exv10w1



 





Exhibit 10.1




(1) Challenger Group Limited




(2) MENA Oil Drilling Company Limited




(3) Venture Capital Bank B.S.C.(c)




(4) the Individuals listed on Schedule 2 hereof




(5) Bronco MENA Investments LLC




-and-




(6) Challenger Limited




 






SHAREHOLDERS’ AGREEMENT

relating to

Challenger Limited




 







 









 








CONTENTS




	 	 	 	 	 
	1. DEFINITIONS
	 	 	2	 
	 
	2. COMPLETION
	 	 	4	 
	 
	3. MANAGEMENT OF THE COMPANY
	 	 	4	 
	 
	4. BOARD OF DIRECTORS
	 	 	4	 
	 
	5. BUDGETS AND INFORMATION
	 	 	6	 
	 
	6. MATTERS REQUIRING CONSENT
	 	 	8	 
	 
	7. WORKING CAPITAL
	 	 	10	 
	 
	8. COVENANTS BY THE COMPANY
	 	 	11	 
	 
	9. DISTRIBUTION POLICY
	 	 	11	 
	 
	10. PREEMPTIVE RIGHTS
	 	 	11	 
	 
	11. TRANSFER OF SHARES
	 	 	12	 
	 
	12. TAG-ALONG
	 	 	15	 
	 
	13. DRAG-ALONG
	 	 	15	 
	 
	14. DEEMED SALE NOTICES
	 	 	17	 
	 
	15. CHANGE OF CONTROL OF CHALLENGER GROUP
	 	 	19	 
	 
	16. THE OPTION PLAN
	 	 	20	 
	 
	17. REGISTRATION RIGHTS
	 	 	20	 
	 
	18. TERMINATION
	 	 	21	 
	 
	19. CONFIDENTIALITY
	 	 	22	 
	 
	20. ADDITIONAL COVENANTS BY THE PARTIES
	 	 	22	 
	 
	21. REPRESENTATIONS AND WARRANTIES
	 	 	23	 
	 
	22. TERMINATION OF EXISTING AGREEMENTS
	 	 	25	 
	 
	23. NO PARTNERSHIP
	 	 	25	 
	 
	24. ASSIGNMENT
	 	 	25	 
	 
	25. AMENDMENT AND WAIVER
	 	 	26	 
	 
	26. NOTICES
	 	 	26	 






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	27. INVALIDITY
	 	 	26	 
	 
	28. EXECUTION
	 	 	26	 
	 
	29. COSTS
	 	 	26	 
	 
	30. ENTIRE AGREEMENT
	 	 	27	 
	 
	31. THIRD PARTY RIGHTS
	 	 	27	 
	 
	32. GOVERNING LAW AND ARBITRATION
	 	 	27	 
	 
	33. OBLIGATION OF FAMILY MEMBERS
	 	 	28	 






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     THIS SHAREHOLDERS’ AGREEMENT (this “Agreement”) is made as a deed on January 4, 2008.



     BETWEEN



     (1) CHALLENGER GROUP LIMITED, registered in Bermuda under company number 38486, whose
registered office is at Clarendon House, 2 Church Street, P.O. Box HM 1022, Hamilton HM DX, Bermuda
(“Challenger Group”);



     (2) THE INDIVIDUALS whose names are set forth on Schedule 2 hereof (the “Family Members”);



     (3) MENA OIL DRILLING COMPANY LIMITED, registered in the Isle of Man under company number
118091C, whose registered office is at Skanco Court, Cooil Road, Braddan, Isle of Man IM2 2SR
(“MENA Company”);



     (4) VENTURE CAPITAL BANK B.S.C.(C), a closed joint stock company incorporated under the laws
of the Kingdom of Bahrain, whose registered office is at P.O. Box 11755, Manama, Kingdom of Bahrain
(the “VC Bank,” and together with MENA Company, “MENA”);



     (5) BRONCO MENA INVESTMENTS LLC, a limited liability company organized under the laws of the
State of Delaware, United States of America, whose office is at 16217 N. May Avenue, Oklahoma City,
Oklahoma, 73013, United States of America (“Bronco”); and



     (6) CHALLENGER LIMITED, a company registered in the Isle of Man under company number 55967,
with registered office at 2nd Floor, Sixty Circular Road, Douglas, Isle of Man IMI 1SA (the
“Company”).



BACKGROUND




     A. The Company is a private limited company registered by shares.



     B. Challenger Group, MENA Company and VC Bank held Shares in the Company prior to the entering
into of this Agreement and shall continue to hold Shares in the Company in accordance with Schedule
1.



     C. The Family Members, MENA Company and the Company have entered into a Shareholders’
Agreement dated 20 October 2006 (the “Original Agreement”) governing their relationship as
shareholders in the Company.



     D. Bronco has agreed to subscribe for new Shares in the Company upon terms and subject to the
conditions set out in the Subscription Agreement to be entered into on or prior to the date of this
Agreement.



     E. It is a condition to the completion of the subscription of the Shares pursuant to the
Subscription Agreement that the Existing Shareholders and the Family Members terminate the Original
Agreement, and certain other agreements between the parties, and that the Existing Shareholders,
the Family Members and the Company enter into this Agreement with Bronco.



     F. The Company, the Existing Shareholders, the Family Members and Bronco wish to organise
their relationship as shareholders of the Company upon and subject to the terms and conditions set
forth in this Agreement.



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1. DEFINITIONS




     1.1 In this Agreement unless the context requires otherwise:



     “Affiliate” of a person means (i) a person that, directly or indirectly, through one or more
intermediaries, controls or is controlled by or is controlled by a person that controls, such
person, (ii) any trust or estate in which such person has a beneficial interest or as to which such
person serves as a trustee or in another fiduciary capacity, or (iii) any spouse, parent or lineal
descendent of such person. As used in this definition, “control” means possession, directly or
indirectly, of the power to direct or cause the direction of management or policies, whether
through ownership of securities, partnership or other ownership interests, by contract or
otherwise.



     “Ancillary Agreements” means the Subscription Agreement, the Repurchase Agreement, the
Services Agreement, the Consulting Agreement, and any other document contemplated thereby, with the
exception of this Agreement.



     “BD Director(s)” means one or more Directors designated by Bronco in accordance with clause
4.



     “Board” means the board of directors of the Company from time to time.



     “Business” means the business of providing contract oil and gas land drilling and workover
services, and any other lawful business operations, carried on by the Company.



     “Business Day” means a day on which clearing banks are open for business in the Isle of Man,
the Kingdom of Bahrain and banking institutions are open for business in Oklahoma City, Oklahoma.



     “CG Director(s)” means one or more Directors designated by Challenger Group in accordance with
clause 4.



     “Compensation Committee” means the committee of the Board established in accordance with
clause 4.11.



     “Consulting Agreement” means that certain Management Services Agreement to be entered into on
or prior to the date of this Agreement by and between an Affiliate of Bronco and the Company in
relation to the management and operation of the Company.



     “Controlling Interest” in relation to a person, means the ownership by that person and his or
its Affiliates of Shares carrying the right to more than fifty percent (50%) of the total number of
votes which may be cast at a general meeting of the shareholders of the Company.



     “Completion” means the date on which each of the conditions set forth in clause 2 have been
satisfied or waived by the appropriate party hereto.



     “Directors” means the members of the Board and “Director” means any one of them.



     “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.



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     “Existing Shareholders” means Challenger Group, MENA Company, and VC Bank.



     “Existing Shares” means the Shares in the Company held by the Existing Shareholders
immediately prior to the consummation of the transactions contemplated by the Subscription
Agreement and the Repurchase Agreement, as set forth on Schedule 1.



     “Family Members” means the individuals set out in Schedule 2.



     “FCPA” means the U.S. Foreign Corrupt Practices Act of 1977, as amended.



     “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.



     “Group” means the Company and its subsidiaries (if any) from time to time and as set out in
the corporate structure at Schedule 3.



     “MOD Director(s)” means one or more Directors designated by MENA Company in accordance with
clause 4.1.



     “Option Plan” means the customary stock option plan to be adopted by the Company pursuant to
clause 16.



     “person” means any individual, corporation (including any non-profit corporation), general or
limited partnership, limited liability partnership or company, firm, joint venture, association,
joint-stock company, estate, trust, unincorporated organization, entity, labor union or other
governmental or regulatory body or entity, whether foreign or domestic.



     “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.



     “Repurchase” means the use of Bronco’s cash contribution pursuant to the Subscription
Agreement to fund a pro rata repurchase pursuant to the Repurchase Agreement of certain of the
Existing Shares held by the Existing Shareholders in accordance with Schedule 1.



     “Repurchase Agreement” means that certain Repurchase Agreement to be entered into on or prior
to the date of this Agreement by and between Challenger Group, MENA Company, VC Bank and the
Company in relation to the Repurchase.



     “Services Agreement” means that certain Master Services Agreement to be entered into on or
prior to the date of this Agreement by and between an Affiliate of Bronco and the Company in
relation to the operation of certain of the Company’s drilling rigs.



     “Shareholders” means Challenger Group, MENA Company, VC Bank, and Bronco and such other
investors who acquire or subscribe for Shares after the date of this Agreement. Except as
otherwise provided herein, for purposes of this Agreement, MENA Company and VC Bank shall be
treated as a single Shareholder. At the time any person ceases to hold any Shares, such person
shall no longer be a Shareholder for the purposes of this Agreement.



     “Shares” means the shares of capital stock of the Company.



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     “Shari’ah Compliant” means compliant with the principles of Shari’ah law as determined by the
Shari’ah Supervisory Board of VC Bank.



     “Subscription Agreement” means an agreement to be entered into on or prior to the date of this
Agreement by and among Bronco, the Company, Challenger Group and the Family Members pursuant to
which Bronco has agreed to subscribe for Shares.



     “Transfer” means any sale, pledge, or other transfer, whether voluntary, involuntary, by gift,
by operation of law, court order, or otherwise.



     1.2 Reference to any statute or statutory provision includes a reference to that statute or
statutory provision as from time to time amended, extended or re-enacted.



     1.3 Reference to any gender includes the other genders and words denoting the singular include
the plural and vice versa.



     1.4 Unless the context requires otherwise, reference to a clause, section, article, paragraph
or schedule is to a clause, section, article, paragraph or schedule (as the case may be) of or to
this Agreement.



     1.5 The headings in this Agreement are for ease of reference only and shall not affect its
construction or interpretation.



     1.6 Words and expressions defined in the Subscription Agreement shall have the same meaning
when used in this Agreement.



2. COMPLETION




     Completion shall occur upon the Closing (as defined in the Subscription Agreement).



3. MANAGEMENT OF THE COMPANY




     3.1 Each of the Shareholders agrees to take all necessary actions to ensure compliance with
the provisions of this Agreement, including without limitation, to use its best efforts to cause
the Directors designated by such Shareholder to be present at any and all Board meetings.



     3.2 Each of the Shareholders agrees that the Company shall enter into Ancillary Agreements as
contemplated by the Subscription Agreement.



     3.3 The Shareholders agree that the Board shall have full power to perform any act in
pursuance of the Business in accordance with the provisions hereof, subject to (a) the restrictions
set out in the applicable law; (b) those matters set out in this Agreement which are expressly
reserved to the decision of the Shareholders.



4. BOARD OF DIRECTORS




     4.1 The business and affairs of the Company shall be managed by and under the supervision of
the Board. Unless and until otherwise determined by the approval of all Shareholders, upon
Completion the number of Directors shall be eight (8). Each of the Shareholders shall vote all of
the Shares now or hereafter registered in its name in favor of and in order to (i) elect as
Directors of the Company each of the persons designated by each of the other Shareholders in
accordance with this clause 4.1, (ii) to continue to vote for the persons so designated from time
to time by the other



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Shareholders, (iii) to remove any such person so designated by a Shareholder in accordance
with the request of such Shareholder, and (iv) to elect any successor designated by such
Shareholder upon the removal, resignation, or unavailability of any Director designated by any
Shareholder in accordance with this clause 4.1, from the date hereof until the termination of this
Agreement. In furtherance of the foregoing, each Shareholder agrees to vote its Shares to promptly
call a meeting of the Board and/or of the Shareholders of the Company as necessary to facilitate
the prompt election or removal of Directors and to take or cause to be taken all such other actions
as may be necessary or desirable to effect the intent of this provision as promptly as practicable.
The provisions of this clause 4.1 shall constitute the granting of proxies by each Shareholder to
each other Shareholder for the purposes of ensuring compliance with the provisions of this clause
4.1, which proxies are coupled with an interest and shall be irrevocable for the term of this
Agreement. It is agreed and understood that monetary damages would not adequately compensate an
injured party for the breach of this clause 4.1 by any party, that this clause 4.1 shall be
specifically enforceable, and that any breach or threatened breach of this clause 4.1 shall be the
proper subject of a temporary or permanent injunction or restraining order. Further, each party
hereto waives any claim or defense that there is an adequate remedy at law for such breach or
threatened breach. The Shareholders shall be entitled to designate persons to serve as Directors
as follows:



     MENA Company, and its successors and assigns to whom Shares held by MENA Company are
Transferred pursuant to a Permitted Transfer, may collectively designate a total of two (2) persons
to serve as Directors and their alternates by giving notice to the Company at its registered
office. Such MOD Directors may be designated for removal as Directors by MENA Company by giving
notice to the Company at its registered office and naming any other person whom MENA Company wishes
to designate to replace such Director;



     Challenger Group, and its successors and assigns to whom Shares held by Challenger Group are
Transferred pursuant to a Permitted Transfer, may collectively designate a total of four (4)
persons to serve as Directors and their alternates by giving notice to the Company at its
registered office. Such CG Directors may be designated for removal as Directors by Challenger
Group by giving notice to the Company at its registered office and naming any other person whom
Challenger Group wishes to designate to replace such Director; and



     Bronco, and its successors and assigns to whom Shares held by Bronco are Transferred pursuant
to a Permitted Transfer, may collectively designate a total of two (2) persons to serve as
Directors and their alternates by giving notice to the Company at its registered office. Such BD
Directors may be designated for removal as Directors by Bronco by giving notice to the Company at
its registered office and naming any other person whom Bronco wishes to designate to replace such
Director.



     4.2 Any Shareholder designating for removal any Director(s) designated by it shall be
responsible for, and shall indemnify the Company against, any claim by those Directors for unfair
or wrongful dismissal arising out of his removal from office.



     4.3 The Company shall enter into an indemnification agreement with each of the Directors on or
prior to the date of this Agreement. Such indemnification agreement shall indemnify and hold
harmless each of the Directors against any liability, loss, damage, claim or expense (including
reasonable and properly documented out-of-pocket legal fees and expenses) and fines or penalties of
whatever nature arising out of or in connection with a Director’s activities as a member of the
Board, except to the extent such liability, loss, damage, claim or expense is caused by the fraud,
gross negligence or wilful misconduct of a Director.



5









 





     4.4 Board meetings shall be held not less than four (4) times a year, except that a Director
may at any time call a Board meeting by giving at least seven (7) Business Days’ written notice to
the Company and each other Director to enable the meeting to be convened.



     4.5 The Board shall elect a Director to serve as chairman of the Board at all meetings of the
Board. The Director elected as chairman of the Board shall not have any additional voting power by
virtue of being elected chairman.



     4.6 All Board meetings shall be held at a location convenient to the Directors, acting
reasonably.



     4.7 The quorum for holding Board meetings shall consist of three (3) Directors one of which
shall be an MOD Director, one of which shall be a BD Director and one of which shall be a CG
Director or their respective alternates.



     4.8 Any alternate Director may attend a meeting of the Board in lieu of any Director elected
by the same Shareholder who elected such alternate Director.



     4.9 A resolution in writing (which may be on one or more identical documents) signed by all
Directors shall be as valid and effective as if it had been passed at a duly convened Board
meeting.



     4.10 Travel expenses and any other reasonable expenses incurred by the Directors or their
alternates in attending meetings of the Board shall be reimbursed by the Company in accordance with
the policies adopted by the Board from time to time.



     4.11 The Board shall establish a Compensation Committee. The Compensation Committee, and any
other committees created by the Board, shall be comprised of at least three (3) Directors and each
of MENA Company, Challenger Group and Bronco shall be entitled to appoint at least one of its
Directors to serve on such committee. The Compensation Committee shall approve senior management’s
compensation, review bonus plans and approve all equity awards pursuant to the Option Plan or
otherwise.



     4.12 The Company shall acquire and maintain key person life insurance (which shall be Shari’ah
Compliant for as long as MENA is a Shareholder) on select senior management in an amount and on
such other terms as are satisfactory to the Board. Any proceeds of such policies shall be payable
to the Company and shall be used in any manner deemed appropriate by the Board.



     4.13 The rights of a Shareholder pursuant to this clause 4 shall cease with respect to such
Shareholder at such time as such Shareholder owns less than 5% of the issued and outstanding Shares
of the Company.



5. BUDGETS AND INFORMATION




     5.1 Information Rights. The Company shall:



          5.1.1 prepare and submit to each Shareholder, as soon as practicable, but in any event, within
sixty (60) calendar days after the end of each fiscal year of the Company, consolidated balance
sheets of the Company and its subsidiaries, as of the end of such fiscal year, and the consolidated
statements of income and consolidated statements of cash flows of the Company and its subsidiaries
for such year, prepared in accordance with International Financial Reporting Standards
(“IFRS”), all in reasonable detail and audited by independent public accountants of
international standing selected by the Company;



6









 





          5.1.2 prepare and submit to each Shareholder, as soon as practicable, but in any event, within
thirty (30) calendar days after the end of each of the first three (3) quarters of each fiscal year
of the Company, consolidated balance sheets of the Company and its subsidiaries as of the end of
such quarter, and consolidated statements of income and consolidated statements of cash flows of
the Company and its subsidiaries for such quarter, prepared in accordance with IFRS, all in
reasonable detail and reviewed by independent accountants of international standing selected by the
Company;



          5.1.3 prepare and submit to each Shareholder, as soon as practicable, but in any event, within
thirty (30) calendar days after the end of each calendar month that is not a one of the four
calendar months completing a quarter of each fiscal year of the Company, an unaudited consolidated
statement of income for the Company and its subsidiaries as of the end of such month, and
consolidated statements of income and consolidated statements of cash flows of the Company and its
subsidiaries for such month, all in reasonable detail;



          5.1.4 prepare and submit to each Shareholder, as soon as practicable, but in any event, within
thirty (30) calendar days after the end of each fiscal year of the Company, an annual review, a
capital budget, and a business plan as approved by the Board for the Company’s next fiscal year,
prepared on a monthly basis, including balance sheets and income statements for such months and, as
soon as prepared, any other budgets or revised budgets prepared by the Company;



          5.1.5 prepare and submit to each Shareholder monthly executive summaries of the Company’s
activities within thirty (30) days after the end of each month;



          5.1.6 the financial statements called for in this clause 5.1 shall include (i) an instrument
executed by the President and Chief Financial Officer of the Company and certifying that such
financial statements were prepared in accordance with IFRS consistently applied with prior practice
for earlier periods (with the exception of footnotes that may be required by IFRS) and fairly
present the financial condition of the Company and its results of operations on a consolidated
basis for the period specified, subject to year-end audit adjustments, and (ii) a report of the
Chief Financial Officer and President of the Company analyzing all material variations from the
then-applicable operating plan from the corresponding period;



          5.1.7 supply such other financial information relating to the financial condition, business,
prospects or corporate affairs of the Company as the Shareholder or any assignee of the Shareholder
may from time to time request; and



          5.1.8 supply to each Shareholder within thirty (30) days of request such regular management
and financial information as they may from time to time reasonably require.



     5.2 Visitation and Inspection. The Company shall permit each Shareholder, at such
Shareholder’s expense, to visit and inspect the Company’s and its subsidiaries’ properties, to
examine their books of account and records and to discuss the Company’s affairs, finances and
accounts with its officers, all at such reasonable times as may be requested by a Shareholder. The
provisions of this clause 5.2 shall not be in limitation of any rights which any Shareholder may
have with respect to the books and records of the Company and its subsidiaries, or to inspect their
properties or discuss their affairs, finances or accounts, under applicable law.



     5.3 Audit Rights and Certifications. In the event that Bronco has a reasonable basis
to believe that the Company or any of the Existing Shareholders have taken or failed to take any
action in violation of the representations and warranties of the Company and the Existing
Shareholders under this Agreement or that may otherwise subject Bronco or any of its Affiliates (or
any of their officers, directors, employees or agents) to liability under the FCPA, Bronco shall
have the right, upon written notice and at Bronco’s expense, to conduct an investigation and audit
of the Company or the Existing



7









 







Shareholders. The Company and the Existing Shareholders shall
cooperate fully with such investigation, provided that the investigation is reasonable in scope,
method, nature and duration. At the request of Bronco, the Company and the Existing Shareholders
shall provide, and cause each of its directors, officers, employees, agents, contractors or other
representatives with direct involvement in the operations of the Company, a written certification
of compliance with the Policy and any of the representations and warranties of the Company and the
Existing Shareholders under this Agreement, in a form reasonably satisfactory to Bronco.



          5.3.1 Disclosure Controls and Procedures. Within a reasonable period of time after
Completion, the Company shall (and the Shareholders 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 Bronco. Specifically, the Policy to be adopted by the
Company shall, at a minimum, include all such standards required to assure that Bronco 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 and by any of the Ancillary Agreements.



6. MATTERS REQUIRING CONSENT




     6.1 The Shareholders agree that, without the prior written consent of any two of Challenger
Group, MENA Company, and Bronco (or at such time as only two of Challenger Group, MENA Company, and
Bronco remain as Shareholders of the Company, both of the remaining parties), the Company shall
not, except as contemplated herein or specifically approved pursuant to any Ancillary Agreement:



          6.1.1 change or alter any of the Company’s constitutional documents, including the memorandum
and articles of association, this Agreement and the Ancillary Agreements;



          6.1.2 authorise the creation, issue or allotment of shares of any class having relative rights
or preferences superior to or on a parity with the shares in the Company or grant any option,
warrant, pre-emption or other right over any of the Company’s shares or any other security, except
pursuant to the Option Plan;



8









 





          6.1.3 increase or decrease the registered or authorized share capital of the Company;



          6.1.4 purchase or redeem any shares of the Company, other than pursuant to the Repurchase or
existing or future agreements between the Company and its officers, employees, directors or
consultants that have been approved in accordance with this clause 6.1, that provide for the
repurchase of Shares upon the occurrence of certain events, such as termination of services;



          6.1.5 take any action that reclassifies any outstanding Shares into shares having preferences
superior to or on parity with the other shares in the Company;



          6.1.6 transact a Deemed Liquidation (as defined herein) or other transaction in which fifty
percent or more of the voting power of the Company is transferred;



          6.1.7 appoint or remove any directors or officers other than in accordance with this Agreement
or decrease or increase the Board beyond the numbers provided for in this Agreement;



          6.1.8 cease to carry on the Business or make any material change in the nature of the
Business;



          6.1.9 do or permit or suffer to be done any act or thing whereby the Company may be wound up
(whether voluntarily or compulsorily);



          6.1.10 liquidate or dissolve the Company;



          6.1.11 declare or pay any dividend or otherwise make any distribution on account of any of the
Company’s shares or redeem, purchase or acquire the Company’s own shares, other than pursuant to
the Repurchase;



          6.1.12 enter into any transaction with an Affiliate of the Company;



          6.1.13 approve or adopt the Company’s annual budget or any modifications to it;



          6.1.14 incur any material expenditure (including the payment of executive and key employee
compensation) or indebtedness not contained or contemplated in the annual budget agreed by the
Shareholders;



          6.1.15 appoint any new chief executive officer or chairman of the Board or delegate any powers
of the Board or the Directors;



          6.1.16 enter into any contract or transaction or arrangement which obliges the Company to pay
US$150,000 or more over the term of such contract, transaction or arrangement, and where such
contract, transaction or arrangement is outside the then current budget of the Company;



          6.1.17 subscribe for, purchase, acquire or dispose of any shares, securities, assets or
debentures in any company or other body and procure that no member of the Group shall engage in
such activity;



          6.1.18 cause to be terminated any agreement which may be in place from time to time between
(a) the Company, on the one hand, and (b) MENA Company, VC Bank or Bronco, on the other;



          6.1.19 enter into any new indebtedness or banking facilities or any other arrangements which
are not Shari’ah Compliant;



9









 





          6.1.20 create any charge, mortgage, debenture, lien, pledge, security or other encumbrance
over the whole or any part of its undertaking, property and assets;



          6.1.21 sell, lease, transfer or otherwise dispose of the whole of its undertaking, property or
assets, or any part which is substantial in relation to its total undertaking, property and assets;



          6.1.22 hold any meeting of Shareholders or purport to transact any business at any such
meeting, or pass or seek to pass any resolution of Shareholders other than in accordance with this
Agreement;



          6.1.23 increase the number of Shares reserved for issuance under the Company’s Option Plan or
create any new equity incentive plan or benefit plan;



          6.1.24 alter the fiscal year-end of the Company for financial reporting or tax purposes; or



          6.1.25 agree to do any of the above,



          and the Shareholders shall each duly exercise all such rights and powers (direct or indirect
as the case may be) so that any such matters which are approved as aforesaid are duly implemented
and given effect to by the Company, whether through their direct or indirect holding of Shares in
the Company, their direct or indirect appointment of Directors, officers or representatives or
otherwise.



7. WORKING CAPITAL



     7.1 The cash subscription amount paid to the Company by Bronco pursuant to the Subscription
Agreement shall be used to fund the Repurchase pursuant to the terms of the Repurchase Agreement.



     7.2 If the Company may require further finance to fund its projected cash requirements under
its business plan or new opportunities, the Directors on behalf of the Company may, subject to any
limitations imposed by them from time to time and subject to matters requiring consent under clause
6.1, in a manner that is Shari’ah Compliant as long as MENA is a Shareholder, borrow additional
sums from commercial banks on the most favourable terms available as to repayment and security
compatible with its needs, but shall not allow any prospective lender the right to participate in
the share capital of the Company or otherwise in its business as a condition or term of any loan or
advance.



     7.3 If at any time the Board determines that additional working capital is required by the
Company, it shall provide written notice to the Shareholders, giving details of the amount of
additional working capital and the purpose for which it is required. In the event that all the
Shareholders agree with the Board that additional financing shall be obtained through a
Shareholder’s loan, then, unless otherwise agreed on a case-by-case basis, each Shareholder’s share
of such loan shall be in proportion to its registered shareholding in the Company. Loans advanced by the
Shareholders shall be repaid in accordance with the terms agreed upon between the Shareholders and
the Company.



     7.4 The Company shall offer each Shareholder the right to participate pro rata in any equity
financings (including stock appreciation rights, phantom stock or similar rights) of any subsidiary
of the Company or any entity created by or spun-out from the Company.



10









 





8. COVENANTS BY THE COMPANY




     8.1 The Company shall, so far as it lawfully may, be bound by and comply with the terms and
conditions of this Agreement insofar as the same relate to the Company.



     8.2 The Company shall, during the term of this Agreement:



          8.2.1 carry on and conduct its affairs in a proper and efficient manner;



          8.2.2 take such steps as are required to protect the Business and the goodwill of the
Business;



          8.2.3 maintain adequate comprehensive insurance from an internationally recognized insurer
covering all insurable assets of the Company which shall name the Company as the beneficiary under
such insurance policy, which insurance shall be Shari’ah Compliant for so long as MENA is a
Shareholder;



          8.2.4 not make any payments in respect of any personal expenses of Challenger Group or the
Family Members or make any loans to a Shareholder or a Family Member; and



          8.2.5 keep its books and accounts so as to reflect a true and fair view of the financial and
trading position of the Company.



9. DISTRIBUTION POLICY




     Within 90 days after the end of each taxable year of the Company in which the Company has
taxable income, upon the reasonable prior written request of Bronco, cash distributions shall be
made pro rata to all the Shareholders in such an amount that Bronco’s pro rata share of each annual
distribution is at least equal to the sum of Bronco Drilling Company, Inc.’s consolidated U.S. tax
liability (including Bronco) arising, as it relates to the Company, solely in respect of Bronco’s
ownership of Shares for such taxable year (which tax liability, for the purposes of this clause 9
shall be calculated to equal the product of (1) Bronco’s share of the Company’s taxable income for
such taxable year, multiplied by (2) the combined maximum federal and applicable state and local
income tax rates applicable to individual taxpayers in the State of Oklahoma for such taxable year
(provided that such combined income tax rates shall not exceed 35%) taking into account, if
applicable, the deduction of, or credit for, foreign, state, and local income taxes for federal
income tax purposes and whether any portion of such taxable income qualifies for the reduced rates
applicable to long term capital gains).



10. PREEMPTIVE RIGHTS




     10.1 Preemptive Right. Subject to the terms and conditions specified in this clause
10, the Company hereby grants to each Shareholder a right to subscribe for and purchase such
Shareholder’s pro rata share, in whole or in part, of issuances by the Company of any shares of, or
securities convertible into or exercisable for any shares of, any class of its or any of its
subsidiaries’ capital stock (“Future Shares”). For purposes of this clause 10, a Shareholder’s
“pro rata share” of Future Shares shall be a fraction, the numerator of which is the number of
Shares held by such Shareholder (assuming full conversion and exercise of all outstanding
convertible or exercisable securities, immediately prior to the issuance of Future Shares) and the
denominator of which is the total number of Shares outstanding (assuming full conversion and
exercise of all outstanding convertible or exercisable securities) immediately prior to the
issuance of Future Shares. Each time the Company proposes to offer any Future Shares, the Company
shall first make an offering of such Future Shares



11









 







to each Shareholder in accordance with the
following provisions:


          10.1.1 The Company shall deliver a notice (an “Offer Notice”) to each
Shareholder stating (i) the Company’s bona fide intention to offer such Future Shares, (ii) the
number of such Future Shares to be offered, and (iii) the price and summary of the terms upon which
it proposes to offer such Future Shares.



          10.1.2 Each Shareholder may elect to subscribe for and purchase, at the price and on the terms
specified in the Offer Notice, (i) up to such Shareholder’s pro rata share of the Future Shares and
(ii) such additional number of the Future Shares as such Shareholder indicates it is willing to
purchase should the other Shareholders subscribe for less than their respective pro rata Future
Shares (for each Shareholder, the “Additional Portion”) by notifying the Company in writing within
fifteen (15) Business Days from the date the Offer Notice is given by the Company.



          10.1.3 If the aggregate number of Future Shares subscribed for pursuant to clause 10.1.2
above is less than the aggregate number of Future Shares for which all Shareholders are entitled to
subscribe, then each Shareholder who has subscribed for an Additional Portion pursuant to
clause 10.1.2 above shall be entitled to purchase, in addition to such Shareholder’s pro rata
share, the Additional Portion subscribed for by such Shareholder; provided, however, that if the
Additional Portions subscribed for by all Shareholders exceed the difference obtained by
subtracting (x) the number of Future Shares subscribed for by all Shareholders from (y) the
aggregate number of Future Shares for which all Shareholders are entitled to subscribe (the
“Available Additional Portion”), then each Shareholder who has subscribed for an Additional Portion
shall be entitled to purchase only that portion of the Available Additional Portion as such
Shareholder’s pro rata share bears to the aggregate pro rata share for all Shareholders who
subscribed for an Additional Portion, subject to rounding by the Board to the extent it reasonably
deems necessary and equitable. To the extent that Future Shares are not purchased by the
Shareholders as provided in clause 10.1.2 and this clause 10.1.3, the Company may, during the
ninety (90) calendar days following the expiration of the period provided in clause 10.1.2, offer
the remaining unsubscribed portion of such Future Shares to any person or persons at a price not
less than and upon terms no more favourable than those specified in the Offer Notice. If the
Company does not enter into an agreement for the sale of the Future Shares within such period, or
if such agreement is not consummated within thirty (30) Business Days of the execution thereof, the
right provided in this clause 10 shall be deemed to be revived and such Future Shares shall not be
offered unless first reoffered to the Shareholders in accordance herewith.



          10.2 Exclusions. The right of first offer in this clause 10 shall not be applicable
to (i) the Shares issued to Bronco pursuant to the Subscription Agreement, (ii) securities issued
as a dividend or distribution proportionately on all Shares; (iii) securities issued in connection
with any share split of or share dividend proportionately on all Shares; (iv) securities issued in
connection with a bonafide business acquisition of or by the Company (whether by merger, consolidation, sale of
assets, sale or exchange of shares or otherwise), provided such acquisition is approved in
accordance with the terms and provisions of this Agreement; (v) securities validly issued pursuant
to the Option Plan; and (vi) securities issued upon the exercise of warrants or other convertible
securities outstanding as of the date hereof.



          10.3 No Adverse Effect. The exercise or non-exercise of the rights of any Shareholder
set forth in this clause 1010 to participate in one or more purchases of Future Shares shall not
adversely affect its rights to participate in subsequent purchases of Future Shares.



11. TRANSFER OF SHARES




     11.1 Restriction on Transfer. During the term of this Agreement, all of the Shares
now owned or hereafter acquired by a Shareholder and all of the equity interests of Challenger
Group owned by the Family Members and each of their respective successors and assigns (the “Founder
Interests”) shall be subject to the terms and conditions of this Agreement. No Transfer of Shares



12









 





pursuant to this Agreement resulting in Challenger Group holding less than thirty-five percent
(35%) of the Shares of the Company may occur prior to 20 October 2010. Upon any Transfer of Shares
or Founder Interests permitted hereunder, that Transfer shall become effective and recognized only
if: (i) the person to whom the Transfer is to be made pays all expenses incurred by the Company in
connection with such Transfer, (ii) the person to whom the Transfer is to be made executes a deed
of adherence whereby that person or entity becomes a party to this Agreement and becomes subject to
the rights and obligations arising under this Agreement, and executes such further instruments as
the Company may in its reasonable discretion request, (iii) the person to whom the Transfer is to
be made satisfies to the Company that the Transfer meets all requirements for Transfers of Shares
and/or Founder Interests under this Agreement and any applicable agreement or law, and (iv) the
person to whom the Transfer is to be made and the proposed transferor present to the Company any
required share certificate or certificates with respect to the Shares or the Founder Interests so
being transferred (collectively, “Conditions to Transfer”). Strict compliance shall be required
with each and every provision of this Agreement. No Transfer of the Shares or the Founder
Interests shall be valid unless it is made pursuant to the terms and conditions of this Agreement.
Notwithstanding the foregoing, (a) each Shareholder shall have the right to Transfer, without
compliance with the terms and conditions of this Agreement, all or part of the Shares to an
Affiliate of such Shareholder and (b) each Family Member shall have the right to Transfer, without
compliance with the terms and conditions of this Agreement, all or part of the Founder Interests to
a corporation, partnership or other entity, provided such corporation, partnership or other entity
is wholly owned by an Affiliate of such Family Member (each, a “Permitted Transfer”); provided,
however, the person or entity to whom a Permitted Transfer is made meets all of the Conditions to
Transfer.



     11.2 Right of First Refusal and Co-Sale. In the event that a Shareholder or any
Family Member desires to Transfer (a “Transferring Holder”) any Shares or Founder Interests, other
than pursuant to a Permitted Transfer, and has received a bona fide offer from an unaffiliated
third party to buy such Shares or Founder Interests, the Transferring Holder shall first notify the
Company and each other Shareholder in writing of the proposed sale or transfer (the “Transfer
Notice”). Each Transfer Notice shall contain all material terms of the proposed Transfer,
including, without limitation, a copy of the offer received, the name and address of the
prospective purchaser (or transferee), the purchase price and terms of payment, the date and place
of the proposed Transfer, and the number and description of Shares or Founder Interests proposed to
be Transferred by the Transferring Holder (the “Offered Shares”). Notwithstanding the foregoing,
the term “Offered Shares” shall include Founder Interests only with respect to the Company’s and
Shareholders’ rights of first refusal as described in clause 11.2.1.



          11.2.1 Right of First Refusal.



               11.2.1.1 Company’s Right of First Refusal. The Company, upon approval by the
disinterested members of the Board, shall have an option for a period of twelve (12) days from the
date the Transfer Notice is given to elect to purchase the Offered Shares at the same price and
subject to the same material terms and conditions as described in the Transfer Notice (or terms and
conditions as similar as reasonably possible). The Company may exercise such purchase option and,
thereby, purchase all the Offered Shares by notifying the Transferring Holder in writing before
expiration of such twelve (12) day period as to the number of such Offered Shares that it wishes to
purchase. If the Company gives the Transferring Holder notice that it desires to purchase such
Offered Shares, then payment for the Offered Shares shall be by check or wire transfer, against
delivery of the Offered Shares to be purchased at a place agreed upon between the parties and at
the time of the scheduled closing therefor, which shall be no later than the later of (i)
twenty-four (24) days after the date the Transfer Notice is given or (ii) the date contemplated by
the Transfer Notice for the closing with the prospective third party transferee(s). If the Company
fails to purchase all of the Offered Shares by exercising the right granted in this clause
11.2.1.1 within the period provided, the



13









 







Company shall notify each Shareholder in writing (the
“Additional Transfer Notice”) and the Offered Shares shall be subject to the rights granted to the
Shareholders pursuant to this Agreement. The Additional Transfer Notice shall include all of the
information and certifications required in a Transfer Notice and shall additionally identify the
Offered Shares that the Company has declined to purchase (the “Remaining Shares”).



               11.2.1.2 Shareholders’ Right of First Refusal. Each Shareholder shall have an option
for a period of twelve (12) days from the date the Additional Transfer Notice is given to elect to
purchase its pro rata share of the Remaining Shares at the same price and subject to the same
material terms and conditions as described in the Additional Transfer Notice (or terms and
conditions as similar as reasonably possible). Each Shareholder may exercise such purchase option
and, thereby, purchase all (with any reallotments as provided below) its pro rata share of the
Remaining Shares, by notifying the Transferring Holder and the Company in writing, before
expiration of such twelve (12) day period as to the number of such Remaining Shares that it wishes
to purchase (including any reallotment). For the purpose of the preceding sentence, each
Shareholder’s pro rata share shall be a fraction of the Remaining Shares, the numerator of which
shall be the number of Shares owned by such Shareholder on the date of the Transfer Notice
(assuming conversion of all securities then outstanding that are convertible into common equity of
the Company) and the denominator of which shall be the total number of Shares held by all
Shareholders on the date of the Transfer Notice (assuming conversion of all securities then
outstanding that are convertible into common equity of the Company). Each Shareholder electing to
exercise the right to purchase its full pro rata share of the Remaining Shares (a “Participating
Shareholder”) shall have a right of reallotment such that, if any other Shareholder fails to
exercise the right to purchase its full pro rata share of the Remaining Shares, each such
Participating Shareholder’s pro rata share shall be a fraction of the Remaining Shares not
previously purchased, the numerator of which shall be the number of Shares owned by such
Participating Shareholder on the date of the Transfer Notice (assuming conversion of all securities
then outstanding that are convertible into common equity of the Company) and the denominator of
which shall be the total number of Shares held by all Participating Shareholders on the date of the
Transfer Notice (assuming conversion of all securities then outstanding that are convertible into
common equity of the Company). If a Shareholder gives the Transferring Holder notice that it
desires to purchase its pro rata share of the Remaining Shares and, as the case may be, its
reallotment, then payment for the Remaining Shares shall be by check or wire transfer, against
delivery of the Remaining Shares to be purchased at a place agreed upon between the parties and at
the time of the scheduled closing therefore, which shall be no later than the later of (i)
twenty-four (24) days after the Additional Transfer Notice is given or (ii) the date contemplated
in the Transfer Notice for the closing with the prospective third party transferee(s).



          11.2.2 Right to Transfer. To the extent that the Company and the Shareholders have
not exercised their respective rights of first refusal as to the Offered Shares or the Remaining
Shares, as applicable, within the time periods specified in clause 11.2.1, then the Transferring
Holder shall be free to sell any such Shares or Founder Interests (as applicable) to such
prospective purchaser on the same terms and conditions as outlined in the Transfer Notice, and
provided that in the event such Shares or Founder Interests are not sold within ninety (90) days of
the date of the Transfer Notice, they shall once again be subject to the rights of first refusal
provided herein.



     11.3 Transfer Void. Notwithstanding the foregoing, any attempt by the Transferring
Holder to Transfer Shares or Founder Interests (or any interest therein) in violation of this
Agreement shall be void and the Company and Challenger Group (as applicable) agree it will not
effect such a Transfer nor will it treat any alleged transferee(s) as a Shareholder of the Company
or equity member of Challenger Group (as applicable).



     11.4 No Adverse Effect. The exercise or non-exercise of the rights of the Company or
any Shareholder set forth in this clause 11 to participate in one or more purchases or sales of
Shares made



14









 







by a Shareholder shall not adversely affect its rights to participate in subsequent
purchases or sales of Shares.



12. TAG-ALONG




     12.1 With the exception of Transfers of Shares expressly permitted by this Agreement, no
Transfer of Shares which would result, if made and registered, in a person or persons acting in
concert obtaining a Controlling Interest, will be made or registered unless:



          12.1.1 an Approved Offer is made by the proposed transferee(s) (“Buyer”); and



          12.1.2 the Buyer complies in all respects with the terms of the Approved Offer at the time of
completion of the sale and purchase of Shares pursuant to it.



     12.2 For the purposes of these clauses 12 and 13:



          12.2.1 “Approved Offer” means an bona fide offer in writing served on all Shareholders holding
Shares (including the proposing transferor), offering to purchase all the Shares held by such
Shareholders (including any Shares which may be allotted pursuant to the exercise or conversion of
options, rights to subscribe for or securities convertible into shares in existence at the date of
such offer) which:



               12.2.1.1 is stipulated to be open for acceptance for at least fifteen (15) Business Days;



               12.2.1.2 offers the same or equivalent consideration for each Share (whether in cash,
securities or otherwise in any combination), provided that a reduction, withholding or retention of
consideration to take account of tax payable or which might be payable by a Shareholder or by its
employing company in relation to the conversion of securities, the exercise of an option over
Shares and/or the disposal of Shares shall not prejudice the application of this clause;



               12.2.1.3 includes an undertaking by or on behalf of the Buyer that no other consideration,
(whether in cash or otherwise) is to be received or receivable by any Shareholder which, having
regard to the substance of the transaction as a whole, can reasonably be regarded as an addition to
the price paid or payable for the shares to be sold by such Shareholder, and that neither the Buyer
nor any person acting by agreement or understanding with it has otherwise entered into
more favourable terms or has agreed more favourable terms with any other Shareholder for the
purchase of Shares; and



               12.2.1.4 is on terms that the sale and purchase of Shares in respect of which the offer is
accepted will be completed at the same time.



13. DRAG-ALONG




     13.1 In the event that, following the date of this Agreement, a Change of Control Transaction
(as defined hereinafter) is approved by (i) the Board and (ii) two of Challenger Group, MENA
Company and Bronco (or in the event that one of Challenger Group, MENA Company and Bronco no longer
holds Shares, both of the remaining parties), each Shareholder hereby agrees to consent to and vote
all of the Shares of the Company’s capital stock then held by such Shareholder in favor of such
Change of Control Transaction at any meeting of the Shareholders (or action by written consent)
called to consider the approval of such Change of Control Transaction. In addition, if the Change
of Control Transaction is structured as (a) a merger, consolidation or share acquisition, each
Shareholder shall waive any dissenters’ rights, appraisal rights or similar rights in connection
with



15









 







such transaction or (b) sale of Shares, each Shareholder shall agree to sell all of his, her
or its Shares and rights to acquire shares of the Company’s capital stock on the terms and
conditions approved by the Board and two of the three Shareholders (or in the event that one of the
three Shareholders no longer holds Shares, both remaining Shareholders). “Change of Control
Transaction” means (i) the acquisition of the Company or subsidiary of the Company, if any, by
another entity or person by means of any transaction or series of related transactions (including,
without limitation, any merger, consolidation or other form of reorganization in which outstanding
shares of the Company are exchanged for securities or other consideration issued, or caused to be
issued, by the acquiring entity or its subsidiary), unless the Company’s shareholders of record as
constituted immediately prior to such transaction or series of related transactions will,
immediately after such transaction or series of related transactions hold at least a majority of
the voting power of the surviving or acquiring entity in the same relative proportions; (ii) a sale
of all or substantially all of the assets of the Company or of one or more direct or indirect
subsidiaries of the Company, which on a consolidated basis represent substantially all of the
assets of the Company; or (iii) the transfer of fifty percent (50%) or more of the Company’s voting
power. Should the provisions of this clause 13.1 be construed to constitute the granting of
proxies, such proxies will be deemed coupled with an interest and shall be irrevocable for the term
of this Agreement. It is agreed and understood that monetary damages would not adequately
compensate an injured party for the breach of this clause 13.1 by any party, that this clause
13.1 shall be specifically enforceable, and that any breach or threatened breach of this clause
13.1 shall be the proper subject of a temporary or permanent injunction or restraining order.
Further, each party hereto waives any claim or defense that there is an adequate remedy at law for
such breach or threatened breach.



     13.2 Notwithstanding the foregoing, in the event that an Approved Offer is made at any time
after 20 October 2009, MENA Company shall have the right (the “MENA Drag Along Right”) to require
all of the other Shareholders (the “Other Shareholders”) to accept the Approved Offer in full,
provided that the price per Share of the Approved Offer is greater than an amount equal to an
annualized twenty-five percent (25%) simple rate of return per Share on the Shares held by Bronco
based on a cost of US$4.00 per Share (which cost per Share shall be adjusted for any share
dividend, share split or combination with respect to the Shares). Notwithstanding the MENA Drag
Along Right, whenever an Approved Offer is made, and in the event that MENA Company wishes to
proceed with the Approved Offer, then prior to MENA Company’s exercise of the MENA Drag Along
Right, the Company shall have the right, exercisable within fifteen (15) days after the date MENA
Company has provided written notice to the Company and the Other Shareholders of its intention to
proceed with the Approved Offer, to purchase all Shares then held by MENA Company
from MENA Company at a price equal to the price offered in the Approved Offer. If the Company
has not exercised such right within such fifteen (15) day period or if the Company notifies MENA
Company that it does not intend to exercise such right, whichever is earlier, then the Other
Shareholders shall have the right, exercisable within fifteen (15) days of such date to purchase
(or procure the purchase of) on a pro rata basis all of such Shares held by MENA Company at a price
equal to the price offered in the Approved Offer. Each Other Shareholder electing to purchase its
full pro rata share of the Shares of MENA Company (a “Participating Buyer”) shall have a right of
reallotment such that, if any other Other Shareholder fails to exercise the right to purchase its
full pro rata share of the Shares of MENA Company, each such Participating Buyer’s pro rata share
shall be a fraction of the Shares of MENA Company not previously purchased, the numerator of which
shall be the number of Shares owned by such Participating Buyer (assuming conversion of all
securities then outstanding that are convertible into common equity of the Company) and the
denominator of which shall be the total number of Shares held by all Participating Buyers (assuming
conversion of all securities then outstanding that are convertible into common equity of the
Company). If the Other Shareholders have not exercised



16









 







such right within such thirty (30) day
period or if the Other Shareholders notify MENA Company that they do not intend to exercise such
right, whichever is earlier, then MENA Company shall be entitled to exercise the MENA Drag Along
Right without restriction in accordance with the terms of this Agreement. If the Company or the
Other Shareholders have duly and properly exercised their rights under this clause 13.2 as
aforesaid and MENA Company fails to complete the sale of its Shares to the Company or the Other
Shareholders in accordance with this clause 13.113.2, the Company or the Other Shareholders, or any
persons so authorized by the Board, may execute such share transfer form on behalf of MENA Company
together with any other documents necessary to give effect to the transfer contemplated under this
clause 13.2, provided that the Company or the Other Shareholders remit the payment of the purchase
price to MENA Company.



     13.3 The drag along right set forth in clause 13.1 may be exercised by the service of notice
to that effect on the Other Shareholders at the same time as, or within five (5) Business Days
following completion of the procedures set out in clause 13.1. Such notice will be accompanied by
all documents required to be executed by the Other Shareholders to give effect to the relevant
transfer.



     13.4 On the exercise of the drag along right set forth in clause 13.1 or the MENA Drag Along
Right in clause 13.2, each of the Other Shareholders will be bound to accept the terms of the
Change of Control Transaction offer or Approved Offer, as applicable, in respect of its entire
holding shares and to comply with the obligations assumed by virtue of such acceptance.



     13.5 If any of the Other Shareholders fails to accept the Change of Control Transaction offer
or the Approved Offer or, having accepted such offer, fails to complete the sale of any of its
Shares pursuant to the Change of Control Transaction offer or Approved Offer, or otherwise fails to
take any action required of it under the terms of the Change of Control Transaction offer or
Approved Offer, any persons so authorised by the Board may accept the offer on behalf of the Other
Shareholder in question, or undertake any action required under the terms of the Offer on the part
of the Other Shareholder in question. In particular, such person may execute the necessary
transfer(s) on that Other Shareholder’s behalf; and against:



          13.5.1 receipt by the Company (on trust for such Other Shareholder) of the consideration
payable for the relevant shares (the receipt being a good discharge to the Buyer, who will not be
bound to see to the application of it); and



          13.5.2 compliance by the Buyer and, where relevant, the Company with all other terms of the
Change of Control Transaction offer or the Approved Offer, and
deliver such transfer(s) to the Buyer (or its nominee). The Board will then authorise registration
of the transfer(s) and of the Buyer (or its nominee) as the holder of the shares so transferred.
After registration, the title of the Buyer (or its nominee) as registered holder of such shares
will not be affected by any irregularity in, or invalidity of such proceedings, which will not be
questioned by any person. The Other Shareholder will in such a case be bound to deliver up its
certificate for its shares to the Company, or a statutory declaration of loss (as appropriate)
whereupon the Other Shareholder will be entitled to receive the purchase price for such shares.



     13.6 Grant of Proxy. Should the provisions of this clause 13 be construed to
constitute the granting of proxies, such proxies shall be deemed coupled with an interest and are
irrevocable for the term of this Agreement. It is agreed and understood that monetary damages
would not adequately compensate an injured party for the breach of this clause 13 by any party,
that this clause 13 is specifically enforceable, and that any breach or threatened breach of this
clause 13 shall be the proper subject of a temporary or permanent injunction or restraining order.
Further, each party hereto waives any claim or defense that there is an adequate remedy at law for
such breach or threatened breach.



14. DEEMED SALE NOTICES




     14.1 Any Shareholder having to transfer part or all of the Shares held by him as a result of
the bankruptcy of such Shareholder (a
“Retiring Shareholder”) shall first give a notice in writing
(a



17









 







“Sale Notice”) to the Company specifying the number of his Shares he wishes to sell (the “Sale
Shares”) which notice shall constitute the Company the agent of the Retiring Shareholder for the
sale of the Sale Shares at the Price (determined in accordance with the provisions of clauses 14.2
and 14.3). If any Retiring Shareholder attempts to transfer any shares held by him or transfer
any interest in any such shares without serving a Sale Notice on the Company then he shall be
deemed to have served a Sale Notice on the Company in respect of the shares he was attempting to
transfer or the shares in which he transferred the interest (as the case may be).



     14.2 The term “Price” shall be the price specified by the Retiring Shareholder in the Sale
Notice or the Value (determined in accordance with clause 14.3) (whichever shall be the lesser
sum). If the Retiring Shareholder shall not specify a price in the Sale Notice, the Price shall be
the Value (determined as aforesaid).



     14.3 Immediately following service of the Sale Notice, the Company shall instruct the
Company’s auditors appointed at that time to certify the fair value of the Sale Shares (the
“Value”) calculated on the basis of a sale of shares in a going concern between a willing seller
and a willing purchaser without discount for minority holdings or premium for majority holdings (as
at the date of the Sale Notice) and not having regard to the fact that the transferability of the
Sale Shares is restricted by this Agreement. The Company, the Shareholders and the Directors shall
render all such assistance and provide all such documentation and other information to the auditors
as may be necessary and the Company shall use its best endeavours to procure from the auditors the
issuance of a certificate of the Value (a “Valuation Certificate”) as soon as reasonably possible
and in any event not more than fourteen (14) days from the date of the Sale Notice. In certifying
the Value the auditors shall act as experts and not as arbitrators and save in the case of manifest
error their decision shall be final and binding upon the parties and the costs of the auditors in
the preparation of the Valuation Certificate shall be borne by the Company save where the Retiring
Shareholder is responsible for the auditors’ fees in accordance with the provisions of clause
14.4.



     14.4 On receipt of the Valuation Certificate the Company shall send a copy of the same to the
Retiring Shareholder who shall be entitled to withdraw the Sale Notice by notice in writing to the
Company within seven days of his receipt of the Valuation Certificate provided that he gives an
undertaking in a form acceptable to the Directors to be responsible for the auditors’ fees
incurred in the preparation of the Valuation Certificate. On the expiry of seven (7) days the
Company shall serve a notice on all the other Shareholders (an “Offer Notice”) specifying the Price
determined in accordance with clauses 14.2 and 14.3 and each such Shareholder’s proportional
entitlement to the Sale Shares calculated as nearly as may be in the same proportion as the nominal
amount of each such Shareholders existing holding of Shares regardless of class bears to the
aggregate nominal amount of all existing Shares held by all other Shareholders, and specifying the
period during which the offer for sale of the Sale Shares shall remain open, which shall be not
less than fourteen (14) days nor more than twenty-eight (28) days from the date of the Offer
Notice. The Offer Notice shall also invite each such Shareholder to state in his reply the number
of additional Shares (if any) in excess of his proportional entitlement which he desires to
purchase.



     14.5 If the Shareholders do not all accept the offer in respect of their respective
proportions in full, the Sale Shares not so accepted shall be used to satisfy the claims for
additional Sale Shares and if there are insufficient such Shares to satisfy all the claims for
additional Sale Shares then such Shares shall be offered to each such Shareholder making a claim
for additional Sale Shares in the same proportion (as nearly as may be) as the proportion that the
aggregate nominal amount of such Shareholder’s Shares bears to the aggregate nominal amount of all
the Shares held by the Shareholders making claims for additional Sale Shares provided that no
Shareholder shall be required to take more Sale Shares than he shall have applied for.



18









 





     14.6 If the Company shall find purchasing Shareholders in respect of all or any of the Sale
Shares in accordance with the procedure set out in clauses 14.1 to 14.5 it shall give notice
thereof to the Retiring Shareholder and the Retiring Shareholder and the purchasing Shareholders
shall thereupon become bound to complete the sale and purchase of the Sale Shares within fourteen
(14) days.



     14.7 Save where the Retiring Shareholder has withdrawn the Sale Notice pursuant to the
provisions of clause 14.4 or if the Company shall not find purchasing Shareholders for all of the
Sale Shares in accordance with the procedure set out in clauses 14.1 to 14.5 or if through no
default of the Retiring Shareholder the purchase of any of the Sale Shares is not completed within
the time period specified in clause 14.6 the Retiring Shareholder shall be at liberty at any time
thereafter to transfer such of the Sale Shares as were not accepted by purchasing Shareholders or
in respect of which the sale was not completed (as the case may be) to any person he may wish
provided that such sale is completed at the Price or any higher or (subject to clause 14.8) lower
price and that otherwise the terms of the sale are no more favourable to the purchaser than those
rejected by the remaining Shareholders.



     14.8 No Sale Shares shall be sold at a lower price than the Price or on more favourable terms
than those set out in the Offer Notice without the Retiring Shareholder first serving a further
Sale Notice upon the Company specifying such more favourable terms (if any) and/or such lower price
as the price at which such Sale Shares are offered and the provisions of articles 14.1 to 14.5
shall apply mutatis mutandis to such further Sale Notice save that there shall be no requirement to
obtain a Valuation Certificate the Price shall be such lower price and the Offer Notice shall
specify any such more favourable terms as the terms applying to the offer for sale of the Sale
Shares.



     14.9 In the event of the Retiring Shareholder failing to carry out the sale of any of the Sale
Shares to purchasing Shareholders in accordance with the provisions of this clause 14 the
Directors may authorise some person to execute a transfer of the Sale Shares in favour of the
purchasing Shareholders and the Company may give a good receipt for the purchase price of such Sale
Shares and may register the purchasing Shareholders as holders thereof and issue to them
certificates for the same whereupon the purchasing Shareholders shall become indefeasibly entitled
thereto. The Retiring Shareholder shall in such case be bound to deliver up his certificate for the Sale
Shares to the Company whereupon the Retiring Shareholder shall be entitled to receive the purchase
price which shall in the meantime be held by the Company on trust for the Retiring Shareholder but
without interest. If such certificate shall comprise any Shares which the Retiring Shareholder has
not become bound to transfer as aforesaid the Company shall issue to the Retiring Shareholder a
balance certificate for such Shares.



     14.10 With the written consent of all the Shareholders the provisions contained in this
clause 14 or any part thereof may be waived or varied in relation to any proposed transfer of
Shares.



15. CHANGE OF CONTROL OF CHALLENGER GROUP




     15.1 Change of Control. So long as either Bronco or MENA Company (or each of their
Affiliates) hold Shares and the restrictions set forth in clause 11 hereof are applicable to the
Shareholders, each of Challenger Group and each Family Member hereby covenants that it will not,
without approval of the Shareholders (excluding Challenger Group), transact:



          15.1.1 an acquisition of Challenger Group by another entity by means of a transaction or
series of related transactions (including, without limitation, any merger, consolidation or other
form of reorganization in which outstanding equity interests of Challenger Group are exchanged for
securities or other consideration issued, or caused to be issued, by the acquiring entity or
subsidiary (each, a “CG Change of Control Transaction”) unless Challenger Group’s equity



19









 







holders of
record as constituted immediately prior to such CG Change of Control Transaction will, immediately
after such CG Change of Control Transaction hold at least a majority of the voting power of the
surviving or acquiring entity in the same relative proportions;



          15.1.2 a sale of substantially all of the assets of Challenger Group; or



          15.1.3 any other transaction or transactions which result, directly or indirectly, in fifty
percent (50%) or more of the voting power of Challenger Group being transferred to any other
person.



     15.2 Further Issuances. Notwithstanding clause 15.1, Challenger Group agrees that it
shall not issue any additional shares or other equity securities of Challenger Group for as long as
either Bronco or MENA Company holds Shares and the restrictions set forth in clause 11 hereof are
applicable to any of the Shareholders. It is agreed and understood that monetary damages would not
adequately compensate an injured party for the breach of this clause 15 by any party, that this
clause 15 is specifically enforceable, and that any breach or threatened breach of this clause 15
shall be the proper subject of a temporary or permanent injunction or restraining order. Further,
each party hereto waives any claim or defense that there is an adequate remedy at law for such
breach or threatened breach.



16. THE OPTION PLAN




     16.1 The Company may adopt the Option Plan for the benefit of the Directors, employees and
consultants of the Company, subject to approval by the Board and the Compensation Committee.



     16.2 The total number of shares of capital stock of the Company reserved for issuance to
Directors, employees or consultants of the Company pursuant to the Option Plan shall not exceed two
percent (2%) of the share capital of the Company on a fully-diluted post-Completion basis,
including the Repurchase.



     16.3 The options granted pursuant to the Option Plan shall be approved by the Board and the
Compensation Committee thereof and will be subject to vesting in four equal instalments on the
anniversary of the date of grant.



     16.4 Any shares acquired through the Option Plan shall be subject to such typical restrictions
on transferability as the Board and the Compensation Committee thereof may determine.



17. REGISTRATION RIGHTS



     17.1 In the event of a Qualified IPO, the Shareholders shall have equal rights in relation to
the registration of the Shares in such Qualified IPO and each Shareholder may participate pro rata
in such Qualified IPO.



     17.2 At any time after the earlier to occur of (a) a Qualified IPO, or (b) the third
anniversary of the date of this Agreement, Bronco may by written notice to the Company request that
the Company file a registration statement or international equivalent registration or listing for
the sale of all or any portion of the Shares then owned by Bronco. Upon receipt of such notice,
the Company shall use its commercially reasonable efforts to (i) cause, as promptly as practicable
and, in any event, within thirty (30) days after receipt of such notice, such Shares to be
registered or listed on a “national securities exchange”, a “designated offshore securities market”
(as such terms are defined from time to time under the U.S. securities laws), or such other
internationally recognized exchange, and (ii) if Bronco so requests in its notice, to engage an
underwriter selected by the Company and reasonably acceptable to Bronco, to conduct such offering.
The Shareholders shall be permitted to participate in



20









 







any such registration on the same terms as
Bronco on a pro rata basis, provided, however, that should the underwriter for the offering (to the
extent applicable) advise that not all of the Shares requested to be included in the offering can
be sold at a price acceptable to Bronco, Bronco shall be entitled to include all of the Shares that
it requested to be included in the offering and the other Shareholders shall be entitled to include
such number of their Shares as the underwriter advises may also be sold at such price. The Company
shall not be obligated to effect more than two (2) such registrations pursuant to this clause
17.2.



     17.3 In the event the Company or any Shareholder intends to register Shares of the Company for
an offering, each Shareholder shall have the right to include its Shares in such offering on a pro
rata basis. The Company or the relevant Shareholder, as the case may be, shall provide the other
Shareholders with a minimum of thirty (30) days’ prior written notice of any such proposed
offering.



     17.4 The Company agrees to bear and to pay or cause to be paid promptly upon request all
expenses related to the Company’s performance of or compliance with the registration rights in this
clause 17, including, without limitation, (a) all registration and filing fees and expenses, (b)
all fees and expenses in connection with the qualification of the shares for offering and sale, and
(c) all expenses relating to the preparation, printing, distribution and reproduction of each
registration statement required to be filed hereunder, each prospectus included therein or prepared
for distribution pursuant hereto, each amendment or supplement to the foregoing, the certificates
representing the shares and all other documents relating hereto. Each Shareholder agrees to pay
its pro rata share of all sales fees, commissions and underwriting discounts attributable to the
sale of such shares.



     17.5 Unless otherwise provided for under this clause 17, the Company shall not grant
registration rights to any holder of the Company’s Shares that would allow such holder to make a
demand for registration or listing that could result in such offering occurring prior to a
registration or listing pursuant to clause 17.2, would reduce the amount of Shares that a
Shareholder would be entitled to include in an offering pursuant to clause 17.2 or is otherwise
superior to or inconsistent
with the rights granted to the Shareholders pursuant to this Agreement, without the prior
approval of all of the Shareholders.



18. TERMINATION



     18.1 This Agreement shall terminate upon the earliest to occur of any one of the following
events (and do not apply to any Transfer in connection with such event);



          18.1.1 the consummation on or through the facilities of a “national securities exchange”, a
“designated offshore securities market” (as such terms are defined from time to time under the U.S.
securities laws), or such other internationally recognized exchange of a firm commitment
underwritten offer and sale of Shares for the account of the Company to the public at a price per
Share greater than an amount equal to an annualized twenty-five percent (25%) simple rate of return
per Share based on a cost of US$4.00 per Share (which cost per Share shall be adjusted for any
share dividend, share split or combination with respect to the Shares) from the date of this
Agreement (a “Qualified IPO”); or



          18.1.2 a liquidation, dissolution or winding up of the Company, including (X) the acquisition
of the Company by another entity by means of any transaction or series of related transactions
(including, without limitation, any merger, consolidation or other form of reorganization in which
outstanding shares of the Company are exchanged for securities or other consideration issued, or
caused to be issued, by the acquiring entity or its subsidiary) (each, a “Merger Transaction”) that
results in the transfer or acquisition of at least a majority of the Company’s voting power, (Y) a
Merger Transaction, unless the Company’s shareholders of record as constituted



21









 







immediately prior to
such Merger Transaction will, immediately after such Merger Transaction hold at least a majority of
the voting power of the surviving or acquiring entity in the same relative proportions, or (Z) a
sale of all or substantially all of the assets of the Company by means of any transaction or series
of related transactions (collectively, a “Deemed Liquidation”),


provided, however, that the registration rights in clause 17, the confidentiality obligations in
clause 19 and clauses 23 through 33 shall survive any termination of this Agreement pursuant to
clause 19.1.




     18.2 This Agreement shall terminate in respect of any Shareholder if at any time, as a result
of a valid transfer of Shares made in accordance and in full compliance with this Agreement, that
Shareholder holds no Shares, but without prejudice to any rights which any other party may have
against that Shareholder prior to termination.



19. CONFIDENTIALITY




     19.1 Except as may be required by law or any governmental or regulatory body, none of the
parties shall divulge to any person, or use or exploit for any purpose, any trade secrets or
confidential information or any technical, operational, administrative, financial or business
information relating to the other Shareholders and/or the Company, which the relevant Shareholder
or the Company may have obtained as a result of the negotiation or entering into of this Agreement.



     19.2 Each Shareholder hereto acknowledges it is aware (and that its representatives or
Affiliates who are apprised of this matter have been advised) of the United States securities laws,
including, without limitation, Section 10(b) of the Securities Exchange Act of 1934, as amended,
and Rule 10b-5 thereunder, and that such laws prohibit, among other things, such Shareholder, its
representatives, Affiliates and any person that has received material non-public information about
another Shareholder (which for purposes of this clause 19.2, shall include material non-public
information about the Company), from purchasing or selling securities of the other Shareholder
or from communicating such information to any person under circumstances under which such other
person may be expected to purchase or sell securities to the other Shareholder; therefore, each
Shareholder (other than Bronco), the Company, and each of their Affiliates covenant that it shall
not divulge any such information to any other person under any such circumstances or, for its own
or any other person’s account, purchase or otherwise engage in any transaction in the securities of
Bronco and any of its Affiliates without the prior written approval of both Bronco and legal
counsel to Bronco.



     19.3 The restriction in clause 19.1 shall continue to apply after the termination of this
Agreement without limit in point of time, but shall cease to apply to information or knowledge
which may properly come into the public domain through no fault of the restricted party. The
restriction in clause 19.2 shall continue to apply after the termination of this Agreement until
such time as a party so restricted ceases to have material non-public information about the
Company, any Shareholder, or any of their respective direct or indirect parent companies or
subsidiaries.



20. ADDITIONAL COVENANTS BY THE PARTIES




     20.1 Each Shareholder covenants with the others that so long as this Agreement remains in
force and effect it will:



          20.1.1 be just and true to the others and act in good faith;



          20.1.2 promptly execute and expedite all such documents as are required in respect of this
Agreement;



22









 





          20.1.3 promptly notify the others of all or any matters coming to its notice which may affect
the Company or the Business;



          20.1.4 use and exercise the votes controlled by it at all meetings of the Company in order to
ensure the observance of the terms and the spirit of this Agreement;



          20.1.5 work towards a mutually beneficial and advantageous exit strategy including without
limitation an initial public offering of the Company’s shares; and



          20.1.6 generally do all things necessary to give effect to this Agreement.



21. REPRESENTATIONS AND WARRANTIES




     21.1 Shareholders; Family Members. Each Shareholder and each Family Member hereby
represents and warrants to the other Shareholders hereto as follows:



          21.1.1 Such Shareholder or Family Member (as applicable) has the full right, power and
authority to enter into, execute, deliver and perform this Agreement, and such Shareholder’s
officers or agents executing and delivering this Agreement are duly authorized to do so, and this
Agreement does not breach or contravene the charter or other constituent documents of such
Shareholder or any agreement, law or regulation to which such Shareholder or Family Member is a
party or by which it is bound.



          21.1.2 This Agreement has been duly and validly executed, issued and delivered and constitutes
the legal, valid and binding obligation of such Shareholder or Family Member, enforceable against
such Shareholder or Family Member in accordance with its terms.



          21.1.3 The certificates representing Shares owned by such Shareholder will bear the legends
referenced in this Agreement, and such Shares will not be offered, sold, or transferred in the
absence of registration or exemption under applicable securities laws.



          21.1.4 Schedule 4 to this Agreement accurately sets forth such Shareholder’s holding
of Shares as of the date hereof.



          21.1.5 If such Shareholder is an Existing Shareholder, such Shareholder has legal and
beneficial ownership of, good and marketable title to, the Shares owned by it as set forth on
Schedule 1, free and clear of any and all liens, options, covenants, conditions,
restrictions, and other encumbrances (other than those set forth in this Agreement or the Original
Agreement).



     21.2 The Company. The Company hereby represents and warrants to the Shareholders and
the Family Members as follows:



          21.2.1 The Company has the full right, power and authority to enter into, execute, deliver and
perform this Agreement, and its officers or agents executing and delivering this Agreement are duly
authorized to do so, and this Agreement does not breach or contravene the charter or other
constituent documents of the Company or any agreement, law or regulation to which it is a party or
by which it is bound.



          21.2.2 This Agreement has been duly and validly executed, issued and delivered and constitutes
the legal, valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms.



23









 





          21.2.3 The certificates representing the Shares will bear the legends referenced in this
Agreement, and such Shares will not be offered, sold, or transferred in the absence of registration
or exemption under applicable securities laws.



          21.2.4 Schedule 4 to this Agreement accurately sets forth each Shareholder’s holding
of Shares of capital stock of the Company as of the date hereof.



          21.2.5 Each of the representations and warranties of the Company in the Ancillary Agreements
are true and correct as of the date hereof.



     21.3 Anti-bribery and Corruption Representations. The Shareholders and the Company
hereby represent and warrant, jointly and severally, to each other as follows:



     21.3.1 Except as otherwise set forth on Schedule 22.3.1, and in connection with the
acquisition, operation or maintenance of any of the Company’s assets and business, the transactions
contemplated by this Agreement and by any of the Ancillary Documents:



               21.3.1.1 The Company and the Shareholders 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).



               21.3.1.2 The Company and the Shareholders 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).



               21.3.1.3 The Company and the Shareholders 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.



          21.3.2 Except as otherwise set forth on Schedule 22.3.2,



               21.3.2.1 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.



               21.3.2.2 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



24









 







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).



               21.3.2.3 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.



               21.3.2.4 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 Bronco pursuant to this
Agreement or the Ancillary Agreements, or any other benefit or value by reason of or in connection
with the execution of this Agreement or any other Ancillary Agreements by the parties.



22. TERMINATION OF EXISTING AGREEMENTS




     By execution hereof, each Existing Shareholder, the Company, and each Family Member hereby
unconditionally waives all of its rights arising under (including any rights of notification or
preemption), and hereby terminates, (i) that certain Investment Agreement (the “Investment
Agreement”) dated 20 October 2006 among the Company, MENA Company, VC Bank, 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 Company, VC Bank, 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 VC Bank
and the Company (collectively, the “Prior Agreements”), to the extent each is a party thereto.
Subject to the exceptions expressly set out above, each Existing Shareholder and each Family
Member, by execution hereof, hereby releases and forever discharges any other party to the Prior
Agreements to which it is a party and each of their Affiliates of and from any and all manner of
action or actions, causes or causes of action, in law or in equity, suits, debts, liens, contracts,
agreements, promises, liabilities, claims, accounts, sums of money, reckonings, bonds, bills,
demands, damages, losses, costs or expenses, whether direct or derivative, of any nature
whatsoever, known or unknown, fixed or contingent, including, without limitation, any claim for
indemnification or contribution, which such Existing Shareholder or Family Member may now have or
may hereafter have arising under any of the Prior Agreements. Furthermore, each Existing
Shareholder and each Family Member covenants and agrees such Existing Shareholder or such Family
Member shall not commence, join in, or in any manner seek relief through any suit arising out of,
based upon, or relating to any claim released hereunder, or in any manner assert or cause or assist
another to assert any claims released hereunder.



23. NO PARTNERSHIP




     Nothing in this Agreement shall be construed as constituting, or deemed to constitute, a
partnership between the Shareholders and, except as specifically provided for in this Agreement,
neither of them shall have any authority to bind the other in any way.



24. ASSIGNMENT




     This Agreement is binding upon and shall enure for the benefit of the successors of the
parties but, except as otherwise set forth herein, shall not be assignable, except that a
Shareholder may, with



25









 







the prior written consent of the other Shareholders, assign its rights under
this Agreement to any company of which it is a subsidiary or of which it is a holding company.



25. AMENDMENT AND WAIVER




     25.1 No variation of this Agreement shall be effective unless it is made in writing, refers
specifically to this Agreement and is signed by all of the parties hereto.



     25.2 No waiver of any term, provision or condition of this Agreement shall be effective except
to the extent made in writing and signed by the waiving party.



     25.3 No omission or delay on the part of any party in exercising any right, power or privilege
under this Agreement shall operate as a waiver by it of any right to exercise it in future or of
any other of its rights under this Agreement.



     25.4 Completion of this Agreement does not constitute a waiver by any Shareholder of any
breach of any provision of this Agreement whether or not known to that Shareholder at that time.



26. 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 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 on Schedule 1 hereto or such other address as that party may specify by notice to the
other parties.



27. INVALIDITY




     If any provision of this Agreement becomes or is declared by a tribunal of competent
jurisdiction to be illegal, unenforceable or void, portions of such provision, or such provision in
its entirety, to the extent necessary, shall be severed from this Agreement, and such tribunal will
replace such illegal, void or unenforceable provision with a valid and enforceable provision that
will achieve, to the extent possible, the same economic, business and other purposes of the
illegal, void, or unenforceable provision. The balance of this Agreement shall be enforceable in
accordance with its terms.



28. EXECUTION




     This Agreement may be executed in any number of counterparts and by the several parties on
separate counterparts each of which when so executed shall be an original but all counterparts
shall together constitute one and the same instrument.



29. COSTS




     Except as otherwise set forth herein or as provided in the Ancillary Agreements, each party
shall pay its own costs and expenses in relation to the negotiation, preparation, execution and
implementation of this Agreement.



26









 





30. ENTIRE AGREEMENT




     This Agreement, the Ancillary Agreements and the documents contemplated herein and therein
constitute the entire agreement between the parties in connection with its subject matter hereof
and thereof, and supersede all prior oral or written agreements between the parties (including,
without limitation, the Summary Term Sheet and all correspondence in respect thereof).



31. 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.



32. GOVERNING LAW AND ARBITRATION




     32.1 Governing Law. This agreement and the performance and 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.



     32.2 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 clause 32.2.



     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 clause 32.2, 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 27.



27









 





     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.



     32.3 Remedies. Each party hereto hereby acknowledges and agrees that, in the event of
a prospective or actual breach of any of the provisions of this Agreement by such party, monetary
damages would not be an adequate remedy to the other parties hereto and their Affiliates for
the harm to the business of such other parties and their Affiliates. In the event of a threatened
or actual breach of any of the provisions of this Agreement, the parties agree that each party
shall be entitled, if any so elects, to a temporary restraining order and to temporary and
permanent injunctive relief to prevent or terminate such threatened or actual breach, in each case
without the necessity of a bond. In addition, each party shall be entitled to such monetary
damages as any can show it sustained by reason of such threatened or actual breach. Nothing in
this clause 32.3 shall be construed to limit in any way the remedies of a party for a breach of
the terms, provisions and covenants contained in this Agreement. Each party hereto shall have the
right to inform any person that it reasonably believes to be, or to be contemplating, participating
with a party or receiving from a party assistance in violation of the terms of this Agreement and
the rights of a party hereunder and that participation by any such person with that party in
activities in violation of this Agreement may give rise to claims by a party against such person.



     32.4 Consideration. The restrictive covenants and agreements contained herein are
materially significant and essential to the Completion, and the restrictive covenants in Agreement
are a material component of the Purchase Price (as defined in the Subscription Agreement).



33. OBLIGATION OF FAMILY MEMBERS




     The Family Members hereby agree and undertake to do all things commercially reasonable and
within their power to ensure that the Company at all times fully complies with the terms of this
Agreement.



34. RELATIONSHIP WITH THE ARTICLES OF ASSOCIATION




     To the extent that the Articles of Association of the Company contain provisions that relate
to the subject matter of, or are similar to, the provisions contained in this Agreement, the
Shareholders agree that irrespective of those provisions contained in the Articles of Association,
(i) the terms of this Agreement shall govern all such matters, (ii) any disputes relating thereto
shall be resolved in



28









 







accordance with the terms of this Agreement, and (iii) the Shareholders shall
take such action as may be necessary or desirable to cause those matters to effected in accordance
with the terms of this Agreement, including, without limitation, voting all of such Shareholders’
interests in the Company and causing such Shareholders’ designees to the Board of Directors to vote
to amend in the Articles of Association of the Company in so far as is necessary to give full
effect to the provisions of this Agreement. The provisions of this
clause 4.134 shall constitute the
granting of proxies by each Shareholder to each other Shareholder for the purposes of ensuring
compliance with the provisions of this clause 4.134, which proxies are coupled with an interest and
shall be irrevocable for the term of this Agreement. It is agreed and understood that monetary
damages would not adequately compensate an injured party for the
breach of this clause 4.134 by any
party, that this clause 34 shall be specifically enforceable, and that any breach or threatened
breach of this clause 34 shall be the proper subject of a temporary or permanent injunction or
restraining order. Further, each party hereto waives any claim or defense that there is an
adequate remedy at law for such breach or threatened breach.




29









 









SCHEDULE 1




The Existing Shareholders




	 	 	 	 	 	 	 	 	 
	Name and Address	 	Existing No. of Shares	 	 	No. of Shares to be Redeemed	 
	The Challenger Group Limited
	 	 	33,670,000	 	 	 	863,334	 
	Clarendon House

2 Church Street

P.O. Box HM 1022

Hamilton HM DX

Bermuda
	 	 	 	 	 	 	 	 
	 
	MENA Oil Drilling Company Limited
	 	 	15,000,000	 	 	 	384,615	 
	Skanco Court

Cooil Road


	 	 	 	 	 	 	 	 
	Braddan


	 	 	 	 	 	 	 	 
	Isle of Man IM2 2SR
	 	 	 	 	 	 	 	 
	 
	Venture Capital Bank B.S.C.(c)
	 	 	1,330,000	 	 	 	34,102	 
	P.O. Box 11755

Manama

Kingdom of Bahrain
	 	 	 	 	 	 	 	 








30









 








SCHEDULE 2




Family Members





	1.	 	Yelmez Salaheddin A. Tatanaki
	 
	2.	 	Hassan S. Ali Tatanaki
	 
	3.	 	Faiz Salaheddin Tatanaki




31









 












SCHEDULE 3




Corporate Structure










11
October 2007


32









 









EXECUTED as a deed (but not delivered until the date of this Agreement) by:                 




	 	 	 	 	 	 	 
	 	 	CHALLENGER LIMITED, acting by:	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Yalmez Salah El Din Ali Tatanak	 	 
	 

	 	Name:
	 	 

Yalmez Salah El Din Ali Tatanaki
	 	 
	 

	 	Title:
	 	Director	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Abdullatif Janahi	 	 
	 

	 	Name:
	 	 

Abdullatif Janahi
	 	 
	 

	 	Title:
	 	Vice Chairman	 	 
	 
	 	 	 	 	 	 
	 	 	BRONCO MENA INVESTMENTS LLC, acting by:	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ David C. Treadwell	 	 
	 

	 	Name:
	 	 

David C. Treadwell
	 	 
	 

	 	Title:
	 	Vice President and General Counsel	 	 
	 
	 	 	 	 	 	 
	 	 	CHALLENGER GROUP LTD., acting by:	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Katarina Lif Burren	 	 
	 

	 	Name:
	 	 

Katarina Lif Burren
	 	 
	 

	 	Title:
	 	Director	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Margareta Zweifel	 	 
	 

	 	Name:
	 	 

Margareta Zweifel
	 	 
	 

	 	Title:
	 	Director	 	 
	 
	 	 	 	 	 	 
	 	 	VENTURE CAPITAL BANK B.S.C.(c), acting by:	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Abdullatif Janahi	 	 
	 

	 	Name:
	 	 

Abdullatif Janahi
	 	 
	 

	 	Title:
	 	Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Sharif Monfaradi	 	 
	 

	 	Name:
	 	 

Sharif Monfaradi
	 	 
	 

	 	Title:
	 	Chief Investment Officer	 	 




Signature
Page to Shareholders’ Agreement


 









 







	 	 	 	 	 	 	 
	 	 	MENA OIL DRILLING COMPANY LIMITED, acting by:	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Mark Schofield	 	 
	 

	 	Name:
	 	 

Mark Schofield
	 	 
	 

	 	Title:
	 	 Director	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Brent Thomas	 	 
	 

	 	Name:
	 	 

Brent Thomas
	 	 
	 

	 	Title:
	 	 Director	 	 






	 	 	 	 	 
	 	 	 
	 	                         /s/ Hassan Salah El Din Ali Tatanaki
 	 
	 	HASSAN SALAH EL DIN ALI TATANAKI 	 
	 	 	 
	 	                         /s/ Faiez Salah El Din Ali Tatanaki
 	 
	 	FAIEZ SALAH EL DIN ALI TATANAKI 	 
	 	 	 
	 	                         /s/ Yalmez Salah El Din Ali Tatanaki
 	 
	 	YALMEZ SALAH EL DIN ALI TATANAKI 	 
	 	 	 
	 



Signature
Page to Shareholders’ Agreement