Exhibit 10.1
WESTERN NATIONAL BANK
508 WEST WALL STREET, SUITE 1100
MIDLAND, TEXAS
79701
January 18, 2008
Dawson Geophysical Company
508 West Wall Street, Suite 800
Midland, Texas 79701

         
 
  RE:   Revolving Line of Credit Loan from Western National Bank to Dawson
Geophysical Company

Gentlemen:
Pursuant to the terms of a letter loan agreement, dated as of January 18, 2007,
as amended by that certain First Amendment to Loan Agreement, dated as of
August 30, 2007, and as further amended further by that certain Second Amendment
to Loan Agreement, dated as of October 12, 2007 (as so amended, the “Existing
Loan Agreement”), Western National Bank, a national banking association
(alternatively, “Western” or the “Bank”), has previously committed to provide to
Dawson Geophysical Company, a Texas corporation (alternatively, “Dawson
Geophysical” or the “Borrower”), a revolving line of credit loan in the original
principal amount of Twenty Million and No/Dollars ($20,000,000.00) (the Existing
Loan”). The Existing Loan is evidenced by a Revolving Line of Credit Note, also
dated as of January 18, 2007, executed by the Borrower on behalf of Western, in
the original principal amount of Twenty Million and No/100 Dollars
($20,000,000.00) (the “Existing Note”). The Existing Note is secured by that
certain Security Agreement, also dated as of January 18, 2007, covering those
accounts receivable described therein (the “Existing Security Agreement”). From
time to time, the Security Agreement, and any financing statements filed to
perfect the security interest created thereunder, may be collectively referred
to herein as the“ Existing Security Instruments”.
Borrower has now requested that Western renew and extend the Existing Loan into
a new revolving line of credit loan in the original principal amount of Twenty
Million and No/100 Dollars($20,000,000.00) (the “Loan”). The Loan will be
evidenced by a Revolving Line of Credit Note, of even date herewith, executed by
the Borrower in favor of Western, in the original principal amount of Twenty
Million and No/100 Dollars ($20,000,000.00), which will renew and extend the
Existing Note (the “Note”). The Borrower’s performance under the Note will be
secured by its execution of a new Security Agreement, of even date herewith, the
security interest of which will be perfected by the filing of amendments to the
financing statement, with all covering the accounts receivable described therein
(collectively, the “Security Instruments”). This Agreement, as defined

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below, the Note, the Security Instruments, and any other documents executed
simultaneously herewith are collectively referred to as the “Loan Documents”.
Western has agreed to renew the Existing Loan into the Loan. In consideration of
Western’s renewal of the Existing Loan into the Loan, Borrower has agreed to
execute this Loan Agreement, the Note, and the Security Agreement required by
the Bank, subject to the fulfillment of the following terms and conditions of
this letter loan agreement (the “Agreement”):
I. TERMS
Agreement
This Agreement, dated as of January 18, 2008, and any extensions, renewals, or
modifications hereof.
Borrower
Dawson Geophysical Company
Bank
Western National Bank
Commitment
The lesser of the following amounts: (a) the face amount of the Note; or (b) the
Borrowing Base then in effect.
Rate
From the date of this Agreement through January 31, 2008, interest under the
Note shall accrue at an annual rate equal to five and sixty-three one-hundredths
percent (5.63%). Beginning as of February 1, 2008, interest under the Note shall
accrue at an annual rate equal to either: (a) the 30-day London Interbank
Offered Rate (“LIBOR”), plus two and one-quarter percent (2.25%), or (b) the
Prime Rate, minus three-quarters percent (.75%), as the Borrower shall choose
monthly by notifying the Bank in writing, via facsimile or e-mail, by the last
day of each month, with each change to be effective as of the first day of the
following month, provided that such interest rate shall not exceed the Highest
Lawful Rate, as defined in the Note. Should Borrower fail to notify Bank of its
election of interest rate for any given month, the interest rate shall remain at
the interest rate index chosen by Borrower for the immediately preceding month.
For purposes of this Agreement, LIBOR shall mean, with respect to each Interest
Period, as defined below, the rate as established as the 30-day LIBOR in the
money rate table of The Wall Street Journal, a Dow Jones publication, as of each
Business Day, as defined below (and for holidays or weekends, LIBOR shall be the
30-day LIBOR published in that money rate table of The Wall Street Journal, as
of the close of business on the most recent Business Day immediately preceding
such weekend or holiday). Without notice to the Borrowers or any other person,
LIBOR may change from

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time to time pursuant to the preceding sentence, with the effective date of each
change to be the effective date reflected in the money rate table of The Wall
Street Journal. Without notice to the Borrowers or any other person, LIBOR may
change from time to time pursuant to the preceding sentence, with the effective
date of each change to be the effective date reflected in the money rate table
of The Wall Street Journal. Each change in LIBOR to be charged on the Revolver
Note will become effective without notice on the commencement of each Interest
Period based upon the Index then in effect. “Interest Period” means each
consecutive one month period (the first of which shall commence on February 1,
2008), effective as of the first day of each Interest Period and ending on the
last day of each Interest Period, provided that if any Interest Period is
scheduled to end on a date for which there is no numerical equivalent to the
date on which the Interest Period commenced, then it shall end instead on the
last day of such calender month. For purposes of this Agreement, the “Prime
Rate” shall be defined as that rate established as the prime rate in the money
rate table of The Wall Street Journal, a Dow Jones publication, as of each
Business Day, as hereinafter defined, (and for holidays or weekends, the Prime
Rate shall be the prime rate published in that money rate table of The Wall
Street Journal, as of the close of business on the most recent Business Day
immediately preceding such weekend or holiday). Without notice to the Borrower
or any other person, the Prime Rate may change from time to time pursuant to the
preceding sentence, with the effective date of each change to be the effective
date reflected in the money rate table of The Wall Street Journal. The Prime
Rate is a reference rate and does not necessarily represent the lowest or best
rate actually charged to any customer. The Bank may make commercial loans or
other loans at rates of interest at, above, or below the Prime Rate. “Business
Day” shall mean any day other than a Saturday, Sunday or legal holiday for
commercial banks under the laws of the State of Texas.
Security
The Loan shall be secured by the Security Instruments.
Structure
Under the Note, funds will be available on a revolving basis through January 18,
2009, the maturity date of the Loan (the “Revolving Period”). During the
Revolving Period, the Borrower may borrow, repay, and re-borrow funds as long as
the aggregate amount (including outstanding letters of credit) does not exceed
the Commitment.
Borrowing Base
At any time, and from time to time, the amounts outstanding under the Revolver
Note shall not exceed the lesser of: (a) the face amount of the Revolver Note;
or (b) the Borrowing Base, as determined from time to time by the Bank, acting
in its sole and unlimited discretion (said lesser amount being referred to
herein as the “Revolver Commitment”). As used in this Agreement, the term
“Borrowing Base” shall mean an amount equal to percentages stated below of the
Borrower’s Eligible Accounts.
For the purposes of this Agreement, the term “Eligible Account” shall mean an
account receivable of the Borrower (net of any credit balance, trade discount,
or unbilled amount or retention) that is contractually due, for which each of
the following statements is accurate and complete (and the

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Borrower, by including such account receivable in any computation of the
Borrowing Base, shall be deemed to represent and warrant to the Bank the
accuracy and completeness of such statements):

  a.   Said account receivable is a binding and valid obligation of the obligor
thereon, in full force and effect, and enforceable in accordance with its terms;
    b.   Said account receivable is genuine, in all respects, as appearing on
its face as represented in the books and records of Borrower, and all
information set forth therein is true and correct;     c.   Said account
receivable is free of all default of any party thereto, counterclaims, offsets,
and defenses, and from any rescission, cancellation, or avoidance, and all right
thereof, whether by operation of law or otherwise;     d.   The payment of said
account receivable is not more than ninety (90) days past due the invoice date
thereof;     e.   Said account receivable is free of concessions or
understandings with the obligor thereon of any kind not disclosed to and
approved by the Bank in writing;     f.   Said account receivable is, and at all
times will be, free and clear of all liens except those in favor of the Bank;  
  g.   Said account receivable is not a receivable arising from intercompany
indebtedness existing between or among any of the Borrower;     h.   Said
account receivable is derived from sales made or services rendered to the
obligor in the ordinary course of the business of the Borrower;     i.   The
obligor on said account receivable (i) is located within the United States or
the District of Columbia; (ii) is not the subject of any bankruptcy or
insolvency proceeding, nor has a trustee or receiver been appointed for all or a
substantial part of its property, nor has said obligor made an assignment for
the benefit of creditors, admitted its inability to pay its debts as they mature
or suspended its business, (iii) is not affiliated, directly or indirectly, with
Borrower, as a subsidiary or affiliate, employee or otherwise; and (iv) is not a
state or federal government department, commission, board, bureau, or agency;  
  j.   Said account receivable is not owed by a customer whose principal place
of business is located in a foreign country; and     k.   Said account
receivable did not arise from sales to an obligor as to whom fifteen percent
(15%) or more of the total accounts receivable owing by such obligor to the
Borrower are delinquent accounts receivable (that is, an account that is more
than ninety (90) days delinquent).

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In addition to the criteria stated above for determining whether an account
receivable is an “Eligible Account”, the Bank and the Borrower agree that no
such account receivable shall constitute an Eligible Account if that account
receivable arises from any single customer, other than Client A and its
affiliates and subsidiaries (collectively, “Client A”), whose accounts
receivable constitute more than twenty-five percent (25%) of Borrower’s total
accounts receivable. The Bank agrees that an account receivable owed by Client A
to the Borrower (collectively, the “Client A Accounts”) may still qualify as an
Eligible Account even if the Client A Accounts constitute more than twenty-five
percent (25%) of Borrower’s total accounts receivable.
As used in the Existing Loan Agreement, as amended by this Amendment, at such
time as the Client A Accounts constitute more than twenty-five percent (25%) of
the Borrower’s total accounts receivable, the term “Borrowing Base” shall mean
an amount equal to the sum of the following: (A) seventy-five percent (75%) of
all of the Borrower’s Eligible Accounts owed by customers other than Client A
(collectively, the “Third Party Accounts”); and (B) thirty-five percent (35%) of
all of the Borrower’s Client A Accounts. If at any time, the Client A Accounts
constitute less than twenty-five percent (25%) of the Borrower’s total accounts
receivable, the term “Borrowing Base” shall mean an amount equal to seventy-five
percent (75%) of the Borrower’s Eligible Accounts, including both the Client A
Accounts and the Third Party Accounts. Borrower agrees that all accounts
receivable reports and financial statements submitted by the Borrower to the
Bank following the execution of this Amendment shall separately report the
Client A Accounts and the Third Party Accounts, and each set of such accounts
receivable shall be stated both as dollar amounts and as percentages of the
total accounts receivable owed to Borrower.
Based upon the terms of this Amendment, and the information provided and the
representations made by the Borrower to the Bank, the Bank hereby redetermines
the Borrowing Base, and increases it to the amount of Twenty Million and No/100
Dollars ($20,000,000.00). The Borrower may request in writing an additional
increase in the Borrowing Base, such request to be accompanied by a description
and evaluation of any additional collateral to be provided by the Bank. The Bank
may evaluate such for an increase in its sole and absolute discretion, and in
conjunction with such evaluation, may conduct a full credit analysis of the
Borrower and the existing or additional collateral.
If the aggregate amounts outstanding under the Note exceeds the Revolver
Commitment at any time, the Bank will provide written notice of that event to
Borrower. On or before the tenth (10th) day following receipt of such
notification by Borrower, Borrower will either, at the direction of the Bank,
acting in its sole and absolute discretion: (a) make a mandatory payment to the
Bank of the principal of the Note in an amount at least equal to the amount
necessary to cause the outstanding principal balance of the Note to be less than
or equal to the Revolver Commitment; or (b) create liens on other assets of
Borrower, satisfactory in nature, quantity, and value to the Bank, acting in its
sole discretion, said assets to have a fair market value sufficient to at least
equal to the amount necessary to cause the outstanding principal balance of the
Note to be less than or equal to the Revolver Commitment.

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Non-Recourse
Although the Borrower is responsible on a corporate basis for the full repayment
of principal and interest due on the Obligations and for any other Event of
Default for which the Borrower is responsible, the Bank specifically
acknowledges and agrees that neither any of the directors, officers, or
employees of the Borrower nor any of the Borrower’s shareholders shall have any
personal liability whatsoever for the repayment of the Loan. The sole party
responsible for repayment of the Loan shall be the Borrower, and the sole
security for the Loan shall be the Collateral covered by the Security
Instruments.
Purpose
Funds from the Loan shall be to renew and extend the Existing Loan and to
provide working capital to offset the increase in accounts receivable due to the
significant growth in Borrower’s business. No proceeds from the Loan shall be
used for the purpose of purchasing or carrying margin stock in violation of
Regulations G, U, or X of the Board of Governors of the Federal Reserve System.
Maturity Date
As stated, the maturity date of the Note is January 18, 2009.
II. REPRESENTATIONS AND WARRANTIES
     A. Good Standing and Identity. The Borrower is a corporation, duly
organized and in good standing under the laws of Texas. The Borrower’s legal
name is that reflected in the address of this Agreement. Borrower has the power
to own its property and to carry on its business in each jurisdiction in which
the Borrower operates.
     B. Authority and Compliance. The Borrower has full power and authority to
enter into this Agreement, to make the borrowing hereunder, to execute and
deliver the Note, to mortgage those interests covered by the Security
Instruments, and to incur the obligations provided for herein, all of which will
be duly authorized by all proper and necessary corporate action. No consent or
approval of any public authority is required as a condition to the validity of
this Agreement, the Note, and the Security Instrument, and Borrower is in
compliance with all laws and regulatory requirements to which he is subject.
     C. Litigation. There are no proceedings pending or, to the knowledge of
Borrower, threatened before any court or administrative agency that will or may
have a material adverse effect on the financial condition or operations of
Borrower, except as disclosed to the Bank in writing prior to the date of this
Agreement.
     D. Ownership of Assets. As of the date of this Agreement, Borrower has good
title to the interests covered by the Security Instruments and any other
collateral pledged and the other collateral is owned free and clear of liens.
Borrower will at all times maintain its tangible property, real and personal, in
good order and repair, taking into consideration reasonable wear and tear.

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     E. Taxes. All income taxes and other taxes due and payable through the date
of this Agreement have been paid prior to becoming delinquent.
     F. Financial Statements. The books and records of the Borrower properly
reflect the financial condition of the Borrower in all material respects, and
there has been no material change in Borrower’s financial condition as
represented in its most recent financial statements.
     G. Hazardous Wastes and Substances. To the best knowledge of the Borrower,
the Borrower and its properties are in compliance with applicable state and
federal environmental laws and regulations and the Borrower is not aware of and
has not received any notice of any violation of any applicable state or federal
environmental law or regulation and there has not heretofore been filed any
complaint, nor commenced any administrative procedure, against the Borrower or
any of its predecessors, alleging a violation of any environmental law or
regulation. Currently and from time to time, the Borrower, in the course of its
regular business, may use or generate on a portion of its properties materials
which are Hazardous Materials, as hereinafter defined. The Borrower has and will
make a good faith attempt to comply with all applicable statutes and regulations
in the use, generation and disposal of such materials. To the best of its
knowledge, the Borrower has not otherwise installed, used, generated, stored or
disposed of any hazardous waste, toxic substance, asbestos or related material
(“Hazardous Materials”) on its properties. For the purposes of this Agreement,
Hazardous Materials shall include, but shall not be limited to, substances
defined as “hazardous substances” or “toxic substances” in the Comprehensive
Environmental Response Compensation and Liability Act of 1980, as amended, 42
U.S.C. §9061, et seq., Hazardous Materials Transportation Act, 49 U.S.C. §1802,
et seq., and the Resource Conservation and Recovery Act, 42 U.S.C. §6901, et
seq., or as “hazardous substances,” “hazardous waste” or “pollutant or
contaminant” in any other applicable federal, state or local environmental law
or regulation. There do not exist upon any property owned by Borrower any
underground storage tanks or facilities, and to the knowledge of Borrower, none
of such property has ever been used for the treatment, storage, recycling, or
disposal of any Hazardous Materials.
III. CONDITIONS PRECEDENT
The provisions of this Agreement will serve as the proposed terms of the
borrowing arrangements. Prior to any funds being made available, Borrower will
execute and deliver to the Bank, in form and substance satisfactory to the Bank,
this Agreement, the Note, and the Security Instruments.
IV. COVENANTS
Unless the Bank will otherwise consent in writing, and so long as any debt
remains outstanding or the commitment still available, the Borrower agrees to
comply with the following covenants:
     A. Affirmative Covenants.
     1. As soon as available, but in any event not later than ninety (90) days
after the end of each fiscal year, Borrower will provide financial statements,
in form and substance satisfactory to the Bank, reflecting Borrower’s financial
performance as of the end of such year and the related statements of income and
changes in cash flows for such year, with the

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first fiscal year ending on September 30, 2008, such statements to be audited by
an independent certified accountant and to be prepared according to generally
accepted accounting principals, consistently applied (“GAAP”).
     2. Within ninety (90) days of the end of each fiscal quarter, with the next
quarter ending on December 31, 2007, the Borrower will submit to the Bank a
financial statement reflecting Borrower’s financial performance during the
previous calendar quarter, such statements to be reviewed by an independent
certified accountant and to be prepared according to GAAP.
     3. Within thirty (30) days of the end of each calendar month, Borrower
shall provide monthly accounts receivable aging reports.
     4. Within thirty (30) days of transmitting any tax return to any
governmental authority, the Borrower will submit to the Bank a copy of that tax
return.
     5. Within thirty (30) days following the end of each calendar month,
Borrower shall provide a monthly borrowing base report and compliance
certificate in the form attached hereto as Exhibit “A”.
     6. Borrower shall maintain an average Cash Flow Coverage Ratio of not less
than 1.50 to 1.0, calculated quarterly, beginning on December 31, 2007, from the
date of the Loan to maturity. For purposes of this Agreement, “Cash Flow
Coverage Ratio” means, with respect to any period of calculation thereof, the
ratio of the sum of: (a) the net income (or loss) from continuing operations of
Borrower during such period calculated after any and all distributions to
shareholders, plus (b) interest, depreciation, depletion, and amortization
expenses of Borrower during such period, less (c) gains from the sale of any
assets; plus (d) losses from the sale of any assets; less (e) extraordinary
adjustments to net income divided by (f) scheduled capital lease obligations and
principal and interest payments, all determined in accordance with GAAP.
     7. Borrow shall maintain a Current Ratio of not less than 1.50 to 1.0,
measured quarterly, beginning on December 31, 2007, from the date of the Loan to
maturity. For purposes of this Agreement, “Current Ratio” means, with respect to
any period of calculation thereof, the ratio of the sum of: (a) current assets,
plus (b) availability under the Revolver Loan, divided by (c) current
liabilities. Current assets shall include a minimum balance of cash, plus
marketable securities, of not less than $3,500,000.00.
     8. Borrower shall submit copies of all financial statements, reports,
notices, and proxy statements sent or made available generally by the Borrower
to its shareholders, of all regular and periodic reports and all private
placement memorandums and all registration statements and prospectuses, if any,
filed by the Borrower with any securities exchange or with the Security Exchange
Commission; and all press releases and other statements made available generally
by the Borrower to the public concerning material changes in the business of the
Borrower upon their becoming available, but in no event later than 10 days after
the same was sent.

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     9. Borrower shall maintain a minimum Tangible Net Worth of $40,000,000.00,
to be measured quarterly. “Tangible Net Worth” means the excess, if any, of the
total assets of any person over all items of indebtedness, obligations, or
liability which would be classified as liabilities of that person, for the time
period to be measured, each to be determined in accordance with GAAP; provided,
however, that for the purposes of any such computation of Tangible Net Worth,
“assets” will not include (a) goodwill (whether representing the excess of cost
over book value of assets acquired or otherwise), and (b) patents, trademarks,
trade names, copyrights, franchises, and deferred charges.
     10. For any time period for which reporting is required, Borrower will
maintain a Debt to Tangible Net Worth ratio of at least 1.50 to 1.00 to be
measured quarterly. For purposes of this paragraph, “Debt” shall mean, all
liabilities, obligations, and indebtedness of the Borrower, of any kind or
nature, now or hereafter owing, arising, due or payable, howsoever evidenced,
created, incurred, acquired or owing, whether primary, secondary, direct,
contingent, fixed, or otherwise, and “Tangible Net Worth” shall have the same
meaning set forth in paragraph (9) above.
     11. Borrower will maintain all primary operating accounts with the Bank.
     12. The Borrower will maintain its existence in good standing and comply
with all laws, regulations and governmental requirements applicable to it or to
any of its property, business operations and transactions.
     13. The Borrower will promptly pay any reasonable costs incurred by the
Bank in connection with the preparation or enforcement of this Agreement, the
Notes, the Security Instruments, and any other documentation executed
concurrently herewith.
     14. The Borrower will remain in substantial compliance with same and will
not place or permit to be placed any Hazardous Materials on any of its
properties in violation of applicable state and federal environmental laws. In
the event that the Borrower should discover any Hazardous Materials on any of
its properties that could result in a breach of the foregoing covenant, the
Borrower shall notify the Bank within three (3) days after such discovery. The
Borrower shall dispose of all material amounts of Hazardous Materials that it
generates only at facilities or with carriers that maintain valid governmental
permits under the Resource Conservation and Recovery Act, 42 U.S.C. §6901. In
the event of any notice or filing of any procedure against the Borrower alleging
a violation of any environmental law or regulation, the Borrower shall give
notice to the Bank within five (5) days after receiving notice of such notice or
filing.
     15. The Borrower will provide such other information as the Bank may
reasonably request from time to time in its sole discretion.
B. Negative Covenants.
     1. The Borrower will not make any change in its present accounting method
or change its present fiscal year.

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     2. The Borrower will not make any substantial change in the nature of its
business as now conducted.
     3. The Borrower will not reorganize or merge with any other entity, without
the prior written consent of the Bank.
     4. With respect to the Borrower’s interest in any of the properties covered
by the Security Instrument, the Borrower will not sell, contract to sell,
convey, assign, transfer, mortgage, pledge, hypothecate, encumber, or in any way
alienate that interest in such properties, without the consent of the Bank.
V. EVENTS OF DEFAULT
The occurrence and continuing existence of any one of the following will
constitute an Event of Default under this Agreement and the Note:
     A. Borrower fails to pay when due any principal, interest, or other amount
payable under this Agreement, the Note, or any other promissory notes executed
or guaranteed by the Borrower in favor of the Bank;
     B. Any representation or warranty made by the Borrower hereunder or in any
related collateral security or other documents entered into with the Bank proves
to be at any time incorrect in any significant respect;
     C. The Borrower fails to observe or perform any covenant, obligation,
agreement, or other provision contained herein or in any other contract or
instrument executed in connection herewith;
     D. Any default or defined Event of Default under any security agreement,
deed of trust, promissory note, loan agreement or other contract or instrument
executed by the Borrower pursuant to, or as required by, this Agreement;
     E. Any final judgment or judgments for the payment of money is rendered
against Borrower and is not be satisfied or discharged at least thirty (30) days
prior to the date on which any of their assets could be lawfully sold to satisfy
such judgment or judgments, unless Borrower brings litigation to stay same; or
     F. Borrower: (i) becomes insolvent, or suffers or consents to, or applies
for the appointment of a receiver, trustee, custodian or liquidator for himself
or any of his property, or generally fails to pay his debts as they become due,
or makes a general assignment for the benefit of creditors; or (ii) files a
voluntary petition in bankruptcy, or seeking reorganization, in order to effect
a plan or other arrangement with creditors or any other relief under the
Bankruptcy Reform Act, Title 11 of the United States Code, as recodified from
time to time (“Bankruptcy Code”), or as now or hereafter in effect, or any
involuntary petition or proceeding pursuant to said Bankruptcy Code or any other
applicable state or federal law relating to bankruptcy or reorganization or
other

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relief for debtors is filed or commenced against Borrower; or (iii) files any
answer admitting the jurisdiction of the court and the material allegations of
any such involuntary petition; or (iv) is adjudicated a bankrupt, under said
Bankruptcy Code or any other state or federal law relating to bankruptcy,
reorganization, or other relief for debtors.
VI. REMEDIES
If any Event of Default occurs, any term hereof or of the Note to the contrary
notwithstanding, the Note shall at the Bank’s option become immediately due and
payable. In addition, the obligation, if any, of the Bank to permit further
borrowings hereunder will immediately cease and terminate and the Bank will have
all rights, powers, and remedies available under this Agreement, the Note, or
other contracts or instruments executed in connection herewith, or accorded by
law, including, without limitation, the right to resort to any or all of the
collateral and to exercise any or all of its rights, powers, or remedies at any
time and from time to time after the occurrence of an Event of Default.
ONCE AN EVENT OF DEFAULT HAS OCCURRED, WESTERN MAY PURSUE THE REMEDIES PROVIDED
FOR IN THIS AGREEMENT, THE NOTE, AND THE SECURITY INSTRUMENTS WITHOUT
PRESENTMENT, DEMAND, PROTEST, NOTICE OF ACCELERATION, NOTICE OF INTENT TO
ACCELERATE, NOTICE OF PROTEST OR NOTICE OF DISHONOR, OR ANY OTHER NOTICE OF ANY
KIND, ALL OF WHICH ARE EXPRESSLY WAIVED BY BORROWER.
All rights, powers, and remedies of the Bank in connection with this Agreement,
the promissory notes or any other contract or instrument on which the Borrower
may at any time be obligated to the Bank (or any holder thereof) are cumulative
and not exclusive and will be in addition to any other rights, powers, or
remedies provided by law or equity, including without limitation the right to
set off any liability owing by the Bank to the Borrower (including sums
deposited in any deposit account of Borrower with the Bank) against any
liability of the Borrower to the Bank.
VII. WAIVER
No delay, failure, or discontinuation by the Bank, or any holder of the Note, in
exercising any right, power, or remedy under this Agreement, the Note or any
other contract or instrument on which the Borrower may at any time be obligated
to the Bank (or any holder thereof) will affect or operate as waiver of such
right, power or remedy. Any waiver, permit, consent, or approval of any kind by
the Bank (or any holder of the Note), or of any provisions or conditions of, or
any breach or default under this Agreement, the Note or any other contract or
instrument on which the Borrower may at any time be obligated, must be in
writing and will be effective only to the extent set forth in such writing.
VIII. NOTICES
All notices, requests, and demands given to or made upon the respective parties
must be in writing and shall be deemed to have been given or made: (1) at the
time of personal delivery thereof, (2) or

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two days after any of the same are deposited in the U.S. Mail, first class and
postage prepaid, addressed as follows:

         
 
  Borrower:   Dawson Geophysical Company
 
      508 West Wall Street, Suite 800
 
      Midland, Texas 79701
 
       
 
  Western:   Western National Bank
 
      Attention: James R. Kreuz
 
      508 West Wall Street, Suite 1100
 
      Midland, Texas 79701

or other such address as any party may designate by written notice to all other
parties.
IX. SUCCESSORS, ASSIGNMENTS
This Agreement will be binding on and inure to the benefit of the heirs,
executors, administrators, legal representatives, successors, and assigns of the
parties, provided, however, that this Agreement may not be assigned by the
Borrower without the prior written consent of the Bank. The Bank reserves the
right to sell, assign, transfer, negotiate, or grant participations in all or
any part of, or any interest in, the Bank’s rights and benefits under this
Agreement, the Note or any contracts or instruments relating thereto. In
connection therewith, the Bank may disclose all documents and information which
the Bank now has or may hereafter acquire relating to the loan or the Note, the
Borrower or his business, or any collateral required hereunder.
X. SEVERABILITY OF PROVISIONS
If any of the provisions of this Agreement shall be prohibited by or invalid
under applicable law, such provision shall be ineffective only to the extent of
such prohibition or invalidity without invalidating the remainder of such
provision or any remaining provisions of this Agreement.
XI. VENUE AND JURISDICTION
Any suit, action or proceeding against the Borrower arising out of or relating
to this Agreement or any judgment entered by any court in respect thereof, may
be brought or enforced in the courts of the State of Texas, County of Midland,
or in the United States District Court for the Western District of Texas, as
Western in its sole discretion may elect, and Borrower hereby submits to the
nonexclusive jurisdiction of such courts for the purpose of any such suit,
action or proceeding. The Borrower hereby irrevocably consents to service of
process in any suit, action or proceeding in any of said courts by the mailing
thereof by the Bank by registered or certified mail, postage prepaid, to the
Borrower, at the address set forth herein.
THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTIONS THAT THEY MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT BROUGHT IN ANY OF SAID COURTS AND HEREBY
FURTHER IRREVOCABLY

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WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM AND ANY RIGHT GRANTED BY
STATUTE, RULE OR COURT OR OTHERWISE TO HAVE SUCH SUIT, ACTION, OR PROCEEDING
TRIED BY A JURY.
XII. MISCELLANEOUS
     A. Texas Law Applicable. This Agreement, the Note, the Security
Instruments, and any contracts or instruments relating thereto, shall be
governed by and construed in accordance with the laws of the State of Texas,
except to the extent that the Bank has greater rights or remedies under federal
law or the law of any jurisdiction in which the collateral properties are
located, in which case such choice of Texas law shall not be deemed to deprive
the Bank of such rights and remedies under federal law or the law of any
jurisdiction in which the collateral properties are located, in which case such
choice of Texas law shall not be deemed to deprive the Bank of such rights and
remedies as may be available under such law.
     B. Notice of Final Agreement. THIS AGREEMENT, THE NOTE, ANY CONTRACTS OR
INSTRUMENTS RELATING THERETO, REPRESENT THE ENTIRE AGREEMENT BETWEEN THE
PARTIES, AND IT IS EXPRESSLY UNDERSTOOD THAT ALL PRIOR CONVERSATIONS OR
MEMORANDA BETWEEN THE PARTIES REGARDING THE TERMS OF THIS AGREEMENT SHALL BE
SUPERSEDED BY THIS AGREEMENT. ANY AMENDMENT, APPROVAL, OR WAIVER BY WESTERN OF
THE TERMS OF THIS AGREEMENT, THE NOTE AND ANY CONTRACTS OR INSTRUMENTS RELATING
THERETO, MUST BE IN WRITING OR CONFIRMED WRITING, AND SHALL BE EFFECTIVE ONLY TO
THE EXTENT SPECIFICALLY SET FORTH IN SUCH WRITING. THIS AGREEMENT, IN
CONJUNCTION WITH THE NOTE AND ANY CONTRACTS OR INSTRUMENTS RELATING THERETO,
SHALL SERVE TO EVIDENCE THE TERMS OF THE ENTIRE AGREEMENT BETWEEN THE PARTIES.
{The remainder of this page is intentionally left blank. Signature page
follows.}

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     Please acknowledge your acceptance of and agreement to the terms of this
Agreement by dating and executing where indicated.

            Very truly yours,

WESTERN NATIONAL BANK
      By:    /s/ James R. Kreuz       James R. Kreuz        President     

AGREED TO AND ACCEPTED AS OF THE
18th DAY OF JANUARY 2008.
BORROWER:
DAWSON GEOPHYSICAL COMPANY

         
By:
   /s/ Stephen C. Jumper    
 
 
 
     Stephen C. Jumper    
 
       President    
 
       
By:
   /s/ Christina W. Hagan    
 
 
 
     Christina W. Hagan    
 
       Secretary    

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