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SUBSCRIPTION AGREEMENT
 

 

 

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CHALLENGER LIMITED
 

 

 

 
 
 

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Dated as of November 15, 2007
 
 
 
 
 
 
 
 
 
 
 

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SUBSCRIPTION AGREEMENT
 
THIS SUBSCRIPTION AGREEMENT, dated as of November 15, 2007, is entered into by
and among Challenger Limited, a company registered in the Isle of Man under
company number 55967 (the "Company"), Bronco MENA Investments LLC, a Delaware
limited liability company ("Investor"), Challenger Group Ltd., a company
registered in Bermuda under company number 38486 ("Challenger"), and those
individual shareholders of Challenger listed on the Schedule of Challenger
Shareholders attached hereto (the "Family Members").
 
RECITALS:
 
A.  The Company desires to issue and allot shares of its capital stock
("Shares") to Investor and Investor desires to subscribe for Shares from the
Company on the terms and conditions set forth herein.
 
B.  The Investor is willing to subscribe for Shares from the Company, make the
capital contributions to the Company provided herein, and otherwise perform its
covenants and agreements provided in this Agreement, subject to all of the
representations, covenants and agreements of the Company, the Family Members,
and Challenger contained herein. Each of the Company, the Family Members, and
Challenger acknowledges and affirms that it is making the representations,
covenants and agreements herein to induce the Investor to (x) execute and
deliver this Agreement and the other agreements provided for herein,
(y) subscribe for the Shares from the Company and make the capital contributions
to the Company, and (z) otherwise perform their covenants and agreements
provided in this Agreement and the other agreements provided for herein.
 
AGREEMENT:
 
NOW, THEREFORE, in consideration of the foregoing Recitals and the mutual
covenants and agreements contained herein and in the other agreements and
instruments referenced herein, the parties hereto, intending to be legally
bound, hereby agree as follows:
 
ARTICLE I  
 
DEFINITIONS, REFERENCES, AND CONSTRUCTION
 
Section 1.1.  Definitions.
 
(a)  As used in this Agreement, the following terms shall have the following
meanings:
 
"Affiliate" means any person directly or indirectly controlling, controlled by
or under common control with a person. As used in this definition, the terms
"controlling, controlled by, or under common control" mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies (whether through ownership of voting securities or any
partnership or other ownership interest, by contract, or otherwise) of a person.
 
"Agreement" means this Subscription Agreement, as hereafter amended or modified
in accordance with the terms hereof.
 
"Applicable Environmental Law(s)" means any and all laws (including common law),
statute, rule, regulation or other legal requirement, including, but not limited
to consent decrees, relating to or otherwise pertaining to health, safety, the
environment or natural resources in effect and applicable to the Company or any
operations or activities on owned or leased property, including, without
limitation Law No. 7 of 1982 and its Executive Regulations, the Libyan Maritime
Law issued on 28 November 1958, Libyan Law No. 81 of 1971, Law No. 8 of 1973,
Health Law No. 106 of 1973 and its Executive Regulations, Law No. 25 of 1976,
Law No. 3 of 1982, and Resolution of the General People's Committee No. 263 of
1999 Establishing the Environment General Authority.
 
"Applicable Law" means any statute, law, principle of common law, rule,
regulation, judgment, order, ordinance, requirement, code, writ, injunction, or
decree of any Governmental Entity.
 
"Business Day" means a day on which clearing banks are open for business in the
Isle of Man and Egypt and banking institutions are open for business in Oklahoma
City, Oklahoma.

"Closing Date" means the date of the Closing.
 
"Disclosure Letter" means the letter sent from the Company to the Investor in
relation to the representations and warranties set out in Section 3.1 having the
same date as this Agreement.
 
"Electronic Transmission" means a form of communication that (i) does not
directly involve the physical transmission of paper, (ii) creates a record that
may be retained, retrieved, and reviewed by the recipient, and (iii) may be
directly reproduced in paper form by the recipient through an automated process.
 
"FCPA" means the U.S. Foreign Corrupt Practices Act of 1977, as amended.
 
"Governing Documents" means, when used with respect to an entity, the documents
governing the formation and operation of such entity, including (i) in the
instance of a corporation, the articles of incorporation and bylaws of such
corporation, (ii) in the instance of a partnership, the partnership agreement,
(iii) in the instance of a limited liability company, the certificate of
formation and limited liability company agreement, and (iv) with respect to the
Company, the documents governing its formation and operation, including its
memorandum and articles of association.
 
"Governmental Entity" means any court or tribunal in any jurisdiction or any
governmental, quasi-governmental or regulatory body, agency, department,
commission, board, bureau or other authority or instrumentality of any country,
nation, republic, principality, protectorate, province, state or similar
authority or any political subdivision thereof.
 
"Government Official" means (i) any official or employee or agent of any
government (including, but not limited, to the government of Libya) or any
federal, regional or local department, agency, state-owned or otherwise
controlled enterprise or corporation, or other instrumentality thereof, (ii) any
official or employee or agent of a public international organization, or (iii)
any official or employee or agent of a political party or candidate for
political office.
 
"Hazardous Materials" means any substances, materials or wastes classified,
characterized or otherwise regulated under any Applicable Environmental Law as
hazardous, toxic, pollutant, contaminant, or words of similar meaning or effect,
as well as, any petroleum product, byproduct or constituent thereof.
 
"IRS" means the United States Internal Revenue Service.
 
"Knowledge" of a specified person (or similar references to a person's
knowledge) means all information actually known to (i) such person, in the case
of an individual, or (ii) in the case of a corporation or other entity, to an
executive officer or employee of such person or any Affiliate of such person who
devoted substantive attention to matters of such nature during the ordinary
course of his employment by such person.

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"Lien" means any lien, mortgage, security interest, pledge, charge, option, or
encumbrance of any kind.
 
"Management Services Agreement" means a Management Services Agreement
substantially in the form attached hereto as Exhibit A.
 
"Master Services Agreement" means a Master Services Agreement substantially in
the form attached hereto as Exhibit B.
 
"Material Adverse Effect" means a circumstance or event or set of circumstances
or events that has a material adverse effect on (i) the business, property,
operations, or financial condition of any person and its Affiliates taken as a
whole, or (ii) the ability of any person to timely perform any of its material
obligations under this Agreement or the Transaction Agreements.
 
"Permits" means licenses, permits, franchises, consents, approvals, variances,
exemptions, and other authorizations of or from Governmental Entities.
 
"person" includes an individual, an estate, a corporation, a partnership, a
limited liability company, an association, a joint stock company, a trust and
any other entity or organization, including any Governmental Entity.
 
"Policy" means the Company’s policy on ethical business practices and compliance
with all applicable anti-bribery and corruption laws and regulations, as amended
from time to time.
 
"Proceedings" means all proceedings, actions, claims, suits, investigations, and
inquiries by or before any arbitrator or Governmental Entity.
 
"Release" means, with respect to any person, any release, spill, emission,
leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching
or migration, in each case, of any Hazardous Materials into the environment or
into or out of any property owned by such person, including the movement of
Hazardous Materials through or in the air, soil, surface water, ground water or
property.
 
"Repurchase Agreement" means that certain Repurchase Agreement between the
Company, Challenger, MENA Oil Drilling Company Limited, a company registered in
the Isle of Man ("MENA"), and Venture Capital Bank B.S.C.(c), a joint stock
company incorporated in the Kingdom of Bahrain, pursuant to which the Company
has agreed to repurchase shares of the Company proportionately from such
shareholders and such shareholders have agreed to proportionately sell such
shares of the Company to the Company in exchange for aggregate cash
consideration of not more than US$5,000,000.00.
 
"Rig Assignment" means the form of Rig Assignment attached hereto as Exhibit C.
 
"Rigs" means the drilling rigs and other property relating to such drilling
rigs, each as identified on Exhibit D.
 
"Securities Act" means the United States Securities Act of 1933, as amended.
 
"Shareholders' Agreement" means a Shareholders' Agreement substantially in the
form attached hereto as Exhibit E.
 
"Solvent" means, as to any person at any time, having a state of affairs such
that all of the following conditions are met: (i) the fair value of the property
of such person is greater than the fair value of such person's liabilities
(including disputed, contingent and unliquidated liabilities); (ii) the present
fair salable value of the property of such person in an orderly liquidation of
such person is not less than the amount that will be required to pay the
probable liability of such person on its debts as they become absolute and
matured; (iii) such person is able to realize upon its property and pay its
debts and other liabilities (including disputed, contingent and unliquidated
liabilities) as they mature in the normal course of business; (iv) such person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such person's ability to pay as such debts and
liabilities mature; and (v) such person is not engaged in a business or a
transaction, and is not about to engage in a business or a transaction, for
which such person's property would constitute unreasonably small capital.
 
"Transaction Agreements" means this Agreement, the Shareholders' Agreement,
Management Services Agreement, Master Services Agreement, Rig Assignment, and
Repurchase Agreement.
 
“VCB Sale and Purchase Agreement” means that certain Sale and Purchase Agreement
dated 27 September 2007 between Venture Capital Bank B.S.C.(c) and Challenger
pursuant to which Venture Capital Bank B.S.C.(c) purchased certain shares in the
Company from Challenger.
 
(b)  In addition to the defined terms set forth in Section 1.1(a), the following
terms used in this Agreement are defined in the sections or other subdivisions
of this Agreement, as referenced below:
 

Defined Term
Reference
Audited Financial Statements
Section 3.1(n)
Basket
Section 4.2(d)
Challenger
Preamble
Closing
Section 2.4(a)
Company
Preamble
Damages
Section 4.2(a)
Family Members
Preamble
Financial Statements
Section 3.1(n)
ICC
Section 5.6
Indemnified Party
Section 4.2(c)
Indemnifying Party
Section 4.2(c)
Investment Agreement
Section 2.2(j)
Investor
Preamble
Latest Balance Sheet
Section 3.1(n)
MENA
Definition of Repurchase Agreement
Material Agreements
Section 3.1(l)
Notice of Dispute
Section 5.6
Notice Period
Section 4.2(c)
Rules
Section 5.6
Shares
Recital A
Subscription
Section 2.1
Subscribed Shares
Section 2.1
Survival Period
Section 4.1
Unaudited Financial Statements
Section 3.1(n)

 

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Section 1.1.  References and Construction.
 
(a)  All references in this Agreement to articles, sections, subsections and
other subdivisions refer to corresponding articles, sections, subsections and
other subdivisions of this Agreement unless expressly provided otherwise.
 
(b)  Titles appearing at the beginning of any of such subdivisions are for
convenience only and shall not constitute part of such subdivisions and shall be
disregarded in construing the language contained in such subdivisions.
 
(c)  The words "this Agreement", "this instrument", "herein", "hereof",
"hereby", "hereunder" and words of similar import refer to this Agreement as a
whole and not to any particular subdivision unless expressly so limited.
 
(d)  Words in the singular form shall be construed to include the plural and
vice versa, unless the context otherwise requires.
 
(e)  Examples shall not be construed to limit, expressly or by implication, the
matter they illustrate.
 
(f)  The word "or" is not exclusive and the word "includes" and its derivatives
shall mean "includes, but is not limited to" and corresponding derivative
expressions.
 
(g)  No consideration shall be given to the fact or presumption that one party
had a greater or lesser hand in drafting this Agreement.
 
(h)  All references herein to "US$" or "dollars" shall refer to U.S. Dollars.
 
(i)  Unless the context otherwise requires or unless otherwise provided herein,
the terms defined in this Agreement which refer to a particular agreement,
instrument or document shall also refer to and include all renewals, extensions,
modifications, amendments or restatements of such agreement, instrument or
document, provided that nothing contained in this subsection (i) shall be
construed to authorize such renewal, extension, modification, amendment or
restatement.
 
(j)  Exhibits A, B, C, D, E and F, and Schedules 3.1(a), 3.1(b), 3.1(d), 3.1(k)
and 3.1(l) to this Agreement are attached hereto, incorporated herein by
reference and made a part hereof for all purposes. Any references to this
Agreement shall also include such Exhibits and Schedules unless the context in
which used shall otherwise require.
 
ARTICLE II  
 
SUBSCRIPTION OF SHARES
 
Section 2.1.  Subscription of Shares.
 
On the Closing Date and upon the terms and subject to the conditions hereof,
Investor hereby agrees to subscribe for (the "Subscription"), and the Company
agrees to issue and allot to Investor, 16,239,316 Shares (the "Subscribed
Shares") in exchange for the contribution of (i) the Rigs being contributed to
the Company pursuant to the Rig Assignment, and (ii) US$5,000,000 cash.
 
Section 2.2.  Conditions Precedent to the Obligations of Investor.
 
Investor's obligation to subscribe for the Subscribed Shares on the Closing Date
pursuant to Section 2.1 is subject to the satisfaction or waiver, on or before
the Closing Date, of the conditions contained in this Section 2.2:
 
(a)  The representations and warranties of the Company, Challenger and the
Family Members contained in Section 3.1 of this Agreement shall have been true
and correct on the date made and shall be true and correct in all respects as of
the Closing Date, as if made as of such date (except that representations and
warranties made as of a specific date need be true only as of that date).
 
(b)  The representations and warranties of the Company, Challenger, and the
Family Members contained in the Transaction Agreements (excluding this
Agreement), and the representations and warranties of each other party to the
Transaction Agreements (excluding Investor, if applicable) shall have been true
and correct on the date made and shall be true and correct in all respects as of
the Closing Date, as if made as of such date (except that representations and
warranties made as of a specific date need be true only as of that date).
 
(c)  The Company, Challenger and the Family Members shall have performed in all
material respects all of its obligations and covenants under this Agreement and
each other Transaction Agreement required to be performed by it on or prior to
the Closing Date.
 
(d)  No event shall have occurred that has a Material Adverse Effect on the
Company in the Investor's opinion, acting reasonably.
 
(e)  Investor shall have received a certificate of existence and good standing
or equivalent from the relevant authority in the Isle of Man with respect to the
Company.
 
(f)  Investor shall have received a certificate of existence and good standing
or equivalent from the relevant authority in Bermuda with respect to Challenger.
 
(g)  (i) There shall be no Proceedings pending or, to the Company's Knowledge
threatened, against or affecting the Company, any subsidiary, or any of their
respective properties or rights or any of their respective officers or
directors, before any Governmental Entity which (A) seeks to restrain, enjoin or
prevent the consummation of the transactions contemplated in any Transaction
Agreement, or (B) questions the validity or legality of any such transaction,
and (ii) to the Company's Knowledge, there shall be no valid basis for any such
Proceeding.
 
(h)  The Company shall have obtained a United States Federal Employer
Identification Number from the IRS.
 
(i)  The Company shall have made an election on IRS Form 8832 to be taxed as a
partnership for U.S. federal income tax purposes.
 
(j)  Investor shall have received evidence satisfactory to it of the termination
of (i) that certain Investment Agreement (the “Investment Agreement”) dated 20
October 2006 among the Company, MENA, the Family Members and certain other
shareholders of the Company, provided that the Investment Agreement shall not
terminate with respect to the warranties and limitations on claims in clause 4
and Schedule 5 and with respect to clauses 16 through 25, (ii) that certain
Shareholders' Agreement dated 20 October 2006 among the Company, MENA, the
Family Members and certain other shareholders of the Company, and (iii) any and
all agreements contemplated thereby, except that certain Advisory and
Consultancy Agreement dated as of 20 October 2006 by and between Venture Capital
Bank B.S.C.(c) and the Company.

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(k)  Investor shall have received evidence satisfactory to it of the due and
valid execution and binding effect of each of the Transaction Agreements with
respect to each other party thereto.
 
(l)  The Company shall have fully satisfied (including with respect to rights of
timely notification) or obtained enforceable waivers in respect of any
preemptive or similar rights directly or indirectly affecting the issuance of
the Shares pursuant to this Agreement.
 
(m)  The Company shall have delivered to Investor at the Closing the following:
 
(i)  a certificate executed by the Company's Chief Executive Officer or
President on behalf of the Company and by Challenger certifying that the
conditions specified in Section 2.2 have been satisfied;
 
(ii)  a certificate of the Company executed by the Company's Secretary attaching
and certifying to the truth and correctness of (A) the Company's Governing
Documents, and (B) the board and shareholder resolutions adopted in connection
with the transactions contemplated by this Agreement and the other Transaction
Agreements;
 
(iii)  evidence of the subscription of the Subscribed Shares. The relevant share
certificate or certificates shall be issued as soon as reasonably practicable
thereafter; and
 
(iv)  an opinion from the Company's legal counsel in the Isle of Man, in
substantially the form attached as Exhibit G.
 
(n)  Any background checks on any Family Member or member of management of the
Company or Challenger completed by Investor (which may be performed by Investor
at its sole discretion) and all other due diligence conducted by Investor and
its representatives in connection with the proposed transactions contemplated
hereby and in the other Transaction Agreements shall not have caused Investor or
its representatives to become aware of any facts relating to the business,
assets, results of operations, condition (financial or otherwise), or prospects
of the Company or any subsidiary of the Company, Challenger, or any Family
Member which, in the good faith judgment of Investor, make it inadvisable for
Investor to proceed with the consummation of the transactions contemplated
hereby and thereby.
 
Section 2.3.  Closing Conditions of the Company.
 
The Company's obligation to issue and allot the Subscribed Shares is subject to
the satisfaction or waiver, on or before the Closing Date, of the conditions
contained in this Section 2.3:
 
(a)  All limited liability company action necessary by Investor to authorize the
execution, delivery and performance of this Agreement and the other Transaction
Agreements to which Investor is a party, and the consummation of the
transactions contemplated hereby and thereby shall have been duly and validly
taken.
 
(b)  Investor shall tender to the Company US$5,000,000 cash, by wire transfer of
immediately available funds to an account or accounts designated by the Company,
such designation to be provided not later than at least one Business Day prior
to Closing.
 
(c)  Investor shall execute and deliver the Rig Assignment and the other
Transaction Agreements to which it is a party.
 
(d)  The representations and warranties of Investor contained in this Agreement
and the other Transaction Agreements to which it is a party shall have been true
and correct on the date made and shall be true and correct in all material
respects at and as of the Closing Date, as if made at and as of such date
(except that representations and warranties made as of a specific date need be
true only as of that date).
 
(e)  Investor shall have performed in all material respects all of its
obligations under this Agreement and each other Transaction Agreement required
to be performed by it on or prior to the Closing Date.
 
(f)  There shall be no Proceedings pending or, to Investor's Knowledge
threatened, against or affecting Investor, before any Governmental Entity which
(i) seeks to restrain, enjoin or prevent the consummation of the transactions
contemplated by this Agreement or any other Transaction Agreement, or
(ii) questions the validity or legality of any such transaction, and to
Investor's Knowledge, there shall be no valid basis for any such Proceeding.
 
(g)  No event shall have occurred that has a Material Adverse Effect on Investor
in the Company's opinion, acting reasonably.
 
(h)  Investor shall have given the Company an opportunity to inspect the Rigs
for the purpose of confirming that they meet the technical specifications set
forth on Exhibit D hereto and are adequate for their intended purpose, and
Company shall have confirmed same to its reasonable satisfaction. The Investor
shall have assigned to the Company all available manufacturer warranties in
connection with the Rigs, if any.
 
(i)  The Company shall have received evidence satisfactory to it of the due and
valid execution and binding effect of each of the Transaction Agreements with
respect to each other party thereto.
 
Section 2.4.  Closing; Termination.
 
(a)  Subject to the satisfaction of each of the conditions precedent set forth
in Sections 2.2 and 2.3 (which conditions, if satisfied, shall be deemed to have
been satisfied simultaneously), the closing of the Subscription (the "Closing")
shall take place at the offices of the Company in either Tripoli, Libya or
Cairo, Egypt, as soon as possible, but in no event later than December 31, 2007,
or at such other place or time as may be agreed upon by the Company and the
Investor.
 
(b)  This Agreement may be terminated by any party hereto if the Closing has not
occurred (other than through the failure of any party seeking to terminate this
Agreement to comply fully with its obligations under this Agreement) on or
before December 31, 2007; provided, that Article V shall survive notwithstanding
any such termination.

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ARTICLE III  
 
REPRESENTATIONS AND WARRANTIES
 
Section 3.1.  Representations and Warranties of the Company, Challenger, and
Each Family Member.  Subject to and qualified by the matters disclosed in the
Schedules and the Disclosure Letter to Investor, the Company, Challenger and
each Family Member, jointly and severally, represent and warrant to Investor
that:
 
(a)  The Company is a company limited by shares duly organized, validly existing
and in good standing under the Companies Act of 2006 of the Isle of Man.
Challenger is a company registered in Bermuda under company number 38486.
Challenger has been duly formed, is validly existing, and is in good standing.
The Company does not own, directly or indirectly, any capital stock or other
equity securities or ownership interest of any person other than those persons
listed on Schedule 3.1(a). Schedule 3.1(a) lists each subsidiary of the Company,
the jurisdiction of incorporation or formation of each subsidiary, the
authorized and outstanding capital stock or other equity securities or ownership
interests of each subsidiary as well as each branch of the Company. Each
subsidiary is duly organized, validly existing and, if applicable, in good
standing under the laws of the jurisdiction of its formation.
 
(b)  Each of the Company and its subsidiaries is duly licensed or qualified to
transact business and is in good standing in each jurisdiction in which the
nature of the business transacted by it or the character of the properties owned
or leased by it requires such licensing or qualification. Each of the Company
and the subsidiaries has full power and authority to own, lease, operate, and
hold its properties and to carry on its business as now conducted and as
proposed to be conducted. No Proceedings to dissolve the Company or any
subsidiary are pending. Each of the Company, Challenger, and each Family Member
has full power and authority to execute, deliver and perform this Agreement and
the other Transaction Agreements to which it is a party. The Company has full
power and authority to issue, allot and deliver the Subscribed Shares in
accordance with this Agreement. The officers and directors of the Company and
each of its subsidiaries are listed on Schedule 3.1(b). The Company has
delivered to Investor (i) accurate and complete copies of the Governing
Documents of each of the Company and its subsidiaries as currently in effect,
(ii) the share (or similar) records of each of the Company and its subsidiaries,
and (iii) the minutes of all meetings of the respective boards of directors (or
comparable governing entities) of the Company and its subsidiaries, any
committees of such boards or entities, and the owners of the Company and its
subsidiaries (and all consents in lieu of such meetings). Such records, minutes,
and consents accurately reflect the stock or other equity ownership of the
Company and its subsidiaries and all actions taken by such boards or governing
entities, committees, and owners.
 
(c)  The execution and delivery by the Company, Challenger, and each Family
Member of this Agreement and the other Transaction Agreements, the performance
of its obligations hereunder and thereunder and the issuance, sale and delivery
by the Company of the Subscribed Shares pursuant hereto have (or will have) been
duly authorized by all requisite company action and will not (i) result in a
violation of any Applicable Law, (ii) conflict with, result in a breach of, or
constitute (or, with due notice or lapse of time or both, would constitute) a
default under, or give rise to any right of termination, acceleration or
cancellation under, any indenture, agreement, contract, license, arrangement,
understanding, evidence of indebtedness, note, lease or other instrument to
which the Company or any subsidiary or any of its properties or assets are
bound, (iii) result in the creation or imposition of any Lien upon the Company
or any subsidiary or any of its properties or assets, or (iv) require any
consent, approval, notification, waiver or other similar action from or to any
Governmental Entity or other third party.
 
(d)  Upon consummation of the transactions contemplated herein, Investor will
acquire good, valid, and marketable title to the Subscribed Shares, free and
clear of all Liens, other than (i) those that may arise by virtue of any actions
taken by or on behalf of Investor or its Affiliates, (ii) restrictions on
transfer that may be imposed by applicable securities laws, (iii) inchoate liens
arising by operation of law with respect to taxes or other amounts not due and
payable, or (iv) at and after the Closing, the terms and provisions of the
Shareholders' Agreement. After the issuance of the Subscribed Shares and the
redemption by the Company of Shares pursuant to the Repurchase Agreement, the
ownership of the Company will be as set forth on Schedule 3.1(d). Except as
provided in the Shareholders' Agreement, or Repurchase Agreement, there are no
outstanding or authorized options, warrants, purchase rights, subscription
rights, conversion rights, exchange rights, or other contracts or commitments
that could require the Company to issue, sell, or otherwise cause to become
outstanding any of the equity interests of the Company. There are no outstanding
or authorized equity appreciation, phantom equity, profit participation, or
similar rights with respect to the Company. Other than those set forth in the
Shareholders' Agreement, there are no voting trusts, proxies, or other
agreements or understandings with respect to the voting of the equity interests
in the Company. Other than as set forth in the Shareholders' Agreement, no
person has demand or other rights to cause the Company to file any registration
statement under the Securities Act relating to any securities of the Company or
any of its subsidiaries or any right to participate in any such registration
statement, including piggyback registration rights.
 
(e)  No registration or filing with, or consent or approval of or other action
by, any Governmental Entity or any third party is or will be necessary for the
Company's, Challenger's, or any Family Member's valid execution, delivery and
performance of this Agreement or the other Transaction Agreements, or the
issuance, sale and delivery of the Subscribed Shares, other than those (i) which
have previously been obtained or made, or (ii) which are required to be made (if
any) under applicable securities laws, which will be obtained or made, and will
be effective within the time periods required by Applicable Law.
 
(f)  This Agreement and each other Transaction Agreement to which the Company,
Challenger, or a Family Member is a party has been duly authorized, executed and
delivered by the Company, Challenger, or a Family Member, as applicable and
constitutes the legal, valid and binding obligation of the Company, Challenger,
or a Family Member, as applicable, enforceable against such person in accordance
with its terms, except to the extent limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of general application
related to the enforcement of creditors' rights generally, and (ii) general
principles of equity, and except that enforcement of rights to indemnification
and contribution contained therein may be limited by applicable federal or state
laws or the public policy underlying such laws, regardless of whether
enforcement is considered in a proceeding in equity or at law. 
 
(g)  There are no actions, suits, claims, Proceedings, investigations, or
litigation pending or, to the Company's Knowledge, threatened which involve,
affect or relate to the Company, or the Company's assets, that could reasonably
be expected to have a Material Adverse Effect, and the Company has no Knowledge
of any reasonable basis for any such action, suit, claim, Proceeding, or
investigation. There are no orders, writs, injunctions, or decrees of any
Governmental Entity relating to or affecting the Company or the Company's
assets.
 
(h)  The Company, its subsidiaries and each of their respective officers,
directors, employees and agents acting on their behalf, have complied in all
material respects with all Applicable Laws, including, without limitation,
Applicable Environmental Laws. The Company has not received any written notice,
which has not been dismissed or otherwise disposed of, that the Company has not
so complied with any Applicable Law. Neither the Company nor any of its
officers, directors, equityholders, or Affiliates is charged or to their
Knowledge threatened with, or under investigation with respect to, any violation
of any Applicable Law relating to any aspect of the business of the Company.
 
(i)   (A) In connection with the acquisition, operation or maintenance of any of
the Company’s assets and business, the transactions contemplated by this
Agreement or any by any other Transaction Agreement:
 
(1)  The Company, Challenger and the Family Members have not, and to their
actual knowledge, their respective shareholders, officers, directors, employees,
agents, subcontractors, Affiliates or any other person or entity acting on their
behalf have not, made, offered or authorized, are not aware of and will not
make, offer or authorize, any payment, loan or gift of anything of value to a
Government Official for purposes of influencing any act, decision, or omission
of any Government Official or for securing any improper advantage for any person
(such as, without limitation, a decision of a Government Official to award a
contract or to grant preferential tax treatment).
 
(2)  The Company, Challenger and the Family Members have not, and to their
actual knowledge, their respective shareholders, officers, directors, employees,
agents, subcontractors, Affiliates or any other person or entity acting on their
behalf have not, made, offered or authorized, are not aware of and will not
make, offer or authorize any payment, loan or gift of anything of value to any
person while knowing or having reasons to suspect that any part of such offer,
payment, loan or gift will be given or offered to a Government Official for
purposes of influencing any act, decision, or omission of any Government
Official or for securing any improper advantage for any person (such as, without
limitation, a decision of a Government Official to award a contract or to grant
preferential tax treatment).

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(3)  The Company, Challenger and the Family Members have not, and to their
actual knowledge, their respective shareholders, officers, directors, employees,
agents, subcontractors, Affiliates or any other person or entity acting on their
behalf have not, made, offered or authorized, are not aware of and will not
make, offer or authorize, any payment, loan or gift of anything of value to a
Government Official or to any other person in violation of any applicable
statue, law or regulation of any government or entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
 
(B) (1)  The Company maintains and will continue to maintain accurate and
reasonably detailed books, records and accounts which fairly and accurately
reflect all transactions and dispositions of assets. The Company's books,
records and accounts do not contain and will not contain any false or misleading
entries, and there are no, and there will be no, undisclosed or unrecorded
accounts related to the Company.
 
(2)  The business and operations of the Company have been and will continue to
be conducted in accordance with good and sound ethical business practices, and
in accordance with the general principles contained in the U.N. Convention
against Corruption of October 31, 2003 (ratified by Libya on June 7, 2005) or
the general principles contained in the African Convention on Preventing and
Combating Corruption of July 11, 2003 (ratified by Libya on May 23, 2004).
 
(3)  To the best of their knowledge and belief, no ownership interest in the
Company is directly or indirectly held or controlled by a Government Official,
or any immediate relative of a Government Official of a jurisdiction applicable
to the Company.
 
(4)  No Government Official, or any immediate relative of any Government
Official, will, directly or indirectly, receive any portion of the price to be
paid by Investor pursuant to this Agreement or the Transaction Agreements, or
any other benefit or value by reason of or in connection with the execution of
this Agreement or any other Transaction Agreement by the parties.
 
(j)  The Company has complied in all material respects with all Applicable Laws
in connection with the offer, issuance and subscription of the Subscribed
Shares. Neither the Company nor to the Company's Knowledge any person acting on
its behalf has taken any other action so as to subject the offering, issuance or
sale of the Subscribed Shares to the registration provisions of the Securities
Act.
 
(k)  Schedule 3.1(k) contains a complete and accurate list of assets of the
Company on the date hereof. The equipment and other personal property and
fixtures forming a part of the Company's assets are in good repair and
condition, free from material defects, and are adequate for the normal operation
of the Company's business in accordance with prudent industry standards. Except
as set forth on Schedule 3.1(k), the Company owns such assets free and clear of
any Liens.
 
(l)  Schedule 3.1(l) lists all material contracts, agreements, licenses, and
Permits to which the Company is a party or which relate to the Company's assets
(the "Material Agreements"). Such Material Agreements are in full force and
effect in all material respects and constitute valid and binding obligations of
the parties thereto. The Company is not in breach or default (and no situation
exists which with the passing of time or giving of notice would create a breach
or default) of its obligations under the Material Agreements, and no breach or
default by any third party (or situation which, with the passage of time or
giving of notice would create a breach or default) exists, to the extent such
breach or default (whether by the Company or such a third party), could
reasonably be expected to have a Material Adverse Effect on the Company. All
payments owing under the Material Agreements have been and are being made
(timely, and before the same became delinquent) by the Company in all material
respects. For the purposes of the representations contained in this Section
3.1(l) (and without limitation of such representations), the non-payment of an
amount, or non-performance of an obligation, where such non-payment, or
non-performance, could result in the forfeiture or termination of rights of the
Company under a Material Agreement, shall be considered material.
 
(m)  (A) The properties, operations, and activities of the Company comply with
all Applicable Environmental Laws that could reasonably be expected to have a
Material Adverse Effect on the Company; (B) the Company, and the properties,
operations, and activities of the Company are not subject to any existing,
pending, or, to the Company's Knowledge, threatened Proceeding under, or to any
remedial obligations under, any Applicable Environmental Laws; (C) all Permits,
if any, required to be obtained by the Company under any Applicable
Environmental Laws in connection with any aspect of the business of the Company,
including without limitation those relating to the treatment, storage, disposal,
or Release of a Hazardous Material, have been duly obtained and are in full
force and effect, and the Company is in compliance with the material terms and
conditions of all such Permits; and (D) to the Company's Knowledge there are no
physical or environmental conditions existing on any property owned or leased by
the Company or resulting from the Company's operations or activities, past or
present, at any location, that would give rise to any on-site or off-site
remedial obligations under any Applicable Environmental Laws; (F) all Hazardous
Materials generated by the Company or used in connection with their respective
properties, operations, or activities have been transported only by carriers
authorized under Applicable Environmental Laws to transport such materials, and
have been disposed of only at treatment, storage, and disposal facilities
authorized under Applicable Environmental Laws to treat, store, or dispose of
such materials; and (G) there has been no exposure of any person or property to
Hazardous Materials, nor has there been any Release of Hazardous Materials into
the environment in violation of any Applicable Environmental Laws, by the
Company or in connection with its properties, operations, or activities that
could reasonably be expected to give rise to any material claim for damages or
compensation. The Company has made available to Investor all internal and
external environmental audits and studies and all correspondence on substantial
environmental matters in the possession of the Company relating to any of the
current or former assets, operations, or activities of the Company.
 
(n)  The Company has delivered to Investor accurate and complete copies of
(A) the Company's audited consolidated balance sheet as of December 31, 2006,
and the related audited consolidated statements of income, shareholders' equity
and cash flows for the year then ended, and the notes and schedules thereto,
together with the unqualified report thereon of PricewaterhouseCoopers (Egypt),
independent public accountants (the "Audited Financial Statements"), and (B) the
Company's unaudited consolidated balance sheet as of October 31, 2007 (the
"Latest Balance Sheet"), and the related unaudited consolidated statements of
income, shareholders' equity and cash flows for the ten month period then ended
(the "Unaudited Financial Statements"), in each case certified by the Company's
chief financial officer (collectively, the "Financial Statements"). The
Financial Statements: (x) represent actual bona fide transactions; (y) have been
prepared from the books and records of the Company and its consolidated
subsidiaries in conformity with International Financial Reporting Standards,
applied on a basis consistent with preceding years throughout the periods
involved, except that the Unaudited Financial Statements are not accompanied by
notes or other textual disclosure required by such accounting principles; and
(z) fairly present the Company's consolidated financial position as of the
respective dates thereof and its consolidated results of operations and cash
flows for the periods then ended, except that the Unaudited Financial Statements
are subject to normal year-end adjustments which will not be material in the
aggregate. Neither the Company nor any of its subsidiaries has any liabilities
or obligations, whether accrued, contingent, liquidated or otherwise, except
liabilities or obligations (A) reflected in the Latest Balance Sheet, (B)
described in the notes accompanying the Audited Financial Statements, or (C)
incurred in the ordinary course of business since the date of the Latest Balance
Sheet consistent with past practice (none of which is a material liability for
breach of contract, breach of warranty, tort, or infringement). There has been
no Material Adverse Effect on the Company since the date of the Latest Balance
Sheet.
 
(o)  The Company and its subsidiaries have no liabilities or obligations of any
nature (whether known or unknown and whether absolute, accrued, contingent, or
otherwise) except for (A) liabilities or obligations reflected or reserved
against in the Latest Balance Sheet, (B) liabilities or obligations that are
neither (x) required to be reflected on or reserved against in the Latest
Balance Sheet under International Financial Reporting Standards as applied by
the Company nor (y) could be reasonably expected to have a Material Adverse
Effect, and (C) current liabilities incurred in the ordinary course of business
since the date of the Latest Balance Sheet.
 
(p)  Since the date of the Latest Balance Sheet, the Company has conducted its
business only in the ordinary course of business and there has not been any:
 
(i)  material payment or increase by the Company of any bonuses, salaries, or
other compensation to any shareholder, member, partner, manager officer, or
employee or entry into any employment, severance, or similar contract with any
manager, officer, or employee;
 
(ii)  adoption of, or material increase in the payments to or benefits under,
any profit sharing, bonus, deferred compensation, savings, insurance, pension,
retirement, or other employee benefit plan for or with any employees of the
Company;
 
(iii)  damage to or destruction or loss of any asset or property of the Company,
whether or not covered by insurance, materially and adversely affecting the
properties, assets, business, financial condition, or prospects of the Company
and its subsidiaries, taken as a whole;

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(iv)  entry into, termination of, or receipt of notice of termination of (i) any
material license, distributorship, dealer, sales representative, joint venture,
credit, or similar agreement, or (ii) any material contract or transaction;
 
(v)  sale (other than sales of inventory in the ordinary course of business),
lease, or other disposition of any asset or property of the Company or mortgage,
pledge, or imposition of any lien or other encumbrance on any material asset or
property of the Company;
 
(vi)  cancellation or waiver of any claims or rights with a value to the Company
in excess of US$500,000;
 
(vii)  material change in the accounting methods used by the Company;
 
(viii)  (A) split, combination, or reclassification any shares of the Company's
capital stock; (B) declaration or payment of any dividend or other distribution
(whether in cash, stock, or property or any combination thereof) in respect of
the Company's capital stock; or (C) except as provided in the Repurchase
Agreement or the VCB Sale and Purchase Agreement, repurchase, redemption, or
other acquisition any of the Company's securities or any securities of any
subsidiary of the Company; or
 
(ix)  agreement, whether oral or written, by the Company to do any of the
foregoing.
 
(q)  The Company and its subsidiaries maintain insurance for its benefit in
coverages and amounts standard for their industry. Neither the Company nor any
subsidiary of the Company is in default with respect to any provision in any
current policy maintained for its benefit, and all such insurance is in full
force and effect. Neither the Company nor any subsidiary of the Company has
received, nor does the Company have any Knowledge of, any notice of cancellation
or non-renewal of any such insurance policy. Neither the Company nor any
subsidiary of the Company has been refused any insurance with respect to its
assets, properties, or businesses.
 
(r)  None of the Company's or any subsidiary's current customers or suppliers
has refused, or communicated that it will or may refuse, to purchase or supply
products or services from or to the Company or any subsidiary thereof or has
communicated that it will or may substantially reduce the amount of products or
services that it is willing to purchase from or supply to the Company or any
subsidiary thereof.
 
(s)  The Company has paid all amounts due on account of any income, ad valorem,
excise, profits, franchise, occupation, property, payroll, sales, use, gross
receipts and other taxes (and any interest and penalties) and assessments
imposed on its assets or business by any Governmental Entity the nonpayment of
which could reasonably be expected to have a Material Adverse Effect on the
Company, except for amounts not yet due and owing. All tax returns and reports
required to be filed for all such taxes have been filed with all such taxing
authorities, and all such tax returns and reports are true and correct. No
assessments of deficiencies have been made against the Company which are
presently pending or outstanding, and no state or facts exist which would
constitute grounds for any such assessment.
 
(t)  Investor has been provided with an accurate list of the names and salary
rates of all present officers and management employees of the Company, together
with any bonuses paid or payable to such persons for the year ended December 31,
2006 or since that date, and to the extent existing on the date of this
Agreement, all arrangements with respect to any bonuses or additional
compensation to be paid to them from and after the date of this Agreement and
all accrued paid vacation, to date, if any. None of the Company's employees is
obligated under any contract (including licenses, covenants or commitments of
any nature) or other agreement, or subject to any judgment, decree or order of
any court or administrative agency, that would materially interfere with such
employee's ability to promote the interest of the Company or that would conflict
with the Company's business. Neither the execution or delivery of the
Transaction Agreements, nor the carrying on of the Company's business by the
employees of the Company, nor the conduct of the Company's business as now
conducted and as presently proposed to be conducted, will, to the Company's
Knowledge, conflict with or result in a breach of the terms, conditions, or
provisions of, or constitute a default under, any contract, covenant or
instrument under which any such employee is now obligated. The Company is not
delinquent on any material payments to any of its employees, consultants, or
independent contractors for any wages, salaries, commissions, bonuses, or other
direct compensation for any service performed for it to the date hereof or
amounts required to be reimbursed to such employees, consultants, or independent
contractors. The Company has complied with all applicable laws related to
employment, including those related to wages, hours, worker classification,
collective bargaining, and the payment and withholding of taxes and other sums
as required by law except where noncompliance with any Applicable Law would not
result in a Material Adverse Effect on the Company. The Company has withheld and
paid to the appropriate Governmental Entity or is holding for payment not yet
due to such Governmental Entity all amounts required to be withheld from
employees of the Company and is not liable for any arrears of wages, taxes,
penalties, or other sums for failure to comply with any of the foregoing. The
Company has made all required contributions and has no liability to each
employee benefit plan maintained, established or sponsored by the Company, or
which the Company participates in or contributes to, and has complied in all
material respects with all Applicable Laws for any such employee benefit plan.
The Company is not bound by or subject to (and none of its assets or properties
is bound by or subject to) any written or oral, express or implied, contract,
commitment or arrangement with any labor union, and no labor union has requested
or, to the Knowledge of the Company, has sought to represent any of the
employees, representatives or agents of the Company. There is no strike or other
labor dispute involving the Company pending, or to the Company's Knowledge,
threatened, which would have a Material Adverse Effect on the Company, nor is
the Company aware of any labor organization activity involving its employees.
 
(u)  All books and records of the Company and its subsidiaries are true and
complete in all material respects, have been maintained in accordance with good
business practice and in accordance with all Applicable Laws. The corporate
records of the Company reflect a true record of all meetings and proceedings of
its board of directors and shareholders.
 
(v)  The Company and its subsidiaries either own or have valid licenses or other
rights to use all material patents, copyrights, trademarks, software, databases,
engineering data and other technical information used in their businesses as
presently conducted.
 
(w)  As of the Closing Date after giving effect to the transactions contemplated
herein and in each of the Transaction Agreements, the Company is Solvent.
 
(x)  Except with respect to financial projections, all information heretofore
furnished by the Company to Investor with respect to the Company, its
subsidiaries, and their respective properties and operations, taken in the
aggregate, is true and correct in all material respects and does not omit any
information that is necessary to prevent such information from being misleading
in any material respect.
 
(y)  The Company, as a drilling contractor, is a sophisticated purchaser of the
Rigs, has inspected the Rigs to its complete satisfaction, is purchasing the
Rigs on an "as is," "where is," basis, without any warranty by the Investor,
either express or implied, based on the Company's inspection and knowledge of
drilling equipment and drilling rigs and not on any representation made by
Investor or any of its Affiliates or representatives as to the physical
condition, design, operation or fitness for a particular purpose, except with
respect to any representations of Investor with respect thereto specifically set
forth in Section 3.2 of this Agreement.
 
(z)  No agent, broker, investment banker, finder, financial advisor or other
person is or will be entitled to any broker's or finder's fee or any other
commission or similar fee from the Company in connection with the transactions
contemplated in this Agreement or the Transaction Agreements, and no person is
entitled to any fee or commission or like payment in respect thereof based in
any way on agreements, arrangements or understandings made by or on the
Company's behalf.
 
Section 3.2.  Representations and Warranties of Investor.  Investor represents
and warrants to the Company that:
 
(a)  Investor is a limited liability company duly organized, legally existing
and in good standing under the laws of the State of Delaware.

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(b)  Investor has full power and authority to execute, deliver, and perform this
Agreement and each other Transaction Agreement, instrument, or document executed
or to be executed by Investor in connection with the transactions contemplated
herein to which it is a party and to consummate the transactions contemplated
herein and therein, and to conduct its business generally in the manner that it
is currently being conducted. The execution, delivery, and performance by
Investor of this Agreement and each other Transaction Agreement, instrument, or
document executed or to be executed by Investor in connection with the
transactions contemplated herein to which it is a party, and the consummation by
it of the transactions contemplated herein and therein, have been duly
authorized by all necessary action of Investor.
 
(c)  This Agreement has been duly executed and delivered by Investor and
constitutes, and each other Transaction Agreement executed or to be executed by
Investor in connection with the transactions contemplated herein to which it is
a party has been, or when executed will be, duly executed and delivered by
Investor and constitutes, or when executed and delivered will constitute, a
valid and legally binding obligation of Investor, enforceable against it in
accordance with its respective terms, except that such enforceability may be
limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium,
and similar laws affecting creditors' rights generally and (b) equitable
principles which may limit the availability of certain equitable remedies (such
as specific performance) in certain instances.
 
(d)  The execution, delivery, and performance by Investor of this Agreement and
each other Transaction Agreement, instrument, or document executed or to be
executed by Investor in connection with the transactions contemplated herein to
which it is a party and the consummation by it of the transactions contemplated
herein and therein do not and will not (a) conflict with or result in a
violation of any provision of the governing instruments of Investor,
(b) conflict with or result in a violation of any provision of, or constitute
(with or without the giving of notice or the passage of time or both) a default
under, or give rise (with or without the giving of notice or the passage of time
or both) to any right of termination, cancellation, or acceleration under, any
bond, debenture, note, mortgage, indenture, lease, contract, agreement, or other
instrument or obligation to which Investor is a party or by which Investor or
any of its properties may be bound, (c) result in the creation or imposition of
any Lien upon the properties of Investor, or (d) violate any Applicable Law
binding upon Investor.
 
(e)  Except as set forth on Schedule 3.2(e), no consent, approval, order, or
authorization of, or declaration, filing, or registration with, any Governmental
Entity or of any third party is required to be obtained or made by Investor in
connection with the execution, delivery, or performance by Investor of this
Agreement and each other agreement, instrument, or document executed or to be
executed by Investor in connection with the transactions contemplated herein to
which it is a party or the consummation by it of the transactions contemplated
herein and therein.
 
(f)  There are no Proceedings pending or, to Investor's Knowledge, threatened,
in which Investor or an Affiliate is or may be a party affecting the execution
and delivery of this Agreement by Investor or the consummation of the
transactions contemplated herein by Investor.
 
(g)  The Investor, its Affiliates and each of their respective officers,
directors, employees and agents acting on their behalf, have complied in all
material respects with all Applicable Laws. The Investor has not received any
written notice, which has not been dismissed or otherwise disposed of, that the
Investor has not so complied with any Applicable Law. Neither the Investor nor
any of its officers, directors, equity holders, or Affiliates is charged or to
their Knowledge threatened with, or under investigation with respect to, any
violation of any Applicable Law.
 
(h)  Each of the Rigs is (i) legally and beneficially owned solely by the
Investor and will be conveyed free from any liens and other encumbrances, and
(ii) where capable of possession, in the possession or under the control of the
Investor.
 
(i)  Exhibit D contains a complete and accurate list of the Rigs and their
associated components and specifications and the Rigs materially conform to such
specifications.
 
(j)  Investor acknowledges that it can bear the economic risk of its investment
in the Company, and has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of an investment
in the Company. Investor is acquiring the Subscribed Shares for its own account
and not with the intent to make a distribution in violation of the Securities
Act or in violation of any other applicable securities laws, rules or
regulations.
 
(k)  No agent, broker, investment banker, finder, financial advisor or other
person is or will be entitled to any broker's or finder's fee or any other
commission or similar fee from Investor in connection with the transactions
contemplated in this Agreement or the Transaction Agreements, and no person is
entitled to any fee or commission or like payment in respect thereof based in
any way on agreements, arrangements or understandings made by or on Investor's
behalf.
 
ARTICLE IV  
 
COVENANTS
 
Section 4.1.  Survival.  The representations and warranties set forth in Article
III, and the rights to indemnification thereof, shall survive the Closing.
Notwithstanding the foregoing, no party shall be liable for a breach of the
representations and warranties set forth in Section 3.2 or Section 3.1,
excluding specifically subsections 3.1(d) (except the last sentence thereof),
3.1(f), 3.2(c), 3.2(h), as to which liability shall not be limited by time,
unless, subject to subsection (B) of this Section 4.1, written notice of a claim
for breach or indemnification pursuant Section 4.2(c) of this Agreement shall
have been delivered on or before (A) the ninetieth (90) day following the
delivery to Investor of the audited financial statements of Company for the
financial year ended 31 December 2010, or (B) with respect to a breach of
subsection 3.1(s) only, 31 December 2013. The foregoing sentence shall not apply
to limit liability for any breach of a representation or warranty that is the
subject of dishonest concealment or fraud. For convenience of reference, the
period from the date hereof until any representation, warranty, covenant or
other agreement contained herein shall terminate is referred to herein as the
“Survival Period.”
 
If notice of any claim for breach of the representations and warranties in
Article III or indemnification under Section 4.2 hereof shall have been given
within the applicable Survival Period, the representations and warranties that
are the subject of such breach or indemnification claim shall survive until such
time as such claim is finally resolved.
 
For the avoidance of doubt, the limitations on liability set out in Section
4.2(d) apply to any claim by a party for breach of the representations and
warranties in Article III.
 
Section 4.2.  Indemnification.
 
(a)  Subject to the terms and conditions hereof, Company, each Family Member and
Challenger, jointly and severally, shall indemnify and hold Investor, its
Affiliates, and each of their respective officers, directors, agents, employees,
representatives, and independent contractors harmless from and against any and
all claims, obligations, actions, damages, losses, liabilities, judgments,
settlements, penalties, costs or expenses (including reasonable attorney's fees
and expenses), of any nature whatsoever (including diminution in value of the
Shares held by Investor) (collectively, "Damages") asserted against, resulting
to, imposed upon or incurred by Investor, its Affiliates, and each of their
respective officers, directors, agents, employees, representatives, and
independent contractors, directly or indirectly, by reason of, arising out of or
resulting from (i) any breach by the Company, Challenger, or any Family Member
of any representation, warranty, covenant or agreement (in each case without
regard to any qualification of materiality or Material Adverse Effect) of the
Company, any Family Member, or Challenger contained in this Agreement, the other
Transaction Agreements, or in any certificate delivered pursuant to this
Agreement or the other Transaction Agreements, and (ii) any taxes, including
entity-level taxes and federal, state, local, and foreign taxes, attributable to
periods and operations of the Company before the issuance of the Subscribed
Shares to Investor.

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(b)  Subject to the terms and conditions hereof, Investor shall indemnify and
hold the Company, its Affiliates, and each of their respective officers,
directors, agents, employees, representatives, and independent contractors
harmless from and against any and all Damages asserted against, resulting to,
imposed upon or incurred by the Company, its Affiliates, and each of their
respective officers, directors, agents, employees, representatives, and
independent contractors, directly or indirectly, by reason of, arising out of or
resulting from any breach by Investor of any representation, warranty, covenant
or agreement of Investor contained in this Agreement.
 
(c)  In the event that any claim or demand for which a party (an "Indemnifying
Party"), would be liable to another party under Section 4.2(a) or Section 4.2(b)
(an "Indemnified Party") is asserted against or sought to be collected from an
Indemnified Party by a third party, the Indemnified Party shall with reasonable
promptness notify the Indemnifying Party of such claim or demand, but the
failure so to notify the Indemnifying Party shall not relieve the Indemnifying
Party of its obligations under this Section 4.2, except to the extent that the
defense of such claim or demand is materially prejudiced thereby. The
Indemnifying Party shall have 30 days from receipt of the above notice from the
Indemnified Party (the "Notice Period") to notify the Indemnified Party whether
or not the Indemnifying Party desires, at the Indemnifying Party's sole cost and
expense, to defend the Indemnified Party against such claim or demand; provided,
that the Indemnified Party is hereby authorized prior to and during the Notice
Period to file any motion, answer or other pleading that it shall deem necessary
or appropriate to protect its interests or those of the Indemnifying Party and
not be prejudicial to the Indemnifying Party. If the Indemnifying Party elects
to assume the defense of any such claim or demand, the Indemnified Party shall
have the right to employ separate counsel at its own expense and to participate
in the defense thereof. If the Indemnifying Party elects not to assume the
defense of such claim or demand (or fails to give notice to the Indemnified
Party during the Notice Period), the Indemnified Party shall be entitled to
assume the defense of such claim or demand with counsel of its own choice, at
the expense of the Indemnifying Party. If the claim or demand is asserted
against both the Indemnifying Party and the Indemnified Party and based on the
advice of the Indemnified Party's counsel it is determined that there is a
conflict of interest which renders it inappropriate for the same counsel to
represent both the Indemnifying Party and the Indemnified Party, the
Indemnifying Party shall be responsible for paying separate counsel for the
Indemnified Party; provided, however, that the Indemnifying Party shall not be
responsible for paying for more than one separate firm of attorneys to represent
all of the Indemnified Parties, regardless of the number of Indemnified Parties.
If the Indemnifying Party elects to assume the defense of such claim or demand,
confirms in writing the obligation to indemnify the Indemnified Party for the
full amount, proves to the Indemnified Party's reasonable satisfaction the
Indemnifying Party's capacity to perform such indemnification obligations, uses
counsel reasonably satisfactory to the Indemnified Party, and diligently
prosecutes the defense of such claim, then (i) no compromise or settlement
thereof may be effected by the Indemnifying Party without the Indemnified
Party's written consent (which shall not be unreasonably withheld) unless the
sole relief provided is monetary damages that are paid in full by the
Indemnifying Party, and (ii) the Indemnifying Party shall have no liability with
respect to any compromise or settlement thereof effected without its written
consent (which shall not be unreasonably withheld).
 
(d)  Notwithstanding the provisions of this Section 4.2 or any other provision
of this Agreement to the contrary, no party shall have any liability or
obligation, and no claim shall be asserted, for any Damages unless and until the
aggregate amount of Damages exceeds US$100,000 (the "Basket"); provided,
however, that in the event the aggregate amount of such Damages exceeds the
Basket, the Basket shall not limit the Damages that may be claimed by such
party, and such party shall be entitled to collect the entire amount of all
Damages, including the amount represented by the Basket. Any phrase in Section
3.1 or 3.2 qualified by the term “material” or “Material Adverse Effect” shall
be disregarded for the purposes of calculating Damages for the Basket.
Notwithstanding the foregoing, under no circumstances shall any party be liable
for Damages for any breach of the representations and warranties in Article III
in an aggregate amount in excess of US$65,000,000.
 
(e)  IT IS THE EXPRESS INTENTION OF THE PARTIES HERETO THAT ALL INDEMNIFICATION
OBLIGATIONS ASSUMED BY SUCH PARTY, INCLUDING, BUT NOT LIMITED TO, THE
INDEMNIFICATION PROVISIONS IN THIS SECTION 4.2, SHALL BE ENFORCEABLE REGARDLESS
OF WHETHER ANY PERSON (INCLUDING THE INDEMNIFYING PARTY) ALLEGES OR PROVES
(i) NEGLIGENCE (INCLUDING SOLE NEGLIGENCE, SINGLE NEGLIGENCE, JOINT NEGLIGENCE,
CONCURRENT NEGLIGENCE, ACTIVE OR PASSIVE NEGLIGENCE, BUT EXPRESSLY NOT INCLUDING
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) OF ANY INDEMNIFIED PARTY, OR (ii) STRICT
LIABILITY. THE PARTIES HERETO AGREE THAT THE FOREGOING COMPLIES WITH THE EXPRESS
NEGLIGENCE RULE AND IS CONSPICUOUS.
 
Section 4.3.  Fees and Expenses.  Within 30 days of the Closing, the Company
shall pay all reasonable fees and expenses of Thompson & Knight LLP, counsel to
Investor, and such other attorney fees and expenses of Investor, incurred in
connection with the transactions contemplated hereby, in an amount not in excess
of US$100,000, upon receipt of supporting invoices.
 
Section 4.4.  Access and Investigation.  Between the date of this Agreement and
the Closing, the Company will at the Investor's expense (a) afford Investor and
its representatives full and free access to each of the Company's personnel,
properties, contracts, books and records, and other documents and data, (b)
furnish Investor and its representatives with copies of all such contracts,
books and records, and other existing documents and data as Investor or its
representatives may reasonably request, and (c) furnish Investor and its
representatives such additional financial, operating, and other data as Investor
or its representatives may reasonably request.
 
Section 4.5.  Operation of the Company.  Between the date of this Agreement and
the Closing, the Company will (w) conduct the business of the Company and its
subsidiaries only in the ordinary course of business, (x) use its best efforts
to preserve intact the current business organization of the Company, (y) confer
with Investor concerning operational and financial matters of a material nature,
and (z) otherwise report periodically to Investor concerning the status of the
business, operations, and finances of the Company. In addition, without the
prior written consent of Investor, between the date of this Agreement and the
Closing neither the Company nor any of its subsidiaries shall:
 
(a)  amend its other governing instruments;
 
(b)  (i) issue, sell, or deliver (whether through the issuance or granting of
options, warrants, commitments, subscriptions, rights to purchase, or otherwise)
any shares of its capital stock of any class or any other securities or equity
equivalents; or (ii) amend in any respect any of the terms of any such
securities outstanding as of the date hereof;
 
(c)   (i) split, combine, or reclassify any shares of its capital stock; (ii)
declare, set aside, or pay any dividend or other distribution (whether in cash,
stock, or property or any combination thereof) in respect of its capital stock;
(iii) except for as provided in the Repurchase Agreement, repurchase, redeem, or
otherwise acquire any of its securities or any securities of any of its
subsidiaries; or (iv) adopt a plan of complete or partial liquidation or
resolutions providing for or authorizing a liquidation, dissolution, merger,
consolidation, restructuring, recapitalization, or other reorganization of the
Company or any subsidiary of the Company;
 
(d)  other than in the ordinary course of business, (i) create, incur,
guarantee, or assume any indebtedness for borrowed money or otherwise become
liable or responsible for the obligations of any other person; (ii) make any
loans, advances, or capital contributions to, or investments in, any other
person; (iii) pledge or otherwise encumber shares of capital stock of the
Company or any subsidiary thereof; or (iv) mortgage or pledge any of its assets,
tangible or intangible, or create or suffer to exist any lien thereupon;
 
(e)  (i) enter into, adopt, or (except as may be required by law) amend or
terminate any bonus, profit sharing, compensation, severance, termination, stock
option, stock appreciation right, restricted stock, performance unit, stock
equivalent, stock purchase, pension, retirement, deferred compensation,
employment, severance (exceeding US$150,000 in the aggregate), or other employee
benefit agreement, trust, plan, fund, or other arrangement for the benefit or
welfare of any director, officer, or employee; (ii) except for normal increases
in the ordinary course of business consistent with past practice that, in the
aggregate, do not result in a material increase in benefits or compensation
expense to the Company, increase in any manner the compensation or fringe
benefits of any director, officer, or employee; or (iii) pay to any director,
officer, or employee any benefit not required by any employee benefit agreement,
trust, plan, fund, or other arrangement as in effect on the date hereof;
 
(f)  acquire, sell, lease, transfer, or otherwise dispose of, directly or
indirectly, any assets outside the ordinary course of business consistent with
past practice or any assets that in the aggregate are material to the Company;
 
(g)  acquire (by merger, consolidation, or acquisition of stock or assets or
otherwise) any corporation, partnership, or other business organization or
division thereof;
 
(h)  make any capital expenditure or other expenditures outside the ordinary
course of business which, individually, is in excess of US$20,000 or, in the
aggregate, are in excess of US$50,000;

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(i)  amend any tax return or make any tax election or settle or compromise any
federal, state, local, or foreign tax liability;
 
(j)  pay, discharge, or satisfy any claims, liabilities, or obligations (whether
accrued, absolute, contingent, unliquidated, or otherwise, and whether asserted
or unasserted), other than the payment, discharge, or satisfaction in the
ordinary course of business consistent with past practice; provided, however,
that in no event shall the Company repay any long-term indebtedness except to
the extent required by the terms thereof;
 
(k)  enter into any lease, contract, agreement, commitment, arrangement, or
transaction outside the ordinary course of business consistent with past
practice;
 
(l)  amend, modify, or change any existing lease, contract, or agreement, other
than in the ordinary course of business consistent with past practice;
 
(m)  waive, release, grant, or transfer any rights of value, other than in the
ordinary course of business consistent with past practice;
 
(n)  lay off any of its employees outside the ordinary course of business;
 
(o)  change any of its banking or safe deposit arrangements;
 
(p)  change any of the accounting principles or practices used by it;
 
(q)  take any action which would or might make any of the representations or
warranties of the Company, Challenger, or any Family Member contained in this
Agreement or other Transaction Agreement untrue or inaccurate as of any time
from the date of this Agreement to the Closing or would or might result in any
of the conditions set forth in this Agreement or any other Transaction Agreement
not being satisfied; or
 
(r)  authorize or propose, or agree in writing or otherwise to take, any of the
actions described in this Section 4.5.
 
Section 4.6.  No Commitment for Additional Financing.  The Company, Challenger,
and each Family Member acknowledges and agrees that, except as set forth in the
Transaction Agreements, Investor has made no representation, undertaking,
commitment or agreement to provide or assist the Company in obtaining any
financing, investment or other assistance, other than the subscription of the
Subscribed Shares as set forth herein and subject to the conditions set forth
herein. In addition, the Company, Challenger, and each Family Member
acknowledges and agrees that (a) no statements, whether written or oral, made by
Investor or its representatives on or after the date of this Agreement shall
create an obligation, commitment or agreement to provide or assist the Company
in obtaining any financing or investment; (b) neither the Company, Challenger,
nor any Family Member shall rely on any such statement by Investor or its
representatives; and (c) an obligation, commitment or agreement to provide or
assist the Company in obtaining any financing or investment may only be created
by a written agreement, signed by Investor and the Company, setting forth the
terms and conditions of such financing or investment and stating that the
parties intend for such writing to be a binding obligation or agreement.
Investor shall have the right, in its sole and absolute discretion, to refuse or
decline to participate in any other financing of or investment in the Company,
and shall have no obligation to assist or cooperate with the Company in
obtaining any financing, investment or other assistance.
 
Section 4.7.  Audit Rights and Certifications.  In the event that Investor has a
reasonable basis to believe that the Company, Challenger or the Family Members
have taken or failed to take any action in violation of the representations and
warranties of the Company Challenger and the Family Members under this Agreement
or that may otherwise subject Investor (or any of its officers, directors,
employees or agents) to liability under the FCPA, Investor shall have the right,
upon written notice and at the Investors' expense, to conduct an investigation
and audit of the Company, Challenger, and the Family Members. The Company,
Challenger, and the Family Members shall cooperate fully with such
investigation, provided that the investigation is reasonable in scope, method,
nature and duration. At the request of Investor, each of the Company,
Challenger, and the Family Members shall provide, and cause each of its
directors, officers, employees, agents, contractors or other representatives
with direct involvement in the operations of the Company to provide, a written
certification of compliance with the Policy and with any of the representations
and warranties of the Company, Challenger, and the Family Members under this
Agreement, in a form reasonably satisfactory to Investor.
 
Section 4.8.  Disclosure Controls, Policy and Internal Controls.  Within a
reasonable period of time after the execution of this Agreement and prior to the
Closing Date, the Company shall (and the parties shall cause the Company to):
(a) establish and maintain disclosure controls and procedures designed to ensure
that material information relating to the Company and its subsidiaries is made
known to the Company’s management, including its principal executive officer and
its principal financial officer or persons performing similar functions, to
allow timely decisions regarding required disclosure; (b) establish and maintain
a system of internal control over financial reporting under the supervisions of
the Company's principal executive and financial officers sufficient to provide
reasonable assurance regarding the reliability of the Company’s financial
reporting and the preparation of the Company's financial statements for external
purposes in accordance with IFRS, including, without limitation, policies and
procedures that (i) pertain to maintenance of records that in reasonable detail
accurately and fairly reflect the transactions and dispositions of the assets of
the Company and its subsidiaries, (ii) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial
statements in accordance with IFRS, and that receipts and expenditures of the
Company and its subsidiaries are being made only in accordance with
authorizations of management and directors of the Company, and (iii) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the Company's or its subsidiary’s assets that
could have a material effect on the financial statements; (c) adopt and
implement the Policy; (d) establish and maintain internal policies, procedures
and controls that are reasonably designed to detect and deter violations of the
laws and regulations preventing public or commercial bribery, and (e) adopt
appropriate policies, procedures and controls to ensure that its agents,
representatives and subcontractors understand and comply with the terms and
conditions of the Policy and the abovementioned laws and regulations preventing
public or commercial bribery. The policies, procedures and controls to be
adopted by the Company shall satisfy international standards as determined by
the auditors of the Investor. Specifically, the Policy to be adopted by the
Company shall, at a minimum, include all such standards required to assure that
Investor complies with its obligations under the FCPA. The Company agrees to
comply with the provisions of the Policy in connection with the acquisition,
operation or maintenance of the Company’s assets and business, the transactions
contemplated by this Agreement or any other Transaction Agreement..
 
Section 4.9.  Certifications.  The Investor hereby covenants and agrees to use
commercially reasonable efforts to assist the Company in obtaining the relevant
API certifications or equivalent for each of the Rigs as may be requested by the
customers of the Company.
 
Section 4.10.  Further Assurances.  Each party hereto covenants and agrees to
cooperate and use all commercially reasonable efforts to take, or cause to be
taken, all action and to do, or cause to be done, all things reasonably
necessary, proper or advisable to consummate and make effective the transactions
contemplated by this Agreement, including cooperating fully with the other
parties to obtain all approvals that may be necessary or which may be reasonably
requested by the Company to consummate the transactions contemplated in this
Agreement, and the other Transaction Agreements. In case at any time after the
date hereof any commercially reasonable further action is reasonably necessary
or desirable to carry out the purposes of this Agreement, the parties hereto
shall take such commercially reasonable action.

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ARTICLE V  
 
MISCELLANEOUS
 
Section 5.1.  Notices.  Except as expressly set forth to the contrary in this
Agreement, all notices, requests, or consents provided for or permitted to be
given under this Agreement must be in writing and must be given either by
depositing that writing in the United States mail, addressed to the recipient,
postage paid, and registered or certified with return receipt requested or by
delivering that writing to the recipient in person, by courier, by Electronic
Transmission, or by facsimile transmission; and a notice, request, or consent
given under this Agreement is effective on receipt by the person to receive it.
All notices, requests, and consents to be sent to a party hereto must be sent to
or made at the addresses set forth below such party's signature block hereto or
such other address as that party may specify by notice to the other parties.
 
Section 5.2.  Amendments and Waivers.  This Agreement may not be amended or
modified, and no provisions hereof may be waived, without the written consent of
all parties hereto unless otherwise expressly provided herein. No action taken
pursuant to this Agreement, including any investigation by or on behalf of any
party hereto, shall be deemed to constitute a waiver by the party taking such
action of compliance with any representation, warranty, covenant or agreement
contained herein. The waiver by any party hereto of a breach of any provision of
this Agreement shall not operate or be construed as a further or continuing
waiver of such breach or as a waiver of any other or subsequent breach. No
failure on the part of any party hereto to exercise, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of such right, power or remedy by such
party preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. All remedies hereunder are cumulative and are not
exclusive of any other remedies provided by Applicable Law.
 
Section 5.3.  Entire Agreement.  This Agreement and the other Transaction
Agreements, together with the certificates, documents, instruments and writings
that are delivered pursuant thereto, constitute the entire agreement and
understanding of the parties hereto in respect of its subject matters and
supersedes all prior understandings, agreements, or representations by or among
such parties, written or oral, to the extent they relate in any way to the
subject matter hereof or the transactions contemplated herein. 
 
Section 5.4.  Third Party Rights.  A person who is not a party to this Agreement
has no right under the Contracts (Rights of Third Parties) Act 1999 or otherwise
to enforce any term of this Agreement but this does not affect any right or
remedy of a third party which exists or is available apart from the Contracts
(Rights of Third Parties) Act 1999, or otherwise.
 
Section 5.5.  Governing Law.  THIS AGREEMENT AND THE PERFORMANCE OF THE
TRANSACTIONS AND THE OBLIGATIONS OF THE PARTIES HEREUNDER WILL BE GOVERNED BY
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF ENGLAND AND WALES,
WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW PRINCIPLES.
 
Section 5.6.  Arbitration.
 
A party who desires to submit a Dispute for resolution shall commence the
dispute resolution process by providing the other parties to the Dispute written
notice of the Dispute ("Notice of Dispute"). The Notice of Dispute shall
identify the parties to the Dispute and contain a brief statement of the nature
of the Dispute and the relief requested. The submission of a Notice of Dispute
shall toll any applicable statutes of limitation related to the Dispute, pending
the conclusion or abandonment of dispute resolution proceedings under this
Section 5.6.
 
Any Dispute shall be exclusively and definitively resolved through final and
binding arbitration, it being the intention of the parties that this is a broad
form arbitration agreement designed to encompass all possible disputes. Unless
otherwise agreed by all parties to the Dispute, the place of arbitration shall
be London, England. The arbitration proceedings shall be conducted in the
English language and the arbitrator(s) shall be fluent in the English language.
The arbitration shall be conducted in accordance with the Rules of Arbitration
of the International Chamber of Commerce ("ICC") (as then in effect) (the
"Rules"). The arbitration shall be conducted by three arbitrators, unless all
parties to the Dispute agree to a sole arbitrator within 30 days after the
filing of the arbitration. For greater certainty, for purposes of this Section
5.6, the filing of the arbitration means the date on which the claimant request
for arbitration is received by the other parties to the Dispute. If the
arbitration is to be conducted by a sole arbitrator, then the arbitrator will be
jointly selected by the parties to the Dispute. If the parties to the Dispute
fail to agree on the arbitrator within 30 days after the filing of the
arbitration, then the ICC shall appoint the arbitrator. If the arbitration is to
be conducted by three arbitrators, then each party to the Dispute shall appoint
one arbitrator within 30 days of the filing of the arbitration, and the two
arbitrators so appointed shall select the presiding arbitrator within 30 days
after the latter of the two arbitrators has been appointed by the parties to the
Dispute. If a party to the Dispute fails to appoint its party-appointed
arbitrator or if the two party-appointed arbitrators cannot reach an agreement
on the presiding arbitrator within the applicable time period, then the ICC
shall appoint the remainder of the three arbitrators not yet appointed.
 
The award of the arbitral tribunal shall be final and binding. Judgment on the
award of the arbitral tribunal may be entered and enforced by any court of
competent jurisdiction. All notices required for any arbitration proceeding
shall be deemed properly given if sent in accordance with Section 5.1.
 
All arbitrators shall be and remain at all times wholly impartial, and, once
appointed, no arbitrator shall have any ex parte communications with any of the
parties to the Dispute concerning the arbitration or the underlying Dispute
other than communications directly concerning the selection of the presiding
arbitrator, where applicable.
 
Without limiting the generality of the foregoing, any party to the Dispute may
have recourse to and shall be bound by the Pre-arbitral Referee Procedure (as
defined in the Rules). The arbitral tribunal is authorized to award costs and
attorneys' fees and to allocate them between the parties to the Dispute. The
costs of the arbitration proceedings, including attorneys' fees, shall be borne
in the manner determined by the arbitral tribunal. The award shall include
interest, as determined by the arbitral award, from the date of any default or
other breach of this Agreement until the arbitral award is paid in full.
Interest shall be awarded at the Overdue Rate (as defined in the Rules). The
arbitral award shall be made and payable in United States Dollars, free of any
tax or other deduction. The parties waive their rights to claim or recover, and
the arbitral tribunal shall not award, any punitive, multiple, or other
exemplary damages (whether statutory or common law) except to the extent such
damages have been awarded to a third party and are subject to allocation between
or among the parties to the Dispute. To the extent permitted by law, any right
to appeal or challenge any arbitral decision or award, or to oppose enforcement
of any such decision or award before a court or any governmental authority, is
hereby waived by the parties except with respect to the limited grounds for
modification or non-enforcement provided by any applicable arbitration statute
or treaty.
 
Section 5.7.  Severability.  If any provision of this Agreement is held to be
unenforceable, this Agreement shall be considered divisible and such provision
shall be deemed inoperative to the extent it is deemed unenforceable, and in all
other respects this Agreement shall remain in full force and effect; provided,
however, that if any provision may be made enforceable by limitation thereof,
then such provision shall be deemed to be so limited and shall be enforceable to
the maximum extent permitted by Applicable Law.
 
Section 5.8.  Counterparts.  This Agreement may be executed in any number of
counterparts, with each such counterpart constituting an original and all of
such counterparts constituting but one and the same instrument.

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     IN WITNESS WHEREOF, the parties hereto have executed this agreement as of
the day and year first above written.

 
CHALLENGER LIMITED, acting by:
 
By: /s/ YALMEZ SALAH EL DIN ALI TATANAKI
Name: Yalmez Salah El Din Ali Tatanaki
Title: Director
 
 
By: /s/ ABDULLATIF JANAHI
                                Name: Abdullatif Janahi
Title: Vice Chairman
 

 
ADDRESS FOR NOTICE PURPOSES:
2nd Floor
Sixty Circular Road
Douglas, Isle of Man IMI 1SA
Attention:
Facsimile:
 

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     IN WITNESS WHEREOF, the parties hereto have executed this agreement as of
the day and year first above written.
 
BRONCO MENA INVESTMENTS LLC, acting by:
 
 
By: /s/ D. FRANK HARRISON
Name: D. Frank Harrison
Title: Chief Executive Officer
 
 
ADDRESS FOR NOTICE PURPOSES:
16217 N. May Avenue
Edmond, Oklahoma 73013
United States of America
Attention: David C. Treadwell and Mark Dubberstein
Facsimile: +1 405 285 0478
 

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    IN WITNESS WHEREOF, the parties hereto have executed this agreement as of
the day and year first above written.
 
CHALLENGER GROUP LTD., acting by:
 
By: /s/ ADRIAN ESCHER
Name: Adrian Escher
Title: Director
 
 
By: /s/ MARGARETA ZWEIFEL
Name: Margareta Zweifel
Title: Director
 
 
ADDRESS FOR NOTICE PURPOSES:
Clarendon House
2 Church Street
P.O. Box HM 1022
Hamilton HM DX, Bermuda
 
or
 
Kendris Private AG
Muehlemattstrasse 56
5001 Aarau
Switzerland
Attention: Margareta Zweifel
Facsimile: +41584505852

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     IN WITNESS WHEREOF, the parties hereto have executed this agreement as of
the day and year first above written.

 
/s/ HASSAN SALAH EL DIN ALI TATANAKI
HASSAN SALAH EL DIN ALI TATANAKI

ADDRESS FOR NOTICE PURPOSES:

Challenger Building
1 El Moshier Ahmed Ismail Street
Heliopolis 11361
Cairo, Egypt
Facsimile: +20 2 267 6122
 
/s/ FAIEZ SALAH EL DIN ALI TATANAKI
FAIEZ SALAH EL DIN ALI TATANAKI

ADDRESS FOR NOTICE PURPOSES:

Challenger Building
1 El Moshier Ahmed Ismail Street
Heliopolis 11361
Cairo, Egypt
Facsimile: +20 2 267 6122
 
/s/ YALMEZ SALAH EL DIN ALI TATANAKI
YALMEZ SALAH EL DIN ALI TATANAKI

ADDRESS FOR NOTICE PURPOSES:

Challenger Building
1 El Moshier Ahmed Ismail Street
Heliopolis 11361
Cairo, Egypt
Facsimile: +20 2 267 6122

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Schedules and Exhibits Omitted:

Exhibits Omitted:
1. Exhibit A - Form of Management Services Agreement (to be agreed)
2. Exhibit B - Form of Master Services Agreement (to be agreed)
3. Exhibit C - Rig Assignment (to be agreed)
4. Exhibit D - Rigs and Rig Specifications
5. Exhibit E - Form of Shareholders’ Agreement
6. Exhibit F - Form of Legal Opinion
Schedules Omitted:
1. Schedule of Challenger Group Shareholders
2. Schedule 3.1(a) - Subsidiaries, etc.
3. Schedule 3.1(b) - Directors and Officers
4. Schedule 3.1(d) - Challenger Shareholders
5. Schedule 3.1(k) - Asset listing
6. Schedule 3.1(l) - Certain Agreements
7. Schedule 3.2(e) - Consents

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