Document:

Asset Purchase Agreement - Tong Specialty, LLC

 Exhibit 10.1 
 ASSET PURCHASE AGREEMENT 
 by and among 
 TESCO CORPORATION, 
 LAMB ENERGY
SERVICES, L.L.C., 
 TONG SPECIALTY, L.L.C. 
 and 
 the other parties hereto 
 dated 
 November 1, 2005 

 TABLE OF CONTENTS 
  

 

					
	ARTICLE I	  	
	PURCHASE AND SALE	  	
			
	 Section 1.01
	  	Responsibility for Conduct of Business	  	1
	 Section 1.02
	  	Acquired Assets	  	1
	 Section 1.03
	  	Excluded Assets	  	3
	 Section 1.04
	  	Assignment of Contracts and Rights	  	3
		
	ARTICLE II	  	
	PURCHASE PRICE	  	
			
	 Section 2.01
	  	Purchase Price	  	4
	 Section 2.02
	  	Purchase Price Adjustment	  	4
	 Section 2.03
	  	Prorations; Adjustments	  	6
	 Section 2.04
	  	Acquired Assets and Sellers’ Employees in Use	  	6
	 Section 2.05
	  	Like Kind Exchange	  	7
	 Section 2.06
	  	Allocation of Consideration	  	7
		
	ARTICLE III	  	
	ASSUMED LIABILITIES; RETAINED LIABILITIES	  	
			
	 Section 3.01
	  	Assumed Liabilities	  	7
	 Section 3.02
	  	Retained Liabilities	  	8
		
	ARTICLE IV	  	
	THE CLOSING	  	
			
	 Section 4.01
	  	Time and Place	  	9
	 Section 4.02
	  	Documents to be Delivered By Sellers	  	9
	 Section 4.03
	  	Documents to be Delivered by Purchaser	  	10
		
	ARTICLE V	  	
	CONDITIONS TO CLOSING	  	
			
	 Section 5.01
	  	Purchaser’s Conditions to Closing	  	10
	 Section 5.02
	  	Sellers’ Conditions to Closing	  	11
		
	ARTICLE VI	  	
	REPRESENTATIONS AND WARRANTIES OF SELLER	  	
			
	 Section 6.01
	  	Organization of Sellers; Authority	  	12
	 Section 6.02
	  	Noncontravention	  	12
	 Section 6.03
	  	Title to Acquired Assets	  	12
	 Section 6.04
	  	Ownership; No Equity Interests	  	13
	 Section 6.05
	  	Absence of Changes	  	13
	 Section 6.06
	  	Personal Property	  	14
	 Section 6.07
	  	Permits	  	14
	 Section 6.08
	  	Contracts	  	14
	 Section 6.09
	  	Intellectual Property	  	15
	 Section 6.10
	  	Brokers’ Fees	  	16

  

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	 Section 6.11
	  	Taxes	  	16
	 Section 6.12
	  	Product and Service Warranty	  	17
	 Section 6.13
	  	Employees; Employee Relations	  	17
	 Section 6.14
	  	Employee Benefit Plans	  	18
	 Section 6.15
	  	Environmental Matters	  	18
	 Section 6.16
	  	Property Matters	  	19
	 Section 6.17
	  	Customers, Vendors and Suppliers	  	19
	 Section 6.18
	  	Insurance	  	19
	 Section 6.19
	  	Inventories	  	19
	 Section 6.20
	  	Assets Necessary to the Business	  	19
	 Section 6.21
	  	Conformity to Law	  	19
	 Section 6.22
	  	Accounts Receivable	  	20
	 Section 6.23
	  	Financial Statements	  	20
	 Section 6.24
	  	Safety Performance	  	20
	 Section 6.25
	  	Condition of Assets	  	20
		
	ARTICLE VII	  	
	REPRESENTATIONS AND WARRANTIES OF BUYER	  	
			
	 Section 7.01
	  	Organization of Purchaser; Authority	  	21
	 Section 7.02
	  	Noncontravention	  	21
	 Section 7.03
	  	Brokers	  	21
		
	ARTICLE VIII	  	
	COVENANTS	  	
			
	 Section 8.01
	  	Conduct of Business	  	22
	 Section 8.02
	  	Access	  	23
	 Section 8.03
	  	Third Party Approvals	  	23
	 Section 8.04
	  	Non-Competition and Non-Solicitation	  	24
	 Section 8.05
	  	Retained Employees	  	26
	 Section 8.06
	  	Use of Name	  	26
	 Section 8.07
	  	Further Assurances	  	27
	 Section 8.08
	  	Confidentiality	  	27
	 Section 8.09
	  	Exclusivity	  	27
	 Section 8.10
	  	Access to Former Business Records	  	27
	 Section 8.11
	  	Accounts Receivable	  	28
		
	ARTICLE IX	  	
	INDEMNIFICATION	  	
			
	 Section 9.01
	  	Survival	  	28
	 Section 9.02
	  	Sellers Indemnity	  	28
	 Section 9.03
	  	Limitations on Liability of Sellers and Stockholders	  	29
	 Section 9.04
	  	Purchaser Indemnity	  	29
	 Section 9.05
	  	Limitations on Liability of Purchaser	  	29
	 Section 9.06
	  	Restricted Party Obligations	  	30
	 Section 9.07
	  	Claims	  	30

  

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	ARTICLE X	  	
	TERMINATION	  	
			
	 Section 10.01
	  	Termination	  	31
	 Section 10.02
	  	Effect of Termination	  	32
		
	ARTICLE XI	  	
	GENERAL	  	
			
	 Section 11.01
	  	Expenses	  	32
	 Section 11.02
	  	Notices	  	32
	 Section 11.03
	  	Entire Agreement	  	33
	 Section 11.04
	  	Governing Law	  	33
	 Section 11.05
	  	Sections and Section Headings	  	33
	 Section 11.06
	  	Assigns	  	33
	 Section 11.07
	  	No Third Party Rights or Remedies	  	34
	 Section 11.08
	  	Rules of Construction	  	34
	 Section 11.09
	  	Waiver	  	34
	 Section 11.10
	  	Counterparts	  	34

  

			
	Exhibit A	  	Assignment and Bill of Sale
	Exhibit B	  	Founder Lease Agreement
	Exhibit C	  	Employment Agreement
	Exhibit D	  	Preferred Provider Agreement
		
	Schedule 1.02(a)	  	Equipment
	Schedule 1.02(b)	  	Scheduled Contracts
	Schedule 1.02(c)	  	Scheduled Leasehold Interests and Lease Agreements
	Schedule 1.03(c)	  	Excluded Insurance Policies
	Schedule 1.03(g)	  	Excluded Plans
	Schedule 2.02(a)	  	Sample Net Working Capital Calculation
	Schedule 2.06	  	Purchase Price Allocation
	Schedule 3.02(g)	  	Retained Liabilities
	Schedule 5.01(c)	  	Required Consents
	Schedule 5.01(h)	  	Key Employees
	Schedule 6.03	  	Encumbrances and Permitted Encumbrances
	Schedule 6.05	  	Absence of Changes
	Schedule 6.07	  	Scheduled Permits
	Schedule 6.08(a)	  	Exceptions to Scheduled Contracts
	Schedule 6.08(b)	  	Scheduled Contracts – Consents to Assignment
	Schedule 6.08(c)	  	Other Contracts
	Schedule 6.09	  	Material Intellectual Property
	Schedule 6.11	  	Tax Matters
	Schedule 6.13	  	Business Employees
	Schedule 6.16	  	Excluded Real Property
	Schedule 6.17	  	Customers, Vendors and Suppliers
	Schedule 6.19	  	Inventories

  

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	Schedule 6.23	  	Financial Statements
	Schedule 6.24	  	Safety Statistics
	Schedule 8.01	  	Conduct of Business
	Schedule 8.04(a)(ii)	  	Administrative Employees
	Schedule 8.06(b)	  	Lamb Energy Logo
	Schedule 11.08(d)	  	Sellers’ Knowledge

  

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 ASSET PURCHASE AGREEMENT 
 This ASSET PURCHASE AGREEMENT (this “Agreement”) is dated as of the 1st day of November, 2005, by and among TESCO CORPORATION, an
Alberta corporation (the “Purchaser”), LAMB ENERGY SERVICES, L.L.C., a Delaware limited liability company (“Lamb Energy”), TONG SPECIALTY, L.L.C., a Louisiana limited liability company (“Tong
Specialty”), LES, INC., a Louisiana corporation (“LES”), Edward Lamb (“Lamb”), Donald Daigle (“Daigle”), Stacey Reaux (“Reaux”) and SESI, L.L.C., a Delaware limited
liability company (“SESI”). Each of Lamb Energy and Tong Specialty are referred to herein individually as a “Seller” and collectively as “Sellers.” Each of LES and SESI are referred to herein
individually as a “Stockholder” and collectively as “Stockholders.” Each of Lamb, Daigle and Reaux are referred to herein individually as a “Restricted Party” and collectively as the
“Restricted Parties.” 
 WHEREAS, Sellers desire to sell and Purchaser desires to purchase certain assets which comprise
Sellers’ casing and tubular running business and inspection services business which includes (i) equipment and expertise used in the handling, running, installation and removal of tubing and casing, (ii) related services including
wellsite supervision of said running, installation and removal, (iii) assembly torque monitoring services, and (iv) the sale of certain consumable and cementing accessory items (the “Business”), which are referenced as
Acquired Assets in Section 1.01 below. 
 WHEREAS, Lamb Energy owns all of the issued and outstanding membership interests of Tong
Specialty; 
 WHEREAS, LES and SESI collectively own all of the issued and outstanding membership interests of Lamb Energy; and 

WHEREAS, Lamb, Daigle and Reaux collectively own all of the issued and outstanding capital stock of LES. 
 NOW, THEREFORE, in consideration of the mutual promises and agreements set forth herein, the parties hereto agree as follows: 
 ARTICLE I 
 PURCHASE AND SALE

 Section 1.01 Responsibility for Conduct of Business. In accordance with the terms of this Agreement and subject to the
conditions, limitations and provisions contained herein, it is the parties’ intentions that Sellers shall be entitled to the benefits and responsible for the liabilities and obligations arising from or related to the ownership and use of the
Acquired Assets prior to the Effective Time (as defined in Section 2.02(a) below), and that Purchaser shall be entitled to the benefits and responsible for the liabilities and obligations arising from or related to the ownership and use of the
Acquired Assets from and after the Effective Time. 
 Section 1.02 Acquired Assets. In furtherance of the parties intentions set forth
in Section 1.01 and subject to the terms and conditions set forth in this Agreement, and except for the Excluded Assets, at the Closing referred to in Article IV hereof, Sellers shall sell, assign, 

 
transfer, and deliver to Purchaser, and Purchaser shall purchase, acquire, and take assignment and delivery of, all of the assets, properties, rights and
licenses of Sellers of every kind and description, wherever located, real, personal or mixed, tangible or intangible, owned, held, used or usable in the conduct of the Business (all of which assets are hereinafter referred to collectively as the
“Acquired Assets”), including all right, title and interest of Sellers in and to the following: 
 (a) the
equipment, machinery, furniture and furnishings, computers and computer hardware (including processing units, terminals, disk drives, tape drives, printers, keyboards, screens, and peripherals), vehicles, trailers, apparatus, tools, dies,
appliances, implements and other tangible personal property used or usable in the Business, including the personal property listed on Schedule 1.02(a) hereto (the “Equipment”); 
 (b) the contracts and agreements listed on Schedule 1.02(b) hereto (the “Scheduled Contracts”); 

(c) the leasehold estate of Sellers in and to that certain property described on Schedule 1.02(c) (the “Scheduled
Leasehold Interests”), under the lease agreements creating such leasehold estate, which lease agreements are listed in Schedule 1.02(c) (the “Lease Agreements”); 
 (d) inventories, including parts and spare parts inventories, chemicals, finished goods, products, work-in-progress, raw materials and
other inventories (“Inventories”) used or usable in the Business; 
 (e) all of Sellers’ books, records,
papers and instruments of whatever nature and wherever located that relate to the Acquired Assets or which are required or necessary in order for Purchaser to conduct the Business from and after Closing in the manner in which it is presently being
conducted (but only to the extent allowed by applicable laws), including, without limitation, specifications, blue prints, drawings, designs, sales, promotional and marketing literature, accounting and financial records, personnel and labor records,
sales and property tax records and returns relating to the Business; 
 (f) all patents, trademarks, technology, know-how,
data, copyrights, tradenames, service marks, licenses and other intellectual property used or usable in the conduct of the Business, to the extent assignable (“Intellectual Property”), including, without limitation, all software,
all of Sellers’ rights under any licenses related to Sellers’ use, at any time, of computer equipment, hardware or software; 
 (g) any lists in the possession of Sellers that identify customers to whom sales have been made in connection with the operation of the Business and vendors from whom supplies are purchased in connection with the
operation of the Business; 
 (h) the Scheduled Permits (as defined in Section 6.07 below), to the extent assignable;

  

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 (i) the name “Tong Specialty” and any derivatives thereof used or usable in the
Business and the right to use the name “Lamb Energy Services” as contemplated in Section 8.06; and 
 (j) all
cash and cash equivalents on hand and in banks; and 
 (k) all accounts, notes and other receivables and rights to receive
payments from any person used to calculate the amount of Net Working Capital pursuant to Section 2.02. 
 Section 1.03 Excluded
Assets. Notwithstanding the foregoing, Sellers are not selling, and Purchaser is not purchasing pursuant to this Agreement or otherwise, any of the following assets and properties of Sellers (all of which assets are hereinafter referred to
collectively as the “Excluded Assets”), all of which shall be retained by Sellers and shall be excluded from the Acquired Assets: 
 (a) Sellers’ minute books, tax returns and other corporate documents and Seller’s financial records; 
 (b) the membership interests of Tong Specialty held by Lamb Energy; 
 (c) all contracts of
property and casualty insurance listed on Schedule 1.03(c) (the “Insurance Policies”) and all rights thereunder (including proceeds from such insurance policies) relating to the Business or the Acquired Assets;

 (d) all deposits, advances, credits and expenses that have been prepaid by Sellers under the Insurance Policies;

 (e) any tax (as defined in Section 6.11(c)(i) below) refunds and prepaid taxes; 
 (f) all rights, claims, counterclaims, credits, causes of action, lawsuits, judgments, demands or rights of set-off in favor of Sellers
arising out of or relating to the conduct of the Business prior to the Closing Date other than with respect to the Acquired Assets; 
 (g) all employee benefit plans relating to the Business existing as of the Closing, including the plans listed on Schedule 1.03(g) (the “Plans”), and all assets related thereto; 
 (h) assets and properties of Sellers not used in the Business, which are listed on Schedule 1.03(h); and 
 (i) all other contracts and agreements to which a Seller is party or by which its assets or properties are bound other than the Scheduled
Contracts (“Retained Contracts”). 
 Section 1.04 Assignment of Contracts and Rights. Notwithstanding any other
provision of this Agreement to the contrary, this Agreement shall not constitute an agreement to assign any Acquired Asset or any claim or right or any benefit arising thereunder or resulting therefrom if an attempted assignment thereof, without the
consent, approval or authorization of a third party thereto, would constitute a breach or other contravention thereof or in any way 

  

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adversely affect the rights of Purchaser or Sellers thereunder. Sellers and Purchaser will use commercially reasonable efforts to obtain the consent of the
other parties to any such Acquired Asset or any claim or right or any benefit arising thereunder for the assignment thereof to Purchaser. If such consent is not obtained, or if an attempted assignment thereof would be ineffective or would adversely
affect the rights of a Seller thereunder so that Purchaser would not in fact receive all such rights as contemplated herein, Sellers and Purchaser will cooperate in a mutually agreeable arrangement under which Purchaser would obtain the benefits and
assume the obligations thereunder in accordance with this Agreement, including subcontracting, sub-licensing or sub-leasing to Purchaser, or under which Sellers would enforce for the benefit of Purchaser, with Purchaser assuming Sellers’
obligations, any and all rights of Sellers against a third party thereto. 
 ARTICLE II 
 PURCHASE PRICE 
 Section 2.01
Purchase Price. Purchaser shall pay to Sellers at the Closing, as the aggregate purchase price for the Acquired Assets, an amount equal to $30,000,000 (the “Purchase Price”) by wire transfer of immediately available funds to
an account or accounts designated by Lamb Energy at least two days prior to the Closing. The purchase price will be subject to adjustment as provided in Sections 2.02 and 2.03. 
 Section 2.02 Purchase Price Adjustment. 
 (a) For purposes of establishing the Purchase Price, Purchaser and Sellers have assumed that the Net Working Capital as of 12:01 a.m., Houston Texas time, on the Closing Date (the “Effective Time”)
will be $3,000,000 (the “Net Working Capital Threshold”). “Net Working Capital” shall mean the total current assets of Sellers of the type set forth on Schedule 2.02(a), less total current liabilities of
Sellers of the type set forth on Schedule 2.02(a). 
 (b) No less than five days prior to Closing, Sellers shall
prepare and deliver to Purchaser a certificate (the “Pre-Closing Working Capital Certificate”) of an authorized officer of Lamb Energy setting forth Sellers’ good faith estimate of Sellers’ Net Working Capital as of the
Effective Time (the “Estimated Effective Time Net Working Capital”). From and after the delivery of the Pre-Closing Working Capital Certificate, Purchaser shall be permitted to review Sellers’ working papers relating to the
preparation of the Pre-Closing Working Capital Certificate, and Sellers shall provide Purchaser with reasonable access to the persons involved in preparing or reviewing such Pre-Closing Working Capital Certificate. If Purchaser disagrees with
Sellers’ good faith estimate of Sellers’ Net Working Capital as set forth in the Pre-Closing Working Capital Certificate, Sellers and Purchaser shall negotiate in good faith to resolve their differences prior to the Closing. If Purchaser
provides a notice of agreement or does not provide a notice of disagreement within five days following its receipt of the Pre-Closing Working Capital Certificate, then Purchaser shall be deemed to have accepted the calculations and the amounts set
forth in the Pre-Closing Working Capital Certificate, which shall then be the amount used for purposes of determining the amount of Purchase Price payable at Closing. If the Estimated Effective Time Net Working Capital set forth in the Pre-Closing
Working Capital Certificate exceeds the Net Working Capital Threshold, then the Purchase Price will be increased and Purchaser shall pay as an addition to the Purchase Price payable at Closing an amount in 

  

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cash equal to such excess. If the Estimated Effective Time Net Working Capital set forth in the Pre-Closing Working Capital Certificate is less than the Net
Working Capital Threshold, then the Purchase Price will be reduced and the Purchase Price payable by Purchaser at Closing shall be reduced by such difference. 
 (c) As soon as reasonably practicable following the Closing Date, and in any event within 60 days thereafter, Purchaser shall prepare and
deliver to Sellers a certificate (the “Post-Closing Working Capital Certificate”) of an authorized officer of Purchaser setting forth Purchaser’s good faith calculation of the actual Net Working Capital as of the Effective Time
(the “Final Effective Time Net Working Capital”). From and after the delivery of the Post-Closing Working Capital Certificate, Sellers shall be permitted to review Purchaser’s working papers relating to the preparation of the
Post-Closing Working Capital Certificate, and Purchaser shall provide Sellers with reasonable access to the persons involved in preparing or reviewing such Post-Closing Working Capital Certificate. 
 (d) (i) Within 20 days after Sellers’ receipt of the Post-Closing Working Capital Certificate, Sellers shall notify Purchaser as to
whether Sellers agree or disagree with the calculation of the Final Effective Time Net Working Capital as reflected on the Post-Closing Working Capital Certificate and, if Sellers disagree, such notice shall set forth in reasonable detail the
particulars of such disagreement. If Sellers provide a notice of agreement or do not provide a notice of disagreement within such 20-day period, then Sellers shall be deemed to have accepted the calculations and the amounts set forth in the
Post-Closing Working Capital Certificate delivered by Purchaser, which shall then be final, binding and conclusive for all purposes hereunder. If any such notice of disagreement is timely provided, then Purchaser, on the one hand, and Sellers, on
the other, shall each use reasonable efforts for a period of 15 days thereafter to resolve any disagreements with respect to the calculations in the Post-Closing Working Capital Certificate. 
 (ii) If, at the end of the 15-day resolution period, Purchaser and Sellers are unable to resolve any disagreements as to items in the
Post-Closing Working Capital Certificate, then KPMG LLP (or such other independent accounting firm of recognized national standing as may be mutually selected by Purchaser and Sellers) shall resolve any remaining disagreements. If KPMG LLP is
unwilling or unable to serve in such capacity, then Sellers shall within 10 days after such 15-day resolution period deliver to Purchaser a listing of three other accounting firms of recognized national or regional standing and Purchaser shall
within 10 days after receipt of such list, select one of such three accounting firms (such firm as is ultimately selected pursuant to the aforementioned procedures being the “Accountant”). The Accountant shall be charged with
determining as promptly as practicable, but in any event within 30 days after the date on which such dispute is referred to the Accountant any disputed items required to determine Sellers’ actual Net Working Capital as of the Effective Time.
The fees, costs and expenses of the Accountant shall be allocated between Sellers and Purchaser so that Sellers’ share of such fees, costs and expenses shall be in the same proportion that the aggregate dollar amount of the disputed items
submitted by Sellers to the Accountant that is unsuccessfully disputed by Sellers (as finally determined by the Accountant) bears to the total dollar amount of all disputed 

  

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items so submitted by Sellers to the Accountant. Purchaser shall be responsible for all remaining costs and expenses of the Accountant, if any. The
determination of the Accountant shall be final, binding and conclusive for all purposes hereunder. Such amounts as finally determined by the Accountant shall be used to determine the Purchase Price. 
 (iii) Within five Business Days of the date on which the later of the last disputed item required to determine the actual Net Working
Capital as of the Effective Time is resolved pursuant to this Section 2.02 or Sellers’ acceptance of Purchaser’s calculations and amounts set forth in the Post-Closing Working Capital Certificate, Purchaser shall pay to Sellers an
amount equal to the excess, if any, of the Final Effective Time Net Working Capital minus the Estimated Effective Time Net Working Capital, or Sellers shall pay to Purchaser an amount equal to the excess, if any, of the Estimated Effective Time Net
Working Capital minus the Final Effective Time Net Working Capital, in each case by wire transfer of immediately available funds to an account designated by the recipient at least two days prior to the date of payment. 
 Section 2.03 Prorations; Adjustments. All personal property taxes and ad valorem taxes with respect to the Acquired Assets and all rent and other
payments under or pursuant to the Scheduled Contracts to the extent not deemed an Acquired Asset or an Assumed Liability shall be apportioned and shall be adjusted, with Sellers being responsible for such taxes and payments relating to the period
ending prior to the Effective Time and Purchaser being responsible for such taxes and payments relating to the period commencing from and after the Effective Time, and the net amount thereof shall be added to or deducted from, as the case may be,
that portion of the Purchase Price paid by Purchaser on the Closing Date. If the amount of any item is not known at the time of Closing, it shall be apportioned on a basis which is agreed to by Purchaser and Sellers prior to the payment of the
Purchase Price with a reapportionment at the later of the payment of the balance of the Purchase Price under Section 2.02 hereof or when definitive data are available. Sellers and Purchaser shall each pay one-half of all sales, use, and other
transfer taxes with respect to the sale and purchase of the Acquired Assets. 
 Section 2.04 Acquired Assets and Sellers’ Employees
in Use. At the Closing, Sellers shall deliver to Purchaser a schedule setting forth all services being performed by Business Employees (as defined in Section 6.13(a) below) and utilizing Equipment as of the Effective Time (“Current
Jobs”), accompanied by a list of all work orders or job tickets under which such Business Employees and Equipment are being utilized, which list shall set forth the rates being paid by Sellers’ customers for such Business Employees and
Equipment. From and after the Effective Time, the Business Employees and Equipment being utilized for the Current Jobs shall be deemed to have been rented to Tong Specialty by Purchaser under the terms and conditions of the Preferred Provider
Agreement (as defined in Section 5.01(j) below), except that Tong Specialty shall only pay to Purchaser as a rental fee for such Business Employees and Equipment in connection with completion of such Current Jobs those revenue amounts specified
in the next sentence of this Section 2.04. All payments and revenues received or receivable from Sellers’ customers with respect to Current Jobs for the periods prior to the Effective Time will be the property of Sellers, and all payments
and revenues received or receivable from Sellers’ customers with respect to Current Jobs for periods from and after the Effective Time will be the 

  

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property of Purchaser. Sellers will invoice customers in accordance with their customary practices for rental fees for Current Jobs until such time as the
Current Jobs are completed and will promptly, after the Closing, remit to Purchaser any revenues received by Sellers which belong to Purchaser pursuant to this Section 2.04. 
 Section 2.05 Like Kind Exchange. Purchaser may consummate the purchase of all or part of the Acquired Assets as part of a so-called like kind
exchange (the “Exchange”) pursuant to §1031 of the Internal Revenue Code of 1986, as amended (the “Code”), provided that (i) all costs, fees and expenses attendant to the Exchange shall be the
responsibility of Purchaser and (ii) Sellers shall not be required to acquire or hold title to any property or assets other than the Acquired Assets for purposes of consummating the Exchange but rather the Exchange shall be affected through an
assignment by Purchaser of its rights under this Agreement to a qualified intermediary. In the event that all conditions precedent to the consummation of the transaction have been satisfied, Sellers hereby agree that the Closing may be delayed to
permit Purchaser to effect the Exchange, provided that in no event may Purchaser delay such Closing beyond the date set forth in Section 10.01(e) hereof. Sellers shall not, by this Agreement or acquiescence to the Exchange, (1) have their
rights under this Agreement, including (without limitation) those that survive Closing, affected or diminished in any manner or (2) be responsible for compliance with or be deemed to have warranted to Purchaser that the Exchange in fact
complies with §1031 of the Code. Sellers acknowledge that Purchaser, in order to effect a like kind exchange, may assign its rights hereunder to purchase all or part of the Acquired Assets to a third party, but that such assignment shall in no
way release Purchaser from any of its obligations under this Agreement. 
 Section 2.06 Allocation of Consideration. Sellers and
Purchaser agree that the sale of the Business is subject to Section 1060 of the Code. The Purchase Price shall be allocated among the Acquired Assets in accordance with Schedule 2.06. Purchaser and Sellers agree (a) to treat
and report for income tax purposes the transactions contemplated by this Agreement in a manner consistent with the allocations set forth in Schedule 2.06, and (b) not to take any action for income tax purposes inconsistent with such
allocation. Sellers and Purchaser shall duly prepare and timely file such reports and information returns as may be prescribed under Section 1060 of the Code, including Form 8594, and any similar returns or reports required under other
applicable law, to report the allocation of the Purchase Price in accordance with Schedule 2.06. Sellers and Purchaser acknowledge and agree that the allocations made pursuant to this Section 2.06 are solely for income tax purposes.
Sellers and Purchaser will notify the other in the event of an examination, audit or other proceeding regarding the agreed upon allocation of the Purchase Price. 
 ARTICLE III 
 ASSUMED LIABILITIES; RETAINED LIABILITIES 
 Section 3.01 Assumed Liabilities. In furtherance of the parties intentions set forth in Section 1.01 and subject to the terms and conditions
set forth in this Agreement, at the Closing Purchaser shall assume and agree to pay or perform as and when due the following liabilities (the “Assumed Liabilities”): 
 (a) those accounts payables, current portion of vehicle leases and accrued bonuses which are current liabilities of Sellers and used to
calculate the amount of Net Working Capital pursuant to Section 2.02; 
  

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 (b) all liabilities and obligations under the Scheduled Contracts that are first required
to be performed from and after the Effective Time (but excluding any liabilities or obligations which are attributable to a Seller’s violation or breach of any Scheduled Contract); and 
 (c) all liabilities and obligations arising out of or related to the business, operations or activities conducted by Purchaser or any of
its Affiliates in connection with the Business or the Acquired Assets from and after the Effective Time. 
 The foregoing Assumed Liabilities are the only
liabilities or obligations with respect to the Business or the Acquired Assets which are being assumed by Purchaser. 
 Section 3.02
Retained Liabilities. In furtherance of the parties intentions set forth in Section 1.01, Sellers acknowledge and agree that they are responsible for and shall indemnify and hold harmless Purchaser from and against any and all claims,
liabilities, losses or obligations arising out of or in connection with the Acquired Assets or the Business other than the Assumed Liabilities (the “Retained Liabilities”), including: 
 (a) any accrued salaries, bonuses or other accrued compensation or employee benefits of any employees of Sellers other than accrued
bonuses included as a current liability in the calculation of Net Working Capital pursuant to Section 2.02; 
 (b) any
obligations to employees or consultants of Sellers under any employment, consulting, change of control or severance agreements; 
 (c) all obligations of Sellers under this Agreement; 
 (d) all taxes with respect to the ownership of the Acquired
Assets or conduct of the Business with respect to all periods ending prior to the Effective Time; 
 (e) all fees and expenses
owed to third parties incurred in connection with the sale of the Acquired Assets; 
 (f) any contracts, agreements or
instruments to which Sellers or any of their Affiliates is a party or any of the Acquired Assets are bound, whether or not relating to the Business other than liabilities arising after the Closing under Scheduled Contracts; 
 (g) all obligations of Sellers with respect to any indebtedness, including but not limited to indebtedness for borrowed money and the
other obligations described on Schedule 3.02(g); 
 (h) all obligations of Sellers to Affiliates of Sellers, to
the extent not used to calculate the amount of Net Working Capital pursuant to Section 2.02; and 
  

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 (i) all liabilities and obligations arising out of or related to the business, operations
or activities conducted by Sellers in connection with the Business, to the extent not an Assumed Liability or used to calculate the amount of Net Working Capital pursuant to Section 2.02. 
 ARTICLE IV 
 THE CLOSING 
 Section 4.01 Time and Place. The closing of the transfer and delivery of the documents and instruments necessary to consummate the purchases and
sales contemplated by this Agreement (the “Closing”) shall be held at the offices of Purchaser’s counsel, Vinson & Elkins, L.L.P., 1001 Fannin, Houston, Texas, at 9 a.m. (Houston, Texas time) on November 1, 2005
as soon as possible, but in no event later than five business days after satisfaction or waiver of the conditions set forth in Article V, or at such other time or place as Purchaser and Sellers may agree. The date on which the Closing is
actually closed hereunder is sometimes referred to herein as the “Closing Date.” 
 Section 4.02 Documents to be
Delivered By Sellers. At the Closing: 
 (a) Sellers shall execute and deliver to Purchaser (or its designee) an
Assignment and Bill of Sale, in the form attached hereto as Exhibit A, conveying to Purchaser (or such designee) good and marketable title to the Acquired Assets; 
 (b) Sellers shall deliver to Purchaser a copy of the resolutions adopted by the Board of Managers of Lamb Energy authorizing the execution
and delivery of this Agreement by Lamb Energy and Tong Specialty, as its sole member, and the consummation of the transactions contemplated hereby, in each case duly certified as of the Closing Date by the Secretary of Lamb Energy; 
 (c) Sellers shall deliver a copy of the certificate of formation or articles of organization, as applicable, of each Seller certified as
true and correct by the Secretaries of State of the States of Delaware and Louisiana, as applicable, and a certificate of good standing of each Seller issued by such Secretaries of State as of a date not more than 10 days prior to the Closing Date;

 (d) Sellers shall deliver evidence satisfactory to Purchaser of the release (subject to filing with the applicable
governmental authority) of all Encumbrances (as defined in Section 6.03 below), other than Permitted Encumbrances (as defined in Section 6.03 below), affecting the Acquired Assets; 
 (e) Sellers shall execute and deliver lease agreements (the “Founder Lease Agreements”) respecting the property of
Sellers located at Lafayette, Louisiana in the form attached hereto as Exhibit B; and 
 (f) Sellers shall execute
and deliver to Purchaser such other agreements and instruments as may reasonably be required to consummate the transactions contemplated by this Agreement. 
  

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 Section 4.03 Documents to be Delivered by Purchaser. At the Closing: 
 (a) Purchaser shall pay the Purchase Price; 
 (b) Purchaser shall execute and deliver to Sellers the Assignment Agreement, assuming from Seller the intangible Acquired Assets being assigned by Sellers; 
 (c) Purchaser shall deliver to Sellers a copy of the resolutions adopted by the Board of Directors of Purchaser, authorizing the execution
and delivery of this Agreement by Purchaser and the consummation of the transactions contemplated hereby, in each case duly certified as of the Closing Date by the Secretary or any Assistant Secretary of Purchaser; 
 (d) Purchaser shall deliver a copy of the articles of incorporation of Purchaser certified as true and correct by the Registrar of Alberta
and a certificate of good standing of Purchaser issued by such Registrar as of a date not more than 10 days prior to the Closing Date; and 
 (e) Purchaser shall execute and deliver to Sellers such other agreements and instruments as may reasonably be required to consummate the transactions contemplated by this Agreement. 
 ARTICLE V 
 CONDITIONS TO CLOSING

 Section 5.01 Purchaser’s Conditions to Closing. The obligations of Purchaser to consummate the transactions contemplated
by this Agreement shall be subject to the fulfillment to Purchaser’s reasonable satisfaction of each of the following conditions: 
 (a) The representations and warranties of Sellers herein contained shall be true and correct (i) in all material respects with respect to representations and warranties which are not modified by materiality and
(ii) in all respects with respect to representations and warranties which are modified by materiality, in either case, on and as of the Closing Date with the same force and effect as though made as of such date, except for any variations
permitted by this Agreement. 
 (b) Sellers shall have performed and complied with in all material respects the covenants and
agreements contained in this Agreement that are required to be performed or complied with by Sellers on or prior to the Closing Date. 
 (c) Sellers shall have secured in writing all consents and approvals described in Schedule 5.01(c), in form and substance satisfactory to Purchaser, by and from all third parties whose consent and approval is
required by contract or law for the consummation of the transactions herein contemplated or shall have otherwise provided alternative or substitute arrangements in accordance with Section 1.04. 
 (d) Sellers shall have delivered all documents required to be delivered by Sellers at Closing, as more specifically set forth in Article
IV of this Agreement, in each case in form and substance reasonably satisfactory to Purchaser. 
  

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 (e) Sellers shall have secured all appropriate orders, consents, approvals and
clearances, in form and substance reasonably satisfactory to Purchaser, by and from all third parties, including regulatory agencies and other governmental authorities and agencies, whose order, consent, approval or clearance is required by contract
or law for Seller’s consummation of the transactions herein contemplated, and shall have delivered copies thereof to Purchaser. 
 (f) There shall not have been any material adverse change since June 30, 2005 in Sellers’ business, financial condition, assets or operations or any occurrence or circumstance which could reasonably be expected to have such a
material adverse change, other than a material adverse change arising from events or conditions relating to the economy in general or the oil and gas industry in general and not specifically relating to Sellers. 
 (g) There shall be no pending or threatened litigation relating to this Agreement or the transactions contemplated hereby. 
 (h) Each of those key employees listed on Schedule 5.01(h) attached hereto shall have executed and delivered to Purchaser an
Employment Agreement (including non-competition covenants) in the form attached hereto as Exhibit C. 
 (i) SESI
shall have executed and delivered to Purchaser or a designated Affiliate of Purchaser, a Preferred Provider Agreement (for power swivels and tongs) in the form of Exhibit D (the “Preferred Provider Agreement”).

 Section 5.02 Sellers’ Conditions to Closing. The obligation of Sellers to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment to Sellers’ reasonable satisfaction of the following conditions: 
 (a) The
representations and warranties of Purchaser herein contained shall be true and correct (i) in all material respects with respect to representations and warranties which are not modified by materiality and (ii) in all respects with respect
to representations and warranties which are modified by materiality, in either case, on and as of the Closing Date with the same force and effect as though made as of such date, except for any variations permitted by this Agreement. 
 (b) Purchaser shall have performed and complied with in all material respects the covenants and agreements contained in this Agreement
that are required to be performed or complied with by Purchaser on or prior to the Closing Date. 
 (c) Purchaser shall have
delivered all documents required to be delivered by Purchaser at Closing, as more specifically set forth in Article IV hereof, in each case in form and substance reasonably satisfactory to Sellers. 
 (d) Purchaser shall have secured all appropriate orders, consents, approvals and clearances, in form and substance reasonably satisfactory
to Sellers, by and from all parties, including regulatory agencies and other governmental authorities and agencies, whose order, consent, approval or clearance is required by contract or law for Purchaser’s consummation of the transactions
herein contemplated, and shall have delivered copies thereof to Sellers. 
 (e) There shall be no pending or threatened
litigation relating to this Agreement or the transactions contemplated hereby. 
  

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 ARTICLE VI 
 REPRESENTATIONS AND WARRANTIES OF SELLER 
 Sellers and the Stockholders jointly and severally
represent and warrant (except with respect to Section 6.04, whereby Sellers and Stockholders jointly but not severally represent and warrant) to Purchaser as follows: 
 Section 6.01 Organization of Sellers; Authority. Lamb Energy is a limited liability company duly formed, validly existing, and in good standing
under the laws of Delaware. Tong Specialty is a limited liability company duly formed, validly existing and in good standing under the laws of Louisiana. Sellers have all requisite power and authority to own and hold the Acquired Assets owned or
held by them, to carry on the Business in each jurisdiction where the Business is conducted, and to own or lease and operate their properties consistent with the manner in which the Business is now conducted and such properties are now owned,
leased, or operated. Sellers have all requisite power and authority to execute and deliver this Agreement and all other agreements, documents, and instruments contemplated hereby and to carry out all actions required of Sellers pursuant to the terms
of this Agreement and such other agreements. This Agreement has been duly executed and delivered by Sellers and constitutes the legal, valid, and binding obligation of Sellers, enforceable against Sellers in accordance with its terms. All related
agreements to be entered into by Sellers at Closing will, at Closing, have been duly executed and delivered by Sellers and will constitute the legal, valid and binding obligations of Sellers, enforceable against Sellers in accordance with their
terms. 
 Section 6.02 Noncontravention. Neither the execution and delivery of this Agreement by Sellers nor the consummation by
Sellers of the transactions contemplated hereby will constitute a violation of, or be in conflict with, or constitute or create a default under, or result in the creation or imposition of any Encumbrance other than a Permitted Encumbrance upon any
assets or property of Sellers (including, without limitation, any of the Acquired Assets) pursuant to (a) the certificate of formation or articles of organization or limited liability company or operating agreement, as applicable, of Sellers,
each as amended to date; (b) any Scheduled Contract or any other material contract, agreement or commitment to which a Seller is a party or by which a Seller or any of its assets or properties (including, without limitation, any of the Acquired
Assets) are bound or subject to, except as otherwise provided in Schedule 6.08(b) attached hereto; or (c) any statute or any judgment, decree, order, regulation, or rule of any court or governmental authority to which Sellers are
subject. 
 Section 6.03 Title to Acquired Assets. Sellers are the lawful owners of, have good and valid record and marketable title
to, or in the case of leased or licensed Acquired Assets, have valid leasehold interests in or valid licenses to use, the Acquired Assets. Except as set forth on Schedule 6.03, all of the Acquired Assets are held by Sellers free and
clear of any security interest, liens, claims, charges, options, mortgages, debts, leases (or subleases), conditional sales agreements, title retention agreements, encumbrances of any kind, or restrictions against the transfer or assignment thereof
(collectively, “Encumbrances”), except for (a) encumbrances or liens created by this Agreement; (b) mechanics’, carriers’, workmen’s, warehousemen’s, 

  

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repairmen’s or other like liens arising in the ordinary course of business and securing obligations not yet due; (c) encumbrances or liens for
taxes and other governmental obligations not yet due or being contested in good faith and fully reserved against on the books of the respective Seller of the specific Acquired Assets to which they relate; and (d) encumbrances or liens listed on
Schedule 6.03 (collectively, “Permitted Encumbrances”). At and as of the Closing, Sellers will convey the Acquired Assets to Purchaser by deeds, bills of sale, certificates of title, and instruments of assignment and
transfer effective to vest in Purchaser, and Purchaser will have good and valid record and marketable title to, or in the case of leased or licensed Acquired Assets, valid leasehold interests in or valid licenses to use, all of the Acquired Assets,
free and clear of all Encumbrances other than Permitted Encumbrances. 
 Section 6.04 Ownership; No Equity Interests. Lamb Energy is
the beneficial and record owner of all of the issued and outstanding membership interest of Tong Specialty. LES is the beneficial and record owner of 45.7% of the issued and outstanding membership interest of Lamb Energy and SESI is the beneficial
and record owner of 54.3% of the issued and outstanding membership interest of Lamb Energy. Lamb, Daigle and Reaux are the beneficial and record owners of 60%, 20% and 20%, respectively, of LES (the “LES Ownership Interests”).
Superior Energy Services, Inc. is the 100% beneficial and record owner of SESI. The Acquired Assets do not include any equity interest, or any security convertible, exercisable or exchangeable into any equity interest, in any person. 
 Section 6.05 Absence of Changes. Except as set forth on Schedule 6.05, since December 31, 2004: 
 (a) there has not been any material adverse change in Sellers’ business, financial condition, assets or operations or any occurrence
or circumstance which could reasonably be expected to have such a material adverse change, other than a material adverse change arising from events or conditions relating to the economy in general or the oil and gas industry in general and not
specifically relating to Sellers; 
 (b) the Acquired Assets and the Business have been operated and maintained in the
ordinary course of business; 
 (c) there has not been any damage, destruction or casualty loss affecting any portion of the
assets or properties of Sellers related to the Business in any material respect or affecting any Acquired Asset, whether covered by insurance or not; 
 (d) there has not been any sale, transfer, lease, abandonment, or other disposal of any of the fixed Acquired Assets reflected on the June 30, 2005 balance sheet of Sellers heretofore provided to the Purchaser,
and there has not been any sale, transfer, lease, abandonment, or other disposal of any other property or assets of Sellers related to the Business, except in the ordinary course of business and consistent with past practices where such sale,
transfer, lease, abandonment or disposal would not reasonably be expected to have a material and adverse impact on the Business or comparable replacement property or assets have been acquired and are included in the Acquired Assets; 
  

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 (e) there has been no merger or consolidation of Sellers with any other person or any
agreement with respect thereto; 
 (f) there have been no distributions declared or made by Sellers; 
 (g) there has, to the Knowledge of Sellers, not been any actual, pending or threatened discontinuance of or material and adverse
alteration in the relationship of Seller with any Material Customer or Material Supplier (each as defined in Section 6.17 below); 
 (h) Sellers have not entered into any employment, consulting, severance or indemnification agreement or an agreement with respect to a retention bonus with any of the employees of the Business; 
 (i) Sellers have not entered into any collective bargaining agreement or incurred any other obligation to any labor organization;

 (j) there has been no increase in the compensation or benefits of any officer or employee of the Business not in the
ordinary course of business; and 
 (k) there is no contract or agreement to do any of the foregoing, except as expressly
permitted by this Agreement. 
 Section 6.06 Personal Property. 
 (a) Schedule 1.02(a) lists each item of equipment, tools, machinery, parts, materials, supplies, furniture, cars, trucks,
trailers and other rolling stock and each other item of tangible personal property used or held for use by Sellers in connection with the Business (excluding any Excluded Assets) which individually has a book value (as reflected on the books and
records of Seller) in excess of $10,000. 
 (b) The personal property included in the Acquired Assets, taken as a whole, is in
suitable and adequate condition and working order (subject to ordinary wear and tear) for use in the Business as same is being conducted at the Effective Time. 
 Section 6.07 Permits. Schedule 6.07 lists all material permits, authorizations, certifications, approvals, ordinances, licenses and other similar rights granted by any governmental authority and
used or held by Sellers in connection with the ownership and operation of the Acquired Assets or conduct of the Business (the “Scheduled Permits”). Except as set forth in Schedule 6.07, the Scheduled Permits are valid
and in full force and effect and Sellers are not in default, and no condition exists that with notice or lapse of time or both would constitute a default, under any of the Scheduled Permits. 
 Section 6.08 Contracts. 
 (a) True and complete copies (including all amendments) of each written Scheduled Contract, and written summaries of each verbal Scheduled Contract, have been provided or made available to Purchaser. Except as disclosed in
Schedule 6.08(a): (i) each Scheduled Contract is the legal, valid obligation of the applicable Seller, and to the Knowledge 

  

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of such Seller, any other person party thereto, binding and enforceable against the applicable Seller and, to the Knowledge of such Seller, any other person
party thereto, in accordance with its terms; (ii) neither the applicable Seller nor, to the Knowledge of such Seller, any other person is in material breach or default under a Scheduled Contract, and to the Knowledge of such Seller no event has
occurred that with notice or lapse of time, or both, would constitute a material breach or default, or permit termination, modification in any manner adverse to the applicable Seller or acceleration thereunder; and (iii) no party has asserted
or has any right to offset, discount or otherwise abate any amount owing under the Scheduled Contract except as expressly set forth in such Scheduled Contract. 
 (b) Except as disclosed in Schedule 6.08(b), each Scheduled Contract may be assigned to Purchaser without the consent of any
party thereto in connection with the transactions contemplated by this Agreement. Except as disclosed in Schedule 6.08(b), the assignment of any Scheduled Contract will not provide any party thereto the right to terminate such Scheduled
Contract or alter the rights and obligations of the parties thereto or the terms of such Scheduled Contract in any material respect. 
 (c) Schedule 6.08(c) attached hereto lists each material written contract or agreement (other than a Scheduled Contract) to which a Seller is party or by which the Acquired Assets are bound that (i) involves the borrowing of
money by any Seller or the guarantee of any obligation for the borrowing of money by any Seller, (ii) involves the purchase or commitment for the purchase or sale of goods, materials, supplies or services involving payments of more than
$125,000 in any 12 month period; (iii) grants a security interest involving the borrowing of money by, or an extension of credit (other than trade credit) to, a Seller; (iv) involves the commitment to make a capital expenditure in excess
of $100,000 with respect to the Business; (v) involves the sale, lease or other disposition of any assets or properties of the Sellers other than in the ordinary course of business; (vi) grants any Person an exclusive right to sell
products or provide services in any geographical region; (vii) purports to limit the freedom of any Seller or the Business to compete in any line of business or to conduct business in any geographical location, which right or limitation would
burden the Buyer or the Business as continued following the Closing; (viii) is a joint venture or partnership agreement or (ix) master service agreements with third parties. 
 (d) Sellers acknowledge and agree that all Retained Contracts shall remain the obligation of Sellers, and Purchaser shall have no
liability or obligations arising out of or related thereto. 
 Section 6.09 Intellectual Property. 
 (a) Schedule 6.09 identifies all material Intellectual Property owned or used in the conduct of the Business (the “Seller
Intellectual Property”), other than Intellectual Property that is generally commercially available. The Seller Intellectual Property constitutes all Intellectual Property Rights necessary for the continued operation of the Business
consistent with the past practices of the Business since December 31, 2004. 
 (b) Sellers have ownership of, or valid
licenses to use, all Intellectual Property, free and clear of all Encumbrances other than Permitted Encumbrances. Upon the 

  

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consummation of the transactions contemplated by this Agreement and receipt of all required consents, Purchaser will have good and marketable title to the
Seller Intellectual Property free and clear of all Encumbrances, other than Permitted Encumbrances, or in the case of licensed Seller Intellectual Property, valid licenses to use such Seller Intellectual Property. 
 (c) To the Knowledge of Sellers, there has been no material infringement or misappropriation (or facts that are reasonably likely to give
rise to a material infringement or misappropriation) by Sellers of any patents, trademarks, technology, know-how, data, copyrights, tradenames, service marks, licenses and other intellectual property of third persons or of any continuing material
infringement or misappropriation (or facts that are reasonably likely to give rise to a material infringement or misappropriation) by any other person of any of the Intellectual Property. No Intellectual Property is subject to any outstanding order,
judgment, decree, stipulation or agreement restricting the use thereof. 
 (d) Except as set forth on Schedule 6.09,
all fees, annuities and other payments which are due on or before the Closing Date for any of the Seller Intellectual Property including, without limitation, all United States or foreign patents, patent applications, trademark registrations, service
mark registrations, copyright registrations and any applications for any of the preceding, have been met or paid in full. 
 Section 6.10
Brokers’ Fees. Neither Sellers nor any of their Affiliates has any liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement for which Purchaser
or any of its Affiliates could become liable or obligated. 
 Section 6.11 Taxes. (a) Except as set forth on
Schedule 6.11, (i) all tax returns required to be filed by Sellers with respect to any of the Acquired Assets or the Business have been duly and timely filed with the appropriate governmental authority, (ii) all tax items
required to be included in each such tax return have been so included and all such tax items and any other information provided in each such tax return is true, correct and complete in all material respects, (iii) all taxes owed by Sellers with
respect to any of the Acquired Assets or the Business that are or have become due have been timely paid in full, (iv) all tax withholding and deposit requirements imposed with respect to any of the Acquired Assets or the Business have been
satisfied in full in all respects, (v) there is no claim pending or, to the Knowledge of Sellers, threatened by any governmental authority in connection with any such tax, and (vi) none of such tax returns are now under audit or
examination by any governmental authority. 
 (b) Sellers acknowledge and agree that all taxes relating to the ownership of
the Acquired Assets or conduct of the Business prior to the Effective Time shall remain the obligation of Sellers, and Purchaser shall have no liability or obligations arising out of or related thereto. 
 (c) For purposes of this Agreement, the terms “taxes,” “tax items” and “tax returns” shall have the meanings
prescribed below: 
 (i) “tax” or “taxes” means any taxes, assessments, fees and other governmental
charges imposed by any governmental authority, including without 

  

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limitation income, profits, gross receipts, net proceeds, alternative or add-on minimum, ad valorem, value added, turnover, sales, use, property, personal
property (tangible and intangible), environmental, stamp, leasing, lease, user, excise, duty, franchise, capital stock, transfer, registration, license, withholding, social security (or similar), unemployment, disability, payroll, employment, fuel,
excess profits, occupational, premium, severance, estimated, or other charge of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not; 
 (ii) “tax items” means all items of income, gain, loss, deduction and credit and other tax items; and 
 (iii) “tax return” means any return, declaration, report, claim for refund, or information return or statement relating to
taxes, including any schedule or attachment thereto, and including any amendment thereof. 
 Section 6.12 Product and Service
Warranty. No warranty claims have been asserted during the three year period prior to the date hereof in connection with the operation of the Acquired Assets or the Business from which any Seller has incurred costs in excess of $25,000.

 Section 6.13 Employees; Employee Relations. 
 (a) Neither of Sellers nor any of their Affiliates is a party to or bound by any collective bargaining agreement applicable to any
employee of Sellers involved in the Business (“Business Employee”), nor have Sellers experienced any strikes, grievances, claims of unfair labor practices, or other collective bargaining disputes with respect to any Business
Employee during the five-year period prior to the date of this Agreement. To Seller’s Knowledge, neither Seller has committed any unfair labor practice with respect to any Business Employee during such five year period which practice could
reasonably be expected to have an adverse impact on the conduct of the Business by Purchaser following Closing. To the Knowledge of Sellers, no organizational efforts are presently being made or threatened by or on behalf of any labor union with
respect to any Business Employees. 
 (b) No legal proceedings, charges, complaints, grievances or similar actions have been
commenced with respect to Sellers under any laws or regulations affecting the employment relationship, and, to the Knowledge of Sellers, no proceedings, charges, or complaints are threatened under any such laws or regulations and no facts or
circumstances exist which would give rise to any such proceedings, charges, complaints, or claims. Sellers are not subject to any settlement or consent decree with any present or former employee, employee representative or any governmental authority
relating to claims of discrimination or other claims in respect to employment practices and policies. No governmental authority has issued a judgment, order, decree or finding with respect to the labor and employment practices (including practices
relating to discrimination) of Sellers. 
 (c) Schedule 6.13 sets forth a true, correct and complete list, as of
the date of this Agreement, of all Business Employees. The list described in the preceding sentence shows each Business Employee’s name, job title, original hire date, bonus paid or payable for calendar 

  

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year 2004 and current base salary or base wages. As of the date of this Agreement, no current or former Business Employee of Sellers is on a disability leave
of absence, is receiving disability benefits, or is in an elimination or other waiting period with respect to his or her receipt of disability benefits. There are no loans or other obligations payable or owing by Sellers to any Business Employee,
except salaries, wages and salary advances and reimbursement of expenses incurred and accrued in the ordinary course of business, nor are any loans or debts payable or owing by any such individuals to Sellers, nor have Sellers guaranteed any of such
individual’s respective loans or obligations. There are no contracts of employment with any of the Business Employees except as listed on Schedule 6.13. True and complete copies (including all amendments) of each such contract of
employment with any of the Business Employees have been provided to Purchaser. 
 Section 6.14 Employee Benefit Plans. There are no
existing employee benefit plans relating to the Business or covering any Business Employees for which Purchaser will have any responsibility or liability from and after the Effective Time. 
 Section 6.15 Environmental Matters. 
 (a) None of the Acquired Assets or other property used in the Business is subject to any Encumbrance imposed by or arising under any environmental law, and there are no proceedings pending or threatened for imposition
of any such Encumbrance. 
 (b) The Business and the Acquired Assets are currently, and have at all times in the past been
operated by Sellers, in compliance in all material respects with the requirements of applicable environmental laws. Sellers have not received any communication in any form from any governmental authority or any other person alleging that Sellers are
not in compliance with any environmental law applicable to the Business. 
 (c) There are no present or past actions,
activities, circumstances, conditions, events or incidents, including, without limitation, any release of any hazardous materials, with respect to the Business or the Acquired Assets that could reasonably be expected to form the basis for assertion
of any environmental liability against any owner or operator of the Business or the Acquired Assets. There has been no release of hazardous materials in connection with the Business for which all clean-up, remediation and restoration actions
required under environmental laws have not been performed and completed to the satisfaction of the relevant governmental authority. To the Knowledge of Sellers, there is no asbestos contained in or forming part of any equipment property, building,
building component, structure or office space used in connection with the Business. 
 (d) There are no proceedings pending
or, to the Knowledge of Sellers, threatened against Sellers or any predecessor with respect to the operation of the Business, against the Business itself or any property or assets used therein, in which any violation of any environmental law is
alleged or any environmental liability is asserted. 
 (e) Sellers have provided or made available to Purchaser all internal
and external environmental audits, assessments, reports, studies, documents, and correspondence on 

  

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environmental matters and compliance with environmental laws relating to the operation of the Business and use of the Acquired Assets that are in the
possession or control of Sellers. 
 Section 6.16 Property Matters. 
 (a) Except for the real property listed on Schedule 6.16 (which are Excluded Assets) and the Scheduled Leasehold Interests,
Sellers do not own or have any interest in any real property (beneficially or of record). 
 (b) Sellers have a valid
leasehold estate in and to the Scheduled Leasehold Interests, in each case, free and clear of Encumbrances, other than Permitted Encumbrances. Sellers have provided Purchaser with true and complete copies (including all amendments) of each Lease
Agreement. Sellers validly occupy the improvements located on the lands covered by each of the Lease Agreements in accordance with the terms thereof, unencumbered by any Encumbrances, other than Permitted Encumbrances. 
 (c) Other than Sellers and except as set forth on Schedule 6.16, there are no parties physically occupying or using any
portion of any real property covered by the Lease Agreements, nor do any other parties have the right to physically occupy or use any portion of the real property covered by the Lease Agreements Sellers have such rights of entry to and exit from the
real property covered by the Lease Agreements and the facilities located thereon as is necessary to carry on the Business consistent with past practices. 
 Section 6.17 Customers, Vendors and Suppliers. Schedule 6.17 sets forth a list of the top 10 customers (“Material Customers”) and top 10 vendor/suppliers (“Material
Suppliers”) of the Business for the fiscal year ended December 31, 2004 and for the nine months ended September 30, 2005. To the Knowledge of Sellers, no such customer, vendor or supplier has communicated any present intention to
discontinue or materially and adversely alter its relationship as such with the Business or Purchaser upon consummation of the transactions contemplated hereby. 
 Section 6.18 Insurance. The Insurance Policies constitute all policies, binders, and insurance contracts under which the Business or any of the Acquired Assets is insured, all of which provide for coverage in
customary amounts for companies in the same industry and of the same or substantially similar size as Sellers. 
 Section 6.19
Inventories. Except as disclosed on Schedule 6.19, the Inventories were acquired for sale in the ordinary course of business and are in good and saleable condition. None of such Inventories is subject to any consignment, bailment,
warehousing or similar arrangement. 
 Section 6.20 Assets Necessary to the Business. At the Closing, the Acquired Assets transferred
to Purchaser pursuant hereto and the Excluded Assets constitute all of the assets of Sellers and their Affiliates used in the Business presently and since December 31, 2004 other than immaterial assets disposed of in the ordinary course of
business. 
 Section 6.21 Conformity to Law. Sellers have complied in all material respects with, and are in compliance in all
material respects with, (a) all laws, statutes, governmental 

  

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regulations, and all judicial or administrative tribunal orders, judgments, writs, injunctions, decrees, or similar commands applicable to the Business or
any of the Acquired Assets (including, without limitation, any labor, environmental, occupational health, zoning, or other law, regulation, or ordinance); and (b) their certificate of formation or articles of organization, limited liability
company or operating agreement, as applicable, or other organizational documents, each as amended to date. Sellers have not been charged with, or to the Knowledge of Sellers been under investigation with respect to, any violation of any provision of
any law or regulation in respect of the Business or any of the Acquired Assets. 
 Section 6.22 Accounts Receivable. All accounts
receivable of Sellers constituting part of the Acquired Assets represent or will represent valid obligations arising from sales actually made or services actually performed in the ordinary course of business, free and clear of all Encumbrances.

 Section 6.23 Financial Statements. Attached hereto as Schedule 6.23 are copies of the unaudited consolidated balance
sheet of Lamb Energy at September 30, 2005 (the “Reference Balance Sheet”) and the related unaudited statements of income for the nine-months then ended (collectively, the “Financial Statements”). Except as set
forth on Schedule 6.23, the Financial Statements (including any related notes thereto) (i) have been prepared in accordance with generally accepted accounting principles, consistently applied throughout the period covered thereby,
except as otherwise noted therein, (ii) fairly present the financial condition, assets and results of operations of Sellers as of the respective dates thereof and for the respective periods covered thereby, and (iii) have been prepared
from, and are in accordance with, the books and records of Sellers. 
 Section 6.24 Safety Performance. Sellers and the Business are
in compliance in all material respects with all laws and regulations applicable to Sellers or the Business which impose safety standards or safety compliance requirements. Attached as Schedule 6.24 hereto are accurate and complete reportable
incident reports and safety statistics of Sellers for the periods designated in such schedule. 
 Section 6.25 Condition of Assets.

 (a) PURCHASER ACKNOWLEDGES THAT (I) IT HAS HAD ACCESS TO SELLERS AND THE OFFICERS AND EMPLOYEES OF SELLERS AND
(II) IN MAKING THE DECISION TO ENTER INTO THIS AGREEMENT AND CONSUMMATE THE TRANSACTIONS CONTEMPLATED UNDER THIS AGREEMENT, PURCHASER HAS RELIED SOLELY ON ITS OWN INDEPENDENT INVESTIGATION AND UPON THE EXPRESS REPRESENTATIONS, WARRANTIES,
COVENANTS, AND AGREEMENTS SET FORTH IN THIS AGREEMENT. WITHOUT LIMITING THE ABOVE, PURCHASER HAS, PRIOR TO THE EXECUTION AND DELIVERY OF THIS AGREEMENT, (A) CONDUCTED DUE DILIGENCE TO ITS SATISFACTION AND (B) HAD FULL OPPORTUNITY TO
CONDUCT TO ITS SATISFACTION INSPECTIONS OF THE ACQUIRED ASSETS AND THE BUSINESS, AND FULLY COMPLETED AND APPROVED THE RESULTS OF ALL SUCH INSPECTIONS. PURCHASER ACKNOWLEDGES, AFTER SUCH REVIEW AND INSPECTIONS, THAT NO FURTHER INVESTIGATION OF THE
ACQUIRED ASSETS OR THE BUSINESS IS NECESSARY FOR PURPOSES OF 

  

 20 

 
ACQUIRING THE ACQUIRED ASSETS FOR PURCHASER’S INTENDED USE. PURCHASER ACKNOWLEDGES THAT THERE ARE NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED,
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT. 
 (b) EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, THE EQUIPMENT AND
INVENTORIES INCLUDED IN THE ACQUIRED ASSETS ARE CONVEYED “AS IS, WHERE IS, WITH ALL FAULTS” WITHOUT ANY EXPRESS OR IMPLIED WARRANTY, INCLUDING WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR ANY OTHER SORT OF WARRANTY
WHATSOEVER, WHETHER OF TITLE, OPERATING CONDITION, SAFETY OR COMPLIANCE WITH GOVERNMENTAL REGULATIONS. 
 ARTICLE VII 
 REPRESENTATIONS AND WARRANTIES OF BUYER 
 Purchaser represents and warrants to Sellers as follows: 
 Section 7.01 Organization of Purchaser; Authority. Purchaser is a
corporation duly organized, validly existing, and in good standing under the laws of Alberta, Canada. Purchaser has all requisite power and authority to execute and deliver this Agreement and all other agreements, documents and instruments
contemplated hereby and to carry out all actions required of Purchaser pursuant to the terms of this Agreement and such other agreements. This Agreement has been duly executed and delivered by Purchaser and constitutes the legal, valid, and binding
obligation of Purchaser, enforceable against Purchaser in accordance with its terms. All related agreements to be entered into by Purchaser at Closing will, at Closing, have been duly executed and delivered by Purchaser and will constitute the
legal, valid and binding obligations of Purchaser, enforceable against Purchaser in accordance with their terms. 
 Section 7.02
Noncontravention. Neither the execution and delivery of this Agreement by Purchaser nor the consummation by Purchaser of the transactions contemplated hereby will constitute a violation of, or be in conflict with, constitute, or create a
default under, or result in the creation or imposition of any Encumbrances upon any assets or property of Purchaser pursuant to (a) the charter documents, bylaws or other organizational documents of Purchaser, each as amended to date;
(b) any contract, agreement or commitment to which Purchaser is a party or by which Purchaser or any of its assets or properties is bound or to which Purchaser or any of such assets or properties is subject; or (c) any statute or any
judgment, decree, order, regulation, or rule of any court or governmental authority to which Purchaser is subject. 
 Section 7.03
Brokers. Neither Purchaser nor any of its Affiliates has any liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement for which Sellers or any of
their Affiliates could become liable or obligated. 
  

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 ARTICLE VIII 
 COVENANTS 
 Section 8.01 Conduct of Business. (a) From the date of this Agreement through
the Closing, except as set forth on Schedule 8.01, as contemplated by this Agreement, or as consented to by Purchaser in writing, (a) Sellers shall (x) operate the Business in the ordinary course of business and (y) use
reasonable efforts to preserve intact the Business and its relationship with customers, suppliers and others having relationships with the Business and (b) Sellers shall not: 
 (i) change their accounting methods, policies or practices relating to the Business, except as required by generally accepted accounting
principles; 
 (ii) make, amend or revoke any election with respect to taxes relating to the Business or Acquired Assets;

 (iii) sell, assign, transfer, lease or otherwise dispose of any assets used or usable in the Business in excess of $25,000
individually or $100,000 in the aggregate, except in the ordinary course of business; 
 (iv) create any Encumbrances on any
of the Acquired Assets, other than Permitted Encumbrances; 
 (v) merge into or with or consolidate with any other person or
acquire all or substantially all of the business or assets of any person; 
 (vi) declare or pay any dividend on, or make any
other distribution with respect to, the securities of Lamb Energy; 
 (vii) make any change to their certificate of formation
or articles of organization, limited liability company or operating agreement, as applicable, or other organizational documents; 
 (viii) purchase any securities of any person; 
 (ix) take any action or enter into any commitment as part of any
liquidation, dissolution, recapitalization, reorganization or other winding up of their business or operations; 
 (x) enter
into any settlement of any pending or threatened litigation involving amounts of $25,000 or more; 
 (xi) incur any
indebtedness, except for any such indebtedness that will be repaid in full at Closing or that will not become an obligation of Purchaser and will not create an Encumbrance on any Acquired Asset that is not released at Closing; 
  

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 (xii) terminate or cancel any insurance coverage, except for terminations that occur in
the ordinary course of business and that are renewed in connection therewith; 
 (xiii) make any changes to their billing or
pricing methods or practices; 
 (xiv) materially change the timing and recognition of allowances, rebates or concessions from
suppliers; 
 (xv) hire or terminate any employee or take any actions that would lead to significant loss of services of
employees, except, in both cases, for terminations for cause; 
 (xvi) take any actions that would materially and adversely
change the relationships with providers, suppliers and customers of the Business; 
 (xvii) change or implement severance
compensation benefits for any employee, increase compensation payable or that could become payable, directly or indirectly, to any employee or increase benefits under, or adopt any bonus, insurance, pension or other employee benefit plan payments or
arrangement for or with any employees, all except as are consistent with past practices, or otherwise amend any such plan, payments or arrangements, all except as required by law; 
 (xviii) acquire any asset that would require the payment of $100,000 or more for any such asset, except for acquisitions of inventory in
the ordinary course of business consistent with past practices; 
 (xix) write down Inventories except in each case in
accordance with generally accepted accounting principles; or 
 (xx) agree, whether in writing or otherwise, to do any of the
foregoing. 
 Section 8.02 Access. From the date hereof through the Closing, Sellers shall afford to Purchaser and its authorized
representatives reasonable access, during normal business hours and in such manner as not to unreasonably interfere with normal operation of the Business, to the properties, books, contracts, records and appropriate officers and employees of Sellers
to the extent related to the Business and Acquired Assets, and shall furnish such authorized representatives with all financial and operating data and other information concerning the affairs of Sellers to the extent related to the Business as
Purchaser and such representatives may reasonably request. 
 Section 8.03 Third Party Approvals. Purchaser and Sellers shall (and
shall each cause their respective Affiliates to) use reasonable efforts to obtain all consents and approvals of third parties that any of Purchaser, Sellers or their respective Affiliates are required to obtain in order to consummate the
transactions contemplated hereby. 
  

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 Section 8.04 Non-Competition and Non-Solicitation. 
 (i) Each Seller, Stockholder and Restricted Party, in order to induce Purchaser to enter into this Agreement, expressly covenants and
agrees that during the Prohibited Period (as defined below), such Seller, Stockholder or Restricted Party will not, and such Seller, Stockholder and each Restricted Party will cause its respective Affiliates and equityholders not to, directly or
indirectly, own, manage, operate, control or participate in, hold itself as, or loan money to, any business, individual, partnership, firm, corporation or other entity, which wholly or in any significant part, engages in providing casing, tubular or
testing services required in or related to the drilling, completion and production of oil and gas wells (a “Competing Business”) any place within the states of Texas and Louisiana and any offshore area in the Gulf of Mexico (the
“Territory”); provided, however, that the foregoing shall not preclude or prohibit: (i) SESI or any of its Affiliates from continuing their existing businesses of providing services requiring the use of tongs, power swivels and
related equipment to customers for the following purposes: (A) completions and recompletions, (B) snubbing and well control operations, (C) hydraulic workovers, (D) fishing jobs, (E) mechanical cutting and (F) plug and
abandonment operations; provided, that the foregoing activities are permitted only to the extent that the related casing or tubular services being provided by SESI and its Affiliates are provided as an ancillary component to SESI’s or its
Affiliates existing businesses and SESI and its Affiliates are not (x) participating in a call-out business the primary focus of which is the provision of casing or tubular services of the type performed by Sellers prior to the Effective Time,
and (y) are not marketing or soliciting customers for casing or tubular services as a primary service; (ii) SESI or any of their Affiliates from directly or indirectly acquiring any third party or its business if such third party engages
in or such business includes a Competing Business so long as the revenue derived from such acquired Competing Business during the three years prior to such acquisition does not exceed 10% of the total revenues of such third party or business, as
applicable, for such three year period, provided that SESI or such Affiliate disposes of the acquired Competing Business within 180 days following closing of such acquired business; (iii) LES or any of its Affiliates from continuing their
existing businesses of (A) buying and selling, but not renting (except renting, on an occasional basis, to service providers engaged in the Business), casing and tubing equipment within the Territory and (B) engaging in a Competing
Business involving the renting of casing and tubing equipment in Mexico or the Mexican portion of the Gulf of Mexico or (iv) any entity who becomes an Affiliate of SESI as a result of a Change of Control Transaction (as defined below) from
continuing to engage in a Competing Business if , but only to the extent that , such entity was engaged in the Competing Business in the ordinary course prior to completion of the Change of Control Transaction. “Prohibited Period”
shall mean four years from and after the Closing Date. “Change of Control Transaction” means any transaction or event pursuant to which (i) the equity owners of Superior Energy Services, Inc. (“SPN”) as of
October 31, 2005 (the “Current Holders”) cease to collectively own more than fifty percent (50%) of the equity interests in SPN (on an as converted basis); (ii) any acquisition by any person or “group”
(within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, other than the Current Holders of more than fifty percent (50%) of the equity interests (on an as converted basis) of SPN, (iii) any person or
“group” (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) other than the Current Holders acquires or receives the right to designate a majority of the board of directors of SPN or
(iv) all or substantially all of the assets of SPN are transferred to an entity that is not owned (in substantially the same proportions) by the holders of equity securities of SPN immediately prior to such transaction. 
  

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 (ii) Each Seller, Stockholder and Restricted Party further expressly covenants and agrees
that during the Prohibited Period, it will not, and such Seller, Stockholder, and each Restricted Party will cause its respective Affiliates and shareholders not to, (A) engage or employ, or solicit or contact with a view to the engagement or
employment of any person who is an officer or employee of Purchaser or any of its Affiliates engaged in the Business; or (B) criticize or disparage, whether in writing or orally, Purchaser or any of its Affiliates with respect to their conduct
of the Business from and after the Effective Time; provided, however, that clause (B) shall not prohibit any Seller, Stockholder or Restricted Party from asserting its rights under this Agreement and nothing herein will restrict or prohibit any
Seller, any Stockholder or Restricted Party from hiring any of the Business Employees listed on Schedule 8.4(a)(ii) following the earlier of (w) the first anniversary of the Closing, (x) any termination by the Purchaser of such
Business Employee’s employment relationship, (y) any termination by such Business Employee of its employment relationship with the Purchaser following a requirement that such Business Employee relocate more than 100 miles from his or her
business location at the Effective Time or any material reduction in the responsibilities and duties of such Business Employee or (z) receipt from Purchaser of a waiver of this Section 8.4(a)(ii) as it relates to such specific Business
Employee. 
 (iii) To the extent that any part of this Section 8.04(i) may be invalid, illegal or unenforceable for any
reason, it is intended that such part shall be enforceable to the extent that a court of competent jurisdiction shall determine that such part, if more limited in scope, would have been enforceable, and such part shall be deemed to have been so
written and the remaining parts shall as written be effective and enforceable in all events. 
 (b) The parties agree and
acknowledge that the limitations as to time, geographical area and scope of activity to be restrained as set forth in Section 8.04(i) are reasonable and do not impose any greater restraint than is necessary to protect the legitimate business
interests of Purchaser. The parties further agree and acknowledge that, in the event of a breach or threatened breach of any of the provisions of this Section 8.04, Purchaser shall be entitled to immediate injunctive relief, as any such breach
would cause Purchaser irreparable injury for which they would have no adequate remedy at law. Nothing herein shall be construed so as to prohibit Purchaser from pursuing any other remedies available to it hereunder, at law or in equity for any such
breach or threatened breach. 
 (c) Each Seller, Stockholder and Restricted Party hereby represents to Purchaser that it has
read and understands and agrees to be bound by, the terms of this Section 8.04. Each Seller, Stockholder and Restricted Party acknowledges that the geographic scope and duration of the covenants contained in this Section 8.04 are the
result of arm’s-length bargaining and are fair and reasonable in light of (i) the nature and geographic scope of the operations of the Business, (ii) Sellers’, Stockholders’ and the Restricted Parties’ level of control

  

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over and contact with the Business in all jurisdictions in which it is conducted, (iii) the fact that the Business is conducted throughout the
geographic area where competition is restricted by this Agreement, and (iv) the amount of consideration that Sellers, Stockholders and the Restricted Parties are receiving in connection with the transactions contemplated by this Agreement and
the amount of goodwill for which Purchaser is paying. It is the desire and intent of the parties that the provisions of this Agreement be enforced to the fullest extent permitted under applicable legal requirements, whether now or hereafter in
effect and therefore, to the extent permitted by applicable legal requirements, the parties hereto waive any provision of applicable legal requirements that would render any provision of this Section 8.04 invalid or unenforceable. 

Section 8.05 Retained Employees. With respect to the Business Employees: 
 (a) Effective as of the Closing, Purchaser shall offer employment to all of the current Business Employees at substantially the same base
compensation as they are currently employed by Sellers. Each such Business Employee who accepts a position shall hereinafter be referred to as a “Retained Employee” and shall become an employee of Purchaser. From and after the
Closing, Retained Employees shall be entitled to participate in employee benefit plans, programs and arrangements that Purchaser maintains or shall establish for similarly situated employees of Purchaser. Retained Employees shall receive service
credit under Purchaser’s plans for service with Sellers, for purposes of vesting and determining whether preexisting conditions shall be satisfied with respect to such plans, programs and arrangements to the extent permitted under
Purchaser’s benefit plans. Purchaser shall further implement and maintain the current bonus program of Sellers with respect to Retained Employees through 2005, and shall make payments to Retained Employees in the amounts and on the dates that
Sellers would otherwise have made pursuant to such bonus program for Retained Employees service during 2005. 
 (b)
Notwithstanding anything to the contrary contained in this Section 8.05, the parties acknowledge and agree that they do not intend to create any third-party beneficiary rights respecting any Business Employee as a result of the provisions
hereof and specifically hereby negate any intention to so create any third-party beneficiary rights. 
 (c) Sellers agree that
they shall be solely responsible for all liability, costs and expenses (including attorneys’ fees) for all employment claims (collectively, the “Employment Claims”) by any employee or former employee of Sellers which accrued
prior to the Closing relating to arbitrations, unfair labor practice charges, employment discrimination charges, wrongful termination claims, workers’ compensation claims, any employment-related tort claim or other claims or charges of or by
employees of Sellers. Purchaser agrees that it shall be responsible for all Employment Claims by any Retained Employee which accrue after the Closing relating to arbitrations, unfair labor practice charges, employment discrimination charges,
wrongful termination claims, workers’ compensation claims, any employment-related tort claim or other claims or charges of or by the Retained Employee. 
 Section 8.06 Use of Name. 
 (a) From and after the Closing Date, Sellers,
Stockholders, the Restricted Parties and their Affiliates will not, directly or indirectly, use in any manner the name “Tong 

  

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Specialty” or any derivatives thereof or any other trade name, trademark, service mark or logo used by Sellers, or any word or logo, that is similar in
sound or appearance, in the Business. Within 60 days after the Closing Date, Tong Specialty shall provide Purchaser with a certified copy of its organizational documents indicating that it has changed its name in accordance with the foregoing
sentence. 
 (b) LES shall retain the name “Lamb Energy Services, Inc.” provided (i) such name shall not be
used in connection with any business enterprise or venture which could reasonably be expected to compete with the Business conducted by Purchaser and (ii) Purchaser shall be entitled to use the logo described on Schedule 8.06(b) in
its conduct of the Business for a six month period from and after the Closing Date. 
 Section 8.07 Further Assurances. Each party
hereto will, at the request of the other, take such further actions as are requested and execute any additional documents, instruments or conveyances of any kind which may be reasonably necessary to further effect the transactions contemplated by
this Agreement; provided, however, that no such action, document, instrument or conveyance shall increase a party’s liability beyond that contemplated by this Agreement. 
 Section 8.08 Confidentiality. Sellers, Stockholders and the Restricted Parties agree that after the Closing Date any facts, information, know-how,
processes, trade secrets, customer lists or confidential matters that relate in any way to the Acquired Assets or the Business shall be maintained in confidence and shall not be divulged by Sellers, Stockholders, the Restricted Parties or any of
their Affiliates to any party unless and until they shall become public knowledge (other than by disclosure in breach of this Section 8.08) or as required by applicable law, including applicable securities laws and regulations; provided, before
Sellers, Stockholders, the Restricted Parties or any of their Affiliates discloses any of the foregoing as may be required by applicable law, such person shall give Purchaser reasonable advance notice and take such reasonable actions as Purchaser
may propose, at Purchaser’s expense, to minimize the required disclosure. 
 Section 8.09 Exclusivity. From the date of this
Agreement through the Closing Date, Sellers, Stockholders and the Restricted Parties will not (and Sellers, Stockholders and the Restricted Parties will not permit any of Sellers’ officers, directors, managers or advisors to), directly or
indirectly, solicit, initiate, encourage, negotiate with, engage in discussions with, accept any proposal or offers from, or provide any information or access to any person relating to a, direct or indirect, acquisition of all or substantially all
of the Acquired Assets or the Business (by stock purchase, merger, consolidation or otherwise) by such person. 
 Section 8.10 Access to
Former Business Records. For a period of three years after the Closing Date, or until any audits of Sellers’ tax returns relating to periods prior to the Closing Date (that Sellers have notified Purchaser of in writing during such three
year period) are completed, whichever occurs later, Purchaser will retain all books, records, papers and files constituting part of the Acquired Assets. During such period, Purchaser will afford duly authorized representatives of Sellers free and
full access during normal business hours to all of such records and will permit such representatives, at Sellers’ expense, to make copies of any of such records, or to obtain temporary possession of any thereof as may be reasonably required by

  

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Sellers. Such access will be conducted in a manner which does not unreasonably interfere with the Purchaser’s business and operations. 
 Section 8.11 Accounts Receivable. To the extent that any of the Accounts Receivable included in the Acquired Assets are not fully collected
(without any set off or reduction) within 120 days following the Closing, then Purchaser may (within 150 days following the Closing) assign such uncollected Accounts Receivable to Sellers. In the event of any such assignment, the Sellers will pay to
Purchaser an amount equal to the face amount of all such Accounts Receivable less the applicable reserve for doubtful accounts contained in the Final Effective Time Net Working Capital calculation. 
 ARTICLE IX 
 INDEMNIFICATION

 Section 9.01 Survival. All representations and warranties of Sellers and Stockholders
contained in this Agreement and all covenants contained in this Agreement that are to be performed prior to the Closing shall survive the Closing until eighteen (18) months after the Closing Date, except that (i) the representations and
warranties in Sections 6.01, 6.02 and 6.03 shall survive indefinitely, (ii) the representations and warranties in Section 6.15 shall survive for three (3) years following Closing and (iii) the representations and warranties in
Section 6.11 shall survive for until the longer of eighteen (18) months after the Closing Date or the applicable statute of limitations. Sellers and Stockholders shall not have any liability for indemnification claims made under this
Article IX with respect to any such representation, warranty or pre-closing covenant unless a claim notice is provided by the Purchaser to Sellers or Stockholders prior to the expiration of the applicable survival period for such representation,
warranty or pre-closing covenant. If a claim notice has been timely given in accordance with this Agreement prior to the expiration of the applicable survival period for such representation, warranty or pre-closing covenant, then the applicable
representation, warranty or pre-closing covenant shall survive as to such claim, until such claim has been finally resolved. 
 Section 9.02
Sellers Indemnity. Sellers and Stockholders (the “Seller Indemnitors”) agree to jointly and severally indemnify and hold Purchaser and its Affiliates (the “Purchaser Indemnitees”) harmless from and with
respect to any and all claims, liabilities, losses, damages, costs, and expenses, including, without limitation, the reasonable fees and disbursements of counsel (collectively, “Losses”), related to or arising directly or indirectly
out of any of the following: 
 (a) any inaccuracies in any representation or warranty made by Sellers or Stockholders in or
pursuant to this Agreement or any failure or breach by Sellers or Stockholders of any pre-closing covenant, obligation, or undertaking made by Sellers or Stockholders in this Agreement; 
 (b) any failure or breach by Sellers or Stockholders of any post-closing covenant/obligation or undertaking made by Sellers or
Stockholders in this Agreement; 
 (c) any claim or liability arising out of or with respect to any Retained Contract;

  

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 (d) any claim or liability arising out of or with respect to any Plan; and 
 (e) any claim or liability arising out of or with respect to Retained Liabilities. 
 Section 9.03 Limitations on Liability of Sellers and Stockholders. Notwithstanding anything to the contrary herein, Seller Indemnitors’
obligation to indemnify a Purchaser Indemnitee pursuant to Section 9.02(a) are subject to the following limitations: 
 (a) No indemnification shall be made by a Seller Indemnitor pursuant to Section 9.02(a) unless and until the aggregate amount of all Losses to be indemnified by the Seller Indemnitors to the Purchaser Indemnitees actually incurred
exceeds $210,000 and, in such event, indemnification shall be made by such Seller Indemnitor only to the extent such Losses exceed $210,000; provided, however, that any Losses actually incurred by a Purchaser Indemnitee arising out of or related to
Sections 6.01, 6.03, 6.10, 6.11 and 6.14 shall not be subject to the foregoing limitation; 
 (b) In no event shall the
aggregate obligations of the Seller Indemnitors to indemnify the Purchaser Indemnitees pursuant to Section 9.02(a) exceed $15,000,000; provided, however, that any Losses actually incurred by a Purchaser Indemnitee arising out of or related to
Sections 6.01, 6.03, 6.11 and 6.14 shall not be subject to the foregoing limitation; and 
 (c) Except for Losses arising
out of or related to a willful or knowing breach of Section 8.04, in no event shall a Seller Indemnitor be obligated to indemnify a Purchaser Indemnitee for any Losses that are speculative or consequential such as lost business opportunities or
lost profits. 
 Section 9.04 Purchaser Indemnity. Purchaser agrees to indemnify and hold Seller, Stockholders and their Affiliates
(the “Seller Indemnitees”) harmless from and with respect to any and all Losses related to or arising directly or indirectly out of any of the following: 
 (a) any inaccuracies in any representation or warranty made by Purchaser in or pursuant to this Agreement or any failure or breach by
Purchaser of any pre-closing covenant, obligation, or undertaking made by Purchaser in this Agreement; 
 (b) any failure or
breach by Purchaser of any post-closing covenant/obligation or undertaking made by Purchaser in this Agreement; 
 (c) any
claim or liability arising out of or with respect to Assumed Liabilities; and 
 (d) the business, operations or activities
conducted by Purchaser or any Affiliate in connection with the Business or the Acquired Assets from and after the Closing other than matters for which Sellers have retained responsibility or otherwise have an obligation to indemnify Purchaser under
this Agreement. 
 Section 9.05 Limitations on Liability of Purchaser. Notwithstanding anything to the contrary herein, no
indemnification shall be made by Purchaser pursuant to Section 9.04(a) unless and until the aggregate amount of all Losses to be indemnified by Purchaser to the Seller 

  

 29 

 
Indemnitees actually incurred exceeds $210,000 and, in such event, indemnification shall be made by Purchaser only to the extent such Losses exceed $210,000;
provided, however, that any Losses actually incurred by a Seller Indemnitee arising out of or related to Section 7.01 shall not be subject to the foregoing limitation. 
 Section 9.06 Restricted Party Obligations. 
 (a) Each Restricted Party agrees and acknowledges that Sellers and Stockholders have certain liabilities and obligations under this Agreement. If LES fails to timely discharge its liabilities or perform its
obligations under this Agreement, then such Restricted Party will be responsible for its Pro Rata Share of any liability resulting from LES’s failure; provided, however, that each Restricted Party will only have such liability to the extent of
any payment or distribution such Restricted Party (directly or indirectly) receives from LES from and after the Closing. In the event that LES elects to dissolve or otherwise wind up its affairs following the Closing, then in connection with any
such dissolution or winding-up, each Restricted Party hereby agrees to severally, but not jointly, assume LES’s liabilities and obligations under this Agreement; provided, however, that each such Restricted Party will only have such liability
to the extent of any payment or distribution such Restricted Party (directly or indirectly) receives from LES from and after the Closing in respect of such dissolution or winding-up. For purposes hereof, “Pro Rata Share” means, with
respect to each Restricted Party, the portion of the Purchase Price allocable to such Restricted Party in accordance with the organizational documents of LES. Each Restricted Party’s Pro Rata Share shall be such Restricted Partner’s LES
Ownership Interest. 
 (b) Each Restricted Party agrees to indemnify and hold the Purchaser Indemnitees harmless from and with
respect to any and all Losses related to or arising directly or indirectly out of any of the following: 
 (i) any failure or
breach by such Restricted Party of any pre-closing covenant, obligation, or undertaking made by such Restricted Party in this Agreement; and 
 (ii) any failure or breach by such Restricted Party of any post-closing covenant/obligation or undertaking made by such Restricted Party in this Agreement. 
 Section 9.07 Claims. 
 (a) In the event that any party desires to make a claim under Sections 9.02, 9.04 or 9.06 hereof in connection with any action, suit, proceeding, or demand at any time instituted against or made upon any party for which such party may
seek indemnification hereunder (a “Claim”), the party or parties entitled to indemnification hereunder (the “Indemnified Party”) shall promptly notify the party or parties required to provide indemnification
hereunder (the “Indemnifying Party”) of such Claim and the claim of indemnification with respect thereto, provided that failure of the Indemnified Party to give such prompt notice shall not relieve the Indemnifying Parties of their
obligations under this Article IX, except to the extent, if at all, that the Indemnifying Parties shall have been prejudiced thereby. 
  

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 (b) Upon receipt of notice from the Indemnified Party pursuant to Section 9.07(a),
the Indemnifying Parties will, subject to the provisions of Section 9.07(c), assume the defense and control of such Claim, but shall allow the Indemnified Party a reasonable opportunity to participate in the defense of such Claim with its own
counsel and at its own expense (except as provided in Section 9.07(d)). The Indemnifying Parties shall select counsel, contractors and consultants of recognized standing and competence after consultation with the Indemnified Party; shall take
all steps necessary in the defense or settlement of such Claim; and shall at all times diligently and promptly pursue the resolution of such Claim. The Indemnified Party shall, and shall cause each of its Affiliates and representatives to, cooperate
fully with the Indemnifying Parties in the defense of any Claim defended by the Indemnifying Parties. 
 (c) The Indemnifying
Parties shall be authorized to consent to a settlement of, or the entry of any judgment arising from, any Claim, without the consent of any Indemnified Party; but only if the Indemnifying Parties shall (i) pay or cause to be paid all amounts
arising out of such settlement or judgment concurrently with the effectiveness of such settlement; (ii) not encumber any of the assets of any Indemnified Party or agree to any restriction or condition that would apply to or adversely affect any
Indemnified Party or to the conduct of any Indemnified Party’s business; and (iii) obtain, as a condition of any settlement or other resolution, a complete release of any Indemnified Party potentially affected by such Claim. 
 (d) The Indemnifying Parties shall also be liable for the reasonable fees and expenses of counsel incurred by an Indemnified Party in
defending any Claim if such Claim, if successful, is likely to result in a judgment, decree or order of injunction or other equitable relief or relief for other than money damages against such Indemnified Party. 
 ARTICLE X 
 TERMINATION

 Section 10.01 Termination. At any time prior to the Closing, this Agreement may be terminated and the transactions contemplated
hereby abandoned: 
 (a) by the mutual consent of Purchaser and Sellers as evidenced in writing signed by each of Purchaser
and Sellers; 
 (b) by Purchaser, if there has been a material breach by Sellers, Stockholders or the Restricted Parties of
any representation, warranty or covenant contained in this Agreement which has prevented the satisfaction of any condition to the obligations of Purchaser at the Closing and, if such breach is of a character that it is capable of being cured, such
breach has not been cured by Sellers, Stockholders or the Restricted Parties within 30 days after written notice thereof from Purchaser; 
 (c) by Sellers, if there has been a material breach by Purchaser of any representation, warranty or covenant contained in this Agreement which has prevented the satisfaction of any condition to the obligations of
Sellers at the Closing and, if such breach is of a 

  

 31 

 
character that it is capable of being cured, such breach has not been cured by Purchaser within 30 days after written notice thereof from Sellers;

 (d) by either Purchaser or Sellers if any governmental authority having competent jurisdiction has issued a final,
non-appealable order, decree, ruling or injunction (other than a temporary restraining order) or taken any other action permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement; or 
 (e) by either Purchaser or Sellers, if the Closing has not occurred on or before November 10, 2005, or such later date as the parties
may agree upon. 
 Section 10.02 Effect of Termination. In the event of termination and abandonment of this Agreement pursuant to
Section 10.01, this Agreement shall forthwith become void and have no effect, without any liability on the part of any party hereto; provided, however, that if this Agreement is validly terminated by a party as a result of breach of this
Agreement by one or more non-terminating parties, then the terminating party shall be entitled to all rights and remedies available under applicable law or equity. The provisions of this Section 10.02 hereof shall survive any termination of
this Agreement. 
 ARTICLE XI 
 GENERAL 
 Section 11.01 Expenses. All expenses of the preparation, execution, and consummation of this Agreement and
of the transactions contemplated hereby, including, without limitation, attorneys’, accountants’, and outside advisers’ fees and disbursements, shall be borne by the party incurring such expenses. 
 Section 11.02 Notices. All notices, demands, and other communications hereunder shall be in writing or by written telecommunication, and shall be
deemed to have been duly given if delivered personally, or if mailed by certified mail, return receipt requested, postage prepaid, or sent by written telecommunication, as follows: 
 If to Sellers (with required copies to SESI), to: 
 5801 Highway 90 East 
 Broussard, LA 70518 
 If to LES, to: 
 Lamb Energy Services, LLC 
 5801 Highway 90 East 
 Broussard, LA 70518

 Attn: Rusty Lamb 
 If to SESI,
to: 
 SESI, L.L.C. 
 1105 Peters
Road 
  

 32 

 Harvey, Louisiana 70058 
 Attn: Guy Cook 
 If to any Restricted Party, to the address of such Restricted Party set forth on the
signature page to this Agreement. 
 If to Purchaser, to: 
 Tesco Corporation 
 6204 6A Street SE 
 Calgary, Alberta T2H 2B7 Canada 
 Attention:
General Counsel 
 with a copy to: 
 Tesco Corporation 
 c/o Tesco Corporation US 
 11330 Brittmore Park Drive 
 Houston, Texas 77041 
 Attention: Associate General Counsel 
 or to such other
address or telecommunication number and with such other copies as such party may hereafter specify for the purpose by notice to the other parties. Each such notice, demand or other communication shall be effective (i) if given by
telecommunication device, when such written telecommunication is transmitted to the telecommunication number specified in this Section and evidence of receipt is confirmed or (ii) if given by any other means, upon delivery or refusal of
delivery at the address specified in this Section. 
 Section 11.03 Entire Agreement. This Agreement contains the entire understanding
of the parties, supersedes all prior agreements and understandings relating to the subject matter hereof, and shall not be amended except by a written instrument hereafter signed by all of the parties hereto. The confidentiality letter agreement,
dated April 5, 2005, by and between Tesco Corporation and Superior Energy Services, Inc. shall terminate effective as of the Closing. 
 Section 11.04 Governing Law. The validity and construction of this Agreement shall be governed by the laws of the State of Texas. 
 Section 11.05 Sections and Section Headings. All enumerated subdivisions of this Agreement are herein referred to as “section” or “subsection.” The headings of sections and subsections are for reference only and
shall not limit or control the meaning thereof. 
 Section 11.06 Assigns. This Agreement shall be binding upon and inure to the
benefit of the heirs and successors of each of the parties. Neither this Agreement nor the obligations of any party hereunder shall be assignable or transferable by such party without the prior written consent of the other party hereto.
Notwithstanding the foregoing, Purchaser may, with or without the consent of Sellers, Stockholders or the Restricted Parties, transfer and assign this Agreement and all, but not less than all, of its rights and obligations hereunder to an Affiliate
of Purchaser; provided, however, that no such transfer or assignment shall relieve Purchaser of its obligations hereunder. 
  

 33 

 Section 11.07 No Third Party Rights or Remedies. Except as otherwise expressly provided herein,
nothing herein expressed or implied is intended or shall be construed to confer upon or to give any person, firm, or corporation, other than Sellers and Purchaser and their respective shareholders, any rights or remedies under or by reason of this
Agreement. 
 Section 11.08 Rules of Construction. 
 (a) In this Agreement, unless the context otherwise requires, words in the singular number or in the plural number shall each include the
singular number and the plural number and words of the masculine gender shall include the feminine and the neuter, and, when the sense so indicates, words of the neuter gender may refer to any gender. 
 (b) The terms “Affiliate” or “Affiliates” as used in this Agreement shall mean with respect to any person, any person
which, directly or indirectly, controls, is controlled by, or is under a common control with, such person. The term “control” (including the terms “controlled by” and “under common control with”) as used in this
definition means the possession, directly or indirectly, of the power to direct or cause the direction of management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise. 
 (c) The term “person” shall mean an individual, a corporation, a partnership, an association, a trust or any other entity or
organization, including a government or political subdivision or an agency or instrumentality thereof. 
 (d) The term
“Knowledge” as to either Seller shall mean the actual knowledge of the persons reflected on Schedule 11.08(d). 
 (e) Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation,” if such words are not already present.

 (f) The terms “dollars” and “$” mean United States dollars. 
 Section 11.09 Waiver. Any provision of this Agreement may be waived if, and only if, such waiver is in writing and signed, in the case of a
waiver, by the party against whom the waiver is to be effective. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege. 
 Section 11.10
Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 
  

 34 

 IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective duly authorized officers as of the date and year first above written. 
  

			
	PURCHASER:
	
	TESCO CORPORATION
		
	By:	 	/s/ Julio M. Quintana
	Name:	 	Julio M. Quintana
	Title:	 	President and Chief Executive Officer

  

			
	SELLERS:
	
	LAMB ENERGY SERVICES, L.L.C.
		
	By:	 	/s/ Edward R. Lamb
	Name:	 	Edward R. Lamb
	Title:	 	Member

  

			
	TONG SPECIALTY, L.L.C.
		
	By:	 	/s/ Edward R. Lamb
	Name:	 	Edward R. Lamb
	Title:	 	President

  

			
	 STOCKHOLDERS:
  
 LES, INC.

		
	By:	 	/s/ Edward R. Lamb
	Name:	 	Edward R. Lamb
	Title:	 	Member

 SIGNATURE PAGE TO 
 ASSET PURCHASE AGREEMENT 

			
	SESI, L.L.C.
		
	By:	 	/s/ Robert S. Taylor
	Name:	 	Robert S. Taylor
	Title:	 	Vice President and Treasurer

  

					
	RESTRICTED PARTIES:	 	
		
		 	/s/ Edward R. Lamb
		 	Edward Lamb	 	
		 	Address:	 	402 Woods Crossing
		 		 	Lafayette, LA 70508

  

					
			
		 	/s/ Donald Daigle	 	  
		 	Donald Daigle	 	
		 	Address:	 	14727 Hwy.190 West
		 		 	Opelousas, LA 70570

  

					
		
		 	/s/ Stacey Reaux
		 	Stacey Reaux	 	
		 	Address:	 	103 Winslow Blvd.
		 		 	Lafayette, LA 70508

 SIGNATURE PAGE TO 
 ASSET PURCHASE AGREEMENTAsset Purchase Agreement - Cheyenne Services, Ltd

 Exhibit 10.2 
 ASSET PURCHASE AGREEMENT 
 by and between 
 TESCO CORPORATION, 
 CHEYENNE
SERVICES, LTD. 
 and 
 Carlos A. Torres 
 dated 
 November 1, 2005 

 TABLE OF CONTENTS 
  

			
	 ARTICLE I PURCHASE AND SALE
	  	1
	 Section 1.01     Acquired Assets
	  	1
	 Section 1.02     Excluded Assets
	  	2
		
	 ARTICLE II PURCHASE PRICE
	  	2
	 Section 2.01     Purchase Price
	  	2
	 Section 2.02     Purchase Price Adjustment
	  	3
	 Section 2.03     Purchase Price Adjustment – Depreciated Fixed Assets
	  	4
	 Section 2.04     Prorations; Adjustments
	  	5
	 Section 2.05     Like Kind Exchange
	  	6
	 Section 2.06     Allocation of Consideration
	  	6
		
	 ARTICLE III ASSUMED LIABILITIES; RETAINED LIABILITIES
	  	6
	 Section 3.01     Assumed Liabilities
	  	6
	 Section 3.02     Retained Liabilities
	  	6
		
	 ARTICLE IV THE CLOSING
	  	7
	 Section 4.01     Time and Place
	  	7
	 Section 4.02     Documents to be Delivered By Seller
	  	7
	 Section 4.03     Documents to be Delivered by Purchaser
	  	9
		
	 ARTICLE V CONDITIONS TO CLOSING
	  	9
	 Section 5.01     Purchaser’s Conditions to Closing
	  	9
	 Section 5.02     Seller’s Conditions to Closing
	  	10
		
	 ARTICLE VI REPRESENTATIONS AND WARRANTIES OF SELLER
	  	11
	 Section 6.01     Organization of Seller; Authority
	  	11
	 Section 6.02     Noncontravention
	  	11
	 Section 6.03     Title to Acquired Assets
	  	11
	 Section 6.04     No Equity Interests
	  	12
	 Section 6.05     Absence of Changes
	  	12
	 Section 6.06     Personal Property
	  	13
	 Section 6.07     Permits
	  	13
	 Section 6.08     Contracts
	  	13
	 Section 6.09     Intellectual Property
	  	15
	 Section 6.10     Brokers’ Fees
	  	16
	 Section 6.11     Taxes
	  	16
	 Section 6.12     Product and Service Warranty
	  	17
	 Section 6.13     Employees; Employee Relations
	  	17
	 Section 6.14     Employee Benefit Plans
	  	18
	 Section 6.15     Environmental Matters
	  	19
	 Section 6.16     Property Matters
	  	20
	 Section 6.17     Customers, Vendors and Suppliers
	  	21
	 Section 6.18     Insurance
	  	21
	 Section 6.19     Books and Records
	  	21
	 Section 6.20     Inventories
	  	21
	 Section 6.21     Assets Necessary to the Business
	  	21

			
	 Section 6.22     Conformity to Law
	  	22
	 Section 6.23     Commissions
	  	22
	 Section 6.24     Absence of Certain Business Practices
	  	22
	 Section 6.25     Financial Statements
	  	22
	 Section 6.26     Safety Performance
	  	22
	 Section 6.27     Disclosure
	  	22
		
	 ARTICLE VII REPRESENTATIONS AND WARRANTIES OF BUYER
	  	23
	 Section 7.01     Organization and Standing of Purchaser; Authority
	  	23
	 Section 7.02     Noncontravention
	  	23
	 Section 7.03     Brokers
	  	23
		
	 ARTICLE VIII COVENANTS
	  	23
	 Section 8.01     Conduct of Business
	  	23
	 Section 8.02     Access
	  	25
	 Section 8.03     Third Party Approvals
	  	25
	 Section 8.04     Non-Competition
	  	25
	 Section 8.05     Retained Employees
	  	26
	 Section 8.06     Use of Name
	  	27
	 Section 8.07     Further Assurances
	  	27
	 Section 8.08     Confidentiality
	  	27
	 Section 8.09     Exclusivity
	  	28
	 Section 8.10     Frank’s Patent Dispute
	  	28
	 Section 8.11     Accounts Receivable
	  	29
		
	 ARTICLE IX INDEMNIFICATION
	  	29
	 Section 9.01     Survival
	  	29
	 Section 9.02     Indemnity
	  	29
	 Section 9.03     Limitations on Liability of Seller and Partner
	  	30
	 Section 9.04     Claims
	  	30
		
	 ARTICLE X TERMINATION
	  	31
	 Section 10.01  Termination
	  	31
	 Section 10.02  Effect of Termination
	  	31
		
	 ARTICLE XI GENERAL
	  	32
	 Section 11.01  Expenses
	  	32
	 Section 11.02  Notices
	  	32
	 Section 11.03  Entire Agreement
	  	32
	 Section 11.04  Governing Law
	  	33
	 Section 11.05  Arbitration
	  	33
	 Section 11.06  Sections and Section Headings
	  	33
	 Section 11.07  Assigns
	  	33
	 Section 11.08  No Third Party Rights or Remedies
	  	33
	 Section 11.09  Rules of Construction
	  	33
	 Section 11.10  Counterparts
	  	34

					
	 Exhibit A
	  	 Escrow Agreement
	  	
	 Exhibit B
	  	 Assignment and Bill of Sale
	  	
	 Exhibit C
	  	 Lease Agreement
	  	
			
	 Schedule 1.01(a)
	  	 Equipment
	  	
	 Schedule 1.01(b)
	  	 Scheduled Contracts
	  	
	 Schedule 1.01(e)
	  	 Patent Rights
	  	
	 Schedule 1.01(g)
	  	 Permits
	  	
	 Schedule 1.01(i)
	  	 Bank Accounts
	  	
	 Schedule 1.02
	  	 Excluded Assets
	  	
	 Schedule 2.01
	  	 Rick Garland Patents
	  	
	 Schedule 2.02
	  	 Net Working Capital
	  	
	 Schedule 2.03(a)-1
	  	 Depreciated Value of Acquired Assets
	  	
	 Schedule 2.03(a)-2
	  	 Self Constructed Assets
	  	
	 Schedule 2.06
	  	 Purchase Price Allocation
	  	
	 Schedule 3.01
	  	 Assumed Liabilities
	  	
	 Schedule 3.02
	  	 Retained Liabilities
	  	
	 Schedule 3.02(g)
	  	 Indebtedness
	  	
	 Schedule 6.03
	  	 Encumbrances
	  	
	 Schedule 6.03-1
	  	 Tax Exceptions
	  	
	 Schedule 6.05
	  	 Absence of Changes
	  	
	 Schedule 6.06(b)-1
	  	 Title
	  	
	 Schedule 6.06(b)-2
	  	 Repairs/Maintenance
	  	
	 Schedule 6.07
	  	 Scheduled Permits
	  	
	 Schedule 6.08
	  	 Contracts
	  	
	 Schedule 6.09(a)
	  	 Seller Intellectual Property
	  	
	 Schedule 6.09(b)
	  	 Ownership of Intellectual Property
	  	
	 Schedule 6.09(c)
	  	 Infringement
	  	
	 Schedule 6.09(d)
	  	 IP Fees and Payments
	  	
	 Schedule 6.11
	  	 Tax Matters
	  	
	 Schedule 6.13
	  	 Business Employees
	  	
	 Schedule 6.14
	  	 Plans
	  	
	 Schedule 6.15(a)
	  	 Environmental Permits
	  	
	 Schedule 6.15(c)
	  	 Compliance with Environmental Laws
	  	
	 Schedule 6.16(a)
	  	 Real Property
	  	
	 Schedule 6.17
	  	 Major Customers, Vendors/Suppliers
	  	
	 Schedule 6.18
	  	 Insurance
	  	
	 Schedule 6.20
	  	 Inventories
	  	
	 Schedule 6.25
	  	 Financial Statements
	  	
	 Schedule 6.26
	  	 Safety Performance
	  	
	 Schedule 8.01
	  	 Conduct of Business
	  	
	 Schedule 8.05
	  	 Employment Claims
	  	
	 Schedule 8.10
	  	 Franks’ Patent
	  	
	 Schedule 11.05
	  	 Arbitration Provisions
	  	

 ASSET PURCHASE AGREEMENT 
 This ASSET PURCHASE AGREEMENT (this “Agreement”) is dated as of the 1st day of November, 2005, by and between TESCO CORPORATION, an
Alberta corporation (the “Purchaser”), CHEYENNE SERVICES, LTD., a Texas limited partnership (the “Seller”), and Carlos A. Torres (“Torres”). 
 WHEREAS, Seller desires to sell and Purchaser desires to purchase certain assets which are referenced as Acquired Assets in Section 1.01 below,
which comprise Seller’s casing and tubular running business and inspection services business which includes (i) equipment and expertise used in the handling, running, installation and removal of tubing and casing, (ii) related
services including wellsite supervision of said running, installation and removal, (iii) assembly torque monitoring services, and (iv) the sale of certain consumable items related thereto (the “Business”). 
 WHEREAS, Cheyenne Houston Management LLC, a Texas limited liability company (“CHM”), is the sole general partner of the Seller, Torres
is the sole limited partner of Seller and Torres is the sole member of CHM; 
 NOW, THEREFORE, in consideration of the mutual promises and
agreements set forth herein, Purchaser, Seller and Partner agree as follows: 
 ARTICLE I 
 PURCHASE AND SALE 
 Section 1.01
Acquired Assets. Subject to the terms and conditions set forth in this Agreement, at the Closing referred to in Article IV hereof, Seller shall sell, assign, transfer, and deliver to Purchaser, and Purchaser shall purchase, acquire,
and take assignment and delivery of all of the following assets (all of which assets are hereinafter referred to collectively as the “Acquired Assets”): 
 (a) all right, title and interest of Seller in and to the equipment, machinery, furniture and furnishings, computers and computer hardware
(including processing units, terminals, disk drives, tape drives, printers, keyboards, screens, and peripherals), vehicles, trailers, apparatus, tools, dies, appliances, implements and other tangible personal property used or usable in the Business
including the personal property listed on Schedule 1.01(a) hereto (the “Equipment”); 
 (b) all right,
title and interest of Seller in, to and under the contracts and agreements described on Schedule 1.01(b) hereto (the “Scheduled Contracts”) and all rights (including rights of refund and offset), privileges, deposits, claims,
causes of action and options relating or pertaining to any of the Scheduled Contracts; 
 (c) all right, title and interest of
Seller in and to inventories, including parts and spare parts inventories, chemicals, finished goods, products, work-in-progress, raw materials and other inventories (“Inventories”) used in the Business or usable in the Business as
it is presently conducted; 
  

 1 

 (d) all of Seller’s books, records, papers and instruments of whatever nature and
wherever located that relate to the Acquired Assets or which are required or necessary in order for Purchaser to conduct the Business from and after Closing in the manner in which the Business is presently being conducted, including, without
limitation, copies of specifications, blue prints, drawings, designs, sales, promotional and marketing literature, accounting and financial records, personnel and labor records, subject to any applicable legal restrictions, sales and property tax
records and returns, sales records, but excluding income tax records and returns and corporate minute book and stock records; 
 (e) all right, title and interest of Seller in all patents and patent applications listed in Schedule 1.01(e) (“Patent Rights”), all trademarks, technology, know-how, data, copyrights, tradenames, service marks,
licenses and other intellectual property (“Intellectual Property”) used in the conduct of the Business, including, without limitation, all software, all of Seller’s rights under any licenses related to Seller’s use, at any
time, of computer equipment, hardware or software; 
 (f) any lists in the possession of Seller that identify customers to
whom sales have been made in connection with the operation of the Business and vendors from whom supplies are purchased in connection with the operation of the Business; 
 (g) all right, title and interest of Seller in and to all permits, authorizations, certifications, approvals, ordinances, licenses and
other similar rights (“Permits”) used or usable in the conduct of the Business, to the extent assignable, including the Permits listed on Schedule 1.01(g); 
 (h) all right, title and interest in and to the names “Cheyenne Services, Inc. and Cheyenne Services, Ltd.” and any derivative
thereof used in the Business but excluding the names “Cheyenne Fluid Services, Inc.” and “Cheyenne Supply, Inc.”; 
 (i) the bank accounts referenced on Schedule 1.01(i); 
 (j) all current assets of Seller
determined in accordance with generally accepted accounting principles; and 
 (k) all other assets, know-how, technology,
trade secrets, goodwill and rights of every kind and nature, real or personal, tangible or intangible, owned, used or held for use by Seller in the Business as of the Closing. 
 Section 1.02 Excluded Assets. Notwithstanding the foregoing, Seller is not selling, and Purchaser is not purchasing pursuant to this Agreement,
any of the assets of Seller listed on Schedule 1.02, and the term “Acquired Assets” shall not include the assets listed on Schedule 1.02. 
 ARTICLE II 
 PURCHASE PRICE 
 Section 2.01 Purchase Price. Purchaser shall pay to Seller, as the aggregate purchase price (the “Purchase Price”) for the
Acquired Assets (i) an amount equal to $17,000,000 
  

 2 

 
(reduced by an amount equal to the quotient of $10,000 times the number of days from and after October 24, 2005 through and including the Closing Date)
consisting of (a) a cash amount equal to $16,000,000 (reduced by an amount equal to the quotient of $10,000 times the number of days from and after October 24, 2005 through and including the Closing Date) payable to Seller and (b) a
cash amount equal to $1,000,000 payable, on behalf of Seller, to Rick Garland to satisfy the Company’s obligation to acquire all right, title and interest of his in and to the patents listed on Schedule 2.01, (ii) the Additional
Depreciated Fixed Assets Amount (as defined in Section 2.03), and (iii) a contingent payment up to $3,000,000 (plus interest), such contingent payment being payable in accordance with and secured by the cash held in the escrow agreement in
the form attached as Exhibit A. The cash portion of the purchase price payable to Seller will be subject to adjustment as provided in Sections 2.02, 2.03 and 2.04. 
 Section 2.02 Purchase Price Adjustment. 
 (a) For purposes of establishing the Purchase Price, Purchaser and Seller have assumed that the Net Working Capital (as defined below) of Seller as of the Closing Date will be $1,236,700 (the “Net Working
Capital Threshold”). “Net Working Capital” shall mean total current assets being acquired by Purchaser less total current liabilities being assumed by Purchaser as more particularly described on and calculated in accordance
with the accounting principles and methodologies referenced on Schedule 2.02. 
 (b) Within five days prior to Closing,
Seller shall prepare and deliver to Purchaser a certificate (the “Pre-Closing Working Capital Certificate”) of an authorized officer of Seller setting forth Seller’s good faith estimate of Seller’s Net Working Capital as
of the Closing Date (the “Estimated Closing Date Net Working Capital”). From and after the delivery of the Pre-Closing Working Capital Certificate, Purchaser shall be permitted to review Seller’s working papers relating to the
preparation of the Pre-Closing Working Capital Certificate, and Seller shall provide Purchaser with reasonable access to the persons involved in preparing or reviewing such Pre-Closing Working Capital Certificate. Seller shall revise the Pre-Closing
Working Capital Certificate based on Purchaser’s reasonable objections to the amounts set forth therein. If the Estimated Closing Date Net Working Capital set forth in the Pre-Closing Working Capital Certificate exceeds the Net Working Capital
Threshold, then the Purchase Price will be increased and Purchaser shall pay as an addition to the cash portion of the Purchase Price payable at Closing an amount equal to such excess. If the Estimated Closing Date Net Working Capital set forth in
the Pre-Closing Working Capital Certificate is less than the Net Working Capital Threshold, then the Purchase Price will be reduced and the cash portion of the Purchase Price payable by Purchaser at Closing shall be reduced by such difference.

 (c) As soon as reasonably practicable following the Closing Date, and in any event within 45 days thereafter, Purchaser
shall prepare and deliver to Seller a certificate (the “Post-Closing Working Capital Certificate”) of an authorized officer of Purchaser setting forth Purchaser’s good faith calculation of the actual Net Working Capital as of
the Closing Date (the “Final Closing Date Net Working Capital”). From and after the delivery of the Post-Closing Working Capital Certificate, Seller shall be permitted to review Purchaser’s working papers relating to the
preparation of the Post-Closing Working Capital Certificate, and Purchaser shall provide Seller with reasonable access to the persons involved in preparing or reviewing such Post-Closing Working Capital Certificate. 
  

 3 

 (d) (i) Within 20 days after Seller’s receipt of the Post-Closing Working Capital
Certificate, Seller shall notify Purchaser as to whether Seller agrees or disagrees with the calculation of the Final Closing Date Net Working Capital as reflected on the Post-Closing Working Capital Certificate and, if Seller disagrees, such notice
shall set forth in reasonable detail the particulars of such disagreement. If Seller provides a notice of agreement or does not provide a notice of disagreement within such 20 day period, then Seller shall be deemed to have accepted the calculations
and the amounts set forth in the Post-Closing Working Capital Certificate delivered by Purchaser, which shall then be final, binding and conclusive for all purposes hereunder. If any such notice of disagreement is timely provided, then Purchaser and
Seller shall each use reasonable efforts for a period of 15 days thereafter to resolve any disagreements with respect to the calculations in the Post-Closing Working Capital Certificate. 
 (ii) If, at the end of the 15-day resolution period, the parties are unable to resolve any disagreements as to items in the Post-Closing
Working Capital Certificate, then KPMG, LLP (or such other independent accounting firm of recognized national standing as may be mutually selected by Purchaser and Seller) shall resolve any remaining disagreements. If within 4 days KPMG, LLP is
unwilling or unable to serve in such capacity then Deloitte & Touche LLP shall be requested to serve in such capacity. If within 4 days Deloitte & Touche LLP is not willing or able to serve in such capacity, then Seller shall
within 10 days from Deloitte & Touche LLP’s failure to serve to deliver to Purchaser a listing of three other accounting firms of recognized national or regional standing none of which has performed audit services for Seller within the
last three years and Purchaser shall within 10 days after receipt of such list, select one of such three accounting firms (such firm as is ultimately selected pursuant to the aforementioned procedures being the “Accountant”). The
Accountant shall be charged with determining as promptly as practicable, but in any event within 30 days after the date on which such dispute is referred to the Accountant any disputed items required to determine Seller’s actual Net Working
Capital as of the Closing. The costs and expenses of the Accountant shall be allocated between Seller and Purchaser so that Seller’s share of such fees and expenses shall be in the same proportion that the aggregate amount of the disputed items
submitted by Seller to the Accountant that is unsuccessfully disputed by Seller (as finally determined by the Accountant) bears to the total amount of all disputed items so submitted by Seller to the Accountant. The determination of the Accountant
shall be final, binding and conclusive for all purposes hereunder. 
 (iii) Within five Business Days of the date on which the
last disputed item required to determine the actual Net Working Capital as of the Closing is resolved pursuant to this Section 2.02, Purchaser shall pay to Seller an amount equal to the excess, if any, of the Final Closing Date Net Working
Capital minus the Estimated Closing Date Net Working Capital, or Seller shall pay to Purchaser an amount equal to the excess, if any, of the Estimated Closing Date Net Working Capital minus the Final Closing Date Net Working Capital. 
 Section 2.03 Purchase Price Adjustment – Depreciated Fixed Assets. (a) The purchase price payable at Closing will be increased by the
“Additional Depreciated Fixed Assets Amount”. “Additional Depreciated Fixed Assets Amount” shall include (1) the actual cost of assets acquired by Seller after February 28, 2005 (as evidenced by third party
invoices) 
  

 4 

 
reduced by depreciation through the Closing Date as reflected on Schedule 2.03(a)-1; plus (2) the direct actual cost of the self constructed
assets (as evidenced by third party invoices) plus a mutually agreed labor charge for related Seller employee time reduced by depreciation through the Closing Date as reflected in Schedule 2.03(a)-2. Depreciation, as referenced herein, shall
be calculated in accordance with the depreciation methods referenced on Schedule 2.03(a)-1 and 2.03(a)-2. 
 (b) At the
Closing, Seller and Purchaser shall agree to an estimate of the actual costs of assets purchased after February 28, 2005 and the actual cost of self constructed assets to be included in the calculation of the Additional Depreciated Fixed Assets
Amount (the “Estimated Costs”). As soon as reasonably practicable following the Closing Date, and in any event within 45 days thereafter, Purchaser shall review the supporting detail and documentation provided by Seller in support
of the Estimated Costs. Within 60 days following the Closing Date, Purchaser shall notify Seller as to whether the Purchaser agrees or disagrees with the Estimated Costs proposed by Seller and, if Purchaser disagrees, such notice shall set forth in
reasonable detail the particulars of such disagreement which may be a statement that the documentation provided by Seller does not fully support the Estimated Costs. If Purchaser provides a notice of agreement or does not provide a notice of
disagreement within such 60-day period, then Purchaser shall be deemed to have accepted the statement of Estimated Costs. If any such notice of disagreement is timely provided, then Purchaser and Seller shall each use reasonable efforts for a period
of 15 days thereafter to resolve any disagreements with respect to the calculation of Estimated Costs. 
 (c) If, at the end
of the 15-day resolution period, the parties are unable to resolve any disagreements as to items in the statement of Estimated Costs, then the Accountant shall be charged with determining, as promptly as practicable, but in any event within 30 days
after the date on which such dispute is referred to the Accountant any disputed items required to determine Seller’s actual costs with respect to the subject assets. The costs and expenses of the Accountant shall be allocated between Seller and
Purchaser so that Purchaser’s share of such fees and expenses shall be in the same proportion that the aggregate amount of the disputed items submitted by Purchaser to the Accountant that is unsuccessfully disputed by Purchaser (as finally
determined by the Accountant) bears to the total amount of all disputed items so submitted by Purchaser to the Accountant. The determination of the Accountant shall be final, binding and conclusive for all purposes hereunder. 
 (d) If the Accountant concludes that the Estimated Costs in dispute were overstated or are not properly supported by the documentation
provided by Seller, then Seller shall within five Business Days of such determination, pay to Purchaser an amount equal to the Estimated Costs in dispute. 
 Section 2.04 Prorations; Adjustments. (a) All personal property taxes and ad valorem taxes with respect to the Acquired Assets and all rent and other payments under or pursuant to the Scheduled Contracts
shall be apportioned and shall be adjusted, as of the Closing Date, and the net amount thereof shall be added to or deducted from, as the case may be, that portion of the Purchase Price paid by Purchaser on the Closing Date. If the amount of any
item is not known at the time of Closing, it shall be apportioned on a basis which is agreed to by Purchaser and Seller 
  

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prior to the payment of the Purchase Price with a reapportionment at the later of the payment of the balance of the Purchase Price under Section 2.02
hereof or when definitive data is available. 
 (b) Seller shall pay all sales, use, and other transfer taxes with respect to
the sale and Purchaser’s purchase of the Acquired Assets. 
 Section 2.05 Like Kind Exchange. Purchaser may consummate the
purchase of all or part of the Assets as part of a so-called like kind exchange (the “Exchange”) pursuant to §1031 of the Internal Revenue Code of 1986, as amended, provided that (i) all costs, fees and expenses
attendant to the Exchange shall be the responsibility of Purchaser and (ii) Seller shall not be required to acquire or hold title to any property or assets other than the Acquired Assets for purposes of consummating the Exchange but rather the
Exchange shall be effected through an assignment by Purchaser of its rights under this Agreement to a qualified intermediary. In the event that all conditions precedent to the consummation of the transaction have been satisfied, Seller hereby agrees
that the Closing may be delayed to permit Purchaser to effect the Exchange, provided that in no event may Seller delay such Closing beyond the date set forth in Section 10.01(e) hereof. Seller shall not, by this Agreement or acquiescence
to the Exchange, (1) have its rights under this Agreement, including (without limitation) those that survive Closing, affected or diminished in any manner or (2) be responsible for compliance with or be deemed to have warranted to
Purchaser that the Exchange in fact complies with §1031 of the Internal Revenue Code of 1986, as amended (the “Code”). 
 Section 2.06 Allocation of Consideration. Seller and Purchaser agree that the sale of the Business is subject to Section 1060 of the Code. The Purchase Price shall be allocated among the Acquired Assets in accordance with
Schedule 2.06. Purchaser and Seller agree (a) that the allocations set forth in Schedule 2.06 have been made in accordance with the Code, (b) to treat and report for income tax purposes the transactions contemplated by this
Agreement in a manner consistent with such allocation, (c) not to take any action for income tax purposes inconsistent with such allocation. Seller and Purchaser shall duly prepare and timely file such reports and information returns as may be
prescribed under Section 1060 of the Code, including Form 8594, and any similar returns or reports required under other applicable law, to report the allocation of the Purchase Price in accordance with Schedule 2.06. Seller and Purchaser
acknowledge and agree that the allocations made pursuant to this Section 2.06 are solely for income tax purposes. Seller and Purchaser will notify the other in the event of an examination, audit or other proceeding regarding the agreed upon
allocation of the Purchase Price. 
 ARTICLE III 
 ASSUMED LIABILITIES; RETAINED LIABILITIES 
 Section 3.01 Assumed Liabilities. Except as
expressly referenced in Schedule 3.01 attached hereto (the “Assumed Liabilities”), Purchaser shall not assume, and shall not be deemed to have assumed, any liability or obligation of Seller whatsoever, including any liability
or obligation relating to the Acquired Assets. 
 Section 3.02 Retained Liabilities. Except as expressly referenced in Schedule
3.02 attached hereto, Seller acknowledges and agrees that it is responsible for and shall indemnify and 

  

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hold harmless Purchaser from and against any and all claims, liabilities, losses or obligations arising out of or relating to the following
(“Retained Liabilities”): 
 (a) any accrued salaries, bonuses or other accrued compensation or employee
benefits (except vacation time to the extent, if any, expressly included in the Assumed Liabilities) of any employees of Seller or its Affiliates with respect to the period prior to the Closing Date; 
 (b) any obligations to employees or consultants of Seller or its Affiliates under any employment, consulting, change of control or
severance agreements; 
 (c) all obligations of Seller under this Agreement; 
 (d) all taxes with respect to the ownership of the Acquired Assets or conduct of the Business prior to the Closing; 
 (e) all fees and expenses owed by Seller or its Affiliates to third parties incurred in connection with the sale of the Acquired Assets;

 (f) any contracts, agreements or instruments to which Seller or any of its Affiliates is a party or any of the Acquired
Assets are bound, whether or not relating to the Business other than liabilities arising after the Closing under Scheduled Contracts; 
 (g) all obligations of Seller with respect to any indebtedness, including but not limited to indebtedness for borrowed money and the other obligations described on Schedule 3.02(g); and 
 (h) the business, operations or activities conducted by Seller or any Affiliate in connection with the Business or the Acquired Assets
prior to the Closing other than the Assumed Liabilities. 
 ARTICLE IV 
 THE CLOSING 
 Section 4.01 Time and Place. The closing of the transfer
and delivery of the documents and instruments necessary to consummate the purchases and sales contemplated by this Agreement (the “Closing”) shall be held at the offices of Vinson & Elkins L.L.P., 1001 Fannin, Houston,
Texas, at 9 a.m. (Houston, Texas time) on November 1, 2005, or at such other time or place as Purchaser and Seller may agree. The date on which the Closing is actually held hereunder is sometimes referred to herein as the “Closing
Date.” 
 Section 4.02 Documents to be Delivered By Seller. At the Closing: 
 (a) Seller shall execute and deliver to Purchaser (or its designee) an Assignment and Bill of Sale, substantially in the form attached
hereto as Exhibit B, conveying to Purchaser (or such designee) good and marketable title to the Acquired Assets being purchased from Seller; 
  

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 (b) Seller shall execute and deliver to Purchaser (or its designee) such other instrument
or instruments of sale, transfer and assignment transferring, assigning and conveying the Acquired Assets as shall be appropriate to vest in Purchaser (or such designee) good and marketable title to such assets; 
 (c) Seller shall deliver a copy of the resolutions adopted by the Partners of the Seller, authorizing the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby, in each case duly certified as of the Closing Date by the Secretary or any Assistant Secretary of Seller; 
 (d) Seller shall deliver a copy of the certificate of limited partnership of Seller certified as true and correct by its secretary and a
certificate of good standing of Seller issued by the Secretary of State of the State of Texas as of a date not more than 10 days prior to the Closing Date; 
 (e) To the extent any consents or approvals shall be necessary to any of the transactions, herein contemplated, or to the effective transfer or assignment of any of the assets being purchased by Purchaser from Seller,
Seller shall have delivered all such consents or approvals in writing in a form satisfactory to Purchaser; 
 (f) Seller shall
cause Rick L. Garland, Dan Wiggins and Errol A. Sonnier to execute and deliver to Purchaser Employment Agreements (including non-competition covenants) in form satisfactory to Purchaser, such Employment Agreement to have a term of three years and
provide for compensation and benefits that are the same as, or substantially equivalent to, the respective compensation and benefits currently accorded to each such employee by Seller; 
 (g) Seller shall deliver evidence satisfactory to Buyer (i) of the release (subject to filing with the applicable governmental
authority) of all Encumbrances (as defined in Section 6.03 below) affecting the Acquired Assets, and (ii) that, with respect to the Acquired Assets, all amounts owing under any indebtedness, including the indebtedness described on
Schedule 3.02(g), have been paid in full or otherwise terminated; 
 (h) Seller shall execute and deliver lease
agreements (the “Founder Lease Agreements”) respecting the property of Seller located at Houston, Texas; Springtown, Texas; and Lafayette, Louisiana in the forms attached hereto as Exhibit C. 
 (i) Seller shall deliver Phase I environmental reports respecting the real property related to the Lease Agreements and Founder Lease
Agreements; 
 (j) Seller shall deliver to Purchaser such other agreements and instruments as may reasonably be required to
consummate the transactions contemplated by this Agreement; 
 (k) Seller shall deliver documents reasonably satisfactory to
Purchaser evidencing the purchase by the Seller of the rights held by Rick Garland in U.S. patents No. 4,938,109, No. 5,732,909 and No. 5,992,801 transfer of such patent rights to Purchaser as part of the Acquired Assets free and
clear of any Encumbrances; and 
  

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 (l) Seller shall deliver to Purchaser documents sufficient to release all Encumbrances
against the Acquired Assets, including any liens with respect to any and all outstanding indebtedness including equipment loans at Sterling Bank. 
 Section 4.03 Documents to be Delivered by Purchaser. At the Closing: 
 (a) Purchaser shall pay the cash
portion of the Purchase Price referenced in Section 2.01(i)(a) to Seller; 
 (b) Purchaser shall pay the cash portion of
the Purchase Price referenced in Section 2.01(i)(b) to Rick Garland on behalf of Seller; 
 (c) Purchaser shall
deliver the contingent payment amount referenced in Section 2.01(i)(c) to the escrow agent under the Escrow Agreement; 
 (d) Purchaser shall deliver to Seller a copy of the resolutions adopted by the Board of Directors of Purchaser, authorizing the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, in each
case duly certified as of the Closing Date by the Secretary or any Assistant Secretary of Purchaser; and 
 (e) Purchaser
shall deliver to Seller such other agreements and instruments as may reasonably be required to consummate the transactions contemplated by this Agreement. 
 ARTICLE V 
 CONDITIONS TO CLOSING 
 Section 5.01 Purchaser’s Conditions to Closing. The obligations of Purchaser to consummate the transactions contemplated by this Agreement
shall be subject to the fulfillment of each of the following conditions: 
 (a) The representations and warranties of Seller
herein contained shall be true and correct on and as of the Closing Date with the same force and effect as though made as of such date, except for any variations permitted by this Agreement. 
 (b) Seller shall have performed and complied, in all material respects, with the covenants and agreements contained in this Agreement that
are required to be performed or complied with by Seller on or prior to the Closing Date. 
 (c) Seller shall have secured in
writing all necessary consents and approvals, in form and substance satisfactory to Purchaser, by and from all third parties whose consent and approval is required by contract or law for the consummation of the transactions herein contemplated.

 (d) Seller shall have delivered all documents required to be delivered by Seller at Closing, as more specifically set forth
in Article IV of this Agreement, in each case in form and substance reasonably satisfactory to Purchaser. 
  

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 (e) The parties hereto shall have secured all appropriate orders, consents, approvals and
clearances, in form and substance reasonably satisfactory to Purchaser, by and from all parties, including regulatory agencies and other governmental authorities and agencies, whose order, consent, approval or clearance is required by contract or
law for the consummation of the transactions herein contemplated. 
 (f) There shall not have been any material adverse change
in the Acquired Assets or the Business since February 28, 2005 or the ability of the Purchaser to use or operate the Acquired Assets or conduct the Business as used, operated or conducted by Seller in a manner consistent with Seller’s past
practices. 
 (g) Purchaser shall have completed its due diligence of the Acquired Assets and the Business, the results of
which shall be satisfactory to Purchaser in its sole and absolute discretion. 
 (h) The Phase I environmental reports
relating to the real property shall have been delivered to Purchaser and shall be reasonably satisfactory to Purchaser. 
 (i)
Messrs. Scrantz and Sonnier shall have terminated their existing royalty agreements with Seller and shall have entered into new royalty agreements or other compensation arrangements reasonably satisfactory to Purchaser. 
 (j) There shall be no pending or threatened litigation relating to this Agreement or the transactions contemplated hereby. 
 (k) Torres and Purchaser shall have entered into a letter agreement with respect to certain rights of Purchaser relating to certain
developing technologies and products held by Torres or his Affiliates relating to the Business. 
 Section 5.02 Seller’s Conditions
to Closing. The obligation of Seller to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment of the following conditions: 
 (a) The representations and warranties of Purchaser herein contained shall be true and correct on and as of the Closing Date with the same
force and effect as though made as of such date, except for any variations permitted by this Agreement. 
 (b) Purchaser shall
have performed and complied with in all material respects the covenants and agreements contained in this Agreement that are required to be performed or complied with by Purchaser on or prior to the Closing Date. 
 (c) Purchaser shall have delivered all documents required to be delivered by Purchaser at Closing, as more specifically set forth in
Article IV hereof, in each case in form and substance reasonably satisfactory to Seller. 
 (d) The parties hereto
shall have secured all appropriate orders, consents, approvals and clearances, in form and substance reasonably satisfactory to Seller, by and from all parties, including regulatory agencies and other governmental authorities and agencies, whose

  

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order, consent, approval or clearance is required by contract or law for the consummation of the transactions herein contemplated. 
 (e) There shall be no pending or threatened litigation relating to this Agreement or the transactions contemplated hereby. 
 ARTICLE VI 
 REPRESENTATIONS AND
WARRANTIES OF SELLER 
 Seller and Partner, jointly and severally, represent and warrant to Purchaser as follows: 
 Section 6.01 Organization of Seller; Authority. Seller is a limited partnership duly organized, validly existing, and in good standing under the
laws of the State of Texas. Seller has all requisite power and authority to own and hold the Acquired Assets owned or held by it, to carry on the Business in each jurisdiction where the Business is conducted, and to own or lease and operate its
properties as such Business is now conducted and such properties are now owned, leased, or operated. Seller has all requisite power and authority to execute and deliver this Agreement and all other agreements, documents, and instruments contemplated
hereby and to carry out all actions required of Seller pursuant to the terms of this Agreement and such other agreements. This Agreement has been duly executed and delivered by Seller and constitutes the legal, valid, and binding obligation of
Seller, enforceable against Seller in accordance with its terms. All related agreements to be entered into by Seller at Closing will, at Closing, have been duly executed and delivered by Seller and will constitute the legal, valid and binding
obligations of Seller, enforceable against Seller in accordance with its terms. 
 Section 6.02 Noncontravention. Neither the
execution and delivery of this Agreement by Seller nor the consummation by Seller of the transactions contemplated hereby will constitute a violation of, or be in conflict with, or constitute or create a default under, or result in the creation or
imposition of any Encumbrance (as defined in Section 6.03 below) upon any assets or property of Seller (including, without limitation, any of the Acquired Assets) pursuant to (a) the charter documents, bylaws or other organizational
documents of Seller, each as amended to date; (b) any contract, agreement or commitment (including the Scheduled Contracts) to which Seller is a party or by which Seller or any of its assets or properties (including, without limitation, any of
the Acquired Assets) is bound, or to which Seller or any of such assets or properties (including, without limitation, any of the Acquired Assets) is subject; or (c) any statute or any judgment, decree, order, regulation, or rule of any
court or governmental authority to which Seller is subject. 
 Section 6.03 Title to Acquired Assets. Except as described in
Schedule 6.03-1, Seller is the lawful owner of, has good and valid record and marketable title to, and has the full right to sell, convey, transfer, assign, and deliver the Acquired Assets to Purchaser. Except as set forth on Schedule
6.03, all of the Acquired Assets are held by Seller free and clear of any security interest, liens, claims, charges, options, mortgages, debts, leases (or subleases), conditional sales agreements, title retention agreements, encumbrances of any
kind, or restrictions against the transfer or assignment thereof (collectively, “Encumbrances”). At and as of the Closing, Seller will convey the Acquired Assets to Purchaser by deeds, bills of sale, certificates of title, and
instruments of assignment and transfer effective to vest in Purchaser, and Purchaser will have 

  

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good and valid record and marketable title to all of the Acquired Assets, free and clear of all Encumbrances. 
 Section 6.04 No Equity Interests. Except as noted in Schedule 6.03, the Acquired Assets do not include any equity interest, or any security
convertible, exercisable or exchangeable into any equity interest, in any person. 
 Section 6.05 Absence of Changes. Except as set
forth on Schedule 6.05, since February 28, 2005: 
 (a) there has not been any material adverse change in
Seller’s business financial condition, prospects, assets or operations or any occurrence or circumstance which could have such a material adverse change; 
 (b) the Acquired Assets and the Business have been operated and maintained in the ordinary course of business; 
 (c) there has not been any material damage, destruction or loss affecting any portion of the assets or properties of Seller related to the
Business, whether covered by insurance or not; 
 (d) there has not been any sale, transfer, lease, abandonment, or other
disposal of any property or assets of Seller related to the Business, except in the ordinary course of business and consistent with past practices with comparable replacement thereof; 
 (e) there has been no merger or consolidation of Seller with any other person or any agreement with respect thereto; 
 (f) there have been no dividends or other distributions declared or made by Seller; 
 (g) there has been no actual, pending or, to the Knowledge of Seller, threatened adverse change in the relationship of Seller or any of
its Affiliates with any material customer, supplier, distributor or sales representative of the Business; 
 (h) neither
Seller nor any of its Affiliates has entered into any employment, consulting, severance or indemnification agreement or an agreement with respect to a retention bonus with any of the employees of the Business, nor has Seller or any of its Affiliates
incurred or entered into any collective bargaining agreement or other obligation to any labor organization or employee; 
 (i)
there has not been any change by the Seller nor any of its Affiliates in the accounting principles, policies or treatments applicable to the Business or otherwise affecting the Acquired Assets; 
 (j) except for a change in the pay structure for Rick Garland, made effective 6-1-05 and merit raises for hourly paid employees made in
the normal course of business, there 

  

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has been no increase in the compensation or benefits of any officer or employee of the Business; and 
 (k) there is no contract or agreement to do any of the foregoing, except as expressly permitted by this Agreement. 
 Section 6.06 Personal Property. 
 (a) Except for items listed in Schedule 1.02, Schedule 1.01(a) lists each item of equipment, tools, machinery, parts, materials, supplies, furniture, cars, trucks, trailers and other rolling stock and
each other item of tangible personal property used or held for use by Seller or any of its Affiliates in connection with the Business. 
 (b) Except for items listed on Schedule 1.02, the personal property included in the Acquired Assets (the “Personal Property”) constitutes all of the tangible personal property necessary for the
continued ownership, use and operation of the Business consistent with the past practices of Seller since December 31, 2004 and with the practices of Seller as of the date hereof. Except as set forth on Schedule 6.06(b)-1, Seller has
good and marketable title to such Personal Property free and clear of all Encumbrances. Upon the consummation of the transactions contemplated by this Agreement, Purchaser will have good and marketable title to the Personal Property free and clear
of all Encumbrances. Except for equipment and tools undergoing normal rebuilding, repairs and maintenance as described in Schedule 6.06(b)-2, each item of Personal Property is in good working order and repair (taking its age and ordinary wear
and tear into account), has been operated and maintained in the ordinary course of business and remains in suitable and adequate condition for use consistent with its primary use since December 31, 2004 (or later acquisition date). Seller and
its Affiliates have not deferred maintenance of any such item in contemplation of the transactions contemplated by this Agreement. 
 Section
6.07 Permits. Schedule 6.07 lists all Permits granted by any governmental authority and used or held by Seller or any of its Affiliates in connection with the ownership and operation of the Acquired Assets or conduct of the Business
(the “Scheduled Permits”). The Scheduled Permits constitute all Permits necessary for the continued ownership, use and operation of the Business consistent in all material respects with the past practices of the Business since
December 31, 2004. Except as set forth in Schedule 6.07, the Scheduled Permits are valid and in full force and effect and Seller and its Affiliates are not in default, and no condition exists that with notice or lapse of time or both
would constitute a default, under any of the Scheduled Permits. 
 Section 6.08 Contracts. 
 (a) Schedule 6.08 identifies each of the following contracts, agreements, commitments or arrangements (whether written or verbal,
“Contracts”) used or usable in connection with or relating to the Business to which Seller or any of its Affiliates is a party or by which it or its properties is bound (each such identified Contract, a “Material
Contract”): 
 (i) any Contract that provides for the payment by Seller or any of its Affiliates of more than $25,000
in any consecutive 12-month period or more than $25,000 over the remaining life of such Contract other than a Contract that (A) is 

  

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terminable by any party thereto giving notice of termination to the other party thereto not more than 30 days in advance of the proposed termination date and
(B) even if so terminable, contains no post-termination obligations, termination penalties, buy-back obligations or similar obligations; 
 (ii) any Contract that constitutes a purchase order or other Contract relating to the sale, purchase, lease or provision by Seller or any of its Affiliates of goods or services in excess of $25,000 in any 12-month
period; 
 (iii) any Contract providing for a master services agreement or similar arrangement; 
 (iv) any Contract that could result in well control or environmental liability 
 (v) any Contract that grants any person the exclusive right to sell products or provide services within any geographical region other than
a Contract that (A) is terminable by any party thereto giving notice of termination to the other party thereto not more than 30 days in advance of the proposed termination date and (B) even if so terminable, contains no post-termination
obligations, termination penalties, buy-back obligations or similar obligations; 
 (vi) any Contract that purports to limit
the freedom of Seller or any of its Affiliates to compete in any line of business or to conduct business in any geographic location; 
 (vii) any Contract that is for the sale of goods or services and has not been substantially completed by Seller or any of its Affiliates as of the Closing Date and which (A) was entered into by Seller or any of its Affiliates on terms
known at the time the Contract was entered into not to be commercially reasonable or (B) was entered into with the expectation that Seller or any of its Affiliates would incur a loss; 
 (viii) any Contract that was entered into outside of the ordinary course of business; 
 (ix) any Contract constituting a partnership, joint venture or other similar Contract; 
 (x) any Contract relating to indebtedness for borrowed money, any Contract creating a capital lease obligation, any Contract for the sale
of accounts receivable, any Contract constituting a guarantee of debt of any third person or any Contract requiring Seller or any of its Affiliates to maintain the financial position of any other person; 
 (xi) any Contract in respect of Intellectual Property Rights granted to or by Seller or any of its Affiliates; 
  

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 (xii) any lease (including any master lease covering multiple items of personal property)
of any item or items of personal property with a rental expense under such lease (whether for a single item or multiple items) in excess of $25,000 in any consecutive 12-month period; 
 (xiii) any Contract providing for the deferred payment beyond 30 days of any purchase price including any “earn out” or other
contingent fee arrangement; 
 (xiv) any Contract between Seller, on the one hand, and any Affiliate of Seller, on the other
hand (including any Contract providing for (i) compensation, the acceleration of benefits or the loss of any rights in connection with the consummation of the transactions contemplated by this Agreement or (ii) the indemnification of such
Affiliate by Seller); 
 (xv) any Contract with any governmental authority; and 
 (xvi) any Contract involving interest rate swaps, cap or collar agreements, commodity or financial future or option contracts or similar
derivative or hedging Contracts. 
 (b) True and complete copies (including all amendments) of each written Material Contract,
and written summaries of each verbal Material Contract, have been provided to Purchaser. Except as disclosed in Schedule 6.08: (i) each Material Contract is the legal, valid obligation of Seller, and to the Knowledge of Seller, any other
person party thereto, binding and enforceable against Seller and, to the Knowledge of Seller, any other person party thereto, in accordance with its terms; (ii) each Material Contract has not been terminated, and neither Seller nor, to the
Knowledge of Seller, any other person is in material breach or default thereunder, and to the Knowledge of Seller no event has occurred that with notice or lapse of time, or both, would constitute a material breach or default, or permit termination,
modification in any manner adverse to Seller or acceleration thereunder; (iii) no party has asserted or has any right to offset, discount or otherwise abate any amount owing under the Material Contract except as expressly set forth in such
Contract; and (iv) neither of Seller nor any of its Affiliates is a party to any Contract described in Section 6.08(a) that is not disclosed in Schedule 6.08. 
 (c) Except as disclosed in Schedule 6.08, each Material Contract may be assigned to Purchaser without the consent of any party
thereto in connection with the transactions contemplated by this Agreement nor that the assignment of any such Material Contract will not provide any party thereto the right to terminate any such Material Contract or alter the rights and obligations
of the parties thereto or the terms of any such Material Contract in any material respect. 
 Section 6.09 Intellectual Property.

 (a) Schedule 6.09(a) identifies all Intellectual Property Rights owned or used in the conduct of the Business (the
“Seller Intellectual Property”). The Seller Intellectual Property constitutes all Intellectual Property Rights necessary for the continued operation of the Business consistent with the past practices of the Business since
December 31, 2004. 
  

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 (b) Except as set forth on Schedule 6.09(b), Seller has ownership of, or valid
licenses to use, all of the Seller Intellectual Property, free and clear of all Encumbrances. All consents required under the Seller Intellectual Property in connection with the transactions contemplated by this Agreement have been obtained and
furnished in writing to Purchaser. Upon the consummation of the transactions contemplated by this Agreement, Purchaser will have good and marketable title to the Seller Intellectual Property free and clear of all Encumbrances. 
 (c) Except as disclosed on Schedule 6.09(c), during the three-year period preceding the date of this Agreement, none of Seller or
its Affiliates has been a party to any judicial or administrative proceeding alleging, nor has Seller or any Affiliate of Seller been notified during such three-year period of any allegation of, any infringement or misappropriation of any item of
Seller Intellectual Property, whether owned by Seller or any other person. To the Knowledge of Seller, there has been no other material infringement or misappropriation (or facts that are reasonably likely to give rise to a material infringement or
misappropriation) by Seller of any Intellectual Property Rights of third persons or of any continuing material infringement or misappropriation (or facts that are reasonably likely to give rise to a material infringement or misappropriation) by any
other person of any of the Seller Intellectual Property. No Seller Intellectual Property is subject to any outstanding order, judgment, decree, stipulation or agreement restricting the use thereof. 
 (d) Except as set forth on Schedule 6.09(d), all statutory obligations and all fees, annuities and other payments which are due on
or before the Closing Date for any of the Seller Intellectual Property including, without limitation, all United States or foreign patents, patent applications, trademark registrations, service mark registrations, copyright registrations and any
applications for any of the preceding, have been met or paid in full. 
 Section 6.10 Brokers’ Fees. Neither Seller nor any of
its Affiliates has any liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement for which Purchaser or any of its Affiliates could become liable or
obligated. 
 Section 6.11 Taxes. 
 (a) Except as disclosed on Schedule 6.11, (i) all tax returns required to be filed by Seller or any of its Affiliates with respect to any of the Acquired Assets or the Business have been duly and timely
filed with the appropriate governmental authority, (ii) all tax items required to be included in each such tax return have been so included and all such tax items and any other information provided in each such tax return is true, correct and
complete, (iii) all taxes owed by Seller or any of its Affiliates with respect to any of the Acquired Assets or the Business that are or have become due have been timely paid in full, (iv) no penalty, interest or other charge is or will
become due with respect to the late filing of any such tax return or late payment of any such tax, (v) all tax withholding and deposit requirements imposed with respect to any of the Acquired Assets or the Business have been satisfied in full
in all respects, (vi) there are no Encumbrances on any of the Acquired Assets or the Business that arose in connection with any failure (or alleged failure) to pay any tax, (vii) there is no claim pending or threatened by any governmental
authority in connection with any such tax, (viii) none of such tax returns are now 

  

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under audit or examination by any governmental authority, (ix) there are no agreements, waivers or other arrangements providing for an extension of time
with respect to the filing of any such tax return or the assessment or collection of any such tax, and (x) Purchaser will not be liable as a successor or transferee for any unpaid taxes related to the Business or the Acquired Assets.

 (b) For purposes of this Section 6.11, the terms “taxes,” “tax items” and
“tax returns” shall have the meanings prescribed below: 
 (i) “tax” or
“taxes” means any taxes, assessments, fees and other governmental charges imposed by any governmental authority, including without limitation income, profits, gross receipts, net proceeds, alternative or add-on minimum, ad valorem,
value added, turnover, sales, use, property, personal property (tangible and intangible), environmental, stamp, leasing, lease, user, excise, duty, franchise, capital stock, transfer, registration, license, withholding, social security (or similar),
unemployment, disability, payroll, employment, fuel, excess profits, occupational, premium, severance, estimated, or other charge of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not; 
 (ii) “tax items” means all items of income, gain, loss, deduction and credit and other tax items; and 
 (iii) “tax return” means any return, declaration, report, claim for refund, or information return or statement relating
to taxes, including any schedule or attachment thereto, and including any amendment thereof. 
 Section 6.12 Product and Service
Warranty. No warranty claims have been asserted during the three year period prior to the date hereof in connection with the operation of the Acquired Assets or the Business from which Seller or any of its Affiliates have incurred costs in
excess of $25,000. 
 Section 6.13 Employees; Employee Relations. 
 (a) Neither of Seller nor any of its Affiliates is a party to or bound by any collective bargaining agreement applicable to any employee
involved in the Business (“Business Employee”), nor have Seller or any of its Affiliates experienced any strikes, grievances, claims of unfair labor practices, or other collective bargaining disputes with respect to any Business
Employee during the five-year period prior to the date of this Agreement. Neither Seller nor any of its Affiliates has committed any unfair labor practice with respect to any Business Employee during such five-year period. To the Knowledge of
Seller, no organizational efforts are presently being made or threatened by or on behalf of any labor union with respect to any Business Employees. 
 (b) Except for unemployment compensation claims which will not adversely impact the Acquired Assets or Purchaser, no legal proceedings, charges, complaints, grievances or similar actions have been commenced with
respect to Seller or any of its Affiliates under any laws or regulations affecting the employment relationship, and, to the Knowledge of Seller, no proceedings, charges, or complaints are threatened under any such laws or regulations and no facts or
circumstances exist which would give rise to any such proceedings, charges, complaints, 

  

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or claims. Seller and its Affiliates are not subject to any settlement or consent decree with any present or former employee, employee representative or any
governmental authority relating to claims of discrimination or other claims in respect to employment practices and policies. No governmental authority has issued a judgment, order, decree or finding with respect to the labor and employment practices
(including practices relating to discrimination) of either of Seller or any of its Affiliates. 
 (c) Schedule 6.13
sets forth a true, correct and complete list, as of the Closing Date, of all Business Employees. The list described in the preceding sentence shows each Business Employee’s name, job title, original hire date, bonus paid or payable for calendar
year 2004 and current base salary or base wages. Except for two pending worker’s compensation cases which will not adversely impact the Acquired Assets or Purchaser, as of the date of this Agreement, no current or former Business Employee of
Seller is on a disability leave of absence, is receiving disability benefits, or is in an elimination or other waiting period with respect to his or her receipt of disability benefits. There are no loans or other obligations payable or owing by
Seller or any of its Affiliates to any Business Employee, except salaries, wages and salary advances and reimbursement of expenses incurred and accrued in the ordinary course of business, nor are any loans or debts payable or owing by any such
individuals to Seller or any of its Affiliates, nor have Seller or any of its Affiliates guaranteed any of such individual’s respective loans or obligations. There are no contracts of employment with any of the Business Employees except as
listed on Schedule 6.13. True and complete copies (including all amendments) of each such contract of employment with any of the Business Employees have been provided to Purchaser. 
 Section 6.14 Employee Benefit Plans. 
 (a) Schedule 6.14 lists each of the following (collectively, the “Plans”) that is sponsored, maintained or contributed to as of the date hereof by Seller for the benefit of the current or
former directors, officers or employees (or beneficiaries thereof) of Seller into categories corresponding with the applicable subsections of this Section 6.14: 
 (i) each “employee benefit plan,” as such term is defined in Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended (“ERISA”); and 
 (ii) each stock option plan, bonus plan or arrangement, incentive award
plan or arrangement, vacation policy, severance pay plan, policy, or agreement, deferred compensation agreement or arrangement, executive compensation or supplemental income arrangement, and each other employee benefit plan, agreement, arrangement,
program, or practice that is not described in Section 6.14(a)(i). 
 (b) None of Seller nor any Affiliate of Seller, or
any corporation, trade, business or entity under common control with Seller within the meaning of section 4.14(b), (c), (m) or (o) of the Code or Section 4001 of ERISA (a “Commonly Controlled Entity”) sponsors,
maintains contributes to or has an obligation to contribute to, nor has Seller, any Affiliate or any Commonly Controlled Entity at any time within six years prior to the Closing Date, sponsored, maintained, contributed to or had an obligation to
contribute to, either (a) a multiemployer plan 

  

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within the meaning of Section 3(37) of ERISA, (b) any plan subject to Title IV of ERISA or (c) any plan subject to Section 302 of ERISA
or section 412 of the Code. With respect to each group health plan maintained by Seller, Seller has complied with the continuation of coverage requirements set forth in section 4980B(f) of the Code, Section 601 et. seq. of ERISA, and applicable
state laws. 
 Section 6.15 Environmental Matters. 
 (a) Schedule 6.15(a) sets forth all environmental Permits required for operation of the Business. No additional environmental
Permits are required for the sale and transfer of the Acquired Assets to Purchaser or are required to be obtained by Purchaser for the operation of the Business and use of the Acquired Assets by Purchaser as of the Closing Date. Except as otherwise
disclosed in Schedule 6.15(a), the environmental Permits described therein are in full force and effect. There are no proceedings pending or threatened which might affect (i) the validity of any environmental Permits described in
Schedule 6.15(a), (ii) the ability of Seller or Purchaser to obtain prior to the Closing Date any environmental Permit described in Schedule 6.15(a) which has not been obtained at the date of this Agreement, or (iii) the
ability of Purchaser to obtain within the time specified by applicable environmental law any environmental Permit described in Schedule 6.15(a), nor is there any basis for any such proceeding. 
 (b) None of the Acquired Assets or other property used in the Business is subject to any Encumbrance imposed by or arising under any
environmental law, and there are no proceedings pending or threatened for imposition of any such Encumbrance, nor is there any basis for any such Encumbrance or proceeding. 
 (c) The Business and the Acquired Assets are currently, and have at all times in the past been operated, in compliance with the
requirements of applicable environmental laws except for minor instances as described in Schedule 6.15(c) that were corrected or remediated. Neither Seller nor any of its Affiliates have received any communication in any form from any
governmental authority or any other person alleging that Seller is not in compliance with any environmental law applicable to the Business. To the Knowledge of Seller, there are no circumstances relating to the Business that may prevent or interfere
with Purchaser’s compliance with all environmental laws applicable to the Business as of the Closing Date. 
 (d) There
are no present or past actions, activities, circumstances, conditions, events or incidents, including, without limitation, any release of any hazardous materials, with respect to the Business or the Acquired Assets that could reasonably be expected
to form the basis for assertion of any environmental liability against any owner or operator of the Business or the Acquired Assets. There has been no release of hazardous materials in connection with the Business for which all clean-up, remediation
and restoration actions required under environmental laws have not been performed and completed to the satisfaction of the relevant governmental authority. There is no asbestos contained in or forming part of any equipment, property, building,
building component, structure or office space used in connection with the Business. 
 (e) There are no proceedings pending or
threatened against Seller or any of its Affiliates or any predecessor with respect to the operation of the Business, against the Business 

  

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itself or any property or assets used therein, in which any violation of any environmental law is alleged or any environmental liability is asserted, nor is
there any basis for any such proceeding. 
 (f) Seller has provided or made available to Purchaser all internal and external
environmental audits, assessments, reports, studies, documents, and correspondence on environmental matters and compliance with environmental laws relating to the operation of the Business and use of the Acquired Assets that are in the possession or
control of Seller. 
 Section 6.16 Property Matters. 
 (a) Except for the real property listed on Schedule 6.16(a) (which are Excluded Assets), Seller does not own or have any interest
in any real property (beneficially or of record). 
 (b) Other than Seller, there are no parties physically occupying or using
any portion of any real property covered by the Lease Agreements or the Founder Lease Agreements nor do any other parties have the right to physically occupy or use any portion of the real property covered by the Lease Agreements or the Founder
Lease Agreements. Certificates of occupancy and all other material licenses, permits, authorizations and approvals required by any governmental authority having jurisdiction over such real property have been issued for Seller’s occupancy of the
facilities located on the real property covered by the Lease Agreements and the Founder Lease Agreements and all such certificates, licenses, permits, authorizations and approvals have been paid for and are in full force and effect. Seller has not
made application for rezoning of any of the real property covered by the Lease Agreements or the Founder Lease Agreements and, to the Knowledge of Seller, there are no proposed or pending changes to any zoning affecting the real property covered by
the Lease Agreements or the Founder Lease Agreements. To the Knowledge of Seller, none of the real property covered by the Lease Agreements or the Founder Lease Agreements is within any area determined by the Department of Housing and Urban
Development to be flood prone under the Federal Flood Disaster Protection Act of 1973. To the Knowledge of Seller, the facilities located on the real property covered by the Lease Agreements and the Founder Lease Agreement are free from material
structural and mechanical defects and have been used by Seller in the ordinary course of business and remain as of the date hereof in suitable and adequate condition for such continued use. There are no outstanding work orders issued by or on behalf
of Seller with respect to any such facilities. Seller has such rights of entry to and exit from the real property covered by the Lease Agreements and the Founder Lease Agreements and the facilities located thereon as is necessary to carry on the
Business consistent with past practices. 
 (c) To the Knowledge of Seller, all utilities (including, without limitation,
water, sewer, gas, electricity, trash removal and telephone service) are available to the facilities located on the real property covered by the Lease Agreements and the Founder Lease Agreements in sufficient quantities and quality to adequately
serve such facilities in connection with the current operation of the Business conducted therefrom. 
 (d) Seller has not
received notice of a violation of any applicable ordinance or other law, order, regulation or requirement, including, without limitation, the Americans with Disabilities Act of 1990, as amended, and all rules and regulations promulgated thereunder
(the “ADA”), and has not received notice of condemnation, lien, assessment or the like, relating to 

  

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any part of the facilities located on the real property covered by the Lease Agreements or the Founder Lease Agreements or the operation thereof. 

(e) The cost and responsibility for remediating any deficiencies noted in the Phase I environmental reports relating to the real
property related to the Founder Lease Agreements shall be borne by Seller and Seller shall commence remediation immediately upon receipt of notice of such deficiency. 
 Section 6.17 Customers, Vendors and Suppliers. 
 (a) To the Knowledge of Seller, there
is no present intent of any significant customer, vendor or supplier of the Business to discontinue or substantially alter its relationship as such with the Business or Purchaser upon consummation of the transactions contemplated hereby. 

(b) Schedule 6.17 sets forth a list of the top 10 customers and top 10 vendor/suppliers of the Business for the fiscal year
ended December 31, 2004 and for the eight months ended August 31, 2005. 
 Section 6.18 Insurance. Schedule 6.18 sets
forth a true and complete list of all policies, binders, and insurance contracts under which the Business or any of the Acquired Assets is insured (the “Insurance Policies”). With respect to each Insurance Policy, Schedule
6.18 sets forth a true and correct description of (a) the scope of coverage, (b) the limits of liability, (c) deductibles and other similar amounts, and (d) the aggregate limits and available coverage (if less than the
aggregate limits) as of the date hereof. Each of the Insurance Policies is in full force and effect, there has been no written notice of any cancellation or any threatened cancellation of any Insurance Policy, and Seller is a named insured or loss
payee, as applicable, under each Insurance Policy. 
 Section 6.19 Books and Records. All books and records relating to the ownership
and operation of the Business and the Acquired Assets are located at the premises of the Business to which such books and records primarily relate, have been maintained in accordance with applicable law and comprise all of the books and records
relating to the ownership and operation of the Business and the Acquired Assets. 
 Section 6.20 Inventories. Seller owns its
Inventories free and clear of all Encumbrances. Except as disclosed on Schedule 6.20, such Inventories were acquired for sale in the ordinary course of business and are in good and saleable condition and are not obsolete, slow moving or
damaged. None of such inventory is subject to any consignment, bailment, warehousing or similar arrangement. 
 Section 6.21 Assets
Necessary to the Business. At and following the Closing, the Acquired Assets transferred to Purchaser pursuant hereto (a) will constitute all of the assets necessary or required to permit Purchaser to carry on the Business in substantially
the same manner as presently conducted by Seller and as conducted by Seller since December 31, 2004 and (b) constitute all of the assets of Seller and its Affiliates used in the Business presently and since December 31, 2004 other
than the Excluded Assets. 
  

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 Section 6.22 Conformity to Law. Seller has complied with, and is in compliance with, (a) all
laws, statutes, governmental regulations, and all judicial or administrative tribunal orders, judgments, writs, injunctions, decrees, or similar commands applicable to the Business or any of the Acquired Assets (including, without limitation, any
labor, environmental, occupational health, zoning, or other law, regulation, or ordinance); (b) all unwaived terms and provisions of all contracts, and agreements to which Seller is a party, or by which Seller or any of the Acquired Assets is
subject; and (c) its charter documents, bylaws or other organizational documents, each as amended to date. Seller has not committed, been charged with, or, to its knowledge, been under investigation with respect to, nor does there exist, any
violation of any provision of any law or regulation in respect of its Business or any of the Acquired Assets. 
 Section 6.23
Commissions. Seller does not and will not owe any commissions to any customer of Seller, and Seller is not obligated to pay any other amounts to or perform other obligations (other than routine servicing of customer accounts) for any customer
of the Business. 
 Section 6.24 Absence of Certain Business Practices. Neither Seller nor any officer, employee or agent of Seller,
nor any other person acting on its behalf, has, directly or indirectly, offered, paid or promised to pay, or authorized the payment of, any money or other thing of value (including any fee, gift, sample, travel expense or entertainment with a value
in excess of one hundred U.S. dollars in the aggregate to any one individual in any year), or any commission payment, to any customer, supplier, government employee, political party or candidate for political office, or other person who is or may be
in a position to help or hinder the Business (or to assist Seller in connection with any actual or proposed transaction) which (i) could subject Seller to any damage or penalty in any civil, criminal or governmental litigation or proceeding in
any jurisdiction, including the United States and Canada, (ii) if not given in the past, could have had a material adverse effect on the Business or Acquired Assets, or (iii) if not continued in the future, could materially adversely
effect the Business or Acquired Assets. Seller maintains a system of internal accounting controls adequate to ensure that Seller maintains no off-the-books accounts and that Seller’s assets are used only in accordance with Seller’s
management directives. 
 Section 6.25 Financial Statements. Attached hereto as Schedule 6.25 are copies of (a) the
unaudited balance sheet of Seller at August 31, 2005 and the related unaudited statements of income for the eight-months then ended (collectively, the “Financial Statements”). Except as set forth on
Schedule 6.25, the Financial Statements (including any related notes thereto) (i) fairly present the financial condition, assets and results of operations of Seller as of the respective dates thereof and for the respective
periods covered thereby, and (ii) have been prepared from, and are in accordance with, the books and records of Seller. 
 Section 6.26
Safety Performance. Seller and the Business are in compliance in all material respects with all laws and regulations applicable to the Seller or the Business which impose safety standards or safety compliance requirements. Schedule
6.26 hereto accurately reflects the historical safety performance of the Seller and the Business for the periods designated in such schedule. 
 Section 6.27 Disclosure. No representation or warranty by Seller in this Agreement or in any exhibit, schedule, written statement, certificate, or other document delivered or to be 

  

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delivered to Purchaser pursuant hereto, or in connection with the consummation of the transactions contemplated hereby, contains or will contain any untrue
statement of a material fact, or omits or will omit to state a material fact required to be stated therein or necessary to make the statements contained therein not misleading or necessary in order to provide a prospective purchaser of the Business
with proper and complete information as to Seller and the identity, value, and usability of the Acquired Assets. 
 ARTICLE VII

 REPRESENTATIONS AND WARRANTIES OF BUYER 
 Purchaser represents and warrants to Seller as follows: 
 Section 7.01 Organization and Standing of
Purchaser; Authority. Purchaser is a corporation duly organized, validly existing, and in good standing under the laws of Alberta. Purchaser has all requisite power and authority to execute and deliver this Agreement and all other agreements,
documents and instruments contemplated hereby and to carry out all actions required of Purchaser pursuant to the terms of this Agreement and such other agreements. This Agreement has been duly executed and delivered by Purchaser and constitutes the
legal, valid, and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms. 
 Section 7.02
Noncontravention. Neither the execution and delivery of this Agreement by Purchaser nor the consummation by Purchaser of the transactions contemplated hereby will constitute a violation of, or be in conflict with, constitute, or create a
default under, or result in the creation or imposition of any Encumbrances upon any assets or property of Purchaser pursuant to (a) the charter documents, bylaws or other organizational documents of Purchaser, each as amended to date;
(b) any contract, agreement or commitment to which Purchaser is a party or by which Purchaser or any of its assets or properties is bound or to which Purchaser or any of such assets or properties is subject; or (c) any statute or any
judgment, decree, order, regulation, or rule of any court or governmental authority to which Purchaser is subject. 
 Section 7.03
Brokers. Purchaser has not retained, utilized, or been represented by any broker or finder in connection with the transactions contemplated by this Agreement. 
 ARTICLE VIII 
 COVENANTS 
 Section 8.01 Conduct of Business. From the date of this Agreement through the Closing, except as set forth on Schedule 8.01, as
contemplated by this Agreement, or as consented to by Purchaser in writing, (a) Seller shall (x) operate the Business in the ordinary course of business and (y) use reasonable efforts to preserve intact the Business and its
relationship with customers, suppliers and others having relationships with the Business and (b) Seller shall not: 
 (i)
change its accounting methods, policies or practices relating to the Business, except as required by GAAP; 
  

 23 

 (ii) make, amend or revoke any election with respect to taxes relating to the Business or
Acquired Assets; 
 (iii) sell, assign, transfer, lease or otherwise dispose of any capital assets used or usable in the
Business in excess of $5,000 individually or $25,000 in the aggregate, except in the ordinary course of business; 
 (iv)
create any Encumbrances on any of the Acquired Assets; 
 (v) merge into or with or consolidate with any other person or
acquire all or substantially all of the business or assets of any person; 
 (vi) declare or pay any dividend on, or make any
other distribution with respect to, the securities of Seller; 
 (vii) make any change to its charter, bylaws or other
organizational documents; 
 (viii) purchase any securities of any person; 
 (ix) take any action or enter into any commitment as part of any liquidation, dissolution, recapitalization, reorganization or other
winding up of its business or operations; 
 (x) enter into any settlement of any pending or threatened litigation involving
amounts of $10,000 or more; 
 (xi) incur any indebtedness except for any such indebtedness required in the ordinary course of
business or that will be repaid in full at Closing; 
 (xii) terminate or cancel any insurance coverage, except for
terminations that occur in the ordinary course of business and that are renewed in connection therewith; 
 (xiii) make any
changes to its billing or pricing methods or practices; 
 (xiv) materially change the timing and recognition of allowances,
rebates or concessions from suppliers; 
 (xv) hire or terminate any employee or take any actions that would lead to
significant loss of services of employees, except, in both cases, for terminations for cause; 
 (xvi) take any actions that
would adversely change the relationships with providers, suppliers and customers of the Business; 
 (xvii) except as to Rick
Garland, Errol Sonnier and Dan Wiggins, change or implement severance compensation benefits for any employee, increase compensation 

  

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payable or that could become payable, directly or indirectly, to any employee or increase benefits under, or adopt any bonus, insurance, pension or other
employee benefit plan payments or arrangement for or with any employees, all except as are consistent with past practices, or otherwise amend any such plan, payments or arrangements, all except as required by law; 
 (xviii) acquire any asset that would require the payment of $10,000 or more for any such asset, except for acquisitions of inventory in
the ordinary course of business consistent with past practices; 
 (xix) write down Inventories except in each case in
accordance with generally accepted accounting principles; or 
 (xx) agree, whether in writing or otherwise, to do any of the
foregoing. 
 Section 8.02 Access. From the date hereof through the Closing, Seller shall afford to Purchaser and its authorized
representatives reasonable access, during normal business hours and in such manner as not to unreasonably interfere with normal operation of the Business, to the properties, books, contracts, records and appropriate officers and employees of Seller
to the extent related to the Business and Acquired Assets, and shall furnish such authorized representatives with all financial and operating data and other information concerning the affairs of Seller to the extent related to the Business as
Purchaser and such representatives may reasonably request. 
 Section 8.03 Third Party Approvals. Purchaser and Seller shall (and
shall each cause their respective Affiliates to) use reasonable efforts to obtain all consents and approvals of third parties that any of Purchaser, Seller or their respective Affiliates are required to obtain in order to consummate the transactions
contemplated hereby. 
 Section 8.04 Non-Competition. 
 (a) (i) Each of Seller and Partner (for purposes of this Section 8.04, a “Restricted Party”), in order to induce
Purchaser to enter into this Agreement, expressly covenants and agrees that during the Prohibited Period (as defined below), such Restricted Party will not, and will cause its Affiliates and shareholders not to, directly or indirectly, own, manage,
operate, join, control or participate in or be connected with, or loan money to any business, individual, partnership, firm, corporation or other entity, which wholly or in any significant part, engages in Tubular Services in any geographic area
where Purchaser or its Affiliates carries on business (a “Competing Business”). For purposes of this Section 8.04, any such business, individual, partnership, firm, corporation or other entity shall be deemed to be engaged in
significant part in a Competing Business if more than 5% of its gross revenues in any 12 month period are attributable to the Competing Business. “Prohibited Period” shall mean five years from and after the Closing Date. 

(ii) Each Restricted Party further expressly covenants and agrees that during the Prohibited Period, it will not, and will cause its
Affiliates and shareholders not to (1) engage or employ, or solicit or contact with a view to the engagement or employment of any person who is an officer or employee of Purchaser or any of its 

  

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Affiliates (including any Business Employee); or (2) canvass, solicit, approach or entice away or cause to be canvassed, solicited, approached or
enticed away from the Business any person who or which is a customer of Purchaser or any of its Affiliates. 
 (iii) To the
extent that any part of this Section 8.04(a) may be invalid, illegal or unenforceable for any reason, it is intended that such part shall be enforceable to the extent that a court of competent jurisdiction shall determine that such part, if
more limited in scope, would have been enforceable, and such part shall be deemed to have been so written and the remaining parts shall as written be effective and enforceable in all events. 
 (b) The parties agree and acknowledge that the limitations as to time, geographical area and scope of activity to be restrained as set
forth in Section 8.04(a) are reasonable and do not impose any greater restraint than is necessary to protect the legitimate business interests of Purchaser. The parties further agree and acknowledge that, in the event of a breach or threatened
breach of any of the provisions of this Section 8.04, Purchaser shall be entitled to immediate injunctive relief, as any such breach would cause Purchaser irreparable injury for which they would have no adequate remedy at law. Nothing herein
shall be construed so as to prohibit Purchaser from pursuing any other remedies available to it hereunder, at law or in equity for any such breach or threatened breach. 
 (c) Each Restricted Party hereby represents to Purchaser that it has read and understands and agrees to be bound by, the terms of this
Section 8.04. Each Restricted Party acknowledges that the geographic scope and duration of the covenants contained in this Section 8.04 are the result of arm’s-length bargaining and are fair and reasonable in light of (i) the
nature and wide geographic scope of the operations of the Business, (ii) Seller’s and Partner’s level of control over and contact with the Business in all jurisdictions in which it is conducted, (iii) the fact that the Business
is conducted throughout the geographic area where competition is restricted by this Agreement, and (iv) the amount of consideration that Seller and the Partner are receiving in connection with the transactions contemplated by this Agreement and
the amount of goodwill for which Purchaser is paying. It is the desire and intent of the parties that the provisions of this Agreement be enforced to the fullest extent permitted under applicable legal requirements, whether now or hereafter in
effect and therefore, to the extent permitted by applicable legal requirements, the parties hereto waive any provision of applicable legal requirements that would render any provision of this Section 8.04 invalid or unenforceable. 

(d) Notwithstanding the other provisions of this section, nothing shall prevent Partner from acquiring publicly held securities of an
entity representing up to 5% of the outstanding equity of such entity. 
 Section 8.05 Retained Employees. With respect to the
Business Employees: 
 (a) Effective immediately following the Closing, Purchaser shall offer employment to all of the
Business Employees at substantially the same base compensation as they are currently employed by Seller. Each such Business Employee who accepts a position shall hereinafter be referred to as a “Retained Employee” and shall become
an employee of Purchaser. In order to facilitate the foregoing, Seller shall, effective at the Closing, terminate the 

  

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employment of all Business Employees and take all appropriate steps necessary to comply with applicable law in connection with the termination of such
Business Employees. 
 (b) Notwithstanding anything to the contrary contained in this Section 8.05, the parties
acknowledge and agree that they do not intend to create any third-party beneficiary rights respecting any Business Employee as a result of the provisions hereof and specifically hereby negate any intention to so create any third-party beneficiary
rights. 
 (c) Seller agrees that it shall be solely responsible for all liability, costs and expenses (including
attorneys’ fees) for all employment claims (collectively, the “Employment Claims”) by any employee or former employee of Seller which accrued prior to the Closing relating to arbitrations, unfair labor practice charges,
employment discrimination charges, wrongful termination claims, workers’ compensation claims, any employment-related tort claim or other claims or charges of or by employees of Seller. Purchaser agrees that it shall be responsible for all
Employment Claims by any Retained Employee which accrued after the Closing relating to arbitrations, unfair labor practice charges, employment discrimination charges, wrongful termination claims, workers’ compensation claims, any
employment-related tort claim or other claims or charges of or by the Retained Employee. Schedule 8.05 sets forth a description of any known Employment Claims by the Business Employees that have been filed or may be filed after the date
hereof arising out of conditions, actions or events that occurred before the Closing Date. 
 Section 8.06 Use of Name. From and after
the Closing Date, Seller, Partner and their Affiliates will not, directly or indirectly, use in any manner the name “Cheyenne Services, Ltd.” or any derivative thereof or any other trade name, trademark, service mark or logo used by
Seller, or any word or logo that is similar in sound or appearance, in the Business. Partner’s unrelated businesses operating under the names “Cheyenne Fluid Services, Inc” and “Cheyenne Supply, Inc.” may continue their
present use of these names but shall not be used by Seller in the Business. Within 60 days after the Closing Date, Seller shall provide Purchaser with a certified copy of its relevant organizational documents indicating that it has changed its name
in accordance with the foregoing sentence. 
 Section 8.07 Further Assurances. Each party hereto will, at the request of the other,
take such further actions as are requested and execute any additional documents, instruments or conveyances of any kind which may be reasonably necessary to further effect the transactions contemplated by this Agreement; provided, however,
that no such action, document, instrument or conveyance shall increase a party’s liability beyond that contemplated by this Agreement. 
 Section 8.08 Confidentiality. Seller and Partner agree that after the Closing Date any facts, information, know-how, processes, trade secrets, customer lists or confidential matters that relate in any way to the Acquired Assets or
the Business shall be maintained in confidence and shall not be divulged by the Seller, Partner or any of their Affiliates to any party unless and until they shall become public knowledge (other than by disclosure in breach of this
Section 8.08) or as required by applicable law, including applicable securities laws and regulations; provided, before Seller, Partner or any of their Affiliates discloses any of the foregoing as may be required by applicable law, such
person shall give Purchaser reasonable advance notice and take such reasonable actions as Purchaser may propose to minimize the required disclosure. 
  

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 Section 8.09 Exclusivity. From the date of this Agreement through the Closing Date, Seller and
Partner will not (and Seller and Partner will not permit any of Seller’s officers, directors, managers or advisors to), directly or indirectly, solicit, initiate, encourage, negotiate with, engage in discussions with, accept any proposal or
offers from, or provide any information or access to any person relating to a, direct or indirect, acquisition of all or substantially all of the Acquired Assets or the Business (by stock purchase, merger, consolidation or otherwise) by such person.

 Section 8.10 Frank’s Patent Dispute. Seller has notified Purchaser that certain of the processes/procedures used by Seller in
the conduct of the Business could possibly be argued to infringe upon the patent rights of Frank’s International, Inc. (“Franks”) under the patent described on Schedule 8.10 hereto (the “Frank’s
Patent”). Seller and Partner agree that in the event that Frank’s, after the Closing, were to bring an action, claim or demand against Purchaser or its Affiliates based on the Frank’s patent including, without limitation a claim
based on an allegation of infringement (a “Frank’s Patent Claim”) by Purchaser or its Affiliates of Frank’s rights under the Frank’s Patent, then: 
 (i) Partner will engage co-counsel to assist Purchaser and its counsel in investigating, evaluating, challenging and defending against any
Frank’s Patent Claim. Partner will be responsible for the costs of its designated counsel, and Purchaser will be responsible for the costs of its designated counsel in such effort. If Purchaser and Partner engage separate counsel, then
Purchaser’s counsel will be the lead counsel and control the proceeding but Partner’s counsel will provide substantial support, input and assistance in the proceeding; 
 (ii) Partner will fully cooperate, advise, consult with and participate in the investigation, evaluation, challenging and defense of any
Frank’s Patent Claim; 
 (iii) Seller and Partner will pay fifty percent (50%) of any settlement costs payable by
Purchaser or its Affiliates pursuant to any settlement or economic accommodation of a Frank’s Patent Claim; 
 (iv)
Seller and Partner, jointly and severally, agree to pay and to indemnify and hold Purchaser and its Affiliates harmless from and against fifty percent (50%) of any judgment or award resulting from a final judicial determination from which no
appeal may be taken with respect to any dispute subject to this Frank’s Patent Claim; 
 (v) The maximum liability of
Seller and Partner under subsections (iii) and (iv) shall be Five Hundred Thousand Dollars ($500,000); 
 (vi) In
the event that any Frank’s Patent Claim has been commenced by Frank’s prior to distribution of the funds in the Escrow Agreement, then Purchaser may cause the escrow agent under the Escrow Agreement to reserve such amount under the Escrow
Agreement as may be reasonably required to satisfy Seller’s and Partner’s obligations which could arise under subsections (iii) and (iv); and 
 (vii) Purchaser agrees that prior to entering into any settlement arrangement with Frank’s with respect to a Frank’s Patent
Claim which involves a monetary 

  

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settlement payment, Purchaser will consult and coordinate with Partner respecting nonmonetary alternatives to offering a monetary settlement payment.
Furthermore, Purchaser agrees to use commercially reasonable efforts, along with Partner, to reach a nonmonetary solution to any Frank’s Patent Claim prior to agreeing to a monetary settlement payment which would result in Purchaser (on the one
hand) and Seller and Partner (on the other hand) being required to each bear 50% of such monetary settlement payment. 
 Section 8.11
Accounts Receivable. To the extent that any of the Accounts Receivable included in the Acquired Assets are not fully collected (without any setoff or reduction) within 120 days following the Closing, then Purchaser may notify Seller that
Purchaser desires to assign such uncollected Accounts Receivable to Seller. In the event of any such assignment, Seller and Partner will pay to Purchaser, within five Business Days following such assignment an amount equal to the face amount of all
such assigned Accounts Receivable. 
 ARTICLE IX 
 INDEMNIFICATION 
 Section 9.01 Survival. All representations and warranties of Seller and
Partner contained in this Agreement and all covenants contained in this Agreement that are to be performed prior to the Closing shall survive the Closing until twenty-four (24) months after the Closing Date, except that (i) the
representations and warranties in Sections 6.01, 6.02 and 6.03 shall survive indefinitely, (ii) the representations and warranties in Section 6.15 shall survive for five (5) years following Closing and (iii) the representations
and warranties in Section 6.11 shall survive for until the longer of twenty-four (24) months after the Closing Date or the applicable statute of limitations. Seller and Partner shall not have any liability for indemnification claims made
under this Article IX with respect to any such representation, warranty or pre-closing covenant unless a claim notice is provided by the Purchaser to Seller or Partner prior to the expiration of the applicable survival period for such
representation, warranty or pre-closing covenant. If a claim notice has been timely given in accordance with this Agreement prior to the expiration of the applicable survival period for such representation, warranty or pre-closing covenant, then the
applicable representation, warranty or pre-closing covenant shall survive as to such claim, until such claim has been finally resolved. 
 Section 9.02 Indemnity. Seller and Partner agree to jointly and severally indemnify and hold Purchaser and its Affiliates harmless from and with respect to any and all claims, liabilities, losses, damages, costs, and expenses,
including, with limitation, the fees and disbursements of counsel, related to or arising directly or indirectly out of any of the following: 
 (a) any inaccuracies in any representation or warranty made by Seller or Partner in or pursuant to this Agreement or any failure or breach by Seller or Partner of any pre-closing covenant, obligation, or undertaking
made by Seller or Partner in this Agreement; 
 (b) any failure or breach by Seller or Partner of any post-closing
covenant/obligation or undertaking made by Seller or Partner in this Agreement; 
  

 29 

 (c) any and all claims, liabilities, and obligations arising out of the operation of the
Acquired Assets or any business carried on by Seller on or prior to the Closing Date other than Assumed Liabilities; and 
 (d) any claim or liability arising out of or with respect to Retained Liabilities. 
 Section 9.03 Limitations on Liability of
Seller and Partner. Notwithstanding anything to the contrary herein, Seller and Partner shall have no liability arising out of or relating to Section 9.02(a) (other than as it applies to Sections 6.01, 6.02, 6.03, 6.10 and 6.11) except and
until the aggregate losses actually incurred by the Purchaser thereunder exceed $50,000 and then only as to the excess. In no event shall the liability of the Seller or Partner exceed the Purchase Price. 
 Section 9.04 Claims. 
 (a) In the event that Purchaser or any Affiliate desires to make a claim against Seller or Partner under Section 9.02 hereof in connection with any action, suit, proceeding, or demand at any time instituted against or made upon
Purchaser or any Affiliate for which Purchaser or such Affiliate may seek indemnification hereunder (a “Claim”), Purchaser or such Affiliate shall notify Seller and Partner of such Claim and the claim of indemnification with respect
thereto, provided that failure of Purchaser or such Affiliate to give such notice shall not relieve Seller and Partner of their obligations under this Article IX, except to the extent, if at all, that Seller and Partner shall have been
prejudiced thereby. Upon receipt of such notice from Purchaser or any Affiliate, Seller and Partner shall be entitled to assume responsibility for the defense of such Claim, and if and only if each of the following conditions is satisfied:

 (i) Seller and Partner confirm in writing that they are obligated hereunder to indemnify Purchaser with respect to such
Claim; and 
 (ii) Purchaser or its Affiliate does not give Seller and Partner written notice that it has determined, in the
exercise of its reasonable discretion, that matters of corporate or management policy or a conflict of interest make separate representation by Purchaser’s or its Affiliate’s own counsel advisable. 
 Purchaser and its Affiliates shall retain the right to employ their own counsel and to participate in the defense of any Claim, the defense of which has been assumed by
Seller and Partner pursuant hereto, but Purchaser and its Affiliates shall bear and shall be solely responsible for its own costs and expenses in connection with such participation. If Seller and Partner assume any defense, Seller and Partner may
not settle the underlying dispute without the prior approval of Purchaser unless Purchaser and its Affiliates receive a full release as a part of the settlement and such settlement does not adversely impact the Purchaser’s ownership or use of
the Acquired Assets or conduct of the Business from and after the Closing. 
 (b) In the event of any Claims under
Section 9.02 hereof, Purchaser or its Affiliate shall advise Seller and Partner, in writing, of the amount and circumstances surrounding any liquidated Claim. With respect to liquidated Claims, if within thirty (30) days Seller and Partner
have not contested such Claim in writing, Seller or Partner shall pay the full amount thereof within ten (10) days after the expiration of such period. Seller and Partner agree that in 

  

 30 

 
the event of their failure to pay the full amount of such uncontested Claim within such time, Purchaser shall, in addition to other rights available at law
or in equity, have the right to setoff against the payment of any obligations of Purchaser under Section 2.02 hereof or in respect of the promissory note the amount of such Claim that is so unpaid. 
 (c) Seller’s consent shall be a condition of any settlement other than a settlement in which a full release of the Seller is
obtained. 
 ARTICLE X 
 TERMINATION 
 Section 10.01 Termination. At any time prior to the Closing, this Agreement may be terminated and the
transactions contemplated hereby abandoned: 
 (a) by the mutual consent of Purchaser and Seller as evidenced in writing
signed by each of Purchaser and Seller; 
 (b) by Purchaser, if there has been a material breach by Seller of any
representation, warranty or covenant contained in this Agreement which has prevented the satisfaction of any condition to the obligations of Purchaser at the Closing and, if such breach is of a character that it is capable of being cured, such
breach has not been cured by Seller within 30 days after written notice thereof from Purchaser; 
 (c) by Seller, if there has
been a material breach by Purchaser of any representation, warranty or covenant contained in this Agreement which has prevented the satisfaction of any condition to the obligations of Seller at the Closing and, if such breach is of a character that
it is capable of being cured, such breach has not been cured by Purchaser within 30 days after written notice thereof from Seller; 
 (d) by either Purchaser or Seller if any governmental authority having competent jurisdiction has issued a final, non-appealable order, decree, ruling or injunction (other than a temporary restraining order) or taken any other action
permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement; or 
 (e) by
either Purchaser or Seller, if the Closing has not occurred on or before November 30, 2005, or such later date as the parties may agree upon. 
 Section 10.02 Effect of Termination. In the event of termination and abandonment of this Agreement pursuant to Section 10.01, this Agreement shall forthwith become void and have no effect, without any liability on the part of
any party hereto; provided, however, that if this Agreement is validly terminated by a party as a result of breach of this Agreement by one or more non-terminating parties, then the terminating party shall be entitled to all rights and
remedies available under applicable law or equity. The provisions of Section 10.02 hereof shall survive any termination of this Agreement. 
  

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 ARTICLE XI 
 GENERAL 
 Section 11.01 Expenses. All expenses of the preparation, execution, and consummation
of this Agreement and of the transactions contemplated hereby, including, without limitation, attorneys’, accountants’, and outside advisers’ fees and disbursements, shall be borne by the party incurring such expenses. 
 Section 11.02 Notices. All notices, demands, and other communications hereunder shall be in writing or by written telecommunication, and shall be
deemed to have been duly given if delivered personally, or if mailed by certified mail, return receipt requested, postage prepaid, or sent by written telecommunication, as follows: 
 If to Seller, to: 
 Cheyenne Services, Ltd.

 c/o Carlos Torres 
 748 Blalock
Road 
 Houston, Texas 77024 
 Telecopy: (713) 266-5169 
 If to Partner, to: 
 Carlos Torres 
 748 Blalock Road 
 Houston, Texas 77024 
 Telecopy:
(713) 266-5169 
 If to Purchaser, to: 
 Tesco Corporation 
 6204 6A Street SE 
 Calgary, Alberta T2H 2B7 
 Canada 

Telecopy: (403) 252-3362 
 Attention:
General Counsel 
 with a copy to: 
 Tesco Corporation 
 c/o Tesco Corporation US 
 11330 Brittmoore Park Drive 
 Houston, Texas 77041 
 Telecopy: (713) 849-0075 
 Attention:
Associate General Counsel 
 Section 11.03 Entire Agreement. This Agreement contains the entire understanding of the parties,
supersedes all prior agreements and understandings relating to the subject matter 

  

 32 

 
hereof, and shall not be amended except by a written instrument hereafter signed by all of the parties hereto. The confidentiality letter agreement, dated
March 28, 2005, by and between Tesco Corporation and Seller shall terminate effective as of the Closing. 
 Section 11.04 Governing
Law. The validity and construction of this Agreement shall be governed by the laws of the State of Texas. 
 Section 11.05
Arbitration. 
 (a) If a dispute arises out of or relating to this Agreement, or the breach thereof, and if said
dispute cannot be settled through negotiation, then either party may submit such matter to binding arbitration in accordance with the procedures set forth in Schedule 11.05. 
 (b) This provision shall not apply to any dispute that otherwise would be governed by Section 2.02, Purchase Price adjustment.

 Section 11.06 Sections and Section Headings. All enumerated subdivisions of this Agreement are herein referred to as
“section” or “subsection.” The headings of sections and subsections are for reference only and shall not limit or control the meaning thereof. 
 Section 11.07 Assigns. This Agreement shall be binding upon and inure to the benefit of the heirs and successors of each of the parties. Neither this Agreement nor the obligations of any party hereunder shall
be assignable or transferable by such party without the prior written consent of the other party hereto; provided, however, that nothing contained in this Section 11.07 shall prevent Purchaser, without the consent of Seller or Partner,
from transferring or assigning this Agreement or its rights or obligations hereunder to another entity controlling, under the control of, or under common control with Purchaser, provided further, the Seller shall, without the approval of
Purchaser, have the right to convert to a limited partnership provided that such conversion does not adversely impact the Acquired Assets or the Purchaser. 
 Section 11.08 No Third Party Rights or Remedies. Except as otherwise expressly provided herein, nothing herein expressed or implied is intended or shall be construed to confer upon or to give any person, firm,
or corporation, other than Seller and Purchaser and their respective shareholders, any rights or remedies under or by reason of this Agreement. 
 Section 11.09 Rules of Construction. 
 (a) In this Agreement, unless the context otherwise requires, words in
the singular number or in the plural number shall each include the singular number and the plural number and words of the masculine gender shall include the feminine and the neuter, and, when the sense so indicates, words of the neuter gender may
refer to any gender. 
 (b) The terms “Affiliate” or “Affiliates” as used in this Agreement shall mean
with respect to any person, any person which, directly or indirectly, controls, is controlled by, or is under a common control with, such person. The term “control” (including the terms “controlled by” and “under common
control with”) as used in this definition means the 

  

 33 

 
possession, directly or indirectly, of the power to direct or cause the direction of management and policies of a person, whether through the ownership of
voting securities, by contract, or otherwise. 
 (c) The term “person” shall mean an individual, a corporation, a
partnership, an association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof. 
 (d) The term “Knowledge” as to Seller shall mean the actual knowledge of the directors, officers and employees of Seller.

 Section 11.10 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument. 
  

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 IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective duly authorized officers as of the date and year first above written. 
  

			
	SELLER
	
	CHEYENNE SERVICES, LTD.
		
	By:	 	Cheyenne Houston Management LLC, its general partner
		
	By:	 	/s/ Carlos A. Torres
	Name:	 	Carlos A. Torres
	Title:	 	President
	
	PARTNER
		
	  	 	/s/ Carlos A. Torres
	Carlos A. Torres
	
	PURCHASER
	
	TESCO CORPORATION
		
	By:	 	/s/ Julio M. Quintana
	Name:	 	Julio M. Quintana
	Title:	 	President & Chief Executive Officer

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