Exhibit 10.7

ALGERIA AND KUWAIT

SALE AND PURCHASE AGREEMENT

by and between

Weatherford Worldwide Holdings GmbH

and

ADES International Holding Ltd.

_____________

July 11, 2018

428928/HOUDMS 

--------------------------------------------------------------------------------

TABLE OF CONTENTS
 
 
 
Page

 
 
 
 
ARTICLE I DEFINITIONS AND CONSTRUCTION
1

SECTION
1.1
Definitions
1

SECTION
1.2
Additional Defined Terms
11

SECTION
1.3
Construction
13

SECTION
1.4
Currency
13

 
 
 
 
ARTICLE 2 THE TRANSACTION
13

SECTION
2.1
Purchase and Sale of Purchased Assets
13

SECTION
2.2
Assumption of Liabilities
13

SECTION
2.3
Local Transfer Agreements
13

SECTION
2.4
Consideration
14

SECTION
2.5
Working Capital Adjustment
15

SECTION
2.6
Allocation of Purchase Price
16

SECTION
2.7
Closing
17

SECTION
2.8
Initial Closing Deliverables
17

SECTION
2.9
Subsequent Closing Deliverables
19

SECTION
2.10
No Ongoing or Transition Services
20

SECTION
2.11
Intercompany Accounts
20

SECTION
2.12
Consents
20

 
 
 
 
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLER
21

SECTION
3.1
Organization and Good Standing
21

SECTION
3.2
Authority and Enforceability
21

SECTION
3.3
No Conflict
22

SECTION
3.4
Capitalization and Ownership of PD Cyprus
22

SECTION
3.5
Capitalization and Ownership of the Joint Venture
22

SECTION
3.6
Financial Statements
23

SECTION
3.7
Operation of the Business
24

SECTION
3.8
Title to Purchased Assets; Sufficiency of Purchased Assets
24

SECTION
3.9
Real Property
24

SECTION
3.10
Intellectual Property
25

SECTION
3.11
Contracts
25

SECTION
3.12
Tax Matters
26

SECTION
3.13
Employment, Benefit and Labor Matters
27

SECTION
3.14
Environmental Matters
28

SECTION
3.15
Governmental Authorizations
29

SECTION
3.16
Legal Proceedings
29

SECTION
3.17
Compliance with Law
29

SECTION
3.18
Insurance
29

 
-i-
 

428928/HOUDMS 

--------------------------------------------------------------------------------

TABLE OF CONTENTS
(continued)
 
 
 
Page

 
 
 
 
SECTION
3.19
Brokers Fees
30

SECTION
3.20
Records
30

SECTION
3.21
Transferring Employees.
30

SECTION
3.22
Effect of Contemplated Transactions
31

SECTION
3.23
Insolvency
31

 
 
 
 
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF PURCHASER
31

SECTION
4.1
Organization and Good Standing
31

SECTION
4.2
Authority and Enforceability
31

SECTION
4.3
No Conflict
32

SECTION
4.4
Legal Proceedings
32

SECTION
4.5
Investment Intent
32

SECTION
4.6
Brokers Fees
32

SECTION
4.7
Financial Capacity
32

SECTION
4.8
Independent Investigation
33

 
 
 
 
ARTICLE 5 COVENANTS
33

SECTION
5.1
Access and Investigation
33

SECTION
5.2
Operation of the Business
33

SECTION
5.3
Consents and Filings
36

SECTION
5.4
Financing
37

SECTION
5.5
Confidentiality
37

SECTION
5.6
Public Announcements
38

SECTION
5.7
Further Actions; Post-Closing Cooperation
38

SECTION
5.8
Indemnification
38

SECTION
5.9
Insurance
39

SECTION
5.10
Designated Affiliates
39

SECTION
5.11
Credit and Performance Support Obligations
39

SECTION
5.12
Seller Names and Marks
40

SECTION
5.13
Supplements to Disclosure Schedules
40

SECTION
5.14
Non-Competition/Non-Solicitation
41

SECTION
5.15
Restructuring
42

SECTION
5.16
Post Closing Operation of the Business in Kuwait
42

 
 
 
 
ARTICLE 6 CONDITIONS PRECEDENT TO OBLIGATION TO CLOSE
42

SECTION
6.1
Conditions to the Obligation of Purchaser at the Initial Closing
42

SECTION
6.2
Conditions to the Obligation of Seller at the Initial Closing
44

SECTION
6.3
Conditions to the Obligation of Purchaser at a Subsequent Closing
44

 
-ii-
 

428928/HOUDMS 

--------------------------------------------------------------------------------

TABLE OF CONTENTS
(continued)
 
 
 
Page

 
 
 
 
SECTION
6.4
Conditions to the Obligation of Seller at a Subsequent Closing
46

 
 
 
 
ARTICLE 7 TERMINATION
47

SECTION
7.1
Termination Events
47

SECTION
7.2
Effect of Termination
48

SECTION
7.3
Certain Other Effects of Termination
49

 
 
 
 
ARTICLE 8 INDEMNIFICATION
50

SECTION
8.1
Indemnification by Seller
50

SECTION
8.2
Indemnification by Purchaser
50

SECTION
8.3
Claim Procedure
50

SECTION
8.4
Survival
51

SECTION
8.5
Limitations on Liability
52

SECTION
8.6
Exclusive Remedy
53

SECTION
8.7
No Duplication
54

SECTION
8.8
Adjustment to Purchase Price
54

SECTION
8.9
Employees
54

 
 
 
 
ARTICLE 9 TAX MATTERS
54

SECTION
9.1
Tax Returns and Covenants
54

SECTION
9.2
Allocation of Taxes
55

SECTION
9.3
Tax Contests
55

SECTION
9.4
Transfer Taxes
56

SECTION
9.5
Purchaser’s Claiming, Receiving or Using of Refunds, Overpayments and
Prepayments
56

SECTION
9.6
Post-Closing Actions That Affect Liability for Taxes
56

SECTION
9.7
Assistance and Cooperation
56

SECTION
9.8
Tax Elections
57

 
 
 
 
ARTICLE 10 EMPLOYEE MATTERS
57

SECTION
10.1
Employees
57

SECTION
10.2
Benefit Plans
59

 
 
 
 
ARTICLE 11 GENERAL PROVISIONS
60

SECTION
11.1
Notices
60

SECTION
11.2
Amendment
61

SECTION
11.3
Waiver and Remedies
61

SECTION
11.4
Entire Agreement
61

SECTION
11.5
Assignment, Successors and No Third Party Rights
61

 
-iii-
 

428928/HOUDMS 

--------------------------------------------------------------------------------

TABLE OF CONTENTS
(continued)
 
 
 
Page

 
 
 
 
SECTION
11.6
Severability
62

SECTION
11.7
Exhibits and Schedules
62

SECTION
11.8
Interpretation
62

SECTION
11.9
Expenses
62

SECTION
11.10
Governing Law
63

SECTION
11.11
Disputes
63

SECTION
11.12
Limitation on Liability
63

SECTION
11.13
Specific Performance
64

SECTION
11.14
No Joint Venture
64

SECTION
11.15
Descriptive Headings
64

SECTION
11.16
Counterparts
64

SECTION
11.17
Seller Parent Guarantee
65

Exhibits [Not Included]
Exhibit A - Sample Net Working Capital and Net Cash Calculation
Exhibit B - Deeds of Release
Exhibit C - Joint Venture Amendment
Exhibit D - Joint Venture Side Letter
Exhibit E ‑ Form of Transition Services Agreement
Exhibit F ‑ Form of Asset Transfer Agreement
Exhibit G - Purchase Price Allocation

Schedules
Seller Disclosure Schedule
Purchaser Disclosure Schedule

 
-iv-
 

428928/HOUDMS 

--------------------------------------------------------------------------------

SALE AND PURCHASE AGREEMENT
This Sale and Purchase Agreement (this “Agreement”) is entered into and
effective as of the Effective Date (as defined below), by and between
Weatherford Worldwide Holdings GmbH, a Swiss company with limited liability
(“Seller”) and ADES International Holding Ltd., a Dubai International Financial
Centre entity (“Purchaser”). Seller and Purchaser are at times hereinafter
referred to collectively as the “Parties” and, each individually, as a “Party.”
RECITALS
1.    Seller, through certain of its direct and indirect Subsidiaries (as
defined below), is engaged in the Business (as defined below).
2.    The Business is comprised of certain assets and liabilities that are part
of Seller and its Subsidiaries’ businesses, including the Purchased Assets and
Assumed Liabilities (each as defined below).
3.    Seller and the Selling Entities (as defined below) desire to sell,
transfer and assign to Purchaser (or a Designated Affiliate (as defined below))
and divest themselves of the Purchased Assets and Assumed Liabilities, in one or
two closings, and Purchaser desires to purchase and acquire the Purchased Assets
and assume the Assumed Liabilities, on the terms and subject to the conditions
set forth in this Agreement.
4.    To effect the sale of the Business, Seller and Purchaser are entering into
this Agreement as of the Effective Date, and at the applicable Closing (as
defined below) will enter into Transfer Agreements (as defined below) as
required pursuant to Section 2.3 to effect the sale and transfer of the
Purchased Assets and assignment of the Assumed Liabilities pursuant to the
requirements of applicable local Laws (as defined below).
NOW, THEREFORE, intending to be legally bound and in consideration of the mutual
agreements and covenants set forth in this Agreement and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:

Article 1
DEFINITIONS AND CONSTRUCTION

Section 1.1    Definitions. For the purposes of this Agreement:
(a)    “Affiliate” means, with respect to a specified Person, a Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with, the specified Person during the
period for which the determination of affiliation is made. The term “control”
(including the terms “controlling,” “controlled by” and “under common control
with”) means the possession, direct or indirect, of the power to elect a
majority of the board of directors (or governing authority) or to direct or
cause the direction of the management and policies of a Person, whether through
the ownership of voting securities, by Contract or otherwise. For purposes of
this Agreement, unless otherwise expressly provided for herein, neither Seller
nor any of its Subsidiaries (including the Asset Selling Entities) or Purchaser
nor any of its Subsidiaries shall be deemed an “Affiliate” of the Joint Venture.

428928/HOUDMS 

--------------------------------------------------------------------------------

 

(b)    “Algeria Assets” means all of the right, title and interest in and to the
following (which right, title and interest are held by the entities set forth in
Section 1.1(b) of the Seller Disclosure Schedule):
(i)    the Rigs and related equipment (including transportation equipment) set
forth on Section 1.1(b)(i) of the Seller Disclosure Schedule;
(ii)    subject to Section 2.12, the drilling and other Contracts set forth on
Section 1.1(b)(ii) of the Seller Disclosure Schedule;
(iii)    all other equipment, inventories, including raw materials, works in
process, semifinished and finished products, replacement and spare parts,
packaging and labelling materials, operating supplies (including all broached
and unbroached provisions) and inventory in transit or deposited in a warehouse,
in each case to the extent used or intended for use in the Business in the
People’s Democratic Republic of Algeria; and
(iv)    the Business Intellectual Property and Records relating to the Business
in Algeria.
(c)    “Algerian Contracted Rigs” means any of the Rigs set forth in Section
1.1(b)(i) of the Seller Disclosure Schedule as are contracted to the Algerian
Customer at the applicable Closing in respect of the Algeria Assets.
(d)    “Algerian Customer” means, collectively, either (i) Sonatrach, (ii) OC
Sonatrach–First Calgary Petroleums or (iii) any other counterparty to the
drilling Contracts with respect to the Algeria Assets as set forth in Section
1.1(b)(ii) of the Seller Disclosure Schedule (as the case may be), as updated
pursuant to Section 5.13.
(e)    “Ancillary Agreements” means, collectively, the Transfer Agreements and
the other agreements and instruments of transfer executed and delivered in
connection with the Contemplated Transactions.
(f)    “Anti-Corruption Laws” means any Law for the prevention of public or
commercial corruption and bribery or that requires compliance with international
trade and sanctions that applies to the Business or the Joint Venture whether in
the Territory or elsewhere including without limitation the Foreign Corrupt
Practices Act 1977 and the UK Bribery Act 2010.
(g)    “Antitrust Laws” means any Law within the Territory governing agreements
in restraint of trade, monopolization, pre-merger notification, the lessening of
competition through merger or acquisition or anti-competitive conduct.
(h)    “Asset Selling Entities” means, collectively, those entities set forth in
Section 1.1(b) and Section 1.1(ss)(ii) of the Seller Disclosure Schedule that
will sell, transfer and assign the Purchased Assets (other than the Purchased
Equity) and Assumed Liabilities to Purchaser (or a Designated Affiliate)
pursuant to this Agreement.
(i)    “Assignment Agreements” means the assignment of all right, title and
interest in the Leases by the relevant Selling Entity to a Designated Affiliate
in such form as the Parties shall reasonably agree (such agreement not to be
unreasonably withheld).
(j)    “Assumed Liabilities” means the following Liabilities of the Asset
Selling Entities:

2
428928/HOUDMS 

--------------------------------------------------------------------------------

 

(i)    all Liabilities to the extent arising out of, in connection with or
relating to acts or omissions in the conduct of the Business or the ownership or
operation of the Purchased Assets by Purchaser or any of its Affiliates, in each
case from and after the Closing and to the extent relating to a period on or
after Closing;
(ii)    all Liabilities assumed by Purchaser or any of its Designated Affiliates
pursuant to the Ancillary Agreements, the Assignment Agreements and Novation
Agreements; and
(iii)    all Liabilities for or with respect to which Purchaser bears
responsibility pursuant to Article 8 and Article 10;
provided that Assumed Liabilities shall not include the Liabilities of the Asset
Selling Entities arising out of or incurred in connection with this Agreement,
the Ancillary Agreements, the Assignment Agreements, the Novation Agreements or
any Retained Taxes.
(k)    “Backlog” means for each of Rig numbers 155, 180, 776, 801, 808, 809,
810, 828, 870, 871 and 878 (which this Agreement contemplates will be the
subject of a Drilling Contract at the Closing applicable to that Rig) the
amounts set forth in Section 1.1(k) of the Seller Disclosure Schedule, as
adjusted to reflect payments due to have been made under such Drilling Contracts
between the Effective Date and the relevant Closing Date, as further set forth
in Section 1.1(k) of the Seller Disclosure Schedule.
(l)    “Backlog Deduction” means a deduction to be made to the Kuwait Cash
Consideration or the Algeria Cash Consideration, as applicable, calculated as of
the applicable Closing as follows: (i) if the Backlog with respect to Rigs 155,
180, 776, 870, 871, 878, 808, 809 included in the Kuwait Assets is less than 90%
of the Backlog set forth in Section 1.1(k) of the Seller Disclosure Schedule for
such Rigs (or $584,838,258.30) or (ii) if the Backlog with respect to Rigs 801,
810 and 828 included in the Algeria Assets is less than 90% of the Backlog set
forth in Section 1.1(k) of the Seller Disclosure Schedule for such Rigs (or
$46,374,413.40), then (A) in the case of the Rigs included in the Kuwait Assets
an amount equal to ten-thirty sixths of the applicable Backlog lost will be
deducted from the Kuwait Cash Consideration; and (B) in the case of the Rigs
included in the Algeria Assets an amount equal to one-third of the applicable
Backlog lost will be deducted from the Algeria Cash Consideration, in each case
as applicable, at the relevant Closing. 
(m)    “Business” means the oil and gas land contract drilling business in the
applicable Territory where, as and to the extent conducted by the Joint Venture
or any Asset Selling Entity, as applicable, as of the Effective Date.
(n)    “Business Day” means any day other than Saturday, Sunday or any day on
which banking institutions in Houston, Texas, U.S. or Dubai, United Arab
Emirates are closed for normal banking business either under applicable Law or
by action of any Governmental Authority.
(o)    “Business Information” means the terms of this Agreement and the other
Transaction Documents and all information, know-how and techniques (in whatever
form held), solely relating to the Business, Joint Venture and the Purchased
Assets including information with respect to:
(i)    any products manufactured or sold or services rendered by the Joint
Venture or any Asset Selling Entity;
(ii)    any documentation, formulae, designs, specifications, drawings, data,
manuals or instructions relating to (i) above;

3
428928/HOUDMS 

--------------------------------------------------------------------------------

 

(iii)    suppliers and distributors of the Joint Venture or any Asset Selling
Entity; and
(iv)    the operations, management, administration or financial affairs of the
Joint Venture and any Asset Selling Entity (including any accounts, business
plans or forecasts, information relating to future business development or
planning, information relating to the Transferring Employees and technical
information relating to the Purchased Assets);
provided that Business Information shall not include any information, know-how,
and techniques that (i) can be shown to have been in the public domain through
no fault of Seller or any of its Affiliates in violation of this Agreement, (ii)
was independently developed by Seller or its Affiliates without the use of
Purchaser’s or its Affiliates’ (including the Joint Venture from and after
Closing) confidential information, or (iii) was later lawfully acquired by
Seller or any Affiliate from sources other than those related to its prior
ownership of the Business.
(p)    “Cash Equivalents” means cash, checks, money orders, marketable
securities, short-term instruments and other cash equivalents, funds in time and
demand deposits or similar accounts, and any evidence of Indebtedness issued or
guaranteed by any Governmental Authority.
(q)    “Closing Net Cash” means the sum of (i) the amount of Cash Equivalents on
hand or credited to any account open in the name of the Joint Venture with a
financial institution (plus all uncollected bank deposits) minus (ii)
Indebtedness of the Joint Venture, in each case calculated as of the close of
business on the day immediately preceding the Closing Date in accordance with
IFRS and Exhibit A.
(r)    “Closing Net Working Capital” means (a) the sum of the balances of the
current asset line items of the Balance Sheet (excluding Cash Equivalents) minus
(b) the sum of the balances of the current liabilities of the Balance Sheet, in
each case calculated as of the close of business on the day immediately
preceding the Closing Date in accordance with IFRS and Exhibit A.
(s)    “Code” means the U.S. Internal Revenue Code of 1986, as amended.
(t)    “Contemplated Transactions” means all of the transactions to be carried
out in accordance with this Agreement, including the performance by the Parties
of their other obligations under this Agreement and the Transaction Documents.
(u)    “Contract” means any contract, agreement, lease or license that is
legally binding.
(v)    “Deeds of Release” means deeds of release in the form attached as Exhibit
B or other customary documents executed by (i) Seller terminating and releasing
the Joint Venture from liability under any intercompany arrangements among
Seller or its Affiliates and the Joint Venture, and (ii) the holders of any
Encumbrance, under Seller or its Affiliates existing banking arrangements
pursuant to which any of the Purchased Assets are subject to pledges or other
Encumbrances, in each case, as listed in Section 1.1(v) of the Seller Disclosure
Schedule, confirming the release of such Encumbrance.
(w)    “Designated Affiliates” means the entities formed, or to be formed prior
to the Closing Date, by Purchaser and listed in Section 1.1(w) of the Purchaser
Disclosure Schedule.
(x)    “Drilling Contracts” means the drilling Contracts with respect to the
Algeria Assets set forth in Section 1.1(b)(ii) of the Seller Disclosure Schedule
and the drilling Contracts with respect to the Kuwait Assets set forth in
Section 3.11(a) of the Seller Disclosure Schedule, as updated pursuant to
Section 5.13.

4
428928/HOUDMS 

--------------------------------------------------------------------------------

 

(y)    “Effective Date” means July 11, 2018, the date on which this Agreement
was signed and entered into by the Parties.
(z)    “Employee” means any individual who is (i) an employee of the Selling
Entities providing services to the Business or the Joint Venture or (ii) an
employee of Seller or its Affiliates (other than those employees in (i) of this
definition) who is seconded or assigned to the Selling Entities or the Joint
Venture and work for such entities more than 50% of the time. An individual who
would otherwise satisfy this definition but who is absent from active employment
on the Closing Date on account of vacation, sick leave, disability leave, leave
under any local Law which preserves employment or reemployment rights for the
individual, or any other similar reason, shall nonetheless be an “Employee”
hereunder.
(aa)    “Encumbrance” means any charge, claim, mortgage, servitude, easement,
right of way, covenant, equitable interest, license, lease, lien, option,
pledge, hypothecation, security interest, preference, priority, right of first
refusal, right to acquire, condition, limitation or restriction, trust
arrangement, title retention or other arrangement in any jurisdiction having the
effect of constituting security or preference and any agreement to create any of
the foregoing.
(bb)    “Environmental Law” means any Law concerning (i) the treatment,
disposal, emission, discharge, Release or threatened Release of Hazardous
Material, (ii) the protection of the environment or (iii) the health and safety
of any Person.
(cc)    “Equity Selling Entity” means Weatherford Drilling International
Holdings (BVI) Ltd., which will sell, transfer and assign the Purchased Equity
to Purchaser (or a Designated Affiliate) pursuant to this Agreement.
(dd)    “Excluded Rig Deduction” means (i) for each of Rig numbers 155, 180,
776, 808, 809, 870, 871 and 878, which this Agreement contemplates will be the
subject of a Drilling Contract at the Closing applicable to that Rig, ten-thirty
sixths of the Backlog applicable to such Rig; (ii) for each of Rig numbers 801,
810 and 828, which this Agreement contemplates will be the subject of a Drilling
Contract at the Closing applicable to that Rig, one-third of the Backlog
applicable to such Rig; and (iii) for each of Rig numbers 102, 160, 171, 172,
802, 814, 815, 827 and 830 which this Agreement does not contemplate will be the
subject of a Drilling Contract at the Closing, the amounts set forth in Section
1.1(dd) of the Seller Disclosure Schedule.
(ee)    “Governmental Authority” means any (i) nation, state or city (ii)
federal, state, local, foreign, multinational or other government, or (iii)
other governmental authority or instrumentality, including any regulatory or
administrative agency, governmental commission, department, board, bureau, court
or other tribunal.
(ff)    “Governmental Authorization” means any approval, consent, clearance,
license, permit or registration issued or granted by, or otherwise obtained
from, any Governmental Authority.
(gg)    “Hazardous Material” means any waste or other substance that is listed,
defined, designated or classified as hazardous, radioactive or toxic or a
pollutant or a contaminant under any Environmental Law, including any admixture
or solution thereof, and including petroleum and all derivatives thereof or
synthetic substitutes therefor, asbestos or asbestos-containing materials in any
form or condition and polychlorinated biphenyls.
(hh)    “IFRS” means International Financial Reporting Standards and
interpretations thereof as established by the International Accounting Standards
Board.

5
428928/HOUDMS 

--------------------------------------------------------------------------------

 

(ii)    “Indebtedness” means, with respect to any Person, (i) all indebtedness
of such Person, for borrowed money, (ii) all obligations of such Person
evidenced by promissory notes, bonds, debentures or other similar instruments or
debt securities, (iii) all debt securities or warrants or other rights to
acquire any debt securities of such Person, and (iv) all guarantee obligations
of such Person of any of the foregoing indebtedness, obligations or debt
securities of another Person.
(jj)    “Independent Contractor” means any individual who provides personnel
services to the Business via a Third Party Contract.
(kk)    “Insolvency Event” means in relation to Seller and any Selling Entity
(i) it is insolvent or bankrupt, within the meaning of the Laws of its country
of formation or operation; (ii) it is currently contemplated that Seller or any
Selling Entity will be making application for an administration order or the
appointment of an administrator or trustee in bankruptcy in respect of that
Person; (iii) a bankruptcy petition is presented; (iv) Seller or any Selling
Entity enters into a voluntary arrangement or other dealing with any of its
creditors with a view to avoiding, or in expectation of, insolvency or
bankruptcy or (v) an applicable Government Authority takes possession or a
trustee in bankruptcy (in the case of an individual) or a receiver or manager is
appointed of the whole or any material part of that Seller or any Selling
Entity’s assets and includes any equivalent or analogous Proceedings by whatever
name known in whatever jurisdiction.
(ll)    “Intellectual Property” means all legal right, title or interest in the
following arising under Law: (i) all patents and applications for patents, and
all related reissues, divisions, continuations, and continuations-in-part
thereof or invention discovery; (ii) all registered copyrights and copyright
applications; (iii) all design, design registration or database rights; (iv) all
Trademarks; (v) Internet addresses, domain names, and related registrations and
applications; and (vi) all inventions, confidential know how, trade secrets,
manufacturing and production processes and techniques.
(mm)    “Joint Venture” means United Precision Drilling Company W.L.L., a
company incorporated in the State of Kuwait with limited liability with
registration number 111743.
(nn)    “Joint Venture Amendment” means that certain agreement by and among the
shareholders of the Joint Venture amending certain provisions of the Joint
Venture agreement attached hereto as Exhibit C.
(oo)    “Joint Venture Side Letter” means a side letter among the shareholders
to the Joint Venture, waiving certain provisions of the Joint Venture agreement
in the form attached hereto as Exhibit D.
(pp)    “Joint Venture Trademarks” means any trademark, trademark registration,
trademark application, service mark, trade name, logo, business name or brand
name and all goodwill associated with the Joint Venture and its name “United
Precision Drilling” solely within the Territory.
(qq)    “Judgment” means any order, injunction, judgment, ruling, decree or
arbitration award in any Proceedings.
(rr)    “Knowledge” means, with respect to Seller, the (i) actual knowledge or
(ii) reasonable belief after due inquiry of the Persons listed in Section
1.1(rr) of the Seller Disclosure Schedule and, with respect to Purchaser, the
(A) actual knowledge or (B) reasonable belief after due inquiry, of those
Persons listed in Section 1.1(rr) of the Purchaser Disclosure Schedule.
(ss)    “Kuwait Assets” means all of the right, title and interest:

6
428928/HOUDMS 

--------------------------------------------------------------------------------

 

(i)    in and to the Purchased Equity (which right, title and interest are held
by the Equity Selling Entity); and
(ii)    in and to the following (which right, title and interest are held by the
entities set forth in Section 1.1(ss)(ii) of the Seller Disclosure Schedule):
(A)    the Rigs and related equipment (including transportation equipment) set
forth on Section 1.1(ss)(ii)(A) of the Seller Disclosure Schedule;
(B)    the Leases and other Contracts set forth in Section 3.11(a) of the Seller
Disclosure Schedule to which Rig Transport International (BVI) Ltd. is a party;
and
(C)    the Management Systems and all other equipment, inventories, including
raw materials, works in process, semifinished and finished products, replacement
and spare parts, packaging and labelling materials, operating supplies
(including all broached and unbroached provisions) and inventory in transit or
deposited in a warehouse, in each case related to the Rigs to the extent used or
intended for use in the Business in the State of Kuwait; and the right, title
and interest to the Business Intellectual Property and Records relating to the
Business in Kuwait (save to the extent the same is already vested in the Joint
Venture).
(tt)    “Law” means any federal, state, local or foreign, law, rule or
regulation, including Anti-Corruption Laws.
(uu)    “Leases” means those leases currently in place in respect of the Rigs
and transport equipment leased to the Joint Venture as set forth in Section
1.1(uu) of the Seller Disclosure Schedule.
(vv)    “Liability” means any liability or obligation, absolute or contingent,
accrued or unaccrued, known or unknown, matured or unmatured, liquidated or
unliquidated, due or to become due.
(ww)    “Loss” means any direct and actual losses or damages (including
reasonable attorney’s fees or other professional fees and expenses) and which
includes lost profits with respect to any Drilling Contract included in the
Purchased Assets or to which the Joint Venture is a party (subject to the
limitations and conditions set forth in Section 11.12), but excluding any
special, incidental, indirect, exemplary, punitive or consequential damages
(including amounts calculated as a multiple of earnings or other similar
measure).
(xx)    “Management Systems” means the management systems and processes
(including software and information technology) used by the Joint Venture in the
Business as set forth in Section 1.1(xx) of the Seller Disclosure Schedules.
(yy)    “Material Adverse Effect” means any event, change, circumstance, effect
or other matter that has (or can be reasonably expected to have) a material
adverse effect on (i) the financial condition or results of operations or the
goodwill of the Business or the Purchased Assets, taken as a whole, or (ii) the
ability of Seller or any Selling Entity to consummate timely the Contemplated
Transactions; provided that none of the following, either alone or in
combination, will constitute, or be considered in determining whether there has
been, a Material Adverse Effect: any event, change, circumstance, effect or
other matter resulting from or related to (A) changes in financial markets,
general economic conditions (including prevailing interest rates, exchange
rates, commodity prices and fuel costs) or political conditions, (B) any action
taken or not taken at the request of, or consented to by, Purchaser, (C) changes
in Laws, IFRS (or any other applicable accounting standards) or enforcement or
interpretation thereof, (D) any outbreak or escalation of war or major
hostilities or any act of sabotage or terrorism, or (E) volcanoes, tsunamis,
pandemics, earthquakes, hurricanes, tornados or other natural disasters; except
with respect to clauses (A), (C) and (D), only to the extent that such changes
disproportionately have a greater adverse impact on the Business, taken as a
whole, as compared to other companies operating in the same industries and
markets in which the Business operates.

7
428928/HOUDMS 

--------------------------------------------------------------------------------

 

(zz)    “Material Contract” means all Contracts included in the Purchased Assets
and all Contracts to which the Joint Venture is a party and which are disclosed
pursuant to Section 3.11(a).
(aaa)    “Novation Agreements” means the novation agreements to be entered into
by Weatherford Holdings (BVI) Ltd, the relevant Algerian Customer and
Purchaser’s Designated Affiliate in respect of the Algerian Contracted Rigs, in
such form as the Parties reasonably shall agree (such agreement not to be
unreasonably withheld).
(bbb)    “Ordinary Course” means the ordinary and usual course of the Business
consistent with past practice, including without limitation as it relates to the
operation and maintenance of the Rigs (and the replacement and refurbishment of
Rig inventory, spare parts and consumable materials).
(ccc)    “Other Taxes” means all Taxes of the Joint Venture, PD Cyprus and with
respect to the other Purchased Assets that are not Retained Taxes.
(ddd)    “PD Cyprus” means Precision Drilling (Cyprus) Limited, a private
company limited by shares incorporated in the Republic of Cyprus with
registration number 130185.
(eee)    “Permitted Encumbrance” means any (i) carrier’s, warehousemen’s,
mechanic’s, materialmen’s and other similar liens arising or incurred in the
Ordinary Course of the Business that do not materially detract from the value of
the property encumbered thereby, (ii) liens for Taxes that are not yet due and
payable or that are being contested in good faith, (iii) pledges or deposits
under workmen’s compensation Laws, unemployment insurance Laws or similar
legislation or guaranties and deposits to secure public or statutory obligations
of such entity, in each case to the extent securing obligations which constitute
Excluded Liabilities which are not overdue for payment and which will be paid by
Seller or its Affiliates immediately following any Closing pursuant to this
Agreement or any other Transaction Document and which when taken together with
all other Permitted Encumbrances do not secure an amount which in aggregate is
in excess of $50,000 and (iv) such other liens, Encumbrances or defects or
imperfections of title set forth in Section 1.1(eee) of the Seller Disclosure
Schedule.
(fff)    “Person” means an individual or an entity, including a corporation,
limited liability or other company, joint venture, partnership, trust,
association or other business or investment entity, or any Governmental
Authority.
(ggg)    “Post-Closing Period” means any Tax period that begins after the
Closing Date and the portion of any Straddle Period that begins after the
Closing Date.
(hhh)    “Pre-Closing Period” means any Tax period ending on or before the
Closing Date and the portion of any Straddle Period that ends on the Closing
Date.
(iii)    “Proceeding” means any action, mediation, arbitration, investigation,
litigation, enforcement proceeding or suit commenced, brought by or before, or
otherwise involving, any Governmental Authority court, tribunal, department
board, agency or arbitrator.
(jjj)    “Purchased Assets” means, collectively, the Algeria Assets and Kuwait
Assets.

8
428928/HOUDMS 

--------------------------------------------------------------------------------

 

(kkk)    “Purchased Equity” means the equity interests in PD Cyprus to be
transferred by the Equity Selling Entity to Purchaser (or a Designated
Affiliate) hereunder.
(lll)    “Records” all records and other storage media, regardless of form or
characteristics, containing Business Information or on or in which Business
Information is recorded or stored, whether machine-readable or not (including
computer disks, hard drives, servers, universal serial bus (USB) sticks, the
cloud, books, photographs and other documentary materials), but in each case
excluding portions of such items to the extent they are (i) included in, or
primarily related to, any assets of Seller or its Affiliates that are not
Purchased Assets or (ii) Excluded Liabilities.
(mmm)    “Release” means the release, spill, emission, leaking, pumping,
pouring, emptying, escaping, dumping, injection, deposit, disposal, discharge,
dispersal, leaching or migrating of any Hazardous Material into the environment.
(nnn)    “Retained Taxes” means all Taxes (i) borne or otherwise imposed by Law
on Seller, the Selling Entities or any of their Affiliates (for the avoidance of
doubt, other than PD Cyprus or the Joint Venture) with respect to such entity’s
income or capital gains as a result of the transfer of the Purchased Equity and
the Purchased Assets and (ii) of PD Cyprus and the Joint Venture and with
respect to the other Purchased Assets, in each case for or relating to (as
determined under Section 9.2) any Pre-Closing Period; provided that Retained
Taxes shall not include (a) any Taxes of the Joint Venture to the extent that a
provision or reserve for the Liability is made or the Liability is otherwise
taken into account, or its actual or assumed payment or discharge is taken into
account, on the Financial Statements, (b) any Transfer Taxes (other than
Transfer Taxes resulting from a wrongfully transferred Purchased Asset pursuant
to Section 9.4), and (c) any Taxes resulting from any non-ordinary course of
business transactions effectuated by Purchaser on the Closing Date, except for
those transactions, if any, expressly provided for in the Transaction Documents.
(ooo)    “Rigs” means, collectively, the drilling rigs set forth in Section
1.1(b)(i) and Section 1.1(ss)(ii)(A) of the Seller Disclosure Schedule, and
related drawings, operating manuals and other documents pertaining thereto.
(ppp)    “Schedule” means the Seller Disclosure Schedule or the Purchaser
Disclosure Schedule, as the context requires.
(qqq)    “Seller Plan” means any plan, fund or program maintained, sponsored or
contributed to by Seller, any Asset Selling Entity, or any of their respective
Affiliates, providing compensation (other than salary), benefits, pension,
retirement, superannuation, profit sharing, stock bonus, stock option, stock
purchase, phantom or stock equivalent, bonus, thirteenth month, incentive,
deferred compensation, hospitalization, medical, dental, vision, vacation, life
insurance, death benefit, sick pay, disability, severance, termination
indemnity, redundancy pay, fringe benefit or similar employee benefits to
Employees and former Employees, including officers and directors of the
Business, but excluding (a) any Contract, plan, fund or program required to be
maintained or contributed to by the Laws of the applicable jurisdiction and (b)
any governmental plan or program requiring the mandatory payment of social
insurance Taxes or similar contributions to a governmental fund with respect to
the wages of an Employee.
(rrr)    “Selling Entities” means the Asset Selling Entities and the Equity
Selling Entity.
(sss)    “Seller Parent” means Weatherford International plc, an Irish public
limited company.

9
428928/HOUDMS 

--------------------------------------------------------------------------------

 

(ttt)    “Sonatrach” means Sociėtė Nationale Pour La Recherche, La Production,
Le Transport, La Transformation et La Commercialisation de Hydrocarbures of
Algeria.
(uuu)    “Sponsored Plan” means Seller Plans that are maintained, sponsored,
contributed to or required to be contributed solely by the Joint Venture and
that provide coverage or benefits for the current or former employees of the
Joint Venture.
(vvv)    “Straddle Period” means any Tax period that begins before and ends
after the Closing Time.
(www)    “Subsidiary” means, with respect to a specified Person, any Person of
which securities having the power to elect a majority of that Person’s board of
directors or similar governing body, or otherwise having the power to direct the
business and policies of that Person are held by the specified Person or one or
more of its Subsidiaries.
(xxx)    “Tax” means (a) any country, state, local, or other tax, charge, fee,
duty (including customs duty), levy or assessment, including any income, gross
receipts, net proceeds, alternative or add-on minimum, corporation, ad valorem,
turnover, real property, personal property (tangible or intangible), sales, use,
franchise, excise, value added, stamp, leasing, lease, user, transfer, fuel,
excess profits, profits, occupational, premium, interest equalization, windfall
profits, severance, license, registration, payroll, environmental, capital
stock, capital duty, disability, estimated, gains, wealth, welfare, employee’s
income withholding, other withholding, unemployment or social security, housing
fund contributions, social security contributions, retirement savings fund
contributions or other tax or contributions of whatever kind (including any fee,
assessment or other charges or similar items in the nature of or in lieu of any
tax) that is imposed by any Governmental Authority and (b) any interest, fines,
penalties or additions resulting from, attributable to, or incurred in
connection with any item described in provision (a) of this definition or any
related contest or dispute.
(yyy)    “Tax Attributes” means any net operating loss, net capital loss,
investment tax credit, foreign tax credit, charitable deduction or any other
credit or tax attribute that could be carried forward or back to reduce Taxes
(including deductions and credits relating to alternative minimum Taxes).
(zzz)    “Tax Benefit” shall mean a current reduction in the Indemnified Party’s
Taxes (calculated net of any Tax detriment resulting from the receipt of any
indemnification payment) arising from a Tax deduction, credit or refund. In
computing the amount of any such Tax Benefit, the Indemnified Party shall be
deemed to recognize all other items of income, gain, loss, deduction or credit
before recognizing any item arising from the receipt of any indemnity payment
hereunder or the incurrence or payment of any indemnified Loss.
(aaaa)    “Tax Contest” means an audit, claim, demand, dispute or Proceeding
relating to Taxes.
(bbbb)    “Tax Return” means any report, return, declaration, claim for refund,
or information return or statement related to Taxes, including (without
limitation) any of the same which are required to be filed with any Governmental
Authority including any schedule or attachment thereto, and including any
amendment thereof.
(cccc)    “Termination Cap” means an amount equal to 7% of the Cash
Consideration as agreed liquidated damages.
(dddd)    “Territory” means, collectively, the People’s Democratic Republic of
Algeria and the State of Kuwait.

10
428928/HOUDMS 

--------------------------------------------------------------------------------

 

(eeee)    “Third Party” means any Person other than Seller, any Selling Entity,
the Joint Venture, Purchaser, and their respective Affiliates (and expressly
excluding any Employees or Independent Contractors).
(ffff)    “Trademark” means any trademark, trademark registration, trademark
application, service mark, trade name, logo, business name or brand name and all
goodwill associated with any trademark.
(gggg)    “Transaction Documents” means, collectively, this Agreement, the
Ancillary Agreements, the Joint Venture Amendment, the Joint Venture Side
Letter, the Escrow Agreement, the Transition Services Agreement, the Deeds of
Release, Assignment Agreements, Novation Agreements and any other agreements as
the Parties may mutually agree.
(hhhh)    “Transfer Taxes” means all transfer (including stock transfer),
documentary, sales, excise, use, registration, value-added, stamp, registration,
recording, and other similar Taxes (including any penalties, interest, and
additions to Tax) incurred in connection with the transfer of Purchased Assets
and the Purchased Equity by the Selling Entity to the Designated Affiliates of
Purchaser pursuant to this Agreement and the Contemplated Transactions.
(iiii)    “Transferring Employees” means all Employees who (i) receive and
accept an offer of employment from Purchaser or its Designated Affiliates or
(ii) continue to be employed by the Joint Venture, in each case as of the
applicable Closing Date.
(jjjj)    “Transition Services Agreement” means the transition services
agreement to be entered into between Seller and Purchaser in connection with
services to be provided by Seller or its Affiliates to the Business after the
Closing, substantially in the form attached hereto as Exhibit E.
(kkkk)    “Transitional Marks” means the Trademarks set forth in Section
1.1(kkkk) of the Seller Disclosure Schedule.
(llll)    “Treasury Regulations” means the regulations issued by the U.S.
Treasury Department under the Code.
(mmmm)    “U.S.” means the United States of America.

Section 1.2     Additional Defined Terms. For purposes of this Agreement and the
Transaction Documents, the following terms have the meanings specified in the
indicated Section of this Agreement:
Defined Term
Section
Agreement
Preamble
Algeria Cash Consideration
2.4
Asset Transfer Agreements
2.3
Balance Sheet
3.6(a)(ii)
Balance Sheet Date
3.6(a)(ii)
Bankruptcy and Equity Exception
3.2(a)
Business Intellectual Property
3.10
Business Leased Real Property
3.9(a)
Cash Consideration
2.4
Claim Notice
8.3(a)
Closing
2.7(a)

11
428928/HOUDMS 

--------------------------------------------------------------------------------

 

Closing Date
2.7(a)
Closing Time
2.7(a)
Controlling Party
8.3(d)
Deductible
8.5(a)
Deposit
2.4(a)
Dispute Notice
2.5(b)
Dispute Representatives
11.11(a)
Employees List
3.13(a)
Escrow Agent
2.4(a)
Escrow Agreement
2.4(a)
Excluded Liabilities
2.2
Final Allocation
2.6
Final Closing Net Cash
2.5(c)
Final Closing Net Working Capital
2.5(c)
Financial Statements
3.6(a)
Financing Commitments
4.7
ICC
11.11(b)
Indemnified Party
8.3(a)
Indemnifying Party
8.3(a)
Independent Accounting Firm
2.5(c)
Independent Contractors List
3.13(a)
Initial Closing
2.7(b)
Initial Closing Date
2.7(b)
Initial End Date
7.1(f)
KOC
5.16
Kuwait Cash Consideration
2.4
Net Working Capital and Net Cash Calculation
2.5(a)
Non-controlling Party
8.3(d)
Party
Preamble
PD Cyprus/Joint Venture Indemnified Party
Section 5.8
Purchase Price
2.4
Purchaser
Preamble
Purchaser Disclosure Schedule
Article 4
Purchaser Indemnified Parties
8.1
Recipient
9.3(a)
Relevant Amount
Section 5.11
Restructuring
5.15
Restructuring Plan
5.15
Rig Capital Expenditure Program
5.2(b)
Rules
11.11(b)
Seller
Preamble
Seller Disclosure Schedule
Article 3
Seller Guarantees
Section 5.11
Seller Indemnified Parties
8.2
Subsequent Closing
2.7(b)
Subsequent Closing Date
2.7(b)
Subsequent End Date
7.1(i)
Target Net Working Capital Amount
2.5(d)
Team Source
3.13(a)
Third Party Claim
8.3(b)
Transfer Agreements
2.3

12
428928/HOUDMS 

--------------------------------------------------------------------------------

 

Section 1.3    Construction. Any reference in this Agreement to an “Article,”
“Section,” “Exhibit” or “Schedule” refers to the corresponding Article, Section,
Exhibit or Schedule of or to this Agreement, unless the context indicates
otherwise. The table of contents and the headings of Articles and Sections are
provided for convenience only and are not intended to affect the construction or
interpretation of this Agreement. All words used in this Agreement are to be
construed to be of such gender or number as the circumstances require. The words
“including,” “includes,” or “include” are to be read as listing non-exclusive
examples of the matters referred to, whether or not words such as “without
limitation” or “but not limited to” are used in each instance. Where this
Agreement states that a party “shall”, “will” or “must” perform in some manner
or otherwise act or omit to act, it means that the party is legally obligated to
do so in accordance with this Agreement. Any reference to a statute is deemed
also to refer to any amendments or successor legislation as in effect at the
relevant time. Any reference to a Contract or other document as of a given date
means the Contract or other document as amended, supplemented and modified from
time to time through such date.
Section 1.4    Currency. Any monetary amount used or referred to under this
Agreement as of or after the Closing Date (as defined below) shall be in U.S.
Dollars. If any Law requires the use of a local currency, the conversion rate
from or to U.S. Dollars shall be calculated using the then-current spot currency
exchange rate as provided by Bloomberg as of 3:00 p.m. Houston, Texas time on
the Business Day prior to the day on which such monetary amount is required to
be determined pursuant to this Agreement.

Article 2
THE TRANSACTION

Section 2.1    Purchase and Sale of Purchased Assets. Upon the terms and subject
to the conditions of this Agreement, in one or two closings, Seller shall,
against the receipt by Seller of the consideration specified in Section 2.4,
cause each Selling Entity to sell, transfer and assign to Purchaser (or its
Designated Affiliates), and Purchaser shall purchase and acquire on behalf of
itself and its Designated Affiliates the Purchased Assets from the Selling
Entities, free and clear of all Encumbrances (except with respect to the
Purchased Assets other than the Rigs, which shall be sold, transferred and
assigned, free and clear of all Encumbrances other than Permitted Encumbrances).

Section 2.2    Assumption of Liabilities. Upon the terms and subject to the
conditions of this Agreement, effective at the time of any applicable Closing
(as defined below), Purchaser shall, or shall cause each applicable Designated
Affiliate to assume and timely satisfy, pay, perform and discharge when due the
Assumed Liabilities relating to the applicable Closing. Except as otherwise
provided herein, the Asset Selling Entities shall retain all Liabilities of the
Asset Selling Entities other than the Assumed Liabilities (the “Excluded
Liabilities”).
Section 2.3    Local Transfer Agreements. In furtherance of the purchase and
sale of the Purchased Assets pursuant to Section 2.1 and the assumption of the
Assumed Liabilities pursuant to Section 2.2, subject to the conditions in this
Agreement, at the applicable Closing the Parties shall and shall cause their
respective Affiliates to enter into (i) with respect to the Purchased Assets
(other than the Purchased Equity), short form asset transfer agreements in the
form attached hereto as Exhibit F (“Asset Transfer Agreement”), except for: (a)
the deletion of provisions which are inapplicable to the Purchased Assets or
Assumed Liabilities within the applicable jurisdiction; (b) such changes as may
be necessary to satisfy the requirements of applicable local Law, including any
delayed closing resulting from applicable Law; and (c) such changes as may be
reasonably agreed upon in writing by the Parties, and (ii) such other forms and
documents reasonably required to effect the transfer

13
428928/HOUDMS 

--------------------------------------------------------------------------------

 

of the Purchased Assets and assumption of the Assumed Liabilities, in each case
subject to the conditions of this Agreement and on a country-by-country basis
(collectively, the “Transfer Agreements”). The Transfer Agreements are intended
to be simple transfer agreements solely to reaffirm representations and
warranties as to title and certain other matters and to ensure compliance with
applicable local Laws relating to the transfer of the Purchased Assets and
Assumed Liabilities or to cause the transfer of the Purchased Assets and Assumed
Liabilities under applicable local Law, which cannot be accomplished through
this Agreement alone.

Section 2.4    Consideration. The consideration for the Purchased Assets (the
“Purchase Price”) consists of (i) the payment at the applicable Closing by
Purchaser of $135,000,000 for the Kuwait Assets (“Kuwait Cash Consideration”)
and $60,000,000 for the Algeria Assets (“Algeria Cash Consideration”) for a
total cash consideration of $195,000,000, in each case reduced by the amount of
any Backlog Deduction and any Excluded Rig Deduction, as applicable, calculated
on the applicable Closing Date (the “Cash Consideration”) and (ii) the
assumption by Purchaser of the Assumed Liabilities. The Purchase Price shall be
exclusive of any value added taxes, at any such Closing. The Cash Consideration
shall be paid as follows:
(a)    On the Effective Date, Purchaser, on behalf of itself and the Designated
Affiliates, is delivering an amount in cash in immediately available funds equal
to $29,250,000 (the “Deposit”) to U.S. Bank National Association, as escrow
agent (“Escrow Agent”), pursuant to the terms of this Section 2.4(a) and an
escrow agreement executed by Seller, Purchaser and the Escrow Agent prior to the
Effective Date (the “Escrow Agreement”). Seller has executed and delivered this
Agreement first and immediately on Purchaser’s execution and delivery of this
Agreement, Purchaser has provided Seller a copy of wire instructions (in the
form of a SWIFT code and related paperwork) evidencing the sending of the
Deposit funds via wire pursuant to which the Deposit is being delivered to the
Escrow Agent. At the Initial Closing, the Deposit (together with any accrued
interest thereon) less 50% of the fees and expenses of the Escrow Agent, shall
be credited against the Purchase Price and paid to Seller pursuant to the Escrow
Agreement; provided that if there is an Initial Closing at which only the Kuwait
Assets or Algeria Assets are sold, the Deposit shall be credited against the
Purchase Price and paid to Seller as follows: (i) if the Kuwait Assets are sold
in the Initial Closing, then $20,250,000 (together with any accrued interest
thereon), less 50% of the fees and expenses of the Escrow Agent, shall be
credited against the Kuwait Cash Consideration and paid to Seller at the Initial
Closing, with the remainder to be held in escrow by the Escrow Agent and
credited against the remainder of the Purchase Price and paid to Seller at the
relevant Subsequent Closing and (ii) if the Algeria Assets are included in the
Initial Closing, then $9,000,000 (together with any accrued interest thereon),
less 50% of the fees and expenses of the Escrow Agent, shall be credited against
the Algeria Cash Consideration and paid to Seller at the Initial Closing, with
the remainder to be held in escrow by the Escrow Agent and credited against the
remainder of the Purchase Price and paid to Seller at the relevant Subsequent
Closing. Seller shall pay 50% of the fees and expenses of the Escrow Agent on
any Closing. If this Agreement is terminated in accordance with Section 7.1, the
Deposit shall be distributed in accordance with Section 7.3(b).
(b)    Subject to the terms and conditions of this Agreement, and subject
further to Section 2.4(c), at the Initial Closing, Purchaser, on behalf of
itself and the Designated Affiliates, shall (i) pay to Seller, on behalf of
itself and the Designated Affiliates, the Cash Consideration (less the amount of
any Backlog Deduction or Excluded Rig Deduction, as applicable), less the amount
to be credited against the Purchase Price in accordance with Section 2.4(a), to
such bank account(s) of Seller or the Selling Entities designated by Seller and
(ii) assume, or cause its Designated Affiliates to assume, the Assumed
Liabilities.
(c)    In the event there is an Initial Closing at which only the Kuwait Assets
or Algeria Assets are sold, at the Initial Closing, Purchaser, on behalf of
itself and the Designated Affiliates, shall (i) pay to Seller, on behalf of
itself and the Designated Affiliates, the Kuwait Cash Consideration or the
Algeria Cash Consideration

14
428928/HOUDMS 

--------------------------------------------------------------------------------

 

(less the amount of any Backlog Deduction or Excluded Rig Deduction, as
applicable), less the amount to be credited against the Purchase Price in
accordance with Section 2.4(a), to such bank account(s) of Seller or the Selling
Entities designated by Seller and (ii) assume, or cause its Designated
Affiliates to assume, the Assumed Liabilities relating to the Kuwait Assets or
Algeria Assets, as applicable. At any Subsequent Closing, Purchaser, on behalf
of itself and the Designated Affiliates, shall (A) pay to Seller, on behalf of
itself and the Designated Affiliates, the Kuwait Cash Consideration or the
Algeria Cash Consideration (less the amount of any Backlog Deduction or Excluded
Rig Deduction, as applicable), less the amount to be credited against the
Purchase Price in accordance with Section 2.4(a), to such bank account(s)
designated by Seller and (B) assume, or cause its Designated Affiliates to
assume, the Assumed Liabilities relating to the Kuwait Assets or Algeria Assets,
as applicable.

Section 2.5    Working Capital Adjustment.
(a)    Within 60 days after the Closing Date, Purchaser shall prepare and
deliver to Seller a written notice containing Purchaser’s good faith calculation
of (i) the Closing Net Working Capital, including the components thereof and in
a manner consistent with the definition thereof and (ii) the Closing Net Cash,
including the components thereof and in a manner consistent with the definition
thereof (collectively, the “Net Working Capital and Net Cash Calculation”).
(b)    After receipt of the Net Working Capital and Net Cash Calculation, Seller
shall have 60 days to review the Net Working Capital and Net Cash Calculation
and, if applicable, prepare written notice of any dispute regarding the Net
Working Capital and Net Cash Calculation (a “Dispute Notice”). During such 60
day period, Purchaser shall, and shall cause each of its Affiliates to, provide
Seller and Seller’s representatives with full access to the books, records,
facilities and Transferring Employees, including providing the work papers used
in the preparation of, and the other written documentation supporting the basis
of, Purchaser’s determination of the Net Working Capital and Net Cash
Calculation, as may be reasonably necessary for Seller and its Affiliates and
their respective representatives to evaluate the Net Working Capital and Net
Cash Calculation. If Seller does not deliver a Dispute Notice to Purchaser
within 60 days after receipt of the Net Working Capital and Net Cash
Calculation, the Net Working Capital and Net Cash Calculation shall be deemed
the Final Closing Net Working Capital and Final Closing Net Cash for all
purposes hereunder. Prior to the end of such 60 day period, Seller may accept
the Net Working Capital and Net Cash Calculation by delivering written notice to
that effect to Purchaser, in which case the Net Working Capital and Net Cash
Calculation shall be deemed the Final Closing Net Working Capital and the Final
Closing Net Cash for all purposes hereunder when such notice is given.
(c)    If Seller timely delivers a Dispute Notice to Purchaser, then the Parties
will attempt in good faith, for a period of 30 days, to resolve such dispute.
Any resolution by the Parties during such 30 day period as to any disputed items
must be in writing and will be final and binding on the Parties for purposes of
Section 2.5(d). If the Parties do not resolve all disputed items by the end of
30 days after the date of delivery of the Dispute Notice, then the Parties will
submit the remaining items in dispute to Deloitte Touche Tohmatsu Limited for
resolution, or if that firm is unwilling or unable to serve, the Parties will
engage another mutually agreeable independent accounting firm of recognized
international standing, which firm is not the regular auditing firm of Purchaser
or Seller. If the Parties are unable to jointly select such independent
accounting firm within 10 days after such 30 day period, Purchaser, on the one
hand, and Seller, on the other hand, will each select an independent accounting
firm of recognized international standing and such selected accounting firms
will select a third independent accounting firm of recognized national standing,
which firm is not the regular auditing firm of Purchaser or Seller; provided
that if either Purchaser, on the one hand, or Seller, on the other hand, fail to
select such independent accounting firm during this such 10 day period, then the
Parties agree that the independent

15
428928/HOUDMS 

--------------------------------------------------------------------------------

 

accounting firm selected by the other Party will be the independent accounting
firm selected by the Parties for purposes of this Section 2.5(c) (such selected
independent accounting firm, the “Independent Accounting Firm”). Purchaser and
Seller will instruct the Independent Accounting Firm to render its determination
with respect to the items in dispute in a written report that specifies the
conclusions of the Independent Accounting Firm as to each item in dispute and
the resulting Net Working Capital and Net Cash Calculation. The Independent
Accounting Firm shall render its determination within 45 days after referral of
the items to such firm. The Independent Accounting Firm’s determination of the
Net Working Capital and Net Cash Calculation as set forth in its report will be
final and binding on the Parties for purposes of Section 2.5(d). The fees and
expenses of the Independent Accounting Firm will be shared by Purchaser and
Seller in inverse proportion to the relative amounts of the disputed amount
determined to be for the account of Purchaser and Seller, respectively. For
purposes of complying with this Section 2.5(c), Purchaser and Seller will
furnish to each other and to the Independent Accounting Firm such work papers
and other documents and information relating to the disputed items as the
Independent Accounting Firm may request and are available to that Party (or its
independent public accountants) and will be afforded the opportunity to present
to the Independent Accounting Firm any material related to the disputed items
and to discuss the items with the Independent Accounting Firm. Seller and
Purchaser shall revise the Net Working Capital and Net Cash Calculation to
reflect the resolution of any disputes with respect thereto pursuant to this
Section 2.5(c) and, as so revised, such Net Working Capital and Net Cash
Calculation shall be deemed to set forth the final Closing Net Working Capital
(the “Final Closing Net Working Capital”) and the final Closing Net Cash (the
“Final Closing Net Cash”) for all purposes hereunder.
(d)    If the Final Closing Net Working Capital as finally determined pursuant
to this Section 2.5 is less than $41,562,000 (the “Target Net Working Capital
Amount”), then Seller shall pay to Purchaser the amount of such difference in
cash. If the Final Closing Net Working Capital as finally determined pursuant to
this Section 2.5 is greater than the Target Net Working Capital Amount, then
Purchaser shall pay to Seller the amount of such difference in cash. If the
Final Closing Net Cash as finally determined pursuant to this Section 2.5 is
less than $0, then Seller shall pay to Purchaser the amount of such difference
in cash. If the Final Closing Net Cash as finally determined pursuant to this
Section 2.5 is greater than $0, then Purchaser shall pay to Seller the amount of
such difference in cash. Any payment to Purchaser or Seller, as applicable,
pursuant to this Section 2.5 will be effected by wire transfer of immediately
available funds to an account designated by Purchaser or Seller, as applicable.
Such payments will be made within five Business Days following the final
determination of the Final Closing Net Working Capital and Final Closing Net
Cash in accordance with this Section 2.5. Any amounts payable by Seller or
Purchaser pursuant to this Section 2.5(d) shall be offset and reduced by the
amount payable to Seller or Purchaser, as applicable, by the other Party
pursuant to this Section 2.5(d).
(e)    The purpose of this Section 2.5 is to determine the final Purchase Price
to be paid by Purchaser under this Agreement. Accordingly, any adjustment
pursuant hereto will not be deemed to be an indemnification pursuant to Article
8. In no event will Seller be obligated to indemnify any Purchaser Indemnified
Party under Article 8 for any Loss as a result of, or based upon or arising
from, any Liability, to the extent such Liability is reflected in the
calculation of the Final Closing Net Working Capital or Final Closing Net Cash
as finally determined pursuant to this Section 2.5 and Article 8 and Article 9
shall not apply to this Section 2.5. Any payment made pursuant to this Section
2.5 will be treated by the Parties for all purposes as an adjustment to the
Purchase Price (and the Kuwait Cash Consideration comprised therein) and will
not be subject to offset for any reason.

Section 2.6    Allocation of Purchase Price. Seller and Purchaser agree to
allocate the Purchase Price for all Tax and Purchaser’s financing purposes in
accordance with the consideration paid for each of the Kuwait Assets and Algeria
Assets as set forth in Exhibit G (the “Final Allocation”). Each of Seller and
Purchaser and their respective Affiliates shall (a) timely file all forms and
Tax Returns required to be filed in connection with the Final Allocation, (b) be
bound by such Final Allocation for purposes of determining Taxes

16
428928/HOUDMS 

--------------------------------------------------------------------------------

 

related to the transfer of the Purchased Assets, (c) prepare and file, or cause
to be prepared and filed, its Tax Returns on a basis consistent with such Final
Allocation and (d) take no position, or cause no position to be taken,
inconsistent with such Final Allocation on any applicable Tax Return, in any
Proceeding before any Governmental Authority, in any report made for Tax
purposes, in any Tax litigation, or otherwise with respect to any Tax. If the
Final Allocation is disputed by any Governmental Authority, the Party receiving
notice of such dispute will promptly notify the other Party concerning the
existence and resolution of such dispute and the Parties agree to use their
commercially reasonable best efforts to defend such Final Allocation in such
dispute. The Parties acknowledge that the Final Allocation shall not be binding
in relation to claims, disputes or Proceedings other than those within the scope
of this Section 2.6.
Section 2.7    Closing.
(a)    The consummation of the Contemplated Transactions shall take place at one
or two closings (each, a “Closing”) at the offices of Baker & McKenzie LLP, 700
Louisiana Street, Suite 3000, Houston, Texas, 77002 U.S., at 10:00 a.m., local
time, on the third Business Day following the satisfaction or waiver by the
relevant Party of the conditions to the obligations of the Parties set forth in
Article 6 (other than those conditions that by their nature are to be satisfied
at the related Closing, but subject to the fulfillment or waiver by the relevant
Party of those conditions), or at such other place or at such other time or on
such other date as the Parties may mutually agree in writing (any such date, the
“Closing Date”). For all purposes under this Agreement and each of the
Transaction Documents, all matters at the applicable Closing will be considered
to take place simultaneously, no delivery of any document will be deemed
complete until all transactions and deliveries of documents are completed, and
the applicable Closing will be deemed to have occurred at such time as mutually
agreed on the Closing Date (the “Closing Time”), on the applicable Closing Date
irrespective of the actual occurrence of the Closing at any particular time on
the applicable Closing Date.
(b)    At the initial Closing (the “Initial Closing” the date of which shall be
the “Initial Closing Date”), the purchase and sale of all of the Purchased
Assets shall be consummated upon satisfaction or waiver of the conditions set
forth in Section 6.1 and Section 6.2 (other than those conditions that by their
nature are to be satisfied at the related Closing, but subject to the
fulfillment or waiver of those conditions); provided, however, that if the
satisfaction or waiver of the conditions set forth in Section 6.1 and Section
6.2 (other than those conditions that by their nature are to be satisfied at the
related Closing, but subject to the fulfillment or waiver of those conditions)
has not occurred with respect to either the Kuwait Assets or Algeria Assets (but
has occurred with respect to one such group of assets in respect of all the
Purchased Assets in such group), then the purchase and sale of the Kuwait Assets
or the Algeria Assets (as the case may be) for which the conditions in Section
6.1 and Section 6.2 have been satisfied or waived shall be included in the
Initial Closing, and the Kuwait Assets or the Algeria Assets (as the case may
be) for which the conditions have not been satisfied or waived shall be excluded
from the Initial Closing, and the purchase and sale thereof shall be consummated
at a subsequent Closing promptly after the satisfaction of the conditions set
forth in Section 6.3 and Section 6.4 (such subsequent Closing, a “Subsequent
Closing” the date of which shall be the “Subsequent Closing Date”). For the
avoidance of doubt notwithstanding anything else in this Agreement, there shall
be no Closing in respect of part of the Kuwait Assets only or part of the
Algeria Assets only.

Section 2.8    Initial Closing Deliverables.
(a)    At the Initial Closing, Seller shall deliver, or cause to be delivered,
to Purchaser:
(i)    the Transaction Documents applicable to the Initial Closing (and any
deliverables required at Closing under the terms of those Transaction Documents)
executed by Seller, any Selling Entity or the Joint Venture, or their respective
Affiliates, as applicable;

17
428928/HOUDMS 

--------------------------------------------------------------------------------

 

(ii)    if the Kuwait Assets are sold in the Initial Closing, (A) all
certificates (if any) representing the Purchased Equity, together with duly
executed instruments of transfer related thereto, (B) documents accepting the
resignations referred to in Section 2.8(a)(iii), (C) a document revoking the
current bank mandates of the Joint Venture and PD Cyprus and resolving to
replace them with new bank mandates appointing the signatories to those accounts
required by Purchaser, in form and substance reasonably satisfactory to
Purchaser and (D) a legal opinion addressed to Purchaser and its Designated
Affiliate that will purchase the Purchased Equity from Dr. K. Chrysostomides &
Co LLC, as Cypriot counsel to Seller, confirming that the effect of the
Restructuring is that PD Cyprus will be liable for the specific liabilities as
set forth in the Restructuring Plan and attaching a certified copy of the court
order effecting the Restructuring Plan as filed with the Registrar of Companies
in Cyprus;
(iii)    subject to Section 5.16, if the Kuwait Assets are sold in the Initial
Closing, resignations, effective as of the Initial Closing Date, of each
director and officer of PD Cyprus that has been appointed by the Equity Selling
Entity and each director and officer of the Joint Venture that has been
appointed by PD Cyprus, to the extent requested in writing by Purchaser;
(iv)    a certificate, dated as of the Closing Date, executed by Seller
confirming the satisfaction of the conditions specified in Section 6.1(a) and
6.1(b) and the incumbency of each officer of Seller and any Selling Entity
executing this Agreement and any Transaction Document;
(v)    a copy of the resolutions of the board of directors (or equivalent
governing body) of Seller and each Selling Entity authorizing the execution of
this Agreement, any amendment thereof, and the Transaction Documents to which
they are a party, and a certified excerpt of the resolutions of the board of
directors of Seller Parent approving the Contemplated Transactions; and
(vi)    such evidence as Purchaser shall reasonably require that all payments
and other benefits due to any Employee due to the consummation of the sale of
the Algeria Assets or Kuwait Assets, as applicable, at the Initial Closing as
referred to in Section 3.13(c) of the Seller Disclosure Schedule have been
settled by Seller.
(b)    At the Initial Closing, Purchaser shall deliver, or cause to be
delivered, to Seller:
(i)    such part of the Cash Consideration as is due in accordance with Section
2.4 by wire transfer of immediately available funds into the account(s)
designated in writing by Seller;
(ii)    the Transaction Documents applicable to the Initial Closing executed by
Purchaser or the Designated Affiliates, or their respective Affiliates, as
applicable;
(iii)    a certificate, dated as of the Closing Date, executed by Purchaser
confirming the satisfaction of the conditions specified in Section 6.2(a) and
6.2(b) and the incumbency of each officer of Purchaser and any Designated
Affiliate executing this Agreement and any Transaction Document; and
(iv)    a copy of the resolutions of the board of directors (or equivalent
governing body) of Purchaser and each Designated Affiliate authorizing the
execution of this Agreement, any amendment thereof, and the Transaction
Documents to which they are a party.

18
428928/HOUDMS 

--------------------------------------------------------------------------------

 

Section 2.9    Subsequent Closing Deliverables.
(a)    At any Subsequent Closing, Seller shall deliver, or cause to be
delivered, to Purchaser:
(i)    the Transaction Documents applicable to the Subsequent Closing (and any
deliverables required at Closing under the terms of those Transaction
Documents), executed by Seller, any Selling Entity, or their respective
Affiliates, as applicable;
(ii)    if the Kuwait Assets are sold in the Subsequent Closing, (A) all
certificates (if any) representing the Purchased Equity, together with duly
executed instruments of transfer related thereto, (B) documents accepting the
resignations referred to in Section 2.9(a)(iii), (C) a document revoking the
current bank mandates of the Joint Venture and PD Cyprus and resolving to
replace them with new bank mandates appointing the signatories to those accounts
required by Purchaser, in form and substance reasonably satisfactory to
Purchaser and (D) a legal opinion addressed to Purchaser and its Designated
Affiliate that will purchase the Purchased Equity from Dr. K. Chrysostomides &
Co LLC, as Cypriot counsel to Seller, confirming that the effect of the
Restructuring is that PD Cyprus will be liable for the specific liabilities as
set forth in the Restructuring Plan and attaching a certified copy of the court
order effecting the Restructuring Plan as filed with the Registrar of Companies
in Cyprus;
(iii)    subject to Section 5.16, if the Kuwait Assets are sold in the
Subsequent Closing, resignations, effective as of the Subsequent Closing Date,
of each director and officer of PD Cyprus that has been appointed by the Equity
Selling Entity and each director and officer of the Joint Venture that has been
appointed by PD Cyprus, to the extent requested in writing by Purchaser;
(iv)    a certificate, dated as of the Closing Date, executed by Seller
confirming the satisfaction of the conditions specified in Section 6.3(a) and
Section 6.3(b) and the incumbency of each officer of Seller and any Selling
Entity executing this Agreement and any Transaction Document and certifying that
the resolutions referred to in Section 2.8(a)(v) remain in full force and effect
and have not been amended or revoked; and
(v)    such evidence as Purchaser shall reasonably require that all payments and
other benefits due to any Employee due to the consummation of the sale of the
Algeria Assets or Kuwait Assets, as applicable, at the Initial Closing as
referred to in Section 3.13(c) of the Seller Disclosure Schedule have been
settled by the Seller.
(b)    At any Subsequent Closing, Purchaser shall deliver, or cause to be
delivered, to Seller:
(i)    such portion of the Cash Consideration as is due in accordance with
Section 2.4 by wire transfer of immediately available funds into the account(s)
designated in writing by Seller;
(ii)    the Transaction Documents applicable to the Subsequent Closing, executed
by Purchaser or the Designated Affiliates, or their respective Affiliates, as
applicable; and
(iii)    a certificate, dated as of the Closing Date, executed by Purchaser
confirming the satisfaction of the conditions specified in Section 6.4(a) and
Section 6.4(b) and the incumbency of each officer of Purchaser and any
Designated Affiliate executing this Agreement and any Transaction Document and
certifying that the resolutions referred to in Section 2.8(b)(iv) remain in full
force and effect and have not been amended or revoked.

19
428928/HOUDMS 

--------------------------------------------------------------------------------

 

Section 2.10    No Ongoing or Transition Services. Except as provided for in
this Agreement and the Transition Services Agreement, which shall be limited in
scope to the transition services set forth therein at the applicable Closing,
Seller shall not be required to provide any management, facilities, data
processing, accounting, insurance, banking, personnel, legal, compliance,
communications and other services and related products to Purchaser or any of
its respective Affiliates after the applicable Closing, it being acknowledged
and agreed that (except as set out therein) all such services and products,
including any Contracts or understandings with respect thereto, will cease and
terminate at the applicable Closing without any further action or Liability on
the part of Seller or its Affiliates.
Section 2.11    Intercompany Accounts. On or prior to the Initial Closing Date:
(a)    Except as set forth in Section 2.11(a) of the Seller Disclosure Schedule,
all intercompany accounts and Indebtedness owed by or among Seller or its
Affiliates, on the one hand, and the Joint Venture, on the other hand, shall be
cancelled, paid or otherwise settled by Seller or its Affiliates; provided,
however, that the Parties agree that for the cancellation of intercompany
accounts and Indebtedness of up to an aggregate of $10,000,000 pursuant to this
Section 2.11(a) Purchaser shall be responsible for any Liability for Taxes
incurred by the Joint Venture in connection with such cancellation, and for the
cancellation of intercompany accounts and Indebtedness in excess of $10,000,000,
Seller shall be responsible for any Liability for Taxes incurred by the Joint
Venture in connection with such cancellation.
(b)    Except as set forth in Section 2.11(b) of the Seller Disclosure Schedule,
all intercompany leases and other agreements related to the Business between or
among Seller or its Affiliates, on the one hand, and the Joint Venture, on the
other hand, shall be cancelled, paid or otherwise settled by Seller or its
Affiliates.
(c)    No adjustment shall be made to the Purchase Price as a result of any such
cancellation, payment or settlement pursuant to this Section 2.11.
Section 2.12    Consents. Save as provided for herein, neither this Agreement
nor any Ancillary Agreement effects an assignment of any Material Contract or
any other Purchased Asset if applicable local Law would nevertheless deem this
Agreement or any Ancillary Agreement to be an assignment, and such constructive
assignment thereof, without the consent of a Third Party, would constitute a
breach or other contravention thereof or would be ineffective with respect to
any party thereto, and with respect to any such Material Contract or other
Purchased Asset, the Parties will use commercially reasonable best efforts to
obtain as promptly as practicable after the Closing the consent of the
applicable Third Party or, alternatively, written confirmation from such Third
Party reasonably satisfactory to the Parties that such consent is not required.
In no event, however, will Seller or any of its Affiliates or Purchaser or its
Affiliates be obligated to pay any money to any Person or to offer or grant
other financial or other accommodations to any Person or otherwise incur any
Liability in connection with obtaining any consent, waiver, confirmation,
novation or approval with respect to any such Material Contract or other
Purchased Asset. Except as required by in Section 6.1(c), Section 6.2(c);
Section 6.3(c) or Section 6.4(c), the failure by Purchaser or Seller to obtain
any required consent, waiver, confirmation, novation or approval with respect to
any such Material Contract or other Purchased Asset will not relieve any Party
from its obligation to consummate the Contemplated Transactions at the Closing
unless such failure shall constitute a Material Adverse Effect. If and when such
consent, waiver, confirmation, novation or

20
428928/HOUDMS 

--------------------------------------------------------------------------------

 

approval is obtained, Seller shall promptly transfer and assign such Material
Contract or other Purchased Asset to Purchaser in accordance with this
Agreement. For the avoidance of doubt nothing in this Section 2.12 shall apply
to the Drilling Contracts subject of the Novation Agreements. Unless and until
any Material Contract or other Purchased Asset is assigned, Seller shall procure
that the party to such Material Contract or owner of such Purchased Asset
continue its corporate existence and shall hold such Material Contract, or
Purchased Asset and any monies, goods or other benefits received thereunder as
trustee for Purchaser and its Designated Affiliates in title absolutely.
Purchaser shall (if such sub-contracting is permissible and lawful under the
Material Contract in question), as sub-contractor, perform all the obligations
under such Material Contract and, where sub-contracting is not permissible,
Purchaser shall perform such obligations as agent and unless and until any such
Material Contract is assigned, Seller shall give all such assistance as
Purchaser may reasonably require to enable Purchaser to enforce its rights under
such Material Contract and (without limitation) shall provide access to all
relevant books, documents and other information in relation to such Material
Contract as Purchaser may require from time to time. If a Third Party consent to
assignment of a Material Contract is refused, or otherwise not obtained on terms
reasonably satisfactory to Purchaser within 90 Business Days of the relevant
Closing, Purchaser shall be entitled to require Seller to serve proper notice to
terminate that Material Contract. For the avoidance of doubt, this Section 2.12
shall not apply to require the assignment or transfer by the Joint Venture of
the rights or obligations of the Joint Venture under any Material Contract to
which the Joint Venture is a party.

Article 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser (i) as of the Effective Date, (ii)
as of the Initial Closing Date, and (iii) if there is a Subsequent Closing, as
of each Subsequent Closing Date, in each case solely with respect to the
applicable Territory and underlying Business, except as set forth on the
disclosure schedule delivered by Seller to Purchaser concurrently with the
execution and delivery of this Agreement and effective as of the Effective Date
(the “Seller Disclosure Schedule”), as follows:
Section 3.1    Organization and Good Standing. Seller is a Swiss company with
limited liability, validly existing and in good standing under the Laws of
Switzerland. Seller Parent, each Selling Entity, PD Cyprus and the Joint Venture
is a corporation or other legal entity validly existing and in good standing (to
the extent such concept is applicable in the relevant jurisdiction) under the
Laws of its jurisdiction of its organization.
Section 3.2    Authority and Enforceability.
(a)    Seller and Seller Parent each have all requisite power and authority to
execute and deliver this Agreement and to perform its obligations under this
Agreement. The execution, delivery and performance of this Agreement and the
consummation of the Contemplated Transactions has been duly authorized by all
necessary action on the part of Seller and Seller Parent. Seller and Seller
Parent have each duly and validly executed and delivered this Agreement and
assuming the due authorization, execution and delivery of this Agreement by
Purchaser, this Agreement constitutes the valid and binding obligation of Seller
and Seller Parent, respectively, enforceable against Seller and Seller Parent,
respectively, in accordance with its terms, subject to (i) Laws of general
application relating to bankruptcy, insolvency and the relief of debtors and
(ii) Laws governing specific performance, injunctive relief and other equitable
remedies (the “Bankruptcy and Equity Exception”).
(b)    Seller and the Selling Entities have all requisite power and authority to
execute and deliver such other Transaction Documents to which they are a party
and to perform their obligations under such Transaction Documents to which they
are a party. The execution, delivery and performance by Seller and each Selling
Entity of each Transaction Document to which it shall be a party, and the
consummation by such entity of the transactions contemplated thereby, will be,
prior to the applicable Closing, duly authorized by all necessary action on the
part of Seller and each Selling Entity that is party thereto.

21
428928/HOUDMS 

--------------------------------------------------------------------------------

 

Each Transaction Document, assuming the due authorization, execution and
delivery of such Transaction Document by the other parties thereto, will
constitute the valid and binding obligation of Seller and each Selling Entity
that is party thereto, enforceable against Seller and each such Selling Entity
in accordance with its terms, subject to the Bankruptcy and Equity Exception.

Section 3.3    No Conflict. Neither the execution and delivery of this Agreement
by Seller or Seller Parent, or the execution and delivery of any other
Transaction Document by Seller, Seller Parent or the Selling Entities, nor the
consummation by Seller, Seller Parent or the Selling Entities of the
Contemplated Transactions (a) violates the articles of association or other
applicable charter or organizational documents of Seller, Seller Parent or the
Selling Entities, (b) results in a material breach or material default under, or
create in any Person the right to terminate, cancel, accelerate or modify, or
require any notice, consent or waiver under, any Material Contract, or relieves
any Person of any material obligation owed under a Material Contract, (c)
violates any Law, Judgment or Governmental Authorization applicable to Seller,
Seller Parent or the Selling Entities (in each case only to the extent it
relates to the Business) or (d) requires Seller, Seller Parent or any Selling
Entity to obtain any Governmental Authorization or make any filing with any
Governmental Authority other than (i) compliance with the applicable
requirements of the Securities Act of 1933 and the Securities Exchange Act of
1934, (ii) compliance with the rules and regulations of the New York Stock
Exchange, (iii) filings and Governmental Authorizations required under, and
compliance with other applicable requirements of Antitrust Laws and (iv)
compliance with any applicable state or provincial securities or blue sky Laws.

Section 3.4    Capitalization and Ownership of PD Cyprus
(a)    Section 3.4(a) of the Seller Disclosure Schedule sets forth a list of all
the issued and outstanding shares of capital stock of PD Cyprus and the owner of
such shares. The shares of capital stock set forth in Section 3.4(a) of the
Seller Disclosure Schedule held by the Equity Selling Entity represents 100% of
the issued and outstanding shares of the capital stock of PD Cyprus and the
Equity Selling Entity is the record and beneficial owner of such shares of PD
Cyprus. All shares of PD Cyprus held by the Equity Selling Entity are duly
authorized, validly issued, fully paid and nonassessable. Such shares of capital
stock of PD Cyprus held by the Equity Selling Entity are free and clear of all
Encumbrances, other than Permitted Encumbrances.
(b)    There are no Contracts to which Seller, the Equity Selling Entity or any
other Person is a party or bound with respect to the voting (including voting
trusts or proxies) of the capital stock of PD Cyprus. There are no outstanding
or authorized options, warrants, rights, agreements or commitments to which PD
Cyprus is a party or which are binding upon PD Cyprus providing for the issuance
or redemption of any shares of its capital stock.
(c)    Following the consummation of the Restructuring and at the Closing in
respect of the Kuwait Assets, PD Cyprus will not own capital stock of any entity
other than the Joint Venture, and will have the specific assets and liabilities
as set forth in the Restructuring Plan.

Section 3.5    Capitalization and Ownership of the Joint Venture.
(a)    Section 3.5(a) of the Seller Disclosure Schedule sets forth a list of all
the issued and outstanding shares of capital stock of the Joint Venture and, to
Seller’s Knowledge (other than with respect to such shares of capital stock held
by PD Cyprus) the owner of such shares. The shares of capital stock set forth in
Section 3.5(a) of the Seller Disclosure Schedule held by PD Cyprus represents
47.5% of the issued and outstanding shares of the capital stock of the Joint
Venture, and PD Cyprus is the record and beneficial owner of such shares of the
capital stock of the Joint Venture as set forth in Section 3.5(a) of the Seller
Disclosure Schedule. All shares of the Joint Venture held by PD Cyprus are duly
authorized, validly issued, fully paid and nonassessable. Such shares of capital
stock of the Joint Venture held by PD Cyprus are free and clear of all
Encumbrances, other than

22
428928/HOUDMS 

--------------------------------------------------------------------------------

 

Permitted Encumbrances. To Seller’s Knowledge, the shares held by PD Cyprus rank
pari passu in all respects with all other issued and outstanding shares of the
Joint Venture.
(b)    There are no Contracts to which Seller or PD Cyprus or, to Seller’s
Knowledge, any other Person, is a party or bound with respect to the voting
(including voting trusts or proxies) of the capital stock of the Joint Venture.
There are no outstanding or authorized options, warrants, rights, agreements or
commitments to which the Joint Venture is a party or which are binding upon the
Joint Venture providing for the issuance or redemption of any shares of its
capital stock.
(c)    The Joint Venture has no Subsidiaries (and never has had any
Subsidiaries) and does not own or have any rights to acquire, directly or
indirectly, any capital stock or equity interests of any Person and does not
have (and never has had) any branch, place of business, representative office or
other establishment whether permanent or otherwise outside of Kuwait.

Section 3.6    Financial Statements.
(a)    Attached as Section 3.6 of the Seller Disclosure Schedule are the
following financial statements (collectively, the “Financial Statements”):
(i)    audited balance sheet of the Joint Venture as of December 31, 2016 and
the related audited consolidated statements of operations, comprehensive loss
and cash flows for the year then ended;
(ii)    audited balance sheet of the Joint Venture (the “Balance Sheet”) as of
December 31, 2017 (the “Balance Sheet Date”), and the related audited
consolidated statements of operations, comprehensive loss and cash flows for the
year then ended;
(iii)    unaudited management accounts of the Joint Venture comprising a balance
sheet as of February 28, 2018 and the related unaudited consolidated statements
of operations for the period then ended; and
(iv)    unaudited management accounts of PD Cyprus comprising a balance sheet as
of March 31, 2018 and the related unaudited consolidated statements of
operations for the period then ended.
(b)    The Financial Statements fairly present in all material respects the
financial condition and results of operations of the Joint Venture and PD
Cyprus, respectively, as of the respective dates thereof and for the periods
indicated therein, all in accordance with IFRS; provided that the Financial
Statements and the foregoing representations and warranties are qualified by the
fact that neither the Joint Venture, PD Cyprus nor Business have operated as
separate standalone entities and therefore the Financial Statements do not
include all of the costs necessary for the Joint Venture, PD Cyprus or its
Business to operate as a separate standalone entity.
(c)    As of the Effective Date, there are no material Liabilities with respect
to the Business of PD Cyprus or the Joint Venture that would be required to be
reflected in the Financial Statements as a current or non-current liability in
accordance with IFRS, except for Liabilities (i) arising in the Ordinary Course
after the date of the Financial Statements, (ii) disclosed in the Seller
Disclosure Schedule or (iii) as contemplated by this Agreement, the other
Transaction Documents or otherwise incurred in connection with the Contemplated
Transactions.

23
428928/HOUDMS 

--------------------------------------------------------------------------------

 

Section 3.7    Operation of the Business.
(a)    From the Balance Sheet Date (i) the Business has been carried out and
conducted in the Ordinary Course other than actions taken in furtherance of the
Contemplated Transactions, (ii) there has not been (A) any sale, lease, license,
pledge or other disposition of, or Encumbrance on, any of the Purchased Assets
(other than sales or dispositions of inventory that is obsolete and no longer
required by the Business), or (B) any damage to, or loss of, any Purchased Asset
that is material to the Business (except for any normal wear and tear in the
Ordinary Course) and (iii) there has not been any Material Adverse Effect.
(b)    Solely with respect to the Joint Venture, since the Balance Sheet Date:
(i)    there has been no material adverse change in the financial condition of
the Joint Venture;
(ii)    no dividend or other distribution of profits or assets has been, or
agreed to be declared, made or paid by the Joint Venture; and
(iii)    the Joint Venture has not incurred any Indebtedness or granted any
Encumbrance, nor has it incurred or committed to any capital expenditure, or
acquired or disposed of any individual item, in either case in excess of $50,000
or as otherwise described in Section 5.2(b) of the Seller Disclosure Schedule.
Section 3.8    Title to Purchased Assets; Sufficiency of Purchased Assets.
(a)    The Selling Entities have good and marketable title to the Rigs, and to
the other Purchased Assets, free and clear of any Encumbrances (except in the
case of Purchased Assets other than the Rigs, in which case such Purchased
Assets are free and clear of any Encumbrances other than Permitted
Encumbrances).
(b)    Each of the Rigs included in the Purchased Assets remains in the same
condition as of date of the latest physical inspection of such Rigs by Purchaser
or its agents prior to the Effective Date at which Seller or its agents were
present, normal fair wear and tear in the Ordinary Course excepted.
(c)    The importation of the Rigs into the Territory (by the Joint Venture in
respect of the Kuwait Assets and by the relevant Asset Selling Entity in respect
of the Algeria Assets) was done in accordance with applicable Law in all
material respects.
Section 3.9    Real Property.
(a)    Section 3.9(a) of the Seller Disclosure Schedule sets forth a description
of all material real property owned, possessed or leased by the Joint Venture
(collectively, the “Business Leased Real Property”). Seller has made available
to Purchaser copies of the leases in effect as of the Effective Date relating to
the Business Leased Real Property and there has not been any sublease or
assignment entered into by any Asset Selling Entity or the Joint Venture in
respect of the leases relating to such Business Leased Real Property.
(b)    The Joint Venture is not in material default of any provision of any
lease of its Business Leased Real Property. The use and operation of the
Business Leased Real Property in the conduct of the Business as conducted and as
currently planned to be conducted do not violate in any material respect any
Law, covenant, restriction, easement, license, permit or Contract.

24
428928/HOUDMS 

--------------------------------------------------------------------------------

 

(c)    The Business Leased Real Property is not subject to the payment of any
outgoings other than principal rent.
(d)    There are no covenants, restrictions, stipulations, easements, wayleaves,
licenses, grants or other Encumbrances (whether of a private or public nature,
and whether legal or equitable) affecting the Business Leased Real Property
which are material, or which conflict with the current use of the Business
Leased Real Property.
(e)    There are no circumstances which (with or without taking other action)
would entitle any Third Party to exercise a right of entry to, or take
possession of all or any part of the Business Leased Real Property, or which
would in any other way affect or restrict the continued possession, enjoyment or
use of any part of the Business Leased Real Property.
(f)    There exists no material dispute between the owner or occupier of any
other premises adjacent to or neighboring the Business Leased Real Property and,
to Seller’s Knowledge, there are no circumstances that would give rise to any
such dispute.
Section 3.10    Intellectual Property. The Asset Selling Entities and the Joint
Venture own or otherwise have the right to use all material Intellectual
Property used by each respective Asset Selling Entity and the Joint Venture in
the operation of the Business as presently conducted (the “Business Intellectual
Property”). To Seller’s Knowledge, the operation of the Business as presently
conducted does not infringe or violate, or constitute a misappropriation of, in
any respect, any Intellectual Property rights of any Person. To Seller’s
Knowledge, no other Person is infringing, violating or misappropriating any of
the Business Intellectual Property. Seller has not received written notification
from any Third Party alleging that any Asset Selling Entity or the Joint Venture
infringes any Intellectual Property of such Third Party. Section 3.10 of the
Seller Disclosure Schedule lists the material Business Intellectual Property.
There are no pending disputes between Seller, its Affiliates and any other
Person relating to the Business Intellectual Property. Seller has taken all
commercially reasonable steps necessary to protect and maintain the
confidentiality of all material Business Information that comprises Business
Intellectual Property.
Section 3.11    Contracts.
(a)    Section 3.11(a) of the Seller Disclosure Schedule sets forth a list as of
the Effective Date of each written Contract to which the Joint Venture is party
relating to the Business that:
(i)    is for the purchase of materials, supplies, goods, equipment or services
that involves the payment by any Asset Selling Entity or the Joint Venture, as
applicable, of more than $1,000,000 over the life of the Contract;
(ii)    is a material license or other material Contract for the Business under
which the Joint Venture has obtained a license to use the Intellectual Property
of another Person (except for any license implied by the sale of a product and
perpetual, paid-up licenses for commonly available software programs under which
the Joint Venture is the licensee);
(iii)    is a material employment Contract of the Joint Venture that is not
terminable by the Joint Venture, as applicable, without penalty or further
payment and without more than 60 days’ notice, except for such greater payments
or notices required by applicable Law or collective bargaining agreement;

25
428928/HOUDMS 

--------------------------------------------------------------------------------

 

(iv)    is a material Contract to the Joint Venture that is made between or
among Seller or its Affiliates, on the one hand, and the Joint Venture, on the
other hand, and would not be terminated as of applicable Closing;
(v)    provides for Indebtedness for borrowed money of the Joint Venture, other
than Indebtedness solely between or among any of Seller or its Affiliates, on
the one hand, and the Joint Venture, on the other hand, which Indebtedness is
not to be released at the applicable Closing;
(vi)    is a drilling Contract that is in relation to any Rig included in the
Purchased Assets;
(vii)    is a lease in relation to the Business Leased Real Property or a Lease
that is included in the Kuwait Assets; or
(viii)    is otherwise material to the Joint Venture which is terminable by the
other party thereto as a result of the Contemplated Transactions.
(b)    Seller has made available to Purchaser a true and complete copy of each
Material Contract. With respect to each such Material Contract, no Asset Selling
Entity or the Joint Venture, as applicable, party to the Material Contract, nor,
to Seller’s Knowledge, any other party to the Material Contract is in material
breach or default under the Material Contract and, to Seller’s Knowledge, no
event has occurred, is subsisting or is likely to arise which, with the giving
of notice and/or lapse of time is likely to constitute or result in any material
breach or default under a Material Contract. No party to any Material Contract
has given notice of its intention to terminate, or to Seller’s Knowledge has
sought to repudiate or disclaim, such Material Contract or any obligation
thereunder. Each Material Contract is enforceable by the Asset Selling Entity or
the Joint Venture party thereto in accordance with its terms subject to the
Bankruptcy and Equity Exception.
(c)    No Material Contract is a Contract (and the Joint Venture is not a party
to any Contract) under which any Person has been authorized to act as a
distributor, dealer, sales representative, authorized agent or authorized
service Person, or otherwise provides for the payment of any indemnity or
compensation whatsoever on the entry into or termination of any arrangement in
connection with the Business or the Joint Venture.
(d)    Complete and accurate particulars of the daily rates that are payable as
at the Effective Date under each of the Drilling Contracts, and the remaining
fixed duration of those Drilling Contracts are set forth in Section 3.11(d) of
the Seller Disclosure Schedule.
Section 3.12    Tax Matters.
(a)     (i) All income Tax Returns and all other material Tax Returns required
to be filed by PD Cyprus and the Joint Venture or with respect to the other
Purchased Assets have been timely and appropriately filed in accordance with
applicable Law, (ii) all such Tax Returns are true, complete and correct; and
(iii) all Taxes for which PD Cyprus or the Joint Venture or, with respect to the
Purchased Assets, the Joint Venture and/or the Asset Selling Entities, are or
have become liable, have been timely paid.
(b)    All Taxes that PD Cyprus or the Joint Venture, or with respect to the
Purchased Assets, the Joint Venture and/or an Asset Selling Entity, is or has
been required by Law to withhold or collect in connection with amounts paid or
owing to any employee, independent contractor, creditor, stakeholder, member or
other Third Party have been properly withheld or collected, and, to the extent
required by applicable Law, have been paid over to the proper Governmental
Authority.
(c)    To Seller’s Knowledge, no audits or other Proceedings are pending or
being conducted, nor has Seller, PD Cyprus or the Joint Venture received any
written notice from any Governmental Authority that any

26
428928/HOUDMS 

--------------------------------------------------------------------------------

 

such audit or other Proceeding is pending or threatened, in any case with
respect to any Taxes of the Joint Venture or with respect to another Purchased
Asset.
(d)    None of Seller, the Asset Selling Entities or PD Cyprus or the Joint
Venture has waived any statute of limitations with respect to any Taxes or
agreed to an extension of time with respect to a Tax assessment or deficiency in
any case with respect to any Taxes of the Joint Venture or with respect to
another Purchased Asset, which waiver or extension of time is currently
outstanding.
(e)    Neither PD Cyprus nor the Joint Venture is a party to or bound by any Tax
sharing, Tax indemnity or Tax allocation agreement.
(f)    PD Cyprus or the Joint Venture are, and have at all times have been,
residents in their jurisdictions of incorporation for Tax purposes and are not,
and have not at any time been, treated as a resident in any other jurisdiction
for Tax purposes, and to Seller’s Knowledge, no claim has been made by a
Governmental Authority in a jurisdiction in which PD Cyprus or the Joint Venture
does not currently file Tax Returns to the effect that PD Cyprus or the Joint
Venture may be subject to Tax in such jurisdictions.

Section 3.13    Employment, Benefit and Labor Matters.
(a)    Section 3.13(a)(i) of the Seller Disclosure Schedule sets forth a list of
all Employees as of March 31, 2018 (“Employees List”), and Section 3.13(a)(ii)
of the Seller Disclosure Schedule sets forth a list of all Independent
Contractors as of March 31, 2018 (“Independent Contractors List”). To the extent
permitted by applicable Law, the Employees List will contain details of each
Employee’s name, date of commencement of employment, period of continuous
employment, manner of employment and name of employer, salary, other material
benefits (including bonuses, commission and employer pension contributions
profit sharing, stock bonus, stock option, stock purchase, phantom or stock
equivalent type bonus, as applicable), position, and place of work. To the
extent permitted by applicable Law, the Independent Contractors List will
contain details of each Independent Contractor’s name, date of commencement of
services, period of continuous service, name of contracting party, fees and
other material benefits payable, position, and place of work; provided, that
with respect to the Independent Contractors employed by Team Source Petroleum
(“Team Source”), to the extent such information is provided by Team Source prior
to the Effective Date.
(b)    The Joint Venture and each of the Selling Entities (or other employers of
the Employees) is in compliance in all material respects with all applicable
Contracts and Laws pertaining to the employment of the Employees or the use of
the services of any Independent Contractor.
(c)    Section 3.13(c) of the Seller Disclosure Schedule sets forth a list, as
of the date specified thereon, of: (i) any employment, severance and change of
control agreement with any executive officer or other senior managerial Employee
or any Independent Contractor (A) the benefits of which are contingent upon the
occurrence of the Contemplated Transactions, or (B) providing any guarantee of
employment or compensation; and (ii) any Contract or Seller Plan binding upon
Seller, the Selling Entities or the Joint Venture, any of the benefits of which
will be increased, or the vesting of the benefits of which will be accelerated,
by the consummation of the Contemplated Transactions (either alone or upon the
termination of employment following such transactions).
(d)    Set forth in Section 3.13(d) of the Seller Disclosure Schedule is a list
of each material Seller Plan and the Employees that benefit from that material
Seller Plan. Other than under the Sponsored Plans, Employees will not be
eligible to continue as “active” participants under any Seller Plan after the
applicable Closing except as otherwise set forth in the Transition Services
Agreement, and even then, only to the extent permitted by applicable Law. Seller
has made available for review to Purchaser information regarding, or the
documents for, the Seller Plans.

27
428928/HOUDMS 

--------------------------------------------------------------------------------

 

(e)     (i) Each Sponsored Plan is in material compliance in form and operation
with its own terms and in material compliance in form and operation with all
applicable Laws, and Seller or its applicable Affiliates or the Joint Venture
have timely made all material required contributions thereto; and (ii) there is
no litigation, arbitration or similar Proceeding pending (other than routine
claims for benefits being reviewed pursuant to the plan’s internal claim and
approval process) or, to the Knowledge of Seller, threatened (in a reasonably
serious manner and in writing) with respect to any Sponsored Plan.
(f)    Neither the Selling Entities (or other employers of the Employees)
(solely with respect to the Business) nor the Joint Venture (i) are involved in
any dispute or negotiation with any trade union or association of trade unions
or organization or body of employees or Independent Contractors; and (ii) have
recognized nor do they have any agreement with any trade union or other
organization of employees or their representatives. No Employee of the Selling
Entities (or other employers of the Employees) is represented by any union or
any collective bargaining agreement.
(g)    To Seller’s Knowledge, no Employee has formally objected to the transfer
of the Purchased Assets to Purchaser and its Designated Affiliates.
(h)    The Joint Venture does not maintain a defined benefit pension plan.
(i)    There are no material, unpaid amounts due to the Employees other than
remuneration accrued due to them or remuneration for the reimbursement of
business expenses.
(j)    There are no material amounts outstanding or promised to the Employees,
and no material Liability has been incurred which remains undischarged, in each
case for breach of any employment Contract or Contract for services or
redundancy payments (statutory or otherwise, including protective awards) or
compensation under any applicable Law in respect of vacation or holiday pay,
wrongful dismissal, unfair dismissal, equal pay claims, sex, race or disability
discrimination, or otherwise.

Section 3.14    Environmental Matters. The operation of the Business is in
compliance in all material respects with (a) all Environmental Laws and (b) all
Governmental Authorizations required for each Asset Selling Entity and the Joint
Venture under Environmental Laws to conduct the Business as presently conducted
or to occupy the Business Leased Real Property as presently occupied; and no
event has occurred, is subsisting or to Seller’s Knowledge is likely to arise
which is likely to constitute or result in a breach of such Environmental Laws
or such related Governmental Authorizations. Neither Seller, the Selling
Entities or the Joint Venture has received any written notice stating that the
conduct of the Business or the condition of any Business Leased Real Property is
currently in violation of any Environmental Law. No Proceeding is pending or, to
Seller’s Knowledge, threatened against any Asset Selling Entity or the Joint
Venture that alleges a violation by any Asset Selling Entity or the Joint
Venture of any applicable Environmental Laws (to the extent that they relate to
the Business). The Joint Venture and the Assets Selling Entities have not
received any enforcement, prohibition, stop remediation, improvement or any
other notice from or been subject to any sanction imposed by any Governmental
Authority in respect of any Environmental Laws to the extent relating to the
Business or the Purchased Assets.

28
428928/HOUDMS 

--------------------------------------------------------------------------------

 

Section 3.15    Governmental Authorizations. Each Asset Selling Entity and the
Joint Venture have and are in compliance in all material respects with all
Governmental Authorizations that are necessary for them to conduct the Business
in the manner in which it is conducted and own the Purchased Assets, and such
Governmental Authorizations are valid and in full force and effect. Section 3.15
of the Seller Disclosure Schedule lists all material Governmental Authorizations
held by any Asset Selling Entity or the Joint Venture (with respect to the
operation of the Business) and Seller has made available to Purchaser copies of
all such Governmental Authorizations. The consummation of the Contemplated
Transactions will not result in, and no event has occurred that, with or without
notice or lapse of time or both, would reasonably be expected to result in the
revocation, suspension, lapse or limitation of any Governmental Authorization
listed in Section 3.15 of the Seller Disclosure Schedule (in whole or part) and
the granting and maintenance of the Governmental Authorizations has not been
challenged by any Governmental Authority or other Person.
Section 3.16    Legal Proceedings. There is no Proceeding currently outstanding,
pending or, to Seller’s Knowledge, threatened against any Selling Entity, PD
Cyprus or the Joint Venture including without limitation with respect to the
operation of the Business or the Purchased Assets or which questions or
challenges the validity of this Agreement or the Transaction Documents or that
may prevent, delay, make illegal or otherwise interfere with the ability of
Seller, its Affiliates, PD Cyprus or the Joint Venture to consummate any of the
Contemplated Transactions, and to Seller’s Knowledge there is no basis for any
such Proceedings. There are no disputes between a Governmental Authority and PD
Cyprus, the Joint Venture or any Selling Entity with respect to any outstanding,
pending or threatened Proceeding, and the operation of the Business and the
Joint Venture is not affected by any final and non-appealable Judgment
applicable to Seller, any Selling Entity, PD Cyprus or the Joint Venture
(including with respect to Antitrust Laws). There are no claims outstanding in
relation to the Seller Guarantees and, since December 31, 2017, no material
claims have been made under or in relation to the Seller Guarantees.
Section 3.17    Compliance with Law.
(a)    The conduct of the Business and the use of the Purchased Assets by each
Selling Entity or the Joint Venture has been carried out in compliance with all
applicable Laws in all material respects.
(b)    Each of Seller, its Affiliates, PD Cyprus and, to Seller’s Knowledge, the
Joint Venture is in compliance in all material respects with all applicable
Antitrust Laws and Anti‑Corruption Laws, without limitation, those relating to
the use and operation of the Business. There is no Proceeding currently
outstanding pending or, to Seller’s Knowledge, threatened against any Selling
Entity, PD Cyprus or the Joint Venture with respect Antitrust Laws or
Anti‑Corruption Laws as they relate to the Business or the Purchased Assets.
None of the Selling Entities, PD Cyprus or, to Seller’s Knowledge, the Joint
Venture, have agreed to undertake any action or have given any commitment to any
Governmental Authority with respect to the enforcement of Antitrust Laws or
Anti‑Corruption Laws, in each case as it relates to the Business, the Purchased
Assets or the Joint Venture.
Section 3.18    Insurance. All insurance policies with respect to the Joint
Venture are in full force and effect and all premiums due and payable under such
policies have been paid. Seller has no Knowledge of any threatened termination
of, or material premium increase with respect to, any such policies.

(a)    All the Rigs are, and have at all material times been, insured to their
full replacement or reinstatement value with a reputable insurer against fire
and all other risks customarily insured against by Persons carrying on the same
type of business as the Business, and Seller and its Affiliates and the Joint
Venture have at all material times adequately insured against accident, damage,
injury, third party loss (including product liability) and all other risks
customarily insured against by Persons carrying on a similar business to the
Business.

29
428928/HOUDMS 

--------------------------------------------------------------------------------

 

(b)    The Seller Disclosure Schedule contains complete and accurate details of
all insurance claims made by the Joint Venture in relation to the Business since
December 31, 2017 through the Effective Date.
Section 3.19    Brokers Fees. No Selling Entity has, and neither PD Cyprus, the
Joint Venture nor any other Person acting on their behalf have incurred any
obligation to pay any fees or commissions to any broker, finder or agent in
connection with any of the Contemplated Transactions except with respect to
Morgan Stanley & Co. LLC, which fees will be borne entirely by Seller.
Section 3.20    Records. All Records have been maintained in accordance with the
policies and procedures of Sellers and its Affiliates and are in the possession
of Seller, the Joint Venture or the Selling Entities, as applicable.

Section 3.21    Transferring Employees.

(a)    In respect of each of the Transferring Employees, Seller, its Affiliates
and the Joint Venture and, to Seller’s Knowledge, any other Person who is their
employer, has: (i) performed all obligations and duties required to be performed
by them (and have settled all outstanding and formal claims, demands, actions,
complaints and proceedings of which Seller or its Affiliates has Knowledge)
whether arising under contract, statute, at common law or in equity or under any
applicable Law; (ii) abided by the terms of any agreement or arrangement with
any trade union, employee representative or body of employees or their
representatives (whether binding or not) which may affect the Transferring
Employees; (iii) fully complied with any obligations to inform and consult with
trade union or other employee representatives on any matter concerning or
arising from this Agreement or the Contemplated Transactions or affecting the
Transferring Employees; (iv) maintained adequate, suitable and up-to-date
records relating to the Transferring Employees; and (v) paid or will have paid
to the appropriate authority all taxes, social security contributions and other
levies due in respect of the Transferring Employees on account of their
employment up to and including the relevant Closing.

(b)    Save as disclosed, all contracts of service or for services with any of
the Transferring Employees are terminable at any time on three months' notice or
less without compensation (other than for unfair dismissal, termination without
cause or a statutory redundancy payment).

(c)    Seller, the Joint Venture and any other Person who is their employer has
not offered, promised or agreed to any future variation in any contract of
employment of any of the Transferring Employees or any other person in respect
of whom liability is deemed to pass to Purchaser or any of its Designated
Affiliates by virtue of the Contemplated Transactions if consummated and no
negotiations for an increase in the remuneration or benefits of any Transferring
Employee are current or likely to take place within the period of three months
after Closing, except such modifications required by Contract (including
collective bargaining agreement), Law or occurring in the Ordinary Course (with
respect to individual Transferring Employees).

(d)    To Seller’s Knowledge, there are no terms under which the Transferring
Employees are employed and no circumstances have arisen which could give rise to
any claim for unlawful discrimination or unequal pay.

(e)    Save as disclosed, or to Seller’s Knowledge, no Transferring Employee:
(i) has given or received notice to terminate their employment or engagement and
no Transferring Employee is entitled or intends or is likely to terminate such
employment or engagement as a result of the Parties entering into this Agreement
or Closing; (ii) has taken sick leave for a period of 21 days or more in any
six-month period within the three years ending on the Effective Date (whether or
not consecutive), or is receiving or is due to receive payment under any
sickness or disability or permanent health insurance scheme and, so far as
Seller is aware, there are no such claims pending or threatened and any and all
such claims are fully covered by insurance; (iii) is on secondment, maternity

30
428928/HOUDMS 

--------------------------------------------------------------------------------

 

or other statutory leave or otherwise absent from work; (iv) is subject to a
current disciplinary warning or procedure; (v) has objected or indicated an
objection to the transfer of the Business to Purchaser or its Designated
Affiliates; or (vi) has any entitlement to any accrued but unused holiday from
previous holiday years, or has taken holiday in excess of their accrued
entitlement as at the Effective Date.

(f)    There is not in existence, and Seller and none of its Affiliates
(including the Joint Venture) has proposed or is proposing to introduce, any
bonus, commission or profit-sharing scheme or any other scheme or arrangement
under which the Transferring Employees are or would be entitled to participate
in the profits of the Business or the Joint Venture or acquire shares in the
Joint Venture.

(g)    To Seller’s Knowledge, Seller, each of its Affiliates and the Joint
Venture has completed all questionnaires, co-operated with all inquiries and
filed all pleadings within any applicable time limit in connection with or in
anticipation of any claim arising out of the employment of any of the
Transferring Employees.

Section 3.22    Effect of Contemplated Transactions. The execution and delivery
of this Agreement and the consummation of the Contemplated Transactions will not
result in the Joint Venture losing its pre-qualification status for contract
tenders with any of its customers or in any customer of or supplier to the
Business ceasing to deal, or substantially reducing the existing level of its
dealings, with the Business, and none of Seller or its’ Affiliates is aware of
any intention on the part of any such customer or supplier to cease so to deal
or so to reduce the existing level of such dealings.

Section 3.23    Insolvency. No Insolvency Event has occurred in relation to
Seller, each Selling Entity, PD Cyprus or the Joint Venture that prohibits, or
may render ineffective, the transfer of the Purchased Assets to Purchaser
hereunder.

Article 4
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller (i) as of the Effective Date, (ii)
as of the Initial Closing Date and (iii) if there is a Subsequent Closing, as of
the Subsequent Closing Date, except as set forth on the disclosure schedule
delivered by Purchaser to Seller concurrently with the execution and delivery of
this Agreement and effective as of the Effective Date (the “Purchaser Disclosure
Schedule”), as follows:

Section 4.1    Organization and Good Standing. Purchaser and each Designated
Affiliate is a corporation or other legal entity validly existing and in good
standing (to the extent such concept is applicable in the relevant jurisdiction)
under the Laws of its jurisdiction of organization, and has all requisite
corporate power and authority to conduct its business as it is presently
conducted.

Section 4.2    Authority and Enforceability.
(a)    Purchaser has all requisite corporate power and authority to execute and
deliver this Agreement and to perform its obligations under this Agreement. The
execution, delivery and performance of this Agreement and the consummation of
the Contemplated Transactions have been duly authorized by all necessary action
on the part of Purchaser. Purchaser has duly and validly executed and delivered
this Agreement and assuming the due authorization, execution and delivery of
this Agreement by Seller, this Agreement constitutes the valid and binding
obligation of Purchaser, enforceable against Purchaser in accordance with its
terms, subject to the Bankruptcy and Equity Exception.

31
428928/HOUDMS 

--------------------------------------------------------------------------------

 

(b)    Each Designated Affiliate has all requisite corporate power and authority
to execute and deliver each Transaction Document to which it shall be a party
and to perform its respective obligations under each such Transaction Document.
The execution, delivery and performance of each Transaction Document to which
each Designated Affiliate shall be a party and the consummation of the
Contemplated Transactions thereby, will be, prior to the applicable Closing,
duly authorized by all necessary action on the part of each Designated Affiliate
party thereto. Each Transaction Document, assuming the due authorization,
execution and delivery of such Transaction Documents by the other parties
thereto, will constitute the valid and binding obligation of each Designated
Affiliate party thereto, enforceable against each Designated Affiliate party
thereto in accordance with its terms, subject to the Bankruptcy and Equity
Exception.

Section 4.3    No Conflict. Neither the execution, delivery and performance by
Purchaser of this Agreement nor the consummation by Purchaser of the
Contemplated Transactions, will (a) conflict with or violate the certificate of
incorporation, bylaws or other applicable charter or organizational documents of
Purchaser, (b) result in a breach or default under or create in any Person the
right to terminate, cancel, accelerate or modify, or require any notice, consent
or waiver under, any Contract to which Purchaser is a party or by which
Purchaser is bound, in any case with or without due notice or lapse of time or
both, (c) violate any Law or Judgment applicable to Purchaser or (d) require
Purchaser to obtain any Governmental Authorization or make any filing with any
Governmental Authority; other than (i) compliance with the applicable
requirements of the UK Financial Services and Markets Act 2000, (ii) compliance
with the rules and regulations of the London Stock Exchange, (iii) filings and
Governmental Authorizations required under, and compliance with other applicable
requirements of Antitrust Laws and (iv) compliance with any applicable state or
provincial securities or blue sky Laws.
Section 4.4    Legal Proceedings. There is no Proceeding pending or, to
Purchaser’s Knowledge, threatened against Purchaser or any of its Affiliates
that questions or challenges the validity of this Agreement or the Transaction
Documents or that may prevent, delay, make illegal or otherwise interfere with
the ability of Purchaser or any Designated Affiliate to consummate any of the
Contemplated Transactions.
Section 4.5    Investment Intent. Purchaser is acquiring the Purchased Equity
for Purchaser’s (or a Designated Affiliate’s) own account and investment
purposes and is not acquiring the Purchased Equity with a view to, or for sale
in connection with, any distribution thereof within the meaning of any
securities Laws.
Section 4.6    Brokers Fees. Neither Purchaser or any Designated Affiliate nor
any Person acting on their behalf has incurred any obligation to pay any fees or
commissions to any broker, finder or agent in connection with any of the
Contemplated Transactions.
Section 4.7    Financial Capacity. Purchaser (a) has sufficient funds or (b) has
obtained binding commitments (“Financing Commitments”) from reputable banks
and/or other financial institutions (evidence of which have been provided to
Seller) to provide all of the immediately available funds required to consummate
the Contemplated Transactions. The Financing Commitments do not contain any
conditions that would impair the ability of Purchaser or any Designated
Affiliate to perform their respective obligations under this Agreement and
consummate the Contemplated Transactions. Purchaser knows of no circumstance or
condition that will prevent the availability of the requisite immediately
available funds to consummate the Contemplated Transactions.

32
428928/HOUDMS 

--------------------------------------------------------------------------------

 

Section 4.8    Independent Investigation. Purchaser has conducted its own
independent investigation, review and analysis of the business, operations,
assets, liabilities, results of operations, financial condition and prospects of
the Business and each of the Selling Entities, PD Cyprus or the Joint Venture as
it has deemed appropriate, which investigation, review and analysis was done by
Purchaser and its Affiliates and representatives. In entering into this
Agreement, Purchaser acknowledges that it has relied solely upon the
aforementioned investigation, review and analysis and not on any factual
representations or opinions of Seller, its Affiliates or any of their
representatives (except the representations and warranties set forth in Article
3 or any other Transaction Document). Purchaser acknowledges that the
representations and warranties set forth in Article 3 or any other Transaction
Document are the only representations and warranties made by Seller with respect
to the Business, the Selling Entities, PD Cyprus, the Joint Venture, the
Purchased Assets, the Assumed Liabilities or any other matter relating to the
Contemplated Transactions. Purchaser hereby acknowledges and agrees that other
than the representations and warranties set forth in Article 3 or any other
Transaction Document, none of Seller, the Selling Entities, PD Cyprus, the Joint
Venture, any of their Affiliates, or any of their respective officers,
directors, employees, agents, representatives or stockholders make or have made
any representation or warranty, express or implied, at law or in equity, as to
any matter whatsoever relating to the Business, the Selling Entities, PD Cyprus,
the Joint Venture, the Purchased Assets, the Assumed Liabilities or any other
matter relating to the Contemplated Transactions including as to (i)
merchantability or fitness for any particular use or purpose, (ii) the operation
of the Business by Purchaser after the applicable Closing in any manner or (iii)
the probable success or profitability of the Business after the applicable
Closing.

Article 5
COVENANTS
Section 5.1    Access and Investigation. Until the applicable Closing (or until
the termination of this Agreement as provided in Section 7.1) and upon
reasonable advance written notice from Purchaser, Seller will, and will cause
its Affiliates to, allow Purchaser and its representatives reasonable access
during normal business hours and without unreasonable interference with the
operation of its business to (a) such materials and information about the
Business as Purchaser may reasonably request, (b) members of management of the
Business as the Parties may reasonably agree, and (c) the premises of the Joint
Venture and the Purchased Assets as the Parties may agree is reasonably
necessary for the purpose of a due diligence investigation.  Without limiting
the generality of the foregoing, Seller shall provide Purchaser and its agents
and/or its crew reasonable access to the Rigs (subject to Seller’s safety policy
and procedures) in the 10 Business Days immediately prior to the applicable
Closing to enable Purchaser to verify the condition of the Rigs, ordinary wear
and tear excepted. None of Seller or its Affiliates shall be obligated or
required to provide Purchaser or its representatives with any access to the
customers and suppliers of the Business, absent the mutual agreement of the
Parties.  Notwithstanding the foregoing, nothing in this Agreement will impose
obligations on Seller, any Selling Entity, PD Cyprus, the Joint Venture or any
of their respective Affiliates to give Purchaser or any of its representatives
access to materials and information if such access could reasonably be expected
to cause Seller or any of its Affiliates to be in breach of any duty of
confidence or any other duty or obligation under applicable Law (other than, to
the extent permitted by applicable Law, a duty owed solely between Seller and
any of its Affiliates or two or more Affiliates of Seller).
Section 5.2    Operation of the Business. Until the applicable Closing, except
as otherwise set forth in this Agreement (including with respect to the
Restructuring) or the Seller Disclosure Schedule, in furtherance of the
Contemplated Transactions or as otherwise consented to by Purchaser (which
consent will not be unreasonably withheld, conditioned or delayed):

33
428928/HOUDMS 

--------------------------------------------------------------------------------

 

(a)    Seller shall cause the Selling Entities and the Joint Venture, as
applicable, to conduct the Business in the Ordinary Course in all material
respects including to continue to collect book debts and pay creditors in the
Ordinary Course and in accordance with applicable Law; provided that Seller
shall be permitted, and may elect to cause the Selling Entities and the Joint
Venture, as applicable, to pay to Seller or any of its Affiliates an aggregate
amount equal to the consolidated Cash Equivalents held by them and eliminate or
otherwise repay any Indebtedness of the Selling Entities or the Joint Venture
(including, without limitation, for purposes of Section 2.11). Seller may cause
any such Person to make any such payment to or from Seller or any of its
Affiliates in the form of an Indebtedness repayment, dividend, redemption,
reduction in capital or other transaction, including to release any
Encumbrances.
(b)     Seller shall cause the Selling Entities and the Joint Venture, as
applicable, to maintain in the Ordinary Course the properties listed in Section
3.9(a) of the Seller Disclosure Schedule, and with respect to the Rigs, comply
in all material respects with the capital expenditure program set forth in
Section 5.2(b) of the Seller Disclosure Schedule (the “Rig Capital Expenditure
Program”). For purposes of the preceding, if in respect of any of the Rigs
Seller undertakes a capital expenditure in which work is to be performed by (i)
Purchaser, its Affiliates and their respective contractors and subcontractors or
(ii) a Third Party contractor or subcontractor approved by Purchaser, at such
rates approved by Purchaser, then at each Closing, Purchaser shall reimburse and
pay to Seller the documented amount of such capital expenditures incurred by
Seller and its Affiliates for the applicable Rig transferred at such Closing
during the period following the Effective Date and up to and including the
applicable Closing Date. For purposes of the foregoing, any such capital
expenditures to be reimbursed by Purchaser must have been incurred in a manner
consistent with the Rig Capital Expenditure Program, and the maximum amount
reimbursable per Rig may not exceed the amount of the remaining capital
expenditures planned for each Rig following the Effective Date as specified in
the Rig Capital Expenditure Program, and the aggregate amount of all capital
expenditures for which Purchaser shall be obligated to reimburse shall not
exceed $11,000,000. Notwithstanding the preceding, nothing in this Section
5.2(b) shall limit Seller in engaging any contractor or subcontractor in
connection with the Rig Capital Expenditure Program, provided that Seller shall
not be entitled to any reimbursement or payment from Purchaser if such capital
expenditure is incurred other than in accordance with clause (i) and (ii) above.
For the avoidance of doubt, Purchaser and its Affiliates shall have no
responsibility for or obligation to reimburse any capital expenditure incurred
by Seller with respect to any Rig prior to the Effective Date.
(c)    Seller shall not, and shall not cause or permit any Selling Entity, PD
Cyprus or the Joint Venture, as applicable, to:
(i)    amend the articles of incorporation or bylaws or other applicable charter
or organizational documents of any Asset Selling Entity, PD Cyprus or the Joint
Venture in a manner that could be expected to delay or otherwise interfere with
the consummation of the Contemplated Transactions;
(ii)    issue, sell or pledge additional shares of the capital stock of PD
Cyprus or the Joint Venture or securities convertible into any such shares, or
any options, warrants or rights to acquire any such shares or other convertible
securities, or reduce the authorized capital of PD Cyprus or the Joint Venture;
(iii)    change the duration or any of the other material terms and conditions
of any Drilling Contract, or terminate or materially and adversely amend any
Material Contract, the Joint Venture agreement (save as provided for in the
Joint Venture Amendment or the Joint Venture Side Letter), any Lease or any
Contracts required to be novated pursuant to the Novation Agreements; provided
that notwithstanding the foregoing, where commercially reasonable to do so
Seller may agree to a reduction

34
428928/HOUDMS 

--------------------------------------------------------------------------------

 

in the daily rate payable under any of the Drilling Contracts of not more than
5% without the prior consent of Purchaser;
(iv)    agree to extend the period of any Material Contract under which the
Business or the Joint Venture is the recipient of supplies of goods or services
beyond the Initial End Date or agree to any change to increase the amount
payable under such Contracts by more than 5%;
(v)    dispose of, sell, lease or license, or permit any Encumbrance (other than
Permitted Encumbrances), on any Purchased Assets;
(vi)    acquire, by merger or consolidation with, or by purchase of all or a
substantial portion of the assets or stock of, or by any other manner, any
business or entity, or enter into any joint venture, partnership or other
similar arrangement for the conduct of the Business;
(vii)    reduce the headcount of the Employees by more than 5%, or increase the
headcount of the Employees by more than 5%, except as otherwise required by Law
or a Contract entered into prior to the Effective Date and listed in Section
3.11(a) of the Seller Disclosure Schedule;
(viii)    increase the compensation and benefits (including without limitation
salaries, bonuses, commissions, other incentive compensation, equity, and
benefits under any Sponsored Plans) to the Employees (collectively) by more than
5% in the aggregate (whether as part of an annual pay review or otherwise),
except as otherwise required by Law or a Contract entered into prior to the
Effective Date and listed in Section 3.11(a) of the Seller Disclosure Schedule;
(ix)    in the case of PD Cyprus or the Joint Venture or under any Lease, commit
the Joint Venture or the relevant Asset Selling Entity which is the party to the
Lease to incur any capital expenditure on any Rig in excess of $100,000 over the
estimated capital expenditures set forth in Section 5.2(b) of the Seller
Disclosure Schedule;
(x)    in the case of the Joint Venture, make any loan or cancel, release or
assign any material Indebtedness owed to it or claimed by it other than (i)
loans or cancellations, releases or assignments of Indebtedness made in the
Ordinary Course which do not exceed $100,000 in aggregate; or (ii) or as
provided for under Section 2.11;
(xi)    in the case of the Joint Venture, incur or commit itself to any material
Indebtedness other than (i) Indebtedness incurred in the Ordinary Course which
does not exceed $100,000 in aggregate; or (ii) which is to be cancelled, paid or
otherwise settled pursuant to Section 2.11;
(xii)    vary in any material respect the terms on which it holds any of the
Business Leased Real Property;
(xiii)    move any of the Rigs currently in Algeria from their current location
(unless required to perform a contractual obligation) or move any of the Rigs
currently in Kuwait or Iraq from their current location (unless required to
perform a contractual obligation);
(xiv)    subject to applicable Laws (including Antitrust Laws), submit any
binding tenders in respect of the Purchased Assets that are not on arm’s length
terms or that provide for rates that are not substantially at the current market
rate for similar tenders in the Territory, without Purchaser’s prior written
consent (such consent not to be unreasonably withheld or delayed); or

35
428928/HOUDMS 

--------------------------------------------------------------------------------

 

(xv)    agree in writing to take any of the foregoing actions.
(d)    Seller shall promptly notify Purchaser (i) of any material incident
involving the Rigs or any damage which has occurred to the Rigs (or any other
item of equipment which forms part of the Purchased Assets) after the date of
Purchaser’s inspection that has or would reasonably be expected to cause any Rig
(or such other item of equipment which forms part of the Purchased Assets) to
not be in compliance with Section 3.8(b) or otherwise would result in a Backlog
Deduction or an Excluded Rig Deduction; (ii) if at any time Seller becomes aware
that a term of this Agreement or any Transaction Document has been breached or
that any representation or warranty made or due to be repeated in this Agreement
or any Transaction Document has been breached or is untrue (or is likely to be
breached or untrue) giving details of the relevant circumstances; (iii) if at
any time Seller becomes aware that any Material Adverse Effect has occurred;
(iv) if there is any material change in the amount of planned expenditures under
the Rig Capital Expenditure Program that would result in a breach of Section
5.2(c)(ix); or (v) of any submission of a binding tender in respect of the
Purchased Assets, unless otherwise restricted by applicable Law or Contract.
(e)    For the avoidance of doubt, (i) Seller and Purchaser agree that nothing
in this Section 5.2(e) shall prohibit, limit or restrict Seller or its
Affiliates from selling their respective land drilling rig assets and operations
(or other assets) that are outside of the Territory (except for the Rigs located
in Iraq that are to be sold pursuant to this Agreement as part of the Kuwaiti
Assets) or unrelated to the Business being sold to Purchaser pursuant to this
Agreement, whether or not such sales are made in the Ordinary Course and (ii)
for the period from the Initial Closing up until the Subsequent Closing, if any,
relating to the Kuwait Assets or Algeria Assets, as the case may be, Seller
agrees to comply with this Section 5.2(e) to the extent applicable to such
assets.
Section 5.3    Consents and Filings. Subject to the terms and conditions
provided in this Section 5.3, each Party will use its commercially reasonable
best efforts to take, or cause to be taken, all actions and to do, or cause to
be done, all things necessary, proper or advisable to consummate and make
effective as expeditiously as possible the Contemplated Transactions and to
cooperate with each other in connection with the foregoing, including to: (i)
obtain any necessary waivers, consents and approvals from other parties to
Material Contracts; (ii) obtain all Governmental Authorizations that are
required to be obtained under any Law and that are material to the Business or
for the Contemplated Transactions; (iii) lift or rescind any injunction,
restraining order or other Judgment adversely affecting or delaying the ability
of the Parties to promptly consummate the Contemplated Transactions; (iv) effect
any necessary registrations and filings including filings and submissions of
information required by any Governmental Authority, including any national or
multinational antitrust authorities with mandatory pre-merger filing
requirements that are mutually agreed by the Parties to be applicable to the
Contemplated Transactions; and (v) fulfill all conditions to this Agreement. The
Parties further covenant and agree, with respect to any threatened or pending
preliminary or permanent injunction or other Judgment or Law that would
adversely affect or delay the ability of the Parties to consummate the
Contemplated Transactions, to use their respective commercially reasonable best
efforts to prevent the entry, enactment or promulgation thereof, as the case may
be. In no event, however, will either Party or any of their respective
Affiliates be obligated to pay any money to any Person or to offer or grant
other financial or other accommodations to any Person in connection with its
obligations under this Section 5.3. The Parties will keep each other apprised of
the status of matters relating to the completion of the Contemplated
Transactions and work cooperatively in connection with obtaining the requisite
Governmental Authorizations, and shall promptly notify the other of, and if in
writing furnishing the other with copies of, any communications from or with any
Governmental Authority with respect to the Contemplated Transactions.
Notwithstanding anything to the contrary, Seller shall also remain solely
responsible for satisfying the conditions in Section 6.1 and Section 6.3 (other
than 6.1(d) and Section 6.3(d)) and Purchaser shall remain solely responsible
for satisfying all conditions in Section 6.2 and Section 6.4 (other than 6.2(d)
and Section 6.4(d)).

36
428928/HOUDMS 

--------------------------------------------------------------------------------

 

Section 5.4    Financing. Purchaser expressly acknowledges and agrees that
Purchaser’s obligations under this Agreement are not conditioned in any manner
whatsoever upon Purchaser or any Designated Affiliate obtaining any financing
and any failure to fulfill any obligation under this Agreement arising from the
failure of Purchaser or any Designated Affiliate to obtain financing or the
unavailability of such financing will be deemed to be knowing and intentional
for purposes of this Agreement, including Section 7.2. To the extent that
Purchaser has obtained any Financing Commitment, Purchaser will keep Seller
apprised of all developments or changes relating to the financing contemplated
by the Financing Commitments that would, or be reasonably expected to, result in
a failure by Purchaser to consummate the Contemplated Transactions. In the event
that the Financing Commitments cease to be in full force and effect at any time
or the lenders party thereto indicate any unwillingness or inability to provide
the financing contemplated thereby, or for any reason Purchaser otherwise no
longer believes in good faith that it or any Designated Affiliate will be able
to obtain the financing contemplated thereby, then Purchaser will immediately
notify Seller and use its commercially reasonable best efforts to obtain
replacement financing arrangements or commitment letters as soon as possible.
Section 5.5    Confidentiality.
(a)    From the Effective Date and for a period of three years after the Initial
Closing, the Parties shall keep confidential and shall not disclose (i) the
legal, financial or other terms or conditions of this Agreement, the other
Transaction Documents or the Contemplated Transactions and (ii) any confidential
or non-public information disclosed to the other Party in connection with the
Contemplated Transactions, in each case without the prior written consent of the
other Party, except to the extent such disclosure is (v) required to be made
under applicable Law, including for purposes of compliance with the applicable
requirements of the Securities Act of 1933 and the Securities Exchange Act of
1934 (or, in the case of Purchaser, the UK Financial Services and Markets Act
2000) or the compliance with the rules and regulations of the New York Stock
Exchange (or in the case of Purchaser the London Stock Exchange) or any other
exchange upon which a Party’s or its Affiliate’s securities are traded, (w) to a
Party’s and its Affiliates’ respective directors, officers, employees, advisors,
representatives, lenders, and agents to the extent reasonably required to
facilitate the negotiation, execution, delivery or performance of this Agreement
and the Transaction Documents or effect the Contemplated Transactions, provided
that such Party shall be liable for the failure of any such Person to comply
with the restrictions on disclosure in this Section 5.5(a), (x) to any
Governmental Authority or arbitrator to the extent reasonably required in
connection with any Proceeding relating to this Agreement or any Transaction
Document, (y) in connection with a Party’s indemnification obligations under
this Agreement, including the defense of any Third Party Claim, and (z)
permitted in accordance with Section 5.6. The Parties agree to that as of the
Effective Date, that certain Confidentiality Letter Agreement between Seller
Parent and Purchaser dated July 12, 2017, will terminate. Notwithstanding the
forgoing, following any Closing, this Section 5.5(a) shall not apply to the
extent any information described in this Section 5.5(a) constitutes Business
Information, for which Section 5.5(b) shall apply, and neither Purchaser or its
Designated Affiliates, PD Cyprus or the Joint Venture shall be under any
restriction on the disclosure of Business Information relating to the Purchased
Assets which were the subject of that Closing under this Agreement or any other
Transaction Document.

(b)    For a period of three years after the Initial Closing, Seller will, and
will cause each Selling Entity its directors, officers, employees, advisors,
representatives and agents to, hold in confidence, unless compelled to disclose
by judicial or administrative process or by other requirements of Law or a
Governmental Authority, all Business Information, except to the extent that such
disclosure of Business Information (i) must be made in connection with the
obligations of Seller or its Affiliates pursuant to this Agreement and the
Transaction Documents, (ii) is required under applicable Law, including for
purposes of compliance with the applicable requirements of the Securities Act of
1933 and the Securities Exchange Act of 1934 or the compliance with the rules
and regulations of the New York Stock Exchange, (iii) is made to its and its
Affiliates’ respective directors, officers, employees, advisors, representatives
and agents to the extent reasonably required to facilitate the

37
428928/HOUDMS 

--------------------------------------------------------------------------------

 

negotiation, execution, delivery or performance of this Agreement and the
Transaction Documents or effect the Contemplated Transactions, provided that
Seller shall be liable for the failure of any such Person to comply with the
restrictions on disclosure in this Section 5.5(b), (iv) is made to any
Governmental Authority or arbitrator to the extent reasonably required in
connection with any Proceeding relating to this Agreement or any Transaction
Document, (v) is made in connection with its indemnification obligations under
this Agreement, including the defense of any Third Party Claim, and (vi) is
permitted in accordance with Section 5.6.

Section 5.6    Public Announcements. Prior to the Initial Closing, each Party
agrees not to issue any press release or make any other public announcement
relating to this Agreement and/or the Contemplated Transactions without the
prior written approval of the other Party, which approval shall not be
unreasonably withheld, except that each Party reserves the right, without the
other Party’s prior consent, to make any public disclosure, prior to or after
the Initial Closing, that it believes in good faith is required by applicable
securities Laws or stock exchange listing standards (in which case the
disclosing Party agrees to use commercially reasonable best efforts to advise
the other Party prior to making such disclosure). Without prejudice to the
foregoing it is also agreed that Purchaser may make the announcement upon the
signing of this Agreement, the language of which is set forth on Section 5.6 of
the Purchaser Disclosure Schedules.

Section 5.7    Further Actions; Post-Closing Cooperation.
(a)    Subject to the other express provisions of this Agreement, upon the
request of either Party, the other Party will execute and deliver (or procure
that its Affiliates will execute and deliver) such other documents, instruments
and agreements as the requesting Party may reasonably require for the purpose of
carrying out the intent of this Agreement and the Contemplated Transactions.
(b)    If, following any Closing, any right, property or asset not forming part
of the Purchased Assets is found to have been transferred to Purchaser or a
Designated Affiliate in error, either directly or indirectly, Purchaser shall
transfer, or shall cause its Affiliates to transfer, at no cost to Seller (other
than Transfer Taxes and provided that Seller shall also reimburse Purchaser for
any costs including Transfer Taxes actually incurred on any re-transfer of the
Purchased Assets and as a result of a failure of the initial transfer) or its
Affiliates, such right, property or asset as soon as reasonably practicable to
Seller or its Affiliates as directed in writing by Seller. If, following any
Closing, any right, property or asset forming part of the Purchased Assets is
found to have been retained by Seller or any Selling Entity in error, either
directly or indirectly, Seller shall, or shall cause the applicable Selling
Entity to transfer, at no cost to Purchaser, such right, property or asset as
soon as reasonably practicable to applicable the Designated Affiliate.

Section 5.8    Indemnification. Purchaser will not, for a period of six years
after the Initial Closing, take or permit any action to alter or impair any
exculpatory or indemnification provisions now existing in the certificate of
incorporation or bylaws or other applicable charter or organizational documents
of PD Cyprus or the Joint Venture for the benefit of any individual who served
as a director or officer of PD Cyprus or the Joint Venture at any time prior to
the Initial Closing (each a “PD Cyprus/Joint Venture Indemnified Party”), except
for any changes which may be required to conform with changes in applicable Law,
any changes made by the other members in the Joint Venture without the consent
or agreement of Purchaser or its Designated Affiliates, and any changes which do
not affect the application of such provisions to acts or omissions of such
individuals prior to the Initial Closing. Without limiting the generality of
this Section 5.8, the provisions of this Section 5.8 are intended for the
benefit of, and may be enforced by, each of the PD Cyprus/Joint Venture
Indemnified Parties and their respective heirs and beneficiaries. Following the
Closing at which the Kuwait Assets are sold, Seller shall indemnify PD Cyprus
and its Affiliates for any amounts actually paid by PD Cyprus to any Person who
served as a director or officer of PD Cyprus prior to the applicable Closing as
a result of any claim made by such Person pursuant to the exculpatory and
indemnification provisions of the memorandum and articles of association of PD
Cyprus. PD Cyprus and its Affiliates shall be entitled to enforce the indemnity
in this Section 5.8.

38
428928/HOUDMS 

--------------------------------------------------------------------------------

 

Section 5.9    Insurance. Notwithstanding anything to the contrary in Article 8,
from and after the applicable Closing, PD Cyprus, the Joint Venture and the
Business shall cease to be insured by Seller or its Affiliates’ current and
historical insurance policies or programs or by any of the current and
historical self-insured programs of Seller or its Affiliates, and neither
Purchaser nor its Affiliates (including the Joint Venture following the Closing)
shall have any access, right, title or interest to or in any insurance policies
or programs or self-insured programs (including to any claims or rights to make
claims or any rights to proceeds). Seller or any of its Affiliates may,
effective at the applicable Closing, amend any insurance policies or ancillary
arrangements in the manner they deem appropriate to give effect to this Section
5.9. From and after the applicable Closing, Purchaser shall be responsible for
securing all insurance it considers appropriate for its operation of PD Cyprus,
the Joint Venture and the Business. Purchaser further covenants and agrees not
to seek to assert or to exercise any rights or claims of PD Cyprus, the Joint
Venture or the Business under or in respect of any past or current insurance
policy, program or self-insurance program under which PD Cyprus, the Joint
Venture or the Business is a named insured. Notwithstanding the preceding, (i)
if following the Effective Date and prior to the applicable Closing Date, any
claim is made by Seller, its Affiliates or the Joint Venture under any insurance
policy, program or self-insurance program under which they are a named insured
in respect of any Loss incurred prior to the applicable Closing with respect to
the Purchased  Assets to be sold at that Closing, then subject to, and following
the applicable Closing, Seller shall pay to Purchaser (or the Joint Venture, as
applicable) the amount of any insurance proceeds actually received by Seller or
its Affiliates (less the amount of any deductibles and related costs) in respect
of such claim, and (ii) if at the Closing in respect of the Kuwait Assets the
Joint Venture has any outstanding claims under any insurance policy, program or
self-insurance program under which the Joint Venture is a named insured Seller
agrees to maintain such claims on behalf of and for the benefit of the Joint
Venture until such claims are finally resolved. All such claims shall remain
subject to the terms of the applicable policy or program.

Section 5.10    Designated Affiliates. Purchaser shall use its commercially
reasonable best efforts to designate all of its Designated Affiliates as soon as
practicable following the Effective Date and, in any event, shall use make such
designation not less than 30 days following the Effective Date including by
providing Seller a copy of Purchaser’s proposed acquisition structure.

Section 5.11    Credit and Performance Support Obligations. Purchaser shall use
its commercially reasonable best efforts to cause Seller and the Selling
Entities (as applicable) and their respective Affiliates to be absolutely and
unconditionally relieved on or prior to the relevant Closing of all Liabilities
arising out of the letters of credit, performance bonds, custom bonds, corporate
guarantees and other similar items issued and outstanding in connection with the
Business and Purchased Assets to which that Closing relates as listed in Section
5.11 of the Seller Disclosure Schedule (together the “Seller Guarantees”), and
Purchaser shall, in accordance with the procedures set forth in Article 8,
indemnify Seller, the Selling Entities and their respective Affiliates against
any Losses arising from the Seller Guarantees to the extent such Losses are the
result of the act or omission of Purchaser or its Designated Affiliates after
the relevant Closing to which such Seller Guarantees relate. Purchaser agrees to
continue to use its commercially reasonable best efforts after the relevant
Closing to which such Seller Guarantees relate to relieve Seller and the Selling
Entities and their respective Affiliates of all such Seller Guarantees to which
the Closing relates; provided that Purchaser shall not be obligated to assume
any Liability for the acts or omissions of Seller or the Selling Entities or
their respective Affiliates (including for purposes of this Section 5.11 the
Joint Venture) or any Liabilities that relate to the period prior to Closing. As
a covenant under this Agreement, Seller shall cause all of the Seller Guarantees
for each jurisdiction to be maintained in full force and effect for a period of
up to 90 days following the applicable Closing for that jurisdiction. If the
aggregate amount of Seller Guarantees at the Closing for that jurisdiction
exceeds the Relevant Amount for that jurisdiction, then Seller shall cause to be
maintained such Seller Guarantees in excess of the Relevant Amount in that
jurisdiction for a period of up to 180 days following the applicable Closing
(but only with respect to such excess). For purposes of this Section 5.11,
“Relevant Amount” means $8,863,570 in Algeria, and $56,877,252 in Kuwait. The
other terms upon which the Seller Guarantees will be maintained are set forth in
the Transition Services Agreement and the Seller hereby agrees to maintain the
Seller Guarantees for the periods referred to in

39
428928/HOUDMS 

--------------------------------------------------------------------------------

 

the Transition Services Agreement. Seller shall update Section 5.11 of the
Seller Disclosure Schedule to remove any Seller Guarantees that are no longer
required, but shall only be entitled to add new Seller Guarantees to Section
5.11 of the Seller Disclosure Schedule where such new Seller Guarantees are
required to be maintained pursuant to Drilling Contracts that have been entered
into after the Effective Date, or which have been required for the importation
of assets that are included within the Purchased Assets that are to be sold to
Purchaser.

Section 5.12    Seller Names and Marks. Effective as of the applicable Closing,
Purchaser shall, and shall cause its Affiliates to, cease any and all uses of
any Trademarks that constitute, include, are derived from or is confusingly
similar to Trademarks of Seller and its Affiliates other than the Transitional
Marks and the Joint Venture Trademarks. Purchaser acknowledges and agrees that
the Trademarks of Seller and its Affiliates shall remain the exclusive property
of Seller and its respective Affiliates, as applicable, and Purchaser shall have
no right to use and shall receive no interest in any Trademark of Seller or its
Affiliates pursuant to this Agreement, other than the limited use of
Transitional Marks expressly set forth in this Section 5.12 and the continued
use of the Joint Venture Trademarks. Effective as of the applicable Closing,
Purchaser shall, and shall cause its Affiliates to, as soon as reasonably
practicable, cease any and all uses of the Transitional Marks, including by no
later than 90 days after the applicable Closing Date, (i) deleting all the
Transitional Marks from all public or customer-facing materials, including, as
applicable, all business cards, schedules, stationery, packaging materials,
displays, promotional materials, forms, websites, e-mail, computer software and
systems and other materials, and deleting or stickering over the Transitional
Marks in all manuals, distributed in connection with the Business, and (ii)
removing all the Transitional Marks from all signage at the real property
occupied by the Business. Purchaser shall not use the Transitional Marks in a
manner that could reasonably be expected to reflect negatively on such name and
marks or on Seller or any of its respective Affiliates. To the extent of
Seller’s or its Affiliates’ right therein (if any), Seller grants the Joint
Venture a perpetual and royalty free right and license to use the Joint Venture
Trademarks in the Territory from the Closing in respect of the Kuwait Assets and
following the Closing in respect of the Kuwait Assets neither Seller or its
Affiliates shall seek to interfere with or object to the Joint Venture’s use of
the Joint Venture Trademarks in the Territory.

Section 5.13    Supplements to Disclosure Schedules. Seller and Purchaser each
may, from time to time prior to the Initial Closing by written notice to the
other Party, supplement its respective Disclosure Schedule or add a schedule to
its respective Disclosure Schedule (such added schedule to be deemed a
supplement hereunder) in order to disclose any matter which, if occurring prior
to the Effective Date, would have been required to be set forth or described in
its Disclosure Schedule or to correct any inaccuracy or breach in the
representations and warranties made by Seller or Purchaser in this Agreement, as
applicable. Subject to this Section 5.13, none of such supplements to a
Disclosure Schedule will be deemed to cure the representations and warranties to
which such matters relate with respect to satisfaction of the conditions set
forth in Section 6.1(a) or Section 6.2(a) or any other claim, as applicable, or
otherwise affect any other term or condition contained in this Agreement;
provided that unless a Party will have delivered a notice of termination with
respect to such matter as contemplated by Section 7.1(d) or Section 7.1(e), as
applicable, within 10 Business Days after the receipt by such Party of any
supplement to the Disclosure Schedule of the other Party pursuant to this
Section 5.13, then such Party will have waived any and all rights to terminate
this Agreement pursuant to Section 7.1(d) or Section 7.1(e), as applicable.
Notwithstanding anything in this Section 5.13 to the contrary, prior to the
applicable Closing Date, Seller shall update Section 5.11 of the Seller
Disclosure Schedule subject to, and in accordance with Section 5.11, and shall
also update Section 1.1(b)(ii) and Section 3.11(a) of the Seller Disclosure
Schedule to account for Contracts that were entered into or that have terminated
in accordance with their terms after the Effective Date and prior to the
applicable Closing Date, and such Contracts will be deemed to be (or cease to
be, as applicable) Algeria Assets or Kuwait Assets, as the case may be;
provided, however, that any Contract that is not a Drilling Contract shall not
be added to Section 1.1(b)(ii) of the Seller Disclosure Schedule and shall not
become part of the Algeria Assets without the prior written approval of
Purchaser. If any update to Section 1.1(b)(ii) and Section 3.11(a) of the Seller
Disclosure Schedule relate to or affect any Drilling Contract, the Parties will
agree to the necessary revisions to Section 1.1(k) and Section 1.1(dd) of the
Seller Disclosure Schedule to reflect such updates, on the basis that the
overall amount of Backlog shall not be reduced, but that payments which are no
longer due to be made because

40
428928/HOUDMS 

--------------------------------------------------------------------------------

 

of the early termination of any Drilling Contract that was in force on the
Effective Date can be compensated for by payments due to be made under Drilling
Contracts entered into after the Effective Date and in force on the applicable
Closing Date.

Section 5.14    Non-Competition/Non-Solicitation. Following the Closing in
respect of the Kuwait Assets, Seller shall not and shall cause each of its
Affiliates not to use the Joint Venture Trademarks in the Territory. During the
period commencing on a Closing Date and ending on the three year anniversary of
that Closing Date in respect of the Territory which is subject to that Closing,
Seller shall not, and shall cause each of its Affiliates not to:
(a)    engage in the oil and gas land contract drilling rig business in the
Territory for which a Closing has occurred; provided, however, that, nothing in
this Section 5.14 shall prohibit Seller or its Affiliates from disposing of the
remainder of its rigs currently outside the Territory to any Person (whether or
not a competitor of Purchaser) and regardless of when or how such Person deploys
or locates such rigs throughout the world; provided, further, that, for the
purposes of this Section 5.14(a), ownership of securities having no more than 1%
of the outstanding voting power of any Person which are listed on any national
securities exchange will not be deemed to be in violation of this Section
5.14(a) as long as the Person owning such securities has no other connection or
relationship with such Person; and
(b)    (i) solicit any Transferring Employee or any other employee of Purchaser,
a Designated Affiliate or the Joint Venture in the Territory for which a Closing
has occurred away from or out of the employ of Purchaser, a Designated Affiliate
or the Joint Venture unless such individual will have ceased to be employed by
Purchaser, a Designated Affiliate or the Joint Venture for a period of at least
six months prior thereto or (ii) solicit the customer of Purchaser or a
Designated Affiliate (or the Joint Venture after such Closing) who is at Closing
or who has been at any time during the twelve months immediately preceding
Closing a client or customer of the Business with a view to providing goods or
service, to such customer in competition with the Business (or any part of it)
as it was carried on at the applicable Closing Date or in the twelve months
immediately preceding the applicable Closing Date or (iii) cause, induce or
attempt to cause or induce any customer, strategic partner, supplier,
distributor, landlord or others doing business with Purchaser, a Designated
Affiliate or the Joint Venture in the Territory and relating to the Purchased
Assets (including any Independent Contractors) to cease or reduce the extent of
its business relationship with Purchaser, a Designated Affiliate or the Joint
Venture or to deal with any competitor of Purchaser, a Designated Affiliate or
the Joint Venture; provided, however, that this Section 5.14(b) will not be
deemed to prohibit Seller and its Affiliates from engaging in general media
advertising or solicitation that may be targeted to a particular geographic or
technical area but that is not targeted towards any Transferring Employees or
employees of Purchaser, a Designated Affiliate or the Joint Venture in the
Territory for which a Closing has occurred, or otherwise hiring any Person that
responds to such solicitation.

41
428928/HOUDMS 

--------------------------------------------------------------------------------

 

(c)    The covenants in Section 5.14 are intended to be for the benefit of, and
shall be enforceable by Purchaser or its Designated Affiliates and the Joint
Venture and apply to actions carried out by Seller (or any of its Affiliates) in
any capacity and whether directly or indirectly, on its own behalf or on behalf
of, or jointly with, any other person. Each of the covenants in Section 5.14 is
a separate undertaking by Seller and shall be enforceable by Purchaser or its
Designated Affiliates separately and independently of their right to enforce any
one or more of the other covenants contained in that clause.
Section 5.15    Restructuring. Promptly following the Effective Date, but in any
event prior to the Closing at which the Kuwait Assets are sold, Seller will
consummate an internal restructuring of PD Cyprus (the “Restructuring”),
primarily by means of a scheme of arrangement providing for the transfer of the
assets of PD Cyprus (other than the Purchased Equity) and the transfer of all
liabilities of PD Cyprus (save for such liabilities as Purchaser has agreed in
writing may remain with PD Cyprus), prepared in accordance with Articles 198 and
200 of the Cyprus Companies Law, by an independent expert (the “Restructuring
Plan”). The Restructuring Plan shall be duly approved and sanctioned by the
relevant courts of the Republic of Cyprus in accordance with the Laws of Cyprus,
and will be considered effective as of the date of submission of the relevant
court order with the Registrar of Companies in Cyprus, such that, as of the
applicable Closing at which the Kuwait Assets are sold, the representation and
warranty in Section 3.4(c) shall be true and correct.
Section 5.16    Post Closing Operation of the Business in Kuwait. Immediately
following the applicable Closing Date at which the Kuwait Assets are sold, and
for a period of two years thereafter, Purchaser shall conduct the business of
the Joint Venture in the same manner as conducted on the applicable Closing Date
by Seller and its Affiliates.  Without limiting the generality of the foregoing,
Purchaser shall not materially modify any Drilling Contract, Lease, or other
material Contract relating to the Kuwait Assets, provide Transferring Employees
with terms and conditions other than those that are substantially similar to
those as of the applicable Closing Date, or otherwise transfer or terminate any
Transferring Employee in Kuwait (other than for cause) during such two year
period.  Purchaser acknowledges and agrees that this Section 5.16 is a material
condition to the approval by Kuwait Oil Company (the “KOC”) of the Contemplated
Transactions, and may be enforced by KOC in the event of a breach by Purchaser
of this Section 5.16.

Article 6
CONDITIONS PRECEDENT TO OBLIGATION TO CLOSE

Section 6.1    Conditions to the Obligation of Purchaser at the Initial Closing.
Subject to Section 6.1(f), the obligation of Purchaser to close the Contemplated
Transactions to be consummated at the Initial Closing is subject to the
satisfaction, on or before the Initial Closing Date, of each of the following
conditions (any of which may be waived by Purchaser, in whole or in part, in its
sole discretion), it being acknowledged and agreed that such conditions must
only be satisfied with respect to one of the Kuwait Assets or the Algeria Assets
(but not both) for the Initial Closing to occur, and that such conditions shall
only apply with respect to such assets in the relevant Territory included in the
Initial Closing:

42
428928/HOUDMS 

--------------------------------------------------------------------------------

 

(a)    Accuracy of Representations and Warranties. The representations and
warranties of Seller in Article 3, not qualified by materiality, must be true
and correct in all material respects as of the Initial Closing (except to the
extent any such representation or warranty speaks as of the Effective Date or
any other specific date, in which case such representation or warranty must have
been true and correct as of such date), and all representations and warranties
of Seller in Article 3 qualified by materiality or similar qualification must be
true and correct in all respects as of the Initial Closing (except to the extent
any such representation or warranty speaks as of the Effective Date or any other
specific date, in which case such representation or warranty must have been true
and correct as of such date);
(b)    Performance of Covenants. All of the covenants and obligations that
Seller is required to perform or comply with under this Agreement on or before
the Initial Closing Date must have been duly performed and complied with in all
material respects, except for the covenants that Seller is required to perform
or comply with under Section 5.2 and Section 5.15 which must have been performed
and complied with in all respects;
(c)    Governmental Authorizations; Consents. Each of the Governmental
Authorizations and consents listed in Section 6.1(c) of the Seller Disclosure
Schedule relating to the Kuwait Assets or Algeria Assets, as applicable, must
have been obtained in a form and substance satisfactory to Purchaser (acting
reasonably) and must be in full force and effect, and all required notices
listed in Section 6.1(c) of the Seller Disclosure Schedule relating to such
assets must have been delivered to the proper recipient;
(d)    No Action. There must not be in effect any Law or Judgment that would
prohibit or make illegal the consummation of the Contemplated Transactions
taking place at the Initial Closing or cause the Contemplated Transactions
taking place at the Initial Closing to be rescinded following consummation of
the Initial Closing;
(e)    Transaction Documents. Seller must have delivered or caused to be
delivered each document that Section 2.8(a) requires it to deliver, and each
Person (other than Seller, the Selling Entities or the Joint Venture, or their
respective Affiliates) must have delivered each Transaction Document to which it
is a party, duly executed by such Person;
(f)    Condition of the Rigs. If any Rig becomes inoperable or is destroyed
prior to the applicable Closing, then if required by Purchaser (and subject to
Section 6.1(g)) the Rig shall be treated as an “Excluded Rig” and (i) Purchaser
shall not be entitled to terminate this Agreement pursuant to Section 7.1(d) as
a result of the breach of the applicable, representation, warranty, covenant or
agreement in this Agreement unless Section 6.1(h) applies; (ii) the Excluded Rig
shall be excluded from the Kuwait Assets or the Algeria Assets (as the case may
be) and the Kuwait Cash Consideration or the Algeria Cash Consideration (as the
case may be) shall be reduced by the amount of Excluded Rig Deduction; and (iii)
the Employees that are the crew of that Excluded Rig or which otherwise are
assigned to duties related to that Excluded Rig for more 50% of their time shall
be removed from the definition of Transferring Employees;
(g)    Replacement Rigs. A Rig shall not be treated as an Excluded Rig pursuant
to Section 6.1(f) if (i) in the case of an Excluded Rig which is subject to a
Drilling Contract, Seller is able to repair such Rig or provide a replacement
rig which has been approved by Purchaser acting reasonably and the relevant
customer and is made subject to a Drilling Contract on substantially the same
terms and conditions as the Excluded Rig or (ii) in the case of an Excluded Rig
which is not contracted, Seller is able to repair such Rig or provide a
replacement rig of comparable age and specification as the Excluded Rig which is
capable of being contracted in its current condition and is in the same location
as the Excluded Rig (or such other location as Purchaser may agree); in which
case such replacement rig shall replace the Excluded Rig as part of the
Purchased Assets (and shall be deemed a “Rig”) and there shall be no Excluded
Rig Deduction (although there may be a Backlog Deduction); and

43
428928/HOUDMS 

--------------------------------------------------------------------------------

 

(h)    Excluded Rig Deduction. If the Initial Closing concerns the Kuwait Assets
and the aggregate Excluded Rig Deduction that would be available to Purchaser
under Section 6.1(f) is equal to or greater than 25% of the Kuwait Cash
Consideration, then Purchaser shall be entitled to terminate this Agreement,
solely with respect to the Kuwait Assets, pursuant to Section 7.1(d). If the
Initial Closing concerns the Algeria Assets and the aggregate Excluded Rig
Deduction that would be available to Purchaser under Section 6.1(f) is equal to
or greater than 25% of the Algeria Cash Consideration, then Purchaser shall be
entitled to terminate this Agreement, solely with respect to the Algeria Assets,
pursuant to Section 7.1(d).

Section 6.2    Conditions to the Obligation of Seller at the Initial Closing.
The obligation of Seller to close the Contemplated Transactions to be
consummated at the Initial Closing is subject to the satisfaction, on or before
the Initial Closing Date, of each of the following conditions (any of which may
be waived by Seller, in whole or in part, in its sole discretion), it being
acknowledged and agreed that such conditions must only be satisfied with respect
to one of the Kuwait Assets or the Algeria Assets (but not both) for the Initial
Closing to occur, and that such conditions shall only apply with respect to such
assets in the relevant Territory included in the Initial Closing:
(a)    Accuracy of Representations and Warranties. The representations and
warranties of Purchaser in Article 4, not qualified by materiality, must be true
and correct in all material respects as of the Initial Closing (except to the
extent any such representation or warranty speaks as of the Effective Date or
any other specific date, in which case such representation or warranty must have
been true and correct in all material respects as of such date) and all
representations and warranties of Purchaser in Article 4 qualified by
materiality must be true and correct in all respects as of the Initial Closing
(except to the extent any such representation or warranty speaks as of the
Effective Date or any other specific date, in which case such representation or
warranty must have been true and correct as of such date);
(b)    Performance of Covenants. All of the covenants and obligations that
Purchaser is required to perform or comply with under this Agreement on or
before the Initial Closing Date must have been duly performed and complied with
in all material respects;
(c)    Governmental Authorizations; Consents. Each of the Governmental
Authorizations and consents listed in Section 6.2(c) of the Purchaser Disclosure
Schedule must have been obtained in a form and substance satisfactory to Seller
(acting reasonably) and must be in full force and effect, and all required
notices listed in Section 6.2(c) of the Purchaser Disclosure Schedule must have
been delivered to the proper recipient;
(d)    No Action. There must not be in effect any Law or Judgment that would
prohibit or make illegal the consummation of the Contemplated Transactions
taking place at the Initial Closing or cause the Contemplated Transactions
taking place at the Initial Closing to be rescinded following consummation of
the Initial Closing; and
(e)    Transaction Documents. Purchaser must have delivered or caused to be
delivered to Seller each document that Section 2.8(b) requires it to deliver,
and each Person (other than Purchaser, its Designated Affiliates, or their
respective Affiliates) must have delivered each Transaction Document to which it
is a party, duly executed by such Person.

44
428928/HOUDMS 

--------------------------------------------------------------------------------

 

Section 6.3    Conditions to the Obligation of Purchaser at a Subsequent
Closing. The obligation of Purchaser to close the Contemplated Transactions to
be consummated at any Subsequent Closing is subject to the satisfaction, on or
before the Subsequent Closing Date, of each of the following conditions (any of
which may be waived by Purchaser, in whole or in part, in its sole discretion),
it being acknowledged and agreed that such conditions must only be satisfied
with respect to one of the Kuwait Assets or the Algeria Assets included in the
Subsequent Closing, as applicable, and that such conditions shall only apply
with respect to such assets in the relevant Territory included in the Subsequent
Closing, in each case after giving pro forma effect to the Initial Closing:
(a)    Accuracy of Representations and Warranties.  The representations and
warranties of Seller in Article 3, not qualified by materiality, must be true
and correct in all material respects as of the Subsequent Closing (except to the
extent any such representation or warranty speaks as of the Effective Date or
any other specific date, in which case such representation or warranty must have
been true and correct as of such date) and all representations and warranties of
Seller in Article 3 qualified by materiality must be true and correct in all
respects as of the Initial Closing (except to the extent any such representation
or warranty speaks as of the Effective Date or any other specific date, in which
case such representation or warranty must have been true and correct as of such
date);
(b)    Performance of Covenants.  All of the covenants and obligations that
Seller is required to perform or comply with under this Agreement on or before
the Subsequent Closing Date must have been duly performed and complied with in
all material respects, except for the covenants that Seller is required to
perform or comply with under Section 5.2 and Section 5.15, which must have been
performed and complied with in all respects;
(c)    Governmental Authorizations; Consents. Each of the Governmental
Authorizations and consents listed in Section 6.1(c) of the Seller Disclosure
Schedule with respect to the Kuwait Assets or Algeria Assets, as applicable,
must have been obtained in a form and substance satisfactory to Purchaser
(acting reasonably) and must be in full force and effect, all required notices
listed in Section 6.1(c) of the Seller Disclosure Schedule with respect to the
Kuwait Assets or Algeria Assets, as applicable, must have been delivered to the
proper recipient;
(d)    No Action. There must not be in effect any Law or Judgment that would
prohibit or make illegal the consummation of any of the Contemplated
Transactions taking place at the Subsequent Closing or cause any of the
Contemplated Transactions taking place at the Subsequent Closing to be rescinded
following consummation of the Subsequent Closing;
(e)    Transaction Documents. Seller must have delivered or caused to be
delivered each document that Section 2.9(a) requires it to deliver, and each
Person (other than Seller, the Selling Entities or the Joint Venture, or their
respective Affiliates) must have delivered each Transaction Document to which it
is a party, duly executed by such Person;
(f)    Condition of the Rigs. If any Rig becomes inoperable or is destroyed
prior to the applicable Subsequent Closing, then if required by Purchaser (and
subject to Section 6.3(g)) the Rig shall be treated as an “Excluded Rig” and
(i) Purchaser shall not be entitled to terminate this Agreement pursuant to
Section 7.1(d) as a result of the breach of the applicable, representation,
warranty, covenant or agreement in this Agreement unless Section 6.3(h) applies;
(ii) the Excluded Rig shall be excluded from the Kuwait Assets or the Algeria
Assets (as the case may be) and the Kuwait Cash Consideration or the Algeria
Cash Consideration (as the case may be) shall be reduced by the amount of the
Excluded Rig Deduction; and (iii) any Employees that are the crew of that
Excluded Rig or which otherwise are assigned to duties related to that Excluded
Rig for more 50% of their time shall be removed from the definition of
Transferring Employees;
(g)    Replacement Rigs. A Rig shall not be treated as an Excluded Rig pursuant
to Section 6.3(f) if (i) in the case of an Excluded Rig which is subject to a
Drilling Contract, Seller is able to repair such Rig or provide a replacement
rig which has been approved by Purchaser acting reasonably and the relevant
customer

45
428928/HOUDMS 

--------------------------------------------------------------------------------

 

and is made subject to a Drilling Contract on substantially the same terms and
conditions as the Excluded Rig or (ii) in the case of an Excluded Rig which is
not contracted, Seller is able to repair such Rig or provide a replacement rig
of comparable age and specification as the Excluded Rig which is capable of
being contracted in its current condition and is in the same location as the
Excluded Rig (or such other location as Purchaser may agree); in which case such
replacement rig shall replace the Excluded Rig as part of the Purchased Assets
(and shall be deemed a “Rig”) and there shall be no Excluded Rig Deduction
(although there may be a Backlog Deduction); and
(h)    Excluded Rig Deduction. If the Subsequent Closing concerns the Kuwait
Assets and the aggregate Excluded Rig Deduction that would be available to
Purchaser under Section 6.3(f) is equal to or greater than 25% of the Kuwait
Cash Consideration, then Purchaser shall be entitled to terminate this Agreement
pursuant to Section 7.1(g).  If the Subsequent Closing concerns the Algeria
Assets and the aggregate Excluded Rig Deduction that would be available to
Purchaser under Section 6.3(f) is equal to or greater than 25% of the Algeria
Cash Consideration, then Purchaser shall be entitled to terminate this Agreement
pursuant to Section 7.1(g).

Section 6.4    Conditions to the Obligation of Seller at a Subsequent Closing.
The obligation of Seller to close the Contemplated Transactions to be
consummated at the Subsequent Closing is subject to the satisfaction, on or
before the Subsequent Closing Date, of each of the following conditions (any of
which may be waived by Seller, in whole or in part, in its sole discretion), it
being acknowledged and agreed that such conditions must only be satisfied with
respect to one of the Kuwait Assets or the Algeria Assets included in the
Subsequent Closing, as applicable, and that such conditions shall only apply
with respect to such assets in the relevant Territory included in the Subsequent
Closing, in each case after giving pro forma effect to the Initial Closing:
(a)    Accuracy of Representations and Warranties.  The representations and
warranties of Purchaser in Article 4, not qualified by materiality, must be true
and correct in all material respects as of the Subsequent Closing (except to the
extent any such representation or warranty speaks as of the Effective Date or
any other specific date, in which case such representation or warranty must have
been true and correct in all material respects as of such date) and all
representations and warranties of Purchaser in Article 4 qualified by
materiality must be true and correct in all respects as of the Initial Closing
(except to the extent any such representation or warranty speaks as of the
Effective Date or any other specific date, in which case such representation or
warranty must have been true and correct as of such date);
(b)    Performance of Covenants.  All of the covenants and obligations that
Purchaser is required to perform or comply with under this Agreement on or
before the Subsequent Closing Date must have been duly performed and complied
with in all material respects;
(c)    Governmental Authorizations; Consents. Each of the Governmental
Authorizations and consents listed in Section 6.2(c) of the Purchaser Disclosure
Schedule with respect to the Kuwait Assets or Algeria Assets, as applicable,
must have been obtained in a form and substance satisfactory to Seller (acting
reasonably) and must be in full force and effect, all required notices listed in
Section 6.2(c) of the Purchaser Disclosure Schedule with respect to the Kuwait
Assets or Algeria Assets, as applicable, must have been delivered to the proper
recipient;
(d)    No Action. There must not be in effect any Law or Judgment that would
prohibit or make illegal the consummation of any of the Contemplated
Transactions taking place at the Subsequent Closing or cause any of the
Contemplated Transactions taking place at the Subsequent Closing to be rescinded
following consummation of the Subsequent Closing; and

46
428928/HOUDMS 

--------------------------------------------------------------------------------

 

(e)    Transaction Documents. Purchaser must have delivered or caused to be
delivered to Seller each document that Section 2.9(b) requires it to deliver,
and each Person (other than Purchaser, its Designated Affiliates, or their
respective Affiliates) must have delivered each Transaction Document to which it
is a party, duly executed by such Person.

Article 7
TERMINATION
Section 7.1    Termination Events. This Agreement may, by written notice, be
terminated as follows:
(a)    prior to either the Initial Closing, or any Subsequent Closing (but only
with respect to the subject matter of the Subsequent Closing), by mutual written
consent of the Parties;
(b)    prior to the Initial Closing only, by Seller or Purchaser, for any reason
or no reason, in their sole discretion;
(c)    by either Party prior to the Initial Closing Date or any Subsequent
Closing if any Governmental Authority has issued a nonappealable final Judgment
or taken any other nonappealable final action, in each case having the effect of
permanently restraining, enjoining or otherwise prohibiting the Contemplated
Transactions that have not yet taken place; provided that the right to terminate
this Agreement under this Section 7.1(c) will not be available to any Party
whose failure to fulfill any material obligation under this Agreement has been
the cause of or resulted in the action or event described in this Section 7.1(c)
occurring;
(d)    prior to the Initial Closing Date only, by Purchaser (i) pursuant to
Section 6.1(h) or (ii) if Seller shall have materially breached or failed to
perform any of its representations, warranties, covenants or agreements set
forth in this Agreement, which breach of or failure to perform (A) would give
rise to the failure of a condition set forth in Section 6.1(a) or Section 6.1(b)
and (B) is incapable of being cured on or prior to the Initial End Date or, if
capable of being cured by the Initial End Date, Seller shall not have commenced
good-faith efforts to cure the breach or failure to perform within 30 calendar
days following (or the breach or failure to perform is not cured by the earlier
of the Initial End Date or a further 30 calendar days following) receipt by
Seller of written notice from Purchaser of the breach or failure to perform;
provided that the right to terminate this Agreement under this Section 7.1(d)
will not be available if Purchaser’s failure to fulfill any material obligation
under this Agreement has been the cause of or resulted in the action or event
described in this Section 7.1(d) occurring; provided, further, that any
termination arising under Section 6.1(h) shall be a partial termination in
respect only of the Kuwait Assets or the Algeria Assets as provided for in
Section 6.1(h);
(e)    prior to the Initial Closing Date only, by Seller if Purchaser shall have
materially breached or failed to perform any of its representations, warranties,
covenants or agreements set forth in this Agreement, which breach of or failure
to perform (i) would give rise to the failure of a condition set forth in
Section 6.2(a) or Section 6.2(b) and (ii) is incapable of being cured on or
prior to the Initial End Date or, if capable of being cured by the Initial End
Date, Purchaser shall not have commenced good-faith efforts to cure the breach
or failure to perform within 30 calendar days following (or the breach or
failure to perform is not cured within 60 calendar days following) receipt by
Purchaser of written notice from Seller of the breach or failure to perform;
provided that the right to terminate this Agreement under this Section 7.1(e)
will not be available if Seller’s failure to fulfill any material obligation
under this Agreement has been the cause of or resulted in the action or event
described in this Section 7.1(e) occurring;
(f)    prior to the Initial Closing Date only, by written notice of either Party
to the other Party, if the Initial Closing shall not have occurred on or before
December 31, 2018 (the “Initial End Date”); provided that

47
428928/HOUDMS 

--------------------------------------------------------------------------------

 

the right to terminate under this Section 7.1(f) will not be available to any
Party whose material breach of this Agreement or failure to fulfill any material
obligation under this Agreement has been a cause of or resulted in the failure
of the Initial Closing to occur by such date;
(g)    following the Initial Closing Date and prior to any Subsequent Closing
Date (but only with respect to the subject matter of the Subsequent Closing), by
Purchaser (i) pursuant to Section 6.3(h) or (ii) if Seller shall have materially
breached or failed to perform any of its representations, warranties, covenants
or agreements set forth in this Agreement, which breach of or failure to perform
(A) would give rise to the failure of a condition set forth in Section 6.3(a) or
Section 6.3(b) and (B) is incapable of being cured on or prior to the Subsequent
End Date or, if capable of being cured by the Subsequent End Date, Seller shall
not have commenced good-faith efforts to cure the breach or failure to perform
within 30 calendar days following (or the breach or failure to perform is not
cured by the earlier of the Subsequent End Date or a further 30 calendar days
following) receipt by Seller of written notice from Purchaser of the breach or
failure to perform; provided that the right to terminate this Agreement under
this Section 7.1(g) will not be available if Purchaser’s failure to fulfill any
material obligation under this Agreement has been the cause of or resulted in
the action or event described in this Section 7.1(g) occurring;
(h)    following the Initial Closing Date and prior to any Subsequent Closing
Date (but only with respect to the subject matter of the Subsequent Closing), by
Seller if Purchaser shall have materially breached or failed to perform any of
its representations, warranties, covenants or agreements set forth in this
Agreement, which breach of or failure to perform (i) would give rise to the
failure of a condition set forth in Section 6.4(a) or Section 6.4(b) and (ii) is
incapable of being cured on or prior to the Subsequent End Date or, if capable
of being cured by the Subsequent End Date, Purchaser shall not have commenced
good-faith efforts to cure the breach or failure to perform within 30 calendar
days following (or the breach or failure to perform is not cured by the earlier
of the Subsequent End Date or a further 60 calendar days following) receipt by
Purchaser of written notice from Seller of the breach or failure to perform;
provided that the right to terminate this Agreement under this Section 7.1(h)
will not be available if Seller’s failure to fulfill any material obligation
under this Agreement has been the cause of or resulted in the action or event
described in this Section 7.1(h) occurring;
(i)    following the Initial Closing Date and prior to any Subsequent Closing
Date (but only with respect to the subject matter of the Subsequent Closing), by
written notice of either Party to the other Party, if the Subsequent Closing
shall not have occurred on or before March 31, 2019 (the “Subsequent End Date”);
provided that the right to terminate under this Section 7.1(i) will not be
available to any Party whose material breach of this Agreement or failure to
fulfill any material obligation under this Agreement has been a cause of or
resulted in the failure of the Subsequent Closing to occur by such date.
Section 7.2    Effect of Termination. If this Agreement is terminated pursuant
to Section 7.1 prior to the Initial Closing Date, this Agreement and all rights
and obligations of the Parties under this Agreement automatically end without
Liability against any Party or its Affiliates, except that (a) Section 5.5
(Confidentiality), Section 5.6 (Public Announcements), Section 7.3 (Certain
Effects of Termination), Article 11 (General Provisions) (except for Section
11.13 (Specific Performance)) and this Section 7.2 will remain in full force and
survive any termination of this Agreement and (b) if either Party terminates
this Agreement pursuant to Section 7.1(g), (h) or (i) with respect to the Kuwait
Assets or the Algeria Assets that were not included in the Initial Closing, all
rights and obligations of the Parties hereunder with respect to the Kuwait
Assets or Algeria

48
428928/HOUDMS 

--------------------------------------------------------------------------------

 

Assets, as the case may be, shall terminate without any liability of either
Party; provided, however, such termination shall have no effect on the purchase
and sale of the Purchased Assets consummated at the Initial Closing (including,
for the avoidance of doubt, no right to rescind such transactions as a result of
the termination and no effect on the representations and warranties given at the
Initial Closing or the indemnity obligations or other post-Initial Closing
obligations hereunder such as non-competition obligations). Notwithstanding
anything in this Agreement to the contrary, if this Agreement is terminated by a
Party because of the knowing and intentional breach of this Agreement by the
other Party or because one or more of the conditions to the terminating Party’s
obligations under this Agreement is not satisfied as a result of the other
Party’s knowing and intentional failure to comply with its obligations under
this Agreement, the terminating Party’s right to pursue all legal remedies will
survive such termination unimpaired.
Section 7.3    Certain Other Effects of Termination.
(a)    If the Parties terminate this Agreement pursuant to Section 7.1,
Purchaser will return and/or destroy any information furnished to Purchaser in
connection with this Agreement (other than as it relates to any Business
Information transferred in conjunction with any Initial Closing, if applicable).
(b)    If this Agreement is terminated pursuant to Section 7.1, then the
Deposit, or any remaining portion thereof following the Initial Closing, (and in
each case along with any accrued interest thereon), shall be returned to
Purchaser less 50% of the fees and expenses of the Escrow Agent; provided that
(i) if this Agreement is terminated by Seller prior to the Initial Closing
pursuant to Section 7.1(e) (other than a termination arising from a material
breach of the representations and warranties set forth in Section 4.4 as a
result of any Proceeding initiated against Purchaser following the Effective
Date), or by Purchaser pursuant to Section 7.1(b), the Deposit (and any accrued
interest thereon less 50% of the fees and expenses of the Escrow Agent) shall be
paid to Seller pursuant to the terms of the Escrow Agreement; (ii) if this
Agreement is partially terminated by Purchaser prior to the Initial Closing
pursuant to Section 6.1(h) that part of the Deposit which relates to the assets
that have been terminated as provided for in Section 2.4(a) shall be returned to
Purchaser, but the remainder of the Deposit shall be retained and held subject
to the terms of this Agreement and the Escrow Agreement in relation to the
assets that have not been terminated; and (iii) if this Agreement is terminated
by Seller following the Initial Closing but prior to any Subsequent Closing
pursuant to Section 7.1(h) (other than a termination arising from a material
breach of the representations and warranties by Purchaser set forth in Section
4.4 as a result of any Proceeding initiated against Purchaser following the
Effective Date) such part of the Deposit that has not been paid to Seller at the
Initial Closing (and any Subsequent Closing that has taken place) (and any
accrued interest thereon less 50% of the fees and expenses of the Escrow Agent)
shall be paid to Seller pursuant to the Escrow Agreement. Notwithstanding
anything else to the contrary in this Agreement, any part of the Deposit
forfeited to Seller pursuant to this Section 7.3(b) shall be paid to Seller in
full and final settlement of all claims against Purchaser and its Designated
Affiliates under this Agreement and the Transaction Documents in respect of the
Contemplated Transactions that have not occurred as a result of such
termination, and Purchaser and its Designated Affiliates shall have no further
liability under this Agreement or the Transaction Documents in respect of such
Contemplated Transactions.
(c)    If this Agreement is terminated by Seller pursuant to Section 7.1(b),
Seller shall reimburse Purchaser for any Losses incurred by Purchaser as a
result of such termination. The amount of such Losses for which Purchaser may be
entitled to reimbursement (if any) pursuant to this Section 7.3(c) shall be
determined by binding arbitration in accordance with the procedures set forth in
Section 11.11(b); provided, however, that the Parties agree that in no event
shall the amount of Losses for which Purchaser may be entitled to reimbursement
(if any) exceed the Termination Cap; provided, further, that for purposes of
calculating any Losses pursuant to this Section 7.3(c), the limitations in
Section 11.12 shall not apply. Notwithstanding anything else to the contrary in
this Agreement, any amounts paid to Purchaser pursuant to this Section 7.3(c)
shall be in full and final settlement

49
428928/HOUDMS 

--------------------------------------------------------------------------------

 

of all claims against Seller and its Affiliates under this Agreement and the
Transaction Documents in respect of the Contemplated Transactions that have not
occurred as a result of such termination and Seller and its Affiliates shall
have no further liability under this Agreement or the Transaction Documents in
respect of such Contemplated Transactions.

Article 8
INDEMNIFICATION
Section 8.1    Indemnification by Seller. If the Initial Closing occurs,
thereafter, from the date of the Initial Closing with respect to the subject
matter of such Initial Closing and, if there is a Subsequent Closing, from the
date of the Subsequent Closing with respect to the subject matter of such
Subsequent Closing, and subject to the limitations expressly set forth in
Section 8.4, 8.5, 8.6, 8.7 and 11.12, Seller shall indemnify and hold harmless
Purchaser, its Designated Affiliates and their respective stockholders
(collectively, the “Purchaser Indemnified Parties”) from and against any and all
Losses incurred by the Purchaser Indemnified Parties in relation to the relevant
Closing (and solely with respect to the subject matter of the applicable
Closing) arising or resulting from (a) any breach of any representation or
warranty set forth in Article 3 or in any Transfer Agreement, (b) any breach of
any covenant of Seller set forth in this Agreement or any Transfer Agreement,
(c) any Retained Taxes and (d) any Excluded Liabilities.
Section 8.2    Indemnification by Purchaser. If the Initial Closing occurs,
thereafter, from the date of the Initial Closing with respect to the subject
matter of such Initial Closing and, if there is a Subsequent Closing, from the
date of the Subsequent Closing with respect to the subject matter of such
Subsequent Closing, and subject to the limitations expressly set forth in
Section 8.4, 8.5, 8.6, 8.7 and 11.12, Purchaser shall indemnify and hold
harmless Seller and its stockholders (collectively, the “Seller Indemnified
Parties”) from and against any and all Losses incurred by the Seller Indemnified
Parties in relation to the relevant Closing (and solely with respect to the
subject matter of the applicable Closing) arising or resulting from (a) any
breach of any representation or warranty set forth in Article 4 or in any
Transfer Agreement, (b) any breach of any covenant of Purchaser set forth in
this Agreement or any Transfer Agreement, (c) any Other Taxes and (d) any
Assumed Liabilities.
Section 8.3    Claim Procedure.
(a)    A party that seeks indemnity under this Article 8 (an “Indemnified
Party”) will give written notice (a “Claim Notice”) to the party from whom
indemnification is sought (an “Indemnifying Party”) whether the indemnifiable
Losses sought arise from matters solely between the Parties (in which case a
Claim Notice must be given within 60 days after the senior management of the
Indemnified Party has actual knowledge of such indemnifiable Losses) or from
Third Party Claims described in Section 8.3(b). The Claim Notice must contain
(i) a description and, if known, the estimated amount of any indemnifiable
Losses incurred or reasonably expected to be incurred by the Indemnified Party
(and the method for computing such Losses), (ii) a reasonable explanation of the
basis for the Claim Notice to the extent of the facts then known by the
Indemnified Party, referencing the provisions of this Agreement in respect of
which such breach or indemnifiable Losses have occurred, (iii) a demand for
payment of those indemnifiable Losses, and (iv) an acknowledgment that the Claim
Notice has been prepared and provided in good faith.
(b)    If the Indemnified Party seeks indemnity under this Article 8 in response
to a claim or Proceeding by another Person not a party to this Agreement (a
“Third Party Claim”), then the Indemnified Party must give a Claim Notice to the
Indemnifying Party within 15 days after the senior management of the Indemnified
Party has received notice or otherwise learns of the assertion of such Third
Party Claim and will include in the Claim Notice (i) the facts constituting the
basis for such Third Party Claim and the amount of the damages claimed by the
other Person, in each case to the extent known to the Indemnified Party,
accompanied by reasonable supporting documentation submitted by such third
party, (ii) the assertion of the claim or the notice of the commencement

50
428928/HOUDMS 

--------------------------------------------------------------------------------

 

of any Proceeding relating to such Third Party Claim, and (iii) an
acknowledgment that the Claim Notice has been prepared and provided in good
faith.
(c)    In the event of a Third Party Claim, the Indemnifying Party will be
entitled to participate in the defense thereof pursuant to Section 8.3(d) or, if
it so chooses, assume at any time control of the defense thereof by giving to
the Indemnified Party written notice of its intention to assume control of the
defense of such Third Party Claim.
(d)    The party not controlling the defense of the Third Party Claim (the
“Non-controlling Party”) may participate in the defense thereof at its own
expense. The Non-controlling Party will furnish the party controlling the
defense of the Third Party Claim (the “Controlling Party”) with such information
as it may have with respect to the Third Party Claim (including copies of any
summons, complaint or other pleading which may have been served on such party
and any written claim, demand, invoice, billing or other document evidencing or
asserting the same) and will otherwise cooperate with and assist the Controlling
Party and its counsel in the defense of such Third Party Claim.
(e)    The Indemnifying Party may not agree to any settlement of, or consent to
the entry of any Judgment (other than a Judgment of dismissal on the merits
without costs) arising from, any such Third Party Claim without the prior
written consent of the Indemnified Party which shall not be unreasonably
withheld, delayed or denied; provided that the consent of the Indemnified Party
will not be required if the Indemnifying Party agrees to pay any amounts payable
pursuant to such settlement or any Judgment and any such settlement or Judgment
does not include any admission or finding of Liability with respect to the
Indemnified Party. Except as provided in this Section 8.3(e), the Indemnified
Party will not agree to any settlement of, or the entry of any Judgment (other
than a Judgment of dismissal on the merits without costs) arising from, any such
Third Party Claim without the prior written consent of the Indemnifying Party,
which shall not be unreasonably withheld, delayed or denied. Following receipt
by the Indemnifying Party of a Third Party Claim and, if applicable, the
Indemnifying Party having acknowledged in writing that the Third Party Claim is
one for which the Indemnifying Party is obligated to indemnify the Indemnified
Party under this Section 8, then the Indemnified Party shall not be obligated to
take any action in relation to a Third Party Claim until the Indemnifying Party
has paid or provided security to, on behalf of the Indemnifying Party for the
cost of any action that the Indemnifying Party requests the Indemnified Party to
take.
(f)    Any party entitled to indemnification or security, shall be entitled to
receive such payment in cash.
(g)    With respect to claims related to Tax matters, to the extent any claim
procedure governed by this Section 8.3 conflicts with a claim procedure governed
by Article 9, then Article 9 shall control.
Section 8.4    Survival. All representations, warranties and covenants contained
in this Agreement will survive each Closing until their expiration on the date
that is 18 months after the applicable Closing Date, except (a) the
representations and warranties contained in Section 3.1 (Organization and Good
Standing), Section 3.2 (Authority and Enforceability), Section 3.4
(Capitalization and Ownership of PD Cyprus), Section 3.5 (Capitalization and
Ownership of the Joint Venture), Section 3.8 (Title to Purchased Assets;
Sufficiency of Purchased Assets), Section 3.12 (Tax Matters), and Section 3.19
(Brokers Fees), Section 4.1 (Organization and Good Standing), Section 4.2
(Authority and Enforceability), and Section 4.6 (Brokers Fees), which shall
survive until the expiration of the applicable statute of limitations, and (b)
all covenants (including without limitation those under Article 9 (Tax Matters)
shall survive the applicable Closing with

51
428928/HOUDMS 

--------------------------------------------------------------------------------

 

respect to such Closing until the expiration of the applicable statute of
limitations or for such shorter period as specified therein. All claims for
indemnification under this Agreement must be asserted pursuant to a Claim Notice
given prior to the expiration of the applicable survival period set forth in
this Section 8.4; provided that any representation, warranty or covenant that is
the subject of a claim for indemnification which is properly asserted pursuant
to a Claim Notice given after the applicable Closing Date and within the
survival period specified in this Section 8.4 will survive until, but only for
purposes of, the resolution of such claim. For the avoidance of doubt, a Claim
Notice may be given within the survival period specified in this Section 8.4 in
respect of claims which are unknown, contingent, unaccrued, unliquidated, not
yet due, speculative or unquantified (on the basis that to the extent it is
liable for those claims, Seller shall be liable once the claims are known,
uncontingent, accrued, liquidated, due, asserted or quantified as the case may
be).
Section 8.5    Limitations on Liability.
(a)    Cap and Deductible. Seller shall have no indemnity obligation under
Section 8.1(a) and no indemnification payments will be made by or on behalf of
Seller under Section 8.1(a) (i) in respect of any individual claim or series of
claims having the same nature or origin or which arise from the same facts,
events or circumstances where the indemnifiable Losses relating thereto are less
than $50,000 and such items will not be aggregated for purposes of calculating
the Deductible, and (ii) until the aggregate amount of indemnifiable Losses for
which Seller would (but for this clause (ii)) be liable thereunder exceeds 0.8%
of the Cash Consideration actually paid by Purchaser under to this Agreement
(the “Deductible”), and then only to the extent of such excess over the
Deductible. The aggregate total amount in respect of which Seller (including its
Affiliates) may be liable under this Agreement to the Purchaser Indemnified
Parties will not exceed 12% of the Cash Consideration actually paid by Purchaser
to Seller at one or more Closings pursuant to this Agreement; provided, however,
that with respect to the representations and warranties set forth in Section 3.1
(Organization and Good Standing), Section 3.2 (Authority and Enforceability),
Section 3.4 (Capitalization and Ownership of PD Cyprus), Section 3.5
(Capitalization and Ownership of the Joint Venture), Section 3.6(c) (Financial
Statements) (as regards Liabilities), Section 3.8 (Title to Purchased Assets;
Sufficiency of Purchased Assets), Section 3.12 (Tax Matters), Section 3.14
(Environmental Matters), Section 3.17 (Compliance with Laws) (solely with
respect to representations and warranties regarding Antitrust Laws,
Anti-Corruption Laws and compliance with Governmental Authorizations, and not
all Laws), and Section 3.23 (Insolvency), the aggregate total amount in respect
of which Seller (including its Affiliates) may be liable under this Agreement to
the Purchaser Indemnified Parties will not exceed the Cash Consideration
actually paid by Purchaser to Seller under this Agreement. The limitations in
this Section 8.5(a) shall not apply to acts of willful misconduct or fraud or
for indemnification pursuant to Section 8.1(b), (c) or (d).
(b)    Tax Benefits, Insurance Proceeds and Other Payments. The amount of any
and all Losses for which indemnification is provided pursuant to this Article 8
will be net of any Tax Benefit to which an Indemnified Party is entitled by
reason of payment of such Loss and any amounts of any insurance proceeds,
indemnification payments, contribution payments or reimbursements or payments in
kind, actually received (or in the case of a Tax Benefit, actually realized) by
the Indemnified Party with respect to such Losses; provided that with respect to
Purchaser, after such amounts have been applied towards satisfying the
Deductible (subject to the limitations in Section 8.7). In connection therewith,
if, at any time following payment in full by the Indemnifying Party of the
Losses due under this Agreement, the Indemnified Party receives any Tax Benefit,
insurance proceeds, indemnification payments, contribution payments or
reimbursements with respect to such Losses which have not been taken into
account in determining the liability of the Indemnifying Party, the Indemnified
Party will promptly remit to the Indemnifying Party the value of such Tax
Benefit or such proceeds, payments or reimbursements in an amount not to exceed
the amount of the corresponding indemnification payment made by the Indemnifying
Party; provided, however, that Purchaser may retain any Tax benefit, insurance
proceeds, indemnification payments, contribution payments or reimbursements up
to the amount of the Deductible for which indemnification is not provided under
Section 8.1 (subject to the limitations in Section 8.7), after which Purchaser
shall remit such proceeds to the applicable Seller Indemnified Party in
accordance with this Section 8.5(b). Each Party will use (and will cause its
Affiliates to use) commercially reasonable best efforts to realize any
applicable Tax Benefit;

52
428928/HOUDMS 

--------------------------------------------------------------------------------

 

provided always that (i) such Party shall not be required to make any change to
how the Business operates or to change the way in which it manages its Tax
affairs in order to claim such a Tax Benefit; and (ii) the Indemnified Party
shall have no obligation to provide to any Seller or its Affiliates or any
Purchaser or its Affiliates, as the case may be, any Tax Returns in connection
with the determination of such Tax Benefit.
(c)    Mitigation. The Indemnified Party will use its commercially reasonable
best efforts to mitigate any Losses with respect to which it may be entitled to
seek indemnification pursuant to this Agreement.
(d)    Subrogation. If Purchaser or any Purchaser Indemnified Party is
indemnified for any Losses pursuant to this Agreement with respect to any claim
by a Person not party to this Agreement, then once the Purchaser Indemnified
Parties have been indemnified and have recovered Losses for which
indemnification is not provided under Article 8, Seller will be subrogated to
all rights and remedies of Purchaser or the Purchaser Indemnified Party against
such Third Party, and Purchaser will, and will cause each of the Purchaser
Indemnified Parties to, cooperate with and assist Seller in asserting all such
rights and remedies against such Third Party. If Seller or any Seller
Indemnified Party is indemnified for any Losses pursuant to this Agreement with
respect to any Third Party Claim, then to the extent legally possible Purchaser
will be subrogated to all rights and remedies of Seller or the Seller
Indemnified Party against such Third Party Claim, and Seller will, and will
cause each of the Seller Indemnified Parties to, cooperate with and assist
Purchaser in asserting all such rights and remedies with respect to such Third
Party Claim.
(e)    Tax Attributes. Seller will not be required to indemnify any Purchaser
Indemnified Party (i) for reductions in any Tax Attributes, or (ii) against
Losses for Retained Taxes to the extent such Loss could be reduced under
applicable Law by reason of available Tax Attributes arising in a Pre-Closing
Period (assuming for the purposes of this sentence that such attributes have not
been used to reduce Taxes in the Post-Closing Period).
Section 8.6    Exclusive Remedy. Except as otherwise provided for in Section
5.5(b), 5.14, and 11.13, from the date of the Initial Closing with respect to
the subject matter subject to such Initial Closing and, if there is a Subsequent
Closing, from the date of the Subsequent Closing with respect to the subject
matter of such Subsequent Closing, the sole and exclusive remedy of a Party and
any of its applicable Affiliates for any matter arising out of, in connection
with or in relation to this Agreement or the Contemplated Transactions will be
pursuant to the indemnification obligations set forth in Article 8 and, except
to the extent the Party has asserted a claim for indemnification by giving a
Claim Notice in accordance with Section 8.3 prior to the expiration of the
applicable survival period set forth in Section 8.4, the Party and its
Affiliates will have no remedy against the other Party or any of its Affiliates
for any breach of any provision of this Agreement or any Ancillary Agreement.
For the avoidance of doubt, if the Initial Closing occurs, remedies following
such Initial Closing with respect to the subject matter of the Initial Closing
shall be limited as set forth above to this Article 8, but prior to any
Subsequent Closing each Party shall have the limited right to terminate this
Agreement pursuant to Article 7, but only as to the subject matter applicable to
such Subsequent Closing and not anything related to the Initial Closing. For the
avoidance of doubt, following each applicable Closing, Purchaser and its
Designated Affiliates shall be responsible for the operation or conduct of the
Business, the Purchased Assets and the Assumed Liabilities related to that
Closing and Seller will be solely responsible for Excluded Liabilities.

53
428928/HOUDMS 

--------------------------------------------------------------------------------

 

Section 8.7    No Duplication. Notwithstanding anything in this Agreement to the
contrary, in no event shall any Indemnified Party be entitled to recover any
Losses to which such Indemnified Party has already recovered the full amount of
such Losses pursuant to another Section or provision of this Agreement or any
Transaction Document, or otherwise, and any Liability for indemnification under
this Agreement shall be determined without duplication of recovery by reason of
the state of facts giving rise to such Liability constituting a breach of more
than one representation, warranty, covenant or agreement.
Section 8.8    Adjustment to Purchase Price. Any payment under Article 2 or this
Article 8 shall be treated as an adjustment to the Purchase Price for all Tax
purposes unless otherwise required by applicable Law but for the avoidance of
doubt shall not be an adjustment to the Purchase Price for the purposes of
determining any limitation pursuant to Section 8.5(a).
Section 8.9    Employees. It shall not be a defense to any claim brought by any
Purchaser Indemnified Party for indemnification against Seller pursuant to this
Article 8 that any Employee knew of any information relating to the
circumstances giving rise to such claim; provided that nothing in this Agreement
shall limit, waive or otherwise affect the right of Seller, on behalf of itself
and its Affiliates, to seek any and all remedies available to it under
applicable Law, Contract or otherwise against any of the Employees on whom they
may have relied in connection with this Agreement, the Transaction Documents and
the Seller Disclosure Schedule.

Article 9
TAX MATTERS
Section 9.1    Tax Returns and Covenants. Except as provided in Section 9.4:
(a)    Seller shall prepare or cause to be prepared and file or cause to be
filed, within the time (taking into account any extensions) and manner provided
by Law, all Tax Returns of PD Cyprus and the Joint Venture and with respect to
the other Purchased Assets, if any, that are required to be filed on or before
the applicable Closing Date and shall pay any Tax due thereon. All Tax Returns
prepared and filed pursuant to this Section 9.1(a) shall be prepared and filed
in accordance with applicable Law and in a manner consistent with past practices
of PD Cyprus and the Joint Venture and the applicable Selling Entity in the case
of the other Purchased Assets (in each case to the extent consistent with
applicable Law).
(b)    Purchaser shall prepare or cause to be prepared and file or cause to be
filed, within the time (taking into account any extensions) and manner provided
by Law, all Tax Returns of PD Cyprus and the Joint Venture and with respect to
the other Purchased Assets, if any, that are required to be filed after the
applicable Closing Date. All Tax Returns prepared and filed pursuant to this
Section 9.1(b) shall be prepared and filed in accordance with applicable Law and
in a manner consistent with past practices of PD Cyprus and the Joint Venture
and with respect to the other Purchased Assets (in each case to the extent
consistent with applicable Law).
(c)    If Seller may be liable under this Agreement for any portion of the Tax
payable in connection with any Tax Return required to be filed by Purchaser,
Purchaser shall provide Seller with drafts of such Tax Returns no later than 30
days prior to the earlier of the due date or filing date thereof. Seller shall
have the right to review and provide comments on any such Tax Returns during the
15 day period following the receipt of such Tax Returns. Seller and Purchaser
shall consult with each other and attempt in good faith to resolve any issues
arising as a result of such Tax Returns and, if they are unable to do so, the
disputed items shall be resolved (within a reasonable time, taking into account
the deadline for filing such Tax Return) by an independent nationally

54
428928/HOUDMS 

--------------------------------------------------------------------------------

 

recognized accounting firm acceptable to Purchaser and Seller. Upon resolution
of all such items, the relevant Tax Return shall be timely filed on that basis,
provided that if after using commercially reasonable best efforts, the Parties
are unable to resolve the matter in dispute before any Tax Return that is the
subject of a disagreement is due, such Tax Return may be filed as prepared (or
caused to be prepared) by Purchaser, subject to adjustment or amendment upon
resolution, and the making of any payments necessary to give effect to the
resolution. The costs and expenses relating to the dispute resolution shall be
borne 50% by Seller and 50% by Purchaser. In the event Seller is liable under
this Agreement for any Taxes with respect to a Tax Return filed pursuant to this
Section 9.1(c), Seller shall pay Purchaser the amount of such Taxes no later
than 30 days following the resolution of the final amount of such Taxes in
accordance with this Section 9.1(c).
Section 9.2    Allocation of Taxes. For purposes of this Agreement, in the case
of any Taxes that are payable for a Straddle Period, the portion of such Taxes
that relate to the Pre-Closing Period (a) in the case of any property, ad
valorem, or similar Taxes, shall be deemed to be the amount of such Tax for the
entire Tax period multiplied by a fraction, the numerator of which is the number
of days in the Tax period ending on (and including) the applicable Closing Date
and the denominator of which is the number of days in the entire Tax period, and
(b) in the case of all other Taxes, shall be deemed equal to the amount which
would be payable as computed on a “closing-of-the-books” basis if the relevant
Tax period ended at the close of business on the applicable Closing Date.
Whenever it is necessary to determine for any taxable period the amount of
Taxes, or portions thereof, resulting from a change in applicable Law occurring
after the applicable Closing Date, such amount shall equal the amount by which
the Taxes imposed for such taxable period determined taking into account such
change in applicable Law exceed the Taxes that would have been imposed for such
taxable period absent such change in applicable Law.
Section 9.3    Tax Contests.
(a)    Purchaser, on the one hand, and Seller, on the other hand (the
“Recipient”), shall notify Seller or Purchaser, as the case may be, in writing
within 30 days of receipt by the Recipient of written notice of any Tax Contest
which may affect the liability for Taxes of such other party under this
Agreement.
(b)    If the Tax Contest relates (i) to any Pre-Closing Period or Straddle
Period, or (ii) to any Retained Taxes, Seller shall, at its expense, control the
defense and settlement of such Tax Contest and shall pay any Tax which arises
from such Pre-Closing Period Tax Contest and Seller’s portion of any Tax which
arises from such Straddle Period Tax Contest, and Purchaser shall pay
Purchaser’s portion of any Tax which arises from such Straddle Period Tax
Contest; provided that Seller may decline to participate in such Pre-Closing
Period or Straddle Period Tax Contest, in which case Purchaser shall control the
defense and settlement of the Tax Contest without prejudice to Seller’s
obligation to pay any Tax that may arise from such Tax Contest and Seller shall
reimburse Purchaser for the related expense that it has incurred.
(c)    If the Tax Contest relates solely to Other Taxes, Purchaser shall, at its
expense, control the defense and settlement of such Tax Contest.
(d)    The Party in control of the defense or settlement of any Tax Contest with
respect to which the other Party may have liability under this Agreement shall
keep the other Party informed of the progress of such Tax Contest, provide
copies of all relevant correspondence and other Tax Contest documents to the
other Party, and allow them to participate at their own expense. The Party in
control of the defense or settlement of a Tax Contest may not settle such Tax
Contest in any manner which would adversely affect the other Party without the
written consent of such other Party (which shall not be unreasonably withheld or
delayed and shall in any event be deemed to be given if no response is received
within seven Business Days of a Party’s request).

55
428928/HOUDMS 

--------------------------------------------------------------------------------

 

Section 9.4    Transfer Taxes. Except as otherwise provided for in this
Agreement or any other Transaction Document, all Transfer Taxes shall be borne
fully by Purchaser. Notwithstanding Section 9.1, which shall not apply to Tax
Returns relating to Transfer Taxes, any Tax 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 best
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 Selling Entity is required to file a Tax Return relating to Transfer
Taxes, Purchaser shall pay to such Selling Entity the Transfer Taxes due on such
Tax Return no later than five days after Seller has provided a copy of such Tax
Return to Purchaser (unless Purchaser is not liable for such Transfer Taxes
under the terms of this Agreement or any Transaction Document). For the
avoidance of doubt, any Transfer Taxes resulting from a Purchased Asset that is
mistakenly transferred to Purchaser shall be borne by Seller and Seller shall
promptly reimburse Purchaser for any such Transfer Taxes.
Section 9.5    Purchaser’s Claiming, Receiving or Using of Refunds, Overpayments
and Prepayments. If, after the applicable Closing, Purchaser or any of its
Affiliates (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 sales, use, value-added or similar Tax asset
or credit) that, in each case of provisions (a) and (b) above, (x) relates to
Taxes for which Seller is liable or paid by Seller or any of its Affiliates with
respect to the Pre-Closing Period, or (y) is the subject of indemnification paid
in full (or offset) by Seller under this Agreement, Purchaser shall transfer, or
cause to be transferred, to Seller the entire amount of the refund or
overpayment (including interest) received or utilized by Purchaser or any of its
Affiliates within 30 days after the refund or overpayment is received or
utilized. For purposes of the immediately preceding sentence, a prepayment on or
before the applicable Closing Date of Taxes for which Purchaser is liable and
which Purchaser has expressly approved in writing shall be treated in the same
manner as an overpayment of Taxes for which Seller is liable. Purchaser agrees
to notify Seller 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. Purchaser agrees to claim any such refund as soon as
possible and to furnish to Seller all information, records and assistance
necessary to verify the amount of the refund or overpayment.
Section 9.6    Post-Closing Actions That Affect Liability for Taxes. Neither
Purchaser nor its Affiliates shall take any action (including amending any Tax
Return or engaging in any non- Ordinary Course transactions) on or after the
applicable Closing Date that could reasonably be expected to increase Seller’s
(or Seller’s Affiliates’) liability for Taxes (including any liability of Seller
to indemnify Purchaser for Taxes under this Agreement), without the prior
written consent of Seller except to the extent required under applicable Law.
Neither Seller nor its Affiliates shall take any action (including amending any
Tax Return or engaging in any non‑Ordinary Course transactions) on or after the
applicable Closing Date that could reasonably be expected to increase
Purchaser’s (Purchaser’s Affiliates’ or PD Cyprus or the Joint Venture’s)
liability for Taxes (including any liability of Purchaser to indemnify Seller
for Taxes under this Agreement), without the prior written consent of Purchaser
except to the extent required under applicable Law.
Section 9.7    Assistance and Cooperation. The Parties agree that, after the
Initial Closing Date:
(a)    each Party shall use commercially reasonable best efforts to 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;

56
428928/HOUDMS 

--------------------------------------------------------------------------------

 

(b)    the Parties shall cooperate fully (and cause their Affiliates to
cooperate fully) in preparing for any Tax Contests, or disputes with taxing
authorities, relating to any Tax Returns or Taxes relating to the Purchased
Assets, including providing access to relevant books and records relating to
Taxes at issue;
(c)    the Parties shall make available (and cause their Affiliates to make
available) to each other and to any taxing authority as reasonably requested by
the other Party all relevant books and records relating to Taxes;
(d)    each Party shall promptly furnish the other Party with copies of all
relevant correspondence received by such Party or its Affiliates from any taxing
authority in connection with any Taxes for which such other Party may have an
indemnification obligation under this Agreement; and
(e)    To the extent these have been delivered to the possession, custody or
control of Purchaser, Purchaser shall retain (and shall cause its Affiliates to
retain) all Tax Returns and books and records with respect to Taxes relating to
any taxable period beginning on or before the applicable Closing Date until the
expiration of the applicable statute of limitations of the relevant taxable
period.
Section 9.8    Tax Elections. With respect to PD Cyprus and the Joint Venture,
Purchaser shall not (a) cause an election pursuant to Treasury Regulation
Section 301.7701-3 to be filed effective from a date on or prior to the
applicable Closing Date or (b) make or change any other election with respect to
Taxes that would give rise to a Seller Tax indemnity obligation under Section
8.1 or reduce any Tax Attribute of Seller or any of its Affiliates with respect
to any Pre-Closing Period.

Article 10
EMPLOYEE MATTERS

Section 10.1    Employees.
(a)    Prior to any Closing, Seller shall provide to Purchaser an updated
Section 3.13(a) of the Seller Disclosure Schedule.
(b)    To the extent required by applicable Law only, each of the Selling
Entities and Purchaser agrees to consult with the Employees or their
representatives on or prior to the applicable Closing in respect of any
continued employment by the Joint Venture, or employment by Purchaser or its
Designated Affiliates, on or after the applicable Closing. Each of the
applicable Selling Entities and Purchaser further agrees to assume, or to cause
the appropriate Affiliate to assume, all Liabilities (if any) relating to their
respective obligations to consult with the Employees under applicable Law or
Contract.
(c)    No later than 90 days prior to any Closing, Purchaser shall make an offer
of employment to those Employees listed in Section 10.1(c) of the Purchaser
Disclosure Schedule relevant to that Closing other than those employed by the
Joint Venture. Employment under such offers will be conditional upon the
relevant Closing taking place and will become effective on the applicable
Closing Date. Purchaser shall be required to provide an updated Section 10.1(c)
of the Purchaser Disclosure Schedule within 45 days of the Effective Date.
(d)    With effect from each applicable Closing Date, and except as expressly
set forth in Section 5.16 and Section 10.1(f), (i) Purchaser shall employ, or
shall cause each Designated Affiliate or the Joint Venture to

57
428928/HOUDMS 

--------------------------------------------------------------------------------

 

employ or continue to employ, as applicable, each Transferring Employee and
(ii) Seller shall cause itself or its Affiliates to cease to employ, as
applicable, each Transferring Employee. Such employment by Purchaser or its
Designated Affiliates will be or continue to be on terms and conditions,
including pay, position, responsibility and benefits (including eligibility for
holidays, sick days and vacation), that are the same as or substantially
equivalent to the terms and conditions provided to such Transferring Employee
immediately prior to the applicable Closing Date, or such better terms required
by applicable Law provided always that Purchaser or its Designated Affiliates
shall not be required to recognize all service accrued by each Transferring
Employee whilst employed by Seller or any of its Affiliates (other than for
those Transferring Employees which continue to be employed by the Joint
Venture), nor shall it be required to offer any profit sharing, stock bonus,
stock option, stock purchase, phantom or stock equivalent type bonus (except to
the extent required by applicable Law). If the employment of a Transferring
Employee (not employed by the Joint Venture) by Purchaser or its Designated
Affiliates is terminated within 12 months of the applicable Closing other than
for cause, then Purchaser shall indemnify Seller for any severance costs (e.g.,
payments in lieu of notice, end of service payments, and any other termination
indemnities) incurred by Seller in respect of such Transferring Employee as a
result of the termination by Purchaser or such Designated Affiliate. For the
avoidance of doubt Purchaser shall not be liable to Seller for any end of
service payments or other severance costs payable by Seller to any Employee who
does not become a Transferring Employee as of the applicable Closing Date, or to
any Transferring Employee where the end of service payments or other severance
costs relate to the termination of employment of such Transferring Employee by
Seller or its Affiliates prior to the Closing Date in connection with the
Contemplated Transactions.
(e)    Purchaser and its Affiliates shall be responsible for all Liabilities
relating to the employment of the Transferring Employees (not employed by the
Joint Venture), incurred on or following and which relate to the period after
the applicable Closing provided always that this shall be without prejudice to
any claim that Purchaser may have for the breach of any representation, warranty
or covenant in this Agreement. For the avoidance of doubt, the Joint Venture
shall be responsible for all Liabilities relating to the employment of the
Transferring Employees of the Joint Venture incurred before, on or following the
applicable Closing provided always that this shall be without prejudice to any
claim that Purchaser may have for the breach of any representation, warranty or
covenant in this Agreement. Seller and its Affiliates shall be responsible for
any Losses or Liabilities arising from or in connection with any Employee who
does not become a Transferring Employee (whether because such Employee is not in
the list of Employees attached as Section 10.1(c) of the Purchaser Disclosure
Schedule hereto or is in such list but does not accept the offer made) and for
the termination of employment by Seller or its Affiliates of any Transferring
Employee. Seller shall also procure that (i) the Joint Venture shall terminate
the employment of those of its Employees which are not in the list of Employees
as set forth in Section 10.1(c) of the Purchaser Disclosure Schedule prior to
the Closing in respect of the Kuwait Assets; (ii) any other employment contract
held by an Employee of the Joint Venture with Seller or its Affiliates is
terminated with effect from the Closing in respect of the Kuwait Assets; and
(iii) no one that is not in the list of Employees attached as Section 10.1(c) of
the Purchaser Disclosure Schedule shall have their employment (or any
Liabilities connected to their employment prior to the applicable Closing)
automatically transferred to Purchaser, its Designated Affiliates or the Joint
Venture as a result of any Closing; with in each case Seller being responsible
for any Losses or Liabilities incurred by Purchaser, its Designated Affiliates
or the Joint Venture as a result of any such occurrence.
(f)    Notwithstanding Section 10.1(d) and pursuant to Section 5.16, for a
period of two years from the applicable Closing of the Business of the Joint
Venture, Purchaser shall not (without the prior consent of KOC): (a) reduce the
headcount of the Transferring Employees employed by the Joint Venture by more
than 5%, based on the headcount as of the applicable Closing; or (b) decrease
the compensation and benefits (including without limitation salaries, bonuses,
commissions, other incentive compensation, and benefits under any Sponsored
Plans) to the Transferring Employees of the Joint Venture (collectively) by more
than 5% in the

58
428928/HOUDMS 

--------------------------------------------------------------------------------

 

aggregate (whether as part of an annual pay review or otherwise), based on the
compensation and benefits in place as of the applicable Closing; unless in each
case the number of Transferring Employees required to be employed by the Joint
Venture is reduced because of any sale, stacking or other suspension of
operation of the Rigs forming part of the Kuwait Assets or because of a need to
meet the requirements of KOC or applicable Law.
(g)    Seller acknowledges that Purchaser has entered into this Agreement on the
basis that the accrued contingent liability of the Joint Venture for end of
service payments in respect of the Employees of the Joint Venture as at the
Closing Date in respect of the Kuwait Assets shall not exceed $7,000,000 and to
the extent the actual liability of the Joint Venture for end of service payments
as required by Law to such Employees (in respect of the period up to such date)
exceeds this amount, Seller shall indemnify Purchaser and the Joint Venture for
the Losses suffered or incurred as a result of such liability. For the avoidance
of doubt, Seller shall not be liable for any discretionary or ex gratia amounts
paid to Employees by Purchaser or the Joint Venture on termination.
(h)    All Contracts with any Independent Contractors listed on Seller
Disclosure Schedule 3.12(a)(ii) who are not employees of Team Source in Algeria
shall be terminated by Seller, its Affiliates or the Joint Venture, as
applicable, prior to the applicable Closing Date, and such Independent
Contractors who provide services to the Joint Venture in Kuwait shall be offered
a new consulting agreement with Purchaser or its Affiliates on the applicable
Closing Date. For the avoidance of doubt, all amounts due and owing to such
Independent Contractors as of the applicable Closing Date shall be paid by
Seller, its Affiliates or the Joint Venture, and Seller, its Affiliates or the
Joint Venture, as applicable, shall indemnify Purchaser for any Liabilities
arising in relation to these Independent Contractors that accrue prior to the
applicable Closing Date.
(i)    This Section 10.1 shall not apply to any Independent Contractors employed
by Team Source in Algeria on the basis that it has been agreed that Liabilities
in relation to the period after the Closing in respect of the Algeria Assets
under the contract with Team Source shall be transferred to Purchaser or one of
its Designated Affiliates pursuant to an agreement between the Parties and Team
Source and that Seller shall procure Team Source’s consent to such an agreement
in accordance to the terms of the agreement between Seller and Team Source.

Section 10.2    Benefit Plans.
(a)    Commencing at 12:00 a.m. Houston, Texas time on the calendar day
immediately following any Closing Date and continuing for a period of at least
12 months thereafter (or such longer period as required by applicable Law),
Purchaser shall (i) continue (or cause its applicable Affiliate to continue) to
sponsor and maintain each Sponsored Plan on substantially the same terms as in
effect immediately prior to the applicable Closing, and/or (ii) cover the
Transferring Employees (and, to the extent appropriate, their dependents and
other beneficiaries) under its existing employee benefit or fringe benefit
plans, funds or programs; or (iii) provide any combination of clauses (i) and
(ii) above, whichever approach provides the Transferring Employees with benefits
that, in the aggregate, are substantially the same as the benefits provided to
the Transferring Employee immediately prior to the applicable Closing Date
(provided that Purchaser or its Designated Affiliates shall not be required to
recognize all service accrued by each Transferring Employee whilst employed by
Seller or any of its Affiliates (other than for those Transferring Employees
which continue to be employed by the Joint Venture) nor shall it be required to
offer any profit sharing, stock bonus, stock option, stock purchase, phantom or
stock equivalent type bonus, except in each case to the extent required by
applicable Law), and in any event, as required by applicable Law. The Parties
agree that nothing in this Section 10.2(a) modifies Section 5.16 and Section
10.1(f)

59
428928/HOUDMS 

--------------------------------------------------------------------------------

 

(b)    Notwithstanding any other provision in this Agreement to the contrary,
except as otherwise provided under any Transition Services Agreement between the
Parties, as of the applicable Closing Date, no Transferring Employee (or his or
her beneficiary or dependent) shall accrue additional benefits under, remain
covered by, or participate in any Seller Plan or any other employee benefits
plan, program or arrangement sponsored, maintained or established by Seller or
its Affiliates that are not Sponsored Plans.
(c)    Notwithstanding any provision of this Agreement, nothing contained in
this Agreement, express or implied, is intended to or shall be construed to
amend, modify or terminate any Seller Plan or to affect Seller’s, Purchaser’s or
each of their Affiliate’s ability to amend, modify or terminate any Seller Plan.
The provisions of this Agreement, in particular this Article 10, are for the
sole benefit of the Parties hereto and their respective Affiliates and are not
for the benefit of any Third Party.

Article 11
GENERAL PROVISIONS

Section 11.1    Notices. All notices and other communications under this
Agreement must be in writing and are deemed duly delivered when (a) delivered,
if delivered personally or by internationally recognized overnight courier
service (costs prepaid), (b) sent by e-mail with confirmation of transmission by
the transmitting equipment (or, the first Business Day following such
transmission if the date of transmission is not a Business Day) or (c) received
or rejected by the addressee, if sent by international certified or registered
mail, return receipt requested; in each case to the following addresses or
e-mail addresses and marked to the attention of the individual (by name or
title) designated below (or to such other address, e-mail address or individual
as a Party may designate by notice to the other Party):
If to Seller or Seller Parent:
Weatherford Worldwide Holdings GmbH
c/o Weatherford International plc
2000 St. James Place
Houston, Texas 77056
Telephone: (713) 836-4000
E-mail: legal.m&a@weatherford.com
Attention: General Counsel
with a copy (which will not constitute notice) to:
Baker & McKenzie LLP
700 Louisiana Street, Suite 3000
Houston, Texas 77002
United States of America
Telephone: (713) 427-5018
E-mail: jonathan.newton@bakermckenzie.com
Attention: Jonathan B. Newton
If to Purchaser:
ADES International Holding Ltd.
Unit 517, Floor 5, Index Tower
DIFC, Dubai, UAE – PO Box: 507118
Telephone: +971 4 335 0255

60
428928/HOUDMS 

--------------------------------------------------------------------------------

 

E-mail:     mohamed.farouk@adesgroup.com
Attention: Dr. Mohamed Farouk
and to:
ADES International Holding Ltd.
Unit 517, Floor 5, Index Tower
DIFC, Dubai, UAE - PO Box: 507118
Telephone: +971 4 335 0255
E-mail:     morcos.william@adesgroup.com
Attention: Morcos William
with a copy (which will not constitute notice) to:
Hill Dickinson LLP
The Broadgate Tower, 20 Primrose Street, London EC2A 2EW
Telephone: +44 207 280 9137
E-mail: roderick.palmer@hilldickinson.com
Attention: Roderick Palmer

Section 11.2    Amendment. This Agreement can only be amended, modified or
supplemented at any time by the Parties, through an instrument identifying
itself as an amendment to this Agreement and signed by all Parties.

Section 11.3    Waiver and Remedies. Either Party may (a) extend the time for
performance of any of the obligations or other acts of the other Party, (b)
waive any breaches or inaccuracies in the representations and warranties of the
other Party contained in this Agreement or (c) waive compliance with any of the
covenants or conditions for the benefit of such Party, subject to the following:
(i) any such extension or waiver by a Party will be valid only if set forth in a
written document signed on behalf of the Party against whom the extension or
waiver is to be effective; (ii) no extension or waiver will apply to any time
for performance, breach, or inaccuracy in any representation or warranty, or
noncompliance with or non-fulfillment of any covenant or condition, as the case
may be, other than that which is specified in the written extension or waiver;
and (iii) no failure or delay by a Party in exercising any right or remedy under
this Agreement or any of the documents delivered pursuant to this Agreement, and
no course of dealing between the Parties, operates as a waiver of such right or
remedy, and no single or partial exercise of any such right or remedy precludes
any other or further exercise of such right or remedy or the exercise of any
other right or remedy. Except as provided in Section 8.6, any enumeration of a
Party’s rights and remedies in this Agreement is not intended to be exclusive,
and a Party’s rights and remedies are intended to be cumulative to the extent
permitted by Law and include any rights and remedies authorized in law or in
equity.

Section 11.4    Entire Agreement. This Agreement (including the Schedules and
Exhibits hereto) and other Transaction Documents constitute the entire agreement
between the Parties and supersedes any prior understandings, agreements or
representations by or between the Parties, or either of them, written or oral,
with respect to the subject matter of this Agreement. In the event of any
conflict between this Agreement and any other Transaction Document, the
provisions of this Agreement shall control.

Section 11.5    Assignment, Successors and No Third Party Rights. This Agreement
binds and benefits the Parties and their respective successors and assigns.
Seller may assign its rights under this Agreement or the Transaction Documents
to an Affiliate. On or following the Initial Closing, Purchaser and/or

61
428928/HOUDMS 

--------------------------------------------------------------------------------

 

its Designated Affiliates may assign its rights under this Agreement and any
Transaction Document as security to any Person providing finance to Purchaser or
its Designated Affiliates in connection with the Contemplated Transactions
without the consent of Seller or its Affiliates but not otherwise assign any
rights under this Agreement or the Transaction Documents, whether by operation
of Law or otherwise, without the prior written consent of Seller. No Party may
delegate any performance of its obligations under this Agreement or the
Transaction Documents, except that either Party may at any time delegate the
performance of its obligations (other than the obligation to pay the Purchase
Price) to an Affiliate so long as such Party and its designee remains fully
responsible for the performance of the delegated obligation. Subject to Section
5.8 and Section 5.16, nothing expressed or referred to in this Agreement will be
construed to give any Person, other than the Parties, any legal or equitable
right, remedy or claim under or with respect to this Agreement or any provision
of this Agreement except such rights as may inure to a successor or permitted
assignee under this Section 11.5.
Section 11.6    Severability. If any term or provision of this Agreement is held
to be void, invalid, illegal or unenforceable in any situation or jurisdiction,
the remaining provisions of this Agreement shall remain in full force and
effect, so long as the essential terms and conditions of this Agreement for each
Party remain valid, binding and enforceable.
Section 11.7    Exhibits and Schedules. The Exhibits and Schedules to this
Agreement are incorporated herein by reference and made a part of this
Agreement. The Seller Disclosure Schedule and the Purchaser Disclosure Schedule
are arranged in sections and paragraphs corresponding to the numbered and
lettered sections and paragraphs of Article 3 and Article 4, respectively, and
the other applicable sections of this Agreement. Any disclosure will only be
effective to qualify the representations and warranties in Article 3 and Article
4 if it is of sufficient accuracy and detail to enable a reasonably diligent
purchaser to identify the matter disclosed and make a reasonable assessment
thereof. The disclosure in any section or paragraph of the Seller Disclosure
Schedule or the Purchaser Disclosure Schedule, and those in any amendment or
supplement thereto, will be deemed to be disclosed for each other provision of
Article 3 or Article 4, respectively, or the other applicable sections of this
Agreement to the extent that it is reasonably evident from the content of such
disclosure that it is applicable to such other provision of Article 3 or Article
4, respectively, or the other applicable sections of this Agreement.
Section 11.8    Interpretation. Both Seller and Purchaser are sophisticated
parties and each Party has received advice from its own attorney in the
negotiation of this Agreement. The language used in this Agreement is the
language chosen by the Parties to express their mutual intent, and no provision
of this Agreement will be interpreted for or against either Party because that
Party or its attorney drafted the provision.
Section 11.9    Expenses. Except as set forth elsewhere in this Agreement:
(a)    Seller will, and will cause each Selling Entity to pay the expenses
incurred by Seller, any Selling Entity, and, to the extent incurred prior to the
applicable Closing, the Joint Venture, in connection with the preparation and
the negotiation of this Agreement and the consummation of the Contemplated
Transactions, including all fees and expenses of its agents, advisors and
representatives and the costs related to the provision of information.
(b)    Purchaser will, and will cause each of its Designated Affiliates to, pay
its own expenses incurred by Purchaser and/or the Designated Affiliates in
connection with the preparation and the negotiation of this Agreement and the
consummation of the Contemplated Transactions, including all fees and expenses
of its agents, advisors and representatives and the costs associated with its
diligence.

62
428928/HOUDMS 

--------------------------------------------------------------------------------

 

Section 11.10    Governing Law. The internal Laws of the State of Texas (without
giving effect to any choice or conflict of law provision or rule (whether of the
State of Texas or any other jurisdiction) that would cause the application of
Laws of any other jurisdiction) govern all matters arising out of or relating to
this Agreement, any other Transaction Document, or the Contemplated
Transactions, including its validity, interpretation, construction, performance
and enforcement and any disputes, claims or controversies arising therefrom or
related thereto. Notwithstanding the above, any Exhibit or Schedule to this
Agreement or any other Transaction Document which expressly specifies a
different choice of law, shall be governed by such choice of law indicated
therein.
Section 11.11    Disputes.
(a)    In the event of a dispute among the Parties arising out of, in connection
with or in relation to this Agreement, the Transaction Documents or the
Contemplated Transactions, the matter, on written request of any Party, shall be
referred to representatives of the Parties for decision (the “Dispute
Representatives”). The Dispute Representatives shall promptly meet in a good
faith effort to resolve the dispute.
(b)    If the Dispute Representatives do not agree upon a decision within 30
calendar days after reference of the matter to them, then all actions with
respect to any dispute arising out of, in connection with or in relation to this
Agreement, the Transaction Documents or the Contemplated Transactions, and any
Persons or matters in respect of the disputes, shall be fully and finally
settled under the Rules of Arbitration (the “Rules”) of the International
Chamber of Commerce (the “ICC”) in force as of the Effective Date, which Rules
are deemed to be incorporated by reference into this clause.  The referral of
such disputes to the ICC shall include, but is not limited to, any questions
regarding the validity, interpretation, construction, performance and
enforcement of this Agreement, any Transaction Document, or the Contemplated
Transactions, and all non-contractual obligations (if any) that may relate to
this Agreement, any Transaction Documents, or the Contemplated Transactions. 
The arbitration shall be conducted in London.  The arbitration shall be
conducted in English, and all documents and other exhibits must be submitted in
English.  The arbitration will be conducted by three arbitrators.  The Parties
agree that one arbitrator shall be appointed by each of Seller and Purchaser,
and the third presiding arbitrator shall be appointed by agreement of the two
appointed arbitrators, failing which the third arbitrator shall be appointed in
accordance with the Rules.  The Parties agree that the award of the arbitrators
shall be final and binding on the Parties, and that nothing in this Section
11.11(b) limits the right of a Party to bring Proceedings against the other
Party in any courts of competent jurisdiction to enforce an arbitration award
rendered in accordance with this Section 11.11(b). For the avoidance of doubt,
to the extent any disputes relate to, arise out of or are in conjunction with
any Transaction Document or the Contemplated Transactions, as set forth above,
such disputes shall be consolidated into one proceeding under this Section
11.11(b), in accordance with Rule 10 of the Rules. The provisions of this
Section 11.11(b) shall apply to each Transaction Document regardless of whether
such Transaction Document is executed and delivered on or after the Initial
Closing Date.

Section 11.12    Limitation on Liability. THE PARTIES ACKNOWLEDGE AND AGREE THAT
ANY LOSSES UNDER THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS SHALL BE
LIMITED TO DIRECT AND ACTUAL LOSSES, AND IN NO EVENT WILL ANY PARTY OR ANY OF
ITS AFFILIATES BE LIABLE FOR OR LIABLE TO ANY OTHER PERSON FOR ANY LOSSES THAT
ARE UNKNOWN, UNACCRUED, UNLIQUIDATED, NOT YET DUE, SPECULATIVE, UNASSERTED OR
UNQUANTIFIED, OR ANY SPECIAL, INCIDENTAL, INDIRECT, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES, INCLUDING LOST BUSINESS OPPORTUNITY OR DAMAGE TO BUSINESS
REPUTATION, IN CONNECTION WITH (WITHOUT LIMITATION) ANY CLAIMS OR LOSSES
PURSUANT TO THIS AGREEMENT, REGARDLESS OF

63
428928/HOUDMS 

--------------------------------------------------------------------------------

 

WHETHER OR NOT THE NONPERFORMING PARTY WAS ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES; PROVIDED, HOWEVER, THAT THE FOREGOING SHALL NOT LIMIT PURCHASER’S RIGHT
TO RECOVER LOSSES THAT CONSTITUTE LOST PROFITS UNDER THE DRILLING CONTRACTS
INCLUDED IN THE PURCHASED ASSETS OR TO WHICH THE JOINT VENTURE IS A PARTY,
SOLELY TO THE EXTENT SUCH LOSSES ARE (I) NOT BASED ON ANY SPECIAL CIRCUMSTANCES
OF PURCHASER OR ITS AFFILIATES, (II) THE NATURAL, PROBABLE AND REASONABLY
FORESEEABLE RESULT OF THE EVENT THAT GAVE RISE THERETO OR THE MATTER FOR WHICH
INDEMNIFICATION FOR LOSSES IS SOUGHT HEREUNDER, (III) DIRECTLY AND ACTUALLY
SUFFERED OR INCURRED BY PURCHASER, ITS DESIGNATED AFFILIATES OR THE JOINT
VENTURE UNDER SUCH DRILLING CONTRACTS AND (IV) CALCULATED AS AN AMOUNT
CORRESPONDING, DOLLAR-FOR-DOLLAR, TO THE ACTUAL AMOUNT OF LOST PROFITS UNDER
SUCH DRILLING CONTRACTS, NOT A MULTIPLE OF SUCH LOST PROFITS, AND ON THE BASIS
THAT THE PROFIT MARGIN UNDER SUCH DRILLING CONTRACTS CANNOT EXCEED 10%. THE
FOREGOING LIMITATIONS SHALL NOT APPLY TO THE EXTENT ANY LOSSES ARE COMPONENTS OF
DAMAGES PAID TO A THIRD PARTY IN A THIRD PARTY CLAIM PURSUANT TO Article 8 FOR
WHICH THE INDEMNIFIED PARTY IS ENTITLED TO INDEMNIFICATION HEREUNDER FOR A THIRD
PARTY CLAIM, AND SHALL NOT OTHERWISE AFFECT OR LIMIT SELLER’S RIGHT TO RECOVER
THE DEPOSIT PURSUANT TO Section 7.3(c).
Section 11.13    Specific Performance. Notwithstanding Section 11.11, the
Parties agree that irreparable damage would occur in the event that any of the
confidentiality obligations of the Parties (or any of their Affiliates),
Purchaser’s obligations set forth in Section 5.14, Seller’s obligations in
Article 5 or the Parties’ respective obligations to consummate the Contemplated
Transactions by the date determined in accordance with Section 2.7, were not
performed in accordance with their specific terms or were otherwise breached.
The Parties accordingly agree that, in addition to any other remedy to which a
Party may be entitled at law or in equity, such Party (and any of its
Affiliates) is entitled to injunctive relief to prevent breaches of such
obligations and to obtain specific performance of the provisions of this
Agreement and any other agreement related thereto. Each Party, on behalf of
itself and its Affiliates, expressly waives any applicable requirement that the
other Party or any of its Affiliates obtain any bond or provide any indemnity in
connection with any action seeking injunctive relief or specific enforcement of
the provisions of this Agreement.
Section 11.14    No Joint Venture. Nothing in this Agreement creates a joint
venture or partnership between the Parties. This Agreement does not authorize
either Party (a) to bind or commit, or to act as an agent, employee or legal
representative of, the other Party, except as may be specifically set forth in
other provisions of this Agreement, or (b) to have the power to control the
activities and operations of the other Party. The Parties are independent
contractors with respect to each other under this Agreement. Each Party agrees
not to hold itself out as having any authority or relationship contrary to this
Section 11.14.
Section 11.15    Descriptive Headings. The 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 11.16    Counterparts. This Agreement may be executed in counterparts,
each of which constitutes an original as against the Party that signed it, and
all of which together constitute one agreement. This Agreement is effective upon
delivery of one executed counterpart from each Party to the other Party.

64
428928/HOUDMS 

--------------------------------------------------------------------------------

 

The signatures of all parties need not appear on the same counterpart. The
delivery of signed counterparts by .pdf or e-mail transmission that includes a
copy of the sending Party’s signature(s) is as effective as signing and
delivering the counterpart in person.
Section 11.17    Seller Parent Guarantee. In consideration of Purchaser entering
into this Agreement, Seller Parent irrevocably and unconditionally guarantees to
Purchaser and its Designated Affiliates the due and punctual performance and
observance of the obligations (which shall include without limitation all
payment obligations and performance of all covenants, agreements and all
obligations in respect of representations, warranties and indemnities) of Seller
and each of the Selling Entities pursuant to this Agreement and any of the
Transaction Documents to which any of them are a party. It is agreed that Seller
Parent is entering into this Agreement solely for the purposes of giving the
guarantee in this Section 11.17 and the limited representations and warranties
set forth in Section 3.1, Section 3.2(a) and Section 3.3. The obligations of
Seller Parent shall not be affected by any waiver granted to the Seller or its
Affiliates, by amendment, variation or supplement to this Agreement or the
Transaction Documents or by the unenforceability or invalidity of any
obligations of the Seller or its Affiliates under this Agreement or the
Transaction Documents by reason of any disability or incapacity or lack of due
execution or due authorization (it being agreed that in such circumstances
Seller Parent shall have the same liability as if such obligations of the Seller
and its Affiliates had been valid and enforceable)The obligations of Seller
Parent under this Agreement shall be deemed satisfied and discharged, and Seller
Parent shall cease to have any obligations under this Agreement, upon all of the
obligations of Seller and each Selling Entity arising in connection with this
Agreement and any of the Transaction Documents to which any of them are a party
having been satisfied in full (save where obligations do not arise by reason of
any disability or incapacity or lack of due execution or due authorization of
the Seller or its Affiliates in which case the obligations of the Seller Parent
shall continue until it has performed the same).
(Remainder of Page Intentionally Blank. Signature page follows.)

65
428928/HOUDMS 

--------------------------------------------------------------------------------

 

The Parties have executed and delivered this Agreement as of the Effective Date.

WEATHERFORD WORLDWIDE HOLDINGS GMBH

By:     /s/ Joshua McMorrow                
Name:     Joshua McMorrow                
Title:     Managing Officer                

ADES INTERNATIONAL HOLDING LTD.

By:     /s/ Mohamed Farouk                
Name:     Mohamed Farouk
Title:     CEO

Solely for the purpose of providing the representations and warranties in
Section 3.1, Section 3.2(a) and Section 3.3 and Seller Parent guarantee set
forth in Section 11.17 of this Agreement:
WEATHERFORD INTERNATIONAL PLC

By:     /s/ Joshua McMorrow                
Name:     Joshua McMorrow                
Title:     Vice President                 

Signature page to Sale and Purchase Agreement for Algeria/Kuwait