SUBSCRIPTION AGREEMENT


    
      

    

     

     

     

     

     

     

     

     

     

     

     

    
 

     

    SUBSCRIPTION
      AGREEMENT

     

    


     

    


     

    
      
        

      



     

     

     

    


     

    


     

    


     

    CHALLENGER
      LIMITED

     

    


     

    


     

    


     

     

     

      
        

      

    

    


     

    


     

    


     

    


     

    Dated
      as of November 15, 2007

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    SUBSCRIPTION
      AGREEMENT

    
       

      THIS
        SUBSCRIPTION AGREEMENT,
        dated
        as of November 15, 2007, is entered into by and among Challenger Limited,
        a
        company registered in the Isle of Man under company number 55967 (the
        "Company"),
        Bronco MENA Investments LLC, a Delaware limited liability company ("Investor"),
        Challenger Group Ltd., a company registered in Bermuda under company number
        38486 ("Challenger"),
        and
        those individual shareholders of Challenger listed on the Schedule of Challenger
        Shareholders attached hereto (the "Family
        Members").

       

      RECITALS:

       

      A.  The
        Company desires to issue and allot shares of its capital stock ("Shares")
        to
        Investor and Investor desires to subscribe for Shares from the Company on
        the
        terms and conditions set forth herein.

       

      B.  The
        Investor is willing to subscribe for Shares from the Company, make the capital
        contributions to the Company provided herein, and otherwise perform its
        covenants and agreements provided in this Agreement, subject to all of the
        representations, covenants and agreements of the Company, the Family Members,
        and Challenger contained herein. Each of the Company, the Family Members,
        and
        Challenger acknowledges and affirms that it is making the representations,
        covenants and agreements herein to induce the Investor to (x) execute and
        deliver this Agreement and the other agreements provided for herein,
        (y) subscribe for the Shares from the Company and make the capital
        contributions to the Company, and (z) otherwise perform their covenants and
        agreements provided in this Agreement and the other agreements provided for
        herein.

       

      AGREEMENT:

       

      NOW,
        THEREFORE, in
        consideration of the foregoing Recitals and the mutual covenants and agreements
        contained herein and in the other agreements and instruments referenced herein,
        the parties hereto, intending to be legally bound, hereby agree as
        follows:

       

      ARTICLE
        I  

       

      DEFINITIONS,
        REFERENCES, AND CONSTRUCTION

       

      Section
        1.1.  Definitions.

       

      (a)  As
        used
        in this Agreement, the following terms shall have the following
        meanings:

       

      "Affiliate"
        means
        any person directly or indirectly controlling, controlled by or under common
        control with a person. As used in this definition, the terms "controlling,
        controlled by, or under common control"
        mean
        the possession, directly or indirectly, of the power to direct or cause the
        direction of the management and policies (whether through ownership of voting
        securities or any partnership or other ownership interest, by contract, or
        otherwise) of a person.

       

      "Agreement"
        means
        this Subscription Agreement, as hereafter amended or modified in accordance
        with
        the terms hereof.

       

      "Applicable
        Environmental Law(s)"
        means
        any and all laws (including common law), statute, rule, regulation or other
        legal requirement, including, but not limited to consent decrees, relating
        to or
        otherwise pertaining to health, safety, the environment or natural resources
        in
        effect and applicable to the Company or any operations or activities on owned
        or
        leased property, including, without limitation Law No. 7 of 1982 and its
        Executive Regulations, the Libyan Maritime Law issued on 28 November 1958,
        Libyan Law No. 81 of 1971, Law No. 8 of 1973, Health Law No. 106 of 1973
        and its
        Executive Regulations, Law No. 25 of 1976, Law No. 3 of 1982, and Resolution
        of
        the General People's Committee No. 263 of 1999 Establishing the Environment
        General Authority.

       

      "Applicable
        Law"
        means
        any statute, law, principle of common law, rule, regulation, judgment, order,
        ordinance, requirement, code, writ, injunction, or decree of any Governmental
        Entity.

       

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

      


      "Closing
        Date"
        means
        the date of the Closing.

       

      "Disclosure
        Letter"
        means
        the letter sent from the Company to the Investor in relation to the
        representations and warranties set out in Section
        3.1
        having
        the same date as this Agreement.

       

      "Electronic
        Transmission"
        means a
        form of communication that (i) does not directly involve the physical
        transmission of paper, (ii) creates a record that may be retained, retrieved,
        and reviewed by the recipient, and (iii) may be directly reproduced in paper
        form by the recipient through an automated process.

       

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

       

      "Governing
        Documents"
        means,
        when used with respect to an entity, the documents governing the formation
        and
        operation of such entity, including (i) in the instance of a corporation,
        the
        articles of incorporation and bylaws of such corporation, (ii) in the instance
        of a partnership, the partnership agreement, (iii) in the instance of a limited
        liability company, the certificate of formation and limited liability company
        agreement, and (iv) with respect to the Company, the documents governing
        its
        formation and operation, including its memorandum and articles of
        association.

       

      "Governmental
        Entity"
        means
        any court or tribunal in any jurisdiction or any governmental,
        quasi-governmental or regulatory body, agency, department, commission, board,
        bureau or other authority or instrumentality of any country, nation, republic,
        principality, protectorate, province, state or similar authority or any
        political subdivision thereof.

       

      "Government
        Official"
        means
        (i) any official or employee or agent of any government (including, but not
        limited, to the government of Libya) or any federal, regional or local
        department, agency, state-owned or otherwise controlled enterprise or
        corporation, or other instrumentality thereof, (ii) any official or employee
        or
        agent of a public international organization, or (iii) any official or employee
        or agent of a political party or candidate for political office.

       

      "Hazardous
        Materials"
        means
        any substances, materials or wastes classified, characterized or otherwise
        regulated under any Applicable Environmental Law as hazardous, toxic, pollutant,
        contaminant, or words of similar meaning or effect, as well as, any petroleum
        product, byproduct or constituent thereof.

       

      "IRS"
        means
        the United States Internal Revenue Service.

       

      "Knowledge"
        of a
        specified person (or similar references to a person's knowledge) means all
        information actually known to (i) such person, in the case of an
        individual, or (ii) in the case of a corporation or other entity, to an
        executive officer or employee of such person or any Affiliate of such person
        who
        devoted substantive attention to matters of such nature during the ordinary
        course of his employment by such person.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      "Lien"
        means
        any lien, mortgage, security interest, pledge, charge, option, or encumbrance
        of
        any kind.

       

      "Management
        Services Agreement"
        means a
        Management Services Agreement substantially in the form attached hereto as
        Exhibit
        A.

       

      "Master
        Services Agreement"
        means a
        Master Services Agreement substantially in the form attached hereto as
Exhibit
        B.

       

      "Material
        Adverse Effect"
        means a
        circumstance or event or set of circumstances or events that has a material
        adverse effect on (i) the business, property, operations, or financial condition
        of any person and its Affiliates taken as a whole, or (ii) the ability of
        any
        person to timely perform any of its material obligations under this Agreement
        or
        the Transaction Agreements.

       

      "Permits"
        means
        licenses, permits, franchises, consents, approvals, variances, exemptions,
        and
        other authorizations of or from Governmental Entities.

       

      "person"
        includes an individual, an estate, a corporation, a partnership, a limited
        liability company, an association, a joint stock company, a trust and any
        other
        entity or organization, including any Governmental Entity.

       

      "Policy"
        means
        the Company’s policy on ethical business practices and compliance with all
        applicable anti-bribery and corruption laws and regulations, as amended from
        time to time.

       

      "Proceedings"
        means
        all proceedings, actions, claims, suits, investigations, and inquiries by
        or
        before any arbitrator or Governmental Entity.

       

      "Release"
        means,
        with respect to any person, any release, spill, emission, leaking, pumping,
        injection, deposit, disposal, discharge, dispersal, leaching or migration,
        in
        each case, of any Hazardous Materials into the environment or into or out
        of any
        property owned by such person, including the movement of Hazardous Materials
        through or in the air, soil, surface water, ground water or
        property.

       

      "Repurchase
        Agreement"
        means
        that certain Repurchase Agreement between the Company, Challenger, MENA Oil
        Drilling Company Limited, a company registered in the Isle of Man ("MENA"),
        and
        Venture Capital Bank B.S.C.(c), a joint stock company incorporated in the
        Kingdom of Bahrain, pursuant to which the Company has agreed to repurchase
        shares of the Company proportionately from such shareholders and such
        shareholders have agreed to proportionately sell such shares of the Company
        to
        the Company in exchange for aggregate cash consideration of not more than
        US$5,000,000.00.

       

      "Rig
        Assignment"
        means
        the form of Rig Assignment attached hereto as Exhibit
        C.

       

      "Rigs"
        means
        the drilling rigs and other property relating to such drilling rigs, each
        as
        identified on Exhibit
        D.

       

      "Securities
        Act"
        means
        the United States Securities Act of 1933, as amended.

       

      "Shareholders'
        Agreement"
        means a
        Shareholders' Agreement substantially in the form attached hereto as
Exhibit
        E.

       

      "Solvent"
        means,
        as to any person at any time, having a state of affairs such that all of
        the
        following conditions are met: (i) the fair value of the property of such
        person is greater than the fair value of such person's liabilities (including
        disputed, contingent and unliquidated liabilities); (ii) the present fair
        salable value of the property of such person in an orderly liquidation of
        such
        person is not less than the amount that will be required to pay the probable
        liability of such person on its debts as they become absolute and matured;
        (iii) such person is able to realize upon its property and pay its debts
        and other liabilities (including disputed, contingent and unliquidated
        liabilities) as they mature
        in
        the normal course of business;
        (iv) such person does not intend to, and does not believe that it will,
        incur debts or liabilities beyond such person's ability to
        pay as
        such debts and liabilities mature;
        and (v) such person is not
        engaged in a business or a transaction, and is not about to engage in a business
        or a transaction, for which such person's property would constitute unreasonably
        small capital.

       

      "Transaction
        Agreements"
        means
        this Agreement, the Shareholders' Agreement, Management Services Agreement,
        Master Services Agreement, Rig Assignment, and Repurchase
        Agreement.

       

      “VCB
        Sale and Purchase Agreement”
means
        that certain Sale and Purchase Agreement dated 27 September 2007 between
        Venture
        Capital Bank B.S.C.(c) and Challenger pursuant to which Venture Capital Bank
        B.S.C.(c) purchased certain shares in the Company from Challenger. 

       

      (b)  In
        addition to the defined terms set forth in Section 1.1(a),
        the
        following terms used in this Agreement are defined in the sections or other
        subdivisions of this Agreement, as referenced below:

       


      
        	
                Defined
                  Term

              	
                Reference

              
	
                Audited
                  Financial Statements

              	
                Section
                  3.1(n)

              
	
                Basket

              	
                Section
                  4.2(d)

              
	
                Challenger

              	
                Preamble

              
	
                Closing

              	
                Section
                  2.4(a)

              
	
                Company

              	
                Preamble

              
	
                Damages

              	
                Section
                  4.2(a)

              
	
                Family
                  Members

              	
                Preamble

              
	
                Financial
                  Statements

              	
                Section
                  3.1(n)

              
	
                ICC

              	
                Section
                  5.6

              
	
                Indemnified
                  Party

              	
                Section
                  4.2(c)

              
	
                Indemnifying
                  Party

              	
                Section
                  4.2(c)

              
	
                Investment
                  Agreement

              	
                Section
                  2.2(j)

              
	
                Investor

              	
                Preamble

              
	
                Latest
                  Balance Sheet

              	
                Section
                  3.1(n)

              
	
                MENA

              	
                Definition
                  of Repurchase Agreement

              
	
                Material
                  Agreements

              	
                Section
                  3.1(l)

              
	
                Notice
                  of Dispute

              	
                Section
                  5.6

              
	
                Notice
                  Period

              	
                Section
                  4.2(c)

              
	
                Rules

              	
                Section
                  5.6

              
	
                Shares

              	
                Recital
                  A

              
	
                Subscription

              	
                Section
                  2.1

              
	
                Subscribed
                  Shares

              	
                Section
                  2.1

              
	
                Survival
                  Period

              	
                Section
                  4.1

              
	
                Unaudited
                  Financial Statements

              	
                Section
                  3.1(n)

              


      

    

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Section
        1.1.  References
        and Construction.

       

      (a)  All
        references in this Agreement to articles, sections, subsections and other
        subdivisions refer to corresponding articles, sections, subsections and other
        subdivisions of this Agreement unless expressly provided otherwise.

       

      (b)  Titles
        appearing at the beginning of any of such subdivisions are for convenience
        only
        and shall not constitute part of such subdivisions and shall be disregarded
        in
        construing the language contained in such subdivisions.

       

      (c)  The
        words
        "this Agreement", "this instrument", "herein", "hereof", "hereby", "hereunder"
        and words of similar import refer to this Agreement as a whole and not to
        any
        particular subdivision unless expressly so limited.

       

      (d)  Words
        in
        the singular form shall be construed to include the plural and vice versa,
        unless
        the context otherwise requires.

       

      (e)  Examples
        shall not be construed to limit, expressly or by implication, the matter
        they
        illustrate.

       

      (f)  The
        word
        "or" is not exclusive and the word "includes" and its derivatives shall mean
        "includes, but is not limited to" and corresponding derivative
        expressions.

       

      (g)  No
        consideration shall be given to the fact or presumption that one party had
        a
        greater or lesser hand in drafting this Agreement.

       

      (h)  All
        references herein to "US$" or "dollars" shall refer to U.S.
        Dollars.

       

      (i)  Unless
        the context otherwise requires or unless otherwise provided herein, the terms
        defined in this Agreement which refer to a particular agreement, instrument
        or
        document shall also refer to and include all renewals, extensions,
        modifications, amendments or restatements of such agreement, instrument or
        document, provided that nothing contained in this subsection
        (i)
        shall be
        construed to authorize such renewal, extension, modification, amendment or
        restatement.

       

      (j)  Exhibits
        A,
        B,
        C,
        D,
        E
        and
F,
        and
Schedules 3.1(a),
        3.1(b),
        3.1(d),
        3.1(k)
        and
3.1(l)
        to this
        Agreement are attached hereto, incorporated herein by reference and made
        a part
        hereof for all purposes. Any references to this Agreement shall also include
        such Exhibits and Schedules unless the context in which used shall otherwise
        require.

       

      ARTICLE
        II  

       

      SUBSCRIPTION
        OF SHARES

       

      Section
        2.1.  Subscription
        of Shares.

       

      On
        the
        Closing Date and upon the terms and subject
        to the conditions hereof, Investor hereby agrees to subscribe for (the
        "Subscription"),
        and
        the Company agrees to issue and allot to Investor, 16,239,316 Shares
        (the
        "Subscribed
        Shares")
        in
        exchange for the contribution of (i) the Rigs being contributed to the Company
        pursuant to the Rig Assignment, and (ii) US$5,000,000 cash.

       

      Section
        2.2.  Conditions
        Precedent to the Obligations of Investor.

       

      Investor's
        obligation to subscribe for the Subscribed Shares on the Closing Date pursuant
        to Section 2.1
        is
        subject to the satisfaction or waiver, on or before the Closing Date, of
        the
        conditions contained in this Section 2.2:

       

      (a)  The
        representations and warranties of the Company, Challenger and the Family
        Members
        contained in Section
        3.1
        of this
        Agreement shall have been true and correct on the date made and shall be
        true
        and correct in all respects as of the Closing Date, as if made as of such
        date
        (except that representations and warranties made as of a specific date need
        be
        true only as of that date).

       

      (b)  The
        representations and warranties of the Company, Challenger, and the Family
        Members contained in the Transaction Agreements (excluding this Agreement),
        and
        the representations and warranties of each other party to the Transaction
        Agreements (excluding Investor, if applicable) shall have been true and correct
        on the date made and shall be true and correct in all respects as of the
        Closing
        Date, as if made as of such date (except that representations and warranties
        made as of a specific date need be true only as of that date).

       

      (c)  The
        Company, Challenger and the Family Members shall have performed in all material
        respects all of its obligations and covenants under this Agreement and each
        other Transaction Agreement required to be performed by it on or prior to
        the
        Closing Date.

       

      (d)  No
        event
        shall have occurred that has a Material Adverse Effect on the Company in
        the
        Investor's opinion, acting reasonably.

       

      (e)  Investor
        shall have received a certificate of existence and good standing or equivalent
        from the relevant authority in the Isle of Man with respect to the
        Company.

       

      (f)  Investor
        shall have received a certificate of existence and good standing or equivalent
        from the relevant authority in Bermuda with respect to Challenger.

       

      (g)  (i)
        There
        shall be no Proceedings pending or, to the Company's Knowledge threatened,
        against or affecting the Company, any subsidiary, or any of their respective
        properties or rights or any of their respective officers or directors, before
        any Governmental Entity which (A) seeks to restrain, enjoin or prevent the
        consummation of the transactions contemplated in any Transaction Agreement,
        or
        (B) questions the validity or legality of any such transaction,
        and
        (ii) to the Company's Knowledge, there shall be no valid basis for any such
        Proceeding.

       

      (h)  The
        Company shall have obtained a United States Federal Employer Identification
        Number from the IRS.

       

      (i)  The
        Company shall have made an election on IRS Form 8832 to be taxed as a
        partnership for U.S. federal income tax purposes.

       

      (j)  Investor
        shall have received evidence satisfactory to it of the termination of (i)
        that
        certain Investment Agreement (the “Investment
        Agreement”)
        dated
        20 October 2006 among the Company, MENA, the Family Members and certain other
        shareholders of the Company, provided that the Investment Agreement shall
        not
        terminate with respect to the warranties and limitations on claims in clause
        4
        and Schedule 5 and with respect to clauses 16 through 25, (ii) that certain
        Shareholders' Agreement dated 20 October 2006 among the Company, MENA, the
        Family Members and certain other shareholders of the Company, and (iii) any
        and
        all agreements contemplated thereby, except that certain Advisory and
        Consultancy Agreement dated as of 20 October 2006 by and between Venture
        Capital
        Bank B.S.C.(c) and the Company.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (k)  Investor
        shall have received evidence satisfactory to it of the due and valid execution
        and binding effect of each of the Transaction Agreements with respect to
        each
        other party thereto.

       

      (l)  The
        Company shall have fully satisfied (including with respect to rights of timely
        notification) or obtained enforceable waivers in respect of any preemptive
        or
        similar rights directly or indirectly affecting the issuance of the Shares
        pursuant to this Agreement.

       

      (m)  The
        Company shall have delivered to Investor at the Closing the
        following:

       

      (i)  a
        certificate executed by the Company's Chief Executive Officer or President
        on
        behalf of the Company and by Challenger certifying that the conditions specified
        in Section
        2.2
        have
        been satisfied;

       

      (ii)  a
        certificate of the Company executed by the Company's Secretary attaching
        and
        certifying to the truth and correctness of (A) the Company's Governing
        Documents, and (B) the board and shareholder resolutions adopted in connection
        with the transactions contemplated by this Agreement and the other Transaction
        Agreements; 

       

      (iii)  evidence
        of the subscription of the Subscribed Shares. The relevant share certificate
        or
        certificates shall be issued as soon as reasonably practicable thereafter;
        and

       

      (iv)  an
        opinion from the Company's legal counsel in the Isle of Man, in substantially
        the form attached as Exhibit
        G.

       

      (n)  Any
        background checks on any Family Member or member of management of the Company
        or
        Challenger completed by Investor (which may be performed by Investor at its
        sole
        discretion) and all other due diligence conducted by Investor and its
        representatives in connection with the proposed transactions contemplated
        hereby
        and in the other Transaction Agreements shall not have caused Investor or
        its
        representatives to become aware of any facts relating to the business, assets,
        results of operations, condition (financial or otherwise), or prospects of
        the
        Company or any subsidiary of the Company, Challenger, or any Family Member
        which, in the good faith judgment of Investor, make it inadvisable for Investor
        to proceed with the consummation of the transactions contemplated hereby
        and
        thereby.

       

      Section
        2.3.  Closing
        Conditions of the Company.

       

      The
        Company's obligation to issue and allot the Subscribed Shares is subject
        to the
        satisfaction or waiver, on or before the Closing Date, of the conditions
        contained in this Section 2.3:

       

      (a)  All
        limited liability company action necessary by Investor to authorize the
        execution, delivery and performance of this Agreement and the other Transaction
        Agreements to which Investor is a party, and the consummation of the
        transactions contemplated hereby and thereby shall have been duly and validly
        taken.

       

      (b)  Investor
        shall tender to the Company US$5,000,000 cash, by wire transfer of immediately
        available funds to an account or accounts designated by the Company, such
        designation to be provided not later than at least one Business Day
        prior to
        Closing.

       

      (c)  Investor
        shall execute and deliver the Rig Assignment and the other Transaction
        Agreements to which it is a party.

       

      (d)  The
        representations and warranties of Investor contained in this Agreement and
        the
        other Transaction Agreements to which it is a party shall have been true
        and
        correct on the date made and shall be true and correct in all material respects
        at and as of the Closing Date, as if made at and as of such date (except
        that
        representations and warranties made as of a specific date need be true only
        as
        of that date). 

       

      (e)  Investor
        shall have performed in all material respects all of its obligations under
        this
        Agreement and each other Transaction Agreement required to be performed by
        it on
        or prior to the Closing Date.

       

      (f)  There
        shall be no Proceedings pending or, to Investor's Knowledge threatened, against
        or affecting Investor, before any Governmental Entity which (i) seeks to
        restrain, enjoin or prevent the consummation of the transactions contemplated
        by
        this Agreement or any other Transaction Agreement, or (ii) questions the
        validity or legality of any such transaction, and to Investor's Knowledge,
        there
        shall be no valid basis for any such Proceeding.

       

      (g)  No
        event
        shall have occurred that has a Material Adverse Effect on Investor in the
        Company's opinion, acting reasonably.

       

      (h)  Investor
        shall have given the Company an opportunity to inspect the Rigs for the purpose
        of confirming that they meet the technical specifications set forth on
Exhibit
        D
        hereto
        and are adequate for their intended purpose, and Company shall have confirmed
        same to its reasonable satisfaction. The Investor shall have assigned to
        the
        Company all available manufacturer warranties in connection with the Rigs,
        if
        any.

       

      (i)  The
        Company shall have received evidence satisfactory to it of the due and valid
        execution and binding effect of each of the Transaction Agreements with respect
        to each other party thereto.

       

      Section
        2.4.  Closing;
        Termination.

       

      (a)  Subject
        to the satisfaction of each of the conditions precedent set forth in
Sections 2.2
        and
2.3
        (which
        conditions, if satisfied, shall be deemed to have been satisfied
        simultaneously), the closing of the Subscription (the "Closing")
        shall
        take place at the offices of the Company in either Tripoli, Libya or Cairo,
        Egypt, as soon as possible, but in no event later than December 31, 2007,
        or at
        such other place or time as may be agreed upon by the Company and the
        Investor.

       

      (b)  This
        Agreement may be terminated by any party hereto if the Closing has not occurred
        (other than through the failure of any party seeking to terminate this Agreement
        to comply fully with its obligations under this Agreement) on or before December
        31, 2007; provided, that Article V
        shall
        survive notwithstanding any such termination.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      ARTICLE
        III  

       

      REPRESENTATIONS
        AND WARRANTIES

       

      Section
        3.1.  Representations
        and Warranties of the Company,
        Challenger, and Each Family Member.  Subject
        to and qualified by the matters disclosed in the Schedules and the Disclosure
        Letter to Investor, the Company, Challenger and each Family Member, jointly
        and
        severally, represent and warrant to Investor that:

       

      (a)  The
        Company is a company limited by shares duly organized, validly existing and
        in
        good standing under the Companies Act of 2006 of the Isle of Man. Challenger
        is
        a company registered in Bermuda under company number 38486. Challenger has
        been
        duly formed, is validly existing, and is in good standing. The Company does
        not
        own, directly or indirectly, any capital stock or other equity securities
        or
        ownership interest of any person other than those persons listed on Schedule
        3.1(a).
        Schedule
        3.1(a)
        lists
        each subsidiary of the Company, the jurisdiction of incorporation or formation
        of each subsidiary, the authorized and outstanding capital stock or other
        equity
        securities or ownership interests of each subsidiary as well as each branch
        of
        the Company. Each subsidiary is duly organized, validly existing and, if
        applicable, in good standing under the laws of the jurisdiction of its
        formation.

       

      (b)  Each
        of
        the Company and its subsidiaries is duly licensed or qualified to transact
        business and is in good standing in each jurisdiction in which the nature
        of the
        business transacted by it or the character of the properties owned or leased
        by
        it requires such licensing or qualification. Each of the Company and the
        subsidiaries has full power and authority to own, lease, operate, and hold
        its
        properties and to carry on its business as now conducted and as proposed
        to be
        conducted. No Proceedings to dissolve the Company or any subsidiary are pending.
        Each of the Company, Challenger, and each Family Member has full power and
        authority to execute, deliver and perform this Agreement and the other
        Transaction Agreements to which it is a party. The Company has full power
        and
        authority to issue, allot and
        deliver
        the Subscribed Shares in accordance with this Agreement. The officers and
        directors of the Company and each of its subsidiaries are listed on Schedule
        3.1(b).
        The
        Company has delivered to Investor (i) accurate and complete copies of the
        Governing Documents of each of the Company and its subsidiaries as currently
        in
        effect, (ii) the share (or similar) records of each of the Company and its
        subsidiaries, and (iii) the minutes of all meetings of the respective boards
        of
        directors (or comparable governing entities) of the Company and its
        subsidiaries, any committees of such boards or entities, and the owners of
        the
        Company and its subsidiaries (and all consents in lieu of such meetings).
        Such
        records, minutes, and consents accurately reflect the stock or other equity
        ownership of the Company and its subsidiaries and all actions taken by such
        boards or governing entities, committees, and owners.

       

      (c)  The
        execution and delivery by the Company, Challenger, and each Family Member
        of
        this Agreement and the other Transaction Agreements, the performance of its
        obligations hereunder and thereunder and the issuance, sale and delivery
        by the
        Company of the Subscribed Shares pursuant hereto have (or will have) been
        duly
        authorized by all requisite company action and will not (i) result in a
        violation of any Applicable Law, (ii) conflict with, result in a breach of,
        or constitute (or, with due notice or lapse of time or both, would constitute)
        a
        default under, or give rise to any right of termination, acceleration or
        cancellation under, any indenture, agreement, contract, license, arrangement,
        understanding, evidence of indebtedness, note, lease or other instrument
        to
        which the Company or any subsidiary or any of its properties or assets are
        bound, (iii) result in the creation or imposition of any Lien upon the
        Company or any subsidiary or any of its properties or assets, or
        (iv) require any consent, approval, notification, waiver or other similar
        action from or to any Governmental Entity or other third party.

       

      (d)  Upon
        consummation of the transactions contemplated herein, Investor will acquire
        good, valid, and marketable title to the Subscribed Shares, free and clear
        of
        all Liens, other than (i) those that may arise by virtue of any actions taken
        by
        or on behalf of Investor or its Affiliates, (ii) restrictions on transfer
        that
        may be imposed by applicable securities laws, (iii) inchoate liens arising
        by
        operation of law with respect to taxes or other amounts not due and payable,
        or
        (iv) at and after the Closing, the terms and provisions of the Shareholders'
        Agreement. After the issuance of the Subscribed Shares and the redemption
        by the
        Company of Shares pursuant to the Repurchase Agreement, the ownership of
        the
        Company will be as set forth on Schedule
        3.1(d).
        Except
        as provided in the Shareholders' Agreement, or Repurchase Agreement, there
        are
        no outstanding or authorized options, warrants, purchase rights, subscription
        rights, conversion rights, exchange rights, or other contracts or commitments
        that could require the Company to issue, sell, or otherwise cause to become
        outstanding any of the equity interests of the Company. There are no outstanding
        or authorized equity appreciation, phantom equity, profit participation,
        or
        similar rights with respect to the Company. Other than those set forth in
        the
        Shareholders' Agreement, there are no voting trusts, proxies, or other
        agreements or understandings with respect to the voting of the equity interests
        in the Company. Other than as set forth in the Shareholders' Agreement, no
        person has demand or other rights to cause the Company to file any registration
        statement under the Securities Act relating to any securities of the Company
        or
        any of its subsidiaries or any right to participate in any such registration
        statement, including piggyback registration rights.

       

      (e)  No
        registration or filing with, or consent or approval of or other action by,
        any
        Governmental Entity or any third party is or will be necessary for the
        Company's, Challenger's, or any Family Member's valid execution, delivery
        and
        performance of this Agreement or the other Transaction Agreements, or the
        issuance, sale and delivery of the Subscribed Shares, other than those
        (i) which have previously been obtained or made, or (ii) which are
        required to be made (if any) under applicable securities laws, which will
        be
        obtained or made, and will be effective within the
        time
        periods required by Applicable Law.

       

      (f)  This
        Agreement and each other Transaction Agreement to which the Company, Challenger,
        or a Family Member is a party has been duly authorized, executed and delivered
        by the Company, Challenger, or a Family Member, as applicable and constitutes
        the legal, valid and binding obligation of the Company, Challenger, or a
        Family
        Member, as applicable, enforceable against such person in accordance with
        its
        terms, except to the extent limited by (i) applicable bankruptcy,
        insolvency, reorganization, moratorium or similar laws of general application
        related to the enforcement of creditors' rights generally, and (ii) general
        principles of equity, and except that enforcement of rights to indemnification
        and contribution contained therein may be limited by applicable federal or
        state
        laws or the public policy underlying such laws, regardless of whether
        enforcement is considered in a proceeding in equity or at law. 

       

      (g)  There
        are
        no actions, suits, claims, Proceedings, investigations, or litigation pending
        or, to the Company's Knowledge, threatened which involve, affect or relate
        to
        the Company, or the Company's assets, that could reasonably be expected to
        have
        a Material Adverse Effect, and the Company has no Knowledge of any reasonable
        basis for any such action, suit, claim, Proceeding, or investigation. There
        are
        no orders, writs, injunctions, or decrees of any Governmental Entity relating
        to
        or affecting the Company or the Company's assets.

       

      (h)  The
        Company, its subsidiaries and each of their respective officers, directors,
        employees and agents acting on their behalf, have complied in all material
        respects with all Applicable Laws,
        including, without limitation, Applicable Environmental Laws. The Company
        has
        not received any written notice, which has not been dismissed or otherwise
        disposed of, that the Company has not so complied with any Applicable Law.
        Neither the Company nor any of its officers, directors, equityholders, or
        Affiliates is charged or to their Knowledge threatened with, or under
        investigation with respect to, any violation of any Applicable Law relating
        to
        any aspect of the business of the Company. 

       

      (i)  
        (A)
In
        connection with the acquisition, operation or maintenance of any of the
        Company’s assets and business, the transactions contemplated by this Agreement
        or any by any other Transaction Agreement:

       

      (1)
         The
        Company, Challenger and the Family Members have not, and to their actual
        knowledge, their respective shareholders, officers, directors, employees,
        agents, subcontractors, Affiliates or any other person or entity acting on
        their
        behalf have not, made, offered or authorized, are not aware of and will not
        make, offer or authorize, any payment, loan or gift of anything of value
        to a
        Government Official for purposes of influencing any act, decision, or omission
        of any Government Official or for securing any improper advantage for any
        person
        (such as, without limitation, a decision of a Government Official to award
        a
        contract or to grant preferential tax treatment).

       

      (2)
         The
        Company, Challenger and the Family Members have not, and to their actual
        knowledge, their respective shareholders, officers, directors, employees,
        agents, subcontractors, Affiliates or any other person or entity acting on
        their
        behalf have not, made, offered or authorized, are not aware of and will not
        make, offer or authorize any payment, loan or gift of anything of value to
        any
        person while knowing or having reasons to suspect that any part of such offer,
        payment, loan or gift will be given or offered to a Government Official for
        purposes of influencing any act, decision, or omission of any Government
        Official or for securing any improper advantage for any person (such as,
        without
        limitation, a decision of a Government Official to award a contract or to
        grant
        preferential tax treatment).

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (3)
         The
        Company, Challenger and the Family Members have not, and to their actual
        knowledge, their respective shareholders, officers, directors, employees,
        agents, subcontractors, Affiliates or any other person or entity acting on
        their
        behalf have not, made, offered or authorized, are not aware of and will not
        make, offer or authorize, any payment, loan or gift of anything of value
        to a
        Government Official or to any other person in violation of any applicable
        statue, law or regulation of any government or entity exercising executive,
        legislative, judicial, regulatory or administrative functions of or pertaining
        to government.

       

      (B)
        (1)
 The
        Company maintains and will continue to maintain accurate and reasonably detailed
        books, records and accounts which fairly and accurately reflect all transactions
        and dispositions of assets. The Company's books, records and accounts do
        not
        contain and will not contain any false or misleading entries, and there are
        no,
        and there will be no, undisclosed or unrecorded accounts related to the Company.
        

       

      (2)
         The
        business and operations of the Company have been and will continue to be
        conducted in accordance with good and sound ethical business practices, and
        in
        accordance with the general principles contained in the U.N. Convention against
        Corruption of October 31, 2003 (ratified by Libya on June 7, 2005) or the
        general principles contained in the African Convention on Preventing and
        Combating Corruption of July 11, 2003 (ratified by Libya on May 23, 2004).
        

       

      (3)
         To
        the
        best of their knowledge and belief, no ownership interest in the Company
        is
        directly or indirectly held or controlled by a Government Official, or any
        immediate relative of a Government Official of a jurisdiction applicable
        to the
        Company. 

       

      (4)
         No
        Government Official, or any immediate relative of any Government Official,
        will,
        directly or indirectly, receive any portion of the price to be paid by Investor
        pursuant to this Agreement or the Transaction Agreements, or any other benefit
        or value by reason of or in connection with the execution of this Agreement
        or
        any other Transaction Agreement by the parties.

       

      (j)  The
        Company has complied in all material respects with all Applicable Laws in
        connection with the offer, issuance and subscription of the Subscribed Shares.
        Neither the Company nor to the Company's Knowledge any person acting on its
        behalf has taken any other action so as to subject the offering, issuance
        or
        sale of the Subscribed Shares to the registration provisions of the Securities
        Act.

       

      (k)  Schedule
        3.1(k)
        contains
        a complete and accurate list of assets of the Company on the date hereof.
        The
        equipment and other personal property and fixtures forming a part of the
        Company's assets are in good repair and condition, free from material defects,
        and are adequate for the normal operation of the Company's business in
        accordance with prudent industry standards. Except as set forth on Schedule
        3.1(k),
        the
        Company owns such assets free and clear of any Liens. 

       

      (l)  Schedule
        3.1(l)
        lists
        all material contracts, agreements, licenses, and Permits to which the Company
        is a party or which relate to the Company's assets (the "Material
        Agreements").
        Such
        Material Agreements are in full force and effect in all material respects
        and
        constitute valid and binding obligations of the parties thereto. The Company
        is
        not in breach or default (and no situation exists which with the passing
        of time
        or giving of notice would create a breach or default) of its obligations
        under
        the Material Agreements, and no breach or default by any third party (or
        situation which, with the passage of time or giving of notice would create
        a
        breach or default) exists, to the extent such breach or default (whether
        by the
        Company or such a third party), could reasonably be expected to have a Material
        Adverse Effect on the Company. All payments owing under the Material Agreements
        have been and are being made (timely, and before the same became delinquent)
        by
        the Company in all material respects. For the purposes of the representations
        contained in this Section
        3.1(l)
        (and
        without limitation of such representations), the non-payment of an amount,
        or
        non-performance of an obligation, where such non-payment, or non-performance,
        could result in the forfeiture or termination of rights of the Company under
        a
        Material Agreement, shall be considered material.

       

      (m)  (A)
        The
        properties, operations, and activities of the Company comply with all Applicable
        Environmental Laws that could reasonably be expected to have a Material Adverse
        Effect on the Company; (B) the Company, and the properties, operations, and
        activities of the Company are not subject to any existing, pending, or, to
        the
        Company's Knowledge, threatened Proceeding under, or to any remedial obligations
        under, any Applicable Environmental Laws; (C) all Permits, if any, required
        to
        be obtained by the Company under any Applicable Environmental Laws in connection
        with any aspect of the business of the Company, including without limitation
        those relating to the treatment, storage, disposal, or Release of a Hazardous
        Material, have been duly obtained and are in full force and effect, and the
        Company is in compliance with the material terms and conditions of all such
        Permits; and (D) to the Company's Knowledge there are no physical or
        environmental conditions existing on any property owned or leased by the
        Company
        or resulting from the Company's operations or activities, past or present,
        at
        any location, that would give rise to any on-site or off-site remedial
        obligations under any Applicable Environmental Laws; (F) all Hazardous Materials
        generated by the Company or used in connection with their respective properties,
        operations, or activities have been transported only by carriers authorized
        under Applicable Environmental Laws to transport such materials, and have
        been
        disposed of only at treatment, storage, and disposal facilities authorized
        under
        Applicable Environmental Laws to treat, store, or dispose of such materials;
        and
        (G) there has been no exposure of any person or property to Hazardous Materials,
        nor has there been any Release of Hazardous Materials into the environment
        in
        violation of any Applicable Environmental Laws, by the Company or in connection
        with its properties, operations, or activities that could reasonably be expected
        to give rise to any material claim for damages or compensation. The Company
        has
        made available to Investor all internal and external environmental audits
        and
        studies and all correspondence on substantial environmental matters in the
        possession of the Company relating to any of the current or former assets,
        operations, or activities of the Company.

       

      (n)  The
        Company has delivered to Investor accurate and complete copies of (A) the
        Company's audited consolidated balance sheet as of December 31, 2006, and
        the
        related audited consolidated statements of income, shareholders' equity and
        cash
        flows for the year then ended, and the notes and schedules thereto, together
        with the unqualified report thereon of PricewaterhouseCoopers (Egypt),
        independent public accountants (the "Audited
        Financial Statements"),
        and
        (B) the Company's unaudited consolidated balance sheet as of October 31,
        2007 (the "Latest
        Balance Sheet"),
        and
        the related unaudited consolidated statements of income, shareholders' equity
        and cash flows for the ten month period then ended (the "Unaudited
        Financial Statements"),
        in
        each case certified by the Company's chief financial officer (collectively,
        the
        "Financial
        Statements").
        The
        Financial Statements: (x) represent actual bona fide transactions;
        (y) have been prepared from the books and records of the Company and its
        consolidated subsidiaries in conformity with International Financial Reporting
        Standards, applied on a basis consistent with preceding years throughout
        the
        periods involved, except that the Unaudited Financial Statements are not
        accompanied by notes or other textual disclosure required by such accounting
        principles; and (z) fairly present the Company's consolidated financial
        position as of the respective dates thereof and its consolidated results
        of
        operations and cash flows for the periods then ended, except that the Unaudited
        Financial Statements are subject to normal year-end adjustments which will
        not
        be material in the aggregate. Neither the Company nor any of its subsidiaries
        has any liabilities or obligations, whether accrued, contingent, liquidated
        or
        otherwise, except liabilities or obligations (A) reflected in the Latest
        Balance
        Sheet, (B) described in the notes accompanying the Audited Financial Statements,
        or (C) incurred in the ordinary course of business since the date of the
        Latest
        Balance Sheet consistent with past practice (none of which is a material
        liability for breach of contract, breach of warranty, tort, or infringement).
        There has been no Material Adverse Effect on the Company since the date of
        the
        Latest Balance Sheet.

       

      (o)  The
        Company and its subsidiaries have no liabilities or obligations of any nature
        (whether known or unknown and whether absolute, accrued, contingent, or
        otherwise) except for (A) liabilities or obligations reflected or reserved
        against in the Latest Balance Sheet, (B) liabilities or obligations that
        are
        neither (x) required to be reflected on or reserved against in the Latest
        Balance Sheet under International Financial Reporting Standards as applied
        by
        the Company nor (y) could be reasonably expected to have a Material Adverse
        Effect, and (C) current liabilities incurred in the ordinary course of business
        since the date of the Latest Balance Sheet.

       

      (p)  Since
        the
        date of the Latest Balance Sheet, the Company has conducted its business
        only in
        the ordinary course of business and there has not been any:

       

      (i)  material
        payment or increase by the Company of any bonuses, salaries, or other
        compensation to any shareholder, member, partner, manager officer, or employee
        or entry into any employment, severance, or similar contract with any manager,
        officer, or employee;

       

      (ii)  adoption
        of, or material increase in the payments to or benefits under, any profit
        sharing, bonus, deferred compensation, savings, insurance, pension, retirement,
        or other employee benefit plan for or with any employees of the
        Company;

       

      (iii)  damage
        to
        or destruction or loss of any asset or property of the Company, whether or
        not
        covered by insurance, materially and adversely affecting the properties,
        assets,
        business, financial condition, or prospects of the Company and its subsidiaries,
        taken as a whole;

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (iv)  entry
        into, termination of, or receipt of notice of termination of (i) any material
        license, distributorship, dealer, sales representative, joint venture, credit,
        or similar agreement, or (ii) any material contract or transaction;

       

      (v)  sale
        (other than sales of inventory in the ordinary course of business), lease,
        or
        other disposition of any asset or property of the Company or mortgage, pledge,
        or imposition of any lien or other encumbrance on any material asset or property
        of the Company;

       

      (vi)  cancellation
        or waiver of any claims or rights with a value to the Company in excess of
        US$500,000;

       

      (vii)  material
        change in the accounting methods used by the Company; 

       

      (viii)  (A)
        split, combination, or reclassification any shares of the Company's capital
        stock; (B) declaration or payment of any dividend or other distribution (whether
        in cash, stock, or property or any combination thereof) in respect of the
        Company's capital stock; or (C) except as provided in the Repurchase Agreement
        or the VCB Sale and Purchase Agreement, repurchase, redemption, or other
        acquisition any of the Company's securities or any securities of any subsidiary
        of the Company; or

       

      (ix)  agreement,
        whether oral or written, by the Company to do any of the foregoing.

       

      (q)  The
        Company and its subsidiaries maintain insurance for its benefit in coverages
        and
        amounts standard for their industry. Neither the Company nor any subsidiary
        of
        the Company is in default with respect to any provision in any current policy
        maintained for its benefit, and all such insurance is in full force and effect.
        Neither the Company nor any subsidiary of the Company has received, nor does
        the
        Company have any Knowledge of, any notice of cancellation or non-renewal
        of any
        such insurance policy. Neither the Company nor any subsidiary of the Company
        has
        been refused any insurance with respect to its assets, properties, or
        businesses.

       

      (r)  None
        of
        the Company's or any subsidiary's current customers or suppliers has refused,
        or
        communicated that it will or may refuse, to purchase or supply products or
        services from or to the Company or any subsidiary thereof or has communicated
        that it will or may substantially reduce the amount of products or services
        that
        it is willing to purchase from or supply to the Company or any subsidiary
        thereof.

       

      (s)  The
        Company has paid all amounts due on account of any income, ad valorem, excise,
        profits, franchise, occupation, property, payroll, sales, use, gross receipts
        and other taxes (and any interest and penalties) and assessments imposed
        on its
        assets or business by any Governmental Entity the nonpayment of which could
        reasonably be expected to have a Material Adverse Effect on the Company,
        except
        for amounts not yet due and owing. All tax returns and reports required to
        be
        filed for all such taxes have been filed with all such taxing authorities,
        and
        all such tax returns and reports are true and correct. No assessments of
        deficiencies have been made against the Company which are presently pending
        or
        outstanding, and no state or facts exist which would constitute grounds for
        any
        such assessment.

       

      (t)  Investor
        has been provided with an accurate list of the names and salary rates of
        all
        present officers and management employees of the Company, together with any
        bonuses paid or payable to such persons for the year ended December 31, 2006
        or
        since that date, and to the extent existing on the date of this Agreement,
        all
        arrangements with respect to any bonuses or additional compensation to be
        paid
        to them from and after the date of this Agreement and all accrued paid vacation,
        to date, if any. None of the Company's employees is obligated under any contract
        (including licenses, covenants or commitments of any nature) or other agreement,
        or subject to any judgment, decree or order of any court or administrative
        agency, that would materially interfere with such employee's ability to promote
        the interest of the Company or that would conflict with the Company's business.
        Neither the execution or delivery of the Transaction Agreements, nor the
        carrying on of the Company's business by the employees of the Company, nor
        the
        conduct of the Company's business as now conducted and as presently proposed
        to
        be conducted, will, to the Company's Knowledge, conflict with or result in
        a
        breach of the terms, conditions, or provisions of, or constitute a default
        under, any contract, covenant or instrument under which any such employee
        is now
        obligated. The Company is not delinquent on any material payments to any
        of its
        employees, consultants, or independent contractors for any wages, salaries,
        commissions, bonuses, or other direct compensation for any service performed
        for
        it to the date hereof or amounts required to be reimbursed to such employees,
        consultants, or independent contractors. The Company has complied with all
        applicable laws related to employment, including those related to wages,
        hours,
        worker classification, collective bargaining, and the payment and withholding
        of
        taxes and other sums as required by law except where noncompliance with any
        Applicable Law would not result in a Material Adverse Effect on the Company.
        The
        Company has withheld and paid to the appropriate Governmental Entity or is
        holding for payment not yet due to such Governmental Entity all amounts required
        to be withheld from employees of the Company and is not liable for any arrears
        of wages, taxes, penalties, or other sums for failure to comply with any
        of the
        foregoing. The Company has made all required contributions and has no liability
        to each employee benefit plan maintained, established or sponsored by the
        Company, or which the Company participates in or contributes to, and has
        complied in all material respects with all Applicable Laws for any such employee
        benefit plan. The Company is not bound by or subject to (and none of its
        assets
        or properties is bound by or subject to) any written or oral, express or
        implied, contract, commitment or arrangement with any labor union, and no
        labor
        union has requested or, to the Knowledge of the Company, has sought to represent
        any of the employees, representatives or agents of the Company. There is
        no
        strike or other labor dispute involving the Company pending, or to the Company's
        Knowledge, threatened, which would have a Material Adverse Effect on the
        Company, nor is the Company aware of any labor organization activity involving
        its employees.

       

      (u)  All
        books
        and records of the Company and its subsidiaries are true and complete in
        all
        material respects, have been maintained in accordance with good business
        practice and in accordance with all Applicable Laws. The corporate records
        of
        the Company reflect a true record of all meetings and proceedings of its
        board
        of directors and shareholders.

       

      (v)  The
        Company and its subsidiaries either own or have valid licenses or other rights
        to use all material patents, copyrights, trademarks, software, databases,
        engineering data and other technical information used in their businesses
        as
        presently conducted.

       

      (w)  As
        of the
        Closing Date after giving effect to the transactions contemplated herein
        and in
        each of the Transaction Agreements, the Company is Solvent.

       

      (x)  Except
        with respect to financial projections, all information heretofore furnished
        by
        the Company to Investor with respect to the Company, its subsidiaries, and
        their
        respective properties and operations, taken in the aggregate, is true and
        correct in all material respects and does not omit any information that is
        necessary to prevent such information from being misleading in any material
        respect.

       

      (y)  The
        Company, as a drilling contractor, is a sophisticated purchaser of the Rigs,
        has
        inspected the Rigs to its complete satisfaction, is purchasing the Rigs on
        an
        "as is," "where is," basis, without any warranty by the Investor, either
        express
        or implied, based on the Company's inspection and knowledge of drilling
        equipment and drilling rigs and not on any representation made by Investor
        or
        any of its Affiliates or representatives as to the physical condition, design,
        operation or fitness for a particular purpose, except with respect to any
        representations of Investor with respect thereto specifically set forth in
        Section
        3.2
        of this
        Agreement. 

       

      (z)  No
        agent,
        broker, investment banker, finder, financial advisor or other person is or
        will
        be entitled to any broker's or finder's fee or any other commission or similar
        fee from the Company in connection with the transactions contemplated in
        this
        Agreement or the Transaction Agreements, and no person is entitled to any
        fee or
        commission or like payment in respect thereof based in any way on agreements,
        arrangements or understandings made by or on the Company's behalf.

       

      
        Section
          3.2.  Representations
          and Warranties of Investor.  Investor
          represents and warrants to the Company that:

         

        (a)  Investor
          is a limited liability company duly organized, legally existing and in
          good
          standing under the laws of the State of Delaware.

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        (b)  Investor
          has full power and authority to execute, deliver, and perform this Agreement
          and
          each other Transaction Agreement, instrument, or document executed or to
          be
          executed by Investor in connection with the transactions contemplated herein
          to
          which it is a party and to consummate the transactions contemplated herein
          and
          therein, and to conduct its business generally in the manner that it is
          currently being conducted. The execution, delivery, and performance by
          Investor
          of this Agreement and each other Transaction Agreement, instrument, or
          document
          executed or to be executed by Investor in connection with the transactions
          contemplated herein to which it is a party, and the consummation by it
          of the
          transactions contemplated herein and therein, have been duly authorized
          by all
          necessary action of Investor.

         

      

      (c)  This
        Agreement has been duly executed and delivered by Investor and constitutes,
        and
        each other Transaction Agreement executed or to be executed by Investor in
        connection with the transactions contemplated herein to which it is a party
        has
        been, or when executed will be, duly executed and delivered by Investor and
        constitutes, or when executed and delivered will constitute, a valid and
        legally
        binding obligation of Investor, enforceable against it in accordance with
        its
        respective terms, except that such enforceability may be limited by (a)
        applicable bankruptcy, insolvency, reorganization, moratorium, and similar
        laws
        affecting creditors' rights generally and (b) equitable principles which
        may
        limit the availability of certain equitable remedies (such as specific
        performance) in certain instances. 

       

      (d)  The
        execution, delivery, and performance by Investor of this Agreement and each
        other Transaction Agreement, instrument, or document executed or to be executed
        by Investor in connection with the transactions contemplated herein to which
        it
        is a party and the consummation by it of the transactions contemplated herein
        and therein do not and will not (a) conflict with or result in a violation
        of any provision of the governing instruments of Investor, (b) conflict
        with or result in a violation of any provision of, or constitute (with or
        without the giving of notice or the passage of time or both) a default under,
        or
        give rise (with or without the giving of notice or the passage of time or
        both)
        to any right of termination, cancellation, or acceleration under, any bond,
        debenture, note, mortgage, indenture, lease, contract, agreement, or other
        instrument or obligation to which Investor is a party or by which Investor
        or
        any of its properties may be bound, (c) result in the creation or
        imposition of any Lien upon the properties of Investor, or (d) violate any
        Applicable Law binding upon Investor.

       

      (e)  Except
        as
        set forth on Schedule
        3.2(e),
        no
        consent, approval, order, or authorization of, or declaration, filing, or
        registration with, any Governmental Entity or of any third party is required
        to
        be obtained or made by Investor in connection with the execution, delivery,
        or
        performance by Investor of this Agreement and each other agreement, instrument,
        or document executed or to be executed by Investor in connection with the
        transactions contemplated herein to which it is a party or the consummation
        by
        it of the transactions contemplated herein and therein.

       

      (f)  There
        are
        no Proceedings pending or, to Investor's Knowledge, threatened, in which
        Investor or an Affiliate is or may be a party affecting the execution and
        delivery of this Agreement by Investor or the consummation of the transactions
        contemplated herein by Investor.

       

      (g)  The
        Investor, its Affiliates and each of their respective officers, directors,
        employees and agents acting on their behalf, have complied in all material
        respects with all Applicable Laws. The Investor has not received any written
        notice, which has not been dismissed or otherwise disposed of, that the Investor
        has not so complied with any Applicable Law. Neither the Investor nor any
        of its
        officers, directors, equity holders, or Affiliates is charged or to their
        Knowledge threatened with, or under investigation with respect to, any violation
        of any Applicable Law.

       

      (h)  Each
        of
        the Rigs is (i) legally and beneficially owned solely by the Investor and
        will
        be conveyed free from any liens and other encumbrances, and (ii) where capable
        of possession, in the possession or under the control of the
        Investor.

       

      (i)  Exhibit
        D
        contains
        a complete and accurate list of the Rigs and their associated components
        and
        specifications and the Rigs materially conform to such
        specifications.

       

      (j)  Investor
        acknowledges that it can bear the economic risk of its investment in the
        Company, and has such knowledge and experience in financial and business
        matters
        that it is capable of evaluating the merits and risks of an investment in
        the
        Company. Investor is acquiring the Subscribed Shares for its own account
        and not
        with the intent to make a distribution in violation of the Securities Act
        or in
        violation of any other applicable securities laws, rules or
        regulations.

       

      (k)  No
        agent,
        broker, investment banker, finder, financial advisor or other person is or
        will
        be entitled to any broker's or finder's fee or any other commission or similar
        fee from Investor in connection with the transactions contemplated in this
        Agreement or the Transaction Agreements, and no person is entitled to any
        fee or
        commission or like payment in respect thereof based in any way on agreements,
        arrangements or understandings made by or on Investor's behalf.

       

      ARTICLE
        IV  

       

      COVENANTS

       

      Section
        4.1.  Survival. 
        The
        representations and warranties set forth in Article
        III,
        and the
        rights to indemnification thereof, shall survive the Closing. Notwithstanding
        the foregoing, no party shall be liable for a breach of the representations
        and
        warranties set forth in Section
        3.2
        or
Section
        3.1,
        excluding specifically subsections 3.1(d)
        (except
        the last sentence thereof), 3.1(f),
        3.2(c),
        3.2(h),
        as to
        which liability shall not be limited by time, unless, subject to subsection
        (B)
        of this Section
        4.1,
        written
        notice of a claim for breach or indemnification pursuant Section
        4.2(c)
        of this
        Agreement shall have been delivered on or before (A) the ninetieth (90) day
        following the delivery to Investor of the audited financial statements of
        Company for the financial year ended 31 December 2010, or (B) with respect
        to a
        breach of subsection 3.1(s)
        only, 31
        December 2013. The foregoing sentence shall not apply to limit liability
        for any
        breach of a representation or warranty that is the subject of dishonest
        concealment or fraud. For convenience of reference, the period from the date
        hereof until any representation, warranty, covenant or other agreement contained
        herein shall terminate is referred to herein as the “Survival
        Period.”

       

      If
        notice
        of any claim for breach of the representations and warranties in Article
        III
        or
        indemnification under Section
        4.2
        hereof
        shall have been given within the applicable Survival Period, the representations
        and warranties that are the subject of such breach or indemnification claim
        shall survive until such time as such claim is finally resolved.

       

      For
        the
        avoidance of doubt, the limitations on liability set out in Section
        4.2(d)
        apply to
        any claim by a party for breach of the representations and warranties in
        Article
        III.

       

      Section
        4.2.  Indemnification.

       

      (a)  Subject
        to the terms and conditions hereof, Company, each Family Member and Challenger,
        jointly and severally, shall indemnify and hold Investor, its Affiliates,
        and
        each of their respective officers, directors, agents, employees,
        representatives, and independent contractors harmless from and against any
        and
        all claims, obligations, actions, damages, losses, liabilities, judgments,
        settlements, penalties, costs or expenses (including reasonable attorney's
        fees
        and expenses), of any nature whatsoever (including diminution in value of
        the
        Shares held by Investor) (collectively, "Damages")
        asserted against, resulting to, imposed upon or incurred by Investor, its
        Affiliates, and each of their respective officers, directors, agents, employees,
        representatives, and independent contractors, directly or indirectly, by
        reason
        of, arising out of or resulting from (i) any breach by the Company,
        Challenger, or any Family Member of any representation, warranty, covenant
        or
        agreement (in each case without regard to any qualification of materiality
        or
        Material Adverse Effect) of the Company, any Family Member, or Challenger
        contained in this Agreement, the other Transaction Agreements, or in any
        certificate delivered pursuant to this Agreement or the other Transaction
        Agreements, and (ii) any taxes, including entity-level taxes and federal,
        state,
        local, and foreign taxes, attributable to periods and operations of the Company
        before the issuance of the Subscribed Shares to Investor.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (b)  Subject
        to the terms and conditions hereof, Investor shall indemnify and hold the
        Company, its Affiliates, and each of their respective officers, directors,
        agents, employees, representatives, and independent contractors harmless
        from
        and against any and all Damages asserted against, resulting to, imposed upon
        or
        incurred by the Company, its Affiliates, and each of their respective officers,
        directors, agents, employees, representatives, and independent contractors,
        directly or indirectly, by reason of, arising out of or resulting from any
        breach by Investor of any representation, warranty, covenant or agreement
        of
        Investor contained in this Agreement.

       

      (c)  In
        the
        event that any claim or demand for which a party (an "Indemnifying
        Party"),
        would
        be liable to another party under Section
        4.2(a)
        or
Section
        4.2(b)
        (an
        "Indemnified
        Party")
        is
        asserted against or sought to be collected from an Indemnified Party by a
        third
        party, the Indemnified Party shall with reasonable promptness notify the
        Indemnifying Party of such claim or demand, but the failure so to notify
        the
        Indemnifying Party shall not relieve the Indemnifying Party of its obligations
        under this Section
        4.2,
        except
        to the extent that the defense of such claim or demand is materially prejudiced
        thereby. The Indemnifying Party shall have 30 days from receipt of the above
        notice from the Indemnified Party (the "Notice
        Period")
        to
        notify the Indemnified Party whether or not the Indemnifying Party desires,
        at
        the Indemnifying Party's sole cost and expense, to defend the Indemnified
        Party
        against such claim or demand; provided, that the Indemnified Party is hereby
        authorized prior to and during the Notice Period to file any motion, answer
        or
        other pleading that it shall deem necessary or appropriate to protect its
        interests or those of the Indemnifying Party and not be prejudicial to the
        Indemnifying Party. If the Indemnifying Party elects to assume the defense
        of
        any such claim or demand, the Indemnified Party shall have the right to employ
        separate counsel at its own expense and to participate in the defense thereof.
        If the Indemnifying Party elects not to assume the defense of such claim
        or
        demand (or fails to give notice to the Indemnified Party during the Notice
        Period), the Indemnified Party shall be entitled to assume the defense of
        such
        claim or demand with counsel of its own choice, at the expense of the
        Indemnifying Party. If the claim or demand is asserted against both the
        Indemnifying Party and the Indemnified Party and based on the advice of the
        Indemnified Party's counsel it is determined that there is a conflict of
        interest which renders it inappropriate for the same counsel to represent
        both
        the Indemnifying Party and the Indemnified Party, the Indemnifying Party
        shall
        be responsible for paying separate counsel for the Indemnified Party; provided,
        however, that the Indemnifying Party shall not be responsible for paying
        for
        more than one separate firm of attorneys to represent all of the Indemnified
        Parties, regardless of the number of Indemnified Parties. If the Indemnifying
        Party elects to assume the defense of such claim or demand, confirms in writing
        the obligation to indemnify the Indemnified Party for the full amount, proves
        to
        the Indemnified Party's reasonable satisfaction the Indemnifying Party's
        capacity to perform such indemnification obligations, uses counsel reasonably
        satisfactory to the Indemnified Party, and diligently prosecutes the defense
        of
        such claim, then (i) no compromise or settlement thereof may be effected by
        the Indemnifying Party without the Indemnified Party's written consent (which
        shall not be unreasonably withheld) unless the sole relief provided is monetary
        damages that are paid in full by the Indemnifying Party, and (ii) the
        Indemnifying Party shall have no liability with respect to any compromise
        or
        settlement thereof effected without its written consent (which shall not
        be
        unreasonably withheld).

       

      (d)  Notwithstanding
        the provisions of this Section
        4.2
        or any
        other provision of this Agreement to the contrary, no party shall have any
        liability or obligation, and no claim shall be asserted, for any Damages
        unless
        and until the aggregate amount of Damages exceeds US$100,000 (the "Basket");
        provided, however, that in the event the aggregate amount of such Damages
        exceeds the Basket, the Basket shall not limit the Damages that may be claimed
        by such party, and such party shall be entitled to collect the entire amount
        of
        all Damages, including the amount represented by the Basket. Any phrase in
        Section
        3.1
        or
3.2
        qualified by the term “material” or “Material Adverse Effect” shall be
        disregarded for the purposes of calculating Damages for the Basket.
        Notwithstanding the foregoing, under no circumstances shall any party be
        liable
        for Damages for any breach of the representations and warranties in Article
        III
        in an
        aggregate amount in excess of US$65,000,000.

       

      (e)  IT
        IS THE EXPRESS INTENTION OF THE PARTIES HERETO THAT ALL INDEMNIFICATION
        OBLIGATIONS ASSUMED BY SUCH PARTY, INCLUDING, BUT NOT LIMITED TO,
THE
        INDEMNIFICATION PROVISIONS IN THIS SECTION
        4.2,
        SHALL BE ENFORCEABLE REGARDLESS OF WHETHER ANY PERSON
        (INCLUDING
        THE INDEMNIFYING
        PARTY)
        ALLEGES OR
        PROVES
        (i) NEGLIGENCE
        (INCLUDING SOLE NEGLIGENCE, SINGLE NEGLIGENCE, JOINT NEGLIGENCE, CONCURRENT
        NEGLIGENCE, ACTIVE OR PASSIVE NEGLIGENCE, BUT EXPRESSLY NOT INCLUDING GROSS
        NEGLIGENCE OR WILLFUL MISCONDUCT) OF ANY INDEMNIFIED
        PARTY,
        OR (ii) STRICT
        LIABILITY. THE PARTIES HERETO AGREE THAT THE FOREGOING COMPLIES WITH THE
        EXPRESS
        NEGLIGENCE RULE AND IS CONSPICUOUS.

       

      Section
        4.3.  Fees
        and Expenses.  Within
        30
        days of the Closing, the Company shall pay all reasonable fees and expenses
        of
        Thompson & Knight LLP, counsel to Investor, and such other attorney fees and
        expenses of Investor, incurred in connection with the transactions contemplated
        hereby, in an amount not in excess of US$100,000, upon receipt of supporting
        invoices.

       

      Section
        4.4.  Access
        and Investigation.  Between
        the date of this Agreement and the Closing, the Company will at the Investor's
        expense (a) afford Investor and its representatives full and free access
        to each
        of the Company's personnel, properties, contracts, books and records, and
        other
        documents and data, (b) furnish Investor and its representatives with copies
        of
        all such contracts, books and records, and other existing documents and data
        as
        Investor or its representatives may reasonably request, and (c) furnish Investor
        and its representatives such additional financial, operating, and other data
        as
        Investor or its representatives may reasonably request.

       

      Section
        4.5.  Operation
        of the Company.  Between
        the date of this Agreement and the Closing, the Company will (w) conduct
        the
        business of the Company and its subsidiaries only in the ordinary course
        of
        business, (x) use its best efforts to preserve intact the current business
        organization of the Company, (y) confer with Investor concerning operational
        and
        financial matters of a material nature, and (z) otherwise report periodically
        to
        Investor concerning the status of the business, operations, and finances
        of the
        Company. In addition, without the prior written consent of Investor, between
        the
        date of this Agreement and the Closing neither the Company nor any of its
        subsidiaries shall:

       

      (a)  amend
        its
        other governing instruments;

       

      (b)  (i)
        issue, sell, or deliver (whether through the issuance or granting of options,
        warrants, commitments, subscriptions, rights to purchase, or otherwise) any
        shares of its capital stock of any class or any other securities or equity
        equivalents; or (ii) amend in any respect any of the terms of any such
        securities outstanding as of the date hereof;

       

      (c)  
        (i)
        split, combine, or reclassify any shares of its capital stock; (ii) declare,
        set
        aside, or pay any dividend or other distribution (whether in cash, stock,
        or
        property or any combination thereof) in respect of its capital stock; (iii)
        except for as provided in the Repurchase Agreement, repurchase, redeem, or
        otherwise acquire any of its securities or any securities of any of its
        subsidiaries; or (iv) adopt a plan of complete or partial liquidation or
        resolutions providing for or authorizing a liquidation, dissolution, merger,
        consolidation, restructuring, recapitalization, or other reorganization of
        the
        Company or any subsidiary of the Company;

       

      (d)  other
        than in the ordinary course of business, (i) create, incur, guarantee, or
        assume
        any indebtedness for borrowed money or otherwise become liable or responsible
        for the obligations of any other person; (ii) make any loans, advances, or
        capital contributions to, or investments in, any other person; (iii) pledge
        or
        otherwise encumber shares of capital stock of the Company or any subsidiary
        thereof; or (iv) mortgage or pledge any of its assets, tangible or intangible,
        or create or suffer to exist any lien thereupon;

       

      (e)  (i)
        enter
        into, adopt, or (except as may be required by law) amend or terminate any
        bonus,
        profit sharing, compensation, severance, termination, stock option, stock
        appreciation right, restricted stock, performance unit, stock equivalent,
        stock
        purchase, pension, retirement, deferred compensation, employment, severance
        (exceeding US$150,000 in the aggregate), or other employee benefit agreement,
        trust, plan, fund, or other arrangement for the benefit or welfare of any
        director, officer, or employee; (ii) except for normal increases in the ordinary
        course of business consistent with past practice that, in the aggregate,
        do not
        result in a material increase in benefits or compensation expense to the
        Company, increase in any manner the compensation or fringe benefits of any
        director, officer, or employee; or (iii) pay to any director, officer, or
        employee any benefit not required by any employee benefit agreement, trust,
        plan, fund, or other arrangement as in effect on the date hereof;

       

      (f)  acquire,
        sell, lease, transfer, or otherwise dispose of, directly or indirectly, any
        assets outside the ordinary course of business consistent with past practice
        or
        any assets that in the aggregate are material to the Company;

       

      (g)  acquire
        (by merger, consolidation, or acquisition of stock or assets or otherwise)
        any
        corporation, partnership, or other business organization or division
        thereof;

       

      (h)  make
        any
        capital expenditure or other expenditures outside the ordinary course of
        business which, individually, is in excess of US$20,000 or, in the aggregate,
        are in excess of US$50,000;

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (i)  amend
        any
        tax return or make any tax election or settle or compromise any federal,
        state,
        local, or foreign tax liability;

       

      (j)  pay,
        discharge, or satisfy any claims, liabilities, or obligations (whether accrued,
        absolute, contingent, unliquidated, or otherwise, and whether asserted or
        unasserted), other than the payment, discharge, or satisfaction in the ordinary
        course of business consistent with past practice; provided, however, that
        in no
        event shall the Company repay any long-term indebtedness except to the extent
        required by the terms thereof;

       

      (k)  enter
        into any lease, contract, agreement, commitment, arrangement, or transaction
        outside the ordinary course of business consistent with past
        practice;

       

      (l)  amend,
        modify, or change any existing lease, contract, or agreement, other than
        in the
        ordinary course of business consistent with past practice;

       

      (m)  waive,
        release, grant, or transfer any rights of value, other than in the ordinary
        course of business consistent with past practice;

       

      (n)  lay
        off
        any of its employees outside the ordinary course of business;

       

      (o)  change
        any of its banking or safe deposit arrangements;

       

      (p)  change
        any of the accounting principles or practices used by it;

       

      (q)  take
        any
        action which would or might make any of the representations or warranties
        of the
        Company, Challenger, or any Family Member contained in this Agreement or
        other
        Transaction Agreement untrue or inaccurate as of any time from the date of
        this
        Agreement to the Closing or would or might result in any of the conditions
        set
        forth in this Agreement or any other Transaction Agreement not being satisfied;
        or

       

      (r)  authorize
        or propose, or agree in writing or otherwise to take, any of the actions
        described in this Section
        4.5.

       

      Section
        4.6.  No
        Commitment for Additional Financing.  The
        Company, Challenger, and each Family Member acknowledges and agrees that,
        except
        as set forth in the Transaction Agreements, Investor has made no representation,
        undertaking, commitment or agreement to provide or assist the Company in
        obtaining any financing, investment or other assistance, other than the
        subscription of the Subscribed Shares as set forth herein and subject to
        the
        conditions set forth herein. In addition, the Company, Challenger, and each
        Family Member acknowledges and agrees that (a) no statements, whether written
        or
        oral, made by Investor or its representatives on or after the date of this
        Agreement shall create an obligation, commitment or agreement to provide
        or
        assist the Company in obtaining any financing or investment; (b) neither
        the
        Company, Challenger, nor any Family Member shall rely on any such statement
        by
        Investor or its representatives; and (c) an obligation, commitment or agreement
        to provide or assist the Company in obtaining any financing or investment
        may
        only be created by a written agreement, signed by Investor and the Company,
        setting forth the terms and conditions of such financing or investment and
        stating that the parties intend for such writing to be a binding obligation
        or
        agreement. Investor shall have the right, in its sole and absolute discretion,
        to refuse or decline to participate in any other financing of or investment
        in
        the Company, and shall have no obligation to assist or cooperate with the
        Company in obtaining any financing, investment or other assistance.

       

      Section
        4.7.  Audit
        Rights and Certifications.  In
        the
        event that Investor has a reasonable basis to believe that the Company,
        Challenger or the Family Members have taken or failed to take any action
        in
        violation of the representations and warranties of the Company Challenger
        and
        the Family Members under this Agreement or that may otherwise subject Investor
        (or any of its officers, directors, employees or agents) to liability under
        the
        FCPA, Investor shall have the right, upon written notice and at the Investors'
        expense, to conduct an investigation and audit of the Company, Challenger,
        and
        the Family Members. The Company, Challenger, and the Family Members shall
        cooperate fully with such investigation, provided that the investigation
        is
        reasonable in scope, method, nature and duration. At the request of Investor,
        each of the Company, Challenger, and the Family Members shall provide, and
        cause
        each of its directors, officers, employees, agents, contractors or other
        representatives with direct involvement in the operations of the Company
        to
        provide, a written certification of compliance with the Policy and with any
        of
        the representations and warranties of the Company, Challenger, and the Family
        Members under this Agreement, in a form reasonably satisfactory to
        Investor.

       

      Section
        4.8.  Disclosure
        Controls, Policy
        and Internal Controls.  Within
        a
        reasonable period of time after the execution of this Agreement and prior
        to the
        Closing Date, the Company shall (and the parties shall cause the Company
        to):
        (a) establish and maintain disclosure controls and procedures designed to
        ensure
        that material information relating to the Company and its subsidiaries is
        made
        known to the Company’s management, including its principal executive officer and
        its principal financial officer or persons performing similar functions,
        to
        allow timely decisions regarding required disclosure; (b) establish and maintain
        a system of internal control over financial reporting under the supervisions
        of
        the Company's principal executive and financial officers sufficient to provide
        reasonable assurance regarding the reliability of the Company’s financial
        reporting and the preparation of the Company's financial statements for external
        purposes in accordance with IFRS, including, without limitation, policies
        and
        procedures that (i) pertain to maintenance of records that in reasonable
        detail
        accurately and fairly reflect the transactions and dispositions of the assets
        of
        the Company and its subsidiaries, (ii) provide reasonable assurance that
        transactions are recorded as necessary to permit preparation of financial
        statements in accordance with IFRS, and that receipts and expenditures of
        the
        Company and its subsidiaries are being made only in accordance with
        authorizations of management and directors of the Company, and (iii) provide
        reasonable assurance regarding prevention or timely detection of unauthorized
        acquisition, use or disposition of the Company's or its subsidiary’s assets that
        could have a material effect on the financial statements; (c) adopt and
        implement the Policy; (d) establish and maintain internal policies, procedures
        and controls that are reasonably designed to detect and deter violations
        of the
        laws and regulations preventing public or commercial bribery, and (e) adopt
        appropriate policies, procedures and controls to ensure that its agents,
        representatives and subcontractors understand and comply with the terms and
        conditions of the Policy and the abovementioned laws and regulations preventing
        public or commercial bribery. The policies, procedures and controls to be
        adopted by the Company shall satisfy international standards as determined
        by
        the auditors of the Investor. Specifically, the Policy to be adopted by the
        Company shall, at a minimum, include all such standards required to assure
        that
        Investor complies with its obligations under the FCPA. The Company agrees
        to
        comply with the provisions of the Policy in connection with the acquisition,
        operation or maintenance of the Company’s assets and business, the transactions
        contemplated by this Agreement or any other Transaction Agreement..

       

      Section
        4.9.  Certifications. 
        The
        Investor hereby covenants and agrees to use commercially reasonable efforts
        to
        assist the Company in obtaining the relevant API certifications or equivalent
        for each of the Rigs as may be requested by the customers of the
        Company.

      
         

        Section
          4.10.  Further
          Assurances.  Each
          party hereto covenants and agrees to cooperate and use all commercially
          reasonable efforts to take, or cause to be taken, all action and to do,
          or cause
          to be done, all things reasonably necessary, proper or advisable to consummate
          and make effective the transactions contemplated by this Agreement, including
          cooperating fully with the other parties to obtain all approvals that may
          be
          necessary or which may be reasonably requested by the Company to consummate
          the
          transactions contemplated in this Agreement, and the other Transaction
          Agreements. In case at any time after the date hereof any commercially
          reasonable further action is reasonably necessary or desirable to carry
          out the
          purposes of this Agreement, the parties hereto shall take such commercially
          reasonable action.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      ARTICLE
        V  

       

      MISCELLANEOUS

       

      Section
        5.1.  Notices. 
        Except
        as
        expressly set forth to the contrary in this Agreement, all notices, requests,
        or
        consents provided for or permitted to be given under this Agreement must
        be in
        writing and must be given either by depositing that writing in the United
        States
        mail, addressed to the recipient, postage paid, and registered or certified
        with
        return receipt requested or by delivering that writing to the recipient in
        person, by courier, by Electronic Transmission, or by facsimile transmission;
        and a notice, request, or consent given under this Agreement is effective
        on
        receipt by the person to receive it. All notices, requests, and consents
        to be
        sent to a party hereto must be sent to or made at the addresses set forth
        below
        such party's signature block hereto or such other address as that party may
        specify by notice to the other parties. 

       

      Section
        5.2.  Amendments
        and Waivers. 
        This
        Agreement may not be amended or modified, and no provisions hereof may be
        waived, without the written consent of all parties hereto unless otherwise
        expressly provided herein. No action taken pursuant to this Agreement, including
        any investigation by or on behalf of any party hereto, shall be deemed to
        constitute a waiver by the party taking such action of compliance with any
        representation, warranty, covenant or agreement contained herein. The waiver
        by
        any party hereto of a breach of any provision of this Agreement shall not
        operate or be construed as a further or continuing waiver of such breach
        or as a
        waiver of any other or subsequent breach. No failure on the part of any party
        hereto to exercise, and no delay in exercising, any right, power or remedy
        hereunder shall operate as a waiver thereof, nor shall any single or partial
        exercise of such right, power or remedy by such party preclude any other
        or
        further exercise thereof or the exercise of any other right, power or remedy.
        All remedies hereunder are cumulative and are not exclusive of any other
        remedies provided by Applicable Law.

       

      Section
        5.3.  Entire
        Agreement. 
        This
        Agreement and the other Transaction Agreements, together with the certificates,
        documents, instruments and writings that are delivered pursuant thereto,
        constitute the entire agreement and understanding of the parties hereto in
        respect of its subject matters and supersedes all prior understandings,
        agreements, or representations by or among such parties, written or oral,
        to the
        extent they relate in any way to the subject matter hereof or the transactions
        contemplated herein. 

       

      Section
        5.4.  Third
        Party Rights. 
        A
        person
        who is not a party to this Agreement has no right under the Contracts (Rights
        of
        Third Parties) Act 1999 or otherwise to enforce any term of this Agreement
        but
        this does not affect any right or remedy of a third party which exists or
        is
        available apart from the Contracts (Rights of Third Parties) Act 1999, or
        otherwise.

       

      Section
        5.5.  Governing
        Law. 
        THIS
        AGREEMENT AND THE PERFORMANCE OF THE TRANSACTIONS AND THE OBLIGATIONS OF
        THE
        PARTIES HEREUNDER WILL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
        WITH THE LAWS OF ENGLAND AND WALES, WITHOUT GIVING EFFECT TO ANY CHOICE OF
        LAW
        PRINCIPLES.

       

      Section
        5.6.  Arbitration.

       

      A
        party
        who desires to submit a Dispute for resolution shall commence the dispute
        resolution process by providing the other parties to the Dispute written
        notice
        of the Dispute ("Notice
        of Dispute").
        The
        Notice of Dispute shall identify the parties to the Dispute and contain a
        brief
        statement of the nature of the Dispute and the relief requested. The submission
        of a Notice of Dispute shall toll any applicable statutes of limitation related
        to the Dispute, pending the conclusion or abandonment of dispute resolution
        proceedings under this Section
        5.6.
        

       

      Any
        Dispute shall be exclusively and definitively resolved through final and
        binding
        arbitration, it being the intention of the parties that this is a broad form
        arbitration agreement designed to encompass all possible disputes. Unless
        otherwise agreed by all parties to the Dispute, the place of arbitration
        shall
        be London, England. The arbitration proceedings shall be conducted in the
        English language and the arbitrator(s) shall be fluent in the English language.
        The arbitration shall be conducted in accordance with the Rules of Arbitration
        of the International Chamber of Commerce ("ICC")
        (as
        then in effect) (the "Rules").
        The
        arbitration shall be conducted by three arbitrators, unless all parties to
        the
        Dispute agree to a sole arbitrator within 30 days after the filing of the
        arbitration. For greater certainty, for purposes of this Section
        5.6,
        the
        filing of the arbitration means the date on which the claimant request for
        arbitration is received by the other parties to the Dispute. If the arbitration
        is to be conducted by a sole arbitrator, then the arbitrator will be jointly
        selected by the parties to the Dispute. If the parties to the Dispute fail
        to
        agree on the arbitrator within 30 days after the filing of the arbitration,
        then
        the ICC shall appoint the arbitrator. If the arbitration is to be conducted
        by
        three arbitrators, then each party to the Dispute shall appoint one arbitrator
        within 30 days of the filing of the arbitration, and the two arbitrators
        so
        appointed shall select the presiding arbitrator within 30 days after the
        latter
        of the two arbitrators has been appointed by the parties to the Dispute.
        If a
        party to the Dispute fails to appoint its party-appointed arbitrator or if
        the
        two party-appointed arbitrators cannot reach an agreement on the presiding
        arbitrator within the applicable time period, then the ICC shall appoint
        the
        remainder of the three arbitrators not yet appointed. 

       

      The
        award
        of the arbitral tribunal shall be final and binding. Judgment on the award
        of
        the arbitral tribunal may be entered and enforced by any court of competent
        jurisdiction. All notices required for any arbitration proceeding shall be
        deemed properly given if sent in accordance with Section
        5.1.
        

       

      All
        arbitrators shall be and remain at all times wholly impartial, and, once
        appointed, no arbitrator shall have any ex parte communications with any
        of the
        parties to the Dispute concerning the arbitration or the underlying Dispute
        other than communications directly concerning the selection of the presiding
        arbitrator, where applicable. 

       

      Without
        limiting the generality of the foregoing, any party to the Dispute may have
        recourse to and shall be bound by the Pre-arbitral Referee Procedure (as
        defined
        in the Rules). The arbitral tribunal is authorized to award costs and attorneys'
        fees and to allocate them between the parties to the Dispute. The costs of
        the
        arbitration proceedings, including attorneys' fees, shall be borne in the
        manner
        determined by the arbitral tribunal. The award shall include interest, as
        determined by the arbitral award, from the date of any default or other breach
        of this Agreement until the arbitral award is paid in full. Interest shall
        be
        awarded at the Overdue Rate (as defined in the Rules). The arbitral award
        shall
        be made and payable in United States Dollars, free of any tax or other
        deduction. The parties waive their rights to claim or recover, and the arbitral
        tribunal shall not award, any punitive, multiple, or other exemplary damages
        (whether statutory or common law) except to the extent such damages have
        been
        awarded to a third party and are subject to allocation between or among the
        parties to the Dispute. To the extent permitted by law, any right to appeal
        or
        challenge any arbitral decision or award, or to oppose enforcement of any
        such
        decision or award before a court or any governmental authority, is hereby
        waived
        by the parties except with respect to the limited grounds for modification
        or
        non-enforcement provided by any applicable arbitration statute or
        treaty.

       

      Section
        5.7.  Severability. 
        If
        any
        provision of this Agreement is held to be unenforceable, this Agreement shall
        be
        considered divisible and such provision shall be deemed inoperative to the
        extent it is deemed unenforceable, and in all other respects this Agreement
        shall remain in full force and effect; provided, however, that if any provision
        may be made enforceable by limitation thereof, then such provision shall
        be
        deemed to be so limited and shall be enforceable to the maximum extent permitted
        by Applicable Law.

       

      Section
        5.8.  Counterparts. 
        This
        Agreement may be executed in any number of counterparts, with each such
        counterpart constituting an original and all of such counterparts constituting
        but one and the same instrument. 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

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


       

      CHALLENGER
        LIMITED, acting by:

       

      By: /s/
        YALMEZ SALAH EL DIN ALI TATANAKI

      Name: Yalmez
        Salah El Din Ali Tatanaki

      Title: Director

       

       

      By: /s/
        ABDULLATIF JANAHI

                                      Name: Abdullatif
        Janahi

      Title: Vice
        Chairman

       

      


       

      ADDRESS
        FOR NOTICE PURPOSES:

      2nd
        Floor

      Sixty
        Circular Road

      Douglas,
        Isle of Man IMI 1SA

      Attention:
        

      Facsimile:
        

       

      


      
        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

      


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

       

      BRONCO
        MENA INVESTMENTS LLC, acting by:

       

       

      By: /s/
        D.
        FRANK HARRISON

      Name: D.
        Frank
        Harrison

      Title: Chief
        Executive Officer

       

       

      ADDRESS
        FOR NOTICE PURPOSES:

      16217
        N.
        May Avenue

      Edmond,
        Oklahoma 73013

      United
        States of America

      Attention:
        David C. Treadwell and Mark Dubberstein

      Facsimile:
        +1
        405
        285 0478

       

      


      
        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

          

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

       

      CHALLENGER
        GROUP LTD., acting by:

       

      By: /s/
        ADRIAN ESCHER

      Name: Adrian
        Escher

      Title: Director

       

       

      By: /s/
        MARGARETA ZWEIFEL

      Name: Margareta
        Zweifel

      Title: Director

       

       

      ADDRESS
        FOR NOTICE PURPOSES:

      Clarendon
        House

      2
        Church
        Street

      P.O.
        Box
        HM 1022

      Hamilton
        HM DX, Bermuda 

       

      or

       

      Kendris
        Private AG

      Muehlemattstrasse
        56

      5001
        Aarau

      Switzerland

      Attention:
        Margareta Zweifel

      Facsimile:
        +41584505852

      


      
        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

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


       

      /s/
        HASSAN SALAH EL DIN ALI TATANAKI

      HASSAN
        SALAH EL DIN ALI TATANAKI

      


      


      ADDRESS
        FOR NOTICE PURPOSES:

      


      Challenger
        Building

      1
        El
        Moshier Ahmed Ismail Street

      Heliopolis
        11361

      Cairo,
        Egypt

      Facsimile:
        +20 2 267 6122 

       

      /s/
        FAIEZ SALAH EL DIN ALI TATANAKI

      FAIEZ
        SALAH EL DIN ALI TATANAKI

      


      


      ADDRESS
        FOR NOTICE PURPOSES:

      


      Challenger
        Building

      1
        El
        Moshier Ahmed Ismail Street

      Heliopolis
        11361

      Cairo,
        Egypt

      Facsimile:
        +20 2 267 6122 

       

      /s/
        YALMEZ SALAH EL DIN ALI TATANAKI

      YALMEZ
        SALAH EL DIN ALI TATANAKI

      


      


      ADDRESS
        FOR NOTICE PURPOSES:

      


      Challenger
        Building

      1
        El
        Moshier Ahmed Ismail Street

      Heliopolis
        11361

      Cairo,
        Egypt

      Facsimile:
        +20 2 267 6122 


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      Schedules
        and Exhibits Omitted:

      


      Exhibits
        Omitted:

      1. Exhibit
        A
        - Form of Management Services Agreement (to be agreed)

      2. Exhibit
        B
        - Form of Master Services Agreement (to be agreed)

      3. Exhibit
        C
        - Rig Assignment (to be agreed)

      4. Exhibit
        D
        - Rigs and Rig Specifications

      5. Exhibit
        E
        - Form of Shareholders’ Agreement

      6. Exhibit
        F
        - Form of Legal Opinion

      Schedules
        Omitted:

      1. Schedule
        of Challenger Group Shareholders

      2. Schedule
        3.1(a) - Subsidiaries, etc.

      3. Schedule
        3.1(b) - Directors and Officers

      4. Schedule
        3.1(d) - Challenger Shareholders

      5. Schedule
        3.1(k) - Asset listing

      6. Schedule
        3.1(l) - Certain Agreements

      7. Schedule
        3.2(e) - Consents