Document:

Exhibit
      10.1

    

    INTERNATIONAL
      DAYWORK DRILLING CONTRACT – LAND 

    

    THIS
      INTERNATIONAL DAYWORK DRILLING CONTRACT-LAND (hereinafter called the
“Contract”), dated the 12th day of September, 2008 is made between Zion Oil
& Gas Inc. a corporation organized under the laws of State of Delaware USA
      having offices at 6510 Abrams Road, Suite 300 Dallas, Texas 75231 USA and 15
      Bareket St. North Industrial Park Caesarea, 38900, Israel (hereinafter called
      “Operator”), and Aladdin Middle East Ltd. a corporation organized under the laws
      of State of Delaware USA with the offices at 123 South Market, Wichita Kansas
      67202 USA and at Sogutozu Caddesi No: 23 Balgat 06520 Ankara, Turkey
      (hereinafter called “Contractor). Each of Operator and Contractor shall
      hereinafter be individually referred to as a “Party” and collectively as the
“Parties”. 

    

    WHEREAS,
      Operator desires to have wells drilled on land in the Operating Area, as defined
      below, and to have performed or carried out all auxiliary operations and
      services as detailed in the Appendices hereto or as Operator require;
      and

    

    WHEREAS,
      Contractor is willing to furnish a 3 DH F 320 drilling rig (hereinafter called
      the “Drilling Rig“), personnel and other equipment, insurances all as detailed
      in the Appendices hereto for the purpose of drilling the said wells and
      performing the said auxiliary operations and services for Operator.

    

    NOW
      THEREFORE THIS CONTRACT WITNESSETH that in consideration of the covenants herein
      agreed as follows:

    

    ARTICLE
      – 1 INTERPRETATION

    

    101.
      Definitions

    

    In
      this
      Contract, unless the context otherwise requires;

    

    
      	 	
              (a)

            	
              “Commencement
                Date” means
                the point in the time that the Drilling Rig is rigged up, passed
                the rig
                acceptance test detailed in the Appendices and ready, to drill the
                rat
                hole and mouse hole in the Operating Area;

            

    

    

    
      	 	
              (b)

            	
              “Operator’s
                Items” mean
                the equipment, material and services which are listed in the Appendices
                that are to be provided by or at expense of
                Operator;

            

    

    

    
      	 	
              (c)

            	
              “Contractor’s
                Items” mean
                the equipment, material and services which are listed in the Appendices
                that are to be provided by or at expense of
                Contractor;

            

    

    

    
      	 	
              (d)

            	
              “Contractor’s
                Personnel” mean
                the personnel as listed in the Appendices that are to be provided
                by
                Contractor from time to time to conduct operations hereunder as listed
                in
                the Appendices;

            

    

    

    
      	 	
              (e)

            	
              “Country
                of Operations” means
                the State of Israel.

            

    

     

    
      	 	
              (f)

            	
              “Operating
                Area” means
                those areas of land in the Country of Operations where Operator may
                from
                time to time be entitled to conduct drilling
                operations;

            

    

     

    INTERNATIONAL
      DAYWORK DRILLING CONTRACT – LAND

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (g)

            	
              “Affiliated
                Company” means
                a company owning 50% or more of the stock of Operator or Contractor,
                a
                company in which Operator or Contractor owns 50% or more of its stock,
                or
                a company 50% or more of whose stock is owned by the same company
                that
                owns 50% or more of the stock of Operator or
                Contractor;

            

    

    

    
      	 	
              (h)

            	
              “Operations
                Base” means
                the place or places designated as such by Operator from time to time,
                in
                the Country of Operations. 

            

    

    

    
      	 	
              (i)

            	
              “Transportation”:
                means
                the loading, unloading, trucking, safety vehicle, permits, insurance
                and
                other expenses normally associated with moving heavy
                equipment

            

    

    

    102.
      Currency

    

    In
      this
      Contract, all amounts expressed in dollars are United States dollar
      amounts.
      

    

     103.
      Conflicts

    

    The
      Appendices hereto are incorporated herein by reference. If any provision of
      the
      Appendices conflicts with a provision in the body hereof, the latter shall
      prevail.

    

    104.
      Headings

    

    The
      paragraph headings shall not be considered in interpreting the text of this
      Contract.

    

    105.
      Further Assurances

    

    Each
      Party shall perform the acts and execute and deliver the documents and give
      the
      assurances necessary to give effect to the provisions of this
      Contract.

    

    106.
      Contractor’s Status

    

    Contractor,
      in performing its obligations hereunder, shall be an independent contractor.
      

    

    107.
      Governing Law

    

    This
      Contract shall be construed and the relations between the Parties determined
      in
      accordance with the substantive laws of England, not including, however, any
      of
      its conflicts of law rules which would direct or refer to the laws of another
      jurisdiction. In the event any provision of the Contract is inconsistent with
      or
      contrary to any applicable law, rule or regulation, said provision shall be
      deemed to be modified to the extent required to comply with said laws, rule
      or
      regulation, and as so modified said provision and this Contract shall continue
      in full force and effect. 

     

    INTERNATIONAL
      DAYWORK DRILLING CONTRACT – LAND

    
      
        
        

      

      
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    ARTICLE
      II – TERM

    

    201.
      Effective Date and Duration

     

    This
      Contract shall enter into effect upon execution by the Parties, subject to
      the
      terms and conditions written in the Protocol made by and between Operator and
      Contractor, dated June 18, 2008 and Amendment to Protocol made by and between
      Operator and Contractor dated July 31, 2008 (hereinafter referred to as the
      “Protocol”); and shall remain in full force and effect until the completion of
      the services by Contractor and payment of rates specified in this Contract
      to
      Contractor by Operator, as per the Contract, for a period of drilling of at
      least 1 (one) exploration well of 4500 meter nominal depth or additional 1
      (one)
      well to be mutually agreed by and between the Parties in writing, unless
      terminated in accordance with Article 202 below.  

    

    202.
      Termination 

    

    Without
      derogating from the Parties' rights under law, this Contract may be terminated
      as follows;

    

    
      	 	
              (a)

            	
              In
                case the Contractor can not mobilize the Drilling Rig by June 30th
                2009 at
                latest, Operator shall have the right to terminate Contract, without
                any
                prejudice to the accrued rights of the Parties prior to such termination.
                However, Parties can delay the deadline specified herein above for
                4
                (four) additional months by a mutual written agreement.
                

            

    

    

    
      	 	
              (b)

            	
              Operator
                shall have right to terminate this Contract until October 15th,
                2008 and no additional payments shall be due to Contractor other
                than
                already paid sums as per this
                Contract.

            

    

    

    
      	 	
              (c)

            	
              Provided
                that if the Contract is terminated on or after October 15th,
                2008 by a written notice from Operator to Contractor, prior to the
                commencement of the mobilization, Operator shall pay Contractor,
                as
                liquidated damages and not as a penalty the sum of USD 1.225.000
                (one
                million two hundred and twenty five thousand) less any payments made
                by
                Operator until such termination as per this
                Contract.

            

    

     

    
      	 	
              (d)

            	
              Immediately
                if the Drilling Rig becomes an actual or constructive total loss.
                In this
                case, termination shall be without any prejudice to the accrued rights
                of
                Contractor arising out of this Contract. 

            

    

    

    
      	 	
              (e)

            	
              In
                accordance with the terms of the
                Protocol.

            

    

    

    For
      greater certainty it is hereby agreed that each of the above subsections (a
      - e)
      are independent and that if the Agreement is terminated under one of these
      subsections then the remainder of the subsections shall not apply.

     

    INTERNATIONAL
      DAYWORK DRILLING CONTRACT – LAND

    
      
        
        

      

      
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    203.
      Continuing Obligations

    

    Notwithstanding
      the termination of this Contract, the Parties shall continue to be bound by
      the
      provisions of this Contract that reasonably require some action or forbearance
      after the cessation of the day rates provided for hereafter.

    

    204.
      Return of Operator’s Items

    

    Upon
      termination of this Contract, Contractor shall return to Operator any of
      Operator’s Items which are at the time in Contractor’s possession.

    

    ARTICLE
      III – CONTRACTOR’S PERSONNEL

    

    301.
      Number, Selection, Hours of Labor and Remuneration

    

    Except
      where herein otherwise provided, the selection, replacement, hours of labor
      and
      remuneration of Contractor’s Personnel shall be solely determined by Contractor.
      Such employees shall be the employees solely of Contractor. Contractor
      represents that its personnel will be competent and efficient.

    

    302.
      Providing Personnel

    

    Contractor
      shall have its personnel available at the proper drilling location or at a
      mutually agreed place ready to conduct operations. Both Parties shall work
      together to obtain all visas, work permits and all other government
      authorization or documentation required in connection with the entry to,
      presence at and/or exit of Contractor’s Personnel from the Country of
      Operations, provided that Operator shall bear all expenses to third parties
      related thereof in the Country of Operations and Contractor shall bear expenses
      to third parties related thereof outside the Country of Operations, and
      Contractor shall be solely responsible for and shall meet all costs incurred
      in
      connection with the employment in Turkey and administration of its Personnel
      and
      all other matters relating thereto. Contractor can not be held responsible
      for
      any delay of receiving the work permits after submitting the required documents
      to the Operator, if such documents are submitted in a timely manner. It is
      understood that the Drilling Rig will not be mobilized until the work permits
      are in place.

    

    303.
      Contractor’s Representative

    

    Contractor
      shall nominate one of its personnel as Contractor’s Representative who shall be
      in charge of the remainder of Contractor’s Personnel and who shall have full
      authority to resolve all day-to-day matters, which arise between Operator and
      Contractor. All communications between the Parties concerning this Contract
      shall be in English and Contractor’s Representative shall be fully conversant
      with the English language so as to enable Operator’s Designated Representative
      to issue instructions and to receive verbal and written reports in
      English

    

    304.
      Increase in Contractor’s Personnel

    

    Operator
      may, at any time, request to increase the number of Contractor’s Personnel and,
      subject to the Contractor’s approval of such request and providing additional
      Personnel, the day rates provided herein shall be adjusted
      accordingly.

     

    INTERNATIONAL
      DAYWORK DRILLING CONTRACT – LAND

    
      
        
        

      

      
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    305.
      Replacement of Contractor’s Personnel

    

    Contractor
      shall remove and replace in reasonable time any of Contractor’s Personnel if
      Operator so requests in writing provided that Operator submits reasonable
      grounds for its requirement.

    

    ARTICLE
      IV – CONTRACTOR’S ITEMS

    

    401.
      Obligation to Supply

    

    Contractor
      shall provide Contractor’s Items and Personnel and perform the services to be
      provided or performed by it in accordance with the Appendices hereto and at
      all
      times in a professional manner. Operator shall move or pay the cost of moving
      Contractor’s spare parts if it becomes necessary to shift the site of these
      items from one location to another in the Country of Operations during the
      term
      of this Contract.

    

    402.
      Maintain Stocks

    

    Contractor
      shall be responsible, at its cost, for maintaining adequate stock levels of
      Contractor’s Items and replenishing as necessary.

    

    403.
      Maintain and Repair Equipment

    

    Contractor
      shall, subject to clause 1001, be responsible for the maintenance and repair
      of
      all Contractor’s Items and will provide all spare parts and materials required
      therefore, Contractor shall, if requested by Operator in writing, also maintain
      or repair, at its cost, any of Operator’s Items which Contractor is qualified to
      and can maintain or repair with Contractor’s normal complement of personnel and
      equipment; provided, however, that Operator shall at its cost provide all spare
      parts and materials required to maintain or repair Operator’s Items and basic
      responsibility and liability for furnishing and maintaining such items shall
      remain with Operator, and Operator shall release, indemnify, defend and hold
      harmless the Contractor from and against any and all liability, expense
      including defense costs and legal fees, and claims for damages of any nature
      whatsoever related thereof other than those related to Contractor's, wilful
      intent or bad faith. 

    

    404.
      Damage and loss of Contractor’s downhole equipment

    

    Operator
      shall assume liability at all times for damage to or destruction of Contractor’s
      downhole equipment, unless such damage is the result of Contractor’s negligence
      or wilful misconduct, including, but not limited to, drill pipe, drill collars
      and tool joints. If Contractor’s downhole equipment is damaged or lost in the
      well below the rotary table, the Operator shall reimburse to the Contractor
      for
      the lesser of: 

     

    -
      The
      cost of repair of such equipment either owned by Contractor or by third parties,
      or

     

    -
      The
      replacement value of such lost or damaged equipment as shown in Appendix A
      Part
      IV

     

    INTERNATIONAL
      DAYWORK DRILLING CONTRACT – LAND

    
      
        
        

      

      
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    All
      costs
      relating to repair and/or replacement of Contractor’s downhole equipment which
      are damaged or lost, including but not limited to inspection, testing, repair,
      replacement shall be paid by the Operator to the Contractor at cost plus 15
      (fifteen) percent, and the time beginning from the occurrence of such loss
      elapsing until restart of drilling shall be paid on the basis of the Standby
      Rate. 

    

    ARTICLE
      V – CONTRACTOR’S GENERAL OBLIGATIONS

     

    501.
      Performance of the Drilling Rig

    

    Contractor
      represents that the Drilling Rig is capable of drilling to a depth of 20.000
      (Twenty Thousand) feet. Any drill pipe in excess of that furnished by Contractor
      shall be supplied by Operator at Operator’s cost.

    

    502.
      Contractor’s Standard of Performance

    

    Contractor
      shall carry out all operations hereunder on a daywork basis. For purposes hereof
      the term “daywork basis” means Contractor shall furnish equipment, labor, and
      perform services as herein provided, for a specified sum per day under the
      direction, supervision and control of Operator (the term of which is deemed
      to
      include any employee, agent, consultant or subcontractor engaged by Operator
      to
      direct drilling operations). When operating on a daywork basis, Contractor
      shall
      be fully paid at the applicable rates of payment and assumes only the
      obligations and liabilities stated herein. Except for such obligations and
      liabilities specifically assumed by Contractor, Operator shall be solely
      responsible and assumes liability for all consequences of operations by both
      Parties while on a daywork basis, including results and all other risks or
      liabilities incurred in or incident to such operations, and Operator shall
      release, indemnify, defend and hold harmless the Contractor from and against
      any
      and all liability, expense including defense costs and legal fees, and claims
      for damages of any nature whatsoever related thereof other then those related
      to
      Contractor's wilful intent or bad faith. 
      Contractor shall be informed regarding all current laws and regulations covering
      Contactor’s operation of the Drilling Rig in the Country of Operations before
      the mobilization of the Drilling Rig to the Country of Operations and Contractor
      will comply with such laws and regulations. Operator shall not be liable for
      all
      consequences of operations related
      to Contractor's wilful intent or bad faith.

    

    503.
      Operation of the Drilling Rig

    

    Contractor
      shall be solely responsible for the operation of the Drilling Rig, including,
      without limitation, supervising the moving operations, and positioning the
      Drilling Rig and camp at location as required by Operator, as well as such
      operations at the drilling location as may be necessary or desirable for the
      safety of the Drilling Rig. Operations under this Contract will be performed
      on
      a 24-hour per day basis. 

     

    INTERNATIONAL
      DAYWORK DRILLING CONTRACT – LAND

    
      
        
        

      

      
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    504.
      Compliance with Operator’s Instructions

     

    Contractor
      shall comply with all instructions of Operator consistent with the provisions
      of
      the Contract including, without limitation, drilling, well control and safety
      instructions. Such instructions shall, if Contractor so requires, be confirmed
      in writing by the authorized representative of the Operator. In such case,
      until
      receiving written instructions from the Operator to the Contractor, the Standby
      Rate shall be applied However, Operator shall not issue any instructions which
      would be inconsistent with Contractor’s rules, policies or procedures pertaining
      to safety of its personnel, equipment or the Drilling Rig, and current laws
      and
      regulations. Contractor shall have the right to stop or suspend the work in
      case
      Contractor evaluates the instructions of the Operator to be outside of the
      scope
      of this Contract or to cause damage or loss of Contractor’s Items excluding
      downhole equipment or Contractors personnel or inconsistent with the laws and
      regulations of the County of Operations. However, it is recognized that Operator
      has superior knowledge of the laws and regulations of the Country of Operations
      and Operator is responsible to issue verbal or written instructions consistent
      with the said laws and regulations. 

    

    505.
      Mud and Casing Program

    

    Contractor
      shall take all reasonable care to follow the mud and casing program as specified
      by Operator. Operator shall provide Contractor with these programs reasonably
      in
      advance of Commencement Date of
      each
      well to be drilled hereunder. 

    

    506.
      Cutting/Coring Program

    

    Upon
      Operator’s request, Contractor
      shall save and identify cutting and cores in accordance with the Operator’s
      instructions and shall place them in containers furnished by Operator at
      Operator’s sole cost and expense on a cost plus 15% basis. 

    

    507.
      Records to be kept by Contractor

     

    Contractor
      shall keep and furnish Operator with an accurate record of the work performed
      and formations drilled on the IADC-API Daily Drilling Report Form or other
      form
      acceptable to Operator. A legible copy of the said form signed by Contractor’s
      Representative shall be furnished by Contractor to Operator.

    

    508.
      Difficulties during Drilling

    

    In
      the
      event of any difficulty arising which precludes either drilling ahead under
      reasonably normal procedures or the performance of any other operations planned
      for a well, Contractor may suspend the work in progress and shall immediately
      notify the Representative of Operator, in the meantime exerting reasonable
      effort to overcome the difficulty.

    

    509.
      Safety Equipment

    

    Contractor
      shall maintain its well control equipment listed in the Appendices in good
      condition at all times and shall use all reasonable means to control and prevent
      fires and blowouts and to protect the hole.

     

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      DAYWORK DRILLING CONTRACT – LAND

    
      
        
        

      

      
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    ARTICLE
      VI – OPERATOR’S OBLIGATIONS

    

    601.
      Equipment and Personnel

    

    Operator
      shall, at its cost, provide Operator’s Items and Personnel and perform the
      services to be provided or performed by it in accordance with the Appendices.
      In
      addition to providing the initial supply of Operator’s Items, Operator shall be
      responsible, at its cost, for maintaining adequate stock levels and replenishing
      as necessary of such items. When, subject to Contractor’s acceptance upon
      Operator’s written request, the Contractor furnishes or subcontracts for certain
      items which Operator is required herein to provide, for purposes of the Contract
      said items or services shall be deemed to be Operator furnished items or
      services, any subcontractors so hired shall be deemed to be Operator’s
      subcontractor, and Operator shall not be relieved of any of its liabilities
      in
      connection therewith; for furnishing said items and services Operator will
      reimburse Contractor its entire cost plus 15% (fifteen percent) for handling.
      and Operator shall release, indemnify, defend and hold harmless the Contractor
      from and against any and all liability, expense including defense costs and
      legal fees, and claims for damages of any nature whatsoever related thereof
      other than those related to Contractor's wilful intent or bad faith.

     

    602.
      Maintenance and Repair

    

    Operator
      shall be responsible, at its cost, for the maintenance and repair of all
      Operator’s Items which Contractor is not qualified to or cannot maintain or
      repair with Contractor’s normal complement of personnel and the
      equipment.

    

    603.
      Operator’s Personnel

    

    Operator
      shall ensure that Operator’s Personnel shall be competent and efficient and
      Contractor may treat Operator’s Representative for time being as being in charge
      of all Operator’s Personnel.

    

    604.
      Replacement of Operator’s Personnel

    

    Contractor
      shall have the right to request in writing Operator to remove and replace any
      of
      Operator’s Personnel provided that Contractor can show reasonable grounds for
      such request.

    

    605.
      Operator’s Representative

    

    Operator
      may, from time to time, designate a representative(s) for the purposes of this
      Contract who shall at all times have access to the Drilling Rig and may, among
      other things, observe tests, check and control the implementation of the mud
      program, examine cuttings and cores, inspect the work performed by Contractor
      or
      examine records kept on the Drilling Rig by Contractor.

     

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    606.
      Customs or Excise Duties

    

    Operator
      shall obtain and pay all import and export charges or customs or excise duties
      including, without limitation, local sales taxes, value added taxes, clearing
      agent’s fees, or other similar taxes or fees that are levied on Contractor’s
      and/or Operator’s Items, and Operator shall release, indemnify, defend and hold
      harmless the Contractor from and against any and all liabilities, all expenses
      including defense costs and legal fees, and claims for damages of any nature
      whatsoever related thereof other than those related to Contractor's wilful
      intent or bad faith.. 

    

    607.
      Drilling Location and Access [THE OPERATING AREA(S) ARE THE LICENSE(S) HELD
      BY
      OPERATOR]

    

    Operator
      shall provide Contractor with access to the drilling location as well as any
      drilling permits, licenses or certificates needed to conduct operations
      hereunder. The drilling location so provided shall be surveyed and marked by
      Operator and shall be free of obstructions. Operator also shall prepare sound
      locations capable of properly supporting the Drilling Rig, and shall be
      responsible for a conductor pipe program adequate to prevent soil and subsoil
      washout. It is recognized that Operator has superior knowledge of the location
      and access routes to the location, and shall advise Contractor of any subsurface
      conditions, or obstructions which Contractor might encounter while enroute
      to
      the drilling location or during operation hereunder. In the event subsurface
      conditions cause a cratering or shifting of the drilling location surface and
      loss or damage to the Drilling Rig or its associated equipment results
      therefrom, Operator shall, without regard to the other provisions of this
      Contract, including paragraph 1001 hereof, reimburse Contractor to the extent
      not covered by Contractor’s insurance, for such loss or damage including payment
      of Force Majeure Rate during repair.

    

    608.
      Taxes

    

    Contractor
      agrees to prepare and timely file all required income or other tax returns
      or
      declarations required by the government of the area where the Drilling Rig
      operates. Upon notification by the Contractor of the amount or amounts of such
      taxes paid by it which pertain to the performance by Contractor under this
      Contract, accompanied by copies of each such return or declaration, Operator
      hereby agrees to reimburse Contractor such amount or amounts less any interest
      or penalties arising from the fault of Contractor and levied by any of the
      aforementioned governmental bodies. Contractor shall consult with Operator
      before filling any such tax returns or paying the applicable taxes.

    

    Operator
      will provide utmost amount of assistance to Contractor in fulfilling any
      taxation issue in the Country of Operations. 

    

    609.
      Bank Letter of Credit

    

    On
      or
      after October 31, 2008, Operator will provide a bank Letter of Credit to the
      Contractor within 10 days following the date of Contractor’s written
      notification to Operator of for the commencement of mobilization from the
      Drilling Rig’s current location in Turkey to the exportation port in Turkey for
US$
      675,000
      (Six
      Hundred
      and Seventy Five Thousand United States Dollars). Contractor shall return the
      bank letters of credit upon receiving all payments hereunder including but
      not
      limited to the Operating, Stand By, Force Majeure rates Mobilization,
      Demobilization, Transportation fees, Lost In Hole charges arising out of this
      Contract. The Letter of Credit shall be acceptable to Citibank and be
      irrevocable. 

     

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    ARTICLE
      VII – OPERATOR’S INSTRUCTIONS

    

    701.
      Instructions to Contractor

    

    Operator
      may, from time to time, through its authorized representative or
      representatives, issue written or oral instructions to Contractor covering
      operations hereunder. Operator’s instructions may be general or may deal with
      specific matters relating to operations hereunder including, without limitation,
      instructions to stop operations, as to safety and well control, and drilling
      instructions, but Operator shall have no right to require Contractor to drill
      deeper than 20,000 feet unless Contractor agrees in writing. 

    

    ARTICLE
      VIII – RATES OF PAYMENT

    

    801.
      Payment

    

    Operator
      shall pay the Contractor the amounts from time to time due calculated according
      to the rates of payment herein set forth, in accordance with the terms and
      provisions of this Contract. No other payment shall be due from Operator unless
      specifically provided for in this Contract, or agreed to in writing by
      Operator.

    

    802.
      Mobilization Fee

    

    For
      mobilizing Drilling Rig, Contractor’s Items and Personnel including all
      shipping, trucking, airfreight, dock expenses, customs agent fees in Turkey
      and
      other charges, a fee of US$ 675.000 (Six Hundred and Seventy Five Thousand
      United States dollars-hereinafter referred to as the “Mobilization Fee”) shall
      be paid to Contractor. The mobilization shall be deemed to be completed when
      the
      Drilling Rig, and Contractor’s Items have been delivered to the customs of
      Country of Operations at Haifa Port, and payment of the Mobilization Fee shall
      be as follows: 

    

    
      	
            	(a)	
              USD
                175.000 (one
                hundred seventy five thousand) out of the Mobilization Fee has been
                paid as per the Protocol; 

            

    

    

    
      	
            	(b)	
              $300,000,
                shall be paid upon execution of this Contract and upon receipt of
                the
                related invoice, by Operator; 

            

    

    

    
      	
            	(c)	
              $200,000
                shall be paid upon delivery of the Drilling Rig to the customs of
                Country
                of Operations and upon receipt of the related invoice by Operator.
                i

            

    

    

    
      	
            	(d)	
              The
                Transportation of the Drilling Rig from Haifa Port to Operator’s first
                well location in Israel shall be invoiced to Operator by Contractor
                on a
                cost plus 15% Handling Fee basis.

            

    

     

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    803.
      Demobilization Fee

    

    Operator
      shall pay Contractor a Demobilization Fee of US$ 675.000 (Six-Hundred and
      Seventy-Five Thousand United States dollars) except that no Demobilization
      Fee
      shall be due if this Contract is terminated pursuant to Clause 202 (b) hereof.
      

    

    The
      demobilization shall be deemed to be completed when the Drilling Rig, and
      Contractor’s Items have been delivered to the customs of Country of Operations
      at Haifa Port.

    

    a)
      75% of
      the Demobilization Fee shall be paid upon the Rig Release Date (the time and
      date when the operations on the final well are complete and the drill string
      is
      laid out in its entirety from the derrick. Date and time of release is to be
      noted in the IADC tour report, as the official Rig Release Date of this
      Contract, and

    signed
      off by both Operator and Contractor designated representatives) of the last
      well
      and upon receipt of the related invoice, 

    

    b)
      25% of
      the Demobilization Fee shall be paid upon delivery of the Drilling Rig to the
      customs of Country of Operations and upon receipt of the related
      invoice.

    

    The
      Transportation of the Drilling Rig from Operator’s last well location in the
      Country of Operations to Haifa Port shall be invoiced separately to Operator
      by
      Contractor on a cost plus 15% Handling Fee basis. 75% of the estimated cost
      of
      the Transportation shall be paid on the Rig Release Date as advance for the
      Transportation and the remaining balance shall be invoiced upon completion
      of
      the Transportation from the last well location to the Country of Operations’
Haifa Port.

    

    In
      case
      of execution of a drilling contract with another operator in the Country of
      Operations after the last well of Operator within the scope of this Contract,
      Contractor shall reimburse the Demobilization Fee to Operator, provided that
      any
      sum is received by the Contractor further to such drilling contract.

     

    804.
      Operating Rate

    

    The
      “Operating Rate” will be US$ 28,500 (Twenty-Eight Thousand and Five Hundred) per
      24-hour day and will first be paid on the Commencement Date, pro-rated to the
      nearest hour. The Operating Rate shall continue to be paid except as herein
      otherwise provided.

    

    Operating
      rate will be applicable during rigging up and down of equipment for electric
      logging and any wire line operations.

    

    805.
      Standby Rate

    

    The
      “Standby with Crew Rate” will be 90% of the Operating Rate per 24-hour day and
      will be paid;

    

    
      	 	
              (a)

            	
              During
                production testing of a well, excluding running and pulling of
                tubulars.

            

    

     

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              (b)

            	
              During
                any period of delay when Contractor is unable to proceed because
                of an act
                or omission of Operator including, without limitation, the failure
                of any
                of Operator‘s Items, or the failure of Operator to issue instructions,
                provide Operator’s Items or furnish services.

            

    

    

    
      	 	
              (c)

            	
              During
                any period Contractor is waiting for equipment that is supplied at
                Operator 's request.

            

    

    

    
      	 	
              (d)

            	
              During
                any delay in operations solely due to the fault of Operator, its
                contractors (except Contractor and its Subcontractors) or subcontractors,
                including, but not limited to delay in providing access to the drilling
                location.

            

    

    

    
      	 	
              (e)

            	
              During
                the time which operations hereunder are suspended due to abnormal
                or
                hazardous formations and/or adverse weather conditions.
                

            

    

    

    
      	 	
              (f)

            	
              From
                the moment Contractor could have spudded the first well had it not
                been
                delayed solely by Operator until the Operating Rate first becomes
                payable;
                or

            

    

    

    
      	 	
              (g)

            	
              During
                any period that the Drilling Rig is in transit between drilling locations
                or in transit to the sea port of Israel for the demobilization to
                Turkey
                after the last well; provided that if, at the termination of this
                Contract, Drilling Rig is not moved to the sea port of Israel or
                the
                nearest place as mutually agreed in writing, the period shall not
                exceed
                the reasonable estimated time required to arrive at such
                place.

            

    

    

    The
      “Standby with Reduced Crew Rate” will be 70% of the Operating Rate per 24-hour
      day and will be paid during periods of shutdown requested by Operator when
      Operator anticipates that the Drilling Rig will be shut down for more than
      five
      (5) consecutive days and part or all of Contractor’s Personnel are released as
      mutually agreed between Operator and Contractor. However, Operator shall have
      the right to cause Contractor to recommence operations at any time after 10
      (ten) days from shutdown, by giving written notice to Contractor of 10 (ten)
      days in advance of the date when operations are to be recommenced, provided
      that
      there are available flights to the Country of Operations and there is not any
      problem in obtaining the visas or work permits in scope of this Contract.
      Operator shall reimburse Contractor for costs incurred in returning released
      personnel to their point of origin and for costs of remobilizing personnel
      on
      the re-commencement of operations. Operator shall be responsible for providing
      security services at its own cost to protect Contractor's Items during the
      period of such shutdown. 

     

    The
      “Standby without Crew Rate” will be 60% of the Operating Rate per 24-hour day
      and will be paid during periods as defined in Article 302. 

    

    806.
      Repair Rate

    

    The
      “Repair Rate” will be 100% of the Operating Rate per 24-hour day and will be
      paid as follows:

    

    (a)
      The
      Operating Rate up to an accumulation of 72 (seventy-two) hours per calendar
      month.

     

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    (b)
      No
      compensation for the hours beyond a total of 72 (seventy-two) accumulated hours
      per calendar month.

    

    For
      the
      purpose of this rate calculation, partial days and months are to be pro-rated.
      Contractor will use due diligence in effecting all repairs, replacements or
      inspection in a good and competent manner and will use its best efforts to
      replace any defective items in the time possible. Preventive maintenance should,
      as much as it is possible, be carried out during periods when the drilling
      equipment is idle.

    

    807.
      Force Majeure Rate

    

    The
      “Force Majeure Rate” will be 60% of the Operating Rate per 24-hour day and will
      be paid during any period in which operations are not being carried because
      of
      Force Majeure. If Force Majeure exceeds 45 (forty five) consecutive days, either
      Party may elect to end the Contract. In such case, Contractor shall be paid
      the
      Demobilization Fee and the Transportation fee to the Haifa Port together with
      all re-exportation expenses of the Contractor’s Items. 

    

    808.
      Moving Fee

    

    The
      “Moving Fee” will be the actual cost of moving (trucking, loading/unloading and
      insurance) plus 15% handling fee and Stand-by with Crew Rate for a maximum
      of 12
      days for any location within 60 km distance from the first well as addressed
      in
      the Contract in details. If the distance of the next location exceeds 60 km.,
      the additional number of days of the above total of days will be subject to
      a
      mutual written agreement.

    

    809.
      Variation of Rates

    

    The
      rates
      and/or payments herein set forth shall be revised by the actual amount of the
      change in Contractor’s cost if an event as described below occurs or if the cost
      of any of the items hereinafter listed shall vary by more than the amount
      indicated below from the Contractor’s cost thereof by 5% or by the same amount
      after the date of any revision pursuant to this clause, all as evidenced by
      reasonable written documentation supplied to the other Party:

    

    
      	 	
              (a)

            	
              if
                labor costs, including all benefits and the cost of foreign income
                taxes
                paid by Contractor for its expatriate employees vary by more than
                five
                percent;

            

    

    

    
      	 	
              (b)

            	
              if
                Operator requests Contractor to increase the number of Contractor’s
                Personnel in accordance with Clause 304
                ;

            

    

    

    
      	 	
              (c)

            	
              if
                it becomes necessary for Contractor to change the work schedule of
                its
                personnel as a result of a written request from
                Operator;

            

    

    

    
      	 	
              (d)

            	
              in
                the event described in Clause 1202
                (Assignment)

            

    

    

    
      	 	
              (e)

            	
              if
                there is any change in legislation (other than Corporate tax legislation)
                by the Country of Operations granting Operator the concession in
                which
                Contractor is working that alters Contractor’s financial
                burden;

            

    

     

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              (f)

            	
              if
                the cost of insurance premiums varies by more than five
                percent;

            

    

    

    
      	 	
              (g)

            	
              if
                Contractor’s interest rate varies by more than one-half of one percent.
                

            

    

    

    ARTICLE
      IX – INVOICES AND PAYMENTS

    

    901.
      Monthly Invoices

    

    Contractor
      shall invoice Operator, at the end of each month, for all daily charges earned
      by Contractor during that month. Other charges shall be invoiced as earned.
      Invoicing for daily charges will reflect details of the time spent (calculated
      to the nearest hour) and the rate charged for the time; invoices for other
      charges will be accompanied by invoices supporting costs incurred for Operator
      or other substantiation as required.

    

    902.
      Payment

    

    Operator
      shall pay, by telegraphic transfer, all invoices within 15 (fifteen) days upon
      the receipt thereof except that if Operator disputes an item invoiced, Operator
      shall, within 10 (ten) days upon the receipt of the related invoice ,notify
      Contractor of the item disputed, if any, in writing, specifying the reason
      therefore, and payment of the disputed item shall be withheld by Operator until
      the settlement of the dispute, but payment shall be made of any undisputed
      invoices. Any sums not paid by Operator in accordance with the Contract within
      15 (fifteen) days upon the receipt of invoice shall bear interest at the rate
      of
      12 (twelve) percent per annum from said due date until paid. In terms of the
      disputed invoices, the due date for the disputed but ultimately paid amounts
      shall be deemed to be the end of 15 days specified above beginning from the
      date
      of invoice, and thus, such disputed amounts shall bear interest at the rate
      of
      12 (twelve) percent per annum from the said due date until paid; .but not from
      the date of settlement. If Operator refuses to pay undisputed items together
      with the applicable interest, if any, in compliance with the Contract,
      Contractor shall also have the right to terminate this Contract by a 10-day
      written notice to Operator, unilaterally without any prejudice to the accrued
      rights of Parties, including the right of Contractor to be paid the
      Demobilization Fee. 

    

    903.
      Method of Payment

    

    All
      payments due by Operator to the Contractor hereunder shall be made in United
      States Dollars at Contractor’s bank account which is; 

    

    Beneficiary 
      : ALADDIN MIDDLE EAST, LTD.

    Bank             : INTRUST
      BANK, N.A.

                             Wichita,
      Kansas, USA

    Account
      No  : 41142772

    Routing       
      : 101100029

    

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    Rates
      specified in this Contract are based on current exchange rate (1 EURO= 1.5502
      USD) and are subject to change if the rate reduces by more than 10% at the
      time
      of payment as published in the Wall Street Journal for the payment date.

    

    ARTICLE
      X – LIABILTY

    

    1001.
      Equipment or Property

    

    Except
      as
      specifically provided herein to the contrary, each Party hereto shall, at all
      times, be responsible for and shall hold harmless and indemnify the other Party
      from and against any damage to or loss of its own equipment or property,
      regardless of the cause of loss, including the negligence of such Party, and
      despite the fact that a Party’s items may be under the control of other Party,
      except that;

    

    
      	 	
              (a)

            	
              Operator
                shall, to the extent Contractor’s insurance does not compensate
                Contractor, therefore, be responsible at all times for damage to
                or
                destruction of Contractor’s Items or property caused by exposure to
                unusually corrosive or otherwise destructive elements, including
                those
                which are introduced into the drilling fluid from subsurface formations
                or
                the use of corrosive additives in the
                fluid.

            

    

    

    
      	 	
              (b)

            	
              Operator
                shall, to the extent Contractor’s insurance does not compensate
                Contractor, therefore, be responsible for the damage to or loss of
                Contractor’s drill string, and shall reimburse Contractor for such damage
                or loss at lesser of the CIF replacement cost of the item so lost
                or
                damaged or the Lost in Hole prices as shown in Appendix A – Part IV; with
                the understanding, however, that the indemnity granted in this Clause
                1001
                shall not indemnify either Party for liabilities incurred by it as
                a
                result of obligations undertaken in a contract with a third
                party.

            

    

    

    1002.
      The Hole

    

    In
      the
      event the hole should be lost or damaged, Operator shall be solely responsible
      for such damage to or loss of the hole, including the casing therein, unless
      such loss or damage was caused by the wilful misconduct of Contractor, or its
      employees, agents or subcontractors.

    

    1003.
      Inspection of Materials Furnished by Operator

    

    Contractor
      agrees to visually inspect all material furnished by Operator before using
      same
      and to notify Operator of any apparent defects therein. Contractor shall not
      be
      liable for any loss or damage resulting from the use of material furnished
      by
      Operator.

     

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    1004.
      Contractor’s Personnel 

    

    Contractor
      agrees to protect, defend, indemnify, and save Operator, its officers,
      directors, employees and joint owners harmless from and against all claims,
      demands, and causes of action of every kind and character, without limit and
      without regard to the cause or causes thereof or the negligence of any Party
      or
      Parties, arising in connection herewith in favor of Contractor’s employees or
      Contractor’s subcontractors or their employees, or Contractor’s invitees, on
      account of bodily injury, death or damage to property. If it is judicially
      determined that the monetary limits of insurance required hereunder or of the
      indemnities voluntarily and mutually assumed under paragraph 1004 (which
      Contractor and Operator hereby agree will be supported either by available
      liability insurance, under which the insurer has no right of subrogation against
      the indemnitee, or voluntarily self-insured, in part or whole) exceed the
      maximum limits permitted under applicable law, it is agreed that said insurance
      requirements or indemnities shall automatically be amended to conform to the
      maximum monetary limits permitted under such law.

    

    1005.
      Operator’s Personnel 

    

    Operator
      agrees to protect, defend, indemnify, and save Contractor, its officers,
      directors and employees harmless from and against all claims, demands, and
      causes of action of every kind and character, without limit and without regard
      to the cause or causes thereof or the negligence of any Party or Parties,
      arising in connection herewith in favor of Operator’s employees or Operator’s
      contractors or their employees, or Operator’s invitees, other than those parties
      identified in paragraph 1004 on account of bodily injury, death or damage to
      property. If it is judicially determined that the monetary limits of insurance
      required hereunder or of the indemnities voluntarily and mutually assumed under
      paragraph 1005 (which Contractor and Operator hereby agree will be supported
      either by available liability insurance, under which the insurer has no right
      to
      subrogation against the indemnities, or voluntarily self-insured, in part or
      whole) exceed the maximum limits permitted under applicable law, it is agreed
      that said insurance requirements or indemnities shall automatically be amended
      to conform to the maximum monetary limits permitted under such law.

    

    1006.
      Pollution and Contamination

    

    Notwithstanding
      anything to the contrary contained herein, it is understood and agreed by and
      between the Contractor and Operator that the responsibility for pollution or
      contamination shall be as follows:

    

    
      	 	
              (a)

            	
              The
                Contractor shall assume all responsibility for (including cleaning
                up and
                containment) of all pollution or contamination which originates above
                the
                surface from improper care or disposition of items in Contractor’s
                possession and control and directly associated with Contractor’s Items and
                facilities and shall protect, defend, indemnify and save the Operator
                harmless from and against all claims, demands, and causes of action
                of
                every kind and character arising
                thereform.

            

    

    

    
      	 	
              (b)

            	
              Excluding
                matters for which Contractor is responsible as per (a) above, Operator
                shall assume all responsibility for (including control and removal
                of the
                pollutant involved) and shall protect, defend, indemnify and save
                the
                Contractor harmless from and against all claims, demands, and causes
                of
                action of every kind and character arising directly or indirectly
                from all
                pollution or contamination, which may occur from the negligence of
                Contractor or otherwise during the term of this Contract or as a
                result of
                operations hereunder, including, but not limited to, that which may
                result
                from fire, blowout, cratering, seepage or any other uncontrolled
                flow of
                oil, gas, water or other substance, as well as the use or disposition
                of
                oil emulsion, oil base or chemically treated drilling fluids, contaminated
                cuttings or cavings, lost circulation and fish recovery materials
                and
                fluids.

            

    

     

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              (c)

            	
              In
                the event a third party commits an act or omission which results
                in
                pollution or contamination for which either the Contractor or Operator
                for
                whom such Party is performing work is held to be legally liable,
                the
                responsibility therefore shall be considered, as between the Contractor
                and Operator, to be the same as if the Party for whom the work was
                performed had performed the same and all of the obligations respecting
                defense, indemnity, holding harmless and limitation of responsibility
                and
                liability, as set forth in (a) and (b) above, shall be specifically
                applied.

            

    

    

    1007.
      Cost of Control

    

    Operator
      shall be liable for the cost of regaining any control of any wild well and
      shall
      defend, release, hold harmless and indemnify Contractor for any such cost
      regardless of the cause thereof, excepting the negligence or wilful misconduct
      of Contractor, its agents, employees or subcontractors.

    

    1008.
      Underground Damage

    

    Operator
      agrees to defend, release, hold harmless and indemnify the Contractor for any
      and all claims except the negligence or wilful misconduct of Contractor, its
      agents, employees or subcontractors against Contractor resulting from operations
      under this Contract on account of injury to destruction of, or loss or
      impairment of any property right in or to oil, gas or other mineral substance
      or
      water, if at the time of the act or omission causing such injury, destruction,
      loss, or impairment, said substance had not been reduced to physical possession
      above the surface, and for any loss or damage to any formation, strata, or
      reservoir beneath the surface.

    

    1009.
      Consequential Damages

    

    Neither
      Party shall be liable to the other for special, indirect, consequential damages
      resulting from or arising out of this Contract, including, without limitation,
      loss or profit of business interruptions, however same may be
      caused.

    

    ARTICLE
      – XI INSURANCE

    

    1101.
      Contractor’s Insurance

    

    Contractor
      shall carry and maintain the insurance shown in Appendix B. Contractor may
      from
      time to time, with the prior approval of Operator, change the insurance it
      carries. Contractor will increase its insurance beyond the limits provided
      for
      herein or will change its insurance if required by Operator, but additional
      cost
      will be paid by Operator.

     

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    1102.
      Operator’s Insurance

    

    Operator
      shall purchase a Control of Well insurance policy against blow-outs and/or
      any
      risks that are associated with the well condition due to high pressure gas
      that
      may come out from the well. Such policy should cover Contractor’s Drilling Rig
      and Items on location priced at US$15,000,000 as well as any possible losses
      to
      Contractor’s Personnel. Contractor shall be made a party as beneficiary to such
      policy. Upon completion of mobilization, Operator shall provide Contractor
      with
      a copy of the policy. In case that Operator cannot obtain such insurance policy,
      Operator shall pay for the value of the Drilling Rig and Items as per the
      provisions of Appendix C in case of any blow-outs and/or any risks that are
      associated with the well condition due to high pressure gas that may come out
      from the well within 30 days upon occurrence.

    

    1103.
      Policies and Receipts

    

    Upon
      execution of this Contract, Contractor will furnish Operator with certificates
      of all its insurance policies relating to Contractor’s operations
      hereunder.

    

    1104.
      Subrogation

    

    For
      liabilities assumed hereunder by Contractor, its insurance shall be endorsed
      to
      provide that the underwriters waive their right of subrogation against Operator.
      Operator will, as well, cause its insurer to waive subrogation against
      Contractor for liability it assumes.

    

    ARTICLE
      XII – SUBLETTING AND ASSIGNMENT

    

    1201.
      Subcontractors by Operator

    

    Operator
      may employ other contractors to perform any of the operations or services to
      be
      provided or performed by it according to Appendix A.

    

    1202.
      Assignment

    

    Neither
      Party may assign this Contract to anyone other than an affiliated company
      without the prior written consent of the other, and prompt notice of any such
      intent to assign shall be given to the other Party. In the event of such
      assignment, the assigning Party shall remain liable to the other Party as a
      guarantor of the performance by assignee of the terms of this Contract. If
      any
      assignment is made by Operator that alters Contractor’s financial burden,
      Contractor’s compensation shall be adjusted to give effect to any increase or
      decrease in Contractor’s operating costs or in taxes in the new operating
      area.

     

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    ARTICLE
      XIII – NOTICES

    

    1301.
      Notices

    

    Notices,
      reports and other communications required or permitted by this Contract to
      be
      given or sent by one Party to the other shall be delivered by hand, overnight
      courier, confirmed facsimile or confirmed e-mail transmission to:

    

    Operator’s
      Address:       Zion
      Oil & Gas, Inc.

    Bareket
      15, PO Box 3138

    Caesarea
      Industrial Park

    Israel
      38900

    Tel:
      +972.4.6231425

    Fax:
      +972.4.6231427

    E-mail:
      gperry@zionoil.com

     

    Attn:
      Glen Perry, President 

    

    Contractor’s
      Address:     Aladdin
      Middle East Ltd.

    Sogutozu
      Caddesi No: 23

    Balgat,
      06520, Ankara, Turkey

    Tel:
      +90.312.2873500

    Fax:
      +90.312.2873357 / 2875768

    E-mail:
      cetinmumcuoglu@sayergroup.com

     

    Attn:
      Huseyin Cetin Mumcuoglu, General Manager

    

    as
      the
      case may be. Either Party shall inform the other Party in writing of any change
      in address. Otherwise, notifications made to the addresses of Parties written
      in
      this Clause shall be valid and be deemed to be duly made..

    

    ARTICLE
      XIV – GENERAL

    

    1401.
      Confidential Information

    

    All
      information obtained by the Contractor in the conduct of operations hereunder
      shall be confidential and not be divulged by Contractor or its employees, agents
      or subcontractors without the written consent of Operator. 

    

    1402.
      Dispute Resolution

    

    All
      disputes arising out of or in connection with this Contract shall be finally
      settled under the Rules of Arbitration of the International Chamber of Commerce
      by one or more arbitrators appointed in accordance with the said Rules.
      Arbitration language shall be English. The place of arbitration shall be in
      London, United Kingdom. 

     

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    1403.
      Attorney’s Fees

    

    In
      any
      suit or arbitration proceedings respecting this Contract the Parties agree
      that
      the successful Party shall be entitled to recover its reasonable attorney’s fees
      and costs.

    

    1404.
      Force Majeure

    

    Except
      as
      otherwise provided in this Clause 1404, each Party shall be excused from
      complying with the terms of this Contract, except for the payment of monies
      then
      due, if and for so long as such compliance is hindered or prevented by riots,
      strikes, wars (declared or undeclared), insurrections, rebellions, terrorist
      acts, civil disturbances, dispositions or order of governmental authority,
      whether such authority be actual or assumed, acts of God (other than weather
      conditions), inability to obtain equipment, supplies of fuel, or by act or
      cause
      which is reasonably beyond the control of such Party, such causes being herein
      sometimes called “Force Majeure”. If any failure to comply is occasioned by a
      governmental law, rule, regulation, disposition or order as aforesaid and the
      affected Party is operating in accordance with good oilfield practice in the
      area of operations and is making reasonable effort to comply with such law,
      rule, regulation, disposition or order, the matter shall be deemed beyond the
      control of the affected Party. In the event that either Party hereto is rendered
      unable, wholly or in part, by any of these causes to carry out its obligation
      under this Contract, it is agreed that such Party shall give notice and details
      of Force Majeure in writing to the other Party as promptly as possible after
      its
      occurrence. In such cases, the obligations of the Party giving the notice shall
      be suspended during the continuance of any inability so caused except that
      Operator, shall be obliged to pay to Contractor the Force Majeure Rate provided
      for in clause 807 (Force Majeure Rate)

    

    1405.
      Right to Audit

    

    Contractor
      shall keep proper books, records and accounts of operations hereunder and shall
      permit Operator at all reasonable times during the term of this Contract to
      inspect the portions thereof related to any variation of the rates
      hereunder.

    

    1406.
      Waivers

    

    It
      is
      fully understood and agreed that none of the requirements of this Contract
      shall
      be considered as waived by either Party unless the same is done in writing,
      and
      then only by the persons executing this Contract or other duly authorized agent
      or representative of the Party.

    

    1407.
      Entire Agreement

    

    This
      Contract with its Appendices shall be the entire agreement between the Parties
      and supersedes and replaces any oral or written communications heretofore made
      between the Parties relating to the subject matter hereof.

    

    1408.
      Inurement

    

    This
      Contract shall inure to the benefit of and be binding upon the Parties and
      their
      respective permitted successors and assigns.

     

    INTERNATIONAL
      DAYWORK DRILLING CONTRACT – LAND

    
      
        
        

      

      
        Page
          20

        
          

        

      

      
        
        

      

    

    1409.
      Expropriation, Confiscation, Nationalization and War Risks

    

    (a)
      In
      the event the Drilling Rig or any or all of Contractor’s Items, spare parts
      and/or supplies directly associated therewith (i) cannot lawfully be exported
      from the Country of Operations in which it was operating following termination
      of drilling operations under this Contract because Contractor cannot obtain
      an
      export license or permit because of other governmental restrictions and not
      directly related to Contractor's act or failure to act; or (ii) are lost to
      Contractor through confiscation, expropriation, nationalization or governmental
      seizure and not directly related to Contractor's act or failure to act; or
      (iii)
      are seized or damaged or destroyed as a result of insurrection, terrorist acts,
      riot or war (declared or undeclared) or other similar occurrences during the
      term of this Contract, Operator will within sixty (60) days following the
      occurrence of any such event pay Contractor the value (as set out in Appendix
      C)
      of all such property so restricted, confiscated, expropriated, nationalized,
      seized, damaged or destroyed, from which value shall be subtracted the total
      of
      the following;

    

    
      	 	
              (1)

            	
              any
                amount paid Contractor by such governmental unit or
                body;

            

    

    

    
      	 	
              (2)

            	
              any
                amount paid Contractor from
                insurance;

            

    

    

    
      	 	
              (3)

            	
              depreciation
                in accordance with the schedule attached hereto as Appendix C, but
                not to
                exceed 30% of said value. Depreciation shall be computed commencing
                with
                the date upon with each component of Contractor’s Items is placed into
                service under this Contract.

            

    

    

    Following
      the payment by Operator for Contractor’s property under the conditions set forth
      (which shall be made in the currency in which the original purchase thereof
      was
      made), to Contractor and at the time of such payments, Operator shall have
      the
      option to require Contractor to immediately assign all of its right, title
      and
      interest in the Drilling Unit to Operator.

    

    (b)
      Should a change of political or other condition occurs which would enable
      Contractor again to assume possession of the Drilling Rig and/or its Items,
      spare parts and supplies directly associated therewith, Contractor agrees to
      repay to Operator such amounts as Operator may have paid to Contractor under
      this Clause 1409, less such amounts as agreed between the Parties, if any,
      as
      may be required to restore the Drilling Rig, Contractor’s Items, spare parts and
      supplies directly associated therewith to the same condition they were in at
      the
      time of suspension of drilling operations, and also less such amount (to be
      agreed upon by Operator and Contractor) as shall equitably compensate Contractor
      for deterioration, and/or depreciation thereof during the period of nonuse
      resulting from the causes set forth in this Clause 1409. In the event of such
      resumption of possession of the Drilling Rig, Operator shall reassign all of
      its
      right, title and interest in said Drilling Rig, Contractor’s Items, spare parts
      and/or supplies to Contractor as of such time of resumption of
      possession.

    

    (c)
      All
      costs and other charges provided for in this Clause 1409 are subject to
      adjustment after audit.

     

    INTERNATIONAL
      DAYWORK DRILLING CONTRACT – LAND

    
      
        
        

      

      
        Page
          21

        
          

        

      

      
        
        

      

    

    (d)
      If
      requested by Operator in writing, Contractor agrees to obtain to the extent
      then
      and thereafter available, insurance covering all or such portion of the risks
      specified in this Clause 1409 as Operator may direct. 

    

    Operator
      shall be named as co-insured in any such policy or policies of insurance, which
      shall provide for the payment of losses thereunder in United States dollars
      or
      at the option of Operator, in the currency in which the original purchase was
      made. The provisions of such insurance and cost thereof shall be subject to
      Operator’s approval prior to the issuance thereof.

    

    The
      cost
      of such insurance shall be paid by Operator to Contractor within twenty (20)
      days after invoice from Contractor evidencing the payment by Contractor of
      the
      premiums for such specified insurance.

    

    (e)
      Contractor shall pay to Operator any monies with respect to such expropriation,
      etc., which Contractor receives and for which Operator has not already received
      credit after payment has been made by Operator to Contractor under Clause
      1409.

    

    IN
      WITNESS WHEREOF, each Party has executed this Contract in two original copies,
      as of the date first written above.

    

    
      	
              OPERATOR

            	
              :
                

            	  

	 	 
	
              By

            	
              :
                Cetin Mumcuoglu

            
	 	 
	
              Title

            	
              :
                General Manager

            
	 	 
	
              CONTRACTOR

            	
              :
                

            	  

	 	 
	
              By

            	
              :
                Richard Rinberg

            
	 	 
	
              Title

            	
              :
                Chief Executive Officer

            

    

    

    INTERNATIONAL
      DAYWORK DRILLING CONTRACT – LAND

    
      
        
        

      

      
        Page
          22Unassociated Document

    

    AMENDMENT
      TO INVESTORS’ RIGHTS AGREEMENT

    STANDSTILL
      AND EXTENSION AGREEMENT

     

    This
      Amendment to Investors’ Rights Agreement Standstill and Extension Agreement
      (“Agreement”) is made as of September
      11, 2008 (the “Effective Date”), by and between Rubio’s Restaurants, Inc., a
      Delaware corporation, (“Rubio’s” or the “Company”), and Rosewood Capital L.P., a
      Delaware limited partnership (the “Investor”).

     

    RECITALS
      

     

    A.  Rubio’s
      and the Investor are parties to that certain Amended and Restated Investors’
Rights Agreement, dated as of November 19, 1997, as amended on December 31,
      1997
      and in May 1998 (the “Rights Agreement”), wherein Rubio’s granted to the
      Investor certain registration rights.

     

    B.  On
      May 7,
      2007, Rubio's and the Investor entered into an Investors' Rights Agreement
      Standstill and Extension Agreement which provided, among other things, for
      an
      extension of the expiration date applicable to the Investor's registration
      rights and modified the registration rights originally granted under the Rights
      Agreement (the "Original Extension Agreement").

     

    C.  The
      Original Extension Agreement superseded the Investors’ Rights Agreement
      Standstill and Extension Agreement, dated March 12, 2004, and the Investors’
Rights Agreement Standstill and Extension Agreement, dated July 28,
      2005.

     

    D.  Given
      the
      current state of market conditions, the trading range of Rubio’s common stock
      and the current operating performance of the Company, the Investor desires
      to
      obtain a further extension of, and modification of its registration
      rights.

     

    E.  The
      Company is willing to grant to the Investor a further extension of its
      registration rights through December 31, 2010 in exchange for the Investor
      agreeing not to exercise any demand registration rights on or before December
      31, 2008.

     

    AGREEMENT

     

    NOW,
      THEREFORE, the parties hereto agree as follows:

     

    1.  Extension
      of Registration Rights.
      Beginning on the Effective Date and extending through December 31, 2010, Rubio’s
      hereby grants to the Investor the same rights, if any, held by the Investor
      as
      of the Effective Date under Section 1.2, 1.3, 1.4, 1.6, 1.7, 1.8, 1.9, 1.10,
      1.11, 1.12 and 1.14 of the Rights Agreement, as amended by the Original
      Extension Agreement, provided, that in the event that the Company exercises
      its
      right to defer the filing of a Form S-3 registration statement pursuant to
      Section 1.12(b)(3) or to suspend the use of a Form S-3 registration statement
      pursuant to Section 1.12(d) of the Rights Agreement, the Investor’s rights shall
      be extended from December 31, 2010 by the number of days of any deferral and
      any
      suspension. Such rights shall be governed by the relevant terms and conditions
      as set forth in the Rights Agreement, which terms are hereby incorporated by
      reference, provided that the Investor shall be considered the “Holder” as that
      term is used in the Rights Agreement.

     

    2.  Standstill.
      Beginning on the Effective Date and extending through December 31, 2008, the
      Investor will not exercise any demand registration rights, as described in
      Sections 1.2 or 1.12 of the Rights Agreement, as amended by the Original
      Extension Agreement, that it is entitled to exercise.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3.  Miscellaneous.

     

    (a)  Waivers
      and Amendments.
      Neither
      this Agreement nor any provision hereof may be changed, waived, discharged,
      terminated, modified or amended except upon the written consent of the
      Company and the Investor.

     

    (b)  Headings.
      The
      headings of the various sections of this Agreement have been inserted for
      convenience of reference only and shall not be deemed to be part of this
      Agreement.

     

    (c)  Severability.
      In case
      any provision contained in this Agreement should be invalid, illegal or
      unenforceable in any respect, the validity, legality and enforceability of
      the
      remaining provisions contained herein shall not in any way be affected or
      impaired thereby.

     

    (d)  Notices.
      All
      notices, requests, consents and other communications hereunder shall be in
      writing, shall be sent by confirmed facsimile or mailed by first-class
      registered or certified airmail, or nationally recognized overnight express
      courier, postage prepaid, and shall be deemed given when so sent in the case
      of
      facsimile transmission, or when so received in the case of mail or courier,
      and
      addressed as set forth on the signature page of this Agreement.

     

    (e)  Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of California as applied to contracts entered into and performed entirely
      in California by California residents, without regard to conflicts of law
      principles.

     

    (f)  Counterparts.
      This
      Agreement may be executed in two or more counterparts, each of which shall
      constitute an original, but all of which, when taken together, shall constitute
      but one instrument, and shall become effective when one or more counterparts
      have been signed by each party hereto and delivered to the other
      parties.

     

    (g)  Successors
      and Assigns.
      Except
      as otherwise expressly provided herein, the provisions hereof shall inure to
      the
      benefit of, and be binding upon, the successors, assigns, heirs, executors
      and
      administrators of the parties hereto.

     

    (h)  Entire
      Agreement.
      This
      Agreement, the Rights Agreement and the Original Extension Agreement, constitute
      the full and entire understanding and agreement between the parties with regard
      to the subject matter hereof.

     

    (i)  Effect
      of Amendment.
      Except
      as expressly modified by this Agreement, the Original Extension Agreement shall
      remain unmodified and in full force and effect.

     

    (j)  No
      Third Party Beneficiaries.
      This
      Agreement and all conditions and provisions hereof are and are intended to
      be
      for the sole and exclusive benefit of Rubio’s and the Investor and for the
      benefit of no other party to the Rights Agreement (or any successors or
      assigns). 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
      by
      their duly authorized representatives on the day and year first above
      written.

     

    
      	
              Company:

            	
              RUBIO’S
                RESTAURANTS, INC.

              a
                Delaware corporation

               

              By:     
                /s/ Daniel E. Pittard                

              Daniel
                E. Pittard

              President
                and Chief Executive Officer

               

              Address:

              1902
                Wright Place, Suite 300

              San
                Diego, CA 92008

              Fax
                No.: (760) 602-5113

            
	 	 
	
              Investor:

            	
              ROSEWOOD
                CAPITAL, L.P.

              By:
                Rosewood Associates, L.P.

              Its:
                General
                Partner

               

              By:     
                /s/ Kyle A. Anderson            

              Kyle
                A. Anderson, 

              Managing
                Director

               

              Address:

              One
                Maritime Plaza, Suite 1575 

              San
                Francisco, CA 94111

              Fax
                No.: (415) 362-1192

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