ASSET PURCHASE AGREEMENT

Exhibit 2.5

ASSET PURCHASE AGREEMENT

Among

NABORS US FINANCE LLC

NABORS WELL SERVICES CO. (INCLUSIVE OF ITS SEA MAR DIVISION)

SEA MAR MANAGEMENT LLC

And

HORNBECK OFFSHORE SERVICES, INC.

Dated as of July 20, 2007

TABLE OF CONTENTS

				Page
ARTICLE I		DEFINITIONS			2
1.1		Definitions			2
ARTICLE II		PURCHASE AND SALE OF TRANSFERRED ASSETS			2
2.1		Purchase and Sale of Transferred Assets			2
2.2		Excluded Assets			3
2.3		Assumption of Liabilities			3
2.4		Payment of Base Purchase Price and Additional Purchase Price			4
2.5		Allocation of Purchase Price; Adjustments to Purchase Price			4
2.6		Transfer Taxes and Fees			5
2.7		Ad Valorem Taxes			5
ARTICLE III		CLOSING ARRANGEMENTS			5
3.1		Closing; Closing Date			5
3.2		Assignment of Time Charters			5
3.3		Assignment of Management Contract			6
3.4		Assignment of Cape Coral Construction Contract			7
3.5		Ship Management Agreement			8
ARTICLE IV		REPRESENTATIONS AND WARRANTIES OF SELLER			9
4.1		Due Organization and Authority			9
4.2		Authorization; No Contravention			9
4.3		Governmental Authorization; Third Party Consents			9
4.4		Compliance with Laws, Etc			9
4.5		Binding Effect			10
4.6		No Default or Breach			10
4.7		Vessels			10
4.8		Class and International Load Line Certificate			11
4.9		Citizenship			11
4.10		Litigation			11
4.11		Environmental Matters			11
4.12		Brokers			12
4.13		Disclosures			12
ARTICLE V		REPRESENTATIONS AND WARRANTIES OF SEA MAR DIVISION CHARTERER			12
5.1		Due Organization and Authority			12
5.2		Authorization; No Contravention			12
5.3		Governmental Authorization; Third Party Consents			13
5.4		Compliance with Laws, Etc			13
5.5		Binding Effect			13

TABLE OF CONTENTS
(continued)

				Page
5.6		No Default or Breach			13
5.7		Time Charters			14
5.8		Litigation			14
5.9		Environmental Matters			14
5.10		Brokers			14
5.11		Disclosures			15
ARTICLE VI		REPRESENTATIONS AND WARRANTIES OF BAREBOAT CHARTERER			14
6.1		Due Organization and Authority			15
6.2		Authorization; No Contravention			15
6.3		Governmental Authorization; Third Party Consents			15
6.4		Compliance with Laws, Etc			16
6.5		Binding Effect			16
6.6		No Default or Breach			16
6.7		Management Contract			16
6.8		Litigation			16
6.9		Environmental Matters			16
6.10		Brokers			17
6.11		Citizenship			17
6.12		Disclosures			17
ARTICLE VII		REPRESENTATIONS AND WARRANTIES AS TO PURCHASER			17
7.1		Due Organization and Authority			17
7.2		Authorization; No Contravention			18
7.3		Governmental Authorization; Third Party Consents			18
7.4		Compliance with Laws, Etc			18
7.5		Binding Effect			18
7.6		No Default or Breach			18
7.7		Litigation			19
7.8		Section 2 Citizen			19
7.9		Funds			19
7.10		Brokers			19
ARTICLE VIII		AFFIRMATIVE COVENANTS			19
8.1		Conduct of Business of Seller, Sea Mar Division Charterer and
		Bareboat Charterer prior to Closing			19
8.2		Access and Information			20
8.3		Commercially Reasonable Efforts			20
8.4		Confidentiality; Public Announcements			21
8.5		Notification of Certain Matters by Seller			22

TABLE OF CONTENTS
(continued)

				Page
8.6		Expenses			22
8.7		Notification of Certain Matters by Purchaser			22
8.8		No Solicitation			23
8.9		Employees			23
8.10		Permitted Liens			23
8.11		Confidentiality Agreements			24
ARTICLE IX		CONDITIONS TO THE OBLIGATIONS OF PURCHASER TO CLOSE			24
9.1		Representation and Warranties			24
9.2		Compliance with this Agreement			24
9.3		Authorization, Execution and Delivery of Documents			25
9.4		Consents and Approvals			26
9.5		No Material Judgment or Order			26
9.6		Title, Delivery and Documentation of Vessel			26
ARTICLE X		CONDITIONS TO THE OBLIGATION OF SELLER, SEA MAR DIVISION
		CHARTERER AND BAREBOAT CHARTERER TO CLOSE			26
10.1		Payment of Purchase Price			26
10.2		Representation and Warranties			27
10.3		Compliance with this Agreement			27
10.4		Authorization, Execution and Delivery of Documents			27
10.5		Consents and Approvals			27
10.6		No Material Judgment or Order			27
ARTICLE XI		TERMINATION			27
11.1		Termination of Agreement			28
11.2		Survival			28
ARTICLE XII		MISCELLANEOUS			29
12.1		Survival			29
12.2		Interpretation			29
12.3		Notices			29
12.4		Successors and Assigns; Third Party Beneficiaries			30
12.5		Amendment and Waiver			31
12.6		Counterparts			31
12.7		Headings			31
12.8		Governing Law; Consent to Jurisdiction			31
12.9		Severability			32

TABLE OF CONTENTS
(continued)

				Page
12.10		Rules of Construction			32
12.11		Entire Agreement			32
12.12		Further Assurances			32
12.13		Disclosure			32
12.14		Cooperation			32
12.15		Limitation of Damages			33
12.16		Risk of Loss			33

ANNEXES

		I		Defined Terms
		II		Allocation of Purchase Price

EXHIBITS

		Exhibit A		Assignment and Assumption of Cape Coral Construction Contract
		Exhibit B		Assignment and Assumption of Charters
		Exhibit C		Assignment and Assumption of Management Contract
		Exhibit D		Ship Management Agreement

SCHEDULES

		Schedule 4.3		Governmental Authorization; Third Party Consents
		Schedule 4.4		Compliance with Laws
		Schedule 4.7		Vessels
		Schedule 4.8(a)		Class Vessels
		Schedule 4.8(b)		Load Line Vessels
		Schedule 4.10		Litigation
		Schedule 4.11		Environmental Matters
		Schedule 5.3		Governmental Authorization; Third Party Consents
		Schedule 5.4		Compliance with Laws
		Schedule 5.7		Time Charters
		Schedule 5.8		Litigation
		Schedule 5.9		Environmental Matters
		Schedule 6.3		Governmental Authorization; Third Party Consents
		Schedule 6.4		Compliance with Laws
		Schedule 6.8		Litigation
		Schedule 5.9		Environmental Matters
		Schedule 6.9		Environmental Matters

ASSET PURCHASE AGREEMENT

     This ASSET PURCHASE AGREEMENT, dated as of July 20, 2007 (this “ Agreement ”), is entered into by and among NABORS US FINANCE LLC, a limited liability company organized and existing under the laws of Delaware (“ Seller ”), NABORS WELL SERVICES CO. (inclusive of its Sea Mar Division), a corporation organized and existing under the laws of Delaware (“ Sea Mar Division Charterer ”), SEA MAR MANAGEMENT LLC, a limited liability company organized and existing under the laws of Delaware (“ Bareboat Charterer ”), and HORNBECK OFFSHORE SERVICES, INC., a corporation organized and existing under the laws of Delaware (“ Purchaser ”).

     WHEREAS, Seller is the record owner of each of the Vessels (as defined herein) and such Vessels are subject to a bareboat charter dated June 7, 2002 (the “ Bareboat Charter ”) between Seller, as owner, and Bareboat Charterer;

     WHEREAS, Bareboat Charterer has entered into a time charter of the Vessels to Sea Mar Division Charterer and Sea Mar Division Charterer, in turn, enters into Time Charters with customers involved in offshore exploration (collectively, “ Customers ”) pursuant to which Sea Mar Division Charterer charters the Vessels and vessels it manages to the Customers;

     WHEREAS, Seller has agreed to sell to Purchaser the Vessels and certain other assets;

     WHEREAS, at the Closing, subject to adjustment as provided herein, Seller will sell to Purchaser the Transferred Assets for an aggregate base purchase price of (i) US $189,000,000 in cash (the “ Base Purchase Price ”), plus (ii) the Vessel Fuel Inventories Additional Purchase Price, plus (iii) the Cape Coral Additional Purchase Price (collectively, the “ Purchase Price ”);

     WHEREAS, on the Closing Date, upon satisfaction of the conditions specified in this Agreement, Purchaser will pay the Purchase Price to Seller, and Seller will deliver title to and physical possession of the Vessels to Purchaser in accordance with the terms hereof;

     WHEREAS, Bareboat Charterer manages four vessels under the terms of the Management Contract, and desires to assign its rights and obligations under the Management Contract to Purchaser;

     WHEREAS, an Affiliate of Seller, Nabors Drilling International Limited, a company organized and existing under the laws of Bermuda (“ NDIL ”), owns five vessels (the “ Nabors Retained Vessels ”) which NDIL desires Purchaser to manage under the terms of the Ship Management Agreement;

     WHEREAS, at the Closing, Purchaser desires to purchase the Transferred Assets, assume the Time Charters and Management Contract and enter into the Ship Management Agreement;

     NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I
DEFINITIONS

     1.1 Definitions . Certain capitalized terms used in this Agreement shall have the meanings indicated in Annex I .

ARTICLE II
PURCHASE AND SALE OF TRANSFERRED ASSETS

     2.1 Purchase and Sale of Transferred Assets . On the Closing Date, Seller will sell, or will cause any Affiliate that owns such assets to sell, to Purchaser, and Purchaser will purchase, all of Seller’s and its Affiliates’ rights, title and interest in and to the following assets wherever located (collectively, the “ Transferred Assets ”):

     (a) the Vessels;

     (b) all equipment, machinery, tools, fixtures, computers and associated hardware and the owned DP systems and other software on the Vessels not associated with any other software system of Seller or any of its Affiliates, furniture and telecommunications equipment and other tangible and intangible assets and property that are owned by Seller and its Affiliates and used in connection with the Vessels, and all supplies, spare parts (such as spare engines, engine parts, shafts rudders and wheels) and warranties relating to any of the Vessels or such items;

     (c) all inventories of fuel on the Vessels (the “ Vessel Fuel Inventories ”);

     (d) all of Sea Mar Division Charterer’s and Bareboat Charter’s rights, title, interests in and to, and (subject to Section 3.2(d) , Section 3.3(d) and Section 3.4(d) ) liabilities and obligations under, the Time Charters, the Management Contract, and the Cape Coral Construction Contract, as the case may be, but expressly excluding any Excluded Liabilities;

     (e) all permits, licenses, certificates, authorizations, consents, approvals, applications, registrations, exemptions, waivers, notices of intent and orders obtained from or issued by any Governmental Authority and that relate to the ownership or operation of the Vessels or any of the Transferred Assets (collectively, “ Vessel Permits ”); and

     (f) all drawings, specifications and manuals relating to any of the Transferred Assets, purchasing records, quality control records and procedures, blueprints, service and warranty records, equipment logs, operating guides and manuals, records related to real property, personal property or ad valorem Taxes or sales or use Taxes applicable to the Transferred Assets, and all records relating to the Time Charters, the Management Contract and the Cape Coral Construction Contract; provided , however , that Seller shall retain a right of reasonable access (with advance notice and during normal business hours) to and right to copy all such materials to the extent such materials relate to any rights or liabilities retained by Seller after the Closing Date, and such access is reasonably required by Seller with respect to such rights and liabilities.

     2.2 Excluded Assets . Notwithstanding any other provision hereof, the Transferred Assets do not include any of the following items (collectively, the “ Excluded Assets ”):

     (a) all books and records of Seller relating to corporate level activities including, without limitation, those relating to filings with the Internal Revenue Service (or any state, local or foreign counterpart thereof, other than those records related to real property, personal property or ad valorem Taxes or sales or use Taxes applicable to the Transferred Assets), and those relating to accounting and tax functions (other than those records relating primarily to the Vessels), any corporate minute books, stock ledgers and other corporate books and records of Seller, all books and records primarily relating to any division, business unit or product line of Seller other than the operation of the Vessels, and all documents and analyses prepared by Seller for internal evaluation purposes in connection with this Agreement and the sale of the Vessels;

     (b) all personnel records and other records that Seller is required by Requirements of Law to retain in its possession, provided however that Seller shall provide Purchaser copies of personnel records when reasonably requested by Purchaser and permitted by law;

     (c) all insurance policies relating to the Transferred Assets to the extent owned by or covering Seller or Bareboat Charterer (including policies relating to property, liability, business interruption, health and workers’ compensation and lives of officers of Seller);

     (d) all employee pension benefit plans, employee welfare benefit plans and other plans and benefit arrangements for the benefit of employees of Seller or Bareboat Charterer;

     (e) all claims for refund of Taxes and other governmental charges of whatever nature of Seller (other than real property, personal or ad valorem Taxes or sales or use Taxes included in the Assumed Liabilities); and

     (f) all rights of Seller under this Agreement and the Transaction Documents.

     2.3 Assumption of Liabilities . Purchaser will assume and become liable for (a) all liabilities under the Time Charters, the Management Contract and the Vessel Permits ( excluding , however , liabilities for breach of such Time Charters, Management Contract or the Vessel Permits existing or accruing prior to the Closing Date), and (b) all other liabilities, whether direct or indirect, fixed or contingent, in rem against any Vessel or otherwise, including Taxes, related to the Transferred Assets that (i) arise out of or relate to the Transferred Assets as owned or operated by Purchaser on or as of the Closing Date or (ii) except as it may relate to a breach of a representation or warranty with respect to a Vessel, arise out of events first occurring on or after the Closing Date, including all expenses for dry docking, classification or certification expenses associated with any Vessel accruing on or after the Closing Date (collectively, the “ Assumed Liabilities ”). All liabilities that arise out of or relate to the Excluded Assets, all liabilities (other than the Assumed Liabilities) that arise out of or relate to the Transferred Assets as owned or operated prior to the Closing Date or events first occurring prior to the Closing Date and all other

liabilities (other than the Assumed Liabilities) of Seller, Sea Mar Division Charterer, Bareboat Charterer and their Affiliates, whether known or unknown, direct or indirect, fixed or contingent, in rem against any Vessel or otherwise, whether payable prior to or after the Closing Date, including, without limitation, liabilities for Taxes (subject to Section 2.6 ), liabilities for Employment Matters, liabilities relating to any Plans for or relating to present or former employees of Seller, Sea Mar Division Charterer, Bareboat Charterer and their Affiliates accrued or to the extent existing prior to the Closing Date, any withdrawal liability with respect to any Plan under Title IV of ERISA or any other liabilities under any Plans resulting from the sale contemplated hereunder and any liabilities relating to or arising from the matters set forth on Schedules 4.10 and 4.11 (collectively, the “ Excluded Liabilities ”), will continue to be solely the liabilities of Seller and its Affiliates and not of Purchaser or of any Vessel in rem.

     2.4 Payment of Base Purchase Price and Additional Purchase Price .

     (a) On the Closing Date, and subject to adjustment as provided in Section 2.5 , Purchaser shall pay to Seller the Base Purchase Price, to be paid in immediately available funds by wire transfer to the bank account(s) designated by Seller.

     (b) On the Closing Date, Purchaser shall pay to Seller as additional purchase price an amount in cash equal to the value, determined from the previous five day closing average of three distributors of marine fuel in the Gulf Coast, of the aggregate Vessel Fuel Inventories owned by Seller or its Affiliates and not having been reimbursed or subject to reimbursement by a charterer, as of the day before the Closing Date, such amount to be paid in immediately available funds by wire transfer to the bank account(s) designated by Seller (“ Vessel Fuel Inventories Additional Purchase Price ”).

     (c) On the Closing Date, Purchaser shall pay to Seller as additional purchase price an amount in cash equal to the aggregate capitalized expenditures, other than capitalized interest, incurred through the Closing Date by Seller or its Affiliates in connection with the construction of a new Atlantic Class vessel pursuant to the Cape Coral Construction Contract, such amount to be paid in immediately available funds by wire transfer to the bank account(s) designated by Seller (“ Cape Coral Additional Purchase Price ”). Notwithstanding the preceding sentence, to the extent that Seller’s and its Affiliate’s capitalized expenditures are not supported by appropriate documentation provided at least two (2) days prior to Closing or cannot be determined as of the Closing Date, Purchaser shall pay such amount to Seller promptly, and in any event within ten (10) days, after Seller advises Purchaser in writing of such additional capital expenditures and provides appropriate supporting documentation.

     2.5 Allocation of Purchase Price; Adjustments to Purchase Price. The Purchase Price shall be allocated among the Transferred Assets as set forth on Annex II . If, as of the Closing Date, there has occurred an actual or constructive total loss of any Vessel (each such Vessel referred to herein as an “ Unavailable Vessel ”), and this Agreement has not otherwise terminated, then the Purchase Price shall be reduced by the relevant purchase price of such Unavailable Vessel set forth in Annex II for such Vessel (the “ Unavailable Vessel Purchase Price ”). If, as of the Closing Date there has occurred a partial, but not total, loss of any Vessel, then, at Purchaser’s option, that Vessel may be treated as an Unavailable Vessel or the parties shall

arrange for a joint survey by a mutually agreed surveyor to estimate the cost of repairs required to restore the Vessel to its condition prior to the occurrence of the partial loss and the Purchase Price shall be reduced by that estimated amount.

     2.6 Transfer Taxes and Fees . All applicable sales Taxes, transfer Taxes, recording or transfer fees, costs or premiums for or related to, and other similar costs due and payable in connection with, the transfer of the Transferred Assets to Purchaser shall be shared equally between Purchaser and Seller (excluding any Taxes on income or gain arising from the sale of the Transferred Assets, which shall be borne by Seller).

     2.7 Ad Valorem Taxes . Ad valorem Taxes relating to the Transferred Assets for any ad valorem Tax period in which the Closing Date or Delivery Date, as the case may be, falls shall be pro rated based on the number of days of ownership by the parties before and after the Closing Date or the Delivery Date, as the case may be, regardless of which party receives a tax statement from any taxing authority. The party named on the relevant ad valorem Tax notice, assessment or invoice shall pay the amount due, provide the other party copies of the relevant supporting data and request reimbursement of the other party’s portion of the ad valorem Tax paid. The parties agree to make appropriate and prompt reimbursements in respect of such ad valorem Taxes.

ARTICLE III
CLOSING ARRANGEMENTS

     3.1 Closing; Closing Date . The closing of the sale of the Transferred Assets contemplated hereby (the “ Closing ”) shall take place at the offices of Fulbright & Jaworski L.L.P., 1301 McKinney, Suite 5100, Houston, Texas 77010, at 10:00 a.m. local time, on the earliest practicable date on which all of the conditions to the Closing set forth in ARTICLE IX and ARTICLE X (other than those that can only be satisfied at Closing) have been satisfied or waived by the party entitled to waive the same, it being the intention of the parties to put themselves into position to consummate the transactions contemplated hereby immediately following the expiration or termination of the applicable waiting period under the HSR Act. In furtherance of the foregoing, the parties agree to use their commercially reasonable efforts to effect the Closing on or before August 8, 2007. The time and date upon which the Closing occurs is referred to as the “ Closing Date ”.

     3.2 Assignment of Time Charters . At the Closing, upon the terms and subject to the conditions of this Agreement, and concurrent with and subject to the sale and purchase of each Vessel, as of the time of delivery of each such Vessel to Purchaser (the “ Delivery Date ”) and with respect to vessels subject to the Management Contract (if it is assigned) and the vessel subject to the Cape Coral Construction Contract (if it is assigned), as of the Closing Date:

     (a) Subject to Section 2.3 above and Section 3.2(d) below, Sea Mar Division Charterer shall transfer to Purchaser by way of assignment all of its rights, title, interests in and to, and liabilities and obligations under, the Time Charter associated with such Vessel, subject to the Management Contract or vessel subject to the Cape Coral Construction Contract.

     (b) Purchaser shall accept the assignment of such Time Charter and (subject to Section 2.3 above and Section 3.2(d) below) shall undertake the performance of all the obligations and liabilities of Sea Mar Division Charterer under such Time Charter from and after the Delivery Date of the related Vessel, or the Closing Date in the case of a vessel subject to the Management Contract or the vessel subject to the Cape Coral Contract.

     (c) Sea Mar Division Charterer shall use its commercially reasonable efforts to deliver a consent of each relevant Customer to the assignment of each Time Charter from Sea Mar Division Charterer to Purchaser; provided , however , that if any Time Charter is not assignable by its terms or a consent to the assignment of such Time Charter cannot be obtained, then (i) Purchaser shall perform such Time Charter in accordance with its terms in the name of and on Seller’s behalf and all benefits and rights derived thereunder shall be for the account of Purchaser, (ii) the performance of this Section 3.2 and execution and delivery of the Assignment and Assumption of Charters (in each case, with respect to such Time Charter only) shall cease to be a condition to any party’s obligations under this Agreement, (iii) such Time Charter shall constitute an Excluded Asset, and (iv) the liabilities and obligations of Sea Mar Division Charterer under such Time Charter shall constitute Excluded Liabilities. Seller shall, at the request and expense of Purchaser, enforce in a reasonable manner as directed by Purchaser, any and all rights of Seller under any Time Charters that could not be assigned to Purchaser.

     (d) Sea Mar Division Charterer shall remain responsible for the performance of all the obligations and liabilities of Sea Mar Division Charterer under each Time Charter, and for any Claims whatsoever arising out of or connected with such Time Charter, for which Sea Mar Division Charterer has liability under such Time Charter in respect of the period up to (but excluding and not subsequent to) the applicable Delivery Date. Purchaser shall be responsible for the performance of all obligations and liabilities under such Time Charter, and for any Claims connected with such Time Charter arising out of events and circumstances first occurring, on or after the applicable Delivery Date. In the event that Sea Mar Division Charterer is deemed to be in breach of a Time Charter for assigning or attempting to assign it without the consent of the relevant Customer, then any liability arising from such breach shall be an Excluded Liability.

     3.3 Assignment of Management Contract . At the Closing, upon the terms and subject to the conditions of this Agreement:

     (a) Subject to Section 2.3 above and Section 3.3(d) below, Bareboat Charterer shall transfer, or cause to be transferred, to Purchaser by way of assignment all of Bareboat Charterer’s rights, title, interests in and to, and liabilities and obligations under, the Management Contract.

     (b) Purchaser shall accept the assignment of the Management Contract and (subject to Section 2.3 above and Section 3.3(d) below) shall undertake the performance of all the obligations and liabilities of Bareboat Charterer under the Management Contract from and after the Closing Date.

     (c) Bareboat Charterer shall use its commercially reasonable efforts to deliver any required consent to the assignment of the Management Contract to Purchaser .

     (d) Bareboat Charterer shall remain responsible for the performance of all the obligations and liabilities of Bareboat Charterer under the Management Contract, and for any Claims whatsoever arising out of or connected with the Management Contract, for which Bareboat Charterer has a liability under the Management Contract in respect of the period up to (but excluding and not subsequent to) the Closing Date. Purchaser shall be responsible for the performance of all obligations and liabilities under the Management Contract, and for any Claims connected with the Management Contract arising out of events and circumstances first occurring, on or after the Closing Date. In the event that Bareboat Charterer is deemed to be in breach of the Management Contract for assigning or attempting to assign it without the consent of the relevant Customer, then any liability arising from such breach shall be an Excluded Liability.

     (e) Notwithstanding anything to the contrary herein, in the event that ATEL Maritime Investors, L.P. does not consent to the assignment of the Management Contract on or before the Closing Date, (i) each of Bareboat Charterer and Purchaser shall be relieved of its obligations under this Section 3.3 with respect to the assignment and assumption of the Management Contract, (ii) the performance of this Section 3.3 and the execution and delivery of the Assignment and Assumption of Management Contract shall cease to be a condition to any party’s obligations under this Agreement, (iii) the Management Contract shall constitute an Excluded Asset, and (iv) the liabilities and obligations of Bareboat Charterer under the Management Contract shall constitute Excluded Liabilities.

     3.4 Assignment of Cape Coral Construction Contract . At the Closing, upon the terms and subject to the conditions of this Agreement:

     (a) Subject to Section 2.3 above and Section 3.4(d) below, Sea Mar Division Charterer shall transfer, or cause to be transferred, to Purchaser by way of assignment all of Sea Mar Division Charterer’s or its Affiliate’s rights, title, interests in and to, and liabilities and obligations under, the Cape Coral Construction Contract and all goods, services or other deliverables previously furnished by Sea Mar Division Charterer to VT Halter Marine, Inc. under the Cape Coral Construction Contract and all of Sea Mar Division Charterer’s rights under purchase orders for such goods, services or other deliverables (the “ Cape Coral P.O.s ”).

     (b) Purchaser shall accept the assignment of the Cape Coral Construction Contract and (subject to Section 2.3 above and Section 3.4(d) below) shall undertake the performance of all the obligations and liabilities of Sea Mar Division Charterer or its Affiliate under the Cape Coral P.O.s and the Cape Coral Construction Contract from and after the Closing Date.

     (c) Sea Mar Division Charterer shall use its commercially reasonable efforts to deliver any required consent to the assignment of the Cape Coral Construction Contract to Purchaser.

     (d) Sea Mar Division Charterer or its Affiliate, as applicable, shall remain responsible for the performance of all the obligations and liabilities of Sea Mar Division Charterer or its Affiliate under the Cape Coral P.O.s and the Cape Coral Construction Contract, and for any Claims whatsoever arising out of or connected with the Cape Coral P.O.s and the Cape Coral Construction Contract, for which Sea Mar Division Charterer or its Affiliate has a liability under the Cape Coral P.O.s and the Cape Coral Construction Contract in respect of the period up to (but excluding and not subsequent to) the Closing Date; provided that Sea Mar Division Charterer or its Affiliate shall only remain responsible under a Cape Coral P.O. to the extent that Seller is compensated for the associated expenditures incurred by Sea Mar Division Charterer through payment of additional purchase price to Seller pursuant to Section 2.4(c) above. Purchaser shall be responsible for the performance of all obligations and liabilities under the Cape Coral P.O.s and the Cape Coral Construction Contract, and for any Claims whatsoever arising out of or connected with the Cape Coral P.O.s and the Cape Coral Construction Contract in respect of the period commencing on the Closing Date.

     (e) Notwithstanding anything to the contrary herein, in the event that VT Halter Marine, Inc. does not consent to the assignment of the Cape Coral Construction Contract on or before the Closing Date, then (i) each of Sea Mar Division Charterer and Purchaser shall be relieved of its obligations under this Section 3.4 with respect to the assignment and assumption of the Cape Coral Construction Contract, (ii) the execution and delivery of the Assignment and Assumption of Cape Coral Construction Contract shall cease to be a condition to any party’s obligations under this Agreement, (iii) except for Excluded Liabilities, Purchaser shall perform the Cape Coral Construction Contract in accordance with its terms in the name of and on Sea Mar Division Charterer’s behalf at no cost, including providing the supervision and management, on behalf of Sea Mar Division Charterer, of the construction of the new Atlantic Class vessel being constructed pursuant to the Cape Coral Construction Contract, (iv) except for Excluded Liabilities, all liabilities, expenses, benefits and rights derived thereunder shall be for the account of Purchaser, and (v) Sea Mar Division Charterer shall, at the request and expense of Purchaser, enforce in a reasonable manner as directed by Purchaser, any and all rights of Sea Mar Division Charterer under the Cape Coral Construction Contract. Upon completion of construction of the new Atlantic Class vessel being constructed pursuant to the Cape Coral Construction Contract, but prior to documentation of such vessel, Sea Mar Division Charterer shall convey, transfer and assign its title, right and interest in and to such vessel to Purchaser on an “as is, where is” basis with no warranties (express or implied). To the extent they are assignable, Sea Mar Division Charterer shall assign to Purchaser all of its rights under express or implied warranties from suppliers with respect to goods and services procured in connection with the construction of the new Atlantic Class vessel being constructed pursuant to the Cape Coral Construction Contract, but without warranty relating thereto. The parties will enter into mutually agreeable comparable arrangements to provide Purchaser with the benefits of any warranties from VT Halter Marine, Inc. with respect to the new Atlantic Class vessel being constructed pursuant to the Cape Coral Construction Contract.

     3.5 Ship Management Agreement . At the Closing, upon and subject to the conditions of this Agreement, NDIL and Purchaser shall enter into the Ship Management Agreement relating to the management of the Nabors Retained Vessels.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER

     Seller represents and warrants to Purchaser, except as set forth in the section of the Schedules that corresponds to the representation and warranty in question (and subject to Section 12.13 ), as follows:

     4.1 Due Organization and Authority . Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. Seller (i) has all requisite power and authority to own and operate its property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged, (ii) is duly qualified as a foreign entity, licensed and in good standing under the laws of each jurisdiction in which its ownership, lease or operation of property or the conduct of its business requires such qualification, except where such non-qualification would not reasonably be expected to have a Material Adverse Effect on Seller, and (iii) has the power and authority to execute, deliver and perform its obligations under each of the Transaction Documents to which it is a party.

     4.2 Authorization; No Contravention . The execution, delivery and performance by Seller of this Agreement and each of the other Transaction Documents to which it is a party, and the transactions contemplated hereby and thereby, (i) have been duly authorized by all necessary limited liability company action, (ii) do not violate, conflict with or result in any breach or contravention of the limited liability company agreement or the certificate of formation of Seller, (iii) do not violate, conflict with or result in any material breach or contravention of, or the creation of any Lien on the Transferred Assets under, any Contractual Obligation of Seller or any Requirement of Law applicable to Seller, and (iv) do not violate any Orders against, or binding upon, Seller. Seller is not a party to, or bound by, any agreement that is currently in effect, granting rights to any Person which are inconsistent with the rights to be granted by Seller in this Agreement or the other Transaction Documents.

     4.3 Governmental Authorization; Third Party Consents . Except for the filings under the HSR Act and the expiration or termination of the applicable waiting period under the HSR Act, and any filings required under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), no approval, consent, compliance, exemption, authorization or other action by, or notice to, or filing with, any Governmental Authority or any other Person, and no lapse of a waiting period under any Requirement of Law, is necessary or required in connection with the execution, delivery or performance by, or enforcement against, Seller of this Agreement and each of the other Transaction Documents to which it is a party or the consummation of the transactions contemplated hereby and thereby.

     4.4 Compliance with Laws, Etc. Seller is in compliance in all material respects with all Requirements of Law. Seller is in compliance in all material respects with all judgments, injunctions, writs, awards, decrees or orders of any nature (collectively, “ Orders ”) issued by any court or other Governmental Authority against Seller. There is no existing or proposed

Requirement of Law which could reasonably be expected to prohibit or restrict Seller from consummating timely the transactions contemplated hereby, materially affect Purchaser’s ability to conduct normal operation of the Transferred Assets after the Closing or otherwise materially adversely affect the ability of Seller to consummate timely the transactions contemplated hereby.

     4.5 Binding Effect . This Agreement has been, and as of the Closing Date each of the other Transaction Documents to which Seller is a party will be, duly executed and delivered by Seller, and this Agreement constitutes, and as of the Closing Date each of the other Transaction Documents to which Seller is a party will constitute, the respective legal, valid and binding obligations of Seller, enforceable against Seller in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity relating to enforceability (regardless of whether considered in a proceeding at law or in equity).

     4.6 No Default or Breach . Seller has not received notice of a default nor is it in default, and no event has occurred which with notice or lapse of time or both would constitute a default, in any material respect under, or with respect to, any Contractual Obligation of Seller. Seller does not have any Knowledge of any material default under any Contractual Obligation by any other party thereto.

     4.7 Vessels .

     (a) Seller owns beneficially and of record the vessels listed on Schedule 4.7 (collectively, the “ Vessels ”) and the other Transferred Assets. Seller has the unrestricted power and authority to transfer the Vessels and the other Transferred Assets to Purchaser, free and clear of any and all Liens other than Permitted Liens, and upon such transfer, there will be vested in Purchaser or Purchaser’s Affiliate, as applicable, good, valid and marketable title to the Vessels and other Transferred Assets free and clear of any and all Liens, other than Permitted Liens.

     (b) As of the date of this Agreement, Schedule 4.7 accurately lists the Vessels to be sold hereunder and accurately reflects for each Vessel, as applicable, its Classification Society and Class. Each of the Vessels, other than the Vessel designated as the “CAPE SCOTT”, is duly documented under the laws and flag of the United States with a valid and existing coastwise trade endorsement and, subject to the accuracy of the representations in Section 7.8 , may be duly documented by Purchaser under the laws and flag of the United States with a valid and existing coastwise trading endorsement. Each of the Vessels, other than the Vessel designated as the “CAPE SCOTT”, has a valid and existing certificate of inspection authorizing the Vessel to operate in the United States under the subchapters indicated on Schedule 4.7 . The Vessel designated as the “CAPE SCOTT” is duly registered under the laws of Vanuatu.

     (c) Subject to the terms and conditions of this Agreement, each of the Vessels shall be delivered to and taken over by Purchaser, AS IS, WHERE IS, safely afloat, upright and in a seaworthy condition, except for any Vessel then in dry dock for routine

and customary maintenance and certification work, which may be delivered to and taken over by Purchaser, AS IS, WHERE IS, while at dry dock.

     4.8 Class and International Load Line Certificate .

     (a) Each of the Vessels listed on Schedule 4.8(a) is in Class without outstanding exceptions or recommendations. Complete, current and correct copies of the Certificate of Classification, Status of Classification Report the International Load Line Certificate and the Certificate of Inspection and flag Certificate of Documentation or Document (or equivalent documents for the Vessel designated as the “CAPE SCOTT”) for each of the Vessels listed on Schedule 4.8(a) will be made available to Purchaser.

     (b) Each of the Vessels listed on Schedule 4.8(b) is free of damage affecting the Vessel’s International Load Line Certificate with International Load Line Certificates and certificates of inspection of regulatory authorities up to date without outstanding exceptions or recommendations. Complete, current and correct copies of the International Load Line Certificate and the Certificate of Inspection and flag Certificate of Documentation or Document for each of the Vessels listed on Schedule 4.8(b) will be made available to Purchaser.

     4.9 Citizenship . Bareboat Charterer is a Section 2 Citizen, and has been a Section 2 Citizen continuously since its formation, and without limiting the foregoing, has been a Section 2 Citizen for the full duration of any period during which the Bareboat Charterer was a bareboat or demise charterer of any of the Vessels, and has made all necessary certifications with respect to the Bareboat Charter pursuant to 46 U.S.C. §12119 (and its predecessor statute — 46 U.S.C. §12106) for the full duration of the Bareboat Charter, in order to maintain the coastwise trade endorsement upon the Certificate of Documentation for each of the Vessels (other than the Vessel designated as “CAPE SCOTT”), and at no time have the Vessels been sold, chartered or otherwise transferred to any Person in violation of any applicable Requirement of Law, including, without limitation, laws and regulations governing the Vessels’ eligibility for coastwise trade endorsements.

     4.10 Litigation . There are no Claims pending or, to the Knowledge of Seller, threatened, at law, in equity, in arbitration or before any Governmental Authority involving the Transferred Assets, nor is there to the Knowledge of Seller any basis for any such Claim, that would reasonably be expected to (i) have a material adverse effect on the Transferred Assets, (ii) affect the validity or enforceability of this Agreement or the other Transaction Documents, (iii) materially restrict the continuing transaction of business with the Customers, or (iv) materially delay consummation of the transactions contemplated hereby.

     4.11 Environmental Matters . Except as would not reasonably be expected to have a Material Adverse Effect on Seller:

     (a) There has been no release or disposal of hazardous materials from the Vessels in violation of any Environmental Laws or Permits;

     (b) Seller is in compliance with all Environmental Laws and Permits issued under such Environmental Laws;

     (c) There is no civil, criminal or administrative judgment, action, suit, demand, claim, hearing, notice of violation, investigation, proceeding, notice or demand letter pending or, to the Knowledge of Seller, threatened against Seller pursuant to Environmental Laws; and

     (d) Complete, current and correct copies of any material environmental reports, audits or assessments which have been conducted by or for Seller concerning any Transferred Assets will be made available to Purchaser, and a list of all such reports, audits and assessments is set forth on Schedule 4.11 .

     The representations and warranties in this Section 4.11 are the sole and exclusive representations of Seller concerning environmental matters.

     4.12 Brokers . All negotiations with respect to this Agreement and the transactions contemplated hereby have been carried out by Seller, Sea Mar Division Charterer and Bareboat Charterer directly with Purchaser, without the intervention of any Person on behalf of such parties in such manner as to give rise to any valid claim by any Person against Purchaser for a finder’s fee, advisory fee, brokerage commission or similar payment. In respect of each Time Charter, no finder’s fee, advisory fee, brokerage commission or similar payment is due by Seller to any third party.

     4.13 Disclosures . To the Knowledge of Seller, copies of the most recent versions of all documents and other written information referred to in this Agreement or in the Schedules that will be delivered or made available to Purchaser by Seller will be true, correct and complete copies thereof and will include all amendments, supplements or modifications thereto or waivers thereunder.

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SEA MAR DIVISION CHARTERER

     Sea Mar Division Charterer represents and warrants to Purchaser, except as set forth in the section of the Schedules that corresponds to the representation and warranty in question (and subject to Section 12.13 ), as follows:

     5.1 Due Organization and Authority . Sea Mar Division Charterer is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Sea Mar Division Charterer (i) has all requisite power and authority to own and operate its property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged, (ii) is duly qualified as a foreign entity, licensed and in good standing under the laws of each jurisdiction in which its ownership, lease or operation of property or the conduct of its business requires such qualification, except where such non-qualification would not reasonably be expected to have a Material Adverse Effect on Sea Mar Division Charterer, and (iii) has the power and authority to execute, deliver and perform its obligations under each of the Transaction Documents to which it is a party.

     5.2 Authorization; No Contravention . The execution, delivery and performance by Sea Mar Division Charterer of this Agreement and each of the other Transaction Documents to which it is a party, and the transactions contemplated hereby and thereby, (i) have been duly

authorized by all necessary corporate action, (ii) do not violate, conflict with or result in any breach or contravention of the certificate of incorporation or bylaws of Sea Mar Division Charterer, (iii) do not violate, conflict with or result in any material breach or contravention of, or the creation of any Lien on the Transferred Assets under, any Contractual Obligation of Sea Mar Division Charterer or any Requirement of Law applicable to Sea Mar Division Charterer, and (iv) do not violate any Orders against, or binding upon, Sea Mar Division Charterer. Sea Mar Division Charterer is not a party to, or bound by, any agreement that is currently in effect, granting rights to any Person which are inconsistent with the rights to be granted by Sea Mar Division Charterer in this Agreement or the other Transaction Documents.

     5.3 Governmental Authorization; Third Party Consents . Except for the filings under the HSR Act and the expiration or termination of the applicable waiting period under the HSR Act, and any filings required under the Exchange Act, no approval, consent, compliance, exemption, authorization or other action by, or notice to, or filing with, any Governmental Authority or any other Person, and no lapse of a waiting period under any Requirement of Law, is necessary or required in connection with the execution, delivery or performance by, or enforcement against, Sea Mar Division Charterer of this Agreement and each of the other Transaction Documents to which it is a party or the consummation of the transactions contemplated hereby and thereby.

     5.4 Compliance with Laws, Etc. Sea Mar Division Charterer is in compliance in all material respects with all Requirements of Law. Sea Mar Division Charterer is in compliance in all material respects with all Orders issued by any court or other Governmental Authority against Sea Mar Division Charterer. There is no existing or proposed Requirement of Law which could reasonably be expected to prohibit or restrict Sea Mar Division Charterer from consummating timely the transactions contemplated hereby, materially affect Purchaser’s ability to conduct normal operation of the Transferred Assets after the Closing or otherwise materially adversely affect the ability of Sea Mar Division Charterer to consummate timely the transactions contemplated hereby.

     5.5 Binding Effect . This Agreement has been, and as of the Closing Date each of the other Transaction Documents to which Sea Mar Division Charterer is a party will be, duly executed and delivered by such party, and this Agreement constitutes, and as of the Closing Date each of the other Transaction Documents to which Sea Mar Division Charterer is a party will constitute, the respective legal, valid and binding obligations of Sea Mar Division Charterer, enforceable against Sea Mar Division Charterer in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity relating to enforceability (regardless of whether considered in a proceeding at law or in equity).

     5.6 No Default or Breach . Sea Mar Division Charterer has not received notice of a default nor is it in default, and no event has occurred which with notice or lapse of time or both would constitute a default, in any material respect under, or with respect to, any Contractual Obligation of Sea Mar Division Charterer. Sea Mar Division Charterer does not have any Knowledge of any material default under any Contractual Obligation by any other party thereto. Sea Mar Division Charterer does not have any Knowledge that VT Halter Marine, Inc. or any

supplier of items required to be furnished by Sea Mar Division Charterer under the Cape Coral Construction Contract has canceled or notified Sea Mar Division Charterer, Bareboat Charterer or Seller of its intent to cancel, not renew or limit its relationship with any of the foregoing parties for any reason.

     5.7 Time Charters . Schedule 5.7 lists or describes, as of the date hereof, each active Time Charter. A true, correct and complete copy of each such Time Charter will be delivered to Purchaser.

     5.8 Litigation . There are no Claims pending or, to the Knowledge of Sea Mar Division Charterer, threatened, at law, in equity, in arbitration or before any Governmental Authority involving any of the Transferred Assets, nor is there to the Knowledge of Sea Mar Division Charterer any basis for any such Claim, that would reasonably be expected to (i) have a Material Adverse Effect on Sea Mar Division Charterer or a material adverse effect on the Transferred Assets, (ii) affect the validity or enforceability of this Agreement or the other Transaction Documents, (iii) materially restrict the continuing transaction of business with the Customers, or (iv) materially delay consummation of the transactions contemplated hereby.

     5.9 Environmental Matters . Except as would not reasonably be expected to have a Material Adverse Effect on Sea Mar Division Charterer:

     (a) There has been no release or disposal of hazardous materials from the Vessels in violation of any Environmental Laws or Permits;

     (b) Sea Mar Division Charterer is in compliance with all Environmental Laws and Permits issued under such Environmental Laws;

     (c) There is no civil, criminal or administrative judgment, action, suit, demand, claim, hearing, notice of violation, investigation, proceeding, notice or demand letter pending or, to the Knowledge of Sea Mar Division Charterer, threatened against Sea Mar Division Charterer pursuant to Environmental Laws; and