ASSET PURCHASE AGREEMENT

EXHIBIT 10.1

ASSET PURCHASE AGREEMENT

BY AND AMONG

OIL & GAS RENTAL SERVICES, INC.,

AS SELLER,

AND

ALLIS-CHALMERS ENERGY INC.,

AS BUYER

October 25, 2006

TABLE OF CONTENTS

ASSET PURCHASE AGREEMENT

          THIS ASSET PURCHASE AGREEMENT (“ Agreement ”) is made and entered into effective as of the 25th day of October, 2006, by and between OIL & GAS RENTAL SERVICES, INC., a Louisiana corporation (“ Seller ”), and ALLIS-CHALMERS ENERGY INC., a Delaware corporation (“ Buyer ”).

W I T N E S S E T H :

          WHEREAS, Seller is engaged in the business of providing specialized rental tool equipment to oil and gas companies (collectively, the “ Business ”); and

          WHEREAS, subject to the terms and conditions herein contained, Seller desires to sell and transfer to Buyer, and Buyer desires to acquire from Seller, substantially all of the assets of Seller, other than the Excluded Assets (as defined in Section 1.2 below), which are used or usable in the conduct and operation of the Business, and Seller desires to transfer to Buyer, and Buyer desires to assume and timely discharge, the Assumed Liabilities (as defined herein);

          NOW, THEREFORE, for and in consideration of the premises and the mutual covenants and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE 1. PURCHASE AND SALE OF ASSETS .

     Section 1.1 Purchase and Sale . Subject to the terms and conditions contained herein, Seller agrees to sell, transfer, convey and assign to Buyer, and Buyer agrees to purchase and acquire from Seller, on the Closing Date (as defined in Section 1.9 below), all of the assets and properties of Seller used or usable in the conduct and operation of the Business as of the Closing Date, except for the Excluded Assets (as such term is defined below), including without limitation the following (collectively, the “ Transferred Assets ”):

     (a)  Equipment and Inventory . The equipment, tools, machinery, vehicles, trailers, implements, parts, supplies and other personal property (“ Equipment ”) and the raw materials, work-in-progress, finished goods, stores and supplies (“ Inventory ”), in each case, used or usable in the conduct and operation of the Business, including without limitation as described in Schedule 1.1(a) ;

     (b)  Permits . Except as expressly included in the Excluded Assets, all permits, authorizations, certificates, approvals, registrations, variances, exemptions, rights-of-way, licenses and other rights of every kind and character (“ Permits ”) (i) under any (A) federal, state, local or foreign statute, ordinance or regulation, (B) order, writ, injunction, decree, judgment, award or determination of any federal, state, municipal or other governmental or quasi-governmental authority of any nature (including any governmental division, subdivision, department, agency, bureau, branch, office, commission, council, board, instrumentality, officer, official, representative, organization, unit, body or Person and any court or other tribunal), domestic or foreign (all of the foregoing in these subparts (A) and (B), a “ Governmental Authority ”) or (C) contract with any Governmental Authority or (ii) granted by any Governmental Authority relating to all or any of the Transferred Assets, including without limitation those Permits listed in Schedule 1.1(b) ;

     (c)  Intangible Assets . All right, title and interest of Seller in, to and under all patents, proprietary technology, know-how, data, copyrights, licenses, trademarks, service marks, trade names, trade secrets, technical information, designs, processes, internet domain names, rights, privileges and other intangible property of any nature whatsoever (and any and all improvements thereof and registrations and applications therefor) used in the operation of the Transferred Assets and the right to recover for infringement thereon, and all goodwill associated with the Transferred Assets, including without limitation as described in Schedule 1.1(c) ;

     (d)  Books and Records . Copies of all of Seller’s books, records, papers and instruments that relate to the Transferred Assets, including without limitation copies of specifications, machinery diagrams,

accounting and financial records (including work papers) for the most recent five (5) year period, personnel and labor records, environmental records and reports, sales and property tax records and returns for the most recent five (5) year period, sales records for the most recent five (5) year period, customer data and lists and supplier data and lists;

     (e)  Prepaid Expenses . All prepaid rentals, other prepaid expenses, bonds, deposits and financial assurance requirements, excluding prepaid insurance premiums (collectively, “ Prepaids ”);

     (f)  Assigned Contracts . Seller’s rights and claims in, to and under the contracts, personal property leases, licenses and agreements which relate to the Business that are identified in Schedule 1.1(f) (collectively, the “ Assigned Contracts ”);

     (g)  Goodwill . The goodwill and going concern value of the Business;

     (h)  Claims, Insurance Proceeds, Etc . All claims, choses-in-action, rights in action, rights to tender claims or demands, rights to insurance proceeds and insurance claims of Seller relating to all or any part of the Transferred Assets and, to the extent transferable, the benefit of and the right to enforce the covenants and warranties, if any, that Seller is entitled to enforce with respect to the Transferred Assets in all instances for claims arising after the Closing Date;

     (i)  Telephone Numbers; URLs . All telephone and fax numbers and Internet URLs used by Seller in the Business;

     (j)  Hardware and Software . All right, title and interest of Seller in computer equipment, hardware, and software used in the Business, including without limitation all central processing units, terminals, disk drives, hard drives, drivers, routers, printers, keyboards, screens, peripherals (and other input/output devices), modems and other communication controllers, and any and all parts and appurtenances thereto, together with all intellectual property used by Seller in the operation of such computer equipment and hardware, including without limitation all owned and proprietary software, all of Seller’s rights under any licenses related to Seller’s use, at any time, of such computer equipment, hardware or software, and all leases pursuant to which Seller leases any computer equipment, hardware or software, insofar and only insofar as any of the foregoing relates to the Business;

     (k)  Real Property . Subject to Section 9.12, Seller’s real property and the structures, improvements, buildings and fixtures located thereon, and all of Seller’s interests in real property, including all leaseholds, easements, rights of way, licenses and other interests in real property, including without limitation as described on Schedule 1.1(k) (collectively, the “ Real Property ”);

     (l)  Receivables . Subject to Section 1.6, Seller’s Working Capital mentioned in Section 1.6 and without duplication, all notes and accounts receivable arising from the conduct of the Business in existence at the close of business on the Closing Date, including without limitation as described on Schedule 1.1(l) (collectively, the “ Receivables ”);

     (m)  Interests in Oil and Gas Properties and Investments . All of Seller’s direct and indirect interests or investments in oil and gas producing properties, whether in the form of working interests, contract rights, mineral rights, joint venture agreements, equity ownership in other entities (including without limitation partnership interests, stock ownership in other corporations and membership interests in limited liability companies), or otherwise, as more fully described on Schedule 1.1(m) ; and

     (n)  Other Property . All other or additional privileges, rights, interests, properties and assets of Seller of every kind and description and wherever located that are used or intended for use in connection with, or that are necessary to the continued conduct of, the Business as presently being conducted.

     Section 1.2 Excluded Assets . The Transferred Assets shall not include, and Seller shall retain all right, title and interest in and to, (a) any of the rights of Seller under this Agreement or the other Transaction

Documents (as defined below), (b) the original corporate minute books, stock records and accounting records and work papers of Seller, (c) originals of all of Seller’s books, records, papers and instruments that do not relate to the Transferred Assets, (d) the originals of all books and records provided to Buyer pursuant to Section 1.1(d), (e) subject to Section 1.6, all cash, cash equivalents, short term investments and marketable securities of Seller, (f) all Real Property that may be excluded from the Transferred Assets in accordance with Section 9.12, (g) all Working Capital (as defined below) in excess of $11,300,000, (h) all Receivables that do not constitute Working Capital (as defined below) and (i) all claims, choses-in-action, rights in action, rights to tender claims or demands, rights to insurance proceeds and insurance claims of Seller relating to all or any part of the Transferred Assets and the benefit of and the right to enforce the covenants and warranties, if any, that Seller is entitled to enforce with respect to the Transferred Assets in all instances for claims arising prior to the Closing Date (collectively, the “ Excluded Assets ”).

     Section 1.3 Purchase Price . The purchase price payable by Buyer to Seller for the Transferred Assets shall consist of:

     (a) $291,000,000 in cash payable at the Closing in immediately available funds to such account or accounts previously designated by Seller (the “ Closing Cash Consideration ”); provided , however , that the Closing Cash Consideration shall be subject to adjustment as provided in Section 1.4; and

     (b) 3,200,000 shares of common stock, par value $0.01 per share, of Buyer (“ Common Stock ”) (such shares of Common Stock being referred to herein as the “ Stock Consideration ” and, together with the Closing Cash Consideration, the “ Purchase Price ”).

     Section 1.4 Deposit .

     (a) Upon the execution and delivery of this Agreement by each of the parties hereto, Buyer shall pay to Seller $9,000,000 in cash, to be deposited by Seller into an interest bearing bank account (the “ Transaction Account ”) maintained by Seller with a commercial bank in the United States of America selected by Seller. Such amount, together with any earnings thereon while in such account shall be maintained in cash or cash equivalents and shall be referred to herein as the “ Deposit .” The Deposit shall be maintained in the Transaction Account at all times prior to disbursement from such account to Buyer or retention of the Deposit by Seller in accordance with the provisions of this Agreement.

     (b) If the Closing occurs on or prior to December 31, 2006, then the Deposit shall be retained by Seller free of any restriction, and the Closing Cash Consideration shall be reduced by the amount of the Deposit.

     (c) If the Closing does not occur on or prior to December 31, 2006, and as of such date, all of the Deposit Forfeiture Conditions (as defined below) shall have been satisfied, then the Deposit shall be retained by Seller, as liquidated damages, and in such event, Seller, without any further act or consent by Buyer, shall be free to disburse the Deposit from the Transaction Account to one of Seller’s other accounts, this Agreement shall terminate (except that Section 1.4 and Section 9.7 and ARTICLE 11 shall survive such termination), and neither party shall have any further liability to the other party in connection with this Agreement or the transactions contemplated by this Agreement. The parties hereto acknowledge that the potential damages that would be incurred by Seller upon a failure by Buyer to consummate Buyer’s acquisition of the Transferred Assets by such date as contemplated by this Agreement, despite the satisfaction of the Deposit Forfeiture Conditions, are impossible to calculate, predict or estimate with any meaningful degree of accuracy, and further acknowledge and agree that such payment of the Deposit to Seller as liquidated damages is not intended, and shall not be construed, as a penalty and that such liquidated damages have been freely negotiated. As used herein, “ Deposit Forfeiture Conditions ” means, collectively, the following:

     (i) Seller shall have produced Adjusted EBITDA for the fiscal year ended October 31, 2006 of not less than $46,000,000. For purposes of this Agreement, “ Adjusted EBITDA ” shall be calculated as required pursuant to Section 5.13.

     (ii) Buyer shall have determined to its reasonable satisfaction based on information from the original manufacturers or a process mutually acceptable to Seller and Buyer that the sum of (i) the replacement cost (brand new) for those Transferred Assets constituting Seller’s rental equipment inventory and repair parts and supplies inventory and (ii) the fair market value based on current appraisals of the other Transferred Assets, is at least $200,000,000.

     (iii) The Federal Trade Commission and the Department of Justice shall have approved the transaction under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “ HSR Act ”), or any applicable waiting periods thereunder shall have expired or been terminated, in any case, without any requirement for any party to effect any divestiture.

     (iv) After the date of this Agreement, there shall not have occurred a Fundamental Adverse Change. For the purposes of this Agreement, “ Fundamental Adverse Change ” means the occurrence of (i) the cancellation of customer orders which orders are for amounts that in the aggregate would exceed 20% of Seller’s total revenue for the fiscal year ended October 31, 2006 or (ii) loss or damage (without the reasonable possibility of replacement or repair to brand new standards within 45 days of the occurrence of the loss or damage) of one or more items of Equipment that in the aggregate constitute at least 20% of the replacement cost (brand new) of all the Equipment.

     (v) The shareholders of Seller shall have approved the execution and delivery of this Agreement and all other Transaction Documents to which Seller is a party and the consummation of the transactions contemplated hereby and thereby.

     (vi) Seller shall not have terminated this Agreement pursuant to Section 10.1(a)(v).

     (vii) Buyer shall have received the title insurance commitments and other items mentioned in Section 5.7 hereof, in each case, relating to any of the Real Property constituting part of the Transferred Assets.

     (viii) The representations and warranties of Seller contained in Section 2.1, Section 2.2, Section 2.3, Section 2.5, Section 2.8(a) and Section 2.10 of this Agreement shall be true and correct in all material respects as though made on December 31, 2006.

     (ix) There shall have been no fraud committed by or on behalf of Seller in connection with the transactions contemplated by this Agreement.

     (d) If the Closing does not occur on or prior to December 31, 2006, and as of such date, any of the Deposit Forfeiture Conditions has not been fulfilled and satisfied, then Seller shall immediately return the Deposit to Buyer, this Agreement shall terminate (except that Section 1.4 and Section 9.7 and ARTICLE 11 shall survive), neither party shall have any further liability to the other party in connection with this Agreement and the transactions contemplated by this Agreement; provided , however , that if either of the Deposit Forfeiture Conditions set forth in Section 1.4(c)(ii), Section 1.4(c)(iii) or Section 1.4(c)(vii) has not been fulfilled or satisfied primarily as a result of action or inaction of Buyer, then the Deposit shall be retained by Seller in the Transaction Account until January 31, 2007 on which date (x) the Deposit shall be retained by Seller if all Deposit Forfeiture Conditions have been fulfilled or satisfied and the Closing has not occurred by January 31, 2007, (y) the Deposit shall be retained by Seller at the Closing and credited against the Closing Cash Consideration if all Deposit Forfeiture Conditions have been fulfilled or satisfied and the Closing occurs on or prior to January 31, 2007 or (z) the Deposit shall be retained by Seller if the Deposit Forfeiture Conditions have not been fulfilled or satisfied. Upon the occurrence of the events specified in clauses (x) or (z) of the immediately preceding sentence, this Agreement shall terminate (except that Section

1.4 and Section 9.7 and ARTICLE 11 shall survive) and neither party shall have any further liability to the other party in connection with this Agreement and the transactions contemplated by this Agreement. Furthermore, if the Closing does not occur on or prior to December 31, 2006, and as of such date, the Deposit Forfeiture Condition set forth in Section 1.4(c)(vi) has not been fulfilled and satisfied, then in addition to the return of the Deposit to Buyer in accordance with the first sentence of this Section 1.4(d), Seller shall immediately pay to Buyer an additional $1,000,000 in cash.

     Section 1.5 Allocation of Purchase Price and Working Capital Adjustment . As soon as practicable after the Adjustment Date (as defined in Section 1.6 below), the parties shall mutually agree to the allocation of the Purchase Price and the Working Capital Adjustment, if any, among the Transferred Assets on an asset-per-asset basis, in accordance with the rules of Section 1060 of the Internal Revenue Code of 1986, as amended (the “ Code ”), and the Treasury Regulations promulgated thereunder, and shall jointly prepare an IRS Form 8883 evidencing such allocation of the Purchase Price and the Working Capital Adjustment, if any. The parties shall use the amounts allocated pursuant to the preceding sentence for purposes of filing all tax returns, and shall not take any position inconsistent therewith on any tax return or for any other Tax (as defined in Section 2.11 below) purpose.

     Section 1.6 Working Capital Adjustment . In accordance with the provisions of this Section 1.6, and at the time therein set forth, Buyer shall pay to Seller or, as the case may be, Seller shall pay to Buyer, in immediately available funds, the amount of the Working Capital Adjustment (as defined below).

     (a) For the purposes of this Agreement, the term “ Working Capital ” shall mean, as of a particular date, the working capital of the Business, which working capital shall be computed in accordance with the methods, formulae, prorations and reserves set forth in Annex A attached hereto, and shall equal: (i) the aggregate amount of the current assets relating to the Business, which is comprised of (A) the Receivables (other than any Receivables that are more than 120 days old, unless and to the extent otherwise agreed by the parties hereto), net of reserves, (B) the amount of the Prepaids and (C) cash, cash equivalents, short-term investments and marketable securities; minus (ii) the aggregate amount of the current portion of the Assumed Liabilities. The amounts of all items to be used in the calculation of Working Capital will be based upon United States generally accepted accounting principles (“ GAAP ”), consistently applied. Notwithstanding anything to the contrary in this Agreement, the Deposit shall not constitute an asset or a liability for purposes of the calculation of Working Capital.

     (b) The Working Capital on the Closing Date shall be $11,300,000 (the “ Target Working Capital ”) and shall be included in the Transferred Assets.

     (c) Within forty-five (45) days after the Closing Date, Buyer shall deliver to Seller a statement of the Working Capital of the Business as of the Effective Time on the Closing Date (the “ Statement of the Closing Date Working Capital ” or “ Statement ”), which Statement shall (i) have been prepared by Buyer, after consultation with Seller, and reviewed by Buyer’s auditors, UHY LLP (or such other firm of independent certified public accountants appointed by Buyer for this purpose), in accordance with GAAP consistently applied, the provisions of Annex A and the provisions hereof, and (ii) set forth the Working Capital of the Business as of the Effective Time on the Closing Date (the “ Closing Date Working Capital ”). Following delivery by Buyer to Seller of the Statement of the Closing Date Working Capital, Buyer and its auditors shall permit Seller and its auditors at the earliest practicable date access to and copies of the work papers and calculations related thereto, and consult with Seller and its auditors as to any questions they may have.

     (d) Any dispute which may arise between Buyer and Seller as to the Closing Date Working Capital shall be resolved in the following manner:

     (i) If Seller disputes the calculation of the Closing Date Working Capital, or any portion thereof, Seller shall notify Buyer in writing within fifteen (15) days after its receipt of the Statement, and shall specify therein in reasonable detail the basis and reason for such dispute and the amount which is in dispute;

     (ii) During the fifteen (15) day period following the date of such notice from Seller, Buyer and Seller shall attempt to resolve such dispute; and

     (iii) If at the end of the fifteen (15) day period specified in clause (ii) above, the parties shall have failed to reach agreement with respect to such dispute, the matter shall be referred to the Houston, Texas office of such firm of independent certified public accountants as the parties mutually agree, who shall act as an arbitrator. The arbitrator shall be instructed to use every reasonable effort to perform such services within thirty (30) days of the submission to it of the Statement of the Closing Date Working Capital and the related dispute and, in any case, as soon as practicable after such submission. Each of the parties shall bear all costs and expenses incurred by it in connection with such arbitration, and the fees of the arbitrator shall be paid entirely by the party whose assertions regarding the Closing Date Working Capital differ by the greatest amount from the final Closing Date Working Capital determined by the arbitrator. This provision for arbitration shall be specifically enforceable by the parties and the decision of the arbitrator in accordance with the provisions hereof shall be final and binding and there shall be no right of appeal therefrom.

     (e) The latest to occur of (i) the date on which Seller accepts, or forfeits its right to contest, the Closing Date Working Capital disclosed in the Statement or (ii) the date on which the Closing Date Working Capital is determined in accordance with the provisions of Section 1.6(d) is referred to herein as the “ Adjustment Date ”.

     (f) Within ten (10) days after the Adjustment Date:

     (i) Buyer shall pay to Seller, in immediately available funds, an amount equal to the difference (if any, and if a positive result) between (A) the Closing Date Working Capital, minus (B) the Target Working Capital; or, alternatively

     (ii) Seller shall pay to Buyer, in immediately available funds, an amount equal to the difference (if any, and if a positive result) between (A) the Target Working Capital minus (B) the Closing Date Working Capital.

The amount, if any, payable as a result of the calculation in clauses (i) or (ii) above is referred to herein as the “ Working Capital Adjustment .”

     Section 1.7 Assumed Liabilities . At the Closing, Seller shall transfer to Buyer, and Buyer shall assume, the Assumed Liabilities. For purposes of this Agreement, “ Assumed Liabilities ” shall mean only the following liabilities of Seller: (a) the accounts payable and accrued expenses arising from the conduct of the Business (“ Payables ”) in existence at the close of business on the Closing Date, (b) all obligations and liabilities with respect to the Transferred Employees attributable to the conduct of the Business from and after the Closing Date and (c) all obligations and liabilities of Seller with respect to the Transferred Assets, but only to the extent that such obligations (i) arise after the Closing Date, (ii) do not arise from or relate to any breach by Seller of any provision of such Assigned Contracts and (iii) do not arise from or relate to any event, circumstance or condition occurring or existing on or prior to the Closing Date, that, with notice or lapse of time or both, would constitute or result in a breach of such Assigned Contracts. OTHER THAN AS SET FORTH IN THE IMMEDIATELY PRECEDING SENTENCE, BUYER SHALL NOT ASSUME ANY OBLIGATION OR LIABILITY OF SELLER OR THE BUSINESS OF ANY KIND, AND SELLER SHALL PAY, SATISFY AND PERFORM ALL OF ITS REMAINING OBLIGATIONS, WHETHER FIXED, CONTINGENT, KNOWN OR UNKNOWN AND WHETHER EXISTING AS OF THE CLOSING OR ARISING PRIOR TO THE CLOSING, WHICH MAY AFFECT IN ANY WAY THE TRANSFERRED ASSETS.

     Section 1.8 Sales and Transfer Taxes . Except for vehicle transfer taxes, if any (which shall be the sole responsibility of Buyer), Seller shall be responsible for the payment of all stamp, documentary, registration, sales, use, excise, transfer, value added and similar Taxes (including any penalties and interest)

imposed by any Governmental Authority in any jurisdiction in connection with the sale of the Transferred Assets contemplated herein (collectively, the “ Transfer Taxes ”). Seller shall provide Buyer with an exemption certificate and any additional documents reasonably requested by Buyer to ensure that the transactions contemplated by this Agreement shall not be subject to any Transfer Taxes. The parties contemplate that the transfer of the Transferred Assets pursuant to this Agreement qualifies as an occasional sale and is generally exempt from sales tax under Texas Tax Code Sections 151.304(a) and 151.304(b)(2) and 34 Texas Administrative Code Section 3.316(d) and Louisiana Revised Statutes Section 47:301(1)(c).

     Section 1.9 Closing . The consummation of the transactions contemplated in this Agreement (the “ Closing ”) shall take place at the offices of Andrews Kurth LLP, legal counsel to Buyer, located at 600 Travis, Suite 4200, Houston, Texas 77002, on the earliest practicable date after all conditions to the Closing (as set forth in ARTICLE 5 and ARTICLE 6 hereof) shall have been satisfied or waived (the “ Closing Date ”), and shall be effective as of 12:01 a.m. Central Time on the Closing Date (the “ Effective Time ”). Subject to the immediately preceding sentence, the parties hereto will use their commercially reasonable efforts to consummate such transactions by the later of (a) November 30, 2006 and (b) seven (7) days after the date of receipt by Buyer of Seller’s audited balance sheet as of, and audited statements of income, shareholders’ equity and cash flows for, the fiscal year ended, October 31, 2006 (collectively, the “ Fiscal 2006 Financial Statements ”); provided , however , that (subject to Section 1.4(d))the Closing Date shall occur, if at all, on or prior to December 31, 2006.

     Section 1.10 Transactions and Documents at Closing .

     (a)  Seller’s Deliveries . At the Effective Time, Seller shall convey to Buyer the Transferred Assets, free and clear of any lien, pledge, hypothecation, mortgage, security interest, trust, preference, option, claim, charge, encumbrance or restriction of any nature (collectively, “ Liens ”), and in furtherance thereof Seller shall deliver, or cause to be delivered, to Buyer the following documents on the Closing Date:

     (i) a Bill of Sale and Assumption Agreement in substantially the form attached hereto as Exhibit A (the “ Bill of Sale and Assumption Agreement ”), duly executed by Seller assigning the Transferred Assets to Buyer;

     (ii) a Special Warranty Deed for Texas and an Act of Sale With Limited Warranty for Louisiana with respect to the Real Property, in each case, in such customary form as shall be agreed by the parties hereto (each a “ Real Estate Transfer Document ” and collectively, the “ Real Estate Transfer Documents ”), duly executed by Seller;

     (iii) any such other bills of sale, assignments, certificates of title, documents and other instruments of transfer and conveyance as Buyer shall reasonably request;

     (iv) estoppel certificates (collectively, the “ Estoppel Certificates ”), in such customary form as shall be agreed by the parties hereto, executed by all parties other than Seller to the material Assigned Contracts and any leases, in each case as reasonably required by Buyer;

     (v) any required real property affidavit or statement with respect to the Real Property located in the State of Louisiana;

     (vi) a zoning certificate issued by the government authority that has zoning jurisdiction over the Real Property or a zoning opinion letter of counsel, in either case, in a form reasonably acceptable to Buyer;

     (vii) Non-Compete Agreements in substantially the form attached hereto as Exhibit B (each a “ Non-Compete Agreement ” and collectively, the “ Non-Compete Agreements ”), duly executed by each of the persons named on Annex B ;

     (viii) Employment Agreements in substantially the forms attached hereto as Exhibits C-1 , C-2 , C-3 and C-4 (each an “ Employment Agreement ” and collectively, the “ Employment Agreements ”), duly executed by each of the persons named on Annex B ;

     (ix) an Investor Rights Agreement in substantially the form attached hereto as Exhibit D (the “ Investor Rights Agreement ”), duly executed by Seller;

     (x) a Non-Foreign Seller Affidavit (as defined in Section 2.11(c) below), duly executed on behalf of Seller; and

     (xi) a certificate or certificates executed on behalf of Seller, certifying (A) that the representations and warranties of Seller contained in this Agreement are true and correct in all material respects, in each case on the date of this Agreement and on the Closing Date as though made on the Closing Date, except to the extent such representations and warranties speak only as of an earlier date, (B) that Seller has performed and complied with all agreements, covenants and conditions contained in this Agreement to be performed or complied with by Seller upon or prior to Closing, (C) as to the absence of any Material Adverse Effect on the Business prior to the Closing and (D) incumbency.

     (b)  Buyer’s Deliveries . At the Effective Time, Buyer shall receive from Seller the Transferred Assets, free and clear of any and all Liens, and Buyer shall assume and agree to timely discharge the Assumed Liabilities, and in furtherance thereof Buyer shall deliver, or cause to be delivered, to Seller the following on the Closing Date:

     (i) the Bill of Sale and Assumption Agreement, duly executed by Buyer;

     (ii) each of the Real Estate Transfer Documents, duly executed by Buyer, as applicable;

     (iii) each of the Non-Compete Agreements, duly executed by Buyer or Allis-Chalmers Rental Tools, Inc., a Texas corporation (“ Rental Tools ”), as applicable;

     (iv) each of the Employment Agreements, duly executed by Buyer or Rental Tools, as applicable;

     (v) the Investor Rights Agreement, duly executed by Buyer;

     (vi) the Closing Cash Consideration;

     (vii) stock certificates representing the Stock Consideration, duly executed by Buyer; and

     (viii) a certificate or certificates executed on behalf of Buyer, certifying (A) that the representations and warranties of Buyer contained in this Agreement are true and correct in all material respects, in each case on the date of this Agreement and on the Closing Date as though made on the Closing Date, except to the extent such representations and warranties speak only as of an earlier date, (B) that Buyer has performed and complied with all agreements, covenants and conditions contained in this Agreement to be performed or complied with by Buyer upon or prior to Closing, (C) as to the absence of any Material Adverse Effect on Buyer prior to the Closing and (D) incumbency.

     (c) All deliveries, payments and other transactions and documents relating to the Closing shall be interdependent and none shall be effective unless and until all are effective (except to the extent that the party entitled to the benefit thereof has waived satisfaction or performance thereof as a condition precedent to Closing).

     (d) Each party shall, at the request of any other party from time to time and at any time, whether on or after the Closing Date, and without further consideration, execute and deliver such assignments, transfers, assumptions, conveyances, powers of attorney, receipts, acknowledgments, acceptances and assurances as may be reasonably necessary to procure for the party so requesting, and its successors and assigns, or for aiding and assisting in collecting and reducing to possession, any and all of the Transferred Assets, or otherwise to satisfy and perform the obligations of the parties hereunder.

     (e) For the purposes of this Agreement, the term “ Transaction Documents ” means, collectively, this Agreement and each of the other instruments, agreements and documents contemplated thereby or deliverable in connection with the consummation of the transactions contemplated thereby, including without limitation the Bill of Sale and Assumption Agreement, the Real Estate Transfer Documents, the Estoppel Certificates, the Non-Compete Agreements, the Employment Agreements and the Investor Rights Agreement.

ARTICLE 2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER .

     To induce Buyer to enter into this Agreement and to purchase the Transferred Assets from Seller, Seller hereby represents, warrants and covenants to Buyer as follows:

     Section 2.1 Organization and Good Standing of Seller . Seller is a corporation duly organized, validly existing and in good standing under the Laws (as defined in Section 2.3 below) of the State of Louisiana and is qualified to transact business and is in good standing as a foreign entity in the jurisdictions where it is required to qualify in order to conduct its businesses as presently conducted and in which the failure to so qualify would have a Material Adverse Effect on Seller. Seller has the corporate power and authority to own, lease or operate all properties and assets now owned, leased or operated by it and to carry on its businesses as now conducted. For the purposes of this Agreement, “ Material Adverse Effect ” means any adverse change, circumstance or effect that, individually or in the aggregate with all other changes, circumstances or effects, is or would reasonably likely be materially adverse to the business, operations, assets, liabilities (including, without limitation, contingent liabilities) or condition (financial or otherwise), or results of operations of a person and it subsidiaries, taken as a whole; provided that, Material Adverse Effect shall not include any event, change in or effect upon financial condition, operating results or business of such person and its subsidiaries, directly or indirectly arising out of, attributable to or as a consequence of: (1) changes in law or any Governmental Authority’s policies or regulations or conditions, events or circumstances, in all such cases, generally affecting the oil and gas industry, relevant securities markets or the overall economy of the United States of America, (2) disruption resulting from transactions contemplated by this Agreement, including the public announcement thereof or (3) Reportable Conditions and recognized environmental conditions identified during a Phase I or Phase II assessment and any subsequent actions taken in response thereto.

     Section 2.2 Enforceability . Seller has full corporate power and authority to make, execute and perform this Agreement and the other Transaction Documents to which it is a party, and to carry out the transactions contemplated hereby and thereby in accordance with their respective terms. There are no outstanding contracts, demands, commitments or other agreements or arrangements under which Seller is or may become obligated to sell, transfer or assign any of the Transferred Assets. This Agreement and the other Transaction Documents to which Seller is a party constitute the valid and legally binding obligations of Seller enforceable against it in accordance with their respective terms, subject to general equity principles and except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting the rights of creditors generally.

     Section 2.3 Due Authorization; Valid Execution; No Inconsistent Obligations . This Agreement and the other Transaction Documents to which Seller is a party and all transactions required hereunder or thereunder to be performed by Seller have been duly and validly authorized and approved by all necessary corporate action on the part of Seller (including without limitation all requisite approvals of Seller’s Board of Directors), other than the requisite approval of Seller’s shareholders (which will be obtained on or prior to the Closing Date). This Agreement has been, and the other Transaction Documents to which Seller is a party will

be (on or prior to the Closing Date), duly and validly executed and delivered on behalf of Seller. Except as set forth in Schedule 2.3 , neither the execution and delivery of this Agreement or the other Transaction Documents to which Seller is a party nor the consummation of the transactions contemplated herein or therein will result in a violation or breach of, or constitute a default under any term or provision of (a) the Certificate of Incorporation, Bylaws or other organizational documents of Seller or (b) (i) any indenture, note, mortgage, bond, security agreement, loan agreement, guaranty, pledge, or other instrument, contract, agreement or commitment, (ii) any law, statute, rule, regulation, Permit, ordinance, order, judgment, award, writ, injunction, consent judgment, consent order or decree or other pronouncement having the effect of law of any Governmental Authority (“ Law ”), (iii) any applicable ruling or order of any Governmental Authority, or (iv) any other commitment or restriction, in each case, to which Seller is a party or by which any of the Transferred Assets is subject or bound, nor will such actions result in the creation of any Lien on any of the Transferred Assets.

     Section 2.4 Consents . Except as set forth in Schedule 2.4 , the execution and delivery of the Transaction Documents by Seller and the consummation of the transactions contemplated by the Transaction Documents do not require the consent, approval or action of, or any filing with or notice to, (a) any Governmental Authority, or (b) any individual, partnership, corporation, limited liability company, incorporated or unincorporated association, joint stock company, trust, joint venture, unincorporated organization, or Governmental Authority (collectively, “ Person ”) pursuant to or under any indenture, note, mortgage, bond, security agreement, loan agreement, guaranty, pledge or other instrument, lease, contract, agreement or commitment to which Seller is a party or by which any of the Transferred Assets are subject or bound.

     Section 2.5 Title to Assets; Sufficiency . Seller has, and upon consummation of the transactions contemplated by this Agreement at the Closing, Buyer will have, good and marketable title to all of the Transferred Assets, real and personal, moveable and immovable, tangible and intangible, free and clear of any and all Liens of any kind or character, except (a) liens for current taxes not yet due and liens arising by operation of law with respect to obligations that are not delinquent or are being contested in good faith and described in Schedule 2.5 , (b) with respect to Real Property, (i) minor imperfections of title, if any, none of which is substantial in amount, detracts from the value or impairs the use of the property subject thereto, or impairs the operations of Seller and (ii) zoning laws and other land use restrictions that do not impair the present or Seller’s present use of the property subject thereto, and (c) other restrictions set forth in Schedule 2.5 . Seller has the full right to sell, convey, transfer, assign and deliver the Transferred Assets to Buyer.

     Section 2.6 Employees . Schedule 2.6 (i) sets forth the names, titles, rates of pay and tenure of each employee who provides services to the Business and (ii) describes each written or oral employment agreement, if any, to which each such employee is a party in connection with the services that it provides to the Business. To Seller’s Knowledge, Seller has and currently is conducting the Business in full compliance with all Laws relating to employment, employee practices, terms and conditions of employment, wages and hours and nondiscrimination in employment. Except as set forth in Schedule 2.6 , no employee of the Business is absent from work on any form of leave, including without limitation medical leave, disability, leave under the Family and Medical Leave Act of 1993 or otherwise or has notified Seller of his or her intent to take such leave.

     Section 2.7 Franchises, Licenses, Personal Property, Assigned Contracts . Except for the Excluded Assets, the Transferred Assets include all Permits required to own, lease or otherwise hold and operate the Transferred Assets and conduct the Business as presently conducted by Seller (except for those Permits set forth on Schedule 2.7 , which cannot be transferred or assigned by Seller to Buyer in accordance with applicable Law). Subject to Section 2.5 hereof, all of the equipment and other tangible personal property which are a part of the Transferred Assets will be transferred to Buyer pursuant to this Agreement on an “as is, where is” basis. All of the Assigned Contracts are valid and in full force and effect in accordance with their terms.

     Section 2.8 Real Property .

     (a) Seller owns or has the right to exclusively occupy and use all the Real Property, including the Real Property which is owned in fee by Seller and constitutes part of the Transferred Assets (the “ Owned Real Property ”) and the Real Property leased to Seller pursuant to any Assigned Contracts (the “ Leased Real Property ”). Seller has good and marketable fee simple title to all the Owned Real Property, and to all buildings, structures and other improvements thereon and all fixtures thereto.

     (b) All agreements included within the Assigned Contracts which relate to or provide leases, easements, rights of way, licenses and other non-fee ownership interests in Real Property (collectively the “ Realty Use Rights ”) are valid and in full force and effect in accordance with their terms. On or before the Disclosure Delivery Deadline (as defined in Section 5.14), Seller shall have furnished Buyer with copies of all Realty Use Rights, all of which are identified on Schedule 2.8(b) . Seller is lawfully in exclusive possession of all Leased Real Property, and all conditions precedent to the obligation of Seller to take possession and continue to occupy all Leased Real Property have been fulfilled. All of the Owned Real Property is free from any material use or occupancy restrictions, except those imposed by applicable zoning laws, ordinances and regulations, and from all special taxes or assessments, except those generally applicable to other properties in the tax districts in which such Owned Real Property is located. No options have been granted to others to purchase, lease or otherwise acquire any interest in the Owned Real Property. On or before to the Disclosure Delivery Deadline, Seller shall have delivered to Buyer true and correct copies of all deeds, mortgages, title insurance policies, land surveys and other documents relating to or affecting the title to the Owned Real Property (collectively, the “ Owned Real Property Title Documents ”), and all of the same are identified on Schedule 2.8(b) . No condemnation proceeding is pending or, to Seller’s Knowledge, threatened which would impair the occupancy, use or value of any Real Property.

     Section 2.9 Litigation . There are no actions, suits, claims, demands or proceedings pending, or to the Knowledge of Seller, threatened against, by or affecting Seller, the Business or the Transferred Assets in any court or before any arbitrator, private alternative dispute resolution system or Governmental Authority, the eventual outcome of which could have a Material Adverse Effect on the Transferred Assets, or which could prevent or impede the transactions contemplated by this Agreement. Seller has not been charged with, nor to the Knowledge of Seller, is it under investigation with respect to any charge concerning, any violation of any provision of any federal, state or other applicable Law, decree or governmental restriction with respect to the Business and/or the Transferred Assets. There are no unsatisfied judgments against Seller or any consent decrees, writs, restraining orders, or preliminary or permanent injunctions to which Seller, the Business or any of the Transferred Assets are subject.

     Section 2.10 Financial Statements . Annex C includes the following financial statements of Seller (collectively, the “ Initial Financial Statements ” and collectively with the Fiscal 2006 Financial Statements, the “ Financial Statements ”) (a) audited balance sheets as of October 31, 2005 and 2004, (b) audited statements of income for the years ended October 31, 2005 and 2004, (c) audited statements of shareholders’ equity for the years ended October 31, 2005 and 2004 and (d) audited statements of cash flows for the years ended October 31, 2005 and 2004. The Initial Financial Statements have been (and the Fiscal 2006 Financial Statements will be) prepared in accordance with GAAP. The Initial Financial Statements present (and the Fiscal 2006 Financial Statements will present) fairly in all material respects the financial position of Seller and the Business as of the respective dates indicated therein and the results of operations and changes in shareholders’ equity and cash flow for the respective periods indicated therein. Except as set forth in Annex C , Seller will not have as of the date of the Fiscal 2006 Financial Statements, and Seller will not have incurred since that date, any Liabilities relating to the Transferred Assets or the Business, except Liabilities: (i) that, if required by GAAP to be accrued or reserved against, are accrued or adequately reserved against in the Fiscal 2006 Financial Statements; or (ii) that were incurred after the date of the Fiscal 2006 Financial Statements in the ordinary course of business of Seller and which could not reasonably be expected to have a Material Adverse Effect with respect to the Transferred Assets or the Business. For purposes hereof, “ Liabilities ” shall mean, with respect to the Transferred Assets or the Business, any debt, obligation or other liability related to the Transferred Assets or the Business, whether absolute, accrued, contingent, fixed or otherwise, or whether

due or to become due, including without limitation liabilities for Taxes, material forward or long-term commitments, or unrealized or anticipated losses from any of the Assigned Contracts.

     Section 2.11 Taxes .

     (a) All taxes, charges, fees, levies, imposts, duties, licenses or other assessments (including without limitation all income, property, sales, use, customs, franchise, value added, ad valorem, withholding, employees’ income withholding, and social security taxes, and all other taxes imposed on Seller or its income, properties, sales, franchises, operations or Plans or trusts), and all deposits in connection therewith required by applicable Law, imposed by any Governmental Authority or taxing authority, and all interest and penalties thereon (all of the foregoing hereafter collectively referred to as “ Taxes ”), with respect to the Transferred Assets and/or the Business, which are due and payable by the Business or Seller for all periods through the date hereof, whether or not shown on any return or report, have been duly and timely paid in full, and adequate reserves for all other Taxes, whether or not due and payable, and whether or not disputed, have been set up on the books of Seller and will be used for payment of such Taxes.

     (b) Seller has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor or other third party.

     (c) Seller has duly and timely filed all Tax reports and returns which are required to be filed with respect to the Transferred Assets and/or the Business. All such Tax reports and returns are correct and complete in all material respects. There are no Tax liens filed against Seller or encumbering any of the Transferred Assets or the Business. There are no audits, claims, assessments, levies, administrative proceedings or lawsuits pending, or to the Knowledge of Seller, threatened, by any taxing authority with respect to the payment of Taxes relating to the Transferred Assets or the Business. Seller is not a foreign person under Section 1445(a) of the Code and will furnish Buyer with a certificate as described in Treas. Reg. 1.1445-2(b)(2) (“ Non-Foreign Seller Affidavit ”) prior to Closing. Each year Seller negotiates with the applicable Governmental Authority the valuations and renditions of the Transferred Assets for ad valorem and real property Taxes, and Seller does not warrant and represent to Buyer that the valuations and renditions of the Transferred Assets for ad valorem or real property tax purposes prior to the Closing Date will remain in effect from and after the Closing Date.

     (d) Notwithstanding any provision of this Agreement to the contrary, the parties agree that any ad valorem, property and similar Taxes relating to the Transferred Assets and/or the Business for the year 2006 shall be pro-rated as of the Effective Time based on the portion of the year each party owns the Transferred Assets and/or the Business, and paid by Buyer when they become due after the date hereof. In the event the amount of any such Taxes cannot be ascertained as of the Effective Time, proration shall be made on the basis of the preceding year, Seller shall receive a credit against any such accrued tax liability in the Closing Date Working Capital for Seller’s pro rata portion of such Taxes, and to the extent that such proration may be inaccurate, Seller and Buyer agree to make such payment promptly to the other party after the Tax statements have been received as is necessary to allocate such Taxes properly between Seller and Buyer as of the Effective Time for the portion of the tax year that Seller and Buyer owned the assets subject to such Taxes.

     Section 2.12 Employee Benefit Matters .

     (a) On or before the Disclosure Delivery Deadline, Seller shall have provided Buyer a copy of all plans, programs, and similar agreements, commitments or arrangements maintained by or on behalf of Seller or any other party that provide benefits or compensation to, or for the benefit of, current or former Business employees of Seller (“ Plan ” or “ Plans ”).

     (b) With respect to each such Plan: (i) no litigation or administrative or other proceeding is pending or, to the Knowledge of Seller threatened, involving such Plan, except any Plan administrative proceeding involving a routine claim for benefits; (ii) such Plan has been administered and operated in compliance with, and has been amended to comply with all applicable Laws, including without limitation the

Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”), the Code, and the regulations issued under ERISA and the Code; and (iii) Seller has made and as of the Closing Date will have made or accrued, all payments and contributions required to be made under the provisions of such Plan or required to be made under applicable Laws with respect to any period prior to the Closing Date, such amounts to be determined using the ongoing actuarial and funding assumptions of the Plan.

     (c) There are no actions, suits or claims pending or, to the Knowledge of Seller, threatened (other than routine claims for benefits) with respect to any Plan.

     Section 2.13 Compliance with Laws . Seller: (a) has not committed a violation of any requirement of any Law and is in compliance with all Laws; (b) has not received written notice of the violation of any material requirement of any Law; and (c) is not subject to any Liability for past or continuing violation of any Law. No investigation or review by any Governmental Authority with respect to Seller, the Business or the Transferred Assets is pending or, to the Knowledge of Seller, threatened, and Seller has not received notice from any Governmental Authority of an intention to conduct the same.

     Section 2.14 Environmental Matters .

     (a) Except as set forth in Schedule 2.14 , Seller holds and is in compliance in all material respects with all required environmental Permits, and is in compliance in all material respects with all Environmental Laws in connection with the Business or the Transferred Assets. All such environmental Permits are listed on Schedule 2.14 and, except as set forth in Schedule 2.14 , none would terminate as a consequence of the transactions contemplated by this Agreement. Seller has made, or will make, timely application for renewal of all environmental Permits that were scheduled to expire prior to the Closing, such that all environmental Permits will remain in full force and effect after the Closing. For purposes of this Agreement, “ Environmental Laws ” means collectively, all federal, state, local and municipal environmental laws, rules, regulations, ordinances and codes applicable to Seller’s operations, including but not limited to the following laws and regulations: (1) Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. §9601, et seq., as amended by the Superfund Amendments and Reauthorization Act of 1985, Pub. L 99-499, 100 Stat. 1613, as amended; (2) The Resource Conservation and Recovery Act of 1976, 42 U.S.C. §6901, et seq., as amended; (3) The Clean Water Act, 33 U.S.C. §1251, et seq., as amended; (4) The Clean Air Act, 33 U.S.C. §7431, et seq.; (5) The Toxic Substances Control Act, 15 U.S.C. §2601, et seq., as amended; and (6) State law counterparts to the federal programs identified in the immediately preceding clauses (1) through (5).

     (b) Except as set forth in Schedule 2.14 , Seller has at all times complied in all material respects with all applicable Environmental Laws and Permits related to the Business, the Transferred Assets and any property owned, operated or leased by Seller in connection with the Transferred Assets.

     (c) Except as set forth in Schedule 2.14 , no Reportable Conditions exist, as of Closing, that have given rise to Claims (as defined in this sub-paragraph) against the Business or Transferred Assets based on the threat of injury or damage to human health or the environment, whether or not such claims have arisen under or are related to any Environmental Laws, environmental Permits, or are connected with any Releases or presence of Hazardous Substances or petroleum products, on, at, in, under or from the Transferred Assets or the Business. As used herein, (i) “ Reportable Conditions ” means any Release that would require, pursuant to applicable Environmental Laws, notification by Seller to any Governmental Authority, (ii) “ Claims ” means any suit, action, investigation, proceeding or written demand by any Person, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute, or common law; (iii) “ Releases ” means any spill, leak, discharge, abandonment, disposal, pumping, pouring, emitting, emptying, leaching, dumping, depositing, dispersing or allowing to escape or migrate into or through the Real Property of any Hazardous Substances; and (iv) “ Hazardous Substances ” shall have the meaning set forth in any of the applicable Environmental Laws.

     (d) To the Knowledge of Seller, except as contemplated hereby or described on Schedule 2.14 , there have been no environmental inspections, investigations, studies, audits, tests, reviews or other analyses conducted in relation to the Transferred Assets or the Business within the past five (5) years.

     Section 2.15 Insurance . Schedule 2.15 sets forth a correct and complete list and description of all policies of insurance (including policies providing property, casualty, liability, workers’ compensation, and bond and surety arrangements) under which Seller currently is insured, at all times between the date hereof and the Closing Date, including (a) the name of the insurer, (b) the period of coverage and (c) the type and amount of coverage. With respect to each such insurance policy set forth on Schedule 2.15 , at all times between the date hereof and the Closing Date, (i) each such policy is in full force and effect, (ii) all premiums currently payable or previously due and payable with respect to all periods up to and including the Closing Date have been paid or accrued, (iii) no written notice of cancellation or termination has been received with respect to any such policy, (iv) to Seller’s Knowledge, Seller is not in breach or default (including the giving of notice thereunder), (v) each such policy will remain in full force and effect (other than on account of actions which may be taken by the insurance company that is a party thereto, without regard to any action by Seller) through the Closing without the payment of additional premiums, and (vi) no party to the policy has repudiated, or given written notice of an intent to repudiate, any provision thereof.

     Section 2.16 Authority to Conduct Business and Intellectual Property Rights . Schedule 2.16 describes all patents and patent applications which are used or valuable in the operation of the Business (in each such case, identifying the date(s) and jurisdiction(s) in which the patent was granted or applied for and the number of such patent or application), and to Seller’s Knowledge such patents and patent applications do not infringe on any rights of any third party. Seller is not a party to, either as licensor or licensee, and is not bound by or subject to, any license agreement for any patent, process, trademark, service mark, trade name or copyright, except as described in Schedule 2.16 . All trademarks, service marks, trade names, and applications therefor or registrations thereof, owned or used by Seller in the Business are listed in Schedule 2.16 , and, as applicable and to the extent indicated thereon, have been duly registered in, filed in or issued by the U.S. Patent and Trademark Office or the corresponding agency or office of the states of the United States indicated.

     Section 2.17 No Brokers . Except for Simmons & Co. and its Affiliates, whose fees shall be the sole responsibility of Seller (and for which Buyer shall have no liability whatsoever), Seller has not made any agreement or taken any other action which might cause anyone to become entitled to a broker’s fee or commission as a result of the transactions contemplated hereunder.

     Section 2.18 Securities Laws .

     (a) Seller is acquiring the Stock Consideration for its own account, without a view to the distribution thereof in violation of the Securities Act of 1933, as amended (the “ Securities Act ”). Seller does not have any contract, undertaking, agreement, understanding or arrangement with any person to sell, transfer or pledge to any Person any part or all of the Stock Consideration, or any interest therein, nor does Seller have any present plans to enter into the same. Seller agrees that it will not transfer any of the Stock Consideration except in compliance with applicable United States and other securities laws.

     (b) Seller is an “accredited investor” within the meaning of Regulation D under the Securities Act and was not organized solely for the purpose of acquiring any of the Stock Consideration. Seller has adequate means of providing for its current needs and contingencies, has no need now, and anticipates no need in the foreseeable future, to sell any portion of the Stock Consideration, and currently has sufficient net worth and financial liquidity to afford a complete loss of its investment in Buyer. Seller has such knowledge and experience in financial and business matters so that Seller is capable of evaluating the merits and risks of an investment in Buyer and has made such evaluation. Seller fully understands that the Stock Consideration is a speculative investment which involves a high degree of risk of loss of Seller’s entire investment. No person or entity, other than Buyer or its authorized representatives, has offered the Stock Consideration to Seller. Seller is able to bear the economic risk of an investment in the Stock Consideration.

     (c) Seller understands that Buyer has not registered the Stock Consideration under the Securities Act, and Seller agrees that the Stock Consideration may not be sold or transferred or offered for sale or transfer by it without registration under the Securities Act or the availability of an exemption therefrom. Seller has had an opportunity to ask questions of and receive answers from the management and authorized representatives of Buyer, and to review any other relevant documents and records concerning the business of Buyer, including all of Buyer’s current filings with the SEC, and the terms and conditions of this investment, and that any such questions have been answered to Seller’s full satisfaction. Seller understands that no Governmental Authority has passed upon or made any recommendation or endorsement of an investment in the Stock Consideration.

     Section 2.19 Full Disclosure . No representation or warranty of Seller contained in this ARTICLE 2 contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary to make the statements contained herein or therein not misleading.

     Section 2.20 No Other Representations or Warranties . Except for the representations and warranties contained herein (including any annexes, exhibits, schedules or other attachments hereto and any certificates or other documents delivered in connection with the consummation of the transactions contemplated hereby), the Transferred Assets are being sold by Seller to Buyer “as is, where is” and Seller makes no express or implied representations or warranties with respect to the Transferred Assets, the Assumed Liabilities, the Business or any other matters, including without limitation the implied warranties of merchantability or of fitness for a particular purpose.

ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF BUYER .

     To induce Seller to enter into this Agreement and to sell the Transferred Assets to Buyer, Buyer hereby represents, warrants and covenants to Seller as follows:

     Section 3.1 Organization . Buyer is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware.

     Section 3.2 Enforceability . Buyer has full corporate power and authority to make, execute and perform this Agreement and the other Transaction Documents to which it is a party, and to carry out the transactions contemplated hereby and thereby in accordance with their respective terms. This Agreement and the other Transaction Documents to which Buyer is a party constitute the valid and legally binding obligations of Buyer enforceable against it in accordance with their respective terms, subject to general equity principles and except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting the rights of creditors generally.

     Section 3.3 Due Authorization; Valid Execution; No Inconsistent Obligations . This Agreement and the other Transaction Documents to which Buyer is a party and all transactions required hereunder or thereunder to be performed by Buyer have been duly and validly authorized and approved by all necessary corporate action on the part of Buyer (including without limitation all requisite approvals of Buyer’s Board of Directors). This Agreement has been, and the other Transaction Documents to which Buyer is a party will be (on or prior to the Closing Date), duly and validly executed and delivered on behalf of Buyer. Except as set forth in Schedule 3.3 , neither the execution and delivery of this Agreement or the other Transaction Documents to which Buyer is a party nor the consummation of the transactions contemplated herein or therein will result in a violation or breach of, or constitute a default under any term or provision of (a) the Certificate of Incorporation, Bylaws or other organizational documents of Buyer or (b) (i) any indenture, note, mortgage, bond, security agreement, loan agreement, guaranty, pledge, or other instrument, contract, agreement or commitment, (ii) any Law, (iii) any applicable ruling or order of any Governmental Authority, or (iv) any other commitment or restriction, in each case, to which Buyer is a party or by which any of its properties or assets is subject or bound, except, with respect solely to clause (iv) above, for such violations, breaches or defaults which would not, individually or in the aggregate, prevent or materially delay the consummation of

the transactions contemplated by this Agreement or the other Transaction Documents or the performance by Buyer of any of its obligations hereunder or thereunder.

     Section 3.4 Capitalization .

     (a) The authorized capital stock of Buyer consists of 100,000,000 shares of Common Stock, and 10,000,000 undesignated preferred shares, par value $0.01 per share (“ Preferred Stock ”). As of October 23, 2006, there were (i) 24,586,848 shares of Common Stock issued and outstanding (exclusive of unvested restricted shares), (ii) no shares of Preferred Stock issued and outstanding, and (iii) 1,555,501 shares of Common Stock issuable pursuant to options granted under the stock options plans of Buyer or warrants described in the Buyer Reports. All issued and outstanding shares of Common Stock (i) are duly authorized, validly issued, fully paid, nonassessable and free of preemptive rights, (ii) were not issued in violation of the terms of any agreement or other understanding binding upon Buyer and (iii) were issued in compliance with all charter documents of Buyer and all applicable U.S. federal and state securities laws, rules and regulations.

     (b) The shares of Common Stock to be issued as the Stock Consideration hereunder have been duly authorized and, upon issuance and payment therefor, shall be validly issued, fully paid and non-assessable. Upon delivery of such shares pursuant to the terms of this Agreement, good and valid title to such shares, free and clear of any and all Liens (except for any and all restrictions contemplated by this Agreement and/or applicable federal and state securities laws), will pass to Seller.

     (c) Neither the execution and delivery of this Agreement or any other Transaction Document by Buyer, nor the consummation by Buyer of the transactions contemplated hereby or thereby to be performed by it, nor compliance by Buyer with any of the terms or provisions hereof or thereof, will result in the vesting in any third-party any option, warrant, right, subscription, call, unsatisfied preemptive right, convertible or exchangeable security, or other agreement or right of any kind to purchase or otherwise acquire any ownership interest in Buyer, or give rise to any third party rights to indemnification or reimbursement from Buyer.

     Section 3.5 Consents . Except for (i) the filings, notifications, authorizations, consents, orders or approvals listed in Schedule 3.5 and (ii) such other filings, notifications, authorizations, consents, orders or approvals, the failure of which to make or obtain would not, individually or in the aggregate, prevent or materially delay the consummation of the transactions contemplated by this Agreement or the other Transaction Documents or the performance by Buyer of any of its obligations hereunder or thereunder, no authorizations, consents, orders or approvals of or filings or notifications to any Governmental Authority or third party are necessary in connection with the execution and delivery by Buyer of this Agreement or any other Transaction Document, and the consummation by Buyer of the transactions contemplated hereby or thereby.

     Section 3.6 Legal Proceedings . Buyer is not a party to any, and there are no pending or, to Buyer’s Knowledge, threatened, actions or proceedings against or otherwise affecting Buyer or its properties or assets or challenging the validity or propriety of the transactions contemplated by this Agreement or any other Transaction Document which, if adversely determined, would, individually or in the aggregate, prevent or materially delay the consummation of the transactions contemplated by this Agreement or the other Transaction Documents or the performance by Buyer of any of its obligations hereunder or thereunder, and there is no injunction, order, judgment, decree or regulatory restriction imposed upon Buyer or its properties or assets which would, individually or in the aggregate, prevent or materially delay the consummation of the transactions contemplated by this Agreement or the other Transaction Documents or the performance by Buyer of any of its obligations pursuant to this Agreement.

     Section 3.7 Public Disclosure Documents .

     (a) Buyer has made available to Seller each registration statement, report, proxy statement or information statement (other than preliminary materials) filed by Buyer with the Securities and Exchange

Commission (“ SEC ”) since December 31, 2003, each in the form (including exhibits and any amendments thereto) filed with the SEC prior to the date hereof (collectively, the “ Buyer Reports ”), and Buyer has filed all forms, reports and documents required to be filed by it with the SEC pursuant to relevant securities statutes, regulations, policies and rules since such time. As of their respective dates, the Buyer Reports (i) were prepared in accordance with the applicable requirements of the American Stock Exchange, the Securities Act, the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), and the rules and regulations thereunder and complied with the then applicable accounting requirements and (ii) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading except for such statements, if any, as have been modified or superseded by subsequent filings with the SEC prior to the date hereof. Each of the consolidated balance sheets included in or incorporated by reference into the Buyer Reports (including the related notes and schedules) fairly presents in all material respects the consolidated financial position of Buyer and its subsidiaries as of its date and each of the consolidated statements of operations, cash flows and stockholders’ equity included in or incorporated by reference into the Buyer Reports (including any related notes and schedules) fairly presents in all material respects the results of operations, cash flows or changes in stockholders’ equity, as the case may be, of Buyer and its subsidiaries for the periods set forth therein (subject, in the case of unaudited statements, to such exceptions as may be permitted by Form l0-Q of the SEC), in each case in accordance with GAAP consistently applied during the periods involved, except as may be noted therein, and except that the unaudited interim financial statements were or are subject to normal and recurring year-end adjustments that were not or are not expected to be material in amount or effect.

     (b) Except as disclosed in the Buyer Reports, Buyer’s auditors and the audit committee of the Board of Directors of Buyer have not been advised of(i) any significant deficiencies in the design or operation of internal controls that could adversely affect Buyer’s ability to record, process, summarize and report financial data nor any material weaknesses in internal controls; or (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in Buyer’s internal controls. There have been no significant changes in internal controls or in other factors that could significantly affect internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses.

     Section 3.8 Litigation and Liabilities . There are no actions, suits or proceedings pending against Buyer or any of its subsidiaries or, to Buyer’s Knowledge, threatened against Buyer or any of its subsidiaries, at law or in equity, or before or by any federal, state or foreign commission, court, board, bureau, agency or instrumentality, other than those that would not have a Material Adverse Effect on Buyer. There are no outstanding judgments, decrees, injunctions, awards or orders against Buyer or any of its subsidiaries. There are no obligations or liabilities of any nature, whether accrued, absolute, contingent or otherwise, of Buyer or any of its subsidiaries, other than those liabilities and obligations (a) that are disclosed in the Buyer Reports, (b) that have been incurred in the ordinary course of business since December 31, 2005 or (c) that are related to expenses associated with the transactions contemplated by this Agreement.

     Section 3.9 Absence of Certain Changes . Since December 31, 2005, there has not been (i) any Material Adverse Effect with respect to Buyer; (ii) through the date hereof, any material change by Buyer or any of its subsidiaries (viewed on a consolidated basis) in any of its accounting methods, principles or practices or any of its tax methods, practices or elections, except for changes required by GAAP; or (iii) any material damage, destruction, or loss to the business or properties of Buyer and its subsidiaries, taken as a whole, not covered by insurance.

     Section 3.10 Taxes . Buyer and its subsidiaries have filed all federal, state and local income and franchise tax returns required to be filed through the date hereof and have paid all Taxes due thereon, and no Tax deficiency has been determined adversely to Buyer or any of its subsidiaries which has had, nor does Buyer have any Knowledge of any Tax deficiency which, if determined adversely to Buyer or any of its subsidiaries would have, a Material Adverse Effect on Buyer. The charges, accruals and reserves on the books of Buyer and its subsidiaries in respect of Taxes or other governmental charges are, in the opinion of Buyer, adequate.

     Section 3.11 Title to Properties . Buyer and each of its subsidiaries have good and marketable title in fee simple to all real property and good and marketable title to all personal property owned by them, in each case free and clear of all Liens, except such as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by Buyer and its subsidiaries; and all assets held under lease by Buyer and its subsidiaries are held by them under valid, subsisting and enforceable leases, with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by Buyer and its subsidiaries.

     Section 3.12 Insurance . Buyer and each of its subsidiaries carry, or are covered by, insurance in such amounts and covering such risks as they reasonably deem sufficient for the conduct of their respective businesses and the value of their respective properties, and neither Buyer nor any subsidiary has received notice of cancellation or non-renewal of such insurance.

     Section 3.13 Environmental Laws . Buyer is in compliance in all material respects with all applicable Environmental Laws in the country in which it operates, and possesses and is in compliance in all material respects with all environmental Permits required under such laws for the conduct of its business operations. To the Knowledge of Buyer, there are no past events or conditions that would give rise to any liability of Buyer under any Environmental Law and there has been no Release of Hazardous Substances at any property owned, or operated by Buyer now or in the past that would give rise to any liability of Buyer under any Environmental Law. No written notice, demand, request for information, citation or complaint has been received by Buyer from, and no action or proceeding is pending or, to the Knowledge of Buyer, threatened by, any Governmental Authority against Buyer, with respect to any Environmental Law.

     Section 3.14 No Brokers . Except for RBC Capital Markets Corporation and its Affiliates, whose fees shall be the sole responsibility of Buyer (and for which Seller shall have no liability whatsoever), Buyer has not made any agreement or taken any other action which might cause anyone to become entitled to a broker’s fee or commission as a result of the transactions contemplated hereunder.

ARTICLE 4. CONDUCT OF BUSINESS PENDING CLOSING .

     Seller covenants and agrees that, except as may otherwise be provided herein, without the prior written consent of Buyer, which will not be unreasonably withheld or delayed, between the date hereof and the Closing Date:

     Section 4.1 Business in the Ordinary Course . The Business shall be conducted only in the ordinary and usual course and consistent with prior practices. Without limiting the generality of the foregoing:

     (a) Seller shall not enter into any contracts or agreements with any third parties except in the ordinary course of the Business at prices and on terms consistent with the prior operating practices of Seller.

     (b) Except for sales of inventory and normal disposal of equipment in the ordinary course of the Business, Seller shall not sell, assign, transfer, convey, or otherwise dispose of, or cause the sale, assignment, transfer, conveyance, or other disposition of any of the Transferred Assets.

     (c) All contracts or commitments of Seller for the purchase of raw materials, products, services and supplies shall be entered into only in the ordinary and regular course of business to enable Seller to conduct its normal business operations and to maintain its normal inventory of raw materials and finished goods, at prices and on terms consistent with the prior operating practices of Seller.

     (d) The books, records and accounts of Seller shall be maintained in the usual, regular and ordinary course of business on a basis consistent with prior practices and in accordance with GAAP.

     (e) Seller shall use its commercially reasonable efforts to preserve the Business as in effect on the date hereof, to keep available the services of Seller’s present employees employed in such business, and to

preserve the goodwill of Seller’s present suppliers to such business, the customers at such business and others having business relations with the Business as of the date hereof.

     Section 4.2 Compensation . Except in the ordinary course of business (consistent with past practices), no increase shall be made in the compensation payable or to become payable to any employee of Seller, and no bonus or profit-share payment or other arrangement (whether current or deferred) shall be made to or with any employee. No employee shall be hired by Seller at a salary in excess of $50,000 per annum without Buyer’s prior consent, which shall not be unreasonably withheld.

ARTICLE 5. CONDITIONS TO OBLIGATIONS OF BUYER .

     All obligations of Buyer under this Agreement are subject to the fulfillment and satisfaction of each and every of the following conditions on or prior to the Closing, any or all of which may be waived in whole or in part by Buyer:

     Section 5.1 Representations and Warranties . The representations and warranties of Seller contained in this Agreement (including without limitation in ARTICLE 2 hereof) shall be true and correct in all material respects as of the date of this Agreement and on the Closing Date as though made on the Closing Date, except to the extent such representations and warranties speak only as of an earlier date; provided , however , that with respect to any such representation or warranty or portion thereof that is qualified by materiality or similar qualifier, such representation or warranty or portion thereof shall be true and correct in all respects.

     Section 5.2 Compliance with Agreements and Conditions . Seller shall have performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement to be performed or complied with by Seller prior to or on the Closing Date.

     Section 5.3 Closing Deliveries . Seller shall have delivered, or caused to be delivered, to Buyer each of the items described in Section 1.10(a) of this Agreement.

     Section 5.4 Resolutions . Buyer shall have received copies of duly adopted resolutions of the Board of Directors and shareholders of Seller, certified in each case as of the Closing Date by the Secretary or Assistant Secretary of Seller, authorizing and approving the execution of this Agreement and the other Transaction Documents to which Seller is a party, the consummation of the transactions contemplated hereby and thereby and all other action necessary to enable Seller to comply with the terms hereof and thereof.

     Section 5.5 Opinion of Counsel . Buyer shall have received from Phelps Dunbar LLP, special legal counsel for Seller, a legal opinion letter, dated the Closing Date, addressing the matters set forth in Exhibit E attached hereto, subject to appropriate assumptions and qualifications.

     Section 5.6 Government Consents . Buyer shall have received from any and all persons, firms, and other legal entities, or any Governmental Authorities having jurisdiction over the transactions contemplated by this Agreement, or any part hereof, such consents, authorizations and approvals as are necessary for the consummation thereof, and all notices or filings required to be given to any Governmental Authorities shall have been given or filed, and any applicable waiting periods shall have expired or been terminated, including without limitation any such filings and/or waiting periods (including any extensions thereof) under the HSR Act.

     Section 5.7 Title Insurance .

     (a) Buyer shall have received: (i) assurances reasonably satisfactory to Buyer that, shortly after the Closing, a title insurance company reasonably satisfactory to Buyer shall issue to Buyer, at Buyer’s expense, an Owner Policy of Title Insurance dated as of the Closing Date and insuring fee simple title in Buyer to the Texas Real Property and the leasehold estates in the Texas Leased Real Property created pursuant to the applicable Assigned Contracts subject only to the Permitted Encumbrances and the standard

printed exceptions, with the exception as to area and boundaries modified to read “any shortages in area” provided that Buyer provides to both Seller and the title company issuing such policy an appropriate survey and provided that Buyer pays the applicable premium for such modification, and (ii) such other usual and customary documentation as may be reasonably required by the title insurance company from Seller in order to issue the policy of title insurance as herein contemplated. Any closing fee charged by the title insurance company for the use of its personnel and facilities shall be paid one-half ( ¹ / 2 ) by Seller and one-half ( ¹ / 2 ) by Buyer. As used herein:

     (i) “ Texas Real Property ” means the Owned Real Property situated in Texas;

     (ii) “ Texas Leased Real Property ” means the Leased Real Property situated in Texas; and

     (iii) “ Permitted Encumbrances ” means any (a) mechanics’, carriers’, workers’ and other similar liens arising in the ordinary course of business and which in the aggregate are not substantial in amount, and do not interfere with the present use of the Transferred Assets; (b) liens for current taxes and assessments, both general and special, and other governmental charges not yet due and payable as of the Closing; (c) usual and customary non-monetary real property encumbrances; (d) all land use restrictions (including environmental, endangered species and wetlands), building and zoning codes and ordinances, and other laws, ordinances, regulations, rules, orders, licenses or determinations of any Governmental Authority, now or hereafter enacted, made or issued by any such Governmental Authority affecting the Real Property; (e) all easements (including conservation easements and public trust easements), rights-of-way, road use agreements, covenants, conditions, restrictions, reservations, licenses, agreements and other matters of record; (f) all encroachments, overlaps, overhangs, unrecorded easements, variations in area or measurement, rights of parties in possession, lack of access or any other matters not of record which would be disclosed by an accurate survey or physical inspection of the Real Property; (g) all electric power, telephone, gas, sanitary sewer, storm sewer, water and other utility lines, pipelines service lines and facilities of any nature on, over or under the Real Property, and all related licenses, easements, rights-of-way and other agreements; (h) all existing public and private roads and streets (whether dedicated or undedicated) including all rights of the public to use such roads and streets, and all railroad lines and rights-of-way affecting the Real Property; (i) prior reservations or conveyances of mineral rights or mineral leases of every kind and character; (j) water rights (whether asserted by any Governmental Authority or private party); (k) other imperfections of title, easements and encumbrances, if any, which do not currently interfere materially with operations as currently conducted by Seller on such property; and (l) with respect to any asset of Seller that consists of a leasehold or other possessory interest in real property, all encumbrances, covenants, imperfections in title, easements, restrictions and other title matters (whether or not they are recorded) to which the underlying fee estate in such real property is subject which were not created or incurred by Seller and which do not currently materially interfere with Seller’s operations as conducted on such property.

     (b) Buyer shall have received: (i) assurances reasonably satisfactory to Buyer that, shortly after the Closing, a title insurance company reasonably satisfactory to Buyer shall issue to Buyer, at Buyer’s expense, an Owner Policy of Title Insurance dated as of the Closing Date and insuring in Buyer ownership of the Louisiana Real Property and the leasehold estates in Louisiana Leased Real Property created pursuant to the applicable Assigned Contracts subject only to the Permitted Encumbrances and the standard printed exceptions, with the exception as to area and boundaries modified to read “any shortages in area” provided that Buyer provides to both Seller and the title company issuing such policy an appropriate survey and provided that Buyer pays the applicable premium for such modification, and (ii) such other usual and customary documentation as may be reasonably required by the title insurance company from Seller in order to issue the policy of title insurance as herein contemplated. Any closing fee charged by the title insurance company for the use of its personnel and facilities shall be paid one-half ( ¹ / 2 ) by Seller and one-half ( ¹ / 2 ) buy Buyer. As used herein:

     (i) “ Louisiana Real Property ” means the Owned Real Property situated in Louisiana; and

     (ii) “ Louisiana Leased Real Property ” means the Leased Real Property located in Louisiana.

     (c) Buyer may, at Buyer’s sole expense, obtain a survey and a commitment for owner’s title insurance. If on or before the Disclosure Delivery Deadline Buyer notifies Seller in writing that said survey or commitment disclose encumbrances on the Real Property unsatisfactory to Buyer other than Permitted Encumbrances and Liens which will be discharged or bonded off from Closing proceeds (the “ Buyer’s Property Objections ”), then Seller, upon Buyer’s notification of the Buyer’s Property Objections, shall diligently use its reasonable best efforts to cure same. If, after the exercise of reasonable diligence, Seller is unable to remove the Buyer’s Property Objections prior to the Closing, then Buyer at Buyer’s election (and in its sole discretion) shall have the right to change such subject Real Property to be an Excluded Asset, and the Closing Cash Consideration shall be reduced by an amount equal to the fair market value of such subject Real Property ( provided that as used herein “fair market value” means the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or necessity of either party). If Seller’s corrections to the Buyer’s Property Objections cannot be completed before the date for the Closing, then the date of the Closing shall be extended by not more than thirty (30) days so that Seller may, at Seller’s expense, complete such corrections. After the Disclosure Delivery Deadline, Buyer shall be deemed to have accepted the title of the Real Property (except for Buyer’s Property Objections which are timely delivered to Seller).

     Section 5.8 Permits . All Permits shall have been transferred or reissued to Buyer (or Buyer’s designee) and all consents required for such transfer or reissuance shall have been obtained by Seller to the extent permitted under applicable Law or, for Permits which are not transferable, Buyer shall have obtained reissuance of all Permits required to enable Buyer to conduct the Business from and after Closing subject to no more onerous requirements and in the same manner as theretofore conducted by Seller; provided , however , that this condition shall be deemed satisfied to the extent that applicable Law (including without limitation applicable Environmental Law) would allow Buyer to obtain such Permits after Closing without being deemed to be in violation of applicable Laws.

     Section 5.9 Required Consents . Seller shall have delivered to Buyer all of the consents required on Schedule 2.4 (the “ Required Consents ”).

     Section 5.10 Release of Certain Liens . Seller shall have provided evidence satisfactory to Buyer that the Liens listed on Schedule 5.10 have been released as of the Closing.

     Section 5.11 No Inconsistent Requirements . No legal action shall have been commenced by any public authority or private party and no judicial or administrative order shall have been issued seeking to enjoin or prohibit the transactions contemplated hereby.

     Section 5.12 Appraisal and Other Due Diligence .

     (a) Buyer shall have determined to its reasonable satisfaction based on information from the original manufacturers or a process mutually acceptable to Seller and Buyer that the sum of (i) the replacement cost (brand new) for those Transferred Assets constituting Seller’s rental equipment inventory and repair parts and supplies inventory and (ii) the fair market value based on current appraisals of the other Transferred Assets, is at least $200,000,000.

     (b) Buyer shall have completed its due diligence review of the assets and business of Seller (including without limitation the Business) satisfactory to Buyer, which due diligence reviews shall not have revealed any facts or circumstances that, in Buyer’s sole judgment, render the acquisition of the Transferred Assets not advantageous to Buyer. The due diligence review should be conducted by and/or on behalf of Buyer, and shall include without limitation a review of the following:

     (i) State and federal tax filings;

     (ii) Audited financial statements and unaudited interim period financial statements;

     (iii) Environmental Law compliance, including without limitation one or more Phase I studies and, at Buyer’s sole discretion, one or more Phase II studies (in each case, to be obtained at Buyer’s expense);

     (iv) All pending or threatened legal proceedings; and

     (v) All material contracts.

     Section 5.13 Minimum 2006 Adjusted EBITDA . Seller shall have produced Adjusted EBITDA for the fiscal year ended October 31, 2006 of not less than $46,000,000. For purposes of this Agreement, “ Adjusted EBITDA ” shall be calculated from the Fiscal 2006 Financial Statements and shall mean Seller’s net income as reported in the Fiscal 2006 Financial Statements before (a) interest expense or interest and dividend income, (b) income taxes, (c) depreciation, (d) amortization, (e) depletion and (f) all cash and non-cash expenses incurred by Seller in connection with the issuance of 150 shares of Seller’s common stock and the payment of cash bonuses to Byron A. “Red” Adams, Sr. in such fiscal year. Net income and each of the items mentioned in the preceding sentence, other than the cash and non-cash expenses in clause (f), shall be calculated in accordance with GAAP. Furthermore, Adjusted EBITDA shall be calculated from the Fiscal 2006 Financial Statements without any other adjustment not set forth in the preceding definition of Adjusted EBITDA. Annex D attached hereto sets forth the calculation of Adjusted EBITDA for Seller’s fiscal years ended October 31, 2005 and 2004. Adjusted EBITDA for the fiscal year ended October 31, 2006 shall be calculated in the same manner as Adjusted EBITDA was calculated for the fiscal years ended October 31, 2005 and 2004 on Annex D .

     Section 5.14 No Material Adverse Effect . There shall not have occurred since the date hereof a Material Adverse Effect with respect to the Business or the Transferred Assets.

     Section 5.15 Delivery of Disclosure Items .

     (a) As soon as practicable, and in any event within fifteen (15) Business Days after the date of this Agreement (the “ Disclosure Delivery Deadline ”), Seller shall have delivered to Buyer true, correct and complete copies of:

     (i) each of the Schedules for which Seller is responsible referenced in this Agreement;

     (ii) each of the written Assigned Contracts;

     (iii) each of the Owned Real Property Title Documents;

     (iv) each of the Realty Use Rights; and

     (v) each of the Plans.

     (b) Seller shall have delivered to Buyer true, correct and complete copies of the Fiscal 2006 Financial Statements at least seven (7) days prior to the Closing Date.

ARTICLE 6. CONDITIONS TO OBLIGATIONS OF SELLER .

     All of the obligations of Seller under this Agreement are subject to the fulfillment and satisfaction of each and every of the following conditions on or prior to the Closing, any or all of which may be waived in whole or in part by Seller:

     Section 6.1 Representations and Warranties . The representations and warranties of Buyer contained in this Agreement (including without limitation in ARTICLE 3 hereof) shall be true and correct in

all material respects as of the date of this Agreement and on the Closing Date as though made on the Closing Date, except to the extent such representations and warranties speak only as of an earlier date; provided , however , that with respect to any such representation or warranty or portion thereof that is qualified by materiality or similar qualifier, such representation or warranty or portion thereof shall be true and correct in all respects.

     Section 6.2 Compliance with Agreements and Conditions . Buyer shall have performed and complied with all agreements, covenants and conditions required by this Agreement to be performed or complied with by Buyer prior to or on the Closing Date.

     Section 6.3 Closing Deliveries . Buyer shall have delivered, or caused to be delivered, to Seller each of the items described in Section 1.10(b) of this Agreement.

     Section 6.4 Resolutions . Seller shall have received copies of duly adopted resolutions of the Board of Directors of Buyer, certified as of the Closing Date by the Secretary or Assistant Secretary of Buyer, authorizing and approving the execution of this Agreement and the other Transaction Documents, the consummation of the transactions contemplated hereby and thereby and all other action necessary to enable Buyer to comply with the terms hereof and thereof.

     Section 6.5 No Inconsistent Requirements . No legal action shall have been commenced by any public authority or private party and no judicial or administrative order shall have been issued seeking to enjoin or prohibit the transactions contemplated hereby.

     Section 6.6 Board Representation . At the Closing, one designee of Seller shall have been appointed or elected to Buyer’s Board of Directors.

     Section 6.7 Shareholder Approval . The shareholders of Seller shall have authorized and approved the execution and delivery of this Agreement and the other Transaction Documents to which Seller is a party, the consummation of the transactions contemplated hereby and thereby and all other action necessary to enable Seller to comply with the terms hereof and thereof.

     Section 6.8 No Material Adverse Effect . There shall not have occurred since the date hereof a Material Adverse Effect with respect to Buyer.

     Section 6.9 Delivery of Disclosure Items . On or before the Disclosure Delivery Deadline, Buyer shall have delivered to Seller true, correct and complete copies of each of the Schedules for which Buyer is responsible referenced in this Agreement.

     Section 6.10 Opinion of Counsel . Seller shall have received from Andrews Kurth LLP, special legal counsel to Buyer, a legal opinion letter, dated the Closing Date, addressing the matters set forth in Exhibit F attached hereto, subject to appropriate assumptions and qualifications.

ARTICLE 7. INDEMNITIES .

     Section 7.1 Indemnification of Buyer . Subject to the limitations set forth in Section 7.4 and Section 8.1, Seller shall indemnify, defend and hold harmless Buyer, its directors, shareholders, officers, employees, subsidiaries, Affiliates and their respective directors, shareholders, members, managers, partners, officers and employees (collectively, “ Buyer Indemnitees ”) from and against and in respect of any and all loss, damage, liability, cost and expense, including deductibles paid under insurance policies and reasonable attorneys’ and accountants’ fees and amounts paid in settlement pursuant to Section 7.3(b) below (collectively, “ Losses ”), suffered or incurred by any Buyer Indemnitee by reason of, or arising out of:

     (a) any breach of any representation or warranty made by Seller in this Agreement (other than Section 2.14);

     (b) the failure by Seller to perform any unwaived covenant or agreement in this Agreement on its part to be performed;

     (c) all obligations and liabilities of Seller or the Business to the extent relating to periods prior to the Closing, whether direct or indirect, fixed or contingent, known or unknown, that are not part of the Assumed Liabilities;

     (d) any liability under the Worker Adjustment and Retraining Act of 1988, as amended (the “ WARN Act ”), or any similar state or local legal requirement that may result from an “Employment Loss,” as described in 29 U.S.C. § 2101(a)(6), caused by action or inaction of Seller prior to the Closing; or

     (e) any claims, liabilities, obligations, damages, costs and expenses, known or unknown, fixed or contingent, claimed or demanded by third parties against any Buyer Indemnitee arising out of or resulting from (i) the operation of the Business prior to the Closing, (ii) ownership or operation of the Transferred Assets and arising out of any fact or occurrence prior to the Closing or (iii) the Excluded Assets or Retained Employees.

     Section 7.2 Indemnification of Seller . Subject to the limitations set forth in Section 7.4 and Section 8.1, Buyer shall indemnify, defend and hold harmless Seller, its directors, shareholders, officers, employees, subsidiaries, Affiliates and their respective directors, shareholders, members, managers, partners, officers and employees (collectively, “ Seller Indemnitees ”) from and against and in respect of any and all Losses suffered or incurred by any Seller Indemnitee by reason of, or arising out of:

     (a) any breach of any representation or warranty made by Buyer in this Agreement;

     (b) the failure by Buyer to perform any unwaived covenant or agreement in this Agreement on its part to be performed;

     (c) the failure by Buyer to timely discharge and pay the Assumed Liabilities;

     (d) all obligations and liabilities of Buyer or the Business to the extent relating to periods from and after the Closing, whether direct or indirect, fixed or contingent, known or unknown;

     (e) any liability under the WARN Act or any similar state or local legal requirement that may result from an “Employment Loss,” as described in 29 U.S.C. § 2101(a)(6), caused by action or inaction of Buyer after the Closing; or

     (f) any claims, liabilities, obligations, damages, costs and expenses, known or unknown, fixed or contingent, claimed or demanded by third parties against any Seller Indemnitee arising out of or resulting from (i) the operation of the Business from and after the Closing, (ii) ownership or operation of the Transferred Assets and arising out of any fact or occurrence from and after the Closing or (iii) the Transferred Employees from and after the Closing.

     Section 7.3 Defense of Claims .

     (a) If any third-party claim or action arises after the Closing Date and during the Survival Period (as defined in Section 8.1 below) for which (i) Seller may be liable to any Buyer Indemnitee or (ii) Buyer may be liable to any Seller Indemnitee (for purposes of this ARTICLE 7, Buyer Indemnitees and Seller Indemnitees are sometimes referred to as “ Indemnitee(s) ” and, Seller and Buyer are sometimes referred to as “ Indemnitor(s) ”, in each case, as the context requires), such Indemnitee will, if a claim is to be made against an Indemnitor pursuant to this ARTICLE 7 or if the Indemnitee intends to take such claim into account in calculating the Threshold (as defined below), give prompt notice to the Indemnitor of the commencement of such claim, but the failure to notify the Indemnitor will not relieve the Indemnitor of any liabilities that the Indemnitor may have to the Indemnitee, except to the extent that the Indemnitor demonstrates that the defense of such action is prejudiced by the Indemnitees failure to give such notice. The expenses of all proceedings,

contests or lawsuits with respect to such claims or actions shall be borne by Indemnitor(s). If Indemnitor wishes to assume the defense of such claim or action, then Indemnitor shall give written notice to Indemnitees within twenty (20) days after notice from Indemnitees of such claim or action (unless the claim or action reasonably requires a response in less than twenty (20) days after the notice is given to Indemnitor, in which event Indemnitor shall notify Indemnitees at least five (5) days prior to such reasonably required response date), and Indemnitor shall thereafter assume the defense of any such claim or liability; provided that Indemnitees may participate in such defense at their own expense; provided further that in the event Indemnitees retain counsel as provided above, counsel retained by the Indemnitor shall be lead counsel.

     (b) If Indemnitor does not assume the defense of, or if after so assuming Indemnitor fails to defend, any such claim or action, then Indemnitees may defend against such claim or action in such manner as they may deem appropriate (provided that Indemnitor may participate in such defense at its own expense) and Indemnitees may settle such claim or litigation with the consent of Indemnitor (which shall not be unreasonably withheld or delayed so long as any such settlement is solely for money damages), and Indemnitor shall promptly reimburse Indemnitees for the amount of all expenses, legal and otherwise consented to by Indemnitor. If no settlement of such claim or litigation is made, Indemnitor shall satisfy any judgment rendered with respect to such claim or in such action, before Indemnitees are required to do so, and pay all expenses, legal or otherwise, reasonably and necessarily incurred by Indemnitees in the defense of such claim or litigation.

     (c) If a judgment is rendered against any of the Indemnitees in any action covered by the indemnification hereunder, or any lien in respect of such judgment attaches to any of the assets of any of the Indemnitees, Indemnitor shall immediately upon such entry or attachment pay such judgment in full or discharge such lien unless, at the expense and direction of Indemnitor, an appeal is taken under which the execution of the judgment or satisfaction of the lien is stayed. If and when a final judgment is rendered in any such action, Indemnitor shall promptly pay such judgment or discharge such lien before any of Indemnitees is compelled to do so.

     Section 7.4 Limits on Indemnification .

     (a) No party shall have any right to seek indemnification under this Agreement with respect to Losses contemplated by Section 7.1 or Section 7.2 that would otherwise be indemnifiable hereunder (including Losses incurred by all other Indemnitees affiliated with or related to such party) until such Losses exceed $3,350,000 in the aggregate (the “ Threshold ”); provided , however , that any Loss (or series of related Losses) contemplated by Section 7.1 or Section 7.2 must equal or exceed $50,000 to count towards the Threshold and to be indemnifiable pursuant to such sections, it being understood by the parties that once the Threshold has been exceeded then the Indemnitor shall be liable for all Losses in excess of $500,000 (other than any Loss or series of related Losses that is less than $50,000); provided , further , that the provisions of this Section 7.4(a) shall not apply to (i) any breach by Seller of the representations and warranties contained in Section 2.1, Section 2.2, Section 2.3, Section 2.5 and Section 2.8(a), (ii) any breach by Buyer of the representations and warranties contained in Section 3.1, Section 3.2, Section 3.3 and Section 3.4(b), (iii) the failure by any party to this Agreement to perform any unwaived covenant or agreement in this Agreement on its part to be performed or (iv) indemnification with respect to any and all Losses as contemplated by Section 7.1(c), Section 7.2(c) or Section 7.2(d).

     (b) Notwithstanding any provision of this Agreement, the aggregate liability of Seller under this ARTICLE 7 shall be limited to an amount equal to $35,000,000; provided , however , that the limitation set forth in this Section 7.4(b) shall not apply to (i) any breach by Seller of the representations, warranties and covenants contained in Section 2.1, Section 2.2, Section 2.3, Section 2.5 and Section 2.8(a), (ii) the failure by Seller to perform any unwaived covenant or agreement in this Agreement on its part to be performed or (iii) indemnification with respect to any and all Losses as contemplated by Section 7.1(c). Furthermore, subject to the preceding provisions of this Section 7.4(b), Seller’s indemnification obligations hereunder shall be satisfied solely out of the Stock Consideration and the cash and cash equivalents described in Section 9.10.

     (c) Notwithstanding any provision of this Agreement, the liability of Buyer under this ARTICLE 7 shall be limited to an amount equal to $35,000,000; provided , however , that the limitation set forth in this Section 7.4(c) shall not apply to (i) any breach by Buyer of the representations and warranties contained in Section 3.1, Section 3.2, Section 3.3 and Section 3.4(b), (ii) the failure by Buyer to perform any unwaived covenant or agreement in this Agreement on its part to be performed or (iii) indemnification with respect to any and all Losses as contemplated by Section 7.2(c) or Section 7.2(d).

     Section 7.5 Exclusive Remedies . After the Closing, the remedies provided by this ARTICLE 7 shall be the sole and exclusive remedy for the parties to this Agreement with respect to any dispute arising from, or related to, this Agreement except in the case of fraud and except that injunctive relief (including specific performance) shall continue to be available to the extent such remedy is in respect of a then surviving representation, warranty, covenant or agreement.

     Section 7.6 Allocation . Any payment of indemnifications by Seller pursuant to Section 7.1 shall be treated by the parties for tax purposes as an adjustment to the Purchase Price.

ARTICLE 8. SURVIVAL OF REPRESENTATIONS AND OTHER PROVISIONS.

     Section 8.1 Survival.

     (a) The representations, warranties, covenants, agreements and indemnities of the parties contained in this Agreement shall survive the consummation of the transactions contemplated herein and shall continue in full force and effect for the period (the “ Survival Period ”) beginning on the Closing Date and continuing for a period of eighteen (18) months (other than the representations and warranties set forth in Section 2.14, which shall terminate upon the Closing); provided , however , that obligations under Section 7.1(c), obligations under Section 7.2(c), obligations under Section 7.2(d) and the obligation to indemnify and hold harmless an indemnified party in respect of breaches of the representations and warranties in Section 2.11 (Taxes) and Section 2.12 (ERISA), shall, in each such case, survive the Closing Date until the expiration of the applicable statute of limitations period; and provided , further , that the Survival Period shall be extended automatically to include any time period necessary to resolve a specific claim for indemnification which was made before expiration of the Survival Period but not resolved prior to its expiration; and provided , further , that any such extension shall apply only as to claims asserted and not so resolved within the Survival Period.

     (b) The covenants and agreements made by the parties in this Agreement shall survive the Closing Date in accordance with their respective terms but, if Closing occurs, any covenant and agreement to be performed fully on or prior to the Closing Date shall be of no further force and effect after the Closing Date.

     (c) No party hereto (or its Affiliates) shall, under any circumstance, be liable to any other party (or its Affiliates) for any consequential, exemplary, special, incidental or punitive damages claimed by such other party under the terms of or due to any breach of this Agreement, including but not limited to, loss of revenue of income, cost of capital, or loss of business reputation or opportunity.

ARTICLE 9. ADDITIONAL AGREEMENTS .

     Section 9.1 Cooperation . The parties shall reasonably cooperate with each other in connection with any steps required to be taken as part of their respective obligations under this Agreement, and the parties shall use their commercially reasonable efforts to consummate the transactions contemplated herein and to fulfill their obligations hereunder, including without limitation causing to be fulfilled at the earliest practical date the conditions precedent to the obligations of the parties to consummate the transactions contemplated hereby. Without limiting the generality of the foregoing, Seller hereby covenants and agrees that, prior to the Closing, it will use its commercially reasonable efforts to cause the shareholders of Seller to authorize and approve the execution and delivery of this Agreement and the other Transaction Documents to which Seller is a party, the consummation of the transactions contemplated hereby and thereby and all other

action necessary to enable Seller to comply with the terms hereof and thereof. Without the prior written consent of the other party, no party hereto may take any intentional action that would cause the conditions precedent to the obligations of the parties hereto to effect the transactions contemplated hereby not to be fulfilled, including without limitation taking or causing to be taken any action which would cause the representations and warranties made by such party herein not to be true, correct and complete as of the Closing.

     Section 9.2 Access .

     (a) Following the date of this Agreement, for the purpose of permitting Buyer to conduct a due diligence review of the assets and business of Seller (including without limitation the Business), Seller will permit Buyer and its agents and representatives to have reasonable access during normal business hours to premises in which Seller conducts its business (including without limitation the Business) and to all of its assets, books, records, personnel, customers and suppliers and will furnish Buyer such financial data, operating data and other information as Buyer may reasonably request. Contact with customers and suppliers shall be coordinated between the parties and shall be done on a mutually agreeable basis. Assuming compliance with the requirements of this Section 9.2, Buyer will complete its due diligence by November 30, 2006.

     (b) Following the date of this Agreement, for the purpose of permitting Seller to conduct a due diligence review of the assets and business of Buyer, Buyer will permit Seller and its agents and representatives to have reasonable access during normal business hours to premises in which Buyer conducts its business and to all of its assets, books, records, personnel, customers and suppliers and will furnish Seller such financial data, operating data and other information as Seller may reasonably request. Seller will complete its due diligence by November 30, 2006.

     Section 9.3 Non-Compete .

     (a)  Non-Compete . Seller shall not, for a period of two (2) years following the Closing Date, directly or indirectly, for itself or on behalf of or in conjunction with any Person:

     (i) engage, as an officer, partner, director, shareholder, owner, partner, joint venturer, member, manager, employee, contractor, lender or in a managerial or advisory capacity, or otherwise, nor shall it cause or permit any Affiliate, whether as an employee, independent contractor, consultant, advisor, or sales representative, or in any other capacity whatsoever, to engage in any business offering any services or products in competition with the Business, in the Territory serviced by Buyer or any of its Affiliates. For purposes hereof, the “ Territory ” shall mean the areas identified on Annex E ;

     (ii) call upon or employ any Person who is, at that time, or has been, within two (2) years prior to that date, within the Territory, an employee or agent of Buyer or any of its Affiliates for the purpose or with the intent of enticing such employee away from or out of the employ of Buyer or any of its Affiliates, or

     (iii) call upon any Person who is, at that time, or has been, within two (2) years prior to that time, a customer or supplier of Buyer or any of its Affiliates within the Territory for the purpose of soliciting or selling services or products in competition with Buyer or any of its Affiliates within the Territory.

For purposes of this Agreement, the term “ Affiliate ” means, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with, such Person; and “ control ” means the possession, directly or indirectly of the power to direct or cause the direction of management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

     (b)  Equitable Relief . Because of the difficulty of measuring economic losses as a result of a breach of the foregoing covenants, and because of the immediate and irreparable damage that could be caused for which Buyer would have no other adequate remedy, the parties agree that the foregoing covenant may be enforced by Buyer or its Affiliates by injunctions, restraining orders and other equitable actions in addition to any other relief to which Buyer may be entitled, without the necessity of posting a bond.

     (c)  Reasonable Restraint . The parties hereto acknowledge and agree that the provisions contained in this Section 9.3 are ancillary or part of an otherwise enforceable agreement and contain limitations as to time and scope of activity to be restrained that are reasonable and do not impose a greater restraint than is necessary to protect the goodwill or other business interest of Buyer.

     (d)  Material and Independent Covenant . Seller acknowledges that its agreement with the covenants set forth in this Section 9.3 are material conditions to Buyer’s agreement to execute and deliver this Agreement and to consummate the transactions contemplated hereby. All of the covenants in this Section 9.3 shall be construed as an agreement independent of any other provision in this Agreement or any other Transaction Document, and the existence of any claim or cause of action of Seller or any of its Affiliates, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement of such covenants. It is specifically agreed that the two (2) year period during which the agreements and covenants made in this Section 9.3 shall be computed by excluding from such computation any time during which Seller is in violation of any provision of this Section 9.3. The covenants contained in this Section 9.3 shall not be affected by any breach of any other provision hereof by any party hereto.

     Section 9.4 Transferred Employees; Severance .

     (a) Upon the Closing, Seller shall terminate all employees of the Business. Buyer shall invite all employees of the Business to apply for consideration for employment with Buyer upon Closing at terms and conditions of employment set by Buyer, in its sole discretion. Seller shall provide Buyer with all information reasonably requested by Buyer pertaining to such employees. Any such employees to whom Buyer offers employment and who elect to become employees of Buyer are hereinafter referred to collectively as “ Transferred Employees ” (and individually as a “ Transferred Employee ”) and all other employees are hereafter referred to as “ Retained Employees ”). Nothing in this Agreement shall be construed as giving any person any right to become an employee of Buyer or to any terms and conditions of employment, including without limitation any type or level of compensation or benefits, with Buyer. Nothing in this Agreement is intended to, nor does it confer any rights or privileges upon, any person not a party to this Agreement.

     (b) Seller shall be responsible for all pre-Closing obligations for Transferred Employees as of the Closing Date (except for those liabilities that are accrued on the Fiscal 2006 Financial Statements), and such pre-Closing obligations shall be vested and paid by Seller on the Closing Date. Seller shall be responsible for all liabilities and costs arising from or relating to any claims by or on behalf of persons who at or prior to the Closing are or were employees of Seller in the Business, in respect of severance pay, paid time off and accrued vacation for employees, accrued sick leave, personal days, shutdown benefits, and any other similar obligations or liabilities (the “ Termination Costs ”) relating to the termination of such employees’ employment with Seller, or any break in service or any other event entitling someone to payments for such benefits (a “ Termination ”), which occurs on or prior to the Closing.

     (c) Buyer shall be responsible for all Termination Costs accruing from and after the Closing Date relating to a Termination by Buyer which occurs after the Closing, in respect of any Transferred Employee.

     Section 9.5 Employee Benefits and Welfare Plans .

     (a) Buyer shall not assume any liabilities and obligations of Seller relating to employees or employee benefits. Without limiting the foregoing, Seller shall retain, and Buyer shall not assume, obligations and liabilities with respect to (i) any Plans or arrangements maintained, sponsored, contributed to, or required to be contributed to by Seller relating to Transferred Employees, Retained Employees or any other

present, former or retired employees of Seller, including without limitation liabilities and obligations for retiree benefits and (ii) except as provided in this Section 9.5, any other employee-related liabilities arising at or before, or by reason of, the Closing, or otherwise in respect of any period at or before the Closing.

     (b) Buyer shall provide or offer to provide “continuation coverage” (as defined in Section 4980B(f) of the Code) under Buyer’s group medical plan to Seller’s covered employees, including Retained Employees or former employees, and their qualified beneficiaries (as defined in Section 4980B(g) of the Code.

     (c) No assets or liabilities with respect to Transferred Employees shall be transferred, as a result of this Agreement, from any pension plans maintained, sponsored, contributed to, or required to be contributed to by Seller applicable to its employees to any plan maintained or established by Buyer, and Seller shall retain all assets related thereto and all obligations to fund or otherwise provide benefits accrued by Transferred Employees under such pension plans before the Closing.

     (d) Buyer shall provide credit for periods of service with Seller under Buyer’s plans, programs, and similar agreements, commitments or arrangements that provide benefits or compensation to or for the benefit of Buyer’s employees, including without limitation eligibility and vesting under any qualified employee benefit plan maintained by Buyer and credit under any seniority based benefit or compensation arrangement. Buyer shall further provide credit under Buyer’s group medical plan for any deductible or co-payment made by Seller’s employee’s prior to the Closing Date under Seller’s group medical plan.

     (e) Without limitation as to the provisions of Section 9.5(a) above, Seller will retain liability for all workers’ compensation liabilities of the Transferred Employees due to or based upon events occurring on or before the Closing, whether or not filed on or before the Closing. Buyer shall be liable for workers’ compensation liabilities of the Transferred Employees due to or based upon events occurring after the Closing.

     Section 9.6 Consents; Assignments; Additional Post-Closing Covenants . The parties will use their respective commercially reasonable efforts to obtain any consent, approval or amendment required to assign or transfer the Transferred Assets. With respect to the Required Consents, Seller shall use its commercially reasonable efforts to obtain the consents as soon as practicable after the Closing. Seller shall execute any such further documents or other instruments reasonably requested to complete the conveyance, or to fully vest in Buyer, good and marketable title to the Transferred Assets. In addition, from and after Closing, Seller agrees to promptly forward to Buyer all inquiries, notices, calls and other requests relating to the Business or the Transferred Assets.

     Section 9.7 Expenses . Buyer shall pay all costs and expenses incurred or to be incurred by it in negotiating and preparing this Agreement and carrying out the transactions contemplated hereby. Seller shall pay all costs and expenses incurred or to be incurred by it in negotiating and preparing this Agreement and carrying out the transactions contemplated hereby.

     Section 9.8 Exclusivity . Until the termination of this Agreement, (a) neither Seller nor its representatives or agents will solicit offers from, negotiate with or provide financial or operating information to, any third party for the purpose of determining any interest in acquiring Seller or any of its securities or material assets, (b) Seller and its representatives will cease any current discussions with any third parties concerning an acquisition transaction and shall negotiate exclusively with Buyer in connection therewith and (c) Seller will promptly notify Buyer in the event that it or any of its representatives receives any proposal concerning an acquisition of all or any part of Seller’s equity interests or all or any significant part of Seller’s assets, which notice shall include a copy of such proposal, if in writing or a summary of such proposal, if oral.

     Section 9.9 Public Disclosure . The parties shall consult with each other before issuing, and provide each other the opportunity to review and comment upon, any press release or other public statements with respect to the transactions contemplated by this Agreement, and shall not issue any such press release or

make any such public statement prior to such consultation and without the prior written consent of the other party, except as may be required by applicable Law or court process or by obligations pursuant to any listing agreement with any national securities exchange; provided , however , that any such required disclosure shall be in a form approved by each of Buyer and Seller (which such approval shall not be unreasonably withheld or delayed).

     Section 9.10 Lock-Ups . Seller hereby covenants and agrees that:

     (a) for a period commencing on the Closing Date and continuing through the date that is one (1) year after the Closing Date, Seller will not directly or indirectly sell, offer, contract or grant any option to sell (including without limitation any short sale), pledge, distribute (including without limitation by means of a stock dividend or other distribution to shareholders) or otherwise dispose of or transfer (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition of) any shares of Common Stock constituting all or any portion of the Stock Consideration; and

     (b) for a period commencing on the Closing Date and continuing through the date that is eighteen (18) months after the Closing Date, Seller will maintain in the Transaction Account cash and cash equivalents in an aggregate amount not less than $10,000,000.

     Section 9.11 Delivery of Disclosure Items .

     (a) On or before the Disclosure Delivery Deadline, Seller shall deliver to Buyer true, correct and complete copies of:

     (i) each of the Schedules for which Seller is responsible referenced in this Agreement;

     (ii) each of the written Assigned Contracts;

     (iii) each of the Owned Real Property Title Documents;

     (iv) each of the Realty Use Rights; and

     (v) each of the Plans.

     (b) Seller shall use its commercially reasonable efforts to deliver to Buyer true, correct and complete copies of the Fiscal 2006 Financial Statements on or prior to November 27, 2006, and in any event as soon as practicable after the date hereof.

     (c) On or before the Disclosure Delivery Deadline, Buyer shall:

     (i) deliver to Seller true, correct and complete copies of each of the Schedules for which Buyer is responsible referenced in this Agreement; and

     (ii) apply for the Owner Policies of Title Insurance, as more fully described in Section 5.7.

     Section 9.12 Environmental Matters . The parties hereby acknowledge and agree that, on and after the date of this Agreement and prior to the Closing, Buyer may, at its election and expense, conduct one or more Phase I environmental assessments (each a “ Phase I ”) on any of the Real Property otherwise constituting part of the Transferred Assets (the “ Subject Real Property ”). In the event that any such Phase I shall identify any Reportable Conditions on any Subject Real Property, then Buyer may, at its election and expense, conduct one or more Phase II environmental assessments (each a “ Phase II ”) on such Subject Real Property. In the event that any such Phase II shall identify any Reportable Conditions on such Subject Real Property, then at Buyer’s election (and in its sole discretion), notwithstanding anything to the contrary set forth in this Agreement, either:

     (a) such Subject Real Property shall be deemed to be an Excluded Asset, and the Closing Cash Consideration shall be reduced by an amount equal to the fair market value of such Subject Real Property (provided that as used herein “fair market value” means the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or necessity of either party); or

     (b) after the Closing, Seller shall (at its expense and under its direction and control) use its commercially reasonable best efforts to diligently and promptly remediate all such Reportable Conditions in accordance with applicable Environmental Laws.

Notwithstanding anything to the contrary set forth in this Agreement, any and all expenses of Seller or other costs to Seller in connection with any remediation pursuant to clause (b) above (including any such expenses or costs arising from third party claims) shall not constitute “Losses” for which indemnification might otherwise be available to any Buyer Indemnitee pursuant to Section 7.1 of this Agreement or to any Seller Indemnitee pursuant to Section 7.2 of this Agreement. Accordingly, all such costs and expenses shall be disregarded for all purposes under Section 7.4 of this Agreement.

     Section 9.13 Post-Closing Title Insurance Matters . After the Closing, Seller shall use its commercially reasonable efforts to assist Buyer in obtaining the Owner Policies of Title Insurance, as more fully described in Section 5.7.

     Section 9.14 Post-Closing Auditor Matters . If the Closing occurs, then for so long as Buyer would be required under the rules and regulations of the SEC (including without limitation Regulation S-X), to include any financial statements of Seller (or financial statements relating to the Transferred Assets) in a registration statement of Buyer filed under the Securities Act, (a) Seller, at Buyer’s sole cost and expense, shall allow Buyer to include the financial statements of Seller for the three year period ended October 31, 2006 in any filing by Buyer with the SEC and/or in any offering memorandum or circular prepared by Buyer in connection with a securities offering conducted pursuant to Rule 144A under the Securities Act and (b) Seller, at Buyer’s request, will request its auditors to provide to Buyer access to all work papers and accounting records in its possession relating to Seller in connection with such SEC filings or securities offerings, and Buyer shall pay all costs and expenses of such auditors in connection with such matters.

     Section 9.15 Post-Closing Accounting Matters . If the Closing occurs, then for a period of three (3) months after the Closing Date, Buyer will use its commercially reasonable efforts to cooperate with Seller such that Seller can obtain copies of its accounting records from the computer equipment, hardware and software transferred to Buyer as part of the Transferred Assets.

     Section 9.16 Tax Cooperation . Buyer and Seller shall reasonably cooperate in good faith to minimize, to