou: USD 650,000,000 Fearnleys: USD 700,000,000)
Total:
Other Guarantors: Seadrill Capricorn LLC and Seadrill Limited

SCHEDULE 3
CONDITIONS PRECEDENT (ALL CONDITIONS PREVIOUSLY FULFILLED)

89 (89)

Part I
(Conditions Precedent to the Closing Date)


1.	CORPORATE AUTHORISATION

In respect of each Obligor:


(a)	Company certificate (or similar);


(b)	Articles of Association, Certificate of Incorporation and By-laws;


(c)	Updated Good Standing Certificate (or similar);


(d)	Resolutions passed at a board meeting of the relevant Obligor evidencing:


(i)	the approval of the terms of, and the transactions contemplated by, the Finance Documents to which it is a party; and


(ii)	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 in respect of the persons signing on behalf of the Borrower


(e)	Power of Attorney (notarised and legalised if requested by the Agent); and


(f)	Directors Certificate, including, but not limited to specimen signatures of each person signing on behalf of the relevant Obligor and 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, other authorities or third parties 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


(a)	This Agreement;


(b)	The Share Charges;


(c)	The Fee Letters;


(d)	Agreed form of all other Security Documents; and


(e)	Any other Finance Documents except those that will be delivered pursuant to Part II (Conditions precedent for each Utilisation Date) and Part III (Closing Documents Utilisation Date) of this Schedule 3.

90 (90)


4.	SPECIFIC GIEK LENDER/GIEK DOCUMENTS


(a)	The offer for the GIEK Guarantee;


(b)	If not included in the offer for the GIEK Guarantee, a written confirmation from GIEK that it will accept any amendments or consents consented to by the Required Lenders, even if such amendments or consents have not been consented to by the GIEK Lender (acting on the instructions of GIEK);


(c)	Written confirmation from the lawfirm BA-HR acting for the Agent addressed to the GIEK Lender confirming that all GIEK’s conditions as set out in the GIEK Guarantee have been included in the Finance Documents; and


(d)	Confirmation from ING to GIEK regarding ING's final hold.


5.	SPECIFIC K-SURE LENDERS/ K-SURE REQUIREMENTS


(a)	A copy of any documents, authorisations, opinions or assurances as may be required by K-sure.


6.	LEGAL OPINIONS


(a)	Agreed form legal opinion from Norwegian law counsel relating to Norwegian law matters and agreed form legal opinion from Norwegian law counsel relating to Norwegian law matters;


(b)	Agreed form legal opinion from Bermuda law counsel relating to Bermuda law matters and agreed form legal opinion from Bermuda law counsel relating to Bermuda law matters;


(c)	Agreed form legal opinion from New York counsel relating to New York law matters;


(d)	Agreed form legal opinion from Panama counsel relating to Panama law matters;


(e)	Agreed form legal opinion from Delaware counsel relating to Delaware law matters;


(f)	Agreed form legal opinion from Hungary counsel relating to Hungary law matters;


(g)	Agreed form legal opinion from Texas counsel relating to Texas law matters; and


(h)	Executed or agreed form of legal opinions from any such other relevant legal counsels as the Agent may request.


7.	MISCELLANEOUS


(a)	A declaration from the Parent that as from September 30 2012, nothing shall have occurred that may have a Material Adverse Effect, and that the Borrowers and the Intra-Group Charterers are free of any Financial Indebtedness, except for subordinated intercompany loans.


(b)	Evidence that all fees, costs and expenses referred to in Finance Documents as payable on or prior to the Closing Date, have or will be paid on its due date;


(c)	Any Letter of Acceptance of Appointment by any entity (including the Process Agent) appointed as process agent on behalf of any Obligor pursuant to any of the Finance Documents;


(d)	An effective interest letter;


(e)	The Original Financial statements;

91 (91)


(f)	The Cash Flow Projections;


(g)	New York counsel (H&K) to confirm receipt of original membership interest certificates for the Intra-Group Charterers;


(h)	“Know your customer” documents required by the Lenders; and


(i)	Any other documents as reasonably requested by the Agent.

92 (92)

Part II
(Conditions Precedent for each Utilisation Date)


1.	CORPORATE AUTHORISATION

Corporate Authorisations only to be delivered to the extent not covered by Part I (Conditions precedent for the Closing Date), or if considered outdated for the purpose of any legal opinions.

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 Borrower evidencing:


(i)	the approval of the terms of, and the transactions contemplated by, the Finance Documents to which it is a party; and


(ii)	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 in respect of the persons signing on behalf of the Borrower


(e)	Power of Attorney (notarised and legalised if requested by the Agent); and


(f)	Directors Certificate, including, but not limited to specimen signatures of each person signing on behalf of the Borrower and 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 relevant 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

The following Security Documents relating to the relevant Borrower and Drillship being delivered, duly signed by all the relevant parties thereto together with evidence of that the security created thereunder is legally perfected on first priority in accordance with the terms of each of the Finance Documents;


(e)	The Assignment of Earnings;


(f)	The Assignment of Earnings Accounts;


(g)	The Assignment of Insurances;

93 (93)


(h)	Signed mortgage and evidence that the Mortgage has been prepositioned with the Panama register; and


(i)	Any other Finance Document to the extent applicable.


4.	SPECIFIC K-SURE REQUIREMENTS


(b)	Evidence satisfactory to the Agent that the full amount of the K-sure Premium payable to K-sure has been paid;


(c)	Evidence that the K-sure Insurance Policy is in full force and effect on each Utilisation Date; and


(d)	A copy of any additional documents, authorisations, opinions or assurances as may be required by K-sure.


5.	SPECIFIC GIEK LENDER/GIEK DOCUMENTS


(i)	Evidence that the GIEK Guarantee is in full force and effect on the Utilisation Date;


(j)	An Exporter's statement covering section 7 and 8 of the GIEK Guarantee.


(k)	Written confirmation from the lawfirm BA-HR DA acting for the Agent addressed to the GIEK Lender that:


157(i)	all conditions precedent for disbursing the relevant Tranche of the GIEK Lender Facility have been fulfilled; and


157(ii)	that all GIEK’s conditions as set out in the GIEK Guarantee have in substance been included in the Finance Documents (in case of any amendments to any Finance Document or the GIEK Guarantee since the last confirmation);


(l)	Satisfaction of any other requirement by GIEK pursuant to the GIEK Guarantee or otherwise required in connection therewith by GIEK or the GIEK Lender.


6.	THE DRILLSHIP


(j)	Results of maritime registry searches with respect to the Drillship, which result shall be acceptable to the Agent;


(k)	Evidence that the Market Value shall be equal to or greater than 125% of the requested amount to be borrowed on the Utilisation Date, based on market valuations not being older than five (5) months;


(l)	Copies of insurance policies/cover notes documenting that insurance cover has been taken out in respect of the Drillship in accordance with Clause 24.3 (Insurance) and evidencing that the Agent’s (on behalf of the Finance Parties) Security Interest in the insurance policies have been noted on first priority; and


(m)	The Insurance Report.


7.	MISCELLANEOUS


(a)	The Utilisation Request at least five (5) Business Days prior to the relevant Utilisation Date;

94 (94)


(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 and the Borrowers are in compliance with the financial covenants as set out in Clause 22 (Financial Covenants);


(d)	Any Letter of Acceptance of Appointment by any entity (including the Process Agent) appointed as process agent on behalf of any Obligor pursuant to any of the Finance Documents;


(e)	The Intra-Group Charterparty in a form and substance satisfactory to the Agent in respect of the relevant Drillship, and the relevant Satisfactory Drilling Contract;


(f)	The Contract Memo for the Drillship to which the relevant Utilisation relates;


(g)	Any “Know your customer” documents required by the Lenders (if applicable);


(h)	Evidence that the Bermuda share charges and the Hungarian quota pledges, if relevant, has/have been filed with the Bermuda Register of Charges;


(i)	The opening balance for each of the Borrowers, and proof of capitalization for each of the Borrowers;


(j)	Evidence that the New York membership interest pledge(s) and the New York law Assignment of Earnings have been filed with the UUC; and


(k)	Any other documents as reasonably requested by the Agent.


8.	LEGAL OPINIONS


(a)	Executed legal opinion from Norwegian law counsel relating to Norwegian law matters;


(b)	Executed legal opinion from Bermuda law counsel relating to Bermuda law matters;


(c)	Executed legal opinion from New York law counsel relating to New York law matters;


(d)	Executed legal opinion from Delaware law counsel relating to Delaware law matters;


(e)	Executed legal opinion from Korean law counsel relating to Korean law matters;


(f)	Executed legal opinion from Texas counsel relating to Texas law matters; and


(g)	Executed or agreed form legal opinion(s) from any such other relevant legal counsels as the Agent may request.

Part III
(Closing Documents Utilisation Date)

On the Utilisation Date the Agent shall receive the following documents and the Borrower shall undertake actions pursuant to a closing memo, including perfection of Mortgage and Protocol of Delivery.


(f)	Protocol of Delivery and Acceptance;

95 (95)


(g)	Certificates of ownership and class (with the appropriate notation) from the appropriate authority showing the registered ownership of the Drillship;


(h)	Results of maritime registry searches with respect to the Drillship, which result shall be acceptable to the Agent;


(i)	The relevant Mortgage to be effective;


(j)	Executed legal opinion from Panama counsel relating to the Mortgage;


(k)	Executed legal opinion from Hungary counsel relating to the execution of the mortgage (if not already provided under Part II above); and


(l)	Legal opinion from any such other relevant legal counsels as the Agent may request.


(m)	Receipt of the relevant signed acknowledgement of assignment of intra group charter earnings by the relevant Intra-Group Charterer.


(n)	Receipt of the relevant signed acknowledgment of the assignment of accounts from account bank.

Part IV

(Conditions Subsequent)

As soon as possible, and in any case within three months after the date of the relevant Utilisation, evidence that any and all payments of the Earnings (including by end-users) are instructed to be paid to the Earnings Accounts;

Within five months after the Closing Date, evidence that such payments mentioned in (a) above have been initiated; and

If applicable, as soon as possible, and in any case with in one months after the Closing Date, evidence that the Hungarian share charge(s) have been filed with the Hungarian Court of Registration.

SCHEDULE 4
FORM OF UTILISATION REQUEST

To: ING Bank N.V, as Agent

From: [relevant Borrower]

Date: [ ]

SEADRILL LIMITED – USD 1,450,000,000 SENIOR SECURED CREDIT FACILITY AGREEMENT ORIGINALLY DATED 20 MARCH 2013, AS AMENDED THEREAFTER (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.

96 (96)


(h)	You are hereby irrevocably notified that we wish to make the following advance for the [Commercial Facility / GIEK Lender Facility/ KEXIM Facility/ K-sure Facility]:


(i)	Proposed Utilisation Date: [ ]


(j)	Principal Amount: [ ]


(k)	Interest Period: [ ]


(l)	The proceeds of the Utilisation shall be credited to [•] [insert name and number of account].

(m)

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

[relevant Borrower]

By: __________________________________

Name:

Title: [authorised officer]

SCHEDULE 5
FORM OF COMPLIANCE CERTIFICATE

To: ING Bank N.V, as Agent

From: Seadrill Limited as Parent and the Borrowers

Date: [•] [To be delivered no later than hundred and eighty (180)/seventy (70) days after each reporting date]

SEADRILL LIMITED – USD 1,450,000,000 SENIOR SECURED CREDIT FACILITY AGREEMENT ORIGINALLY DATED 20 MARCH 2013 AS AMENDED THEREAFTER (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 150,000,000.

97 (97)


1.2	Leverage Ratio

The Leverage Ratio of the Group was [ ] while the Leverage Ratio is required not to exceed 4.5:1.


1.3	Equity Ratio

The Equity Ratio of the Group was [ ] while the minimum Equity Ratio shall be no less than 30 %.


1.4	Interest Cover Ratio

The Interest Cover Ratio of the Group was [ ] while the Interest Cover Ratio shall be no less than 2.5:1.


1.5	Current Ratio

The Current Ratio of the Group was [ ] while the Current Ratio shall be minimum 1:1.


1.6	Debt Service Cover Ratio

The Debt Service Cover Ratio of each relevant Borrower was [ ] while the Debt Service Cover Ratio shall be no less than 1.15:1 for each of the Borrowers.


1.7	Market Value

The Market Value of each of the Drillships, and the Drillships in aggregate is attached as Appendix 1 hereto while the minimum Market Value shall be equal to or higher than [125%/ 140%] (as applicable) of the sum of the outstanding Loans.


1.8	Insurance

We confirm that each of the Drillships is insured against such risks and in such amounts as set out in Appendix 2 hereto.


1.9	Cash Distributions from Investments

Cash Distributions from Investments are as set out in Appendix 3 hereto.


1.10	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 and the Borrowers

By:___________________________

Name:

Title: [authorised officer]

98 (98)

Appendix 1 – Market Value



Drillship	Valuation from [Approved Broker]	Valuation from [Approved Broker]	Average Market Value
West Tellus
West Vela

Appendix 2 - Insurance



Drillship	Hull & Machinery	Freight Interest	Hull Interest	P&I	War risk	Insured Amount	MAPP
West Tellus
West Vela

Appendix 3 – Cash Distributions from Investments

SCHEDULE 6
FORM OF TRANSFER CERTIFICATE

To: ING Bank N.V, as Agent

From: [•] (the ”Existing Lender”) and [•] (the ”New Lender”)

Date: [•]

SEADRILL LIMITED – USD 1,450,000,000 SENIOR SECURED CREDIT FACILITY AGREEMENT ORIGINALLY DATED 20 MARCH 2013 AS AMENDED THEREAFTER (THE “AGREEMENT”)

We refer to the Agreement. Terms defined in the Agreement have the same meaning in this Transfer Certificate unless given a different meaning in this Transfer Certificate.

With reference to Clause 27 (Changes to the Parties):


(j)	The Existing Lender, in its capacity as Lender under the Agreement, confirms that it participates with [ ] of the [SPECIFY WHICH FACILITY] being [ ] per cent of the Total Commitments.


(k)	The Existing Lender hereby transfers to the New Lender [ ] per cent of the Total Commitments as specified in the Schedule hereto, and of the equivalent rights and interest in all Finance Documents, and the New Lender hereby accepts such transfer from the Existing Lender in accordance with the terms set out herein and Clause 27 (Changes to the Parties) of the Agreement

99 (99)

and assumes the same obligations to the other Finance Parties as it would have been under if it was an original Lender.


(l)	The Transfer Date is [ ].


(m)	The New Lender confirms that it has received a copy of the Agreement, together with such other information as it has required in connection with this transaction. The New Lender expressly acknowledges and agrees to the limitations on the Existing Lender’s responsibility set out in Clause 27.6 (Limitations of responsibility of Existing Lenders) of the Agreement.


(n)	The New Lender hereby undertakes to the Existing Lender and the Borrowers that it will perform in accordance with the terms and conditions of the Agreement all those obligations which will be assumed by it upon execution of this Transfer Certificate.


(o)	The address, telefax number and attention details for notices, as well as the account details of the New Lender, are set out in the Schedule.


(p)	This Transfer Certificate is governed by Norwegian law, with Oslo District Court (Oslo tingrett) as legal venue.

The Schedule

Commitments/rights and obligations to be transferred

I Existing Lender: [ ]

II New Lender: [ ]

III Specify which Facility: [ ]

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.]

100 (100)

Existing Lender: New Lender:

[•] [•]

By: __________________________________ By: ________________________________

Name: Name:

Title: Title:

This Transfer Certificate is accepted and agreed by the Agent and the Transfer Date is confirmed as [].

Agent:


ING Bank N.V.


By: __________________________________

Name:

101 (101)

SCHEDULE 7
REPAYMENTS



#	Date	West Vela		West Tellus			Total
		Installment Rig 2	O/S Rig 2	Installment Rig 3	O/S Rig 3	Installment	966,666,667
			483,333,333		483,333,333
1	31-May-13	-	483,333,333	-	483,333,333	-	966,666,667
2	31-Aug-13	10,069,444	473,263,889	-	483,333,333	10,069,444	956,597,223
3	30-Nov-13	10,069,444	463,194,445	10,069,444	473,263,889	20,138,888	936,458,335
4	28-Feb-14	10,069,444	453,125,001	10,069,444	463,194,445	20,138,888	916,319,447
5	31-May-14	10,069,444	443,055,557	10,069,444	453,125,001	20,138,888	896,180,559
6	31-Aug-14	10,069,444	432,986,113	10,069,444	443,055,557	20,138,888	876,041,671
7	30-Nov-14	10,069,444	422,916,669	10,069,444	432,986,113	20,138,888	855,902,783
8	28-Feb-15	10,069,444	412,847,225	10,069,444	422,916,669	20,138,888	835,763,895
9	31-May-15	10,069,444	402,777,781	10,069,444	412,847,225	20,138,888	815,625,007
10	31-Aug-15	10,069,444	392,708,337	10,069,444	402,777,781	20,138,888	795,486,119
11	30-Nov-15	10,069,444	382,638,893	10,069,444	392,708,337	20,138,888	775,347,231
12	29-Feb-16	10,069,444	372,569,449	10,069,444	382,638,893	20,138,888	755,208,343
13	31-May-16	10,069,444	362,500,005	10,069,444	372,569,449	20,138,888	735,069,455
14	31-Aug-16	10,069,444	352,430,561	10,069,444	362,500,005	20,138,888	714,930,567
15	30-Nov-16	10,069,444	342,361,117	10,069,444	352,430,561	20,138,888	694,791,679
16	28-Feb-17	10,069,444	332,291,673	10,069,444	342,361,117	20,138,888	674,652,791
17	31-May-17	10,069,444	322,222,229	10,069,444	332,291,673	20,138,888	654,513,903
18	31-Aug-17	10,069,444	312,152,785	10,069,444	322,222,229	20,138,888	634,375,015
19	30-Nov-17	10,069,444	302,083,341	10,069,444	312,152,785	20,138,888	614,236,127
20	28-Feb-18	50,951,393	251,131,949	52,361,115	259,791,671	103,312,507	510,923,620
21	31-May-18	8,659,722	242,472,227	8,659,722	251,131,949	17,319,444	493,604,176

102 (102)



22	31-Aug-18	8,659,722	233,812,505	8,659,722	242,472,227	17,319,444	476,284,732
23	30-Nov-18	8,659,722	225,152,783	8,659,722	233,812,505	17,319,444	458,965,288
24	28-Feb-19	8,659,722	216,493,061	8,659,722	225,152,783	17,319,444	441,645,844
25	31-May-19	8,659,722	207,833,339	8,659,722	216,493,061	17,319,444	424,326,400
26	31-Aug-19	8,659,722	199,173,617	8,659,722	207,833,339	17,319,444	407,006,956
27	30-Nov-19	8,659,722	190,513,895	8,659,722	199,173,617	17,319,444	389,687,512
28	29-Feb-20	8,659,722	181,854,173	8,659,722	190,513,895	17,319,444	372,368,068
29	31-May-20	8,659,722	173,194,451	8,659,722	181,854,173	17,319,444	355,048,624
30	31-Aug-20	8,659,722	164,534,729	8,659,722	173,194,451	17,319,444	337,729,180
31	30-Nov-20	8,659,722	155,875,007	8,659,722	164,534,729	17,319,444	320,409,736
32	28-Feb-21	8,659,722	147,215,285	8,659,722	155,875,007	17,319,444	303,090,292
33	31-May-21	8,659,722	138,555,563	8,659,722	147,215,285	17,319,444	285,770,848
34	31-Aug-21	8,659,722	129,895,841	8,659,722	138,555,563	17,319,444	268,451,404
35	30-Nov-21	8,659,722	121,236,119	8,659,722	129,895,841	17,319,444	251,131,960
36	28-Feb-22	8,659,722	112,576,397	8,659,722	121,236,119	17,319,444	233,812,516
37	31-May-22	8,659,722	103,916,675	8,659,722	112,576,397	17,319,444	216,493,072
38	31-Aug-22	8,659,722	95,256,953	8,659,722	103,916,675	17,319,444	199,173,628
39	30-Nov-22	8,659,722	86,597,231	8,659,722	95,256,953	17,319,444	181,854,184
40	28-Feb-23	8,659,722	77,937,509	8,659,722	86,597,231	17,319,444	164,534,740
41	31-May-23	8,659,722	69,277,787	8,659,722	77,937,509	17,319,444	147,215,296
42	31-Aug-23	8,659,722	60,618,065	8,659,722	69,277,787	17,319,444	129,895,852
43	30-Nov-23	8,659,722	51,958,343	8,659,722	60,618,065	17,319,444	112,576,408
44	29-Feb-24	8,659,722	43,298,621	8,659,722	51,958,343	17,319,444	95,256,964
45	31-May-24	8,659,722	34,638,899	8,659,722	43,298,621	17,319,444	77,937,520
46	31-Aug-24	8,659,722	25,979,177	8,659,722	34,638,899	17,319,444	60,618,076
47	30-Nov-24	8,659,722	17,319,455	8,659,722	25,979,177	17,319,444	43,298,632
48	28-Feb-25	8,659,722	8,659,733	8,659,722	17,319,455	17,319,444	25,979,188
49	31-May-25	8,659,733	-	8,659,722	8,659,733	17,319,455	8,659,733
50	31-Aug-25	-	-	8,659,733	-	8,659,733	-

103 (103)



#	West Vela Tranches	Installment	GIEK Lender Facility 191,666,667	Installment	Kexim Facility 112,000,000	Installment	K-Sure Facility 112,000,000	Installment	Commercial Facility 67,666,667	Installment	Total 483,333,333
1	31-Aug-13	3,993,056	187,673,611	2,333,333	109,666,667	2,333,333	109,666,667	1,409,722	66,256,945	10,069,444	473,263,889
2	30-Nov-13	3,993,056	183,680,555	2,333,333	107,333,334	2,333,333	107,333,334	1,409,722	64,847,223	10,069,444	463,194,445
3	28-Feb-14	3,993,056	179,687,499	2,333,333	105,000,001	2,333,333	105,000,001	1,409,722	63,437,501	10,069,444	453,125,001
4	31-May-14	3,993,056	175,694,443	2,333,333	102,666,668	2,333,333	102,666,668	1,409,722	62,027,779	10,069,444	443,055,557
5	31-Aug-14	3,993,056	171,701,387	2,333,333	100,333,335	2,333,333	100,333,335	1,409,722	60,618,057	10,069,444	432,986,113
6	30-Nov-14	3,993,056	167,708,331	2,333,333	98,000,002	2,333,333	98,000,002	1,409,722	59,208,335	10,069,444	422,916,669
7	28-Feb-15	3,993,056	163,715,275	2,333,333	95,666,669	2,333,333	95,666,669	1,409,722	57,798,613	10,069,444	412,847,225
8	31-May-15	3,993,056	159,722,219	2,333,333	93,333,336	2,333,333	93,333,336	1,409,722	56,388,891	10,069,444	402,777,781
9	31-Aug-15	3,993,056	155,729,163	2,333,333	91,000,003	2,333,333	91,000,003	1,409,722	54,979,169	10,069,444	392,708,337
10	30-Nov-15	3,993,056	151,736,107	2,333,333	88,666,670	2,333,333	88,666,670	1,409,722	53,569,447	10,069,444	382,638,893
11	29-Feb-16	3,993,056	147,743,051	2,333,333	86,333,337	2,333,333	86,333,337	1,409,722	52,159,725	10,069,444	372,569,449
12	31-May-16	3,993,056	143,749,995	2,333,333	84,000,004	2,333,333	84,000,004	1,409,722	50,750,003	10,069,444	362,500,005
13	31-Aug-16	3,993,056	139,756,939	2,333,333	81,666,671	2,333,333	81,666,671	1,409,722	49,340,281	10,069,444	352,430,561
14	30-Nov-16	3,993,056	135,763,883	2,333,333	79,333,338	2,333,333	79,333,338	1,409,722	47,930,559	10,069,444	342,361,117
15	28-Feb-17	3,993,056	131,770,827	2,333,333	77,000,005	2,333,333	77,000,005	1,409,722	46,520,837	10,069,444	332,291,673
16	31-May-17	3,993,056	127,777,771	2,333,333	74,666,672	2,333,333	74,666,672	1,409,722	45,111,115	10,069,444	322,222,229
17	31-Aug-17	3,993,056	123,784,715	2,333,333	72,333,339	2,333,333	72,333,339	1,409,722	43,701,393	10,069,444	312,152,785
18	30-Nov-17	3,993,056	119,791,659	2,333,333	70,000,006	2,333,333	70,000,006	1,409,722	42,291,671	10,069,444	302,083,341
19	28-Feb-18	3,993,056	115,798,603	2,333,333	67,666,673	2,333,333	67,666,673	42,291,671	0	50,951,393	251,131,949
20	31-May-18	3,993,056	111,805,547	2,333,333	65,333,340	2,333,333	65,333,340			8,659,722	242,472,227
21	31-Aug-18	3,993,056	107,812,491	2,333,333	63,000,007	2,333,333	63,000,007			8,659,722	233,812,505
22	30-Nov-18	3,993,056	103,819,435	2,333,333	60,666,674	2,333,333	60,666,674			8,659,722	225,152,783
23	28-Feb-19	3,993,056	99,826,379	2,333,333	58,333,341	2,333,333	58,333,341			8,659,722	216,493,061
24	31-May-19	3,993,056	95,833,323	2,333,333	56,000,008	2,333,333	56,000,008			8,659,722	207,833,339
25	31-Aug-19	3,993,056	91,840,267	2,333,333	53,666,675	2,333,333	53,666,675			8,659,722	199,173,617
26	30-Nov-19	3,993,056	87,847,211	2,333,333	51,333,342	2,333,333	51,333,342			8,659,722	190,513,895
27	29-Feb-20	3,993,056	83,854,155	2,333,333	49,000,009	2,333,333	49,000,009			8,659,722	181,854,173
28	31-May-20	3,993,056	79,861,099	2,333,333	46,666,676	2,333,333	46,666,676			8,659,722	173,194,451
29	31-Aug-20	3,993,056	75,868,043	2,333,333	44,333,343	2,333,333	44,333,343			8,659,722	164,534,729
30	30-Nov-20	3,993,056	71,874,987	2,333,333	42,000,010	2,333,333	42,000,010			8,659,722	155,875,007
31	28-Feb-21	3,993,056	67,881,931	2,333,333	39,666,677	2,333,333	39,666,677			8,659,722	147,215,285

104 (104)



32	31-May-21	3,993,056	63,888,875	2,333,333	37,333,344	2,333,333	37,333,344	8,659,722	138,555,563
33	31-Aug-21	3,993,056	59,895,819	2,333,333	35,000,011	2,333,333	35,000,011	8,659,722	129,895,841
34	30-Nov-21	3,993,056	55,902,763	2,333,333	32,666,678	2,333,333	32,666,678	8,659,722	121,236,119
35	28-Feb-22	3,993,056	51,909,707	2,333,333	30,333,345	2,333,333	30,333,345	8,659,722	112,576,397
36	31-May-22	3,993,056	47,916,651	2,333,333	28,000,012	2,333,333	28,000,012	8,659,722	103,916,675
37	31-Aug-22	3,993,056	43,923,595	2,333,333	25,666,679	2,333,333	25,666,679	8,659,722	95,256,953
38	30-Nov-22	3,993,056	39,930,539	2,333,333	23,333,346	2,333,333	23,333,346	8,659,722	86,597,231
39	28-Feb-23	3,993,056	35,937,483	2,333,333	21,000,013	2,333,333	21,000,013	8,659,722	77,937,509
40	31-May-23	3,993,056	31,944,427	2,333,333	18,666,680	2,333,333	18,666,680	8,659,722	69,277,787
41	31-Aug-23	3,993,056	27,951,371	2,333,333	16,333,347	2,333,333	16,333,347	8,659,722	60,618,065
42	30-Nov-23	3,993,056	23,958,315	2,333,333	14,000,014	2,333,333	14,000,014	8,659,722	51,958,343
43	29-Feb-24	3,993,056	19,965,259	2,333,333	11,666,681	2,333,333	11,666,681	8,659,722	43,298,621
44	31-May-24	3,993,056	15,972,203	2,333,333	9,333,348	2,333,333	9,333,348	8,659,722	34,638,899
45	31-Aug-24	3,993,056	11,979,147	2,333,333	7,000,015	2,333,333	7,000,015	8,659,722	25,979,177
46	30-Nov-24	3,993,056	7,986,091	2,333,333	4,666,682	2,333,333	4,666,682	8,659,722	17,319,455
47	28-Feb-25	3,993,056	3,993,035	2,333,333	2,333,349	2,333,333	2,333,349	8,659,722	8,659,733
48	31-May-25	3,993,035	-	2,333,349	-	2,333,349	-	8,659,733	-

105 (105)



#	West Tellus Tranches	Installment	GIEK Lender Facility 191,666,667	Installment	Kexim Facility 112,000,000	Installment	K-Sure Facility 112,000,000	Installment	Commercial Facility 67,666,667	Installment	Total 483,333,333
1	30-Nov-13	3,993,056	187,673,611	2,333,333	109,666,667	2,333,333	109,666,667	1,409,722	66,256,945	10,069,444	473,263,889
2	28-Feb-14	3,993,056	183,680,555	2,333,333	107,333,334	2,333,333	107,333,334	1,409,722	64,847,223	10,069,444	463,194,445
3	31-May-14	3,993,056	179,687,499	2,333,333	105,000,001	2,333,333	105,000,001	1,409,722	63,437,501	10,069,444	453,125,001
4	31-Aug-14	3,993,056	175,694,443	2,333,333	102,666,668	2,333,333	102,666,668	1,409,722	62,027,779	10,069,444	443,055,557
5	30-Nov-14	3,993,056	171,701,387	2,333,333	100,333,335	2,333,333	100,333,335	1,409,722	60,618,057	10,069,444	432,986,113
6	28-Feb-15	3,993,056	167,708,331	2,333,333	98,000,002	2,333,333	98,000,002	1,409,722	59,208,335	10,069,444	422,916,669
7	31-May-15	3,993,056	163,715,275	2,333,333	95,666,669	2,333,333	95,666,669	1,409,722	57,798,613	10,069,444	412,847,225
8	31-Aug-15	3,993,056	159,722,219	2,333,333	93,333,336	2,333,333	93,333,336	1,409,722	56,388,891	10,069,444	402,777,781
9	30-Nov-15	3,993,056	155,729,163	2,333,333	91,000,003	2,333,333	91,000,003	1,409,722	54,979,169	10,069,444	392,708,337
10	29-Feb-16	3,993,056	151,736,107	2,333,333	88,666,670	2,333,333	88,666,670	1,409,722	53,569,447	10,069,444	382,638,893
11	31-May-16	3,993,056	147,743,051	2,333,333	86,333,337	2,333,333	86,333,337	1,409,722	52,159,725	10,069,444	372,569,449
12	31-Aug-16	3,993,056	143,749,995	2,333,333	84,000,004	2,333,333	84,000,004	1,409,722	50,750,003	10,069,444	362,500,005
13	30-Nov-16	3,993,056	139,756,939	2,333,333	81,666,671	2,333,333	81,666,671	1,409,722	49,340,281	10,069,444	352,430,561
14	28-Feb-17	3,993,056	135,763,883	2,333,333	79,333,338	2,333,333	79,333,338	1,409,722	47,930,559	10,069,444	342,361,117
15	31-May-17	3,993,056	131,770,827	2,333,333	77,000,005	2,333,333	77,000,005	1,409,722	46,520,837	10,069,444	332,291,673
16	31-Aug-17	3,993,056	127,777,771	2,333,333	74,666,672	2,333,333	74,666,672	1,409,722	45,111,115	10,069,444	322,222,229
17	30-Nov-17	3,993,056	123,784,715	2,333,333	72,333,339	2,333,333	72,333,339	1,409,722	43,701,393	10,069,444	312,152,785
18	28-Feb-18	3,993,056	119,791,659	2,333,333	70,000,006	2,333,333	70,000,006	43,701,393	-	52,361,115	259,791,671
19	31-May-18	3,993,056	115,798,603	2,333,333	67,666,673	2,333,333	67,666,673			8,659,722	251,131,949
20	31-Aug-18	3,993,056	111,805,547	2,333,333	65,333,340	2,333,333	65,333,340			8,659,722	242,472,227
21	30-Nov-18	3,993,056	107,812,491	2,333,333	63,000,007	2,333,333	63,000,007			8,659,722	233,812,505
22	28-Feb-19	3,993,056	103,819,435	2,333,333	60,666,674	2,333,333	60,666,674			8,659,722	225,152,783
23	31-May-19	3,993,056	99,826,379	2,333,333	58,333,341	2,333,333	58,333,341			8,659,722	216,493,061
24	31-Aug-19	3,993,056	95,833,323	2,333,333	56,000,008	2,333,333	56,000,008			8,659,722	207,833,339
25	30-Nov-19	3,993,056	91,840,267	2,333,333	53,666,675	2,333,333	53,666,675			8,659,722	199,173,617
26	29-Feb-20	3,993,056	87,847,211	2,333,333	51,333,342	2,333,333	51,333,342			8,659,722	190,513,895
27	31-May-20	3,993,056	83,854,155	2,333,333	49,000,009	2,333,333	49,000,009			8,659,722	181,854,173
28	31-Aug-20	3,993,056	79,861,099	2,333,333	46,666,676	2,333,333	46,666,676			8,659,722	173,194,451
29	30-Nov-20	3,993,056	75,868,043	2,333,333	44,333,343	2,333,333	44,333,343			8,659,722	164,534,729
30	28-Feb-21	3,993,056	71,874,987	2,333,333	42,000,010	2,333,333	42,000,010			8,659,722	155,875,007
31	31-May-21	3,993,056	67,881,931	2,333,333	39,666,677	2,333,333	39,666,677			8,659,722	147,215,285
32	31-Aug-21	3,993,056	63,888,875	2,333,333	37,333,344	2,333,333	37,333,344			8,659,722	138,555,563

106 (106)



33	30-Nov-21	3,993,056	59,895,819	2,333,333	35,000,011	2,333,333	35,000,011	8,659,722	129,895,841
34	28-Feb-22	3,993,056	55,902,763	2,333,333	32,666,678	2,333,333	32,666,678	8,659,722	121,236,119
35	31-May-22	3,993,056	51,909,707	2,333,333	30,333,345	2,333,333	30,333,345	8,659,722	112,576,397
36	31-Aug-22	3,993,056	47,916,651	2,333,333	28,000,012	2,333,333	28,000,012	8,659,722	103,916,675
37	30-Nov-22	3,993,056	43,923,595	2,333,333	25,666,679	2,333,333	25,666,679	8,659,722	95,256,953
38	28-Feb-23	3,993,056	39,930,539	2,333,333	23,333,346	2,333,333	23,333,346	8,659,722	86,597,231
39	31-May-23	3,993,056	35,937,483	2,333,333	21,000,013	2,333,333	21,000,013	8,659,722	77,937,509
40	31-Aug-23	3,993,056	31,944,427	2,333,333	18,666,680	2,333,333	18,666,680	8,659,722	69,277,787
41	30-Nov-23	3,993,056	27,951,371	2,333,333	16,333,347	2,333,333	16,333,347	8,659,722	60,618,065
42	29-Feb-24	3,993,056	23,958,315	2,333,333	14,000,014	2,333,333	14,000,014	8,659,722	51,958,343
43	31-May-24	3,993,056	19,965,259	2,333,333	11,666,681	2,333,333	11,666,681	8,659,722	43,298,621
44	31-Aug-24	3,993,056	15,972,203	2,333,333	9,333,348	2,333,333	9,333,348	8,659,722	34,638,899
45	30-Nov-24	3,993,056	11,979,147	2,333,333	7,000,015	2,333,333	7,000,015	8,659,722	25,979,177
46	28-Feb-25	3,993,056	7,986,091	2,333,333	4,666,682	2,333,333	4,666,682	8,659,722	17,319,455
47	31-May-25	3,993,056	3,993,035	2,333,333	2,333,349	2,333,333	2,333,349	8,659,722	8,659,733
48	21-Aug-25	3,993,035	-	2,333,349	-	2,333,349	-	8,659,733	-

107 (107)

SCHEDULE 8
CORPORATE STRUCTURE

West Vela

Swiss Branch

West Tellus

Common

IDRs

51%

49%

Common Sub.

Public

Seadrill Capricorn Holdings LLC
(MI/UK)

Seadrill Vela
Hungary Kft
(Hungary)

Seadrill Gulf Operations Vela LLC (Delaware)

Seadrill Partners LLC («MLP»)
(MI/UK)

Seadrill Tellus Ltd

Seadrill Member LLC (Marshall Islands)

Seadrill Limited (Bermuda)

SCHEDULE 9
MANDATORY COST FORMULA


1.	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


2.	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

108 (108)

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 0.01 300	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

109 (109)


(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.


9.	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 Borrower 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
LIST OF NORWEGIAN SUPPLIERS AND CONTRACTS

West Vela



Equipment	Supplier Name	Contract Value (Million)	Contract Value (USD Million)	Contract Signing Date
DEP	NOV		USD 217.6	12-Nov-10
Fiber Optic Cable	Draka Cable	NOK 0.95	USD 0.17	04-Dec-11
General service air compressor	TAMROTOR	EUR 0.17	USD 0.24	04-Jan-11
IAS/DPS	Kongsberg	NOK 29.50	USD 5.0	17-Dec-10
EPS	ABB	EUR 8.5	USD 11.3	17-Jan-11
Life boat/ Rescue boat / Davits	Norsafe A.S	NOK 7.99	USD 1.4	18-Mar-11
Helicopter Refueling System	Helifuel A.S	NOK 1.80	USD 0.3	25-Apr-11

110 (110)

West Tellus



Equipment	Supplier Name	Contract Value (Million)	Contract Value (USD Million)	Contract Signing Date
DEP	NOV		USD 225.4	28-Apr-11
Fiber Optic Cable	Draka Cable	NOK 0.95	USD 0.17
General service air compressor	TAMROTOR	EUR 0.17	USD 0.25	13-May-11
IAS/DPS	Kongsberg	NOK 29.70	USD 5.6	17-Nov-11
EPS	ABB	EUR 8.6	USD 12.5	03-Jun-11
Life boat/ Rescue boat / Davits	Norsafe A.S	NOK 7.99	USD 1.5	25-May-11
Helicopter Refueling System	Helifuel A.S	NOK 1.69	USD 0.3	25-Aug-11

111 (111)

EXHIBIT 4



ON DEMAND GUARANTEE AND INDEMNITY between Seadrill Partners LLC (as Guarantor) and ING Bank N.V. (as Agent)
	Advokatfirmaet BA-HR DAwww.bahr.no

THIS ON DEMAND GUARANTEE AND INDEMNITY is granted on 28 October 2014 by:


(1)	Seadrill Partners LLC, organisation number 962166, incorporated under the laws of the Marshall Islands (the “Guarantor”), in favour of:


(2)	ING Bank N.V., of Bijlmerplein 888, 1102 MG Amsterdam, The Netherlands, organisation number 33031431 as Agent for itself and the other Finance Parties (the “Agent”).

BACKGROUND:

(A)

Seadrill Vela Hungary Kft. (the “Principal Debtor”), Seadrill Tellus Ltd., the Agent, and certain other Obligors and Finance Parties, have entered into a USD 1,450,000,000 Senior Secured Credit Facilities Agreement originally dated 20 March 2013, as amended thereafter, latest by a Second Amendment and Restatement Agreement dated 28 October 2014, (the "Facility Agreement") a copy of which is attached hereto as Schedule 1;


(B)	pursuant to clause 19 (Security) of the Facility Agreement, it is a condition that the Guarantor provides this irrevocable and unconditional on demand guarantee and indemnity (Nw. selvskyldnerkausjon) in favour of the Finance Parties (the “Guarantee”); and


(C)	the Guarantor has agreed to provide the Guarantee.

THE UNDERSIGNED HEREBY AGREE AS FOLLOWS:

INTERPRETATION

Capitalised terms used herein shall, save as expressly defined herein, have the same meaning as ascribed thereto in the Facility Agreement.

GUARANTEE

The Guarantor irrevocably and unconditionally:

guarantees to the Agent, on behalf of itself and the other Finance Parties, as for its own debt as principal obligor and not merely as surety, the due and punctual performance by the Principal Debtor of all the Principal Debtor’s obligations in respect of the Tranches under the Facility Agreement which relate to the drillship “West Vela”, (the “Secured Obligations”);

undertakes with the Agent that whenever the Principal Debtor does not pay any amount when due under or in connection with the Secured Obligations, the Guarantor shall immediately on demand pay that amount as if it was the principal obligor; and

undertakes to indemnify the Agent immediately on demand against any cost, loss or liability suffered by the Agent or any Finance Party if any obligation guaranteed by the Guarantor is or becomes unenforceable, invalid or illegal. The amount of the cost, loss or liability shall be equal to the amount which that Agent and/or the Finance Parties would otherwise have been entitled to recover.

MAXIMUM LIABILITY

The liability of the Guarantor hereunder shall be limited to USD 497,500,000 plus interest and costs, which is the principal amount of the Tranches relating to the “West Vela” as of the date of this Guarantee with a headroom of 15%.

CONTINUING SECURITY, MULTIPLE DRAWINGS

#5170229/1 2 (2)

This Guarantee shall remain in full force and effect from the date hereof and until the date when all amounts outstanding under the Tranches relating to the “West Vela” have been irrevocably satisfied.

Multiple drawings can be made under this Guarantee subject to the maximum amount stated in Clause 3.

WAIVER OF RIGHTS AND DEFENCES

The obligations of the Principal Debtor pursuant to the Facility Agreement are and will be secured to the extent set out in the Facility Agreement. If and to the extent applicable, the provisions of (and/or principles derived from) the Norwegian Financial Contracts Act 1999 (the “FCA”) § 62 to and including § 74 shall not apply to this Guarantee.

The Guarantor may not:

require that the Agent, following the occurrence of an Event of Default which is continuing under the Facility Agreement, first make demand upon or seek to enforce remedies against the Principal Debtor in respect of the amounts outstanding under the Facility Agreement before demanding payment or seeking to enforce this Guarantee;

assert that its liability under this Guarantee has been impacted because of a failure to give notice of any kind whatsoever;

exercise any rights of subrogation into the rights of the Agent under the Facility Agreement or any security issued or made pursuant to the Facility Agreement until and unless the Agent has received all amounts due or to become due to it under the Facility Agreement;

claim reimbursement from the Principal Debtor for payments made hereunder until and unless the Agent has received all amounts due or to become due to it under the Facility Agreement and the obligations of the Agent to make further amounts available under the Facility Agreement has been irrevocably terminated; and

require that additional security be provided or maintained.

The Agent is entitled to amend, supplement, release or waive any security provided for the obligations of the Principal Debtor under the Facility Agreement or any third party relationship including (but not limited to) any rescission, waiver, amendment or modification of any term or provision thereof without the Guarantor's consent (save for any amendments to this Guarantee).

RELATION TO OTHER SECURITY

The Guarantor's obligations under this Guarantee will not be affected in any way whatsoever by the existence or non-existence of any other guarantee, indemnity, suretyship or similar instrument or by any collateral or security interest provided by a third party for the obligations of the Principal Debtor under the Facility Agreement.

DEFAULT INTEREST

If the Guarantor fails to pay any amount duly demanded hereunder, default interest shall accrue on such amount from the date of the demand and up to the date of actual payment (both before or after judgment) at a rate which is equal to the statutory default interest rate determined by the Norwegian Ministry of Finance from time to time pursuant to the Act on Default Interest (Nw: forsinkelsesrenteloven).

LIMITED RECOURSE AFTER PAYMENT

Following payment of an amount demanded hereunder, the Guarantor waives any right to assert that all or parts of such amount should be repaid to the Guarantor because of:

the Principal Debtor's winding up or dissolution or its administration, provisional liquidation or any administration having a similar effect;

#5170229/1 3 (3)

any obligation of the Principal Debtor under the Facility Agreement or any transaction relating to the Facility Agreement being or becoming void, voidable or otherwise unenforceable in accordance with its terms; or

any legal limitation, disability or incapacity of or affecting the Principal Debtor.

REPRESENTATIONS AND WARRANTIES

The Guarantor hereby represents and warrants to the Agent that:

it is a limited liability company, duly incorporated and validly existing and registered under the laws of the Marshall Islands;

it possesses the capacity to sue or be sued in its own name and is not immune from legal proceedings being initiated against it;

it has the corporate power and authority to execute and deliver this Guarantee and to carry out its terms and provisions, and that all corporate or other action required to authorise the execution and delivery of the same by it and the performance by it of its obligations hereunder has been duly taken;

this Guarantee constitutes the valid, binding and enforceable obligations of the Guarantor;

the claims of the Agent against the Guarantor under this Guarantee rank at least pari passu with the claims of all of the Guarantor's other unsubordinated unsecured creditors save those whose claims are preferred by bankruptcy, insolvency, liquidation or other similar laws of general application;

any and all amounts payable by the Guarantor under this Guarantee may be made free and clear of and without deduction for or on account of any taxes; and

no stamp or registration duty or similar taxes or charges are payable in Norway or elsewhere in respect of this Guarantee or would be payable upon enforcement of this Guarantee, apart from minor court fees.

COVENANTS

The Guarantor undertakes for the benefit of the Agent that, unless the Agent has given its prior written consent to the contrary, it will:

promptly inform the Agent about any event which may adversely affect its ability to fully perform its obligations under this Guarantee;

ensure that its obligations to the Agent will rank at least pari passu with all its other unsecured and unsubordinated obligations;

make all payments under this Guarantee free and clear of and without any deduction or withholding for or on account of any Taxes or any other governmental or public payment, unless a Tax Deduction or withholding is required by law;

if any Tax Deduction or withholding under the foregoing paragraph is required by law, increase the amount of the payment due under this Guarantee to an amount which (after making any such 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

pay to the Agent an amount equal to the loss, liability or cost which the Agent determines will be or has been (directly or indirectly) suffered for or on account of any tax by the Agent in respect of this Guarantee.

#5170229/1 4 (4)

NOTICES

Any notice or other communication hereunder shall be made in accordance with clause 32 (Notices) of the Facility Agreement. The Agent may communicate with the Guarantor through the Principal Debtor.

ASSIGNMENT

The Agent shall be entitled to assign this Guarantee without the consent of the Guarantor.

GOVERNING LAW AND JURISDICTION

This Guarantee shall be governed by and construed in accordance with Norwegian law.

The Guarantor hereby irrevocably submits to the jurisdiction of the Norwegian courts, the venue to be Oslo District Court.

The submission to the jurisdiction of the Norwegian courts shall not limit the right of the Agent to take any legal action or proceedings against the Guarantor in any court which may otherwise exercise jurisdiction over the Guarantor or any of its assets.



as Guarantor		as Agent
By: _________________________		By: _________________________
Name:		Name:
Title:		Title:
Company: Seadrill Partners LLC		Company: ING Bank N.V.