Common use of Adjustment of Exchange Rate Clause in Contracts

Adjustment of Exchange Rate. The Exchange Rate shall be adjusted from time to time by the Company as follows, except that the Company will not make any adjustments to the Exchange Rate if Holders participate, as a result of holding the Securities, in any transaction described below without having to exchange their Securities: (a) In case the Guarantor shall issue shares of its Common Stock as a dividend or distribution on its Common Stock, then the Exchange Rate in effect at the opening of business on the Ex Date for such dividend or other distribution shall be increased by multiplying such Exchange Rate by a fraction, (A) the numerator of which shall be the sum of the number of shares of Common Stock outstanding at the Close of Business on such Record Date for such dividend or other distribution plus the total number of shares of Common Stock constituting such dividend or other distribution; and (B) the denominator of which shall be the number of shares of Common Stock outstanding at the Close of Business on such Record Date. If any dividend or distribution of the type described above is declared but not so paid or made, the Exchange Rate shall again be adjusted to the Exchange Rate that would then be in effect if such dividend or distribution had not been declared. In case outstanding shares of Common Stock shall be subdivided or reclassified into a greater number of shares of Common Stock, the Exchange Rate in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be proportionately increased, and conversely, in case outstanding shares of Common Stock shall be combined or reclassified into a smaller number of shares of Common Stock, the Exchange Rate in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately reduced, such increase or reduction, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective. (b) In case the Guarantor shall issue rights or warrants to all holders of its Common Stock entitling them for a period of not more than 60 calendar days to subscribe for or purchase shares of Common Stock at a price per share less than the average of the Closing Sale Prices for the five consecutive Trading Day period ending on the Business Day immediately preceding the date of announcement of such issuance (other than a distribution of rights pursuant to any shareholder rights plan), the Exchange Rate in effect immediately prior to the Close of Business on the Record Date for the issuance shall be increased by multiplying the Exchange Rate in effect immediately prior to the Close of Business on such Record Date by a fraction of which (A) the numerator shall be the sum of (I) the number of shares of Common Stock outstanding (excluding shares held in the treasury of the Guarantor) at the Close of Business on such Record Date and (II) the aggregate number of shares (the “Underlying Shares”) of Common Stock underlying all such issued rights or warrants (whether by exercise, conversion, exchange or otherwise) and (B) the denominator shall be the sum of (I) number of shares of Common Stock outstanding (excluding shares held in the treasury of the Company) at the Close of Business on such Record Date and (II) the number of shares of Common Stock which the aggregate exercise, conversion, exchange or other price at which the Underlying Shares may be subscribed for or purchased pursuant to such rights or warrants would purchase at such Current Market Price per share (as defined in subsection (g) of this Section 4.6) of Common Stock. Such increase shall become effective immediately prior to the opening of business on the Business Day following such Record Date. In no event shall the Exchange Rate be decreased pursuant to this Section 4.6(b). In the event that such rights or warrants are not so issued, or to the extent that such rights expire or are redeemed without being exercised, the Exchange Rate shall again be adjusted to be the Exchange Rate which would then be in effect if the announcement with respect to such rights or warrants had not been made.

Adjustment of Exchange Rate. The Exchange Rate shall be adjusted from time to time by the Company as follows, except that the Company will not make any adjustments to the Exchange Rate if Holders participate, as a result of holding the Securities, in any transaction described below without having to exchange their Securities: (a) In case the Guarantor Company shall issue shares of its Common Stock as pay or make a dividend or other distribution on its any class of capital stock of the Company in Class A Common Stock, then the Exchange Rate in effect at the opening of business on the Ex Date day following the date fixed for the determination of stockholders entitled to receive such dividend or other distribution shall be increased by multiplying such Exchange Rate by a fraction, (A) fraction the numerator of which shall be the sum of the number of shares of Class A Common Stock outstanding at the Close close of Business business on the date fixed for such Record Date for determination and the total number of shares constituting such dividend or other distribution plus and the denominator of which shall be such number of shares of Class A Common Stock outstanding at the close of business on the date fixed for such determination, such increase to become effective immediately after the opening of business on the day following the date fixed for such determination. For the purposes of this subsection (a), the number of shares of Class A Common Stock at any time outstanding shall not include shares held in the treasury of the Company. (b) In case Iridium shall pay or make a dividend or other distribution on any class of Iridium Interests in Class 1 Interests, the Exchange Rate in effect at the opening of business on the day following the date fixed for the termination of Iridium members entitled to receive such dividend or other distribution shall be decreased by multiplying such Exchange Rate by a fraction the denominator of which shall be the sum of the number of Class 1 Interests outstanding at the close of business on the date fixed for such determination and the total number of shares of Common Stock Class 1 Interests constituting such dividend or other distribution; distribution and the numerator of which shall be such number o Class 1 Interests outstanding at the close of business on the date fixed for such determination, such decrease to become effective immediately after the opening of business on the day following the date fixed for such determination. For the purposes of this subsection (Bb), the number of Class 1 Interests at any time outstanding shall not include shares held in the treasury of Iridium. (c) In case the Company shall issue rights or warrants to all holders of any class of Common Stock entitling them to subscribe for, purchase or acquire shares of Class A Common Stock at a price per share less than the current market price per share (determined as provided in subsection (k) below) of the Class A Common Stock on the date fixed for the determination of stockholders entitled to receive such rights or warrants, the Exchange Rate in effect at the opening of business on the day following the date fixed for such determination shall be increased by multiplying such Exchange Rate by a fraction the numerator of which shall be the number of shares of Class A Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Class A Common Stock so offered for subscription, purchase or acquisition, and the denominator of which shall be the number of shares of Class A Common Stock outstanding at the Close close of Business business on the date fixed for such Record Datedetermination plus the number of shares of Class A Common Stock which the aggregate of the offering price of the total number of shares of Class A Common Stock so offered for subscription, purchase or acquisition would purchase at such current market price, such increase to become effective immediately after the opening of business on the day following the date fixed for such determination. If For the purposes of this subsection (c), the number of shares of Class A Common Stock at any time outstanding shall not include shares held in the treasury of the Company. The Company agrees not to pay any dividend or make any distribution on shares of Common Stock held in its treasury. (d) In case Iridium shall issue rights or warrants to all holders of Class 1 Interests entitling them to subscribe for, purchase or acquire Class 1 Interests at a price per Class 1 Interest less than the current market price per share (determined as provided in subsection (k) below) of the type described above is declared but not so paid Class A Common Stock multiplied by the Exchange Rate on the date fixed for the determination of Class 1 Interest holders entitled to receive such rights or madewarrants, the Exchange Rate in effect at the opening of business on the day following the date fixed for such determination shall again be adjusted decreased by multiplying such Exchange Rate by a fraction the denominator of which shall be the number of Class 1 Interests outstanding at the close of business on the date fixed for such determination plus the number of Class 1 Interests so offered for subscription, purchase or acquisition, and the numerator of which shall be the number of Class 1 Interests outstanding at the close of business on the date fixed for such determination plus the number of Class 1 Interests which the aggregate of the offering price of the total number of Class 1 Interests so offered for subscription, purchase of acquisition would purchase at a price per Class 1 Interest equal to the market price per Share of Class A Common Stock multiplied by the Exchange Rate that would then be Rate, such increase to become effective immediately after the opening of business on the day following the date fixed for such determination. For the purposes of this subsection (d), the number of Class 1 Interests at any time outstanding shall not include shares held in effect if such the treasury of Iridium. Iridium agrees not to pay any dividend or make any distribution had not been declared. on Class 1 Interests held in its treasury. (e) In case the outstanding shares of Class A Common Stock shall be subdivided or reclassified into a greater number of shares of Class A Common Stock, the Exchange Rate in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be proportionately increased, and and, conversely, in case the outstanding shares of Class A Common Stock shall each be combined or reclassified into a smaller number of shares of Class A Common Stock, the Exchange Rate in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately reduced, such increase reduction or reductionincrease, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective. (bf) In case the Guarantor outstanding Class 1 Interests shall issue rights or warrants to all holders be subdivided into a greater number of its Common Stock entitling them for a period of not more than 60 calendar days to subscribe for or purchase shares of Common Stock at a price per share less than the average of the Closing Sale Prices for the five consecutive Trading Day period ending on the Business Day immediately preceding the date of announcement of such issuance (other than a distribution of rights pursuant to any shareholder rights plan)Class 1 Interests, the Exchange Rate in effect immediately prior to the Close of Business on the Record Date for the issuance shall be increased by multiplying the Exchange Rate in effect immediately prior to the Close of Business on such Record Date by a fraction of which (A) the numerator shall be the sum of (I) the number of shares of Common Stock outstanding (excluding shares held in the treasury of the Guarantor) at the Close of Business on such Record Date and (II) the aggregate number of shares (the “Underlying Shares”) of Common Stock underlying all such issued rights or warrants (whether by exercise, conversion, exchange or otherwise) and (B) the denominator shall be the sum of (I) number of shares of Common Stock outstanding (excluding shares held in the treasury of the Company) at the Close of Business on such Record Date and (II) the number of shares of Common Stock which the aggregate exercise, conversion, exchange or other price at which the Underlying Shares may be subscribed for or purchased pursuant to such rights or warrants would purchase at such Current Market Price per share (as defined in subsection (g) of this Section 4.6) of Common Stock. Such increase shall become effective immediately prior to the opening of business on the Business Day day following such Record Date. the day upon which such (g) In no event shall case the Exchange Rate be decreased pursuant Company shall, by dividend or otherwise, distribute to this Section 4.6(b). In the event that such all holders of its Class A Common Stock evidences of its indebtedness or assets (including securities but excluding (A) any rights or warrants are not so issuedreferred to in subsection (c) above, (B) any dividend or distribution referred to the extent that such rights expire in subsection (a) above, and (C) any dividend or are redeemed without being exerciseddistribution paid in cash out of current or accumulated earnings), then in each case, the Exchange Rate in effect at the opening of business on the day following the date fixed for the determination of holders of Class A Common Stock entitled to receive such distribution shall again be adjusted by multiplying such Exchange Rate by a fraction of which the numerator shall be the current market price per share (determined as provided in subsection (k) below) of the Class A Common Stock on such date of determination (or, if earlier, on the date on which the Class A Common Stock goes "ex-dividend" in respect of such distribution) less the then Fair Market Value as determined by the Company Board (whose determination shall be conclusive) of the portion of the assets or evidences of indebtedness so distributed (and for which an adjustment to be the Exchange Rate which would then has not previously been made pursuant to the terms of this Article V) applicable to one share of Class A Common Stock, and the denominator shall be in effect if such current market price per share of the announcement with respect Class A Common Stock, such adjustment to become effective immediately after the opening of business on the day following such date of determination. (h) In case Iridium shall, by dividend or otherwise, distribute to all holders of its Class 1 Interests evidence of its indebtedness or assets (including securities but excluding (A) any rights or warrants had not been made.referred to in subsection (d) above, (B) any dividend of distribution referred to in subsection (b) above, and (C) any dividend or distribution paid in cash out of current or accumulated earnings), then in each case, the Exchange Rate in effect at the opening of business on the day following the date fixed for the determination of holders of Class 1 Interests entitled to receive such distribution shall be adjusted by multiplying such Exchange Rate by a fraction of which the

Adjustment of Exchange Rate. The Exchange Rate shall be adjusted from time to time by the Company as follows, except that the Company will not make any adjustments to the Exchange Rate if Holders participate, as a result of holding the Securities, in any transaction described below without having to exchange their Securities: (a) In case the Guarantor Company shall issue shares of its Common Stock as pay or make a dividend or other distribution on its any class of capital stock of the Company in Class A Common Stock, then the Exchange Rate in effect at the opening of business on the Ex Date day following the date fixed for the determination of stockholders entitled to receive such dividend or other distribution shall be increased by multiplying such Exchange Rate by a fraction, (A) fraction the numerator of which shall be the sum of the number of shares of Class A Common Stock outstanding at the Close close of Business business on the date fixed for such Record Date for determination and the total number of shares constituting such dividend or other distribution plus and the denominator of which shall be such (b) In case Iridium shall pay or make a dividend or other distribution on any class of Iridium Interests in Class 1 Interests, the Exchange Rate in effect at the opening of business on the day following the date fixed for the termination of Iridium members entitled to receive such dividend or other distribution shall be decreased by multiplying such Exchange Rate by a fraction the denominator of which shall be the sum of the number of Class 1 Interests outstanding at the close of business on the date fixed for such determination and the total number of shares of Common Stock Class 1 Interests constituting such dividend or other distribution; distribution and the numerator of which shall be such number o Class 1 Interests outstanding at the close of business on the date fixed for such determination, such decrease to become effective immediately after the opening of business on the day following the date fixed for such determination. For the purposes of this subsection (Bb), the number of Class 1 Interests at any time outstanding shall not include shares held in the treasury of Iridium. (c) In case the Company shall issue rights or warrants to all holders of any class of Common Stock entitling them to subscribe for, purchase or acquire shares of Class A Common Stock at a price per share less than the current market price per share (determined as provided in subsection (k) below) of the Class A Common Stock on the date fixed for the determination of stockholders entitled to receive such rights or warrants, the Exchange Rate in effect at the opening of business on the day following the date fixed for such determination shall be increased by multiplying such Exchange Rate by a fraction the numerator of which shall be the number of shares of Class A Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Class A Common Stock so offered for subscription, purchase or acquisition, and the denominator of which shall be the number of shares of Class A Common Stock outstanding at the Close close of Business business on the date fixed for such Record Date. If any dividend or distribution determination plus the number of shares of Class A Common Stock which the aggregate of the type described above is declared but not offering price of the total number of shares of Class A Common Stock so paid offered for subscription, purchase or madeacquisition would purchase at such current (d) In case Iridium shall issue rights or warrants to all holders of Class 1 Interests entitling them to subscribe for, purchase or acquire Class 1 Interests at a price per Class 1 Interest less than the current market price per share (determined as provided in subsection (k) below) of the Class A Common Stock multiplied by the Exchange Rate on the date fixed for the determination of Class 1 Interest holders entitled to receive such rights or warrants, the Exchange Rate in effect at the opening of business on the day following the date fixed for such determination shall again be adjusted decreased by multiplying such Exchange Rate by a fraction the denominator of which shall be the number of Class 1 Interests outstanding at the close of business on the date fixed for such determination plus the number of Class 1 Interests so offered for subscription, purchase or acquisition, and the numerator of which shall be the number of Class 1 Interests outstanding at the close of business on the date fixed for such determination plus the number of Class 1 Interests which the aggregate of the offering price of the total number of Class 1 Interests so offered for subscription, purchase of acquisition would purchase at a price per Class 1 Interest equal to the market price per Share of Class A Common Stock multiplied by the Exchange Rate that would then be Rate, such increase to become effective immediately after the opening of business on the day following the date fixed for such determination. For the purposes of this subsection (d), the number of Class 1 Interests at any time outstanding shall not include shares held in effect if such the treasury of Iridium. Iridium agrees not to pay any dividend or make any distribution had not been declared. on Class 1 Interests held in its treasury. (e) In case the outstanding shares of Class A Common Stock shall be subdivided or reclassified into a greater number of shares of Class A Common Stock, the Exchange Rate in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be proportionately increased, and and, conversely, in case the outstanding shares of Class A Common Stock shall each be combined or reclassified into a smaller number of shares of Class A Common Stock, the Exchange Rate in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately (f) In case the outstanding Class 1 Interests shall be subdivided into a greater number of Class 1 Interests, the Exchange Rate in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be proportionately reduceddecreased, and, conversely, in case the outstanding Class 1 Interests shall each be combined into a smaller number of Class 1 Interests, the Exchange Rate in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately increased, such increase or reduction, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective. (bg) In case the Guarantor shall issue rights Company shall, by dividend or warrants otherwise, distribute to all holders of its Class A Common Stock entitling them for a period evidences of not more than 60 calendar days its indebtedness or assets (including securities but excluding (A) any rights or warrants referred to subscribe for in subsection (c) above, (B) any dividend or purchase shares distribution referred to in subsection (a) above, and (C) any dividend or distribution paid in cash out of Common Stock at a price per share less than the average of the Closing Sale Prices for the five consecutive Trading Day period ending on the Business Day immediately preceding the date of announcement of such issuance (other than a distribution of rights pursuant to any shareholder rights plancurrent or accumulated earnings), then in each case, the Exchange Rate in effect immediately prior to the Close of Business on the Record Date for the issuance shall be increased by multiplying the Exchange Rate in effect immediately prior to the Close of Business on such Record Date by a fraction of which (A) the numerator shall be the sum of (I) the number of shares of Common Stock outstanding (excluding shares held in the treasury of the Guarantor) at the Close of Business on such Record Date and (II) the aggregate number of shares (the “Underlying Shares”) of Common Stock underlying all such issued rights or warrants (whether by exercise, conversion, exchange or otherwise) and (B) the denominator shall be the sum of (I) number of shares of Common Stock outstanding (excluding shares held in the treasury of the Company) at the Close of Business on such Record Date and (II) the number of shares of Common Stock which the aggregate exercise, conversion, exchange or other price at which the Underlying Shares may be subscribed for or purchased pursuant to such rights or warrants would purchase at such Current Market Price per share (as defined in subsection (g) of this Section 4.6) of Common Stock. Such increase shall become effective immediately prior to the opening of business on the Business Day day following the date fixed for the determination of holders of Class A Common Stock entitled to receive such Record Date. In no event distribution shall be adjusted by multiplying such Exchange Rate by a fraction of which the numerator shall be the current market price per share (determined as provided in subsection (k) below) of the Class A Common Stock on such date of determination (or, if earlier, on the date on which the Class A Common Stock goes "ex-dividend" in respect of such distribution) less the then Fair Market Value as determined by the Company Board (whose determination shall be conclusive) of the portion of the assets or evidences of indebtedness so distributed (and for which an adjustment to the Exchange Rate be decreased has not previously been made pursuant to the terms of this Section 4.6(bArticle V) applicable to one share of Class A Common Stock, and the denominator shall be such current market price per share of the Class A Common Stock, such adjustment to become effective immediately after the opening of business on the day following such date of determination. (h) In case Iridium shall, by dividend or otherwise, distribute to all holders of its Class 1 Interests evidence of its indebtedness or assets (including (i) The reclassification or change of Class A Common Stock into securities including securities other than Class A Common Stock (other than any reclassification upon a consolidation or merger to which subsection (n) below applies) shall be deemed to involve (A) a distribution of such securities other than Class A Common Stock to all holders of Class A Common Stock (and the effective date of such reclassification shall be deemed to be "the date fixed for the determination of holders of Class A Common Stock entitled to receive such distribution" within the meaning of subsection (g) above). In , and (B) a subdivision or combination, as the event that case may be, of the number of shares of Class A Common Stock outstanding immediately prior to such rights reclassification into the number of shares of Class A Common Stock outstanding immediately thereafter (and the effective date of such reclassification shall be deemed to be "the day upon which such subdivision becomes effective" or warrants are "the day upon which such combination becomes effective," as the case may be, and "the day upon which such subdivision or combination becomes effective" within the meaning of subsection (e) above). (j) The reclassification or change of Class 1 Interests into interests or securities including Iridium Interests other than Class 1 Interests shall be deemed to (k) For the purpose of any computation under subsection (c), (d), (g) or (h) above, the current market price per share of Class A Common Stock on any day shall be deemed to be the average of the Closing Prices of the Class A Common Stock for the 20 consecutive Trading Days selected by the Company Board commencing no more than 30 Trading Days before and ending no later than the second Trading Day before the day in question; provided, that, in the case of subsection (3), if the period between the date of the public announcement of the dividend or distribution and the date for the determination of holders of Class A Common Stock entitled to receive such dividend or distribution (or, if earlier, the date on which the Common Stock goes "ex-dividend" in respect of such dividend or distribution) shall be less than 20 Trading Days, the period shall be such lesser number of Trading Days but, in any event, not so issued, or to the extent that such rights expire or are redeemed without being exercised, less than five Trading Days. (l) No adjustment in the Exchange Rate shall again be required unless such adjustment would require an increase or decrease of at least 1% in such rate; provided, however, that any adjustments which by reason of this clause (l) are not required to be made shall be carried forward and taken into account in any subsequent adjustment and provided, further, that adjustments shall be required and made in accordance with the provisions of this Article V (other than this clause (l)) not later than such time as may be required in order to preserve the tax free nature of a distribution to the holders of shares of Common Stock. Anything in this clause (l) to the contrary notwithstanding, the Company shall be entitled, at its option, to make such increases in the Exchange Rate, in addition to those required by this Article V, as it in its discretion shall determine to be advisable in order that any stock dividend, subdivision or (m) Iridium shall notify the Company of any event requiring an adjustment in the Exchange Rate pursuant to subsection (b), (d), (f), (h) or (j), and whenever the Exchange Rate is adjusted as herein provided, the Company shall notify Iridium which notice shall include the Exchange Rate after such adjustment and shall set forth a brief statement of the facts requiring such adjustment and the manner of computing the same. (n) In case of any consolidation of the Company with, or merger of the Company into, any other entity, any merger of another entity into the Company (other than a merger which does not result in any reclassification, conversion, exchange or cancellation of outstanding shares of Class A Common Stock) or any sale or transfer of all or substantially all of the assets of the Company, Iridium shall have the right thereafter to exchange Class 1 Membership only into the kind and amount of securities, cash and other property receivable upon such consolidation, merger, sale or transfer by a holder of the number of shares of Class A Common Stock into which such Class 1 Interests might have been exchanged immediately prior to such consolidation, merger, sale or transfer, assuming such holder of Class A Common Stock is not the entity with which the Company consolidated or into which the Company merged or which merged into the Company or to which such sale or transfer was made, as the case may be (a "constituent person"), or an affiliate of a constituent person and failed to exercise its rights of election, if any, as to the kind or amount of securities, cash or other property receivable upon such consolidation, merger, sale or transfer (provided that if the kind or amount of securities, cash and other property receivable upon such consolidation, merger, sale or transfer is not the same for each share of Class A Common Stock held immediately prior to such consolidation, merger, sale or transfer by others than a constituent entity or an affiliate thereof and in respect of which such rights of election shall not have been exercised ("non-electing share"), then for the purpose of this subsection (n) the kind and amount of securities, cash and other property receivable upon such consolidation, merger, sale or transfer by each non-electing share shall be deemed to be the Exchange Rate which would then be in effect if the announcement with respect to such rights or warrants had not been made.kind

Adjustment of Exchange Rate. The Exchange Rate shall be adjusted subject to adjustments from time to time by the Company as follows, except that the Company will not make any adjustments to the Exchange Rate if Holders participate, as a result of holding the Securities, in any transaction described below without having to exchange their Securities: (a1) In case the Guarantor Diamond Offshore shall issue shares of its Common Stock as pay or make a dividend or other distribution on its Diamond Offshore Common Stock exclusively in Diamond Offshore Common Stock or shall pay or make a dividend or other distribution on any other class of capital stock of Diamond Offshore which dividend or distribution includes Diamond Offshore Common Stock, then the Exchange Rate in effect at the opening of business on the Ex day next following the Determination Date for of such dividend or other distribution shall be increased by multiplying dividing such Exchange Rate by a fraction, (A) fraction of which the numerator of which shall be the sum of the number of shares of Common Stock outstanding at the Close of Business on such Record Date for such dividend or other distribution plus the total number of shares of Common Stock constituting such dividend or other distribution; and (B) the denominator of which shall be the number of shares of Diamond Offshore Common Stock outstanding at the Close close of Business business on such Record Determination Date and the denominator shall be the sum of such number of shares and the total number of shares constituting such dividend or other distribution, such increase to become effective immediately after the opening of business on the day next following such Determination Date. If For the purposes of this paragraph (1), the number of shares of Diamond Offshore Common Stock at any time outstanding shall not include shares held in the treasury of Diamond Offshore but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Diamond Offshore Common Stock. (2) Subject to the last sentence of paragraph (8) of this Section, in case Diamond Offshore shall pay or make a dividend or other distribution on Diamond Offshore Common Stock consisting exclusively of, or shall otherwise issue to all holders of Diamond Offshore Common Stock, rights, warrants or options entitling the holders thereof to subscribe for or purchase shares of Diamond Offshore Common Stock at a price per share less than the current market price per share (determined as provided in paragraph (7) of this Section 4.4) of the type described above is declared but not so paid or madeDiamond Offshore Common Stock on the Determination Date, the Exchange Rate in effect at the opening of business on the day following such Determination Date shall again be adjusted to the increased by dividing such Exchange Rate that by a fraction of which the numerator shall be the number of shares of Diamond Offshore Common Stock outstanding at the close of business on such Determination Date plus the number of shares of Diamond Offshore Common Stock which the aggregate of the offering price of the total number of shares of Diamond Offshore Common Stock so offered for subscription or purchase would then purchase at such current market price and the denominator shall be the number of shares of Diamond Offshore Common Stock outstanding at the close of business on such Determination Date plus the number of shares of Diamond Offshore Common Stock so offered for subscription or purchase, such increase to become effective immediately after the opening of business on the day following such Determination Date. For the purposes of this paragraph (2), the number of shares of Diamond Offshore Common Stock at any time outstanding shall not include shares held in effect if such dividend or distribution had not been declared. the treasury of Diamond Offshore but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Diamond Offshore Common Stock. (3) In case outstanding shares of Diamond Offshore Common Stock shall be subdivided or reclassified into a greater number of shares of Diamond Offshore Common Stock, the Exchange Rate in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be proportionately increased, and and, conversely, in case outstanding shares of Diamond Offshore Common Stock shall each be combined or reclassified into a smaller number of shares of Diamond Offshore Common Stock, the Exchange Rate in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately reduced, such increase or reduction, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective. (b4) In Subject to the last sentence of this paragraph (4) and to the last sentence of paragraph (8) of this Section 4.4, in case the Guarantor shall issue rights Diamond Offshore shall, by dividend or warrants otherwise, distribute to all holders of its Diamond Offshore Common Stock entitling them for a period evidences of not more than 60 calendar days to subscribe for or purchase its indebtedness, shares of Common Stock at a price per share less than the average any class of the Closing Sale Prices for the five consecutive Trading Day period ending on the Business Day immediately preceding the date capital stock, securities, cash or property (excluding any rights, warrants or options referred to in paragraph (2) of announcement this Section 4.4, any dividend or distribution paid exclusively in cash and any dividend or distribution referred to in paragraph (1) of such issuance (other than a distribution of rights pursuant to any shareholder rights planthis Section 4.4), the Exchange Rate shall be increased so that the same shall equal the rate determined by dividing the Exchange Rate in effect immediately prior to the Close close of Business business on the Record Determination Date for such distribution contemplated by this paragraph (4) by a fraction of which the issuance numerator shall be increased the current market price per share (determined as provided in paragraph (7) of this Section 4.4) of the Diamond Offshore Common Stock on the date of such Determination Date less the fair market value (as determined in good faith by multiplying the Board of Directors, whose determination shall be conclusive and described in a Board Resolution and shall, in the case of securities being distributed for which prior thereto there is an actual or when-issued trading market, be no less than the value determined by reference to the average of the closing prices in such market used in computing the current market price per share pursuant to Section 4.4(7)), on such Determination Date, of the portion of the evidences of indebtedness, shares of capital stock, securities, cash and property so distributed applicable to one share of Diamond Offshore Common Stock and the denominator shall be such current market price per share of the Diamond Offshore Common Stock, such increase to become (5) In case Diamond Offshore shall, by dividend or otherwise, make a Cash Distribution in an aggregate amount that, combined together with (i) the aggregate amount of any other Cash Distributions made within the 12 months preceding the date of payment of such distribution in respect of which no adjustment pursuant to this paragraph (5) has been made and (ii) any Excess Purchase Payment made within the 12 months preceding the date of such distribution and in respect of which no adjustment has been made pursuant to paragraph (6) of this Section 4.4, exceeds 12.5% of Diamond Offshore's Common Stock Market Capitalization on the Determination Date for such Cash Distribution, then, and in each such case, immediately after the close of business on the Determination Date for such Cash Distribution, the Exchange Rate shall be adjusted so that the same shall equal the rate determined by dividing the Exchange Rate in effect immediately prior to the Close close of Business business on such Record Determination Date by a fraction of which (Aa) the numerator of which shall be equal to the sum current market price per share (determined as provided in paragraph (7) of this Section) of the Diamond Offshore Common Stock on such Determination Date less an amount equal to the quotient of (I1) the amount of such excess (over 12.5% of Diamond Offshore's Common Stock Market Capitalization as described above) divided by (2) the number of shares of Diamond Offshore Common Stock outstanding (excluding shares held in the treasury of the Guarantor) at the Close of Business on such Record Determination Date and (IIb) the aggregate number denominator of shares which shall be equal to the current market price per share (the “Underlying Shares”determined as provided in paragraph (7) of this Section 4.4) of the Diamond Offshore Common Stock underlying all on such issued rights Determination Date. (6) In case Diamond Offshore or warrants any subsidiary of Diamond Offshore shall make (whether by exercise7) For the purpose of any computation under this paragraph and paragraphs (2), conversion, exchange or otherwise(4) and (B5) of this Section 4.4, the denominator current market price per share of Diamond Offshore Common Stock on any date in question shall be deemed to be the sum average of the daily Closing Prices for the 5 consecutive Trading Days selected by the Company commencing not more than 20 Trading Days before, and ending not later than, the date in question; provided, however, that (Ii) number if the "ex" date (as hereinafter defined) for any event (other than the issuance or distribution requiring such computation) that requires an adjustment to the Exchange Rate pursuant to paragraph (1), (2), (3), (4), (5) or (6) above ("Other Event") occurs on or after the 20th Trading Day prior to the date in question and prior to the "ex" date for the issuance or distribution requiring such computation (the "Current Event"), the Closing Price for each Trading Day prior to the "ex" date for such Other Event shall be adjusted by dividing such Closing Price by the same fraction by which the Exchange Rate is so required to be adjusted as a result of shares such Other Event, (ii) if the "ex" date for any Other Event occurs after the "ex" date for the Current Event and on or prior to the date in question, the Closing Price for each Trading Day on and after the "ex" date for such Other Event shall be adjusted by dividing such Closing Price by the reciprocal of the fraction by which the Exchange Rate is so required to be adjusted as a result of such Other Event, (iii) if the "ex" date for any Other Event occurs on the "ex" date for the Current Event, one of those events shall be deemed for purposes of clauses (i) and (ii) of this proviso to have an "ex" date occurring prior to the "ex" date for the other event, and (iv) if the "ex" date for the (8) The reclassification of Diamond Offshore Common Stock outstanding into securities other than Diamond Offshore Common Stock (excluding shares held in the treasury other than any reclassification upon a consolidation or merger to which Section 4.11 of the CompanySupplemental Indenture applies) at shall be deemed to involve (a) a distribution of such securities other than Diamond Offshore Common Stock to all holders of Diamond Offshore Common Stock (and the Close effective date of Business on such Record Date reclassification shall be deemed to be the Determination Date), and (IIb) a subdivision or combination, as the case may be, of the number of shares of Diamond Offshore Common Stock which the aggregate exercise, conversion, exchange or other price at which the Underlying Shares may be subscribed for or purchased pursuant outstanding immediately prior to such rights reclassification into the number of shares of Diamond Offshore Common Stock outstanding immediately thereafter (and the effective date of such reclassification shall be deemed to be "the day upon which such subdivision becomes effective" or warrants would purchase at "the day upon which such Current Market Price per share combination becomes effective", as the case may be, and "the day upon which such subdivision or combination becomes effective" within the meaning of paragraph (as defined in subsection (g3) of this Section 4.6) 4.4). Rights or warrants issued by Diamond Offshore to all holders of Diamond Offshore Common Stock entitling the holders thereof to subscribe for or purchase shares of Diamond Offshore Common Stock. Such increase shall become effective immediately prior to the opening of business on the Business Day following such Record Date. In no event shall the Exchange Rate be decreased pursuant to this Section 4.6(b). In the event that such , which rights or warrants (i) are deemed to be transferred with such shares of Diamond Offshore Common Stock, (ii) are not so issuedexercisable and (iii) are also issued in respect of future issuances of Diamond Offshore Common Stock, in each case in clauses (i) through (iii) until the occurrence of a specified event or events ("Trigger Event"), shall for purposes of this Section 4.4 not be deemed issued until the occurrence of the earliest Trigger Event. (9) Diamond Offshore may make such increases in the Exchange Rate, in addition to those required by paragraphs (1), (2), (3), (4), (5) and (6) of this Section, as it considers to be advisable in order that any event treated for Federal income tax purposes as a dividend of stock or stock rights shall not be taxable to the extent that such rights expire or are redeemed without being exercised, recipients. (10) No adjustment in the Exchange Rate shall again be adjusted required unless such adjustment would require an increase or decrease of at least 1% in the Exchange Rate; provided, however, that any adjustments which by reason of this paragraph (10) are not required to be the Exchange Rate which would then made shall be carried forward and taken into account in effect if the announcement with respect to such rights or warrants had not been madeany subsequent adjustment.

Adjustment of Exchange Rate. (a) The Exchange Rate shall will be adjusted from time subject to time by adjustment as described below to the Company as follows, except extent that any of the Company will not make any events requiring such adjustment occur during the period commencing on the date of this Indenture and ending on the second Business Day prior to Maturity. No adjustments to the Exchange Rate if Holders participate, as a result of holding the Securities, in any transaction described below without having to exchange their Securities:will be made other than those specified below. (ai) In case If the Guarantor shall issue shares of its Common Stock as is subject to a dividend stock split or distribution on its Common Stockreverse stock split, then the Exchange Rate in effect at the opening of business on the Ex Date for first day on which the Common Stock trades without the right to receive the Common Stock resulting from such dividend stock split or other distribution shall reverse stock split dividend, the Exchange Rate will be increased adjusted by multiplying such Exchange Rate by a fraction, (A) the numerator of which shall be the sum of the number of shares of Common Stock outstanding at the Close of Business on such Record Date for such dividend or other distribution plus the total number of shares of Common Stock constituting such dividend or other distribution; and (B) the denominator of which shall will be the number of shares of Common Stock outstanding at the Close close of Business business on the record date for holders of Common Stock entitled to such Record Date. If any dividend split plus or distribution minus the number of shares resulting from such stock split or reverse stock split and the type described above is declared but not so paid or made, denominator will be the Exchange Rate shall again be adjusted to the Exchange Rate that would then be in effect if such dividend or distribution had not been declared. In case outstanding number of shares of Common Stock shall be subdivided or reclassified into outstanding at the close of business on such record date. (ii) If the Common Stock is subject to a greater number stock dividend that is given ratably to all holders of shares of Common Stock, the Exchange Rate in effect then at the opening of business on the first day following on which the day upon which such subdivision becomes effective shall be proportionately increased, and conversely, in case outstanding shares of Common Stock shall trades without the right to receive such dividend (the "ex-dividend date"), the Exchange Rate will be combined or reclassified into adjusted by multiplying such Exchange Rate by a smaller fraction, the numerator of which will be the number of shares of Common Stock, the Exchange Rate in effect Stock outstanding at the opening of business on such ex-dividend date plus the day following number of shares constituting such stock dividend and the day upon which such combination becomes effective shall denominator will be proportionately reduced, such increase or reduction, as the case may be, to become effective immediately after number of shares of Common Stock outstanding at the opening of business on the day following the day upon which such subdivision or combination becomes effectiveex-dividend date. (biii) In case the Guarantor shall issue If Time Warner issues rights or warrants to all holders of its Common Stock entitling them for a period of not more than 60 calendar days to subscribe for or purchase shares of Common Stock (other than rights to purchase shares of Common Stock pursuant to a plan for the reinvestment of dividends or interests) at a an exercise price per share less than the average Closing Price of the Closing Sale Prices for the five consecutive Trading Day period ending Common Stock on the record date for determining the holders of Common Stock entitled to receive such rights and warrants and the expiration date of such rights or warrants precedes the second Business Day immediately preceding the date of announcement of such issuance (other than a distribution of rights pursuant prior to any shareholder rights plan), Maturity; then the Exchange Rate in effect immediately prior to the Close of Business on the Record Date for the issuance shall will be increased adjusted by multiplying the such Exchange Rate in effect immediately prior to the Close of Business on such Record Date by a fraction fraction, the numerator of which (A) the numerator shall will be the sum of (I) the number of shares of Common Stock outstanding (excluding shares held in the treasury of the Guarantor) at the Close close of Business business on such Record Date and (II) record date, plus the aggregate number of additional shares (the “Underlying Shares”) of Common Stock underlying all offered for subscription or purchase pursuant to such issued rights or warrants (whether by exercise, conversion, exchange or otherwise) and (B) the denominator shall of which will be the sum of (I) number of shares of Common Stock outstanding (excluding shares held in the treasury of the Company) at the Close close of Business business on such Record Date and (II) record date, plus the number of additional shares of Common Stock which the aggregate exercise, conversion, exchange offering price of the total number of shares of Common Stock so offered for subscription or other price at which the Underlying Shares may be subscribed for or purchased purchase pursuant to such rights or warrants would purchase at the Closing Price of the Common Stock on such Current Market Price per share (as defined in subsection (g) record date, which will be determined by multiplying such total number of this Section 4.6) shares offered by the exercise price of Common Stock. Such increase shall become effective immediately prior to the opening of business on the Business Day following such Record Date. In no event shall the Exchange Rate be decreased pursuant to this Section 4.6(b). In the event that such rights or warrants are not and dividing the product so issued, or to obtained by such Closing Price. To the extent that shares of Common Stock are not delivered after the expiration of such rights expire or are redeemed without being exercisedwarrants, the Exchange Rate shall again be adjusted readjusted to be the Exchange Rate which would then be in effect had such adjustments for the issuance of such rights or warrants been made upon the basis of delivery of only the number of shares of Common Stock actually delivered. (iv) There will be no adjustments to the Exchange Rate to reflect cash dividends or other distributions paid with respect to Common Stock other than Extraordinary Dividends. A dividend or other distribution with respect to Common Stock will be deemed to be an "Extraordinary Dividend" (i) if such dividend or other distribution is of securities ("Spin-Off Securities") of an issuer other than Time Warner (a "Spin-Off") or (ii) if such dividend or other distribution exceeds the announcement immediately preceding non-Extraordinary Dividend for Common Stock by an amount equal to at least 10% of the Closing Price of Common Stock on the first Business Day immediately preceding the date on which Common Stock trades without the right to receive such Extraordinary Dividend (the "ex- dividend date"). If an Extraordinary Dividend occurs with respect to Common Stock, the Exchange Rate will be adjusted at the opening of business on the ex-dividend date by multiplying such Exchange Rate by a fraction, the numerator of which will be the Closing Price of Common Stock on the Business Day immediately preceding such ex-dividend date and the denominator will be the difference between such Closing Price and the Extraordinary Dividend Amount. The "Extraordinary Dividend Amount" with respect to an Extraordinary Dividend for Common Stock will equal (i) in the case of cash dividends or other distributions that constitute quarterly dividends, the amount per share of such Extraordinary Dividends minus the amount per share of the immediately preceding non-Extraordinary Dividend for Common Stock or (ii) in the case of cash dividends or other distributions that do not constitute quarterly dividends, the amount per share of such Extraordinary Dividend. To the extent an Extraordinary Dividend is not paid in cash, the value of the non- cash component will be determined by the Board of Directors of the Company, whose determination will be conclusive and described in a Board Resolution. Notwithstanding the foregoing, in the case of a Spin-Off, the Company may, at its option, in lieu of adjusting the Exchange Rate as described in the immediately preceding paragraph, adjust the Exchange Rate used to determine the amount payable upon exchange at Maturity for each Security to provide that each holder of Securities will receive at Maturity, in addition to the amount of Common Stock deliverable (or cash in lieu thereof), an amount of Spin-Off Securities equal to the product of the Exchange Rate (as otherwise in effect at Maturity) and the amount of Spin-Off Securities issued per share of Common Stock in the Spin-Off, so that the Maturity Price will take into account both the value of the Spin-Off Securities and the value of the Common Stock delivered upon exchange of the Securities (the "Delivery of Spin-Off Securities Option"); provided, however, that the Company may, at its option, in lieu of delivering an amount of Spin-Off Securities to the holders of the Securities at Maturity, deliver cash in an amount equal to the value of such amount of Spin- Off Securities. In order for the Company to exercise the Delivery of Spin-Off Securities Option, the Company must issue a press release through the PR Newswire prior to the opening of business on the ex-dividend date with respect to such rights Spin-Off that it elects to deliver Spin-Off Securities in lieu of adjusting the Exchange Rate as described in the immediately preceding paragraph. For purposes of delivering cash in lieu of delivering Spin-Off Securities at Maturity, or, if the Company elects to deliver Spin-Off Securities at Maturity, for purposes of valuing the Spin-Off Securities delivered at Maturity, the value of the Spin-Off Securities would be an amount equal to the average of the Volume Weighted Average Prices per share or warrants had security of such Spin-Off Securities for the 20 Trading Days ending two Business Days prior to Maturity. (v) In the event of (A) any consolidation or merger of Time Warner, or any surviving entity or subsequent surviving entity of Time Warner (a "Time Warner Successor"), with or into another entity (other than a merger or consolidation in which Time Warner is the continuing corporation and in which the Common Stock outstanding immediately prior to the merger or consolidation is not been made.exchanged for cash, securities or other property of Time Warner or another entity), (B) any sale, transfer, lease or conveyance to another Person of the property of Time Warner or any Time Warner Successor as an entirety or substantially as an entirety, (C) any statutory exchange of securities of Time Warner or any Time Warner Successor with another Person (other than in connection with a merger or acquisition) or (D) any liquidation, dissolution or winding up of Time Warner or any Time Warner Successor (any such event described in

Adjustment of Exchange Rate. The Exchange Rate shall be adjusted from time to time by the Company as follows, except that the Company will not make any adjustments to the Exchange Rate if Holders of the Security participate, as a result of holding the Securities, in any transaction described below without having to exchange their Securities: (a) In case the Guarantor shall issue shares of its Common Stock as a dividend or distribution on its Common Stock, Stock then the Exchange Rate in effect at the opening of business on the Ex Date for such dividend or other distribution shall be increased by multiplying such Exchange Rate by a fraction, (A) the numerator of which shall be the sum of the number of shares of Common Stock outstanding at the Close of Business on such Record Date for such dividend or other distribution plus the total number of shares of Common Stock constituting such dividend or other distribution; and (B) the denominator of which shall be the number of shares of Common Stock outstanding at the Close of Business on such Record Date. If any dividend or distribution of the type described above is declared but not so paid or made, the Exchange Rate shall again be adjusted to the Exchange Rate that would then be in effect if such dividend or distribution had not been declared. In case outstanding shares of Common Stock shall be subdivided or reclassified into a greater number of shares of Common Stock, the Exchange Rate in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be proportionately increased, and conversely, in case outstanding shares of Common Stock shall be combined or reclassified into a smaller number of shares of Common Stock, the Exchange Rate in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately reduced, such increase or reduction, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective. (b) In case the Guarantor shall issue rights or warrants to all holders of its Common Stock entitling them for a period of not more than 60 calendar days to subscribe for or purchase shares of Common Stock at a price per share less than the average of the Closing Sale Prices for the five consecutive Trading Day period ending on the Business Day immediately preceding the date of announcement of such issuance (other than a distribution of rights pursuant to any shareholder rights plan), the Exchange Rate in effect immediately prior to the Close of Business on the Record Date for the issuance shall be increased by multiplying the Exchange Rate in effect immediately prior to the Close of Business on such Record Date by a fraction of which (A) the numerator shall be the sum of (I) the number of shares of Common Stock outstanding (excluding shares held in the treasury of the Guarantor) at the Close of Business on such Record Date and (II) the aggregate number of shares (the “Underlying Shares”) of Common Stock underlying all such issued rights or warrants (whether by exercise, conversion, exchange or otherwise) and (B) the denominator shall be the sum of (I) number of shares of Common Stock outstanding (excluding shares held in the treasury of the Company) at the Close of Business on such Record Date and (II) the number of shares of Common Stock which the aggregate exercise, conversion, exchange or other price at which the Underlying Shares may be subscribed for or purchased pursuant to such rights or warrants would purchase at such Current Market Price per share (as defined in subsection (gf) of this Section 4.6) of Common Stock. Such increase shall become effective immediately prior to the opening of business on the Business Day following such Record Date. In no event shall the Exchange Rate be decreased pursuant to this Section 4.6(b). In the event that such rights or warrants are not so issued, or to the extent that such rights expire or are redeemed without being exercised, the Exchange Rate shall again be adjusted to be the Exchange Rate which would then be in effect if the announcement with respect to such rights or warrants had not been made.

Adjustment of Exchange Rate. The Exchange Rate shall be adjusted subject to adjustments from time to time by the Company as follows, except that the Company will not make any adjustments to the Exchange Rate if Holders participate, as a result of holding the Securities, in any transaction described below without having to exchange their Securities: (a1) In case the Guarantor Diamond Offshore shall issue shares of its Common Stock as pay or make a dividend or other distribution on its any class of capital stock of Diamond Offshore payable in shares of Diamond Offshore Common Stock, then the Exchange Rate in effect at the opening of business on the Ex day following the Determination Date for such dividend or other distribution shall be increased by multiplying dividing such Exchange Rate by a fraction, (A) fraction of which the numerator of which shall be the sum of the number of shares of Common Stock outstanding at the Close of Business on such Record Date for such dividend or other distribution plus the total number of shares of Common Stock constituting such dividend or other distribution; and (B) the denominator of which shall be the number of shares of Diamond Offshore Common Stock outstanding at the Close close of Business business on such Record Determination Date and the denominator shall be the sum of such number of shares and the total number of shares constituting such dividend or other distribution, such increase to become effective immediately after the opening of business on the day following such Determination Date. If For the purposes of this paragraph (1), the number of shares of Diamond Offshore Common Stock at any dividend time outstanding shall not include shares held in the treasury of Diamond Offshore but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Diamond Offshore Common Stock. (2) Subject to the last sentence of paragraph (7) of this Section, in case Diamond Offshore shall issue rights, options or distribution warrants to all holders of its Common Stock entitling them to subscribe for or purchase shares of Diamond Offshore Common Stock at a price per share less than the current market price per share (determined as provided in paragraph (8) of this Section 4.4) of the type described above is declared but not so paid or madeDiamond Offshore Common Stock on the Determination Date for such distribution, the Exchange Rate in effect at the opening of business on the day following such Determination Date shall again be adjusted to the increased by dividing such Exchange Rate that by a fraction of which the numerator shall be the number of shares of Diamond Offshore Common Stock outstanding at the close of business on such Determination Date plus the number of shares of Diamond Offshore Common Stock which the aggregate of the offering price of the total number of shares of Diamond Offshore Common Stock so offered for subscription or purchase would then purchase at such current market price and the denominator shall be the number of shares of Diamond Offshore Common Stock outstanding at the close of business on such Determination Date plus the number of shares of Diamond Offshore Common Stock so offered for subscription or purchase, such increase to become effective immediately after the opening of business on the day following such Determination Date. For the purposes of this paragraph (2), the number of shares of Diamond Offshore Common Stock at any time outstanding shall not include shares held in effect if such dividend or distribution had not been declared. the treasury of Diamond Offshore but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Diamond Offshore Common Stock. (3) In case outstanding shares of Diamond Offshore Common Stock shall be subdivided or reclassified into a greater number of shares of Diamond Offshore Common Stock, the Exchange Rate in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be proportionately increased, and and, conversely, in case outstanding shares of Diamond Offshore Common Stock shall each be combined or reclassified into a smaller number of shares of Diamond Offshore Common Stock, the Exchange Rate in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately reduced, such increase or reduction, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective. (b4) In Subject to the last sentence of paragraph (7) of this Section, in case the Guarantor shall issue rights Diamond Offshore shall, by dividend or warrants otherwise, distribute to all holders of its Diamond Offshore Common Stock entitling them for a period evidences of not more than 60 calendar days to subscribe for or purchase its indebtedness, shares of Common Stock at a price per share less than the average any class of the Closing Sale Prices for the five consecutive Trading Day period ending on the Business Day immediately preceding the date capital stock, or other property (including securities, but excluding (i) any rights, options or warrants referred to in paragraph (2) of announcement this Section, (ii) any dividend or distribution paid exclusively in cash, (iii) any dividend or distribution referred to in paragraph (1) of such issuance this Section and (other than a distribution iv) any merger or consolidation to which Section 4.11 of rights pursuant to any shareholder rights planthis Supplemental Indenture applies), the Exchange Rate shall be adjusted so that the same shall equal the rate determined by dividing the Exchange Rate in effect immediately prior to the Close close of Business business on the Record Determination Date for the issuance shall be increased by multiplying the Exchange Rate in effect immediately prior to the Close of Business on such Record Date distribution by a fraction of which (A) the numerator shall be the sum current market price per share (determined as provided in paragraph (8) of (Ithis Section 4.4) of the number of shares of Diamond Offshore Common Stock outstanding on such Determination Date less the then fair market value (excluding shares held as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution filed with the treasury Trustee) of the Guarantor) at portion of the Close assets, shares or evidences of Business on such Record Date and (II) the aggregate number indebtedness so distributed applicable to one share of shares (the “Underlying Shares”) of Diamond Offshore Common Stock underlying all such issued rights or warrants (whether by exercise, conversion, exchange or otherwise) and (B) the denominator shall be the sum of (I) number of shares of Common Stock outstanding (excluding shares held in the treasury such current market price per share of the Company) at the Close of Business on such Record Date and (II) the number of shares of Common Stock which the aggregate exercise, conversion, exchange or other price at which the Underlying Shares may be subscribed for or purchased pursuant to such rights or warrants would purchase at such Current Market Price per share (as defined in subsection (g) of this Section 4.6) of Diamond Offshore Common Stock. Such increase shall , such adjustment to become effective immediately prior to the opening of business on the Business Day day following such Record Determination Date. If the Board of Directors determines the fair market value of any distribution for purposes of this paragraph (4) by reference to the actual or when issued trading market for any Notes comprising such distribution, it must in doing so consider the prices in such market over the same period used in computing the current market price per share pursuant to paragraph (8) of this Section. (5) In case Diamond Offshore shall, by dividend or otherwise, make a Cash Distribution in an aggregate amount that, combined together with (i) the aggregate amount of any other Cash Distributions made within the 12 months preceding the date of payment of such distribution in respect of which no event shall the Exchange Rate be decreased adjustment pursuant to this paragraph (5) has been made and (ii) any Excess Purchase Payment made within the 12 months preceding the date of such distribution and in respect of which no adjustment has been made pursuant to paragraph (6) of this Section 4.6(b). In 4.4, exceeds 12.5% of Diamond Offshore's Common Stock Market Capitalization on the event that Determination Date for such rights or warrants are not so issuedCash Distribution, or to then, and in each such case, immediately after the extent that close of business on the Determination Date for such rights expire or are redeemed without being exercisedCash Distribution, the Exchange Rate shall again be adjusted so that the same shall equal the rate determined by dividing the Exchange Rate in effect immediately prior to the close of business on such Determination Date by a fraction (a) the numerator of which shall be equal to the current market price per share (determined as provided in paragraph (8) of this Section) of the Diamond Offshore Common Stock on such Determination Date less an amount equal to the quotient of (1) the amount of such excess divided by (2) the number of shares of Diamond Offshore Common Stock outstanding on such Determination Date and (b) the denominator of which shall be equal to the current market price per share (determined as provided in paragraph (8) of this Section 4.4) of the Diamond Offshore Common Stock on such Determination Date. (6) In case Diamond Offshore or any subsidiary of Diamond Offshore shall make an Excess Purchase Payment in an aggregate amount that, combined together with (i) the aggregate amount of any other Excess Purchase Payments made by Diamond Offshore or any subsidiary of Diamond Offshore within the 12 months preceding such Excess Purchase Payment in respect of which no adjustment pursuant to this paragraph (6) has been made and (ii) the aggregate amount of any Cash Distributions made within the 12 months preceding such Excess Purchase Payment in respect of which no adjustment pursuant to paragraph (5) of this Section 4.4 has been made, exceeds 12.5% of Diamond Offshore's Market Capitalization as of the Determination Date, then, and in each such case, immediately prior to the opening of business on the day after the tender offer in respect of which such Excess Purchase Payment is to be made expires, the Exchange Rate shall be adjusted so that the same shall equal the rate determined by dividing the Exchange Rate in effect immediately prior to the close of business on the Determination Date for such tender offer by a fraction (a) the numerator of which shall be equal to the product of (A) the number of shares of Diamond Offshore Common Stock outstanding (including any tendered shares) at such Determination Date less (B) the amount of such excess and (b) the denominator of which shall be equal to the product of (X) the current market price per share of the Diamond Offshore Common Stock (determined as provided in paragraph (8) of this Section 4.4) as of such Determination Date multiplied by (Y) the number of shares of Diamond Offshore Common Stock outstanding (including any tendered shares) as of the Determination Date less the number of all shares validly tendered and not withdrawn as of the Determination Date. (7) The reclassification of Diamond Offshore Common Stock into securities other than Diamond Offshore Common Stock (other than any reclassification upon a consolidation or merger to which Section 4.11 of the Supplemental Indenture applies) shall be deemed to involve (a) a distribution of such securities other than Diamond Offshore Common Stock to all holders of Diamond Offshore Common Stock (and the effective date of such reclassification shall be deemed to be the Determination Date), and (b) a subdivision or combination, as the case may be, of the number of shares of Diamond Offshore Common Stock outstanding immediately prior to such reclassification into the number of shares of Diamond Offshore Common Stock outstanding immediately thereafter (and the effective date of such reclassification shall be deemed to be "the day upon which such subdivision becomes effective" or "the day upon which such combination becomes effective", as the case may be, and "the day upon which such subdivision or combination becomes effective" within the meaning of paragraph (3) of this Section 4.4). Rights or warrants issued by Diamond Offshore to all holders of Diamond Offshore Common Stock entitling the holders thereof to subscribe for or purchase shares of Diamond Offshore Common Stock, which rights or warrants (i) are deemed to be transferred with such shares of Diamond Offshore Common Stock, (ii) are not exercisable and (iii) are also issued in respect of future issuances of Diamond Offshore Common Stock, in each case in clauses (i) through (iii) until the occurrence of a specified event or events ("Trigger Event"), shall for purposes of this Section 4.4 not be deemed issued until the occurrence of the earliest Trigger Event. (8) For the purpose of any computation under paragraphs (2), (4), (5) or (6) of this Section 4.4, the current market price per share of Diamond Offshore Common Stock on any date shall be calculated by the Company and be deemed to be the average of the daily Closing Prices for the five consecutive Trading Days selected by the Company commencing not more than 10 Trading Days before, and ending not later than, the earlier of the day in question and the day before the "ex" date with respect to the issuance or distribution requiring such computation. For purposes of this paragraph, the term "ex date", when used with respect to any issuance or distribution, means the first date on which the Diamond Offshore Common Stock trades regular way in the applicable securities market or on the applicable securities exchange without the right to receive such issuance or distribution. (9) No adjustment in the Exchange Rate shall be required unless such adjustment (plus any adjustments not previously made by reason of this paragraph (9)) would require an increase or decrease of at least one percent in such rate; provided, however, that any adjustments which would then by reason of this paragraph (9) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section shall be made to the nearest cent or to the nearest one-hundredth of a share, as the case may be. (10) The Company may make such increases in the Exchange Rate, for the remaining term of the Notes or any shorter term, in addition to those required by paragraphs (1), (2), (3), (4), (5) and (6) of this Section 4.4, as it considers to be advisable in order to avoid or diminish any income tax to any holders of shares of Diamond Offshore Common Stock resulting from any dividend or distribution of stock or issuance of rights or warrants to purchase or subscribe for stock or from any event treated as such for income tax purposes. (11) The Company from time to time at its option may increase the Exchange Rate by any amount for any period of at least 20 calendar days. To exercise this option the Company shall provide a notice to the Trustee and the Holders at least 15 calendar days prior to the first day of the period during which the Exchange Rate will be adjusted stating that the Exchange Rate will be adjusted pursuant to this provision, the period during which the adjusted Exchange Rate will be in effect if and the announcement with respect to such rights or warrants had not been madeadjusted Exchange Rate.