Document:

Exhibit 10.2

    Exhibit
      10.2

    
 

    CONSTRUCTION
      SERVICES AGREEMENT

     

    This CONSTRUCTION
      SERVICES AGREEMENT (this “Agreement”),
      dated
      as of May 15, 2006, is entered into by and among Standard Drilling,
      Inc., a
      Delaware
      corporation (the “Company”),
      Romfor
      West Africa, Ltd, a Limited Liability Bahamian corporation (“Romfor”),
      and
      Stuart Breckon, an individual residing at Houston, Texas (“Breckon”
and,
      together with Romfor, the “Service
      Providers”).

     

    WHEREAS,
      the Service Providers are engaged in the business of designing drilling rigs,
      acquiring drilling rig materials and components, either new or used from various
      sources, and constructing drilling rigs from such materials and
      components;

     

    WHEREAS,
      the Company desires to engage and retain the Service Providers for the term
      and
      purposes hereinafter set forth and the Service Providers desire to provide
      to
      the Company the Services (as hereinafter defined) for the consideration
      hereinafter stated; and

     

    WHEREAS,
      at the request of the Company, the Service Providers (a) are currently providing
      exclusive Acquisition Services (as hereinafter defined) and Construction
      Services (as hereinafter defined) with respect to three drilling rigs in
      accordance with the inventory and cost estimates set forth on Exhibit A and
      three additional drilling rigs to be completed on or about January 2007 and
      otherwise substantially in accordance with the inventory and cost estimates
      set
      forth on Exhibit A (collectively, the “Existing
      Rig Constructions”)
      and (b)
      will provide exclusive Services (as hereinafter defined) for additional drilling
      rigs in accordance with the terms and conditions of this Agreement;

     

    NOW,
      THEREFORE, in consideration of the engagement of the Service Providers by the
      Company, and of the compensation and other remuneration to be paid by the
      Company to the Service Providers for such engagement, and for other good and
      valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged by the parties hereto, each of Romfor, Breckon and the Company
      hereby agree as follows:

     

    ARTICLE
      1

    DEFINITIONS;
      CONSTRUCTION

     

    1.1       
      Definitions.
      As
      used in
      the Agreement, the following terms shall have the respective meanings set forth
      below or set forth in the provision of the Agreement referenced by such
      term:

     

    “AAA”
has
      the
      meaning ascribed to such term in Section 7.9(b) of this Agreement.

     

    “Acceptance
      Notice”
has
      the
      meaning ascribed to such term in Section 3.2 of this Agreement.

     

    “Accepted
      Rig”
has
      the
      meaning ascribed to such term in Section 3.2 of this Agreement.

     

    “Acquired
      Property”
has
      the
      meaning ascribed to such term in Section 3.1 of this Agreement.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Acquisition
      Services”
has
      the
      meaning ascribed to such term in Section 2.2(a)(ii) of this
      Agreement.

     

    “Additional
      Expenses”
has
      the
      meaning ascribed to such term in Section 2.2(b) of this Agreement.

     

    “Agreement”
has
      the
      meaning ascribed to such term in the preamble of this document, as the same
      may
      be amended from time to time. 

     

    “Base
      Compensation”
has
      the
      meaning ascribed to such term in Section 5.1 of this Agreement.

     

    “Bonus”
has
      the
      meaning ascribed to such term in Section 5.2 of this Agreement.

     

    “Breckon”
has
      the
      meaning ascribed to such term in the preamble of this Agreement.

     

    “Claim”
means
      any and all claims, demands, suits, causes of action, settlements, judgments,
      damages, fines, liability, losses, costs and expenses (including, without
      limitation, court and arbitration costs, experts’ fees and attorneys’ fees),
      whether arising in equity, at common law, or by statute, or under the law of
      property, contract or tort (including, without limitation, negligence and strict
      liability without regard to fault), of every kind or character.

     

    “Claimant”
has
      the
      meaning ascribed to such term in Section 7.9(b) of this Agreement.

     

    “Company”
has
      the
      meaning ascribed to such term in the preamble of this Agreement.

     

    “Confidential
      Information”
has
      the
      meaning ascribed to such term in Section 6.1 of this Agreement.

     

    “Construction
      Services”
has
      the
      meaning ascribed to such term in Section 2.2(a)(iii) of this
      Agreement.

     

    “Defaulting
      Party”
has
      the
      meaning ascribed to such term in Section 4.2(a) of this Agreement.

     

    “Design
      Services”
has
      the
      meaning ascribed to such term in Section 2.2(a)(i) of this
      Agreement.

     

    “Effective
      Date”
has
      the
      meaning ascribed to such term in Section 2.1 of this Agreement.

     

    “Existing
      Rig Constructions”
has
      the
      meaning ascribed to such term in the preamble of this Agreement.

     

    “Initial
      Term”
has
      the
      meaning ascribed to such term in Section 4.1 of this Agreement.

     

    “Material
      Default”
has
      the
      meaning ascribed to such term in Section 4.2(a) of this Agreement.

     

     

    
      
        
        

      

      
        Page
          2

        
          

        

      

      
        
        

      

    

     

    “Non-Defaulting
      Party”
has
      the
      meaning ascribed to such term in Section 4.2(a) of this Agreement.

     

    “Ordered
      Rig”
has
      the
      meaning ascribed to such term in Section 2.2(a)(ii) of this
      Agreement.

     

    “Person”
means
      any individual or entity, including, without limitation, any corporation,
      limited liability company, company (general or limited), joint venture,
      association, joint stock company, trust or unincorporated
      organization.

     

    “Requested
      Drilling Rig”
has
      the
      meaning ascribed to such term in Section 2.2(a)(i) of this
      Agreement.

     

    “Respondent”
has
      the
      meaning ascribed to such term in Section 7.9(b) of this Agreement.

     

    “Romfor”
has
      the
      meaning ascribed to such term in the preamble of this Agreement.

     

    “Rules”
has
      the
      meaning ascribed to such term in Section 7.9(b) of this Agreement.

     

    “Service
      Providers”
has
      the
      meaning ascribed to such term in the preamble of this Agreement.

     

    “Services”
has
      the
      meaning ascribed to such term in Section 2.2(b).

     

    “Term”
has
      the
      meaning ascribed to such term in Section 4.1 of the Agreement.

     

    “Work
      Product”
has
      the
      meaning ascribed to such term in Section 6.1 of this Agreement.

     

    1.2        
      Construction. All article, section, subsection and
      exhibit references used in this Agreement are to this Agreement unless otherwise
      specified. Exhibits attached to this Agreement constitute a part of this
      Agreement and are incorporated herein. Unless the context of this Agreement
      clearly requires otherwise, (a) the singular shall include the
      plural and the plural shall include the singular wherever and as often as may
      be
      appropriate, (b) the words “includes” or “including” shall mean
“including without limitation,” and (c) the words “hereof,”
“herein,” “hereunder” and similar terms in this Agreement shall
      refer to this
      Agreement as a whole and not any particular section or article in which such
      words appear. 

     

    ARTICLE
      2

    SERVICES
      OF SERVICE PROVIDER

     

    2.1       
      Engagement;
      Effective Date. Subject
      to
      the terms of this Agreement, the Company agrees to engage the Service Providers
      to provide, and the Service Providers agree to provide, the Services to the
      Company beginning as of the date of this Agreement (the “Effective
      Date”)
      and
      continuing until the last day of the Term.

     

     

    
      
        
        

      

      
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          3

        
          

        

      

      
        
        

      

    

     

    2.2       
      Services.

     

    (a)  
      During
      the Term, the Service Providers shall perform the following services for the
      Company and such other services as the Company and the Service Providers
      mutually agree:

     

    (i)  
      upon the
      request of the Company from time to time, provide general and detailed design
      services, including specifications and limitations for each material component
      thereof, for drilling rigs (each, a “Requested
      Drilling Rig”)
      based
      upon the proposed use and operation of such Requested Drilling Rig as specified
      by the Company and including a proposed completion date for each such Requested
      Drilling Rig (collectively, the “Design
      Services”);

     

    (ii)  
      provide
      construction cost estimates for each Requested Drilling Rig, including line
      item
      cost estimates and proposed sources for each material or component thereof
      and,
      if the cost estimate is approved in writing by the Company (together with the
      Existing Rig Constructions, an “Ordered
      Rig”),
      acquire such materials and components for such Ordered Rig in a timely and
      efficient manner on behalf of, and at the cost of, the Company (the
“Acquisition
      Services”);

     

    (iii)  
      construct
      each Ordered Rig in accordance with the design and cost estimates approved
      in
      writing by the Company for such Ordered Rig (the “Construction
      Services”);
      and

     

    (iv)  
      provide
      all necessary engineering, material, equipment, labor, supervision, tools and
      other services necessary to complete the Design Services, the Acquisition
      Services and the Construction Services.

     

    (b)  
      The
      services to be performed by the Service Providers pursuant to this Agreement
      are
      collectively referred to herein as the “Services”.
      The
      Company shall pay, in accordance with Section 3.1, the cost of the materials
      and
      components acquired pursuant to the Acquisition Services and for any labor
      or
      other expenses relating to any Ordered Rig approved in writing by the Company
      (the “Additional
      Expenses”).

     

    2.3       
      Status
      of the Service Providers.
      The
      parties agree that the Service Providers are to provide the Services in the
      capacity of an independent contractor and not as an employee or agent of the
      Company. The Company shall have no right to control or direct the manner in
      which the Services are to be performed. The Service Providers shall be solely
      responsible for all federal, state or local taxes required by law to be paid
      with respect to the payments and benefits described in this
      Agreement.
      Notwithstanding the foregoing, during the Term, the Service Providers shall
      not
      provide any service that is a Service to any other Person without the prior
      written consent of the Company.

     

    2.4         The
      Service Providers Qualifications. The Service Providers hereby
      each represent and warrant to the Company that the Service Providers are fully
      acquainted with the conditions and requirements pertaining to the Services.
      The
      Service Providers shall maintain, at their own cost and expense, all licenses,
      permits, authorizations and approvals necessary to do business and perform
      the
      Services in the jurisdictions in which the work is performed and otherwise
      in
      accordance with this Agreement. The Service Providers shall perform the Services
      diligently and to the best of their abilities, devoting such time as is
      necessary to fully perform the Services.

     

    
      
        
        

      

      
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          4

        
          

        

      

      
        
        

      

    

     

    2.5       
      Warranty.
      The
      Service Providers hereby warrant and represent to the Company that the Service
      Providers are fully qualified and capable of performing the Services and that
      the Services shall be performed in a good and workmanlike manner and in
      compliance with applicable law.

     

    2.6       
      Title;
      Risk of Loss; Insurance.
      Title to
      any Acquired Property and any Ordered Rig (regardless of its state of
      completion) shall remain with the Company at all times. The Service Providers
      shall have all risk of loss of any Acquired Property and any Ordered Rig
      (including any Accepted Rig) until delivered in accordance with Section 3.3.
      During the Term, the Service Providers shall maintain insurance as required
      by
      Exhibit B hereto and the cost of such insurance, to the extent applicable to
      the
      Acquired Property, shall be an Additional Expense. The Company shall be named
      as
      additional insureds on all policies required to be carried by the Service
      Providers hereunder. Within five days after the Effective Date, the Service
      Providers shall deliver to the Company certificates evidencing the insurance
      coverages required hereunder. Such certificates shall provide that any change
      restricting or reducing coverage or the cancellation of any policies under
      which
      the certificates are issued shall not be valid with respect to the Company’s
      interests therein until the Company has received at least 30 days prior written
      notice of such change or cancellation. Further, such certificates shall state
      that the insurance is primary coverage and not concurrent with or excess over
      other valid insurance which may be available to the Company. Should any coverage
      subject of any such certificate expire or lapse during the continuance of this
      Agreement, the Service Providers shall provide renewal or replacement
      certificates of insurance immediately upon the expiration or termination of
      any
      such coverage. All policies required to be carried by the Service Provider
      hereunder shall be endorsed to provide waiver of subrogation rights in favor
      of
      the Company. The Service Providers agree to comply with all terms of the
      insurance contracts required to be maintained by it in Exhibit B
      hereto.

     

    2.7       
      Waiver ofLiens. The Service Providers
      acknowledge and agree that the Acquired Property is the property of the Company.
      Each of the Service Providers hereby waive, release and discharge the Acquired
      Property from any and all liens and charges of every character and however
      arising that either of the Service Providers may now or hereafter have against
      the Acquired Property or any Ordered Rig for labor, materials and/or services
      (including the Services) furnished pursuant to this Agreement or otherwise.
      It
      is the intention of the Service Providers to relinquish and release to the
      Company the Acquired Property (whether as an Accepted Rig or otherwise) free
      and
      clear of all liens and lien claims of every character that the Service Providers
      or any Person acting by, through or under either of the Service Providers may
      now or hereafter have against such Acquired Property for labor, materials and/or
      services (including the Services) furnished pursuant to this Agreement. The
      Service Providers agree and covenant that all laborers and servicemen employed
      or to be employed by the Service Providers and any Person acting by, through
      or
      under either Service Provider, if any, and all costs and expenses for materials
      attached to or included in the Acquired Property shall be fully paid and that
      no
      laborer or servicemen shall have any claim, demand or lien on the Acquired
      Property, and that no chattel mortgage, security interest, conditional bill
      of
      sale or retention of title agreement shall be given or executed by the Service
      Providers in connection with the Acquired Property or the Services. In
      connection with this Section 2.7, each of the Service Providers hereby agrees
      execute any waiver of liens or other release of liens as requested by the
      Company from time to time.

     

     

    
      
        
        

      

      
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          5

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      3

    OTHER
      OBLIGATIONS

     

    3.1       
      Acquisition
      Costs. The
      Service Providers have acquired some of the materials and components for the
      Existing Rig Constructions and will acquire all of the materials and components
      for each Ordered Rig for and on behalf of the Company (such materials and
      components, the “Acquired
      Property”).
      The
      Service Providers have and shall keep detailed and accurate records (including
      third-party invoices and expense reports) to reflect the actual costs of the
      Acquired Property and the Additional Expenses, and the Service Providers have
      or
      will forward from time to time copies of such third-party invoices and expense
      reports to the Company for payment. The Company has paid or will pay each
      relevant third-party for which it has received an invoice in accordance with
      this Section 3.1 and, upon such payment, the Company shall be the sole owner
      of
      the Acquired Property purchased pursuant to such invoice. The Company shall
      reimburse the Service Providers for any Additional Expenses for which it has
      received an expense report in accordance with this Section 3.1. Upon request,
      the Service Providers will identify the physical location of each piece of
      Acquired Property within the Service Providers’ care, custody or control and
      allow the Company access to such Acquired Property for inspection.

     

    3.2        
      Acceptance.
      Within 10 days of a notice from the Service Providers to the Company that any
      Ordered Rig is complete, the Company shall have the right to fully inspect
      such
      Ordered Rig and reject or accept such Ordered Rig in its reasonable discretion
      based upon whether such Ordered Rig was constructed in accordance with the
      Design Services and the specifications agreed by the parties for such Ordered
      Rig. If the Company determines to accept such Ordered Rig, the Company shall
      notify the Service Providers of such acceptance (an “Acceptance
      Notice”
and
      such
      Ordered Rig, an “Accepted
      Rig”).
      If the
      Company determines to reject such Ordered Rig, the Company shall notify the
      Service Providers of such rejection, such notice to specify in reasonable detail
      the reasons for such rejection.

     

    3.3        
      Delivery.
      For each Accepted Rig, the Service Providers shall deliver such Accepted Rig
      to
      the Company at the location specified by the Company for such Accepted Rig
      (the
“Point
      of Delivery”)
      and,
      upon receipt by the Company at the Point of Delivery, risk of loss of the
      Accepted Rig will pass to the Company.

     

    3.4       
      Access.
      The Company may at any time visit the worksite where the Construction Services
      are being performed to observe the work of the Service Providers. The Company
      may inspect the quality of such work as reasonably requested from time to
      time.

     

     

    
      
        
        

      

      
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          6

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      4

    TERM,
      TERMINATION AND RELATED MATTERS

     

    4.1       
      Term.
      The
      term
      of this Agreement shall commence on the Effective Date and end on the second
      anniversary of the Effective Date (the “Initial
      Term”)
      unless
      earlier terminated in accordance with Section 4.2; provided that the term will
      be extended to the fourth anniversary of the Effective Date unless written
      notice to the contrary is given by the Company to the Service Providers’ at
      least 30 days prior to the end of the Initial Term (the Service Providers’
actual period of engagement, whether extending past the Initial Term or
      terminated earlier in accordance with this Agreement, is referred to herein
      as
      the “Term”).

     

    4.2        Termination.

     

    (a)  
      If at any
      time either the Company or the Service Providers (in either case, a
“Defaulting
      Party”)
      shall
      refuse or fail to comply in any material respect with any of its obligations
      under this Agreement (a “Material
      Default”),
      then
      the Company (if either or both of the Service Providers are the Defaulting
      Party) or the Service Providers (if the Company is the Defaulting Party) (as
      applicable, the “Non-Defaulting
      Party”)
      may
      give written notice to the Defaulting Party, and if such Defaulting Party fails
      to remedy the Material Default within 30 days after such notice is given, the
      Non-Defaulting Party may suspend performance under this Agreement until such
      time as the Material Default is cured. The Non-Defaulting Party may terminate
      this Agreement for a Material Default by the Defaulting Party under this
      Agreement that is not cured within 30 days after suspension of performance
      in
      accordance with this Section 4.2(a).

     

        
                       
(b)  
      This
      Agreement shall terminate automatically either (i) upon Breckon’s death or (ii)
      the failure by Breckon, by reason of illness, incapacity or other disability,
      to
      perform his duties or fulfill his obligations under this Agreement in the view
      of the Company and as certified in writing by a competent medical physician
      chosen by the Company, for a period of 30 consecutive days or a cumulative
      period of 180 total days in any 12-month period. 

     

                    4.3         Effect
      of Termination.
      If this
      Agreement terminates, the rights and obligations of the parties hereunder shall
      terminate without any further liability of either party to the other party,
      except that the provisions contained in Sections 6, 7 and 8 shall survive any
      such termination and except that the liabilities of each party that have accrued
      prior to such termination shall remain the liabilities of such party from and
      after such termination.

     

    ARTICLE
      5

    COMPENSATION
      AND BONUSES

     

    5.1       
      Base
      Compensation.
      During
      the Term, the Company shall pay Breckon gross annual compensation of $200,000
      (the “Base
      Compensation”). The
      Company shall pay the Base Compensation to Breckon in equal monthly
      installments.

     

            5.2       
      Bonuses.In
      addition to the Base Compensation due under Section 5.1, for each Accepted
      Rig,
      the Company shall pay Romfor a rig completion bonus (a “Bonus”)
      of both
      (a) $650,000 and (b) 100,000 shares of common stock of the Company, in each
      case
      within 30 days of the date of delivery of
      any
      Accepted Rig at the Point of Delivery in accordance with Section
      3.3.

     

     

    
      
        
        

      

      
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          7

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      6

    PROTECTION
      OF INFORMATION

     

    6.1        
      Disclosure
      to and Property of the Company.
      All
      information, designs, ideas, concepts, improvements, product developments,
      discoveries and inventions, whether patentable or not, that are conceived,
      made,
      developed or acquired by the Service Providers, individually, collectively
      or in
      conjunction with others, during the Term that relate to the Company’s business,
      products or services (including, without limitation, all such information
      relating to the Services) (collectively, “Confidential
      Information”)
      shall
      be disclosed to the Company and are and shall be the sole and exclusive property
      of the Company. Moreover, all documents, videotapes, written presentations,
      brochures, drawings, memoranda, notes, records, files, correspondence, manuals,
      models, specifications, computer programs, e-mail, voice mail, electronic
      databases, maps, drawings and all other writings or materials of any type
      embodying any of such information, ideas, concepts, improvements, discoveries,
      inventions and other similar forms of expression (collectively, “Work
      Product”)
      are and
      shall be the sole and exclusive property of the Company. Upon termination of
      this Agreement by the Company, for any reason, the Service Providers promptly
      shall deliver such Confidential Information and Work Product, and all copies
      thereof to the Company.

     

    6.2        
      Disclosure
      to Service Provider.The
      Company may disclose to or place the Service Providers in a position to
      have access to or develop
      Confidential Information and Work Product of the Company. Subject to
      the provisions of this Agreement, the Service Providers agree to preserve and
      protect the confidentiality of all Confidential Information or Work Product
      of
      the Company.

     

    6.3       
      No
      Unauthorized Use or Disclosure.The
      Service Providers agree that they will not, at any time during or after the
      Term, make any unauthorized disclosure of Confidential Information or Work
      Product, or make any use thereof, except in the carrying out of the Services.
      The Service
      Providers shall use commercially reasonable efforts to cause all Persons to
      whom
      any Confidential Information shall be disclosed by him hereunder to observe
      the
      terms and conditions set forth herein as though each such Person was bound
      hereby.

     

    6.4       
      Remedies.The
      Service Providers acknowledge that money damages would not be a sufficient
      remedy for any breach of this Article 6 by the Service Providers, and the
      Company shall be entitled to enforce the provisions of this Article 6 by
      terminating payments then owing to the Service Providers under this Agreement
      or
      otherwise and to specific performance and injunctive relief as remedies for
      such
      breach or any threatened breach. Such remedies shall not be deemed the exclusive
      remedies for a breach of this Article, but shall be in addition to all remedies
      available at law or in equity, including the recovery of damages from the
      Service Providers and their agents.

     

     

    
      
        
        

      

      
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          8

        
          

        

      

      
        
        

      

    

     

    ARTICLE 7

    MISCELLANEOUS

     

    7.1       
      Notices.
      For
      purposes of this Agreement, notices and all other communications provided for
      herein shall be in writing and shall be deemed to have been duly given when
      personally delivered or delivered by facsimile during business hours or when
      mailed by United States registered or certified mail, return receipt requested,
      postage prepaid, addressed as follows:

     

     

    
      	If
              to the Company to:	
              Standard
                Drilling, Inc.

              1667
                K Street NW, Suite 1230

              Washington,
                DC 20006

              Facsimile
                No.:  202-223-4406 

              Attention:
                Prentis B. Tomlinson, Jr. Chairman

            
	 	 
	 If
              to the Service Providers to:	Stuart
              Breckon
              
              1035 Dairy Ashford, Suite 320

              Houston, TX 77079

            

    

                     

                     

    or
      to such
      other address as either the Company or the Service Providers may furnish to
      the
      other in writing in accordance herewith, except that notices of changes of
      address shall be effective only upon receipt.

     

    7.2       
      Applicable
      Law. This
      Agreement is entered into under, and shall be governed for all purposes by,
      the
      laws of the State of Texas.

     

    7.3       
      No
      Waiver.No
      failure
      by either party hereto at any time to give notice of any breach by the other
      party of, or to require compliance with, any condition or provision of this
      Agreement shall be deemed a waiver of similar or dissimilar provisions or
      conditions at the same or at any prior or subsequent time.

     

    7.4       
      Severability.To
      the
      extent permitted by applicable law, the Company and the Service Providers hereby
      agree that any term or provision of this Agreement that renders such term or
      provision or any other term or provision hereof invalid or unenforceable in
      any
      respect shall be modified to the extent necessary to avoid rendering such term
      or provision invalid or unenforceable, and such modification shall be
      accomplished in the manner that most nearly preserves the benefit of the Company
      and the Service Providers bargain hereunder. If a court of competent
      jurisdiction determines that any term or provision of this Agreement is invalid
      or unenforceable, then the invalidity or unenforceability of that term or
      provision shall not affect the validity or enforceability of any other term
      or
      provision of this Agreement, and all other terms or provisions shall remain
      in
      full force and effect so long as the economic or legal substance of the
      transactions contemplated hereby is not affected in a materially adverse manner
      with respect to either party.

     

     

    
      
        
        

      

      
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    7.5       
      Counterparts.This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed to be an original, but all of which together will constitute one and
      the
      same Agreement.

     

    7.6       
      Headings.The
      section headings have been inserted for purposes of convenience and shall not
      be
      used for interpretive purposes.

     

    7.7       
      Assignment.This
      Agreement shall be binding upon and inure to the benefit of the Company and
      any
      successor of the Company. This Agreement and the rights and obligations of
      the
      parties hereunder are personal and neither this Agreement nor any right, benefit
      or obligation of the Service Providers shall be subject to voluntary or
      involuntary assignment, alienation or transfer, whether by operation of law
      or
      otherwise, without the prior written consent of the Company.

     

    7.8       
      Amendment;
      Entire Agreement.
      This
      Agreement may not be changed orally but only by an agreement in writing agreed
      to and signed by both parties. This Agreement constitutes the entire agreement
      of the parties with regard to the subject matter hereof, contains all the
      covenants, promises, representations, warranties and agreements between the
      parties with respect to the engagement of the Service Providers by the Company
      and supersedes any and all prior agreements, including employment agreements,
      consulting agreements, bonus plans, benefit plans and other compensation or
      benefit plans between Breckon or Romfor and the Company.

     

    7.9       
      Arbitration.

     

    (a)  The
      parties shall use their reasonable efforts to resolve disputes arising out
      of
      this Agreement on an amicable basis. If any such dispute remains unresolved
      after such period of 30 days, then the matter shall forthwith be referred to
      arbitration pursuant to the terms of Section 7.9(b).

     

      
      (b)  To
      resolve
      a dispute that has not been resolved under Section 7.9(a), the matter shall
      be
      referred either by the Service Providers or the Company (in either case, the
      “Claimant”)
      to
      arbitration by one arbitrator pursuant to the Rules of Commercial Arbitration
      (the “Rules”).
      The
      Claimant shall file a request for arbitration with the American Arbitration
      Association (“AAA”)
      and
      notify the other party (the “Respondent”)
      in
      writing of the nature of the dispute. The arbitrator shall be appointed by
      the
      AAA in accordance with the Rules. Following the selection of the arbitrator
      as
      set forth above, the arbitration shall be conducted promptly and expeditiously
      so as to enable the arbitrator to render a decision within 30 days. Subject
      to
      the foregoing and except to the extent the parties shall agree to the contrary,
      the arbitrator hearing the dispute shall apply and follow the Federal Rules
      of
      Civil Procedure and the Federal Rules of Evidence. If there is any conflict
      between the Rules and this Section 7.9, this Section 7.9 shall govern. The
      arbitration shall be held in Houston, Texas. The parties acknowledge that the
      arbitrator shall have the authority to grant equitable remedies, if
      appropriate.

     

    (c)  Arbitration
      under this Section 7.9 shall be the exclusive means for a party to seek
      resolution of any dispute arising out of, or any breach or alleged breach of,
      this Agreement, except that any party may bring an action before a competent
      court for the adoption of provisional or protective measures or equitable
      relief. The award of the arbitrator shall be final and binding on the parties.
      Each of the Claimant and the Respondent shall bear (i) in equal proportions
      the
      cost and expenses of the arbitration proceeding assessed by the AAA, and (ii)
      their respective expenses in prosecuting or defending the
      arbitration.

     

     

    
      
        
        

      

      
        Page
          10

        
          

        

      

      
        
        

      

       

    

    (d)  Judgment
      on the arbitral award rendered may be entered in any court having jurisdiction
      or application may be made to such for a judicial acceptance of the award and
      an
      order of enforcement, as the case may be. The parties acknowledge and agree
      that
      any party may seek before any court of competent jurisdiction, provisional,
      protective or equitable relief.

     

    7.10       
      Existing
      Rigs. The
      parties acknowledge that the Existing Rig Constructions were initiated but
      not
      completed prior to the Effective Date and agree that the Existing Rig
      Constructions are hereby deemed to be Ordered Rigs for all purposes under this
      Agreement. Any services provided by the Service Providers with respect to such
      Existing Rig Constructions shall be deemed to be the relevant Service to be
      provided under this Agreement. From and after the Effective Date, the parties
      rights and obligations with respect to the Existing Rig Constructions are
      governed by this Agreement and any prior agreement, oral or written, between
      or
      among the parties with respect to such Existing Rig Constructions is hereby
      terminated.

     

    7.11       
      Limitations
      of Liability.
      The
      Service Providers shall be responsible for and shall release, defend, protect,
      indemnify and hold harmless the Company and its affiliates, officers, employees
      and representatives (the “Company
      Group”)
      from
      and against any and all Claims with respect to either Service Provider’s breach
      of this Agreement or with respect to injury, illness or death of, or damage
      to
      or loss of property, equipment, tools, or materials of, the Service Providers
      and their employees, agents or representatives, arising out of or in any way
      connected with the performance of the Services or this Agreement, REGARDLESS
      OF
      WHETHER CAUSED OR CONTRIBUTED TO BY THE SOLE, JOINT OR CONCURRENT NEGLIGENCE
      OR
      OTHER FAULT OR STRICT LIABILITY OF ANY OF THE COMPANY GROUP, but excluding,
      with
      respect to a given member of the Company Group, if caused by the intentional
      misconduct of such member of the Company Group.

     

    7.12       
      Custodial
      Responsibility for the Company’s Property.The
      Service Providers shall be responsible for and shall release, defend, protect,
      indemnify and hold harmless the Company Group from and against any and all
      Claims with respect to damage, destruction or loss of property, equipment,
      tools
      or materials of the Company Group (including Acquired Property) that the Service
      Providers have taken possession of, or have assumed risk of loss or exercised
      custody or control over, in connection with the performance of the Services
      or
      this Agreement, REGARDLESS OF WHETHER CAUSED OR CONTRIBUTED TO BY THE SOLE,
      JOINT OR CONCURRENT NEGLIGENCE OR OTHER FAULT OR STRICT LIABILITY OF ANY OF
      THE
      COMPANY GROUP; but excluding, with respect to a given member of the Company
      Group, if caused by the intentional misconduct of such member of the Company
      Group.

     

     

    
      
        
        

      

      
        Page
          11

        
          

        

      

      
        
        

      

    

     

    7.13       
      Third
      Persons and Property.The
      Service Providers shall be responsible for and shall release, defend, protect,
      indemnify and hold harmless the Company Group from and against any and all
      Claims with respect to injury, illness or death of, or damage to or loss of
      property, equipment, tools, or materials of, any Person in connection with
      the
      performance of the Services or this Agreement to the extent caused by the
      Service Provider’s act or omission.

     

    IN
      WITNESS
      WHEREOF, the parties hereto have executed this Agreement as of the date first
      set forth above, to be effective as of the Effective Date.

     

    
       

      
        	 	STANDARD
                DRILLING, INC.
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	 	 
	 	ROMFOR
                INTERNATIONAL, LTD
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	 	 
	 	STUART
                BRECKON 
	 	 	 
	 	 	 
	 	 

      

      
 

    

    
      
        
        

      

      
        Page
          12

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      A

    

    EXISTING
      RIG CONSTRUCTIONS

    

     

    Rig
      # 1 Inventory

    For
      Depths of 8,000 to 12,000 ft.

     

    
      
        	DRAWWORKS:	Electrohoist
                II drawworks rated at 1200 HP. Powered by 2 GE 752 traction motors
                (1,000
                hp each). Wichita 336H Brake. Grooved for 1 3/8” drilling
                line.
	 	 
	MAST:	Parco
                Model SL 136A mast rated at 750,000 lb hook load capacity. 136’ clear
                height. Six 48” sheaves and one 55” fastline sheave, grooved for 1 3/8”
                line. API rated maximum static hook load of 750,000 lb with 12 lines
                strung.
	 	 
	SUBSTRUCTURE:	Parco
                Model SL 136A substructure with drill floor height of 21’, width of 27’ 6”
                and clear cellar span of 15’6”. Rated at 638,000 lb casing capacity and
                487,000 lb setback capacity.
	 	 
	BLOCK:	400
                ton Upetrom block
	 	 
	HOOK:	400
                ton Upetrom hook
	 	 
	SWIVEL:	400
                ton Upetrom swivel
	 	 
	ROTARY
                TABLE:	27
                1⁄2” Chinese Ideco rotary table independently powered by 1 - GE 752 traction
                motor (1,000 hp)
	 	 
	KELLY:	5
1⁄4”
                hex Kelly, Varco Model 27 HDP pin drive, 3 1/2'’ x 55’ Taurus
                hose
	 	 
	MUD
                PUMPS:	
                1
                  -
                  Chinese EMSCO FB-1600 triplex mud pump (1600 hp) independently
                  powered by
                  2 - GE 752 traction motors (1,000 hp each)

                1
                  -
                  Chinese EMSCO FB-1600 triplex mud pump (1600 hp) independently
                  powered by
                  2 - GE 752 traction motors (1,000 hp each)

              
	 	 
	MUD
                SYSTEM:	1000
                bbl, 2 tank system consisting of:
	 	 
	 	Shaker
                tank: 500 bbl, 3 runner skid mud tank with 3 - Swaco ALS linear motion
                shakers, Brandt 2 x 10” desander, Swaco desilter with 12 x 4” cones, 2- 5
                x 6 mission centrifugal pumps p/b 50 hp electric motors, 1 - 10 hp
                mud
                agitator, Drillco electric pit degasser, poor boy degasser. 
	 	 
	 	Suction
                tank: 500 bbl, 3 runner skid mud tank with 2 - 5x6 mission centrifugal
                pumps p/b 50 hp electric motors and 3 - 10 hp agitators.
	 	 
	BOP
                EQUIPMENT	
                1
                  -
                  13 5/8” x 5,000 psi Shaffer spherical

                1
                  -
                  13 5/8” x 5,000 psi Cameron type U double

                1
                  -
                  13 5/8” x 5,000 psi Cameron type U
                  single

              

      

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	CLOSING
                UNIT:	
                Koomey
                  6 station closing unit, 190 gallon

                c/w
                  1 electric and two air pumps, with remote

              
	 	 
	CHOKE
                MANIFOLD:	
                1
                  -
                  3 1/16”, 5,000 psi manual choke

                1
                  -
                  3 1/16”, 5,000 psi hydraulic choke

              
	 	 
	SCR:	I.E.C.
                Systems SCR with 3 Model 1500 SCR drive cubicles and one engine/generator
                power control system for 4 power units.
	 	 
	POWER
                GENERATION:	3
                Caterpillar D-399 diesel engines with Caterpillar SR4 generator ends
                (1030
                kw)
	 	 
	COMPRESSORS	2
                -
                Gardner Denver 40 hp electric screw type compressors
	 	 
	DRILL
                PIPE:	12,000
                ft of 4 1⁄2”” Grade E and G
	 	 
	DRILL
                COLLARS:	16
                -
                8” drill collars, 21 - 6” drill collars
	 	 
	INSTRUMENTATION:	
                5
                  pen drilling recorder

                Totco
                  deviation recording tool

              
	 	 
	HANDLING
                TOOLS:	All
                handling tools for 4 1⁄2” drill pipe, 6” and 8” drill collars
	 	 
	ROTARY
                TONGS:	BJ
                Type “B” rotary tongs, 3 1⁄2” to 13 3/8”
	 	 
	WINCHES:	2
                -
                10,000 lbs capacity drill floor winches
	 	 
	OTHER
                EQUIPMENT:	Fuel
                tank (8,000 gallons) with 2 transfer pumps and filter system, water
                tank
                with 2 centrifugal pumps, kelly spinner, pipe spinner, full rig lighting,
                upper dog house, mechanic shop

      

    
 

    
      
        
        

      

      
        Page
          2

        
          

        

      

      
        
        

      

    

    
 

    Rig
      # 2 Inventory

    For
      Depths of 8,000 to 12,000 ft.

     

    
      	DRAWWORKS:	Electrohoist
              II drawworks rated at 1200 HP. Powered by 2 GE 752 traction motors
              (1,000
              hp each). Wichita 336H Brake. Grooved for 1 3/8” drilling
              line.
	 	 
	MAST:	Parco
              Model SL 136A mast rated at 750,000 lb hook load capacity. 136’ clear
              height. Six 48” sheaves and one 55” fastline sheave, grooved for 1 3/8”
              line. API rated maximum static hook load of 750,000 lb with 12 lines
              strung.
	 	 
	SUBSTRUCTURE:	Parco
              Model SL 136A substructure with drill floor height of 21’, width of 27’ 6”
              and clear cellar span of 15’6”. Rated at 638,000 lb casing capacity and
              487,000 lb setback capacity.
	 	 
	BLOCK:	400
              ton Upetrom block
	 	 
	HOOK:	400
              ton Upetrom hook
	 	 
	SWIVEL:	400
              ton Upetrom swivel
	 	 
	ROTARY
              TABLE:	27
              1⁄2” Chinese Ideco rotary table independently powered by 1 - GE 752 traction
              motor (1,000 hp)
	 	 
	KELLY:	5
1⁄4”
              hex Kelly, Varco Model 27 HDP pin drive, 3 1/2'’ x 55’ Taurus
              hose
	 	 
	MUD
              PUMPS:	
              1
                -
                Chinese EMSCO FB-1600 triplex mud pump (1600 hp) independently powered
                by
                2 - GE 752 traction motors (1,000 hp each)

              1
                -
                Chinese EMSCO FB-1600 triplex mud pump (1600 hp) independently powered
                by
                2 - GE 752 traction motors (1,000 hp each)

            
	 	 
	MUD
              SYSTEM:	1000
              bbl, 2 tank system consisting of:
	 	 
	 	Shaker
              tank: 500 bbl, 3 runner skid mud tank with 3 - Swaco ALS linear motion
              shakers, Brandt 2 x 10” desander, Swaco desilter with 12 x 4” cones, 2- 5
              x 6 mission centrifugal pumps p/b 50 hp electric motors, 1 - 10 hp
              mud
              agitator, Drillco electric pit degasser, poor boy degasser.
	 	 
	 	Suction
              tank: 500 bbl, 3 runner skid mud tank with 2 - 5x6 mission centrifugal
              pumps p/b 50 hp electric motors and 3 - 10 hp agitators.
	 	 
	BOP
              EQUIPMENT	
              1
                -
                13 5/8” x 5,000 psi Shaffer spherical
1 - 13 5/8” x 5,000 psi Cameron
                type U double

              1
                -
                13 5/8” x 5,000 psi Cameron type U single

            
	 	 
	CLOSING
              UNIT:	
              Koomey
                6 station closing unit, 190 gallon

              c/w
                1 electric and two air pumps, with
                remote

            

    

     

     

    
      
        
        

      

      
        Page
          3

        
          

        

      

      
        
        

      

    

     

    
      	CHOKE
              MANIFOLD:	
              1
                -
                3 1/16”, 5,000 psi manual choke

              1
                -
                3 1/16”, 5,000 psi hydraulic choke

            
	 	 
	SCR:	I.E.C.
              Systems SCR with 3 Model 1500 SCR drive cubicles and one engine/generator
              power control system for 4 power units.
	 	 
	POWER
              GENERATION:	3
              Caterpillar D-399 diesel engines with Caterpillar SR4 generator ends
              (1030
              kw)
	 	 
	COMPRESSORS	2
              -
              Gardner Denver 40 hp electric screw type compressors
	 	 
	DRILL
              PIPE:	12,000
              ft of 4 1⁄2”” Grade E and G
	 	 
	DRILL
              COLLARS:	16
              -
              8” drill collars, 21 - 6” drill collars
	 	 
	INSTRUMENTATION:	
              5
                pen drilling recorder

              Totco
                deviation recording tool

            
	 	 
	HANDLING
              TOOLS:	All
              handling tools for 4 1⁄2” drill pipe, 6” and 8” drill collars
	 	 
	ROTARY
              TONGS:	BJ
              Type “B” rotary tongs, 3 1⁄2” to 13 3/8”
	 	 
	WINCHES:	2
              -
              10,000 lbs capacity drill floor winches
	 	 
	OTHER
              EQUIPMENT:	Fuel
              tank (8,000 gallons) with 2 transfer pumps and filter system, water
              tank
              with 2 centrifugal pumps, kelly spinner, pipe spinner, full rig lighting,
              upper dog house, mechanic shop

     

     

    
      
        
        

      

      
        Page
          4

        
          

        

      

      
        
        

      

    

    
 

    Rig
      # 3 Inventory

    For
      Depths of 10,000 to 15,000 ft.

    

    
      	DRAWWORKS:	Electrohoist
              II drawworks rated at 1500 HP. Powered by 2 GE 752 traction motors
              (1,000
              hp each). Wichita 336H Brake. Grooved for 1 3/8” drilling
              line.
	 	 
	MAST:	Parco
              Model SL 142A mast rated at 1,050,000 lb hook load capacity. 142’ clear
              height. Six 60” sheaves and one 60” fastline sheave, grooved for 1 3/8”
              line. API rated maximum static hook load of 1,050,000 lb with 12 lines
              strung.
	 	 
	SUBSTRUCTURE:	Parco
              Model SL 142A substructure with drill floor height of 28’, width of 29’ 6”
              and clear cellar span of 19’ 6”. Rated at 1,050,000 lb casing capacity and
              682,500 lb setback capacity.
	 	 
	BLOCK:	500
              ton Upetrom block
	 	 
	HOOK:	500
              ton Upetrom hook
	 	 
	SWIVEL:	500
              ton Upetrom swivel
	 	 
	ROTARY
              TABLE:	27
              1⁄2” Chinese Ideco rotary table independently powered by 1 - GE 752 traction
              motor (1,000 hp)
	 	 
	KELLY:	5
1⁄4”
              hex Kelly, Varco Model 27 HDP pin drive, 3 1/2'’ x 55’ Taurus
              hose
	 	 
	MUD
              PUMPS:	
              1
                -
                Chinese EMSCO FB-1600 triplex mud pump (1600 hp) independently powered
                by
                2 - GE 752 traction motors (1,000 hp each)

              1-
                Chinese EMSCO FB-1600 triplex mud pump (1600 hp) independently powered
                by
                2 - GE 752 traction motors (1,000 hp each)

            
	 	 
	MUD
              SYSTEM:	1000
              bbl, 2 tank system consisting of:
	 	 
	 	Shaker
              tank: 500 bbl, 3 runner skid mud tank with 3 - Swaco ALS linear motion
              shakers, Brandt 2 x 10” desander, Swaco desilter with 12 x 4” cones, 2- 5
              x 6 mission centrifugal pumps p/b 50 hp electric motors, 1 - 10 hp
              mud
              agitator, Drillco electric pit degasser, poor boy degasser.
	 	 
	 	Suction
              tank: 500 bbl, 3 runner skid mud tank with 2 - 5x6 mission centrifugal
              pumps p/b 50 hp electric motors and 3 - 10 hp agitators.
	 	 
	BOP
              EQUIPMENT	
              1
                -
                13 5/8” x 5,000 psi Shaffer spherical

              1
                -
                13 5/8” x 5,000 psi Cameron type U double

              1
                -
                13 5/8” x 5,000 psi Cameron type U single

            
	 	 
	CLOSING
              UNIT:	
              Koomey
                6 station closing unit, 190 gallon

              c/w
                1 electric and two air pumps, with
                remote

            

    

     

     

    
      
        
        

      

      
        Page
          5

        
          

        

      

      
        
        

      

    

     

    
      	CHOKE
              MANIFOLD:	1
              -
              3 1/16”, 5,000 psi manual choke 
              1
                -
                3 1/16”, 5,000 psi hydraulic choke

            
	 	 
	SCR:	I.E.C.
              Systems SCR with 3 Model 1500 SCR drive cubicles and one engine/generator
              power control system for 4 power units.
	 	 
	POWER
              GENERATION:	3
              Caterpillar D-399 diesel engines with Caterpillar SR4 generator ends
              (1030
              kw)
	 	 
	COMPRESSORS	2
              -
              Gardner Denver 40 hp electric screw type compressors
	 	 
	DRILL
              PIPE:	14,000
              ft of 5” Grade E and G
	 	 
	DRILL
              COLLARS:	16
              -
              8” drill collars, 21 - 6” drill collars
	 	 
	INSTRUMENTATION:	5
              pen drilling recorder 
              Totco
                deviation recording tool

            
	 	 
	HANDLING
              TOOLS:	All
              handling tools for 5” drill pipe, 6” and 8” drill collars
	 	 
	ROTARY
              TONGS:	BJ
              Type “B” rotary tongs, 3 1⁄2” to 13 3/8”
	 	 
	WINCHES:	2
              -
              10,000 lbs capacity drill floor winches
	 	 
	OTHER
              EQUIPMENT:	Fuel
              tank (8,000 gallons) with 2 transfer pumps and filter system, water
              tank
              with 2 centrifugal pumps, kelly spinner, pipe spinner, full rig lighting,
              upper dog house, mechanic shop

    

     

     

    
      
        
        

      

      
        Page
          6

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      B

     

    INSURANCE
      REQUIREMENTS

     

     

    
       

      
        Page
          7Unassociated Document

    Exhibit
      10.3

     

    

      STANDARD
        DRILLING, INC.

       

      2006
        STOCK INCENTIVE PLAN

       

      PURPOSE

       

      The
        purpose of the STANDARD
        DRILLING, INC. 2006
        STOCK INCENTIVE PLAN
        (the
“Plan”) is to provide a means through which STANDARD
        DRILLING, INC.,
        a Nevada
        corporation (the “Company”), and its Affiliates may attract able persons to
        serve as Directors or Consultants or to enter the employ of the Company and
        its
        Affiliates and to provide a means whereby those individuals upon whom the
        responsibilities of the successful administration and management of the Company
        and its Affiliates rest, and whose present and potential contributions to
        the
        Company and its Affiliates are of importance, can acquire and maintain stock
        ownership, thereby strengthening their concern for the welfare of the Company
        and its Affiliates. A further purpose of the Plan is to provide such individuals
        with additional incentive and reward opportunities designed to enhance the
        profitable growth of the Company and its Affiliates. Accordingly, the Plan
        provides for granting Incentive Stock Options, options that do not constitute
        Incentive Stock Options, Restricted Stock Awards, or any combination of the
        foregoing, as is best suited to the circumstances of the particular employee,
        Consultant or Director as provided herein. 

      
         

        DEFINITIONS

         

      

      The
        following definitions shall be applicable throughout the Plan unless
        specifically modified by any paragraph:

       

        “Affiliate”
means
        any corporation, partnership, limited liability company or partnership,
        association, trust or other organization which, directly or indirectly,
        controls, is controlled by, or is under common control with, the Company.
        For
        purposes of the preceding sentence, “control” (including, with correlative
        meanings, the terms “controlled by” and “under common control with”), as used
        with respect to any entity or organization, shall mean the possession, directly
        or indirectly, of the power (i) to vote more than 50% of the securities having
        ordinary voting power for the election of directors of the controlled entity
        or
        organization, or (ii) to direct or cause the direction of the management
        and
        policies of the controlled entity or organization, whether through the ownership
        of voting securities or by contract or otherwise.

       

        “Award”
means,
        individually or collectively, any Option or Restricted Stock Award.

       

        “Board”
means
        the Board of Directors of the Company.

       

        “Code”
means
        the Internal Revenue Code of 1986, as amended. Reference in the Plan to any
        section of the Code shall be deemed to include any amendments or successor
        provisions to such section and any regulations under such section.

       

        “Committee”
means
        a
        committee of the Board that is selected by the Board as provided in Paragraph
        IV(a). 

       

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

        “Common
        Stock”
means
        the common stock, par value $0.001 per share, of the Company, or any security
        into which such common stock may be changed by reason of any transaction
        or
        event of the type described in Paragraph IX.

       

        “Company”
means
        Standard Drilling, Inc., a Nevada corporation, and any successor thereto
        that
        adopts the Plan.

       

        “Consultant”
means
        any person who is not an employee or a Director and who is providing advisory
        or
        consulting services to the Company or any Affiliate.

       

        “Corporate
        Change”
shall
        have the meaning assigned to such term in Paragraph IX(c) of the
        Plan.

       

        “Director”
means
        an
        individual who is a member of the Board.

       

        An
        “employee”
means
        any person (including a Director) in an employment relationship with the
        Company
        or any Affiliate.

       

        “Fair
        Market Value”
means,
        as of any specified date, the mean of the high and low sales prices of the
        Common Stock (i) reported by the National Market System of NASDAQ on that
        date
        or (ii) if the Common Stock is listed on a national stock exchange, reported
        on
        the stock exchange composite tape on that date (or such other reporting service
        approved by the Committee); or, in either case, if no prices are reported
        on
        that date, on the last preceding date on which such prices of the Common
        Stock
        are so reported. If the Common Stock is traded over the counter at the time
        a
        determination of its fair market value is required to be made hereunder,
        its
        fair market value shall be deemed to be equal to the average between the
        reported high and low or closing bid and asked prices of Common Stock on
        the
        most recent date on which Common Stock was publicly traded. In the event
        Common
        Stock is not publicly traded at the time a determination of its value is
        required to be made hereunder, the determination of its fair market value
        shall
        be made by the Committee in such manner as it deems appropriate. Notwithstanding
        the foregoing, the Fair Market Value of a share of Common Stock on the date
        of
        an initial public offering of Common Stock shall be the offering price under
        such initial public offering. 

       

        “Incentive
        Stock Option”
means
        an
        incentive stock option within the meaning of section 422 of the
        Code.

       

        “Option”
means
        an
        Award granted under Paragraph VII of the Plan and includes both Incentive
        Stock
        Options to purchase Common Stock and Options that do not constitute Incentive
        Stock Options to purchase Common Stock.

       

        “Option
        Agreement”
means
        a
        written agreement between the Company and a Participant with respect to an
        Option.

       

        “Participant”
means
        an
        employee, Consultant, or Director who has been granted an Award.

       

        “Plan”
means
        the Standard Drilling, Inc. 2006 Stock Incentive Plan, as amended from time
        to
        time.

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

         

      

        “Restricted
        Stock Agreement”
means
        a
        written agreement between the Company and a Participant with respect to a
        Restricted Stock Award.

       

        “Restricted
        Stock Award”
means
        an
        Award granted under Paragraph VIII of the Plan.

       

        “Stock
        Appreciation Right”
shall
        have the meaning assigned to such term in Paragraph VII(d) of the
        Plan.

      
         

        EFFECTIVE
          DATE AND DURATION OF THE PLAN

         

      

      The
        Plan
        shall become effective upon the date of its adoption by the Board, provided
        the
        Plan is approved by the stockholders of the Company within 12 months thereafter.
        Notwithstanding any provision in the Plan, in any Option Agreement or in
        any
        Restricted Stock Agreement, no Option shall be exercisable and no Restricted
        Stock Award shall vest prior to such stockholder approval. No further Awards
        may
        be granted under the Plan after 10 years from the date the Plan is adopted
        by
        the Board. The Plan shall remain in effect until all Options granted under
        the
        Plan have been satisfied or expired, and all Restricted Stock Awards granted
        under the Plan have vested or been forfeited.

      
         

        ADMINISTRATION

      

       

        Composition
        of Committee.
        The Plan
        shall be administered by a committee of, and appointed by, the Board. In
        the
        absence of the Board’s appointment of a committee to administer the Plan, the
        Board shall serve as the Committee. 

       

        Powers.
        Subject
        to the express provisions of the Plan, the Committee shall have authority,
        in
        its discretion, to determine which employees, Consultants, or Directors shall
        receive an Award, the time or times when such Award shall be made, whether
        an
        Incentive Stock Option or nonqualified Option shall be granted, and the number
        of shares to be subject to each Option or Restricted Stock Award. In making
        such
        determinations, the Committee shall take into account the nature of the services
        rendered by the respective employees, Consultants, or Directors, their present
        and potential contribution to the Company’s success and such other factors as
        the Committee in its discretion shall deem relevant.

       

        Additional
        Powers.
        The
        Committee shall have such additional powers as are delegated to it by the
        other
        provisions of the Plan. Subject to the express provisions of the Plan, this
        shall include the power to construe the Plan and the respective agreements
        executed hereunder, to prescribe rules and regulations relating to the Plan,
        and
        to determine the terms, restrictions and provisions of the agreement relating
        to
        each Award, including such terms, restrictions and provisions as shall be
        requisite in the judgment of the Committee to cause designated Options to
        qualify as Incentive Stock Options, and to make all other determinations
        necessary or advisable for administering the Plan. The Committee may correct
        any
        defect or supply any omission or reconcile any inconsistency in the Plan
        or in
        any agreement relating to an Award in the manner and to the extent it shall
        deem
        expedient to carry it into effect. The determinations of the Committee on
        the
        matters referred to in this Paragraph IV shall be conclusive.

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

         

        
          SHARES
            SUBJECT TO THE PLAN; GRANT OF AWARDS

        

      

       

        Shares
        Subject to the Plan.
        Subject
        to adjustment in the same manner as provided in Paragraph IX with respect
        to
        shares of Common Stock subject to Options then outstanding, the aggregate
        number
        of shares of Common Stock that may be issued under the Plan shall not exceed
        9,000,000 shares. Shares shall be deemed to have been issued under the Plan
        only
        (i) to the extent actually issued and delivered pursuant to an Award or (ii)
        to
        the extent an Award is settled in cash. To the extent that an Award lapses
        or
        the rights of its holder terminate, any shares of Common Stock subject to
        such
        Award shall again be available for the grant of an Award under the
        Plan.

       

        Grant
        of Awards.
        The
        Committee may from time to time grant Awards to one or more employees,
        Consultants, or Directors determined by it to be eligible for participation
        in
        the Plan in accordance with the terms of the Plan.

       

        Stock
        Offered.
        Subject
        to the limitations set forth in Paragraph V(a), the stock to be offered pursuant
        to the grant of an Award may be authorized but unissued Common Stock or Common
        Stock previously issued and outstanding and reacquired by the Company. Any
        of
        such shares which remain unissued and which are not subject to outstanding
        Awards at the termination of the Plan shall cease to be subject to the Plan
        but,
        until termination of the Plan, the Company shall at all times make available
        a
        sufficient number of shares to meet the requirements of the Plan.

       

      ELIGIBILITY

       

      Awards
        may
        be granted only to persons who, at the time of grant, are employees,
        Consultants, or Directors. An Award may be granted on more than one occasion
        to
        the same person, and, subject to the limitations set forth in the Plan, such
        Award may include an Incentive Stock Option, an Option that is not an Incentive
        Stock Option, a Restricted Stock Award, or any combination thereof.

       

      
        STOCK
          OPTIONS

      

       

        Option
        Period.
        The term
        of each Option shall be as specified by the Committee at the date of grant;
        provided, however, that each such Option by its terms shall not be exercisable
        after the expiration of ten years from the date of grant.

       

        Limitations
        on Exercise of Option.
        An
        Option shall be exercisable in whole or in such installments and at such
        times
        as determined by the Committee.

       

        Special
        Limitations on Incentive Stock Options.
        An
        Incentive Stock Option may be granted only to an individual who is employed
        by
        the Company or any parent or subsidiary corporation (as defined in section
        424
        of the Code) of the Company at the time the Option is granted. To the extent
        that the aggregate fair market value (determined at the time the respective
        Incentive Stock Option is granted) of stock with respect to which Incentive
        Stock Options are exercisable for the first time by an individual during
        any
        calendar year under all incentive stock option plans of the Company and its
        parent and subsidiary corporations exceeds $100,000, such Incentive Stock
        Options shall be treated as Options which do not constitute Incentive Stock
        Options. The Committee shall determine, in accordance with applicable provisions
        of the Code, Treasury Regulations and other administrative pronouncements,
        which
        of a Participant’s Incentive Stock Options will not constitute Incentive Stock
        Options because of such limitation and shall notify the Participant of such
        determination as soon as practicable after such determination. No Incentive
        Stock Option shall be granted to an individual if, at the time the Option
        is
        granted, such individual owns stock possessing more than 10% of the total
        combined voting power of all classes of stock of the Company or of its parent
        or
        subsidiary corporation, within the meaning of section 422(b)(6) of the Code,
        unless (i) at the time such Option is granted the option price is at least
        110%
        of the Fair Market Value of the Common Stock subject to the Option and (ii)
        such
        Option by its terms is not exercisable after the expiration of five years
        from
        the date of grant. An Incentive Stock Option shall not be transferable otherwise
        than by will or the laws of descent and distribution, and shall be exercisable
        during the Participant’s lifetime only by such Participant or the Participant’s
        guardian or legal representative.

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

         

      

        Option
        Agreement.
        Each
        Option shall be evidenced by an Option Agreement in such form and containing
        such provisions not inconsistent with the provisions of the Plan as the
        Committee from time to time shall approve, including, without limitation,
        provisions to qualify an Incentive Stock Option under section 422 of the
        Code.
        Each Option Agreement shall specify the effect of termination of (i) employment,
        (ii) the consulting or advisory relationship, or (iii) membership on the
        Board,
        as applicable, on the exercisability of the Option. An Option Agreement may
        provide for the payment of the option price, in whole or in part, by the
        delivery of a number of shares of Common Stock (plus cash if necessary) having
        a
        Fair Market Value equal to such option price. Moreover, an Option Agreement
        may
        provide for a “cashless exercise” of the Option by establishing procedures
        satisfactory to the Committee with respect thereto. Further, an Option Agreement
        may provide for the surrender of the right to purchase shares under the Option
        in return for a payment in cash or shares of Common Stock or a combination
        of
        cash and shares of Common Stock equal in value to the excess of the Fair
        Market
        Value of the shares with respect to which the right to purchase is surrendered
        over the option price therefor (“Stock Appreciation Rights”), on such terms and
        conditions as the Committee in its sole discretion may prescribe. In the
        case of
        any such Stock Appreciation Right that is granted in connection with an
        Incentive Stock Option, such right shall be exercisable only when the Fair
        Market Value of the Common Stock exceeds the price specified therefor in
        the
        Option or the portion thereof to be surrendered. The terms and conditions
        of the
        respective Option Agreements need not be identical. Subject to the consent
        of
        the Participant, the Committee may, in its sole discretion, amend an outstanding
        Option Agreement from time to time in any manner that is not inconsistent
        with
        the provisions of the Plan (including, without limitation, an amendment that
        accelerates the time at which the Option, or a portion thereof, may be
        exercisable.)

       

        Option
        Price and Payment.
        The
        price at which a share of Common Stock may be purchased upon exercise of
        an
        Option shall be determined by the Committee but, subject to adjustment as
        provided in Paragraph IX, The exercise price for an option granted under
        the
        plan is determined by the committee but will be no less than the fair market
        value of the option, which will be based on the fair market value our common
        stock on the date the option is granted. Non-statutory option exercise price
        may
        be less than the fair market value of the common stock on the date of
        grant. The
        Option
        or portion thereof may be exercised by delivery of an irrevocable notice
        of
        exercise to the Company, as specified by the Committee. The purchase price
        of
        the Option or portion thereof shall be paid in full in the manner prescribed
        by
        the Committee. If permitted by applicable law, the Company may assist a
        Participant who has received an Option in the payment of such Option’s purchase
        price by lending the amount of some or all of such purchase price to such
        Participant on such terms and such rates of interest and upon such security
        (or
        unsecured) as shall have been authorized by or under authority of the Board.
        Separate stock certificates shall be issued by the Company for those shares
        acquired pursuant to the exercise of an Incentive Stock Option and for those
        shares acquired pursuant to the exercise of any Option that does not constitute
        an Incentive Stock Option. 

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

         

      

        Stockholder
        Rights and Privileges.
        The
        Participant shall be entitled to all the privileges and rights of a stockholder
        only with respect to such shares of Common Stock as have been purchased under
        the Option and for which certificates of stock have been registered in the
        Participant’s name.

       

        Options
        and Rights in Substitution for Options Granted by Other
        Employers.
        Options
        and Stock Appreciation Rights may be granted under the Plan from time to
        time in
        substitution for options held by individuals providing services to corporations
        or other entities who become employees, Consultants, or Directors as a result
        of
        a merger or consolidation or other business transaction with the Company
        or any
        Affiliate.

      
         

        RESTRICTED
          STOCK AWARDS

      

       

        Forfeiture
        Restrictions To Be Established by the Committee.
        Shares
        of Common Stock that are the subject of a Restricted Stock Award shall be
        subject to restrictions on disposition by the Participant and an obligation
        of
        the Participant to forfeit and surrender the shares to the Company under
        certain
        circumstances (the “Forfeiture Restrictions”). The Forfeiture Restrictions shall
        be determined by the Committee in its sole discretion, and the Committee
        may
        provide that the Forfeiture Restrictions shall lapse upon (i) the attainment
        of
        one or more performance targets established by the Committee, (ii) the
        Participant’s continued employment with the Company or an Affiliate or continued
        service as a Consultant or Director for a specified period of time, (iii)
        the
        occurrence of any event or the satisfaction of any other condition specified
        by
        the Committee in its sole discretion, or (iv) a combination of any of the
        foregoing. Each Restricted Stock Award may have different Forfeiture
        Restrictions, in the discretion of the Committee.

       

        Other
        Terms and Conditions.
        Common
        Stock awarded pursuant to a Restricted Stock Award shall be represented by
        a
        stock certificate registered in the name of the Participant. Unless provided
        otherwise in a Restricted Stock Agreement, the Participant shall have the
        right
        to receive dividends with respect to Common Stock subject to a Restricted
        Stock
        Award, to vote Common Stock subject thereto and to enjoy all other stockholder
        rights, except that (i) the Participant shall not be entitled to delivery
        of the
        stock certificate until the Forfeiture Restrictions have expired, (ii) the
        Company shall retain custody of the stock until the Forfeiture Restrictions
        have
        expired, (iii) the Participant may not sell, transfer, pledge, exchange,
        hypothecate or otherwise dispose of the stock until the Forfeiture Restrictions
        have expired, and (iv) a breach of the terms and conditions established by
        the
        Committee pursuant to the Restricted Stock Agreement shall cause a forfeiture
        of
        the Restricted Stock Award. At the time of such Award, the Committee may,
        in its
        sole discretion, prescribe additional terms, conditions or restrictions relating
        to Restricted Stock Awards, including, but not limited to, rules pertaining
        to
        the termination of employment or service as a Consultant or Director (by
        retirement, disability, death or otherwise) of a Participant prior to expiration
        of the Forfeitures Restrictions. Such additional terms, conditions or
        restrictions shall be set forth in a Restricted Stock Agreement made in
        conjunction with the Award.

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

       

        Payment
        for Restricted Stock.
        The
        Committee shall determine the amount and form of any payment for Common Stock
        received pursuant to a Restricted Stock Award, provided that in the absence
        of
        such a determination, a Participant shall not be required to make any payment
        for Common Stock received pursuant to a Restricted Stock Award, except to
        the
        extent otherwise required by law.

       

        Committee’s
        Discretion to Accelerate Vesting of Restricted Stock
        Awards.
        The
        Committee may, in its discretion and as of a date determined by the Committee,
        fully vest any or all Common Stock awarded to a Participant pursuant to a
        Restricted Stock Award and, upon such vesting, all restrictions applicable
        to
        such Restricted Stock Award shall terminate as of such date. Any action by
        the
        Committee pursuant to this Subparagraph may vary among individual Participants
        and may vary among the Restricted Stock Awards held by any individual
        Participant. 

       

        Restricted
        Stock Agreements.
        At the
        time any Award is made under this Paragraph VIII, the Company and the
        Participant shall enter into a Restricted Stock Agreement setting forth each
        of
        the matters contemplated hereby and such other matters as the Committee may
        determine to be appropriate. The terms and provisions of the respective
        Restricted Stock Agreements need not be identical. Subject
        to the consent of the Participant, the Committee may, in its sole discretion,
        amend an outstanding Restricted Stock Agreement from time to time in any
        manner
        that is not inconsistent with the provisions of the Plan.

      
         

        RECAPITALIZATION
          OR REORGANIZATION

      

       

        No
        Effect on Right or Power.
        The
        existence of the Plan and the Awards granted hereunder shall not affect in
        any
        way the right or power of the Board or the stockholders of the Company to
        make
        or authorize any adjustment, recapitalization, reorganization or other change
        in
        the Company’s or any Affiliate’s capital structure or its business, any merger
        or consolidation of the Company or any Affiliate, any issue of debt or equity
        securities ahead of or affecting Common Stock or the rights thereof, the
        dissolution or liquidation of the Company or any Affiliate or any sale, lease,
        exchange or other disposition of all or any part of its assets or business
        or
        any other corporate act or proceeding.

       

        Subdivision
        or Consolidation of Shares; Stock Dividends.
        The
        shares with respect to which Options may be granted are shares of Common
        Stock
        as presently constituted, but if, and whenever, prior to the expiration of
        an
        Option theretofore granted, the Company shall effect a subdivision or
        consolidation of shares of Common Stock or the payment of a stock dividend
        on
        Common Stock without receipt of consideration by the Company, the number
        of
        shares of Common Stock with respect to which such Option may thereafter be
        exercised (i) in the event of an increase in the number of outstanding shares
        shall be proportionately increased, and the purchase price per share shall
        be
        proportionately reduced, and (ii) in the event of a reduction in the number
        of
        outstanding shares shall be proportionately reduced, and the purchase price
        per
        share shall be proportionately increased. Any fractional share resulting
        from
        such adjustment shall be rounded up to the next whole share.

       

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

       

        Recapitalizations
        and Corporate Changes.
        If the
        Company recapitalizes, reclassifies its capital stock, or otherwise changes
        its
        capital structure (a “recapitalization”), the number and class of shares of
        Common Stock covered by an Option theretofore granted shall be adjusted so
        that
        such Option shall thereafter cover the number and class of shares of stock
        and
        securities to which the Participant would have been entitled pursuant to
        the
        terms of the recapitalization if, immediately prior to the recapitalization,
        the
        Participant had been the holder of record of the number of shares of Common
        Stock then covered by such Option. If (i) the Company shall not be the surviving
        entity in any merger or consolidation (or survives only as a subsidiary of
        an
        entity), (ii) the Company sells, leases or exchanges or agrees to sell, lease
        or
        exchange all or substantially all of its assets to any other person or entity,
        (iii) the Company is to be dissolved and liquidated, (iv) any person or entity,
        including a “group” as contemplated by Section 13(d)(3) of the Securities
        Exchange Act of 1934, as amended, acquires or gains ownership or control
        (including, without limitation, power to vote) of more than 50% of the
        outstanding shares of the Company’s voting stock (based upon voting power), or
        (v) as a result of or in connection with a contested election of Directors,
        the
        persons who were Directors of the Company before such election shall cease
        to
        constitute a majority of the Board (each such event is referred to herein
        as a
“Corporate Change”), no later than (x) 10 days after the approval by the
        stockholders of the Company of such merger, consolidation, reorganization,
        sale,
        lease or exchange of assets or dissolution or such election of Directors
        or (y)
        30 days after a Corporate Change of the type described in clause (iv), the
        Committee, acting in its sole discretion without the consent or approval
        of any
        Participant, shall effect one or more of the following alternatives, which
        alternatives may vary among individual Participants and which may vary among
        Options held by any individual Participant: (1) accelerate the time at which
        Options then outstanding may be exercised so that such Options may be exercised
        in full for a limited period of time on or before a specified date (before
        or
        after such Corporate Change) fixed by the Committee, after which specified
        date
        all unexercised Options and all rights of Participants thereunder shall
        terminate, (2) require the mandatory surrender to the Company by selected
        Participants of some or all of the outstanding Options held by such Participants
        (irrespective of whether such Options are then exercisable under the provisions
        of the Plan) as of a date, before or after such Corporate Change, specified
        by
        the Committee, in which event the Committee shall thereupon cancel such Options
        and cause the Company to pay to each Participant an amount of cash per share
        equal to the excess, if any, of the amount calculated in Subparagraph (d)
        below
        (the “Change of Control Value”) of the shares subject to such Option over the
        exercise price(s) under such Options for such shares, or (3) make such
        adjustments to Options then outstanding as the Committee deems appropriate
        to
        reflect such Corporate Change (provided, however, that the Committee may
        determine in its sole discretion that no adjustment is necessary to Options
        then
        outstanding), including, without limitation, adjusting an Option to provide
        that
        the number and class of shares of Common Stock covered by such Option shall
        be
        adjusted so that such Option shall thereafter cover securities of the surviving
        or acquiring corporation or other property (including, without limitation,
        cash)
        as determined by the Committee in its sole discretion.

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

       

        Change
        of Control Value.
        For the
        purposes of clause (2) in Subparagraph (c) above, the “Change of Control Value”
shall equal the amount determined in clause (i), (ii) or (iii), whichever
        is
        applicable, as follows: (i) the per share price offered to stockholders of
        the
        Company in any such merger, consolidation, sale of assets or dissolution
        transaction, (ii) the per share price offered to stockholders of the Company
        in
        any tender offer or exchange offer whereby a Corporate Change takes place,
        or
        (iii) if such Corporate Change occurs other than pursuant to a tender or
        exchange offer, the fair market value per share of the shares into which
        such
        Options being surrendered are exercisable, as determined by the Committee
        as of
        the date determined by the Committee to be the date of cancellation and
        surrender of such Options. In the event that the consideration offered to
        stockholders of the Company in any transaction described in this Subparagraph
        (d) or Subparagraph (c) above consists of anything other than cash, the
        Committee shall determine the fair cash equivalent of the portion of the
        consideration offered which is other than cash.

       

        Other
        Changes in the Common Stock.
        In the
        event of changes in the outstanding Common Stock by reason of recapitalizations,
        reorganizations, mergers, consolidations, combinations, split-ups, split-offs,
        spin-offs, exchanges or other relevant changes in capitalization or
        distributions to the holders of Common Stock occurring after the date of
        the
        grant of any Award and not otherwise provided for by this Paragraph IX, such
        Award and any agreement evidencing such Award shall be subject to adjustment
        by
        the Committee at its discretion as to the number and price of shares of Common
        Stock or other consideration subject to such Award. In the event of any such
        change in the outstanding Common Stock or distribution to the holders of
        Common
        Stock, or upon the occurrence of any other event described in this Paragraph
        IX,
        the aggregate number of shares available under the Plan shall be appropriately
        adjusted to the extent, if any, determined by the Committee, whose determination
        shall be conclusive.

       

        Stockholder
        Action.
        Any
        adjustment provided for in the above Subparagraphs shall be subject to any
        required stockholder action.

       

        No
        Adjustments unless Otherwise Provided.
        Except
        as hereinbefore expressly provided, the issuance by the Company of shares
        of
        stock of any class or securities convertible into shares of stock of any
        class,
        for cash, property, labor or services, upon direct sale, upon the exercise
        of
        rights or warrants to subscribe therefor, or upon conversion of shares or
        obligations of the Company convertible into such shares or other securities,
        and
        in any case whether or not for fair value, shall not affect, and no adjustment
        by reason thereof shall be made with respect to, the number of shares of
        Common
        Stock subject to Awards theretofore granted or the purchase price per share,
        if
        applicable.

      
         

        AMENDMENT
          AND TERMINATION OF THE PLAN

      

       

      The
        Board
        in its discretion may terminate the Plan at any time with respect to any
        shares
        of Common Stock for which Awards have not theretofore been granted. The Board
        shall have the right to alter or amend the Plan or any part thereof from
        time to
        time; provided that no change in the Plan may be made that would impair the
        rights of a Participant with respect to an Award theretofore granted without
        the
        consent of the Participant, and provided, further, that the Board may not,
        without approval of the stockholders of the Company, amend the Plan to (a)
        increase the maximum aggregate number of shares that may be issued under
        the
        Plan or (b) change the class of individuals eligible to receive Awards under
        the
        Plan. 

      
         

        
          
             

          

          
            9

            
              

            

          

          
             

          

        

         

        MISCELLANEOUS

      

       

        No
        Right To An Award.
        Neither
        the adoption of the Plan nor any action of the Board or of the Committee
        shall
        be deemed to give an employee, Consultant, or Director any right to be granted
        an Option, a right to a Restricted Stock Award, or any other rights hereunder
        except as may be evidenced by an Option Agreement or a Restricted Stock
        Agreement duly executed on behalf of the Company, and then only to the extent
        and on the terms and conditions expressly set forth therein. The Plan shall
        be
        unfunded. The Company shall not be required to establish any special or separate
        fund or to make any other segregation of funds or assets to assure the
        performance of its obligations under any Award.

       

        No
        Employment/Membership Rights Conferred.
        Nothing
        contained in the Plan shall (i) confer upon any employee or Consultant any
        right
        with respect to continuation of employment or of a consulting or advisory
        relationship with the Company or any Affiliate or (ii) interfere in any way
        with
        the right of the Company or any Affiliate to terminate his or her employment
        or
        consulting or advisory relationship at any time. Nothing contained in the
        Plan
        shall confer upon any Director any right with respect to continuation of
        membership on the Board. 

       

        Other
        Laws; Withholding.
        The
        Company shall not be obligated to issue any Common Stock pursuant to any
        Award
        granted under the Plan at any time when the shares covered by such Award
        have
        not been registered under the Securities Act of 1933, as amended, and such
        other
        state and federal laws, rules and regulations as the Company or the Committee
        deems applicable and, in the opinion of legal counsel for the Company, there
        is
        no exemption from the registration requirements of such laws, rules and
        regulations available for the issuance and sale of such shares. No fractional
        shares of Common Stock shall be delivered, nor shall any cash in lieu of
        fractional shares be paid. The Company shall have the right to deduct in
        connection with all Awards any taxes required by law to be withheld and to
        require any payments required to enable it to satisfy its withholding
        obligations.

       

        No
        Restriction on Corporate Action.
        Nothing
        contained in the Plan shall be construed to prevent the Company or any Affiliate
        from taking any action which is deemed by the Company or such Affiliate to
        be
        appropriate or in its best interest, whether or not such action would have
        an
        adverse effect on the Plan or any Award made under the Plan. No Participant,
        beneficiary or other person shall have any claim against the Company or any
        Affiliate as a result of any such action.

       

        Restrictions
        on Transfer.
        An Award
        (other than an Incentive Stock Option, which shall be subject to the transfer
        restrictions set forth in Paragraph VII(c) shall be transferable freely
        transferable on the date of issuance.

       

        Governing
        Law.
        The
        Plan shall be governed by, and construed in accordance with, the laws of
        the
        State of Nevada, without regard to conflicts of law principles
        thereof.

       

      10

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