EXHIBIT 10.3
Execution Version
 
 
STOCK PURCHASE AGREEMENT
between
PRIDE INTERNATIONAL, INC.,
REDFISH HOLDINGS S. DE R.L. DE C.V.,
PRIDE INTERNATIONAL LTD.,
PRIDE SERVICES LTD.
and
GULF OF MEXICO PERSONNEL SERVICES S. DE R.L. DE C.V.
as SELLERS
and
GP INVESTMENTS LTD.
as BUYER
 
Dated as of August 9, 2007
 
 
 

 

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TABLE OF CONTENTS

                  ARTICLE I PURCHASE AND SALE     2  
 
  Section 1.1   Purchase and Sale     2  
 
  Section 1.2   Time and Place of Closing     3  
 
  Section 1.3   Deliveries by the Sellers     3  
 
  Section 1.4   Deliveries by the Buyer     3  
 
  Section 1.5   Intellectual Property     4  
 
  Section 1.6   Allocation of Purchase Price     4  
 
  Section 1.7   Books and Records     4  
 
  Section 1.8   No Ongoing or Transition Services     4  
 
  Section 1.9   Intercompany Accounts and Agreements     5  
 
  Section 1.10   Distribution; Purchase Price Adjustments     5  
 
                ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE SELLERS     6  
 
  Section 2.1   Organization; Etc     6  
 
  Section 2.2   Authority Relative to this Agreement     8  
 
  Section 2.3   Capitalization     8  
 
  Section 2.4   Ownership of Shares     9  
 
  Section 2.5   Contracts     9  
 
  Section 2.6   Consents and Approvals; No Violations     10  
 
  Section 2.7   Financial Statements     11  
 
  Section 2.8   Absence of Undisclosed Liabilities     11  
 
  Section 2.9   Absence of Certain Changes     11  
 
  Section 2.10   Litigation     12  
 
  Section 2.11   Compliance with Law     12  
 
  Section 2.12   Employee Benefit Plans     12  
 
  Section 2.13   Employees; Labor and Employment Matters     13  
 
  Section 2.14   Taxes     13  
 
  Section 2.15   Title, Ownership and Related Matters     14  
 
  Section 2.16   Rigs and E&P Equipment     15  
 
  Section 2.17   Environmental Matters     16  
 
  Section 2.18   Insurance     17  
 
  Section 2.19   Brokers; Finders and Fees     17  
 
  Section 2.20   Receivables     18  
 
  Section 2.21   Permits     18  
 
  Section 2.22   Powers of Attorney; Officers and Directors     18  
 
  Section 2.23   Suppliers     18  
 
  Section 2.24   Customers     19  
 
  Section 2.25   Intellectual Property     19  
 
  Section 2.26   Representations of the Sellers Refer to the Business     20  
 
                ARTICLE III REPRESENTATIONS AND WARRANTIES OF BUYER     20  
 
  Section 3.1   Organization; Etc     20  
 
  Section 3.2   Authority Relative to this Agreement     20  
 
  Section 3.3   Consents and Approvals; No Violations     20  
 
  Section 3.4   Acquisition of Shares for Investment     21  

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  Section 3.5   Availability of Funds     21  
 
  Section 3.6   Litigation     21  
 
  Section 3.7   Balance Sheet     22  
 
  Section 3.8   Investigation by the Buyer; No Reliance; Sellers’ Liability    
22  
 
  Section 3.9   Brokers; Finders and Fees     23  
 
                ARTICLE IV COVENANTS OF THE PARTIES     23  
 
  Section 4.1   Conduct of Business     23  
 
  Section 4.2   Access to Information; Confidentiality     25  
 
  Section 4.3   Consents; Cooperation     27  
 
  Section 4.4   Consultation     28  
 
  Section 4.5   Commercially Reasonable Efforts     28  
 
  Section 4.6   Public Announcements     28  
 
  Section 4.7   Tax Matters     29  
 
  Section 4.8   Withholding Taxes     34  
 
  Section 4.9   Employees; Employee Benefits     35  
 
  Section 4.10   Supplemental Disclosure     37  
 
  Section 4.11   Advice of Changes     37  
 
  Section 4.12   Performance Bonds     37  
 
  Section 4.13   Restricted Activities     38  
 
  Section 4.14   Financing     38  
 
                ARTICLE V CONDITIONS TO CONSUMMATION OF THE PURCHASE     39  
 
  Section 5.1   Conditions to Each Party’s Obligations to Consummate the
Purchase     39  
 
  Section 5.2   Further Conditions to the Sellers’ Obligations     39  
 
  Section 5.3   Further Conditions to the Buyer’s Obligations     40  
 
  Section 5.4   Frustration of Closing Conditions     40  
 
                ARTICLE VI TERMINATION AND ABANDONMENT     40  
 
  Section 6.1   Termination     40  
 
  Section 6.2   Procedure for and Effect of Termination     41  
 
                ARTICLE VII SURVIVAL AND INDEMNIFICATION     42  
 
  Section 7.1   Survival Periods     42  
 
  Section 7.2   PII’s Agreement to Indemnify     42  
 
  Section 7.3   Buyer’s Agreement to Indemnify     44  
 
  Section 7.4   Third-Party Indemnification     45  
 
  Section 7.5   No Setoff     46  
 
  Section 7.6   Insurance     46  
 
  Section 7.7   No Duplication     46  
 
  Section 7.8   Sole Remedy     46  
 
  Section 7.9   No Special Damages     47  
 
  Section 7.10   Express Negligence     47  
 
                ARTICLE VIII MISCELLANEOUS PROVISIONS     47  
 
  Section 8.1   Amendment and Modification     47  
 
  Section 8.2   Entire Agreement; Assignment; Binding Effect     47  

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  Section 8.3   Severability     47  
 
  Section 8.4   Notices     48  
 
  Section 8.5   Governing Law     49  
 
  Section 8.6   Dispute Resolution     49  
 
  Section 8.7   Descriptive Headings     51  
 
  Section 8.8   Counterparts     51  
 
  Section 8.9   Fees and Expenses     51  
 
  Section 8.10   Interpretation     51  
 
  Section 8.11   Third-Party Beneficiaries     52  
 
  Section 8.12   No Waivers     52  
 
  Section 8.13   Specific Performance     52  

     
EXHIBIT A
  Form of Transition Services Agreement

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GLOSSARY OF DEFINED TERMS

          Defined Terms   Where Defined
 
       
AAA
  Section 8.6(a)(ii)
Affected Employees
  Section 4.9(c)
affiliate
  Section 8.10(b)(i)
Agreement
  Preamble
Alternative Financing
  Section 4.14
Antitrust Regulations
  Section 2.6
Auditors
  Section 1.10(b)
Base Net Working Capital
  Section 1.10(c)
Benefit Plans
  Section 4.9(d)
Business
  Recitals
Business Intellectual Property
  Section 2.25(a)
Business Material Adverse Effect
  Section 2.1(b)
Buyer
  Preamble
Buyer Damages
  Section 7.2(a)
Buyer Indemnitees
  Section 7.2(a)
Buyer Material Adverse Effect
  Section 3.1
Buyer Plan
  Section 4.9(d)
Buyer Proprietary Information
  Section 4.2(d)
Buyer Tax Benefit
  Section 4.7(g)
Claim
  Section 7.4
Closing
  Section 1.2
Closing Date
  Section 1.2
Closing Date Schedule
  Section 1.10(b)
Closing Statement
  Section 1.10(b)
Code
  Section 1.6
Companies
  Recitals
Company
  Recitals
Company Contracts
  Section 2.5(b)
Confidentiality Agreement
  Section 4.2(b)
Contracts
  Section 2.5(a)
Current Assets
  Section 1.10(b)
Current Liabilities
  Section 1.10(b)
Due Date
  Section 4.7(j)
Due Diligence Information
  Section 3.8(b)
E&P Equipment
  Section 2.16(b)
E&P Services Business
  Recitals
Electing Target
  Section 4.7(a)(iii)
Environment
  Section 2.17
Environmental Claims
  Section 2.17(c)
Environmental Law
  Section 2.17
Environmental Permits
  Section 2.17(b)
ERISA
  Section 2.12(c)
Financing
  Section 3.5

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          Defined Terms   Where Defined
 
       
Financing Commitment
  Section 3.5
Financing Modification Requirements
  Section 4.14
Financial Statements
  Section 2.7
Foreign Tax Credit Loss Amount
  Section 4.7(a)(iii)
GAAP
  Section 1.10(b)
GOMPS
  Preamble
Governmental Entity
  Section 2.6
HAPSA
  Recitals
Hazardous Substance
  Section 2.17
Law
  Section 2.6
Leases
  Section 2.15(b)
Liens
  Section 2.4
MC
  Recitals
Net Working Capital
  Section 1.10(b)
Operating Employees
  Section 4.9(a)
Owned Property
  Section 2.15(b)
party
  Preamble
Payor
  Section 4.7(c)(iii)
Permits
  Section 2.21
Permitted Liens
  Section 2.15(a)
person
  Section 8.10(b)(ii)
PetroTech
  Recitals
PIBL
  Recitals
PII
  Preamble
PIL
  Preamble
PIL Sub Shares
  Recitals
PISRL
  Recitals
Plans
  Section 2.12(a)
PPSRL
  Recitals
PPSRL Shares
  Recitals
Preparer
  Section 4.7(c)(iii)
Proceeding
  Section 2.10
PSAL
  Recitals
PSL
  Preamble
PSL Sub Shares
  Recitals
Purchase
  Section 1.1
Purchase Price
  Section 1.1(e)
Real Property
  Section 2.15(b)
Recipient
  Section 4.7(d)(i)
Redfish
  Preamble
Release
  Section 2.17
Remedial Action
  Section 2.17
Representatives
  Section 8.6(a)(i)
Restricted Activities
  Section 4.13(d)
Rigs
  Section 2.16(a)
Section 338 Schedule
  Section 4.7(a)(iii)

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          Defined Terms   Where Defined
 
       
Seller
  Preamble
Sellers
  Preamble
Seller Damages
  Section 7.3(a)
Seller Disclosure Letter
  Article II
Seller Indemnitees
  Section 7.3(a)
Seller Tax Detriment
  Section 4.7(g)
Seller Trademarks and Logos
  Section 1.5
Shares
  Recitals
Subsidiary
  Section 8.10(b)(iii)
Survival Period
  Section 7.1
Target
  Section 4.7(a)(iii)
Tax
  Section 4.7(j)
Tax Audit
  Section 4.7(d)(i)
Tax Item
  Section 4.7(j)
Tax Returns
  Section 2.14(a)
Technology
  Section 2.25(c)
Territory
  Section 4.13(d)
Transfer Taxes
  Section 4.7(e)
Transition Services Agreement
  Section 1.8
Twin Oaks
  Recitals
Twin Oaks Shares
  Recitals
Voting Company Debt
  Section 2.3(a)

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STOCK PURCHASE AGREEMENT
          STOCK PURCHASE AGREEMENT, dated as of August 9, 2007 (this
“Agreement”), is by and between Pride International, Inc., a Delaware
corporation (“PII”), Redfish Holdings S. de R.L. de C.V., a Mexican limited
liability company and indirect, wholly owned subsidiary of PII (“Redfish”),
Pride International Ltd., a British Virgin Islands company and direct, wholly
owned subsidiary of PII (“PIL”), Pride Services Ltd., a British Virgin Islands
company and indirect, wholly owned subsidiary of PII (“PSL”), and Gulf of Mexico
Personnel Services S. de R.L. de C.V., a Mexican limited liability company and
indirect, wholly owned subsidiary of PIL (“GOMPS” and, together with PII,
Redfish, PIL and PSL, sometimes collectively referred to herein as the “Sellers”
and, individually, as a “Seller”), and GP Investments Ltd., a Bermuda company
(the “Buyer”). The Sellers and the Buyer are hereinafter collectively referred
to as the “parties” and each individually as a “party.”
          WHEREAS, PII, through its direct or indirect subsidiaries
Perforaciones Pride S. de R.L. de C.V., a Mexico company (“PPSRL”), Marlin
Colombia Drilling Co. Inc., a British Virgin Islands company (“MC”), Pride South
America Ltd., a British Virgin Islands company (“PSAL”), Pride International
S.R.L., an Argentina limited liability company (“PISRL”), Pride International
Bolivia Ltda., a Bolivia limited liability company (“PIBL”), PetroTech S.A.I.C.,
an Argentina corporation (“PetroTech”), Hispano Americana de Petroleos S.R.L.,
an Argentina limited liability company (“HAPSA”), and Twin Oaks Financial Ltd.,
a British Virgin Islands company (“Twin Oaks” and, together with PPSRL, MC,
PSAL, PISRL, PIBL, PetroTech and HAPSA, sometimes collectively referred to
herein as the “Companies” and, individually, as a “Company”), is engaged in
(i) the land contract drilling and workover business in Latin America, primarily
in Argentina, Venezuela, Colombia, Bolivia and Mexico, and associated assets
that are used in connection with the operation of such business and (ii) the
business of providing pressure pumping, formation testing, underbalance
drilling, drilling fluids, directional drilling, fishing tools, production
services and related services to exploration and production companies in one or
more of Argentina, Bolivia, Brazil, Colombia, Ecuador, Peru and Venezuela (the
“E&P Services Business” and, together with the business described in clause (i),
collectively, the “Business”);
          WHEREAS, PIL owns 100% of the issued and outstanding capital stock of
PSAL and MC;
          WHEREAS, PIL, together with Jorge R. Postiglione, as third-party
nominee on behalf of PIL, owns 100% of the issued and outstanding capital stock
of PISRL;
          WHEREAS, PIL and PISRL collectively own 100% of the issued and
outstanding capital stock of PIBL;
          WHEREAS, Redfish and GOMPS collectively own 100% of the issued and
outstanding capital stock of PPSRL;
          WHEREAS, PISRL and PSL collectively own 100% of the issued and
outstanding capital stock of PetroTech and HAPSA;

 

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          WHEREAS, PII owns 100% of the issued and outstanding capital stock of
Twin Oaks; and
          WHEREAS, upon the terms and subject to the conditions set forth
herein, (i) PIL desires to sell and the Buyer desires to purchase all of the
then issued and outstanding capital stock of MC, PSAL, PIBL and PISRL owned by
PIL (collectively, the “PIL Sub Shares”), (ii) each of Redfish and GOMPS desires
to sell and the Buyer desires to purchase all of the then issued and outstanding
capital stock of PPSRL owned by it (the “PPSRL Shares”), (iii) PSL desires to
sell and the Buyer desires to purchase all of the then issued and outstanding
capital stock of PetroTech and HAPSA owned by PSL (collectively, the “PSL Sub
Shares”), and (iv) PII desires to sell and the Buyer desires to purchase all of
the then issued and outstanding capital stock of Twin Oaks (the “Twin Oaks
Shares” and, together with the PIL Sub Shares, the PPSRL Shares and the PSL Sub
Shares, the “Shares”), after which all of the issued and outstanding capital
stock of the Companies would be owned, directly or indirectly, by the Buyer;
          NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements contained in this
Agreement, and intending to be legally bound, the parties agree as follows:
ARTICLE I
PURCHASE AND SALE
          Section 1.1 Purchase and Sale. Upon the terms and subject to the
conditions of this Agreement, at the Closing:
     (a) PIL will sell, convey, assign, transfer and deliver to the Buyer, and
the Buyer will purchase, acquire and accept from PIL, the PIL Sub Shares;
     (b) Each of Redfish and GOMPS will sell, convey, assign, transfer and
deliver to the Buyer, and the Buyer will purchase, acquire and accept from
Redfish and GOMPS, the PPSRL Shares;
     (c) PSL will sell, convey, assign, transfer and deliver to the Buyer, and
the Buyer will purchase, acquire and accept from PSL, the PSL Sub Shares;
     (d) PII will sell, convey, assign, transfer and deliver to the Buyer, and
the Buyer will purchase, acquire and accept from PII, the Twin Oaks Shares;
     (e) The Buyer will pay to the Sellers, in consideration for the Shares, an
aggregate amount of $1,000,000,000 in cash, subject to adjustment as provided in
Section 1.10. To facilitate the Purchase (as defined below), the Buyer will pay
to PII, for the account and as agent of each of the Sellers, the amount set
forth in the immediately preceding sentence, by wire transfer of immediately
available funds to an account or accounts designated in writing by PII at least
two business days prior to the Closing Date (the “Purchase Price”).

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          The transactions contemplated by this Section 1.1 are sometimes
referred to as the “Purchase.”
          Section 1.2 Time and Place of Closing. The closing of the transactions
contemplated by this Agreement (the “Closing”) will take place at the offices of
Baker Botts L.L.P., One Shell Plaza, 910 Louisiana Street, Houston, Texas
77002-4995, at 9:00 a.m. (central time) on the later of (i) August 31, 2007 or
(ii) the first business day following the date on which all of the conditions to
each party’s obligations under this Agreement have been satisfied or, to the
extent permitted, waived (other than those conditions that by their nature are
to be satisfied on the Closing Date (as defined below), but subject to the
satisfaction or, to the extent permitted, waiver of such conditions), or at such
other date, place or time as the parties may otherwise agree. The date on which
the Closing occurs and the transactions contemplated by this Agreement become
effective is referred to as the “Closing Date.”
          Section 1.3 Deliveries by the Sellers. Upon the terms and subject to
the conditions of this Agreement, at the Closing, the Sellers will deliver (or
cause to be delivered) the following to the Buyer:
     (a) Certificates representing the Shares and/or affidavits of ownership
thereof, accompanied by stock powers duly endorsed in blank or accompanied by
duly executed instruments of transfer;
     (b) The resignations (or evidence of the removal) of the members of the
Boards of Directors (or other governing body) of each of the Companies and their
respective Subsidiaries, as requested by the Buyer, and the delivery of releases
of any claim against the Companies and their respective Subsidiaries;
     (c) A certificate of PII, executed on its behalf by the Chief Executive
Officer, the President or a Vice President of PII, certifying as to the
fulfillment of the conditions set forth in Section 5.3 hereof;
     (d) An executed counterpart of the Transition Services Agreement by PII;
and
     (e) All other documents, instruments and writings required to be delivered
by the Sellers at or (to the extent not previously delivered) prior to the
Closing under this Agreement.
          Section 1.4 Deliveries by the Buyer. Upon the terms and subject to the
conditions of this Agreement, at the Closing, the Buyer will deliver (or cause
to be delivered) the following to the Sellers:
     (a) The Purchase Price, in immediately available funds, as set forth in
Section 1.1 of this Agreement;
     (b) A certificate of the Buyer, executed on its behalf by the Chief
Executive Officer, the President or a Vice President of the Buyer, certifying as
to the fulfillment of the conditions set forth in Section 5.2 hereof;

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     (c) An executed counterpart of the Transition Services Agreement by the
Buyer; and
     (d) All other documents, instruments and writings required to be delivered
by the Buyer at or (to the extent not previously delivered) prior to the Closing
under this Agreement.
          Section 1.5 Intellectual Property. It is expressly agreed that the
Buyer is not purchasing, acquiring or otherwise obtaining any right, title or
interest in the name “Pride” or any derivative thereof, or any trade names,
trademarks, identifying logos or service marks related thereto or employing the
words “Pride” or any part or variation of any of the foregoing or any
confusingly similar trade names, trademarks, logos or service marks
(collectively, the “Seller Trademarks and Logos”), and any right, title or
interest the Companies or any of their respective Subsidiaries may have in the
Seller Trademarks and Logos shall terminate as of the Closing. Neither the Buyer
nor any of its affiliates shall make any use of the Seller Trademarks and Logos
from and after 90 days following the Closing, including through the use of
stationery or letterhead. The Buyer shall, at its own cost and within 90 days
from the Closing Date, remove from the Rigs (as defined below) and the other
properties and assets of the Companies and their respective Subsidiaries, or
paint over, any and all of the Seller Trademarks and Logos.
          Section 1.6 Allocation of Purchase Price. Not later than 15 calendar
days after the Closing Date Schedule and Closing Statement become final and
binding on the parties pursuant to Section 1.10(b), PII and the Buyer shall
agree on an allocation of the Purchase Price to the stock of each Company,
subject to Section 1.6 of the Seller Disclosure Letter. If PII and the Buyer are
unable to agree on such allocation, the matters in dispute shall, under
procedures similar to those in Section 1.10(b), be submitted to Ernst & Young
LLP or such other independent accounting firm as may be approved by PII and the
Buyer, which firm shall render its opinion as to such specific matters. Except
as required pursuant to applicable Law (as defined below) or a determination (as
defined in Section 1313 of the Internal Revenue Code of 1986, as amended (the
“Code”), or any similar provision of Law), none of the parties, directly or
indirectly, through a subsidiary or affiliate or otherwise, will take a position
on any Tax Return (as defined below) or in any judicial proceeding that is in
any way inconsistent with the allocation set forth in this Section 1.6.
          Section 1.7 Books and Records. The Sellers shall deliver to the Buyer
at or as soon as practicable (but in any event not later than 10 days) after the
Closing all books and records of the Companies and their Subsidiaries (including
books of account, personnel and payroll records and the like), including the
books and records of the Companies relating to Taxes (as defined below) and Tax
Returns. The Sellers may retain copies of any books and records delivered to the
Buyer.
          Section 1.8 No Ongoing or Transition Services. Except as provided for
in the Transition Services Agreement dated the Closing Date between PII and the
Buyer, substantially in the form of Exhibit A hereto (the “Transition Services
Agreement”), at the Closing, all data processing, accounting, insurance,
banking, personnel, legal, communications and other products and services
provided to the Companies or any of their respective Subsidiaries by PII or any
of

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its other affiliates, including any agreements or understandings (written or
oral) with respect thereto, will terminate.
          Section 1.9 Intercompany Accounts and Agreements. Except for accounts
payable—affiliates and notes payable—affiliates reflected on the Closing Date
Schedule and except as set forth in Section 1.9 of the Seller Disclosure Letter,
on or prior to the Closing Date, all intercompany accounts, leases and other
Contracts between any of the Companies or their respective Subsidiaries, on the
one hand, and PII or its affiliates (other than the Companies or any of their
respective Subsidiaries), on the other hand, shall be canceled, paid or
otherwise settled. Subject to Section 1.10 of this Agreement, no adjustment
shall be made to the Purchase Price as a result of any such cancellation.
          Section 1.10 Distribution; Purchase Price Adjustments
          (a) The parties agree that, so long as any distributions made are
reflected in the Closing Date Schedule and in any adjustments to the Purchase
Price under Section 1.10(c), the Sellers shall have the right, at or prior to
the Closing, to cause any Company and its Subsidiaries to distribute cash,
accounts receivable and any other working capital items (except inventory) to
the Sellers or their affiliates, by one or more dividends, repurchases of
existing stock and/or other distributions; provided, however, that no Company or
Subsidiary incorporated in Argentina will pay a dividend or otherwise make any
distribution to its shareholders.
          (b) Within 90 calendar days following the Closing, PII shall prepare,
or cause to be prepared, and deliver to the Buyer a schedule of components of
combined Net Working Capital of the Companies and the Subsidiaries thereof
listed in the notes to the Financial Statements (as defined below) as of the
close of business on the Closing Date (the “Closing Date Schedule”) and a
statement (the “Closing Statement”) reflecting the calculation of any adjustment
to the Purchase Price under Section 1.10(c), accompanied by a certificate of an
officer of PII to the effect that such statement has been prepared in accordance
with the terms of this Agreement. As used in this Agreement, (i) “Net Working
Capital” means the amount of combined Current Assets of the Companies and their
respective Subsidiaries minus the amount of combined Current Liabilities of the
Companies and their respective Subsidiaries; (ii) “Current Assets” means the sum
of cash and cash equivalents, net trade receivables, net parts and supplies and
prepaid and other current assets (excluding deferred mobilization costs on Rig
321); and (iii) “Current Liabilities” means the sum of accounts payable,
accounts payable—affiliates, note payable—affiliates and accrued expenses and
other current liabilities (excluding deferred mobilization revenues on Rig 321);
in each case as of the Closing Date and determined in accordance with generally
accepted accounting principles in the United States (“GAAP”) and consistent with
the financial reporting policies and procedures used by the Sellers to prepare
the combined balance sheet as of December 31, 2006 included in the Financial
Statements; provided, however, that Current Assets and Current Liabilities shall
not include Taxes payable, Taxes receivable or deferred Taxes, as applicable.
For the avoidance of doubt, Section 1.10(b) of the Seller Disclosure Letter sets
forth the calculation of Net Working Capital as of December 31, 2006. The Buyer
shall have a period of 45 calendar days after delivery of the Closing Date
Schedule and the Closing Statement to review (and cause Buyer’s auditors to
review) such documents and make any objections it may have in writing to PII.
During such 45-day period, Buyer and its independent auditors shall be permitted
to review the working papers of PII’s

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independent auditors relating to the Closing Date Schedule. If written
objections are delivered to PII by the Buyer within such 45-day period, then the
Buyer and PII shall attempt to resolve the matter or matters in dispute. If no
written objections are made by Buyer within such 45-day period, then such
Closing Date Schedule and Closing Statement shall be final and binding on the
parties. If disputes with respect to such Closing Date Schedule or such Closing
Statement cannot be resolved by Buyer and PII within 30 calendar days after
timely delivery of any objections thereto, then, at the request of either Buyer
or PII, the specific matters in dispute shall be submitted to Ernst & Young LLP
or such other independent accounting firm as may be approved by PII and the
Buyer (the “Auditors”), which firm shall render its opinion as to such specific
matters. If no such referral is made within 45 days after the delivery of the
objections, then such Closing Date Schedule and such Closing Statement shall be
final and binding on the parties hereto. Based on such opinion, the Auditors
will then send to PII and the Buyer its determination of the specified matters
in dispute, which determination shall be final and binding on the parties
hereto. Judgment may be entered upon the determination of the Auditors in any
court having jurisdiction over the party against which such determination is to
be enforced. The fees and expenses of the Auditors shall be borne one-half by
the Sellers and one-half by the Buyer.
          (c) If the Net Working Capital reflected on the Closing Date Schedule
as finally determined under Section 1.10(b) is less than $208,191,916 (“Base Net
Working Capital”), then within five days following the final determination
thereof, PII will pay, or cause the applicable Seller to pay, to the Buyer by
wire transfer in immediately available funds to the account or accounts
designated by the Buyer the amount of such deficiency, plus interest thereon at
6% per annum, calculated on the basis of the actual number of days elapsed
divided by 365, from (and including) the Closing Date to (but excluding) the
date of such payment. If the Net Working Capital reflected on the Closing Date
Schedule is greater than Base Net Working Capital, then within five days
following the final determination thereof, the Buyer will pay to PII, for the
account and as agent of the applicable Seller, by wire transfer in immediately
available funds to the account or accounts designated by PII the amount of such
excess, plus interest thereon at such interest rate from (and including) the
Closing Date to (but excluding) the date of such payment.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
          Except as set forth in a letter to be delivered by the Sellers to the
Buyer concurrently with the execution and delivery of this Agreement (the
“Seller Disclosure Letter”), the Sellers jointly and severally represent and
warrant to the Buyer as follows.
          Section 2.1 Organization; Etc.
          (a) Each Seller (i) is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization; (ii) has all
requisite corporate or other entity power and authority and possesses all
governmental franchises, licenses, permits, authorizations and approvals
necessary to own, lease and operate its properties and assets, including the
Shares owned by such Seller, and to carry on its business substantially as it is
now being conducted; and

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(iii) is duly qualified and in good standing to do business in each jurisdiction
in which the nature of its business or the ownership, operation or leasing of
its properties makes such qualification necessary, except where the failure to
be so organized, existing and in good standing, to have such power or authority
or to be so qualified would not, individually or in the aggregate, adversely
affect the ability of the Sellers to consummate the transactions contemplated by
this Agreement. Each Seller has delivered or made available to the Buyer true
and complete copies of its corporate charter and bylaws (or equivalent governing
documents), in each case as amended through the date of this Agreement.
          (b) Each of the Companies and their respective Subsidiaries (i) is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization; (ii) has all requisite corporate or other entity
power and authority and possesses all governmental franchises, licenses,
permits, authorizations and approvals necessary to own, lease and operate its
properties and assets and to carry on the Business conducted by such Company or
Subsidiary substantially as it is now being so conducted; and (iii) is duly
qualified and in good standing to do business in each jurisdiction in which the
conduct or nature of its business or the ownership, operation or leasing of its
properties makes such qualification necessary, except where the failure to be so
organized, existing and in good standing, to have such power and authority or to
be so qualified would not, individually or in the aggregate, reasonably be
expected to have a Business Material Adverse Effect (as defined below). The
Sellers have delivered or made available to the Buyer true and complete copies
of corporate charter and bylaws (or equivalent governing documents) of the
Companies and their respective Subsidiaries, in each case as amended through the
date of this Agreement. As used in this Agreement, the term “Business Material
Adverse Effect” means a material adverse change in, or effect on, the Business
or the business, assets, financial condition or results of operations of the
Companies and their respective Subsidiaries, taken as a whole; provided,
however, that (1) any adverse change or effect attributable to the announcement,
pendency or consummation of the transactions contemplated by this Agreement
(including any cancellations of or delays in customer orders or other decreases
in customer demand, any reduction in revenues, any disruption in supplier,
distributor, customer, partner or similar relationships, work stoppages, any
loss or threatened loss of employees or other employee disruptions), (2) any
adoption, implementation, promulgation, repeal, modification, reinterpretation
or proposal of any rule, regulation, ordinance, order, protocol, practice or
measure or any other Law of or by any government, governmental agency, court,
commission, market administrator or similar organization or other such entity,
(3) the bankruptcy, insolvency or other financial distress of any customers of
any of the Companies or their Subsidiaries, (4) changes or developments in
financial or securities markets or the economy in general, any outbreak,
continuation or escalation of hostilities or the declaration by the United
States or any Latin American country of a national emergency or war, any acts of
terrorism, any other calamity or crisis or geopolitical event, or effects of
weather or meteorological events, (5) changes that are the result of factors
generally affecting the principal industries and geographic areas in which the
Companies and their Subsidiaries operate, except to the extent such changes have
a disproportionate effect on the Business or the Companies and their respective
Subsidiaries, taken as a whole, compared with other participants in such
industries or geographical areas, (6) changes in the price of oil and natural
gas, (7) any change in GAAP or in its interpretation or (8) any actions taken at
the Buyer’s request or contemplated by this Agreement, shall be excluded from
such determination. In addition to the foregoing, the determination of the
dollar value or impact of any change or event under the preceding sentence

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shall be based solely on the actual dollar value of such change or effect, on a
dollar-for-dollar basis, and shall not take into account (i) any multiplier
valuations, including any multiple based on earnings or other financial indicia,
or (ii) any consequential damages or other consequential valuation.
          Section 2.2 Authority Relative to this Agreement. Each Seller has the
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated by this Agreement. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
by this Agreement have been duly and validly authorized by all requisite
corporate action on the part of each of the Sellers. This Agreement has been
duly and validly executed and delivered by each of the Sellers, and assuming
this Agreement has been duly authorized, executed and delivered by the Buyer,
constitutes a valid and binding agreement of each of the Sellers, enforceable
against each of the Sellers in accordance with its terms, except that (a) such
enforcement may be subject to any bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or transfer or other laws, now or hereafter in
effect, relating to or limiting creditors’ rights generally and (b) enforcement
of this Agreement, including, among other things, the remedy of specific
performance and injunctive and other forms of equitable relief, may be subject
to equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
          Section 2.3 Capitalization.
          (a) Section 2.3(a) of the Seller Disclosure Letter sets forth the
number of issued and outstanding shares of capital stock of each Company and the
record and beneficial owners of its outstanding capital stock as of the date
hereof. All of such outstanding shares of capital stock of each Company are duly
authorized, validly issued, fully paid and nonassessable. Except for the Shares,
there are not, and at the Closing there will not be, any capital stock or other
equity interests in any Company issued, reserved for issuance or outstanding.
Section 2.3(a) of the Seller Disclosure Letter sets forth for each Subsidiary of
a Company the amount of its authorized capital stock, the amount of its
outstanding capital stock and the record and beneficial owners of its
outstanding capital stock. Except as set forth in Section 2.3(a) of the Seller
Disclosure Letter, there are no shares of capital stock or other equity
securities of any such Subsidiary issued, reserved for issuance or outstanding.
The Shares are duly authorized, validly issued, fully paid and nonassessable and
not subject to or issued in violation of any purchase option, call option, right
of first refusal, preemptive right, subscription right or any similar right
under any provision of applicable Law (as defined below), the corporate charter
and bylaws (or equivalent governing documents) of any Company or any Contract to
which any Company is a party or otherwise bound. All the outstanding shares of
capital stock of each Subsidiary of a Company have been duly authorized and
validly issued and are fully paid and nonassessable. There are no bonds,
debentures, notes or other indebtedness of any Company having the right to vote
(or convertible into, or exchangeable for, securities having the right to vote)
on any matters on which holders of Shares may vote (“Voting Company Debt”).
Except as set forth above, as of the date of this Agreement, there are not any
options, warrants, rights, convertible or exchangeable securities, “phantom”
stock rights, stock appreciation rights, stock-based performance units,
commitments, Contracts, arrangements or undertakings of any kind to which any
Company or any of its Subsidiaries is a party or by which any of them is bound
(i) obligating such Company or any such Subsidiary to issue, deliver or sell, or
cause to be issued, delivered or

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sold, additional shares of capital stock or other equity interests in, or any
security convertible or exercisable for or exchangeable into any capital stock
of or other equity interest in, such Company or of any such Subsidiary or any
Voting Company Debt, (ii) obligating such Company or any such Subsidiary to
issue, grant, extend or enter into any such option, warrant, call, right,
security, commitment, Contract, arrangement or undertaking or (iii) giving any
person the right to receive any economic benefit or right similar to or derived
from the economic benefits rights accruing to holders of Shares. As of the date
of this Agreement, there are not any outstanding contractual obligations of any
Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire
any shares of capital stock of such Company or any such Subsidiary.
          (b) Except for its interests in the Subsidiaries of the Companies and
except for the ownership interests set forth in Section 2.3(b) of the Seller
Disclosure Letter, no Company owns, directly or indirectly, any capital stock,
membership interest, partnership interest, joint venture interest or other
equity interest with a fair market value as of the date of this Agreement in
excess of $50,000 in any person.
          Section 2.4 Ownership of Shares. Immediately prior to the Closing,
(a) PIL will have good and valid title to all the issued and outstanding capital
stock of PSAL and MC; (b) PIL and Jorge R. Postiglione, as third-party nominee
on behalf of PIL, will have good and valid title to 1,741,280 quotas and 470
quotas, respectively, of PISRL, representing all the issued and outstanding
capital stock of PISRL; (c) PIL and PISRL will have good and valid title to
1,541,311 capital quotas and 269 capital quotas, respectively, of PIBL,
representing all the issued and outstanding capital stock of PIBL; (d) Redfish
and GOMPS will have good and valid title to membership interests equaling
19,751,312.41 shares and one share, respectively, in PPSRL, representing all of
the issued and outstanding capital stock of PPSRL; (e) PISRL and PSL will have
good and valid title to 519,310 shares and one share, respectively, of HAPSA,
representing all the issued and outstanding capital stock of HAPSA; (f) PISRL
and PSL will have good and valid title to 188 shares and 212 shares,
respectively, of PetroTech, representing all the issued and outstanding capital
stock of PetroTech; and (g) PII will have good and valid title to all of the
issued and outstanding capital stock of Twin Oaks, in each case free and clear
of all liens, pledges, charges, claims, security interests or other
encumbrances, whether consensual, statutory or otherwise (collectively,
“Liens”). The consummation of the Purchase will convey to the Buyer good and
valid title to the Shares, free and clear of all Liens, except for those created
by the Buyer or arising out of ownership of the Shares by the Buyer. Other than
this Agreement, the Shares are not subject to any voting trust agreement or
other Contract restricting or otherwise relating to the voting, dividend rights
or disposition of the Shares.
          Section 2.5 Contracts.
          (a) Section 2.5 of the Seller Disclosure Letter lists, as of the date
of this Agreement, (i) all written agreements, commitments, contracts, leases,
licenses, indentures, instruments and other legally binding arrangements
(collectively, “Contracts”) to which any Company or any of its Subsidiaries is a
party and that (1) relate to the Business, (2) involve payments by or to any
Company or any of its Subsidiaries of at least $1,000,000 over the original base
term and (3) have an original base term (excluding potential renewals) extending
at least 12 months; (ii) all Contracts to which any Company or any of its
Subsidiaries is a party involving payments by or to any Company or any such
Subsidiary of at least $5,000,000 over the original

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base term, other than Contracts pursuant to which any Company or any of its
Subsidiaries purchases goods or services in the ordinary course of business;
(iii) all Contracts relating to the borrowing of money by any Company or any of
its Subsidiaries (other than intercompany accounts, which shall be governed by
Section 1.9 of this Agreement) and guarantees by any Company or any of its
Subsidiaries of any obligation for the borrowing of money; (iv) all employment
Contracts of any Company or any of its Subsidiaries that have an aggregate
future liability in excess of $100,000 and are not terminable by such Company or
such Subsidiary by notice of not more than 90 days for a cost of less than
$100,000; (v) all collective bargaining agreements and other Contracts of any
Company or any of its Subsidiaries with any labor organization, union or
association; (vi) all Contracts under which any Company or any of its
Subsidiaries has borrowed any money from, or issued any note, bond, debenture or
other evidence of indebtedness to, any person (other than any Seller, any
Company or any of their respective Subsidiaries) in any such case which,
individually or in the aggregate, is in excess of $1,000,000; and (vii) any
Contract not otherwise required to be set forth in the Seller Disclosure Letter
and under which the performance of any Company’s or any of its Subsidiaries’
obligations or the consequences of a default or termination would reasonably be
expected to have a Business Material Adverse Effect.
          (b) To the knowledge of the Sellers, all Contracts required to be
listed in Section 2.5 of the Seller Disclosure Letter (the “Company Contracts”)
are valid, binding and in full force and effect and are enforceable by the
applicable Company or Subsidiary thereof in accordance with their terms, except
for such failures to be valid, binding, in full force and effect or enforceable
that, individually or in the aggregate, would not reasonably be expected to have
a Business Material Adverse Effect. The applicable Company or Subsidiary thereof
has performed all material obligations required to be performed by it to date
under the Company Contracts, and it is not (with or without the lapse of time or
the giving of notice, or both) in breach or default in any material respect
thereunder and, to the knowledge of the Sellers, no other party to any Company
Contract is (with or without the lapse of time or the giving of notice, or both)
in breach or default in any material respect thereunder. None of the Sellers,
the Companies or any of the Subsidiaries of the Companies has received any
notice of the intention of any party to terminate any Company Contract. Complete
and correct copies of all Company Contracts, together with all modifications and
amendments thereto, have been made available to the Buyer.
          Section 2.6 Consents and Approvals; No Violations. Except for
applicable requirements of the antitrust or competition laws set forth in
Section 2.6 of the Seller Disclosure Letter (the “Antitrust Regulations”),
neither the execution and delivery of this Agreement by any of the Sellers nor
the consummation by any Seller of the transactions contemplated by this
Agreement will (a) conflict with or result in any breach of any provision of
corporate charter, bylaws or equivalent governing documents of any Seller, any
Company or any Subsidiary of a Company, (b) result in a violation or breach of,
or constitute (with or without due notice or lapse of time or both) a default
(or give rise to any right of termination, cancellation or acceleration) under,
or give rise to a loss of a material benefit under, or result in the creation of
any Lien upon the properties or assets of such Seller, Company or Subsidiary
under, or require any consent under, any Contract to which any of the Sellers,
any Company or any Subsidiary of a Company is a party or by which any of them or
any of their respective properties or assets are bound, (c) violate any law,
order, judgment, writ, injunction, decree, statute, rule or regulation
(collectively, “Laws” and, individually, a “Law”) that is currently in effect
and applicable to any Seller, any

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Company, any Subsidiary of a Company or any of their respective properties or
assets, or (d) require any filing, declaration or registration with, or the
obtaining of any permit, authorization, license, order, consent or approval of,
any Federal, state, local or foreign government or any court of competent
jurisdiction, administrative agency or commission or other governmental
authority or instrumentality (“Governmental Entity”), except in the case of
clauses (b), (c) and (d) of this Section 2.6 for any such violations, breaches,
defaults, rights of termination, cancellation or acceleration or requirements
that, individually or in the aggregate, would not reasonably be expected to have
a Business Material Adverse Effect and would not adversely affect the ability of
the Sellers to consummate the transactions contemplated by this Agreement, or
which become applicable as a result of the business or activities in which the
Buyer is or proposes to be engaged or as a result of any acts or omissions by,
or the status of or any facts pertaining to, the Buyer.
          Section 2.7 Financial Statements. Section 2.7 of the Seller Disclosure
Letter contains the audited combined balance sheets of the Companies and the
Subsidiaries listed therein as of December 31, 2006 and 2005 and the audited
combined statement of operations, statement of owner’s net investment and
statement of cash flows of the Companies and the Subsidiaries listed therein for
each of the years in the three-year period ended December 31, 2006, and the
unaudited combined balance sheet as of June 30, 2007 and the unaudited combined
statement of operations, statement of owner’s net investment and statement of
cash flows of the Companies and the Subsidiaries listed therein for the
six-month period ended June 30, 2007 (collectively, the “Financial Statements”).
Except as disclosed in the notes thereto, each of such balance sheets fairly
presents in all material respects the combined financial position of the
Companies and the Subsidiaries as of the date thereof, and each of such
statements of operations, owner’s net investment and cash flows fairly presents
in all material respects the combined results of operations, owner’s net
investment and cash flows of the Companies and the Subsidiaries for the period
indicated, all in accordance with GAAP consistently applied throughout the
period indicated, except that the unaudited financial statements remain subject
to normal year-end adjustments and do not contain footnotes and similar
disclosures otherwise required to be in conformity with GAAP. Except as set
forth in Section 2.7 of the Seller Disclosure Letter, none of the Companies or
their respective Subsidiaries has, since December 31, 2006, paid or declared (or
taken any action in furtherance of or related to) any dividend or otherwise made
any distribution to its shareholders.
          Section 2.8 Absence of Undisclosed Liabilities. Except for liabilities
and obligations (a) incurred in the ordinary course of business and consistent
with past practice between December 31, 2006 and the Closing or (b) otherwise
disclosed in the Seller Disclosure Letter or contemplated by this Agreement, at
the Closing, none of the Companies nor any of their respective Subsidiaries will
have any liabilities or obligations (whether accrued, absolute, contingent,
unasserted or otherwise) of a nature that would be required to be reflected or
reserved against in a combined balance sheet of the Companies and such
Subsidiaries prepared in accordance with GAAP in excess of $10,000,000 in the
aggregate.
          Section 2.9 Absence of Certain Changes. Since December 31, 2006,
(a) there have been no facts, changes or occurrences that, individually or in
the aggregate, have had, or would reasonably be expected to have, a Business
Material Adverse Effect, and (b) the Business has been conducted in the ordinary
course consistent with past practice.

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          Section 2.10 Litigation. Section 2.10 of the Seller Disclosure Letter
sets forth a list as of the date hereof of each pending claim, action, suit,
proceeding (“Proceeding”) or, to the knowledge of the Sellers, governmental
investigation pending or, to the knowledge of the Sellers, threatened against
any Seller, any Company or any Subsidiary of a Company by or before any
Governmental Entity that (a) seeks damages, fines or penalties in excess of
$100,000 for any individual Proceeding or governmental investigation or in
excess of $500,000 in the aggregate for any related Proceedings or governmental
investigations, (b) seeks any material injunctive relief or (c) relates to any
of the transactions contemplated by this Agreement. None of the Proceedings or
governmental investigations listed in Section 2.10 of the Seller Disclosure
Letter would, if adversely determined, individually or in the aggregate, have a
Business Material Adverse Effect or adversely affect the ability of the Sellers
to consummate the transactions contemplated by this Agreement. None of the
Sellers, the Companies or the Subsidiaries of the Companies is in default under
or violation of any outstanding injunction, judgment, order, decree, ruling or
award that would reasonably be expected to have a Business Material Adverse
Effect.
          Section 2.11 Compliance with Law. The Business is being and has been
conducted in compliance in all material respects with all applicable Laws and
all applicable orders, writs, injunctions and decrees of any Governmental
Entity.
          Section 2.12 Employee Benefit Plans.
          (a) Section 2.12 of the Seller Disclosure Letter sets forth, as of the
date of this Agreement, and the Sellers have delivered or made available to the
Buyer true and complete copies of, all deferred compensation, pension,
profit-sharing and retirement plans and all material employment, bonus,
retention bonus, success bonus, severance, change in control and other material
employee benefit plans, programs, arrangements and agreements maintained or with
respect to which contributions are made by, any Company, or any such plans,
programs, arrangements and agreements of PII or any of its affiliates (other
than the Companies and their Subsidiaries) under which any of the Companies may
have any liability or obligation to contribute, or under which employees of any
of the Companies or their Subsidiaries hold or are entitled to receive
compensation or benefits (collectively, the “Plans”).
          (b) All Plans and their related trusts have been and are maintained in
accordance with their terms and in compliance with applicable Law in all
material respects. None of the Companies or their Subsidiaries have any
commitment or obligation to establish or adopt any new or additional Plans or to
increase the benefits under any existing Plan.
          (c) None of any Company, any Subsidiary of any Company or any entity
that is required to be treated as a single employer together with any Company or
any Subsidiary of any Company under Section 414 of the Code sponsors, maintains
or has any liability or obligation with respect to any “employee pension benefit
plan” (within the meaning of Section 3(2) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”)) subject to Title IV of ERISA or
Section 412 of the Code that is reasonably likely to result in a material
liability to any Company or any of Subsidiary of a Company.

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          (d) Except as set forth in Section 2.12(d) of the Seller Disclosure
Letter and except as required by applicable Law, no employee of any of the
Companies or their Subsidiaries is entitled to any severance, separation, change
of control, termination or bonus payment or other increased or additional
compensation or benefits as a result of any of the transactions contemplated by
this Agreement (alone or in combination with any other event) or in connection
with the termination of such employee’s employment on or after the Closing. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby and thereby (alone or in combination with any
other event) and compliance by any of the Companies and any of their
Subsidiaries with the provisions hereof do not and will not require the funding
of, or require an increase in the cost of, or give rise to any other obligation
of any Company or any of its Subsidiaries under, any Plan and will not result in
any breach or violation of, or default under, or limit any Company’s or any
Subsidiary’s ability to amend, modify or terminate any Plan.
          Section 2.13 Employees; Labor and Employment Matters. As of the date
hereof, there are no (i) collective bargaining agreements or other labor
agreements relating to any Company or any Subsidiary of any Company or covering
any employee of any Company or any Subsidiary of any Company to which any
Company or any Subsidiary of any Company is a party or by which it is bound;
(ii) unfair labor practice complaints against any Company or any Subsidiary of
any Company pending (or, to the knowledge of the Sellers, threatened) before any
Governmental Entity with respect to the Business; (iii) ongoing labor strikes,
work stoppages or lockouts affecting any Company or any Subsidiary of any
Company; (iv) material labor grievances pending against any Company or any
Subsidiary of any Company; or (v) orders, judgments, writs, injunctions or
decrees specifically applicable to any Company or any Subsidiary or, other than
employment Contracts set forth in Section 2.5 of the Seller Disclosure Letter
and customer Contracts, Contracts to which any Company or any of the
Subsidiaries is a party that in any way limits or restricts the termination of
any of their employees. The Companies and their Subsidiaries are in compliance
in all material respects with all applicable labor, housing, educational
cooperation, unemployment insurance, health and safety, social security and
related regulations.
          Section 2.14 Taxes.
          (a) With respect to each Company and its Subsidiaries, (i) all
material returns, reports and forms with respect to Taxes (as defined in
Section 4.7(j) of this Agreement) (collectively, “Tax Returns”) required to be
filed on or before the Closing Date have been or will be timely filed in
accordance with any applicable Laws, (ii) all such Tax Returns as filed were
complete and accurate in all material respects and (iii) all Taxes due on such
Tax Returns have been or will be timely paid in full or have been or will be
reserved for on the balance sheets included in the Financial Statements.
          (b) With respect to each Company and its Subsidiaries, (i) there is no
material action, suit, proceeding, audit, written claim or assessment pending or
proposed with respect to Taxes or with respect to any Tax Return, (ii) there are
no waivers or extensions of any applicable statute of limitations for the
assessment or collection of Taxes with respect to any Tax Return that remain in
effect, (iii) there is full compliance in all material respects with all
requirements for the withholding and payment over of any Taxes required to be
withheld and paid over with

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respect to payments to employees or other persons, (iv) there has not been a
request made to change a method of accounting for Tax purposes that would have
an effect on the Taxes of the Company or its Subsidiaries following the Closing,
(v) the Companies and/ or their Subsidiaries have not extended or waived the
statute of limitations on any federal or any significant provincial Tax Return
that remains open at the date hereof, (vi) all Taxes which the Companies and or
the Subsidiaries are required by Law to withhold or collect have been duly
withheld or collected, and have been timely paid over to the appropriate
Governmental Entities to the extent due and payable, (vii) there is no
investigation, examination or audit currently pending or threatened, regarding
any Taxes relating to the Companies and/ or their Subsidiaries, (viii) there is
no request for rulings or determination letters with respect to the Companies
and/ or their Subsidiaries, (ix) there are no Tax sharing agreements or
arrangements to which the Companies or the Subsidiaries are now a party and
(x) there are no material Liens for Taxes upon the assets of any Company or any
Subsidiary of any Company, except for Liens for Taxes not yet due and payable or
Liens for Taxes being contested in good faith through appropriate proceedings.
          (c) PII has treated, in its most recent filings with the U.S. Internal
Revenue Service, each of the Companies and its Subsidiaries as a corporation for
U.S. federal tax purposes.
          Section 2.15 Title, Ownership and Related Matters.
          (a) Except for cash, accounts receivable and working capital items
distributable by a Company and its Subsidiaries pursuant to Section 1.10(a),
each Company and its Subsidiaries have, free and clear of all Liens, other than
Permitted Liens, good title to, or rights by license, lease or other agreement
to use, all material properties and assets (or rights thereto) primarily used or
held for use in the conduct of the Business as currently conducted. This
Section 2.15(a) does not relate to real property (which is subject to
Section 2.15(b) below) or Rigs or E&P Equipment (which are subject to
Section 2.16). As used in this Agreement, “Permitted Liens” means (a) statutory
Liens for current Taxes not yet due and payable or being contested in good faith
by appropriate proceedings; (b) mechanics’, carriers’, workers’, repairers’ and
other similar Liens imposed by applicable Law arising or incurred in the
ordinary course of business consistent with past practices for obligations that
are not overdue or that are being contested in good faith by appropriate
proceedings; (c) other Liens that do not, and if foreclosed or otherwise
executed would not, materially interfere with the conduct of the Business;
(d) Liens on leases of real property arising from the provisions of such leases,
including any agreements and/or conditions imposed on the issuance of land use
permits, zoning, business licenses, use permits or other entitlements of various
types issued by any Governmental Entity, necessary or beneficial to the
continued use and occupancy of such real property or the continuation of the
Business; (e) pledges or deposits made in the ordinary course of business
consistent with past practices in connection with workers’ compensation,
unemployment insurance and other social security or similar legislation;
(f) deposits to secure the performance of bids, contracts, leases, statutory
obligations, surety and appeal bonds, performance bonds and other obligations of
a like nature incurred in the ordinary course of business consistent with past
practices; (g) zoning regulations and restrictive covenants and easements of
record that do not detract in any material respect from the value of real
property and do not materially and adversely affect, impair or interfere with
the use of any property affected thereby; (h) public utility easements of
record, in customary form, to serve real property; (i) landlords’ Liens in favor
of landlords under the

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Leases; (j) mortgages, deeds of trust and other security instruments, and ground
leases or underlying leases covering the title, interest or estate of
third-party landlords with respect to the real property subject to leases under
which any Company leases real property and to which such leases are subordinate;
(k) any other Liens, easements, rights-of-way, restrictions, rights, leases and
other encumbrances affecting title thereto, whether or not of record, which do
not, and if foreclosed or otherwise executed would not, materially detract from
the value of or materially interfere with the use and operation of the assets of
the Companies and their Subsidiaries, taken as a whole; and (l) Liens, if any,
created or permitted to be imposed by the Buyer.
          (b) Each of the Companies and their respective Subsidiaries has valid
and marketable title to each parcel of real property owned in fee by such
Company or Subsidiary (the “Owned Property”), free and clear of all Liens other
than Permitted Liens. Section 2.15(b) of the Seller Disclosure Letter sets forth
a complete list of all leases, subleases and other agreements under which any of
the Companies or their respective Subsidiaries uses or occupies or has the right
to use or occupy any real property that involve lease payments in excess of
$50,000 per month and are not terminable by such Company or Subsidiary that is a
party thereto by notice of not more than 90 days (the “Leases”; the property
governed by such Leases, together with the Owned Property, is referred to herein
as the “Real Property”). Each of the Companies and their respective Subsidiaries
has a good and valid leasehold interest in each parcel of Real Property leased
by it pursuant to the Leases, free and clear of all Liens other than Permitted
Liens.
          (c) The properties and assets owned, leased or used by the Companies
and their Subsidiaries, together with the rights and services to be provided by
PII or any of its affiliates to the Buyer, the Companies or any of their
respective Subsidiaries under the Transition Services Agreement, will be
sufficient to conduct the Business immediately following the Closing in
substantially the same manner as currently conducted.
          Section 2.16 Rigs and E&P Equipment.
          (a) A listing of all the rigs owned or leased by the Companies and
their Subsidiaries as of the date hereof (the “Rigs”), and for each Rig whether
it is owned or leased and whether it has operated under contract at any time
since July 1, 2006, is set forth in Section 2.16(a) of the Seller Disclosure
Letter. The Companies or their Subsidiaries have good title to, or rights by
license, lease or other agreement to use, the Rigs, free and clear of all Liens
other than Permitted Liens. The maintenance records related to the Rigs included
in the “data room” prepared in connection with the transactions contemplated
hereby are true and complete in all material respects as of the respective dates
set forth therein. The Rigs in the aggregate are in sufficiently good working
order (ordinary wear and tear excepted) to conduct the Business as currently
conducted. The Sellers have no plans for the retirement or material write-down
in the value of any Rig. EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 2.16(a),
NO OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THOSE OF VALUE, PHYSICAL
CONDITION, PERFORMANCE, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE,
SHALL EXTEND TO THE RIGS.
          (b) A true and complete listing of all material equipment used
primarily in the E&P Services Business as of the date hereof is set forth in
Section 2.16(b) of the Seller

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Disclosure Letter (the “E&P Equipment”). The E&P Equipment in the aggregate is
in sufficiently good working order (ordinary wear and tear excepted) to conduct
the Business as currently conducted. The Sellers have no plans for the
retirement or material write-down in the value of any E&P Equipment with a
replacement value of greater than $500,000. EXCEPT AS EXPRESSLY SET FORTH IN
THIS SECTION 2.16(b), NO OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THOSE
OF VALUE, PHYSICAL CONDITION, PERFORMANCE, MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, SHALL EXTEND TO THE E&P EQUIPMENT.
          Section 2.17 Environmental Matters. Except as have not had, and would
not reasonably be expected to have, a Business Material Adverse Effect:
     (a) The operations of the Companies and their Subsidiaries are and during
the relevant statute of limitations period have been in compliance with all
applicable Environmental Laws in the respective jurisdictions in which they
operate;
     (b) The Companies and their Subsidiaries have obtained and are in
compliance with all permits, licenses and other authorizations required under
applicable Environmental Laws (“Environmental Permits”) for the continued
operations of the Business, all Environmental Permits are valid and in good
standing, and none of the Companies nor any of their respective Subsidiaries has
received notice of any actual or potential change in the status or terms and
conditions of any Environmental Permit;
     (c) None of the Companies nor any of their respective Subsidiaries is
subject to any outstanding orders, suits, demands, directives, claims, liens,
investigations or proceedings by any Governmental Entity or any person
respecting (A) Environmental Laws, (B) Remedial Action or (C) any Release or
threatened Release of, or exposure to, a Hazardous Substance (“Environmental
Claims”) and, to the knowledge of the Sellers, no such Environmental Claims are
threatened;
     (d) None of the Companies nor any of their respective Subsidiaries has
received any written communication alleging, with respect to any such entity, a
violation of or liability under any Environmental Law; and
     (e) There has been no Release or threatened Release of Hazardous Substances
at any location that could reasonably be expected to (i) require any Remedial
Action by any of the Companies or their Subsidiaries pursuant to any
Environmental Law or (ii) form the basis of any Environmental Claim against any
of the Companies or their Subsidiaries.
     For purposes of this Agreement:
     (A) “Environment” means (i) land, including surface land, sub-surface
strata, sea bed and river bed under water (as defined in clause (ii)) and
natural structures; (ii) water, including coastal and inland water, surface
waters, and ground waters; (iii) air; and (iv) human health;

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     (B) “Environmental Law” means any Law, to the extent applicable to the
person or properties in the context of which the term is used, regulating or
prohibiting Releases into any part of the Environment, or pertaining to the
protection of natural resources, the Environment or human health, as such laws
have been and may be amended or supplemented;
     (C) “Hazardous Substance” means petroleum or petroleum products,
radioactive material or wastes, asbestos in any form, urea formaldehyde foam
insulation, polychlorinated biphenyls, and any other chemical, material,
substance or waste that, in relevant form or concentration, is prohibited,
limited or regulated pursuant to Environmental Law;
     (D) “Release” means any release, spill, effluent, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into or through the Environment, or at, into, onto, through or out of
any property currently or formerly owned, operated, leased or used by the
applicable party; and
     (E) “Remedial Action” means any and all actions to (i) clean up, remove,
treat, or in any other way ameliorate or address any Hazardous Substances in the
Environment; (ii) prevent the Release or threat of Release, or minimize the
further Release, of any Hazardous Substance so it does not endanger or threaten
to endanger human health or the Environment; or (iii) perform pre-remedial
studies and investigations or post-remedial monitoring and care pertaining or
relating to a Release.
          Section 2.18 Insurance. The Companies and their Subsidiaries maintain
policies of fire and casualty, liability and other forms of insurance in such
amounts, with such deductibles and against such risks and losses as are, in the
judgment of the Companies and their Subsidiaries, reasonable for the business
and assets of the Companies and their Subsidiaries, when considered in
conjunction with PII’s total business operations and self insurance practices.
Section 2.18 of the Seller Disclosure Letter sets forth a list of all policies
of insurance maintained, owned or held by the Sellers or their affiliates on the
date of this Agreement with respect to the Business, any Company, any Subsidiary
of a Company and their respective assets and properties. Except as would not
reasonably be expected to have a Business Material Adverse Effect, all such
policies are in full force and effect, all premiums due and payable thereon have
been paid (other than retroactive or retrospective premium adjustments that are
not yet, but may be, required to be paid with respect to any period ending prior
to the Closing Date), and no notice of cancellation or termination has been
received with respect to any such policy which has not been replaced on
substantially similar terms prior to the date of such cancellation. The Sellers
shall keep or cause such insurance or comparable insurance to be kept in full
force and effect through the Closing Date. The Sellers have complied in all
material respects with each of such insurance policies and have not failed to
give any notice or present any claim thereunder in a due and timely manner.
          Section 2.19 Brokers; Finders and Fees. Neither the Sellers nor any
Company or Subsidiary of a Company has engaged any investment banker, agent,
broker or finder in connection with this Agreement or the transactions
contemplated by this Agreement the fees of which will be paid by any Company or
any of its Subsidiaries after the Closing or by the Buyer.

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Except as set forth in Section 2.19 of the Seller Disclosure Letter, none of the
Sellers, any affiliate thereof, any Company or any Subsidiary thereof has agreed
to pay or cause to be paid to any employee, officer or director of the Sellers,
any affiliate, any Company or any Subsidiary thereof any fee or other amount in
connection with this Agreement or the transactions contemplated by this
Agreement, other than any amounts solely payable by the Sellers or any affiliate
of the Sellers (other than the Companies and their Subsidiaries).
          Section 2.20 Receivables. The accounts receivable shown in the
Financial Statements, subject to changes in the ordinary course of business from
the date of the Financial Statements to the Closing Date, constitute all of the
accounts receivable of the Business and represent bona fide sales actually made
on or prior to such date in the ordinary course of the Business and consistent
with past practice. Since June 30, 2007, there have not been any material
write-offs as uncollectible of any customer accounts receivable of the Companies
and their Subsidiaries, except for write-offs in the ordinary course of the
Business and consistent with past practice.
          Section 2.21 Permits. As of the date hereof, except as would not
reasonably be expected to have a Business Material Adverse Effect: (i) each of
the Companies and their respective Subsidiaries is in possession of all
certificates, licenses, permits, authorizations and approvals of any
Governmental Entity required to conduct its business as currently conducted (the
“Permits”) and such Company or Subsidiary has complied with the terms and
conditions thereof; (ii) during the past three years, none of the Sellers, the
Companies and the Subsidiaries of any Company has received notice of any suit,
action or proceeding relating to the revocation or modification of any such
Permits, and (iii) none of the Permits will be subject to suspension,
modification, revocation or nonrenewal as a result of the execution and delivery
of this Agreement or the consummation of the transactions contemplated by this
Agreement. The Companies and their Subsidiaries possess all material Permits to
own or hold under lease and operate their respective assets and to conduct the
Business as currently conducted.
          Section 2.22 Powers of Attorney; Officers and Directors. Section 2.22
of the Seller Disclosure Letter sets forth as of the date hereof (i) a true and
correct list of all powers of attorney granted by the Companies and their
Subsidiaries since January 1, 2002 and all persons authorized to act thereunder
and (ii) a true and correct list of all officers and directors of the Companies
and their Subsidiaries.
          Section 2.23 Suppliers. Between June 30, 2007 and the date of this
Agreement, none of the Companies or their Subsidiaries has entered into or made
any Contract for the purchase of any material amount of merchandise other than
in the ordinary course of business consistent with past practice. Except for the
suppliers named in Section 2.23 of the Seller Disclosure Letter, none of the
Companies or their Subsidiaries has any supplier (other than the Sellers, their
affiliates, another Company or a Subsidiary of a Company) from whom was
purchased more than 5% of the total amount of goods and services which were
purchased by the Companies and their Subsidiaries, taken as a whole, during the
year ended December 31, 2006. Since June 30, 2007, none of the suppliers named
in Section 2.23 of the Seller Disclosure Letter has delivered to any Company or
any Subsidiary of any Company written notice of cancellation or termination of
its relationship with such Company or Subsidiary.

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          Section 2.24 Customers. Except for the customers named in Section 2.24
of the Seller Disclosure Letter, none of the Companies or their Subsidiaries has
any customer (other than another Company or a Subsidiary) to whom was made more
than 5% of the total sales made by the Companies and their Subsidiaries, taken
as a whole, during the year ended December 31, 2006. Since June 30, 2007, none
of the customers named in Section 2.24 of the Seller Disclosure Letter has
delivered to any Company or any Subsidiary of any Company written notice of
cancellation or termination of its relationship with such Company or Subsidiary.
          Section 2.25 Intellectual Property.
          (a) Section 2.25(a) of the Seller Disclosure Letter sets forth a true
and complete list of all material patents (including all reissues, divisions,
continuations and extensions thereof), published patent applications, trademark
registrations, trademark applications, service mark registrations, service mark
applications, registered trade names, registered business names, copyright
registrations, and any license to any of the foregoing, but excluding the Seller
Trademarks and Logos, owned, used, filed by or licensed to any Company or any
Subsidiary and material to the Business (collectively, “Business Intellectual
Property”). To the knowledge of the Sellers, the Business Intellectual Property
and the Technology (as defined below) represent all the material intellectual
property necessary for the operation of the Business. To the knowledge of the
Sellers, (i) a Company or a Subsidiary of a Company is the sole and exclusive
owner of, or the Companies and their Subsidiaries have a valid and enforceable
right to use, without payment to any other person, all the Business Intellectual
Property, and (ii) during the past three years, none of the Sellers, the
Companies and the Subsidiaries has received any written or oral communication
from any person asserting any ownership interest in any Business Intellectual
Property.
          (b) None of the Sellers, the Companies and the Subsidiaries of the
Companies has granted any license of any kind relating to any Business
Intellectual Property or the marketing or distribution thereof. None of the
Sellers, the Companies and such Subsidiaries is bound by or a party to any
option, license or similar Contract relating to the Business Intellectual
Property owned by any other person for the use of such Business Intellectual
Property in the conduct of the Business of the Companies and the Subsidiaries,
except for so-called “shrink-wrap” license agreements relating to computer
software licensed to a Company or a Subsidiary in the ordinary course of
business. To the knowledge of the Sellers, the conduct of the Business of the
Companies and their Subsidiaries as presently conducted does not violate,
conflict with or infringe in any material respect the intellectual property of
any other person. (i) No claims are pending or, to the knowledge of the Sellers,
threatened, against any Company or any Subsidiary of a Company by any person
with respect to the ownership, validity, enforceability, effectiveness or use in
the Business of the Companies and their Subsidiaries of any Business
Intellectual Property and (ii) to the knowledge of the Sellers, during the past
three years none of the Sellers, the Companies and the Subsidiaries of the
Companies has received any written or oral communication alleging that any
Company or any such Subsidiary violated any rights relating to intellectual
property of any person.
          (c) To the knowledge of the Sellers, all trade secrets, confidential
information, inventions, know-how, formulae, processes, procedures, research
records, records of inventions, test information, market surveys and marketing
know-how of the Companies and their

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Subsidiaries that is material to the Business (the “Technology”) has been
maintained in confidence in accordance with protection procedures customarily
used in the industry to protect rights of like importance.
          Section 2.26 Representations of the Sellers Refer to the Business.
Except as expressly set forth herein, all representations and warranties of the
Sellers herein relate only to the Companies, their respective Subsidiaries, the
Business and the employees of the Business and not to any other business, assets
or employees of the Sellers.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
          The Buyer hereby represents and warrants to each of the Sellers as
follows:
          Section 3.1 Organization; Etc. The Buyer (a) is a corporation duly
organized, validly existing and in good standing under the laws of Bermuda,
(b) has all requisite corporate power and authority and possesses all
governmental franchises, licenses, permits, authorizations and approvals
necessary to own, lease and operate its properties and assets and to carry on
its business substantially as now being conducted, and (c) is duly qualified and
in good standing to do business in each jurisdiction in which the nature of its
business or the ownership, operation or leasing of its properties makes such
qualification necessary, except where the failure to be so organized, existing
and in good standing, to have such power or authority or to be so qualified
would not, individually or in the aggregate, have a Buyer Material Adverse
Effect (as defined below). As used in this Agreement, the term “Buyer Material
Adverse Effect” shall mean an event, change or circumstance that would adversely
affect the ability of the Buyer to consummate the transactions contemplated by
this Agreement. The Buyer has delivered or made available to the Sellers true
and complete copies of its corporate charter and bylaws (or equivalent governing
documents), in each case as amended through the date of this Agreement.
          Section 3.2 Authority Relative to this Agreement. The Buyer has the
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated by this Agreement. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
by this Agreement have been duly and validly authorized by all requisite
corporate action on the part of the Buyer. This Agreement has been duly and
validly executed and delivered by the Buyer and, assuming this Agreement has
been duly authorized, executed and delivered by the Sellers, constitutes a valid
and binding agreement of the Buyer, enforceable against the Buyer in accordance
with its terms, except that (a) such enforcement may be subject to any
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
transfer or other laws, now or hereafter in effect, relating to or limiting
creditors’ rights generally and (b) enforcement of this Agreement, including,
among other things, the remedy of specific performance and injunctive and other
forms of equitable relief, may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
          Section 3.3 Consents and Approvals; No Violations. Except for
applicable requirements of Antitrust Regulations, neither the execution and
delivery of this Agreement by

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the Buyer nor the consummation by the Buyer of the transactions contemplated by
this Agreement will (a) conflict with or result in any breach of any provision
of the corporate charter, bylaws or equivalent governing documents of the Buyer
or any of its Subsidiaries, (b) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation or acceleration) under, or
give rise to a loss of a material benefit under, or result in the creation of
any Lien upon the properties or assets of the Buyer or any of its Subsidiaries
under, or require any consent under, any Contract to which the Buyer or any of
its Subsidiaries is a party or by which any of them or any of their respective
properties or assets are bound, (c) violate any Laws applicable to the Buyer,
any of its Subsidiaries or any of their respective properties or assets, or
(d) require any filing, declaration or registration with, or the obtaining of
any permit, authorization, license, order, consent or approval of, any
Governmental Entity, except in the case of clauses (b), (c) and (d) of this
Section 3.3 for any such violations, breaches, defaults, rights of termination,
cancellation or acceleration or requirements that, individually or in the
aggregate, would not have a Buyer Material Adverse Effect, or that become
applicable as a result of the business or activities in which the Sellers are or
propose to be engaged or as a result of any acts or omissions by, or the status
of or any facts pertaining to, the Sellers.
          Section 3.4 Acquisition of Shares for Investment. The Buyer is
acquiring the Shares for investment and not with a view toward, or for sale in
connection with, any public distribution thereof, nor with any present intention
of distributing or selling such Shares. The Buyer agrees that the Shares may not
be sold, transferred, offered for sale, pledged, hypothecated or otherwise
disposed of without registration under the Securities Act of 1933, as amended,
and any applicable state securities laws, except under an exemption from such
registration under such Act and such laws.
          Section 3.5 Availability of Funds. The Buyer has delivered to the
Sellers true and complete copies of an executed debt commitment letter from
Citigroup Global Markets Inc. (the “Financing Commitment”), pursuant to which
Citigroup Global Markets Inc. has agreed to provide or cause to be provided an
aggregate of $600,000,000 at Closing (the “Financing”). The commitments
contained in the Financing Commitment have not been withdrawn or rescinded in
any respect as of the date of this Agreement. As of the date of this Agreement,
no event has occurred which, with or without notice, lapse of time or both,
would constitute a default or breach on the part of the Buyer or its affiliates
under any term or condition of the Financing Commitment. There are no conditions
precedent relating to the funding of the full amount of the Financing, other
than as set forth in the Financing Commitment. As of the date of this Agreement,
the Buyer has no reason to believe that any of the conditions relating to the
funding of the full amount of the Financing will not be satisfied on or prior to
the Closing Date. At the Closing, the Financing, together with the Buyer’s
immediately available funds, in cash, will be sufficient to provide the
Companies and their respective Subsidiaries with sufficient working capital and
to pay any other amounts payable under this Agreement and to effect the
transactions contemplated by this Agreement, all without any third-party consent
or approval required.
          Section 3.6 Litigation. There is no Proceeding or, to the knowledge of
the Buyer, governmental investigation pending or, to the knowledge of the Buyer,
threatened against

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the Buyer or any of its Subsidiaries by or before any Governmental Entity that,
individually or in the aggregate, would have a Buyer Material Adverse Effect.
          Section 3.7 Balance Sheet. The Buyer has delivered to the Sellers true
and complete copies of the audited consolidated balance sheets of the Buyer and
its Subsidiaries as of December 31, 2006 and 2005. Except as disclosed in the
notes thereto, each of such balance sheets fairly presents in all material
respects the consolidated financial position of the Buyer and its Subsidiaries
as of the date thereof, all in accordance with GAAP consistently applied
throughout the period indicated.
          Section 3.8 Investigation by the Buyer; No Reliance; Sellers’
Liability. The Buyer has conducted its own independent review and analysis of
the business and prospects of the Companies, their respective Subsidiaries and
the Business. In entering into this Agreement, the Buyer has relied solely upon
its own investigation and analysis and the specific representations and
warranties of the Sellers set forth in Article II of this Agreement, and the
Buyer:
     (a) acknowledges and agrees that it has not been induced by and has not
relied upon any representations, warranties or statements, whether express or
implied, made by the Sellers or any of their respective directors, officers,
shareholders, employees, affiliates, controlling persons, agents, advisors or
representatives that are not expressly set forth in Article II of this
Agreement, whether or not any such representations, warranties or statements
were made in writing or orally;
     (b) acknowledges and agrees that none of the Sellers, the Companies or any
of their respective directors, officers, shareholders, employees, affiliates,
controlling persons, agents, advisors or representatives makes or has made any
representation or warranty, either express or implied, as to the accuracy or
completeness of any of the information provided or made available to the Buyer
or its directors, officers, employees, affiliates, controlling persons, agents
or representatives, including any information, document, or material provided or
made available, or statements made, to the Buyer (including its directors,
officers, employees, affiliates, controlling persons, advisors, agents or
representatives) in “data rooms,” management presentations or supplemental due
diligence information provided to the Buyer (including its directors, officers,
employees, affiliates, controlling persons, advisors, agents or representatives)
in connection with discussions or access to management of the Business or in any
other form in expectation of the transactions contemplated by this Agreement
(collectively, “Due Diligence Information”);
     (c) acknowledges and agrees that (i) the Due Diligence Information includes
certain projections, estimates and other forecasts, and certain business plan
information, (ii) there are uncertainties inherent in attempting to make such
projections, estimates and other forecasts and plans and the Buyer is familiar
with such uncertainties, and (iii) the Buyer is taking full responsibility for
making its own evaluation of the adequacy and accuracy of all projections,
estimates and other forecasts and plans so furnished to it and any use of or
reliance by the Buyer on such projections, estimates and other forecasts and
plans shall be at its sole risk; and

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     (d) agrees, to the fullest extent permitted by law, that none of the
Sellers, the Companies or any of their respective directors, officers,
shareholders, employees, affiliates, controlling persons, agents, advisors or
representatives shall have any liability or responsibility whatsoever to the
Buyer or its directors, officers, shareholders, employees, affiliates,
controlling persons, agents, advisors or representatives on any basis (including
in contract or tort, under federal or state securities laws or otherwise)
resulting from the distribution to the Buyer, or the Buyer’s use of, any Due
Diligence Information, except that the foregoing limitations shall not apply to
the extent the Sellers make the specific representations and warranties set
forth in Article II of this Agreement, but always subject to the limitations and
restrictions contained in this Agreement.
          Section 3.9 Brokers; Finders and Fees. Neither the Buyer nor any of
its affiliates has engaged any investment banker, agent, broker or finder in
connection with this Agreement or the transactions contemplated by this
Agreement the fees of which will be paid by any Seller, any Company or any of
their respective Subsidiaries.
ARTICLE IV
COVENANTS OF THE PARTIES
          Section 4.1 Conduct of Business. During the period from the date of
this Agreement to the Closing Date, except as otherwise contemplated by this
Agreement or set forth in Section 4.1 of the Seller Disclosure Letter or the
transactions contemplated by this Agreement or consented to by the Buyer in
writing, which consent shall not be unreasonably withheld, the Sellers shall and
shall cause each of the Companies and their respective Subsidiaries:
          (a) to use its commercially reasonable efforts to conduct the Business
in the ordinary course consistent with past practice and, to the extent
consistent therewith, use all commercially reasonable efforts to keep intact
their respective businesses, keep available the services of their current
employees and preserve their relationships with customers, suppliers, licensors,
licensees, distributors and others with whom they deal; and
          (b) not to:
          (i) in the case of the Companies and their respective Subsidiaries
only, amend its certificate of incorporation or by-laws;
          (ii) sell, transfer, lease or otherwise dispose of any properties or
assets material to the Business, except obsolete or excess equipment sold in the
ordinary course of business and consistent with past practice;
          (iii) in the case of the Companies and their respective Subsidiaries
only, make or pay any loans, advances (other than advances in the ordinary
course of business or advances to the Sellers, the Companies or any of their
respective Subsidiaries) or capital contributions to, or investments in, any
other person (other than the Companies or any of their respective Subsidiaries);

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          (iv) terminate or materially amend any Contracts material to the
Business, except in the ordinary course of business and consistent with past
practice;
          (v) enter into any new Contract material to the Business other than
drilling or workover Contracts, customer Contracts, service Contracts, product
purchase Contracts or renewals of existing Contracts, in each case in the
ordinary course of business, or otherwise in the ordinary course of business;
          (vi) in the case of the Companies and their respective Subsidiaries
only, enter into any written employment agreement with any employee or increase
in any manner the compensation of any of the officers or other employees of any
Company or any of its Subsidiaries, except for such increases as are required by
applicable Law, rule or regulation or are granted in the ordinary course of
business consistent with past practices (which shall include normal periodic
performance reviews and related compensation and benefit increases);
          (vii) in the case of the Companies and their respective Subsidiaries
only, adopt, grant, amend, extend or increase the rate or terms of any bonus,
insurance, pension or other employee benefit plan, payment or arrangement made
to, for or with any such officers or employees of any Company or any of its
Subsidiaries, except, in each case, for increases required by any applicable
Law, rule or regulation and except increases in the ordinary course of business
consistent with past practice;
          (viii) in the case of the Companies and the Subsidiaries only, make
any change in any of their respective present accounting methods and practices,
except as required by changes in GAAP;
          (ix) in the case of the Companies and their respective Subsidiaries
only, incur or assume any liabilities, obligations or indebtedness for borrowed
money, issue any debt securities or assume, guarantee or endorse any such
liabilities, obligations or indebtedness of any persons other than in the
ordinary course of business and consistent with past practice; provided,
however, that in no event shall any Company or any of its Subsidiaries incur or
assume any long-term indebtedness for borrowed money;
          (x) in the case of the Companies and their respective Subsidiaries
only, (x) declare or pay any dividend or make any other distribution to its
stockholders, whether or not upon or in respect of any shares of its capital
stock, (y) redeem or otherwise acquire any shares of its capital stock or
(z) issue any capital stock or any option, warrant or right relating thereto or
any securities convertible into or exchangeable for any shares of capital stock,
in each case except as contemplated by Section 1.9 or Section 1.10(a) and
dividends, distributions, redemptions, acquisitions and issuances solely
involving the Companies and their Subsidiaries;
          (xi) in the case of the Companies and their respective Subsidiaries
only, permit, allow or suffer any of its material assets to become subjected to
any Lien other than a Permitted Lien;

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          (xii) in the case of the Companies and their respective Subsidiaries
only, cancel any material indebtedness (individually or in the aggregate) or
waive any claims or rights of substantial value;
          (xiii) in the case of the Companies only, materially defer maintenance
and other capital expenditures;
          (xiv) in the case of the Companies and their respective Subsidiaries
only, enter into any lease of real property involving lease payments in excess
of $10,000 per month, except any renewals of existing leases in the ordinary
course of business consistent with past practice;
          (xv) in the case of the Companies and their respective Subsidiaries
only, acquire by merging or consolidating with, or by purchasing a substantial
portion of the assets of, or by any other manner, any business or any
corporation, partnership, association or other business organization or division
thereof or, except in the ordinary course of business consistent with past
practice, otherwise acquire any assets (other than inventory) that are material;
          (xvi) take any action (other than matters outside of the control of
the Sellers and the Companies) that would result in (a) any of the conditions
set forth in Section 5.3(a) and (b) not to be satisfied or (b) any of the
representations and warranties of the Sellers becoming untrue or incorrect in
any material respect; or
          (xvii) authorize any of, or commit or agree to take, whether in
writing or otherwise, to do any of, the foregoing actions.
          Section 4.2 Access to Information; Confidentiality.
          (a) From the date of this Agreement to the Closing, except for any
information that is subject to attorney-client privilege or other privilege from
disclosure or subject to a confidentiality agreement with a third party, the
Sellers will and will cause the Companies to (i) give the Buyer and its
authorized representatives access to all books, records, personnel, accountants,
offices and other facilities and properties of the Companies and their
respective Subsidiaries or otherwise relating to the Business, (ii) permit the
Buyer to make such copies and inspections thereof as the Buyer may reasonably
request, and (iii) cause the Sellers’ and Companies’ officers, as applicable, to
furnish the Buyer with such financial and operating data and other information
with respect to the Business as the Buyer may from time to time reasonably
request; provided, however, that any such access shall be conducted at the
Buyer’s risk and expense, at a reasonable time, under the supervision of the
Sellers’ or the Companies’ personnel and in such a manner as to maintain the
confidentiality of this Agreement and the transactions contemplated by this
Agreement and not to interfere unreasonably with the operation of the businesses
of the Sellers, the Companies or any of their respective Subsidiaries.
          (b) All such information and access shall be subject to the terms and
conditions of the Confidentiality Agreement between the Buyer and PII dated
April 23, 2007 (the “Confidentiality Agreement”). Notwithstanding anything to
the contrary contained in this Agreement, none of the Sellers, the Companies or
any of their affiliates will have any obligation

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to make available or provide to the Buyer or its representatives a copy of any
consolidated, combined or unitary Tax Return filed by the Sellers or any of
their affiliates (excluding the Companies), or any related material.
          (c) From and after the Closing, the Buyer will and will cause the
Companies and their Subsidiaries to (i) give the Sellers and their authorized
representatives reasonable access to all books, records, personnel, accountants,
offices and other facilities and properties of the Companies and their
respective Subsidiaries or otherwise relating to the Business, (ii) permit the
Sellers to make such copies and inspections thereof as the Sellers may
reasonably request, and (iii) cause the Buyer’s and the Companies’ officers, as
applicable, to furnish the Sellers with such financial and operating data and
other information with respect to the Business as the Buyer may from time to
time reasonably request, in each case (A) to comply with reporting, disclosure,
filing or other requirements imposed on the Sellers (including under applicable
securities Laws) by a Governmental Entity having jurisdiction over the Sellers,
(B) for use in any Proceeding or in order to satisfy audit, accounting, claims,
regulatory, litigation, subpoena or other similar requirements or (C) to comply
with the obligations of the Sellers under this Agreement or the Transition
Services Agreement, as the case may be; provided, however, that in the event
that the Buyer determines that any such provision of access or information could
be commercially detrimental, violate any Law or agreement, or waive any
attorney-client privilege, the parties shall take all reasonable measures to
permit the compliance with such obligations in a manner that avoids any such
harm or consequence.
          (d) The Sellers acknowledge that, subsequent to the Closing, they may
be furnished with, receive or otherwise have access to, proprietary information
of the Buyer, the Companies or their Subsidiaries (collectively, “Buyer
Proprietary Information”). Subsequent to the Closing, the Sellers shall not
disclose, and shall maintain the confidentiality of, all Buyer Proprietary
Information. The Sellers shall use at least the same degree of care to safeguard
and to prevent the disclosure, publication, dissemination, destruction, loss or
alteration of the Buyer Proprietary Information as they employ to avoid
unauthorized disclosure, publication, dissemination, destruction, loss or
alteration of their own information (or information of its customers) of a
similar nature, but in no case less than reasonable care. Except as expressly
provided herein, the Sellers shall not (A) use any Buyer Proprietary Information
in any manner, (B) make any copies of any Buyer Proprietary Information,
(C) acquire any right in or assert any Lien against any Buyer Proprietary
Information, (D) sell, assign, transfer, lease, license or otherwise dispose of
any Buyer Proprietary Information to third parties or commercially exploit any
Buyer Proprietary Information, including through derivative works, or (E) refuse
for any reason (including a default or breach of this Agreement by Buyer) to
promptly provide any tangible embodiments of the Buyer Proprietary Information
(including copies thereof) to Buyer if requested to do so, in the form
reasonably requested. Except as may otherwise be provided in Section 4.2(c) or
Section 4.7, none of the Buyer, the Companies and their Subsidiaries or any of
their affiliates shall be obligated to disclose any Buyer Proprietary
Information to the Sellers, and nothing contained in this Agreement shall be
construed as granting to or conferring on the Sellers, expressly or impliedly,
any right, title, interest or license to any Buyer Proprietary Information or
any components thereof.
          (e) It is understood that the Sellers shall not have any liability or
obligation hereunder with respect to any Buyer Proprietary Information that
(i) at the time of disclosure or

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thereafter is generally available to and known by the public (other than as a
result of a disclosure or other act or omission by the Sellers or any of their
affiliates or any of their respective representatives after the Closing), or
(ii) the Sellers or any of their affiliates or any of their respective
representatives are legally required (by deposition, interrogatory, request for
documents, subpoena, civil investigative demand or similar process or by Law,
governmental Proceeding, stock exchange rule or court order) to disclose. In the
event that the Sellers or any of their affiliates or their representatives are
requested or legally required (by deposition, interrogatory, request for
documents, subpoena, civil investigative demand or similar process or by Law,
governmental Proceeding, stock exchange rule or court order) to disclose any of
the Buyer Proprietary Information, the Sellers shall provide the Buyer with
prompt written notice of such request or requirement (together with a copy of
the material proposed to be disclosed) prior to any disclosure thereof, and the
Sellers shall cooperate with the Buyer so that the Buyer may seek a protective
order or other appropriate remedy or, if it so elects, waive compliance with
this Section 4.2. In the event that such protective order or other remedy is not
obtained, or the Buyer waives compliance with the provisions hereof, the Sellers
or any of their affiliates or their representatives, as the case may be, may
disclose only that portion of the Buyer Proprietary Information that is legally
required to be disclosed, provided that the Buyer has been given a reasonable
opportunity to review the specifics of such disclosure before it is made. The
Sellers shall exercise all reasonable efforts to obtain assurance that
confidential treatment will be accorded the information so disclosed. Nothing
provided in this Section 4.2 shall limit PII from disclosing financial and other
information with respect to the Companies or the Business in satisfaction of its
obligations as a publicly traded, exchange-listed company.
          (f) The Sellers will promptly request all persons who have heretofore
executed a confidentiality agreement in connection with such persons’
consideration of acquiring, directly or indirectly, the Business to return or
destroy all confidential information heretofore furnished to such persons by or
on behalf of the Sellers, or any affiliate thereof, and will, or will cause any
affiliate a party thereto to, enforce all obligations of such persons and all
rights and remedies of the Sellers or such affiliate under such confidentiality
agreements.
     Section 4.3 Consents; Cooperation.
          (a) Each of the Sellers and the Buyer shall cooperate, and use its
commercially reasonable efforts, to make all filings and obtain all licenses,
permits, consents, approvals, authorizations, qualifications and orders of
Governmental Entities and other third parties necessary in connection with the
transactions contemplated by this Agreement.
          (b) The Sellers and the Buyer shall file with any applicable
Governmental Entity, all filings, reports, information and documentation
required in connection with the consummation of the transactions contemplated by
this Agreement. The Sellers and the Buyer shall furnish to each other’s counsel
such necessary information and reasonable assistance as the other party may
request in connection with its preparation of any such filing or submission. The
Sellers and the Buyer shall consult with each other as to the appropriate time
of making such filings and submissions and shall use commercially reasonable
efforts to make such filings and submissions at the agreed upon time in
observance of any requirements as to time of filing under applicable Law. The
Sellers and the Buyer acknowledge and agree that, within seven days after the
Closing, they will each file with the applicable Argentine Governmental Entities
the filings

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required under the Argentine Antitrust Regulations. Each of the Sellers and the
Buyer shall furnish to the other such necessary information and reasonable
assistance as the other may request in order to effect such filings in a timely
manner.
          (c) The Sellers and the Buyer shall keep each other apprised of the
status of any communications with, and any inquiries or requests for additional
information from, Governmental Entities and shall comply promptly with any such
inquiry or request.
          (d) The Sellers and the Buyer shall use their commercially reasonable
efforts to vigorously defend, lift, mitigate and rescind the effect of any
litigation or administrative proceeding adversely affecting this Agreement or
the transactions contemplated by this Agreement, including promptly appealing
any adverse court or administrative order or injunction.
          (e) Notwithstanding the foregoing, prior to the Closing, without the
prior written consent of PII, the Buyer shall not, and shall cause its
affiliates not to, make any filing with, or seek to obtain any license, permit,
consent, approval, authorization, qualification or order of, any Governmental
Entity in connection with the transactions contemplated hereby.
          Section 4.4 Consultation. In connection with the continuing operation
of the Business between the date of this Agreement and the Closing, the Sellers
shall use commercially reasonable efforts to consult with the representatives
for the Buyer, as may from time to time be reasonably requested by the Buyer, to
report material operational developments and the general status of ongoing
operations pursuant to procedures reasonably requested by Buyer or such
representatives. The Sellers acknowledge that any such consultation shall not
constitute a waiver by the Buyer of any rights it may have under this Agreement,
and that Buyer shall not have any liability or responsibility for any actions of
any Seller or any of their respective officers or directors with respect to
matters that are the subject of such consultations unless Buyer expressly
consents to such action in writing.
          Section 4.5 Commercially Reasonable Efforts. Each of the Sellers and
the Buyer shall cooperate, and use its commercially reasonable efforts to take,
or cause to be taken, all reasonable action, and to do, or cause to be done, all
things reasonably necessary, proper or advisable under applicable Laws to
consummate the transactions contemplated by this Agreement. The Buyer shall not
take any action (other than matters outside of the control of the Buyer) that
would result in (a) any of the conditions set forth in Section 5.2(a) and
(b) not to be satisfied or (b) any of the representations and warranties of the
Buyer becoming untrue or incorrect in any material respect.
          Section 4.6 Public Announcements. Prior to but not after the Closing,
except as set forth herein or otherwise agreed to by the parties, the parties
shall not issue any report, statement or press release or otherwise make any
public statements with respect to this Agreement or the transactions
contemplated by this Agreement, except as in the reasonable judgment of the
party may be required by Law or in connection with its obligations as a
publicly-held, exchange-listed company, in which case the parties will consult
with each other as to the language of any such report, statement or press
release.

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          Section 4.7 Tax Matters.
          (a) Indemnification.
          (i) Sellers’ Indemnification of the Buyer. The Sellers shall jointly
and severally indemnify the Buyer against (i) any Taxes imposed on any Company
or any of its Subsidiaries with respect to any taxable period, or portion
thereof, ending on or before the Closing Date, including Taxes payable in
connection with the Proceedings listed in Section 2.10 and Section 2.14 of the
Seller Disclosure Letter, (ii) any Taxes that may be imposed on any Company or
any of its Subsidiaries as a result of being a member of a consolidated,
combined, unitary or similar group of corporations or other taxpayers at any
time prior to the Closing, and (iii) any Taxes of any other person that may be
imposed upon any Company or any of its Subsidiaries as a result of being a
successor to such other person for Tax purposes prior to the Closing or as a
result of any Company or any of its Subsidiaries being a party to a Tax sharing,
Tax allocation or similar agreement prior to the Closing, but, in each case, not
including (A) any Transfer Taxes for which the Buyer is liable under Section
4.7(e) of this Agreement and (B) any Taxes, or portions thereof, resulting from
a change in Law occurring after the Closing Date.
          (ii) Buyer’s Indemnification of the Sellers. The Buyer shall indemnify
the Sellers from, against and in respect of any liability of the Sellers or
their respective Subsidiaries for (i) any Taxes imposed on any Company or any of
its Subsidiaries with respect to any taxable period, or portion thereof,
beginning after the Closing Date, (ii) any Taxes that may be imposed on any
Company or any of its Subsidiaries as a result of being a member of a
consolidated, combined, unitary or similar group of corporations or other
taxpayers at any time after the Closing, (iii) any Taxes of any other person
that may be imposed upon any Company or any of its Subsidiaries as a result of
being a successor to such other person for Tax purposes after the Closing or as
a result of any Company or any of its Subsidiaries being a party to a Tax
sharing, Tax allocation or similar agreement after the Closing, (iv) any
Transfer Taxes for which the Buyer is liable under Section 4.7(e) of this
Agreement, (v) any Taxes, or portions thereof, resulting from a change in Law
occurring after the Closing Date and imposed on any Company or any of its
Subsidiaries with respect to any taxable period, or portion thereof, ending on
or before the Closing Date and (vi) any Tax liability resulting from an election
by the Buyer under Section 338 of the Code.
          (iii) Section 338 and Similar Elections. Not later than 30 business
days after the Closing Date Schedule and Closing Statement become final and
binding on the parties pursuant to Section 1.10(b) of this Agreement, the
Sellers shall deliver to the Buyer a schedule (the “Section 338 Schedule”) of
the estimated Foreign Tax Credit Loss Amount with respect to each Company and
each of its direct and indirect subsidiaries eligible to make an election under
Section 338(g) of the Code with respect to the purchase or deemed purchase of
its shares (in each case, a “Target”). The “Foreign Tax Credit Loss Amount” with
respect to any Target shall be equal to the excess of (A) the foreign income
taxes that would have been deemed paid by PII and its subsidiaries under
Section 902 of the Code (whether by reason of Sections 301, 367(b), 960, 964(e)
or 1248 or other relevant provisions of the Code) as a result of the
transactions contemplated by Section 1.1 of this Agreement or dividends paid by
PII’s subsidiaries in the taxable year that includes the Closing Date had no
such election been made with respect to the purchase of shares of Target over
(B) the foreign income taxes that will be deemed paid by PII and its
subsidiaries under Section 902 of the Code (whether by reason of Sections 301,
367(b), 960, 964(e) or 1248 or other relevant provisions of the Code) as a
result of the transactions contemplated by

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Section 1.1 of this Agreement or dividends paid by PII’s subsidiaries in the
taxable year that includes the Closing Date taking into account such election
made by Buyer. The Sellers shall also include on the Section 338 Schedule an
estimate of the taxable periods in which each portion of the lost tax benefit
corresponding to the aggregate Foreign Tax Credit Loss Amount with respect to
all Targets that would have been realized by PII and its subsidiaries had no
election under Section 338(g) of the Code been made with respect to any Target.
Not later than 5 business days after the Buyer or any of its affiliates has made
an election under Section 338(g) of the Code with respect to any Target (an
“Electing Target”), the Buyer shall notify the Sellers of such election. The
Buyer shall pay to PII, for the account and as agent of each of the Sellers,
that portion of the lost tax benefit corresponding to the aggregate Foreign Tax
Credit Loss Amount with respect to all Electing Targets that would have been
realized by PII and its subsidiaries in each taxable period had no elections
under Section 338(g) of the Code been made with respect to the Electing Targets.
The payment with respect to each taxable period shall be due within 30 business
days after PII notifies the Buyer of the amount with respect to such taxable
period, but in no case earlier than the date that PII or its successor files the
federal income tax return for such taxable period. If as a result of an
adjustment in a Tax Audit (as defined below) or an amended Tax Return the
amounts otherwise computed above would be different, then the Buyer and PII will
make payments between them to reflect the consequences of such adjustment.
          (b) Allocation of Taxes and Earnings and Profits. To the extent
permitted by Law or administrative practice, the taxable years of the Companies
and their Subsidiaries shall end at the close of business on the Closing Date.
Whenever it is necessary to determine the liability for Taxes, or the earnings
and profits, of any Company or any of its Subsidiaries for a portion of a
taxable year or period that begins before and ends after the Closing Date, the
determination of the Taxes or the earnings and profits for the portion of the
year or period ending on, and the portion of the year or period beginning after,
the Closing Date shall be determined by assuming that the taxable year or period
ended at the close of business on the Closing Date, except that (A) exemptions,
allowances or deductions that are calculated on an annual basis and Taxes
imposed on the ownership, use or operation of real or personal property shall be
prorated on the basis of the number of days in the annual period elapsed through
the Closing Date as compared to the number of days in the annual period elapsing
after the Closing Date, and (B) any transaction that would be treated under the
principles of Treasury Regulation Section 1.338-1(d) as occurring at the
beginning of the day following the transaction shall be treated as occurring
after the Closing Date. Whenever it is necessary to determine for any taxable
period the amount of Taxes, or portions thereof, resulting from a change in Law
occurring after the Closing Date, such amount shall equal the amount by which
the Taxes imposed for such taxable period determined taking into account such
change in Law exceed the Taxes that would have been imposed for such taxable
period absent such change in Law.

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          (c) Tax Returns. Except as provided in Section 4.7(e):
               (i) The Sellers shall prepare, or cause to be prepared, and file
or cause to be filed when due Tax Returns with respect to the Companies and
their Subsidiaries for any taxable period ending on or before the Closing Date.
The Sellers shall bear all costs of preparing such Tax Returns and shall timely
pay any Taxes due on such Tax Returns with respect to the Companies and their
Subsidiaries for any taxable period ending on or before the Closing Date.
               (ii) The Buyer shall prepare, or cause to be prepared, and file
or cause to be filed when due all other Tax Returns with respect to the
Companies and their Subsidiaries. The Buyer shall bear all costs of preparing
such Tax Returns and shall timely pay any Taxes due on such Tax Returns with
respect to the Companies and their Subsidiaries for any taxable period ending
after the Closing Date.
               (iii) If either the Buyer or the Sellers may be liable for any
portion of the Tax payable in connection with any Tax Return to be filed by the
other, the party responsible under this Agreement for filing such return (the
“Preparer”) shall prepare and deliver to the other party (the “Payor”) a copy of
such return and any schedules, work papers and other documentation then
available that are relevant to the preparation of the portion of such return for
which the Payor is or may be liable under this Agreement not later than 45 days
before the Due Date (as defined in Section 4.7(j) of this Agreement). The
Preparer shall not file such return until the earlier of either the receipt of
written notice from the Payor indicating the Payor’s consent thereto, or the Due
Date.
               (iv) The Buyer shall provide the Sellers with copies of all Tax
Returns filed, or caused to be filed, by the Buyer with respect to the Companies
and their Subsidiaries for periods beginning on or before the Closing Date and
ending after the Closing, and the Sellers shall provide the Buyer with copies of
all Tax Returns filed, or caused to be filed, after the Closing Date by the
Sellers with respect to the Companies and their Subsidiaries. The Sellers shall
reimburse the Buyer for all Taxes allocated to the portion of the taxable period
that ends on or before the Closing Date on such Tax Returns, to the extent such
Taxes have not been previously paid by the Sellers, any Company, or any
Subsidiary of a Company to the relevant taxing authority.
               (v) The Payor shall have the option of providing to the Preparer,
at any time at least 15 days prior to the Due Date, written instructions as to
how the Payor wants any, or all, of the items for which it may be liable
reflected on such Tax Return. The Preparer shall, in preparing such return,
cause the items for which the Payor is liable under this Agreement to be
reflected in accordance with the Payor’s instructions (unless, in the opinion of
a partner of an internationally recognized law or accounting firm retained by
the Preparer, complying with the Payor’s instructions would likely subject the
Preparer to any criminal penalty or a non-criminal penalty in an amount equal to
at least 20% of the Tax on any such item) and, in the absence of having received
such instructions, in accordance with past practice. The Payor shall pay to the
Preparer the amount of the Taxes with respect to such Tax Return for which the
Payor is liable not later than five days before such Tax Return is due.

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               (vi) If the Preparer fails to satisfy its obligations under this
Section 4.7(c), the Payor shall have no obligation to indemnify the Preparer for
any incremental Taxes that are reflected on any such return as a result of such
failure or any related Loss, and shall retain any and all remedies it may
otherwise have that arise out of such failure.
          (d) Contest Provisions.
               (i) Notification of Contests. After the date hereof, each of the
Buyer, on the one hand, and the Sellers, on the other hand (the “Recipient”),
shall notify the Sellers or the Buyer, as the case may be, in writing within
five days of receipt by the Recipient of written notice of any pending or
threatened audits, adjustments, assessments or other proceedings (a “Tax Audit”)
that may affect the liability for Taxes of such other party. If the Recipient
fails to give such prompt notice to the other party, it shall not be entitled to
indemnification for any Taxes arising in connection with such Tax Audit if such
failure to give notice adversely affects the other party’s right to participate
in the Tax Audit.
               (ii) Which Party Controls.
          (A) Sellers’ Items. If such Tax Audit relates to any Taxes for which
the Sellers are liable under this Agreement, the Sellers shall, at their
expense, control the defense and settlement of such Tax Audit.
          (B) Buyer’s Items. If such Tax Audit relates to any Taxes for which
the Buyer is liable under this Agreement, the Buyer shall, at its expense,
control the defense and settlement of such Tax Audit.
          (C) Combined and Mixed Items. If such Tax Audit relates to Taxes for
which both the Sellers and the Buyer are liable under this Agreement, to the
extent practicable such Tax Items (as defined in Section 4.7(j)) will be
distinguished and each party will control the defense and settlement of those
Taxes for which it is so liable.
          (D) Inseparable Items. If such Tax Audit relates to a taxable period,
or portion thereof, beginning before and ending after the Closing Date and any
Tax Item cannot be identified as being a liability of only one party or cannot
be separated from a Tax Item for which the other party is liable, the Sellers
shall control the defense and settlement of the Tax Audit, provided that the
Sellers defend the items as reported on the relevant Tax Return, otherwise the
Buyer shall control the defense and settlement of the Tax Audit.
          (e) Transfer Taxes. All excise, sales, use, value added, transfer
(including real property transfer or gains), stamp, documentary, filing,
recordation and other similar taxes, levies, assessments, customs, duties,
imposts, charges or fees, together with any interest, additions or penalties
with respect thereto and any interest in respect of such additions or penalties,
resulting directly from the sale and transfer by the Sellers to the Buyer of the
Shares (the “Transfer Taxes”), shall be borne fully by the Buyer.
Notwithstanding Section 4.7(c) of this Agreement, which shall not apply to Tax
Returns relating to Transfer Taxes, any Tax

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Returns that must be filed in connection with Transfer Taxes shall be prepared
and filed when due by the party primarily or customarily responsible under the
applicable local Law for filing such Tax Returns, and such party will use its
commercially reasonable efforts to provide such Tax Returns to the other party
at least 10 days prior to the Due Date for such Tax Returns. If, pursuant to the
immediately preceding sentence, a Seller is required to file a Tax Return
relating to Transfer Taxes, the Buyer shall pay to such Seller the Transfer
Taxes shown as due on such Tax Return no later than five days after a Seller has
provided a copy of such Tax Return to the Buyer.
          (f) Buyer’s Claiming, Receiving or Using of Refunds, Overpayments and
Prepayments. If, after the Closing, the Buyer, any Company or any of its
Subsidiaries (A) receives any refund (whether by payment, offset, credit or
otherwise) or (B) utilizes the benefit of any overpayment of Taxes (including
any overpayment that results in a value-added Tax asset or credit) that, in each
case (A) and (B), (x) relates to Taxes for which the Sellers are liable or paid
by the Sellers, any Company or any of its Subsidiaries with respect to a taxable
period, or portion thereof, ending on or before the Closing Date, or (y) is the
subject of indemnification by the Sellers under this Agreement, the Buyer shall
promptly transfer, or cause to be transferred, to the Sellers the entire amount
of the refund or overpayment (including interest) received or utilized by the
Buyer, any Company or any of its Subsidiaries. For purposes of the immediately
preceding sentence, a prepayment on or before the Closing Date of Taxes for
which the Buyer is liable shall be treated in the same manner as an overpayment
of Taxes for which the Sellers are liable. The Buyer agrees to notify the
Sellers within 15 days following the discovery of a right to claim any such
refund or overpayment and the receipt of any such refund or utilization of any
such overpayment. The Buyer agrees to claim any such refund or to utilize any
such overpayment as soon as possible and to furnish to the Sellers all
information, records and assistance necessary to verify the amount of the refund
or overpayment.
          (g) In the event the liability of or with respect to Taxes for which
the Sellers are liable hereunder is increased and the particular item that
produced such increase results, directly or indirectly, in an actual or
potential reduction in the liability of the Buyer or its affiliates for Taxes (a
“Buyer Tax Benefit”), the Buyer shall be liable for and shall pay to the Sellers
the amount of such Buyer Tax Benefit; provided that such amount shall not exceed
the amount of the additional Taxes payable by the Sellers resulting from such
item (a “Seller Tax Detriment”). Such payment shall be made within 30 days after
the later of (i) the due date (without regard to waivers or extensions) of the
Tax Return for the Tax period during which the Buyer Tax Benefit was realized or
(ii) the date notice is given by the Sellers to the Buyer with respect to such
payment. In the event of the later adjustment, in whole or in part, of any item
that produced the Buyer Tax Benefit or the Seller Tax Detriment, the Sellers
shall refund to the Buyer any amount previously paid under this Section 4.7(g)
that is determined not to be owing as a result of such adjustment, or the Buyer
shall further remit to the Sellers the amount of any increase in the amount
required to be paid under this Section 4.7(g) as a result of such adjustment.
The parties shall promptly notify each other of any Buyer Tax Benefit or Seller
Tax Detriment and provide details supporting the calculation of the amount
thereof. The amount of any Buyer Tax Benefit or Seller Tax Detriment shall be
calculated by comparing the Taxes payable without the adjustment in question
with the Taxes payable after taking into account such adjustment, without regard
to loss carryforwards or carrybacks.

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          (h) Post-Closing Actions That Affect the Sellers’ Liability for Taxes.
Neither the Buyer, any Company nor any affiliate of any of them shall take any
action (including amending any Tax Return) on or after the Closing Date that
could materially increase the Sellers’ (or Sellers’ shareholders’) liability for
Taxes (including any liability of the Sellers to indemnify the Buyer for Taxes
under this Agreement and any liability of Sellers or their direct or indirect
shareholders for Taxes imposed pursuant to Sections 951 through 964 of the
Code), without the prior written consent of PII.
          (i) Assistance and Cooperation. The parties agree that, after the
Closing Date:
          (i) Each party shall assist (and cause its affiliates to assist) the
other party in preparing any Tax Returns that such other party is responsible
for preparing and filing;
          (ii) The parties shall cooperate fully in preparing for any Tax
Audits, or disputes with taxing authorities, relating to any Tax Returns or
Taxes of any Company or any of its Subsidiaries, including providing access, as
reasonably needed, to relevant books and records relating to Taxes at issue;
          (iii) The parties shall make available to each other and to any taxing
authority as reasonably requested all relevant books and records relating to
Taxes;
          (iv) Each party shall promptly furnish the other party with copies of
all relevant correspondence received from any taxing authority in connection
with any Tax Audit or information request relating to Taxes for which such other
party may have an indemnification obligation under this Agreement; and
          (v) Except as otherwise provided in this Agreement, the party
requesting assistance or cooperation shall bear the other party’s out-of-pocket
expenses in complying with such request to the extent that those expenses are
attributable to fees and other costs of unaffiliated third-party service
providers.
          (j) For purposes of this Agreement, “Tax” or “Taxes” shall mean taxes
of any kind, levies or other like assessments, customs, duties, imposts, charges
or fees, including income taxes, gross receipts, ad valorem, value added,
excise, real or property, asset, sales, use, license, payroll, transaction,
capital, net worth, withholding, estimated, social security, utility, workers’
compensation, severance, production, unemployment compensation, occupation,
premium, windfall profits, transfer and gains taxes or other governmental taxes
imposed or payable to the United States, or any state, county, local or foreign
government or subdivision or agency thereof, together with any interest,
penalties or additions with respect thereto and any interest in respect of such
additions or penalties; “Due Date” shall mean, with respect to any Tax Return,
the date such return is due to be filed (taking into account any valid
extensions); and “Tax Item” shall mean, with respect to Taxes, any item of
income, gain, deduction, loss or credit or other tax attribute.
          Section 4.8 Withholding Taxes. Any payments from the Buyer to the
Sellers hereunder shall be made free and clear of, and without deduction or
withholding for, any Taxes,

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unless such deduction or withholding is required by applicable Law. If the Buyer
is required by applicable Law to deduct or withhold Taxes from such payments,
then the Buyer shall pay, in addition to the amount otherwise due to Sellers
hereunder, such additional amount as is necessary to ensure that the net amount
actually paid to Sellers will equal the full amount Sellers would have received
had no such deduction or withholding been required.
          Section 4.9 Employees; Employee Benefits.
          (a) The Buyer shall be permitted to offer employment to any of the
employees of any subsidiary of PII (other than the Companies and their
Subsidiaries) who are identified in Section 4.9(a) of the Seller Disclosure
Letter (the “Operating Employees”), provided that the Buyer shall condition such
employment on the resignation of the Operating Employee from his or her employer
that is PII or any affiliate of PII so that the Operating Employee’s termination
of employment with PII or any affiliate of PII shall not give rise to any
benefit under any applicable severance plan. The Buyer shall indemnify and hold
harmless PII and its affiliates for severance or similar benefits made to any
Operating Employee who accepts employment with the Buyer effective as of the
Closing Date.
          (b) The Buyer agrees that, for a period beginning on the date of this
Agreement and ending on the third anniversary of the Closing Date, it will not,
and will cause any of its affiliates not to, directly or indirectly solicit the
employment of any of the employees of PII or its affiliates, other than the
Operating Employees and the employees of the Companies and their respective
Subsidiaries; provided, however, that a general advertisement or general
solicitation for potential employees shall not be considered a breach of this
Section 4.9(b), and a decision to hire any employee of PII or its affiliates who
applies in response to such solicitation shall not be considered a breach of
this Section 4.9(b).
          (c) On and after the Closing, until at least the first anniversary of
the Closing, the Buyer shall provide the employees and former employees of any
Company or any of its Subsidiaries and the Operating Employees who accept
employment with the Buyer (the employees of any Company or any of its
Subsidiaries and the Operating Employees who accept employment with the Buyer
are hereinafter collectively referred to as the “Affected Employees”) with
compensation and benefits substantially similar in the aggregate than those
provided by PII or the applicable affiliate of PII immediately prior to the
Closing Date.
          (d) If any Affected Employee becomes a participant in (i) any
“employee benefit plan,” as such term is defined in Section 3(3) of ERISA,
(ii) any plan that would be an employee benefit plan if it were subject to ERISA
or the Code, such as plans outside the jurisdiction of the United States,
(iii) any bonus, deferred compensation, excess benefit, or incentive
compensation plan, (iv) any supplemental unemployment, sick leave, vacation pay,
long-term disability, post-retirement medical or life insurance, and (v) any
other plan, program, policy, or arrangement providing benefits to employees
(collectively, “Benefit Plans”) of the Buyer or any of its affiliates (a “Buyer
Plan”), such employee shall be given credit under such Buyer Plan for all
service prior to the Closing Date with PII or the employer affiliate (to the
extent such credit was given by PII or the employer affiliate) and all service
prior to the time each employee becomes such a participant, for purposes of
eligibility and vesting and for all other purposes for which such service is
either taken into account or recognized (other than for

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purposes of benefit accrual under defined benefit plans); provided, however,
such service need not be credited to the extent it would result in a duplication
of benefits. The Buyer shall amend or cause to be amended any of the Buyer Plans
to the extent necessary to recognize all service of the Affected Employees as
required by this Section 4.9(d).
          (e) In the event that any person who is an employee of any Company or
any of its Subsidiaries immediately prior to the Closing is discharged by the
Buyer, any Company or such Subsidiary, or is deemed discharged or can bring a
claim of discharge, as of or after the Closing Date, then the Buyer shall be
responsible for any severance costs for such employee including (i) such
severance costs that become payable under applicable Law and (ii) costs as set
forth in Section 4.9(e) of the Seller Disclosure Letter. The Buyer shall be
responsible and assume all liability for all notices or payments due to any such
employees, and all notices, payments, fines or assessments due to any law
(including common law), statute or ordinance of any nation or state or any
regulation, policy, protocol, proclamation or executive order promulgated by any
union representing Affected Employees or any national, federal, regional, state,
local or other governmental agency, authority, administrative agency, regulatory
body, commission, instrumentality, court, official or arbitral tribunal having
governmental or quasi-governmental powers with respect to the employment,
discharge or layoff of employees by Buyer or any affiliate as of or after the
Closing, including the Worker Adjustment and Retraining Notification Act and any
rules or regulations as have been issued in connection with the foregoing.
          (f) If an Affected Employee is participating in a Benefit Plan
sponsored by PII or any of its subsidiaries that provides health benefits,
whether or not subject to U.S. Law, immediately prior to the Closing Date, the
Buyer agrees that, upon the Closing, such Affected Employee shall be immediately
eligible to participate, without any waiting time, in a Buyer Plan that provides
health benefits, and Buyer shall credit such Affected Employee under such Buyer
Plan, for the calendar year during which the Closing Date occurs, with the
deductibles, coinsurance and maximum out-of-pocket provisions and any other
applicable expenses already incurred during the portion of the year preceding
the Closing Date under the applicable Benefit Plan sponsored by PII or any of
its subsidiaries that provides health benefits. The Buyer shall be responsible
and assume all liability for obligations, if any, relating to post-retirement
welfare plans covering the Affected Employees or former employees of any Company
or any of its Subsidiaries, which obligation is summarized in Section 4.9(f) of
the Seller Disclosure Letter.
          (g) The Buyer acknowledges that, at the Closing, the participation by
each of the Companies and their respective Subsidiaries in all Benefit Plans not
sponsored or maintained solely by any of the Companies and such Subsidiaries
shall terminate, and the Buyer shall be solely responsible for providing any
successor or alternate plans.
          (h) The Buyer shall cause the Companies and their respective
Subsidiaries to honor any collective bargaining agreements identified on
Section 2.5 of the Seller Disclosure Letter.
          (i) From and after the Closing Date, the Buyer shall be responsible
for, and shall indemnify and hold harmless, the Sellers and their respective
officers, directors, employees, affiliates and agents and the fiduciaries
(including plan administrators) of the Benefit Plans, from

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and against, any and all claims, losses, damages, costs and expenses (including
attorneys’ fees and expenses) and other liabilities and obligations relating to
or arising out of (i) all compensation, salaries, commissions and vacation
entitlements accrued but unpaid as of the Closing and post-Closing bonuses due
to any Affected Employee, (ii) the liabilities assumed by the Buyer under this
Section 4.9 or any failure by the Buyer to comply with the provisions of this
Section 4.9, and (iii) any claims of, or damages or penalties sought by, any
Affected Employee, any national, federal, regional, state, local or other
governmental agency, authority, administrative agency, regulatory body,
commission, instrumentality, court, official or arbitral tribunal having
governmental or quasi-governmental powers on behalf of or concerning any
Affected Employee, or any union representing any Affected Employee, with respect
to any act or failure to act by the Buyer to the extent arising from the
employment, discharge, layoff or termination of any Affected Employee on or
after the Closing Date.
          Section 4.10 Supplemental Disclosure. The Sellers shall have the right
from time to time prior to the Closing to supplement or amend the Seller
Disclosure Letter with respect to any matter hereafter arising or discovered
that if existing or known at the date of this Agreement would have been required
to be set forth or described in such Seller Disclosure Letter. Any such
supplemental or amended disclosure will not be considered when determining
whether the condition set forth in Section 5.3(a) or any other condition to
Closing has been satisfied. Such supplemental or amended disclosure will,
however, for purposes of determining whether any Buyer Indemnitee is entitled to
indemnification pursuant to Section 7.2, be deemed to amend the Seller
Disclosure Letter to reflect the matters set forth in such disclosure and to
have been disclosed as of the date of this Agreement.
          Section 4.11 Advice of Changes. The Sellers, on the one hand, and the
Buyer, on the other hand, will give prompt notice to the other upon becoming
aware of (i) the occurrence, or failure to occur, of any event which would be
likely to cause any representation or warranty of such party contained in this
Agreement to be untrue or inaccurate in any material respect and (ii) any
failure on its part to comply with or satisfy in any material respect any
covenant, condition or agreement to be complied with or satisfied by it under
this Agreement on or prior to the Closing Date. Except as set forth in
Section 4.10 or Section 7.1, no notice pursuant to this Section 4.11 will affect
any representations or warranties, covenants, agreements, obligations or
conditions set forth herein or limit or otherwise affect any available remedies.
          Section 4.12 Performance Bonds. If any Seller or any of its affiliates
(other than any Company or any of its Subsidiaries) has posted a performance,
local import or other similar bond, letter of credit or other guarantee in
connection with the operation of the Business, the Buyer and such Seller shall
cooperate with each other in order (i) for such Seller or any such affiliate to
obtain the release of any such bond, letter of credit or guarantee and (ii) to
the extent required, for the Buyer to obtain a substitute bond, letter of credit
or guarantee or to assume such Seller’s or such affiliate’s existing bond,
letter of credit or guarantee. The Buyer shall reimburse such Seller for all
costs incurred by such Seller or any such affiliate as a result of such Seller’s
or such affiliate’s leaving a performance, local import or similar bond, letter
of credit or other guarantee in place after the Closing Date in order to permit
the Buyer to operate the Business after the Closing Date.

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          Section 4.13 Restricted Activities.
          (a) In consideration of the payment of the Purchase Price, and to
further induce the Buyer to enter into this Agreement, PII hereby agrees that,
for a period commencing on the Closing Date and continuing for a period of three
years from the Closing Date, neither PII nor any of its subsidiaries, during the
period an entity is a subsidiary, will directly or indirectly, either acting on
its own behalf or through or in connection with any person, (i) engage in,
invest in or derive any profit from Restricted Activities in the Territory (each
as defined below); (ii) solicit, recruit or hire any employee of the Companies
and their Subsidiaries; or (iii) solicit or encourage any employee of the
Company and such Subsidiaries to leave the employment of the Company and such
Subsidiaries; provided, however, that a general advertisement or general
solicitation for potential employees shall not be considered a breach of this
Section 4.13(a), and a decision to hire any employee of any Company or any such
Subsidiary who applies in response to such solicitation shall not be considered
a breach of this Section 4.13(a). Notwithstanding the foregoing, this
Section 4.13 shall not restrict: (i) the ownership by PII or any of its
subsidiaries of less than an aggregate of 20% of any class of stock of a person
engaged, directly or indirectly, in Restricted Activities within the Territory;
or (ii) the acquisition and continued ownership by PII or any of its
subsidiaries of any person that, prior to the acquisition thereof, is not an
affiliate of PII and that engages, directly or indirectly, in Restricted
Activities within the Territory (A) if such Restricted Activities within the
Territory account for less than 20% of such person’s consolidated annual
revenues for its most recently completed fiscal year or (B) if PII or such
subsidiary disposes of or agrees to dispose of or discontinues such person’s
business engaged in Restricted Activities within the Territory within one year
after the closing of such acquisition.
          (b) Each Seller acknowledges and agrees that the covenants and
restrictions contained in this Section 4.13 are an essential element of the
Buyer’s agreeing to acquire the Shares and pay the Purchase Price as set forth
herein, and that the Buyer would not have done so but for the agreement by PII
to comply with the terms and provisions of this Section 4.13.
          (c) Each Seller hereby agrees that the geographic and business scope
and the duration of the covenants and restrictions in this Section 4.13 are fair
and reasonable. However, if any provision of this Section 4.13 is held to be
invalid or unenforceable by reason of the geographic or business scope or
duration thereof, the court or other tribunal is hereby directed to construe and
enforce this Section 4.13 as if the geographic or business scope or the duration
or such provision has been more narrowly drawn as so not to be invalid or
unenforceable, and such invalidity or unenforceability shall not affect or
render invalid or unenforceable any other provision of this Agreement.
          (d) For purposes of this Section 4.13, (i) the term “Restricted
Activities” means the business of providing (x) services using land drilling or
land workover rigs or (y) pressure pumping, formation testing, underbalance
drilling, drilling fluids, directional drilling, fishing tools or production
services with respect to onshore oil and natural gas wells; and (ii) the term
“Territory” shall mean Mexico, Central America and South America.
          Section 4.14 Financing. The Buyer shall, and shall cause its
affiliates to, use their commercially reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary,
appropriate or advisable to arrange the Financing on the terms

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and conditions described in the Financing Commitment (provided that the Buyer
may replace or amend the Financing Commitment to add lenders, lead arrangers,
bookrunners, syndication agents or similar entities who had not executed the
Financing Commitments as of the date hereof, or otherwise replace or amend the
Financing Commitment so long as (a) after such actions, the Financing Commitment
does not include any additional conditions precedent that are not contained in
the Financing Commitment provided to the Sellers as of the date of this
Agreement, and (b) such actions are not reasonably likely to delay, or diminish
the likelihood of, the Buyer obtaining the Financing (clauses (a) and (b)
together being referred to as the “Financing Modification Requirements”; for
purposes of this Agreement, the term “Financing Commitment” shall be deemed to
include any such replacement or amended financing), including using commercially
reasonable efforts to (i) maintain in effect the Financing Commitment or any
Alternative Financing (as defined below), (ii) satisfy on a timely basis all
conditions applicable to the Buyer to obtaining the Financing set forth therein,
(iii) negotiate and enter into definitive agreements with respect thereto on the
terms and conditions contemplated by the Financing Commitment or any Alternative
Financing, and (iv) consummate the Financing on the terms and conditions
contemplated by the Financing Commitments or any Alternative Financing at or
prior to the Closing. In the event any portion of the Financing becomes
unavailable on the terms and conditions contemplated in the Financing
Commitment, the Buyer shall, and shall cause its affiliates to, use their
commercially reasonable efforts to arrange to obtain alternative financing from
alternative sources in an amount sufficient to consummate the transactions
contemplated by this Agreement on terms and conditions that are not materially
less beneficial to the Buyer than those contained in the Financing Commitment as
in effect on the date of this Agreement as determined in the reasonable good
faith judgment of the Buyer and consistent with the Financing Modification
Requirements (any such alternative financing actually obtained by the Buyer,
“Alternative Financing”) as promptly as practicable following the occurrence of
such event.
ARTICLE V
CONDITIONS TO CONSUMMATION OF THE PURCHASE
          Section 5.1 Conditions to Each Party’s Obligations to Consummate the
Purchase. The respective obligations of each party to consummate the
transactions contemplated by this Agreement are subject to the condition that,
after the date hereof and at or prior to the Closing Date, no statute, rule,
regulation, executive order, decree or injunction shall have been enacted,
entered, promulgated or enforced by any Governmental Entity that prohibits the
consummation of the Purchase.
          Section 5.2 Further Conditions to the Sellers’ Obligations. The
obligation of each of the Sellers to consummate the transactions contemplated by
this Agreement is further subject to satisfaction or waiver in writing at or
prior to the Closing Date of the following conditions:
     (a) The representations and warranties of the Buyer contained in
Article III of this Agreement shall be true and correct in all material respects
as of the date of this Agreement and at and as of the Closing Date as though
such representations and warranties were made at and as of such date (except for
representations and warranties

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that are as of a different date or period, which shall be true and correct in
all material respects as of such other date or period); and
     (b) The Buyer shall have performed and complied in all material respects
with all agreements and obligations required by this Agreement to be performed
or complied with by it on or prior to the Closing.
     Section 5.3 Further Conditions to the Buyer’s Obligations. The obligation
of the Buyer to consummate the transactions contemplated by this Agreement are
further subject to the satisfaction or waiver in writing at or prior to the
Closing Date of the following conditions:
     (a) The representations and warranties of the Sellers contained in
Article II of this Agreement shall be true and correct in all material respects
as of the date of this Agreement and at and as of the Closing Date as though
such representations and warranties were made at and as of such date (except for
representations and warranties that are as of a different date or period, which
shall be true and correct in all material respects as of such other date or
period);
     (b) The Sellers shall have performed and complied in all material respects
with all agreements and obligations required by this Agreement to be performed
or complied with by it on or prior to the Closing;
     (c) At any time after the date of this Agreement, there shall not have
occurred any facts, changes or occurrences that, individually or in the
aggregate, have had, or would reasonably be expected to have, a Business
Material Adverse Effect; and
     (d) The Sellers shall have obtained and furnished to the Buyer all
third-party consents listed in Section 2.6 of the Seller Disclosure Letter and
marked with an asterisk in form and substance reasonably satisfactory to the
Buyer.
     Section 5.4 Frustration of Closing Conditions. Neither the Buyer nor any
Seller may rely on the failure of any condition set forth in this Article V to
be satisfied if such failure was caused by such party’s failure to use its
commercially reasonable efforts to cause the Closing to occur as required by
Section 4.5.
ARTICLE VI
TERMINATION AND ABANDONMENT
          Section 6.1 Termination. This Agreement may be terminated and the
transactions contemplated by this Agreement may be abandoned at any time prior
to the Closing only:
     (a) by mutual written consent of PII and the Buyer;
     (b) by PII or the Buyer by giving written notice to the other party at any
time after October 9, 2007 if the Closing shall not have occurred by such date;

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     (c) by PII or the Buyer by giving written notice to the other party if a
Governmental Entity shall have issued an order, decree or ruling or taken any
other action permanently restraining, enjoining or otherwise prohibiting a
material portion of the transactions contemplated by this Agreement and such
order, decree, ruling or other action shall have become final and
non-appealable;
     (d) by PII, if the Buyer breaches or fails to perform its representations,
warranties or covenants contained in this Agreement, which breach or breaches or
failure or failures to perform (i) would, individually or in the aggregate, give
rise to the failure of a condition set forth in Section 5.2(a) or (b) and
(ii) cannot be cured or, if curable, is not or are not cured within 10 days
after written notice from PII; or
     (e) by the Buyer, if one or more of the Sellers breach or fail to perform
their representations, warranties or covenants contained in this Agreement,
which breach or breaches or failure or failures to perform (i) would,
individually or in the aggregate, give rise to the failure of a condition set
forth in Section 5.3(a) or (b) and (ii) cannot be cured or, if curable, is not
or are not cured within 10 days after written notice from the Buyer;
provided, however, that the party seeking termination pursuant to clause (b),
(d) or (e) is not then in breach of any of its representations, warranties,
covenants or agreements contained in this Agreement, which breaches would give
rise to the failure of a condition set forth in Section 5.2(a) or (b), if the
Buyer is then seeking termination, or Section 5.3(a) or (b), if PII is then
seeking termination.
          Section 6.2 Procedure for and Effect of Termination. In the event of
termination of this Agreement and abandonment of the transactions contemplated
by this Agreement by the parties under Section 6.1 of this Agreement, written
notice thereof shall be given by a party so terminating to the other party and
this Agreement shall forthwith terminate and shall become null and void and of
no further effect, and the transactions contemplated by this Agreement shall be
abandoned without further action by the Sellers or the Buyer. If this Agreement
is terminated under Section 6.1 of this Agreement:
     (a) each party shall redeliver all documents, work papers and other
materials of the other parties relating to the transactions contemplated by this
Agreement, whether obtained before or after the execution of this Agreement, to
the party furnishing the same, and all confidential information received by any
party hereto with respect to the other party shall be treated in accordance with
the Confidentiality Agreement and Section 4.2(b) of this Agreement;
     (b) all filings, applications and other submissions made pursuant hereto
shall, at the option of the Sellers, and to the extent practicable, be withdrawn
from the agency or other person to which made; and
     (c) there shall be no liability or obligation under this Agreement on the
part of the Sellers or the Buyer or any of their respective directors, officers,
employees, affiliates, controlling persons, agents or representatives, except
with respect to a breach of Section 3.5 of this Agreement and except that the
Sellers or the Buyer, as the case may

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be, may have liability to the other party if the basis of termination is a
willful, material breach by the Sellers or the Buyer, as the case may be, of one
or more of the provisions of this Agreement, and except that the obligations
provided for in Section 6.2, Section 8.6, Section 8.9 and Section 8.13 of this
Agreement shall survive any such termination.
ARTICLE VII
SURVIVAL AND INDEMNIFICATION
          Section 7.1 Survival Periods. All representations and warranties of
the parties contained in this Agreement shall survive the Closing for the
Survival Period (as defined below) but, except as provided in Section 6.2(c) of
this Agreement, shall not survive any termination of this Agreement. The
representations and warranties shall survive the Closing for the relevant period
(the “Survival Period”) determined as follows: (a) the representations and
warranties of the Sellers contained in Section 2.1, Section 2.2, Section 2.3 and
Section 2.4 of this Agreement and of the Buyer contained in Section 3.1,
Section 3.2, Section 3.3 and Section 3.4 of this Agreement shall survive the
Closing indefinitely; (b) the representations and warranties of the Sellers
contained in Section 2.12, Section 2.13, Section 2.14 and Section 2.17 shall
survive until the expiration of 90 days following the expiration of the
applicable statute of limitations or prescription period (after giving effect to
any waiver, mitigation or extension thereof); and (c) all other representations
and warranties of the Sellers contained in Article II of this Agreement and of
the Buyer contained in Article III of this Agreement shall survive until the
expiration of a period of 18 months following the Closing Date. The parties
agree that no claims or causes of action may be brought against the Sellers or
the Buyer based upon, directly or indirectly, any of the representations or
warranties contained in Articles II and III of this Agreement after the
applicable Survival Period or, except as provided in Section 6.2(c) of this
Agreement, any termination of this Agreement; provided that nothing herein shall
preclude Sellers or Buyer from bringing or pursuing claims after the end of the
applicable Survival Period if notice thereof is given to the other party before
the end of such Survival Period. This Section 7.1 shall not limit any covenant
or agreement of the parties, including the covenants and agreements set forth in
Section 4.7 and Section 4.9 of this Agreement. Except as expressly provided in
Section 4.10, any claim by an indemnified party for indemnification shall not be
adversely affected by any investigation by or opportunity to investigate
afforded to such party, nor shall such a claim be adversely affected by such
party’s knowledge on or before the Closing of any breach of the type specified
in Section 7.2(a)(i) or (ii) or Section 7.3(a)(i) or (ii) unless it shall be
determined by a final judgment of a Governmental Entity having jurisdiction over
such Proceeding that the party seeking indemnification had actual and express
knowledge of such breach on or before the Closing.
          Section 7.2 PII’s Agreement to Indemnify.
          (a) Upon the terms and subject to the conditions set forth in this
Agreement, from and after the Closing, PII shall indemnify and hold harmless the
Buyer and its directors, officers, employees, affiliates, controlling persons,
agents and representatives and their successors and assigns (collectively, the
“Buyer Indemnitees”) from and against all liability, demands, claims, actions or
causes of action, assessments, losses, damages, costs and expenses

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(including reasonable attorneys’ fees and expenses) (collectively, “Buyer
Damages”) asserted against or incurred by any Buyer Indemnitee to the extent
arising out of or resulting from:
          (i) a breach of any representation or warranty contained in Article II
of this Agreement when made or at and as of the Closing Date (or at and as of
such different date or period specified for such representation or warranty) as
though such representation and warranty were made at and as of the Closing Date
(or such different date or period);
          (ii) a breach of any covenant of any Sellers contained in this
Agreement in each case to the extent it relates to performance prior to the
Closing;
          (iii) a breach of any covenant of any Seller contained in this
Agreement in each case to the extent it relates to performance on or after the
Closing; and
          (iv) any financial advisory and finders’ fees incurred by reason of
any action taken by any Seller or otherwise arising out of the transactions
contemplated by this Agreement by any person claiming to have been engaged by
such Seller.
          (b) The obligation of PII to indemnify the Buyer Indemnitees under
Section 7.2(a)(i) and (ii) of this Agreement is subject to the following
limitations:
          (i) No indemnification shall be made by PII pursuant to
Section 7.2(a)(i) and (ii) unless the aggregate amount of Buyer Damages exceeds
$20,000,000 and, in such event, indemnification shall be made by PII only to the
extent that the aggregate amount of Buyer Damages exceed $20,000,000;
          (ii) In no event shall PII’s aggregate obligation to indemnify the
Buyer Indemnitees pursuant to Section 7.2(a)(i) and (ii) exceed $250,000,000 in
the aggregate;
          (iii) The limitations set forth in Section 7.2(b)(i) and (ii) do not
apply to any Buyer Damages to the extent arising out of or resulting from a
breach of any representation or warranty contained in Section 2.14 of this
Agreement or a breach of any covenant contained in Section 4.7 of this
Agreement;
          (iv) The amount of any Buyer Damages shall be reduced by any amount
actually received by a Buyer Indemnitee (including, for this purpose, each
Company and its Subsidiaries) with respect to such Buyer Damages under any
insurance coverage or for any other party alleged to be responsible for such
Buyer Damages. The Buyer Indemnitees shall use commercially reasonable efforts
to collect any amounts available under such insurance coverage and from such
other party alleged to have responsibility. If a Buyer Indemnitee actually
receives any amount under insurance coverage or from such other party with
respect to Buyer Damages at any time subsequent to any indemnification provided
by PII under this Section 7.2, then such Buyer Indemnitee shall promptly
reimburse PII for any payment made by PII in connection with providing such
indemnification up to such amount received by such Buyer Indemnitee; and

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          (v) PII shall be obligated to indemnify the Buyer Indemnitees pursuant
to Section 7.2(a)(i) only for those claims giving rise to Buyer Damages as to
which the Buyer Indemnitees have given PII written notice thereof prior to the
end of the Survival Period. Any written notice delivered by a Buyer Indemnitee
to PII with respect to Buyer Damages shall set forth with as much specificity as
is reasonably practicable the basis of the claim for Buyer Damages and, to the
extent reasonably practicable, a reasonable estimate of the amount of such
claim.
     Section 7.3 Buyer’s Agreement to Indemnify.
          (a) Upon the terms and subject to the conditions set forth in this
Agreement, from and after the Closing, the Buyer shall indemnify and hold
harmless the Sellers and their respective directors, officers, employees,
affiliates, controlling persons, agents and representatives and their successors
and assigns (collectively, the “Seller Indemnitees”) from and against all
liability, demands, claims, actions or causes of action, assessments, losses,
damages, costs and expenses (including reasonable attorneys’ fees and expenses)
(collectively, “Seller Damages”) asserted against or incurred by any Seller
Indemnitee to the extent arising out of or resulting from:
          (i) a breach of any representation or warranty contained in
Article III of this Agreement when made or at and as of the Closing Date (or at
and as of such different date or period specified for such representation or
warranty) as though such representation and warranty were made at and as of the
Closing Date (or such different date or period);
          (ii) a breach of any covenant of the Buyer contained in this Agreement
in each case to the extent it relates to performance prior to the Closing;
          (iii) a breach of any covenant of the Buyer contained in this
Agreement in each case to the extent it relates to performance on or after the
Closing; and
          (iv) any financial advisory and finders’ fees incurred by reason of
any action taken by the Buyer or otherwise arising out of the transactions
contemplated by this Agreement by any person claiming to have been engaged by
the Buyer.
          (b) The Buyer’s obligation to indemnify the Seller Indemnitees under
Section 7.3(a)(i) and (ii) of this Agreement is subject to the following
limitations:
          (i) No indemnification shall be made by the Buyer pursuant to
Section 7.3(a)(i) and (ii) unless the aggregate amount of Seller Damages exceeds
$20,000,000 and, in such event, indemnification shall be made by the Buyer only
to the extent that the aggregate amount of Seller Damages exceeds $20,000,000;
          (ii) In no event shall the Buyer’s aggregate obligation to indemnify
the Seller Indemnitees pursuant to Section 7.3(a)(i) and (ii) exceed
$250,000,000 in the aggregate;

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          (iii) The amount of any Seller Damages shall be reduced by any amount
actually received by a Seller Indemnitee with respect to such Seller Damages
under any insurance coverage or from any other party alleged to be responsible
for such Seller Damages. The Seller Indemnitees shall use commercially
reasonable efforts to collect any amounts available under such insurance
coverage and from such other party alleged to have responsibility. If a Seller
Indemnitee actually receives any amount under insurance coverage or from such
other party with respect to Seller Damages at any time subsequent to any
indemnification provided by the Buyer under this Section 7.3, then such Seller
Indemnitee shall promptly reimburse the Buyer, as the case may be, for any
payment made by the Buyer in connection with providing such indemnification up
to such amount received by the Seller Indemnitee; and
          (iv) The Buyer shall be obligated to indemnify the Seller Indemnitees
pursuant to Section 7.3(a)(i) only for those claims giving rise to Seller
Damages as to which the Seller Indemnitees have given the Buyer written notice
thereof prior to the end of the Survival Period. Any written notice delivered by
a Seller Indemnitee to the Buyer with respect to Seller Damages shall set forth
with as much specificity as is reasonably practicable the basis of the claim for
Seller Damages and, to the extent reasonably practicable, a reasonable estimate
of the amount of such claim.
     Section 7.4 Third-Party Indemnification. The obligations of PII to
indemnify the Buyer Indemnitees under Section 7.2 of this Agreement with respect
to Buyer Damages and the obligations of the Buyer to indemnify the Seller
Indemnitees under Section 7.3 of this Agreement with respect to Seller Damages,
in either case resulting from the assertion of liability by third parties (each,
as the case may be, a “Claim”), will be subject to the following terms and
conditions:
     (a) Any party against whom any Claim is asserted will give the indemnifying
party written notice of any such Claim promptly after learning of such Claim,
and the indemnifying party may, at its option, undertake the defense of such
Claim by counsel of its own choosing; provided that such counsel is not
reasonably objected to by the indemnified party. Failure to give prompt notice
of a Claim under this Agreement shall not affect the indemnifying party’s
obligations under this Article VII, except to the extent the indemnifying party
is materially prejudiced by such failure to give prompt notice. If the
indemnifying party, within 30 days after notice of any such Claim, or such
shorter period as is reasonably required, fails to assume the defense of such
Claim, the Buyer Indemnitee or the Seller Indemnitee, as the case may be,
against whom such Claim has been made will (upon further notice to the
indemnifying party) have the right to undertake the defense, compromise or
settlement of such Claim on behalf of and for the account and risk, and at the
expense, of the indemnifying party.
     (b) Anything in this Section 7.4 to the contrary notwithstanding, the
indemnifying party shall not enter into any settlement or compromise of any
action, suit or proceeding or consent to the entry of any judgment (i) that does
not include as an unconditional term thereof the delivery by the claimant or
plaintiff to the Seller Indemnitee or the Buyer Indemnitee, as the case may be,
of a written release from all liability in respect of such action, suit or
proceeding or (ii) for other than monetary

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damages to be borne by the indemnifying party, without the prior written consent
of the Seller Indemnitee or the Buyer Indemnitee, as the case may be, which
consent shall not be unreasonably withheld.
     (c) The indemnifying party and the indemnified party shall cooperate fully
in all aspects of any investigation, defense, pretrial activities, trial,
compromise, settlement or discharge of any claim in respect of which indemnity
is sought under this Article VII, including by providing the other party with
reasonable access to employees and officers (including as witnesses) and other
information.
          Section 7.5 No Setoff. Neither the Buyer nor PII shall have any right
to setoff any Buyer Damages or Seller Damages, respectively, against any
payments to be made by either of them under this Agreement.
          Section 7.6 Insurance. The indemnifying party shall be subrogated to
the rights of any indemnified party in respect of any insurance relating to
Buyer Damages or Seller Damages, as the case may be, to the extent of any
indemnification payments made under this Agreement, and the indemnified party
shall provide all reasonably requested assistance to the indemnifying party in
respect of such subrogation.
          Section 7.7 No Duplication. Any liability for indemnification under
this Agreement shall be determined without duplication of recovery by reason of
the state of facts (i) giving rise to such liability constituting a breach of
more than one representation, warranty, covenant or agreement or (ii) taken into
account in determining any adjustment to the Purchase Price under
Section 1.10(c). Article VII shall not apply to Tax claims to the extent those
claims are separately indemnified under Section 4.7.
          Section 7.8 Sole Remedy.
          (a) The parties agree that the sole and exclusive monetary remedy of
any party to this Agreement, any Buyer Indemnitee or any Seller Indemnitee or
their respective affiliates with respect to this Agreement or any other claims
relating to the Business, the events giving rise to this Agreement and the
transactions provided for in this Agreement or contemplated by this Agreement or
by any other such claims relating to the Business, events giving rise to this
Agreement and the transactions provided for in this Agreement (other than claims
of, or causes of action arising from, fraud) shall be limited to the
indemnification provisions set forth in Section 4.7 and this Article VII and, in
furtherance of the foregoing, each of the parties, on behalf of itself and its
affiliates, waives and releases the other parties to this Agreement (and such
other parties’ affiliates) from, to the fullest extent permitted under any
applicable Law, any and all rights, claims and causes of action it or its
affiliates may have against the other parties to this Agreement (other than
claims of, or causes of action arising from, fraud) except pursuant to the
indemnification provisions set forth in Section 4.7 and this Article VII.
          (b) The parties intend that, even though indemnification and other
obligations appear in various sections and articles of this Agreement, the
indemnification procedures and limitations contained in this Article VII shall
apply to all indemnity and other obligations of the

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parties under this Agreement, except as provided in Section 4.7 and except to
the extent expressly excluded in this Article VII.
          Section 7.9 No Special Damages. IN NO EVENT SHALL ANY BUYER DAMAGES OR
SELLER DAMAGES HEREUNDER INCLUDE EXEMPLARY, SPECIAL, PUNITIVE, INDIRECT, REMOTE,
SPECULATIVE OR CONSEQUENTIAL DAMAGES EXCEPT TO THE EXTENT ANY SUCH DAMAGES ARE
PAYABLE TO AN UNAFFILIATED THIRD PARTY IN CONNECTION WITH A THIRD PARTY CLAIM.
          Section 7.10 Express Negligence. THE FOREGOING INDEMNITIES ARE
INTENDED TO BE ENFORCEABLE AGAINST THE PARTIES IN ACCORDANCE WITH THE EXPRESS
TERMS AND SCOPE THEREOF NOTWITHSTANDING ANY EXPRESS NEGLIGENCE RULE OR ANY
SIMILAR DIRECTIVE THAT WOULD PROHIBIT OR OTHERWISE LIMIT INDEMNITIES BECAUSE OF
THE NEGLIGENCE (WHETHER SOLE, CONCURRENT, ACTIVE OR PASSIVE) OR OTHER FAULT OR
STRICT LIABILITY OF ANY OF THE INDEMNIFIED PARTIES.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
          Section 8.1 Amendment and Modification. This Agreement may be amended,
modified or supplemented at any time by the parties to this Agreement, under an
instrument in writing signed by all parties.
          Section 8.2 Entire Agreement; Assignment; Binding Effect. This
Agreement (including the Seller Disclosure Letter) and the Confidentiality
Agreement (a) constitute the entire agreement between the parties concerning the
subject matter of this Agreement and supersede other prior agreements and
understandings, both written and oral, between the parties concerning the
subject matter of this Agreement and (b) shall not be assigned, by operation of
law or otherwise, by a party, without the prior written consent of the other
parties; provided, however, that, without the prior written consent of any other
party, the Buyer may assign its right to purchase all or any portion of the
Shares to any controlled affiliate of the Buyer organized under the laws of the
United States of America, any political subdivision thereof or any State
thereof, Uruguay, the Bahamas, Bermuda, the British Virgin Islands, the Cayman
Islands or any member of the European Union; provided, further, however, that no
such assignment shall limit or affect the Buyer’s obligations hereunder..
Subject to the preceding sentence, this Agreement will be binding upon, inure to
the benefit of, and be enforceable by, the parties and their respective
successors and assigns.
          Section 8.3 Severability. The invalidity or unenforceability of any
term or provision of this Agreement in any situation or jurisdiction shall not
affect the validity or enforceability of the other terms or provisions of this
Agreement or the validity or enforceability of the offending term or provision
in any other situation or in any other jurisdiction and the remaining terms and
provisions shall remain in full force and effect, unless doing so would result
in an interpretation of this Agreement that is manifestly unjust.

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          Section 8.4 Notices. Unless otherwise provided in this Agreement, all
notices and other communications under this Agreement shall be in writing and
may be given by any of the following methods: (a) personal delivery;
(b) facsimile transmission; (c) registered or certified mail, postage prepaid,
return receipt requested; or (d) overnight delivery service. Such notices and
communications shall be sent to the appropriate party at its address or
facsimile number given below or at such other address or facsimile number for
such party as shall be specified by notice given under this Agreement (and shall
be deemed given upon receipt by such party or upon actual delivery to the
appropriate address, or, in case of a facsimile transmission, upon transmission
by the sender and issuance by the transmitting machine of a confirmation slip
that the number of pages constituting the notice have been transmitted without
error; in the case of notices sent by facsimile transmission, the sender shall
contemporaneously mail a copy of the notice to the addressee at the address
provided for above; provided, however, that such mailing shall in no way alter
the time at which the facsimile notice is deemed received):

  (a)   if to any of the Sellers, to         Pride International, Inc.
5847 San Felipe
Houston, Texas 77057
Facsimile: (713) 914-9796
Attention: General Counsel
                   Legal Department         with a copy to         Baker Botts
L.L.P.
One Shell Plaza
910 Louisiana Street
Houston, Texas 77002-4995
Facsimile: (713) 229-7701
Attention: J. David Kirkland, Jr.
                   Tull R. Florey
    (b)   if to the Buyer, to         GP Investments Ltd.
Clarendon House
2 Church Street, Hamilton, HM 11
Bermuda
Facsimile: (441) 292-4720
Attention: Stephen Rossiter
                   David Cooke

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      with a copy to       Cravath, Swaine & Moore LLP
825 Eighth Avenue
Worldwide Plaza
New York, New York 10019-7475
Facsimile: (212) 474-3700
Attention: David Mercado

          Section 8.5 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the Laws of the State of New York applicable to
contracts executed in and to be performed entirely within that state. Without
prejudice to the provisions of Section 8.6, all actions and proceedings arising
out of or relating to this Agreement shall be heard and determined in any New
York state or federal court sitting in the Borough of Manhattan in the City of
New York, New York, and the parties hereby irrevocably submit to the exclusive
jurisdiction of such courts in any such action or proceeding and irrevocably
waive the defense of an inconvenient forum to the maintenance of any such action
or proceeding. Each party irrevocably consents to the service of any and all
process in any such action or proceeding by the mailing of copies of such
process to such party at its address specified in Section 8.4. The Buyer hereby
irrevocably designates, appoints and empowers Corporation Service Company, 1133
Avenue of the Americas, New York, New York 10036, as its designee, appointee and
agent to receive, accept and acknowledge for and on its behalf service for any
and all legal process, summons, notices and documents which may be served in any
such action or proceeding which may be made on such designee, appointee and
agent in accordance with legal procedures prescribed for such courts, with
respect to any action or proceeding arising out of or relating to this
Agreement. The parties agree that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by Law. Nothing in this
Section 8.5 shall affect the right of any party to serve legal process in any
other manner permitted by Law. The consents to jurisdiction set forth in this
Section 8.5 shall not constitute general consents to service of process in the
State of New York and shall have no effect for any purpose except as provided in
this Section 8.5 and shall not be deemed to confer rights on any person other
than the parties.
          Section 8.6 Dispute Resolution.
          (a) Negotiation; Mediation.
          (i) In the event of any dispute or disagreement between the Sellers
and the Buyer as to the interpretation of any provision of this Agreement (or
the performance of obligations under this Agreement), the matter, on written
request of either party, shall be referred to representatives of the parties for
decision, each party being represented by a senior executive officer who has no
direct operational responsibility for the matters contemplated by this Agreement
(the “Representatives”). The Representatives shall promptly meet in a good faith
effort to resolve the dispute. If the Representatives do not agree upon a
decision within 30 calendar days after reference of

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the matter to them, each of the Buyer and the Sellers shall be free to exercise
the remedies available to it under Section 8.6(b).
          (ii) The Representatives may elect at any time to undertake mediation.
The Representatives may elect to utilize the commercial mediation rules of the
American Arbitration Association (“AAA”), either as written or as modified by
mutual agreement. If arbitration proceedings have been instituted, these
proceedings shall be stayed until the mediation process is terminated.
          (b) Arbitration.
          (i) Any controversy, dispute or claim arising out of or relating to
this Agreement or the transactions arising hereunder that cannot be resolved by
negotiation or mediation pursuant to Section 8.6(a) shall be settled exclusively
by final and binding arbitration in New York, New York. Such arbitration will
apply the laws of the State of New York and the commercial arbitration rules of
AAA to resolve the dispute.
          (ii) Written notice of arbitration must be given within one year after
the accrual of the claim on which the notice is based. If the claiming party
fails to give notice of arbitration within that time, the claim shall be deemed
to be waived.
          (iii) Such arbitration shall be conducted by three independent and
impartial arbitrators. Each party shall appoint one arbitrator, and those
appointed arbitrators shall select the third arbitrator, who shall be the
presiding arbitrator. Unless the parties agree otherwise, each arbitrator shall
be a licensed attorney with at least ten years of experience in the practice of
law. If an arbitrator should die, withdraw or otherwise become incapable of
serving, a replacement shall be selected and appointed in a like manner.
          (iv) The arbitrators shall render an opinion setting forth findings of
fact and conclusions of law with the reasons therefor stated. A transcript of
the evidence adduced at the hearing shall be made and shall, upon request, be
made available to either party. The fees and expenses of the arbitrators shall
be shared equally by the parties and advanced by them from time to time as
required; provided that at the conclusion of the arbitration, the arbitrators
may award costs and expenses (including the costs of the arbitration previously
advanced and the fees and expenses of attorneys, accountants and other experts).
The arbitrators shall render their award within 90 days of the conclusion of the
arbitration hearing. The arbitrators shall not be empowered to award to either
party any punitive damages in connection with any dispute between them, and each
party hereby irrevocably waives any right to recover such damages. The
arbitration hearings and award shall be maintained in confidence.
          (v) Notwithstanding anything to the contrary provided in this
Section 8.6(b) and without prejudice to the above procedures, either party may
apply to any court of competent jurisdiction for temporary injunctive or other
provisional judicial relief or to specifically enforce the terms of this
Agreement. The award rendered by the arbitrators

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shall be final and not subject to judicial review and judgment thereon may be
entered in any court of competent jurisdiction.
          (c) Inapplicable to Section 1.10. Notwithstanding anything to the
contrary contained in this Agreement, this Section 8.6 shall not apply to the
provisions of Section 1.10(b) and (c) of this Agreement.
          Section 8.7 Descriptive Headings. The descriptive headings used in
this Agreement are inserted for convenience of reference only and shall in no
way be construed to define, limit, describe, explain, modify, amplify, or add to
the interpretation, construction or meaning of any provision of, or scope or
intent of, this Agreement nor in any way affect this Agreement.
          Section 8.8 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but any of which
together shall constitute one and the same instrument. An executed counterpart
signature page to this Agreement delivered by fax or other means of electronic
transmission shall be deemed to be an original and shall be as effective for all
purposes as delivery of a manually executed counterpart.
          Section 8.9 Fees and Expenses. Whether or not this Agreement and the
transactions contemplated by this Agreement are consummated, and except as
otherwise expressly set forth in this Agreement, all costs and expenses
(including legal and financial advisory fees and expenses) incurred in
connection with, or in anticipation of, this Agreement and the transactions
contemplated by this Agreement shall be paid by the party incurring such
expenses.
          Section 8.10 Interpretation.
          (a) The phrase “to the knowledge of the Sellers” or any similar phrase
shall mean such facts and other information that as of the date of this
Agreement are actually known to the persons listed in Section 8.10 of the Seller
Disclosure Letter. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement. Whenever the words “include,” “includes” or “including” are used in
this Agreement, they shall be deemed to be followed by the words “without
limitation.”
          (b) As used in this Agreement:
          (i) “affiliate” of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person.
          (ii) “person” means any individual, firm, corporation, partnership,
limited liability company, trust, joint venture, Governmental Entity or other
entity.
          (iii) “Subsidiary” of any person means another person, an amount of
the voting securities, other voting ownership or voting partnership interests of
which is

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sufficient to elect at least a majority of its Board of Directors or other
governing body (or, if there are no such voting interests, 50% or more of the
equity interests of which) is owned directly or indirectly by such first person
or by another Subsidiary of such first person.
          Section 8.11 Third-Party Beneficiaries. This Agreement is solely for
the benefit of the Sellers, their respective successors and permitted assigns
and the Seller Indemnitees, with respect to the obligations of the Buyer under
this Agreement, and for the benefit of the Buyer, its successors and permitted
assigns and the Buyer Indemnitees, with respect to the obligations of the
Sellers, under this Agreement, and for the benefit of the Affected Employees
under Section 4.9, and this Agreement shall not be deemed to confer upon or give
to any other third party any remedy, claim of liability or reimbursement, cause
of action or other right.
          Section 8.12 No Waivers. Except as otherwise expressly provided in
this Agreement, no failure to exercise, delay in exercising, or single or
partial exercise of any right, power or remedy by any party, and no course of
dealing between the parties, shall constitute a waiver of any such right, power
or remedy. No waiver by a party of any default, misrepresentation, or breach of
warranty or covenant under this Agreement, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant under this Agreement or affect in any way any
rights arising by virtue of any such prior or subsequent occurrence. No waiver
shall be valid unless in writing and signed by the party against whom such
waiver is sought to be enforced.
          Section 8.13 Specific Performance. The parties to this Agreement agree
that if any of the provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached, irreparable damage would
occur, no adequate remedy at law would exist and damages would be difficult to
determine, and that the parties shall be entitled to specific performance of the
terms of this Agreement and immediate injunctive relief, without the necessity
of proving the inadequacy of money damages as a remedy, in addition to any other
remedy at law or in equity.

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          IN WITNESS WHEREOF, each of the undersigned has caused this Agreement
to be duly signed as of the date first above written.

            SELLERS

PRIDE INTERNATIONAL, INC.
      By:   /s/ Brian C. Voegele         Name:   Brian C. Voegele       
Title:   Senior Vice President and Chief Financial Officer        REDFISH
HOLDINGS S. DE R.L. DE C.V.
      By:   /s/ Alejandro Cestero         Name:   Alejandro Cestero       
Title:   Attorney-in-fact        PRIDE INTERNATIONAL LTD.
      By:   /s/ Brian C. Voegele         Name:   Brian C. Voegele       
Title:   President        PRIDE SERVICES LTD.
      By:   /s/ Brian C. Voegele         Name:   Brian C. Voegele       
Title:   President        GULF OF MEXICO PERSONNEL SERVICES S. DE R.L. DE C.V.
      By:   /s/ Alejandro Cestero         Name:   Alejandro Cestero       
Title:   Attorney-in-fact   

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            BUYER

GP INVESTMENTS LTD.
      By:   /s/ Octavio Pereira Lopes         Name:   Octavio Pereira Lopes     
  Title:   Attorney-in-fact   

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Exhibit A

(Transition Services
Agreement)
     Pride agrees to furnish supplementally a copy of this Exhibit A to the
Commission upon request.