Asset Purchase Agreement between C and L Services, LP and Union Drilling Texas, LP dated August 12, 2005

  Exhibit 10.16 - -------------------------------------------------------------------------------- ASSET PURCHASE AGREEMENT DATED AS OF AUGUST 12, 2005 BETWEEN C AND L SERVICES, LP AS SELLER AND UNION DRILLING TEXAS, LP AS BUYER - --------------------------------------------------------------------------------  ASSET PURCHASE AGREEMENT ------------------------ (U-15; BREWSTER N-95; IDECO 525; NATIONAL 110) ---------------------------------------------- THIS ASSET PURCHASE AGREEMENT is made and entered into as of August 12, 2005, between C AND L SERVICES, LP, a Texas limited partnership ("Seller"), and UNION DRILLING TEXAS, LP, a Texas limited partnership ("Buyer"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, Buyer desires to purchase the Assets (as hereinafter defined) from Seller; and WHEREAS, Seller desires to sell the Assets to Buyer in exchange for the payment by Buyer of the Purchase Price (as hereinafter defined); NOW, THEREFORE, for and in consideration of the mutual benefits derived and to be derived herefrom by each party, Seller and Buyer agree as follows: ARTICLE I DEFINITIONS ----------- 1.01 Basic Definitions. In addition to the terms defined in the introductory paragraph of this Agreement, for purposes hereof, the following terms shall have the meanings set forth in this Article I, unless the context otherwise requires: "Affiliate" means, as to the person specified, any person controlling, controlled by or under common control with such person, with the concept of control in such context meaning the possession, directly or indirectly, of the power to direct or cause to direct or cause the direction of the management policies of another, whether through the ownership of voting securities, by contract, or otherwise. "Agreement" means this Asset Purchase Agreement and all schedules and exhibits attached hereto. "Assets" has the meaning specified in Section 2.01. "Best Efforts" means a party's best efforts in accordance with reasonable commercial practice. "Business Day" means a day on which national banks are generally open for the transaction of business in Pittsburgh, Pennsylvania. "Buyer" has the meaning specified in the preamble. 1  "Closing" means the consummation of the sale and purchase of the Assets as contemplated by this Agreement which shall take place on the Closing Date. "Closing Date" has the meaning specified in Section 9.01. "Code" means the Internal Revenue Code of 1986, as amended, and any successor thereto. "Delivery Date" means, with respect to any Asset, the date that Buyer has accepted the delivery of such Asset in accordance with the provisions of Section 8.08 hereof. "Final Delivery Date" means the date that Buyer has accepted the delivery of the final installment of Assets hereunder in accordance with the provisions of Section 8.08 hereof. "Lien Release Confirmation" means a letter from Community Bank of Cleburne (the "Bank") addressed to Buyer (i) confirming either that the Assets are not subject to any lien or security interest in favor of the Bank or that such Assets may be transferred by the Seller to the Buyer free and clear of any and all liens and security interests that may exist in favor of the Bank (as the case may be) and (ii) containing an undertaking by the Bank in favor of the Buyer to file either an amendment or a termination (as the case may be) of any existing financing statement that may be of record against the Seller with respect to any of the Assets to release such Assets from such Assets from any such record lien and security interest. "Purchase Price" means the consideration specified in Section 3.01 to be paid by Buyer to Seller in connection with the sale of the Assets by Seller to Buyer under the terms of this Agreement. "Seller" has the meaning specified in the preamble. 1.02 Additional Definitions. Other terms are elsewhere defined in this Agreement and shall, for purposes of this Agreement, have the meanings so specified unless the context otherwise requires. The definitions given to the terms herein shall be applicable to both the singular and plural forms of such terms as the context requires. ARTICLE II PURCHASE AND SALE OF ASSETS --------------------------- 2.01 Assets to be Purchased. Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, Seller agrees to sell, assign, transfer, convey and, subject to Section 8.08 hereof deliver, to Buyer, and Buyer agrees to purchase, the following (collectively, the "Assets"): (a) the four land drilling rigs described on Schedule 2.01(a), together with all of such drilling rigs' engines, machinery, and fittings, and the drilling equipment, blowout preventers, handling tools, spare parts, supplies, tubulars and drill pipe relating to such drilling rigs described on Schedule 2.01(a)(i) (collectively, the "Rigs") and such other drilling equipment, 2  spare parts, supplies, drill pipe and/or other assets, as described Schedule 2.01(a)(ii) (collectively, the "Other Assets"); (b) the following tangible and intangible assets used or held for use in connection with the ownership, maintenance and operation of the Assets, to the extent assignable by law and Seller or its Affiliates have the right to assign and transfer such assets: (i) all records to be delivered to Buyer pursuant to Section 2.04; and (ii) the certificates, licenses, permits, consents, operating authorities, orders, exemptions, franchises, approvals, registrations and other authorizations and applications therefor specifically associated with the maintenance and operation of the Assets ("Permits"); and (iii) all warranties relating to the Assets providing benefits to the owner of the Assets. 2.02 Risk and Expense. Seller shall bear the risks inherent in the ownership of the Assets until the Final Delivery Date. Seller shall maintain in full force and effect the insurance policies currently covering the Assets through the Final Delivery Date. Should any of the Rigs (and/or components thereof) suffer any damage between the date hereof and the Delivery Date, at the option of the Buyer, (i) the Seller shall assign and/or pay over to Buyer any insurance proceeds receivable and/or received (as the case may be) by Sellers with respect to such damage, together with an amount equal to any insurance deductible or coinsurance amount applied against such damages or (ii) Buyer shall be entitled to deduct from the Purchase Price Balance payable on the Final Delivery Date an amount equal to the value of the damaged Assets. 2.03 Nonassumption of Liabilities. Buyer does not assume and shall in no event be liable for any liabilities, debts or obligations of Seller, whether accrued, absolute, matured, contingent or otherwise, including, without limitation, (a) any foreign, federal, state, county, or local taxes, including, without limitation, excise taxes, or documentary transfer taxes, which in each case arise from the ownership of the Assets on or prior to the Final Delivery Date or from the consummation of the transactions contemplated by this Agreement; (b) any obligations or liabilities arising from any Environmental Laws (as hereinafter defined) or hazardous substances, or any other obligations or liabilities of any type relating to ownership or operation of any property either directly or indirectly by Seller or the ownership or operation of any business, property or assets utilized by Seller arising prior to or on the Final Delivery Date; (c) any obligations or liabilities whatsoever which may be imposed upon Buyer as a successor to Seller either directly or indirectly or otherwise by any Environmental Laws; (d) any obligations or liabilities arising out of, relating to, or in connection with any action, suit, proceeding, or investigation pending or threatened against Seller or any of its shareholders, officers, directors, employees, or agents; (e) any labor or employment-related claims, obligations, or liabilities which accrue or arise from events occurring prior to, on or after the Final Delivery Date, including, but not limited to, any claim of obligation or liability relating to wages, employee benefits, severance pay, workers' compensation, including insurance premiums, unemployment insurance, breach of employment contract, wrongful discharge, employment discrimination, or 3  unfair labor practice; (f) any claims, obligations, or liabilities arising under or relating to any alleged violation of the Worker Adjustment and Retraining Notification Act of 1988, as amended; (g) any liabilities for fees or expenses incident to the preparation of this Agreement or the consummation of the transactions contemplated hereby (including, without limitation, counsel, accountant's or finder's fees of Seller); or (h) trade payables or expenses, debt, contracts, agreements, leases or other obligations of Seller, except to the extent of the assignment and the assumption of the daywork drilling contracts described in Section 2.05 below. 2.04 Delivery of Records. (a) Buyer shall be entitled to the records physically located on the Rigs on the Closing Date and relevant to the Rigs (and/or the components thereof) and/or on or with the Other Assets on the Closing Date. (b) Seller shall deliver to Buyer at the time and place of delivery of the Assets, as provided in Section 8.08 below, copies of any technical or operational manuals or maintenance records related to the Assets. (c) Seller shall be entitled to retain all originals of its corporate, financial, accounting, legal, tax and audit records, subject to Buyer's rights of inspection as set forth in Section 8.02. 2.05 Assignment of Daywork Drilling Contracts. Buyer agrees to accept an assignment from Seller of the rights and obligations of Seller under the following two existing contracts of Seller relating to the Rigs: (i) that certain IADC Daywork Drilling Contract between Hallwood Petroleum, LLC ("Hallwood") and C and L Services, LP (BENCO Management, Inc./General Partner), dated April 15, 2005, pursuant to which it was intended that the National 110 Rig be deployed in Reeves County, Texas (the "Hallwood Contract") and (ii) that certain IADC Daywork Drilling Contract between Infinity Oil & Gas of Texas, Inc. ("Infinity") and C & L Services, LP or assigns, dated June 2, 2005, pursuant to which it was intended that the U 15 Rig be deployed in the Newark East Barnett Shale Field (the "Infinity Contract"; the Hallwood Contract and the Infinity Contract being sometimes hereinafter collectively referred to as the "Assigned Contracts"). Notwithstanding the foregoing, Seller acknowledges that it is the intent of the Buyer to enter into new contracts with Hallwood and Infinity, rather than to perform under the Assigned Contracts. ARTICLE III PURCHASE PRICE -------------- 3.01 Consideration for Assets. As consideration for the sale by Seller to Buyer of the Assets, Buyer shall pay to Seller the sum of Eight Million Six Hundred Fifty Thousand and No/100 Dollars ($8,650,000.00) in United States currency (the "Purchase Price"), which Purchase Price shall be payable as follows, subject to any reduction thereof in accordance with any provisions of this Agreement (including, without limitation, Section 2.02 or Section 12.03 hereof): 4  (a) Five Hundred Thousand and No/100 Dollars ($500,000.00) in United States currency of the Purchase Price (the "Deposit") shall be paid upon the execution by both parties of this Agreement; (b) Three Million Nine Hundred Thousand and No/100 Dollars ($3,900,000.00) in United States currency of the Purchase Price (the "Second Installment"; the Deposit, together with the Second Installment, being sometimes hereinafter individually referred to as an "Installment Payment" and collectively as the "Installment Payments") shall be paid within ten (10) days of the execution by both parties of this Agreement, provided that the Buyer shall not be obligated pay the Second Installment unless and until the Seller shall have delivered to the Buyer the Lien Release Confirmation; and (c) The balance of the Purchase Price shall be paid in United States currency (the "Purchase Price Balance") upon the acceptance by Buyer of the delivery by Seller to Buyer of the last to be delivered of the Assets, in accordance with Sections 8.08 and 9.04, subject to Sections 2.02 and 12.03 hereof. 3.02 Deposit and Installment Payments. The Deposit shall be nonrefundable, unless the Seller shall breach its obligations to deliver the Assets in accordance with the terms of this Agreement and the Buyer shall elect to rescind this Agreement as a result of such breach, in which case, the Deposit shall be fully refunded to Buyer, without prejudice to any other remedies that the Buyer may have with respect to such breach. If no Assets are delivered to Buyer hereunder solely as a result of a breach of this Agreement by Buyer, the Deposit shall be paid to or retained by Seller, in which case, the parties agree (i) that the amount of the Deposit (A) constitutes liquidated damages for Buyer's breach of this Agreement and (B) is not a penalty, and (ii) the amount of the Deposit shall be the limit of Buyer's liability for any breach of this Agreement. In the event that the Buyer has paid the Second Installment to Seller, but no Assets have been delivered to Buyer hereunder on or prior to September 30, 2005, Buyer shall be entitled to a return of the Second Installment, without prejudice to any other rights that the Buyer may have in the event that the failure of such delivery is a result of a breach by Seller hereunder. In the event that the Buyer has paid the Second Installment to Seller, and Seller breaches its obligations to deliver all of the Assets to Buyer hereunder on or before September 30, 2005, and Buyer elects to rescind this Agreement to the extent of any Assets not delivered by Seller in accordance with the terms of this Agreement, Buyer shall be entitled to a return of such portion of the Second Installment, if any, as shall be equal to the amount by which the Second Installment exceeds the value of the Assets delivered by Seller under this Agreement, without prejudice to any other rights that the Buyer may have in the event that the failure of such delivery is a result of a breach by Seller. On the Final Delivery Date, the Installment Payments shall be applied towards the Purchase Price for the Assets hereunder. 5  ARTICLE IV REPRESENTATIONS, WARRANTIES OF SELLER ------------------------------------- Seller represents and warrants to and agrees with Buyer that, as of the date hereof and as of the Final Delivery Date: 4.01 Organization and Qualification. Seller is a limited partnership duly organized, validly existing, and in good standing under the laws of Texas, has the full power and authority, to own, operate and lease its property and to carry on its business as now conducted, and is duly qualified and is in good standing in each jurisdictions in which the character of its properties and assets currently owned or leased or the nature of its business transactions makes such qualification necessary. 4.02 Due Execution. The execution, delivery and performance of this Agreement by Seller and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate action including the approval by the general and limited partners of Seller. This Agreement and all other agreements and written obligations entered into or undertaken in connection with the transactions contemplated hereby constitute the valid and legally binding obligations of Seller enforceable against Seller in accordance with their respective terms. 4.03 Legal Power and Authority. Seller has full power and authority to enter into this Agreement and to perform all acts and to do all things required on its part to be performed in connection with this Agreement and the transactions contemplated hereby, and has granted full power and authority to its appropriate officers to take all actions, to do all things and to make, execute and deliver all documents as may be necessary or required in order to effectuate and consummate the transactions contemplated hereby. 4.04 No Conflicts; Assigned Contracts. The execution, delivery and performance by Seller of this Agreement and the other documents, instruments and agreements contemplated hereby and the consummation of the transaction contemplated hereby and thereby will not (a) conflict with or result in a breach of any provisions of the organizational documents of Seller, (b) result in a material default or the creation of any lien or encumbrance or give rise to any right of termination, cancellation or acceleration under any of the terms, conditions or provisions of any note, bond, mortgage, indenture, license, lease or other agreement to which Seller is a party or by which it or the Assets may be bound or affected, or (c) violate any order, writ, injunction, judgment, decree, statute, rule or regulation applicable to Seller or any of its properties or assets. Neither the sale by Seller nor the use by Buyer of the Assets will infringe any United States or foreign patents or any copyright, trademark or proprietary information rights of others. The Seller has delivered to the Buyer true, correct and complete copies of each of the Assigned Contracts. 4.05 Litigation. There are no material suits, actions, proceedings or governmental investigations or inquiries pending or, to Seller's knowledge, threatened against Seller or the Assets that reasonably may be expected to have a materially adverse effect on the sale by Seller of the Assets. 6  4.06 Brokers. Seller has incurred no obligation or liability, contingent or otherwise, for brokers' or finders' fees with respect to the matters provided for in this Agreement. 4.07 Title to and Condition of Assets. On the date of this Agreement, Seller lawfully owns and is lawfully possessed of good, valid, and indefeasible title to the Assets. At the Closing, Seller shall lawfully own and be lawfully possessed of, and shall sell, transfer and assign to Buyer, good, valid, and indefeasible title to the Assets, free and clear of any and all mortgages, security interests, liens, claims, debts, charges, or other encumbrances of any kind. Seller agrees to warrant and defend the title to, and possession of, the Assets for the benefit of Buyer against the claims and demands of all persons claiming an interest in the Assets as of the Closing Date and/or as of the Delivery Date, regardless of when any such claims or demands may be asserted. Seller has not received any written notice from any governmental agency, board, bureau, body, department or authority of any federal, state, municipal or foreign jurisdiction, to the effect that any of the Assets is in violation of any applicable ordinance, regulation or building, zoning, environmental or other law in respect thereof, the violation of which will have a material adverse effect on the ownership or use of any of such Assets. Each of the Rigs and Other Assets delivered to Buyer in accordance with the provisions of this Agreement shall be in at least as good condition upon such delivery as the condition that such Assets were in when inspected by Buyer and/or Buyer's representatives prior to the date hereof. 4.08 Insurance. Seller has in place insurance policies of the types and in coverage amount sufficient to fully insure any damage or casualty loss which may arise between the date hereof and the Final Delivery Date with respect to the Assets. Seller has previously delivered to Buyer a true and complete list of all deductible and retention amount applicable to the Assets under such policies. Seller does not know of any threatened termination of or material alteration of coverage under any of such policies. All premiums payable under all such policies have been timely paid and Seller has otherwise complied fully with the terms and conditions of all such policies. 4.09 Compliance with Laws. Seller has substantially complied with, and is in substantial compliance with, all federal, state, local and foreign statutes, laws, ordinances, regulations, rules, permits, judgments, orders or decrees applicable to the Assets, and there does not exist, to the best of Seller's knowledge, any basis for any claim of default under or violation of any such statute, law, ordinance, regulation, rule, judgment, order or decree with respect to the Assets. 4.10 No Untrue Statement. In or in connection with the making of this Agreement, together with the various schedules and exhibits hereto, Seller has not made any untrue statements of a material fact or omitted to state a material fact necessary in order to make the statements made by it herein not misleading. 4.11 Sales Tax Exemption. To the knowledge and belief of Seller, the conveyance of the Assets by Seller is an occasional sale under Section 151.304 of the Texas Tax Code and the rules promulgated thereunder and is thus exempt from the imposition of the Texas sales tax. 7  ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER --------------------------------------- Buyer represents and warrants to and agrees with Seller that, as of the date hereof and as of the Final Delivery Date: 5.01 Organization and Qualification. Buyer is a limited partnership duly organized, validly existing, and in good standing under the laws of Texas, has the full power and authority, to own, operate and lease its property and to carry on its business as now conducted, and is duly qualified and is in good standing in each jurisdiction in which the character of its properties and assets currently owned or leased or the nature of its business transactions makes such qualification necessary. 5.02 Due Execution. The execution, delivery and performance of this Agreement by Buyer and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate action including the approval by its sole general partner. This Agreement and all other agreements and written obligations entered into or undertaken in connection with the transactions contemplated hereby constitute the valid and legally binding obligations of Buyer enforceable against Buyer in accordance with their respective terms. 5.03 Legal Power and Authority. Buyer has full power and authority to enter into this Agreement and to perform all acts and to do all things required on its part to be performed in connection with this Agreement and the transactions contemplated hereby, and has granted full power and authority to its appropriate officers to take all actions, to do all things and to make, execute and deliver all documents as may be necessary or required in order to effectuate and consummate the transactions contemplated hereby. 5.04 No Conflicts. The execution, delivery and performance by Buyer of this Agreement and the other documents, instruments and agreements contemplated herein will not (a) conflict with or result in a breach of any provision of the organizational documents of Buyer, (b) result in a material default or the creation of any lien or encumbrance or give rise to any right of termination, cancellation, or acceleration under any of the terms, conditions or provisions of any material note, bond, mortgage, indenture, license or other agreement to which Buyer is a party or by which it or any of its properties assets or may be bound or affected, or (c) violate any order, writ, injunction, judgment, decree, statute, rule or regulation applicable to Buyer or any of its respective properties or assets. 5.05 Litigation. There are no material suits, actions, proceedings or governmental investigations or inquiries pending or, to Buyer's knowledge, threatened against Buyer or its properties, assets, operations or businesses that reasonably may be expected to have a materially adverse effect on the purchase by Buyer of the Assets. 5.06 Brokers. Buyer has incurred no obligation or liability, contingent or otherwise, for brokers' or finders' fees with respect to the matters provided for in this Agreement. 8  ARTICLE VI CONDITIONS TO OBLIGATIONS OF SELLER ----------------------------------- The obligations of Seller to consummate the transactions contemplated herein are subject, at the option of Seller, to the fulfillment, on or prior to the Closing Date, of each of the following conditions: 6.01 Representations and Warranties. Each of the representations and warranties of Buyer herein contained shall be true and correct (disregarding all references to materiality contained therein) in all material respects on the Closing Date. 6.02 Performance. Buyer shall have performed all material obligations, covenants, and agreements hereunder and shall have complied with all material covenants and conditions contained in this Agreement to be performed or complied with by Buyer at or prior to the Closing. 6.03 Legal Prohibition. No provision of any applicable law or regulation and no judgment, injunction, order or decree shall prohibit the consummation of the Closing. ARTICLE VII CONDITIONS TO OBLIGATIONS OF BUYER ---------------------------------- The obligations of Buyer to consummate the transactions contemplated herein are subject, at the option of Buyer, to the fulfillment on or prior to the Closing Date of each of the following conditions: 7.01 Representations and Warranties. Each of the representations and warranties of Seller herein contained shall be true and correct (disregarding all references to materiality contained therein) in all material respects on the Closing Date. 7.02 Performance. Seller shall have performed all material obligations, covenants and agreements hereunder and shall have complied with all material covenants and conditions contained in this Agreement to be performed or complied with by Seller at or prior to the Closing. 7.03 Legal Prohibition. No provision of any applicable law or regulation and no judgment, injunction, order or decree shall prohibit the consummation of the Closing. 7.04 Absence of Liens. Each of the Assets shall be free and clear of any and all mortgages, security interests, liens, claims, debts, charges, or other encumbrances of any kind. 9  ARTICLE VIII COVENANTS AND AGREEMENTS OF THE PARTIES BEFORE, RELATING TO AND SUBSEQUENT TO THE CLOSING Seller and Buyer hereby covenant and agree as follows: 8.01 Expenses. Except as may be otherwise provided in this Agreement, Seller and Buyer shall pay and discharge, or cause to be paid and discharged, their own expenses incurred in connection with the preparation, authorization, execution, and performance of this Agreement and the transactions contemplated herein, including, without limitation, inspection fees and fees and expenses of counsel, accountants and consultants. Seller shall be responsible for all costs and expenses incurred in connection with the movement and delivery of the Assets to Buyer's yard in Cresson, Texas. 8.02 Access; Books and Records. Seller shall provide the officers, employees and attorneys of Buyer reasonable access, during normal business hours upon Buyer's reasonable prior notice to Seller, to the Assets and the records of Seller specifically relating thereto. Seller shall cooperate fully with such representatives of Buyer in connection with such review. If and to the extent necessary to comply with any disclosure requirements under the Securities Act of 1933 or the Securities Exchange Act of 1934, or any rules or regulations thereunder, or for any other reasonable business purpose, Buyer shall have the right, at its own expense, at any time or from time to time within three (3) years after the Final Delivery Date during reasonable business hours upon reasonable notice to Seller to inspect, and make copies of or extracts from, any of the records of Seller relating to the business of Seller or the Assets and which are not provided to Buyer (the "Retained Records"). Without limiting the generality of the foregoing, Seller shall make available to Buyer any employees or consultants necessary or useful to the preparation of historical audited financial statements relating to the Assets and shall use its best efforts to cause such employees or consultants to deliver to the Buyer's auditors all certifications, attestations and representations deemed necessary or useful for the completion of such historical audits. None of the Retained Records in the possession of Seller shall be destroyed prior to three (3) years after the Final Delivery Date without the consent of Buyer, unless first reproduced by microfilm or any other similar process. In the event that during such period Seller wishes to destroy any of the Retained Records at any time or from time to time after the Closing Date, Seller shall give not less than sixty (60) days notice to Buyer and Buyer shall have the right, at its own expense, during reasonable business hours to remove such records and keep possession of the same. 8.03 Preservation of Assets; Certain Information. From the date hereof and until the Delivery Date, Seller shall use its Best Efforts to preserve, maintain and protect the Assets in at least as good condition as the condition of such Assets upon the inspection by Buyer and/or Buyer's representatives prior to the date hereof. Any unpatented knowledge or information concerning Seller's products, methods or manufacturing process that Seller may disclose to Buyer incident to the purchase of the Assets covered under this Agreement shall, unless otherwise specifically agreed in writing, be deemed to have been disclosed as a part of the consideration for this Agreement, and Seller agrees not to assert any claim against Buyer by reason of Buyer's use thereof. 10  8.04 Notices of Certain Events. Until the Final Delivery Date, Seller will promptly notify Buyer of any action, suit, proceeding, claim or investigation which is overtly threatened or commenced against Seller which is not fully insured against (except standard deductible or self-retention amounts) and which relates to or affects the Assets or this Agreement or the transactions contemplated hereby (including, without limitation, any claim for alleged patent infringement), and Buyer will promptly notify Seller of any action, suit, proceeding, claim or investigation which is overtly threatened or commenced against Buyer which is not fully insured against (except standard deductible or self-retention amounts) and which relates to and materially and adversely affects Buyer or its business or affects this Agreement or the transactions contemplated hereby. Seller further agrees to promptly notify Buyer of (i) any notice or other communication from any governmental or regulatory agency or authority in connection with the transactions contemplated by this Agreement; (ii) any notice or other communication from any person or entity alleging that the consent of such person or entity is or may be required in connection with the transactions contemplated by this Agreement; and (iii) the damage or destruction by fire or other casualty of any Asset or part thereof or in the event that any Asset or part thereof becomes the subject of any proceeding or, to the knowledge of any Seller, threatened proceeding for the taking thereof or any part thereof or of any right relating thereto by condemnation, eminent domain or other similar governmental action. 8.05 Actions with Respect to Closing. Seller will use its Best Efforts to obtain the satisfaction of the conditions to Closing applicable to Seller set forth in Article VII as soon as practicable. Buyer will use its Best Efforts to obtain the satisfaction of the conditions to Closing applicable to Buyer set forth in Article VI as soon as practicable. 8.06 Public Statements. Neither the Buyer nor Seller, nor any of their respective Affiliates, shall make any news release or other announcement concerning the transactions contemplated hereby without first obtaining approval from each party hereto; except that Buyer may disclose the transactions contemplated hereby in connection any offering of its securities or as otherwise may be required by law. 8.07 Continued Effectiveness of Representations and Warranties. Seller and Buyer shall each use its Best Efforts to cause the representations and warranties made by it herein to continue to be true and correct on and as of the each Delivery Date as if made on and as of such Delivery Date. 8.08 Delivery of Assets. Seller, at its sole cost and expense, shall move the Rigs and Other Assets from their current location and deliver such Rigs and Other Assets FOB to Buyer's yard in Cresson, Texas, which delivery shall be made in several installments, with the final delivery of all of the Assets to be completed on or before September 30, 2005. Seller shall commence the installment delivery of the Assets as soon as possible following the execution of this Agreement, in accordance with a schedule to be mutually agreed between Buyer and Seller. Each of the Rigs and Other Assets delivered to Buyer in accordance with the provisions hereof shall be in at least as good condition upon such delivery as the condition that such Assets were in when inspected by Buyer and/or Buyer's representatives prior to the date hereof. Buyer shall accept delivery of any Assets delivered by Seller to Buyer in accordance with the provisions of this Agreement (including, without limitation, such provisions with respect to condition of the Assets and time and place of delivery). 11  8.09 Additional Conditions to Buyer's Obligation to Accept Delivery of Assets and Pay the Purchase Price. The obligations of the Buyer to accept delivery of any Assets and to pay the Purchase Price for any Assets shall be subject to (i) the continued truth and correctness of the Seller's representations, warranties and covenants with respect to such Assets, including, without limitation, representations, warranties and covenants with respect to the condition of such Assets and the absence of liens with respect to such Assets and (ii) the continued absence of any provision of any applicable law or regulation or any judgment, injunction, order or decree that would prohibit the consummation of the transactions contemplated under this Agreement. In addition, the obligation of the Buyer to pay the Second Installment on or before the tenth (10th ) day following the date hereof is subject to the delivery by Seller to the Buyer of the Lien Release Confirmation on or prior to such date. ARTICLE IX CLOSING ------- 9.01 Time of Closing. Subject to the satisfaction by Seller and Buyer of the conditions set forth in Articles VII and VI, respectively, the Closing of the transactions contemplated by this Agreement shall take place on the date hereof (sometimes hereinafter referred to as the "Closing Date"). 9.02 Actions of Seller at the Closing. At the Closing, Seller shall: (a) deliver to Buyer a duly executed Bill of Sale and General Instrument of Assignment of the Assets (the "Bill of Sale") in the form of Exhibit A, dated as of the Closing Date; (b) deliver to Buyer any and all other affidavits, certificates, documents, or agreements required by any federal, state, or local governmental or administrative body or authority necessary to pass title to the Assets to Buyer, together with such operation manuals, engineering drawings and specifications, technical documentation and copies of certificates pertaining to the Assets as Seller may possess; and (c) execute such other documents and instruments, and take such other actions, as may be necessary to carry out Seller's obligations under this Agreement that are required to be performed on or before the Closing Date. 9.03 Actions of Buyer at Closing. At the Closing, Buyer shall deliver to Seller the Deposit, by wire transfer to the account or accounts designated in writing by Seller. 9.04 Passage of Title; Delivery of Assets; Payment of Purchase Price Balance. Title to the Assets will pass from Seller to Buyer at the Closing. The Assets will be delivered by Seller to Buyer in accordance with the provisions Section 8.08 hereof. Payment of the Purchase Price Balance (and the Second Installment, if not previously paid by Buyer to Seller in accordance with the provisions hereof) will be paid by Buyer to Seller on the Final Delivery Date, subject to Section 2.02 hereof. 12  9.05 Further Assurances. Subject to the terms and provisions of this Agreement, from time to time subsequent to the Closing Date, each party agrees to use reasonable efforts to execute and deliver, at the reasonable request of the other party, such additional documents and instruments as may, in the reasonable opinion of the requesting party, be reasonably required to carry out the intents and purposes of this Agreement and the transactions contemplated hereby. ARTICLE X TAXES ----- 10.01 Income Taxes. Seller shall assume responsibility for, and shall bear and pay, all income taxes, and other similar taxes on gross income, net income, or gross receipts (including any applicable interest or penalties) incurred or imposed by any United States or foreign taxing authority with respect to the operation of the Assets prior to Delivery Date. 10.02 Sales Taxes. Buyer shall assume responsibility for, and shall bear and pay, all state and local sales and use taxes (including any applicable interest or penalties) incurred or imposed with respect to the sale by Seller to Buyer of the Assets pursuant to this Agreement. 10.03 Tax Indemnities. Seller agrees to indemnify and hold harmless Buyer and its successors and assigns from and against any and all claims, demands, assessments, deficiencies, liabilities, costs, and expenses (including reasonable attorneys' fees and other costs and expenses of Buyer incident to the defense of same) that are caused by, arise out of, or result from any liability for the payment of federal, state or local taxes (including applicable penalties and interest) attributable to the operation of the Assets prior to the Delivery Date for which the responsibility for payment has been allocated to Seller pursuant to the preceding provisions of this Article X. ARTICLE XI INDEMNIFICATION --------------- 11.02 Indemnification by Seller. In addition to the other indemnities given by Seller to Buyer in this Agreement, Seller shall indemnify and hold harmless Buyer and its successors and assigns from and against any and all claims, demands, losses, damages, liabilities, costs, expenses, and deficiencies (including, without limitation, reasonable attorneys' fees and other costs and expenses of Buyer incident to the defense of any claim that results in litigation, or the settlement of any claim, or the enforcement by Buyer or the provisions of this Section 11.01) caused by, arising out of, or resulting from, and to pay Buyer any sum that Buyer pays or becomes obligated to pay on account of, (a) the ownership of the Assets by Seller prior to the Closing Date, (b) the use and/or operation of the Assets prior to the Delivery Date, (c) any breach or default in the performance by Seller of any covenant or agreement of Seller contained in this Agreement or in any other instrument delivered by or on behalf of Seller pursuant hereto, (d) any breach of a warranty or an inaccurate or erroneous representation made by Seller herein or in any other instrument delivered by or on behalf of Seller pursuant hereto, or (e) any and all actions, suits, proceedings, claims, demands or judgments incident to any of the foregoing. If any person shall assert a claim against Buyer or its affiliates that, if successful, might result in a 13  breach or default by Seller under this Agreement, Buyer shall give Seller prompt written notice thereof, and Seller shall have the right to participate in the defense thereof and to be represented, at the sole expense of Seller, by counsel selected by it. No such claim, demand, or other matter shall be compromised or settled by Seller or Buyer in any manner that might adversely affect the interest of the other party without the prior written consent of such other party (which consent shall not be unreasonably withheld). 11.02 Indemnification by Buyer. In addition to the other indemnities given by Buyer to Seller in this Agreement, Buyer shall indemnify and hold harmless Seller and its successors and assigns from and against any and all claims, demands, losses, damages, liabilities, costs, expenses, and deficiencies (including, without limitation, reasonable attorneys' fees and other costs and expenses of Seller incident to the defense of any claim that results in litigation, or the settlement of any claim, or the enforcement by Seller or the provisions of this Section 11.02) caused by, arising out of, or resulting from, and to pay Seller any sum that Seller pays or becomes obligated to pay on account of, (a) the ownership of the Assets by Buyer from and after the Closing Date, (b) the use and/or operation of the Assets from and after the Delivery Date, (c) any breach or default in the performance by Buyer of any covenant or agreement of Buyer contained in this Agreement or in any other instrument delivered by or on behalf of Buyer pursuant hereto, (d) any breach of a warranty or an inaccurate or erroneous representation made by Buyer herein or in any other instrument delivered by or on behalf of Buyer pursuant hereto, or (e) any and all actions, suits, proceedings, claims, demands or judgments incident to any of the foregoing. If any person shall assert a claim against Seller or its affiliates that, if successful, might result in a breach or default by Buyer under this Agreement, Seller shall give Buyer prompt written notice thereof, and Buyer shall have the right to participate in the defense thereof and to be represented, at the sole expense of Buyer, by counsel selected by it. No such claim, demand, or other matter shall be compromised or settled by Buyer or Seller in any manner that might adversely affect the interest of the other party without the prior written consent of such other party (which consent shall not be unreasonably withheld). ARTICLE XII REMEDIES -------- 12.01 Rescission. This Agreement may be rescinded (in whole or in part) and the transactions consummated hereunder unwound and voided at any time after the Closing and prior to the Final Delivery Date: (a) by mutual written consent of Buyer and Seller; (b) by Buyer, if (i) the Final Delivery Date shall not have occurred by September 30, 2005 (provided that the right to rescind this Agreement under this clause (i) shall not be available to Buyer if Buyer's failure to fulfill any of its obligations under this Agreement or its misrepresentation or breach of warranty hereunder has been the cause thereof); or 14  (ii) there has been a material breach by Seller of any covenant or agreement, or a material inaccuracy of any representation or warranty of Seller, contained in this Agreement which has rendered the satisfaction of any condition to the obligations of Buyer impossible and such breach or inaccuracy has not been cured by Seller within five (5) Business Days after Seller's receipt of notice thereof from Buyer, or waived by Buyer. (c) by Seller, if (i) the Final Delivery Date shall not have occurred by September 30, 2005 (provided that the right to terminate this Agreement under this clause (i) shall not be available to Seller if Seller's failure to fulfill any of its obligations under this Agreement or its misrepresentation or breach of warranty hereunder has been the cause thereof); or (ii) there has been a material breach by Buyer of any covenant or agreement, or a material inaccuracy of any representation or warranty of Buyer, contained in this Agreement which has rendered the satisfaction of any condition to the obligations of Seller impossible and such breach or inaccuracy has not been cured by Buyer within five (5) Business Days after Buyer's receipt of notice thereof from Seller, or waived by Seller. 12.02 Effect of Rescission. In the event of the rescission of this Agreement (or any part hereof) pursuant to Section 12.01 by Buyer or Seller, written notice thereof shall forthwith be given to the other party specifying the provision hereof pursuant to which such rescission is made, and this Agreement shall become void and have no effect to the extent specified in such notice, and, except as otherwise expressly set forth herein (including, without limitation, as provided in Section 3.02), there shall be no further liability hereunder on the part of Buyer or Seller or any of their respective directors, officers, employees, partners, stockholders or representatives; provided that nothing contained in this Section 12.02 shall relieve any party from liability for damages actually incurred (excluding consequential damages) for breach of any covenant or agreement, or for the inaccuracy of any representation or warranty, contained herein. 12.03 Buyer's Right to Take Possession of and Move Assets. In the event that the Final Delivery Date shall not have occurred on or before September 30, 2005, other than solely as a result of any breach by Buyer of any of its obligations hereunder, the Buyer shall have the right, at Buyer's sole option, but at Seller's sole cost and expense, to hire any other person or entity to move and transport any Assets that have not been delivered by Seller to Buyer in accordance with the provisions of this Agreement (hereinafter, the "Remaining Assets"), from the then current location thereof to Buyer's yard in Cresson, Texas, in which case, Buyer and its representatives (inclusive of any person or entity hired by Buyer to move and transport any Remaining Assets) shall have the right to enter onto Seller's premises and any other place where the Remaining Assets are then located, during normal business hours and at any other reasonable time, to inspect and/or take possession of such Remaining Assets for purposes of moving and 15  transporting such Assets to Buyer's yard in Cresson, Texas. Buyer and/or its representatives shall conduct itself on Seller's premises in compliance with all applicable safety rules and regulations. Buyer shall be entitled to deduct from the amount of the Purchase Price Balance owing by Buyer to Seller hereunder, the aggregate amount of all of the costs and expenses incurred by Buyer in connection with the taking possession of and moving of any Remaining Assets from the then current location thereof to the Buyer's yard in Cresson, Texas. 12.04 Specific Performance; Rights Cumulative. The parties hereto shall have the right to bring an action for specific performance of this Agreement. The rights and remedies reserved to the parties hereunder shall be cumulative. ARTICLE XIII MISCELLANEOUS PROVISIONS ------------------------ 13.01 Notices. All notices required or permitted to be given hereunder shall be in writing and shall be delivered personally, or sent by reputable overnight courier, or mailed by certified or registered United States Mail with postage prepaid, or sent by telecopy (provided such telecopy is confirmed by mail in the manner previously described), addressed to the appropriate party at the address for such party shown below or at such other address as such party shall have theretofore designated by written notice delivered to the party giving such notice: If to Seller: ------------- C and L Services, LP 2005 South Main St. Cleburne, Texas 76031 Attn: Cody Jones and Larry Durham Telephone No.: (817) 641-5600 Telecopy No.: (817) 641-6500 If to Buyer: ------------ Union Drilling Texas, LP South Pittsburgh Technology Park 3117 Washington Pike Bridgeville, Pennsylvania 15017 Attn: Christopher Strong Telephone No.: (412) 257-9390 Telecopy No.:(412) 257-9392 Any notice given in accordance herewith shall be deemed to have been given when delivered to the addressee in person or transmitted by telecopy, or one (1) day after such notice has been delivered to a reputable overnight courier, or five (5) days after such notice has been deposited in the United States Mail, as the case may be, Seller or Buyer may change the 16  address to which such communications are to be directed by giving written notice to the other parties in the manner provided in this Section 13.01. 13.02 Entire Agreement. This Agreement, the documents, instruments and agreements to be executed pursuant hereto, the schedules and exhibits hereto, and the documents referred to herein, constitute the entire agreement between the parties hereto pertaining to the subject matter hereof and supersede all prior agreements, understandings, negotiations and discussions, whether oral or written, of the parties pertaining to the subject matter hereof. 13.03 Successors and Assigns. This agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Buyer may assign its rights hereunder only to an Affiliate or subsidiary of Buyer. 13.04 Amendment. This Agreement may be amended only by an instrument in writing executed by all of the parties hereto. 13.05 Waiver. Any of the terms, covenants, representations, warranties or conditions hereof may be waived only by a written instrument executed by or on behalf of the party hereto waiving compliance. The failure of any party at any time or times to require performance of any provision hereof shall in no manner affect the right of such party at a later time to enforce the performance of such provisions. No waiver by any party of any condition, or of any breach of any term, covenant, representation, or warranty contained in this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such condition or breach, or a waiver of any other condition or of any breach of any other term, covenant, representation or warranty. 13.06 Captions. The captions in this Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Agreement. 13.07 No Third-Party Beneficiaries. Nothing in this Agreement shall entitle any party other than Buyer and Seller to any claim, cause of action, remedy, or right of any kind. 13.08 Governing Law. This Agreement shall be governed by the laws of the State of Texas, without regard to conflicts of law principles. 13.09 Severability. If any term or other provision of this Agreement is invalid, illegal, or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any adverse manner to any party. Upon such determination that any term or other provision is invalid, illegal, or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible. 17  13.10 Execution Counterparts. This Agreement may be executed in any number of counterparts, and each such counterpart hereof shall be deemed to be an original instrument, but all such counterparts together shall constitute for all purposes one agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. SELLER: C AND L SERVICES, LP By /s/CODY JONES ---------------------------------------- Name: Cody Jones Title: President BUYER: UNION DRILLING TEXAS, LP, by UNION DRILLING TEXAS GP, LLC, its General Partner By /s/CHRISTOPHER STRONG ---------------------------------------- Christopher Strong, President 18  INDEX TO SCHEDULES AND EXHIBITS Schedule Number Description - ------ ----------- 2.01(a)(i) Rigs (inclusive of related Assets) 2.01(a)(ii) Other Assets Exhibits - -------- Exhibit A Form of Bill of Sale  Schedule 2.01(a)(i) Rigs (inclusive of related Assets) NATIONAL 110 RIG Components and fittings relating to a National 110 drilling rig, including without limitation the following: NATIONAL 110 SINGLE DRUM DRAWWORKS, 1,500-HP, LEBUS Grooved f/1-1/4" Drilling Line, NATIONAL Make-Up & Breakout Catheads, Overrunning Clutch, Air Driller's Console Controls, , PARKERSBURG 6032 60" Hydromatic Brakes MAST/SUBSTRUCTURE 142'H x 21'6"W Cantilever Mast, 1,000,000# SHL, IDEAL 6-Sheave Pin Type Crown Block, (2) Crown Stands less one lower midsection, derrick not coming complete 25'H Box on Box Substructure, including V door and steps MUD PUMPS Gardner Denver PZ-11 Triplex Mud Pump, Forged Steel Fluid End w/Quick Change Valve Cover & Quick Change Cylinder Head Caps, rebuilt with 90 day warranty, includes one set of liners and expendables Gardner Denver PZ-11 Triplex Mud Pump, Forged Steel Fluid End w/Quick Change Valve Cover & Quick Change Cylinder Head Caps, rebuilt with 90 day warranty, includes one set of liners and expendables ROTATING/TRAVELING EQUIPMENT NATIONAL 500-Ton Block/Hook Combination new WELL CONTROL EQUIPMENT HYDRIL GK 12-900 5,000# Annular Blowout Preventer, used by C and L on one well 3" Choke Manifold, Skidded bad condition RIG HOUSES New, 10'W x 40'L Top Doghouse, Skidded, w/Lockers, Used Doghouse  NATIONAL 110 - CONTINUED MUD SYSTEM 1,000-Barrel Mud System, 3-Tank, Mud Agitators in Each Tank, Skidded WATER/FUEL TANK/LUBESTER 10,000-Gallon Fuel Tank, Skidded with lubester and pumps AUXILIARY EQUIPMENT 42"H x 60'L 2-Section Catwalk 4-Sets (8) Pipe Racks (6) 8'W x 20'L Matting Boards  U-15 RIG Components and fittings relating to a U-15 drilling rig, including without limitation the following: MID-CONTINENT U-15 SINGLE DRUM DRAWWORKS, 800-HP, LEBUS Grooved f/1-1/8" Drilling Line, FOSTER Make-Up & Breakout Catheads, Overrunning Clutch, Air Driller's Console Controls, Crown-O-Matic, PARKERSBURG 15" Triple Hydromatic Brake 2-Engine Compound w/Single Pedestal Pump Drive, (1) CAT D-353 Diesel Engines, (2) QUINCY 325 Air Compressors Drawworks MAST/SUBSTRUCTURE LEE C. MOORE 131'H x 18'6"W Cantilever Mast, , 5-Sheave Pin Type Crown Block, Crown Stand 300,000 SHL, Built 1952, poor condition 15'H Box on Box Substructure, V-Door, Steps, Safety Rails, Air Volume Tank, Air Lines with built in parts room and change room MUD PUMPS BOMCO F-800 Triplex Mud Pump, Forged Steel Fluid End w/Quick Change Valve Cover & Quick Change Cylinder Head Caps, Pulsation Dampener, Shear Relief Valve, Charging Pump, Master Skidded, p/b CAT D-398 Diesel Engine BOMCO F-800 Triplex Mud Pump, Forged Steel Fluid End w/Quick Change Valve Cover & Quick Change Cylinder Head Caps, Pulsation Dampener, Shear Relief Valve, Charging Pump, Master Skidded, p/b CAT D-398 Diesel Engine ROTATING/TRAVELING EQUIPMENT 250-Ton Traveling Block/Hook Combination Soya - new 200-Ton Swivel , Skytop 65X National 27-1/2" X 53" Rotary Table  MID-CONTINENT U-15 - continued WELL CONTROL EQUIPMENT Rebuilt KOOMEY 4-Station Closing Unit 3" Choke Manifold, Skidded needs re-built RIG HOUSE 8'W x 30'L Top Doghouse, Skidded, w/Lockers, SATELLITE Automatic Driller, MARTIN DECKER Type-D Weight Indicator, 4-Pin Drilling Recorder instrumentation all new GENERATORS/UTILITY HOUSE Motor Control Center/Receptacle Outlets Voltage Panel f/Trailers All Above Mounted in 10'W x 25'L Utility House, w/Parts Room, Change Room, Fluorescent Lights, Skidded MUD SYSTEM 520-Barrel Mud System, 2-Tank, , Mud Flow Troughs, Internal & External Plumbing, (4) 5" x 6" Centrifugal Pumps p/b 75-HP Electric Motors, Skidded MCM Linear Motion Shale Shaker new Desander w/(2) 10" Cones new Desilter w/(10) 5" Cones new  MID-CONTINENT U-15 - continued HANDLING TOOLS BJ Type C Rotary Tongs, 4" - 10-3/4" INGERSOLL RAND 5,000# Capacity Air Hoist AUXILIARY EQUIPMENT Rotary Hose 12,000' Capacity Wireline Unit 5,000' of 1-1/8" Drilling Line, Spool, Stand 42"H x 40'L Catwalk 2-Sets (4) Pipe Racks Lubester rack with fuel pumps New 3" x 2" water pump with electric motor on substructure 500 BBL Water Tank  BREWSTER N-95 Components and fittings relating to a Brewster N-95 drilling rig, including without limitation the following: SKYTOP BREWSTER N-95 SINGLE DRUM DRAWWORKS, 1,200-HP, LEBUS Grooved f/1-1/4" Drilling Line, FOSTER Make-Up & Breakout Catheads, Overrunning Clutch, Air Driller's Console Controls, , 6032 PARKERSBURG Hydromatic Brake MAST/SUBSTRUCTURE 142'H x 21'6"W Cantilever Mast, 750,000# SHL, 5-Sheave Pin Type Crown Block, (2) Crown Stands 18'H Box on Box Substructure, V-Door, Steps, Safety Rails, Built-In Parts Room, Locker Room, Air Volume Tank, Air Lines, (1) 2" x 3" Centrifugal Circulating Pumps p/b 20-HP Electric Motors, Deadline Anchor, rewired with lights MUD PUMPS T-1300 Ideco (Dresser) Triplex Mud Pump, 1,600-HP, Forged Steel Fluid End w/Quick Change Valve Cover & Quick Change Cylinder Head Caps, with one complete set of expendables T-1300 Ideco (IRI) Triplex Mud Pump, 1,600-HP, Forged Steel Fluid End w/Quick Change Valve Cover & Quick Change Cylinder Head Caps, Shear Relief Valve, with one complete set of expendables ROTATING/TRAVELING EQUIPMENT National 20-1/2" X 53" Rotary Table RIG HOUSE 10'W x 40'L Top Doghouse, Skidded, w/Lockers, 4-Pin Drilling Recorder (Reported to be New) Generator and Utility House - Bare House Only MUD SYSTEM 825-Barrel Mud System, 2-Tank, , Mud Flow Troughs, Internal & , 5" x 6" Centrifugal Pumps p/b Electric Motors  SKYTOP BREWSTER N-95 - CONTINUED WATER/FUEL TANK/LUBESTER Less than 500-Barrel Water Tank, Skidded, with parts room Lubester, rack with fuel pumps AUXILIARY EQUIPMENT 42"H x 48'L Catwalk 3-Sets (6) Pipe Racks New 3" X 2"water pump with electric motor  IDECO 525 Components and fittings relating to an Ideco 525 drilling rig, including without limitation the following: IDECO H525 2-Engine Compound, p/b MAST/SUBSTRUCTURE 131'H x 18'6"W Cantilever Mast, 440,000# SHL, IDEAL 5-Sheave, Crown Stand 12'H x 7'W Box Type Substructure, Steps, Safety Rails, Built-In Parts Room, Locker Room, Air Volume Tank, Air Lines, 3" x 2" Centrifugal Circulating Pump, NATIONAL Deadline Anchor Substructure andderrick newly rewired MUD PUMPS BOMCO F-800 Triplex Mud Pump, 800-HP, Forged Steel Fluid End w/Quick Change Valve Cover & Quick Change Cylinder Head Caps, Pulsation Dampener, Shear Relief Valve, Master Skidded, charge pump BOMCO F-800 Triplex Mud Pump, 800-HP, Forged Steel Fluid End w/Quick Change Valve Cover & Quick Change Cylinder Head Caps, Pulsation Dampener, Shear Relief Valve, Master skidded, charge pump ROTATING/TRAVELING EQUIPMENT 150-Ton Block/Hook Combination 150-Ton Swivel RIG HOUSES 8'W x 30'L Top Doghouse, Skidded, w/Lockers Generator House, w/Parts Room, Change Room, Fluorescent Lights, Heater, Skidded with wiring MUD SYSTEM 600-Barrel Mud System, 2-Tank, Mud Flow Troughs, Internal & External Plumbing  IDECO H525 - CONTINUED OTHER EQUIPMENT 42"H x 48'L 2-Section Catwalk 3-Sets (6) Pipe Racks  Schedule 2.01(a)(ii) Other Assets Other Assets Presently in Possession of Seller - ---------------------------------------------- - -------------------------------------------------------------------------------------------------------------------- UDI UDI PHOTO # ITEM # RIG # DESCRIPTION - -------------------------------------------------------------------------------------------------------------------- Pipe 322 jts, 4 1/2", 16.60 few 20 lb, little S135, 75% yellow, 40% needs reworked, per Jackie Loveless - -------------------------------------------------------------------------------------------------------------------- Pipe at Hospital Yard, 377 jts approx 11,700' 5", 19.5lb, S135 Double White, Cert Paper will be sent, RK Pipe & Supply? - -------------------------------------------------------------------------------------------------------------------- 165-173 108 Misc items, slips, elevators, hoses, valves, hammer unions, fittings, bails 3 1/2" X 11' 8"L, clutch parts, derrick stand, new steel - -------------------------------------------------------------------------------------------------------------------- 228&229 Fuel Trailer, 1958 w/ 1957 Heil, 901530, tank 65,155lb @ 8 lb per gal= 8,144 gallon, 2004-2005 WV sticker, mfg s/n # NB189D, TITLED - -------------------------------------------------------------------------------------------------------------------- 34, 35 18 & 18A Stir Boxes qty 2 - -------------------------------------------------------------------------------------------------------------------- 57 & 58 37 Water Tank / Tool Rm, tank 17' 8"L X 7'H X 10'W, tool house 12'L, porch 9', skid 41'L X 10'H X 10W - -------------------------------------------------------------------------------------------------------------------- 1 1 Sub, front side, not assigned, 6'H X 6'8" X L - -------------------------------------------------------------------------------------------------------------------- 2 1 Sub, rear, not assigned, 6'H X 6'8" X L - -------------------------------------------------------------------------------------------------------------------- 3 1A Sub, front side, not assigned, 6'H X 6'8" X L - -------------------------------------------------------------------------------------------------------------------- 4 1A Sub, rear, not assigned, 6'H X 6'8" X L - -------------------------------------------------------------------------------------------------------------------- 5 1A Sub with Martin Decker anchor, tag not readable, Sheeting shows rust and dozer nicks - -------------------------------------------------------------------------------------------------------------------- 6 2 Primed Skid maybe used for Pump Skid, 7'W X 30'L X 12"H, mud boated bottom - -------------------------------------------------------------------------------------------------------------------- 11 5 Dog House with lights and wiring, skid 10"W X 9' 4"H X 24" 8"L, house 10W X 8'7"H X 13'4"L - -------------------------------------------------------------------------------------------------------------------- 12 5 Dog House inside - -------------------------------------------------------------------------------------------------------------------- 20 9 & 9A Drill Line Spool Holders, Qty 2 - -------------------------------------------------------------------------------------------------------------------- 26 12 Lube Tank - -------------------------------------------------------------------------------------------------------------------- 59 38 & 39 Spools 10" 3000 X 10" 5000 and 13 3/8" 3000 Both ends spacer spools - -------------------------------------------------------------------------------------------------------------------- 60 40 & 41 Pumps # 40 & 41 needs rebuilt Harrisburg 6X8, maybe 75 hp? Pump 42 needs rebuilt Mission 6 X 8 - -------------------------------------------------------------------------------------------------------------------- 61 43 Pump Rebuilt, Mission Magnum 6 X 5, no power - -------------------------------------------------------------------------------------------------------------------- 64 46 Choke Rack 8' X 52" X 12'L - -------------------------------------------------------------------------------------------------------------------- 65 47 Engine Skid primed, for PZ11 ? 64"W X 13'L - -------------------------------------------------------------------------------------------------------------------- 66 48 Hand Rails and Misc steps in weeds - -------------------------------------------------------------------------------------------------------------------- 67 49 Accumulator Oil Tank, tank 16"W X 74"L X 4'H, skid 81" X 106"L - -------------------------------------------------------------------------------------------------------------------- 70 52 Hose Kelley, 3 1/2" Gr D, 5,000 ends, 10,000 rubber - -------------------------------------------------------------------------------------------------------------------- 71 53 Matt Board 9'6" X 8' X 9"T - -------------------------------------------------------------------------------------------------------------------- 72 54 Skid, 64"W X 16'L X 10"H, engine area 86"L X 4'W - --------------------------------------------------------------------------------------------------------------------  - -------------------------------------------------------------------------------------------------------------------- UDI UDI PHOTO # ITEM # RIG # DESCRIPTION - -------------------------------------------------------------------------------------------------------------------- 73 55 Desilter yellow, Eq# 14-005 - -------------------------------------------------------------------------------------------------------------------- 142 86 Rack for Mobile Homes, qty 4, 4' X 4' 7" X 55"T marked ABCD. - -------------------------------------------------------------------------------------------------------------------- 143 87 Koomey 80 Accumulator BWB040-11B, s/n 3651, mfg 6/1982 - -------------------------------------------------------------------------------------------------------------------- 144 88 Wooley Tongs Type B - -------------------------------------------------------------------------------------------------------------------- 145 88B Tong Heads - -------------------------------------------------------------------------------------------------------------------- 146 89 Junk Tub yellow - -------------------------------------------------------------------------------------------------------------------- 147 90 Junk Tub - -------------------------------------------------------------------------------------------------------------------- 148 91 Pump Liners 6" - -------------------------------------------------------------------------------------------------------------------- 160 102 Wire Line Unit Poor Condition - -------------------------------------------------------------------------------------------------------------------- 162 105 Pipe Racks 5 pcs, one is under Rig 6 - -------------------------------------------------------------------------------------------------------------------- 163 106 Pipe Rack - -------------------------------------------------------------------------------------------------------------------- 174 109 Pipe Tub - -------------------------------------------------------------------------------------------------------------------- 175 110 Pipe Tub square frame - -------------------------------------------------------------------------------------------------------------------- 176 111 House tool & lube room, bent skid, with misc parts, ND24287 welded, 40' 5"L X 107"H X 7' 10"W - -------------------------------------------------------------------------------------------------------------------- 177 112 Fuel Tank goes on top of 111, welded 28404, stamped ND28438, tank 35' 2"L X 4'H X 7' 4"W, skid 38' 7"L X 49"H X 7' 4"W - -------------------------------------------------------------------------------------------------------------------- 178 113 Pump National K500-A, 24'L X 8' 5"W X 128"T, 3' 7" wheel 16 groove - -------------------------------------------------------------------------------------------------------------------- 179 114 Engines twin 6-71 Detroit w/ gear box 5118275, Ratio 1:77 to 1, s/n HD9434, 4' X 8' skid - -------------------------------------------------------------------------------------------------------------------- 180 115 Cat D353? W/ air clutch, 4' 1"W X 14' 6"L Core use only?? - -------------------------------------------------------------------------------------------------------------------- 181 116 Pump National K500-A, 25' 6"'L X 7' 8"W X 9'H, w/o damper, 3' 7" wheel 16 groove - -------------------------------------------------------------------------------------------------------------------- 182 116A Hydril Damper - -------------------------------------------------------------------------------------------------------------------- 183 117 Pump, Oilwell 214, s/n 10940, 7' 8"W X 25' 3"L X 98"H - -------------------------------------------------------------------------------------------------------------------- 184 118 Tool House w/ flaps, HSE 7' 6"W X 14'L, skid 93"W X 97"H, flaps 2' X 2'6" - -------------------------------------------------------------------------------------------------------------------- 185 119 Tool House w/ Quincy A/C 325, s/n ###-###-####, skid 93W X 108"H X 36' 2"L, skid 40'L - -------------------------------------------------------------------------------------------------------------------- 186 119A A/C - -------------------------------------------------------------------------------------------------------------------- 187 120 Pipe Tub 8'W X 36'L - -------------------------------------------------------------------------------------------------------------------- 188 121 Pipe Tub made of D.P.7' 7" X 35' 2"L - -------------------------------------------------------------------------------------------------------------------- 189 122 Val-Con, model 30-1P30-U1R-1-1, s/n 8061, 5' 6"W X 8'L X 7'H with control box - -------------------------------------------------------------------------------------------------------------------- 190 123 Hydromatic, s/n 4-23, rotor cap casting PC56046L, bearing end caps missing on both ends - -------------------------------------------------------------------------------------------------------------------- 191 124 Spacer Spool 10" X 3000 - -------------------------------------------------------------------------------------------------------------------- 192 125 Mud Cross 13" - -------------------------------------------------------------------------------------------------------------------- 193 126 Change-over 3000 X 5000 - -------------------------------------------------------------------------------------------------------------------- 194 127 Air Bowl 10" X 3000 - -------------------------------------------------------------------------------------------------------------------- 195 128 Cathead Foster Model 16 LB A, s/n 3024 - --------------------------------------------------------------------------------------------------------------------  - -------------------------------------------------------------------------------------------------------------------- UDI UDI PHOTO # ITEM # RIG # DESCRIPTION - -------------------------------------------------------------------------------------------------------------------- 196 129 Stir gear box Chemineer, 15hp, model 4TA-15, s/n 1-95374-18 - -------------------------------------------------------------------------------------------------------------------- 197 129A Stir gear box Chemineer, s/n ? - -------------------------------------------------------------------------------------------------------------------- 198 130 Matthey Wireline Unit, model 15 HRC, s/n 2328 - -------------------------------------------------------------------------------------------------------------------- 199 131 Gen Skid House framing, 9' 10"W X 134"H X 26' 9"L - -------------------------------------------------------------------------------------------------------------------- 200 132 Pipe Rack - -------------------------------------------------------------------------------------------------------------------- 201 133 Pipe Rack - -------------------------------------------------------------------------------------------------------------------- 202 134&135 Pipe Rack - -------------------------------------------------------------------------------------------------------------------- 203 136 Pipe Rack - -------------------------------------------------------------------------------------------------------------------- 204 137 Pipe Rack - -------------------------------------------------------------------------------------------------------------------- 205 138 Matt Board, qty 4 pcs, 10' X 10' X 7" - -------------------------------------------------------------------------------------------------------------------- 206 139 Load Ramp, 8' 6"W X 8' 6"H X 29' 6"L - -------------------------------------------------------------------------------------------------------------------- 207 140 Misc items, frogs, guards, mud pump parts, table bushing, rat hole digger, hose - -------------------------------------------------------------------------------------------------------------------- 250 Radiators new from Fuzzy Rad Co. Borger Tx, model FZ43-2401, s/n 1356 & 1357, dated 7-21-05, PO S&W - -------------------------------------------------------------------------------------------------------------------- 255 Kelley, with Varco, Cody says inspected, 40' 6" overall, 4 3/4 hex, - -------------------------------------------------------------------------------------------------------------------- 98 Rig 3 Drill Line being installed, no photo - -------------------------------------------------------------------------------------------------------------------- 110 & 111 71 Rig 3 Dog House 7'6"W X 8'3"H X 20"L house, 26'10" skid, hand rail may not be OSHA, step maybe light - -------------------------------------------------------------------------------------------------------------------- 118 & 119 77 Rig 3 Water Tank, open top, inside coated tank 48'L X 8'H X 10'W, skid 12'L, porch 9', skid 51'L X 9'4"H X 10W - -------------------------------------------------------------------------------------------------------------------- 120 & 121 78 Rig 3 Gen House, 134"H X 26'8"L X 10W, will have 2 D353 Cats w/ 325 gens, from S&W OK City - -------------------------------------------------------------------------------------------------------------------- 92 & 93 66 Rig 3 Pit, no I Beam skid, slant floor, floor replated, pit 9' 2"W X 64"H X 34'6"L, 9'4" porch, 46' overall, 2 yr. Life? - -------------------------------------------------------------------------------------------------------------------- 92A 66A Rig 3 Welded beams line up under pumps. Could flex and bend. - -------------------------------------------------------------------------------------------------------------------- 94 & 95 66B Rig 3 Pumps, MCM, s/n 8900 & 9899, 5X6, 75 hp, plumbing & wiring - -------------------------------------------------------------------------------------------------------------------- 99 & 100 68A Rig 3 Cat D 398 no s/n's, S&W Okla City, air clutch 28CB525 - -------------------------------------------------------------------------------------------------------------------- 18 7 Rig 3 Steps, 22'H X 43"W, outside measurement - -------------------------------------------------------------------------------------------------------------------- 29 15 Rig 3 Lot Hose & Belts, 2 of 3.5 NRP 5000 psi GR D 10000, 2 of R8VK2650 12 groove, 2 of R8V2650 - -------------------------------------------------------------------------------------------------------------------- 51 31 Rig 3 Choke Manifold Main Valve 697-333-10-1, 3000lb, need 2 more valves, skid 7'W X 11' 8"L - -------------------------------------------------------------------------------------------------------------------- 53 33 Rig 3 Steps, & V door assm, 88"W X 25' 8"L, steps not complete & heavy enough quality, hand rail bent - -------------------------------------------------------------------------------------------------------------------- 55 35 Rig 3 MCM Pump, New, s/n 9885, 2X3, series 250, 20 hp, 3 phase, O Drill Co. - -------------------------------------------------------------------------------------------------------------------- 56 36 Rig 3 MCM Pump, New, s/n 9875, 2X3, series 250, 20 hp, 3 phase, O Drill Co. - -------------------------------------------------------------------------------------------------------------------- 62 44 Rig 3 Air Winch, GFS1029991R, AT04 0046600-6, OilWorks Odessa - -------------------------------------------------------------------------------------------------------------------- 63 45 Rig 3 Desander, cones inside, MCM Odrill - -------------------------------------------------------------------------------------------------------------------- 74 56 Rig 3 Desilter New - -------------------------------------------------------------------------------------------------------------------- 91 65 Rig 3 Pit, no I Beam skid, slant floor, Pitted Bad on inside, pit 9' 2"W X - --------------------------------------------------------------------------------------------------------------------  - -------------------------------------------------------------------------------------------------------------------- UDI UDI PHOTO # ITEM # RIG # DESCRIPTION - -------------------------------------------------------------------------------------------------------------------- 6'H X 35'L, 10' porch, 46' overall, 2 yr. Life? - -------------------------------------------------------------------------------------------------------------------- 96 67 Rig 3 Pump, Bomco F800, s/n ###-###-####, dated 2005-1, - -------------------------------------------------------------------------------------------------------------------- 97 67A Rig 3 MCM Charge Pump 6X8 s/n 9938, washer pump MCM 3 hp 1X1.5 s/n 2034, w/ damper, Mayfield says change skid - -------------------------------------------------------------------------------------------------------------------- 98 68 Rig 3 Pump, Bomco F800, s/n A14-2005, date 05-01, MCM charge pump 6X8 s/n 9970 washer pump 1X1.5 MCM 3 hp - -------------------------------------------------------------------------------------------------------------------- 101 69 Rig 3 Sub & 3 sets of steps - -------------------------------------------------------------------------------------------------------------------- 102 69A Rig 3 Sub 27'W X 48' 3"L X 15' 4"H - -------------------------------------------------------------------------------------------------------------------- 103 69B Rig 3 Sub tool rooms - -------------------------------------------------------------------------------------------------------------------- 104 69C Rig 3 Sub MCM Wash Down 2X3, s/n 9894, 20hp - -------------------------------------------------------------------------------------------------------------------- 105 69D Rig 3 Change House - -------------------------------------------------------------------------------------------------------------------- 106 69E Rig 3 Tool House, Statel-Lite ###-###-#### partly wired - -------------------------------------------------------------------------------------------------------------------- 107 70 Rig 3 Draw Works U-15, s/n 285 - -------------------------------------------------------------------------------------------------------------------- 108 70A Rig 3 Compound w/o engines, will have two Cat D353's - -------------------------------------------------------------------------------------------------------------------- 109 70B Rig 3 New Valves - -------------------------------------------------------------------------------------------------------------------- 113 72 Rig 3 Cat Walk 2 piece 48W X 42"H X 24'L - -------------------------------------------------------------------------------------------------------------------- 114 73 Rig 3 Sowa Blocks - -------------------------------------------------------------------------------------------------------------------- 115 74 Rig 3 Mast with lights - -------------------------------------------------------------------------------------------------------------------- 116 75 Rig 3 Drill Line Spool Holder - -------------------------------------------------------------------------------------------------------------------- 117 76 Rig 3 Drill Line Spool Holder Blue - -------------------------------------------------------------------------------------------------------------------- 122 Rig 3 View - -------------------------------------------------------------------------------------------------------------------- 154 97 Rig 3 Engine Cat D398 for F800 Pump, no tag or s/n # - -------------------------------------------------------------------------------------------------------------------- 157 101 Rig 3 Table, National C-205, 20 1/2" with bushing & double sprocket, - -------------------------------------------------------------------------------------------------------------------- 30, 31 16 Rig 4 Mud Pit tank 8'H X 10W X 31'11"L, Skid 9"H X 10W X 42'L w/ 8' Porch, slant floor rusted, gates stuck, walk one side - -------------------------------------------------------------------------------------------------------------------- 32, 33 17 Rig 4 Mud Pit tank 8'H X 10W X 40L", Skid 9"H X 10W X 42'6"L w/ 8' V Bottom no walkway - -------------------------------------------------------------------------------------------------------------------- 36, 37 19 Rig 4 Mud Pit V Bottom, Tank 79"H X 18" wall on slant X length ? Skid 104"H X 10'W, Porch 10' X 10' work in process - -------------------------------------------------------------------------------------------------------------------- 39, 40 Rig 4 Total Rig Scene - -------------------------------------------------------------------------------------------------------------------- 7 3 Rig 4 Panels in a Skidded Rack, 23 Pcs, Rack is 5"6"H X 7' 10"W X 30' 4"L - -------------------------------------------------------------------------------------------------------------------- 8 4 Rig 4 Fuel Tank, total skid = 10'W X 9' 3"H X 44' 6"L, tank = 10'W X 8'H X L - -------------------------------------------------------------------------------------------------------------------- 9 4 Rig 4 Fuel Tank double B/S #3 pumps & water separator, rusted cond., Square D starters size 0&1, type S, class 8536 - -------------------------------------------------------------------------------------------------------------------- 10 4 Rig 4 Fuel Tank, rear with lube storage - -------------------------------------------------------------------------------------------------------------------- 21 10 Rig 4 Stair Landing, 6' X 6' X 12H - -------------------------------------------------------------------------------------------------------------------- 22 10A Rig 4 Stair Landing, 6' X 6' X 12' 10"H - -------------------------------------------------------------------------------------------------------------------- 23 10B Rig 4 Stair Landing, 5'8" X 5' X 9' - -------------------------------------------------------------------------------------------------------------------- 24 11 Rig 4 Matting Board Frames, bad wood, 8'W X 15' 2"L X7"H, 9 Pcs. 11 thru 11, A,B,C,D,E,F,G,H. - --------------------------------------------------------------------------------------------------------------------  - -------------------------------------------------------------------------------------------------------------------- UDI UDI PHOTO # ITEM # RIG # DESCRIPTION - -------------------------------------------------------------------------------------------------------------------- 25 11 Rig 4 Matting Board Frames, bad wood, 6'W X 11'1"L X7"H, 2 Pcs. - -------------------------------------------------------------------------------------------------------------------- 27 13 Rig 4 Derrick Part - -------------------------------------------------------------------------------------------------------------------- 28 14 Rig 4 Slide - -------------------------------------------------------------------------------------------------------------------- 38 19A Rig 4 middle beam rusted, replated one side, floor being replated * this may need done on #16 - -------------------------------------------------------------------------------------------------------------------- 41 21 Rig 4 Sub Structure 10 Pcs, s/n 781027, 600,000 58'10"L X 28'W X 25'T, no floor in lower boxes, use matt boards? - -------------------------------------------------------------------------------------------------------------------- 42 22 Rig 4 Dog House half round top, to high to measure, appx 32' skid, 30' house - -------------------------------------------------------------------------------------------------------------------- 43 23 Rig 4 Dog House flat top, to high to measure, appx 32' skid, 30' house - -------------------------------------------------------------------------------------------------------------------- 44 24 Rig 4 Rotary Clutch Beam - -------------------------------------------------------------------------------------------------------------------- 45 25 Rig 4 Misc Guards - -------------------------------------------------------------------------------------------------------------------- 46 26 Rig 4 Martin Decker Anchor in Sub #'s as follows 121, 2501, 100,000 150,000 3-973-435 - -------------------------------------------------------------------------------------------------------------------- 47 27 Rig 4 Tool Storage Left box Sub - -------------------------------------------------------------------------------------------------------------------- 48 28 Rig 4 Tool Storage Right box Sub - -------------------------------------------------------------------------------------------------------------------- 49 29 Rig 4 Gardener Denver PZ11, w/ motor mount, stamped 743851, 8'W X 18'8"L?? 202PZL029, 18 316841, 94, API 7 - -------------------------------------------------------------------------------------------------------------------- 50 30 Rig 4 Gardener Denver PZ11, w/o motor mount, no s/n # - -------------------------------------------------------------------------------------------------------------------- 150 93 Rig 4 Hydromatic s/n 49105? Stamped 30325001, casting PC56090-1R - -------------------------------------------------------------------------------------------------------------------- 152 95 Rig 4 Hydril BOP, GK 12-900, the Double is still at Houston - -------------------------------------------------------------------------------------------------------------------- 153 96 Rig 4 Block and Hook, National 500 ton, 650G500, s/n 4795N, Hook s/n 4795N, 1 3/8?, looks new, loch assm rusted stuck - -------------------------------------------------------------------------------------------------------------------- 156 100 Rig 4 V-Door and steps USED bowed 5' X 31' 1" - -------------------------------------------------------------------------------------------------------------------- 161 104 Rig 4 Center Cat Walk 24' 1" X 4'W X 42"T - -------------------------------------------------------------------------------------------------------------------- 164 107 Rig 4 Raise Line 1 1/2"? - -------------------------------------------------------------------------------------------------------------------- 68 50 Rig 4 or 6 Raise Line - -------------------------------------------------------------------------------------------------------------------- 123 & 124 79 Rig 5 Dog House, crimped wall, hse 92"W X 36'L w/ 5' porch, skid skid 92"W X 42' 1"L X 128 "H, new elect started - -------------------------------------------------------------------------------------------------------------------- 77 & 78 59 Rig 5 Pit, V bottom, tank 46'L X 90"H X 10W, skid 49" X 9'9"H X 10W, expanded metal 2/3 walkway, hand rails - -------------------------------------------------------------------------------------------------------------------- 81A 61A Rig 5 Pumps from Bridges Equip, 6 mo warranty, not rebuilt, Mechanic checked out - -------------------------------------------------------------------------------------------------------------------- 83 & 84 63 Rig 5 Sub 4 pc. Box on box 26' 2"W X 40' 2"L X 19'H with 2 locker areas, M-D anchor (sensor missing), photo85,86,87 - -------------------------------------------------------------------------------------------------------------------- 85 & 86 63 Rig 5 Tool Room and Parts - -------------------------------------------------------------------------------------------------------------------- 88 & 89 64 Rig 5 Skytop N95, s/n 95-0001 on control panel, Foster 37AH67S, brake bands not centered on rims, - -------------------------------------------------------------------------------------------------------------------- 69 51 Rig 5 Rotary Table, C-Emsco T2750, s/n 3079, 27 1/2" X 54" w/ bushings & 26 tooth sprocket, don't know if rebuilt - -------------------------------------------------------------------------------------------------------------------- 75 57 Rig 5 Valves & shed top - -------------------------------------------------------------------------------------------------------------------- 76 58 & 58A Rig 5 Skid with New Pumps, MCM 5" X 6",  ###-###-####-2, s/n 9898 & 9897, 75 hp, 3 phase, skid 97"W X 160"L - -------------------------------------------------------------------------------------------------------------------- 81 61 Rig 5 Mud Pump, Ideco Dresser T1300, s/n 160, skid 6'W X 19'1"L, no - --------------------------------------------------------------------------------------------------------------------  - -------------------------------------------------------------------------------------------------------------------- UDI UDI PHOTO # ITEM # RIG # DESCRIPTION - -------------------------------------------------------------------------------------------------------------------- bull wheel, damper, 6" liner on skid - -------------------------------------------------------------------------------------------------------------------- 82 62 Rig 5 Mud Pump, Ideco IRI, T1300, s/n blank, skid 9'W X 19'1"L, no bull wheel, damper, No oil check plug possible water - -------------------------------------------------------------------------------------------------------------------- 87 63 Rig 5 Martin Decker Anchor in Sub w/o sensor - -------------------------------------------------------------------------------------------------------------------- 90 64A Rig 5 cracks and holes on control panel, rusted gauges, rebuilt by Bob Haulk - -------------------------------------------------------------------------------------------------------------------- 151 94 Rig 5 Hydromatic s/n 494761? Maybe 19613X, casting PC56090-1L - -------------------------------------------------------------------------------------------------------------------- 79 & 80 60 Rig 5 Pit, V bottom, skid welded, tank 40'L X 8'H X 10'W, skid 43' 8"L X 9'9"H X 10'W, bar grate walk - -------------------------------------------------------------------------------------------------------------------- 125 & 126 80 Rig 6 Will have Ideco 525 D/W, Sub enclosed wired & plumbed each box 7'W X 47' 8"L X 11'H, 25 total width, shows dirt or rust in some paint - -------------------------------------------------------------------------------------------------------------------- 127 & 128 80A Rig 6 Sub w/ Parts houses built in, elect & plumbing started - -------------------------------------------------------------------------------------------------------------------- 130A 81A Rig 6 Mast on racks w/o support show sag or bow ?? - -------------------------------------------------------------------------------------------------------------------- 158 & 159 103 Rig 6 Compound w/o engines, - -------------------------------------------------------------------------------------------------------------------- 13 6 Rig 6 Gen House some lights and wiring, 3 rooms - -------------------------------------------------------------------------------------------------------------------- 14 6 Rig 6 Gen House change room with lockers w/o doors - -------------------------------------------------------------------------------------------------------------------- 15 6 Rig 6 Gen House tool room with work bench and storage, electric switch & breaker boxes - -------------------------------------------------------------------------------------------------------------------- 16 6 Rig 6 Gen House, Gen Area - -------------------------------------------------------------------------------------------------------------------- 17 6 Rig 6 Gen House rear view with connections - -------------------------------------------------------------------------------------------------------------------- 129 80B Rig 6 Light - -------------------------------------------------------------------------------------------------------------------- 130 81 Rig 6 Mast shows (MFG 11Drilling Co welded) s/n T1710, Cody says 131'H X 18' 6" leg spread, - -------------------------------------------------------------------------------------------------------------------- 132 81B Rig 6 Mast Pin area on Thursday, being replaced on Friday - -------------------------------------------------------------------------------------------------------------------- 133 81C Rig 6 Mast painted area makes it look bowed, some new lighting - -------------------------------------------------------------------------------------------------------------------- 134 81D Rig 6 Mast Crown less sheves, fast line has side play - -------------------------------------------------------------------------------------------------------------------- 135 82 Rig 6 Pump, F800 s/n A05-05, Dated 05-03, D398 at TPS Company, skid 8'W engine area X 13'W X 30' 4"L - -------------------------------------------------------------------------------------------------------------------- 136 82A Rig 6 Charge Pump MCM 6X8", s/n 9971, no washer pump yet, - -------------------------------------------------------------------------------------------------------------------- 137 83 Rig 6 Pump, F800 s/n A02-2005, Dated 2005-1, D398 at TPS Company, skid 8'W engine area X 13'W X 30' 4"L - -------------------------------------------------------------------------------------------------------------------- 138 83A Rig 6 Charge Pump MCM 6X8", s/n 9886, no washer pump yet, - -------------------------------------------------------------------------------------------------------------------- 155 99 Rig 6 V-Door and steps NEW 88" X 20' 2" - -------------------------------------------------------------------------------------------------------------------- 54 34 Rig 6 Derrick Stand, bad steps, 8' X 6'7" X ?? High, to high to measure - -------------------------------------------------------------------------------------------------------------------- 112 71A Rig3 Step Photo - -------------------------------------------------------------------------------------------------------------------- 218 Rig 4 Mast Stamped 1N276, 1P276, 2N276 on flats, 142' to floor, 8 X 8 X 1 1/8", million plus, section missing $53,000. Cliff Cunningham - -------------------------------------------------------------------------------------------------------------------- 218A Had Mast for 10 years. Had 110 DW since 1988 or 1989, has electro brake - -------------------------------------------------------------------------------------------------------------------- 222 Rig 5 Mast, no stamping numbers found, approximately 131' ? - -------------------------------------------------------------------------------------------------------------------- 230 Rig 3 Mast, measured from the ground approx 128' ?? Might be 131' w/ beef-up kit ?? Stamped s/n T2198 ?? - --------------------------------------------------------------------------------------------------------------------  - -------------------------------------------------------------------------------------------------------------------- UDI UDI PHOTO # ITEM # RIG # DESCRIPTION - -------------------------------------------------------------------------------------------------------------------- 239 Rig 6 Mast, measured 129', Crown Sheves gone, at Cliff Cunninghams - -------------------------------------------------------------------------------------------------------------------- Bob Hawk rebuilder of N-95 - -------------------------------------------------------------------------------------------------------------------- Cliff Cunningham Mast, Block and Hook Sales, also Rig4, 940 ###-###-#### - -------------------------------------------------------------------------------------------------------------------- S & W Power Systems, Oklahoma City, Engines - -------------------------------------------------------------------------------------------------------------------- Inland Machine rebuilding Ideco 525 - -------------------------------------------------------------------------------------------------------------------- Santo's is Mast repair Contractor - -------------------------------------------------------------------------------------------------------------------- Cody says D398 s/n's are 66B8327 and 35Z00744 ?? - -------------------------------------------------------------------------------------------------------------------- Various new Steps - -------------------------------------------------------------------------------------------------------------------- Six(6)Float Trailers - -------------------------------------------------------------------------------------------------------------------- Miscellaneous new steel building material - -------------------------------------------------------------------------------------------------------------------- Raising lines for National 110 - -------------------------------------------------------------------------------------------------------------------- All items relating to rotary drilling rigs and/or rotary drilling rig operations that are currently being held at the primary yard of C and L Services, LP located in Cleburne, Texas, as well as all items associated with rotary drilling rigs currently being held at the secondary yard of C and L Services, LP known as the Hospital Yard located in Cleburne, Texas - -------------------------------------------------------------------------------------------------------------------- Other Assets Pending Delivery to C and L Facility (as of August 11, 2005) - ----------------------------------------------------------------------- o Drawworks for Ideco 525 in Oklahoma being rebuilt at Inland o Two Cat 398 Engines, Parts paid for in Houston - Noted for Rig #6 pumps o Three Engine Compound, in Kilgore, TX - Noted for Rig #4 o Skytop 9SX Swivel, Rebuilt in OKC - Noted for Rig #4 o Oilwell 27.5" Rotary Table, in Houston - Noted for Rig #4 o Tool House in Witcha Falls - Unassigned o Cont. Emsco Block and Hook, in Odessa - Noted for Rig #5 o 13 5/8" Double Ram BOP, in Houston - Noted for Rig #4 o 5 1/4" Kelly with Varco bushings, rebuilt, in Kilgore - Noted for Rig #4 o One Cat 353 Engine - Noted for Rig #3 o Two new pit agitators - Unassigned o New Hydril Pump seat and liner puller - unassigned o Two Kato 300kw Generator sets with D353 Cat engines, at S&W in OKC - Noted for Rig #3 o Crown Section for Ideco 525 Derrick o Quincy 390 air compressor at Oilworks shop for Rig #3  Exhibit A Form of Bill of Sale GENERAL BILL OF SALE AND ASSIGNMENT ----------------------------------- GENERAL BILL OF SALE AND ASSIGNMENT, effective as of 12:01 a.m. on August 12, 2005, from C AND L SERVICES, LP, a Texas limited partnership ("Seller"), to UNION DRILLING TEXAS, LP, a Texas limited partnership ("Buyer"). RECITALS -------- 1. Seller is executing and delivering this General Bill of Sale and Assignment to Buyer for the purpose of selling, assigning, transferring, and delivering to, and vesting in, the Buyer all right, title and interest of the Seller in and to the "Assets" (as defined in the Asset Purchase Agreement dated as of the date hereof, by and between Seller and Buyer). AGREEMENT --------- Section 1. In consideration of the premises and of other good and valuable consideration, receipt of which is hereby acknowledged, Seller by these presents does sell, assign, transfer, and deliver to, and vest in Buyer, its successors and assigns forever, good and marketable title and all of Seller's right, title, and interest, legal and equitable, in and to each and every one of the Assets. TO HAVE AND TO HOLD all of the Assets unto Buyer, its successors and assigns forever; and Seller does for itself, and its successors and assigns, covenant and agree with Buyer to WARRANT AND DEFEND the title of the aforesaid Assets against all and every person and persons whomsoever. Section 2. Seller hereby constitutes and appoints Buyer, its successors and assigns the true and lawful attorney and attorneys of Seller with full power of substitution in its  name and stead, but on behalf and for the benefit of Buyer, its successors and assigns, to demand and receive any and all of the Assets sold, transferred and assigned to Buyer this instrument and to give receipts and releases for and in respect of the same or any part thereof, to endorse any claim or right of any kind in respect thereof and to do all acts and things in relation to the Assets, which Buyer, its successors and assigns may deem desirable, Seller hereby declaring that the foregoing powers are coupled with an interest and are not revocable and shall not be revoked by Seller or its successors or assigns for any reason whatsoever. Section 3. Seller, for itself, its successors and assigns, hereby covenants and agrees that, at any time and from time to time forthwith upon the written request of Buyer, Seller will, at its expense, do, execute, acknowledge, and deliver or cause to be done, executed, acknowledged, or delivered, all and every such further acts, deeds, assignments, transfers, conveyances, powers of attorney, and assurances as may be reasonably required by Buyer in order to sell, assign, transfer, and convey to, and vest in, Buyer, its successors and assigns, or to aid and assist Buyer in reducing to possession and use any or all of the Assets assigned to Buyer. Section 4. Nothing herein expressed or implied is intended or shall be construed to confer upon or give to any person or entity, other than Seller and Buyer, and their respective successors and assigns, any rights or remedies by reason of this General Bill of Sale and Assignment. Section 5. This General Bill of Sale and Assignment is executed by, and shall be binding upon, Seller, its successors and assigns, for the uses and purposes above set forth and referred to, as of the effective date thereof.  IN WITNESS WHEREOF, Seller has caused this General Bill of Sale and Assignment to be signed as of the date set forth above. C AND L SERVICES, LP By: /s/CODY JONES --------------------------------- Name: Cody Jones Title: President