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Exhibit 10.17    
    


 
 

(Taylor Logo)  
  



	

1045 Keystone Avenue	
 	

Phone:	

(918) 266-7301
	Tulsa Port of Catoosa	 	Fax:	(918) 266-5223
	Catoosa, OK 74015	 	sales@taylorrigs.com




C500 WORKOVER UNIT PACKAGE  


Contract & Acceptance Agreement: CP-05-023
  Prepared for  


Mr. Dub Harrison

Basic Energy Service

P.O. Box 10460

Midland, TX 79702  


DATE: May 17, 2005  







 
  
 

    TABLE OF CONTENTS    
    



	SECTION 1—GENERAL DESCRIPTION	 	p. 3 SECTION 2—
	ENVIRONMENTAL PARAMETERS	 	p. 4 SECTION 3—
	TECHNICAL SPECIFICATIONS	 	p. 5 SECTION 4—
	ACCESSORIES	 	p. 12 SECTION 5—
	RIG OPTIONS	 	p. 13 SECTION 6—
	RIG SPARES	 	p. 14 SECTION 7—
	DELIVERY & COMMISSIONING	 	p. 15 SECTION 8—
	DOCUMENTATION	 	p. 16 SECTION 9—
	WARRANTY	 	p. 17 SECTION 10
	—PRICING	 	p. 19 SECTION 11
	—TERMS & CONDITIONS	 	p. 20 SECTION 12
	—RESALE PARTS AGREEMENT	 	p. 22 SECTION 13
	—CONTRACT ACCEPTANCE	 	p. 23 APPENDIX A
	—PAYMENT & DELIVERY SCHEDULE	 	p. 24




2







 

SECTION 1—GENERAL DESCRIPTION  


The Taylor C500 Workover Unit is a heavy-duty service package mounted on a 5-axle off-road carrier. The unit is comprised of a carrier, power package, rawworks, and mast. The
package is for highly mobile land operations. 


The
rig carrier is a proprietary design manufactured by Taylor Rigs. The carrier has 5 axles with 4 driving hubs. Axle location is specifically engineered for optimum weight distribution, minimal
turning radius, and heavy-duty off-road operations. 


The
power package is comprised of (1) one 475 hp diesel engine with automatic transmission. The engine and transmission combination has been reviewed by the component manufacturers for correct
application and installation. 


The
unit includes a DD260 drawworks package. The innovative package is lightweight and provides exceptional strength and performance. The drawworks has full disc brakes, heavy-duty right angle box,
and full guards and covers. The drawworks is designed for ease of service and maintenance. Taylor utilizes "off the shelf" bearings and seals for reduced cost and ease of availability, and simplified
one-step brake adjustment. Drawworks features remote bearing lubrication for fast service and outboard clutches for ease of accessibility and increased cooling performance. 


The
104 ft. (31.7m), 240,000lb (109 MT) mast is a telescoping design, manufactured in accordance with API and Taylor Rigs strict quality control processes. The mast includes an automatic racking board
and telescopes hydraulically. 


The
rig will be supplied with all equipment listed in this contract and designed to operate in the environment described in Section 2 of this contract. 



IMPORTANT NOTE: All Taylor contracts are prepared based on information provided by the customer, broker, or other source. Unless specified, this contract may not contain all
equipment or fools required to complete a specific job.


Due
to the complex and varied configurations, Taylor Rigs, LLC equipment omitted from this contract. 


3







 

SECTION 2—ENVIRONMENTAL PARAMETERS  


Equipment listed in this contract will meet or exceed the following operating parameters: 



	2.1 TEMPERATURE	 	 
	 	
 Minimum Ambient Operating	
 	

-20 C (-4 F)
	 	Maximum Ambient Operating	 	46 C (115 F)
	

2.2 HUMIDITY	
 	

 
	 	
 Max Relative	
 	

<90%
	

2.3 VIBRATION I SHOCK	
 	

 
	 	
 Maximum Shock Load	
 	

1g
	

2.4 LOCATION	
 	

 
	 	
 Location	
 	

Inland
	 	Conditions	 	Non-Desert / Non-Arctic




4







 

SECTION 3—BASE RIG  


3.1   DD260 DRAWWORKS:


	3.1.1
	OVERALL 



Double
Drum Drawworks, with a 41,500-lb. main drum single line pull on a bare drum in 1st gear. Innovative drive design eliminates all live chains, reduces moving parts, and reduces
weight. All Taylor drawworks meet or exceed API recommendation for design criteria and are engineered to meet a minimum 4:1 safety factor. 


All
drawworks bearings, seals and chains are off-the-shelf items and may be purchased directly from the factory or from parts distributors worldwide. 


	3.1.2
	SPECIFICATIONS







	DD260 Main Drum:	 	 
	

Main Barrel Dimensions	
 	

18.75 in. x 34 in. (476 mm x 864mm)
	Wireline Size	 	1" in. (25.4 mm)
	Drum Clutch	 	14 in. (356 mm) 3-Plate
	Drawworks Speeds	 	6 Forward, 1 Reverse
	Input Drive Line	 	1710 Spicer
	Drum Drive Chain	 	Single 140
	

Brake System	
 	

Dual Disc—60 in. x 4 in. x 10 in.
	Brake Cooling	 	Air
	
DD260 Sand Drum:	
 	

 
	

Sandline Drum Diameter	
 	

12.75 in. (324 mm.)
	Standard Sandline Size	 	9/16 in. (14.3 mm.)
	Capacity	 	16,000 ft. (4,877 m.)
	Sandline Drum Clutch	 	14 in. (356 mm.) 2-Plate
	Drum Drive Chain	 	Single 140
	

Brake System	
 	

Single Disc—48 in. x 4 in. x 7 in.
	Brake Cooling	 	Air




	3.1.3
	DRAWWORKS
FRAME 



The
DD260 frame is a mild steel structure utilizing structural material and one-piece in. drawworks side plates. 


	3.1.4
	DRUMS




Wide
barrel design reduces line interference when running double fast line. Taylor's exclusive spool drum design reduces drumshaft flex and weight while increasing total strength. Tubing drum has
Lebus grooving with turn back and kick plates to reduce line wear and assist in spooling. 


	3.1.5
	BRAKE
SYSTEM 



Air
cooled Disc with air activation system. 


	3.1.6
	DRUM
CLUTCH 



Wichita
brand air clutch mounted outboard of drawworks frame and chain case. Mounted on lower output shaft. Taylor's exclusive use of the clutch on the lower shaft reduces required clutch size, air
requirements and eliminates all live chains. 


5







 


	3.1.7
	CHAIN
DRIVES 



Diamond
140 chain, oil bathed for long life. Chain is fully enclosed in a one-piece chain case with a gasket flange. The design prevents case leakage due to warping. Access panel provides for chain
maintenance and removal without removing the chain case. 


	3.1.8
	POWER
DRIVE 



The
DD260 right angle gearbox utilizes a commercially manufactured Eaton(5) gear assembly or "third member". The third member is mounted in a fabricated steel housing and located in the drawworks
frame. The package is rated for a maximum input of 700 hp. Taylor's design allows right angle box to be serviced by any Eaton(5) service center or technician with "off-the-shelf" components. 


	3.1.9
	OPERATORS
CONSOLE 



The
operators console include brake levers, clutch, engine throttle, and emergency shutdown. The console is located behind the drawworks frame, near the mast base, for excellent drum visibility and
operator comfort. 


	3.1.10
	LUBRICATION






Remote
bearing lubrication with return lines. Lubrication system ensures complete lubrication of drum bearings. Return lines for grease provides for visual confirmation of complete lubrication.
Lubrication points are conveniently located outside the drawworks frame for ease of maintenance. 


	3.1.11
	AUXILIARY
HOIST 



Hydraulic
"planetary" style hoist mounted on the rig deck. Hoist capacity is 7,000 lbs. (3.1 mt) and comes with 250'(61 m) of in. wire line with tail chain. 


3.2   TELESCOPING MAST:


	3.2.1
	OVERALL 



A
telescoping mast with open face mast design, manufactured to API 4-F specifications. The open face design utilizes structural steel construction, which allows for maximum block clearance. Mast
includes a ladder from rig floor to crown and a block cradle. 


	3.2.2
	SPECIFICATIONS







	Mast Height:	 	104' (31.7 m)
	No. Of Lines to Block	 	4, 6, or 8
	API Capacity	 	 
	 	4-Lines	 	200,000 lbs. (90.7 mt)
	 	6-Lines	 	225,000 lbs. (102 mt)
	 	8-Lines	 	240,000 lbs. (108.9 mt)
	

Drilling Line Size:	
 	

1 in. (25.4 mm.)
	Racking Board Height	 	55.7 ft. (17 m), 66.7 ft. (20.2 m),
	Racking Board Capacity	 	 
	 	2-7/8 in EUE	 	24,120 ft. (7,351.7 m)
	 	3-1/2 in. DP	 	13,680 ft. (4,169.5 m)
	 	4-1/2 in. DP	 	6,480 ft. (1,975.8 m)
	 	Rod Basket Height	 	78 ft. 7 in. (23.9 m)




	3.2.3
	BASE
SECTION 



Four
Leg style base section hinged to carrier frame. (2) Turnbuckles attached from top of mast base to carrier frame allow for mast angle adjustment. The well-side mast legs have manual screw jacks. 


6







 


	3.2.4
	LOWER
SECTION 




3 in x 6 in x 1/4 in
(76.2 mm x 152.4 mm x 6.35 mm) rectangular tubing main legs, with
1-1/2 in x 3 in x 1-1/8 in (38.1 mm x 76.2 mm x 22.57 mm) "C" braces. Lower section of mast
hinges to top of mast base and rests on headache rack during transport. 


	3.2.5
	UPPER
SECTION 



Rectangular
tubing construction. 3 in x 6 in x 1/4 in (76.2 mm x 152.4 mm x 6.35 mm) rectangular
tubing upper legs, with 1-1/2 in x 3 in x 1-1/8 in (38.1 mm x 76.2 mm x 22.57 mm) "C" braces.
Upper section rests inside lower section until mast is raised. Upper section then telescopes hydraulically upward from lower section and locks in place with spring deployed latching pins. 


	3.2.6
	STAND
PIPE 



One
(1) 2 7/8" double height stand pipe x 5000 psi mounted in derrick. Stand pipe includes all necessary brackets and complete installation. Top and bottom to be equipped with
hammer union and 180 degree upper end. 


	3.2.7
	CROWN
BLOCK 



Crown
block is set up for a 4, 6, or 8 line string-up. Crown sheaves are steel and grooved for 1 in (25.4 mm) wire line. All sheaves are mounted on tapered roller bearings with grease zerts for ease
of maintenance. 


Crown
includes: (1) one 24 in (610 mm) fast line sheave, (3) three 24 in (610 mm) crossover sheaves, and (1) one 30 in (762 mm) sandline sheave. Crown will also include extended post on ladder side
for mounting of fall protection device. 


	3.2.8
	RACKING
BOARD AND ROD BASKET 



The
mast includes an all welded racking board. The racking board automatically deploys as the mast is extended. Tubing board height is two positions and includes adjustable fingers for end racking of
tubing. 


The
mast includes an automatically deploying rod basket with rod hangers and air transfer system. Please note if using fiberglass rods.


	3.2.9
	MAST
RAISING SYSTEM 



The
mast utilizes two, 3-stage, double acting raising rams and a single, single-stage telescoping cylinder. Raising and telescoping controls are located near the operator's console for easy access and
operation. Hydraulic pressure gauges are mounted on the mast base to provide system monitoring during the raising/lowering process. The hydraulic system incorporates a safety choke system to control
flow to telescoping or raising cylinders due to a hydraulic line rupture or damage. 


	3.2.10
	GUYLINES 



Mast
includes (2) load guys from the crown to carrier and (1) set of wind guys that meet or exceed API specifications. 


	3.2.11
	DEADLINE
ANCHOR 



Deadline
anchor is designed and manufactured in accordance with API specifications and rated for a 50,000-lbs. maximum deadline load. Located on off operators side of rig float and comes with line
clamp. 


7







 


	3.2.12
	FOLDING
WORK PLATFORM 



Includes
(1) 8 ft. wide x 6 ft. long folding work platform with 2' wings on each side. Platform is constructed of rectangular tubing and is decked with a reduced slip grating. Platform is adjustable
in height from 2 ft. to 14 ft. from ground level, and includes a sliding access door. Deployment, raising, lowering, and pining of platform shall be done hydraulically. Platform will also include
manual telescoping aluminum ladder, of which, the final design will be approved by customer prior to fabrication. 


3.3   POWER PLANT & TRANSMISSION:  


	3.3.1
	ENGINE




(1) Tier
Ill Certified Caterpillar C-15, inline 6 cylinder, 4-stroke turbo charged, after-cooled engine rated at 475 hp. at 2,100 rpm. Engine includes a Donaldson dry-type air cleaner; and a
spark arresting muffler exhaust system. Exhaust system discharges to right side of rig. Engine also comes with emergency shutdown system. 



Engine
includes a heavy-duty radiator and fan, engine speed governor, air-actuated throttle, standard engine instruments with hour meter, emergency shutdown for low oil and high coolant temperature,
and an emergency shutdown button. 


	3.3.2
	SPECIFICATlONS:







	Model Number	 	C-15
	Number of Cylinders	 	6
	Engine Type	 	4-stroke / cycle
	Displacement	 	15 Liters
	Rated Power Output (Gross)	 	475 hp. @ 2,100 rpm




	3.3.3
	TRANSMISSION




(1) Allison
M5610A automatic transmission provides 6 forward speeds and 1 reverse. Remote shifting is provided from the operators console via an electronic shifting system. Transmission uses
separate cooler, integrated into the radiator. 


All
engine / transmission combinations are reviewed and approved by the transmission manufacturer for correct engineering, installation and engine compatibility. Taylor's exclusive design allows for
the removal of engine, transmission, or transfer case independently. 



	SPECIFICATIONS:	 	 
	Net Input Power (max.)	 	550 hp. (485 kW)
	Net Input Speed (max.)	 	2,500 rpm
	Net Input Torque (max.)	 	1,750 Ib.-ft. (2,373 N-m)
	Torque Converter	 	Single stage, 3-element
	

Gear Ratios:	
 	

 
	 	First	 	4.00:1
	 	Second	 	2.68:1
	 	Third	 	2.01:1
	 	Fourth	 	1.35:1
	 	Fifth	 	1.00:1
	 	Sixth	 	0.67:1
	 	Reverse	 	-5.15:1




8







 
	3.3.5
	TRANSFER
CASE 



Commercially
produced gear driven transfer case. 1-in / 2-out configuration, rated at 12,000 ft Ibs of torque. Transfer case distributes power to drawworks and carrier. Includes air activated
disconnects for selection of road / winch gear. 


3.4   AIR, ELECTRIC AND HYDRAULIC SYSTEMS:


	3.4.1
	AIR
SYSTEM 



(1) Engine
driven 27.5-cfm compressor pressurizing a 5-tank air system plumbed in accordance with applicable DOT regulations and requirements. Check valves prevent accidental air pressure loss
from system due to single line failure. Main air lines are plumbed with OEM style steel airlines and compression fittings rather than threaded pipe. 


	3.4.2
	ELECTRICAL
SYSTEM 



12-volt
electrical system, consisting of (1) 100 amp alternator, (3) BCI-31 batteries, (1) 12V starter and voltmeter. Batteries are located in a steel battery box mounted on the carrier deck. Location
of box provides excellent access for maintenance and service. 


	3.4.3
	HYDRAULIC
SYSTEM 



50
Gallon per minute system provides 2,000 psi. working pressure for all rig hydraulics and accessory drives. The pump is mounted in front of the rig engine and is directly coupled to the engine
crankshaft, this is an exclusive Taylor feature. System features a bypass to tank while not in use. Hydraulic system incorporates a 200-gallon hydraulic tank with element style filters, suction
strainer, and main tank shutoff. 


	3.4.4
	TONG
CIRCUIT 



Rig
hydraulic system provides a 2000 PSI / 50 GPM tong circuit. The system includes connectors, pressure & return lines, pressure gauge, and pressure regulator valve. Tongs, quick-connects, and tong
hoses are not included as standard equipment. 


3.5   TAYLOR 5-AXLE CARRIER:


	3.5.1
	OVERALL




The
carrier is a heavy-duty 5-axle oilfield carrier with two front steering axles, two rear-driving axles, and one tag axle. All frame members coped and welded for superior strength and durability.
The
carrier is designed for maximum maneuverability, road clearance and turning radius. Location of axles specially engineered to correctly distribute weight in proportion to front and rear axles. 


	3.5.2
	SPECIFICATI0NS*:







	A: Length w/ Mast:	 	61 ft 9 in
	B: Overhang (front)	 	14 ft. 9 in.
	C: Axle to Front Bumper	 	5 ft.
	D: Bridge Span	 	16 ft. 2 in.
	E: Rear Axle Spacing	 	53 in.
	F: Rear Axle to Back of Rig	 	11 ft. 8 in.
	G: Height (over the road)	 	14 ft 3 in.
	 	 	 





9







 


	

Width (traveling—not shown)	
 	

8 ft. 6 in.
	Overhang (rear—not shown)	 	N/A
	Max Ingress Angle	 	34 deg.
	Max Egress Angle	 	17 deg.
	Estimated Rig Weight	 	 
	 	Front:	 	28,760 Lbs.
	 	Rear:	 	51,260 Lbs.
	 	Total:	 	80,020 Lbs.





*Weight
in standard configuration without block or line. Other specifications subject to change as engineering dictates. 


	3.5.3
	CARRIER
FRAME 



21
in. wide-flange alloy H-beam, hand welded for strength. Coped cross members for increased strength and durability. Front and rear tow lugs are welded to the end of the frame rails for proper load
distribution during towing. Frame is decked in 3/16 in. diamond tread decking with a 3-1/2 in. lip for strength and reduced flex. 


	3.5.4
	FRONT
AXLES 



Steer
able front tandem axle set is rated at 20,000 Ibs. per axle and Reyco front spring suspension rated at 22,000 Ibs per axle. 


	3.5.5
	REAR
DRIVING AXLES 



Eaton
463 Series rear driving axles rated at 46,000 Ibs. Hendrickson walking beam rear suspension. Standard ratio is 6.17:1 


	3.5.6
	REAR
TAG AXLE 



Non-driving
rear axle with air suspension. Axle is rated for 20,000 Ib. capacity. Control for axle to be located near rear axles on operator's side. 


	3.5.7
	BRAKE
SYSTEM 



DOT
approved regulation antilock air brake system. Drum style brakes on all axles. Carrier is equipped with additional air emergency brake. 


	3.5.8
	TIRES
& WHEELS 



The
(4) four front tires are 445/65 R22.5 wide-base tires mounted on 13 in. x 22.5 in. steel hub-piloted "bud" type wheel. The (12) twelve rear tires are 11 R x 22.5 off-road tires mounted on 8 in. x
22.5 in. hub-piloted steel "bud" style wheels. 


	3.5.9
	CAB 



Single
person cab set up for left-hand drive. Cab is equipped with air suspension seat, heater, defroster, windshield wiper, air horn, West Coast mirrors, and full instrumentation. 


Instrumentation
consists of speedometer, oil pressure, transmission oil temperature, water temperature, voltmeter, fuel meter, and front & rear air pressure gauges. 


	3.5.10
	STEERING




Rig
steering is a hydraulic assisted system, with (1) cylinder mounted on each axle and a hydraulic assisted steering box. 


10







 


	3.5.11
	RIG
LEVELING SYSTEM 



Rig
leveling is done with (4) hydraulic leveling jacks with locks. Jacks have 12 in. travel. The jacks are controlled from the operator's console. A leveling gauge is provided to assure quick easy rig
leveling. 


	3.5.12
	OTHER
EQUIPMENT 



The
Taylor 5-axle carrier comes complete with integrated rig stairs, operator side fold-down walk ways with aluminum ladder, OSHA approved guardrails, driveline covers, junk rack, two (2) locking
toolboxes, two (2) 125-gallon fuel tank, two (2) rear sill racks. Operators console will include (1) BOP control for blind rams and (1) BOP control for pipes. 


3.6   PAINT & PREPARATION:


	3.6.1
	Preparation




Rig
is thoroughly washed, sandblasted, and chemical etched prior to painting. 


	3.6.2
	Primer
Coat 



Taylor
Rig uses a zinc primer system. The primer is applied to a thickness of 3-—4 mills, exceeding industry standards. **note: no zinc coat 


	3.6.3
	Finish
Coat 



The
unit is finish coated in accordance with customer paint scheme. The finish coat is a polyurethane system for long lasting gloss and minimal chipping or pealing. Finish coat is 3-—4
mills in thickness, depending on color. Unless otherwise stated, engine will be painted to match the rig. 


11







 

SECTION 4—ACCESSORIES & TOOLS  


Taylor to provide the following general options at no additional cost. 



	•
	Mount
for oil saver pump



	•
	Jack
Stands



	•
	Lubricator
Rack—Slide Out



	•
	Tubing
Tong Rack



	•
	Rod
Tong Rack



	•
	Safety
Chains on Tubing Board Fingers



	•
	Provisions
for customer supplied Geronimo line from tubing and rod basket



	•
	Install
customer supplied tong lift cylinder.



	•
	Board
racks for front jack stands to the front side of the jack socket. Place rack at an angle 14" x 24" x 3" so board will not come out during transport.



	•
	Removable
guard for back of tubing drum.



	•
	Derrick
base mounted weight indicator bracket with 2" female hammer union connection. Hammer union mounted in place that gives operator good line of view from operator's
platform.



	•
	Hooks
on rear jack sockets for weight indicator pads.



	•
	Kill
switch to sand drum control panel.



	•
	T
between fuel tanks with valve and safety plug. 



12







 





SECTION 5—RIG OPTIONS  



	5.1    Tool Tub In Derrick Base	 	$425.00
	

Add Tool Tub in derrick base in a manner not to prohibit the removal or replacement of the tubing tongs. The tub should run the width of the base and be approx 18" deep x 12" tall. Tub should have reinforcements and nubs to store slips, 2/38" tubing
elevators, 2/78" tubing elevators and keepers for Hyd. Rod tongs. Tub will have 314" hooks on each corner.
	

5.2    BOP Controls	
 	

$934.00
	

Add (2) Air over hydraulic BOP controls to operators console. (1) For blind & (1) For Pipe Rams. Includes all plumbing and mounting of controls in console.
	

5.3    Winch Control	
 	

$1,231.00
	

Add (1) Air over hydraulic Winch Control to operators console. Includes all plumbing and mounting of control in console.
	

5.4    Hydraulic Pressure Gauge	
 	

$284.00
	

Add Main Hydraulic Pressure gauge to Console.
	

5.5    Delete Tool Box	
 	

($550.00)
	

Delete tool box after staircase towards the rear of the rig on operator side and replace with junk rack.
	

5.6    Custom Deck Mounted Stand Up Tool Box	
 	

$1,510.00
	

Add a custom deck mounted stand up tool box on off-operator side from end of drawworks towards rear of rig. Approx. dimensions of tool box are 40" H x 36" W x 16" D. The box should be equipped with hooks inside for
36" & 24" pipe wrenches and other smaller hand tools. Please note: That the junk rack will be extended to take place of the deleted tool box.
	

5.7    Hydraulic Walkways	
 	

$7,581.00
	

Add hydraulic walkways.
	

5.8    Main Drum Disc Guard	
 	

$612.00
	

Add protective guards to main drum discs.
	

5.9    Winch Guard Cover	
 	

$186.00
	

Add winch guard cover.




13







 

SECTION 6—RIG SPARES  


None Contracted 


14







 

SECTION 7—DELIVERY & COMMISSIONING  


	7.1
	PRE-DELIVERY
INSPECTION 



Taylor
will conduct a standard pre-delivery systems test. These tests check function and operation of rig and associated components. Customer is provided copy of inspection report. Unless otherwise
listed in
this contract, the unit will at no time be tested with destructive testing methods such as load, dynamometer, or other tests. 


	7.2
	PACKAGING 



No
packaging is included in this contract. 


	7.3
	RIG
SHIPPING 



Each
unit is priced FOB, customer's yard, so long as yard is inside the contiguous United States. Delivery to Alaska or Hawaii is not included. In those cases, delivery is to the Port of Houston. 


	7.4
	TRAINING




Taylor
provides a 6-hour training and orientation program for up to 6 persons. This training is provided at the customer's yard during normal business hours. After hours or weekend training is
available at an additional charge. 


NOTE:    Customer is required to attend a 6 hour training program performed by a Taylor representative. This training may take place at Taylor
facility or during rig commissioning at customer's location. Customer's failure to attend this training renders all warranties void. 


	7.5
	ON-SITE
COMMISSIONING 



1-day
on-site commissioning during normal business hours is provided in this contract. After hours or weekend commissioning is available at an additional charge. 


	7.6
	DELIVERY
SCHEDULE 



Please
refer to Appendix A for all scheduled delivery dates. 


A
late delivery penalty will be paid by Taylor in the event of a delay, as outlined in the "Terms and Conditions" section of this contract. 


15







 

SECTION 8—DOCUMENTATION  


	8.1
	CONTRACT




Customer
will be provided (1) original copy of the purchase contract, and up to 5 additional copies of the contract as needed. 


	8.2
	INVOICES




Taylor
will present the customer with invoices for all moneys due. Invoices will indicate contract amount and all payment due information. 


	8.3
	MANUFACTURERS
STATEMENT OF ORIGIN 



Taylor
will provide a Manufacturers Statement of Origin (MSO) for the unit. This document proves the legal ownership of the unit. MSO will indicate the Vehicle Identification Number (VIN) as well as
all applicable component serial numbers. This document will be executed and transferred after final payment for unit is received. 


	8.4
	OWNERS
MANUAL 



The
unit will be accompanied by an owner's manual to assist in the operation and service of the unit. Due to the custom nature of each unit, the manual will be provided within 2 weeks of rig
completion. 


16







 

SECTION 9—WARRANTY  


Taylor Rigs warrants that the rig shall be free from defects in material and workmanship for a period of one (1) year from date of service. Additionally, Taylor warrants that
all drawworks parts, except for brake pads and expendables will be warranted for a period of two (2) years from date of service. A three (3) year warranty will be provided on the paint system. The
paint warranty covers pealing or paint adhesion issues. Provided, however, in no event does Taylor Rigs warrant the engine, drive train components, or third party components of the Rig, but Taylor
Rigs shall, to the extent possible, transfer to Customer any original equipment manufacturer warranty on such components. 


If
any defects covered by this Warranty appear within the warranty period, Taylor Rigs shall have the option of repairing or replacing the defective equipment at its expense. 


Taylor
will provide the customer with a proprietary 24 hr. warranty "hot line" number. 


Taylor
warrants having any warranty part available for same day shipment at any time during the warranty period. If Taylor does not have the part available, then the part is supplied at no cost to the
customer. 


Taylor
warranties to have a service person on site, upon Customer's request, with in 6 hours from the time of notice. This person does not have to be a Taylor Rig employee, but an authorized
representative of Taylor. Additionally, at the Customer's request, Taylor will have a Taylor Rig employee dispatched to the rig site with in one hour of request. 


This
Warranty does not extend to any equipment which has (a) been subjected to misuse, neglect, accident or abuse or casualty loss; (b) repaired or altered by anyone other than Taylor Rigs without its
express written prior approval; (c) improperly installed by someone other than Taylor Rigs; or (d) used in violation of instructions furnished by Taylor Rigs. 


THE
ABOVE WARRANTY SHALL BE IN LIEU OF ALL OTHER WARRANTIES AND ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE ARE DISCLAIMED. 


TAYLOR
RIGS' LIABILITY WHETHER IN CONTRACT, IN TORT, UNDER WARRANTY, IN NEGLIGENCE OR OTHERWISE, SHALL, TO EXTENT PERMITTED BY LAW, BE LIMITED TO THE REPAIR OR REPLACEMENT OF ANY DEFECTIVE PARTS. IN
NO EVENT SHALL TAYLOR RIGS BE LIABLE FOR SPECIAL OR CONSEQUENTIAL DAMAGES, OR DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION, OR ANY OTHER PECUNIARY LOSS ARISING OUT OF THE USE OR
INABILITY TO US THE RIG (INCLUDING THE INABILITY TO USE THE RIG BY REASON OF DELAY). 


TRAINING:    Customer is required to attend a 6 hour training program performed by a Taylor representative. This training may take place at
Taylor facility or during rig commissioning at customer's location. Customer's failure to attend this training renders all warranties void. 


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SECTION 10—PRICING  



	 
	 	PRICE EACH
	 	TOTAL FOR 24

	BASE RIG	 	$	625,126.00	 	$	15,003,024.00
	

RIG OPTIONS	
 	
$	

12,213.00	
 	
$	

293,112.00
	 	 	
	 	

	TOTAL PROJECT PRICE, 24 UNITS FOB CUSTOMER'S YARD, US FUNDS	 	$	15,296,136.00





*All
prices contracted herein are subject to terms and conditions of Taylor Rigs, LLC, included in Section 11 of this contract. Unless otherwise stated, contracted prices do not include export
packaging, rig-up, or other similar fees. 


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SECTION 11—STANDARD TERMS & CONDITIONS  


The contract on the attached pages is subject to the following terms and conditions:



	•
	Terms of Payment. Unless otherwise stated herein, all payments must be made in a timely manner according to the following
payment schedule and milestones: See Appendix A to contract CP-05-023. Not withstanding milestones outlined in Appendix A, in the event of a failure to make any payment, Taylor Rigs shall have the
right to cease any manufacturing with respect to this order and delay shipment accordingly. If Customer fails to make any final installment(s) of the Total Price within 30 days of the payment date,
Taylor may treat the Contract as wrongfully canceled, and the customer will be subject to terms and penalties listed below. Additionally, Taylor agrees to allow the customer to delay progress payments
if other rigs in process have not met scheduled milestone completions according to the provided time line.



	•
	Delivery or Completion. Taylor Rigs shall not be liable for any damage or penalty for delays in delivery or completion due to
acts of God, acts or omissions of the Customer, acts of civil or military authorities, governmental regulation or priorities, fires, floods, epidemics, war, riots, strikes, third party material or
manufacturing delays, transportation delays, impossibility or impracticability of performance or any other cause or causes beyond the control of Taylor Rigs, whether similar to the foregoing or
otherwise. In the event of a delay caused by the aforesaid, the delivery and/or completion date shall be extended for a period equal to any such delay, and this Contract shall not be void or voidable
as a result thereof. 





Taylor
guarantees delivery, subject to restrictions above. The guarantee provides a penalty equal to 1% of the individual units total contract price for each week after the guaranteed delivery date,
up to a maximum of 5%. If in the event of a delay of more than 5 weeks, then Customer has the option to cancel the purchase of that particular unit. 


Taylor rigs agrees to allow 4 of the 24 rigs contracted herein to become C700 series rigs at the price of $781,793.00 each per contract CP-05-005. Delivery of the C700 rigs
shall begin no sooner than the end of the first quarter of 2006. Notification by Basic to Taylor would need to be received no later than October 1st 2005 in order to meet the March 2006
delivery date.



	•
	Cancellation. This Contract is not subject to cancellation without the express written consent of Taylor Rigs except as a
result of default by Taylor Rigs, in which event, customer may terminate this Contract without penalty. In the event Taylor Rigs allows cancellation by the customer, the deposit would be refunded up
to the difference between contracted agreed sale price by the customer and Taylor Rigs, and the actual price received from sale of equipment to another customer. In addition, there shall be a
mandatory cancellation fee set forth as follows: Beginning from date of contract signing up to 15 days in the amount of 5%; 15-30 days 15% and anytime thereafter to date of delivery 25%. Cancellation
penalty is effective for any rigs in which deposits are due and/or have been placed. Nothing herein shall be deemed to impose an obligation on Taylor Rigs to agree to any cancellation on any terms. In
the event of a cancellation or other breach of this Contract by Customer, in addition to retaining above listed funds, Taylor Rigs may be entitled to seek such other remedies as it may have at law or
in equity.



	•
	Jurisdiction. The parties hereto irrevocably and unconditionally consent to and submit themselves to the exclusive
jurisdiction of the courts of the State of Oklahoma located in Tulsa County, Oklahoma and the courts of the United States of America located in the Northern District of Oklahoma (collectively, the
"Agreed Courts") with respect to any actions, suits or proceedings arising out of or in connection with this Contract and the transactions contemplated hereby and the parties hereto agree not to
commence any action, suit or proceeding relating thereto except in such Agreed Courts. The parties hereto irrevocably and unconditionally waive any objection to the laying of venue of any action, suit
or proceeding arising out of this Contract or the transactions contemplated hereby in the Agreed Courts and hereby further irrevocably and unconditionally waive and agree not to plead or
claim that any such action, suit or proceeding brought in any of the Agreed Courts has been brought in an inconvenient forum. 



19







 





SECTION 12—PARTS SALE AGREEMENT  


Taylor
agrees so long as this contract is legally fulfilled by the Customer and not subject to any cancellation, Taylor will resell any part or component, for these units, at a 10% mark-up from cost.
This is a 10% mark-up from Taylor Rigs purchase price including shipping to Taylor's Tulsa, Ok facility. Shipping from Tulsa is not included in this portion of the contract. 


20







 

SECTION 13—CONTRACT ACCEPTANCE  


CUSTOMER, HAVING CAREFULLY READ PAGES 1-22 (ALL PROVISIONS) OF THIS CONTRACT, ACKNOWLEDGES RECEIPT OF A COPY OF THIS CONTRACT WHICH IS THE FINAL EXPRESSION OF THE AGREEMENT OF
THE PARTIES, AND THE COMPLETE AND EXCLUSIVE STATEMENT OF THE TERMS AND CONDITIONS AGREED UPON, ALL PRIOR AGREEMENTS AND UNDERSTANDINGS BEING MERGED HEREIN, AND THAT THERE ARE NO REPRESENTATIONS,
WARRANTIES OR STIPULATIONS, EITHER ORAL OR WRITTEN NOT HEREIN CONTAINED. NO MODIFICATIONS OF THIS AGREEMENT MAY BE MADE EXCEPT BY WRITTEN AGREEMENT EXECUTED BY BOTH CUSTOMER AND TAYLOR RIGS. THIS
AGREEMENT SHALL NOT BE BINDING UPON TAYLOR RIGS UNTIL ACCEPTED BY AN AUTHORIZED OFFICER OF TAYLOR RIGS. 


ALL
PRICES, SPECIFICATIONS, AND CONDITIONS ARE SATISFACTORY AND ARE HEREBY ACCEPTED, SUBJECT TO THE TERMS SET FORTH ABOVE AND THOSE
GENERAL TERMS AND CONDITIONS OF THE CONTRACT INCLUDED HEREIN. TAYLOR RIGS, LLC IS AUTHORIZED TO PERFORM THE WORK AS SPECIFIED, PAYMENT WILL BE MADE AS OUTLINED ABOVE. 



	Company:	Basic Energy Services
	 	Taylor Rigs, LLC	 
	

Accepted By:	

/s/ K.V. Huseman
	
 	

Accepted By:	

/s/ Brett Taylor

	

Date:	

5/19/05
	
 	

Date:	

5/19/05





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