SHAREHOLDER RIGHTS PLAN AGREEMENT

Shareholder Rights Agreement

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COMPUTERSHARE TRUST COMPANY OF CANADA | Corporation and Montreal Trust Company of Canada | TESCO CORPORATION

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Title: SHAREHOLDER RIGHTS PLAN AGREEMENT
Date: 2/27/2008
Industry: Oil Well Services and Equipment Sector: Energy

Exhibit 4.2

SHAREHOLDER RIGHTS PLAN AGREEMENT

Amended and Restated as of May 13, 2005

between

TESCO CORPORATION

and

COMPUTERSHARE TRUST COMPANY OF CANADA

as Rights Agent

TABLE OF CONTENTS


		Page
ARTICLE 1
CERTAIN DEFINITIONS

1.1	CERTAIN DEFINITIONS	3

1.2	CURRENCY	14

1.3	ACTING JOINTLY OR IN CONCERT	15

1.4	CONTROL	15

1.5	DEFINITION OF AGREEMENT	15

ARTICLE 2
THE RIGHTS

2.1	ISSUE OF RIGHTS; LEGEND ON COMMON SHARE CERTIFICATES	15

2.2	INITIAL EXERCISE PRICE; EXERCISE OF RIGHTS; DETACHMENT OF RIGHTS	16

2.3	ADJUSTMENTS TO EXERCISE PRICE; NUMBER OF RIGHTS	19

2.4	DATE ON WHICH EXERCISE IS EFFECTIVE	23

2.5	EXECUTION, AUTHENTICATION, DELIVERY AND DATING OF RIGHTS CERTIFICATES	24

2.6	REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE	24

2.7	MUTILATED, DESTROYED, LOST AND STOLEN RIGHTS CERTIFICATES	25

2.8	PERSONS DEEMED OWNERS OF RIGHTS	25

2.9	DELIVERY AND CANCELLATION OF CERTIFICATES	26

2.10	AGREEMENT OF RIGHTS HOLDERS	26

ARTICLE 3
ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS

3.1	FLIP-IN EVENT	27

ARTICLE 4
THE RIGHTS AGENT

4.1	GENERAL	28

4.2	MERGER, AMALGAMATION OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT	29

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TABLE OF CONTENTS

(continued)


		Page
4.3	DUTIES OF RIGHTS AGENT	30

4.4	CHANGE OF RIGHTS AGENT	32

ARTICLE 5
MISCELLANEOUS

5.1	REDEMPTION AND TERMINATION	32

5.2	EXPIRATION	35

5.3	ISSUANCE OF NEW RIGHTS CERTIFICATES	35

5.4	SUPPLEMENTS AND AMENDMENTS	35

5.5	FRACTIONAL RIGHTS AND FRACTIONAL SHARES	37

5.6	RIGHTS OF ACTION	37

5.7	HOLDER OF RIGHTS NOT DEEMED A SHAREHOLDER	37

5.8	NOTICES	38

5.9	COSTS OF ENFORCEMENT	39

5.10	SUCCESSORS	39

5.11	BENEFITS OF THIS AGREEMENT	39

5.12	DESCRIPTIVE HEADINGS	39

5.13	GOVERNING LAW	39

5.14	LANGUAGE	39

5.15	COUNTERPARTS	40

5.16	SEVERABILITY	40

5.17	COMING INTO EFFECT	40

5.18	RECONFIRMATION	40

5.19	REGULATORY APPROVALS	40

5.20	DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS	41

5.21	NOTICE OF PROPOSED ACTIONS	41

5.22	TIME OF THE ESSENCE	41

5.23	DECLARATION AS TO NON-CANADIAN HOLDERS	41

5.24	AMENDMENT AND RESTATEMENT	42

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SHAREHOLDER RIGHTS PLAN AGREEMENT

THIS AGREEMENT dated as of the 13th day of May, 2005,

BETWEEN:

TESCO CORPORATION, a corporation incorporated under the laws of the Province of Alberta (hereinafter referred to as the “ Corporation ” )

OF THE FIRST PART,

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COMPUTERSHARE TRUST COMPANY OF CANADA , a trust company incorporated under the laws of Canada (hereinafter referred to as the “ Rights Agent ” )

OF THE SECOND PART.

WHEREAS:

on July 9, 1996, the Corporation implemented a shareholder rights plan (the “ Original Rights Plan ” ), the terms and conditions of which are set out in the Shareholder Rights Plan Agreement dated as of July 9, 1996 (the “ Original Rights Plan Agreement ” ) between the Corporation and Montreal Trust Company of Canada, as rights agent;

B.	in order to implement the Original Rights Plan, the board of directors of the Corporation ( “ *Board of Directors* ” ):

(i)

authorized the issuance of one right (a “ Right ” ) in respect of each Common Share outstanding at the Close of Business on July 9, 1996 (the “ Record Time ” ), which distribution was made to shareholders of record at the Record Time;

(ii)

authorized the issuance of one Right in respect of each Common Share issued after the Record Time and prior to the earlier of the Separation Time and the Expiration Time; and

(iii)

authorized the issuance of Rights Certificates to holders of Rights pursuant to the terms and subject to the conditions set forth in the Original Rights Plan Agreement;

C.	each Right entitles the holder thereof, after the Separation Time, to purchase securities of the Corporation pursuant to the terms and subject to the conditions set forth in the Original Rights Plan Agreement;

D.	the Original Rights Plan Agreement was subsequently confirmed by the shareholders of the Corporation at the annual general and special meeting of shareholders of the Corporation held on August 22, 1996;

E.	pursuant to an agreement dated January 26, 2001, Montreal Trust Company of Canada assigned all of its rights, duties and obligations under the Original Rights Plan Agreement to the Rights Agent;

the Original Rights Plan was amended and restated on March 14, 2002 (the “Amended and Restated Rights Plan” ) pursuant to the terms and conditions of the Original Rights Plan Agreement as amended and restated on March 14, 2002 (the “Amended and Restated Rights Plan Agreement” ) and the Amended and Restated Rights Plan Agreement was subsequently ratified, confirmed and approved at the annual general and special meeting of shareholders of the Corporation held on May 16, 2002;

the Amended and Restated Rights Plan Agreement provides that (i) at or prior to the annual meeting of shareholders of the Corporation in the year 2005, provided that a Flip-in Event (as defined in the Amended and Restated Rights Plan Agreement) has not occurred prior to such time (other than a Flip-in Event which has been waived by the Board of Directors in accordance with the terms of the Amended and Restated Rights Plan Agreement), the Board of Directors shall submit a resolution ratifying the continued existence of the Amended and Restated Rights Plan Agreement until the termination of the annual meeting of shareholders of the Corporation in the year 2008 to the Independent Shareholders (as that term is defined in the Amended and Restated Rights Plan Agreement) for their consideration and, if thought advisable, approval, and (ii) unless a majority of the votes cast by Independent Shareholders who vote in respect of such resolution are voted in favour of the continued existence of the Amended and Restated Rights Plan Agreement until the termination of the annual meeting of shareholders of the Corporation in the year 2008, the Amended and Restated Rights Plan Agreement and all outstanding rights shall terminate and be of no further force and effect as at and after the termination of such annual meeting;

the Board of Directors has determined that it is advisable to continue the Amended and Restated Rights Plan to ensure, to the extent possible, that all shareholders of the Corporation are treated equally and fairly in connection with any take-over bid for the Corporation and to ensure that the Board of Directors is provided with a sufficient period of time to evaluate unsolicited take-over bids and to explore and develop alternatives to maximize shareholder value;

the Board of Directors has submitted at the annual general and special meeting of shareholders of the Corporation held on May 13, 2005 a resolution to the Independent Shareholders approving the continued existence of the Amended and Restated Rights Plan under this Agreement and approving this Agreement and such resolution was duly passed by the Independent Shareholders;

J.	the foregoing recitals and statements of fact are made by the Corporation and not the Rights Agent; and

K.	all capitalized terms used in the foregoing recitals shall have the meanings attributed thereto in this Agreement;

NOW THEREFORE in consideration of the premises and the respective agreements set forth herein, the parties hereby agree as follows:

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ARTICLE 1

CERTAIN DEFINITIONS

1.1

Certain Definitions

For purposes of this Agreement, the following terms have the meanings indicated:

(a)

“ Acquiring Person ” shall mean any Person who is the Beneficial Owner of 20% or more of the outstanding Common Shares; provided, however, that the term “Acquiring Person” shall not include:

(i)

the Corporation or any Subsidiary of the Corporation;

(ii)

any Person who becomes the Beneficial Owner of 20% or more of the outstanding Common Shares as a result of any one or a combination of:

(A)

an acquisition or redemption or conversion by the Corporation of Common Shares which, by reducing the number of Common Shares outstanding, increases the percentage of Common Shares Beneficially Owned by such Person to 20% or more of the Common Shares then outstanding ( “ Share Acquisitions or Redemptions ” );

(B)

share acquisitions made pursuant to a Permitted Bid or a Competing Permitted Bid ( “ Permitted Bid Acquisitions ” );

(C)

share acquisitions (1) in respect of which the Board of Directors has waived the application of Section 3.1 pursuant to Sections 5.1(b), (c) or (d); or (2) which were made on or prior to the Record Time; or (3) which were made pursuant to a dividend reinvestment plan of the Corporation; or (4) pursuant to the receipt and/or exercise of rights issued by the Corporation to all the holders of the Common Shares to subscribe for or purchase Common Shares or Convertible Securities, provided that such rights are acquired directly from the Corporation and not from any other Person and provided that such Person does not thereby acquire a greater percentage of Common Shares or Convertible Securities than the Person’s percentage of Common Shares Beneficially Owned immediately prior to the receipt and/or exercise of such rights; or (5) pursuant to a distribution by the Corporation of Common Shares or Convertible Securities (and the conversion of such Convertible Securities) made pursuant to a prospectus or by way of private placement, provided that such Person does not thereby acquire a greater percentage of such Common Shares or Convertible Securities than the Person’s percentage of Common Shares Beneficially Owned immediately prior to such distribution; or (6) pursuant to a plan of arrangement, amalgamation or other statutory procedure requiring shareholder approval; or (7) pursuant to a distribution by the Corporation of Common Shares or Convertible Securities upon the exercise by an individual employee of stock options granted under a stock option plan of the Corporation or rights to purchase securities granted under a share purchase plan of the Corporation, provided that (i) all

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necessary stock exchange approvals for such stock option plan or share purchase plan have been obtained and such stock option plan or share purchase plan complies with the terms and conditions of such approvals and (ii) such Person does not become the Beneficial Owner of more than 25% of the Common Shares outstanding immediately prior to the distribution, and in making this determination the Common Shares to be issued to such Person in the distribution shall be deemed to be held by such Person but shall not be included in the aggregate number of outstanding Common Shares immediately prior to the distribution ( “ Exempt Acquisitions ” );

(D)

the acquisition of Common Shares upon the exercise of Convertible Securities received by such Person pursuant to a Permitted Bid Acquisition, an Exempt Acquisition or a Pro Rata Acquisition (as defined below) ( “ Convertible Security Acquisitions ” ); or

(E)

acquisitions as a result of a stock dividend, a stock split or other event pursuant to which such Person receives or acquires Common Shares or Convertible Securities on the same pro rata basis as all other holders of Common Shares, provided that such Person does not thereby acquire a greater percentage of such Common Shares or Convertible Securities than the Person’s percentage of Common Shares Beneficially Owned immediately prior to such acquisition ( “ Pro Rata Acquisitions ” );

provided, however, that if such Person shall become the Beneficial Owner of 20% or more of the Common Shares then outstanding by reason of any one or a combination of (i) Share Acquisitions or Redemptions, (ii) Permitted Bid Acquisitions, (iii) Exempt Acquisitions, (iv) Convertible Security Acquisitions, or (v) Pro Rata Acquisitions and, after such Share Acquisitions or Redemptions or Permitted Bid Acquisitions or Exempt Acquisitions or Convertible Security Acquisitions or Pro Rata Acquisitions, such Person becomes the Beneficial Owner of more than an additional 1.00% of the number of Common Shares outstanding other than pursuant to any one or combination of Share Acquisitions or Redemptions, Permitted Bid Acquisitions, Exempt Acquisitions or Convertible Security Acquisitions or Pro Rata Acquisitions, then as of the date of any such acquisition such Person shall become an “Acquiring Person”;

(iii)

a Person who is the Beneficial Owner of 20% or more of the outstanding Common Shares at the Record Time provided, however, that if such Person shall after the Record Time become the Beneficial Owner of more than an additional 1.00% of the number of Common Shares outstanding other than pursuant to Share Acquisitions or Redemptions, Permitted Bid Acquisitions, Exempt Acquisitions, Convertible Security Acquisitions or Pro Rata Acquisitions, then as of the date of any such acquisition such Person shall become an “Acquiring Person”;

(iv)

for a period of 10 days after the Disqualification Date, any Person who becomes the Beneficial Owner of 20% or more of the outstanding Common Shares as a result of such Person becoming disqualified from

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relying on clause 1.1(d)(B) solely because such Person makes or announces an intention to make a Take-over Bid, either alone or by acting jointly or in concert with any other Person. For the purposes of this definition, “ Disqualification Date ” means the first date of public announcement that any Person is making or intends to make a Take-over Bid; or

(v)

an underwriter or member of a banking or selling group acting in such capacity that becomes the Beneficial Owner of 20% or more of the Common Shares in connection with a distribution of securities.

(b)

“ Affiliate ” , when used to indicate a relationship with a specified Person, shall mean a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such specified Person.

(c)

“ Associate ” of a specified individual shall mean any individual to whom such specified individual is married or with whom such specified individual is living in a conjugal relationship outside marriage, or any relative of such specified individual who has the same residence as such specified individual.

(d)

A Person shall be deemed the “ Beneficial Owner ” , and to have “ Beneficial Ownership ” , of, and to “ Beneficially Own ” :

(i)

any securities which such Person or any of such Person’s Affiliates or Associates owns at law or in equity and includes any Common Shares in respect of which such Person or any of such Person’s Affiliates or Associates owns at law or in equity any related instalment receipts;

(ii)

any securities which such Person or any of such Person’s Affiliates or Associates has the right to acquire (A) upon the exercise of any Convertible Securities, or (B) pursuant to any agreement, arrangement or understanding provided such right is exercisable immediately or within a period of 60 days thereafter and whether or not on condition or the happening of any contingency or the making of any payment (other than customary agreements with and between underwriters and banking group or selling group members with respect to a distribution of securities or pursuant to a pledge of securities); and

(iii)

any securities which are Beneficially Owned within the meaning of clauses 1.1(d)(i) or (ii) above by any other Person with whom such Person is acting jointly or in concert;

provided, however, that a Person shall not be deemed the “Beneficial Owner”, or to have “Beneficial Ownership”, of, or to “Beneficially Own”, any security:

(A)

where (1) the holder of such security has agreed to deposit or tender such security pursuant to a Permitted Lock-up Agreement to a Take-over Bid made by such Person or any of such Person’s Affiliates or Associates or any other Person referred to in clause 1.1(d)(iii) or (2) such security has been deposited or tendered pursuant to a Take-over Bid made by such Person or any of such Person’s Affiliates or Associates or any other Person referred to in

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clause 1.1(d)(iii) until the earliest time at which any such tendered security is accepted unconditionally for payment or exchange or is taken up and paid for; or

(B)

where such Person, any of such Person’s Affiliates or Associates or any other Person referred to in clause 1.1(d)(iii), holds such security provided that (1) the ordinary business of such Person (the “ Investment Manager ” ) includes the management of investment funds for others and such security is held by the Investment Manager in the ordinary course of such business in the performance of such Investment Manager’s duties for the account of any other Person, including non-discretionary accounts held on behalf of a client by a broker or dealer registered under applicable laws, or (2) such Person (the “ Trust Company ” ) is licensed to carry on the business of a trust company under applicable laws and, as such, acts as trustee or administrator or in a similar capacity in relation to the estates of deceased or incompetent Persons or in relation to other accounts and holds such security in the ordinary course of such duties for the estates of deceased or incompetent Persons or for such other accounts, or (3) such Person (the “ Plan Trustee ” ) is the administrator or trustee of one or more pension funds or plans (each a “ Plan ” ) registered under applicable laws and holds such security for the purposes of its activity as such, or (4) such Person is a Plan or is a Person established by statute (the “ Statutory Body ” ) for purposes that include, and the ordinary business or activity of such Person includes the management of investment funds for employee benefit plans, pension plans, insurance plans (other than plans administered by insurance companies) or various public bodies, or (5) such Person is a Crown agent or agency; provided in any of the above cases, that the Investment Manager, the Trust Company, the Plan Trustee, the Plan, the Statutory Body or the Crown agent or agency, as the case may be, is not then making a Take-over Bid or has not announced a current intention to make a Take-over Bid, other than an Offer to Acquire Common Shares or other securities pursuant to a distribution by the Corporation, by means of a Permitted Bid or by means of ordinary market transactions (including pre-arranged trades entered into in the ordinary course of business of such Person) executed through the facilities of a stock exchange or organized over-the-counter market, alone or by acting jointly or in concert with any other Person; or

(C)

because such Person is a client of or has an account with the same Investment Manager as another Person on whose account the Investment Manager holds such security, or where such Person is a client of or has an account with the same Trust Company as another Person on whose account the Trust Company holds such security, or where such Person is a Plan and has a Plan Trustee who is also a Plan Trustee for another Plan on whose account the Plan Trustee holds such security; or

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(D)

where such Person (i) is a client of an Investment Manager and such security is owned at law or in equity by the Investment Manager, or (ii) has an account with a Trust Company and such security is owned at law or in equity by the Trust Company, or (iii) is a Plan and such security is owned at law or in equity by the Plan Trustee; or

(E)

where such Person is the registered holder of securities as a result of carrying on the business of, or acting as a nominee of, a securities depositary.

For purposes of this Agreement, the percentage of Common Shares Beneficially Owned by any Person shall be and be deemed to be the product determined by the formula:

100 x A/B

Where:

A =

the number of votes for the election of all directors generally attaching to the Common Shares Beneficially Owned by such Person; and

B =

the number of votes for the election of all directors generally attaching to all outstanding Common Shares.

For the purposes of the foregoing formula, where any Person is deemed to Beneficially Own unissued Common Shares which may be acquired pursuant to Convertible Securities, such Common Shares shall be deemed to be outstanding for the purpose of calculating the percentage of Common Shares Beneficially Owned by such Person in both the numerator and the denominator, but no other unissued Common Shares which may be acquired pursuant to any other outstanding Convertible Securities held by other Persons shall, for the purposes of that calculation, be deemed to be outstanding.

(e)

“ Business Day ” shall mean any day other than a Saturday, Sunday or a day that is treated as a holiday at the Corporation’s principal executive offices in Calgary, Alberta.

(f)

“ Business Corporations Act ” shall mean the Business Corporations Act , R.S.A. 2000, c. B-9, as amended, and the regulations thereunder, and any comparable or successor laws or regulations thereto.

(g)

“ Canadian-U.S. Exchange Rate ” shall mean on any date the inverse of the U.S.-Canadian Exchange Rate.

(h)

“ Canadian Dollar Equivalent ” of any amount which is expressed in United States dollars shall mean on any day the Canadian dollar equivalent of such amount determined by reference to the Canadian-U.S. Exchange Rate on such date.

(i)

“ Close of Business ” on any given date shall mean the time on such date (or, if such date is not a Business Day, the time on the next succeeding Business Day) at which the office of the transfer agent for the Common Shares in Calgary, Alberta (or, after the Separation Time, the offices of the Rights Agent in Calgary, Alberta) becomes closed to the public.

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(j)

“ Common Shares ” shall mean the common shares in the capital of the Corporation as constituted on the date hereof and any other shares of the Corporation into which such common shares may be subdivided, consolidated, reclassified or changed.

(k)

“ Competing Permitted Bid ” shall mean a Take-over Bid that:

(i)

is made after a Permitted Bid has been made and prior to the expiry of the Permitted Bid;

(ii)

satisfies all components of the definition of a Permitted Bid other than the requirements set out in clause (ii) of that definition; and

(iii)

contains, and the take-up and payment for securities tendered or deposited is subject to, an irrevocable and unqualified condition that no Common Shares will be taken up or paid for pursuant to the Take-over Bid prior to the Close of Business on the date that is no earlier than the later of (1) the 60th day after the date on which the earliest Permitted Bid which preceded the Competing Permitted Bid was made, and (2) 35 days after the date of the Take-over Bid constituting the Competing Permitted Bid.

(l)

“ Convertible Securities ” shall mean at any time:

(i)

any right (contractual or otherwise and regardless of whether such right constitutes a security) to acquire Common Shares from the Corporation; and

(ii)

any securities issued by the Corporation from time to time (other than the Rights) carrying any exercise, conversion or exchange right;

which is then exercisable or exercisable within a period of 60 days from that time pursuant to which the holder thereof may acquire Common Shares or other securities which are convertible into or exercisable or exchangeable for Common Shares (in each case, whether such right is then exercisable or exercisable within a period of 60 days from that time and whether or not on condition or the happening of any contingency).

(m)

“ Exercise Price ” shall mean, as of any date, the price at which a holder may purchase the securities issuable upon exercise of one whole Right and, until adjustment thereof in accordance with the terms hereof, the Exercise Price shall equal $100.00.

(n)

“ Expiration Time ” shall mean the earlier of:

(i)

the Termination Time; and

(ii)

the termination of the annual meeting of the shareholders of the Corporation in the year 2008;

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or, if the continued existence of this Agreement is ratified at such annual meeting by resolution passed by a majority of votes cast by Independent Shareholders who vote in respect thereof in accordance with Section 5.18, “Expiration Time” shall mean the earlier of the Termination Time and the termination of the annual meeting of shareholders of the Corporation in the year 2011;

(o)

A “ Flip-in Event ” shall mean a transaction occurring as a result of which any Person shall become an Acquiring Person provided, however, that a Flip-in Event shall be deemed to occur at the Close of Business on the tenth day (or such later day as the Board of Directors may determine) after the Stock Acquisition Date.

(p)

“ Independent Shareholders ” shall mean holders of Common Shares excluding (i) any Acquiring Person; or (ii) any Person that is making or has announced a current intention to make a Take-over Bid for Common Shares (including a Permitted Bid and a Competing Permitted Bid) other than a Person referred to in Section 1.1(d)(B), but excluding any such Person if the Take-over Bid so announced or made by such Person has been withdrawn, terminated or expired; or (iii) any Affiliate or Associate of such Acquiring Person or Persons referred to in clause (ii); or (iv) any Person acting jointly or in concert with such Acquiring Person or a Person referred to in clause (ii); or (v) a Person who is a trustee of any employee benefit plan, share purchase plan, deferred profit sharing plan or any similar plan or trust for the benefit of employees of the Corporation or a Subsidiary of the Corporation, unless the beneficiaries of the plan or trust direct the manner in which the Common Shares are to be voted or direct whether the Common Shares are to be tendered to a Take-over Bid.

(q)

“ Market Price ” per security of any securities on any date of determination shall mean the average of the daily Closing Prices Per Security of such securities (determined as described below) on each of the 20 consecutive Trading Days through and including the Trading Day immediately preceding such date; provided, however, that if an event of a type analogous to any of the events described in Section 2.3 hereof shall have caused the price used to determine the Closing Price Per Security on any Trading Day not to be fully comparable with the price used to determine the Closing Price Per Security on such date of determination or, if the date of determination is not a Trading Day, on the immediately preceding Trading Day, each such price so used shall be appropriately adjusted in a manner analogous to the applicable adjustment provided for in Section 2.3 hereof in order to make it fully comparable with the price per security used to determine the Closing Price Per Security on such date of determination or, if the date of determination is not a Trading Day, on the immediately preceding Trading Day. The “ Closing Price Per Security ” of any securities on any date shall be:

(i)

the closing board lot sale price or, if such price is not available, the average of the closing bid and asked prices, for such securities as reported by the principal Canadian stock exchange (as determined by the Board of Directors) on which such securities are listed or admitted to trading, or if for any reason neither such prices is available on such day or the securities are not listed or admitted to trading on a Canadian stock exchange, the closing board lot sale price or, if such price is not available, the average of the closing bid and asked prices, for such securities as reported by such other securities exchange on which such securities are listed or admitted for trading;

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(ii)

if, for any reason, none of such prices is available on such date or the securities are not listed or admitted to trading on a Canadian stock exchange or other securities exchange, the last sale price, or in case no sale takes place on such date, the average of the high bid and low asked prices for such securities in the over-the-counter market, as quoted by any reporting system then in use (as selected by the Board of Directors); or

(iii)

if the securities are not listed or admitted to trading as contemplated in clause 1.1(q)(i) or (ii), the average of the closing bid and asked prices as furnished by a professional market maker making a market in the securities selected by the Board of Directors;

provided, however, that if on any such date the Closing Price Per Security cannot be determined in accordance with the foregoing, the Closing Price Per Security of such securities on such date shall mean the fair value per share of such securities on such date as determined in good faith by the Board of Directors after consultation with a nationally recognized investment dealer or investment banker with respect to the fair value per share of such securities; provided further that if an event of a type analogous to any of the events described in Section 2.3 hereof has caused any price used to determine the Market Price on any Trading Day not to be fully comparable with the price as so determined on the Trading Day immediately preceding such date of determination, each price so used shall be appropriately adjusted in a manner analogous to the applicable adjustment provided for in Section 2.3 hereof in order to make it fully comparable with the price on the Trading Day immediately preceding such date of determination. The Market Price shall be expressed in Canadian dollars and, if initially determined in respect of any day forming part of the 20 consecutive Trading Day period in question in United States dollars, such amount shall be translated into Canadian dollars at the Canadian Dollar Equivalent thereof.

(r)

“ Offer to Acquire ” shall include:

(i)

an offer to purchase, or a solicitation of an offer to sell, Common Shares; and

(ii)

an acceptance of an offer to sell Common Shares, whether or not such offer to sell has been solicited;

or any combination thereof, and the Person accepting an offer to sell shall be deemed to be making an offer to acquire to the Person that made the offer to sell.

(s)

“ Offeror’s Securities ” shall mean Common Shares Beneficially Owned on the date of an Offer to Acquire by any Person who is making a Take-over Bid and by such Person’s Affiliates and Associates and by any Person acting jointly and in concert with such Person or such Person’s Affiliate and Associates and “ Offeror ” means a Person who has announced (and has not withdrawn) an intention to make or who has made (and has not withdrawn) a Take-over Bid other than a Person who has completed a Permitted Bid or a Competing Permitted Bid.

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(t)

“ Permitted Bid ” shall mean a Take-over Bid made by a Person by means of a take-over bid circular and which also complies with the following additional provisions:

(i)

the Take-over Bid is made to all holders of record of Common Shares, other than the Offeror;

(ii)

the Take-over Bid contains, and the take-up and payment for Common Shares tendered or deposited thereunder is subject to, an irrevocable and unqualified condition that no Common Shares shall be taken up or paid for pursuant to the Take-over Bid prior to the Close of Business on a date which is not less than 60 days following the date of the Take-over Bid;

(iii)

the Take-over Bid contains an irrevocable and unqualified condition that, unless the Take-over Bid is withdrawn, Common Shares may be deposited pursuant to the Take-over Bid at any time prior to the Close of Business on the date of first take-up or payment for Common Shares and that all Common Shares deposited pursuant to the Take-over Bid may be withdrawn at any time prior to the Close of Business on such date;

(iv)

the Take-over Bid contains an irrevocable and unqualified condition that more than 50% of the outstanding Common Shares held by Independent Shareholders, determined as at the date of first take-up or payment for Common Shares under the Take-over Bid, must be deposited to the Take-over Bid and not withdrawn at the Close of Business on the date of first take-up or payment for Common Shares; and

(v)

the Take-over Bid contains an irrevocable and unqualified condition that in the event that more than 50% of the then outstanding Common Shares held by Independent Shareholders shall have been deposited to the Take-over Bid and not withdrawn as at the date of first take-up or payment for Common Shares under the Take-over Bid, the Offeror will make a public announcement of that fact and the Take-over Bid will remain open for deposits and tenders of Common Shares for not less than 10 Business Days from the date of such public announcement;

provided that if a Take-over Bid constitutes a Competing Permitted Bid, the term “Permitted Bid” shall also mean the Competing Permitted Bid.

(u)

“Permitted Lock-up Agreement” shall mean an agreement (the “ Lock-up Agreement ” ) between a Person, any of such Person’s Affiliates or Associates or any other Person referred to in clause 1.1(d)(iii) and one or more holders of Common Shares (each such holder herein referred to as a “ Locked-up Person ” ) (the terms of which are publicly disclosed and a copy of which is made available to the public, including the Corporation, not later than the date the Lock-up Bid (as defined below) is publicly announced or, if the Lock-up Bid has been publicly announced prior to the date of the Lock-up Agreement, not later than the date of the Lock-up Agreement) pursuant to which each such Locked-up Person agrees to deposit or tender Common Shares to a Take-over Bid (the “ Lock-up Bid ” ) made or to be made by the Person, any of such Person’s Affiliates or Associates or any other Person referred to in clause 1.1(d)(iii), provided that:

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(i)

the Lock-up Agreement permits the Locked-up Person to withdraw its Common Shares from the Lock-up Agreement in order to deposit or tender the Common Shares to another Take-over Bid or to support another transaction prior to the Common Shares being taken up and paid for under the Lock-up Bid, so long as the other Take-over Bid or transaction:

(A)

offers a price or value per Common Share that exceeds the price or value per Common Share offered under the Lock-up Bid; or

(B)

is for a number of Common Shares which is greater than the number of Common Shares that the Offeror has offered to purchase under the Lock-up Bid by such number as may have been agreed to in the Lock-up Agreement, provided that such agreed upon number is not greater than 7% of the number of Common Shares offered to be purchased under such Lock-up Bid at a price or value per Common Share that is not less than the price or value per Common Share offered under such Lock-up Bid; or

(C)

offers a price or value for each Common Share which is greater than the price or value for each Common Share offered under the Lock-up Bid by as much as or more than a specified amount provided that such specified amount is not greater than 7% of the price or value offered under such Lock-up Bid; and,

for greater clarity, the Lock-up Agreement may (1) contain a right of first refusal, (2) require a period of delay to give the Person who made the Lock-up Bid an opportunity to match or better the consideration or value offered in the other Take-over Bid or transaction or to offer to purchase or otherwise acquire the same number of Common Shares subject to the other Take-over Bid or transaction or (3) contain other similar limitations on a Locked-up Person’s right to withdraw Common Shares from the Lock-up Agreement, so long as any such limitation does not preclude the exercise by the Locked-up Person of the right to withdraw Common Shares during the period of the other Take-over Bid or transaction; and

(ii)

no “break-up” fees, “top-up” fees, penalties, expenses or other amounts that exceed in the aggregate the greater of:

(A)

the cash equivalent of 2 ¹ / 2 % of the price or value of the consideration payable under the Lock-up Bid to the Locked-up Person; and

(B)

50% of the amount by which the price or value of the consideration payable under another Take-over Bid or transaction to a Locked-up Person exceeds the price or value of the consideration that such Locked-up Person would have received under the Lock-up Bid;

shall be payable by such Locked-up Person pursuant to the Lock-up Agreement in the event such Locked-up Person fails to deposit or tender Common Shares to the Lock-up Bid or withdraws Common Shares previously tendered thereto in order to deposit or tender such Common Shares to another Take-over Bid or support another transaction.

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(v)

“ Person ” shall mean any individual, firm, partnership, association, trust, trustee, personal representative, body corporate, corporation, unincorporated organization, syndicate, government or governmental agency, or other entity.

(w)

“ Record Time ” shall mean the Close of Business on July 9, 1996.

(x)

“ Securities Act ” shall mean the Securities Act , R.S.A. 2000, c. S-4, as amended, and the rules and regulations thereunder, and any comparable or successor laws, rules or regulations thereto.

(y)

“ Separation Time ” shall mean, subject to Section 5.1(d), the Close of Business on the tenth Business Day after the earlier of:

(i)

the Stock Acquisition Date;

(ii)

the date of the commencement of, or first public announcement of the intent of any Person (other than the Corporation or any Subsidiary of the Corporation) to commence a Take-over Bid (other than a Take-over Bid which is a Permitted Bid or a Competing Permitted Bid or a Take-over Bid in respect of which the Board of Directors has waived the application of Section 3.1), provided that, if any Take-over Bid referred to in this clause (ii) expires, is cancelled, terminated or otherwise withdrawn prior to the Separation Time, such Take-over Bid shall be deemed, for purposes of this Section 1.1(y), never to have been made; and

(iii)

the date upon which a Permitted Bid or Competing Bid ceases to be such;

or such later date as may be determined by the Board of Directors acting in good faith.

(z)

“ Stock Acquisition Date ” shall mean the first date of public announcement (which, for purposes of this definition, shall include, without limitation, a report filed pursuant to Section 176 of the Securities Act or Section 13(d) of the 1934 Exchange Act ) by the Corporation or an Acquiring Person of facts indicating that a Person has become an Acquiring Person.

(aa)

“ Subsidiary ” of any specified Person shall mean any corporation or other entity controlled by such specified Person.

(bb)

“ Take-over Bid ” shall mean an Offer to Acquire Common Shares or securities convertible into Common Shares, where the Common Shares subject to the Offer to Acquire, together with the Common Shares into which the securities subject to the Offer to Acquire are convertible, and the Offeror’s Securities, constitute in the aggregate 20% or more of the outstanding Common Shares at the date of the Offer to Acquire.

(cc)

“ Termination Time ” shall mean the time at which the right to exercise Rights shall terminate pursuant to Section 5.1 or 5.18 hereof.

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(dd)

“ Trading Day ” , when used with respect to any securities, shall mean a day on which the principal securities exchange on which such securities are listed or admitted to trading is open for the transaction of business or, if the securities are not listed or admitted to trading on any securities exchange, a Business Day.

(ee)

“ U.S.-Canadian Exchange Rate ” shall mean on any date:

(i)

if on such date the Bank of Canada sets an average noon spot rate of exchange with a conversion of one United States dollar into Canadian dollars, such rate;

(ii)

in any other case, the rate for such date for the conversion of one United States dollar into Canadian dollars which is calculated in the manner which shall be determined by the Board of Directors from time to time acting in good faith.

(ff)

“ U.S. Dollar Equivalent ” of any amount which is expressed in Canadian dollars shall mean on any day the United States dollar equivalent of such amount determined by reference to the U.S.-Canadian Exchange Rate on such date.

(gg)

“ 1933 Securities Act ” shall mean the United States Securities Act of 1933 , as amended, and the rules and regulations thereunder, and any comparable or successor laws or regulations thereto.

(hh)

“ 1934 Exchange Act ” shall mean the United States Securities Exchange Act of 1934 , as amended, and the rules and regulations thereunder, and any comparable or successor laws or regulations thereto.

1.2

Currency

All sums of money which are referred to in this Agreement are expressed in lawful money of Canada.

1.3

Acting Jointly or in Concert

For purposes of this Agreement, a Person is acting jointly or in concert with another Person if such Person has any agreement, arrangement or understanding (whether formal or informal and whether or not in writing) with such other Person to acquire or Offer to Acquire any Common Shares (other than (i) customary agreements with and between underwriters and banking group or selling group members with respect to a distribution of securities, and (ii) pursuant to a pledge of securities in the ordinary course of business).

1.4

Control

A Person is “ controlled ” by another Person or two or more other Persons acting jointly or in concert if:

(a)

in the case of a body corporate, securities entitled to vote in the election of directors of such body corporate carrying more than 50% of the votes for the election of directors are held, directly or indirectly, by or for the benefit of the other Person or Persons acting jointly or in concert and the votes carried by such securities are entitled, if exercised, to elect a majority of the board of directors of such body corporate; or

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(b)

in the case of a Person which is not a body corporate, more than 50% of the voting or equity interests of such entity are held, directly or indirectly, by or for the benefit of the other Person or Persons acting jointly or in concert;

and “ controls ”, “ controlling ” and “ under common control with ” shall be interpreted accordingly.

1.5

Definition of Agreement

For purposes of this Agreement, “ Agreement ” means the Amended and Restated Rights Plan Agreement, as amended and restated as of May 13, 2005 and as the same may be further amended or supplemented from time to time. References in this Agreement to “ hereto ”, “ hereof ”, “ herein ”, “ hereby ” and “ hereunder ” and similar expressions mean and refer to this Agreement as a whole and not to any particular part of this Agreement.

ARTICLE 2

THE RIGHTS

2.1

Issue of Rights; Legend on Common Share Certificates

(a)

One Right has been issued in respect of each Common Share outstanding as at the Record Time and in respect of each Common Share issued after the Record Time. One Right shall continue to be issued in respect of each Common Share issued after the date of this Agreement and prior to the earlier of the Separation Time and the Expiration Time.

(b)

Certificates for the Common Shares issued after the Record Time but prior to the earlier of the Separation Time and the Expiration Time shall evidence one Right for each Common Share represented thereby and, commencing as soon as reasonably practicable after the Record Time, shall have impressed on, printed on, written on or otherwise affixed to them the following legend:

Until the Separation Time (as defined in the Rights Agreement referred to below), this certificate also evidences and entitles the holder hereof to certain Rights as set forth in a Shareholder Rights Plan Agreement, dated as of July 9, 1996, as amended and restated on March 14, 2002 and as further amended and restated on May 13, 2005, as such from time to time be amended, restated, varied or replaced, (the “Rights Agreement”) between Tesco Corporation (the “Corporation”) and Computershare Trust Company of Canada, as Rights Agent, the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal executive office of the Corporation and may be inspected by shareholders of the Corporation during normal business hours. In certain circumstances, as set forth in the Rights Agreement, such Rights may be amended or redeemed, may expire, may become void (if, in certain cases, they are “Beneficially Owned” by an “Acquiring Person”, as such terms are defined in the Rights Agreement, or a transferee thereof) or may be evidenced by separate certificates and may no longer be evidenced by this certificate. The Corporation will mail or arrange for the mailing of a copy of the Rights Agreement to the holder of this certificate, without charge, as soon as practicable after the receipt of a written request therefor.

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Certificates representing Common Shares that are issued and outstanding at the Record Time shall evidence one Right for each Common Share evidenced thereby notwithstanding the absence of the foregoing legend until the earlier of the Separation Time and the Expiration Time.

2.2

Initial Exercise Price; Exercise of Rights; Detachment of Rights

(a)

Subject to adjustment as herein set forth, each Right will entitle the holder thereof, after the Separation Time and prior to the Expiration Time, to purchase, for the Exercise Price, or its U.S. Dollar Equivalent as at the Business Day immediately preceding the day of exercise of the Right, one Common Share. Notwithstanding any other provision of this Agreement, any Rights held by the Corporation or any of its Subsidiaries shall be void.

(b)

Until the Separation Time:

(i)

no Right may be exercised; and

(ii)

each Right will be evidenced by the certificate for the associated Common Share registered in the name of the holder thereof (which certificate shall also be deemed to be a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share.

(c)

After the Separation Time and prior to the Expiration Time, the Rights (i) may be exercised; and (ii) the registration and transfer of the Rights shall be independent of Common Shares. Promptly following the Separation Time the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person and, in respect of any Rights Beneficially Owned by such Acquiring Person which are not held of record by such Acquiring Person, the holder of record of such Rights (a “Nominee”)) and to each holder of Convertible Securities (other than an Acquiring Person or the Nominee of an Acquiring Person) at such holder’s address as shown by the records of the Corporation (the Corporation hereby agreeing to furnish copies of such records to the Rights Agent for this purpose), (x) a certificate (a “ Rights Certificate ” ) in substantially the form of Exhibit A hereto with registration particulars appropriately completed, representing the number of Rights held by such holder at the Separation Time and having such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Corporation may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange or quotation system on which the Rights may from time to time be listed or traded, or to conform to usage, and (y) a disclosure statement prepared by the Corporation describing the Rights; provided that a Nominee shall be sent the materials provided for in (x) and (y) above in respect of all Common Shares or Convertible Securities held of record by it which are not Beneficially Owned by an Acquiring Person.

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(d)

Rights may be exercised in whole or in part on any Business Day (or on any other day which, in the city at which an Election to Exercise (as hereinafter defined) is duly submitted to the Rights Agent in accordance with this Agreement, is not a Saturday, Sunday or a day that is treated as a holiday in such city) after the Separation Time and prior to the Expiration Time by submitting to the Rights Agent (at its office in Calgary, Alberta or at any other office of the Rights Agent in the cities designated from time to time for that purpose by the Corporation with the approval of the Rights Agent), the Rights Certificate evidencing such Rights together with an election to exercise such Rights (an “ Election to Exercise ” ) substantially in the form attached to the Rights Certificate duly completed and executed by the holder or his executors or administrators or other personal representatives or his or their legal attorney duly appointed by an instrument in writing in form and executed in a manner satisfactory to the Rights Agent, accompanied by payment by certified cheque, banker’s draft or money order payable to the order of the Corporation, of a sum equal to the Exercise Price multiplied by the number of Rights being exercised and a sum sufficient to cover any transfer tax or charge which may be payable in respect of any transfer involved in the transfer or delivery of Rights Certificates or the issuance or delivery of certificates for Common Shares in a name other than that of the holder of the Rights being exercised.

(e)

Upon receipt of a Rights Certificate, with an Election to Exercise accompanied by payment as set forth in Section 2.2(d) above, which does not indicate that the Rights represented thereby are null and void as provided by Section 3.1(b), the Rights Agent (unless otherwise instructed by the Corporation in the event that the Corporation is of the opinion that the Rights cannot be exercised in accordance with this Agreement) will thereupon promptly:

(i)

requisition from the transfer agent of the Common Shares certificates for the number of Common Shares to be purchased (the Corporation hereby irrevocably authorizing its transfer agent to comply with all such requisitions);

(ii)

when appropriate, requisition from the Corporation the amount of cash to be paid in lieu of issuing fractional Common Shares;

(iii)

after receipt of the Common Share certificates, deliver the same to or to the order of the registered holder of such Rights Certificate, registered in such name or names as may be designated by such holder;

(iv)

when appropriate, after receipt, deliver such cash to or to the order of the registered holder of the Rights Certificate; and

(v)

tender to the Corporation all payments received on the exercise of the Rights.

(f)

In case the holder of any Rights shall exercise less than all the Rights evidenced by such holder’s Rights Certificate, a new Rights Certificate evidencing the Rights remaining unexercised will be issued by the Rights Agent to such holder or to such holder’s duly authorized assigns.

(g)

The Corporation covenants and agrees that it will:

(i)

take all such action as may be necessary and within its power to ensure that all Common Shares delivered upon exercise of Rights shall, at the time of delivery of the certificates for such Common Shares (subject to payment of the Exercise Price), be duly and validly authorized, executed, issued and delivered as fully paid and non-assessable;

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(ii)

take all such action as may be necessary and within its power to comply with any applicable requirements of the Business Corporations Act , the Securities Act, the securities acts or comparable legislation of each of the other provinces of Canada, the 1933 Securities Act and the 1934 Exchange Act , and the rules and regulations thereunder and any other applicable law, rule or regulation, in connection with the issuance and delivery of the Rights Certificates and the issuance of any shares upon exercise of Rights;

(iii)

use reasonable efforts to cause all Common Shares issued upon exercise of Rights to be listed on the principal exchanges or traded in the over-the-counter markets on which the Common Shares were traded immediately prior to the Stock Acquisition Date;

(iv)

cause to be reserved and kept available out of its authorized and unissued Common Shares a number of Common Shares that, as provid

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